Budget Creation

BudgetCreation

BudgetCreation

Line-itembudgeting can be termed as one of the oldest and most ubiquitous formof budgeting. The technique has been used for ages in all manner oforganizations, from the small and middle sized enterprises to themega-multinationals of the world in their accounting problems. Thetechnique has also found favor among individuals who want to managetheir personal budgets. So widely used is line-item budgeting that toa majority of people the personal budgets they draw is a line-itembudget, even if they do not know the term. Theline-item budget accounting method lists all of the organization`sexpenditures based on the costs. In the line-item budget, each of thedepartment`s expenses possesses a separate line on the budget. Themethod enables the organization`s executives to determine and keeptrack of the exact sources of their expenditures.

Theline-budget illustrates precisely where public money will be spent onan item by item basis. Given its simplicity, line-item budgeting ismost appropriate for local governments and in this case Adams County.Since one does not require a financial wizard to create it, thenoffice supplies and personnel costs, as well as others of the likecan be projected within the years and be ‘lined up.` In thisfashion, they can speak, one beneath the other. Due to such traits,this kind of budget proves to be advantageous from an accountabilitystatus since the amount spent on x, y, and z can be monitoredprecisely hence keeping tabs on expenditure hence,ensuring proper use of scarce funds. Thus, the present paper createsa line-item budget that consolidates the current budgets of townsinto one single county-wide budget. The end line-item budget reducesAdams County`s total expenditures by 3%. In addition to that, thepaper justifies the proposed cuts for the county-wide library system.

Part1

Theconsolidated line-item budget for Adams County

Item

FY 1

FY 2 (Proposed)

Adams libraries

N

Total Adam

Adams libraries

N

Total Adams

Professional Staff

Full-time

Director of county libraries

45000

1

45000

45000

1

45000

Branch Librarians

34000

16

544000

34000

16

544000

Reference Librarians (Total)

32000

8

256000

32000

8

256000

Assistant Librarians

29000

15

435000

29000

15

435000

Part-time

Head Librarians

Reference Librarians

15500

3

46500

15000

3

45000

Assistant Librarians

13750

6

82500

13031.75

6

78187.5

&nbsp

Other Staff

Full-time

Administrative Assistants

22000

1

22000

22000

1

22000

Circulation Clerks

20000

20

400000

20000

20

400000

Secretaries

19500

5

97500

19500

5

97500

Maintenance Workers

16000

6

96000

16000

6

96000

Pages

15000

4

60000

15000

4

60000

Part-time

Circulation Clerks

6

11100

66600

5.5

11100

61050

Secretaries

0

0

0

0

0

0

Maintenance Workers

5.75

4300

24725

5.45

4300

23327.5

Pages

5.25

21980

115395

5.2

21980

114296

&nbsp

Other Operating Expenses

Acquisitions (Average)

10

510950

10

450000

Supplies (Average)

11

164650

11

164650

Utilities (Average)

11

134880

11

134880

Maintenance (Average)

9

54285

9

54285

Other

4

57300

4

57300

&nbsp

TOTAL

3213285

3108596

Trendsin the library sector

Whenone thinks of a library, he/she reflects of a massive volume ofbooks, and the majority of the over two billion items that arechecked are in fact books. However, libraries pose being more thanbookstores. The library serves people as a dry and warm sanctuarywhere one can sit without the fear of disturbance (Kisher, 2011).These are spaces providing a serene environment where individuals canshare information on a grand scale. The sharing occurs through thesimple acts such as borrowing of books from the public library. Sincethe inception of libraries, the American public libraries have had aprime directive of protecting the public`s access to information.Over the years, these public spaces of information have grown inleaps and bounds to gain popularity and widespread use among thecitizenry of countries across the world.

Despitethe popularity and widespread use that public libraries enjoy, amajority have not been well-funded over the years. While many lovelibraries, many are almost mute on them and only focus on theapplicability in the quest to gain information and new knowledge.Ever since their inception, libraries have been plagued by the imageof them being nice but at the same time not as essential. With such akind of mentality, then most individuals including administratorswill only defend their libraries when their lights are about to goout. Currently, it is happening with the lights of many publiclyfunded libraries about to go out.

Accordingto Kisher (2011), the per capita cost of libraries in the UnitedStates has gone up to $36 a year. Although the rate of increase hasbeen slower than the inflation levels, the rise has been phenomenal,and with looming budget cuts, libraries find themselves in trickyspots. Many states in the U.S. have increasingly cut the yearlyallocations to libraries (Holzer, 2011). The net result leaves thelibraries in urgent need of reducing their internal costs to remainoperational at this age of budget cuts by the authorities. With thebudget being cut and costs such as book, staffing, and otherutilities rising, then something has to be done so that equilibriumcan be reached.

