Timberland’s finding from the state auditor’s office

This year, for what I’ve heard is the first time ever, Timberland Regional Library received an audit finding during the library district’s regular two year audit cycle. You can read the audit finding report here.

The issue the auditor’s found is pretty straight forward. We’ve (as in “we,” the board of trustee in this case) have been spending far too much money on our independent library foundation.

The ironic part of this finding is that the board of trustees realized this years ago and have been taking serious steps to stop subsidizing the foundation. I can’t stress this enough, and other trustees have worked hard on this issue well before I was appointed in spring 2010, but the auditor’s office is giving the district a finding for something we’re already working on fixing. I noted the board’s “defunding” of the foundation last year.

These highlights from district staff’s response to the auditor’s finding summarize our response to this issue starting about six years ago:

  • In March, 2005, TRL’s Board of Trustees approved an amendment to the 1998 Agreement between TRL and the Foundation. The amendment included the following: A ceiling on expenditures of $250,000; A mandate that the Library Development office prepare a budget showing all anticipated transactions and services for the upcoming year; and A review of post-closing summary transactions between the two parties.
  • In May, 2009, TRL’s Board of Trustees discussed the matter of the open Foundation Director position. Included in part of the discussion, “… the TRLF (Foundation) Director position (shall) remain vacant until TRLF (the Foundation) submits a plan to the TRL Board for approval which includes a plan for sustainability.”
  • In September, 2010, a plan was introduced by the Foundation for a new agreement with TRL’s Board of Trustees. That plan was described at the next TRL Board meeting, “…funding the Foundation at the level requested is not justifiable…” The position of Foundation Director was not funded for 2011, and the level of funding for the Foundation was provided only at basic levels…The decision moving  forward is to continue funding the Foundation at basic levels only through June, 2012; afterwards TRL will no longer provide funding for the Foundation.

Please read the entire audit report (only three pages) and the staff responses.

Advertisements

8 Comments

Filed under What Timberland is doing

8 responses to “Timberland’s finding from the state auditor’s office

  1. Thad Curtz

    Having followed the link and read the report, I would like to add some comments. This doesn’t seem to be the first time the District has received audit findings about these issues, since the report says, “In
    the previous audit we identified several concerns regarding the contract between the District and the Foundation.”

    Emmett’s summary of the district’s response also seems a little confusing. As I read the report, the District certainly did take steps in 2005, in principle… However, some of the new audit’s findings [which apparently repeat audit findings from two years ago] are precisely that the District has not actually been carrying out some of the steps Emmett lists as part of that response. The report says:

    “In the previous audit [which I gather was in 2008] we identified several concerns regarding the contract between the District and the Foundation. These concerns have not been resolved. Specifically:
    ….

    The District is not tracking all Foundation-related expenses to ensure they do not exceed $250,000 a year.

    Under the agreement, the Library is to prepare a report each year for the Foundation President and Library Director on the transactions between the two parties to ensure the maximum has not been exceeded. The Library did not do so in 2009 or 2010.”

  2. My understanding is that those previous concerns from the auditor’s office came in the form of management letters and not actual findings. Management letter’s aren’t released by the auditor in audit form, but are sent along to the agency. I agree with the auditor’s office that the relationship between TRL and the TRLF was certainly one sided and needed fixing. But, I also think we were well on our way to doing that.

    Emmett

  3. Thad Curtz

    PS… You may well think this says more about how up tight auditors are than it says about how well or poorly Timberland is dealing with the Foundation. The audit doesn’t say that Foundation-related expenses did exceed $250K a year (and I can’t tell from the report if they did or not, either). The audit’s complaint is just that Timberland isn’t auditing that issue well enough…

    • Thad Curtz

      PPS – I actually went back and looked at the report again, and I’m now pretty sure that the library’s actual Foundation related expenses were significantly less than $250K in both 2009 and 2010. (To be precise, they were $103,936 in 2009 and $136,501 in 2010.)

  4. I don’t know much about the Foundation, but I am so surprised to hear that the library is losing money on an entity that should be benefitting them. Are the local Friends of the Library groups a better source of income? Does the library have plans to either ditch or overhaul the foundation? I work for a large non-profit (although not as large as the whole library district) and I am very surprised by those numbers.

  5. Pingback: Termination of agreement with the Timberland Library Foundation | supports an active, informed community

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s