POST CUBS transition question 2 - Allocation vs Transfer - Ward Level

Discuss questions around local unit policies for budgeting, reconciling, etc. This forum should not contain specific financial or membership information.
ralitaco
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POST CUBS transition question 2 - Allocation vs Transfer - Ward Level

Postby ralitaco » Sat Oct 30, 2010 7:12 pm

(Please keep responses directed to the Ward level)

I have read on various threads that there are 2 ways to "put" money into the auxillary's budget categories.
One is to transfer funds from Budget:Allocation
The other is to use the View/Edit Budget (not sure if that is the exact name)

Can someone provide a pros and cons list of each way?

From what I have read in the latest training doc under the heading "Issue: How do I allocate the budget?" it says "the unit can then create transfers..."

So I am presuming that is the preferred method.
If that is the case, then the transfers would have to be made quarterly, correct?

I'm sure I will have more questions, on this, but enough for now.
Thanks,
Jim

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aebrown
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Postby aebrown » Sat Oct 30, 2010 7:50 pm

ralitaco wrote:(Please keep responses directed to the Ward level)


These are good questions you ask. The questions and answers for this particular topic are almost exactly the same for the ward and stake levels.

First of all, it is Church policy that each unit of the Church should create an annual budget. This has always required some estimating (either at the ward level or stake level or both), since it is not known in December what all 4 quarters of allocation will be. But nonetheless, the unit leader works with the organizations and determines the annual budget.

ralitaco wrote:I have read on various threads that there are 2 ways to "put" money into the auxillary's budget categories.
One is to transfer funds from Budget:Allocation
The other is to use the View/Edit Budget (not sure if that is the exact name)

Can someone provide a pros and cons list of each way?


The basic issue is if you want to use the Budget Report or the Income and Expense Report for tracking budget usage.

If you use the Budget Report, then you would use the View/Edit Budget screen to assign an annual budget to each organization. I see these benefits:

  • The Budget Report shows a percentage of budget remaining, which is a useful piece of information.
  • If budgets are adjusted during the year, you don't have to create actual transactions -- you just adjust the assigned budget.
  • This method is closer to what clerks are used to from the pre-CUBS days.
... and these cons:

  • This doesn't seem to be the recommended method.
  • The Unit Financial Statement will not show remaining balances per subcategory.
  • At the end of the year, you'll still have to transfer budget into each subcategory so that it will have a reasonable balance (zero, or carry forward the remaining balance) for the new year.
If you use the Income and Expense Report, then you would create transfers from Budget:Budget Allocations into the Budget subcategory for each organization. I see these benefits:

  • The remaining balance for each organization accurately reflects just how much money really does remain at that point in the year.
  • You can use the I & E report for all categories -- you don't have to give Budget special treatment.
... and these cons:

  • The Budget Report becomes essentially useless if you also use the View/Edit Budget screen, since allocations will be double counted. But if you don't enter allocations in the View/Edit Budget screen, you'll get odd percentages in the Budget Report. So you probably need to just forget about the Budget Report.
  • You have to enter a lot of transfers every quarter.
I'm sure there are other pros and cons, but these are some that come to mind at this point.

ralitaco wrote:From what I have read in the latest training doc under the heading "Issue: How do I allocate the budget?" it says "the unit can then create transfers..."

So I am presuming that is the preferred method.
If that is the case, then the transfers would have to be made quarterly, correct?


I could see two ways of doing this: one annual and one quarterly.

The quarterly method seems to make more sense: As you receive an allocation from the stake, you would create a transfer for each organization for one fourth of their annual budget. It would go from Budget:Budget Allocations to Budget:Primary or Budget:Young Men, or whatever.

