FINANCIAL POLICY

FINANCIAL POLICY

GENESIS

The ideology behind initiatingAi??Pro-VisionAi??was that it should be an inspiring force in evolving people centric sustainable development designs that are evolved by working with and learning from people.

Pro-VisionAi?? where to buy obagi tretinoin online, where to buy obagi tretinoin online, where to buy obagi tretinoin online, where to buy obagi tretinoin online, where to buy obagi tretinoin online, where to buy obagi tretinoin online. was made a functional forum in the year 2000 in commemoration of the dawn of the new millennium that needed a new development vision. It was incorporated as a Trust in 2002 under Indian Trust Act 1882 and progressing incorporating the existing and emerging development perspectives and opportunities to make the world a better place for the humanity.

VISION

Collective Self Reliance of the Excluded and Vulnerable.

MISSION

Experiment and Replicate Evidence based Sustainable Strategies through Field based Interventions, Human Resource Development and Research.

OBJECTIVES

    1. To promote integrated development of the socially and economically downtrodden people of Tamil Nadu.
    2. To undertake relief and rehabilitation activities among those affected by natural and manmade disasters and strengthen community based disaster risk reduction.
    3. To promote awareness, train, organise and care people with chronic diseases including HIV/AIDS, cancer, diabetics and support their treatment and healthy living.
    4. To provide comprehensive rehabilitation services to persons with disabilities through surgery, physiotherapy, prosthetic and orthopaedic services and community based interventions.
    5. To promote the comprehensive development of the underprivileged children and youth through health, education, life skills and development activities.
    6. To undertake climate change adaptation and mitigation activities including organic farming and work for environmental sustainability.
  1. To work towards materialisation of Sustainable Development Goals 2015 in Tamil Nadu.
  2. To manage training and teaching institutions, rehabilitation homes and hospices to the differently abled, women, aged, terminally ill and other disadvantaged and vulnerable people.
  3. To train professionals and students on development strategies, rehabilitation services and other social work practices.
  4. To undertake need based research on social issues and document relevant information pertaining to the development sector.
  5. To collaborate with development organisations, educational institutions, corporate and governments in India and abroad to experiment and replicate evidence based sustainable strategies and models.

CORE AREAS OF INTERVENTION

  • HEALTH: Addressing issues related to HIV /AIDS, reproductive health, cancer and other chronic diseases.
  • DISABILITY: Prevention of disabilities, early intervention, community based rehabilitation and independent living initiatives.
  • GERIATRICS: Facilitating graceful aging by preventing treating diseases and disabilities in elderly.
  • CLIMATE CHANGE: Organic farming, CC adaptation and mitigation activities and community based disaster risk reduction
  • SUSTAINABLE DEVELOPMENT GOALS 2015: Network and co-ordinate with other agencies at the state level

In order to mainstream and effectively mange the financial resources; the following financial policy was adopted by the Board of Trustees which shall come to force from the financial year 2005 – 2006. The Board of Trustees shall have the power to introduce or amend classes as per the emerging requirement.

The purposes of the financial policy are:

  • to record all financial transactions
  • to monitor and control expenditures
  • to satisfy statutory reporting requirements
  • to ensure timely and accurate financial management
  • to report accurately to donors and grant-makers in time
  • to move towards financial sustainability

The Mission Statement of Financial Policy is:

Financial governance with more transparency at all levels of financial functions, institutional building, financial affiliations, preparation and presentation of books of accounts and statement of accounts on higher levels of accounting standards. An appropriate financial management based on Management By Objectives (MBO) with an aim of attaining financial sustainability of Pro-Vision Trust within five years.

2. ACCOUNTING POLICIES

For effective managements Double Entry System of accounting shall be followed. The day-to-day transactions should be recorded at the monetary value of the goods or services or fair market value of the donated services.

Income represents grants from donors, contribution by members, service charges by clients and associates and interest received from investments. Grants, cash donations and interest received are recognized as income during the financial period in which they are received.

Expenditure represents expenses incurred directly for programme activities, administration and programme related management expenses. These are recognized when payments are made (ie, when cheque or cash is disbursed).

 

The accounts shall be created to reflect the budget line items of the approved programme budget. The accounts shall be recorded only in Indian Rupees.

 

The administrative office of Pro-Vision shall bear the overall responsibility for distribution of funds to projects or project offices. In case of need, the transfer of funds to the project offices shall be made according to the programme budget, project milestones and it should be sufficient to meet the project requirements.

