1. GASB Statement No. 54 Fund Balance Reporting and Governmental Fund Type Definitions TRIGG CO BOARD - JUNE 2011

2. GASB 54 Basics  Applies to governmental funds only (General, Special Revenue, Capital Outlay, and Building Funds)  Effective date – must be in place prior to closing of FY 2011  Balance Sheet object codes are changed as part of the implementation  Requires that local board implement and set minimum fund balance policy to account for new classifications

3. Current Fund Balance Classifications(2 categories)  Reserved Fund Balance – Portion of fund balance not appropriable for expenditure or is legally segregated for a specific use  Unreserved Fund Balance Designated – Indicates tentative plans for the use of future financial resources Undesignated – Remaining amount after accounting for all reserved and designated governmental fund balances

4. GASB 54 Classifications  Five Categories Nonspendable Fund Balance Restricted Fund Balance Committed Fund Balance Assigned Fund Balance Unassigned Fund Balance

5. GASB 54 Classifications Nonspendable – amounts not in a spendable form or that are required to be maintained intact  Amounts for inventories – Object 8722 – Examples – Inventories of Bus Repair Parts or Maintenance Supplies  Amounts for prepaid amounts – Object 8723 – Example – Insurance paid in June for FY 2012

6. Restricted – amounts constrained for a specific purpose by external parties, constitutional provision or legislation  Unspent grant funds  Unspent bond proceeds  Unspent capital outlay and FSPK funds  Funds held in debt service accounts for bond payments

7. GASB 54 Classifications  Committed – amounts constrained for a specific purpose by a government using its highest level of decision-making authority (School Board)  Requires the same group to remove or change the constraints  Action to constrain resources must occur prior to the fiscal year-end; however, the amount can be determined in the subsequent period

8. GASB 54 Classifications  Committed resource possibilities Construction – new and improvements Board initiatives - technology Future personnel costs - Bus purchases – 2 ½ Buses with cameras Sick leave (KRS 157.420) – limited to not more than 50% of the maximum liability for the current year to be determined according to the number of staff employed on September 15 – that are eligible for retirement

9. GASB 54 Classifications  Assigned For all funds other than the general fund, any remaining positive amounts not classified as nonspendable, restricted or committed For the general fund, amounts constrained for the intent to be used for a specific purpose by a governing board or a body or official (Superintendent) that has been designated authority to assign amounts Examples – Land Improvements & Furniture Cannot assign an amount if it would result in a deficit unassigned fund balance

10. GASB 54 Classifications  Unassigned For the general fund, amounts not classified in any other category and have a positive residual amount to report. The general fund is the only fund that would report a positive amount as unassigned. For all other governmental funds not classified in any other category, a negative residual amount would be reported as unassigned. This is the balance of the money in our budget not designated in the previous categories

11. Minimum Fund Balance Policy  If the district has formally adopted minimum fund balance requirements, they should disclose the policy that sets forth the minimum amount such as maintaining an unrestricted fund balance at no less than a period of time to cover regular general fund operating revenues or expenditures.  In modifying board policy to account for GASB 54 reporting requirements on the level of unrestricted fund balance that should be maintained by the general fund, consider the following: The predictability of revenues and the nature of expenditures. The exposure to significant one-time outlays. The need for resources for other funds. General liquidity of the district. Other commitments of the district.

12. District Policy 04.311 SFS Fund has a minimum of 3 months operating costs, we are required by law to have a 2% contingency in Fund 1, however the practice of our local budget to have not less than 4% and not greater than 7% in contingency According to KDE if the local board utilizes the KSBA policy service – Policy 04.311 is sufficient for GASB 54 implementation

13. Encumbrances  Encumbrances will become Purchase Obligations and the process in which they are created and the amount shown on the balance sheets through the open purchase order module will remain the same.  Encumbrances should not be reported on the face of the financial statements  Amounts encumbered for a specific purpose for which amounts have not been previously restricted, committed or assigned should be classified as either committed or assigned, based on the category criteria  Significant encumbrances at year-end should be disclosed in the notes to the financial statements as a commitment

14. COMMITTED EXPENSE PROPOSAL  Included in our approved Tentative Budget Buses - $225,000.00 Sick Leave - $90,000.00 KETS Match - $39,812.00 SBDM Carryover - $23,263.00 Technology - $300,000.00 KISTA Payments - $25,540.00 Gas Tanks/Pumps - $500,000.00 Land Acquisition - $700,000.00 Submitted BG-1 Stadium Lights -$38,875.95 Total Committed $1,942,490.95

15. ASSIGNED EXPENSE PROPOSAL  Included in our approved Tentative Budget FURNITURE & FIXTURES - $50,000.00 SITE IMPROVEMENT  Construction Service - $573,762.00  Land Improvement - $25,000.00 LAND IMPROVEMENT  Construction Service - $250,000.00 Total Assigned $ 898,762.00

16. GRAND TOTAL GASB 54  $2,841,252.95  This amount will be not be shown in the Unassigned Fund Balance