MINISTR Y OF W ATE R AND IR RIGA TION
WATER SERVICES TRUST FUND FINANCIAL MANAGEMENT SYSTEMS MANUAL - DRAFT
FEBRUARY 2005
PWC
TABLE OF CONTENTS
Page
1
2
3
4 5
6
7
8
9
Introduction .................................................................................................................1 1.1 Background.........................................................................................................1 1.2 Purpose of the Financial Management Systems Manual (FMSM) ............1 1.3 Structure of the Financial Management Systems Manual ..........................1 Financial Regulations and Policies......................................................................5 2.1 Financial regulations .........................................................................................5 2.2 Objectives of the accounting and reporting systems ...................................5 2.3 Significant accounting policies .........................................................................5 2.4 Policies ................................................................................................................5 Reporting, Structure of Accounts and Analysis Codes..................................8 3.1 Purpose...............................................................................................................8 3.2 Reports and data analysis requirements .......................................................8 3.3 Chart of accounts .............................................................................................11 Systems – to be inserted once Financial Management System is selected......................................................................................................................13 Budget Preparation Procedures..........................................................................14 5.1 Budget preparation procedures.....................................................................14 5.2 Annual estimates .............................................................................................14 5.3 Data Flow Diagram ..........................................................................................16 Cash Management...................................................................................................20 6.1 Purpose.............................................................................................................20 6.2 Receipt of money and recording of funds....................................................20 6.3 Payment procedures .......................................................................................20 6.4 Authorisation of payment for goods, works and services ..........................21 6.5 Bank and banking arrangements ..................................................................21 6.6 Cash flow forecast and investment of excess funds ..................................22 6.7 Data Flow Diagram (DFD) and Data Processing Instructions (DPI) ........23 Petty Cash Control Procedures...........................................................................28 7.1 Purpose.............................................................................................................28 7.2 Policy .................................................................................................................28 7.3 Description ........................................................................................................28 Travel and Activity Imprests.................................................................................34 8.1 Purpose.............................................................................................................34 8.2 Policy .................................................................................................................34 8.3 In country- out of station allowance ..............................................................34 8.4 Out of country subsistence allowance..........................................................34 8.5 Application for travels and activities imprests .............................................34 Payroll Procedures..................................................................................................39 9.1 Purpose.............................................................................................................39
10
11
9.2 Policy .................................................................................................................39 9.3 Description ........................................................................................................40 Fixed Assets System..............................................................................................43 10.1 Purpose.............................................................................................................43 10.2 Policy .................................................................................................................43 10.3 Data Flow Diagram (DFD)..............................................................................45 WSTF Accounting and Reporting Procedures................................................50 11.1 WSTF accounting policies ..............................................................................50 11.2 Reporting and data analysis requirements ..................................................50 11.3 Reports from benefic iaries and preparation of consolidated reports .......53 11.4 Project auditing arrangements .......................................................................53
APPENDIX 1: Structure of Accounts............................................................................54 APPENDIX 2: Accounting Forms ..................................................................................58 APPENDIX 3: Reporting Forms .....................................................................................71
List of Abbreviations and Acronyms CB CBO CEO CV FMSM GoK GRN LPO MTEF MWI NGO PCV PS PV WSTF
Cas h Book Community Based Organisation Chief Executive Officer Curriculum Vitae Financial Management Systems Manual Government of Kenya Goods Received Note Local Purchase Order Medium Term Expenditure Framework Ministry of Water and Irrigation Non-Governmental Organisation Petty Cash Voucher Permanent Secretary Payment Voucher Water Services Trust Fund
PricewaterhouseCoopers Financial Management Manual (Draft)
Water Services Trust Fund
1
1 Introduction 1.1
Background The Water Services Trust Fund (WSTF) was set up under The Water Act 2002 as a mechanism for financing the provision of water and sanitation services to inadequately served areas. WSTF will manage funds received from the Government of Kenya (GoK), donations, grants and bequests from sources as outlined in the Act. The objectives for which the Trust Fund was formed are: •
Providing financing and other support towards capital investment costs of providing water services to communities without adequate water services; Capacity building activities and projects which enable communities to plan, implement, manage, operate and sustain water services; The creation of awareness and dissemination of information regarding community management of water services; and Active community participation in the implementation and management of water services.
•
Providing a mechanism for managing funding systems whose objective is to fund activities within the Water sector generally as may from time to time be assigned to it to manage.
1.2
Purpose of the Financial Management Systems Manual (FMSM) The p urpose of this manual is to provide a comprehensive documentation of the WSTF’s accounting and reporting procedures. It will be used as follows: •
as a training resource for staff either new or redeployed to the WSTF
•
as reference material by existing staff in performance of financial management tasks
•
by management and trustees of the WSTF in ensuring compliance with WSTF financial management policies and procedures
•
by auditors, consultants and development partners who want to understand and/or evaluate WSTF’s financial management systems
1.3
Structure of the Financial Management Systems Manual The Financial Management Systems Manual (FMSM) is organised under three main sections as follows:
1.3.1
l
The introduction
l
Procedures and documentation
l
Appendices
Procedures documentation The procedures are grouped into a number of sections. In each section the following is provided:
PricewaterhouseCoopers Financial Management Manual (Draft)
Water Services Trust Fund
1
1.3.2
l
Purpose of the procedure and significant policy statements (where applicable)
l
Description of the procedure
l
Data flow diagrams and detailed instructions for the procedure
Appendices The appendices to the Financial Management Systems Manual include:
1.3.3
l
Accounts Structure
l
Accounting forms
l
Sample of Financial Reporting Forms
Flowchart Symbols Used
Connector
Process
Document
Decision
Computer Interface
Printer
File
PricewaterhouseCoopers Financial Management Manual (Draft)
Water Services Trust Fund
2
1.3.4
How to use the manual The manual is organised in sections of specific relevance to minimise the need for reference. For example, staff concerned with imprests may need only to read that section, while the finance staff may need to read the whole manual.
1.3.5
How to maintain the manual The Finance Manager will be directly responsible for the update of this FMSM. However, all users may initiate improvement and changes. The FM will be responsible for ensuring that:
1.3.6
l
Amendments to the manual are properly authorised and controlled
l
The manual is kept up to date
l
Sufficient copies are appropriately distributed in a timely manner.
l
A change to the procedures manual could be prompted by: −
A change to existing procedures
−
A deletion of existing procedure
−
Addition of new or previously omitted procedure.
Distribution of the manual A record of the holders of the manual showing the holder and the number of the manual shall be maintained.
1.3.7
Financial management and reporting The principal sources of funding to WSTF are the Government of Kenya (GOK), development partners and other funding agencies and individuals. These sources have varying reporting requirements, all of which have to be met if maximum co-operation from all stakeholders is to be sustained. To achieve this reporting WSTF has developed financial management systems manual to capture transactions at all levels. The accounting system is central and flexible enough to meet GOK and other development partners accounting and reporting requirements. For the efficient conduct of the affairs of the WSTF the finance function will be organised as shown below:
PricewaterhouseCoopers Financial Management Manual (Draft)
Water Services Trust Fund
3
Basic organogram of the finance function
CEO
Finance Manager
Financial Accountant
Management Accountant
Procurement Officer
Internal Auditor
Assistant Accountant / Cashier
The Finance Department headed by a Finance Manager supported by accountants provides regular financial management skills support to implementing bodies. It is responsible for financial reporting and finance mobilization strategies. The Finance Department also supports the implementing institutions in their strategy formulation, planning and budgeting. It is also be responsible for all the WSTF financial operations and management and cash flow forecasts that will be used for request for disbursement from development partners and other contributors to WSTF.
PricewaterhouseCoopers Financial Management Manual (Draft)
Water Services Trust Fund
4
2 Financial Regulations and Policies 2.1
Financial regulations The FMSM addresses the following GoK regulations:
i.
WSTF will be guided by the Trustees Act of the Laws of Kenya
ii.
WSTF will strictly adhere to the requirements of the Public Audit Act, 2003 and the Exchequer and Audit Act (CAP, 412), Laws of Kenya;
iii.
The Financial Year of the Fund shall be the period of twelve months commencing 1 st July to 30th June of the following year;
2.2
Objectives of the accounting and reporting systems The objectives of WSTF FMSM procedures are to:
2.3
•
Provide accurate, complete, reliable and timely financial information to management to facilitate informed and timely decision-making
•
Ensure effective control and security, and efficient utilisation of resources
•
Provide reports to the GoK, donors and other stakeholders in accordance with agreed content, format and reporting period
Significant accounting policies WSTF will observe accounting practices acceptable to the Government of Kenya and where appropriate, specific accounting policies and reporting requirements as set out in the Memorandum of Understanding between the Trustees and the Donors. It is a going concern that will report its activities and financial transactions over specified periods on the basis of generally accepted accounting practices. These will be modified as appropriate to address the requirements of the GoK and development partners.
2.4 2.4.1
Policies Historical cost Transactions shall be recorded at historical cost i.e. the exchange price on the date of the transaction.
PricewaterhouseCoopers Financial Management Manual (Draft)
Water Services Trust Fund
5
2.4.2
Modified accrual accounting Under the accrual concept revenue is recognized when earned and expenditure when incurred. WSTF will apply this principle as follows: Revenue recognition Revenue is recognized when funds are received both from the Government, other donors and other sources. Expenditure recognition Expenses will be recognised when incurred even though payment may not have been made.
2.4.3
Consistency Consistent accounting methods will be applied and changes made will be reported and the effect on reported results disclosed in accordance with Generally Accepted Accounting Principles (GAAP).
2.4.4
Foreign currency transactions The accounts of WSTF will be maintained in Kenya Shillings. Transactions denominated in foreign currency will be converted into Kenya Shillings as follows:
2.4.5
•
transactions, including grants and donations received, which are expressed or denominated in a foreign currency will be converted into Kenya Shillings at the market exchange rate prevailing at the date of each transaction,
•
foreign currency assets and liabilities will be converted into Kenya Shillings at the exchange rates prevailing at the balance sheet date, and
•
exchange differences arising from the conversion of foreign currency balances will be dealt with through the income and expenditure statement.
Reporting in foreign currencies Financial statements may be translated into a relevant foreign currency for donors who require such reports.
PricewaterhouseCoopers Financial Management Manual (Draft)
Water Services Trust Fund
6
In this case:
2.4.6
•
transactions and balances which are denominated in foreign currency or expressed in foreign currency shall be shown in the relevant foreign currency.
•
all other income and expenditure in Kenya Shillings should be translated into the relevant foreign currency using the average exchange rate obtained from the exchange of the foreign currency during the period, and
•
all assets and liabilities will be translated into the relevant foreign currency at the exchange rate prevailing as at the balance sheet date or reporting period.
Fixed Assets Fixed assets are defined as all tangible assets with a life of three years or more and having a minimum value of Kshs 50,000 either individually or collectively. This may be reviewed and revised by Management as necessary. Fixed Assets will be capitalised, inventoried and controlled individually by assigning tag numbers and maintaining a detailed register combined with periodical physical checks.
