SECTION D: FISCAL MANAGEMENT

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1 SECTION D: FISCAL MANAGEMENT DFAA DFG DIBA DJA DJC DJF DLB DLC INVESTING SCHOOL DISTRICT FUNDS SALE OR DISPOSAL OF SCHOOL DISTRICT ASSETS FUND BALANCE PURCHASING AUTHORITY BIDDING REQUIREMENTS PURCHASING PROCEDURES IRC SECTION 403(b) PLAN EXPENSE REIMBURSEMENTS Last Review Date: 8/20/12

2 INVESTING SCHOOL DISTRICT FUNDS DFAA I. Title: Investing School District Funds II. General: The purpose of this policy is to guide the investment activities of the school district. The guidelines are intended to be broad enough to allow the investment officer to function properly within the limits of his (her) responsibility and authority, yet specific enough to adequately safeguard the investment assets. III. Scope: This policy applies to all financial assets of the school district, including: A. General Funds B. Capital Project Funds C. Enterprise Funds D. Special Revenue Funds E. Debt Service Funds F. Fiduciary Funds G. Trust Funds for Post-Employment Benefits other than Pension Benefits (the OPEB Trust Fund) IV. Objectives: The primary objectives, in order of priority, of all investment activities involving the financial assets of the school district shall be the following: A. Safety: Safety and preservation of principal in the portfolio is the foremost investment objective. B. Liquidity: Maintaining the necessary liquidity to match expected liabilities is the second investment objective. C. Return: Obtaining a reasonable return is the third investment objective. V. Authority: The district administrator is the investment officer responsible for investment decisions and activities for all funds except trust funds for post-employment benefits other than pension benefits (OPEB Trust Funds). Investment authority over OPEB Trust Funds shall rest in the trustees of the Post-Employment Benefit Trust Fund established by the school district. The trustees may retain the services of an investment advisor registered under the Federal Investment Advisors Act (15 USC 80b-3) who has knowledge of school finance regulations. VI. Prudence: Persons with investment authority shall be held to the prudent person standard. Under such standard, investment decisions shall be made with such judgment and care, under circumstance then prevailing, which persons of prudence, discretion and intelligence exercise in the management of their own affairs, not for speculations but for investment, considering the probable safety of their capital as well as the probable income to be derived. Initial Adoption: 4/13/09 Final Adoption: 5/11/09

3 INVESTING SCHOOL DISTRICT FUNDS DFAA VII. Reporting Requirements: A. The investment officer shall provide the Neillsville Board of Education with copies of portfolio performance reports quarterly or when a specific request is made. B. The investment officer shall provide a report to the annual meeting of the school district that complies with Section (3) of the Wisconsin Statutes, including the required report of activity in the OPEB Trust Fund. VIII. Eligible Investments: A. Pursuant to Section 67.11(2) of the Wisconsin Statutes, debt service funds of the school district shall be invested only in direct obligations of the federal government or in the local government pooled investment fund created under Section of the Wisconsin Statutes. B. Other funds of the school district may be invested in accordance with Section (1m) of the Wisconsin Statutes in the following: i. Time deposits in any credit union, bank, savings bank, trust company or savings and loan association which is authorized to transact business in this state if the time deposits mature in not more than 3 years. ii. Bonds or securities issued or guaranteed as to principal and interest by the federal government, or by a commission, board or other instrumentality of the federal government. iii. Bonds or securities of any county, city, drainage district, technical college district, village, town or school district of the State of Wisconsin. iv. Bonds issued by a local exposition district under subchapter II of chapter 229. v. Bonds issued by a local professional baseball park district created under subchapter III of chapter 229. vi. Bonds issued by a local professional football stadium district created under subchapter IV of chapter 229. vii. Bonds issued by the University of Wisconsin Hospitals and Clinics Authority. viii. Bonds issued by a local cultural arts district under subchapter V of chapter 229. ix. Bonds issued by the Wisconsin Aerospace Authority. x. Any security which matures or which may be tendered for purchase at the option of the holder within not more than 7 years of the date on which it is acquired, if that security has a rating which is the highest or 2 nd highest rating category assigned by Standard & Poor s Corporation, Moody s Investors Service or other similar nationally recognized rating agency or if that security is senior to, or on a parity with, a security of the same issuer which has such a rating. Initial Adoption: 4/13/09 Final Adoption: 5/11/09

