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Audit - 1956 '" THE FREE PUBLIC LIBRARY OF THE CITY OF SALINA Salina, Kansas REPORT ON EXAMINATION December 31, 1956 KENNEDY AND COE Certified Public Accountants Salina - Kansas 4 THE FREE PUBLIC LIBRARY OF THE CITY OF SALINA Salina, Kansas LIBRARIAN Jerome Cushman OFFICERS C. N. Hoffman, Jr. . . . . . . . . . . . . . . . . . . . . . . . . President Mrs. J. J. Donelan ..................... Vice-President Henry Eberhardt. . . . . . . . . . . . . . . . . . . . . . . . . . Treasurer Herschel Logan . . . . . . . . . . . . . . . . . . . . . . . . . . Secretary BOARD OF DIREcci'ClxS Mrs. Donald Amend C. N. Hoffman, Jr. Miss Irene Bjurstrom Herschel Logan Mrs. J. J. Donelan Jason Yordy Rev. James S. Elliott Ralph F. Exline EXHIB IT "A" Schedule 1 Schedule 2 THE FREE PUBLIC LIBRARY OF THE CITY OF SALINA Salina, Kansas INDEX COMMENTS. . . 0 0 0 . 0 0 0 . . . . . 0 . . . . . STATEMENT OF RECEIPTS, DISBURSEMENTS, AND BALANCES OF CASH - GENERAL FUND. . . . . . 0 0 . . 0 0 0 Treasurer's Cash Balance 0 . . 0 . . 0 . 0 0 0 0 0 . . 0 Treasurer's Unencumbered Cash Balance - General Fund. 0 TNTIRX ~ Page Number 1 to 4 5 to 6 7 8 ¡: ,I II I, 4 Ma y 1, 1957 To the Board of Directors, The Free Public Library of the City of Salina, Salina, Kansas. Gentlemen: We have examined the financial books and records of The Free Public Library of the City of Salina, Salina, Kansas, for the period January 1 to December 31, 1956, inclusive. The report of such examination is herewith submitted. SCOPE OF EXAMINATION The examination was performed in accordance with the requirements of the Minimum Standard Audit Program approved by the State Municipal Accounting Board. RECEIPTS, DISBURSEMENTS, AND BALANCES OF CASH All of the receipts and disbursements of The Free Public Library of the City of Salina for the year 1956 were cleared through the General Fund. A statement of such receipts, disbursements, and balances is shown under Exhibit "A". The library treasurer received a total of $54,359.02 in appropriations from the City of Salina during the year 1956. This amount was verified by the city clerk. Fines are assessed for failure to return books within the time limit and for damage to and loss of books and membership fees are collected from nonresidents. These collections are ordinarily in very small amounts and receipts are not issued for each collection. Fine and membership fee collections of $1,623.13 were remitted by the librarian to the library treasurer except that $40.00 Vi'as retained by the librarian. The amount retained increased the amount of cash on hand from $9.00 at the beginning of the year to $49.00 at December 31, 1956. Four remittances were made by the librarian to the treasurer during the year. In our previous reports we have recommended that such receipts be remitted within five days of the end of the month in which the collections were made. Checks which cleared through the banks during the period were examined as to date, payee, payee endorsement, signature, and bank cancellation. All pre-numbered warrant check forms used during the year were accounted for. Claim vouchers paid during the period were compared on a test basis with invoices and with the amounts of the warrant checks issued in payment thereof as recorded 1. - -c - "-c,"-- ~=~-="~"~"--- ==-~--~ "-- -- --"-'C""'-'--O--~~O~_U ~-=-=---~- --,=~,-==-~"==o- oc =-=="==~=-,~ C~-=~===~-.= ~ in the warrant register. The vouchers were examined for legality and propriety of expenditure. It was noted that several of the vouchers were not signed or approved and that Some expenditures were made for which no formal voucher was available. TREASURER r S CASH BALANCE The treasurer's bank and cash balances at December 31, 1956, are shown under Schedule I. The bank balances were reconciled to balances confirmed by the banks, and the cash On hand was counted. The treasurer did not maintain a record of disbursements as is required under G. S. 1955, SuPp. 12-1226. COMPLIANCE WITH CASH BASIS AND BUDGET LAWS Under the provisions of the Cash Basis Law (G. S. 1949, 10-1101 to 1122) it is unlawful to make payment out of or to create an indebtedness against any fund in excess of money actually on hand in the treasury to the credit of the fund. Be- cause of the inadequacy of the records it was impractical to determine the extent of noncompliance with the Cash Basis Law during the year, however, noncompliance was evident from an examination of the bank statements which showed that the bank account was overdrawn during the period July 19 to July 24, 1956. Under the provisions of the Budget Law (G. S. 1949, 79-2935 to 2937) it is unlaw- ful to make payment out of or to create an indebtedness against any fund in eXCC'Bf; of the amount provided for that fund by the annual budget. The following statement shows a comparison of actual revenue, expenditures, and balances with amounts anticipated by the budget: Unencumbered Fund Balance January 1, 1956 Amount (Over) or Under Actual Budget Budget $ 923.93 $ 728.98 ($194.95) Revenue Year 1956 From taxation From other sources 54,359.02 1 , 623 . 