How does your unit handle reimbursements over budget?

Discuss questions around local unit policies for budgeting, reconciling, etc. This forum should not contain specific financial or membership information.
bedone
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How does your unit handle reimbursements over budget?

Postby bedone » Wed Oct 21, 2015 8:11 pm

We've had some discussion in my unit lately about how to address reimbursement requests that are beyond the established budget. I'd love to hear how some other units handle this. Here's a hypothetical example:

The Young Men organization has a budget of $1000 for the year. A large percentage of this is for a week-long camp to be held in June. When the expenses come in for the camp, it's over budget. Between that and the other expenses they've had for the year, they've spent the whole $1000 by the end of June. At the end of July, the YM President turns in another reimbursement request for $50 for an overnight activity that they held the previous weekend. The expense has already been incurred, and he wants to be reimbursed. There is no room in the budget to take extra money from other organizations to give to the YM.

Here's some questions:
1) Do you reimburse the $50 expense?

2) What's the plan for the rest of the year? Do you tell the YM they are out of money and can't have anymore activities? Do you go to the stake for help? What if this problem is occurring at the stake level?

I realize this decision will involve the Bishop/Branch President/Stake President. I'm just curious to hear some of your thoughts on what your experience with this has been or how you think the priesthood leader in your unit would proceed.

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Re: How does your unit handle reimbursements over budget?

Postby russellhltn » Wed Oct 21, 2015 8:29 pm

bedone wrote:The expense has already been incurred, and he wants to be reimbursed.

Where is the bishop's approval in all this? Has the YM President been kept up to date in the status of the funds? As you can sermise by my questions, "the system" could have let the YM President down and he wasn't aware of the situation.

I personally have a couple of conflicting thoughts: If the YM President didn't know, I don't think he should be out of the $50.

But at the same time it should be clear that there are consequences for failing to follow the rules. Those consequences should be severe enough to bring about compliance (and not more than that). That can be the tricky part because some leaders are more than willing to get a good chewing out for a defacto increase in their budget. Others would shrink in fear of the very thought of having to discuss it with the bishop.

I think the truth is there isn't a lot of tools to deal with a deliberately errant leader short of release. Maybe someone has some good tactics. I've seen it happen at a ward level. It didn't get fixed until the stake threatened to take the checkbook away.
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davesudweeks
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Re: How does your unit handle reimbursements over budget?

Postby davesudweeks » Wed Oct 21, 2015 9:06 pm

For many years, our ward has assigned a small amount in the Budget (Contingency line) to cover situations where an organization goes over budget. The Clerk "should" provide regular budget status updates to organization leaders. The organization leaders "should" pay attention to their budget. The organization leaders "should" clear any unusual expenses with the bishop before incurring them and "should" make sure those expenses don't run their budget negative. The fact is, these "shoulds" can break down.

Members should not be required to fund their callings out of their own pockets. But I believe it is also acceptable in certain cases to instruct leaders that they are out of money for the rest of the year and they will have to cut back and deal with it. Living within our means is a good lesson for everyone to learn...

Our ward heavily funds YM, YW, and Primary. RS gets the next largest piece of the budget. EQ and HP get about enough for an annual social. As the (new) Assistant Clerk - Finance, I review the budget status with the Bishop monthly. As long as the overall ward budget is looking good and no excessive expenses are occurring he doesn't worry too much if an organization goes over (after all, it really is just one pot of money).

bedone
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Re: How does your unit handle reimbursements over budget?

Postby bedone » Sun Oct 25, 2015 7:55 am

russellhltn wrote:
bedone wrote:The expense has already been incurred, and he wants to be reimbursed.

Where is the bishop's approval in all this? Has the YM President been kept up to date in the status of the funds? As you can sermise by my questions, "the system" could have let the YM President down and he wasn't aware of the situation.


In the situations that we have been discussing in my unit, the leaders have been aware of the budget. We've had a few different scenarios:
- A large activity has an assigned budget, but the leaders go over that amount significantly.
- A large activity is not accounted for in the auxiliary's budget and by the time that is discovered, the expenses have already been incurred.

