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Agenda. Financial Management and ControlBudgetsAccounting for NGOsAudit Points. Management. PlanningOrganizingControllingMonitoring. Financial Management and Control. PlanningOrganizing Controlling Mo
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1.
YWLA
Financial Management Skills
June 17th, 2010
2. Agenda
Financial Management and Control
Budgets
Accounting for NGOs
Audit Points
3. Management
Planning
Organizing
Controlling
Monitoring
4. Financial Management and Control
Planning
Organizing Controlling
Monitoring Reach
5. Financial Management and Control
Manage scarce resources : funds increasingly scarce
Manage Risk : limit damage (ex: fraud)
Manage strategically: �bigger picture�, long term planning
Manage by objectives : Plan Do Review
6. Financial Management and Control
Plan : Set budgets
Do: Implement plans- receive and spend funds
Review: Monitor budgets
Build in learning and take action ? Plan again
7. Financial Management and Control
Good financial management will:
Help managers make effective use of resources to achieve objectives
Help the NGO become more accountable to donors
Gain the respect of funding agencies
Give the NGO the advantage in competition for increasingly scare resources
Help the NGO prepare for long- term financial sustainability
8. Financial Management and Control
Financial Control : the heart of financial management
Establish systems and procedures to make sure resources are properly being handled
Should develop a policies and procedures manual for the NGO
9. Financial Management and Control
The Seven Principles
Consistency (policies and systems)
Accountability (explain how funds are being spent)
Transparency (being open)
Viability (measure of financial continuity and security)
Integrity (honesty and propriety)
Stewardship ( resources are being used for the intended purpose)
Accounting Standards ( system for keeping financial records)
10. Financial Management and Control
�CAT VISA� ?
Use these principles as a checklist to identify the strengths and weaknesses of your organization
11. Financial Management and Control
12. Financial Management and Control
Exercise Time!!!!! ?
13. Financial Control
14. Financial Control
15. Financial Control
16. Financial Control
17. Financial Control
18. Financial Control
19. Financial Control
20. Financial Control
21. Financial Control
22. Financial Control
23. Financial Control
24. Financial Management Tools
Planning (strategic plans, cash flow forecast ,etc.)
Organizing (org charts, job descriptions, etc)
Controlling (budgets, procedures manual, etc)
Monitoring (evaluation reports, financial reports, etc)
25. Budgets and Costs
�A budget describes an amount of money that an organization plans to raise and spend for a set purpose over a given period of time�
Budget Functions :
1-Planning
2-Fundraising
3-Project implementation
4- Monitoring and evaluation
26. Budgets and Costs What makes a good budget?
Easy to read
Calculations are clear
Fully justified and accurate
Explanatory notes are provided
1,2,3,4,5,6,71,2,3,4,5,6,7
27. Budgets and Costs
What are the objectives of the project?
What activities will be involved in achieving these objectives?
What resources will be needed to perform these activities?
What will these resources cost?
Where will the funds come from?
Is the result realistic?
28. Budgets and Costs
29. Budgets and Costs
Exercise 30 Minutes
30. Accounting for NGOs Good financial records are the basis for sound financial management
Information
Credibility
Legal requirement
Future requirement
31. Accounting for NGOs Which accounting records should you keep?
Receipt or voucher for money received
Receipt or voucher for money paid out
Invoices- certified and stamped as paid
Paying �in vouchers for money paid into the bank
Bank statements
32. Accounting for NGOs Other useful supporting documents
Payment vouchers
Local purchase orders
Goods received notes
33. Accounting for NGOs
34. Accounting for NGOs Invoices / receipts
A valid receipt is the original written receipt, or other documentation.
Examples : Plane ticket stub, supplies invoice, taxi receipt, etc.
Copies are acceptable only in rare instances when receipts need to be retained for in-country VAT reimbursement
35. Accounting for NGOs Invoices / receipts
Name/ address of vendor providing goods and services
Date of transaction
Description of goods & services provided
Total amount of the goods or services
Signature of the individual seeking reimbursement
1111
36. Accounting for NGOs Further requirements
Costs incurred that are over 1,000 USD: three bids must be submitted with the reconciliation. If the least expensive is not chosen a decision memo
Hired staff salaries: signed timesheets are required, plus proof of payment (payroll slip) Checks MUST be in the name of the first beneficiary
Meetings & conferences: list of participants; agenda, fully itemized bill
14,1514,15
37. Accounting for NGOs Further requirements
Mileage log : reimbursed for the business use of a personal vehicle. Provide date, time, purpose, location, etc. Multiply kilometers by rate. Submit with voucher form for reimbursement
Inventory Log: Tracking number, tag number, description, quantity, location, acquisition cost, vendor name
14,1514,15
38. Accounting for NGOs Salaries
Employee must fill out a timesheet, which is then verified by his/her supervisor/ manager
Timesheet must be signed by both parties
Checks MUST be in the name of the employee (i.e. first beneficiary)
Proof of receipt
16,1716,17
39. Audit Points Organization
Organization chart (responsibilities among personnel)
Human Resources
Job descriptions
Employee files including CV, contract, salary history, performance evaluations
Records of compliance with payroll tax laws
40. Audit Points Procurement
Written policy ensuring competitive acquisition of supplies and equipment
Contract/purchase records (date, cost, vendor, terms)
Records tracking personal use of assets vehicle logs, phone/fax logs
Inventory of furniture and equipment
Tags on furniture and equipment
41. Audit Points Finance
A safe for cash on hand
Copies of all past financial records and reports
Current period accounts up-to-date
42.
Read your agreements VERY well
Communicate with your donor (try to get things in writing)
�Don�t assume�
Keep files organized
Don�t panic and learn from mistakes ?