How are "restricted" funds defined in school finance?

Restricted funds in school finance are defined as funds that are designated for specific purposes and cannot be used for other expenses or initiatives. This means that the use of these funds is limited to the conditions set forth by donors, regulations, or funding sources. Typically, these restrictions are put in place to ensure that the money is utilized in a way that aligns with the intentions behind its allocation, such as for specific programs, projects, or services that directly benefit students or enhance educational outcomes.

The other types of funds, like unrestricted funds, can be used at the discretion of the school or district, which contrasts with the limitations associated with restricted funds. Understanding the nature of these funds is critical for effective financial planning and compliance within school districts.