How to balance a Budget- the JISD (SNOW)method

Our JISD Financial Director and the Administrator have been implimenting a strategy to make it appear on paper as though serious cuts are being made to certain depts. within the budget and stay within the guidelines of proportioning funds towards academics. The law states that a certain percentage of the budget be dedicated to classrooms, books, etc...(academics), and a certain percentage towards maintenance, purchase of steel fencing and landscaping items, etc...
The Administrator and Financial Director have found an innovative means of overcoming these mandates. They have been using the FUND BALANCE. This account is where the administration sends all the money that they cut from depts. such as food service, technology, etc... Throughout the year, through budget amendments they are then able to move funds to make them available for projects such as parking lots, steel fencing, fieldhouse construction, etc... thereby bypassing state mandates placed to safeguard the education of our children.
I have no business experience and it took me a while to catch on to this little loophole trick. I'm sure that someone more experienced and knowledeable in business could break this information down to you a lot better, but for now I am all you have.
Let me give an example of how this Fund balance is used to deceive taxpayers. In early 2004, the board was told by the finance director that they had a balance of $1.1mil. in a Building Fund, and because they had the cash on hand they could enter into a contract to build a new fieldhouse without having to look for funding elsewhere, whether it be by cutting from other dept.s or even a possible Capitol Bond Package. The Board took Ms. Finley for her word and voted to proceed with the building of a fieldhouse. Later, in August of '04, the Board was given a figure of $2.2 mil. to fund the project, and guess how much money was now in the building fund, you got it $2.3 mil. This amount caused nothing more than another budget amendment to roll the extra cost from the Fund Balance Account over to the Building Fund.
The Administrator was questioned by myself in open meeting and asked if these extra funds came from cuts in any educational areas, and his answer was NO! Once again playing with the thin line of truth. No it didn't come from cuts in education, however it did come from the Fund Balance which is designed to fund the education of our children in the event of a loss of state funding.