ACCOUNTING POLICY MANUAL

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Wamoyo Chilalire
[email protected]
Table of Contents
1. INTRODUCTION...................................................................................0
2. DIVISION OF RESPONSIBILITIES......................................................0
1.1. Board of Trustees........................................................................0
1.2. Executive Director.......................................................................0
1.3. Regional Director of Finance and Administration (RDFA)....1
1.4. Administrative Assistant............................................................1
3. CHART OF ACCOUNTS AND GENERAL LEDGER..............................2
4. ACCOUNTING PRINCIPLES AND STANDARDS.................................2
4.1. Compliance with Standards............................................................2
IFRS.......................................................................................................2
4.2. Accounting Principles......................................................................2
Consistency Principle............................................................................2
Materiality Principle...............................................................................3
Prudence Principle.................................................................................3
5. FINANCIAL REPORTING.....................................................................3
5.1. Financial Statements......................................................................3
Statement of financial position.............................................................3
Statement of comprehensive Income Statement..................................3
Cash Flow Statement............................................................................3
Statement of Changes in Equity............................................................3
5.2. Reporting Frequency.......................................................................3
5.3. Reporting Deadlines.......................................................................3
6. REVENUE RECOGNITION...................................................................3
6.1. Criteria for Revenue Recognition....................................................3
6.2. Timing of Revenue Recognition......................................................3
6.3. Deferred Revenue...........................................................................4
6.4. Uncollectible Accounts....................................................................4
7. EXPENSE RECOGNITION....................................................................4
7.1. Criteria for Expense Recognition....................................................4
7.2. Matching Principle...........................................................................4
7.3. Prepaid Expenses............................................................................4
 7.4. Depreciation and Amortization Policies..........................................4
8. ASSET MANAGEMENT........................................................................4
8.1. Capitalization Policy........................................................................4
Capitalization Threshold........................................................................4
8.2. Fixed Assets....................................................................................4
Acquisition.............................................................................................4
Depreciation Methods...........................................................................4
Disposal................................................................................................5
8.3. Inventory Management...................................................................5
Inventory Valuation Methods (FIFO, LIFO, Weighted Average)..............5
Inventory Count Procedures..................................................................5
8.4. Asset Impairment............................................................................5
9. LIABILITIES AND EQUITY...................................................................5
Recognition of Liabilities..........................................................................5
Accrued Expenses....................................................................................5
Debt Management....................................................................................5
Equity Transactions..................................................................................5
Issuance of Shares................................................................................5
Dividend Policy......................................................................................5
10. INTERNAL CONTROLS.....................................................................5
Segregation of Duties...............................................................................5
Authorization and Approval Processes.....................................................6
Reconciliation Procedures........................................................................6
Internal Audit Procedures.........................................................................6
11. AUDITS AND REVIEWS...................................................................6
11.1. Internal Audit...............................................................................6
Objectives.............................................................................................6
Procedures............................................................................................6
11.2. External Audit..............................................................................6
Requirements........................................................................................6
Interaction with External Auditors.........................................................6
11.3. Audit Follow-Up............................................................................6
12. RECORD KEEPING...........................................................................6
 12.1. Documentation Standards...........................................................6
12.2. Retention Periods.........................................................................7
12.3. Security and Confidentiality of Records.......................................7
13. CASH MANAGEMENT......................................................................7
13.1. Cash Handling Procedures...........................................................7
13.2. Bank Reconciliations....................................................................7
13.3. Petty Cash Policy.........................................................................7
14. PAYROLL ACCOUNTING..................................................................8
14.1. Payroll Processing........................................................................8
14.2. Employee Benefits.......................................................................8
14.3. Taxes and Deductions..................................................................8
15. TAXATION.........................................................................................8
15.1. Tax Compliance............................................................................8
15.2. Filing Requirements.....................................................................8
15.3. Tax Planning and Strategy...........................................................8
16. BUDGETING AND FORECASTING...................................................8
16.1. Budget Preparation......................................................................8
16.2. Variance Analysis.........................................................................8
16.3. Forecasting Techniques................................................................9
17. COMPLIANCE AND ETHICS.............................................................9
17.1. Legal and Regulatory Compliance...............................................9
17.2. Ethical Standards and Conduct....................................................9
17.3. Fraud Prevention and Detection..................................................9
18. POLICY REVIEW AND UPDATES.....................................................9
18.1. Periodic Review Process...............................................................9
18.2. Procedure for Updating the Manual.............................................9
18.3. Approval and Implementation.....................................................9
APPENDICES..............................................................................................0
 1. INTRODUCTION
The purpose of this manual is to describe the accounting policies and
procedures currently in use at Chititri Trade-Skills Technical School and to
ensure that the financial statements and procedures conform to generally
accepted accounting principles; assets are safeguarded; guidelines of
grantors and donors are complied with; and finances are managed with
accuracy, efficiency, and transparency. All Chititri staff with a role in the
management of fiscal and accounting operations is expected to comply
with the policies and procedures in this manual. These policies will be
reviewed annually and revised as needed by Operations Director and
approved by the Board of Directors.