2.4.7
Depreciation The straight-line depreciation method will be used. This will allocate the cost of the depreciable asset uniformly over its expected useful life. The annual depreciation will be based on the full acquisition cost of the depreciable asset, net of its salvage value, as applicable. The rate will apply from the year of acquisition until it is disposed of/written off or until it is fully depreciated, whichever occurs first.
A set of office furniture purchased at a single point in time should be considered an asset for depreciation, even if individual items cost less than the minimum value for categorisation as an asset. 2.4.8
Stocks and stores (inventories) Stocks will be valued at the lower of cost or net realisable value. Cost will comprise expenditure incurred in the ac quisition of these items. Items in the stores will be tagged and their usage controlled through the use of store movement cards.
2.4.9
Funds disbursed to Projects Funds disbursed to various water projects will be recorded as payments in WSTF accounting records. These payments will however need to be fully accounted for and supported with expenditure and project reports.
PricewaterhouseCoopers Financial Management Manual (Draft)
Water Services Trust Fund
7
3 Reporting, Structure of Accounts and Analysis Codes 3.1
Purpose The purpose of the structure of accounts or a chart of accounts and analysis codes is to provide a framework for capturing and grouping data in a manner that will facilitate generation of the required reports. Its design depends on: •
The reporting requirements of the organization
•
The accounting software on which the systems are based.
Below are the main procedures in the maintenance of the structure of accounts.
3.2
Reports and data analysis requirements Formats of the required financial reports and management reports are provided in Appendix 3. To efficiently produce these reports, the accounting transactions need to be analysed in a number of ways, including: •
Expenditure categories and sub-categories
•
Components and activities
•
Source of funds
•
Geographical location of projects
•
Time frame – date and periods
•
Cost centres
•
Specific technology applied in water supply interventions
These dimensions of analysis are captured by a combination of both account and analysis codes. Brief descriptions of these dimensions are provided below. 3.2.1
Dimension 1: Expenditure categories and sub-categories The expenditure categories for the WSTF will follow categories that will assist management control expenditure. The main groups are as follows:
PricewaterhouseCoopers Financial Management Manual (Draft)
Water Services Trust Fund
8
The following will be the 3 main expenditure categories, from which other sub -categories may follow: •
Office Expenses
•
Disbursements to Projects
•
Project Management and Capacity Building Expenses
Office Expenses: These would include those costs specifically incurred at the head office or any other WSTF offices and arising from office operations. A number of these expenditure sub-categories would include: • • • • • • • • • • • • • •
Personnel emoluments Motor Vehicle Expenses Travel and Accommodation Utilities Telephone and Postal Expenses Insurance (Non -Motor) Board Expenses Office Running Expenses Staff Training Costs Staff Expenses Consultancies Advoca cy and Advertising Printing and Stationery Bank Charges
Disbursements to Projects These are those funds disbursed to projects which have been approved based on procedures outlined in the WSTF Operations Manual. Projects receiving funds will then be grouped into the following sub-categories based on the nature of the intervention: •
Water Supply Systems – including piped-gravity and piped-pumping schemes, open ducts, boreholes, shallow wells, rain water harvesting (rain water catchment), dams, pans etc
•
Sanitation and Hygiene Promotion
•
Training and Capacity Building
PricewaterhouseCoopers Financial Management Manual (Draft)
Water Services Trust Fund
9
Project Management and Capacity Building This category includes expenses incurred in supervision and co -ordination of implementation of projects which are ongoing at project sites. As the funded projects are envisioned to be demand driven, these expenses will be those incurred in backstopping by technical staff from the head office and would include:
3.2.2
•
Travel and Accommodation
•
Vehicle running and maintenance costs
•
Printing, photocopy and stationery
•
Consultancy services for 3 parties to carry out the supervision and co-ordination activities where deemed appropriate by WSTF management
rd
Dimension 2: Components and activities WSTF was formed for the purpose of providing financing and other support towards the capital investment costs of providing water services to communities without adequate water services and to provide a mechanism for managing funding systems whose objective is to fund activities within the water sector.
The key components and priority areas that WSTF will be engaged in seeking to fulfil the above objectives will include; • • •
Promotion of Water Supply Systems Promotion of Sanitation and Hygiene Training and Capacity Building
The accounting system will have the ability to generate reports showing expenditure per component and priority area. 3.2.3
Dimension 3: Source of funds Data may be analysed by the funding source at the transaction entry level to facilitate reporting by financier. Financiers include GOK and other donors or funding agencies.
3.2.4
Dimension 4: Geographic location of projects Reports produced should enable management assess expenditure by geographic areas and by number of beneficiaries in those locations. Geographic locations may refer to Administrative Regions following from the various Water Service Boards or to Climatic Regions, with areas classified as either, Arid and Semi- Arid Lands (ASAL), High, Medium or Low potential. This will help management identify the cost per beneficiary served in different geographic locations.
PricewaterhouseCoopers Financial Management Manual (Draft)
Water Services Trust Fund
10
3.2.5
Dim ension 5: Timeframe Management reporting will be on a quarterly basis. Data will be analysed by date at the transaction entry level to facilitate generation of reports for various periods, including daily, weekly, monthly etc.
3.2.6
Dimension 6: WSTF units and cost centres Data will be analyzed by WSTF Units and Cost Centres, which include: • • • • • • • •
Finance & Resource Mobilization Department Technical Appraisal Department – Nairobi , Central, Coast and Northern Technical Appraisal Department – Lake Victoria North, Lake Victoria South, Rift Valley Field Co-ordination Department Administration and Human Resources Department Sanitation and Hygiene Institutional Development CEO
The heads of different departments will be the budget holders for their respective departments / cost centres.
3.3
Chart of accounts The design of a chart of accounts normally depends on: •
The reporting requirements
•
Data analysis and reporting compatibility of the accounting software on which it is based.
To meet the identified reporting requirements, the project accounting software will have a strong data analysis capability and a flexible report generator. Based on the reporting requirements and operations of the WSTF, the account code will have segments as outlined below. A more detailed illustration of the Accounts Structure is provided in Appendix 1.
The first segment will identify the Account Type as follows: 100000 200000 300000 400000 500000 600000
for income accounts for expenditure accounts for assets for liabilities for capital accounts clearing account
PricewaterhouseCoopers Financial Management Manual (Draft)
Water Services Trust Fund
11
The second segment will identify the Primary Expenditure Groups as follows: 10000 20000 30000
for Office Expenses for Funds Disbursed to Projects for Project Management and Capacity Building
The third segment will be the Cost Centre. These w ould include 1000 2000 3000 4000 5000 6000 7000
Finance & Resource Mobilization Department Technical Appraisal Department – Nairobi, Central, Coast and Northern Technical Appraisal Department – Lake Victoria North, Lake Victoria South, Rift Valley Field Co-ordination Department Administration and Human Resources Department Sanitation and Hygiene Department CEO
The fourth segment will identify the priority intervention areas. These include: 100 200 300 400 500 600 700
Ground Water Distribution Surface Water Distribution Rainwater Harvesting Transmission Systems Point Sources Promotion of Sanitation and Hygiene Training and Capacity Building
The fifth segment is the main account code. For Instance: 10 20 30
Printing, photocopy and stationery Travel and accommodation Vehicle running and maintenance costs
PricewaterhouseCoopers Financial Management Manual (Draft)
Water Services Trust Fund
12
4 Systems – to be inserted once Financial Management System is selected
PricewaterhouseCoopers Financial Management Manual (Draft)
Water Services Trust Fund
13
5 Budget Preparation Procedures 5.1
Budget preparation procedures WSTF has a role in the wider budget process through the influence of resource allocation to key priority areas and activities carried out by various stakeholders. WSTF will prepare its annual and quarterly budgets in accordance with the requirements of Government of Kenya. The Government of Kenya budget is prepared in the three-year rolling Medium Term Expenditure Framework (MTEF). The MTEF provides a link between budgetary allocations and specific measures /activities geared towards fulfilling the overall objective or theme of the budget.
5.2
Annual estimates As outlined in section 3.2.1, WSTF will have 3 key types of expenditure, Offices Expenses; Funds Disbursed to Projects and Project Management and Capacity Building Expenses. Head Office Expenses which will include personnel emoluments and office operation costs will be categorised as recurrent expenditure while funds disbursed to projects, project management and capacity building expenses will be categorised as development expenditure. Annual estimates for the WSTF will then be prepared in accordance with Treasury circulars.
5.2.1
Recurrent expenditure estimates for WSTF These will be prepared by the various cost centre heads in consultation with the WSTF Finance and Resource Mobilisation Department. These estimates will be reviewed and approved by the CEO and Trustees and will then be forwarded to the Ministry of Water and Irrigation. These estimates will be prepared in line with the guidelines of the State Corporations Act CAP 446 and The Report of the Inter-Ministerial Task Force on The Delinking of the Water State Corporations of August 2004. The submissions are scrutinised in line with the recurrent ceiling of the ministry and the resource envelope to the Trust Fund. Monitoring and Evaluation of the annual budget shall be done to rationalize further the available resources for different activities. It also acts as a remedy / check to over-expenditures and under-expenditures in the budgeting process.
5.2.2
Development expenditure estimates for WSTF WSTF will prepare annual development expenditure budgets guided by the objectives it sets out in its Strategic Plans which will typically be based on a time frame of 3 to 5 years. Based on the identified priority technologies to be employed per geographic area, the intended number of people to be served and costs per beneficiary per identified technology to be applied per geographic area, annual development expenditure estimates may then be generated. The development expenditure budgets prepared in this way will assist the WSTF in resource planning.
PricewaterhouseCoopers Financial Management Manual (Draft)
Water Services Trust Fund
14
For control purposes and expense rationalisation, Project Management and Capacity Building expenses will be computed as a percentage of funds to be disbursed to projects. Depending on the geographical location of the project and technology applied for water supply and sanitation delivery this percentage will vary. WSTF will develop rates following an outline as per the table below to assist it in budgeting.
Region
Ground Water
Surface Water
Rainwater
Transmission
Point
Sanitation
Training
Distribution
Distribution
Harvesting
Systems
Sources
and Hygiene
and Cap Bldg
Central Coast L. Victoria N L. Victoria S Nairobi Northern Rift Valley
It is also recognised that WSTF may receive funds in an ad-hoc manner not necessarily following its calendar year. As this is likely to be a key method of funds receipt, WSTF budget preparation processes should be flexible enough to adapt accordingly and assist management with human and financial resource planning. Funds will typically be received in two ways: Funds allocated to specific projects; funds received and placed in the WSTF expenditure pool. Besides affecting human resource planning for monitoring, evaluation and technical support, specifically funded projects are not expected to have a major impact on the WSTF annual budgeting process.
Actual funding for disbursement to projects received for the year may differ from that projected based on firm commitments earlier received. The grading of project funding applications should be flexibl e enough to ensure that funding is then disbursed based on a rational system taking into account the ranking given to the application and geographic location of the project such as to fairly allocate funds to more projects if the funds actually received are higher than the commitments made and to fairly exclude projects if the funds received are less than the commitments made.
