Financial Management of Libraries and Information Centers
(Currently GSLIS 590FM)
Fall, 2010
Course Instructor: Robert H. Burger, B.A, M.A., M.L.S., Certificate of Advanced Studies
in Librarianship, Ph.D., CPA
Introduction
The course is designed to familiarize the student with the basic principles of library
financial administration, including budgeting and planning within the mission and goals
of the organization. It provides an orientation to the variety of financial management
techniques appropriate for libraries and information centers, with an emphasis on sources
for obtaining financial support, controlling expenditures, creating and controlling budgets,
financial decision making and exploring specific financial and budgetary problems for
the major operational areas of libraries – public services, technical services, information
technology and facilities.
Learning Outcomes
Upon completion of the course the student is expected to be able to explain basic
accounting operations for libraries, describe the basic elements of library financial
statements and budgets, develop program budgets, conduct operational analysis for
budget forecasting, develop capital budgets, and conduct cost/benefit analyses. Topics
include basic accounting principles and operations, analysis of financial statements and
budgets, detailed examination of the elements of financial support and expenditures for
libraries, different presentations of budget information (line item, program, and capital
budgets), managerial accounting (cost benefit analysis, performance measures and
operations indicators), financial aspects of capital projects, and fiduciary responsibilities
of the library director, trustees, and others having responsibilities for financial
administration in the library. The use of Microsoft Excel is assumed and will be used at a
level appropriate for someone who has basic knowledge of Microsoft Excel.
Presentation methods
Individual sessions or parts of a session may be conducted as a lecture, as a seminar
focused around a case study or problem, or as a student presentation.
Assigned Texts
1
Ruppel, Warren. Governmental Accounting Made Easy, 2nd Edition. Hoboken, NJ : John
Wiley & Sons, 2010. Note: Ruppel can be dense and unexciting in places, even for an
avid CPA. The instructor will indicate when a cursory reading versus an in-depth reading
for Ruppel will be appropriate.
Hallam, Arlita W. and Teresa R. Dalston Managing Budgets and Finances: A How-to-doit Manual for Librarians and Information Professionals. New York, Neal-Schuman
Publishers, Inc. 2005. (How-to-do-it Manual for Librarians, number 138)
Other readings as assigned throughout the semester.
Assignments
There will be three major graded assignments, corresponding to the three major sections
of the course (financial statements of libraries and budgets and budgeting, revenues and
expenditures (focusing on specific sections within the library), and cost accounting.
There will be other non-graded assignments, designed to enable the student to master the
contents of each section. In addition, there will be a final project, the purpose of which is
to summarize and consolidate the knowledge you have gained in the course.
Final Project
See separate document available on course website.
Grading
Grading will be based on a combination of the three major assignments (20 points each,
total 60 points), the final project (20 points) and class participation (20 points, based on
in-class participation and completion of non-graded assignments).
Schedule
Prior to session one, it would be helpful if you read Ruppel, chapter one and chapter 2 (p.
19-29 only), the material of which will be covered during session 1 class.
Session 1
Topics
Purpose and structure of the course, expected learning outcomes, suggestions on how to
achieve the desired learning outcomes, and evaluation.
Social and economic context of library financial management, economics of information
Financial reporting and standards boards
2
Readings for Session 1
Ruppel, ch. 1 and ch. 2 (p. 19-29 only)
Assignment for session 2:
Calculating your net worth and figuring out a budget (see link on website)
Session 2
Topics
Basic accounting for NPOs, Chart of accounts (major accounts and structure), Double
entry bookkeeping and accounting processes – the journal, ledger, etc. How a budget and
cost analysis produce resolution only as good as chart of accounts allows them to be,
Major Accounting standards: GASB, GAAP, FASB
Readings for Session 2
Ruppel, ch. 1, ch. 2 (entire), ch. 3
Daubert, Madeline J. “Fundamentals of Accounting” in Financial Management for Small
and Medium-sized Libraries, Chicago, ALA, 1993. pp. 36-52. (Available as pdf on
course website.)
Assignment Due
TBA
Session 3
Topics
Internal control, auditing, records management, financial ratios
Readings for Session 3
Gross, Malvern, John H. McCarthy, Nancy E. Shelmon. Financial and Accounting
Guide for Not-for Profit Organizations chapter 23 (Internal Control) (pdf)
Ruppel, ch. 2 (entire), ch. 3, ch. 4
Assignment Due
TBA
3
Session 4
Topics
The Budget and its relation to the major financial statements (Balance Sheet and Income
Statement)
Creating a Budget
Types of Budgets
Budgetary Process
Budget variances with actual revenue and expenditure
National Reporting of Revenues, Expenditures and other data
Readings for Sessions 4
Hallam and Dalston, Managing Budgets and Finances, pp. 3-68 (ch. 1-3) Read ch. 3 with
a jaundiced eye. It is often misleading, unclear, and incorrect.
