STRUGGLE AGAINST POVERTY Financial Management Manual January 2012Table of Contents 1. INTRODUCTION. 3 1.1 SAP'S BacxcrouNp..... 28) 1.2 RATIONALE FoR THE MANUAL, 3 1.3. UPDATING THE MANUAL. 3 1.4 DISTRIBUTION OF THE MANUAL a 2 GENERAL PRINCIPLES. 3 2.1 ACCOUNTABILITY 3 2.2 ACCOUNTING PRINCIPLES. a4 2.3. WORK PLAN AND BUDGET... 5 2.4 Auornne eS 3 STRUCTURE OF THE FINANCE FUNCTION. 6 3.1 SrrUCTURE a 6 3.2 THEREGION'| GEveraL ASSEMBLY... 3.3. THE REGIONAL GOVERNING BOARD 3.4 FINANCE Comiii TEES... 4 DELEGATED AUTHORITY. 5 PLANNING AND BUDGETING 5.1 Opyecrn TING 5.2. GENERAL Ri m3 6 FINANCIAL REPORTING -sessesseestne 6.1 IntRopuct 6.2 TyPESOF Fi RIS 6.3. MONTHLY Ro-wxis 6.4 QUARTERLY RePoRTS. 6.5 ANNUAL REPORTS 6.6 APPROVAL C a 6.7 CARCULATION oF RrporT 7 FINANCIAL A ING PROCEDURES. 7A. Chart c 10 7.2. System Ov" 7.3. INcom 74 75 7.6 7.7 PROCUR 7.8 PayROU 7.9 JouRNal V 7.10. VorE 7.3. Perty 7.4 BANK Ac8 MANAGEMEN 8.1. ACcOUNTIN 8.2 Use OF OFF 9. ANNUAL AUD. List of Tables Table 1: Delegated Table 2: Receipts Table 3: Paymen: Table 4 Bank Rc Table 5: Purchase P: Table 6; Request for Table 7:Local Pu Table 8: Goods Re Table 9: Journal Vo Table 10: Vote Bo: Table 11:Petty Ce Table 12: Petty C Table 13: Petty C: Table 14: Cash C Table 15Fixed As: List of Figures Figure 1: The Acc Figure 2: Proces: Figure 3: Cheque TROL OF FIXED ASSETS... ASSETS... EQUIPMENT AND CONSUMABLES... nent Request. Co 25 1.29 12 ...Error! Bookmark not defined.1. Introduction 1.1 SAP's Background Struggle Against Poverty is a non-governmental Organization registered in Uganda whose Vision is to have Sustainable wellbeing of women, men, children, youth, elderly and disabled people, mission is to Integrate development through community initiatives and overall goal is to have Improved Community Livelihoods. Its area of operation is Busoga sub-region in the Eastern part of Uganda where poverty levels have proved b be high. 1.2 Rationale for the Manual This manual is written to satisfy SAP's desire for a simple, workable and highly effective accounting and financial management system. The manual is designed to ensure that:~ a) Resources are used efficiently, economically and effectively to achieve organisational objectives b) Resources are safeguarded against loss or abuse ©) All transactions are adequately supported by appropriate and relevant documentations d) Only property authorized transactions are processed for payment: e) There is accuracy and completeness in financial recording f) Budgetary control is exercised through expenditure monitoring 9) Financial reports are timely, intelligible and accurate h) Staff have source of reference to assist them in performance of their duties |) Auditors, donors and other stakeholders who may wish to understand the financial system of SAP have a reference document. 1.3 Updating the Manual The manual will be reviewed regularly to take into account changing circumstances and needs. Staff and other stakeholders are encouraged to submit recommendations for Improvement to the Chairperson through the Secretary General. All desired changes shall be placed before the Board for ratification. Only changes that have received Board approval may be introduced into this manual. 1.4 Distribution of the Manual ‘The manual, once approved by the Board, shall be distributed to all members of the Board, staff and member organizations. 2 General Principles 2.1 Accountability SAP shall be accountable to all key stakeholders including its members, donors, governments and, the general public. In this regard, principles of stewardship shall be applied in the use of all resources, financial or otherwise, within SAP's custody.: 3 ! 7 2.2 Accounting Principles 2.2.1 Authorisation of Expenditure and Payments The authority to incur expenditure must be received from the Board before any expenditure Is incurred, Authority to incur expenditure is given through the approval of the annual plans ‘and budgets by the Board. The Board delegates responsibility for day to day management of the annual work plans and budgets function to the Secretary General who shall have the responsibilty to ensure that all payments made are regular and in accordance with approved budgets and the individual agreements signed with the donors. 22.2 Expenditure Recognition Expenditure comprises of costs incurred directly for the activities of SAP. No payments shall be made out of the funds available to the organisation unless that activity is part of the ‘approved annual budget or estimates supplementary thereto. SAP will recognise, pay/reimburse and include in the financial statements, costs that are adequately supported, reasonable and included in the approved budget. Expenditure will be recognised in the period in which, goods or services, that are payable by SAP, are received. 