700 Purpose of Non-Instructional and Business

The school district's non-instructional services and business operations assist in the delivery of the education program and include, but are not limited to, transportation, the school lunch program, and child care. The board, as it deems necessary, will provide additional non- instructional services to support the school district’s education program. It shall be the goal of the board to provide non-instructional services and to conduct its business operations and use of public funds in an efficient manner.

Expenditure for Public Purpose

The Board of Directors recognizes and supports the principle that District funds are to be expended only for legitimate public purposes and not for private personal gain for which services of comparable value have not been rendered to the District. The Board of Directors believes it is important to designate those expenditures for officers, directors, employees, and volunteers, which are in addition to salaries and benefits authorized and/or specified in Code 400 and legitimate expense reimbursements, which serve a legitimate public purpose.

The Board of Directors authorizes the expenditure of District funds for District officers, directors, employees, and volunteers for the following purposes, as these are commonly-granted benefits for employees and volunteers in public and private organizations which aid in recruitment of personnel, promote improvement of staff morale and cooperation, assist in building a commitment to the District, and improve employee and business efficiency, thus assisting in creating a more productive learning environment:

  • Mementos for employees for recognition of 25 years of service to the District, with the mementos not to exceed $50 each in cost to the District.

  • A retirement appreciation function once per year to recognize retiring employees 

  • A recognition item upon the retirement of an employee, with the recognition item not to exceed $75 in cost to the District.

  • A recognition item upon the end of service by a Board member not to exceed $50 each in cost to the District.

  • Staff welcome and appreciation meal which Board members and employees attend (a limited number of invited community members may be invited also), once per school year, to recognize employee contributions and to promote communication between Board members, administrators, and other staff members, with the cost of the meal to the District not to exceed $10 per attendee.

  • Meals for licensed interviewees (and if the interviewee is an administrative candidate, the interviewee’s spouse) and members of the interview committee accompanying the interviewee at the time of an interview not to exceed $10  per attendee if the interview extends over lunch and/or dinner.

  • Meals on-site during staff development (in-service) meetings, committee meetings, and meetings hosted at Knoxville with the costs of the meals to the District not to exceed $10 per attendee. This is to promote a more efficient day so that staff members and attendees do not leave the premises.

  • A volunteer appreciation function which Board members, employees, and volunteers may attend once a year to recognize the contributions of volunteers with the cost not to exceed $3 per attendee and where tokens of appreciation may be given to volunteers not to exceed $3 per volunteer in cost to the District.

The Board of Directors also authorizes the expenditure of District funds for coffee and soft drinks in the school buildings. Coffee, soft drinks, light refreshments, such as cookies, may also be made available at Board and committee meetings to promote a welcoming environment and as a common courtesy for individuals who travel to the District building for attendance at District meetings and conferences.

No District funds will be used to pay the cost of any alcoholic beverage and no alcoholic beverage will be available on school grounds.

 

Approved:        10/21/2019                   Reviewed:                     Revised:   

701 Depository of Funds

Each year at its annual meeting, the board shall designate by resolution the name and location of the Iowa located financial depository institution or institutions to serve as the official school district depository or depositories. The maximum deposit amount to be kept in the depository shall be stated in the resolution. The amount stated in the resolution must be for all depositories and include all of the school district's funds.

 

Approved:        10/21/2019                   Reviewed:                     Revised:   

702 Transfer of Funds

When the necessity for a fund has ceased to exist, or when the board is given authority to transfer categorical or other funds and has met the conditions of exercising the authority, the balance may be transferred to another fund or account or the expenditures may be directed by board resolution, as required. School district monies received for a specific purpose or upon vote of the people may only be transferred by board resolution when the purpose for which the monies were received has been completed or when authority to exercise local discretion to expend funds flexibility has been granted. Voter approval is required to transfer monies to the general fund from the capital projects fund and debt service fund unless state authority allows such transfer without a vote.

 

Approved:        10/21/2019                   Reviewed:                     Revised:   

703 Financial Records

Financial records of the school district shall be maintained in accordance with generally accepted accounting principles (GAAP) as required or modified by law. School district monies shall be received and expended from the appropriate fund and/or account. The funds and accounts of the school district shall include, but not be limited to:

Governmental fund type:

  • General fund

  • Management levy fund

  • Physical plant and equipment levy fund

  • Public education and recreation levy fund

  • Student activity fund

  • Capital projects fund

  • Debt service fund

Proprietary fund type:

  • Enterprise fund

  • School nutrition fund

  • Child care fund

  • Trust, permanent or agency funds

Fiduciary funds:

  • Trust or agency funds

    • Expendable trust funds

    • Nonexpendable trust funds

    • Agency funds

    • Pension trust funds

Account groups:

  • General fixed assets account group

  • General long-term debt account group

As necessary, the board may, by board resolution, create additional funds within the governmental, proprietary and fiduciary fund types. The resolution shall state the type of fund, name of the fund, and purpose of the fund.

The general fund is used primarily for the education program. Special revenue funds are used to account for monies restricted to a specific use by law. Proprietary funds account for operations of the school district operated similarly to private business, and they account for the costs of providing goods and services provided by one department to other departments on a cost reimbursement basis. Fiduciary funds are used to account for monies or assets held by the school district on behalf of, or in trust for, another entity. The account groups are the accounting records for fixed assets and long-term debt.

Approved:        10/21/2019                   Reviewed:                     Revised:   

703.1 Intangible Assets Policy

 

I.         Definition of Intangible Assets

           A.       Intangible Asset:  

 

Intangible assets are assets that are:

           (1)       Identifiable – Either the assets:

(a)       Can be separated or divided from the District and sold, transferred, licensed, rented or exchanged; or

(b)       Arose from some legal right (i.e., a contractual right), regardless of whether those rights are separable or dividable;

           (2)       Lacking physical substance;

           (3)       Non-financial in nature – The assets are not in a monetary form, such as cash or investment securities; and

           (4)       Possessing a useful life that extends beyond a single financial reporting period.[1]

 

Examples of intangible assets include the following:

(1)       Easements or land use rights (i.e., water rights, timber rights and mineral rights);

(2)       Patents, trademarks and copyrights; and

(3)       Computer software or websites that are purchased, licensed or internally generated.

 

Examples of assets that are not intangible assets for purposes of this Policy include only the following:

(1)       Assets acquired or created primarily for purposes of obtaining income or profit, as these are considered investment assets;

(2)       Assets from capital lease transactions reported by lessees, except licensing agreements to lease commercially available computer software; and

(3)       Goodwill established or created between the District and another entity.

 

           B.       Outlays Associated with Internally Generated Intangible Assets

Intangible assets that are generated or created internally likely have outlay expenses associated with the generation or creation.  Intangible assets are considered to be generated or created internally if they are:

(1)       Created by the District;

(2)       Created by a third-party contracted by the District; or

(3)       Acquired by the District from a third-party and require more than minimal incremental effort on the part of the District to begin to achieve the expected level of service capacity.

 

           C.       Outlays Associated with Internally Generated Computer Software

 

Computer software that is generated or created internally likely has outlay expenses associated with the generation or creation.  Computer software is considered to be generated or created internally if it is:

  1. Developed by the District;

  2. Developed by a third-party contracted by the District; or

  3. Commercially available software acquired, purchased or licensed by the District from a third-party that is modified using more than minimal incremental effort before being put into operation.

 

II.        Measuring of Intangible Assets

           A.       Threshold for Capitalization of Intangible Assets

 

The District shall adopt an intangible asset capitalization threshold policy to govern the amount at and above which intangible assets must be reported in the District’s annual reporting statements and audits.  More specifically, the policy shall provide a threshold to be applied to individual intangible assets and shall prohibit the aggregation of items, including intangible assets and outlays, to meet the threshold.[2]  The policy shall be approved by the Board of Education prior to its adoption.

 

[Note: The District’s policy regarding intangible asset capitalization threshold should generally be designed to capture eighty percent (80%) of the total cost of the District’s intangible assets.  Therefore, prior to creating a policy regarding intangible asset capitalization threshold, the District must know the total value of its intangible assets.]

 

           B.       Recognition of Intangible Assets

 

The District shall record individual intangible assets exceeding the threshold amount outlined in the District’s intangible asset capitalization threshold policy as follows:

  1. Intangible assets received in an exchange transaction or purchased shall be recorded at actual historical cost, which includes direct costs, and excludes indirect costs;          

  2. Intangible assets in the form of business activities and enterprise funds received in an exchange transaction or purchased shall be recorded at actual historical cost, which includes direct costs, specifically capitalized interest and ancillary charges, and excludes indirect costs; and

  3. Intangible assets received in a non-exchange transaction or donated shall be recorded at estimated fair market value at the time of acquisition, which requires implementation of a rational method to determine or estimate the value at which the asset could be exchanged between willing parties not involved in a forced sale.

  4. Intangible assets reported retroactively[3] shall be recorded at actual historical cost,[4] regardless of whether the asset is fully amortized prior to June 30, 2009.  If an intangible asset reported retroactively is fully amortized prior to June 30, 2009, the District shall record the value of the intangible asset separately from the value of the amortization.

 

III.       Accounting for Intangible Assets

A.       Intangible Assets

 

Intangible assets exceeding the threshold shall be accounted for as capital assets.  Therefore, all financial requirements concerning capital assets, including, but not limited to, all accounting and reporting requirements, such as those associated with recognition, measurement, presentation and disclosure, shall be followed.

 

           B.       Outlays Associated with Internally Generated Intangible Assets

 

Outlays from internally generated intangible assets exceeding the threshold shall not be accounted for as capital assets until they are identifiable and the “specified conditions criteria” have occurred (see below).  Outlays exceeding the threshold not meeting these requirements and/or incurred prior to these criteria occurring shall be accounted for as an expense when the expense is incurred.

 

Outlays from internally generated intangible assets exceeding the threshold shall be accounted for as capital assets if they occur after such time as:

 

  1. The assets are identifiable – See the definition outlined in Section I of this Policy; and

  2. The “specified conditions criteria” have occurred, as follows:

(a)       Determination of the specific objective of the project and the nature of the service capacity that is expected to be provided by the intangible asset upon completion of the project;

(b)       Demonstration of the technical or technological feasibility for completing the project so that the intangible asset will provide its expected service capacity; and

(c)       Demonstration of the current intention, ability, and presence of effort to complete or, in the case of a multiyear project, continue development of the intangible asset.

 

          C.       Outlays Associated with Internally Generated Computer Software

 

Outlays from internally generated computer software developed by the District or by a third-party contracted by the District exceeding the threshold shall be accounted for as follows:

 

(1)       During the preliminary project stage, all outlays exceeding the threshold shall be accounted for as an expense when the expense is incurred.  The preliminary project stage involves the conceptual formulation and evaluation of alternatives, the determination of the existence of needed technology and the final selection of alternatives for development of the software.

 

(2)       During the application development stage, outlays that occur before the specified conditions criteria have occurred and exceed the threshold shall be accounted for as an expense when the expense is incurred; outlays that occur after the specified conditions criteria have occurred[5] and exceed the threshold[6] shall be accounted for as capital assets; and outlays that occur after the computer software is substantially complete and operational and exceed the threshold shall be accounted for as an expense when the expense is incurred.  The application development stage involves the design of the chosen path, including, but not limited to the purchase of the software or license;[7] the software configuration and the software interfaces; the coding; the installation to hardware; the testing; any minor modifications made to the software before it is placed into operation;[8] and the data conversion, if such was deemed necessary in order to make the software operational.

 

(3)       During the post-implementation and operation stage, all outlays exceeding the threshold shall be accounted for as an expense when the expense is incurred.  The post-implementation and operation stage includes the data conversion, if such was not deemed necessary during the application development stage in order to make the software operational; the application training; and the software maintenance.

 

Outlays from internally generated computer software extensively modified by the District or by a third-party contracted by the District exceeding the threshold shall be accounted for as follows:

 

(1)       All outlays from the modification of computer software exceeding the threshold shall be accounted for as capital assets if one of the following conditions exist:

 

(a)       The modification causes an increase in the functionality of the software (the software is able to perform tasks that it was previously incapable of performing);

 

(b)       The modification causes an increase in the efficiency of the software (the software offers an increased level of service without the need for an increased performance of tasks); or

 

(c)       The modification extends the estimated useful life of the software.

 

(2)       All outlays from the modification of computer software exceeding the threshold shall be accounted for as an expense when the expense is incurred if none of the above conditions exists.

 

 

IV.      Amortization of Intangible Assets

 

In amortizing an intangible asset that is capitalized because it exceeds the threshold and meets the requirements above,[9] the following general rules shall apply:

 

(1)       The useful life of an intangible asset generally shall be estimated.  Therefore, the intangible asset has a determinable useful life, even if it must be estimated, and shall be amortized using the straight-line method.

 

(2)       The useful life of an intangible asset that arises from and is limited by contractual or other legal rights shall not exceed the period of the intangible asset’s service capacity provided under the contract or other legal provision.  Therefore, the intangible asset has a determinable useful life, even if it must be estimated, and shall be amortized using the straight-line method.

 

(3)       The useful life of an intangible asset that is not limited by any legal, contractual, regulatory, technological or other factors shall be indefinite.  Therefore, the intangible asset has no determinable useful life and shall not be amortized.

