Wellesley Public Schools: Fiscal Year 2026 Budget
Special Revenue Funds: Revolving Funds
Public schools in Massachusetts are authorized to maintain revolving and special revenue accounts which are not subject to fiscal year boundaries and do not close out to the Town’s general fund (unless specified in the authorizing legislation) at year’s end. Revolving fund balances carry from year to year. The Wellesley Public Schools has several revolving funds common to school districts, including Athletics, Transportation, Tuition, and other funds that relate to activities engaged in by schools. Since FY’98, the district has shown the transfers from revolving funds as offsets to the operating budget costs. Some of the revolving funds have revenue that is static relative to participation and the offsets are applied year after year with little fluctuation. Other accounts are adjusted to reflect current revenue estimates and the needs of the district, particularly Athletics, Performing Arts and Circuit Breaker accounts. In the Child Lab program and Facility Rental account, staff members are directly charged to the revolving fund. Wellesley Public Schools established guidelines to consistently manage revolving fund balances to: • Ensure compliance with state and federal guidelines. • Maintain sufficient funds to cover the working capital need for each fund’s expected use. • Ensure that each fund balance does not exceed its intended need. The guidelines were based on a review of best practices of other school districts and relevant professional organizations 1 . The guidelines are: 1. Maintain adequate working capital as inflows of revenue and outflows of expenditures vary and can be cyclical. 2. Target 4-6 months (1/3 to 1/2) of the prior non-COVID three (3) year average annual revenue to ensure adequate cash flow. The National School Lunch Revolving Fund should not exceed a fund balance greater than three (3) months working capital per the Massachusetts Department of Elementary and Secondary Education (DESE) recommendations. 3. It is advised that if there is a considerable excess, that the draw down should not be done in one fiscal year as it would have a measurable, negative impact on the following year’s year-over-year percentage increase in the operating budget as the draw would not be repeatable. 4. Conversely, refraining from using revolving fund fees should balances drop below targets and/or curtail direct expenditures from the fund.
Each fund presented in the budget are evaluated against these recommendations. The evaluations include:
A. Fund Balance at Target B. Fund Balance Over Target: Multi-Year Use May be Determined C. Fund Balance Under Target: Draw Downs May be Placed on Hold/Reduced D. Fund Balance Outside Guidelines E. Fund Balance in a Deficit
1 Reviewed the Association of School Business Officials (ASBO) and the Governmental Finance Officers Association (GFOA).
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