Policy 1.12:  Minimum Fund Balance

_______________________________________________________________________________________

Purpose:

Minimum Fund Balance

Eastern Wyoming College will maintain an education fund with a minimum of fifteen percent of the annual spend in the Education Fund.

Rationale

The minimum fund balance ensures the College’s ability to continue operations in the event of a disruption to a revenue stream in the short term. The following are general considerations that Eastern Wyoming College shall consider when establishing and maintaining the minimum fund balance:

  1. Legal and regulatory requirements: Currently, the State of Wyoming does not require a minimum fund balance.
  2. Financial stability: Eastern Wyoming College is committed to a level of financial stability to support ongoing operations, withstand economic fluctuations, and sustain unexpected financial challenges.
  3. Cash flow management: Maintaining a minimum fund balance to ensure the College manages cash flow effectively. It ensures that there are adequate funds available to cover short-term operational expenses and obligations, such as payroll, utilities, and supplies, without relying solely on external sources of funding.
  4. Planning for capital projects: A minimum fund balance may be established to allocate funds towards Capital projects, such as infrastructure improvements or equipment purchases, reducing the need for excessive borrowing or dependence on external financing.
  5. Creditworthiness and borrowing costs: Maintaining a healthy fund balance can enhance Eastern Wyoming College’s creditworthiness, making it easier to access loans or bonds at favorable interest rates. Lenders and investors may view a higher fund balance positively, as it indicates the college’s ability to manage its finances responsibly.

Process for Reviewing Minimum Fund Balance Policy

The Board Policy for the minimum fund balance will be reviewed annually by the Chief Financial Officer and the Board of Trustees Finance Committee based on institutional goals and financial conditions of the College.

 

Original Adoption Date: 9/12/23

Revision Date(s):

Date(s) reviewed, no change: