Excess and Deficiency Funds

Excess and Deficiency is the amount by which cash, accounts receivable, and other assets exceed a regional school district's liabilities and reserves. The E&D Report shows the data and calculations used in determining the certified excess & deficiency amount, based on the school district's balance sheet as of June 30.  All funds in the general account not expended by the close of the fiscal year will be placed in an excess and deficiency fund that shall not exceed five percent of the operating budget and its budgeted capital costs for the succeeding fiscal year. Any added funds exceeding five percent shall be returned to the member communities to reduce their assessments in accordance with law. (MERSD Policy DBJ). 

603 CMR 41.00: Regional School Districts

(1) Every regional school district shall maintain an excess and deficiency fund on its books of account. At the end of every fiscal year, any surplus or deficit in the district's general fund shall be closed to the excess and deficiency fund.

(2) On or before October 31st of each year, every regional school district shall submit to the Department of Revenue the forms and schedules as the Department of Revenue requires for the purpose of reviewing and certifying the balance in the regional school district's excess and deficiency fund. At the discretion of the Commissioner, the Department may withhold release of all or some part of the quarterly state school aid for the regional school district if the regional school district has not filed the required forms and schedules by such date.

(3) A regional school committee may use all or part of the certified balance in the excess and deficiency fund as a revenue source for its proposed budget. If the certified balance exceeds five percent of the proposed budget, the regional school committee shall use the amount in excess of five percent as a revenue source for its proposed budget.

Regulatory Authority:

603 CMR 41.00: M.G.L. c. 69, §1B; c. 71, §14B and §16D; c. 150E, §1.