Using Budget instead of Other

Discuss questions around local unit policies for budgeting, reconciling, etc. This forum should not contain specific financial or membership information.
jdlessley
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#21

Post by jdlessley »

jdlessley wrote:Please note that when a contribution is made, a Tithing and Other Offerings slip must be filled out. Also note the categories on that slip for which donations can be made (I know, those listed are not all inclusive.).
...
There is no provision for a budget account deposit.
Alan_Brown wrote:I would take slight exception to this last statement. It's fine in the context of the scenario we are discussing, but is not true in every case.

There are indeed two situations where we are specifically instructed to make a deposit to the Budget category. The first involves correcting problems in the usage of the Other account and is documented in the training lesson [url=C:\Program Files\LDS Church\Training\en\Other_Category\index.htm]Understanding and Using the "Other" Category:[/url]...

I would note that there are other ways of correcting such problems, but nonetheless, a provision for depositing funds in a Budget subcategory is documented.

The second situation deals with unused funds after an advance has been issued, and is documented in the training lesson Handling Church Expenses:
Since I was talking about contributions by an individual or from a fund-raiser and not correcting problems or making account adjustments I will stand by my statement.
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kennethjorgensen
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#22

Post by kennethjorgensen »

When our leader announced that all our youth activities (including camp) would be funded from the budget allowance (with the exception of group fund-raising) I never imagined it was a discussion like this we would automatically avoid ;)
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#23

Post by lajackson »

dkjorgi wrote:When our leader announced that all our youth activities (including camp) would be funded from the budget allowance (with the exception of group fund-raising) I never imagined it was a discussion like this we would automatically avoid ;)
I agree. It has been nearly 19 years now since the announcement was originally read in sacrament meeting. We got all of this sorted out in the first year of the new program (1990).

Of course, since it has been that long, we have a new generation just beginning to learn the same principles.
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Using Budget Instead of Other

#24

Post by SmithGW »

Just another piece of information about the relationship between "Budget" and "Other." The online help in MLS says:

The "Other" category of your checking account is used for pass-through funds, those generally raised or collected to pay for goods or services. Examples are Church magazines or girls' camp. These funds are deposited and then disbursed by check. Most pass through quickly, although some may accumulate if they are earmarked for a future activity. Funds collected and not used should be returned to the donors. If funds in the "Other" category go to a negative balance, use budget funds to bring the balance back to zero.
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#25

Post by jdlessley »

dkjorgi wrote:When our leader announced that all our youth activities (including camp) would be funded from the budget allowance (with the exception of group fund-raising) I never imagined it was a discussion like this we would automatically avoid ;)
lajackson wrote:I agree. It has been nearly 19 years now since the announcement was originally read in sacrament meeting. We got all of this sorted out in the first year of the new program (1990).

Of course, since it has been that long, we have a new generation just beginning to learn the same principles.
It may be a surprise to some that not all ward budgets are sufficient to support all youth activities, including camp. In our stake there are wards (nearly all) in which their entire annual budget for young men is less than the cost of the cheapest camp available for all the young men who desire to go to camp. The same is true for young women. Therefore those units must resort to the process described in the CHI and either have the individuals contribute the funds themselves or have fund-raisers - in that order. Since a significant number of young men/young women and their families cannot provide the funds, fund-raisers are necessarily the result. Therefore they must deal with this issue.

dkjorgi, your post is a bit confusing to me. From it I presume your unit funds all youth activities, including camp, is that correct? So how is it that you automatically avoid a discussion like this if you have group fund-raisers? Fund-raiser funds must be deposited into an Other account, correct? What you intended to say and what came accross to me do not make sense. Can you clarify?
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ponders-p40
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#26

Post by ponders-p40 »

Alan_Brown wrote:If you read the entire thread, you will see that after further research, I agreed that the funds should be deposited in Other. So I don't think this thread leaves it as acceptable to deposit such funds in the Budget category. I don't agree with your reasoning that the prohibition on mixing personal and Church funds is relevant to the question, but since we both came to the same conclusion, I see no harm in agreeing to disagree on the particular method we used to arrive at that conclusion.
I did consider my question largely answered early in the conversation based on the online training. However, I must admit to being a little disappointed that the answer was "because the training says so". I'd ideally like to understand why the training says so because it gives me better insight into the system and its guiding principles.

