finances and the chartering organization

[Heacox]

Our Pack and Troop are having an on-going discussion with our chartering organization over where Scout-earned money, registrations and activity fees are to be deposited, and who will issue checks. For at least 5 years, the Pack and Troop have maintained separate checking accounts from our church, as all money is either from fund raising activities or paid by the Scout/parent for activites, etc. The chartering organization wants us to transfer all funds into the church account and give us a "line item" from which to spend. Any advice on how to proceed would be greatly appreciated. By the way, there are no "problems" or improprieties that let to this; the church says that the auditors insist that all monies be in the church account. We have concerns that the money will be transfered for other uses if it is taken out of our hands. Advice, please!

[Bob White]

I wish I could help, but I know of no reason that the a Chartering Organization could be refused if they require this. On the other hand I know of no Charter Organization that ever has requested such a thing.

 

Bob White

[Fat Old Guy]

I smell a rat. A big rat.

 

What's going to happen to the funds that you raise that are in excess of your "line item"? What if you don't spend all of your budget in one year, will your funds be reduced for next year? Are you going to be in the position of government agencies, looking for reasons to spend money at the end of the fiscal year so your budget won't be cut?

 

Will they be second guessing every expenditure? "Why are you spending so much on rank patches, why don't you get the old patches back from Scouts once they advance?" "Eureka tents, why not tents from Wal-Mart?"

 

Auditors? Ask to talk to the auditors.

 

I really have a feeling that someone on the church board saw a way to get some extra money into the church coffers and sold it to the rest of the members.

 

If you can't resolve the issues to your satisfaction, perhaps it is time to find a new Charter Organization.

 

 

 

[hops_scout]

That means they would lose all of their money for sure. Right?? Staying with the church means they will still have some, if not most of the money they have earned.

[dsteele]

Bob is correct in saying that the chartered organization can demand that all funds be run through their account. This is not necessarily a bad thing. The troop and pack are part of the chartered organization and the fact that they care enough to take fiscal responsibility is, IMHO a good thing.

 

My guess is that your pack or troop is using the chartered partner's 501 © 3 (non profit) number in its purchashes and their auditors are doing their duty in making sure that the pack and troop are following the IRS rules.

 

Having said that, my advice is to go with the wishes of the chartered partner, but have clear (preferrably written) instructions as to how the unit gets funds from the account, what is permitted, when requests have to be filed prior to payment, who is able to draw, budget etc.

 

It is possible that Fat Old Guy is on to something supsicious, but I think the auditors of your charter partner are more concerned with the 501 © (3) rules. I think a few politely worded questions about your chartered organization's financial practices would not be out of line. Perhaps you should look at a copy of their audit and management letter from their auditing agency.

 

DS

[Heacox]

To my knowledge, we are NOT using a 501©3 number on any purchases. However, I'm not sure exactly what that entails. I do know when we purchase goods for Scout use, we pay sales tax like anyone else. Whatever else is involved, please enlighten me briefly if you don't mind.

 

I can see some of their concerns from an accountability standpoint...just because there has never been a problem in the past doesn't mean there won't be one in the future. I don't think everything here is bad, but just wondered what the "standard practice" is out there as it pertains funds and chartering organizations. Is this extremely rare (to have the chartering org hold the purse strings) or is this common?

 

My fear is that the money our Scouts have earned will disappear to fund some other ministry of the church. Our token church budget line item this past year was allocated somewhere else within the other line items controlled by the particular pastor in charge of Scouting (it was spent on something else besides Scouting). We had no say-so or foreknowledge. Fortunately, we didn't need the money since we are basically "self-funded."

 

I guess my biggest question is "is this common or is this extremely unusual?"

 

Thanks for all the great responses.

[Fat Old Guy]

"That means they would lose all of their money for sure. Right?? Staying with the church means they will still have some, if not most of the money they have earned."

 

Freedom always has a price, sometimes it is blood and other times it is money.

 

I see too many problems with the proposed system, even with written agreements in place. If the church doesn't live up to the agreements, what can you do? Sue? Not really since you can't sue yourself.

 

Whatever the underlying cause of the request, there are too many opportunities for abuse by the Charter Organization.

 

Let's say the troop raises $2,000 more than expenses so they think that they can buy new tents this summer. Hello! That $2,000 was spent on new robes for the altar boys and a trip for the basketball team. Huh? Why don't they have their own fundraisers? They never have in the past and you didn't need the money. Refund it to the troop? Can't do that, it's gone. Right now, they'll say that won't happen but churches are run by people.

 

 

[Eamonn]

Don't know if this will help.

Her Who Must Be Obeyed (My Lady Wife.) Has been the Treasurer for the pack that OJ, was in a a Cubscout.

The Pack is chartered by the local R.C. church.

As for checks there are three names on the check book, two signatures are needed to cash a check.

A report is given at each pack committee meeting, with two copies given to the Charter Rep.One for him and one goes to the parish council.