 

In considering changes in circumstances that affect the amortization of an intangible asset, the following rules shall apply:

 

(1)       An intangible asset that arises from and is limited by contractual or other legal rights shall take into consideration contract renewal periods for purposes of determining its useful life and its amortization schedule only if the following requirements are met:

 

(a)       There is evidence that the District will seek and be able to achieve contract renewal; and

(b)       The anticipated outlay for contract renewal is nominal in relation to the level of service capacity obtained by the contract renewal.

 

(2)       An intangible asset that was once not limited by any legal, contractual, regulatory, technological or other factors, but now is limited by such factors due to changes in conditions, shall be tested for impairment[10] because the expected duration of the useful life of the asset has changed, and then the following rules shall apply:

 

(a)       If an impairment is determined not to exist, the intangible asset has a determinable useful life and shall be amortized using the straight-line method.

(b)       If an impairment is determined to exist, the following must occur:

 

(i)        The loss due to the impairment shall be accounted for as a loss;

(ii)       The intangible asset has a useful life that must be estimated and is determinable; and

(iii)      The carrying value, or the value remaining after accounting for the impairment, shall be amortized using the straight-line method over the remaining estimated useful life.

 

 

V.       Selling or Disposing of Intangible Assets

 

In selling or disposing of intangible assets, the District shall calculate and report a gain or loss on the sale or disposal.  The gain or loss shall be calculated by subtracting the net book value, which consists of the historical cost less any accumulated amortization, from the net amount realized on the sale or disposal.

 

 

VI.      Application of Policy

 

The requirements of this Policy shall apply to all financial statements covering periods beginning after June 30, 2009.  Consequently,

 

The requirements of this Policy shall apply retroactively to intangible assets that were in existence from July 1, 1980, through June 30, 2009.[11]  However, the following intangible assets shall not be retroactively reported as capital assets:

 

(1)       Intangible assets considered to have an indefinite useful life as of June 30, 2009;

(2)       Intangible assets considered to be internally generated as of June 30, 2009;

(3)       Outlays from internally generated computer software incurred in the application development stage on or prior to June 30, 2009;[12]

(4)       Any intangible asset held by a “Phase 3” District, characterized as such for purposes of implementing GASB Statement 34.  [Note: The District needs to include a specific statement regarding whether the District was classified as “Phase 3” for purposes of implementing GASB Statement 34.]

 

[Note: This effectively means that the District, which is on an accrual basis of accounting, will be required to restate its beginning net assets, fund balances, or fund net assets in order to fully report, as of July 1, 2009, the beginning of fiscal year 2010, the appropriate value and amortization of certain intangible assets that were in existence from July 1, 1980 to June 30, 2009.]

____________________________________________________________________________ 

[1] This requirement also applies to an intangible asset in the form of a computer software license purchased or renewed, and the useful life must extend beyond a single reporting period in order for the computer software license to be capitalized.

[2] With intangible assets in the form of computer software licenses purchased or renewed, each individual license must be accounted for separately and all licenses cannot be aggregated for purposes of measuring wither the assets have exceeded the threshold.

[3] Reference Section VI of this Policy for the retroactive reporting of intangible assets.

[4] If actual historical cost cannot be determined for intangible assets acquired prior to June 30, 2009, due to lack of sufficient records, estimated historical cost shall be used.

[5] The specified conditions criteria are considered to be met for internally generated computer software developed by the District or a third-party contracted by the District when the preliminary project stage is complete and the Board authorizes and/or commits to funding the development of new computer software.

[6] In determining whether the outlays exceed the threshold, each outlay shall be accounted for separately and no outlay shall be aggregated with any other outlay for purposes of measuring wither the outlays have exceeded the threshold.  For example, the initial purchase of the computer software or license and the modifications made to the computer software or license should be accounted for separately and should not be aggregated for purposes of measuring wither the outlays have exceeded the threshold.

[7] The purchase of the computer software or license shall be treated as an outlay that shall be capitalized.

[8] Making minor modifications to the computer software or license shall be treated as an outlay that shall be capitalized.

[9] This includes intangible assets that were in existence from July 1, 1980, through June 30, 2009, and must be retroactively reported.

[10] Internally generated intangible assets and computer software commonly experience impairment with development stoppage, including, but not limited to, stoppage of development of computer software due to changes in the priorities of management.

[11] This includes computer software purchased prior to June 30, 2009, that is currently still in use.

[12] Reference Section III, Subsection C of this Policy for the accounting of outlays from internally generated computer software incurred in the application development stage after June 30, 2009.

 

Approved:        10/21/2019                   Reviewed:                     Revised:   

703A Governmental Fund Balances

General

The board strives to maintain adequate fund balances and reserves in order to:

1.              Provide sufficient cash flow for daily financial needs;

2.              Secure and maintain investment-grade bond ratings;

3.              Offset significant economic downturns or revenue shortfalls; and

4.              Provide funds for unforeseen expenditures related to emergencies.

 

Reporting Fund Balances

The board shall engage in accounting and financial reporting procedures in compliance with the Governmental Accounting Standards Board’s Statement No. 54 (“GASB 54”) or successor.

 

Pursuant to GASB 54, governmental fund balances shall be identified for purposes of reporting as one of the following types of funds:

1.              “Nonspendable”- fund balances that can never be spent because the balances are either not in spendable form because they cannot currently be spent or cannot ever be spent (i.e., supply inventory funds, prepaid items, long-term loans receivables (including from loans to other funds of the District) and non-financial assets held for resale) or the District is legally or contractually required to maintain the balances in-tact (i.e., principal of an endowment fund).

2.              “Restricted”- fund balances that can be used only for the specific purposes permitted in externally enforceable legal restrictions, including, but not limited to, the constitution, enabling legislation or external resource providers (i.e., PPEL funds, Debt Service funds, Capital Project funds, state grant carryover funds, categorical funds including for example, per pupil supplement funds, special education funds, drop-out prevention funds).

3.              “Committed”- fund balances that can be used only for the specific purposes determined by a formal action of the Board.

4.              “Assigned”- fund balances that are constrained by the District’s intent to use the funds for specific purposes determined by the Board and/or designee, but which are neither restricted nor committed (i.e., cash flow fund, funds for book fairs or field trips that are within the general fund).

5.              “Unassigned”- fund balances that have not been restricted, committed or assigned (i.e., residual classification for the general fund or a deficit balance from overspending for specific purposes for which amounts have been restricted, committed or assigned for other funds).

Governmental fund balances shall first be distinguished based upon whether the fund balance is nonspendable, as defined above, and then shall be distinguished based upon whether the fund balance is restricted, classified, assigned or unassigned, all as defined above. 

 

Governmental fund balances shall be identified at the highest category of identification possible, regardless of whether the fund balance also fits into a lower category of identification (i.e., a PPEL fund balance should be reported as “restricted,” even if a separate Board action “committed” a portion of the PPEL fund balance to a specific purpose).

 

Governmental fund balances identified as committed fund balances after the end of the fiscal year, the amount shall be reflected as assigned on the balance sheet for that year.

 

Authority to Commit or Assign Fund Balances

The Board shall have the authority to determine whether a governmental fund balance in the District’s general fund is committed and/or assigned, both as defined above.  The Board delegates to the [superintendent and/or the Board secretary] the authority to assign a fund balance in the District’s general fund to be used for a specific purpose.

 

The Board shall take formal board action prior to committing a fund balance, modifying the commitment of a fund balance or removing the commitment of a fund balance.  The Board shall approve by a majority vote the commitment of a fund balance, the modification of the commitment of a fund balance and the removal of the commitment of a fund balance.  The Board shall take action to commit a fund balance prior to the end of each fiscal year in which the original committed amount is determined. The Board may take action to commit a fund balance without determining the exact amount of the committed fund balance prior to the end of the fiscal year, provided the intended committed purpose is identified prior to the end of the fiscal year and the exact amount of the committed fund balance is determined after the end of the fiscal year.

 

Spending Fund Balances

Pursuant to GASB 54 and absent any other specific direction in place at the District, the District shall spend and/or reduce governmental fund balances in the following order: restricted fund balance, committed fund balance, assigned fund balance and unassigned fund balance.

Approved:        10/21/2019                   Reviewed:                     Revised:   

704 Cash in School Buildings

The amount of cash that may be kept in the school building for any one day shall be sufficient for that day's operations. Funds raised by students shall be kept in the central office for a maximum of five day and then deposited in the student activity fund.

A minimal amount of cash shall be kept in the central administration office at the close of the day. Excess cash shall be deposited in the authorized depository of the school district.

 

 

Approved:          10/21/2019                   Reviewed:                     Revised:   

705 Budget Planning

Prior to certification of the budget, the board will review the projected revenues and expenditures for the school district and make adjustments where necessary to carry out the education program within the revenues projected.

A budget for the school district shall be prepared annually for the board's review. The budget shall include the following:

  • the amount of revenues from sources other than taxation;

  • the amount of revenues to be raised by taxation;

  • an itemization of the amount to be spent in each fund; and,

  • comparison of the amount spent and revenue received in each fund for like purposes in the two prior fiscal years.

 

It shall be the responsibility of the Superintendent and Business Manager to prepare the budget for review by the board prior to the April 15 Certified Budget deadline each year.

Prior to the adoption of the proposed budget by the board, the public shall be apprised of the proposed budget for the school district. Prior to the adoption of the proposed budget by the board, members of the school district community shall have an opportunity to review and comment on the proposed budget. A public hearing for the proposed budget of the board shall be held each year in sufficient time to file the adopted budget no later than April 15.

The proposed budget filed by the board with the board secretary and the time and place for the public hearing on the proposed budget shall be published in a newspaper designated for official publication in the school district. It shall be the responsibility of the board secretary to publish the proposed budget and public hearing information not less than ten days nor more than 20 days prior to the public hearing.

The board shall adopt and certify a budget for the operation of the school district to the county auditor by April 15. It shall be the responsibility of the board secretary to file the adopted and certified budget with the county auditor and other proper authorities.

The board may amend the budget for the fiscal year. The amendment procedures shall follow the procedures for public review and adoption of the original budget by the board outlined in these policies.

 

 

 

 

Approved:          10/21/2019                   Reviewed:                     Revised:   

706 Investments

 

School district funds in excess of current needs shall be invested in compliance with this policy. This policy applies to all operating funds, bond proceeds, and other funds.

The goals of the school district's investment portfolio in order of priority are:

  • To provide safety of the principal;

  • To maintain the necessary liquidity to match expected liabilities; and

  • To obtain a reasonable rate of return.

 

The responsibility for conducting investment transactions resides with the treasurer and those authorized by resolution.  It shall be the responsibility of the treasurer to oversee the investment portfolio in compliance with this policy and Iowa Code Chapter 12B.  The investment of bond funds or sinking funds shall comply not only with this policy, but also the applicable bond resolution.

 

In making investments, the school district shall exercise the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with such matters would use to meet the goals of the investment program.

 

School district funds are monies of the school district including operating funds, bond proceeds, and other funds. Operating funds are funds which are reasonably expected to be used during the current budget year or within fifteen months of receipt. When investing operating funds, the investments must mature within three hundred and ninety-seven (397) days or less. When investing funds other than operating funds, the investments mature according to the need for the funds.

 

The board authorizes the treasurer to invest funds in excess of current needs in the following investments:

  1. Obligations of the United States government, its agencies and instrumentalities; and

  2. Certificates of deposit and other evidences of deposit at federally insured Iowa depository institutions approved pursuant to Iowa Code Chapter 12C and authorized as a depository of the district by resolution;

  3. Prime bankers’ acceptances that mature within two hundred seventy (270) days and that are eligible for purchase by a federal reserve bank, provided that at the time of purchase no more than ten percent (10%) of the investment portfolio shall be in investments authorized by this subparagraph and that at the time of purchase no more than five percent (5%) of the investment portfolio shall be invested in the securities of a single issuer;

  4. Commercial paper or other short-term corporate debt that matures within two hundred seventy (270) days and that is rated within the two highest classifications, as established by at least one of the standard rating services approved by the superintendent of banking by rule adopted pursuant to Iowa Code chapter 17A, provided that at the time of purchase no more than five percent (5%) of all amounts invested in commercial paper and other short-term corporate debt shall be invested in paper and debt rated in the second highest classification, and provided further that at the time of purchase no more than ten percent (10%) of the investment portfolio shall be in investments authorized by this subparagraph and that at the time of purchase no more than five percent (5%) of the investment portfolio shall be invested in the securities of a single issuer;

  5. Repurchase agreements whose underlying collateral consists of the investments set out in (1) if the political subdivision takes delivery of the collateral either directly or through an authorized custodian. Repurchase agreements do not include reverse repurchase agreements;

  6. An open-end management investment company registered with the federal Securities and Exchange Commission under the federal Investment Company Act of 1940, 15 U.S.C. §80a-1, and operated in accordance with 17 C.F.R. §270.2a-7.

