Resource Management Policy
1.0 OVERVIEW OF ACCOUNTING AND PROCEDURES MANUAL
AAIDO’s continued service depends on its ability to safeguard and manage effectively and efficiently all donor funds (including locally generated income) entrusted to it. Central to this goal is a sound structure of financial management and control to maintain both integrity and confidence.
This Manual describes the financial policies and procedures for ensuring accountability on effective and efficient use of funds. The procedures are aimed to give Management (including the Board of Directors) accurate, complete and timely financial information.
Any deviations from adhering to the procedures contained in this Manual by AAIDO staff should be in writing and approved by the Executive Director.
The implementation of this Manual is essential for the successful delivery of AAIDO’s services as we conduct our activities morally, ethically, and in the spirit of public accountability and transparency, and in conformity with applicable laws and regulations and practices common with responsible organizations.
The principles and suggested procedures in the Manual reflect systems currently in operation, or being implemented by AAIDO and those expected to be adopted by its sub-partners.
This Manual has been designed to suit specifically the accounting and financial management practices at AAIDO, and the general principles and essential features are applicable to all resources no matter their source (e.g. Cooperative Agreement from ED, sub award with another partner, or locally received funds).
This Manual is not exhaustive but provides a framework for accounting and financial Policy within the organization.
As circumstances and requirements change the manual should be reviewed and updated annually to take into account potential new donor regulations, tax law regulations, as well as new developments in the accountancy profession and changes in the organization.
1.2 Importance of Financial Accountability
The ability to provide accurate, complete and timely financial information enables compliance with the rules and regulations of donors and other partners reporting requirements, as well as adhering to generally accepted accounting principles (GAAP). This information also assists management to plan and coordinate their programmes effectively.
The guidance in this Manual should be used in conjunction with other policies and procedures specified from respective donors.
This Manual should be used across the organization to guide the handling of finance functions. It provides guidance on all financial procedures and reporting requirements.
The usefulness of any manual is in its applicability to provide guidance. As the transactions of AAIDO evolve, diverse and increase, this Manual must remain relevant, therefore it is critical that management ANNUALLY review and revise this manual as needed.
1.4 Cooperative Agreement Signing Authorities
The Executive Director should sign all cooperative agreements
2.0 OVERVIEW OF THE FINANCE AND ACCOUNTING DEPARTMENT
2.1 Financial Records
Financial records include all source documents (budgets, invoices, vouchers, bank statements, credit advice, journals, cheques, receipts and any other documents which serve as evidence of financial transactions) must be kept for accountabilities purpose.
2.2 General Responsibilities
AAIDO requires all of its employees to abide by the foregoing standards of ethical behavior in their dealings with its suppliers, consultants, sub grantees, subcontractors, and government. Employees of AAIDO should not solicit for any funds, gifts or any favours from a prospective vendor, sub grantee or any other business partner. Attached as Appendix 1 to the Manual is AAIDO’s ethics policy which ALL staff are required to sign on an annual basis. (Copies of the signed ethics statements will be kept within personnel files).
Staff are also required to report any violations of these standards to the Executive Director and Board Finance Subcommittee.
The Executive Director has overall authority and oversight of all funds.
- Finance and Accounting Responsibilities
2.3.1 Finance /Operations Manager
Please note: In absence of a designated Finance/Operations Manager, AAIDO may subcontract out with a licensed Accounting Firm for financial management assistance and if these services are subcontracted, all of the duties specified below will apply to the responsibilities of the subcontracted firm / individual.
- Ensure that the financial system runs properly in order to process financial information and generate accurate reports.
- Ensure that internal controls are enhanced and maintained at an acceptable level,
- Manage risks affecting AAIDO’s assets and make sure risks are maintained at a lower level.
- Ensure that financial policies, procedures and donor compliance requirements are adhered to expected standards
- Ensure that internal and external financial reports are prepared and disseminated within deadlines
- Ensure there is enough cash on hand and vendors are paid promptly
- Responsible for all aspects of cash management including:
- Monitoring receivables, billing staff and collection of debt and managing pre-payments.
- Lead, direct, mentor/coach, appraise and supervise the other finance staff
2.3.2 Bookkeeper / Admin Assistant
- Ensure that payment package is complete and accurate before processing.
- Ensure that charge codes are in agreement with Program Managers’ approval and the organization’s chart of accounts.
- Ensure that vendors/Suppliers, Staff and Sub-recipients’ cheques are prepared and paid on time.
- Maintain petty cash ledger and prepare petty cash replenishment.
- Prepare cash receipt voucher for cash collected and deposited to bank account.
- Ensure that copy of cash receipt and bank deposit must be attached with the Cash Receipt voucher.
- Ensure that the Petty cash replenishment is prepared the moment the paid cash is 75% of the cash float.
- Prepare cash and check deposit slip and give it to the agent for banking on a daily basis.
- Cash collected from staff travel advances and other receipts must be banked within the next business day.
- Ensure that all cash at hand must be locked in a safe overnight and on weekends.
- Maintain safe ledger and keep the first key of the safe.
- Work closely with Administrative officer/Logistic Officer on physical counting of assets, stocks and property.
- Prepare a stock count report on a monthly basis
- Manage the asset register
- Prepare cash receipt vouchers.
- Retrieve documents needed for Audits
- Ensure that soft copy and hard copy month end closing packages are filed properly and done within the due dates
- Ensure that data is posted on a daily basis, and that the financial information is processed accurately and reliable reports are generated timely
- Ensure that internal financial reports are generated accurately and disseminated timely.
- Perform systems analysis to identify any irregularities (such as wrong posting) and propose immediate corrective actions to the finance manager
2.4 Internal controls
Internal accounting control consists of the AAIDO’s plan, Policy and records to assure the reliability of financial reporting as well as safeguard the assets of the organization.
An effective internal control structure includes a series of checks-and-balances required for the appropriate recording and authorization of transactions and ensures that access to assets is limited to authorized personnel. Each transaction should be divided into component tasks completed by different staff members in order to increase the likelihood of detecting unintentional errors and prevent misappropriation of AAIDO’s assets.
As an example, the person who approves vouchers for payment should not prepare or sign cheques.
The following chart includes other examples of the appropriate segregation of duties:
Finance Officer Who:
*Has access to Blank Cheques
*Bank or deposit the cash receipts at the bank
*Is responsible for the physical
*Perform the physical
security of Assets
inventory of Assets
*Prepares Bank Deposits
*Reconcile Bank Accounts
*Distributes payroll payments
*Maintains Driver Logs
*Monitor Fuel Usage
The following four basic tests of completeness, validity, accuracy and maintenance should be consistently applied to all transactions
Each element of a transaction must be documented, approved and recorded.
as cash payment to a worker requires the signature of the worker or other proof as evidence of payment.
AAIDO will make sure the disbursement made to a verifiable vendor or employee
Yes there should be such tangible proof, such as a vendor’s receipt, purchased item, to confirm that the item was received or the services performed.
All the AAIDO amount recorded as received should be correctly
After a payment has been approved for payment and recorded, it should be impossible to make changes, such as addition of a zero to the amount or changing the payee name, or in deed using the same documents for other double payments. All documents after use must be stamped PAID to avoid re-use. If happen will lead to disciplinary committee and all the staffs must sign the code of conduct every fiscal year.
