The library board shall meet at least monthly and at any other time a meeting is necessary. Meetings may be called by the president or any two board members. A majority of the members is necessary to establish a quorum for the transaction of business. All meetings, except executive sessions, are open to the public. [IC 36-12-2-23 and IC 5-14-1.5-3]

The secretary of the library board shall keep a record of the proceedings of the meetings of the library board. The proceedings and determinations of the board shall be recorded in a book to be kept for that purpose. This book is a public record of the library.

Indiana Open Door Law

Public library board meetings are governed by the Open Door Law, IC 5-14-1.5, as well as by general provisions in the Public Library Law. Under the open door law all meetings of governing boards must be open to the public except for executive sessions. See other sections below for more information on executive sessions, public notice, and minutes of board meetings.

Elected by Library Board

The "library board shall annually elect a treasurer of the public library. The treasurer may be either a member of the library board or an employee of the library. However, the library director may not also be treasurer." The library board may fix the rate of compensation for the treasurer.

Duties

The following duties are assigned to the treasurer. The treasurer:

1. is the official custodian of all library funds;
2. is responsible for the proper safeguarding and accounting for all library funds;
3. shall issue warrants approved by the library board in payment of expenses lawfully incurred in behalf of the public library; and,
4. shall make financial reports of library funds and present the reports to the library board every month.

Other powers and duties may be prescribed by the library board. [IC 36-12-2-22]

Treasurer

The Treasurer shall give a surety bond for the faithful performance of duty and for the accurate accounting of all money coming into the treasurer's custody. The bond must be:

1. written by an insurance company licensed to do business in Indiana;
2. for the term of office of the treasurer; (The term of office is one year)
3. in an amount determined by the library board; (It is recommended that the minimum amount of a Treasurer’s bond be at least $15,000)
4. paid for with the money from the library fund;
5. payable to the State of Indiana;
6. approved by the library board; and
7. deposited in the office of the recorder of the county in which the library district is located. [IC 36-12-2-22]

Other Employees

It is recommended that employees of the library who handle money also be bonded. Bonds of employees must also be payable to the State of Indiana and be filed in the county recorder's office.

Amount of Coverage

The amount of bond coverage should be determined by the library board and recorded in the minutes. 2013 2-3

Payment of Premium and Other Fees

The general statutes on bonding provide that the bond may be paid from funds of the municipal corporation "without an appropriation having been previously made therefore, in such amount as may be necessary to pay the cost of such bond or obligation." [IC 5-4-5-3] However, it is recommended that a provision for payment of such premium be included in the annual budget.

No charge shall be made by the county recorder for the filing and recording of official bonds. [IC 36-2-7-10]

Public libraries are required to file electronically an annual financial report with the State Board of Accounts pursuant to IC 5-11-1-4 not later than sixty (60) days after the end of each year. In addition, public libraries are required to file electronically Form 100R, Report of Names, Addresses, Duties and Compensation of Public Employees, in accordance with IC 5-11-13-1 during the month of January.

IC 5-3-1-3.5 requires all libraries with a total annual budget of at least three hundred thousand dollars ($300,000) to publish the Cash and Investments Combined Statement of the annual financial report within sixty (60) days after the expiration of each calendar year.

Annual statistics of public libraries are required by the Indiana State Library under the provisions of the Indiana Library and Historical Board. [IC 4-23-7.1-22] Report forms are provided by the State Library to be submitted by January 31 of each year.

Participation

IC 36-12-3-2 requires the library board to comply with and participate in the statewide library card program described in IC 4-23-7.1-5.1. However, the library board may enter into a reciprocal borrowing agreement with another library board under IC 36-12-3-7 or IC 36-1-7 to provide library service to or receive library service from the other library board.

Program

The state library shall develop and implement a statewide library card program to enable individuals 2013 2-5 who hold a valid statewide library card to present the statewide library card to borrow:

1. library books; or
2. other items available for public borrowing from public libraries as established by rules adopted by the Indiana Library and Historical Board under subsection 4-23-7.1-5.1(d);

from any public library in Indiana. The statewide library card program is in addition to any reciprocal borrowing agreement entered into between public libraries under IC 36-12-3-7 or IC 36-1-7.

Requirements

The statewide library card program must provide for at least the following:

1. To be an eligible cardholder of a statewide library card or to renew a statewide library card, the individual must:
   1. be a resident of Indiana;
   2. ask to receive or renew the statewide library card; and
   3. hold a valid resident or nonresident local library card issued to an individual by a public library under IC 36-12-2-25.
2. The individual's public library shall pay a fee to be established by rules adopted by the Indiana library and historical board under subsection (d) based on not less than forty percent (40%) of the current average operating fund expenditure per borrower by all eligible public libraries as reported annually by the state library in the state library's manual "Statistics of Indiana Libraries." The individual's public library may assess the individual a fee to cover all or part of the costs attributable to the fee required from the public library and the amount charged to all individuals by a public library under this subdivision may not exceed the amount the public library is required to pay under this subdivision.
3. Each statewide library card expires one year after issuance to an eligible cardholder.
4. Statewide library cards are renewable for additional one year periods to eligible cardholders.
5. Statewide library cards shall be available to eligible cardholders at all public libraries.
6. Each eligible cardholder using a statewide library card is responsible for the return of any borrowed item directly to the public library from which the cardholder borrowed the item.
7. All public libraries shall participate in the Statewide Library Card Program and shall permit an individual who holds a valid statewide library card to borrow items available for borrowing as established by rules adopted by the board.
8. A nonresident of a public library taxing district who requests a statewide library card shall pay a fee for that card that includes, but is not limited to, the sum of the following:
   1. the statewide library card fee that a public library is required to pay.
   2. The library taxing district's operating fund expenditure per capita in the most recent year for which that information is available in the state library's annual "Statistics of Indiana Libraries." This subdivision does not limit a library district's fee making ability or a library district's ability to enter into township contractual arrangements.
   3. The Indiana library and historical board shall adopt rules under IC 4-22-2 to implement this section, including rules governing the following:
      1. the amount and manner in which the public libraries shall remit the fee to the state library for the state library's use in conducting the statewide library card program.
      2. The manner of distribution and payment to each eligible public library district of the funds generated by the statewide library card program based upon the loans made by each eligible public library. To be eligible for a payment, the public library district must also comply with the standards and rules established under IC 4-23-7.1-11 (library operating and automation standards).
      3. The manner in which fines, penalties, or other damage assessments may be charged to eligible cardholders for items:
         1. borrowed but not returned;
         2. returned to the inappropriate public library;
         3. returned after the items were otherwise due; or
         4. damaged.
      4. The dissemination of the statewide library cards to the public libraries.
      5. Record keeping procedures for the statewide library card program.
      6. Any other pertinent matter.

Distributions

A public library is eligible for a distribution of money from the fund if the State Library and Historical Board determines that the public library:

1. meets the standards for public libraries established by rules of the board or the board has granted the public library a waiver from these standards; and
2. charges a fee in the amount required under IC 36-12-2-25 for issuing a local library card to a nonresident of the public library district.

The State Library and Historical Board shall adopt rules under IC 4-22-2 to establish a formula for the distribution of money in the fund to eligible public libraries. The formula must base the amount of money paid to an eligible public library upon the number of net loans made by the eligible public library under the statewide library card program.

The Indiana State Library shall make distributions no later than August 1 of each year. [IC 4-23-7.1-29]

Distributions are to be deposited as a miscellaneous receipt to the general fund. After appropriation, funds may be used to cover library materials or expenses associated with the sharing of resources.

General Duties of All Months

1. Post and balance ledgers.
2. Prepare monthly financial statement.
3. File Monthly Uploads in Gateway per State Examiner Directive 2018-1
4. Receive claims; review statutory authority for payment; and record approval or allowance by board.
5. Issue warrants for claims properly payable; verify that funds and appropriations are available before issuing warrants.
6. Make remittances of federal and state withholding taxes, Social Security taxes and other payroll deductions to appropriate agencies.

January

1. Prepare Employer's Quarterly Federal Tax Return for fourth quarter of the preceding year to Internal Revenue Service - Due by January 31.
   Note: State withholding tax is required to be reported and paid by the 15th of each month for preceding calendar month; no quarterly report is required.
2. Prepare withholding statements for employees (W-2) and make annual reports to Internal Revenue Service and Indiana Department of Revenue.
3. The local officers designated as members of the board of finance shall meet after the first Monday and on or before the last day of January for the following reasons:
   1. to elect a president and secretary. [IC 5-13-7-6]
   2. to receive and review the investment officer's report on investments, which is required under IC 5-13-7-7 and to review the overall investment policy of the library. [IC 5-13-7-7]
4. File Report of Names and Compensation of Officers and Employees (Form 100R) electronically on the Gateway. [IC 5-11-13-1]
5. File Annual Report with Indiana State Library, 140 North Senate Avenue, Indianapolis, In 46204. [IC 4-23-7.1-22]

February

1. Publish Cash and Investments Combined Statement of the Library Annual Financial Report not later than sixty (60) days after the end of the year if the library has a total annual budget of at least three hundred thousand dollars ($300,000). [IC 5-3-1-3.5]
2. File Gateway Annual Financial Report.
3. File Annual Uploads in Gateway per State Examiner Directive 2018-1

April

1. Prepare Employer's Quarterly Federal Tax Return for first quarter of year to Internal Revenue Service - Due by April 30.

