Financial Training Manual for NGO's in Namibia

8/7/2019 Financial Training Manual for NGO's in Namibia

1/76

Fundamentals o NGO Management

1

Fundamentals of NGO Management

A Practical Guide to the

Financial Management

of NGOs

Theunis Keulder & Erika Benz


2/76


3/76


Theunis Keulder & Erika Benz

A Practical Guide to the Financial

Management o NGOs

Published by

Namibia Institute or Democracy

Funded by

United States Agency or International Development (USAID) and the Embassy o Finland

Copyright: 2011, Namibia Institute or Democracy

No part o this book may be reproduced in any orm or by any means, electronic or

mechanical, including photocopying, recording, or by any inormation storage and

retrieval system, without the permission o the publisher.

Design and Layout: DV8 Saatchi & Saatchi

Printed by: John Meinert Printing, Windhoek, Namibia, 2011

Language Editor: William Homeyr & Leonie Homeyr-Juritz

ISBN: 978-99916-865-3-0


4/76


Foreword

As part o its programme to strengthen civil society in Namibia, the Namibia Institute or

Democracy (NID) has since 2005 conducted a wide range o training and technical assistance

programmes aimed at improving the internal management o civil society organisations. This

guide, which is published as part o the NIDs Fundamentals o NGO Managementseries, has been

developed using inputs obtained rom numerous training sessions with NGOs, and is intended

to assist organisations in their nancial management unction. It is also used extensively by the

NID in training civil society organisations in nancial management matters.

The guide provides an introduction or the non-nancial manager or leader to controlling

the nances o an organisation in such a way that the organisation can discharge its duty

o being nancially accountable. It should be reviewed by everyone in an organisation whois responsible or nancial management, including those who prepare grant proposals and

those who record and report on grant project activities. The guide is not oered as a complete

manual o procedures on nancial administration; it is intended only to provide practical

inormation on what is expected rom organisations in terms o scal accountability. To

this end, the most important nancial reporting and administrative orms are annexed as

templates. A case study is also attached or practical training purposes.

In this guide, the term Non-governmental Organisation (NGO) will be used collectively to

describe civil society organisations, community-based organisations, non-state actors, welare

organisations, NGOs and any not-or-prot civic groups that have been ormed to provide a

particular service. Although the main executive position in an NGO is commonly reerred to

as the Executive Director, Chie Executive Ocer or Managing Director or example, in this

guide the term Executive Director will be used throughout or ease o reerence. Similarly, the

governing board will be reerred to as the Board o Directors.

Theunis Keulder

Executive Director

Namibia Institute or Democracy


5/76


Acronyms and Initialisms

NID Namibia Institute or Democracy

NGO Non-Governmental Organisation

PAYE Pay-As-You-Earn

SSC Social Security Commission

Contents

Foreword

1 Introduction to nancial management ......................................................................................................................... 5

2 The accounting system ........................................................................................................................................................................ 8

2.1 The unding agreement ....................................................................................................................................................................... 8

2.2 The budget ............................................................................................................................................................................................................... 8

2.3 Bank accounts ................................................................................................................................................................................................. 10

2.4 Petty cash .............................................................................................................................................................................................................. 10

2.5 Procurement ...................................................................................................................................................................................................... 11

2.6 Recording o project activities .............................................................................................................................................. 12

2.7 Payments ................................................................................................................................................................................................................. 13

2.8 Bank transactions cash book .............................................................................................................................................. 14

2.9 Cash transactions petty cash .............................................................................................................................................. 15

2.10 Monthly summaries o expenses......................................................................................................................................... 15

2.11 Trial balance ..................................................................................................................................................................................................... 15

2.12 Balance sheet and income statement .......................................................................................................................... 15

2.13 Audited annual nancial statements ........................................................................................................................... 16

3 Reporting to a donor ........................................................................................................................................................................... 19

4 Sta administration .............................................................................................................................................................................. 19

4.1 The employment agreement ..................................................................................................................................................... 19

4.2 Salary payments .......................................................................................................................................................................................... 20

4.3 Income tax registration o the organisation ..................................................................................................... 20

4.4 Income tax registration o employees ....................................................................................................................... 21

4.5 Social Security Commission ....................................................................................................................................................... 21

4.6 The Employee Compensation Act o 1941 ........................................................................................................... 21

4.7 Administration o leave ................................................................................................................................................................... 21

4.8 Consultants ......................................................................................................................................................................................................... 22


6/76


Annexures ............................................................................................................................................................................................................................... 23

Annex 1: Expense summary .......................................................................................................................................................................... 24

Annex 2: Reconciliation o donor contribution .............................................................................................................. 26

Annex 3: Fixed asset list .................................................................................................................................................................................... 28

Annex 4: Purchase order ................................................................................................................................................................................... 30

Annex 5: Attendance register: Grassroots seminars .............................................................................................. 31

Annex 6: Attendance register: Workshops ............................................................................................................................ 32

Annex 7: Travel claim orm .......................................................................................................................................................................... 33

Annex 8: Daily allowance claim orm ............................................................................................................................................ 34

Annex 9: Financial report: Workshop ............................................................................................................................................ 35

Annex 10: Conrmation o goods purchased .................................................................................................................... 36

Annex 11: E-bank requisition ..................................................................................................................................................................... 37

Annex 12: Cheque requisition ................................................................................................................................................................... 38

Annex 13: Petty cash requisition .......................................................................................................................................................... 39

Annex 14: Petty cash summary ............................................................................................................................................................... 40

Annex 15: Trial balance ...................................................................................................................................................................................... 41

Annex 16: Cash book ............................................................................................................................................................................................... 42

Annex 17: Payslip ........................................................................................................................................................................................................ 44

Annex 18: Leave application ....................................................................................................................................................................... 45

Annex 19: Record o leave ............................................................................................................................................................................. 46

Annex 20: Honoraria agreement ........................................................................................................................................................... 48

Annex 21: Case study ............................................................................................................................................................................................. 49

Bibliography......................................................................................................................................................................................................................... 68


7/76


5

1 Introduction to nancial management

Leaders and managers o NGOs have to develop, at the very least, basic skills in nancial

management. Expecting others in the organisation to manage nances is clearly asking or

trouble. Basic skills in nancial management start in the critical areas o cash management

and bookkeeping, which should be carried out ollowing certain nancial controls to ensure

integrity in the bookkeeping process. New leaders and managers should switly learn how to

generate nancial statements (rom bookkeeping journals) and analyse those statements so

as to develop a real understanding o the nancial condition o the organisation. Financial

analysis shows the reality o the situation o an organisation and as such, is one o the

most important practices in management. This guide will provide you with an understanding

o common practice in nancial management, and help you to build the basic systems and

practices needed in a healthy organisation.

The nancial situation o an organisation should be reviewed at least on a monthly basis, with

the ocus on the budget, receipts o income and expenditure. The Executive Director/nancial

ocer shall be responsible or ensuring that nancial controls are in place and adhered to

and, more specically, that:

expenditures remain within the budget,

expenditures are only or the purposes set out in the budget,

nancial documentation, including quotations, invoices and receipts are collected

and led in an orderly manner.

All sta members, programme beneciaries, volunteers and board members generally have a

responsibility to prevent nancial mismanagement. It is thereore imperative to have internal

nancial control mechanisms and policies in place.

