As I explained in our Collection Services early-bird on August 11, CBG and I are establishing a new expectation regarding how selectors manage each of their funds. The new goal is to have each fund finish the year with an overall free-balance of zero. That is, the sum of the free-balances in each fund’s serials, continuations, and monographs lines should come as close as possible to zero.
Along with this new expectation, we also changed how serials are budgeted. In FY11 the serials starting budget for each fund was the sum of:
- FY10 expenditures;
- an allowance for titles last paid in FY08 or FY09, but not paid in FY10; and
- 8% for inflation.
This year in FY12, the serials starting budget for each fund was calculated as:
- FY11 expenditures; and
- 8% for inflation.
This year, we did not budget for titles last paid prior to FY11. The circumstance of titles not being supplied and/or invoiced in a timely manner has become a persistent problem in recent years. It is likely that some invoices expected in FY12 will not arrive in time to be paid during the fiscal year. We expect the new serials budgeting calculation will reduce the amount of carry-forward in selector managed funds. For FY11, about 30% of the selector carry-forward balance was held in serials and left a large surplus. For FY12, serials have not been budgeted to include the additional titles paid during FY10 (but unpaid during FY11), which would add about 5% to the serials base budget.
The new method for budgeting serials sets the appropriation closer to what we expect to pay for in FY12. Selectors overall base budgets have not been changed because of this new calculation. The result of budgeting less for serials means most monograph funds receive more funding than they would otherwise, although several funds are also adjusted for the incorporation of digital resources transferred from the DILIB fund.
Having a goal of managing selector funds to zero and the new serials budgeting calculation should work to reduce our carry-forward amounts. If this method is successful, we can avoid having to tax carry-forwards to manage this problem.
We realize that managing exactly to zero is a goal and cannot be accomplished in reality. Therefore, ending the year with a small surplus or deficit will be considered a success. We will also continue to produce the new serials and continuations reports to help selectors see where they are with these expenditures during the year.
If you have any questions, please contact me or your fund group coordinator.
Best, Bernie