  7. A joint investment trust organized pursuant to Iowa Code chapter 28E, provided that the joint investment trust shall be one of the following: (i) Rated within the two highest classifications by at least one of the standard rating services approved by the superintendent of banking by rule adopted pursuant to Iowa Code chapter 17A and operated in accordance with either 17 C.F.R. §270.2a-7, or with the requirements of the governmental accounting standards board for external investment pools. (ii) Registered with the federal securities and exchange commission under the federal Investment Company Act of 1940, and operated in accordance with 17 C.F.R. §270.2a-7.  The manager or investment advisor of the joint investment trust shall be registered with the federal Securities and Exchange Commission under the Investment Advisor Act of 1940;

  8. Warrants or improvement certificates of a levee or drainage district.

 

It shall be the responsibility of the treasurer to bring a contract with an outside person to invest school district funds, to advise on investments, to direct investments, to act in a fiduciary capacity or to perform other services to the board for review and approval. The treasurer shall also provide the board with information about and verification of the outside person's fiduciary bond. Contracts with outside persons shall include a clause requiring the outside person to notify the school district within thirty days of any material weakness in internal structure or regulatory orders or sanctions against the outside person regarding the services being provided to the school district and to provide the documents necessary for the performance of the investment portion of the school district audit. The compensation of the outside persons shall not be based on the performance of the investment portfolio.

 

The treasurer shall be responsible for reporting to and reviewing with the board at its regular meetings the investment portfolio's performance, transaction activity, and current investments including the percent of the investment portfolio by type of investment and by issuer and maturity. The report shall also include trend lines by month over the last year and year-to-year trend lines regarding the performance of the investment portfolio. It shall also be the responsibility of the treasurer to obtain the information necessary to ensure that the investments and the outside persons doing business with the school district meet the requirements outlined in this policy.

 

It shall be the responsibility of the superintendent to deliver a copy of this policy and any future amendments to the school district's depositories, auditor, and outside persons doing investment business with the school district.

 

It shall also be the responsibility of the superintendent, in conjunction with the treasurer, to develop a system of investment practices and internal controls over the investment practices. The investment practices shall be designed to prevent losses, to document the officers' and employees' responsibility for elements of the investment process, and address the capability of any outside party assisting with the management of the district funds.

 

Approved:          10/21/2019                   Reviewed:                     Revised:   

707 Gifts – Grants – Bequests

The board believes gifts, grants, and bequests to the school district may be accepted when they will further the interests of the school district. The board shall have sole authority to determine whether a gift, grant or bequest furthers the interests of the school district.

Gifts, grants, and bequests shall be approved by the board. Once a gift, grant or bequest has been approved by the board, a board member or the superintendent may accept the gift, grant or bequest on behalf of the school district.

Gifts, grants, and bequests once accepted on behalf of the school district shall become the property of the school district. Gifts, grants, and bequests shall be administered in accordance with terms, if any, agreed to by the board.

 

Approved:          10/21/2019                   Reviewed:                     Revised:   

708 Student Activities Funds

Revenue raised by students or from student activities shall be deposited and accounted for in the student activities fund. This revenue is the property of and shall be under the financial control of the board. Students may use this revenue for purposes approved by the superintendent and business manager.

Whether such revenue is collected from student contributions, club dues or special activities or result from admissions to special events or from other fund-raising activities, all funds will be under the jurisdiction of the board and under the specific control of the activities director. They will be deposited in a designated depository and will be disbursed and accounted for in accordance with instructions issued by the Iowa Department of Education and State Auditor’s Office.

It shall be the responsibility of the school business official to keep student activity accounts up-to-date and complete.

Any unencumbered class or activity account balances will automatically revert to the activity fund when a class graduates or an activity is discontinued.

 

Approved:          10/21/2019                   Reviewed:                     Revised:   

709 Purchasing – Bidding

The board supports economic development in Iowa.  Purchases by the school district will be made in Iowa for Iowa goods and services from a locally-owned business located within the school district or from an Iowa-based company which offers these goods or services if the cost and other considerations are relatively equal and they meet the required specifications.

It shall be the responsibility of the superintendent to approve purchases, except those authorized by or requiring direct board action. The superintendent shall have the authority to authorize purchases without competitive bids for goods and services costing under $10,000.00 without prior board approval. For all purchases for goods and services costing over $10,000.00, the superintendent shall seek competitive quotes or bids as appropriate, and shall submit to the board for its review.

The superintendent may coordinate and combine purchases with other governmental bodies to take advantage of volume price breaks. Joint purchases with other political subdivisions will be considered in the purchase of equipment, accessories or attachments with an estimated cost of $50,000 or more.

 

Public Improvement Projects

For goods and services utilized in public improvement projects, as defined under Iowa law, costing $57,000 or less, the superintendent shall receive quotes of the goods and services to be purchased prior to approval of the board.

For goods and services utilized in public improvement projects, as defined under Iowa law, costing more than $57,000 and less than $139,000, the superintendent shall receive competitive quotes of the goods and services to be purchased prior to approval of the board.

For goods and services utilized in public improvement projects, as defined under Iowa law, costing more than $139,000, the superintendent shall receive competitive sealed bids of the goods and services to be purchased prior to approval of the board, including construction contracts and school buses.

The purchase will be made from the lowest responsible bidder based upon total cost considerations including, but not limited to, the cost of the goods and services being purchased, availability of service and/or repair, delivery date, and other factors deemed relevant by the board.

The board and the superintendent shall have the right to reject any or all bids, or any part thereof, and to re-advertise. The board will enter into such contract or contracts as the board deems in the best interests of the school district.

The procurement of all supplies, equipment, and services shall be initiated by the issuance of an official purchase order authorized by the superintendent, or by the superintendent's designee and signed by an authorized staff member. Only those supplies, equipment, and services procured by formal contract shall be exempt.

 

 

Approved:          10/21/2019                   Reviewed:                     Revised:   

710 Payment for Goods and Services

The board authorizes the issuance of warrants for payment of claims against the school district for goods and services. The board will allow the warrants after the goods and services have been received and accepted in compliance with board policy and the claims audited by the board.

Claims for items pursuant to the terms of a written contract approved by the board, such as payment of freight, athletic officials, postage, printing, water, lights, telephone, rents, and payment of salaries may be paid by the board secretary prior to formal audit and approval by the board. In addition, the secretary, upon approval of the board president, may issue warrants for approved registrations, claims offering a discount for early payment, approved travel expenses, approved goods and services delivered C.O.D., and other verified bills filed with the secretary when the board is not in session prior to payment of these claims and prior to audit and approval by the board. The board secretary shall examine the claims and verify bills.

The secretary shall determine to the secretary's satisfaction that the claims presented to the board are in order and are legitimate expenses of the school district. It shall be the responsibility of the secretary to bring claims to the board for approval.  Hereafter, paid claims shall be entered on record in the regular minutes of the secretary.

All warrants must be processed through the district’s secure financial accounting software system that utilizes electronic signatures.

 

Approved:          10/21/2019                   Reviewed:                     Revised:   

711 Financial Reports

The board secretary shall report to the board each month the receipts, disbursements, and balances of the various funds. This report shall be in written form and sent to the board with the agenda for the board meeting.

Each month the schedule of bills allowed by the Board of Directors shall be published in a newspaper designated as a newspaper for official publication by the board secretary. Annually, the total salaries paid to employees regularly employed by the school district shall also be published in a newspaper designated as a newspaper for official publication.

The board shall cause to have published the proceedings of each regular or special meeting after the adjournment of such meetings. The secretary shall furnish a copy of the proceedings within two (2) weeks following the adjournment of the meeting.

 

Approved:          10/21/2019                   Reviewed:                     Revised:   

712 Audit

To review the funds and accounts of the school district, the board shall employ an auditor to perform an annual audit of the financial affairs of the school district in compliance with Iowa Code Chapter 11.  The results of the annual audit shall be included in the official record of the board. Such annual audit shall be filed with the Auditor of State and the Iowa Department of Education and the federal government, if required, within nine months of the conclusion of the fiscal year.  

 

Approved:          10/21/2019                   Reviewed:                     Revised:   

713 Care, Maintenance and Disposal of School District Records

School district records shall be housed in the central administration office of the school district. It shall be the responsibility of the superintendent to oversee the maintenance and accuracy of the records. The following records shall be kept in accordance with Generally Accepted Accounting Principles (GAAP) and other applicable laws, and preserved according to the schedule below:

  • Secretary's financial records                                           

    • Permanently

  • Treasurer's financial records                                            

    • Permanently

  • Minutes of the Board of Directors                                    

    • Permanently

  • Annual audit reports                                                         

    • Permanently

  • Annual budget                                                                  

    • Permanently

  • Permanent record of individual pupil                               

    • Permanently

  • Records of payment of judgments against the school district                                                              

    • 20 years

  • Bonds and bond coupons                                                 

    • 10 years

  • Written contracts                                                              

  • 10 years

  • Cancelled warrants, check stubs, bank statements, bills, invoices, and related records       

  • 5 years

  • Recordings of closed meetings, except if matters are in litigation.                                                    

  • 1 year

  • Program grants                                                                

  • Determined by the grant

  • Non-payroll personnel records                                         

  • 7 years following employee separation from the district

  • Payroll records                                                                 

  • 3 years

 

Employees' records shall be maintained in the central administration office of the school district by the superintendent, the building administrator, the employee's immediate supervisor, and the board secretary.

An inventory of the furniture, equipment, and other non-consumable items other than real property of the school district shall be conducted annually under the supervision of the superintendent. This report shall be filed with the board secretary.  A perpetual inventory shall be maintained on consumable property of the school district.

The permanent and cumulative records of students currently enrolled in the school district shall be maintained in the administration office of the attendance center where the student attends.

Permanent records must be preserved in a manner safe from destruction by fire or other natural disaster. The building administrator shall be responsible for keeping records current. Records of students who have graduated or are no longer enrolled in the school district shall be preserved by the High School administration office. These records will be maintained by the high school principal.

The superintendent may electronically store and/or back-up or use any other reliable mass storage method to preserve school district records and may destroy paper copies of the records if they are more than three years old.

Approved:          10/21/2019                   Reviewed:                     Revised:   

714 Insurance Program

The board will maintain a comprehensive insurance program to provide adequate coverage against major types of risk, loss, or damage, as well as legal liability. The board will purchase insurance at replacement values, when possible, after reviewing the costs and availability of such insurance. The comprehensive insurance program shall be reviewed at least once every three years. The board shall periodically use a request for proposal procedure in selecting their insurance provider.  Insurance will only be purchased through legally licensed Iowa insurance agents.

The school district may assume the risk of property damage, legal liability, and dishonesty in cases in which the exposure is so small or dispersed that a loss does not significantly affect the operation of the education program or financial condition of the school district. Insurance of buildings, structures or property in the open will not generally be purchased to cover loss exposures below $ 1000.00 unless such insurance is required by statute or contract.

The board may retain a private organization for fixed assets management services.

Administration of the insurance program, making recommendations for additional insurance coverage, placing the insurance coverage and loss prevention activities shall be the responsibility of the superintendent. The fixed assets manager shall be responsible for maintaining the fixed assets management system, processing claims, and maintaining loss records.

Approved:          10/21/2019                   Reviewed:                     Revised:   

715 School Food Service Program

The school district will operate a school lunch and breakfast program in each attendance center. The school food program services will include hot lunches through participation in the National School Lunch Program and supplementary foods for students during the school day. Students may bring their lunches from home and purchase milk or juice and other incidental items.

School food service facilities are provided to serve students and employees when school is in session and during school-related activities. They may also be used under the supervision of the superintendent for food service to employee groups, parent-teacher meetings, civic organizations meetings for the purpose of better understanding the schools, and senior citizens in accordance with board policy.

The school food service program is operated on a non-profit basis. The revenues of the school food service program will be used only for paying the costs of the school food service program. Supplies of the school food service program shall only be used for the school food service program.

The board will set, and periodically review, the prices for school lunches, breakfasts, and special milk programs. It shall be the responsibility of the superintendent and business manager to make a recommendation regarding the prices of school lunches, breakfasts, and milk. Employees, students and others will be required to pay for meals consumed.

It shall be the responsibility of Food Service Director to administer the program and to coordinate with the superintendent and business manager for the proper functioning of the school food services program.

 

 

Approved:          10/21/2019                   Reviewed:                     Revised:   

716 Free or Reduced Cost Meals Eligibility

Students enrolled and attending school in the school district, who are unable to afford the special milk program, the cost or a portion of the cost of a school lunch, breakfast, and supplemental foods, will be provided school food program services at no cost or at a reduced cost.

 

It shall be the responsibility of the food service director to determine if a student qualifies for free or reduced cost school food services. Students, whom the food service director believes are in need of proper nourishment will not be denied school food program services simply because the necessary paperwork has not been completed.

 

*It shall be the responsibility of the Superintendent to establish regulations regarding the collection of unpaid meal debt and service of meals for students who are not eligible for free or reduced price lunch for whom sufficient funds are not available in their account for payment for payment.

 

Approved:          10/21/2019                   Reviewed:                     Revised:   

717 Student School Transportation Eligibility

Elementary and middle school students living more than two miles from their designated school attendance center and high school students living more than three miles from their designated attendance center shall receive transportation to and from their attendance center at the expense of the school district.

 

Transportation of students who require special education services shall generally be provided as for other students, when appropriate.  Specialized transportation of a student to and from a special education instructional service is a function of that service and, therefore, an appropriate expenditure of special education instructional funds generated through the weighted funds or IDEA federal funds designated for special education purposes.

 

Transportation of a student to and from a special education support service is a function of that service, and shall be specified in the individualized education program (IEP) or the individualized family service plan (IFSP). When the IEP team determines that unique transportation arrangements are required and the arrangements are specified in the IEP or IFSP, the school district will provide one or more of the following transportation arrangements for instructional services and the AEA for support services:

 

Transportation from the student's residence to the location of the special education program and back to the student's residence or child care placement for students below the age of six.

