Purpose of Audit

The purpose of our audit was to review the Board of Trustees’ oversight of Library operations for the period July 1, 2011 through August 26, 2013.

Background

The Newark Public Library is located in Wayne County. A Board of Trustees comprising seven elected members governs the Library and is primarily responsible for the general oversight of the Library’s financial affairs. The Library’s budgeted appropriations for the 2013-14 fiscal year were approximately $614,000.

Key Findings

• Although the Board had adopted an investment policy pursuant to statutory requirements, it did not follow or enforce the policy. Instead, it allowed Library moneys (totaling nearly $1.2 million as of June 30, 2013) to be improperly deposited in types of investments which are not allowed by law, putting Library resources at a greater risk for loss.
• The Board has not adopted a procurement policy or a code of ethics to provide statutorily required guidance to staff to ensure compliance with laws related to procurement, bidding, and avoidance and disclosure of conflicts of interest. The Board also has not adopted policies and procedures for other aspects of Library operations, including cash receipts and disbursements, claims processing and auditing, credit cards, payroll processing, accounting records and reports and IT.
• The Board allowed the payroll vendor contracted by the Library to disburse payroll by accessing the Library’s bank account and withdrawing enough funds to cover payroll, payroll taxes, health insurance premium, and fees for its services.

Key Recommendations

• Adhere to and enforce all provisions of its investment policy, divest from all improper investments and place all Library moneys in time deposits, certificates of deposit, or other investments in accordance with GML.
• Adopt a code of ethics and establish written policies and procedures for Library operations, including cash receipts and disbursements, purchasing, credit cards, claims processing, payroll processing and IT.
• Do not allow the privately-contracted payroll vendor to access the Library’s bank account.