800 BUSINESS PROCEDURES

800 Statement of Guiding Principles for Business Procedures

F. C. SCHOOL BOARD POLICIES
 
Series 800 - Business Procedures
 
Statement of Guiding Principles for Business Code No. 800
Procedures
 
The Board of Directors recognizes that its primary purpose is to provide the best education possible within the limits of the established curriculum and the financial ability of the school district.  The Board of Directors also recognizes its deep responsibility to the citizens of the school district for the efficient use of public funds.  It shall, therefore, be the duty of the Board of Directors (1) to see to it that public funds are used as effectively as possible in the service of our district's children; and (2) to report to the public regularly about such use.
 
 
Adoption: 3-13-89
                                 
Review: 3-14-94   7-12-99    07-08-10 1-11-16
                                                  
Revision:
                                                                                                  
Cross References:
 
Legal References:   279.34; 280.3; 280.12; 379.35

801

801.1 Planning the Budget

F. C. SCHOOL BOARD POLICIES
 
Series 800 - Business Procedures
 
Planning the Budget                                   Code No. 801.1
 
Planning the budget document shall be a continuous process and shall involve long-term thought, study, and deliberation by the Superintendent of Schools, the Board Secretary/Business Manager, the Board of Directors, the Administrative staff, the faculty, and the citizens of the school district.
 
     Planning shall be done in three major phases:
 
          1.  Assessment of the educational program and its impact upon the budget;
 
          2.  Assessment of the district's estimated income;
 
          3.  Assessment of the district's estimated expenditures.
 
 
 
Adoption: 3-13-89
                                         
Review: 3-14-94   7-12-99    07-08-10 1-11-16
                                                               
Revision:
                                                                                                 
Cross References:
 
Legal References:  Chapters 8; 24; 298; 442

801.2 Preparation of the Budget Document

F. C. SCHOOL BOARD POLICIES

Series 800 - Business Procedures
 
Preparation of the Budget Document Code No. 801.2
 
The preparation of the formal budget shall be the responsibility of the Board Secretary/Business Manager.  At its regular meeting in March, the superintendent shall present the board a preliminary projection of the needs of the school district for the ensuing fiscal year.  A complete budget shall be prepared by the Board Secretary/Business Manager and presented to the board for certification at the board's regular meeting in April, but not later than April 15.
 
 
Adoption: 3-13-89
                                   
Review: 3-14-94   7-12-99   07-08-10 1-11-16
                           
Revision:  8-10-92
                                                                       
Cross References: 801.3; 801.4; 801.5; 801.6
 
Legal References:   Chapters 24; 257; 273; 442

801.3 Requirements of the Budget Document

F. C. SCHOOL BOARD POLICIES

Series 800 - Business Procedures
 
Requirements of the Budget Document Code No. 801.3
 
     The budget document must include the following information:
 
  1. The estimated amount of income for the several funds from sources other than taxation;
  2. The amount proposed to be raised by taxation;
  3. The amount proposed to be expended in each and every fund and for each and every purpose during the ensuing fiscal year;
  4. A comparison of the amounts proposed to be expended with amounts expended for like purposes during the two preceding years;
  5. Fully itemized and classified estimates for each particular class of proposed expenditure, showing under separate headings the amounts required, in such manner and form as prescribed by the Department of Management.
The budget document shall also contain a brief explanatory section to show any program changes for the ensuing year that may be responsible for changes in expenditures.
 
The final detailed budget document will be presented to the board no later than the regular August board meeting.
 
 
Adoption: 3-13-89
                                 
Review: 7-17-89    7-12-99   07-08-10 1-11-16
                                                                  
Revision:  3-14-94
                                                                                    
Cross References:
 
Legal References:  24.3; 24.5; 298.1; Chapter 442 

801.4 Publication of the Budget

F. C. SCHOOL BOARD POLICIES
 
Series 800 - Business Procedures
 
Publication of the Budget                             Code No. 801.4
 
The Board of Directors shall adopt, for publication, an approved budget* for the ensuing year.  This approved budget shall be filed with the secretary of the board at least 20 days before April 15 of each year.
 
The Board of Directors shall cause this approved budget to be published in the legal newspaper of the school district, together with the time and place established for public review of the budget.
 
 
 *Note:   This refers to certified budget, not the educational program plan with its corresponding line item appropriations.
 
 
 
Adoption: 3-13-89
                                 
Review: 3-14-94  7-12-99    07-08-10 1-11-16
                                                               
Revision:  8-10-92
                                                                                   
Cross References:
 
Legal References:    24.9; Chapter 442; Section 618.14

801.5 Public Review of the Budget

F. C. SCHOOL BOARD POLICIES
 
Series 800 - Business Procedures
 
Public Review of the Budget                           Code No. 801.5
 
The Board of Directors shall establish and publish the time and place for public review of the budget document.  This public hearing shall be held no later than April 15 of each year, and a notice of the hearing shall be published at least 10 days in advance.
 
The verified proof of the publication of such notice, together with the certified budget, shall be filed in the office of the county auditor and preserved by that office.  No levy shall be valid unless and until such notice is published and filed.
 
Note: Although Iowa Code Sections 24.27 through 24.89 permit citizen groups of the district to file a formal protest against a budget adopted by the board, at least three of the persons filing such a complaint must have filed a joint written objection at or before the budget hearing of the board for the protest to be valid, and for the county auditor to pursue the protest.
 
 
 
Adoption: 3-13-89
                                 
Review: 3-14-94   7-12-99   07-08-10 1-11-16
                                                     
Revision:  8-10-92
                                                                                   
Cross References: 204.16
   
Legal References:   24.9 through 24.11; Chapter 442; AC 618.14

801.6 Budget as a Spending Plan

F.C. SCHOOL POARD POLICIES

 
Series 800 - Business Procedures
 
Budget Adoption and Certification                 Code No. 801.6
 
The board shall adopt and certify a budget for the operation of the school district to the county auditor by April 15.  It shall be the responsibility of the board secretary to file the adopted and certified budget with the county auditor and other proper authorities.
 
 
Adoption:  3-13-89
                                    
Review: 3-14-94 1-11-16 7-12-99   07-08-10
                                                                  
Revision:  8-10-92
                                                                                   
Cross References:
            
Legal References:  Iowa Code 24; 257 (1991); 24.17 (Iowa Acts, 1992

801.7 Budget as a Spending Plan

F. C. SCHOOL BOARD POLICIES

Series 800 - Business Procedures
 
Budget as a Spending Plan Code No. 801.7
 
The final certified budget shall be considered as the authority for all expenditures to be made during the fiscal year.
 
Any expenditure to be made that exceeds the final certified budget shall be made only in accordance with procedures specified in the Code of Iowa.  These procedures permit the expenditure of unanticipated income from sources other than taxation during a fiscal year by amending the budget.  The Board of Directors, upon approving an amended budget, shall file and publish it and give notice of a public hearing within 20 days after approving an amended budget.
 
 
Adoption:  6-24-75
                               
Review:  3-14-94    7-12-99    07-08-10 1-11-16
                                                 
Revision:
                                                                                                    
Cross References: 
  
Legal References:  Chapters 24.9; 24.14; 442.9

801.8 Transfer of Inactive Account Funds

F. C. SCHOOL BOARD POLICIES
 
Series 800 - Business Procedures
 
Transfer of Inactive Account funds Code No. 801.8
 
When the necessity for a fund has ceased to exist, the balance may be transferred to another fund or account by board resolution.  School district monies received without a designated purpose may be transferred in this manner.  School district monies received for a specific purpose or upon vote of the people may only be transferred, by board resolution when the purpose for which the monies were received has been completed.  Voter approval is required to transfer monies to the general fund from the capital projects fund and debt service fund.
 
It shall be the responsibility of the board secretary to make recommendations to the board regarding transfers and to provide the documentation justifying the transfer.
 
 
Adoption: 3-13-89
                                
Review: 3-14-94  7-12-99   07-08-10 1-11-16
 
Revision: 10-12-06 802.4  Sale of Bonds
 
Cross References:   802.8  Financial Records:801.3  Budget 
 
Legal Reference: Iowa Code §24.21-.22; 279.8; 298A (1997).

801.9 Classification of Accounts

F. C. SCHOOL BOARD POLICIES

Series 800 - Business Procedures
 
Classification of Accounts                           Code No. 801.9
 
Revenues and expenditures of the school district shall be properly classified in the accounting system as general fund or schoolhouse fund.  The general fund and schoolhouse fund may be comprised of several subaccounts at the discretion of the superintendent or board secretary
  
 
Note:   School districts and area education agencies are required to utilize the Uniform Financial Accounting for Iowa School Districts and Area Education Agencies in organizing their accounting systems.  This document provides many options for the school district to choose from, such as cash basis accounting or accrual accounting and methods for determining subaccounts within the two funds.
 
 
 
Adoption: 3-13-89
                               
Review:  3-14-94   7-12-99    07-08-10 1-11-16
             
Revision:
                                                                                                   
Cross References:
 
Legal References:  11.23; 256.8(18); 291.13 (1989); 281; AC 12.3(1) 

802

802.1 Local, State, and Federal Income

F. C. SCHOOL BOARD POLICIES
 
Series 800 - Business Procedures
 
Local, State, and Federal Income                       Code No. 802.1
 
All income received by the school district shall be classified under the official accounting system and be placed in the hands of the Secretary of the Board of Directors to be deposited into the official school district depository as set by the Board of Directors and in accordance with the laws of the State of Iowa.
 
 
Adoption: 6-24-75
                                 
Review: 3-14-94 7-12-99    08-12-10  2-8-16
                                                     
Revision:
                                                                                                  
Cross References: 802.7
 
Legal References:  Chapters 291.12; 452; 453

802.2 Tuition Fees

F. C. SCHOOL BOARD POLICIES
 
Series 800 - Business Procedures
 
Tuition Fees                                         Code No. 802.2 
 
The Board of Directors shall, upon the recommendation of the superintendent of schools, adopt a schedule of tuition fees for the school district's adult education and summer school programs for the ensuing school year.
 
For nonresident students attending elementary or secondary school through open enrollment during the regular school year, the fee shall be the students resident district cost  or the receiving district cost per student, whichever is lower.
 
 
Adoption: 3-13-89
                                 
Review: 7-17-89    7-12-99   08-12-10  2-8-16
                                
Revision: 3-14-94
                                                                                    
Cross References:501.6; 602.5; 602.11
    
Legal References:  282.6; 282.24; 282.2; 442.4; AC 282 

802.3 Educational Material Fees

F. C. SCHOOL BOARD POLICIES
 
Series 800 - Business Procedures
 
Educational Material Fees                             Code No. 802.3
 
The superintendent of schools or his designated officer shall set up the necessary regulations to administer educational fees.  The Board of Directors shall officially adopt a fee schedule prior to each school year.  The fees will be approved annually.
 
 
 
 
 
Adoption:  6-24-75
                                 
Review: 7-17-89  7-12-99     08-12-10  2-8-16
                                                              
Revision: 3-14-94 2-8-16
 
Cross References:
 
Legal References:   A.G. Ruling

802.4 Sale of Bonds

F. C. SCHOOL BOARD POLICIES
 
Series 800 - Business Procedures
 
Sale of Bonds Code No. 802.4
 
The board may conduct an election for the authority to issue bonded indebtedness.  Revenues generated from an approved bond issue shall be used only for the purpose stated on the ballot.  Once the purpose on the ballot is completed, any balance remaining in a capital projects fund may be retained for future capital projects in accordance with the purpose stated on the ballot or any remaining balance may be transferred by board resolution to the debt service fund or the physical plant and equipment levy fund.  Voter approval is required to transfer monies to the general fund from the capital projects fund.
 
Revenues received from the issuing of bonded indebtedness shall be deposited into the capital projects fund.
 
 
 
Adoption: 3-13-89
                                 
Review: 3-14-94   7-12-99   08-12-10 2-8-16
                                                                
Revision: 10-12-06
                                                                                    
Cross Reference:
 
Legal References: Iowa Code §§ 74-76; 278.1; 298; 298A (1997).

802.4-1 Post Issuance Compliance Policy for Tax-Exempt Obligations

F.C SCHOOL BOARD POLICIES
 
Series 800 – Business Procedures
 
Post-Issuance Compliance Policy for Tax-Exempt Obligations    Code No. 802.4-1
 
1. Compliance Coordinator:
 
a) The Board Secretary/Business Manager ("Coordinator") shall be responsible for monitoring post-issuance compliance.
 
b) The Coordinator will maintain a copy of the transcript of proceedings in connection with the issuance of any tax-exempt obligations.  Coordinator will obtain such records as are necessary to meet the requirements of this policy.
 
c) The Coordinator shall consult with bond counsel, a rebate consultant, financial advisor, IRS publications and such other resources as are necessary to understand and meet the requirements of this policy.
 
d) Training and education of Coordinator will be sought and implemented upon the occurrence of new developments and upon the hiring of new personnel to implement this policy.
 
