Local Unit Financial Statement Part two

We had a previous thread (http://tech.lds.org/forum/showthread.php?t=3410) for input into the new look and feel of the Church Unit Financial Statement. The project has taken your input and asked for additional input. I have posted two different proposed statements. Please feel free to constructively voice your opinion for one or the other or give additional feedback on how either one could be improved.

Same files rendered as PDF for those who don't have Word 2007

DJC wrote:We had a previous thread (http://tech.lds.org/forum/showthread.php?t=3410) for input into the new look and feel of the Church Unit Financial Statement. The project has taken your input and asked for additional input. I have posted two different proposed statements. Please feel free to constructively voice your opinion for one or the other or give additional feedback on how either one could be improved.

I probably lean a bit towards the summary option, if I had to choose, since it doesn't mess up the reconciliation process quite as badly as the category option does.

But as several people indicated in the previous thread, they are both a huge step backwards in terms of reconciliation. Have you actually had real clerks run through the reconciliation process with these statements? I think it would be eye-opening.

One of the main purposes of the statement is reconciliation (I would say it is the primary purpose). Practically every element of the statement should be designed in a way that facilitates reconciliation. These new statements seem to have done the opposite; to my eye, the reconciliation process wasn't even considered in their design.

Alan_Brown wrote:But as several people indicated in the previous thread, they are both a huge step backwards in terms of reconciliation. Have you actually had real clerks run through the reconciliation process with these statements? I think it would be eye-opening.

One of the main purposes of the statement is reconciliation (I would say it is the primary purpose). Practically every element of the statement should be designed in a way that facilitates reconciliation. These new statements seem to have done the opposite; to my eye, the reconciliation process wasn't even considered in their design.

Yikes! Alan is absolutely right. None of these proposed new statements seem to have any relation to the fundamental task of reconciliation. The format of the existing statement is much, much better for this purpose.

(If any changes are needed in that respect, they would take the form of labeling items on the statement to correspond more directly to items on the reconcilation screens. There could be check boxes for cleared checks and transfers, for example, and suggestions about creating temporary items.)

If the chuch could modify the existing software to reach down into MLS and check off the status of cleared checks automatically (as Quicken and my bank have been able to do for years) then that would be fine and dandy. But so long as I as a clerk have to do all that manually, reading the financial statement and manually checking each item off on the reconciliation screens, then please print the cleared and uncleared checks in serial order, just like the current statement.

All those basic functions are further obscured in this statement than they ever were.

There seem to be two things added to these new statements, neither of which has anything to do with monthly reconciliation:

1. Identifying "Action Items" that do not actually require action for the reconcilation to be complete.
2. Displaying summaries of income and expense, which can better be done as reports within MLS directly. Some of those reports exist already.

If the only purpose is to create more dated hardcopy that the bishop must sign, then so be it. But please keep it out of the monthly statement.

Obviously, some of the entries on these sample statements are there to cover all potential scenarios, such as "Missing Weekly Donation Information." Other items such as the "Missing Budget Allocation Requirement" hint at potential future policy/procedural changes, or are intended to cover units that are not part of the Budget Allowance program (probably those units outside the United States and Canada).

I noticed that the "Detail" section for the "Other" category shows an entry for "Interest Earned" on both the "Statement by Category" version (page 6), and the "Income Summary" version (page 4). I wonder if that is an error, or an allowance for a potential scenario.

Considering how much the changes in the new statements affect the current MLS reconciliation process, I can only hope that the changes anticipate or coincide with some future change to the MLS reconciliation process, or some new/future Web-based version/module for handling and tracking local unit finances. Or, perhaps the reconciliation process will be done away with entirely at some future point (yea!), meaning that these new statements will only be for informational purposes anyway.

If that is the case, then I prefer the general look and layout of the "Statement by Category" version. (It could still use some cosmetic tweaking to make it slightly less visually clunky.)

