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Education officials and VASBO push Vermont to adopt clearer guidance on school reserve funds
Summary
Witnesses told the Ways & Means Committee that clearer statewide guidance — not a statutory mandate — would help districts manage working capital and avoid inequities as Vermont moves toward a foundation formula and the Agency of Education begins rulemaking under Act 183.
Chris Duncombe, principal with the Education Commission of the States, told the Ways & Means Committee on Jan. 29 that state policies on local education agency fund balances vary widely and that most states set maximums while offering only guidance on minimum reserves. "The Government Finance Officers Association recommends a policy of maintaining a fund balance of no less than two months of regular general fund operating revenues," Duncombe said, citing the 2‑month (about 16.7%) GFOA floor as a common benchmark.
Representatives from the Vermont Association of School Business Officials urged the committee to ask the legislature to direct the Agency of Education to develop nonstatutory guidance tailored…
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