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Income and Expenditures

Page history last edited by Kim Miller 4 years, 10 months ago

July 31, 2015

 

Question

 

Colleen Hamer (MT)

 

Hello all,

 

I’m hoping to get a sense of the types of quality controls in use regarding all of the income and expenditures elements.

 

  1. For instance, I’m wondering if a great number your states have additional local elements to 1) provide detail and 2) get monies categorized correctly.  E.g. we’re thinking of dividing 300 Local Government Revenue into City, District & County … any strong opinions on that one way or the other?

 

  1. Based on the data (small dollar figures) it appears that we may have a good deal of misreporting in capital expenditures that should likely be in operating (we break down the single 405 Total Capital Expenditures into Building, Collection, Equipment and Other – I almost think this causes reporting in these capital categories that, if they had to simply characterize it as a capital expenditure they might place it (correctly) in operationg).  Does anyone else have operating as opposed to capital reporting difficulties? And if so, what corrective measures help?

 

  1. Also, we have disparity between Operating Income and Operating Expenditures; same for the capital side. Nothing to worry about? From my reading of the definitions these should be very close; i.e. we had this income to cover these expenses. I interpret the capital definitions to say that unless the income/revenue is expended it shouldn’t be listed as revenue?  Should a guideline be that these two figures should be relatively similar? Anyone have percentage edits to guide this?

 

Any responses/discussion are welcome.


 

SDC Comments

 

Michael Golrick (LA)

 

Here is what we ask for:

 

LOCAL REVENUE

Include all tax and non-tax receipts allocated by the city, parish, or library district and available for expenditure by the public library.

12.1 Ad valorem tax - Revenue received from the library’s dedicated property tax.

12.2 General sales & use tax - Revenue received from dedicated or shared taxes imposed upon the sale or consumption of goods and/or services.

12.3 Other local revenue - Revenue received from local government in the form of grants or grants in aid, local shared revenue, and local payments in lieu of taxes. Include also penalties and interest on delinquent taxes and other miscellaneous taxes that cannot be classified in either of the above. Do not include the value of any contributed or in-kind services or the value of any non-monetary gifts and donations.

12.4 TOTAL Local Revenue - Totals are automatically calculated.

STATE REVENUE

All funds distributed to public libraries by the state, except for federal money distributed by the state.

12.5 State revenue sharing - Revenue levied by state government but shared on a predetermined basis with local government. Homestead exemption replacement.

12.6 State aid - State funds appropriated to the State Library for the annual program of supplemental grants to public libraries for the purchase of books, technology enhancements, and other specifically designated purposes. The State Library is providing this figure. This field is locked.

12.7 Other state revenue - All other state revenue, including such as Division of the Arts grants.

12.8 TOTAL State Revenue - Totals are automatically calculated.

FEDERAL REVENUE

All federal funds distributed to public libraries, including federal monies distributed by the state.

12.9 Federal grants - Include such as LSTA grants.

12.10 Other federal revenue - All other revenue received from federal sources such as federal shared revenue, payments in lieu of taxes, entitlements, etc.

12.11 TOTAL Federal Revenue - Totals are automatically calculated.

OTHER REVENUE

All other operating revenue not reported in the preceding categories, including fees, fines, interest earnings, and monetary gifts and donations.

12.12 Fees & fines - Revenue from all fees, charges, and commissions for services and activities, including nonresident and temporary borrower fees, loan charges for certain library materials, etc. Include also revenue received from fines and penalties for overdue, lost, or damaged materials.

12.13 Use of money and property - Revenue derived from the investment of money (interest earnings), from the use (rent/lease income) or from the sale of land or other fixed assets.

12.14 Gift & donations - Monetary gifts and donations from private sources—individuals, groups, and Friends. Include also corporate giving and foundation grants, as from the Gates Library Foundation.

12.15 Other financing sources - Proceeds from general long term loans or bonds; proceeds from sale of assets; compensation for loss or damage to assets (insurance recovery); proceeds from sale of investments; refunds of expenditures; expendable trust receipts, and other revenue not properly classified in any of the preceding categories.

12.16 TOTAL Other Revenue - Totals are automatically calculated.

12.17 TOTAL OPERATING REVENUE - Totals are automatically calculated.

12.18 FUND BALANCE/RESERVE FUNDS - This should include all funds which are in an account dedicated for Library use. It should have the excess from all prior year operations reduced by any operating deficits.

 

Part XIII FINANCIAL REPORT - OPERATING EXPENDITURES

Operating expenditures are the current and recurrent costs necessary to support the annual provision of library service. Report only actual expenditures supported by documentation such as invoices, contracts, payroll records, etc. Do not include capital expenditures in this category.

