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Policies

Final Basil Alred Financial Policies and Procedures Manual

Please read through the policy below and then fill in the acknowledgement form at the bottom of the page. Thank you.

Financial Policies and Procedures Manual

February 2020

TABLE OF CONTENTS

 

ABBREVIATIONS

SECTION 1: INTRODUCTION TO THE MANUAL

1.1           BACKGROUND

1.2          USERS

1.3          OBJECTIVES OF THE MANUAL

1.4          PROFESSIONAL AND STATUTORY REQUIREMENTS

1.5          RESPONSIBILITY FOR UPDATING OF THE MANUAL

SECTION 2: ACCOUNTING POLICIES

2.1          PURPOSE

2.2        DESCRIPTION OF ACCOUNTING POLICIES

2.3        CHANGE OF ACCOUNTING POLICY

2.4        RETENTION OF ACCOUNTING DOCUMENTS

2.5        ACCOUNTING YEAR

SECTION 3:   SET UP AND FUNCTIONS OF THE ACCOUNTING UNIT

3.1          SET UP OF THE FINANCE UNIT

3.2        FUNCTIONS OF THE FINANCE UNIT

SECTION 4: ACCOUNTING FOR RECEIPTS

4.1          GENERAL CONTROLS

4.2        ACCOUNTING PROCEDURES FOR REVENUE COLLECTIONS

SECTION 5: BANK ACCOUNT MANAGEMENT

5.1          PURPOSE AND SCOPE

5.2        POLICY

5.3        OPENING OF NEW BANK ACCOUNTS

5.4        BANK SIGNATORIES

5.5        BANK RECONCILIATION PROCESS

SECTION 6: PAYMENTS FOR GOODS AND SERVICES

6.1          PURPOSE

6.2        APPROVAL OF INVOICE/REQUEST FOR PAYMENT

6.3        CHEQUE PAYMENTS AND ONLINE BANK TRANSFERS

6.3.1          Controls for Cheque/Online Payments

6.3.2         Processing a Cheque/Online Payment

6.4        PETTY CASH PAYMENTS

6.4.1          Controls for Petty Cash Payments

6.4.2         Procedures for Petty Cash Payments

6.5        MANAGEMENT OF IMPREST/ADVANCES

6.5.1          Controls for Imprest/Advance

6.5.2         Procedures for Imprest/Advance request

6.6        DISBURSEMENTS/CLAIMS MANAGEMENT

6.6.1          Policy

6.6.2         Procedures for requesting a claim

SECTION 7: PAYROLL ACCOUNTING

7.1          PURPOSE

7.2        POLICY AND GENERAL CONTROL

7.3        ACCOUNTING PROCEDURES

7.4        PAYROLL JOURNAL

SECTION 8: PURCHASING AND STORES PROCEDURES

8.1          GENERAL CONTROLS

8.2        PURCHASE PROCEDURES

SECTION 9: ASSET MANAGEMENT AND CONTROL

9.1          PROPERTY, PLANT AND EQUIPMENT

9.2        POLICY

9.3        FIXED ASSET REGISTER

9.4        ACQUISITION OF FIXED ASSET

9.5        DISPOSAL OF FIXED ASSETS

9.6        VALUATION OF ASSETS

9.7        DEPRECIATION AND AMORTISATION

9.8        MOTOR VEHICLES LOGBOOK

SECTION 10: AUDIT

10.1       APPOINTMENT OF EXTERNAL AUDITORS

10.2           ANNUAL AUDIT

10.3           TERMINATION OF AUDITORS

10.4           TENURE OF AUDITORS

SECTION 11: REPORTING

11.1         PURPOSE

11.2        MANAGEMENT (INTERNAL) REPORTS

11.3        EXTERNAL REPORTING

11.4        YEAR-END REPORTING AND FINANCIAL STATEMENTS

SECTION 12: PLANNING AND BUDGET CONTROL

12.1        PLANNING AND BUDGETING

12.2      BUDGETARY CONTROL REPORTS

    12.3             BUDGET REVISIONS

 

 

ABBREVIATIONS

 

ARR
Accounts Receivable Register
CB
Cash Book
CPV Cash/Cheque Payment Voucher
CR Cheque Register
FAR
Fixed Asset Register
FM
Finance Manager
GAAP
Generally Accepted Accounting Principles
GL
General Ledger
GRN
Goods Received Note
IAS
International Accounting Standards
ICR
Incoming Cheque Register
IDN
Internal Delivery Note
IFRS
International Financial Reporting Standards
IRB
Inwards Receipt Book
IRF
Imprest Retirement Form
JV
Journal Voucher
LPO
Local Purchase Order
MP
Managing Partner
PCR
Petty Cash Reconciliation
PCRV
Petty Cash Replenishment Voucher
PCV
Petty Cash Voucher
PJ  
Payroll Journal
PR
Purchase Requisition
RSF
Request for Safari Form
SIR
Stores Issue Register
SRF
Stores Request Form
SIR
Staff Imprest Register
SL
Subsidiary Ledger

 

SECTION 1: INTRODUCTION TO THE MANUAL

 

1.1  BACKGROUND

Basil & Alred is a professional services firm offering Assurance, Tax and Advisory services.  It is located in Dar es Salaam, Tanzania.  The team at Basil & Alred is led by Partners with over 60 years of cumulative experience in public accounting as well as management consulting.

The lead partners have experience in financial services, telecommunication, mining, oil and gas, manufacturing, agriculture, revenue authorities, health, pension funds, NGOs, trading and transportation. At Basil & Alred we believe in creating value that our clients, our staff and the public are looking for. We do this with honesty, integrity and in a cost-effective manner.

The purpose of this manual is to describe the financial accounting policies and procedures of Basil & Alred. It describes the procedures to be used in collecting, processing, summarizing of accounting data and preparing financial statements of the firm. The manual also details the internal controls and procedures for safeguarding the firm’s assets, checking the accuracy and reliability of the recorded accounting data, and promoting efficiency in the accounting operations. It includes accounting policies, year-end procedures, management accounts reporting and responsibilities for various operational aspects of the firm.

1.2  USERS

This accounting and administration procedures manual has been prepared in order to support Basil & Alred operations. It is therefore expected that the manual will be adhered to by all accounting and administrative staff who will be involved in the processing and administration of accounting transactions.

1.3  OBJECTIVES OF THE MANUAL

The manual documents the policies and procedures to be adopted by the Firm in collection, recording and summarization of accounting data, and preparation of financial statements of Basil & Alred. It also provides guidance as to the accounting procedures that should be applied to financial transactions for the purpose of recording and compiling the needed financial information.

