Voided Check Question

Discussions around using and interfacing with the Church MLS program.
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ffrsqpilot
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Voided Check Question

Postby ffrsqpilot » Fri Nov 20, 2009 12:56 pm

I recently tried to help one of our wards solve an ongoing issue with a voided check. I believe I took the right steps to correct the problem but now I am not so sure. The only way I will know for sure is wait until the November reconciliation takes place and see if it all works out to a "No unreconciled differences" result.

Rather than going into great detail about what the issue was and what I did to solve it I will use a hypothetical situation.

If a check is printed and then needs to be voided for what ever reason - what would be the result of going back into MLS and on the original entry removing the dollar amount of the original check?

Example - say a check is written for $50.00. It shortly comes to pass that the check (and expense) needs to be voided. The clerk thinking that it might be the right thing to do - goes and voids the check but at the same time goes back to the original entry and where the amount said $50.00, changes it to $0.00? The void entry shows a check voided for $50.00 but the line below it (the original entry) shows $0.00.

Somehow I can't wrap my pea brain around what it does to the system but for this one unit - it happened, it was carried on for about a year as a "temporary adjustment, and during a visit last week I worked through the problem with them and hopefully came to a resolution - just not sure if it was the right one.

Anyone?

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aebrown
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Postby aebrown » Fri Nov 20, 2009 1:09 pm

Pilotfly wrote:If a check is printed and then needs to be voided for what ever reason - what would be the result of going back into MLS and on the original entry removing the dollar amount of the original check?

Example - say a check is written for $50.00. It shortly comes to pass that the check (and expense) needs to be voided. The clerk thinking that it might be the right thing to do - goes and voids the check but at the same time goes back to the original entry and where the amount said $50.00, changes it to $0.00? The void entry shows a check voided for $50.00 but the line below it (the original entry) shows $0.00.


I don't think that one you are describing is really possible. You see, the act of voiding a check already automatically changes the dollar amount to 0, so I don't see how you could "go back into MLS and on the original entry remove the dollar amount of the original check." If you use View/Update Expenses and click on the reference number of any voided check, you will always see a check with an amount of 0.

Behind the scenes, what MLS really does is create another entry that you can see in the View/Update Expenses screen, with the same reference number, but with the opposite sign (thus setting the net amount to 0).

When there are Temporary Items that clerks carry forward for many months on voided checks, I often discover that the real problem is that they did not go to the Transfers tab of the Reconcile screen during the Reconciliation process and check off the transfer that was created for the voiding. Simply checking that transfer off as cleared eliminates the need for a Temporary Item and allows you to move forward cleanly.

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Postby nutterb » Fri Nov 20, 2009 1:36 pm

I can't speak to what would happen on the back end of things. I suppose, theoretically speaking, that if you set the value of the check to zero before you voided it, then it would mathematically be sound because negative zero is still zero. I don't know what the system would think if you voided the check first and then changed the value.

However, the theoreticals in this situation ought to be entirely ignored. It's my understanding that the premise of keeping financial records at all is to have a transparent accounting of how the funds have been managed. Changing the value of a voided check entirely violates that premise. I can just see someone going through your records and thinking, "Why on earth did this person write a check for $0.00?"

It will be a lot more clear what actually happened if you void the check. No need for historical confusion.

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Postby crislapi » Fri Nov 20, 2009 3:20 pm

As stated, when you void a check, the expense is grayed out and a transfer is created for the exact same amount but opposite sign. I don't think you can edit a voided check, but if I'm reading your example correctly, it sounds like you have the $50 transfer that voids the original expense, but then went and changed the original expense to $0, meaning now you have a $50 credit offsetting/voiding an expense of $0.

If that is in deed the case, I'd go back in and change the $0 expense back to $50. Otherwise, you have erroneously credited your budget $50.

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Postby aebrown » Fri Nov 20, 2009 3:48 pm

Pilotfly wrote:Example - say a check is written for $50.00. It shortly comes to pass that the check (and expense) needs to be voided. The clerk thinking that it might be the right thing to do - goes and voids the check but at the same time goes back to the original entry and where the amount said $50.00, changes it to $0.00? The void entry shows a check voided for $50.00 but the line below it (the original entry) shows $0.00.


Part of the confusion generated by this hypothetical scenario is caused by the phrase "at the same time." Obviously it is impossible to do both the voiding and the setting to 0 at precisely the same time. One has to be done before the other.

As I already explained, it is completely impossible to void the check and then set the value to 0 -- the amount is already 0 because the check has been voided. The amount field is disabled anyway.

So if there is any validity to this scenario, it must be the case that the check amount was set to 0 first. In this case, when you go to save the adjusted expense, you will be told "This expense contains no values," but if you really want to save it that way, you have the option to Continue. That will generate an adjustment that is sent to Church Headquarters.

I would think that whoever processes that adjustment would have some questions about the propriety of such an adjustment, and send back an MLS message requesting justification. One potential issue with this possibility is that the MLS message was sent by CHQ, but somehow slipped through the cracks at the ward. I've seen this happen multiple times, and the result is that the change didn't really happen at CHQ, even though MLS thinks it did. Fixing that issue requires a call to Local Unit Support. Until that is corrected at CHQ, there will indeed be a need to carry forward a Temporary Item in order to reconcile.

