Yes this is a game that is played. I tauhht several school districts how to do it for very beneficial purposes.
I taught schoold districts how to budget the Capital Reserve Fund to allow for the flexibility to meet unexpected expenditures in the genrral fund.
When money is transferred to the Capital Reserve Fund it cannot be transferred back to the General Fund.
However their are expenditures that can be paid from either fund.
For example, school busses could be purchased in the General Fund or the Capital Reserve Fund. Same with major repairs such as HVAC systems, roof replacement or repair.....
It is smart to transfer money to the CRF and budget it long term.
I’ll be honest, we also used it to hide the money set aside for teacher’s salary increases so they didn’t see the extra money during negotiations.
It is far better to use the CRF as a tool to level the wild swings in budgets and prevent huge tax increases in any one year.
It’s good to have the CFR as a contingency fund in the event a disaster suddenly breaks the General Fund Budget.
Yes it is open to abuse. That’s why I always recommended budgeting the CRF. I would have the administration look at all buildings and based upon expected life of building components and systems, budget long term for future expenditures.
A prudent person would do the same in their own life. If you know you need a new roof in three years, or a new car, you save and set aside money for it ahead of time.
I’ll be honest, we also used it to hide the money
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Somehow
” honesty”
and
” hiding money”
just doesn’t sound as good as you thought.
.
A prudent person would do the same in their own life
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What ?
Hide money to grift more out of those footing the bill ?
Hardly what a prudent person would do,,
More like what a griffting
con artist would do.