4 INVESTING SCHOOL DISTRICT FUNDS DFAA xi. Securities of an open-end management investment company or investment trust, if the investment company or investment trust, does not charge a sales load, if the investment company or investment trust is registered under the investment company act of 1940, 15 USC 80a-1 to 80a-64, and if the portfolio of the investment company or investment trust is limited to the following: 1. Bonds and securities issued by the federal government or a commission, board or other instrumentality of the federal government. 2. Bonds that are guaranteed as to principal and interest by the federal government or a commission, board or other instrumentality of the federal government. 3. Repurchase agreements that are fully collateralized by bonds or securities described under 1. or 2. above. C. OPEB Trust Funds may be invested in the manner authorized for investments under section of the Wisconsin Statutes (Uniform Prudent Investor Act) in investments other than those identified above if: i. The investment advisor retained by the Board of Education to advise the trustees of the OPEB Trust Fund makes a recommendation in writing that identifies the recommended investment and discusses the extent to which the investment meets the investment objectives in Section IV of this policy, and ii. The trustees of the OPEB Trust Fund approve the investment recommendation of the investment advisor, and iii. The Board of Education approves the investment recommendation of the investment advisor. IX. Ethics and Conflicts of Interest: Members of the Board of Education, trustees of the OPEB Trust Funds, and the investment officer of the district shall refrain from personal business activity that could conflict with the proper execution of the investment program contemplated by this policy or impair their ability to make impartial investment decisions. These officials shall disclose to the Board of Education any material financial interest in financial institutions that may conduct business with the school district. Initial Adoption: 4/13/09 Final Adoption: 5/11/09

5 SALE OR DISPOSAL OF SCHOOL DISTRICT ASSETS DFG Occasionally it is necessary for the district to sell or dispose of its assets. Prior to any sale or disposal, the administrator, or his/her designee, shall determine if items have trade-in value toward replacement items. Assets with an estimated value of $500 or less shall be sold or disposed of by the administrator or his/her designee, in a manner deemed appropriate by the administrator. Assets with an estimated value greater than $500 shall be brought to the attention of the Board of Education and the board shall determine the method of sale or disposal. All funds received from the sale of district assets shall be deposited in the appropriate fund revenue account. Initial Adoption: 8/20/12 Final Adoption: 8/27/12

6 FUND BALANCE DIBA The Fund Balance Policy is intended to provide guidelines during the preparation and execution of the annual budget to ensure that sufficient reserves are maintained for unanticipated expenditures or revenue shortfalls. It is also intended to preserve flexibility throughout the fiscal year to make adjustments in funding for programs approved in connection with the annual budget. The Fund Balance Policy should be established based upon a long-term perspective recognizing that stated thresholds are considered minimum balances. The main objective of establishing and maintaining a Fund Balance Policy is for the district to be in a strong fiscal position that will allow for better position to weather negative economic trends. The Fund Balance consists of five categories: No Spendable, Restricted, Committed, Assigned, and Unassigned. No Spendable Fund Balance consists of funds that cannot be spent due to their form (e.g. inventories and prepaids) or funds that legally or contractually must be maintained intact. Restricted Fund Balance consists of funds that are mandated for a specific purpose by external parties, constitutional provisions or enabling legislation. Committed Fund Balance consists of funds that are set aside for a specific purpose by the district s Board of Education. Formal Action must be taken prior to the end of the fiscal year. The same formal action must be taken to remove or change the limitations placed on the funds. Assigned Fund Balance consists of funds that are set aside with the intent to be used for a specific purpose by the district administrator. Assigned Funds cannot cause a deficit in Unassigned Fund Balance. Unassigned Fund Balance consists of excess funds that have not been classified in the previous four categories. All funds in this category are considered spendable resources. This category also provides the resources necessary to meet unexpected expenditures and revenue shortfalls. No Spendable and Restricted Funds No Spendable Funds are those funds that cannot be spent because they are either: 1) Not in spendable form (e.g. inventories and prepaids) 2) Legally or contractually required to be maintained intact It is the responsibility of the district administrator to report all No Spendable Funds appropriately in the district s financial statements. Restricted Funds are those funds that have constraints placed on their use either: 1) Externally be creditors, grantors, contributors, or laws or regulations or other governments 2) By law through constitutional provisions or enabling legislation. It is the responsibility of the district administrator to report all Restricted Funds appropriately in the district s financial statements. Classifying Fund Balance Amounts When both Restricted and Unrestricted Funds are available for expenditure, Restricted Funds should be spent first unless legal requirements disallow it. Initial Adoption: 6/25/12 Final Adoption: 7/23/12

