Budget Badge #06 - Budget: Fund Balance-Budget Badge #6

Video Transcription

Video Summary

This lesson in the WASBO budget badge series explains how to budget for and project school district fund balance (also called equity). Fund balance is the net position of governmental funds: total assets minus total liabilities, or the cumulative excess of revenues over expenditures added to beginning fund balance to determine ending fund balance. If liabilities exceed assets, fund balance is negative; if expenditures exceed revenues, fund balance shrinks.

The presenter reviews five fund balance categories: <strong>non-spendable</strong> (inventory/prepaids), <strong>restricted</strong> (externally or legally limited uses, such as OSPI program carryovers like LAP/CTE or professional learning days), <strong>committed</strong> (board-approved constraints via resolution), <strong>assigned</strong> (management intent for a purpose, such as building carryovers or future curriculum adoption), and <strong>unassigned</strong> (remaining unrestricted amount available for any purpose).

Fund balance supports cash flow and stability, helping districts manage revenue timing issues (e.g., uneven state apportionment percentages), avoid disruptive staffing cycles, and maintain stronger bond ratings. Typical targets range from 5–15% of expenditures or revenues; GFOA recommends 10% unrestricted.

The session emphasizes estimating current-year ending fund balance to set next year’s beginning balance, anticipate reductions, and determine whether a budget extension is needed by required deadlines.

Keywords

school district fund balance

governmental funds equity

budget projection ending fund balance

fund balance categories

nonspendable restricted committed assigned unassigned

cash flow and financial stability

GFOA 10% unrestricted target

budget extension deadlines