What does the term fund balance mean in the context of a school district?

In the context of a school district, the term fund balance refers to the difference between the district's total assets and total liabilities. This financial metric reflects the net resources available to the district, representing the funds that are not encumbered by obligations. A positive fund balance indicates that the district has more assets than liabilities, which can enhance financial stability and provide flexibility for future planning.

Understanding fund balance is crucial for assessing the financial health of a school district, as it helps stakeholders evaluate the ability of the district to meet ongoing commitments and invest in future educational initiatives. It also plays a role in compliance with fiscal responsibility and budgeting practices within the district. Other options discuss different financial aspects that do not accurately encapsulate the definition of fund balance. For example, while the educational budget is an important aspect of a school district's finances, it does not represent the fund balance itself.