Open Close Funds - School Business Advisory Services

Overview

The California Department of Education (CDE) requires Local Education Agencies (LEAs) to set up distinct Funds in their financial systems to administer the specific financial activities for the organization. LEAs are required (at a minimum) to record all financial transactions at the Fund level. Depending on the nature of the transactions, different Funds may be required. LEAs may Open or Close funds based upon the needs of the LEA consistent with all legal and operating requirements.

There is a formal process to open and close funds. If an LEA requires the opening of a new Fund, an LEA must first adopt a Board Resolution requesting the opening of a newly specified Fund. Likewise, if an LEA is interested in closing an existing Fund, the board must adopt a Board Resolution to also close the Fund.

Different numbers are allocated based upon the objective of the Fund. Education and other legal codes often define the objective of the Fund. SBAS has developed a list of commonly used Fund Numbers, Fund N ames, and the corresponding Education Codes associated with each. SBAS has also included sample templates of Board Resolutions to Open or Close individual Funds for your reference (See samples under Forms - General).

Steps to Open a New Fund

District Process

When a district determines a new fund is beneficial to the administration, the following steps below outline the process for opening a new fund.

Step 1 Verify with SBAS Finance Team that the Fund does not already exist.
Step 2 The district drafts a Board Resolution to Open a New Fund. This resolution is submitted to the school board for approval. Sample resolutions are available under Forms - General. It is important to ensure that the Resolution clearly states the Fund number, Fund Name and where any applicable Interest is to be deposited. Please be careful when drafting the resolution that all Educational Codes listed are applicable to the nature of the New Fund being requested.
Step 3 After approval of the resolution by the school board, send a copy of the approved resolution to the SBAS Finance Team.

SBCEO Process

Step 1 The SBAS Finance Team will then work with the Santa Barbara County Auditor’s Office to open a new fund. After the fund is active at the Auditor’s Office, the SBAS Finance Team can set up the fund in the Escape financial accounting software. This process generally takes 3-5 business days.
Step 2 After the fund is set up at the Auditor’s Office and in Escape, the SBAS Finance Team will notify the district that the New Fund is available for use

Steps to Close an Existing Fund

District Process

When a district determines a fund is no longer needed, the following steps below outline the process for closing an existing fund.

Step 1 The district will determine if an existing Fund is to be closed.
Step 2 The district will need to verify that the Fund being closed has a zero balance and make any necessary journal entries to bring that Fund balance to zero. If you need assistance, contact the SBAS Finance Team.
Step 3 The district drafts a Board Resolution to close an existing Fund. This resolution is submitted to the school board for approval. Sample Resolutions are available under Forms - General . It is important to ensure that the Resolution clearly states the Fund number, Fund Name and where any applicable Interest is to be deposited.
Step 4 After approval of the resolution by the school board, send a copy of the approved resolution to the SBAS Finance Team.

SBCEO Process

Step 1 The SBAS Finance Team will then work with the Santa Barbara County Auditor’s Office to close the existing fund. After the fund is inactive at the Auditor’s Office, then the SBAS Finance Team will close the fund in the Escape financial accounting software. This process generally takes 3-5 business days.
Step 2 After the fund is closed at both the Auditor’s Office and in Escape, the SBAS Finance Team will notify the district.

Revolving Fund Questions & Answers

What is a Revolving Cash Fund?
How do I account for a Revolving Cash Fund?

What is a Revolving Cash Fund?

How do I account for a Revolving Cash Fund?

Per the Standardized Account Code System (SACS), Object 9130 has been established the Revolving Cash Account. It is a recording of the establishment and maintenance of a cash account by the chief accounting officer or other designated official of the LEA. This account is similar in use and control to accounts known as petty cash funds. Once this account is established, it should be carried indefinitely in the general ledger and shown on all balance sheets and budgets until it is abolished. The amount recorded will vary only through an increase or decrease in the total amount approved for the account. The revolving cash account is a reserve of cash in an already established fund and is not to be considered or accounted for as a separate fund or entity.