May

1. Deadline for application for state funds distribution - May 1.
2. Deadline for application for PLAC Funds distribution - May 1. [IC 4-23-7.1-29(b)]
3. Period for filing application for deductions and exemptions from assessments and/or taxation expires June 10.
4. First installment of taxes due County Treasurer May 10. [IC 6-1.1-22-9] County Auditor verifies collections with Treasurer's Certificate of Collections and makes settlement and distribution to governmental units including public libraries. [IC 6-1.1-27-2]
5. Annual Budget Workshops for Library Directors and Trustees sponsored by Department of Local Government Finance, State Board of Accounts, and Indiana State Library.

June

1. Deadline for certifying names and addresses of every library employee to the county treasurer for the county where the employee works. - Due by June 1. [IC 6-1.1-22-14]
2. Any tax exempt organization which failed to file an application for exemption on property for which an exemption was effective for the preceding year may file application on or before June 15. [IC 6-1.1-11-5] Applicant may file the application within fifteen days after receiving notice from the County Auditor.
3. Distribution of funds due library made by County Auditor on or before June 30. [IC 6-1.1-27-1]
4. Begin preparation of public library's budget for ensuing year.

July

1. Prepare Employer's Quarterly Federal Tax Return for second quarter of year to Internal Revenue Service - Due by July 31.

August

1. Distribution of state funds must be made to libraries by August 1 by the State Auditor. [IC 4-23-7-28]
2. Distribution of PLAC funds must be made to libraries by August 1 by Indiana State Library [IC 4-23-7.1-29(a)].

October

1. Prepare Employer Quarterly Federal Tax Return for third quarter of year to Internal Revenue Services – Due by October 31.

November

1. Second installment of property taxes is due by November 10. [IC 6-1.1-22-9] After the County Treasurer has entered all credits for collection in the tax duplicate and special assessment duplicated County Auditor makes settlement and distribution.

December

1. Deadline for certifying names and addresses of every library employee to the County Treasurer for the county where the employee works - Due by December 1. [IC 6-1.1-22-14]
2. County Auditor makes distribution of funds to library - Due by December 31. [IC 6-1.1-27-3]

Pursuant to IC 5-13-6-3 libraries have the power to request an advance on tax money collected for distribution to the various units within the county. Such advance draws can help alleviate cash flow problems caused by a lack of an operating balance. The following procedures must be followed:

1. The advanced draw request must be authorized by formal board resolution.
2. The request must be made in writing to the County Treasurer. In some counties, it is customary to also send the request to the County Auditor.
3. Every County Treasurer shall, not later than thirty (30) days after receipt of written request for the funds, advance such taxes collected before the semiannual distribution.
4. The amount of the advance may not exceed 95% of the total amount collected at the time of the advance or 95% of the amount to be distributed at the next semiannual distribution.

At the semiannual distribution, all the advances made to the library shall be deducted from the total amount due the library as shown by the distribution.

If a County Auditor fails to make a distribution of tax collections or an advance tax draw by the deadline for distribution, the library that was to receive a distribution may recover interest on the undistributed tax collections under IC 6-1.1-27-1.

Purpose of the Capital Projects Fund

A library district may establish a capital projects fund with respect to a facility used or to be used by the library district. The fund may be used to pay for the following:

1. planned construction, repair, replacement, or remodeling;
2. site acquisition;
3. site development;
4. repair, replacement, or site acquisition that is necessitated by an emergency. [IC 36-12-12-2]

Definitions

"Emergency" means: (1) when used with respect to repair or replacement, a fire, flood, windstorm, mechanical failure of any part of a structure, or other unforeseeable circumstance; and (2) when used with respect to site acquisition, the unforeseeable availability of real property for purchase.

• "Library Board" means the fiscal and administrative body of a public library.
• "Library District" means the territory within the corporate boundaries of a public library.

Permitted Uses

Money in the fund may be used to pay for the purchase, lease, or repair of equipment to be used by the library district. Also, the fund may be used to pay for the purchase, lease, upgrading, maintenance, or repair of computer hardware or software. [IC 36-12-12-2]

Plan of Revenues and Expenses

Before a library board may collect property taxes for a capital projects fund in a particular year, the library board must, after January 1 and before May 15 of the immediately preceding year, hold a public hearing on a proposed plan, pass a resolution to adopt a plan, and submit the plan for approval or rejection by the fiscal body designated in IC 36-12-12-4. [IC 36-12-12-3(a)]

The property tax levy for this fund is considered part of the Library's maximum levy.

The Department of Local Government Finance shall prescribe the format of the plan. The plan must apply to at least the three years immediately following the year the plan is adopted. A plan must estimate for each year to which it applies the nature and amount of proposed expenditures from the capital projects fund. A plan must estimate:

1. the source of all revenue to be dedicated to the proposed expenditures in the upcoming budget year; and
2. the amount of property taxes to be collected in that year and retained in the fund for expenditures proposed for a later year. [IC 36-12-12-3(b)]

If a hearing is scheduled on a proposed plan, the library board shall publish the proposed plan and a notice of the hearing in accordance with IC 5-3-1-2(b). [IC 36-12-12-3(c)]

Approval or Rejection of Plan by Appropriate Fiscal Body

If a library board passes a resolution to adopt a plan, within ten days after passing the resolution the board shall transmit a certified copy of the plan to the appropriate fiscal body or fiscal bodies, whichever applies. The appropriate fiscal body is determined as follows:

1. If the library district is located entirely within the corporate boundaries of a municipality, the appropriate fiscal body is the fiscal body of the municipality.
2. If the library district is not located entirely within the corporate boundaries of a municipality and the district is located entirely within the boundaries of a township, the appropriate fiscal body is the fiscal body of the township.
3. If the library district is not located entirely within the corporate boundaries of a municipality or within the boundaries of a township, the appropriate fiscal body is the fiscal body of each county in which the library district is located.

The appropriate fiscal body shall hold a public hearing on the plan within thirty days after receiving a certified copy of the plan and either reject or approve the plan before August 1 of the year that the plan is received. If the plan is approved by the fiscal body, the library board shall publish a Notice of Adoption as required by IC 36-12-12-5 within thirty (30) days of the adoption. [IC 36-12-12-4]

Petition of Objections by Affected Taxpayers

Ten or more taxpayers who will be affected by the adopted plan may file a petition with the County Auditor of a county in which the library district is located no later than ten days after the publication, setting forth their objections to the proposed plan. The County Auditor shall immediately certify the petition to the Department of Local Government Finance. [IC 36-12-12-5(b)]

Notice and Hearing on Taxpayer Objection Petition

The Department of Local Government Finance shall, within a reasonable time, fix a date for a hearing on the petition filed under IC 36-12-12-5(b). The hearing shall be held in a county in which the library district is located. The Department of Local Government Finance shall notify the library board and the first ten taxpayers whose names appear upon the petition at least five days before the date fixed for the hearing. [IC 36-12-12-6]

Determination by Department of Local Government Finance

After a hearing upon the petition under IC 36-12-12-6, the Department of Local Government Finance shall certify its approval, disapproval, or modification of the plan to the library board and the County Auditor. A taxpayer or the library district may petition for judicial review of the final determination of the Department of Local Government Finance. The petition must be filed in the tax court not more than forty-five (45) days after the Department of Local Government Finance’s action [IC 36-12-12].

Appropriations

The Department of Local Government Finance may approve appropriations from the capital projects fund only if the appropriations conform to a plan that has been adopted and approved in compliance with IC 36-12-12. [IC 36-12-12-8]

Amendments

A library board may amend an adopted and approved plan to provide money for the following purposes:

1. with respect to a facility used or to be used by the library district, for repair, replacement, or site acquisition that is necessitated by an emergency; or
2. supplement money accumulated in the capital projects fund for those purposes. [IC 36-12-12-9(a)]

When an emergency arises that results in costs that exceed the amount accumulated in the fund for the purposes described in number 1 above, the library board must immediately apply to the Department of Local Government Finance for a determination that an emergency exists. If the Department of Local Government Finance determines that an emergency exists, the library board may adopt a resolution to amend the plan. The amendment is not subject to the deadline and the procedures for adoption described in IC 36-12-12-3. However, the amendment is subject to modification by the Department of Local Government Finance. [IC 36-12-12-9(b)]

An amendment adopted under this section may require the payment of eligible emergency costs from money accumulated in the capital projects fund for other purposes or money to be borrowed from other funds of the library board or from a financial institution. [IC 36-12-12-9(c)]

The amendment may also provide for an increase in the property tax rate for the capital projects fund to restore money to the fund or to pay principal and interest on a loan. However, before the property tax rate for the fund may be increased, the library board must submit and obtain the approval of the appropriate fiscal body or bodies, as provided in IC 36-12-12-4. An increase to the property tax rate for the capital projects fund is effective for property taxes first due and payable for the year next certified by the Department of Local Government Finance under IC 6-1.1-17-16. However, the property tax rate may not exceed the maximum rate established under IC 36-12-12-10. [IC 36-12-12-9(c)]

Limitation and Advertisement of Tax Rate

To provide for the capital projects fund, the library board may, for each year in which a plan adopted under IC 36-12-12-3 is in effect, impose a property tax rate that does not exceed one and sixty-seven hundredths cents ($0.0167) on each one hundred dollars ($100) of assessed valuation of the library district and within the maximum levy limits. The rate must be advertised in the same manner as other property tax rates. [IC 36-12-12-10]

Interest

Interest on the capital projects fund, including the fund's pro rata share of interest earned on the investment of total money on deposit, shall be deposited in the fund. The library board may allocate the interest among the accounts within the fund. [IC 36-12-12-11]

Administrative Rules

The Department of Local Government Finance may adopt rules under IC 4-22-2 to implement this chapter. [IC 36-12-12-12]

The library board shall appropriate funds in such a manner that the disbursements for a year do not exceed the library's budget as finally determined under IC 6-1.1. [IC 6-1.1-18-4]

A contract entered into without a sufficient appropriation balance is void.

