Page 108 - DLIS406_ACADEMIC_LIBRARY_SYSTEM

Unit 11: Budgets

Introduction Notes

A Budget is a plan that outlines an organization’s financial and operational goals. So a budget
may be thought of as an action plan; planning a budget helps a business allocate resources,
evaluate performance, and formulate plans.
While planning a budget can occur at any time, for many businesses, planning a budget is an
annual task, where the past year’s budget is reviewed and budget projections are made for the
next three or even five years. The basic process of planning a budget involves listing the
business’s fixed and variable costs on a monthly basis and then deciding on an allocation of
funds to reflect the business’s goals. Businesses often use special types of budgets to assess
specific areas of operation. A cash flow budget, for instance, projects your business’s cash
inflows and outflows over a certain period of time. Its main use is to predict your business’s
ability to take in more cash than it pays out. And if you’re planning on starting a business,
planning a budget plays an important role in determining your start up and operating costs.
The Financial Plan Section of the Business Plan provides information on calculating your start
up and operating expenses.

11.1 Developing the Library Budget

This administrative essential covers:
• The process of budget development
• Sources of funding
• Donations and Grants

• Desirable budget characteristics
• Terms and distinctions.

The development and execution of the library budget is one of the library director’s most
important tasks. The process should be integrated with the planning and evaluation of library
services. Once reviewed and approved by the library board, the budget serves as a roadmap
for the delivery of library services in the subsequent year. This chapter will outline a typical
procedure for creating and approving the library budget.
Although library boards are vested “exclusive control of the expenditure of all moneys collected,
donated or appropriated for the library fund,” the municipality is empowered to levy a tax or
appropriate funds to operate a public library. Consequently, the library fund is included in the
budget of the municipal body that established the library. While there is no statutory requirement
that libraries develop budget requests to submit to their governing authorities, most municipalities
require them, and a carefully considered budget is one of the responsibilities you have in your
role as a steward of public funds. In order to operate effectively and maximize your ability to
obtain appropriate local funds, you and your board should create and follow a budget each
year.
By going through a formal budget process, you, your library board, and your municipality
establish a fiscal foundation for library operations. The budget process provides you with an
opportunity to request necessary funding for established services, as well as supplemental
support to address increased use or provide new services. The budget also creates a way to
track required revenues and reportable expenditures. Finally, since the municipality is required
to hold a public hearing, it allows public input on municipal services, including the library.

LOVELY PROFESSIONAL UNIVERSITY 103