Committee recommends larger schools fund balance

MAT-SU -- A recommendation by the district's Financial Advisory Committee to adopt policy to have a 3 to 7 percent fund balance resulted in a heavy discussion by the Matanuska-Susitna Borough School Board at last week's meeting.

"We have less than 1/2 percent fund balance right now," said Jack Sherman, the district's assistant superintendent of business. The Matanuska-Susitna Borough Assembly Code currently requires assembly contributed money not spent by the district to be put back into the assembly's budget. The committee says that this does not allow the district to save for unseen events. Chief School Administrator Bob Doyle said that the fund balance has been dealt with differently during the past, and that both ways have created problems.

"It's been 100 percent being kept [by the assembly], we've split it 50/50, there's always people who've said there's been problems with both of these," said Doyle.

The committee, made up of third-party independent financial experts, found that with the new Government Accounting Standards Board pronouncement 34, any lapsed funds remitted back to the borough are netted against the borough's original contribution for that year, and that this action reduces the amount of the borough's contribution to a level less than the maximum allowed by law as intended by the assembly when they make their budget decision each year.

The committee recommended that the board request the assembly to revise the Borough Code accordingly.

The board has decided to first look at other districts to get a feel for what works and what doesn't.

"Comparisons need to be made," said Mike Chmielewski, board president.

If requested, the recommendation would set the amount of the fund balance at a fixed amount or percentage of total expenditures. Any unspent funds over that amount would be returned to the borough.