ACCOUNTS POLICY MANUAL
A BRIEF & DESCRIPTION OF
ASSOCIATE
SOCIAL IMPROVEMENT FOUNDATION (ASIF)
Police
Line Road, Kumarkhali, Pirojpur Sadar,
Pirojpur, Bangladesh.
Mobile
: 01770-494849 E-mail : ngoasif@gmail.com
01. Name & Address: Associate Social Improvement Foundation (ASIF)
Police
Line Road, Kumarkhali
Post
+ Upa: Pirojpur Sadar, Dist: Pirojpur, Bangladesh.
02. Head of Organization: Md. Nijamul Huq, Founder & Chairman
03. Year of Established: 03-06-1997
04. Legal
Status : ASIF
is registered with the Department of Social Services and
NGO Affairs
Bureau, Government of Bangladesh bearing Registration Number’s :
a) NGO Affairs
Bureau FD No- 2971/2015
and
b) DSS No-335/2000
05. Management :- (a)
A General Committee consists of 28
members which meets
at list once a year
(b) An Executive Committee consists of 07 members which is elected by the
general committee for a 2 years term. EC is the supreme policy making body
execution of project and program.
06. Introduction:
Associate
Social Improvement Foundation (ASIF) is a non Govt. voluntary Social welfare
& Cultural and non-profitable Organization. It established in 1997 A
locally based NGO located in the Southern part of Bangladesh in Pirojpur District.
ASIF believes that if people from all levels within a community from
organization, then that organization will continue as a community who can solve
their own problems, share its disappointments and successes and begins its
journey to a sustainable development. The ASIF's goal is to help people is
bringing and to unit them together as to gain confidence and understanding themselves
and assist them to use their knowledge and skills for their empowerment and
development using their own resources. A community is a group of people who
lives together in one geographical place. A village or a para a sub village
could be regarded as community irrespective of ethnic group. More then one such
sub- village may constitute a village. The Peoples who live in a sub-village traditional
from some nature of community as they need share and to live together as to
love in the community.
The
Organization build up for rural poor and marginal people Specially for the rural
Socio-Economic and women & child with a view to promoting the poor and
marginal people It cultural status
for the rural under aspires to
build exploitation and oppression where
peace and harmony up a society free from exploitation and oppression where peace and harmony. ASIF believes that every women
& Child has a legal right to get human rights has been working in its target
area for establishing human rights of the poor and marginal people especially
women & Child.
07. VISSION:
Established
and empowered poor and vulnerable rural and urban people, emphasising the
women, girls, disables, children and orphan children in the society.
08. MISSION
To
establish the poor and vulnerable people, emphasising the women, girls,
disables, children, old women and orphan children in the society through making
them aware, sheltering, providing basic needs, capable, self-reliant and
self-initiators through building capacity, institutions, capital, utilization
of local resources and imparting felt-need based problem solving programs
involving necessary skilled, trained, experienced and qualified personnel.
9.0 Rationale for Financial Policy and Guidelines.
A) Financial
Guideline of ASIF:
Financial
Management is the lifeblood of an Organization’s whole management system for
survival, growth and long –term financial sustainability of that organization.
It ensures the economical and efficient use of resources of the organization
through safeguarding the assets and interests from losses of all kinds,
including those arising fraud, irregularity and corruption and also
communicating the true and reliable information, data and accounts to all the
related stakeholders in a timely manner.
I may be
noted that, the policy, system, process, procedures and methods of each and
every financial activity in general, have been defined and explained here in to
make high quality accounting practice and to trim down the chance
misinterpretation that may arise in course of execution of activities covering
the area of financial management. The rationale for developing this policy and
guideline are delineated below:-
·
Provide a customized accounting and financial
system based on generally accepted accounting principal (GAAP).
·
Improve the existing polices and procedures for
further strengthening of financial Management system as a tool for fulfilling
the basic financial requirements
·
Supplement the book, register and statements
concerning financial activities of the organization for preparing accurate and
reliable financial reports on time.
