correcting restricted funds entry

[bjsbrown65]

In August, wrote a check for $1500 to missions and only meant to release $300 but released the entire $1500. Do I reverse transaction back that far. If so, how does this affect reconciliation. If not, how do I make a journal entry. Thanks.

[NeilZ]

In August, wrote a check for $1500 to missions and only meant to release $300 but released the entire $1500. Do I reverse transaction back that far. If so, how does this affect reconciliation. If not, how do I make a journal entry. Thanks.

As long as you haven't closed the month (never a good idea since you can have 18 months open), you can void the check in Accounts Payable (you always want to start your corrections in the module where the transaction originated), then create a Manual Check using the same check number, and using the correct release amount. Add as much information in the notes area to provide a good audit trail.

Post both the void & the manual check to Paid Items File (this corrects the AP module), then post in Funds Accounting (this updates the accounts: puts money back under restriction, etc).

When you go to reconcile, you will see a VOID entry under DEPOSITS, as well as the manual check with the existing check number under checks. Simply check off both the void and the manual check and you're done.

[bjsbrown65]

when I go to reconcile - are you speaking of a current reconcile or the original. thanks.

[NeilZ]

when I go to reconcile - are you speaking of a current reconcile or the original. thanks.

The VOID will show up in the current, along with the new check as not being cleared. As I always recommend, until you feel comfortable with doing something that you haven't tried before, take a backup just before doing it to make sure what you do is what you expect to see.

[bjsbrown65]

Thanks. Also have a donor restricted memorial fund in the contributions module. The contribution was posted giving credit to the donor and later posted to funds accounting. How is this released since no check is written. Is it set up incorrectly.

[NeilZ]

Thanks. Also have a donor restricted memorial fund in the contributions module. The contribution was posted giving credit to the donor and later posted to funds accounting. How is this released since no check is written. Is it set up incorrectly.

Where is this fund posted in Funds Accounting? The Contributions Module really does not care about 'restrictions', that's a Funds Accounting function. The Memorial Fund in Contributions should be setup to post to a restricted income account if the contributions are indeed restricted to purchases of Memorial items.

You release this restricted fund in the same way as any other restricted fund, when a check is issued for a purchase.

Let me know if this is the type of answer you're looking for.

[bjsbrown65]

I must not have it set up correctly. Memorials is setup as a donor temporarily restricted income account. My thinking was since it was designated to a specific memorial, it had to be released. Under maintain list of contribution funds it debits bank account and credits income account. On the chart of accounts, the "designated as a release fund" is checked. Since this goes to the bank, no checks will be written so I guess there will be nothing to release. How should I have set it up? Please describe specifics. Thanks again.

[NeilZ]

I must not have it set up correctly. Memorials is setup as a donor temporarily restricted income account. My thinking was since it was designated to a specific memorial, it had to be released. Under maintain list of contribution funds it debits bank account and credits income account. On the chart of accounts, the "designated as a release fund" is checked. Since this goes to the bank, no checks will be written so I guess there will be nothing to release. How should I have set it up? Please describe specifics. Thanks again.

Let me verify: the income account that is credited is a temporarily restricted account, and shows up on the COA as such. I also take it that there is no specific Memorial Fund at your church, and this was just an 'in memory of John Smith' type of donation with no other restriction. In this case, if you have your standard tithes & offerings contributions fund setup to use 'designations', you could have just created a designation of in memory of John Smith, assigned it to that contribution in your primary tithes & offerings.

The contributor would have seen the designation on their contribution statement (if you use full details on the statement), and you wouldn't have to worry about anything else. Keep this in mind for any such future contributions.

However, to get you out of this current dilemma:

Since, again I'm assuming, that the funds will be used in the general operating fund, all you need to do is go into Funds Accounting, create a transaction, enter a Reference, and the Transaction description, then click on the Release Restricted Funds button. You should see the restricted funds you setup listed in the popup. Select that fund, enter the amount that was given you want to clear out of the restriction, and click OK.

The system will create the transaction to release the funds to general use. Just post that.

You're then good to go.


I had to do something along these lines a few months ago, as I had forgotten to move funds from a restricted account that hold funds from the sale of the old parsonage. Its now used to pay the Housing Allowance of the minister. I simply did what I described above, with full explanations of why it was being done in all the note blocks, and posted.