Part2

TheCost-Reduction Measures Adopted in the Consolidated SingleCounty-Wide Library System

Inour case study, I as the deputy budget director has been tasked withthe work of creating a unified budget for the county-wide librarysystem. While this can just be achieved by drawing up the requiredline-item budget, the catch is that the consolidated budget mustreduce the total expenditures in the new library system by 3%. In thedevising of the line-item budget, I considered the requirements ofform 56 that provided requests of the new consolidated budget.

Inthe attempt to reduce the total expenditures, I first used form 56whose guidelines were as follows. First,in the consolidated line-item budget, I followed the instructionsprovided and scraped the position of head librarian for the city ofWaynesfield and created a new position of the director of countylibraries with a budget of $45,000. Second, all the head librariansin the other villages and townships were redesigned as branchlibrarians with their compensations being matched to those ofexisting branch librarians. Third, the county-wide library line-itembudget standardized the wages of all the job classifications based onthe highest levels paid to current employees. This applies tofull-time and part-time employees.

Inthe forecasted budget proposals for FY 2, the line-item budgetfeatures a standardized pay structure for the part-time employees.The proposed pay structure features a standardized pay based on theaverage pay offered in the eleven towns and villages in the county.The average is derived in each of the items but applies only to thepart-time employees in the county. Form 56 provides a guideline thatacknowledges that no pay cuts should be made to full-time libraryworkers. Based on the guideline, the cuts have only been proposed forthe part-time employees. The measure saves about $23751 in salaryexpenditures. Other than staff costs, the line-item budget hasproposed cuts in utilities, acquisitions and others.

Servicescosts are composed of expenses that are associated with theday-to-day administration of the business. In accounting, utilitiesare a component of the operating income hence, they feature in theincome statement. In the library, utility costs can be anywhere fromelectric bills to postage charges. In the Adams County Library,postage and energy costs have been selected to aid in the reductionof expenses. On the others front, donations of books and issuesaround ‘floating’ stock can be addressed. Finally, the lastmeasure involves the changing of opening hours, which will help thelibraries to save money, mainly in the associated staffing costs andless significantly on the lighting and heating charges.

Justificationof Proposed Cuts for the County-wide Library System

Staffingcosts represent the highest expenses incurred by Adams Countylibraries. All the towns and villages have massive wage expenditures,which in the long-run are not sustainable due to budget cuts byadministrations. In the wake of this budget cuts, the county librarysystem wishes to save an overall 3% of their current expenditures.Pay cuts are tough for any employer to justify since they involvesreducing someone`s income and the ever rising costs of living do notmake this process any easier (Holzer, 2011). The proposedstandardization of wages offered to part-time employees has beendrawn based on the average salaries in the eleven towns and villages.The pay cut only influences the current wages a small percentagehence, it will only drop the figureslightly, but given the employees are many, this offers a real figureto save.

Utilitycosts of energy and mailing can be minimized in an attempt to save onexpenses. Energy charges comprise of a huge cost to the library giventhe physical size of the rooms that need lighting and heating to keepthe occupants comfortable. The councils can invest in LED lights thathave been proven to save up to 40% of conventional tubes (Holzer,2011). In addition to this, the vast library rooms have lots of roofswhere solar panels can be installed to save on costs, which are hugeover a year. Each day, libraries mail thousands of notifications totheir users on new reservations being brought and late books. Thecosts of mailing are significant, which brings us to free electronicmail or text notifications that are faster and far cheaper to use tokeep track of books and other key items.

Acquisitionshave been shown to be huge in the libraries in Adams County figuresreaching a quarter of a million dollars in Waynesfield. The newproposed budgets cap this amount to $450,000 for the whole librarysystem in a bid to save costs. In the other phase, working on the‘floating’ stock will assist the libraries to save costs.Individual items such as books and DVDs tend to be owned by a certainbranch of authority. When other branches borrow these items, aninternal courier system has to be used to return the items. Asolution would be to let the items stay at the libraries they end upin hence saving costs.

Conclusion

Inconclusion, the paper has drawn a consolidated line-item budget forAdams County libraries. The line-item budget reduces the costs byover 3% of the current expenditures through a combination of measuresthat will not strain any of the library financially. A creative paycut structure on the part-time employees will ensure that the countycapitalize on their huge numbers hence, saving wage expenses. Thepaper also identifies mail charges, energy costs, ‘floating costs’and a cap on acquisitions as a relevant measure to cut onexpenditures.

References

Holzer,M. (2011). Public Administration: An Introduction. Chicago: M.E.Sharpe

Kishor,V. (2011). Inter-OrganizationalInformation Systems and Business Management: Theories forResearchers: Theories for Researchers. New York: IGI Global.