AccProced Manual 30.09.04

The Government of Romania

MEIMEIMinistry of European IntegrationMinistry of European Integration

SECTION IVACCOUNTING PROCEDURESFUNCTIONS & PROCEDURES for the Management of the Community assistance under EDIS (PHARE)

MEIACCOUNTING PROCEDURES

FUNCTIONS & PROCEDURESfor the Management of the Community assistance under EDIS (PHARE)

Contents

Contents

1. INTRODUCTION 1

2. ACCOUNTING REQUIREMENTS 2

3. PRINCIPLES OF ACCOUNTING 3

3.1. Accounting Documents 4

4. MANAGEMENT OF THE ACCOUNTING PROCESS 5

4.1. Accounting of the Programme Payments Directorate 5

4.2. Role of the Accounting Supervisor 6

4.2.2. Applicability 6

4.3. Role of the Accounting Officer 9

5. WORK AND POSTING SEQUENCE 12

5.1 Correction of Errors 13

6. ACCOUNTING ENTRIES 14

7. ACCOUNTING FOR IRREGULARITIES 20

7.1. Entry of Irregularities into the Accounting System 20

8. RECONCILIATION OF ACCOUNTS 21

8.1. Monthly Reconciliation of Financial and Accounting Data 21

8.2. Semi-annual Reconciliation of Financial and Accounting Data 22

8.3. Annual Reconciliation of Financial and Accounting Data 23

9. DEBTORS’ LEDGER 24

10. REPORTS 25

11. IDENTIFICATION OF ACCOUNTING RECORDS - DATA ARCHIVING 26

11.1. Archiving 26

11.2. Procedures for the Retention and Archiving of Documents 26

11.3. Identification of Accounting Records 27



Contents

12. Annexes 28



INTRODUCTION CHAPTER 1Page : 1

1. Introduction

This Manual Section sets out the specific accounting procedures and entries to be used by the Programme Payments Directorate of the MEI for accounting for PHARE projects.

The Programme Payments Directorate, on behalf of the Ministry of European Integration, will prepare and send a Request for Funds to the National Fund. This Request will cover project advance payments, interim payments and final payments. The process of preparing and submitting the Request for Funds is covered in Section III (Financial Management Procedures) of this Manual.



ACCOUNTING REQUIREMENTS CHAPTER 2Page : 2

2. Accounting Requirements

The basic accounting requirements are:

Accounting for Phare programs must be separate from other accounting processes

Accounting must provide the level of control specified by the European Commission and Romanian legislation

Accounting operations must provide full transparency with regard to all accounting transactions

The accounting operations must provide all necessary information



PRINCIPLES OF ACCOUNTING CHAPTER 3Page : 3

3. Principles of Accounting

The principles and procedures with regard to accounting will be regulated by the current agreements with the NF, relevant EC regulations and will be in accordance with:

Accounting Law no.82/1991, as modified and completed by Government Ordinance no.61/2001 regarding the modification and completion of the Accounting Law no.82/1991

Order no.875 (as modified by the Order no.2332/2001) of the Ministry of Finance approving rules for registration in the accounting records of the receipt and use of the funds from the European Union and the national co financing funds

The Accounting Plan for public institutions approved by Order of the Ministry of Finance no.324/1984 together with further modifications and completions

Law no.500 /2002 regarding public finances as modified by the Law 314/2003

Order no.1792/2002 of the Ministry of Finance approving methodological norms in respect of budgetary forecasts, verification and approval, granting of payments and the payment of budgetary expenditure, also specifying the organisation, recording and reference of the budgetary forecast

Accounting will be conducted with full double-entry bookkeeping and will provide the following:

A complete, verifiable and accurate record of all accounting transactions

A true and fair view of the financial operations regarding the receipt and the use of funds received from the financial contributions of the European Union

Maintain accounting in ROL and/or EUR as required. The exchange rate to be used for

conversion will be the Info-Euro rate of exchange valid during the month in which the transaction occurs. The Info-Euro rate of exchange is in accordance with Art.91 of the European Commission Settlement no.610/1986 which establishes the application of the requirements of Financial Regulation of December 22, 1977. This rate is published every month, after the 10th of the month, in the supplement of the Official Gazette of the European Community.

