THE Unit Costs in a Selected Group of Introduction HE INCREASING frequency with which school administrators and fiscal officials who administer public funds are asking the question about the cost of school library operation shows the urgent need for a unit cost study in the field of school libraries. In her book, The Library in the School, Lucile Fargo says: Accurate data are hard to find, even when they exist. We know how much certain pieces of equipment cost; usable estimates on the cost of books are available; we have some data on salaries. But few public school systems . . . have gone to the trouble to segregate and to allocate on an accurate cost accounting basis their expenditures for particular departments or services. . It is no doubt because of the book keeping involved that so few statistical data are available to the student of school library finance or the board of education which very naturally asks, "How much is school library service going to cost us?” 1 Historical Background The need for inaugurating cost accounting methods in library administration has been recognized by leaders in the field for many years. The earliest efforts in this line were almost entirely in the field of cataloging. Sporadic attempts, beginning in 1877 and continuing to the present day, have been made to establish the cost of cataloging a book. 3 In 1877 Charles A. Cutter 2 estimated the cost of cataloging a book at 50 cents per volume. Whitney in 1885 made another estimate based on a study made in the Boston Public Library of 3534 cents per volume. William Warner Bishop, discussing the cost of cataloging in 1905, gave a résumé of the subject and quoted estimates which ranged from 5 to 60 cents per volume. It will be noted that these were all estimates. No attempt was made to analyze the work and to study the time element involved. 1 Fargo, Lucile F. The library in the school. 3d. ed. Chicago, American Library Association, 1939. p. 491-92. 2 Cutter, Charles A. Dr. Hagen's letter on cataloging. Library journal, 1: 216-20 Feb. 28, 1877. * Whitney, James L. On the cost of catalogues. ber-October 1885. Library journal, 10: 214-16, Septem Bishop, William Warner. Some considerations on the cost of cataloging. Library journal, 30: 10-14, January 1905. 421819°-42--2 1 In 1914, W. P. Cutter, reporting on a time study made in his library, discovered the astonishing fact that his library staff spent $65 per year of the institution's money in walking to and from the water cooler! In this report we find the first mention of a "time study" in relation to cost analysis. As a result of this report, a test was undertaken in a group of libraries in which they selected 100 titles representing the average degree of difficulty for the class of books usually handled, the time of the various operations connected with the cataloging, classification, shelf-listing, revision and checking, preparation of the cards for the catalogs and their filing, to be carefully noted and the cost of each operation to be estimated on the basis of the salary of the assistant concerned." The ultimate failure of this test grew out of the fact that the study became an "endurance test" rather than a typical sampling. No extraneous elements were taken into consideration and only actual time spent in cataloging work was recorded. The first approach to a "time and cost" study conducted over a period of time was made in the University of California library in 1927. Reporting on it, Miss Hand says, We have found out a great many things from our survey, and many of them we shall be able to turn to good account. If any librarian finds life becoming dull, it is recommended that he initiate an investigation of this kind in his own library: he may anticipate plenty of excitement, if no other result. But there ought to be other results, especially if several institutions of the same kind would conduct their surveys in the same way and would compare their findings.' The first actual cost accounting reported in connection with library work was done by Fremont Rider in the Olin Memorial Library at Wesleyan University. In his study, Rider adapted to library use methods already standardized by industrial cost accountants. His survey, covering a period of 3 years, took into consideration all phases of college library work and, in addition, raw materials, building overhead, depreciation, and rent. The next cost accounting study of lished was done by Robert A. Miller. which a report has been pubThis was a study of the labor Josephson, Aksel G. S. Committee on cost and method of cataloging. Library journal, 39: 598-99, August 1914. Hanson, J. C. M. The cataloging test in the University of Chicago library. Library journal, 40: 399, June 1915. 7 Hand, Elinor. A cost survey in a university library. Library journal, 55: 766, Oct 1, 1930. 8 Rider, Fremont. 1936. Library cost accounting. Library quarterly, 6:331-81, October Miller, Robert A. Cost accounting for libraries: A technique for determining the labor cost of acquisition and cataloging work. Unpublished thesis, University of Chicago, 1936. 193 p. ms. costs of acquisition and cataloging work in a university library. Miller's study was based on sound industrial cost accounting practices, although it took into consideration only two phases of library work, cataloging and acquisition. 10 Perhaps the most extensive undertaking in this field to date was the one completed by the Committee for the Study of Cost Accounting in Public Libraries under a grant from the Carnegie Corporation.1 In this project 37 public libraries, as participators-in-aid, cooperated with the Committee in submitting time and cost data. An evidence of the Federal Government's interest in cost accounting is noted in the annual report of the Librarian of the U. S. Department of Agriculture for the fiscal year ending June 30, 1940, which describes the cost-accounting study made of library operations. Quoting the budget officer, the report states: The essential purpose of this kind of data is to relate expenditures to services performed or results achieved and thus provide an opportunity for an intelligent and informed review of the expenditure proposals." These efforts, beginning with the first organized meeting of librarians in America, to discover the costs, per unit, of the services rendered by the library indicate the need for such figures and the need for