Entering a Check From Another Ward

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Hilohi
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Entering a Check From Another Ward

Postby Hilohi » Sun Jun 28, 2015 6:32 am

A few wards in our stake recently had a joint youth fundraising activity. The ward that was in charge of this activity recently gave our ward our portion of the proceeds by way of a check. How do I properly enter this check/funds into MLS? I was thinking I would enter it into an Other account that we've set up for youth fundraisers, and then transfer half that amount from the Other account to the YM's annual budget and the other half of that amount to the YW's annual budget. Is that correct?

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aebrown
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Re: Entering a Check From Another Ward

Postby aebrown » Sun Jun 28, 2015 6:47 am

Hilohi wrote:A few wards in our stake recently had a joint youth fundraising activity. The ward that was in charge of this activity recently gave our ward our portion of the proceeds by way of a check. How do I properly enter this check/funds into MLS? I was thinking I would enter it into an Other account that we've set up for youth fundraisers, and then transfer half that amount from the Other account to the YM's annual budget and the other half of that amount to the YW's annual budget. Is that correct?

Since the funds came from fundraising, it seems entirely appropriate to deposit it into Other. Hopefully you are following the guidelines for the Other account and have specific subcategories set up for the annual camps that the funds were raised for. As indicated in Handbook 2, 13.6.8, that's all you can raise funds for (and assuming you've followed the other policies documented there). So if you do have a subcategory for YW Camp, and another subcategory for YM Camp (or even better, one for Scout Camp and one for annual camps the Varsity and/or Venturer groups are planning), you should put the funds directly there, apportioning the funds to the separate subcategories as appropriate.

I see no reason to channel this deposit back to Budget. Funds that come from fundraising are for those specific annual camps, not for general activities of the YM and YW. Putting the funds in Budget could make it look like you're fundraising for general activities, which is not permissible. I've always found it better to keep the deposits and expenses for the annual camp in the appropriate Other subcategory so that there is a nice clean line -- that way the auditors can see that fundraising was used only for the annual camp.

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Re: Entering a Check From Another Ward

Postby Hilohi » Sun Jun 28, 2015 7:41 am

aebrown wrote:
Hilohi wrote:A few wards in our stake recently had a joint youth fundraising activity. The ward that was in charge of this activity recently gave our ward our portion of the proceeds by way of a check. How do I properly enter this check/funds into MLS? I was thinking I would enter it into an Other account that we've set up for youth fundraisers, and then transfer half that amount from the Other account to the YM's annual budget and the other half of that amount to the YW's annual budget. Is that correct?

Since the funds came from fundraising, it seems entirely appropriate to deposit it into Other. Hopefully you are following the guidelines for the Other account and have specific subcategories set up for the annual camps that the funds were raised for. As indicated in Handbook 2, 13.6.8, that's all you can raise funds for (and assuming you've followed the other policies documented there). So if you do have a subcategory for YW Camp, and another subcategory for YM Camp (or even better, one for Scout Camp and one for annual camps the Varsity and/or Venturer groups are planning), you should put the funds directly there, apportioning the funds to the separate subcategories as appropriate.

I see no reason to channel this deposit back to Budget. Funds that come from fundraising are for those specific annual camps, not for general activities of the YM and YW. Putting the funds in Budget could make it look like you're fundraising for general activities, which is not permissible. I've always found it better to keep the deposits and expenses for the annual camp in the appropriate Other subcategory so that there is a nice clean line -- that way the auditors can see that fundraising was used only for the annual camp.


Thanks, aebrown.

One of the reasons I was thinking about transferring the funds into the YM's and YW's budgets is I was told that the balance in the Other accounts should be zeroed-out as soon as possible. I was told that an other account should only be set up for a specific purpose and once that purpose was met, I had to transfer the funds out of the Other account. So in this case I figured a logical way to zero-out the other account that we have for youth fund raising activities was to transfer those funds to the YM's and YW's budget. Of course that could be a totally illogical reason if my initial understanding of zeroing out an account once the Other account's purpose was met is incorrect.

Another reason I was thinking about transferring the funds into the YM's and YW's budgets is we cut the check for youth conference from the YM's and YW's budgets before we received the youth fund raising check that I mentioned in my initial message. So essentially I was repaying the amount that I took out of the YM's and YW's budget with the fund raising check.

These are the two reasons why I was thinking I should transfer the funds from the Other category to the YM's and YW's budget. However, if I'm not doing things correctly, please let me know what's the correct way of handling this situation.

