Payments

2.4 Payments
Key points

• Expenditure must not be incurred before a budget is authorised, ie there is either a funds
summary agreed between SCI and the member with fully executed donor agreement attached,
or the relevant member has issued a pre-authorisation (pre-award letter). The only exception
to this is where an emergency code has been set up temporarily for an emergency response
as detailed in Section 2.2.5 above, and where the International Programs Director has
authorised expenditure for an emergency response (up to $1m before getting member
commitments).
• Staff have a responsibility to only incur expenses that are in line with programme objectives,
necessary and good value for money.
• Expenditures and commitments must only be signed when accompanied by a complete budget
code, auditable documentation and relevant budget holder authorisation according to the
scheme of delegation.
• Commitments or payments for a single order must not be split so as to avoid the financial
limits set by the scheme of delegation or the appropriate procurement procedures.
• Authorisation must be made on the basis of original invoices. They must not be made on the
basis of statements or photocopies of orders /invoices, as this increases the likelihood of
duplicate payments.
• SCI must not make payments on behalf of employees, with the exception of business
expenses.
• Any payments to be made in advance covering a period of more than one year (eg prepaid
rent) requires prior authorisation from the Director IP Finance.

Responsibilities
The budget holder is responsible for:
• authorising commitments and expenditure, taking into account the considerations outlined
below
• ensuring no spending commitment is made for a longer period than appropriate, having regard
to project length, the risk of project cancellation and other external factors. An example of
this would be a property rental agreement for a fixed number of years
• identifying accruals and prepayments, at a minimum on a quarterly basis.

Finance is responsible for:

• making payments
• accounting correctly for expenditure, accruals and prepayments
• checking that procurement procedures have been followed
• filing full documentation for audit purposes
• checking adherence to donor regulations
• advising on correct policies and procedures to be followed
• highlighting to management any deviations.

Definitions and explanations

Authorisation of a commitment means making a promise that SCI will pay a third party providing they
fulfil the terms of the agreement eg signing a purchase order to a supplier, signing a construction,
employment or partner contract.

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Payments: Procurement Process

Good Practice Guidance - Expenditure authorisation

When authorising an expenditure commitment, a budget holder must consider:

• Is the expenditure necessary and in line with objectives?
• Is value for money being obtained?
• Have donor compliance and SCI policies been observed (eg procurement rules, anti-
terrorism, supplier and partner vetting, child protection)
• Is the expense within the approved budget?
• What budget and account code will the expenditure will be coded to?
• Have all related costs been considered eg running costs, subscription costs, transport,
licensing?

Types of expenditure
All expenditure can be categorised as one of three types, with an associated process:
• Procurement expenditure
• Non-procurement expenditure
• Personal expenses incurred by employees on behalf of SCI

All forms of expenditure, and the associated forms, are outlined as part of the finance forms overview
(Finance Authorisation Forms), available on the OneNet here.

2.4.1 Procurement process

Good Practice Guidance - Procurement process

The procurement policy, medical procurement SOP, international procurement SOP and
accompanying guidance, such as the generic procurement guidelines, give detailed guidance on the
procurement process, including flowcharts. These can be found in the OneNet here.

It is important that finance staff and budget holders understand the process, as they are responsible
for checking that the appropriate procedures have been followed before authorising associated
payments.

The purchase order and the goods received note are two key documents used as part of the
procurement process that are checked as part of the payment process. Details of these
documents are given below.

Purchase order
The purchase order is an external document used to place orders with suppliers and is the
commitment to spend. A purchase order must be used for all procurements however small and
regardless of means of payment i.e. cash, cheque or bank transfer.

Purchase orders should be raised once the price of goods or services to be procured has been
determined through the appropriate procurement process, and a decision has been made to go
ahead with the procurement.

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Payments: Procurement Process, Methods of Payment

Good Practice Guidance - Procurement process (continued)

This document is of immense importance and needs to be issued very carefully, as it can bind the
organisation into a payment for the supplied materials or services. The purchase order must clearly
set out an item description, model, specifications, quantity, prices, and a delivery schedule should
be clearly and correctly entered.

Purchase orders must be authorised by the relevant budget holder in line with the scheme of
delegation. Budget holders should be provided with all relevant documentation of the procurement
process that has been followed, so they can be satisfied that it is compliant with their and the
donor’s requirements.

The finance department must approve all orders before they are given to the supplier to be sure
that funds are available and that there is adequate cash flow to make payment once goods are
received.

Goods received note (GRN)

This form is used to acknowledge the receipt of goods by SCI at our warehouses or offices.
A goods received note must be completed at the time of receipt of purchased materials by the
person who receives and inspects the items, i.e. the “receiver”.

The “receiver” who receives and inspects the items should be someone other than the buyer and
preferably from the programme or department that requested the goods, to ensure segregation of
duties. Where and who will receive the goods should have been documented on the purchase
order.

