Kansas laws related to budgeting

Kansas library laws are in Chapter 12, Article 1201+ of Kansas Statutes.
<http://tinyurl.com/bocyket>

K.S.A 12-1220 Establishing libraries
<http://tinyurl.com/bpkastk>

• “The [city council] governing body shall forthwith establish such library and is hereby authorized to and shall annually levy a tax for the maintenance of such library in such sum as the library board shall determine within the limitation fixed by law ….” 


• Librarians and several Kansas Attorney Generals interpret this to mean the library board, not the city council, determines how much money needs to be raised to support the library’s services. This interpretation is often not understood by mayors and city councils, the Kansas Attorney General has supported this opinion several times.


• A.G.O. 82-193: “Given the explicit statutory provision, we have no hesitancy in concluding that the amount of money to be raised through the imposition of a property tax to maintain a library established under the provisions of K.S.A. 12-1218 et. seq., is to be determined by the board of directors of the library, not the governing body of the municipality."

K.S.A. 12-1226 Treasurer, bonding and duties.
<http://tinyurl.com/c7n9bmb>

"... the treasurer of the library board shall give bond, in an amount fixed by the board and approved by the governing body of the municipality, for the safekeeping and due disbursement of all funds that may come into the treasurer's hands. The bonds shall be filed with the clerk of the municipality. Except where otherwise provided by law, the treasurer of the municipality shall pay over to the treasurer of the library board all funds collected for the maintenance of the library, and the treasurer of the library board shall pay out the funds on orders of the board signed by the secretary and chairperson thereof. Such treasurer shall keep an accurate record of all moneys received and disbursed thereby and make a report thereof to the library board monthly, or as often as the board requires."

K.S.A. 12-1258 Capital improvement fund
<http://tinyurl.com/czfg2hv>

• Libraries can transfer up to 10% of their general operating fund money into a savings account called “Capital Improvement Fund.” State law requires government bodies to spend their tax money rather than accumulating them in the bank. This statute allows libraries to make a small exception for the purpose of improving the library.


• This money is for “improving, furnishing, equipping, remodeling or making additions to the library.”


• Money from the capital improvement fund can be transferred back to the general operating fund.


• The amount in this fund and amounts expended from this fund must be shown in the library budget.

K.S.A. 12-1226 Signing checks
<http://tinyurl.com/c7n9bmb>

• “... the treasurer of the library board shall pay out the funds on orders of the board signed by the secretary and chairperson thereof.”


• Following this law, the new 2012 Standards for Public Libraries claims, “All checks issued by library require two signatures – The President and the Secretary of the library board”. I recommend following this standard. Treasurers can be a third signature if desired.

K.S.A. 10-1113 Cash Basis Law
K.S.A. 10-1121 Violation of Cash Basis Law
<http://tinyurl.com/cgpgo2w>
<http://tinyurl.com/cmbucau>

• K.S.A. 10-1113: Librarians and boards can't acquire indebtedness by spending or promising to spend more tax money than is in the bank.


• K.S.A. 10-1121: Violation of this act is cause for removal from office and fined from $10 to $1,000

2012 Standards for Kansas Public Libraries related to budgeting

2. The library board operates under appropriate budget and financial procedures: The treasurer of the board is bonded as required by K.S.A. 12-1226.

• Financial reports are provided to the board at each board meeting.


• Statutory requirements for auditing of library accounts are followed.


• Appropriate procedures for internal financial controls are implemented. Such procedures require that at least two persons examine and approve payments from library funds.

6. Library financial records are maintained on file at the library and are available in accord with Kansas Open Records Act requirements.

16. The library board annually reviews the types of funds used by the library before beginning budget preparation. These include the general tax fund, grants, donations, endowments, and various types of miscellaneous income. Libraries could also utilize a separate employee benefit tax fund, and may create and use a legally established capital improvement fund. Detailed information and sample resolution wording for creation of an Employee Benefit Fund can be found at http://is.gd/WIHU69 . Detailed information and a sample resolution for creation of a Capital Improvement Fund can be found at http://is.gd/yaEZAY.