2. DIVISION OF RESPONSIBILITIES
The following is a list of personnel who have fiscal and accounting
responsibilities:

1.1. Board of Trustees

1. Formulates and approves organizational policies and fiduciary
standards
2. Reviews and approves the annual budget
3. Reviews annual and periodic financial statements and information
4. Recruits the Executive Director and reviews her/his performance
annually
5. Establishes the organisation’s salary scale and determines the salary of
the Executive Director
6. Appoints authorized signing agents on Panos bank accounts. (Approval
of appointment is by at least two board members).
7. Reviews and approves all contracts over USD 100,000)
8. Reviews and approves all non-budgeted expenditures over (USD
20,000)
9. Reviews and advises staff on internal controls and accounting policies
and procedures
10. Appoints the external auditor, and reviews and approves the annual
audit reports
 1.2. Executive Director
1. Reports periodically to the Board and Executive Committee on the
organisation’s operations and financial performance
2. Ensures that Panos Caribbean complies with all legal, accounting and
statutory obligations in accordance with the laws of the countries in which
it operates
3. Ensures that the organization operates in accordance with approved
policies and fiduciary standards
4. Reviews and approves all financial reports including cash flow
projections
5. Sees that an appropriate budget is developed annually
6. Reviews and signs issued cheques/wire transfers and/or approves
cheque signing procedures
7. Reviews and approves all contracts (except those for which the Board
retains responsibility, as per #7 above)
8. Reviews and approves all grant submissions
9. Approves inter-account bank transfers
10. Is on-site signatory for all bank accounts
11. Oversees the adherence to all internal controls

1.3. Regional Director of Finance and

Administration (RDFA)

1) Bookkeeping
• Keeps the books of Panos Caribbean, in accordance with the
Annual Budget as adopted by the Board of Panos Caribbean, and
using appropriate separate accounts for all projects and activities in
financial reports as appropriate • Reviews all bank statements, for
any irregularities, and approves completed monthly bank
reconciliations
2) Financial reporting • Oversees the preparation of financial progress and
final reports as mandated by the grants and other collaborative
agreements of Panos Caribbean • Submits monthly and quarterly
integrated management reports

3) Statutory and Financial Reporting • Ensures that Panos is tax compliant

and that all statutory obligations are filed and paid on time. • Ensure that
Panos is compliant with its filing at Company’s Office/Registrar

4) Management • Supervises the work of staff, consultants and

contractors related to Finance and Administration of Panos Caribbean •
Assists programme staff in budgeting matters when appropriate •
Generates invoices for outstanding project balances 5) External relations •
Acts as Panos Caribbean contact point for auditors, as contracted by
either donor agencies (for project audits) or the Panos Board (for annual
external audit)
 1.4. Administrative Assistant

1. The Administrative Assistants report to the RDFA. The deliverables are:

a) Postings of all cheques and deposits for all operating accounts in the
accounting system; b) Monthly bank reconciliations for all checking
accounts in the accounting system; c) Quarterly financial report on
projects; d) Prepare payment vouchers and cheques for signature, prepare
wire transfer forms, maintain journal entry file, alert on need for currency
exchanges; e) Trial balance, as generated by the QuickBooks system