The specific objectives of this manual are:

  • To ensure that all transactions giving rise to the recognition of assets, liabilities, income and expenditure are accurately and properly recorded in the books of accounts;
  • To ensure that adequate and sufficient accounting records are maintained to support the operational activities of the company;
  • To provide timely and reliable data to management for decision-making;
  • To provide relevant information to all stakeholders;
  • To provide a framework for financial planning and reporting;
  • To provide a reference guide for staff in carrying out their day-to-day activities;
  • To provide the source of laid down controls for reducing the risk of errors and omissions;
  • To act as a source of agency or basis to take action against all employees of the Company who are dishonest in their duties. For that matter, every employee involved in the collection, receipt, custody, issue or payment of the company’s funds must strictly follow the procedures provided in this Manual. Otherwise he/she will be responsible for the losses caused as a result of his inappropriate actions; and
  • Provide external or internal training to existing or newly appointed or recruited staff.

1.4  PROFESSIONAL AND STATUTORY REQUIREMENTS

The accounting procedures prescribed in this manual have been developed to comply with:

Generally Accepted Accounting Principles (GAAP)

Generally Accepted Accounting Principles (GAAP) comprises the various principles, conventions and concepts used in the recording and processing of accounting transactions. They include conservatism (prudence), consistency, materiality, historical cost, and going concern concept.

International Accounting Standards/International Financial Reporting Standards (IAS/IFRS)

Basil & Alred operations will be based on commercial management systems. Statutory reporting will therefore have to comply with IAS/IFRS. It is against this background that the accounting procedures in this manual have been carefully developed to enable the data to be processed and the resultant output to comply with IAS/IFRS.

1.5  RESPONSIBILITY FOR UPDATING OF THE MANUAL

The Managing Partner (MP) has the overall responsibility for the administration of the accounting procedures and updating them as necessary. The Finance Manager (FM) will monitor compliance to the procedures by all concerned staff.

Changes to the manual should be made when there are major variations in business processes. When such a need arises, the Finance Manager (FM) will propose and recommend the required amendment to the Managing Partner (MP) for approval. Such changes should be adequately documented for future references. Also, notes of version number, effective date and main areas of change should be documented.

Any amendments to the manual should be brought to the attention of the external auditor in order to facilitate planning of the audits. When changes to be made substantially affect existing procedures they should be agreed with the external auditor.

SECTION 2: ACCOUNTING POLICIES

2.1  PURPOSE

This section describes the main accounting policies adopted by Basil & Alred in the processing of accounting transactions. These accounting policies are the basis of preparing financial statements.

2.2  DESCRIPTION OF ACCOUNTING POLICIES

2.2.1 Accrual Basis

Basil & Alred shall prepare its financial statements on the accrual basis of accounting. Under this basis the effects of transactions and other events are recognized when they occur (and not when cash or its equivalent is received or paid) and they are recorded in the accounting records and reported in the financial statements of the periods to which they relate.

2.2.2 Historical Cost Convention

Financial statements shall be prepared under the historical cost convention. Assets and liabilities will be recorded at their historical cost and not their market or replacement value. The carrying amount of the assets and liabilities shall be re-measured following any subsequent valuation after initial recognition.

2.2.3 Revenue Recognition

Revenue shall be recognized when significant risks and rewards of ownership of the goods and services have passed to the buyer. Auction sales will be recognized upon fall of the hammer for confirmed bids.

2.2.4 Trade and Other Receivable

Trade receivables shall be recognized and carried at original invoice amount less an allowance for any uncollectable amounts. Provision for doubtful debts will be made when there is objective evidence that the company shall not be able to collect the debt. Bad debts shall be written off when identified and reasonable proven to be unrecoverable.

The debt period of the firm shall be 30 days from the day invoice was issued and followed by other 60 days of grace period for unsettled invoices.

2.2.5 Foreign Currency Translation

The financial statements shall be presented in Tanzanian Shillings, which is the functional and reporting currency. Transactions in foreign currency shall be converted into Tanzanian Shillings at the Bank of Tanzania (BOT) exchange rates ruling on the date of transaction. Monetary assets and liabilities, which are expressed in foreign currencies, shall be translated in Tanzanian Shillings at the rates prevailing at the balance sheet date. Exchange differences will be recognized in the income statement as gain or loss in the year in which they arise.

2.2.6 Inventories

Inventories shall be valued at the lower of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less the costs of transport and selling expenses. The fair value less estimated point-of-sale costs of products is determined based on market prices of the final product taking into account direct overhead costs.

2.2.7 Property, Plant and Equipment

Plant and equipment shall be stated at cost, excluding the costs of day to day servicing, less accumulated depreciation and accumulated impairment in value. Such cost shall include the cost of replacing part of the plant and equipment when that cost is incurred, if the recognition criteria are met. Depreciation shall be calculated on a straight line basis over the useful life of the assets.

Land and buildings shall be measured at fair value less depreciation on buildings and impairment charged subsequent to the date of the revaluation. Valuations shall be performed frequently enough to ensure that the fair value of a re-valued asset does not differ materially from its carrying amount. Any revaluation surplus shall be credited to the asset revaluation reserve included in the equity section of the balance sheet, except to the extent that it reverses a revaluation decrease of the same asset previously recognized in profit or loss, in which case the increase is recognized in profit or loss. A revaluation deficit shall be recognized in profit or loss, except that a deficit directly offsetting a previous surplus on the same asset shall directly be offset against the surplus in the asset revaluation reserve.

An annual transfer from the asset revaluation reserve to retained earnings shall be made for the difference between depreciation based on the re-valued carrying amount of the assets and depreciation based on the assets original cost. Additionally, accumulated depreciation as at the revaluation date shall be eliminated against the gross carrying amount of the asset and the net amount shall be restated to the re-valued amount of the asset. Upon disposal, any revaluation reserve relating to the particular asset being sold shall be transferred to retained earnings.

When each major inspection is performed, its cost shall be recognized in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied.

An item of property, plant and equipment shall be derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) shall be included in the income statement in the year the asset is derecognized.

The asset’s residual values, useful lives and methods of depreciation shall be reviewed, and adjusted if appropriate, at each financial year end. Depreciation shall not be provided on leasehold land, plantation development and capital work in progress. Other property, plant and equipment are depreciated so as to write off the original cost or revaluation on a straight-line basis over the expected useful economic lives of the assets concerned. The annual rates to be used for this purpose are:

 

Asset category Rate of depreciation %
Plant and Machinery 20
Motor vehicles 20
Computers    33
Furniture and Fittings 20
Leasehold improvements 33

2.2.8 Interest Bearing Loans and Borrowings

Loans and borrowings shall initially be recognized at the fair value of the consideration received less directly attributable transaction costs. After initial recognition, interest bearing loans and borrowings shall subsequently be measured at amortized cost using the effective interest method. Gains and losses shall be recognized or written off through the income statement.

