Kansas school districts are governed by local boards of education selected by the voters of the district. The operations of a school district are greatly influenced by state and federal laws, as well as requirements of the state board of education. These outside influences place restrictions on how the district can raise money and how funding can be used. 

Operational Funds

The General Fund and Supplemental General Fund (LOB) are the main operating budgets of USD 497.  

Special Revenue Funds

Kansas law requires districts to use additional funds to account for certain program expenditures.  In USD 497, these special revenue funds include, Adult Education, Adult Supplemental Education, Bilingual Education, Virtual Education, Driver Training, Food Service, Professional Development, Parent Education Program, Summer School, Special Education, Vocational Education, Special Reserves, Federal Funds, Gifts and Grants, Contingency Reserve, Textbook and Student Materials Revolving Funds, At Risk 4Year Old, At Risk K-12, Activity Funds. 

For simplicity, these funds can be viewed as operational. 

Capital Funds

Capital funds are for land purchases, land and building improvements and major repair and maintenance of buildings, equipment, computers, and furniture. The Capital Outlay Fund is a levied fund. There is a mill levy lid, by statute, of 8 mills and the only use of the mill levy is for capital outlay purposes, per statute and Board of Education resolution. 

Operational expenditures such as preventive maintenance, teacher salaries, supplies, transportation and services cannot be paid from Capital Funds.  

Debt Service Funds

The Bond and Interest fund is a debt service fund for the purpose of General Obligation, Refunding bond debt or Temporary Notes. There is a mill levy for this fund. The mill levy is based on the revenue requirement to pay the annual bond and interest payment due on outstanding bond obligations. A bond issue is a financing instrument for school districts that is used to fund the purchase of land or buildings, construction of new facilities, major building additions and improvements, major site improvements and additions, technology equipment and infrastructure, equipment and furniture. 

The Special Assessment fund is also considered a Debt Service Fund, for purposes of paying special assessment taxes.  These taxes are usually assessed to the school district by the City or County for sewer, sanitation, sidewalks, curbing, etc. Kansas statutes allow for a mill levy to be assessed to pay for the debt of these special assessments.

Pass-Through Funds

This is a form of Special Revenue Funds, KPERS Retirement and Cost of Living Fund are two examples of this in USD 497. 

One of the reasons it is difficult to understand school finance is because of the large number of funds and the mechanism to provide revenues to support the expenditures in each of the funds.