Learning Diary #5: Fiscal Management and Budgeting

Why are these activities done in libraries and information centers?

Essentially, from what I gathered, fiscal management and budgeting in libraries and information centers are crucial because, like any other organization or department, the proper management of funds is central in determining numerous factors such as acquiring of new materials, resources, personnel, programs, and other operations that are vital in keeping the library’s overall flow.

What are the concepts discussed?

Fiscal management is an important function in any organization as it is responsible for obtaining and utilizing the budget to meet a library’s expenditures that are necessary for the library’s operations. A necessity in fiscal management is the budget plan which is a detailed proposal as to how the budget will be allocated, the expected revenues, and the projected expenditures.

How is budgeting done in libraries?

There are several budgeting techniques that an organization may utilize, namely zero-based budgeting, performance-based budgeting, formula-based budgeting, line-item budgeting, and historical budgeting.

Zero-based budgeting allows an organization to start from scratch every year and determines how much should be spent.

Performance-based budgeting considers specific activities or programs in line with the organization’s objectives for allocating the budget.

Formula-based budgeting is specified by professional standards

Line-item budgeting details a specific budget for each category

Historical budgeting begins with the previous year’s leftover budget.

What are the sources of funds in libraries?

A library’s sources of funds may come from library fees, annual allocation from the organization, or endowments and donations. Some of the common budgeting problems a library may have are inflation rates rising or the availability of funds.

Typically, a library allocates budgets for operations, personnel, and materials or collections. Factors that may influence material budget are changes in the composition in the community, changes in collecting activities, the price of materials, and inflation.

When allocating funds, it is important to consider past practices, different publication rates, unit cost and inflation rates, level of demand, and usage of materials. Methods that may be practiced when allocating funds are impulse allocation, allocation on basis of organizational structure, formula-based allocation, historical allocation, format allocation method, and allocation method. Factors that may influence a library’s budget allocation are internal library practices, institutional needs, and external institution requirements.

Auditing is another essential process in fiscal management as it assures that financial records are accurate and that the information presented is accurate. It also serves to monitor budget and materials.

How is it done in the Philippines?

Public libraries in the Philippines face multiple challenges every year, but according to Totanes (2006), lack of funding is the recurring problem most public school libraries face. Although the government usually allocates a good chunk of its annual budget to education, only a tiny fraction of that goes into developing public libraries. This is mainly because the Philippine government does not consider libraries as a priority. Due to this, most public school libraries rely on donations and endowments.

Sources:

Totanes, Vernon R. 2006. “Money and Leadership : A Study of Theses on Public School Libraries Submitted to the University of the Philippines’ Institute of Library and Information Science.” Asia-Pacific Conference on Library & Information Education & Practice. Retrieved from http://eprints.rclis.org/7507/1/Money_and_Leadership.pdf