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Financial Reporting: Texas Public Libraries Annual Report Sections 3, 4, & 5

2018 February 28
by Valicia Greenwood

The Texas Public Libraries Annual Report must be submitted between now and April 30, 2018.  This is the next in a series that provides explanations for some of the questions that we receive.

For many librarians the most difficult part of the Annual Report is the financial reporting  It can take time and experience to become proficient in financial management in the library.  One resource we offer is the financial management section of last year’s Leadership and Management workshop, now available in an online course. We hope this blog may help you answer the financial questions in Sections 3, 4 and 5 on the Annual Report.

In order to complete these sections accurately, begin with some background information.

  • First, answer these questions about the library:
    • How is the library legally established?
    • What is the library’s fiscal year?
    • How is capital determined?

This report relies on local accounting practice, so if you don’t know the answer to the third question, then have a conversation with the Finance Department within the library’s legal governing authority.  Non-profit libraries and library districts rely on their local accountant for this information.

  • Second, only funds that come through the library’s budget or accounts should be reported. These should be actual expenditures for the library, not budgeted amounts. Take some time to research or you can track expenditures throughout the year.
  • Third, determine which sources of funding are local. “Local” refers to the library’s home county and/or any cities or counties outside of that area that provide funding to the library. This can be local government, donations or gifts from patrons, even a grant from the local retailer down the street – not the corporate office out of town.

All library expenditures are reported in Section 3.  Operating expenditures are detailed in question 3.1-3.11; capital expenditures are reported in 3.12. We strongly encourage libraries to meet with their local financial staff to determine where a cost falls.

These lists are not comprehensive but should provide a general idea of which reporting category to use:

  • Library operating expenditures include those current and recurrent costs necessary to support library services. This includes staff salaries, wages and benefits; all collection material expenditures; costs such as cleaning and office supplies, bank charges, program supplies and contracts, equipment leasing and repair contracts, consulting and legal fees, Internet fees, and TexShare fees.
  • Capital expenditures follow local accounting practice, and covers one-time-only, or extraordinary expenditures. This includes large items, such as new buildings or additions, automation systems, new vehicles, and initial book stock for a new building (opening day collection).

Once Section 3 expenditures have been reported, you can complete the revenue sources in Section 5.  Here is a breakdown of expenditures by funding sources:

If the funds came from: Question # if used for operating expenditures Question # if used for capital expenditures
City 5.1 5.10
County 5.2 5.11
School District 5.3 5.12
State funding (grants)
Include Family Place in operating
5.5 5.13
Federal funding (grants)
Include TSLAC grants in operating and capital
5.6 5.14
Foundation/corporate funding (grants) 5.7 5.15
Other local sources (donations, fees, etc.) 5.8 5.16

Section 4: Local Financial Effort, is one of the least understood, yet most important, sections of this report for libraries seeking accreditation.  Each of these questions is tied to one or more accreditation criteria, so it is essential to report accurately in this section.

While the three questions are related, there are no sums or calculations in this section.  The largest amount is in Question 4.2.  Local government expenditures (4.3) are a large portion of all local operating expenditures, but other donations or fees are included in that sum also.  Local collection expenditures (4.1) are frequently funded by both local government funds and other local funds.

Remember Venn diagrams from math class?  We can visualize this section using one. For a library that has only local sources of funding, the diagram would look like this:

We have created a set of slides which reviews this information, called, Understanding Financial Reporting in the Texas Public Libraries Annual Report.

You can always get more assistance or information by contacting Library Statistics Specialist Valicia Greenwood (vgreenwood@tsl.texas.gov) or Program Coordinator Stacey Malek (smalek@tsl.texas.gov), or toll free in Texas, 800/252-9386.

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One Response leave one →
  1. Lori Grumet permalink
    February 28, 2018

    the link to the document “Understanding Financial Reporting in the Texas Public Libraries Annual Report” is broken.

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