State Aid to Public Libraries

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Since 1941, the NC General Assembly has appropriated money for public library service in North Carolina.  State Aid legislation stipulates that the appropriation known as “Aid to Public Libraries Fund" is intended to promote, aid, and equalize public library service in North Carolina (General Statute 125-7b). This appropriation is often simply referred to as “State Aid”. 

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Statutes

Article 14, Chapter 153A of the NC State Statutes provides for NC public libraries to receive funds appropriated annually by the State Legislature. These grants are available to any public library, including municipal libraries, that establishes its eligibility according to the Rules and Regulations for the Allocation of State Aid to Public Libraries. The State Library's role in State Aid is to determine eligibility annually. Eligibility is specified in the North Carolina Administrative Code 07 NCAC 02I .0201 Qualifications for Grant Eligibility.

The State Library is also charged with receiving this funding from the legislature and allocating it to all eligible libraries based upon a formula approved by the North Carolina Library Commission. State Aid payments to eligible libraries are determined twice a year, in October and April. 

Library Development, as administrator of state aid funds, is given the authority to create rules, regulations, and bylaws via General Statute § 125-7:  “…shall frame bylaws, rules and regulations for the allocation and administration of such funds.”  

The North Carolina Public Librarian Certification Commission governs minimum standards for public librarians to protect and maintain public library resources, to assure professional management and administration of library services, to meet the personnel requirements for State Aid administered by the State Library of NC, and to guarantee the best possible public library service to all North Carolinians specified under NC Administrative Code 07 NCAC 02J .0102 Full Certification.

 

Eligibility

 

Eligibility is specified in the North Carolina Administrative Code 07 NCAC 02I .0201 Qualifications for Grant Eligibility. 

In addition to the State Aid documents, Regional Libraries have several other required documents as listed in General Statute 160A, Article 20 and 07 NCAC 02I Section .0300 Organization of Regional Libraries.

Administrative Code 07 NCAC 02I .0201 Qualifications for Grant Eligibility

Libraries requesting funding from the Aid to Public Libraries Fund shall submit annually to the State Library of North Carolina an application for State Aid and supporting documentation including financial and statistical reports and shall meet the following eligibility requirements:

  1. Be established consistent with the provisions of Article 14, Chapter 153A of the North Carolina General Statutes; 
  2. Provide library services in compliance with applicable State and Federal law to all residents of the political subdivision(s) supporting the library. Public library services shall be provided from at least one designated facility with a cataloged collection that is open to the public a minimum of 40 hours per week;
  3. Employ a full-time library director having or eligible for North Carolina public librarian certification. Full-time means working a minimum of 35 hours per week;
  4. Secure operational funds from local government sources at least equal to the average amount budgeted and available for expenditure for the previous three years. A grant to a local library system from the Aid to Public Libraries Fund shall not be terminated but shall be reduced proportionately by the Department if the amount budgeted and available for expenditure by local government is below the average of the previous three fiscal years. State funds shall not replace local funds budgeted and available for expenditure for public library operations;
  5. Secure aggregate operational funds from local sources which are at least equal to state aid;
  6. Expend funds as authorized in the budget adopted by the Board of Trustees of a Regional Library, a County, or a Municipality. Any library having an unencumbered operational balance of more than 17 percent of the previous year's operating receipts shall have the difference deducted from its state allocation;
  7. Pay salaries for professional positions funded from the Aid to Public Libraries Fund at least at the minimum rate of a salary grade of GN10, or equivalent, as established by the Office of State Human Resources;
  8. Provide to the State Library of North Carolina an annual audit of the political subdivision(s) funding the library consistent with generally accepted accounting principles;
  9. Submit annually to the State Library of North Carolina a copy of the bylaws of the library system's Board(s) of Trustees;
  10. Submit annually a current long-range plan of service to the State Library of North Carolina. A long-range plan of service is a plan of at least five years. Upon request, the library shall submit an assessment of a community's library needs to the State Library of North Carolina;
  11. Submit a copy of the agreement establishing the library system, if composed of more than one local governmental unit; and
  12. Meet the following stipulations when establishing a new library or re-establishing eligibility for the Aid to Public Libraries Fund:
    1. meet all requirements of this Section on July 1 of the year prior to the fiscal year that the library plans to receive state aid;
    2. continue to meet all requirements of this Section from July 1 to June 30 of that year, which shall be known as the demonstration year; and
    3. file a full application for state aid by the June 30 deadline at the close of the demonstration year in order to receive state aid in the next fiscal year.

