Fairfax County Board Auditor Ltr to FriendsGroups-1!13!15

8/10/2019 Fairfax County Board Auditor Ltr to FriendsGroups-1!13!15

1/13

C o u n t y o f F a i r f a x , V i r g i n i a

To protect and enrich the quality of life for the people, neighborhoods and diverse comm unities of Fairfax County

January

13,

2015

Friends of the

Fairfax

County Public

Library

Dear Friends'

Groups,

Thanks so much for the work you

do

to

support our

Fairfax County Public Library system. As

you

know,

the

Friends

of

the

Library

groups

were created to support, improve and promote the

library. Each

group operates under a Memorandum of Understanding with

the

Library Board

of Trustees and

is

required to maintain financial

records

in compliance with the group's by

laws and articles

of

incorporation. A sample copy

of

a

Memorandum

of

Understanding is

attached

to

this letter, as

well

as a copy of the

Board

Matter requesting this

review.

By way

of introduction,

I

am

Jim

Shelton,

the

newly appointed Auditor of

the

Board

for the

County of Fairfax,

Virginia.

My

position

is

different

from the Internal Audit

Office,

which

reports directly to the County

Executive

and conducts performance audits and management

advisory projects covering

operational,

financial, and information technology areas.

My office

was

created to

provide

the

Board of Supervisors, working under

the

guidance and direction

of

the Board

of

Supervisors' Audit Committee, an independent means

for

determining the manner

in

which county policies, programs, and resources are being carried out. You can learn more

about my office and our work

by

going

to

http://www.fairfaxcountv.gov/boardauditor/

On

Tuesday

(2nd December

2014) the

County

of

Fairfax

Board

of

Supervisors

(BOS) added to

the Audit Committee's work plan a

review

of the fiscal reporting practices

and expenditures of

the Friends of the Library

groups

as well

as

the Fairfax

County Public

Library's Departmental

Gift

Funds. This

direction was

in

response to a request

from

a

Federation of

Citizens

Associations Resolution asking

for

an Audit of the Fairfax County Public Library's System

Gift

Fund.

This review includes an examination of

the

revenue generated by

the

sale of donated books, the

monetary

donations

the Friends groups

receive, and

any financial transactions

carried

out by

the Friends groups

and

the

Department

Gift

Fund. This will

allow

for an accurate accounting

of

funds

that flow into

the system and

the use

of

those

funds by the libraries.

Auditor of

the Board

Office

of Financial and

Program

Audit

12000 Government Center Pkwy., Suite 233

Fairfax,

VA 22035

Office: 703-324-4005

Fax:

703-324-3149

www.fairfaxcounty.gov


2/13

January 13, 2015

Page 2

To facilitate this process,

I

have prepared

a

Control Self-Assessment (CSA)

to

be

completed by

the Friends groups and

the

Fairfax County Public Library staff. This CSA

is

designed to

be

a

collaborative

approach to gathering the needed

information.

Upon receipt of

your

responses,

this information will be collated and shared with the

Board

of Supervisors in the customary

reporting process

which is

public information.

If

you have

any questions

about this process or

need guidance

with completion of the form, please let me know and

I

would

be

glad

to

assist.

Your assistance

in returning the completed CSA byclose

of

business Monday, February

16,

2015 would be very

much

appreciated.

Again, if

you have

any clarifying queries

regarding

the questions in this CSA, please feel free

to contact me at 703.324.4005 by phone or Jim.Shelton@,fairfaxcounty.gov via email.

Thank you in advance for

your

assistance with this

process.

Kind Regards,

J11X1

X/

U1VLV11VX_JX

-AVA

Auditor of

the Board

Attachments

Cc:

Sharon Bulova, Chairman, At-Large

Fairfax County Board of Supervisors

Fairfax County Public Library Board of Trustees

Clayton

P. Medford, Chief of Staff, Chairman's Office, Fairfax County

David J.

