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C o u n t y o f F a i r f a x , V i r g i n i a
To protect and enrich the quality of life for the people, neighborhoods and diverse comm unities of Fairfax County
January
13,
2015
Friends of the
Fairfax
County Public
Library
Dear Friends'
Groups,
Thanks so much for the work you
do
to
support our
Fairfax County Public Library system. As
you
know,
the
Friends
of
the
Library
groups
were created to support, improve and promote the
library. Each
group operates under a Memorandum of Understanding with
the
Library Board
of Trustees and
is
required to maintain financial
records
in compliance with the group's by
laws and articles
of
incorporation. A sample copy
of
a
Memorandum
of
Understanding is
attached
to
this letter, as
well
as a copy of the
Board
Matter requesting this
review.
By way
of introduction,
I
am
Jim
Shelton,
the
newly appointed Auditor of
the
Board
for the
County of Fairfax,
Virginia.
My
position
is
different
from the Internal Audit
Office,
which
reports directly to the County
Executive
and conducts performance audits and management
advisory projects covering
operational,
financial, and information technology areas.
My office
was
created to
provide
the
Board of Supervisors, working under
the
guidance and direction
of
the Board
of
Supervisors' Audit Committee, an independent means
for
determining the manner
in
which county policies, programs, and resources are being carried out. You can learn more
about my office and our work
by
going
to
http://www.fairfaxcountv.gov/boardauditor/
On
Tuesday
(2nd December
2014) the
County
of
Fairfax
Board
of
Supervisors
(BOS) added to
the Audit Committee's work plan a
review
of the fiscal reporting practices
and expenditures of
the Friends of the Library
groups
as well
as
the Fairfax
County Public
Library's Departmental
Gift
Funds. This
direction was
in
response to a request
from
a
Federation of
Citizens
Associations Resolution asking
for
an Audit of the Fairfax County Public Library's System
Gift
Fund.
This review includes an examination of
the
revenue generated by
the
sale of donated books, the
monetary
donations
the Friends groups
receive, and
any financial transactions
carried
out by
the Friends groups
and
the
Department
Gift
Fund. This will
allow
for an accurate accounting
of
funds
that flow into
the system and
the use
of
those
funds by the libraries.
Auditor of
the Board
Office
of Financial and
Program
Audit
12000 Government Center Pkwy., Suite 233
Fairfax,
VA 22035
Office: 703-324-4005
Fax:
703-324-3149
www.fairfaxcounty.gov
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January 13, 2015
Page 2
To facilitate this process,
I
have prepared
a
Control Self-Assessment (CSA)
to
be
completed by
the Friends groups and
the
Fairfax County Public Library staff. This CSA
is
designed to
be
a
collaborative
approach to gathering the needed
information.
Upon receipt of
your
responses,
this information will be collated and shared with the
Board
of Supervisors in the customary
reporting process
which is
public information.
If
you have
any questions
about this process or
need guidance
with completion of the form, please let me know and
I
would
be
glad
to
assist.
Your assistance
in returning the completed CSA byclose
of
business Monday, February
16,
2015 would be very
much
appreciated.
Again, if
you have
any clarifying queries
regarding
the questions in this CSA, please feel free
to contact me at 703.324.4005 by phone or Jim.Shelton@,fairfaxcounty.gov via email.
Thank you in advance for
your
assistance with this
process.
Kind Regards,
J11X1
X/
U1VLV11VX_JX
-AVA
Auditor of
the Board
Attachments
Cc:
Sharon Bulova, Chairman, At-Large
Fairfax County Board of Supervisors
Fairfax County Public Library Board of Trustees
Clayton
P. Medford, Chief of Staff, Chairman's Office, Fairfax County
David J.
Molchany, Deputy County Executive, Fairfax County
Edwin S. Clay, Director, Fairfax County
Public
Library
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M E M O R A N D U M O F U N D E R S T A N D I N G B E T W E E N T H E -
F R I E N D S O R G A N I Z A T I O N
A N D
T H E
B O A R D O F
T R U S T E E S , FAI RFAX
C O U N T Y
PU BL IC
L I B R A R Y
Purpose of
Friends
of the
Library
Organization:
' - . . -
The-Library Bo'ard
encourages
and supports;Friends of the
Library
organizations (FOL).