Enable the settlement of invoices in EUR or ROL

Provide full accounting for commitments

3.1. Accounting Documents



PRINCIPLES OF ACCOUNTING CHAPTER 3Page : 4

Accounting documents must:

Be drawn up based on source documents (invoices, bank statements, receipts, etc)

Specify the accounting document

Have control numbers

Detail the contents of the accounting transaction

Specify sums in Romania ROL and/or EURO

Be dated

Specify the bank account to be used for the transaction

Be originals

All documents that support the accounting transaction will form an integral part of the accounting documentation. These documents will be registered, filed and maintained in a manner that maintains the connection between the particular documents.



MANAGEMENT OF THE ACCOUNTING PROCESS

CHAPTER 4Page : 5

4. Management of the Accounting Process

4.1. Accounting of the Programme Payments Directorate

Accounting in the PPD will be conducted through the accounting software consisting of the following modules:

A module for accounting in Romanian ROL

A module for accounting in EURO

A module for processing of conversion from EURO to Romanian ROL and from Romanian ROL to EURO

Accounting transactions will be entered in one computer. The Accounting Supervisor and one Accounting Officer will have access to this computer. Protection of this computer against unauthorised entry will be via passwords as follows:

Password for the Accounting Supervisor giving access to all levels of the accounting system

Password for the Accounting Officer giving access to data inputs and reporting functions

Password for launching the accounting application

Five other computers will be networked to this computer via the local network. It will be possible to access data (but not input or change data) via these computers. These computers will be for the use of:

The second Accounting Officer

The Accounting Supervisor

The Preventive Financial Controller (in the Preventative Internal Control Department)

The Director of the PPD

All data will be backed up as follows:

Daily on the server

Weekly on compact disc (kept in a suitable safe within the PPD)




CHAPTER 4Page : 6

Monthly on the compact disc (kept in a suitable safe within the IT Dept of the MEI)

Annually the entire accounting will be backed up by the IT Dept of the MEI

4.2. Role of the Accounting Supervisor

4.2.1. Aim and Objectives of Accounting Supervision

This section sets out procedures for the method of checking all accounting entries and transactions

pertaining to the implementation of PHARE programs.

The aim of supervising accounting data is:

Ensuring that registration, processing and storage of all accounting information is correct

and complete

Ensure the accuracy of accounting data and to decrease the risk of errors

To comply with the principles set out in Accounting Law no.82/1991, as modified and

completed by the Government Ordinance no.61/2001

4.2.2. Applicability

The procedures apply for entire period during which PHARE programmes will be running and are

in accordance with the internal organization of MEI, as an Implementing Agency for Regional

Development.

4.2.3. Responsibility

The Accounting Supervisor is the person assigned to supervise all accounting transactions related

to PHARE programmes and the related national co funding.

The Accounting Supervisor (AS) controls the activity of, and the documents prepared by the

Accounting Officer (AO).

4.2.4. Accounting Documents to be supervised

The Accounting Supervisor will review and sign the documents on a daily, monthly, quarterly and

annually basis issued by the Accounting Officer.




CHAPTER 4Page : 7

These documents will be:

Accounting notes (to verify the accuracy of the daily accounting records to be

posted)

Analytical trial balance – for each programme

Synthetic trial balance – for each programme

Consolidated balance for all programmes

Account record sheet separately for each programme

General Ledger showing all accounting transactions

Journal Register

Annexes to the balance sheet

The annually balance sheet

4.2.5. Documents to be prepared by the Accounting Supervisor

The Accounting Supervisor will produce:

1. Details of the documents verified

2. Monthly (by the 20th of the following month):

Bank Reconciliation Form

Reconciliation of total euro cash flow for each programme Form

Reconciliation with the National Fund accounts Form

Reconciliation with PERSEUS Form

3. Semi-annually (by 25th July and 25th January respectively):

Balance confirmation with the consultant /contractor (applicable for Technical

Assistance / Infrastructure projects)

4. Annually (by 25th January of the next year):

Annual Bank Reconciliation for each programme

5. The Completed Checklist for each programme

A dossier containing all relevant documents will be submitted by the Accounting Supervisor to the

Director of the PPD.




CHAPTER 4Page : 8

4.2.6. Content of Supervision Operations

The Accounting Officer will submit the documents to the Accounting Supervisor, in accordance with

the specified timetable, accompanied by the checklists prepared for each programme.

