School District 69 (Qualicum) is looking to enact a new policy that would restrict what it can do with surplus cash.
At the school board’s May 22 meeting, the board passed first reading of an accumulated operating surplus policy and administrative procedure, following a Ministry of Education-mandated direction to discuss and create a policy around surplus funds.
The policy and administrative procedure, written in a way meant to be easy for the public to understand, establishes the requirement for a contingency reserve which can “mitigate any negative impact” from “financial forecasting risk and unforeseen circumstances which could negatively impact the education of students.”
The policy states that “the board will establish a restricted portion of its accumulated operating surplus and/or its annual operating budget as a contingency reserve,” and that, “If possible, the targeted amount of the contingency reserve will be up to 2.5 per cent of total operating budget for that year.”
As an example, the operating budget for the upcoming school year is $47,299,263 and 2.5 per cent of that is $1,182,481.58.
For this school year, the district showed a budgeted surplus of $341,860. The budgeted surplus for next year is projected to be $115,654, but that’s after the board voted to use $292,619 of the surplus to fund three full-time equivalent staff positions, and $30,000 without a specific use yet.
The operating surplus administrative procedure (which passed first reading along with the policy) further defines uses for the operating surplus, dividing it into the contingency reserve, an appropriated operating surplus (for multi-year funding of projects and programs) and an unrestricted operating surplus (the balance of the accumulated operating surplus).
The administrative procedure goes on to explain that it “is to be used only to fund additional cost pressures that result from circumstances beyond the school district’s control, or, with the school board’s approval, in response to unforeseen circumstances.
Examples of these included:
• The elimination of a deficit arising at the end of a fiscal year;
• Settlement of legal action that is not covered by the School Protection Program;
• Coverage for disaster recovery expenditures; and
• Extraordinary unknown utilities cost pressures.
Before the school board passed the policy and administrative procedure, trustee Elaine Young, a member of the policy advisory committee, said, “We think we’ve got it into a form that’s fairly easy to understand,” noting that they both have gone through the proper procedure and that they are publicly accessible.
The policy and administrative procedure have two more readings to go before it will be enacted.
To take a look at them, go to pages 46-48 of the district’s regular board meeting agenda for May 22, found online at www.sd69.bc.ca/Board/BoardMeetingAgendasMinutes/Pages/default.aspx.
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