PHASE ONE – Adams County Line-Item Budget
Start by reading pages 281-327 to get a sense of what needs to be accomplished. Next, read the ‘Overview of Exercise’ on page 286. Whenever needed, use standard rounding principles (0.5 and above round up to the next whole number).
Step One is self-explanatory.
Step Two asks you to construct a line-item budget for the new Adams County Library. I have started the process for you by consolidating the line-item budgets of the 11 units (Forms 79a through 79k) into one budget. Go to Modules, scroll down to Budget Files and click on Adams County Library Consolidated Budget for the draft. It is a draft because I have merely consolidated the budgets for the 11 separate units into one Excel spreadsheet without following the Budget Director’s directives (Form 78). You will have to complete that task by carefully following each directive on Form 78. You might notice that the Total County Budget (page 299 of Dressang’s book) differs from the budget I have consolidated. Use the budget total I have provided.
All 11 different library branches share one consolidated budget even though they are in different physical locations. They are all part of one library–the Adams County Library. Therefore, when making changes to the budget in terms of directives, remember that you are applying those directives to the Adams County Library budget.
In practice, there is more than one right answer for this part of the exercise. For this exercise, we will pretend that elected officials will decide purely on the technical merits of the budget requests. Hence, for the sake of simplicity, we will follow the exercise directives with some modifications. For instance, complete directives 4 through 6 as explained below.
Directive number 4 asks you to standardize salaries at the highest levels for all job classifications. Standardize as follows:
Salary Standardization Table
Full-time
Salary ($)
Part-time
Per hour ($)
Branch librarians
55,000
Branch librarians*
27.00
Reference librarians
51,000
Reference librarians
24.50
Assistant librarians
46,650
Assistant librarians
22.00
Administrative assistant
34,000
Circulation clerk
10.00
Circulation clerk
24,960
Maintenance worker
11.00
Computer technician
30,000
Computer technician
12.00
Secretary
22,880
Page
8.00
Maintenance worker
22,880
Page
16,640
*The Town of Mt. Tom has a part-time Head Librarian position that will be re-designated as part-time Branch librarian as part of Directive 5 (see below).
Use the table above to standardize all salaries at the highest levels currently paid by any of the newly consolidated units. For example, since the City of Waynesfield’s Reference librarian salary is $51,000 and that is the highest salary of all newly consolidated units, all village and township Reference librarians’ salaries will have to be adjusted to $51,000.
Directive number 5 asks you to re-designate all village and township Head Librarians (full- or part-time) as Branch Librarians. Note that directive 5 only applies to village and township Head Librarians—it doesn’t apply to the City of Waynesfield Head Librarian.
Directive 6 asks you to create a Director of County libraries position and to budget $90,000 for the new position.
Work on directive 2 after completing directives 4 and 5 above. Cut 3 percent across the board on all expenditure categories (all line items). Disregard directive 3, which specifies how to cut full-time and part-time library employee positions; instead, just cut 3 percent across all line items.
Step Three—Your Adams County Line-Item budget is finished. Label this tab of your Excel (or Numbers) spreadsheet as Line-Item Budget. You will add tabs for Performance Budget and Program Budget to your workbook and then submit the entire workbook as your Budget Exercise 2 assignment.
PHASE TWO – Performance and Program Budget
Read the ‘Overview of Exercise’ on page 311. For this phase of the exercise, you will:
1. identify performance indicators for the Adams County Library—that is, you will propose a performance budget; and
2. propose a program budget for the ‘Information and Library Services’ program of the Adams County Library System.
PERFORMANCE BUDGET
Step One—Even a cursory review of Form 82 should reveal that except for ‘personal services’ the activities shown on the form are appropriate activities for the Adams County Library. Note that personal services and related costs are embedded in the other activities shown on Form 82.
Step Two—Using Form 84 as a format and the data provided on form 83 and your line-item budget data (see Phase One, Step Three), recast your FY1 budget into a performance format. This simply involves aggregating line-item costs into the performance activities shown on Form 82 (see p. 306 and Table 17.1).
Make sure to carefully read pages 305 through 307. You will need to determine specific measures of performance for each activity and to calculate the unit costs for each activity (see p. 307 and Table 17.2). For example, under General Administration, you could show the cost per patron. The number of patrons for FY1 and FY2 is shown on Form 83. The essential purpose of performance budgets is to compare logically developed activities and unit costs across two or more years to assess how efficiently an organization is performing on those activities. Because we are working from a standardized budget and the activities are all the same, the budget allocations will be the same.
