Budgeted funds Transfered to another account

by Lynda
(Iowa)

We have multiple checking accounts amongst our little church. Fund accounting is something that has not been introduced yet.

We have a general budget that is approved by the congregation in October of each year. In that budget are 2 line items; BYF Activities and Camping Tuition Fees. There is a separate bank account called "BYF".

Last year before I became involved with the Finance Board someone (less accounting knowledgeable than myself) decided that we would write a check for the amount budgeted for camping fees ($1500) out to the BYF and deposit it into that account, so that they could pay the camping fees.

Not all of the $1500 was needed for camping fees as other money came in for camping fees, so therefore all $1500 was not needed.

From the 'good accounting practices end' of this situation, it seems to me that any money budgeted out of the General Fund should be paid out of the general fund. This particular situation it seems to me that a check should be written for the camp fees out of the general fund directly to the camp not transferred to this other account within the organization.

If the building committee wants all the money budgeted to them, would we transfer it to a checking account that they have? and so forth. You could do with Education also. It just doesn't seem to make sense to budget an amount of money in the general fund and then transfer the entire amount to another account within the organization.

I am looking for some support to help justify why the bill should be paid directly from the general fund or help understanding why it is ok to transfer entire amount to another account.

Thanks in advance.

Lynda