2. Represent Panos Caribbean to partner institutions and funders

regarding financial and administrative issues; 3. Provide general support
to the Panos staff to facilitate the successful management of programmes,
including sorting out correspondence, typing, making copies, printing,
filing documents (physical and electronic), receiving phone calls; 4. Assist
staff in the preparation of meetings and workshops; 5. Help coordinate
visits from Panos Caribbean staff coming from another country; 6. Attend
country staff meetings, take minutes and share them with staff members;
7. Process country timesheet information against the projects and general
accounts; 8. Take care of the Petty Cash in consultation with Country
Coordinator and following budgetary lines; 9. Manage procurement,
according to Panos Caribbean and donor guidelines; 10. Maintain payroll
information for staff and act as focal point with payroll service; 11. Provide
support during the preparation of training activities; 12. Manage the
needs of the office including ordering supplies/equipment and
housekeeping; 13. Ensure that office equipment and communications
systems are properly maintained and serviced; 14. Any other duties as
assigned

3. CHART OF ACCOUNTS AND

GENERAL LEDGER
Panos has designated a Chart of Accounts specific to its operational needs
and the needs of its financial statements. The Chart of Accounts is
structured so that financial statements can be shown by natural
classification (expense type) as well as by functional classification
(program vs. fundraising vs. administration) and by funding source. The
RDFA is responsible for maintaining the Chart of Accounts and revising it
as necessary. The general ledger is automated and maintained using
Panos accounting software. All input and balancing is the responsibility of
the RDFA with final approval by the Executive Director. The Executive
Director should review the general ledger on a periodic basis for any
unusual transactions.
 4. ACCOUNTING PRINCIPLES AND
STANDARDS
4.1. Compliance with Standards

The accounting principles and standards outlined in this manual are based on the
International Financial Reporting Standards (IFRS), which provide a globally recognized
framework for financial reporting. Adherence to these standards ensures consistency,
comparability, transparency, and relevance in financial statements.

1. Accrual Basis of Accounting

All transactions are recorded on an accrual basis, where revenues are recognized when earned
and expenses are recognized when incurred, regardless of when cash is received or paid.

2. Substance over Form

Transactions are accounted for based on their substance and economic reality rather than their
legal form. This principle ensures that the financial statements reflect the underlying
economic activities of the entity.

3.

4.2. Accounting Principles

5. Prudence
6. In preparing financial statements, caution is exercised in the face of uncertainty.
Liabilities and expenses are recognized as soon as they are probable, while assets and
revenues are only recognized when their realization is certain.

4. Consistency

Consistency in accounting policies is maintained from one period to another, unless a

change is justified by a substantial reason and disclosed appropriately.

5. Materiality

Financial statements disclose all material items relevant to the understanding of the
financial position, performance, and cash flows of the entity. Immaterial items are not
required to be disclosed separately.

6. Going Concern
 Financial statements are prepared on the assumption that the entity will continue its
operations for the foreseeable future. If this assumption is not appropriate, appropriate
disclosures are made.

7. Fair Presentation

Financial statements are prepared to present fairly the financial position, performance,
and cash flows of the entity. Fair presentation requires management to exercise judgment
in applying accounting policies.

8. Completeness

Financial statements include all necessary information in order to present a true and fair
view of the financial position, performance, and cash flows of the entity.

9. Disclosure

All necessary disclosures are made in the financial statements and accompanying notes to
ensure that users have sufficient information to make informed economic decisions.

10. Currency

Transactions are recorded in the currency of the primary economic environment in which
the entity operates (the functional currency). Financial statements are presented in that
currency.

7. FINANCIAL REPORTING
7.1. Financial Statements
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addressing Financial Statements and Reporting Frequency in accordance with IFRS
principles:

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**7. FINANCIAL REPORTING**

**7.1. Financial Statements**

Financial statements are prepared in accordance with International Financial Reporting

Standards (IFRS) to provide a true and fair view of the financial position, performance, and
cash flows of the entity. The following statements are prepared annually:

- **Balance Sheet**: Presents the financial position of the entity at the end of the reporting
period, including assets, liabilities, and equity.

- **Income Statement**: Reports the financial performance of the entity for the reporting
period, detailing revenues, expenses, gains, and losses.
- **Statement of Changes in Equity**: Shows the changes in equity of the entity during the
reporting period, including comprehensive income and transactions with shareholders.

- **Cash Flow Statement**: Provides information about the cash flows of the entity during
the reporting period, classified into operating, investing, and financing activities.

Each financial statement is prepared consistently from period to period, unless a change is
required by an accounting standard or is deemed necessary for a better presentation of
financial information. The preparation of financial statements involves the exercise of
judgment, use of estimates, and consideration of materiality.

