Policy 3100 - District Budget
Series: 3000 - Business and Non-Instructional Operations
Policy: 3100 - District Budget
Adopted: 05/11/1967
Last Revised: 07/14/2015
Last Reviewed: 09/19/2024
District Budget
The Board of Education recognizes its critical responsibility for adopting a sound budget for each fiscal year which is aligned with the district’s vision, goals, priorities, local control and accountability plan (LCAP), and other comprehensive plans. The district budget shall guide administrative decisions and actions throughout the year and shall serve as a tool for monitoring the fiscal health of the district.
The district budget shall show a complete plan and itemized statement of all proposed expenditures and all estimated revenues for the following fiscal year, together with a comparison of revenues and expenditures for the current fiscal year. The budget shall also include the appropriations limit and the total annual appropriations subject to limitation as determined pursuant to Government code.
The Superintendent or designee shall establish an annual budget development process and calendar in accordance with the single budget adoption process described in the Education Code. They shall annually notify the County Superintendent of Schools of the district’s decision to use the single budget adoption process in the subsequent year.
In order to provide guidance in the development of the budget, the Board shall annually establish budget priorities based on identified district needs and goals and on realistic projections of available funds.
The Superintendent or designee shall oversee the preparation of a proposed district budget for approval by the Board and shall involve appropriate staff in the development of budget projections.
The Board encourages public input in the budget development process and shall hold public hearings and meetings in accordance with the Education Code.
At a public meeting held on a date after the public hearing on the budget, the Board shall adopt the budget following its adoption of the LCAP or an annual update to the LCAP at the same meeting. The budget shall include the expenditures necessary to implement the LCAP or the annual update to the LCAP.
The budget that is formally adopted by the Board shall adhere to the state’s Standardized Account Code Structure and be in the format prescribed by the Superintendent of Public Instruction. The Superintendent or designee may supplement this format with additional information as necessary to effectively communicate the budget to the Board, staff, and public.
No later than five days after the Board adopts the district budget or by July 1, whichever occurs first, the Board shall file with the County Superintendent of Schools the adopted district budget and supporting data. The budget and supporting data shall be maintained and made available for public review.
In developing the district budget, the Superintendent or designee shall analyze criteria and standards adopted by the State Board of Education which address estimation of funded average daily attendance (ADA), projected enrollment, ratio of ADA to enrollment, projected revenue limit, salaries and benefits, other revenues and expenditures, facilities maintenance, deficit spending, fund balance, and reserves. The budget review shall also identify supplemental information regarding contingent liabilities, use of one-time revenues for ongoing expenditures, use of ongoing revenues for one-time expenditures, contingent revenues, contributions, long-term commitments, unfunded liabilities, status of labor agreements, the LCAP and LCAP expenditures.
The Board intends to maintain a minimum assigned and unassigned fund balance in an amount the Board deems sufficient to maintain fiscal solvency and stability and to protect the district against unforeseen circumstances.
If the County Superintendent disapproves or conditionally approves the district's budget, the Board shall review and respond to those recommendations at a public meeting on or before September 8. The response shall include any revisions to the adopted budget and any other proposed actions to be taken as a result of those recommendations.
The district budget shall provide for increasing or improving services for unduplicated students at least in proportion to the increase in funds apportioned on the basis of the number and concentration of unduplicated students. Unduplicated students are students who are eligible for free or reduced-price meals, English learners, and/or foster youth.
The Board may establish other budget assumptions or parameters which may take into consideration the stability of funding sources, legal requirements and constraints on the use of funds, anticipated increases and/or decreases in the cost of services and supplies, program requirements, and any other factors necessary to ensure that the budget is a realistic plan for district revenues and expenditures.
Fund Balance
The Board shall adopt a formal resolution that provides for classification of fund balances in the general fund and is compliant with Governmental Accounting Standards Board (GASB) Statement 54, as follows:
- Non-spendable fund balance includes amounts that are not expected to be converted to cash, such as resources that are not in a spendable form (e.g., inventories and prepaids) or that are legally or contractually required to be maintained intact.
- Restricted fund balance includes amounts constrained to specific purposes by their providers or by law.
- Committed fund balance includes amounts constrained to specific purposes by the Board.
For this purpose, all commitments of funds shall be approved by a majority vote of the Board. The constraints shall be imposed no later than the end of the reporting period (June 30), although the actual amounts may be determined subsequent to that date but prior to the issuance of the financial statements.
- Assigned fund balance includes amounts which are intended for a specific purpose but do not meet the criteria to be classified as restricted or committed.
The Board delegates authority to assign funds to the assigned fund balance to the Superintendent and authorizes the assignment of such funds to be made any time prior to the issuance of the financial statements. The Superintendent may further delegate the authority to assign funds at their discretion.
- Unassigned fund balance includes amounts that are available for any purpose.
When multiple types of funds are available for an expenditure, the district shall first utilize funds from the restricted fund balance as appropriate, then from the committed fund balance, then from the assigned fund balance, and lastly from the unassigned fund balance.
If the assigned and unassigned fund balance falls below the level set by the Board due to an emergency situation, unexpected expenditures, or revenue shortfalls, the Board shall develop a plan to recover the fund balance which may include dedicating new unrestricted revenues, reducing expenditures, and/or increasing revenues or pursuing other funding sources.
Long-Term Financial Obligations
The district’s current-year budget and multi-year projections shall include adequate provisions for addressing the district’s long-term financial obligations, including, but not limited to, long-term obligations resulting from collective bargaining agreements, financing of facilities projects, unfunded or future liability for retiree benefits, and accrued workers’ compensation claims.