·
Ensure batter degrees of financial control,
transparency and accountability in day to day operations donors and other
stockholders to gain their respect and confidence
·
Ensure compliance with applicable laws and
regulations for long- term financial sustainability.
This policy
and Guideline is basically centered on financial and accounting aspects of ASIF to act in conformity with generally
accepted accounting principal (GAAP ) standard practices and Govt. laws to
avoid all sorts of legal and management
controversies, The financial and accounting aspect generally, contain
Accounting and Financial Management policies, Cash and inventory Management,
Table of Financial Authority, Payroll, Advance, Procurement policy,
Internal Control, Budget and Budgetary
Control Reporting etc.
B) Accounting and Financial Management
Policies.
The fundamental accounting
principles of organization (ASIF) shall be as follows:
·
The accounts shall be maintained according to
the double entry system of accounting.
·
The account shall be maintained under historical
cost convention on a going concern basis.
·
The consolidated accounts shall be maintained
under accruals basis accounting however cash basis accounting will be followed
for individual project if the Conditions
of grants from the donors dictate a cash basis accounting
·
Overhead cost such as, Core staff salary, Office
rent, Utilities, Office maintenance cost etc. shall be allocated by pro- rata
basis as per donor fund.
·
Organization will follow International
Accounting (GAAP) standard in preparing its:
·
Receipts & Payments Statement
·
Income & Expenditure Statement
·
Cash flow Statement
·
Notes of the Account
·
Depreciation should be charged on the various
categories of assets under diminishing/ reducing balancing method.
·
All periodical financial report shall be
prepared as per donors and NGO Affairs Bureau requirement.
C) Accounting Period.
·
The Accounting period of the organization (ETU)
formally from 1st July to 30th June.
·
The accounting period of the project shall be in
accordance with the agreement with the donors approved by the NGO Affairs
Bureau.
D) Accounting System
·
The accounts of all the funds shall be
maintained separately and the basic policy in this regard shall be as follows:
·
Separate sets books and records shall be
maintained for each and every fund whether funded by donors or from own
sources.
·
All Income and Expenses of the respective
project shall be separately accounted for
·
There shall be separate chart of accounts for
each project for recording the project transactions.
·
Financial Report for each project for separately
prepared.
·
Consolidated Financial statement shall be
prepared under accrual basis accounting to reflect the
accurate of affairs and results of the organizations as a who
E) Cash Section.
·
Make all payments by A/C payee Cheque or cash as
per policy / rules.
·
Receive all kinds of cash or Cheque
·
Control all Bank accounts of Head office and
branch office
·
Settle accounts of the outgoing staff of the
organization by Cheque
·
Maintain Daily cash book and update on a daily
basis.
·
Prepare the daily cash custody certificate and
the joint custodians as per Management policy and must sign.
·
Prepare & preserve bank related documents
daily i.e. Cheque controlling register, Cheque register etc.
F) Account
Section
·
All Income and
Expenses of the respective project shall be separately accounted for
·
Prepare the daily cash custody certificate and
the joint custodians i.e. Cashier and
head of accounts must s
·
Prepare vouchers for all financial transaction
of the organization.
·
Maintain all the books and documents for project
and General i.e. Cash book, ledger book, Subsidiary ledger, Cheque Register,
Advance register, Fixed Assets register stock register, Bank reconciliation
statement etc
·
Prepare all kinds of accounts for the
organization and financial report as per donor and NGO Affairs Bureau requirements
·
Coordinate with external auditors for statutory
audit of the organization.
·
as per requirement of the organization
·
All kind of Accounts and financial documents and
statements etc. shall be preserved in safe locker in the office premise
according to the Donor and NGO Affairs Bureau requirement
·
Prepare Bank Reconciliation statement on the
monthly basis
·
Updating advance register on daily basic
·
Prepare monthly financial action plan
·
Prepare Budget for the organization
·
Prepare Income and expenditure statement on the
monthly basis.
