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 

Line-item 

• 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 

ZBB

• 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 rates 
• 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 

https://web.archive.org/web/20050519081926/http://www.collectionscanada.ca/obj/r3/f2/02-e.pdf