New Requirements for the FY2012 Annual Financial Report
- Deficit Fund Balance Summary Calculation Required in the Annual Financial Report (AFR)
IL School Code (105 ILCS 5/17-1). If the result of an audit performed in compliance with Section 3-7 of the same code reflects a deficit as therefore defined, and the district shall within 30 days after acceptance of such audit report, submit a deficit reduction plan.
The deficit reduction plan is required when the “operating funds listed above result in direct revenues (line 5) being less than direct expenditures (line 6) by an amount equal to or greater than one-third (1/3) of the ending fund balance (line 8). That is, if the ending fund balance is less than three times the deficit spending, the district must adopt and file with ISBE a deficit reduction plan to balance the shortfall within three years.
Any required deficit reduction plan is to be in the format provided in the ISBE/School District Budget Form 50-36 (pages 19-26) and is to include only the four funds listed above.
On page 36 of the 2012 Annual Financial Report (AFR) the Deficit Fund Balance Calculation will determine if the AFR is balanced or unbalance replicating the calculation in the School District Budget Form 50-36. If determined a deficit reduction plan is required, the district will amend and resubmit the next fiscal year budget (2013) with the completed plan and narrative if such a plan has not already been required and completed in budget form. School Districts have 30 days upon acceptance of the annual audit report.
- Attempts to Improve Fiscal Efficiency through Shared Services or Outsourcing
According to ILCS 5/17-1.1 and effective January 1, 2012, all school districts and joint agreement entities are required to report attempts to improve fiscal efficiency through Shared Services or Outsourcing as provided in the Annual Financial Report (AFR). The report must be approved by the school board and published on the school district’s/joint agreement entity’s website, if any.
The regional superintendent will compile and publish a report summarizing those attempts of fiscal efficiency.
School Business Services/June2012