Page 125 - DLIS003_LIBRARY ADMINISTRATION AND MANAGEMENT

Library Administration and Management

Notes The budget is a guide on how to incur expenditure for the different activities and operations of
an institution throughout the year. The general principle is that the estimated expenditure
should not exceed the revenue. In other words, income and expenditure should balance each
other. The budget should not be confused with annual financial reports. The latter is an official
document to know what was achieved and what was not achieved during a given year. It is in
fact a factual record of the state of affairs of the finances of an institution during a particular year.
The budget, on the other hand, is only an estimate for the forthcoming year. In short, a budget
is a preparation for the future whereas the financial report is an analysis and evaluation of the
past.
The budget is also a very important instrument of control, communication, co-ordination,
evaluation and motivation. It controls as it canalises the expenditure according to set financial
rules and procedures. Budget estimates communicate to the staff and others concerned the total
financial outlay of the institution and the allocation of funds for each major item of expenditure
and regulate spending; coordinate through sharing of common expenditure of different units
not only to economise on expenditure but also to maximise fund utilisation; evaluate performance
on the basis of the utilisation of funds within the prescribed period; motivate staff to perform
well, for funds have been provided for the activities for which they were sought, envisaging
future developments. All the above attributes of a budget would equally apply to the library
budget.

7.1.1 Purpose of Budgeting

Having a budgeting system does not guarantee that the library’s planning efforts will be
improved. In some libraries, the budget is used as a planning process, but there is little emphasis
on using it to control operations. Budgeting is a cost-benefit proposition; the system has to be
designed to be used for controlling.
The advantages of budgeting must be emphasized periodically so that librarians at various
levels take the process seriously and maximum benefit is attained. As mentioned earlier, there
sometimes is an aversion to planning. By emphasizing the advantage of planning and budgeting
on a continuous basis, this aversion should be overcome.

1. Helps Enforce Planning: The most important advantage of budgeting is, of course, that it
forces librarians to plan ahead. Simply stated, librarians are very busy. Today’s world is
changing so fast that librarians are not simply dealing with routine situations on a
day-to-day basis. Instead, they must deal with complex problems with easy or known
solutions. Working within the framework of a plan facilitates tough decision-making
responsibilities. It is becoming extremely difficult for librarians to cope with problems of
increasing cost of publications and shrinking library budget.
A formalized budgeting system forces librarians to plan at all levels. Through critical
review of their proposed library budgets, higher managerial levels raises questions about
the way things are being done at lower levels. Librarians must step back from daily
operations and take a wider view of what’s really happening in their areas of responsibility.
2. Better Coordinate Activities: As you know, libraries are composed of many segments
covering many functions and programs. During the budgeting process, the plans and
related financial budgets of the various segments are brought together in one place.
Typically, a budget committee will review these plans and try to integrate them into a
total plan to achieve the organisation’s goals. This process results in opening up of
communication in the library from subordinates to superiors. There is also communication
between staff across section and department lines.

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