Attached are the revised files STEPS NECESSARY, FUNDING & BUDGET ALAYSIS form and a SAMPLE CAPITAL PURCHASE SCHEDULE.

Following and attached is FAQ 3. We will continue to work on these, update them as needed and put them into one document in the near future.

Victoria Rosch Associate State Librarian New Jersey State Library vrosch@PROTECTED 609.278.2640 ext.157

FOR THE PURPOSES OF THIS ACT, and to help you determine surplus funds, there are only 3 main categories for the Proposed Transfer form. (Your accountant will have different account names showing on the audit.) The three for the purposes of this form are: \x95 Operating budget (whatever the library needs to operate including salaries and benefits) \x95 Restricted (current year funds to be restricted for capital projects and/or grants) \x95 Emergency Fund (prior and/or current year funds to be restricted for carry forward emergency fund (must be equal to 20% of last audited budget)

Fines, fees, interest may be anticipated and expended in the budget as operating, capital or surplus. Gifts may be anticipated and would probably be expended in the budget either as operating or capital. Large, unanticipated gifts could be expended in the budget either as operating or capital.

We have not yet given our annual report for 2010 and have encumbered funds carried over into 2010 for 2009 payables. Do we include or exclude? It appears the first part of this section of the law is referring to a prior year, and you would probably be submitting your audit (which will show encumbered funds) as part of the annual report. \x93The board of trustees shall make an annual report to the chief financial officer of the municipality which shall include a statement setting forth in detail all public revenues received by the library, all State aid received by the library, all expenditures made by the library and the balance of funds available.\x94

It appears the return of funds section is referring to the current year, and all that needs to be identified in the annual report is the amount to be returned. \x93Notwithstanding the requirements of R.S.40:54-8 pertaining to the amount required to be raised and appropriated for library purposes, the annual report shall identify excess funds that the board intends to approve and transfer to the municipality as miscellaneous revenue. The excess funds intended for transfer may be any amount that exceeds the sum of the amount of the audited operating expenditures of the library for the most recent available year, plus an additional 20% of those operating expenditures, excluding funds restricted for capital projects and grants, to be maintained as surplus.

If you are submitting your current year proposed budget at the same time as the annual report, you would show it in the proposed budget as the accountant recommends.

The Transfer Form does not require this information.

Is there a form available for the \x91statement of library condition\x92 and what should be included in that statement? No.

My audit for FY10 will be complete 8 weeks \x97is that when my report is due, or do I use the FY09 audit? Your annual report is due to the municipality whenever you normally make your annual report. You would submit your most current available audit.

Is there a specified definition of \x91emergency funds\x92, or do we have to just make our case for that? NJSL has no definition. You may want to consult your accountant.

Under library reserves can the wording "designated reserves" pertaining to capital budget items be interchangeable with the word "restricted"?

The library handles all of its finances. There are designated reserves set aside for accumulated sick leave to be paid out upon resignation or retirement and for Unemployment Insurance. How does the new law address these reserve funds?
If the sick leave and unemployment insurance is not being paid out in the current budget year as part of the operating budget, since it is not restricted as capital or grant funds, the only category left is what NJSL is calling \x93Emergency Fund (prior and/or current year funds to be restricted for carry forward emergency fund.\x94 (Your accountant may call these funds by a different name.) Should this fund exceed 20% of the last available audit, as long as your current year budget is at least 120% of the \x93audited operating expenditures of the library for the most recent available year (excludes funds reserved for capital projects and grants)\x94, the funding would have to be returned to the municipality.

Some municipalities hold reserves for accumulated sick leave and unemployment insurance for their public library in the municipal budget, while others do not and this creates an unfair situation. It appears so.

If the municipality has to take reserves for accumulated sick leave and unemployment insurance back and does not want to, is there any recourse? This is not addressed in NJSA40:54-15. Your attorney may want to review NJSA 40:54-18. Use of money paid by library to municipal treasury. The governing body of any municipality may appropriate in the annual budget for the use of the free public library of such municipality a sum equal to the amount of the money paid into the general treasury by the free public library in the preceding fiscal year. The sum so appropriated shall be available for expenditure by the board of trustees of the free public library of the municipality for library purposes, shall be in addition to sums otherwise appropriated by law for library purposes and shall be controlled by the same laws as other budget appropriations.

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