TRANSFERS NJASBO DECEMBER 8, 2015 CHARLES MULLER INTERIM EXECUTIVE COUNTY BUSINESS OFFICIAL

GENERAL FUND  Each Board of Education shall: maintain a record of all transfers in a format prescribed by the Commissioner or in a format developed locally and approved by the ECS and submitted in accordance with the requirements of the submission of the BSR and Treasurer’s report (6A:23A:16.10)

6A:23A-13.3 Transfers During the Budget Year (a)All transfers must have a BOE resolution. The resolution must have the exact amount of the transfer to and from the applicable accounts or surplus. Evidence of approval and supporting documentation by a two-thirds affirmative vote of the authorized membership of the school board (b)Surplus or other unbudgeted or under-budgeted revenue transfers between April 1 – June 30 require Executive County Superintendent approval 1.Approval of the transfer by two-thirds affirmative vote of the authorized membership of the school board 2.Transfer necessary to achieve the thoroughness standards 3.The latest BSR indicating that no other balances are available and all balances will be expended or encumbered (c)Transfers prior to April 1 requires Commissioner of Education approval 1.transfer necessary for an emergent circumstance 2.if emergent circumstance is not addressed through an appropriation of added revenue it will render peril the health and safety of students and staff, and requires an on site visit by the Executive County Superintendent. 3.The latest BSR indicating that no other balances are available and all balances will be expended or encumbered

6A:23A-13.3 (cont.) (d)A district may, at any time without Commissioner approval: 1.Appropriate un-budgeted or under-budgeted state aid with written approval from the Department in the written notification of the additional aid 2.Appropriate un-budgeted or under-budgeted tuition revenue not part of a formal sending receiving relationship 3.Appropriate un-budgeted or under-budgeted school transportation revenue as role of the host provider of school transportation services pursuant to N.J.S.A. 18A:39-11 and 18A: Appropriate un-budgeted or under-budgeted restricted misc. local revenue 5.Appropriate un-budgeted or under-budgeted Federal revenue 6.Appropriate surplus generated from any Federal/State revenue excluded from the excess surplus calculation (x-aid, impact aid)

6A:23A-13.3 (cont.)  THE FOLLOWING TRANSFERS MUST BE IN A FORMAT PRESCRIBED BY THE COMMISSIONER OR APPROVED BY THE EXECUTIVE COUNTY SUPERINTENDENT (e)Transfers from the General Fund – the advertised appropriations accounts and the consolidated accounts 1.Basic skills and special education instruction, including extraordinary services, bilingual and other related services 2.Student activities, student athletics, and other student instructional services 3.Student support service, attendance,health, guidance, child study team and media 4.Improvement of instruction and staff training 5.Special programs (fund 13) (f)Approval of 2/3 of the authorized membership of the school board 1.when on a cumulated basis the transfer exceeds 10% iRequest prior approval from the Executive County Superintendent IiIf after 10 days and no response, transfer is deemed approved, district must maintain a record of all transfer submission and approvals. 2.transfers from capital outlay to current expense, except for equipment– requires a written request and approval from the ECS that the transfer is due to a demonstrated hardship.

6A:23A-13.3 (cont.) (g)Transfers to administrative lines - general administration, school administration, central services and administrative information technology or other support services exceeding 10% must be submitted to the Executive County Superintendent in a format prescribed by the commissioner 1.The transfer will not be granted if: iThe district is currently over the administrative limits IiThe transfer would result in a budget exceeding the administrative cost limits 2.Transfers may be approved to support contractual obligations or a one time increase in spending as justified by the district board of education. Transfers may not be approved if a district did not budget sufficient funds upon review of actual expenditures and trends in those accounts

6A:23A-13.3 (cont.) (h)Transfers to Capital Outlay – Capital Outlay Project  When a request is submitted to the ECS the request must support the existence of an emergent circumstance and requires an onsite inspection by the ECS for a project not previously approved by voters or Board of School Estimate  Transfers for equipment or to supplement a previous capital outlay project approved by the voters do not require ECS approval

RESERVE ACCOUNTS  Capital Reserve  Maintenance Reserve  Current Expense Emergency Reserve  Debt Service reserve  Tuition Reserve  Federal Impact Aid

CAPITAL RESERVE  Board may set up a Capital reserve account at any time, a Board of Education shall increase the capital reserve account by the earnings attributable to the investment of the accounts assets Capital Reserve funds may be withdrawn for the following purposes: (6A:23A-14.1(h)) 1.Transfer funds to capital outlay major account/fund to fund pre-development or other pre- application cost for school facilities projects included in the LRFP. Deposits to the fund can only be done at budget time or between June 1-30 after receiving voter, board of school estimate or capital project review board approval 2.To fund the local share less any excess costs of a school facilities project (N.J.A.C.6A:26-3) after receiving voter, board of school estimate or capital project review board approval 3.By board resolution for the transfer of funds to capital outlay to fund the total cost, less any excess cost of an other capital project, which would otherwise be eligible for State support (N.J.A.C. 6A:26-3) after receiving voter, board of school estimate or capital project review board approval 4.After receiving voter, board of school estimate or capital project review board approval, as applicable, of the capital reserve use and specific amount in an approved referendum or resolutions (6A:26-3.7) after receiving voter, board of school estimate or capital project review board approval

