Using Budget instead of Other

In our most recent audits we've discovered at least two units in our stake that are, primarily for the sake of keeping things simpler, depositing funds received from things like camp fund raisers into Budget rather than creating an Other account for this. This violates what I've been taught and understood, but certainly avoids the problems associated with having to manage payments for the camp especially when they need to come from both these receipts and budget.

My question is this: we've all been taught that this is not the right way to do this, but does it in fact cause any real problems? If my memory serves, deposits to Budget, just like those to Other do not count as donations from the Church's standpoint and therefore wouldn't show up on the official tax receipts of the "donors". All the funds deposited are likely to be spent so there's no need to carry the funds into a new year.

The only thing I could think of was if on the Church's side there's some impact that I'm not yet aware of.

What do you think?

There might be other issues, but the one that comes to my mind is that it makes it difficult to insure that all funds collected were spent for the purpose intended or refunded. Also, it makes it difficult to assess if the ward is sticking to their budget rather then asking for donations to have bigger and grander events.

ponders wrote:In our most recent audits we've discovered at least two units in our stake that are, primarily for the sake of keeping things simpler, depositing funds received from things like camp fund raisers into Budget rather than creating an Other account for this. This violates what I've been taught and understood, but certainly avoids the problems associated with having to manage payments for the camp especially when they need to come from both these receipts and budget.

My question is this: we've all been taught that this is not the right way to do this, but does it in fact cause any real problems? If my memory serves, deposits to Budget, just like those to Other do not count as donations from the Church's standpoint and therefore wouldn't show up on the official tax receipts of the "donors". All the funds deposited are likely to be spent so there's no need to carry the funds into a new year.

The only thing I could think of was if on the Church's side there's some impact that I'm not yet aware of.

What do you think?

It's a good question. You're certainly right that deposits to Budget are no different from deposits to Other in that neither will be included in the year-end tax statement as charitable donations.

The training course Understanding and Using the "Other" Category says:

In cases where budget funds are not sufficient to pay for annual youth camps or similar activities, leaders may ask participants to contribute by earning their own money. The “Other” category may be used in these exceptional circumstances.

Note that it says "may be used". My initial reaction was that of course the Other category must be used in such situations. But I am unable to find any official document that makes it a requirement. I personally think the Other category should be used to collect payments from youth who are earning part or all of the cost of an annual camp. This allows better tracking of the funds received from specific individuals for that specific purpose. Your "Other:YW Camp" subcategory can then track the payment side of things, without cluttering your Budget:YW subcategory with all the ins and outs of the payments.

However, I don't see a particularly compelling reason for moving fund-raising money through the Other account, unless the fund-raising activity involves multiple organizations (e.g., both the YW and the Scouts work together on a fund-raiser where they divide the proceeds for their respective annual camps).

The one downside I see is that this practice makes the Budget reports more complex. It seems much more straightforward to read a Budget Detail Report for YW that says the Budget is $2000, $500 was spent on YW Camp, $1200 on other things, leaving $1300, rather than saying the Budget is $2000, plus $1000 of income, $1500 was spent on YW Camp, $1200 on other things, leaving $1300. But I suppose some would say that it's more informative to have one report that accurately says what YW Camp really cost.

Unless someone can come up with some policy I am missing, I would say that this is just a matter of accounting preference by the units involved.

Sometimes a fund raiser is performed in the later months of the calendar year for the following year's camp expenses. If these funds are deposited in OTHER, they can be rolled over to the following year. If they are deposited in BUDGET, they cannot.

When dealing with an issue such as this the first place to find guidance is in the Church Handbook of Instructions. A quick scan of Chapter 16, Finances, says that both the stake president and the bishop "...ensures that Church funds are never mixed with personal funds." To keep "personal" funds separate from Church funds is one of the purposes of the Other account. I put the word personal in quotation marks because the definition of personal as it relates to funds in this case has a broader scope than just belonging to a person. Budget funds are the Lord's sacred tithe and fast offerings. Funds from individuals or fund raisers for purposes such as camps or equipment are not tithe or fast offerings and must never be mixed with budget funds.

"[D]epositing funds received from things like camp fund raisers into Budget rather than creating an Other account" as described in the opening post to this thread is mixing personal and Church funds and is therefore in direct violation of Church policy.

jdlessley wrote:When dealing with an issue such as this the first place to find guidance is in the Church Handbook of Instructions. A quick scan of Chapter 16, Finances, says that both the stake president and the bishop "...ensures that Church funds are never mixed with personal funds." To keep "personal" funds separate from Church funds is one of the purposes of the Other account. I put the word personal in quotation marks because the definition of personal as it relates to funds in this case has a broader scope than just belonging to a person. Budget funds are the Lord's sacred tithe and fast offerings. Funds from individuals or fund raisers for purposes such as camps or equipment are not tithe or fast offerings and must never be mixed with budget funds.

"[D]epositing funds received from things like camp fund raisers into Budget rather than creating an Other account" as described in the opening post to this thread is mixing personal and budget funds and is therefore in direct violation of Church policy.

I am certainly a proponent of following the Handbook, and it's definitely helpful to bring actual policy statements into the discussion. But in no way do I see that this scenario involves personal funds. Once a payment is made, whether it is for a fund-raiser, or where a youth pays earned funds for an annual camp, those funds are no longer "personal" -- they then are Church funds. They may be earmarked for a specific purpose, but that does not make them personal funds by any reasonable definition, and certainly not for the definition quoted from the Handbook.

I can find nothing in any official documentation to justify the claim, "To keep 'personal' funds separate from Church funds is one of the purposes of the Other account." There is an entire training lesson on the Other account, and several statements in other documents. None of them say anything like this.

Alan_Brown wrote:Unless someone can come up with some policy I am missing, I would say that this is just a matter of accounting preference by the units involved.

Okay, I just came up with something more specific. In the online training lesson I mentioned in my first post of this thread, it says (on slide 18, to be specific):

All funds collected for special purposes should be tracked in the “Other” category.

So that seems pretty clear, and although I suppose the word "should" is slightly weaker than "must", it's certainly stronger than "may." That's good enough for me.

Alan_Brown wrote:But in no way do I see that this scenario involves personal funds. Once a payment is made, whether it is for a fund-raiser, or where a youth pays earned funds for an annual camp, those funds are no longer "personal" -- they then are Church funds.

