801 - Fiscal Management




801.1 - Planning, Preparation, Requirements, and Publication of the Budget




The planning of the budget document shall be a continuous process and shall involve long-term planning, study, and deliberation by the Superintendent of Schools, Board of Directors, administrative staff, faculty, and citizens of the school district.

This budget process shall include the following three phases:

  1. Educational program and its impact upon the budget
  2. Estimated income
  3. Estimated expenditures

Prior to certification of the budget, the board will review the projected revenues and expenditures for the school district and make adjustments where necessary to carry out the education program within the revenues projected.

A budget for the school district shall be prepared annually for the board’s review. The budget shall include the following:

  1. The amount of revenues from sources other than taxation
  2. The amount of revenues to be raised by taxation
  3. An itemization of the amount to be spend in each fund
  4. A comparison of the amount spent and revenue received in each fund for like purposes in the two prior fiscal years

It shall be the responsibility of the superintendent [or designee] to prepare the budget for review by the board prior to the April 15th deadline each year.

Prior to the adoption of the proposed budget by the board, the public shall be apprised of the proposed budget for the school district. Prior to the adoption of the proposed budget by the board, members of the school district community shall have an opportunity to review and comment on the proposed budget. A public hearing for the proposed budget of the board shall be held each year in sufficient time to file the adopted budget no later than April 15th.

The proposed budget filed by the board with the board secretary, and the time and place for the public hearing on the proposed budget shall be published in a newspaper designated for official publication in the school district. It shall be the responsibility of the board secretary to publish the proposed budget and public hearing information at least 10 days, but no more than 20 days, prior to the public hearing.

The board shall adopt and certify a budget for the operation of the school district to the county auditor by April 15th. It shall be the responsibility of the board secretary to file the adopted and certified budget with the county auditor and other proper authorities.

The board may amend the budget for the fiscal year in the event of unforeseen circumstances. The amendment procedures shall follow the procedures for public review and adoption of the original budget by the board outlined in these policies.

It is the responsibility of the superintendent and the board secretary to bring any budget amendments necessary to the attention of the board to allow sufficient time to file the amendment with the county auditor no later than May 31st of each year. Prior to the board approving the amendment, the board secretary shall publish the proposed budget amendment and public hearing information at least 10 days, but no more than 20 days, prior to the public hearing.

Adopted: 6/70
Reviewed: 10/12; 12/13; 5/15
Revised: 7/10; 12/18
Legal Reference (Code of Iowa): §§ 24; 257; 279.8; 297; 298; 618 (2013)

801.2 - Budget Implementation




The final certified budget shall be considered as the authority for all expenditures to be made during the fiscal year.

Any expenditure to be made that exceeds the final certified budget shall be made only in accordance with procedures specified by the Code of Iowa. These procedures permit the expenditure of closing cash balances of the preceding fiscal year and the expenditure of unanticipated income from sources other than taxation during a fiscal year by amending the budget.

Adopted: 6/70
Reviewed: 10/12; 12/13; 5/15
Revised: 7/10; 12/18
Legal Reference (Code of Iowa): § 24.9; 24.14 (2013)

801.3 - Transfer of Funds




The board may loan monies between funds through an official board resolution. The resolution must specify the funds from which, and to which, the transfer will be made. The board shall exercise this authority judiciously.

A loan from one fund to the other will be at a rate of interest consistent with the state rate. The loan shall be paid off by October 1st of the following fiscal year to which the loan was made. 

When the necessity for a fund has ceased to exist, the balance may be transferred to another fund or account by board resolution. School district monies received without a designated purpose may be transferred in this manner. School district monies received for a specific purpose or upon vote of the people may only be transferred by board resolution when the purpose for which the monies were received has been completed. Voter approval is required to transfer monies to the general fund from the capital projects fund and debt service fund.

It shall be the responsibility of the board secretary [or designee] to make recommendations to the superintendent and the board regarding loans and transfers and to provide supporting evidence for the transfer.

Adopted: 6/70
Reviewed: 10/12; 5/15; 12/18
Revised: 7/10; 12/13
Legal Reference (Code of Iowa): §§ 24.21-22; 279.8; 298A (2013)

801.4 - General Fund Reserves and Fund Balance Reporting




Line Item Budget: A contingency reserve will be established at 0.2% of budgeted general fund expenses at the beginning of each fiscal year to provide for unanticipated expenditures of a non-recurring nature, to meet unexpected minor increases in service delivery costs, and to pay for needs caused by unforeseen emergencies.