Molchany, Deputy County Executive, Fairfax County

Edwin S. Clay, Director, Fairfax County

Public

Library


3/13

M E M O R A N D U M O F U N D E R S T A N D I N G B E T W E E N T H E -

F R I E N D S O R G A N I Z A T I O N

A N D

T H E

B O A R D O F

T R U S T E E S , FAI RFAX

C O U N T Y

PU BL IC

L I B R A R Y

Purpose of

Friends

of the

Library

Organization:

' - . . -

The-Library Bo'ard

encourages

and supports;Friends of the

Library

organizations (FOL).

Friends of

the

Library are

civic-minded

men and women who know that

quality

library

service is

importanirto the'community^and^whcrorgafiizednto-groiips-te-support,

improve,

and promote the

library. Friends

are organized'with one or more of

the

-

'following objectives: ' ..

'

1.

To

increase

community

awareness

and

use

of

the

library;

.

.

2.

To work for

library legislation or

appropriations;

'

. ' .

3.

To

encourage gifts, endowments, arid,

memorials for-the

library;

'

4.

To

provide

direct financial assistance;

.

5.

To

raise

money and campaign

for

a

new building, renovation, or

expansion;

6. To sponsor

programs

designed to add to the cultural life

of

the community;'an.d

7.

To volunteer work in the library

on specific

projects designated by the Director.

Requirements:

'

.

. . .

' '

. -

1.

A H

'.Friends

of the- Library

groups shall conduct

their fiscal affairs through

non-profit,

non-stock 501(C)

3-tax

exempt corporations.-- . .

'

.

2 .

Each

FOL group shall

be

structured

through articles

of

incorporation

and

bylaws

.

. designed

to support, assist,

and

promote

the activities

of the

branch

or department.

3. Each

FOL groups shall have:

.

'

.

a. Astatement of purpose outlining its

program'activities

and related utilization of -

Library facilities,^ personnel, utilities and.

equipment;

and

'

.

-

b. Recognition

that

the Fairfax.County Public Library

endorses

a policy

of-Open

.

Meetings,

Open Records,

Affirmative

Action, and

its

Code of

Ethics,

and.expects

..

Friends

Groups

to understand, cooperate, and comply with such-policies.

4. Friends

gifts

to

the

system

will be

considered in accordance with the Library Boards'

Policy

M . Policy Regarding Gifts to and.Partnerships with the Library System,

5. FOL groups have the authority

to

sell discarded library materials in accordance with.

the State

Code.

'

.

.

'

6. FOL financial records will be

maintained

in

compliance

with

the

group's

by-laws

and

a r t i c l e s o f n c o r p o r a t i o n . ' .

:

-

.

.

7:

The Branch Manager

will

serve

as the

primary

representative

of the FairfaxCounty

Public Library

in

coordinating activities of

the

Friends of the

-

8. The

President of

the FOLwill

be

the

primary

liaison for

the

Friends.

-

Agreed to this

day of


4/13

Board

Summary

-21-

December 2 2014

DAL:dal

ADDITIONAL

BOARD

MATTERS

24. LIBRARY COLLECTION.

GIFT

FUND. FRIENDS' FUNDS

(11:42

a.nO

Chairman Bulova relinquished the Chair to Yice-Chairman Gross and said that

recently,

Board Members were contacted

by

the Federation of Citizens

Associations regarding

the

inventory tracking practice and

fiscal

policies of

the

Fairfax County Public Library (FCPL).

She

shared

with

Board Members her

response to the inquiry.

Inventory Tracking airfax County Public Libraries conduct an annual

inventory that

reflects holdings

by

audience

and

item type.

She

attached to her

written Board Matter a

sample

page from the

2013 inventory.

FCPL staff can also provide daily records

of

check-ins, checkouts, transfers, new

items added, and items removed from

the

collection. Staff run regular reports

to

verify holdings

and

help identify items that are missing or

lost.

She attached

to

her

written Board Matter

a copy

of the Circulation Priority reports.

Staff also

regularly reviews material

that

has high circulation an d low activity to determine

its status.

She noted that the library systems in Montgomery and Prince William Counties,

and Falls Church and Alexandria Cities do not perform collection inventories but

the County does.