The “receiver” inspects the items, checks the items against the information on the purchase order,
and prepares the goods received note. The item description, quantity and date of delivery must be
noted on the GRN plus any specific information if stated on the purchase order i.e. make/model,
specifications, packaging.

2.4.2 Methods of payment

The payment method will vary depending on the context but methods available are:
• Bank transfer – this is the preferred method as it is lowest risk
• Cheque
• Cash – this is a higher risk payment method and should be minimised to small payments (eg
petty cash) where possible.
• Electronic banking – this has specific risks and can only be used with approval from the centre.
Refer to bank section 6.2.7 for further details.

Payments are recorded in one of two ways:

• via the accounts payable module (also known as purchase ledger) – this will only be the case in
offices entering transactions directly into Agresso;
• directly against the relevant cash or bank account - for offices using the GLACOS then all
payments will be recorded this way. This method is also used for other payments such as:
• programme advances
• petty cash transactions

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Payments Recorded via Accounts Payable

2.4.3 Payments recorded via accounts payable

Invoices received are recorded first in accounts payable (also called purchase ledger) and transferred
to the general ledger once paid. In this way a creditor is recorded in the account for the period
between authorisation of the invoice and payment.

For procedures on how to record an invoice and process payments in Accounts Payable in Agresso,
please refer to the Accounts Payable Manual on the OneNet here.

Segregation of duties must be maintained to ensure no one staff member completes all sections of the
procedure. For example, different staff members should post invoices and process payments.
Country offices should allocate responsibilities appropriately, given the structure of their finance team.
For illustration purposes the processes below use the example of a finance team comprised of a
cashier, a finance officer and a country finance director.
The process for this is as follows:

Stage Process Notes

Invoice Invoice should be received into Finance. Suppliers should be told to

received and send invoices to Finance.
registered Cashier registers the invoice.
For example, invoice
Cashier files it in an ‘invoices awaiting number 2654 dated 11
authorisation file’. August 2010 would be saved
as:
2654_11082010

Sent for Cashier completes the top section of an Often the purchase will have
checking and invoice authorisation form (supplier name, been made by logistics or
authorisation invoice number, invoice date & amount), administration on behalf of
notes the registration date on the form the budget holder. If so
and sends it with a copy of the invoice logistics/ administration
(email or hard copy) to the person/ team should attach the
responsible for making the purchase to appropriate documentation
obtain: and forward on to the
• budget holder authorisation of the budget holder.
invoice;
• documentation to support the
invoice (see below)

Checking Budget holder undertakes appropriate If the budget coding was

checks (see below) and ensures that: completed on the purchase
• all SCI and donor procedures have been order, the invoice value is
followed not greater than the
• coding is accurate and complete purchase order value and a
• documentation is auditable. signed Goods received
note is available, the
budget holder does not
need to sign to authorise
the payment.

33
Payments Recorded via Accounts Payable

Stage Process Notes

Authorisation If the payment is within the
budget holders limit:

budget holder authorises the

payment and passes to finance

or

The invoice value is not greater than the

purchase order value and a signed goods
received note is available

or

If the expense relates to

the budget holder’s expense (eg their
travel or SCI paid rent) or exceeds that
person’s authorisation limit:

budget holder signs and passes

up the authorisation chain to a
person with appropriate delegation
of authority, who authorises the
payment and passes to finance

Posting in Finance officer checks that the correct There should be a

Accounts processes have been followed (see notes) segregation of duties
Payable and once satisfied posts the invoice. This between the person posting
results in the following entry: the invoice and processing
the payment.
Dr expenditure accounts
Cr 2000 Accounts Payable Checks:
• procurement processes
The invoice authorisation form number have been followed
must be included as the first item in the • all required documentation
description text box. is attached
• account coding is accurate
The authorisation form signed and dated and complete
to indicate that it has been posted and the • authorisation is correct as
Agresso reference noted on the per the scheme of delegation
authorisation form.

Procedures on how to post an invoice in Finance should sign the

Agresso can be found in the Accounts authorisation form to
Payable manual - section ‘Invoice Posting’ confirm that the checks have
on the OneNet here. been completed.

If there are problems with

any of the checks the
invoice/ bill should be
returned to the budget
holder with an explanation
of the problem which will
need resolution before the
amount can be recorded.

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Payments Recorded via Accounts Payable

Accounts The authorisation form, original invoice

payable filing and the supporting documentation must
be filed in an 'awaiting payment' folder.

The next stage of the process varies depending on how the payment is being made. There are
different processes for the following payment methods:

• system generated cheques

• manually prepared cheques, bank transfers and cash payments.

