Doc 2 2008 Budget Development Process Audit of the OPL

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• Publié par: Uffi
• Nombre de lectures: 21
• Langue: English

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A C T I O N

Subject: 2008 Budget Development Process Audit of the Ottawa Public Library
(OPL)

Prepared by: Jan Harder
Chair, Ottawa Public Library Board

Prepared for: Ottawa Public Library Board

Meeting of: August 19, 2008

Date of preparation: August 13, 2008


RECOMMENDATION
That responses be developed to the recommendations within the Audit of the Budget
Development Process at the Ottawa Public Library (OPL) 2008 Report .

References

• Ottawa Public Library Board Minutes, February 11, 2008
• Letter from Auditor General, February 13, 2008
• d, Governance Committee Minutes, February 29, 2008
• Doc. 2 from the March 17, 2008 OPL Board Meeting: Governance Committee Report
• Ottawa Public Library Board Minutes, March 17, 2008

Background

th1. At its meeting of February 11 , the Library Board agreed to participate in a Governance Audit. At
the Board’s request, the City of Ottawa Auditor General, Alain Lalonde agreed to expand the
scope of the project to include an audit of not only governance practices, but also budget
development processes.
th2. On March 17 , the Library Board approved the Audit Questionnaire to be used in preparation for
the audit.
3. The Auditor General’s Office conducted interviews with current and former Board members and
key library and City staff in developing the audit.

Appendix

1. Audit of the Budget Development Process of the Ottawa Public Library (OPL) 2008 Report




Doc. 2 2008 Budget Development Process Audit August 19, 2008






Office of the Auditor General / Bureau du vérificateur général
AUDIT OF THE BUDGET DEVELOPMENT PROCESS AT THE
OTTAWA PUBLIC LIBRARY (OPL)
…
2008 Report


2008 Audit of the Budget Development Process at the Ottawa Public Library (OPL) Board


Table of Contents
EXECUTIVE SUMMARY........................................................................................................... i
1 INTRODUCTION............................................................................................................... 1
2 BACKGROUND ................................................................................................................. 1
3 AUDIT OBJECTIVES AND APPROACH ..................................................................... 4
4 OBSERVATIONS AND RECOMMENDATIONS ...................................................... 6
4.1 Goals, Objectives and Needs Assessment ............................................................. 7
4.2 Policy and Procedure Development........................................................................ 8
4.3 Budget Preparation and Review Processes ............................................................ 9
4.4 Budget Documentation............................................................................................ 12
4.5 Performance Monitoring ......................................................................................... 13
4.6 Budget and Related Adjustments.......................................................................... 14

5 CONCLUSION.................................................................................................................. 15
6 ACKNOWLEDGEMENT ................................................................................................ 15

2008 2008 Audit of the Budget Development Process at the Ottawa Public Library (OPL) Board


EXECUTIVE SUMMARY
Introduction
The Audit of the Budget Development Process at the Ottawa Public Library (OPL) was
requested by the OPL Board at its February 2008 Board meeting.
Background
The Ottawa Public Library (OPL) system consists of 33 branches: a Main branch, district
branches and different levels of community-based branches. The OPL is the largest
bilingual, French-English, library in North America. This is reflected in its collection,
programs and services. The Ottawa Public Library serves over 790,000 people in a
geographic area of 2,760 sq. km, 90% of which is rural.
The Ottawa Public Library (OPL) is governed by a Board, as required under the Public
Libraries Act (1990). The OPL Board is appointed by Council to provide oversight and
direction to the Ottawa Public Library. The Board is made up of 14 Members appointed
by Council, including 6 City Councillors and 8 members of the public. The role of the
Library Board is to provide oversight and ensure that the library remains accessible,
accountable and relevant to the needs of the citizens of Ottawa.
The Ottawa Public Library Board is also accountable to the provincial Minister of
Culture and a must submit an annual report to the Ministry.
The approved total net operating budget for the Ottawa Public Library in 2008 is $36
million, broken down as follows:
• Compensation and benefits – 74%
• Materials and services – 15%
• Program facility costs – 10%
Scope and Objectives
The objective of this audit was to assess the adequacy and effectiveness of the current
procedures used by the Ottawa Public Library (OPL) in preparing, reviewing, adopting
and monitoring its annual budget. The scope included the processes used in preparing
the 2008 budget. The audit did not question the specific funding decisions and
allocations as determined by the Ottawa Public Library.
Audit Criteria
Audit criteria for this audit were developed based upon the Government Finance
Officers Association’s Recommended Budget Practices – A Framework for Improved

2008 Page i 2008 Audit of the Budget Development Process at the Ottawa Public Library (OPL) Board

Local and State Government Budgeting. Current practices were assessed against a
number of specific criteria in the following categories:
1. Goals, Objectives and Needs Assessment
2. Policy and Procedure Development
3. Budget Preparation and Review Processes
4. Budget Documentation
5. Performance Monitoring
6. Budget and related Adjustments.
Summary of Key Findings
Overall, the current processes used at the Ottawa Public Library (OPL) to develop its
annual budget are effective. The audit found that a large majority of the audit criteria
are being met, particularly with regard to assessment of needs, establishing
organizational goals and objectives and budget preparation, internal review and
documentation.
Areas that need to be strengthened to improve the process include:
• A thorough review and update of the financial policies to ensure they are complete
and provide clear direction to the Chief Librarian;
• Developing forecasts for expenditures and revenues to establish a multi-year
budgeting process;
• Clarifying the reporting and accountability relationship between the OPL Board and
Council, and the Chief Librarian and the City; and,
• Developing and implementing a more relevant performance measurement
framework.
Recommendations
Recommendation 1
That OPL senior management strengthen its budget development process and
require each operational area to present potential cost saving opportunities, which
are then presented to the Board for discussion and debate.
OPL Response

Recommendation 2
That the OPL Board review and update the Board financial policies to ensure they are
complete and provide clear direction to the Chief Librarian and the Treasurer.

2008 Page ii 2008 Audit of the Budget Development Process at the Ottawa Public Library (OPL) Board

OPL Response

Recommendation 3
That the OPL Board clarify its arms-relationship with the City by developing a clear
and concise policy that defines the relationship in terms of reporting and
accountability.
OPL Response

Recommendation 4
That the OPL Board reinforce the Chief Librarian’s sole reporting relationship to the
Board (see Recommendation 2 in the Governance Audit of the OPL Board).
OPL Response

Recommendation 5
That the OPL Board direct the Chief Librarian to include, as a part of the annual
budget development process, various budget scenarios which are presented to the
Board for discussion and debate.
OPL Response

Recommendation 6
That the OPL develop multi-year budgets to present to the Board which clearly
outline the anticipated impact on service levels and funding requirements.
OPL Response

Recommendation 7
That the OPL should expand its reporting to the Board to include regular reports on
the status of efficiency targets and capital projects.
OPL Response

Recommendation 8
That the OPL Board work with senior management and provide direction on a more
relevant performance measurement framework for the OPL (see Recommendation 22
in the Governance Audit of the OPL Board).
OPL Response


2008 Page iii 2008 Audit of the Budget Development Process at the Ottawa Public Library (OPL) Board

Recommendation 9
That the OPL Board consider creating a Performance Measurement Committee to
oversee the development, implementation and monitoring of a p