By the way, in the future, since the ward pays for youth conference, should the YM's and YW's presidencies include that anticipated amount for youth conference in their annual budgets or should a separate budget be set up specifically for youth conference?

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aebrown
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Re: Entering a Check From Another Ward

Postby aebrown » Sun Jun 28, 2015 9:19 am

Hilohi wrote:One of the reasons I was thinking about transferring the funds into the YM's and YW's budgets is I was told that the balance in the Other accounts should be zeroed-out as soon as possible. I was told that an other account should only be set up for a specific purpose and once that purpose was met, I had to transfer the funds out of the Other account. So in this case I figured a logical way to zero-out the other account that we have for youth fund raising activities was to transfer those funds to the YM's and YW's budget. Of course that could be a totally illogical reason if my initial understanding of zeroing out an account once the Other account's purpose was met is incorrect.

There is no requirement to zero out the balance of Other accounts "as soon as possible"; rather, the requirement is that funds collected for a specific purpose are spent for that specific purpose in a timely manner. It is far more important that the funds are spent for the specific purpose for which they were collected than that any particular time schedule is met.

Hilohi wrote:Another reason I was thinking about transferring the funds into the YM's and YW's budgets is we cut the check for youth conference from the YM's and YW's budgets before we received the youth fund raising check that I mentioned in my initial message. So essentially I was repaying the amount that I took out of the YM's and YW's budget with the fund raising check.

Wards and stakes are absolutely not permitted to use funds from fundraising for youth conferences. That is made clear in Handbook 2, Section 13.4, which says that "Youth conferences are to be funded from the stake or ward budget. Members should not be asked to pay for youth conferences."

Fundraising is permitted for youth activities only for one annual camp and related equipment, and then only if other requirements are met (See HB2, 13.2.8). So there should be no connection at all between your ward's fundraising and any youth conference expenses.

Hilohi wrote:By the way, in the future, since the ward pays for youth conference, should the YM's and YW's presidencies include that anticipated amount for youth conference in their annual budgets or should a separate budget be set up specifically for youth conference?

I've seen it done both ways. Personally, I think it works better for a separate budget to be set up for youth conference. That way it's easier to tell just how much youth conference cost (you can run a report against that specific subcategory), and you don't have to subdivide each individual expense, charging half to the YM budget and half to the YW budget. In wards (and the stake) where I've been involved in this process, it is budgeted as a separate item, and all expenses are charged to the subcategory set up for that purpose.

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Re: Entering a Check From Another Ward

Postby russellhltn » Sun Jun 28, 2015 11:53 am

Hilohi wrote:One of the reasons I was thinking about transferring the funds into the YM's and YW's budgets is I was told that the balance in the Other accounts should be zeroed-out as soon as possible. I was told that an other account should only be set up for a specific purpose and once that purpose was met, I had to transfer the funds out of the Other account.

That's only partly true. It is true that you don't want balances to carry on forever, eventually turning the other account into a slush fund. As for transferring the funds out - I refer you back to policy. Either you spend it on the intended purpose, find some other qualifying expenses, give it back, or turn it over to the church. Using it to increase your budget is not an option.

The entire idea of the Other account is to pull a subset of transactions out of the ward's finances to make sure that financial policy - such as fundraising - is being followed. Money comes in, it's spent on the intended purpose, and it's either all properly spent or refunded back. The moment you transfer a balance INTO budget, one now has to look at the bigger picture to make sure policy has been followed. (Qualifying expenses exceed the amount transferred into budget.) Note that transferring FROM budget into Other generally isn't an issue since that wouldn't violate policy.


Hilohi wrote:Another reason I was thinking about transferring the funds into the YM's and YW's budgets is we cut the check for youth conference annual camp from the YM's and YW's budgets before we received the youth fund raising check that I mentioned in my initial message. So essentially I was repaying the amount that I took out of the YM's and YW's budget with the fund raising check.

I'm not wild about that idea, because it does force you (or an auditor) to look for that qualifying expense to make sure it offsets the amount transferred to budget. A better idea is to reclassify the check so it draws the needed amount from the Other account. That will give you a cleaner audit trail.
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Re: Entering a Check From Another Ward

Postby Hilohi » Sun Jun 28, 2015 9:34 pm

Thanks for your responses.

I see that I was confused about how to handle the Other account. I now have a better understanding of the Other account; however, I also have additional questions:
1. The Other account that we set up for the proceeds from our annual youth fundraising activity should only contain those proceeds, correct?

2. If parents pay for their children's youth camps, should I create a separate Other account for those funds or can I add them to the Other account that we created for the fundraising proceeds? If it's the former, should I go even further and create a separate Other account for each youth (for example "Other - Scout Camp - Mike Jones"; "Other - Scout Camp - Jim Smith")?

