The Treasurer shall have custody of the funds, securities and assets of the Corporation. He shall likewise oversee the financial procedures in the Operations Manual. The Executive Director or the Deputy ED, in consultation with the Treasurer, will jointly authorize the opening of bank accounts, including accounts to be maintained at branches and offshore locations. Bank accounts shall be opened with commercial banks with global or regional presence and of internationally recognized standing and reputation.
In order to facilitate the financial procedures and management of cash, the Center shall open bank accounts, including at least:
· a US$ checking account
· a PhP checking account
· a US$ investment account
The Head of FAS shall recommend to the Executive Director or the Deputy ED and the Treasurer, the need to open additional bank accounts when necessary.
The Center’s funds shall only be deposited into the Center’s bank accounts. Personal or other non-official funds must not be deposited into the Center’s bank accounts.
All bank balances shall be reconciled with the accounting records on a monthly basis. Reconciling items must be verified and adjusted as soon as possible and not later than 60 days.
Dual signatories are required for any withdrawal or disbursement from bank accounts, including request for fund transfers above US$50,000.
The signing authority limits for Checks/Bank Credit Advices follow:
Up to US$50,000 - Executive Director or Deputy ED
US$50,001 to US$150,000 - Executive Director co-signed by the Treasurer of the Board of Trustees
Over US$150,000 - Executive Director co-signed by the Treasurer and the President/Chairman of the Board of Trustees
The Executive Director or Deputy ED designates the signatories and determines the related financial limits of authority up to US$2,000.
Signatories are responsible for ensuring that checks and bank transfer requests are properly prepared and supported by approved adequate documentation and authorizations.
To ensure the utmost security of bank accounts against unauthorized access and use, electronic banking shall be made available only to the Center’s bank account used for general operating disbursements. Use shall be limited to payments/transfers for the following:
· Taxes and withholding tax remittances
· Government trust account contributions
· Staff cash advances
· Remuneration of staff
· Replenishment of Petty Cash and Revolving Funds
Electronic banking may be made available to other bank accounts but use shall be limited only to inquiry and fund transfers to the Center’s bank account used for general operating disbursements.
The authority and access codes for the bank accounts shall be assigned only to the Head of FAS and the Executive Director and they should exercise due care to ensure the utmost security and control of the access codes. The Head of FAS will be responsible for payments and transfers via electronic banking. However, all transactions shall only be done with approval by the Executive Director.
Temporary excess funds shall be invested in short-term and low-risk investments such as time deposits and government treasury notes. Funds shall not be invested in any speculative type of investments.
Funds shall be invested in commercial banks of internationally recognized standing and reputation and with global and regional presence. A bank's credit rating shall be one of the factors to be considered, among others.
The period or term of placements shall depend on cash flows position as determined by Finance.
The Executive Director or Deputy ED, in consultation with the head of FAS, shall determine the most efficient investment strategies and shall report investment performance to the Board on a quarterly basis.
The Board of Trustees shall approve the selection of an asset managing firm or commercial bank to manage the temporary un-disbursed funds of the Center.
Accountability
Cash box funds shall be maintained under an Imprest Fund system and responsibility and control lies with the designated cash custodian. The funds are counted and reconciled on a weekly basis and request for replenishment is prepared when the cash balance falls to 30% of the approved Cash Box limit, or based on need.
Authority and amount
Setup of a Cash Box is authorized by the Head of FAS or the Executive Director as follows:
(i) The Center shall maintain a Petty Cash Fund (PCF) amounting to PhP100,000. Records and use of each PCF shall be accounted separately, and should never be combined by the custodian.
(ii) Amounts for other Imprest funds to be established, such as a Revolving Fund for a branch or a specific project, shall be determined by the Head of FAS or Executive Director (see 9.3.3). Revolving Funds are imprest funds that are established to serve as a fund for the use of a Branch or a Specific Project. Like petty cash funds, revolving funds are controlled by a custodian and use of the funds is limited for a specific purpose. The amount of fund to be established and the maximum amount of disbursements that can be taken from the fund shall depend on the requirements of the branch or project.
The Head of FAS or the Executive Director shall perform a surprise cash count of the Cash Box at least on a quarterly basis.
Amounts Reimbursable
A Cash Box is only for operational expenses not exceeding PhP5,000 per transaction. Exceptions for justifiable circumstances, such as an unplanned urgent purchase, are allowed subject to prior approval of the Head of FAS.
Requirement for Reimbursement
Expenses paid from the Cash Box shall be supported by valid receipts and/or invoices and other relevant documentation to support the expenses.
A valid receipt, invoice shall show the following, among others:
· Name of the payee or supplier
· Date of the transaction
· Control number reference
· Quantity and description of the item purchased
· Unit prices and extended totals
· Currency
· Total amount paid net of discounts, if any.
· Duly signed/authorized or machine validated
Any receipt showing a sign of counterfeiting or manipulations in the receipt such as erasures or other unusual markings, shall not be valid.
