Annual Budget

This is my first January as a Ward Clerk and I am wondering what to do regarding setting up the annual budget. in the past I our ward did not use a budget in MLS, so I have nothing to compare to.
I am now running 3.3.

1. Can I use the "View/Edit Budget"? (I thought there was an issue after the CUBS update)
2. I am planning to transfer the annual budget amounts to their respective budget categories. Any issues with doing this? I know this will result in a negative in the Allocations category, but I figured it would be the easiest way to be able to track each aux's expenses and remaining balance and also eliminate having to figure out how much to transfer each quarter.
3. Can someone elaborate on the release notes regarding budgets? Is this stake or ward level?
Budget Reports and CUBS. If your unit has begun to use Church Unit Banking Services (CUBS), your Budget Report will be updated to reflect the features of CUBS, such as a real dollar amount in your Budget category and estimates of future budget allotments. If you are not yet using CUBS, you will be informed when this transition will begin.

ralitaco wrote:1. Can I use the "View/Edit Budget"? (I thought there was an issue after the CUBS update)

Yes, but then you will want to use the Budget Report to view your budget status and you will want to uncheck (not include) the Budget:Budget Allocations category when running this report. You also will not want to transfer funds from Budget:Budget Allocations to your other categories. This is because the view/edit budget screen adds a "virtual" starting balance to the categories. Transferring funds will give you 2 incomes to the category and throw your balances off. This is also why you don't want to include Budget:Budget Allocations in your reports as your overall balance will be off.

ralitaco wrote:2. I am planning to transfer the annual budget amounts to their respective budget categories. Any issues with doing this? I know this will result in a negative in the Allocations category, but I figured it would be the easiest way to be able to track each aux's expenses and remaining balance and also eliminate having to figure out how much to transfer each quarter.

You have to pick one method and stick to it. You can either use the view/edit budget screen, no transfers, and the budget report or transfers and the income and expense report. Using view/edit budget with transfers will artificially inflate your balances, leading your committees to think they have more money than they really do.

ralitaco wrote:3. Can someone elaborate on the release notes regarding budgets? Is this stake or ward level?
Budget Reports and CUBS. If your unit has begun to use Church Unit Banking Services (CUBS), your Budget Report will be updated to reflect the features of CUBS, such as a real dollar amount in your Budget category and estimates of future budget allotments. If you are not yet using CUBS, you will be informed when this transition will begin.

I imagine this applies to both wards and stakes as all will now receive actual budget amounts. While not clear to me exactly what it means, I suspect it refers to the fact that budgets now are "real". Pre-CUBS, your budget balance was actually always $0. That should be apparent if your ever reconciled. The ending balance of budget was always $0. Now it is not. It will be an actual, real, balance.

crislapi wrote:You have to pick one method and stick to it. You can either use the view/edit budget screen, no transfers, and the budget report or transfers and the income and expense report. Using view/edit budget with transfers will artificially inflate your balances, leading your committees to think they have more money than they really do.

I had a hard time reading what you were intending here, so I'm restructuring it just in case there are others who read like I do

You can either use:

• the view/edit budget screen, no transfers, and the budget report or
• transfers and the income and expense report.

I've previously posted a fairly detailed example of the differences between these two reports. See this post for an example.

Maybe I'm missing it, but how would you use the "transfers and the income and expense report" method to see a "annual" budget rather then "until the end of the quarter"?

RussellHltn wrote:Maybe I'm missing it, but how would you use the "transfers and the income and expense report" method to see a "annual" budget rather then "until the end of the quarter"?

You could transfer an amount equal to the annual budget amount to each category. This will cause your Budget:Budget Allocation subcategory to go extremely negative at the beginning of the year. Hopefully your quarterly allocations will make it positive or at least $0 by the end of the year. This is clearly one limitation to doing a yearly budget with this approach: you cannot guarantee you will actually receive an amount equal to what you've transferred.

I thought about that after posting. Thanks for the confirmation.

crislapi wrote:This is clearly one limitation to doing a yearly budget with this approach: you cannot guarantee you will actually receive an amount equal to what you've transferred.

Well, you cannot guarantee you will actually receive an amount equal to your expected annual budget either, so I don't see that factoring in the decision. It is something to be aware of in either method.

