Standard Operating Procedure for Accounts

Table of Contents

1.0 Introduction..............................................................................................................................42.0 Scope........................................................................................................................................43.0 Departmental Quality Objective..............................................................................................44.0 Internal Communication Method............................................................................................55.0 Departmental Meetings...........................................................................................................56.0 Departmental Organogram.....................................................................................................67.0 Roles and Responsibilities.....................................................................................................68.0 Infrastructure Needed..............................................................................................................69.0 Work Environment Needed (Safety and Health)...................................................................710.0 Interface Management With Other Departments/Units.......................................................911.0 On the Job Training.............................................................................................................1012.0 Description of Function.......................................................................................................1112.1 Resources planning budgeting, resource need identification.............................................1112.2 General Ledger Maintenance..............................................................................................1112.3 Management Accounts.......................................................................................................1112.4 Reconciliation......................................................................................................................1112.5 Salary and Wages...............................................................................................................1112.6 Improvement Methods:.......................................................................................................1212.7 Corrective Actions:..............................................................................................................1212.8 Preventive Actions:.............................................................................................................12

13.0 List of Records/Documents Maintained Within The Department....................................1314.0 Appendices...........................................................................................................................1315.

16.0 Process Flow Chart................................................................................................................13

1.0 Introduction

It is of paramount importance for every organization to have a well-structured and functional finance department that provides information to managers in making strategic and timely decisions. The department is also to ensure accurate accounts are maintained and prepared in line with the applicable laws while ensuring appropriate cost controls are in place for maximum profit realization.

This document serves as a guide to the process and procedures of the finance department. It will help provide direction on the execution of various roles and responsibilities while ensuring proper controls are maintained for effective and efficient delivery of service.

2.0 Scope

This SOP documents the finance policies and procedures to be employed in the oversight of the finance function of OOOOOOOOOOOOOOOOOOO.

The document has been prepared to assist management and staff, who are responsible for the tasks of managing the Authority’s assets and liabilities and implementing general control guidelines which would improve the accuracy of financial information.

This SOP is not meant to be all-inclusive but represents the minimum mandatory requirements. The manual is designed to be revised and updated as changes occur. The responsibility for reviewing this manual and updating when necessary rests with the HOD/Supervisor.

3.0 Departmental Quality Objective

The finance department is in charge of ensuring the smooth running of all daily transactional accounting of the company

The overall objective of the finance department is to ensure it assists the company in making optimal use of its limited financial resources.

Salaries preparation ranges between 26th - 28th of every month, and it is disbursed to all staff within 24hours.

4.0 Internal Communication Method

This consists of mail communications and verbal communication within the department and other Departments. We ensure adequate communication and information flow between Management and staff through various means such as

emails, notice boards, memos Telephones discussions and other communication means as applicable and as approved by the management.

The dialogic process between employer and employees (top-down), and employees and employees (side-to-side) are done through the use of the following:

o One-on-one meetingso Staff/team meetingso Emailso Staff-to-staff newsletters (for specific projects)o Annual Reportso Monthly Reports

5.0 Departmental Meetings

The departmental meetings are held on Bi-Monthly basis. The highlights of the meetings include;

Updates from individual members of the department Job challenges Suggested solutions to job challenges Briefing on recent developments within the Department and the company Re-affirmation of departmental objectives and how to achieve set targets.

The minutes of the meeting is maintained for reference purpose.

6.0 Departmental Organogram

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7.0Roles and Responsibilities:

Providing information to assisting management in making strategic decisions.

Responsible for all day to day transactions.

Preparation the financial statements with an external auditor engaged for assurance purposes.

Management of organizational cash flow and ensuring there are enough funds available to meet day to day office running expenses /payment.

Advising and sourcing longer term financing.

Ability to prepare the document require for the presentation with outside ooooooooooooooooooos.

Valuation reports

Management account ting information that can be useful for monitor the operation of the company.

Measuring and reporting regularly to the CEO.

Taking care of assets and liability of the company

8.0 Infrastructure Needed

For the effective running of the Department and the successful attainment of the set objectives the following infrastructure is required;

Required stationeries needed to assist administrative aspect of HR

Dedicated Telephone to back ground check confirmation, absent staff, recruitment and research/enquiry

Cabinets for files to separate documents for easy retrieval

Photocopy machine

Paper shredder/shredding machine

Desktop computer

Printer

Internet Access

9.0 Work Environment Needed (Safety and Health)

Health and safety in a work environment are pivotal issues in an organisation in which employers must educate employees on occurrence of hazards such as accidents and injuries. It’s the responsibility of supervisors, departmental heads and Human resource Manager to protect the health and safety of employees by providing appropriate training on dangerous equipment/materials, informing employees on possible workplace dangers and setting up practicable safety work measures.