Internal accounting control comprises a series o procedures designed to promote and protect

sound management practices, both general and nancial. By ollowing internal accounting

control procedures, an organisation will signicantly increase the likelihood that:

nancial inormation is reliable, so that managers and the Board can depend on

accurate inormation to make decisions,

assets and records o the organisation are not stolen, misused

or accidentally destroyed,

the organisations policies are ollowed,

government regulations are complied with.


8/76


6

The rst step in developing an eective internal accounting control system is to identiy those

areas where abuses or errors are likely to occur. The ollowing areas and objectives, which

will be discussed in more detail in the ollowing section o this guide, need to be addressed

through an eective internal accounting control system:

cash receipts to ensure that all cash intended or the organisation is received, promptly

deposited, properly recorded, reconciled and kept under adequate security,

cash disbursements to ensure that cash is disbursed only upon proper authorisation o

management, or valid business purposes and that all disbursements are properly recorded,

petty cash to ensure that petty cash and other working unds are disbursed only or proper

purposes, are adequately saeguarded and properly recorded,

payroll to ensure that payroll disbursements are made only upon proper authorisation

to bona de employees, that payroll disbursements are properly recorded, and that the

organisation is compliant with related legal requirements (such as payroll tax deposits),

grants, gits, and bequests to ensure that all grants, gits, and bequests are received andproperly recorded and that compliance with the terms o any related restriction is adequately

monitored,

xed assets to ensure that xed assets are acquired and disposed o only upon proper

authorisation, are adequately saeguarded and are properly recorded.

Additional internal controls are also required to ensure proper recording o donated materials,

pledges and other revenues, accurate, timely nancial reports and inormation returns and

compliance with other government regulations.

Achieving these objectives requires that your organisation clearly states procedures or

handling each area, including a system o checks and balances in which no nancial transactionis handled by only one person rom beginning to end. This principle, called segregation o

duties, is central to an eective internal controls system. Even in a small organisation, duties

may be divided up between paid sta and volunteers to reduce the opportunity or error

and wrongdoing. For example, in a small organisation, the Executive Director might approve

payments and sign checks prepared by the bookkeeper or oce manager. The board treasurer

might then review disbursements with accompanying documentation each month, prepare

the bank reconciliation, and review cancelled cheques.

The board and the Executive Director share the responsibility or setting the tone and

standard o accountability and conscientiousness regarding the organisations assets and

responsibilities. The board, usually through the work o the nance committee, ulls thatresponsibility in part by approving many aspects o the internal control accounting system.

The policies and procedures or handling nancial transactions are best recorded in an

accounting procedures manual describing the administrative tasks and identiying the person

responsible or each task. The manual does not have to be a ormal document; it can be a

simple description o how unctions such as paying bills, depositing cash and transerring

money between unds are handled. As you start to document these procedures, even in simple

memo orm, the memos themselves can be kept together to orm a very basic accounting

procedures manual. Writing or revising an accounting procedures manual provides a good

opportunity to ensure that adequate controls are in place; additionally, such a manual helps

to acilitate a smooth turnover in nancial sta.


9/76


7

The Executive Director is commonly responsible or overseeing the day-to-day implementation

o these policies and procedures. Due to the number o detailed requirements involved when an

organisation receives unding rom a given donor, there should be one person in the organisation

(possibly the grant administrator) with the responsibility o understanding and monitoring the

specic regulations, requirements and compliance actors specic to that donor.

As an organisation changes and matures and unding and programmes change, you will periodically

need to review the internal accounting control system which was established and to modiy it to

make allowance or new circumstances (bigger sta, more restricted unding) and regulations

(such as receiving bigger grant awards with increased compliance demands).

As a non-nancial leader or manager, you are not required to set up the bookkeeping system

yoursel, or to maintain it. This should instead be done by a competent bookkeeper or

accountant employed by your organisation. It can also be done by someone who oers a

bookkeeping service to a number o organisations.

The advantages o having a bookkeeper permanently employed by an NGO are that:

the bookkeepers rst loyalty will be to the organisation,

the bookkeeper will be available at all times,

the cost o employing the bookkeeper remains the same, no matter how many times

he/she is required to meet with sta or explain something to them,

i an NGOs nances are complicated and there are many nancial transactions, the

organisation may need a bookkeeper on hand to deal with queries and problems as

they arise.

When a bookkeeper is employed it is important to:

check reerences, experience and qualications,

make sure he/she can use the system you have or want to use (very important i you

are computerised),

conduct the interviews in the presence o someone with nancial expertise, who will

ask the right kinds o questions,

insist on a probationary period o at least three months.

Do not employ someone who will have to learn on the job unless you have

a fnance department employing more than one bookkeeper.


10/76


8

2 The accounting systemA practical accounting system or an organisation typically consists o the ollowing:

2.1 The funding agreementThe unding agreement between the donor and the organisation outlines all aspects regarding

the project and should include the ollowing:

activities to achieve the deliverables

unding o the project

reporting on activities

narrative report-

nancial report-

periods o reporting-

management o unding and procurement o goods

stipulations in the budget regarding how the unding is to be applied.

2.2 The budgetThe budget includes all planned activities listed by type o activity. It is a nancial ramework

listing all activities and deliverables as stipulated in the agreement. Each line item in the

budget indicates the costs which may be incurred or the specic activity (or example, the

number o workshops to be presented, the number o persons to attend, the venue rental

costs, the presenter costs). Travelling costs and per diems are either provided or in a separate

line item or aligned with specic activities. Fees per kilometre and per diems applicable are

listed. Provision or administrative costs may include:

bookkeeping ees

audit ees

telephone costs

rental

stationery

other oce costs

Oce costs may be subdivided into specic costs or may be provided or as a lump-

sum or overhead costs or the total project.

I divided into specic costs, actual costs are claimed per month as they occur-

according to specication.I specied as a lump sum, the total overhead provision may be transerred to-

a dedicated account rom which running costs are paid monthly in total. The

organisation can transer the overhead unds to a dedicated account named,

or example, own unds, pooling overhead unds rom dierent projects. When

transerring the overhead costs to an own unds account, that sum is entered

as an expense in the records o the project in the month o transer in one sum.

The organisations running costs which are not project-specic may be paid rom

the own unds account. Funds remaining in this account may also be used to

bridge periods when projects have been completed and new projects have not yet

commenced, but running costs like rent, telephone and insurance still have to be

paid by the organisation.


11/76


9

I, during the implementation o the agreement, it is ound that certain reasonable costs could

exceed the relevant budget line, an agreement has to be reached with the donor to re-adjust

the costs accordingly and to rebalance the budget by reducing other line items. This should

be done beore overspending on a line item actually occurs. Salaries and ees are generally not

adjustable during the course o an agreement. For the duration o the project a summary oexpenses is drawn up and is updated monthly, indicating monthly expenses, total expenditure

to date and the remainder o unds per line item. This serves as a control instrument or both

the manager o the organisation and the project programme managers.

(See page 24: Annex 1 Expense summary)

The ollowing expenses are usually not allowed by donors:

lobbying includes direct legislative lobbying and grassroots lobbying;

und-raising includes costs o organised und-raising, endowment drives,

solicitation o gits and bequests and similar expenses incurred solely to raise capital

or obtain contributions;

bad debts any losses arising rom uncollected accounts and other claims and

related costs;

contingencies contributions to a contingency reserve or any similar provision or

unoreseen events;

nes and penalties resulting rom violations o, or ailure to comply with state

and local laws and regulations;

losses on other awards any excess o costs over the grant budget is not allowable;

unnecessary travel costs or example, when travelling by air, only economy class

is allowable;

contributions and donations by the organisation to others;

certain depreciation or use allowances on buildings and equipment purchased with

the donors unding;

entertainment costs or amusement, social activities, ceremonials, hospitality

and activities relating thereto, such as meals, lodging, rentals, alcoholic drinks,

transportation and gratuities are unallowable;

interest costs incurred or interest on borrowed capital are unallowable.

