AP 524: School Carryovers And Reserves
Business & Finance
Background
Carryovers (surpluses) or deficits occur at year-end for individual school sites within the normal course of operations, timing of events and accounting cut-off rules. As such, the actual expenditures within a given year may vary relative to the original budget, resulting in an overall positive or negative carryover balance. In addition, schools may wish to establish a reserve for large capital items such as photocopiers.
This procedure establishes reasonable limits for carryovers and the process to establish a reserve for a larger purchase.
Definitions
a) Reserve Allocation: A line item within the school budget that will transfer all or a portion of reserve funding requested by the schools to a maximum of the total school reserve.
b) School Carryover (Surplus): The amount in which a school’s allocations and revenues exceed that school’s expenditures at August 31 (year-end).
c) School Deficit: The amount in which a school’s expenditures exceed that school’s allocations and revenues at August 31 (year-end).
d) School Reserves: Funds set aside for expenditures in a future year as approved by the Superintendent. Once the funds have been designated they cannot be transferred back into the school’s regular carryover.
Procedures
1. With respect to School Carryover (Surplus):
1.1. School carryovers shall be brought forward to the school’s budget for the subsequent year, up to the maximum permitted amount:
1.1.1. A school’s maximum carryover is 3% of revenue and allocations to a maximum of $50,000.
2. With respect to School Deficit:
2.1. School deficits shall be brought forward to the school’s budget for the subsequent year;
2.2. School deficits greater than 2% shall require a written plan, presented to the Superintendent or designate, defining how the school intends to recover the deficit.
3. With respect to School Reserves:
3.1. Reserves for capital items shall be preapproved by the Superintendent;
3.2. Schools shall budget their contributions into reserves in the spring and fall budget file templates.
3.3. The Principal shall include accompanying notes specifying the intent of capital item purchase where prudent to do so.
4. Utilization of reserve dollars may occur:
4.1. Through a reserve allocation prepared during the spring and fall budget preparation, or
4.2. Through a request to Financial Services to release the funds with a journal entry.
5. The Associate Superintendent of Corporate Supports and Services may approve exceptions to the limits mentioned above.