Financial Metrics: The district is committed to the following financial metrics:

  1. Solvency Ratio*: Maintaining a combined unassigned and assigned general fund balance that is at least 7% of annual revenue (actual or anticipated). The current year’s cash reserve levy and before staffing and other spending decisions are finalized.

The district will take reasonable steps to achieve a total general fund balance at least equal to its unspent authority. This enables the district to cash flow its legal spending limit.

  1. Unspent Authority: Maintaining an unspent authority balance of not less than 7% of that year’s annual expenditures. The current year’s projected balance will be discussed with the board before staffing and other spending decisions are finalized for the succeeding year.

The district will measure attainment of these goals as of June 30th, but only after completion of the certified annual report.

Fund Balance Reporting: Financial reporting for the balances in the district’s governmental funds is based on Governmental Accounting Standards Board (GASB) Statement 54, Fund Balance Reporting, and Governmental Fund Type Definitions. Fund balance refers to the difference between assets and liabilities in the governmental funds balance sheets. GASB Statement 54 establishes a hierarchy that is based on, “the extent to which the government is bound to honor constraints on the specific purpose for which the amounts in those funds can be spent.”

The governmental funds can have up to five fund balance classifications. The classifications are defined below from most to least restrictive.

  1. Non-spendable Fund Balance: Includes amounts that cannot be spent because they are either: (a) Not in spendable form or (b) legally or contractually required to be maintained intact. This includes items not expected to be converted to cash, including inventories and prepaid expenses. It may also include other property acquired for resale and the principal of a permanent fund.
  2. Restricted Fund Balance: Should be reported when constraints placed on the use of resources are either: (a) Externally imposed by creditors, grantors, contributors, or laws or regulations of other governments or (b) imposed by law through constitutional provisions or enabling legislation. This includes categorical balances.
  3. Committed Fund Balance: Reflects specific purpose pursuant to constraints imposed by formal action of the board. Such constraints can only be removed or changed by board action.
  4. Assigned Fund Balance: Reflects amounts that are constrained by the government’s intent to be used for specific purposes but meet neither the restricted nor committed forms of constraint. Unless the amount is negative, the assigned fund balance is the residual classification for the governmental funds other than the general fund. If the amount is negative then the residual amount is shown as unassigned.
  5. Unassigned Fund Balance: The residual classification for the general fund only. As noted above, if a negative residual amount exists in other governmental funds then the amount is reported as unassigned.

The board authorizes the chief financial officer to assign general fund balance amounts for specific purposed in compliance with GASB 54.

*Solvency Ratio Calculation:  Unassigned + Assigned Fund Balances
                                               General Fund Revenues – AEA Flow Through

Adopted: 12/13
Reviewed: 12/18
Revised: 5/15

801.5 - Student Activities Fund




Revenue raised by students or from student activities shall be deposited and accounted for in the student activities fund. This revenue is the property of, and shall be under the financial control of, the board. Upon recommendation by the respective building principal, students may use this revenue for purposes approved by the superintendent [or designee].

Whether such revenue is collected from student contributions, club dues, special activities, admissions to special events, or from other fundraising activities, all funds will be under the jurisdiction of the board and under the specific control of the superintendent [or designee]. They will be deposited in a designated depository and will be disbursed and accounted for in accordance with instructions issued by the superintendent [or designee].

It shall be the responsibility of the board secretary [or designee] to keep student activity accounts up-to-date and complete.

Any unencumbered activity account balances will automatically revert to the activity fund of the school when an activity is discontinued.

Adopted: 6/70
Reviewed: 7/10; 12/18
Revised: 10/12; 12/13; 5/15
Related Policy (Code #): 801.4
Legal Reference (Code of Iowa): §§ 11.23; 279.8 (2013)

801.6 - Inventory and Fixed Assets




For insurance purposes, an inventory of the furniture, equipment, and other non-consumable items other than real property of the school district shall be conducted annually under the supervision of the superintendent [or designee]. This report shall be filed with the board secretary.

