MLS / How to transfer from "other" category into "budget"

Hi Brethren,

Hope everyone is well and good.

Just need a little bit of help. I'm pretty sure this has been answered before but I can't seem to find the post.

Could anyone tell me please, on MLS, how to transfer money that is still sitting in the "other" categories into the ward budget? To explain, when stake asked to transfer money owing for FSY for example I transferred money straight from ward budget to stake instead of from category>other: FSY.

Many thanks in advance.
Rod

Levasa wrote:To explain, when stake asked to transfer money owing for FSY for example I transferred money straight from ward budget to stake instead of from category>other: FSY.

I'd look at re-categorizing the transfer.

I think the only way to get money out of Other and into Budget, is to write a check from the Other account. Receive it into Budget with the next batch.

I'd wonder about how the money ended up in the "Other" category to begin with. Should it have been originally deposited into a budget category? (Forgive me but I'm a little frustrated by all the unexplained acronyms in the church, so I had to look up "FSY" to discover it means "For the Strength of Youth" Confrences, right?) Normally, we don't make deposits into "Budget" categories.

So, is it possible to go back and correct the original deposit(s) to go into "Budget" instead of "Other"? Is it possible to correct the expenses that were taken from "Budget" for FSY and change them to "Other:FSY"? It seems like the cleanest way to fix this is to just correct the past income and the expense records in order to clear out the "Other:FSY" category, rather than create transfers. This should be possible, unless the things which need correction happened too far in the past.

The best use of "Other" is, of course, to collect money for a specific purpose and then use it all up for that specific purpose. Was that the way it should have worked in this case? Is it too late to correct the records so that, on paper, this is exactly what happened?

Just keep in mind that transferring "other" to "budget" is a red-flag to a auditor as using fund-raising or other donations to extend the budget is prohibited. That's why I say it's better to re-categorizing or split the expenses. If you do transfer "other" to "budget", I sure hope that there's a equal or larger transfer from "budget" to "other" or you could be in for a long audit and possible exceptions.

If this is left over money, then I'd suggest holding on to it for next year. Otherwise, you'll have to refund it or send it to CHQ. Rolling it into budget is a no-no.

Sorry to resurrect a dead post, but I need to do the exact same thing and the option that was given as a solution is not really an option. Everyone recommended editing the transfer to change the category from "budget: allocation" to "other: authorized member financed".

Situation: We made a transfer to the stake to cover prepayment of boys camp. At the time, the fund raising money had not been deposited into the Other account so the payment had to be made out of the Budget: Allocation account. Now that the funds have been deposited, we need to make the switch as those are what the funds were raised for. I have only seen the ability to create or view transfers and not edit them. Since the transfer was made, we are now having an extra sum count against our budget and our other account looks padded.

I have read that writing a check from the Other account that holds that fundraising money back into the Budget is kind of frowned upon. Suggestions?

tedo77 wrote:I have read that writing a check from the Other account that holds that fundraising money back into the Budget is kind of frowned upon.

You may be stuck having to do exactly that. Short of having the stake return the money so you can re-do the transfer, I don't know as there's any other options.

You could try calling CHQ and see if there's something they can do at their end to edit the transfer.

We had similar experience today where a ward sent in their portion of Youth camp funds to the stake by writing out a check using their "Budget" account. Their "Other" account was empty, so they had to use "Budget"account money because the money was due. The leader said that money will be coming in soon from parents of youth and fund raising, but he didn't know if he could put the money coming in into the "Budget' account, because he knows it's really "Other" account money.
My question is could this ward have written a check coming out of an empty "Other" account, and then immediately refund the "Other" account as the monies came in to off-set the negative balance that they would have created?

hopperjd8770 wrote:My question is could this ward have written a check coming out of an empty "Other" account, and then immediately refund the "Other" account as the monies came in to off-set the negative balance that they would have created?