System generated cheques:

Stage Process Notes

Payment Finance officer runs the remittance Payments should be
preparation proposals in Agresso and prints the list of prepared regularly, eg
proposed payments. weekly. The payment run
should be prepared mid-
The list and associated invoice week so any issues arising
authorisation forms and supporting can be addressed before the
documents are passed to the country weekend.
finance director for authorisation.
Payments can be made at
Country finance director checks all other times if required for
details are correct (supplier, amount etc.) operational purposes. Refer
and if satisfied signs the remittance to section below on
proposal report. manually prepared cheques
and cash payments.
Finance officer runs the remittance
confirmation process and passes the Using the cheque file
documents to the cashier for processing. requires the country office
to have the correct cheque
Cashier generates the cheque file and stationery. If this is not set
prints the cheque file (with cheque up in Agresso the country
numbers), cheques and remittance office will need to contact
advices from Agresso. Agresso system support for
help in setting up. In the
For procedures on how to process meantime the country office
payments in Accounts Payable, please should use the manual
refer to the Accounts Payable Manual - payment process
section ‘Payments: Remittance process’
available on the OneNet here. As Agresso cannot take
account of the sequential
numbering in the remittance
process, a second cheque
book must be used for
manual cheques.

Checking and Cheques and supporting documents

payment passed to bank signatories.
authorisation
Bank signatories check all details are
correct (payee, amount etc. – see below)
and if satisfied sign the cheques.

35
Payments Recorded via Accounts Payable

Stage Process Notes

Payment Cashier issues cheque for payment to the

supplier. The supplier should sign the
remittance advice as evidence of receipt.
The country office must keep a copy of
the signed remittance advice for the
records.

The cashier must stamp the invoices as

PAID.

The cashier should pass the payment

documents to the finance officer.

Recording Finance officer confirms the payment in

payment Agresso which records the payment as
follows:

For procedures on how to process

manual payments in Accounts Payable,
please refer to the Accounts Payable
Manual – section ’Manual payments’
available on the OneNet here.

Dr 2000 Accounts Payable

Cr Bank

Finance officer must sign and date the

remittance confirmation to record the
posting.

Payments filing Invoice authorisation form, authorised

remittance proposal, signed remittance
confirmation, cheque file and signed
remittance advices should be filed in the
bank file in numerical order.

Manually prepared cheques and cash payments

Stage Process Notes

Payment Finance officer identifies items requiring Payments should be
preparation payment from the ‘awaiting payment’ prepared regularly, eg
folder and prepares the expense details weekly. The payment run
section of the invoice authorisation form. should be prepared mid-
The forms and supporting documentation week so any issues arising
are passed to the country finance can be addressed before the
director for authorisation. weekend.

Country finance director checks all Payments can be made at

details are correct (supplier, amount etc.) other times if required for
and if satisfied signs the invoice operational purposes.
authorisation forms.

36
Payments Recorded via Accounts Payable

Stage Process Notes

Cashier prepares cheques/ bank transfer
form and notes cheque numbers/ bank
transfer form number on the invoice
authorisation forms.

N.B. Payments may be made by cash if

cheque/ bank transfer is not possible,
although this is discouraged.

Checking and Cash payment:

payment authorised above via country finance
authorisation director check

Bank payment:
cheque/ bank transfer form, payment
voucher and supporting documents
passed to bank signatories.

Bank signatories check all details are

correct (payee, amount etc – see below)
and if satisfied sign the cheque/ bank
transfer form.

Payment Cashier issues cash/ cheque for payment

to the supplier. Supplier signs invoice
authorisation forms
as proof of receipt.

Cashier takes bank transfer forms to the

bank and obtains evidence of payment
from the bank (eg bank receipt/
statement showing recipient’s name, bank
account and date of deposit). Cashier
passes the payment documents to the
finance officer.

Recording Finance officer records the payment in

payment Agresso using the ‘manual payments’
process.

This will result in the following entry:

Dr 2000 Accounts payable

Cr Bank/ Cash

References should be included in

Agresso as follows:
payment reference field – cheque
number/ bank reference/ cash payment
text field – payment voucher number.

The invoice/ bill must be stamped to

indicate that it has been PAID and the
Agresso reference noted on the invoice
authorisation form.

37
Payments Recorded via Accounts Payable

Stage Process Notes

Payments filing Invoice authorisation form and

supporting documentation should be filed
in the bank file in numerical order.

2.4.4 Payments of international suppliers

International payments are payments to suppliers or partners that the SCI centre makes on behalf of
country offices. Country offices must pay supplier invoices or partner payments locally if they hold the
relevant currency in country and the value of the payment is low (ie under USD 100,000).

International payments are only made when:

1. The supplier invoice/partner payment is not in local currency but in another such as USD, GBP
or Euro and the value of the payment is over USD 100,000 – These payments will be made
from the centre (and are international payments). Payment from the centre means we can
forecast cash flow and currency requirements more efficiently.

