Reconciliation - Temporary Items

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applejack-p40
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Reconciliation - Temporary Items

Postby applejack-p40 » Mon Mar 09, 2009 1:48 pm

Two financial clerks ago, a "temporary item" was created in order to reconcile something that happened several months earlier. The dates recorded are more than three years (plus the current year) ago, thus neither MLS nor I now have records. This temporary item is still lingering. No one ever fixed the problem. If I remove the "temporary item" then things do not reconcile. The last clerk called headquarters and asked them about this and yet they were not able to solve the problem. When headquarters was asked whether or not they were concerned, the consensus was, "no." The stake clerk does not know what the problem is either. I have tried and tried to figure out what went wrong (as well as the clerk before me), but we cannot figure it out, and now we are afraid it was too long ago so we do not have enough information to make a confident decision. What can I do to get rid of this "temporary item" and still reconcile?

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aebrown
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Postby aebrown » Mon Mar 09, 2009 2:08 pm

applejack wrote:Two financial clerks ago, a "temporary item" was created in order to reconcile something that happened several months earlier. The dates recorded are more than three years (plus the current year) ago, thus neither MLS nor I now have records. This temporary item is still lingering. No one ever fixed the problem. If I remove the "temporary item" then things do not reconcile. The last clerk called headquarters and asked them about this and yet they were not able to solve the problem. When headquarters was asked whether or not they were concerned, the consensus was, "no." The stake clerk does not know what the problem is either. I have tried and tried to figure out what went wrong (as well as the clerk before me), but we cannot figure it out, and now we are afraid it was too long ago so we do not have enough information to make a confident decision. What can I do to get rid of this "temporary item" and still reconcile?


There are only two ways to eliminate a temporary item:

  1. The item gets corrected on a subsequent Church Unit Financial Statement, and thus the temporary item is no longer needed, and you can just check it off as you reconcile that statement. This is typically what is done, for example, when a donor check bounces and so the Other category has been charged on the CUFS. When the corresponding donation has been canceled in MLS, but the credit to the Other account has not yet shown up on the statement, you make a temporary item for the Other account; in the next month when the credit shows up, you just check off the temporary item.
  2. You make the temporary item permanent by creating an Other Item during reconciliation (or creating some other expense or transfer transaction). This would seem to be the best course of action now. It's a pity that the item was not corrected in a timely manner so that the real reason could be researched. Generally if a temporary item lasts more than a couple of months, something is wrong. But previous clerks were negligent, and there's not much you can do about that now.
You didn't say what the problem was, but making it permanent may necessitate additional corrections. For example, if the problem was a bounced donor check that was never corrected, the "fix" would be to make a permanent debit to the Other account. But it is not permissible to have a negative balance in the Other account, so you would have to then bring that balance to zero. The only permissible way I know of to do that is to write a check from Budget to cover the shortfall. But that example is only one possibility -- you may need to take other additional steps, or none at all, depending on the particular situation.

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Postby applejack-p40 » Mon Mar 09, 2009 2:18 pm

Alan_Brown wrote:The item gets corrected on a subsequent Church Unit Financial Statement, and thus the temporary item is no longer needed...

Yeah, unfortunately this did not fix the problem way back when.
Alan_Brown wrote:You make the temporary item permanent by creating an Other Item during reconciliation (or creating some other expense or transfer transaction).

I think I will try this and report back. Hopefully no other problems will arise.
Alan_Brown wrote:You didn't say what the problem was..."

That's just it. I don't know what the problem is. All I can determine is that church headquarters (the financial statement from them) "says" that MLS is shy $200 in the "Missionary" account (when the temporary item is removed). With the temporary item, things zero. I cannot even tell more specifically "what" under the category of "Missionary." The "reason" listed with the temporary item just gives a date, which is of course too long ago to have records of. So definitely one thing I have learned is to be more descriptive whenever I get a chance with the records I deal with.

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aebrown
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Postby aebrown » Mon Mar 09, 2009 2:50 pm

applejack wrote:All I can determine is that church headquarters (the financial statement from them) "says" that MLS is shy $200 in the "Missionary" account (when the temporary item is removed). With the temporary item, things zero. I cannot even tell more specifically "what" under the category of "Missionary." The "reason" listed with the temporary item just gives a date, which is of course too long ago to have records of. So definitely one thing I have learned is to be more descriptive whenever I get a chance with the records I deal with.


Given that the issue is confined to the Missionary account, creating the Other Item should take care of the problem. If I understand you correctly, the Church thinks you have $200 more in Missionary than your MLS records show. So you will have get a $200 credit by fixing this problem, which is definitely nicer than the other way around!

One think you might watch out for: generally the Missionary account is not used; rather the Ward Missionary account has all transactions related to missionaries serving from your ward. I just helped someone zero out the Missionary account in another thread: Moving Beginning balance from Missionary to Ward Mission.

