Monday, November 20, 2017

Budgeting and statistics

Types of budgets 
  • Line-item 
    • Most familiar, money allocated for each item 
  • Lump sum 
  • Formula
    • Usually used in Collection Development 
    • Depends on the number of users 
  • Program 
    • What is it going to cost? 
  • Planning Programming Budget System 
  • ZBB 
    • Zero basis budget 
  • Expenditures are divided into broad categories Advantages
    • Easy to prepare 
    • Easy to understand and justify 
  • Disadvantages
    • Difficult to shift funds between categories
    • Not related to services
    • Assumes what you are doing is essential 
    • Assumes you are cost-effective 
Example of line-item
Salaries $80,000
Fringe benefits $35,000
Books & subs $6,000
Binding $3,500
Office supplies $51,000
Travel $2,000
Total $131,600

Lump sum
  • An amount is allocated to the library and manager decides how it will be spent
  • Advantages
    • More flexible than line-item 
  • Disadvantages 
    • Money allocated first rather than costs determined 
    • Hard to justify 
Formula budget 
  • This is most often used for acquisitions budgets in college and university libraries
  • Standards are set for the number of volumes per capita for students, graduate students, faculty, etc. 

Program budget 
  • Library’s activities are highlighted and the costs given for each activity 
  • Steps 
    • Define program objective
    • Delineate major activities
    • Determine nature and level of resources
    • Develop budget requirements 
    • State the requirements 
  • Advantages
    • Gives estimate of cost of provision of each program or service 
    • Helps to decide whether to continue, modify or drop a program or service 
  • Disadvantages
    • Complex and time consuming 
      • Especially first time around 
    • Hard to estimate actual costs 

Planning programming budget system (PPBS) 
  • Same as program budget, only woven into the total strategic planning process of mission and goals 
  • Advantages 
    • Emphasizes cost of accomplishing goals 
    • Often gives you a unit cost of service
  • Disadvantages 
    • Disadvantages are the same as program budgets 

Example of PPBS 
  • Goal: To manage a resource library collection 
  • Resource required
    • Librarian (1/4 time)
    • Library Technician (1/3 time)
    • Serials budget 
    • Book budget 
    • Library management software maintenance contract
    • Library supplies 
    • Cataloguing utility charges
    • Document Delivery charges 
  • Concerned with future needs
  • Requires justification of each unit of work 
  • Units of work must be assigned levels of importance 
  • Steps 
    • Identification of decision package
    • Ranking of decision packages 

Preparing budgets 
  • May be a set amount and you must work within it 
  • You may only have control over acquisitions and supplies budget 
  • Staff and capital expenditures often outside your responsibility
  • Statistics kept to determine average costs and to predict future demands 

Libraries as cost centres 
  • True profit centre 
    • Profit making segment of the business
    • Library sells its services outside the company and is held accountable for making a profit 
      • Must make money 
    • Library no longer serves the internal information needs for the company 
      • Must provide information to the outside world
      • E.g., ALA’s library for retired persons creating database for aging articles, end up selling these through Dialog, becoming a business venture 
  • Protected profit centre 
    • Primarily services the needs of its own organization 
    • Some services are offered outside the company
    • Sales profits are put back into the library operating budget and offsets portion of costs 
  • Self-sufficient cost centre 
    • Charges back for services 
    • Objective is to recover all or part of operating budget 
    • Library not seen as burden, but part of the cost of other areas doing business 
  • Cost-justified centre 
    • Operates on own budget
    • Requests for services recorded and a value is placed on the services often in terms of savings for the company 
      • e.g. patent search seen as saving $100,000 worth of development of a product which has already been patented.
    • Strictly for special libraries for profiting business 

Some specifics 
  • Find out how you are to handle exchange rate
  • How are taxes handled, especially GST 
    • Differs from libraries, for estimating book costs 
  • Follow same accounting system as parent organization 
  • Keep your own records the way you feel necessary 
More on statistics
  •  Why do we keep them?
    • Record of activities in library 
    • Planning tool to show growth, decline 
      • Peak periods
      • Hire more people 
    • Benchmarking against other libraries or standards 
      • See what comparables are doing 
      • Can you improve? 
What type of statistics should we keep? 
  • National Core Library Statistics Program (NCLSP) 
    • LAC has determined basic statistics which should be kept in all libraries and reported to the National Library 
    • All types of libraries except schools have participated 
Categories of statistics kept by NCLSP
  • Staffing 
  • Expenditures on staff and collections 
  • Collections (books, other, serial) 
  • Services (informational transactions, circulation) 
  • ILL stats (both received and requested) 

Problems with NCLSP 
  • Very broad statistics
  • Very traditionally based 
  • Doesn’t take into account electronic resources 
  • Not useful in special libraries
  • But since stats can no longer keep stats on libraries…. 
1999 report

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