2. The supplier invoice/ partner payment must be paid in a currency that the country office do
not have a bank account in – eg payment must be in Euros but bank accounts held in country
only USD or local currency.

3. Local regulations mean that the country office cannot make payments in USD or other
currencies to suppliers based outside of the country location.

4. The bank charges/other costs associated with making the payment are excessive – please talk
to the Treasury team at the centre if this is a concern.

Please refer to Data Maintenance Manual - section ‘Creating a new international supplier’ available on
the OneNet here for the steps to take to set up an international supplier.

2.4.5 Payments recorded directly in the general ledger

Payments recorded in offices using GLACOS, and payments recorded in Agresso via the general
journal function rather than accounts payable must follow this process, with the exception of:
• cash/ petty cash top ups (see section 6.4.3)
• inter-office transfers (see section 6.5.3 and 6.5.4).

For procedures on how to register and post a transaction into Agresso, please refer to Introduction
to Agreso FMS and General Ledger Manual - section ‘Registering / Posting a standard journal to the
General Ledger’ available on the OneNet here.

For procedures on how to record transactions into GLACOS, please refer to the Offline Spreadsheet
Completing Manual available on the OneNet here. To know how to post it, please refer to the Offline
Spreadsheet Posting Manual on the OneNet here.

The process is as follows:

38
Payments of International Suppliers, Payments Recorded Directly in General Ledger

Stage Process Notes

Payment Payment request is submitted to budget

request holder/ authoriser under scheme of
delegation by person requesting
payment. The appropriate
documentation must be attached (see
below).

Checking Budget holder undertakes appropriate

checks (see below) and ensures that:
• all SCI and donor procedures have
been followed
• coding is accurate and complete
• documentation is auditable.

Authorisation If the payment is within the

budget holders limit:

budget holder authorises the

payment and passes to finance

or

If the expense relates to

the budget holder’s expense (eg their
travel or SCI paid rent) or exceeds that
person’s authorisation limit:

budget holder signs and passes

up the authorisation chain to a
person with appropriate delegation of
authority, who authorises the
payment and passes to finance

Payment Finance officer: Payments should be prepared

preparation • registers and prints journal (Agresso regularly eg weekly.
process only)
• completes cash/ bank information on Checks:
the authorisation voucher • procurement processes have
been followed
and passes to country finance director • all required documentation is
with supporting documentation for attached
checking (see notes). • account coding is accurate
and complete
If the country finance director is • authorisation is correct as
satisfied, the cashier prepares the per the scheme of delegation
cheques/ bank transfer forms for bank
payments. Finance should sign the
payment voucher to confirm
that the checks have been
completed.

39
Payments of International Suppliers, Payments Recorded Directly in General Ledger

If there are problems with any

of the checks the invoice/ bill
should be returned to the
budget holder with an
explanation of the problem
which will need resolution
before the amount can be
recorded.

Payment Cash payment:

authorisation authorised via country finance director
check above.

Bank payment:
cheque/ bank transfer form,
authorisation form and supporting
documents passed to bank signatories.

Bank signatories check all details are

correct (payee, amount etc. – see
below) and if satisfied sign the cheque/
bank transfer form.

Payment Cashier issues cash/ cheque for payment

to the supplier. Supplier signs
authorisation form as proof of receipt.

Cashier takes bank transfer forms to

the bank and obtains evidence of
payment from the bank (eg bank
receipt/ statement showing recipient’s
name, bank account and date of
deposit).

Recording Country finance director posts the In Agresso, this is recorded via
payment journal (Agresso)/ finance officer the general ledger journal
records the payment (GLACOS) as process.
follows:
For sub-offices GLACOS will
Dr Expense/ balance sheet code be used to record the
Cr Bank/ Cash payment.

The invoice/ request document (eg

programme advance) must be stamped
to indicate that it has been PAID and
the Agresso/ GLACOS reference noted
on the authorisation form.

Payments filing Authorisation document and supporting

documentation is filed in cash/ bank
payments file in numerical order for
audit purposes.

40
Payments of International Suppliers, Payments Recorded Directly in General Ledger

Key documents required for a payments audit trail and budget holder checks

NB. For all payments the budget holder must check that:
• all SCI and donor procedures have been followed
• coding is accurate and complete
• documentation is auditable.

