Early in the summer, I wrote an article that discussed what are known as categorical funds in Iowa school budgets. If you recall, school budgets are comprised of multiple funds that make up the overall budget. Our budget for the school year that just began assumes a spending plan of $10,077,172. However, those funds need to be spent in a very specific way and cannot be cross pollinated between different funds. For example, we cannot pay for wages and benefits of employees using funds from the Physical Plant and Equipment Levy (PPEL).
The largest fund that makes up our school budget is referred to as the general fund. The general fund spending plan for the current fiscal year anticipates expenditures of $7,839,172. This includes salaries, benefits, transportation, instructional materials, some maintenance, and other related items. But nestled within the general fund is another subset of categorical funds that can only be used for even more specific purposes. The largest subset of categorical funds in the general fund is in the area of special education. As it's name implies, those funds can only be used for special education purposes and programming. In other words, these funds cannot be used to hire a teacher that works exclusively in third grade, or to hire a family and consumer science teacher in the high school. In case you are wondering, last year our special education program expenses were $1,503,910.08.
It doesn't just end at special education either. We have categorical funds in approximatley 8 different areas: At-Risk, Dropout Prevention (yes, this is different from At-Risk), Mentoring, Iowa Core Curriculum Implementation Funds, Professional Development, Teacher Leadership, Talented and Gifted, and Early Literacy. This is in addition to another subset of federal categorical funds that we refer to as the Title Programs (Title I, IIA, VI, and Part B) As I stated in my June 17th article, there is a problem with this and it becomes quite complicated.
Let's say we would like to hire a teacher in kindergarten because the class size is too large. Well, upon examination of fund balances, we may notice that all the Iowa Core Curriculum Implementation money from the prior fiscal year has not been spent. Take it a step further and assume that you have a plan for implementation and have fully funded your plan, leaving this reserve balance. Many would think that it makes sense to use this reserve fund to help cover the cost of hiring the new teacher. I agree! Unfortunately, there is no flexibility in the use of these categorical funds. No matter what, they need to stay with that category. As another example, you can't take excess funds from one category and apply them for employee raises in another category.
So then, how do we get to the total of $10,077,172? Well, aside from the general fund, we have an activity fund budget this year of $466,000. This fund is used to pay for all the athletic equipment and student activities. It cannot be used to pay for the salaries of coaches and activity advisors. Those still must be paid out of the general fund.
We anticipate expenditures in our management fund to be around $257,000. Some may believe this fund implies expenditures related to the management of the organization. That is a good guess, but not true. The primary expenditure that comes out of this fund is the cost of our property and casualty insurance for the school district. We also use this fund to pay deductibles against insurance claims. The only other expense in the management fund is early retirement benefits.
Two separate funds comprise the capital projects component of our budget and can be used for a broad array of capital improvement projects. These are the funds that are used to purchase computers for our students, fund the restroom renovations, the stadium lights, or the hotel property. First is the Sales Tax, where our spending plan calls for $790,000 of improvements this school year. The PPEL fund is the other arm of capital projects and with an anticipated budget of $387,000 we use this to replace vehicles in our fleet. The fact is that at our next board meeting, we hope to approve the purchase of a new school bus that we believe will cost somewhere around $90,000.
The final fund that makes up the school budget is known as the nutrition fund. This is the fund that is used to operate the hot lunch program where we have budgeted $338,000 this year.