Development expenditure estimates will be prepared by activity and type as per the necessary work plans received from the various p rojects. These must be approved by the respective water Service Boards otherwise the Trustees will approve the projects where the Water Service Boards are not yet operational.
PricewaterhouseCoopers Financial Management Manual (Draft)
Water Services Trust Fund
15
5.3
Data Flow Diagram The procedures are provided in detail below.
WSTF Budgeting Preparation Procedures – Recurrent Expenditure Process Flow
1.
2.
3.
Departments / Cost Centres to prepare work plans for the year in consultation with Finance Manager
Annual Work plans and expenditure estimates submitted to the Finance Manager
Finance manager to consolidate the various work plans and expenditure estimates
Procedure Steps 1.
2.
3.
Responsibility
Staff within the various departments contribute towards the generation of annual expenditure estimates based on their annual work plans
Heads of Departments
The department / cost centre heads submit their expenditure estimates to the finance manager
Heads of Departments
Finance manager to consolidate expenditure estimates from the various departments
Finance Manager
Consolidated organisational-wide annual recurrent expenditure estimate
4.
Organisation- wide expenditure estimates forwarded to CEO and Trustees for review and approval
4.
Finance manager to forward the consolidated organisational - wide expenditure estimate to the CEO and Trustees for review and approval
• • •
Finance Manager CEO Trustees
To 5
PricewaterhouseCoopers Financial Management Manual (Draft)
Water Services Trust Fund
16
WSTF Budgeting Preparation Procedures – Recurrent Expenditure Process Flow
Procedure Steps
Responsibility
5. The approved annual budget is then forwarded to the PS MWI for approval
• •
From 4
Approved Annual Organisation-wide Recurrent Expenditure Estimates
5.
Approved Annual Recurrent Expenditure Estimates forwarded to PS MWI for approval
CEO WSTF Chairperson WSTF
Approved Annual Recurrent Expenditure Estimates / Budget
File Copy
PricewaterhouseCoopers Financial Management Manual (Draft)
Finance Manager, CEO
Water Services Trust Fund
17
WSTF Budgeting Preparation Procedures – Development Expenditure Process Flow
Procedure Steps
Responsibility
1. The total number of the target population for the year is identified from the objectives outlined in the Strategic Plan.
Department Heads, Finance Manager
2. The target population is divided into geographic areas based both on administrative regions and climatic conditions.
Department Heads, Finance Manager
WSTF Strategic Plan
1.
2.
3.
4.
5.
6.
Total No. of Target Population Identified
Target Population divided into Geographic Regions
Per Capita Service Cost Rates applied to Target Population
1st Draft Development Expenditure Budget Developed
1st Draft Development Expenditure Budget
1st draft circulated and discussed
1st draft forwarded to trustees for review and approval
3. A per capita service cost rate is applied to the targeted population per geographic location. A percentage rate for project management and capacity building is also applied based on the value of projects selected for a geographic area. 4. A 1st Draft Development Expenditure Budget is developed 5. The 1 st draft budget is circulated to the CEO and all department heads, discussed and agreed upon by the WSTF management team
6. The 1 st draft budget is forwarded to the trustees for review and approval
Department Heads, Finance Manager
Finance Manager
CEO
CEO
To 7
PricewaterhouseCoopers Financial Management Manual (Draft)
Water Services Trust Fund
18
WSTF Budgeting Preparation Procedures – Development Expenditure Process Flow
Procedure Steps
Responsibility
7. The approved draft expenditure budget is forwarded to the PS MWI for review and approval
Trustees
From 6
7.
8.
9.
Approved draft budget forwarded to PS MWI
PS MWI reviews and approves draft budget or proposes adjustments
8. The PS MWI reviews and approves the draft development expenditure budget and may propose adjustments to be made
Final Development Expenditure Budget Prepared
9. The final development expenditure budget is prepared and adopted
PS MWI
WSTF
Development Expenditure Budget
PricewaterhouseCoopers Financial Management Manual (Draft)
Water Services Trust Fund
19
6 Cash Management 6.1
Purpose The purpose of the cash management system is to ensure that: •
All cash received is promptly and accurately accounted for and banked intact
•
All payments are properly verified and approved before payment is made
•
All vouchers and supporting documentation are properly stamped “paid” immediately after payment is done
•
There is adequate segregation of responsibilities
•
All cash transactions are properly captured by the General Ledger system
•
Bank and cash reconciliations are done on a timely basis
•
Cash requirements are forecast and surplus funds may be invested.
6.2
Receipt of money and recording of funds Funds are received in the following ways: • • • •
6.3
Direct transfers into WSTF accounts from the donors and other funding agencies. Cheque /cash receipts from GoK and donors. In the case of direct bank transfers, WSTF will receive a deposit advice from the bank to confirm receipt of the funds. The bank advice will be used to raise a receipt. When cash/cheque is received, an official receipt will be raised in triplicate immediately.
Payment procedures Payments will be made to: • • • • •
Contracted Parties implementing relevant projects Suppliers of goods and services Staff carrying out WSTF activities in form of imprests Staff as salaries Replenish petty cash
PricewaterhouseCoopers Financial Management Manual (Draft)
Water Services Trust Fund
20
For all purchase/service and payment orders there shall be two authorised signatories. The Finance department will prepare payments upon the receipt of approved purchase orders, invoices and other supporting documents. All cheques will be supported by a payment voucher and will be entered into a register before they are released. The register will show the name of the payee, the am ount, the cheque number and the date of collection (or despatch by registered mail and courier). All cancelled cheques will be stamped "VOID" and recorded in the cheque register with the word ‘CANCELLED’ in the payee space.
6.4
Authorisation of payment for goods, works and services Official purchase orders shall be issued for all goods, works and services required in accordance with the WSTF procurement regulations. These regulations will be based on best practice, public procurement regulations and project donor procurement guidelines. For specific procurements being funded by a specific Development Partner, the WSTF procurement regulations and practices will allow GoK and /or development partners procedures to take precedence over any conflicting provisions in the WSTF regulations. Local Purchase/Service Orders shall be in a form approved by the Finance Manager in liaison with the Administration and Human Resources Manager as well as the Procurement Officer. The Procurement Officer shall control the printing and issue of such forms. The orders and copies thereof shall contain such information as the Procurement Officer in consultation with the Finance Manager and Administration and Human Resources Manager, require from time to time to ensure that there is an a dequate record of WSTF’s liability. The Local Purchase/Service Order will be signed by two authorised officials as follows: Finance Manager & CEO Selected Trustee and CEO
Kshs.5,000 – Kshs.1 Million Over Kshs.1 Million
Authorisation for payment levels and signatories are as follows: Finance Manager CEO Trustees’ resolution
6.5
Up to Kshs. 200,000 Up to Kshs. 5,000,000 Over Kshs. 5 million
Bank and banking arrangements The CEO on behalf of the Fund shall make all bank and banking arrangements with reputable banks only as approved by the trustees. The cheque signatories will fall under two categories as follows: Category A Finance Manager PricewaterhouseCoopers Financial Management Manual (Draft)
Water Services Trust Fund
21
CEO Category B WSTF Chairperson Two designated trustees All cheques must have 2 signatories with both Category A and B bei ng mandatory. Cheques shall only be ordered by any of the two signatories per mandate. The Finance Manager will make adequate arrangements for their custody. Cheques in current use shall be entered in the register of accountable documen ts to be kept by the Finance Manager. Bank reconciliations will be prepared not later than 10 working days after the previous end of month by the Accountant. The Finance Manager will ensure the reconciliation of all bank account balances to the cashbooks is done. Each bank reconciliation will be prepared by a designated accountant and reviewed by the Finance Manager (Evidence of the date of preparation and review must be indicated on each reconciliation). The WSTF CEO will randomly review the bank reconciliations from time to time. 6.5.1
Insurance All cash in transit and petty cash held in the WSTF offices shall be insured against any form of loss. The level of insurance shall depend on the security measures put in place to minimise theft or any other form of loss. Fidelity guarantee must be taken in respect of pecuniary loss as a result of infidelity of employees occupying declared positions in finance.
6.6
Cash flow forecast and investment of excess funds Cash flow projections will be prepared and the cash position reviewed in making cash management decisions. Surplus funds will be invested, according to the approved investment policy, while ensuring WSTF is liquid enough to make payments for its obligations in a timely manner. The Finance Manager will be responsible for the preparation of cash projections (Weekly, monthly, quarterly) and any envisaged excess funds/cash will be invested in short term (Maximum 90 days) liquid and secure securities e.g. Government securities like Treasury Bills or similar investments. WSTF’s bankers will act as agents and/or advisors once investment decisions are taken by the Fund.
PricewaterhouseCoopers Financial Management Manual (Draft)
Water Services Trust Fund
22
6.7
Data Flow Diagram (DFD) and Data Processing Instructions (DPI) The procedures are provided in detail below.
WSTF Cash Management Procedures Receipt and Recording of Funds Process Flow Funds from donors Funds Advice
1.
2.
Procedure Steps
1. Receive cheque or bank deposit advice, ensure it has been registered in the incoming mail register, and forward it to the Cashier.
Responsibility
Finance Manager (FM)
Receive Chq /Advice
2. Receive cash/cheque or bank deposit advice and raise an official receipt in triplicate. Send one copy to source of funds to acknowledge receipt. File a copy in the bank file and leave third as the book copy.
Raise receipt
Receipt
Cashier
File Pay -in Slips
3.
4.
Bank Funds
Assign Codes
3. Bank cheques and cash received immediately, and not later than the end of the business day following the date of receipt. 4. Code the Official Receipt using the chart of Accounts and analysis codes.
Cashier
Cashier
5.
Approve
5. Review Coding and approve for entry to Cashbook.
Accountant
6.
Record
6. Update the Cashbook.
Accountant
7. File official receipts and bank pay- in-slips, and vouchers in serial number order.
Accountant
7.
File
PricewaterhouseCoopers Financial Management Manual (Draft)
Water Services Trust Fund
23
WSTF Cash Management Procedures Making Payments Process Flow From Purchasing
1.
Invoice
2.
LPO
Update Commitments
3.
Review Invoice
4.
Prepare PV
PV
5.
Procedure Steps
Approve PV
To 6
PricewaterhouseCoopers Financial Management Manual (Draft)
1. Receive Purchase orders/contracts as evidence of ordering goods.
Responsibility Accountant
GRN
2. Record LPOs as commitments and file in LPO number order. 3. Receive invoice and supporting Goods/Service Received Notes (GRN) and other documents. Review invoice against supporting documents and check calculations. Ensure it is certified for receipt of goods by end user or Administration. 4. Prepare Payment Vouchers if invoice is correct in all respects. Forward PV together with supporting documents to the Finance Manager. If not in order return to the Procurement Office or Administration as appropriate. 5. Review PV against supporting documents to ensure there is sufficient evidence of receipt of goods or services according to specific LPO or contract. Also review correctness of amounts on the documents and ensure PV complies with WSTF payment policies. Sign for review and forward to CEO WSTF.
