A fund is a separate accounting entity with a self-balancing set of accounts that comprise its assets, liabilities, fund equity, revenues, and expenditures or expenses, as appropriate. Funds are the control structures that ensure that public monies are spent only for those purposes authorized and within the amounts appropriated. The Board adopts legal budgets for all governmental fund types. The acquisition, use, and balances of the government’s expendable financial resources and the related current liabilities are accounted for through governmental funds. Governmental funds that Chicago Public Schools utilizes have historically been divided into four types: General Fund, Special Revenue Funds, Capital Projects Funds, and Debt Service Funds
To control the budget and to comply with rules and regulations, accounts are organized into governmental funds, each of which is considered a separate accounting entity. Expenditures within each fund are further delineated by unit, grant, program, and account to more fully reflect the planned activities of the fund. The level of budgetary control (where management can compare budget to actual performance to demonstrate budgetary compliance) is established for each individual fund and within the fund by unit, grant, program, and account.
CPS Fund Structure
Building Operations and Maintenance Fund
|114, 115, 117, 124, 230
||Special Revenue Funds
Other Grant Funds
|Debt Service Funds
||Debt service funds
||514 - 699
|Capital Projects Funds
||Capital projects funds
||401 - 499
The General Fund is the primary operating fund of the Board of Education. It was created in response to the provision of P.A.89-15, which consolidated all of the rate-limited tax levies into the Board’s general education tax levy. The General Fund consists of the Education Fund and the Operations and Maintenance Fund.
- Education Fund (Funds 114, 115, 117, 124)
The Education Fund is used to account for the revenues and expenditures of the educational and service programs that are not accounted for in any other funds. It includes the cost of instructional, administrative, and professional services; supplies and equipment; library books and materials; maintenance of instructional and administrative equipment; and other costs pertaining to the educational programs. The Education Fund contains the Special Education Fund (114), Regular Education Fund (115), Tuition-based Preschool Fund (117), and School Special Income Fund (124).
- The Special Education Fund (114) represents all instructional and service activities provided for students with disabilities. This fund is primarily supported by local property taxes, state special education reimbursements, and Medicaid reimbursements.
- The Regular Education Fund (115) represents all instructional and service activities not accounted for elsewhere.
- The Tuition-based Preschool Fund (117) keeps track of fees received and payments made for the paid preschool program for children whose parents are in need of a full-day education and child-care program for their three and four-year-old children or families who are not income-eligible for state or federally subsidized programs.
- The School Special Income Fund (124) accounts for private foundation grants and donations that schools and departments secure on their own and revenues that schools generate for school-specific functions.
- Building Operations and Maintenance Fund (Fund 230)
The Building Operations and Maintenance Fund supports the repair and maintenance of CPS buildings. The fund is used to account for expenditures for the minor improvement and repair of buildings and property, including the cost of improvement, repair, replacement, and maintenance of building fixtures. The fund also pays for ongoing maintenance costs such as the salaries and benefits of engineers and custodial employees, utility costs, and custodial supplies and equipment.
Special Revenue Funds
Generally accepted accounting principles (GAAP) provide special revenue funds to account for and report the proceeds of specific revenue sources that are restricted or committed to expenditures for specified purposes other than debt service or capital projects. The use of a special revenue fund type is permitted rather than mandated for financial reporting purposes. For these purposes, CPS includes the special revenue funds within the General Operating Fund.
The Special Revenue Funds include the Supplemental General State Aid (SGSA) Fund, Workers’ Compensation/Tort Fund, School Lunch Funds, and federal and state grant funds.
- Supplemental General State Aid Fund (Fund 225)
The SGSA Fund was created to provide supplemental instructional services to students from low-income families. CPS is legally required to contribute funds from its General State Aid revenues. Prior to FY90, this funding supported basic as well as supplemental programs. With the passage of the Chicago Public Schools Reform Act of 1989, funding for supplemental programs increased for five years until it reached $261.0 million in FY95, eliminating at the same time any funding for basic programs. Under this legislation, SGSA funding is mandated at a minimum of $261.0 million per year, effective FY96.