CAPITAL RESERVE (cont.) 5.to fund the excess costs of a school facility project and to fund the costs for other capital projects that would otherwise not be eligible for State support after receiving voter, board of school estimate or capital project review board approval 6.After receiving voter, board of school estimate or capital project review board approval for the purchase of land 7.for the purpose of offsetting locally funded principal and interest payments for bonded projects that are included in the district’s LRFP after receiving voter, board of school estimate or capital project review board approval  Unexpended or unencumbered amounts 1. Return such funds to the capital reserve account 2. Anticipate funds as surplus in subsequent year 3. Reserve and designate in second subsequent school year budget

MAINTENANCE RESERVE (6A:23A-14.2)  (d) A district Board of education or Board of School estimate, as appropriate, may by resolution withdraw such funds from the maintenance reserve account and appropriate into the required maintenance account line at budget time or anytime during the year for use on required maintenance activities for a school facility as reported in the Comprehensive Maintenance Plan (6A:26A-4) 1)funds withdrawn from the maintenance reserve account are restricted to required maintenance appropriations. A district board of education or board of school estimate shall not transfer such funds to any other line-item account  (e) Any unexpended funds must be restored to the maintenance reserve account up to the amount of the maintenance account funds withdrawn  (f) On an annual basis, any interest the account earns shall be transferred to the general fund  (g) The district board of education shall ensure that the maintenance reserve account balance does not, at any time, exceed four percent of the replacement cost of the school district’s school facilities for the current year. If the account exceeds this maximum amount at June 30, the district board of education shall reserve and designate such excess in the subsequent year’s budget.

CURRENT EXPENSE EMERGENCY RESERVE (6A:23A ) i.the funds shall be used to finance unanticipated general fund current expense costs required for T&E. “unanticipated “ shall mean reasonably unforeseeable and shall not include additional costs caused by poor planning ii.The account shall not exceed $250,000 or 1 percent of the school district’s general fund budget as certified for taxes up to a maximum of $1,000,000. iii.A district may supplement the reserve in the school district’s annual budget or through a transfer of unanticipated revenue and/or unexpended line item at year end, and must be adopted by the Board between June 1- June 30 of the respective school year. iv.Withdraws from the reserve shall require the approval of the Commissioner unless the withdraw is to meet an increase in health care costs in excess of 4% for which the district did not receive an automatic adjustment for health care costs. Total health care costs include medical insurance and prescription drug insurance costs.

DEBT SERVICE RESERVE (6A:23A )  Debt service reserve account in the debt service fund for proceeds from the sale of school district property. “property” shall mean land, buildings and other property that was incidental to the sale of land or building.  the funds shall be used to reduce the outstanding principal amount at the earliest call date or to annually reduce the debt service principal payments  the reserve must be liquidated within the lesser of five years from the inception or the remaining term on the obligation. Any remaining balance must be used for tax relief.

TUITION ADJUSTMENT RESERVE (6A:23A )  Tuition adjustment reserve account in the general fund for up to 10% of the estimated tuition cost in the contract year fro an anticipated tuition adjustment in the 2nd year following the contract year. In such case, the district board of education shall: i. Establish the tuition account at June 30 th by board resolution ii. Make full appropriation of the reserve for the tuition adjustment in the 2 nd year following the contract year, and iii. Transfer to the general fund, by board resolution, and interest earned on the investments in the reserve account on an annual basis.

FEDERAL IMPACT AID (18A:7F-41) (3) Federal impact aid reserve account in the case of a school district that receives federal impact aid pursuant to section 8002, 8003, 8007, or 8008 of the Elementary and Secondary Education Act of 1965 (20 U.S.C. s.7702, 7703, 7707, or 7708). A board of education may appropriate federal impact aid funds to establish or supplement the reserve account in the district's annual budget, or through a transfer by a two-thirds affirmative vote of the authorized membership of the board between June 1 and June 30, for withdrawal in any subsequent school year. Any transfer to the reserve account shall not exceed the total amount of federal impact aid received in the fiscal year. The board, at its discretion, may use the funds in the reserve account to finance the district's general fund or to finance school facilities projects, in a manner consistent with federal law. The total amount of funds on deposit in the reserve account shall not be limited. d. (1) All reserve accounts shall be established and held in accordance with GAAP and shall be subject to annual audit. Any capital gains or interest earned shall become part of the reserve account. A separate bank account is not required, however, a separate identity for each reserve account shall be maintained. (2) A board of education that establishes a federal impact aid reserve account shall: (a) report the amount of federal impact aid received, expended, and on deposit in the federal impact aid reserve account in its annual audit pursuant to N.J.S.18A:23-1, and in the budget made available in a "user-friendly" format using plain language pursuant to N.J.S.18A:22-8; (b) report the amount of federal impact aid received, expended, and on deposit in the federal impact aid reserve account at each board of education meeting, and shall include the information in the board secretary's monthly report in a format to be determined by the commissioner; and (c) provide any additional supporting documentation that may be required by the commissioner pursuant to subsection c. of section 5 of P.L.1996, c.138 (C.18A:7F-5). L.2007, c.62, s.6; amended 2015, c.46, s.1.

TRANSFER SHEETS