What is Fund Balance?

As part of the equation to balance the budget, the Superintendent’s proposed budget includes the use of $10.2m in fund balance. Fund balance is the money that hasn’t been spent by the end of the prior fiscal year and reported on our annual audit for that year. There are several reasons why money may not be spent, including position vacancies, budget freezes and or in some cases where contracted costs end up coming in lower than the budgeted amount. 

During the COVID-19 pandemic, HCPSS experienced large fund balances at the conclusion of the fiscal year due to COVID grants we received and other savings experienced (such as substitute wages, transportation, utilities, etc.). With those grants expiring, we no longer have the excessive balance we have had in recent years. 

The use of fund balance is also not ideal for recurring costs because the money may only be available for one year. Nonetheless, the $10.2m of anticipated fund balance is being proposed to be used as opposed to additional budget reduction strategies having to be implemented.

The information contained in this answer relates to the Superintendent’s FY 2025 Proposed Operating Budget, which was published on Jan. 18, 2024. The information is subject to change with the initial Board of Education Adopted Operating Budget on Feb. 29, 2024, the County Council Adopted Budget in May 2024, and the final Board of Education Operating Budget on May 23, 2024. View the full FY 2025 Operating Budget timeline and versions of each budget as they become available.