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The Governmental Funds Balance Sheet (Exhibit B-1) is prepared from the district records and is the responsibility of the district. This statement is included in the Basic Financial Statements section of the ACFR. The amounts reported on this statement are the combined fund(s) 11–13 and fund 15 general fund amounts reported on the Combining Balance Sheet (Exhibit D-1).

The Governmental Funds Balance Sheet contains a column for each governmental fund. The columns included in this statement are:

• General Fund
• Special Revenue Fund
• Capital Projects Fund
• Debt Service Fund
• Permanent Fund
• Total Governmental Funds

The Governmental Funds Balance Sheet should include a reconciliation of total governmental funds fund balance to the net assets of governmental activities included in the Statement of Net Assets (Exhibit A-1). Adjustments to convert the amounts on the Governmental Funds Balance Sheet to the accrual method of accounting and to eliminate interfund balances are necessary.

On the Governmental Funds Balance Sheet at June 30, 20XX, General Fund column, Fund Balance Reserved for Encumbrances will include the Fund 15 year-end encumbrances as reported on the Combining Balance Sheet as well as the Fund 10 year-end encumbrances.

The fund balance used for the excess surplus calculation is taken from the Budgetary Comparison Schedule (Exhibit C-1), not from the Balance Sheet discussed on this page.

The information included in this statement (Exhibit B-2) is obtained from the governmental fund type detailed schedules within the ACFR. Districts required to use school-based budgeting will include the line for Transfer - Contribution to SBB for the transfer from the special revenue fund to Fund 15.

The Special Revenue Fund data included on this statement is reported on a GAAP basis, whereas the data included in the Special Revenue Fund schedules is reported on the budgetary basis. Encumbrances are reported as expenditures on the budgetary basis, but not on the GAAP basis. The reconciliation of budgetary basis expenditures as reported in the Budgetary Comparison Schedule - Special Revenue Fund (Exhibit C-2) to GAAP basis expenditures is presented in the Notes to Required Supplementary Information, Budget to GAAP Reconciliation (Exhibit C-3).

The revenue difference due to the delay in the last state aid payment(s) (which is (are) not recognized for GAAP basis statements) will be reported as a reconciling item for both the special revenue and general fund. The payment(s) made in July of the year following the ACFR for the budget year is recognized in the fiscal year of receipt on the GAAP basis and will also be reported as a reconciling item for both funds. The reconciliation is presented in the Budget to GAAP Reconciliation (Exhibit C-3) in the Notes to Required Supplementary Information. Refer to The Audit Program, for further discussion on the adjustments for the last state aid payment(s) and for information on the reconciliation and the related disclosures. The reconciliation for districts required to use school-based budgeting will be similar to all districts with the additional inclusion of lines for the operating transfers related to SBB.

Other Financing Sources (Uses)

The Operating Transfer In to the General Fund and the Operating Transfer Out of the Special Revenue Fund represent the total of the Blended Resource Fund (Fund 15) expenditures paid in the general fund from the contribution of federal and state restricted sources. These amounts are obtained from the Fund 15 district-wide summary of the Blended Resource Fund - Schedule of Expenditures Allocated by Resource Type - Actual (Exhibit D-2) and are included on this statement in the Other Financing Sources (Uses) section.

The Operating Transfer to Special Revenue Fund - Preschool Programs is included on the Statement of Revenues, Expenditures and Changes in Fund Balances in the Other Financing Sources (Uses) section.

The Budgetary Comparison Schedule - General Fund (Exhibit C-1) is prepared from the district records and is the responsibility of the district.  This schedule is to be included in the Required Supplementary Information section of the ACFR.

The amounts reported on this schedule are the combined general fund amounts reported on the Combining Budgetary Comparison Schedule – General Fund (Exhibit C-1a: Column 3 for original budget, Column 6 for transfers, Column 9 for final budget, Column 12 for actual).