·
Control all expenses according to budget
·
While preparing the chart of accounts it shall
be noted that transaction are
segregated in to the following:
a)
Receipts/grants/donation
b)
Direct program cost.
c)
Personnel cost.
d)
Capital Expenditure.
e)
Program support cost/ Admin cost/( Overhead cost ).
The Organization
shall maintain separate books of accounts in respect of each project fund financed
by Donors. Inter project fund transfer is strictly restricted. But temporary
loan can be taken from general fun and if others of Organization on temporary
basis with the approval of Executive committee. No fund shall be transferred
from the project account except the loan amount to any other project.
For each of the project
the following books and records must be maintained:
a)
Daily controlling cash book
b)
General Ledger
c)
Subsidiary Ledger
d)
Advance register
e)
Daily Cheque controlling register
f)
Store register
g)
Salary registers
h)
Fixed assets register
G) Bank
Account:
·
One bank account (Master account) shall be
maintained for all foreign grants
received either in foreign currency or local currency with intimation to
the NGO Affairs Bureau
·
Separate
bank accounts (Operational bank account) shall be operated for each donor/project
after receiving the grants through master account to facilitate the project
activities proficiently and successfully.
H) Bank Signatory
·
Executive body of ASIF is the sole authority
for opening
& closing of
official bank accounts and assigns appropriate signing authorities to
operate bank accounts.
·
Incase of transfer or separation of an
authorized signatory from the organization and appointment of any signatory
Executive Director or his designate should inform the bank Manager in writing
for erase/delete
·
The Bank accounts shall be operated through
joint signature, where signature of the
Executive Director other official is man
I) Policy and Procedure for Bank Operation.
·
The Accountant /Accounts officer shall prepare
all Cheque.
·
A Check signatory must not prepare Cheque and
Vouchers.
·
All Cancelled Cheque should be marked
“CANCELLED” and preserved in a separate file along with the
supporting voucher.
·
The receiver of any Cheque must sign the
respective counter foil.
·
Serial number will be used on the cover page of
all Cheque books.
·
Advance signature in the Cheque shall not be
allowed.
·
All Cheque shall be crossed as “Account payee
“just after received.
·
All payments must be effected through Account
Payee Cheque for Tk.5,000/= and above.
·
An acknowledgement must be obtained from the
receiver for each payment.
J) Reconciliation of Bank Account.
Bank
statement shall be obtained from the bank after the end of each month and Accountant of ASIF shall prepare a Bank
Reconciliation statement. The Accounts officer/Finance Officer/ Director/Executive
Director shall sign the reconciliation statement.
K) Maintenance of cash
·
Official money Receipts shall be issued against
cash received by way of sale proceeds,
Service delivery, refund of advance etc.
·
All cash receipts are to be deposited daily into
the Bank. If not possible for any valid reason, they must be deposited into the
bank within the following working day without fail.
·
Payment must be made after authorization of
related bill/invoice from the appropriate authorities.
·
Maximum limit of single cash payment shall be
Tk. 5000/= (Five thousand).
·
Paid seal with date shall be stamped on all the
supporting bills after effecting payment.
·
Revenue stamp shall be affixed on the bills as
per GOB rules.
·
An accountant other than the person responsible
for maintenance book shall make ledger posting.
·
The Accountant/Cashier shall maintain maximum
Tk. 10,000/= cash for handling of daily cash transactions.
·
Excess of cash over the limit must be deposited
into bank.
·
Surprise daily cash audit should be conducted
and documented by Finance officer/Director/ Executive Director or any veiled
persons of the organization.
L) Payment of Salaries and Benefits
·
Salary and benefits of the staff shall be paid
through their personal bank account (Bank be nominated by organization) by the
end of each month.
·
The Administration Department shall maintain
attendance record and documents of all appointments, promotion, transfers,
resignations, removal from office etc. of employees and shall and forward the
same to the Accounts department for preparing the salary sheets and
disbursement.
·
Each employee shall sign in the prescribed
column of the payroll sheet.
·
An “Account payee” Cheque and advice with net
payable amount shall be sent to bank for payment to respective staff member’s
bank account.
