Carrying "Other" balances from year to year

Our Stake youth trek occurs every 4 years. We accrue monies from our annual budgeting process to spread the Stakes share of the cost evenly over the 4-year time frame. It turns into a pretty sizeable amount of money, given the BLM charges to the church for access to public lands (double meaning very much intended). Much better, in my opinion, to annualize and then accrue these costs into a separate category. Ditto our multi-stake youth conferences, every two years. All the monies reside in SLC or an investment bank somewhere, the categories are merely an accounting method for keeping our heads straight with the funds. No audit has ever said a thing about this accrual and it has been, to the best of my knowledge, a multi-year accounting method. 'Storage' and 'accrual' are very different concepts. KQ

crislapi wrote:The other account is not a place for long term storage of funds. In my opinion, if the other account is carrying funds year to year, it is not being used correctly.

I think a bit more clarification is necessary. The Other category can certainly carry funds from one year to the next. And it most certainly happens when there are sub-categories in which funds are collected in part of one year and in part of the following year for an event occurring in the latter year. Summer camps are one example. I even audited a unit that had been collecting funds for over 2 years for a Philmont experience.

The issue is the collection of funds without a specified purpose. Interest accrued and credited to the Other account poses a unique challenge in that its purpose is not specified. It has not been collected from individuals or from fund-raising activities. But it can be allocated a purpose by placing it in a sub-category that typically experiences a deficit. It would be no different than an anonymous donation. For some of the wards for which I have first hand experience, most summer camp sub-categories are challenged for donations to meet the expense(s). This is a good place for such funds. A unit with no such deficiencies may then have a problem in dealing with these unspecified funds.

The problem with Other:AMFA sub-categories for events or activities that occur each year is the accounting of the donations and the expenses. The accounting can be difficult if the same Other:AMFA sub-category is used each year and only MLS is used to track the donations and expenses. My solution involves recycling sub-categories for successive years and the use of a spreadsheet to track donations for an individual's share of the expense. This year's donations for Scout Camp are placed in the Other:AMFA:2011 Scout Camp sub-category. The Other:2010 Scout Camp (pre-CUBS designation) sub-category is renamed and reused for the 2012 camp, but only after the sub-category is zeroed for the 2010 donations and expenses.

We had a regional aiditor trainer visit our audit committee meeting last week. Following passing information he recieves when he goes to Salt Lake, he explained the other categorty and in our stake we were told that the other category is not designed to be used to carry funds over from one year to another. I know it can and and possibly will happen, but clerks in our stake are being instructed not to have a ballance forward in other.

wrigjef wrote:Following passing information he recieves when he goes to Salt Lake, he explained the other categorty and in our stake we were told that the other category is not designed to be used to carry funds over from one year to another. I know it can and and possibly will happen, but clerks in our stake are being instructed not to have a ballance forward in other.

Was the specific question regarding contributions to summer camps addressed? So in your stake a young man cannot contribute to next year's summer camp until January 1st of the year of the summer camp? What was the recommended procedure to accommodate such a situation?

wrigjef wrote:We had a regional aiditor trainer visit our audit committee meeting last week. Following passing information he recieves when he goes to Salt Lake, he explained the other categorty and in our stake we were told that the other category is not designed to be used to carry funds over from one year to another. I know it can and and possibly will happen, but clerks in our stake are being instructed not to have a ballance forward in other.

Say you have an approved AMFA activity in January, like a temple trip. Under the prohibition described above, the collection can't begin until Jan. 1, lest the AMFA account "carry over funds." Even though the funds are clearly identified for a specific purpose, the local policy forbids it. In such a case, what objective does the policy fulfill? If the only reason to not carry over a balance is so that your balances don't carry over, I think it would be a good idea to think carefully about the policy.

In my expeience, as long as the AMFA funds have a clearly designated purpose that is within the policies outlined by the handbook, there is no need to worry about zeroing the account out at year end. If you know of something in the handbook, financial training, or audit instructions that differs, I'd be glad to reconsider. That being said, if the Stake President or Bishop in their respective roles as guardians of the Lord's funds want to clear the accounts at year end, that's their call. But nothing I've seen tells me that it is an audit requirement.

crislapi wrote:
Why not? Are prisoners not allowed to donate to the missionary fund? Ward missionary funds can be moved around by the stake to help other wards.