STAFF EXPENDITURES

Salaries, wages, and employee benefits paid from the library budget for the fiscal year for all staff including plant operations, security, and maintenance staff. Report salaries and wages before deductions (i.e withholdings).

13.1 Director’s salary - Salary of the library administrator.

13.2 All other salary & wages - Salaries and wages for all other library employees.

13.4 Employee benefits - Benefits outside of salaries and wages paid and accruing to employees. Report only the portion of employee benefits paid from the library budget. Include Social Security, retirement, medical and life insurance, guaranteed disability income protection, unemployment and workmen's compensation, tuition, and housing benefits.

13.5 TOTAL Staff Expenditures - Totals are automatically calculated.

COLLECTION EXPENDITURES

Report annual, recurring expenditures from the operating budget for library materials in print, microform, electronic, and other formats, which are considered part of the collection, whether purchased, leased, or licensed.

13.6 Books & other print material - Expenditures for the following print materials: books, paperbacks, government documents, and any other print acquisitions. Include here the cost of any books leased.

13.7 Serials in print - Expenditures for current serial subscriptions and serial back files in print format.

13.9 Electronic materials - Expenditures for electronic (digital) materials such as for the following: e-books, e-serials, e-journals, e-government documents, databases (including locally mounted databases), e-reference tools, and any electronic or digitized files, scores, maps, or pictures including materials digitized by the library. Electronic materials can be distributed on magnetic tape, diskettes, computer software, CD ROM, or other portable digital carrier, and can be accessed via a) a computer, b) the Internet, or c) an e-book reader. Include expenditures for materials held locally and for remote electronic materials for which permanent or temporary access rights have been acquired. Include expenditures for database licenses. (Note: Based on ISO 2789 definition).

13.10 Audiovisual materials - Expenditures for audio, video, DVD, compact disks, films and any other such format. Include here the cost of any AV materials leased.

13.11 Other library materials expenditures - Expenditures for microforms, art prints, etc.

13.13 TOTAL Collection Expenditures - Totals are automatically calculated.

OTHER OPERATING EXPENDITURES
Report all other annual, recurring operating expenditures, excluding expenditures for staff and collection.

13.14 Utilities - Expenditures for telephone, electricity, gas, water, waste disposal, Internet services, and other public utility services.

13.15 Contractual maintenance services - Expenditures for custodial, janitorial, security, and other services procured independently by contract or agreement with persons, firms, corporations, or other governmental units.

13.16 Professional services - Expenditures for legal, accounting, engineering, architectural, or library consultant services, etc.

13.17 Insurance & surety bonds - Expenditures for fire, theft, casualty, general, professional liability, and motor vehicle coverage, etc.

13.18 Training, education & travel - Expenditures for transportation, mileage, lodging, meals, and registration fees for continuing education programs and conferences and other similar expenditures incurred while on official government businesses.

13.19 Furniture, machinery & equipment - Expenditures for library, office, building, grounds, furniture machinery, and equipment for existing facilities. Include such items as shelving, tables, chairs, photocopiers, desks, microfilm readers, lawnmowers, etc. Exclude such expenditures for new or greatly expanded outlets—reported as Capital Expenditures.

13.20 Electronic access - Expenditures for electronic access equipment and ongoing costs related to electronic access for existing facilities. Include maintenance contracts, staff software, anti-virus and filtering software, “replacement” computers and peripherals such as printers, modems, and scanners. Exclude capital expenditures such as for new automation systems and other electronic access expenditures for new or greatly expanded facilities reported in the “Capital Expenditure” category. Exclude also database licensing reported in the “Collection Expenditures” category under “Electronic Materials Expenditures”.

13.21 Statutory payments & contributions to retirement systems - Expenditures for payments to sheriff and assessor mandated by various Louisiana statutes. Include deductions from revenue for tax collection costs.

13.22 Bookkeeping, accounting, & auditing - Expenditures for bookkeeping, accounting, and auditing services are listed here. These charges may be from parish or municipal governments or from a service provider hired directly by the library.

13.23 Grants - Expenditures for contributions made to another governmental unit. Include payments to Bayouland, Green Gold, Trail Blazer, and Libraries Southwest.

13.24 Tax election - Expenditures for costs of tax election paid from library’s budget.

13.25 All other operating expenditures - All other expenditures not specified in any of the preceding expenditures categories. Include expenditures for the following: membership dues, messenger and delivery service, advertising, printing, duplication, binding, postage, building rentals, maintenance of property and equipment, minor repairs, materials and supplies (stationery, forms, paper including computer paper, ribbons, disks, library processing materials), motor vehicle supplies (oil, antifreeze, etc.), small tools (rakes, shovels, weed eaters, hand tools, etc.), debt service, etc.

