Using Budget instead of Other

[aebrown]

I think you are dealing with three distinct points here, so I'll address them one by one.

Not sure I totally agree that once funds are put into an "other" account they become property of the church. Case in point. I was taught that funds in an "Other" account were "pass-through" funds. In otherwords, a deposit is made for a specific purpose (i.e scout camp) and if not used they were to be returned to the donor. Another example would be a Special Relief Society project (say canning) and funds are given to purchase canning material. Say one of the sisters is unable to participate, I was under the impression that the funds were supposed to be returned to the individual.

You're entirely correct about pass-through funds. That is one of the primary uses of the Other account. You're also correct that if there are unused funds, the funds are to be returned to the individual. Those arguments don't convince me that the funds do not belong to the Church, however. The funds are in an account owned by the Church, and thus they are the property of the Church. You might argue that the person who gave those funds might have some claim on the funds, but that is not ownership, and it is a limited claim, with all sorts of potential limitations (for example, a Scout pays $50 to go to Scout camp; based on that commitment, the Scoutmaster puts down a deposit that commits the troop to pay the full camp fee on behalf of that scout -- he has no right to claim the money back, even if the full amount hasn't been spent yet).

And I can see no argument at all that funds from a fund-raiser are anyone's "personal" funds. They unquestionably belong to the Church.

On another note, I believe that if you put funds earmarked for an "other" account like Boy Scouts and it is instead put into a budget account like Young Men, that the funds aren't really in the budget but rather are read by Salt Lake as being a donation to the budget and consequently are taken by Salt Lake. We had a situation like this arise in our stake where one of the wards had extra money in an other account and moved it into a budget account thinking they could then spend it for items like curriculum, etc. Turns out they way overspent their budget and Salt Lake sent a notice to the Stake President. I ended up getting involved trying to figure out what happened and after talking with Salt Lake, talking with the Stake Clerk at that time, and doing a lot of looking at records came to the conclusion that Budget and Other are two separate accounts not to be mixed. If one were to look at it this way, perhaps it would make sense - Budget monies are "owned" by the Church whereas Other monies are owned by the ward or unit.

Although the practice of moving "extra money" from an Other account into Budget has all sorts of policy problems I won't get into, the fact is that a deposit to the Budget account will indeed increase the available Budget Allowance. I am a stake financial clerk, and I see this happen all frequently, especially as money gets moved between units.

Deposits to the Budget account are indeed transferred out of the ward account, but only in the same way that all checks spent from the Budget account are immediately reimbursed to the ward account. It's a zero-based account as far as the bank balance is concerned, but not as far as the Budget Allowance is concerned -- all deposits increase the available Budget Allowance; all expenses decrease the available Budget Allowance.

I can't explain why the ward you dealt with seemed to not experience an increase in Budget Allowance when they deposited funds into Budget, for that is completely contrary to my repeated, consistent experience in this regard.

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.

The Church makes it very clear that it cannot receive local funds through cash donations. This includes not only the Budget category, but Ward Missionary, Fast Offering, and Other as well. So there's not really any distinction between Other and Budget in this particular regard.

[mkmurray]

I'm also noticing what seems to be two different interpretations of the phrase "Church owning the money".

It seems like jdlessley and Pilotfly are defining the word "Church" in this phrase as solely meaning Church Headquarters, whereas it seems like Alan_Brown means both Church HQ and the local units collectively. Pilotfly furthered this theory of mine when he said this...

Budget monies are "owned" by the Church whereas Other monies are owned by the ward or unit.

...which seemed to echo jdlessely's definition of "personal".

[ffrsqpilot]

Well, I probably didn't make my self too clear and trying to clarify futher would probably only confuse those reading this thread and more than likely myself!

But, I am pretty sure the Church Financial Section in Salt Lake looks at the Budget account and the Other account as being two separate entities that are not supposed to be interchangable or intermixed (if that makes any sense). Case in point - you cannot write a check in MLS with funds from a Budget category and an Other category. MLS physicially won't let you do it. Likewise, 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. However, if you were to physically write a check from other and try to deposit into your wards budget you aren't increasing your budget if I understand the process correctly. The inverse however is true - you can write a check from the budget and deposit into your other account which will show up on the financial report as an expense and transfer (within budget) and show as an increase in the "other" account.

