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KWA SANI LOCAL MUNICIPALITY

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					KWA SANI LOCAL MUNICIPALITY
CREDITOR PAYMENT PROCEDURES




NO.                PROCEDURE                      RESPONSIBILITY
1.     The creditors clerk receives the         Chief Financial
       following in batches on a weekly         Officer Designate
       basis:

       • Orders with corresponding
         requisitions from the buying
         section;
       • The suppliers delivery note and
         the internal goods received note
         (GRN) from the receiving
         section; and
       • If the supplier forwards his
         invoice with the delivery note,
         the receiving clerk should date
         stamp it and forward it to the
         creditors clerk.

2.     All invoices should be date stamped Chief Financial
       and forwarded to the creditors clerk. Officer Designate
                                             (Mail-opening Clerk)

3.     Each supplier invoice must be Chief Financial
       matched to a properly approved Officer Designate
       requisition and order form.    (Creditors Clerk)

4.     The invoice must then be matched to Chief Financial
       the delivery note. The description of Officer Designate
       the goods, the quantity supplied and (Creditors Clerk)
       the signature of the authorized person
       receiving the goods must be
       confirmed.

5.1.   The creditors clerk is responsible for   Chief Financial
       checking the adequacy and                Officer Designate
       completeness of documents received       (Creditors Clerk)
       from the buying and receiving
       sections.




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KWA SANI LOCAL MUNICIPALITY
CREDITOR PAYMENT PROCEDURES




NO.               PROCEDURE                      RESPONSIBILITY
5.2.   If the creditors clerk is not satisfied Chief Financial
       with the documents received from the Officer Designate
       buying or receiving sections, he/she
       must interrogate the relevant buyer or
       receiver.

5.3.   In the instance that the creditors clerk
       is still unhappy with the explanations Municipal Manager
       supplied by the buyer or receiver, the
       matter must be referred to the
       Municipal Manager for resolution.


6.     If the invoice relates to a service that Chief Financial
       was supplied, the Officer that Officer Designate
       requested the service, should sign the (Creditors Clerk)
       invoice to indicate that the service
       was received.


7.     Where a service is rendered regularly Chief Financial
       in terms of a standing contract, or Officer Designate
       where a continuing service such as a
       telephone is provided, order forms are
       not required. The Chief Financial
       Officer or his Designate should sign
       these invoices after considering the
       necessity of the expense as well the
       reasonableness of the amount.

8.     An initial or progress payment in Chief Financial
       terms of a contract or written Officer Designate
       agreement shall not be considered an (Creditors Clerk)
       advance but shall be brought into
       account as a direct charge to the
       appropriate vote or service. The
       voucher pertaining to such payment
       shall:

       •   Disclose the total amount payable
           in terms of the contract;



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KWA SANI LOCAL MUNICIPALITY
CREDITOR PAYMENT PROCEDURES




NO.              PROCEDURE                     RESPONSIBILITY
8.    (cont.)
      • Disclose the total amount of all Chief Financial
         previous payments in terms of        Officer Designate
         the contract together with the (Creditors Clerk)
         cheque numbers;
      • Disclose the total payment to
         date, including the payment being
         made as reflected in the voucher;
      • Disclose the balance due; and
      • Be supported by a certificate from
         a duly authorised person, that the
         supplier is entitled to the payment
         in terms of the contract and the
         work      has      been     properly
         performed.




9.    All payments:                          Municipal Manager

      • Should be effected by cheque or
        electronic transfer. Apart from
        petty cash, no payments should be
        made in cash; and
      • Should be made either monthly or
        weekly,     and,    only     under
        exceptional circumstances, as
        determined by the Municipal
        Manager, should a payment be
        made outside of these intervals.




10.   The creditors clerk must prepare a list Chief Financial
      of payments to be made, segregating Officer Designate
      between electronic and cheque (Creditors Clerk)
      payments.




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KWA SANI LOCAL MUNICIPALITY
CREDITOR PAYMENT PROCEDURES




NO.               PROCEDURE                      RESPONSIBILITY


11.    The creditors clerk must present the Chief Financial
       payment listing together with Officer Designate
       supporting documentation (refer (Creditors Clerk)
       points 3 to 7) to the Chief Financial
       Officer.

12.    The Chief Financial Officer will Chief Financial
       critically inspect the supporting Officer
       documentation and identify which
       payments will be authorised and more
       importantly which are disputed.

