Author: Paul Michael

School is closed today January 18, 2024 due to dangerous road conditions.

Christmas is a great time of year for faculty staff and students.  We all anxiously await the Christmas time festivities that we enjoy as a community, school, and family.  With the celebration of Christmas also comes the planning for a new year.  We are very grateful for the patrons that help support our school system.  With the new year in mind, I thought I would explain an element of the budgeting process that often we neglect to discuss. 

A school district is required to carry a contingency fund.  This fund varies from district to district, but Aberdeen School District has in policy that suggests 15% of the general fund should be available throughout the school year in a contingency fund. The district does reach that goal, but seldom carries the 15% throughout the year.  This amount is determined by following the best practices suggested by our auditor to our school board of trustees and Moody’s which is a firm that evaluates government entities and businesses to give them a credit rating.  The auditor suggests that the school have at least 2 months of payroll and expenditures held in the contingency fund.  Moody’s suggests that the district maintain a 15% fund balance.  Both entities along with the State of Idaho require certain procedures be followed when spending funds.  Checks must have a paper trail indicating how the funds were spent.

Each year the school district is audited by an independent auditor.  The auditor goes through our books to assure the trustees and the community that the funds coming into the school district are used in accordance with the law. The State of Idaho provides funds for the school district to operate, however sometimes the State will not pay the school district until the funds have been spent. This is one reason the school district tries to maintain the 15% contingency fund.  The district will use the contingency fund until they receive money back from the State.

Moody’s is another entity that looks at the financial health of the school district each year to determine the overall stability of the school district. When the public was asked to pass a bond, the interest rate was determined by the financial stability of the district as determined by Moody’s. 

The contingency fund varies because it is also used to pay for unexpected expenses such as our current roof repairs, boiler repairs and replacement of the siding on the old high school. When we present the budget to the public it reflects the funds at that specific time. Generally, it is the time that the funds have been recently sent to the school district from the state of Idaho and the funds have not yet been spent.  Fuel prices are a good example of how the budget can vary.  As prices go up for fuel our budget may not have planned for that increase and as fuel prices go down the same occurs. Utilities are another variable.  On cold years we spend more on utilities. The budget is the best guess we have of what to plan for during the upcoming school year.  The contingency fund is a safeguard that assures the public that the school district has planned for unforeseen circumstances.

The superintendent works very closely with the school board of trustees to assure the funds that are being used are in the best interest of the public.  The financial books are open for the public to review in the district office. Each month the school board is presented the bills that have been paid according to the budget and a spreadsheet that shows what percent of the budget has been spent and conversely what is available to spend.

As we end the year with the Christmas holidays, we begin to anticipate what the new year may bring. Our goal continues to be to maintain the funds to educate the students of Aberdeen School District in a safe environment with a well-rounded education.