In addition, an NGO will generally have to submit a reconciliation o unds received to its

donors at pre-arranged time intervals so that control can be kept o how much o a grant

advance has been used, whether the NGO would need a subsequent advance and how much

interest (which oten has to be returned to the donor) any advanced unds have accumulated.

Although the requirements o various donors and the orms to be used in this regard may

dier, an example o such a reconciliation orm is presented in Annex 2 o this guide.

(See page 26: Annex 2 Reconciliation o donor contribution)


12/76


10

2.3 Bank accounts

The choice o a bank will depend on the acilities available at the grantees location. The

decision should also be based on the willingness o the bank to pay interest on a current

account. I the agreement stipulates that interest earned on the unds o the project isreundable to the donor, a dedicated bank account must be opened to accommodate that

agreement. Management decides who is responsible or the approval o payments, the signing

o cheques, electronic transers, and the handling o petty cash:

Cheques: A single signatory signs, or two signatories co-sign cheques according to

a resolution o the Board o Directors o the organisation. The cheque plus a cheque

requisition orm is completed by the bookkeeper and presented to the signatory/ies,

together with the approved invoice or payment.

Electronic transers: The same guidelines as or cheques apply. The transer

request is signed by one or two signatories, as has been determined. A designated

person does the actual electronic transers. The transer documentation is signed by

the signatories who approved the transaction, or by other designated persons.

Organisations must provide saeguards or all grant property, whether cash or other assets,

and assure that it is used solely or authorised purposes. Control will be enhanced i the duties

o the members o the organisation are divided so that no one person handles all aspects

o a transaction rom beginning to end. Although a complete separation o unctions may

not be easible or a small organisation, some measure o eective control may be obtained

by planning the assignment o duties careully. Many o the most eective techniques or

providing internal control are very simple. Within an organisation, the same person should

thereore not be perorming the ollowing duties:

preparation o bank reconciliations and approval thereo;

preparation o requisitions and approval o expenses;

accounting entries and approval o expense reports.

Where required by a donor agency, a separate bank account should be opened or the specic

use o the donors approved budget and activities. Transers between donor bank accounts are

NEVER allowed. However, i necessary, unds may be transerred rom the general account to

a donor account when unds run low or unds are not transerred in time.

Bank reconciliations should be conducted on a monthly basis by the nancial ocer and

approved by the Executive Director.

2.4 Petty cash

Depending on the type o activities, cash payments sometimes cannot be avoided. In this case

a petty cash structure must be put in place. One person only (supervised by, or example, the

nancial controller) should have control over cash unds, have sole access to the cash, and

assume responsibility or the reconciliation o the petty cash vouchers and the remaining

cash unds. I the nancial controller is in charge o petty cash, another person is designated

to supervise the petty cash operation at intervals. The handler o petty cash is responsible or

the reconciliation o the petty cash unds and is liable or any shortages o cash. The key o

the cash box remains with the person handling petty cash at all times.


13/76


11

Cash is kept in a cash box in a secure, lockable cupboard or a sae.

For payouts rom petty cash, a petty cash request orm must be completed.

The recipient o the cash signs the petty cash request orm when receiving the cash.

The transaction is nalised when proo o purchase (invoice or till slip) is handed to

the keeper o the petty cash and any surplus cash has been returned.

The nal amount paid, and the unds returned to petty cash, are noted on the petty

cash request orm.

2.5 Procurement

An organisations procurement policy should be based on the principle o assuring the most

cost ecient and rational use o resources or goods or services that will best serve the

organisation both at the present and in the long term. Organisations should ollow a multi-

quote system procurement policy or the supply o both products and services. This system

o procurement should not preclude exercising good judgement in assessing the merits

o the quotations received. This system o procurement should not result in a lowering o

minimum standards or norms as required by the specic purchase in assessing the quotations

received. In instances where long-term business relations have developed with suppliers to

the extent o sole-sourcing, the relationship will be subject to market-related standards and

competitive review. In instances where procurement occurs within monopolistic industries,

such procurement will be exercised with good judgment. This does not preclude procurement

o services beyond country borders i necessary and to the benet o the organisation. All

assets are to be refected on the organisations xed asset register. Asset disposal shall occur

in consultation with the relevant donor.

Dierent approaches should apply to the purchase o non-expendable items, or xed assets (such

as computers, cars, printers and copying machines), on the one hand, and general purchases

(such as oce stationery) on the other. Non-expendable items are those with a useul lie span

o more than one year; they are permanent in nature and include (but are not limited to) oce

urniture, computer equipment, photocopiers and electronic equipment.

In the case o non-expendable items, or xed assets, such as computers, printers and

photocopying machines:

the purchase must be provided or by the agreement and approved by the Executive

Director

three quotations must be obtained i the purchase value o a single item exceeds

N$1 000, or as specied by the agreement

the Executive Director must conrm the choice (made rom the quotations) o item to

be purchased by signing the quotation beore the item is actually ordered.


14/76


12

A xed asset register, listing the ollowing details relating to non-expendable equipment,

must be maintained:

type o equipment

serial number

date purchased

cost o purchase

current cost (depreciated value)

location (oce assigned to).

All items removed rom the asset register should be accounted or by the Executive

Director. The asset register should be updated as soon as new items are purchased or

acquired, but at least once a year.

(See page 28: Annex 3 Fixed asset list)

In the case o general purchases (uel, stationery, rereshments, cleaning material):

a purchase order is completed beore the item is purchased;

the delivery note, conrming receipt o goods, is signed by the person o the

organisation receiving the goods;

the invoice is approved by the Executive Director or payment and signed, along with

the payment request orm and he or she indicates the relevant budget line item;

the payment is made by cheque or electronic transer;

low cost items such as rereshments and cleaning materials are mainly purchased via

petty cash.

(See page 30: Annex 4 Purchase order)

Non-expendable items should not be removed rom the oce building unless or purposes

relating to a programme. In such a case, prior authorisation must be given by the Executive

Director. A prescribed consent orm must be completed prior to the removal o the item rom

the oce building. I a sta member removes a non-expendable item rom the oce without

prior consent and it is damaged or stolen, the sta member will take responsibility or the

damage or loss o property. A policy does not normally allow or the lending out any non-

expendable items to a person or organisation. However, the Executive Director may use his or

her discretion i the need arises or lending out specic items. In such cases, the lender will

take ull responsibility or damages to or thet o the property.

2.6 Recording of project activities

Activities should be executed as agreed upon in the agreement with the donor. Records and

proo per activity must be kept. Reporting is usually done as ollows:

a) Narrative reporting on activities


15/76


13

The programme manager summarises the activity, supported by the ollowing documentation,

also reporting on outcomes, challenges incurred and results achieved, i measurable:

an attendance register, signed by all participants o workshops, conerences and seminars;

the date, place, venue and subject o the seminar or workshop and group addressed

(recorded on the attendance register);

evaluation orms, completed at the closure o the event by the participants;

questions regarding the presentation and the content o the workshop, completed

anonymously by the participants o the workshop (listed on the evaluation document).

