AGO Opinion 98026
School District Activities Funds; Budget Statement Requirements
DATE: June 17, 1998
SUBJECT: School District Activities Funds; Budget Statement Requirements
REQUESTED BY: John Breslow, Auditor of Public Accounts
WRITTEN BY: Don Stenberg, Attorney General
Lauren L. Hill, Assistant Attorney General
This legal opinion is written in response to your request
that we address the obligations of Nebraska school districts in the
preparation and filing of the annual budget statements mandated by
Neb. Rev. Stat. § 13-504 (1997). Specifically, you have asked
whether school districts are required to submit, as to their school
activities fund, statutorily-prescribed information in the annual
budget statements which pertain to "the immediately ensuing fiscal
Nebraska Budget Act.
The Legislature has enacted several statutes which,
collectively, comprise the "Nebraska Budget Act." Neb. Rev. Stat.
§ 13-501 (1997). "The purpose of the Nebraska Budget Act is to
require [certain] governing bodies . . . to follow prescribed
budget practices and procedures and make available to the public
pertinent information pertaining to the financial requirements and
expectations of [those governing bodies]. . . ." Neb. Rev. Stat.
§ 13-502 (1997). The annual budgets of all school districts are
subject to requirements of the Nebraska Budget Act. Neb. Rev.
Stat. § 13-517 (1997).
Pursuant to Neb. Rev. Stat. § 13-504(1), school districts
are required, by August 1 of each year, to prepare a proposed
written budget statement on forms prescribed by the Auditor of
Public Accounts. Along with other mandated information, the budget
statement must contain budget information (a) for the immediate two
prior fiscal years, (b) for the current fiscal year, and (c) for
the immediately ensuing fiscal year. Neb. Rev. Stat. § 13-
504(1)(a)-(c). For "the immediately ensuing fiscal year," the
budget statement shall contain
an estimate of revenue from all sources, . . . separately
stated as to each such source, to be allocated to each of
the several funds, and for each fund: [t]he actual or
estimated unencumbered cash balances, whichever is
applicable, to be available at the beginning of the year;
the amounts proposed to be expended during the year; and
the amount of cash reserve, based on actual experience of
prior years, . . . .
Neb. Rev. Stat. § 13-504(1)(c).
School Activities Funds.
The Legislature requires the Nebraska Department of
Education ["NDE"] to prescribe a uniform system of accounting to
which all Nebraska public school districts shall adhere. Neb. Rev.
Stat. § 79-1088 (1996). In accordance with that duty, the NDE has
promulgated Title 92, Nebraska Administrative Code, Chapter 2
(1996) [hereinafter "92 NAC 2"], its regulation establishing a
uniform accounting system. The regulation requires that "[a]ll
school district accounting systems shall be organized and operated
on a fund basis." 92 NAC 2, § 003.03. One of the authorized
funds that a school district may establish is a school "activities
The Activities Fund is required to account for the
financial operations of quasi-independent student
organizations, interschool athletics, and other self-
supporting or partially self-supporting school
activities, not part of another fund. The inclusion of
such accounts in the [school district's] General Fund ...
would distort the financial position of the basic school
operation and would complicate the computation of the net
expense incurred in conducting school services. The
Activity Fund shall not be used to record general
operation revenues or expenditures, nor shall the
[A]ctivity [F]und be used as a clearing account for the
General Fund. The school district may divide this fund
into more than one account to allocate a portion of this
fund for different purposes.
92 NAC 2, § 003.03E.
Having been properly promulgated and adopted, the
regulatory provisions of 92 NAC 2 have the force and effect of
statutory law. Nucor Steel v. Leuenberger, 233 Neb. 863, 448
N.W.2d 909 (1989); Douglas Co. Welfare Admin. v. Parks, 204 Neb.
570, 284 N.W.2d 10 (1979). Thus, we construe the requirements of
both Neb. Rev. Stat. § 13-504 and 92 NAC 2 by considering the
language utilized in each provision in its plain, ordinary, and
popular sense. OPPD v. Dep't of Revenue, 248 Neb. 518, 537 N.W.2d
We construe Neb. Rev. Stat. § 13-504(1)(c) as clearly and
unambiguously requiring school districts to include in their annual
budget statements specified information for the "immediately
ensuing fiscal year." As an activities fund may properly be
maintained by a public school district, the budget statement
information required by Neb. Rev. Stat. § 13-504(1)(c) also
includes information regarding an existing activities fund. You
have indicated some concern, expressed by certain schools, that the
schools might be unable to comply with the § 13-504(1)(c)
requirements because some of the monies in the activities funds may
belong to "outside groups." It is clear, however, that "[t]he
financial operations of all school-connected activities are a legal
responsibility of the school district board of education." 92 NAC
2, § 003.03E. Therefore, as school districts are ultimately
responsible for monies maintained within their activities funds,
the requirements of § 13-504(1)(c) are applicable to those funds.
We also note that what the school districts are required by the
statute to provide are estimated projections of future-year
financial activity within the fund.
Lauren L. Hill
Assistant Attorney General