Handbook for Library Trustees of New York State (2023 Edition)

Also view: The Public Library Treasurer: Their Role and Legal Responsibilities.

Though there have been recent efforts to clarify the role of the “Treasurer” in New York State public libraries, much confusion still exists.  This document is intended to assist public library boards in complying with the law, understanding “best practices” and adhering to established accounting standards in order to protect their public funds.

Please Note:  This document is for advisory purposes only and should not be considered legal or accounting advice. As always, consult with your Library attorney and independent auditor to determine the best policies and practices for your particular institution.
 

The Handbook for Library Trustees of New York State (2023 Edition) states:

“The office of Treasurer varies greatly, depending upon the library’s legal structure. School district and most special/consolidated legislative district libraries must appoint (hire) an independent Treasurer who is not a member of the Board. Under the provisions of Education Law § 259 (1) (a) this independent officer reports to the board and is responsible for the receipt and disbursement of tax monies after Board approval. 

Special/consolidated legislative district libraries should refer to their enabling legislation for clarification. In the case of school district libraries, the school district treasurer is required to act in this capacity unless the library board appoints its own Treasurer.

The Office of the State Comptroller has repeatedly opined that the doctrine of “incompatibility of office” applies to school district public, municipal and special/consolidated legislative district libraries (according to their enabling legislation). This is often applied to the appointment of a board member to the office of the Treasurer. In such cases, it is considered proper to appoint (hire) a paid Treasurer, independent of the Board, and appoint a trustee as the Board’s “Finance Officer” to oversee the regular audit of claims, chair the board budget committee, and otherwise serve in such a capacity.   

Municipal libraries that exercise their right under Education Law §259(1)(a) to request their tax appropriations be paid over to the library are strongly advised to appoint an independent Treasurer. In the case of municipal libraries where tax funds are held, and invoices are paid by the municipality, the Treasurer of the municipality serves in this capacity….

…Association libraries are not governed by these restrictions and may appoint a trustee as Treasurer to oversee the receipt and disbursement of library funds, report to the board and otherwise fulfill the duties of Treasurer. Volunteer Treasurers are expected to carry out these duties to the best of their abilities, as any reasonable citizen would expect, and to seek guidance and advice from professionals such as public library system staff and Certified Public Accountants.”

In recent audits that focused on the functions of the Treasurer, the Office of the State Comptroller noted:

A school district public library board of trustees has the power to appoint library officers and employees, including a library treasurer.  The treasurer is responsible for depositing and disbursing library funds, maintaining appropriate accounting records and providing a monthly treasurer’s report to the board. Because the typical duties of a library treasurer include the custody and disbursement of public funds, they carry with them a high degree of public trust. 

New York State Public Officers Law requires public officers to take and file an oath of office prior to performing their official duties. [Middle Country Public Library; 2016]

Bank reconciliations should be prepared by an employee or official who is independent[3] of the Library’s accounting functions and does not have access to cash. Where it is not possible to segregate these duties, a supervisor, or a designated Board member, should review accounting entries and bank reconciliations on a monthly basis. 

The Board should:

1. Ensure that bank reconciliations are performed by someone who is independent of the accounting functions.
2. Designate a Board member or Library official who is independent of the accounting function to review bank reconciliations.
3. Require the Treasurer to provide bank reconciliations and supporting documentation with the Treasurer’s monthly report to the Board.  

[Shelter Rock Public Library; 2015]
[3] An employee or official who is independent of the Library’s accounting functions does not have the ability to record receipts, disbursements or journal entries in the financial system.

What are the typical duties of a public library Treasurer?

The Treasurer is a separate officer of a public library corporation and is appointed by the Board of Trustees.  They are required to take an Oath of Office and perform their duties as defined in state law. Association Libraries are not covered by this law and may appoint a trustee to serve as Treasurer. Special/Consolidated Library Districts are advised to refer to their enabling legislation.

The public library Treasurer is responsible for depositing and disbursing library funds, maintaining appropriate accounting records and providing a monthly Treasurer’s report to the board. Typical duties include:

• Reconciliation of bank statements
• Preparation of Monthly Report to the Board of Receipts & Disbursements 
• Signing checks for payment after Board approval
• Oversight of Investments

What duties should the Treasurer not perform?

The Treasurer should be independent of the Library’s accounting functions and should not have the ability to record receipts, disbursements or journal entries in the financial system.

Association Libraries may allow a Library Trustee to perform the duties of a Treasurer. Public (i.e. Municipal, School District and some Special/Consolidated District) libraries must appoint an independent Treasurer to oversee the receipt and disbursement of the public library’s funds. Special/Consolidated Library Districts are advised to refer to their enabling legislation. 

Public library boards are still required to provide fiscal oversight of the Library. Though a trustee may not serve as Treasurer, it is still best practice to designate a board member as “Finance Officer” or such similar title, to thoroughly review all the library financial statements and expenditures prior to the Board meeting. At every Board meeting, all trustees should review the monthly financial reports and expenditures, including the warrants/vouchers. Remember, every member of the board has a fiduciary responsibility to the community.

Is a public library Board required to appoint a Treasurer?

