Fund Transfers

Fund transfers are a part of operating school systems in Maryland. The schools operate on a financing system based on prior year enrollments, estimates, and trend lines. Funding is determined by State Statute, Federal Funding, and local County allocations.

Budgeting the money is based on required coding of revenues and expenditures in 15 distinct categories (compared to the typical three categories for a typical county department) and dozens of detail sub-groupings. Detail note - the Board of Education is a separate body politic, created by State legislation, funded in part by county taxes and reporting directly to the Maryland State Department of Education and the United States Department of Education.

As the year progresses, things change and we report all the changes as they occur. This means that if substitute employees cost a few percent more than estimated or fuel costs a little less, we need to make transfers. This means that if the funding originally planned for “regular” employees services is now required to be provided through “contracted” employees, we need to make transfers. Transfers do not increase overall expenditures; they adjust the same number of dollars to fit changes in operations and regulations.

The WCBOE has consistently taken an assertive position on protecting the bottom line over expending every line item completely. If a school system were not provided the flexibility to transfer funds between categories, as provided by in law, we would be forced to increase many line item budgets, if not all of them, to cover every possible scenario that might occur. This type of budgeting would result in inflated balances.

Instead, we develop budgets based upon projected need fine-tuned by using historical data to support our requests. We secure contract discounts through every means available, negotiate beneficial terms wherever possible, and aggressively manage our accounts payable to capture payment discounts offered. This method of budgeting saves the school system money.

When these funds have been saved, we have agreed with the County Council that part of the savings ($300,000) must be maintained to support WCBOE’s subsequent year’s budget and any remaining balance be transferred to a School Construction Savings Fund for WCBOE major capital projects to maintain or improve facilities. These projects have been reviewed by appropriate committees and are on a schedule for completion.