Filing Best Practices

I am always interested in hearing how other stakes file their financial records. For each month, I have a sturdy file folder with clasps on the top of both sides when opened. On the right, I attach expense batches (report, followed by, for each expense, check stub, reimbursement form, and receipt). On the left, I attach the consolidated financial statement, followed by deposit batches, and then, on top, the Unit Financial Statement. I then have a single folder for the year in which I place everything else that might be worth saving.

I would sure like to hear about others' systems.

In a ward we used an envelope filing system. We had a #10 envelope labeled (Batch/Date) for every week of the year then we had other #10 envelopes labeled (Expenses/Month) for each month. Each week we would just pull out the labeled Batch envelope and put tithing receipts and other batch paperwork in there. Our reimbursement requests were third of a page, check size, so when reciepts were attached, they could be folded and stuffed nicely into an envelope. all the envelopes could be stored nice and neat vertically across the width of a file cabnet drawer. In addition we just had hanging folders for monthly statements and any other records. In the stake we use full size reimbursement request forms and have no batches so I just have hanging file folder folders for each months expenses, then one for deposits, monthly statements and then audit records and such.

wrigjef wrote:In a ward we used an envelope filing system. We had a #10 envelope labeled (Batch/Date) for every week of the year then we had other #10 envelopes labeled (Expenses/Month) for each month. Each week we would just pull out the labeled Batch envelope and put tithing receipts and other batch paperwork in there.

When I was a clerk, we used the envelopes (usually the ones left over from the last change in bishops) for the donations, but used monthly folders for the expenses.

Then once we closed out the year (tithing reports turned in, etc) we'd toss everything into a tithing envelope box, label it and put a "destroy on" date on the side. (And destroy the appropriate box from storage).

The goal is simple to file and simple to find. Not necessarily super organized. The computer is the source of most of the reports. The paperwork is there for audits and to support what was entered into the computer.

As an auditor, I have a growing dislike of the envelope system for expenses. The system that seem to provide me the quickest and easiest access to their finances is a folder containing all the UFS in order, another containing the CFS, another for expenses from Jan-Jun and another for Jul-Dec. For expenses, the expense report is on top with all paperwork for the checks on the report stapled beneath in order. The expenses are filed in order in the corresponding folder. A separate folder for transmission reports.

When I come to audit, I grab the 6 UFS and the appropriate expense folder. If everything has been filed correctly, the expenses are a breeze to find and audit without having to dig through multiple folders. Refiling is also simple - close the folder and hang it back in the drawer in the correct spot.

crislapi wrote:As an auditor, I have a growing dislike of the envelope system for expenses. The system that seem to provide me the quickest and easiest access to their finances is a folder containing all the UFS in order, another containing the CFS, another for expenses from Jan-Jun and another for Jul-Sep. For expenses, the expense report is on top with all paperwork for the checks on the report stapled beneath in order. The expenses are filed in order in the corresponding folder. A separate folder for transmission reports.

When I come to audit, I grab the 6 UFS and the appropriate expense folder. If everything has been filed correctly, the expenses are a breeze to find and audit without having to dig through multiple folders. Refiling is also simple - close the folder and hang it back in the drawer in the correct spot.

That's very close to the system I use in my stake, for all the same reasons. So much of the audit uses the Unit Financial Statements as the starting point that it is very handy to have them in a separate folder.

But our second expense folder goes all the way to Dec -- we don't just do Jul-Sep and take the rest of the year off, as you apparently do (sorry for the joke about your typo, but I couldn't resist).

We follow a similar system as instructed by our Stake. There is a hanging folder for each month of the year. Inside the hanging folder, there is a manilla folder for each week (deposits) and a single folder for the month's Expenses. I put the UFS and the verified Bishop's Storehouse orders in front of the manilla folders for each month.

A prior clerk took to stapling each weekly deposit paperwork together (used to be a challenge for packet size but after 2 boundary changes we don't have that problem anymore). I don't like that as well because the Auditor makes us un-staple it for him, but it helps keep everything together (and my financial clerk is fine with it so it is not worth rocking the boat to me). Some wards in our stake put the deposit slips in an old tithing envelope to hold them together.

For Expenses, we staple the receipt behind the Reimbursement request form and the check stub in front. As mentioned in another post, I recently began grouping the reimbursement paperwork with each Expense report that the Bishop signs because we were always having to paw through the paperwork to match them up for the auditor. So now, for every batch of checks cut, the Expense Report is attached to (and filed with) all the expense information listed on the report.

Based on the retention policies it looks like it would be convenient to file the year end contribution reports separately from everything else since those must be kept for 5 years and everything else for only 3. Two envelopes banded together should do the trick.

aclawson wrote:Based on the retention policies it looks like it would be convenient to file the year end contribution reports separately from everything else since those must be kept for 5 years and everything else for only 3. Two envelopes banded together should do the trick.

For the US, all financial data is only required to be retained for three (3) years. There is no five (5) year retention requirement in the US. Each country's retention time period may vary. In Canada it is five (5) years for financial records.

