Purpose
To establish a policy that governs CCS reserve funds, the purposes for which they can be used, and associated reporting requirements.
Introduction
The District’s ability to fulfill its mission for the benefit of current and future students depends on sound fiscal management and the maintenance of adequate financial reserves. Reserves are critical to the financial health of the colleges and the district and to preserve future flexibility. This policy establishes the framework for reserves including size, use and funding, as well as oversight and reporting requirements.
Policy Statement and Direction
- A. CCS will establish targets to maintain sufficient financial reserves to ensure responsible long- term fiscal management, advance priorities, and to mitigate current and future risk.
- B. CCS will define, build, maintain, use, and replenish reserves in accordance with strategic plans, these policies, and standards.
- C. To distinguish between unencumbered liquidity and reserves that are designated for a specific use, CCS will account for and report unrestricted net assets in the designations defined by this policy.
- D. The Chancellor shall maintain a Stabilization Fund Reserve to support district-wide operations in the event of an unanticipated disruption in planned funding or a catastrophic event. The Stabilization Reserve Fund shall be built and held centrally at the Chancellor’s Office. The recommended target balance and funding source(s) will be reviewed and determined by the Board annually as part of their budget adoption process.
Reporting
The Chancellor and the Chief Financial Officer (CFO) will annually review this policy. The CFO will report to the Board of Trustees (Board) regarding reserve levels upon the release of the district’s annual audited financial statements. The report will also include when funds are withdrawn from the Stabilization Fund Reserve and the plan for replenishment, as appropriate.
Administrative Procedure
The Chancellor, in consultation with District Cabinet, will maintain administrative procedures that define reserve targets, funding sources, and designations, and to otherwise implement this policy.
[Adopted 10/21/08; effective 10/21/08; Amended 07/16/24]
Procedures:
A. Designated Reserves
B. Operating Reserves