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NGO Financial Management Policy Template


Purpose

 

1.     roles and responsibilities for every person in the organisation who has some role in financial management or procedures

2.     financial planning and reporting that NGO Name should undertake each year

3.     financial policies to be followed by every person in the organisation

 

Key Principles

 

The key principles on which all NGO Name Financial Policy is based are:

 

Organisation Funds


1.     Organisational funds belong to the NGO NAME. They should not be used for private purposes, including private grant or loan.

2.     Funds should be carefully used in an effective way in the best interests of the organisation.

3.     All Board, Staff and members are responsible for the careful and honest use of funds.

4.     Funds granted to NGO NAME for a specific purpose will be used for that purpose.

 

Collective Accountability


1.     All Board members and staff of NGO NAME have a collective (shared) responsibility for the financial health of an organisation.

2.     Each person has specific financial responsibilities. Some responsibilities are larger than others, for example the Treasurer and Administration Officer.  However everyone on the Board and all staff dealing with finances must share responsibility for the careful and honest use of the organisational funds

3.     Everyone on the Board is also responsible for examining and questioning the monthly financial report and for formally approving it.

 

Transparency


1.     All financial documents and reports should be available to all members of the Board and all staff members with financial duties.

2.     Annual accounts should be available to all members.

3.     Generally there is no reason for the Board to withhold any financial report from a member.

 

Separation of Duties


1.     This principle states that no one person covers all financial tasks. Where ever possible, financial tasks are split between two or more people. 

2.     Usually one person will DO the task and another person will CHECK the task is done correctly.

 

 

Roles and Responsibilities

 

Chairperson

 

In relation to NGO NAME's Financial Management policies and procedures, the Chairperson will undertake to:

 

1.     ensure the NGO NAME has written financial policies and procedures that have been adopted by the NGO NAME Board

2.     ensure that the Board and staff have a copy of these, have read them and understand them

3.     ensure financial management policy is implemented effectively

4.     ensure a yearly Budget is prepared and approved by the Board and that a six monthly review is carried out

5.     ensure the Board meets regularly (monthly if possible) to review and approve financial reports

6.     liaise with Treasurer and Financial Committee to ensure financial reports are prepared

7.     read and question monthly financial reports

8.     act as a cheque signatory

9.     check the Payment Voucher and the individual cheque before signing and authorising the payment

 

Treasurer

 

In relation to NGO NAME's Financial Management policies and procedures, the Treasurer will undertake to:

 

1.     ensure financial management policy is implemented effectively

2.     liaise with Chairperson on financial matters and bring any irregularities to her attention urgently

3.     ensure a yearly Budget is prepared and approved by the Board

4.     ensure financial reports are prepared for the Board and check their accuracy

5.     present these reports to the Board and be able to answer questions on these reports

6.     act as a cheque signatory

7.     check the Payment Voucher and the individual cheque before signing and authorising the payment

8.     check the monthly Bank Reconciliation against the Bank Statement

9.     ensure cheque butts are completely correct and are readable, regularly carry out spot checks on procedures and financial documents

 

Financial Committee

 

In relation to NGO NAME's Financial Management policies and procedures, the Secretary will undertake to:

 

1.     liaise with the Chairperson on financial matters

2.     meet monthly to review and approve financial reports prior to the Board meeting

3.     check the monthly bank reconciliation against the bank statements

4.     as appropriate carry out spot checks on procedures and financial documents

5.     on a monthly basis, check the payment voucher file to ensure all payment vouchers for that month have been completed

 

Board Members

 

In relation to NGO NAME's Financial Management policies and procedures, all Board Members will undertake to:

 

1.     attend Board meeting regularly

2.     read and understand NGO NAME Financial Policy and Procedures

3.     learn to understand the financial budgets and financial reports

4.     approve the NGO NAME Annual Budget

5.     read and question monthly financial reports that are tabled at the Board meetings

6.     approve these monthly financial reports and specifically the monthly payments

 

 

Director

 

In relation to NGO NAME's Financial Management policies and procedures, the Director will undertake to:

 

1.     manage the organisation's financial systems efficiently

2.     prepare the annual budget in consultation with the Chairperson and Treasurer

3.     act as a cheque signatory

4.     check the Payment Voucher and the individual cheque before signing and authorising the payment

5.     on a monthly basis check the Payment voucher file to ensure all payment vouchers for that month have been completed fully

6.     check the monthly Bank Reconciliation against the Bank Statement

7.     assist as necessary with the preparation of the month financial report and review it