Close supervision by the Finance/Operations Manager and oversight by the Executive Director are vital to ensure that control systems are working and that weaknesses are identified and corrected.
3.0 FINANCIAL REPORTING
Financial reports are summaries of the information found in financial records for a given time period or as of a certain date. Financial reports also provide information on the financial status of a project including project income/costs, cash flows and trial balance. Financial reports may also include sufficient background information to support the data included in reports.
3.2 Financial Transactions
For the purposes of this policy a financial transaction is any occurrence, which results in an inflow/outflow of funds or has any effect on the organization’s assets and liabilities.
All financial transactions will be accounted for accurately and properly. No undisclosed or unrecorded funds or assets will be established or maintained for any purpose.
No borrowings on behalf of the organization are to be made from any lending institution or individual without the prior written authorization from the
Executive Board of Directors.
For any cost to be allowable under specific grant agreements, the costs must meet the following general criteria:
- Be reasonable for the performance of the grant agreement and allocable thereto
- Be consistent with organizational policies and procedures
- Be determined in accordance with generally accepted accounting principles (GAAP)
- Conforms to any limitations or exclusions set forth in the principles or in the agreement as to types or amount of cost items, and
- Be adequately supported and documented.
A cost is reasonable if in its nature or amount it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the costs. In determining this, it should consider whether the cost is of a type usually recognized as normal and necessary for the organization’s operations.
All costs incurred should be allocable to projects i.e. its activities or benefits can be distributed reasonably to that specific project.
Transactions processed using the respective source documents must be stamped processed/paid to avoid duplication.
AAIDO uses an accrual (preferred) or cash based accounting system to recognize income and expenditure.
3.3 Procedures for Receiving Funds
3.3.1 Objective of a Receipting System
The objective of a receipting system is to ensure that all funds donated/collected are fully accounted for in financial records and reported to the donors.
- Main strategies to Achieve the Objective
In order to ensure that funds are fully accounted for in financial records, the following strategies should be applied:
- Effective control of accounting documents (receipt books, cheque books). A receipt book should be serially numbered and have three copies:
- Original goes to the payer
- The second copy is filed in Accounts department and
- The book copy remains as a permanent record. A receipt is a proof of payment and payer should obtain one.
*Attached as Appendix 2 to the AAIDO’s cash receipt slip which should be serially numbered and in triplicate.
- The cashier should receive all monies, issue a receipt for all funds received, and reconcile all funds received with amounts to be banked the following day at the end of each day.
- Cash disbursements must not be made from cash received. All cash received must be banked and supported by an official bank deposit slip.
- Cash receipts should not be mixed up with the petty cash fund
- Strictly all receipts issued should be recorded and analyzed in the cash books for onward posting to the ledgers at the end of each month.
- All bank transfers (direct credits) must be authorized by designated signatory and should immediately be recorded in the cash book. Prompt recording and analysis of receipts in the cash book shows up at the earliest point the levels of funds received and allow spot check of cash on hand.
- All original documents should be systematically filed in box files and made readily available for any prompt audit. The Finance/Operations Manager should be fully responsible for this receipting system and should therefore check the bank reconciliation to separate the duties to show transparency of the system.
- All receipt books should be recorded in a Register kept by the Bookkeeper. Only the Bookkeeper will be responsible for the issuance of the receipt book for use. The Register should show:
- Serial numbers of each receipt book
- Date when receipt book received from the printer
- Name and signature of staff entering the new receipt books into the Register
- Date the receipt book issued for use and
- Name and signature of staff requisitioning the receipt book for use.
- Procedures for Payments
- Objectives of Payment Procedures
The objectives of a good payment procedure is to ensure that disbursement of money is and can be proved to be legitimate and transparent and in accordance with the budget.
Accounts Staff should ensure that the details from the source documents are processed correctly in the cashbook. Each disbursement will be supported by:
- purchase requisition
- purchase order
- voucher authorizing payment signed by at least 2 authorized signatories
- completed cheque signed by authorized signatories
- supporting vendor’s invoice
- a receiving report and
- Other independent source materials.
- Strategies to Achieve a Good Payment Procedure
The following strategies will be applied to achieve this objective:
- All payments should be authorised by the Executive Director. When an invoice is received, it should be matched with the purchased order and checked for calculations and depending on the correctness, a payment voucher will be raised. The Finance Manager should ensure that all procedures and checks have been followed and all supporting documents attached before a payment voucher is sent to the Executive Director for final authorisation.
- Before any payment is made, the Senior Finance Officer must ensure that there are sufficient funds in the bank account.
- Payments should be posted promptly to the cash book and to the general ledger
- Paid vouchers represent an essential means of supporting and explaining a payment as well as evidence that the necessary approval was given and procedures followed before making a payment and that voucher number and order are available for future reference.
There are two types of paid voucher, as follows:
- Fully acquitted – These vouchers have all the necessary supporting documents; and
- Not adequately acquitted – The vouchers which lack some of the necessary supporting documents mentioned above. They should be kept and filed separately from the fully acquitted vouchers and reviewed frequently to ensure that, in due course, all are fully acquitted and filed
- Additional documentary evidence will be required under d (ii) above for such expenditure as workshop allowance, training allowance and field visits. Some of the evidence needed will include:
- workshop allowance – signed attendance list, showing amount paid to each participant, names and Passport number of each participant;
- training allowance – name of training institute, rate per period and amount paid to the candidate, duration of the course and Passport number of the candidate; and
- Field visits – authorised signature of the field visit by the Executive Director, amount paid, name and Passport number of the traveler. It is recommended that the amount be given to the officer traveling as a travel advance to be accounted for on return.
- All vouchers should be filed sequentially and kept in a secure location. The removal of payment vouchers from their files and the office in which they are kept should be discouraged at all times. If it is necessary for a payment voucher to be taken away it should be signed for in a register
- An additional safeguard is to only allow whole files to be taken and not individual vouchers
- To good financial regulations, payment vouchers must be preserved for a period of six years, or until audited, or in a court case, until the case has been settled, if this is later than six years.
3.4.3 Cheque Issuing
Cheques should not be written until the payment voucher has been authorised. The cheque should be entered in the cashbook at the time that it is drawn.
The cheque should not be drawn unless the cash book indicates that funds are available to meet it. It is illegal to make payments if funds are not available.
After the cheques have been signed they should be entered in the cheque register which is maintained in cheque number order with columns, showing the name of the payee, the amount, date drawn, name and signature of person collecting it.
The drawn cheque should be sent for signing with the payment voucher and the supporting documents.
They should always be two panels of cheque signatories:
- a) PANEL A – The Executive Director
- b) PANEL B – The Finance Manager or Bookkeeper
Changes in authorized signatories require the approval by the Partner’s highest level of authority.
Notification of change of signatories (adding or removing) must be communicated to the bank in writing, and the letter must state the reasons. Copy of this letter will be kept in the project’s file for future verification. Copy of all bank correspondence letters should bear the bank’s stamp (and date) as a confirmation of receipt.
3.5 Monthly financial reports
The monthly financial reports will cover transactions on a period basis starting on the first day and ending on the last day of each reporting period.
The monthly financial reports currently include:
- cash book
- budget summary
- expenditure summary
- bank reconciliations
- Cash book
Shows the dates, all the cheques in chronological order including cancelled cheques, bank transfers, details of payment, amount of each receipt and payments, running bank balance and extended columns for posting these amounts according to the budget lines
- Budget summary
Shows how much has been spent and how much is remaining for each budget line item.
