The Seattle Colleges will maintain a 5 to 10% reserve of the aggregate total of each fund’s annual expenditure budget. This reserve will be maintained by each of its operating units, Seattle College District Office, North Seattle College, Seattle Central College, South Seattle College, and Seattle Vocational Institute.

Reserve funds may be used to help the Colleges and District deal with fluctuation in revenue or expenditure amounts in a given fiscal year, provide funding for special one-time expenditures for equipment, program start-up, and other costs; and ensure that adequate funds are available for the Districts working capital needs.

It is the intent that this reserve should include all operating and non-operating local funds within the District. Excluded from the calculation for reserves would be Capital Funds, and Trust and Agency Funds.

A reserve account will be maintained in each fund for each of the District operating units, and reserve funds will be transferred from budgets within that fund within that College or operating unit to be placed in the reserve. Transfers in and out of the reserve fund would have to be approved by the College President or Chancellor. The intent is to maintain a District-wide reserve, but in no means intends to maintain a 5 to 10% reserve in each fund in each operating unit; but an accumulated reserve of 5 to 10% across the District. It is important that each of the operating units maintains a target for its cash reserve. The reserve is variable amount to allow analysis by College and District personnel to determine the specific needs of each of the operating units for reserve balances.

Funds placed in reserve must be clearly surplus and not committed for any specific purpose. Operating budget funds roll up into one account balance at the end of the year. If there’s a surplus in the operating balance, it could be placed in reserve. Non-operating funds, grants and contracts, enterprise funds, lab fees, community service, resale budgets, etc. these programs activities and their budgets are stand-alone, and may either be in a positive or a negative balance at the end of any fiscal year. Surpluses in these accounts are generally created either by generating more revenue than expected or budgeted or by spending less than originally budgeted.

In any given year, non-operating budgets grants and contracts, enterprise funds, lab fees, self-support programs, resale budgets, etc., may be in a deficit balance. It is important that these budgets be offset or brought back to zero before funds are placed in the reserve. Therefore it is important that all deficit budgets be zeroed out before the end of the next fiscal year, unless specifically approved to be carried forward for more than one fiscal year by the Chancellor. This will ensure that actual reserves identified by the District are not being offset by deficit budgets somewhere else, in that fund or another fund.

Companion Document : Pol608
Adoption Date : 0001/01/01
Revision Date : 2014/02/14