Internal Record of Purchase - what do you use them for?

Even when we reconciled, I never used the Internal Records of Purchase. I am just curious what others use them for. Mine usually go from the Stake Presidents hand to my hand to a file and not touched.

wrigjef wrote:Even when we reconciled, I never used the Internal Records of Purchase. I am just curious what others use them for. Mine usually go from the Stake Presidents hand to my hand to a file and not touched.

Back before CUBS, it was very important to enter the transactions from the Internal Records of Purchased into MLS; otherwise the Budget balance would be wrong. But now all such charges (primarily Distribution Services) are downloaded automatically into MLS, so that is no longer a concern. But they are still important:

• You may want to change the category of such purchases from Budget: Distribution Center Charges to another category (e.g., Budget:Young Women for YW medallions).
• Be aware that not all charges are correct; I've had a couple of cases where a ward charged the stake, or even someone from another stake entirely charged something to our stake. So you need to double check them against MLS and/or the UFS.
• Finally, all expenses need to be approved by the bishop or stake president. Many people believe (and I completely agree) that this includes DC charges as well.

aebrown wrote: Finally, all expenses need to be improved by the bishop or stake president. Many people believe (and I completely agree) that this includes DC charges as well.

I assume you meant approved, not improved. This actually came up during my mid-year audit last year. The stake auditor said I needed to have a paper trail with approvals for all expenses, including the DC orders.

The other issue that arises is you need to know who made the order. We used to get charged occasionally for things a family or individual ordered.

idjeeper2 wrote:I assume you meant approved, not improved.

Yep, the fingers were going faster than the brain. Thanks for the clarification -- I edited my post to avoid confusion.

idjeeper2 wrote:This actually came up during my mid-year audit last year. The stake auditor said I needed to have a paper trail with approvals for all expenses, including the DC orders.

Not all auditors make this interpretation, but the audit instructions do refer simply to "expenses" (not checks), so it's appropriate to include DC charges.

idjeeper2 wrote:The other issue that arises is you need to know who made the order. We used to get charged occasionally for things a family or individual ordered.

The record of purchase usually says who placed the order, but sometimes it's just a first name, so unfortunately this can require a bit of detective work to find out just who made the purchase.

idjeeper2 wrote:This actually came up during my mid-year audit last year. The stake auditor said I needed to have a paper trail with approvals for all expenses, including the DC orders.

An approval from the bishop only requires his signature on a minimum of one of the documents as stated in the audit checklist.

16. Did the bishop approve all payments?
Look at the payment documents. Make sure the bishop has approved the payments by signing at least one of the following: invoice, bill, receipt, or payment request. The bishop’s signature on the MLS Detail Expense Report is adequate proof of his approval.

For a DC order there are only two documents the bishop can sign, the payment request and the invoice. The invoice is an after-the-fact approval. Some see this as not adequate management of the ward's funds. I am one of those. As our ward finance clerk I am pushing to make sure all DC orders are preceded by a payment request.

Unfortunately, the new LDS.org site makes managing this a bit more difficult. For the old DC site, the Ward had a specific Login for Ward purchases. We controlled it by not giving the password to anyone outside of the Bishopric. Leaders could purchase online, but would then have to submit a reimbursement request which received the bishop's signature. Otherwise they would have to go through the Clerk and I would clear it with the Bishop before ordering. Now we are seeing ward leaders order DC items and charging them to the ward without any knowledge by the bishopric until after the expense invoice shows up in the mail.

I've been trying to come up with a recommendation to the bishop without going draconian about it - anyone have anything that seems to work well in your units?

jdlessley wrote:The invoice is an after-the-fact approval. Some see this as not adequate management of the ward's funds. I am one of those. As our ward finance clerk I am pushing to make sure all DC orders are preceded by a payment request.

That's certainly a choice the bishop could make, and if that works for your ward, then I'm happy for you. I have a different opinion, and our stake president and (as far as I know) all the bishops in our stake are in agreement -- approval after the fact is just fine. Ward leaders have been given a budget and discretion to spend funds within that budget. It really doesn't matter much whether someone has purchased an item with their own money and then seeks reimbursement, or if they have charged the ward directly through Distribution Services. If they seek reimbursement, we're almost always going to reimburse them, so either way they have incurred the cost and the ward will pay.

davesudweeks wrote:Unfortunately, the new LDS.org site makes managing this a bit more difficult. For the old DC site, the Ward had a specific Login for Ward purchases. We controlled it by not giving the password to anyone outside of the Bishopric. Leaders could purchase online, but would then have to submit a reimbursement request which received the bishop's signature. Otherwise they would have to go through the Clerk and I would clear it with the Bishop before ordering. Now we are seeing ward leaders order DC items and charging them to the ward without any knowledge by the bishopric until after the expense invoice shows up in the mail.

I've been trying to come up with a recommendation to the bishop without going draconian about it - anyone have anything that seems to work well in your units?