(See page 31: Annex 5 Attendance register grassroots educational seminar)

(See page 32: Annex 6 Attendance register workshop)

b) Financial reporting on activities

All costs incurred or the presentation o an activity are summarised in a nancial report:

venue costs rental o hall

presenter ee external consultant

travelling expenses per kilometre ees or presenter or participants rom remote

locations

presentation materials and stationery used during the workshop

rereshments consumed during the workshop

daily allowances (per diems) only applicable or overnight absence rom home.

When planning an activity, expenses must be aligned with the budget.

(See page 33: Annex 7 Travel claim orm)

(See page 34: Annex 8 Daily allowance claim orm)

(See page 35: Annex 9 Financial report: Workshop)

(See page 36: Annex 10 Confrmation o goods purchased)

2.7 Payments

Payments are usually made electronically by internet banking, by cheque or in cash. The

procedures or paying electronically by internet banking or by cheque are as ollows:

payment o an invoice is authorised by the managers signature and an indication o

the budget line item on the invoice

the bookkeeper completes the cheque requisition orm, writes out the cheque and

attaches the cheque and the invoice to the requisition orm

each cheque should be secured with the words Not negotiable, written out or

stamped on the top part o the cheque

the signatories sign the cheque as well as the cheque requisition orm

the cheque number, the date o the cheque and the project which unds the payment


16/76


14

are clearly written on the invoice in order to prevent double payment o invoices

cash cheques are issued only to replenish petty cash and may not be secured with

the Not negotiable note (a cheque which is marked Not negotiable has to be paid

into a bank account).

(See page 37: Annex 11 E-Bank requisition)

(See page 38: Annex 12 Cheque requisition)

The procedure or payment in cash is as ollows:

each payment rom petty cash is recorded on a cash requisition orm

the person in charge o the petty cash completes a cash requisition, noting the

amount advanced

the recipient o the cash signs in acknowledgement o receipt o the cash advance

ater the purchase has been made, the proo o payment (invoice or till slip) and the

remaining cash unds are returned to the petty cash holder

the actual costs, as well as the unds returned are recorded, and the requisition orm

is signed by the petty cash holder and the purchaser to indicate agreement regarding

the conclusion o the transaction

the proo o payment is attached to the petty cash requisition orm.

(See page 39: Annex 13 Petty cash requisition)

2.8 Bank transactions cash book

Bank transactions may consist o cheques issued, electronic banking transactions, debit

orders, interest received and bank charges. Banks issue bank statements on a monthly basis

or as agreed upon with the bank. All transactions are recorded on a schedule indicating:

opening balance at the beginning o the month

all cheques issued during the month, listed in numerical order

all e-banking transactions, listed in chronological order

debit orders paid by the bank

bank charges

balance at the end o the month.

The balance refected in the cash book is reconciled monthly with the balance showing in the

bank statement. Dierences between the two balances are reconciled by listing the outstanding

items between the two balances. In the cash book, all payments are subdivided (i applicable)

to the line item columns o the projects budget line items, and then summarised on the cash

book schedule, adding up to total expenses o the month paid rom the bank account.

On the cash book schedule, petty cash expenses are also listed and added to the columns or line

items. These show movement in unds available in both the bank account and the petty cash.

The cash book summarises movement in unds payable and receivable, and income received

rom donors.


17/76


15

(See page 42: Annex 16 Cash book)

2.9 Cash transactions petty cash

All transactions are recorded on a schedule indicating:

opening balance at beginning o the month

cash received

payments made rom petty cash.

No petty cash transaction should be let incomplete at the end o each month. The closing

balance at the end o the month must be reconciled with the cash available. Any shortall is

reunded to the petty cash by the handler o the petty cash rom his or her own pocket.

(See page 40: Annex 14 Petty cash summary)

2.10 Monthly summaries of expenses

On this schedule all expenses are recorded or each budget line item, per month. In one

column the budget according to the agreement is listed. In another column the dierences

between actual costs to date and the budget are indicated, appearing as under budget or over

budget. This schedule is an important instrument to keep track o the progress o spending

on a unding agreement.

2.11 Trial balanceThe trial balance lists all general ledger accounts. The totals o the debit and the credit

balances should be equal, proving that debit and credit entries were posted equally and are

balancing. This does not prove that costs have been allocated correctly.

(See page 41: Annex 15 Trial balance)

2.12 Balance sheet and income statement

The balance sheet and income and expenditure statement are extracted rom the trial balance.

The income and expenditure statement includes all monies the organisation has earned or

received and balances this against how much has been spent. Essentially, the statement presents

total income received and the nature thereo, as well as the costs and expenses charged against

this income. For an NGO this statement typically refects unding sources compared against

programme expenses, administrative costs, and other operating commitments. Revenues and

expenses are urther categorised in the income statement by the donor restrictions on the

unds received and expended.

Whereas the income statement depicts the overall status o the organisations surplus or decits by

looking at income and expenses over a period o time, the balance sheet depicts the overall status


18/76


16

o the organisations nances at a xed point in time usually at the end o its nancial year. All

assets are added and all liabilities subtracted to compute the organisations overall net worth.

2.13 Audited annual financial statements

Grantees are expected to maintain a state o audit readiness. This means that nancial and

programme-related records relating to their grants must be readily accessible or audit.

Failure to provide the auditor with reliable documentation could lead to questioned costs

and possibly result in cost disallowances. Ater the end o each nancial year an annual audit

must be perormed by accredited auditors. Each donor is supplied with a copy o the audited

nancial statements. Donors oten expect audited nancial reports on their specic unding.

This has to be agreed upon with the auditors at the start o the audit. The total period o the

agreement with the donor has to be covered by audited nancial statements. This specic

reporting to a donor could span the audit reports o several nancial years o the organisation,

depending on the total period covered by the agreement.

An external audit is an independent report that covers:

how much money the organisation has received and spent in the nancial year, and

what the money was used or;

whether the money has been spent in accordance with the constitution o the

organisation, board decisions and donor requirements;

whether the accounts (the bookkeeping system) have been properly and honestly kept;

the value o the organisations assets;

how the nancial record-keeping system could be improved.

It is also possible to perorm an internal audit or your own purposes. This can be done by someone

inside the organisation.

The person who perorms the external audit (the auditor) must not be actively involved in the

organisation, and should not be a relative or close associate o anyone actively involved in it. In

some organisations, it is a government or donor requirement that the auditor be ormally qualied

and registered. In others, it is sucient i the audit is perormed by someone who is competent and

not directly involved with the organisation.

The auditor is usually ormally appointed at the organisations annual general meeting. The auditor

can only be changed by a ormal resolution at an ocial board meeting. Donors usually want to

know why you are changing your auditor. In many countries there are strict legal guidelines stating

who can act as an auditor, oten linked to the size o the organisation.

As well as auditing the annual accounts, the auditor is usually available during the year to provide

support and advice.

The audit is usually done as soon as possible ater the close o the organisations nancial year.