What the ward in question did was transfer funds (at least thinking they were transfering funds from other to budget and then proceeded to spend the funds on items they wanted such as curriculum items, tablecloths, end of year type stuff, etc etc. When they exceeded their budget Salt Lake sent a letter to the Stake President notifying them of the overspending. (As a side note here, I believe the actual budget funds are controlled and assigned to the stake which then parcels the funds to each ward for their individual budgets). So in the case above it was actually the ward that overspent and was now causing funds from the stake to be transfered to cover the deficits.

When I mention who "owns" what account I guess a better description would be that with budget spending you will see on the monthly report expenses and transfers whereas with other spending, you do not necessarily see those expenses and transfers when you do the reconcilliation which to me means that the Church (being Salt Lake) "owns" or controls the budget process and spending while the Unit "owns" or controls the other process. I guess I look at it as the budget funds are in one bank while the other funds are in a different bank.

I told you this was confusing and now I'm probably way out in left field somewhere smelling the daisies!

[aebrown]

Well, I probably didn't make my self too clear and trying to clarify futher would probably only confuse those reading this thread and more than likely myself!

I do agree with you on this . But I'll try to clarify your clarifications.

But, I am pretty sure the Church Financial Section in Salt Lake looks at the Budget account and the Other account as being two separate entities that are not supposed to be interchangable or intermixed (if that makes any sense). Case in point - you cannot write a check in MLS with funds from a Budget category and an Other category. MLS physicially won't let you do it. Likewise, 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. However, if you were to physically write a check from other and try to deposit into your wards budget you aren't increasing your budget if I understand the process correctly. The inverse however is true - you can write a check from the budget and deposit into your other account which will show up on the financial report as an expense and transfer (within budget) and show as an increase in the "other" account.

It's certainly true that Budget and Other are separate entities. So are Fast Offerings, Tithing, and Ward Missionary. But there are specific ways in which Budget and Other are supposed to interact, even though they are of course not interchangeable, and are not to be intermixed. You mentioned one interaction -- writing a check from Budget to deposit into Other. I don't recall anyone claiming that the two accounts were interchangeable.

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. The one clarification I would make here is that since the budget allowance is tracked at the stake level, my statement is only guaranteed to be true at the stake level. It's conceivable that a stake could have a policy that it captures the credit for any deposits made at the ward level and uses them at the stake level. That is the only scenario I can imagine where a deposit to Budget would not increase the ward's budget allowance.

What the ward in question did was transfer funds (at least thinking they were transfering funds from other to budget and then proceeded to spend the funds on items they wanted such as curriculum items, tablecloths, end of year type stuff, etc etc. When they exceeded their budget Salt Lake sent a letter to the Stake President notifying them of the overspending. (As a side note here, I believe the actual budget funds are controlled and assigned to the stake which then parcels the funds to each ward for their individual budgets). So in the case above it was actually the ward that overspent and was now causing funds from the stake to be transfered to cover the deficits.

There is no way the Church has any idea if a ward has overspent its budget, since the Church has no knowledge of a ward's budget allowance. As you mentioned, the stake controls this. So the scenario you mentioned only makes sense if the stake (by this I mean all the wards together plus the stake's general account) overspent its budget allowance. Only then could CHQ send a letter to the stake president.

When I mention who "owns" what account I guess a better description would be that with budget spending you will see on the monthly report expenses and transfers whereas with other spending, you do not necessarily see those expenses and transfers when you do the reconcilliation which to me means that the Church (being Salt Lake) "owns" or controls the budget process and spending while the Unit "owns" or controls the other process. I guess I look at it as the budget funds are in one bank while the other funds are in a different bank.

What you said about the reconciliation is mostly backwards; if anything, what you said of Budget is closer to true for Other. All expenses, deposits, and transfers from all categories are included in the Church Unit Financial Statement, and thus are involved in the reconciliation. But it is only the Other and Ward Missionary categories that actually affect the reconciliation in most cases -- you can neglect to check off a cleared Budget check, and you will still reconcile, but if you forget to check off a cleared Other check, you will be out of balance.

All the categories are in the same bank, but the Church does do automatic transfers from every category except Other and Ward Missionary to bring the bank balance to zero. The Budget category has separate accounting at the stake level for tracking the Budget Allowance, which is different from any bank balance, but is similar to a category balance in that it is affected by all the deposits, expenses, and transfers in the Budget category that appear on the CUFS.