Financial

Policies

he

Federation

asked

about

the

accounting practices

of

three

separate

entities:

the

FCPL Departmental Gift

Fund, the

Fairfax Library

Foundation, and

the

Friends

of

the Library groups. Each follows different

practices as they are separate funds with separate p olicies.

The FCPL DepartmentalGift Fund is subject to stringent

fiscal

controls, as are all

departmental gift funds. The Department of Finance shares oversight

responsibility with the Office of Internal Audit which is charged with ensuring all

policies and procedures are followed, as well as ensuring agency compliance with

audit recommendations.

An

October 2013

Office of

Internal

Audit review

found

adequate controls over

the business

processes

reviewed

during

our audit.

The Fairfax Library Foundation is a separate 501(c)(3) and as such

is

required to

file taxes

and

is audited annually by

a

private

firm.

Audit reports

for the last three

years,

as

well as its fund management policies, can

be

found on

the

Foundation's

website www.FairfaxLibraryFoundation.org.

The Friends of the Library groups are also separate 501(c)(3) organizations and

are required to file regularly

with

the Internal Revenue Service (IRS). Friends

groups

hold book sales, solicit donations, and provide other support to their local


5/13

Board Summary

-22-

December 2 2014

library branch. While the Friends groups have Memorandums of Understanding

(MOUs)

with

the Library Board of Trustees, it is not clear

whether

the Friends

groups are using

standard

reporting methods or

following

similar practices when

it

comes

to

supporting

their

local

branch.

Therefore, Chairman Bulova asked unanimous

consent

that

the

Board

direct

the

Office of Financial

and

Program

Audit to

add

to

its work plan a review of the

fiscal reporting practices

and

expenditures of

the

Friends

of

the Library groups as

well as the Departmental Gift Fund. This review should include an examination

of

the

revenue generated by the

sale

of donated books, the monetary donations

the

groups receive,

and any

other financial transactions carried

out

by

the

Friends

groups and the Departmental Gift

Fund.

Supervisor Smyth raised a question regarding the request and what it means for

the

Friends

groups in terms

of

providing the

information,

with

input from

David

Molchany,

Deputy

County

Executive.

Following discussion regarding the process for obtaining the information,

Supervisor Herrity

suggested

adding

subject

to Library

Board

approval

at

the

beginning of the request.

Supervisor Smyth

suggested

adding in conjunction with the Library Board.

Chairman Bulova

suggested adding

engaging

the

Library Board

of Trustees.

Following further discussion, Chairman Bulova moved that the Board direct the

Office of Financial

and

Program

Audit to add to

its

work plan a review

of the

fiscal

reporting practices

and

expenditures of

the

Friends

of

the

Library

groups

as

well as the Departmental Gift Fund. This review should include an examination

of the revenue generated

by

the sale of donated books,

the

monetary donations the

groups

receive, and

any

other financial transactions

carried out by

the

Friends

groups and the Departmental Gift Fund. Supervisor McKay seconded themotion.

Discussion ensued

about

reporting methods

to

the

Library Board

regarding this

issue, with input from Mr. Molchany. He added that the Library Board requested

information from the

Friends

groups and some complied and some did not.

Supervisor Hudgins noted

that

the

agreements with

the Friends groups

are

with

the

Library Board

of

Trustees and

it

has

the

right to

decide whether

to

continue

the agreement. Mr. Molchany noted that Edwin S. Clay, III, Library Director, is

responsible

for

working

with the Library

Board.

Discussion continued regarding:

Whether

this

issue has been discussed

with the Library

Board

Information that has been requested by the

Library

Board


6/13

Board Summary -23- December 2 2014

A request

by the

Board

of Supervisors

to direct

the

Auditor to

the

Board to put

this

issue on the work plan to help

get

information

about

what happens to gifts that are donated to the libraries

Noting

that the

Board has

a

meeting

with the

Library Board

of

Trustees

in

January,

Supervisor Gross

suggested that it

would be

advisable

to broach this

issue with the Library Board in January.

Noting that the

next Audit

Committee meeting is scheduled for February,

Chairman Bulova said that this

motion

tasks the Auditor

to

the Board with

starting to reach out and gather information.

