1 ministry, three incomes, two funds, one expense

[PVCC]

The board hasn't been getting a clear picture of what is needed to run one of the ministries and I think we may need to add an expense account perhaps. We have a children's Bible club called AWANA. Unrestricted and Restricted money goes to operate the program. Registration money comes in as well. So multiple sources of income are used.

Current setup:
40-1110-111 Awana Fund "Checking" - Asset
40-3255-111 Awana Fund - Equity
40-4255-111 Awana Fund - Income - donor restricted
40-4855-111 Awana Fund - income- (the previous bookkeeper labeled this income, but I think it should read "release" since it is under "Release from Restrictions" - the word income seems confusing)
6225 - Awana Expense

We are currently using the simple method setup to transfer money between funds with one common Transfer to Fund and one common Transfer from Fund account.

All restricted offerings and registration money is placed in the Awana Fund. (The registration money gets counted with offerings by the counters and is labeled as restricted – all we see are “offerings” the registration fees collected are not documented) When expenses occur money is first taken from restricted money, when that is used up the board would like to use general fund money. However, money was continually taken from the 40-1110-111 Awana Fund "Checking" running the fund into a negative balance – knowing we would supplement the program with offerings. Today we removed the negative balance from the AWANA fund by doing a transfer from the general fund. It seems all that does is bring the AWANA Fund out of the red. Expenses aren't posted to the general fund, since the AWANA Fund expense closes (I think that is the right term) to the AWANA Fund. (Checks have been cut and ongoing for months) It seems we need an expense account that closes to General Fund for the General Fund unrestricted expense to be accurate, but that wouldn't tell what the cost would be to run the program if two expense accounts are needed . . . would we create a custom report perhaps?? Is there a better way to show the total expense of running a program if two expense accounts are needed? (Currently everything just channels through the AWANA FUND) I hope you understand my question/dilemma . . . we are new users to Powerchurch.

How can we best document the financial picture of this program – three sources of income, only one expense to the church, restricted and unrestricted money is used to operate it. Could the incomes could be separated to show what is truly needed from general offerings for budgeting purposes - is that a matter of labeling the entry appropriately? Is there a report that could add the three soucres of income aside from the old calculator? Does setup need to be modified, or change needed on data entry level – or perhaps both?

[JohnDMeyers]

First, I want to make the comment that you will not be able to combine income and associated expenses "near" each other on any standard report. This is something we all had to get used to. The income will always appear on top of the Income-and-Expense report, and the expenses will be at the bottom.

In other words, there is no way to show "income for AWANA" and "expenses for AWANA" in some close proximity on a standard report.

40-4855-111 is correctly labeled as a "release" income account. It serves a specific purpose, and it should always show a negative number on your reports. It appears all the accounts you listed are setup correctly.

All of your expense accounts should "close to" unrestricted net assets (usually 40-3110-000). Only the restricted income accounts should "close to" temporarily restricted net assets. You may want to verify your expense accounts.

Every time you pay an expense using restricted income, you need to make two entries. One shows a CR to checking and DB to expense, and the other shows the release, which will DB the release income and CR the general release. Here is an example:

Spend $50 of restricted money:
-----
CR 40-1110-000 checking $50
DB 40-5410-000 some expense $50

DB 40-4855-111 Awana release $50 <--- 4855 "closes to" temporarily restricted net assets
CR 40-4999-000 general release $50 <--- 4999 "closes to" unrestricted net assets
-----

The second part of this transaction removes money from the restriction. You will see the difference when you look at your Balance Sheet before and after making this transaction. Your restricted income (40-4255-111) will NOT decrease. It will be a positive number. 40-4855-111 will be negative and eventually equal exactly the same amount as the positive income in 40-4255-111, at which time the restriction will be used up, and the two will add to zero, although they will always appear on your Income-and-expense report until you close the last month in your year. At that time, they will "close to" their equity accounts.

If you have $150 restricted, and you make three expense / release transactions of $50 shown above, here's a snap shot of your income and expense reports:

1st expense / release transaction of $50 is made:
---40-4255-111 Temp restriction Awana $150
---40-4855-111 Release Awana -$50

2nd expense / release transaction of $50 is made:
---40-4255-111 Temp restriction Awana $150
---40-4855-111 Release Awana -$100

3rd expense / release transaction of $50 is made:
---40-4255-111 Temp restriction Awana $150
---40-4855-111 Release Awana -$150

Close last month of your year
---40-4255-111 Temp restriction Awana $0
---40-4855-111 Release Awana $0

Where did the $150 go? It went to 40-4999-000 general release. In other words, you were taking money from the restricted income and "releasing" it into the unrestricted income, $50 at a time.

1st expense / release transaction of $50 is made:
40-4999-000 general release $50

2nd expense / release transaction of $50 is made:
40-4999-000 general release $100

3rd expense / release transaction of $50 is made:
40-4999-000 general release $150

Close last month of your year
40-4999-000 general release $0