Type of payment Procurement Documents required Additional budget

Process holder checks
Supplier payment Yes • Invoice authorisation form • Invoice is in line with
• Purchase order/ contract purchase order
• Copy of competitive bid • There is proof of
analysis (if relevant) receipt of goods/
• Proof of receipt of goods/ services
services
• Invoice/ receipt
Partner payment No • Partner payment authorisation • Grant is approved
form • Capacity assessment
• Copy of approved sub-award completed
agreement • Prior period report
approved
Programme No • Programme advance form • Planned expenditure is
Advance issue with: in line with budget
o planned expenditure
o budget codes N.B. Finance must
o appropriate documentation check that the person
(eg authorised purchase does not have any
requisitions, per diem existing outstanding
payment schedule) programme advances

Programme No • Programme advance return • Expenditure is in line

Advance return form with planned
• Receipt(s) expenditure
• Receipt(s) in line with
purchase order (where
applicable)
• Receipt(s) - original and
sufficient for audit
purposes
• There is proof of
receipt of goods/
services
• Value of receipt(s) and
cash returned is equal
to original advance
Payroll No • Payroll summary See payroll section
Employee expenses No • Expense claim form • Expenses in line with
for work on behalf (employee is reimbursed at a budget and
of SCI later date) organizational policies

NB. An overview of the finance forms, supporting documents required, checks and required
approvals is available in the finance section of the OneNet here.

41
Payments: Expenditure Made on Behalf of Another Country/Region/the Centre

Authorisation of a payment - when authorising a payment the signatory must consider:

• has the expenditure been correctly authorised by the appropriate budget holder?
• have the SCI and donor purchasing procedures been followed?
• is there proof that the goods or services have been received in line with the agreed order?
• is the payee the correct person/ business, and are the bank account details correct?
• is the required original supporting documentation in place to satisfy audit requirements?
• For personal expenses for work on behalf of SCI (eg food and accommodation), has the
workplan been pre-approved by the relevant manager, is the expenditure in line with
organisational policy and limits?

2.4.6 Expenditure made on behalf of another country/ region/ the centre

All expenditure incurred by a country on behalf of another country/ region/ the centre must only be
incurred with prior authorisation from the relevant budget holder in that country.

The 2030 inter-country account is used to move costs between country offices, regional offices and the
centre.

The 2031 inter-country account contains all transactions transferred to each office via the 2030 account
process.

For procedure on how to process these transactions in Agresso, please refer to the Introduction to
Agresso FMS and General Ledger Manual section ‘Inter-country transfers’ on the OneNet here.

How to transfer/recharge costs through the 2030 account

The 2030 account is used to transfer/recharge costs between transitioned country offices/regional
offices/the centre as follows (please note text requirement):

Account code: 2030

Cost centre code: XXXXX (5-digit cost centre code of your office, where the cost originated)
Analysis code: XXX (3-digit analysis code of the office you wish to send the cost to)
Text : Brief description of expense/name of person who incurred expense/period expense relates
to/account, cost centre centre, project, SOF (source of funds) and DEA (donor expenditure analysis)
codes of the office you wish to send the cost to/name of budget holder authorising expense at office
you wish to send the cost to.

Example below of a taxi cost being recharged from Colombia country office to the centre finance
department:

Account code: 2030

Cost centre code: 17000 (Colombia country office)
Analysis code: 999 (centre)
Text: Taxi from airport to Colombia office/Gordon Abbas/January
2014/5590/99911/9999021/99900002/ 00000/approved by Caroline Stockmann

NB: Any recharges to members fall under the separate 1178 process for recharging costs to members, and
should NOT be transferred via the 2030 account (other than TAB rejections, which must be rejected via the
2030 account – see below).

42
Payments: Expenditure Made on Behalf of Another Country/Region/the Centre

The full process is illustrated as follows:

Stage Process Notes

Obtain For expenditure such as taxi cost can be made by
authorisation the country director/ sub-office manager.

For expenditure such as cross border procurement,

the budget holder must provide authorisation (see
section on distance authorisation in section 1.8).

Make and When recording the payment the entry must be Include as much detail as
record payment coded to the inter-country control account (NB. possible in the text field
Including the relevant country code), i.e. so the recipient country
can identify the payment
Dr 2030 Inter-country control account
Cr 1000 Bank/ 1050 Cash

Daily system Automatic system transfer of balance to Inter-

update country expenses received account 2031 and update
alerting recipient country representative of balance
on inter-country control account

Recipient The recipient country must post a clearing entry as If the recipient country
country follows: does not accept the
records posting (eg if the
expense Dr Expense originating country has
Cr 2031 Inter-country expenses received posted to the wrong
control account) they
This must be done in the currency (i.e. the would liaise with the
transaction currency) and date of the original originating country and
posting. post it back if required,
i.e.
This will clear the account. Dr 2031
Cr 2030

How to query costs received via the 2030 account (2031 account reconciliation)

The 2030 account should primarily be used for recharging; it is not monitored by accounts payable or
payroll in the centre.

If you have queries on amounts received in your 2031 account, in particular from the centre accounts
payable or payroll teams, before rejecting the cost please first raise the query with the relevant
office.