·
The Accountant shall ascertain the net amount
payable to each employee after adjusting the deductions in respect of salary
advance, Provident fund, income tax etc.
·
Final Payment (Resignation, or dismissal) Payment
of salaries, PF, Gratuity and other benefits to an employee at the time of
resignation or dismissal will be administered as per relevant clause of the
personal and Admin policy of the organization.
·
Payments will be made through “Account payee”
Cheque (s).
Advance may be paid against
Procurement, works, training, traveling, office rent, petty expenses, and
salary etc. to employees, vendor, suppliers, house owner, and service
providers.
·
The maximum limit of advance may be as same as
approved requisite amount for respective works.
·
All advances (except salary) must be adjusted
within 15 days from the date of taking advance or 07 days after completion of
the work.
·
Salary advance may be allowed to staff against
current month salary under special consideration of Authority for emergency
requirement like treatment, childbirth, accident, and any other reasonable
purpose. Under consideration of Administrative policy.
M) Policy for Payment of Advance
·
All accounts in respect of advance payment and
their subsequent adjustments shall be made properly.
·
All advance is payable only through the
application/advance requisition slip, which must be approved by the proper
authority.
·
Second time advance must not be allowed to any
staff prior to adjust the previous advance.
·
Advance against conveyance and transportation
shall only be given against valid travel authorization.
·
Organization chef is the final authority for
approving advance.
·
If the concerned persons fail to adjust the
advance by submitting bill or in cash in time, the authority may take any
reasonable administrative action.
N) Limit of Advances
·
The maximum limit of work advance for staff
Tk.20000/=
·
Salary advance 80% of her/his monthly total
salary.
·
Provident fund advance is 80% his/her reserve
amount.
·
Training advance may be allowed as same as
approved requisite amount for respective training, seminar, workshop etc.
O) Inventory Management
Inventory
management is a system or process of managing the proper record keeping of Tangible
assets such as furniture, fixture, equipment office supplies, stationeries,
vehicle, spare parts fuel etc. It ensures efficient and effective management of
receipt, issuance, balancing, accounting, and documentation, controlling,
monitoring and safeguarding of the inventory materials.
P) Types of Inventory
·
Warehoused Inventory
·
Non- Warehoused Inventory
Q) Warehoused
Inventory
Office
supplies, Stationeries, Project materials, equipments etc. will be treated as warehouse
inventory.
Procurement
of warehouse inventory will be done as per requirement of the project against
approve budget following the procurement policy of the organization.
R) Non- warehoused Inventory
·
Things and items valued more then Tk. 1000/= and
a useful life of more than 1 (One ) year are generally considered as non
–warehoused inventory which are:
·
Furniture, Fixture and Equipment: Table, Chair,
Calculator, Computer, Printer, Photocopier, Generator, Sofa sets, File cabinet,
Fan, etc. Fall in the group.
·
Vehicles: Motorcycles, Four-wheel, Bi- Cycle,
Trolley, Engine boat, etc. come under this category.
S) Inventory
Management policy.
·
ASIF shall keep sufficient and detain record of
both incoming and outgoing inventory.
·
Responsibilities must be decentralized to at
least two persons to maintain the inventory in the store in the area of
handling and recording, Purchasing & Accounting and Approval for ensuring
better internal control system.
·
The Accounts officer or any designation shall
authorize the store requisition from.
·
Responsibilities for and access to the store
must be clearly identified.
·
The store shall be placed in a safe space and
kept under lock and key.
·
Assets identification number must be written to
Furniture, Fixture and Equipment.
T) Receiving procedures.
·
Store in- charge will receive all the store
items from the suppliers after checking the quality and duly signed by the
concerned authority.
·
Every receipt must accompany with documented
bill or Chelan.
·
All the documents must be preserver in a file.
U) Physical Inventory
·
The balance of physical inventory at the end of
the month must be agreeing with the Stock Reregister.