2.  Financing Transcripts.  The Coordinator shall confirm the proper filing of an 8038 Series return, and maintain a transcript of proceedings for all tax-exempt obligations issued by the Forest City Community School District, including but not limited to all tax-exempt bonds, notes and lease-purchase contracts.  Each transcript shall be maintained until eleven (11) years after the tax-exempt obligation it documents has been retired.  Said transcript shall include, at a minimum:
 
a) Form 8038s; 
b) minutes, resolutions, and certificates; 
c) certifications of issue price from the underwriter; 
d) formal elections required by the IRS; 
e) trustee statements; 
f) records of refunded bonds, if applicable; 
g) correspondence relating to bond financings; and 
h) reports of any IRS examinations for bond financings.     
 
3.  Proper Use of Proceeds.  The Coordinator shall review the resolution authorizing issuance for each tax-exempt obligation issued by the Forest City Community School District, and that the Forest City Community School District shall:
 
a) obtain a computation of the yield on such issue from the Forest City Community School District’s financial advisor;  
 
 
 
Post-Issuance Compliance Policy for Tax-Exempt Obligations   (Code No. 802.4-1 cont.)
 
b) create a separate Project Fund (with as many sub-funds as shall be necessary to allocate proceeds among the projects being funded by the issue) into which the proceeds of issue shall be deposited; 
 
c) review all requisitions, draw schedules, draw requests, invoices and bills requesting payment from the Project Fund; 
 
d) determine whether payment from the Project Fund is appropriate, and if so, make payment from the Project Fund (and appropriate sub-fund if applicable); 
 
e) maintain records of the payment requests and corresponding records showing payment;
 
f) maintain records showing the earnings on, and investment of, the Project Fund;
 
g) ensure that all investments acquired with proceeds are purchased at fair market value;
 
h) identify bond proceeds or applicable debt service allocations that must be invested with a yield-restriction and monitor the investments of any yield-restricted funds to ensure that the yield on such investments does not exceed the yield to which such investments are restricted; 
 
i) maintain records related to any investment contracts, credit enhancement transactions, and the bidding of financial products related to the proceeds;
 
4.  Timely Expenditure and Arbitrage/Rebate Compliance.  The Coordinator shall review the Tax-Exemption Certificate (or equivalent) for each tax-exempt obligation issued by the Forest City Community School District and the expenditure records provided in Section 2 of this policy, above, and shall:
 
a) monitor and ensure that proceeds of each such issue are spent within the temporary period set forth in such certificate; 
 
b) if the Forest City Community School District does not meet the “small issuer” exception for said obligation, monitor and ensure that the proceeds are spent in accordance with one or more of the applicable exceptions to rebate as set forth in such certificate;
 
c) not less than 60 days prior to a required expenditure date confer with bond counsel and a rebate consultant if the Forest City Community School District will fail to meet the applicable temporary period or rebate exception expenditure requirements of the Tax-Exemption Certificate; and 
 
Post-Issuance Compliance Policy for Tax-Exempt Obligations   (Code No. 802.4-1 cont.)
 
d) in the event the Forest City Community School District fails to meet a temporary period or rebate exception:
 
i. procure a timely computation of any rebate liability and, if rebate is due, file a Form 8038-T and arrange for payment of such rebate liability; 
 
ii. arrange for timely computation and payment of “yield reduction payments” (as such term is defined in the Code and Treasury Regulations), if applicable.
 
5.  Proper Use of Bond Financed Assets.  The Coordinator shall:  
 
a) maintain appropriate records and a list of all bond financed assets.  Such records shall include the actual amount of proceeds (including investment earnings) spent on each of the bond financed assets; 
 
b) with respect to each bond financed asset, the Coordinator will monitor and confer with bond counsel with respect to all proposed:
 
i. management contracts,
ii. service agreements,
iii. research contracts,
iv. naming rights contracts,
v. leases or sub-leases,
vi. joint venture, limited liability or partnership arrangements,
vii. sale of property; or
viii. any other change in use of such asset;
 
c) maintain a copy of the proposed agreement, contract, lease or arrangement, together with the response by bond counsel with respect to said proposal for at least three (3) years after retirement of all tax-exempt obligations issued to fund all or any portion of bond financed assets; and
 
d) In the event the Forest City Community School District takes an action with respect to a bond financed asset, which causes the private business tests or private loan financing test to be met, the Coordinator shall contact bond counsel and ensure timely remedial action under IRS Regulation Sections 1.141-12.
 
6.  General Project Records.  For each project financed with tax-exempt obligations, the Coordinator shall maintain, until three (3) years after retirement of the tax-exempt obligations or obligations issued to refund those obligations, the following:
 
a) appraisals, demand surveys or feasibility studies,
b) applications, approvals and other documentation of grants,
c) depreciation schedules,
Post-Issuance Compliance Policy for Tax-Exempt Obligations   (Code No. 802.4-1 cont.)
 
d) contracts respecting the project.
 
7.  Advance Refundings. The Coordinator, shall be responsible for the following current, post issuance and record retention procedures with respect to advance refunding bonds:
 
a) Identify and select bonds to be advance refunded with advice from internal financial personnel, and a financial advisor;
 
b) The Coordinator shall identify, with advice from the financial advisor and bond counsel, any possible federal tax compliance issues prior to structuring any advance refunding;
 
c) The Coordinator shall review the structure with the input of the financial advisor and bond counsel, of advance refunding issues prior to the issuance to ensure (i) that the proposed refunding is permitted pursuant to applicable federal tax requirements if there has been a prior refunding of the original bond issue; (ii) that the proposed issuance complies with federal income tax requirements which might impose restrictions on the redemption date of the refunded bonds; (iii) that the proposed issuance complies with federal income tax requirements which allow for the proceeds and replacement proceeds of an issue to be invested temporarily in higher yielding investments without causing the advance refunding bonds to become “arbitrage bonds”; and (iv) that the proposed issuance will not result in the issuer’s exploitation of the difference between tax exempt and taxable interest rates to obtain an financial advantage nor overburden the tax exempt market in a way that might be considered an abusive transaction for federal tax purposes.
 
d) The Coordinator shall collect and review data related to arbitrage yield restriction and rebate requirements for advance refunding bonds. To ensure such compliance, the Coordinator shall engage a rebate consultant to prepare a verification report in connection with the advance refunding issuance. Said report shall ensure said requirements are satisfied. 
 
e) The Coordinator shall, whenever possible, purchase SLGS to size each advance refunding escrow. The financial advisor shall be included in the process of subscribing SLGS. To the extent SLGS are not available for purchase, the Coordinator shall, in consultation with bond counsel and the financial advisor, comply with IRS regulations.
 
f) To the extent as issuer elects to the purchase a guaranteed investment contract, the Coordinator shall ensure, after input from bond counsel, compliance with any bidding requirements set forth by the IRS regulations.
 
g) In determining the issue price for any advance refunding issuance, the Coordinator shall obtain and retain issue price certification by the purchasing underwriter at closing.
Post-Issuance Compliance Policy for Tax-Exempt Obligations    (Code No. 802.4-1 cont.)
 
h) After the issuance of an advance refunding issue, the Coordinator shall ensure timely identification of violations of any federal tax requirements and engage bond counsel in attempt to remediate same in accordance with IRS regulations.
 
8.  Continuing Disclosure. The Coordinator shall assure compliance with each continuing disclosure certificate and annually, per continuing disclosure agreements, file audited annual financial statements and other information required by each continuing disclosure agreement.  The Coordinator will monitor material events as described in each continuing disclosure agreement and assure compliance with material event disclosure.  Events to be reported shall be reported promptly, but in no event not later than ten (10) Business Days after the day of the occurrence of the event.  Currently, such notice shall be given in the event of:
 
a) Principal and interest payment delinquencies;
 
b) Non-payment related defaults, if material;
 
c) Unscheduled draws on debt service reserves reflecting financial difficulties;
 
d) Unscheduled draws on credit enhancements relating to the bonds reflecting financial difficulties;
 
e) Substitution of credit or liquidity providers, or their failure to perform;
 
f) Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax-exempt status of the bonds, or material events affecting the tax-exempt status of the bonds;
 
g) Modifications to rights of Holders of the Bonds, if material;
 
h) Bond calls (excluding sinking fund mandatory redemptions), if material, and tender offers;
 
i) Defeasances of the bonds;
 
j) Release, substitution, or sale of property securing repayment of the bonds, if material;
 
k) Rating changes on the bonds;
 
l) Bankruptcy, insolvency, receivership or similar event of the Issuer;
 
 
Post-Issuance Compliance Policy for Tax-Exempt Obligations   (Code No. 802.4-1 cont.)
 
m) The consummation of a merger, consolidation, or acquisition involving the Issuer or the sale of all or substantially all of the assets of the Issuer, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; and
 
n) Appointment of a successor or additional trustee or the change of name of a trustee, if material.
 
 
 
Adoption  11-12-12                                 Cross References:
Review    7-17-89   3-14-94  7-12-99  2-8-16              Revenue                                    
Revision  8-10-92                                 Treasurer
 

802.4-1 Post-Inssuance Compliance Policy for Tax-Exempt Obligations

F.C SCHOOL BOARD POLICIES
 
Series 800 – Business Procedures
 
Post-Issuance Compliance Policy for Tax-Exempt Obligations    Code No. 802.4-1
 
  1. Compliance Coordinator:
 
  1. The Board Secretary/Business Manager ("Coordinator") shall be responsible for monitoring post-issuance compliance.
  2. The Coordinator will maintain a copy of the transcript of proceedings in connection with the issuance of any tax-exempt obligations.  Coordinator will obtain such records as are necessary to meet the requirements of this policy.
  3. The Coordinator shall consult with bond counsel, a rebate consultant, financial advisor, IRS publications and such other resources as are necessary to understand and meet the requirements of this policy.
  4. Training and education of Coordinator will be sought and implemented upon the occurrence of new developments and upon the hiring of new personnel to implement this policy.
 
  1. Financing Transcripts.  The Coordinator shall confirm the proper filing of an 8038 Series return, and maintain a transcript of proceedings for all tax-exempt obligations issued by the Forest City Community School District, including but not limited to all tax-exempt bonds, notes and lease-purchase contracts.  Each transcript shall be maintained until eleven (11) years after the tax-exempt obligation it documents has been retired.  Said transcript shall include, at a minimum:
 
  1. Form 8038s; 
  2. minutes, resolutions, and certificates; 
  3. certifications of issue price from the underwriter; 
  4. formal elections required by the IRS; 
  5. trustee statements; 
  6. records of refunded bonds, if applicable; 
  7. correspondence relating to bond financings; and 
  8. reports of any IRS examinations for bond financings.     
 
  1. Proper Use of Proceeds.  The Coordinator shall review the resolution authorizing issuance for each tax-exempt obligation issued by the Forest City Community School District, and that the Forest City Community School District shall:
 
  1. obtain a computation of the yield on such issue from the Forest City Community School District’s financial advisor;  
  2. create a separate Project Fund (with as many sub-funds as shall be necessary to allocate proceeds among the projects being funded by the issue) into which the proceeds of issue shall be deposited; 
  3. review all requisitions, draw schedules, draw requests, invoices and bills requesting payment from the Project Fund; 
  4. determine whether payment from the Project Fund is appropriate, and if so, make payment from the Project Fund (and appropriate sub-fund if applicable); 
  5. maintain records of the payment requests and corresponding records showing payment;
  6. maintain records showing the earnings on, and investment of, the Project Fund;
  7. ensure that all investments acquired with proceeds are purchased at fair market value;
  8. identify bond proceeds or applicable debt service allocations that must be invested with a yield-restriction and monitor the investments of any yield-restricted funds to ensure that the yield on such investments does not exceed the yield to which such investments are restricted; 
  9. maintain records related to any investment contracts, credit enhancement transactions, and the bidding of financial products related to the proceeds;
 
  1. Timely Expenditure and Arbitrage/Rebate Compliance.  The Coordinator shall review the Tax-Exemption Certificate (or equivalent) for each tax-exempt obligation issued by the Forest City Community School District and the expenditure records provided in Section 2 of this policy, above, and shall:
 
  1. monitor and ensure that proceeds of each such issue are spent within the temporary period set forth in such certificate; 
  2. if the Forest City Community School District does not meet the “small issuer” exception for said obligation, monitor and ensure that the proceeds are spent in accordance with one or more of the applicable exceptions to rebate as set forth in such certificate;
  3. not less than 60 days prior to a required expenditure date confer with bond counsel and a rebate consultant if the Forest City Community School District will fail to meet the applicable temporary period or rebate exception expenditure requirements of the Tax-Exemption Certificate; and 
  4. in the event the Forest City Community School District fails to meet a temporary period or rebate exception:
 
  1. procure a timely computation of any rebate liability and, if rebate is due, file a Form 8038-T and arrange for payment of such rebate liability; 
  2. arrange for timely computation and payment of “yield reduction payments” (as such term is defined in the Code and Treasury Regulations), if applicable.
 
