Writing a check to budget from Other account

Discuss questions around local unit policies for budgeting, reconciling, etc. This forum should not contain specific financial or membership information.
joeydef
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Writing a check to budget from Other account

Postby joeydef » Mon Sep 11, 2017 3:10 pm

I'll try to keep this as succinct as possible:

- The wards in our stake participated in a scout camp and the Stake paid for everyone.
- Our ward collected funds from parents to pay for the scout camp and placed them in the "Other: Scout camp" account.
- Rather than having each ward write a check or transfer to the Stake from our Other: Scout camp account, the Stake plans to withhold the amount due from the next quarterly allocation.
- The Stake wants us to write a check from the "Other: Scout camp" account to ourselves (?) to make up the loss to our budget allocation.

This seems to me like a backward and wrong way to accomplish this, but theoretically the money ends up where it's supposed to go. Who am I to question the way the Stake wants to handle it? Can anyone tell me whether there is any conflict with official policy to put my mind at ease?

Thanks.

eblood66
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Re: Writing a check to budget from Other account

Postby eblood66 » Mon Sep 11, 2017 3:51 pm

I can't say that there is an conflict with any written policy since the money in the other account is ultimately going to be used for the purpose it was intended. However, the accounting is awful. It will be almost impossible for someone to track the money afterward to verify that policy was actually followed. And it's on the ward side, not the stake side, where it will look bad. I would not be happy with this situation at all.

I also question that this is easier for the stake unless the stake is already manually transferring budget amounts to the wards. Adjusting the percentages for each ward to keep the correct amount back is going to involve careful calculations once the quarterly reports are filed. And then the stake will actually have to wait until the allocation is made to actually get the extra money.

A transfer to the stake Other account is very easy and quick and the stake should be able to then make one transfer to the correct subcategory once all the ward so their transfers. All very easy, straightforward, and easy to track afterwards. The only reason I can think for the stake to really want to do this is if it has had problems getting the wards to make the transfers and wants to do this to make sure it gets the money. But to my mind, that is a very poor reason for such a bad accounting practice.

I guess if it were me I would tell the stake that I believe this will make it look like I did not follow policy and that makes me feel very uncomfortable. If they insist on doing it this way I'd say I would like a note signed by the stake president instructing me to do this (including all the specific amounts involved) so that I could include it with the check documentation for the check from Other to budget. Then maybe it will become more trouble than it's worth and they'll just do it the easier right way.

russellhltn
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Re: Writing a check to budget from Other account

Postby russellhltn » Mon Sep 11, 2017 4:38 pm

eblood66 wrote:I guess if it were me I would tell the stake that I believe this will make it look like I did not follow policy and that makes me feel very uncomfortable. If they insist on doing it this way I'd say I would like a note signed by the stake president instructing me to do this (including all the specific amounts involved) so that I could include it with the check documentation for the check from Other to budget.


That's better then anything I could come up with. If they ask why, tell them you want written documentation for the records and to show the auditor.
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drepouille
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Re: Writing a check to budget from Other account

Postby drepouille » Mon Sep 11, 2017 5:09 pm

That sounds really convoluted and overly complicated. I think the Stake Presidency Counselor who is the Stake Audit Committee Chairman should step in. If he doesn't understand why the suggested procedure is a problem, he needs to ask the assistant area auditor.
Dana Repouille, Plattsmouth, Nebraska

allenjpl
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Re: Writing a check to budget from Other account

Postby allenjpl » Tue Sep 12, 2017 11:47 am

joeydef wrote:- Rather than having each ward write a check or transfer to the Stake from our Other: Scout camp account, the Stake plans to withhold the amount due from the next quarterly allocation.


