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Contents: 1.Organization’s Policies & Procedure 2.Internal Controls 3.Manager’s Financial Role 4.Procurement Process 5.Monthly Financial Report for the Management 6.End-of-Project Checklist 7.Annual External Audit

ORGANIZATION’S POLICIES & PROCEDURES 1.HR & Administration Policies & Procedures 2.Finance/Accounting Policies & Procedures  Strong Internal Controls  Financial Reports Standard  Annual External Audit

Finance Policies & Procedures 1.GENERAL ACCOUNTING SYSTEM 2.SPECIAL POLICIES AND PROCEDURES

GENERAL ACCOUNTING SYSTEM 1.Organization of the Accounting Department 2.Chart of Accounts 3.Policies and Procedures 4.Monthly Procedures 5.Quarterly Procedures 6.Annual Procedures 7.Project Operations

SPECIAL POLICIES AND PROCEDURES 1.Commissions, Gifts and Bribes 2.Fraud and Other Irregularities 3.Approval of Personal Expenses 4.Lost or Stolen Assets 5.Private Use of Organization’s properties (vehicles, computers…)

Project Operations 1.Manager’s Financial Role 2.Budget 3.Areas of Responsibilities 4.Construction Contract 5.End-of-Project Checklist

Internal Controls Management Role and Responsibility: 1.Management is responsible for establishing a good system of internal controls at projects and its offices. 2.All managers have the responsibility to make sure internal controls are understood and followed by staff. 3.Management should be informed of problems, issues and any suggestions for improvement.

Internal Controls Types of internal controls: 1.Competent, trustworthy staff with clear lines of authority and responsibility 2.Segregation of duties and responsibilities 3.Proper procedures for authorization 4.Adequate documents and records 5.Proper procedures for record keeping 6.Physical control over assets and records 7.Independent checks on performance 8.Preparation of financial reports

Competent, trustworthy staff with clear lines of authority and responsibility 1.Staff are carefully selected and trained to do their job and have clear job description 2.Authority limits for accounting voucher and Purchase Order are understood and followed 3.Staff are oriented on HR and finance policies & procedures

Manager’s Financial Role A manager should fully understand his financial role and responsibilities within his project, and must have clear understanding of the Organization financial policies and procedures. What should a manager be aware of: 1.Donor’s required financial reporting and processes, i.e. financial reporting format, date of submission of reports, audit requirements, etc. 2.Project’s plans and budgets 3.Cash needs during the month 4.Level of financial approvals 5.Manual of Organization Financial policies and procedures 6.Financial information in the Monthly Project Financial Report, i.e. monitoring of actual expenditures against the budget

Manager’s Financial Role Budget  It is the responsibility of the Program / Project Managers to monitor actual spending of project expenditures against its budget.  The Program/ Project Manager should ensure that the following requirements are met: 1.Donor’s funds are properly spent according to the planned activities 2.The key project staff understands the budget line items where project payments should be charged. 3.Sufficient contribution for the project support cost is budgeted, i.e. for finance, admin and management support cost. 4.The actual expenditures of the project do not exceed donor’s approved budget.

Manager’s Financial Role ResponsibilityProgram/ Project ManagerFinance Officer Financial Management The Manager is responsible for the overall management of its project, which includes the financial management. The Finance staff provides technical support and financial information to the Project Manager. Cash Management The Manager informs the Finance Officer the total cash needs of the project during the month. The Finance staff ensures that cash is available at the project level for the implementation of project activities. Purchasing The Manager makes the decision on which materials or services should be procured for its project. The Admin Staff or Procurement Staff ensures that the material and/ or service approved by the Project Manager for procurement gets paid and delivered to the project on a timely manner. Cash Disbursement The Manager assumes the responsibility of disbursing project’s fund. The Finance staff is responsible in releasing project’s fund after securing approval from the Project Manager Coding of Project Expenditures The Manager takes responsibility in approving the project’s expenditures to the proper project budget line items, in the Finance Voucher and Purchase Order. The Finance staff encode the budget line information in the accounting software for the preparation of project financial report Financial Reporting/ Budget Monitoring The Manager is responsible in monitoring its actual project’ expenditures against its budget. The Finance staff is responsible in providing Monthly Financial Report to the Project Manager on a timely manner. Donor’s Financial Requirements The Manager takes responsibility in ensuring that financial procedures and requirements are met by the Organization. The Finance staff assist the Project Manager in meeting the donor’s requirements by providing the financial reports on timely manner. Areas of Responsibilities