In any case, the adjustment to 0 creates in MLS the same entry as voiding a check -- another entry that can be seen in the View/Update Expenses list, with a positive value (opposite of all the expenses, which have a negative value). When you void a check with an amount of 0, there is no need to create an additional transaction, but the status of both the original expense and the adjustment transaction will be set to "Void." At that point, this pair of transactions will look exactly the same as the pair of transactions for a normal voided check. There is no $0 amount transaction in this case.

The only way I know of to create a $0 amount transaction is to change the category of the check. That will create an entry that has "(Multiple)" as the category. You can click on "(Multiple)" to bring up a screen that will say something like "Budget:Activities: $50" and "Budget:Scouts: -$50". If you later void such a check, you will see three entries on the View/Update Expenses screen: The original for -$50, the category adjustment for $0, and the void adjustment for $50. All three entries will have a category of "Void."

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Postby ffrsqpilot » Fri Nov 20, 2009 4:49 pm

It looks like in trying to set up a hypothetical situation and then with confusing verbiage I muddled things up. Here is what I encountered last Sunday: When I was tracking a continuing "Temporary Adjustment" that had been on going for almost a year I found it all related to a check cut last September 2008. The check was written to the Bishop to cover an out of pocket expense for the Boy Scouts. The Bishop signed the check and in accordance with policy he wanted to void that check and have another written that was signed by the clerk and one of the counselors. It appears that the original check was voided (not sure when) but for some reason was causing problems with the monthly reconciliation, hence the "temporary adjustment". When I looked in the "View/Update expense for 2008 it showed the original check with a balance of $0.00 and the void transaction right above (asterics) with a voided amount of $120.25. I had not seen that before so I clicked on the original check and it came up showing in the amount box - $0.00.

I wasn't sure when or how the original MLS check entry was altered to $0.00 but thought that was what was causing the ongoing "temporary adjustment". The page that came up allowed me to change the amount so I changed it back to $120.25 and clicked save.

Now, following Alan's narrative I am not sure how this came about that I could click on the original check number and make changes which probably brings up more questions than what I originally posed - "If a check is printed and then needs to be voided for what ever reason - "what would be the result of going back into MLS and on the original entry removing the dollar amount of the original check?"

By now I have probably confused everybody and makes me begin to wonder if maybe the scenario Alan posed was that perhaps a message was sent by Salt Lake asking what was going on but somebody missed it.

Bottom line - I'm confused about why:
1. the amount of the two entries shown in the View Transactions had different amounts?

and now

2. How was I able to go back in and click on the original check entry in MLS and change the amount back to $120.25?

Jim (confusedonthewesternslope)

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Postby aebrown » Fri Nov 20, 2009 5:25 pm

Pilotfly wrote:The Bishop signed the check and in accordance with policy he wanted to void that check and have another written that was signed by the clerk and one of the counselors.


This is a bit of a tangent, but what policy are you referring to? The only policy I know of that says a bishop can't be one of the two signers on a check made out to himself is related to fast offering checks. The bishop can sign his own temple recommend -- I don't see why he can't sign his own checks (with an authorized cosigner, of course).

Pilotfly wrote:Bottom line - I'm confused about why:
1. the amount of the two entries shown in the View Transactions had different amounts?

and now

2. How was I able to go back in and click on the original check entry in MLS and change the amount back to $120.25?


I don't know either answer. For any adjusted check, there should only be one clickable reference number (the adjustments with the same ref# cannot be clicked on). When you click on that reference number, you see the current net result of all the adjustments. For a voided check, the amount is 0 and the amount field is disabled.

I have no idea how you would be able to change the amount of a voided check. You did check to make sure the status was "Void", didn't you?

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Postby ffrsqpilot » Fri Nov 20, 2009 5:55 pm

I told you I was confused didn't I. :o

I honestly have to say that I didn't notice if the check was voided as I have to assume it was voided as the the line right above the original check in the View Expenses showed the Voided Check number and amount. Maybe the check wasn't indeed voided if I was still able to click on it and change the amount.....this is indeed confusing ..... I'll just wait till the November reconciliation gets done and see if the Unreconciled Differences comes to zero at which time I'll quit worrying about this.

As for the "policy" perhaps it is just our stake interpretation but the stake presidency has counciled all the bishops and branch presidents to have two other signatures other than their own on any check that is written to them. Likewise it is the same for the Stake President - when I write a check to him for reimbursement for mailings we always have myself and one of his councilors sign the checks. Must be just a stake thing that takes the fast offering policy a step futher.

Jim

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Postby aebrown » Fri Nov 20, 2009 10:38 pm

Pilotfly wrote:I honestly have to say that I didn't notice if the check was voided as I have to assume it was voided as the the line right above the original check in the View Expenses showed the Voided Check number and amount. Maybe the check wasn't indeed voided if I was still able to click on it and change the amount.....this is indeed confusing ..... I'll just wait till the November reconciliation gets done and see if the Unreconciled Differences comes to zero at which time I'll quit worrying about this.


It's possible that the check wasn't actually voided, but that the clerk thought that by setting the amount to zero, he was accomplishing the same thing. If that happened, then you would still be able to change the amount. It's easy enough to check when you go to View/Update Expenses -- just see if the Status column has "Void" by the check.


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