Representatives of the Fairfax Library Advocates were invited to attend a meeting with Fairfax County Board of Supervisors (BOS) Chairman Sharon Bulova on Friday, January 9th. The meeting was called to discuss a recent directive from the BOS calling for an audit of the accounts of the various Friends of the Library. Also present at the meeting were representatives of the Fairfax County Federation of Citizen Associations (Federation), the Library Board of Trustees, and numerous County employees, including Library Deputy Directors Melanie Quinn and Katie Strotman, Director Sam Clay listened in by phone as he was on vacation. The Advocates participated in their capacity of members of the Advocates group and spoke only as Advocates, emphasizing they did not in any way speak for the Friends individually or collectively (although the participants had direct ties to at least six Friends groups - Tysons-Pimmit, Kingstowne, Centreville, Kings Park, Fairfax/VA Room and Reston).
Background: Last September the Federation passed a resolution calling for (1) an independent comprehensive fiscal audit of the Library; (2) a complete collection inventory of the library; and (3) an audit of the system gift fund. The Federation did not call for an audit of the Friends accounts. Despite this, the message was garbled along the way and on December 2nd the BOS approved a "Board Matter" calling, inter alia, for a "review of the fiscal reporting practices and expenditures of the Friends of the Library groups as well as the Department 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."
Gift Fund: The meeting began with a discussion of the "system gift fund." Deputy Director Quinn provided a flow chart which noted funds coming into the County are treated in two different ways. First, if a donation is made with a restriction that calls for the funds to be used for a specific purpose, it is processed in such a way as to meet that request, assuming it is approved as an appropriate expense by the Library Administration. Information is then provided to the Department of Finance via an Annual Accountability Report. If there are no restrictions on the donation a similar procedure is followed, except the funds are expended at the discretion of the Administration, in keeping with priority guidelines. Acting Advocates Chairman Dennis Hays noted the final use of these funds has not been transparent and this raises questions. Quinn stated the accounts are audited but one of the Federation reps added that information on expenditures is lumped into five broad categories such that little can be gleaned from the report. Hays asked if it would be possible to have a more precise and detailed readout of specific expenditures so that it would be clear how the funds were being spent. Quinn agreed to provide this information, noting that Branch Managers already get this information in a quarterly report.
Audit of Friends Accounts: The next issue was the call for an audit of the Friends accounts. Federation representatives reconfirmed the specific resolutions contained in their September motion. The Chairman (as Chairman Bulova prefers to be called), nevertheless proceeded with a call for the Friends accounts to be audited by the County's "Auditor of the Board" (not the County Auditor - a distinction but not one that really affects the request) since it was necessary for the County to accurately account for the money that comes into and out of County accounts. At this time she was referring to funds received from the daily sale of books at the various libraries that goes to the Gift Fund. Hays noted it had just been established that the Federation had not requested this action be taken. He asked if there was some instance of impropriety by one of the Friends group that had prompted this request and was assured by all the County representatives that there was no such concern. Hays then stated that proceeds from the daily sales are handled electronically with all funds going directly to the County - only later do the Friends receive their portion of the proceeds FROM the County. Thus, the County already has complete information on the funds coming into and going out of the County's coffers. Further, as all Friend's groups are 501 (c) 3 organizations, all the Friends have specific financial reporting requirements to the State and Federal government. In addition, the Friends have signed MOUs with the County that place no obligation on the Friends to disclose private financial information to the County. Given all this, an additional County audit is neither useful nor required. A spirited discussion followed with the County making the case again that they needed the audits to comply with their regulations. The Chairman observed that the County audits a number of organizations with which have contracts with the County. Hays replied that these were companies or organizations with a business relationship with the County involving payment for services - very different from the Friends. The assertion was also made that not all Friends have the same ability to undertake financial housekeeping and thus different procedures were being followed. The auditor stated that no major additional work would really be needed as much of the requested information would be in the 990s (federal tax forms for 501(c) 3 organizations) already being prepared. The County could help implement standard and best practices. Fran Millhouser asked if this level of scrutiny was being applied to other 501 (c) 3 groups, such as those using Park Authority facilities. The answer to that was, "We haven't gotten there -- yet."
