Kansas Schools Start The New Year With Even More In The Bank - New Authority To Spend Now Exists

September 29, 2011 - Wichita - New data from the Kansas Department of Education show that Kansas public schools increased their operating carryover cash reserves by $93.7 million in the fiscal year ended June 30, 2011. Operating cash reserves (not including capital, debt or federal funds) increased from $774.6 million to a record-high $868.3 million. The increase in operating reserves includes a first-time disclosure of $8 million in school activity funds, which are primarily used for school athletics.

"We continue to hear about schools choosing to cut classroom spending, but many districts are not spending all of their state and local tax income," said KPI president Dave Trabert. "These funds operate much like personal checking accounts; the unencumbered balances only increase when income is greater than spending. It will be interesting to see how Kansas school districts use the new authority they have which makes it easier to spend down these balances."

Effective July 1, 2011 school districts were permitted to transfer unencumbered carryover cash balances from a group of twelve funds to be used for any operating purpose.  Some of these balances have always been available but, to the extent that restrictions existed, the new law (SB 111) expedites access by lifting all restrictions.  SB 111 gives districts authority to access those funds to offset the $232 per-pupil decline in base state aid over the last two years.

Trabert concluded, "As of July 1, the average Kansas school district had nearly four times the amount permitted to be transferred in the funds identified in SB 111. All but ten districts across the state could exercise the full authority of SB 111 and still have carryover cash balances. Of course, each district is faced with a unique situation but teachers and parents have a right to know that this option exists."