6010 Fiscal Policy Review
This fiscal policy should be reviewed biennially by the treasurer and the Finance Committee.
The fiscal year of the Illinois Library Association is July 1 to June 30. (Bylaws: Article IV, Section 1)
6018 External Auditors
The accounts of the association shall be audited annually by an auditor selected by the Executive Board. (Bylaws: Article XVIII, Section 1)
The annual audit report should be presented to the Finance Committee and the executive director by an audit firm. It will be the responsibility of the Finance Committee to present the audit report to the Executive Board.
The audit will be reviewed by the Finance Committee and any recommendations made to the Executive Board by the auditor will be addressed and appropriate action taken within the fiscal year. The audit report shall include a review of the treasurer's quarterly reports, shall check compliance with regulatory agency requirements, shall provide feedback as to the reliability of the system's internal control, and shall provide feedback as to the efficiency of the Executive Office in administering the affairs of the association.
The day-to-day records of the association shall use the accrual method of accounting.
6020 Chart of Accounts
The Chart of Accounts will be updated year to year as determined by ILA accountants.
6021 Books And Records To Be Maintained
The association will maintain the following books and records as required by the proper accounting practices and procedures, Illinois CPA Society, and Internal Revenue Service reporting requirements. At minimum, the accounting records will provide for the following on a monthly basis:
● Auditors’ report/Annual financial statements, Permanently
● Bank statements and deposit slips, 7 years
● Canceled checks:
- Fixed assets, Permanently
- Taxes (payroll related), 7 years
- Taxes (income), Permanently
- General, 7 years
- Payroll, 7 years
● Cash disbursements, Permanently
● Cash receipts journal, Permanently
● Chart of accounts, Permanently
● Deeds, mortgages, bills of sale, Permanently
● Electronic payment records, 7 years
● Employee expenses reports, 7 years
● Fixed asset record (invoices, canceled checks, depreciation schedules), Permanently
● Freight bills and bills of lading, 7 years
● General journal, Permanently
● General ledger, Permanently
● Inventory listings and tags, 7 years
● Invoices: sales to customers/credit memos, 7 years
● Patent/trademark and related papers, Permanently
● Payroll journal, 7 years
● Production and sales reports, 7 years
● Purchases, 7 years
● Purchase journal, Permanently
● Purchase orders, 7 years
● Sales or work orders, 7 years
● Subsidiary ledgers (accounts receivable, accounts payable, equipment), 7 years
● Time cards and daily time reports 7 years
● Training manuals, Permanently
● Trial balance – year end, Permanently
6030 Budget Development, Review, and Approval
The Finance Committee submits the budget for the following fiscal year for the Executive Board's approval at the last Executive Board meeting of the current fiscal year. In preparing the budget, the Finance Committee reviews the financial needs of the organization, taking into consideration the priorities of the association's strategic plan and the budget proposals submitted by forum managers, committee chairs, and the executive director.
The Finance Committee shall meet in sufficient time prior to the last Executive Board meeting of the current fiscal year in order to incorporate program and operational expenses into the framework of the preliminary budget of the following fiscal year.
All activities and events sponsored by the Illinois Library Association or groups within the association must be planned to have a positive net or break-even with the exception of Legislative Meet Ups and Awards, which may run at a loss. Activities that do not comply with this guideline must be approved by the Executive Board. Regarding the association's activity priorities, the Finance Committee must also formulate recommendations on the amount of nonrecoverable funds available to the forum managers and committee chairs each year.
Any unbudgeted expense in excess of $10,000 must be approved by the Executive Board upon recommendation by the Finance Committee.
6050 Bank Accounts
It is the association’s goal to maintain a cash balance in a readily accessible checking account, from which withdrawal may be made without penalty, sufficient to cover operational expenses in the immediate following two month period.
The remainder of all association assets shall be invested in government-insured, interest-bearing account as determined by the treasurer in consultation with the executive director.
All cash receipts shall be deposited in an association interest-bearing account and credited to the appropriate ledger account, which is reviewed by the executive director. Transfers to checking account shall be periodically requested by the ILA accountant in an amount sufficient to maintain a two month reserve. Such transfers must be approved and initiated by the executive director.