7 FUND BALANCE DIBA When Committed, Assigned and Unassigned Funds are available for expenditure, Committed Funds should be spent first, Assigned Funds second, and Unassigned Funds last; unless the governing board has provided otherwise in its commitment or assignment actions. Authority to Commit Funds The district s governing board has the authority to set aside funds for a specific purpose. Any funds set aside as Committed Fund Balance requires the passage of a resolution by a simple majority vote. The passage of a resolution must take place prior to June 30 th of the applicable fiscal year. If the actual amount of the commitment is not available by June 30 th, the resolution must state the process or formula necessary to calculate the actual amount as soon as information is available. Stabilization Arrangement Maintaining a Financial Stabilization Account is a necessity for sound financial management and fiscal accountability. The district s governing board has the authority to establish a Financial Stabilization Account that will be a Committed Fund Balance. A Financial Stabilization Account is established for the purpose of providing funds for an urgent event that affects the safety of the employee and student population (e.g. earthquake, wildfires, etc.). The minimum level for the Financial Stabilization Account is 5% of General Fund expenditures. The recognition of an urgent event must be established by the district administrator. If established by the district administrator, the specific urgent event must be reported to the Board of Education at their next meeting. A budget revision must be approved by the Board of Education. In the event that the balance drops below the established minimum level, the Board of Education will develop a plan to replenish the Financial Stabilization Account balance to the established minimum level within four years. Authority to Assign Funds Upon passage of the Fund Balance Policy, authority is given to the district s administrator to assign funds for specific purposes. Any funds set aside as Assigned Fund Balance must be reported to the Board of Education at their next regular meeting. The Board of Education has the authority to remove or change the assignment of the funds with a simple majority vote. The Board of Education has the authority to set aside funds for the intended use of a specific purpose. Any funds set aside as Assigned Fund Balance requires a simple majority vote and must be recorded in the minutes. The same action is required to change or remove the assignment. Unassigned Fund Balance Unassigned Fund Balance is the residual amount of Fund Balance in the General Fund. It represents the resources available for future spending. An appropriate level of Unassigned Fund Balance should be maintained in the General Fund in order to cover unexpected expenditures and revenue shortfalls. Initial Adoption: 6/25/12 Final Adoption: 7/23/12

8 FUND BALANCE DIBA Unassigned Fund Balance may be accessed in the event of unexpected expenditures up to the minimum established level upon approval of a budget revision by the Board of Education. In the event of projected revenue shortfalls, it is the responsibility of the district administrator to report the projections to the Board of Education on a quarterly basis and shall be recorded in the minutes. Any budget revision that will result in the Unassigned Fund Balance dropping below the minimum level will require the approval of 2/3 vote of the Board of Education. The Fund Balance Policy establishes a minimum Unassigned Fund Balance equal to 8% of total General Fund expenditures. In the event that the balance drops below the established minimum level, the Board of Education will develop a plan to replenish the fund balance to the established minimum level within two years. Initial Adoption: 6/25/12 Final Adoption: 7/23/12

9 PURCHASING AUTHORITY DJA The district administrator and principals are designated by the Board of Education to serve as purchasing agents. The district administrator shall be responsible for developing and administering the purchasing program of the district based on generally accepted accounting standards. All purchases should be made at the best price available giving consideration to quality, delivery terms, conformity to developed specifications, and suitability to the requirements of the educational program. All purchases of goods, services and equipment for which the district will be responsible for payment must be made on official purchase orders, except as otherwise provided. Such purchase orders must be properly approved and executed according to the purchasing program. Purchase orders shall not be required for purchases made through approved petty cash or under emergency conditions which may affect the clear and imminent safety of students, staff, or school property. The administrative staff shall be authorized to order items which are specifically approved by the Board of Education. The district administrator shall consult with the Board of Education on all major expenditures and receive the Board of Education s approval. Initial Adoption: 4/13/09 Final Adoption: 5/11/09

