WSR 05-11-030




[ Filed May 10, 2005, 3:09 p.m. ]

Original Notice.

Preproposal statement of inquiry was filed as WSR 05-07-002.

Title of Rule and Other Identifying Information: Chapter 392-125 WAC, Finance -- Educational service district (ESD) budgeting.

Hearing Location(s): Old Capitol Building, 600 South Washington, Olympia, WA 98504-7200, on June 21, 2005, at 9:00 a.m.

Date of Intended Adoption: July 19, 2005.

Submit Written Comments to: Administrative Resource Services, P.O. Box 47200, Olympia, WA 98504-7200, fax (360) 753-4201, by June 6, 2005.

Assistance for Persons with Disabilities: Contact Sheila Emery by June 1, 2005, TTY (360) 664-3631 or (360) 725-6271.

Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: The rules are being amended to accommodate repealing of RCW 28A.310.380 and also incorporate guidance for use of interfund loans used by the ESDs.

This will allow ESDs to establish enterprise funds to account for those operations requiring enterprise fund accounting.

This will establish authority to allow ESDs to use interfund loans between the general fund and enterprise fund operations. This authority is modeled after the school district interfund loan process.

Statutory Authority for Adoption: Chapter 28A.150 RCW.

Statute Being Implemented: Chapter 28A.310 RCW.

Rule is not necessitated by federal law, federal or state court decision.

Name of Proponent: [Superintendent of Public Instruction], governmental.

Name of Agency Personnel Responsible for Drafting, Implementation and Enforcement: Ron Stead, Olympia, Washington.

No small business economic impact statement has been prepared under chapter 19.85 RCW. This rule is not applicable to nongovernmental agencies.

A cost-benefit analysis is not required under RCW 34.05.328. This rule is not applicable to nongovernmental agencies.

May 2, 2005

Marty Daybell

for Dr. Terry Bergeson

State Superintendent


AMENDATORY SECTION(Amending Order 81-19, filed 9/4/81)

WAC 392-125-010   Principles of accounting.   In all cases, the budgeting and accounting systems of educational service districts shall be governed by generally accepted accounting principles modified where necessary by statute and/or this chapter. The Accounting Manual for Educational Service Districts shall govern the accounting system of educational service districts and is hereby incorporated into this chapter by this reference. Prior to any revision thereof, the superintendent of public instruction shall publish notice of such proposed action and shall hold at least one public hearing. ((The general expense fund of an educational service district shall be the only fund of the district and shall be used for all activities which an educational service district performs.))

[Statutory Authority: RCW 28A.21.135. 81-19-007 (Order 81-19), 392-125-010, filed 9/4/81; Order 8-76, 392-125-010, filed 7/23/76; Order 7-75, 392-125-010, filed 12/22/75. Formerly WAC 392-31-020.]

WAC 392-125-100   Interfund loans -- Definition.   An interfund loan is considered to be a temporary loan of moneys between one educational service district fund and another. An interfund loan is not considered to be an investment.


WAC 392-125-105   Interfund loans allowable.   Loans are allowable to the general expense fund and the enterprise fund. Loans shall not be made to the detriment of any function or project for which the fund was established.


WAC 392-125-110   Interfund loans -- Identification of temporary loans.   A temporary loan is considered to be a loan which is completely liquidated in less than one year.


WAC 392-125-120   Interfund loans -- Payment of interest.   Interest shall be charged by the loaning fund to be paid by the borrowing fund. The rate of interest shall be not less than the current warrant interest rate prevailing in the county in which the educational service district is considered to be located. The interest shall be credited to the loaning fund and shall not be transferred to any other fund.


WAC 392-125-130   Interfund loans -- Full disclosure on financial statements.   Financial reports of each educational service district, including the monthly financial reports provided to the board of directors of the educational service district, shall specify all outstanding interfund loans and all interest charges involved. The proceeds of any interfund loan shall not be used to balance the budget of the borrowing fund.


WAC 392-125-140   Interfund loans -- board resolution adopted -- Contents.   The board of directors of an educational service district shall adopt a resolution before any interfund loan transaction may take place. The resolution shall contain the exact amount of the loan, the funds involved, the specific source of funds for repayment, the schedule for repayment, and the interest rate involved.


Washington State Code Reviser's Office