Benefits of State Aid

  1. Receive monthly state aid payments distributed via the Aid to Public Libraries Fund legislation.
  2. Ability to apply for LSTA funding grants and receive federal funding (Library Services and Technology Act of 1996 20 U.S.C. Section 9122)
  3. Access to NC Live resources
  4. Access to Statewide State Library programs
    1. Continuing Education Scholarships and grants
    2. Summer Reading programs
    3. E-rate discounts
  5. Membership in the North Carolina Public Library Directors Association (NCPLDA)
    1. Access to NCPLDA listserv
    2. Access to NC Kids Digital Library
    3. Ability to network with other Public Library Directors
  6. Ability to join NC Cardinal Resource Sharing Consortium
  7. IMLS recognition as a public library

The factors that determine state aid amounts include population, PCI (both local and the State per capita income), the state aid allocation, and whether your County, City, or Regional met their average MOE level (3-year moving average).  

Formula

Annual state aid funding is divided into two equal parts:

  1. Fifty percent (50%) is allocated for “block” grants
  2. Fifty percent (50%) is allocated for “equalization” grants

Block Allocation Calculation

The allocation for block grants is equally divided between the 100 North Carolina counties with special consideration for regional library systems.   Regional libraries receive an additional share of the block allocation.  Specifically, the block allocation amount is divided by “112”.  The “112” number represents the 100 counties within North Carolina plus one additional grant for each of the twelve (12) existing regional library systems. Municipal libraries do not receive block grant allocations.

Equalization Allocation Calculation

The other 50% of state aid funds is distributed to each eligible library system based upon three (3) primary factors:

  • Local community support

    • Local community support represents both monetary and in-kind contributions to a library system.  The goal of monitoring local community support is to ensure that the level of local funding of a library system remains constant from year to year, ensuring long-term sustainability.  The State Library uses a 3-year rolling average to accommodate spikes in local funding.
  • A library's service area population
    • Annual county and municipal population statistics are obtained from the NC Office of State Budget and Management Office.
  • A library’s service area per capita income
    • Per Capita Income statistics are obtained from the US Census Bureau, American Factfinder. Per capita income measures the average income earned per person in each library system.

The use of the above three (3) factors recognizes that if a library system services more people and/or more economically-challenged people, the library system should receive a greater share of the second half of the allocation.  In short, the goal of this half of the grant is to maximize income equalization.  Equalization allocations are added to block grant allocations to ascertain monthly state aid payments.

Additional Factors

  • Any library having an unencumbered operational balance of more than 17 percent of the previous year's operating receipts shall have the difference deducted from its state allocation;
  • Libraries must secure aggregate operational funds from local sources which are at least equal to state aid;
  • State aid funds shall not replace local funds budgeted and available for expenditure for public library operations.  Libraries must secure operational funds from local government sources at least equal to the average amount budgeted and available for expenditure for the previous three years. A grant to a local library system from the Aid to Public Libraries Fund shall not be terminated but shall be reduced proportionately by the Department if the amount budgeted and available for expenditure by local government is below the average of the previous three fiscal years.
  • State aid fund are strictly for library use only.