I respectfully disagree. Funds provided by a young man or young woman for a camp are their personal funds. They can withdraw them at any time. The Other sub-account has been provided as a means of retaining those funds for individuals to be disbursed on their behalf. The Church does not own those funds. It only collects and retains them as a courtesy and convenience for the individual(s). Fund-raiser funds are identified as personal because they are on behalf of an individual or a group of individuals. The funds must be spent for the purpose they were raised thereby connecting them to an individual, albeit as a percentage of the whole. The only time the fund-raiser funds become property of the Church is when excess funds are remitted to Church headqurters to be applied to the Church's general fund.

Alan_Brown wrote:I can find nothing in any official documentation to justify the claim, "To keep 'personal' funds separate from Church funds is one of the purposes of the Other account."

I will agree there is nothing documented to verify the statement. When I recieved financial auditor training from an area authority he used those words. I will not contend on the issue just because it is not in writing. Common sense must prevail and not Pharisaical dictum.

To ensure personal impressions and undocumented statements do not taint what could be construed to be a quote or paraphrase from Church authority I will revise the statement "To keep "personal" funds separate from Church funds is one of the purposes of the Other account." Instead I should have said "A reasonable purpose for some Other sub-accounts, according to an area authority, is to keep "personal" funds separate from Church funds.

Not sure I totally agree that once funds are put into an "other" account they become property of the church. Case in point. I was taught that funds in an "Other" account were "pass-through" funds. In otherwords, a deposit is made for a specific purpose (i.e scout camp) and if not used they were to be returned to the donor. Another example would be a Special Relief Society project (say canning) and funds are given to purchase canning material. Say one of the sisters is unable to participate, I was under the impression that the funds were supposed to be returned to the individual.

On another note, I believe that if you put funds earmarked for an "other" account like Boy Scouts and it is instead put into a budget account like Young Men, that the funds aren't really in the budget but rather are read by Salt Lake as being a donation to the budget and consequently are taken by Salt Lake. We had a situation like this arise in our stake where one of the wards had extra money in an other account and moved it into a budget account thinking they could then spend it for items like curriculum, etc. Turns out they way overspent their budget and Salt Lake sent a notice to the Stake President. I ended up getting involved trying to figure out what happened and after talking with Salt Lake, talking with the Stake Clerk at that time, and doing a lot of looking at records came to the conclusion that Budget and Other are two separate accounts not to be mixed. If one were to look at it this way, perhaps it would make sense - Budget monies are "owned" by the Church whereas Other monies are owned by the ward or unit.

And just to further clarify (at least from what I have experienced as a Ward Clerk and now the Stake Clerk), if an individual fills out their donation slip and puts money into a budget item it goes to Salt Lake, it does not go to the ward budget. One of our wards found that out the hard way. That is why following the Handbook and looking at the online lessons is well worthwhile.

Jim

I think you are dealing with three distinct points here, so I'll address them one by one.

Pilotfly wrote:Not sure I totally agree that once funds are put into an "other" account they become property of the church. Case in point. I was taught that funds in an "Other" account were "pass-through" funds. In otherwords, a deposit is made for a specific purpose (i.e scout camp) and if not used they were to be returned to the donor. Another example would be a Special Relief Society project (say canning) and funds are given to purchase canning material. Say one of the sisters is unable to participate, I was under the impression that the funds were supposed to be returned to the individual.

You're entirely correct about pass-through funds. That is one of the primary uses of the Other account. You're also correct that if there are unused funds, the funds are to be returned to the individual. Those arguments don't convince me that the funds do not belong to the Church, however. The funds are in an account owned by the Church, and thus they are the property of the Church. You might argue that the person who gave those funds might have some claim on the funds, but that is not ownership, and it is a limited claim, with all sorts of potential limitations (for example, a Scout pays $50 to go to Scout camp; based on that commitment, the Scoutmaster puts down a deposit that commits the troop to pay the full camp fee on behalf of that scout -- he has no right to claim the money back, even if the full amount hasn't been spent yet).

And I can see no argument at all that funds from a fund-raiser are anyone's "personal" funds. They unquestionably belong to the Church.

Pilotfly wrote:On another note, I believe that if you put funds earmarked for an "other" account like Boy Scouts and it is instead put into a budget account like Young Men, that the funds aren't really in the budget but rather are read by Salt Lake as being a donation to the budget and consequently are taken by Salt Lake. We had a situation like this arise in our stake where one of the wards had extra money in an other account and moved it into a budget account thinking they could then spend it for items like curriculum, etc. Turns out they way overspent their budget and Salt Lake sent a notice to the Stake President. I ended up getting involved trying to figure out what happened and after talking with Salt Lake, talking with the Stake Clerk at that time, and doing a lot of looking at records came to the conclusion that Budget and Other are two separate accounts not to be mixed. If one were to look at it this way, perhaps it would make sense - Budget monies are "owned" by the Church whereas Other monies are owned by the ward or unit.

Although the practice of moving "extra money" from an Other account into Budget has all sorts of policy problems I won't get into, the fact is that a deposit to the Budget account will indeed increase the available Budget Allowance. I am a stake financial clerk, and I see this happen all frequently, especially as money gets moved between units.

Deposits to the Budget account are indeed transferred out of the ward account, but only in the same way that all checks spent from the Budget account are immediately reimbursed to the ward account. It's a zero-based account as far as the bank balance is concerned, but not as far as the Budget Allowance is concerned -- all deposits increase the available Budget Allowance; all expenses decrease the available Budget Allowance.

I can't explain why the ward you dealt with seemed to not experience an increase in Budget Allowance when they deposited funds into Budget, for that is completely contrary to my repeated, consistent experience in this regard.

Pilotfly wrote:And just to further clarify (at least from what I have experienced as a Ward Clerk and now the Stake Clerk), if an individual fills out their donation slip and puts money into a budget item it goes to Salt Lake, it does not go to the ward budget. One of our wards found that out the hard way. That is why following the Handbook and looking at the online lessons is well worthwhile.

The Church makes it very clear that it cannot receive local funds through cash donations. This includes not only the Budget category, but Ward Missionary, Fast Offering, and Other as well. So there's not really any distinction between Other and Budget in this particular regard.

I'm also noticing what seems to be two different interpretations of the phrase "Church owning the money".

It seems like jdlessley and Pilotfly are defining the word "Church" in this phrase as solely meaning Church Headquarters, whereas it seems like Alan_Brown means both Church HQ and the local units collectively. Pilotfly furthered this theory of mine when he said this...