·
A committee or team must conduct physical
counting of inventory to reconcile with the stock register at least once a ye
V) Definition:-
·
Any material or assets shall be considered as
fixed assets if fulfils the following criteria:
·
Expected life is more than one year.
·
Cost exceeds Tk. 1000/=
·
Must generate economic benefit.
W) Maintenance of Fixed Assets Register.
It is very
crucial to preserve and up-date various data and information regarding fixed
assets as they generate benefits for the organization for a longer period.
Fixed assets register must be maintained containing the following data as
control tools for safe guarding the fixed assets from any loss or damage and
appropriate position in the financial statements.
X) Fixed Assets Register
SLNo
|
Date of purchase
|
Name of Assets
|
Quantity of Assets.
|
Voucher number
|
Value of the Assets
|
Location
|
Depreciation rate
|
Identification Mark
|
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Y) Rate of depreciation
A chart of depreciation
rate is given below:
Assets category
|
Depreciation rate
|
Remarks
|
Land Building (1st class)
|
4%
|
Higher/lower Depreciation
may be charged on the nature of Assets.
|
Buildings (others )
|
5% to 15%
|
Higher/lower Depreciation
may be charged on the nature of Assets.
|
Furniture and Fixture
|
10%
|
Higher/lower Depreciation
may be charged on the nature of Assets
|
Office Equipments
|
15%
|
Higher/lower Depreciation
may be charged on the nature of Assets
|
Electrical Equipment
|
20 to 33 %
|
Higher/lower Depreciation
may be charged on the nature of Assets
|
Vehicle
|
20%
|
Higher/lower Depreciation
may be charged on the nature of Assets
|
Z) Procedure for Depreciation
·
Depreciation will be calculated on straight –
line method for all fixed assets of the organization under this method an
asset’s expected economic life is ascertained in terms of year. Thus the total
cost of the assets is divided by the number of years.
·
Calculation of depreciation starts from the date
of procurement or use.
·
When Sale/transfer of fixed asset is made, the
related accumulated depreciation will also be removing from general ledger by
debiting accumulated depreciation account and crediting fixed assets account
AA) Physical Verification of Fixed Assets
·
Monthly or surprise physical verification of all
assets must be conducted by the Director or any other responsible person for
better uses and preservation and put signature on the Fixed Assets Register
books.
BB) Procurement policy
Procurement
policy shall mainly serve the following purposes:
·
Required quantity and quality of goods, Services
shall be procured at the lowest total system cost, on time delivery, etc.
·
Best possible service and timely delivery by the
suppliers will be guaranteed.
·
Potential suppliers and relationship with the
suppliers will be developed.
·
New and alternative sources, materials and
products shall be found out and proposed.
CC) Guiding Principal for Procurement
·
All purchase function will be carried out by the
Administration Department through purchase committee.
·
The Administration Department in its central
buying role is responsible for carrying out all purchase decisions involving
all items and all type.
·
As a general rule –except where conditions of
supply at least 03 (Three) competitive quotations most be ensure.
·
A purchase order shall be issued to the selected
vendor for supplying the goods/services as per the required quality, quantity,
and price and delivery time.
·
Invoices /Chelan must be checked after receiving
the goods against the purchase order and the delivery note before billing
approved and paid.
Procurement Limit:
Amount
|
Source
|
Quotation
|
Method of Procurement
|
Up to Tk.5,000.00
|
Open Market/ enlisted
vendors
|
None
|
Direct purchase by the
procurement Authority.
|
Tk.5,001.00 to 20,000.00
|
Open Market/ Enlisted
Vendors
|
Two
|
Open market purchase by
Authority, enlisted vendor, and purchase order should be issued.
|
Tk.20,001.00 to 1,00,000.00
|
Open market/ Enlisted
Vendors/ Press Tender
|
Three
|
Through limited tender
/press tender, For all cases purchase order will be issued.
|
Effective
management process of an organization activity consists of two basic elements:
Planning and Control. Planning denotes to budgeting, which is an important
Mechanism of organization internal control. Budget acts as an instrument to
provide focus on the future, performance evaluation, coordination,
communication as well as a source of motivation.