  1. Proper Use of Bond Financed Assets.  The Coordinator shall:  
 
  1. maintain appropriate records and a list of all bond financed assets.  Such records shall include the actual amount of proceeds (including investment earnings) spent on each of the bond financed assets; 
  2. with respect to each bond financed asset, the Coordinator will monitor and confer with bond counsel with respect to all proposed:
 
i. management contracts,
ii. service agreements,
iii. research contracts,
iv. naming rights contracts,
v. leases or sub-leases,
vi. joint venture, limited liability or partnership arrangements,
vii. sale of property; or
viii. any other change in use of such asset;
 
  1. maintain a copy of the proposed agreement, contract, lease or arrangement, together with the response by bond counsel with respect to said proposal for at least three (3) years after retirement of all tax-exempt obligations issued to fund all or any portion of bond financed assets; and
  2. In the event the Forest City Community School District takes an action with respect to a bond financed asset, which causes the private business tests or private loan financing test to be met, the Coordinator shall contact bond counsel and ensure timely remedial action under IRS Regulation Sections 1.141-12.
 
  1. General Project Records.  For each project financed with tax-exempt obligations, the Coordinator shall maintain, until three (3) years after retirement of the tax-exempt obligations or obligations issued to refund those obligations, the following:
 
  1. appraisals, demand surveys or feasibility studies,
  2. applications, approvals and other documentation of grants,
  3. depreciation schedules,
  4. contracts respecting the project.
 
  1. Advance Refundings. The Coordinator, shall be responsible for the following current, post issuance and record retention procedures with respect to advance refunding bonds:
 
  1. Identify and select bonds to be advance refunded with advice from internal financial personnel, and a financial advisor;
  2. The Coordinator shall identify, with advice from the financial advisor and bond counsel, any possible federal tax compliance issues prior to structuring any advance refunding;
  3. The Coordinator shall review the structure with the input of the financial advisor and bond counsel, of advance refunding issues prior to the issuance to ensure (i) that the proposed refunding is permitted pursuant to applicable federal tax requirements if there has been a prior refunding of the original bond issue; (ii) that the proposed issuance complies with federal income tax requirements which might impose restrictions on the redemption date of the refunded bonds; (iii) that the proposed issuance complies with federal income tax requirements which allow for the proceeds and replacement proceeds of an issue to be invested temporarily in higher yielding investments without causing the advance refunding bonds to become “arbitrage bonds”; and (iv) that the proposed issuance will not result in the issuer’s exploitation of the difference between tax exempt and taxable interest rates to obtain an financial advantage nor overburden the tax exempt market in a way that might be considered an abusive transaction for federal tax purposes.
  4. The Coordinator shall collect and review data related to arbitrage yield restriction and rebate requirements for advance refunding bonds. To ensure such compliance, the Coordinator shall engage a rebate consultant to prepare a verification report in connection with the advance refunding issuance. Said report shall ensure said requirements are satisfied. 
  5. The Coordinator shall, whenever possible, purchase SLGS to size each advance refunding escrow. The financial advisor shall be included in the process of subscribing SLGS. To the extent SLGS are not available for purchase, the Coordinator shall, in consultation with bond counsel and the financial advisor, comply with IRS regulations.
  6. To the extent as issuer elects to the purchase a guaranteed investment contract, the Coordinator shall ensure, after input from bond counsel, compliance with any bidding requirements set forth by the IRS regulations.
  7. In determining the issue price for any advance refunding issuance, the Coordinator shall obtain and retain issue price certification by the purchasing underwriter at closing.
  8. After the issuance of an advance refunding issue, the Coordinator shall ensure timely identification of violations of any federal tax requirements and engage bond counsel in attempt to remediate same in accordance with IRS regulations.
 
  1. Continuing Disclosure. The Coordinator shall assure compliance with each continuing disclosure certificate and annually, per continuing disclosure agreements, file audited annual financial statements and other information required by each continuing disclosure agreement.  The Coordinator will monitor material events as described in each continuing disclosure agreement and assure compliance with material event disclosure.  Events to be reported shall be reported promptly, but in no event not later than ten (10) Business Days after the day of the occurrence of the event.  Currently, such notice shall be given in the event of:
 
  1. Principal and interest payment delinquencies;
  2. Non-payment related defaults, if material;
  3. Unscheduled draws on debt service reserves reflecting financial difficulties;
  4. Unscheduled draws on credit enhancements relating to the bonds reflecting financial difficulties;
  5. Substitution of credit or liquidity providers, or their failure to perform;
  6. Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax-exempt status of the bonds, or material events affecting the tax-exempt status of the bonds;
  7. Modifications to rights of Holders of the Bonds, if material;
  8. Bond calls (excluding sinking fund mandatory redemptions), if material, and tender offers;
  9. Defeasances of the bonds;
  10. Release, substitution, or sale of property securing repayment of the bonds, if material;
  11. Rating changes on the bonds;
  12. Bankruptcy, insolvency, receivership or similar event of the Issuer;
  13. The consummation of a merger, consolidation, or acquisition involving the Issuer or the sale of all or substantially all of the assets of the Issuer, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; and
  14. Appointment of a successor or additional trustee or the change of name of a trustee, if material.
 
 
 
Adoption: 11-12-12
                                
Review:   7-17-89   3-14-94  7-12-99
                                                  
Revision:  8-10-92
                               
Cross References:

802.4-R1POST – ISSUANCE COMPLIANCE REGULATION FOR TAX-EXEMPT OBLIGATIONS

REGULATIONS
 
SERIES 800 – BUSINESS PROCEDURES
 
POST – ISSUANCE COMPLIANCE REGULATION
FOR TAX-EXEMPT OBLIGATIONS                     Code No. 802.4-R1
 
  1. Role of Compliance Coordinator/Board Treasurer
The board treasurer shall:
  1. Be responsible for monitoring post-issuance compliance;
  2. Maintain a copy of the transcript of proceedings or minutes in connection with the issuance of any tax-exempt obligations and obtain records that are necessary to meet the requirements of this regulation;
  3. Consult with bond counsel, a rebate consultant, financial advisor, IRS publications and such other resources as are, necessary to understand and meet the requirements of this regulation;
  4. Seek out training and education to be implemented upon the occurrence of new developments in the area and upon the hiring of new personnel to implement this regulation.
 
  1. Financing Transcripts’ Filling and Retention
The board treasurer shall confirm the proper filing of an IRS 8038 Series return and maintain a transcript of proceedings and minutes for all tax-exempt obligations issued by the school district including but not limited to all tax-exempt bonds, notes and lease-purchase contracts.  Each transcript shall be maintained until 11 years after the tax-exempt obligation documents have been retired.  The transcript shall include, at a minimum:
  1. Form 8038;
  2. Minutes, resolutions, and certificates;
  3. Certifications of issue price from the underwriter;
  4. Formal elections required by the IRS;
  5. Trustee statements;
  6. Records of refunded bonds, if applicable;
  7. Correspondence relating to bond financings; and
  8. Reports of any IRS examinations for bond financings.
 
  1. Proper Use of Proceeds
The board treasurer shall review the resolution authorizing issuance for each tax-exempt obligation issued by the school district, and the school district shall:
  1. Obtain a computation of the yield on such issue from the school district’s financial advisor;
  2. Create a separate Project Fund (with as many sub-funds as shall be necessary to allocate proceeds among the projects being funded by the issue) into which the proceeds of issue shall be deposited;
  3. Review all requisitions, draw schedules, draw requests, invoices and bills requesting payment from the Project Fund;
  4. Determine whether payment from the Project fund is appropriate and, if so, make payment from the Project Fund (and appropriate sub-fund if applicable);
  5. Maintain records of the payment requests and corresponding records showing payment;
  6. Maintain records showing the earnings on, and investment of, the Project Fund;
  7. Ensure that all investments acquired with proceeds are purchased at fair market value;
  8. Identify bond proceeds or applicable debt service allocations that must be invested with a yield-restriction and monitor the investments of any yield-restricted funds to ensure that the yield on such investments do not exceed they yield to which such investments are restricted;
  9. Maintain records related to any investment contracts, credit enhancement transactions, and the bidding of financial products related to the proceeds.
 
  1. Timely Expenditure and Arbitrage/Rebate Compliance
The board treasurer shall review the Tax-Exemption Certificate (or equivalent) for each tax-exempt obligation issued by the school district and the expenditure records provided in Section 2 of this regulation, above, and shall:
 
  1. Monitor and ensure that proceeds of each such issue are spent within the temporary period set forth in such certificate;
  2. Monitor and ensure that the proceeds are spent in a accordance with one or more of the applicable exceptions to rebate as set forth in such certificate if the school district does not meet the “small issuer” exception for said obligation;
  3. Not less than 60 days prior to a required expenditure date confer with bond counsel and a rebate consultant if the school district will fail to meet the applicable temporary period or rebate exception expenditure requirements of the Tax-Exemption Certificate.  In the event the school district fails to meet a temporary period or rebate exception:

 

  1. Procure a timely computation of any rebate liability and, if rebate is due, file a Form 8038-T and arrange for payment of such rebate liability;
  2. Arrange for timely computation and payment of yield reduction payments” (as such term is defined in the Code and Treasury Regulations), if applicable.
 
  1. Proper Use of Bond Financed Assets
The board treasurer shall:
 
  1. Maintain appropriate records and a list of all bond-financed assets.  Such records shall include the actual amount of proceeds (including investment earnings) spent on each of the bond financed assets;
  2. Monitor and confer with bond counsel with respect to all proposed with respect to each bond financed asset:
I. management contracts;
II. service agreements;
III. research contracts;
IV. naming rights;
V. contracts;
VI. leases or sub-leases;
VII. joint venture, limited liability or partnership arrangements;
VIII. sale of property; or
IX. any other change in sue of such asset.
  1. Maintain a copy of the proposed agreement, contract, lease, or arrangement, together with the response by bond counsel with respect to said proposal for at least three years after retirement of all tax-exempt obligations issued to fund all or any portion of bond financed assets; and
  2. Shall contact bond counsel and ensure timely remedial action under IRS Regulation Sections 1.141-12 in the event the school district takes an action with respect to a bond financed asset, which causes the private business tests or private loan financing test to be met.
 
  1. General Project Records
For each project financed with tax-exempt obligations, the board treasurer shall maintain, until three years after retirement of the tax-exempt obligations or obligations issued to refund those obligations, the following:
 
  1. Appraisals, demand surveys or feasibility studies;
  2. Applications, approvals and other documentation of grants:
  3. Deprecation schedules:
  4. Contracts respecting he project.
 
  1. Advance Refundings
The board treasurer shall be responsible for the following current, post issuance and record retention procedures with respect to advance refunding bonds.  The board treasurer shall:
 
  1. Identify and select bonds to be advance refunded with advice from internal financial personnel, and a financial advisor;
  2. Identify, with advice from the financial advisor and bond counsel, any possible federal tax compliance issues prior to structuring and advance refunding:
  3. Review the structure with the input of the financial advisor and bond counsel, of advance refunding issues prior to the issuance to ensure (i) that the proposed refunding is permitted pursuant to applicable federal tax requirements if there has been a prior refunding of the original bond issue; (ii) that the proposed issuance complies with federal income tax requirements which might impose restrictions on the redemption date of the refunded bonds; (iii) that the proposed issuance complies with federal income tax requirements which allow for the proceeds and replacement proceeds of an issue to be invested temporarily in higher yielding investments without causing the advance refunding bonds to become “arbitrage bonds”; and (iv) that the proposed issuance will not result in the issuer’s exploitation of the difference between tax exempt and taxable interest rates to obtain an financial advantage nor overburden the tax exempt market in a way that might be considered an abusive transaction for federal tax purposes;
  4. Collect and review data related to arbitrage yield restriction and rebate requirements for advance refunding bonds.  To ensure such compliance, the board treasurer shall engage a rebate consultant to prepare a verification report in connection with the advance refunding issuance.  Said report shall ensure said requirements are satisfied;
  5. Whenever possible, purchase State and Local Government Series (SLGS) to size each advance refunding escrow.  The financial advisor shall be included in the process of subscribing SLGS.  To the extent SLGS are not available for purchase, the Board treasurer shall, in consultation with bond counsel and the financial advisor, comply with IRS regulations:
  6. Ensure, after input from bond counsel, compliance with any bidding requirements set forth by the IRS regulations to the extent as issuer elects to the purchase a guaranteed investment contract;
  7. In determining the issue price for any advance refunding issuance, obtain and retain issue price certification by the purchasing underwriter at closing;
  8. After the issuance of any advance refunding issue, ensure timely identification of violations of any federal tax requirements and engage bond counsel in attempt to remediate same in accordance with IRS regulations.
 
  1. Continuing Disclosure
The board treasurer shall assure compliance with each continuing disclosure certificate and annually, per continuing disclosure agreements, file audited annual financial statements and other information required by each continuing disclosure agreement.  The board treasurer will monitor material events as described in each continuing disclosure agreement and assure compliance with material event disclosure.  Events to be reported shall be reported promptly, but in no even not later than 10 business days after the day of the occurrence of the event.
Currently, such notice shall be given in the event of:
 
  1. Principal and interest payment delinquencies;
  2. Non-payment related defaults, if material;
  3. Unscheduled draws on debt service reserves reflecting financial difficulties;
  4. Unscheduled draws on credit enhancements relating to the bonds reflecting financial difficulties;
  5. Substitution of credit or liquidity providers, r their failure to perform;
  6. Adverse tax options, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax-exempt status of the bonds, or material events affecting the tax-exempt status of the bonds;
  7. Modifications to rights of Holders of the Bonds, if material;
  8. Bond calls (excluding sinking fund mandatory redemptions), if material, and tender offers;
  9. Defeasances of the bonds;
  10. Release, substitution, or sale of property securing repayment of the bonds, if material;
  11. Rating changes on the bonds;
  12. Bankruptcy, insolvency, receivership or similar event of the Issuer;
  13. The consummation of a merger, consolidation, or acquisition involving the Issuer or the sale of all or substantially all the assets of the Issuer, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; and
  14. Appointment of a successor or additional trustee or the change of name of a trustee, if material.
 
