Question: At year-end districts take a "blanket" budget resolution to the board to make transfers between expenditure classifications (to match actual expenditures). The Ed. Code references are 42600, 42601 and 85201. We have a different resolution for temporary "loans" between funds when needed. Our office feels that the blanket resolution does NOT cover changes (increases) to interfund transfers (7XXX); districts should take a separate resolution to the board. Some districts say it does cover changes to interfund transfers. What's correct?

Response: Ed. Code Sections 42600 and 42601 discuss the authority of the school board to make budget revisions to the district budget. Section 42600 addresses the process when the revisions are during the school year and 42601 allows a blanket resolution for all expenditure categories whose unaudited actuals exceed the current operating budget at year-end.

Ed. Code Section 42603 refers to fund transfers that are necessary because of cash flow issues. The board may adopt a resolution to loan available cash from one fund to another in order to make expenditure payments. The ed. code provides direction on the timeline for repayment of the cash funds.

The school district board adopts an annual budget which includes all revenue and expenditure allocations for all funds.  The year end budget revisions allow a redistribution of budgeted amounts to cover actual expenses.  In the case of interfund transfers used to support the operations of other funds or set aside resources for specific purposes, it may be considered good practice to notify the board of an increase or decrease in the current budget amounts.