Checks drawn on the association checking account require the signature of the executive director or any officer of the association who has been approved in advance as a check signer. Checks or wire transfers in excess of $10,000 or made payable to the executive director (payroll checks excepted) require approval from an officer of the association prior to payment or transfer; such permission may be given electronically and must be included in the record of payment.
6051 Net Assets Without Donor Restrictions
It shall be the goal of the association to build and maintain net assets without donor restrictions, which, at the end of a given fiscal year, are equal to a minimum of fifty percent (50%) of the association’s total budgeted expenses for the following fiscal year. These monies shall constitute ILA’s operating reserve and shall be used to provide for temporary cash flow needs as well as to meet unexpected or emergency needs that severely impair the association’s ability to operate. On an annual basis, preferably in the first quarter of the fiscal year, the Finance Committee will assess the cash position and make a recommendation to transfer excess, if any, into the association's pool of long-term investments.
6061 Long-term Investment Policy
The Invested Funds of the Illinois Library Association, hereinafter referred to as the “Fund,” is an investment portfolio generated from the net surpluses of the association in prior years.
The Fund is held as an asset of the association under the authority of the Executive Board, hereinafter referred to as the “Board,” for the express purposes of providing investment income to support the programs and services of the association, to serve as a reserve source of funds in the unforeseen event of a financial catastrophe or deficit, and to build the assets of the association through reinvestment and capital appreciation.
The Fund shall not contain any assets that may be restricted as regards their investment or disposition. The Board is responsible for the implementation of and adherence to the policies and objectives of the Fund as set forth in this document.
The Board may retain professional investment management to manage the investments of the Fund and to provide advice and counsel in such matters.
- Rate of Return Objectives: The Fund is expected to achieve, over the measured period as defined in Paragraph B 4, a Total Rate of Return which exceeds the blended benchmark return for the asset allocation of the fund gross of investment advisory fees net of investment management fees. The Total Rate of Return is defined as all dividends and interest and all realized and unrealized gains and losses net of all investment manager.
- Cash Income Requirements: Since there are no immediate liquidity demands on the Fund, the source of investment return is not important. There is no preference for cash income as opposed to capital appreciation.
- Relative Performance: In addition to the Real Rate of Return objective stated above, total investment return for each fund over a market cycle is expected to be in the top half of the peer group and appropriate benchmark for each investment.
- Measured Period: For purposes of measuring a rate of return over a market cycle, the measured period shall be no less than three nor more than five calendar years.
- Fiduciary Standards: The assets of the Fund are to be invested and managed in a fashion that is consistent with generally accepted standards of fiduciary responsibility. The safeguards that would guide a prudent investment manager are to be strictly observed. All transactions utilizing assets of the Fund are to be undertaken for the sole benefit of the Fund and the association. All regulations specific to the State of Illinois will be observed.
- Permissible Investments: Assets of the Fund may be invested only in publicly-traded common and preferred stocks, exchange traded funds, convertible bonds, and fixed income securities, whether interest bearing or purchased at discount, including money-market instruments, subject to any restrictions hereinafter specified. In addition, mutual funds may be utilized for investment of fund assets. No other securities or instruments shall be presumed to be permissible investments without prior written approval of the Board.
- Asset Allocation: The long-term financial requirements of the association and preference of the Board imply a portfolio of investments, placing heavy emphasis on equity securities because of their superior total return characteristics over full market cycles. The Board recognizes, however, that there may be times when fixed income investments may also be an appropriate asset class for the Fund because of their superior current income and safety of principal characteristics. Therefore, the asset allocation policy for the Fund shall be as follows:
|
Asset Allocation
|
Maximum %
|
Minimum %
|
|
Equities (including short-term buying reserves)
|
90%
|
50%
|
|
Fixed Income
|
50%
|
10%
|
Under normal circumstances it is the Board’s intention to have the Fund substantially invested in equity securities.
a. Equity Investments: The Board has a strong preference for “no-load” mutual funds. The Board believes that the use of equity mutual funds and exchange traded funds will provide professional management, broad diversification, and relative cost efficiency considering the modest size of the Fund. The mutual funds selected, weighted by the proportion each investment bears to the total equity investment mix, shall reflect an overall risk and return profile similar to that of the S&P 500 Index.
b. Fixed Income Investments: The fixed income assets of the Fund shall be invested with Money Markets, CD’s, U.S. Government Bills, Notes and Bonds, Corporate Bonds rated A or better, Exchange Traded funds, and Bond Mutual funds.
