Annual Budget does not equal quarterly stake allocations

The ward budget that is currently in the MLS system does not equal the 4 quarterly allocations from the stake. Currently, the Budget Allowance Summary Report shows that we have spent 105% of our budget but that is because our Annual Budget is much lower than the actual allocations we got from the stake. What is the best procedure to handle this situation? Does the bishop need to choose how to allocate the unassigned funds?

Also, is it proper to transfer funds at the end of the year between sub categories so each subcategory does not show a negative balance at the end of the year or should we just focus on having the total budget figure being above zero by the end of the year?

Thanks,

Tyler Christensen

tylerchristensen wrote:The ward budget that is currently in the MLS system does not equal the 4 quarterly allocations from the stake. Currently, the Budget Allowance Summary Report shows that we have spent 105% of our budget but that is because our Annual Budget is much lower than the actual allocations we got from the stake. What is the best procedure to handle this situation? Does the bishop need to choose how to allocate the unassigned funds?

Throughout the year, the actual budget allocations that come in each quarter may differ (either up or down) from the estimates that were made at the beginning of the year. When these differences are noted, the bishop can make adjustments to the ward budget. It is his decision as to how these new surpluses or deficits are dealt with (although of course he may delegate this responsibility and/or counsel with the Ward Council). These adjustments can be made at any point in the year, but it's generally good to do a reality check each quarter.

Thank you for your reply, it was very helpful. I have a follow-up question though. When the quarterly budget allocations arrive from the stake each quarter, we are supposed to TRANSFER them from the Budget Allocations account into the various budget categories, correct? The money that we allocate then will show up as a TRANSFER in the various budget categories. My confusion is that the Budget Allowance Summary & Detail Reports are taking these transfers and adding to the original budget amount assigned by the ward so the Final Assigned Budget Balance is greater than the original budget because the transfers are greater than the expense amounts. What is the correct way to use the TRANSFER function of MLS.

Thank you,

Tyler Christensen

When CUBS originally transitioned, the instructions included transferring funds to account for budget, however, since the Budget update in February, that practice is no longer the case. Budget Allocation is the only Budget category where budget funds should be housed.... or received, or expensed if any reasons exist for that process.

I've attached the Budget system instructions sent earlier this year for your review.

tylerchristensen wrote:Also, is it proper to transfer funds at the end of the year between sub categories so each subcategory does not show a negative balance at the end of the year or should we just focus on having the total budget figure being above zero by the end of the year?

I don't like this practice as a rule. I think it obscures the Budget process looking back and going forward. It is helpful to know that a certain auxiliary might have over or under spent. It helps in planning for the next year so that our budgets accurately represent what we are doing. However, the absolute best practice (IMHO) is to plan activities.... create a budget for each activity, then budget for planned events in the coming year. I am not a fan of telling an auxiliary that they have $500 to spend this year.... that isn't a budget.. it's an expense account.

To deal with fluctuations in budget and auxillary budget overspending, our
stake uses categories called BU:Misc:Reserve and BU:Misc:CounterBalance.
Here's how they work:

The Reserve fund is estimated at the beginning and a total assigned, say $1,000.
As the actual quarterly budget allocations come in, this reserve is adjusted up or down
so the unassigned budget monies are always zero.

Example: We estimate four quarters of $2,000 each for a total budget of $8,000. When
the first quarter comes in with $2,100 we reallocate the reserve fund to $1,100.
If only $1,900 had come in, we would reallocate the reserve to $900.

The Counterbalance fund is set to zero at the beginning of the year. When an auxillary
goes overbudget, the reserve fund is reduced and the counterbalance fund is increased.

Example:
The Young Women overspend their budget by $300 in Q4. We reallocate reserve fund
from $500 to $200, and reallocate the Counterbalance from $0 to $300. The counterbalance
balance shows the total overspent. If the YW had overspent $600 instead, then the
counterbalance would be set to $600, the reserve set to $0, and another budget category
balance would have to be reduced by $100.

By using a counterbalance account and reserve fund, we avoid messy transfers; confusion
over original budget allocations for auxillaries, and identify exactly how much is being overspent
while still minimizing the affects one auxillary's overspending has on other auxillary's budgets.

- Atticus

tylerchristensen wrote:The ward budget that is currently in the MLS system does not equal the 4 quarterly allocations from the stake. Currently, the Budget Allowance Summary Report shows that we have spent 105% of our budget but that is because our Annual Budget is much lower than the actual allocations we got from the stake. What is the best procedure to handle this situation?