Form 83 is very important to help you recast your line-item budget into a performance budget (FY1 on Form 82), to propose an FY2 performance budget (Form 82), and to propose a program budget for the ‘Information and Library Services’ program of the County library. The last bullet on Form 83 states, “It may be assumed that maintenance, supply, and utility costs are borne equally by all library activities in proportion to their share of total staff costs (as measured by salaries/wages1 of all full- and part-time employees). To do this: 1) add all salaries for the Adams County Library. You will use this number to determine proportions; 2) add all maintenance, supply, and utility costs. Use these figures to match the salary proportions that are used for each activity with the costs of maintenance, supply, and utility.
For example, if total salaries were equal to $100,000 and the general administration activity requires three staff members that together have an added salary of $30,000. This means that the general administration’s proportion of their share of staff cost is 30 percent (30,000 divided by 100,000 and multiplied by 100). Then, let’s say that total maintenance, supply, and utility costs are $10,000; this would mean that $3,000 would be allotted to the library activity of ‘General Administration’ in your performance budget (30% of $10,000 equals $3,000). In preparing the performance budget you will have to make some calculations as explained above.
Step Three—Complete Form 84 by preparing budget projections for FY2. Carefully follow the instructions in Step Three. However, instead of a 3 percent increase for salaries, supply, utility, and maintenance, use a 4 percent increase. Label this tab of your workbook as Performance Budget.
Disregard Steps Four to Six on page 312 and instead follow the instructions below.
1 For the sake of simplicity, the exercise doesn’t include costs for employee benefits. Just add compensation for each position as appropriate.
PROGRAM BUDGET
Step One—Start by reading ‘Budgeting for Purpose’ on page 308. The Adams County Library program budget is made up of several programs, subprograms, elements, and sub-elements, but for this exercise, you will only focus on the ‘Information and Library Services’ program, and subprograms, shown on Form PB.1 below. Your initial task is to draft a description of the program and subprograms and their respective goals (see Figure 17.1, p. 309 for an example).
Form PB.1 – Program Budget Structure: Information and Library Services
PROGRAM:
DESCRIPTION:
4.0 Information and Library Services
(This program provides a wide range of information and library services to the people in County. The goal of this program is to stimulate individual learning and advance society as a whole.)
ADMINISTRATIVE UNIT:
Adams County Library
SUBPROGRAM:
4.1 Resource Availability
(This subprogram provides for making available information bearing materials in various formats and increase the database/volumes of publications over time. The goal of this subprogram is to meet the information needs of its users.)
SUBPROGRAM:
4.2 Open Study and Leisure
(This subprogram provides for availability of a large open study space along with means for relaxation like refreshment zone/Cafe Area. The goal of this subprogram is to provide a comfortable environment for those spending a lot of time in library.)
SUBPROGRAM:
4.3 General and Reference Inquiry
(This subprogram provides for general information questions and question handling(reference) by using specialized resources such as bibliographies, union list of periodicals etc. The goal of this subprogram is to provide quality information through personalized service to library users at the time of need)
SUBPROGRAM:
4.4 Special Programs
(This subprogram provides for undertaking special programs like School Programs, Great Books Programs, Bookmobile program etc. The goal of this subprogram is to make information available to a larger audience and to develop children’s interest in studies)
SUBPROGRAM:
4.5 Knowledge Preservation
(This subprogram provides for use of proper shelfing, cleanliness of all library areas, digitization and chemical refreshing procedures. The goal of this subprogram is to safeguard, protect and preserve the holdings in the library.)
Step Two— see pages 309-311 and specifically Figure 17.2 for help with Step Two. Use the program budget structure with descriptions and goals you completed in Step One to develop the element and sub-element shown on Form PB.2 below.
Form PB.2 Information and Library Services Sub-element 4.311
PROGRAM:
4.0 Information and Library Services
SUBPROGRAM:
4.3 General and Reference Inquiry
ELEMENT:
4.31 Assistance with Finding General Information
SUBELEMENT:
4.311 Consulting Reference Librarian on Research Topic
Description: This sub-element is concerned with…(enter your description here)
Objective: To… (enter your objective here)
Administrative Unit: Adams County Library
Five Year Plan
Year 1
Year 2
Year 3
Year 4
Year 5
Number of reference questions answered
Hours allocated to answering questions
Total cost of Reference
Activity
$
$
$
$
$
Cost per question
answered
$
$
$
$
$
Summary Analysis: The following budget actions will be implemented over the five-year budget horizon: (enter your summary analysis here; you might use the prompts below)
1. Over the next five years, the Adams County Library system will…
2. The number of patrons served is projected to…complete the prompt
3. Staffing costs will……complete the prompt
4. While staffing costs will…complete the prompt, the hours of service are expected to…complete the prompt
Label this tab of the workbook as Program Budget. Go to Assignments and click on Budget Exercise 2 to submit your workbook for grading. The workbook should contain three tabs labeled Line-Item Budget, Performance Budget, and Program Budget.