Policies on Moving Funds Between Two Major Cateogories

Discuss questions around local unit policies for budgeting, reconciling, etc. This forum should not contain specific financial or membership information.
User avatar
wrigjef
Senior Member
Posts: 512
Joined: Sun Mar 01, 2009 8:38 am
Location: Chesapeake, Virginia
Contact:

Postby wrigjef » Tue Aug 14, 2012 8:18 am

jdlessley wrote: CHQ has not, to date, specified when funds must be collected for an AMFA event. Rather it is up to the bishop to decide the best approach for the benefit of the members. We have AMFA sub-categories go negative for a period of time after the event has occurred. The members contribute as they can to meet their obligation.

.

This is a snipit from an email one of our units received from the financial department
"
An additional clarification: The Other category is a pass through account for short term expenses. It is a collect BEFORE expense account. Not an expense first, and then hopefully collect all the funds later;

A) This category should be a zero balance unless you are collecting funds for an upcoming expense (such as a camp registration, etc.).

B) Planning for upcoming events always necessitates planning to collect the necessary funds BEFORE the need for expenditures. If collected funds do not cover the expense when due, the balance needed should come from the Budget. Deposit additional funds collected (after the expense) into the Budget account charged for the activity.

C) None of your accounts should go into the deficit, especially with hopes to eventually collect and replenish the funds. If the deficit is the result of a long standing negative balance, which has been masked by positive balances in your sub-categories, it should be resolved ASAP.



In order to bring the deficit in the Other category to a zero balance, please write a check from your “Budget” payable to the unit. Deposit this check (with your tithing funds) to your “Other” category (be sure to include in your MLS Transmission). "

allenjpl
Member
Posts: 309
Joined: Wed Apr 08, 2009 8:26 am
Location: Las Vegas, NV, USA

Postby allenjpl » Tue Aug 14, 2012 12:39 pm

wrigjef wrote:This is a snipit from an email one of our units received from the financial department
"
An additional clarification: The Other category is a pass through account for short term expenses. It is a collect BEFORE expense account. Not an expense first, and then hopefully collect all the funds later;

A) This category should be a zero balance unless you are collecting funds for an upcoming expense (such as a camp registration, etc.).

B) Planning for upcoming events always necessitates planning to collect the necessary funds BEFORE the need for expenditures. If collected funds do not cover the expense when due, the balance needed should come from the Budget. Deposit additional funds collected (after the expense) into the Budget account charged for the activity.

C) None of your accounts should go into the deficit, especially with hopes to eventually collect and replenish the funds. If the deficit is the result of a long standing negative balance, which has been masked by positive balances in your sub-categories, it should be resolved ASAP.



In order to bring the deficit in the Other category to a zero balance, please write a check from your “Budget” payable to the unit. Deposit this check (with your tithing funds) to your “Other” category (be sure to include in your MLS Transmission). "


This information is all well and good, except that

  1. It isn't in the training (which hasn't been updated in 4 years)
  2. It's never been broadcast more generally via MLS messages or otherwise
  3. "Lending" money to the Other account is counter-intuitive. You only get to the "participants pay for all or some of the expense" if budget funds are inadequate.
  4. The training does include a bit on resolving deficits, including deficits caused by overspending the Other account, but you don't get deficits under the above method, leading to confusion as to whether short-term Other deficits are acceptable.
  5. The only time deposits to Budget are described are in the context of a specific advance, where unused money is put back into the budget. This type of loan to the Other account, where the full amount is redeposited after collecting additional money, is never mentioned or described.
The only way you receive this information/guidance is if your overall Other account goes negative. Then the bishop receives an email from one or more deeply concerned persons at Accounting Services.

russellhltn
Community Administrator
Posts: 25098
Joined: Sat Jan 20, 2007 2:53 pm
Location: U.S.

Postby russellhltn » Tue Aug 14, 2012 12:47 pm

allenjpl wrote:The only way you receive this information/guidance is if your overall Other account goes negative. Then the bishop receives an email from one or more deeply concerned persons at Accounting Services.


Since CHQ currently can't see individual accounts, poor practices can go undetected as long as there's a positive amount for the overall. But sooner or later, the unit won't be so lucky and that's when the emails start arriving.

As MLS Financial functions start moving to the web, there's a good chance that may change.
Have you searched the Wiki?
Try using a Google search by adding "site:tech.lds.org/wiki" to the search criteria.

