zeroing out an "Other" sub account

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carlscpa
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zeroing out an "Other" sub account

Postby carlscpa » Tue Apr 01, 2008 3:13 pm

We have a small negative balance in an "Other" sub account which I want to clear by transferring money from a budget account. It seem the only way is to write a check on budget and then deposit it in the "Othe" account. If there is an easier way, I would appreciate a how to response. Thanks.

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aebrown
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Postby aebrown » Tue Apr 01, 2008 3:36 pm

Carl wrote:We have a small negative balance in an "Other" sub account which I want to clear by transferring money from a budget account. It seem the only way is to write a check on budget and then deposit it in the "Othe" account. If there is an easier way, I would appreciate a how to response. Thanks.


That's the way to do it. To quote the Record Keeping Training lesson titled "Understanding and Using the "Other" Category":

To transfer funds from a budget subcategory to an “Other” subcategory, print a check from the appropriate budget subcategory payable to the unit. Then deposit the check into the “Other” subcategory using a Tithing and Other Offerings slip in the name of the unit. Make sure that you make the deposit in the appropriate “Other” subcategory so that it will clear to zero.

bboy-p40
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Other account negative sub account balance

Postby bboy-p40 » Wed Aug 20, 2008 11:54 am

While writing a check is a viable option, it is preferable to review the "income and expense report", click on "all" on that subcategory and determine by reviewing the history what prompted the negative balance in the first place. It is always the best solution where possible to trace the problem to the source and then correct the source item. This option provides an audit trail. Writing a check from budget does not provide that audit trail.

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aebrown
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Postby aebrown » Wed Aug 20, 2008 12:15 pm

bboy wrote:While writing a check is a viable option, it is preferable to review the "income and expense report", click on "all" on that subcategory and determine by reviewing the history what prompted the negative balance in the first place. It is always the best solution where possible to trace the problem to the source and then correct the source item. This option provides an audit trail. Writing a check from budget does not provide that audit trail.


It is certainly sound advice to determine the cause of the issue. When I gave my response, I assumed this had been done. But you raise a good point that this should indeed be done first.

However, there are certainly situations where the correct course of action is to write a check from Budget. An example would be where a check is written from Other for the cost of a YW camp, assuming that the girls will earn the money themselves, but then it turns out that one girl can't really afford it, so the bishop decides to pay for that portion from Budget funds.

In any case, it is certainly not true that writing a check from budget fails to leave an audit trail. Any check that is written leaves a very clear audit trail, since the documentation for the check will have to explain why the check was written. Also, the deposited funds will show that the donor is the ward, so that obviously came from a check, which is easily traced.

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Postby cdawardclerk-p40 » Sat Dec 13, 2008 11:59 am

Alan_Brown wrote:That's the way to do it. To quote the Record Keeping Training lesson titled "Understanding and Using the "Other" Category":

I inherited a very poorly run Financial Clerk calling in our ward about a year and half ago. The 'Other' account showed a negative amount and I have not been able to really concentrate on it until recently. A few months ago I was given the Ward Clerk calling so I have been try to train our new Finance Clerk but he is too busy with Tithing right now so I am trying to get a handle on the 'Other' account.

I show some Other subcategories with positive amounts and four subcategories with negative amounts. I have gone back three years to try and determine what the money was to be used for but have come to the sad conclusion that money was being moved in and out of Budget categories and between Other account subcategories.

My understanding is that I am NOT allowed to transfer money from the Other account(s) to Budget categories. Is this correct? If so, can I move money from Other categories that show positive amounts to Other categories that show negative amounts? If not, then what do I do with the money in the Other subcategories that show a positive amount? How do I balance the four categories that show negative amounts? (I would think I would need to write a check from Budget - Ward Administration to zero out the balances).

Sorry about all the questions...this has been really frustrating me and I am determined to solve this problem by years end. Thank you.

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Postby aebrown » Sat Dec 13, 2008 2:35 pm

cdawardclerk wrote:I inherited a very poorly run Financial Clerk calling in our ward about a year and half ago. The 'Other' account showed a negative amount and I have not been able to really concentrate on it until recently. A few months ago I was given the Ward Clerk calling so I have been try to train our new Finance Clerk but he is too busy with Tithing right now so I am trying to get a handle on the 'Other' account.

I show some Other subcategories with positive amounts and four subcategories with negative amounts. I have gone back three years to try and determine what the money was to be used for but have come to the sad conclusion that money was being moved in and out of Budget categories and between Other account subcategories.

