Purpose of Audit

The purpose of our audit was to determine if Library/Museum officials provided adequate oversight of the Library/Museum’s financial activities for the period June 1, 2011 through April 26, 2013.

Background

The Pember Library and Museum is located in the Village of Granville. The Library/Museum is governed by a nine-member Board. The Library/Museum’s funding for the 2011-12 fiscal year totaled $165,950.

Key Findings

The Board has taken steps to provide oversight of the Library/Museum’s financial activities. An accounting firm prepares the accounting records, and the Executive Director provides the Board with financial reports.

• However, the Board did not adopt a budget for the fiscal years 2011-12 and 2012-13, as required by the by-laws, and did not monitor and comply with the stipulations in the Foundation Agreement regarding the maintenance of Foundation funds.
• Although the Foundation Agreement stipulates that the Library/Museum can only spend interest earned on Foundation funds, the Library/Museum violated this stipulation by spending $138,458 of principal.
• While the Board reviewed bills prior to payment, it allowed them to be paid late due to the lack of available cash.
• We found weak controls over cash receipts.

Key Recommendations

• Provide adequate oversight of the Library/Museum financial activities, including adopting and monitoring budgets, reviewing bank statements and reconciliations, and evaluating financial statements and cash flow forecasts.
• Comply with the Foundation Agreement and not use the principal of the Foundation investment account.
• Require a monthly cash flow statement to assess the amount of cash available to pay Library/Museum expenditures.
• Require that all receipts be supported with a manual press-numbered receipt.