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2019 school budget planning: a transitionary time

It’s that time again. School corporations across Indiana need to start developing 2019 school budgets.

Budget preparation can be a laborious and time-consuming process, but adding to the already complicated process for 2019 are the fund changes effective January 1, 2019. School boards will adopt 2019 budgets with two new funds: Education Fund and Operations Fund.  School budgets will no longer prepare general, capital projects, transportation, bus replacement (in addition to, if applicable:  historical society, racial balance and art association, public playground) funds budgets.  The Education Fund is to be used exclusively to pay expenses allocated to student instruction and learning. The Operations Fund will be used to track non-academic and non-debt expenses.  School corporations will continue to use existing debt funds to prepare 2019 budgets.  

One of the first steps school boards will take is to pass resolutions establishing the new Education and Operations Funds effective January 1, 2019.  Resolutions establishing these two new funds should be done no later than December 2018. 

As for specific 2019 budget preparation, budget forms are available through Gateway.  Slight revisions to the 2019 Budget Forms 2 and 4B reflect the transition to the new budgeted funds:

  • Budget Form 2 and the Current Year Financial Worksheet must be completed as if the Education and Operations Funds were in place for the second half of 2018.
  • Budget Form 2 also includes a new line item called “Other Revenue.” That line should reflect the amount school corporations intend to transfer from the Education Fund to the Operations Fund or vice versa. 
  • Form 4B includes an additional line item (Line 1a) labeled “School Transfer Out”, which  should be used to report the amount school corporations intend to transfer from the Education Fund to the Operations Fund or vice versa. 

School corporations will find that starting with a clearly defined budget plan for 2019 to prepare for the fund changes will lead to a smoother transition. 

For more information on this topic, or to learn how Baker Tilly municipal specialists can help, contact our team.

Baker Tilly Municipal Advisors, LLC is a registered municipal advisor and wholly-owned subsidiary of Baker Tilly Virchow Krause, LLP, an accounting firm.

Brock J. Bowsher
Director, MPA
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