Harford schools anticipates ‘higher than normal’ fund balance at the end of fiscal 2024

Harford County Public Schools expects to close fiscal 2024 with nearly $29 million in surplus revenue contributing to a $49 million unassigned fund balance because of what school officials say were operational savings and fewer health care claims during the COVID-19 pandemic.

Roughly $16 million of the $29 million surplus comes from a health care rate stabilization transfer the county government sent to the schools in April. The transfer reflects fewer health care claims made by system employees during the pandemic.

Roughly $4 million of the $29 million surplus is interest income accumulated this year by the school system.

School officials said the Harford school system typically spends 98 to 99 percent of its annual budget. The system projects to have saved about $8 million of its $613.5 million operating budget this year, indicating that 98.7 percent of its fiscal 2024 budget has been spent.

The savings, according to school officials, are from some budget items requiring expenditures lower than what Harford County Public Schools initially budgeted. School officials declined to comment on what areas of the budget contributed to the $8 million in operational expense savings.

Because of the $16 million transfer, the $4 million in interest income and other operational savings, officials said the year-end surplus is “higher than normal.”

Facing a tight budget for the next fiscal year, school officials said they are unsure how much of their unassigned fund balance – a balance of money Harford schools can use for anything – they will be able to use for next year’s budget.

A fund balance should never be used for recurring expenses if the funds do not have a recurring source, school officials said. Since the $16 million rate stabilization transfer and operational cost savings this year are not promised to be the same amount next year, school officials said it would be unwise to plan a budget that anticipates a $29 million revenue surplus next year.

The decision on how to use the fund balance will be made by the Board of Education in June.

The $49 million unassigned fund balance – which houses the $29 million surplus – represented eight percent HCPS’s annual budget. School officials also declined to say how what they plan to use the $49 million unassigned fund balance.