Please note that the 1178 process for transferring costs to members is a completely separate process. Do not
reject costs for members by sending them through the 1178 – they must come back via the 2030 to the centre
as this is the means by which they were originally posted.

43
Payments: Expenditure Made on Behalf of Another Country/Region/the Centre

How to reject costs through the 2030 account

If after you have received further information on costs received in your 2031 account, you are satisfied
that they do not belong in your office budget, to reject costs you must send them back to the
originating country office/ regional office/the centre via the 2030 account. Please refer to the following
narrative guidelines to assist those reconciling the rejected costs:

• Please include the word ‘Rejection’ followed by the original transaction number at the
beginning of the original narrative in order that these rejections are clearly separate from
amounts being recharged.

• Please include the reason for rejection at the end of the narrative, including detail of who
made the original posting and who you queried the posting with (e.g. Accounts
Payable/Payroll/TAB).

Please note that to reject costs you must send them back to the originating office via the 2030
account. Any costs remaining on your 2031 account or moved to your 2032 account are not
reviewed by the centre and these costs remain in your own country or regional office accounts until
they are sent back via the 2030 account.

EXAMPLE – Country office xxx have received a transaction of £100 re. Office Supplies as a debit in
their 2031 from the centre (analysis code 999) which needs to be rejected back to the centre,
therefore the transactions to post would be as follows:

DR: Account 2030 / CC xxx00 / Analysis 999

CR: Account 2031 / CC xxx00 / Analysis 999

Where xxx is the office code of the CO / RO receiving the charge

2032 account (Intercountry expenses rejected) – please note that the 2032 account should not
be used for rejecting transactions – anything posted to the 2032 account will remain in-country and not
be seen or reviewed by the centre.

Timelines

2031 accounts should be reviewed and cleared down regularly to ensure that any queries are raised or
rejections posted in a timely manner. A full review and clearance should be carried out on a monthly
basis to avoid issues at year end.

Where the centre has queries on amounts posted via the 2031 account to the centre, centre finance
contacts will email the originating poster for further information. Where two emails have been sent
without any response within a reasonable time period, the costs may be rejected back to the originating
office via the 2030 account.

44
Payments: Recharges between SCI & Members

Good Practice Guidance - Expenditure on behalf of another country/

region/ the centre

As part of the month-end process there should be a check of any balances on inter-country
accounts. These balances should be investigated and cleared, using the GL allocation process
(single account reconciliation in Agresso Financials GL)

Any problems with clearing the accounts (eg recipient country refusing to accept previously
authorised cost) should be notified to the country director in the first instance and then to the
regional finance director if necessary.

Note
Nothing should be posted to account 2030 after soft close to ensure the country office has time

2.4.7 Recharges between SCI & members

Process for SCI country offices requesting the reimbursement of costs incurred on behalf
of members

• at the point when a country office incurs a cost which needs to be recharged to a member (eg
in country accommodation and travel cost for member visit), book this expense to the
Member Control Account (a/c 1178), and SOF 9992013 (see section 9.6 for more details).
• when booking costs to the Member Control Account it is necessary to input an Analysis Code
(ie the member code to whom the cost is being recharged)
• The centre will monitor the member control account, and invoice members monthly.
Therefore, ensure all amounts incurred on behalf of members are booked by month end.
• Centre to send the claim of approved costs to the member on working day 7 for the previous
month (e.g. in period 10 in 2013, period 9 costs will be claimed on 6th November 2013).
• See section 2.4.8 for procedures on recharges specifically for technical assistance (TA’s)
Where a member has pre-paid a cost to then be incurred by an SCI country office, book the income
and expense directly to Accounts Receivable Account. Note – Detailed guidance on the procedure to
minimise transactions via the 1178 account and to clear the account are available on the OneNet
here.

Process as follows:

If member prepays costs

MEMBER PREPAYS COSTS

Dr Cash
Cr 1100 Accounts Receivable

COST INCURRED BY
REGIONAL & COUNTRY
OFFICES (NOTE BELOW)

Dr 1100 Accounts Receivable

Cr Cash

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Payments: Recharges between SCI & Members

No prepaid costs by member

COST INCURRED BY
REGIONAL & COUNTRY
OFFICES (NOTE BELOW)

Dr 1178 Member Control (SOF

9992013) (see note 1 below)
Cr Cash

WHEN MEMBER MAKES

PAYMENT

Dr Cash
Cr 1178 Member Control (SOF
9992013)

NOTE

1. If any 1178 entries are rejected by members, SCI centre will transfer rejected items to SOF9992013
(Account 9090, DEA 112361)
CO/RO/Centre should review any such postings and re-post to 1178 in the following period with
improved descriptions or reallocate to the correct account.

2. Description field when booking expenditure to Account 1178 (max 200 characters)

To include:
• Name of person who incurred expense;
• Name of the budget holder at member who authorized the expense (if relevant/if different to
person who incurred expense;
• Details of what the cost relates to;
• Where available, include member codes

• Location in which cost was incurred (if different to the country office booking the expense).