Application for State Aid 

Libraries must apply for State Aid annually for continued eligibility. The State Library sends application packets via email to library directors in July, and the completed forms must be submitted to sladmin@ncdcr.gov by mid-September. The completed application must include:

  • Form A: Local Funder Maintenance of Effort Report and Declaration (07 NCAC 02I .0201, 4)
  • Form B: Maintenance of Effort for Monetary and In-Kind Contributions (07 NCAC 02I .0201, 4)
  • Form C: Average Maintenance of Effort (07 NCAC 02I .0201, 5)
  • Form D: Assurance of Professional Salaries (07 NCAC 02I .0201, 7)
  • Form E: Library Director State Aid Certification
  • Form F: Application for State Aid to Public Libraries (07 NCAC 02I .0201, all)
  • Long-Range Plan (07 NCAC 02I .0201, 10)
  • Trustee Bylaws (07 NCAC 02I .0201, 9)
  • Submission of Public Library Survey
  • Submission of Comprehensive Annual Financial Report (CAFR) - (07 NCAC 02I .0201, 8). Due March 31 of the following year (e.g., CAFR for FY20/21 is due by March 31, 2022.)

Other requirements

  • Regional library systems must also have on file with the State Library, interlocal agreements which establish the regional library system. Interlocal agreements consist of seven (7) parts. (07 NCAC 02I.0302).
  • A newly eligible library system who has previously not received state aid or wishes to re-apply for state aid must fulfill point 12 of Administrative Code 07 NCAC 02I .0201:

12. Meet the following stipulations when establishing a new library or re-establishing eligibility for the Aid to Public Libraries Fund:
 

  1. meet all requirements of this Section on July 1 of the year prior to the fiscal year that the library plans to receive state aid;
  2. continue to meet all requirements of this Section from July 1 to June 30 of that year, which shall be known as the demonstration year; and
  3. file a full application for state aid by the June 30 deadline at the close of the demonstration year in order to receive state aid in the next fiscal year.

 

Audit

Is a 990-form acceptable and/or can replace the requirement for an audit?

ANSWER: No. The requirement for an audit cannot be replaced by a 990 form.

What are the requirements for the State Aid audit?

ANSWER: An audit is required according to the Administrative Code, 07 NCAC 02I .0201 item (8), “Provide to the State Library of North Carolina an annual audit of the political subdivision(s) funding the library consistent with generally accepted accounting principles.” The State Library’s auditing agency may elect to review audit working papers to determine that audit tests are adequate.

The GAO 2018 Revision of the Government Auditing Standards – also known as the Yellow Book – are in effect for the fiscal year ended June 30, 2020. Any unit of government that expends $100,000 or more in state or federal funds in a given fiscal year must have a Yellow Book audit.  (Source) Local governments and public authorities that have expended $500,000 or more in State financial assistance must have a single audit performed in accordance with the State Single Audit Implementation Act.

In accordance with federal requirements, all entities that expend $750,000 or more in federal financial assistance must have a single audit performed in accordance to OMB Uniform Guidance, Subpart F (2 CFR 200 Subpart F ).

Audits must be completed by Certified Public Accountants. The Schedule of Expenditures of Federal and Awards (SEFA) is an important part of the reporting package required by the Uniform Guidance (2 CFR 200.510(b)). The auditor is required to determine and provide an opinion on whether the SEFA is presented fairly in all material respects in relation to the auditee’s financial statements as a whole. The information in the SEFA serves as the primary basis for the auditor’s major program determination which is a key component of performing a single audit.  State Aid funds must be recorded on a separate line item as specified in the SEFA.

Maintenance of Effort

What is Maintenance of Effort (MOE)?

ANSWER: Libraries must secure operational funds from local government sources at least equal to the average amount budgeted and available for expenditure for the previous three years. Funds spent by local governments on behalf of a library (in-kind contributions) can be considered as local operating funds when determining Maintenance of Effort. The goal of the MOE form is to ensure that your local community and county are supporting you, monetarily and/or with in-kind services. 