2.2.3 Receipts Recognition Receipts comprise of the following: * Grants from donors. SAP shall recognize the receipts from different donors and code them separately. ‘* _INterest received from bank deposits. ‘+ Membership fees. ‘© Any other income for the benefit of SAP, Income shall only be recognised when it has been actually received. However, memoranda records shall be maintained to track any income due but not received. 224 Capital Expenditure All procurement of items of significant value, whose lifespan exceeds one year shall be recognised as capital expenditure. Although these shall be expensed upon payment, ‘corresponding journal entries shall be made to bring them back into the books as fixed assets. Additionally, a fixed assets register shall be maintained and updated with every procurement and disposal of such assets. 2.25 Stores ‘SAP shall not accrue stock items. All stock items, such as stationery, shall be expensed upon Payment. The organisation shall however; keep records of all stores items and shall monitor their issues.22.6. Significant Accounting Concepts Consistency SAP shall use the same accounting policies consistently from year to year Historical Cost The assets of SAP shall be recorded at their historical cost for purposes of the financial accounts. Full Disclosure Full disclosure shall be made of all matters relating to the financial position of the SAP. Obligations and commitments of the organisation shall be reported in full in the balance sheet and in the notes to the financial reports. 2.2.7 Accounting Currency The accounts of SAP shall be in Uganda shilling, External reporting shall however be in the currency agreed to with funding partners. 2.3 Work Plan and Budget ‘SAP will prepare an annual work plan* of its activities and a corresponding financial budget. ‘All budget revisions must be agreed with the donor and approved by the Board. 2.4 Auditing At least once in every year the accounts of the SAP shall be examined and the correctness of the income and expenditure account and the balance sheet ascertained by a qualified Auditor(s), licensed to conduct a public auditor under the laws of the country. Auditors shell be appointed by the Annual General Assembly and their duties regulated in accordance with the Companies Act, requirements of SAP’s donors and that of the members of the board, " The work plans shall constitute the activities that SAP wishes to undertake for the financial year, 53-1 Structure 3.2 Finance Committee ie ‘There shall be a finance committee that will be called to streamline anything if need be 3.2.1 Composition ‘The Finance Committee shall comprise the Treasurer as the Chairperson, accountant as the secretary and the secretary general as. a member. The finance committee may co-opt additional members as they deem fit. 3.2.2 Roles and Functions ‘The functions of the finance committees are to: i... Review. budgets and work plans li, Review the quarterly financial and progress reports lil, Regularly monitor/evaluate actual performance against budgets and advise on the use and acquisition of the organization’s funds and assets iv. Fundraise for the organization V. Examine management reports, check and control of financial transactions. 3.2.2.1 Roles of Finance Committee Chairpersons The chairperson of the Finance Committee: i.) Shall chair or delegate in writing to any other committee member, all the finance committee meetings. li.) Shall from time to time up date the board on the financial status of the organization. Ii.) Shall delegate in writing any member of the Finance Committee or any other person ‘on board to actin his/her absentia. iv.) Shall advice on matters regarding fundraising 3.2.2.2 Roles of other members of the Finance Committee: |.) Attend all the finance committee meetings. li.) Participate in decision making on the committee. li.) Be assigned any other special responsibilities/duties by the committee when deemed necessary. Iv.) Shall be delegated duties in the absence of the chairperson. 3.2.2.3 The Role of the Accountant * Shall present the financial reports to the finance committee, ‘* Shall record all the procedures and proceedings of finance committee meetings.aan 3° Structure of the Finance Function 3.1 Structure 3.2 Finance Committee ‘There shall be a finance committee that will be called to streamline anything if need be 3.2.1 Composition The Finance Committee shall comprise the Treasurer as the Chairperson, accountant as the secretary and the secretary general as a member. The finance committee may co-opt additional members as they deem fit. 3.2.2 Roles and Functions The functions of the finance committees are to: |. Review budgets and work plans li, Review the quarterly financial and progress reports li, Regularly monitor/evaluate actual performance against budgets and advise on the use and acquisition of the organization's funds and assets lv. Fundraise for the organization v. Examine management reports, check and control of financial transactions. 