The Board of Trustees of the Niagara Falls Public Library is once again disputing it’s running in the red financially, despite being cited in a recently released auditor’s report.

According to the city’s bookkeeping records, the library system exceeded its budget by $54,000 in 2006 and remains about $32,000 over budget as of last month. Library board members disagree, saying there’s a yet-to-be-identified accounting discrepancy between their records and the city’s records.

The city’s library system includes both the Earl W. Brydges building on Main Street and the LaSalle branch on Buffalo Avenue. The annual budget funded through taxpayers’ money has remained around $1.6 million in the past few years, said Library Director Betty Babanoury.

Babanoury pointed out the library had remained at budget from 2003 to 2005, but was told it exceeded its allocation in 2006, despite the board’s records showing no overexpenditures.

“I don’t know why we’re suddenly over budget for the last two years,” she said. “We’re doing everything the exact same way.”

The alleged $54,000 shortfall was made public last year after former Mayor Vince Anello sent the City Council a resolution saying the library had overspent its budget and a money transfer was needed to cover the difference.

That deficit was reduced by $22,000 at the end of 2007 because the library’s revenues exceeded expenditures, but the system is still operating in the red, according to an audit of city finances released Monday by Freed Maxick & Bataglia, PC.

Babanoury and library trustees are challenging those findings as well as financial reports the city has sent to the state Comptroller’s Office.

City Controller Maria Brown was not available for comment Thursday. Niagara Falls Mayor Paul Dyster said he could not comment on the library board’s contention the city’s budget figures are incorrect, but pointed out all of the records were reviewed by an outside auditor.

“(The auditors) tell you if you’re in the red or in the black,” the mayor said.

Dyster said the city is prepared to cover the library’s apparent fund deficit, which currently stands at $32,354, according to the report sent to the state comptroller. A resolution to transfer the funds will soon be sent to City Council for vote.

“We’re not going to leave the library in a lurch,” Dyster said.

Meanwhile, library officials are still trying to figure out the cause of the discrepancy. Funds to pay for the libraries’ expenses, such as payroll, supplies and utilities are funneled through a city account month-to-month, a system that causes confusion and needs to be changed, library board members said. For example, city records show the library only spent a total of $197.32 in all of 2007 on library materials (books, magazines, DVDs, etc.). However, the library actually spent nearly $150,000 on that line, said Mary Ruth Davis, principal finance clerk for the library board.

Those type of discrepancies occur because the city and library have two different accounting systems, Babanoury said, and it usually takes the city longer to post expenditures on its reports. Adding to the confusion is a process where the library pays some of its bills and the city pays others.

“It’s kind of like a married couple using one check book,” said board President Dolores Marino. “We know we are within our budget, according to our numbers. If the city is paying things out without us knowing about it, that could be the cause (of the budget discrepancy).”

To settle any future disputes, the library board has requested the system’s entire annual budget be transferred to its account at the start of the year, allowing the board to pay all of the invoices and expenditures. In the past, the city has not been receptive to the full transfer, opting to instead leave the bulk of the money accruing interest in city accounts.

“It is not an unusual request to have all of the funds transferred to the library at the beginning of the (fiscal) year so they are not co-mingling with the city’s funds,” Babanoury said. “We are using taxpayers’ money and I don’t want there to be a discrepancy between the library’s bookkeeping and city’s bookkeeping.”

Dyster said he agrees with the idea of transferring the entire budget funds to the library once a year, and the city is in a position to do so, but the library first needs to acquire a federal tax identification number.