No consensus on the audit request was achieved. Toward the end County reps seemed to say this might be more of a semantic issue and that maybe "audit' wasn't the right word. More of a "Control Self Assessment" (CSA) was what was needed and that each Friends group would just be asked to fill out a form or two - no auditor from the County was going to show up at the front door. On cue, it then was disclosed that the Auditor's office had prepared two new forms that would be sent to the Friends. We asked for copies but were told they weren't quite ready but that they would be distributed shortly. Hays stated he was sure they meant they would be distributed to all the Friends groups for review and comment. He got back what we will take as a confirmation that would be the case.
Friends Assets: Hays also noted there is concern the County might act to confiscate the resources of the Friends. He asked for confirmation that the County had no intention to "seize, redirect, confiscate, assume, or in any fashion take control" of the Friends funds. The Chairman assured him there was no intention to do anything like that.
New MOU proposed: This led into a short discussion of the MOU in use. It appears the Administration has been coming up with a new version. Again we asked for a copy and again were told they "weren't quite ready." There is an extra stop on this one, as apparently a new MOU proposal needs to go through the Trustees first. It's coming, however, perhaps soon after a joint BOS/Trustee meeting on the 20th of this month.
Inventory of holdings: The issue of a comprehensive inventory review was given scant consideration. The County believes they already produce this information on an annual basis. The Chairman stated there was a full audit in October 2013. We noted, as demonstrated by the insightful work of Terry Maynard and Kathy Kaplan, that there are serious gaps and omissions in what they think is a comprehensive review. Another area of no consensus.
Chairman Bulova also scheduled some time for other issues. Hays began by stating that in every other circumstance he was aware of, the Advocates worked closely and collaboratively with the Library Administration and elected officials. He stressed it was our intention and desire to have that be the case here, too. We stand ready to work together to strengthen our libraries. However, although accepting that all concerned share a common desire to have the best library possible, the Advocates have serious concerns as to some of the policies and actions of the present Administration. Specifically:
-- The decision to operate on a two year review of books rather that the standard five year cycle has done great damage to the library and resulted in hundreds of thousands of books being destroyed. We need to stop this hemorrhaging immediately and the first step is to return to a five year review standard.
-- Next, the Library has suffered disproportionate cuts in budget over a long period of time. The cumulative effect of this has been to weaken a once great institution. Although we recognize that times are tough and budgets tight, the library has done more than its share of belt tightening and should be spared further budget cuts.
-- Likewise, staff levels have been cut to the extent that it is only through the heroic efforts of the remaining staff that quality service is being maintained. Hays asked why, given there are over 60 current vacancies, no library jobs are listed on the County's "jobs opportunities" website?
-- Finally, the search for a new Director must be accelerated. The new Director must have, and be able to share, a vision to restore the Fairfax system to its proper rank as a world class library that addresses the needs, hopes and desires of the citizens of Fairfax.
Comment - The meeting was cordial and useful in that it clarified the thinking of the County in several areas, most notably that the County has no designs on the Friends' funds. There still is disagreement on what the County can ask the Friends to provide in way of financial information beyond what is already provided in fulfillment of each 501 (c) 3's obligation to the State and Federal government. Discussion centered, for example, solely on the proceeds from the daily sales, not the larger semi-annual book sales many Friends hold.
The County has agreed to provide the following information or new forms:
1. Information on the specific expenditures of the system gift fund;
2. Copies of the draft audit forms the County asserts the Friends need to complete; and
3. Copies of the draft MOU the County wishes to propose.
Once these documents have been received and reviewed, particularly the proposed MOU, we will have a better idea of where we all stand.
Federation 2nd VP Bill Barfield, Federation 1st VP Ed Wyse
Chairman Sharon Bulova
Library Board of Trustees Vice-Chair Karrie Delaney
Terry Maynard, Fairfax Library Advocates
Library Board of Trustees Chair Charles Fegan
Ambassador Dennis Hays, Fairfax Library Advocates
Federation President Tim Thompson, Co-Deputy Library Director Melanie Quinn,
Fran Millhouser, Friends of the Virginia Room.