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Documentation Regarding Charge Accounts at Vendors for Ward Use

Posted: Mon Feb 27, 2012 5:49 pm
by tylerchristensen
Does anyone know what the official policy is on vendors that have established charge accounts for wards? For example, we have several vendors that have set up accounts for our ward and they in turn bill the ward when these expenses occur but I seem to recall some sort of letter from the church that indicated that such charge accounts should be avoided. Does anyone know where I can find documentation supporting or refuting this idea?

Thanks

Tyler Christensen
Ward Clerk

Posted: Thu Mar 01, 2012 7:07 pm
by daveywest
I would recomend following the guideline established in the second paragraph of section 14.6.7 of Handbook 1.

Essentially, local units are not authorized to open additional accounts.

Edit: This would apply to a revolving charge account, not a business that provides a service, then invoices the unit for payment.

Posted: Thu May 03, 2012 9:10 am
by gingus
So, if we currently have one of these accounts, it is a Macey's account that we have had for many years, should it be closed, or is that at the bishop's discresion?

Posted: Thu May 03, 2012 9:31 am
by aebrown
gingus wrote:So, if we currently have one of these accounts, it is a Macey's account that we have had for many years, should it be closed, or is that at the bishop's discresion?


If the policy forbids it, then in my opinion the bishop has no discretion to violate policy. It makes no difference whether that policy has been violated in the past.

That said, it is up to the bishop in counsel with his stake president to determine whether a particular situation actually violates the policy. If a vendor simply has the ward listed as a customer, and sends an invoice when a charge is incurred (and the bishop has approved the expense), then I wouldn't see that as an actual separate account -- it's entirely proper for a ward to be sent an invoice by a vendor. But if there's an actual charge account, where members of the ward charge all sorts of items, and a monthly bill is sent out to the ward, then that sounds more like an unauthorized separate charge account.

Re: Documentation Regarding Charge Accounts at Vendors for W

Posted: Thu Dec 25, 2014 7:35 pm
by troy.ochsenbein
As a newly called assistant ward clerk, I have a challenging situation where in there are accounts at several businesses in our community. These accounts are utilized by the various organizations of our ward to make purchases "charges" relating to their calling. For example, An Elder's Q President charges a number of food items for a party. Eventually an invoice is then sent to the Bishop requesting payment. Although the invoicing hasn't always occurred on a monthly bases as one would might expected they tend to be some what regular.

My concern is that these accounts are not "Safeguarding Church Funds" in my opinion. By this I mean, there is no way for a merchant to validate that the person making the purchase has been authorized by a bishop of the ward to do so. Essentially the business and the Ward are operating in good faith that someone doesn't abuse the privilege before the invoice is received and reconciled by the assistant ward clerk. Again, in my opinion, I believe these accounts should be closed and the approve process of completing an expense form and approval from the bishop should be used.

Am I wrong in my understanding based on Handbook 1 section 14.6.7?

Thank you.

Re: Documentation Regarding Charge Accounts at Vendors for W

Posted: Thu Dec 25, 2014 9:42 pm
by jdlessley
troy.ochsenbein wrote:Am I wrong in my understanding based on Handbook 1 section 14.6.7?

I don't see how Handbook 1, 14.6.7, applies to having charge accounts. That section concerns managing stake and ward checking accounts. While a poster previously in this thread asserts that this section of the Handbook applies to charge accounts, I cannot find any reference to charge accounts. All reference is to managing stake and ward checking accounts.

Handbook 1, 14.7.2, addresses the budget and managing budget funds. A guideline mentioned in this section is that expenditures must be approved by the stake presidency or bishopric before they are incurred. Interpretations of this guideline by proper authority may ascertain that charge accounts may or may not comply with this requirement to approve expenditures before they are incurred depending on the agreement in place with the vendor/retailer and who may incur expenses under the agreement.

Our stake operates under policy that does not permit charge accounts.

I recommend you discuss the issue with your bishop and your stake clerk. They may discuss the matter with your stake president. He may in turn take the matter to the area auditor or higher.

Re: Documentation Regarding Charge Accounts at Vendors for W

Posted: Fri Dec 26, 2014 1:28 am
by russellhltn
jdlessley wrote:I don't see how Handbook 1, 14.6.7, applies to having charge accounts. That section concerns managing stake and ward checking accounts.

The second, second to last, and last paragraph could be interpreted to say that there should be no other accounts. Certainly no other accounts that hold ward funds. I'm not sure a charge account is that different.

Re: Documentation Regarding Charge Accounts at Vendors for W

Posted: Fri Dec 26, 2014 4:59 am
by troy.ochsenbein
jdlessley wrote:
troy.ochsenbein wrote:Am I wrong in my understanding based on Handbook 1 section 14.6.7?

Interpretations of this guideline by proper authority may ascertain that charge accounts may or may not comply with this requirement to approve expenditures before they are incurred depending on the agreement in place with the vendor/retailer and who may incur expenses under the agreement.


Thank you for the quick response. When you say "agreement" are you suggesting that there is a formal contract between the church/ward and the place of business? Or do you mean, just a common understanding (e.g. operating in good faith)?


russellhltn wrote:
jdlessley wrote:I don't see how Handbook 1, 14.6.7, applies to having charge accounts. That section concerns managing stake and ward checking accounts.

The second, second to last, and last paragraph could be interpreted to say that there should be no other accounts. Certainly no other accounts that hold ward funds. I'm not sure a charge account is that different.


Correct, there are several places where it states one checking account. While it doesn't expressly say, you should not operate using charge accounts, it would appear there are points of undue risk where funds are not safeguarded as suggested in the example above. In today's world rarely a week goes by that we don't hear about some vendor's system being compromised and personal information or funds are stolen. Thus, my concern of having open charge accounts.

That all said, I'm fine working with status quo if that's the approved best practice for managing the expenditure of funds.

Thanks again for the feedback and dialog.

Re: Documentation Regarding Charge Accounts at Vendors for W

Posted: Fri Jan 02, 2015 3:09 pm
by troy.ochsenbein
Just as a follow up to this discussion.

I called the finance help line at CHQ to get clarification regarding the use of charge accounts. The end result is they recommended that the accounts be closed, however, if they were to remain open the account should be secured. For example, a pin number or security code that would suggest to the vendor that the person making the charge has been authorized to do so.