801 - Fiscal Management

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

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

This budget process will include the following three phases:

  1. Educational program and its impact upon the budget;
  2. Estimated income; and
  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 will be prepared annually for the board’s review. The budget will 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 spent in each fund; and
  4. A comparison of the amount spent and revenue received in each fund for like purposes in the two prior fiscal years.

It is 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 will 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 will have an opportunity to review and comment on the proposed budget. A public hearing for the proposed budget of the board is 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 is published in a newspaper designated for official publication in the school district. It is 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 will adopt and certify a budget for the operation of the school district to the county auditor by April 15th. It is 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 will 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 will 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; 1/22
Revised: 7/10; 12/18
Legal Reference (Code of Iowa): §§ 24; 257; 279.8; 297; 298; 618
IASB Reference: 703.1

801.2 - Budget Implementation

The final certified budget will 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 will 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; 1/22
Revised: 7/10; 12/18
Legal Reference (Code of Iowa): § 24.9
IASB Reference: 703.2

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 will exercise this authority judiciously.

When the necessity for a fund has ceased to exist, or when the board is given authority to transfer categorical or other funds and has met the conditions of exercising the authority, the balance may be transferred to another fund or account or the expenditures may be directed by board resolution, as required. 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 or when authority to exercise local discretion to expend funds flexibility has been granted. Voter approval is required to transfer monies to the general fund from the capital projects fund and debt service fund unless state authority allows such a transfer without a vote.

If all requirements for district use of funds under the Preschool Foundation Aid, Professional Development Supplement, Home School Assistance Program, Teacher Leadership Supplement, or any discontinued fund have been met and funds remain unexpended and unobligated at the end of the fiscal year, the district may transfer all or a portion of remaining funds by passage of a board resolution into the district’s flexibility account in accordance with law. Before the expenditure of amounts in the flexibility account, the district shall publish notice of the time, date, and place of a public hearing on the proposed resolution approving said expenditures. The board must find and certify that the statutory requirements of each original source of funds have been met before adopting the resolution approving the expenditures. The district will present a copy of the signed board resolution to the Department of Education.

The district may transfer by board resolution from the general fund to the student activity fund an amount needed to purchase or refurbish protective and safety equipment required for any extracurricular, interscholastic athletic contest or competition sponsored or administered by the Iowa High School Athletic Association (IHSAA) or Iowa Girls High School Athletic Union (IGHSAU).

If the before and after school program exceeds the amount necessary to operate the program the excess amount may, following public hearing, be transferred by resolution of the school board for deposit into the general fund to be used for district general fund purposes. The district will present a copy of the signed board resolution to the Department of Education.

The district may choose to request approval from the School Budget Review Committee (SBRC) to transfer funds to make a program whole prior to its elimination.

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

It is 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; 9/21; 1/22; 8/23
Legal Reference (Code of Iowa): §§ 24.21-22; 257.10; 279.8; 279.42; 298A; 289 IAC 6
IASB Reference: 701.02

801.4 - General Fund Reserves and Fund Balance Reporting

The district shall prepare an annual three-year general fund budget forecast that includes estimates of unspent authorized budget (spending authority) as well as restricted, assigned and unassigned fund balances available at the end of each fiscal year. The estimates shall be prepared utilizing scenarios for likely State Supplementary Assistance (SSA) rates and enrollment projections. The projections shall include estimates of property tax rates and income surtax rates, if applicable.

The treasurer shall report monthly to the school board as to actual revenue and expenditures for the month and year-to-date, as compared to budgeted revenues and expenditures and compared to historical revenues and expenditures (both in dollar amounts and percentages) for each fund maintained by the district. The treasurer shall provide context with respect to current year variances between budgeted and historical revenues and expenditures.

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.

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.
  2. 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 due September 15th of each year.

The district shall solicit from the School Budget Review Committee (SBRC) additional modified supplemental amount (spending authority) where it may be available for items such as special education deficit, increasing enrollment, budget guarantee, open enrollment not on prior year count, Limited English Proficiency (LEP), and any other lawful purposes. The board shall be provided a resolution to approve the maximum request authorized. Any award of modified supplemental amount may be levied as a cash reserve levy, in full, in the next available budget year. For recurring program deficits that are predictable and estimable, the district shall levy in advance for the immediately succeeding year as part of the general cash reserve levy if the deficit causes the estimated assigned and unassigned to fall below the minimum required. Grants of spending authority not funded by the state or other sources may ultimately be levied against property taxes.

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 purposes in compliance with GASB Statement 54.

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

Adopted: 12/13
Reviewed: 12/18
Revised: 5/15; 1/22; 2/24
Legal Reference (Code of Iowa): §§ 257.31(4); 279.8; 291; 297.22-25; 298; 298A
IASB Reference: 701.03-05; 701.05-R(1)

801.5 - Student Activities Fund

Revenue raised by students or from student activities is deposited and accounted for in the student activities fund. This revenue is the property of and is 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, or result from 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]. The revenue 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 is 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; 1/22
Revised: 10/12; 12/13; 5/15
Related Policy: 801.4
Legal Reference (Code of Iowa): §§ 279.8
IASB Reference: 704.5

801.6 - Capital Assets

The district will establish and maintain a capital assets management system for reporting capitalized assets owned or under the jurisdiction of the district in its financial reports in accordance with Generally Accepted Accounting Principles (GAAP), as required or modified by law, to improve the district’s oversight of capital assets by assigning and recording them to specific facilities and programs and to provide for proof of loss of capital assets for insurance purposes.

