1. Adapted from a presentation originally prepared by: Kathy Schalk-Greene, Mount Laurel Library February 24, 2016 Chris Carbone, South Brunswick Public Library

2. But I’m Not a Numbers Person!

3. Plan for and prepare next year’s budget Monitor spending through monthly financial reports End of Year Evaluation / Annual Audit Special Project Planning

4.  You may start your job at any point in this cycle  Find out what “past practice” has been ◦ Review last year’s budget and audit reports for baseline numbers and recommendations ◦ Ask Treasurer and/or bookkeeper to explain how your library handles things ◦ Review financial discussions/actions in past Board minutes ◦ Review Strategic and Facility plans, if available ◦ Introduce yourself to your town’s CFO  If it’s not broken - don’t rush to fix it right away

5. Some municipalities pay the bills for their library. ◦ Towns must fund their municipal library at 1/3 mil + ◦ Your Board (not you) should ask the town for an accounting of what has been spent each month ◦ Your Board should approve all bills each month If your municipal library pays its own bills: ◦ The town must make a payment to the library (quarterly or all of the 1/3 mil) by March 31 – even if they haven’t passed their budget

7. Budget noun bud·get \ ˈ bə-jət\ Simple Definition of BUDGET an amount of money available for spending that is based on a plan for how it will be spent a plan used to decide the amount of money that can be spent and how it will be spent an official statement from a government about how much it plans to spend during a particular period of time and how it will pay for the expenses What is a Budget?

8.  Different libraries have different fiscal years.  Different libraries use different timelines. There is no one right way.  Make things easier on yourself! Follow past practice for your library during your first year to experience a full cycle.

9. The Budgeting Process:  Establish Financial Goals for the Fiscal Year  Gather Information  Differentiate between Needs and Wants  Determine special project costs  Develop a Plan Remember:  Involve your staff where appropriate  Your process will include Trustee input

10. Establish Financial Goals for the Fiscal Year:  Will salary increases be given?  Do you want to increase materials spending?  Do you want/need to reduce certain expenses?  Should some funds be set aside for capital plans? Remember:  Be realistic in your goal setting  Benchmarks/comparable data are available

11.  How much income do you expect to receive? ◦ If you are a municipal library, the 1/3 mill fund amount to be generated by the Library Tax is announced in early October ◦ Fines and fees ◦ Interest from savings accounts/CDs ◦ Gifts ◦ Other?

12.  Salary, payroll taxes, pension costs, health benefits  Chargebacks from town (if any)  Service contracts (HVAC, cleaning, audit, alarm & fire monitoring, etc)  Utilities  Consortium / shared service expenses  Telecom / Internet connectivity  Other?

13.  Look at your financial reports and audits from the previous year or two. ◦ Has spending increased? ◦ Decreased? ◦ Stayed the same?  If you are in a multi-year contract (e.g. HVAC maintenance) you should know / find out what the yearly cost is.

14.  Let your fingers do the walking - ask vendors for estimates. Ask for discounts!  Keep your ears open. ◦ Are gas/energy costs expected to rise? ◦ What percentage increase in PERS payments are municipalities anticipating? ◦ What are the expected benefit costs?

15.  Collection and materials  Programming  Library & office supplies  Postage  Other?

16.  Special projects/needs, e.g.: ◦ Implement time/print management software ◦ Computer replacement plan ◦ Start a special collection/service (makerspace, etc.)  You may not be able to afford to do everything now, but it’s good to have a wish list  Grants or unanticipated gifts may become available; you want to be ready to take advantage of them

17.  Group your budget lines into the same categories as you report them in the annual PCSA report.  Your anticipated income should balance with your anticipated expenses.  If your anticipated expenses are higher than your anticipated income, you need to reduce your expenses. ◦ Where from?

18.  Consider yourself lucky!  Review your wish list  Create or add to a restricted capital maintenance or capital improvement fund  Other?

19.  Give them a budget, but not your entire budget calculation worksheet (Too Much Information !)  Have your budget calculation worksheet available to refer to if you are questioned; be prepared to explain how you came up with your numbers  Ask for help from your treasurer and/or finance committee prior to the presentation – they can, and should, help you prepare!

21.  Expenditures to date vs budgeted expenses (aka budget control report)  Profit & Loss statement  Bill list

26. Keep staff informed of how much they have spent versus their budget YTD (year to date)

27.  What monthly financial reports is your library currently producing for your board meetings?  Remember the “past practice” guideline. If it’s working okay, you don’t have to change it right away (or at all).

29.  Allows you to plan for big projects: roof, carpeting, HVAC, integrated library system  Consider setting aside a portion of the operations budget towards future capital expenses.  Reserve capital funds with a board resolution  You may need to request capital funds from your town/county

31. Capital budget: Schedule

34.  All municipal libraries must be audited each year. There is no mandated time frame but it’s a good idea to get it done within the first 6 months.  Your bookkeeper/treasurer may already have a process for handling the audit in place. If so, GREAT!

35.  If you are paying for your audit, even if it is the same auditor as the town, you should request a proposal that includes the cost of the audit and what services will be included.  You can negotiate with auditors just as with other vendors. Auditors charge wildly different amounts for the same basic product. Ask around – what are other libraries paying?

36.  Ask for help from your treasurer and/or bookkeeper in preparing for the audit.  There are certain things you know you’ll need each year, including:  Bank Statements  Bill Lists  Board Minutes  Checks Written  Deposit records

37.  Ask the auditor to sit down with you and your treasurer to review the audit. Remember: you are their paying customer!  If the auditor has any recommendations for change: ◦ Ask questions. How many other public libraries does your firm audit? Of those, how many have this procedure in place?

39. Do you still have questions? (Of course you do!)  Contact your auditor (anytime throughout the year) or accountant (if you have one)  Contact the State Library for guidance  Send a shout-out to one of the library listservs. You are not alone.

40.  Return of Excess Funds Law (NJSA 40:54-15) was passed in 2010 ◦ Beware of excess operating reserve funds ◦ For more info, contact the State Library

41.  The state-mandated 1/3 mil municipal appropriation is posted each October  NJ Library Laws can be found here: http://www.njstatelib.org/services_for_libraries /resources/library_law/ Part 6, purchasing, includes info on Pay to Play; Part 7 includes the Local Fiscal Affairs Law (audit info & more);

42.  Your town’s Chief Financial Officer can be a great resource – but not unless you ask for help.  NJ laws governing municipal fiscal administration: NJ Department of Community Affairs, Local Government Services, http://www.state.nj.us/dca/divisions/dlgs/a bout/ http://www.state.nj.us/dca/divisions/dlgs/a bout/

43. Benchmarks / Comparable Data Compare Public Libraries – Public Libraries Survey Data https://harvester.census.gov/imlscompare/ New Jersey Public Library Data and Analyses http://www.njstatelib.org/services_for_libraries/resources/ statistics/public_libraries/

44. Chris Carbone, ccarbone@sbpl.info