Closing Depository Accounts

[ffrsqpilot]

Help!

In July our stake had two units receive letters, instructions, and mailing packets to start using for donation deposits rather than continuing to use their current banks (which had depository accounts). I called Salt Lake and asked about this change and was informed that the Church has been closing Depository Bank Accounts since the beginning of the year. It is just our stakes turn in the barrel to undergo this change.

I have read the instructions sent to the two units and it seems pretty straight forward except for the actual handling of how the Church will close the accounts. Further, when it comes to how the unit will handle the first (and perhaps several following) reconcilliations I am somewhat befuddled as to how that will be managed.

Following are the instructions on the last page of the letter both units within our stake received regarding how to close the account.

1. Church Headquarters will contact the bank and close your local depository account. We instruct the bank to send you a copy of the check that closes the account, for your records.

2. These funds will be returned to Church headquarters by charging your Budget category. You may have less than compensating balance because of bank charges. You may have more than the compensating balance if the bank has paid interest on your account. Depending on the amount, these funds will appear on your financial statement as an offset to the original $1100.00 compensating balance. Any excess will be applied to the Ward Missionary category. All bank service fees can be reimbursed by sending copies of your bank statements, which show the charges, to the Finance Department. Remember that he Unit's local depository account will be closed by Church headquarters.

What has me befuddled is the first sentence in the second paragraph. Just how will the unit do their reconcilliations. I don't remember the depository account data being part of the MLS reconciliation process (have only done a couple two years ago when helping a new clerk in the branch that had the depository account). What further befuddles me is what if the unit doesn't have enough funds in "their budget account - which is allotted by the stake" to cover $1100? I called Salt Lake (specifically the office that sent out the letter and is handling this change) but to be honest I am still confused as to how this is all supposed to work out. The individual I talked to explained about debiting the account and then reimbursing the account when the bank sends the "Depository Account funds" to Salt Lake. So what does this look like on the unit finance statement?

I am sure this will all work out, but am wondering if any of you stake clerks (and ward or branch clerks) have gone through this process. How did it work? Any complications? Reason I ask, is that as the stake clerk I am sure I will get asked a few questions about it - especially the reconcilliation process in trying to balance a budget subtraction and addition if I understood Salt Lake correctly (which is a big assumption on my part)! I tried explaining this to the Stake Presidency both before and after calling Salt Lake and I still couldn't explain how the reconcilliation and movement of funds was supposed to work out for the units.

Helpen alstubelieft (have to practice my Dutch every so often )

[aebrown]

Helpen alstubelieft

I think you mean "Helpen alstublieft", but I'll try to give a bit of help, anyway, since you asked so nicely :rolleyes:.

It's been many years since I went through this transition, and I was a ward financial clerk on FIS back then. I'm sure the procedures have changed somewhat since then. Perhaps someone has gone through it more recently and can give more up-to-date advice.

And the instructions you quoted won't win any awards for clarity. But here's the way I understand it, both from what you quoted and my ancient experience:

1. It was a pretty straightforward process when we did it long ago, but I'm pretty sure we had the exact $1100 balance, so there were no adjustments necessary.
2. The local depository account was not part of the standard CUFS reconciliation. If there ever was activity on that account (because of returned checks or bank fees), I would do a very simple separate reconciliation for that account.
3. If you have more than $1100, you will see the excess credited to Ward Missionary. So if you have, say, $1143.00, you will see on your CUFS a $43 credit in the Ward Missionary category.
4. If you have less than $1100, then the deficit will be charged to your Budget category. So if you have, say, $1050.00, you will see on your CUFS a $50 charge to the Budget category.
5. But it appears that if you can supply documentation showing that the $50 deficit came from bank fees, the Church will reimburse your Budget account for the amount of the fees.
6. I agree that it is confusing for them to say "These funds will be returned to Church headquarters by charging your Budget category." Unless things have changed in the meantime, the $1100 was never part of the actual Budget category. It would make more sense for the Church just to withdraw the $1100 and take it directly (the Church provided the $1100 initially, anyway -- it was not local funds). Only if there is a deficit would there be any need to charge the Budget category, as I mentioned in point 4 above.

In any case, it sounds like you don't really have to do anything to prepare for this. This might be a case where the easiest course of action is to wait and see what actually appears on your CUFS. My guess is that it will be pretty straightforward and obvious what to do once the actual entries appear on a CUFS.

[ffrsqpilot]

Ah yes, one too many e's. Obviously I don't spell any better in Dutch than I do in English.

I guess where my confusion (or befuddlement if you will) comes from is either not understanding or misunderstanding what was imparted during the conversation with Salt Lake. I got the impression that Church headquarters was going to debit the whole $1100 rather than just the overage or deficit. That made no sense to me and I couldn't figure out how that would work when the clerks go to reconcile the July report.

If they (Church Hq) just debits or credits what is above or below the $1100 then that shouldn't be too hard to deal with. But I could swear (not really) that the individual I spoke to was talking about debiting the unit's budget $1100 until the check comes from the bank. Once the bank sends the check then Church HQ would credit the unit for the $1100. If that is the case then I don't see how to reconcile the July report. And if it does indeed happen in that manner, then I am guessing that not only will July have some issues but will remain so until the unit is credited with the $1100 which would show up in hopefully the August report.

I concur that the $1100 was never really the units, but the individual had me believing that the $1100 would be "debited" and in one unit's case they don't have $1100 left in their budget nor their "other" account other than in ward missionary funds.

Hopefully, it will all work out. I was hoping someone had recently gone through this and point out any problems they may have encountered. I'll keep my fingers crossed that it is pretty straight forward and that neither of the clerks calls asking for help!

Thanks Alan

Jim

[aebrown]

If they (Church Hq) just debits or credits what is above or below the $1100 then that shouldn't be too hard to deal with. But I could swear (not really) that the individual I spoke to was talking about debiting the unit's budget $1100 until the check comes from the bank. Once the bank sends the check then Church HQ would credit the unit for the $1100. If that is the case then I don't see how to reconcile the July report. And if it does indeed happen in that manner, then I am guessing that not only will July have some issues but will remain so until the unit is credited with the $1100 which would show up in hopefully the August report.

If the Church does debit the $1100, then you would reconcile by using a Temporary Item in the reconciliation process. That's precisely the kind of thing Temporary Items were created for -- things that show up on the statement but will be canceled out in some way on a future statement.

It's the same thing as a returned check, which requires a temporary item to balance the temporary debit to the Other account, and which you continue to carry forward until the donation is canceled and the credit to the Other account shows up on some future statement.

I concur that the $1100 was never really the units, but the individual had me believing that the $1100 would be "debited" and in one unit's case they don't have $1100 left in their budget nor their "other" account other than in ward missionary funds.

If indeed it comes from the Budget category, then their account will not be in any kind of deficit (since Budget expenses are immediately reimbursed). They would perhaps have only overspent their budget allowance. But when the $1100 is returned by the Church (and I'm confident it would be), they will once again be positive with respect to their budget allowance.

[ffrsqpilot]

Alan, your answer must be entirely too wrong - it makes too much sense!

Using the temporary item capability should do the trick. I will pass this on to both clerks. May have to talk them through it, but it makes perfect sense to do it that way if indeed the unit's are debited the $1100.

Alan, U bent zeer bedankt! (Probably spelled that wrong also but it should be fairly close).