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Trustee Information: Fiduciary Responsibility

A resource collecting information to help library trustees explore their roles and responsibilities.

Overview

One of the most important responsibilities of a trustee or board member is to ensure that financial resources are being used efficiently and effectively toward meeting the institution’s goals, in compliance with applicable law and regulation, and that its assets are properly safeguarded. - Statement on the Governance Role of Trustees  - NY Board of Regents

Role of the Public Library Treasurer - Supplement to the Trustee Handbook

Best Practices for Boards

A library board meeting its fiduciary responsibilities will:

  • Review and adopt a written annual budget (also a minimum standard)
  • Review and approve the payment of the library's bills at each regular meeting
  • Receive regular statements on the library's fiscal position
  • Ask questions about bills or vendors that are new or unknown
  • Approve a procurement policy with appropriate levels
  • Ensure internal controls are in place
  • Undergo an audit by a CPA every year
  • Avoid or disclose conflicts of interest

Warning Signs

Top Ten Warning Signs for Boards

  1. Lack of available documentation on the organization’s by-laws, charter, mission statement, organization chart, and prior year financial statements.
  2. Lack of independent attitude or excessive conflict among trustees/board members.
  3. Infrequent board meetings. Absence of board minutes.
  4. Poor board attendance at meetings.
  5. Lack of access to key, fiscal, budget, program, and operations information.
  6. Lack of access to the chief financial officer.
  7. Existence of conflict of interest relationships or less than arm’s length transactions between the institution’s board members and organizations that conduct business with the institution.
  8. Lack of internal financial controls and written policies and procedures to safeguard, promote, and protect the organization’s funds and other assets. Lack of fidelity bonds.
  9. Lack of involvement in the hiring of key employees.
  10. Failure to file documents with key control agencies such as the NYS Education Department, Internal Revenue Service, and NYS Department of Taxation and Finance.
Statement on the Governance Role of a Trustee or Board Member