Wake County School Fund Balance: What It Is, How It’s Spent, and Why It Matters
The fund balance is a financial cushion to help the district cover unexpected costs, ensure smooth operations, and maintain a balanced budget.
Holly Springs, NC, Jan. 29, 2025 — During tonight’s Budget and Finance Committee meeting, Wake County school officials discussed how the school fund balance — essentially the school system’s savings account — is structured, where the money comes from, and most importantly, how it is spent. They also discussed the myriad of challenges, risks, and opportunities associated with maintaining the financial health of one of the largest school districts in North Carolina.
What Is the Fund Balance?
The fund balance is a financial cushion to help the district cover unexpected costs, ensure smooth operations, and maintain a balanced budget. However, not all of the money in this fund is available for spending—most of it is already earmarked for specific purposes.
The fund balance is approximately $119.18 million, but only $39.3 million is unassigned and available for emergency use. The rest is already committed to things like school supplies, insurance, special projects, and next year’s budget.
Here’s how the $119.18 million breaks down:
Reserved & Committed Funds:
Supplies & Inventory: $5 million
Uncollected Receivables (Money Owed to WCPSS): $9.3 million
Special Projects (Enrollment Funds & Vaping Settlement Money): $11.3 million
Insurance & Workers’ Compensation: $15.58 million
Pension Liabilities: $4.3 million
Employee Health Benefits: $1 million
Funds Set Aside for Next Year’s Budget: $32.4 million
Unassigned (Emergency Use) Fund Balance: $39.3 million
While $39.3 million seems large, school officials noted that it only covers a smaller percentage of the district’s total operating budget. These funds would keep the district running for only a few days if an emergency arose.
Why Does This Matter?
Many residents may wonder why the district maintains a fund balance instead of spending all available money immediately. However, maintaining a substantial reserve is critical to ensuring school operations remain stable—especially in unpredictable times.
Concerns have recently arisen about a pause in federal education funding, which could affect programs like special education (IDEA), Title I (low-income school funding), and even school meal programs. If funding is delayed, the district may have to dip into its fund balance to ensure students and teachers are not immediately affected.
A few years ago, Wake County faced a crisis when school buses with faulty engines caught fire. The district didn’t have enough money in its unassigned fund balance to fix the issue and had to request extra funds from the county government. A substantial reserve would help the district respond to such emergencies without cutting programs or delaying essential repairs.
Importantly, some of the earmarked funds go toward initiatives directly impacting students, such as targeted enrollment funding, which helps schools with unexpectedly high student enrollment numbers get the teachers and resources they need.
What Happens Next?
Wake County Schools follows strict policies to manage fund balance money responsibly. Existing policies ensure the district cannot hold more than 6% of its county funding in reserves. The district also has rules limiting how much of the fund balance can be used in any given year, ensuring it does not deplete savings too quickly.
However, financial uncertainty remains a concern, especially with the possibility of federal funding freezes. School leaders closely monitor the situation and may need to adjust the budget if significant funding sources are delayed or eliminated.
The Bottom Line
While it may seem like the district has a large savings account, most of the fund balance is already committed to specific programs and financial responsibilities. The small unassigned portion is crucial in protecting schools from financial uncertainty and ensuring students receive the necessary resources.
For families, this means that while schools are financially stable for now, external factors like funding delays could create challenges in the future. Staying informed and understanding how school finances work is essential for advocating for students, teachers, and the continued success of Wake County schools.