Maintain a strong and forward planning fund balance policy
In order to help protect LEISD from a future financial crisis, a fund balance policy must address possible future critical shortfalls and set levels of financial reserves.
- At minimum, the District shall maintain unassigned fund balances in the general operating fund in an amount equal to or greater than 24 percent of the total annual operating expenditures.
- The District shall maintain fund balances for critical short-falls due to the uncertainty of state funding, fluctuating enrollment, and unpredictable taxable assessed values.
- The District fund balance includes 3-5% of the “Net total State/Local M&O revenue” in state funding template as of the time of the initial budget for future unknown legislative changes or short-falls in state funding.
- The District fund balance includes a reserve for the recapture of funds by the state due to Chapter 41 wealth equalization formula. These funds may be used to cover future budgetary short-falls as a result of increases in state recapture.
- The District fund balance includes funds for Operational Infrastructure to help protect the District in cases of an operational emergency.
- The District fund balance includes funds for Technology Infrastructure to help protect the District financially in cases of a technology emergency.
- The District's discretionary fund balance will be maintained at a level which may fund one-time expenditures. The District will safeguard against operating out of fund balance for on-going operational costs. The safeguard may include a minimum discretionary fund balance level taking into consideration future financial pressures.
The success of the following five strategies is critical to the financial success of the District:
- Maintain a strong and forward planning fund balance policy
- Establish financial systems and processes built on timing, transparency, and accountability
- Identify and monitor the major variables which generate district revenue
- Identify, monitor, and control major appropriations
- Develop and monitor a forecasting model built on fiscally conservative budgeting methodology