Do not include in MOE:

  • State Aid appropriations
  • Programs that are federally funded such as e-rate and LSTA
  • One-time expenditures or capital outlays. One-time expenditures could include major technology upgrades, maintenance and repair expenditures, furniture, replacing and repairing roofs, replacing carpet, replacing flooring tiles, replacing ceiling tiles, certain landscaping projects, and painting of buildings/rooms. There could also be a multitude of other expenditures that could be considered “one-time” costs including contracted services for special projects or programs that do not occur every year; costs for pilot programs, etc.

What happens if Maintenance of Effort (MOE) is not met?

If the amount budgeted and available for expenditure by local government is below the average of the previous three fiscal years, a grant to a local library system from the Aid to Public Libraries Fund shall not be terminated, but shall be reduced proportionately by the Department of Natural and Cultural Resources. State funds shall not replace local funds budgeted and available for expenditure for public library operations. (Administrative Code, Title 7, Chapter 2, Subchapter 2I, Section .0201(4))

What are In-kind contributions on the Maintenance of Effort form?

ANSWER: Funds spent by local governments on behalf of a library may be considered as local operating funds when determining Maintenance of Effort. For examples and use of in-kind contributions for State Aid, please contact cotina.jones@ncdcr.gov.

Funding for equipment purchases, for example security cameras, has been given to the library and placed in the library’s budget. Should this money be included as part of Maintenance of Effort in that the funds were not from the County?

ANSWER: These types of funds are considered  to be “local” funds and should ordinarily be included. However, the amount of a library’s local government appropriation reported on the Maintenance of Effort form should exclude any one-time expenditures. If equipment purchases can be considered as “one-time expenditures”, they should not be included in MOE calculations.

What is the State Library’s definition of “capital outlay”?

ANSWER: Capital Outlays are one-time expenditures to include major technology upgrades, installation of IT systems, maintenance and repair expenditures (installing elevators, doors, ramps, etc.), furniture, replacing and repairing roofs, replacing carpet, replacing carpet, flooring, and/or ceiling tiles, certain landscaping projects, painting of buildings/rooms, parking lot spaces, and replacing outdoor lights. There are a multitude of other expenditures that could be considered “one-time” costs including contracted services for special projects or programs that do not occur every year; costs for pilot programs, etc.

Electronic equipment was purchased using e-rate reimbursement funds. These funds are a part of our budget. Should these funds be included in our MOE calculation?    

ANSWER: No, you would not include this. E-rate is a special federal grant program.

Do e-rate reimbursement funds get counted as capital outlay?

ANSWER: No, they should not be included at all.

General State Aid Requirements

What are the requirements for interim directors?

ANSWER: The procedures for interim directors are based upon eligibility requirement 07 NCAC 02I .0201 (3): “Employ a full-time library director having or eligible for North Carolina public librarian certification. Full-time means working a minimum of 35 hours per week.” Selecting an interim director provides the opportunity to maintain state aid compliance:

  1. An interim director should be named within 30 days after the current library director leaves.
  2. The interim director should be a staff member who is already familiar with managing day-to-day operations of the library system rather than a board member or a staff committee. This will ensure there is one named person who can sign any necessary paperwork with the State Library in such areas as NC Cardinal Memorandum of Agreement (MOA), scholarship grants, State Aid, etc.
  3. This individual should possess an MLS and it is recommended, but not required, they hold a North Carolina public librarian certification. 

The primary reference for interim director requirements are based upon General Statute § 125-7, Article 14 § 153A-267, and Administrative Code 07 NCAC 02I .0201. 

Why did our State Aid increase when we didn’t meet our MOE?

ANSWER: There are two factors that impact a library’s State Aid allocation – (1) an increase/decrease in population and (2) an increase/decrease in per capita income for the county.

Was there a recurring increase in State Aid last year, and if so by how much?

ANSWER: We received a recurring increase of $1,000,000 in 2015-16 for a total State Aid appropriation of $14,207,033. We should continue to receive this amount until the legislature makes a change in a future budget.