One theory was discussed, that of keeping "personal" and Church funds separate from each other, but I'm not convinced that's the real reason, especially given (among other things, including some that have been discussed) how amorphous the Other account is (with both donation & non-donation sub-categories).

In my mind it is more convenient to track YW Camp fully in a Budget sub-category because
  1. Using a single report I can tell the Bishop exactly how much money has been spent & how much is left.
  2. I can pay for all expenses out of a single account.
  3. I can avoid writing a check to move money between Budget/Other if I overdraw the Other account
It's just a lot cleaner and I therefore fully understand why the units in question have chosen to do this. To get around one of the issues raised earlier I could even ask members to cross out Other and write Budget:YW Camp.

My point being: The reason not to do this needs to be fairly compelling. It has to overcome all the conveniences I've mentioned above, otherwise people are going tend to do this independent of what the policy is.

BTW, just so it's clear where I'm coming from: I've been a ward finance clerk, and a stake finance clerk, but I'm currently the vice-chairman of the audit committee and what I'm after is something that's compelling enough that people will _want_ to do it the right way despite the fact that it's harder to do so (IMO).

Finally, it may be possible that the inconveniences of the right way could be addressed by making changes to MLS such that doing it the right way isn't so painful. Does this forum have any influence on the MLS development team?
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#27

Post by mkmurray »

ponders wrote:Does this forum have any influence on the MLS development team?
It most certainly does.
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#28

Post by crislapi »

Pilotfly wrote:And just to further clarify (at least from what I have experienced as a Ward Clerk and now the Stake Clerk), if an individual fills out their donation slip and puts money into a budget item it goes to Salt Lake, it does not go to the ward budget. One of our wards found that out the hard way. That is why following the Handbook and looking at the online lessons is well worthwhile.
Alan_Brown's reply:
Alan_Brown wrote: If you physically write a check from Other and deposit it into your ward's budget you definitely are increasing your budget allowance.
I wanted to point out a clarification to Pilotfly and Alan_Brown's comments (as I currently understand it).
Credits to the budget category, whether from a deposit, voiding a check, or changing categories (ie correcting categories for a fast offering check accidentally cut from budget), are credited against the budget expenses. You shouldn't increase the budget allocation by the credited amount.

For example, say our activities budget is $1000 and our total expenses are $450. We have $550 remaining for the year. Then say we deposit $200 into it. the activities budget is still $1000, but now the total expenses is $250, meaning we now have $750 remaining for the year. The adjustment is automatically made by MLS to the expenses when the deposit/correction/whatever is created. Not knowing that, a clerk may try to compensate for the credit by increasing the budget. So if I also increase my budget by $200 so it is now $1200, the total expenses are still $250, but I've artificially increased my budget an extra $200 (2X the credit), meaning according to MLS I now have $950 remaining for the year. This may be how your wards managed to blow the stake's budget...

I'd also point out that at the ward level, some of these credits show up in the miscellaneous section of the CUFS and need to be manually entered in MLS. If they are not, then increasing the budget gives the appearance of doing the same thing. However, on the stake financial summary the credits and expenses are combined and the stake sees the net expenses. From their viewpoint, increasing the budget gives you double the money back.

What threw me this year was when we had two wards with a net credit instead of expense. One was from changing check categories, the other was because of a massive return of items to the distribution center.

Main point - deposits to budget don't "increase" your budget per se (the total budget stays the same), but they do offset expenses, allowing you to spend more than you were originally allotted.

Now for some questions of my own:
Alan_Brown wrote:If you transfer funds from Other to Budget or vice versa, it most definitely will show up on the Church Unit Financial Statement.

If you physically write a check from Other and deposit it into your ward's budget you definitely are increasing your budget allowance.
I'm curious how you transfer from Budget to Other. Do you use "Enter Transfer"? I meant to check last night but didn't have time, but I seem to remember than if I select a budget item in one of the fields of "Enter Transfer", I can only select a budget field in the second field. Same for other - if one field is "Other", then the second must be "Other" as well.

I was also under the impression we had to cut checks to move money between budget and other. I seem to remember once being able to finagle MLS into allowing me to transfer between the two, but it was complicated, and now I'm curious if I just tricked MLS and the money never actually moved. Any thoughts? I'll look into this one on my end to see what happened with the money.