The administrative office of Pro-Vision shall monitor and ensure proper expenditure accountability by the project / project offices and individual staff and consolidate the expenses incurred for reporting purposes.

In addition, the administrative office shall also prepare a consolidated statement of accounts every year incorporating all the financial transactions of Pro-Vision Trust as a whole incorporating the transactions of the administrative office, projects / project offices and any other establishment within the overall objective of Pro-Vision Trust.

3. POWERS OF THE BOARD OF TRUSTEES

In all matters related to the finance the decision of the Board of Trustees shall be final and binding all the concerned parties.

All the files, registers and reports related to financial management should be maintained in the administrative office and should be available for inspection by the Managing Trustee and or by the nominee of the Board of Trustees.

In normal circumstance, the Chief Executive shall have the delegated powers and shall act on behalf of the Board of Trustees in matters that are explicitly delegated to him/her.

To assist the Board of Trustees and the Chief Executive in effective management of finance, a Financial Advisory Committee (FAC) shall be constituted. The FAC shall consist of:

1. The Managing Trustee of Pro-Vision ai??i?? Convenor

2. One of the trustees of Pro-Vision

3. One of the staff of Pro-Vision

4. One representative from a local NGO and

5. An expert in NGO financial management

The FAC shall meet at least once in a year and deliberate on issues related to financial administration.

Though the FAC is only an advisory body, under normal circumstances, the decisions of the FAC shall be fully implemented. Any deviation from the decision of the FAC should be considered only with the approval of the Board of Trustees.

 

4. FINANCIAL FILES, REGISTERS AND RECORDS TO BE MAINTAINED

The following files, registers, records, books or documents shall be maintained by Pro-Vision to ensure effective financial management.

  1. Receipts Book for domestic contributions
  2. Receipts Book for foreign contributions
  3. Voucher file for cash book
  4. Voucher file for petty cash book
  5. Voucher file for donations in kind
  6. A separate bank file for each bank account
  7. Fixed assets file/register
  8. Management reports (monthly, quarterly and yearly)
  9. Financial statements
  10. Audited accounts
  11. Budget file
  12. Separate files for telephone bills, municipal taxes, water tax, electricity bills etc..
  13. Income tax related file
  14. Register of Societies related file
  15. Foreign contribution / Home ministry related file

These are only illustrative and depending on the genuine need, additional files or registers could be created.

5. CASH MANAGEMENT AND DISBURSEMENTS

The purpose of cash procedures is to ensure that all cash received or spent is properly accounted for and all cash received is deposited intact in the respective bank accounts.

  • Programme advance to field office or staff should be made only on written request. The concerned staff shall prepare intent with necessary details and the same should be forwarded by the concerned project co-ordinator and approved by the Chief Executive.
  • On production of the approved request the cashier shall pay the advance.
  • All cash transactions are to be recorded in the cashbook and posted to the ledger by the accountant.
  • For all income or receipt in kind or cash, an official receipt should be issued. Generally only the Chief Executive is authorized to sign the receipt. However s/he could delegate this power to the Manager (Finance and Administration) or to the accountant.
  • All programme related payments are to be forwarded by the project co-ordinator, verified by the accountant and approved by the Chief Executive.
  • All administrative expenses are to be forwarded by the Manger (Finance and Administration) and verified by the accountant and approved by the Chief Executive.
  • On production of the approved payment voucher, the cashier shall pay the money or cheque as per the instruction.
  • All capital expenditures should be accompanied with three quotations and selected the best one with low cost and the same should be forwarded by the Manager (Fin. & Admin) and approved by the Chief Executive.
  • It should be duly signed also by the other persons involved in the process.
  • All vouchers should have adequate and authentic supporting documents and are to be properly stamped ai???paidai??? on making the payment.
  • Vouchers should be numbered in chronological order and should be preserved in good manner and available for verification at any time by competent authority.

Bank Account:

  • Separate Bank accounts are to be maintained for foreign contribution and domestic contribution. When the donor expects, a separate account shall be opened with the approval of the Board of Trustees.
  • When the same account is operated for more than one project, separate cost code within the general ledger should be maintained.
  • Keeping in mind the financial sustainability of the organization, Pro-Vision Trust shall take efforts to establish separate funds and operate under same bank account. In course of time separate accounts are to be maintained for Programme Reserve Fund, Staff Reserve Fund and Maintenance and Development Fund.
  • Ai??As far as possible payments are to be made by cheques. To start with all the capital expenses and salary to the staff shall be paid only in cheque.
  • Bank reconciliation statements are to be prepared every month by the accountant and the same shall be verified by the Chief Executive.