2.2.9 Imprest and Other Advances

Amounts advanced to staff in the form of imprest and other advances given for purchase of goods or services shall be posted to the debit of the respective staff accounts until documentation is provided to show that the goods or services have been received and paid for these includes funds given to staff for accommodation, airport transfers etc.

2.2.10 Intangible Assets

Intangible assets shall be measured on initial recognition at cost. Following initial recognition, intangible assets shall be carried at cost less any accumulated amortization and accumulated impairment losses. Intangible assets with finite lives shall be amortized over the useful economic life and assessed for impairment whenever there is indication that the intangible asset may be impaired.

2.2.11 Taxation

Value added tax

Revenues, expenses and assets shall be recognized net of the amount of value added tax except:

  • Where the value added tax incurred on purchase of assets or services is not recoverable from the taxation authority, in which case the value added tax is recognized as part of the cost of acquisition of the asset or as part of the asset or as part of the expense item as applicable; and
  • Receivables and payables that are stated with the amount of value added tax included. The net amount of value added tax recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the balance sheet.

2.3  CHANGE OF ACCOUNTING POLICY

Accounting policies shall be used consistently for all transactions of the company for each accounting period. If there are circumstances which necessitate for a change in accounting policy, the change must be authorized by the MP. The accounting effect of the change should be disclosed in the financial statements.

2.4  RETENTION OF ACCOUNTING DOCUMENTS

All accounting documentation shall be properly filed and stored in a secure place. Basil & Alred accounting records will be retained for not less than five years.

2.5  ACCOUNTING YEAR

The financial accounting year for Basil & Alred shall be twelve continuous months, from 1st January to 31st December of each calendar year.

 

SECTION 3:  SET UP AND FUNCTIONS OF THE ACCOUNTING UNIT

3.1  SET UP OF THE FINANCE UNIT

Basil & Alred shall maintain a centralized accounting system and all transactions shall be captured through the accounting system.

The main books of accounts to be maintained shall include:

  • Cash Books (CB)
  • General Ledger (GL)

In addition to the above, several subsidiary records and registers shall be maintained. The main objective of these subsidiary records is to provide control on the company’s resources. These include:

  • Fixed Assets Register (FAR)
  • Stores Issues Register (SIR)
  • Cheque Register (CR)
  • Accounts Receivable Register (ARR)
  • Accounts Payable Ledger (APL)

 

3.2  FUNCTIONS OF THE FINANCE UNIT

The core functions of the Finance Unit will be to:

  • Coordinate timely preparation, review and submission of both short and long term plans and budgets;
  • Ensure that all revenues due to Basil & Alred are collected and properly accounted for;
  • Submit timely and accurate financial and management reports;
  • Monitor and review the company’s budget performance; identify and explain variances; prepare revised budgets as necessary;
  • Identify, assess and prioritize risks, followed by coordinating resources to minimize, monitor and control its probability and/or impact to the company;
  • Ensure statutory returns are prepared and submitted in due time as required by law;
  • Forecast cash flow and co-ordinate the company’s financial transactions and working capital;
  • Ensure that financial records, books and statements are up to date and accurate for preparing year end reports and management accounts;
  • Coordinate the external audit of the company’s accounts and ensure that matters raised in the audit are resolved on/before the next audit;
  • Review and approve all financial transactions in line with the financial regulations;
  • Maintain an up-to-date FAR of the company and ensure that all assets are adequately safeguarded and accurately recorded;
  • Manage the company’s petty cash imprest in line with business requirements and petty cash policy & procedure;
  • Receive and process all invoices, expense forms and requests for payment;
  • Providing advice to Management and Partners on all financial and administration issues and;
  • Maintaining and safeguarding of accountable documents.

 

SECTION 4: ACCOUNTING FOR RECEIPTS

4.1  GENERAL CONTROLS

  • As far as is practical all receipts should be paid directly in the collection account through specified banks;
  • Cash collected over the counter/compounding will be banked intact on the same day or on the next working day and deposit slips to be filled accordingly;
  • Serially pre-numbered official receipts shall be issued to acknowledge all receipts;
  • The FM shall ensure that unused official receipts are kept under lock and key. In addition, a register should be maintained to record all receipts books in their serial number order;
  • The original and all copies of cancelled official receipts shall be retained in the receipt book for audit purposes;
  • Official receipts issued should be posted daily in the Cash Book;
  • Bank deposit slips shall be checked against the bank statement by the FM at least once every month;
  • An Incoming Cheque Register (ICR) shall be maintained to record the details of all incoming cheques;
  • The ICR should be checked monthly by the FM against the CB to ensure that all cheques received have been posted;
  • The posting of transactions to the Subsidiary Ledger (SL) should be done daily or weekly depending on the volume of transactions;
  • All credit advices received shall be examined and approved by the FM, recorded in the CB and filed for future reference. In addition, an official receipt should be issued for all credit advices;
  • Separate cashbooks shall be maintained for local and foreign currencies;
  • The GL shall be posted and closed monthly; and
  • Foreign exchange gains/losses should be computed monthly and an adjustment made in the GL.

 

4.2  ACCOUNTING PROCEDURES FOR REVENUE COLLECTIONS

4.2.1  Basil & Alred shall collect revenue from the following main service lines:

  • Tax consulting Services
  • Assurance & Accounting Services
  • Advisory Services
  • Cooperate Secretarial Services

4.2.2  Procedures for raising an invoice:

  • The engagement manager shall initiate the process of raising an invoice by sending invoice details to the FM along with the engagement code and explanation on the amount to be billed and reimbursement if any. The engagement code shall be produced through the time keeping system.
  • The FM shall review the billing request received from the engagement manager by comparing with the engagement letter for validation.
  • The FM shall raise a draft invoice and share it with the engagement manager for validation and approval.
  • If all the details are correct the FM shall issue a fiscal invoice and share it with the engagement manager.
  • The FM shall then send the fiscal invoice to the client by copying the engagement manager for reference.
  • After the invoice has been issued the FM shall update the receivable register for easy tracking of all invoices issued.

 4.2.3  Procedures for accounting of funds received

  • All funds will be received through Basil & Alred operations bank accounts.
  • Each engagement manager will be responsible for making follow up with all respective debtors/clients for payment.
  • The FM will update the receivable register when a client has paid for his debt account whether in full or partial.
  • All funds received shall be matched against respective invoices issued for easy follow up.