3.2.2.1 Roles of Finance Committee Chairpersons ‘The chairperson of the Finance Committee: |.) Shall chair or delegate in writing to any other committee member, all the finance committee meetings. li.) Shall from time to time up date the board on the financial status of the organization, li.) Shall delegate in writing any member of the Finance Committee or any other person ‘on board to act in his/her absentia. .)Shall advice on matters regarding fundraising. 3.2.2.2 Roles of other members of the Finance Committee: 1.) Attend all the finance committee meetings. |i.) Participate in decision making on the committee. ii.) Be assigned any other special responsibilities/duties by the committee when deemed necessary. Iv.) Shall be delegated duties in the absence of the chairperson. 3.2.2.3 The Role of the Accountant + Shall present the financial reports to the finance committee, + Shall record all the procedures and proceedings of finance committee meetings.‘* Shall be the custodian of the records of meetings. ‘+ Shall advise the finance committee on the realities on funds utilization and acquisition (management) based on the working experience. ‘+ Shall write project proposals for consideration by the finance committee. ‘+ Shall prepare monthly cash flow budgets. ‘+ Shall be secretary to the finance committee. 3.2.3 Meetings Each Finance Committee shall meet quarterly or more often if need arises. The Chairperson of the committee shall in consultation with the Secretary General convene the meetings. 4 Delegated Authority ‘Authority to commit or authorize the use of SAP resources lies under the Secretary General on half of the Board 5 Planning and Budgeting 5.1 Objectives of Budgeting ‘The objective of the budget process is to: a) Develop realistic financial plans that will facilitate allocation of resources according to SAP's programme and organizational priorties; b) Provide a control tool that ensures that spending is in line with time and financial fans; 2 Ensures that the operational okies ae acted tar d) Provide periodic variance report of actual and budgeted amounts to form a basis for analysis and decision making; e) Provide a mechanism for fundraising 5.2.General Requirements * All staff and Board members shall participate in the preparation of SAP’s annual budgets and work plans. * The budget willbe in line with the respective program donor requirements / conditions and funding ceilings. + The period for preparing the budget will be between September and December every year of the life time of the program so that it may be ready by the new fiscal year. + In case of different funded projects / programmes, each shall have its own detailed work pian and a corresponding budget, which will be in line with the activities agreed on for the year by the donors. + The work pian will indicate the activity, the budget and timing as well as the person carrying out the activity. * A meeting of all projects / programs will be held and will be chaired by the Secretary General in which the consolidated budget will be discussed and agreed on. * While it will be the responsibilty of each project /program to come up with @ work plan and a budget, the Accountant will put it together in a consolidated form. + The Secretary General will send the work plan and the budget to the Finance committee for review before presenting to the Board for approval"The Expenditures incurred for each budgeted activity should be tracked on a monthly basis and reported using the developed format of expenditure tracings 6 Financial Reporting 6.1 Introduction ‘Accounting involves the collection, analysis, classification, recording and reporting of data pertaining to financial transactions. The reporting aspect of the accounting function is achieved through the preparation of financial reports. Financial reports are a useful basis for decision-making. Financial reports make it possible to know how much money has been received and spent. The preparation of financial reports is therefore an important requirement for SAP's own internal management as well as for its partners. Its also a statutory requirement. 6.2 Types of Financial Reports Financial reports of SAP shall fall into three broad categories: Reports providing information on the financial position of SAP Reports providing information on the financial performance of SAP Reports on cash inflows and outflows Notes to financial reports Within the above categories, the reports are further categorized into, monthly quarterly and annual reports. 