By John Thompson, Director – IFLS Library System
One of the primary authorities granted to the Library Board is the management of the library’s budget. Your financial responsibilities are referenced in a variety of subsections within Wisconsin State Statute section 43.58.
Key Statutory References
- Exclusively control the expenditure of all monies collected, donated or appropriated for the library fund. (43.58(1))
- Audit and approve all expenditures of the public library and forward the bills to the appropriate municipal or county official to pay (43.58(2))
- Prescribe the duties and compensation for all library employees (43.58(4))
- Receive, manage, and dispose of gifts and donations (43.58(7))
What does all of this mean for you as a library board and a library board trustee?
Budget Development
The Library Board, working with the Library Director, develops a draft operational budget for the upcoming fiscal year based on the anticipated revenue. Typically for a municipal library the projected revenue would include County Revenue (appropriations by the County in support of nonresident use); Fines & Fees; other revenue; and the municipal appropriation request. The operational budget establishes anticipated spending by budget categories including wages and benefit amounts for library staff.
The municipal appropriation request is submitted by the Library Board/Director during the municipality’s budget development process. The request typically is the gap between the anticipated revenue and the projected operational expenditure. As the municipal budget process progresses through its typical stages, the Library Board and individual trustees serve as advocates for the appropriation request. Once the municipal appropriation is finalized, the Library Board, with input from the Library Director, will approve the initial operational budget for the library.
Spending
The Library Director or their designee will use this budget framework to expend funds on materials, programming, supplies, and other services in support of running the library. The Library Board, at their monthly meetings, will approve those expenditures prior to the local municipality issuing payments for those invoices. Some of the recurring expenditures such as payroll expenses and those specifically designated by the Library Board can be approved after they are paid but they must be included as part of the monthly financial report developed and provided to the board by the Library Director or their staff designee.
Budget Revisions
During the course of the year, the Library Board can approve adjusted allocations in the individual budget categories to meet changes in priorities or unexpected operational costs. Some changes could include increased fuel/utility costs, new material formats, or the need for additional staff. These changes occur without the need for formal approval by the municipal board.
Unexpended Funds
Once funds are appropriated to the library fund as noted above, they fall under the exclusive control of the Library Board. Any funds unspent by the library should be carried forward into the new fiscal year for expenditure by the Library Board. This could be referred to as either a Fund Balance or Carryover. The funds should then be reallocated for expenditure during that fiscal year based on an Attorney General’s opinion. A Library Board could designate a portion of those funds to cover sick or vacation leave payouts for retirement, but they cannot be placed into a fund without a designated purpose. Please note that if a library overspends its revenue they must find the funding to cover the overage.
Reporting
The Library Board should review and approve the monthly financial statements developed by library staff, but they should also be reviewing reports provided by the municipality to ensure that the approved expenditures are matching what was paid by the fiscal agent. Yearly the Library Board should be reviewing and approving the annual report submitted by the Library to the Library Bureau (Division).
Additional Resources
- Funding and Budgets https://dpi.wi.gov/libraries/public-libraries/funding-budgets
- Governance and Administration for Library Trustees https://dpi.wi.gov/libraries/public-libraries/governance-administration/trustees
- Trustee Essentials including TE1: The Trustee Job Description; TE8—Developing the Library Budget; TE9—Managing the Library’s Money; TE11 Planning for the Library’s Future
Contact your local library system if you have any questions.