and school district libraries are required to follow these procedures,
however it is recommended that all types of libraries incorporate these procedures into their administration.
How does a board of trustees
insure fiscal accountability for their library?
The board should set in place a policy that includes a series of checks and balances. Having the correct policies in place and established roles will help all involved in the library feel secure that they are managing library funds in an appropriate and responsible manner. Read further to get details on how to set up the structure for fiscal accountability in your library.
What board committees
related to finance should our board have?
Every library board should have a finance or budget committee and a personnel committee.
"The finance committee
can be chaired by the treasurer, the board president is an active ex-officio
member of the committee. This committee usually oversees other areas such as
investment, fund development/fundraising and audit. Responsibilities include:
-Develops a proposed budget that advances the organization's purposes and goals for consideration and approval by the board of directors.
-Develops policies, processes and reporting procedures that promote the financial well-being, sound financial budgeting, management and the safeguarding of assets, and regulatory/contractual compliance of the corporation for recommendation to and approval by the board of directors.
-Monitors, on behalf of the board, implementation and compliance of all financial policies approved by the board.
-Reviews that financial implications of new initiatives and changing project revenue.
-Serves in an advisory and resource capacity to the treasurer in ensuring that accurate, complete and timely financial records and reports are developed, maintained and reported.
-Educates the board as to their fiduciary role and responsibilities.
-Assures that appropriate and sufficient coverage is secured." (Source: Council of Community Services of NYS, Inc.)
What fiscal policies
should my library have and where can I find samples of those policies?
Every library should have a purchasing (or procurement) policy, ratified through a board resolution annually, that identifies how to handle purchases in the library. Sample chart of policies and procedures
Every library should have a gift policy that clearly states how gifts to the library should be handled.
Samples policies are available at: http://midhudson.org/department/member_information/library_policies.htm
When should my library
seek competitive bids on goods and services?
Bidding laws are designed to guard against favoritism, improvidence, extravagance, fraud and corruption. Under General Municipal Law §103 if you are purchasing goods that total over $20,000 in a year (ex: heating oil) then you must go out to bid. If you are purchasing labor (ex: renovating your children's room) you must go out to bid for jobs worth over $35,000.
The Wicks Law mandates that construction projects use multiple "prime" construction contracts, competitively bid on for public works projects costing $500,000 or more.
Sample Written Quote Form
Are there exceptions
to the competitive bidding requirements?
There are four exceptions:
· State/County Contracts (To investigate state contracts go to: http://www.ogs.state.ny.us/.)
· Institutions (for example: if you are purchasing commodities produced by the Department of Correctional Services' Correctional Industries Program)
· Professional Services (i.e. engineers, architects, land surveyors, attorneys, physicians, and insurance brokers)
· Sole Source - a good or service uniquely provided by only one source
Is there a recommended procedure for purchasing?
A good bills processing system will ensure that library monies are spent effectively and efficiently. Make sure you have guidelines in place that identify:
1. personnel authorized to process transactions and paperwork
2. locations to receive vendor bills and invoices
3. the process to verify goods or services acquired have actually been received, are accurately identified and supporting documentation is included, and
4. other reasonable procedures to help with the initial processing of claims.
Once received and reviewed initially, claims should be submitted to the authorized official to begin the audit and approval process.
Is there a recommended
procedure for paying the bills?
It is important to keep a clear system of checks and balances in place for paying the bills, think of the process as having three steps each done by a different individual: preliminary review with the creation of a check, the signing of checks, an audit that reviews the checks and authorizes payment. The signing of checks and the audit of purchases should be done by separate individuals. For example, the board can designate the library director to sign checks for purchases and the finance committee or two board members can audit the checks (monthly) or the board treasurer can sign checks and the director can audit them. Regardless of the configuration, these three steps must be done by three different individuals.
Should our library use
claim forms (or vouchers)?
Using a standard claim (bill) form is a good idea because it elicits required information from vendors and library staff and provides a standard format. You can ask a vendor to use your form or accept their bill form, as long as it contains all the necessary information for audit by the board and for processing payment. Simply attach the bill to your claim form, number your claim forms in a consecutive order and fill in any additional information that is needed. This provides consistency in processing and subsequent filing.
What information should
be on a claim form and how is it completed?
Sample Claim/Voucher Form
What should you look
for when reviewing a voucher?
· Mathematical accuracy
· Supporting documentation
· Not a duplicate
· Purchase order
· Funds are available
· Contract information
What should you look for when auditing vouchers?
· Valid and legal purpose
· Incurred by authorized staff person
· Goods were received/services were rendered
· Available funds
· Properly reviewed
Are there exceptions
to prior audit?
· Contracts exceeding one year
· Court ordered payments
· Retirement system payments
What may be paid in before
· Public utility services
· Freight and express charges
· Petty cash payments
What should staff do
after the audit is complete?
· Prepare abstract of audited claims
· Certify claims on abstract have been approved by the board
· Keep claims as a public record
What should be included
in an abstract?
· the number of the claim;
· the name of the vendor;
· the amount allowed;
· the fund and appropriation account chargeable;
· the amount of encumbrance to be liquidated (if appropriate); and
any other information that might be deemed essential. This should include the vendor's address in order to know where to send the check.
Source: Office of the NYS