 

SECTION 5: BANK ACCOUNT MANAGEMENT

5.1  PURPOSE AND SCOPE

This chapter documents the policies and procedures for effective management and operations of Bank Accounts. In any accounting system, whether manual or computerized, separate bank accounts necessitate the maintenance of separate cheque books, cash books, designated authorizing signatures and the preparation of separate monthly bank reconciliation statements.

5.2  POLICY

Basil & Alred shall manage two different categories of bank accounts:

5.2.1  Operations Bank Accounts

Basil & Alred shall maintain two bank accounts for its day-to-day operations where all transactions shall be processed through these accounts. One account shall be of US Dollars (UAS) and another in Tanzania Shillings (TZS). All revenues and expenditures which are directly related to Basil & Alred shall be transacted through these accounts.

5.2.2  Client’s Bank Accounts

Basil & Alred shall maintain two other bank accounts for its clients’ where all transactions relating to clients’ services shall be processed. One account will be of USD and another in TZS. All clients’ deposits and expenditures shall be transacted through accounts.

5.3  OPENING OF NEW BANK ACCOUNTS

When need arises to open new bank accounts the FM will submit a formal request for the opening of a new bank account to the Managing Partner. The opening of new bank account must be approved by the Managing Partner.

 5.4  BANK SIGNATORIES

  • Basil & Alred shall have three categories of signatories for all bank transactions that is Category A, Category B and Category C. Category A will have no approval limits; Category B will have approval limit of up to TZS 70,000,000 or USD 30,000 and Category C will have approval limit of TZS 2,000,000
  • Additional signatories shall be added as needs arise under the mandate of the Managing Partner.
  • It is the responsibility of all signatories to ensure that any payment is supported and has been authorized in accordance with this manual, and that the payment is a legitimate expenditure of Basil & Alred.
  • Categories A, B and C are as follows:

 

CATEGORY A CATEGORY B CATEGORY C
Managing Partner Partner/Director Finance Manager
Partner Finance Manager

 

5.5  BANK RECONCILIATION PROCESS

  • Bank reconciliation is the process of comparing the closing balance shown in the GL and the closing balance as reported on the bank statement, and bringing the two into agreement. The two balances rarely tally, and thus are reconciled to establish the causes of the differences between the two records. The bank reconciliation process is a part of internal control procedures hence it must be conducted monthly.
  • The bank reconciliation process shall be conducted at the end of each month where the Accountant shall collect bank statements from the bank for the previous month. The Accountant will then extract ledger fees, commissions, interests and other bank charges from bank statements and prepare a Journal Voucher (JV) for posting in the relevant cash book. All JVs must be checked and verified by the FM.
  • Similarly, any deposits on the bank statements should be marked against the bank paying slips and the cash receipt book; and withdrawals against the cheque payment book. Any item(s), which is not marked off on the bank statement or which have not been posted on the bank statements, should be immediately investigated.
  • Debit/credit advices for payments and receipts made directly to and/or by the bank should be collected from the bank along with the bank statements and used to update the respective CBs after they have been examined and approved by the FM.
  • Direct debits/credits, which do not have advices or which do not seem to be proper charges/credits to the bank account, should be taken to the bank immediately and rectified as appropriate.
  • Cheques which remain un-cleared for an unreasonably long period (30 days) should be queried and investigated upon to determine the reasons for their non-presentation. Similarly banking, which remains un-credited, should be followed up with the bank vigorously to ensure the same are credited without further delay.
  • Stale cheques should not be left in the list of un-presented cheques. Instead, enquiries shall be made as to why such cheques were not presented, and fresh cheques shall be issued upon receipt of the stale cheques and cancelling the same. Credit advices should be issued to the respective payees and posted in the CB. 
  • Bank reconciliation should be prepared not later than the 7th day of the following month. It is important that the reconciliation statement is reviewed by the FM and approved by the MP or Partner in charge of Finance and Administration no later than the 10th of each month.

 

 

SECTION 6: PAYMENTS FOR GOODS AND SERVICES

6.1  PURPOSE

The purpose of this chapter is to describe the procedures to be observed when accounting for recurrent expenditures of the company. A good principle of Financial Management requires that all payments should be made by cheque or through online bank transfer except for small payments which shall be made out of petty cash float maintained for this purpose.

The objectives of this chapter are:

  • To ensure that all payments are only made in respect of goods being received and services being rendered; that payments are for the correct amount, directed to the correct suppliers, account code and a solely direct relate to Basil & Alred;
  • To ensure that all payments are timely posted to the GL and all SLs;
  • To ensure that payments do not exceed the budget limits or bank accounts to be overdrawn;
  • To be able to maintain an audit trail, providing an ability to trace entries to the prime input and supporting documents, and vice versa; and
  • To secure the system with adequate safeguards and appropriate levels of internal check and controls.

6.2  APPROVAL OF INVOICE/REQUEST FOR PAYMENT

  • All external invoices for payments from our service providers and suppliers shall be approved by either the Finance Manager or Partners depending on approval limits. The approving authority or FM will also indicate the respective activity/engagement account code(s) to be charged. The approved invoices will be sent to Accounts for payment.

6.3  CHEQUE PAYMENTS AND ONLINE BANK TRANSFERS

6.3.1  Controls for Cheque/Online Payments

  • All cheque leaves issued but not yet collected by the respective payees shall be kept in the safe at all times. The Accountant shall account for all cheque leaves issued at the end of each working day. Missing cheque leaves shall be reported to the FM;
  • Where an issued cheque is stolen or lost before being presented for payment, the bona fide payee should report immediately to the FM who will then issue a Stop Order to the bank;
  • Replacement cheque shall be issued for a lost cheque after satisfaction that the lost cheque has not been presented for payment and receipt of an indemnity letter from the claimant that he/she has not received such payment;
  • Where the payee collects a cheque, the Accountant shall satisfy him/herself that the person collecting the cheque is the right payee and he/she will be made to sign on the payment Voucher or Cheques Issued Register (CIR);
  • Cancelled cheques shall be attached to the respective cheque stubs or filed separately in their serial number order and kept in the safe. Destruction of cheque leaves is prohibited;
  • The cheque payment voucher and all supporting documents will be cancelled with a date paid stamp and the respective cheque number endorsed on each
  • Cheques issued but remaining unpaid for six (6) months or more shall be considered as having lost value (stale) and will therefore be adjusted by issuing credit advice notes. An adjustment shall be made in the CB and the payee’s accounts. Enquiries as to the reasons leading to non – presentation of the cheques will be made, and fresh cheques will be issued only when the stale cheques have been cancelled;
  • Only finance person will be assigned to write cheques. Authority to any other person to write cheques shall be made in writing by the FM.
  • When the Accountant goes on safari, leave, etc., an appropriate handing over report shall be prepared to hand over the petty cash, cheques, receipt books and other accountable documents to the person taking over. The FM shall witness the handing over;
  • Cheques will only be issued when there are adequate funds in the bank;
  • Where an error is made in writing the name of the payee, the date of the cheque or the amount thereof, correction will be made by drawing a neat line over the erroneous particulars and writing the correct particulars above the former such that the two can be seen distinctly, and the alteration shall be signed for. Where this is not possible, the cheque will be cancelled and a fresh one issued;
  • All cheques must be signed by the authorised signatories as elaborated above. Cheque signatories are responsible for reviewing the entire supporting documents to satisfy him/herself that the payment is lawful and that it has been processed properly.
  • Cheque signatories will not sign blank cheques under any circumstances. Further, payments by cheque must always be crossed. In circumstances where a cheque is made open, the payee must collect the cheque and acknowledge receipt in writing;