6.3 Monthly Reports Each month, the accountant shall submit an income and expenditure summary report to the Secretary General. Each income and expenditure summary shall be accompanied by detailed income and expenditure reports of the corresponding projects/donors. ‘The accountant shall also prepare balance sheet reports, in respect of each month, giving details of the funds, liabilities and assets. Finally, the accountant shall, in respect of each month, prepare 3-month rolling cash flow projections. Monthly reports shall be circulated to all members of the Board and staff before 10" day following the month to which they relate. 6.4 Quarterly Reports These are subject to the same rules as the monthly reports. Circulation shall be by the 10" day following the end of the quarter to which they relate. 6.5 Annual Reports Whereas the monthly reports are designed to support management planning, decision ‘making and control, the annual accounts have the objective of promoting accountala external stakeholders and are therefore geared towards meeting the information needs of this category of users. Key statements for the annual accounts are as follows: ‘Summary of financial activities, Statement of financial position, Statement of cash flows Notes to the accounts Detailed statement of financial activities, Progress reports oyeene The first four are requirements of the International Accounting Standard. The last two are aimed at satisfying the information needs of funding partners as well as those of the government bodies. ‘A major difference between the annual statement and the monthly ones is that while the latter uses budget amounts for comparison, the former uses previous year amounts. The exception being the last two reports as donors are more interested in the approved budget than in the previous year. 6.6 Approval of Reports All the progress and financial reports will be approved by the Secretary General and Board before they are circulated to Board and general assembly respectively. 6.7 Circulation of Reports Financial reports of SAP are confidential documents. They may only be circulated as directed by the Secretary General.7 Financial Accounting Procedures 7.1.Chart of Accounts 7.1.1, Account Classification Financial transactions need to be analysed and classified in a manner that facilitates the production of the reports that have been discussed above. Therefore the Accountant shall develop account headings under which each type of transaction should be classified. This will be done through a Chart of Accounts. Activities result in expenditure that may be classified under 2 main headings: . Programme Costs . Administrative Costs ‘Activities may also result in the organisation acquiring assets, owing people money or other people owing it money. There is therefore need for further dassifications in the Chart of ‘Accounts . Assets . Liabilities ‘The above classifications should cover all financial transactions. However, in order to prepare informative reports, further analysis is required. For example, under Administrative Costs Salaries, Stationery, Telephone, Transport and others need to be included. 7.1.2. Cost Code Classification In addition to the above account classification, there is need to track income and ‘expenditure by donor or project. This is done through cost code classification. Each donor has a specific code, which is input as transactions are recorded. This way, SAP will able to track and report on all the activities relating to any partiaular donor 7.1.3 Inputs Inputs into the system arise from the following source documents: Petty Cash Payment Vouchers Receipts Cheque or Electronic transfer Payment Vouchers Suppliers Invoices or LPOs Payroll ‘These are then processed through books of original entry. ‘The books of original entry into which, source documents are posted comprise of: Petty Cash Book (Cash Books General Journal Purchase Journal Payroll Journal From books of original or prime entry, posting is made to the general ledger. 10a » 7.1.4 Outputs ‘Once postings have been made into the general ledger, the balance on the individual ledger accounts are extracted into a TRIAL BALANCE. From the trial balance, the following reports are compiled: + Balance Sheet + Income and Expenditure Statements + Project reports 7.1.5 Computerised Accounting ‘Computer based accounting systems have several advantages over manual systems. Use of computers simplifies the accounting tasks, saves time and reduces the risk of error. ‘Computer based systems are also able to produce reports immediately after a posting is made, For this reason, SAP will installed an appropriate accounting software to be used at the Secretariat for the processing of all its financial transactions, from data capture to financial reporting, ulsuoday