Funds can only be utilized or committed within approved budgets, and in accordance with the project plans and in overall compliance with the objectives of the Center.
Obligations, commitments or payment of funds can only be made upon approval by authorized personnel, and in accordance with specific procurement, recruitment or other policies of the Center.
Funds may only be utilized for projects with adequate cash balance, unless otherwise approved by the Executive Director.
The Center is not responsible for any expenses that have occurred without the appropriate approvals from authorized personnel.
Internal financial control is maintained for effective examination and review of financial transactions to ensure:
· Supporting documentation is adequate; that the goods and services have been satisfactorily received and not previously paid for;
· Regularity of the receipt, custody and disposal of all funds;
· Conformity of expenditures and commitments with all the allocations; and
· Optimal use of resources in line with the overall policies of the Center.
On or before the 15th day of the third month after the close of its taxable year, the Center shall directly utilize the funds received for the active conduct of the activities constituting the purpose or functions for which it is organized and operated, unless an extended period is granted by the Secretary of Finance; and that the following utilization requirements are met:
a) The amount of utilization for administrative expenses shall not exceed thirty percent (30%) of the total grants/donations and income received for the taxable year;
b) Amounts set aside or to be set aside for a specified project must have the prior approval of the Commissioner of Internal Revenue in writing, pursuant to laws or administrative regulations presently in effect or may be promulgated from time to time.
Except for commitments under staffing contracts, no contract, agreement or undertaking for any amount will be committed until funds have been reserved in the accounts. The FAS will prepare for obligation when a valid request is received and funds are available.
An obligation can be created through approval of any of the following documents; Contract, Service Agreement, Purchase Order, Request for Advance or Request for Payment.
The amount is obligated by FAS upon receipt of a certified request for an agreement, contract, purchase, advance, or payment from the relevant Division. The request must be accompanied by appropriate supporting documentation and any further explanation or justification as may be required.
In all cases, request to approve a proposal to spend funds must be agreed by FAS which will:
- check against the budget to ensure that sufficient funds are available in the relevant budget line for the expenditure; and
- if funds are available, approve the proposed expenditure and obligate funds accordingly. This obligation is recorded immediately in the financial system.
The record of the obligation entails that the amount specified is no longer available for other project or operational expenditures. The obligation of funds represents a commitment and when a claim for payment is submitted and approved, the corresponding obligation will be paid.
Although the obligation will appear in the fund status report in USD, the actual obligation is accounted in the currency of the proposed transaction. The USD amount of the un-liquidated obligation may therefore vary with exchange rate from report to report. Information is distributed to the projects on a monthly basis. More frequent follow up can be done directly by accessing the accounting system or with FAS as needed.
Advances are payments made before the actual expenses have occurred and thus the necessary supporting documents (such as receipts, invoices, ticket stubs, etc.) are not yet available.
There are range of advances permitted such as travel advances, advances for workshops and training activities, and revolving funds.
Cash advances shall be for the implementation of projects or operational expenses; funds shall not be used for personal cash advances.
Upon recommendation by the Executive Director and subject to the approval of the Head of FAS, advances for travel, workshops and related activities may be extended to consultants duly hired by the Center. FAS shall ensure that the consultant has sufficient balance in their contracts to cover for any unliquidated advances at any given time.
Request and Approval
To receive approval for an advance, other than travel advances, a Request for Cash Advance Form (RCA) (see Annex 33) should be put forward. Depending on the nature of the advance, different procedures are required. All cash advances shall be covered by a duly approved request signed by the respective Division heads up to US$2,000 and provided these are budgeted; unbudgeted amounts and those in excess of US$2,000 shall require the approval of the Executive Director or Deputy ED up to US$50,000.
For travel advances, an approved Travel Authorization Form (TA) shall be required in place of a Request for Cash Advance.
The approved advance request should be sent to FAS for payment processing. When the FAS has ensured that the advance request meets requirements, a Check Voucher (see Section 12.3) will be prepared. The request, together with other supporting documents, will be attached to the voucher as evidence and payment will be made accordingly. Unutilized advance balances must be returned within five (5) days upon settlement of the advance, and similarly, if the activity is cancelled, the cash advances should be returned without delay. Failure to return advances within the set time frame will require FAS to deduct the amount from the responsible person’s payroll.
New advances will normally not be paid out before previous ones are settled.
Responsibility and Settlement
The person who signs as receiving the advance is accountable for the full and timely settlement of the advance. Cash advances shall be settled/liquidated no later than 30 days from utilization of the advance.
In general, there may be three types of advance settlement, which are described in more details as follows:
1. Advance to be Cleared with Expenditures: Upon completion of the activity, the advance holder shall prepare a request for clearance of advances. The Cash Advance Liquidation Form (CAL) (see Annex 34) can be used for this purpose. The form should be submitted to the FAS for processing in the accounting records and filling.
2. Advance to be Cleared with Cash Return: Any remaining unused cash should be returned to FAS within five (5) days upon completion of the activity, and after clearing the advance. FAS will issue an official receipt for such cash returned and clear the advances in the accounting records. Upon receipt, FAS will ensure that the cash is deposited to the bank within the next day.
3. When Expenses Exceed the Advance Taken: Actual expenditures may exceed the approved advance paid based on an initial estimate. The advance holder must justify in writing the reasons for the additional expense, which must be concurred by the respective Division head and head of FAS. A Request for Payment or a Request for Petty Cash shall be prepared by the custodian depending on the amount payable to the staff.