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Postby applejack-p40 » Wed Mar 11, 2009 12:26 pm

Alan_Brown wrote:Given that the issue is confined to the Missionary account, creating the Other Item should take care of the problem. If I understand you correctly, the Church thinks you have $200 more in Missionary than your MLS records show. So you will have get a $200 credit by fixing this problem, which is definitely nicer than the other way around!

I am wrong (sorry). To be more clear, the "Reconciliation Report" lists the "MLS Balance" under "Missionary" as $200 more than the "Church Unit Financial Statement's" "Adjusted Statement Balance." I interpret that to mean that MLS has $200 that headquarters should have taken out long ago. Transferring $200 out of "MLS Missionary" should fix it. Fortunately there is a small surplus to do this.

Alan_Brown wrote:You make the temporary item permanent by creating an Other Item during reconciliation (or creating some other expense or transfer transaction). This would seem to be the best course of action now.


I was in MLS last night and created an "Other item" on last month's reconciliation. I figured it was alright to mess with this because we just went through it Sunday and the Bishop has not yet signed it. I wanted to see what happened. Well, by entering a -$200 under "Missionary," things reconciled (zeroed). MLS states the following:

"Other items are items that appear on your Church Unit Financial Statement but have not been entered into MLS."

This seems appropriate since it "appears" that $200 was never taken out. (Maybe this correction showed up on a financial statement years ago under "Miscellaneous Disbursements and Credits" and was never entered into MLS.)

But now I have another question. There is a check box next to my newly entered "Other item" that reads:

"Check this box to automatically create transfer entries for this item."

I stopped here because I did not want to do something I could not reverse at this point. Should this box be checked. What happens then? Does the "Other item" go away? Will things still be reconciled?

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aebrown
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Postby aebrown » Wed Mar 11, 2009 2:08 pm

applejack wrote:There is a check box next to my newly entered "Other item" that reads:

"Check this box to automatically create transfer entries for this item."

I stopped here because I did not want to do something I could not reverse at this point. Should this box be checked. What happens then? Does the "Other item" go away? Will things still be reconciled?


That check box is checked by default, because usually you want to create corresponding transfer entries (for example, if you use Other Items to create a Budget expense for Distribution Services, you still want to create the corresponding transfer item to bring your statement balance for Budget to 0). But in this case we want to create just a single entry, without the corresponding transfer entries, so it seems that you should leave it unchecked.

The Other Item will not go away in either case. If the box is not checked, it will simply become a single transfer transaction. Checking the box would cause a second transfer transaction (in the opposite direction) to be created, which would almost certainly not reconcile.

However, note that the MLS help file (topic "Other Items") says in regards to this check box:

There is a small box with a check mark on the left end of the line of fields that appears. Do not remove this check mark unless told to do so by the administration office.
So perhaps you need to consult with Clerk Support, since I am advising you to leave it unchecked.

applejack-p40
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Postby applejack-p40 » Wed Mar 11, 2009 3:28 pm

Alan_Brown wrote:That check box is checked by default...


Hmmm...After a clicked to add the "Other item," the box was not checked. I was afraid to check it. Thanks for your information and advice though.

Alan_Brown wrote:So perhaps you need to consult with Clerk Support, since I am advising you to leave it unchecked.


Yes, I should call them again. Again, thank you for your suggestions and advice. I really appreciate it!

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mcallaghan
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Postby mcallaghan » Sat Dec 12, 2009 2:09 pm

I'm glad I found this thread, though I'm sorry to be resurrecting it. I believe I face the same problem. We have three different temporary items that we've been carrying for more than four years. Apparently there were some bounced tithing checks way back when. The individuals in question aren't here anymore, and I'd like to get rid of the temporary items for good.

From what I read above, it seems that these members got "credit" for their tithing, even though they really didn't pay it. Am I reading that correctly? The temporary items fixed the original returned check imbalance, and successive clerks have been pushing them forward for years. I presume there is no way to go back four years and fix that particular donation batch, so can I just create a negative tithing adjustment now? Seems weird, but I really want to fix this.

Thanks!
Mike

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Postby russellhltn » Sat Dec 12, 2009 2:44 pm

In the U.S., MLS currently holds records back to 2006. (3 years plus current). As long as the donations are between 2006 and 2009, I think you should be able to go back and cancel the affected donation.

Note that the 2006 records will be purged automatically when you close out the year.
Have you searched the Wiki?
Try using a Google search by adding "site:tech.lds.org/wiki" to the search criteria.

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mcallaghan
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Postby mcallaghan » Sat Dec 12, 2009 2:57 pm

I'll check tomorrow how old the batch is. I had assumed you wouldn't be able to go back to a prior year. Thanks!


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