jeoueuig aouejeg jeu} Eo. 4 yooa se Aad | yooa yse), sidiaay | a0}0Auy quawheg sal peta |! inno er PAD Bununocoy oy :T eanbi47.2 Income 7.2.1 General Principles ‘+ Asa policy, income must be wholly and accurately recorded and reported. ‘* An official SAP receipt must be issued for any cash or cheque received '* Funds received through electronic transfer must be acknowledged in writing as soon as information is received ‘+ Only persons that have been specifically designated to receive money on behalf of SAP may do so. Income will be recognised and reported in the period in which it is received Monies received should not be deposited into petty cash. All cash must be entered into the ‘cashbook, and deposited into the official bank account. Banking should be at the earliest. ‘opportunity but not more than 2 days after receipt of cash. 7.2.2 Custody of Receipt Books ‘The Accountant will keep all new receipt books. This official will also be responsible for maintenance of the receipts register. He/She shall ensure that the receipt books are kept under lock and key. Only one receipt book will be in circulation at a time. It will be maintained by the cash custodian who will receive and receipt all incoming cash and cheques. 7.2.3 Banking All collections must be banked intact, and on the next working day. The banking/deposit slip shall then be filed in a permanent file. 7.2.4 Posting Details of income received will be extracted from the receipt book and posted to the appropriate cashbook. ed Al expenditure of SAP funds is subject to the following rules: ~ The expenditure must have been budgeted for ~ Expenditure must be against available funds and within the letter and spirit of any agreement relating to those funds ~ Expenditure must be incurred only for the furtherance of SAP's programmes or objectives ~ Expenditure must be reasonable in amount ~ Expenditure must be reasonable in nature ~ Expenditure must be property initiated ~ Expenditure must be properly authorised ~ Expenditure must be supported by documentary evidence from the point of commitment through to the receipt of good/services and eventual payment of the supplier - Expenditure must be fully and accurately recorded 7.3.1 Payment Vouchers All cheque payments must be recorded on a payment voucher (Table 3). These vouchers have to be supported by documents, which provide evidence of receipt of the goods or services being paid for as well as evidence that the good/services were properly procured in line with approved procurement procedures. Vouchers must also be supported by third party documents such as invoices. The voucher must be authorised in conformity with the Provisions of this Manual. Payment vouchers will be pre-printed. Once payment has been B‘made, the voucher with its supporting documentation shall be stamped "PAID", recorded in a cashbook and filed in a payment voucher file in order of serial numbers. Table 1: Payment Voucher PAYMENT VOUCHER (Cheques) Date: Voucher No Cheque NO:. PAYER Amount UGX. Being payment of: ANALYSIS Description of ‘Account Sub Account [Cost Code [Amount Goods/Services UGx. Total Prepared by: __ Approved by: __ — Cheque collected by:74 Cash Books General Provisions Every bank account will have @ corresponding cashbook. Only properly authorised payment vouchers may be entered into the cashbook. a) Mandatory Information Information to be entered into the cashbook is as follows: Payments + Date of payment + Payee/particulars + Cheque number + Amount + Account chargeable + Cost Code (Donor) Receipts Date of Receipt Source of Receipt Receipt Number Amount tion Bank reconciliation’s are necessary for the purpose of confirming the accuracy of the ‘cashbook as well as the bank statements. Reconciliation’s should be carried out at the end ‘of each month by the Accountant and approved by the secretary general. i The cashbook balance must also be reconciled to the ledger balance on a monthly basis. FryTable 2 Bank Reconci BANK RECONCILIATION AS AT ACCOUNT NAME? «..csssssones ACCOUNT NUMBER: Balance as per Bank Staternent Less: @. —_Unpresented Cheques: Date. Cheque No, Description Amount Add: a. Deposits not credited on bank statement Date Narration ‘Amount Bank/Cash Balance carried forward7.5 Procurement 7.5.1 Initiating Procurement Procurements are initiated through a properly completed procurement requisition and this shall apply for goods and services (Table X), 7.5.2 Selection of Suppliers for goods or services Procurements are carried out on the basis of bidding. If the estimated value of any procurement is 2. 1,000,000 Uganda shillings then one quote can be obtained b. 1,000,000 Uganda shillings to 20,000,000 Uganda Shillings shall requires to get at least 3 quotations from different suppliers. 