Comparative schedules are not required. Districts are required to include the following columns for the Combined Total General Fund (Funds 11-13 plus Fund 15):

• Original Budget
• Budget Transfers
• Final Budget
• Actual
• Variance – Final Budget to Actual

Budgetary comparisons for districts required to use school-based budgeting (SBB) may include revenue and expenditure lines which are applicable only to those districts. This schedule for the general fund will include budget lines for the operating transfer in to the general fund from the Special Revenue Fund, if any. The Contribution to SBB operating transfer from the Operating Fund (Fund 11–13) to the Fund 15 reported on the Combining Budgetary Comparison Schedule-General Fund (Exhibit C-1a) is eliminated since the two components of the general fund are combined.

Preparers and auditors are to be aware that the ending Fund Balance as presented on this Budgetary Comparison Schedule is used in the Excess Surplus Calculation. This differs from the GAAP fund balance attributable to the delay of the last state aid payment from any fiscal year until July of the subsequent fiscal year. At the end of the Budgetary Comparison Schedule - General Fund, the district is required to present a Recapitulation of Balances and Reconciliation to the Fund Balance per the GAAP statements. An adjustment is made to reverse the  prior year’s last state aid payment, but the payment received in July 20XX has been included in the budgetary fund balance which was rolled forward on this schedule.

Overview

The Combining Budgetary Comparison Schedule - General Fund (Exhibit C-1a) is prepared from the district records and is the responsibility of the district. This schedule is to be included in the Required Supplementary Information section of the ACFR. Comparative schedules are not required.

Fund 15 is a sub-fund of the General Fund; therefore, a Combining Budgetary Comparison Schedule - General Fund (Exhibit C-1a) must be completed to determine the total general fund budget and actual amounts to be included on the Budgetary Comparison Schedule — General Fund (Exhibit C-1).

Preparation

Districts are required to include the following columns for the Operating Fund (Funds 11–13), the Blended Resource Fund (Fund 15), and the Combined Total General Fund (Funds 11–13 plus Fund 15):

• Original Budget (columns 1–3)
• Budget Transfers (columns 4–6)
• Final Budget (columns 7–9)
• Actual (columns 10–12)

The transfer amount in each column should agree to the difference between the original and final budget for each column (Fund 11–13, Fund 15 and Total).

The “final” budget is the original budget, including the rollover of prior year encumbrances, adjusted for approved transfers.

Actual

The last set of columns (actual) is the actual revenues, expenditures and operating transfers for the general fund.  The actual amount for the Operating Fund (Fund 11–13) is obtained from the district’s general ledger. The actual amount for Fund 15 is obtained from the Blended Resource Fund - Schedule of Blended Expenditures - Budget and Actual - (Exhibit D-3).

Lines Specific to Districts Required to use School-Based Budgeting:

Such district’s budgetary comparison schedules include budget lines only applicable to school-based budgeting (SBB) districts. The general fund contribution to SBB (transfer to Fund 15) is reported in Fund 10 as Other Operating Transfers-Out and reported in Fund 15 as Other Financing Sources-In. The transfers between Fund 10 and Fund 15 must equal.

Note: This section also includes instructions for completing the E-1 Combining Schedule of Program Revenues and Expenditures Special Revenue Fund - Budgetary Basis and the school-based budgeting (SBB) Encumbrance Worksheet.

The Budgetary Comparison Schedule - Special Revenue Fund (Exhibit C-2) is prepared from the district records and is the responsibility of the district. This schedule is to be included in the Required Supplementary Information section of the ACFR.

Comparative schedules are not required. Districts are required to include the following columns for the Combined Total Special Revenue Fund (Fund 20):

• Original Budget
• Budget Transfers
• Final Budget
• Actual
• Variance - Final to Actual

The Original Budget column represents the total of the various special revenue fund original grant and state aid/grant budgets (budgetary basis). The Final Budget represents the total of the final approved grant budgets plus the final state aid/grant approved budgets. The Actual amounts reported on this schedule are the combined special revenue fund amounts and are obtained from and should agree to the Combining Schedule of Program Revenues and Expenditures-Budgetary Basis (Exhibit E-1: Totals column).