In preparation o the audit the ollowing documents should be ready:


19/76


17

a copy o the organisations constitution

copies o contracts, agreements, or letters setting out the conditions o grants,

donations or other income received or specic purposes

copies o budgets or ongoing work or special projects

copies o grant application orms

copies o the minutes o board meetings

income and expenditure analysis records

supporting documentation or income

receipt books i receipts or money received are issued

petty cash analysis records

supporting documentation or petty cash records

bank statements or the year

bank reconciliations or the year

cheque stubs (counteroils) or all cheque books used during the year, and the one

currently in use i it was used or the year under audit

cheques returned to the organisation by the bank once they have been cleared

all deposit book records

a list o creditors (everyone to whom the organisation owed money) at the end o the

nancial year

a list o debtors (everyone by whom the organisation was owed money) at the end o

the nancial year

a list o creditors and debtors rom the end o the previous nancial year

records o statutory payments made, particularly on sta salaries

details o all assets.

The auditor may also ask to see:

a list o accruals income the organisation has received or goods or services it

has not yet provided;

a list o pre-payments expenditure the organisation has made or goods or

services it has not yet received;

lists o accruals and pre-payments rom the end o the previous nancial year.

Other documents the auditor may need or that will help the auditor include:vehicle log books

value added tax (VAT) records

tax records

When the audit is almost complete, the auditor will list issues that have not been ully resolved

during the audit. The auditor will ask management to clariy these issues; i unresolved issues

cannot be claried, the auditor will mention them in the audit report. Such a circumstance, should

it arise, is a very serious matter.

At the end o the audit, the auditor usually draws up a set o drat annual accounts based on theinormation reviewed. He or she will include a record o income and expenditure actually received


20/76


18

and spent, possibly with adjustments or creditors, debtors, accruals, pre-payments and depreciation

o equipment or vehicles. There may also be a drat balance sheet showing the nancial position

o the organisation on the last day o the nancial year. The auditor will include a statement saying

that the accounts have been drawn up in accordance with certain standards, based on inormation

provided by the organisation. The statement usually says that, in the auditors opinion, the accountsare an accurate and honest statement o the organisations nancial dealings and situation or the

nancial year in question.

A good auditor will recommend ways to improve the organisations nancial systems and

procedures. The auditors advice should always be taken seriously. Such advice is usually given

in a management letter. This is a very useul document that should be reviewed, along with the

accounts, by the board. It may even be shared with donors. The idea is to improve the nancial

control and accountability practices o your organisation. The Executive Director should report

regularly to the board on how the recommendations o the auditor are being ollowed up.

The drat audited statements should be checked by the Executive Director and then submitted to

the board or approval and signing. When the accounts have been signed by board representatives,

they are no longer drat accounts, and become nal accounts.

The accounts should not be signed by any person who does not understand them. I anything is

unclear, the auditor may be asked or clarications; alternatively, he or she may be requested to

attend the meeting at which the board discusses the accounts.

An NGOs Executive Director, who has the nal responsibility and is accountable or all unding,

needs to ensure that, when going over the audited statements, he or she is able to answer the

ollowing questions:

How do the gures or income and expenditure compare with the actual expenditure

or the previous year (which will be shown)?

How do they compare with the budget or the year?

Why have there been substantial increases and/or decreases on certain items?

Have all items o expenditure been included? Are they all justied?

Has the audit ee been included?

How does this balance sheet compare with the previous one? Is the organisation in a

better or worse position nancially than it was last year?How do the total current assets compare with the total current liabilities?

Is any decit in the year being audited covered by a surplus rom previous years?

Even though previous years surpluses are part o the accumulated und or

equivalent item, i there is a decit, how will a similar situation be avoided in this

year?

Are there any large sums o money owing to the organisation? I so, what steps could

be taken to retrieve the outstanding payments?

Where are the nancial reserves o the organisation invested, and are they earning

a reasonable income? Is the investment in line with the policies o the organisation

and are donors happy with the investment policy?


21/76


19

Does the audit expose any irregularities or problems?

Do we need to change our nancial record-keeping system in any way, and i so,

how?

What does the audit tell us about our nancial strategy o last year?

3. Reporting to a donor

Intervals o reports will be as per the agreement between the donor and the organisation.

Reports usually consist o a narrative and a nancial report. The narrative report covers all

activities completed or the reporting period, in detail. The nancial report lists all expenses

progressively during the period o the agreement. The reports, as shown in the appendices,

are adjusted to cover the donors requirements.

(See page 24: Annex 1 Expense summary)

(See page 26: Annex 2 Reconciliation o donor contribution)

Sometimes, during the period o the project, it appears that certain activities cannot be carried

out as planned, or are not as eective as expected, but could, with adjustments, achieve better

results. Under such circumstances, the consent o the donor is to be obtained ahead o changes

in the execution o the project. Should this require adjustments to budget line items, such

changes are discussed with the donor as well. Only ater written consent o the donor has been

received may adjustments to the programme be carried out by the recipient o the grant.

4. Sta administration

4.1 The employment agreement

There are several dierent employment agreements, which may be either or an unspecied

period or or a limited period that takes the duration o a project into account. Sta may be

employed by the organisation or an unspecied period, where the sta member receives an

agreed salary irrespective o the projects with which that person is involved. Alternatively,

sta may be employed or the duration o a certain project only, in which case the period o

employment corresponds with the period o the project.

The employment agreement stipulates the ollowing:

the two parties to the agreement the employer and the employee

general employment in a certain position, or project-specic employment, speciying

which donor agreement rules the employment period

conditions o employment position, period o employment, remuneration, leave,

length o working week, training, probation time, termination condition, company

policy, medical aid and pension und (most NGO organisations are not in a nancial

position to oer medical aid or pension und benets, a position stated very clearly

in the agreement)

the duties to be ullled


22/76


20

that grossly inconsistent or criminal behaviour or negligence will lead to termination

o contract

that outstanding monies due by the employee to the organisation are reundable

on termination o the contract and are deductible rom monies payable by the

organisation to the sta member

employment is guaranteed only as long as the organisation has donor unding or

the position.

4.2 Salary payments

Salaries are payable beore the end o each completed calendar month. Pay-as-you-earn (PAYE)

tax is deducted according to the latest tax table issued by the Receiver o Revenue. Social

security is deducted at a rate o .09% o the basic salary, up to a maximum o N$54 (or salaries

o N$6 000 per month and higher). Pension und and medical aid deductions are deducted i

applicable. A pay slip per employee is issued in duplicate. One is handed to the employee and

the second copy is kept by the employer.

The pay slip lists the ollowing:

name o organisation

name o employee

period o payment

basic salary

all relevant deductions (listed individually)

net payment due to employee.

Payment o the salary is made either by electronic banking or by cheque (which has to behanded to the employee beore or on the last day o the month or which the salary is due). All

salary deductions have to be paid to the relevant organisations:

PAYE to the Receiver o Revenue is payable within twenty days ater the end o that

month or which the salary was paid (the return schedule is supplied by the Receiver

o Revenue).

Social security contributions o the employee are payable to the Social Security

Commission (SSC) within 30 days ater every end o the month. The total amount

due to the SSC consists o the contributions o the employees plus the same amount

contributed by the employer. The return orm is supplied by the SSC.

Pension und and medical aid und deductions are paid to the administrators o the

respective unds, inclusive o the employers contributions, i applicable. Return

orms are supplied by the institutions.

