Telephone: 780.778.2800 Toll Free: 1.800.262.8674

Return to Administrative Procedures

501

School Accumulated Surplus and Reserves

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. Surpluses or deficits occur at year-end for individual school sites within the normal course of operations, timing of events and accounting cut-off rules. As such, the actual expenditures within a given year may vary relative to the original budget, resulting in an overall o\positive or negative carryover balance. In addition, schools may wish to establish a reserve for large capital items such as photocopiers.

This procedure establishes reasonable limits for surpluses and the process to establish a reserve for a larger purchase.

Definitions

Reserve Allocation:  A line item within the school budget that will transfer all or a portion of reserve funding requested by the schools to a maximum of the total school reserve.

School Surplus:  The amount in which a school's allocations and revenues exceed that school's expenditures at August 31 (year-end).

School Deficit:  The amount in which a school's expenditures exceed that school's allocations and revenues at August 31 (year-end).

School Reserves:  Funds set aside for expenditures in a future year as approved by the Superintendent. Once the funds have been designated they cannot to transferred back into the schools' regular carryover.

Procedures

  1. With respect to School Surplus:
    1. School Surpluses shall be brought forward to the school's budget for the subsequent year, up to the maximum permitted amount:
      1. A school's maximum carryover is 3% of revenue and allocations to a maximum of $75,000.00.
      2. Amounts in excess of the maximum will be directed to offset costs of the Division Instructional Pool.
  2. With respect to School Deficit:
    1. School deficits shall be brought forward to the school's budget for the subsequent year.
    2. School deficits greater than 2% shall require a written plan, presented to the Superintendent or designate, defining how the school intends to recover the deficit.
  3. School 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 or supporting an appropriate product or service that could not normally be acquired within the funding allocation for a single year.
      2. Schools shall budget their contributions into reserves in the spring Budget File template.
      3. Dollars allocated to a school reserve fund shall be held in trust in a Division account.
      4. The allocation to the reserve fund must be reported annually to the Superintendent.
      5. The time frame for application of the reserve fund must not be longer than three (3) years.
      6. 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.
  4. Utilization of reserve dollars may occur:
    1. Through a reserve allocation prepared during the budget preparation, or
    2. Through a request to the Superintendent to release the funds with a journal entry.
  5. The Superintendent may approve exceptions to the limits mentioned above.

References:

Section 197 Education Act

Board Policy 12 Role of the Superintendent

 

Revised September 2020

Revised April 2016