The Accounting Supervisor will verify the documents, draw up the reconciliation forms for each

programme, ask for further corrections or information for explanation of the differences, sign the

reconciliation forms and will prepare a Supervisor’s Checklist for each programme (see Annex 1)

4.2.7. Supervision Procedures

The supervision operations of accounting data consist of:

Cross – verification of Accounting Transactions

Checking that the total amount of operations in the General Ledger of the current month is equal to

the total current turnover amount in the consolidated balance

Verification of the Content of Accounting Documents:

Identification of document (number, date)

Transaction description (receipt, payment, recovery)

Details of parties involved (beneficiaries, state budget, National Pre – Accession Fund)

Amount in EURO/ ROL

Corresponding account in which records to be made

Reconciliation of Information contained in the Accounting System

The Accounting Supervisor will:

Reconcile data in the Perseus system with the information registered in the accounting

system, the bank statements with the bank account balances shown in the accounting

system, the NF General Ledger with General Ledger of the PPD

Reconcile the Balance Confirmation from Consultants/Contractors with the accounting

records of the PPD

Reconcile the bank account statements for each PHARE programme with the bank

account balances




CHAPTER 4Page : 9

The procedures for the reconciliations are described in the chapter no.8 of this manual.

For the closure of the month, the Accounting Supervisor will authorise the posting of the

transaction in the accounting software.

At the beginning of every month, the Accounting Supervisor will change the password for access to

the accounting system.

The Accounting Supervisor will have the responsibility for the organisation, supervision and control

of the Debtors’ Ledger.

The Accounting Supervisor will submit all relevant documents to the Director, who will approve and

sign.

The Director reviews the documents and signs the Accounting Supervisor’s Checklist.

SAO approves the report and signs the reconciliation forms prepared by the Accounting

Supervisor.

Then the dossiers will be archived on paper and on magnetic recording medium.

4.3. Role of the Accounting Officer

4.3.1. Aim and Objectives of Accounting

This section sets out procedures for the method of registration in accounting software the

transactions pertaining to the receipt and disbursement of PHARE funds.

The aim of accounting is:

Ensure that all transactions relating to the receipt and disbursement of funds under the

PHARE programmes and national co-financing are properly entered in the accounting

software

To comply with the principles set out in Accounting Law no.82/1991, as modified and

completed by the Government Ordinance no.61/2001 and other legislation in force

To prepare financial reports of the actual commitments and disbursements made to each

PHARE programme




CHAPTER 4Page : 10

4.3.2. Responsibilities of the Accounting Officer

Ensure that all transactions are properly entered in the accounting software and that the

system is kept up to date on a daily basis

Compile financial statements and reports and ensure that they are complete, accurate and

are supported by the accounting records

Verify that disbursements made to beneficiaries are allocated to the appropriate budget

headings and compare expenditure against the budget headings, investigate and resolve

all discrepancies

Adjust the beneficiaries’ accounts on the receipt of properly authorised addenda

Provide the Accounting Supervisor the documents needed to be used for drawing up the

reconciliation forms

Backup the accounting system at the end of each working day and ensure that there is a

strict security system in operation

Prepare a monthly Accounting Officer’s checklist (see Annex 2)

4.3.3. Accounting Documents to be Prepared

Certain documents are prepared on a daily basis, while other documents are prepared monthly,

quarterly or annually.

Daily (each day for the previous day):

accounting notes (to verify the accuracy of the daily accounting records to be

posted)

Monthly (by the 15th of the following month):

Analytical trial balance – for each programme

Synthetic trial balance – for each programme

Consolidated balance for all programmes

Account record sheet separately for each programme for:

current accounts

debtors accounts

expenditure accounts

interest accounts

General Ledger showing all accounting transactions

Journal Register




CHAPTER 4Page : 11

Quarterly:

Annexes to the balance sheet

Annually:

The annual balance sheet

The Accounting Officer will submit the documents on a daily, monthly, quarterly and annually

basis to the Accounting Supervisor for review and signature.



WORK AND POSTING SEQUENCE CHAPTER 5Page : 12

5. Work and Posting Sequence

Documents required for the posting of each accounting transaction will be submitted by the Accounting Officer, after the document has been checked, to the Accounting Supervisor.

The Accounting Supervisor will check the documents and authorise the posting of the relevant document.

