Funds for Local Schools

General Fund

The General Fund is covered in the Iowa Code, Chap. 257, which outlines the State Foundation Formula for funding schools in Iowa.

Some history regarding the State Foundation Formula: In 1971, the first State Foundation Program was created by the Iowa Legislature to fund Iowa schools based on the following goals:

1. provide a good education for all children of Iowa,
2. equalize educational opportunity for all students,
3. provide property tax relief,
4. decrease the percentage of school costs paid from property taxes, and to
5. provide reasonable control of school costs. (Iowa Code, Chap 442.13 (10)).

It is appropriate to note that the State Foundation Formula has been changed in every legislative session in some way or another since 1971. That is the reason why it is important to keep up on what changes are made each year by the Legislature.

Some general points about the State Foundation Formula:

1. It applies only to the school district's General Fund budget.
2. It sets out a ceiling for each school district's total spending authority or maximum authorized budget, and sets out the funding mechanism for the total spending authority.
3. It is "pupil driven" in that the funds are generated by the number of pupils or enrollment in the school district, multiplied by the cost per pupil assigned to those students.
4. School districts operate on a fiscal year, which begins July 1 and ends June 30.
5. The state of Iowa oversees the school district's fiscal matters in the following ways:
   1. The Iowa Department of Management (DOM) reviews all budgets and legal authority to make adjustments in the school district's budgets. This department also certifies the property tax levies for each school district to the county auditor and determines the amount each school district receives in state foundation aid.
   2. The Department of Education (DE) oversees every aspect of the school district's operation.
   3. The School Budget Review Committee (SBRC) is authorized to oversee the budgets and financial needs of Iowa's school districts.