6.3.2  Processing a Cheque/Online Payment

  • Approved invoices/requests and transfers for funds shall be booked in the accounting system immediately.
  • Only approved invoices/requests for funds/Petty Cash Vouchers (PCV) shall form the basis of preparing a cheque. A cheque shall be issued in payees’ name or the amount stated on the invoice/request for funds and the approved CPV/PCV;
  • The Accountant shall prepare a payment voucher, attaching all supporting documents and send it to FM for verification;
  • After checking that the payment voucher has been drawn on the correct amount and that it is fully supported, the FM shall review the payment voucher for submission for approval;
  • Reviewed payment vouchers shall be sent to the Signatories for authorization.
  • The Accountant should collect signed cheques from signatories and stamp all supporting documents with a “PAID” stamp on which both the date and cheque number are endorsed; and
  • Cheques issued should be recorded in the cheque list presented to the bank for encashment and the cheque list should be monthly chronologically numbered.
  • The Accountant shall file the PV together with all supporting documents in numerical sequence. The particulars of the cheque shall be recorded in the dispatch register and dispatched to the payee by registered post together with a copy of the payment voucher. If it is collected the payee shall sign for receipt in the register/payment voucher.
  • The PV shall be used to post transactions into the CB and GL. The Accountant/FM shall ensure that the correct account codes have been inserted in PVs prior to posting into the books of account.

6.4  PETTY CASH PAYMENTS

6.4.1  Controls for Petty Cash Payments

  • The firm shall maintain a petty cash for purchase of petty items. The amount of petty cash float to be maintained will be determined by the MP in consultation with the FM from time to time. The Petty Cash amount shall be TZS. 500,000
  • The limit for petty cash payment shall not be above TZS. 100,000 per expenditure. However, this will be reviewed by MP from time to time;
  • All requests for petty cash payments shall be approved by the FM;
  • Surprise cash counts shall be carried out at any time to ascertain that the unused cash float is in hand. A cash count certificate shall be used to record the results of the cash count. The certificate must be signed by the Accountant;
  • Petty cash payments shall be made through Petty Cash Voucher (PCV) dully approved by the FM. After payment, the PCV and all supporting documentation shall be cancelled by a date paid stamp;
  • The petty cash journal must be reconciled against the daily petty cash summary before approval for posting; and
  • The petty cash float replenishment voucher shall be reconciled with the daily petty cash summaries by the Accountant before any reimbursement is authorized.

6.4.2  Procedures for Petty Cash Payments

  • All petty cash payments are to be made against properly authorized requests for payments. The pre-numbered PCVs should be used to effect all cash payments.
  • Before payment is made, the payee must sign the PCV for the receipt of money. When a petty cash vouchers is made for several people each of them must sign against his or her name on the pay sheet accompanying the PCV.
  • A Petty Cash Reconciliation (PCR) to record all cash payments shall be prepared. The PCR shall be balanced daily and checked by the FM at least once every week
  • A Petty Cash Reconciliation form shall be prepared when the imprest fund reaches a level considered too low for a normal cash demand of two or three days for requesting replenishment of the fund.
  • The PCVs and the supporting documentation shall be checked and reconciled with the summary of expenditure by the Accountant. If the documentation is in order and the FM is satisfied, he/she will then authorize the replenishment of the funds spent. The replenishment will be processed through the normal cheque payment procedures.
  • The Accountant shall then analyse the summary of expenditure, reconcile the petty cash journal and the summary of expenditure and post the same to the respective GL Accounts. All the supporting documentation will then be filed in the Petty Cash File.

6.5  MANAGEMENT OF IMPREST/ADVANCES

6.5.1  Controls for Imprest/Advance

  • All imprest request must be approved by Partners.
  • Travel imprest shall be accounted for, on an Imprest Retirement Form (IRF) or expenses form, within fourteen (14) days from the end of the activity for which the imprest was applied. Any amount left unspent out of the imprest should be returned immediately after the end of the activity applied for and an acknowledgment receipt issued by the Accounting department.
  • A member of staff can only have one outstanding imprest at any time. New imprest will not be issued until previous imprests are retired and fully accounted for.
  • When the imprest is signed for, it becomes the sole responsibility of the individual who has received the money to account for its disbursement. Transfers of imprests between employees are strictly forbidden. If cash needs to be used from your imprest by another member of staff, for the purposes expressed in that imprest, then it is your responsibility to ensure that the staff borrowing money from your imprest returns the receipt and change to you immediately. Employees are responsible for the cash from their own imprest.
  • If an imprest is not retired within the fourteen (14) days after the activity, it must be recovered in full in the following month through the employee salary.

6.5.2  Procedures for Imprest/Advance request

  • The employee applying for an imprest shall be required to fill a request form for safari/special imprest form (RSF).
  • The imprest form shall be signed by the applicant and then sent to his/her supervisor for approval. The form shall then be sent to Partners for approval before taken to FM for payment.
  • The approved request form should be returned to the Accountant for recording in the Staff Imprest Register (SIR) and processing payment.
  • On retirement of an imprest/cash advance, the responsible employee must fill a retirement form/accounting for imprest, attach all the supporting documents and a brief activity report justifying the expenditure, and send the completed form to his/her supervisor for verification and signature.
  • After verification the retirement form is forwarded to the FM for approval.
  • If the employee has accounted for an amount which is less than the advance, the balance must be paid back. A receipt will be issued to the staff retiring the imprest. Otherwise, it is recovered in full from the salary.
  • If the employee has submitted a claim which is more than the advance originally granted, he/she should be refunded the balance,
  • After the FM has approved the retirement form, the Accountant should make a JV to transfer the advance accounted for from the staff advance/imprest account to the correct expense account. The FM must approve the JV.
  • If any receipts are lost and it proves impossible to obtain a replacement, a PV must be written out and signed by the employee and countersigned by the FM. On the back of this replacement receipt, there must be a full explanation of how the receipt was lost and all attempts made to ensure the supplier can re-sign the documentation.