And if that is not the case, I think I still prefer the "Detail" section of the "Statement by Category" version AS LONG AS a corresponding "Expense Summary" is added beneath (or on the next page following) the new "Deposit Summary" (on the first page) in order to facilitate the current MLS reconciliation process. This "Expense Summary" needs correspond to Sections II and III of the "Summary Statement" of the current CUFS by having all cleared checks listed numerically regardless of category followed by all other expenses and credits listed in date order.

I am assuming that some of the changes to the statements are to comply with international or localized national requirements for financial statements, so that the Church only has to use one format for world-wide compliance.

In summary, I like the "Detail" section of the "Statement by Category" version, the new charts and analyses at the end of the statement, and the new beginning summary on the first page. The summary sections from the "Summary Statement" on the current CUFS also need to be carried over to the new statement IF the current MLS reconciliation process is to remain unchanged.

I would think that you probably have already done this, but depending on what purposes the new statements need to fulfill, I would try to gather sample statements from other institutions, such as Zions Bank, Mountain America Credit Union, Bank of America, AT&T Wireless, Verizon, T-Mobile, Qwest, Questar, Blue Cross Blue Shield, State Farm, JCPenney, Lowes, American Express, Discover, Charles Schwab, Merrill Lynch, Countrywide, Citimortgage, etc. to glean which formats are the most simple, readable, and effective at presenting the type of information and concepts you to need/want to convey.

I agree with has been said with the new statement - very reconciliation challenged and unfriendly. It would be well worth the effort to do some focus group testing on any changes - wait, this is a focus group.

Are these changes being driven by requests from ward clerks? Is it possible to provide insight to the drivers behind the changes?

Towards the end of the statement there is a section on ward budgets. Is it the intent that ward budget information will now be transmitted to SL for displaying on the CUFS? Interesting.

All,

In speaking with the finance department there are a few items they feel should be clarified when looking at the new look statements:

1. A new back end financial system (CUBS) is being created which will eventually make the need for reconciliation unnecessary. MLS and the new back-end system will have two-way communication allowing confirmation of data to be received in MLS.

2. The intent of the new monthly statements is to report financial activity with action or follow-up items as indicated in the report. When reconciliation will no longer be necessary, the new statements purpose will be to act as a detailed report of action and follow-up items.

If the need for reconciliation were eliminated, would that change the feedback which has already been given on the new look statements?

wraytogo wrote:1. A new back end financial system (CUBS) is being created which will eventually make the need for reconciliation unnecessary. MLS and the new back-end system will have two-way communication allowing confirmation of data to be received in MLS.
...
If the need for reconciliation were eliminated, would that change the feedback which has already been given on the new look statements?

Thank you for the clarification.

If there will be no more reconciliation, that would dramatically change my feedback. Almost every comment I made was in the context of how it would affect reconciliation. It would have been nice if someone had supplied that "little detail" a bit sooner!

It's difficult for me to anticipate what will be most important on a financial statement when there is no reconciliation, since reconciliation is the primary function of financial statements in my experience up to this point. But I would think the new statement would work just fine if there are no reconciliation issues. I'd love to try out the new backend system to see if that is true.

Yes, I will also have to go back and re-review the proposed statement. Thanks for the added info.

This question may be a bit premature, but some of us go through a few "extra" steps beyond reconciling the Missionary and Other funds to also reconcile the Budget. Will the Budget be included in this auto-reconcile process, or will we still need to still do it by hand?

wraytogo wrote:1. A new back end financial system (CUBS) is being created which will eventually make the need for reconciliation unnecessary. MLS and the new back-end system will have two-way communication allowing confirmation of data to be received in MLS.

Hooray. That does sound lovely. I wonder how long "eventually" is. So long as it precedes the introduction of the new financial statement, that would resolve my previous objections.

wraytogo wrote: 2. The intent of the new monthly statements is to report financial activity with action or follow-up items as indicated in the report. When reconciliation will no longer be necessary, the new statements purpose will be to act as a detailed report of action and follow-up items.

Concentrating on items that truly are "action items" sounds like a good focus in general.