3. Ideally, the funds needed for the youth camps would already be available in the Other category before youth camp payments are due. However, in the hypothetical scenario where no funds have been added to the Other category by the time the youth camp payments are due (because, say, the fundraising activity was done after the youth camp payments were due), and we consequently use funds from the ward budget, there would technically be no way to "payback" our ward budget once we eventually received the proceeds from the fundraising activity, correct? I'm just thinking of a scenario where we wouldn't have enough funds in our ward budget to pay for the youth camps.

4. In another hypothetical scenario, say we pay for the youth camps with our ward budget because we haven't received the proceeds from our fundraiser yet. We later receive the proceeds from our fundraiser and put them in the Other category set up for fundraising. However, because we already paid for the youth camps with our ward budget, the funds in the Other category end up not being used. What should I do with those unused funds considering that I can't just leave them in the Other category for an extended period of time?

5. Lastly, I now know that the Other category doesn't have to be zeroed out ASAP, but is there a general guideline, such as by the end of the calendar year, or a year from the date the funds were entered into the Other category, etc?

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Re: Entering a Check From Another Ward

Postby russellhltn » Sun Jun 28, 2015 10:06 pm

Hilohi wrote:1. The Other account that we set up for the proceeds from our annual youth fundraising activity should only contain those proceeds, correct?

Sort of. It should contain all of the fundraiser and money from families. It could contain money from budget, but that might cause some problems if you end up with excess. But all of it should be for that specific purpose.


Hilohi wrote:3. Ideally, the funds needed for the youth camps would already be available in the Other category before youth camp payments are due. However, in the hypothetical scenario where no funds have been added to the Other category by the time the youth camp payments are due (because, say, the fundraising activity was done after the youth camp payments were due), and we consequently use funds from the ward budget, there would technically be no way to "payback" our ward budget once we eventually received the proceeds from the fundraising activity, correct?

It sounds sneaky, but you can re-classify the expense once the funds become available. So when all is said and done, the money appears to have been drawn from other (without ever taking "other" negative), and not from budget.


Hilohi wrote:In another hypothetical scenario, say we pay for the youth camps with our ward budget because we haven't received the proceeds from our fundraiser yet. We later receive the proceeds from our fundraiser and put them in the Other category set up for fundraising. However, because we already paid for the youth camps with our ward budget, the funds in the Other category end up not being used. What should I do with those unused funds considering that I can't just leave them in the Other category for an extended period of time?

I suppose in that situation you could transfer the money back to budget. If any questions are raised, you can show the money transferred from budget exceed the amount sent back. However, I still think it's a bad idea. If there was enough funds in the budget to put that much into Other, then why wasn't that used for the camp instead of doing a fundraiser or charging for the camp? You could open yourself to more questions.


Hilohi wrote:5. Lastly, I now know that the Other category doesn't have to be zeroed out ASAP, but is there a general guideline, such as by the end of the calendar year, or a year from the date the funds were entered into the Other category, etc?

Aebrown is likely to have a more detailed answer, but I don't think there is a set deadline. But if I saw a other account for the 2013 camp with a balance, I'd sure be asking questions.

While some people may disagree, I don't see a problem with carrying over a leftover from one year's camp to another (presumably because the fundraiser was wildly successful). In that case, it's not practical to refund the money, and it's still being spent on the intended purpose. The alternatives would be to spend it on camp equipment that they may not need or sending it to CHQ.

Bottom line, be prepared to explain a non-zero balance at any time. As long as not all the expenses are in and there's no sign of feet-dragging on settling things, I don't think there would be a problem.
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Re: Entering a Check From Another Ward

Postby eblood66 » Mon Jun 29, 2015 7:00 am

Hilohi wrote:3. Ideally, the funds needed for the youth camps would already be available in the Other category before youth camp payments are due. However, in the hypothetical scenario where no funds have been added to the Other category by the time the youth camp payments are due (because, say, the fundraising activity was done after the youth camp payments were due), and we consequently use funds from the ward budget, there would technically be no way to "payback" our ward budget once we eventually received the proceeds from the fundraising activity, correct? I'm just thinking of a scenario where we wouldn't have enough funds in our ward budget to pay for the youth camps.

russellhltn already mentioned this but a few more details may be useful. What you do in this situation is to go back to the expenses that you already paid and you edit the category from Budget to the appropriate Other account. This doesn't actually change the original transaction. It creates a transfer between the two categories but unlike a normal transfer it makes a link from the transfer to the original transaction so that it is easy to verify that the funds in the Other account were spent appropriately.

