Budget Basics

Funds: How is the money distributed?

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Illinois law requires that a school district’s budget be divided into a variety of funds. The state regulates the revenues and expenses that can be accrued and paid out of each fund. For instance, teacher salaries must be paid out of the Educational Fund, not the Transportation Fund. State law also restricts transfers that can be made between funds. This helps ensure that a district does not, for instance, restrict transportation in order to pay teachers.

Operating Funds: Comprise the greatest portion of revenues and expenditures. Operating Funds cover the day-to-day costs of running the District.

  • Educational Fund: The largest fund. Used to account for most of the instructional, co-curricular, special education, pupil support, and administrative aspects of the District’s education operations on a day-to-day basis.
  • Operations and Maintenance Fund: For revenue and expenditures related to the operations and maintenance of the grounds and facilities, including utilities.
  • Transportation Fund: For revenue and expenditures relating to the transportation of special education students to and from school, for students attending off-campus sites, for field trips, and for athletic and activity events.

Restricted-Use Funds: Restricted by law to be used only for specific expenses.

  • Debt Service Fund: For the accumulation of resources for and the payment of principal and interest on general long-term debt and related costs.
  • Municipal Retirement/Social Security Fund: For the District’s portion of pension contributions to the Illinois Municipal Retirement Fund and for Social Security benefits for non-certified employees.
  • Capital Projects Fund: For proceeds resulting from bonds or other long-term finance agreements or construction or maintenance grants used to finance facility refurbishing and construction projects, capital lease, or lease purchase agreements.
  • Fire Prevention & Life Safety Fund: For state-approved fire prevention and safety construction projects through the issuance of general obligation bonded debt or property tax levy.
  • Working Cash Fund: For financial resources held by the District that may be temporarily loaned to other funds.
  • Tort Immunity Fund: For revenue and expenditures related to property, liability, and workers’ compensation insurance, legal fees, health-safety inspection fees, and safety-related maintenance and repair needs of the District.
  • Self-Insurance Funds—Internal Service Funds: Include the self-insurance medical and dental. The Illinois State Board of Education (ISBE) does not recognize self-insurance funds, so these are included in the Educational Fund for the ISBE Annual Financial Report.