Release Unrestricted Funds

[LQ Helper]

Our treasurer retired and left the area and I have been assigned the job of taking over with PowerChurch. I know that in the past, say from 2011 to 2014 they used the release of restricted funds function when they were paying an invoice with restricted funds but in the last couple of years he posted directly to the 4800 account and did not bother to post to an expense account and release those funds.

My question now is if I can just start using the release restricted funds function and post to the proper expense account as it was meant to be done without there being any problems or repercussions down the road at the end of the year?

Oh my, stepping in when others leave is hard.

[NeilZ]

Our treasurer retired and left the area and I have been assigned the job of taking over with PowerChurch. I know that in the past, say from 2011 to 2014 they used the release of restricted funds function when they were paying an invoice with restricted funds but in the last couple of years he posted directly to the 4800 account and did not bother to post to an expense account and release those funds.

My question now is if I can just start using the release restricted funds function and post to the proper expense account as it was meant to be done without there being any problems or repercussions down the road at the end of the year?

Oh my, stepping in when others leave is hard.

It is OK to create a transaction in Funds Accounting if when an invoice was created and posted and the funds were not released. Basically you would open the Enter Transactions function in Funds Accounting, click on the Release Restricted Funds button, and release the funds from the restricted account. You would just enter the reason why it was being released separately from the invoice, and then post it.

This method should NOT be the one relied on for day-to-day operations, only on those occasions when it was forgotten.

I would just start doing the releases with the invoices as it should be done. If he was doing the releases afterwards using the method described above, you shouldn't see any issues.

[LQ Helper]

Maybe I didn't explain it correctly. He never released any restricted funds. He only used the Accounting module to post everything (manual checks, offerings, EFT's from our bank account and any anything else that needed to be posted to the G/L). When he posted a payment, he used manual checks entries and posted it to the fund account to be released (say building fund 4825) and cash but never released funds so nothing ever went through a/c 4999. We only use manual checks because he did not want to use any other module.

I just wanted to make sure that it would be fine to just start from now to begin releasing funds when manual checks are paid?

Another question please.

What happens to the budget when an expense is paid out of restricted funds? My budget i,s say 100.00 for music equipment but there is a restricted donation for 1000.00. When I post it to music exp the budget is blown out of the water by overspending of 900.00. How can I maintain a proper budget and yet post expenses to it when those are restricted fund I am using? Is there a secret I don't know about to accomplish this while maintaining the church budget?

I'm so sorry about all this but I am in a pickle and starting to panic that I will never be able to fulfill this appointment.

Thanks

Sandy

[NeilZ]

Maybe I didn't explain it correctly. He never released any restricted funds. He only used the Accounting module to post everything (manual checks, offerings, EFT's from our bank account and any anything else that needed to be posted to the G/L). When he posted a payment, he used manual checks entries and posted it to the fund account to be released (say building fund 4825) and cash but never released funds so nothing ever went through a/c 4999. We only use manual checks because he did not want to use any other module.

I just wanted to make sure that it would be fine to just start from now to begin releasing funds when manual checks are paid?

What a mess. You can start now, and do it correctly from now on. That said, I would make sure that the restricted fund accounts were properly adjusted to actually lower the amounts in those funds. Also, I'd start using the normal Invoicing and check printing. It removes a manual step, it would eliminate any issues with written numbers on checks, and it looks more professional.

Another question please.

What happens to the budget when an expense is paid out of restricted funds? My budget i,s say 100.00 for music equipment but there is a restricted donation for 1000.00. When I post it to music exp the budget is blown out of the water by overspending of 900.00. How can I maintain a proper budget and yet post expenses to it when those are restricted fund I am using? Is there a secret I don't know about to accomplish this while maintaining the church budget?

You won't be able to maintain any budget when you have that type of interference with the way the church and its ministries are funded. The only way around it is to ban such directed giving. If someone wants to give a donation, they should allow the church board decide where the money needs to be spent. It sounds harsh, but I've seen too many churches where someone with cash spends it all in one area, yet the building needs repair, or the board is reducing the secretaries hours because normal offerings is not covering those costs.

I'm so sorry about all this but I am in a pickle and starting to panic that I will never be able to fulfill this appointment.

Thanks

Sandy

I wouldn't worry too much, just start doing it right now, and next year it will look a lot better. However, you're never going to get a balanced budget for the reasons I pointed out above, however, its not within your power to do anything about it, the church board has to own that problem.

[LQ Helper]

Thank you so much for the help and encouragement. I think I will be able to make it through and start next year all fresh & clean. I may need more advice when I start to close the year but for now I'm fine.

[NeilZ]

Thank you so much for the help and encouragement. I think I will be able to make it through and start next year all fresh & clean. I may need more advice when I start to close the year but for now I'm fine.

One thing I would do, make sure you have PCPlus setup to have 18 months open at any one time. There is no need to close months unless you have to, and no need to 'close a year' as there used to be.