Each accounting transaction will be posted:

Sequentially in date order in the accounting day-book Records in the Day-book will be sequentially numbered The exchange-rate used in posting the accounting transaction will be entered next

to each record

To control funds to be used the General Ledger will include synthetic accounts with analytical sub-accounts and will show:

The actual balance of payables and settlement of payments The remaining payables and receivables Ineligible payments made

The General Ledger will contain the following information: The state of account as at the day when the Ledger is opened

The movements in all accounts for any particular period

The balance of accounts on a daily basis

Accounting will be for each programme down to contract level. Analytical needs are met through the use of additional numbers after the account number. This will enable the system to keep track of:

Programmes

Sub-components of the programmes

Projects and contractors involved in the programme

An example of the numbering system would be:

220 = number of primary account220.01 = number of programme220.01.831 = number of sub-components220.01.831.0001 = number of particular contractor

5.1 Correction of Errors



WORK AND POSTING SEQUENCE CHAPTER 5Page : 13

If errors are found they must be corrected immediately. Correction of the error must be clearly recorded and posted to the period in which the error occurred.

The Accounting Officer responsible for Phare programme/projects will:

Correct the error Sign and date the correction form confirming the correction has been made (see Annex 3) Where the error has resulted in an incorrect report being issued, correct the report and

pass the corrected report to the Accounting Supervisor

The Accounting Supervisor will:

Check to ensure the error has been corrected and the correction form completed Review and sign the correction form Check the corrected report and reissue the corrected report.



ACCOUNTING ENTRIES CHAPTER 6Page : 14

6. Accounting Entries

The following table sets out the accounting entries applicable to Phare funds.

Transactiondescription

Transactiondate

Base document

MEIDebit

account

MEICredit

account

Amount

1.Signing of procurement contract – recording Potential Liability

Date of signing of the Contract

Contract 950Outside main accountingCommitments

950Outside main accountingPayments

Contract amount to be financed by Phare and co-financing funds

Amount paid from Phare and co-financing funds

2.Funds from NF received

Date of funds received

Bank statement

%

118xxxxEUR in bank account

119xxxxROL in bank account

and in the same time

410Institution’s costs financed by the budget

337xxxxSpecial destination funds

700Financing by the budget for current year

The total amounts received

Amounts in EUR

Amounts in ROL

Amounts received from co-financing funds (ROL)

3.Request for payment an advance

Date of bank transfer

Payment order

220xxxxDebtors

%


Or/and


Total amount paid

Amount financed by Phare funds

Amount financed by state budget (co-financing)





Transactiondate

Base document

MEIDebit

account

MEICredit

account

Amount

4.A.Payment of an invoice

4.B.After receiving the final invoice, covering the advance but decrease of total amount payable


Invoice approved for payment

Payment order

Invoice

220xxxxDebtors

421xxxxCosts covered by the special destination fund

%


Or/and


220xxxxDebtors

Total amount transferred

Amount transferred in EUR

Amount transferred in ROL

Total eligible expenditure

5.Irregularities – receivable from contractor. ( Total amount paid minus total eligible expenditure)

Date of letter, fax, final statement

Letter, fax, final statement

Shown by debtor’s

balance of the

acc.220xxx

Amount of irregularity

6.Irregularities – received from contractor

Date of money income

Bank statement

%


Or/and


220xxxxDebtors

Amount of irregularity

Amount received in

EUR

Amount received in

ROL





Transactiondate

Base document

MEIDebit

account

MEICredit

account

Amount

7.Transferring amounts from the current bank account to the deposit bank account

Date of transferring

Bank statement

195Internal transferees




Outgoing amounts from the current account

Incoming amounts in thedeposit account

8.Transferringamounts from a current bank account to another current bank account

Date of transferring

Bank statement


%



%




Outgoing amounts from the current account

Ingoing amounts in the current account

9. Bank charges

Date of bank charges paid

Bank statement

423xxxxBank charges

%



Total amount paid

Amount paid in EUR

Amount paid in ROL





Transactiondate

Base document

MEIDebit

account

MEICredit

account

Amount

10.Bank interest accrued

Date of bank statement

Bank statement %



522xxxxInterest income

Total amount received

Amount received in EUR

Amount received in ROL

11.Closure of contract –decreasing the contract total amount

Final report / Final invoice

Final report / Final invoice Look at 4.B

Recorded in Perseus, too

Look at 4.BRecorded in Perseus, too

Amount of used Phare funds and used co-financing funds

12. Closure month-re-evaluate the balance of EUR account in bank

Closure month

Bank statement and INFO-EURO exchange rate


Or

412xxxxEx-rate difference



Favourable amount

Unfavourable amount

13.Closure of programme-bank charges paid

Date of repayment of unused funds and bank interest to NF

Trial Balance 522xxxxInterest income

423xxxxBank charges

The total amount of bank charges paid





Transactiondate

Base document

MEIDebit

account

MEICredit

account

Amount

14.Closure ofprogramme- bank interests unused (The total amount of interest accrued minus the total amount of bank charges paid)