17. The library director develops and presents a budget to the library board for discussion and approval. An adequately funded public library meets the following funding levels:

• Salaries and Benefits -- minimum 65% of total operating expenditures from all income sources (excluding capital fund expenditures).


• Materials and Resources target -- 12% of total operating expenditures from all income sources (excluding capital fund expenditures).


• Technology -- Variable


• Library Operations -- Variable

18. The library board presents the approved budget to the local governing body. This budget should be reflected on the municipal budgets as separate special funds rather than as a line item in the municipal budget. Municipal governments are charged with funding operational budgets created and recommended by local library boards.

19. The library board and library director review all portions of the local official budget related to the library, and copies are retained on file at the library.

20. All checks issued by the library require two signatures – the President and the Secretary of the library board. Any additional signatures are optional. The statutory basis for this is K.S.A. 10-803. More detailed information on facsimile signatures can be found at http://is.gd/QT1AJI .

21. The library board treasurer and the library director develop a monthly financial statement for the library board. This monthly financial statement and all financial motions are included in the library board minutes. The monthly financial statement includes:

• a list of current monthly expenditures


• year-to-date expenditure-to-budget comparison


• a list of current monthly income


• year-to-date income-to-budget comparison

22. The library board and library director comply with the audit requirements for their size of library budget. K.S.A. 75-1122 requires a library to have an audit performed by a licensed municipal accountant or certified public accountant when library "aggregate gross receipts" are in excess of $275,000 or general obligation or revenue bonds are in excess of $275,000. This statute applies to public libraries in cities of the first and second class and some third class cities, townships and library districts.

Budgeting

• Kansas laws related to city and township library budgeting


• 2012 Standards for Kansas Public Libraries related to budgeting


• Budget issues for trustees by the State Library and the Kansas Library Trustee Association


• 9-minute video introducing budgeting basics. The good advice begins 3.5 minutes into the video.


• Budget cycle


• Budget resolution


• GAAP waiver


• Budget reports to city council

See also Funding

Budget-GAAP Waiver

A GAAP Waiver should be passed every year at the same time the library would pass a budget resolution.

GAAP is an acronym meaning "generally accepted accounting principles." A GAAP Waiver is a resolution passed by the library board excluding library accountants from following K.S.A. 75-1120a(c)(1) requirement that all government organizations use Generally Accepted Accounting Principles (GAAP). The reason libraries do not use GAAP is because libraries use cash basis accounting and GAAP does not handle well the requirements of the cash basis law. The library board passes this resolution each year and the resolution is then kept on file in the library.

The sample resolution below is from http://da.ks.gov/ar/muniserv/GaapWaiverProcedures.htm


WHEREAS the Trustees of __________________ Library has determined that the financial statements and financial reports for the year ended _______________ to be prepared in conformity with the requirements of K.S.A. 75-1120a(a) are not relevant to the requirements of the cash basis and budget laws of this state and are of no significant value to the Trustees of ____________ Library and

WHEREAS there are no revenue bond ordinances or resolutions or other ordinances or resolutions of the municipality which require financial statements and financial reports to be prepared in conformity with K.S.A. 75-1120a(a) for the year ended _________.

NOW, THEREFORE BE IT RESOLVED, by the Trustees of ____________ Library in regular meeting duly assembled this _________ day of _____________, 20_____ that the trustees of __________________ Library waives the requirements of K.S.A. 75-1120a(a) as they apply to the Trustees of _____________________ Library for the year ended __________________.

BE IT FURTHER RESOLVED that the library board shall cause the financial statements and financial reports of the _____________ Library to be prepared on the basis of cash receipts and disbursements as adjusted to show compliance with the cash basis and budget laws of this State.

Recommended Policies

The 2012 Kansas Public Library Standards recommends every library have policies on the following.

