November 17, 2015

 

Question

 

Kristen Stehel (UT)

 

Hi all,

 

What I have been experiencing as a new SDC is this:

 

Some libraries are reporting x amount of other operating revenue, then proceeding to report x in local operating expenditures (instead of other operating expenditures) because x revenue folds back into the city budget for the next year.

 

Is this okay for reporting purposes?

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SDC Comments

 

Bob Wetherall (DE)

 

Amanda,

 

I am not familiar with Data Element 146 (Technology Lending Circulation).  I don't see it in the IMLS definitions for the PLS.  What am I doing wrong?

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Laura Stone (AZ)

 

Hi Kristen,

 

Am I understanding that the libraries are reporting revenue that is really going to the city?

 

I think expenditures and revenue are tricky, and there’s lots of grey area (I have a library that has its utilities paid directly by their Friends.) I would always go back to the definitions and review when trying to figure these out.

 

At the core, I work with the library to report revenue and expenditures that reflect what it costs to run the library that year. These numbers usually don’t match exactly, but if they’re not darned close, I want to understand why. In addition, AZ has a number of county library systems that provide cash and/or goods to municipal libraries located in the county, and I work with these libraries so that funds are only reported once – usually by the institution that actually drives the purchasing.

 

If the libraries are reporting the same funds twice, that means that their per capita revenue numbers will not be comparable to other libraries. It will look like they have more revenue than they really do. I would discourage the libraries from doing this.

 

What do others think?

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Jamie McCanless (WI)

 

Kristen,

 

This would be a big issue in Wisconsin because our statutes require that public libraries have exclusive control over their funds. I understand, though, that some (many?) states don’t have this protection.

 

If the libraries you describe are routinely returning municipal funding, those are not legitimate operating expenditures. They’re not spending the money on anything. Surely an auditor would challenge the practice. On the revenue side, it would most certainly increase calculated per capita support artificially.

 

If you have any questions, please feel free to contact me at (608) 266-3939 or jamie.mccanless@dpi.wi.gov

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Katrice Stewart (FL)

 

Hi, Kristen!

 

I have to agree with Jamie on this one, particularly if they are indeed returning funds. Sounds like they are fluffing up their local operating expenditures likely to bolster state support. My guess is that they’re trying to make sure all of their reports are matching yet getting the most bang for their literal buck. I would try, as Laura said, to work closely with them to resolve and have them use the proper categories J

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Kristen Stehel (UT)

 

When I say the money goes back to the city, I mean it goes back to the library budget that is controlled by the city. I hope that makes sense.

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Kathy Sheppard (SC)

 

So the money is reported as “other” operating revenue in FY14.

 

And some portion of it is reported as local expenditure in FY14?

 

Then if there is some left over in “other” operating revenue, that chunk rolls over into FY15? 

 

And the library is reporting the rolled-over, previously “other” FY14 funds, as local operating revenue in FY15? 

 

If that’s the case, it is a problem for how they are reporting operating revenue,  as carryover is not allowed per definition (see p. 45, OPERATING REVENUE, just above #300). 

 

It sounds like they figure because it rolls over to the city and the city gives it back to the library, it is transformed into local funding.  It is the carryover that is the problem. 

 

Or am I missing something?

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Jamie McCanless (WI)

 

Kathy,

 

I have to disagree about carryover. True, libraries mustn’t report funds that were not spent in the previous year as operating revenue in the current year but that doesn’t prohibit carryover – just reporting it in a subsequent year as “new” revenue.

 

My concern is that an amount is being reported as an operating expenditure that isn’t an operating expenditure; it’s an amount that’s lapsing back to the municipality.

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Kristen Stehel (UT)

 

From looking at past reports, many libraries have been reporting the same value in "other operating revenue" (303) as in "other operating expenditure" (304.4). Others have reported zero in both. Now there is this issue surfacing (as mentioned above) where x amount is reported in "other operating revenue" (303) and zero is reported in "other operating expenditure" (304.4). Because the other revenue is funneled back to the city for the upcoming library year budget, one library has said they will report the previous year's other operating revenue in the next year's other operating expenditure. I would imagine this has been an issue for a while though.

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Kristen Stehel (UT)

 

Since seeing zero reported for both 303 and 304.4 for several libraries, I have begun questioning said libraries as to why they don't report things like library fines under 303, 304.3. One library who used to report zero in both fields has now reported around 27,000 in 303 and 304.4. That's a chuck of change. Their local operating revenue and expenditure just decreased from about 243,000 to about 205,000.

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Jamie Mott (IL)

 

Kristen,

 

As a new SDC myself, I am finding several issues like yours.  In my instances, I am finding that a differently worded question or definition really helps libraries figure out what to put where.  We had a question worded “Local Government” under the heading “Operating Revenue by Source.”  Some libraries did not realize this meant their tax levy money and instead thought they should only put extra money they got each year from their local government.

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Michael Golrick (LA)

 

Hi-

 

I saw this message the other day – I was at the IMLS Focus event, and almost aske the other data folks there what they thought, but decided to wait. I am glad I did.

 

I think that, among other issues, there is a confusion that revenue has to exactly match. First of all, we ask about where the money comes from, and where it goes. Most of my libraries are separate taxing entities, and therefore, when money is left over it goes into the “Fund Balance” or “Reserve fund” or, if you will, a roll over account. Not all money has to be spent in the year it was received – unless it  is a grant, and that grant requires it.

 

What I am looking for (and sort of expect from the national stats), is sources of revenue by type and, on the other side, expenditures by category. Each of us has our own unique set of local quirks to the laws. Some, like Wisconsin’s (for which I was once grateful), protect library funds from being used elsewhere. Others have more flexibility.

 

The basic rule that I know is: report it only once. As someone noted in the conversation, if you spend from your fund balance, that is not revenue in the year you spent it because you already reported it as revenue in the year you received it.

 

Maybe that helps? If it is not a pressing issue, it is a great topic for discussion when we meet in person in a few weeks.