I have 2 suspicions:

First, tying this post to another post of yours, it seems that part of the problem is that you started 2011 with a negative carryover from 2010. Perhaps your bishop was expecting the negative to be wiped clean as it had in previous years with the start of the new year. However, with CUBS, your budget balance is yours alone. Budget accounts are no longer zeroed at the end of the year. Unless your stake has a specific policy to the contrary (and has you physically cut them checks at the end of the year), your ending balance for one year is your starting balance for the next. Therefore, I suspect part of the reason your funds are lower than expected is because you did not factor in the negative carryover from 2010.

As I noted in my response to your other post, the negative carryover balance only appears in the budget allowance summary report and NOT in the budget report.

tylerchristensen wrote:Does the bishop need to choose how to allocate the unassigned funds?

My other suspicion based on this question is that no one has updated the allocated budget in the view/edit budget screen. There is nothing automatic about these amounts. Someone must physically go through and enter allocation amounts for each budget category. The total here is what shows as the total budget amount on your BASR. The difference between your budgeted amount and allocation amount is the unassigned funds. Do you need to? No, probably not, but if you have not allocated 100% of your funds, I can see how you have spent more than you budgeted.

tylerchristensen wrote:Also, is it proper to transfer funds at the end of the year between sub categories so each subcategory does not show a negative balance at the end of the year or should we just focus on having the total budget figure being above zero by the end of the year?

Note that when making budgets, you cannot use both the view/edit budget screen AND transfers from budget allocations. This results in a doubling of the assigned budget (creates both a starting balance plus a positive transfer into the category). My suggestion would be to leave all funds in budget allocations until the end of the year. At the end of the year (and now w/ 3.4.1 and on, before the start of the new year), transfer funds from Budget Allocations to each budget category to zero out the expenses.

The reason for this is budget category balances will carry over year to year. If you want them to start each new year at $0, you must zero them out.

crislapi wrote:My suggestion would be to leave all funds in budget allocations until the end of the year. At the end of the year (and now w/ 3.4.1 and on, before the start of the new year), transfer funds from Budget Allocations to each budget category to zero out the expenses.

There seems to be a discrepancy as to how our ward allocations are posted and what appears to happen in your ward. When we get our quarterly budget allowance it does not arrive in, or go into, the Budget Allocations subcategory. We do not have to make any transfers. When viewing the View/Edit Budget screen, each received (actual) quarterly allowance replaces the estimated (the values we entered) quarterly allowance. The actual allowance replacing the estimated allowance is the only indication that the quarterly allowance has be received/posted. Of course once the actual allowance is received/posted we can no longer edit that field and it is shaded gray. At no time have we had any value in the Budget Allocations subcategory.

crislapi wrote:The reason for this is budget category balances will carry over year to year. If you want them to start each new year at $0, you must zero them out.

If you are speaking from the perspective of a stake clerk and addressing all the units then your statement makes sense. I had to read this statement several times to understand what was being stated. As I understand it and how it worked for my ward is that the ward budget (a sum of all budget subcategory balances) is the only balance that carries over from one fiscal year to the next. All subcategory balances are zeroed. The ward budget allocations to subcategories cannot span fiscal years (for the U.S. the fiscal and the calendar year are the same). There is no carry forward for ward budget subcategories.

If a stake wants the unit budgets to start at zero (0) they must have those units with positive balances cut checks to the stake. Conversely units with a unit budget deficit at year end would have to get a check from the stake to balance the negative carry forward.

jdlessley wrote:When we get our quarterly budget allowance it does not arrive in, or go into, the Budget Allocations subcategory. We do not have to make any transfers.

I'm sure it behaves the same in both our wards. I may just not have explained it well. All allocations are automatically received into the Budget Allocations category and not into any of its subcategories. However, in the Budget Report, Budget Allocations and all its subcategories are blank. This is intentional to avoid confusion. This is where the money sits UNLESS you have transferred it out.

jdlessley wrote:At no time have we had any value in the Budget Allocations subcategory.

In the view/edit budget screen, allocations are not automatically entered in any category including budget allocations. I would suggest NOT giving budget allocations a starting amount, either.

jdlessley wrote:If you are speaking from the perspective of a stake clerk and addressing all the units then your statement makes sense. I had to read this statement several times to understand what was being stated. As I understand it and how it worked for my ward is that the ward budget (a sum of all budget subcategory balances) is the only balance that carries over from one fiscal year to the next. All subcategory balances are zeroed.

