Budgeting Assignment
- 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.