Budget monies are "owned" by the Church whereas Other monies are owned by the ward or unit.

...which seemed to echo jdlessely's definition of "personal".

Well, I probably didn't make my self too clear and trying to clarify futher would probably only confuse those reading this thread and more than likely myself!

But, I am pretty sure the Church Financial Section in Salt Lake looks at the Budget account and the Other account as being two separate entities that are not supposed to be interchangable or intermixed (if that makes any sense). Case in point - you cannot write a check in MLS with funds from a Budget category and an Other category. MLS physicially won't let you do it. Likewise, you cannot use MLS to transfer funds from an Other category to a Budget category (at least in my experience, however I may be wrong about this). In any case, it may look like you transfered funds from other to budget but it sure won't show up in the finance report sent by Salt Lake. However, if you were to physically write a check from other and try to deposit into your wards budget you aren't increasing your budget if I understand the process correctly. The inverse however is true - you can write a check from the budget and deposit into your other account which will show up on the financial report as an expense and transfer (within budget) and show as an increase in the "other" account.

What the ward in question did was transfer funds (at least thinking they were transfering funds from other to budget and then proceeded to spend the funds on items they wanted such as curriculum items, tablecloths, end of year type stuff, etc etc. When they exceeded their budget Salt Lake sent a letter to the Stake President notifying them of the overspending. (As a side note here, I believe the actual budget funds are controlled and assigned to the stake which then parcels the funds to each ward for their individual budgets). So in the case above it was actually the ward that overspent and was now causing funds from the stake to be transfered to cover the deficits.

When I mention who "owns" what account I guess a better description would be that with budget spending you will see on the monthly report expenses and transfers whereas with other spending, you do not necessarily see those expenses and transfers when you do the reconcilliation which to me means that the Church (being Salt Lake) "owns" or controls the budget process and spending while the Unit "owns" or controls the other process. I guess I look at it as the budget funds are in one bank while the other funds are in a different bank.

I told you this was confusing and now I'm probably way out in left field somewhere smelling the daisies!

Pilotfly wrote:Well, I probably didn't make my self too clear and trying to clarify futher would probably only confuse those reading this thread and more than likely myself!

I do agree with you on this . But I'll try to clarify your clarifications.

Pilotfly wrote:But, I am pretty sure the Church Financial Section in Salt Lake looks at the Budget account and the Other account as being two separate entities that are not supposed to be interchangable or intermixed (if that makes any sense). Case in point - you cannot write a check in MLS with funds from a Budget category and an Other category. MLS physicially won't let you do it. Likewise, you cannot use MLS to transfer funds from an Other category to a Budget category (at least in my experience, however I may be wrong about this). In any case, it may look like you transfered funds from other to budget but it sure won't show up in the finance report sent by Salt Lake. However, if you were to physically write a check from other and try to deposit into your wards budget you aren't increasing your budget if I understand the process correctly. The inverse however is true - you can write a check from the budget and deposit into your other account which will show up on the financial report as an expense and transfer (within budget) and show as an increase in the "other" account.

It's certainly true that Budget and Other are separate entities. So are Fast Offerings, Tithing, and Ward Missionary. But there are specific ways in which Budget and Other are supposed to interact, even though they are of course not interchangeable, and are not to be intermixed. You mentioned one interaction -- writing a check from Budget to deposit into Other. I don't recall anyone claiming that the two accounts were interchangeable.

If you transfer funds from Other to Budget or vice versa, it most definitely will show up on the Church Unit Financial Statement.

If you physically write a check from Other and deposit it into your ward's budget you definitely are increasing your budget allowance. The one clarification I would make here is that since the budget allowance is tracked at the stake level, my statement is only guaranteed to be true at the stake level. It's conceivable that a stake could have a policy that it captures the credit for any deposits made at the ward level and uses them at the stake level. That is the only scenario I can imagine where a deposit to Budget would not increase the ward's budget allowance.

Pilotfly wrote:What the ward in question did was transfer funds (at least thinking they were transfering funds from other to budget and then proceeded to spend the funds on items they wanted such as curriculum items, tablecloths, end of year type stuff, etc etc. When they exceeded their budget Salt Lake sent a letter to the Stake President notifying them of the overspending. (As a side note here, I believe the actual budget funds are controlled and assigned to the stake which then parcels the funds to each ward for their individual budgets). So in the case above it was actually the ward that overspent and was now causing funds from the stake to be transfered to cover the deficits.

There is no way the Church has any idea if a ward has overspent its budget, since the Church has no knowledge of a ward's budget allowance. As you mentioned, the stake controls this. So the scenario you mentioned only makes sense if the stake (by this I mean all the wards together plus the stake's general account) overspent its budget allowance. Only then could CHQ send a letter to the stake president.

Pilotfly wrote:When I mention who "owns" what account I guess a better description would be that with budget spending you will see on the monthly report expenses and transfers whereas with other spending, you do not necessarily see those expenses and transfers when you do the reconcilliation which to me means that the Church (being Salt Lake) "owns" or controls the budget process and spending while the Unit "owns" or controls the other process. I guess I look at it as the budget funds are in one bank while the other funds are in a different bank.

What you said about the reconciliation is mostly backwards; if anything, what you said of Budget is closer to true for Other. All expenses, deposits, and transfers from all categories are included in the Church Unit Financial Statement, and thus are involved in the reconciliation. But it is only the Other and Ward Missionary categories that actually affect the reconciliation in most cases -- you can neglect to check off a cleared Budget check, and you will still reconcile, but if you forget to check off a cleared Other check, you will be out of balance.

All the categories are in the same bank, but the Church does do automatic transfers from every category except Other and Ward Missionary to bring the bank balance to zero. The Budget category has separate accounting at the stake level for tracking the Budget Allowance, which is different from any bank balance, but is similar to a category balance in that it is affected by all the deposits, expenses, and transfers in the Budget category that appear on the CUFS.

Alan_Brown wrote:I can't explain why the ward you dealt with seemed to not experience an increase in Budget Allowance when they deposited funds into Budget, for that is completely contrary to my repeated, consistent experience in this regard.

Any bets that they spent half of the excess three times? :rolleyes:

(Hey, we had all that money, where did it go?)

Obviously Bro Brown and I have different ideas of how the system works so I will bow out of this conversation. Hopefully the individual who started this thread will get his question answered.