User avatar
johnshaw
Senior Member
Posts: 2076
Joined: Fri Jan 19, 2007 1:55 pm
Location: Syracuse, UT

Postby johnshaw » Tue Aug 14, 2012 1:35 pm

allenjpl wrote:This information is all well and good, except that

  1. It isn't in the training (which hasn't been updated in 4 years)
  2. It's never been broadcast more generally via MLS messages or otherwise
  3. "Lending" money to the Other account is counter-intuitive. You only get to the "participants pay for all or some of the expense" if budget funds are inadequate.
  4. The training does include a bit on resolving deficits, including deficits caused by overspending the Other account, but you don't get deficits under the above method, leading to confusion as to whether short-term Other deficits are acceptable.
  5. The only time deposits to Budget are described are in the context of a specific advance, where unused money is put back into the budget. This type of loan to the Other account, where the full amount is redeposited after collecting additional money, is never mentioned or described.
The only way you receive this information/guidance is if your overall Other account goes negative. Then the bishop receives an email from one or more deeply concerned persons at Accounting Services.


I may have had the very first email from the team about the Other Account being negative, it was extremely critical and overly harsh in my opinion for something to have come out of the blue like that It was FULL of bold and underlined text, stated things the handbook didn't state, etc... I begged their forgiveness and asked if in the future that Headquarters might pre-fund the activities of a Temple Open house rather than relying on a stake to go negative in their Other account... :) We discussed some of my own personal thoughts on the matter. While I think there are never many good reasons for an Other account to go negative, the solution of using the Budget to write a check if the expense is well in advance of the collection (like a deposit for a camp) is an adjustment for many wards/branches that has traditionally been done with no thought that it was wrong procedure. Many wards have traditional fund raising, or are used to doing the fund raising nearer the time of the event rather than the time of the needed pre-camp funds, that is a matter of adjustment for a ward or branch. I spoke to a team lead, and then when our Other account still had not gone positive another message was sent directly to the Stake President from their Manager... again, we wondered about the Open house idea not sinking in, but whatever, we collected a bunch of money for a stake YW camp, camped it in the other account until we were reimbursed for our open house expenses... made the problem go away for now:

After having the conversation with SLC, I reviewed the training again on the other account and it was explicit in the training that you collect funds into other and then write a check out of other. Frankly, I hadn't caught it before because of the nuance'd nature, it was never listed boldly as a bullet point or put into a thou shalt, it was just casually said specifically about 3 times as I recall. So I do sympathize with them. I am, however, afraid of what using the budget in a way to 'cover' a negative amount will do... see my comments below.

Here are the items I mentioned to at least a member of the team and that team's manager:
  1. This has come as a shock to many, it is obvious, because you have felt the need to take this drastic action, why not warn everyone through a communication. an MLS message, the wiki, the tech board are all avenues you could've used to communicate that this would be coming. They acknowledged it being a good idea and I thought that would be a direction they headed down.
  2. For a stake to not go negative would probably be an issue, we often fund multi-stake regional events or share in that task among different stakes. To pre-fund an activity to stay positive and then send refunds out after or request more funds later seems a great deal of effort that seems to be a busy-work related.
  3. The temptation will be (and what the accounting team directed me to do) is to use the Budget in all cases, and continue in the old-style practice of collecting after the fact, or doing a fund raiser after the fact. The reason I feel this is a slippery slope is that how long before that becomes a yearly fund raiser that just gets put in the budget. If the expense was written to the budget, then the fund raiser money will be deposited into the Budget.... then it becomes a fund raiser for Budget money... This, of course, leads us back down the path that the equalized budget was meant to lead us away from originally.

I realize that the majority will never do #3, but the problem is that we are all volunteers, as thoughtful as a bishop may be, as well meaning as clerks may be, there will be a problem from this type of encouragement. Doesn't this smack of the original CUBS rollout where all accounting was done in the Income/Expense report? It almost seems now that I look back on it with this latest push, that might have been the start of eliminating the other account.

User avatar
aebrown
Community Administrator
Posts: 15085
Joined: Tue Nov 27, 2007 8:48 pm
Location: Sandy, Utah

Postby aebrown » Tue Aug 14, 2012 3:25 pm

Another scenario occurs frequently at the stake level. We collect funds from the wards in our stake for various purposes, and also from other stakes for our agent stake responsibilities. In some cases, we might be temporarily negative, and following those instructions for using Budget funds would create an accounting mess.

Specifically, we collect funds from the wards for a YW camp for Beehives. The wards have told us how many YW will be attending, and they are to send the stake $100 per girl. We have a deadline from the camp where we must send them a check, or we will not be able to participate. This year, we got checks from all but one ward on time, and we deposited those checks into the appropriate AMFA subcategory. But then the deadline arrived, and we had to send the check in. We were short $400 because the one ward was sending 4 girls, but hadn't sent a check. The bishop assured us that he would give us the check on Sunday (and he is not surprisingly an honest man, who did indeed deliver the check on Sunday). But the check had to be sent on Wednesday, so we wrote the check and we were temporarily $400 in the hole for that subcategory.