Friends of
the
Library are
civic-minded
men and women who know that
quality
library
service is
importanirto the'community^and^whcrorgafiizednto-groiips-te-support,
improve,
and promote the
library. Friends
are organized'with one or more of
the
-
'following objectives: ' ..
'
1.
To
increase
community
awareness
and
use
of
the
library;
.
.
2.
To work for
library legislation or
appropriations;
'
. ' .
3.
To
encourage gifts, endowments, arid,
memorials for-the
library;
'
4.
To
provide
direct financial assistance;
.
5.
To
raise
money and campaign
for
a
new building, renovation, or
expansion;
6. To sponsor
programs
designed to add to the cultural life
of
the community;'an.d
7.
To volunteer work in the library
on specific
projects designated by the Director.
Requirements:
'
.
. . .
' '
. -
1.
A H
'.Friends
of the- Library
groups shall conduct
their fiscal affairs through
non-profit,
non-stock 501(C)
3-tax
exempt corporations.-- . .
'
.
2 .
Each
FOL group shall
be
structured
through articles
of
incorporation
and
bylaws
.
. designed
to support, assist,
and
promote
the activities
of the
branch
or department.
3. Each
FOL groups shall have:
.
'
.
a. Astatement of purpose outlining its
program'activities
and related utilization of -
Library facilities,^ personnel, utilities and.
equipment;
and
'
.
-
b. Recognition
that
the Fairfax.County Public Library
endorses
a policy
of-Open
.
Meetings,
Open Records,
Affirmative
Action, and
its
Code of
Ethics,
and.expects
..
Friends
Groups
to understand, cooperate, and comply with such-policies.
4. Friends
gifts
to
the
system
will be
considered in accordance with the Library Boards'
Policy
M . Policy Regarding Gifts to and.Partnerships with the Library System,
5. FOL groups have the authority
to
sell discarded library materials in accordance with.
the State
Code.
'
.
.
'
6. FOL financial records will be
maintained
in
compliance
with
the
group's
by-laws
and
a r t i c l e s o f n c o r p o r a t i o n . ' .
:
-
.
.
7:
The Branch Manager
will
serve
as the
primary
representative
of the FairfaxCounty
Public Library
in
coordinating activities of
the
Friends of the
-
8. The
President of
the FOLwill
be
the
primary
liaison for
the
Friends.
-
Agreed to this
day of
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Board
Summary
-21-
December 2 2014
DAL:dal
ADDITIONAL
BOARD
MATTERS
24. LIBRARY COLLECTION.
GIFT
FUND. FRIENDS' FUNDS
(11:42
a.nO
Chairman Bulova relinquished the Chair to Yice-Chairman Gross and said that
recently,
Board Members were contacted
by
the Federation of Citizens
Associations regarding
the
inventory tracking practice and
fiscal
policies of
the
Fairfax County Public Library (FCPL).
She
shared
with
Board Members her
response to the inquiry.
Inventory Tracking airfax County Public Libraries conduct an annual
inventory that
reflects holdings
by
audience
and
item type.
She
attached to her
written Board Matter a
sample
page from the
2013 inventory.
FCPL staff can also provide daily records
of
check-ins, checkouts, transfers, new
items added, and items removed from
the
collection. Staff run regular reports
to
verify holdings
and
help identify items that are missing or
lost.
She attached
to
her
written Board Matter
a copy
of the Circulation Priority reports.
Staff also
regularly reviews material
that
has high circulation an d low activity to determine
its status.
She noted that the library systems in Montgomery and Prince William Counties,
and Falls Church and Alexandria Cities do not perform collection inventories but
the County does.