Adoption: 4-9-12
                                
Review:  2-8-16
     
Revision:
                                                                                                  
Cross References:
 
Legal References:   Iowa Code §§ 257.31 (4); 279.8; 297.22-25; 298A (2011).

802.5 Investments

F. C. SCHOOL BOARD POLICIES
 
Series 800 - Business Procedures
 
Investments Code No. 802.5
 
School district funds in excess of current needs shall be invested in compliance with this policy.  The goals of the school district's investment portfolio in order of priority are:
  • To provide safety of the principal;
  • To maintain the necessary liquidity to match expected liabilities; 
  •  To obtain a reasonable rate of return.
 
In making investments, the school district shall exercise the care, skill, prudence and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with such matters would use to meet the goals of the investment program.
 
School district funds are monies of the school district, including operating funds.  "Operating funds" of the school district are funds which are reasonably expected to be used during a current budget year or within fifteen months of receipt.  When investing operating funds, the investments must mature within three hundred and ninety-seven days or less.  When investing funds other than operating funds, the investments must mature according to the need for the funds.
 
The board authorizes the treasurer to invest funds in excess of current needs in the following investments:
 
  • Interest bearing savings, money market, and checking accounts at the school district's authorized depositories;
  • Iowa Schools Joint Investment Trust Program (ISJIT);
  • Obligations of the United States government, its agencies and instrumentalities; and,
  • Certificates of deposit and other evidences of deposit at federally insured Iowa depository institutions.
 
It shall be the responsibility of the treasurer to oversee the investment portfolio in compliance with this policy and the law.
 
It shall be the responsibility of the treasurer to bring a contract with an outside person to invest school district funds, to advise on investments, to direct investments, to act in a fiduciary capacity or to perform other services to the board for review and approval.  
 
The treasurer shall also provide the board with information about and verification of the outside person's fiduciary bond.  Contacts with outside persons shall include a clause requiring the outside person to notify the school district within thirty days of any material weakness in internal structure or regulatory orders or sanctions against the outside person regarding the services being provided to the school district and to provide the documents necessary for the performance of the investment portion of the school district audit.  The compensation of the outside persons shall not be based on the performance of the investment portfolio.
 
The treasurer shall be responsible for reporting to and reviewing with the board at its regular meetings the investment portfolio's performance, transaction activity and current investments including the percent of the investment portfolio by type of investment and by issuer and maturities.  The report shall also include trend lines by month over the last year and year-to-year trend lines regarding the performance of the investment portfolio.  It shall also be the responsibility of the treasurer to obtain the information necessary to ensure that the investments and the outside persons doing business with the school district meet the requirements outlined in this policy.
 
It shall be the responsibility of the superintendent, in conjunction with the treasurer, to develop a system of investment practices and internal controls over the investment practices.  The investment practices shall be designed to prevent losses, to document the officers and employees responsibility for elements of the investment process and address the capability of the management.
 
 
 
Adoption: 6-24-75
                               
Review: 3-14-94  7-12-99    08-12-10  2-8-16
                                      
Revision: 8-10-92
                                                                  
Cross References: Revenue Treasurer
 
Legal References:  Iowa Code 11.2, .6; 12.62; 22.1, .13; 28E.2; 257;  279.29; 283A; 285; 452.10; 453; 502.701; 633.123 (1993) 1992 Iowa Acts

802.6 Gifts, Grants, and Bequests

F. C. SCHOOL BOARD POLICIES
 
Series 800 - Business Procedures
 
Gifts, Grants, and Bequests                           Code No. 802.6
 
If approved by the Board of Directors, gifts, grants, or bequests involving money, equipment, or furnishings may be accepted by the school district.  All gifts, grants, or bequests shall be administered in accordance with the terms of the gift or bequest, and shall become the property of the school district under the control of the Board of Directors.
 
 
Adoption: 3-13-89
                                
Review:  7-14-89   3-14-94  7-12-99    08-12-10  2-8-16
 
Revision:
                                                                                                  
Cross References:
 
Legal References:   565.6

802.7 Depository of Funds

F. C. SCHOOL BOARD POLICIES
 
Series 800 - Business Procedures
 
Depository of Funds                                   Code No. 802.7
 
At the annual meeting, the Board of Directors shall designate by resolution, which shall be entered in the official minutes of the board, the name and location of the bank or banks selected as the official school district depository or depositories.  The board shall also designate the maximum amount that may be kept on deposit in each bank.
 
 
Adoption:  3-13-89  
                              
Review:    7-17-89   3-14-94 7-12-99    08-12-10  2-8-16
                                             
Revision:
                                                                                                  
Cross References: 204.5
 
Legal References:  279.33; 453.1-453.3; Chapter 454

802.8 Financial Records

F. C. SCHOOL BOARD POLICIES
 
Series 800 - Business Procedures
 
Financial Records Code No. 802.8
 
Financial records of the school district shall be maintained in accordance with generally accepted accounting principles (GAAP) as required or modified by law. School district monies shall be received and expended from the appropriate fund and/or account.  The funds and accounts of the school district shall include, but not be limited to:
Governmental fund type:
  • General fund
  • Special revenue fund
    • Management levy fund
    • Public education and recreation levy fund
    • Student activity fund
  • Capital projects fund
    • ​Physical plant and equipment levy fund
    • Secure and Advanced Vision for Education (SAVE)
  • Debt service fund
Proprietary fund type:
  • Enterprise fund
    • School nutrition fund
    • Child care fund
  • Internal service fund
Fiduciary funds:
  • Trust or agency funds
    • Expendable trust funds
    • Nonexpendable trust funds
    • Agency funds
    • Pension trust funds
Account groups:
  • General fixed assets account group
  • General long-term debt account group
 
As necessary the board may, by board resolution, create additional funds within the governmental, proprietary and fiduciary fund types.  The resolution shall state the type of fund, name of the fund and purpose of the fund.
 
The general fund is used primarily for the education program.  Special revenue funds are used to account for monies restricted to a specific use by law.  Capital projects funds are used to account for financial resources to acquire or construct major capital facilities (other than those of proprietary funds and trust funds) and to account for revenues from SAVE.  A debt service fund is used to account for the accumulation of resources for, and the payment of, general long-term debt principal and interest.  Proprietary funds account for operations of the school district operated similar to private business, or they account for the costs o providing goods and services provided by one department to other departments on a cost reimbursement basis.  Fiduciary funds are used to account for monies or assets held by the school district on behalf of, or in trust for, another entity.  The account groups are the accounting records for fixed assets and long-term debt.  
 
The board may establish other funds in accordance with generally accepted accounting principles and may certify other taxes to be levied for the funds as proviced by state law.  The status of each fund must be included in the annual report.
 
It is the responisbility of the superintendent to implement this policy and bring necessary changes in the maintenance of the school district's financial records to the atention of the board.  
 
 
 
 
 
 
Adoption: 10-12-06
  
Review:   08-12-10  2-8-16  2-13-17
 
Revision: 2-13-17
  
Cross References:
 
Legal Reference: Iowa Code §§ 11.23; 298A (1997).

802.9 Capital Assets

F. C. SCHOOL BOARD POLICIES
 
Series 800 - Business Procedures
 
Capital Assets Code No. 802.9
 
The school district will establish and maintain a capital assets management system for reporting capitalized assets owned or under the jurisdiction of the school district in its financial reports in accordance with generally accepted accounting principles (GAAP) as required or modified by law; to improve the school district's oversight of capital assets by assigning and recording them to specific facilities and programs and to provide for proof of loss of capital assets for insurance purposes. Code802o9
 
Capital assets, including tangible and intangible assets, are reported in the government-wide financial statements (Le. governmental activities and business type activities) and the proprietary fund financial statements. Capital assets reported include school district buildings and sites, construction in progress, improvements other than buildings and sites, land and machinery and equipment. Capital assets reported in the financial reports will include individual capital assets with an historical cost equal to or greater than $3,000.  The Federal regulations governing school lunch programs require capital assets attributable to the school lunch program with a historical cost of equal to or greater than $500 be capitalized. Additionally, capital assets are depreciated over the useful life of each capital asset. 
 
All intangible assets with a purchase price equal to or greater than $25,000 with useful life of two or more years, are included in the intangible asset inventory for capitalization purposes. Such assets are recorded at actual historical cost and amortized over the designated useful lifetime applying a straight-line method of depreciation. If there are no legal, contractual, regulatory, technological or other factors that limit the useful life of the asset, then the intangible asset needs to be considered to have an indefinite useful life and no amortization should be recorded. 
 
Phase III districts, as determined under GASB 34, will retroactively report intangible assets. If actual historical cost cannot be determined for intangible assets due to lack of sufficient records, estimated historical cost will be used. 
 
This policy applies to all intangible assets. If an intangible asset that meets the threshold criteria is fully amortized, the asset must be reported at the historical cost and the applicable accumulated amortization must also be reported. It is not appropriate to "net" the capital asset and amortization to avoid reporting. For internally generated intangible assets, outlays incurred by the government's personnel, or by a third-party contractor on behalf of the government, and for development of internally generated intangible assets should be capitalized. 
 
The capital assets management system must be updated monthly to account for the addition/acquisition, disposal, relocation/transfer of capital assets. It is the responsibility of the superintendent to count and reconcile the capital assets with capital assets management system on June 30 each year.
 
It is the responsibility of the superintendent to develop administrative regulations implementing this policy. It will also be the responsibility of the superintendent to educate employees about this policy and its supporting administrative regulations. 
 
 
NOTE:  It is suggested the board consider a capitalization threshold consistent with the GASB 34 Committee Recommendations which recommended "districts and AEAs implement capitalization levels that would capture at least 80% of the value of assets.  However, the threshold should not be greater than $5,000."  In addition, Boards may wish to establish guidelines at lower thresholds for keeping track of capital assets for internal control and insurance purposes. 
 
In determining the capital asset capitalization threshold, the size of the school district, the property insurance deductible and the time and effort necessary to account for and track capital assets with a lesser value should be considered. It is strongly recommended the board consult with the school auditor prior to setting the capitalization threshold. 
 
An intangible asset should be recognized in the statement of net assets only if it is identifiable which means the asset is either separable or, arose from contractual or other legal rights, regardless of whether those rights are transferable or separable. The intangible asset must also possess all of the following characteristics/criteria: 
  • lack of physical substance; 
  • be of a non-financial nature (not in monetary form like cash or investment securities); and, 
  • the initial useful life extending beyond a single reporting period. 
Examples of intangible assets include easements, land use rights, patents, trademarks and copyrights. In addition, intangible assets include computer software purchased, licensed or internally generated, including web sites, as well as outlays associated with an internally generated modification of computer software. 
 
Intangible assets can be purchased or licensed, acquired through non-exchange transactions or internally generated. Intangible assets exclude assets acquired or created primarily for purposes of directly obtaining income, assets from capital lease transactions reported by lessees, and goodwill created through the combination of a government and another entity. 
 
A school district could, and many do, use bar code identification tags to control capital assets, such as VCRs, technology equipment, etc., even though these capital assets have a cost below the capitalization threshold. In tracking these capital assets only the information necessary to control the location and use of them needs to be maintained. Some school districts video-tape each classroom/office annually to save time and effort tracking capital assets below the capitalization threshold. The video tape is also helpful for insurance claims. Whether a school district chooses to track capital assets with a cost below the capitalization threshold or not, capital assets with a cost below the capitalization threshold should not be included in the capital assets listing for reporting purposes. 
 
This policy provides for valuing capital assets at historical cost as required by GAAP. This policy bases the capitalization threshold on the historical/acquisition cost of the individual asset. The school district can choose to use the historical cost of all the items included in a purchase order as the basis for determining whether to capitalize the capital asset. The cost of improvements may be added to the historical cost of a capital asset. Deciding whether to add the costs of an improvement to a capital asset's historical cost is a judgment call which should be made after consulting with the school auditor. 
 
Adoption:  09-09-10
               
Review:  2-8-16
 
Revision: 
 
Cross References:703   701.2
 
Legal References: Iowa Code §§ 257.31(4); 279.8; 297.22-.25; 298A (2009).

