Budget Commentary Special Revenue Funds

There are different types of funds that exist in a municipal environment. Some funds are for a specific purpose, and some are to support the general operation of the municipality. There are laws that govern the manner in which the monies are received by the district and accessed for spending. This section will provide a brief description of the main properties associated with the special revenue funds (grants, gifts, and revolving) categories.

Special Revenue Funds or “Special Funds,” as they are often referred to, are established for specific purposes as defined by law or a legislative act. There are three types of special revenue funds that the school district encounters: revolving funds, gift accounts, and grants.

Revolving Funds

Revolving Funds can be established only for specific purposes governed by statute. Generally, the revenue generated for these funds is derived from fees charged for a non-mandated service or activity (before and after school programs, athletics, transportation, building usage, etc.). The budgets for these funds are not subject to the annual adoption/approval process. However, expenditures from these funds must be related specifically to the purpose for which the fund was established. Any money left in the fund at the end of the year carries forward into the next year, and the fund remains open unless, or until the revenue generating activity ceases to exist.

Gift Accounts

Gifts can be accepted by the School Committee from charitable foundations, private corporations, or individuals. Money from these accounts can be expended only for the intended purpose and are subject to School Committee approval. The account closes when the funds are fully expended, or the purpose has been fulfilled. Currently, the district does not have any gift accounts.

Grants

State and Federal grants are subject to legislative approval and are either competitive or entitlements. In addition, grants may be received from private sources. Grant applications, once approved by the School Committee, must be submitted to and approved by the appropriate awarding agency. Grant funds are intended to supplement funding from local appropriations for specific target areas. Because these funds are awarded on an annual basis, any funds not expended must be returned to the awarding agency unless otherwise stated at the time of the award. Money expended from grants is subject to School Committee approval.

The following pages contain the program-related revolving funds and recurring grants that the district will maintain next fiscal year. The total special revenue fund receipts anticipated for next year are $2,387,142.

Grants

Masconomet’s revenue includes money from federal entitlement grants in two major categories: special education and regular education. Grant funds received under special education entitlements represent the federal government’s contribution to the cost of mandated special education programs. The money received from the government covers only a small portion of the actual cost. Masconomet is fortunate to receive funds through both state and federal grants. During the 2008-09 school year, the District is eligible for four (4) grants estimated to total $447,084. While most state grants have been reduced or eliminated during recent years, our deferral grant, the special education (IDEA) grant, has actually increased each year. This grant (an entitlement grant) accounts for a large percentage of our total grant funding ($411,152). Through these grants, we are able to fund 10 positions and part of one of the Tri-Town Council adjustment counselors.

Other federal entitlements are provided under the No Child Left Behind Act (NCLB), which combines grants in four areas of entitlement. Grants funded under this Act are structured to encourage stronger accountability for learning results, provide increased flexibility and local control, expand options for parents, and encourage districts to emphasize teaching methods that have been shown to work. The remaining grants (ranging from $1,304 to $21,764) provide funding for training consultants, conference money, new course materials, and curriculum development. All funds support programs, which have been identified as necessary to address District goals.

Unfortunately, many Massachusetts grants have been reduced or eliminated due to statewide budget issues. In addition, most competitive grants are available to school districts confronted with socio-economic challenges, poor MCAS scores, or other social and academic challenges. These criteria make Masconomet ineligible for most grants.

Grants - Continued

Revolving Funds

Masconomet also generates income by charging fees for ancillary services that generally occur outside of the normal school day. During the 2008-09 school year, the District will maintain eight (8) revolving funds for this purpose. The total estimated receipts in FY09 are $1,940,058.

The revolving funds pay for direct services required to run the programs through direct expenditures to the revolving fund or through fund transfers. In addition, the funds will be used to renovate the outdoor track surface and purchase file servers, switches, and data storage units.

Revolving Funds- Continued