Additional Appropriations

IC 6-1.1-18-5 contains the required procedures for requesting additional appropriations, as follows:

1. If the library board desires to appropriate more money for a particular year than the amount prescribed in the budget for that year, they shall give notice of their proposed additional appropriation. The notice shall state the time and place at which a public hearing will be held on the proposal. The notice shall be given once in accordance with IC 5-3-1-2(b).
2. If the additional appropriation by the library is made from a fund that receives revenue from property taxes levied under IC 6-1.1; the library must report the additional appropriation to the department of local government finance. If the additional appropriation is made from a fund that receives revenue from property taxes levied under IC 6-1.1, subsections (f), (g), (h), and (i), apply to the library.
3. However, if the additional appropriation is not made from a fund that receives revenue from property taxes levied under IC 6-1.1, subsections, (f), (g), (h), and (i) do not apply to the library.
4. A library may make an additional appropriation without approval of the department of local government finance if the additional appropriation is made from a fund that does not receive revenue from property taxes under IC 6-1.1. However, the fiscal officer of the library board shall report the additional appropriation to the department of local government finance.
5. After the public hearing, the library board shall file a certified copy of their final proposal and any other relevant information with the department of local government finance.
6. When the department of local government finance receives a certified copy of a proposal for an additional appropriation under subsection (e) the department shall determine whether sufficient funds are available or will be available for the proposal. The determination shall be in writing and sent to the library not more than fifteen days after the department of local government finance receives the proposal.
7. In making the determination under subsection (f), the board shall limit the amount of the additional appropriation to revenues available, or to be made available, which have not been previously appropriated.
8. If the department of local government finance disapproves any additional appropriation under subsection (f), the department shall specify the reason for its disapproval on the determination sent to the library.
9. The library board may request a reconsideration of a determination of the department of local government finance under this section by filing a written request for reconsideration. A request for reconsideration must:
   1. be filed with the department of local government finance within fifteen (15) days of the receipt of the determination by the library; and
   2. state with reasonable specificity the reason for the request. The department of local government finance must act on a request for reconsideration within fifteen (15) days of receiving the request.
10. A public library that:
    1. is required to submit the public library’s budgets, tax rates, and tax levies for nonbinding review under IC 6-1.1-17-3.5; and
    2. is not required to submit the public library’s budgets, tax rates, and tax levies for binding review for approval under IC 6-1.1-17-20 and the library proposes to make an additional appropriation for a year, and the additional appropriation would result in the budget for the library for that year increasing (as compared to the previous year) by a percentage that is greater than the result of the assessed value growth quotient determined under IC 6-1.1-18.5-2 for the calendar year minus one (1), the additional appropriation must first be approved by the city, town , or county fiscal body described in IC 6-1.1-17-20.3(c) or IC 6-1.1-17-20(d), as appropriate.

Forms and formats pertaining to the additional appropriation process are available from the Department of Local Government Finance at the following location:

Department of Local Government Finance
Indiana Government Center North
Room N1058, 100 North Senate Avenue
Indianapolis, Indiana 46204
(317) 232-3777
http://www.in.gov/dlgf

Appropriation Transfers

Pursuant to IC 6-1.1-18-6, the library board may transfer money from one major budget classification to another within a department or office if:

1. they determine that the transfer is necessary;
2. the transfer does not require the expenditure of more money than the total amount set out in the budget as finally determined under IC 6-1.1; and
3. the transfer is made at regular public meeting and by proper resolution.

A transfer may be made under this section without notice and without the approval of the Department of Local Government Finance.

Unanticipated LIRF expenditures and appropriation of unanticipated revenue require a board resolution, publication of the additional appropriation request, public hearing and approval by the Department of Local Government Finance.

Temporary Fund Transfers

Pursuant to IC 36-1-8-4(a), a library, by resolution, may transfer a prescribed amount for a prescribed period to a depleted fund from another fund of the library if the following conditions are met:

1. It must be necessary to borrow money to enhance the depleted fund;
2. There must be sufficient money on deposit to the credit of the other fund that can be temporarily transferred.
3. Except as provided in IC 36-1-8-4(b), the prescribed period must end during the budget year of the year in which the transfer occurs.
4. The amounts transferred must be returned to the other fund at the end of the prescribed period.
5. Only the revenues derived from the levying and collection of property taxes or special taxes or from operation of the political subdivision may be included in the amount transferred.

IC 36-1-8-4(b) states: If the fiscal body of a political subdivision determines that an emergency exists that requires an extension of the prescribed period of a transfer under this section, the prescribed period may be extended for not more than six (6) months beyond the budget year of the year in which the transfer occurs if the fiscal body does the following:

1. Passes an ordinance or a resolution that contains the following:
   1. a statement that the fiscal body has determined that an emergency exists.
   2. A brief description of the grounds for the emergency.
   3. The date the loan will be repaid that is not more than six (6) months beyond the budget year in which the transfer occurs.
2. Immediately forwards the ordinance or resolution to the State Board of Accounts and the Department of Local Government Finance.

Loans, Bond Issues, and Notes

IC 36-12-3-10 allows the library board to do the following:

1. Adopt a resolution to make loans or issue notes for the purpose of refunding those loans in anticipation of revenues of the library that are expected to be levied and collected during the term of the loans. The term of a loan may not be more than five (5) years. Loans must be made in the following manner:
   1. The resolution authorizing the loans must appropriate and pledge to payment of the loans a sufficient amount of the revenues in anticipation of which the loans are issued and out of which the loans are payable.
   2. The loans must be evidenced by warrants or tax anticipation notes of the library in terms designating:
      1. the nature of the consideration;
      2. the time and place payable; and
      3. the revenues in anticipation of which the loans are issued and out of which the loans are payable.
2. Borrow money from other persons.
3. Issue, negotiate, and sell negotiable notes and bonds of the public library.
4. Levy, assess, and collect, at the same time and in the same manner as other taxes of the public library are levied, assessed, and collected, a special tax in addition to the tax authorized by IC 36-12-3-12, sufficient to pay all yearly interest on the bonded and note indebtedness of the public library.
5. Provide a sinking fund for the liquidation of the principal of the bond when it becomes due.
6. IC 36-9-41 allows libraries to issue a note with a financial institution to finance public works projects of not more than two million dollars ($2,000,000). Such note is payable over a period of not more than six years.

Lapsing of Current Appropriations

Unexpended or unobligated appropriations shall lapse at the close of the year. Every effort should be made to have bills and claims presented before the end of the year, so that such items may be charged to the appropriation and disbursement account of the year in which the service or commodity was supplied.

A claim of a prior year may be paid in the following year if the prior year's appropriation is properly encumbered and sufficient funds are available.

Encumbrance of Appropriation Balances

Appropriations may be encumbered only through a contract or purchase order dated on or before December 31 of that year.

Balances should be carried to the succeeding year only to the extent of unpaid balances due on contracts or purchase orders.

The library board of trustees should make a listing of all encumbered items and make it a part of the minutes of the last business meeting of the year.

Appropriations that are carried forward should be shown as separate amounts on the corresponding appropriation ledger sheets of the previous year with an explanation and then added to the succeeding year's appropriations. The disbursements charged to the appropriations of the previous year should be identified as such on the succeeding year's appropriation ledger sheets.

Appropriations for Federal Programs

When funds are provided by the federal government either directly to a library or through a state agency for any program or project, the following procedures should be followed:

Advance Grants. Advance grants should be handled as follows:

1. Where funds are "advanced" directly to the library by the federal government for a specific purpose prior to making any disbursements by the library, the money should be placed in a separate project fund and disbursements subsequently made from that fund. No appropriation of the federal funds is required.
2. Where federal funds are "advanced" to the library through a state agency or department with no state funds added thereto prior to making any distributions, the money should be placed in a separate project fund and subsequent disbursements made from that fund. No appropriation of the federal funds is required. Library Services and Technology Act (LSTA) grants are in this category.
3. Where federal funds are "advanced" to the library by a state agency or department and state funds are included along with the federal funds in one check or voucher and the funds are for a specific purpose, the money should be placed in a separate project fund and disbursements made from that fund. Appropriation(s) must be obtained for the combined total (i.e., federal and state) prior to any disbursement being made from that project fund.

Reimbursement Grants. Reimbursement grants should be handled as follows:

Where a federal or state grant provides for payments to be made directly to a library on a "reimbursement" basis after payment of expenses by the library, the entire amount of the federal or state reimbursement may be appropriated by the library board without using the additional appropriation procedures under IC 6-1.1-18-5, if the funds are provided or designated by the state or federal government as a reimbursement of expenditures. [IC 6-1.1-18-7.5]. No separate fund for the project or program is required unless the terms of the grant require one.