802.9-R1 Capital Assets Regulation

REGULATIONS
Series 800 - Business Procedures
 
Capital Assets Regulation Code No. 802.9-R1
 
  1. Capital Assets Management System 
The superintendent, and/or other designated staff, shall: 
  • Conduct the fixed assets physical count; 
  • Develop the fixed assets listing; 
  • Tag fixed assets included in the fixed assets management system with a bar code identification number; 
  • Make a recommendation of a computer software program for managing the fixed assets management system; 
  • Enter the necessary data into the fixed capital assets management system and compile the appropriate reports; 
  • Develop forms and procedures for maintaining the integrity of the fixed capital assets management system; and, 
  • Maintain responsibility for an accurate fixed capital assets management system. 
  1. Determining historical cost 
  • The historical cost of a capital asset is based on the actual costs expended in making the capital assets serviceable. 
  • Gifts of capital assets are valued at the estimated fair market value at the addition/acquisition date. 
  • Fixed assets purchased under a capital lease are valued at historical cost of their net present value of the minimum lease payments on the addition/acquisition date. 
  • The historical cost of capital assets must include capitalized interest. 
  1. Annual capital assets listing reconciliation 
  • The superintendent, and/or other designated staff, in conjunction with the capital assets management team, will conduct an annual capital assets physical count to develop the annual capital assets listing in a manner similar to the initial capital assets listing process in B above. At least every three years, someone other than the person in custody of the capital assets in the building/department/room will perform the capital assets physical count for the building/department/room. 
  • Upon completion of the annual capital assets listing, the capital assets listing is reconciled to the capital assets management system data base. 
  • Capital assets found to have been excluded from the data base are added to the capital assets management system. The capital assets management system process should be reviewed to prevent future incidents of excluding a capital asset. 
  • Capital assets unaccounted for are reported to the superintendent who contacts the supervisor of and the individual in charge/control/custody of the capital asset. The individual in charge/control/custody of the capital asset has thirty days to account for the capital asset. 
  • Capital assets unaccounted for after thirty days are reported to the superintendent for appropriate action and documentation. "Appropriate action" may include discipline, up to and including discharge, and may require the employee/person in charge/control/custody of the capital asset to replace the asset. 
  • The superintendent is responsible for documenting the reasons each asset was not reconciled to the capital assets management system. 
  1. Addition/acquisition of capital assets. 

  1. The school district's purchasing policy and administrative regulations must be followed when acquiring capital assets. The school district's policy and administrative regulations must be followed for receiving a gift of capital assets. 
  2. The capital assets addition/acquisition documentation must be completed for each additional capital assets with an addition/acquisition cost of equal to or greater than $3,000.  The following information should be collected, if applicable: 
  • Name of location-building/department/room; 
  • Location-building/department/room code; 
  • Balance sheet accounting/class code; 
  • Government or BT A program~ 
  • Addition/acquisition date; 
  • Check/purchase order number or gift; 
  • Bar code identification number assigned to and placed on the capital asset; 
  • Serial/model number; 
  • Cost-historical; 
  • Fair market value on acquisition date (donated assets only); 
  • Estimated useful life; 
  • Vendor; 
  • Purchasing fund and function; 
  • Description of capital asset; 
  • Department/person charged with custody, 
  • Method of addition/acquisition-purchase, trade, gift etc., 
  • Quantity; 
  • Replacement cost; 
  • Addition/acquisition authorization; and, 
  • Function for depreciation. 
  1. Capital assets acquired in a month must be entered into the capital assets management system in the same month. 
  2. The actual costs of construction in progress, other than infrastructure, is entered into the capital assets management system in the month in which costs are incurred until the total cost of addition/acquisition is entered. Upon completion of construction, the total costs accumulated over the period of construction are reclassified to buildings. 
  3. Capital assets acquired in a month must be entered into the capital assets management system in the same month. 
 
  1. Relocation/transfer of machinery and equipment capital assets. 
  • A capital assets relocation/transfer documentation must be completed prior to removing machinery and equipment capital assets from their current location. The following information must be collected: 

 

  • Relocation/transfer date; 
  • Quantity; 
  • Bar code identification number; 
  • Current location-building/department/room code; 
  • Name of current location-building/department/room; 
  • New location-building/department/room code; 
  • Name of new location-building/department/room; 
  • Date placed at new location-building/department/room; 
  • Department/person charged with custody; and 
  • Relocation/transfer authorization. 
  • Capital assets relocated/transferred in a month must be entered into the capital assets management system in the same month. 
  1. Disposal of capital assets 
  1. A Capital Assets disposal documentation must be completed prior to disposing of real property. The following information must be collected:
  • Disposal date; 
  • Quantity; 
  • Bar code tag identification number; 
  • Legal description,  Location/Address; 
  • Purchaser; 
  • Disposal methods for real property trade, sale, stolen, etc.; and, 
  • Disposal authorization. 
  • Capital assets disposed of in a month must be entered into the capital assets management system in the same month. 
  • When assets are sold or disposed of, it is necessary to calculate and report a gain or loss in the statement of activities. The gain/loss is calculated by subtracting the net book value (historical cost less any accumulated amortization) from the net amount realized on the sale or disposal. 
  1. Lost, damaged or stolen capital assets. 

 

  • A Lost, Damaged or Stolen Capital Assets Report must be completed when a capital asset has been lost, damaged or stolen. The following information must be collected: 
  • Date of loss, damage or theft; 
  • Employee/person discovering; 
  • Quantity; 
  • Description of capital asset; 
  • Bar code tag identification number; 
  • Location-building/department/room; 
  • Description of loss, damage, etc.; 
  • Filing of police report-yes or no; 
  • Filing of insurance report-yes or no; 
  • Sent for repair-yes or no; 
  • Date returned from repair; 
  • Date returned to location-building/department/room; 
  • Department/person charged with custody; and, 
  • Authorization. 
  • Capital assets damaged, lost or stolen in a month must be entered into the capital assets management system in the same month. 
  1. Capital assets reports 
  • Annual reports for June 30 each year. 
  • Capital assets listing including the following items: 
  • Balance sheet accounting/class code; 
  • Purchasing fund, function and depreciation function; 
  • Bar code tag identification number; 
  • Description of the capital asset; 
  • Historical cost or other;
  • Location; 
  • Current year depreciation/expense; and, 
  • Accumulated depreciation/amortization
  • capital assets listing by location/building; 
  • capital assets listing by department/employee/person charged with custody; and, 
  • capital assets listing by replacement cost. 
 
NOTE: This sample administrative regulation provides a sample capital asset management system. It is important the administrative regulations adopted by a school district reflect is its actual practice. The school district may choose to employ a service provider to conduct the annual capital assets physical count, annual capital assets listing and to implement a capital assets management system for capital assets required to be capitalized under board policy. Should the board employ a service provider, it is important to have the school attorney review the request for proposals and to draft the service provider contract. 
 
This sample administrative regulation provides for valuing capital assets at historical cost as required by GAAP. This administrative regulation also requires the school district to maintain the replacement value of capital assets. Should the school district decide not to maintain replacement values for its capital assets, the requirement should be deleted from the administrative regulation. 
 
Some school districts in completing their initial capital assets listing consider a room a unit.' For example, 25 student desks, one teacher's desk, one teacher's chair, wastebasket, two storage/file cabinets and so forth could be considered a room unit with a value of $35,000. The unit is included as one item on the capital assets listing. 
 
This may be a difficult element of a capital assets management system. Capital assets have a tendency to be moved around and the employees moving them generally do not remember to complete the paperwork or even to inform the superintendent. A quality annual reconciliation process must be done to ensure a valid assets listing. Some school districts require a designated person at each building to complete the paperwork upon the disposal of a capital asset. School districts with a local area network can save paperwork by allowing each building to enter the information regarding disposal of capital assets as long as the appropriate checks and balances exist to verify the information. 
 
The school auditor may, at a minimum, require a capital assets listing with the historical or other cost basis and balance sheet accounting/class code for each capital asset in the capital assets listing. It is important for the school district to consult with the district's auditor prior to determining the school district's requirements for this annual report. The other items listed above are optional unless recommended by the school auditor to meet the school district's needs. 
 
The capital assets listing total dollar amount must equal the amount entered on the school district's Certified Annual Report (CAR). This amount is calculated as follows: 
 
Capital assets listing prior year by balance sheet accounting/class code 
+ Additions/Acquisitions by balance sheet accounting/class code 
- Disposal by balance sheet accounting/class code 
= Capital assets listing current year by balance sheet accounting/class code 
 
The last three reports may be used by school districts for many different purposes. For example, the "capital assets listing by location/building" and "capital assets listing by department/employee/person charged with custody" are used by school districts for the annual capital assets listing reconciliation to compare the actual capital assets in a building or department/room with the information in the capital assets management system. 

802.9-R2 Capital Assets Management System Definitions

REGULATIONS
Series 800 - Business Procedures
 
Capital Assets Management System Definitions       Code No. 802.9-R2
 
Back trending/standard costing - an estimate of the historical original cost using a known average installed cost for like units as of the estimated addition/ acquisition date. This cost is only applied to the capital assets initially counted upon implementation of the capital assets management system when the historical original cost cannot be determined. It is inappropriate to apply the back trending/standard costing method to any capital assets acquired after the assets management system implementation date.
 
Balance sheet accounting/class codes - the codes set out for assets in the Iowa Department of Education Uniform Accounting Manual. They are: 200-capital assets; 211-land and land improvements; 221-site improvements; 222¬accumulated depreciation on site improvements; 231-buildings and building improvements; 232-accumulated depreciation on buildings and building improvements; 241-machinery and equipment; 242-accumulated depreciation on machinery and equipment, 251-works of art and historical treasures; 252-accumulated depreciation on works of art and historical treasures, 261-infrastructure, 262-accumulated depreciation on infrastructure, and 271-construction in progress. 
 
Book value - the value of capital assets on the records of the school district, which can be the cost or, the cost less the appropriate allowances, such as depreciation. 
Buildings and building improvements - a capital assets account reflecting the addition/acquisition cost of permanent structures owned or held by a government and the improvements thereon. 
Business-type activities - one of two classes of activities reported in the government-wide financial statements. Business-type activities are financed in the whole or in part by fees charged to external parties for goods or services. These activities are usually reported in enterprise funds.
 
Capital expenditures/expenses - expenditures/expenses resulting in the addition/acquisition of or addition/acquisition to the school district's capital assets.
 
Capital assets - Capital assets with a value of equal to or greater than $3,000 based on the historical cost include: long-lived assets obtained or controlled as a result of past transactions, events or circumstances. Capital assets include buildings, construction in progress, improvements other than facilities, land, machinery and equipment, and intangible assets. 
 
Capitalization policy - the criteria used by the school district to determine which capital assets will be reported as capital assets on the school district's financial statements and records 
 
Capitalization threshold - The dollar value at which a government elects to capitalize tangible or intangible assets that are used in operations and that have initial useful lives extending beyond a single reporting period. 
 
Capitalized interest - interest accrued and reported as part of the cost of the capital assets during the construction phase of a capital project. The construction phase extends from the initiation of pre-construction activities until the time the asset is placed in service. 
 
Construction in progress - buildings in the process of being constructed other than infrastructure. 
 
Cost - the amount of money or other consideration exchanged for goods or services. 
 
 
 
Depreciation! Amortization - expiration in the service life of capital assets, other than wasting assets, attributable to wear and tear, deterioration, action of the physical elements, inadequacy and obsolescence. In accounting for depreciation/amortization, the cost of a capital asset, less any salvage value, is prorated over the estimated service life of such an asset, and each period is charged with a portion of such cost. 
 
Fixtures - attachments to buildings that are not intended to be removed and cannot be removed without damage to the buildings. Those fixtures with a useful life presumed to be as long as that of the building itself are considered a part of the building. Other fixtures are classified as machinery and equipment. 
 
General capital assets - capital assets that are not capital assets of any fund, but of the governmental unit as a whole. Most often these capital assets arise from the expenditure of the financial resources of governmental funds. 
General capital assets account group (GFAAG) - a self-balancing group of accounts established to account for capital assets of the school district, not accounted for through specific proprietary funds. 
 
Government activities - activities generally financed through taxes, intergovernmental revenues, and other non-exchange revenues. These activities are usually reported in governmental funds and internal service funds. 
 
Government-wide financial statements - Financial statements that incorporate all of a government's governmental and business-type activities, as well as its non-fiduciary component units. There are two basic government-wide financial statements the statement of net assets and the statement of activities. Both basic government-wide financial statements are presented using the economic resources measurement focus and the accrual basis of accounting. 
 
Historical (acquisition) cost - the actual costs expended to place a capital asset into service. For land and buildings, costs such as legal fees, recording fees, surveying fees, architect fees and similar fees are included in the historical cost. For machinery and equipment, costs such as freight and installation fees and similar fees are included in the historical cost. 
 
Improvements - In addition made to, or change made in, a capital asset, other than maintenance, to prolong its life or to increase the efficiency or capacity. The cost of the addition or change is added to the book value of the asset. 
 
Improvements other than buildings - attachments or annexation to land that are intended to remain so attached or annexed, such as sidewalks, trees, drives, tunnels, drains and sewers. Sidewalks, curbing, sewers and highways are sometimes referred to as "betterments," but the term "improvements" is preferred.
 
Infrastructure -long-lived capital assets that normally are stationary in nature and normally can be preserved for a significantly greater number of years than most capital assets. Examples of infrastructure assets include; roads, bridges, tunnels, drainage systems, tater and sewer systems, dams, and lighting systems. 
 
