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DCPS Budgeting Practices

DCPS Budgeting Practices

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Published by: topher_sanders on Feb 25, 2012
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02/25/2012

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DCPS Budgeting Practices
The District follows conservative and best business practices for the budgeting of our schools, whichis in line with Florida Statutes 1001.51 (11)(g), 1001.42 (12)(g) and School Board policy 7.10. Allapproved expenditures within DCPS budgets are currently fully funded.
 
Districts who have not followed best business practices for budgeting have found themselves infinancial trouble, including DCPS in 1988. That year, the district was forced to cancel purchases due tothe misuse of lapse salaries and other unfunded expenditures in order to not finish the year in adeficit. The following year new procedures were implemented to ensure that all future budgets willbe fully funded. This best business practice is common among other large urban districts in Florida.Over the prior four years, the fund balance/roll forward of the District has increased from $100M to$134M as cited in the Comprehensive Annual Financial Report (CAFR).In 2010-11 DCPS rolled a fund balance of $164M. Of this amount, $63M is restricted as defined by thestate, leaving a balance of $101M. The increase in fund balance/roll forward was due to the Districttransferring operating expenses to one-time federally funded allocations (EduJobs - $26M) proactivelyanticipating the district’s funding shortfall.The projected revenue for this year (2012) is $847M plus the roll forward of $164M for a total revenueof $1.01B which is equal to the district’s total appropriations of $1.01B. The district is required to havea balanced budget per Florida Statute. The roll forward amount is available on June 30 (last day offiscal year), however on July 1 (first day of the following fiscal year), that roll forward amount isincluded in the total revenue for the district to balance the budget and cover all budgetappropriations. Therefore, the only funds available to help offset the budget deficit are the budgetedfund balance of 3%, which is $26,748,559. This fund balance is the amount of money that the schooldistrict must maintain by state law to be used only in the case of an emergency (Statute 1011.051).However, the use of fund balance is still restricted, in that you cannot fall below a 3% fund balancewithout the Superintendent providing written notification to the state.The district anticipates the roll forward caused by lapsed salaries, vacancies, attrition and other non-salary account balances and uses it in the budget the following year. For example – a teacher leaveshis/her position in March and a substitute is used for the remainder of the year. The salary that wasbudgeted for the position becomes part of the roll forward at the end of the year. The position is stillneeded the next year and would be budgeted as such with a new employee being hired. Therefore,utilizing the fund balance to cover the deficit could result in major budget reductions the followingyear, a downgrade in our district bond rating and would leave no funds beyond the required 3% tocover unexpected requirements.Due to the aforementioned use of federal funds (EduJobs and state fiscal stabilization) no longer beingavailable, the district is projecting a total fund balance of $110-$120 million for 2012/2013.Utilizing the fund balance for reoccurring expenses would not be a recommendation of theSuperintendent or Chief Financial Officer.

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