Procedure
Procedure 4010.1 - Target Operating Surplus
1. | OPENING STATEMENT| 1.1. | The Board of Education is responsible for ensuring the district is protected from extraordinary circumstances that may arise in any given fiscal year which would negatively impact school district operations and the quality of education of students.
| | 1.2. | In accordance with the School Act, the Secretary-Treasurer is the Chief Financial Officer and is responsible for presenting the annual budget which will consist of a Target Operating Surplus, based on budgeted operating revenues, to the Board of Education, to provide financial flexibility and resilience in the face of unforeseen circumstances.
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2. | DEFINITIONS| 2.1. | Operating Surplus is the excess of Operating Revenues over Operating Expenses less Inter-Fund Transfers from the current year.
| | 2.2. | Accumulated Operating Surplus is the accumulated excess of Operating Revenues over Operating Expenses less Inter-Fund Transfers from current and prior years.
| | 2.3. | Inter-Fund Transfer is a transfer between the District’s Operating Fund and Capital Fund.
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3. | PROCEDURE(S)| 3.1. | The Target Operating Surplus will be established annually through the budget development process and will be a minimum of 3% of the total budgeted operating fund revenues.
| | 3.2. | First priority of the annual Target Operating Surplus will be to establish and maintain the appropriate Target Accumulated Operating Surplus per Procedure 4010.2 – Target Accumulated Operating Surplus.
| | 3.3. | If the aggregate of the Target Operating Surplus and Target Accumulated Operating Surplus exceeds 3% of budgeted operating fund revenues in a fiscal year, the Secretary-Treasurer will request approval from the Board of Education for the quarterly distribution of the surplus amount towards one-time (non-recurring) expenditures. Such expenditures may include, but are not limited to:
| a) | Funding of new cost pressures in a fiscal year that were not known at the time of budget development.
| | b) | One-time, non-recurring, cost outlays for educational and/or administrative initiatives.
| | c) | When pre-approved by the Board of Education, Capital outlays not funded by other sources.
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| | 3.4. | Use of surplus amounts may only be approved by the Executive Committee and all such expenditures will be reported to the Board of Education on a timely basis and at least annually.
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4. | REFERENCES AND RELATED DOCUMENTS |
5. | AUTHORITY AND RESPONSIBILITY| 5.1. | Secretary-Treasurer
| | 5.2. | Finance Director |
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6. | HISTORY |
