Budget Allocation disbursement methods

Discuss questions around local unit policies for budgeting, reconciling, etc. This forum should not contain specific financial or membership information.
allenjpl
Member
Posts: 320
Joined: Wed Apr 08, 2009 8:26 am
Location: Las Vegas, NV, USA

Re: Budget Allocation disbursement methods

Postby allenjpl » Sun Jan 05, 2014 12:41 am

russellhltn wrote:Well, if the ward can see the percentage, it seems to me to it might invite comparison on if the stake it taking too much. If the ward just gets a check, it's less visible. That's not to say it can't be calculated - it's just less visible.

A percentage is also much easier to compare between wards. An amount would have to compensate for a number of factors to decide if it was equal or not.


It's less visible only if the ward doesn't read their messages. A month before the new quarter begins, the wards get a message showing them what their budget allocation is, how much/what percentage the stake is withholding from each category, and the amount that they will receive. Even if the stake takes all of it and sends them a check, the ward still knows exactly how much their ward has contributed to the stake's budget.

User avatar
aebrown
Community Administrator
Posts: 15123
Joined: Tue Nov 27, 2007 8:48 pm
Location: Sandy, Utah

Re: Budget Allocation disbursement methods

Postby aebrown » Sun Jan 05, 2014 6:08 am

atticusewig wrote:I wonder why the percentage method is the only option, and why a Stake President can't just put in a flat amount ? And if that option was added, would it make any difference ? Also, if there were an option to place a hold on a budget allocations being deposited until quarterly reports are received, would Stake Presidents be more likely to move away from paper checks ?

My stake uses percentages, which is the same for each ward. The formula already accounts for youth, Activity Days/Cub Scouts, and YSA. My stake president sees no need for further tinkering. We haven't changed the percentage at all since CUBS came out. The wards know what is coming (based on their quarterly reports). It's simple and fair. If we had a boundary change (we haven't had one since CUBS came out) we would have to make adjustments for one or two quarters, but we would probably do that manually by checks.

Having an option for a flat amount may seem simple, but it would actually add complexity. What happens if the total of the flat amounts exceeds the total allocation, what happens? And it may well require tweaking each quarter.

And the other virtue of using percentages is that if a ward fails to submit their quarterly report, they get hit hard by having zero budget allocation for the next quarter. That's a big incentive to get your report submitted!

daveywest
Member
Posts: 94
Joined: Mon Dec 28, 2009 2:19 pm
Location: Mesquite, Nevada, United States

Re: Budget Allocation disbursement methods

Postby daveywest » Sun Jan 05, 2014 11:45 am

My stake has adopted a use it or loose it policy when it comes to budget allocations.

When CUBS was first implemented, my stake president wanted to fully fund wards - especially youth programs. It was decided to take 25% of the sacrament meeting funds from each unit for the stake. This kept extra funds in units with higher youth populations.

Several of our wards are not fully using their funds, so those units now have 50% of the sacrament meeting funds skimmed off by the stake. As those units spend their surplus, we intend to restore funding.

I believe it's important to use the percentage allocations. It's impossible to manualy keep up with shifting populations. The percentage allocations rewards the units who are suceeding in putting bodies in seats. Active participation is the goal.

lajackson
Community Moderators
Posts: 9644
Joined: Mon Mar 17, 2008 9:27 pm
Location: US

Re: Budget Allocation disbursement methods

Postby lajackson » Mon Jan 06, 2014 10:11 am

daveywest wrote:My stake has adopted a use it or loose it policy when it comes to budget allocations.

We usually let them keep it if the amount is not excessive. Our challenge is the ward that adopted a "use it and don't worry about the allocation" policy. That took some adjustments and undoing.

daveywest
Member
Posts: 94
Joined: Mon Dec 28, 2009 2:19 pm
Location: Mesquite, Nevada, United States

Re: Budget Allocation disbursement methods

Postby daveywest » Mon Jan 06, 2014 11:17 am

I should probally clarify. When I say, "loose it," I mean loose future deposits. In my stake, units that build up a reserve of unspent budget funds will receive reduced allocations until they begin spending at acceptable levels. I've referred more than one bishop to the parable of the talents, and encouraged them to use the funds provided to bless the lives of the members.