6.6  DISBURSEMENTS/CLAIMS MANAGEMENT

6.6.1  Policy

  • Basil & Alred shall refund to its employees any approved expenditure incurred by an employee in execution of official work.
  • Any staff shall be allowed to use his/her private vehicle for business trips and shall claim mileage for the same at the prevailing rate per Kilometre which will be revised from time to time by the MP. The current rate is TZS. 1,000 per kilometer. In case of Taxi usage employees shall use Uber services for all trips conducted in Dar es Salaam and normal Taxi services in regions where Uber services are not available.
  • All disbursements which are directly chargeable to clients shall be paid to employee during conducting field work and billed to clients on actual expenditure basis at the end of the assignment. The Finance and engagement manager shall be responsible to monitor the actual disbursement expensed so as to avoid under/over-billing of such disbursements to the client.
  • A team of four (4) people shall use only one vehicle for all client trips and claim mileage or Taxi charges. The person who used his/her private vehicle or paid for the Taxi charges shall be the one responsible and allowed to claim for disbursement at the end of the assignment.
  • Staff working on clients who are located in most expensive areas shall be subsidised with a certain amount of money for their lunch to cover up their normal food cost. The subsides amount shall be determined based on the engagement manager judgement which must be justifiable and reasonable.
  • All disbursements shall be approved prior by respective engagement managers or head of departments.

6.6.2  Procedures for requesting a claim

  • The applicant shall fill a claim form which will includes the mileage covered or any other expenditure incurred on behalf of the them, engagement name, engagement code and total cost claimable. The applicant shall attach all necessary supporting documents and receipts.
  • The applicant shall then send the claim form to his/her engagement manager or supervisor for approval before sending it to the Finance department.
  • The approved claim form will be sent to the FM for further approval and payment process.

 

SECTION 7: PAYROLL ACCOUNTING

7.1  PURPOSE

This section describes the broad controls and accounting procedures to be followed and documentation to be used in recording and analysing the company’s monthly payroll expenses. The main objectives in accounting for payroll are:

  • To ensure that all personal emoluments are brought into account;
  • To ensure that all statutory and non-statutory deductions and their remittances to respective bodies be fully accounted for; and
  • To ensure that any outstanding loans, advances or imprest are deducted from terminal benefits.

7.2  POLICY AND GENERAL CONTROL

  • The Human resources officer shall maintain a payroll master file for all permanent staff in the payroll data base. This will include employee’s permanent records such as engagement date, current salary, allowances, and salary review and review history (from the letter of appointment or contract of employment). All amendments to the payroll master file with a consequential impact on payments to employees must be authorized by the MP and this must be documented prior to entry on the payroll master file.
  • All information necessary for the preparation of payroll shall be sent to the Finance department before 25th of each month.
  • The FM shall sure that the submitted information is authorized before processing the payroll.
  • The payroll preparation work should commence by not later than the 25th of each month. Salaries will be recently deposited into employees bank accounts between the 26th and 31st of each month.
  • Payroll information will not be provided to third parties (e.g. banks, mortgage lenders etc.) unless prior written approval has been provided by the employee to release such information. The employee should name the institution(s) that will be making the enquiry.
  • Any changes to the employee’s bank details should be communicated to the Finance Department in a written form at least a week before the end of the month.
  • Overtime payments shall be made to eligible employees who have worked beyond normal working hours as per the labour law. Partner approval will be required for such payment.
  • Overtime will be paid a month in arrears together with salaries
  • All payments to casual labourers shall be based on casual labourers list approved by the MP and counter signed by the Head of Unit who supervised the work the casual labourers performed.

7.3  ACCOUNTING PROCEDURES

  • The HR shall prepare the master payroll on the basis of letters of appointment and contracts. The master payroll will be updated monthly and sent to FM for preparation of the monthly payroll;
  • The Monthly payroll will be updated with relevant documentation concerning the payroll, which include:
  • Promotion letters
  • Letters of termination, resignation, retirement, completion of contract
  • Transfer letters
  • Advice for stopping payment of salaries
  • Advice for payment of half-pay for whatever reasons
  • Approved overtime sheets and other allowances
  • Statutory deductions e.g. Income Tax, SDL, NSSF etc.
  • Letters authorizing recoveries from the employee salaries e.g. loans, imprest
  • The FM will also check the Individual Pay Records (IPR) to ensure that the monthly totals of all these cards agree with the final summary sheet figures. In case of differences IPR figures should be checked with individual pay-slip figures;
  • The FM will compare the current month’s salary figure with the previous month’s salary figure and any difference should be reconciled to make sure that the payroll is in order;
  • The monthly payroll will then be approved by the MP. The final summary sheet of the approved payroll shall form the basis of writing payment vouchers and cheques to settle the net salaries and statutory dues payable;
  • A Payroll Journal (PJ) shall be prepared by the Accountant and approved by the FM. The PJ will be used for posting payroll entries in the GL; and
  • After the payment of salaries, the monthly payroll will be filed in chronological order by the FM and a pay slip will be available for each staff.

7.4  PAYROLL JOURNAL

The PJ will be used to pass the following GL entries:

Recording payroll expenses and payroll liabilities for the month

Date Account Particulars  Debit Credit
xxx Salaries and Wages xxx
Other allowances xxx
PAYE Payable xxx
NSSF employees contribution Payable xxx
WCF Payable xxx
SDL Payable xxx
Staff Advances Account xxx
Net Salaries Payable xxx

 

Recording of employer’s payroll related levies

Date Account Particulars  Debit Credit
xxx Pension Expense xxx
NSSF Employer’s contribution xxx

 

 

 

 

Payment of net salaries and related levies

Date Account Particulars  Debit Credit
xxx Net Salaries Payable xxx
PAYE Payable xxx
NSSF payable xxx
WCF & SDL Payable xxx
Bank xxx

 

SECTION 8: PURCHASING AND STORES PROCEDURES

8.1  GENERAL CONTROLS

  • All purchases shall be made from reputable suppliers through competitive bidding. A minimum of three price quotations will be invited for all purchases of goods or services. In addition, purchases will be made in accordance with the budgeted requirements and only when needed for use;
  • A central store shall be maintained for all goods procured;
  • Purchase Requisitions (PR) for recurrent goods and services will be initiated by the user sections and approved by FM. However, PRs for capital goods and services shall be approved by the MP;
  • All purchases will be checked against relevant orders, supplier’s invoices and delivery notes to determine the correctness of the quantities, quality and prices;
  • Local Purchase Order (LPO) forms will be controlled by the FM;
  • LPO books shall contain pre-numbered forms, each of which shall be in one original and two copies. The original LPO will be sent to the supplier, the duplicate to the requisitioning department and the triplicate to accounts;
  • Contracts for the acquisition of goods and services shall be signed by the MP; and
  • Vehicle logbooks shall be maintained for each company vehicle. The logbooks shall be checked and countersigned by the FM before new requisitions of fuel and spares are processed.

