Budget Planning & Reporting

Governance Policies and Procedures

Policy Number: GO8.1.2| Policy Type: Administrative | Approval Date: May 2026 | Date for Review: 2029; Every 3 Years

INTRODUCTION:

As a not-for-profit corporation, the Ontario Library Association (OLA) will operate within an approved annual operational budget and short and long-term capital budgets.

DEFINITIONS

Balance Statement – shows the OLA financial position at a specific point in time. It provides a snapshot of what OLA owns, owes, and the value remaining.

Balance Variance Report (BVR) – see Income Statement.

Cashflow Statement – is one of the core financial statements used to evaluate OLA’s financial health. It reports the actual inflows and outflows of cash over a specific period—showing how money moves into, through, and out of OLA.

Contract Management Activities – occasionally OLA will enter into contract service provision for other organizations or grants as a source of improved member service or income generation.

Externally Restricted Fund – are funds which the Board accepts from a donor, who have established specific purposes and imposed restrictions through a Terms of Reference with the OLA. As such, OLA merely administers the program. Changes to the fund must be pre-approved by the donor or heirs.

Funds Statement – is a snapshot of the value of each restricted fund at a specific point in time. This statement will identify total expenses, revenues, and earned interest (if any) that is owed to each fund.

General Fund – is the OLA non designated fund under the operations purview. All donations not designated are received into this account. In marketing this fund may be referred to as “Library Champion”.

Income Statement – also called a Profit and Loss Statement (P&L), is a core financial report that shows OLA’s revenues, expenses, and profit or loss over a specific period. OLA provides comparative income statements—also called Balance Variance Reports (BVR)—which compares the Actuals earned/spent with the Budget.

Internally Restricted Fund – are funds with specific purposes and imposed restrictions on use, which are established by the Board and and under the Board’s purview to amend. The Board may merge funds, change the Terms of Reference or criteria with a standard majority vote. In addition to Internally restricted program funds, a Reserve Fund, or Capital Fund is considered Internally Restricted.

Responsibility

The OLA Board is responsible for approving the annual budget and for the setting of policy to guide the development, determination and fiscal success of the Association.
The OLA Finance & Audit Committee will review this budget and present to the Board when satisfied with the final product. This Committee will also provide a quarterly report to the Board including budget standing and any concerns.
The staff will develop a budget using Board direction and Association needs. Staff will provide detailed reports to the Committee for review quarterly. These will be used to develop the Committee’s report to the Board.

General

Operational Budget Planning

The Budget of the Association is based on the overall operations, events, programs, sectors, committees, affiliates, and partners as appropriate.

The budget of the Association must be approved prior to the end of the preceding fiscal (August 31) and will include estimates for general operations and personnel. Resources will be provided to the Finance & Audit Committee to better understand recommendations, such as market adjustments, cost of living adjustments, inflation index, contract negotiations in progress.

The budget of the Association does not include contract management activities.

Membership dues will be approved by the Board as part of the annual budget process. Notice of such changes will be provided to members in writing as a direct email as per By-Law (Clause 4.07). Any changes to the membership dues will impact the fiscal year when they are realized.

Reallocation of Budget

The Executive Director shall have the authority to reallocate approved budgets with the following exceptions:

Board Resolution is required for Operational or Salary Reallocation over 10% of the budget line and may not impact the bottom line.
Board Resolution is required for Capital Reallocation over 10% of the project.
Reallocation or adjustments which impact the bottom line of any complete budget (e.g. operational or capital) require Board resolution.

Allocation of Surpluses

All surplus funds created from the under spending of budgets or Association contract management unspent revenues are to be directed to the development of a reserve equivalent to 75% of the annual operating budget of the Association, and to the fiscal support of Association issues identified by the OLA Board of Directors. (See also G5.1.3 Reserves, Funds, & Charitable Gifts).

Limitations

The operational budget approved by the OLA Finance & Audit Committee for presentation to the OLA Board in a given year must be balanced or be showing a surplus. If extraordinary circumstances are present, the Board must provide instructions to the Committee allowing for an operational budget to include a deficit. In this situation, an understanding of where the additional funds will be borrowed from must be included in this resolution, as well as the mitigation plan to address the one-time issue.

Presentation to the Board

The Board Treasurer, with support from the Deputy Director shall present the Operational Budget, budget policy and other recommendations approved by the OLA Finance & Audit Committee to the Board prior to August 31st of each year.

The Budget Procedure

The Board will provide budget instruction to the Committee and staff prior to the commencement of the budget process.
The Board President and Treasurer will set a date for the Annual Budget Meeting.
The Treasurer will set the date for the draft budget to be circulated to the Finance & Audit Committee, no less than 30 days prior to the Annual Budget Meeting.
Each Council, Committee and Department will develop a workplan based on the multi-year strategic plan that outlines the direction of programs and activities for which the budget is required including anticipated revenue and expenses. The Deputy Director will integrate an Annual Budget proposal, approved by the Executive Director for release to the Finance & Audit Committee, no less than a minimum of 10 days in advance of the Committee meeting.

Quarterly Budget Variance Reporting

Detailed financial statements will be provided to the Finance & Audit Committee, including:

Balance Variance Report

Income Statement

Funds Statement

Cashflow Statement

Each quarter, the Board Treasurer with the support of the Deputy Director, will report on four (4) areas:

Good news story, if applicable
Summary Financials, addressing anticipated surplus or deficit and any budget reallocations;
Areas of concern, budget targets not met with explanations and/or solutions;
Comparators (chart, graphs, trends)

Capital Budget Planning

A separate Capital Budget will be provided to the Board for approval.

This budget will follow the same approval process (Committee, Board).
This budget will follow the same timelines for approval as the Operational Budget.
The capital budget may be drawn from reserves with Board approval, or the General Fund with ED approval.
The Capital Budget will be at least a three year projected budget with the current year being approved

Related Documents

Operational By-Law 2

G5.1.3 Reserves, Funds & Charitable Gifts

Revised: May 2026

Date for Review: 2028; Every 3 Years