Organization
shall use budget as the main tool of controlling the finance and operations of
the organization. Short –term budget for the organization as a whole shall be
prepared for the donor and own financed projects and regular monitoring must be
done to ensure that the operation of the organization are moving according to plans.
DD) Types of Budget
·
Donor Budget:- These shall be prepared in
consultation with the respective donors.
·
Budget for own fund:-These shall be prepared for
projects, which will be funded from organization own resources.
EE) Budget Monitoring
Close monitoring
must be done for both short term and long term budget for their effectiveness. ASIF
shall monitor all projects based on the budgets and take corrective measures in
case of any deviations between budget and actual.
Regular and
close monitoring of the organization activities is extremely required for
protecting and safeguarding the interest of donors, organization and the target
people.
Monitoring
activities shall be undertaken for the proper utilization of funds as well as
effective and efficient implementation of the various programs. Monitoring is
not a one time exercise but a continuous process covering all the aspects like
drawing up to program guidelines, wide circulation, selection of deserving
project proposal, release of fund, project implementation etc. Organization and
donors both will monitor all such project activities as a tool of control
mechanism, closely and regularly all activities of the organization starting
from the section process to ending of the projects.
FF) Monitoring Policy
·
Select appropriate organizations based on their
reputation for commitment to service and their ability to carry out the responsibility
·
Ensure that the benefit of the project reach the
target group in time.
·
Ensure that the organization have legality, credibility,
reliability and capability to deliver the services required to the
beneficiaries.
·
Monitor all the activities related to the field
program and financial management system of their own project, donors project on
regular basis and prepare a monthly monitoring report for submitting to the
Executive Director of the organization.
GG) Monitoring Process.
·
Prepare a checklist selection the indicators to
be monitored on the basis of called a bank reconciliation report. a
bank reconciliation report.
·
Verify physical cash with the cash book balance
to see weather the cash in hand is correct and kept minimum balance as per
procedure.
·
Check all the vouchers with supporting bills and
documents to justify the validity to the transitions.
·
Review the budget variance report with the help
of approved budget and general ledger.
·
Check all the financial reports with the
relevant documents to justify the accuracy of financial information.
·
Review the present implementation status in
terms of MOU.
·
Verify the Advance register and crosscheck the
payment and its adjustment with the related papers and documents.
·
Crosscheck the Cheque Register with the Bank
Statement and Cheque counterfoil.
·
Check the Bank Reconciliation Statement with the
Cashbook balance and the bank statement of the same day.
·
Prepare monitoring report as and when conducted
monitoring and submit to the organization authority.
HH) Documentation and reporting system.
ASIF will
prepare, maintain and retain the following books and documents related to each transaction of the donor and own
projects. These documents must be preserved as per donor and own requirement
for future auditing purpose. The actual maintaining of the account includes.
·
Receipt and check of vouchers, cash and
non-cash.
·
Numbering of vouchers.
·
Possible daily and periodical report to
management.
II) Books and Registers
·
Cash book: Cash book should be maintained only
for cash and bank transaction under individual bank account as per requirement.
·
General and Subsidiary ledger: General and
subsidiary ledger for all types of financial transaction as per Annexure must
be maintained.
·
Stock register:- Stock register is maintained
for consumable items.
·
Fixed Assets Register: A register for assets for
a Value of Taka-1000/= and above and useful life of more than one year should
be maintained. Affix identification number of all the assets by the
organization.
·
Advance register: An advance registers to
account of all kind of advances should be maintained by the organization.
·
Cheque Register: An Individual Cheque register
must be maintained for tracking any issuance of Cheque and preserved Cheque
delivery record.
·
Salary Register: A register, which brings
together all information on staff salaries and deductions.
JJ) Documents/ Reports
·
Voucher: Voucher is a form used in an internal
control system to document information about and authorization of accounting
transitions. So, vouchers are supporting documentation for the organizations
Journal.
·
An important aspect of proper documentation of
voucher is cross referencing of final books
of an organization
.
