YWLA Financial Management Skills June 17th, 2010

1.  YWLA Financial Management Skills June 17th, 2010

2. Agenda Financial Management and Control Budgets Accounting for NGOs Audit Points

3. Management Planning Organizing Controlling Monitoring

4. Financial Management and Control Planning Organizing Controlling Monitoring Reach

5. Financial Management and Control Manage scarce resources : funds increasingly scarce Manage Risk : limit damage (ex: fraud) Manage strategically: �bigger picture�, long term planning Manage by objectives : Plan Do Review

6. Financial Management and Control Plan : Set budgets Do: Implement plans- receive and spend funds Review: Monitor budgets Build in learning and take action ? Plan again

7. Financial Management and Control Good financial management will: Help managers make effective use of resources to achieve objectives Help the NGO become more accountable to donors Gain the respect of funding agencies Give the NGO the advantage in competition for increasingly scare resources Help the NGO prepare for long- term financial sustainability

8. Financial Management and Control Financial Control : the heart of financial management Establish systems and procedures to make sure resources are properly being handled Should develop a policies and procedures manual for the NGO

9. Financial Management and Control The Seven Principles Consistency (policies and systems) Accountability (explain how funds are being spent) Transparency (being open) Viability (measure of financial continuity and security) Integrity (honesty and propriety) Stewardship ( resources are being used for the intended purpose) Accounting Standards ( system for keeping financial records)

10. Financial Management and Control �CAT VISA� ? Use these principles as a checklist to identify the strengths and weaknesses of your organization

11. Financial Management and Control

12. Financial Management and Control Exercise Time!!!!! ?

13. Financial Control

14. Financial Control

15. Financial Control

16. Financial Control

17. Financial Control

18. Financial Control

19. Financial Control

20. Financial Control

21. Financial Control

22. Financial Control

23. Financial Control

24. Financial Management Tools Planning (strategic plans, cash flow forecast ,etc.) Organizing (org charts, job descriptions, etc) Controlling (budgets, procedures manual, etc) Monitoring (evaluation reports, financial reports, etc)

25. Budgets and Costs �A budget describes an amount of money that an organization plans to raise and spend for a set purpose over a given period of time� Budget Functions : 1-Planning 2-Fundraising 3-Project implementation 4- Monitoring and evaluation

26. Budgets and Costs What makes a good budget? Easy to read Calculations are clear Fully justified and accurate Explanatory notes are provided 1,2,3,4,5,6,71,2,3,4,5,6,7

27. Budgets and Costs What are the objectives of the project? What activities will be involved in achieving these objectives? What resources will be needed to perform these activities? What will these resources cost? Where will the funds come from? Is the result realistic?

28. Budgets and Costs

29. Budgets and Costs Exercise 30 Minutes

30. Accounting for NGOs Good financial records are the basis for sound financial management Information Credibility Legal requirement Future requirement

31. Accounting for NGOs Which accounting records should you keep? Receipt or voucher for money received Receipt or voucher for money paid out Invoices- certified and stamped as paid Paying �in vouchers for money paid into the bank Bank statements

32. Accounting for NGOs Other useful supporting documents Payment vouchers Local purchase orders Goods received notes

33. Accounting for NGOs

34. Accounting for NGOs Invoices / receipts A valid receipt is the original written receipt, or other documentation. Examples : Plane ticket stub, supplies invoice, taxi receipt, etc. Copies are acceptable only in rare instances when receipts need to be retained for in-country VAT reimbursement

35. Accounting for NGOs Invoices / receipts Name/ address of vendor providing goods and services Date of transaction Description of goods & services provided Total amount of the goods or services Signature of the individual seeking reimbursement 1111

36. Accounting for NGOs Further requirements Costs incurred that are over 1,000 USD: three bids must be submitted with the reconciliation. If the least expensive is not chosen a decision memo Hired staff salaries: signed timesheets are required, plus proof of payment (payroll slip) Checks MUST be in the name of the first beneficiary Meetings & conferences: list of participants; agenda, fully itemized bill 14,1514,15

37. Accounting for NGOs Further requirements Mileage log : reimbursed for the business use of a personal vehicle. Provide date, time, purpose, location, etc. Multiply kilometers by rate. Submit with voucher form for reimbursement Inventory Log: Tracking number, tag number, description, quantity, location, acquisition cost, vendor name 14,1514,15

38. Accounting for NGOs Salaries Employee must fill out a timesheet, which is then verified by his/her supervisor/ manager Timesheet must be signed by both parties Checks MUST be in the name of the employee (i.e. first beneficiary) Proof of receipt 16,1716,17

39. Audit Points Organization Organization chart (responsibilities among personnel) Human Resources Job descriptions Employee files including CV, contract, salary history, performance evaluations Records of compliance with payroll tax laws

40. Audit Points Procurement Written policy ensuring competitive acquisition of supplies and equipment Contract/purchase records (date, cost, vendor, terms) Records tracking personal use of assets vehicle logs, phone/fax logs Inventory of furniture and equipment Tags on furniture and equipment

41. Audit Points Finance A safe for cash on hand Copies of all past financial records and reports Current period accounts up-to-date

42. Read your agreements VERY well Communicate with your donor (try to get things in writing) �Don�t assume� Keep files organized Don�t panic and learn from mistakes ?