Elissa Yount: Library Labyrinth


Editor’s Note: I forgot to run this on Wednesday for two weeks in a row. Once again, my apologies. Better late than never?

Could the H. Leslie Perry Memorial Library be opened more hours with the money they are given?

Could more books be purchased and more programs offered? The city and the county taxpayers need to know and to judge. We need to know how our library has spent our money.

We hear that the Library Board cannot afford to keep the library open more hours. If they can’t afford the expense of making the library accessible, how then can they afford to make contributions of over $101,000 in 2008, over $119,000 in 2007, and over $50,000 in 2009? Why were these expenses not presented in their budget to the city and county? Is our tax money going for the items the Library Board shows in their budget? Where is the revenue coming from to pay these “contributions?” These are questions that need clear answers.

Before I get any further into this, I want it plainly known that I enjoy and use the H. Leslie Perry Memorial Library almost weekly. I grew up going to the library on Young Street where Miss Crowder would recommend books. I am very familiar with the excellent libraries at both of the regular high schools and at Vance-Granville Community College. I am likewise familiar with both of the middle school libraries and the libraries at most of the elementary schools. In addition, I have used the Law Library in the Courthouse and our church library at First Presbyterian. So I am well aware of the services available in our community, and am strongly in favor of good libraries, and this community has many.

In difficult budget times, it is the responsibility of all citizens to know how their money is being spent. Looking at the June 2008 audit for the H. Leslie Perry Memorial Library raises some questions. I have since done more research using the 2007 and 2009 audit. It seems that unbudgeted contributions is business as usual for the library, since these expenses occur over a three year period.

According to the 2008 audit, the net assets of the Library were $561,791, but the “total net assets was decreased by $23,295, primarily due to donations made to the Embassy Foundation for loan payments and furniture for the library.” When I asked for an explanation of the loan payments item, I was told that some people gave money to the library instead of the Embassy Foundation, and the Library Board then gave the money to Embassy Foundation. Also I was told that the library had been given stock which they sold and gave the money to Embassy. I questioned why there would be a decrease in assets if it were only “money-in money-out.” I also questioned why the library would receive gifts intended for the Embassy Foundation since both are 501(c)(3) non-profits. These questions have not been answered.

On page 13 of the 2008 audit it states that questions concerning any of the information in this audit should be directed to the H. Leslie Perry Memorial Library. I want it clearly understood that I was doing what any citizen is entitled to do and, in fact, I am doing what the city and county both failed to do, in my opinion. This is not an effort to humiliate, demean, or question the integrity of anyone. It is one citizen questioning our public business. I checked out a copy of the audit and made a follow up call to Jeanne Fox, the Library Director, in order to get information. Ms. Fox replied to some of my questions in a letter dated February 18, 2010.

Ms. Fox’s letter states: “The Library received money to fulfill pledge obligations for the construction of the building and for library furnishings.” Since that is the case, and pledges fulfilled indicates pledges made prior to the budget, why was this not listed as revenue and expenses in their budget?

Furthermore, Ms. Fox states: “The Library Trustees (not the Board) also authorized funds for payment of library technology and library construction loan.” She does not say that this revenue came from gifts or pledges. Most of the revenue that the Library enjoys comes from our state, county, and city taxes.

I questioned why the library listed an expense of $101,058 for “Contributions”, especially since this line item did not appear in their original or final budget. It can be deducted that this was not essential library services. In her letter, Ms. Fox stated:
“…these funds were all transferred to Embassy Square Foundation for the following purposes:

  • $44,767.54 – Pledge payment for library construction
  • $6,290 – Pledge payments to Friends Furniture Campaign
  • $40,000 – Transferred by Board action to pay for technology installed in the new library
  • $10,000 – Gift transferred by Board action to pay for library construction.
  • Now, I know budgets can change over the course of a year, but I believe a $101,000 change in a budget for “contributions” which computes to ten percent of your entire year’s budget and is the largest line item other than salaries and is more than you spent on books should be reported in your original and final budget instead of exclusively in your actual budget in an audit.

    Who would have known that this money was going to be contributed? How could our elected officials determine accurately the needs of the library with these figures held back? Could this money have kept the library opened on Sunday afternoons? Was this intended to be an open secret?

    On page 11 of the 2008 audit it states that the Library revised the budget on several occasions, and generally it was to adjust estimates, recognize new funding, or increase appropriations to maintain services. That is completely understandable.

    The audit also states that the money coming in increased “by only $13,236,” so there could not have been many budget amendments over the year. That makes contributing $101,000 — that was not budgeted — even more puzzling.

    The library spends money for salaries, utilities, maintenance, and so forth. There are revenue and expenditure lines for Friends of the Library as well as restricted assets for them. On page 24 of the audit it states: ”Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function”. This is clear and clearly identifiable.

    What is not clearly identifiable is why a $101,000 expense for “Contributions” was not listed in the original budget and, specifically, where the unbudgeted revenue came from to cover this contribution.

    Now, I am not trying to impugn the Library Board. They swing a powerful club and can really put the pressure on elected officials. But when they allowed contributions, which was more money than they spent on books, and the 2008 audit shows they did, then the public needs to know why. If they are skimping and saving on line item budget expenditures in order to contribute to the Embassy Foundation with tax money budgeted and intended to go for operational costs, we need to know. If the Library Board is in debt to the Embassy Foundation, their budget should so state.

    Who is looking after the tax money the city, the county, and the state provide the library for services to the public? The city, the county, and the Library Board are obligated to give us a dollar’s worth of service for every dollar they receive from us in taxes. Are they spending our money the way it was intended? We deserve the complete story. The business with the Embassy Foundation should be crystal clear and not hidden among budget items that are nebulous.

    If you are not tired of reading by now, here are other facts found in the 2008 audit:

  • The unreserved fund balance was 44% of the total general fund expenditures for a total of $432,497. In the restricted funds there was $168,823, of which $95,261 is restricted for remodeling and expansion and $3,200 is restricted for a Space Study/Architect.
  • The revenues for the Library in 2008 were $992,973, and this came from the county, the city, state aid, fines, grants, interest, gifts, and sale of books. Revenue of $13,408 is listed as “Other”.
  • The expenses of the library totaled $983,654. These expenses included $528,681 for salaries and benefits, $89,308 for books with other expenditures going to audiovisuals and periodicals. The library paid out $41,089 for utilities, $35,704 for maintenance and $72,359 for “contract labor.” Other expenses included but are not limited to postage, telephone and network, supplies, insurance, and equipment.
  • The Library ended 2008 with a negative balance of $57,167.

    In the Compliance Section of the audit, the auditing firm found two (2) “significant deficiencies in internal control over financial reporting.”

    Then there is this statement in the audit: ”Indirect expense allocations that have been made in the funds have been reversed for the statement of activities.”

    Whether or not this statement refers to the library showing a budget change to account for a $101,000 contribution is anyone’s guess. By the way, if you can figure out what this means, will you pass it along?