Excess Other Account Funds... going back in time

As the Stake Finance Clerk i am trying a resolve a issue in one of our remote Branches. currently the root Other Account has a balance of approx. $6,000.00. Of course this is an issue in our audits.

As I researched this I find, in mid year 2007 the balance was $1500.00 (and balanced with te Statement) by end of year it was $8600.00 and this balance carried forward from there. Going back in memories and some old notes this Branch had some major issues transmitting batch donations during this time. The donation batches were mailed in to CHQ (no local bank).

I believe that either the donations during this time were either credited to the Other Account by CHQ as they did not have any transmitted data. For some reason this never resolved at one end or the other.

Support does not have any records to assist, pre CUBS on this, I have the past Unit Audits and old notes to piece together these assumptions. As this was three Branch Presidents ago, no one has any history, and now the Leadership has a perception the money is theirs from other sources.

Does anyone have a recollection that may support or not support my theory on the source of these funds, as to how finances were handled (donation transmission issues)by CHQ during this time period (2007)?

mschlechter wrote:As this was three Branch Presidents ago, no one has any history, and now the Leadership has a perception the money is theirs from other sources.

I can't help you on your questions but you can at least squash this idea. 'Other' account funds can only be used for the specific purpose they were originally donated to. If the source of the funds can't be tracked then the funds need to be sent to CHQ. See the comment at the end of the this article: https://www.lds.org/callings/melchizede ... y?lang=eng (you'll need to log onto your LDS Account to see the article). Although that is a user comment it can easily be confirmed by contacting Local Unit Support.

It would, of course, be best if you can identify the original source. But in almost every scenario I can think of you'll just end up sending the funds to CHQ. If they were supposed to be tithing and fast offering donations you can't correct the original transactions at this point so you'll just have to send a check to CHQ. If the donations were for a member financed activity you're unlikely to be able to determine who should receive refunds at this point either so you'll probably have to do the same.

The one thing that isn't allowed is for the branch to just use the money for whatever they want.

mschlechter wrote:. . . this Branch had some major issues transmitting batch donations during this time. The donation batches were mailed in to CHQ (no local bank).

I believe that either the donations during this time were either credited to the Other Account by CHQ as they did not have any transmitted data. For some reason this never resolved at one end or the other.

Your recollection is correct. Pre-CUBS, when a deposit was made but there was not a corresponding transmission, Headquarters put the money in the Other account until they received the transmission, then transferred it from Other to the correct categories. It is quite likely this happened in the situation you describe, and then the matter was never resolved.

As eblood66 said, the branch should identify the specific purpose of the funds they believe are theirs (Scouts, YW camp, magazine drive, etc.), and then they should write a check on the Other account for the difference and send the money to Headquarters.

lajackson wrote:It is quite likely this happened in the situation you describe, and then the matter was never resolved.

I wonder what that did to the year-end tax reports given to the members.

russellhltn wrote:

lajackson wrote:It is quite likely this happened in the situation you describe, and then the matter was never resolved.

I wonder what that did to the year-end tax reports given to the members.

The tax reports were most likely just fine. Before CUBS, all the data involved in the generation of those reports was in the local MLS database.

The OP implies that the donation batches were created with no errors -- the only problem was with the transmission. So MLS would have a donation batch for X dollars that was never successfully transmitted, and CHQ would have detected a deposit of X dollars that didn't correspond to any donation batch that it had received.

The real problem here is that all the funds in the deposit didn't go to the correct destinations. CHQ can only properly sweep funds when it knows where they are to go. So for an untransmitted batch, no funds can be sent to Tithing, or Fast Offering, or General Missionary, etc. at the CHQ level.

The failure to sweep would have no impact on the local records of what happened. But it does seem like it would have made reconciliation impossible (which was a pre-CUBS requirement that every audit should have checked up on), so someone repeatedly dropped the ball in following up on the reconciliation failures.

Wouldn't it be great if the person who dropped the ball by not reconciling this problem in 2007 also dropped the ball when it came to destroying old, paper records? In other words, what if you could actually find the old paperwork (donation slips, batch reports, etc.) from 2007 in some corner of the branch's office? It might take a couple of hours to look at everything and figure out where the excess money was really supposed to go but, wow. If you had that paperwork you could do it.

As the OP I considered that the old records may still be there (and would bet they are). No reconciliation's were done after mid 2007, this was noted in Audits, but not followed up on (complicated story). The Branch had contacted CHQ several times in resolving this also but......

I would gladly dig around for the old records, but the Branch is a 40 minute plane flight each way (no roads, we have a very unique Stake) and I would probably have to stay over for two days to accomplish this. It is just more effective to "draw the line in the sand" and move on from here. Fortunately, I had saved all the old Audits back to 2003 to piece this together, now convincing the Branch President that the money is not theirs is the next obstacle.

mschlechter wrote:I would gladly dig around for the old records, but the Branch is a 40 minute plane flight each way (no roads, we have a very unique Stake) and I would probably have to stay over for two days to accomplish this. It is just more effective to "draw the line in the sand" and move on from here. Fortunately, I had saved all the old Audits back to 2003 to piece this together, now convincing the Branch President that the money is not theirs is the next obstacle.

