BY MURAYA KARIUKI DISTRICT SCHOOLS AUDITOR MOMBASA DISTRICT FINANCIAL MANAGEMENT: APPLICATION AND PRACTICE

FINANCIAL MANAGEMENT DEFINED:- - These are deliberate attempts by the management of any institution designed to ensure that funds received by the institution are recorded and put to the intended use and correctly accounted for.

REGULATION Financial management is governed by the following acts and regulations: Education Act Audit and Exchequer Act Financial management regulations handbook-2003 Procurement and disposal Act-2006

FINANCIAL MANAGEMENT PROCESS Analysis-the accounting officer analyses different incomes and expenditures for a specified period Classification-The incomes and expenditures are classified according to the relevant account say Tuition,operations, Main account Recording-The actual recording of the classified information to different books of accounts

BOOKS OF ACCOUNTS CASH BOOK Book of original entry Records all revenues and expenditures Should be written on daily basis Balanced monthly Left hand side records all revenue Right hand side records all expenditure

RECEIPT BOOKS Records all revenues received in the school from all sources  Parental fees.  Govt grants.  Donations  Income generating activities Available in duplicates,triplicate  Original issued to the provider of funds  Duplicate –maintained in school for accounting and audit purposes  Triplicate issued to the immediate supervisor

The receipt should show the following details  Date  Name of the provider  Amount in words and in figures  Voteheads  School stamp  Signature of the recipient  Mode of receipt-cash/cheque/money order

PAYMENT VOUCHER This is a document which shows the details of any payment made in an institution A standard payment Voucher should show the following:  Serial number  Date  Payee  Description of the payment  Amount in words and figures

 Mode of payment  Authorizing signature  Vote head charged  Signature of the recipient  Stamped paid  Supporting documents Delivery notes Invoices Receipts Statements Contract agreement

CHEQUE BOOKS Should be maintained under lock and key by accounting officer Should have at least three signatories No advance blank cheques to be signed Cheque details to be recorded in the cheque stub

PAYROLLS RECORDS DETAILS OF THE STAFF WAGES. A payroll should show;  The names of the workers  Designation  Basic pay  Deductions  Gross pay  Net pay  Signature  Id number

LEDGERS Shows the summary of the cashbook. Should be written on monthly basis Helps in extraction of the monthly trial balance

REGISTERS AND OTHER SUPPLIMENTARY RECORDS COUNTERFOIL RECEIPT BOOK REGISTER RECORDS RECEIPTBOOKS IN THE SCHOOLS CUSTODY CONTROLS THE USAGE AND MOVEMENT OF THE RECEIPT BOOKS SHOWS THE SERIAL NUMBERS OF THE RECIPTS SHOULD BE UNDER LOCK AND KEY WITH THE ACCOUNTING OFFICER

FEES REGISTERS  SHOWS THE STUDENTS NAME AND ADMISSION NUMBER  RECORDS FEES PAID PER TERM PER INSTALMENT  SHOWS VARIOUS VOTEHEADS ALLOCATION  SHOWS FEES ARREARS  SHOWS PREPAID FEES

POSTAGE REGISTER RECORDS MOVEMENT OF MAILS ALSO MAINTAINED AS DELIVERY BOOK SHOWS THE ADDRESEE OF MAILS SHOWS THE AMOUNT OF STAMPS IN THE INSTITUTION CONTROLS STAMPS USAGE

HANDING OVER /TAKING OVER SUMMARISES ALL ITEMS HANDED OVER SHOULD BE SIGNED BY THE TWO PATIES AND WITNESSED COPIES SHOULD BE DISTIBUTED TO RELEVANT OFFICES ITEMS NOT HANDED OVER,COMPLAINTS,SHORTAGES AND QUERRIES SHOULD BE CLEARY MARKED AND SIGNED FOR BY THE PARTIES