SOME EXAMPLES – GOOD!

• “Payment for Naqeeb Ahmed's air tickets from Bishkek-Stambul-Bangkok-Bishkek”
• “Part payment for S.Tailour's costs to attend the Humanitarian team meeting in Jan (as
agreed with CEO Naoki Wada )”
• “Doc 1160 cheq 259866 Ben James mobile phone bill”
• “Airfare for Tomas Hicks - Copenhagen Dec11”

SOME EXAMPLES – BAD!

• “SALARIES FOR Apr'12.”
• “Hotel fee April 2012”
• “PLAY”
NB.
1100: Used for claims from RO/CO
1178: Holding account for all accounts to be recharged to members

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Payments: Recharges between SCI & Members

Process for members recharging costs to SCI country offices

• Costs recharged from members to SCI are submitted centrally to SCI centre finance (costs
incurred by SCUK and SCUS are submitted monthly; costs from other members at least
quarterly);
• Costs relating to country offices and to be charged to country SOFs must be booked to the
Inter-Country Control account for review/approval by country office finance staff, whilst the
final posting will be made by the SCI centre;
• If, however, the expense is not recognised or cannot be approved, please contact SCI centre
finance who will arrange for further information to be obtained from the member or for the
cost to be re-allocated, as appropriate;
• Consideration for amounts recharged from members will be settled centrally by SCI centre
finance (by offsetting these amounts against contributions due from members to SCI) – no
cash payments are to be made from country offices to members.

Process as follows:

SECONDMENT COSTS EXPENDITURE INCURRED

ON SCI’s BEHALF
* Secondment Agreement
* Payroll costs & expenses eg travel, accommodation costs

MEMBER ADVISES SCI CENTRE

OF AMOUNTS DUE

SCUS & SCUK = MONTHLY

OTHER MEMBERS = QUARTERLY

SCI CENTRE ALLOCATES COSTS TO

RELEVANT COST CENTRE

RO COST CO COST

COSTS CHARGED COSTS CHARGED TO

TO COUNTRY SoFs (in 2
CENTRAL SoFs stages below)

(1) CLAIM FROM Dr 2030 Inter-Country Control Dr 2030 Inter-Country Control

MEMBER
RECEIVED BY Cr 3325 GIK – Member Cr 1179 Expenses Incurred by
Donated Services Members
CENTRE
(BOOKED BY CENTRE) (BOOKED BY CENRE)

(2) TRANSFER Dr Relevant Account Code

COST TO RO/CO Cr 2031 Inter-Country Control *
(BOOKED BY RO/CO)

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Payments: Recharges between SCI & Members

(3) OFFSET Dr 3001 Award Income Dr 1179 Expenses Incurred by

AGAINST SCI Cr 1175 Member Control Members
CLAIMS TO (BOOKED BY CENTRE) Cr 1175 Member Control
MEMBER (BOOKED BY CENTRE)

Notes

* Follow standard process for booking costs charged to a/c 2031 – if any amounts not
recognised/approved, regional office/ country office to contact centre to request further info or
arrange for costs to be re-allocated

2.4.8 Recharges for Technical Assistance hosting costs

Process for SCI regional and country offices requesting the reimbursement of
incremental costs incurred in respect of hosting member Technical Assistance staff
(TAs)

• Members may place their own TAs in SCI regional or country offices, as part of SCI’s and
members’ commitment to collaborative working and in recognition of the importance of the
transfer and sharing of knowledge to deliver Save the Children’s strategy
• TAs will generally be based in an SCI office for a given period of time, with full use of SCI
office facilities (e.g. desk space, printing & stationery, support staff time)
• in most instances, there will be no incremental costs incurred by the SCI office as a result of a
TA (or several TAs) being based there; e.g. most offices will have a few spare desks at any
given time and therefore no extra office costs
• However, in some instances there may be additional office & support costs over which the
SCI office would incur if there were no TAs located there and only SCI staff were present
e.g. in certain Regional Office locations it has been necessary for SCI to rent additional floor
space in order to accommodate all of the TAs which members require
• The principle is that members are choosing to make an additional contribution to support the
costs of a regional or country office up to a pre-agreed level. The SC members agree to split
this additional contribution on the basis of the proposed number of TAs in the region, and each
member’s commitment is confirmed through an email to SCI centre
• The process for charging members incremental costs is via the process set out below:

Stage Process Notes

Notes
Understand Each SC Member details the staff numbers and period
members’ (i.e. the number of months) for which they require
budgeted TA TA’s to be hosted in a CO or RO during the
numbers &
following year
locations
Members are to notify SCI during the annual budget
process (by 31 August) each year