Water Services Trust Fund
Accountant
Accountant
Accountant
Accountant
24
WSTF Cash Management Procedures
From 5
6.
7.
Authorise Payment
Prepare Cheque
6. Sign PV to authorise payment and forward it together with supporting documents to the Cashier.
Finance Manager
7. Prepare cheque and submit to the signatories.
Cashier
8. Sign cheques and forward for recording and despatch.
Cheque Signatories
Cheque
8.
Sign Cheque
9.
Record Cheque
9. Record details of signed cheques in the Cheque Despatch Register. Ensure that all cancelled Cheque are stamped ‘VOID’ and recorded in the Register with word ‘CANCELLED’ on the payee field. Ensure persons collecting Cheques enter their name, signature and identification numbers on the Register. Use Registered mail or Courier service for deliveries outside Nairobi.
10. Stamp the PV, invoices and supporting documents ‘PAID’. Record the payment in the Cash Book.
10.
Accountant
Update CB and GL
12. File PVs, supporting journal print out and documents in PV order number
12.
Cashier
Stamp PV
11. Review Cashbook journal and update General Ledger.
11.
Accountant
Accountant
File
PricewaterhouseCoopers Financial Management Manual (Draft)
Water Services Trust Fund
25
WSTF Cash Management Procedures Bank reconciliation procedures Process Flow
1.
2.
3.
4.
5.
6.
7.
Procedure Steps
1. Receive monthly bank statements from the bank.
Receive Statement
Agree to Cashbook
Identify reconciling items
Print-out
Responsibility
Finance Manager
2. Agree the balance to the cashbook balance
Accountant
3. Identify the reconciling items.
Accountant
Prepare adjusting journals
4. Prepare adjusting journals for the identified reconciling items.
Sign Off
5. Review the reconciliation and sign off
Process account
6. Process the journals in the accounts and adjust the cash book.
Accountant
7. File copy of the reconciliation
Accountant
File
PricewaterhouseCoopers Financial Management Manual (Draft)
Water Services Trust Fund
Accountant
Finance Manager
26
WSTF Cash Management Procedures Review of Cash position and Preparation of Cash Forecasts Procedure Steps
Process Flow
Payments timing estimate
1.
2.
Monthly: 1. With assistance from Finance, allocate planned expenditure to the approximate month of payment. In doing this consider timing of activity and payment policy. 2. Generate cash requirements forecast analysed by activity and expense type.
From bank
Generate Cash Requirement Forecast
3. Bank statement
File
4.
Project Cash-flow
Forecast
3. Prepare a projected cash inflow analysed by source of funds and discuss with CEO 4. Obtain approval of cash flow forecast from the CEO and transfer funds to operating accounts as appropriate.
Obtain approval
Responsibility
Heads of Departments
Finance Manager
Finance Manager
Finance Manager
NO Surplus?
5. Seek authority to invest surplus funds in accordance to WSTF’s surplus funds investment policy
YES
5.
6.
Seek approval
Approve investment
7.
Process transfer
8.
File
PricewaterhouseCoopers Financial Management Manual (Draft)
6. Approve investment of funds in deposit accounts. Bank advice
To Bank
7. Prepare advice for funds transfer; obtain approval from cheque signatories and forward transfer advice to the Bank. 8. File copy of the forecast
Water Services Trust Fund
Finance Manager
CEO and Trustees
Finance Manager
Finance Manager
27
7 Petty Cash Control Procedures 7.1
Purpose The purpose of the petty cash system is to ensure: • • • •
7.2
The maintenance of sufficient amount of float to meet small cash needs Safe custody of petty cash funds Adequate controls over a petty cash held and petty cash payments made Prompt and accurate processing, issuance, recording and accounting for petty cash.
Policy WSTF will maintain a petty cash float to meet small office expenses. WSTF management will agree the float amount which will be monitored and revised, with approval of the CEO, when considered necessary. Any payments in excess of Kshs 5,000 will be made by Cheque.
7.3
Description The Cashier will maintain an initial float of Kshs 50,000 for meeting small office expenses, and any other cash withdrawn for specific purposes has to be surrendered to the Cashier for proper accounting before the money is paid out. Petty cash will not be used for workshops, travel, per diems, allowances, fuel or salary advances. Travel allowance and workshop imprest procedures are provided in Section 8. Funds for these activities will be advanced and accounted for using an Imprest Application Form and an Imprest Accounting Form. Petty cash shall be securely locked up in a safe. The Cashier should ensure adequate security measures are in place while transporting petty cash from the bank and when accessing the safe to make payments. The Finance Manager will conduct surprise petty cash counts to ensure petty cash is safe, used as intended and accounted for correctly. The count sheet shall be counter signed by both the Cashier and the person conducting the count and dated. Any discrepancies noted shall be reported immediately to the Finance Manager and WSTF CEO.
7.3.1
Request and payment of petty cash Requests for petty cash will be made using a Petty Cash Voucher (PCV). Employees requiring petty cash will complete the form and obtain approval from the respective Head of Department. Heads of
PricewaterhouseCoopers Financial Management Manual (Draft)
Water Services Trust Fund
28
Departments requiring petty cash will complete the form and obtain approval from the Finance Manager or CEO. Once approved by the Finance Manager or Accountant, the PCV will be presented to the Cashier for payment. The recipient of petty cash will sign the PCV on receipt of the funds. The Cashier will retain the PCV in the petty cash box until the funds are accounted for with supporting documents. 7.3.2
Accounting for expenditure Petty cash advances will be accounted for immediately after incurring expenditure. This should take place on the same day the petty cash a dvance is taken. Only in exceptional cases should petty cash be accounted other than on the day of disbursement. The petty cash holder will summarise the expenses, attach all the receipts and submit them to the Cashier. Any difference between the advance and the expenditure will be reflected on the PCV and surrendered to the Cashier. If more than the approved advance is spent, the person who authorised the expenditure will be required to approve the additional payment to the Petty Cash holder. Un-surrendered petty cash should be recovered from the staff salary in the same month it was paid out.
7.3.3
Petty cash replenishment The petty cash float will be replenished with the amount spent every time the balance falls below 25% of the float. The CEO, WSTF will appro ve any revision to this percentage. A properly analysed Petty Cash Replenishment Request Form will be completed to account for the float. This will be adequately supported by PCVs and expenditure receipts. A payment voucher will be raised for the replenishment. The petty cash replenishment cheque should be reconciled to the petty cash expenditure. Any discrepancies noted should be investigated immediately and corrective action taken.
7.3.4
Cash reconciliation procedures
This will be prepared on a daily basis by the Cashier and supervised by the Accountant who will ensure that it agrees to the daily balances. 7.3.5
Data flow Diagram (DFD)
The procedures are illustrated below.
PricewaterhouseCoopers Financial Management Manual (Draft)
Water Services Trust Fund
29
WSTF: PETTY CASH CONTROL Request and Payment of Petty Cash Process Flow
1.
Prepare PCV
Procedure Steps 1.
Fill in a Petty Cash Voucher (PCV) for the required amount of petty cash and forward to the to Section Head to approve.
Responsibility
Petty Cash Applicant
PCV
2. • 2.
Approve PCV
•
•
Review PCV and ensure that: it is reasonable and/or adequately supported by valid documentation the purpose of the request (the activity, expenditure type and details) is clearly stated activity is within the approved work-plan and budget approved.
Finance Manager or Accountant
Approve petty cash voucher and forward to the Cashier.
3.
4.
Receive Cash
3.
Receive cash from the Cashier and sign for receipt
Petty Cash Applicant
Hold
4.
Hold PCV in petty cash box until funds are accounted for
Cashier
PricewaterhouseCoopers Financial Management Manual (Draft)
Water Services Trust Fund
30
WSTF: PETTY CASH CONTROL Accounting for Petty Cash Process Flow
Expense receipts
1. File
Submit expense receipts
2. PCV
Verify expenses
3.
Receive cash differences
4.
5.
Attach expense receipts
File
Update petty cash book
PCV
6.
Procedure Steps
1. Support expenditure incurred with original receipts and sign each receipt at the back. Return the documents together with all unused cash to the Cashier immediately on return to office. 2. Attach all the original receipts to the PCV and ensure that relevant expenditure details (Activity, expense type and source of funds) are indicated. Indicate expenditure amount on the PCV and calculate difference between advance and expenditure. 3. Verify Petty cash expenditure. 4. Where there is a balance of unused petty cash, receive it and sign the PCV. Where the Holder spends more than advanced, pay balance after the person who authorised the advance approves the extra spending. Ensure the recipient signs the PCV for the additional payment. 5. Record petty cash expenditure in the Petty Cash Book. 6. File the petty cash vouchers sequentially in a box file
Responsibility
Petty Cash Holder
Cashier
Accountant
Cashier
Cashier Cashier
File
PricewaterhouseCoopers Financial Management Manual (Draft)
Water Services Trust Fund
31
WSTF: PETTY CASH CONTROL Daily Cash Reconciliation Process Flow
1.
Procedure Steps
Count cash
2.
Agree to petty cash book
3.
Identify reconciling items
YES
6.
7.
Pass adjusting journal
1. Count the cash at close of business
Cashier
2. Agree to petty cash book
Cashier
3. Identify all the reconciling items
Accountant
4. If misuse of petty cash noted then disciplinary action should be taken.
Finance Manager
Serious?
NO
4. 5.
Responsibility
Take Action
Sign off
Process account
5. Where normal reconciling items pass adjusting journals
Accountant
6. Review the reconciliation and sign off
Finance Manager
7. Process the account with any adjustments and file the reconciliation together with cash count results
Accountant
File
PricewaterhouseCoopers Financial Management Manual (Draft)
Water Services Trust Fund
32
WSTF: PETTY CASH CONTROL Replenishment of Petty Cash Process Flow 1.
Prepare PCRR
PCRR
2.
Prepare PV
Procedure Steps 1. Prepare an expenditure report, the Petty Cash Replenishment Request (PCRR) detailing total expenditure each time the balance reaches replenishment level (25% Float). 2. Prepare a Payment Voucher for replenishment of petty cash. Attach the PCRR and supporting expenditure documents, and forward to the Finance Manager.
Responsibility
Cashier
Accountant
PV
3.
Review PCRR/ PV
4.
Raise Cheque
3. Check the PCRR to the original receipts. Review the payment voucher and ensure that the reimbursement amount equals the total of the expenditure receipts. Approve the replenishment 4. Raise Cheque for Replenishment and forward to cheque signatories.
Finance Manager
Cashier
Cheque
5.
Sign Cheque
6.
Replenish float
7.
Update GL
8.
Update CB and PCB
9.