FINANCIAL STATEMENTS MONTHLY TRIAL BALANCES SHOWS THE SUMMARY PER MONTH SHOWS INCOME AND EXPENDITURE PER A SPECIFIED PERIOD SHOWS OPONEING AND CLOSING BALANCES HELPS MANAGEMENT CONTROL EPENDITURE IT’S A TOOL OF FINANCIAL MEASURE SHOULD BE PREPARED FOR EACH ACCOUNT MAINTAINED

INCOME AND EXPENDITURE IT’S A STATEMENT PREPARED AT THE END OF THE YEAR. COMPARES THE INCOMES AND EXPENDITURE OF AN INSTITUTION SHOWS WETHER THE SCHOOL REALISED A SURPLUS OR INCURRED A DEFICIT COMPARES THE PREVIOUS YEARS INCOMES AND EXPENDITURE WITH THE CURRENT YEARS’

B ALANCESHEET SHOWS ASUMMARY OF THE FINANCIAL ASSETS AND LIABILITIES OF THE INSTITUTION LIABILITIES  Accumulated fund-shows the opening cash and bank balances  Shows either the surplus or deficit for the year  Sundry creditors if any  Funded accounts-caution money,development,exams,general reserves,bus fund etc

ASSETS  Shows cash and bank balances  Sundry debtors if any

PROCUREMENT PROCUREMENT COMMITTEES IN PUBLIC SCHOOLS School tender committee Inspection and evaluation committee School infrastructure committee

I : Basics of Procurement 1. Definition of Procurement - Acquisition by purchase, rentals or hire purchase, tenancy or any other contractual means of any type of works, assets, services or goods 2. Importance of Procurement - Procurement of goods, works and services in any institution contributes greatly to the success of the institution, depending on how well it is conducted.

3. Objectives of Good Procurement. - Acquisition of items in the most cost effective manner to ensure that they are provided in the right quantities, at the right quality, from the right source in timely and right delivery period at the lowest possible total price

4. Measurement of Good Procurement Management. - Service level - Amount of profit made

Responsibilities of school tender committee Review and award tenders as per the public procurement regulations Approve bids through open tenders Approve selection of successful tenderer Approve amendment of contracts previously awarded Review a selection of procurement method.

RESPONSIBILITIES OF USER DEPARTMENTS Preparation of procurement plans Participating in tender evaluation Forwarding details of required variations to contracts to tender committee Undertaking conformity assesments of supplied goods or services Preparing technical specifications for goods/services to be procured Making clarifications on tenders

Contents of a procurement plan The annual procurement prepared by each user dept shall include; A detailed breakdown of goods, services or works required. A schedule of planned delivery eg. Term An indication which items shall be packaged into lots An estimate value of goods, sevices. Indication of of appropriate procurement method to be used

Tender committee minutes The tender committee shall cause to be prepared minutes of all its meetings and such records will incude; A register of attendance Date of meeting List of all matters considered Decision made for each matter Any conflict of interest noted or declared.

How to ensure that schools get value for the money spent on procurement You can get value for money by ensuring that the goods and services procured or bought in your school are; Of the right quality In the right quantity From the right source At the right price At the right time

PROCUREMENT METHODS TENDERING Tendering means an offer in writing by a tenderer to supply goods,services and works at a price. Tendering can be open or restricted QUOTATIONS You may request quotations to purchase readily available goods or procurement of goods for which there is an already established market.

Contd. DIRECT PROCUREMENT This method is used when procuring a specialized service NB:The ministry of education prefers the use of open tendering system for schools to enable general public participate in the procurement process.

Stages in Open Tender Process Prepare Specifications Prepare Tender Document Advertise & Sell Tender Document Preparation & Submission by tenderers Opening of tender Tender Evaluation Contract Award Contract Preparation Performance Of Contract Signing of Contract

PROCUREMENT PROCESS Needs identification Sourcing for suppliers Evaluating tenders /quotations Awarding tenders Delivering goods-recording Paying for the goods delivered

School tendering procedures Tender documents Receiving of tenders Opening of tenders Examining tenders Evaluating tender application Award and notification of tenders Delivery of goods Paying for goods

THE END GOD BLESS YOU THANK YOU