Unless the stake normally manually sends budget allocation checks to each ward, I see this going very badly. While the stake can certainly adjust the allocation percentages that will be passed through to the wards, I don't believe they can specify exact amounts without dropping the pass-through allocation to 0% and manually issuing checks. The only way they could is by reviewing each ward's numbers, calculating the amount they expect to receive as a result of that ward, and setting "close-enough" percentages so as to withhold the camp money, and later refund any extra. That would then need to be reversed for the following budget allocation. It would be an enormous mess, just so that someone in the stake office can ensure the money will be collected.

mmaynor
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Re: Writing a check to budget from Other account

Postby mmaynor » Tue Sep 12, 2017 6:36 pm

The church with good reason makes it difficult to transfer money within the ward accounts. By forcing wards to cut checks from one account to another it creates a paper trail. You can really only transfer within other accounts and the ward mission accounts.

cbradford
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Re: Writing a check to budget from Other account

Postby cbradford » Wed Sep 13, 2017 10:12 am

As mmaynor pointed out, by cutting a check from the Other category to the Ward, a paper trail is created. Further, by attaching all documents pertaining to the transaction, the paper trail is reinforced. Finally, the funds that are allocated to wards from the stake technically are the stake's to control; therefore, the stake can adjust the allocations at any time, for any reason.

I just got off of the phone with Local Unit Support, who verified that this is both transparent and acceptable.

allenjpl
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Re: Writing a check to budget from Other account

Postby allenjpl » Wed Sep 13, 2017 3:37 pm

cbradford wrote:As mmaynor pointed out, by cutting a check from the Other category to the Ward, a paper trail is created. Further, by attaching all documents pertaining to the transaction, the paper trail is reinforced. Finally, the funds that are allocated to wards from the stake technically are the stake's to control; therefore, the stake can adjust the allocations at any time, for any reason.

I just got off of the phone with Local Unit Support, who verified that this is both transparent and acceptable.


The issue isn't whether the stake can control budget allocation funds. They can. The issue is whether it's an appropriate use of the Other account to compensate the ward budget for funds the stake refuses to release. The issue is also whether the documents supporting a payment to the stake out of the Other account for a specific and defined purpose will similarly support a payment to the ward budget. It won't, for the very reason you stated - the stake can adjust the allocation at any time, for any reason. There is nothing that guarantees that the amount withheld from the ward in this one period is only for the camp funds. If the allocation was decreased by $2000 from what was "expected," there's no way of telling for certain that the reason why the allocation was lower was because of the camp funds, and not for other needs of the stake, even if the amounts match.

This is the opposite of transparent.

lajackson
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Re: Writing a check to budget from Other account

Postby lajackson » Wed Sep 13, 2017 3:46 pm

However the stake chooses to do it, take good notes and keep them with your financial records. When the stake comes to audit with their stake auditors, you will have a clear explanation of what happened, why, and who told you to do it, and will be able to give it to the chairman of the audit committee (a counselor in the stake presidency) if anyone decides to make an issue of it.

The other option is to go to the audit committee chairman before the fact and see if the stake will consider changing the process.

cbradford
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Re: Writing a check to budget from Other account

Postby cbradford » Wed Sep 13, 2017 4:36 pm

allenjpl wrote:
cbradford wrote:As mmaynor pointed out, by cutting a check from the Other category to the Ward, a paper trail is created. Further, by attaching all documents pertaining to the transaction, the paper trail is reinforced. Finally, the funds that are allocated to wards from the stake technically are the stake's to control; therefore, the stake can adjust the allocations at any time, for any reason.

I just got off of the phone with Local Unit Support, who verified that this is both transparent and acceptable.


The issue isn't whether the stake can control budget allocation funds. They can. The issue is whether it's an appropriate use of the Other account to compensate the ward budget for funds the stake refuses to release. The issue is also whether the documents supporting a payment to the stake out of the Other account for a specific and defined purpose will similarly support a payment to the ward budget. It won't, for the very reason you stated - the stake can adjust the allocation at any time, for any reason. There is nothing that guarantees that the amount withheld from the ward in this one period is only for the camp funds. If the allocation was decreased by $2000 from what was "expected," there's no way of telling for certain that the reason why the allocation was lower was because of the camp funds, and not for other needs of the stake, even if the amounts match.

This is the opposite of transparent.


According to your logic, then no matter what the stake does there will be no transparency ever. The stake doesn't have to justify to the wards how much money is allocated (though our stake does). In this case, the stake has provided an invoice to each ward that shows how much money is going to be withheld. It is a very simple matter to determine how much money they would have received otherwise, if they truly believed the Stake was withholding additional funds.

I think your statement about this being the opposite of transparent is completely unfounded.


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