Special assistance or adaptations in getting the student to and from and on and off the vehicle, enroute to and from the special education location.

Reimbursement of the actual costs of transportation when by mutual agreement the parents provide transportation for the student to and from the special education location.

The school district is not required to provide reimbursement to parents who elect to provide transportation in lieu of agency-provided transportation.

 

A student may be required, at the board's discretion, to meet a school vehicle without reimbursement up to three-fourths of a mile. The board may require the parent to transport their children up to two miles to connect with school bus vehicles at the expense of the school district when conditions deem it advisable.  It shall be within the discretion of the board to determine such conditions. Parents of students who live where transportation by bus is impracticable or unavailable may be required to furnish transportation to and from the designated attendance center at the expense of the school district. Parents who transport their children at the expense of the school district, shall be reimbursed at the current federal rate per mile as set by the IRS.

 

Transportation arrangements made with a neighboring school district shall follow the terms of the agreement.  Students who choose to attend a school in a school district other than their resident school district, shall provide transportation to and from the school at their own expense unless they are eligible for reimbursement by the school district of resident.  The district retains the authority to determine the means of transportation, either via district bus to attending district or to a bus stop in the attending district, allowing the attending district to come into the district of residence to pick up the student, or reimbursement to the parent of allowable transportation expenses.

 

Approved:          10/21/2019                   Reviewed:                     Revised:   

718 Operation of Buses During Inclement Weather

 

Buses owned and operated by the school district will not operate when weather conditions due to fog, rain, snow, ice or other natural elements make such operation unsafe. Because weather conditions may vary throughout the district and may change quickly, the best judgment will be used that is possible with the information available.

The final judgment as to when conditions are unsafe to operate will be made by the superintendent or the superintendent’s designee.

Commercial radio, television, web site and/or automated phone or notification service will be used to notify employees and students when school is cancelled or temporarily delayed.

When, in the judgment of the bus driver, weather conditions are so poor as to present a hazard when loading or unloading students, the driver will contact the superintendent or the superintendent’s designee for instructions. If contact is not possible, the driver will proceed to the next stop which does not present a hazard and make contact personally, with the assistance of a student rider, monitor or other person.

Approved:          10/21/2019                   Reviewed:                     Revised:   

719 Student Transportation for Extracurricular Activities

The board, in its discretion, may provide school district transportation for extracurricular activities including, but not limited to, transporting student participants and other students to and from extracurricular events.

 

Students participating in extracurricular events, other than those held at the school district facilities, may be transported to the extracurricular event by school district transportation vehicles or by another means approved by the superintendent. Students attending extracurricular events, other than those held at the school district facilities, may be transported to the extracurricular event by school district transportation vehicles.

Students, who are provided transportation in school district transportation vehicles for extracurricular events, shall ride both to and from the event in the school vehicle unless arrangements have been made with the activities director prior to the event. A student's parent may personally appear and request to transport the student home from a school sponsored event in which the student traveled to the event on a school district transportation vehicle.

It shall be the responsibility of the superintendent to make a recommendation to the board annually as to whether the school district shall provide the transportation authorized in this policy. In making the recommendation to the board, the superintendent shall consider the financial condition of the school district, the number of students who would qualify for such transportation, and other factors the board or superintendent deem relevant.

Approved:          10/21/2019                   Reviewed:                     Revised:   

720 Transportation of Nonresident and Nonpublic School Students

The board has sole discretion to determine the method to be utilized for transporting non- resident and non-public school students. Non-resident students paying tuition may be, and resident students attending a non-public school accredited by the State Department of Education will be transported on an established public school vehicle route as long as such transportation does not interfere with resident public students' transportation. Non-resident and non-public school students shall obtain the permission of the superintendent prior to being transported by the school district.

 

Parents of resident students who provide transportation for their children attending a non- public school accredited by the Iowa Department of Education will be reimbursed at the established state rate. This reimbursement shall be paid only if the school district receives the funds from the state. If less than the amount of funds necessary to fully reimburse parents of the non-public school students is received by the school district, the funds shall be prorated accordingly.

 

The charge to the non-resident students shall be determined based on the students' pro rata share of the actual costs for transportation. The parents of these students shall be billed for the student's share of the actual costs of transportation. The billing shall be according to the schedule developed by the superintendent. It shall be the responsibility of the superintendent to determine the amount to be charged and report it to the board secretary for billing.

Continued transportation of non-resident and non-public school students on a public school vehicle route will be subject to resident public school students' transportation needs. The superintendent shall make a recommendation annually to the board regarding the method to be used. In making a recommendation to the board, the superintendent shall consider the number of students to be transported, the capacity of the school vehicles, the financial condition of the school district, and other factors deemed relevant by the board or the superintendent.

Non-resident and non-public school students shall be subject to the same conduct regulations as resident public students as prescribed by board policy, and other policies, rules or regulations developed by the school district regarding transportation of students by the school district.

Approved:          10/21/2019                   Reviewed:                     Revised:   

721 Transportation of Non-School Groups

School district vehicles may be made available to local non-profit entities which promote cultural. educational, civic, community, or recreational activities for transporting to and from non-school- sponsored activities within the state as long as the transportation does not interfere with or disrupt the education program of the school district and does not interfere with or delay the transportation of students. The local non-profit entity must pay the cost of using the school district vehicle as per the current fee schedule. Prior to making the school district transportation vehicle available to the local non-profit entity, the school bus signs shall be covered and the flashing warning lamps and the stop arm made inoperable.

 

Any use of school district vehicles by non-school groups shall be subject to the following guidelines:

  1. Requests must be made a minimum of one week in advance. If the request interferes or conflicts with school district use of the vehicle, the request will be denied. The final decision of whether a request will be granted is within the discretion of the administration.

  2. Requests must be made by recognized youth organizations and/or groups or organizations sponsoring projects in the interest of the local community, state or national benefit or welfare.

  3. The rental period will be negotiated directly with the administration.

  4. Adult chaperones may be required to accompany the bus driver and riders.

  5. All requests will be charged bus and driver fees.

  6. Alcoholic beverages and nicotine products are prohibited on school district vehicles.

  7. Whenever damage caused by vandalism or carelessness results, the group shall reimburse the school district for cost of repairs and may be denied further use of school district vehicles.

Approved:          10/21/2019                   Reviewed:                     Revised:   

721.1 Agreement for Use of School Buses

Date of Request:     _____________________________________________                                                                                 

 

Date Bus Needed:   _____________________________________________                                                                                 

 

Bus Request:           _____________________________________________                                                                                 

 

Time Needed:          _____________________________________________                                                                                 

 

Group Requesting:  _____________________________________________                                                                                 

                                                                                  

 

The use of the buses of the school district shall be in accordance with the following rules and regulations:

  1. Requests must be made a minimum of one week in advance.

  2. Use of the buses fees shall be assessed based upon the actual state transportation report cost per mile.

  3. Driver fees shall be assessed based upon staff employees necessary and available, and at the actual driver contract cost per hour.

  4. Requests must be made a minimum of one week in advance. If the request interferes or conflicts with school district use of the vehicle, the request will be denied. The final decision of whether a request will be granted is within the discretion of the administration.

  5. Requests must be made by recognized youth organizations and/or groups or organizations sponsoring projects in the interest of the local community, state or national benefit or welfare.

  6. The rental period will be negotiated directly with the administration.

  7. Adult chaperones may be required to accompany the bus driver and riders.

  8. All requests will be charged bus and driver fees.

  9. Alcoholic beverages and nicotine products are prohibited on school district vehicles.

  10. Whenever damage caused by vandalism or carelessness results, the group shall reimburse the school district for cost of repairs and may be denied further use of school district vehicles. 

  11. The person signing this agreement shall be financially responsible for all costs accrued.

 

 

(______Total Miles Traveled X_____ Cost per Mile) + (______ Total Hours Traveled X    Hourly Cost of Driver) = ______Total Bus Charge

 

 

SIGNED BY:

 

 

_____________________________________________     _________________________                                                                      

Superintendent or Designee                                              Group Representative

 

Approved:           10/21/2019                  Reviewed:                     Revised:   

722 School Bus Safety Instruction

The school district shall conduct school bus safe riding practices instruction and emergency safety drills once a year for students who utilize school district transportation. Each school bus vehicle shall have, in addition to the regular emergency safety drill, a plan for helping those students who require special assistance to safety during an emergency. This shall include, but not be limited to, students with disabilities. School district vehicle drivers are required to attend each safety drill. Employees shall be responsible for instructing the proper techniques to be followed during an emergency, as well as safe riding practices.

 

All school personnel and designees must wear seat belts while operating private vehicles for school functions and while operating school vehicles equipped with seat belts. All school personnel must use the tire protective cage when inflating or deflating a tire used on school buses and tractors.

 

Approved:       10/21/2019                   Reviewed:                     Revised:   

723 Fiscal Management

General Fund Budget

The District shall prepare an annual 5-year general fund budget forecast that includes estimates of unspent authorized budget (spending authority), as well as restricted, assigned and unassigned fund balances available at the end of each fiscal year.  The estimates shall be prepared utilizing scenarios for likely State Supplementary Assistance (SSA) rates and enrollment projections. The projections shall include estimates of property tax rates and income surtax rates, if applicable.

 

Monthly Update

The Treasurer shall report monthly to the Board as to actual revenue and expenditures for the month and year-to-date, as compared to budgeted revenues and expenditures and compared to historical revenues and expenditures (both in dollar amounts and percentages), for each fund maintained by the district.  The Treasurer shall provide context with respect to current year variances between budgeted and historical revenues and expenditures.

 

Budget Amendments

The District shall amend the certified budget, when necessary, at the earliest practical date after receipt of knowledge indicating that the budget must be amended and prior to any statutory deadline.  Monthly budget reports shall include amended amounts at the earliest possible date after the receipt of knowledge indicating that the budgets must be amended.

 

Solvency Ratio

The District’s goal is to maintain an unassigned general fund balance that will allow the solvency ratio to fall within the 10-20% target range.  The current year’s projected balance will be discussed with the Board before establishing the succeeding years cash reserve levy and before staffing and other spending decisions are finalized.

 

Unspent Budget Authority

The Unspent Budget Authority is the remaining legal spending authority at the end of the fiscal year.  The district’s Unspent Budget Authority at June 30 shall be no less than 10 percent with target of 20 percent and a maximum of 25 percent of its general fund budget (spending) authority.  The calculation shall divide the Unspent Budget Authority by the Maximum Authorized Budget to determine the percentage. Maintaining an adequate Unspent Budget Authority provides legal authority to spend the undesignated, unreserved fund balance. A report on meeting this target will be made annually to the Board.

 

Contingency

The district shall prepare a budget that includes a contingency of at least 0.5 percent of the general fund budgeted expenditures.

 

Modified Supplemental Amount  

The district shall solicit from the School Budget Review Committee additional Modified Supplemental Amount (spending authority) where it may be available for items such as special education deficit, increasing enrollment, budget guarantee, open enrollment not on prior year count, English Language Learner, and any other lawful purposes.  The board shall be provided a resolution to approve the maximum request authorized. Any award of Modified Supplemental Amount may be levied as a cash reserve levy, in full, in the next available budget year. For recurring program deficits that are predictable and estimable, the district shall levy in advance for the immediately succeeding year as part of the general cash reserve levy if the deficit causes the estimated assigned and unassigned to fall below the minimum required. Grants of spending authority not funded by the state or other sources may ultimately be levied against property taxes. 

 

 

Approved:      10/21/2019                   Reviewed:                     Revised:   

724 Debt Management Policy

DEBT LIMITS

Credit Ratings

The school district seeks to maintain the highest possible credit ratings for all categories of short- and long-term debt that can be achieved without compromising the delivery of services and the achievement of adopted objectives.  The school district recognizes that external economic, natural, or other events may from time to time affect the creditworthiness of its debt. Nevertheless, the school district is committed to ensuring that actions within their control are prudent.

Debt Limits

For general obligation debt, the school district’s outstanding debt limit shall be no more than five percent (5%) of the actual value of property within the school district’s boundaries, as prescribed in the Iowa constitution and statutory restrictions.

For revenue debt, the school district’s goal is to provide adequate debt service coverage of at least 1.20 times the annual debt service costs.

In accordance with Iowa law, the school district may not act as a conduit issuer or issue municipal securities to raise capital for revenue-generating projects where the funds generated are used by a third party (“conduit borrower”) to make payments to investors.

PURPOSES AND USES OF DEBT 

Capital Planning

To enhance creditworthiness and prudent financial management, the school district is committed to systematic capital planning, intergovernmental cooperation and coordination and long-term financial planning.

Capital Financing

The school district may issue long-term debt for capital projects as authorized by Iowa law, which include, but are not limited to, the costs of planning, design, land acquisition, buildings, permanent structures, attached fixtures or equipment, and movable pieces of equipment. Capitalized interest may be included in sizing any capital project debt issue.  The types of debt instruments to be used by the school district include:

  • General Obligation Bonds

  • General Obligation Capital Loan Notes

  • Bond Anticipation Notes

  • Revenue Anticipation Notes

  • School Infrastructure Sales, Services and Use Tax Revenue Bonds

  • Lease Purchase Agreements, including Certificates of Participation

Working Capital Financing

The school district may issue debt for working capital for operations after cash flow analysis has determined that there is a mismatch between available cash and cash outflows.  The school district shall strive to repay working capital debt by the end of the fiscal year in which the debt was incurred.  A Working Capital Reserve may be included in sizing any working capital debt issue.

