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Financial Management of Your Cooperative Agreement Kampala, Uganda 8-11 December 2009 STANDARDS OF FINANCIAL MANAGEMENT Administrative Requirements for Grants and Agreements with NonProfit Organizations - OMB Circular A-110 1. Recipients shall relate financial data to performance data and develop unit cost information whenever practical (BUDGETING) STANDARDS OF FINANCIAL MANAGEMENT Administrative Requirements for Grants and Agreements with NonProfit Organizations - OMB Circular A-110 2. Recipients' financial management systems shall provide for the following: Accurate, current and complete disclosure of the financial results of each federally-sponsored project Comparison of outlays with budget amounts for each award (BUDGET COMPARISON) Effective control and accountability for all funds, property and other assets. Recipients shall adequately safeguard all assets and assure they are used solely for authorized purposes. STANDARDS OF FINANCIAL MANAGEMENT Administrative Requirements for Grants and Agreements with NonProfit Organizations - OMB Circular A-110 Written procedures for determining the reasonableness, allocability and allowability of costs in accordance with the provisions of the applicable Federal cost principles and conditions of the award (WRITTEN POLICIES) Treasury’s cash management policy it to limit the available cash (advances) to the recipient’s immediate disbursement needs (usually 30 days). Accounting records including cost accounting records that are supported by source documentation. (ADEQUATE DOCUMENTATION) Pre-Award Findings Pre-Award Surveys – first step to see if the grantee is ready to receive funds Better to resolve before formal audit – as findings in pre-award survey that remain in first formal audit could have implications for program. Important to inspect your award to ensure when to be addressed We’re all in the same boat…. What were some of the pre-award findings? Financial Management (Number of Organizations) 1. Create/Update Finance Policy - Introduce formal accounting system/Internal controls (4) 2. Utilize journal vouchers (3) 3. Separate bank account for USAID funds and expenditure (4) 4. Safe Cash & Bank Account Management (3) 5. Create/Update Travel Policy (3) We’re all in the same boat…. What were some of the pre-award findings? Financial Management (Number of Organizations) 1. Update accounting records/Correct accounting errors (3) 2. Engage experienced finance officer/Have non-signatory accountant (2) 3. Improvements required for cash disbursement procedures - pay verification, voucher authorization, cash book, etc (2) 4. Improvements in Audit process 5. Implement Pastel Accounting Software 6. Clearing of overdue items with local bank We’re all in the same boat…. What were some of the pre-award findings? Financial Management (Number of Organizations) 1. Create/Update Procurement policy (5) 1. Create/Update Fixed Assets Register (7) We’re all in the same boat…. What were some of the pre-award findings? Financial Management (Number of Organizations) 1. Create/Update HR policy Timesheets/Timekeeping/Leave procedure/Organizational Chart/Explicit roles and responsibilities (8) 2. Time sheets for different programs (3) 3. Deduct social security and PAYE WHAT ISSUES WOULD YOU OR YOUR ORGANIZATION WANT A FINANCIAL POLICY TO ADDRESS? LOCAL PARTNERS CAPACITY BUILDING Financial Policies and Procedures – Overview of Finance Department • Roles and Responsibilities • Internal Controls – Segregation of duties – Accounting Method – Cash or Accrual – Bank Accounts – Petty Cash Management – Purchasing/Procurement Policy – Payment Procedure • Reasonable, Allowable, Allocable Costs • Unallowable Costs • Authorized Signatories – Cash Receipts 11 – Receipts of Goods and Services – Travel and Per Diems – Staff Salary Advances – Staff Imprest Advances or Advances for work/trainings – Fixed Asset Management – Budget Preparation and Approval – Payroll – Audit Policy – Financial Reporting • Monthly Financial Reports • External Reports • Donors/Annual Report Questions?