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Finstmt Shell THE TRUSTEES OF THE PUBLIC LIBRARY OF THE CITY OF BOSTON (A COMPONENT UNIT OF THE CITY OF BOSTON) FINANCIAL STATEMENTS AND REQUIRED SUPPLEMENTARY INFORMATION YEAR ENDED JUNE 30, 2017 THE TRUSTEES OF THE PUBLIC LIBRARY OF THE CITY OF BOSTON (A COMPONENT UNIT OF THE CITY OF BOSTON) TABLE OF CONTENTS YEAR ENDED JUNE 30, 2017 INDEPENDENT AUDITORS' REPORT 1 MANAGEMENT’S DISCUSSION AND ANALYSIS 3 BASIC FINANCIAL STATEMENTS STATEMENT OF NET POSITION 15 STATEMENT OF ACTIVITIES 16 GOVERNMENTAL FUNDS – BALANCE SHEET 17 GOVERNMENTAL FUNDS – STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES 18 RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TOTAL FUND BALANCES TO THE STATEMENT OF NET POSITION 19 RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS 20 NOTES TO THE BASIC FINANCIAL STATEMENTS 21 INDEPENDENT AUDITORS' REPORT The Honorable Board of Trustees of the Public Library of the City of Boston Boston, Massachusetts We have audited the accompanying financial statements of the governmental activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of The Trustees of the Public Library of the City of Boston (Library), a component unit of the City of Boston, Massachusetts, as of and for the year ended June 30, 2017, and the related notes to the financial statements, which collectively comprise the Library’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors’ Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the financial statements of the Boston Public Library Foundation, Inc. (Foundation), which is discretely presented in these financial statements. Those statements were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for the Foundation, is based solely on the report of the other auditors. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. An independent member of Nexia International (1) Opinions In our opinion, based on our audit and the report of other auditors, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of the Library, as of June 30, 2017, and the respective changes in financial position thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis (located on pages 3 through 14) be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated October 13, 2017 on our consideration of the Library’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Library’s internal control over financial reporting and compliance. CliftonLarsonAllen LLP Boston, MA October 13, 2017 (2) THE TRUSTEES OF THE PUBLIC LIBRARY OF THE CITY OF BOSTON (A COMPONENT UNIT OF THE CITY OF BOSTON) MANAGEMENT’S DISCUSSION AND ANALYSIS YEAR ENDED JUNE 30, 2017 As management of the Trustees of the Public Library of the City of Boston (Library), we offer readers of these financial statements this narrative overview and analysis of the Library’s financial activities for the fiscal year that ended on June 30, 2017. Background of The Boston Public Library The Boston Public Library (BPL) is an extraordinary institution that has served the citizens of Boston since 1848. Founded as the first municipal library and the first public library to lend books, the Boston Public Library is dedicated to the advancement of learning and is “Free to All,” as is carved in the façade of the historic McKim building in Copley Square. The BPL encompasses a Central Library, twenty-four vibrant neighborhood libraries, a robust website, and classes and programs for all ages. The Library’s collection of more than 23 million items includes circulating books, eBooks, DVDs, and music, as well as research and special collections that encompass rare manuscripts, prints, photographs, drawings, maps, posters, and more. The Boston Public Library’s Kirstein Business Library and Innovation Center, Norman B. Leventhal Map Center, and Collections of Distinction such as the personal library of John Adams, the Anti-Slavery collection, the Thomas Pennant Barton Collection of Shakespeare, and the Boston Pictorial Archive attract researchers and scholars from across the city and around the world. In fiscal year 2017, Boston Public Library hosted 12,665 public programs reaching 235,868 people, received 9.8 million visits to its website, and loaned 4.9 million items. Of those 4.9 million lends, more than 1.6 million were digital downloads of e-books and audiobooks. In the same fiscal year, the Boston Public Library helped 82,911 Massachusetts residents – adults, children, and teens – sign up for new library cards, hosted 522,428 free computer sessions, enabled 577,675 free wireless internet sessions, and had more than 3.8 million visitors. In addition in fiscal year 2017: Leadership Change. Under the new leadership of Boston Public Library President David Leonard, in FY17 Boston Public Library successfully completed the Central Library Renovation, the Jamaica Plain Branch renovation, began or continued several neighborhood branch planning and design projects, and continued the renewed commitment to the Library’s intellectual control and custodianship of its special collections items that began in June 2015. Management Reorganization under President David Leonard. Following a 7-month period of listening sessions with management, union leadership, and staff, BPL President David Leonard (appointed June 2016) implemented the first phase of an institutional reorganization designed to streamline and optimize reporting relationships,
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