Additional discussion ensued with input from

Mr.

Molchany regarding the MOU

between the

Friends groups

and

the Library Board

and

what

it

requires.

The

question was

called

on the

motion

and

it CARRIED

by

a

recorded

vote

of

eight,

Supervisor Hudgins and Supervisor Smyth voting NAY.


7/13

PRELIMINARY

DATA

REQUEST for

the FOL

Control

Self-Assessment

(CSA)

Donations:

1. Please

attach your 990 IRS Tax Returns for Year-End

2013, if

required and completed.

2. Please provide the total number of discarded or donated books to he FOL by the Fairfax

County Public

Library ( FCP L) ,

other

groups

or

individuals for

Year-End 2013. If

not

maintained

please note

N/A.

3. Please describe the

method

you used

for

the sale

of

donated

books,

for

example;

bulk,

subject matter, age,

condition or all of the

above.

Source of

Discarded

onated

Books

Counts

Matched to FriendsCounts

Yes/No

-

Differences

Total:

4. Please l is t a l l other sources of funds.

Sources

of Donated

Funds

Amounts @ Year

End

2013

a.

Please attach

a

copy of the last receipt

provided

to each

Source

of

Funds

Donated.

Transaction Tracking & Processing:

1.

Please provide

a

list of

software

utilized to record & track

funds

and make &

track

payments

to vendors,

for

example; excel spreadsheets, QuickBooks, manual tracking,

etc.


8/13

Types of Software,

Ledgers

or

Manual Tracking:

Please provide

a

list of expenses

made

to

vendors for the last month

of Year

End

2013

in

the

table below.

In none, please denote N/A

in the

table.

Vendor s Names Items

Purchased Prices

2. Please inform if the

software

and/or

spreadsheets

are

protected

to

ensure they are

secure

and

they are

reviewed

regularly to ensure

the information

is

being calculated

accurately.

3. Please inform if

monies

received

and payments

made

are compared

to your tracking

tools.

I f

not please

state

N/A.

If reliance i s primarily on

manual

tracking

and

approval of

individual

receipts

and

payments please state.

Please

inform if the receipt

and

deposit of monies and

payments

are made by

someone

other than the receiver of funds or the

requestor; for example:

i.

The review,

approval

and sign-off of all monies de posited

is by

someone

other than the person

who

received it,

if

not please state N/A

i i . The review, approval and sign-off of all monies spent is by

someone

other

than the person who

requested it,

if

not

please state N/A.

4. Please inform if the

person

approving the

expense matches the

vendor's

invoices to

the

purchase

order and

the

goods

received

to ensure that the

service provided,

price, and

quantity are

correct. If process does

not

exist please state

N/A.

5. Please provide the reported

and

computed amounts of Gift Funds and Book

Sales

that

were sent

to the

F C P L for Year End

2013.

Reported Donated Gift

Funds

Calculated Gift Funds

Sent to the

F PL


9/13

Total:

Reported Book

Sales

for Year End 2013

Calculated Book Sale Amounts to

the

F PL for

Year

End

2013


10/13

PRELIMINARY DATA REQUEST for the

F PL

Control Self-Assessment (CSA)

Donations:

1.

Please provide

the

total number

of

discarded books

sent

to

the

Friends

of

the

Libraries

(FOLs)

by the

Fairfax

County Public

L i b ra ry

(F CPL)

for

Year-End

2013.

a.

Answer; FCPL does not track this number. Conversely,

we

track numbers

of

discards.

N/A indicated in applicable table.

2. Please

attach a

copy of the last receipt provided to FCPL for discarded books

sent

to the

FOL.

Discarded

Matched

to

Friends

Count: Yes/No

Differences

of

Access

Services

of

Burke

Centre

ofChantilly

of

olly Madison

of City

of

Fairfax

of George

Mason

of Centreville

of

Great Falls

of Herndon

of

John Marshall

of

Kings

Park

of

Kingstowne

of

Lorton

of

Martha Washington

of Oakton

of

Patrick

Henry

of

Pohick

of Reston

of Richard Byrd

of

Sherwood

of

Thomas

Jefferson

of

Tysons Pimmit

of

Woodrow

Wilson

of

Virginia Room

Totals:

i.