Guidelines for Health and Safety in Human Resource Management Include:

Encouraging staff to report any faulty equipment or unsafe condition of material to supervisors and department heads without fear of being sanctioned.

Informing Staff on Emergency Procedures, in the case of fire. Use of first aid skill requirement. Informing and enlightening the maintenance officer to switch off all electrical appliances after

work. Monitoring cleanliness of welfare facilities such as toilet and kitchenette.

A conducive, noiseless, well ventilated work environment with a safe system is required for optimal performance. The health of all members of staff is paramount as well as their safety and to enhance this we have the HSE Coordinator who is in charge of the safety management system and the overall implementation of the organization safety policies. Muster points have been identified as a gathering point in case of Emergencies, fire extinguishers are available at strategic

locations within the office environment in case of fire emergencies; a first-aid box is also available for the administration of basic first in case of injuries within the office environment.

10.0 Interface Management with Other Departments/Units

The department interfaces with the various department within the organization. The essence for such interface in required to enabled us carry other processes along in the implantation of projects. The diagram in appendices II explains the interface with other departments.

11.0 On The Job Training

Employees play a crucial role in the existence of any business entity. Training and development help to boost the morale of employees and increase productivity to achieve the organisation goals and objectives.

On the job training will help employees acquire more skills in relation to their jobs especially for Admin Staff (customer service).

On-the-job training focuses on the acquisition of skills and competences within the department generally under normal working conditions. Usually a senior or more experienced member of the department is assigned to pass the knowledge and skills on to a new staff.

The junior staff is made to undergo on-the-job training under a senior staff, while the senior staff goes through on-the-job training under the guide of the Head of Department. This will assist to prepare the staff ahead when he or she is posed with challenges at work or when he or she eventually assumes a position of higher responsibilities.

Procedure:

This training is done during the course of carrying out the day to day activities within the department. First the training needs of the staff that requires the training is first identified by the head of the department after a competency gap has been done, the manager or the direct supervisor then takes the staff through on the job training for a defined period. The employee learns the job while doing the job and using the actual tools, equipment, documents or materials with the supervision of the HOD or direct Supervisor.

The supervisor or HOD monitors the staff performance, attitude to work and the ability to learn and multitask during this period after which an evaluation of the training is done to determine the training effectiveness. If the training was seen as not effective the staff will then be sent for further training or any other appropriate action is taken to fill the identified gaps. Records of the on the job training and evaluation carried out are maintained in the staff training forms.

12.0 Description of Function

It is the responsibility of the head of finance or finance supervisor to ensure the procedures stated below are adhered to.

Financial duties and responsibilities must be separated so that no one employee has sole control over cash receipts; disbursements; payroll; reconciliation of bank accounts; etc.

HEAD OF DEPERTMENT FUNCTION

Providing information to assisting management in making strategic decisions. Responsible for all day to day transactions. Preparation the financial statements with an external auditor engaged for

assurance purposes. Management of organizational cash flow and ensuring there are enough funds

available to meet day to day office running expenses /payment. Advising and sourcing longer term financing. Ability to prepare the document require for the presentation with outside

ooooooooooooooooooos. Banking function

Salary preparation & processing

Checking impress book

ASSISTANT ACCOUNTANT FUNCTION

Raising of Cheques

Daily Cash disbursement

ACCOUNT SUPERVISOR

Supervision all work done in Account department

Checking book of records and filling

SENOIR ACCOUNT CLERK FUNCTION

Overhead clerical work

Raising of Cheques

Daily Cash disbursement

CLERK FUNCTION

Reporting to Senior Account Clerk, to Account Supervisor, to Assistant Accountant, to HOD Finance/Admin to M.D

o Petty cash work

o Impress disbursement

o Cash Banking/Teller

12.1 Budgeting

These procedures cover all activities involved in planning, development, and implementation and monitoring of the capital and operating budget of OOOOOOOOOOOOOOOOOOO.

