Transcript Library Finance - New Jersey State Library

Library Finance &
the Principles of Planning
New Director Orientation 2014
Michele Stricker
Associate Director, Library Support Services
New Jersey State Library
http://lss.njstatelib.org/
Library Finance
By the end of this session you will know:
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The Director’s role in the library’s planning
process
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The financial responsibilities of the
Director and Board of Trustees
Powers of the Municipal Library Board
Municipal Library Law NJSA 40:54-12
The board shall hold in trust and manage all property of the library.
It may rent rooms, or, when proper, construct buildings for the use
of the library, purchase books, pamphlets, documents, papers and
other reading matter, hire librarians, and other necessary personnel,
and fix their compensation, make proper rules and regulations for
the government of the library, and generally do all things necessary
and proper for the establishment and maintenance of the free public
library in the municipality. The board may also transfer to and
receive from other libraries books, magazines, prints, maps, and
other related library materials for the purpose of augmenting the
interlibrary loan service
Powers of the County Library Commission
County Library Law 40:33-8
The county library commission shall organize by the election of a chairman, and shall adopt rules and
regulations for the establishment and maintenance of the county library. It shall employ a librarian, if
any, as may be required, who shall hold appropriate certificates issued by the State Board of
Examiners and such other employees as it shall deem necessary for the performance of its functions.
It may purchase such supplies and equipment and incur such expenses as it may deem necessary to
carry out the provisions of this article, but shall not incur expenses or make purchases in any fiscal
year from public funds in excess of the appropriation for county library purposes for that year. In
addition to its other powers, it may accept gifts, devises, legacies and bequests of property, real and
personal, and hold and use the property and income of the same in any manner, which is lawful and
consistent with the purpose for which the commission is created, and with the provisions of the
conveyance, will or other instrument in or under which such gift, devise, legacy or bequest is made
and may dispose of the same subject to the same conditions. It shall make an annual report to the
financial officer of the county which shall include a statement setting forth in detail all county
appropriations made to the library, other public revenues received by the library, all State aid received
by the library, all expenditures made by the library and the balance of funds available. The report
shall also include an analysis of the state and condition of the library and shall be sent to the county,
governing body and to the State Library.
Board’s Financial Responsibilities
Assure provision of adequate funding
for library services through proper
long range planning.
Board’s Financial Responsibilities
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Develop the budget in conformance with
the Strategic Plan. Approve, monitor, &
evaluate the budget against performance
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Oversee management of investments,
made according to the law (N.J.S.A.
40:54-19.3)
Investments
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Public funds must be deposited in banks or trusts in New
Jersey organized under state laws, or with cash
management
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NJSA 40A:5-15.1 provides list of securities which may be
purchased by library boards, and NJSA 40:54-19.3
addresses investment of funds, regulation of bonds or
securities
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Municipal libraries as a government agency may not use
a mutual fund or anything that has stocks or bonds
where the principal is at risk.
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Funds should be deposited every 48 hours
Board’s Financial Responsibilities
Establish Financial Policies
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Board & governing body’s respective responsibilities for
funding & expenditures
Financial procedures (budgeting, accounting, reporting
auditing). Make them clear to the Board, other officials,
public
Fines, charges for lost or damaged items
Insurance and bonding
Solicitation or sales in the library
Gifts, donations, memorials
Main Sources of Library Funds
Local taxes & appropriations
 State aid
 Fines, fees
 Gifts, Bequests
 Grants
 Federal funds (e-rate)
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Best Practice
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Library appropriation on one line in the municipal county
budget
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If the annual appropriation is retained in the custody of
the municipal/county treasurer and disbursed after
approval of the board/commission by resolution, any
prior year unexpended funds from the mandatory library
appropriation shall be retained in the library-controlled
account dedicated for eligible purposes
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Be certain to receive your appropriation in no less than
quarterly payments. Note that the quarterly tax due date
is the first day of February, May, August and November
making the date due to the library the 20th day of those
months.
