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LSRSD Excess & Deficiency Overview

Report to Finance Subcommittee

March 19, 2026

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E&D Overview

Mandatory Fund: All regional school districts must maintain an E&D fund. At year-end, any general fund surplus or deficit closes to this account.

October 31 Deadline: Districts must submit required schedules to the Department of Revenue (DOR) for balance certification.

Penalty for Delay: The state may withhold monthly school aid if filing deadlines are missed.

Allowable Uses: The Committee can apply certified funds as a revenue source for the current budget (via amendment) or the upcoming proposed budget

The Commonwealth’s Excess and Deficiency (E&D) Regulations 603 CMR 41.00

Guideline established in 2018.
Subject to annual review, recommended guideline for E&D balance is 3.5% of the current year’s operating budget, or $1,382,742 for FY26.
Certified E&D is $122,296 higher than guideline at $1,505,038, or 3.8% of the current year’s operating budget.
5% of operating and capital budget totals $1,972,845, $467,807 higher than amount certified.
FY25 (certified in FY26) mean E&D is $1,451,294 and median is $1,227,333 (64 regional school districts).
FY24 (certified in FY26) mean E&D was $1,308,304 and median was $1,121,476 (84 regional school districts).

LSRSD Guidelines: E&D Balance and Allocation

2020	2021	2022	2023	2024	2025
Amount Certified in FY21: Not certified Percentage of FY21 Budget: 0% Uses: N/A	Amount Certified in FY22: $1,175,040 Percentage of FY22 Budget: 3.4% Uses: N/A	Amount Certified in FY23: $1,507,183 Percentage of FY23 Budget: 4.2% Uses: N/A	Amount Certified in FY24: $1,218,547 Percentage of FY24 Budget: 3.3% Uses:$500,000 Stabilization, $250,000 OPEB	Amount Certified in FY25: $1,093,627 Percentage of FY25 Budget: 2.9% Uses: $500,000 Stabilization, $300,000 OPEB	Amount Certified in FY26: $1,505,038 Percentage of FY26 Budget: 3.8% Uses: $200,000 Stabilization, $275,000 General Fund

E&D Certification & Uses

Fiscal Year	Beginning Balance	E&D Appropriation	ENDING BALANCE (Includes Interest)
2026 (Current Year)	$5,686,145	N/A	March 1 $6,585,883
2025	$4,803,573	$0	$5,686,145
2024	$3,726,595	$300,000	$4,803,573
2023	$2,904,802	$250,000	$3,726,595
2022	$2,508,856	$0	$2,904,374
2021	$1,575,931	$0	$2,351,840
2020	$1,162,429	$0	$1,470,269

OPEB Trust

Fiscal Year	Beginning Balance	E&D Appropriation	ENDING BALANCE (Includes Interest)
2026 (Current Year)	$1,895,604	N/A	March 1 $1,938,429
2025	$1,888,824	$200,000	$1,895,606
2024	$1,326,001	$500,000	$1,888,824
2023	$825,588	$500,000	$1,326,001
2022	$325,315	$0	$325,541
2021	$324,781	$0	$325,194
2020	$322,097	$0	$324,620

Stabilization Fund

Fiscal Year	Budget	Expended	Unanticipated Expenses (Shortfall)/Surplus
2026 Projected	$6,791,049	$7,592,590	($801,541)
2025	$7,772,805	$7,178,758	$594,047
2024	$7,695,603	$7,988,995	($293,392)
2023	$6,589,550	$6,981,627	($392,077)
2022	$6,670,910	$5,824,323	($122,057)
2021	$5,911,131	$5,893,198	($813,176)
2020	$6,021,784	$4,810,331	$468,300

Out of District Services (Tuition + Transportation)

Invest in the Future:

Continue investment in OPEB Trust.
Continue investment in Stabilization funds for “White House” Development (420 Lincoln Road).

Planfor Budget Uncertainty:

Hold funds in E&D to address FY27’s unanticipated and unbudgeted OOD services costs (tuition & transportation).
Hold funds in E&D to address FY28’s continued escalation in Health Care Benefits.
Hold funds in E&D to help balance the FY28 budget in anticipation of a challenging year for Sudbury.

Strategic Considerations for FY26 E&D Allocation

Adhere to the LSSC Guideline:

Place 25%, or $30,574, of funds in excess of guideline into the Stabilization Fund.
Allocate remaining 75% of funds in excess of the 3.5% guideline, or $91,722, to offset the shortfall in the FY26 Out of District budget.

Strategic Considerations for FY26 E&D Allocation

Timeline