(See page 44: Annex 17 Payslip)

4.3 Income tax registration of the organisation

An employer has to register as such with the Receiver o Revenue. The employer deducts PAYE

rom the employees salaries in accordance with the latest tax table issued by the Receiver o


23/76


21

Revenue. PAYE deducted is paid to the Receiver o Revenue within twenty days ater the end o the

month or which the salary was paid. Ater the end o the tax year (28/29 February o each year),

IRP5 certicates, supplied by the Receiver o Revenue, are issued to the employees. A summary

o PAYE paid to the Receiver o Revenue during the tax year, IRP5 certicates completed or that

tax period, and a reconciliation o tax certicates on hand is recorded on Form 6-0/0033 (issuedby the Receiver o Revenue). The completed orm has to be returned to the Receiver o Revenue

by the end o March ollowing the previous tax year. When an employee joins the organisation,

orm 6-0/0020, regarding the personal particulars o the employee (available rom the Receiver

o Revenue) is completed by the employee. This orm provides all personal details, including

the income tax reerence number and Namibian identity number to the employer.

4.4 Income tax registration of employees

Employees have to be registered with the Receiver o Revenue. The Receiver issues a registration

certicate indicating the tax payers registration number. A copy o this certicate has to be kept by

the employer. The employee registration number is needed when issuing the IPR5 certicates.

4.5 Social Security Commission

It is compulsory or employers and employees to be registered at the SSC. The onus to register

lies with the employer. A deduction o .09% is made rom the employees monthly basic

remuneration. The employer and employee contribute equal amounts towards the und on a

monthly basis. The maximum amount deductible is N$54.00. Registration entitles the employee

to maternity and sick leave benets, as well as death benets.

4.6 The Employee Compensation Act of 1941

It is compulsory to register with the SSC as an employer under the Employee Compensation Act

o 1941. The Social Security Commissioner issues orm E.As.6 annually. This orm is returned

to the SSC on completion. A Notice o Assessment orm (E.As.5) is issued to the employer

accordingly, indicating the annual contribution which the employer has to pay. The Employee

Compensation Act entitles employees to the benets o the Act i the employee sustains an

injury as the result o an accident arising out o and in the course o his or her employment,

or i the employee has contracted a scheduled industrial disease owing to the nature o his or

her occupation. All accidents or alleged accidents that entail expenses in respect o medical

treatment or absence rom work or longer than three days, permanent disablement, or death,

must be reported to the SSC.

4.7 Administration of leaveWhen leave is taken, a leave orm is completed ahead o time. The ollowing details are required:

employees name

purpose o leave (annual, study, maternity or compassionate leave)

period o leave, indicated by inclusive days

signature o employee

signature o person granting the leave

number o leave days taken.


24/76


22

(See page 45: Annex 18 Leave application)

(See page: 46: Annex 19 Record o leave)

4.8 Consultants

I external consultants are engaged or the completion o certain activities related to an

agreement, an honoraria agreement is reached between the organisation and the consultant. It

stipulates the ollowing:

honorarium payable to consultant

address o consultant

proession o consultant

donor and project or which the honorarium is granted

period in which the task to be completed

amount due

budget line item

activity description o work perormed by consultant.

The honoraria agreement is signed by both a representative o the organisation and by the

consultant. The date on which the agreement is signed is recorded.

(See page 48: Annex 20 Honoraria agreement)


25/76


23

Annexures


26/76


24

Annex 1: Expense summary

Monthly expenses

Exchange rate

Name o donor:

Name o organisation:Budget

Budget

N$

Over/

(Under)

N$

Total

N$

Jan

N$

Feb

N$

1 PROGRAM A

1.1 ACTIVITY 1

booklet 1

booklet 1

1.2 ACTIVITY 2

sub-activity 1

sub-activity 2

2 PROGRAM B

2.1 ACTIVITY 3

sub-activity 1

sub-activity 2

2.2 ACTIVITY 4

sub-activity 1

sub-activity 2

2.3 ACTIVITY 4

sub-activity 1

sub-activity 2

3 OTHER DIRECT COSTS

bookkeeping ees

audit ees

rent

communication

bank charges

TOTAL


27/76


25

Year

Mar

N$

Apr

N$

May

N$

Jun

N$

Jul

N$

Aug

N$

Sep

N$

Oct

N$

Nov

N$

Dec

N$


28/76


26

The undersigned hereby certies that the payment o the sum claimed is proper and that appropriate reund to the

donor will be made promptly upon request in the event o disallowances o costs not reimbursable under the terms o

the unding agreement.

Annex 2: Reconciliation o donor contribution

Name o donor:

Name o organisation:

Agreement number:

Line itemApproved budget

(oreign currency)

Approved

budget (local currency)

estimated exchange rate

Block A $ N$

TOTAL


29/76


27

Prior (CTD) cumulative

to date

to

Expenditures this period

dates

to

Total expenditures

incurred

to

Advance or next period

to

N$ N$ N$ N$

Block Bbeginning period - outstanding advance balance

expenditures during the current period

advances received during current period

sub-total - adjusted advance balance

advance requested or next period

advance requested but not received

sub-total - advance required

Block CSUMMARY OF INTEREST

plus balance o interest brought orward

plusinterest earned current period

less interest remitted to donor current period

new balance - Interest due to donor plus h plus i minus j

h

i

j

k

Executive Director Date

N$

plus a minus b plus c

plus e minus d minus

a

b

c

d

e

g


30/76

Annex 3: Fixed asset list


28

Name o donor:


Year end:

Date o

purchaseDescription Asset no. Purchase cost

Additions

(disposals)

Value: end

o period

Accumulated

depreciation:

beginning

o period

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17


31/76


29

(Reverse

epreciation)

Current

depreciation

Accumulated

depreciation

31/12/201.

Net book

value

Estimated

useul lie

Residual

value

201

depreciation

(current year)


32/76

Annex 4: Purchase order


30

Name o donor:


Date:

Project:

Budget line item:

Supplier:

Item Quantity Cost Comment

TOTAL

Signature: Programme Manager Signature: Executive Director


33/76

Annex 5: Attendance register: Grassroots seminars


31


Theme / Subject / Content:

Workshop held at:

Workshop held by:

Date:

Name Gender Age Occupation Home town Signature

1

2

3

4

5

6

7

8

9

10

Signature: Workshop Presenter Signature: Executive Director


34/76


32

Annex 6: Attendance register: Workshop


Theme / Subject / Content:

Workshop held at:

Workshop held by:

Date:

Name Gender Organization E-mail /PO Box, Town

Telephone Signature

1

2

3

4

5

6

7

8

9

10

Signature: Workshop Presenter Signature: Executive Director


35/76


33

Annex 7: Travel claim orm

Name:

Position:

Date:

Donor:

Reason or travel:

Rate/Km :

Date From To Total KM Total

Signature

I certiy the above to be true and correct.

Approved by

Signature/Stamp


36/76


34

Annex 8: Daily allowance claim orm

Name:

Position:

Date:

Donor:

Reason or travel:

From To Numbero days

Rate/Day Total

Payee Signature

I certiy the above to be true and correct.