**7.2. Reporting Frequency**

Financial statements are prepared and reported annually, covering a period of twelve months
ending on December 31st. Interim financial reports are also prepared and published for the
six-month period ending June 30th, providing an update on the financial position and
performance of the entity midway through the fiscal year.

Reporting frequencies comply with regulatory requirements and internal policies. These
reports are reviewed by management and approved by the Board of Directors before
dissemination to stakeholders. The interim financial reports include condensed financial
statements and selected explanatory notes, focusing on material changes and events that have
occurred since the last annual reporting date.

This framework ensures that financial reporting is consistent, transparent, and meets the
informational needs of stakeholders in accordance with IFRS. Adjustments can be made
based on specific organizational requirements or additional regulatory considerations.
Statement of financial position

Statement of comprehensive Income Statement

Cash Flow Statement

Statement of Changes in Equity

7.2. Reporting Frequency

 7.3. Reporting Deadlines
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on Financial Reporting:

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**7.3. Reporting Deadlines**

Reporting deadlines ensure timely and accurate dissemination of financial information to

stakeholders. Adherence to these deadlines is crucial for maintaining transparency and
regulatory compliance. The following reporting deadlines are established:

- **Annual Financial Statements**: The annual financial statements, comprising the Balance
Sheet, Income Statement, Statement of Changes in Equity, and Cash Flow Statement, are
prepared within 90 days after the end of the financial year. This allows sufficient time for the
completion of year-end closing procedures, review by management, and approval by the
Board of Directors.

- **Interim Financial Reports**: Interim financial reports for the six-month period ending
June 30th are prepared within 45 days after the end of the reporting period. These reports
provide stakeholders with updated financial information and insights into the entity's
performance midway through the fiscal year.

- **Quarterly Financial Statements (if applicable)**: If required by regulatory authorities or

internal policies, quarterly financial statements are prepared within 30 days after the end of
each quarter. These statements typically include condensed financial information and relevant
disclosures to keep stakeholders informed about the entity's financial position and
performance throughout the year.

- **Other Reporting Requirements**: Additional reporting deadlines may apply for specific
disclosures or regulatory filings, such as tax filings, regulatory compliance reports, or
disclosures related to significant events or transactions.

Meeting these reporting deadlines involves coordination among finance, accounting, and
other relevant departments to ensure accuracy and completeness of financial information.
Any anticipated delays or challenges in meeting these deadlines are communicated promptly
to stakeholders along with the reasons and expected timelines for resolution.

---

These reporting deadlines ensure that financial information is timely, reliable, and compliant
with regulatory requirements, thereby enhancing trust and confidence among stakeholders.
Adjustments can be made based on specific organizational needs or regulatory changes
affecting reporting timelines.

8. REVENUE RECOGNITION
 6.1. Criteria for Revenue Recognition

6.2. Timing of Revenue Recognition

6.3. Deferred Revenue

6.4. Uncollectible Accounts

Certainly! Here’s a structured approach to include these sections on Revenue Recognition in
your accounting manual, focusing on criteria, timing, deferred revenue, and uncollectible
accounts:

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**8. REVENUE RECOGNITION**

**8.1. Criteria for Revenue Recognition**

Revenue is recognized when it is probable that economic benefits will flow to the entity and
the revenue can be reliably measured. The following specific criteria are applied based on
International Financial Reporting Standards (IFRS):

- **Sale of Goods**: Revenue from the sale of goods is recognized when the significant risks
and rewards of ownership have transferred to the buyer, usually at the time of delivery.

- **Rendering of Services**: Revenue from services is recognized as the services are

performed, either by a proportionate completion method or when specific milestones are
achieved, depending on the nature of the services.

- **Interest, Royalties, and Dividends**: Revenue from interest, royalties, and dividends is
recognized when it is probable that the economic benefits will flow to the entity and the
amount of revenue can be reliably measured.

**8.2. Timing of Revenue Recognition**

Revenue is recognized when it is earned, usually at the point of delivery of goods or

completion of services, regardless of when payment is received. For long-term contracts or
contracts with multiple deliverables, revenue may be recognized over time using appropriate
methods to reflect the entity's performance and obligations under the contract.

**8.3. Deferred Revenue**

Deferred revenue represents amounts received from customers for goods or services that have
not yet been delivered or performed. It is recognized as a liability until the revenue
recognition criteria are met. Deferred revenue is gradually recognized as revenue when the
related goods are delivered or services are performed.

