Transfer Temporarilty Restricted funds

[fstuart]

OK, one more transfer question:

Currently, my temp restricted funds are in my general fund 10. Example:

10-3201-000 TEMPORARILY RESTRICTED Equity

10-3210-101 Priest's Discretionary Equity
10-3211-111 Memorial - Gaylord Schmit Equity
10-3213-000 Fund for the Future Equity

However, I want to transfer these to the temp restricted accounts in Fund 20 where they only show up in fund 20, and not in fund 10.

What is the exact process for doing this? Do I have to involve the checking account, or is there a direct transfer of funds that is easy?

Thanks in advance.

Forrest Stuart

[Jeff]

Forrest,

From your question here and reply in another thread, there may be some confusion as to what a 'fund' in accounting is. We tend to use the term 'fund' for several different things so it might be helpful to define what the term fund means in the context of fund accounting.

A fund in accounting is a seperatly balancing complete chart of accounts. So each fund has its own assets, liablilities, equity, income, and expenses. You won't be able to setup a fund without identifing the assets that belong to the fund. (i.e. checking account balances, money market balances, invesment account balances, and so on) Each fund needs to balance on its own. (Balance means Assets = Liabilities + Equity) You can't have just income and expenses in a fund. Almost think of each fund as its own company. (This is not technically correct but helps understand the seperation of funds.)

If this makes sense ask more questions. What you want to do by setting up a seperate fund to hold your temp-restricted amounts is very appropriate and common to do. It will make the accounting a little more difficult, but will make sense when you understand what a fund is.

[fstuart]

Jeff:

Thank you for your patience. I am understanding funds the more I ask about them.

I work at a college, and one of the accounting folks said that the college, for example, keeps temp restricted accounts in a separate fund. He said that removes the temp restricted accounts from the general fund balance sheets, and it helps interested parties see the status the unrestricted, temp restricted, and restricted funds (my words, not his).

So, I thought I'd do the same thing, and from what you wrote, this is common. Visually, it makes sense, too. So, I think I am understanding this a bit more.

With the above in mind, how, in PCP, would I transfer the temp retricted accounts from Fund 10 to Fund 20?

Again, thank you for your help and patience.

[Jeff]

Do you already have income recorded for these restricted amounts? If so, do you want to transfer this income over to temp-restricted fund as well?

[fstuart]

Yes. There is income. Here is what is in each account:

10-4201-000 TEMPORARILY RESTRICTED Income
10-4210-101 Priest's Discretionary Income 100
10-4215-000 Fund for the Future Income 0
10-4220-102 Bishop's Discretionary Income 0
10-4230-103 Hurricane Katrina Relief Income 0
10-4240-104 Namrata Shah Income 0
10-4250-105 Planting Faith Ministries Income 0
10-4260-106 Thanksgiving for Ministry Income 1170
10-4270-107 Memorial - Gaylord Schmit Income 3640
10-4271-100 Chas Williams' Ministry Income 0
10-4280-100 Worship Supplies Income 0
10-4281-100 Anglican Common Cause Inc Income 1275.26

I really would like the easiest way to do this, but I realize it may be tedious. Whatever you think is the cleanest is fine. Could I transfer just the total income of each account?

[Matt]

Forrest,

Do the income amounts you show below agree with the restricted equity balances you see when you run a balance sheet for fund 10? If so, you can accomplish the transfers by posting an entry such as the following:

Debit 10-4210-101 Priests's Discretionary Income $100
Credit 10-1110-000 Checking Account $100
Debit 20-1110-000 Checking Account $100
Credit 20-4210-101 Priests Discretionary Income $100

If not, this means you have released funds from these restrictions and/or you have a carryforward balance in these restrictions from a prior fiscal year. If this is the case you may want to consult with your accounting folks at the college on the best way to accomplish the transfers, as depending on the situation this will be more complex to do.

Matt

[fstuart]

Actually, no they do not agree. I have released funds.

For example, the balance sheet shows $509.11 for 10-4210-101 Priests's Discretionary.

I really don't know what I've done. Some of the accounts had beginning balances that we carried over from last fiscal year.

I'll check with our accounting people. It may be best to leave it all in Fund 10 until the next fiscal year.

If you have other advice, or if you want me to send you anything, I'll be glad to.

Thanks, Matt.

Forrest

[fstuart]

Matt:

Here is a question posed by an accounting person from the college at which I work. This is in response to the question posed him per your suggestion:

Forrest, ask your support person if the system has a Cash Interfund account or some other automated means of tracking “claim on cash”. i.e. you have one checking account, but a number of temporarily restricted funds have a little ownership, or “claim”, of the cash in the checking account.



Basically, when you post income to a temporarily restricted account, you want the debit to increase that fund’s Cash Interfund balance automatically, rather than having to do this manually. Likewise, when you have an expense, you want that fund’s Cash Interfund balance to be credited automatically.

[Matt]

Forrest,

If you set up your temporarily restricted income and release accounts to close into the corresponding temporarily restricted equity accounts the system will accomplish this for you automatically. By running a balance sheet and looking at the temporarily restricted equity section you can see the exact claim each restriction currently has on your checking account balance.

Matt

[fstuart]

Matt:

Are you saying change the account to which my 10 fund temp restricted accounts close from the 10 fund to the new 20 fund? I other words, I can go into my current temp restricted accounts and tell them to close the to temp restricted accounts in the 20 fund?

I realize that sounded redundant, but I want to make sure I understand the steps involved. If you could explain a little further, that would help.

Thank you!!

Forrest

[Jeff]

An account can only close to an equity account in the same fund. For example the 10-4210-101 account can only close to an equity account that is also in fund 10, it can not close to an equity account in another fund.