20,000,000 Uganda shillings to 50,000,000 Uganda shillings shall require at least three sealed request for quotations d. 50,000,000 Uganda shillings and above shall require at least three sealed bids that shall be analysed by the finance committee The selection under the categories above shall be based on the above supplier's fair price, quality experience and reliability. 7.5.3 Approval of Procurement Requisitions Category a shall be approved by the Secretary General and collection of quotes to be performed by the Accountant while category b to d shall be approved by Secretary General as well as collection of quotes. 7.5.4 Ordering of Goods/Services ‘An offcial LPO (Table XII) shall be used for ordering goods while a service contract shall be used services 7.5.5 Receipt of Goods/services All goods received shall be acknowledged by a Goods delivery Note from the supplier Goods delivery shall constitute evidence of Receipt of goods and must be attached to all other relevant documents and SAP shall acknowledge receipt by putting an official stamp as well as a completion report for services.Table 3: Procurement Requisition ‘SAP ' Procurement Requisition Description Amount UGK Approved by Secretary General TotalTable 4; Request for Quotation SAP P.O. Box 128 REQUEST FOR QUOTATIONS Date: TOWN. Kindly let us have your quotation for the following: = , = Description | un ary. | unit vaT Discount | Net Price | Unit Price cts [us$ [cts | us$ [Cts | uss [cts Date of Delivery: Place of Delivery. igned:. -Date:Table 5: Local Purchase Order Serial NO.t sss. Date. [To: . Please supply the following: Description —_| Unit | Quantity Unit Price Amount uss [Cts [US$ [Cts | Total Date of Delivery: Place of Delivery: This LPO will be cancelled if goods have not been received as per terms specified Prepared By: Approved By Acknowledged by On behalf of the SUPPLIER Original — Accounts Duplicate-Supplier Triplicate — Book Copy7.6 Payroll Personnel costs constitute a major element of cost. It is incumbent upon the Accountant to keep, systematically, comprehensive records in support of all payroll costs. No recruitment may be carried ut for a position that does not have corresponding funding. 7.6.1. Payroll Changes ‘Nl changes to the payroll must be authorised in writing by the Secretary General. ‘The Accountant may not make any adjustment to the payroll without such authority. Instructions that result in changes to the payroll will be kept by the Accountant in a file known as “Payroll File”. Changes in respect of the Secretary General may only be authorised by the Board. 7.6.2. Staff Advances Staff Advances should only be paid out in accordance with the rules set by the Board. The Accountant will ensure that recoveries are carried out in strict conformity to the terms of any advance given. No advances repayable over a period exceeding 3 months may be made out of donor or designated funds. 7.6.3 Preparation of Payroll The Accountant will ensure that a payroll is prepared by the 25" of every month. All figures in the payroll must have been properly authorised by letters of employment or other instructions from the Secretary General. 7.6.4 Authorisation of Payroll Once the payroll has been prepared, it will be passed to the Secretary General who will verify its accuracy and if satisfied, sign it to authorise the processing of salary payments. Fin 7.6.5 Payment of Salaries Salaries must be paid before the end of each month. To avoid the risk inherent in carrying large sums of money and also to minimise the risk of payroll frauds, all staff are encouraged to operate bank accounts through which their salaries are paid. Salary transfers shall be executed in good time 50 25 to reach the recipient’s account before the last day of the month. Any member of staff who may not have opened a bank account will be issued with an open cheque in his/her name. 7.6.6 Statutory Deductions The Accountant will ensure strict compliance with the law as relates to taxes and other statutory deductions. Should any penalties be incurred due to non-compliance through the negligence of an employee, such penalties shall be recovered from that employee.7.7 Vote Book We need to ensure that expenditure is incurred only against funds that are actually available. The Vote Book (Table 10) provides a tool for ensuring that expenditure is only incurred against available funds. Each budget line is allocated it’s own page in the Vote Book. On receipt of funds, the funds are allocated to the vote heads to which they relate and entered into the Vote Book. The balance of funds available is then calculated and entered into the column referred to as “Balance”. On expenditure the amount spent is entered into the column referred to as “Spent”. This amount is then subtracted from the previous balance