10 BIDDING REQUIREMENTS DJC Every effort shall be made to secure equipment, materials and services with the desired quality at the least cost. The official budget document shall be considered as the authorization for all expenditures, which are made during the fiscal year. Expenditures for any one fund shall not exceed the budgeted amount for that fund without a specific Board of Education motion and any other statutory requirements. Quotes shall be used as often as possible for purchases of equipment, materials and services or when specifically ordered by the board. Bids are not required unless there are federal or state mandates to do so, or as otherwise specifically ordered by the board. In the event that the bids are utilized, bidding shall be done pursuant to statutory provisions. Legal Ref.: Section Wisconsin Statutes Initial Adoption: 4/13/09 Final Adoption: 5/11/09

11 PURCHASING PROCEDURES DJF Orders paid for with district funds on a purchase order must be approved in advance of the purchase. Emergency orders from local merchants, which were previously included in the budget, may be purchased by a school employee with the consent and knowledge of the district administrator or designee. Duplicate sales slips must be signed by the individual and left at the place of business for return with the monthly statement or brought to the District Administrator's Office on the day of the purchase. Orders paid for from activity accounts also require a purchase order. Orders for items less than $ need only the advisor s and principal s signatures. Orders over $ also require the district administrator's signature. Initial Adoption: 4/13/09 Final Adoption: 5/11/09

12 IRC SECTION 403(b) PLAN DLB 1. Establishment. The School District of Neillsville ( District ) sponsors the School District of Neillsville IRC Section 403(b) Plan (the Plan ) for the benefit of its employees. The administration and operation of the Plan is governed by this Administrative Policy. 2. Employee Contributions Salary Reduction Agreements. Each eligible employee of the District may elect to reduce his/her salary by a specified amount by completing and returning the Salary Reduction Agreement to the District Change or Revocation of Election. Pursuant to the terms of the Salary Reduction Agreement, which may be amended from time to time by the District, each employee may change his/her contributions. Any change to contributions may only be made on a prospective basis. 3. Approved Vendors List of Vendors. The District shall keep a list of vendors who have been approved to receive funds under the Plan ( Approved Vendors ). This list of Approved Vendors shall be available to employees Hold Harmless Agreement. A vendor must sign the District-approved Hold Harmless Agreement in order to be and remain an Approved Vendor Additional Vendors. Vendors will be added to the list of Approved Vendors upon the approval of all applicable employee associations and the District, and upon the vendor signing and delivering the Districtapproved Hold Harmless Agreement Notice of Removed Vendors. The District will notify the appropriate employees within thirty (30) days of a decision to remove an Approved Vendor from the Approved Vendor list. 4. Amendment (b) Amendment. The District may amend this Administrative Policy at any time and from time to time except as limited by Wisconsin law. Initial Adoption: 11/28/11 Final Adoption: 12/19/11

13 IRC SECTION 403(b) PLAN DLB List of Approved Vendors 1. WEA Trust Initial Adoption: 11/28/11 Final Adoption: 12/19/11

14 EXPENSE REIMBURSEMENTS DLC Payment of Expenses for Approved Meetings: All employees shall be reimbursed at the approved rate per mile for all necessary and approved travel to such institutes, meetings and conferences, which have prior sanction of the district administrator. Employees should anticipate and estimate the amount of these expenditures before preparation of the yearly budget. All employees shall submit a request for payment and all accompanying receipts designating the nature of the expenditure to the Board of Education Office as soon as possible. Unless otherwise noted in contract or policy, meal allowances for all staff will be reimbursed up to an amount of $8.00 for breakfast, $12.00 for lunch, and $14.00 for supper. Initial Adoption: 4/13/09 Final Adoption: 5/11/09

EAST TROY COMMUNITY SCHOOL DISTRICT

EAST TROY COMMUNITY SCHOOL DISTRICT AUDITED FINANCIAL STATEMENTS JUNE 30, 2015 James R. Frechette CERTIFIED PUBLIC ACCOUNTANT June 30, 2015 TABLE OF CONTENTS Page Independent Auditor s Report 1-2 Basic