Refundings

Periodic reviews of all outstanding debt will be undertaken to determine if refunding opportunities exist. Refunding will be considered (within federal tax law restraints) if and when there is a net economic benefit of the refunding or if the refunding is otherwise in the best interests of the school district, such as to release restrictive bond covenants which affect the operations and management of the school district.

In general, advance refundings for economic savings will be undertaken when a net present value savings exceeds three percent of the refunded debt can be achieved.  Current refundings, which produce a new present value savings of less than three percent will be considered on a case by case basis taking into consideration bond covenants and general conditions.  Refundings with negative savings will not be considered unless there is a compelling public policy objective for doing so.

DEBT STANDARDS AND STRUCTURE

Length of Debt

Debt will be structured for the shortest period consistent with a fair allocation of costs to current and future beneficiaries or users.  Long-term debt will not be issued for periods exceeding the useful life or average useful lives of the project or projects to be financed.  All debt issued will adhere to state and federal law regarding the length of time the debt may be outstanding.

Debt Structure

Debt will be structured to achieve the lowest possible net cost to the school district given market conditions, the urgency of the capital project, the type of debt being issued, and the nature and type of repayment source.  To the extent possible, the school district will design the repayment of its overall debt to rapidly recapture its credit capacity for future use.

Generally, the school district will only issue fixed-rate debt.  In very limited circumstances, the school district may issue variable rate debt, consistent with the limitations of Iowa law and upon a finding of the board that the use of fixed rate debt is not in the best interest of the school district and a statement of the reasons for the use of variable rate debt

All debt may be structured using discount, par or premium coupons, and as serial or term bonds or notes, or any combination thereof, consistent with Iowa law.  The school district should utilize the coupon structure that produces the lowest True Interest Cost (TIC) taking into consideration the call option value of any callable maturities.

The school district will strive to structure their debt in sinking fund installments for each debt issue that achieves, as nearly as practicable, level debt service within an issue or overall debt service within a particular classification of debt.

Derivatives (including, but not limited to, interest rate swaps, caps, collars, corridors, ceiling and floor agreements, forward agreements, float agreements, or other similar financing arrangements), zero-coupon or capital appreciation bonds are not allowed to be issued consistent with State law.

Decision Analysis to Issue Debt

Whenever the school district is contemplating the issuance of debt, information will be developed concerning the following four categories commonly used by rating agencies assessing the school district’s credit worthiness, listed below.

Debt Analysis – Debt capacity analysis; purpose for which debt is proposed to be issued; debt structure; debt burden; debt history and trends; and adequacy of debt and capital planning.

Financial Analysis – Stability, diversity, and growth rates of tax or other revenue sources; trend in assessed valuation and collections; current budget trends; appraisal of past revenue and expenditure trends; history and long-term trends of revenues and expenditures; evidences of financial planning; adherence to GAAP; audit results; fund balance status and trends in operating and debt funds; financial monitoring systems and capabilities; and cash flow projections.

Governmental and Administrative Analysis – Government organization structure; location of financial responsibilities and degree of control; adequacy of basic service provision; intergovernmental cooperation/conflict and extent of duplication; and overall planning efforts.

Economic Analysis – Geographic and location advantages; population and demographic characteristics; wealth indicators; types of employment, industry and occupation; housing characteristics; new construction; evidences of industrial decline; and trend of the economy.

DEBT ISSUANCE 

Credit Enhancement

Credit enhancements (.i.e., bond insurance, etc.) may be used but only when the net debt service on the debt is reduced by more than the costs of the credit enhancement.

Costs and Fees

All costs and fees related to issuing the debt will be paid out of debt proceeds and allocated across all projects receiving proceeds of the debt issue.

Method of Sale

Generally, all school district debt will be sold through a competitive bidding process.  Bids will be awarded on a TIC basis providing other bidding requirements are satisfied.

The school district may sell debt using a negotiated process in extraordinary circumstances when the complexity of the issue requires specialized expertise, when the negotiated sale would result in substantial savings in time or money, or when market conditions of school district credit are unusually volatile or uncertain.

Professional Service Providers

The school district will retain external bond counsel for all debt issues.  All debt issued by the school district will include a written opinion by bond counsel affirming that the school district is authorized to issue the debt, stating that the school district has met all Iowa constitutional and statutory requirements necessary for issuance and determining the debt’s federal income tax status.  The bond counsel retained must have comprehensive municipal debt experience and a thorough understanding of Iowa law as it relates to the issuance of the particular debt.

The school district will retain an independent financial advisor.  The financial advisor will be responsible for structuring and preparing all offering documents for each debt issue.  The financial advisor retained will have comprehensive municipal debt experience, experience with diverse financial structuring and pricing of municipal securities.

The treasurer shall have the authority to periodically select other service providers (e.g., escrow agents, verification agents, trustees, arbitrage consultants, rebate specialist, etc.) as necessary to meet legal requirements and minimize net debt costs.  These services can include debt restructuring services and security or escrow purchases.

Compensation for bond counsel, financial advisor and other service providers will be as economical as possible and consistent with industry standards for the desired qualification levels.

DEBT MANAGEMENT

Investment of Debt Proceeds

The school district shall invest all proceeds received from the issuance of debt separate from the school district’s consolidated cash pool unless otherwise specified by the authorizing bond resolution or trust indenture.  Investments will be consistent with those authorized by Iowa law and the school district’s Investment Policy to maintain safety of principal and liquidity of the funds.

Arbitrage and Record Keeping Compliance

The treasurer shall maintain a system of record keeping reporting and compliance procedures with respect to all federal tax requirements which are currently, or may become applicable through the lifetime of all tax-exempt or tax credit bonds.

Federal tax compliance, record-keeping reporting and compliance procedures shall include not shall not be limited to: 

1)     post-issuance compliance procedures (including proper use of proceeds, timely expenditure of proceeds, proper use of bond financed property, yield restriction and rebate, and timely return filing);

2)     proper maintenance of records to support federal tax compliance;

3)     investments and arbitrage compliance; 

4)     expenditures and assets; 

5)     private business use; and

6)     designation of primary responsibilities for federal tax compliance of all bond financings.

Financial Disclosure

The school district is committed to full and complete financial disclosure, and to cooperating fully with rating agencies, institutional and individual investors, other levels of government, and the general public to share comprehensible and accurate financial information.  The school district is dedicated to meeting secondary disclosure requirements on a timely and comprehensive basis, as promulgated by the Securities and Exchange Commission.

The Official Statements accompanying debt issues, Annual Audits, and Continuing Disclosure statements will meet the standards articulated  by the Municipal Securities Rulemaking Board (MSRB), the Government Accounting Standards Board (GASB), the Securities and Exchange Commission (SEC), Generally Accepted Accounting Principles (GAAP) and the Internal Revenue Service (IRS).  The treasurer shall be responsible for ongoing debt disclosure as required by any Continuing Disclosure Certificate for any debt issue and for maintain compliance with disclosure standards promulgated by state and federal regulatory bodies.

 

Approved:      5/11/2020                   Reviewed:                     Revised:   

725 Post-Issuance Compliance Regulations for Tax-Exempt Obligations

1.    Role of Compliance Coordinator/Board Treasurer

The board treasurer shall:  

a)     Be responsible for monitoring post-issuance compliance;

b)     Maintain a copy of the transcript of proceedings or minutes in connection with the issuance of any tax-exempt obligations and obtain records that are necessary to meet the requirements of this regulation;

c)     Consult with bond counsel, a rebate consultant, financial advisor, IRS publications and such other resources as are necessary to understand and meet the requirements of this regulation;

d)     Seek out training and education to be implemented upon the occurrence of new developments in the area and upon the hiring of new personnel to implement this regulation.

 

2.      Financing Transcripts’ Filing and Retention 

    The board treasurer shall confirm the proper filing of an IRS 8038 Series return and maintain a transcript of proceedings and minutes for all tax-exempt obligations issued by the school district including but not limited to all tax-exempt bonds, notes and lease-purchase contracts. Each transcript shall be maintained until 11 years after the tax-exempt obligation documents have been retired. The transcript shall include, at a minimum:

a)     Form 8038;

b)     Minutes, resolutions, and certificates;

c)     Certifications of issue price from the underwriter;

d)     Formal elections required by the IRS;

e)     Trustee statements;

f)     Records of refunded bonds, if applicable;

g)     Correspondence relating to bond financings; and

h)     Reports of any IRS examinations for bond financings.

 

3.  Proper Use of Proceeds 

    The board treasurer shall review the resolution authorizing issuance for each tax-exempt obligation issued by the school district, and the school district shall:

a)     Obtain a computation of the yield on such issue from the school district's financial advisor;

b)       Create a separate Project Fund (with as many sub-funds as shall be necessary to allocate proceeds among the projects being funded by the issue) into which the proceeds of issue shall be deposited;

c)     Review all requisitions, draw schedules, draw requests, invoices and bills requesting payment from the Project Fund;

d)     Determine whether payment from the Project Fund is appropriate and, if so, make payment from the Project Fund (and appropriate sub-fund if applicable);

e)     Maintain records of the payment requests and corresponding records showing payment;

f)     Maintain records showing the earnings on, and investment of, the Project Fund;

g)     Ensure that all investments acquired with proceeds are purchased at fair market value; 

h)     Identify bond proceeds or applicable debt service allocations that must be invested with a yield-restriction and monitor the investments of any yield-restricted funds to ensure that the yield on such investments do not exceed the yield to which such investments are restricted;

i)     Maintain records related to any investment contracts, credit enhancement transactions, and the bidding of financial products related to the proceeds.

 

4.      Timely Expenditure and Arbitrage/Rebate Compliance

    The board treasurer shall review the Tax-Exemption Certificate (or equivalent) for each tax-exempt obligation issued by the school district and the expenditure records provided in Section 2 of this regulation, above, and shall:

a)     Monitor and ensure that proceeds of each such issue are spent within the temporary period set forth in such certificate;

b)     Monitor and ensure that the proceeds are spent in accordance with one or more of the applicable exceptions to rebate as set forth in such certificate if the school district does not meet the "small  issuer" exception for said obligation;

c)     Not less than 60 days prior to a required expenditure date confer with bond counsel and a rebate consultant if the school district will fail to meet the applicable temporary period or rebate exception expenditure requirements of the Tax-Exemption Certificate.  In the event the school district fails to meet a temporary period or rebate exception:

1.    Procure a timely computation of any rebate liability and, if rebate is due, file a Form 8038-T and arrange for payment of such rebate liability;

2.     Arrange for timely computation and payment of yield reduction payments  (as such term is defined in the Code and Treasury Regulations), if applicable.

 

5.      Proper Use of Bond Financed Assets

    The board treasurer shall:

a)     Maintain appropriate records and a list of all bond financed assets.  Such records shall include the actual amount of proceeds (including investment earnings) spent on each of the bond financed assets;

b)     Monitor and confer with bond counsel with respect to all proposed bond financed assets;

i.     management  contracts;

ii.   service agreements;

iii.     research contracts;

iv.     naming rights;

v.    contracts;

vi.     leases or sub-leases;

vii. joint venture, limited liability or partnership arrangements; 

vi.     sale of property; or

ix.     any other change in use of such asset.

c)     Maintain a copy of the proposed agreement, contract, lease or arrangement, together with the response by bond counsel with respect to said proposal for at least three years after retirement of all tax-exempt obligations issued to fund all or any portion of bond financed assets; and

d)     Shall contact bond counsel and ensure timely remedial action under IRS Regulation Sections 1.141-12 in the event the school district takes an action with respect to a bond financed asset, which causes the private business tests or private loan financing test to be met.

 

6.      General Project Records   

    For each project financed with tax-exempt obligations, the board treasurer shall maintain, until three years after retirement of the tax-exempt obligations or obligations issued to refund those obligations, the following:

a)     Appraisals, demand surveys or feasibility studies (if required);

b)     Applications, approvals and other documentation of grants (where applicable);

c)     Depreciation schedules;

d)     Contracts respecting the project.

 

7.     Advance Refundings

    The board treasurer shall be responsible for the following current, post issuance and record retention procedures with respect to advance refunding bonds.  The board treasurer shall:

a)     Identify and select bonds to be advance refunded with advice from internal financial personnel, and a financial advisor;

b)     Identify, with advice from the financial advisor and bond counsel, any possible federal tax compliance issues prior to structuring any advance refunding;

c)     Review the structure with the input of the financial advisor and bond counsel, of advance refunding issues prior to the issuance to ensure (i) that the proposed refunding is permitted pursuant to applicable federal tax requirements if there has been a prior refunding of the original bond issue; (ii) that the proposed issuance complies with federal income tax requirements which might impose restrictions on the redemption date of the refunded bonds; (iii) that the proposed issuance complies with federal income tax requirements which allow for the proceeds and replacement proceeds of an issue to be invested temporarily in higher yielding investments without causing the advance refunding bonds to become "arbitrage bonds"; and (iv) that the proposed issuance will not result in the issuer's exploitation of the difference between tax exempt and taxable interest rates to obtain a financial advantage nor overburden the tax exempt market in a way that might be considered an abusive transaction for federal tax purposes;

d)     Collect and review data related to arbitrage yield restriction and rebate requirements for advance refunding bonds. To ensure such compliance, the board treasurer shall engage a rebate consultant to prepare a verification report in connection with the advance refunding issuance. Said report shall ensure said requirements are satisfied;

e)     Whenever possible, purchase State and Local Government Series (SLGS) to size each advance refunding escrow. The financial advisor shall be included in the process of subscribing SLGS. To the extent SLGS are not available for purchase, the Board treasurer shall, in consultation with bond counsel and the financial advisor, comply with IRS regulations;

f)     Ensure, after input from bond counsel, compliance with any bidding requirements set forth by the IRS regulations to the extent as issuer elects to the purchase a guaranteed investment contract;

g)     In determining the issue price for any advance refunding issuance, obtain and retain issue price certification by the purchasing underwriter at closing;

h)     After the issuance of an advance refunding issue, ensure timely identification of violations of any federal tax requirements and engage bond counsel in an attempt to remediate the same in accordance with IRS regulations.