Driving the "Other" account negative is likely to result in a unpleasant message from CHQ. A better strategy would be to write the check from the budget account and then when the "Other" account has the funds, reclassify the check. The reclassification will reimburse the budget (in an approved way) and remove the funds from "Other" (but without driving it into the red).

tedo77 wrote:Sorry to resurrect a dead post, but I need to do the exact same thing and the option that was given as a solution is not really an option. Everyone recommended editing the transfer to change the category from "budget: allocation" to "other: authorized member financed".

Situation: We made a transfer to the stake to cover prepayment of boys camp. At the time, the fund raising money had not been deposited into the Other account so the payment had to be made out of the Budget: Allocation account. Now that the funds have been deposited, we need to make the switch as those are what the funds were raised for. I have only seen the ability to create or view transfers and not edit them. Since the transfer was made, we are now having an extra sum count against our budget and our other account looks padded.

I have read that writing a check from the Other account that holds that fundraising money back into the Budget is kind of frowned upon. Suggestions?

I had this come up and our stake instructed me to write a check from the OTHER and deposit it in the bank into the BUDGET.

chriswoodut wrote:I had this come up and our stake instructed me to write a check from the OTHER and deposit it in the bank into the BUDGET.

That is one way of doing it, and is the way we used to do it before we were able to recategorize the expenditure. In olden times, you had to call LUS to get a check recategorized, so you had to do the check writing/depositing.

Today, changing the category of the check and putting in a good reason will leave an audit trail that should satisfy everyone.

chriswoodut wrote:I had this come up and our stake instructed me to write a check from the OTHER and deposit it in the bank into the BUDGET.

That will work, but the auditor will have to spend some time making sure that wasn't a violation of policy. (A reimbursement instead of excess being shuffled to budget.) That's why it's preferred to re-categorize the original expense - cleaner books for the auditor.

Re-categorizing avoids even the appearance of wrong-doing.

russellhltn wrote:

chriswoodut wrote:I had this come up and our stake instructed me to write a check from the OTHER and deposit it in the bank into the BUDGET.

That will work, but the auditor will have to spend some time making sure that wasn't a violation of policy. (A reimbursement instead of excess being shuffled to budget.) That's why it's preferred to re-categorize the original expense - cleaner books for the auditor.

Re-categorizing avoids even the appearance of wrong-doing.

We ran into it because we had a fundraiser for the youth camps (other category). Many of the camps were paid for in advance before the fundraiser so budget money had to be used.

So, we got to the end of the year and the budgets were negative and the fundraising (other) account was positive. When we looked at changing the categorizing on the donations, it was going to be a lot of changes. It was easier to write the check. The auditor asked about it and it was the first time he'd heard of that approach. He was fine with the explanation.

chriswoodut wrote:We ran into it because we had a fundraiser for the youth camps (other category). Many of the camps were paid for in advance before the fundraiser so budget money had to be used.

So, we got to the end of the year and the budgets were negative and the fundraising (other) account was positive. When we looked at changing the categorizing on the donations, it was going to be a lot of changes.

In a situation like this generally expenses were paid out of budget and donations are placed in the Other account. The expenses should be recategorized to the Other account. The donations should not be recategorized to Budget. In my experience there are generally only a few checks written for an given camp so it isn't that hard to recategorize them.

chriswoodut wrote:When we looked at changing the categorizing on the donations, it was going to be a lot of changes. It was easier to write the check. The auditor asked about it and it was the first time he'd heard of that approach. He was fine with the explanation.

I'd think that he'd have to match the amount of the check transferred to budget against the expenses from the youth camp. Unless it was all under a sub-category of budget that totaled things up, it seems like that would make his work harder.

In my mind, the whole concept of "Other" is to separate specific transactions out of the mix of the ward finances to make is very clear to both leaders and auditors that money that comes in for specific activities have been spent on that specific activity and hasn't ended up funding other things. As soon as funds go from "other" to budget, I'd think that would call for some examination to make sure that principle has been followed (camp expenses paid from budget match or exceed the funds transferred from other). But having to do that kind of defeats the whole idea behind "Other".