Gross, Malvern et al. chapter 20 (Budgeting)
Linn, Mott. “Budget Systems used in allocating resources to libraries”
Assignment Due
TBA
Session 5
Topics
Revenue and Support of Library Operations in relation to budgeting
Primary revenue support
Time Value of Money
Annuity concepts
Tax revenues, tax rates, tax base
Readings for Session 5
Hallam and Dalston, chapters 8 and 9
Ruppel, chapters 5 and 6
Daubert, p. 108-124 Revenues and Sources of Support
Assignment Due
Major Assignment no. 1 due by 8:00 a.m. of the morning of Session 5
Session 6
4
Topics
Visiting Lecturer First Hour
Revenue and Support of Library Operations in relation to budgeting II
Grants and Grant financial reporting
Endowments
Entrepreneurial activities
Loans and Bonds
Trusts, Wills, Gifts
Intergovernmental transfers
Minor sources of revenue
Readings for Session 6 (Yes, same as for Session 5)
Hallam and Dalston, chapters 8 and 9
Ruppel, chapters 5 and 6
Daubert, p. 108-124
Assignment Due
Final Project Section I draft due by the end of the week after Session 6 (i.e. Friday after
Session 6 concludes)
Session 7
Topics
Expenditures I
Administration of expenditures
Contracts
Personnel (wages, salaries)
benefits
salary administration
employment contracts
hourly employees and minimum wage
work study arrangements
sick and vacation leave
travel
separation payouts
time sheets and internal control
5
Readings for Session 7
Ruppel, chapter 8
NYT article on pensions
Assignment Due
TBA
Session 8
Topics
Expenditures II
Purchase orders (collections, equipment)
Contracts
Purchasing regulations
Encumbrances and payment
Invoice processing
Readings for Session 8
Trends and Developments in Managing Acquisitions Budgets
Managing the Acquisitions Budget
Plain English Collections Budgets
Negotiations with Library Materials Vendors
Good Negotiations with Vendor Contracts
Comparing Consortial and Differential Pricing Models
Assignment Due
TBA
Session 9
Topics
Expenditures III
Equipment and depreciation
Inventory Control
Information Technology
Facilities
Capital Budgets
Readings for Session 9
6
Ruppel, chapter 7
Hallam, chapters 5, 6, and 7
Hidden Costs of IT Systems
After Costs of Library Construction
Measure by Measure: Assessing Viability of the Physical Library
Understanding Project Costs and Building Costs
Assignment Due
TBA
Session 10
Topics
Managerial accounting
Responsibility Centered Management
Activity Based Costing
Cost centers and managerial cost control
Life Cycle Costing
Risk Management
Readings for Session 10
Smith, G. Stevenson, Cost and Cost Concepts
Ellis-Newman. Activity Based Costing in Library Trends, Winter 2003
Assignment Due
Major assignment no. 2 due by 8:00 a.m. of the morning of Session 10
Final Project Section I draft due by the end of the week after Session 11 (i.e. Friday after
Session 11 concludes)
Session 11
Topics
Managerial accounting
Cost Benefit Analysis
Return on Investment
Break Even Analysis
Differential Cost Analysis
Cost estimation with probabilities and sensitivity analysis
Cost estimation with learning curve
Readings for Session 11
7
Holt and Elliot Measuring Outcomes: Cost Benefit Analysis in Library Trends, Winter
2003
Assignment Due
TBA
Session 12
Topics
Leasing
Outsourcing
Introduction to Descriptive Statistics
Readings for Session 12
Hallam and Dalston, ch. 4
New Leasing Rules Ruffle Leasing Market
Outsourcing Library Technical Services
Assignment Due
TBA
Session 13
Topics
Forecasting and estimating
Statistics
Sampling
Readings for Session 13
Hiller, Steve and Jim Self “From measurement to management: using data wisely for
planning and decision making” Library Trends, 2004:53:1: pp. 129-155.
Bookstein, A. How to Sample Badly
Assignment Due
TBA
THANKSGIVING BREAK
8
Session 14
Topics
Develop performance measures and operations indicators
Data driven decision making
Evaluation
Long Term Strategic and Financial Planning
Change Management and the budget
Readings for Session 14
Ruppel, chapter 10
Assignment Due
Major Assignment no. 3 due on morning of Session 14
Session 15
Topics
Marketing, Advocacy, Reporting and Persuasion
Readings Due this session
Marketing, a customer focused approach
ALA Advocacy tool kits, etc.
Assignment Due today
draft of section 3 of final project
Assignment Due one week after final class
Final project
9