The line entitled Transfer Out to SBB is reflected as “Other Financing Uses” following the total facilities acquisition and construction services and “transfer” to charter schools.  The amount is obtained from the Combining Schedule of Program Revenue and Expenditures - Budgetary Basis (Exhibit E-1: Totals column).

The amounts on that combining schedule (Exhibit E-1) are on a budgetary basis and are calculated for each program as follows:

• Complete the Blended Resource Fund 15 - Schedule of Expenditures Allocated by Resource Type - Actual (Exhibit D-2). This schedule allocates total Fund 15 GAAP expenditures to the various resource types based on the percentage of those resources to the total resources available for Fund 15.
• Complete the Encumbrances Worksheet (Exhibit ENC-W/S) using the resource percentages and the GAAP expenditure amounts obtained from the calculation for Exhibit D-2 and the prior and current year encumbrances. This worksheet is necessary to convert GAAP expenditures to budgetary basis expenditures since special revenue fund schedules (i.e., Exhibits C-2, E-1) are reported on the budgetary basis where encumbrances are recorded as expenditures in the year the purchase order is issued.
• Use the general fund and state special revenue fund amounts in total.
• Use each of the federal expenditure amounts from D-2.
  • Report the calculated federal budgetary expenditures from the completed Encumbrances Worksheet and carry them to the Contribution to SBB line for each program on the Combining Schedule of Program Revenue and Expenditures - Budgetary Basis (Exhibit E-1).
  • The amounts reported on the Contribution to SBB line for any restricted state revenues on the Combining Schedule are obtained from the applicable district-wide budgetary basis restricted aid schedule (Exhibit(s) E-X).
  • The total Contribution to SBB on the Combining Schedule is carried over to the Budgetary Comparison Schedule - Special Revenue Fund (Exhibit C-2) for the actual column, Transfer Out to SBB (General Fund).

The Combining Balance Sheet (Exhibit D-1) is required for districts that use school-based budgeting, is prepared from the district records, and is the responsibility of the district. This schedule is included in the Other Supplementary Information section of the ACFR. Since Fund 15 is a sub-fund of the General Fund, the Combining Balance Sheet presents the combined actual amounts for the general fund to be included on the Governmental Funds Balance Sheet (Exhibit B-1). Prior year data is not required in the Combining Balance Sheet nor is it included in the Governmental Funds Balance Sheet.

This schedule is prepared with Column 1 representing the current year GAAP basis data for the Operating Fund (Fund 11–13) and Column 2 representing the current year GAAP basis data for the Blended Resource Fund (Fund 15). The two columns are added together to determine the current year Total General Fund Balance Sheet data, which is presented in Column 3.

The adjustment for the last state aid payment(s) of the fiscal year which is (are) not recognized as revenue on GAAP statements must be made before this balance sheet can be prepared. An adjustment to recognize revenue for the previous year deferred payment(s) received in July of the year being reported on must also be made. Refer to The Audit Program section I-8 for further discussion on the adjustment for the last state aid payment(s). Districts are permitted to have a negative unreserved fund balance resulting from the adjustment for the last state aid payment(s). (N.J.S.A. 18A:22-44.2)

The combined total general fund (Funds 11–13 and Fund 15) amounts from the Combining Balance Sheet flow to the General Fund column of the Governmental Funds Balance Sheet (Exhibit B-1).

The Schedule of Expenditures Allocated by Resource Type - Actual (Exhibit D-2 series) is prepared from the district’s records, and is the responsibility of the district. A separate schedule is prepared for each school in order to calculate surplus/carryover by funding source at the school level. The individual school-level carryovers are added together to determine the district-wide surplus/carryover by funding source. Comparative schedules are not required. These schedules are to be included in the Other Supplementary Information section of the ACFR.

