Our systems

We have two sets of financial accounting systems: Sierra (Innovative System) and the University system (aka Datatel, Colleague, or other). This is just a broad swipe at both for our purposes in understanding how they work and impact us.

The University system is for everyone on campus. The Finance Office sets up the structure and manages the activity within the system. While the system framework is a basic general ledger “line” item construct (each category has an individually named line), it is also “consolidated” in that we can move or transfer funds between many of the lines, providing we have good reason and context for doing so.

Sierra is internal for the University libraries. In addition to its work as a catalog, it allows us to track and pay our library-specific bills quite efficiently, to assign and track funding allocations, to gather data on format types, to gather data for surveys and reports, and so on. In some ways, Sierra is an artificial financial system: all bills are not represented in it and we can “fund” it however we like (e.g., the “funds” in a liaison area could be “made up of” different lines from the University system, for example: operating, capital, and endowment funds).

For the purposes of this work, forget about Sierra. Also, our budget work here applies only to the Christopher Center Library and does not include the Law Library.

University system considerations

Within the constructs of expenses and revenue, there are separate areas within each:

Expenses

Operating budget: Funds for this are provided by the University. These are usually ongoing and recurring expenses. At Valpo, these are represented by general ledger “lines” some which are University-wide, such as “Supplies—general” or “Equip >$5000” while others are library-specific, such as “Library supplies.”

Operating budget: sub-category: Electronic Subscriptions: Beginning FY20, the library has a new category within operating for the four lines that fund our subscription-based resources. These funds are the largest of the our budget, and in past years, made our actual operating budget look quite large. The funds are for subscriptions to databases, journals, newspapers, management/systems tools, and document delivery (interlibrary loan and related costs).

Capital budget: At Valpo, we have four lines that the University has chosen to “capitalize” meaning that materials purchased with funds from those lines add to the University’s worth. They are monographs, standing orders, periodicals, and preservation. The at-the-time understanding was that these are all print materials, held (owned) by the library. (If we decrease these lines, we negatively impact the University’s bottom line.)

Revenue

Endowments: Originating with donors, these funds are invested with hopes/plans for a return/earnings on that investment. There are often restrictions on endowments in that a donor designates funds’ use for a specific group, action, or resource.
A major portion of each fund, called the corpus, will never be available for spending—its investment should create earnings. In awarding the annual spending allocations from the earnings, the University uses a “smoothing” process to compute those amounts; this aids in keeping projected earnings from spiking or plummeting during stock market fluctuations. There is a 1% fee deducted from each annual spending allocation to pay for fund management. If a spending allocation isn’t completely gone at the end of one fiscal year, it is added to the available balance for the following year in addition to the new spending allocation. In regular times, this allows for building a balance for long-term projects.

Restricted Cash/Gifts: Much like endowments, these gifts are usually the result of specific donations, either one-time or regular installments, and may have restrictions on them as to who and how the funds can be spent. Unlike endowments, there is not a protected corpus: once the fund is spent out, unless it receives additional donations, it is closed out. There isn’t an annual interest earning either. In regular times, the ending balance from one fiscal year is the beginning balance for the next.