Matching Grants. Matching Grants should be handled as follows:

When a federal grant or program requires expenditures or "matching" funds to be provided from library funds, an appropriation must be obtained for the amount of such expenditures or local matching funds. Individual program requirements will dictate whether the appropriation should be obtained within the applicable library fund for expenditures there from or whether an appropriation should be obtained within the applicable library fund for a transfer to a required separate fund. This matter should be set out in the terms and conditions entered into between the library board and officials of the federal agency.

Summary. To summarize, no appropriations of federal funds are necessary: (1) when advanced directly from the federal government for a specific purpose prior to making disbursements, and the money is placed in a separate project fund with disbursements made from that fund; or, (2) when federal funds are received in advance through a state agency for a specific purpose prior to making disbursements and the money is placed in a separate project fund with disbursements made from that fund and there is no state match.

Please keep in mind, if the library board wishes to obtain an appropriation for all funds to be spent (i.e., federal, state, and local), there is certainly no prohibition in state statutes.

Loans – Tax Anticipation Warrants and Notes

IC 36-12-3-10 requires loans to be evidenced by a tax anticipation warrant bearing a specified rate of interest from date of loan to maturity date. IC 6-1.1-20-7 has removed the maximum interest rate but requires if the rate of interest is greater than eight percent (8%), the approval of the Department of Local Government Finance must be secured.

A loan must be repaid from the fund to which the loan was receipted. The principal of a loan may be repaid without an appropriation, but an appropriation is required for payment of the interest on the temporary loan.

Suggested forms of “Notice of Receiving Bids for Loans” and “Tax Anticipation Time Warrant” which are similar to those now being used in some political subdivisions follow. Please consult your library attorney for advice in this matter.

Notice must be published two (2) times at least one (1) week apart, with the first publication made at least fifteen (15) days before the date of sale, and the second publication must be made at least three (3) days before the date of the sale.

"All money collected from tax levies, interest on investments, fees, fines, rentals, and other revenues shall be deposited into the 'library operating fund,' except as otherwise provided in this section, and must be budgeted and expended in the manner required by law."

Petty Cash. A "Petty Cash Fund" may be established, for the purpose of paying small or emergency items of operating expense. A receipt must document each disbursement made from the fund. Periodically a voucher must be filed by the custodian of the fund to reimburse the fund for disbursements made. However, no reimbursement can be made unless the original receipts totaling the disbursements claimed are attached to the petty cash voucher. Reimbursement shall be approved and made in the same manner as required for other disbursements for the library. [IC 36-1-8-3]

All receipts (from fines, taxes, etc.) must be deposited to the library's operating fund. According to IC 36-12-3-11, the library is prohibited from spending any of its receipts (with the exception of certain gifts and bequests) except by appropriation. Therefore, fine money may not be spent for the purchase of small items.

The following procedure is advised for minor cash purchases:

1. The library board should authorize the establishment of a petty cash fund by placing an item in the budget under "Other Services and Charges" labeled "To establish petty cash fund $__________" (the amount to be determined by the library board). This figure is written into the budget when it is prepared in July or August.
   Note: Although the law states that the petty cash fund may be established without appropriation, it is recommended that the library board make an appropriation for petty cash when the fund is established.
2. In January, when the new budget becomes effective, a warrant should be issued to the person designated by the board to be responsible for the petty cash fund as custodian. The custodian may then purchase small items through the petty cash fund. A receipt (such as a sales check or cash register receipt) must be obtained for each disbursement.
3. Receipts and disbursements are then to be entered in a small book used for petty cash along with the balance in cash shown.
4. When the need arises to replenish the cash in the fund, all receipts for disbursements from the fund are presented to the board with a claim or other similar certification, just as all other bills are presented.
5. After the board approves the claim, another warrant will be issued to the custodian, in the amount of the claim, to reimburse the petty cash fund and bring it back to the original amount.
6. At all times the amount of cash plus unreimbursed receipts must equal the original amount of the petty cash fund. Thus, if the fund is $50.00, and $42.33 has been spent for miscellaneous items, the cash on hand should be $7.67 and unreimbursed receipts should total $42.33.
7. Expenditures from petty cash are classified in the same manner as all other library disbursements. For example, the total amount of a warrant to reimburse petty cash should be entered in the financial records; and then broken down according into the proper classified columns. A warrant totaling $42.33 may be posted as follows:

8. During the course of the year, several warrants to reimburse petty cash may be issued but, in all instances, the expenses must be classified, charged to and limited by the proper appropriation accounts as above. 8. If the custodian of the petty cash funds changes, the entire fund must be returned to the library operating fund, or turned over and receipted for by the person designated by the board to have future custody.

Sources

All money received from the sale of bonds or other evidences of indebtedness for the purpose of construction, reconstruction, or alteration of library buildings, except the premium and interest accrued on the bonds, shall be deposited into the construction fund.

Note: All premium or accrued interest received in the sale of the bonds should be deposited into the Bond and Interest Redemption Fund. [IC 36-12-3-11(a)(3)]

Uses

Money deposited into the construction fund shall be appropriated and expended solely for the purpose for which the indebtedness is created. As provided in the resolution, all expenses incidental to the issuance of the bonds, (including advertising, printing of bonds, attorney fees and any other expenses), and all other costs of construction, reconstruction, or alteration of library buildings incurred should be paid from the proceeds of the bond issue and would be posted, when paid, as disbursements for the Construction Fund. [IC 5-1-14-11] [IC 36-12-3-11(a))2)]

Surplus

Any surplus remaining in the Construction Fund after the purpose for which the bonds were issued has been accomplished or abandoned is required to be transferred by order of the library to the Bond and Interest Redemption Fund and used for the payment of interest bearing indebtedness. [IC 36-12-3-9(c)]

Recording

The "E" Columns, or any other columns not in use, of the Library Financial and Appropriation Record, provide space for entering all transactions affecting the Construction Fund; "E-1" receipts, "E-2" disbursements, and "E-3" balance.

Source

All money derived from the taxes levied for the purpose of retiring bonds or other evidence of indebtedness, together with any premium or accrued interest that may be received, shall be receipted into the "Bond and Interest Redemption Fund."

Uses

Money in the bond and interest redemption fund shall be used for no other purpose than the repayment of indebtedness.

Recording

The "D" columns of the Library Financial and Appropriation Record provide space for entering all transactions affecting the Bond and Interest Redemption Fund; "D-1" received, "D-2" disbursed, and "D-3" balance. The forth column "Approp. Debt Service" provides for posting of the total amount appropriated from the Bond and Interest Redemption Fund for the retirement of bond principal and payment of interest.

IC 36-1-8-5.1 allows a library to establish a rainy day fund to receive transfers of unused and unencumbered funds. The rainy day fund is subject to the same appropriation process as other funds that receive tax money. The fund should be established by resolution and the resolution should state the purposes and sources of funding for the fund. In any fiscal year, a library may transfer not more than ten percent (10%) of the library’s total annual budget for that fiscal year to the rainy day fund.

If a library receives supplemental distributions of CAGIT under IC 6-3.5-1.1-21.1 or COIT under IC 6-3.5-6-17.3, such distributions must be receipted to the rainy day fund. Dormant fund balances under IC 36-1-8-5 may also be transferred to the rainy day fund. Transfers of supplemental distributions of CAGIT or COIT transfers of dormant fund balances are not subject to the ten percent (10%) transfer limit.

Transfers to the rainy day fund may be made at any time during the year. [IC 36-1-8]

Transfers from a debt service fund may not be made to the rainy day fund.

The Department of Local Government Finance may not reduce the actual or maximum permissible levy of a library as a result of a balance in the rainy day fund of the library.

Purpose and Permitted Uses

"Money or securities may be accumulated in any library improvement reserve fund for the purpose of anticipating necessary future capital expenditures such as the purchase of land, the purchase and construction of buildings or structures, the construction of additions or improvements to existing structures, the purchase of equipment, and all repairs or replacements of buildings or equipment."

The Library Improvement Reserve Fund is intended to meet future capital expenditures and repairs for which taxes cannot reasonably be levied in any one year. The plan for using the fund should determine the amount to be appropriated annually to the Library Improvement Reserve Fund as well as the number of years requiring appropriations for this purpose.

Sources

Sources for the Library Improvement Reserve Fund may include endowments and gifts as well as money provided in the budget raised by taxation. However, no authority exists for a separate tax levy for the Library Improvement Reserve Fund.

Establishment

The Library Improvement Reserve Fund may be established by resolution of the library board at any time. However, any tax money to be accrued to the Library Improvement Reserve Fund must be anticipated in the annual budget.

Amount Budgeted

The amount budgeted annually for the Library Improvement Reserve Fund is not statutorily limited.

Any amount intended for an accretion to the Library Improvement Reserve Fund should appear in the annual operating budget in the "Other Services and Charges" section under the classification "Transfer to Library Improvement Reserve Fund."

Additional Appropriations

When Library Improvement Reserve Fund is to be advertised as an additional appropriation, the steps outlined in "Procedure for Requesting Additional Appropriation," should be followed. The model form includes the statement: "These appropriations are made from the unappropriated Library Improvement Reserve Fund balance."

