Writing a check to budget from Other account

Discuss questions around local unit policies for budgeting, reconciling, etc. This forum should not contain specific financial or membership information.
allenjpl
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Re: Writing a check to budget from Other account

Postby allenjpl » Wed Sep 13, 2017 4:56 pm

cbradford wrote:According to your logic, then no matter what the stake does there will be no transparency ever. The stake doesn't have to justify to the wards how much money is allocated (though our stake does). In this case, the stake has provided an invoice to each ward that shows how much money is going to be withheld. It is a very simple matter to determine how much money they would have received otherwise, if they truly believed the Stake was withholding additional funds.

I think your statement about this being the opposite of transparent is completely unfounded.


Well, no. The ward has an invoice from the stake. The ward then cuts a check to the stake for the amount of the invoice, or simply transfers the funds. Clear, simple, and done in less than 10 minutes. That's transparent. Like every other expense the ward handles.

For whatever reason the stake doesn't want to do it that way. The stake has the ability to change the allocation, for its own reasons. But the amount the ward generally receives every quarter is malleable, depending on the past attendance numbers and the needs of the stake. It is this very flexibility that eliminates the connection between the payment to the stake vs. the payment to the budget. And here's the kicker - there's no need to turn a simple, everyday transaction into this headache.

russellhltn
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Re: Writing a check to budget from Other account

Postby russellhltn » Wed Sep 13, 2017 5:02 pm

cbradford wrote:In this case, the stake has provided an invoice to each ward that shows how much money is going to be withheld.

Assuming the statement is itemized, I'd include a copy of that in any documentation in transferring the "other" to "budget".

But it still seems really messy. It seems like someone is spending 3 times the amount of work just to avoid a little work.
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scgallafent
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Re: Writing a check to budget from Other account

Postby scgallafent » Thu Sep 14, 2017 2:26 pm

cbradford wrote:I think your statement about this being the opposite of transparent is completely unfounded.

The problem is moving funds from Other to Budget. The Help Center article on the "Other" category says that the "other" category should not be used to supplement the budget.

Here is my summary of what I understand so far:
  • There is money in the "Other" account for an activity that ultimately needs to be transferred to the stake since the stake incurred the expenses for the activity.
  • The stake has proposed that it will recover the funds by reducing each ward's budget allocation, after which ...
  • The ward should take the funds in the Other account (which were earmarked for the activity) and transfer them into the budget to offset the budget amount that was held back by the stake.
Although the end financial result is the same, every ward in the stake is going to show a transfer from other to budget that requires justification. Instead of taking funds that were set aside for a particular activity and creating a clean paper trail from the funds to the expenses, there is a convoluted path that requires justification and explanation whenever someone tries to understand it.

It would be much cleaner to transfer the "other" funds to the stake to cover the stake's expense for that activity and then provide the normal budget allocation to the wards.

russellhltn
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Re: Writing a check to budget from Other account

Postby russellhltn » Thu Sep 14, 2017 4:38 pm

scgallafent wrote:Although the end financial result is the same, every ward in the stake is going to show a transfer from other to budget that requires justification. Instead of taking funds that were set aside for a particular activity and creating a clean paper trail from the funds to the expenses, there is a convoluted path that requires justification and explanation whenever someone tries to understand it.

I think there's something to be said for avoiding even the appearance of wrong-doing.
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joeydef
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Re: Writing a check to budget from Other account

Postby joeydef » Fri Sep 15, 2017 7:24 am

I agree with the concerns you have all raised, which is why I have been reticent to follow this procedure. The withholding of funds does not create a transparent transaction of a defined amount with a defined purpose.

The auditor must assume that the Stake withheld the appropriate amount and used it for the appropriate purpose, because the only expense report that will be created will be a check written from the Other account with no direct connection to its intended purpose. In other words, no expense report is created when the Stake withholds a nebulous amount from the allocation. It is too much hassle (and probably impossible) for the auditor to recalculate the Stake's allocation pre- and post- adjustment to see if it matches the invoice amount. Even if he does, there is no proof that the money went toward scout camp, which is what the policy requires.


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