Another problem to be concerned about is sending the overall balance negative because of spending before the money comes in. I could see this happening for summer camps, etc. Everything would be fine by the end of the year, but when summer comes around the ward has only gotten half of the annual money. But that's nothing new. What is new is that now CHQ will see the ward going negative. Before it only knew when the stake went negative.

RussellHltn wrote:Another problem to be concerned about is sending the overall balance negative because of spending before the money comes in. I could see this happening for summer camps, etc. Everything would be fine by the end of the year, but when summer comes around the ward has only gotten half of the annual money. But that's nothing new. What is new is that now CHQ will see the ward going negative. Before it only knew when the stake went negative.

The bishops in our Stake raised this concern. We addressed it by agreeing to advance the 3rd quarter allotment when we pay the 2nd quarter allotment. Of course this only works if (1) the Stake has a sizeable surplus and (2) you go against the grain by zeroing out allotments in MLS and transferring funds to units by check.

mlh78 wrote:The bishops in our Stake raised this concern. We addressed it by agreeing to advance the 3rd quarter allotment when we pay the 2nd quarter allotment. Of course this only works if (1) the Stake has a sizeable surplus and (2) you go against the grain by zeroing out allotments in MLS and transferring funds to units by check.

I think a simpler method is to have the stake advance each ward a reserve fund. It would be expected to be placed in it's own subcategory. It's only purpose is to keep the ward from going negative during the year. The ward would be responsible for making sure they have enough reserve going forward. If they end up spending it, then they'd have to trim their mid-year spending.

However, one concern is that this information would be lost in the normal turnover of leadership and the funds would be spent without realizing the impact of it.

The stake could help by going after any wards that were below the reserve funding.

mlh78 wrote:The bishops in our Stake raised this concern. We addressed it by agreeing to advance the 3rd quarter allotment when we pay the 2nd quarter allotment. Of course this only works if (1) the Stake has a sizeable surplus and (2) you go against the grain by zeroing out allotments in MLS and transferring funds to units by check.

CHQ is only going to intervene if the stake as a whole goes negative. If that has not happened in the past, it should not happen now. I have decided to address this concern in my stake by 1) giving all wards an increased amount in their 2010 Q4 disbursement and 2) giving larger than normal disbursements for the first 3 quarters of 2011. The intent is to allow them to build up funds so that they can cover their summer expenses.

CHQ will not intervene when wards go negative. It is the stake's responsibility to monitor and handle these situations.

crislapi wrote:CHQ will not intervene when wards go negative. It is the stake's responsibility to monitor and handle these situations.

Can you provide a source for that? They CHQ hasn't intervened in the past because they didn't know. Now they do. I seem to recall statements posted here that wards should never go negative once the issues surrounding the CUBS transition was complete.

nutterb wrote:I had a hard time reading what you were intending here, so I'm restructuring it just in case there are others who read like I do

You can either use:

• the view/edit budget screen, no transfers, and the budget report or
• transfers and the income and expense report.

Is this the case with MLS 3.3? There is another post about it here. Can anyone else confirm that it is okay to use the View/Edit Budgets screen without it messing up I&E reports?

Thanks!

RussellHltn wrote:Can you provide a source for that? They CHQ hasn't intervened in the past because they didn't know. Now they do. I seem to recall statements posted here that wards should never go negative once the issues surrounding the CUBS transition was complete.

Regardless of whether CHQ will intervene, I feel uncomfortable telling the Stake President that "action items" on the consolidated financial statement don't really matter.

RussellHltn wrote:Can you provide a source for that? They CHQ hasn't intervened in the past because they didn't know. Now they do. I seem to recall statements posted here that wards should never go negative once the issues surrounding the CUBS transition was complete.

I believe this was a verbal statement made while a group of clerks were previewing CUBS. I'd have to ask aebrown (formerly alan_brown) to verify he heard the same thing. I'm pretty sure it's not documented in anything released.

Yes, the Nov 2010 additional information release contained the following statement (p3 under Issue: Can I write checks with no budget?)

After a ward receives and deposits the check from the stake, the budget category in the ward should be positive at all times.

However, if they do, the checks are still honored and they can continue to function.

nathangg wrote:Is this the case with MLS 3.3? There is another post about it here. Can anyone else confirm that it is okay to use the View/Edit Budgets screen without it messing up I&E reports?

