|
|
|
|
|
|
|
|
|
Meeting Date:
|
3/16/2022 - 3:30 PM
|
|
Category:
|
Action Items
|
|
Type:
|
Action
|
|
Subject:
|
14.6 BUSINESS: Resolution No. 21:21-22 - Resolution of the Board of Trustees of the Perris Union High School District Adopting Fund Balance Policies as Required by Governmental Accounting Standards Board (GASB) 54
|
|
Strategic Plan:
|
|
|
Enclosure
|
|
|
File Attachment:
|
|
|
Summary:
|
Governmental Accounting Standards Board Statement No. 54 (GASB 54) changed how fund balances for governmental funds are presented on financial statements and implemented fund balance classifications in the five-tier hierarchy of nonspendable, restricted, committed, assigned and unassigned. It also requires school districts to adopt a fund balance policy setting minimum fund balances, including that of the Reserve for Economic Uncertainties (REU). This policy was last approved by the Board of Trustees on June 29, 2011.
At the State level, with all criteria having been met to require a deposit into the Public School System Stabilization Account (PSSSA), the Proposition 98 Rainy Day Fund, the reserve cap of 10% has been triggered pursuant to Education Code Section 42127.01 for school districts beginning in 2022-23. The reserve levels are defined as the unrestricted ending fund balance for the General Fund, plus the ending balance for Fund 17 (Special Reserve for Other Than Capital Outlay Projects), as a percentage of the total General Fund (including restricted programs) expenditures, transfers out, and other uses.
It is recommended that the Board of Trustees adopt the attached resolution 21:21-22 to update fund balance policies in accordance with GASB 54 and to maintain compliance with the reserve cap. The existing policy provides for a minimum REU equal to 3%, and to the extent possible, an additional two (2) months of general fund annual operating expenditures. The total of these amounts exceed 10% making the District out of compliance in 2022-23. The recommended policy update for the minimum REU is 6%, with an exception to reduce the REU to the state minimum of 3% when a budget shortfall exists that would require a reduction in service levels.
Resolution 21:21-22 continues to allow the Board of Trustees to commit funds for specific costs such as special education cost increases, increasing CalSTRS/CalPERS contributions, or other District priorities. Amounts set aside by the Board of Trustees are classified as a Committed Fund Balance and do not fall within the reserve cap of 10%. The fund balance policy also continues to allow the Chief Business Official to assign fund balances for a specific purpose as intended by the Board of Trustees. These are classified as an Assigned Fund Balance, and unlike the Committed Fund Balance, are calculated as part of the reserve cap of 10%.
The updated fund balance policy will allow the District to be in compliance with GASB 54 as well as Education Code Section 42127.01. Having adequate reserves and a supporting fund balance policy provide the framework for fiscal solvency and a prudent level of financial resources to protect against the need to reduce service levels because of temporary revenue shortfalls or unanticipated expenditures. Further, it allows for the ability to be more strategic in reducing expenditures when faced with a financial crisis.
|
|
Funding:
|
There is no cost to this item.
|
|
Recommendation:
|
It is recommended that the Board of Trustees vote to adopt Resolution No. 21:21-22 - Resolution of the Board of Trustees of the Perris Union High School District Adopting Fund Balance Policies as Required by Governmental Accounting Standards Board (GASB) 54.
|
|
Approvals:
|
|
Recommended By:
|
|
Signed By:
|
|
|
Alisha Underwood - Director of Fiscal Services
|
|
|
Signed By:
|
|
|
Candace Reines - Deputy Superintendent
|
|
|
Signed By:
|
|
|
Grant Bennett - Superintendent
|
|
|
|
|
Vote Results:
|
| Original Motion | | Member Dr. Jose Luis Araux Moved, Member Dr. Randall Freeman seconded to approve the Original motion 'It is recommended that the Board of Trustees vote to adopt Resolution No. 21:21-22 - Resolution of the Board of Trustees of the Perris Union High School District Adopting Fund Balance Policies as Required by Governmental Accounting Standards Board (GASB) 54.'. Upon a Roll-Call Vote being taken, the vote was: Aye: 5 Nay: 0. | | The motion Carried 5 - 0 | | | | | Elizabeth Vallejo | Yes | | David Nelissen | Yes | | Dr. Jose Luis Araux | Yes | | Anthony T. Stafford, Sr. | Yes | | Dr. Randall Freeman | Yes | |
|
|
|
|
|
|
|