When you make the category adjustment it will ask for a note about the change. This note will show up as the text description of the transfer. I found it useful to include at least an abbreviated description of the original expense in that note.

If the funds in your Other account aren't sufficient to pay all the expenses you may need to leave some expenses in the Budget. In order to zero out the Other account exactly you may need to split one of the expenses between the two categories.

Hilohi wrote:4. In another hypothetical scenario, say we pay for the youth camps with our ward budget because we haven't received the proceeds from our fundraiser yet. We later receive the proceeds from our fundraiser and put them in the Other category set up for fundraising. However, because we already paid for the youth camps with our ward budget, the funds in the Other category end up not being used. What should I do with those unused funds considering that I can't just leave them in the Other category for an extended period of time?

This is really the same as 3. Just adjust the expenses so that they now come from the Other category and your unused funds should go away (unless you raised more than you spent on camps).

Hilohi wrote:5. Lastly, I now know that the Other category doesn't have to be zeroed out ASAP, but is there a general guideline, such as by the end of the calendar year, or a year from the date the funds were entered into the Other category, etc?

As russellhltn said, I don't know of any more guideline than 'in a timely manner.' However, in my last stake they said that generally camp accounts should be zeroed out by the end of September. That was generally doable and put some pressure to make sure all expenses were submitted in a timely manner. But the stake didn't give us grief if we still had funds and had a good reason for it and a plan for when it would be taken care of.

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Re: Entering a Check From Another Ward

Postby aebrown » Mon Jun 29, 2015 7:26 am

Hilohi wrote:1. The Other account that we set up for the proceeds from our annual youth fundraising activity should only contain those proceeds, correct?

2. If parents pay for their children's youth camps, should I create a separate Other account for those funds or can I add them to the Other account that we created for the fundraising proceeds? If it's the former, should I go even further and create a separate Other account for each youth (for example "Other - Scout Camp - Mike Jones"; "Other - Scout Camp - Jim Smith")?

Given the guidance that the Other account is to be used for a specific purpose, it's best if the subcategory matches that specific purpose. That is for a particular camp. So a subcategory such as "Other - Youth Fundraising" is too general. "Other - Youth Camps" or even "Other - Scout Camp" is really too general as well. It's better to identify the particular camp: "Other - 2015 Scout Camp" or "Other - Varsity 2015 Teton High Adventure".

On the other hand, listing a youth name is too specific. When you spend money for food, you are not going to break that down into $20 from Mike Jones, $20 from Jim Smith, etc., etc. So it's best to just deposit the payment from each youth into the "Other - 2015 Scout Camp" category, mingled with the funds from the fundraising activity. Then all the expenses are charged to that same category. You can always run an Income and Expense Report, Details by Subcategory, to see exactly who paid money and exactly what money was spent.

It's helpful to go back to basic principles. Often wards turn the fundraising concept on its head, doing fundraising first and then thinking about other budgeting issues. Handbook 2, Section 13.2.8 makes it clear that budgeting is done in this order:
  • "Stake and ward budget funds should be used to pay for all activities, programs, and supplies."
  • "If the ward budget does not have sufficient funds to pay for [a single youth/Cub annual camp], leaders may ask participants to pay for part or all of them"
  • "If funds from participants are not sufficient, the bishop may authorize one group fund-raising activity annually that complies with the guidelines in 13.6.8."
If you follow this process, the fundraising was targeted to cover the shortfall after budget funds and payments from participants were deemed insufficient to cover the projected expenses.

Hilohi wrote:5. Lastly, I now know that the Other category doesn't have to be zeroed out ASAP, but is there a general guideline, such as by the end of the calendar year, or a year from the date the funds were entered into the Other category, etc?

There is no specific guideline from the Church, except that funds are to be spent in a timely manner. How that is interpreted in a particular ward/stake depends primarily on the stake presidency and the audit committee. You'll need to look to your local authorities for specific guidance.

With fundraising, it is often difficult to hit the exact needed amount, so it is not uncommon for there to be a surplus. In that case, you'll need some local direction. In our stake, our leaders counsel that a reasonable surplus can be carried forward to the next year's camp. The important thing is to make sure that all expenses (and payments) for the current year have been processed so that you know the exact surplus. Once that is determined, a single transfer can be made from "Other - 2015 Scout Camp" to "Other - 2016 Scout Camp". Then as plans are made for next year's camp, that amount can be considered in the budgeting. It may be quite possible that no fundraising will be needed next year.


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