Policy Number: 5.02
Original Effective Date: 6/9/10
Revision History: 11/9/14, 10/20/21
Sound financial reporting is an essential element of public-sector accountability to the citizens they serve. This policy defines basic accounting and cash control policies. It is designed to protect and enhance the security of Menomonee Falls Public Library’s financial functions, promote the maintenance of accurate records of financial activities, and facilitate compliance with government and private funding source reporting requirements.
Library Board of Trustees
The financial resources of the Menomonee Falls Public Library are the responsibility of the Menomonee Falls Public Library Board of Trustees (The Board). The Board members are appointed by the Village of Menomonee Falls Board of Trustees and serve without compensation. The Board is responsible for:
- Provide guidelines for management and allocation of financial resources which seek to produce optimum benefit for those we serve.
- Monitor and evaluate the financial plans of the Library and to maintain the financial integrity of the Library.
The Library Director is the primary purchasing agent for the Library and is responsible for all Library contracts, orders, and purchases. The Director shall select products, services and vendors that best meet the needs and goals of the Library. In making decisions regarding selection of products and services for the Library, the Director will comply with Village of Menomonee Falls policies and procedures and will consider relevant factors which include, but are not limited to: Suitability, Sustainability, Availability, Quality, Workmanship, Price, and Delivery. The Director may delegate the responsibility for ordering selected products and services to other employees as the Director deems appropriate or necessary to accomplish the goals of the Library. To help reduce the risk of financial loss to the Library, the Director will implement procedures to:
- Prevent embezzlement
- Ensure against liability losses (to Board members, the Library, or to Library funds)
- Properly maintain facilities and equipment. Limit exposure of the Library, the Board, and the staff to liability claims by properly maintaining facilities and equipment.
- Ensure funds are disbursed only in compliance with Board authorization and applicable municipal and state laws.
Library Business Manager
The Business Manager records Library revenue and expense transactions to accurately reflect Library operations. The Business Manager will act as a liaison with the Village Finance Department and will coordinate the creation of monthly reports for Library Board Review. As required by State law, an independent audit will be performed annually for all Library funds as part of the general Village audit. The Business Manager will be responsible for providing the requested documentation necessary to conduct the audit.
All Library staff with be familiar with this policy and the Purchasing Guidelines and Procedures and as public servants will exercise fiscal responsibility in regards to their use of Library funds. Employees who make unauthorized purchases will be subject to disciplinary action including possible termination.
Approval of Library Expenditures
The Library Director is authorized to make payment for budgeted expenses in advance of Board approval in order to take advantage of discounts and due dates. At the regular monthly meeting the Library Director will present for ratification by the Board a list of the most recent bills. The Board Treasurer selects bills from the list and reviews supporting documentation each month.
Expenses which do not fall within the planned operating budget must be approved by the Library Board as a budget amendment.
In cases of emergency or to secure the protection of the Library property or staff, the Library Board of Trustees authorizes the Director to secure goods and services without prior Board approval.
The Library Director reports monthly to the Library Board on the year-to-date status of revenues and expenditures as compared to the budget. The Library Director also presents an annual review of all the funds held by the Library.
Annual Operating Budget
The Library’s annual operating budget is comprised of Library operations (Fund 220) and Library building maintenance (Fund 221). Fund 220 budget is prepared by the Library Director and the Fund 221 budget is prepared annually by the Village Assistant Manager/Director of Public Works. These budgets are presented to the Library Board for approval utilizing the corresponding requirements of public notice and public hearing. After approval by the Library Board the proposed budget is presented to Village Finance for inclusion in the Village Operating Budget and presented to the Village Board for approval. The budget reflects the anticipated revenues of the Library to be used for planned expenditures of carrying out the programs and services for the next fiscal year.
The Library strives to maintain its physical assets at a level adequate to protect the Village’s capital investment and to minimize future maintenance and replacement costs. The budget will provide for the adequate maintenance and the orderly replacement of the capital plant and equipment from current revenues whenever possible.
The Operating and Library Building Maintenance Budgets are classified as lapsing accounts and are prepared for the fiscal year of operations beginning January 1 and ending December 31. Budget adjustments between accounts may be made with approval of the Library Board. Unspent funds at the end of the year are transferred to the fund balance. Likewise, any deficits reduce the fund balance. The Library may utilize its fund balances to fund capital projects whenever available and feasible.
Sources of Funding
Menomonee Falls Public Library strives to exceed the adopted Waukesha County minimum to exempt Library standards authorized by state statute and codified as enrolled Waukesha County Ordinance 11-5. The minimum to exempt standards are based on population of the Library municipality and include but are not limited to minimum materials expenditures, collection size, expenditures/per capita, full-time equivalent staff members, hours open, and available computer terminals.