Date of transferring accrued bank interests to NF

Trial Balance 522xxxxInterest income

%



Total unused bank interest amount

Amount refundable to EC

Amount refundable to state budget

15.Refunding funds to National Fund


Payment order


232Discount with state budget

AND




232Discount with state budget

The amount of Phare funds unused

The amount of national co-financing unused

The amount of national co-financing unused

16.Closure of programme – refunding the ex-rate difference


Trial Balance 412xxxxEx-rate difference

OR




The amount of creditor balance (412xxxx)

The amount of debtor balance (412xxxx)

17.Closure of programme – reversal the costs covered by the special destination funds


Trial Balance 337xxxxSpecial destination funds

421xxxxCosts covered by the special destination fund

The amount of debtor balance (421xxxx)





Transactiondate

Base document

MEIDebit

account

MEICredit

account

Amount

18. Closure financial year- close the balance of 700 and 410 accounts

The end of financial year

Trial Balance 700Financing by the budget for current year

410Institution’s costs financed by the budget

Amount received from co-financing funds (ROL)



ACCOUNTING FOR IRREGULARITIES

CHAPTER 7Page : 20

7. Accounting for Irregularities

Irregularities arise from fraud and errors and can occur at any level in the Audit Trail e.g. The National Fund The Ministry of European Integration / the Implementing Agency for Regional Development The Regional Development Agencies The Final Beneficiaries Contractors

Not every irregularity has a financial impact but may require the strengthening of the internal control environment.

If an irregularity is discovered, or suspected, the procedures contained in Section VIII of this Internal Procedures Manual must be followed.

Only irregularities which have had a financial impact or a financial implication will be entered in the accounting system.

Irregularities of this type will arise from, but are not restricted to, the following events: Manipulation of the tender process Failure to carry out the conditions of the contract Payments of EU funds through fraud or suspected or attempted fraud Conflicts of interest or collusion Payments of EU funds made as a result of error

7.1. Entry of Irregularities into the Accounting System

When an irregularity has been confirmed the PAO will issue a demand to the entity who received the funds to repay the funds to the relevant Programme Payments Directorate bank account.

The PAO will further instruct the PPD to open a debtor account in the Books of Account of the PPD in the debtor’s name. The PPD will then account for the amounts to be recovered as specified in the accounting entries specified above in this Section.



RECONCILIATION OF ACCOUNTS CHAPTER 8Page : 21

8. Reconciliation of Accounts

The PPD will keep its own financial accounts. As well as accounting for Phare funds the accounting system will form part of the accounting system of the Ministry of European Integration.

Ensuring control and correctness of the accounting records is the goal of reconciliation of accounts.

If discrepancies are found, these procedures will form the basis for correction of the discrepancy and to understand why the discrepancy occurred. Output reports from the accounting software and from the financial tables will form the basis for the preparation of a report on reconciliations. Realised payments, posted payables, receivables and outstanding sums will be subject to approval.

Reconciliations will be carried out by the Accounting Supervisor. The reconciliation will then be approved by SAO.

8.1. Monthly Reconciliation of Financial and Accounting Data

8.1.1. Reconciling M.E.I. Accounting Records with Bank Statements

Within 20 days from the end of each month, the Accounting Supervisor will reconcile the bank statements with the bank account balances shown in the accounting records using the Bank Reconciliation Form (see Annex 4) and the Reconciliation of Total Euro Cash Flows for each Phare programme (see Annex 5).

If there are any differences between the accounting records and the bank statements the Accounting Supervisor will ask the Accounting Officer to correct the accounting records, using the correction form (see Chapter 5.1) if there is a mistake or omission in the accounting records of M.E.I., or notify the bank of the error and ensure the bank corrects its records, if the difference is due to a bank omission or mistake.