Supporting Documentation Requirement
All expense claims/settlements must be accompanied with original receipts or paid invoices. As a minimum, these receipts should carry the name and address of the supplier, as well as quantity and specification, unit prices, currency and total price of goods or services purchased. Possible discounts must be clearly specified.
When no formal receipt document is available, a certification should be made by the staff who incurred the expense indicating the information required above and a clarification why a formal receipt was not issued.
The FAS is responsible for verifying that the advance has been used in accordance with the detailed budget breakdown that formed the basis of the advance request. Possible inappropriate or inconsistent use will be reported to their respective superiors.
When FAS has ensured that the liquidation report and supporting documents meets requirements, a Clearance of Advance document (see Annex 30) shall be issued, a Journal Voucher (see Annex 35) will be prepared and the submitted documents will be attached to the voucher and filed for posting in the accounting system.
If any of the supporting documents accompanying a claim are found to be counterfeit, manipulated, or in other ways untrue, an investigation will be launched and the person responsible will face disciplinary action.
Other expense may have certain additional requirements as outlined below:
- Staff remuneration, consultancy/professional fees and related expenses, are in general regulated in the Personnel Manual section, and these expenses are approved and paid over the payroll system or through separate check payments. Signed contracts (letter of appointment, or extension) are required.
- Travel expenses, including air tickets and Per Diem are regulated in the Administration Manual section.
- Contractual services and goods are regulated by the procurement procedures included in the Administration Manual section. Financial processing may only be made upon confirmed correct procurement procedure and satisfactory supporting documents.
- Payment for contractors is regulated by their respective contacts, administered through the Procurement procedures. The project head must submit a request for payment to the FAS Procurement team, in accordance with the payment modalities of the contract.
- Payment for Subgrants is regulated by their respective Subgrant Agreement administered by the Project head. Request for payments shall be made in accordance with the payment modalities of the agreement and shall be accompanied by a statement or billing from the organization requesting the payment. The payment request shall be sent to the FAS finance team for further processing.
- Hospitality or "representation and entertainment" is a form of courtesy to outside person such as donor representatives and high-level government representatives in the course of business. It commonly involves payment for meals. All claims for hospitality must be evidence with receipts, including a written justification/purpose and a complete list of who participated, including both Center’s personnel and outside persons, and venue. All claims for hospitality must be certified by the Executive Director or Deputy ED. Any staff, except the Executive Director and the Deputy ED that plans to incur hospitality costs must request an advance to ensure approval prior to the hospitality event. The Executive Director and Deputy ED may make hospitality claims retroactively.
General Guidelines on Representation
a) The head of FAS is responsible for advising Management on policy and limits to be established, from time to time, in connection with representation expenses.
b) Except for representations to be incurred by the Executive Director or Deputy ED, requests for representations shall be made in advance and before incurring the expense. A Request for Petty Cash (for amounts up to US$100 or Php5,000) or a Request for Cash Advance (for amounts over US$100 or over Php5,000) shall be put forward. On exceptional cases, a staff may incur representations and request reimbursement later provided that there is prior concurrence of approval officers.
c) Advances shall be liquidated and cleared in accordance with the petty cash or cash advance liquidation requirements.
d) Division Heads are authorized to approve advances for representations up to US$200. The Executive Director shall approve amounts in excess of US$200.
e) The host should ensure that the number of other CAI-Asia staff as invited guests should be kept to the minimum appropriate for the occasion.
f) Representation expenses will not normally be reimbursable for meals and refreshments provided to any group consisting exclusively of CAI-Asia personnel or consultants employed by CAI-Asia.
g) Expenditures for gifts will not be approved
Subgrants refer to subgrant/subcontract arrangements to undertake an entire project/program or activity on behalf of the CAI-Asia. A Subgrant is covered by a subgrant agreement between CAI-Asia and the Subgrantee.
The Executive Director authorizes and approves the granting of all projects/program or activities to Subgrantees. It is the responsibility of the Executive Director to select and qualify subgrantees.
1. The division manager shall produce a Subgrant Agreement (Subagreement) that ensures the technical requirements of the main Grant Agreement are met. The Subagreement shall include among others, the roles and responsibilities of the grantee, the related financing, financial management and reporting.
2. The draft Subagreement shall be reviewed and approved by the Executive Director for review by other parties. The Subagreement shall be reviewed by the Center’s legal counsel to ensure that the terms and conditions are consistent with applicable laws and regulations. The legal counsel shall advise or recommend changes to the draft Subagreement to legally acceptable language and coordinating such changes to the division manager of the sponsored project/program or activity.
3. The division manager shall coordinate additional reviews with appropriate parties when the Subagreement contains non-standard language that may be in conflict with the Center’s policies or government regulations.
4. The division manager of sponsored project/program or activity shall secure the appropriate signatures of the subgrantee and shall execute or cause to be executed the Subagreement on behalf of the Center, under authority delegated by the Executive Director.
5. The division manager of the sponsored project/program or activity shall initiate a Request for Payment to FAS in accordance with the payment modalities of the Subagreement. The signed Subagreement document shall be attached to the Request for Payment. The purpose of this transaction is to insure that funds are properly available in the Subagreement and that said funds are properly reserved and obligated.
6. The division manger shall be responsible for monitoring and ensuring the technical performance of the subgrantee and shall certify to this performance prior to the payment of any invoices by the FAS. The division manager shall retain the supporting documentation for the subgrantee’s performance.
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