3.5.3 Expenditure summary
Within five working days after the end of each month, accounts clerks assigned to specific projects shall submit an expenditure summary to the Accountant who will review them within 48 hours after which the specific Bookkeeper will submit the reports to the programme manager and hold discussions with them to make sure they understand it and also to look at any expenditures that are likely to overrun the budget limit and to look at activities where there has been no or low expenditure which can be an indicator that certain budgeted activities are not being carried out.
- Bank reconciliations
3 days after the bank statements are received, the accounts clerks assigned to specific projects will finalise the accounts, do the bank reconciliation and submit the bank reconciliations for checking and signing off.
3.6 External reporting
The accounting staff will be aware of all donor reporting requirements including deadlines and will ensure that all such reports are submitted to the Executive Director at least 5 days before the reporting deadline and are ready to be submitted to the Donor.
4.0 BANK ACCOUNTS
All requests to open other bank accounts should be approved by the Board Chair and Executive Director.
Each major donor should have a separate dedicated bank account. A register of all the bank accounts should be maintained and kept up to-date by the Accountant. It should have the following details:
- name of account
- name of bank
- date the account was established
- currency, account number
- interest/non interest bearing
- source of funds and
- Signatories and signing arrangements.
4.1 Procedures to adhere to when performing bank reconciliations
Bank reconciliations should be done on a monthly basis and these must be duly signed for by at least two different people.
Some of the normal standard routines to be followed regarding bank reconciliations are as follows:
- Ensure that all bank statements for each bank account are at hand before attempting the reconciliations
- Details from the source documents are processed correctly in the cash book to minimize time spent on the bank reconciliation
- References on the Cash book must be consistent with those that appear on the source documents
- Journalize bank debits/credits in the same month they occur
- Review outstanding cheques older than three months
- Use reference appearing on the bank statement to cross-reference outstanding items on the reconciliation
- Investigate long standing items on the reconciliation and if necessary write back items that are not likely to be cleared (Cheques that are outstanding for more than 6 months are regarded as stale and must be reversed)
- Once the reconciliations are complete, they should be signed off at least by the Accountant, paying particular attention to long standing deposits and cheques if any
- Bank statements must be filed together with the bank reconciliations
- Bank reconciliations should be written in ink and not pencil to minimize erasure.
5.0 ACCOUNTING DOCUMENTS AND PROCEDURES
The Bookkeeper will maintain the following accounting documents.
5.1 Cheque Authorization Form
There will be a cheque request form for each cheque that includes the following information:
- Name of Payee
- Voucher number
- Cheque number
- Project Number to indicate which project(s) the cheque should be charged
- Amount and the signature of the person collecting the cheque.
The main purpose of the voucher system is to ensure there is a record in place that provides evidence of which project checks are to be charged to, that checks have been collected by the respective vendors and also to satisfy donor requirements.
An example of a cheque authorization form can be found in Appendix 3.
6.0 PETTY CASH MANAGEMENT
Expenditure for small recurring items may be paid for from Petty Cash. A member of staff shall be appointed at respective centres in consultation with the Accountant to handle petty cash. Such an officer will be responsible for:
- Preparing the Petty Cash Voucher
- Maintaining a Petty Cash Register that records all petty cash transactions
- Filing all supporting documentation for petty cash transactions
- Reimbursing the petty cash float
Petty cash float of (Organization to decide on amount) shall be clearly stated in the letter to the official handling petty cash.
The letter should indicate what items are authorized by AAIDO for the particular program to be paid from petty cash and any prior authorization needed for any disbursement, for example, Administration Petty cash allowable items are:
- Daily newspapers
- Tea leaves
- Soap etc.
Any expenditure that does not fall under the above mentioned categories will have to receive prior authorization from the Accountant or his/her designee.
The Accountant should sign off all the above expenditure not requiring prior authorization at the end of each day.
Program managers or the Accountant should not be handling petty cash.
An example of a petty cash voucher form can be found in Appendix 5 and an example of a petty cash count for can be found in Appendix 6.
6.2 Replenishing Petty Cash
Petty Cash will be replenished for the exact amount of expenditure incurred when more than 75% (organization can decide limit) of the petty cash float has been spent. A cheque will be issued in the name of (name of petty cash custodian) for the amount of replenishment submitted.
6.3 Petty cash management
The Bookkeeper should ensure that all petty cash vouchers are sequentially numbered and show the amount disbursed purpose of disbursement and signed by both the Accountant and recipient.
Receipts and any refunds to petty cash should be handed back to the Bookkeeper within a day of the initial disbursement. Receipts and the approved petty cash voucher should be attached together as evidence of the transaction.
The petty cash box should be kept in a safe place with access restricted and only allowed to the responsible person.
All petty cash documents i.e.: petty cash slips and invoices must be cancelled with a “PAID” stamp
Only payments less than 10% (organization can decide %) of petty cash ceiling will be paid from petty cash. Any payment in excess of this amount will be paid for by cheque.
They should be in the petty cash box and if this occurs, the petty cashier should be sternly warned in writing and dismissed on second occurrence of the IOU in the cash box.
6.4 Unannounced Petty Cash Controls
Spot checks (conducted at least 4 times a year) should be carried out by the supervising officer, and any discrepancies should be explained. The spot checks should verify the following:
- Petty cash float less (minus) any petty cash vouchers on hand should be equal to petty cash available. Any discrepancies should be explained.
- The spot checks should include checking whether the vouchers have proper authorization, proper necessary supporting documents and any reasons for non compliance or delay in compliance
- The Accountant also has the right to carryout these spot checks and should do so at least twice a year.
7.0 ACCOUNTING FOR IMPREST
7.1 Definition of Imprest
An Imprest is an amount of money advanced for a specific short-term purpose which must be accounted for immediately that purpose has been satisfied. It is given to an officer rather than direct payment to supplier.
7.2 Objective of Imprest Procedures
To ensure that all amounts advanced for specific short term purposes are properly authorised, and promptly accounted for on completion of the activity.
7.3 Main Strategies to Achieve the Objective
In order to meet this objective the following strategies are recommended:
- Control over the issue of Imprest
- Appropriate retirement procedures
- Prompt and accurate accounting
- Control to ensure prompt retirement
No person shall be issued with Imprest when there is another Imprest outstanding in her/his name.
It is important that all expenditure is accounted for promptly and properly in full, and that an Imprest should be retired immediately its purpose has been fulfilled. Consequently an individual should never have more than one Imprest outstanding against her/his name at one time.
7.4 Appropriate Retirement Procedures
Imprest must be accounted for within 48 hours upon completion of the activity for which it was issued. This process is known as retirement.
There are three possible outcomes of the Imprest:
- The Imprest amount has been fully spent on the intended purpose
- The Imprest amount has only been partially spent on the intended purpose leaving a balance to be returned
- The Imprest holder has incurred more expense that the amount of the Imprest and is due an additional payment
In all of these cases the retirement is through an Imprest retirement form, the purpose of which is to summarize the expenditure incurred against the original Imprest and the necessary approvals to the way that it has been utilized.
7.5 Appropriate Retirement Procedures
It is recommended that, in all cases, the Imprest retirement form is attached to a payment voucher and processed through the payment procedures.
