Jerome Joint School District No. 261

FINANCIAL MANAGEMENT 7250

Fund Accounting System

The accounts of the District are organized on the basis of funds, each of which is considered to be a separate

accounting entity. The operations of each fund are accounted for by providing a separate set of self-balancing

accounts.

Funds are established each year to meet local needs.

GASB Statement 54

To enhance the usefulness of fund balance information the District will provide clear fund balance classifications

and use fund type definitions consistently.

The policy is designed to encourage consideration of unanticipated events that could adversely affect the financial

condition of the District and jeopardize the continuation of necessary public services. The District should maintain

adequate fund balances and reserves in order to:

a. Provide sufficient cash flow for daily financial needs,

b. Secure and maintain investment grade bond ratings,

c. Offset significant economic downturns or revenue shortfalls, and

d. Provide funds for unforeseen expenditures related to emergencies.

Fund Types

The accounts of the District are organized on the basis of funds, each of which is considered to be a separate

accounting entity. The operations of each fund are accounted for by providing a separate set of self-balancing

accounts. The following funds are maintained by the District:

•  The General Fund is used to account for all financial resources not accounted for and reported in another

fund.

•  Special Revenue Funds are used to account and report the proceeds of specific revenue sources that are

restricted or committed to expenditure for specific purposes other than debt service or capital projects.

•  Debt Service Funds are used to account for all financial resources restricted, committed or assigned to

expenditure for Superintendent and interest.

•  Capital Projects Funds/Plant Facilities Funds are used to account for all financial resources restricted,

committed or assigned to expenditure for the acquisition or construction of capital assets.

•  Permanent Funds are used to account for resources restricted to the extent that only earnings, and not

principle, may be used for purposes that support the District’s purposes.

Note: The above list is not comprehensive and the District may have other funds such as an Activities Fund.

Fund Balance Reporting in Governmental Funds

The following definitions will be used in reporting activity in governmental funds across the District. The District

may or may not report all fund types in any give reporting period, based on actual circumstances and activity.

•  Non-spendable Fund Balance

Includes amounts that cannot be spent because they are either:

(a) Not in spendable form; or

(b) Legally or contractually required to be maintained intact.

•  Restricted Fund Balance

Includes amounts that can be spent only for the specific purposes stipulated by District policy, external

resource providers, or through federal regulations or State laws or rules.

•  Committed Fund Balance

Includes amounts that can be used only for the specific purposes determined by a formal action of the

Board.

•  Assigned Fund Balance

Includes amounts intended to be used by the District for specific purposes, but do not meet the criteria to

be classified as restricted or committed. In funds other than the general fund, the assigned fund balance

represents the remaining amount that is not restricted or committed.

Authority to Assign - The Board delegates to the Superintendent or designee the authority to assign

amounts to be used for specific purposes. Such assignments cannot exceed the available (spendable,

unrestricted, uncommitted) fund balance in any particular fund.

•  Unassigned Fund Balance

Includes the residual classification for the District’s general fund and includes all spendable amounts not

contained in the other classifications. In other funds, the unassigned classification should be used only to

report a deficit balance from overspending for specific purposes for which amounts had been restricted,

committed, or assigned.

Prioritization of Fund Balance Use

The Board’s primary role in adopting this policy is to identify the order of spending unrestricted resources and to

acknowledge that the Board is the ultimate decision making authority with regard to committing balances upon

recommendation of the Superintendent or designee.

If the Board chooses not to adopt a policy addressing the order of spending, the default approach of reducing

committed, then assigned, then unassigned fund balances will be used.

Guidelines

Classifying Fund Balance Amounts

Fund balance classifications depict the nature of the net resources that are reported in a fund. An individual fund

may include non-spendable resources and amounts that are restricted, committed, or assigned, or any

combination of those classifications. The general fund may also include an unassigned amount.

Encumbrance Reporting

Encumbering amounts for specific purposes for which resources have already been restricted, committed, or

assigned should not result in separate display of encumbered amounts. Encumbered amounts for specific purposes for which amounts have not been previously restricted, committed, or assigned, will be classified as committed or assigned, as appropriate, based on the definitions and criteria set forth above.

Implementation and Review

The Board authorizes the Superintendent to establish any standards and procedures which may be necessary for

its implementation. The Superintendent shall review this policy and any procedures regarding its implementation

at least annually and make any recommendations for changes to the Board.

Legal Reference: I.C. § 33-901 et seq. School Funds

I.C. § 33-701 et seq. Fiscal Affairs of School District

Governmental Accounting Standards Board (“GASB”) Statement No. 54

Policy History:

Adopted on: 11/21/06

Revised on: 08/28/12