I was reading the Journal Star’s article on the school board meeting last night and ran across this statement:

Also on Monday, the School Board […] Approved the one-time transfer of approximately $6.3 million from a debt services fund to the operations and maintenance fund.

Huh? If you’ve ever questioned school budgets before, you probably have encountered an official telling you about how each fund must be kept separate. For instance, if you mention that the school district should have access to plenty of money for operations by simply selling the houses along Prospect Road that they purchased prematurely, someone will tell you that you’re mixing up capital funds with operational funds. You can’t use capital funds to pay for operational expenses.

Well, correct me if I’m wrong, but doesn’t the debt service go to pay off bonds — bonds that are sold for capital expenditures? And how does the school board get around this provision in the Illinois School Code?

All moneys on deposit in the debt service fund shall be held in trust in the debt service fund for the benefit of the holders of the Bonds, shall be applied solely for the payment of the principal of and sinking fund installment, redemption premium, if any, and interest on the Bonds, and shall not be used for any other purpose. [105 ILCS 5/1E-80, emphasis mine]

How can the school board just, all of a sudden, transfer $6.3 million from the debt services fund to the operations and maintenance fund? Apparently these funds not quite as airtight as we’ve been led to believe.