Where the Imprest is retired in full the payment voucher amount payable will be nil and the coding of the expenditure will be balanced.
The accuracy of the recording is tested through the reconciliation of the impress ledger to the control account and the verification checks in the cash book and general ledger systems.
In the sections above it was noted that an Imprest is an advance to an individual for a specific purpose, which must be accounted for on satisfactory completion of the activity.
Imprest holders may be reluctant to retire an Imprest promptly, either because they owe a balance on it, or because they can’t be bothered to. If the above systems are in place then the information is available to indicate those that have outstanding impress and action can be taken to encourage their retirement.
The procedures to encourage this may include:
- Only one Imprest outstanding at any time – No Imprest to be awarded if there is an existing one outstanding. Whilst this is a financial regulation its enforcement encourages the retirement of existing ones;
- Deduction from salary – If a special Imprest is not retired promptly, it should become a priority for payment from the next month’s salary, if possible being deducted in total. If an Imprest is being recovered from salary, no further imprest should be authorised until full recovery has been made.
The Travel Advance Request is included in Appendix 10 and the Travel Expense Reconciliation is included in Appendix 11.
8.0 PURCHASING/PROCUREMENT POLICY
AAIDO’s Procurement Policy is based on the principle of assuring the most cost efficient and rational use of resources for goods or services that will best serve the organization in both the immediate and long-term. The policy shall also ensure that procurements are conducted in a manner to provide open and free competition to the maximum extent practical. Staff should be alert to organizational conflicts of interest as well as noncompetitive practices among vendors that may restrict or eliminate competition or otherwise restrain trade. Awards should be made to the bidder or offer or whose offer is responsive to the solicitation and is most advantageous to the recipient with price, quality and other factors being considered.
Procedures to avoid unnecessary purchases or duplicative items should be in place at all times. No employee or agent should participate in the selection, award of a contract if a real or apparent conflict of interest is involved. A conflict of interest originates when an employee or any member of his/her immediate family, member of Board or associate, has some interest, economical or not in the procurement in a specific business or hiring the service of a particular person or business. The Project should ensure that only contracts with responsible parties are made. While this section is devoted to project purchases of goods or services via Accounts Payable, this principle applies to all project transactions.
Where a particular vendor has been selected as a preferred supplier based on the most cost effective and efficient supplier, in terms of: quality, capacity, timeliness and price competiveness, comparative invoices for exactly the same goods and services will compared on a yearly basis to determine the eligibly of the preferred supplier. Normally, the bidder offering the lowest bid will be selected as the supplier. However, if there are specific reasons why the lowest bid is recommended, this justification needs to be documented on the bid comparison.
For purchase between the local equivalent of US$500 and US$2,500, at least 3 oral quotes must be obtained and documented, and include a detailed description of name of providers, contact details and the exact description for the products to be procured.
For purchases over the local equivalent of US$2,500, 3 written quotes must be obtained and a Tender Selection Committee that should comprise of at least someone from the user department, a finance person and the procurement officer shall sit to choose the best quotation.
The following documents for each procurement should be in place (Bid Comparison Examples are attached in Appendix 7):
- Purchase request
- Appropriate number of estimates/quotes from different suppliers
- Purchase order
Only goods and services specified in the approved budget can be procured. Any other procurement will need written authorization from the Executive Director and funding agency/donor where applicable.
When competitive bids or offers are not obtained, justification for lack of competition should be given.
8.1 Purchase Requisition (PR)
A Purchase Requisition, specifying the identified good(s) or service(s) requested, must be completed by user officers and submitted to the appropriate programme manager for approval. These will be later submitted to the Accounts department with all appropriate supporting documentation for payment.
8.2 Purchase Order
The approved Purchase Requisition and quotation from the selected supplier are submitted to the Finance department for the completion of a Purchase Order. The Original Purchase Order is submitted to the vendor to confirm the order, as required. One copy is kept with the department that made the order. A copy remains with the Accounts Office pending full payment and delivery of the good(s) or service(s). Only after receipt and inspection of the goods is the Purchase Order together with support documentation (invoice, delivery note) submitted to the Accountant for full or final payment.
- Internet Banking Policies and Procedures
Only users with signature authority can approve or release payments within the internet banking system up to the authority levels that have been assigned to them.
In order to maintain a segregation of duties, all users must have individual user ids and passwords. The duties for internet banking must be segregated as follows:
- The financial manager, who does not have signature authority on the bank account, must review all requests for payment. He/she should review all required documentation such as purchase order, requisition forms, vendor vouchers, etc. For salary payments, a list of employees and the amount of salary for each employee must be reviewed and signed by the Executive Director. The person who sets up the payments on-line cannot be the person responsible for reviewing the request for payments.
- Once the requests for payments have been reviewed, the Director, or the Deputy Director must approve each request.
- The financial assistant will be responsible for setting up the payments in the internet banking system.
- Someone with signature authority on the bank account will be responsible for approving and releasing the payments.
- The financial manger will be responsible for the monthly bank reconciliation which must be signed by the Executive Director
- Consultants and/or Independent Contractors
Definition of Consultant
A consultant is a self employed, independent contractor for whom AAIDO has no legal obligation to withhold taxes or pay benefits. Consultants are considered to be local contractors, rather than AAIDO employees, and as such are not eligible for payroll or regular employee benefits
Key consultants may be named, along with the daily rate and the scope of work (SOW), in the proposal and final contract between the AAIDO and the sponsoring organization. If the name of the consultant, daily rate and scope of work are not stated explicitly in the contract, it may be necessary to request hiring approval from the funding organization before the entering into an agreement with the consultant (it is important to refer to the contractual arrangement with the donor to determine if approval is necessary).
For consultants, a rate should be negotiated according to the terms and conditions of the contract and based on the information collected. The consultant daily rate will be based on factors such as previous earning history, market rate for comparable service, level of responsibility and complexity of assignment. A current and certified salary history must be provided by the candidate
Once the consultant’s rate has been negotiated and approved, a consultant agreement and work order (see Appendix 13) stating the scope of work (see Appendix 14), duration of assignment, and daily rate of pay must be drafted and approved by the Executive Director. Consultants are not entitles to receive any rights, privileges, benefits, or allowances from AAIDO except as provided in the consultant agreement.
The consultant agreement must be signed by both the consultant and the Executive Director
If required by the donor, consultants must be approved by the sponsoring agency before being hired by the AAIDO. Approvals may also be required for consultant candidates, scopes of work, and/or daily rates. It is the Executive Directors responsibility to determine what approvals are required from the donor and ensure that they are secured in writing before the consultant can begin work
Contracting and Payment Procedures
Consultants are required to submit a fee payment request (or invoice) that specifies the number of hours worked each day, the approved daily or monthly rate, and the description of activities. The request (invoice) must be reviewed and approved by the Executive Director. AAIDO pays consultants in accordance with the terms and conditions of the agreement, typically up to a maximum of 8 hours per day and 5 days per week, unless otherwise authorised in writing by the donor and/or agreement with the donor. Please see Appendix 16 for fee payment request.
9.0 CASH RECEIPTS
9.1 Cash /Cheque Received
The Bookkeeper must issue a receipt to the person/organization for the amount received on the reported date. The supervisors can check on the receipting but will not be receipting or funds;
Before depositing the funds received, the Bookkeeper needs to complete a deposit slip
The Accountant or any other supervisor he/she will appoint should check the receipt book on an adhoc basis and match the cash, and check receipts with the bank statements to ensure that all cash and checks are banked.