Approved by

Signature/Stamp


37/76


35

Annex 9: Financial report: Workshop


Topic / Subject:

Workshop held at:

Workshop held by:

Date:

Participants:

Duration:

Expenses incurred

Date Paid to Details / description o goods Paid by Amount

Signature: Workshop Presenter

TOTAL:

Signature: Executive Director


38/76


36

To be completed i no shop stamp available

Shop address:

Shop name:

Shop owner name:

Shop owner signature:

Recipient organisation member: Date:

Date:

Annex 10: Conrmation o goods purchased(only used when no cash slip can be obtained)


Date:

QuantityDescription o

goodsPrice per unit Total

TOTAL

SHOP STAMP


39/76


37

Annex 11: E-bank requisition


Donor:

Bank Acc no: Acc name:

Payable to (name o recipient o unds):

Description (purpose o payment + budget line item):

Date:

Transaction code:

GL department GL code Account name N$

Approved by:

Requested by:

Date:

Date:

TOTAL PAYMENTS


40/76


38

Annex 12: Cheque requisition

Name o bank:

Donor:

Bank Acc no: Acc name:

Payable to (name o recipient o cheque):

Description (purpose o payment + budget line item):

Date:

Cheque No:


Approved by:

Requested by:

Date:

Date:

TOTAL PAYMENTS


41/76


39

Annex 13: Petty cash requisition

Donor:

Payable to:

Description:

Date:

Transaction code:


Paid out by:

Received by:

Date:

Date:

TOTAL PAYMENTS


42/76


40

Annex 14: Petty cash summary


Month:

Date Cheque no Detail N$

DEPOSITS

PAYMENTS

DATE GL code Recipient N$

SUB-TOTAL

PAYMENTS

SUB-TOTAL

BALANCE END OF PERIOD


43/76


41

Annex 15: Trial balance

Trial balance as at: fnancial year end date, e.g. 31.12.201....

Motor vehicles

Acc dep - motor vehicles

Equipment

Acc dep - equipment

Bank account

Petty cash

Reserves

Accounts receivable

Accounts payable

Income

Donor unding income

Interest received

Expenses

Audit ees

Bank charges

Cleaning

Depreciation

Electricity

IT support

Oce supplies

Postage

Rereshments

Rent

Salaries

Telephone

Training workshops

Civic education

Survey

Travel, transportation

and per diems

Name o donor:



44/76


42

BANK RECONCILIATION

balance per cash book

balance per bank statement

Annex 16: Cash book

DateCh.

No.Detail Comm Bank ReconIncome Salaries Rent

Telephone

&

postage

Water

&

electricity

C

balance b/ transactionno:

1

2

3

4

5

6

7

8

9

10

11

12

Cash book journal June 2010

Bank charges

Audit/secretarial/legal ees

Rent

Salaries

Telephone & postageWater & electricity

Cleaning

IT support

Travel & transport

Oce supplies

Pr & rereshments

Insurance

Development

Acc rec

Acc payable

Income

Petty cash

Interest received

Bank

DIFF


45/76


46/76


44


Name: Employees name Period ending:

Earnings:

Deductions:

Annex 17: Payslip

Basic

Pension allowance

Medical allowance

Leave pay

Gross total

Social security

Paye

TOTAL PAYMENT/TRANSFER

N$


47/76


45


Duration o leave

FOR OFFICIAL USE ONLY

Annex 18: Leave application

Compassionate leave (discretionary)

Study leave (2 days per exam, exam timetable to be attached)

Sick leave (doctors note is required ater 2 days o absence)

Annual leave

Maternity leave

Applicants signature

From: (inclusive)

# o days taken: notes:

# o days remaining:

Granted by:

Date:

Date

To: (inclusive)


48/76


46


Name:

Date o employment:

5 day workweek

ACCUMULATED LEAVE:

Signature Date

LEAVE PAY CALCULATION basic salary daily rate actor no o days due daily rate total amount due

basic salary /21.67

Annex 19: Record o leave

Year Compassionate Study Maternity


49/76


47

Sick Annual TakenAnnual leave days

remaining


50/76


48

Annex 20: Honoraria agreement


An honorarium is payable to:

Address:

Proession:

or his/her work:

Total amount:

I herewith conrm that I have received the above-mentioned amount and that I am not receiving payment

or this work rom another party.

Executive Director Date Recipient

Project:

Budget line item:

Donor:


51/76


49

Annex 21: Case study

The Centre or Civic Education (CCE), a non-governmental organisation that is active in the

democracy and governance sector in Namibia with its head oce in Windhoek, routinely

presents lectures on democracy at grassroots level countrywide, organises workshops on

issues aecting civil society and trains trainers on various democracy-related subjects. The

organisation has the ollowing our employees:

Executive Director, Mr Paulus Nangombe

Programme Manager, Ms Lucia Abrahams

Trainer, Mr Ben Kangueehi

Financial Administrator, Ms Alma van Wyk

The CCE has no pension scheme and no medical aid und. A vehicle has been donated to the

organisation by one o the donors. This vehicle may be used or activities undertaken to ull

the project goals, irrespective o which donor is unding the activity.


52/76


50

During one month the ollowing activities occur:

1 March: The monthly oce rent o N$2,500.00 is paid electronically to the owner o

the oce building, Mr. Houseowner.

4 & 5 March: The Trainer, Mr. Ben Kangueehi holds grassroots seminars at Helena

(4 March) and Talismanis (5 March) in the Omaheke Region:

Mr. Kangueehi drives to the Omaheke Region with the vehicle o the organisation.

In preparation or the trip he receives an advance rom own unds petty cash o

N$1,000.00 or uel, as well as an advance o N$1,450.00 which is or per diems

(N$300.00), rent or seminar venues (N$100.00), rereshment purchases (N$550.00),

and presenter ees (N$500.00) rom the project petty cash. The seminar at Helena is

held at the community tree. The seminar at Talismanis is held at the local community

hall. A rental charge o N$100.00 is due. The distance rom Windhoek to Talismanis

and back is 814 km. Mr. Kangueehi departs on 3 March, presents the seminar at Helena

on 4 March, travels to Talismanis the same day and holds the seminar at Talismanis on5 March, returning to Windhoek on 5 March. At Helena, 24 persons attend, o which 14

are male and 10 are emale. At Helena, rereshments to the amount o N$228.00 are

purchased rom a grocer, The Local Trader, who can only supply a cash register voucher

without detail shown. Mr Kangueehi completes a Conrmation o goods purchased

orm with the owner o The Local Trader. At Talismanis, 29 persons attend, o which

13 are male and 16 are emale. At Talismanis, rereshments to the value o N$280.00

are purchased rom the General Superstore and a detailed cash register voucher is

supplied. Mr. Kangueehi returns to the oce o the CCE on 8 March and submits the

ollowing documentation and monies, or each seminar individually, to the nancial

administrator, Ms Van Wyk:

narrative report-

completed attendance list, conrmed by a stamp o the local authority o the-

village

nancial report, summarising all costs incurred, with all supporting documents-

attached

per diems conrmation schedule-

the donors returned petty cash unds o N$42.00-

uel purchase vouchers amounting to N$840.00 (N$160.00 is reunded to own-

unds petty cash)

The Financial Administrator pays the per kilometre ees due rom the donor

bank account to the own unds account. The kilometres are split between

Helena (348 km @ N$2.00/km = N$696.00) and Talismanis (466 km @ N$2.00/

km = N$932.00).

Ms Van Wyk receives the remaining petty cash, returns this to the petty cash box and

conrms the receipt o the cash on the petty cash requisition on which the initial

advance or the activity was noted. Mr Kangueehi and Ms Van Wyk sign to conrm

the transaction.


53/76


51

7 March: The Programme Manager, Ms Lucia Abrahams, presents a one-day

training o trainers workshop on anti-corruption or local participants at a venue in

Windhoek. Coee, tea and a light lunch are supplied by the venues owner.

8 March: Ms Abrahams returns to the oce o the CCE and presents the ollowingdocumentation to the nancial administrator:

narrative report on the activity-

attendance register, signed and completed by all 25 participants-

evaluation sheets completed by the participants-

invoice o the venues owner, amounting to N$1,750.00, signed by Ms Abrahams-

to conrm that payment o the invoice is due.

