FY 22

FOLIO has just completed its first fiscal year, July 1, 2021-June 30, 2022, as an SMLLC under the Open Library Foundation (OLF).  Prior to this fiscal year, FOLIO financial transactions were conducted by the OLF through a single OLF bank account.

After the establishment of the FOLIO Community, Product, and Technical Councils in April 2021 the FOLIO Manager, Secretary, and Treasurer roles were filled. The OLF Treasurer, Scott Anderson, set up a FOLIO checking account and FOLIO credit card in May so that FOLIO could begin paying its own bills on July 1, 2021.  We began sorting out which OLF bills actually belonged to FOLIO and transferred their billing to FOLIO.  We had hoped to have the OLF and FOLIO finances disentangled by the beginning of the fiscal year, but we were not able to do so until much later in the year.

FOLIO began sending membership invoices in May in order to have funds available for paying expenses on July 1, so operationally our first fiscal year was 14 months.  Under the accrual method of accounting, income received from invoices dated prior to the fiscal year is not counted as income in the new fiscal year.  This is why the Good Steward Financial Company’s report (Figure 2) shows only $48,950 in income and a net loss of over $380,000 for FY22.  The membership invoices for FY23 will all have a FY23 invoice date so the income and expenses will be reflected accurately.

Figure 1 gives an overview of the income and expenses for FY22 that will be recurring in FY23.  Income came from three sources: membership fees; extra funding from EBSCO to underwrite technical expenses; and supplemental funds from members to underwrite developer expenses. 

Expenses fell under three categories: technical resources (AWS, Packet, TestRail, GitHub, OCLC); FOLIO-funded developers; and membership expenses with OLF.

Figure 1

There were two FOLIO-funded developers at the beginning of the year but one took another position.  FOLIO would likely have had a shortfall if we had paid two full-time developers.

The AWS costs are another area of concern.  The July 2021 bill was just under $12,000 but the June 2022 bill was just over $18,000.  The increase came from new environments needed for the development teams but it was an unexpected cost increase.  Fortunately Peter Murray applied for and received AWS grants for open source projects, resulting in no bills for five months.  If we had paid full AWS costs there would have been no surplus funds at the end of the year.

Additionally, FOLIO had some other activity funded by other entities:

• FOLIO hired a documentation consultant and Leipzig University provided $134,000 for one year’s work, and EBSCO directly paid the consultant for a time to finish some parts of the work
• The German consortium hbz provided $100,000 for a developer working at Duke University
• Google “Season of Docs” provided $12,750 for interns to assist with the documentation

These projects involved pass-through payments with FOLIO or OLF serving as the middleman in the funds transfers so this is another area where the funds were entangled.

FOLIO ended the year with a surplus of $90,000 and after consulting with the GFS accountants the Community Council will put the surplus in a reserve fund.  This would be enough to cover three months of operating expenses.

When FY22 began, nobody had a true picture of FOLIO’s basic costs or if the project could afford to cover them.  For FY23 we are on sound footing.  We have $370,000 in membership commitments, and ⅔ of those funds have already arrived.  EBSCO is increasing its underwriting of the AWS costs.  Budgeting for one full time developer and full AWS costs at their current level, we will have sufficient funds for the recurring basic costs, with the likelihood of some budget surplus again.

Figure 2

Figure 3