Spelling it Out: Fund balances

School funding and budgets are complicated and nuanced.
One feature, determined following an annual audit, is a fund balance.

School funding and budgets

Before each new fiscal year, which begins every July 1st, school districts and charters are busy setting their budgets. Districts and charters weigh their assets against their liabilities and determine a fund balance: the leftover amount when liabilities are subtracted from assets. Simply put, a savings account.

When a fund balance exceeds zero dollars, it is considered positive, meaning there’s leftover money (“in the black”). If the fund balance is less than zero, it is negative, meaning that at the point in time a district’s fund balance is established, it is spending more than it will have (“in the red”).

If a district spends precisely every cent of its budget, its fund balance is neither positive or negative, just zero.

In 2024, only three districts in Idaho had negative or zero fund balances.

Values vs. percentages

Fund balances can be portrayed either as an actual monetary value (ex.: $251,743) or as a percentage of a general fund (ex.: 56%). If one is used alone, lacking context can make it misleading or confusing.

A district or charter with a small budget under $1 million will probably have a fund balance that looks big when shown as a percentage, even if the actual number is not very large compared to average fund balances.

Perspectives on fund balances

Fund balances have become the center of some controversy. Lawmakers discussed scrutinizing school district fund balances in 2016, when district fund balances totaled $215 million statewide. In 2024, they totaled $712 million.

Those in favor of fund balances argue they are necessary; as a rainy day fund, to maintain a good bond rating, or to act as a cushion for fluctuations in various sources of income.

Opponents of fund balances argue that bonds and levies aren’t as necessary when school districts have money sitting in their fund balance, waiting to be used.

Fund Balance Sizes

Debates also revolve around the size of fund balances. Idaho school districts maintain a range of fund balance sizes between roughly 5-60%: small districts like Middleton and Blackfoot keep around 6% (~$2 million) of their budgets in fund balances.

Districts even smaller than those can have even larger fund balance percentages due to their small budgets. Avery, for example, had a general fund of $623,174 and a fund balance equal to 77.5% of that, at $482,806.

Big districts like Boise and West Ada maintain fund balances which eclipse the total budgets of many districts. Boise, with a fund balance equaling a square 20% of its total budget at $63.5 million, holds the largest fund balance in the state. West Ada follows with 15% or $50 million.

Constructing an elementary school currently tends to cost around $20 million at $350-$400/square foot, for reference.

Charters are a different story.

Of the many charter schools in Idaho, fund balances exceeding 100% are not irregular. One charter, the Kootenai Bridge Academy, an online school, reported a fund balance equal to 336.9% of its general fund – a $10 million savings account, in effect.

Beyond the reasons already mentioned in regards to traditional public school districts to keep fund balances, charters often have comparatively small budgets and might be saving to build a new facility or have an agreement with a lender that they have a certain amount of money on-hand at all times.

Because they can’t run bonds and levies on a ballot, charter schools must find other ways to account for expenses traditional public schools often cover with supplemental levies, like facilities maintenance or staff salaries.