The Budgeting process specifically addresses the following areas:

a Budget Preparation

b Budget Monitoring

12.1.1 Budget Preparation

These policies are designed to govern the following:

Establishment of standardized procedures for budget preparation

Ensuring that budgets are duly approved and authorized in line with pre-defined levels

Ensuring budgets are realistic and prepared on a timely basis

Ensure alignment of budget to the objectives of the OOOOOOOOOOOOOOOOOOO

Control Procedure

No. Tasks

1The Managing Partner and the Management team shall arrange for the preparation of the Annual Budget for the forth coming year from the first week of October each year The Budget shall be reviewed at mid-year.

No. Tasks

2

The Annual Budget shall contain an itemized estimate of the expenditures to be made during the applicable Calendar Year and shall, inter alia:

Identify CAPEX and operating costs in sufficient detail;

Identify each capital activity in sufficient detail to afford ready identification of the nature, scope, duration, and impact of the activity in question together with appropriate justification;

Include such reasonable information regarding personnel and estimated manpower costs;

Contain an estimate of expenditure by calendar month;

Include projected cash flows and net profit projections by month; and

Be accompanied by other information as is necessary for an informed Board decision.

3

Budget premises, timetables and guidelines shall be prepared by the Finance Manager/Supervisor, encompassing requirements of current project teams and in liaison with the Managing Partner and circulated to all HODs prior to the budget preparation period.

4 HODs shall be responsible for the preparation of the budget of their department.

5

All unit budgets shall be collated and consolidated into a functional budget, hence HODs are to be forward departmental budgets to Finance Department Unit. The Finance Manager/Supervisor shall conduct joint budget review sessions with HODs to challenge and agree on the departmental budget estimates and assumptions

6 The authority to approve the annual budget shall rest solely on the Managing Partner.

12.1.2 Budget Monitoring

These procedures are designed to govern the following:

Establishment of standardized procedures for monitoring adherence to the approved budget

Ensuring budget overruns are detected and managed on a timely basis

Control Procedure

No. Tasks

1An analysis of actual to budgeted spend shall be prepared by the Finance Manager/Supervisor and reviewed by the Managing Partner on a monthly basis

2The Finance Manager/Supervisor shall reappraise budget estimate for the period, in view of current realities and establish justification for budget revision if need be, based on the analysis of the actual to budgeted spend for the period

3All budget revisions shall be approved by the Managing Partner and must be ratified by the Board of Directors where the variations are greater than N500,000.

12.2 Short Term Forecast

This is to help ensure a realistic projection of the firm’s future cash inflows and outflows and proactively determining the periods in the future when the firm will have surplus or insufficient funds to meet its future obligations. This process will proactively arrange an efficient means of funding anticipated future cash deficits and plan for optimal investment of surplus funds.

Control Procedure

No. Tasks

1The Finance Manager/Supervisor shall be responsible for the preparation of cash forecasts with inputs from all key personnel (HODs)

2All cash forecasts shall be approved by the Financial Manager/Supervisor and the Managing Partner

3 Cash forecast assumptions shall be clearly defined and documented.

4Cash forecast should be submitted to the Managing Partner on the 1st day of every month

12.3 Short Term Investments

This process covers activities involved in investing excess liquidity in order to maximize the returns on the firm’s assets. Idle funds should be proactively identified and invested in interest-bearing instruments at the most attractive rates in approved financial institutions.

Funds should be invested in instruments with sufficient flexibility to accommodate contingencies and changes underlying planning/forecasting assumptions.

Control Procedure

No. Tasks

1The finance manager/supervisor shall proactively ascertain the firm’s liquidity position in order to identify any excess/idle funds for investment on a timely basis

2The decision of which bank to invest the idle funds shall be determined by the Managing Partner.

3The health of the selected bank shall be reviewed by the finance officer/supervisor quarterly throughout the year with recommendations made to the Managing Partner in the event that adverse conditions persist at the institution

4 The Managing Partner must approve all changes to investment portfolio.

5A report on the status of investments must be submitted to the Managing Partner every quarter. This report shall clearly show investment amount, investee institution, profit/loss made, disposals, average interest rate (as applicable), etc.

12.4 Property and Equipment

The finance department must maintain a record of all fixed assets of the company by department and location. A quarterly inspection of all fixed assets of the company must be carried quarterly. Missing assets should be checked and investigated. Worn out or damaged fixtures must be reported and documented. Damaged fixtures should be repaired when needed.