Now, you might have had a lax auditor, but I wouldn't guarantee it to be so easy next time.

tedo77 wrote:Everyone recommended editing the transfer to change the category from "budget: allocation" to "other: authorized member financed".

And that is the best way to do it. You paid for the camp out of Budget because there was not enough in Other. When the funds are available in Other, you change the category of the payment from Budget to take the funds from Other instead. The original check from Budget is now from Other. The Other funds are used up and the Budget balance is restored to what it was before the check was originally written.

The second option being discussed is to take the funds from Other, where they were collected, and move them to Budget using a check from Other and a deposit to Budget. That also works.

But the first way is easier and better, if you can do it.

Do not change the category of any of the donations. They go to Other and they stay in Other. You only need to work with the expense part of the equation.

This topic came up again last week when another clerk mistakenly recorded fund raising donations/money into a BUDGET category instead of the OTHER category. I went through and changed them all so the fund raising money is now in an OTHER category.

At the beginning of the year, I setup the budget to be dollar amounts that each organization is budgeted/forecasted to spend the year. I want the expenses to come out of those BUDGET categories so that they can clearly see what they have spent year-to-date and what is left. IF I move expenses from the budget to the OTHER in order to consume that money, I lose track of that expense and it tweaks the budget numbers in a bad way. Or, even if I write reimbursement checks from the OTHER category it doesn't deduct or get allocated to the budget which can lead people do think they have more budget to spend than they really do.

For example (my made up numbers):

1. YW have $2000 for camp this year. They have a BUDGET category called YW Camp.

2. We paid $1000/50% down on the camp BEFORE the fund raiser occurred. The expense came out of the YW Camp budget category. The balance remaining in the YW Camp budget is $1000. This is good.

3. We did a fundraiser. We now have $2000 in an OTHER category.

4. If I change the expense from #2 above by editing the entry to be from the OTHER instead of the BUDGET category, the YM Camp budget will go back UP to $2000. The YW organization may then think they have $2000 remaining to spend on the camp. This is bad.

5. I can go in and change the YW Camp budget to now be $1000 to reflect the actual remaining money but that is ugly and messy. I lose my historical budget information that I want to have when I make next year's budget. It is also confusing because it changes the numbers on paper (but not in reality) that everyone agreed to at the beginning of the year. This is bad.

These bad problems push me back to just writing a check from the ward, to the ward, and allocate it to the budgets and it should show up as income and not mess up the budget numbers. (In some ways, the other clerk that incorrectly attributed the fund raising donations/money to the BUDGET avoided this problem.)

This is my first full year of doing the budget from start to finish. Am I thinking about this incorrectly?

Chris

I don't understand the issue. At the end of step #3:

Under Budget you have $2000 budgeted, $1000 remaining balance.
Under Other you have $2000.
So total of $3000 to spend.

After #4:
Under Budget you have $2000 budgeted, $2000 remaining balance.
Under Other you have $1000.
So total of $3000 to spend.

I don't see how that's different.

chriswoodut wrote: For example (my made up numbers):

1. YW have $2000 for camp this year. They have a BUDGET category called YW Camp.

2. We paid $1000/50% down on the camp BEFORE the fund raiser occurred. The expense came out of the YW Camp budget category. The balance remaining in the YW Camp budget is $1000. This is good.

3. We did a fundraiser. We now have $2000 in an OTHER category.

4. If I change the expense from #2 above by editing the entry to be from the OTHER instead of the BUDGET category, the YM Camp budget will go back UP to $2000. The YW organization may then think they have $2000 remaining to spend on the camp. This is bad.

5. I can go in and change the YW Camp budget to now be $1000 to reflect the actual remaining money but that is ugly and messy. I lose my historical budget information that I want to have when I make next year's budget. It is also confusing because it changes the numbers on paper (but not in reality) that everyone agreed to at the beginning of the year. This is bad.

I'm assuming here that you are expecting camp to cost $2000 total.

If you can allocate $2000 from the budget to camp and still keep the ward budget balanced then you should not have a fundraiser at all. Policy is that all expenses should be paid out of budget if possible.