Ward Missionary funds are used to support missionaries serving from that ward. Any funds in excess of the ward's needs should be sent to the stake by cutting the stake a check. Although prisoners could certainly donate to the WM account, since no missionaries would be serving from the unit, all such funds would be excess. But the funds get moved by the ward, and it doesn't make sense to cut the stake a check for one cent.

wrigjef wrote:we were told that the other category is not designed to be used to carry funds over from one year to another. I know it can and and possibly will happen, but clerks in our stake are being instructed not to have a ballance forward in other.

Could he have possibly been saying that the Other account isn't supposed to carry forward a balance from one event to the next? In the case of a summer camp, I can understand that the balance should be zeroed out from one year's camp to the next, but that's not the same as saying it has to be zero at the end of the calendar year.

aebrown wrote:And when you get your June statement sometime later this month you'll find that some additional interest was credited to Other, so you still won't have a zero balance for the end of the audit period. There's no way to win on this one!

Rather then relying on the CUFS, I checked the MLS balance on the Income and Expense report.

jdlessley wrote:Was the specific question regarding contributions to summer camps addressed? So in your stake a young man cannot contribute to next year's summer camp until January 1st of the year of the summer camp? What was the recommended procedure to accommodate such a situation?

I'm asking the audit committee in my stake to have auditors review any AMFA accounts with balances for recent transactions. Accounts that haven't had any donations or expenses but retain balances in an audit period will fail the test of being used promptly and for an intended purpose.

As to the example of a stake taking funds for multi-stake activities: I fail to see why you would be collecting funds from another stake for an event 4 years out. Stakes retain unused funds for future budget expenses, so an individual stake keeping a reserve (in their own funds) for a future expected expense shouldn't be a problem. I would personally feel very uneasy about transfering large amounts of Budget (i.e. consecrated) funds to an AMFA account each year for this type of activity until actual expenses and allocations have been established.

This seems like a huge audit nightmare explaining that you just always cut a big check to another stake every year with out any documentation of the actual expense.

wrigjef wrote:We had a regional aiditor trainer visit our audit committee meeting last week. Following passing information he recieves when he goes to Salt Lake, he explained the other categorty and in our stake we were told that the other category is not designed to be used to carry funds over from one year to another. I know it can and and possibly will happen, but clerks in our stake are being instructed not to have a ballance forward in other.

I understand the basic principle being taught here. But I don't think this auditor comprehends all the valid uses for the Other account if he's making such a categorical statement. Consider, for example, a stake that is the agent stake for a multi-stake recreational property. According to everything I've read about the Other account, the annual assessment funds received from the other stakes should be deposited in a subcategory of the Other account. And the expenses will not exactly balance the income in any year. So there will always be a balance carried forward.

I understand why the Audit Department is separate from all other departments. But all too often we hear of new "policies" that come only from the Audit Department that we have never heard of from the Finance Department. It seems to me the role of the auditor is to determine compliance with established policy, not to make new policy. The line of communication on new policies to wards and stakes should go through priesthood channels before the audit period, not through the Audit Department after the audit period. In any case, what a regional auditor trainer said in a different region is interesting, but will not affect the way my stake operates.

NOTE: I moved the post I quoted above, and the conversation that ensued, to a new thread, since it really had little to do with the thread it was posted to (Bank Interest Posted to the Other Category).

daveywest wrote:As to the example of a stake taking funds for multi-stake activities: I fail to see why you would be collecting funds from another stake for an event 4 years out. Stakes retain unused funds for future budget expenses, so an individual stake keeping a reserve (in their own funds) for a future expected expense shouldn't be a problem. I would personally feel very uneasy about transfering large amounts of Budget (i.e. consecrated) funds to an AMFA account each year for this type of activity until actual expenses and allocations have been established.

As I mentioned earlier under another heading, our stake accrues funds over a 4 year period in an AMFA account for a youth trek. It is done on a 4-year basis which allows every young man and young woman the opportunity to go 1 time. The trek is quite expensive when you consider feeding 150+ youth and adult leaders for almost a week, the period clothing which they make but the stake furnishes plans and materials for, rental of handcarts, etc., etc. Accrual over time is much easier to budget for than taking a lump sum from the stake budget account every 4 years. It could be done that way but what difference does it really make?