How can I use the State Aid payments I receive?

ANSWER: Block and per capita equalization grants may be used for materials, salaries, equipment, and operating costs. Grants may not be used for capital expenditures, which the Division of the State Library defines as construction costs and is colloquially referred to as bricks and mortar. (Administrative Code, Title 7, Chapter 2, Subchapter 2I, Section .0202)

What happens to my State Aid payments if my library has unencumbered these funds or does not spend them fully?

ANSWER: Libraries must expend funds as authorized in their adopted budget. Any library having an unencumbered operational balance of more than seventeen percent (17%) of the previous year’s operating receipts will have the difference deducted from its state allocation. (Administrative Code, Title 7, Chapter 2, Subchapter 2I, Section .0201(6))

My Regional Governing Board wishes to change their Bylaws from staggered terms to regular 3-year terms. Can they do this?

ANSWER: Regional Library Boards of Trustees are governed by Administrative Code, 07 NCAC 02I .0303. Section .0303 (b) states, “Terms of officers and members shall be limited and staggered to assure continuity as well as change. No individual member shall be appointed to more than two consecutive terms, and no single terms shall be longer than six years.”

Are County and/or Municipal Advisory Board bylaws governed by any legislation as Regional Systems are?

ANSWER: County and Municipal Boards do not have general statutes or administrative code similar to regional libraries. However, to be State Aid eligible, county and municipal library boards must be in compliance with Article 14, Chapter 153A of the NC General Statutes. (Article 14 153A-265 -266)

What is NC Public Librarian Certification?

ANSWER: One of the requirements for State Aid Eligibility is that the director holds North Carolina Public Librarian Certification. In North Carolina, the standards for certification of public librarians are set by the North Carolina Public Librarian Certification Commission, as authorized by General Statute 143B-67. If you don't already hold this certification, it's critical that you submit an application for certification within your first year as library director.

We have hired a Library Director who does not hold a Master of Library Science degree. What are the implications for losing State Aid eligibility?

ANSWER: Loss of State Aid eligibility affects receipt of monthly State Aid payments, loss of LSTA funding grants, and loss of access to statewide resources, for example, NC LIVE and NC Kids. A list of lost benefits includes, but are not limited to:

  • Ability to apply for LSTA funding grants (Library Services and Technology Act of 1996 20 U.S.C. Section 9122)
  • Ability to participate and access NC LIVE resources
  • Ability to participate in statewide State Library programs
  • Continuing Education Scholarships and grants
  • Summer Reading programs
  • North Carolina Public Library Directors Association (NCPLDA)
  • Membership in NCPLDA
  • Access to NCPLDA listserv
  • Access to NC Kids Digital Library
  • Ability to apply for E-rate discounts
  • Ability to be a member of NC Cardinal Resource Sharing Consortium
  • IMLS recognition of library as a public library

The Fiscal Year 2022-2023 State Aid application packet is available and completed applications are due by close of business day on September 16, 2022.

The State Aid Application Packet includes four (4) PDFs available for download.

A completed State Aid Application includes the submission of six (6) different documents, three (3) supplemental reports, and completion of the Public Library Statistical Report

  • FORM A - Local Funder Maintenance of Effort Report & Declaration
  • FORM B - Maintenance of Effort for In-Kind & Monetary Contributions
  • FORM C - Average Maintenance of Effort Report & Declaration
  • FORM D - Assurance of Professional Librarians Whose Salaries are Funded with State Money
  • FORM E - Library Director State Aid Certification
  • FORM F - Application for State Aid to Public Libraries

Supplemental reports due 9/16/22:

Five-year Strategic Plan
Board of Trustee Bylaws

Supplemental reports due 3/31/23:

Financial Report ending June 30, 2022.

The omission of any of the above documents or a late submission of Public Library Statistical Report may delay State Aid payments.