6. BOOKS OF ACCOUNTS

To be more effective, systematic record of financial transactions shall be maintained and they shall be posted in the ledger to prepare financial statements.

The Cash Book shall contain all receipts either in cash or in the form of cheques / drafts etc.

  • Cash receipts should be recorded in the cash column of the receipt (debit) side and the money received in the form of cheques / drafts should be recorded in the bank column of the debit side.
  • The credit side of the cashbook is for recording payments either in cash or in the form of cheques / drafts. Cash payment should be recorded in the cash column on the basis of vouchers; payments in the form of cheques/draft should be recorded in the bank column.
  • The cash book should be written in the chronological order of payments / receipts
  • A clear narration should be given in each transaction
  • The accountant shall close the cash book daily and the cash on hand must tally with book balance
  • Once in a week the Chief Executive shall physically verify the cash balance and book balance and record his/her remarks in the cash book

A general ledger shall be maintained to complete the system of double entry through posting. The general ledger shall contain

  • The closing balances other than cash on hand and cash at bank are brought forward as opening balances in the ledger under the respective heads of account from the last year balance sheet.
  • Entries from the cash book should be posted under the respective heads of accounts in the ledger
  • Entries from journal register under respective heads of accounts should be posted in the respective heads in the ledger.
  • Financial information including information on assets, liabilities, revenue, funding and expenses should be readily available in the ledger.]
  • Besides the general ledger, depending on the need, separate ledgers should be maintained for each project or specific intervention as decided by the Board of Trustees of Pro-Vision.
  • The accountant is responsible to maintain the accounts and produce the statements as and when required by the Chief Executive.
  • The manger shall ensure that the requirements are fulfilled in time.
  • The Chief Executive is responsible for producing all final general ledger outputs to the Financial Advisory Committee and the Board of Trustees of Pro-Vision.

Receipts and Payments accounts shall be prepared every month to reflect the movement of funds. Income and expenditure statement shall be prepared once in a quarter. The accountant is responsible to prepare the statements and the same should be approved by the Chief Executive. The Chief Executive shall present the statements in the Financial Advisory Committee and/or in the Board of Trustees of Pro-Vision.

The following statements shall be prepared regularly:

1. Monthly Financial Reports

2. Receipts and Payments Account

3. Income and Expenditure Account

4.Ai?? Balance Sheet

5. Budget Comparison Report

6. Investment Status Report

7. Donor Agency Status Report

8. Bank Reconciliation Statement

9. Legal compliance Report

7. BUDGETING AND BUDGETARY CONTROL

The purpose of budgeting and budgetary control procedures is:

  • To prepare an annual budget for the Trust as a whole reflecting the possible income and expenditure for the forthcoming financial year.
  • To prepare operational budgets for each project or unit or activity as per the requirement.
  • To record daily expenditure by the grant recipient budget code.
  • To record cumulative expenditure to date by budget code.
  • To compare and monitor cumulative expenditure by budget code.
  • To compare with the original (or revised) budget allocations from donors.

Keeping these principles in mind, Pro-Vision shall undertake the following exercises:

  • Prepare annual consolidated budget.
  • Prepare operational budgets for each project or unit or activity.
  • Record the original (or revised) budget for the financial year.
  • Post daily expenditure to the budget book, record cumulative expenditure and monitor remaining budget.
  • Obtain donor approval in advance for revisions in the budgets as a whole or for specific line items..

Any deviation from the approved budget should be brought to the attention of the Financial Advisory Committee and to the Board of Trustees of Pro-Vision. It could be effected only with the approval of the Board. In case of emergency, the Managing Trustee shall authorize such deviation. However the same should be ratified in the next meeting of the Board of Trustees of Pro-Vision.

8. PAYROLLS

The purpose of payroll procedures is to ensure that the employees are paid in accordance with letters of appointment, payments to employees are properly accounted for and statutory, voluntary deductions are properly accounted for and remitted to the appropriate authorities and salary advances are properly accounted for and recovered from salaries.