to obtain a new balance. Table 10 Date [Particulars [Ref | Received ~ | Spent Balance uss [cts |Us$ | Cts | uss Cts:BANK AND CASH HANDLING PROCEDURES 7.3 Petty Cash 7.3.1 General Policy It is a policy that all payments shall be made by cheque or wire transfer. However, in order to meet payments of moderate amounts not exceeding UGX 500,000, a petty cash float shall be maintained in the Secretariat. Petty Cash will be kept in a lockable cash box The level of the petty cash fioat shall be UGX. 5,000,000. This float shall be ‘maintained under the custody of a cash custodian and operated at the authorized level on a reimbursement basis. The Accountant shall liase with the Secretary General to ensure that there is adequate insurance cover for the cash float as well as cash in transit. Petty Cash Payments Petty cash will only be pad out in respect of goods or services included in the annual budget. Payments for goods or services that have not been budgeted for will only be made with the approval of the Board. Payments out of petty cash will be made through a pre-numbered cash payment voucher (Table 8), which must be supported by evidence of receipt of goods or services as well as third party documents such as supplier's receipts/invoices. The vouchers shall be used in order of their serial numbers. Each payment voucher will indicate the vote head to be charged. Before payment is made out of petty cash, necessary approvals must be obtained by the Accountant Administrator and authority received from the Finance Manager. Such approval and authority will be made through the signing, by the appropriate official, of the relevant space on the petty cash voucher. Once a payment has been made, the voucher and the supporting documents will be stamped “Paid” in order to minimize the risk of duplicate payments. The payee will sign in the appropriate space and also have his/her I.D. number recorded.PAYMENT VOUCHER (Cash) [Date: Voucher No PAYEE: ‘Amount UGX Being payment of: ANALYSIS: Description of ~~‘ Account ] Sub Account Cost Code | Amount Goods/Services |__ ux. _ ~ Total Prepared by: __ Approved by: Cash collected by: 7.3.3. Petty Cash Book Each time a payment is made, an entry to record this transaction, will be made into the petty cash book. This will be in the format shown below. Table 6: Petty Cash Book Date | Particulars Voucher | Cash In Cash Out Balance Number [US$ | Cts | uss | Cts us$7.3.4 Replenishment of Petty Cash The cash custodian will make out a written Procurement requisition that will be supported by a cash count certificate 7.3.5 Cash Counts A cash count will be carried out at the end of each month as well as every time reimbursement is required. Additionally, the Programs Manager shall carry out surprise cash counts at least once every week. These cash counts will be carried out in the presence of the cash custodian and recorded into the offical cash count certificate which will be endorsed by both the cash custodian and the Secretary General. Table 7: Cash Count certificate Date: a t Total Value UGK. +» 20,000/= 50,000/= Counted By: Position: Witnessed and Agreed By:‘After the monthly petty cash count, the Accountant will reconcile the physical cash on hand with the balance in the petty cash book. Any discrepancies must be reported immediately and in writing to the programs manager. The programs manager will within one week, carry out investigations and report the findings, with appropriate recommendations, to the secretary general 7.4 Bank Accounts 7.4.1General It sa policy of the SAP that all receipts shall be deposited into a bank account and that payments shall, as far as possible, be made by cheque. To facilitate this process, bank accounts shall be operated. 7.4.2Number of Bank Accounts ‘The number of bank accounts shall depend on operational convenience. Funding agreements may require the opening of specific accounts for particular funds. 7.4.3 Authority to Open Bank Accounts Bank accounts may only be opened on the written authority of the Board 7.4.4Names of Accounts All bank accounts must contain the name of SAP. A description designating the function or type of account may be added if thought necessary. 7.4.5Signatories All accounts shall be operated by at least two people. The signatories shall observe any prevailing authority levels that may have been set by the Board. 7.4.6 Overdraft Bank accounts must remain in credit. Overdrafts can only be authorized by the Board under highly exceptional circumstances. 