**8.4. Uncollectible Accounts**

Uncollectible accounts, or bad debts, arise when customers are unable to pay their obligations
to the entity. Provisions for uncollectible accounts are made based on historical experience,
creditworthiness of customers, and other relevant factors. The allowance for doubtful debts is
adjusted periodically to reflect changes in circumstances and the aging of receivables.

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By adhering to these guidelines for revenue recognition, we ensure that financial statements
accurately reflect the timing and nature of revenue earned, enhancing transparency and
reliability for stakeholders. Adjustments can be made based on specific industry practices or
regulatory requirements impacting revenue recognition policies.

9. EXPENSE RECOGNITION
9.1. Criteria for Expense Recognition

9.2. Matching Principle

9.3. Prepaid Expenses

9.4. Depreciation and Amortization Policies

Certainly! Here’s a structured approach to include sections on Expense Recognition in your
accounting manual, covering criteria, the matching principle, prepaid expenses, and
depreciation and amortization policies:

---

**9. EXPENSE RECOGNITION**

**9.1. Criteria for Expense Recognition**

Expenses are recognized in the accounting period in which the related costs are incurred and
when it is probable that economic benefits associated with the costs will flow out from the
entity. The following criteria are applied based on International Financial Reporting
Standards (IFRS):

- **Cost Incurred**: Expenses are recognized when goods or services are received, or when
obligations are incurred, regardless of when cash payments are made.

- **Matching Principle**: Expenses are matched with revenues earned during the accounting
period. This principle ensures that the costs associated with generating revenue are
recognized in the same period as the revenue they helped generate.

**9.2. Matching Principle**

The matching principle dictates that expenses should be recognized in the same period as the
revenues to which they relate. This principle ensures that the financial statements accurately
reflect the profitability of the entity for a given period. It involves:

- **Direct Matching**: Directly matching costs incurred in producing goods or services with
the revenues generated from those goods or services.

- **Period Costs**: Recognizing other expenses, such as administrative expenses and selling
expenses, in the period they are incurred, regardless of when cash payments are made.

**9.3. Prepaid Expenses**

Prepaid expenses represent payments made for goods or services that are to be received in
future accounting periods. These are initially recorded as assets and recognized as expenses
when the related goods are consumed or services are received.

**9.4. Depreciation and Amortization Policies**

Depreciation and amortization policies are applied to allocate the cost of tangible assets
(depreciation) and intangible assets (amortization) over their useful lives. Key policies
include:

- **Methodology**: Choosing an appropriate depreciation or amortization method (e.g.,

straight-line, reducing balance) based on the asset's expected pattern of economic benefits.

- **Useful Life**: Estimating the asset's useful life and reassessing it regularly to reflect
changes in circumstances or technological advancements.

- **Residual Value**: Considering the residual value of the asset at the end of its useful life,
if significant, in determining the depreciable amount.

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 10. ASSET MANAGEMENT
8.1. Capitalization Policy
Capitalization Threshold

8.2. Fixed Assets

Acquisition

Depreciation Methods

Disposal

8.3. Inventory Management

Inventory Valuation Methods (FIFO, LIFO, Weighted Average)

Inventory Count Procedures

8.4. Asset Impairment

Certainly! Here’s a structured approach to include sections on Asset Management in your
accounting manual, covering capitalization policy, fixed assets, inventory management, and
asset impairment:

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**10. ASSET MANAGEMENT**

**10.1. Capitalization Policy**

**Capitalization Threshold**

The capitalization policy establishes the threshold above which expenditures are capitalized
as assets rather than expensed immediately. Capitalization thresholds are set based on
materiality and typically reflect significant costs that provide future economic benefits. As
per our policy:
- Expenditures equal to or exceeding [specific threshold amount] are capitalized and recorded
as assets.
- Expenditures below the threshold are expensed in the period incurred.

**10.2. Fixed Assets**

**Acquisition**

Fixed assets are initially recognized at cost, including all directly attributable costs necessary
to bring the asset to its intended use. This includes purchase price, import duties, taxes, and
any directly attributable costs of preparing the asset for its intended use.

**Depreciation Methods**

Depreciation is systematically allocated over the useful life of each asset using the straight-
line method. The useful lives and residual values of assets are reviewed annually and adjusted
if necessary.

**Disposal**

Disposals of fixed assets are recognized when the asset is derecognized from the books. The
difference between the net disposal proceeds and the carrying amount of the asset is
recognized in profit or loss.