It does seem that some of the content goes beyond that principle, although that may also be part of the intent. I am thinking of the detailed summaries by budget and expense category. Similar reports are already available on demand within MLS, and heretofore not even stakes have routinely managed budget spending in such detail. So seeing that in a report from Salt Lake may strike some as micromanagement from the top. Whether that is desirable is a question above my pay grade as finance clerk.

Based on that new information, my preference (as a non-accountant) is the by category version. I think this statement communicates information more the way I would likely go looking for it. The by income summary version is more confusing to me.

wraytogo wrote:If the need for reconciliation were eliminated, would that change the feedback which has already been given on the new look statements?

Yes. All of my reconciliation concerns go away.

And in that case, I would prefer the By Category statement, since that is really the way I look at a statement, one category at a time.

Without reconciliation concerns, I like the by category statement better as well. That way it represents the "mini accounts" that logically make up the one checking account for the ward.

oregonmatt wrote:Without reconciliation concerns, I like the by category statement better as well. That way it represents the "mini accounts" that logically make up the one checking account for the ward.

I agree. The "By Category" format makes more sense to me for the same reason.

There is one detail of that report format I don't understand, however: Why is there a separate category for "Reimbursed Expenses?"

I should think these items would be sorted under their appropriate parent category. So most reimbursements would typically fall under Budget, some under Other and a few under Fast Offerings. The example given does not even look like a "reimbursement" at all (which to me means reimbursing a member for out-of-pocket purchases). In the example the payee is a Boy Scout council.

boomerbubba wrote: There is one detail of that report format I don't understand, however: Why is there a separate category for "Reimbursed Expenses?"

I should think these items would be sorted under their appropriate parent category. So most reimbursements would typically fall under Budget, some under Other and a few under Fast Offerings. The example given does not even look like a "reimbursement" at all (which to me means reimbursing a member for out-of-pocket purchases). In the example the payee is a Boy Scout council.

I think those are expenses that are reimbursed to the stake by CHQ rather than expenses reimbursed to members from the ward.

boomerbubba wrote: There is one detail of that report format I don't understand, however: Why is there a separate category for "Reimbursed Expenses?"

I should think these items would be sorted under their appropriate parent category. So most reimbursements would typically fall under Budget, some under Other and a few under Fast Offerings. The example given does not even look like a "reimbursement" at all (which to me means reimbursing a member for out-of-pocket purchases). In the example the payee is a Boy Scout council.

At the stake level, there are "special" subcategories of Other that are automatically reimbursed. These include Other:Scout Registration, Other:Missionary Host Family, Other:Authorized Computer Repair, and several others. The example given fits quite well in the Other:Scout Registration category. It would be an expense incurred by the stake, but reimbursed by the Church, which would make the category "Reimbursed Expenses" fit pretty well.

I wonder if among the contemplated changes with the new back-end system would be a restructuring of these special Other subcategories into a different parent category. As it is, there is absolutely nothing special about the name or anything else about the subcategory that lets you know that it will be automatically reimbursed -- you just have to know the magic list of Other subcategories that are automatically reimbursed. It would be nice to make that attribute much more visible.

Alan_Brown wrote:At the stake level, there are "special" subcategories of Other that are automatically reimbursed. These include Other:Scout Registration, Other:Missionary Host Family, Other:Authorized Computer Repair, and several others. ...

Thanks for that explanation. All of that was new to me. Do any of these ever appear in a ward financial statement as it is now structured?

boomerbubba wrote:Thanks for that explanation. All of that was new to me. Do any of these ever appear in a ward financial statement as it is now structured?

None of the special expense subcategories of Other exist at the ward level. There are special donation subcategories (such as Other:Humanitarian Aid) that are automatically swept, but no Other subcategories that are automatically reimbursed, as far as I know.