But another possibility is to transfer the entire annual budget to each organization at the beginning of the year. This would be odd, in that it would create a negative balance in Budget:Budget Allocations which would last until October 1 when the last installment of the Budget Allocation arrives. But it would give the organizations a better picture of where they stand on their budget use throughout the year, if they are working off of an Income and Expense Report. I don't think I prefer this method, but it might work for some wards, so I thought I'd mention it.
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ralitaco
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Postby ralitaco » Sat Oct 30, 2010 8:05 pm

Thanks Alan for you thorough answer.

Alan_Brown wrote:These are good questions you ask. The questions and answers for this particular topic are almost exactly the same for the ward and stake levels.


I am sure they are, but he trouble for me is that I am new and as the threads go on, the slight differences start to multiply and get confusing

ralitaco
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Postby ralitaco » Sat Oct 30, 2010 8:09 pm

Alan_Brown wrote:But another possibility is to transfer the entire annual budget to each organization at the beginning of the year. This would be odd, in that it would create a negative balance in Budget:Budget Allocations which would last until October 1 when the last installment of the Budget Allocation arrives.

Wouldn't this be the same issue if you entered the entire annual budget allocation?

ralitaco
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Budget rpt vs Income/Expense report

Postby ralitaco » Mon Nov 01, 2010 7:10 pm

Ok, I am still trying to figure out what to do about distributing the budget either by allocating or transferring funds. In preparation, I printed out a Budget REPORT and an Income Expense REPORT. UMMMM....this is where I am now very confused. (non accountant)

Here is what I have, keep in mind that there were no checks written after 10/17 until 11/1/2010

Income/Expense reports:
Jan 1, 2010 to Oct 31, 2010: all zero except Administration = $-65
Total = -65
Same thing for just the months of Aug, Sept, & Oct.

Budget report:
All allocations = 0.00
Jan 1, 2010 to Oct 31, 2010 Balance column: Administration = -1073.87; Budget Allocations = +955.32; BU-MISC = -450; TOTAL = -568.55
October and September have the same TOTAL

Lets say our ward is getting a check from the stake in the amount of $1500.
If I use the allocation method, I will have an available balance of $931.45
If I use the Transfer method, I will have an available balance of $1435.00

I don't understand why this is.
BUT I do know how I plan to distribute the funds to the auxillaries.

Can someone enlighten me?

Jim

ralitaco
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Postby ralitaco » Mon Nov 01, 2010 7:45 pm

Ok, I think I have found a definitive answer on how to distribute funds to the Aux's.
On page 7 of the email sent 8 OCT 2010, the 3rd "Q" down:
(Q. Do I have to enter transfers to change the budget allocations in each subcategory every quarter?
A. Yes, MLS has changed. Budget subcategories will have ending balances. Using the Transfer funcionality in MLS, you can move balances to auxiliary subcategories.)

Also, on page 3 of the Additional Instructions dated, October 26, 2010 under ISSUE: How do I allocate the budget?
...The unit can then create transfers to each of your budget subcategories in order to track budgets for each subcategory...
....Wards will need to transfer budget (once they receive it from the stake) back to the subcategory...

From these 2 documents, I am surmising that we will no longer be using the budget allocations screens.
Am I correct?

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Postby daveywest » Mon Nov 01, 2010 8:06 pm

ralitaco wrote:From these 2 documents, I am surmising that we will no longer be using the budget allocations screens.
Am I correct?


It appears you can still use the budget allocations screens, but my reading of all the instructions also leads me to believe you should not.
Bro. West
Assistant Stake Clerk - Finance (2 years)
Former Assistant Ward Clerk - Finance (3 years)

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aebrown
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Postby aebrown » Mon Nov 01, 2010 8:54 pm

ralitaco wrote:From these 2 documents, I am surmising that we will no longer be using the budget allocations screens.
Am I correct?


You are certainly correct that this is the recommended procedure. I did consider the alternate approach of using the View/Edit Budget screen to enter budgets and then running Budget Reports in my earlier post; but you would have to be willing to live with the cons that I mentioned. I mention that for completeness, but I think we should stick with the recommended approach.
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