The Accounting Supervisor will sign and date the Bank Reconciliation Form and will send the Bank Reconciliation Form and the Reconciliation of Total Euro Cash Flows for each Phare programme to the SAO for review and sign.

The SAO will review the forms and approve them or will ask for further corrections or information.

8.1.2. Reconciling M.E.I. Accounting Records with National Fund Accounts




The Accounting Supervisor will ask the National Fund for the NF General Ledger to enable the records of the PPD to be reconciled with the records of the NF.

By the 20th of the following month the Accounting Supervisor will receive the NF General Ledger from the National Fund and will reconcile the NF General Ledger to the General Ledger of the PPD using the Reconciliation with National Fund Accounts Form (see Annex 6).

If any differences are found requiring a correction of records, the Accounting Supervisor will ask the Accounting Officer to fill out a correction form if the difference is due to a MEI mistake or omission, or will notify the NF of the error and will ask the NF to correct its records if the accounting records of MEI are correct.

The Accounting Supervisor will sign, date and send the Reconciliation with the NF Accounts form for review and signature by the SAO.

The SAO will review the form and approve it, or asks for further correction or information.

8.1.3. Reconciling Accounting Records with Perseus Records

Within 20 days from the end of each month, the Perseus Operator will give a printed Perseus Report to the Accounting Supervisor.

The Accounting Supervisor will reconcile the Perseus Report against the General Ledger of the PPD using the Reconciliation Perseus Reports form (see Annex 7) and will send it to the SAO for approval.

If there are differences between the Perseus Report and the accounting records of the PPD, the Accounting Supervisor will either correct the PPD General Ledger, if the mistake or omission has occurred in the accounting records of PPD, or ensure the correction is made in the Perseus database if the accounting records of the PPD are correct.

The Accounting Supervisor will submit the Reconciliation with Perseus Report to the SAO for approval.

8.2. Semi-annual Reconciliation of Financial and Accounting Data

The Accounting Supervisor will ask, semi-annually, all Beneficiaries / Contractors for a Balance Confirmation. This Balance Confirmation (see Annex 8) will show the funds received from the PPD by the entity, the funds spent and the balance remaining on the specified date.

Within 20 days from the end of semester (20th July of the current year and 20th January of the following year) the Accounting Supervisor will verify that the payments made by the PPD are




shown in the Balance Confirmation and reconcile the Balance Confirmation with the accounting records of the PPD.

If differences are found the Accounting Supervisor will notify the Beneficiary / Contractor to enable correction of their records (if the difference is due to a Beneficiary / Contractor error or omission), or will ask the Accounting Officer to fill in a correction form if the accounting records of the Beneficiary / Contractor are correct.

The Accounting Supervisor will send the Balance Confirmation of the Beneficiary / Contractor to the SAO for review and signature.

The SAO will review the confirmation and approve it or will ask for further information or correction.

8.3. Annual Reconciliation of Financial and Accounting Data

Within 20 days from the end of each year, the Accounting Supervisor will reconcile the bank account statements for each PHARE programme with the bank account balances in the books of the PPD using the Annual Bank Reconciliation Form (see Annex 9). The reconciliation will be made for the previous year.

If there are any differences between accounting records and bank statements the Accounting Supervisor will ask the Accounting Officer to correct the accounting records, if there is a mistake or omission in the accounting records of the PPD, using the correction form, or will notify the bank to correct its records if the difference is due to a bank omission or mistake.

The Accounting Supervisor will sign, date and send the Annual Bank Reconciliation Form for each Phare programme for review to the SAO.

The SAO will review the forms and approve them or will ask for further corrections or information as appropriate.

On the basis of Agreement on financing between the NF and the PPD, PPD shall submit regular reports on all financial aspects of each Phare programme implementation.

The information registered in PERSEUS system will be transmitted to the National Fund:

A copy to the National Fund A copy by e-mail to the Delegation of the European Commission in Bucharest A copy by e-mail to the European Commission



DEBTORS’ LEDGER CHAPTER 9 Page : 24

9. Debtors’ Ledger

The Debtors’ Ledger will provide a complete record of demands made by the PAO requiring the refund of all sums that have been paid out as a result of an irregularity.

The Debtors’ Ledger will also provide a complete record of the demands made by the Director of the PPD for the refund of advance payments that have not been justified by eligible expenditure.