Resources Types and Amounts

The resource types and amounts included on the Schedule of Expenditures Allocated by Resource Type- Actual represent the resources, including June 30 prior year fund balance reserved for encumbrances associated with the general fund contribution for the prior year, and any deferred revenue or carryover from the prior year which was budgeted in the ACFR year to fund the current year of the school two-year report on instructional priorities. The prior year encumbrances allocated to the restricted federal resources are a component of the prior year deferred revenue blended in the current year school-based budget. Schools not required to prepare school-based budgets in the prior year would include only the current year resource allocations on the school’s Schedule of Expenditures Allocated by Resource Type-Actual and would not have school-level fund balance reserved for encumbrances associated with the general fund contribution at the prior year end, or deferred revenue or carryover at the beginning of the current year.

Total Expenditures

Total expenditures reported on the Schedule of Blended Expenditures - Budget and Actual will be allocated to the various funding sources using the ratio of the individual resource to the total resources in that school. For example, if 25% of the resources blended in a school are from Title 1, then 25% of the expenditures in that school are Title 1 expenditures. There will not be any deferred revenue/carryover resulting from budgeted restricted state aids because restricted state aids are considered spent before the general fund contribution when allocating expenditures to state and local contributions to school based budgets. This results in any unspent state or local contributions to SBB falling to general fund surplus at June 30.

Calculation For the First Year of Implementation of SBB

The percent of resources calculation used to allocate expenditures to the various funding sources is detailed on the Schedule of Expenditures Allocated by Resource Type — Actual (Exhibit D-2 series). The “% of Total Resources” column is a calculation of what percentage each resource type is of the total resources blended in the school-based budget. The calculation is the individual resource amount divided by the total of all resources. “Total Expenditures Allocated as a % of Total Resources” is calculated as the total actual expenditures from the individual location’s Schedule of Blended Expenditures — Budget and Actual (Exhibit D-3) multiplied by the “% of Total Resources” for each funding type. “Total Surplus/Carryover” is the surplus/carryover for each resource type and is calculated as the difference between the “Resource Amount (Final Budget)” and the “Total Expenditures Allocated as a % of Total Resources.” For federal programs, “Total Surplus/Carryover” at June 30 is considered deferred revenue/carryover.

Calculation for Second and Subsequent Years of Implementing SBB

In the second and subsequent years of implementing SBB, schools will have general fund balance reserved for encumbrances and deferred revenue/carryover from June 30 of the prior year as well as current year resource allocations to be blended in their school-based budgets.

Once the prior year June 30 allocation is performed and the deferred revenue/carryover for the federal funding sources is calculated, the LEA has the option of reallocating the federal funds back to the schools on July 1^st in the amounts that were originally deferred, or reporting the amounts less the individual funding sources allocation of June 30 encumbrances as unexpended program funds at August 31 and including those amounts on the district’s carryover application as of August 31.

Since the state fiscal year is July 1 through June 30, and the federal grant period is September 1 through August 31, if the deferred revenue/carryover is reallocated back to the schools at July 1 of the subsequent year, an additional allocation similar to the one detailed above, in the section entitled “Calculation For the First Year of Implementation of SBB,” is required for July and August of the subsequent year to determine the various federal program expenditures to be included on the final expenditure report. If this approach is taken, the calculation of expenditures allocated by resource type should be prepared in two pieces; July and August; and, September 1 through June 30. These two pieces from the current fiscal year will be added together for ACFR reporting purposes. The July and August piece will be added to the prior year September through June piece for federal final expenditure reporting purposes.