13 Unencumbered Fund Balance December 31, 1956 $ 457.33 54,359.02 1,500.00 (123.13) $56,588.00 ($318.08) 56,588.00 139.25 L ($457.33) Total $56,906.08 Expenditures (see computation below) 56,448.75 The above statement shows that there was compliance with the Budget Law. .. The following statement shows the computation of the expenditures of the General Fund for the year 1956: Cash Disbursements for the Year 1956 $56,842.67 Deduct - Indebtedness at December 31, 1955, paid and included in 1956 cash disbursements 436.37 $56,406.30 Add - Indebtedness created during 1956 which was not paid at December 31, 1956 42.45 Expenditures for Year 1956 $56.448.75 The amount of the indebtedness created during the year 1956, which was unpaid at December 31, 1956, was determined by examination of claim vouchers paid during the month of January, 1957. TREASURER'S UNENCUMBERED CASH BALANCE Schedule 2 shows the computation of the treasurer's unencumbered cash balance at December 31, 1956. INSURANCE AND FIDELITY BONDS A summary of insurance and fidelity bond coverage December 31, 1956, is as follows: Coverage Amount Property insured Building Building contents Museum contents Boiler Margaret Prescott Wise art collection Fidelity bond Henry H. Eber~ardt Fire and extended coverage* Fire and supplemental coverage* Fire and supplemental coverage Boiler explosion $76,500.00 40,000.00 2,000.00 5,000.00 Fire and supplemental coverage 1,556.00 4,000.00 * 80% co-insurance A bond for the treasurer in the amount specified by the library board is required under the provisions of G. S. 1955, Supp. 12-1226, such bond to be approved by the Board of City Commissioners. The minutes of the library board dated June 30, 1942, authorized a bond in the amount of $4,000.00 which is the amount of the bond previously posted by the treasurer. The treasurer's bond was approved by the Board of City Commissioners on June 28, 1943. The fidelity bond of the treasurer was renewed by a continuation certificate issued by the surety company. The effect of the continuation certificate is to extend the period to which the amount of the bond is applicable and does not provide $4,000.00 of coverage for each term. A bond is required by statute and it is apparently intended that a separate coverage of the full amount be provided for each term, and we are of the opinion that this requirement cannot be satisfied by a continuation certificate. GENERAL The purchase order and claim voucher system in use by the library does not meet the requirements of systems prescribed for use by Kansas Municipalities because a record is not maintained to show the amounts of indebtedness created. The minutes of the meetings of the board of directors were examined for matters pertaining to the audit. CERTIFICATE In our opinion, subject to the foregoing comments, the accompanying exhibit and related schedules fairly present the cash position of The Free Public Library of the City of Salina as of December 31, 1956, and the financial transactions for the period January 1 to December 31, 1956. Respectfully submitted, KENNEDY AND COE, (.,. ~ ~ Q, .oJ Licensed(Municipal Public in charge of and actively this audit. C.P.A. Accountant engaged on THE FREE PUBLIC LIBRARY OF THE CITY OF SALINA Salina, Kansas STATEMENT OF RECEIPTS, DISBURSEMENTS, AND BALANCES OF CASH - GENERAL FUND January 1 to December 31, 1956 Treasurer's Cash Balance January 1, 1956 Receipts Appropriations from the City of Salina Fines and memberships Total Disbursements Salaries and wages Librarian Cataloger Children's librarian Reference librarian Circulation librarian Assistant circulation librarian Custodian Bookkeeper Treasurer Student assistants Books Periodicals Bindings Records and pictures Heat, lights, and water Telephone BUilding and equipment maintenance Furniture and fixtures Office and library supplies Janitor supplies Traveling expense I Memberships and dues Audit ing Social security tax Insurance Post office box rent Safe deposit box rent Miscellaneous $4,800.00 1,500.00 2,880.00 3,180.00 3,180.00 1,800.00 3,120000 180.00 25.00 5,862.52 Sub-totals Carried Forward $54,359,,02 1 , 623 , 13 $26,527.52 10,082,8/+ 998.70 1,587.08 1,283.62 889.76 323.89 5,525.75 2,515.52 643.38 70.53 651.55 148.50 350.00 549.15 498.19 24.00 3.30 548.54 $53,221.82 .. Exhibit "A" $ 1,360.30 55,982.15 $57 , 342 .45 $57, 342 . 45 THE FREE PUBLIC LIBRARY OF THE CITY OF SALINA Salina, Kansas Exhib it "A" (Contd.) STATEMENT OF RECEIPTS, DISBURSEMENTS, AND BALANCES OF CASH - GENERAL FUND January 1 to December 31, 1956 Sub-totals Brought Forward Disbursements (Contd.) Museum expense Salaries and wages Curator emeritus Curator Assistants Supplies Museum objects Telephone Equipment Insurance Moving cost of liThe Smoky Hill Historical Museum" Misce llaneous $ 600.00 1,128000 708.15 Total Treasurer's Cash Balance December 31, 1956 --'=='~-="""====='"-" $53,:?2L82 2,436.15 145.13 223.04 88.35 126.09 10.00 375,18 216.91 $57, 342 .45 56, 842 . 67 g-=7:- 4 ~~" Z§, Ii -~-==~-=~"---=--=,------,-- --" --~~____II THE FREE PUBLIC LIBRARY OF THE CITY OF SALINA Salina, Kansas Schedule 1 TREASURER'S CASH BALANCE December 31, 1956 Cash in Bank National Bank of America, Salina, Kansas Farmers National Bank, Salina, Kansas Planters State Bank, Salina, Kansas $ 450.78 Cash on Hand Library change fund 49.00 Treasurer's Cash Balance December 31, 1956 $499.78 1/ 1-=- THE FREE PUBLIC LIBRARY OF THE CITY OF SALINA Salina, Kansas TREASURER'S UNENCUMBERED CASH BALANCE - GENERAL FUND December 31, 1956 Treasurer's Cash Balance December 31, 1956 Deduct - Outstanding indebtedness unpaid at December 31, 1956 Unencumbered Cash Balance December 31, 1956 $499.78 42 .45 -"-- $457.33 Schedule 2 Ii /1 II 8. 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