(1) School districts may establish an internal service, enterprise, or agency fund if the intended purpose for which such fund will be used is approved by the Superintendent of Public Instruction. These funds shall be operated and accounted for as nonbudgeted funds.

(2) If the purpose for which a district intends to establish one of these funds is approved, the Superintendent of Public Instruction will provide the district guidance on the application of generally accepted accounting principles to that type of fund. If a district fails to comply with generally accepted accounting principles or with accounting policies established by the Superintendent of Public Instruction, the Superintendent may rescind approval to use the fund.

(3) Working capital needed to begin operations of an internal service fund may be derived from contributions of noncash assets from other funds or an interfund loan from the general fund. Interfund loans must be repaid before the end of the fiscal year.

(4) The intended purpose of an internal service fund is to provide services within a district and to be self-supporting without accumulating a profit. For example, a district's centralized purchasing operation may be accounted for in an internal service fund. Total costs of the services being provided, such as the costs of supplies, operation and maintenance of machinery, salaries and benefits for personnel responsible for providing the services, etc., should be recouped through user charges.

(a) The fund balance of an internal service fund must be kept within a range sufficient to maintain the operation without accumulating excess resources. If the balance becomes too high, charges to the funds receiving the services should be reduced. Excess balances in an internal service fund are not available for other purposes and must not be transferred to other funds.

(b) Charges must be made to all funds that receive services. Charges to the user funds must be reasonably determined and must be paid within the budgets of the user funds in the year services were provided. Expenditures charged to the user funds must be supported by invoices. Charges must be supported by documentation of actual usage.

(c) Services provided to users outside the district should be occasional in nature and the cost of such services must not be charged to district funds. Instead, such costs must be charged to those outside users and their payments recorded as revenue in the internal service fund.

(5) The intended purpose of an enterprise fund is to provide services to users outside the district. District enterprise operations are financed and operated in a manner similar to private business enterprises. Total costs of the services being provided, such as the costs of supplies, operation and maintenance of machinery, salaries and benefits for personnel responsible for providing the services, etc., should be recouped through user charges.

(a) The fund balance of an enterprise fund must be kept within a range sufficient to maintain the operation without accumulating excess resources. If the balance becomes too high, charges to outside users receiving the services should be reduced. Excess balances in an enterprise fund are not available for other purposes and must not be transferred to other funds.

(b) Charges must be made to all users which receive services. Charges to outside users or district funds must be reasonably determined and must be paid within the budgets of the district funds in the year services were provided. Expenditures charged to the district funds must be supported by invoices. Charges must be supported by documentation of actual usage.

(c) The cost of services provided to users outside the district must not be charged to district funds. Instead, such costs must be charged to those outside users and their payments recorded as revenue in the enterprise fund.