The pack does use the Church tax exempt number, mainly for items that are bought from the Scout Service Center, where the number is on file.

So far this has seemed to keep eveyone happy.

I would think that most Chartered Organizations, would not want to be bothered with cutting checks every month, just before the pack meeting.Or reimbursing Den Leaders, for money spent on crafts.

[eisely]

The question about the 501c (3) number arises with regard to the checking accounts used by your units. The bank must have some kind of taxpayer ID on the account. If they are using the church's number, then that may be where the concern is coming from. Both BW and the Man of Steele are correct in that, if the CO wants to consolidate the funds, that is their prerogative.

 

I am with FOG in that I tend to smell a rat. There is no compelling reason why any CO would want to micro manage the funds of the units chartered to it. Why would they want the headache? I have seen too many non profit organizations, includiing churches and pre schools get ripped off. You really need to press them about the financial controls in place and what guarantees they will make about the availability of unit funds for unit purposes. All you can really do is draw up a set of procedures and rules and hope for the best.

[evmori]

I gotta agree with Fat Old Guy. Something is amiss. And dsteele is also correct!

 

A little while ago the previous pastor of our CO told us there was a fund set up by a member of the congregation who died for Scouts to use for camp. Some of our Scouts took advantage of this. After this pastor left, I contacted the business manager of the church to see if the fund was still active since we had another Scout who wanted to use it. The business manager told me the fund balance was zero. I didn't think much of it until about a year later the business manager was indited for misappropriating funds from the church. He was a very likable guy & no one saw this coming.

 

The resaon I tell this - to support my stance.

 

Ed Mori

Scoutmaster

Troop 1

1 Peter 4:10

[NJCubScouter]

Fortunately I have not had to deal with anything like this. The parent-teacher organization that was CO for my son's Cub pack took no interest in our finances (or much of anything else for that matter, which isn't quite as bad as it sounds because the leadership of the CO and of the pack always overlapped to a degree anyway. And for a time, because the previous leadership of the pack had "missed" a year of fund-raising, the pack treasury consisted mainly of IOU's so there wasn't anything to take an interest in anyway.) On a brighter note, the church that is CO for my son's new troop appears to make an annual payment IN to the troop's bank account, rather than take any money out. (Of course, it is a 2-way street, as a result of a recent Eagle project the church's school gymnasium (where the troop meets) now has a fresh coat of paint, floor-to-high-ceiling, doors, window frames and everything.)

 

Good luck with your issue. Maybe your DE can speak with your CO and suggest ways that other CO's have found to satisfy their auditors while letting the troop keep its own account. Your CO's auditors are presumably working under the same standards as the auditors for every other CO, so perhaps there is room for compromise.

[acco40]

"Rats" come in many colors. I've heard of Pack treasurers spending pack funds for personal vacations.

 

The CO owns the troop & pack. It is their money, their troop, their pack, their equipment. You have the choice of changing packs and troops.

 

A friendly discussion on why the church feels the need to consolidate the accounts is in need. A question I would bring up is how they would handle the idea of scout accounts.

 

Good luck. Money raises the hackles on many. Remember, a Scout is trustworthy (IMHO, includes trustworthy of others.).

[buffalo2]

If I understand the situation correctly the CO is financially contributing to the unit? Then no surprise if they wish to consolidate funds; they're concerned with preventing those very things that we're all worrying about! Perhaps best to make a clean financial distinction; maintain an independent account if you can, keep things open and honest as has been mentioned earlier, and just don't take their money. You can't have it both ways...

[Heacox]

The CO maintains a small line item within its budget for Scouting. We've usually used that for things like the Blue&Gold Banquet, mileage allotment for church buses on our trips, etc. This past fiscal year, the CO used it for something else (not Scouting); we were told it was "needed elsewhere."

 

The accounts the Pack/Troop have do not contain CO-contributed funds; these are entirely from popcorn/carwash/fundraising events and parent-paid program/camping/fees.

 

I understand that the CO owns the Pack/Troop. I don't think there is a large "rat" brewing as some suggest, but I do see the likely possibility that boy-earned monies will disappear once assimilated into the church budget. I am trained in accounting myself; I also worked for a non-profit about 20 years ago. I know how funds get shifted at the end of the fiscal year to make things look good (i.e., x dept has money left; y dept is short; let's transfer money and everybody's under-budget). I fully trust our CO not to do anything illegal but do have grave misgivings about the transfer of funds to another program.

 

[Fat Old Guy]

"This past fiscal year, the CO used it for something else (not Scouting); we were told it was "needed elsewhere." "

 

Ah ha! The thought plickens.

 

The odor of stale fish is really comming through my CRT now.

 

Do you have a trusted source on the church board? Ask him what's going on. Although many of these plots are hatched in ad hoc meetings with no records and not all of the members in attendence. "Hey Bob, ya know the Sunday school is running over budget again and those durned Boy Scouts have $2,000 extra in their checking account." "Hmmmm. . . we ought to be able to use that money for the Sunday School, after all they are both Church programs."