Fundraising
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Boards undertake the education of elected
officials to assure that the library has the
funding needed to provide excellent library
service
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A Foundation is often formed to fundraise in the
form of a capital campaign
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FOL groups raise funds for expenses outside of
the library’s operating budget
Annual Audit
The library must have an annual audit that shall
include verification of all cash & bank balances
(NJSA 40A:5-4)
 Best practice to have your own auditor, but if
done by municipal auditor, make sure you get
copies
 If any recommendations are made, correct them
promptly. Director needs to follow up on
recommendations
 Send copy of audit to the Director of the Division
of Local Government Services, Department of
Community Affairs
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File Annual Reports
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Each library receiving state aid shall annually make and
transmit a report to the State Librarian…through the
annual submission of the survey, application and
certification (NJSA 18A:74-11 & NJSA 40:54-15)
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The Board of Trustees shall make an annual report to
the Chief Financial Officer of the municipality which shall
include all public revenues received by the library, all
expenditures made by the library, the balance of funds
available, an analysis of the state & condition of the
library, and identification of excess funds (NJSA 40:54-15)
File Annual Reports
Identification & Return of Excess Funds
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Trustees are required to identify any “excess funds” for
return to the municipality & then to taxpayers: NJSA
40:54-15 (a), October 2010
Unrestricted funds above 20% of the last audited
operating expenditures become “excess funds”
The transfer requires the State Librarian’s approval:
NJSA 40:54-15 (c)
The application requirements include an updated
Strategic Plan. All libraries should have a Strategic Plan
as a best practice
The law and application are on the NJSL website at
http://lss.njstatelib.org/library_law
Contact: Michele Stricker, [email protected].
The Strategic Plan
http://lss.njstatelib.org/trustees/strategic_planning
The New Jersey State Library supports strategic
planning as a management tool to determine a
library’s mission, vision, values, goals and
objectives, roles and responsibilities, and to
determine benchmarks and timelines that will
shape the library’s future. All libraries should have
an updated strategic plan of three to five years,
initiated by the Board of Trustees.
Strategic Plan Format
Mission & Vision Statement
 Letter from Board President
 Acknowledgements
 Planning Methodology
 Executive Summary
 Profile of Municipality
 Community Needs Assessment
 Library Profile, Analysis of Current Situation
 Strengths & Successes
 Future Challenges
 Goals & Action Steps
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The Capital Budget
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Municipal capital improvement
expenditures are in addition to the
library’s statutory minimum
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Libraries may not bond or make debt
payments
For Municipal & Joint Libraries only
Capital Expense may be approved…
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If all conditions of NJSA 40:54-1 et seq. (municipal &
joint library statue) & NJAC 15:21-2 et seq. (State Aid)
are met;
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There are sufficient funds remaining for the maintenance
of the library for the balance of the year in which the
funds are saved or the cost occurs; and
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Library Board of Trustees has a written plan of at least 3
years that reflects that the long-term capital expense will
contribute to the provision of efficient & effective library
services, and that the plan will be made available to the
State Librarian upon request
Capital Costs supported with 1/3 mill
NJAC 5:21-12.3
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Furnishings & equipment
Periodic major projects such as upgrade of computer
hardware & software
Replacement of roof, HVAC systems
Site acquisition, new buildings & additions, or
renovations of library buildings
Initial collections for new construction or building
renovations
Rent: if such rent is paid to a private entity or school
district, & is comparable with the fair market value for
rent in the municipality based on cost per square footage
Capital Planning
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The Library facility consists of the physical
structure and the building systems, such as
mechanical, plumbing, electrical,
telecommunications, security, & fire suppression
systems.
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The facility also includes furnishings, equipment
and information technology, as well as the site.
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Collection materials may be included if
associated with an addition or a new building.
Elements of a Capital Plan
For Larger Projects
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Brief history of library
Community analysis
Documentation that project is needed
Description of how project will be funded
Timeline
Draft floor plans & concept drawings
Proposed expenditures
Financial Responsibilities
Board & Director
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Knows the budget procedures of the local
governing unit
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Stays within the budget
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Works with the library director to formulate budget to carry out
library’s goals & objectives
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Investigates means of cooperation with other libraries for effective
use of funds, cost efficiencies, & expansion of services
Financial Responsibilities
The Board
The Director
Reviews complete accurate & current records
on finances, personnel, & inventory
Maintains complete, accurate, &
current records on finances, personnel
& inventory
Presents, explains, & defends the budget to
officials and general public
Works with Board to interpret the
budget & financial needs of the
library to public officials & the general
public
Helps secure funds necessary for staff &
services
Supplies facts & figures to Board to
aid in interpreting library’s financial
needs
Financial Responsibilities
The Board
The Director
Submits an annual report to the CFO of the
on finances, personnel, & inventory
Prepares annual report for the Board
Provides adequate insurance coverage for
buildings, materials, personnel, & the general
public
Provides a report of budget status
& expenditures at each board meeting
Summary
Know your role in promoting the library’s
financial health
 Guide your Board to the resources
available
 Spend time developing, implementing, &
evaluating plans and the budget to make
them work
 Keep up with laws & local traditions
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Thank you!
Michele Stricker
Associate Director, Library Support Services
New Jersey State Library
[email protected]