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TUSD reports $4 million surplus in unaudited actuals; board debates reserve policy
Summary
Finance staff presented unaudited FY 2023–24 actuals showing a roughly $4 million positive swing to the unrestricted general fund driven by higher-than-expected interest revenue and targeted use of committed funds; the board approved the unaudited actuals and discussed reserve policy and interest-rate sensitivity.
Torrance Unified School District staff presented the unaudited actual financial statements for fiscal year 2023–24 and recommended revisions to 2024–25 ending fund balances; the board approved the unaudited actuals after questions from members.
The finance presentation noted the district had estimated a net operating deficit of about $429,000 for the unrestricted general fund but instead recorded a positive result of roughly $3.6 million, yielding a net favorable variance of approximately $4.0 million. Staff attributed most of the variance to higher interest revenue (about $6.0 million more than estimated) and the use of committed fund balances (about $2.7 million) earmarked for targeted student supports and mental-health services.
“While we estimated a slight deficit ... we actually ended up at a higher amount at 3,600,000.0,” the finance presenter said. Staff explained that interest income is reported by the county treasury and the district deliberately budgets conservatively for that item.
Board members pressed for clarity on restricted fund balances, how one-time COVID-era funds affected prior years, and whether variable interest rates could reduce projected revenues. A finance staff member said the district uses conservative estimates and that a Fed rate cut would likely lower interest receipts but noted the district’s budgeting practice does not rely on uncertain revenues.
The district’s reserve for economic uncertainty was reported at 9.51% of the general fund, above the state-mandated 3% minimum but slightly under a 10% cap that was in effect for 2023–24; staff said the 10% cap would not apply to 2024–25. Board members discussed policy choices for targeting reserves (examples ranged from a minimum 3% to policies that target several months of operating expenses).
The board voted to adopt the unaudited actuals and approved the revisions to the 2024–25 beginning balances; the action was recorded by voice vote.
What it means: The positive variance provides short-term flexibility, but members cautioned against assuming higher interest receipts will persist and discussed maintaining prudent reserves for future uncertainty.
