Fiduciary Responsibility
The Board recognizes its fiduciary responsibility to oversee the management of school district funds in keeping with the school district’s vision, mission, and goals. To achieve this purpose, the board may engage in learning about the financial needs, operations, and requirements of the district as appropriate for the board’s understanding of the district’s financial position. The Board also commits to engaging in annual financial goal setting for the district based upon measurable data and projections for the district.
After the fiscal year has closed, the Superintendent or their designee will provide to the Board concise, timely, well organized financial data. At least annually, the Board will consider the following financial information in establishing and reviewing annual financial goals:
- Revenues by fund and major sources as of June 30 for each year for the prior three years
- Expenditures by fund and major categories as of June 30 each year for prior three years
- Financial solvency ratio as of June 30 each year for the prior five years
- Unspent Balance as of June 30 each year for the prior five years
- Unspent Balance Ratio as of June 30 each year for the prior five years
- Enrollment Trend for prior ten years
- Staff costs as percent of total general fund as of June 30 each year for prior ten years
Financial Metrics
The District is committed to utilizing the following financial metrics in determining district financial goals:
- Unspent Authorized Budget (UAB) Percentage: Unspent Authorized Budget or unspent balance is the amount of spending authority remaining at the end of the fiscal year. The UAB Percentage is calculated by dividing the UAB by the current year spending authority. The District will seek to maintain a UAB Percentage within the 15%-25% range to hedge against overspending and unforeseen expenses. The current year’s projected balance will be discussed with the Board before establishing the succeeding year’s cash reserve levy and before staffing and other spending decisions are finalized for the succeeding year.
- Solvency Ratio: Solvency Ratio is the hypothetical percentage of remaining revenue assuming the district were to end operations at the end of the current fiscal year, after receiving all yearly revenues and meeting all financial obligations. Solvency Ratio is calculated by dividing the Assigned and Unassigned General Fund Balance by Total General Fund Revenues minus AEA Flow-Through funds. The District will seek to maintain a Solvency Ratio within the 8%-15% target range with 5% being a minimum goal. The current year’s projected balance will be discussed with the Board before staffing and other spending decisions are finalized for the succeeding year.
- Enrollment Trends: The Iowa school foundation formula is driven by student enrollment. Both increasing and decreasing enrollment impact the district’s spending authority and costs. The District will seek to monitor long-term and short-term enrollment trends to anticipate staffing needs and likely expenditures.
The District will measure whether these goals were obtained as of June 30, but only after completion of the Certified Annual Report due September 15th each year.
Approved: January 25, 2024
Reviewed:
Revised:
