Approved by the Library Board: June 9, 2010
Effective: June 9, 2010
The Menomonee Falls Public Library’s financial policies set forth the basic framework for the overall fiscal management of the Library. These policies assist the decision-making process of the Library Board, providing guidelines for evaluating both current activities and proposals for future programs. Most of the policies represent long-standing principles, traditions and practices and follow generally accepted accounting principles which have guided the Library in the past and help maintain financial stability.
Operating Budget Policies
- The Library prepares an annual budget for operations to be financed in whole or in part by a general property tax, in accordance with State of Wisconsin Statute 65.90 and presents it to the Village Board for approval.
- The Library operating fund budget is compromised of library operations (Fund 220) and library maintenance (Fund 221).
- The Village will prepare regular reports comparing actual revenues and expenditures to budgeted amounts for review by management and the Library Board.
- Budget adjustments between accounts may be made with approval of the Library Board.
- Budgets are classified as either lapsing (spending authority terminates at year-end) or non-lapsing (spending authority continues through the life of a project). All lapsing budgets are prepared for fiscal year operations beginning January 1 and ending December 31.
Fund Balance Reserve Policies
The fund balance is the result of assets less liabilities at year end. The fund balance consists of the following:
Restricted fund balance – An outside individual or agency remits donations, grants, or other revenues for a specific purpose,
Reserved/Designated fund balance – The Library Board decides to reserve portions of the fund balance for certain purposes. Up to 50% of the fund balance may be earmarked for designated purposes, e.g., computer upgrades, or offsets to future year tax rates. Designations will be reviewed annually, at a minimum.
The balance of the fund balance is considered unreserved/undesignated, often referred to as working capital. The Library intends to maintain a working capital reserve equal to sixty to ninety days of the Operating Budget to provide for reasonable cash flow needs. This reserve may be used for unforeseen emergencies, unexpected increases in service costs, or other situations which are deemed to be emergencies by the Library Board. Maintenance of an adequate working capital reserve is of prime importance to the Library Board.
Unspent budget funds are added to the fund balance at year end. Likewise, any deficit reduces the fund balance.
Any expenditures from fund balance monies must be approved by the Library Board.
The Library will attempt to maximize benefits from major revenue sources as a way of maintaining a stable tax rate.
The Library will establish all user charges and fees at a level related to the full cost (operating, direct, and indirect) of providing the service, whenever practical.
Charges and fees will be reviewed annually by Library administrative staff.
The Menomonee Falls Public Library’s policy is to invest public funds in a manner which will provide the highest investment return with the maximum security.
Investments shall be made with judgment and care, under circumstances then prevailing, which persons of prudence, discretion, and intelligence exercise in the management of their own affairs.
The primary objectives and guiding principles are, in priority order:
- Safety of principal is the foremost objective
- Return on investment
Authority to manage the Village’s investment program is derived from State of Wisconsin Statutes and Village ordinances. Management responsibility is assigned to the Director of Financial Services.
Officers and employees involved in the investment process shall refrain from personal business activities that could conflict with proper execution of the investment program or which could impair their ability to make impartial investment decisions. They shall disclose to the Village Manager any material financial interests or investment positions held in financial institutions that conduct business with the Village.
Library administrative staff will consult with the Village Director of Financial Services on an annual basis to discuss investment opportunities available to the Library. Staff will then meet with the Budget/Personnel Committee of the Library Board to prepare recommendations for the Library Board’s approval.
Capital Budget Policies
The Library will participate in the Village’s capital improvement program when necessary.
The Library may utilize its fund balances to fund capital projects whenever available and feasible.
The Library will 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.
Accounting, Auditing and Financial Reporting Policies
As required by State law, an independent audit will be performed annually for all Library funds as part of the general Village audit.