In addition, a separate fixed asset listing will be maintained for all governmental funds, in accordance with GASB 34. All fixed assets, both tangible and intangible, shall be accounted for at cost, or if cost is not determinable at estimated cost. Donated fixed assets shall be recorded at estimated fair market value at the time received. Tangible fixed assets will include buildings, land, land improvements, artwork, construction in progress, and machinery and equipment. Machinery and equipment with a historical cost equal to or greater than $2,500, will be capitalized. All listed fixed assets will be depreciated over the useful life of each fixed asset per the schedule listed below.

Class Description

Useful Life


50 years

Site Improvements

20 years

Outdoor Equipment

20 years

Roof Replacements

20 years

Audiovisual Equipment

10 years

Machinery and Tools

15 years


5 years

Communications Equipment

10 years

Furniture and Accessories

20 years

Licensed Vehicles

8 years

Athletic Equipment

10 years

Custodial Equipment and Appliances

15 years

Musical Instruments

10 years

Intangible fixed assets shall be defined as assets that are identifiable, lack a physical substance, have an initial useful life extending beyond a single reporting period, and cost more than $175,000. Examples include easements, patents, trademarks, copyrights, and computer software that is purchased, licensed, or internally generated.  If the asset is generated internally, cost shall include efforts of staff members or independent contractors to plan, develop, and implement the asset. Intangible fixed assets will be considered capital assets for financial reporting purposes and depreciated over the estimated useful life of the asset using the straight-line method.

All equipment used by employees or students to meet the educational mission of the district must be tagged in a manner to identify them as permanent property of the Linn-Mar Community School District.

Nutrition fund fixed assets with a historical cost equal to or greater than $500 will be capitalized and depreciated over 12 years. Computer and technology assets purchased by the nutrition fund will be depreciated over five years. A straight-line depreciation method will be used, and assets will be depreciated for a full year in the year of acquisition. An annual inventory shall be maintained on consumable property within the Nutrition Services program.

It is the responsibility of the superintendent [or designee] to develop a process for implementation of this policy.

Adopted: 7/03
Reviewed: 7/10; 5/15; 12/18
Revised: 10/12; 12/13; 12/19
Legal Reference (Code of Iowa): 7A.30

801.7 - Internal Controls




The board expects all board members, employees, volunteers, consultants, vendors, contractors, students, and other parties maintaining any relationship with the school district to act with integrity, due diligence, and in accordance with all laws in their duties involving the school district’s resources. The board is entrusted with public dollars and no one connected with the school district should do anything to erode that trust.

Internal control is the responsibility of all employees of the school district. The superintendent, chief financial officer, business manager and board secretary [or designee] shall be responsible for developing internal controls designed to prevent and detect fraud, financial impropriety, or fiscal irregularities within the school district subject to review and approval by the board. Administrators shall be alert for any indication of fraud, financial impropriety, or irregularity within the administrator’s area of responsibility.

Any employee who suspects fraud, impropriety, or irregularity shall report their suspicions immediately to their immediate supervisor, the superintendent, the business manager, or a Finance/Audit Committee member. The superintendent shall have primary responsibility for any necessary investigations and shall coordinate investigative efforts with the board’s legal counsel, auditing firm, and other internal or external departments and agencies, including law enforcement officials, as the superintendent may deem appropriate.

Employees bringing forth a legitimate concern about a potential impropriety will not be retaliated against and those who do retaliate against such an employee will be subject to disciplinary action up to and including discharge.

In the event the concern or complaint about a potential financial impropriety involves the superintendent, the concern shall be brought to the attention of the board vice president who shall be empowered to contact the board’s legal counsel, insurance agent, auditing firm, and any other agency to investigate the concern or complaint. As the elected leader of the board, the board president shall manage the board and related actions including board meetings, analysis of information related to concerns and/or complaints, and all communication internally and externally to the district.

Upon approval of the board, the superintendent [or designee] may contact the state auditor or elect to employ the school district’s auditing firm or state auditor to conduct a complete or partial forensic/internal control/SAS99 audit annually or otherwise as often as deemed necessary. The superintendent is authorized to order a complete forensic audit if, in the superintendent’s judgment, such an audit would be useful and beneficial to the school district. The superintendent shall ensure the state auditor is notified of any suspected embezzlement or theft pursuant to Iowa law. In the event there is an investigation, records will be maintained for use in the investigation. Individuals found to have altered or destroyed records will be subject to disciplinary action up to and including termination.