If the prior year June 30 deferred revenue/carryover less the allocation of encumbrances is reported as unexpended program funds at August 31 and included on the district’s carryover application as of August 31 of the year subsequent to the current year, expenditures allocated to the various funding sources on June 30 of the subsequent year are calculated based on the ratio of total deferred revenue/carryover returned to the schools to fund the rollover of encumbrances plus the current year allocation to the total resources blended in the school-based budget. The total school-based expenditures are then multiplied by this percentage to determine the school-based expenditures allocated to the particular funding source. Once the total school-based budget expenditures allocated to the particular funding sources are determined, those expenditures are allocated to the deferred revenue/carryover/general fund reserve for encumbrances before being allocated to the current year allocation when determining deferred revenue/carryover at June 30 of the subsequent year. For example, if the Title 1 allocation was $10,000 for 20X3-X4 and the 20X2-X3 carryover was $1,000, total Title 1 expenditures are allocated first to the $1,000 carryover and then to the $10,000 current year allocation. Therefore, if the Title 1 allocated expenditures are $9,000, the $1,000 carryover was spent first and the remaining $8,000 was spent from the current year allocation. This process is repeated each June 30 to allocate expenditures, determine June 30 deferred revenue, and report carryover on August 31.

Operating Transfers and District-wide Summary

Once the total expenditures and encumbrances by resource type are determined, districts are required to adjust the corresponding revenue amounts recorded in Fund 15 for each SBB school. This is accomplished as part of the year-end closing procedures similar to the revenue adjustments on Exhibit C-2. An equal and corresponding operating transfer into Fund 15 should offset the GAAP basis expenditures plus the change in June 30 encumbrances reported for each funding source. This amount will be the same as the budgetary basis expenditures calculated on the encumbrance worksheet (Exhibit ENC-W/S). Federal deferred revenue/carryover associated with allocations to SBB schools should be reported in the special revenue fund at June 30 with a corresponding operating transfer into Fund 15.

Once a Schedule of Expenditures Allocated by Resource Type - Actual (Exhibit D-2 series) is prepared for each location, a district-wide summary is prepared. This summary provides the detail of the expenditures by funding source necessary to complete the Worksheet of Reserve for Encumbrances Allocated by Resource Type for Goods and Services Received after June 30, 20XX (ENC W/S). This worksheet is necessary to convert GAAP basis expenditures to the budgetary basis for inclusion in the Schedule of Expenditures of Federal Awards and State Financial Assistance (Exhibits K-3 and K-4, respectively), and to determine the amount of the operating transfers into Fund 15 to offset the GAAP basis expenditures plus the change in June 30 encumbrances. The district-wide summary is a summation of the amounts reported on the individual school calculations. This information is not to be recalculated for the district as a whole.

The Schedule of Expenditures Allocated by Resource Type - Actual (Exhibit D-2) is prepared on the modified accrual basis (with the exception of the deferred last state aid payment(s)), where encumbrances are not recorded as expenditures until the year the goods or services are received. The Budgetary Comparison Schedule - Special Revenue Fund - (Exhibit E-2) and the Single Audit Schedules (K Schedules) are prepared on a budgetary basis, where encumbrances are recorded as expenditures in the year the purchase order is written. Therefore, the Schedule of Expenditures Allocated by Resource Type - Actual must be adjusted for encumbrances (illustrated on the Encumbrance Worksheet) before preparing the Budgetary Comparison Schedule — Special Revenue Fund and the Single Audit Schedules. The Encumbrance worksheet is not required to be submitted with the district’s ACFR.

The Blended Resource Fund - Schedules of Blended Expenditures - Budget and Actual (Exhibit D-3 series) are prepared from the district’s records and are the responsibility of the district. A separate schedule for each school is prepared as well as a district-wide schedule. These schedules detail the budget and actual expenditures incurred to implement the current year of the two-year report on instructional priorities in the individual schools. These schedules are included as Other Supplementary Information in the ACFR (See Outline of ACFR). Comparative schedules are not required. 

The United States Department of Education (USDE) has given districts that have an approved schoolwide program the authority to combine certain federal resources. Funds are viewed as combined at the time they are expended. This is accomplished in New Jersey by requiring all school-based budgeting (SBB) schools to record school-based budget expenditures in the Blended Resource Fund (Fund 15). Fund 15 is considered a sub-fund of the general fund. Revenues are recorded in Fund 15 as operating transfers from the general (Fund 10) and special revenue funds (Fund 20).

