Fiscal Responsibility

22-1-309, MCA clearly states that the library board of trustees shall have the power to accept gifts, grants, donations, etc, and to expend or hold such funds for the specific purpose of the gift or donation. 

The Attorney General determined that library boards of trustees have powers and duties that reflect "substantial autonomy from the governing body of the local governmental unit within which the library has been established." (41 Op. Att’y Gen. No. 91) 

If the library receives an unexpected grant the local governing body will need to do a budget amendment in order for the library to use the funding. Budget amendments have a high standard for public notification and create quite a bit of work for the finance office, clerk, or treasurer. 

The library should be able to use the funding for the purpose for which it is intended, so if the finance person suggests not using it until the following fiscal year the director should work with their board and the local government officials to find a way to follow the instructions of the funder who gave the library the grant. 

Donations or other private funding can be accounted for in two different ways: 

• The library can ask the funder to give the money to a 501c3 organization that supports the library. This may be a Friends of the Library, a Library Foundation, or even a local community foundation that holds funds for the library. 

• The library can work with the finance officer for local government to create a donations and/or trust fund where donations and other private funding sources can be deposited. A special revenue fund can be created for grants. 

There are pros and cons to both methods. Some libraries prefer to have a private group manage the donations and/or other sources of private funding. Others find it easy to work with their local government officials.