YW Fund Raiser: Other and Budget Accounts

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ralitaco
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YW Fund Raiser: Other and Budget Accounts

Postby ralitaco » Tue Jun 28, 2011 9:14 pm

Our YW had a fundraiser to pay for YW camp. This fundraiser included a "Service Auction" and some of the winners included their donations on their tithing slip: Other YW Camp. (so far, so good I think).

Here comes the confusing parts:
1. The check to pay for YW camp was written and "charged" to both the Other category and the YW Budget category. (i.e.-$700 total; $400 - Other; $300 - YW Budget)
2. Some of the member's donations were made AFTER the check was written. In order to replace the funds in the YW budget category, these donations were entered as donations directly into the YW budget category.

I have the following questions:
1. Should the check have been written entirely out of the Other category with the deficit handled by writing a check from the YW budget to the Other acct? (Training slide 28) OR was this the correct way to handle this since the fund raiser was to "help" pay for YW camp? (Training slide 18)
2. Should the members' donations have been entered as donations to the Other YW Camp category (slide 15); then a check written from the Other account to the Budget account? (training slide 32)
3. If the answer to #2 was yes and the funds should've gone into the Other category, how do I correct this? (training slide 26 & 27, but change from Budget to Other)

Thanks,
Jim

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Postby russellhltn » Tue Jun 28, 2011 9:37 pm

Question - is it possible to "recategorize" the check to change the amounts of the two accounts the check is drawn from?
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Postby jdlessley » Tue Jun 28, 2011 9:42 pm

ralitaco wrote:I have the following questions:
1. Should the check have been written entirely out of the Other category with the deficit handled by writing a check from the YW budget to the Other acct? (Training slide 28) OR was this the correct way to handle this since the fund raiser was to "help" pay for YW camp? (Training slide 18)
The way the disbursement was made is fine. How the funds were handled after the disbursement was made is where there are problems. Your next question provides the correct procedure.
ralitaco wrote:2. Should the members' donations have been entered as donations to the Other YW Camp category (slide 15); then a check written from the Other account to the Budget account? (training slide 32)
This is the correct procedure. Collect the funds in the Other:AMFA:YW Camp then recover the funds disbursed from the budget with the excess in the Other:AMFA:YW Camp category just as you describe. But just for clarity the Check would be written to the Ward from the Other:AMFA:YW Camp and then deposited to the Budget:YW category. The yellow copy of the Tithing and Other Offerings slip would be attached to and filed with the disbursement authorization form as the proof of expense. The white copy of the Tithing and Other Offerings slip would be included in the donation batch as per any other donation.
ralitaco wrote:3. If the answer to #2 was yes and the funds should've gone into the Other category, how do I correct this? (training slide 26 & 27, but change from Budget to Other)
Open the donation batch for each donation that was deposited to the Budget:YW category and change the category to Other:AMFA:YW Camp. You will need to provide a reason such as "corrected donation category". Don't forget to notify the donors and get their OK to make the correction on the slip to show the adjusted category. I usually write on the back of the slip the reason for the adjustment and annotate that the donor agreed.

The best approach would have been to write the entire check amount out of the Other:AMFA:YW Camp category. An Other category can have a deficit for a period of time while the funds are collected. If the entire deficit is not recovered then a disbursement from the Budget:YW category would be made and deposited into the Other:AMFA:YW Camp. When that disbursement from the budget is made is entirely up to the bishop in council with the YW leaders to determine if and when any donations would be made.
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Postby aebrown » Tue Jun 28, 2011 9:51 pm

jdlessley wrote:Collect the funds in the Other:AMFA:YW Camp then recover the funds disbursed from the budget with the excess in the Other:AMFA:YW Camp category just as you describe. But just for clarity the Check would be written to the Ward from the Other:AMFA:YW Camp and then deposited to the Budget:YW category.