Just look at the columns that appear in the reports. The only difference is that the values you enter in view/edit budget appear in the "allocation" column in the budget report. The I&E report does not contain this column so in unaffected by these values.

However, the budget report does contain a "transfers" column, so transfers made to create balances in subcategories on the I&E report will also appear in the Budget report. Those transfers plus the allocation amount will lead to erroneously high balances.

After a ward receives and deposits the check from the stake, the budget category in the ward should be positive at all times.

That's probably what I'm remembering. They might honor the checks, but unless it's in writing, I don't know as it would be smart to let a ward go negative as part of SOP.

ralitaco wrote:1. Can I use the "View/Edit Budget"? (I thought there was an issue after the CUBS update)

One more comment. The budget report by design will start each category with $0 for 2011. Absolutely no info from the previous year is included. The I&E report, however will carry over the ending balance from the previous year as a balance forward amount. While both reports have this column, it behaves differently in the budget report, where on Jan 1 it is always $0 and only contains an amount if a range has a starting date other than Jan 1.

crislapi wrote:

RussellHltn wrote:Can you provide a source for that? They CHQ hasn't intervened in the past because they didn't know. Now they do. I seem to recall statements posted here that wards should never go negative once the issues surrounding the CUBS transition was complete.

I believe this was a verbal statement made while a group of clerks were previewing CUBS. I'd have to ask aebrown (formerly alan_brown) to verify he heard the same thing. I'm pretty sure it's not documented in anything released.

Yes, that was a statement made in that CUBS preview meeting by the CUBS product manager and confirmed by one of the main CUBS analysts. I don't see any contradiction between that statement and the one quoted below. It can be entirely correct to say that wards "should" not go negative and to also say that no CHQ action will be triggered unless the stake as a whole goes negative.

crislapi wrote:Yes, the Nov 2010 additional information release contained the following statement (p3 under Issue: Can I write checks with no budget?)

After a ward receives and deposits the check from the stake, the budget category in the ward should be positive at all times.

However, if they do, the checks are still honored and they can continue to function.

The Church has always honored checks written by Church units, even if it would lead to a negative category balance. There has never been any indication to the contrary. Also, in that meeting that crislapi mentioned, this was specifically confirmed.

nathangg wrote:Is this the case with MLS 3.3? There is another post about it here. Can anyone else confirm that it is okay to use the View/Edit Budgets screen without it messing up I&E reports?

Thanks!

Nathan, you should probably disregard that portion of the other post b/c I created it and apparently I am not sure what is going on. Having said that, it appears that allocations in the "budget report" do not affect the I/E report; however, Transfers will affect the budget report.

crislapi wrote:...the budget report does contain a "transfers" column, so transfers made to create balances in subcategories on the I&E report will also appear in the Budget report. Those transfers plus the allocation amount will lead to erroneously high balances.

OK, This FINALLY cleared up the why I can't do both. THANK YOU.

crislapi wrote:You could transfer an amount equal to the annual budget amount to each category. This will cause your Budget:Budget Allocation subcategory to go extremely negative at the beginning of the year.

This is EXACTLY what I was thinking.
And after reading the rest of the thread, this is what I plan to do UNLESS I am told it is prohibitted.

Overall, the positive sum of the auxillary categories will offset the large negative in the Budget:Allocations category thereby having no effect on the overall "Budget" category.
This should keep CHQ at bay since I don't think they will be looking at each indvidual category and I don't think they differentiate b/n Budget:Allocations or Budget:Elders.

If the overall Budget does go negative, it will be the result of total overspending and not the transfers. And as has been stated already, this is common due to Scout camp, etc. and so long as it is not chronic, should not be a problem.

Overall, I just think it will be very easy to show the Aux's where they stand if I transfer their Annual projected budget amount now instead of doing it quarterly. This way the individual category balance will only go into the negative if they overspend their Total budget.

As a safety net, I have underestimated our projected Stake allotments and rounded up the spending from previous years. If by Q4 it looks like the overall budget will be in the negative, I can reduce the aux's budgets by transferring back into the Allocations category.