File
5. Sign Petty Cash replenishment Cheque.
Cheque Signatories
6. Replenish the float.
Cashier
7. Update the General Ledger with petty cash expenditure as follows: Dr Expense (various) Cr. Petty Cash.
Accountant
8. Update the Cash book with the float replenishment payment by: Dr. Petty cash Cr. Bank-main cashbook 9. File vouchers in PV Number order
PricewaterhouseCoopers Financial Management Manual (Draft)
Water Services Trust Fund
Accountant
Accountant
33
8 Travel and Activity Imprests 8.1
Purpose The purpose of the imprest system is to ensure that: • • • • •
8.2
Imprest is issued for approved activities and expenditure types Proper approval systems are adhered to in making imprests payments Reasonable amounts are paid out as imprests Imprest is promptly and fully accounted for with appropriate supporting documents Travel and other activities requiring imprests are adequately planned for in advance.
Policy WSTF will pay for travel and reasonable living expenses for employees on official business in accordance with guidelines and rates set out in the Terms and Conditions of Service. These details will be elaborated in a personnel policies and procedures manual, but in summary the expenses will be claimed as detailed in the sections that follow.
8.3
In country- out of station allowance Officers travelling on duty within Kenya and away from their duty station will be paid a per diem / Daily Subsistence Allowance (a flat accommodation allowance per night) at rates guided by government circulars to be issued from time to time. Officers travelling on duty but not spending a night away from their duty station will be eligible for lunch and dinner allowance at rates also to be guided by government circulars issued from time to time. Fuel and other incidental vehicle running costs will be based on the official expenditure receipts.
8.4
Out of country subsistence allowance This allowance will be paid as per agreed rates determined by the WSTF Management. All out of country travel allowances will be approved by the Chairperson of WSTF or by the Vice-Chairperson in the absence of the Chairperson.
8.5
Application for travels and activities imprests The respective budget holders for approved activities will review and approve local travel and activity imprest applications. All out of country activities must also be approved by the Chairperson of WSTF or by the Vice-Chairperson in the absence of the Chairperson.
PricewaterhouseCoopers Financial Management Manual (Draft)
Water Services Trust Fund
34
The approved application shall be submitted to the Finance department at least one week (5 working days) before the date on which funds are required. Once an imprest is issued, it will immediately be posted to an interim staff imprest account of the individual taking the imprest.
8.6
Accounting for imprests
Imprests must be accounted for within 48 hours of return to office from activity in the field. No further advances will be made until previous ones are fully accounted for. An Expenditure Form will be completed in accounting for the imprest. The form is designed to facilitate analysis of the spending b y activity and expenditure type, e.g. per diem, stationery, transport etc. The imprest holder will obtain approval either from the Budget Holder or the CEO, WSTF before submitting the form to Finance Department. Any amounts not spent will be surrendered t o the Cashier when accounting for the imprest, and an official receipt issued. Similarly, officers who spend more than the amount advanced will be refunded the excess amount spent after they have accounted for the advance. The excess amount must be approved by the Department Head or CEO.
8.7
Unsurrendered imprest
Imprests that remain unaccounted for beyond the required period of return to office will be recovered from the employee’s salary in such amounts and over such period as the Finance Manager in consultation with the CEO, WSTF may consider appropriate.
8.8
Data Flow Diagram (DFD)
A diagram illustrating the sequence of processes identified above is illustrated below:
PricewaterhouseCoopers Financial Management Manual (Draft)
Water Services Trust Fund
35
WSTF: IMPRESTS – TRAVEL AND ACTIVITY Travel and Activity Imprest Application Process Flow
1.
1. Complete and sign an Imprest Application Form (IAF) either for travel on WSTF assignment /conferences/ meetings or to undertake activities which are included in the approved work plan and budget for the period.
Complete IAF
IAF
2.
Review and approve
3.
Review and sign IAF
Procedure Steps
4. Ticket purchase
2. Review the IAF to confirm activity is within our work plan and budget for the period. Also check reasonableness of rates and quantities used. Approve, if satisfied and forward the IAF to the CEO. 3. Review IAF and if satisfied, authorise travel or activity. (CEO and Chairperson of WSTF may approve out of country applications) 4. If ticket or other procurement required, observe appropriate procurement procedures. Forward documents for payment to Finance.
Responsibility
Applicant
Head of Department
Head of Department
Administration
To purchase
5. of ticket To payment procedures
6.
7.
Record imprest advance
File
5. Observe payment procedures to process payments.
6. Record the advance payment in the cash book. Also update the Imprest Ledger to reflect the debit on the imprest holder’s account. Dr. Imprest Holder (specific) Cr. Bank/Cash. 7. File Documents.
PricewaterhouseCoopers Financial Management Manual (Draft)
Water Services Trust Fund
Accountant
Accountant
Accountant
36
WSTF: IMPRESTS – TRAVEL AND ACTIVITY Accounting for Imprests Process Flow
Procedure Steps 1.
1.
Complete PEF
PEF
2.
2.
Review PEF
3. Imprest = Expense ?
3. To payment
NO
YES
4.
Analyse expenditure
4.
5.
5.
6.
Record
To account for travel/activity imprest, fill in a Personal Expenditure Form (PEF) within 14 days of returning to office, to account for the imprest. Where a flat per diem is used, show the number of nights actually spent and rate applied. For fuel and other activities attach supporting expenditure documentation and forward to the Head of Department.
Advance Holder
Review expenditure report to ensure that all expenditure items are supported by valid receipts/vouchers. Approve and forward to the Finance Section.
Head of Department
If there is a difference between imprest and expenditure observe payment procedure to make additional payment and receiving procedure to record funds surrendered.
Accountant
Ensure expenditure is assigned to the correct account codes and correctly analysed by activity codes, cost centre and financier codes.
Accountant
Record the expenditure to debit the expense accounts and credit staff imprest account
Dr. Expense (various) Cr. Imprest Holder. Also record cash balance paid or received Back as appropriate.
Accountant
6.
Accountant
File documents.
File
PricewaterhouseCoopers Financial Management Manual (Draft)
Responsibility
Water Services Trust Fund
37
WSTF: IMPRESTS – TRAVEL AND ACTIVITY Unsurrendered Imprests Process Flow
1.
Generate report
Procedure Steps
1. Monthly generate an aged unsurrendered imprest report and forward to the Finance Manager.
Responsibility
Accountant
Unsurrendered Imprest Report
2.
3.
4.
5.
Review report
Approve to deduct
Deduct
File
PricewaterhouseCoopers Financial Management Manual (Draft)
2. Review the unsurrendered report and notify individuals with unaccounted for imprests. Obtain authorisation from the CEO to deduct unaccounted for imprests from staff member’s salary.
Finance Manager
3. Approve the imprest recovery schedule.
CEO
4. Recover unaccounted for imprests through the payroll once approval is received from the CEO.
Accountant
5. File Reports.
Accountant
Water Services Trust Fund
38
9 Payroll Procedures 9.1
Purpose The purpose of the payroll system is to ensure:
9.2
•
Complete and accurate data capture and payroll processing
•
Production of all required reports in a timely manner
•
Employees are paid in accordance with letters of appointment
•
There is adequate security over payroll data
•
Statutory and voluntary deductions are properly accounted for and remitted to the appropriate authorities
•
Payroll expense is forwarded to the General Ledger system.
Policy WSTF will issue appointment letters to all newly employed staf f and the payroll processing will be in line with the Terms and Conditions of Service of each category of staff. The Finance Department shall not make payroll changes without the express authority of the Finance Manager. Tax will be deducted on all taxable pay in accordance with relevant tax law. WSTF will comply with local labour laws, regulations governing employment and provisions of specific employment contracts. To avoid the risk inherent in carrying large sums of money and minimise the risk of loss o f payroll frauds, all staff will be required to operate bank accounts through which their salaries will be paid. Cash cheques will only be used on a temporary basis to allow new staff adequate time to open bank accounts. The payroll will be prepared on a m onthly basis. The Finance Manager will ensure that this is th prepared by the 20 of every month. Salary bank transfer instructions and the salary cheque will be forwarded to the bank on or before 23r d of every month to ensure salaries are credited to employee bank accounts before the end of the month. Payroll reports (net salaries, statutory and non-statutory deductions) will be reviewed by the Finance Manager and verified by the Administration and Human Resource Manager. Once approved, they will be forwarded to the Chairperson for authorisation of payments.
PricewaterhouseCoopers Financial Management Manual (Draft)
Water Services Trust Fund
39
9.3
Description This section only provides the payroll preparation procedures. Details on other personnel procedures will be included in the WSTF personnel policies and procedures manual. For the purposes of payroll processing, the Finance Department will receive a Payroll Change Advice from the Human Resources Manager with the following employee details: • • • • • • • • • • •
Full name, Payroll number (provided by the system/HR Dept), Position, Department, Bank Name & Branch, Bank Account Number, Statutory registration numbers (PIN, NSSF, NHIF,ID), Other registration numbers (Co-operative, HELB, etc), Emoluments details, The birth date. The appointment date.
On receipt of the Payroll Change Advice, the Finance Manager will review and sign it for processing in the payroll system. Staff advances shall be paid out in accordance with the provisions of the Terms and Conditions of Service. The Finance Manager will ensure strict compliance with the law in regard to taxes and other statutory deductions. He will ensure that WSTF obtains all the pertinent information regarding statutory deductions and complies with them. Such information can be obtained from Kenya Revenue Authority, NSSF, NHIF, the print media (e.g. Kenya Gazette) etc. Penalties due to non-compliance resulting from the negligence of an officer shall be recovered from that officer. It will be the duty of the Finance Manager to ensure recoveries are effected on a timely basis. Payroll reports (net salaries, statutory and non -statutory deductions) will be reviewed by the Finance Manager and verified by the Administration and Human Resources Manager. Once approved, they will be forwarded to the CEO, WSTF for authorisation of the payments.
9.4
Data Flow Diagram (DFD)
A diagram illustrating the sequence of processes identified above is illustrated below:
PricewaterhouseCoopers Financial Management Manual (Draft)
Water Services Trust Fund
40
WSTF: PAYROLL PROCEDURES MANUAL Updating Payroll Records Process Flow From personnel procedures
1.
Update employee file
Payroll change advice
2.
3.
4.
1. Update employee file with payroll changes and prepare a Payroll Change Advice. This could be for new staff, termination, change in salary or other payroll items. Forward to the Finance Manager.
Responsibility
Administration and Human Resources Manager
Updated report
Review and approve payroll update
Input new changes
Review new inputs
5.
Review payroll update
6.
Review report and forward for filing
7.
Procedure Steps
File
PricewaterhouseCoopers Financial Management Manual (Draft)
2. Review and approve Payroll Change Advice for input into the payroll systems.
Finance Manager
3. Input changes to payroll (new staff, pay change, termination etc).
Accountant
4. Review payroll data and confirm correct input of changes.
Finance Manager
5. Review payroll update report and if okay sign and return to Finance Manager. Indicate if there are amendments to be made. 6. Receive reports and if changes signed by Human Resources Manager forward to Accountant for filing. 7. File update reports.