Any asset that is to be transferred between departments must receive approval from the Managing Partner. An asset movement register must be signed off in the finance department if any asset of the company is to be moved from one department to another or from one location to another. Once, the asset is returned, the register should be signed. This will help track the movement of assets and make the quarterly inspection easier.

Employees are not permitted to use the asset of the company for personal use.

This process covers activities involved in managing OOOOOOOOOOOOOOOOOOO’s fixed assets. The Fixed Asset Management process comprises the following sub-processes:

a) Acquisition of property and equipment

b) Management/maintenance of property and equipment

c) Property and equipment disposal

12.4.1 Acquisition of Property and Equipment

Control Procedure

No. Tasks

1

All property and equipment acquisitions shall be made in accordance with the provisions of the approved Capital Expenditure (CAPEX) budget for the year. Where property and equipment requisitions are not provided for in the approved CAPEX budget, documented justification must be provided by the requisitioner.

2Property and equipment requisitions must be reviewed and approved by the relevant HOD

2Property and equipment requisitions that are not provided for in the approved CAPEX budget must be approved by the Managing Partner

4All property and equipment requisitions shall be processed in accordance with approved contracting and procurement policies and procedures.

5Upon delivery, fixed assets shall be jointly inspected by the a representative of the User Department and a staff of the Internal Audit Unit to ensure goods supplied meet the quality and quantity specified in the Purchase Order/Contract.

12.4.2 Management/Maintenance of Property and Equipment

Control Procedure

No. Tasks

1 The capitalisation threshold of fixed assets shall be N50,000

2A fixed assets register shall be maintained for all tangible fixed assets. Key information to be tracked about each asset include: Serial no., date of purchase, description, category, department, location and custodian.

3

Depreciation of an asset begins when it is available for use, i.e. when it is in the location and condition necessary for it to be capable of operating in the manner intended by management.

Assets will be depreciated on straight-line basis over a four-year period.

4The Finance Manager/Supervisor shall ensure complete, accurate and timely capture and classification of fixed assets acquired.

5The Designated Member of Senior Management shall ensure independent verification of the Authority’s fixed assets on a periodic basis to confirm accuracy of documented physical assets.

6

The Finance Manager/Supervisor shall reconcile the fixed asset balance per GL to the Fixed Asset Register on a quarterly basis to ensure that movements (i.e. acquisitions, disposals and reclassifications) of the fixed assets accounts are accurately recorded and classified.

12.4.3 Disposal of Property and Equipment

Control Procedure

No. Tasks

1The Administrative unit shall be responsible for the fixed asset disposal process in line with established policies, procedures and guidelines.

2 Value of asset to be disposed must be determined by the Managing Partner

3All fixed asset disposals must be duly approved and authorized by the Management team before the assets are sold/disposed.

4Fixed assets shall be proposed for disposal based on whether they have been fully depreciated or whether they have been recommended for replacement by the User Department through the Administrative Unit.

5Recommendations for replacement of assets, which have not been fully depreciated, shall originate from validated user complaints and approved by the Managing Partner

6 Fixed asset disposal shall be by secret balloting

7 Finance shall receive payment for fixed assets, all payment must be made in cheque or

bank draft. A copy of the cheque or bank draft shall be forwarded to the Administrative Unit and the cheque or bank draft of the payment on the asset will form the basis for removing the asset from the fixed assets register and for treating the disposal in the books of OOOOOOOOOOOOOOOOOOO.

8The Administrative Unit shall only release fixed assets to the buyer after receiving the acknowledged copy of the cheque or bank draft from Finance Unit

9The Finance Manager /Supervisor shall review the books/accounts impacted by the disposal to ensure that asset disposals have been properly accounted for

12.5 Payment Processing

These procedures are designed to ensure:

All payments made by the firm to contractors/suppliers are for valid transactions only

All payments made to contractors/suppliers are made on a timely basis

All payments made are properly supported and are accurate

Control Procedure

No. Tasks

1

Payment ProcessingAll payments to contractors/suppliers shall be processed and disbursed by the Finance Department. All invoices should then be immediately forwarded to the finance officer who will review all invoices for mathematical accuracy, validity, conformity to the budget (or other authorization).

2Payment TermsThe standard payment terms of the Authority shall be upon occurrence or when the related bills are received.

3

Discounts and interest charges

Payments to suppliers shall be made to the best possible benefit to take advantage of any account discounts and interest charge clauses in the supplier contracts, e.g. early payment discount.

4 Payment mode

Local and foreign contractors/suppliers shall be paid through bank transfer or cheque.