D. Investment Management:
1. Investment Management: The Board, at its discretion, may retain the services of one or more professional, licensed, investment consultants to assist in the implementation of the Board’s stated investment policy. A copy of this policy shall be provided to the investment consultant(s). Any fees shall be set forth in a letter of agreement between the association and the consultant(s).
2. Operating Procedures: The executive director is hereby authorized to carry out and implement the directions of the Board with respect to the investment of Fund assets.
E. Review and Amendments
1. Review and Amendments: The Board, or its appointed committee, shall review this policy annually to determine if amendments or modifications are appropriate. Amendments, when approved, shall be communicated promptly to all interested parties.
2. Management Reporting: Any consultant(s) retained by the Board shall be present for one regular or special meeting of the Board each year. They will review the performance of the Fund within the context of the Investment Policy and Objectives and will make recommendations as to any desirable changes in the overall investment strategy. The consultant(s) will also make recommendations regarding any changes in investment policy deemed appropriate.
6063 Net Assets With Donor Restriction
The Association reports gifts of cash and other assets as net assets with donor restrictions if they are received with donor stipulations that limit the use of the donated assets. When a donor restriction expires, that is, when a stipulated time restriction ends or purpose restriction is accomplished, net assets with donor restrictions are reclassified to unrestricted net assets without donor restrictions. The internal financial statements of the association will report on the status of net assets with donor restrictions on a monthly basis, however, it is not anticipated that the underlying funds be segregated into separate bank accounts.
6065 Endowment Fund
- Establishment: The Executive Board (hereinafter “the Board”) of the Illinois Library Association (hereinafter “ILA”) has resolved to establish and maintain an Endowment Fund for Illinois libraries.
- Purpose: The purpose of the Endowment Fund is to support Illinois libraries and specifically, to be used to account for the receipt, investment, and the disposition of resources donated to ILA when such gifts are made with the stipulation that only the income earned from the investment of the donated assets may be spent.
- Use of Proceeds: The earnings of the Endowment Fund will be used by ILA for general operating purposes, and strategic priorities.
4. Donor Agreements: The Executive Committee is authorized to negotiate the specific terms of any agreement with a donor when advisable and when the donor wishes to make a restricted gift or a gift of appreciated property, or limit the use of the respective income. Such modified Donor Agreements must be in writing and are subject to the approval of the Board. Once such agreements are approved by the Board, the ILA executive director may execute the agreement on behalf of ILA.
5. General Terms: All information about donors or prospective donors, including names, beneficiaries, gift amounts, estate sizes, and so forth shall be kept strictly confidential by ILA and its authorized personnel unless permission is obtained from the donor to release such information. In order that proper and appropriate recognition and appreciation can be devoted to donors, ILA personnel may encourage donors to give such permission, but any donor limitations shall be honored.
Donors should be advised to seek legal counsel for all aspects of proposed gifts whether by devise, trust agreement, contract, or other legal document. The donor should consult with an attorney on matters relating to both estate planning and the tax liability of a gift.
The corpus of the endowment gifts must remain intact in perpetuity. Income from such gifts, the proceeds therefrom will be available for expenditure or reinvestment. The gifts in the Endowment Fund bear legal restrictions that the Board ordinarily cannot alter except as permitted by the donor, the Donor Agreement or applicable state or federal law.
If ILA receives appreciated stock as a gift for the Endowment Fund, the Board will sell the stock as soon as prudently possible, with the advice of the investment manager. The proceeds from the sale shall then be invested through the Endowment Fund.
Endowment gifts may be restricted or unrestricted as to the ultimate disposition of income earned. In order to restrict the use of funds earned from a gift, the donor must donate a minimum of $100,000. Each restricted gift of $100,000 and above will have a separate accounting entry. The corpus of each restricted fund will be readily identifiable, the income earned during each accounting period will be readily identified with the fund that produced it and the ultimate expenditure of such restricted income must be traceable.