The Accounting Officer of the PPD shall keep and regularly update the Debtors’ Ledger. As well as recording the amounts outstanding, the Debtors’ Ledger will also include a list of all debtors, by name, and why recovery of funds is required.

The Accounting Supervisor will be responsible for the organisation, supervision and control of the Debtors’ Ledger and for reporting to the Director of the Programme Payments Directorate.

The Debtors’ Ledger will include following:

Debtors’ name

Debtors’ address

Debtors’ legal details such a registration number etc

The amount to be recovered regarding the original payment(s)

The amount of interest to be recovered

The amount of bank charges to be recovered

The amount of penalties imposed on the debtor by the PAO to be added to the debt

When the amounts have to be paid by the debtor

The amounts received to date

The balance remaining to be recovered

The date the funds were returned to the National Fund

The reason the funds are to be recovered and, in particular, specifying if recovery is as a result of an irregularity

The date of occurrence

The project number

10. Reports

The Balance Sheet will be the basic accounting report of the PPD.




The Balance Sheet will be prepared by the Accounting Officer on:

A monthly basis A quarterly basis (the annexes to the balance sheet) An annual basis

The Accounting Officer will provide monthly the following reports:

An analytical balance sheet for each programme A synthetical balance sheet for each programme A consolidated balance sheet for all the programmes A General Ledger Journal Register Accounting notes

Within 15th days from the end of the next month, the Accounting Officer will submit the reports as below, for the previous month, to the Accounting Supervisor for review. The reports will be signed and dated by the Accounting Officer.

The Accounting Officer will prepare on a quarterly basis, the annexes to the balance sheet, which are an integrated part of the balance sheet of the M.E.I.



DATA ARCHIVING CHAPTER 11Page : 26

11. Identification of Accounting Records - Data Archiving

11.1. Archiving

Data archiving shall follow: Accounting Law no.82/1991, as modified and completed by Government Ordinance

no.61/2001 regarding the modification and completion of the Accounting Law no.82/1991;

All documents relating to the Phare programmes must be retained and be available from the date of the programme’s implementation for a period of at least five (7) years after the programme expiry date specified in the Financing Memorandum.

The Romanian government’s retention policy is that documents are held for a periods of ten (10) years or fifty (50) years, starting with the end of the year when the documents are recorded, according to their importance. All finance documents are held for at least ten (10) years.

A proper, functioning archive system will:

Ensure that archive space is efficiently used Provide for the proper disposal of records that are no longer required

Ensure efficient document retrieval

Ensure that documents and computerised data are stored safely

11.2. Procedures for the Retention and Archiving of Documents The following suggested records management system aims to establish a passage of documents from office to storage to destruction. This is achieved by:

Conducting an inventory of all the records to establish official record titles for all files and to establish where those files are located

Drawing up Record Retention Schedules specifying how long each type of record is to held in the archive for:

Active reference In storage for semi-active reference Inactive reference When the document may be destroyed

Drawing up a Record Storage Index and a Destruction Control Card for each document or file transferred to the archive



DATA ARCHIVING CHAPTER 11Page : 27

Controlling the movement of documents in and out of the archive by establishing a procedure using a Reference Request Card whereby a file leaving and retuning to the archive is recorded

The archive will be maintained, protected and managed by a designated officer within the PPD. Certain archived material, such as electronic data, will be held in suitable cabinets as required.

When documents are to be destroyed a Committee should be established to approve the destruction and method of destruction. The Committee should consist of:

A Senior Officer of the PPD A representative of Internal Audit A representative of the Legal Department of the MEI A representative from the Department or Directorate from which the document originated A representative of the Preventative Internal Control Department

11.3. Identification of Accounting Records

Each accounting record will be assigned a unique serial number that the record will retain for the duration of the Phare programme.

The following files are relevant to the accounting of the PPD:

Accounting software system: General Ledger Balance Sheets of Phare co financed programs Files of payment request from beneficiaries/contractors for each project plus

supporting documents Files of bank reconciliations for each programme Files of debtors and creditors Files of irregularities Files of discrepancies

Perseus reporting system: Files of statements of Phare programmes (inc. Perseus reports) Files of bank reconciliations Files detailing the status of local programmes File detailing the status of local contractors



ANNEXES CHAPTER 12Page : 28

12. Annexes

AccProced Manual 30.09.04

Documents

accounting data

accounting law

principles of accounting

accounting entries

accounting documents

accounting plan

accounting transactions

accounting system