Totzeins!

Pilotfly wrote:Obviously Bro Brown and I have different ideas of how the system works so I will bow out of this conversation. Hopefully the individual who started this thread will get his question answered.

Totzeins!

Which brings up a good point. We may want to consider making this discussion its own thread.

FWIW, having been both a ward and stake finance clerk my understanding is very similar to Bro. Brown's which is part of what led to my asking the question.

You all contributed some great thoughts and I very much appreciate the discussion. I think it was valuable to challenge each other's understanding and assumptions. That and the ensuing discussion give me a clearer understanding of both the big picture and the subtleties involved.

Thanks for your help.

BTW, I have more questions like the one started this thread that I'll get to as some point, this was just the most pressing.

I do not think this issue should be closed. Allowing what ponders posted in the open to this thread to be dismissed as acceptable in any form can have serious consequences for the Church. I would like to take another tack in addressing the issue.

Please note that when a contribution is made, a Tithing and Other Offerings slip must be filled out. Also note the categories on that slip for which donations can be made (I know, those listed are not all inclusive.). When an individual follows Church procedures and contributes funds for the Boy Scout summer camp they must write in the purpose for the contribution in the Other block. In this case they would write in "Scout Camp", or something like that, to signify the purpose of the funds. These funds must then be deposited to the Other account. There is no provision for a budget account deposit. The same procedure applies to funds deposited from a fund-raiser.

Now this is what ponders wrote in his opening post:

ponders wrote:In our most recent audits we've discovered at least two units in our stake that are, primarily for the sake of keeping things simpler, depositing funds received from things like camp fund raisers into Budget rather than creating an Other account for this.

Doing this violates Church policies and procedures when the funds are deposited in a budget account.

Let me explain further. Budget funds come from tithes. Therefore if the individual wanted the funds to go toward the budget they would enter the contribution amount in the Tithing block of the slip. The tithing contribution goes to Church headquarters and they decide how those funds are used. The Church allocates funds for Stake budgets and the stake for ward budgets. And finally the ward allocates to auxiliaries. This is a top down budget allocation and not the other way around.

A review of an audit form may also be helpful. If you look at item 21 on the audit form it says:

For weekly donation batches, the information on the following items matches and is fully consistent: Tithing and Other Offerings forms, related depository documents, related bank statements, and related batch reports.

A Tithing and Other Offerings form would not agree with the related batch report because the contributor would have entered an amount in the 'Other' block with an annotation of 'Scout Camp' and the batch report would show the deposit in a budget category.

jdlessley wrote:I do not think this issue should be closed. Allowing what ponders posted in the open to this thread to be dismissed as acceptable in any form can have serious consequences for the Church.

If you read the entire thread, you will see that after further research, I agreed that the funds should be deposited in Other. So I don't think this thread leaves it as acceptable to deposit such funds in the Budget category. I don't agree with your reasoning that the prohibition on mixing personal and Church funds is relevant to the question, but since we both came to the same conclusion, I see no harm in agreeing to disagree on the particular method we used to arrive at that conclusion.

jdlessley wrote: I would like to take another tack in addressing the issue.

I agree with almost everything you said, and I think your general reasoning is sound. Thank you for taking the time to clarify this. In particular, I think the quote from the audit instructions was a good point.

jdlessley wrote:Please note that when a contribution is made, a Tithing and Other Offerings slip must be filled out. Also note the categories on that slip for which donations can be made (I know, those listed are not all inclusive.).
...
There is no provision for a budget account deposit.

I would take slight exception to this last statement. It's fine in the context of the scenario we are discussing, but is not true in every case.

There are indeed two situations where we are specifically instructed to make a deposit to the Budget category. The first involves correcting problems in the usage of the Other account and is documented in the training lesson [url=C:\Program Files\LDS Church\Training\en\Other_Category\index.htm]Understanding and Using the "Other" Category:[/url]

Sometimes an activity is mistakenly paid for using budget funds even though fundswere collected and designated for the activity in the “Other” category. To correctthis error:

• Print a check payable to the ward from the appropriate “Other” subcategory.
• Fill out a Tithing and Other Offerings slip in the name of the ward, cross out“Other” on the slip, and write in the name of the budget subcategory and theamount of the check.
• Record the deposit in MLS to the proper budget subcategory.
• File the white copy of the donation slip with one check stub and the expenseinformation, and file the yellow copy and the other check stub with thedonation information.

• Deposit the check at the bank using normal procedures.

I would note that there are other ways of correcting such problems, but nonetheless, a provision for depositing funds in a Budget subcategory is documented.

The second situation deals with unused funds after an advance has been issued, and is documented in the training lesson Handling Church Expenses:

Sometimes a member will request an advance payment for an expense rather than using his or her own funds and then being reimbursed.
[align=left]In these cases:
• Find out the exact amount of the expense (or carefully approximate the amount).
• If a check is used, make it out to the vendor or service provider.
• After spending the funds, the member should attach the receipts to the expense authorization form and give the documentation to a bishopric member or clerk. [/align]
• If there are leftover funds, the member should place the money in a donation envelope, write
[align=left][/color][/color]Budget Return in the “Other” category on the slip, and give the envelope to a member of the bishopric.[/align]

jdlessley wrote:Please note that when a contribution is made, a Tithing and Other Offerings slip must be filled out. Also note the categories on that slip for which donations can be made (I know, those listed are not all inclusive.).
...
There is no provision for a budget account deposit.

Alan_Brown wrote:I would take slight exception to this last statement. It's fine in the context of the scenario we are discussing, but is not true in every case.

There are indeed two situations where we are specifically instructed to make a deposit to the Budget category. The first involves correcting problems in the usage of the Other account and is documented in the training lesson [url=C:\Program Files\LDS Church\Training\en\Other_Category\index.htm]Understanding and Using the "Other" Category:[/url]...

I would note that there are other ways of correcting such problems, but nonetheless, a provision for depositing funds in a Budget subcategory is documented.

The second situation deals with unused funds after an advance has been issued, and is documented in the training lesson Handling Church Expenses:

Since I was talking about contributions by an individual or from a fund-raiser and not correcting problems or making account adjustments I will stand by my statement.

