What are the general requirements for transferring cash and/or budget authority between funds?
What cash and budget transfers are specifically allowed under school laws?
The following transfers may be made by Board action, without specific hearings:
1. General Fund (01) can transfer money, within the budget, to the COmpensated Absences Fund (21). The amount held in the Compensated Absences Fund is limited to 30% of the liability for sick leave and vacation leave termination pay outs owed to administrative and non-certified personnel. (MCA 20-9-512)
2. General Fund (01) can transfer money, within the budget, to the Litigation Reserve Fund (27). The amount held in the Litigation Reserve Fund can be used to pay settlements required as the result of law suits. The fund can't be used for costs of litigation, such as lawyer's fees, phone calls, filing fees, etc. When litigation is settled, the money must be transferred back to the General Fund. (MCA 20-9-513).
3. Impact Aid Fund (26) can transfer up to 25% of the Impact Aid money to the Debt Service Fund (50) to pay bond principle and interest. (MCA 20-9-437 and 20-9-443).
4. Money from any fund except the Miscellaneous Programs Fund (15) can be transferred to the Interlocal Agreement Fund (82) to support an interlocal agreement between the school district and another governmental entity. (MCA 20-9-703)
5. To establish a Non-Operating Fund (19) for non-operating (temporarily closed) district, the Board must transfer the balances of all funds except the Debt Service Fund (50) and Miscellaneous Programs Fund (15). (MCA 20-9-505).
Can General Fund money be transferred to another fund?
No. (MCA 20-9-208) prohibits transfers into or out of the General Fund unless school law specifically authorizes the transfer.
What funds cannot be transferred?
Laws and Administrative Rules restrict transfers as follows:
1. The Retirement Fund (14) and the Debt Service Fund (50) cannot transfer money to another fund. The Retirement Fund is county money raised specifically for retirement costs and paid only from the Retirement Fund. The Debt Service Fund is local tax money raised to pay bonds and SIDs. (ARM 10.10.320) NOTE: When all bonds and SIDs have been paid, the Debt Service Fund can be closed and the balance transferred to the Building Reserve Fund (61), the General Fund (01) or the Technology Fund (28) and used for building purposes. (MCA 20-9-443)
2. Bus Depreciation Fund (11) can transfer money to any other fund only upon voter approval and only after all buses owned by the district have been sold or otherwise disposed. (MCA 20-10-407) (ARM 10.10.320).
3. Federal and State grants cannot be transferred. This would include, for example, Title I, IDEA, Drug Free Schools, Gifted and Talented, etc. Most grants are held in the Miscellaneous Programs Fund (15). (ARM 10.10.320)
4. Tax money cannot be transferred from a budgeted fund to a non-budgeted fund. (MCA 20-9-208).
5. Tax money can only be transferred from one budgeted fund to another budgeted fund if the tax money is subsequently expended for the same purpose or related purpose to the purpose for which the taxes were levied. When tax money is transferred, the trustees' resolution must state the reason for which the taxes were raised and what the taxes will be used for. (ARM 10.10.320(6)).
6. Money from a non-budgeted fund cannot be transferred to a budgeted fund. (MCA 20-9-208)
Can tax money be transferred from one fund to another?
Except as restricted, tax money can be transferred from one budgeted fund to another budgeted fund if it is used for the same purpose or a related purpose to the reason for which the taxes were raised. A special hearing is required. Restrictions prohibit transferring money from Retirement Fund, Debt Service Fund, and General Fund. (ARM 10.10.320(6)).
When can budget authority be transferred?
If the district transfers cash from one budgeted fund to another, they can transfer an equal portion of the budget to the other fund. (ARM 10.10.320)
What documentation and process is necessary for a transfer?
Any board action should be covered in the board's minutes. If a specific hearing is required, the board should resolve to hold the hearing and should comply with legal hearing requirements. Within 30 days of approving the transfer, the district must notify the Office of Public Instruction (OPI) in writing. (ARM 10.10.320(11)). For the transfer of tax money between budgeted funds, the trustees' resolution must state the purpose for which the taxes were raised and the purpose for which the tax money will be spent, justifying how those purposes are the same or related. (ARM 10.10.320(6)). For the transfer of cash between nonbudgeted funds, the trustees' resolution must state specifically how the transfer will improve efficiency of spending within the district. (ARM 10.10.320(8)).
OPI Contact: Rebecca Phillips at (406) 444-0783 or email: firstname.lastname@example.org
10th of February, 2010