A deposit slip or remittance advice will serve as the basic supporting documentation that should be clipped together with the official duplicate receipt for completing the monthly reconciliation.
For incoming funds received via a bank transfer, the bank statement can be used as the supporting documentation.
10.0 RECEIPT OF GOODS AND PAYMENT
10.1 Receipt of Goods
A responsible officer shall be appointed by the programme manager in consultation with the Accountant who should be responsible for receiving Goods/orders and verifying delivery against the Purchase Order. All goods received should be recorded in the goods received note. The goods received note together with the purchase order will be passed to the Finance Department for filing or payment.
The Executive Director should authorize all payment at/or in the Head Office while the Branch Programmed Managers will authorize those at the branches.
The Bookkeeper prepares the Payment Voucher and allocates a voucher number (which shall be the cheque number and they shall be filed chronologically) upon verification that the original invoice represents the correct information, the correct addition and conforms to the purchase order and the delivery receipts from the supplier.
Another staff member should check to ensure that details on the delivery note, goods received note, purchase order and invoice all agree before proceeding to prepare payment. To avoid the possibility of duplicating payments all processed invoices will be stamped “Processed” or “PAID”. All payments where practically possible should be by cheque especially those above the local equivalent of US$50 (Organization can decide limit). All cheque payments will be accompanied by; Payment Voucher, Receiving reports where applicable, Invoices, Delivery notes, Approved purchase orders and purchase requisitions. Payments for service contracts will only be accompanied by a requisition, invoice and any reliable required information
Once the transaction is complete, the payment voucher together with purchase requisition, invoice, and required number of quotes and copy of cheque are filed together.
For non cheque transactions including receipt of wire transfers, intra account transfers, travel reconciliations, voided cheques and bank charges, the Bookkeeper issues a Journal voucher ,assigns a voucher number and attaches supporting documentation for the transaction. Similarly all such transactions will have to be approved and authorized by the Accountant.
11.0 SAFE POLICY
All branches/center should have a lockable cash box or safe for safekeeping of cash. Local equivalent of US$5100 (Organization can decide limit) should be kept in the safe overnight.
The organization should ensure that all large cash balances on the premises are adequately/comprehensively insured.
12.0 CHEQUE SIGNATORY AUTHORITY POLICY
Authorization controls are designed to provide reasonable assurance that transaction, events from which they arise and procedures under which they are processed are authorized:
- All cheques should bear at least two signatures.
- Any cheques for amounts over local equivalent of $100 to 20,000 (Organization can decide limit) should have to be signed by Executive Director while those below local equivalent of $100 (Organization can decide limit) could be signed within the organization by the program manager.
13.0 CHECKLIST OF END OF MONTH PROCEDURES
The close of an accounting period should be done when all transactions for the period have been recorded and the bank account, petty cash, and travel advances have been reconciled to bank reconciliations and other supporting schedules. The following checklist should be followed at the close of an accounting period.
- Closing the General Ledger
The Finance Manager should ensure that the accounts staff updates the General Ledger accounts they are responsible by ensuring that that all the postings to the various General Ledger accounts are done.
The Bookkeeper responsible for the posting to the General Ledger should then make a first run of the General Ledger for the Finance Manger to check before printing the Trial Balance. The Finance Manager should ensure that all transactions for the period have been included
- Cash Book Postings
The relevant accounts staff should ensure that all payments and receipts for the accounting period have been posted
The cashbooks should be reconciled to the Bank account statements for the period. The Finance Manager should sign off the bank reconciliations
- Accounts Payable
Check that all handwritten cheques for the period have been entered and committed.
All relevant reports with the Payment Vouchers filed with all necessary documentation attached should be given to the Accountant at least within five days of the following month. Those in the branches should submit the reports and make sure that all the necessary files are ready for inspection by the same dates.
At the end of the accounting period, all creditors’ invoices should be posted to the General Ledger. The invoices not yet received should be accrued in the General Ledger
14.0 EMPLOYEE CONTRACTS, TIMESHEETS AND PAYROLL
All employees associated with AAIDO payments, compensation and benefits and must be signed by the employee and an authorized representative of AAIDO to be valid. Contracts for employees working less than full time must indicate how pro-rated time is calculated. All changes to employment under the grant must be communicated in writing. Prior written approval from the respective funder is required for the hiring of staff not expressly included in the grant agreement and all promotions, raises or changes to employment contracts.
Employees are required to fill out timesheets for compensation. Timesheets must be signed by the employee and approved by his/her supervisor to be valid.
Timesheets must be submitted to the Accountant no later than the 25th of the month (Organization can decide date) to allow for entry into the accounting system.
Timesheets for split employees [i.e. employees working on different grants and other projects] must be coded appropriately. Split employees must indicate on timesheets the amount of time dedicated to each grant or program.
The Accountant must generate a summary payroll report at month end indicating the gross to net salary payment to each employee. Each payroll item must be listed separately [i.e. gross salary, payroll taxes, other deduction, net payroll]. The payroll summary report must be signed by the Accountant and approved by the Executive Director to be valid.
Individual payroll vouchers or other proof of payment to each employee must be attached to the payroll summary report. The report must include the Employee’s Name, Payment Date, Period Covered, Gross Salary, Payroll Taxes and other deductions, and Net Pay allocated to the grant and must be signed by the employee, the Accountant and the Executive Director to be valid.
Please find a time sheet template as per Appendix 8 of this document, and a salary sheet template as Appendix 9 of this document.
15.0 TRAVEL AND PER DIEM
(Organization can determine travel costs reimbursement, including one can and cannot be claimed for reimbursements, and any limits associated with reimbursements of costs per diem limits for lodging and Meals and Incidental costs).
15.1 Travel Approval
All staff members requiring travel should complete a Travel Request Form and it should be duly approved by the supervising officers and authorized by the Executive Director. The Executive Director will also authorize international travel. The traveler is responsible for completing a Travel Request Form, specifying reasons for the travel (and benefits to AAIDO for international travel). Staff should submit the travel requests forms through their supervisor and should be submitted at least 5 days before the proposed date of travel.
15.2 Travel (local and international)
The traveler should request for advance funds to cover the per-diem and any other business related expenses, using the Travel Advance Request form (Appendix 10). The amount of the advance is based on local per-diems as stated in the AAIDO’s conditions of service.
No new travel advance should be issued until all outstanding expense travel expenses and reports are submitted
Each travel advance should be listed in the accounting department under one person’s name. The individual should be responsible for accounting for all monies advanced including any money given to other employees or individuals. A receipt signed by another person does not relieve the travel advance recipient of the obligation to obtain receipts and provide a detailed accounting of all monies received.
Advances should be accounted for within three days of the completion of the related trip. Failure to reconcile travel advances within 5 days of travel may result in the Travel Advance amount being deducted from the pay.
Advances or balances due to the organization, which are more than one month outstanding should be deducted from an employee’s salary.
A Trip advance book should be maintained by the Accounts office showing name of employee receiving the trip advance, date advance is obtained, date advance is reported and name of officer who received the expense report.
All business related expenditure that is presented for a reimbursement should have justification and receipts, this can include expenditure such as the following:
The organization will advise the traveler if a visa is required for the country of travel. It is the traveler’s responsibility to ensure that all application documents are completed and properly submitted to the appropriate embassy sufficiently in advance for the visa to be obtained.
