Audit Report on the Financial and Operating Practices of the Brooklyn Public Library

EXECUTIVE SUMMARY

The audit examined whether the Brooklyn Public Library (BPL) appropriately authorized and recorded expenditures, complied with the applicable law, rules, and regulations governing the use of the BPL’s funds, and ensured those expenditures were necessary for the operation of the library. The BPL was established in 1896 and is one of three separate library systems serving the City of New York. The BPL is the fifth largest library system in the nation, serving over two and one-half million Brooklyn residents. The Central Branch is located at Grand Army Plaza and another 58 branches are located throughout the borough. There is also a business library in Brooklyn Heights. The BPL, like the two other New York City library systems, is a tax-exempt independent not-for-profit corporation governed by a board of trustees consisting of 38 members serving in non-salaried positions.

The BPL’s operations are primarily funded by City tax levy funds, which are designated for the general administration and maintenance of the library (e.g., employee payroll, fringe benefits, book purchases, supplies, and equipment). The BPL also receives New York State funding, federal grants, private donations, revenue from book sales, fines, and library fees. In Fiscal Year 2013, the BPL received $136.7 million in funds and additional revenue, of which $422,233 was temporarily restricted in the way it could be used. Of the total revenue, $85.7 million was received from the City. In addition, the BPL occupies City-owned buildings including the central library and a majority of its branches, under a rent-free arrangement with the City. The estimated value of those premises including utilities is $32.7 million. In total the City provided the BPL $118.4 million or 87 percent of its total revenue.

Audit Findings and Conclusions

The audit found that the BPL appropriately authorized and recorded expenditures, complied with the applicable law, rules, and regulations governing the use of the BPL’s funds, and ensured those expenditures were necessary for the operation of the library. Our audit, however, found a minor control weakness related to the BPL’s tracking of certain gift cards issued to students.

Audit Recommendation

This report recommends that the BPL should institute a policy to keep track of the distribution of all gift cards’ recipients in the various incentive programs within the BPL.

BPL Response

BPL officials agreed with the audit’s findings and have acted to address our recommendation to track the distribution of all gift cards. The full text of BPL’s response is included as an addendum to the report.