FINANCIAL AND ACCOUNTING POLICIES AND PROCEDURES.
YMCA Of KABWE P.O. Box 81371
Kabwe, ZAMBIA.
Tel: Int. 260-97496667 Email: kabweymca@yahoo.com
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YMCA OF KABWE
FINANCIAL AND ACCOUNTING POLICIES AND PROCEDURES. The accounting policies of the YMCA of Kabwe are based on the following General Accepted Accounting Practices that stipulate that the following concepts are adhered to: The annual accounts are prepared on a going concern basis This assumes that the organisation will continue to operate in the future The annual accounts are prepared on the accrual basis Under this basis income and expenses are matched to the accounting period to which they relate. The annual accounts are prepared on a basis consistent with previous years This means that the same accounting policies are applied each year. The annual accounts are prepared on a prudent basis This means that no promised income, which has not yet been received, is taken into account, and if there are any anticipated losses or expenses, these are taken into account
1. RESERVES Cash reserves of at least K20 million shall be maintained at all times. This is to ensure that the organisation can continue to run on a normal basis pending the receipt of further funding. Should the reserves fall below K20 million, the Board shall be notified immediately. All programs should then be re-evaluated with a view to reducing expenditure until further funding is received. Any specific program which runs into a deficit must immediately be addressed to ensure that funding designated for specific programs is not utilised to subsidise unfunded programs. 2. ACCOUNTING PROCEDURES 2.1. RECEIPTS. In line with the concept of prudence, receipts are only recorded once the payment has been received. 2.1.1. GRANT INCOME A file for each donor must be opened. This file must contain A copy of the proposal A copy of the final contract A copy of the letter of thanks for the grant received Copies of reports sent to the donor in terms of the contract
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Any other correspondence with that donor.
A receipt must be issued for all grant income received. Once a grant has been received, a letter acknowledging receipt of that income must be sent to the donor. Grant income received should also be tabled at and recorded in the minute book at the forthcoming Board meeting. If a grant is made to cover specific expenditure such as a particular program or expense (such as training or IEC development) suitable accounting procedures must be in place to ensure that the funds are in fact spent in the manner directed by the grant, and not used to cover any other non-specified expenditure. If the funding agreement stipulates that a separate bank account is required to manage the funds relating to that grant, then such bank account must be opened and accounted for in the accounting records. Financial reports must be prepared for each funder within the prescribed time frame as stipulated in the funding agreement. Such financial reports must agree to the financial records. 2.1.2. INTERNAL REVENUE. Internally generated revenue such as computer user fees, tailoring school fees, timber sales etc. should be treated as follows: Once the goods or services are ready to be delivered an invoice must be prepared. Payment can be made either by cheque or through direct deposit into our current bank account. Should a customer pay by cash, a receipt must be issued, and the cash must be deposited into the bank account at the earliest opportunity.
2.1.3. CONTRIBUTION OF 10% TO NCZYMCA Contribution to NCZYMCA is payable monthly at the prescribed rate in accordance with Zambia YMCA constitution.10%is only deducted from every monthly generated internal revenue. However,no 10% shall be deducted from grants (funded programs). 2.2. EXPENDITURE. All expenditure must be: Justifiable in terms of the budget Substantiated by a receipt or invoice from the supplier. Such documentation must be in the name of the YMCA. Where an expense has not been budgeted for and is of a significant nature (greater than ZMK1000, 000) then approval must be obtained from the Executive before that expense can be incurred. Approval may be obtained via a faxed letter or e-mail, not necessarily at a formal Executive meeting.
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Staff claims for travel, accommodation, entertainment etc. must be authorised by the staff member’s direct line of authority. The Program Officer’s claims must be authorised by the General Secretary (CEO) and the (CEO)’s claims approved by the Treasurer or Chairperson. Before a cheque is issued, a cheque requisition, on the prescribed form, must be completed. Attached to the cheque requisition must be the original supplier’s invoice, and any other supporting documentation such as travel claims etc. The cheque must be attached to the cheque requisition and handed to the first cheque signatory for signature. 2.2.1 CHEQUE PAYMENTS Two cheque signatories shall sign each cheque. The General Secretary and an Executive Member shall sign any salary cheque. There may be any number of officials authorised to sign cheques, but emphasis must be placed on authority levels, independence (division of duties) and integrity. It is the duty of the cheque signatory to ensure that: The cheque requisition has been correctly completed That the account allocation is correct to ensure that the expense will be reflected against the correct budget line item. That the expense is adequately supported by the relevant documentation That the expense is justified in terms of the budget or any other formal authorisation. The second signatory to the cheque must stamp the cheque requisition and the supporting documentation “PAID” to ensure that the documentation is not submitted a second time for payment. Cheque requisitions, once paid, must be filed in numerical order. 2.2.2. ELECTRONIC PAYMENT Only the General Secretary is authorised to do electronic payments and then, only in accordance to pre-approved budgets and after correct requisition forms have been completed. Also to check the following; The payment is being made to the correct beneficiary The payment is being made into the correct bank account The payment is in accordance with properly authorised documentation.
2.3. SAFE CUSTODY OF CHEQUE BOOKS Cheque books must at all times be kept in a safe place to prevent theft or unauthorised use. Unused cheque books must be locked in the safe.