8.2 PURCHASE PROCEDURES

A:  ORDERING

  • A Purchase Request shall be prepared in duplicate by user department and approved by respective departmental manager. The original will be sent to the FM and the duplicate retained by the user department;
  • On the basis of the original Purchase Request the FM shall invite a minimum of three quotations (open market or restricted);
  • Received tender quotations will be examined by FM for the most competitive and responsive supplier;
  • LPO to be issued to the successful tender quotation by the FM. The LPO must be approved and authorized by the MP; and
  • The original LPO will be dispatched to the successful vendor, the duplicate to be sent to the requisitioning department and the triplicate to be filed in numerical order by the finance department.

B:  RECEIVING 

  • The Goods Delivered and Invoices received from suppliers will be checked against the items delivered and the LPO by the Stores Officer. Experts can be called to check the quality and specification of the item;
  • If satisfied a Delivery Note will be signed by the Stores Officer and goods accepted;
  • A Goods Received Note (GRN) will be issued by stores officer.
  • The Stores Officer will post the receipt of all types of goods received in the Inwards Receipt Book (IRB).
  • The Stores Officer will then send the signed Delivery Note, Suppliers Invoice, Copy of the LPO and GRN to Finance department for processing payment.

C: ISSUING

  • A Stores Request Form (SRF) will be completed and sent to stores officers identifying the item needed, purpose and for which engagement if related to client activity.
  • On receipt of the SRF the Stores Officer will issue the items requested and the person requested the goods shall sign evidencing receipt of such goods; and
  • At the end of each day the Stores Officer shall summarize the quantities of the goods issued in the Daily Issue Summary.

 

SECTION 9: ASSET MANAGEMENT AND CONTROL

9.1  PROPERTY, PLANT AND EQUIPMENT

Property, Plant and Equipment are tangible assets that are held by the company for use in the production or supply of goods or services, for rental to other or for administrative purposes, and are expected to be used during more than one financial period.

The FM shall have the responsibility for safe-custody and the proper up-keep of all movable and immovable assets of Basil & Alred and maintenance of Fixed Assets Register in which the following information shall be recorded in respect of all assets:

  • (i) Property, Plant and Equipment shall be classified under the following categories:

(a) Motor Vehicles;

(b) Office Furniture and Fittings;

(c) Computers

(d) Office Equipment;

(e) Leasehold Improvement;

  • (ii) Intangible Assets shall be classified under the following categories:

(a) Software

(b) Trademarks and licenses

 

9.2  POLICY

  • Care must be exercised in determining whether expenditure should be capitalised as a fixed asset or written off as an expenses. The treatment of classifying revenue and capital expenditure should be applied consistently. The criteria to be used in determining whether an item should be treated as fixed asset or not include the following:
    • The estimated useful life of the asset should span over one year. 
    • Usage of the asset should be seen to contribute to the operational capability of Basil & Alred
    • The cost of the asset to the company can be measured reliably. 
  • Initially, fixed assets should be measured at its cost (including import duties and non-refundable purchase taxes) and any direct attribute costs of bringing the asset to working condition for its intended use. Any trade discounts and rebates are deducted in arriving at the purchase price.
  • Expenditure incurred on the acquisition of various categories of fixed assets should be classified in a logical and consistent manner and must have regard to their nature or function in the company.
  • Subsequent expenditure on property plant and equipment is only recognised as an asset when the expenditure improves the conditions of the asset beyond its originally assessed standard of performance. Expenditure on repairs and maintenance to restore or maintain the future economic benefits is recognised as an expense when incurred.
  • Expenditures for acquisition of furniture, motor vehicle, office equipment and computers, costing greater than TZS. 1,000,000 or USD 500 per item and with a useful life of more than one year shall be capitalised.
  • Periodic inspections to verify the physical existence as well as the condition and utilization of the assets must be carried out bi-annually. This exercise must be overseen by the FM. Reconciliation of physical and financial values should then be done, and any differences should be brought to the attention of the MP.
  • All assets MUST be coded and properly insured on a regular basis.

 

9.3  FIXED ASSET REGISTER

  • The FM must at all times maintain a comprehensive, up-to-date and accurate FAR in order to ensure that all assets are properly safeguarded and effectively utilized.
  • An asset will be recorded according to the particular classification in the FAR. The FAR shall contain at least the following details:
    • Date of acquisition
    • Location of the asset
    • Asset identification number
    • Purchase price
    • Useful life
    • Depreciation rate
  • Physical verification of assets shall be undertaken and reconciliation of the same shall be done with the certified assets lists and the assets register, at least once in every financial year. The FM shall provide the guidelines and the necessary forms for this exercise. Any variation shall be investigated and adjusted accordingly.
  • The asset verification sheets shall also indicate the general physical condition of the assets to enable management to know the repair or rehabilitation needs and make appropriate decision to improve physical condition of the assets or to dispose them off.

9.4  ACQUISITION OF FIXED ASSET

  • Acquisition must be planned for in advance through capital budgets.
  • Requisition for fixed assets are originated from the user department through FM and thereafter submitted to MP for approval
  • Once the MP approves the acquisition of the Asset, the purchase procedures will be followed.

 

9.5  DISPOSAL OF FIXED ASSETS

              

  • Disposal of assets shall be initiated from FM and approved by MP. The disposal method of all movable and immovable assets shall be suggested by the FM and MP.
  • An item of property, plant and equipment should be eliminated from the company’s statement of financial position on disposal or when the asset is permanently withdrawn from use and no future economic benefits are expected from its disposal.
  • An intangible asset should be derecognized (eliminated from the company’s statement of financial position) on disposal or when no future economic benefit is expected from its use and subsequent disposal.
  • Gains or losses arising from the retirement or disposal of an item of property, plant and equipment and intangible asset should be determined as the difference between the estimated net disposal proceeds and the carrying amount of the asset and should be recognized as income or expense in the profit or loss.

       

9.6  VALUATION OF ASSETS

The value of assets shall be maintained as specified by IAS 16 – Property, Plant and Equipment together with IAS 38 – Intangible Assets.

