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Policies on Moving Funds Between Two Major Cateogories

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Policies on Moving Funds Between Two Major Cateogories

#1Postby Bom1 » Mon Nov 14, 2011 5:16 am

Before following the procedures to move funds between two major categories, such as Budget to Other or Other to Budget, do we need to notify HQ (via MLS Messaging) and ask for permission prior to moving the funds? If yes, where do I find that information?

Example:
Other YM -$XX.XX (The expenses exceeded the income for a ym camp)

Budget YM +$XX.XX (Funds to be moved to cover the shortage in Other YM)
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#2Postby aebrown » Mon Nov 14, 2011 5:30 am

Bom1 wrote:Before following the procedures to move funds between two major categories, such as Budget to Other or Other to Budget, do we need to notify HQ (via MLS Messaging) and ask for permission prior to moving the funds?


No, there is no requirement to notify HQ. You should certainly make sure that your move is within policy (e.g., you're not moving surplus funds from a YM fundraiser into the Relief Society budget), but as long as the proposed transfer meets policy, you can go ahead and do it.

You have to write a check to your own unit to transfer between major categories anyway, so you will leave a clear audit trail showing the authorization for the expense and the reason for it. (I haven't checked again recently, but although there have been rumors that simple MLS transfers between major categories would be allowed, I haven't seen any evidence that this is possible in the US/Canada.)
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#3Postby Bom1 » Mon Nov 14, 2011 5:45 am

Thank you for your insight, it certainly helps me to move forward with clarity!
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#4Postby crislapi » Mon Nov 14, 2011 10:00 am

Moving from budget to any other category is almost never an issue, but moving funds from other major categories to budget almost always is. Moving funds from Other to Budget (as shown in your example) if the funds were member contributions collected to cover the cost of a camp is against policy. Any surplus funds are to be returned to the donors. The funds cannot be spent on anything but the purpose for which they were collected.
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#5Postby dannykos » Mon Nov 14, 2011 10:08 am

crislapi wrote:Moving funds from Other to Budget (as shown in your example) if the funds were member contributions collected to cover the cost of a camp is against policy. Any surplus funds are to be returned to the donors.


That's correct if the funds raised are a true surplus - but often monies aren't collected until after the event, and so budget funds are used to cover it, and then the budget funds replaced from the "other" category once they've been paid.
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#6Postby allenjpl » Mon Nov 14, 2011 10:56 am

dannykos wrote:That's correct if the funds raised are a true surplus - but often monies aren't collected until after the event, and so budget funds are used to cover it, and then the budget funds replaced from the "other" category once they've been paid.


Why would budget funds be used to cover it before cutting the check? It isn't like the Other:AMFA category is going to bounce the check for insufficient funds. Just cut the check from the AMFA category, collect what you can, and then cut a check from the Budget for the rest. There used to be training online on "Understanding and Using the Other Category," but the link has since disappeared from the Training page (although the link from the Wiki is still valid.) In any case, the training and the wiki say this:

If there is a deficit of funds in an “Other” subcategory, and the deficit results from money owed by members, collect the money from the members, and deposit it. If the money cannot be collected, or if the deficit does not result from money owed by members, bring the subcategory to zero by transferring funds from a budget subcategory.
Although I can see why leaders might want to transfer the money from the budget before-hand, just to ensure that the budget monies aren't spent between the time when they cut the check from the AMFA category and the time when they have a final reckoning of how much they actually need to transfer, it really isn't necessary and it gives rise to the appearance of supplementing the Budget category through Other funds.
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#7Postby crislapi » Mon Nov 14, 2011 11:56 am

crislapi wrote:Moving funds from Other to Budget (as shown in your example) if the funds were member contributions collected to cover the cost of a camp is against policy.

I looked a little closer at the OP's example and it seems he has done this correctly. The negative is in Other, the positive is in Budget, so the transfer would be from Budget to Other to zero out Other. There is no problem with this transfer.
Bom1 wrote:Example:
Other YM -$XX.XX (The expenses exceeded the income for a ym camp)

Budget YM +$XX.XX (Funds to be moved to cover the shortage in Other YM)
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#8Postby daveywest » Tue Nov 15, 2011 3:33 pm

crislapi wrote:Moving from budget to any other category is almost never an issue, but moving funds from other major categories to budget almost always is. Moving funds from Other to Budget (as shown in your example) if the funds were member contributions collected to cover the cost of a camp is against policy. Any surplus funds are to be returned to the donors. The funds cannot be spent on anything but the purpose for which they were collected.


I'm pretty sure the newest Handbook states that donations should not be returned to members. There is now a prescribed policy for remitting surplus funds to HQ spelled out in Book 1. I can't say for certain off the top of my head, but I believe this now applies to Other funds as well.
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#9Postby aebrown » Tue Nov 15, 2011 3:59 pm

daveywest wrote:I'm pretty sure the newest Handbook states that donations should not be returned to members. There is now a prescribed policy for remitting surplus funds to HQ spelled out in Book 1. I can't say for certain off the top of my head, but I believe this now applies to Other funds as well.


You're right about donations; they absolutely should not be refunded, and that is the longstanding policy of the Church (see Handbook 1, section 14.4.9). But we're not talking about donations. We're talking about payments -- nondeductible payments for a specific good or service, not charitable donations. Those have always been refundable, and in the absence of someone pointing to a specific change in policy, I'm going to continue working on the assumption that they continue to be refundable.
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#10Postby crislapi » Tue Nov 15, 2011 4:03 pm

daveywest wrote:I'm pretty sure the newest Handbook states that donations should not be returned to members. There is now a prescribed policy for remitting surplus funds to HQ spelled out in Book 1. I can't say for certain off the top of my head, but I believe this now applies to Other funds as well.

The part you are remembering (14.4.9) states
Stake presidents and bishops should inform those who contribute tithes and other offerings that these contributions cannot be refunded. This policy applies also to missionary contributions that are prepaid.

"Other offerings" does not refer to payments made to the Other account. This statement applies to the accounts discussed in 14.4, which are tithing, fast offering, missionary, temple construction, perpetual education, and LDS philanthropies.

More information can be found on the Other category in the Wiki. The first recourse to clearing out a surplus in Other should be to verify that payment was issued from Other instead of Budget for the event, and then returning funds to the members. Only if these first two recourses fail should sending the funds to CHQ be considered.

The best source of information for this used to be the online training, but it is no longer listed at auditing.lds.org. I've also been searching both HB1 and HB2 online and can't find anything referring to the Other Category.
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