My understanding is that I am NOT allowed to transfer money from the Other account(s) to Budget categories. Is this correct? If so, can I move money from Other categories that show positive amounts to Other categories that show negative amounts? If not, then what do I do with the money in the Other subcategories that show a positive amount? How do I balance the four categories that show negative amounts? (I would think I would need to write a check from Budget - Ward Administration to zero out the balances).


You have done the first step in looking back as far as you can to understand how a subcategory of Other happened to have a nonzero balance. If the accounting was done properly (unfortunately in this case that seems not to be true), a positive balance would indicate that members overpaid for whatever the specific purpose of the Other subcategory was, so the money should be refunded. A negative balance would indicate that more money needs to be collected from the members who received the benefit, or Budget funds have to be used to make up the difference.

If you can't sort out the problems because the source of the problems is too far back, then I would think that it is okay to transfer money among the Other subcategories to try to zero out as many as possible. This is generally not a good practice, but since the Other category is so unreliable in your case, it seems silly to reimburse negative subcategory balances from Budget, only to then have positive subcategory balances that you then have to somehow deal with.

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zeroing out an "Other" sub account

Postby cdawardclerk-p40 » Sat Dec 13, 2008 3:17 pm

Alan_Brown wrote:You have done the first step in looking back as far as you can to understand how a subcategory of Other happened to have a nonzero balance. If the accounting was done properly (unfortunately in this case that seems not to be true), a positive balance would indicate that members overpaid for whatever the specific purpose of the Other subcategory was, so the money should be refunded. A negative balance would indicate that more money needs to be collected from the members who received the benefit, or Budget funds have to be used to make up the difference.

If you can't sort out the problems because the source of the problems is too far back, then I would think that it is okay to transfer money among the Other subcategories to try to zero out as many as possible. This is generally not a good practice, but since the Other category is so unreliable in your case, it seems silly to reimburse negative subcategory balances from Budget, only to then have positive subcategory balances that you then have to somehow deal with.


I would rather not have to transfer between subcategories but I also agree with you on that the source of these problems are more than three years old. What is the method of transferring funds between subcategories? Thank you Alan.

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Postby jdlessley » Sat Dec 13, 2008 3:17 pm

Alan_Brown wrote:If you can't sort out the problems because the source of the problems is too far back, then I would think that it is okay to transfer money among the Other subcategories to try to zero out as many as possible. This is generally not a good practice, but since the Other category is so unreliable in your case, it seems silly to reimburse negative subcategory balances from Budget, only to then have positive subcategory balances that you then have to somehow deal with.
Before you do as Alan recommends here I would call Church headquarters before moving funds around within the "Other" category. Sometimes the more painful process is the more correct process in rectifying "Other" account issues. Unless Church headquarters directs you to move funds within the "Other" category sub-accounts you may end up with more problems.

Getting as much an understanding of the problems as far back as you can go is best before calling headquarters. For one ward in our stake, headquarters wanted us to go all the way back to when the ward converted from FIS to MLS - which was in 2004.
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Postby russellhltn » Sat Dec 13, 2008 3:30 pm

The advice you've received is good, but the very first thing I'd do is to make sure none of the debts from the Other account are from bounced donation checks. If a member's check bounces, the amount of the check is taken out of the other account by Church Headquarters until the ward can properly cancel the donation. Since that has a direct affect on tithing settlement, that's the thing I'd do first. (Note, I don't think this will show up automatically in MLS)

The other thing you need to look at is to reconcile what MLS says is in the Other account with the bank statements. If the past Financial clerk wasn't doing his job, what's in MLS may have no reflection on reality. When all is said and done, MLS is kind of like Quicken - a fancy check register/accounting system. It's there to help you do your job, but the actual bank statement is the true "bottom line".
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zeroing out an "Other" sub account

Postby cdawardclerk-p40 » Sat Dec 13, 2008 4:54 pm

jdlessley wrote:Before you do as Alan recommends here I would call Church headquarters before moving funds around within the "Other" category. Sometimes the more painful process is the more correct process in rectifying "Other" account issues. Unless Church headquarters directs you to move funds within the "Other" category sub-accounts you may end up with more problems.

Getting as much an understanding of the problems as far back as you can go is best before calling headquarters. For one ward in our stake, headquarters wanted us to go all the way back to when the ward converted from FIS to MLS - which was in 2004.


I have called CHQ...they helped me with a couple of returned checks with helped to reduce our negative balance. I cannot determine or identify amounts or individuals that have contributed because many of these transaction go back more than three years. I don't see how much more painful it could be to try and zero out the subcategories with negative balances with funds from those subcategories with positive amounts.

I think our prior clerks mistakenly used budget funds to pay for activities. Also they did not reconcile statements.


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