Investment in general capital assets - an account in the GFAAG representing the school district's investment in general capital assets. The balance in this account generally is subdivided according to the source of the monies that finance the capital assets addition/acquisition, such as general fund revenues and special assessments. 
 
 
 
Land and buildings - real property owned by the school district.
 
Machinery and equipment - capital assets which maintain their identity when removed from their location and are not changed materially or consumed immediately (e.g., within one year) by use. Machinery and equipment are often divided into specific categories such as: transportation machinery and equipment which includes school buses and school district owned automobiles, trucks and vans; other motor machinery and equipment which includes lawn maintenance machinery and equipment, tractors, motorized carts, maintenance machinery and equipment, etc.; other machinery and equipment which includes furniture and machinery and equipment contained in the buildings whose original cost is equal to or greater than ($ capitalization threshold), and capital assets under capital leases and capital assets being acquired under a lease/purchase agreement. 
 
Proprietary funds - Funds that focus on the determination of operating income, changes in net assets (or cost recovery), financial position, and cash flows. There are two different types of proprietary funds: enterprise funds and internal service funds. 
 
Replacement cost - the amount of cash or other consideration required today to obtain the same ~ capital assets or its equivalent. 

802.10 Governmental Accounting Practices & Regulations

F. C. SCHOOL BOARD POLICIES
Series 800 - Business Procedures
 
Governmental Accounting Practices And Regulations Code No. 802.10 
 
School district accounting practices will follow state and federal laws and regulations, generally accepted accounting principles (GAAP) and the uniform financial accounting system provided by the Iowa Department of Education.  As advised by the school district’s auditor, determination of liabilities and assets, prioritization of expenditures of governmental funds and provisions for accounting disclosures shall be made in accordance with governmental accounting standards.
 
In Governmental Accounting Standards Board (GASB) Statement No. 54, the board identifies the order of spending unrestricted resources applying the highest level of classification of fund balance - restricted, committed, assigned, and unassigned - while honoring constraints on the specific purposes for which amounts in those fund balances can be spent.  A formal board action is required to establish, modify and or rescind a committed fund balance.  The resolution will state the exact dollar amount.  In the event, the board chooses to make changes or rescind the committed fund balance, formal board action is required.
 
The Board authorizes the board secretary to assign amounts to a specific purpose in compliance with GASB 54.  An ‘assigned fund balance’ should also be reported in the order of spending unrestricted resources, but is not restricted or committed.  
 
It is the responsibility of the superintendent, or designee, to develop administrative regulations implementing this policy.  It is also the responsibility of the superintendent, or designee, to make recommendations to the board regarding fund balance designations.   
 
Note:  This policy is an optional policy.  Should the board not adopt a policy implementing GASB54, the default is to reduce – committed, assigned and unassigned fund balances – in that order.  Adoption of a policy gives boards the ability to have greater control over their fund balances.
 
 
 
Approved:  08/08/11
 
Reviewed: 801.7 Budget
 
Revised:
 
Cross Reference:   802.8 Financial Records
 
Legal Reference: Iowa Code §§ 257.31(4); 279.8; 297.22-.25; 298A (2011).

803

803.1 Purchasing and Bidding

F. C. SCHOOL BOARD POLICIES
 
Series 800 - Business Procedures
 
Purchasing and Bidding                         Code No. 803.1
 

The board supports economic development in Iowa, particularly in the school district community. As permitted by law, purchasing preference will be given to Iowa goods and services from locally-owned businesses located within the school district or Iowa based companies if the cost and other considerations are relatively equal and meet the required specifications. However, when spending federal Child Nutrition Funds, geographical preference is allowed only for unprocessed agricultural food items. Other statutory purchasing preferences will be applied as provided by law, including goals with regard to procurement from certified targeted small businesses, minority-owned businesses, and female owned businesses. 
 
Prior to August 15 of each year and after analyzing the school district's anticipated procurement level for the current fiscal year, the school board will set a goal of ten percent of the anticipated procurement level to be purchased from certified targeted small businesses. In determining the procurement level, the cost of utilities (heat, electricity, telephone and natural gas) and employees' costs will not be included.  After the goal has been established, the superintendent will file the required Targeted Small Business Procurement form with the Department of Education by August 15.
 
By July 31 of each year, the superintendent will file a report with the Department of Education outlining purchases of goods and services from targeted small businesses for the previous fiscal year.
 
The school board and superintendent will encourage targeted small businesses which are not certified with the Department of Inspections and Appeals to become certified targeted small businesses.
 
Goods and Services 
The board shall enter into goods and services contract(s) as the board deems to be in the best interest of the school district. It shall be the responsibility of the superintendent to approve purchases, except those requiring board approval or as provided by in law. The superintendent may coordinate and combine purchases with other governmental bodies to take advantage of volume price breaks. Joint purchases with other political subdivisions will be considered in the purchase of equipment, accessories, or attachments with an estimated cost of $50,000 or more. 
 
Purchases for goods and services shall conform to the following: 
The superintendent shall have the authority to authorize purchases without prior board approval and without competitive request for proposals, quotations, or bids for goods and services up to $25,000. 
For goods and services costing at least $25,000 and up to $134,999, the superintendent shall receive proposals, quotations, or bids for the goods and services to be purchased prior to board approval. The quotation process may be informal, and include written or unwritten quotations.
For goods and services exceeding, $135,000, the competitive request for proposal (RFP) or competitive bid process shall be used and received prior to board approval. RFPs and bids are formal, written submissions via sealed process. 
 
In the event that only one quotation or bid is submitted, the board may proceed if the quotation or bid meets the contract award specifications. 

 

The contract award shall be based on the total cost considerations including, but not limited to the following:
 
The cost of the goods and services being purchased; 
Availability of service and/or repair; 
The targeted small business procurement goal and other statutory purchasing preferences; and 
Other factors deemed relevant by the board. 
 
Purchases using federal child nutrition funds shall be made in accordance with procurement procedures required by law.
 
The thresholds and procedures related to purchases of goods and services do not apply to public improvement projects. 
 
Public Improvements
The board shall enter into public improvement contract(s) as the board deems to be in the best interest of the school district. ‘Public improvement’ means “a building or construction work which is constructed under the control of a governmental entity and is paid for in whole or in part with funds of the governmental entity, including a building or improvement constructed or operated jointly with any public or private agency.” 
 
The district shall follow all requirements, timelines, and processes detailed in Iowa law related to public improvement projects. The thresholds regarding when competitive bidding or competitive quotations is required will be followed. Competitive bidding is required for public improvement contracts exceeding the minimum threshold stated in law. Competitive quotations are required for public improvement projects that exceed the minimum threshold amount stated in law, but do not exceed the minimum set for competitive bidding. The board shall approve competitive bids and competitive quotes. If the total cost of the public improvement does not warrant either competitive bidding or competitive quotations, the district may nevertheless proceed with either of these processes, if it so chooses. 
 
The award of all contracts for the public improvement shall be awarded to the lowest responsive, responsible bidder. In the event of an emergency requiring repairs to a school district facility that exceed bidding and quotation thresholds, please refer to sample policy 802.3. 
 
The superintendent may develop an administrative process to implement this policy. 
 
NOTE: While Iowa law dictates threshold amounts for quotes and bids for public improvement projects, there is no such requirement for goods and services. The district has discretion in this area to set the amounts required for the purchasing process. 
 
NOTE: Districts should compare the discretionary purchasing limits in the section regarding goods and services with purchasing limits set in other policies (e.g., expenditures) to ensure consistency. 
 
Legal Reference:          Iowa Code §§ 26; 28E; 72.3; 73; 73A; 285; 297; 301.
                                    261 I.A.C. 54.
                                    281 I.A.C. 43.25.
                                    481 I.A.C. 25.

 
Legal Reference:          Iowa Code §§ 26; 28E; 72.3; 73; 73A; 285; 297; 301.
                                    261 I.A.C. 54.
                                    281 I.A.C. 43.25.
                                    481 I.A.C. 25.

               

Review:  3-14-94    7-12-99    09-09-10  3-19-12  1-12-15  12-12-16
 
Revision:  12-9-91     6-14-07 4-9-12  12-12-16
                                                                  
Cross References:
 
Legal References: Chapter 26. Section 297.8. Section 573.2. 2007 Code of Iowa 

803.2 Requisitions

F. C. SCHOOL BOARD POLICIES
 
Series 800 - Business Procedures
 
Requisitions                                         Code No. 803.2
 
Requisitions for equipment, supplies, and services are to be made on the properly authorized forms.  The authorized requisition form must be signed by officially designated personnel before being processed.
 
 
 
 
 
Adoption: 6-24-75
                             
Review: 3-14-94  7-12-99    09-09-10  3-14-16
           
Revision:
                                                                                                  
Cross References:
 
Legal References

803.3 Requisitions/Purchase Orders

 F. C. SCHOOL BOARD POLICIES
 
Series 800 - Business Procedures
 
Requisitions/Purchase Orders                         Code No. 803.3
 
The procurement of all supplies, equipment, and services shall begin with the issuance of an official purchase order signed by the superintendent of schools or by an authorized member of the staff.  Only those supplies, equipment, and services procured by formal contract shall be exempt.
 
Direcctors may forego purchase order requests by individual authorization of each invoice.
 
 
 
 
Adoption: 3-13-89
                               
Cross References:803.1
 
Review: 7-17-89  7-12-99   09-09-10 3-14-16 4-11-16
                                         
Revision:  3-14-94     4-11-16                                                                              
 
Legal References: 

803.4 Receiving Supplies and Equipment

F. C. SCHOOL BOARD POLICIES
 
Series 800 - Business Procedures
 
Receiving Supplies and Equipment Code No. 803.4
 
Whenever possible, all supplies and equipment purchased in the name of the School District shall be cleared through the business manager, support staff director, or the building principal.  Whenever this procedure is impossible and/or impractical, the district office shall be notified by the school personnel receiving such equipment, supplies, and services that such has been delivered.
 
It shall be the duty of the business manager, support staff director, or the building principal to certify the receipt of all equipment, supplies, and services.
 
 
 
Adoption: 3-13-89
                               
Review: 7-17-89   3-14-94  7-12-99   09-09-10  3-14-16
      
Revision:
                                                         
Cross References:
 
Legal References: 

803.5 Approval and Payment for Goods and Services

F. C. SCHOOL BOARD POLICIES
 
Series 800 - Business Procedures
 
Approval and Payment for Goods and Services           Code No. 803.5
 

The board supports economic development in Iowa, particularly in the school district community.  As permitted by law, purchasing preference will be given to Iowa goods and services from locally-owned businesses located within the school district or Iowa based companies if the cost and other considerations are relatively equal and meet the required specifications.  However, when spending federal Child Nutrition Funds, geographical preference is allowed only for unprocessed agricultural food items.  Other statutory purchasing preferences will be applied as provided by law, including goals with regard to procurement from certified targeted small businesses, minority-owned businesses, and female owned businesses.  

Prior to August 15 of each year and after analyzing the school district’s anticipated procurement level for the current fiscal year, the school board will set a goal of ten percent of the anticipated procurement level to be purchased from certified targeted small businesses.  In determining the procurement level, the cost of utilities (heat, electricity, telephone and natural gas) and employees’ costs will not be included.  After the goal has been established, the superintendent will file the required Targeted Small Business Procurement form with the Department of Education by August 15. 

By July 31 of each year, the superintendent will file a report with the Department of Education outlining purchases of goods and services from targeted small businesses for the previous fiscal year.  

The school board and superintendent will encourage targeted small businesses which are not certified with the Department of Inspections and Appeals to become certified targeted small businesses.  

Goods and Services
The board shall enter into goods and services contract(s) as the board deems to be in the best interest of the school district.  It shall be the responsibility of the superintendent to approve purchases, except those requiring board approval or as provided by in law.  The superintendent may coordinate and combine purchases with other governmental bodies to take advantage of volume price breaks.  Joint purchases with other political subdivisions will be considered in the purchase of equipment, accessories, or attachments with an estimated cost of $50,000 or more.

Purchases for goods and services shall conform to the following:

•    The superintendent shall have the authority to authorize purchases without prior board approval and without competitive request for proposals, quotations, or bids for goods and services up to $(insert amount).
•    For goods and services costing at least $(insert amount) and up to $(insert amount), the superintendent shall receive proposals, quotations, or bids for the goods and services to be purchased prior to board approval.  The quotation process may be informal, and include written or unwritten quotations.
•    For goods and services exceeding, $(insert amount-this number should be the same as the last amount in bullet two above), the competitive request for proposal (RFP) or competitive bid process shall be used and received prior to board approval.  RFPs and bids are formal, written submissions via sealed process.
In the event that only one quotation or bid is submitted, the board may proceed if the quotation or bid meets the contract award specifications.

The contract award shall be based on the total cost considerations including, but not limited to the following:
•    The cost of the goods and services being purchased;
•    Availability of service and/or repair;
•    The targeted small business procurement goal and other statutory purchasing preferences; and 
•    Other factors deemed relevant by the board.