The following registers/records shall be maintained:

1. Personal payroll records

2. Salary advances

3. Preparation of payroll

4. Part-time employees

5. Payments and accounting entries

6. Incentives

 

The Managing Trustee is responsible to appoint regular and contract staff and fix their scale of pay in consultation with the Board of Trustees or the Financial Advisory Committee as per the requirement.

The Chief Executive is responsible for hiring part-time employees or casual workers depending on the programme for the year and there should be a budget for the service.

The payroll should comprise of an individual salary slip, individual payroll and a payroll analysis sheet. Any repayment of advances should be entered. The total of all deductions should be calculated and entered and this amount deducted from the gross pay to give the net amount payable to the employee.

For salary advances, the co-ordinator should prepare the list of names of all employees wishing to draw salary advances and the same should be approved by the Chief Executive. A cheque is prepared for the total amount to be paid and payment is made by the cashier to the employees who should sign against their names on the list as evidence of receipt

Salary advances should be restricted to a maximum of 50% of the employee’s monthly salary. Request for Salary Advance shall be in duplicate by filling in the following details Date, Name of employee requesting advance, Reasons for the advance and Amount of the advance with Employee’s signature.

A payment voucher should be prepared for the net pay as per the payroll summary sheet and the amount debited to Salaries Control Account and credited to cash. At the same time, from the payroll summary sheet, a journal voucher should be prepared to update the books of accounts.

9. REPORTING AND AUDITING REQUIREMENTS

The purpose of the reporting requirement procedures is to define the type, content and frequency of reports.

Every month, the accountant shall prepare and submit the following reports to the Chief Executive for his/her verification and appropriate action.

1. Monthly Financial Reports

2. Budget Comparison Report

3. Investment Status Report

4. Donor Agency Status Report

5. Bank Reconciliation Statement

6. Legal compliance Report

The Financial Advisory Committee shall be convened twice a year and the Chief Executive shall present the financial and programme reports along with the budget comparison statement for the opinion and suggestions of the Financial Advisory Committee.

After obtaining the opinion of the Financial Advisory Committee, the same is presented in the Board of Trustees meeting by the Chief Executive for their perusal and necessary action.

Annually, Financial audited statements including Income and Expenditure Statement, Receipts and Payments A/C, Balance Sheet shall be prepared by an external auditor after a thorough scrutiny of the vouchers and the accounts.

  • The audit should ensure that Pro-Vision complies with statutory audit requirements.
  • Audit should be done for the organization as a whole as well as for each project or unit as per the requirement
  • The audit shall be carried out usually for the financial year ending March 31 of every year.
  • How ever when the financial year of a specific project ends in between, audit shall be carried out as per the project year also.
  • The audit should be completed within 2 months after the close of the grant period of the fiscal year or project year
  • The audit report should be submitted to donors within 30 days after the completion of the audit.
  • The audit report shall be sent to the donors or the Government departments or registrar only after the report is placed in the Board of Trustees meeting and approved by them.

10. FINANCIAL SUSTAINABILITY

Attainment of financial sustainability is one of the top most priorities of the organisation. The Chief Executive and the staff team are responsible to formulate a time bound action plan for sustainability and materialise the same. Financial sustainability should be achieved through:

  • Over seas contribution
  • National donors’ contribution
  • Public donations and
  • Self generated funds

The self generated funds shall include programme registration, service charges, project contributions, revenue from income generating ventures.

  • Self generated funds should be transferred to the reserve fund every year.
  • When the reserve fund exceeds the minimum required amount, the excess money should be transferred to the corpus fund or any other fund established with sustainability in mind.
  • Support from donor agencies also shall be attempted to strength the corpus fund or sustainability fund.
  • As long as external support is available the capital gain from the corpus fund shall be reinvested and augmented to the existing reserve.
  • In this context, sustainability implies that the capital gain from the corpus fund or sustainability fund and/or returns from investments and/or establishments should be sufficient to meet the core programme expenditure, core staff requirements and the basic administrative expenditures.
  • The master budget for every year should reflect measures taken for the attainment of sustainability.
  • The progress should be reported to the Financial Advisory Committee periodically and the same should be presented to the Board of Trustees.

11. CONCLUSION

The financial policy of Pro-Vision is only a guide to ensure effective management. As it is not comprehensive enough to meet the emerging needs of the trust, the Board of Trustees may issue directions as per the emerging needs, situations and requirements.

The above financial policy shall be practiced through out the year and in all financial transaction with vow to accountability and transparency.