For our stake, how the new store.lds.org works really doesn't make much difference. We have multiple Distribution Centers here in the Salt Lake Valley, so people are more likely to drop by a DC and pick up an item than to order it online. So controlling access to online purchases wouldn't help much.

In our stake, we charge DC orders to the auxiliary or other appropriate subcategory. As long as we can track the expense back to the correct organization, we just don't worry about having knowledge ahead of time. When the expense comes in, if there is any question, we follow up with the organization leader, but otherwise, we simply charge the expense to the organization and the bishop or stake president reviews the paperwork and approves the expense. As I said above, we don't consider it to be substantially different from a request for reimbursement. We give organization leaders a budget and expect them to manage that budget; exactly what technique they use to expend those approved funds is a minor detail.

Of course, I'm not saying that our way is the only way to do this -- I'm just sharing what works for us.

Since we are in Oklahoma, everything that comes from the DC is online unless someone happens to take a trip out West. To me, the handbook is very clear that purchases are to be approved in advance by the Bishop. However, my advice to the Bishopric so far is to ask the Ward Leaders to at least keep the Bishopric member they work with posted on significant spending. Unfortunately, we have had a couple of instances were fairly large purchases were made without any member of the Bishopric knowing about it until after the fact. In most of those cases, had the Bishop known beforehand, he would have counseled the Leader to not incur the expense.

Obviously it is not reasonable to ask them to "clear" each individual purchase in advance for small purchases that happen as a normal part of the organization's activities (especially when they are within budget) but for significant items I believe it is. If they are planning to a calendar like they are supposed to, the bishopric member should be aware of activities that will likey incurr some expense anyway.

I do agree that having the Bishop "sign" a document before each expense is incurred is definately not in the spirit of the matter, as long as he reviews and approves each expense at some point. For our Ward, the Clerks do not generate a check without the Bishop's signature on the form (we have occasionally had to obtain verbal authorization over the telephone when the bishop was out of town and an urgent need came up - he would then sign the check request when he got back).

davesudweeks wrote:Now we are seeing ward leaders order DC items and charging them to the ward without any knowledge by the bishopric until after the expense invoice shows up in the mail.

I was under the impression that only members of the bishopric and clerks (including assistant clerks) could bill the ward at http://store.lds.org. What other ward leaders have this privilege?

subtlecoolness wrote:I was under the impression that only members of the bishopric and clerks (including assistant clerks) could bill the ward at http://store.lds.org. What other ward leaders have this privilege?

In our ward only the bishop and clerk can bill the ward using the website. I don't know if there is a problem but no assistant clerk or either counselor can can bill an order to the ward using the website. We can place telephone orders, however, and have them billed to the ward. I don't know if any other ward leader can even do it by phone. We have never tried.

As I am the ward clerk, I have no way to directly verify if another leader can use store.lds.org and bill to the unit. We have had a couple of auxiliary manual orders billed to the ward - I had assumed there were online purchases. It is possible these were purchases via telephone. The next time this happens, I will query the specific organization the manual purchases are for and try to determine the cause.

Thanks for the tip!

jdlessley wrote:In our ward only the bishop and clerk can bill the ward using the website. I don't know if there is a problem but no assistant clerk or either counselor can can bill an order to the ward using the website. We can place telephone orders, however, and have them billed to the ward. I don't know if any other ward leader can even do it by phone. We have never tried.

I'm an assistant clerk over finances, and I have no problem. When I'm in the checkout screen, I change the payment method to "Bill to xxx Ward." The shipping then pops up with the Bishop's information.

allenjpl wrote:I'm an assistant clerk over finances, and I have no problem. When I'm in the checkout screen, I change the payment method to "Bill to xxx Ward." The shipping then pops up with the Bishop's information.

Well I guess we were having a temporary problem for our ward. Before this evening whenever I or a bishopric counselor signed in using our individual LDS Accounts and tried to do the same as you describe the "Place Your Order" button was deactivated (greyed out). When checking again just this evening it worked. So now I guess I really don't know who else in ward leadership really can place an on-line order.

Well this is eye opening. From this discussion one could say our stake is rather tame as far as finances go, and I am actually very glad. My original question was about internal records of purchase. Way back when I was first called (pre-pre Cubs) I did enter them in until I realized that they were only telephone charges on a reimbursed account. Everything was a wash so I stopped entering them and always balanced.

I guess we are doing distribution center orders differently. For the most part DC orders always go against a curriculum order budget and if not the come under the administration budget for the Bishop (on the ward level). I can see how it may be different in special circumstances but so far I have been lucky. In my entire time in the Stake I can only remember a couple of DC orders and they have gone against the administration budget.

As to the original question of what to do with "Internal Records of Purchase": my bishop receives them in the mail. He hands them to me (ward clerk) and I fill out the same disbursement authorization form that a member would use to submit a reimbursement request. I note on the form what budget category should be used. My bishop signs the form.

