CE(LOCAL) - ANNUAL OPERATING BUDGET

Fiscal Year

The District shall operate on a fiscal year beginning July 1 and ending June 30.

Budget Planning

Budget planning shall be an integral part of overall program planning so that the budget effectively reflects the District's programs and activities and provides the resources to implement them. In the budget planning process, general educational goals, specific program goals, and alternatives for achieving program goals shall be considered, as well as input from the District- and campus-level planning and decision-making committees. Budget planning and evaluation are continuous processes and shall be a part of each month's activities.

Schedules

The Superintendent or designee shall supervise the development of a budget calendar and a specific plan for budget preparation. The budget calendar shall be adopted by the Board.

Budget Meeting

The annual public meeting to discuss the proposed budget and tax rate shall be conducted as follows:

The Board President shall request at the beginning of the meeting that all persons who desire to speak on the proposed budget and/or tax rate sign up on the sheet provided.

Prior to the beginning of the meeting, the Board may establish time limits for speakers.

Speakers shall confine their remarks to the appropriation of funds as contained in the proposed budget and/or the tax rate.

No officer or employee of the District shall be required to respond to questions from speakers at the meeting.

Authorized Expenditures

The adopted budget provides authority to expend funds for the purposes indicated and in accordance with state law, Board policy, and the District's approved purchasing procedures. The expenditure of funds shall be under the direction of the Superintendent or designee who shall ensure that funds are expended in accordance with the adopted budget.

Budget Amendments

The Board shall amend the budget when a change is made increasing any one of the functional spending categories or increasing revenue object accounts and other resources.

Fiscal Impact

All proposed budget changes shall include a statement regarding the fiscal impact on the fund balance.

Fund Balance

The District believes that sound financial management principles require that sufficient funds be retained by the District to provide a stable financial base at all times. To retain this stable financial base, the District needs to maintain a general fund balance sufficient to fund all cash flows of the District, to provide financial reserves for unanticipated expenditures and/or revenue shortfalls of an emergency nature, and to provide funds for all existing encumbrances.

Purpose

The purpose of this policy is to specify the size and composition of the District's financial reserves and to identify certain requirements for replenishing any fund balance reserves utilized.

Components of the Fund Balance

The fund balance shall consist of the following components:

Nonspendable fund balance. The nonspendable fund balance consists of funds that cannot be spent since they fall into one of the following categories:

Not in a spendable form (not expected to be converted to cash);

Inventory;

Prepaid expenditures;

Long-term receivables and loans or property acquired for sale (unless proceeds are restricted, committed, or assigned);

Legally or contractually required to be maintained intact (e.g., the principal of a permanent fund); or

Encumbrances.

Restricted fund balance. The restricted fund balance consists of funds that have external constraints such as those imposed by creditors, grantors, contributors, or laws or regulations of other governments or imposed by law through constitutional provisions or enabling legislation.

Committed fund balance. The committed fund balance consists of funds that may be used only for a specific purpose, pursuant to constraints imposed by formal action of the governmental entity's highest level of decision-making authority (the Board). The purpose for the funds can be changed only by formal action (resolution) of the Board.

Assigned fund balance. The assigned fund balance consists of amounts constrained by the District's intent that the funds be used for specific purposes, although the funds are neither restricted nor committed as described above. The assigned fund balance is designated by the Board or by the Board's designees, the Superintendent, or the chief financial officer authorized to establish this classification.

Unassigned fund balance. The unassigned fund balance consists of all the remaining fund balance not classified as nonspendable, restricted, committed, or assigned.

Fund Balance Target

Unassigned fund balance target. The District shall maintain an unassigned fund balance sufficiently adequate for fiscal cash liquidity purposes (i.e., fiscal reserve) that will provide for sufficient cash flow to minimize the potential of short-term tax anticipation borrowing. This amount shall be equal to not less than 20 percent of the combined budgeted expenditures of the District general fund, excluding Chapter 41 recapture expenditures. The District's chief financial officer shall annually calculate and verify to the Board the District's compliance with this policy.

Formula

In determining compliance, the following formula shall be used: the audited balance available in the unassigned fund balance of the District's general fund for the most recently audited fiscal year, divided by the operating expenditures, excluding Chapter 41 recapture expenditures.

Use

The unassigned fund balance represents balances available for appropriation at the discretion of the Board. However, the Board shall make every reasonable effort to use these unassigned funds for the following purposes, listed in order of priority:

To increase committed fund balances as deemed necessary.

To increase assigned fund balances as deemed necessary.

To use as beginning cash balance in support of the annual budget.

The Board recognizes that any such funds should be appropriated for non-recurring expenditures as they represent prior year surpluses that may or may not materialize in subsequent fiscal years.

Monitoring and Reporting

The Superintendent and chief financial officer shall annually prepare a report documenting the status of the fund balance in accordance with this policy and shall present it to the Board in conjunction with the development of the annual budget.

Replenishment of the Unassigned Fund Balance

In the event the unassigned fund balance amount falls below the 20 percent targeted level, the Board shall, within 24 months, adopt a plan to restore this balance to the target level. If restoration of the reserve cannot be accomplished with this period without severe hardship to the District, the Board shall establish a different time period.

Effective Date

This policy shall be effective as of the adoption date, October 26, 2015.

Austin ISD

CE(LOCAL)-X

LDU 2015.13

DATE ISSUED: 11/5/2015