ESA Fund Balance Limitation
Ark.
Code Ann. § 6-20-2305(b)(4)(E)(ii) states as follows:
A school district that on June 30 of any year has an
enhanced student achievement funding balance in excess of fifteen percent (15%)
of the school district's current year enhanced student achievement funding
allocation shall reduce its total enhanced student achievement funding balance
by at least ten percent (10%) in each year that follows so that by June 30 of
each year, the school district has a balance of no more than fifteen percent
(15%) of the school district's current year enhanced student achievement
funding allocation
Ark.
Code Ann. § 6-20-2305(b)(4)(E)(v)(b) states as follows:
If a school district fails to comply with the
requirements of this subdivision (b)(4)(E) during a school year, the Division
of Elementary and Secondary Education may in the following school year withhold
from that school district's national school lunch state categorical funding
allocation an amount equal to the amount required to be spent by the school
district in order to be in compliance with the requirements of this subdivision
(b)(4)(E).
Categorical Fund Balance Limitation
Ark. Code Ann. § 6-20-2305(e)(2) states as follows:
On June 30, 2012, and on June 30 of each school year
thereafter, if the total aggregate balance of all state categorical fund
sources exceeds twenty percent (20%) of the school district's total aggregate
annual state categorical fund allocations for the current school year, the
school district shall reduce the total balance by ten percent (10%) each year
until the school district's June 30 balance of aggregate annual categorical
fund sources is twenty percent (20%) or less of the total aggregate annual state
categorical fund allocations for the current school year.
Ark. Code Ann. § 6-20-2305(e)(4)(B) states as follows:
If a school district fails to comply with the requirements
of this subsection during a school year, the Division of Elementary and
Secondary Education may in the following school year withhold from that school
district's categorical funding allocation an amount equal to the amount
required to be spent by the school district in order to be in compliance with
the requirements of this subsection.
A monthly report listing each district’s Categorical Expenditures and Fund Balances YTD (updated
every second Saturday) can be found on the APSCN - District Warehouse Page (Reports > District
Warehouse YTD Financials Reports > Categorical).
Net Legal Balance Limitation
Pursuant
to Ark. Code Ann. § 6-20-2210, established by Act 1105 of 2017, if at the close
of the fiscal year a public school district has a net legal balance that
exceeds twenty percent (20%) of the public school district’s current year net
legal balance revenues, the public school district shall within five (5) years
reduce its net legal balance to no more than twenty percent (20%) of the public
school district’s current year net legal balance revenue.
A
public school district may reduce its excess net legal balance by:
(1)
Transferring funds into the public school district’s building fund to be used
for construction, renovation, repair or other planned building fund expenditure
or project; or
(2)
Spending funds on pre-kindergarten programs, remediation programs, career and
technical education or workforce readiness programs, or any other program or for
any other purpose authorized by law.
The
Division shall monitor on a yearly basis each public school district’s
compliance with the net legal balance requirements and withhold subsequent
state funding from a public school district for each year the district fails to
make required reductions.
A
report listing each district’s 20% net legal carry forward balance can be found
on the APSCN - District Informational Reports page. (Reports > District Informational Reports >
Net Legal Balance Act 1105).
To monitor annually, the department compares closing
balances from one year to the next.