Water Services Trust Fund
Administration and Human Resources Manager
Finance Manager
Accountant
41
WSTF: PAYROLL PROCEDURES MANUAL Monthly Payroll Processing Process Flow
Procedure Steps 1. Generate payroll reports, including payslips, bank transfers, statutory and other deductions no later than the 20th of every month.
1.
2.
3.
4.
Run payroll
Review monthly payroll reports
2. Review payroll reports, ensure errors noted are rectified, sign and forward to the Human Resources Manager. Monthly payroll report
Review monthly payroll reports
Net salary bank transfer to bank
3. Review Monthly payroll reports, sign and return to Finance.
4. Obtain signatories for bank transfer letter (same as cheque) and despatch to the bank for money transfer to the respective employee bank accounts. 5. Observe payment procedures to pay monthly statutory and other deductions.
Responsibility Accountant
Finance Manager
Administration and Human Resources Manager
Finance Manager
Accountant
5. Statutory and non statutory deductions to payment procedures
6.
Update A/C system with payroll transactions
6. Update the General Ledger with the payments by debiting the various expense accounts with the payroll related payments as follows: ENTRIES TO GENERAL LEDGER: Dr. Payroll Expenses (various accounts) Cr. Payroll Liabilities (various) ENTRY ON PAYMENT Dr. Payroll Liabilities (various) Cr. Bank
Accountant
7. File
7. File Documents
PricewaterhouseCoopers Financial Management Manual (Draft)
Water Services Trust Fund
Accountant
42
10 Fixed Assets System 10.1
Purpose
The purpose of the fixed assets system is to ensure that: All assets are safeguarded by recording their details and monitoring their location, condition and usage There is proper maintenance of a fixed assets register, appropriately designed to include all information necessary to properly record and control fixed assets There is proper accounting for fixed assets.
10.2 10.2.1
Policy
Fixed assets Fixed assets or plant and equipment refer to long lived assets acquired for use in the operation of an organisation. In the case of WSTF, these will include office equipment and computers, vehicles, furniture and fittings. The cost of fixed assets will include all expenditures reasonable and necessary in acquiring the asset and placing it in a position and condition for use in WSTF’s operations. This will mainly include the cash outlay necessary in acquiring the asset plus any incidental costs (e.g. expenditures for freight, insurance while in transit, installation and any other costs necessary to make the asset ready for use). On receipt, each asset will be verified and assigned a unique tag number and recorded in detail in the Fixed Assets Register. The Fixed Assets Register shall have the following information for each asset: • • • • • •
Description of asset including model and serial number, Date of purchase and cost, The tag number, Class and category of asset, General and specific location. Condition.
Management will ensure that independent physical verifications are regularly conducted. Any discrepancies will be investigated and corrective action taken.
PricewaterhouseCoopers Financial Management Manual (Draft)
Water Services Trust Fund
43
10.2.2
Capitalisation Policy Fixed assets with a minimum value of Kshs 50,000 individually or collectively and a life of three years or more will be capitalised and depreciation computed on these. Assets costing less than Kshs 50,000 will be expensed in the year of purchase and will be recorded in a stores register for control purposes. Small items like staplers and punches will be treated as consumables and controlled using a stores ledger card.
10.2.3
Depreciation The straight-line method of depreciation will be used. This will allocate the cost of the depreciable asset uniformly over its expected useful li fe. The annual depreciation will be based on the full acquisition cost of the depreciable asset, net of its salvage value, as applicable. The rate will apply from the date the asset is placed into use until it is disposed off/written off or until it is fully depreciated, whichever occurs first. Sets of assets e.g. office furniture, purchased at a single point in time should be considered a single asset for depreciation, even if individual components of the set cost less than the minimum value for capitalisa tion. The following rates will be used in computing depreciation: Class 1 2 3 4
10.2.4
Name Motor Vehicles Computer equipment Office equipment Office furniture & fittings
Estimated Useful life 4 years 3 years 4 years 5 years
Depreciation rate 25% 33% 25% 20%
Disposal of fixed assets Disposal of assets will be effected only on the recommendation of the Finance and Procurement Committee and approved by the Trustees. Fixed Assets shall be disposed off after valuation and the disposal procedure shall be by open tender, public auction or private treaty (to members of staff). In all cases, the disposal shall be subject to a reserve price.
10.2.5
Control over fixed assets usage Fixed assets usage will be controlled through the use of the following forms: • • • •
Transport requisition form Vehicle movement register (work tickets) Fixed assets movement register Authority for movement of fixed assets form.
PricewaterhouseCoopers Financial Management Manual (Draft)
Water Services Trust Fund
44
10.2.6
Insurance arrangements Insurance is a vital component of WSTF’s operations. Insurance should cover the following risks among others: • • •
Fire Burglary Motor vehicle insurance
The CEO shall be responsible for effecting all insurance covers with reputable insurers on behalf of the Trustees. The CEO will negotiate claims and where necessary in consultation with other officers. Adequate insurance registers shall be kept and policy documents kept in safe custody by the Finance Manager.
10.3
Data Flow Diagram (DFD)
A diagram illustrating the sequence of processes identified above is illustrated below:
PricewaterhouseCoopers Financial Management Manual (Draft)
Water Services Trust Fund
45
WSTF: FIXED ASSETS SYSTEMS USER PROCEDURES Fixed Assets Acquisition, Recording and Depreciation Process Flow 1.
2.
Raise requisition
Approve requisition
3.
Check against work plan
4.
Forward to CEO if ok
5.
7.
Receive item and verify
End User or Head of Department
2. Approve purchase if within approved work-plan and budget. Forward to Finance Department.
CEO
4. If within budget indicate availability of funds and forward to CEO.
Procurement procedures
GRN and Invoice
8. Physically tag asset
To 9
PricewaterhouseCoopers Financial Management Manual (Draft)
Responsibility
1. Raise and sign fixed assets purchase requisition.
3. Check that requisition is included in the approved workplan and is within budget. If not, return requisition to budget holder with an explanatory note.
Approve purchase
6.
Procedure Steps
5. Approve purchase of fixed assets and forward to procurement. 6. Observe appropriate procurement procedures to select supplier and acquire asset. 7. Receive purchased item and inspect to ensure that the condition is satisfactory and is in accordance with the terms and conditions of the related purchase contract. If the item is technical in nature, get an expert to test and certify quality condition. Assign a unique tag number to the asset using the WSTF asset coding register and complete a Goods Received Note 8. Physically tag the fixed asset and forward copy of GRN, the invoice and relevant supporting documents to Finance Department. Water Services Trust Fund
Finance Manager
Finance Manager
CEO and Trustees
Procurement
Stores/Appropriate Technical Expert
Stores
46
WSTF: FIXED ASSETS SYSTEMS USER PROCEDURES
From 8
10.
11.
12.
9. Receive Goods Received Note for the asset and invoice duly certified by receiving officer/stores.
Update FAR with acquisition
10. Record the fixed assets in the register. Debit the correct code and credit bank account.
Update GL with acquisition
11. Review the fixed assets journal and post to the General Ledger. Print a journal for reference purpose.
File
PricewaterhouseCoopers Financial Management Manual (Draft)
12. File Journal and supporting documents.
Water Services Trust Fund
Accountant
Accountant
Accountant
Accountant
47
WSTF: FIXED ASSETS SYSTEMS USER PROCEDURES Recording Fixed Assets Disposals Process Flow
Procedure Steps
Responsibility
From administration
Disposal report and support documents
1.
Receive disposal report
2.
Update FAR with disposal
3.
Update GL with disposal
4.
Generate disposal report
5.
Review disposal report
6.
File
PricewaterhouseCoopers Financial Management Manual (Draft)
1. Receive fixed asset disposal report from Administration. Review report and prepare a journal to record the disposal by: Debit: Respective accumulated depreciation account Credit: Respective fixed assets account Debit/Credit: Loss or gain from disposal.
2. Update fixed assets register with disposal.
3. Review journal and post to update General Ledger Accounts.
4. Generate disposal report and print it.
5. Review report and sign.
6. File report for reference and audit purpose.
Water Services Trust Fund
Finance Manager
Accountant
Finance Manager
Accountant
Finance Manager
Accountant
48
WSTF: FIXED ASSETS SYSTEMS USER PROCEDURES Recording Fixed Assets Disposals Process Flow
1.
2.
3.
4.
5.
6.
Run depreciation
Update GL with depreciation
Print depreciation report
Print FA movement report
Review periodical reports
Procedure Steps
1. Periodically and prior to preparation of reports, run depreciation for the period.
2. Review the depreciation journal and post debit to depreciation accounts and credit to accumulated depreciation accounts in the General Ledger.
3. Select user defined depreciation report in the system and print it for the relevant period.
4. Prepare and print the Fixed Assets movement report for the relevant period.
Responsibility
Accountant
Finance Manager
Finance Manager
Accountant
5. Review periodical fixed Assets reports and sign them.
Finance Manager
6. File reports.
Accountant
File
PricewaterhouseCoopers Financial Management Manual (Draft)
Water Services Trust Fund
49
11 WSTF Accounting and Reporting Procedures 11.1
11.1.1
WSTF accounting policies
Income WSTF income will be recognised when funds are received. Funds will be received from the Government of Kenya and from donor agencies in the form of grants and donations. These funds will be pooled and recognized as income. Specific grants received from donors and allocated for specific purposes and not pooled will be recognised as other income.
11.1.2
WSTF expenses Expenditure will be recognised when payments are made. WSTF beneficiaries and project implementers will report quarterly and activity progress reports will include expenditure reports. Expenditure incurred but not paid for will be treated as a commitment to pay. Other WSTF commitments such as purchase orders will also be monitored. All commitments will be reported under appropriate categories for budgetary control purposes.
11.1.3
WSTF assets For reporting to GoK and other donors, assets will be expensed in full and the amount reflected in the income and expenditure report for the period in which they are purchased. For WSTF internal purposes, a memorandum balance sheet will be maintained in which fixed assets will be capitalised and depreciated over their useful lives.
11.1.4
WSTF balance sheet WSTF accounting system will be cash based. A memorandum balance sheet will be prepared outside the accounting software to classify WSTF resources under investments (including fixed assets) and operations and show how these are funded.
11.1.5
Reporting Sample formats of WSTF financial reporting forms are included in Appendix 3.