Blank cheques shall not be pre-signed. Unused, blank and voided cheques shall be stored in the Authority’s safe, in the custody of the FC.

Records of all cheque transactions shall be maintained on the Cheque Register and the cheque register shall be duly endorsed by beneficiaries to evidence cheque collection.

Confirmation of cheques shall be by the means agreed with the financial institution. The firm can use letters for confirmation duly signed by the Managing Partner, telephone or

text.

5

Approval of payments

Cheques and Transfer Instructions for payments shall be approved by the Managing Partner

6

Advance payments to suppliers

Advance payments to contractors/suppliers shall be granted only under the following conditions:

- The contractors/suppliers is to provide specialized or proprietary goods or services and requests an advance payment to be made; and

- The advance payment would expedite the delivery of goods or services critical to the firm’s operation.

Typically, advance payments shall only be granted to suppliers who have been consistent in transacting business with the firm for not less than a period of six (6) months.

Advance payments shall only be granted to suppliers based on an approved PO, and the advance payment shall not exceed 50% of the contract value (it could be less)

Only the Managing Partner may approve advance payments.

7

Change to payment details

Changes to supplier payment details shall be honoured only if communicated on the supplier’s letterhead and duly signed by its authorized signatories.

12.6 Cash Advances

Business advances are advance payments to staff for business related expenses. This process covers the activities involved in the processing, tracking and retirement of business advances.

These procedures are designed to ensure:

Advance requisitions are only made for bonafide OOOOOOOOOOOOOOOOOOO expenditure and are approved by authorized personnel

All business advances are accurately processed and recorded on a timely basis

All advances are properly and promptly retired

Control Procedure

No. Tasks

1The finance department shall keep a detailed record (name, amount, purpose of advance, date etc) of all employee advances.

2A new advance shall not be approved for a staff if there is any outstanding unretired advance against him.

3All advance requisitions shall first be endorsed by the Head of User Department to ensure and confirm that the requisitions are for bonafide Authority expenditure.

4As a second level approval, advance requisitions must be authorized/approved by the Managing Partner before payment processing and cash disbursement.

5

Contract Staff can be given a maximum of N20,000 cash advance, Junior employees can be given a maximum of N30,000 while senior staff can get a maximum of N50,000. Amounts outside this for each category of staff must be approved by the Managing Partner.

6 All business advances shall be initiated via Advance Request Form.

7 All advances must be retired within two (2) weeks of taking the advance.

8The Finance Manager/Supervisor shall review the advance balances of all staff and advice the head of HR to deduct overdue balances (balances above 1-month) from the employee’s salary.

9Any outstanding advance balance is deducted lump sum from employee salary after due notification to the employee involved but which the employee has refused to retire.

10Expense Retirement Forms (ERFs) shall be approved by the relevant Head Of Department, who shall ensure that the advance was utilised in line with approved expenditure.

12.7 Staff Claims

This process outlines the activities involved in reimbursing an employee for bonafide expenses on behalf of the Firm.

These policies are designed to ensure:

Staff claims are only made for bonafide OOOOOOOOOOOOOOOOOOO expenditure and are approved by authorized personnel

All staff claims are accurately processed and recorded on a timely basis

Control Procedure

No. Tasks

1

Staff shall be reimbursed only for valid expenses. Usually expenses on official duty which the employee has sought approval for. Hence, employees must submit a staff claim form along with an approval to proceed to make such an expense from the Managing Partner.

2Staff claims shall not be approved for a staff if there is any outstanding unretired advance against him.

3 All staff claims shall be endorsed by the Head of User Department to ensure and confirm that the requisitions are for bonafide OOOOOOOOOOOOOOOOOOO

expenditure.

4 The final approval for payment lies with the Managing Partner

12.8 Receipt of Cheque/Bank Draft

This process is to ensure:

All funds received are properly accounted for and accurately captured

Complete, accurate and timely recording of cheques and bank draft receipts

Compliance with established finance policies and procedures in order to safe guard cheques and bank draft receipts from theft and misappropriation.

Timely and complete lodgment of fund into the appropriate bank accounts

Control Procedure

No. Tasks

1All cheques and bank draft received must be recorded in a designated register to keep a detailed record of all receipts.

1All cheques and bank draft receipts must be securely kept in the safe (fire proof) pending their lodgment into the bank account.