[russellhltn]

I can't explain why the ward you dealt with seemed to not experience an increase in Budget Allowance when they deposited funds into Budget, for that is completely contrary to my repeated, consistent experience in this regard.

Any bets that they spent half of the excess three times? :rolleyes:

(Hey, we had all that money, where did it go?)

[ffrsqpilot]

Obviously Bro Brown and I have different ideas of how the system works so I will bow out of this conversation. Hopefully the individual who started this thread will get his question answered.

Totzeins!

[mkmurray]

Obviously Bro Brown and I have different ideas of how the system works so I will bow out of this conversation. Hopefully the individual who started this thread will get his question answered.

Totzeins!

Which brings up a good point. We may want to consider making this discussion its own thread.

[ponders-p40]

FWIW, having been both a ward and stake finance clerk my understanding is very similar to Bro. Brown's which is part of what led to my asking the question.

You all contributed some great thoughts and I very much appreciate the discussion. I think it was valuable to challenge each other's understanding and assumptions. That and the ensuing discussion give me a clearer understanding of both the big picture and the subtleties involved.

Thanks for your help.

BTW, I have more questions like the one started this thread that I'll get to as some point, this was just the most pressing.

[jdlessley]

I do not think this issue should be closed. Allowing what ponders posted in the open to this thread to be dismissed as acceptable in any form can have serious consequences for the Church. I would like to take another tack in addressing the issue.

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.). When an individual follows Church procedures and contributes funds for the Boy Scout summer camp they must write in the purpose for the contribution in the Other block. In this case they would write in "Scout Camp", or something like that, to signify the purpose of the funds. These funds must then be deposited to the Other account. There is no provision for a budget account deposit. The same procedure applies to funds deposited from a fund-raiser.

Now this is what ponders wrote in his opening post:

In our most recent audits we've discovered at least two units in our stake that are, primarily for the sake of keeping things simpler, depositing funds received from things like camp fund raisers into Budget rather than creating an Other account for this.

Doing this violates Church policies and procedures when the funds are deposited in a budget account.

Let me explain further. Budget funds come from tithes. Therefore if the individual wanted the funds to go toward the budget they would enter the contribution amount in the Tithing block of the slip. The tithing contribution goes to Church headquarters and they decide how those funds are used. The Church allocates funds for Stake budgets and the stake for ward budgets. And finally the ward allocates to auxiliaries. This is a top down budget allocation and not the other way around.

A review of an audit form may also be helpful. If you look at item 21 on the audit form it says:

For weekly donation batches, the information on the following items matches and is fully consistent: Tithing and Other Offerings forms, related depository documents, related bank statements, and related batch reports.

A Tithing and Other Offerings form would not agree with the related batch report because the contributor would have entered an amount in the 'Other' block with an annotation of 'Scout Camp' and the batch report would show the deposit in a budget category.

[aebrown]

I do not think this issue should be closed. Allowing what ponders posted in the open to this thread to be dismissed as acceptable in any form can have serious consequences for the Church.

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 would like to take another tack in addressing the issue.

I agree with almost everything you said, and I think your general reasoning is sound. Thank you for taking the time to clarify this. In particular, I think the quote from the audit instructions was a good point.

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.

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]

Sometimes an activity is mistakenly paid for using budget funds even though fundswere collected and designated for the activity in the “Other” category. To correctthis error:

• Print a check payable to the ward from the appropriate “Other” subcategory.
• Fill out a Tithing and Other Offerings slip in the name of the ward, cross out“Other” on the slip, and write in the name of the budget subcategory and theamount of the check.
• Record the deposit in MLS to the proper budget subcategory.
• File the white copy of the donation slip with one check stub and the expenseinformation, and file the yellow copy and the other check stub with thedonation information.

• Deposit the check at the bank using normal procedures.

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:

Sometimes a member will request an advance payment for an expense rather than using his or her own funds and then being reimbursed.
[align=left]In these cases:
• Find out the exact amount of the expense (or carefully approximate the amount).
• If a check is used, make it out to the vendor or service provider.
• After spending the funds, the member should attach the receipts to the expense authorization form and give the documentation to a bishopric member or clerk. [/align]
• If there are leftover funds, the member should place the money in a donation envelope, write
[align=left][/color][/color]Budget Return in the “Other” category on the slip, and give the envelope to a member of the bishopric.[/align]