Discontinuation of AMFA categories

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mkmurray
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Discontinuation of AMFA categories

#1

Post by mkmurray »

I saw the new support article on the discontinuation of Authorized Member Financed Activities, which has very clear and detailed instructions regarding what to do prior to Aug 31st.

However, I must say that I was caught off-guard as I must have misunderstood the original announcement. I thought the announcement was that AMFA categories would simply be renamed/repurposed under a "Local" category in addition to the "other offerings" consolidation. But clearly with these new instructions, AMFA categories are going away entirely. That's the part that caught me by surprise and I am curious how I misinterpreted the original announcement.

Thankfully there is a good FAQ at the bottom of the article, because one of my top questions was indeed "Is it appropriate to receive contributions to Budget?" For the handful of months I've been a clerk this year, I've answered that question to my bishopric as "No" based on my understanding and assumptions of official guidance and written policy. The answer spelled out here however is yes, it is appropriate.

I'll be happy to correct my answers to my bishopric this weekend based on this latest info and follow the guidance with fresh perspective. But it has left me scratching my head on if I missed something from the previous documentation, just made a bad assumption, or if this truly is new clarification going forward.
russellhltn
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Re: Discontinuation of AMFA categories

#2

Post by russellhltn »

Interesting. I've always thought the purpose of AMFA was to keep the money separate to make it easy for leaders and auditors to make sure money donated for specific authorized purposes wasn't being rolled into the general budget. However, I can imaging how trying to teach the ins and outs were an ongoing issue.

But in thinking about it, much of the same can be accomplished with dedicated sub-accounts. Failure to have a dedicated camp sub-account is likely to lead to unhappy auditors since then they'd be forced to do their own financial analysis to make sure policy is being followed. I'm also concerned that the change will make it that much easier for poorly trained leaders to just transfer a YM camp excess to the general YM activities. Both approaches require training.
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garystroble
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Re: Discontinuation of AMFA categories

#3

Post by garystroble »

mkmurray wrote: Fri Aug 05, 2022 3:30 pm I saw the new support article on the discontinuation of Authorized Member Financed Activities, which has very clear and detailed instructions regarding what to do prior to Aug 31st.

However, I must say that I was caught off-guard as I must have misunderstood the original announcement. I thought the announcement was that AMFA categories would simply be renamed/repurposed under a "Local" category in addition to the "other offerings" consolidation. But clearly with these new instructions, AMFA categories are going away entirely. That's the part that caught me by surprise and I am curious how I misinterpreted the original announcement.

Thankfully there is a good FAQ at the bottom of the article, because one of my top questions was indeed "Is it appropriate to receive contributions to Budget?" For the handful of months I've been a clerk this year, I've answered that question to my bishopric as "No" based on my understanding and assumptions of official guidance and written policy. The answer spelled out here however is yes, it is appropriate.

I'll be happy to correct my answers to my bishopric this weekend based on this latest info and follow the guidance with fresh perspective. But it has left me scratching my head on if I missed something from the previous documentation, just made a bad assumption, or if this truly is new clarification going forward.
The original bulletin was poorly drafted about this issue, on this I agree. But going forward hopefully things will be clearer.
jdlessley
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Re: Discontinuation of AMFA categories

#4

Post by jdlessley »

The key to this change is that while contributions can be made to a Budget category for things that are authorized in the General Handbook, such as the one annual youth camp, the manner in which these contributions are made result in the contribution not being included on the Official Tax Statement. In other words any contributions made to budget categories will be tagged as not tax advantaged. This has already been done for returns of over payments of expenses and contributions to the FSY budget category. It is just now going to include authorized member contributions for those General Handbook exceptions, such as camps. The instructions state that a contribution to a budget category for an authorized member contribution, such as camps, will be done as in the past for the Other:AMFA. The Other section of the donation slip will be filled out with the purpose, such as YW summer camp, and the deposit either made to the YW budget category or to the unit created subcategory under the Young Women parent budget category.

The issue is how units track the contributions. If the contributions are deposited into a budget parent category, such as Young Men, it will become hard to know who has contributed to say, the YM high adventure camp. This is resolved by creating subcategories to track these contributions just as was done in the Other:AMFA subcategories. I have created a Young Men budget subcategory to manage and track contributions to YM high adventure, just as it was done in Other:AMFA.