 

9.7  DEPRECIATION AND AMORTISATION

  • All assets shall be depreciated or amortised using straight line method subject to provisions of the IAS 16 for Property, Plant and Equipment and IAS 38 for Intangible Assets.
  • All assets acquired within an accounting year, shall be depreciated using the applicable rate from the date the asset was available for use even if during that period the item is idle.
  • Depreciating an asset will cease to the point an asset is disposed or when no future benefits are expected from its use or when the asset is placed for disposal.
  • The depreciation method to Property, Plant and Equipment should be reviewed periodically and, if there has been a significant change in expected pattern of economic benefit from those assets, the method should be changed to reflect the changed pattern. When such a change in depreciation method is necessary the change should be accounted for as a change in accounting estimates and the depreciation charge for the current and future period should be adjusted.
  • The amortisation period and the amortisation method should be reviewed at least each financial year end. If the expected useful life is significantly different from various estimates the amortisation period should be changed accordingly. If there has been a significant change in the expected pattern of economic benefits from the asset, the amortisation method should be changed to reflect the pattern. Such change should be accounted for change in accounting estimates.

 

9.8  MOTOR VEHICLES LOGBOOK

  • Log books shall be maintained for all Basil & Alred motor vehicles. Users will be responsible for filling the logbook for kilometre driven, fuel consumed and general service history.
  • Users of the vehicle should provide the following details in the vehicle log book; Details of the journeys or work performed, the signature of the officer authorizing usage, details of fuel, oils, spares etc. used, dates and nature of servicing and repairs and lists of tools, spare wheels and other equipment carried on or associated with the vehicle. The details of journey include the commencement time, mileage at commencement, route taken, completion time, mileage at completion and signature of authorizing officer.
  • At the end of each month, a summary will be entered in the log book showing the amount of fuel used during the month.
  • At least once in a week, the FM must check the logbook to ensure all details are properly recorded in the logbook.
  • Any unauthorized or improper private use of a vehicle may be treated as involving theft of fuel and the fraudulent conversation of property to an officer’s own use and constitutes a very serious offence, which may result in disciplinary proceedings being taken against an officer irrespective of his/her seniority.

SECTION 10: AUDIT

10.1  APPOINTMENT OF EXTERNAL AUDITORS

Basil & Alred auditors shall be appointed and terminated by the Managing Partner after seeking advice from the Finance Manager/other Partners.

 

10.2  ANNUAL AUDIT

The auditors will audit Basil & Alred accounts annually. They will present an audit report directly to the Managing Partner.

The auditors shall perform an audit in accordance with:

  • International Standards on Auditing;
  • Specific lawful instructions or concerns from the MP.

The annual audit will examine and verify all necessary documents and transaction as requested by the auditors.

The audit firm should be independent and any information requested from Basil & Alred should be made available to them. The auditors will record any irregularities noted and present a report to the MP.

 

10.3    TERMINATION OF AUDITORS

The appointed auditors will be terminated by the Managing Partner. The auditors will be informed about their terminations.

10.4    TENURE OF AUDITORS

The tenure of auditors will be one year.

 

SECTION 11: REPORTING

 

11.1      PURPOSE

The purpose of this section is to define the type, content and frequency of reports required to be produced to the Partners.

The FM will be required to prepare the following types of reports:

11.2  MANAGEMENT (INTERNAL) REPORTS

  • The FM will run monthly and quarterly management reports from the financial management system. The reports to be produced and their frequency are as follows:
Report Frequency
Balance sheet (with supporting schedules) Monthly
Income & Expenditure Statement Monthly
Cash flow forecast Monthly
Bank reconciliation statement Monthly
Weekly collections and billings Weekly
  • The Trial Balance, Statement of Financial Position, Profit or Loss, and Cash Flow Statement are generated immediately after the GL is updated. Monthly reports are due by the 10th day of the following month.
  • Before the financial reports are generated, the books are closed and a check is necessary to ensure that all entries are recorded and any adjustments made by way of Journal vouchers are incorporated. After the accounts are closed the FM reviews them. No posting is allowed to prior months’ accounts after the closure of the current month.
  • Every month, the FM shall compile a financial report to the MP. This report shall include explanations for any significant variations from the budget. The report should also be accompanied by cash forecast for the next month. This shall be limited to the amounts needed to meet expenditure/disbursement needs and shall be scheduled so that the funds are available to the firm for day to day operations.

11.3  EXTERNAL REPORTING

  • These are statutory financial statements. Annual financial statements should be prepared and reviewed by the end of the first month of the following year, ready for audit by the Firm external auditors.
  • The FM will prepare the following financial reports for submission to the MP, of which the Managing Partner will review:
Report Internal deadline to facilitate review Deadline
Quarterly reports 10th of month following end of reporting period 15 days after the end of reporting period
Annual reports 20th of January 30th January
Audited accounts 28th February 15th March

 

11.4  YEAR-END REPORTING AND FINANCIAL STATEMENTS

  • The financial year of Basil & Alred runs from 1st January to 31st December each year.

 

SECTION 12: PLANNING AND BUDGET CONTROL

 

12.1     PLANNING AND BUDGETING

  • The service line managers will be responsible for preparation of annual plan and budget. The department plans and budget should be ready by 30th November of each year, the FM will be responsible for co-ordinating the consolidated annual budget by 10th December.
  • Plans and budget will be discussed and approved by the Partners by 20th December, each year.

12.2    BUDGETARY CONTROL REPORTS

  • Monthly and Quarterly performance and budgetary control reports shall be prepared to show how the actual financial performance compares with the budgeted numbers.
  • The monthly budgetary control report shall contain the following columns:
    • Budgeted performance;
    • Actual performance;
    • Variance of actual from budget;
    • Variance expressed as a percentage of budget; and
    • Remarks
  • On the remarks column, explanations of major variances (of 10% of more) will be given. Where lengthy explanations are needed, these will be made on a separate sheet and cross-referenced to the report appropriately.

12.3    BUDGET REVISIONS

  • Budget revision shall be done at the end of each quarter while preparing management reports. The decision of preparing budget revisions will be based on the expenditure trends from the monthly and quarterly budgetary control reports. The requests for revisions should provide details of the accounts for which revisions are requested, reasons for the revisions, the original budgeted amount and proposed revised amounts.  The responsibility for preparing and submission of budget revisions will be of the FM, after consulting with the Departmental and Service Line Managers. Budget revisions will be approved by the Partners.

“I acknowledge that I have read, and do hereby accept the terms and conditions contained in these policies. In addition, I will not copy, share or distribute these documents without a written approval of management”

Financial Policies and Procedures Manual Acknowledgement Form

I accept the Terms & Conditions

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