3 quotations Submit to Accounting Office Quotation Summary Sheet Purchase Order Order Products from Supplier Different Supplier Summary sheet are Fund Request Form Request Form All Payment Require FRF Finance Voucher (2) (1) (4) Required all the payment have top/line manager approval (3) PROCUREMENT PROCESS All the stages require line managers to approve for the payment Descriptions (1)3 Quotations (2)Ordering (3)Original Invoice/Receipt (4)Review all the supporting documents for payment process

Monthly Financial Report for the Management 1.Donor Financial Report in accordance to its required format. 2.Monthly Project Financial Reports- actual expenditures against the budget  Make sure that their monthly report is correct.  To ensure the monthly financial report is accuracy (of detailed checking)  If errors are found in the monthly report, corrections will be processed in the following month.  Supporting schedules like bank reconciliations, cash counts, fixed asset schedule, and other schedule of accounts.  Government report as required by relevant Ministries  Balance Sheet  Profit and Loss

End-of-Project Checklist The important procedures are followed to ensure that proper accounting and final reporting is promptly and accurately done. The procedures along with the positions responsible: 1.The Project Manager should take the initiative to contact the donor at least a month prior to the project closing date.  To discuss the deadline for submission of the final report,  Any other additional information required.  Ongoing communication should be maintained with the donor if the report is delayed. 1.A 2.The Project Manager should meet with all the stakeholders (e.g. Finance officers, Project officers, etc.) at least two weeks prior to the closing date of the project to clarify responsibilities and discuss any issues. In particular, it is important to:  Review the project documents (file) to identify key dates and procedures for preparing the final accounts.  Communicate and agree on date of final report preparation.  Communicate to Finance staff to stop charging expenditures to the project after the closing date.  Ensure that the Fixed Asset Listing is up to date with the Asset Number, and details, i.e. Funding source.  Details of who the assets are to be transferred to or disposal details are needed (may need to obtain donor’s approval).

End-of-Project Checklist (Con’t) 1.a 2.a 3.The Project Accountant/ Finance is responsible for ensuring that no charges will occur after the closing date, unless they are authorized adjusting entries. 4.The Project Accountant/ Finance is responsible for the preparation of the final project financial report, subject to review of Finance Manager and approval of Project Manager. It is critical that the final report submitted to the donor agrees to the underlying information in the Organization’s accounting software. 5.The Project Manager is responsible for approving all final transactions in the Finance Voucher.  He/ she must review the project account listings after the closing date to ensure no unauthorized entries were made.  Overall responsibility for the accuracy of the final report and the meeting of the donor’s requirements for timeliness rests with the Project Manager.

EXTERNAL AUDIT  In most cases, the donor would require the project records to be examined by external auditors to ensure that donor’s funds were properly spent for its intended purpose.  The Project Manager must coordinate with Finance Manager and relevant Finance Staff in preparation for the audit. All financial records and communications with the donor/s must be prepared ahead of time.  The copy of the following communications to the donors must be forwarded to the Finance staff for reference purposes: 1.Changes in project’s plans and activities 2.Changes in staffing structure 3.Donor’s written approval for budget revisions 4.Amendment in the contractual agreement

Grant management qualification Accountability & Accounting System Consistency Transparency Internal Controls Verification Efficiency