Disbursement
All payments out of a Cash Box shall be covered by a duly approved Request for Petty Cash (RPC) (see Annex 28). No payment shall be made by the custodian without a duly approved RPC or with amounts in excess of US$100 for USD requests or equivalent for PhP5,000 unless approved by the Executive Director or the Deputy ED. "Custodian" as used in this section refers to a staff from FAS.
All RPCs shall be approved by the respective Division Heads or Branch Heads.
The disbursement from PCF creates an advance made by the person receiving the amount which should be liquidated immediately and no later than 30 days from receipt of the petty cash. Unliquidated RPCs are deducted in full from the relevant staff’s nearest payroll or from the nearest payments of the relevant consultants’ remuneration.
Liquidation of the Request for Petty Cash
All RPCs shall be accounted by the custodian and follow-ups should be made for the liquidation of outstanding RPCs. A Fund Liquidation Form (FL) (see Annex 29) shall be filled-up when liquidating RPCs or claiming reimbursements for petty expenses incurred.
The procedures to be applied in the processing for payment and liquidation of RPCs are as follows:
1. The Cash Box custodian (custodian) receives the RPC and assigns a reference number (numbered as used) to the RPC for tracking purposes.
2. The custodian disburses the amount and ensures that the recipient acknowledges the amount received.
3. The custodian files the RPC and records the RPC in a logbook indicating the control number, date, recipient and amount.
4. When the RPC is liquidated, the staff prepares a FL and attaches the corresponding supplier’s Invoice/Billing Statement/Statement of Account, Credit Card Receipt, Official Receipts and other supporting documents and other details (as applicable) to the FL and have this reviewed and approved by the staff’s immediate superior.
5. The staff submits the approved FL, together with all supporting documents, to the custodian.
6. The custodian attaches the originally signed RPC to the FL and checks the details and completeness of the documentation.
7. Excess or unused amounts are returned to the custodian. When total expenses exceeded the amount in the RPC, the deficiency shall be refunded to the staff.
8. The custodian files the FL and updates the logbook indicating the date the RPC is liquidated. The custodian issues a cash advance Clearance Document (see Annex Annex 30) to the staff indicating the full settlement of the petty cash.
9. When the FL is in order and recorded, the RPC, FL and all attached supporting documents shall be cancelled immediately to avoid reuse of the documents. The cancellation is evidenced by using a rubber stamp imprinted with the word PAID in red ink across the face of the CV, invoice and other documents.
10. When the PCF balance reaches 30% of the authorized limit of the Cash Box, or when a need is expected, the custodian prepares a PCF replenishment summary indicating among others, the RPC reference, date, amount and the specific expense account or other appropriate accounts.
11. The custodian prepares a request for check payment (see Section 12.2) corresponding to the total expenses indicated in the FL replenishment summary.
12. The PCF should be accounted by the custodian on a weekly basis and the reconciliation schedule is filed for future reference.
Cash Position Report
A Cash Position Report (see Annex 31) that shows the actual cash in bank balances shall be prepared on a weekly basis (or when need arises). The Cash Position and Bank Balances shall be reconciled to recorded book balances on a monthly basis.
Cash Flow Report.
A Cash Flow Forecast (see Annex 28) that summarizes the expected cash receipts and disbursements for the next month shall also be prepared and updated on a monthly basis.
To ensure that the Center will have sufficient operating funds at all times, the FAS shall ensure that it shall maintain at least a minimum cash balance sufficient to cover operational expenses for a period of 2 months with short term investments sufficient to cover an additional 2 [4] months of operations expenses. The CAI-Asia Center will also endeavor to secure signed grants, sponsorships, and private sector memberships to cover operational expenses for a period of 8 months.
The Accounting system of the Center shall be maintained on a computerized accounting system capable of handling multi-currency reporting. While transactions are recorded in their original currencies, financial transactions are translated into USD and PhP for reporting purposes.
While the USD is the widely accepted global trading currency, the Center may accept funds from donors in all acceptable currencies other than USD.
The FAS shall determine and shall publish the exchange rates to be used by the Center which exchange rates shall be derived from the rates published by the Philippine Dealing System (PDS) or from the Banko Sentral ng Pilipinas. To simplify recording, one set of rates may be used for a 2 week period commencing 1 and 15 of each month based on the average daily rates of the previous month.
Foreign currency transactions are converted to the reporting currency values based on acceptable accounting standards and using the exchange rates in Section 10.4.1. Exchange gains or losses are recognized and reported in the period when the transactions occurred.
Transaction Gains or Losses
Exchange gains or losses arising from the difference in the original booking rate and the rate at the time of payment or receipt represent realized transaction gains or losses that are recognized and reported in the period when the payment or receipt occurred.
Translation Gains or Losses
Exchange gains or losses arising from the translation of monetary balances (or balances/amounts that are payable or collectible in cash in a future period) from their recorded original booking rates to the spot rates at a given date (e.g. monthend rate). The translation exchange differences are unrealized gains or losses that are recognized and reported during the reporting period.
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