7.4.7 Cheques All cheques shall be crossed. On receipt from the bank, cheque books shall be inspected to ensure that no leaves are missing. They must be kept securely, under lock at all times 8 Management and Control of Fixed Assets 8.1.Accounting for Fixed Assets 8.1.1 Acquisition and Disposal of Fixed Assets All acquisitions and disp must be authorized by the Board. Acquisitions must have been included in the budget and funding received. Disposals must take into account any pertinent provisions in relevant donor agreements. sals of asset 8.1.2 Capitalization Policy Assets whose cost is less than UGX.200,000 shall be expensed in the year of acquisition while those costing more will be capitalized,8.1.3 Depreciation Policy Fixed assets that have been capitalised shall be depreciated on the reducing balance method cover their useful economic lives. Full depreciation shall be charged in the year of acquisition while no depreciation is to be charged in the year of disposal. Rates applicable are as follows: Fumiture & Fittings 15% Motor Vehicles 25% Computer Equipment 20% Office Equipment 10% 8.1.4 Identification Marks All fixed assets should be de ty marked, in indelible ink, with an identification number. 8.1.5 Fixed Assets Register To enhance control over assets, a fixed assets register should be maintained for all assets that have been capitalized. The register should contain the following information: Date of Acquisition Description of Asset Serial /Registration Number Engraved Number Location Cost Depreciation Rate ‘Annual Depreciation Cumulative Depreciation Net Book Value Items are recorded under the different class to which they belong so that total cost, annual depreciation, cumulative depreciation and net book value can be easily obtained for each dass of assets. The suggested format for this register is shown in table 12 below: 8.2 Use of Office Faci ities, Equipment and Consumables Photocopiers, Fax Machines, Binders and Electronic Equipment + The Administrative Secretary will be responsible for effective and efficient utilization of the photocopier, fax machine, binders and electronic equipment. + The Administrative Secretary will be approached for assistance with photocopying, binding, and faxing documents. + She/he will pa detailed record of the use of these machines, indicating the copies (in case of the photocopier, and the binder), the name of staff or consultant and the program. * Any problem with the machines should be reported immediately to the Programs ‘manager who will then bring it to the attention of the Secretary General. 78.2.2 Stationery and Consumables = Request for stationery and consumables will be made to the Administrative Secretary who will make issues and maintain the store records. * No UADF equipment or materials will be employed for personal use or removed from the office without the express permission of the Secretary General + Equipment removed with the permission of the Secretary General will be signed back when retumed. Any electronic equipment being borrowed should be tested before being taken to confirm that itis in working order. * The Administrative Secretary will be responsible for the stores and checking working order of equipment before and after return of the equipment. + When any staff wants to use a particular piece of equipment, he/she should approach the Administrative Secretary for registration and release of this equipment. ‘A computer specialist will be hired as and when the need arises for routine computer servicing and maintenance. 8.2.3 Motor Vehicle ‘* Official vehicles shall only be used for official SAP work * Avehicle mileage log must be maintained and kept up to date * Before each trip, the vehicle log shall be completed by the driver + In exceptional circumstances, an officer may be allowed private use. Such use must be authorized in advance by the Secretary General * The vehicle must be kept fully insured at all times. The Accountant shall be responsible for ensuring that vehicle insurance policies remain current 28Table 8 Fixed Assets Register FIXED ASSETS REGISTER FIXED ASSETS SUMMARY Charge forthe period UGX [Depres UGX8.6 Physical Verification At least once every yoar, 'he Accountant will conduct a physical verification of all assets. Discrepancies w! be reported to the Secretary General within 2 days of discovery. Assots thet cannot be located must, ultimately, be written off with authority of the Board, 9. Annual Audit ‘An independent aucit, conducted by a Certified Public Accountant is a requirement by law. Most fund will aso require that such an audit be carried out. Several benefits, in llowing, are to be gained from an audit: + Assurance of th { financial reports is obtained + Weaknesses in ing system are pointed out, thus facilitating corrective action. + Any irregularities that have taken place are likely to be pointed out. ‘An independent auditor should therefore be appointed every year. This shall be by the Annual General Meeting of SAP. S/He will then present his/her findings at the Annual General Meeting