11.2
Reporting and data analysis requirements The WSTF accounting system will be designed to facilitate timely generation of periodic financial management reports. To efficiently produce these reports, the accounting transactions need to be analysed in a number of ways, including: • • •
Expenditure categories and sub categories Components and activities Source of funds
PricewaterhouseCoopers Financial Management Manual (Draft)
Water Services Trust Fund
50
• • • •
Institution and units/cost centres Location Timeframe - date and periods. Geographic location of projects
A brief description of the identified analysis dimensions is provided below. (To be developed upon discussion with WSTF team) 11.2.1
Dimension 1: Category of expenditure: The Categories of Expenditure (COE) for reporting will be as follows: • • •
Office Expenses Disbursements to Projects Project Management and Capacity Building Expenses
The above categories will be further broken down as follows: Head office Expenses will include costs specifically incurred at the head office and arising from head office operations as outlined in section 3.2.1. A number of these expenditure sub-categories would include: • • • • • • • • • • • •
Printing, photocopying and stationery Workshops and Hire of facilities Head Office Staff Training Travel and Accommodation Advertising and exhibitions Utilities Audit and consultancies Bank charges and commissions Vehicle running and maintenance costs Repairs and maintenance-non vehicle Insurance–non-vehicle Other expenses -miscellaneous
Disbursements to Projects These are those funds disbursed to projects which have been approved based on procedures outlined in the WSTF Operations Manual. Projects receiving funds will then be grouped into the following sub-categories based on the nature of the intervention: • • • •
Transmission Systems – including piped-gravity and piped-pumping schemes and open ducts Non-transmission Systems – including boreholes and shallow wells, rain water harvesting (rain water catchment), dams, pans etc Sanitation and Hygiene Promotion Training and Capacity Building
PricewaterhouseCoopers Financial Management Manual (Draft)
Water Services Trust Fund
51
Project Management and Capacity Building This category includes expenses incurred in managing projects which are ongoing at project sites. As the funded projects are envisioned to be demand driven, these expenses will be those incurred in backstopping by technical s taff from the head office and would include: • • • 11.2.2
Travel and Accommodation Vehicle running and maintenance costs Printing, photocopy and stationery
Dimension 2: Project components and activities The main project components are based on the identified priority areas as listed in section 3.2.2. These will include the following: • • • •
11.2.3
Promotion of Transmission Systems Promotion of Non-Transmission Systems Promotion of Sanitation and Hygiene Training and Capacity Building
Dimension 3: Source of funds Expenditure reporting will also be done according to the following possible funding sources for the WSTF; • •
11.2.4
GoK Various donors
Dimension 4: Institution Expenditure reporting and data analysis will also occur according to WSTF Units and Cost Centres, which include: • • • • • • •
11.2.5
Finance & Resource Mobilization Department Technical Appraisal Department – Transmission Systems Technical Appraisal Department – Non-Transmission Systems Field Co-ordination Department Administration and Human Resources Department Sanitation and Hygiene Dept CEO
Dimension 5: Timeframe
PricewaterhouseCoopers Financial Management Manual (Draft)
Water Services Trust Fund
52
Beneficiaries of WSTF funding will be required to prepare quarterly and annual progress reports and end of project reports. WSTF management will consolidate these reports and will prepare quarterly and annual reports for presentation to the Trustees. A monitoring and evaluation report will be prepared by WSTF management half-yearly. The copies of the consolidated reports will be forwarded to the Trustees and through the MWI to the GoK and other donors.
11.3
Reports from beneficiaries and preparation of consolidated reports All beneficiary projects will be expected to report on a timely basis to WSTF management. The minimum reporting requirements would include: • • •
Quarterly progress and financial reports Annual progress reports An end of project report
WSTF management will consolidate all the reports received from the beneficiaries and produce consolidated quarterly and annual progress and financial reports. As WSTF head office will also produce quarterly and annual progress and financial reports, these will be consolidated with the quarterly and annual project beneficiary reports. Copies of consolidated reports are then forwarded to the Board of trustees and subsequently to the donors and to the GoK through MWI. The consolidated reports are a basis for audits and programme reviews by the Auditor General and other auditors appointed by the GoK, donors and WSTF Trustees.
11.4
Project auditing arrangements As outlined in section 11.3 above, a consolidated expenditure report will be prepared for all expenses incurred by WSTF annually and this expenditure report will be the basis of audits. WSTF accounts shall be audited and reported on annually by the Kenya National Audit Office or by an auditor in accordance with the Public Audit Act, 2003.
PricewaterhouseCoopers Financial Management Manual (Draft)
Water Services Trust Fund
53
APPENDIX 1: Structure of Accounts Detailed Structure of Accounts
100000
INCOME Pooled Funds GoK Donors Others Project Specific Funds GoK Donors Others
200000
EXPENDITURE 10000
Head Office Expenses Personnel Emoluments 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Motor Vehicle Expenses 1 2 3
PricewaterhouseCoopers Financial Management Manual (Draft)
Water Services Trust Fund
Basic salary House Allowance Out-Patient medical Allowance Commuter Allowance Entertainment Allowance Leave Allowance Overtime Allowance Acting Allowance Special Duty Allowance Payment in Lieu of Leave Casual Wages Pension Payments NHIF Payments NSSF Payments Disturbance Allowance Fuel Expenses Repairs and Maintenance Insurance
54
Travel and Accommodation 1 2 Utilities 1 2 Telephone and Postal Expenses 1 2 3 4 Insurance (Non -Motor) 1 2 3 Board Expenses 1 2 Office Running Expenses 1 2 Bank Charges 1 2 Staff Training Costs 1 2 Staff Expenses 1 2 Consultancies 1 2 3 Advocacy and Advertising 1 2
PricewaterhouseCoopers Financial Management Manual (Draft)
Water Services Trust Fund
Local Travel International Travel Water Electricity
Fixed Phone Charges Postal Expenses Mobile Phone Costs Internet Access Costs Property Staff Public Liability Allowances Insurance Sundry Expenses Repairs and Maintenance Charges on Deposits Other Bank Charges Training Fees Hire of Facilities Staff Welfare Medical Expenses External Audit Costs Legal Fees Miscellaneous Consultancies Media Advertisements Promotional Activities
55
Printing and Stationery 1 2 20000
Stationery Printing
Financing to Projects Surface Water Distribution 1 2 3 Ground Water Distribution 1 2 3 Sanitation and Hygiene
Piped Gravity Piped Pumping Ope n Ducts Boreholes and Shallow Wells Rainwater Harvesting Dams and Pans
Training and Capacity Building 30000
Project Management and Capacity Building Travel and Accommodation Vehicle Running and Maintenance Stationery and Photocopying Consultancies
300000
ASSETS Current Assets Bank Account 1 Pooled Funds Bank Account 2 Specific Project Funds Petty Cash Staff Debtors Other Debtors Fixed Assets Furniture and Fittings Motor Vehicles Computer Equipment Field Equipment Depreciation Furn & Fittings Depreciation Motor Vehicles Depreciation Computer
PricewaterhouseCoopers Financial Management Manual (Draft)
Water Services Trust Fund
56
Equipment Depreciation Fi eld Equipment 400000
LIABILITIES Suppliers
500000
CAPITAL ACCOUNTS Initial GoK Contribution Surplus Carried Forward
600000
CLEARING ACCOUNTS
PricewaterhouseCoopers Financial Management Manual (Draft)
Water Services Trust Fund
57
APPENDIX 2: Accounting Forms ACCOUNTING FORMS – Form WSTF AF1
WATER SERVICES TRUST FUND ADDRESS
PHONE
FAX
GOODS RECEIVED NOTE
NUMBER
DATE
GOODS RECEIVED FROM
ITEM CODE
EXPENSE CATEGORY
COMPONENT / ACTIVITY
COST CENTRE
ITEM DESCRIPTION
QTY
UNIT PRICE
TOTAL
TOTAL
PURCHASE ORDER NUMBER
DELIVERY NOTE NUMBER
INVOICE NUMBER RECEIVED BY
SIGN
DATE
APPROVED BY
SIGN
DATE
PricewaterhouseCoopers Financial Management Manual (Draft)
Water Services Trust Fund
58
ACCOUNTING FORMS – Form WSTF AF2
WATER SERVICES TRUST FUND ADDRESS
PHONE
FAX
PURCHASE ORDER
NUMBER
DATE
NAME OF SUPPLIER
ITEM CODE
EXPENSE CATEGORY
COMPONENT / ACTIVITY
COST CENTRE
PLEASE SUPPLY THE FOLLOWING GOODS ITEM DESCRIPTION
QTY
UNIT PRICE
TOTAL
TOTAL QUOTATION NUMBER AND DATE REQUESTED BY
SIGN
DATE
APPROVED BY
SIGN
DATE
AUTHORISED BY
SIGN
DATE
PricewaterhouseCoopers Financial Management Manual (Draft)
Water Services Trust Fund
59
ACCOUNTING FORMS – Form WSTF AF3
WATER SERVICES TRUST FUND ADDRESS
PHONE
GOODS & SERVICES REQUISITION FORM
FAX NUMBER
DATE
NAME OF STAFF REQUESTING
ITEM CODE
EXPENSE CATEGORY
COMPONENT / ACTIVITY
COST CENTRE
REQUEST FOR THE FOLLOWING GOODS / SERVICES ITEM DESCRIPTION & PURPOSE REQUIRED
QTY
UNIT PRICE
TOTAL
TOTAL QUOTATION NUMBER AND DATE REQUESTED BY
SIGN
DATE
APPROVED BY
SIGN
DATE
AUTHORISED BY
SIGN
DATE
PricewaterhouseCoopers Financial Management Manual (Draft)
Water Services Trust Fund
60
ACCOUNTING FORMS – Form WSTF AF4
WATER SERVICES TRUST FUND ADDRESS
PHONE
FAX
PAYMENT VOUCHER
NUMBER
DATE
NAME OF PAYEE
ITEM CODE
EXPENSE CATEGORY
COMPONENT / ACTIVITY
COST CENTRE
PAYMENT BEING MADE FOR THE FOLLOWING ITEMS ITEM DESCRIPTION
QTY
UNIT PRICE
TOTAL
TOTAL
PURCHASE ORDER NUMBER
INVOICE NUMBER
GOODS RECEIVED NOTE NO.
DELIVERY NOTE NUMBER
CHECKED BY
SIGN
DATE
APPROVED BY
SIGN
DATE
AUTHORISED BY
SIGN
DATE
PricewaterhouseCoopers Financial Management Manual (Draft)
Water Services Trust Fund
61
ACCOUNTING FORMS – Form WSTF AF5
WATER SERVICES TRUST FUND ADDRESS
PHONE
FAX
RECEIPT
NUMBER
DATE
ITEM CODE
EXPENSE CATEGORY
COMPONENT / ACTIVITY
COST CENTRE
RECEIVED FROM
CASH
CHEQUE NO. AND DETAILS
CHECKED BY
SIGN
DATE
RECEIVED BY
SIGN
DATE
PricewaterhouseCoopers Financial Management Manual (Draft)
Water Services Trust Fund
AMOUNT
62
ACCOUNTING FORMS – Form WSTF AF6
WATER SERVICES TRUST FUND FIXED ASSETS REGISTER ASSET CATEGORY
ASSET CODE
PricewaterhouseCoopers Financial Management Manual (Draft)
DEPRECIATION RATE
DESCRIPTION AND SERIAL NUMBER
LOCATION
Water Services Trust Fund
PURCHASE DATE
COST
ACCUMULATED DEPRECIATION
63
BOOK VALUE
ACCOUNTING FORMS – Form WSTF AF7
WATER SERVICES TRUST FUND BANK RECONCILIATION FORM BANK ACCOUNT NAME ACC. CODE
BANK ACCOUNT NUMBER DATE
MONTH
YEAR
Balance per Bank Statement Dated dd-mm-yyyy ADD: Deposits made but not shown in bank statement as per schedule No. .xx TOTAL LESS: Outstanding cheques as per schedule No. yy BALANCE PER CASHBOOK ADD Deposits made but not shown in cashbook as per schedule No. zz TOTAL LESS: Bank charges as per schedule No. vv ADJUSTED CASHBOOK BALANCE
PREPARED BY
SIGN
DATE
REVIEWED BY
SIGN
DATE
APPROVED BY
SIGN
DATE
PricewaterhouseCoopers Financial Management Manual (Draft)
Water Services Trust Fund
64
ACCOUNTING FORMS – Form WSTF AF8
WATER SERVICES TRUST FUND CHEQUE PAYMENT REGISTER
CHEQUE NUMBER
PricewaterhouseCoopers Financial Management Manual (Draft)
PAYEE
Water Services Trust Fund
DATE
AMOUNT
NAME OF RECEPIENT
SIGNATURE OF RECEPIENT
65
ACCOUNTING FORMS – Form WSTF AF9
WATER SERVICES TRUST FUND IMPREST / ADVANCE APPLICATION FORM
NAME OF STAFF AMOUNT REQUESTED IN FIGURES
IMPREST FORM NO.
