ALA FINANCE BEST PRACTICESASSOCIATION FOR LIBRARY SERVICE TO CHILDREN BUDGET PROCESS

2011 Midwinter Meeting Friday, January 7, 2011

ALSC’s Finances Background Simple structure- no chapters or sections Focus on strategic budget and finance

operations Added Fiscal Officer Budget Committee includes Fiscal Officer, Vice-

President/President, Past-President Funding decisions based on strategic plan and

continuing operations 11Endowments and Long-Term Investments offset

operations and provide opportunities to expand services Awards, scholarships, continuing education, leadership

development

Budget Preparation Continuous cycle September - November

Staff review budget notes and evaluate projects

Create division budget assumptions Use past trend data Look at variances and adjust Factor in new products or services

December Prepare budget summary and narrative for

Budget Committee

Detailed Explanations

Budget Summary

Budget Narrative

Budget Preparation cont’d Midwinter Meeting

Budget Committee meets twice Review strategic plan, operations, initiatives Review endowment performance and activity Increase funding if necessary Review requests for funding

Discuss ALA finances Prepare and present preliminary proposed

budget to the ALSC Board

Endowments Operating Fund Reserves (Net Asset Balance)

Four or more months is acceptable “Remarkable” organizations carry an average

reserve of 90% of annual expenses. Endowment/LTI Transfers

$300,000 earmarked for a new Board Initiatives LTI

Increase fund balances of existing LTIs through transfers Cover new expenses

Budget Preparation cont’d Midwinter Meeting Budget Committee meets twice

Review strategic plan, operations, initiatives Review endowment performance and activity

Increase funding if necessary Review requests for funding

Discuss ALA finances Prepare and present preliminary proposed

budget to the ALSC Board

Budget Preparation cont’d Board will review and approve preliminary

budget for presentation to BARC in spring. February-June

Executive Director incorporates necessary adjustments as assumptions change or Board action requires

Executive Director presents budget to BARC Executive Director prepares final preliminary

budget Budget Committee reviews and makes

recommendations to Board Board approves final budget

Budget Preparation cont’d July-August

Executive Director prepares monthly allocations Professional membership renewals Non-serial publication production schedule Conference and event expenses

September Start of fiscal year

Monitoring Staff monitor and track their project

areas Tracking spreadsheets developed from

budget notes Staff process accounts receivable and

payable Staff provided with ALA chart of accounts

and ALSC project numbers

Chart of Accounts

ALSC’s Project Numbers

Monitoring cont’d Staff monitor and track their project areas

Tracking spreadsheets Staff process accounts receivable and payable Staff provided with ALA chart of accounts and

ALSC project numbers Monthly reconciliation by Executive Director

Review FRX reports looking at variances Look for line items that were not budgeted Correct any miscodes or errors on monthly basis Provide monthly summary report with analysis to

ALA and Budget Chair

Mid-Year Projections February/March

Begin to formulate mid-year projections Analyze year-to-date income and expenses against

allocations Look at overall operating fund line items

Drill down to project level line items Submit projections to ALA and Budget Committee Continue to monitor and analyze in monthly

reports This helps both the Division and ALA project

where they will be at the end of the fiscal year. Allowing for expense reductions, if necessary.

Contact Aimee Strittmatter

astrittmatter@ala.org 312-280-2162