Pursuant to IC 36-1-8-5.1, a School can establish a rainy day fund (RDF) through the adoption of a resolution. The resolution must state the following:
(1) the purposes of the RDF and
(2) the sources of funding for the RDF. The sources of funding can include dormant funds or any other funding source specified in the resolution and not otherwise prohibited by law.
IC 20-40-18-4(b) clarified that Operations fund can be transferred to the RDF.
IC 36-1-8-5.1(h) allows for transfers from the RDF to the Education or Operations Fund.
In addition, a School can transfer an amount from a fund as long as it is authorized by the resolution, does not exceed 10% of the total annual budget for that fiscal year, and is not from a debt service fund.
Our position is that a unit can transfer money from an appropriated fund to the RDF as long as the purpose of the levy has been fulfilled (and the School Board has stated as such) and the transfer does not exceed 10% of the total annual budget. Also, any fund that has been declared dormant (by the School Board) under IC 36-1-8-5 can be transferred to the RDF.