Moving restricted funds to another fund

[Sbhar]

I have been using Power Church since 2014, and love it. Our church has a couple of donor restricted funds, and a lot of temporarily restricted funds. Our vestry members don't like the reports because the restricted funds are on the same report as the budgeted funds and it affects the bottom line. I have thought about moving all restricted funds to their own fund (in our case, it would be 03; 02 is our plant fund). After backing up, I have taken the initial steps of transferring the equity funds and their assets (some will still be shared with 01) and used the transfer accounts correctly. Both new balance sheets are in balance and are correct. I have made the appropriate changes to the contribution fund codes and changed the income accounts to reflect 03, but am concerned about the connection between all of the equity, income and release accounts. Will I need to rename the restricted funds in accounting setup in order to get them to recognize the new 03 accounts? And is there a simpler, less complex way to do this? Thanks so much for your help.

[NeilZ]

I have been using Power Church since 2014, and love it. Our church has a couple of donor restricted funds, and a lot of temporarily restricted funds. Our vestry members don't like the reports because the restricted funds are on the same report as the budgeted funds and it affects the bottom line. I have thought about moving all restricted funds to their own fund (in our case, it would be 03; 02 is our plant fund). After backing up, I have taken the initial steps of transferring the equity funds and their assets (some will still be shared with 01) and used the transfer accounts correctly. Both new balance sheets are in balance and are correct. I have made the appropriate changes to the contribution fund codes and changed the income accounts to reflect 03, but am concerned about the connection between all of the equity, income and release accounts. Will I need to rename the restricted funds in accounting setup in order to get them to recognize the new 03 accounts? And is there a simpler, less complex way to do this? Thanks so much for your help.

The problem is that the if you have expenditures in Fund 01, you can't release funds to cover those expenses. You'll have to release funds in O3 which moves them to the Unrestricted Net Assets in 03, which you'll then have to transfer to fund 01.

There is a whole lot of audit trail lost in all that.

[Sbhar]

I appreciate your insight. I hadn't thought of it that way. I realize that setting up a designated expense account for restricted funds is optional in PC, but I believe that I set up an expense account for each of our restricted funds. We don't normally spend restricted funds on our fund 01 items (payroll, other budgeted expenses). I don't think that would be a common problem - maybe something that could happen occasionally. I do see a potential issue with fund availability, especially in the summer months. We may occasionally need to borrow from ourselves, transfer funds and set up a liability if our general fund 01 was short.

I was thinking that with the shared assets, the credit would be to the 03 portion of the asset, the release would be to the 03 unrestricted net assets, and the expense would be the associated 03 fund expense, which closes to the 03 unrestricted net assets - and zeroing it out. Am I missing something? Would this not work? I realize that it may be a little more complicated for our financial assistant, but I would love to simplify the reports for our vestry. Thanks again for your insight.

[NeilZ]

I appreciate your insight. I hadn't thought of it that way. I realize that setting up a designated expense account for restricted funds is optional in PC, but I believe that I set up an expense account for each of our restricted funds. We don't normally spend restricted funds on our fund 01 items (payroll, other budgeted expenses). I don't think that would be a common problem - maybe something that could happen occasionally. I do see a potential issue with fund availability, especially in the summer months. We may occasionally need to borrow from ourselves, transfer funds and set up a liability if our general fund 01 was short.

I was thinking that with the shared assets, the credit would be to the 03 portion of the asset, the release would be to the 03 unrestricted net assets, and the expense would be the associated 03 fund expense, which closes to the 03 unrestricted net assets - and zeroing it out. Am I missing something? Would this not work? I realize that it may be a little more complicated for our financial assistant, but I would love to simplify the reports for our vestry. Thanks again for your insight.

FWIW ... based on what you just said, you really don't need to create any restricted funds in Accounting Fund 03, as the entire Accounting Fund is restricted. Just create income accounts in fund 03 using the same names as you currently have for the restrictions in fund 01.

If that's the case, then if you need to 'borrow from yourself' all you'd have to do is transfer from checking to checking. You could just CRedit the 03 fund checking, and DeBit the 01 fund checking, but using a transfer account to do this gives a very visible entry on the Income & Expense report. This type of transaction is shown on page 235 of the Powerchurch 12 manual.