If, however, you can only actually manage $1000 out of budget funds then you should set the budget to $1000 to start with. The fundraiser should then target raising the additional $1000. If the fundraiser falls short then you have to see if you can adjust the budget to take funds from elsewhere or find ways to cut costs. If it brings in more then you again adjust the budget to reallocate the additional funds as the bishop decides. The same applies if a fundraiser was held when it really didn't need to be.

To get historical expenses you just run a budget report (for the budget component) and a Income/Expense report (for the Other component) and add the two together. It's a bit more work but the advantages of re-categorizing expenses is well worth it.

Don't try to track historical budget allocations in MLS. It doesn't work well and it's not intended for that purpose. Use an external spreadsheet or just print and date the budget at the beginning of each year and put it in a file folder. Add notes as necessary.

eblood66 wrote:Don't try to track historical budget allocations in MLS.

Nor is that the way future Budgets are to be worked out. Handbook 1:14.7.1 outlines the process. Prior expenses are to be considered, but prior budget allowances are not part of the process.

I really don't want to run a separate budgeting process parallel to MLS. I don't want the process to be convoluted such that I'm the only person that really understands it. I want to be able to provide reports to the organizations at ward councils so they know where they are at. If I do what is suggested, the only way to really provide reports is to run a parallel system. That's not optimal.

Writing a check from the ward to the ward and allocating it to the budgets makes more sense.

chriswoodut wrote:Writing a check from the ward to the ward and allocating it to the budgets makes more sense.

I'd suggest talking with the stake or an auditor before doing that. Otherwise, you might find you've got problems when it comes time for the audit. Mingling donations for camp/fundraising with budget is a big red flag. Those funds are only to be spent on their specific purpose and can't be moved into the general budget.

It really shouldn't be that big a deal for the YW to see two accounts (budget and other). That's how it's run church-wide.

russellhltn wrote:

chriswoodut wrote:Writing a check from the ward to the ward and allocating it to the budgets makes more sense.

I'd suggest talking with the stake or an auditor before doing that. Otherwise, you might find you've got problems when it comes time for the audit. Mingling donations for camp/fundraising with budget is a big red flag. Those funds are only to be spent on their specific purpose and can't be moved into the general budget.

It really shouldn't be that big a deal for the YW to see two accounts (budget and other). That's how it's run church-wide.

I'm not really mingling funds as I have budget categories that are camp specific. Last year the stake clerk directed me to write a check to the ward.

My example is simplified so when mixing the ym camps in with a single fundraising other category for both organizations, it gets more awkward. The organization that has the first camp consumes most of the fundraising money.

As long as this is documented with a paper trail, I don't understand the concern. I also don't understand why people aren't using the budget tools the way a normal budget would work.

I fully admit I'm new, so maybe there is something I'm missing.

chriswoodut wrote:I'm not really mingling funds as I have budget categories that are camp specific.

Although that is true, you aren't using the accounts in the usual fashion which may raise questions from auditors, future stake leaders or future clerks (after you're released). In particular anytime you're sending funds from Other to Budget could raise questions.

chriswoodut wrote:My example is simplified so when mixing the ym camps in with a single fundraising other category for both organizations, it gets more awkward. The organization that has the first camp consumes most of the fundraising money.

I presume there is some agreement about how the funds should be split up. A camp Other account should be made for each one and the agreed amount transferred to each one.

chriswoodut wrote:As long as this is documented with a paper trail, I don't understand the concern.

Doing it in a non-standard way makes it harder for others to understand what happened if you aren't available.

However, you can probably do things pretty much the way you'd like by writing a check from budget to other before the first expense (for the amount to come from budget funds). Then pay all expenses out of the other account. Once all the expenses have been paid you can go back and adjust a portion of the 'donation' into the Other account back into the Budget account in order to zero the Other account. That way the only transfer is from Budget to Other (which is allowed) and all expenses are easily tracked and there is no question of whether Other funds were used inappropriately.