I would agree with almost every step you listed. But a simpler way to accomplish zeroing out the Other:AMFA:YW Camp category is to:

  1. Adjust all the donation so that they are in Other:AMFA:YW Camp as you described.
  2. Then note the balance in the Other:AMFA:YW Camp category
  3. Adjust the categories of the check that was written. Increase the Other:AMFA:YW Camp component by the balance calculated in step 2, and decrease the Budget:YW component by the same amount
The advantage of this method is that there is no need for writing an extra check that then has to be deposited. The net result is the same:

  • All donations are made to Other:AMFA:YW Camp (correct according to policy)
  • The Other:AMFA:YW Camp balance is 0 (also correct according to policy)
  • The Budget:YW category is charged for the amount not charged to Other.
But you saved yourself a check and a deposit transaction.

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Postby jdlessley » Tue Jun 28, 2011 10:00 pm

RussellHltn wrote:Question - is it possible to "recategorize" the check to change the amounts of the two accounts the check is drawn from?
I know the category(ies) for disbursements can be changed. I just don't know what the end results would be. I assume it would be the same as for a change in a donation batch. I would definitely take notes to clear up any questions the auditor would have.
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Postby jdlessley » Tue Jun 28, 2011 10:07 pm

aebrown wrote:IBut you saved yourself a check and a deposit transaction.
That is a cleaner way of doing it. The only thing that would affect this methodology is when the donations that were made after the disbursement were received. If they came in over a short period of time then things are fine. But if adjustments are made each Sunday as donations arrive over several weeks or months then there are going to be a lot of adjustments to the disbursement. To an auditor that would be a red flag. I would hope that the clerk at the audit was the one making all the changes so he could clarify the situation to the auditor.
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Postby russellhltn » Wed Jun 29, 2011 12:41 am

jdlessley wrote:But if adjustments are made each Sunday as donations arrive over several weeks or months then there are going to be a lot of adjustments to the disbursement. To an auditor that would be a red flag.


I'd think any transfer of funds from Other to Budget would be an immediate red flag. I'd think a re-adjustment would have a better chance at being self-explanatory.
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Postby aebrown » Wed Jun 29, 2011 5:42 am

jdlessley wrote:That is a cleaner way of doing it. The only thing that would affect this methodology is when the donations that were made after the disbursement were received. If they came in over a short period of time then things are fine. But if adjustments are made each Sunday as donations arrive over several weeks or months then there are going to be a lot of adjustments to the disbursement. To an auditor that would be a red flag. I would hope that the clerk at the audit was the one making all the changes so he could clarify the situation to the auditor.


I would definitely wait until things settle before making the adjustment. But it's the same issue with writing a check from Budget to Other -- do you keep writing checks to move funds around, or wait until things settle and write one check?
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Postby crislapi » Wed Jun 29, 2011 8:56 am

aebrown wrote:[*]Adjust the categories of the check that was written. Increase the Other:AMFA:YW Camp component by the balance calculated in step 2, and decrease the Budget:YW component by the same amount
[/LIST]


I was good up to here. I am confused now. How can you change the amount checks are for once they have been cut, transmitted and deposited? It would have to be two separate checks because the funds are from Other and Budget. I realize the total amount is still the same, but these are two separate accounts your checks are drawing from, and they've already been issued and likely cashed. This just doesn't seem to be clean to me.

Going on to the audit issue, your check stubs no longer match the documentation as well. I guess you could document the change, but I still can't get past that it feels wrong to change the amount a check is for after it's already been cashed. Am I just off base?

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Postby aebrown » Wed Jun 29, 2011 9:08 am

crislapi wrote:I was good up to here. I am confused now. How can you change the amount checks are for once they have been cut, transmitted and deposited? It would have to be two separate checks because the funds are from Other and Budget.


Of course you can't change the amounts of checks that have already been written. I was not suggesting that. I was simply talking about adjusting the categories.

You are thinking it has to be two separate checks because the check was written from Budget and Other. But that has not been a restriction since the CUBS transition -- you can now write a single check from multiple major categories.

The OP specifically said 'The check to pay for YW camp was written and "charged" to both the Other category and the YW Budget category. (i.e.-$700 total; $400 - Other; $300 - YW Budget).' The check already spans major categories; I was merely suggesting that the categorization of that check be adjusted.

crislapi wrote:Going on to the audit issue, your check stubs no longer match the documentation as well.


You raise a reasonable point, but that is true of any category adjustment you ever make to any check or donation. I don't think you're saying that no category adjustments should ever be made. We just need to attach a note of the adjustment to the documentation for the original donation or expense.
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