Thanks for your thoughts.

bedone
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Re: How does your unit handle reimbursements over budget?

Postby bedone » Sun Oct 25, 2015 7:59 am

davesudweeks wrote:Members should not be required to fund their callings out of their own pockets. But I believe it is also acceptable in certain cases to instruct leaders that they are out of money for the rest of the year and they will have to cut back and deal with it. Living within our means is a good lesson for everyone to learn...


I agree, and there have been points when we have talked about just saying, "Well too bad, you aren't going to be able to have these activities because you blew your budget on the other stuff." But this often involves YM/YW/Primary, and there are concerns about punishing the kids for the sins of their leaders.

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Re: How does your unit handle reimbursements over budget?

Postby russellhltn » Sun Oct 25, 2015 11:36 am

bedone wrote:I agree, and there have been points when we have talked about just saying, "Well too bad, you aren't going to be able to have these activities because you blew your budget on the other stuff." But this often involves YM/YW/Primary, and there are concerns about punishing the kids for the sins of their leaders.

The problem is, if you don't do that, then how do your prevent a reoccurrence? Rules without enforcement is merely a suggestion.

Another way of looking at it, is the kids had a much richer activity than they should have had. So they were over-rewarded. Personally, I like the idea of explaining to the group that they spent too much money and they'll have to think of ways of having fun on the cheap for the rest of the year. That is a good life lesson. It also holds the leaders accountable to the kids. Yes, sometimes life isn't fair. But that's a life lesson as well. Sooner or later, they're going to run into the same situation in adult life.
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gregwanderson
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Re: How does your unit handle reimbursements over budget?

Postby gregwanderson » Sun Oct 25, 2015 11:44 am

I think this would be a great thing to discuss at the next Ward Council. Granted, you may not want to single out the YM leadership and embarrass people but, presented the right way, it's a productive lesson to everyone. With the kind of turnover possible among ward leadership, a good refresher on budget policies would be great for everyone. And, with just a couple of months left to plan for 2016, the timing couldn't be much better. The problem of insufficient training could be fixed just in time for a smooth 2016.

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Re: How does your unit handle reimbursements over budget?

Postby davesudweeks » Mon Oct 26, 2015 10:35 am

bedone wrote:I agree, and there have been points when we have talked about just saying, "Well too bad, you aren't going to be able to have these activities because you blew your budget on the other stuff." But this often involves YM/YW/Primary, and there are concerns about punishing the kids for the sins of their leaders.


In my experience, the problem doesn't arise with the kids. It arises with the leaders who want to over-program or over-expense everything. My bishop once had to tell the Primary President, "no, you can not take all the Achievement Days girls to a community play at Christmastime (at about $15.00 each)." Did the girls ask to go? No. Did the parents ask for this? No. It was a Primary President trying to come up with something exciting but not thinking through the financial burden with the Lord's sacred funds.

YM, YW, and Primary youth don't need expensive activities. They need gospel-centered, inexpensive activities as we are advised in the Handbook. Oh, and by the way, they do NOT need a "treat" every time they get together either...

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gregwanderson
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Re: How does your unit handle reimbursements over budget?

Postby gregwanderson » Mon Oct 26, 2015 1:24 pm

davesudweeks wrote:They need gospel-centered, inexpensive activities as we are advised in the Handbook. Oh, and by the way, they do NOT need a "treat" every time they get together either...


In my world, a gospel-centered, inexpensive activity IS the treat. And, they DO need one every time they get together. :D

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Re: How does your unit handle reimbursements over budget?

Postby sbradshaw » Mon Oct 26, 2015 2:43 pm

Handbook 1, 14.7, states clearly that no expenses can be incurred without the presiding officer's approval. So, it seems that the Young Men president in this situation should have gotten approval from the bishop before spending the $50 – not just before being reimbursed for the $50. And if the clerk and bishop are communicating about the budget, the bishop may decide to not approve the $50 expense before it happens so the question about the reimbursement doesn't come up.
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