Deposit and Accounting

The sum appropriated for the Library Improvement Reserve Fund should be transferred from the Library Operating Fund to the Library Improvement Reserve Fund. This transfer is achieved through proper authorization by the library board and a warrant drawn on the Library Operating Fund in favor of the Library Improvement Reserve Fund. The library treasurer should endorse the warrant and deposit it in the designated depository. (The Library Improvement Reserve Fund is not to be set up in a separate bank account.) The amount is receipted on the financial and appropriation record in columns "A-1" and "C-1".

While the transfer may be made at any time, it is advisable to make it immediately after each tax draw is received. If the transfer is made after each tax draw, the amount may be half the total amount appropriated to the Library Improvement Reserve Fund or, depending on the library's cash situation, the total amount may be transferred at one time. Unless the transfer is made, the appropriation for the Library Improvement Reserve Fund will expire at the end of the year like any other appropriation balance.

Disbursement Transactions

An appropriation is necessary before any disbursement from the Library Improvement Reserve Fund may be made, except for investments. Appropriation of this fund may be made in the annual budget or, if an emergency arises, an additional appropriation may be made in the regular legal manner, including advertising notice to the taxpayers, public hearing, action by the library board, and approval by the Department of Local Government Finance. The matters of budget, additional appropriation, giving of notices, hearings, etc., are governed by IC 6-1.1-17 and 6-1.1-18.

Disbursements can be made only upon a warrant of the library board, drawn on that bank in which the fund is deposited.

Library Improvement Reserve Fund disbursements should be made directly from the Library Improvement Reserve Fund. Library Improvement Reserve Fund appropriations should not be transferred to the Library Operating Fund before disbursement. Unencumbered balances of appropriations, if any, in the Library Improvement Reserve Fund revert to the Library Improvement Reserve Fund on December 31 of each year.

Establishment

Money or securities accepted and secured by the library board as a grant, gift, donation, endowment, bequest or trust may be set aside in a separate fund or funds, and shall be expended, without appropriation, in accordance with the conditions and purposes specified by the donor.

Definitions

The following definitions apply to the gift fund.

"Restricted" gifts are those to which the donor has attached terms, conditions and purposes. These may be quite specific or very general, such as "books", etc.

"Unrestricted" gifts are those to which the donor has not attached terms, conditions or purposes.

Sources

Grants, gifts, donations, endowments, and bequests (hereinafter required to collectively as "gift"). It is the prerogative of the Board to accept or reject any gift.

Income in the form of tax receipts, fees, sale of library property, rental, etc. may not be receipted into the library gift fund.

Accounting

Gifts may be handled in any of the following ways:

Operating Fund. If the gift is unrestricted, the library may receipt the gift into the library operating fund.

1. If deposited into the library operating fund, the gift money must be budgeted, appropriated (in the regular budget or by additional appropriation) in the manner prescribed, including advertising and approval by the Department of Local Government Finance. Any gift receipted to the Library Operating Fund must be posted to Columns A-1 and B-1 of the Library Financial and Appropriation Record. Disbursements are to be posted to Columns A-2 and B-2 and also in the applicable appropriation columns.
2. Gift money placed into the library operating fund may be spent as determined by the library board within the scope of its statutory authority. It is to be expended as other funds of the library.
3. Gift money placed in the library operating fund does not accumulate and must be spent or encumbered within the fiscal year or it will revert to the library operating fund balance and must be reappropriated before the disbursement.

Separate Fund or Funds. A separate fund may be established for each gift; gifts for like purposes may be receipted into separate funds for each purpose; or all gifts may be placed into one "Gift Fund".

Use of Gift Funds. If the library board chooses to receipt any gift (restricted or unrestricted) to a separate fund or funds, the following will apply.

1. Gift money may be spent without budgeting or appropriation.
2. If restricted, it must be spent according to the donor's restrictions.
3. If unrestricted, it may be spent as determined by the library board within the scope of its statutory authority.
4. The fund or funds may be accumulated and may be spent at any time the library board determines, unless otherwise required by the terms of the donor.

Accounting. If all gifts are placed into a "Gift Fund", the following accounting will be necessary:

1. A subsidiary record to keep track of the disbursements relating to each gift must be maintained.
2. The subsidiary record may be kept on any appropriate commercial form or columnar worksheet, such as a cash journal.
3. A separate sheet should be opened in this subsidiary record for each restricted gift. Entries to this separate sheet would include the receipt of the restricted gift and disbursements chargeable to each gift including the date, amount and explanation of each.
4. Income from the interest on gifts may be receipted into the same fund in which the principal of such gift has been receipted provided it is to be used for the same purpose as the principal. However, if, under the terms of the trust, the principal must be held in trust in perpetuity and only the income used by the governmental unit, there should be two accounts established, one designated as "Trust Principal" and the other designated "Trust Income."
5. Unrestricted gift fund monies may be invested as part of the "total monies on deposit," and the interest thereon receipted to the library operating fund.
6. All funds, regardless of source, are deposited by the treasurer in only one bank account in each designated depository.
7. Receipts to and disbursements from a separate gift fund or funds may be posted in columns D-1, D-2, E-1, E-2, and E-3 or F-1, F-2 , and F-3 on the Library Financial and Appropriation Record if such columns are not being used. If space for additional funds is needed, the optional flyleaf sheet (Library Form No. 1C) should be used. This form contains columns for four additional funds.

Community Foundation Transfers

Gifts to the library may be set aside in an account with a nonprofit corporation established for the sole purpose of building permanent endowments within a community (referred to as a "community foundation"). The earnings on the funds in the account, either deposited by the library or accepted by the community foundation on behalf of the library, may be distributed back to the library for disbursement, without appropriation, in accordance with the conditions and purposes specified by the donor. A community foundation that distributes earnings under this clause is not required to make more than one (1) distribution of earnings in a calendar year. [IC 36-12-3-11(a)(5)(B)]

This action must be authorized by the library board by resolution. Note that the statute does not provide for a return of principal to the library.

"All money received in payment for library services or for library purchases made or to be made under the terms of a contract between two (2) or more public libraries under section 6 of this chapter shall be deposited into a contractual service fund. This money shall be expended solely for the purposes specified in the contract and shall be disbursed without further appropriation." [IC 36-12-3-11(a)(6)]

Establishment

When the property tax collections for a particular calendar year exceed the library's approved levy by more than 100%, the library must establish a special fund to be known as the "Levy Excess Fund" for amounts over one hundred dollars ($100). Delinquent property taxes that are collected during a particular calendar year that were assessed for an assessment date that precedes the assessment date for the current year in which the taxes are collected are to be excluded from the amount which is used to compute the amount of the levy excess.

Each year the Department of Local Government Finance will certify to each library the figure that represents 100% of the tax levy.

This figure should be compared to the total shown on the County Auditor's Certificate of Tax Distribution of Taxes under the heading "General Property" for the June and December tax distributions. Do not include the license excise or bank and building and loan taxes in the comparison.

Source and Use

The part of the levy which exceeds 100% must be deposited in the fund and may not be spent until the disbursement of the money has been included in a budget approved by the Department of Local Government Finance. However, if the amount for any particular calendar year is less than $100, no money shall be deposited in the Levy Excess Fund for that year.

The Department of Local Government Finance may require a library to include the amount in its Levy Excess Fund in the library's budget. After the budget has been approved, the amount in the Levy Excess Fund should be transferred from the Levy Excess Fund by warrant and receipted into the Library Operating Fund.

Investment

The money in the Levy Excess Fund may be invested in the same manner in which other funds may be invested. However, any income derived from such an investment must be deposited in the levy excess fund. [IC 6-1.1-18.5-17]

Accounting

The Levy Excess Fund should be established as a separate fund apart from the operating fund.

All money received from the sale of PLAC cards should be receipted to a PLAC Card fund. Payments are to be made to the State Library of such receipts on a quarterly basis as required by 590 IAC 3.

Establishment

Pursuant to IC 36-12-12, the library may establish a library Capital Projects Fund for the following purposes.

Facility. With respect to a facility used or to be used by the library district, the fund may be used to pay for planned construction, repair, replacement, or remodeling; site acquisition; site development; repair, replacement, or site acquisition that is necessitated by an emergency. 2013 4-8

Equipment. Money in the fund may be used to pay for the purchase, lease, or repair of equip-ment to be used by the library district.

Computer Hardware and Software. The library capital projects fund may also be used for the purchase, lease, upgrading, maintenance, or repair of computer hardware or software.

IC 36-1-8-12 states that if a political subdivision receives state grant money requiring local matching money, the political subdivision shall create a special fund and deposit the grant money and matching money into the special fund. The money in the fund may be used only for the purposes of the grant.

If a political subdivision completes the project for which the state grant money was provided and money remains in the fund: (1) the political subdivision shall transfer the state's share of the remaining money to the Treasurer of State for deposit in the fund from which the grant was made; and (2) the political subdivision's pro rata share of the remaining money reverts to the political subdivision's general fund.

A Payroll Fund may be used as a clearing account for all payroll transactions. The total gross payroll would be receipted to the fund at each payroll and the net payroll and the withholdings would be disbursed from the fund.

Whenever the purposes of a tax levy have been fulfilled and an unused and unencumbered balance remains in the fund, the library board shall order, by resolution, the balance of the fund to be transferred to the Library Operating Fund or the Rainy Day Fund.

