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Maintaining a net accumulated surplus available to fund future operations provides for operational
flexibility. A surplus of approximately 2% to 3% of expenses is considered reasonable. At 30 June 2014
VBE’s net accumulated surplus is 3.7% of operating expenses.
Finding 4.3: Board attention is needed to address the Accumulated Surplus balance
which is increasing, to stay within a reasonable range
Accumulated Surplus:
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VBE’s Accumulated Surplus is reasonable when compared to other school district’s (prior to these
districts transfers of their operating surpluses to the LCR)
As noted in the following Section, the Accumulated Surplus is expected to decrease in SY2014/15
by $6.0M from $28.4M to $22.4M
Net accumulated surplus:
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The SY2013/14 balance is outside a reasonable range of 2% to 3% of expenses
Recommendation 4.3
The Board establish a guidance threshold target for Net Accumulated Surpluses. Such threshold target
should be developed in conjunction with the preparation of the three year financial forecast
(Recommendation 3.5)
EY is of the view that a threshold target for Net Accumulated Surpluses of 2% to 3% of VBE operating
expenses would be reasonable
Recommendation 4.4
MEd establish guidance threshold targets for Net Accumulated Surpluses for all school districts
including consideration of the LCR
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