When our leader announced that all our youth activities (including camp) would be funded from the budget allowance (with the exception of group fund-raising) I never imagined it was a discussion like this we would automatically avoid

dkjorgi wrote:When our leader announced that all our youth activities (including camp) would be funded from the budget allowance (with the exception of group fund-raising) I never imagined it was a discussion like this we would automatically avoid

I agree. It has been nearly 19 years now since the announcement was originally read in sacrament meeting. We got all of this sorted out in the first year of the new program (1990).

Of course, since it has been that long, we have a new generation just beginning to learn the same principles.

Just another piece of information about the relationship between "Budget" and "Other." The online help in MLS says:

The "Other" category of your checking account is used for pass-through funds, those generally raised or collected to pay for goods or services. Examples are Church magazines or girls' camp. These funds are deposited and then disbursed by check. Most pass through quickly, although some may accumulate if they are earmarked for a future activity. Funds collected and not used should be returned to the donors. If funds in the "Other" category go to a negative balance, use budget funds to bring the balance back to zero.

dkjorgi wrote:When our leader announced that all our youth activities (including camp) would be funded from the budget allowance (with the exception of group fund-raising) I never imagined it was a discussion like this we would automatically avoid

lajackson wrote:I agree. It has been nearly 19 years now since the announcement was originally read in sacrament meeting. We got all of this sorted out in the first year of the new program (1990).

Of course, since it has been that long, we have a new generation just beginning to learn the same principles.

It may be a surprise to some that not all ward budgets are sufficient to support all youth activities, including camp. In our stake there are wards (nearly all) in which their entire annual budget for young men is less than the cost of the cheapest camp available for all the young men who desire to go to camp. The same is true for young women. Therefore those units must resort to the process described in the CHI and either have the individuals contribute the funds themselves or have fund-raisers - in that order. Since a significant number of young men/young women and their families cannot provide the funds, fund-raisers are necessarily the result. Therefore they must deal with this issue.

dkjorgi, your post is a bit confusing to me. From it I presume your unit funds all youth activities, including camp, is that correct? So how is it that you automatically avoid a discussion like this if you have group fund-raisers? Fund-raiser funds must be deposited into an Other account, correct? What you intended to say and what came accross to me do not make sense. Can you clarify?

Alan_Brown wrote:If you read the entire thread, you will see that after further research, I agreed that the funds should be deposited in Other. So I don't think this thread leaves it as acceptable to deposit such funds in the Budget category. I don't agree with your reasoning that the prohibition on mixing personal and Church funds is relevant to the question, but since we both came to the same conclusion, I see no harm in agreeing to disagree on the particular method we used to arrive at that conclusion.

I did consider my question largely answered early in the conversation based on the online training. However, I must admit to being a little disappointed that the answer was "because the training says so". I'd ideally like to understand why the training says so because it gives me better insight into the system and its guiding principles.

One theory was discussed, that of keeping "personal" and Church funds separate from each other, but I'm not convinced that's the real reason, especially given (among other things, including some that have been discussed) how amorphous the Other account is (with both donation & non-donation sub-categories).

In my mind it is more convenient to track YW Camp fully in a Budget sub-category because

1. Using a single report I can tell the Bishop exactly how much money has been spent & how much is left.
2. I can pay for all expenses out of a single account.
3. I can avoid writing a check to move money between Budget/Other if I overdraw the Other account

It's just a lot cleaner and I therefore fully understand why the units in question have chosen to do this. To get around one of the issues raised earlier I could even ask members to cross out Other and write Budget:YW Camp.

My point being: The reason not to do this needs to be fairly compelling. It has to overcome all the conveniences I've mentioned above, otherwise people are going tend to do this independent of what the policy is.

BTW, just so it's clear where I'm coming from: I've been a ward finance clerk, and a stake finance clerk, but I'm currently the vice-chairman of the audit committee and what I'm after is something that's compelling enough that people will _want_ to do it the right way despite the fact that it's harder to do so (IMO).

Finally, it may be possible that the inconveniences of the right way could be addressed by making changes to MLS such that doing it the right way isn't so painful. Does this forum have any influence on the MLS development team?

ponders wrote:Does this forum have any influence on the MLS development team?

It most certainly does.

Pilotfly wrote:And just to further clarify (at least from what I have experienced as a Ward Clerk and now the Stake Clerk), if an individual fills out their donation slip and puts money into a budget item it goes to Salt Lake, it does not go to the ward budget. One of our wards found that out the hard way. That is why following the Handbook and looking at the online lessons is well worthwhile.

Alan_Brown's reply:

Alan_Brown wrote: If you physically write a check from Other and deposit it into your ward's budget you definitely are increasing your budget allowance.

I wanted to point out a clarification to Pilotfly and Alan_Brown's comments (as I currently understand it).
Credits to the budget category, whether from a deposit, voiding a check, or changing categories (ie correcting categories for a fast offering check accidentally cut from budget), are credited against the budget expenses. You shouldn't increase the budget allocation by the credited amount.

For example, say our activities budget is $1000 and our total expenses are $450. We have $550 remaining for the year. Then say we deposit $200 into it. the activities budget is still $1000, but now the total expenses is $250, meaning we now have $750 remaining for the year. The adjustment is automatically made by MLS to the expenses when the deposit/correction/whatever is created. Not knowing that, a clerk may try to compensate for the credit by increasing the budget. So if I also increase my budget by $200 so it is now $1200, the total expenses are still $250, but I've artificially increased my budget an extra $200 (2X the credit), meaning according to MLS I now have $950 remaining for the year. This may be how your wards managed to blow the stake's budget...

I'd also point out that at the ward level, some of these credits show up in the miscellaneous section of the CUFS and need to be manually entered in MLS. If they are not, then increasing the budget gives the appearance of doing the same thing. However, on the stake financial summary the credits and expenses are combined and the stake sees the net expenses. From their viewpoint, increasing the budget gives you double the money back.

What threw me this year was when we had two wards with a net credit instead of expense. One was from changing check categories, the other was because of a massive return of items to the distribution center.

Main point - deposits to budget don't "increase" your budget per se (the total budget stays the same), but they do offset expenses, allowing you to spend more than you were originally allotted.

Now for some questions of my own:

Alan_Brown wrote:If you transfer funds from Other to Budget or vice versa, it most definitely will show up on the Church Unit Financial Statement.

If you physically write a check from Other and deposit it into your ward's budget you definitely are increasing your budget allowance.

