The issue is you will then not know how much you're really spending in the ministry areas.cbrown wrote:I gave a transcript of this entry to the president of our corporation and he is in agreement that we need to set up expenses for our donor restricted account disbursements. We’ve been using Power Church for about 15 or 20 years, and previous treasurers always charged the equity accounts directly. What are your thoughts about setting up one expense account to cover all disbursements from the restrictions, knowing that the release accounts will show details of where the money went? Then we wouldn't have to change our budget, since we don’t know how much is going to be disbursed to the temporarily restricted accounts. We would see the expense account on the income and expense report and understand that it’s not really a budget issue. We have 25 temporarily restricted accounts, each one tied back to a contribution account.
Example:
The church board has approved the purchase of new hymnals, this has been budgeted in the Worship Ministry budget. Someone donated funds for this in May, but he hymnals will not be released by the printers until September. You put the money in a temp restricted account.
Time comes to purchase the hymnals. Instead of charging the Worship Ministry with the expense, you put it against this 'catch all' expense account, and release funds. At the end of the year, it looks like the Worship ministry didn't spent all its budget since there's a line item not used.
This is the way it will show up on the end of year I&E report, a huge un-budgeted expense account showing funds spent, but then a budgeted item with nothing spent.
This is one of the reasons the church board here does not allow 'targetted' giving. We'll accept a donation to be used for a ministry, but the purchase will be for something that ministry needs, not what some member decides the church needs.