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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.