Local Tax Revenue – The Library operating and building maintenance budgets are funded in whole or in part by a general property tax in accordance with State of Wisconsin Statute 65.90. Annually as part of the Library budget process, the Library Board shall request from the Village of Menomonee Falls sufficient funds to provide qualified staff, proper physical facilities and equipment, and a comprehensive collection of materials to meet the essential needs of its population.
Grants and Donations – Library staff will apply for grants and donations from outside sources whenever possible as a way of maintaining a stable tax rate.
Fines and Fees – The Library will establish all user charges and fees at a level related to the full cost (operating, direct and indirect) of providing the services, whenever practical. Charges and fees will be reviewed annually by Library administrative staff. Additions and subtractions to patron fees shall be approved by the Library Board.
Each day, the monies from the registers are collected and reconciled to cash register receipts. The money is stored in a secure place. Overages of cash receipts are considered donations and are deposited as monetary donations.
Regardless of the aggregate amount of daily receipts, a deposit of daily receipts must be made at least every third day. Deposits are made with the Village Clerk’s office.
Self-pay machines are emptied and deposited periodically during the month and deposited.
Cash Drawer Change Reserve Fund
A cash drawer change reserve fund will be maintained to keep a supply of small bills and coins on hand.
A petty cash fund shall be maintained by the Business Manager to reimburse employees for small dollar amount purchases.
Petty cash disbursements are usually for small expenses ($25.00 or less, unless approved for higher amounts by the director). All disbursements shall be documented with receipts and reconciled at least semi-annually.
Other Funds Held by the Library Board
Donations, grants, or other revenues given to the Library by an outside individual or agency for a specific purposes and unable to be spent in the same fiscal year will be deposited in a Special Reserve account until such time it can be spent for its designated purpose.
Library operating funds not spent at the end of the fiscal year are rolled into the fund balance.
Operating Reserves – The Library Board intends to maintain operating reserves equal to ninety days of the operating budget to provide for reasonable cash flow needs. The balance after subtracting the ninety days reserves is considered unrestricted funds.
Designated funds – The Library Board may choose to designate portions of the unrestricted funds for certain purposes such as building improvements or large purchases.
Fixed Assets are property, plant, furniture and equipment costing $500 or more with a useful life of three years or more. An inventory of fixed assets will be maintained by the Business Manager. The Information Technology Manager will be responsible for maintaining or coordinating with the Village IT department an inventory of technology and software assets.
An asset retirement plan will be maintained as items are withdrawn and retired. The fixed asset inventory will be reviewed on an annual basis prior to the creation of the annual budget.
The securing and maintenance of the Library’s investments has been delegated to the Village’s Finance Department as part of the Village’s investment program. Authority to manage the Library’s investment program is derived from State of Wisconsin Statutes and Village ordinances. Management responsibility is assigned to the Director of Financial Services.
Library administrative staff will consult with the Village Manager and/or the Village Director of Financial Services on an annual basis to discuss investment opportunities to the Library. Recommendations will be prepared for Library Board approval if required.
Purchasing and Disbursement of Funds
During the month the Business Manager presents bills to the Director for approval. After approval of the bills by the Director, the invoices are submitted to the Village Finance Department for payment and processing.
All requests for checks and electronic payments to disburse funds must be submitted with the appropriate documentation. Checks are processed two or three times a month. Checks will not be processed on demand, unless an emergency situation is determined.
Sales to public libraries are exempt from sales tax. Whenever possible staff members should attempt to make purchases as a tax exempt sale.
Sales by public libraries are not exempt from sales taxes. Sales tax is charged on sales including but not limited to photocopies, computer printout charges, sales of withdrawn books, USB drive, audio cords, rental fees, used equipment, etc. Sales tax is considered part of the sales price and paid to the State of Wisconsin monthly by the Village Finance department.
The Village Finance Department has authorized the use of a Credit Card for Library purchases. Purchases made on the Library credit card will be submitted with monthly expenses.
Through the Bridges Library System, the Library accepts credit cards for payment of overdue fines and Library fees. The patron is charged a convenience fee set by the System for using this payment source.
The Director is authorized to apply for lines of credit with vendors as needed.
The Library accepts monetary gifts to support Library programs and resources. The Business Manager will maintain a log of purchases made with designated gifts.
Responsibility of securing and maintaining adequate insurance coverage for Property Damage, Boiler and Machinery, Liability and Workers Compensation Insurance is delegated to the Village Finance Department or their designee.