Whether or not an auditor will be able to see 'unauthorized' contributions to a budget category is to be seen. I suspect there will be a flag of some sort for them to tell what contributions are not tax advantaged. If units create budget parent subcategories to track these authorized member activities then it will make it easier for the unit to track these contributions as well as the auditor to 'discover' them.

Going forward, I will use the same method in naming these budget subcategories as was done for the Other:AMFA subcategories.
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russellhltn
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Re: Discontinuation of AMFA categories

#5

Post by russellhltn »

Contributions to Other:AMFA never showed up on the tax statement either. So, no change on the tax front. The key statement on the tax form is "The Church provided no goods or services in consideration, in whole or in part, for the contributions detailed below but only intangible religious benefits." That's true of tithing but that's not true with AMFA.

I agree, best practice is to create the same accounts in budget. Such as "YM Camp" as a child to "Young Men". (Although an argument could be made that it should be kept completely separate so the leaders can better track the YM budget during the camp fundraising/spending cycle.)

All in all, while this sounds like a big change, it really seems to be a small one. The bigger issue will be understanding the reports. The ward's total budget might look great, but that's only because the donations are coming in to YW camp and the expenses haven't hit yet. Leaders are going to have to pay attention to the individual categories and not be blinded by a rosy bottom-line total.
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cjbeckert
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Re: Discontinuation of AMFA categories

#6

Post by cjbeckert »

Been clerking off an on for the past 25 years and I had the same understanding. Members do NOT donate to the budget, that's what budget allowance is for. OAMFA was there to keep budget funds and pass through funds separate. My take-away from the letter earlier this year was only the name was changing from Other to Local. So you're not alone there.

My concern now is former OAMFA funds will now be mixed together at year end with roll over budget funds. The Budget Start balance will be a mix of left over budget and former-OAMFA funds. In reality I suppose they always have been rolled over together since the funds are kept in the same unit checking account. One nice thing about the OAMFA categories was it would automatically separate the roll over each year. It appears clerks will now have to do that manually and readd the same amounts to their respective new year's budget so they don't get mixed in when allocating actual budget allowance funds. I can already see some unit leaders thinking they have extra budget funds to allocate to other budget categories. One more thing to be aware of when allocating the new year budget.
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Re: Discontinuation of AMFA categories

#7

Post by russellhltn »

cjbeckert wrote: Sat Aug 06, 2022 5:50 pm My concern now is former OAMFA funds will now be mixed together at year end with roll over budget funds.
Good point. Unless it's changed so budget funds stays in it's category at year end instead of going to the parent, I can't see how it could be any other way. Without hardcoding the new camp categories, I don't think it's possible to treat the camps differently then the other line items.

Another issue is that it was well known that "Other" needed to be zeroed out and couldn't have a lingering balance. It will be interesting to see if that changes.

Yet another concern is what the stake sees. If one ward is desperately in need of funds and the budget of another appears to be flush, they may ask for a transfer. But it could be an artificially high balance due to the camp categories.
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sbradshaw
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Re: Discontinuation of AMFA categories

#8

Post by sbradshaw »

Shouldn't funds from members for a camp or conference be used for that camp or conference, so there would be nothing to roll over at the end of the year?
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cjbeckert
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Re: Discontinuation of AMFA categories

#9

Post by cjbeckert »

sbradshaw wrote: Mon Aug 08, 2022 10:15 am Shouldn't funds from members for a camp or conference be used for that camp or conference, so there would be nothing to roll over at the end of the year?
In theory, yes, and it usually is. But if all the funds aren't used, the surplus must stay in the same category and is only available for use for the same purpose the next year.
eblood66
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Re: Discontinuation of AMFA categories

#10

Post by eblood66 »

sbradshaw wrote: Mon Aug 08, 2022 10:15 am Shouldn't funds from members for a camp or conference be used for that camp or conference, so there would be nothing to roll over at the end of the year?
Generally true but if you have fundraiser that is more successful than expected you might raise more than is needed for that year and legitimately have something that needs to be rolled over.

However, more often I've seen leaders who want to cover the entire cost of the camp using fundraisers and member payments so the member payments are set too high. It takes training to make sure they understand that budget should be used first, not last.
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