Answer: FC P L does

not

receive receipts . At present books are routed

to

FOL who

have requested them

via

formal notification

to

FCPL) .

1.

Please provide notifications in

the

form theyare requested.


11/13

3. Please

l i s t al l sources

of funds.

Sources

of

Donated Funds

Amount

@ Year End

2013

Total:

a.

Please attach acopy of the last receipt provided

to

each

Source of Funds

Donated.

Revenue

Recognition:

1. Please indicate

the

process for

recording

book sale p roceeds and d onations.

Answer: Recorded in FOCUS.

i. Please provide location

and

access if needed.

2. Please inform if

you

match

the

funds received to the amount that has been recorded in

F O C U S ?

3. Please inform

if

the matching process i s being performed by

a

person different from the

person

collecting and depositing the monies? I f no,

then

please state N / A .

4. Please inform if

the

unmatched items were investigated and resolved. I f

not

performed

please state N/A.

Transaction

Tracking

&

Processing:

1. Please

provide a

l i s t of purchases

and

payments made

to

vendors for

the last

month of Year

E n d 2013 in

the

table

below. In

none,

please denote N/A

in

the table.

Vendor s

Names

Items

Purchased Payments

2. Please inform if the software

and/or

spreadsheets

are

protected

to

ensure they are secure

and they are reviewed

regularly

to ensure the information is

being

calculated accurately.

Answer:

These

are

on the

county

share drive.

i.

Please provide location and access

if needed.


12/13

1. I f spending is in accordance with the

County of

Fairfax Procurement

Pol icy

and the MOU

if applicable please

state.

a. I f M O U is not

applicable

and

there

are

no covenants

restricting how

the

Gift Funds are

to

be

spent

please

state,

N/A.

3.

Please inform

if

monies

received and payments made are compared

to

your

tracking

tools.

If

not

please state N/A.

Please inform

if

the

receipt

and deposit of monies

and payments

are made by

someone

other

than the receiver of funds or the requestor; for example:

i. The review,

approval

and

sign-off of

a l l monies

deposited

is by someone

other

than

the

person

who

received it, if not

please state N/A

ii. The review,

approval

and

sign-off of

a l l monies spent is

by someone

other

than

the person who

requested

it, if not please state N /A .

4. Please inform

if

the person approving the expense matches the vendor's invoices to

the

purchase

order and

the

goods

received

to

ensure that

the

service provided,

price,

and

quantity are

correct.

I f

process does

not exist please state N/A.

5.

Please

provide the

reported

and computed amounts of

Gift

Funds

that

were sent

to

the

F CPL

for

Year

E n d 2013.

Funds

Donations Book

Sales

Combined

Computed Splits ent

to F PL

of Access

Services

of Burke Centre

of Chantilly

of Dolley Madison

of City of Fairfax

of George Mason

of Centreville

of

Great Falls

of

Fiemdon

of John

Marshall

of Kings Park

of

Kingstowne

of Lorton

of

Martha Washington

of Oakton

of

Patrick Fienry

of

Pohick

of

Reston

of Richard

Byrd

of Sherwood

of Thomas

Jefferson


13/13

ofTysons Pimmit

ofWoodrow

Wilson

Virginia

Room

Totals:

Please provide

staff responsible

for

verifying the

50%/ 0% splits

of

Gif t Funds to

be

collected by FCPL.

Contact:

County Lib ra ry Gi f t Funds

Specific:

1. Please provide

the

accounting for

these

funds in

the

budget and the

financial

system

( F O C U S ) .

2. Please provide

the

location where the disbursements register for

these

funds

are

maintained

i n FOCUS.

3.

Please

inform

who

reviews

and

sign-offs

on

these

disbursements

or

i f

the

review

process

occurs

on

the individual invoice level.

Documents

Fairfax County Board Auditor Ltr to FriendsGroups-1!13!15