Additional policies your library's policies may need.

List of recommended policies from 2012 Kansas Public Library Standards	Examples
Appropriate Use of Online Services	Small Public Library Example http://tinyurl.com/o8hc29o Lincoln Public Library http://tinyurl.com/bjy8mc2 Kenton County Public Library http://tinyurl.com/a8bzou6 Pacific Grove Public Library http://tinyurl.com/bza5ztg Madison Public Library http://tinyurl.com/al6evfa
Budget and Finance Kansas laws about budgeting	Jefferson County Library http://tinyurl.com/by8gpc2 Ann Arbor District Library http://tinyurl.com/b6tm4md Westchester Public Library http://tinyurl.com/bcsj6wv Daniel Boone Library http://tinyurl.com/awmusd4
Building/ Meeting Room Use	Basehor Community Library http://tinyurl.com/b2gb4je Morrill Public Library http://tinyurl.com/dyj873q Derby Public Library http://bitly.com/ShVWFa Newton Public Library http://tinyurl.com/a7xww8k
Capital Improvements	Liberal Memorial Library http://tinyurl.com/aw757xe
Confidentiality of Library Records Patron Privacy	Kansas City Public Library http://tinyurl.com/bc8xh8l Topeka Shawnee County Public Library http://tinyurl.com/am5o3rz Overbrook Public Library http://tinyurl.com/aqg45jt (Scroll down to confidentiality) Newton Public Library http://tinyurl.com/c5qbdjw (Scroll down to confidentiality)
Continuing Education	This is a personnel policy explaining how the library encourages and supports library staff attending continuing education events, e.g., library pays for travel, meals, registration, and staff to keep the library open while the library staff attends events.
Emergency Preparedness/Disaster Recovery	Disaster plans http://cklsdisasterrecovery.blogspot.com/
Equipment Use	Small Public Library Example http://tinyurl.com/nk78vcr Spirit Lake Public Library http://tinyurl.com/ayyu94k Winneconne Public Library http://tinyurl.com/9wt7o5y Jervis Library http://tinyurl.com/b4x92wh
Gifts and donations	Keller Public Library http://tinyurl.com/b329yxh (Scroll down) Osage City Public Library http://tinyurl.com/bjekn4z (Don’t put donated or memorial books in a stand alone collection. They are not likely to circulate well. Interfile donations and gifts on the shelf where they will be found and used.)
Intellectual Freedom Important statements about Intellectual Freedom	North Scituate Public Library http://tinyurl.com/a7qng8h St. Joseph Public Library http://tinyurl.com/bcjvvel
Patron Behavior	Small Public Library Policy http://tinyurl.com/on3wyrz Independence Public Library http://tinyurl.com/cwgtcfp Fowler Library http://tinyurl.com/bbe57q3 Park City Public Library http://tinyurl.com/ayr2lb5
Personnel	Small Public Library Example http://tinyurl.com/q2dxsrx Iola Public Library http://tinyurl.com/clutlsx
Public Services	Small Public Library Example http://tinyurl.com/nclcfgt Girard Public Library http://tinyurl.com/ba3jouc Beck Bookman (Holton) Library http://tinyurl.com/b6nhdu9 Liberal Memorial Library http://tinyurl.com/d4rxxq7 Fowler Public Library http://tinyurl.com/c4yn7l9
Selection/Collection Management	Small Public Library Example http://tinyurl.com/pogut9r Aurora Public Library http://tinyurl.com/arwo5ub Franklin Public Library http://tinyurl.com/b4fvzyr Somerville Public Library http://tinyurl.com/apxy5fj Hillsboro Public Library http://tinyurl.com/asuxkc7 Wichita Public Library http://tinyurl.com/aed5qrc
Surplus Property	Lincoln County Libraries http://tinyurl.com/ba37og4 Oak Park Public Library http://tinyurl.com/ac7we4s Lee Public Library http://tinyurl.com/b7psfot