Auxiliary Budget Rollover

In our ward, we have a new Primary President that just asked me about her remaining budget for 2020. Upon reviewing the Primary Budget, the old Primary President used 41% of the annual budget. 59% of the budget is remaining for the new Primary President to use in this calendar year.

Her question to me which I, in turn, ask all of you is this: If she does not use the remaining 2020 budget does it "roll over" and get added to her 2021 budget, or does it just disappear?

For my own personal knowledge and understanding. If the budget does not "roll over" where does it go (Back to the General Ward Budget or Stake Budget)? How does that all work?

Any and all insights would be greatly appreciated!

That is a question to ask of your bishop, not this group. If he has questions about the rollover of budget funds he should talk to your stake president. The church does not retrieve unused money from the unit accounts.

The stake president can certainly ask the units in his stake to return part or all of their remaining budget to the stake. However, that is rare in my experience.

At the end of the year, all remaining budget funds return to the ward budget. It is up to the ward council to decide how to allocate the budget for the coming year. You add the remaining ward budget funds to your estimate of the next four quarterly budget allocations to approximate how much budget will be available for the coming year.

You can see how I approach the budgeting process here:
viewtopic.php?f=46&t=37691

Handbook section 34.7.2.2

Unneeded budget allowance funds should not be spent. Unneeded ward funds are returned to the stake. Unneeded stake funds are returned to Church headquarters or the assigned area office. As an exception, stakes and wards may retain some unspent funds if they are needed for specific activities that are planned for the next year, such as a youth conference. However, significant portions of the stake or ward budget allowance should not be retained from one year to the next to cover travel expenses.

As I understand it, here are the mechanics:

Auxiliary budgets (as in a spending plan) are reset at the end of year. There is no carry over.

The budget allocation the ward gets can be thought of as an actual account balance, and will by default carryover at the end of the year - just like how your personal bank account balance does.

However,

Stake presidents can see how much carry over there is in the ward allocation, and may ask for some of that to be returned to the stake or church headquarters. See the Handbook quote listed above. The bishop could decide to increase the primary's budget. So, the final answer resets with the leadership.

Note however, that budgets should NOT be handled based on "how much can I get", but "here's my plan, can I get it funded". See General Handbook 34.7.1 for details.

Also, while the Primary budget may show a surplus, there's a possibility that money may not really be there. Remember, the Primary budget is a spending plan, while the ward allocation are the actual funds. With all the changes this past year has brought, it's entirely possible the ward's allocation can not cover the remainder of the Primary budget due to unforeseen expenses.

Yes, exactly. As we approach the end of the year, we can see how good or bad our guesses for this year's budget allocations were.

I compared our current ward budget balance on the Income and Expense Summary with the remaining Budget Balance. I found that I had overestimated our income for this year by several hundred dollars. So the budget amounts I had allocated to the auxiliary organizations doesn't really exist -- it was just a planned amount, not actual money. So it is possible that "unspent" funds may simply not exist due to bad income estimates.

Thanks to each one of you for sharing your perspective on the proper protocol to follow. I'll go to the General Handbook as directed and immerse myself in the details. I am so grateful for the opportunity that this forum provides to glean wisdom from everyone's first-hand experience. You all are just so amazing and I appreciate being able to rely on you for advice.

Another aspect to consider as we all take a look at our remaining budgets, is that very very often, the "current balance" is deceiving. There's two main reasons for this:
1) Members have forgotten to submit reimbursement requests. The eternal bane of financial clerks, trying to keep members from saving all their receipt reimbursements until December (or worse, until the next year)
2) Members choose not to request reimbursements. Some members will just "eat the cost" of activities, which skews future planning. If a Bishop sees an organization getting reimbursed for less than what they actually spend, he may give them a smaller budget in an upcoming year. Then a new Primary President who doesn't have the ability to "eat the cost" of activities, finds herself with less money to spend than what's needed.
So that's all to say that as you consider what currently shows as "unspent budget", you may want to dig a bit deeper to ensure that it's a true reflection of the Primary expenditures. If so then that's great!

drepouille wrote:
It is up to the ward council to decide how to allocate the budget for the coming year.

I feel that this may be in error. Unless things have change since I first became Financial Clerk in 1997 ( continuous except for one three year break 2002 to 2005) it is the Bishop "to decide how to allocate the budget for the coming year." The instructions have been that each group President would submit to the Bishop his/her plans for the coming year. The Bishop would go over them, with an eye to the estimated money coming in, and then discuss his findings with the President. Then he, with the Clerk, would go into LCR/MLS and enter the numbers he was inspired to enter. The final decision is the Bishop's as he has total Ecclesiastical authority in the Ward.

Am I in error?

waynecooke wrote:Am I in error?

Yes and no. The bishop regularly reviews budgets and expenditures with ward clerks and ward leaders, the ward council (General Handbook, 34.3.1). The bishop receives direction from, and counsels with, the stake president (General Handbook, 34.2.1). For the topic of this thread it would be appropriate and in accordance with the General Handbook to counsel with both the ward council and the stake president in regard to the excess budget funds at the end of the year.

Understood, but I was specifically referring to the thought that the Ward Council " decide how to allocate the budget". Picky, maybe, but when the Bishop makes the final decision, the decision is made, or so I understood. Just as Bishop's Councilors council, and he should take that council into consideration, the decision is still his.

In actual practice, my experience is that the bishopric and the ward council ignore the clerk's pleas for a decision, leaving the budget division up to the clerk the first time he logs in to MLS each January. There is never time nor inclination for any such discussion during the ward council meeting, especially in December.

I admit that it is entirely possible to throw the entire ward budget into a single budget category. I am sure no one on the ward council would care if the clerk did that. But that would be contrary to the Handbook direction to use wise budgeting practices.

The Local Unit Budget Instructions for Organization Leaders in the help center indicate that the bishop manages the budget but may assign a counselor to supervise the budget and a clerk to prepare and monitor it.

In addition it states that the bishopric prepares the budget but should ask organizations to estimate their budget needs.

Personally I think that fully supports that the bishop makes the final decision. The ward council should be consulted about needs but the bishopric and ultimately the bishop make the final decisions.

drepouille wrote:In actual practice, my experience is that the bishopric and the ward council ignore the clerk's pleas for a decision, leaving the budget division up to the clerk the first time he logs in to MLS each January.

I have to admit that has been my experience as well. General I (as clerk) have prepared the budget based on as much information as I can gather (which often isn't more than historical information) and the bishopric looks at it and says it looks good without any changes. But occasionally I would try to get organizations to give input on what they actually were planning. But usually only one or two organizations would actually respond.

For the past four years, I have simply estimated the total budget available (rollover plus quarterly allocation estimates), and then split the pie equally among the ward organizations that typically spend budget funds. I find that process works just as well as asking each organization to estimate its budget needs for the coming year.

drepouille wrote: split the pie equally among the ward organizations that typically spend budget funds.

We tried that (using the percentage basis) but that really blew up one year when we had a ration of 3 to 1 ratio YW to YM. The Young Women's presidency very politely (well, sort of) asked why, on a per person basis, the 'girls' were getting so much less that the 'boys'. The Bishop immediately made the change, and from that year (about four years ago) that discrepancy was eliminated.

I really push the Bishop (or pull him into the office) and get this done. As noted elsewhere I have been a Financial Clerk since 1997 with a two year break after the first six years. That has covered four Wards and eight Bishops. And only one of those had been a Bishop before, and that was about 25 years before he became ours.

Every time we hold a "combined" youth activity, we pay for the food from the YM budget, since they rarely spend their budget.