13.26 TOTAL Other Operating Expenditures - Totals are automatically calculated.

13.27 TOTAL OPERATING EXPENDITURES - Totals are automatically calculated.

Part XIV Capital Revenue

Please provide all sources of revenue during the current year for what your governing unit calls “Capital” items. Capital is defined by your local governing authority.

14.1 Local capital revenue - List all capital revenue from local sources including directly from the parish jury or the proceeds from an election.

14.2 State capital revenue - List all capital revenue from the State of Louisiana or any state agency.

14.3 Federal capital revenue - List all capital revenue from federal sources including directly from any federal government agency.

14.4 Other capital revenue - List all capital revenue from all other sources not listed.

14.5 TOTAL CAPITAL REVENUE – Totals are automatically calculated.

Part XV Capital Expenditures

Please provide all expenditures during the current year for what your local governing unit calls “Capital” items.

15.1 Land

15.2 Buildings

15.3 Motor vehicles

15.4 Furniture, machinery & equipment

15.5 Electronic access

15.6 Collection

15.7 Major repairs

15.8 Professional services

15.9 Construction in progress

15.10 All other capital expenditures

TOTAL CAPITAL EXPENDITURES – Totals are automatically calculated.

 

Hope this helps.


 

Michael Golrick (LA)

 

Hi-

 

I forgot to mention that revenue and expenses do not need to match. Indeed, I would be suspicious if they did.

 

For my libraries, there is often no capital revenue at all, and the capital expenditures come out of the accumulated reserves, which builds by having more revenue than expenses.


 

Kathy Sheppard (SC)

 

South Carolina libraries are county-based, and all comparisons and calculations are based on county tax dollars per capita, so it’s important for us to break out municipal funding.

 

Note that the PLS definition of “capital” covers collection and equipment for new buildings only, not for ongoing/annual expenditures.  Some jurisdictions may think of the overall library collection as “capital” for insurance purposes, but annual expenditures for materials and most equipment belong in operating, not in capital.

 

Revenue will never match expenditures although a very small library on a very tight budget might be able to account for every penny.   Local governments have oddball funding, non-recurring funding, varying rules about carryover, and weird auditing practices.  We don’t have time, staff, or a state mandate to monitor libraries that closely, and (thank goodness!) states are not required to balance funds in the PLS. 

 

Hope this helps—


 

Colleen Hamer (MT)

 

Thank you all very much.

 

There is a good deal to think about for these money items. I appreciate all the information and clarifications.-


 

Rob Geiszler (VT)

 

Hi Colleen,

 

I’d like to address your question #3:

 

I was having a lot of trouble making sense of our libraries’ reporting. They’d have tremendous expenses and no income to support them, or in a few very rare cases, there was income that didn’t seem to be supporting any expenses.  Several years ago, I added a few new sections to our report.  I added this section to our revenue side:

 

Transfers:

 

D10 Record here funds transferred from the principal or interest of any trust or endowment fund or investment or savings account which were 1) owned by the Library or Library Board, or over which the Library or Library Board had exclusive control and 2) disbursed into the general operating fund and expended on normal operating expenses or expended directly for normal library operations. Do not include: 1) any interest or other earnings which were retained in the trust, endowment, investment or savings account to accumulate; 2) any interest or other earnings which were retained, although earmarked for future use and not expended in the current fiscal year for normal library operations; 3) funds that have been transferred for capital improvements; 4) income from regular bequests, funds or trusts of which the library is a beneficiary, but over which the Library has no control. (These regular bequests or trust funds received as a beneficiary should be recorded above in "Other Local Income" (line D08)

 

 

Help For Question D10

This section is included to allow libraries to account for funds which the library owned or over which the library had control and which were moved from one account to another to be expended on normal operating expenses or which were simply expended on normal operating expenses. That is, this is NOT new money raised or contributed in the last fiscal year and spent on normal operating expenses, but "old" money raised in prior years which has been tapped this year for these normal operating expenses. This may help to explain disparities in expenses and revenues. If there were no transfers, enter "0".

 

The point here is that we know that some of our libraries are drawing from income sources that are not necessarily hit each year and that we don’t want reported as “ordinary” income.  Alternatively they may have dipped into savings, or may have raided endowment because of a peculiar expense, but not necessarily a capital expenditure. The way I try to explain this to librarians is that if they’ve tapped “old” money, there’s no other place to report this. Now, I’ve given them that place.

