Fiscal Responsibility
Read through this section to learn about budgets and finance.
The Trustee Essentials: Understanding Local Government Budgeting and Finance course covers this information in greater detail. Please consider taking that course to learn more.
Reserve Funds
A reserve fund is the terminology used to describe the amount of cash the library has on hand to pay expenses incurred during periods of time where there is little revenue. Libraries tend to receive their funds in two large deposits that occur after community members have paid their taxes in May and November.
Per 22-1-309, MCA the library board alone has authority to spend any funds allocated to the library. However, if the library has a reserve fund exceeding the legal limit of 33 1/3% of its total annual appropriations for counties or 50% of its total annual appropriations for cities, this can be a red flag for auditors and can also erode public trust in the library’s ability to responsibly manage public funds.
It would be prudent for the library board and the director to work together to create a spending plan for any funds that exceed the legal limit for cash reserves.