2011T12 ANNUAL BUDGET - Granite School District

Granite School District
2011-12 Budget
Executive Summary
Fund Balances and Retained Earnings
Fund balances in the budget have been presented in accordance with GASB 54 which will be implemented
in the district’s 2010-11 Comprehensive Annual Financial Report. Fund balances for all prior years have
been restated to conform to the GASB 54 guidelines. Fund balance will be displayed in the following
classifications depicting the relative strength of the spending constraints placed on the purposes for which
resources can be used:
• Nonspendable fund balance – amounts that are not in a spendable form (such as inventory).
• Restricted fund balance – amounts constrained to specific purposes by their providers (such as
grantors, bondholders, and higher levels of government), through constitutional provisions, or by
enabling legislation.
• Committed fund balance – amounts constrained to specific purposes by the district itself, using its
highest level of decision-making authority; to be reported as committed, amounts cannot be used
for any other purpose unless the district takes the same highest-level action to remove or change
the constraint.
• Assigned fund balance – amounts the district intends to use for a specific purpose; intent can be
expressed by the Board or by the district’s Business Administrator, who has been authorized by the
Board to assign fund balances.
• Unassigned fund balance – amounts that are available for any purpose; these amounts are
reported only in the General Fund.
Under Utah law, it is unlawful to budget for an unassigned fund balance. This is in alignment with the
concept that the revenues provided to a district are intended to be used during the period for which they
were generated. That is to say that at the beginning of a fiscal year, unassigned fund balance is budgeted
to be $0. If over the course of the year, the difference between budgeted and actual revenues and
expenditures leaves an unspent balance, that unspent balance must be budgeted to be used in normal
operations during the next fiscal year so as to prevent a district from accumulating excess funds.
Fund balances may (and in some cases must) be committed or assigned and carried over to the next year
for specific purposes. As those specific purposes are part of next year’s budget and are identified as
specific commitments or assignments of fund balances, they are not available for appropriation.
In the General Fund, Utah law allows for a maximum undistributed reserve fund balance of 5% of the
adopted budget (53A-19-103). The district currently has approximately 5% in the undistributed reserve and
it is reported as a commitment of fund balance on the General Fund balance sheet as “Economic
Stabilization”. The law stipulates that the reserve may not be used in the negotiation or settlement of
contract salaries for employees. The law also states that the reserve cannot be used until the district Board
of Education provides the State Board of Education with an adopted, written resolution setting forth the
reasons for using the funds.
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