Excess Budget funds stake sweep

[russellhltn]

It doesn’t make much sense to me why the sweep only pertains to a portion of what’s remaining when it’s based on 50% of the total allotment…but there it is.

I have zero knowledge about this situation, but I'm been around long enough to witness an interesting interaction between problems and rules in life.

When there's a problem, the natural reaction is to create a rule/law to deal with it. But in trying to precisely deal with the problem, it's easy to create a rule that's overly complex and too hard to implement/enforce.

Clearly, some stakes have amassed quite an amount of funds. Given that youth camps happen every two years, it makes sense that the units will need to carry over "off year" funds to finance the camp years. But to do that exactly gets into the details of how each unit is handling their camp budget, as well as other area approved but less common activities. It's understandable that the church is going to want to find some simple approach that still tackles the bulk of the problem instead of trying to stamp out every single abuse.

The fact that the church has decided on a simplified approach of taking anything over 50% of the stake total allotment from just the stake suggests to me the magnitude of the problem they were seeing.

[cjbeckert]

It turns out that the calculation of the amount that will be swept is not either of the cases that I described.

My conclusion was correct that the 50% is on the total stake budget (including ward budgets); however, the sweep is only looking at how much is remaining in the stake’s budget only (not including the ward budgets).

So, for example, if the total stake allotment for 2023 is $50,000, and the total amount remaining at the end of the year for all stake/ward budgets is $40,000, but the amount in the stake only budget is $10,000, then the amount to be swept will be nothing – since $10,000 is less than $25,000 (50% x $50,000).

It doesn’t make much sense to me why the sweep only pertains to a portion of what’s remaining when it’s based on 50% of the total allotment…but there it is.

As we approach "sweep season", I decided to take another look at our stake numbers since I had been unable to clearly explain how our stake has not been swept the past two years. The only equation that made sense, and worked each time with our numbers, was as greggo describes above. This year I decided to approach it a little different and calculate it as a ratio between the stake budget ending balance and the total deposits (stake + wards) for the year. It takes a different path but arrives at the same destination. Using greggo's example above, if all deposits for the stake + wards was $50,000 and the stake budget ending balance on Dec 31 was $10,000, then the ratio is 0.2 or 20% with no sweep occurring since its under 50%.

To test it out with my stake numbers, I got the stake deposits number from the Year-to-Date Total (in bold) on the bottom of page 3 of the 4th Quarter Local Unit Budget Allowance Report sent out in Oct. For the stake budget balance, I used the LCR-Finance > Overview > Income and Expense Summary page. I left it on Stake Summary and read the Budget End Balance column. Taking the Budget End Balance / YTD deposit total gave me 14.5% for 2024 (thus far), 15.9% for 2023, and 47.4% for 2022. I then tried using the stake + all ward ending balances / YTD deposits (as one GSC response suggested) and got 80.7% for 2024 (thus far), 59.0% for 2023, and 119.0% for 2022. Using the stake ending balance vs total stake allotment to calculate if 50% was exceeded as greggo describes seems to explain why we haven't been swept for the past two years since the sweeps were first implemented and shouldn't be swept for 2024. (For some extra 'gee-whiz' info, I did the same for all our wards/branches to see where they're at with budget balance vs yearly allotment and it really made a couple data points pop out for discussion at the next stake presidency meeting.

[greggo]

Thanks cjbeckert for your insights on this.
It makes me want to do the same analysis on our units - but I'm assuming they're all in "good shape," since I had them transfer their excess to the stake last year.

Has anyone following this topic received a notification this year about transferring excess budget back to headquarters or any sweep happening after the end of the year?
I've heard nothing on my end.

Based on how the sweep was calculated last year, I'm not going to be too worried about carrying over more than the 50% this year.

[rknelson]

Has anyone following this topic received a notification this year about transferring excess budget back to headquarters or any sweep happening after the end of the year?

Same Policy as last year. Notice appears in LCR/Finance on the Dashboard (at least on the stake dashboard)

Budget Retention Limit

Similar to prior years, an automated adjustment will be made in January 2025 for stake accounts with 2024 year-end budget balances exceeding 50 percent of the stake’s total annual budget allocation. Stake presidents are encouraged to work with bishops to review and maintain reasonable budget balances in the wards.

One point that confuses many in this discussion is that "stake's total annual budget allocation" is the sum of stake and all ward/branch units allocations in the stake. And yes, the adjustment is based funds remaining in the stake account and has nothing to do with what is in ward accounts. The stake president works with bishops on ward accounts.