I'm curious how you transfer from Budget to Other. Do you use "Enter Transfer"? I meant to check last night but didn't have time, but I seem to remember than if I select a budget item in one of the fields of "Enter Transfer", I can only select a budget field in the second field. Same for other - if one field is "Other", then the second must be "Other" as well.

I was also under the impression we had to cut checks to move money between budget and other. I seem to remember once being able to finagle MLS into allowing me to transfer between the two, but it was complicated, and now I'm curious if I just tricked MLS and the money never actually moved. Any thoughts? I'll look into this one on my end to see what happened with the money.

This has been a great thread. I've had a lot of questions on this subject and I've enjoyed reading the posts. Thanks everyone.

ponders wrote:I'd ideally like to understand why the training says so because it gives me better insight into the system and its guiding principles.


In my mind it is more convenient to track YW Camp fully in a Budget sub-category because

1. Using a single report I can tell the Bishop exactly how much money has been spent & how much is left.
2. I can pay for all expenses out of a single account.
3. I can avoid writing a check to move money between Budget/Other if I overdraw the Other account

I can see the points you are making about conveniences. Unfortunately the Church does not explain all the intricacies and details of why they have set up the financial workings to the general membership - and probably for a variety of reasons. I trust that the accountants and lawyers the Church employs have far greater reasons and understanding that would be quite interesting to hear. Unless a Church employee who works in the Church financial department responds in this forum we are not going to get the official reasons but rather conjecture (and most of that based on experience) from forum subscribers.

ponders wrote:The reason not to do this needs to be fairly compelling. It has to overcome all the conveniences I've mentioned above, otherwise people are going tend to do this independent of what the policy is.

The reason for not doing this, to me, is because we sustain the leaders of the Church and they have provided us with the policies and procedures to accomplish this part of the work. Many times we must operate on faith without knowing the details of why. Of course we can always ask why and hope to get a response.

ponders wrote:Finally, it may be possible that the inconveniences of the right way could be addressed by making changes to MLS such that doing it the right way isn't so painful.

I would expect that the MLS development team is in close contact with the Church financial experts to ensure that MLS conforms to the practices necessary to ensure proper handling of finances to meet the needs of the Church programs and the laws of the nations in which it has financial transactions. But then again we can only voice our concerns and hope a Church employee in a position to comment can shed some light or initiate a change if appropriate.

crislapi wrote:I wanted to point out a clarification to Pilotfly and Alan_Brown's comments (as I currently understand it).
Credits to the budget category, whether from a deposit, voiding a check, or changing categories (ie correcting categories for a fast offering check accidentally cut from budget), are credited against the budget expenses. You shouldn't increase the budget allocation by the credited amount.

Thank you for that clarification. It would have been better if I had worded my statement as "If you physically write a check from Other and deposit it into your ward's budget you definitely are increasing your available budget allowance." As you ably described, the budget allowance itself does not change.

crislapi wrote:I'm curious how you transfer from Budget to Other. Do you use "Enter Transfer"? I meant to check last night but didn't have time, but I seem to remember than if I select a budget item in one of the fields of "Enter Transfer", I can only select a budget field in the second field. Same for other - if one field is "Other", then the second must be "Other" as well.

I was also under the impression we had to cut checks to move money between budget and other. I seem to remember once being able to finagle MLS into allowing me to transfer between the two, but it was complicated, and now I'm curious if I just tricked MLS and the money never actually moved. Any thoughts? I'll look into this one on my end to see what happened with the money.

You're right. When I talked about "transferring from Budget to Other" I was responding to the last part of this statement:

Pilotfly wrote:... you cannot use MLS to transfer funds from an Other category to a Budget category (at least in my experience, however I may be wrong about this). In any case, it may look like you transfered funds from other to budget but it sure won't show up in the finance report sent by Salt Lake.

I don't know how to do a direct transfer from Budget to Other (or vice versa), so I probably shouldn't have even bothered to respond to a hypothetical that even the author said couldn't happen. You are right that if you initiate a transfer in MLS from Budget, then your only options for the "To" side of the transfer are Budget categories. You cannot transfer across major categories. What I was inartfully referring to was the other ways to transfer funds across major categories -- writing a check to the ward from one category and depositing it in another, or changing the category of a check or deposit. These aren't "transfers" in the MLS sense, but they do have the effect of transferring funds from one major account to another.

I seem to recall someone claiming they had done a transfer across categories, but I can't imagine how you would do that. MLS seems quite firm in requiring both sides of a transfer to be in the same. As you enter the "To" side of the transfer, your only choices are in the same major category as the "From" side; if you enter a "To" category and then go back and change the "From" to be in a different major category, the "To" category is erased.

ponders wrote:I did consider my question largely answered early in the conversation.....
BTW, just so it's clear where I'm coming from: I've been a ward finance clerk, and a stake finance clerk, but I'm currently the vice-chairman of the audit committee and what I'm after is something that's compelling enough that people will _want_ to do it the right way despite the fact that it's harder to do so (IMO).

ponders wrote: Finally, it may be possible that the inconveniences of the right way could be addressed by making changes to MLS such that doing it the right way isn't so painful. Does this forum have any influence on the MLS development team?

I totally agree with you here. As a previous stake auditor, Branch President and Clerk I recognise all too well what you have described and it would be great if MLS was changed to make it easier to follow the guidelines. What it might have to take is for you to write it all down and describe then problem along with potential solutions (examples of reports etc) and then no doubt (I hope) someone in the MLS development team will catch the same vision as you do.

I think we all agree indiv camp, fundraising for camp etc all goes into "Others" but the discussion about "personal funds", violations, own statements and interpretations did not help to identify the solution to Ponders original issue.

I thinking this over, I've come up with a few things that might help.

I think one big issue I'd have with running everything through budget is that it affects the ward's bottom line budget numbers until everything is resolved. With all the "noise" caused by camp contributions and expenses, the Bishop will have little idea of where the ward budget on a whole stands by looking at the bottom line. (Nor would the stake.)

Now, I've got a hypothetical situation for you all. At first this may appear as a tangent, but I'll explain.

Suppose a ward budgets $2000 for camp. However camp costs $3000. So the 20 parents all pay $50 each. But when the camp is over, the actual cost is $250 less then expected. On the other hand, the ward is going over budget elsewhere. It's very tempting to move this $250 excess into the budget. After all 20 checks of $12.50 is such a pain. But what is the right thing to do?

