>Is there a rule-of-thumb about the amount of operating reserve funds 
>a museum should hold over from year to year? A year's budget? Six 
>months? Less? More? Is there a legal limit on how much you can carry 
>over? Does it matter if you also have capital and endowment reserves?

You need to check on what the rules are for carryover of funds with 
your parent agency. If it's a government agency (county, city, 
state), there may not be a way to carry funds forward.

There is also the risk that you will be told it is OK to carry money 
forward and it will magically disappear before the next fiscal year 
due to "other needs", a fiscal "crisis", a change in administration 
or bureaucrat (i.e., the person who said OK leaves, retires, quits, 
dies and their replacement does not honor the agreement). Thus, 
carrying funds forward can be risky.

IF you can carry forward with a good likelihood of keeping your 
funds, a reserve is a VERY good thing to have. Certainly a 5-10% 
reserve of your total budget would be ideal, though one cannot always 
keep that amount lying around and if you do, higher administrators 
could say apparently you do not need the budget you have anyway and 
cut your budget.

This is why most people will spend their year-end funds. In my 
museum, we were generally able to carry forward funds from year to 
year in response to a state regulation that was designed to avoid the 
sudden "buy anything" frenzy at the end of the fiscal year. One year 
we lost the money though, which makes one very wary of carrying 
forward too much.

If you have things that are vital to the museum, buy them with the 
money that you have in hand. Put aside at least some portion for a 
future reserve if you can carry funds forward and then hope that the 
money shows up in next year's budget.

Good luck.

>
>We're approaching the end of the fiscal year with a small surplus, 
>which can either go into the operating reserve account, or be used 
>for some postponed but useful purchases. We have two more days to 
>decide!
>
>Thanks.
>
>Carol Ely
>Executive Director
>Historic Locust Grove
>Louisville, KY
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-- 
Dr. Michael A. Mares
Research Curator
Sam Noble Oklahoma Museum of Natural History
2401 Chautauqua
University of Oklahoma
Norman, OK  73072
phone: 405-325-9007
fax: 405-325-7699

=========================================================
Important Subscriber Information:

The Museum-L FAQ file is located at http://www.finalchapter.com/museum-l-faq/ . You may obtain detailed information about the listserv commands by sending a one line e-mail message to [log in to unmask] . The body of the message should read "help" (without the quotes).

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