MBA for Librarian Series

Budget and finance

Presented by

• American Library Association – Allied Professional Association (ALA-APA)

• John Sandstrom– MLS, University of Oklahoma, 1987– MPA, University of Texas – El Paso, 2010– Assistant Profession, College Faculty and

Acquisitions Librarian, New Mexico State University

What are we here for?

• To share 25 years experience as a budget officer for various types of libraries and projects

• To share various terminology, tips, tricks, and techniques of budget and finance processes.

• To share your questions and knowledge with the rest of the group

Disclamer

• As nice as it would be, attendance at this presentation does not result in any credit towards a Masters of Business Administration

• The material presented today represents my experience over the past 24 years. Every organization has its own budgeting policies and procedures. In every case, if you have questions they are the authoritative source of answers

Tip #1

Don’t be afraid to ask questions!

Most budget managers are glad to explain how things work in your organization. The more you know, the easier their job is.

What is Budget and Finance?

• A budget is a plan for the coordination of resources and expenditures

• Finance is the science or study of the management of funds– From the Mirriam-Webster Dictionary Online

(www.meriam-webster.com/dictionary)

Tip #2

Ask for training.

Many organizations have Tuition assistance or staff training and development programs the can be used for more formal training regarding budgeting and finance. They may also offer training in how they do budgets.

Methods of budgeting

• Lump Sum• Line item• Program• Performance/Function• Zero-based

Tip #3

Try a different type of budget method.

Even if you don’t use Program or Performance/Function budgeting methods, they can be useful tools to determine the cost/benefit of various programs.

Types of Budgets

• Operating– Personnel– Materials– Overhead– Building

• Capital– Construction– Collection

Tip #4

Ask Ask Ask

If you don’t understand what is being charged to a particular budget, ask until you do.

Types of Revenue

• General Fund• Endowment• Grant• Private• Gift• Bond• Capital

Tip #5

Check the rules.

Some types of revenue have different rules for how they can be allocated, tracked, etc. Make sure you check how the funds can be spent and if there are any “strings” attached.

Types of Expenses

• Ongoing or reoccurring– Personnel– Serials– Building overhead

• One time– Books– Capital– Fleet

Tip #6

Check the rules again!

The rules of your organization may change by what type of expense you are working with. Make sure to ask.

Building a Budget

• Find out what was done last year.• Find out what the assumptions are for next

year• Review ancillary documents like strategic

plans, mission statements, and goals and objectives.

Tip #7

Have clear institutional goals.

Without knowing where you want to go, it is hard to get there and harder to justify the expense.

Building a Budget (cont.)

• Be Flexible• Be pragmatic• Double check all the figures• Get someone else to check them again

Tip #8

Leave yourself some wiggle room

While budgeting to the penny is admired in some quarters, it is always good to budget in a cushion to allow for unexpected circumstances

Cutting the budget – Part 1

• As part of building the budget– Review strategic plan and mission statements– Get a hard figure for how much needs to be cut– Find out what areas, if any, are protected– Look at impacts

Tip #9

Remember the benefits multiplier when looking at personnel costs

For every personnel line there are two costs, the salary/wage and the benefits. Cost of benefits is usually a percentage of budgeted salary or wage. Make sure to remember the multiplier when you figure salary savings.

Cutting budgets – Part 2

• Mid-Year cuts– Much harder than planned cuts– First question is always, “Where is there money

left?”– Ask what is or isn’t on the table– Balance low impact vs high impact cuts

Tip 10

Ask about the politics. When cutting budgets the politics can be critical.

Summary

• The 10 Tips– Don’t be afraid to ask questions!– Ask for training. – Try a different type of budget method.– Ask Ask Ask– Check the rules.– Check the rules again!– Have clear institutional goals. – Leave yourself some wiggle room– Remember the benefits multiplier when looking at personnel

costs– Ask about the politics.