**10.3. Inventory Management**

**Inventory Valuation Methods (FIFO, LIFO, Weighted Average)**

Inventory is valued at the lower of cost and net realizable value. Cost is determined using the
FIFO (First-In, First-Out) method for raw materials and weighted average cost for finished
goods.

**Inventory Count Procedures**

Inventory counts are conducted on a [regular basis, e.g., quarterly] to ensure accuracy.
Procedures include physical counts of inventory on hand, reconciliation to the general ledger,
and investigation of any discrepancies.

**10.4. Asset Impairment**

Assets are reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount may not be recoverable. Impairment losses are recognized when the
carrying amount of an asset exceeds its recoverable amount.
 11. LIABILITIES AND EQUITY
Recognition of Liabilities

Accrued Expenses

Debt Management

Equity Transactions
Issuance of Shares

Dividend Policy

12. INTERNAL CONTROLS

Internal Control is the system of checks and balances, operated in the
organization to ensure that assets are secured and accounted for, the
risk of fraud is minimized, and the accounting system is operated in
such a way as to ensure the accuracy and truthfulness of the
accounting records and the resulting financial statements and reports.

The following are the key internal control objectives for PANOS:

1. Ensure that all grants are received and properly recorded, and that
compliance with the terms of any related restrictions is adequately
monitored.

2. Ensure that expenditures comply with grant conditions.

3. Budgets are carefully monitored.

4. Executive Director approves all activity.

5. Ensure that controls are effective at all times in lieu of external audit.

6. Accounting records are to be maintained for each project and be

available to donors when requested.
 7. Donor request for access to accounting records must be
communicated through the Executive Director.

8. Each month the RDFA and Executive Director should review bank
reconciliations, schedules of accounts receivable and the aging of
accounts payable, executed contracts and budgets, to support the
balances shown on the balance sheet and income statement as follows:

a. Cash accounts- these balances should agree with the balances

shown on the bank reconciliations for each month. Petty cash the
balance in this account should always equal the maximum amount of
all petty cash funds. b. Grants and contribution receivable- these
amounts should agree to donor reconciliation schedules

c. Other assets- these amounts in these accounts should equal

advance payments paid to vendors or third parties at the end of the
accounting period.

d. Property and equipment- these amounts in this account should equal

the totals in the detailed asset register when additional purchases are
made.

e. Deferred revenue- these amounts should agree to donor

reconciliation statements.

f. other payables- these amounts should agree to donors and vendor

schedules

g. Restricted and unrestricted funds- these amounts should agree to

the executed contracts or budgets.

h. Income and expenses- The amounts charged to the various cash

accounts should be reconciled with funding requests, funders reports,
draw down schedules, budgets and contracts.

Segregation of Duties

Authorization and Approval Processes

Reconciliation Procedures

Internal Audit Procedures

13. AUDITS AND REVIEWS

13.1. Internal Audit
Objectives

Procedures

13.2. External Audit

Requirements

Interaction with External Auditors

13.3. Audit Follow-Up

14. RECORD KEEPING

14.1. Documentation Standards

14.2. Retention Periods

14.3. Security and Confidentiality of Records

 15. CASH MANAGEMENT
15.1. Cash Handling Procedures

15.2. Bank Reconciliations

Bank reconciliation involves agreeing the balance of cash as shown by the
bank statement(s), with that as shown by the cash book(s). It is to be
prepared at the beginning of each month, on the bank balance and cash
book(s) balance as at the end of the previous month. It is important that
all transactions contributing to any difference between the two balances
are identified, and where necessary remedial action is taken. 1.
Administrative Assistants in each location has the responsibility to ensure
that all bank statements received are remitted promptly to the RDFA. The
RDFA reviews the statements for unusual balances and/or transactions. 2.
The RDFA review the contents for inconsistent check numbers, signatures,
cash balances and payees and endorsements at a minimum. After this
cursory review is conducted, the official should initial and date the
bottom, right hand corner of the first page of each bank statement
reviewed. 3. The reviewed bank statement should then be forwarded to
the Administrative Assistant (an individual without check signing rights) to
reconcile the bank accounts using the reconciling feature in the
accounting software. 4. The Administrative Assistant should reconcile each
account promptly upon receipt of the bank statements, no later than 7
days after receipt. In the event it is not possible to reconcile the bank
statement the RDFA and the Executive Director should be notified by a
written memo. 5. The Administrative Assistant will check off the bank
statement entries with the cashbook within the Accounting software,
entries appearing on the bank statement which are not shown in the cash
book should be investigated, and if correct should be immediately entered
into the cash book such as bank charges, gross interest income and
withholding tax.
5. When reconciling the bank accounts, the following should be done: o A
comparison of dates and amounts of daily deposits as shown on the
bank statements with the deposits in the cashbook.
o A comparison of inter-organization bank transfers to be certain that
both sides of the transactions have been recorded on the books. o An
investigation of items rejected by the bank, i.e., returned checks or
deposits. o A comparison of wire transfers dates received with dates
sent. o A comparison of canceled checks with the disbursement journal
as to check number, payee and amount. o An accounting for the
sequence of checks both from month to month and within a month.