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2.4. SALARIES Once a person has been formally employed, their employment contract and remuneration package must be formulated and a copy placed on their personnel file. The remuneration structure must be approved by the General Secretary and accepted by the employee. The remuneration package should be clearly outlined in the employees contract and signed by both the General Secretary and employee as evidence of their approval and acceptance. Any adjustments to the remuneration package must be documented in writing and authorised by the General Secretary. The salary information must then be captured into the salary system in preparation for the monthly salary calculations. Once the monthly salaries have been prepared in the salaries register, the General Secretary must scrutinise the payroll, initialling each employee’s calculation as evidence his checking prior to payment. No salary may be paid until the salaries register has been completed and checked by the General Secretary. The Executive Member, together with the General Secretary, must sign the cheques for salaries or in the case of electronic transfers, must sign the requisition forms. 2.5 STATUTORY PAYMENTS It is the duty of the Financial Administrator to ensure that the organisation is registered with the required authorities. Such authorities include: -NAPSA -ZRA for PAYE All statutory salary deductions and other statutory levies shall be made in accordance with the current legislation and according to the latest tables. Such deductions shall be paid across to the relevant authorities on due date.
2.6. REIMBURSE TRAVEL See Vehicle Policy 2.7. PETTY CASH
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The office shall maintain the petty cash on the imprest system. The imprest system requires that a set “float” be established. Once the cash has been utilised a cheque is cashed at the bank to the value of the funds spent, and the petty cash float brought back up to its original intended amount. All petty cash expenditure shall be recorded on petty cash vouchers and substantiated by invoices or cash slips. 2.8. PER DIEM PAYMENTS FOR TRAVEL (SUBSISTENCE ALLOWANCE) If employees are required to be away from their normal place of residence overnight on business, they should preferably stay with relatives, friends or family or in a Bed and Breakfast or Guest House. In exceptional cases if there is no suitable accommodation available, an employee may stay in a hotel. Before doing so approval must be obtained from the Project Manager or General Secretary (depending on who is the employees direct line of authority). When staying in a Guest House or Bed and Breakfast, the company will cover all direct costs of accommodation, business calls, etc. In addition the company may pay ZMK …….per night (ZMK…….. for General Secretary) away to cover any personal incidental expenses and to compensate for the inconvenience of being away from home (REFER to staff conditions of service). In the case of staying with friends or relatives the company will cover the costs of providing your hosts with a meal (provided that the costs are contained to reasonable limits) as well as covering any other direct costs of being away. In addition an amount of ZMK… per night (for General Secretary) away may also be paid to the employee, subject to approval from the employees line of authority. Should the employee need to go out of the country on business the company will carry the costs of accommodation, meals and other direct expenses. In addition an amount of US$……. per night ($…..for General Secretary) away will also be paid to the employee(REFER to staff conditions of service). A record of all subsistence payments made to each employee must be maintained in the salaries register. Cognisance must always be given to the tax implications of paying these allowances. 3. ASSETS AND INVENTORY CONTROL 3.1. FIXED ASSETS. A fixed asset is defined as: Any item which is expected to have a useful life of three years or more, and has a cost price of ZMK200, 000 or more. All fixed assets must be capitalised on the balance sheet. Examples of fixed assets would be computers, large items of office furniture, computer software, and office equipment.
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Any item that is expected to have a life of less than three years OR have a purchase price of less than ZMK200,000 should be expensed through the income statement using the account “Low value capital items”. Example would be calculators, free standing fans, vacuum cleaners etc. All fixed asset purchases must be authorised by the General Secretary. If the item has not been approved in the budget, approval must be obtained at Executive level for all purchases exceeding ZMK1000, 000. 3.2. Fixed Asset Register A fixed assets register must be maintained. The register must detail: A brief description of the item The supplier The date of purchase The cost price The unique number of the asset Depreciation details. All fixed assets must be marked with the unique identifying number. Fixed assets having a value of less than ZMK50, 000 should be recorded in the fixed assets register at NIL value. A physical count of all fixed assets should be done each year. 3.3. Depreciation rates Fixed assets should be depreciated over the following periods:: Computer equipment 3 years Computer software 2 years Furniture and fittings 6 years Motor vehicles 5 years 4. STATIONERY An inventory register shall be maintained of all pre-numbered stationery on hand such as receipt books and cheque books. The register shall detail the numbers of the documents on hand. As the books are issued, the staff member requesting the book shall sign the register as evidence that they have taken the book. Used pre-numbered books shall be returned to the stationery inventory for safekeeping. 5. MONTHLY AND ANNUAL REPORTING 5.1. BUDGETS
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The Budget is the benchmark against which the financial performance of the organisation will be monitored. It must be treated as a living document that is referred to and used to measure the organisation’s actual performance. Budgets must be drafted annually and submitted to the Executive for approval. The Executive shall closely scrutinise the budget and once approved, will provide the benchmark against which the organisation will be monitored. Once the budget has been approved, any expenditure budgeted for need not be approved again. However, should the budgeted income not have been received, then the expenditure associated with that income may not be incurred until the income has been received. 5.2. MANAGEMENT ACCOUNTS Management accounts must be prepared by the Financial Administrator in the prescribed format on a monthly basis and submitted to the General Secretary and passed on to each Executive member and to the Director of Finance & Administration of Zambia YMCA National Office. Management accounts shall be presented at each Executive meeting. 5.3. ANNUAL AUDIT In terms of the Companies Act an external auditor shall audit the organisation annually. 6. MEETINGS Management meetings and Executive Meetings shall be held at regular intervals and convened in the manner prescribed by the Constitution. An attendance register shall be maintained for each meeting. Minutes shall be taken and pasted into a secure book for safekeeping. The General Secretary shall ensure that minutes are properly prepared for each meeting.
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