Capital assets, including tangible and intangible assets, are reported in the government- wide financial statements (ex: governmental activities and business type activities) and the proprietary fund financial statements. Capital assets reported include district buildings and sites, construction progress, improvements other than buildings and sites, land, machinery, and equipment. Capital assets reported in the financial reports will include individual capital assets with a historical cost equal to or greater than $5,000. The federal regulations governing school meal programs requires capital assets attributable to the school meal program with a historical cost of equal to or greater than $500 be capitalized. Additionally, capital assets are depreciated over the useful life of each capital asset per the schedule below:

Class Description Useful Life
Buildings 50 years
Site Improvements 20 years
Outdoor Equipment 20 years
Roof Replacements 20 years
Audiovisual Equipment 10 years
Machinery and Tools 15 years
Computers 6 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

All intangible assets with a purchase price equal to or greater than $175,000, with a useful life of two or more years, are included in the intangible asset inventory for capitalization purposes. Such assets are recorded at actual historical cost and amortized over the designated useful lifetime applying a straight-line method of depreciation. If there are no legal, contractual, regulatory, technological, or other factors that limit the useful life of the asset, then the intangible asset needs to be considered to have an indefinite useful life and no amortization should be recorded.

This policy applies to all intangible assets. If an intangible asset that meets the threshold criteria is fully amortized, the asset must be reported at the historical cost and the applicable accumulated amortization must also be reported. It is not appropriate to “net” the capital asset and amortization to avoid reporting. For internally generated intangible assets, outlays incurred by the government’s personnel, or by a third-party contractor on behalf of the government, and for development of internally generated intangible assets should be capitalized.

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.

The capital assets managements system must be updated to account for the addition/acquisition, disposal, and/or relocation/transfer of capital assets. It is the responsibility of the superintendent in conjunction with the chief financial/operating officer to count and reconcile the capital assets with the capital assets management system on June 30th each year.

It is the responsibility of the superintendent in conjunction with the chief financial officer to develop administrative regulations implementing this policy. It will also be the responsibility of the superintendent [or designee] to educate employees about this policy and its supporting administrative regulations.

Adopted: 7/03
Reviewed: 7/10; 5/15; 12/18
Revised: 10/12; 12/13; 12/19; 6/21; 1/22; 10/22
Legal Reference (Code of Iowa): §§ 257.31(4); 279.8; 297.22-25; 298A
IASB Reference: 802.4
Mandatory Policy

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] are 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 will 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 will report their suspicions immediately to their immediate supervisor, the superintendent, the business manager, or a member of the Finance/Audit Committee. The superintendent will have primary responsibility for any necessary investigations and will 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 will be brought to the attention of the board president, or vice president, who will 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 will 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 to conduct a complete, or partial, forensic internal control SAS99 audit annually, or otherwise as often as deemed necessary.

The superintendent will ensure the state auditor is notified of any suspected embezzlement or theft pursuant to Iowa law. 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. 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; 1/22
Revised: 10/12; 12/13
Legal Reference (Code of Iowa): 11, 279.8
IASB Reference: 707.05; 707.05-R(1)

801.7-R - Administrative Regulations Regarding Internal Control Procedures

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

  1. Forgery or unauthorized alteration of any document or account belonging to the district;
  2. Forgery or unauthorized alteration of a check, bank draft, or any other financial document;
  3. Misappropriation of funds, securities, supplies, or other assets;
  4. Impropriety in the handling of money or reporting of financial transactions;
  5. Profiteering because of insider information of district information or activities;
  6. Disclosing confidential and/or proprietary information to outside parties;
  7. 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;
  8. Destroying, removing, or inappropriately using district records, furniture, fixtures, or equipment;
  9. Failing to provide financial records to authorized state or local entities;
  10. Failure to cooperate fully with any financial auditors, investigators, or law enforcement;
  11. Any other dishonest or fraudulent act involving district monies or resources;
  12. Acting for purposes of personal financial gain, rather than in the best interest of the district; and
  13. Providing false, inaccurate, or misleading financial information to district administration or the board of directors.

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

If an investigation substantiates the occurrence of a fraudulent activity the superintendent, and/or board president or board vice president if the investigation centers on the superintendent, will 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, will be made in consultation with district legal counsel. The results of the investigation will 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; 1/22
IASB Reference: 707.05; 707.05-R(1)

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:


  1. General Fund
  2. Special Revenue Fund
    1. Management Levy Fund
    2. Public Education and Recreation Levy Fund (PERL)
    3. Student Activity Fund
  3. Capital Projects Fund
    1. Physical Plant and Equipment Levy Fund (PPEL)
    2. Secure and Advanced Vision for Education (SAVE)
  4. Debt Service Fund


  1. Enterprise Fund
    1. School Nutrition Fund
    2. Aquatic Center Fund
    3. Student Store Fund
  2. Internal Service Fund


  1. Trust
    1. Expendable Trust Funds
    2. Non-expendable Trust Funds
    3. Pension trust Funds
  2. Custodial Funds


  1. General Capital Assets Account Group
  2. 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 in conjunction with the chief financial officer 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; 1/22
Revised: 2/21
Related Policy: 801.1
Legal Reference (Code of Iowa): §§ 291; 298; 298A; 281 IAC 98
IASB Reference: 701.03