Distribution Order - Budget

Discuss questions around local unit policies for budgeting, reconciling, etc. This forum should not contain specific financial or membership information.
jsnider81-p40
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Distribution Order - Budget

Postby jsnider81-p40 » Tue Aug 25, 2009 11:06 pm

I am in the Branch Presidency of a Spanish Branch and we had a question come up during our semi-annual audit and the auditor did not have the answer. Since we are a Spanish Branch, many of the members are reluctant to use the Online Catalog, so we end up ordering materials (scriptures, manuals, etc) for members through the unit account. When the members purchase the materials in the library, they fill out a tithing slip and the money is donated back into the Library Budget because the Distribution order comes out of the Library Budget. Is this the correct way to do this? Or should donations not be made back into the Budget account?

jdlessley
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Postby jdlessley » Wed Aug 26, 2009 12:18 am

jsnider81 wrote:I am in the Branch Presidency of a Spanish Branch and we had a question come up during our semi-annual audit and the auditor did not have the answer. Since we are a Spanish Branch, many of the members are reluctant to use the Online Catalog, so we end up ordering materials (scriptures, manuals, etc) for members through the unit account. When the members purchase the materials in the library, they fill out a tithing slip and the money is donated back into the Library Budget because the Distribution order comes out of the Library Budget. Is this the correct way to do this? Or should donations not be made back into the Budget account?
Donations should not be made to a budget category. However the contributions the members are making are not donations by definition but either a return of budget funds similar to a return of an excess advance or payments for a tangible benefit. Looking at it as a return of an excess advance from budget would permit the deposit back into the library budget. The procedure would then be the same as returning an excess advance from budget.

Looking at the member contributions as a payment for a tangible benefit requires the funds to be deposited in an Other subcategory. In this case the member contributions just happen to be made after the event (purchasing the materials) has occurred. The library budget is then reimbursed from the Other subcategory by writing a check to the branch and the deposit made into the library budget category.

The problem with looking at the member contributions as a return of excess advance is that they are in fact not returns of advances but rather payments for tangible benefits. Therefore as an auditor I would expect to see the member payments into an Other subcategory and the library budget funds reimbursed by writing a check from the Other subcategory.
JD Lessley
Have you tried finding your answer on the LDS.org Help Center page or the LDSTech wiki?

birdld-p40
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Postby birdld-p40 » Wed Aug 26, 2009 7:50 am

jsnider81 wrote:I am in the Branch Presidency of a Spanish Branch and we had a question come up during our semi-annual audit and the auditor did not have the answer. Since we are a Spanish Branch, many of the members are reluctant to use the Online Catalog, so we end up ordering materials (scriptures, manuals, etc) for members through the unit account. When the members purchase the materials in the library, they fill out a tithing slip and the money is donated back into the Library Budget because the Distribution order comes out of the Library Budget. Is this the correct way to do this? Or should donations not be made back into the Budget account?



Yes. However, I would encourage your members to make the orders on their own through the online catalog. This will save extra work for your clerks.

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calebpusey
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Postby calebpusey » Wed Aug 26, 2009 7:57 am

jdlessley wrote:Looking at the member contributions as a payment for a tangible benefit requires the funds to be deposited in an Other subcategory. In this case the member contributions just happen to be made after the event (purchasing the materials) has occurred. The library budget is then reimbursed from the Other subcategory by writing a check to the branch and the deposit made into the library budget category.


In this case, the unit is not "padding" their budget so they do not need to run the funds through the Other Account. There is no need to create more work for the clerks by donating the funds to an Other Account and then writing a check to reimburse the budget.

Ideally, the members should be ordering the items on their own, however, in this situation it is not a feasible option, so have the items purchased from the budget and the money paid for the items back to the budget is the next best option.
Caleb

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Postby russellhltn » Wed Aug 26, 2009 10:29 am

jdlessley wrote:The problem with looking at the member contributions as a return of excess advance is that they are in fact not returns of advances but rather payments for tangible benefits.


I think that's only a issue if the "donation" appeared in the end-of-year tax statement. But neither Budget nor Other does. So I don't think it's an issue.
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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