While we haven't set hard and fast rules, a unit that has a budget reserve exceeding the allocations from the prior two quarters gets some additional attention. I've seen attendance levels drop in units that aren't using their budget funds. It's amazing how important ward activities are to sacrament meeting attendance.

User avatar
mlh78
Member
Posts: 244
Joined: Mon Dec 14, 2009 1:03 pm
Location: Texas, USA

Re: Budget Allocation disbursement methods

Postby mlh78 » Mon Jan 06, 2014 11:24 am

Looks like I am in the minority here. In our stake we use checks. At the end of each year, we estimate the total amount of money coming into the stake the next year (i.e., the sum of the estimated ward allocations), determine how much money the stake needs to survive, and then allocate the rest among the wards using the basic allocation formulas, with some tweaking to take into account equities not reflected in the formulas. The stake absorbs the difference between the estimates and actuals.

The virtues:

- Wards know EXACTLY how much budget they will receive in the coming year.
- Wards do not have to take time away from more important things to fuss with projections, and the problems that arise when they are wrong.
- Wards do not have to retool their budgets each quarter.

It takes very little time for the stake to administer this. We write a handful of checks 3x a year (we pay 2Q and 3Q together); not that big of a deal. We never have to tinker with allocation percentages to arrive at equitable results for the units in our stake.

In my view - based on 7 years of experience at the stake level - this system is far superior to the default system. All the wards strongly support this method as well.

Others on this board feel equally as strong the other way. I don't see where they are coming from though.

User avatar
mlh78
Member
Posts: 244
Joined: Mon Dec 14, 2009 1:03 pm
Location: Texas, USA

Re: Budget Allocation disbursement methods

Postby mlh78 » Mon Jan 06, 2014 11:28 am

lajackson wrote:
daveywest wrote:My stake has adopted a use it or loose it policy when it comes to budget allocations.

We usually let them keep it if the amount is not excessive. Our challenge is the ward that adopted a "use it and don't worry about the allocation" policy. That took some adjustments and undoing.


We are on the check system (see above). Our presidency is sensitive about wards saving up to fund activities that really are beyond the scope of acceptable church activities. To avoid this, we allow wards to roll over $1,000 of budget funds from one year to the next. We recapture the rest by reducing their next budget check.

User avatar
aebrown
Community Administrator
Posts: 15123
Joined: Tue Nov 27, 2007 8:48 pm
Location: Sandy, Utah

Re: Budget Allocation disbursement methods

Postby aebrown » Mon Jan 06, 2014 11:49 am

mlh78 wrote:In my view - based on 7 years of experience at the stake level - this system is far superior to the default system. All the wards strongly support this method as well.

Others on this board feel equally as strong the other way. I don't see where they are coming from though.

It's great that the system allows the flexibility for your stake to administer the budget allocation this way. But to help you understand where we "are coming from," I offer the following:

The way I see it, your system has one virtue -- the wards know exactly what their budget will be. The other two "virtues" you mentioned are simply natural consequences of that one virtue. But regardless of how you count the virtues, here are the virtues of our system (we set the percentages once when CUBS came out and haven't touched them since):
  • Far simpler administration at the stake level -- no calculations are necessary, and no checks to write and deliver. Writing an extra 30 checks or so per year is not the worst thing in the world, but it's hardly a trivial cost in time and effort.
  • Funds arrive at the ward level as soon as possible -- no waiting for the stake to do calculations, cut, and deliver checks.
  • Each ward's budget allocation is reliably related to their activity levels. I know that your stake does this on an annual basis, but using the default allocation method makes adjustments based on activity levels more responsive -- changes in activity level have effects within about 3 months, instead of in 12-15 months.
  • A specific case of the previous point is that a ward that fails to submit its quarterly report will feel significant pain very promptly.
I guess I don't see the burden on wards to make projections to be significant at all. At least in our stake, most of the wards are fairly stable in their size and activity levels. Even the one ward that is growing grows at a fairly constant rate. So the projections are easy to make and fairly accurate.

But in any case, I'm certainly not trying to argue that anyone should adopt a particular system. Each stake should do what works well for them. I just wanted to provide some details as to why we like our system.


Return to “Local Unit Finance”

Who is online

Users browsing this forum: No registered users and 2 guests