6. Fund Management: The Endowment Fund is used in a legal and accounting sense to account for resources obtained from outside donors or grantors who have requested that their gift (corpus) be maintained in perpetuity, with only the earnings to be used for general operating purposes of ILA, or specific restricted purposes. Other ILA designated funds are not generally included within this group of funds for accounting purposes.
For financial management purposes, the Endowment Fund may be invested with and included in the Long-Term Investment (see Sec. 6061). If the Endowment Fund is integrated with other ILA funds, the Endowment Fund must be separately identifiable through generally accepted accounting practices and procedures. All earnings, realized/unrealized gains/losses, and investment expenses will be allocated between the endowment and non-endowment portion of long-term investments.
As the Endowment Fund will be included in the Long-Term Investments, the investment policy as included in Sec. 6061 will be used.
7. Spending Policy: On an annual basis, the ILA Finance Committee may recommend the Executive Board appropriate for expenditure an amount not to exceed 5% of the fair market value of endowment assets at the end of the previous fiscal year. The not to exceed appropriation may be withdrawn during the current fiscal year, or left to grow the fund.
8. Termination: If ILA joins in a federation with other state associations, the Endowment Fund shall be transferred with other ILA assets and liabilities to the new federation, but the Endowment Fund shall be restricted in its use and operation to be used for the same purpose or purposes as set forth in this policy and the applicable Donor Agreements. If ILA is disbanded or dissolved, the Endowment Fund shall be transferred to the 501(c)3 foundation of the American Library Association for perpetuation of the purposes for its establishment.
6076 Outside Funding
A forum manager, committee chair, or any group within the association must obtain executive director approval prior to applying for or seeking any special funding or grant from a federal, state, or other outside agency.
The executive director will notify the Executive Board of all requests for special funding or grants from any federal, state, or outside agency.
If ILA is to administer a grant and/or bear responsibility for its execution, a minimum of 10-30 percent of project funds (or other reasonable amount determined by the ILA executive director or designee) should be allocated for associated administrative tasks, included but not limited to time allocated to grant writing, reporting, budgeting, record-keeping, etc.
6080 General Reimbursement & Billing Policies
The association will reimburse only expenses that have been officially approved by the Executive Board through its annual budget. Members cannot incur a program expense without the prior approval of the executive director.
Committees and forums are allocated expense budgets by the Executive Board through the regular annual budget process. Committee chairs and forum managers will work with staff liaisons to ensure approved budgets are not exceeded. Proposed activities such as workshops, publications, or surveys that may incur expenses beyond the allocated budget will need to be approved by the executive director prior to beginning work on the activities.
Expenses for member travel on behalf of the association are approved by the Executive Board through the regular annual budget process. If approved, eligible expenses for reimbursement include hotel, mileage at the current IRS rate, air/bus/train fare, and a per diem for meals. If traveling by air, ILA members on association business normally fly coach class. In situations where air travel is not feasible or desirable, reimbursement will be made at comparable coach rates.
First priority for hotel complimentary rooms at the ILA Annual Conference will be given to the ILA president and conference co-chairs. The executive director may assign additional complimentary rooms at his or her discretion..
6082 Expenses for Meetings Held in Conjunction with Another Conference
The association will support the attendance of the ILA councilor to the ALA Midwinter Meeting and Annual Conference and of the ILA president to Library Legislative Day and the ALA Annual Conference. The Finance Committee will annually budget appropriate amounts for covering the expenses when the budget is prepared. Reimbursement for transportation, lodging, and food will be based on the ILA fiscal policy.
6090 Honoraria and Fees
Association members are not paid honoraria or fees for work performed for the association. Speaking engagements or workshop presentations are examples of service to the association in the same manner as assuming a leadership role within the Illinois Library Association or committee work.
Exceptions may be made in advance with the approval of the Executive Board. An exception may be granted if a member's contribution is clearly and specifically related to recognized professional expertise outside the field of libraries and librarianship and for which a fee is normally charged. If an association member's library is recognized on a national level and the expectation of a fee or honorarium is customary, an exception may also be approved by the Executive Board.
6091 Cash Awards
A monetary award of $600 or more to an association member requires the ILA Executive Office to submit a 1099-MISC tax form in the name of the award recipient.
Approved by the ILA Executive Board September 19, 2024
iREAD Summer Reading Programs
Latest Library JobLine Listings
