September 6, 2005
To: RCPL Trustees
From: Jim Olson, Finance Chair
Re: Auxiliary to Board Fund Transition
Recommendation: Transferring Auxiliary Fund Accounting and Revenue to
RC Finance Department beginning November 1, 2005. This recommendation is based
upon a financial audit of the Business Office that was conducted with the
recent vacancy of the Administrative Assistant. The financial audit
report is attached.
This recommendation reduces
redundancy of producing budget reports and the input of data into two systems.
There will be a period of adjustment for changes in procedures for example,
utilizing purchase orders that replace auxiliary checks and revenue deposits
with the city instead of the bank. The revenue collected however, will reside
within a separate account for the purpose of tracking and oversight. The budget
cycle remains the same for the account with the exception of a short-term
transition budget of two months, to move the funds over before the arrival of
the new administrative assistant. A direct inquiry line is also required that
allows for access to the budget and revenue information online into the city’s
system. Finance is confirming this through the direct line from the Library to
the Energy Plant which connects into City Hall.
The Board will encounter the
following changes:
§
a somewhat
different looking monthly
budget and bill list report.
§
the publication
date of the reports are approximately the 12th of the month, which
will require the monthly board meeting date to be changed until after the 12th
of each month
§
a two month
transition budget for November and December 2005 would need to be adopted at
the October Board meeting.
§
a bonus item of
new information provided by the Finance Department, is placing the library
utilities on a bill list for large public buildings that will begin to reduce
our current utility costs by approximately 7%.
Auxiliary Fund Background:
The South Dakota Codes have
designated that revenue from fines or fees collected by public libraries be
administered by library boards. The administration can be independently
accomplished with monthly accounting of the funds reviewed by the government
body. Historically, RCPL Board has maintained a separate checking account and
bookkeeping system for the purpose of administering these funds. Revenue
collected for this fund is collected through fines, nonresident library cards,
copiers and computer printing fees.
Board Fund Annual Budget
Adoption and Revenue:
The Board would adopt an annual
Board Fund Budget in December for the next fiscal year from the existing and
projected revenue to the account. In addition, any remaining revenue at the end
of the fiscal year in December would remain with the account and not return to
the general fund. The remaining revenue would be included in the next year’s
budget.