13.    Disputed payments will be returned to Chief Financial
       the creditors clerk. It is the Officer Designate
       responsibility of the creditors section (Creditors Clerk).
       to ensure that the supporting
       documentation is complete.

14.    Cheque requisition forms are Chief Financial
       completed in the creditors clerk for Officer Designate
       each cheque payment.                 (Creditors Clerk)



15.    These cheque requisition forms will Chief Financial
       be forwarded to an officer who has Officer Designate
       been delegated the authority to
       prepare cheques.

16.1   The cheques and the supporting Municipal Manager
       documentation are forwarded to the and Chief Financial
       Municipal Manager and Chief Officer
       Financial Officer for signing.



16.2   The Municipal Manager may elect for Municipal Manager
       cheques below a certain amount to be
       signed by the Chief Financial Officer
       and Head of the Section concerned.
       These limits must be formally
       documented and strictly adhered to.
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KWA SANI LOCAL MUNICIPALITY
CREDITOR PAYMENT PROCEDURES




NO.               PROCEDURE                       RESPONSIBILITY
17.    The Municipal Manager should Municipal Manager
       inspect the documentation and satisfy
       himself as to the validity of the
       expense before he signs the cheque.


18.    The Chief Financial Officer will co- Chief Financial
       sign the cheque and record the cheque Officer Designate
       number       on    the     supporting
       documentation. The documentation
       should also be stamped as evidence of
       it being paid.

19.    The cheques should then be posted to Chief Financial
       or collected by the respective Officer Designate
       creditor.



20.    The Chief Financial Officer must Chief Financial Officer
       prepare the electronic funds transfer
       (EFT) for those suppliers that are paid
       electronically.

21.1   The Municipal Manager and the Municipal
       Chief Financial Officer must insert Manager/Chief
       passwords to effect the electronic Financial Officer
       funds transfer after reconciling it to
       the relevant supporting documents.
       The Chief Financial Officer must
       stamp the supporting documentation
       as paid.

21.2   The Municipal Manager can elect to
       adopt      the     same      delegated
       authorisation limits to the Chief
       Financial Officer and Heads of
       Section as set out for the signing of
       cheques referred to in 16 above.

22.    In exceptional circumstances, the Municipal
       Municipality may have entered into Manager/Chief
       agreements requiring payment by Financial Officer
       debit order. These arrangements

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      KWA SANI LOCAL MUNICIPALITY
      CREDITOR PAYMENT PROCEDURES




      NO.              PROCEDURE                      RESPONSIBILITY
      22    (cont.)
            would have to be authorised by the Municipal
            Chief Financial Officer and the Manager/Chief
            Municipal Manager.                 Financial Officer




      23.   The accounting section should Chief Financial
            prepare a schedule of all debit orders Officer Designate
            that were honoured in that respective (Accounting Clerk)
            month. This schedule will form part
            of the monthly bank reconciliation.
            This schedule should be forwarded to
            the creditors clerk.

      24.   The creditors clerk will be Chief Financial
23.         responsible       for      providing Officer Designate
            documentation to support the validity (Creditors Clerk)
            of these deductions.

      25.   The schedule accompanied by Chief Financial
            supporting documentation should be Officer Designate
            submitted to the Chief Financial (Creditors Clerk)
            Officer and the Municipal Manager
            for authorisation.



      26.   The Chief Financial Officer and the     Municipal
            Municipal Manager would sign this       Manager/Chief
            form as evidence that they have         Financial Officer
            inspected the supporting                Designate
            documentation and are satisfied as to
            the validity of the deduction.



      27.   If any deduction is disputed by the Chief Financial
            Chief Financial Officer or Municipal Officer Designate
            Manager then it will be referred to the (Creditors Clerk)
            creditors clerk, who will be
            responsible for following up on all
            queries with regard to payments.

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KWA SANI LOCAL MUNICIPALITY
CREDITOR PAYMENT PROCEDURES




NO.                PROCEDURE                      RESPONSIBILITY
28.1   The creditors clerk is responsible for   Chief Financial
       maintaining all documentation            Officer Designate
       relating to creditor payments.           (Creditors Clerk)

28.2   This would include a monthly or
       weekly reconciliation of the creditors
       statement to the accounting records
       maintained by the Municipality.




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