A school that operates a schoolwide program may consolidate funds from other Federal education programs in addition to Title I, Part A funds to improve academic achievement throughout the school.  Specifically, section 1114(a) (3) (A) of Title I authorizes the Secretary of Education, through publication of a notice in the Federal Register, to permit schoolwide programs to consolidate funds from any other noncompetitive, formula grant program or any discretionary grant program administered by the Secretary of Education and to exempt schoolwide programs whose funds are consolidated, if the intent and purposes of the programs are met. Specifically excluded from this provision are Reading First and Emergency Impact Aid funds provided for a displaced student reported as a child with a disability. A schoolwide program school may not consolidate funds under Subpart I of Part B of Title I of the ESEA (Reading First) to establish reading programs for students in kindergarten through grade 3.  Certain other Federal programs administered by the Secretary of Education are limited in the amount of funds that can be consolidated/blended in a schoolwide program. Preparers and auditors should consult the July 2, 2004 Federal Register (Volume 69, Number 127), [updated link] for further guidance on schoolwide programs and blending.

The following programs are used in our D-3 illustration for blending in school-based budgets.

• Title I, Part A: Improving Basic Programs Operated by Local Education Agencies
• Title II, Part A: Teacher and Principal Training and Recruiting Fund
• Title II, Part D: Enhancing Education Through Technology
• Title IV, Part A: Safe and Drug-Free Schools and Communities
• Title V, Part A: Innovative  Programs

The preparer should be prepared to support and identify which funds were combined to support school-based budgets.

Preparers must ensure that the individual schools have approved schoolwide status if federal funds are being blended in the school’s school-based budget and that only allowable program funds are blended in the school-based budget.

Preparation

The Blended Resource Fund - Schedules of Blended Expenditures - Budget and Actual (Exhibits D-3a through 3c) detail the budgeted and actual expenditures incurred to implement the current year of the school two-year report on instructional priorities in the individual schools. This schedule should be prepared for each SBB school in the district. Our D-3 includes two schools for illustration purposes. Districts must include all SBB schools and are required to include the following columns:

• Original Budget
• Budget Transfers
• Final Budget
• Actual
• Variance Final to Actual

The original “budgeted” appropriations for districts required to use school-based budgeting are taken from the school-based budget section of the district’s current year final approved budget and should include the rollover of prior year encumbrances.  The final budget column is the budget adjusted for approved transfers. Preparers should refer to N.J.S.A. 18A:22-8.1 and N.J.A.C. 6A:23A-13.3 Transfers during the budget year for guidance regarding line item transfers.

Districts required to use school-based budgeting do not utilize the special schools series of account and budget numbers in school-based budgets, therefore any budgetary schedules or worksheets will not include these lines.

The original “budgeted” revenues for districts required to use school-based budgeting are reported as operating transfers below the expenditures, and are obtained from the school-based budget section of the district’s current year final approved budget. The budget transfers column is used to record the transfers and adjustments to the district’s final approved budget.

The “actual” revenues are adjusted (by closing entries) to equal the amount of revenues necessary to exactly offset the individual funding source’s proportionate share of expenditures and the change in June 30 encumbrances once that amount has been determined.  This amount will be the same as the budgetary basis expenditures calculated on the encumbrance worksheet (Exhibit ENC-W/S).  A detailed discussion of this calculation is contained in the directions for preparation of the D-2 Schedule. Preparers may access these instructions using the following link: “Preparing the Blended Resource Fund – Schedule of Expenditures allocated by Resource Type – Actual (Exhibit D-2 series).” [linking to older file version and incorrect title reference: change this? ]

After the individual school Blended Resource Fund - Schedule of Blended Expenditures - Budget and Actual (Exhibits D-3a through D-3b) are completed, a district-wide Blended Resource Fund - Schedule of Blended Expenditures - Budget and Actual (Exhibit D-3) must be prepared. The district-wide schedule (Exhibit D-3) is a summation of the individual school schedules (Exhibits D-3a through D-3b). Following the completion of these schedules, the Blended Resource Fund - Schedule of Expenditures Allocated by Resource Type - Actual (Exhibit D-2 series) can be prepared.