Financial
Policies
he
Federation
asked
about
the
accounting practices
of
three
separate
entities:
the
FCPL Departmental Gift
Fund, the
Fairfax Library
Foundation, and
the
Friends
of
the Library groups. Each follows different
practices as they are separate funds with separate p olicies.
The FCPL DepartmentalGift Fund is subject to stringent
fiscal
controls, as are all
departmental gift funds. The Department of Finance shares oversight
responsibility with the Office of Internal Audit which is charged with ensuring all
policies and procedures are followed, as well as ensuring agency compliance with
audit recommendations.
An
October 2013
Office of
Internal
Audit review
found
adequate controls over
the business
processes
reviewed
during
our audit.
The Fairfax Library Foundation is a separate 501(c)(3) and as such
is
required to
file taxes
and
is audited annually by
a
private
firm.
Audit reports
for the last three
years,
as
well as its fund management policies, can
be
found on
the
Foundation's
website www.FairfaxLibraryFoundation.org.
The Friends of the Library groups are also separate 501(c)(3) organizations and
are required to file regularly
with
the Internal Revenue Service (IRS). Friends
groups
hold book sales, solicit donations, and provide other support to their local
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Board Summary
-22-
December 2 2014
library branch. While the Friends groups have Memorandums of Understanding
(MOUs)
with
the Library Board of Trustees, it is not clear
whether
the Friends
groups are using
standard
reporting methods or
following
similar practices when
it
comes
to
supporting
their
local
branch.
Therefore, Chairman Bulova asked unanimous
consent
that
the
Board
direct
the
Office of Financial
and
Program
Audit to
add
to
its work plan a review of the
fiscal reporting practices
and
expenditures of
the
Friends
of
the Library groups as
well as the Departmental Gift Fund. This review should include an examination
of
the
revenue generated by the
sale
of donated books, the monetary donations
the
groups receive,
and any
other financial transactions carried
out
by
the
Friends
groups and the Departmental Gift
Fund.
Supervisor Smyth raised a question regarding the request and what it means for
the
Friends
groups in terms
of
providing the
information,
with
input from
David
Molchany,
Deputy
County
Executive.
Following discussion regarding the process for obtaining the information,
Supervisor Herrity
suggested
adding
subject
to Library
Board
approval
at
the
beginning of the request.
Supervisor Smyth
suggested
adding in conjunction with the Library Board.
Chairman Bulova
suggested adding
engaging
the
Library Board
of Trustees.
Following further discussion, Chairman Bulova moved that the Board direct the
Office of Financial
and
Program
Audit to add to
its
work plan a review
of the
fiscal
reporting practices
and
expenditures of
the
Friends
of
the
Library
groups
as
well as the Departmental Gift Fund. This review should include an examination
of the revenue generated
by
the sale of donated books,
the
monetary donations the
groups
receive, and
any
other financial transactions
carried out by
the
Friends
groups and the Departmental Gift Fund. Supervisor McKay seconded themotion.
Discussion ensued
about
reporting methods
to
the
Library Board
regarding this
issue, with input from Mr. Molchany. He added that the Library Board requested
information from the
Friends
groups and some complied and some did not.
Supervisor Hudgins noted
that
the
agreements with
the Friends groups
are
with
the
Library Board
of
Trustees and
it
has
the
right to
decide whether
to
continue
the agreement. Mr. Molchany noted that Edwin S. Clay, III, Library Director, is
responsible
for
working
with the Library
Board.
Discussion continued regarding:
Whether
this
issue has been discussed
with the Library
Board
Information that has been requested by the
Library
Board
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Board Summary -23- December 2 2014
A request
by the
Board
of Supervisors
to direct
the
Auditor to
the
Board to put
this
issue on the work plan to help
get
information
about
what happens to gifts that are donated to the libraries
Noting
that the
Board has
a
meeting
with the
Library Board
of
Trustees
in
January,
Supervisor Gross
suggested that it
would be
advisable
to broach this
issue with the Library Board in January.
Noting that the
next Audit
Committee meeting is scheduled for February,
Chairman Bulova said that this
motion
tasks the Auditor
to
the Board with
starting to reach out and gather information.
