County of Fairfax, Virginia

To protect and enrich the quality of life for the people, neighborhoods and diverse communities 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

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 by close 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/

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\^-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

MEMORANDUM OF UNDERSTANDING BETWEEN THE

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FRIENDS ORGANIZATION AND THE BOARD OF TRUSTEES, FAIRFAX COUNTY
PUBLIC LIBRARY' '
'

\
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.
2.
3.
4.
5.
6.
7.

To increase community awareness and use of the library;

.
.
To work for library legislation or appropriations;
'

. '
.
To encourage gifts, endowments, arid, memorials for-the library;

To provide direct financial assistance;

...
.

To raise money and campaign for a new building, renovation, or"expansion;

To sponsor programs designed to add to the cultural life of the community;'an.d
To volunteer work in the library on specific projects designated by the Director.

Requirements:

'

' '

'

1. AH '.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. A statement 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
articles of incorporation.
'
.

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.
:
7: The Branch Manager will serve as the primary representative of the Fairfax County
Public Library in coordinating activities of the Friends of the
- "
;
8. The President of the FOL will be the primary liaison for the Friends.

Agreed to this

day of

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 - Fairfax 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 and 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 - The 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 policies.
The FCPL Departmental Gift 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

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 the motion.
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

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."

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 the FOL by the Fairfax
County Public Library (FCPL), 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 / Donated

Counts

Matched to Friends Counts

Books

Yes/No Differences

Total:

4.

Please list all 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.

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

2.

Items Purchased

Prices

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. If not please state N/A.

If reliance is 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 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 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 FCPL for Year End 2013.

Reported Donated Gift Funds

Calculated Gift Funds Sent to the FCPL

Total:
Reported Book Sales for Year End 2013

Calculated Book Sale Amounts to the FCPL for Year End 2013

PRELIMINARY DATA REQUEST for the FCPL

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 Library (FCPL) 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

FOLs

Differences

Friends of Access Services

Friends of Burke Centre
Friends ofChantilly
Friends of Dolly Madison
Friends of City of Fairfax
Friends of George Mason
Friends of Centreville
Friends of Great Falls
Friends of Herndon
Friends of John Marshall
Friends of Kings Park
Friends of Kingstowne
Friends of Lorton
Friends of Martha Washington
Friends of Oakton
Friends of Patrick Henry
Friends of Pohick
Friends of Reston
Friends of Richard Byrd
Friends of Sherwood
Friends of Thomas Jefferson
Friends of Tysons - Pimmit
Friends of Woodrow Wilson
Friends of Virginia Room
Totals:

i. Answer: (FCPL 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 they are requested.

3.

Please list all sources of funds.

Amount @ Year End 2013

Sources of Donated Funds

Total:

a. Please attach a copy of the last receipt provided to each "Source of Funds
Donated."
Revenue Recognition:
1.

Please indicate the process for recording book sale proceeds and donations.

Answer: Recorded in FOCUS.

i.
2.

Please provide location and access if needed.

Please inform if you match the funds received to the amount that has been recorded in
FOCUS?

3.

Please inform if the matching process is being performed by a person different from the
person collecting and depositing the monies? If no, then please state N/A.

4.

Please inform if the unmatched items were investigated and resolved. If not performed
please state N/A.

Transaction Tracking & Processing:

1.

Please provide a list of purchases and payments 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

2.

Items Purchased

Payments

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.

1. If spending is in accordance with the County of Fairfax Procurement

Policy and the MOU if applicable please state.
a.

If MOU 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 all 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 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 that were sent to the
FCPL for Year End 2013.

Donations
FOLs Funds

Friends of Access Services

Friends of Burke Centre
Friends of Chantilly
Friends of Dolley Madison
Friends of City of Fairfax
Friends of George Mason
Friends of Centreville
Friends of Great Falls
Friends of Fiemdon
Friends of John Marshall
Friends of Kings Park
Friends of Kingstowne
Friends of Lorton
Friends of Martha Washington
Friends of Oakton
Friends of Patrick Fienry
Friends of Pohick
Friends of Reston
Friends of Richard Byrd
Friends of Sherwood
Friends of Thomas Jefferson

Book Sales

Combined

Computed Splits / Sent to FCPL

Friends ofTysons-Pimmit
Friends ofWoodrow Wilson
Friends of Virginia Room
Totals:

Please provide staff responsible for verifying the 50% / 50% splits of Gift Funds to be
collected by FCPL.
Contact:

County Library Gift Funds Specific:

1.

Please provide the accounting for these funds in the budget and the financial system
(FOCUS).

2.

Please provide the location where the disbursements register for these funds are
maintained in FOCUS.

3.

Please inform who reviews and sign-offs on these disbursements or if the review process
occurs on the individual invoice level.