Purchases using federal child nutrition funds shall be made in accordance with procurement procedures required by law.

The thresholds and procedures related to purchases of goods and services do not apply to public improvement projects.

Public Improvements
The board shall enter into public improvement contract(s) as the board deems to be in the best interest of the school district.  ‘Public improvement’ means “a building or construction work which is constructed under the control of a governmental entity and is paid for in whole or in part with funds of the governmental entity, including a building or improvement constructed or operated jointly with any public or private agency.”

The district shall follow all requirements, timelines, and processes detailed in Iowa law related to public improvement projects.  The thresholds regarding when competitive bidding or competitive quotations required will be followed.  Competitive bidding is required for public improvement contracts exceeding the minimum threshold stated in law.  Competitive quotations are required for public improvement projects that exceed the minimum threshold amount stated in law, but do not exceed the minimum set for competitive bidding.  The board shall approve competitive bids and competitive quotes.  If the total cost of the public improvement does not warrant either competitive bidding or competitive quotations, the district may nevertheless proceed with either of these processes, if it so chooses.

The award of all contracts for the public improvement shall be awarded to the lowest responsive, responsible bidder.  In the event of an emergency requiring repairs to a school district facility that exceed bidding and quotation thresholds. 

 
Adoption: 6-24-75
                               
Review: 7-17-89  3-14-94  7-12-99    09-09-10 3-14-16
                                          
Revision: 3-09-09  3-14-16
                                                                                  
Cross References: Code 803.6
 
Legal References:  279.36; 291.8; 291.12; 279.30

803.6 Unpaid Warrants

F. C. SCHOOL BOARD POLICIES
 
Series 800 - Business Procedures
 
Unpaid Warrants                                       Code No. 803.6
 
Only in the case of absolute necessity will the board issue warrants for which no funds are available.  In such a case, the board secretary shall institute the procedures required by the Code of Iowa, Chapter 74, Sections 1-7, for payment of the warrants.  All borrowing will be through the Iowa Schools Cash anticipating Program (ISCAP).
 
 
Adoption: 3-13-89
                               
Review: 7-17-89   7-12-99    09-09-10  3-14-16
                   
Revision:  3-14-94
                                                                                 
Cross References:
 
Legal References:    74.1 through 74.7 

803.7 Payroll Periods

F. C. SCHOOL BOARD POLICIES
 
Series 800 - Business Procedures
 
Payroll Periods                                       Code No. 803.7
 
It shall be the policy of the Board of Directors that all personnel of the school district be paid monthly in accordance with the length of service stated on their contracts, and that all personnel shall be paid as follows:
 
 
  1. All personnel will be paid on the twenty-fifth (25) day of each month.  If this date falls on a week-end or holiday, checks will be issued on the first previous working day.
  2. Professional personnel, in their first year of teaching, may, upon request, receive one half of their first month's salary following two weeks of service.
 
Adoption: 6-24-75
                               
Review: 7-17-89  3-14-94  7-12-99    09-09-10  3-14-16
 
Revision:  
                                                                                                
Cross References:  402.4; 408.3; 803.8
     
Legal References:  20.9 

803.8 Payroll Deductions

F. C. SCHOOL BOARD POLICIES
 
Series 800 - Business Procedures
 
Payroll Deductions                                     Code No. 803.8
 
Payroll deductions shall consist of federal income tax withholdings, Iowa income tax withholdings, social security, and the Iowa Public Employees' Retirement System.  In addition, any employee may elect to have payments withheld for professional dues, United Way Fund, direct deposits, district-related and mutually agreed-upon group insurance coverage, and/or tax sheltered annuity program.  Any and all deductions may be revoked 30 days after receiving a written request from the employee.
 
 
Adoption: 3-13-89
                                 
Review: 7-17-89   3-14-94 7-12-99   09-09-10  3-14-16
                              
Revision:
                                                                                                  
Cross References: 402.4; 408.3; 803.7
 
Legal References:  294.8; 294.15; 294.16

803.9 Travel Allowance

F. C. SCHOOL BOARD POLICIES
 
Series 800 - Business Procedures
 
Travel Allowance                                     Code No. 803.9
 
All personnel of the school district shall be reimbursed for travel expenses incurred for travel outside the district authorized by the superintendent of schools.
 
Travel shall be (1) by common carrier when such transportation is available and will serve the time schedule of the individual;  or (2) by private automobile.  If the individual chooses to go by automobile, the maximum travel cost shall not exceed the cost of economy/coach class air travel.
 
The rates for reimbursement shall be for actual expenses incurred, plus a per-mile rate set by the board for use of a private automobile or similar conveyance.  An itemized account of all expenses, accompanied by receipted hotel/motel bills for overnight lodging, shall be presented to the board for payment.
 
All administrative personnel shall be reimbursed for any travel necessary to the performance of their assigned duties.  This does not include travel between their homes and their offices.
 
All other personnel shall be reimbursed for any travel from the building in which they normally begin their day of service.  This does not include travel to and from work and home.
 
 
 
Adoption:  3-13-89
                                  
Review:    7-17-89   3-14-94 7-12-99   10-11-10  3-14-16                                                                 
Revision:
                                                                                                    
Cross References:
 
Legal References:  79.9; 279.32

803.10 Special Assessments

F. C. SCHOOL BOARD POLICIES
 
Series 800 - Business Procedures
 
Special Assessments                                   Code No. 803.10
 
When it is deemed necessary, the Board of Directors shall seek the advice of its attorney in cases of special assessments against the school district.  The recommendations of the attorney shall be given careful consideration in formulating any recommended action of the Board of Directors in a special assessment case.
 
 
 
Adoption:  6-24-75
                                
Review:   7-17-89   3-14-94 7-12-99   10-11-10  3-14-16
           
Revision:
                                                                                                  
Cross References: Code 203.7
 
Legal References:

804

804.1 Secretary's Monthly Report

F. C. SCHOOL BOARD POLICIES
 
Series 800 - Business Procedures
 
Secretary's Monthly Report   Code No. 804.1
 
The secretary of the board shall file each month with the Board of Directors a financial statement of the preceding month's business.  When possible this statement shall be enclosed with the agenda sent to the members of the board prior to the regular monthly meeting.
 
 
Adoption:  6-24-75
                               
Review:    7-17-89   3-14-94  7-12-99   10-11-10    4-11-16                                                             
Revision:
                                                                                                  
Cross References:   
 
Legal References:  Chapter 291.7

804.2 Publication of Minutes and Claims

F. C. SCHOOL BOARD POLICIES
 
Series 800 - Business Procedures
 
Publication of Minutes and Claims                     Code No. 804.2
 
 
Publication of Minutes
Section 279.35 requires publications of "the proceedings of each regular, adjourned, or special meeting of the board."  That section requires the secretary to "furnish a copy of the proceedings to be published within two weeks of adjournment of the meeting."  Publication will be "in at least one newspaper published in the district or, if there is more, in at least one newspaper having general circulation in the district."
 
Section 618.3 sets the standards for a newspaper published within the area as being regularly mailed issues for at least two years; having a list of subscribers who pay for copies; devoting at least 25% of its column space in at least half of its issues during a 12-month period to information of public character other than advertising; and being paid for by at least 50% of the persons or subscribers to whom it is distributed.
 
Section 618.8 provides that if a newspaper refuses to publish proceedings, publication may be made in another newspaper of general circulation at or nearest to the county seat.
 
Publication of Claims
Section 279.35 and 279.36, as amended, provide that the schedule of bills approved must be published as a part of the proceedings (or minutes); however, the schedule of bills may be published once a month instead of being included in the proceedings (or minutes) of each board meeting.
 
A list of claims shall include the name of the person or firm making the claim, the purpose of the claim, and the amount of the claim.  However, salaries paid to individuals regularly employed by the district shall only be published annually and the publication shall include the total amount of the annual salary of each employee.
 
 
 
Adoption: 3-13-89
                               
Review: 7-17-89    3-14-94  7-12-99   10-11-10  4-11-16
                                                  
Revision:
                                                                                                  
Cross References:
 
Legal References:  Chapters 279.34; 279.35; 279.36; 618.3; 618.8

804.3 Annual Financial Statement, Publishes

F. C. SCHOOL BOARD POLICIES
 
Series 800 - Business Procedures
 
Annual Financial Statement, Published Code No. 804.3
 
The Board of Directors shall cause to have published, as soon as possible following the annual meeting of each year and in at least one newspaper in the district, a summarized statement verified by affidavit of the secretary of the board showing the receipts and disbursements of all funds for the preceding fiscal year.  Annual payroll disbursements shall be included in this publication, listing total annual payments to each individual.
 
 
Adoption:  3-13-89
                                 
Review:  7-17-89    3-14-94  7-12-99    10-11-10  4-11-16
                                                     
Revision :
                                                                                                  
Cross References:
 
Legal References:  279.32 through 279.34 

804.4 Audit

F. C. SCHOOL BOARD POLICIES
 
Series 800 - Business Procedures
 
Audit                                                 Code No. 804.4
 
The board shall employ an auditing agency to perform an annual audit of the financial affairs of the school district.  The administration shall cooperate with the auditors.
 
It shall be the responsibility of the superintendent to recommend to the board an auditing agency to review the school district's financial affairs.
 
Results of the audit shall be made part of the official records of the board.
 
 
Adoption: 3-13-89  
                               
Review: 7-17-89   7-12-99   10-11-10  4-11-16
                                                                
Revised: 3-14-94
                                                                  
Cross References:
 
Legal References:   11.18 (1989); 281; AC 12.3(10)

805

805.1 Examination of School District Public Records

F C. SCHOOL BOARD POLICIES
 
Series 800 - Business Procedures
 
Examination of School District Public Records Code No. 805.1
 
Public records of the school district may be viewed by the public during the regular business hours of the administrative office of the school district.  These hours are 8:00 a.m. to 4:00 p.m. Monday through Friday, except for holidays and recesses.
 
Persons wishing to review the school district's public records shall contact the board secretary and make arrangements for the viewing.  The board secretary will make arrangements for anyone to view the records as soon as practicable, depending on the nature of the request.
 
Persons wanting copies may be assessed a fee for the copy.  Persons wanting compilation of data may be assessed a fee for the time of the school district employee to compile such data.
 
Records defined by law as confidential records shall only be viewed or copied upon receipt of written permission by the board secretary from the person or entity whose confidential records are being requested.
 
The board secretary shall be the custodian of school district and board records.  It shall be the responsibility of the board secretary to respond in a timely manner to requests for viewing and receiving public records of the school district.
 
 
 
 
Adoption: 3-13-89
                               
Review: 7-17-89   3-14-94  7-12-99     10-11-10  4-11-16
 
Revision:
                                                                                                   
Cross References:
 
Legal References:  21.4; 22 (1989); 281; AC 12.3(1)

805.2 School District Records

F. C. SCHOOL BOARD POLICIES

Series 800 - Business Procedures

School District Records Code No. 805.2

School District records shall be housed in the administrative offices or in a fireproof vault of the school district. It shall be the responsibility of the board secretary to oversee the maintenance and accuracy of the records. The following records shall be kept and preserved, according to the schedule below:

Secretary's financial records Permanently
Treasurer's financial records Permanently
Open meeting minutes of the Board of Directors Permanently
Recordings and minutes of closed meetings 1 year
Annual audit reports Permanently
Annual budget Permanently
Permanent record of individual pupil Permanently
Records of payment of judgments against the
school district 20 years
Bonds and bond coupons 11 years after maturity, cancellation,, transfer, redemption, and/or replacement
Written contracts 10 years
Canceled warrants, check stubs, bank statements, bills, invoices, and related records 5 years
Program grants As determined by the grant
School election results Permanently
Real property records 9e.g., deeds, abstracts) Permanently
Nonpayroll personnel records 10 years after leaving district
Employment applications 2 years
Payroll record 3 years
School meal programs accounts/records 3 years after submission of the final claim for reimbursement

In the event that any federal or state agency require a record be retained for a period of time longer than that listed above for audit purposes or otherwise, the record shall be retained beyond the listed period as long as is required for the resolution of the issue by the federal or sate agency.

Personnel records shall be housed in the administrative offices of the school district. The personnel records shall be maintained by the superintendent, principal, and the board secretary.

An inventory of the furniture, equipment, and other non-consumable items other than real property of the school district shall be conducted annually under the supervision of the superintendent. This report shall be filed with the board secretary.
A perpetual inventory shall be maintained on consumable property of the school district.

The permanent and cumulative records of students currently enrolled in the school district shall be housed in the administrative office of the attendance center where the student attends. Permanent records must be housed in a fireproof vault or electronically with a secure backup file. The building principal shall be responsible for keeping these records current. Records of students who have graduated or are no longer enrolled in the school district shall be housed in the central administrative office or in a fireproof vault. These records will be maintained by the board secretary. Special education records shall be maintained in accordance with law.

The secretary is authorized, after microfilming the board's records, to destroy, by burning or shredding, paper records that have been in the board secretary's custody for three years. Properly authenticated reproduction of a microfilmed record meets the same legal requirements as the original record.