This section applies only to funds raised by a general or special tax levy. [IC 36-1-8-5]

For general information on prescribed forms and the form approval process see the General Information section.

Description

The Library Financial and Appropriation Record is Library Form No. 1. The insert sheets are Library Form Nos. 1A and 1B. Libraries having more than five (5) funds will also use the optional insert sheet, Library Form 1C.

Accounting Procedures

The Library Financial and Appropriation Record should be posted as follows.

Original Appropriations. The original appropriation for each item as shown by Library Budget Form No. 4 should be entered on Line 1 of the Library Financial and Appropriation Record. This same amount is to be carried forward to Line 1 of each succeeding page of the Financial and Appropriation Record.

Note that the Budget Estimate, Library Budget Form No. 1, is in more detail than the Resolution of Appropriations, Library Budget Form No. 4. For example, on Library Budget Form 1, electric current, gas, and water are listed as separate items. On Library Budget Form No. 4 these items are combined into one appropriation for utility services. This permits the library to expend more than the amount estimated on Library Budget Form No. 1 for water or any one of the items, as long as the total amount expended for heat, light, power, and water does not exceed the amount appropriated as shown on Library Budget Form No. 4., utility services.

The amounts included on Library Budget Form No. 4 govern the maximum amount that a library may expend. An additional appropriation is not required unless the disbursement for a certain item will exceed the amount appropriated as shown on Library Budget Form No. 4 which is also shown on Line 1 at the top of each page of the Financial and Appropriation Record.

Additional Appropriations. All approved additional appropriations are to be noted on Line 1, added to the original appropriation, and the total amount carried forward to Line 1 of the next page.

Encumbrances. Appropriations that are carried forward due to encumbrances from the previous year should be added to the succeeding year's appropriations. The disbursements charged to the appropriations of the previous year should be identified as such on the succeeding year's ledger sheets.

Appropriation Transfers by Board Resolution. If within one of the major classifications one or more of the detail account appropriation balances becomes exhausted, then one or more of the detail account appropriation balances within that same major classification may be decreased and transferred to the detail account or accounts which have become exhausted, (with the exception of transfers to "Transfer to Library Improvement Reserve Fund"). A resolution of the library board is necessary to effectuate this transfer. However, this transfer is not required to be approved by the Department of Local Government Finance.

If the library board determines that a transfer of funds from one major classification to another is necessary, that transfer may be accomplished by resolution of the board, with the exception of the Library Improvement Reserve Fund and the unanticipated revenue. Upon such action, the appropriation balances of the affected classifications may be decreased and increased as specified in the resolution. Approval of the Department of Local Government Finance is not required.

Column Usage. The "A" columns provide for a control: "A-1" receipts - all funds, "A-2" disbursements - all funds, and "A-3" balance - All funds.

The "B" columns provide for all transactions in the Library Operating Fund "B-1" receipts, "B-2" disbursements, and "B-3" balance. The "C" columns provide for all transactions in the Library Improvement Reserve Fund; the "D" columns for the Bond and Interest Redemption Fund; the "E" and "F" columns for other funds as needed; the "G" columns provide for employee Payroll Deductions: "G-1" receipts of federal withholding tax deductions, "G-2" receipts of O.A.S.I. or Social Security deductions, "G-3" receipts of state withholding tax deductions, "G-4" receipts of county withholding tax, "G-5" receipts of P.E.R.F. withholdings, and "G-6" receipts of group insurance withholdings. Columns "G-7" and "G-8" may be used for other payroll deductions as needed.

Additional inserts, Library Form No. 1C, may be added as are necessary. Each insert provides for four funds, columns "H", "I", "J", and "K".

The Library Operating Fund Appropriation Columns as shown on the Financial and

Appropriation Record are used in making the distribution of disbursements and charging the same to the proper appropriation.

In the Library Improvement Reserve Fund column "Appropriations Capital Expenditures," all disbursements from said fund are to be charged to this appropriation. Investments from Library Improvement Fund should be entered in the "Library Improvement Fund Investments" column.

The "Bond and Interest Redemption Fund" appropriation columns are to be used for all disbursements from said fund for bond principal and interest.

Record of Receipts and Disbursements. Receipts and Disbursements should be posted as follows:

Receipts. Each receipt is to be posted in column A-1 and also in the receipt column of the appropriate fund.

Refunds. Refunds from erroneous or excessive disbursements or from the return of an item should be entered in columns A-1 and B-1, and added to the appropriation line of the proper appropriation column. No additional appropriation is needed if the refund is from a disbursement made during the current budget year. However, if the refund is from a disbursement of a prior year, the refund must be placed in miscellaneous receipts and appropriated before use. Refunds of moneys improperly or erroneously received by the library, such as an overpayment of a fine, may be paid without appropriation.

Rebates. Rebates on purchases should be entered in columns A-1 and B-1, and shown as a miscellaneous receipt. An additional appropriation will be required before the funds may be used by the library.

Voided Checks. Voided checks, if not replaced, should be entered in columns A-1 and B-1 and added to the appropriation line of the proper appropriation column.

Insurance Claim Proceeds. Receipts from insurance claims may be appropriated by the Library Treasurer and should be entered in columns A-1 and B-1, and added to the appropriation line of the proper appropriation column. No additional appropriation is needed if the insurance claim payment is used to replace the damaged items within a twelve month period from the date the check is received. [IC 6-1.1-18-7]

Rental Income. Rental income should be entered in columns A-1 and B-1, and shown as a miscellaneous receipt. An additional appropriation will be required before the funds may be used by the library. Rental income may not be added to the appropriation covering the expenses of the rental property.

General Disbursements. Each disbursement is to be posted in column A-2 and also the disbursement column of the appropriate fund. Each disbursement is also posted to the proper appropriation column of the Library Financial and Appropriation Record.

Disbursements for Personal Services. Disbursements for personal services should be posted in the following manner.

1. Post the net amount of the warrant to column A-2, the gross amount to column B-2, the gross amount (gross salary before payroll deductions) to the proper appropriation column, and the payroll deductions in columns G-1, G-2, G-3, etc.
2. Disbursements to the Internal Revenue Service or the bank designated to receive with-holding tax, Indiana State Department of Revenue, Public Employees' Retirement Fund and other parties or agencies authorized are to be posted in Columns A-2 and G-1 through G-8 as appropriate. G column disbursements should be indicated by the use of parenthesis to distinguish them from receipts.

The employer's (library's) contribution for retirement or O.A.S.I. is to be paid from Library Operating Fund and charged to Personal Services, Employee Benefits, unless the related salaries are not paid from the Library Operating Fund.

Payrolls are to be prepared on General Form No. 99 - Payroll Schedule and Voucher.

The record of each employee's compensation and payroll deductions is to be kept on General Form No. 99B.

The days or hours worked by each employee is to be recorded on General Form No. 99A - Employee's Service Record. This form is also used to account for vacation leave, sick leave and other leave as authorized by the Library Board of Trustees.

Monthly Totaling and Balancing. The Library Financial and Appropriation Record should be totaled and balanced at the end of each page and a new ledger sheet should be opened at the beginning of each month. The proofs of posting to be made at the end of each page are:

1. The sum total of amounts in column B-1, C-1, D-1, E-1, F-1; F-2; G-1, H-1, I-1, J-1, and K-1, should equal the total amount in column A-1;
2. The sum total of amounts in columns B-2, C-2, D-2, E-2, G-2, H-2, I-2, J-2, and K-2, should equal the sum totals in amounts in columns A-2 and balances in G-1 through 8.
3. The sum totals of amounts B-3, C-3, D-3, E-3, F-3;G balances, H-3, I-3, J-3, and K-3 (other than investments from total monies on deposit) should equal the total amount in column A-3. This amount should also be equal to the bank balance plus deposits in transit, less any outstanding warrants, plus petty cash and investments from total monies on deposit.
4. The sum total of amounts charged to appropriations in the Library Operating Fund should equal the total amount in column B-2.
5. The sum total of amounts charged to Appropriations Capital Expenditures column should equal the total amount in Column C-2. (Except for purchase of investments and temporary loans.)
6. The sum total of amounts charged to Bond and Interest Appropriation Columns should equal the total amount in column D-2. (Except for purchase of investments and temporary loans.)
7. At the close of each month, the total of "G-1" (Federal Withholding Tax) must be paid by warrant to the bank designated to receive tax, or a warrant for this amount must be written to the Internal Revenue Service. The amount of this warrant is posted to "A-2" and "G-1" columns only. Therefore, at the close of each month there will be no balance in the "G-1" column.
8. The "G-2" column (O.A.S.I.) should be closed out monthly when the payment of Social Security is made to the designated bank or Internal Revenue Service.
   The total amount of this warrant, which includes both the employee's deductions and the employer's (library's) contribution would be posted to "A-2" column. The employer's contribution for O.A.S.I. is to be paid from and posted to "B-2" column, Library Operating Fund and charged to Personal Service, Employee Benefits.
   The amount of this warrant which represents employee's payroll deductions should be posted to column "G-2" in parenthesis. Therefore, there would be no balance in the "G-2" columns at the end of each month.
   The same warrant may be used for federal withholding as O.A.S.I. when depositing with the bank designated to receive the taxes or in payment to the Internal Revenue Service.
9. The "G-3" column (State Withholding Tax) should be closed out monthly when the report and payment of State tax withheld is made to the Indiana Department of Revenue.
10. The "G-4" column (County Withholding Tax) should be closed out monthly when the report and payments are due at the designated agency for which the deductions were made.
11. The "G-5" column (PERF) should be closed out quarterly when the report and payment of Retirement is made to the Public Employees' Retirement Fund.
    Note: All "G" columns should be closed out on December 31st of each year. At the close of all other months, there may be a balance in some "G" columns which must be used in proving the Financial and Appropriation Record at the close of each month.