Ditto our multi-stake youth conference. I never said nor implied that we as a stake were an accrual account holder for various stakes. They pay their own freight as we do, in their own manner. We will cut a check for whichever stake hosts the conference when the conference is over. How that concept got read in I have no clue. KQ

We have a very similar process in our stake, our 4 year cycle includes a couple of smaller Youth Conferences, or conferences that are held locally, one that is held at a university campus which is a mid-tier expense, and one LARGE activity, for us it's a Nauvoo trip. We keep back enough money for the stake to cover these expenses over 4 years, but we keep it in the budget rather than moving the money to an Other account expense.

Back to what started this in the first place, an advantage of keeping an accrual account in AMFA: Other is that it does pay interest! Which is what led down this rabbit hole to begin. On further thought, after suggesting that the 'Other' column was an artifact of the old system, it does offer a way to take non-tax deductible monies and segregate them for IRS purposes. That is really the only benefit to them as I see it unless they are used for accrual purposes. KQ

Quicky wrote:Back to what started this in the first place, an advantage of keeping an accrual account in AMFA: Other is that it does pay interest! Which is what led down this rabbit hole to begin. On further thought, after suggesting that the 'Other' column was an artifact of the old system, it does offer a way to take non-tax deductible monies and segregate them for IRS purposes. That is really the only benefit to them as I see it unless they are used for accrual purposes. KQ

Which is a good point, but makes me wonder what is so special about Other and Ward Missionary anymore. They have always accrued interest because we carried actual balances in those categories. Since the advent of CUBS, we now carry an actual balance in Budget as well. Why aren't we accruing interest in Budget now?

Agreed, I hadn't thought about that Interest until now.

aebrown wrote:Since the advent of CUBS, we now carry an actual balance in Budget as well. Why aren't we accruing interest in Budget now?

I guess the difference is where the funds come from. With Ward Missionary and Other, it comes from the local members. With Budget, it comes from the church. One could look at it as budget funds are allocated as "real" funds, but belong to the church.

jdlessley wrote:Was the specific question regarding contributions to summer camps addressed? So in your stake a young man cannot contribute to next year's summer camp until January 1st of the year of the summer camp? What was the recommended procedure to accommodate such a situation?

No the specific question was not addressed by the regional auditor trainer. However if a ward in our stake faced this particular circumstance, a ward clerk would request that the member hang on to the donation until after the beginning of the year. I personally do not ever see this happening, paying for a summer camp 6 months in advance.

allenjpl wrote:Say you have an approved AMFA activity in January, like a temple trip. Under the prohibition described above, the collection can't begin until Jan. 1, lest the AMFA account "carry over funds." Even though the funds are clearly identified for a specific purpose, the local policy forbids it. In such a case, what objective does the policy fulfill? If the only reason to not carry over a balance is so that your balances don't carry over, I think it would be a good idea to think carefully about the policy.

In my expeience, as long as the AMFA funds have a clearly designated purpose that is within the policies outlined by the handbook, there is no need to worry about zeroing the account out at year end. If you know of something in the handbook, financial training, or audit instructions that differs, I'd be glad to reconsider. That being said, if the Stake President or Bishop in their respective roles as guardians of the Lord's funds want to clear the accounts at year end, that's their call. But nothing I've seen tells me that it is an audit requirement.

The auditor Trainer did not say the carrying other balances over was an audit exception (he did not say they weren't either) but he did say that we should take into account the spirit and common sense in using the category appropriately. The temple trip example would never be an issue for us but if there were a legitimate AMFA in January, we would certainly let it carry-over and happen. In such a case, as stake assistant for finances my focus would be on wards clearly identifying and tracking funds so we can have clean year end audits.

RussellHltn wrote:Could he have possibly been saying that the Other account isn't supposed to carry forward a balance from one event to the next? In the case of a summer camp, I can understand that the balance should be zeroed out from one year's camp to the next, but that's not the same as saying it has to be zero at the end of the calendar year.

Certainly the clear direction was that these accounts were not designed to have funds carry from one event to another (one years camp should be paid for before funds are donated for the next one. In reality how many cases are there where AMFA's need to stay on the books over a year end. Most (in our stake) are geared for the summer. As stated in another response, the spirit of discretion and guidance of a priesthood leader always come into play, but we in this stake are highly motivated to have completely zeroed out AMFA balances and clean year end audits whenever possible.