Page 138 - DLIS003_LIBRARY ADMINISTRATION AND MANAGEMENT

Unit 7: Budgeting

by type of material, by users, by language or by format. Such an allocation of funds provides Notes
better control and a more effective way to monitor funds and has the best chance to achieve fair
balance in the development of programmes and services. However, a rigid allocation, particularly
for collection development, may lead to difficulty in transferring funds from one account to
another and consequently under spending may occur in some cases when the other heads starve
for funds. In addition to such ineffectiveness, approval, blanket and standing order plans as well
as development of reference, general and special collections may not fit into any heads. Further,
matching the needs and money available becomes complicated, time consuming and it may be
difficult to develop models even after massive efforts. However, it may be noted that such
formal allocation of funds may not be necessary in a small library.

7.6.2 Encumbering Funds

The most difficult task in the budgetary control process in libraries or information centres is
encumbering funds. Encumbering funds is a complex process that allows one to set aside money
to pay for ordered items. The process of encumbering funds is difficult and complicated for
various reasons. Firstly, it is common that there will be other under spending and/or
overspending in some heads. Secondly, there are some uncertainties about supplies (delayed
supplies and non-supplies). Libraries make several orders for documents under many heads in
a given financial year and supplies are received continuously at non-fixed intervals. Generally
there is no automatic cancellation of non-supplied or unbilled orders and hence no
disencumbering done automatically. It is very common that prices, discounts and handling
charges of documents as well as exchange rates for foreign currencies keep changing frequently
causing variation in the value of funds encumbered. Lastly, moving money back and forth by
encumbering and disencumbering in a manual system can lead to ‘errors.

7.6.3 Financial Control

It has been stated earlier that the budget is a tracking device to measure progress, highlight
variations from the plan and show the need for corrective actions to put the operation back on
track. Nobody has the luxury of working without financial restrictions. Nobody gets money
without justifying why it is required. Above all, one should be prepared to face both sudden
windfalls as well as severe cuts in budgets. The budgetary control system is an example of a
system (particularly, the monetary and evaluation techniques of systems analysis) as well as a
widely recognized control function of the management.
Budgetary control is one of the oldest and transitional control techniques used by managers.
Budgetary control is the process of comparing what was planned with what has been accomplished
during the budget period. It is not a past-oriented or post-action control but a future-oriented
control system. It is not a post-mortem type assessment but a continuous examination of the
progress made, comparing it with the cost standards and time lapsed so that the manager is able
to make adjustments in the operation on a day-to-day, week-to-week, or month-to-month basis
for the rest of the period of the budget.
As the budget is only a futuristic plan, how far the actual operations of the library or information
centre have conformed to the budgeted programme will be known only after the completion of
the budget period (i.e., financial year). Knowing post-fact how much deviation or under spending
or ineffective utilization of resources has taken place is like discussing the ways of avoiding
accidents after the accident has occurred. Hence continuously monitoring the operations to
examine how the operations are carried out, whether there are any deviations, the causes for
deviations and ways to rectify deviations within a week or a month will be of immense help.
Though the budget is prepared once in a year, the budgetary control process is a day-to-day,
weak-to-week, fortnight-to-fortnight, month-to-month and quarter-to-quarter activity for a check
of all revenues and expenditures budgeted and stated beforehand.

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