1. Emily Ward
LIS 505
15 March 2011
Budget and Finance Assignment 2: Budgets
1.
Actual Budget Variance
Total Revenues 284,731 281,349 3,382
Total Direct Expense 65,743 69,135 -3,392
Total Personnel Expense 170,606 176,352 -5,746
Total Building Expense 17,022 22,600 -5,578
Total Operating Expense 24,805 20,490 4,315
2.
REVENUES Actual 2004 Changes Budget 2005
Tax Revenue 269,055 -2,550 266,505
Charges for services 6,272 6,272
Contributions 1,150 -1,000 150
State aid grant 4,760 + (.56)(4,760) 7,426
Interest Income 2,184 2,184
Miscellaneous 1,310 x2 2,620
TOTAL REVENUES 284,731 285,157
EXPENDITURES
DIRECT EXPENSE
Adult Books 23,509 +(.045)(23,509) 24,567
Children’s books 11,908 +(.045)(11,908) 12,444
Reference books 6,227 +(.045)(6,227) 6,508
Professional books 302 +(.045)(302) 316
YA materials 1,611 +(.045)(1,611) 1,684
Periodical purchase 6,000 +(.045)(6,000) 6,270
Audio visual material 7,566 +(.045)(7,566) 7,907
Inter-library loan 6,906 6,906
Children’s activities 1,714 1,714
Copy Machine Maintenance 0 250
TOTAL DIRECT EXPENSE 65,743 68,566
PERSONNEL EXPENSE
Gross Wages 144,339 +(.07)(144,339) 154,443
Medical insurance 12,675 -(178,795-154,443- 673
347)/2

2. Payroll taxes 10,508 -(178,795-154,443- -1494
347)/2
Cafeteria fund 2,737 -2,737 0
Lagers 347 347
TOTAL PERSONNEL EXPENSE 170,606 +(.048)(170,606) 178,795
TOTAL BUILDING EXPENSE 17,022 17,022
TOTAL OPERATING EXPENSE 24,805 24,805
TOTAL EXPENDITURES 278,176 289,188
EXCESS OF REVENUES 6,555 -4,031
FUND BALANCE, BEGINNING 246,902 253,457
FUND BALANCE, ENDING 253,457 249,426
3.
Calculation Percentage of Expense/Revenue
Direct Expense 65,743/278,176 23.6%
Personnel Expense 170,606/278,176 61.3%
Building Expense 17,022/278,176 6.1%
Operating Expense 24,805/278,176 9.0%
Tax Revenue 269,055/284,731 94.5%
Charges for Services 6,272/284,731 2.2%
Contributions 1,150/284,731 0.4%
State aid grant 4,760/284,731 1.7%
Interest income 2,184/284,731 0.8%
Miscellaneous 1,310/284,731 0.5%
4. In order for the organization to adhere to its budget throughout the year, regular financial reports
need to be prepared, preferably on a monthly basis. This way, adjustments can be made periodically
when necessary. Without monthly reports, there wouldn’t be an easy way to make changes to spending
or to the budget before it may be too late.
5. I think a library should definitely be involved in advocacy efforts during election season, when
important tax issues are considered. More than monitoring, library staff should be out in the community
showing community members why the library is important. Additionally, of course, libraries should be
aware of inflation, the differences between the costs of digital and print materials, and the rises and falls
in utility costs depending on the season.
6. An increase in taxes of 10 percent is a hefty increase. To determine the best way to allocate this
surplus of funds, I would have each unit present a case for how they think the money should be used.
This allows each area of the library to think about ways that they could improve their service. Looking at
the current state of the budget, I would probably first funnel some additional money into our operating
budget, as it overshot by more than $4000 during 2004. Then I might look at what we could do to
develop our young adult section. As is, the budget for purchasing young adult materials is less than 3
percent of our direct expense budget, which I’m sure is hardly comparable to the percentage of young

3. adult patrons. With such a small budget, it seems unlikely that there is a room or department specifically
for young adults, so maybe hiring a part-time young adult librarian would be a good use of the extra
funds (if it seemed likely for this tax increase to stick for long-term). The YA librarian could be an
advocate for that population of our patrons and could work to increase the budget and circulation of the
section in years to come.
7. Cutting 10 percent of the tax revenues would be a major hit to our budget, one that wouldn’t be
negotiated easily. Asking the different units to compete to not lose a program or service patrons have
come to rely on is a much more difficult task than asking them to compete for additional programs or
services. The most direct way to handle the decrease of funds (though probably not the easiest), would
be to let a staff member go. This would free up a huge chuck of change, since personnel expenses are
the largest area of costs to the library. If that really didn’t seem feasible, I would probably institute a
hiring freeze (so the next time someone left or retired, we wouldn’t hire a replacement) and cut back on
other unnecessary expenses, such as the cafeteria fund and special projects. I would also encourage
more librarians to seek grants for programming costs.