Alan_Brown wrote:At the stake level, there are "special" subcategories of Other that are automatically reimbursed. These include Other:Scout Registration, Other:Missionary Host Family, Other:Authorized Computer Repair, and several others. The example given fits quite well in the Other:Scout Registration category. It would be an expense incurred by the stake, but reimbursed by the Church, which would make the category "Reimbursed Expenses" fit pretty well.

Except that the sample report is for a ward, not a stake. However, it is just a sample.

As a stake clerk, I would like to see a sample of the stake version of the "category" report. Based on what I see in the ward level category report, I think that would work very well for us at the stake level as well, but it would still be nice to preview one.

Now that CUBS is about to put into operation,
can someone post a sample of the new CUBS-based
CUFS to see what it looks like ?

Thanks,
Atticus

atticusewig wrote:Now that CUBS is about to put into operation,
can someone post a sample of the new CUBS-based
CUFS to see what it looks like ?

CUBS-based CUFS samples were posted at the beginning of this thread. They may have been through some minor revisions since then, but that's the basic structure.

I prefer the statement by category best. It is easier to read and puts the income and expenses together.

I am more focused on Page 2 and the Outstanding Reconcilaition Items. From what I read, this will become the focus of the new statement. The descriptions on the income items are pretty clear (bank received the deposit but the clerk forget to transmit Send/Receive or the donations was transmitted but the bank has not acknowledged receipt of the deposit.).

I am a little more confused on the Expense action items:

The first sounds like a simple outstanding check. What will trigger this action item? All outstanding checks or just those that are 1 or 2 months outstanding. Hopefully they will be sorted with the oldest check at the top of the list.

The second is a little more confusing. "A payment was issued by your disbursing bank..." Does this mean that a check was written but was not transmitted using the Send/Receive in MLS? The paymnent was not not issed by the bank, it was issue by the unit. I think it would be simplier if it stated "A check was presented to the bank for payment that was not fully processed in MLS. Please complete check processing in MLS."

Missing Weekly Donation Information:
Will it be possible to acknowledge that there was no weekly donation for the dates listed and then have them removed from the next statement? General and stake conference Sundays are the most common reason that donations will not be submitted. I would hate to see those dates on every statement through out the year.

Missing Budget Allocation Requirements:
Do all these items have to be completed before the unit gets it's budget allocation? Since the budget is actually allocated to the stake, does this mean that one unit in the stake can hold up the entire budget allocation for the quarter?

How do you clear any items that are not applicable? (see the comment on the missing weekly donation reports). What is "Collected funds must be deposited" how does this differ from the missing donation report? (How do you know that there are collected funds?).

Will an overdrawn Other category hold up the budget allocation? Is that just the Other category or does that item show up when any sub-category in the Other account has a negative balance?

RWoodmansee wrote:Missing Budget Allocation Requirements:
Do all these items have to be completed before the unit gets it's budget allocation? Since the budget is actually allocated to the stake, does this mean that one unit in the stake can hold up the entire budget allocation for the quarter?

Well, one unit (of 14) not completing their quarterly report held up our entire stake budget allocation for a while two years ago. We had a half-dozen ward clerks ready to "assist" the errant clerk before the matter was resolved.

So yes, entire stake budget allocations do get held up from time to time.

lajackson wrote:Well, one unit (of 14) not completing their quarterly report held up our entire stake budget allocation for a while two years ago. We had a half-dozen ward clerks ready to "assist" the errant clerk before the matter was resolved.

Well, there's some incentive to get those numbers into the clerk on time.

As you know, if you're up-to-date with MLS reconciliations then you can get them done in about 5 minutes per month (or less!). Now I look at these new, sample statements and all I can say is "Thumbs Down." Too much unnecesary information arranged in a too-wordy way. (I can already look up expense details in MLS so why waste so much paper spelling them all out here? A summary will do fine.) And I don't need graphs, period. Also, we've been handling budgets on a yearly basis for so long that I think a switch to quarterly budgets will be a giant hassle... creating a lot more work for the clerks. Why do this?

