Page 106 - DLIS003_LIBRARY ADMINISTRATION AND MANAGEMENT

Unit 6: Library Finance

Introduction Notes

Libraries are not revenue earning institutions. Most of them are service components of academic
and other institutional bodies. Hence they have a special obligation to manage their finances
with great care and judiciousness. The public library service is generally free because it is
supported by public funds, either through special grant from the government or through a
library cess.

The importance of the provision of a continuous flow of adequate finance to libraries cannot be
exaggerated. A few principles, however, are required to be kept in view, as finance is also an
instrument of control and evaluation.
No study of an important public activity like library services can be complete and fruitful unless
it also covers financial aspects. A basic knowledge of library finance, library expenditure,
budgeting and accounting is, therefore, very important for any librarian or student of library
science.

6.1 Financial Management

Financial management is not just managing cash or providing funds. It is the study of the
principles and practices involved in the financial operations of an institutions, industry or state.
The finance function is the task of providing funds needed for the enterprise i.e., provision of
funds and their effective utilisation. It deals with the problems and procedures of acquiring,
distributing and effectively utilising funds, balancing of revenue and expenditure and accounting
of the entire transactions for better control and evaluation. In other words, important phases or
components of financial management are:
Financial planning

Forecasting of receipts and disbursements
Realisation of funds and revenues

Allocation of funds
Utilisation of funds

Financial accounting
Financial control

Financial auditing
However, the library has a major share of responsibility in estimating its own financial
requirements, preparing a budget for its functions, activities and programmes, managing the
funds appropriated and spending within the specified period, maintaining accounts, and finally
preparing a report.

Notes The task of finding money; investing funds, managing property and getting the
sanction for the budget and all other related matters of finance are the responsibility of the
central executive authority of the parent organization to which the library belongs.

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