 

8.     Bond Disclosure Policy

        Section 1.01.  Disclosure Coordinator.  By adoption of this Policy, the District hereby             appoints the Treasurer to act as the Disclosure Coordinator hereunder.

        Section 1.02.  Responsibilities.  The Disclosure Coordinator is responsible for the following tasks:

 (A)         reviewing and approving all preliminary and final official statements relating to the District’s Securities, together with any supplements, for which a Disclosure Agreement is required (each, an "Official Statement"), before such documents are released, in accordance with Article III below;

 (B)          moderating Board of Directors’ approval of all Financial Obligations triggering a Listed Event Notice under any new Disclosure Agreement entered into after February 27, 2019;

 (C)      reviewing the District’s status and compliance with Disclosure Agreements, including filings of disclosure documents thereunder and in compliance with this Policy, in accordance with Articles IV and V below;

 (D)      serving as a "point person" for personnel to communicate issues or information that should be or may need to be included in any disclosure document;

 (E)      recommending changes to this Policy to the Board of Directors as necessary or appropriate;

 (F)       communicating with third parties, including coordination with outside consultants assisting the District, in the preparation and dissemination of disclosure documents to make sure that assigned tasks have been completed on a timely basis and make sure that the filings are made on a timely basis and are accurate;

 (G)      in anticipation of preparing disclosure documents, soliciting "material" information (as defined for purposes of federal securities law) from Employees identified as having knowledge of or likely to have information of Listed Events under Article IV or relevant to Disclosure Agreements;

 (H)      maintaining records documenting the District's compliance with this Policy; and

 (I)        ensuring compliance with training procedures as described below.

 The responsibilities of the Disclosure Coordinator to make certain filings with the MSRB under Articles III (Annual Report Filings) and IV (Listed Event Filings) may be delegated by contract to a dissemination agent, under terms approved by the Board of Directors.

 The Disclosure Coordinator shall instruct Employees of the obligation to communicate with the Disclosure Coordinator on any information relating to financial obligations or amendments to existing financial obligations promptly following occurrence.

  

Article II

Official Statements

Section 2.01.  Review and Approval of Official Statements.  Whenever the District issues Securities, an Official Statement may be prepared.  Each of these Official Statements contains information relating to the District’s finances.  The Disclosure Coordinator (with advice from Bond Counsel, any retained Disclosure Counsel, and/or Financial Advisor) shall have primary responsibility for ensuring that all such information is accurate and not misleading in any material aspect.  The Official Statement may also include a certification that the information contained in the Official Statement regarding the District, as of the date of each Official Statement, does not contain any untrue statement of material fact or omit to state any material fact necessary to make the information contained in the Official Statement, in light of the circumstances under which it was provided, not misleading.  When undertaking review of a final or preliminary Official Statement, the Disclosure Coordinator shall: 

(A)      review the Official Statement to ensure: (i) that there are no material misstatements or omissions of material information in any sections, (ii) that the information relating to the District that is included in the Official Statement is accurate, and (iii) that when necessary the information relating to the District has been reviewed by a knowledgeable Employee or other appropriate person; 

 (B)      draft, or cause to be drafted, for the Official Statement descriptions of (i) any material current, pending or threatened litigation, (ii) any material settlements or court orders and (iii) any other legal issues that are material information for purposes of the Official Statement; and

 (C)      report any significant disclosure issues and concerns to the Board of Directors (with advice, as necessary, from Bond Counsel, retained Disclosure Counsel, if any, and/or Financial Advisor).

Section 2.02.  Submission of Official Statements to Board of Directors for Approval.  The Disclosure Coordinator shall submit all Official Statements to the Board of Directors for review and approval.  The Board of Directors shall undertake such review it deems necessary.  This may include consultation with the Disclosure Coordinator, Bond Counsel, retained Disclosure Counsel, if any, and/or the Financial Advisor to fulfill the District's responsibilities under applicable federal and state securities laws.

 

Article III

Annual Report Filings

Section 3.01.  Overview.  Under the Disclosure Agreements the District has entered into in connection with certain of its Securities, the District is required each year to file Annual Reports with the EMMA system.  Such Annual Reports are generally required to include: (1) certain updated financial and operating information as outlined in each Disclosure Agreement, and (2) the District’s audited financial statements.  The documents, reports and notices required to be submitted to the MSRB pursuant to this Policy shall be submitted through EMMA in one or more electronic document format files as required by the Rule at the time of filing, and shall be accompanied by identifying information, in the manner prescribed by the MSRB, or in such other manner as is consistent with the Rule.  To facilitate the District’s Disclosure Agreements the Disclosure Coordinator shall: 

(A)      maintain a record of all Disclosure Agreements of the District using a chart which shall identify and docket all deadlines; 

 (B)      schedule email reminders on the EMMA website for each issue of Securities to help ensure timely filing of financial disclosures;

 (C)      ensure that preparation of the Annual Reports commences as required under each specific Disclosure Agreement; and

 (D)      comply with the District’s obligation to file Annual Reports by submitting or causing the required (i) annual financial information and operating data and (ii) audited financial statements to be submitted to the MSRB through EMMA.  

(i)        In the event audited financial statements are not available by the filing deadline imposed by the Disclosure Agreement, the Disclosure Coordinator shall instead timely submit or cause to be submitted unaudited financial statements, with a notice to the effect that the unaudited financial statements are being provided pending the completion of audited financial statements and that the audited financial statements will be submitted to EMMA when they have been prepared.  In the event neither audited nor unaudited financial statements are timely posted, the District shall cause to be filed a "failure to file notice" in accordance with the Rule.  The failure to file notice for audited financial statements shall include information describing the nature and/or cause of the failure to meet the contractual deadline and, if available, an approximate timeframe for when the completed audited financial statement is expected to be submitted. Audited financial statements shall be filed as soon as available. If updated financial and operating information is not posted by the filing deadline, the Disclosure Coordinator shall cause a "failure to file notice" to be posted to EMMA in accordance with the Rule. 

(ii)       All documents submitted to the MSRB through EMMA that are identified by specific reference to documents already available to the public on the MSRB's Internet website or filed with the SEC shall be clearly identified by cross reference.

 
 

Article IV

Listed Event Filings

 Section 4.01.  Disclosure of Listed Events.  The District is obligated to disclose to the MSRB notice of certain specified events with respect to the Securities (a "Listed Event").  Employees shall be instructed to notify the Disclosure Coordinator upon becoming aware of any of the Listed Events in the District’s Disclosure Agreements.  The Disclosure Coordinator may consult with Bond Counsel, retained Disclosure Counsel, if any, or the Financial Advisor, to determine if an occurrence is a Listed Event, and whether a filing is required or is otherwise desirable.  If such a filing is deemed necessary, the Disclosure Coordinator shall cause a notice of the Listed Event (a "Listed Event Notice") that complies with the Rule to be prepared, and the Disclosure Coordinator shall cause to be filed the Listed Event Notice as required by the Rule as follows: 

(A)         Prior to issuance of new Securities after February 27, 2019, a complete list of current Financial Obligations shall be compiled and submitted to the Disclosure Coordinator for continuous monitoring regarding compliance with all Disclosure Agreements entered on or after February 27, 2019. 

(B)          The Disclosure Coordinator shall:

(i)            monitor and periodically review the Listed Events identified on Exhibit A, in connection with the Disclosure Agreements identified on the chart in Exhibit B to determine whether any event has occurred that may require a filing with EMMA. To the extent Disclosure Coordinator determines notice for an event is not required based on the event not achieving a level of materiality, Disclosure Coordinator shall document the basis for the determination.  

(ii)          In a timely manner, not in excess of ten (10) business days after the occurrence of the Listed Event, file a Listed Event Notice for Securities to which the Listed Event applies.

 (C)          For Securities to which the Listed Event or Events are applicable, the Listed Event Notice shall be filed in a timely manner not in excess of ten (10) business days after the occurrence of the Listed Event.

 (D)         The Disclosure Coordinator shall monitor Securities data on EMMA regarding rating agency reports for rated Securities and may subscribe to any available ratings agency alert service regarding the ratings of any Securities.

 

Article V

Miscellaneous

Section 5.01.  Documents to be Retained.  The Disclosure Coordinator shall be responsible for retaining records demonstrating compliance with this Policy.  The Disclosure Coordinator shall retain an electronic or paper file ("Transcript") for each Annual Report the District completes.  Each Transcript shall include final versions of documents submitted to the MSRB through EMMA, and any documentation related to determinations of materiality (or immateriality) of Listed Events.  The Transcript shall be maintained for the period that the applicable Securities are outstanding, and for a minimum of five [5] years after the date the final Annual Report for an issue of Securities is posted on EMMA.

 

Section 5.02.  Education and Training.  The District shall conduct periodic training to assist the Disclosure Coordinator, Employees and the Supervisors, as necessary and appropriate, in understanding and performing their responsibilities under this Policy.  Such training sessions may include a review of this Policy, the disclosure obligations under the Disclosure Agreement(s), applicable federal and state securities laws, including the Listed Events in Exhibit A, and the disclosure responsibilities and potential liabilities of members of District staff and members of the Board of Directors.  Training sessions may include meetings with Bond Counsel, retained Disclosure Counsel, if any, Dissemination Agent, if any, or Financial Advisor, and teleconferences, attendance at seminars or conferences where disclosure responsibilities are discussed, and/or recorded presentations. Disclosure Coordinator shall maintain a record of training activities in furtherance of this Policy. 

 

Section 5.03.  Public Statements Regarding Financial Information.  Whenever the District makes statements or releases information relating to its finances to the public that is reasonably expected to reach investors and the trading markets (including, without limitation, all Listed Event Notices, statements in the annual financial reports, and other financial reports and statements of the District), the District is obligated to ensure that such statements and information are accurate and complete in all material aspects.  The Disclosure Coordinator shall assist the Board of Directors, the Superintendent, and District’s Attorneys in ensuring that such statements and information are accurate and not misleading in any material aspect.  Employees shall, to the extent possible, coordinate statements or releases as outlined above with the Disclosure Coordinator.  Investment information published on the District’s website shall include a cautionary statement referring investors to EMMA as the official repository for the District’s Securities-related data.

 

EXHIBIT A

LISTED EVENTS

The following events automatically trigger a requirement to file on EMMA within ten (10) business days of their occurrence (listed events are subject to change by the SEC):

 (1) Principal and interest payment delinquencies;

 (2) Non-payment related defaults, if material;

 (3) Unscheduled draws on debt service reserves reflecting financial difficulties;

 (4) Unscheduled draws on credit enhancements reflecting financial difficulties;

 (5) Substitution of credit or liquidity providers, or their failure to perform;

 (6) Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the security, or other material events affecting the tax status of the security;

 (7) Modifications to rights of security holders, if material;

 (8) Bond calls, if material, and tender offers;

 (9) Defeasances;

 (10) Release, substitution, or sale of property securing repayment of the securities, if material;

 (11) Rating changes;

 (12) Bankruptcy, insolvency, receivership or similar event of the obligated person[1];

Note to paragraph (b)(5)(i)(C)(12):

For the purposes of the event identified in paragraph (b)(5)(i)(C)(12) of this section, the event is considered to occur when any of the following occur: The appointment of a receiver, fiscal agent or similar officer for an obligated person in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the obligated person, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the obligated person.

 (13) The consummation of a merger, consolidation, or acquisition involving an obligated person or the sale of all or substantially all of the assets of the obligated person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material;

 (14) Appointment of a successor or additional Director or the change of name of a Director, if material;

 Additionally, the following events apply to Disclosure Agreements entered by the District on or after February 27, 2019:

 (15) Incurrence of a Financial Obligation of the obligated person, if material[2], or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a Financial Obligation of the obligated person, any of which affect security holders, if material*; and

(16) Default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a Financial Obligation of the obligated person, any of which reflect financial difficulties. 

Suggested Practices in Submitting Annual Financial Information to EMMA*

Annual Financial Information is to be submitted to EMMA as follows:

·       through the EMMA Dataport;

 ·       in one or more electronic word-searchable portable document format files configured to permit documents to be saved, viewed, printed and retransmitted by electronic means (“properly formatted pdf file”); and

·       indexed by the submitter as “Annual Financial Information and Operating Data” – this EMMA indexing category should be used for all submissions consisting of one or both parts of an annual financial information submission. A submission should be indexed in EMMA by the submitter as “Annual Financial Information and Operating Data” if it consists of complete annual financial information (including audited financial statements and/or the CAFR).