Note: The last paragraph of this policy refers to microfilming the records after three years. Microfilming is one means of preservation. Today, you may also use the videodisc. The goal of storing documents on microfilm or videodisc is to preserve the document with signatures, original letterhead, and so on. Preservation of only the text of a document on a computer disk is insufficient for signatures, but may be all right for student records, inventories and so forth.

Under S.F. 2278, the school guidance counselor shall not, in giving testimony, disclose any confidential communications necessary and proper to enable the counselor to perform the counselor's duties and any confidential communications properly entrusted to the counselor by a pupil or the pupil's parent in the counselor's capacity as the school guidance counsel.

Adoption 3-13-89 Cross References:
Review 7-17-89 3-14-94 7-12-99 10-11-10 1-11-16 4-11-16
Revision

Legal References: 22.2; .3; .7; 279.8; 279.15-.16; 291.6-.11; 304; 670; AC 3.3(10); .3(11); 281; AC 12.3(1); .3(6)

806

806.1 Insurance Program

F. C. SCHOOL BOARD POLICIES
 
Series 800 - Business Procedures
 
Insurance Program Code No. 806.1
 
The board will maintain a comprehensive insurance program to provide adequate coverage against major types of risk, loss, or damage, as well as legal liability.  The board will purchase insurance at replacement values, when possible, after reviewing the costs and availability of such insurance.  The comprehensive insurance program shall be reviewed once every three years.  Insurance will only be purchased through legally licensed Iowa insurance agents.
 
The school district will assume the risk of property damage, legal liability, and dishonesty in cases in which the exposure is so small or dispersed that a loss does not significantly affect the operation of the education program or financial condition of the school district.
 
Insurance of buildings, structures, or property in the open will not generally be purchased to cover loss exposures below $1,000 unless such insurance is required by statute or contract.
 
The board may retain a private organization for fixed assets management services.
 
Administration of the insurance program, making recommendations for additional insurance coverage, placing the insurance coverage and loss prevention activities shall be the responsibility of the board secretary/business manager.  The board secretary/business manager shall be responsible for maintaining the fixed assets management system, processing claims and maintaining loss records.
 
 
Adoption: 4-9-79
 
Review: 3-14-94  7-12-99  10-11-10  4-11-16
 
Revision: 10-12-06
 
Cross References:  Code 206.5 Board Member Insurance
 
Legal Reference: Iowa Code §§ 20.9; 85.2; 279.12, .28; 285.5(6), .10(6); 296.7; 298A; 517A.1; 670.7 (1997). ;1974 Op. Att'y Gen. 171. ;1972 Op. Att'y Gen. 676.

806.2 Periodic Review of Insurance Program

F. C. SCHOOL BOARD POLICIES
 
Series 800 - Business Procedures
 
Periodic Review of Insurance Program Code No. 806.2
 
The Board of Directors shall periodically review the insurance program of the school district to ensure adequate coverage.  Such review may be made annually, but must be made at least once every three years.
 
The superintendent of schools--after consultation with the agent of record and any other individuals or organizations--shall make recommendations for the district's insurance coverage.
 
Adoption:3-13-89
                                
Review: 7-17-89   3-14-94  7-12-99   10-11-10  4-11-16
 
Revision:
                                                                                                 
Cross References: Code  806.1
 
Legal References: 

806.3 Bonds for Officers and Employees

F. C. SCHOOL BOARD POLICIES
 
Series 800 - Business Procedures
 
Bonds for Officers and Employees                      Code No. 806.3
 
The Secretary and Treasurer of the Board of Directors shall each give bond to the School District in such amount as required by statute.
 
All other employees shall be covered by a blanket bond. 
 
 
Adoption: 4-9-79
                                     
Review: 3-14-94    7-12-99   5-11-06    10-11-10  4-11-16
                                                  
Revision: 10-12-06
                                                                                    
Cross References:
 
Legal References:   291.2; 291.3

807.1 Debt Management

F. C. SCHOOL BOARD POLICIES
 
Series 800 - Business Procedures
 
 
Debt Management                     Code No. 807.1
 
DEBT LIMITS
Credit Ratings
The school district seeks to maintain the highest possible credit ratings for all categories of short-and long-term debt that can be achieved without compromising the delivery of services and the achievement of adopted objectives.  The school district recognizes that external economic, natural, or other events may from time to time affect the creditworthiness of its debt.  Nevertheless, the school district is committed to ensuring that actions within their control are prudent.
 
Debt Limits
For general obligation debt, the school district’s outstanding debt limit shall be no more than five percent (5%) of the actual value of property within the school district’s boundaries, as prescribed the Iowa constitution and statutory restrictions.
 
For revenue debt, the school district’s goal is to provide adequate debt service coverage of at least 1.20 times the annual debt service costs.
 
In accordance with Iowa law, the school district may not act as a conduit issuer or issue municipal securities to raise capital for revenue-generating projects where the funds generated are used by a third party (“conduit borrower”) to make payments to investors.
 
PURPOSES AND USES OF DEBT
Capital Planning
To enhance creditworthiness and prudent financial management, the school district is committed to systematic capital planning, intergovernmental cooperation and coordination and long-term financial planning.
 
Capital Financing
The school district may issue long-term debt for capital projects as authorized by Iowa law, which include, but are not limited to, the costs of planning, design, land acquisition, buildings, permanent structures, attached fixtures or equipment, and movable pieces of equipment.  Capitalized interest may be included in sizing any capital project debt issue.  The types of debt instruments to be used by the school district include:
 
General Obligation Bonds
General Obligation Capital Loan Notes
Bond Anticipation Notes
Revenue Anticipation Notes
School Infrastructure Sales, Services and Use Tax Revenue Bonds
Lease Purchase Agreements, including Certificates of Participation
 
Working Capital Financing
The school district may issue debt for working capital for operations after cash flow analysis has determined that there is a mismatch between available cash and cash outflows.  The school district shall strive to repay working capital debt by the end of the fiscal year in which the debt was incurred.  A Working Capital Reserve may be included in sizing any working capital debt issue.  
 
Refundings
Periodic reviews of all outstanding debt will be undertaken to determine if refunding opportunities exist.  Refunding will be considered (within federal tax law restraints) if and when there is a net economic benefit of the refunding or if the refunding is otherwise in the best interests of the school district, such as to release restrictive bond covenants which affect the operations and management of the school district.
 
In general, advance refundings for economic savings will be undertaken when a net present value savings exceeds three percent of the refunded debt can be achieved.  Current refundings, which produce a new present value savings of less than three percent will be considered on a case by case basis taking into consideration bond covenants and general conditions.  Refundings with negative savings will not be considered unless there is a compelling public policy objective for doing so.
 
DEBT STANDARDS AND STRUCTURE
Length of Debt
Debt will be structured for the shortest period consistent with a fair allocation of costs to current and future beneficiaries or users.  Long-term debt will not be issued for periods exceeding the useful life or average useful lives of the project or projects to be financed.  All debt issued will adhere to state and federal law regarding the length of time the debt may be outstanding.
 
Debt Structure
Debt will be structured to achieve the lowest possible net cost to the school district given market conditions, the urgency of the capital project, the type of debt being issued, and the nature and type of repayment source.  To the extent possible, the school district will design the repayment of its overall debt to rapidly recapture its credit capacity for future use.
 
Generally, the school district will only issue fixed-rate debt.  In very limited circumstances, the school district may issue variable rate debt, consistent with the limitations of Iowa law and upon a finding of the board that the use of fixed rate debt is not in the best interest of the school district and a statement of the reasons for the use of variable rate debt.
 
All debt may be structured using discount, par or premium coupons, and as serial or term bonds or notes, or any combination thereof, consistent with Iowa law.  The school district should utilize the coupon structure that produces the lowest True Interest Cost (TIC) taking into consideration the call option value of any callable maturities.
 
The school district will strive to structure their debt in sinking fund installments for each debt issue that achieves, as nearly as practicable, level debt service within an issue or overall debt service within a particular classification of debt.
 
Derivatives (including, but not limited to, interest rate swaps, caps, collars, corridors, ceiling and floor agreements, forward agreements, float agreements, or other similar financing arrangements), zero-coupon or capital appreciation bonds are not allowed to be issued consistent with State law.
 
Decision Analysis to Issue Debt
Whenever the school district is contemplating the issuance of debt, information will be developed concerning the following four categories commonly used by rating agencies assessing the school district’s credit worthiness, listed below.
 
Debt Analysis-Debt capacity analysis; purpose for which debt is proposed to be issued; debt structure; debt burden; debt history and trends; and adequacy of debt and capital planning.
 
Financial Analysis-Stability, diversity, and growth rates of tax or other revenue sources; trend in assessed valuation and collections; current budget trends; appraisal of past revenue and expenditure trends; history and long-term trends of revenues and expenditures; evidences of financial planning; adherence to GAAP; audit results; fund balance status and trends in operating and debt funds; financial monitoring systems and capabilities; and cash flow projections.
 
Governmental and Administrative Analysis-Government organization structure; location of financial responsibilities and degree of control; adequacy of basic service provision; intergovernmental cooperation/conflict and extent of duplication; and overall planning efforts.
 
Economic Analysis-Geographic and location advantages; population and demographic characteristics; wealth indicators; types of employment, industry and occupation; housing characteristics; new construction; evidences of industrial decline; and trend of the economy.
 
DEBT ISSUANCE
Credit Enhancement
Credit enhancements (.i.e., bond insurance, etc.) may be used but only when the net debt service on the debt is reduced by more than the costs of the credit enhancement.
 
Costs and Fees
All costs and fees related to issuing the debt will be paid out of debt proceeds and allocated across all projects receiving proceeds of the debt issue.
 
Method of Sale
Generally, all school district debt will be sold through a competitive bidding process.  Bids will be awarded on a TIC basis providing other bidding requirements are satisfied.
 
The school district may sell debt using a negotiated process in extraordinary circumstances when the complexity of the issue requires specialized expertise, when the negotiated sale would result in substantial savings in time or money, or when market conditions of school district credit are unusually volatile or uncertain.
 
Professional Service Providers
The school district will retain external bond counsel for all debt issues.  All debt issued by the school district will include a written option by bond counsel affirming that the school district is authorized to issue the debt, stating that the school district has met all Iowa constitutional and statutory requirements necessary for issuance and determining the debt’s federal income tax status.  The bond counsel retained must have comprehensive municipal debt experience and a thorough understanding of Iowa law as it relates to the issuance of the particular debt.
 
The school district will retain an independent financial advisor.  The financial advisor will be responsible for structuring and preparing all offering documents for each debt issue.  The finical advisor retained will have comprehensive municipal debt experience, experience with diverse financial structuring and pricing of municipal securities.
 
The treasurer shall have the authority to periodically select other service providers (e.g., escrow agents, verification agents, trustees, arbitrage consultants, rebate specialist, etc.) as necessary to meet legal requirements and minimize net debt costs.  These services can include debt restructuring services and security or escrow purchase.
 
Compensation for bond counsel, financial advisor and other service providers will be as economical as possible and consistent with industry standards for the desired qualification levels.
 
DEBT MANAGEMENT
Investment of Debt Proceeds
The school district shall invest all proceeds received from the issuance of debt separate from the school district’s consolidated cash pool unless otherwise specified by the authorizing bond resolution or trust indenture.  Investments will be consistent with those authorized by Iowa law and the school district’s Investment Policy to maintain safety of principal and liquidity of the funds.
 
Arbitrage and Record Keeping Compliance
The treasurer shall maintain a system of record keeping reporting and compliance procedures with respect to all federal tax requirements which are currently, or may become applicable through the lifetime of all tax-exempt or tax credit bonds.
 
Federal tax compliance, record-keeping reporting and compliance procedures shall include not shall not be limited to:
  1. post-issuance compliance procedures (including proper use of proceeds, timely expenditure of proceeds, proper use of bond financed property, yield restriction and rebate, and timely return filing);
  2. proper maintenance of records to support federal tax compliance;
  3. investments and arbitrage compliance;
  4. expenditures and assets;
  5. private business use; and
  6. designation of primary responsibilities for federal tax compliance of all bond financings.
 
Financial Disclosure
The school district is committed to full and complete financial disclosure, and to cooperating fully with rating agencies, institutional and individual investors, other levels of government, and the general public to share comprehensible and accurate financial information.  The school district is dedicated to meeting secondary disclosure requirements on a timely and comprehensive basis, as promulgated by the Securities and Exchange Commission.
 
The Official Statements accompanying debt issues, Annual Audits, and Continuing Disclosure statements will meet the standards articulated by the Municipal Securities Rulemaking Board (MSRB), the Governments Accounting Standards Board (GASP), the Securities and Exchange Commission (SEC), Generally Accepted Accounting Principles (GAAP) and the Internal Revenue Service (IRS).  The treasurer shall be responsible for ongoing debt disclosure as required by any Continuing Disclosure Certificate for any debt issue and for maintain compliance with disclosure standards promulgated by state and federal regulatory bodies.
 
 
 
Adoption   9-9-13
Review      9-9-13
Revision  
Cross References:  701 Financial Accounting System; 704 Revenue
Legal References:  Iowa Code 74-76; 278.1; 298; 298A (2013)