Consolidate TA SCI centre consolidates member responses to

numbers & understand total TA presence in each SCI location
locations for the following year

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Payments: Recharges for Technical Assistance Hosting Costs

ROs & COs SCI centre communicates TA numbers to each RO,

Do not include pro-
identify who in turn communicates to any affected COs rated costs –
incremental
incremental costs must
costs The SCI hosting office then plans for the appropriate only include additional
level of resources and calculates the expected expenses which would
incremental cost (if any) of hosting the expected staff not otherwise have
(see further guidance below) been incurred

Data sent back to SCI centre via RO The detailed breakdown

& explanations will not
Data to include detailed breakdown of the be shared with
incremental cost and explanation of why these costs members (but held in
are considered incremental. ROs to check any case of queries)
incremental costs identified by COs appear
reasonable

Calculate a cost The total incremental cost for each location is then
per TA per divided by the total number of ‘member months’ to
month arrive at a hosting cost per TA/per month

Calculate each Hosting cost per person/per month, together with

Member’s expected staff numbers/months, used to calculate
contribution & member charge for the budget year for each
communicate
location
this to Members
Figures consolidated for each member to cover all
locations in which they intend to place TAs to come
up with a total TA contribution for the coming year

Members Each SC Member commits to provide funding for the

commit to pre-agreed amount of incremental costs on a
funding via email member share basis, determined by budgeted usage

Funding commitment provided via email from the

member CFO to SCI centre

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Payments: Recharges for Technical Assistance Hosting Costs

Claims included Funding requests will be via the non IPCO (IP
within monthly Country Office) monthly funding request and form
fund requests part of a pooled SOF

Claims will be co-ordinated by SCI centre

Incremental ROs and COs must book the agreed incremental

costs booked to costs to SOF 99900032
TA SOF Costs and member contributions will offset to nil
over the year

TAs placed in On the placement of each individual TA, the

country member who employs the TA, SCI and the TA will
enter into a tripartite agreement which sets out the
roles and responsibilities of each party. It will also
set out what will be supplied by the regional or
country office for each individual TA

There is no charge for the placement of each

individual TA as the member has contributed to the
overall regional or country office costs through the
annual funding process (as above)

Changes to TA SC members are not able to amend the committed

numbers funding downwards during the course of the year
(for example if a TA leaves) since this could result in
CO or RO not fully recovering their committed
incremental costs

Other TA- Additional expenses which SCI may incur on behalf

specific costs of member TA will form part of the usual monthly
recharged via a/c recharge process between SCI and member
1178 (see section 2.4.7 above)

True up However, if the actual RO/CO incremental hosting

exercise at year costs are lower than expected the surplus will be
end offset against the cost contributions due from SC
members in the following budget year.

Guidance on incremental costs

• the recharges of TA hosting costs to members will vary between individual offices, but one of
the largest component is likely to be the incremental the costs of renting any additional office
space, together with any associated service and utility costs
• the ‘Tripartite Agreement on the Hosting of Technical Assistance’ states that the following
support will be made available to TAs:
 During the Deployment, SCI agrees to make available to TA such office facilities as set
out in Annex 1 to the Agreement

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Payments: Private Expenditure Made on Behalf of Employees

 SCI agrees to make available to TA IT facilities in accordance with the Common IT

Services Protocol for Save the Children in place from time to time.
 SCI agrees to make available to TA such logistical and operational support as set out in
Annex 1 to this Agreement.

• Annex 1 sets out the ‘office facilities’ to be provided to a TA’s by SCI. In general terms, these
facilities may include office facilities, services and administrative support under the following
headings:

 HR, finance, IT, admin (including visa/ work permit, arrangement of housing),
communications, safety and security and/or management support
 Desk space commensurate to time in office & desk chair e.g. “hot desk” if appropriate,
and Storage commensurate to time in office
 Electric outlets and internet/network connection
 Access to the same shared spaces in SCI Office as normally provided to SCI Office staff
 Access to office equipment, supplies and utilities, and first aid facilities as normally
provided to SCI Office staff (Member to provide PCs, laptops, personal printers (if
required by TA), mobile phone etc. for the use of TA)
 Maintenance of Member registration

2.4.9 Private expenditure made on behalf of employees

SCI must not make payments on behalf of employees, with the exception of business
expenses. This rule covers all instances where SCI is requested to make an external payment
that will later be reimbursed by the employee as private expenditure. An example of this
would be flights where one leg is for business purposes and another leg is personal. In this
instance either the employee should pay the full flight and reclaim the business element, or
the employee should provide the funds for the personal element in advance of the ticket
being booked and paid for.

Exceptions to this rule only apply when a business cost is incurred but there is a private
element that cannot be quantified at the time the payment is made. An example of this is a
mobile phone bill where the element that is private usage is only determined after the
payment has been made.

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