Financial Condition of Iowa Schools

Staff and Patrons:
A spreadsheet from the Department of Education was sent out on my email distribution list. The spreadsheet provides preliminary information on the total general fund expenditures, unspent balance, undesignated/unreserved fund, and total cash and investments for all Iowa school districts for fiscal year 2008 (July 1, 2007 - June 30, 2008). This financial information is compiled by the Iowa Department of Management and Budget.

Unspent balance is the difference between the total general fund expenditures and the maximum allowable expenditures or budget authority. A district that overspends (negative unspent balance) their maximum allowable expenditures is subject to review by the School Budget Review Committee (SBRC), and must submit a plan to the SBRC to work towards a positive unspent balance. Sidney CSD finished the 2008 fiscal year with a positive unspent balance of $504,973.52. The Iowa Association of School Boards recommends a minimum positive unspent balance of $1,000 per student. Sidney's 2008 certified enrollment was 385 students.

Undesignated/unreserved fund balance is essentially the amount of cash in the general fund as of June 30, 2008. Sidney CSD finished the 2008 fiscal year with a balance of $799,985.83. The Iowa Association of School Boards recommends a minimum $1 of cash in the undesignated/unreserved fund balance for every $1 of unspent balance. Sidney CSD finished fiscal year 2008 with $1.58 in cash for every $1 of unspent balance. Districts with negative undesignated/unreserved fund balances have two courses of action: 1] borrow money to meet financial obligations; and/or 2] increase the property tax levy for additional cash.

At the end of fiscal year 2008 Sidney CSD was in a fiscally stable and sound position. However, these two key financial trends warrant continual scrutiny. In recent years more and more districts have seen spending authority eroded at an accelerated rate as student enrollment decreases. Also, the economic downturn has made uncertain the level of future state funding for PK-12 education.

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