Additional discussion ensued with input from
Mr.
Molchany regarding the MOU
between the
Friends groups
and
the Library Board
and
what
it
requires.
The
question was
called
on the
motion
and
it CARRIED
by
a
recorded
vote
of
eight,
Supervisor Hudgins and Supervisor Smyth voting NAY.
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PRELIMINARY
DATA
REQUEST for
the FOL
Control
Self-Assessment
(CSA)
Donations:
1. Please
attach your 990 IRS Tax Returns for Year-End
2013, if
required and completed.
2. Please provide the total number of discarded or donated books to he FOL by the Fairfax
County Public
Library ( FCP L) ,
other
groups
or
individuals for
Year-End 2013. If
not
maintained
please note
N/A.
3. Please describe the
method
you used
for
the sale
of
donated
books,
for
example;
bulk,
subject matter, age,
condition or all of the
above.
Source of
Discarded
onated
Books
Counts
Matched to FriendsCounts
Yes/No
-
Differences
Total:
4. Please l is t a l l other sources of funds.
Sources
of Donated
Funds
Amounts @ Year
End
2013
a.
Please attach
a
copy of the last receipt
provided
to each
Source
of
Funds
Donated.
Transaction Tracking & Processing:
1.
Please provide
a
list of
software
utilized to record & track
funds
and make &
track
payments
to vendors,
for
example; excel spreadsheets, QuickBooks, manual tracking,
etc.
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Types of Software,
Ledgers
or
Manual Tracking:
Please provide
a
list of expenses
made
to
vendors for the last month
of Year
End
2013
in
the
table below.
In none, please denote N/A
in the
table.
Vendor s Names Items
Purchased Prices
2. Please inform if the
software
and/or
spreadsheets
are
protected
to
ensure they are
secure
and
they are
reviewed
regularly to ensure
the information
is
being calculated
accurately.
3. Please inform if
monies
received
and payments
made
are compared
to your tracking
tools.
I f
not please
state
N/A.
If reliance i s primarily on
manual
tracking
and
approval of
individual
receipts
and
payments please state.
Please
inform if the receipt
and
deposit of monies and
payments
are made by
someone
other than the receiver of funds or the
requestor; for example:
i.
The review,
approval
and sign-off of all monies de posited
is by
someone
other than the person
who
received it,
if
not please state N/A
i i . The review, approval and sign-off of all monies spent is by
someone
other
than the person who
requested it,
if
not
please state N/A.
4. Please inform if the
person
approving the
expense matches the
vendor's
invoices to
the
purchase
order and
the
goods
received
to ensure that the
service provided,
price, and
quantity are
correct. If process does
not
exist please state
N/A.
5. Please provide the reported
and
computed amounts of Gift Funds and Book
Sales
that
were sent
to the
F C P L for Year End
2013.
Reported Donated Gift
Funds
Calculated Gift Funds
Sent to the
F PL
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Total:
Reported Book
Sales
for Year End 2013
Calculated Book Sale Amounts to
the
F PL for
Year
End
2013
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PRELIMINARY DATA REQUEST for the
F PL
Control Self-Assessment (CSA)
Donations:
1.
Please provide
the
total number
of
discarded books
sent
to
the
Friends
of
the
Libraries
(FOLs)
by the
Fairfax
County Public
L i b ra ry
(F CPL)
for
Year-End
2013.
a.
Answer; FCPL does not track this number. Conversely,
we
track numbers
of
discards.
N/A indicated in applicable table.
2. Please
attach a
copy of the last receipt provided to FCPL for discarded books
sent
to the
FOL.
Discarded
Matched
to
Friends
Count: Yes/No
Differences
of
Access
Services
of
Burke
Centre
ofChantilly
of
olly Madison
of City
of
Fairfax
of George
Mason
of Centreville
of
Great Falls
of Herndon
of
John Marshall
of
Kings
Park
of
Kingstowne
of
Lorton
of
Martha Washington
of Oakton
of
Patrick
Henry
of
Pohick
of Reston
of Richard Byrd
of
Sherwood
of
Thomas
Jefferson
of
Tysons Pimmit
of
Woodrow
Wilson
of
Virginia Room
Totals:
i.
