Page 126 - DLIS003_LIBRARY ADMINISTRATION AND MANAGEMENT

Unit 7: Budgeting

3. Helps in Evaluating Performance: Performance evaluation is not an easy task. Obviously, Notes
librarians desire a fair evaluation of their performance. They want to know what is expected
of them in advance.
When users evaluate a library’s performance, a common technique is to compare the
current with historical results. Also, the budget is used as a benchmark.

4. Helps in Controlling: Successful libraries create a control environment. They have an
effective set of internal controls to assure compliance with management’s policies and
procedures. Controls must assure compliance by staff at all levels. Librarians must
understand and follow the limits on their authority to expend the library resources.
Monthly budgetary control reports on spending documents the librarian’s actions in using
the authority granted. Of course, the budgetary control system should allow for changes
during the budget period. These authorized changes should be documented as part of the
management control system.
5. Helps in Allocating Resources: During the budget planning phase, many resource allocation
decisions are made. A good example is capital expenditures. The various segments of a
library will request a budgeted rupee amount for these expenditures. Invariably, the total
amount requested exceeds the organisation’s ability to finance that total. Consequently,
a capital rationing process is used. Typically, the library will use either the internal rate of
return or net present value method of evaluating the competing proposals for capital
expenditures.
6. Helps in Motivating: Budgets can be used by management to motivate both library staff
and users. If librarians participate in the planning process and budget preparation, they
are likely to develop more of a commitment to achieving the budget’s objectives.
In the process, they also realize that budget is important in coordinating the overall plan.
If an organization can develop a fair budget review process (and a fair performance
evaluation process); librarians will be motivated to achieve desired results. Conversely, if
these processes are not perceived as fair, the budgetary system will have a negative effect
on motivation.

Self Assessment

Fill in the blanks:
1. ……………… is a planning process in which the expenditure and revenue of the organization
over a specific time period are accounted for.
2. The budget serves the dual purpose of limiting expenditure to income and assuring wisely
planned …………..
3. A ………………….. budgeting system forces librarians to plan at all levels.

Caselet Libraries Preserves through Cumulative, Ongoing
Funding Cuts

alifornia’s 2011–2012 budget contained a 50% cut to the $30.4 million state-level
support for public library programs, providing per capita allocations, support for
Cinterlibrary loan, and funding for literacy instruction. In December 2011, Governor
Contd...

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