If the traveler pays a visa fee within a country, a receipt is required for reimbursement.
Communication pertaining to business will be reimbursed at the actual cost charged, and a receipt is required for reimbursement.
It is the traveler’s responsibility to obtain any required inoculations prior to travel. The traveler can utilize his/her own service and be reimbursed the actual cost of travel related services on an expense report form (with receipts provided).
15.6 Excess Baggage
The traveler may be required to pay for excess baggage at the airport. A receipt is required for reimbursement, if excess baggage is for official/business use.
15.7 Traveler Cheques, Conversion of Currency, ATM Fees
The cost to purchase traveler’s checks for international travel, cost to exchange money and ATM fees for withdrawing for a trip will be reimbursed, with proof of expense.
15.8 Airport Tax
This will be reimbursed at actual cost charged, based on receipt/documentation provided.
15.9 Air/Road/Rail Travel
All AAIDO business Travel Air, road and rail travel are reimbursed at the actual cost of passage. A ticket receipt should be required as proof of travel. Air travel will be in the Economy class, while staff traveling by bus or rail will be allowed to be in the first class.
- Travel Expense Report
The organization should reimburse employees and consultant for reasonable business travel expenses incurred while on overnight assignment away from the normal work location. Travelers are expected to limit expenses to reasonable amounts. A cost is reasonable if, in its nature or amount, it does not exceed that which would be incurred by a prudent person under circumstances prevailing at the time the decision was made to incur the costs. All business meetings expense claimed must include the names of the people attending, their relationship to AAIDO and the points discussed.
The organization should reimburse travelers for the cost of transportation and other related expense when business is for AAIDO based on policies, restrictions and rates in the conditions of service. The traveler must submit a completed travel expense report to the Accounts department no later than three days after his/her travel has been completed. In instances where the amount of the advance was not sufficient to cover allowable travel expenses the traveler will be reimbursed for the difference. When the advance exceeds the allowable travel cost, the traveler is expected to remit the difference immediately to the Accounts dept upon receipt of the final expense report. Expenditure should be guided by the conditions of service
Except for expenditure for which a per diem is given, a receipt is required to support all other expenses.
When the Bookkeeper receives the Travel Expense Report Form, he/she should calculate the total allowable expenses and match the total cost of funds expended against the total advance obtained. If the total expenses are more than the advance, the expense report form will form the basis as backup documentation for issuing a reimbursement to the traveller. It should be noted that consistency here is very important. If the advance is more than the total expenses, the traveller owes the project the difference. This money should be collected from the employee and should not be allowed to form unauthorised staff Loans. The Accounts department should issue a receipt to the traveller for the amount paid and immediately arrange to deposit the funds in the relevant bank account.
Please find an expense report template in Appendix 11 of this document.
16.0 MANAGEMENT OF SUBAGREEMENTS
The organization shall assist sub-grantees in understanding all donor financial regulations and will advice and ensure that internal controls are maintained, understood and appreciated by sub-grantees. The organization shall provide necessary support, as it is able to provide within the available resources.
AAIDO’s mandate and main purpose is to provide assistance to the Sub-recipients and these should comply with the donor’s requirements. Implementation of the activities lies primarily with the sub grantee; the primary beneficiary of the activities will be mentioned in the sub agreement.
Sub-agreements are legal contractual documents between AAIDO and the Sub-grantee. Sub-grantees are funded by the organization to implement activities or sub projects. Sub-agreements outline the activities and scope of work, the budget necessary to carry out the work, the reporting requirements for the Sub-grantee and the donor-required standard provisions. For more details, refer to AAIDO’s Sub-agreements Procedures Manual.
17.0 MANAGEMENT OF OFFICE SUPPLIES
AAIDO should have office supplies on hand (i.e. Stocks of supplies are composed of any expendable supplies such as reams of paper, pens, pencils, notebooks, etc.) and management policy should be to minimize waste and to maximize efficiency. These policies should show who will order, and who should receive and manage these stocks. The Office Assistant should use a Delivery slip or invoice from the Vendor to update the office supplies stock register. The delivered quantities will be recorded in the goods received note. A different officer appointed at the centre should perform the verification exercise.
To the extent that is possible, recycling of stationery such as bond paper should be encouraged, for example, printing on the other page of the used paper for internal use within the Head Office and Branches
18.0 PHYSICAL INVENTORY
The Bookkeeper should maintain a Fixed Assets register log listing all equipment in close liaison with the Finance Manager.
The property register will have the following details:
- Requisition date
- Serial number
- Location /assigned user
- Fund/project number
- Percentage of federal participation in cost of equipment
- Unit requisition cost
- Estimated life
- Condition and date information was provided
- Ultimate disposition data (if applicable)
Physical inventory verification should be done twice a year to make sure all equipment and materials are accounted for and recorded accordingly. The Finance team will conduct the exercise. Any missing items will be taken note of and investigated accordingly. After completion of the verification exercise, the inventory log is updated and the copy signed by the Logistic Officer and the Bookkeeper. These documents will be filed in the accounting office.
All fixed assets of the organization should be labeled with a unique asset number according to the asset category. The labeling should be in indelible ink.
Disposal of fixed assets must follow project agreement guidance where applicable and all disposed property must be cancelled from the fixed asset register and transferred to a record or file of disposed property. All disposal correspondences, approvals and mode of disposal (sale, donation, scrapping etc) and evidence of disposal (such as sales/donation agreements), delivery notes must exist in the disposed assets file.
A fixed asset register is included in Appendix 12.
19.0 PROJECT VEHICLE AND EQUIPMENT USE
19.1 Vehicle use: Refer to Vehicle Use Policy
19.2 Project Equipment Use Policy
Staff using the organization’s equipment both on and off premises should take all precautions to ensure that the equipment is used properly, and is not unduly subjected to abuse. All equipment should be insured
If an employee wishes to remove a piece of equipment such as the LCD projector or laptop from the office, the Logistic officer will log it in the logbook, with the name, date, duration, purpose and return date. Any equipment to be removed for a long time (more than 3 days- Organization can determine limit) should have written request containing the following information and must be submitted for approval to the Executive Director:
- description of the item to be borrowed
- reason for removal
- length of time the item will be needed
- Follow-up will take place to ensure that all items are returned as required.
20.0 AUDIT POLICY
It is the policy of the organization to conduct one organizational audit per fiscal year. However, where a difference exists between a grant agreement and this guidance, the grant agreement shall supersede. Selection of the auditors will be done in accordance with country Accounting Standards, as well as any appropriate guidance from the donor e.g. Circular rules for international funds.
- BUDGET APPROVAL POLICY
All budgets will be prepared together with the program managers and then presented to the Board for approval for the fiscal year. The budgets will provide a financial overview for the organization and also, on a line by line analysis per funder, give an indication of which funder is funding which costs.
22.0 DONOR’S POLICY AND GUIDELINES
While the policies and procedures outlined above are PREVENT’s policies, the donor’s policy will take precedence over the policies and procedures outlined above, if donor’s policies differ from PREVENT.
23.0 AAIDO ACCOUNTING POLICIES
Below is a sample of accounting policies normally followed by AAIDO ORGANIZATION?