The system moved the funds properly.

Hope this helps.

[bjsbrown65]

You are correct in your verification of the situation; however, I have the contribution module set up as you describe. Are you saying, there was no need for the Memorials donor temporarily restricted income account on the COA. Also when you say "create a transaction", what accounts should be used. It's already in the bank account as it was put there from Tithes and Contributions. Your input has been very helpful.

[NeilZ]

You are correct in your verification of the situation; however, I have the contribution module set up as you describe. Are you saying, there was no need for the Memorials donor temporarily restricted income account on the COA.

If you're not restricting Memorial contributions to purchasing only items that are actually Memorials, that is special items for the church that will have a In memory of John Smith type of engraving or such on it, and all money for 'Memorials' will go directly into the General Fund, then you really don't need a restricted account in the COA for this use. Your Memoral Contribution Fund can be used to track the donations, and the memorial dedication will show up in the donor's contribution statement.

Also when you say "create a transaction", what accounts should be used. It's already in the bank account as it was put there from Tithes and Contributions. Your input has been very helpful.

Yes its already in the bank account, but its listed under RESTRICTED equity, and will stay there even though you spent the money elsewhere for whatever reason. This is why you need to release it to UNrestricted equity.

If you have the Temporarily Restricted Account setup in the COA properly, it should have a Release account that its associated with. When you click on the Release Restricted Funds button on the standard Enter Transactions screen, the system will bring up a list of your active Temporary Restricted Accounts. The Memorial Account should appear in that list (again, if setup in the COA correctly). All you need to do is select that account and click OK. The next screen will ask how much to release, and also have a note block where you can add as much information about this release as you want.

When you then click the OK button on this screen, the system will have all the information to create and enter the proper accounts on the transcaction screen automatically. You don't have to do anything else but click the SAVE button, then post normally. The system will move the amount from the restricted account equity and put it in the unrestricted equity.

Again, do a backup, test it out. Hope this helps.

[bjsbrown65]

so in the transaction, which account am I to use other than the temporarily restricted income account "Memorials". All of the other information I understand.

[NeilZ]

so in the transaction, which account am I to use other than the temporarily restricted income account "Memorials". All of the other information I understand.

As I mention above ... if you have properly setup the temp restricted account with a release account, it should appear in the list of Restricted Accounts when you click the Release button. You select that from the list, the system will fill in all the data necessary for the release, you just need to click the SAVE button. Do a backup, and test the steps listed above.

However, if you don't see it in the list, that's a completely different situation, and you should use the Powerchurch HELP key (F1) to help you create & link a release account to the temp restricted income account.

[bjsbrown65]

One more ? and I'll leave you alone. The account is set up properly, has a release account. The problem I am having is I don't which accounts to enter in the transaction. What goes in the ? as credit?

Credit: ?
Debit: Memorials

Then when the account is released, I believe it will read as follows:

Credit: ?
Debit: Memorials
Debit: Memorials Release
Credit: Released from Restriction

[NeilZ]

One more ? and I'll leave you alone. The account is set up properly, has a release account. The problem I am having is I don't which accounts to enter in the transaction. What goes in the ? as credit?

Credit: ?
Debit: Memorials

Then when the account is released, I believe it will read as follows:

Credit: ?
Debit: Memorials
Debit: Memorials Release
Credit: Released from Restriction

Again .. you don't have to do anything other than click the RELEASE button ... enter the amount, and click the FINISH button. The SYSTEM will do the rest ... don't over think this, it IS that easy.

Again .. here's a test, do a backup then do this:

1. Check your Chart of Accounts, head to the Memorial Temp Restricted Account, take a look at the Details to see how much is shown in it.
2. Enter the transaction as I have outlined. Just click the RELEASE button, enter the amount, click FINISH button.
3. POST that transaction
4. Check the COA again, you'll see that the amount you released, is no longer in the INCOME account.
5. Run an Income/Expense report and look at the income area .. you 'll see the money was moved properly.

[bjsbrown65]

Yea - Thank you so much for bearing with me. I just couldn't seem to get your point. like you said, was overthinking.