8.     inform the Treasurer if any budget line is close to budget

9.     ensure all financial records are kept up to date

 

Administration Secretary

 

In relation to NGO NAME's Financial Management policies and procedures, the Administration Secretary will undertake to:

 

1.     receipt all income and bank daily

2.     ensure all income is banked by the last day of the month

3.     make all payments on the due date using a payment voucher

4.     ensure all appropriate documents are attached to payment vouchers and file them in cheque order

5.     ensure the voucher is signed by any client after receiving payment

6.     take responsibility for the cash box and petty cash recording

7.     input I&E data into the electronic cashbook on a weekly basis and ensure these are identical to the hard copy

8.     backup all financial electronic files weekly

9.     carry out the monthly bank reconciliation, prepare the monthly Income and Expenditure report and submit this to the Director for presentation at the monthly Board meeting, ensure records are kept up to date

 

 

Financial Policy Summary

 

Financial Planning


1.     A full organisation budget will be prepared annually

2.     A budget review will be undertaken after six months

 

Bank Account

1.     NGO NAME will hold a bank account

2.     All NGO NAME income and expenditure must go through the NGO NAME bank account

3.     The signatories to the NGO NAME bank account be the Chairperson, Treasurer and the Director.

4.     Two signatories are required on each cheque

 

Income

1.     All income is receipted

2.     All income is banked into the NGO NAME bank account

3.     No unbanked income is used for petty cash

4.     Ideally income is to be daily but must be banked weekly. All Income, no matter how small, is always banked by the end of the month.

 

Expenditure

1.     All expenditure must have an approved budget allocation

2.     No blank cheques are to be signed by any cheque signatory

3.     The Administration Officer will sign cheques only when two Board members are unavailable

4.     Where possible, services are to be obtained by setting up of an account with payment to be made on the 20th of each month.

5.     All payments over $50 are to be paid by cheque payment

6.     Every cheque payment must have a Payment Voucher completed

7.     Each Payment Voucher is to be authorised by the people who sign the cheque it relates to

8.     Payment vouchers are to be signed by the person who receives the cheque wherever possible

9.     Separate Payroll records are to be kept for all salaries and wages

10.Small payments under $50Tala may be paid using the Office petty cash, at the discretion of the Director

11.The office petty cash total be $200

12.No cash cheques are to be issued over $200

 

Accounting for Income and Expenditure

 

1.     Income and Expenditure is to be accounted for

2.     Electronic records are kept using the linked Excel cashbook

3.     Income and expenditure data is entered into the cashbook on a regular basis, at least weekly

4.     A bank reconciliation is carried out monthly.

5.     The bank reconciliation is to be checked by the Director and the Finance Committee

 

Reporting

 

1.     A monthly bank reconciliation report is prepared and printed. This reconciliation is reviewed and checked by both the Director and Finance Committee. It is to be attached to the bank statement it relates to and filed in the Bank Statement file.

2.     Monthly Income and Expenditure reports for the organisation are to be prepared and printed by the Administration Secretary

3.     Monthly financial reports are presented by the Treasurer at the monthly Board meeting

4.     After approval by the Board and signed by the Treasurer, the monthly report should be filed in a  separate file

 

Record Keeping

 

The following records are to be kept and maintained by staff. The files are to be kept in a safe and secure place known to and approved by the Treasurer and Chairperson.

 

1.     Physical records: Receipts books, cheque books, income file, payment voucher file, bank statement file, IRD, NPF and ACC files, Monthly Income and Expenditure file

2.     Electronic records: The Excel cashbook is to backed up on a weekly basis onto a diskette or USB Drive (Data Pen).

3.     At the end of the financial year, the financial records for that year are to be archived and stored in a safe place.

 

Annual Accounts and Audit

 

1.     Annual Accounts are to be prepared

2.     Annual Accounts are to be audited

3.     Annual Accounts are to be presented to members at the Annual General Meeting

 

Misuse of Funds

 

1.     Any suspected misuse or misappropriation of funds will be investigated by the Chairperson and Treasurer

2.     Once the investigation is to follow fair procedures. Once completed and the facts clearly established, the Chairperson / Treasurer will take appropriate action. For minor issues this may be kept to internal disciplinary action. For serious offences, the matter will be referred to the Police

3.     The Chairperson will inform the Board of any serious offences and the action taken

 

Board Volunteerism

 

1.     The NGO NAME Board members agree to work for the organisation in the spirit of volunteerism

2.     No Board meeting allowances will be paid

3.     All work done for NGO Name by Board members will be unpaid



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