School District Public Libraries: The Treasurer of the local school district is required to serve as Treasurer of the school district library.  However, the school district library is authorized by law to appoint their own Treasurer, should they desire. (Education Law §259.1a)

Special/Consolidated District Library: Generally Special/Consolidated District Libraries are required to appoint a Treasurer unless otherwise specified in their enabling legislation.

Municipal Library: In many cases the Treasurer of the municipality serves as the Library Treasurer.  This would be typical of a municipal Library where the municipality (Village, City, Town or County) maintains control of the expenditure of Library funds.  In cases where the municipality transfers control of such funds to the Library, the Board should appoint an independent Treasurer in order to fulfill its fiduciary responsibilities. (Office of the State Comptroller: Walworth-Seely Public Library – Board Oversight)

Can the Board appoint a staff member to the position of Treasurer?

Yes, however, in order to comply with the accounting principle of “segregation of incompatible duties”[1] such a staff member may not:

• Have access to cash
• Record receipts or disbursements
• Record journal entries in the financial system.

[1] For detailed explanation of this concept see: Office of the New York State Comptroller: The Practice of Internal Controls. 2010. p.3. 

What is the relationship between the Treasurer and the Director?

The Board appoints the Treasurer, as they do the Library Director.  As an “officer of the Board,” the Treasurer answers directly to the Board of Trustees and serves at their pleasure.  Therefore, to avoid conflict, it is “best practice” not to call on a library staff member for this function but to use a community member with expertise in finance and bookkeeping practices.  Generally, this is a paid position but there is no stipulation against using a community volunteer.  As a Board Officer, this position is not covered by the classified/competitive sections of New York State Civil Service Law.

Who typically serves as an independent Library Treasurer? How much work is involved?

Many municipalities and special districts in New York State require a separate Treasurer.  Quite often, libraries utilize the services of qualified individuals who serve in this capacity for their local fire district, water district, school district or other municipality.  The job generally requires a few hours two or three days per month.  The Treasurer must prepare a report of receipts and disbursements along with a statement of bank account reconciliations.  The Treasurer is not required to attend the Board meeting, but certainly may do so at the pleasure of the Board.

Can the Board appoint an independent accounting firm or CPA?

According to the Office of the State Comptroller (OSC) the Library Board has the power to appoint the Treasurer, who serves as an officer of the library corporation. Recent audits have stated that the Treasurer must be an individual appointed by the Board who takes an Oath of Office. (Office of the State Comptroller: Middle Country Public Library – Treasurer, p.4). Therefore, it appears that to comply with current OSC opinions, it would be necessary to appoint a specific member of the selected firm to serve in the capacity of Library Treasurer. 

Is an Oath of Office required for the Treasurer?

Yes.  The Treasurer is an Officer of the Library Corporation and is therefore required to take an Oath of Office.

Can anyone else sign checks?

Yes.  The Board may appoint an Assistant Treasurer. Please note: It is also common practice that two Board members are designated as check signers. Though we have found no specific guidance from OSC, this practice certainly complies with the principle of “segregation of incompatible duties”, unless, of course, the individual Trustees are the recipients of any such checks.

What should the Treasurer’s Report contain? 

The Treasurer’s monthly Report to the Library Board should show the reconciliation of all bank statements and report actual revenues and expenditures compared to the Library budget.  This summary report should not be confused with the detailed monthly line item financial report from the Library’s business office.  

The Treasurer prepares a monthly report on bank reconciliations and overall revenues and expenditures. Can the Library staff prepare the detailed monthly budget report?

Yes. Under the direction of the Library Director, the Library’s business staff should prepare a monthly report on the revenues and expenditures on a line item (detailed) basis as compared with the Library’s annual budget and year-to-date expenditures and encumbrances for Board review.  This should reconcile with the independent Treasurer’s summary report to the Board.  

Who should open the bank statements?

The Library Treasurer must have access to the original bank statements in order to prepare the monthly Board report.  This function may be delegated to staff or an independent accounting firm who do not have access to cash nor the ability to record receipts, disbursements or journal entries in the financial system (Office of the State Comptroller: Shelter Rock Public Library District – Bank Reconciliations, p.2). However, it is the Treasurer’s responsibility to oversee this process and prepare the Board report.

Must the Treasurer attend Board meetings?

No, unless required to do so by the Board.  However, a Treasurer’s Report must be presented at the meeting and reviewed by the Board.  

Is the treasurer a voting member of the board? 

No.

Must the Treasurer physically deposit, transfer and invest funds? Or may they “oversee” this function?

The Treasurer is “responsible” for such actions.  Though they may not personally perform such transactions, they must be aware of and oversee the process.  The principle of “segregation of incompatible duties” should always be considered in the handling of library assets.

Should the Treasurer be bonded?

Yes! As should other staff with the responsibility for handling public and private funds on behalf of the Library.

We are a very small library with limited staff and resources. We simply cannot afford to hire the additional staff to fully meet these requirements. What should we do?

As custodians of public funds, it is the library board’s responsibility to provide fiscal oversight of the Library.  Every reasonable effort should be made to comply with the guidelines provided by OSC. Where full compliance is not practical, the Board is advised to closely follow the accounting principles of “segregation of incompatible duties” in the handling and reporting of the Library’s assets. The advice of an independent Certified Public Accountant (CPA) should be sought to assist the Board in such a situation.