You never know when you might need some spare cash to get past a financial rough spot.
That goes for school districts as well as people.
At a school board meeting on Aug. 28, trustees passed third and final reading on a new policy intended to make that extra cash available in case of “financial forecasting risk and unforeseen circumstances.”
The new policy will have School District 69 (Qualicum) carve out some of any accumulated operating surplus (any revenue that exceeded expenditures) to create a contingency reserve.
According to the new policy, and its administrative procedure, the contingency reserve is only to be used to deal with circumstances beyond the school district’s control.
Examples include the elimination of a deficit at the end of a fiscal year, settlement of legal action that’s not covered by the School Protection Program, one-time cost for new educational programs and coverage for disaster recovery spending.
The reserve would ideally be up to 2.5 per cent of the total operating budget for a given year. That would typically put the ideal contingency reserve at about $1 million, but it would likely take several years of operating surpluses to reach that amount.
RELATED: Qualicum school district looking at new policy for surplus cash
The new policy comes out of auditors’ reports from the Ministry of Education highlighting areas that school districts should address “to better support their work as governors and financial stewards of the education sector,” said Ron Amos, SD69’s secretary-treasurer.
He said restrictions on surplus cash won’t really have any negative impact on what the district is able to fund, saying the restrictions “are similar to what has been done in the past.
“The guidelines ask that boards have the conversation and have multi-year plans in place regarding the use of those surpluses that may have been held as ‘unrestricted’ in the past.”