This has been a great thread. I've had a lot of questions on this subject and I've enjoyed reading the posts. Thanks everyone.
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#29

Post by jdlessley »

ponders wrote:I'd ideally like to understand why the training says so because it gives me better insight into the system and its guiding principles.


In my mind it is more convenient to track YW Camp fully in a Budget sub-category because
  1. Using a single report I can tell the Bishop exactly how much money has been spent & how much is left.
  2. I can pay for all expenses out of a single account.
  3. I can avoid writing a check to move money between Budget/Other if I overdraw the Other account
I can see the points you are making about conveniences. Unfortunately the Church does not explain all the intricacies and details of why they have set up the financial workings to the general membership - and probably for a variety of reasons. I trust that the accountants and lawyers the Church employs have far greater reasons and understanding that would be quite interesting to hear. Unless a Church employee who works in the Church financial department responds in this forum we are not going to get the official reasons but rather conjecture (and most of that based on experience) from forum subscribers.
ponders wrote:The reason not to do this needs to be fairly compelling. It has to overcome all the conveniences I've mentioned above, otherwise people are going tend to do this independent of what the policy is.
The reason for not doing this, to me, is because we sustain the leaders of the Church and they have provided us with the policies and procedures to accomplish this part of the work. Many times we must operate on faith without knowing the details of why. Of course we can always ask why and hope to get a response.
ponders wrote:Finally, it may be possible that the inconveniences of the right way could be addressed by making changes to MLS such that doing it the right way isn't so painful.
I would expect that the MLS development team is in close contact with the Church financial experts to ensure that MLS conforms to the practices necessary to ensure proper handling of finances to meet the needs of the Church programs and the laws of the nations in which it has financial transactions. But then again we can only voice our concerns and hope a Church employee in a position to comment can shed some light or initiate a change if appropriate.
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#30

Post by aebrown »

crislapi wrote:I wanted to point out a clarification to Pilotfly and Alan_Brown's comments (as I currently understand it).
Credits to the budget category, whether from a deposit, voiding a check, or changing categories (ie correcting categories for a fast offering check accidentally cut from budget), are credited against the budget expenses. You shouldn't increase the budget allocation by the credited amount.
Thank you for that clarification. It would have been better if I had worded my statement as "If you physically write a check from Other and deposit it into your ward's budget you definitely are increasing your available budget allowance." As you ably described, the budget allowance itself does not change.
crislapi wrote:I'm curious how you transfer from Budget to Other. Do you use "Enter Transfer"? I meant to check last night but didn't have time, but I seem to remember than if I select a budget item in one of the fields of "Enter Transfer", I can only select a budget field in the second field. Same for other - if one field is "Other", then the second must be "Other" as well.

I was also under the impression we had to cut checks to move money between budget and other. I seem to remember once being able to finagle MLS into allowing me to transfer between the two, but it was complicated, and now I'm curious if I just tricked MLS and the money never actually moved. Any thoughts? I'll look into this one on my end to see what happened with the money.
You're right. When I talked about "transferring from Budget to Other" I was responding to the last part of this statement:
Pilotfly wrote:... you cannot use MLS to transfer funds from an Other category to a Budget category (at least in my experience, however I may be wrong about this). In any case, it may look like you transfered funds from other to budget but it sure won't show up in the finance report sent by Salt Lake.
I don't know how to do a direct transfer from Budget to Other (or vice versa), so I probably shouldn't have even bothered to respond to a hypothetical that even the author said couldn't happen. You are right that if you initiate a transfer in MLS from Budget, then your only options for the "To" side of the transfer are Budget categories. You cannot transfer across major categories. What I was inartfully referring to was the other ways to transfer funds across major categories -- writing a check to the ward from one category and depositing it in another, or changing the category of a check or deposit. These aren't "transfers" in the MLS sense, but they do have the effect of transferring funds from one major account to another.

I seem to recall someone claiming they had done a transfer across categories, but I can't imagine how you would do that. MLS seems quite firm in requiring both sides of a transfer to be in the same. As you enter the "To" side of the transfer, your only choices are in the same major category as the "From" side; if you enter a "To" category and then go back and change the "From" to be in a different major category, the "To" category is erased.
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