Just curious...For those that use the "view/edit budget" option, won't the individual budget category (ie Budget:Elders, etc) be in the negative on the I/E report since there can be no transfers to the category w/o skewing the budget report? So I presume if you use the View/Edit Budget, then those categories will have to remain negative until the end of the year, right? Is this how the budget report always worked?

ralitaco wrote:Just curious...For those that use the "view/edit budget" option, won't the individual budget category (ie Budget:Elders, etc) be in the negative on the I/E report since there can be no transfers to the category w/o skewing the budget report? So I presume if you use the View/Edit Budget, then those categories will have to remain negative until the end of the year, right? Is this how the budget report always worked?

Yes, the I/E report will show negative balances for budget subcategories if you write checks from those categories, but never transfer any money in. If you use the View/Edit Budget approach (which implies no transfers into subcategories), the I/E report will indeed show negative budget balances forever. That's how things have worked since the CUBS transition. Prior to CUBS, the I/E report always had balances of 0 for budget categories and subcategories, since every check written was automatically instantaneously reimbursed by a corresponding transfer.

aebrown wrote:If you use the View/Edit Budget approach (which implies no transfers into subcategories), the I/E report will indeed show negative budget balances forever.

I plan on using the View/Edit Budget report. To prevent the categories from being forever negative (and the Budget:Budget Allocations ridiculously positive), at the end of each year I plan on transferring from Budget:Budget Allocations to each category and amount equal to its total expenses for the year, thereby zeroing it out. This way, each category starts each year with $0 expenses, and the Budget:Budget Allocations will only show the funds available for the current year.

There as been some anticipation as to when the Q1 allotment money would drop. I just got back from the clerks office and in our ward the money has dropped, it appears to have happened on the 6th - at least the entry in the I/E report is dated the 6th. The amount was identical to that projected in the memo that was sent out a week or two ago.

ckmcdonald wrote:The amount was identical to that projected in the memo that was sent out a week or two ago.

Most of our amounts did not match. We received an allocation for eight units, and we can only identify two of them that are at the amount we expected and that was projected in the memo. The rest were for amounts considerably lower than expected.

And other than the two that match, we have no idea which allocation is for which ward. Will are hoping that there will be more information other than a group of anonymous Q1 2011 entries in the I/E report. But it did not come down the line today, the 8th.

lajackson wrote:Most of our amounts did not match.

And other than the two that match, we have no idea which allocation is for which ward.

We visited a branch today and saw the amount they were allocated. We were able to match the transaction by the number assigned to the transfer.

The amount the branch received does not match the amount the stake was told they were going to be sent. The amount they received does not match the amount the stake was told they were actually sent.

We now are looking at three different numbers for this branch and its 1Q 2011 budget allocation. We are at somewhat of a loss in deciding how to plan for the financial future of our stake.

ralitaco wrote:This is EXACTLY what I was thinking.
And after reading the rest of the thread, this is what I plan to do UNLESS I am told it is prohibitted.

Well according to the email I got about MLS 3.3.1, what I described IS prohibitted.
the irony is that when I did my send/receive where I got the email, I had just completed my transfers.

Oh well, I can easily change it back. I am looking forward to seeing how the budget will work in 3.3.1.

ralitaco wrote:Oh well, I can easily change it back. I am looking forward to seeing how the budget will work in 3.3.1.

Our stake computer received the message yesterday also. I tried "retransferring" what I did back a week ago and I've ended up with a total mess. The I/E Summary is right but when looking at Summary by sub-category or summary by detail I have what can only be described as a Holy mess! Not sure how undoing what I did before messed everything up but it did. I will be interested to hear how others fare if they did the budget by transfer method.

Sure wish LUS had been a bit more definitive on how to set up our budgets. Earlier would have been a whole lot better than waiting until mid month when most of us have already tried to setting up our budgets.

FFRsqpilot wrote:Our stake computer received the message yesterday also. I tried "retransferring" what I did back a week ago and I've ended up with a total mess. The I/E Summary is right but when looking at Summary by sub-category or summary by detail I have what can only be described as a Holy mess! Not sure how undoing what I did before messed everything up but it did. I will be interested to hear how others fare if they did the budget by transfer method.

When you undo a transfer, it's important that you use the same transaction date, as well as the exact same categories (but in reverse order).