That's what I had remembered, but I verified with the information in the wiki: https://tech.lds.org/wiki/Record_retention which directs you to Use and Retention of Records and Reports—Ward or Branch (United States and Canada) (last updated in 2008).

Everything says "Keep for the current year and either the previous three years (U.S.) or the previous five years (Canada). Then destroy." except for "Official Receipt Valid for Income Tax Purposes (MLS)" which reads "Keep copies for the current year and the previous five years. Then destroy them."

Is there a letter or policy posted somewhere that replaces this? It seems pretty clear to me.

aclawson wrote:That's what I had remembered, but I verified with the information in the wiki: https://tech.lds.org/wiki/Record_retention which directs you to Use and Retention of Records and Reports—Ward or Branch (United States and Canada) (last updated in 2008).

Everything says "Keep for the current year and either the previous three years (U.S.) or the previous five years (Canada). Then destroy." except for "Official Receipt Valid for Income Tax Purposes (MLS)" which reads "Keep copies for the current year and the previous five years. Then destroy them."

Is there a letter or policy posted somewhere that replaces this? It seems pretty clear to me.

The point of confusion is that you are referring to a Canada-only report. The "Official Receipt Valid for Income Tax Purposes (MLS)" is an official Canada government form. In MLS it is selected under Donor Statements by choosing "Official Receipt for Income Tax (Canada)"'; when you print it from MLS, you'll see the title on the form is "Official Receipt Valid for Income Tax Purposes".

Since it applies only to Canada, the Record Retention policy simply lists 5 years. Since you are in the US, that report does not apply to you.

aclawson wrote:Everything says "Keep for the current year and either the previous three years (U.S.) or the previous five years (Canada). Then destroy." except for "Official Receipt Valid for Income Tax Purposes (MLS)" which reads "Keep copies for the current year and the previous five years. Then destroy them."

Is there a letter or policy posted somewhere that replaces this? It seems pretty clear to me.

I'm pretty sure that the "Official Receipt Valid for Income Tax Purposes" is not used in the US. At least in the test version of MLS, this document is listed as "Official Receipt for Income Tax (Canada)" on the drop down on the Print Donor Statement screen. If it's a Canada only form then it makes sense that it gives a 5 year retention policy since that is the retention for all other documents for Canada.

The document I've always used at year end is the "Annual Charitable Cash Contributions" which is the first entry on the policy document and they are only kept for two years at most and only if you can't give it to the donor.

aebrown wrote:The "Official Receipt Valid for Income Tax Purposes (MLS)" is an official Canada government form.

eblood66 wrote:I'm pretty sure that the "Official Receipt Valid for Income Tax Purposes" is not used in the US. At least in the test version of MLS, this document is listed as "Official Receipt for Income Tax (Canada)"...

Yea, that's a gotcha type thing. Unfortunately one must "know", look up, or cross reference the names of forms and documents when reading the Use and Retention of Records and Reports form for information that combines two nations' information in one document.

I'm looking for more best practices. I've been an auditor for about 7 months. I audit 3 wards. Each ward does things differently. When I ask them about it, they say "I'm just doing what the last guy did." I mentioned it to the stake presidency counselor in charge of audits, but nothing happened.

It would be nice to implement throughout the stake some best practices for both storage and for the check request and approval form. Please send in more comments.

jessehanks wrote:I'm looking for more best practices. I've been an auditor for about 7 months. I audit 3 wards. Each ward does things differently. When I ask them about it, they say "I'm just doing what the last guy did." I mentioned it to the stake presidency counselor in charge of audits, but nothing happened.

The financial audit is not tasked to audit uniformity in record keep practices beyond those prescribed by the Church in "[evaluating] how funds are gathered, spent, and recorded." (Ward or Branch Financial Audit—United States and Canada, Part 1: Instructions). Each member called to a Church position should magnify their calling by understanding and following the Church's established policies and procedures for their area of stewardship. They are entitled to receive revelation on matters not prescribed by the Church in fulfulling this stewardship.

jessehanks wrote:It would be nice to implement throughout the stake some best practices for both storage and for the check request and approval form.

Standardizing the practices of units for financial record keeping beyond those prescribed by the Church could, in my opinion, unnecessrily restrict an individual's right to revelation in fulfilling their stewardship.

While as a financial auditor for nine audit cycles I found units and individuals exercising their right to revelation in their calling stewardship in varying ways. While it was difficult for me as an auditor at times, I saw the value of this principle. I found it within my stewardship as an auditor to identify and recommend practices that would be of value to those I audited. It was then up to them to decide what to do with those recommendations in magnifying their calling.

Can the stake establish practices for record storage or for payment request forms? Most certainly. But I have found that record keeping practices beyond those required by the Church are a matter of personal preference. Imposing one person's personal preference on others, in my opinion, unnecessarily restricts another's right to excercise agency and to magnify their calling in a manner comensurate with their talents and abilities and as inspired of God.