Alternate Forms

In lieu of the Library Financial and Appropriation Record, libraries also have the option of using Cities and Towns Form Nos. 208, 209 and 209A. Larger libraries which need to use more than one insert sheet in the Library Financial and Appropriation Record may wish to consider using cities and towns forms. Any libraries wishing to use these forms may do so by passing a board resolution to that effect. The following forms would be used in place of Library Form Nos. 1, 1A, 1B, and 1C.

City and Town Form No. 208, Ledger of Receipts, Disbursements and Balances. A separate ledger sheet is used for each fund. All receipts and disbursements to a particular fund are entered in order by date. This form is similar in use to column B-1, B-2 and B-3 for the Library Operating Fund on Library Form No. 1.

Warrants may be posted individually or grouped and posted in total if written on the same date and are in numerical sequence.

The subtraction of total disbursements of a fund from the sum of the total receipts and the cash balance at the beginning of a particular period should produce the cash balance of that fund. This calculation is to be made monthly and reconciled to bank account balances.

Total disbursements for the month should also be reconciled with total disbursements as shown by the Ledger of Appropriations, Encumbrances, Disbursements and Balances, Form No. 209.

City and Town Form No. 209 - Ledger of Appropriations, Encumbrances, Disbursements and Balances. A separate ledger sheet should be used for each major budget category (Personal Services, Supplies, Other Services and Charges, and Capital Outlays). Otherwise a separate ledger sheet for each budget classification as per Library Budget Form No. 4 should be used. Columns are provided for listings of purchase orders and warrants.

The full amount of the original annual appropriation plus any additional appropriations is entered in the "Appropriation" column. The balance in the "Appropriation Balance" column represents the amount of the appropriation not disbursed.

This form may be used with or without purchase orders. If purchase orders are used the last amount in the "Balance" column, under purchase orders, represents the total of the unpaid or outstanding purchase orders. To determine the unencumbered balances, the final amount in this column is subtracted from the final amount in the "Appropriation Balance" column.

The total disbursements for the month should be reconciled with the total monthly disbursements as shown by the Ledger of Receipts, Disbursements and Balances, Form No. 208.

City and Town Form No. 209A - Detailed Ledger of Disbursements (Optional Form). For those Libraries wishing to account in greater detail for their disbursements, optional Form No. 209A may be used. The detail per Budget Form No. 4 should be entered on this form. This form is used as a supplement form with City and Town Form No. 209 to provide a detailed breakdown of the disbursement posted to Form No. 209. The form consists of a column for date, warrant number, and nine columns with blank headings in which to enter the minor categories of each major budget category.

The State Board of Accounts has prescribed the following warrant form for use by all public libraries operating under the provisions of IC 36-12. Each warrant should be signed by the treasurer of the library board.

Printing specifications for this form are as follows:

• this form is to be printed and print ruled in duplicate as per attached mimeographed copy on substance 20 No. 1 bond paper, any color, size of each copy approximately 3 5/16 by 8 inches, 5 warrants per sheet, original and duplicate prenumbered, original perforated between warrant, sheet to be folded and perforated between original and duplicate copies, and duplicate punched for post binder.
• The above form may be purchased from public printing suppliers in Indiana. At the option of the purchaser the name of the fund, name of public library, name of public depository and bank symbol, and number of the depository may be overprinted on the above forms. Payroll warrants, with perforated stubs on which to enter amounts withheld, may also be ordered.

This form has been prescribed to provide a method of recording the total daily receipts of a public library and each of its branches, if any. As money is received during a day it should be segregated by notations classifying the receipts into the three categories shown on the prescribed form. At the end of the day the totals should be entered on the form.

It is recommended that the library board establish a cash change fund in accordance with IC 36-1-8-2 for each library and each branch to be kept on hand. Each branch library is to maintain the prescribed form.

The first column of the form, "Balance Beginning of Day," will show the balance on hand at the beginning of each day, including the cash change fund. To this balance will be added all daily receipts as indicated in the next three columns. Then, deposits will be deducted and the remainder entered in the last column, "Balance End of Day," which should accurately reflect the actual cash on hand. The cash change fund should not be deposited.

Receipts should be deposited daily pursuant to IC 5-13-6-1. The receipts should be posted to the Financial and Appropriation Record each time a deposit is made; thus, the receipts recorded on Form 3 for the month should equal the receipts entered on the Financial and Appropriation Record.

This form is to be reproduced on white paper, 8 ½" X 11", padded and punched in the left margin for a ring binder.

This form is designed to be used by libraries in processing funds due to vendors from the library and is to be presented to the board for allowance.

IC 36-12-3-16 provides that "each payment of expenses lawfully incurred for library purposes must be supported by a fully itemized invoice or other documentation. The library director must certify to the library board before payment that each claim for payment is true and correct. The certification must be on a form prescribed by the State Board of Accounts." To satisfy the certification requirements, the library director may either sign each accounts payable voucher individually or sign in the area designated on the Accounts Payable Voucher Register, General Form 364.

The Accounts Payable voucher should be properly filled out and signed by the library director before presentation to the board for approval. A majority of the library board must approve each payment. The board may choose one of three methods to record their approval:

1. Signatures of a majority of the board on each Accounts Payable Voucher.
2. Signatures of a majority of the board on General Form No. 364 (Accounts Payable Voucher Register) listing each payment to be made.
3. Inclusion of a list of the approved payments in the board minutes, which are then signed by a majority of the board.

After Accounts Payable Vouchers have been completely processed, allowed, and warrants issued, they should be filed numerically and maintained with the applicable Accounts Payable Voucher Register, General Form 364.

This form provides columns and space for all data required in connection with the issuance of either general obligation or revenue bonds.

When bonds and interest coupons are paid, they should be cancelled and the date of payment entered in the bond register. This will enable the treasurer to determine the total amount of the outstanding bonds and interest coupons at any time.

If any bond has more than 20 coupons attached, the space on the right, headed, "Memoranda" may be cut off, thus forming a short leaf, and coupons spread on next page, beginning with Coupon No. 21 and continuing on, until all coupons are recorded. Additional short leafs may be used as necessary. The size of the bond register will be determined by the total amount of the bond issue

This form properly filled out may accompany any bid for public work and may be used as a guarantee of faithful performance in the case of the successful bidder if approved as such by the awarding body. [IC 36-1-12-14]

This form properly filled out and approved by the awarding body will be furnished by the successful bidder as a guarantee of faithful performance in connection with contract for public work. [IC 36-1-12-14]

This form provides for a bid or proposal in connection with the letting of contracts for public work such as construction, reconstruction, alteration or renovation in accordance with the statutes. [IC 36-1-12]

This form is used in conjunction with The Library Financial and Appropriate Record, Library Form No. 1, provision is made for certification of an unobligated balance being available in the appropriation from which purchase is to be made, in compliance with the law.

This will require the encumbering of appropriations for each order as it is issued.

It is necessary that all orders pass through the hands of the person responsible for appropriation accounting, even if purchasing is not centralized.

The original will be delivered to the vendor, the duplicate copy filed with the purchasing authority and the triplicate copy filed with the person responsible for appropriation accounting.

The purchase order number must appear on all invoices and claims or original order prepared by the vendor.

Provision is made on copies for certificate of the party receiving the merchandise. In case of centralized purchasing, a copy should be delivered to the department for execution of this certificate, to be signed and returned to the purchasing authority upon receipt of the merchandise.

Purchase orders issued on bids and contracts must be delivered to the vendor within thirty (30) days after acceptance by the board. [IC 5-22-18-5]

The original copy of a purchase order must be given to the vendor at the time of purchase.

The original purchase order issued to the vendor at the time the purchase is made must accompany the bill or invoice and accounts payable voucher to the department before payment is made, or the number thereof must be shown on the bill or invoice and accounts payable voucher.

An itemized accounts payable voucher covering the purchase must be filed with the department after delivery is made.

It will be observed that there is a sequence of time that must be followed. The order comes first, in the same manner as though an order was being made from a catalog. The person responsible for appropriation accounting must be advised of the order so that the fund will be encumbered and not obligated more than once. The bill or invoice and accounts payable voucher must be fully prepared, not just a statement of account.

It is to the advantage of the person responsible for appropriation accounting to know at all times what purchases have been entered into and how the appropriation ledger stands, for purposes of anticipating the year's needs.

This form is illustrated in The Appendix. Page A-27.

Completion of Form and Accounting for Funds

Certification that a sufficient unobligated appropriation balance is available to cover the purchase must be made on the purchase order form. This will require the encumbering of appropriations with each order as it is issued.

It is necessary that all purchase orders pass through the hands of the person responsible for appropriation accounting, even if purchasing is not be centralized.

The person receiving the merchandise or services must certify such on the purchase order form. In case of centralized purchasing, a copy should be delivered to the department for execution of this certificate and returned to the purchasing authority.

