Use of "Other" category

I am a newly called finance clerk and I am experiencing difficulty with the other column .I do not understand how to use the system to transfer funds to various catagories such as youth camps ,efy ,Temple trips and other areas . I have endeavoured to do this and I now overdrawn amounts ,and again I do not know how to correct the error . Any help and suggestions would be helpful .Thanks

[Moderator note: This topic was split from 2013 Audit Questions and Answers, since it deals with a specific issue, mostly different from that existing topic.]

My first advice is to carefully read the RKATS article titled The "Other" Category. That should give you a basic understanding of the principles and procedures for this category.

It sounds like you ended up with negative balances after doing some transfers. That might happen because you did the transfer the wrong direction (from a particular subcategory, when you wanted to transfer into that subcategory), or you specified the wrong amount. I'd recommend that after each transfer, you run an Income and Expense report for the "Other" category to make sure that the new balance is what you expected it to be.

Perhaps it would be helpful for you to pick one particular subcategory and describe what is happening with that subcategory as you have tried to fix it. Make sure you don't share any confidential details. Walking through a specific scenario might give you some details that you can then apply to similar situations.

To summarize some other discussions about this, it is important to note that funds in the other category must be used for the purpose they were intended (per the financial audit). The "Other" account at the bank doesn't itself have subcategories, but we are asked to make subcategories in our local MLS so that members can pay for some service, usually scout or girls camp if needed/approved. However, on the "banks" books, this just looks like money in the general "Other" account, the bank doesn't have any subcategories.

To get a negative balance in a subcategory means funds were taken out of the bank "Other" account generally, and by necessity, they were taken from donations that were intended for a different purpose, meaning, your boy scout other subcategory fund might pay for your girl scout camp, as the money had to come from somewhere.

As described, the way to correct this is to pay out of your budget to get the balance back to zero in that other subcategory that was negative. Alternatively, you could have people who benefited from that service pay to that other fund to get it back to zero.

There is a part in the instructions that talks about "not jeopardizing" the charitable status of the church. "Other" donations are not charitable donations, because they are specified for a purpose (the donor can influence how the funds are used) and may directly benefit a person or the donor. In the US, this does not count as a charitable donation, and the church does not have to report it as a charitable donation (as I understand).

However, if the Bishop or anyone else were to use the funds for a purpose that the donor didn't intend, it might become a charitable donation, and might require the church to report it as such. I don't know for sure, but I believe this is why the church instructs us that funds paid to the other account should be returned back to the donor if they aren't used for the intended purpose. It also explains in some respects why a negative balance in an other account is a problem on the church audit, as the only way to get that is to use funds out of the other account, which means they are not used for the intended purpose, and implies the church should report that for tax purposes. Again, this whole last paragraph is somewhat speculative, but it could well be the case.

I have a question about our Other account, specifically relating to our fundraisers for Scout Camp and Girls' Camp.

We have held one fundraiser for each camp this year. We received more money into the Girls' Camp fund than we actually need. We have not received enough money into the Scout Camp fund.

I understand that if money donated to Member-Financed Activities subcategories is not used for its original stated purpose, it should be returned to the donor.

The difficulty in my mind comes from trying to figure out whose money to return in case of an excess. The most recent money to come in?

Would it be ok to go to certain donors of Girls' Camp money, and ask them if they would be ok with changing their donations to Scout Camp, since we have more than enough Girls' Camp money but not enough Scout camp money?

Just trying to do everything right as much as possible...

mwgrover wrote:I understand that if money donated to Member-Financed Activities subcategories is not used for its original stated purpose, it should be returned to the donor.

That would be true for donations made by individuals and families to send their child (participant costs). I'm not so sure there is a provision to return fund-raising money.

In the case of an overage, I'd be inclined to put it to camp equipment (which is allowed use of the funds) or save it for next year's camp. Same purpose, but next year.

I have personal issues about using the girl's money to bail out the scouts. If I had to do it, I'd probably start by looking at re-jiggering the budgetary contributions to the event. But I'd still question the wisdom of doing that. Seems to me like it would leave a wrong impression.

If the donors approach the church about changing the contribution, I'd have no issues with that.

I am in agreement with russellhltn. Fund-raiser funds should not be used for any other purpose other than the purpose in which they were raised. Also, fundraiser funds should not be transferred between accounts (Other:AMFA categories) unless the donors have agreed to recategorize their donation. It is hard to identify fund-raiser donors to ask them if this is what they want. The alternative russellhltn mentioned of expensing against the girls camp equipment is acceptable. His other suggestion of rebalancing Budget allocations between girls camp and scout camp to help "accommodate" the fund-raiser funds raised to support each of those events is something to look at. This of course will only be an option if any Budget funds were allocated at all to girls camp a scout camp. One last option for the funds is to return the excess to the Corporation of the President. That does not address the OPs needs, however. But it is the only other option other than what has been discussed for those fund-raiser funds.

It is my understanding that going to the person and asking them if you can recategorize the contribution is a fine way to handle this (and within the policy). You'd probably want to make a note of that either in the transfer note or possibly on the original donor slip.

esogs wrote:It is my understanding that going to the person and asking them if you can recategorize the contribution is a fine way to handle this (and within the policy). You'd probably want to make a note of that either in the transfer note or possibly on the original donor slip.

From a policy standpoint, that is acceptable.

But from a uh, "political" standpoint, it could be awkward. I'd assume the news of this would get around. I'd suggest letting the bishop do that if that's how he wants to handle it.