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Finance matters2011
Finance matters2011
Finance matters2011
Finance matters2011
Finance matters2011
Finance matters2011
Finance matters2011
Finance matters2011
Finance matters2011
Finance matters2011
Finance matters2011
Finance matters2011
Finance matters2011
Finance matters2011
Finance matters2011
Finance matters2011
Finance matters2011
Finance matters2011
Finance matters2011
Finance matters2011
Finance matters2011
Finance matters2011
Finance matters2011
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Finance matters2011

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  • Actual figures for HardwickLocal tax $62,260State/federal $144Other $3,921Total $66,181 St Johnsbury Athenaeum local $115,000 state/federal $764 other $672,556
  • Transcript

    • 1. Finance Matters
      Best practices in managing library funds
    • 2. Treasurer’s arrest shakes community
      “…when people here found that mild-mannered [Ira] town treasurer Donald Hewitt was cooking the books, it was big news. When they learned the extent of it– more than $400,000 allegedly embezzled over about 30 years– it was even bigger.”
      “Common threads… involvement of a trusted individual, specific expertise and individual transactions small enough to stay below the radar.”
      Brattleboro Reformer, 4/11/2011 page 3
    • 3. In this presentation…
      Where library funds come from
      Trustee and librarian responsibilities
      Best practices
    • 4. Where library funds come from
      All figures from the VT Public Library Statistics
      2010 Annual Report
    • 5. Sources for Library Funding
      Vermont
      National
    • 6. Use public library statistics to discover the library profile
    • 7. Trustee and librarian responsibilities
    • 8. Incorporated Libraries
      22 VSA 111, 103 Trustees may own and sell real and personal property
      make and keep bank accounts
      accept contributions
      spend money
      Law of Libraries, 2010, page 4
    • 9. Incorporated funding
      Most incorporated libraries in Vermont receive a portion of their funding from local appropriations
      Public funds may come with strings such as town audit of certain accounts; open meeting law; or requirement that trustees be elected by voters
      It is good practice to keep the lines of communication open between the library and the selectboard
      Law of Libraries, 2010, page 4
    • 10. Municipal libraries
      22 VSA 144 Unless governed by charter or special law, trustees have authority to
      Write orders to the treasurer on the library accounts
      Accept gifts on behalf of the municipal library
      Decide how money will be spent, by budget adopted at town meeting
      Town auditors may audit the municipal library accounts
      Law of Libraries, 2010, page 5
    • 11. Municipal library funding
      Selectboard sets the municipal library budget to be presented at town meeting for approval
      Trustees may bring a petition signed by five percent of the voters asking for additional funding, to be placed on the town meeting ballot
      It is good practice to keep the lines of communication open between the library and the selectboard
      Law of Libraries, 2010, page 5
    • 12. Basic trustee responsibilities
      Financial management and oversight
      Board and director put together the annual budget
      At least one trustee reviews library bills and signs that bill is accurate for town hall or treasurer payment
      Financial committee reviews monthly disbursements and checks whether budget is on track
      Payroll is handled by the town for municipal libraries, by board or fiscal agent for incorporated libraries
    • 13. Basic staff responsibilities
      Daily management and tasks of library income and expenditure
      Director and Board build the annual budget
      Prepares weekly list of bills to be paid; director verifies and signs
      Prepares monthly disbursements and notes variance from annual budget
      Staff verifies payroll
      A Manual for Vermont Library Trustees, 2010, 12
    • 14. Check book or petty cash fund
      Staff have access to some funds for local payments
      Staff should have board oversight for checkbook
      Should be regular protocol for the collection of library fees such as overdues or copier costs
      Municipal library: fees and gifts may go back to town
      Incorporated: fees and gifts managed by board treasurer
      A Manual for Vermont Library Trustees, 2010, 7-8
    • 15. Best Practices
    • 16. Set the control environment
      Bank statements are reviewed by the board
      No town or library records are kept in staff or trustee’s homes
      Treasurer attends all board meetings
      Policies and procedures have been developed, written down, and govern all transactions
      Management must use time sheets, get approval for travel expenses, have credit card scrutinized
      Receipts are required for expense reimbursement
      Blue Avocado, Five Internal Controls for the Very Small Nonprofit, January 6, 2010. http://www.blueavocado.org
    • 17. Lay out who is responsible
      Write the procedures down
      Who checks the invoice for addition errors?
      Who approves the invoice so it is paid?
      Blue Avocado, Five Internal Controls for the Very Small Nonprofit, January 6, 2010. http://www.blueavocado.org
    • 18. Design physical controls
      Lock money up
      Staff computers should be secured and have passwords
      Checks should be in a locked location
      Blue Avocado, Five Internal Controls for the Very Small Nonprofit, January 6, 2010. http://www.blueavocado.org
    • 19. Design cash procedures
      If cash is collected, two people count it
      If cash is disbursed for postage or other small amounts, require receipts
      Blue Avocado, Five Internal Controls for the Very Small Nonprofit, January 6, 2010. http://www.blueavocado.org
    • 20. Reconcile the bank statement
      The statement should be given unopened to someone on the board who does not handle the money
      Reconciling the bank statement is probably the chief safeguard against embezzlement
      Blue Avocado, Five Internal Controls for the Very Small Nonprofit, January 6, 2010. http://www.blueavocado.org
    • 21. Bookkeeper signs checks?
      Bookkeepers should not sign checks
      If this is impractical, set limit on the size of the check, for example no more than $100
      Safeguard: person who is not the bookkeeper should reconcile the checkbook
      Blue Avocado, Five Internal Controls for the Very Small Nonprofit, January 6, 2010. http://www.blueavocado.org
    • 22. Atmosphere and environment
      Periodically another board member might survey the fiscal operations, checking whether an expense is legitimate, payroll taxes were paid properly
      Setting a standard of high accountability actually is the best safeguard
      The best safeguards may still not catch every thief; they will help honest people and prevent ongoing theft
      Blue Avocado, Five Internal Controls for the Very Small Nonprofit, January 6, 2010. http://www.blueavocado.org
    • 23. Vermont Department of Libraries
       
       
       
      This publication is supported by the Institute of Museum and Library Services, a federal agency, through the Library Services and Technology Act.

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