STEWARDSHIP & FINANCIAL MANAGEMENT Stewardship Seminar

STEWARDSHIP & FINANCIAL MANAGEMENT A donor who is confident that funds are used in an appropriate and responsible manner is more likely to give to the Foundation again.

STEWARDSHIP & FINANCIAL MANAGEMENT As Stewards of The Rotary Foundation, the Trustees must demonstrate to our donors that contributions were used appropriately. The Trustees rely on the integrity of Districts, Clubs and Rotarians engaged in project implementation to ensure that funds are used effectively for the purpose for which they were given.

STEWARDSHIP & FINANCIAL MANAGEMENT Proper Financial Management = Stewardship of TRF Funds Project Sponsors must: Treat TRF grant funds as a Sacred Trust Ensure Transparency of financial transactions Competent & thorough supervision of project Use Standard Business Practices

STEWARDSHIP & FINANCIAL MANAGEMENT A financial management system: Demonstrates that funds were used effectively and efficiently Helps the Foundation meet legal requirements Provides transparency that maintains the integrity of RI and TRF Embodies trust and opens the door for future projects

STEWARDSHIP & FINANCIAL MANAGEMENT Project Accounts A separate bank account should be established for each grant project Project account must be a club/district-controlled account Non-interest bearing account recommended At least two signatories required Grant funds must remain in the project account QUESTIONS: Are there any local laws or structural issues within Thailand that would make it difficult to meet the requirements for project accounts?

STEWARDSHIP & FINANCIAL MANAGEMENT Project Accounts Global Grants Should be established and controlled by the sponsor, e.g. district sponsored grants overseen by the district, and club sponsored grants overseen by the primary sponsor club District Grants Bank account established by district, and disbursements made by district to the clubs NOTES: For district grants, clubs are not required to establish separate bank accounts to receive district disbursements, however, it would be a best practice to ensure that it is easy for the district to account for the funds when the clubs submit their financial documentation to confirm project expenses.

STEWARDSHIP & FINANCIAL MANAGEMENT Use of Grant Funds Determined by grant project committee Committee ensures grant funds will be spent in accordance with the approved budget “Collective Responsibility” Tip: Discuss project updates in weekly club meetings and record the minutes

STEWARDSHIP & FINANCIAL MANAGEMENT Purchases Bidding process / Request for proposals During the budgeting stage During the implementation stage Goods or services purchased should be highest quality at the lowest price Tip: If in the implementation stage, the prices have changed since the budget for the project was approved by the Foundation, contact your grant coordinator and receive approval for the change in prices or quantity NOTES: When seeking competitive bids, the prices quoted should be from the same brand and model, otherwise, the prices are not directly comparable. Should there be more than one model considered, separate quotes should be sought.

STEWARDSHIP & FINANCIAL MANAGEMENT Payments Invoices need to be received for goods/services Payments should be made directly to vendors Tip: Do not make payments until you have received an invoice Tip: If purchase has been made by another party, such as a cooperating organization, invoice must be received before payment/reimbursement is made

STEWARDSHIP & FINANCIAL MANAGEMENT Payments Payments should be made by check Do not make any payments that others are unaware of. Tip: When cash payments are necessary, use a receipt book to record the expense at local markets and ask the vendors to sign the receipt

STEWARDSHIP & FINANCIAL MANAGEMENT Ledger of Project Activity Ledger should include (at a minimum): Date of transaction Check number Payee Amount Purpose of transaction Signature of review

STEWARDSHIP & FINANCIAL MANAGEMENT Sample Ledger

STEWARDSHIP & FINANCIAL MANAGEMENT Inventory System To track equipment and other assets purchased, produced, and distributed with grant funds

STEWARDSHIP & FINANCIAL MANAGEMENT Inventory System Details Mark the assets with proper RI logo Number the assets Maintain a listing of: Asset # Beneficiary/owner of asset Location of asset

STEWARDSHIP & FINANCIAL MANAGEMENT Document Retention Bills and receipts should be obtained. Documents should be filed systematically and cross-referenced in a ledger Invoices substantiate the expenditure Receipts substantiate the payment Project records must be maintained for at least 5 years or as per laws of the country

STEWARDSHIP & FINANCIAL MANAGEMENT Annual Financial Assessment Examines expenditures of district sponsored grants Confirms all finances are conducted using standard business practices Reported to the clubs within 90 days of new year

STEWARDSHIP & FINANCIAL MANAGEMENT Report on the use of Grant Funds The district will report to all clubs on the use of DDF by: Providing a report annually at a district meeting Including this information in the governor’s final monthly communication When reporting on DDF, the report will include: a breakdown of expenditures for each project that received funding and the names of districts, clubs, and individuals who received grant funds Also, the district and all member clubs must adhere to all TRF reporting requirements.

