The basic question is: how do you handle a $1000 Budget check written in 2008 which then has to get voided and replaced in 2009? (I'll use year 2008 and 2009 throughout this post, but of course that could be any prior year and current year; the $1000 figure is arbitrary, but large enough to illustrate the problem). I'm assuming you followed all the proper procedures for voiding the check. My question is about the effects of the replacement check.
Regarding the Church Unit Financial Statement, the Stake Financial Summary, and actual charges against the Budget Allowance, there is actually nothing to do. This seems counter-intuitive to some financial clerks, but it is true. There is an extra $1000 charge in the month the replacement check is written, but there is also a $1000 credit in the month the 2008 check is voided. So there is no extra Budget Allowance hit, just because you had to replace a 2008 check in 2009.
The crux of the problem is that MLS records the credit for the voided 2008 check in 2008. Now the total 2008 expenses look $1000 lower than they should. But what is worse, the replacement check was written in 2009, so the 2009 expenses look $1000 higher than they should. When the clerk runs a Budget report to see how much Budget allowance remains for 2009, it appears that they have $1000 less than they actually do.
When the stake financial clerk looks at the Stake Financial Summary, he sees no problem, since the ward got a $1000 credit for the voided check and a $1000 charge for the replacement check, probably both in the same month.
So how does the ward financial clerk make the 2009 Budget Report look correct? He can:
- Not worry about it. That's easy, but won't help the ward live within its budget allocation.
- Make handwritten adjustments to the appropriate subcategory and totals. This is a pain and has to be done accurately every time a Budget Report is printed.
- Adjust the Budget Allocation up by $1000. This makes the Budget Allocation balance correct, but it skews your records of what you actually spent, which throws off percentages, during the year, and can be misleading when you use 2009 expenditure records to plan for 2010.
- You can try to create a credit for the appropriate Budget subcategory. If that could be done, it would make everything work out fine.
The amount of this compensating entry will be recorded in the Transfer column, which is a bit unfortunate -- it would be better if it could be an actual credit in the Expense column. But other than that, it solves all the problems: the net Budget expenses are correct for every subcategory, the total Budget Allocation remains unaffected. It doesn't have any of the negative side effects of the other 3 options I listed.
Yet I am a bit concerned about this procedure. It seems a bit like a hack -- this is not a documented use of Other Items during Reconciliation. If I could figure out a better way, I would do it, but this is the only solution I can find. Does anyone have a better solution? Any concerns or comments?