Adopted: 5/09
Reviewed: 7/10; 5/15; 12/18
Revised: 10/12; 12/13
Legal Reference (Code of Iowa): AM Competitiveness & Corporate
Accountability Act of 2002, Pub L No 107-204; Ch 11, 279.8 (2013)

801.7-R - Administrative Regulations Regarding Internal Control Procedures




Fraud, financial improprieties, or irregularities include but are not limited to:

  • Forgery or unauthorized alteration of any document or account belonging to the district.
  • Forgery or unauthorized alteration of a check, bank draft, or any other financial document.
  • Misappropriation of funds, securities, supplies, or other assets.
  • Impropriety in the handling of money or reporting of financial transactions.
  • Profiteering because of insider information of district information or activities.
  • Disclosing confidential and/or proprietary information to outside parties.
  • Accepting or seeking anything of material value other than items used in the normal course of advertising from contractors, vendors, or persons providing services to the district.
  • Destroying, removing, or inappropriately using district records, furniture, fixtures, or equipment.
  • Failing to provide financial records to authorized state or local entities.
  • Failure to cooperate fully with any financial auditors, investigators, or law enforcement.
  • Any other dishonest or fraudulent act involving district monies or resources.

The superintendent [or designee] shall investigate reports of fraudulent activity in a manner that protects the confidentiality of the parties and the facts. All employees involved in the investigation shall be advised to keep information about the investigation confidential.

If an investigation substantiates the occurrence of a fraudulent activity, the superintendent, or board vice president if the investigation centers on the superintendent, shall issue a report to the board and appropriate personnel. If final, disposition of the matter and any decision to file or not file a criminal complaint or to refer the matter to the appropriate law enforcement and/or regulatory agency for independent investigation shall be made in consultation with district legal counsel. The results of the investigation shall not be disclosed to or discussed with anyone other than those individuals with a legitimate right to know until the results are made public.

Adopted: 5/09
Reviewed: 10/12; 12/13; 5/15; 12/18

801.8 - Financial Records




Financial records of the school district are maintained in accordance with Generally Accepted Accounting Principles (GAAP) as required or modified by law. School district monies are received and expended from the appropriate fund and/or account. The funds and accounts of the school district will include but not be limited to:

Governmental Fund Type:

  • General Fund
  • Special Revenue Fund
    • Management Levy Fund
    • Public Education and Recreation Levy Fund (PERL)
    • Student Activity Fund
  • Capital Projects Fund
    • Physical Plant and Equipment Levy Fund (PPEL)
    • Secure and Advanced Vision for Educaiton (SAVE)

Proprietary Fund Type:

  • Enterprise Fund
    • School Nutrition Fund
    • Aquatic Center Fund
    • Student Store Fund
  • Internal Service Fund

Fudiciary Funds:

  • Trust
    • Expendable Trust Funds
    • Non-expendable Trust Funds
    • Pension trust Funds
  • Agency Funds

Account Groups:

  • General Capital Assets Account Group
  • General Long Term Debt Account Group

The general fund is used primarily for the education program. Special revenue funds are used to account for monies restricted to a specific use by law. Capital project funds are used to account for financial resources to acquire or construct major capital facilities (other than those of proprietary funds and trust funds) and to account for revenues from SAVE. A debt service fund is used to account for the accumulation of resources for, and the payment of, general long term debt principal and interest. Proprietary funds account for operations of the school district operated similar to private business, or they account for the costs of providing goods and services provided by one department to other departments on a cost reimbursement basis. Fiduciary funds are used to account for monies or assets held by the school district on behalf of, or in trust for, another entity. The account groups are the accounting records for capital assets and long-term debt.

The board may establish other funds in accordance with Generally Accepted Accounting Principles (GAAP) and may certify other taxes to be levied for the funds as provided by state law. The status of each fund must be included in the annual report.

It is the responsibility of the superintendent to implement this policy and bring necessary changes in the maintenance of the school district’s financial records to the attention of the board.

Adopted: 3/17
Reviewed: 12/18
Related Policy (Code#): 801.1
Legal Reference (Code of Iowa): §§ 291; 298; 298A; 281 IAC 98