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511

School Reserve Funds/Accumulated Surplus

Background

Principals may need to carry forward a reserve fund and/or an accumulated surplus. A delicate balance is required between expending funds on current students and not disadvantaging future students.

Definitions

Total Revenue is defined as the actual sum, according to the Annual Financial Statement, of the prior year reserve/deficit, Division allocation and curricular fees.

Restricted reserve funds are funds which have been set aside for a specific purpose.

Unrestricted reserve funds are funds which have been set aside for use for general purposes in the future.

Procedures

  1. School Restricted Reserve Funds 
    1. A Principal may establish a reserve fund subject to the following conditions:
      1. The fund must have a specific purpose, clearly described, with the purpose of acquiring an appropriate product or service that could not normally be acquired within the funding allocation for a single year.
      2. Dollars allocated to a school reserve fund shall be held in trust in a Division account.
      3. The allocation to the reserve fund must be reported annually to all stakeholders.
      4. The timeframe for application of the reserve fund must not be longer than five (5) years.
      5. Application for the establishment of a school reserve fund shall be made in writing to the Superintendent. The release of reserve funds requires a written request and the approval of the Superintendent.
  2. Year End Accumulated Unrestricted Surplus
    1. In addition to the establishment of a school restricted reserve fund, at the completion of each fiscal year, a school’s accumulated unrestricted surplus may carry forward to the following fiscal year to a maximum of six (6%) percent of total revenue for the year ended. 
    2. Accumulated surpluses carried forward as outlined above are available for the operation of the school. 
    3. The Division shall pool funds that exceed the maximum allowable accumulated unrestricted surpluses and redistribute them under the direction of the Superintendent.

References:

Sections 20, 60, 61, 113, 116 School Act

Board Policy 12 Role of the Superintendent

 

Revised April 2016