Budget Amendments
Whenever revenues and expenditures change significantly throughout the year, the Superintendent or designee shall recommend budget amendments to ensure accurate projections of the district's net ending balance. When final figures for the prior-year budget are available, this information shall be used as soon as possible to update the current-year budget's beginning balance and projected revenues and expenditures.
In addition, budget amendments shall be submitted for Board approval as necessary when collective bargaining agreements are accepted, district income declines, increased revenues or unanticipated savings are made available to the district, program proposals are significantly different from those approved during budget adoption, inter-fund transfers are needed to meet actual program expenditures, and/or other significant changes occur that impact budget projections.
Legal References
Policy Reference Disclaimer:
These references are not intended to be part of the policy itself, nor do they indicate the basis or authority for the Board to enact this policy. Instead, they are provided as additional resources for those interested in the subject matter of the policy.
STATE
CALIFORNIA CODE OF REGULATIONS
5 CCR 15060 Standardized account code structure
5 CCR 15440-15451 Criteria and standards for school district budgets
5 CCR 15494-15497 Local control and accountability plan and spending requirements
ATTENDANCE RECOVERY PROGRAM
Attendance Recovery Program
EDUCATION CODE
1240 County superintendent of schools; duties
33127 Standards and criteria for local budgets and expenditures
41202 Determination of minimum level of education funding
42103 Budget notification
42122-42129 Budget requirements
42130-42134 Financial reports and certifications
42140-42142 Public disclosure of fiscal obligations
42238-42251 Apportionments to districts
42238.01-42238.07 Local control funding formula
42602 Use of unbudgeted funds
42610 Appropriation of excess funds and limitation thereon
45253 Annual budget of personnel commission
45254 First year budget of personnel commission
52060-52077 Local control and accountability plan
GOVERNMENT CODE
21710-21716 California Employer's Pension Prefunding Trust Program
7900-7914 Appropriations limit
MANAGEMENT RESOURCES
CALIFORNIA DEPARTMENT OF EDUCATION PUBLICATIONS
New Requirements for Reporting Fund Balance in Governmental Funds, January 7, 2011
California School Accounting Manual
FISCAL CRISIS & MANAGEMENT ASSISTANCE TEAM PUBLICATION
Fiscal Oversight Guide for AB 1200, AB 2756, AB 1840 and Related Legislation, June 2019
GOVERNMENT FINANCE OFFICERS ASSOCIATION
Best Practice: Fund Balance Guidelines for the General Fund, September 2015
GOVERNMENTAL ACCOUNTING STANDARDS BOARD STATEMENT
Pronouncements
Statement 54, Fund Balance Reporting and Governmental Fund Type Definitions, 2/2009
Statement 75, Accounting and Financial Reporting for Post-employment Benefits Other Than Pensions, 6/2015
WEBSITES
CSBA District and County Office of Education Legal Services https://legalservices.csba.org/#
California Department of Finance http://www.gasb.org/
Governmental Accounting Standards Board http://www.gasb.org/
California Department of Education, Finance and Grants http://www.cde.ca.gov/fg
Government Finance Officers Association http://www.gfoa.org/
Association of California School Administrators http://www.acsa.org/
School Services of California, Inc. http://www.sscal.com/
CSBA http://www.csba.org/
Fiscal Crisis and Management Assistance Team https://www.fcmat.org/
Rule 3100
District Budget
The district budget shall be prepared annually from the best possible estimates that individual schools and district administrative staff can provide. Appropriate consolidation shall occur as the budget progresses through the various levels of review.
The district budget shall be developed in accordance with standards and criteria for fiscal accountability adopted by the State Board of Education. The chief business officer will submit all proposed budgets and revisions as required by Education Code.
Before adopting the district budget for the subsequent fiscal year, the Board of Education shall hold a public hearing. An agenda for this hearing shall be posted at least 72 hours before the hearing and shall indicate the location where the budget may be inspected. The proposed budget shall be available for public inspection at least three working days before this hearing.
The superintendent or designee shall notify the County Superintendent of Schools of the location, dates, and times at which the proposed budget may be inspected, as well as the location, date, and time of the public hearing, in sufficient time for the County Superintendent to publish such information in a newspaper of general circulation at least 10 days but not more than 45 days before the hearing.
Any district resident may appear at the public hearing and speak to the proposed budget or any item on the budget. The hearing may conclude when all residents who so desire have had the opportunity to be heard. Sufficient time shall be allowed so that the budget will be adopted by July 1.
The district’s budget shall be presented in the format prescribed by the Superintendent of Public Instruction.
The Superintendent or designee shall file the adopted budget with the County Superintendent no later than five days after adoption or by July 1, whichever occurs first. The budget and supporting data shall be maintained and made available for public review.
No later than 45 days after the Governor signs the annual Budget Act, the superintendent or designee shall make available for public review any revisions in budgeted revenues and expenditures which are consequently necessary.
Whenever the proposed district budget includes a combined assigned and unassigned ending fund balance that exceeds the minimum recommended reserve for economic uncertainties adopted by the State Board of Education, the district shall provide, for each fiscal year included in the budget, the following information for public review and discussion at the public hearing: (Education Code 42127; 5 CCR 15450)
- The minimum recommended reserve for economic uncertainties
- The combined assigned and unassigned ending fund balances that are in excess of the minimum recommended reserve
- A statement of reasons substantiating the need for the combined assigned and unassigned ending balances that are in excess of the minimum recommended reserve
If the district's budget is disapproved by the County Superintendent for any reason other than his/her disapproval of the district's local control and accountability plan (LCAP) or annual update to the LCAP, the budget shall be reviewed by a budget review committee, unless the Board and County Superintendent agree to waive the requirement and the California Department of Education accepts the waiver.