Here are some options I can think of.

1) Have the Branch Clerk do the research and figure out the problem.

2) Have the Branch Clerk box up the records and send them to you.

3) If you don't have time to travel there maybe another clerk familiar with finances could go and do the research for you.

mschlechter wrote:now convincing the Branch President that the money is not theirs is the next obstacle.

What does the Branch President plan to do with the money? His options are very limited mostly to youth annual camps or equipment. Being a branch so fare out in the bush I doubt there is enough youth to use the funds in a reasonable amount of time.

I think having the Stake President tell the Branch President to send the money to the stake while your trying to figure out the correct action to take would be a good thing to do.

Gary_Miller wrote:

mschlechter wrote: Here are some options I can think of.

1) Have the Branch Clerk do the research and figure out the problem.

2) Have the Branch Clerk box up the records and send them to you.

3) If you don't have time to travel there maybe another clerk familiar with finances could go and do the research for you.

mschlechter wrote:now convincing the Branch President that the money is not theirs is the next obstacle.

What does the Branch President plan to do with the money? His options are very limited mostly to youth annual camps or equipment. Being a branch so fare out in the bush I doubt there is enough youth to use the funds in a reasonable amount of time.

I think having the Stake President tell the Branch President to send the money to the stake while your trying to figure out the correct action to take would be a good thing to do.

Good thoughts, I do know what needs to be done now. Really, just needed the confirmation that un-transmitted deposits went to Other, to confirm the source.
I do not think he has a plan with the funds, it has just been sitting there for so many years they have taken ownership of it. Just needed my ducks in a row before presenting my case to the Branch Presidency and to the Stake President if needed that funds are not theirs to use.

Option 1 would be great, but if they were capable of doing so we probably would not have this issue to begin with.

Option 2 good idea, may do that.

Option 3 not a matter of time, just practicality.

In reality this is pretty easy to fix now that have put together all the information. Now back to billing Units for the Stake Youth Conference and Young Womens Camp.....

Thanks

mschlechter wrote:Good thoughts, I do know what needs to be done now. Really, just needed the confirmation that un-transmitted deposits went to Other, to confirm the source.
I do not think he has a plan with the funds, it has just been sitting there for so many years they have taken ownership of it.

Although all of the untransmitted deposits may have gone to Other, there may also have been some actual Other funds if the branch was collecting for Scout camp, YW camp, or something similar. So I would consider that possibility before I just took all of it away.

lajackson wrote:Although all of the untransmitted deposits may have gone to Other, there may also have been some actual Other funds if the branch was collecting for Scout camp, YW camp, or something similar. So I would consider that possibility before I just took all of it away.

Good point. And don't forget that those deposits may have also included ward missionary funds, which should also stay in the branch.

aebrown wrote:

lajackson wrote:Although all of the untransmitted deposits may have gone to Other, there may also have been some actual Other funds if the branch was collecting for Scout camp, YW camp, or something similar. So I would consider that possibility before I just took all of it away.

Good point. And don't forget that those deposits may have also included ward missionary funds, which should also stay in the branch.

For these reasons its important to figure out where the funds came from and what they were intended for, before just sending them to CHQ. Once the funds are sent you can't get them back.

Thanks, I have been aware of that possibility and fortunately have the Stake copy of the Financial Audits back ten years still in hand, so I can refer to the Other Account reconciliation on them.

mschlechter wrote:Thanks, I have been aware of that possibility and fortunately have the Stake copy of the Financial Audits back ten years still in hand, so I can refer to the Other Account reconciliation on them.

This will only work if everything is assigned its own sub-category, as it should be. However, if things are as bad as they sound my bet is the majority of the funds are in the Other Parent category, which will require more in-depth digging.

It has been considered, funds will be carefully evaluated. In this case the Other has not shown any any Income except for Interest. I do carefully look at all possibilities and do not have the mind set of sweeping it all, except for what is appropriate.

mschlechter wrote:In this case the Other has not shown any any Income except for Interest.

Given the policies, if there has been no income to the Other account in the past 3+ years that MLS has records for, then it would seem the funds have lost their purpose and should be sent to CHQ. Use as a "slush fund" is specifically prohibited. It's clearly not being collected/held for a specific purpose and so much time has passed I doubt if refunds can be made.

To the extent that Ward Missionary funds can be identified, they could be transferred, but given the time frame, I'd say everything else should all go back regardless of the source. If any was for a youth event, the youth have long since aged out of the program.

The detailed research just makes this "loss" easer for the ward leaders to swallow. Just my 2¢.

I should have clarified, no Income into the root "Other" account, income/expenses have been been recorded in Other subcategories. "IF" the records still exist I will do some detailed breakdown, as I have asked to have all the records/documents (pre 2010) retrieved by the Stake Presidency, who will be visiting the Branch soon.

Your 2¢ is one of the reasons for the detailed research and the original question on this post regarding un-transmitted funds.