AMOUNT REQUESTED IN WORDS PURPOSE FOR WHICH IMPREST / ADVANCE IS REQUESTED. (Attach copy of budget and reference to approved work plan)
DATE IMPREST REQUIRED CURRENT OUTSTANING IMPRESTS?
YES
NO
(Tick as appropriate)
REVIEWED
SIGN
DATE
APPROVED
SIGN
DATE
AUTHORISED
SIGN
DATE
AMOUNT OF FUNDS RECEIVED
DATE
NAME OF RECEPIENT
SIGNED
PricewaterhouseCoopers Financial Management Manual (Draft)
Water Services Trust Fund
66
ACCOUNTING FORMS – Form WSTF AF10
WATER SERVICES TRUST FUND IMPREST / ADVANCE ACCOUNTING FORM
NAME OF STAFF AMOUNT ACCOUNTED FOR
KSHS
DATE
AMOUNT ISSUED
KSHS
DATE
DIFFERENCE
KSHS
IAF NUMBER
DATE
EXPENDITURE DETAILS
AMOUNT
RECEIPT ATTACHED? YES
TOTAL
REVIEWED
SIGN
DATE
APPROVED
SIGN
DATE
AUTHORISED
SIGN
DATE
AMOUNT OF CASH RETURNED
KSHS
DATE
NAME OF STAFF
PricewaterhouseCoopers Financial Management Manual (Draft)
SIGNED
Water Services Trust Fund
67
NO
ACCOUNTING FORMS – Form WSTF AF11
WATER SERVICES TRUST FUND PETTY CASH VOUCHER
NAME OF STAFF PETTY CASH VOUCHER NO.
DATE REQUESTED
DATE
PURPOSE
AMOUNT
APPROVED
SIGN
DATE
AUTHORISED
SIGN
DATE
SIGNATURE OF RECEPIENT
SIGN
DATE
PricewaterhouseCoopers Financial Management Manual (Draft)
Water Services Trust Fund
68
ACCOUNTING FORMS – Form WSTF AF12
WATER SERVICES TRUST FUND IMPREST APPLICATION AND SURRENDER REGISTER
IAF NO.
DATE IMPREST GIVEN
PricewaterhouseCoopers Financial Management Manual (Draft)
NAME OF RECEPIENT
RECEPIENT CODE
AMOUNT ISSUED
Water Services Trust Fund
DATE OF SURRENDER
AMOUNT SURRENDERED
COMMENTS
69
ACCOUNTING FORMS – Form WSTF AF13
WATER SERVICES TRUST FUND PETTY CASH REPLENISHMENT REQUEST
NAME OF STAFF PC REPLENISHMNENT REQUEST NO.
DATE REQUESTED
DATE
DETAILS
AMOUNT REQUESTED
SUPPORTING EXPENDITURE RECEIPTS ATTACHED
APPROVED
SIGN
DATE
AUTHORISED
SIGN
DATE
SIGNATURE OF RECEPIENT
SIGN
DATE
PricewaterhouseCoopers Financial Management Manual (Draft)
Water Services Trust Fund
70
APPENDIX 3: Reporting Forms REPORTING FORMS – Form WSTF RF 1
WATER SERVICES TRUST FUND FINANCIAL REPORTING – CATEGORY OF EXPENDITURE REPORTING PERIOD HEAD OFFICE EXPENSES
REPORT DATE
Motor Vehicle Expenses
Travel & Accommodation
Utilities
Non -Transmission Systems
Sanitation and Hygiene
Training & Capacity Building
PricewaterhouseCoopers Financial Management Manual (Draft)
Kshs
Kshs
Kshs
Kshs
Basic Salary
Kshs
House Allowance
Kshs
Fuel Expenses
Kshs
Repairs and Maintenance
Kshs
Local Travel
Kshs
International Travel
Kshs
Water
Kshs
Electricity
Kshs
Piped Gravity
Kshs
Piped Pumping
Kshs
Boreholes & Wells
Kshs
Rainwater Harvesting
Kshs
Activity Type 1
Kshs
Activity Type 2
Kshs
All Activities
Kshs
Kshs Transmission Systems
PROJECT MANAGEMENT & CAPACITY BUILDING
KSHS
Kshs Personnel Emoluments
FINANCING TO PROJECTS
TOTAL PERIOD EXPENDITURE
Kshs
Kshs
Kshs
Kshs
Kshs Travel & Accommodation
Kshs
Vehicle Running & Maintenance
Kshs
Consultancies
Kshs
Water Services Trust Fund
71
REPORTING FORMS – Form WSTF RF 2
WATER SERVICES TRUST FUND FINANCIAL REPORTING – PROJECT COMPONENTS & ACTIVITIES REPORTING PERIOD TRANSMISSION SYSTEMS
NON-TRANSMISSION SYSTEMS
SANITATION AND HYGIENE
TRAINING & CAPACITY BLDG
REPORT DATE
KSHS
Total No. of Beneficiaries
Per Capita Cost
Kshs
Piped Gravity
Kshs
No. of Beneficiaries
Per Capita Cost
Kshs
Piped Pumping
Kshs
No. of Beneficiaries
Per Capita Cost
Kshs
Open Ducts
Kshs
No. of Beneficiaries
Per Capita Cost
Kshs
Total No. of Beneficiaries
Per Capita Cost
Kshs
Kshs
Kshs Boreholes & Wells
Kshs
No. of Beneficiaries
Per Capita Cost
Kshs
Rain Harvesting
Kshs
No. of Beneficiaries
Per Capita Cost
Kshs
Dams & Pans
Kshs
No. of Beneficiaries
Per Capita Cost
Kshs
Total No. of Beneficiaries
Per Capita Cost
Kshs
Kshs Activity Type 1
Kshs
No. of Beneficiaries
Per Capita Cost
Kshs
Activity Type 2
Kshs
No. of Beneficiaries
Per Capita Cost
Kshs
Total No. of Beneficiaries
Per Capita Cost
Kshs
Kshs Activity Type 1
Kshs
No. of Beneficiaries
Per Capita Cost
Kshs
Activity Type 2
Kshs
No. of Beneficiaries
Per Capita Cost
Kshs
TOTAL EXPENDITURE
TOTAL NO. OF BENEFICIARIES
Kshs
PricewaterhouseCoopers Financial Management Manual (Draft)
TOTAL PERIOD EXPENDITURE
AVERAGE PER CAPITA COST Kshs
Water Services Trust Fund
72
REPORTING FORMS – Form WSTF RF 3
WATER SERVICES TRUST FUND FINANCIAL REPORTING – COST CENTRES REPORTING PERIOD
REPORT DATE
Allocation % Personnel Emoluments
%
Motor Vehicle Expenses
%
Travel & Accommodation
%
Utilities
%
Telephone Expenses
%
Insurance (Non-motor)
%
Board Expenses
%
Office Running Expenses
%
Bank Charges
%
Staff Training Costs
%
Staff Expenses
%
Consultancies
%
Publicity & Advertising
%
Postal Expenses
%
Printing & Stationery
%
CC1
CC2
TOTAL PERIOD EXPENDITURE
CC3
CC4
CC5
KSHS
CC6
Cost Centre (CC) Key: CC1
Finance and Resource Mobilisation Department
CC5
Administration and Human Resource Department
CC2
Technical Appraisal Dept. – Transmission Systems
CC6
Sanitation and Hygiene Department
CC3
Technical Appraisal Dept. – Non-Transmission Systems
CC7
CEO
CC4
Field Co- ordination Department
PricewaterhouseCoopers Financial Management Manual (Draft)
Water Services Trust Fund
73
CC7
REPORTING FORMS – Form WSTF RF 4
WATER SERVICES TRUST FUND FINANCIAL REPORTING – GEOGRAPHIC LOCATION (Disbursements to Projects) REPORTING PERIOD WATER BOARD 1
WATER BOARD 2
WATER BOARD 3
REPORT DATE
TOTAL PERIOD EXPENDITURE Total No. of Beneficiaries
Per Capita Cost
Kshs
District 1
ASAL
Kshs
No. of Beneficiaries
Per Capita Cost
Kshs
District 2
HP
Kshs
No. of Beneficiaries
Per Capita Cost
Kshs
District 3
HP
Kshs
No. of Beneficiaries
Per Capita Cost
Kshs
District 3
HP
Kshs
No. of Beneficiaries
Per Capita Cost
Kshs
Total No. of Beneficiaries
Per Capita Cost
Kshs
Kshs
Kshs District 11
ASAL
Kshs
No. of Beneficiaries
Per Capita Cost
Kshs
District 12
ASAL
Kshs
No. of Beneficiaries
Per Capita Cost
Kshs
District 13
HP
Kshs
No. of Beneficiaries
Per Capita Cost
Kshs
District 14
ASAL
Kshs
No. of Beneficiaries
Per Capita Cost
Kshs
Total No. of Beneficiaries
Per Capita Cost
Kshs
Kshs District 21
ASAL
Kshs
No. of Beneficiaries
Per Capita Cost
Kshs
District 22
ASAL
Kshs
No. of Beneficiaries
Per Capita Cost
Kshs
District 23
HP
Kshs
No. of Beneficiaries
Per Capita Cost
Kshs
District 24
ASAL
Kshs
No. of Beneficiaries
Per Capita Cost
Kshs
GEOGRAPHIC REGION
TOTAL EXPENDITURE
TOTAL NO. OF BENEFICIARIES
AVERAGE PER CAPITA COST
ARID & SEMI ARID LANDS (ASAL)
Kshs
Kshs
HIGH-POTENTIAL AREAS (HP)
Kshs
Kshs
PricewaterhouseCoopers Financial Management Manual (Draft)
KSHS
Water Services Trust Fund
74