When I or my financial clerk are processing disbursement forms and writing checks, and we come to one with an "Internal Record of Purchase" instead of a receipt, we don't write a check, but we re-categorize the existing expense that we find in Budget: Distribution Center. The "Internal Record of Purchase" and attached disbursement authorization form are then filed along with the rest of the check stubs.

subtlecoolness wrote:As to the original question of what to do with "Internal Records of Purchase": my bishop receives them in the mail. He hands them to me (ward clerk) and I fill out the same disbursement authorization form that a member would use to submit a reimbursement request. I note on the form what budget category should be used. My bishop signs the form.

When I or my financial clerk are processing disbursement forms and writing checks, and we come to one with an "Internal Record of Purchase" instead of a receipt, we don't write a check, but we re-categorize the existing expense that we find in Budget: Distribution Center. The "Internal Record of Purchase" and attached disbursement authorization form are then filed along with the rest of the check stubs.

That's a great idea, but how does it go with your financial audit? Our auditor does not want to see the DC charges mixed in with the checks and makes us separate everything out for him if they are. Our audit already usually takes about 6 hours so I'm reluctant to do something that will slow him down further...

davesudweeks wrote:That's a great idea, but how does it go with your financial audit? Our auditor does not want to see the DC charges mixed in with the checks and makes us separate everything out for him if they are.

That's entirely a preference. Personally, if my auditor complained about that (but no auditor ever has in my 30+ audits), I would consider that to be an interesting opinion and ignore it. It has nothing to do with the official audit procedures.

I wouldn't change my filing system for an auditor, but I'm happy to find any document the auditor asks for -- I can do that faster than the auditor, so there is no slowdown.

davesudweeks wrote:Our audit already usually takes about 6 hours so I'm reluctant to do something that will slow him down further...

Wow. I guess it's great that the auditor is thorough, but that seems wildly excessive. I've never had an audit go longer than 2.5 hours, and most are done in less than 2 (and at the stake level, we're often done in about 1 hour).

davesudweeks wrote:Our audit already usually takes about 6 hours so I'm reluctant to do something that will slow him down further...

Say what? I've been the finance clerk for several years, and never had one take more than about an hour and a half. What is the auditor doing that takes him an hour per month he reviews?

For those that have not experienced it yet, you will see a huge difference in the audit time when you switch over to the new online system. All the units in our stake did it online this past audit and we had the auditor visit me in the stake offices first so we could get familiar with the process. In the weeks leading up to the audit, the audit committee instructed them to use the spirit of discression but to really focus on the instructions printed for the new audit system as well as the messages displayed during the audit. This really helped because in the past we have had auditors that wanted to use the handbook of instructions, the complete standard works and every CPA instruction known to man as guidelines for an audit. During the audit what we found that what worked well and really streamlined things was for the auditor to log in and run through the questions part while sitting at the computer and I sat off to the side and answered and organized documents. When it came time for the document review, we switched places and I would hand him documents which he reviewed off to the side then he would look over my shoulder while I input the data as instructed. Got through the audit in a fraction of the normal time. Bit of a paradyme shift having the auditor turn over control of the keyboard and some auditors had a problem initially but after they saw how much time it saved having the clerk type and do any needed calculations while the auditor reviewed documents and had the final say of what ultimately was submitted, they were fine with it.

davesudweeks wrote:Our audit already usually takes about 6 hours so I'm reluctant to do something that will slow him down further...

Even pre-CUBS with a lot of issues to investigate I rarely took more than four hours. And that included the interview time.

Since several of you have asked:
He re-checks every single line item on every single Bishop's storehouse order. (A couple of audits ago, he argued with us for 30 minutes that we verified the Storehouse orders wrong because we entered a checkmark at each item to signify we checked the quantities rather then entering the quantities instead. I had to enter quantities in every order form that had been checked before he would finish the audit.)
He checks every single blank on every single reimbursement request to match to the reimbursement.
He reviews every bank statement with the same level of detail.
This is in addition to all the other audit items he has to check.

Most of the time, the rest of us just sit there and wait for him, handing him the files he wants and then putting them away when he is finished.

davesudweeks wrote:Since several of you have asked:
He re-checks every single line item on every single Bishop's storehouse order. (A couple of audits ago, he argued with us for 30 minutes that we verified the Storehouse orders wrong because we entered a checkmark at each item to signify we checked the quantities rather then entering the quantities instead. I had to enter quantities in every order form that had been checked before he would finish the audit.)
He checks every single blank on every single reimbursement request to match to the reimbursement.
He reviews every bank statement with the same level of detail.
This is in addition to all the other audit items he has to check.

Most of the time, the rest of us just sit there and wait for him, handing him the files he wants and then putting them away when he is finished.

I would ask your bishop to send some feedback up to the Stake Audit Committee chair. This auditor needs some training on his role as an auditor and the scope of an audit.

We already went that route, after the arguement on how to check Storehouse Orders. It has gotten a little better, but still takes way too long, in my opinion.