Obion County Board of Education
January 11, 2010

Background Information:

In reviewing policy, Board Policy #2.402 – Investment Earnings – may need revising.

On line 5, the policy states, “Interest earned on restricted fund accounts shall be credited to revenue in each restricted account.” Based on our latest annual audit, it does not appear that individual schools are making this allocation due to the enormous amount of time that such an allocation would take and the amount of interest for each activity would be nominal. In addition, none of the restricted fund accounts are paying a fair share of operating expenses involved in the finances, i.e., cost of checks, purchase orders, receipt books, deposit slips, etc. To keep standard practices intact, the above wording can be amended to state

Interest earned on restricted fund accounts shall be credited to revenue in the general activity fund in order to offset some of the operating expenses of each restricted activity.

Staff Recommendation:

I recommend that the Board approve the amendment to Board Policy #2.402 – Interest Earnings – on first reading.