Each school receives its share of the SGSA funds based on the number of students who receive free and reduced lunch. School principals develop programs in accordance with their school improvement plans as required by the Act. Recommended programs include early childhood programs, class-size reduction, academic enrichment, attendance improvement, and remedial assistance.
- Workers’ Compensation/Tort Fund (Fund 210)
The Tort Fund is established pursuant to the Tort Immunity Act (745 ILCS 10/1-101 et seq.) and the Illinois School Code (105 ILCS 5/34-1 et seq.). Property taxes constitute the primary funding source, and Section 9-107 of the Tort Immunity Act authorizes local public entities to levy a property tax to fund expenses for tort judgment and settlement, liability, security, Workers’ Compensation, unemployment insurance, and risk management. The monies in this fund, including interest earned on the assets of this fund, should be used only for the purposes authorized under the Tort Immunity Act.
- School Lunch Funds (Funds 312, 314)
The School Lunch Funds account for school breakfast, lunch, after-school snacks, Head Start snacks, and after-school meals for all children who participate in the programs during the school year. The National School Breakfast and Lunch Programs (Fund 312) are voluntary programs available to all public schools, private schools, and residential child-care institutions that agree to operate a non-profit program offering lunches meeting federal requirements to all children in attendance.
Since FY98, CPS has also been providing after-school meals for children under the Childcare and Adult Food Program; this activity is accounted for in Fund 314. The Childcare and Adult Food Program establishes a fixed reimbursement amount per meal for eligible students from 3 to 12 years of age who participate in after-school programs.
- Federal and State Grant Funds (Funds 220, 324-369)
Grant funds account for monies that have restrictions on their use imposed by grantors such as federal and state governments. Each specific project is accounted for separately using a complete group of self-balancing accounts so that the accounting and reporting requirements of the grantors are met.
Capital Projects Fund (Funds 401–499)
The Capital Projects Funds are used to account for financial resources to be used for major capital acquisition or construction activities. Financial resources result from bond issues, receipts from other long-term financing agreements, or construction or maintenance grants to be used for school capital projects and capital leases. Proceeds from a bond issuance are often recorded in a separate capital fund, consistent with GAAP. However, an aggregated capital projects fund group is sufficient for the purpose of external financial reporting.
Debt Service Funds (Funds 514-699)
The Board is authorized by state law to issue notes and bonds and to enter into leases for capital improvement projects and cash requirements. Debt service funds are established to account for revenues and appropriations that are used for the payment of principal, interest, lease payment, and other related costs. CPS frequently establishes a separate debt service fund for each bond issue, although they can be aggregated for reporting purposes.
- PBC Lease Funds (Funds 514, 516, 518)
These funds account for property tax revenues and lease payments to the Public Building Commission (PBC) for debt service on bonds that the PBC sold to fund capital projects for schools that the Board is leasing from the PBC. The Board has lease agreements with the PBC to pay principal, interest, and administrative fees for revenue bonds that the PBC issued to finance capital projects for schools that the Board leases from the PBC. These bonds rely solely on property tax levies. The current lease payments support PBC bonds issued in 1992 and 1993, and refunding bonds issued in 1999. All of these revenue bonds will mature by 2020.
- Debt Service Stabilization Fund (Fund 602
This fund was established by the Board to provide for debt expenditures (e.g., debt service, swap, variable rate payments, and fees) and other uses approved by the Board.
- Alternate Revenue Bond Funds (Funds 606-699)
The Local Government Debt Reform Act of the State of Illinois allows the Board to issue alternate revenue bonds based on dedicated revenue sources. To support construction and renovation of school buildings, the Board has been issuing alternate revenue bonds since 1996. These funds account for pledged revenues and payments of principal, interest, and related fees on any alternate bonds.