Bond Oversight Done Right – – --------- = - - Issue 33 • May 16, 2022
Editor: Linda Ruiz-Lozito • info.caboc@gmail.com
Can a District's General Fund Borrow Cash from a Proposition 39 Bond Fund?

No. ... "The Fiscal Crisis and Management Assistance Team's (FCMAT's) primary mission is to help California's local K-14 educational agencies identify, prevent and resolve financial, operational, and data management challenges by providing management assistance and professional learning opportunities. ...

In a Fiscal Alert, FCMAT states:
-- “The use of bond proceeds outside of their intended capital may violate state law. School districts may issue general obligation bonds under Proposition 39, which requires that an issuer specify the purposes of general obligation bond proceeds and may not spend the proceeds 'for any other purpose, including teacher and administrator salaries and other school operating expenses.' Districts issuing bonds under Proposition 46 must use the proceeds for 'real property and improvements.' In both cases, using the funds as working capital, even temporarily, fails to fulfill these obligations. Education Code Section 15100 establishes permitted purposes for proceeds, including construction, repair, restoration, furniture, and equipment. Section 15146 prohibits proceeds for purposes other than those specified at the bond's issuance. Therefore, interfund borrowing involving a transfer of general obligation bond proceeds to funds with expenditures outside of the designated capital project for which the bonds were issued may violate these sections of the Education Code.” ...

FCMAT Fiscal Alert, Oct. 2019: Interfund Borrowing Using Bond Proceeds

Website Highlights:
Which school district had a FCMAT Extraordinary Audit, Nov. 18, 2020?
EXCERPT: Conclusion: ... Based on the findings in this report, there is sufficient evidence to demonstrate that fraud, misappropriation of funds and/or assets, or other illegal fiscal practices may have occurred in the specific areas reviewed. ...
Poor Management Practices web page

FCMAT Extraordinary Audit, Nov. 18, 2020

Visit Our Facebook Page: Facebook.com/CABOC.INFO
Connect, Participate, Share & Learn.
Join our Facebook Groups on:
 Annual Reports  
 Performance Audits
CABOC Volunteer Opportunities 
All the work accomplished by CABOC is done by committees: Fundraising, Legislative Marketing, and Online Training Video Committee. CABOC needs your volunteer help for these committees.
CABOC | California Association of Bond Oversight Committees | E-mail | BondOversight.org