If the audited financial statements have not been prepared in time to meet the deadline:

·       file unaudited financial statements with a notice to the effect that the unaudited financial statements are being provided pending completion of audited financial statements and that the audited financial statements will be submitted to EMMA when they have been prepared.

If annual financial information is provided by reference to other submitted documents file:

·       a notice that includes specific reference to a document available on the EMMA website or the SEC (such as, but not limited to, an official statement), to the extent that such document in fact includes the information required to be include in the annual financial information; and

·       the submitter should confirm that such document in fact is available from the EMMA website or the SEC and should include in such notice (A) a textual description of the document that includes the required information, with sufficient detail for a reasonable person to determine the precise document being referenced, and (B) an active hyperlink to the pdf file of such document as then posted on the EMMA website or to the SEC’s EDGAR system; further, if such document includes audited financial statements, the submitter should also index such submission as “Audited Financial Statements or CAFR” in addition to (but not instead of) “Annual Financial Information and Operating Data” unless the submitter submits such audited financial statements separately to EMMA.

Failure to file notices are to be submitted to EMMA as follows:

·       through the EMMA Dataport;

·       as an electronic word-searchable and properly formatted pdf file; and

·       indexed by the submitter as “Failure to Provide Annual Financial Information.”

* Procedures subject to change.

[1] The term "obligated person" for purposes of the Rule shall mean the party, if other than the District, responsible for the Securities, e.g. in a conduit issue sold through the District, the conduit party would be the "obligated person" under the Disclosure Agreement.

[2] Materiality is determined upon the incurrence of each distinct Financial Obligation, taking into account all relevant facts and circumstances.  A Financial Obligation is considered to be incurred when it is enforceable against the District.  Listed Event Notices for Financial Obligations (e.g. under 15 and 16 above) should generally include a description of the material terms of the Financial Obligation, including: (i) date of the incurrence, (ii) principal amount, (iii) maturity and amortization; (iv) interest rate(s), if fixed, or method of computation, if variable, (v) other appropriate terms, based on the circumstances.  In addition to a summary of material terms, the District may alternatively, or in addition, submit related materials, such as transaction documents (which may require some redaction), terms sheets prepared in connection with the Financial Obligation, or continuing covenant agreements or financial covenant reports.

 

 

        Legal Reference:    Iowa Code §§ 257.31(4); 279.8; 297.22-.25; 298A (2011)                http://www.irs.gov/taxexemptbond/article/0,,id=243503,00.html

 

 

Approved:  5/11/2020        Reviewed:          Revised:  

 

726 Internal Controls and Procedures

The Board expects all board members, employees, volunteers, consultants, vendors, contractors, students, and other parties maintaining any relationship with the school district to act with integrity, due diligence, and in accordance with all laws in their duties involving the school district’s resources.  The Board is entrusted with public dollars and no one connected with the school district should do anything to erode that trust.

Internal control is the responsibility of all employees of the school district.  The superintendent, business manager, and board secretary shall be responsible for developing internal controls designed to prevent and detect fraud, financial impropriety, or fiscal irregularities within the school district subject to review and approval by the Board.  Administrators shall be alert for an indication of fraud, financial impropriety, or irregularity within the administrator’s area of responsibility.

Any employee who suspects fraud, impropriety, or irregularity shall report their suspicions immediately to his/her immediate supervisor, and/or the superintendent.  The superintendent shall have primary responsibility for any necessary investigations and shall coordinate investigative efforts with the Board’s legal counsel, auditing firm, and other internal or external departments and agencies, including law enforcement officials, as the superintendent may deem appropriate.

Employees bringing forth a legitimate concern about a potential impropriety will not be retaliated against and those who do retaliate against such an employee will be subject to disciplinary action up to, and including, discharge.

In the event the concern or complaint involves the superintendent, the concern shall be brought to the attention of the board vice-president, who shall be empowered to contact the Board’s legal counsel, insurance agent, auditing firm, and any other agency to investigate the concern or complaint.

Upon approval of the Board, the superintendent may contact the State Auditor or elect to employ the school district’s auditing firm or State Auditor to conduct a complete or partial forensic/internal control/SAS99 audit annually or otherwise as often as deemed necessary.  The superintendent is authorized to order a complete forensic audit if, in the superintendent’s judgment, such an audit would be useful and beneficial to the school district.  The superintendent shall ensure the State Auditor is notified of any suspected embezzlement or theft pursuant to Iowa law.  In the event there is an investigation, records will be maintained for use in the investigation.  Individuals found to have altered or destroyed records will be subject to disciplinary action up to, and including, termination of employment.

Fraud, financial improprieties, or irregularities include, but are not limited to:

  • Forgery or unauthorized alteration of any document or account belonging to the district.

  • Forgery or unauthorized alteration of a check, bank draft, or any other financial document.

  • Misappropriation of funds, securities, supplies, or other assets.

  • Impropriety in the handling of money or reporting of financial transactions.

  • Profiteering because of “insider” information of district information or activities.

  • Disclosing confidential and/or proprietary information to outside parties.

  • Accepting or seeking anything of material value, other than items used in the normal course of advertising, from contractors, vendors, or persons providing services to the district.

  • Destroying, removing, or inappropriately using district records, furniture, fixtures, or equipment.

  • Failing to provide financial records to authorized state or local entities.

  • Failure to cooperate fully with any financial auditors, investigators, or law enforcement.

  • Any other dishonest or fraudulent act involving district monies or resources.

The superintendent shall investigate reports of fraudulent activity in a manner that protects the confidentiality of the parties and the facts.  All employees involved in the investigation shall be advised to keep information abut the investigation confidential.

If an investigation substantiates the occurrence of a fraudulent activity, the superintendent, or board vice-president if the investigation centers on the superintendent, shall issue a report to the Board and appropriate personnel.  The final disposition of the matter and any decision to file or not file a criminal complaint or to refer the matter to the appropriate law enforcement and/or regulatory agency for independent investigation shall be made in consultation with district legal counsel.  The results of the investigation shall not be disclosed to or discussed with anyone other than those individuals with a legitimate right to know until the results are made public.

Fraud, financial improprieties, or irregularities include, but are not limited to:

  • Forgery or unauthorized alteration of any document or account belonging to the district.

  • Forgery or unauthorized alteration of a check, bank draft, or any other financial document.

  • Misappropriation of funds, securities, supplies, or other assets.

  • Impropriety in the handling of money or reporting of financial transactions.

  • Profiteering because of “insider” information of district information or activities.

  • Disclosing confidential and/or proprietary information to outside parties.

  • Accepting or seeking anything of material value, other than items used in the normal course of advertising, from contractors, vendors, or persons providing services to the district.

  • Destroying, removing, or inappropriately using district records, furniture, fixtures, or equipment.

  • Failing to provide financial records to authorized state or local entities.

  • Failure to cooperate fully with any financial auditors, investigators or law enforcement.

  • Any other dishonest or fraudulent act involving district monies or resources.

The superintendent, shall investigate reports of fraudulent activity in a manner that protects the confidentiality of the parties and the facts.  All employees involved in the investigation shall be advised to keep information about the investigation confidential.

If an investigation substantiates the occurrence of a fraudulent activity, the superintendent, or board vice-president if the investigation centers on the superintendent, shall issue a report to the board and appropriate personnel.  The final disposition of the matter and any decision to file or not file a criminal complaint or to refer the matter to the appropriate law enforcement and/or regulatory agency for independent investigation shall be made in consultation with district legal counsel.  The results of the investigation shall not be disclosed to or discussed with anyone other than those individuals with a legitimate right to know until the results are made public.

 

Approved:   5/11/2020              Reviewed:           Revised:  

 

727 Capital Assets

The school district will establish and maintain a capital assets management system for reporting capitalized assets owned or under the jurisdiction of the school district in its financial reports in accordance with generally accepted accounting principles (GAAP) as required or modified by law; to improve the school district's oversight of capital assets by assigning and recording them to specific facilities and programs and to provide for proof of loss of capital assets for insurance purposes. 

Capital assets, including tangible and intangible assets, are reported in the government-wide financial statements (i.e. governmental activities and business type activities) and the proprietary fund financial statements.  Capital assets reported include school district buildings and sites, construction in progress, improvements other than buildings and sites, land and machinery and equipment. Capital assets reported in the financial reports will include individual capital assets with an historical cost equal to or greater than $2,000. The Federal regulations governing school lunch programs require capital assets attributable to the school lunch program with a historical cost of equal to or greater than $500 be capitalized.  Additionally, capital assets are depreciated over the useful life of each capital asset.  

All intangible assets with a purchase price equal to or greater than $50,000 with useful life of two or more years, are included in the intangible asset inventory for capitalization purposes. Such assets are recorded at actual historical cost and amortized over the designated useful lifetime applying a straight-line method of depreciation. If there are no legal, contractual, regulatory, technological or other factors that limit the useful life of the asset, then the intangible asset needs to be considered to have an indefinite useful life and no amortization should be recorded.

Phase III districts, as determined under GASB 34, will not retroactively report intangible assets. If actual historical cost cannot be determined for intangible assets due to lack of sufficient records, estimated historical cost will be used.

This policy applies to all intangible assets.  If an intangible asset that meets the threshold criteria is fully amortized, the asset must be reported at the historical cost and the applicable accumulated amortization must also be reported. It is not appropriate to “net” the capital asset and amortization to avoid reporting.  For internally generated intangible assets, outlays incurred by the government's personnel, or by a third-party contractor on behalf of the government, and for development of internally generated intangible assets should be capitalized.

The capital assets management system must be updated monthly to account for the addition/acquisition, disposal, relocation/transfer of capital assets. It is the responsibility of the superintendent to count and reconcile the capital assets with capital assets management system on June 30 each year.

It is the responsibility of the superintendent to develop administrative regulations implementing this policy. It will also be the responsibility of the superintendent to educate employees about this policy and its supporting administrative regulations.   

 

NOTE:  It is suggested the board consider a capitalization threshold consistent with the GASB 34 Committee Recommendations which recommended "districts and AEAs implement capitalization levels that would capture at least 80% of the value of assets.  However, the threshold should not be greater than $5,000."   In addition, Boards may wish to establish guidelines at lower thresholds for keeping track of capital assets for internal control and insurance purposes.

In determining the capital asset capitalization threshold, the size of the school district, the property insurance deductible and the time and effort necessary to account for and track capital assets with a lesser value should be considered.  It is strongly recommended the board consult with the school auditor prior to setting the capitalization threshold.  

An intangible asset should be recognized in the statement of net assets only if it is identifiable which means the asset is either separable or, arose from contractual or other legal rights, regardless of whether those rights are transferable or separable.  The intangible asset must also possess all of the following characteristics/criteria:

  • lack of physical substance;  
  • be of a nonfinancial nature (not in monetary form like cash or investment securities); and,
  • the initial useful life extending beyond a single reporting period.

Examples of intangible assets include easements, land use rights, patents, trademarks and copyrights.  In addition, intangible assets include computer software purchased, licensed or internally generated, including websites, as well as outlays associated with an internally generated modification of computer software. 

Intangible assets can be purchased or licensed, acquired through nonexchange transactions or internally generated.  Intangible assets exclude assets acquired or created primarily for purposes of directly obtaining income, assets from capital lease transactions reported by lessees, and goodwill created through the combination of a government and another entity.

A school district could, and many do, use bar code identification tags to control capital assets, such as VCRs, technology equipment, etc., even though these capital assets have a cost below the capitalization threshold.  In tracking these capital assets only the information necessary to control the location and use of them needs to be maintained.  Some school districts video-tape each classroom/office annually to save time and effort tracking capital assets below the capitalization threshold.  The video tape is also helpful for insurance claims.  Whether a school district chooses to track capital assets with a cost below the capitalization threshold or not, capital assets with a cost below the capitalization threshold should not be included in the capital assets listing for reporting purposes.  

This policy provides for valuing capital assets at historical cost as required by GAAP.  This policy bases the capitalization threshold on the historical/acquisition cost of the individual asset.  The school district can choose to use the historical cost of all the items included in a purchase order as the basis for determining whether to capitalize the capital asset.  The cost of improvements may be added to the historical cost of a capital asset.  Deciding whether to add the costs of an improvement to a capital asset's historical cost is a judgment call which should be made after consulting with the school auditor.

 

 

Approved:          10/21/2019                   Reviewed:                     Revised:   

727.1 Capital Assets - Regulation

A. Capital Assets Management System 

The superintendent, and/or other designated staff, shall:

  1. Conduct the capital assets physical count;

  2. Develop the capital assets listing;

  3. Tag capital assets included in the capital assets management system with a bar code identification number;  

  4. Make a recommendation of a computer software program for managing the capital assets management system;

  5. Enter the necessary data into the capital assets management system and compile the appropriate reports;

  6. Develop forms and procedures for maintaining the integrity of the capital assets management system; and,

  7. Maintain responsibility for an accurate capital assets management system.  

 

B. Determining historical cost

  1. The historical cost of a capital asset is based on the actual costs expended in making the capital assets serviceable.      

  2. Gifts of capital assets are valued at the estimated fair market value at the addition/acquisition date.  

  3. Capital assets purchased under a capital lease are valued at historical cost of their net present value of the minimum lease payments on the addition/acquisition date.    