If we were to strictly follow the rules in that email message referenced earlier, we would have written $400 from Budget and then deposited the $400 check into Budget. But that would create some activity in a subcategory of Budget that causes that part of the YW camp spending to be in a totally different category from all the rest. And since we hadn't planned to spend any Budget funds for this pass-through expense, we had no Budget subcategory set up for such an expense. Then there's no way to run a report that accurately shows what was spent on that camp; you'd have to run an Income&Expense Report for the bulk of it, and a Budget report for the one deposit and the one expense. That's a mess.

I certainly understand the principles behind that message, and I support them. But collecting funds from a ward doesn't fit the characterization from that message of "hopefully collect all the funds later"; we knew we would collect the funds very soon. I think there needs to be some room for judging that a very temporary deficit in an AMFA subcategory can be appropriate at times.
Questions that can benefit the larger community should be asked in a public forum, not a private message.

jngarr
New Member
Posts: 3
Joined: Sat Feb 25, 2012 6:38 pm

Postby jngarr » Sun Aug 19, 2012 11:54 am

RussellHltn wrote:Nope. Since donations are not allowed in budget, there is no way to get a tax deductible donation in there. It's expected that any income into budget is just a reimbursement.

If you want a tax deduction, you'll have to donate to tithing, fast offering or some of the other valid donation categories.

There was a time when donations to budget were tax-deductible, but that was back when units were expected to raise their own operating funds. It hasn't been that way for several years now. At least not in the US. I suppose some countries could be different, but I don't think so.


RussellHltn, yes, I did not say that correctly. I said "contributions to budget" but I meant general contributions (as in tithing). Tithing is deductible whereas contributions to Other generally would not be (if the ward is using Other as restricted as CHI states), because my contribution is, for example, for my son's YM group to go camping -- a direct benefit. That said, those facts I offer are from the wrong perspective.

The perspective that is important here is Budget vs Other. I think the answer lies in the fact that the nature of Budget funds from HQ is mixed and unknown -- it made be comprised of tithing funds, investment income earned by the church, etc, etc. Thus, Budget funds' a ward gets from HQ do not have as their sole source tithing. Therefore, from a tax perspective I no longer see a problem with a transfer of funds from Budget to Other.

Thanks for the sounding board!

dheilner
New Member
Posts: 24
Joined: Tue Sep 04, 2012 7:39 pm

Changing original expenses.

Postby dheilner » Tue Sep 18, 2012 3:57 pm

What about fixing the issue by moving expenses from Other:YM to Budget YM, by changing the category of the original expenses? It is easier than writing and depositing a check. It splits up the expenses for the activity, but as long as you keep track, is this also an acceptable practice to get rid of the deficit in other?

User avatar
aebrown
Community Administrator
Posts: 15085
Joined: Tue Nov 27, 2007 8:48 pm
Location: Sandy, Utah

Postby aebrown » Tue Sep 18, 2012 5:46 pm

dheilner wrote:What about fixing the issue by moving expenses from Other:YM to Budget YM, by changing the category of the original expenses? It is easier than writing and depositing a check. It splits up the expenses for the activity, but as long as you keep track, is this also an acceptable practice to get rid of the deficit in other?


This is a long, rambling thread, so it's easy to miss it, but that suggestion was made a couple of times earlier in the thread, most recently here. As long as the correction is approved by the bishop and a proper notation is made on the original documentation for the expense to leave an audit trail, I agree that this can be a reasonable practice.
Questions that can benefit the larger community should be asked in a public forum, not a private message.

waynecooke
Member
Posts: 113
Joined: Wed Oct 27, 2010 11:05 am
Location: Kalama, Washington

Postby waynecooke » Sun Sep 23, 2012 4:55 pm

I want to transfer funds from a budget account to an Authorized...etc. account. I know that you used to be able to do it through the "Adjustments" page, but now the only accounts that come up are Authorized...etc. accounts. Could someone tell me how to do it, if it is possible. Thank you in advance.

User avatar
aebrown
Community Administrator
Posts: 15085
Joined: Tue Nov 27, 2007 8:48 pm
Location: Sandy, Utah

Postby aebrown » Sun Sep 23, 2012 7:26 pm

waynecooke wrote:I want to transfer funds from a budget account to an Authorized...etc. account. I know that you used to be able to do it through the "Adjustments" page, but now the only accounts that come up are Authorized...etc. accounts. Could someone tell me how to do it, if it is possible. Thank you in advance.


I think you mean the "Transfers" page (there is no page I know of titled "Adjustments"). But except for a very temporary bug that seemed to allow transfers between major categories (see MLS 3.0: Transfer Policy Change?), that has never been possible. So once you pick a subcategory in a particular major category as the source of a transfer, your only options for the subcategory of the destination are in the same major category.
Questions that can benefit the larger community should be asked in a public forum, not a private message.


Return to “Local Unit Finance”

Who is online

Users browsing this forum: No registered users and 2 guests