 

Then when I get to the end of the expenses report, which is basically the end of all the financial information, I have this section:

 

                Reconciliation:

F15         The amount shown on Line D11 has been entered here (Total Operating Revenues, above):

                               

F16         The amount shown on Line F11 has been entered here (Total Operating Expenses, above):

                               

F17         Subtracting line F15 from line F16 above leaves:

                               

F18         The percentage of line F15 that Line F17 constitutes has been calculated here:

                               

                The above sections do not constitute a balance sheet. Nonetheless, Total Income should be approximately equal to Total Operating Expenses. There may be unusual circumstances that have influenced your finances. If the absolute value of the percentage on line F18 is greater than 15%, what factors would explain this difference? Were there unusual revenues? Did you have unusual expenses? If the absolute value of the percentage on line F18 is greater than 15%, please give an explanation in the State Edit Check for this question. (See the help for this question for further information)

 

Help For Question F18

This report is not a balance sheet, so the total expenses and total revenues may not be exactly equal. As indicated, however, your expenses and revenues should come somewhat close to balancing. If your income and expenses do not seem to align, please explain any peculiar circumstances which might explain the inconsistencies. For example, you might have begun the year with a sizeable balance left from your last fiscal year for which there isn't any accounting in this report. Or, perhaps you had expenses which came due at the end of the fiscal year for which you will account in your next fiscal year. If there is an inconsistency that is not clear to you, consider reviewing your entries for possible entry mistakes. If the entries you have made are accurate, but out of range, you will need to add an explanation in the State Edit Check. If you have questions please contact Rob Geiszler at (802) 786-3839 or rob.geiszler@state.vt.us.

 

This gives the libraries an opportunity to review what they’ve submitted, but if there are strange circumstances, they can report that to me in the survey, rather than having some sort of follow-up phone call. 

 

This doesn’t necessarily go into the Federal reporting, which doesn’t seem to include any worry about these inconsistencies,  but on the state level, I’m a lot more comfortable in making sense of where these libraries stand.

 

I’m not delighted with my verbiage, but I’ve spent enough time with our librarians, that they understand what I’m after. This has smoothed out a lot of the disparities, over the years.


 

Jamie McCanless (WI)

 

Colleen,

 

Operating Revenue. In Wisconsin, we collect:

 

  1. Local Municipal Appropriations for Library Service

  2. County

    1. Home County Appropriation for Library Service

    2. Other County Payments for Library Service

  3. State Funds

    1. Public Library System State Funds *

    2. Funds Carried Forward from Previous Year

    3. Other State Funded Program

  4. Federal Funds

  5. Contract Income (form other governmental units, libraries, agencies, library systems, etc.)

  6. Funds Carried Forward (not including state aid)

  7. All Other Operating Income

 

* In Wisconsin, state aid is distributed to our regional public library systems.

 

We track municipal and county funding individually because we have:  an elaborate system of county payments for nonresident use; and municipal, joint municipal, city-county, and county libraries. Even if we didn’t, the distinction lets us look at trends in municipal and county funding.

 

Capital revenue and expenditures. We defer to the municipalities’ requirements/practices. Our instructions read:

 

1. Capital Income and Expenditures by Source of Income

Enter capital revenues and capital expenditures by source of revenue for the year just ended. Report all revenue to be used for major capital expenditures and all capital expenditures. Include funds received for:

  • Site acquisition

  • New buildings

  • Additions to or renovation of library buildings

  • Furnishings, equipment, and initial collection (print, non-print, and electronic) for new buildings, building additions, or building renovations

  • Computer hardware and software used to support library operations; to link to networks, or to run information products

  • New vehicles

  • Other one-time major projects

 

Exclude funds received for:

  • Replacement and repair of existing furnishings and equipment

  • Regular purchase of library materials

  • Investments for capital appreciation

  • Capital projects in the previous year but unspent in 2014

 

Income vs. expenditures. I do ask about very large differences between operating revenue and expenditures to check for data entry errors, but otherwise only ensure that reported total operating expenditures are not greater than total operating revenue.

 

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


 

Sam Shaw (NE)

 

Hi Colleen:

 

Nebraska:

 

Local Government Revenue

-City/Village

-Township

-County

-Other Local Government Revenue

-Total

 

State Government Revenue

-State Aid

-Grants

-Total

 

Federal Government Revenue

-Federal Library Improvement Grant (LSTA)

-Other

-Total

 

Other Revenue

 

Capital Revenue

-Local

-State

-Federal

-Other

-Total

 

Yes, like most others there are sometimes differences in capital revenue/expenditures that you mention in your number 2 below. Generally, when the surveys are reviewed before locking, those fields are looked at and then the library director is asked what the expenditure was for. Sometimes, they report capital revenue but not expenditures, but more often a capital expenditure but not revenue.

 

 

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