  4. The historical cost of capital assets must include capitalized interest.

 

C. Annual capital assets listing reconciliation

  1. The superintendent, and/or other designated staff, in conjunction with the capital assets management team, will conduct an annual capital assets physical count to develop the annual capital assets listing in a manner similar to the initial capital assets listing process in B above.  At least every three years, someone other than the person in custody of the capital assets in the building/department/room will perform the capital assets physical count for the building/department/room. 

  2. Upon completion of the annual capital assets listing, the capital assets listing is reconciled to the capital assets management system data base.    

  3. Capital assets found to have been excluded from the data base are added to the capital assets management system.  The capital assets management system process should be reviewed to prevent future incidents of excluding a capital asset. 

  4. Capital assets unaccounted for are reported to the superintendent who contacts the supervisor of and the individual in charge/control/custody of the capital asset.  The individual in charge/control/custody of the capital asset has thirty days to account for the capital asset.     

  5. Capital assets unaccounted for after thirty days are reported to the superintendent for appropriate action and documentation.  "Appropriate action" may include discipline, up 

  6. to and including discharge, and may require the employee/person in charge/control/custody of the capital asset to replace the asset.

  7. The superintendent is responsible for documenting the reasons each asset was not reconciled to the capital assets management system.    

 

 D. Addition/acquisition of capital assets.  

  1. The school district's purchasing policy and administrative regulations must be followed when acquiring capital assets.  The school district's policy and administrative regulations must be followed for receiving a gift of capital assets.   

  2. The capital assets addition/acquisition documentation must be completed for each additional capital assets with an addition/acquisition cost of equal to or greater than ($ capitalization threshold).  The following information should be collected, if applicable:

  • Name of location-building/department/room;

  • Location-building/department/room code;

  • Balance sheet accounting/class code;

  • Government or BTA program;

  • Addition/acquisition date;

  • Check/purchase order number or gift;

  • Bar code identification number assigned to and placed on the capital asset;

  • Serial/model number;                    

  • Cost-historical;

  • Fair market value on acquisition date (donated assets only);

  • Estimated useful life;

  • Vendor;

  • Purchasing fund and function;

  • Description of capital asset;

  • Department/person charged with custody, 

  • Method of addition/acquisition-purchase, trade, gift etc., 

  • Quantity;

  • Replacement cost; 

  • Addition/acquisition authorization; and,

  • Function for depreciation.

3. Capital assets acquired in a month must be entered into the capital assets management system in the same month.

4. The actual costs of construction in progress, other than infrastructure, is entered into the capital assets management system in the month in which costs are incurred until the total cost of addition/acquisition is entered.  Upon completion of construction, the total costs accumulated over the period of construction are reclassified to buildings. 

5. Capital assets acquired in a month must be entered into the capital assets management system in the same month.

 

E. Relocation/transfer of machinery and equipment capital assets.

  1. A capital assets relocation/transfer documentation must be completed prior to removing machinery and equipment capital assets from their current location.  The following information must be collected:

  • Relocation/transfer date;

  • Quantity;

  • Bar code identification number; 

  • Current location-building/department/room code;

  • Name of current location-building/department/room;

  • New location-building/department/room code;

  • Name of new location-building/department/room;

  • Date placed at new location-building/department/room;

  • Department/person charged with custody; and

  • Relocation/transfer authorization.

     2. Capital assets relocated/transferred in a month must be entered into the capital assets management system in the same month.

 

F. Disposal of capital assets

  1. A Capital Assets disposal documentation must be completed prior to disposing of real property.  The following information must be collected:

  • Disposal date;

  • Quantity;

  • Bar code tag identification number;

  • Legal description, 

  • Location/Address;

  • Purchaser;

  • Disposal methods for real property trade, sale, stolen, etc.; and,

  • Disposal authorization.

     2.  Capital assets disposed of in a month must be entered into the capital assets management system in the same month.

     3.  When assets are sold or disposed of, it is necessary to calculate and report a gain or loss in the statement of activities.  The gain/loss              is calculated by subtracting the net book value (historical cost less any accumulated amortization) from the net amount realized on                the sale or disposal.

 

G. Lost, damaged or stolen capital assets. 

  1. A Lost, Damaged or Stolen Capital Assets Report must be completed when a capital asset has been lost, damaged or stolen. The following information must be collected:

  • Date of loss, damage or theft;

  • Employee/person discovering; 

  • Quantity;

  • Description of capital asset;

  • Bar code tag identification number; 

  • Location-building/department/room; 

  • Description of loss, damage, etc.;

  • Filing of police report-yes or no;

  • Filing of insurance report-yes or no;

  • Sent for repair-yes or no;

  • Date returned from repair;

  • Date returned to location-building/department/room; 

  • Department/person charged with custody; and,

  • Authorization.    

  1. Capital assets damaged, lost or stolen in a month must be entered into the capital assets management system in the same month.

    

H. Capital assets reports

  1. Annual reports for June 30 each year.      

  • Capital assets listing including the following items:

  • Balance sheet accounting/class code;

  • Purchasing fund, function and depreciation function;

  • Bar code tag identification number;

  • Description of the capital asset;

  • Historical cost or other;

  • Location;

  • Current year depreciation/expense; and,

  • Accumulated depreciation/amortization.

     2.  Capital assets listing by location/building;

     3.  Capital assets listing by department/employee/person charged with custody; and,

     4.  Capital assets listing by replacement cost.  

 

  

NOTE:  This sample administrative regulation provides a sample capital asset management system.  It is important the administrative regulations adopted by a school district reflect is its actual practice. The school district may choose to employ a service provider to conduct the annual capital assets physical count, annual capital assets listing and to implement a capital assets management system for capital assets required to be capitalized under board policy.  Should the board employ a service provider, it is important to have the school attorney review the request for proposals and to draft the service provider contract.

This sample administrative regulation provides for valuing capital assets at historical cost as required by GAAP.  This administrative regulation also requires the school district to maintain the replacement value of capital assets.  Should the school district decide not to maintain replacement values for its capital assets, the requirement should be deleted from the administrative regulation. 

Some school districts in completing their initial capital assets listing consider a room a unit.  For example, 25 student desks, one teacher's desk, one teacher's chair, wastebasket, two storage/file cabinets and so forth could be considered a room unit with a value of $35,000.  The unit is included as one item on the capital assets listing.

This may be a difficult element of a capital assets management system.  Capital assets have a tendency to be moved around and the employees moving them generally do not remember to complete the paperwork or even to inform the superintendent.  A quality annual reconciliation process must be done to ensure a valid capital  assets listing.  Some school districts require a designated person at each building to complete the paperwork upon the disposal of a capital asset.  School districts with a local area network can save paperwork by allowing each building to enter the information regarding disposal of capital assets as long as the appropriate checks and balances exist to verify the information.    

The school auditor may, at a minimum, require a capital assets listing with the historical or other cost basis and balance sheet accounting/class code for each capital asset in the capital assets listing.  It is important for the school district to consult with the district’s auditor prior to determining the school district's requirements for this annual report.  The other items listed above are optional unless recommended by the school auditor to meet the school district's needs.

The capital assets listing total dollar amount must equal the amount entered on the school district's Certified Annual Report (CAR).  This amount is calculated as follows:

  • Capital assets listing prior year by balance sheet accounting/class code

  • Additions/Acquisitions by balance sheet accounting/class code

  • Disposal by balance sheet accounting/class code                      

  • Capital assets listing current year by balance sheet accounting/class code

The last three reports may be used by school districts for many different purposes.  For example, the "capital assets listing by location/building" and “capital assets listing by department/employee/person charged with custody" are used by school districts for the annual capital assets listing reconciliation to compare the actual capital assets in a building or department/room with the information in the capital assets management system.  

 

 

Approved:          10/21/2019                   Reviewed:                     Revised:   

727.2 Capital Assets - Management Definition Systems

Back trending/standard costing - an estimate of the historical original cost using a known average installed cost for like units as of the estimated addition/ acquisition date.  This cost is only applied to the capital assets initially counted upon implementation of the capital assets management system when the historical original cost cannot be determined.  It is inappropriate to apply the back trending/standard costing method to any capital assets acquired after the assets management system implementation date.

Balance sheet accounting/class codes - the codes set out for assets in the Iowa Department of Education Uniform Accounting Manual.  They are:  200-capital assets; 211- land and land improvements; 221-site improvements; 222-accumulated depreciation on site improvements; 231-buildings and building improvements; 232-accumulated depreciation on buildings and building improvements; 241-machinery and equipment; 242-accumulated depreciation on machinery and equipment, 251-works of art and historical treasures; 252-accumulated depreciation on works of art and historical treasures, 261-infrastructure, 262-accumulated depreciation on infrastructure, and 271-construction in progress.

Book value - the value of capital assets on the records of the school district, which can be the cost or, the cost less the appropriate allowances, such as depreciation.

Buildings and building improvements - a capital assets account reflecting the addition/acquisition cost of permanent structures owned or held by a government and the improvements thereon. 

Business-type activities – one of two classes of activities reported in the government-wide financial statements.  Business-type activities are financed in the whole or in part by fees charged to external parties for goods or services.  These activities are usually reported in enterprise funds. 

Capital expenditures/expenses - expenditures/expenses resulting in the addition/acquisition of or addition/acquisition to the school district's capital assets.

Capital assets - Capital assets with a value of equal to or greater than ($ capitalization threshold) based on the historical cost include:  long-lived assets obtained or controlled as a result of past transactions, events or circumstances.  Capital assets include buildings, construction in progress, improvements other than facilities, land, machinery and equipment, and intangible assets.

Capitalization policy - the criteria used by the school district to determine which capital assets will be reported as capital assets on the school district’s financial statements and records

Capitalization threshold - The dollar value at which a government elects to capitalize tangible or intangible assets that are used in operations and that have initial useful lives extending beyond a single reporting period.

Capitalized interest - interest accrued and reported as part of the cost of the capital assets during the construction phase of a capital project.  The construction phase extends from the initiation of pre-construction activities until the time the asset is placed in service.  

Construction in progress - buildings in the process of being constructed other than infrastructure.

Cost - the amount of money or other consideration exchanged for goods or services.

Depreciation/Amortization - expiration in the service life of capital assets, other than wasting assets, attributable to wear and tear, deterioration, action of the physical elements, inadequacy and obsolescence.  In accounting for depreciation/amortization, the cost of a capital asset, less any salvage value, is prorated over the estimated service life of such an asset, and each period is charged with a portion of such cost.

Fixtures - attachments to buildings that are not intended to be removed and cannot be removed without damage to the buildings.  Those fixtures with a useful life presumed to be as long as that of the building itself are considered a part of the building.  Other fixtures are classified as machinery and equipment.  

General capital assets - capital assets that are not capital assets of any fund, but of the governmental unit as a whole.  Most often these capital assets arise from the expenditure of the financial resources of governmental funds.

General capital assets account group (GFAAG) - a self-balancing group of accounts established to account for capital assets of the school district, not accounted for through specific proprietary funds.

Government activities – activities generally financed through taxes, intergovernmental revenues, and other non-exchange revenues.  These activities are usually reported in governmental funds and internal service funds.

Government-wide financial statements – Financial statements that incorporate all of a government's governmental and business-type activities, as well as its nonfiduciary component units.  There are two basic government-wide financial statements the statement of net assets and the statement of activities.  Both basic government-wide financial statements are presented using the economic resources measurement focus and the accrual basis of accounting.

Historical (acquisition) cost - the actual costs expended to place a capital asset into service.  For land and buildings, costs such as legal fees, recording fees, surveying fees, architect fees and similar fees are included in the historical cost.  For machinery and equipment, costs such as freight and installation fees and similar fees are included in the historical cost.

Improvements – In addition made to, or change made in, a capital asset, other than maintenance, to prolong its life or to increase the efficiency or capacity.  The cost of the addition or change is added to the book value of the asset.

Improvements other than buildings - attachments or annexation to land that are intended to remain so attached or annexed, such as sidewalks, trees, drives, tunnels, drains and sewers.  Sidewalks, curbing, sewers and highways are sometimes referred to as "betterments," but the term "improvements" is preferred.

Infrastructure – long-lived capital assets that normally are stationary in nature and normally can be preserved for a significantly greater number of years than most capital assets.  Examples of infrastructure assets include; roads, bridges, tunnels, drainage systems, tater and sewer systems, dams, and lighting systems. 

Investment in general capital assets - an account in the GFAAG representing the school district's investment in general capital assets. The balance in this account generally is subdivided according to the source of the monies that finance the capital assets addition/acquisition, such as general fund revenues and special assessments.  

Land and buildings - real property owned by the school district.

Machinery and equipment - capital assets which maintain their identity when removed from their location and are not changed materially or consumed immediately (e.g., within one year) by use.  Machinery and equipment are often divided into specific categories such as:  transportation machinery and equipment which includes school buses and school district owned automobiles, trucks and vans; other motor machinery and equipment which includes lawn maintenance machinery and equipment, tractors, motorized carts, maintenance machinery and equipment, etc.; other machinery and equipment which includes furniture and machinery and equipment contained in the buildings whose original cost is equal to or greater than ($ capitalization threshold), and capital assets under capital leases and capital assets being acquired under a lease/purchase agreement. 

Proprietary funds – Funds that focus on the determination of operating income, changes in net assets (or cost recovery), financial position, and cash flows.  There are two different types of proprietary funds:  enterprise funds and internal service funds.

Replacement cost - the amount of cash or other consideration required today to obtain the same capital assets or its equivalent.

 

Approved:          10/21/2019                   Reviewed:                     Revised: