HomeMy WebLinkAboutFund balance policy--finalCreated November 2017
KITTITAS COUNTY PUBLIC HEALTH DEPARTMENT
DEPARTMENT POLICY & PROCEDURES
Fund Balance Policy
I. Purpose
It is the purpose of this policy to establish guidelines and a process for maintaining the four main
pieces of the department’s fund balance: Operating Expenses (OPEX) Reserve, Tuberculosis,
Capital Assets, and Unassigned, which ensures accountability and the ability to cover current and
future department needs.
II. Policy
A. OPEX Reserve
1. The department will make every effort to keep the value, at a minimum, of two
month’s operating costs to cover the department’s delayed payable expenses. This
reserve also meets the county’s requirement in the fund balance policy and is
considered to be a best practice.
B. Tuberculosis
1. The health department is required by law to assure proper care of people infected with
tuberculosis. The county is required to make a contribution to the tuberculosis
program every year, which can be used for current and/or future expenses. This
restricted money can only be used for related tuberculosis expenditures, and cannot
be used to cover general department costs. The maximum amount to be accrued in
this fund is $80,000.00.
C. Capital Assets
1. The department is required to have a restricted Equipment Replacement Revolving
(ERR) portion of the fund balance. This money is restricted for the use of replacing
any capital equipment the department has such as vehicles, vaccine refrigerator, GPS
units, etc. This restricted money can only be used for capital asset replacement, and
cannot be used to cover general department costs. The vaccine refrigerator has a ten
year expected life. Seven years or 100,000 miles will be used as a replacement factor
for all vehicles, in determining the amount needed in the fund.
D. Unassigned
1. The value of the department’s unassigned fund balance is the total fund balance less
OPEX reserve, tuberculosis, and capital asset balances. This unassigned fund balance
can be used to cover general department costs such as unanticipated costs or to reduce
the dependency on the county general fund contribution during budget preparation.
III. Procedures
A. The procedures for the fund balance policy are as follows:
1. OPEX Reserve
a. The Fiscal Analyst will calculate the amount of two month’s operating
expenses needed to be held in reserve. This is done by using 1/6 of the
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department’s annual budgeted expenditures, less indirect expenses. The
amount can be rounded up for simplicity.
b. The value of the OPEX reserve will be updated at least once every two years
by the Fiscal Analyst to accommodate for inflation, costs increases, and
staffing changes.
c. The Fiscal Analyst will record the OPEX reserve value in the Fund Balance
tracking spreadsheet.
2. Tuberculosis
a. The Fiscal Analyst will transfer the surplus of tuberculosis revenues and
tuberculosis county contribution after program expenditures are covered into
the tuberculosis restricted account during the year end closing process. This is
done by a journal entry in Quickbooks.
b. The Fiscal Analyst will work with the county’s Budget and Finance Manager
to transfer the balance in Cayenta to ensure proper reconciliation between
systems.
c. The Fiscal Analyst will record the transfer amount in the Fund Balance
tracking spreadsheet in order to track the balances on a yearly basis.
3. Capital Assets
a. The Fiscal Analyst will track the purchase price, estimated useful life, and
estimated replacement value per asset in the Capital Asset tracking
spreadsheet. The spreadsheet should be updated when new capital assets are
purchased or surplused.
b. The Fiscal Analyst will determine how much needs to be transferred from the
unassigned fund balance annually in order to ensure funds are available for
when an asset needs to be replaced. The capital assets spreadsheet has the
current calculation for annual transfer value. The Fiscal Analyst will need to
update the formula if new assets are purchased or surplused. Every effort
should be made to transfer the appropriate annual amount; however there may
be times when the value of the unassigned fund balance may not be sufficient
for the transfer.
c. The Fiscal Analyst will track the transfers in the Fund Balance tracking
spreadsheet.
d. The Fiscal Analyst will work with the Budget and Finance Manager to
transfer the balance in Cayenta.
4. Unassigned Fund Balance
a. The value of the unassigned fund balance will be available to the Fiscal
Analyst in the Fund Balance tracking spreadsheet. The value of the
unassigned fund balance will need to be monitored on an annual basis.
b. The department can elect or be directed by the Board of County
Commissioners to use some of the unassigned fund balance if needed during
the annual budget process or for unanticipated or unbudgeted expenditures,
but caution should be used so the balance isn’t utilized completely.
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IV. Applicability
A. This policy applies to the Fiscal Analyst, Public Health Administrator, and Board of
County Commissioners (BOCC).
B. This policy is effective on the date of approval by the BOCC.
C. This policy is subject to review at least every five (5) years.
Date of BOCC approval:
Public Health Administrator Date
Health Officer Date
Chair of the Board of County Commissioners Date