Now what does that have to do with this thread? Well, how is an auditor going to know the right thing was done? If it's all run though budget, I think it would be quite easy to change the camp's budget allocation to $1750 and the excess is "absorbed" without any transfer taking place.

As for making things easier, what about writing a budget check out to "other", run all the expenses from the other account and then if anything should go back into budget, write a check back to budget. Now all the camp expenses are on one report and it's very transparent as to what has taken place.

While we're still looking for incentives for ward to use "other" properly, let's not discount the use of the age old "because the stake said so".

jdlessley wrote:Unless a Church employee who works in the Church financial department responds in this forum we are not going to get the official reasons but rather conjecture (and most of that based on experience) from forum subscribers.

I would expect that the MLS development team is in close contact with the Church financial experts to ensure that MLS conforms to the practices necessary to ensure proper handling of finances to meet the needs of the Church programs and the laws of the nations in which it has financial transactions. But then again we can only voice our concerns and hope a Church employee in a position to comment can shed some light or initiate a change if appropriate.

A question I was trying to get at earlier is whether Church finance department and/or MLS development personnel actually frequent these forums or do I need to gather up what we've discussed here and try to "get an audience" of some kind (a support phone call at least)?

ponders wrote:A question I was trying to get at earlier is whether Church finance department and/or MLS development personnel actually frequent these forums or do I need to gather up what we've discussed here and try to "get an audience" of some kind (a support phone call at least)?

Well I (very briefly) answered you question a few posts ago...

mkmurray wrote:

ponders wrote:Does this forum have any influence on the MLS development team?

It most certainly does.

...but I will expand more on what I mean.

There are most definitely Church Employees that are viewing these threads, and the frequency of their viewings and participation is growing each week. Many Church Employees have an LDS Church Badge by thier username on all of their posts (see this thread: http://tech.lds.org/forum/showthread.php?t=796). Some don't have the badge because of personal preference or just not getting around to it, but most do.

Also, I personally take note of threads that are in desparate need of Church Employee response, comment, or even just acknowledgment, and try to pass it on (I won't tell you how, because I don't want everyone doing it all at the same time, but I bet many of you can guess ; it doesn't involve PMing Church Employees, that tends to be less effective).

So I hope that answers your question. A support call wouldn't hurt though.

RussellHltn wrote:Suppose a ward budgets $2000 for camp. However camp costs $3000. So the 20 parents all pay $50 each.

I know this was hypothetical, and I don't want to fork the thread, but of course parents never pay for the annual camp -- there are three and only three options for payment, in order:

1. Budget allowance;
2. If #1 is insufficient, participants earn the money;
3. If #2 is insufficient, approved fund-raisers

RussellHltn wrote:Now what does that have to do with this thread? Well, how is an auditor going to know the right thing was done? If it's all run though budget, I think it would be quite easy to change the camp's budget allocation to $1750 and the excess is "absorbed" without any transfer taking place.

As for making things easier, what about writing a budget check out to "other", run all the expenses from the other account and then if anything should go back into budget, write a check back to budget. Now all the camp expenses are on one report and it's very transparent as to what has taken place.

These are very good points. Perhaps not totally compelling, but your advice helps avoid a couple of potential messy situations.

RussellHltn wrote:Now, I've got a hypothetical situation for you all. At first this may appear as a tangent, but I'll explain.

Suppose a ward budgets $2000 for camp. However camp costs $3000. So the 20 parents all pay $50 each. But when the camp is over, the actual cost is $250 less then expected. On the other hand, the ward is going over budget elsewhere. It's very tempting to move this $250 excess into the budget. After all 20 checks of $12.50 is such a pain. But what is the right thing to do?

I've got another hypothetical...

Suppose a ward budgets $2000 for camp, however, camp costs $3000. The boys collectively earned $1000 by running a Christmas gift wrapping booth last December at the local mall. Their hard earned funds were deposited into last year's budget... Oops.

crislapi wrote:I seem to remember once being able to finagle MLS into allowing me to transfer between the two, but it was complicated, and now I'm curious if I just tricked MLS and the money never actually moved. Any thoughts? I'll look into this one on my end to see what happened with the money.

In case anyone was waiting for a reply on this, I checked and double checked. I couldn't fine anything I'd done that moved money from other to budget. Stick to cutting checks - it's much easier!

I said I was out of this thread but Crislapi's statement above reminded me what the unit I was discussing in my previous posts did. The unit in question did not "transfer" funds from Other to Budget but indeed did write a check from other and deposited it into budget. They then proceeded to spend that money but made a total mess out of it which drove the auditor bippy when he tried to do the end of year audit. That is when I got involved and spent the next couple of weeks trying to figure out what all happened and how to go about rectifying it. Wasn't a whole lot of fun.

FWIW

I got a message from SLC regarding this and they said that the budget dollars come back to the ward, but it was against church policy to make deposits to the budget accounts. So, it would be better to follow church policy.

gholt wrote:I got a message from SLC regarding this and they said that the budget dollars come back to the ward, but it was against church policy to make deposits to the budget accounts. So, it would be better to follow church policy.

Although I understand the basic policy you are trying to state, you are oversimplifying a bit. It is definitely within policy to make certain deposits to budget accounts:

• Return of advanced funds (see slide 23 of lesson Handling Church Expenses)
• Correcting errors (see slide 32 of lesson Understanding and Using the "Other" Category)
• Transferring funds between units (one ward reimburses another ward for its share of a multi-ward activity, or shared agent ward expenses).

But you're right that it is against policy to make donations to the Budget category.

Bretheren,

May I please remind you that when a member makes a deposit or payment to the church for an activity (i.e. scoutcamp) the member does not retain any ownership of the funds. The payment is given freely and may be used for the intended purpose (i.e. scoutcamp). If the unit does not use the contribution than it can be refunded back to the member. If the scout does not go on the activity the payment to the church can be refunded to the person since it wasn't a donation.

On page 156 of the handbook it states "When tithes and other offerings are given to the Church, they belong to the Lord, to whom they are consecrated. These offerings include all contributions to the ward and general missionary funds. The essence of all such contributions is that they are free-will offerings, made without reservation of purpose, retention of control, ownership in any form, or expectation of any benefit by the donor other than the Lord's blessings."

clund,

I think you are quite mistaken. Payments made to things such as Scout camp are neither tithes or offerings (charitable contributions). They are payments for tangible benefits. Your quotation of the information from the CHI on page 156 does not apply to tangible benefits since they are not charitable contributions.