6. When reconciling the bank accounts, the following should be done

cont’d: o An examination of canceled checks for authorized signatures,
irregular endorsements, and alterations. o A review and proper mutilation
of void check. o Investigate and write off and deposits which have been
outstanding for more than six months. 7. After completing the bank
reconciliation the Administrative Assistant will scan the applicable bank
statement, along with all documentation to the accounting system. 8. The
Administrative Assistant will notify the RDFA via email that bank
reconciliations have been completed. 9. The RDFA will review and approve
bank reconciliations 10. The RDFA will include bank reconciliations in the
monthly report to the Executive Directo

15.3. Petty Cash Policy

Petty cash funds are maintained by the organization. The funds are to be
used for miscellaneous or unexpected purchases and the same approval
procedures apply as mentioned in the disbursement section. 1. The petty
cash fund should never exceed US$300 or its equivalent. 2. The
Administrative Assistant is the custodian of the petty cash fund. 3. A
single disbursement of petty cash shall never exceed US$50 or its
equivalent. 4. When a request for petty cash is made to the Administrative
Assistant, the item will be logged on a petty cash voucher. A description of
the item should be recorded together with the amount on the petty cash
voucher.
5. A vendor receipt must be received by the Administrative Assistant for
the amount of the petty cash request in order for the request to be
approved.
6. The recipient of the petty cash funds must sign the petty cash voucher
to indicate receipt of the funds. The paid receipt should be attached to the
petty cash voucher.
7. All receipts paid should remain in the locked petty cash box until it is
time to replenish the fund. At that time, the petty cash vouchers and
associated receipts are attached to the cheque requisition form and the
Petty Cash reconciliation Sheet. (This sheet reconcilies cash used plus
cash on hand with the float – see annex for form).
8. When the petty cash requisition is submitted for replenishment the
petty cash reconciliation sheet should indicate the total amount needed to
replenish the fund.
9. The Administrative Assistant should update the accounting system
weekly with all disbursements and fund should reconcile to the general
ledger
10. Also, a petty cash report from the accounting system listing the
various expense accounts being charged and the amount charged to each
account should accompany the check requisition.
11. The petty cash box is to be locked at all times when the Administrative
Assistant is not disbursing or replenishing the fund.
12. At least once annually, the Executive Director or RDFA should conduct
a "surprise" review of the fund. When this is done, he/she should count,
while the Administrative Assistant is in attendance, the total monies on
hand and the total amount of receipts in the petty cash box. The two
amounts should equal exactlyUS$300 or its equivalent. Any discrepancies
should be discussed and resolved immediately.
13. It is a policy of Panos not to cash cheques of any kind through the
petty cash fund.
16. PAYROLL ACCOUNTING
16.1. Payroll Processing

16.2. Employee Benefits

16.3. Taxes and Deductions

17. TAXATION
17.1. Tax Compliance

17.2. Filing Requirements

17.3. Tax Planning and Strategy

18. BUDGETING AND FORECASTING

18.1. Budget Preparation

18.2. Variance Analysis

 18.3. Forecasting Techniques

19. COMPLIANCE AND ETHICS

19.1. Legal and Regulatory Compliance

19.2. Ethical Standards and Conduct

19.3. Fraud Prevention and Detection

20. POLICY REVIEW AND UPDATES

20.1. Periodic Review Process

20.2. Procedure for Updating the Manual

20.3. Approval and Implementation

APPENDICES
Glossary of Terms
Sample Forms and Templates
Contact Information for Accounting Department