Use and Description

This form should be used for all payrolls. Form No. 99 is printed in two sizes, 8 ½" X 14" and 17" X 14". The smaller size contains space for 16 names. If more than 16 are regularly employed, the 17" X 14" size may be used.

Completion of Form

Each claim should be certified by the library director and the secretary of the library board in the appropriate sections on the back.

Approval by a majority of the library board is also required in the appropriate section unless an Accounts Payable Voucher Register, General Form 364, is signed by a majority of the library board.

Posting and Filing

Posting from this form will be to the Library Financial and Appropriation Record, Library Form 1, for the gross amount of pay and to the Employee’s Earnings Record, General Form 99B.

Payroll claims should be numbered with other claims and filed with other claims in warrant number order.

This form must be kept by each office or department for each employee in order to properly prepare Payroll Schedule and Voucher, General Form No. 99. It records the hours or days worked, sick leave, vacation and days lost. It may also be used to comply with the requirements of IC 5-11-9-4 regarding recording hours worked each day by an employee.

It is suggested that these be arranged alphabetically in a binder

This form is for the purpose of recording the compensation paid each employee and, at the same time, to record the various authorized deductions from such pay.

Provision is made for name and address of employee, social security number, rate of pay, gross pay, deductions for withholding tax and other items, and net amount paid. Provision is also made for quarterly totals and grand totals at the close of the calendar year.

All compensation paid to each employee shall be recorded on this form. An account will be carried for each employee regardless of whether or not tax or other deductions are made.

Posting to this record will be made from Payroll Schedule and Voucher, General Form No. 99.

The library director will make the necessary returns to the District Director of Internal Revenue and Indiana Department of Revenue from information recorded on these forms. Forms furnished by the Revenue Offices must be used for reporting this information.

At the close of the year or the last pay period of any employee whose service has been discontinued, the grand totals taken from this record will serve for issuing the earnings statements, Forms W-2 and WH-2 to the employee.

The total of the accumulations of each kind of deduction on all individual accounts should agree at all times with the amount set aside in each special fund.

It is suggested that these accounts be arranged alphabetically by calendar year.

This form must be prepared and maintained for all employees who are not exempt from minimum wage and overtime provisions of the Fair Labor Standards Act (FLSA), are not on a fixed work schedule, and are paid weekly.

Use

This form is designed to serve as a claim in all cases where the law provides for the publication of notices in any newspaper. It is also to be used as a medium for posting to the proper appropriation accounts.

Description

Provision has been made on the inside of the form to show: governmental unit; name and address of publisher; line count; Computation of charges; date for computing cost; certification of publisher; publisher's affidavit and attached copy of advertisement.

Space on the outside of the form has been provided for entering: claim no.; warrant or check No.; name of publisher; amount and general budget classification; verification of disbursing officer and certification by the library director.

Filing

After the claim has been completely processed, allowed, the warrant issued and all postings recorded, it should be filed numerically by warrant number with other claims pertaining to the same period.

Permanent Record

The form is a continuous record which should not be destroyed or disposed of otherwise. Even though a unit may finally sell all its investments, it could in subsequent months, or years, acquire other investments, and this record would thus be continued.

Lower Margin Lines

1. Remarks. The lines at the lower margin are provided for the purpose of making any explanations that may be required for any policy or policies listed on that ledger sheet. Enter the corresponding reference symbol to identify the policy to which the explanation applies and then briefly explain the facts.

Explanations should be made under the following circumstances:

1. policies canceled,
2. coverage changed,
3. additional premiums,
4. premium deductions,
5. premium refunds, and
6. other modifications or alterations of policies.

Adjustments

Adjustments will be necessary to correct the unencumbered balance in cases where the estimated expenditures shown on the purchase order is different from the actual cost shown on the claim filed for allowance and payment. If the payment is less than the purchase order, the difference is entered in the credit column and the balance extended under the "Encumbrance" section. If payment is more than the amount of the original purchase order, the difference is entered in the debit column and the balance extended under "Encumbrance" section. In either case, reference is made to the original purchase order number.

Balances

The "Balance Column" under encumbrance will show the unencumbered appropriation. The "Balance Sheet" under disbursements will show the balance of the appropriation unexpended. The difference between the unencumbered balance and the unexpended balance will represent the unpaid purchase orders.

This form shall be prepared by, or filed with, the disbursing officer together with the supporting accounts payable vouchers. All such documents shall be carefully preserved by the disbursing officer as a part of the official records of the office. It will be optional with each governing board having jurisdiction over the allowance of accounts payable vouchers as to whether to sign each voucher or to sign only General Form No. 364, Accounts Payable Voucher Register. [IC 5-11-10-2 (c)]

In lieu of signing each accounts payable voucher, the library director may certify to the correctness of each claim by signing in the designated area on the Accounts Payable Voucher Register.

Where a mechanized or computerized accounting system is in use, it is permissible to prepare the Accounts Payable Voucher Register on an alternate form. The alternate form must contain the same headings and information shown on the prescribed form and, if accounts payable vouchers are not individually allowed, the form must contain the certification and signatures of the governing body as shown on the prescribed form.

This form is required to account for all capital assets owned by the library. It is used to record additions and deletions in capital assets owned by the library. A complete inventory should be taken at least once every two (2) years for good internal control and for verifying account balances carried in the accounting records.

One of the library treasurer's responsibilities is to make financial reports of library funds and present the reports to the library board each month.

There is no prescribed form for the required monthly financial report. It is suggested that such a report include two types of information:

1. A report by fund showing the previous month's ending balance, total receipts for the month, total disbursements for the month, and the balances at the end of the month.
2. A report by budget classification showing the currently approved appropriations, disbursements in each appropriation to date, and the appropriation balance.

1. sent by certified mail;
2. personally delivered; or
3. sent in accordance with procedure in the contract.

4. Contracts entered into before September 1, 1983.
5. Claims, contracts, or projects that are to be paid exclusively with federal funds.

The decision on whether the number of items to be signed justifies the use of a rubber stamp or other device for affixing a signature must be made by each public official responsible for signing warrants, claims, and other official documents.

A rubber stamp or other signing device should be used only under the personal direction of the public official and should be properly safeguarded when not in use since each official is responsible for his or her own signature.

The decision on whether the number of items to be signed justifies the use of a rubber stamp or other device for affixing a signature must be made by each public official responsible for signing warrants, claims, and other official documents.

A rubber stamp or other signing device should be used only under the personal direction of the public official and should be properly safeguarded when not in use since each official is responsible for his or her own signature.

The library board may permit any of its officers or employees having a duty to collect cash revenues to establish a cash change fund. Such a fund must be established by a warrant drawn on the appropriate fund in favor of the officer or employee, in an amount determined by the library board, without need for appropriation to be made for it.

The officer or employee who establishes a cash change fund shall convert the warrant to cash, shall use it to make change when collecting cash revenues, and shall account for it in the same manner as is required for other funds of the library.

The library board shall require the entire cash change fund to be returned to the appropriate fund whenever there is a change in the custodian of the fund or if the fund is no longer needed. [IC 36-1-8-2]

Employees of the political subdivisions of the state may be granted a vacation with pay, sick leave, paid holidays, and other similar benefits by ordinance of the legislative body of a county, city, town, township, or controlling board of a municipally owned utility, board of directors or regents of a cemetery, or board of trustees of any library district.

Payment of vacation benefits so granted may be made in advance of any vacation taken by such an employee. [IC 5-10-6-1]

A library may provide programs of group insurance for its employees and retired employees. A library may exclude part-time employees and persons who provide services to the library under contract from such group insurance programs. A library may provide programs of group insurance through either or both of the following methods:

1. By purchasing policies of group insurance.
2. By establishing self-insurance programs.
3. By electing to participate in the local unit group of local units that offer the state employee health plan under IC 5-10-8-6.6.

A library may pay a part of the cost of group insurance, but shall pay a part of group life insurance for its employees. [IC 5-10-8-2.6(c)]

An insurance contract for library employees may not be canceled by the library during the policy term of the contract. [IC 5-10-8-2.6(d)]

IC 5-10-8-2.6 also requires group health insurance to be made available to retired employees and their spouses retiring after June 30, 1986 who are fifty-five (55) years of age who are not eligible for Medicare coverage. A library may require the retired employee to pay both the employer's and employee's premiums for such coverage.

IC 5-10-8-5 allows two (2) or more local public employers to establish a common or unified plan of group insurance for their employees and retired employees. Such plan shall be affected through a trust, agency or other local arrangement with careful accounting and fiscal responsibility.

IC 5-15-6-3 states in part: ". . . 'original records' includes the optical image of a check.... "

The State Board of Accounts is of the audit position both sides of a check are part of the original record. Therefore, both sides of an "optical imaged check" should be available for public inspection and audit. Encoding, printing and bank certification should exist to ascertain that the back side of a check is part of a particular check; i.e., endorsements should belong to the front side of a check presented.

that is owed to the library.

A library board:

1. shall determine the costs of collecting money or library property, and
2. may add the costs of collection, including reasonable attorney’s fees, to money or library property that is owed and collected under this section.

A library board or the library board’s agent that collects money shall deposit the money, less the costs of collection, in the account required by law. A person designated by the library board may collect money from a person for the library only if the amount to be collected from the person is more than ten dollars ($10).

A library board may compromise claims made against the library. [IC 36-12-3-18]