Budget - Auxiliary Units over budget

Discuss questions around local unit policies for budgeting, reconciling, etc. This forum should not contain specific financial or membership information.
cchang
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Budget - Auxiliary Units over budget

Postby cchang » Wed Apr 25, 2018 2:06 pm

Do most of your Wards use a Quarterly or Annual budget when letting your Auxiliary units know their budgets? We do a quarterly budget since that is the amount we receive each quarter from Headquarters. How have you handled situations where the unit goes over their quarterly budget? Do you dip into next quarter's budget or simply deny anything above their quarterly budget. I know we can't deny purchases from the budget but how do you try to restrain them from going over their budgets?

davesudweeks
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Re: Budget - Auxiliary Units over budget

Postby davesudweeks » Wed Apr 25, 2018 3:30 pm

For our ward, the bishop approves an annual budget for the auxiliaries (as the ward clerk, I propose one to him in December and he approves or adjusts it). We use the amount for the first quarter of the year as the budgeted amount for each quarter and then adjust as new quarter numbers come in. We keep an amount in a contingency line in the budget to cover variations qtr to qtr (this way an organization's budgets do not change just because the quarterly amount changes slightly).

We provide each organization with their budget status about 6 times per year (or whenever they ask) and encourage them to live within their budget as counseled by the church. If they have special items, they discuss with the bishop who sometimes covers those things from the contingency fund. If an individual organization goes "over budget" it isn't a problem as long as the ward budget does not go negative. We always see some organizations overspend a little and others who don't spend everything they have so it all works out OK for us. Organizations are encouraged to follow the practices as instructed in the handbook which suggest that activities could be and should be at little or no cost.

Remember that a budget is really an educated guess of what one thinks they will spend in the coming year so until we are perfect, we will not be perfect at estimating future funding needs. If the entire ward budget is going negative, the bishop may have to have a discussion in ward council. Per the church financial policies, all expenses are supposed to be pre-approved so if folks are just spending money without clearing it in advance with the bishop they may need to change.

russellhltn
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Re: Budget - Auxiliary Units over budget

Postby russellhltn » Wed Apr 25, 2018 4:33 pm

I'd also suggest reading Handbook 1: 14.7.1 about how budgets are to be derived. It should be based on a plan for what will be done and not just using last year's numbers. Obviously, sometimes things turn out a bit more expensive than expected, but if they're sticking to the plan it shouldn't go wildly over budget.
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cchang
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Re: Budget - Auxiliary Units over budget

Postby cchang » Thu Apr 26, 2018 8:41 am

russellhltn wrote:I'd also suggest reading Handbook 1: 14.7.1 about how budgets are to be derived. It should be based on a plan for what will be done and not just using last year's numbers. Obviously, sometimes things turn out a bit more expensive than expected, but if they're sticking to the plan it shouldn't go wildly over budget.


The problem is poor budgeting planning. They tell us they plan to budget this amount for an activity but when they go and purchase the items, it turns out to be $30-$40 more than what they expected. By that time, it's already too late and we have to reimburse them for the overage.

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Re: Budget - Auxiliary Units over budget

Postby russellhltn » Thu Apr 26, 2018 11:03 am

At some point there needs to be consequences for the overage. If it keeps happening, then the bishop may need to tell them to adjust their upcoming activities.

I can assure you there are consequences if the ward as a whole goes over their allocation.

You may want to consult with the stake clerk who is responsible for training ward clerks. He would also have the ear of the stake presidency who could give some gentle pointers to the bishop.
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cchang
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Re: Budget - Auxiliary Units over budget

Postby cchang » Fri Apr 27, 2018 7:35 am

russellhltn wrote:At some point there needs to be consequences for the overage.

Have you ever had to deny anyone reimbursement yourself or did you leave that up to the Bishop? Or were there some questionable expense that they should have looked at to mitigate going over. For example, one of the auxiliary units decided to print invitation flyers in color but could have done it in black and white which was a $60 expense. Have you had to suggest alternative options or did you leave it up to the unit Presidents to spend however they wanted as long as they stayed within their quarterly budget?

davesudweeks
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Re: Budget - Auxiliary Units over budget

Postby davesudweeks » Fri Apr 27, 2018 10:10 am

The clerk should be providing organizations with periodic budget reports so they can manage their budgets, but the bishop/BP has ultimate responsibility for the unit funds. If a member incurred an expense related to their calling, I would not suggest going back and denying it, though a ward council discussion on the importance of not wasting the Lord's money might be appropriate.

Expenses are supposed to be approved in advance by the bishop so if they are checking with the bishop first, there should be no surprises. For a few years our primary organization had a fairly expensive Christmas activity with the children, but it was communicated in advance (activity plan, costs, etc.), the bishop approved it, and it was planned into the ward budget.

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Re: Budget - Auxiliary Units over budget

Postby drepouille » Fri Apr 27, 2018 10:52 am

Absolutely correct. The bishop must approve the expense before hand, and the clerk must ensure that the organization leader and the bishop are aware of the remaining budget category balance. I've seen too many cases where funds are expended by members, and reimbursements are made to the members without anyone checking the balance. If this leads to a negative balance in an Other:AMFA subcategory, it is an audit exception. If this leads to the overall ward budget balance going negative, you will receive immediate attention from Church HQ and your stake.

Wouldn't you check your personal checking account balance before you write a check or use your debit card?
Dana Repouille, Plattsmouth, Nebraska

russellhltn
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Re: Budget - Auxiliary Units over budget

Postby russellhltn » Fri Apr 27, 2018 11:09 am

cchang wrote:Have you ever had to deny anyone reimbursement yourself or did you leave that up to the Bishop?

I've never been put into that position, but I'd leave it to the bishop.

See Handbook 2: 13.2.8, second paragraph. "Expenditures must be approved by the stake presidency or bishopric before they are incurred." It says "incurred", not just reimbursed. So, there should be no surprises.

Again, my suggestion would be to take those funds from a future activity of that group.

Just as a caution, I have seen members who consider a "talking to" an acceptable cost of being able to spend what they want. So, if the only consequence is a minor scolding, you may find things getting out of control. At the worst, the bishop does have the power to remove that person from their position, but I've never seen it come to that. A setting down of rules that the expense must be approved before incurred or there would be no reimbursement would come first.
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russellhltn
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Re: Budget - Auxiliary Units over budget

Postby russellhltn » Fri Apr 27, 2018 11:12 am

drepouille wrote:The bishop must approve the expense before hand, and the clerk must ensure that the organization leader and the bishop are aware of the remaining budget category balance. I've seen too many cases where funds are expended by members, and reimbursements are made to the members without anyone checking the balance.

I've seen reimbursement forms that require the signature of the appropriate auxiliary leader. For example, if this is for a RS activity, then the RS president has to approve it before it goes to the bishop. You wouldn't want someone put in charge of an activity to drain that organization's budget.
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