Financial statements are prepared in accordance with the historical cost convention as modified by the inclusion of certain assets at valuation. The following is a summary of the important accounting policies normally used:
- Fixed Assets
Fixed assets are accounted for on a cash basis and expensed when purchased or are stated in the balance sheet at cost or valuation less accumulated depreciation. An organization should set a threshold for capitalization. Any single fixed asset acquired with a value less than the threshold should be expensed to the Income and Expenditure account in the year of acquisition.
Depreciation is normally calculated on a straight-line basis to write off the cost or valuation of fixed assets over the expected useful lives at annual rates. e.g.
Buildings – 2%
Furniture & Fittings, – 20%
Equipment and vehicles – 25%
Motor vehicles – 25%
Full depreciation will be charged in the year of acquisition and no depreciation will be charged in the year of disposal.
- Translation in Foreign Exchange
Assets and liabilities denominated in foreign currencies are translated into (local currency) at the weighted average cost of capital (organization to determine exchange rate policies). All gains and losses arising on the translation are dealt within the receipts and payments statement in the period in which they arise.
Grants received for meeting operational expenses are released to the income and expenditure account in the year in which such grants are received. Grants received for investment in property, plant and equipment are treated as capital grants and amortized to the income and expenditure account over the life of the asset concerned.
The financial statements are expressed in (list currency). Transactions made in foreign currencies are recorded at the rate of exchange ruling at the date of the transaction. Assets and liabilities expressed in foreign currencies are translated at the rate of exchange ruling at the balance sheet date. Profits and losses on foreign currency translation are taken to the income and expenditure account in the year in which they arise
Inventories are stated at the lower of cost and estimated net realizable value. In general, cost is determined on an average basis and includes transport and handling costs. Estimated net realizable value is the price at which the inventories can be realized in the normal course of business after allowing for the costs of realization. Provision is made for slow-moving, obsolete and defective inventories.
24.0 GLOSSARY OF TERMS
The terms defined below are commonly used accounting terms, some of which are used in this Manual.
Detailed explanations are provided in the text, where necessary.
A personal or impersonal record of one or more business transactions to enable a balance to be determined at any moment in time.
The process of analysing, classifying and recording transactions and operations in terms of time, quantity and monetary values.
The period for which final accounts are customarily prepared.
The day-to-day method by which transactions are recorded and ultimately appear in the financial statements.
The accounting treatment of a transaction whose actual value can only be ascertained after the close of an accounting period, where all or part of the transaction relates to that accounting period, such a transaction is brought into books of accounts by ‘accruing’.
Note accompanying the delivery of goods or services ordered (sometimes known as dispatch or delivery note).
Usually used on a schedule of Sales Ledger balances to indicate the age of the balance (e.g. one month old, two months, over six months, etc)
The writing off against profits of the loss in value of certain fixed or intangible assets where such loss is occasioned by the passage of time e.g. Leasehold property (see Depreciation).
The process of classifying and aggregating similar types of transaction under common headings.
Goods, resources and property of all kinds belonging to a company or to an individual, which are used in the business.
An examination by an independent, qualified expert (the auditor) of the accounts and supporting records prepared by a company’s management and the accounting principles and policies underlying them.
A duly qualified person who conducts the audit.
The net difference between the debit and credit sides on an account.
To total the debits and credits in a ledger account and to enter, as a balance, the difference between the two.
Balancing the books
The periodical closing up and adjusting of all accounts in the ledger, in order to ascertain the profit or loss made during the period under consideration.
A statement explaining the difference between the balance of an account reported by a bank by way of a bank statement and the general ledger balance (see reconciliation statement).
The technique of keeping accounts – of recording in a regular, concise and accurate manner the business transactions of an entity in a set of books kept for the purpose.
Books of Accounts
A set of books, which record the business transactions of a firm, company, entity etc (see bookkeeping).
Books of prime entry
Books into which transactions are initially recorded according to their type.
e.g. cashbook, petty cash book, Bought (Purchases) Day book, Sales Day book
Bought Day Book
A book of prime entry, used to list, analyse and summarise all purchases and services obtained on credit. (See Books of prime entry)
A book of account, which records the personal side of all credit purchases of goods or services.
The money supplied by the proprietors of a business in order to acquired the resources (Assets) with which to operate the business.
A book in which an account (record) is kept of all receipts and payments of money, by cash or cheque.
To add up a column of figures.
To transfer to the Profit and Loss Account in Nominal Ledger from each account concerned, the amount itemised in the published Profit and Loss Account, so as to leave as balances only those, which are included on the Balance Sheet.
The matching of debits with credits or the offsetting of one balance against the other.
An entry on the right hand side of a ledger account.
Document sent to a person, firm, etc, stating that his account is credited (reduced) with the amount stated (e.g. when goods are returned by that person, firm etc. or an allowance is made to that person, firm etc.)
One to whom money is owed for goods, services, etc
That group of assets in cash or near cash state (e.g. Cash, debtors, stock).
An entry on the left hand side of a ledger account.
To ‘debit’ an account to make an entry on the left hand side.
Document sent to a person, company etc. stating that his account is debited (increased) with the amount stated (e.g. as a result of price hikes, or invoice initially undercast)
One who owes money for goods, services supplied.
The measure of the estimated loss in money value of a fixed asset owing to use, obsolescence or passage of time (see Amortisation).
An allowance deducted from an invoice price, account etc.
Method of book-keeping in which two entries are made debit and credit for each transaction in order to record the two aspects which every transaction has and to provide a means of providing the entries by balancing the ledgers in which each transaction is recorded.
The record of a transaction in a book of account.
The Profit and Loss Account and Balance Sheet as agreed by the proprietor of the business.
An asset which is in permanent use within a business (e.g. Land, Buildings, furniture, plant, machinery, etc)
A total before any deductions.
The calculation of a gross figure from a net figure by adding back deductions.
Accounts not dealing with persons but with other things such as ‘real or property accounts’ (e.g. Cash, rates, discounts, etc).
See Nominal Ledger.
Method by which a fixed amount is advanced and the expenditure for the amount at the end of the month or period reimbursed, so that the monthly or periodic balance remains the same. Frequently used for petty cash floats.
Asset, which is neither fixed nor current yet, possesses a value (e.g. Goodwill, Investment).
The Stock-in-trade and work in progress of a business.
A document showing the character, quantity, price, terms, nature of delivery and other particulars of goods sold or services rendered.
I Owe You
Literally, the book containing an account of each day’s transactions.
A collection of accounts
The principal book of accounts in which the entries from all the other books are summarised divided into Cash Book, Bought Ledger, Sales Ledger and Nominal Ledger.
A record in the ledger showing one of the two aspects of each transaction or group of transactions (see also ‘Account’).
A term denoting the combined debts owed by a firm, company etc.
The excess of cash or near cash assets over current liabilities.
A payment into the bank or the credit of a specified account.
The consideration of the significance of an amount in relation to the context in which it is placed. In relation to accounts, an amount is not material if its effect on the accounts would not distort the overall truth and fairness of the view they give.
The amount of any charge or cost after all deductions has been made.
Accounts for the income and expenses of a business (see ‘impersonal accounts’)
Otherwise known as the Impersonal or General Ledger. The ledger, which contains impersonal, accounts (see ‘impersonal accounts’).
An Account showing transactions with a particular person, firm or company as distinct from a nominal account.
