Draft: Version 2; 2009

Revision date: November 2010

CONTENTS

INTRODUCTION Page 3

FINANCIAL CONTROLS Page 4

Introduction
The Financial Policy document has been created to ensure the accountable, efficient
and effective control of all income and expenditure of XXXXXXXX.

Apart from the technical requirements for controlling funds, several control forms
such as cheque requisitions and reporting formats will be utilised to ensure strict
control of the funds.

XXXXXXXX runs a computerised network with the following software -

1. An internationally recognised accounting package (Accpac)

2. Pastal Payroll package

3. A spreadsheet package (Microsoft Excel)

4. A word processing package (Microsoft Word)

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FINANCIAL CONTROLS

1. Orders
 Order forms will be completed for any procurement

 Order forms will be approved by the Relevant Manager

 Supporting documents in the form of quotes will be attached

 Orders for all budgeted operational expenditure to an amount of
R10,000.00; or an approved monthly standard order, e.g. Food; will be
authorised by the relevant Regional Manager

 Orders for all budgeted operational expenditure to an amount of

R10,000.00 will be authorised by the Regional Programme Managers.

 Orders for all budgeted operational expenditure to an amount of

R50,000.00 will be authorised by the COO

 All Capex items and orders in excess of R50,000.00 will be authorised

by the CEO or CFO

2. Cheques/Electronic Payments

 Cheque/Payment requisitions will be completed for every

cheque/electronic transaction.

 Cheque/Payment requisitions will be authorised by any two of

designated officials as approved by the CEO, CFO

 Original supporting documents will be attached to cheque/payment

requisition.

 Cheques returned from the bank after being processed will be filed by
the Financial Administrator in numerical order.

2 Bank Accounts

 Bank accounts will be opened and closed with as approved by the

Executive of the Board.

 Separate bank accounts will be kept specifically for the funds which are
channelled to organisations/projects and where requested by the
donor/funder. A current account and an investment account will be
opened for this purpose.

 Site Accounts (input required)

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  The banking of all receipts will be supported by a deposit slip. Where
the deposit is done electronically, a deposit slip will be made out
containing all necessary details, and will be filed in date sequence.

 Electronic banking will be authorised by two people – the Director and/or

the National Training Manager and the Financial Administrator. Each will
have their own code and password and will release the amounts paid out
separately to one another.

3 Receipting

 A pre-numbered receipt book will be maintained for all cash and cheque
receipts by employees designated by the CFO.

 Incoming payments will be banked within three working days of receipt.

No cash receipt will be used for petty cash or any other purpose.

 All incoming cheques will be marked “Not Transferable” and the bank
account number of the XXXXXXXX bank account will be entered on the
reverse side of the cheque.

 No cash will be received at sites

4 Bank Reconciliations

 The bank account will be reconciled by the Financial Administrator every

month between the cash book entries and the bank statement.

 A list of all outstanding cheques will be drawn every month in support of

the bank reconciliation.

 The Financial Director will monitor the differences between the bank
balances and the cash book balances by scrutinising the bank
reconciliation every month.

5 Salaries

5.1 A salary register will be maintained by the XXXXXXXX.

5.2 The register will reflect the nature of the payments to the staff and
will reflect statutory and other deductions so as to reconcile on a
monthly basis with IRP5 rules.

5.3 Salaries will be paid on 25th of each month, or on the closest working
day prior to the 25th.

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 5.4 The necessary monthly payments will be made to the Receiver of
Revenue for SITE (Standard Income Tax on Employees) and PAYE
(Pay as you earn) tax and payments will be made for UIF
(Unemployment Insurance Fund) and RSC (Regional Services
Council) levies.

5.5 Salaries will be reviewed annually by the salary review committee

and will be ratified by the National Executive Committee and minuted
in the National Executive Committee minutes.

6. Budgets

6.1 Annual and project budgets will be drawn up before the start of each
financial year by the CEO, CFO & Operational Manco.

6.2 Budgets will be approved by full Board minutes

6.3 Amendments to budgets will be approved by full Board minute.

7 Accounting System

7.1 The accounting system used by XXXXXXXX is a reliable,

internationally recognised package (Accpac).

7.2 All postings and cheque writing will be done by the Financial
Administrator.

7.3 All general ledger balance sheet, expense and liability accounts will
be reconciled every month.

7.4 An electronic backup will be made every second day by the network
hard drive.

7.5 The integrity of the system will be the responsibility of the Financial
Administrators at all times.

7.6 The general ledger chart of accounts will not be amended without
consultation with the Director. Only the Financial Administrator will
amend, add to or delete accounts on the chart of accounts.

7.7 Regular accounting checks will be performed by the XXXXXXXX

CFO.

8 Journal Entries

8.1 Except for bank entries, supported by bank statements, no journal

entries will be made to the cash book.

8.2 Writing off of debts will be authorised by the CEO & CFO.

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 8.3 No cross funding of projects will occur, and therefore no inter
company accounts will appear as a result of journal entries between
general ledgers.

9 Management Accounts

9.1 A set of management accounts in acceptable accounting format,

against budget, will be produced within ten working days of every
month end. These will be sent to the XXXXXXXX executive for
examination and approval at the request of the CEO.

9.3 Yearly Financial statements, including the Balance Sheet and

Income and Expenditure statements will be produced by the
Financial Administrator. After approval from the CEO &CFO, these
statements will be approved by members of the Board.

9.4 At financial year end, if an expense incurred in March or earlier it will

only be paid after the commencement of the new financial year. This
expense will be posted back to the previous year as an accrual.
Likewise, if payments for services rendered in respect of the
previous financial year are only received in the new financial year,
these amounts will be posted as accrued income back into the
previous year.

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10 Procurement Policy and Procedures

10.1 Objective

The objective of the Procurement Policy shall be to ensure that the

purchasing of equipment and/or services is cost effective,
accountable and in the best interests of the XXXXXXXX. It aims to
ensure that the financial administration of the organisation is of the
highest standard.

10.2 Policy statement

 Procurement of all purchases and services will be managed in

the same manner
 Procurement will be authorized by the CEO and CFO for all items
in excess of R50,000.00
 Procurement for items under R50,000 within budget will be
authorized by the COO
 Procurement for item under R10,000 within budget will be
authorized by the relevant regional programme manager.
 Quotes will be received for all procurements and where the
amount for equipment to be procured is over R30 000 there will
be three quotes.
 Every procurement will have a purchase order and an invoice
which will be duly authorised as above.
 All goods will be checked to ensure that the correct goods are
received.
 No other employees will authorise any procurement.

10.3 Procedure

 A quote from the relevant service provider will be required for all
procurements at the outset. This quote can be electronic, faxed
or original.
 Each quote will be duly authorised on the prescribed form by the
relevant senior staff member, according to the policy.
 Once the quote has been authorised, a purchase order will be
completed.
 Each purchase order will have an order number as well as the
project code where necessary.
 Each purchase order will be duly authorised by the relevant staff
member, according to the policy.
 The order will then be placed.

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 Once the goods are received they will be checked by the
receiving staff member to ensure that the correct goods have
been sent.
 The preferred supplier list will be reviewed on an annual basis

 The quote, the purchase order and the invoice will then be given
to the financial administrators.
 Invoices for the goods will be attached to the relevant purchase
order.
 Once the invoice has been paid, proof of payment will be
attached to the quote, the purchase order and the invoice and will
be duly filed.