standardized methods of library cost accounting. Louis Round Wilson in 1936 sounded the keynote for this need, in his forecast for the next 50 years: Libraries do not have devices at present by which they can accurately measure their administrative effectiveness or social significance. The next ten years will witness the development of a body of costs and measurements for various types of library service which will meet these adverse criticisms and enable the library to justify its support upon a basis of substantial facts, rather than of unproven assumptions.12 The results of this present study should help to develop this "body of costs and measurements" in the field of school libraries. At a conference of State School Library Supervisors held in the U. S. Office of Education in March 1939, the need for a unit cost study in school libraries was expressed. The present project is in part an outgrowth of this suggestion. Purpose The purpose of this study is to determine the costs per unit of the various activities carried on in the school libraries selected in 10 Baldwin, Emma V. and Marcus, William E. Library costs and budgets: A study of cost accounting in 37 public libraries. New York, R. R. Bowker Co., 1941. 196 p. "U. S. Department of Agriculture. Report of the librarian, 1940. By Claribel R. Barnett. Washington, U. S. Government Printing Office, 1940. p. 25. 12 Wilson, Louis R. The next fifty years. Library journal, 61: 257, Apr. 1, 1936. order to obtain data which might be helpful in establishing a standard cost of operation for school libraries in general. Unit costs in industry and in governmental agencies are determined by the process known as "cost accounting." As defined in Webster's dictionary cost accounting is: Any system of accounts which reveals the cost elements : incident to the production and distribution of a commodity or the rendering of a service. A definition, developed for governmental cost accounting in which library cost accounting is usually included, will perhaps explain more clearly the use of the term in this connection: Cost accounting is that method of accounting which provides for searching out and recording all of the elements of cost incurred, to attain a purpose, to carry on an activity or operation, or to complete a unit of work or a specific job.13 As these definitions indicate, cost accounting is concerned with the determining of the costs of one activity or one unit of work. Once it is possible to standardize these costs, when they have been broken down into units, they can be used as a basis for comparing costs of operation in institutions of varying size. Scope The present study has been limited to direct labor costs only. Consideration was given to the matter of including the cost of materials and supplies and an effort was made to collect the necessary financial data. However, it was found that this information is practically impossible to obtain since the librarian usually keeps no record of the cost of supplies and materials which are generally purchased for the entire school and distributed as the need arises. With the library housed in the school building, the computation of building overhead, which includes such items as rent, heat and light, janitorial labor, janitorial supplies, and repairs, involved certain data which were not obtainable within the limits of the project. Rent. whether actual or nominal, would have had to be computed as it would not have been paid out in actual cash; heat and light would have had to be estimated; and janitorial supplies, like library supplies, are distributed from a central agency and not allocated by departments. According to public-school practice 14 library books, as well as equipment, are considered as capital outlay, and as such should not be included in a study concerned with costs of units of service. 13 Tiller, Carl W. Governmental cost accounting: a study prepared for the Committee on cost accounting. Chicago, Municipal Finance Officers Association, 1940. p. 1. 14 . S. Office of education. Financial accounting for public schools. By Emery M. Foster. (In preparation.) Furthermore, in a study which attempts to compare costs of service in several institutions, costs in terms of direct labor time are more nearly comparable than costs in units of money, principally because of the variation in the staff salary schedules. Hence, the stress in this study is on units of labor time rather than on units of money, and all the elements, other than labor, contributing to the cost in money of a function have been eliminated. Unit Costs Before the study was undertaken several questions in regard to unit costs in a school library were formulated which it was hoped the completed study would be able to answer. These questions will indicate the units of service which were to be measured: 1. How much does it cost to answer a reference or information question? 2. How much does it cost to prepare a bibliography? 3. How much does it cost to instruct a class for one period in the use of the library? 4. How much does it cost to give advisory service to a person? 5. How much does it cost to circulate a book? 6. How much does it cost to acquire a title? 7. How much does it cost to check in and care for a periodical? 8. How much does it cost to classify and catalog a title? 9. How much does it cost to classify and catalog a unit of nonbook material? Selecting the Schools Methods and Procedure The first problem was to select the schools in which the data were to be collected. After some consideration it was decided that the schools to be sampled should be 4-year public high schools with a centralized library. The former qualification was necessary in order that the schools chosen should be as uniform as possible, the latter because of the difficulty in making a time study in a decentralized library. Other factors which were considered essential were: 1. A trained full-time librarian. 2. A book budget. 3. A collection cataloged and classified by an accepted system. 4. Availability of financial data and statistical records. The basis for inviting qualified schools to participate was found in the data made available by the Cooperative Study of Secondary School Standards.15 This project, coordinated by Walter Crosby 15 Cooperative study of secondary schools: General report. Washington, Cooperative Study of Secondary School Standards, 1939. p. 93-114. |