ALA Finance Best Practices Association for Library Service to Children Budget Process

1. ALA Finance Best PracticesAssociation for Library Service to Children Budget Process 2011 Midwinter Meeting Friday, January 7, 2011

2. ALSC’s Finances Background • Simple structure- no chapters or sections • Focus on strategic budget and finance operations • Added Fiscal Officer • Budget Committee includes Fiscal Officer, Vice-President/President, Past-President • Funding decisions based on strategic plan and continuing operations • 11Endowments and Long-Term Investments offset operations and provide opportunities to expand services • Awards, scholarships, continuing education, leadership development

3. Budget Preparation • Continuous cycle • September - November • Staff review budget notes and evaluate projects • Create division budget assumptions • Use past trend data • Look at variances and adjust • Factor in new products or services • December • Prepare budget summary and narrative for Budget Committee

4. Detailed Explanations

5. Budget Summary

6. Budget Narrative

7. Budget Preparation cont’d • Midwinter Meeting • Budget Committee meets twice • Review strategic plan, operations, initiatives • Review endowment performance and activity • Increase funding if necessary • Review requests for funding • Discuss ALA finances • Prepare and present preliminary proposed budget to the ALSC Board

8. Endowments • Operating Fund Reserves (Net Asset Balance) • Four or more months is acceptable • “Remarkable” organizations carry an average reserve of 90% of annual expenses. • Endowment/LTI Transfers • $300,000 earmarked for a new Board Initiatives LTI • Increase fund balances of existing LTIs through transfers • Cover new expenses

9. Budget Preparation cont’d • Midwinter Meeting • Budget Committee meets twice • Review strategic plan, operations, initiatives • Review endowment performance and activity • Increase funding if necessary • Review requests for funding • Discuss ALA finances • Prepare and present preliminary proposed budget to the ALSC Board

10. Budget Preparation cont’d • Board will review and approve preliminary budget for presentation to BARC in spring. • February-June • Executive Director incorporates necessary adjustments as assumptions change or Board action requires • Executive Director presents budget to BARC • Executive Director prepares final preliminary budget • Budget Committee reviews and makes recommendations to Board • Board approves final budget

11. Budget Preparation cont’d • July-August • Executive Director prepares monthly allocations • Professional membership renewals • Non-serial publication production schedule • Conference and event expenses • September • Start of fiscal year

12. Monitoring • Staff monitor and track their project areas • Tracking spreadsheets developed from budget notes • Staff process accounts receivable and payable • Staff provided with ALA chart of accounts and ALSC project numbers

13. Chart of Accounts

14. ALSC’s Project Numbers

15. Monitoring cont’d • Staff monitor and track their project areas • Tracking spreadsheets • Staff process accounts receivable and payable • Staff provided with ALA chart of accounts and ALSC project numbers • Monthly reconciliation by Executive Director • Review FRX reports looking at variances • Look for line items that were not budgeted • Correct any miscodes or errors on monthly basis • Provide monthly summary report with analysis to ALA and Budget Chair

16. Mid-Year Projections • February/March • Begin to formulate mid-year projections • Analyze year-to-date income and expenses against allocations • Look at overall operating fund line items • Drill down to project level line items • Submit projections to ALA and Budget Committee • Continue to monitor and analyze in monthly reports • This helps both the Division and ALA project where they will be at the end of the fiscal year. Allowing for expense reductions, if necessary.

17. Contact • Aimee Strittmatter • astrittmatter@ala.org • 312-280-2162