More information on how to treat payments for tangible benefits can be found in the on-line lesson Understanding and Using the Other Category.

(Sorry if this is duplicate information, but I can't access the training link in the other post because the current computer I'm on won't display that page, and neither will my iPhone. Here is an alternative link that doesn't require Adobe Flash, but does require a PDF reader. http://www.lds.org/pa/e-learn/mp/other2 ... _Print.pdf)

The whole purpose of the "other" account is for convenience. Specifically, so that one check can be written for scout camp (YW camp, etc.) instead of sending a batch of personal checks. These are called "pass-through" funds because they just happen to pass through the Church during their handling, but they are not considered tithes or offerings, nor are they treated as such.

The CHI is mute (as far as I can determine) regarding how to use the "Other" category, but MLS is rather clear. The help file in MLS states the following:

MLS Help
Financial Policies
Donation Categories
Other - The Other category is used for pass-through funds for specific services and commodities related to Church membership, such as money for a youth camp or for the purchase of Church magazines. Funds contributed to the Other category are not considered charitable contributions and will not appear on the member's annual tax-valid statement.

MLS Help
Financial Policies
Using the "Other" Category
The "Other" category of your checking account is used for pass-through funds, those generally raised or collected to pay for goods or services. Examples are Church magazines or girls' camp. These funds are deposited and then disbursed by check. Most pass through quickly, although some may accumulate if they are earmarked for a future activity. Funds collected and not used should be returned to the donors. If funds in the "Other" category go to a negative balance, use budget funds to bring the balance back to zero.

smithgw wrote:Just another piece of information about the relationship between "Budget" and "Other." The online help in MLS says:

What if the wall between Budget and Other was dropped? What is this! Based on my understanding of Accounting principles a batch is a batch meaning that each line should have a number assign to it for tracking, and that way a check could be writing from both sides of an account, for example this would be like having two checking accounts and you writing a check to yourself from the same account. you should be able to have separate batches. Maybe the MLS should do the same.

The Main Problem is (Example) the Bishop uses a credit card or personal check to help lodge a member for a night or two which comes from Fast Offeringsand also buys books and candy for the office which comes from Bishops Reserve then on a camp out with the scouts needs to buy some extra supplies for the Scouts that comes out of Other Scout camp funds. Because of the way the MLS is setup as many a Three checks would have to be written and every check will then need to be tracked in stead on writing only one check to the payee. This is the worst case situation but its happened.

That's it Maybe where could be a way to fix this some day

Thanks

You mean it's possible to deposit "income" money into budget? I'm kind of shocked by this; 1) didn't know it was possible, and 2) if it is possible, then what's the point of the budget allowance? Wards can just go out and "earn" all the money they want and throw it into the budget, pretending it all came from the budget allowance. I'm confused.

rexgj wrote:You mean it's possible to deposit "income" money into budget?

What do you mean by "income" money?

No funds other than return of advances should be deposited into any budget account (CHI, book 1, p 159-161) (Budget Allowance). The ability to deposit funds into any budget account is to permit an excess advance disbursement to be returned or redeposited into the account from which the disbursement was made. (See the Handling Church Expensestraining lesson, p 23)

rexgj wrote:I'm kind of shocked by this; 1) didn't know it was possible, and 2) if it is possible, then what's the point of the budget allowance?

As stated above, the ability to deposit funds into the budget account is to permit return of excess disbursements. It is not for any other purpose, except as directed by Church headquarters. The ability to make deposits into a budget account does not obviate the budget allowance. Church policies and procedures must be followed when dealing with the budget allowance. No contributions may be deposited into any budget account.

rexgj wrote:Wards can just go out and "earn" all the money they want and throw it into the budget, pretending it all came from the budget allowance.

To do this would be a violation of Church policy. While this practice may go undetected or challenged for a period of time, eventually either by local audit or by Church headquarters audit, the discrepancy would be detected and appropriate measures taken.

Maybe I don't understand what's being discussed here. I used the term "income" money to refer to money be raised, earned, fundraisers--money that does not come from the budget allowance. That's why I'm unclear about depositing money into the budget. I didn't know that was possible, let alone that it was permissible. And I had thought that "excess disbursement" funds went into the "Other" account, not budget.

rexgj wrote:Maybe I don't understand what's being discussed here. I used the term "income" money to refer to money be raised, earned, fundraisers--money that does not come from the budget allowance. That's why I'm unclear about depositing money into the budget. I didn't know that was possible, let alone that it was permissible. And I had thought that "excess disbursement" funds went into the "Other" account, not budget.

I'm not sure what you are talking about. This thread has more than 40 posts, so it would help if you would link to or quote from the post you have concerns about.

As jdslessley explained, the term "income" as used in MLS simply refers to deposits, which can indeed be done under policy to the Budget category for limited, specific reasons. There's no reason to conclude that such deposits are necessarily a violation of policy, but if you would like clarification, please let us know just what post you are talking about.

rexgj wrote:I used the term "income" money to refer to money be raised, earned, fundraisers--money that does not come from the budget allowance.

Fund-raisers have very limited circumstances in which they may be used. Fund-raisers are only for annual summer camps and equipment as outlined in the CHI, book 1, page 160-161. The funds from any fund-raiser should only be deposited into an Other sub account in accordance with Church policy and procedure. Any discussions in this or any other thread stating that this may be done is in opposition to Church policy and procedure. Because MLS permits funds from fund-raisers to be deposited into any budget account does not mean it is a proper procedure. Some users in this thread were proposing depositing donations or fund-raiser funds into the budget as a shortcut for situations where budget monies were insuficiient to cover the costs of the camp(s) and to avoid having to write two checks. This is ill advised since it is in opposition to Church policy and procedure.

rexgj wrote:I had thought that "excess disbursement" funds went into the "Other" account, not budget.

When a member recieves an advance disbursement for expenses and then returns a part of that advance as an excess disbursement the funds are redeposited into the budget account from which they were disbursed. The reason why some people get confused as to where the leftover funds are actually to be deposited is because the procedure to return leftover funds is to cross out 'Other' on the Tithing and Other Offerings slip and write in 'Budget Return'. The funds are not actually being deposited into the Other account. The only place on the Tithing and Other Offerings slip to annotate the budget return is in the "Other' category. The clerk actually returns the leftover funds into the budget account from which the funds came.