STEWARDSHIP & FINANCIAL MANAGEMENT Method for Resolving Misuse The district must: Create a system to track reports of misuse and/or mismanagement. Promptly investigate reports of misuse or mismanagement of grant funds Report any potential or substantiated misuse or mismanagement of grant funds to TRF The qualification process requires districts to track, investigate, and resolve reports of misuse or mismanagement of grant funds. By creating a plan before any allegations of misuse are made, the district can apply procedures consistently and foster an environment that does not tolerate misuse of funds. The purpose of this training is to ensure that all clubs are aware of Rotary’s stewardship and grant management expectations. We hope that there are no instances of allegations or misuse of funds, but know that there is a zero tolerance policy. Misuse and mismanagement of funds will not be accepted. All allegations will be immediately reviewed and reported to TRF.

STEWARDSHIP & FINANCIAL MANAGEMENT Method for Resolving Misuse Strategies for investigations: Collect as much information as you can from: Club members Vendors Beneficiaries Treat individuals involved fairly, without bias Maintain confidentiality Verify any claims, if possible Report findings to TRF Strategies for investigating allegations: When receiving an allegation, make sure that as much information is collected as possible. This may include following up with grant sponsors, or others involved with the project to provide additional information and/or documentation. If contacting clubs, districts, or individuals involved, ensure that the allegations are handled fairly and without bias. This may involve confirming their privacy (as distinct from confidentiality) in following up on claims. We’re not assuming guilt, but all allegations must be taken seriously and investigated. If specific claims are made, verify the claim if possible. Once all information has been gathered, report any findings to The Rotary Foundation.

STEWARDSHIP & FINANCIAL MANAGEMENT Method for Resolving Misuse Examples of how to verify claims: Concerns raised about costs Cost comparison Concerns raised about receipts or invoices Review payment documentation Conduct vendor verification Contact the vendor to confirm issuance, or compare their receipts with the ones in question Each allegation is unique, and may require different means to verify claims being made, but here are some examples: If concerns are raised about the costs of items purchased, you can conduct a cost comparison with comparable products or services If submitted in the application, review the competitive bidding proforma invoices If concerns are raised with the receipts or invoices submitted for a project, you can: Request copies of cancelled checks, wire transfers, credit card statements for comparison Search for the vendor listed on the receipt to see if they exist, or compare the contact information provided on the documentation If the vendor exists, ask them to confirm issuance of the invoice/receipt, or ask for a copy to compare the one that was submitted by the project sponsors

STEWARDSHIP & FINANCIAL MANAGEMENT Method for Resolving Misuse Examples of how to verify claims: Concerns about project deliverables Compare budgeted items to those purchased Onsite verification If in doubt, contact RI Stewardship: StewardshipDepartment@rotary.org Examples: If concerns are raised about donated items Conduct an onsite verification. Compare what was promised in the grant application, to what was purchased Confirm whether items donated were received by beneficiaries/are in working order If further guidance is needed, feel free to contact Rotary Stewardship: StewardshipDepartment@rotary.org

STEWARDSHIP & FINANCIAL MANAGEMENT Resources District Memorandum of Understanding Grant Management Training Leader’s Guide Guide to Global Grants (Manual) Foundation-related courses in the Learning Center of Rotary website, www.rotary.org RRFC, Zone 6B, Rafiq Ahmed Siddique, rafiq@bol-online.com AARFC, Zone 6B, Wichai Maneewacharakiet wichai@oiltek.co.th TRF Staff

STEWARDSHIP & FINANCIAL MANAGEMENT Financial Management Plan Keep track of grant funds Promote transparency to all involved Safeguard against misuse NOTES: Establishing a district or club financial management plan is a requirement for qualification. Club/district sponsors should follow their financial management plan, which should outline the points previously covered: disbursing funds properly during project implementation, keeping financial records, and managing a club or district-controlled bank account. Handout sample club/district financial management plans

STEWARDSHIP & FINANCIAL MANAGEMENT Questions?