Preparers should be aware that for 2008-09 and beyond, districts should fully account for kindergarten costs in the general fund.After the start of the budget year, substantive line-item transfers and any appropriation of prior year carryover not anticipated in the original budget certified for taxes, require departmental approval.

Districts that maintain school based budgeting (SBB) are required to account for and report expenditures for the following preschool programs:

• Preschool - Full Day 3Yr and 4Yr - Regular
• Preschool - Spec. Ed. Inclusion Classroom Costs
• Preschool - Spec. Ed. Self Contained and Other Spec. Ed. Costs
• Preschool - Other Preschool Costs
• Preschool - All Programs (Combined)

At the bottom of the Preschool - All Programs summary schedule is a calculation of the Available and Unbudgeted Funds and the Actual Carryover as of June 30 (Line 9).

For each program, and for the district wide schedule, present a separate schedule with columns titled:

• Original Budget
• Budget Transfers
• Final Budget
• Actual
• Variance

Complete the Encumbrances Worksheet (Exhibit ENC-W/S) using the resource percentages and the GAAP expenditure amounts obtained from the calculation for Exhibit D-2 and the prior and current year encumbrances. This worksheet is necessary to convert GAAP expenditures to budgetary basis expenditures since special revenue fund schedules (i.e., Exhibits C-2, E-1) are reported on the budgetary basis where encumbrances are recorded as expenditures in the year the purchase order is issued.

• Use the general fund and special revenue fund amounts in total.
• Use each of the federal expenditure amounts from D-2.

Encumbrance Allocation

Encumbrances must be allocated to the various funding sources, at the school level, using the same methodology that was used to allocate GAAP basis expenditures (see Exhibit D-2 instructions). Encumbrances are not allocated to the individual restricted state funding sources because the total state contribution to SBB is considered fully spent in Fund 20 when the funds are contributed to Fund 15. At that point, the funds are considered available for the general fund for the purpose of implementing the school two-year report on instructional priorities. Encumbrances are allocated to the combined general fund contribution and state resources as one amount. The encumbrance allocations are performed on a school level using the “% of Total Resources” calculated for each school on the Exhibit D-2 series. Encumbrances are recorded as fund balance reserved for encumbrances in the Fund 15 column of the Combining Balance Sheet (Exhibit D-1). The Combining Balance Sheet is required to be included in the ACFR.

Once the school-level encumbrance allocations are performed, the individual funding type encumbrances from each school are added together to determine the district-wide encumbrances by funding type. The district-wide encumbrances by funding type are then added to the applicable district-wide GAAP expenditures and prior year district-wide encumbrances by funding type are subtracted to determine the budgetary basis expenditures to include on the line entitled, Contributions to SBB on the Special Revenue Fund Combining Schedule of Program Revenues and Expenditures - Budgetary Basis (Exhibit E-1).

The Worksheet of Reserve for Encumbrances Allocated by Resource Type (Exhibit ENC-W/S) has been included in this web illustration to provide sample calculations of the budgetary basis amount reported as Contribution to SBB based on the combined (General and Special Revenue Fund) state funding and each of the federal resources. This worksheet should not be included in the ACFR.

The sample encumbrance calculation includes an allocation of encumbrances to the Combined General Fund Contribution and State Resources. This was done to illustrate how the total encumbrances are allocated based on the “% of Total Resources.”

The Fund 15 encumbrances will be included in the ACFR in Fund 15 as fund balance reserved for encumbrances on the Balance Sheet. Encumbrances are not reported as expenditures in Fund 15.