10 March: Ms Van Wyk pays the venue invoice electronically and draws up the

nancial report o the workshop.

12 March: The telephone account is paid rom the own unds account by

cheque # 124. The amount is N$845.10.

16 March: The nancial administrator is inormed by the bank that N$30,000.00 has

been transerred to CCEs project account by the donor.

18 March: Sta reund N$75.00 or their private calls o the previous month to petty

cash own unds.

24 March: Mr. Kangueehi presents an inormation session at a school in Rehoboth.

Since the meeting lasts or about 90 minutes, no rereshments are oered. He returns

to Windhoek on the same day, having travelled 174 km, or which he receives anadvance o N$200.00 or uel, paid rom own unds petty cash.

24 March: Ms Van Wyk transers N$8,000.00 rom the donor account to the own

unds account. This payment is as per project budget o the donor in support o the

CCEs sta costs.

25 March: Mr. Kangueehi returns the ollowing documentation to Ms Van Wyk:

a pre-printed conrmation o the presentation o the inormation session,-

stamped by the school, signed by the headmaster or a designated teacher, also

indicating the total number o pupils who attended the activity, and the number

o girls present, and including an evaluation o the presentation by an ocial othe school

a per diem orm, completed by Mr Kangueehi, to be conrmed by the nancial-

administrator (hal a days per diem (@N$100.00 per ull day), is due to Mr

Kangueehi)

a uel voucher or N$200.00.-

A sum o N$50.00 is paid to Mr Kangueehis account electronically.-


54/76


52

25 March: The Financial Administrator, Ms Van Wyk, prepares the payroll o the sta

or the month. The Executive Director, Mr Nangombe, veries the salary payments

prepared and signs to conrm the payments due. The salaries are transerred

electronically. The PAYE deducted and the Social Security contributions are paid by

cheque. [These transactions are actually only due during the next month. They areincluded in this case study to show all relevant salary transactions.]

26 March: Ms Abrahams travels to Okahandja with her own vehicle, since CCEs

vehicle is deployed at another activity on the day o the presentation. A one-day

workshop is held. Rereshments and a light lunch are supplied to the participants. A

quotation or rental o the venue and supply o rereshments was obtained ahead o

time. The total amount quoted is N$2,100.00 or 30 persons. Ms Abrahams purchases

some pens and paper or participatory activities at the workshop. N$100.00 in petty

cash is advanced. An invoice o N$94.50 and N$5.50 in cash are returned to petty

cash. No uel advance is needed.

29 March: Ms Abrahams delivers the ollowing documentation to the Financial

Administrator:

narrative report on the activity-

attendance register signed by all 29 participants and stamped by the organisation-

which participated in the workshop

evaluation sheets, completed by all participants-

travel expense claim (the distance travelled 142 kilometres is veried-

on a roadmap: 142 km @ N$2.00/km = N$284.00 are paid to Ms. Abrahams

electronically)

no per diems claim, since rereshments and lunch were supplied at the-workshop

invoice rom the organisation owning the venue and supplying the catering,-

signed by Ms Abrahams, amounting to N$2,100.00.

The nancial administrator pays the venue and catering costs electronically.

29 March: Milk and sugar are purchased or N$35.60 in cash or oce consumption.

The cash is paid rom the own unds petty cash.

The ollowing invoices have been received during the month o March and are

prepared or payment rom the own unds account:

IT Supplies retrieved lost documents on one o the personal computers at the-

oce o the CCE; their invoice amounts to N$250.00

The Mechanic serviced the motor vehicle o the CCE; their invoice amounts to-

N$1,100.36

Photocopying paper and les were purchased rom The Stationery Shop; their-

invoice amounts to N$185.50.

All are paid electronically on 29 March. E-bank payment requests are completed or

each o the creditors. The Executive Director, Mr. Nangombe, approves payment and


55/76


53

signs the invoices as well as the payment request schedule. The Financial Administrator

perorms the electronic transer. The banks electronic transer conrmations are

signed by Mr Nangombe. All documentation is led.

30 March: The Financial Administrator reunds the Donor Petty Cash with Cheque#025 to the amount o N$1,000.00

During the month o March the petty cash and the cash book schedules are

completed by capturing the data rom the documentation o the month.

1 April: The petty cash unds available are reconciled with the petty cash

reconciliation o the month and conrmed by the relevant petty cash supervisor.

1 April: The cash book is reconciled with the bank statements o the previous

month. A bank reconciliation is written up. The documentation is presented to the

relevant supervisor, revised and signed.

All other monthly schedules are completed, reconciled, printed and led.


56/76


54

Examples o some o the nancial schedules completed according to the data o the case study

are as ollows:

Case study 1 Petty cash requisition

Case study 2 Conrmation o goods purchased

Case study 3 Financial Report workshop Helena

Case study 4 Financial report workshop Talismanis

Case study 5 Payslip

Case study 6 Petty cash summary donor

Case study 7 Petty cash summary own unds

Case study 8 Cash book donor

Case study 9 Cash book own unds

Case study 10 Summary monthly journal

Case study 11 Trial balance


57/76


55

Case study 1 - Petty cash requisition

CENTRE FOR CIVIC EDUCATION

PETTY CASH REQUEST

DONOR: Date:

Transaction code:

Payable to: Mr. Ben Kangueehi

Description: Advance - seminars at Helena and Talismanis

Per diems 300, rent of venue 100, refreshments 550, presenter fees 500

GL Department GL Code Account Name N$Initial of

Recipient ofCash

AMOUNT ADVANCED 1,450 00 B. Kangueehi

AMOUNT REPAID 42 00 A. van Wyk

TOTAL EXPENSES 1,308 00

1,308 00

Recipient of CashB. Kangueehi Date: 02.03.2010

Paid out by:A. van Wyk Date: 02.03.2010

The Donor 02.03.2010


58/76


56

Case study 2 - Conrmation o goods purchased


CONFIRMATION OF GOODS PURCHASED

(only used when no cash slip can be obtained)

DATE: 04.03.2010

QUANTITY DESCRIPTION OF GOODS PRICE PER UNIT TOTAL

26 cooldrinks

6.00

156.00

8 packets of biscuits

9.00

72.00

TOTAL

228.00

SHOP STAMP

THELOCAL TRADER

To be completed if no shop stamp available

shop name The Local Trader

shop address Erf 372, PO Box 2

Helena

shop owner name Mr J. Hengari

J. Hengari 04.03.2010

shop owner Date

B. Kangueehi 04.03.2010

CCE representative Date

P. Nangombe 08.03.2010

Executive Director Date


59/76


57

Case study 3 - Financial report workshop Helena


FINANCIAL REPORT: WORKSHOP

TOPIC / SUBJECT Grassroots Civic Educaon

WORKSHOP HELD AT Helena, Omaheke Region

WORKSHOP HELD BY Ben Kangueehi

DATE 04.03.2010

PARTICIPANTS 24 (14 male, 10 female)

DURATION 09h00 - 17h00

EXPENSES INCURRED

DATE PAID TODETAILS / DESCRIPTION OF

GOODSPAID BY AMOUNT

04.03.2010 XYZ own funds km fees (348km@N$2.00) e-bank 696.00

04.03.2010 Mr. Kangueehidaily allowance

(1 days @ N$100)pey cash

Financial Training Manual for NGO's in Namibia

Documents

Transcript of Financial Training Manual for NGO's in Namibia