KK) Type of Voucher:
·
Credit Voucher: It is prepared for each deposit
in to the grantee fund bank account. All receipt, such as, cash Cheque/Demand
draft, bank transfers, Interests, and other deposits should be recorded on a
credit voucher (CV).
·
Debit Voucher: It is prepared for each
Check that is written for the payment
of goods or service received by the grantee.
All cash disbursement from a grantee bank account, including
disbursements that are the result of Cheque withdrawals, transfers and bank
charges should be recorded with the accounting entry authorized on a debit
voucher (DV).
·
Journal Voucher: It is a voucher that is
prepared in order to record non- cash entry.
·
Bank Statement:
A bank statement is a chronological record of the financial transactions
that have occurred in bank account for a specific period of time.
·
Bank reconciliation report: A compilation of the
cash balance as reported by bank, and the balance noted on the organization
books, for a given period, is called a bank reconciliation report.
·
Receipts
& Payment statement: Receipts & Payment statement must be prepared at
the end of every month. All receipt during the month are shown in the credit
side and all payment are shown in the debit side of this statement.
·
Income and Expenditure Statement: Income and
Expenditure account is either produced from a Trial Balance where the accruals
based system of accounting is used, or it is based on a Receipts and Payments
account with adjustments. It is records as a summery of all categories of
income and Expenditure which belong to that year. Excess of income over
expenditure where there is a surpluses, or Excess of Expenditure over income
where there is a deficit.
·
Balance sheet: A accompanying Balance sheet
shall prepared for the same date that the income and Expenditure account is
prepared. The Excess figure of income over Expenditure/ expenditure over income
is included on the balance sheet under the heading Accumulated fund.
LL) Internal Control
ASIF shall
introduce and maintain internal control procedures and techniques to ensure
that objectives are achieved and standards are met. An Internal control system
is the whole network of systems- Administrative, operational and financial, at
each level of activity of the organization, to provide reasonable assurance
that objective will be achieved, with particular reference to:
·
Effectiveness: The effectiveness of operations.
·
Value for money: The economical and efficient
use of resources
·
Compliances: Compliance with applicable
policies, procedures, laws and regulations
·
Fraud: The safeguarding of assets and interest
from losses of all kinds including those arising from fraud, irregularity and
corruption
·
Financial control: The integrity and reliability
of information, accounts and data.
MM) Supervision
·
Appropriate procedures shall exist to ensure:
·
Internal checks are performed effectively
·
Procedural errors are detected through systematic
checks and corrected
·
Weaknesses in controls are identified and
reported to management
NN) Cost control.
·
ASIF must consider the cost of controls in
relation to the risk and exposure the cover.
·
The needs for and costs of individual control
must be balanced against the wider needs for control over economy, efficiency
and effectiveness.
·
Management reports shall be produced monthly or
quarterly as the organization needs
financial information throughout the financial year to monitor project progress
·
Authority shall take decisions about the future
management of the organization
·
The meeting of the Governing body can be set to coincide with
the management accounts cycle so that the information is still timely
·
The following figure shows how the financial planning
and financial accounting processes come together to produce management report.
·
Organization, Donor or the representative of the
donor or any other person/auditor/ organization appointed by them should
conduct routine auditor any time whenever felt necessary. The Auditor can check
all financial and program related records and activities of all projects to the
same donor during the visit.
OO) Type of Audit.
·
External audit: The external Auditor will
conduct audit as per requirement of the project/GOB. The external Audit firm
shall oversee all records, books, books of accounts financial reports, related
documents and other reports as per the Agreement.
·
Internal audit:
Internal audit is to ensure better internal control and operate the
program activities smoothly. ASIF will conduct internal audit within the
organization for transparency and accountability.
Md. Nijamul Huq
Founder & Chairman
Associate Social Improvement Foundation (ASIF)
Police Line
Road, Kumarkhali, Pirojpur Sadar, Pirojpur, Bangladesh
Mobile :
01770-494849, E-mail : ngoasif@gmail.com
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