I am a stake clerk but this issue is the same in the stake MLS vs the ward MLS. I am fairly certain categories do not automatically zero. At least, they didn't at the beginning of 2011 and I spent time Jan 3 performing transfers to all my subcategories to zero them out. I know because I backdated them all to 2010 but they all reappeared with 3.4.1 because the posting date was 2011.

The budget report will show them all as having starting balances of $0 because the budget report does not carry any information over from previous years. However, in actuality, unless each category is actually zeroed, subcategories can have a running balance you are unaware of. You used to be able to view this by inspecting budget categories with the I&E report. I still wish that functionality had not been removed.

crislapi wrote:The budget report will show them all as having starting balances of $0 because the budget report does not carry any information over from previous years. However, in actuality, unless each category is actually zeroed, subcategories can have a running balance you are unaware of. You used to be able to view this by inspecting budget categories with the I&E report. I still wish that functionality had not been removed.

But since there is no way to see those sub-category balances anymore I don't see any point in making transfers at the end of the year. To me they only confuse the records. We only have two views of the information: the entire ward budget balance (on the summary report) which does include carry-over and the individual sub-category reports which do not. I use the ward level carry-over information, along with my allocation projects, to estimate how much is available for the year and then simply allocate that out to sub-categories in the View/Update Budget screen. I don't worry about sub-category balances. It has worked well and seems to be how the reports are designed to be used.

eblood66 wrote:But since there is no way to see those sub-category balances anymore I don't see any point in making transfers at the end of the year. To me they only confuse the records.

Definitely a valid point. I developed my approach before realizing the budget report would not show carry-over. Also, to me these zeroing transfers clean up the year's account so that when I come back to it, the year is neatly closed out. Just my opinion, not policy. With the functionality currently employed in MLS, it would appear it was designed to be used as you do.

I also tend to be a skeptic (or experienced with MLS releases ). Just because it does not currently cause any issues doesn't mean that in some future release this will not come back to bite you.

crislapi wrote:I am fairly certain categories do not automatically zero. At least, they didn't at the beginning of 2011 and I spent time Jan 3 performing transfers to all my subcategories to zero them out.
...
The budget report will show them all as having starting balances of $0 because the budget report does not carry any information over from previous years. However, in actuality, unless each category is actually zeroed, subcategories can have a running balance you are unaware of.

This did not happen to us as you explain. We had subcategories with positive balances and some with negative balances at year-end 2010. Beginning 2011 all subcategories were zero. We have not had any problems with those previous year-end balances affecting any subcategory balances for 2011. I think the issues you experienced where an effect of actions taken between the CUBS conversion and year-end 2010 and not how budget subcategories are intended to work in CUBS.

crislapi wrote:You used to be able to view this by inspecting budget categories with the I&E report. I still wish that functionality had not been removed.

I think that this functionality doesn't exist because that is not how the CUBS handling of budget subcategories is intended to work.

crislapi,

Thank you for your helpful suggestions. I understand now that the negative carryover balance from the prior year did come from one budget subcategory being overspent the previous year, but at year end the budget subcategory balances were zeroed out and the negative balance was carried over in aggregate to our current year budget, thus, it makes sense that the Budget Allowance Summary Report shows the negative carryover but that this amount does not show up in any one budget subcategory as you noted.

You are also correct in your suspicion that the former finance clerk created a ward budget using the View/Edit Budget screen but then he also would take each quarterly allocation and then transfer the amount received from the stake FROM the Budget Allocations category into various budget subcategories resulting in a "doubling" of the budget.

I now know that we should not need to transfer any money from the Budget Allocations subcategory.

My understanding is that as long as we ensure the total amount of budget expenses does not exceed the 4 quarterly allocations from the stake (minus the negative carryover from the prior year) the ward will not overspend. Next year we will forgo the transfers and jsut create the budget correctly.

Thanks again for all your help!

Tyler Christensen

tylerchristensen wrote:I now know that we should not need to transfer any money from the Budget Allocations subcategory.

...Next year we will forgo the transfers and jsut create the budget correctly.

Just a little follow-up to close up this discussion. A soon to be released patch to MLS will remove the ability to transfer funds within budget categories clarifying once and for all that transfer of budget allocation funds to subcategories whether to create subcategory budgets or to zero them out at the end of the year are not to be done. This means this problem should no longer occur.