Answer: FC P L does
not
receive receipts . At present books are routed
to
FOL who
have requested them
via
formal notification
to
FCPL) .
1.
Please provide notifications in
the
form theyare requested.
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3. Please
l i s t al l sources
of funds.
Sources
of
Donated Funds
Amount
@ Year End
2013
Total:
a.
Please attach acopy of the last receipt provided
to
each
Source of Funds
Donated.
Revenue
Recognition:
1. Please indicate
the
process for
recording
book sale p roceeds and d onations.
Answer: Recorded in FOCUS.
i. Please provide location
and
access if needed.
2. Please inform if
you
match
the
funds received to the amount that has been recorded in
F O C U S ?
3. Please inform
if
the matching process i s being performed by
a
person different from the
person
collecting and depositing the monies? I f no,
then
please state N / A .
4. Please inform if
the
unmatched items were investigated and resolved. I f
not
performed
please state N/A.
Transaction
Tracking
&
Processing:
1. Please
provide a
l i s t of purchases
and
payments made
to
vendors for
the last
month of Year
E n d 2013 in
the
table
below. In
none,
please denote N/A
in
the table.
Vendor s
Names
Items
Purchased Payments
2. Please inform if the software
and/or
spreadsheets
are
protected
to
ensure they are secure
and they are reviewed
regularly
to ensure the information is
being
calculated accurately.
Answer:
These
are
on the
county
share drive.
i.
Please provide location and access
if needed.
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1. I f spending is in accordance with the
County of
Fairfax Procurement
Pol icy
and the MOU
if applicable please
state.
a. I f M O U is not
applicable
and
there
are
no covenants
restricting how
the
Gift Funds are
to
be
spent
please
state,
N/A.
3.
Please inform
if
monies
received and payments made are compared
to
your
tracking
tools.
If
not
please state N/A.
Please inform
if
the
receipt
and deposit of monies
and payments
are made by
someone
other
than the receiver of funds or the requestor; for example:
i. The review,
approval
and
sign-off of
a l l monies
deposited
is by someone
other
than
the
person
who
received it, if not
please state N/A
ii. The review,
approval
and
sign-off of
a l l monies spent is
by someone
other
than
the person who
requested
it, if not please state N /A .
4. Please inform
if
the person approving the expense matches the vendor's invoices to
the
purchase
order and
the
goods
received
to
ensure that
the
service provided,
price,
and
quantity are
correct.
I f
process does
not exist please state N/A.
5.
Please
provide the
reported
and computed amounts of
Gift
Funds
that
were sent
to
the
F CPL
for
Year
E n d 2013.
Funds
Donations Book
Sales
Combined
Computed Splits ent
to F PL
of Access
Services
of Burke Centre
of Chantilly
of Dolley Madison
of City of Fairfax
of George Mason
of Centreville
of
Great Falls
of
Fiemdon
of John
Marshall
of Kings Park
of
Kingstowne
of Lorton
of
Martha Washington
of Oakton
of
Patrick Fienry
of
Pohick
of
Reston
of Richard
Byrd
of Sherwood
of Thomas
Jefferson
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ofTysons Pimmit
ofWoodrow
Wilson
Virginia
Room
Totals:
Please provide
staff responsible
for
verifying the
50%/ 0% splits
of
Gif t Funds to
be
collected by FCPL.
Contact:
County Lib ra ry Gi f t Funds
Specific:
1. Please provide
the
accounting for
these
funds in
the
budget and the
financial
system
( F O C U S ) .
2. Please provide
the
location where the disbursements register for
these
funds
are
maintained
i n FOCUS.
3.
Please
inform
who
reviews
and
sign-offs
on
these
disbursements
or
i f
the
review
process
occurs
on
the individual invoice level.