The switch from FIS to MLS (less than 6 years ago for us) was quite an adjustment because the computer was slapping your hands whenever you didn't stick with the MLS way of doing things. But once I learned the new rules I was okay. This seems like another round of hand-slapping is about to begin.

Have I been some kind of "Super Finance Clerk" just because I did what I was supposed to do? Or is this a case of fixing something that wasn't broken? If so many finance clerks aren't doing it right under the current system then what makes us think they'll get it right using a statement that, to me, looks more complicated?

(Just my initial thoughts. I'll probably calm down later... but I echo a previous question about whether anyone has actually tested this with real ward clerks.)

Don't dwell on the reconciliation aspect too much because you won't be doing the reconciliation, CUBS will be doing that for you. The new statement will be providing items that must be done to resolve the reconcilation issues. This is why I stressed that we should focus on the Outstanding Reconciliation Items section.

As for the budgeting process... as far as I can see with MLS 3.2 (stake version), which has the stake-to-ward budget allocation feature (disabled). It looks like it can accomodate a yearly budget. The stake clerk can create the 4 quarters and provide actuals and estimates much like we do today using spreadsheets. As the real budget numbers come from CHQ we update the estimate budget numbers with actual numbers from CHQ. Again, this is strickly my guess based on the limited information I have.

So, what's the point of eliminating reconciliation? As I said, it's quick and easy if you actually do it each month. But if you never have to do it then you'll be more likely to be unaware of a problem until this new statement tells you there's a problem. And then it seems like it would be more difficult to track down the problem and fix it.

In other words, under the current system the clerk is, by default, personally responsible for knowing where the problems are. Under the new system it looks like you can remain clueless as long as the statement doesn't give you instructions.

Are we elminating reconciliation just because clerks don't bother to learn how to do it? Is there a serious flaw (which I haven't experienced personally) in the current reconciliation process? Is it really so difficult to manually enter missionary expenses and distribution center charges? And, if I'm so efficient that I don't get any Action Items on the CUBS does that mean that the Stake doesn't have to audit me?

GregAnderson wrote:So, what's the point of eliminating reconciliation?

What's the point of reconciliation? Isn't it to make sure your computer matches the bank/church records?

It appears the big change is that now your computer will always be in sync, so there's no need to reconcile. For example, the church will automatically enter the missionary payments and show the deduction for any orders.

Your attention is now dedicated to "is this expense authorized?" and "how is our budget"? It will be interesting to see how these functions change. Traditionally, I think clerks have been answering those questions as they enter the data. With some of the data now being entered automatically, I wonder how (or even if) they will continue to answer those questions.

I know that's one of the biggest reasons I haven't gone with downloads to my personal financial system. I feel as I lose control as the "gatekeeper" of my finances as I haven't found a better way to review each transaction.

GregAnderson wrote:So, what's the point of eliminating reconciliation? As I said, it's quick and easy if you actually do it each month.

But many units don't.

GregAnderson wrote:And, if I'm so efficient that I don't get any Action Items on the CUBS does that mean that the Stake doesn't have to audit me?

You will still get audited. (I have not seen the new audit instructions or received the training yet, however, and I anticipate some changes from the way it is being done now.)

GregAnderson wrote:I echo a previous question about whether anyone has actually tested this with real ward clerks.

The answer is yes, but it is easier to understand if you remember that the statement is really for the bishop, not the clerks.

Some bishops with fantastic clerks will notice the differences. And many bishops and branch presidents will get a clue for the first time in their callings. [grin]

...the statement is really for the bishop, not the clerks.

Yes, I remember (not long ago) when the statement was mailed to the Bishop who then gave it to a counselor who eventually remembered to give it to the clerk (who was always really, really anxious to get it so that the reconciliation could happen as soon as possible... and who really got tired of asking for someone in the Bishopric to hand it over). So I really, really enjoy that the statement is automatically downloaded and the clerk can get to work with it right away. And, while the Bishop can look for it any time he wants to I'm thinking he doesn't.

And many bishops and branch presidents will get a clue for the first time in their callings.

...um, I don't want to touch that.