Petty Cash Book
A book subsidiary to the Cashbook, in which are recorded all small cash payments.
The transfer of entries from the books of prime entry to their separate accounts in the ledgers.
A payment made in the current accounting period of which part or all relates to a future period.
Profit and Loss Account
A summary account of all revenue and expense accounts, showing as its balance, the profit (or loss) for the period under consideration.
Amounts written off or retained out of profits to provide for depreciation, renewals or diminution in value of assets, or retained to provide for any known liability of which the amount cannot presently be determined with accuracy.
A statement showing the process whereby the balances of two accounts, independently written up in respect of the same transactions, which show an apparent discrepancy, are brought into agreement. The most common reconciliation statement is that used to bring into agreement with the General Ledger Bank account balance and Bank Statement balance (see “bank reconciliation”).
To ascertain the precise components of the difference between two related figures produced independently of each other.
Income received from any source.
Sales Day Book
A book of prime entry used to list, analyse and summarize all the invoices for credit sales transactions.
A book of account, which records the personal side of all sales on credit, of goods or services.
A detailed list of items, on a properly headed working paper, totaled to agree with the figure that is being analysed or supported and cross-referenced.
Appendix 1: Ethics Policy
Consistent with its mission, AAIDO has established a standard of the highest professional ability, personal integrity, and cultural sensitivity for all its staff and consultants.
AAIDO’s Code of Ethics is designed to serve as a set of ethical and legal principles to provide guidance regarding decisions and judgments that AAIDO’s staff and consultants are constantly being asked to make. It represents the principles upon which AAIDO was established and that continue to govern its operations. When further clarification is needed, staff should consult the Finance / Operations Manager or the Executive Director.
Contracting, Subcontracting, and Procurement
AAIDO believes that its interest and the interests of its clients are best served by fair and open competition in contracting, subcontracting, and procurement. Employees should consult applicable (list operating country) law and donor guidelines on soliciting competitive bids when procuring goods and services. For interpretation of these guidelines or specific advice on contracting, subcontracting, and procurement, employees should consult with the Accounting and Financial Procedures Manual. All expenditures and purchases are governed by AAIDO’s Financial and Accounting Procedures Manual. AAIDO will provide an annual orientation to financial and accounting procedures to all staff to ensure that all staff are aware of AAIDO’s policies as well as (list operating country) and donor guidelines.
Fairness in Subcontracting
The extent of an institution’s involvement in and level of effort on a particular project should be clearly stated in the subcontract agreement signed with AAIDO. AAIDO staff should endeavor to ensure that: 1) the level of effort and role specified for the subcontractor is adhered to; 2) the subcontractor’s name is mentioned on appropriate project reports, publications, and other public documents; 3) proprietary information received from the subcontractor is kept confidential; and 4) resumes of subcontractor staff and consultants are not used without the subcontractor’s permission.
Plagiarism and Research Misconduct
Miscount in research means any practices that deviate from those commonly accepted by the academic and scientific communities in pursuing and publishing research and reporting on program activities. These practices include falsifying or fabricating data or results, plagiarism, and any similar practices. It does not include honest errors of differences in interpreting data or research results. In producing, creating, or writing AAIDO documents, staff may not use or incorporate content from other documents without crediting the sources and/or obtaining permission, as appropriate. AAIDO expects all employees to adhere to the highest standards of conduct in these areas as they carry out research, report on research and project activities and develop training and other program materials, guidelines and products. Any alleged or suspected misconduct in research should be reported directly to the Executive Director, along with supporting documentation.
Obeying Local Laws and Traditions
It is AAIDO’s policy to fully comply with (list operating country) law, donor regulations, and accepted good business practices. An infraction of laws and regulations may be cause for dismissal of the employee when violate them.
Conflicts of Interest
All AAIDO employees should maintain fairness, ethics, and personal integrity in all matters and avoid doing anything which is either illegal or unethical. AAIDO staff must refrain from participating, or giving the appearance of participating, in any activity that compromises their ability to render fair, impartial judgments on behalf of AAIDO’s clients as well as in the development of new business opportunities. AAIDO staff and consultants are also duty bound by south Sudan law and donor regulations such as South Sudan government regulations concerning individual and organizational conflicts of interest.
Vendors and Service Providers
AAIDO staff are cautioned against the direct use of vendors and service providers that employ their spouses and/or members of their immediate family (including relatives by marriage). While AAIDO may use such vendors and service providers (after a competitive bidding process, where applicable), the following steps should be taken to avoid even the appearance of impropriety. First AAIDO staff should immediately bring the situation to the attention of their supervisor and the Executive Director, before their consideration as a potential bidder for the award of a contract or purchase of a commodity. The supervisor and Executive Director may determine that such a vendor or service provider is ineligible for AAIDO contracts or services. Second, the affected staff member may not be involved in the selection process, in supervising the delivery of goods or services, or in approving or disbursing payments.
Inducement to Clients or Donor Agencies
In accordance with AAIDO law as well as donor funding regulations and accepted good business practices, no employee is authorized to offer, or give the impression of offering, an inducement AAIDO or otherwise to any current or potential client or donor agency official for the purpose of obtaining proprietary information or influencing their judgments on future grant or contract awards. No offer or suggestion to provide employment or consultancies will be made to such an official. In addition, AAIDO will not, and employees or consultants of AAIDO shall not, offer or make any payment, or even suggest a bribe be paid to obtain a contract or “favor” from a potential client. Engaging, or seeming to engage, in such activities will result in disciplinary action and/or termination of the employee. AAIDO’s staff should immediately report any evidence of such activities to their supervisor and the Executive Director.
Similarly, employees are prohibited from paying, or offering to pay, any fees or commissions to consultants or other organization staff to obtain proprietary information or to otherwise assist in any inappropriate manner in obtaining a contract or grant award. AAIDO staff should immediately report any evidence of such activities to the Executive Director. Any such act which is substantiated will result in immediate termination of employment with AAIDO employment. Any instances in which an employee is approached or asked to pay a bribe must be reported immediately to the Executive Director.
Except for gifts of nominal cost– less than list cost – organization can determine limit in fair market value– or meals and social invitations that are in keeping with good business ethics and do not obligate the recipient or the employee, it is in conflict with AAIDO’s interests for any employee or member of his or her immediate family to accept, give, or offer commissions, gifts, payments, services, loans, or promises of future employment to anyone in connection with his or her AAIDO assignment.
Fees and Other Payments
Non-organization related director’s fees, honoraria for speeches, fees for jury duty, radio and TV appearances, author’s royalties and payments for published articles or article reviews, and travel reimbursements may be accepted, provided these payments do not represent activities that interfere with the staff member’s responsibilities to AAIDO. No salary or consulting fee, however, may be accepted by regular AAIDO’s staff members for services rendered to other organizations or persons during regular business hours, vacations, or sabbaticals except on behalf of AAIDO. AAIDO staff are advised to bring any questions they may have on this policy to the attention of the Executive Director for clarification before accepting a fee of payment.
Disclosure of Information
AAIDO staff should exercise discretion in regard to all matters of official business. They may not communicate any information known to them by reason of their position that has not been made public, except as may be necessary in the course of their duties or by authorization of the Executive Director. Nor shall they at any time use such information to their private advantage. These obligations do not cease upon end of employment from the AAIDO and No employee shall disclose information about AAIDO development efforts without the permission of the Executive Director.