2All cheques and bank draft receipts shall be lodged in the appropriate bank account on the day of receipt or unfailingly by the next working day by the finance officer/supervisor

12.9 Petty Cash

This process is designed to ensure:

Petty cash imprest is properly controlled and maintained within a set limit

Petty cash replenishments are processed accurately and on a timely basis to meet the firm’s obligations and needs

Control Procedure

No. Tasks

1Petty cash float of N100,000 shall be maintained in the Finance Department every month

2Cash levels shall be monitored by the Finance Manager/Supervisor on a daily basis to ensure adequacy of the cash for operational purposes of the firm.

3 Amount requested for fund replenishment shall not exceed the established imprest limits when added to the cash on hand. Where the need to exceed the imprest limit arises, a

waiver approval must be obtained from the Managing Partner.

4

All replenishment requests shall be reviewed and approved by a Designated Member of Senior Management. The Designated Member of Senior Management shall from time to time confirm unspent portion of the float in the safe before the approval for replenishment.

5The Designated Member of Senior Management shall also carry out random cash count on a monthly basis to ascertain the completeness and accuracy of the imprest cash balances and prompt detection of losses: theft and misappropriation

6

The Designated Member of Senior Management shall reconcile the physical cash counted to the petty cash register general ledger records and also review all relevant cash request forms and supporting documentation to validate the propriety of the transactions.

7On completion of the monthly cash count, a cash count report shall be prepared by the Senior Management staff and submitted to the Managing Partner to determine necessary action steps (where required).

12.10 Staff Advance

These procedures govern the administration of staff advances and are designed to achieve the following:

Ensure employee loans and salary advances are made in accordance with the firm’s policy

Ensure employee loans and advances are duly authorized

Ensure loan and advance repayments comply with the firm’s policy

Ensure accurate deductions from staff salaries are made on a regular basis

Control Procedure

No. Tasks

1Employee loan requests shall not exceed 30% of the requesting employee’s yearly basic salary.

2All loan and salary advance requests shall be documented and approved by the Head Human Resources

3The Head of Human Resources and the Finance Manager shall be responsible for ensuring periodic loan deductions are made as stipulated in the loan agreement.

12.11 Bank Reconciliation

This process covers activities aimed at ensuring the completeness, accuracy and timely capture of the firm’s bank’s position or records at any point in time. It will also ensure errors and exceptions in firm’s bank accounts are promptly detected and resolved on a timely basis. This will help confirm

that bank balances presented by the firm’s financial records are accurate and reflect its bank account position

Control Procedure

No. Tasks

1 All requests for bank statements must be signed off by the Managing Partner

2All bank statements must be opened by the Managing Partner or Finance Manager/Supervisor

3 All the firm’s bank accounts shall be reconciled on a monthly basis by the Finance Manager/Supervisor and exceptional items identified and investigated.

4 All bank accounts must be reconciled no later than the 10 th day of the following month and submitted to the Managing partner.

5All reconciling items shall be duly investigated and reported to the responsible banking officials for prompt resolution. The Finance Manager/Supervisor shall ensure timely and satisfactory disposal of reconciling items.

6 The Manager Partner shall review and approve all bank reconciliation statements

12.12 Payroll

The Payroll procedures cover activities involved in the maintenance of compensation records and the processing of salaries and other entitlements of OOOOOOOOOOOOOOOOOOO’s employees and contract staff. The policies consist of the following sub-sections:

Maintenance of Payroll (Personnel) Records

Payroll disbursements

12.12.1 Maintenance of Payroll (Personnel) Records

The policies’ objectives are:

To ensure that a complete and accurate database of all XXX employees and contract staff is maintained for payroll purposes

To ensure that the payroll database is updated on a timely basis to reflect personnel changes

To prevent unauthorized additions or changes to the payroll

To ensure employee compensation is accurately computed and is in compliance with the employment terms and conditions of service

Control Procedure

No. Tasks

1The Human Resources Department shall maintain complete and accurate records of all OOOOOOOOOOOOOOOOOOO’s personnel and ensure regular updates of such records.

2Access to personnel records (manual or otherwise) shall be restricted to authorized persons only

3All letters of appointment and promotion shall be approved (signed) by the Managing Partner and authorized for update in the Personnel database by the Head Human Resources.

4The computation of payroll elements shall be based on approved employment, promotion, movement, retirement, etc. of staff.

5The Human Resources Department shall notify the Finance Unit within 48 hours of any changes in personnel profile.

6

The Finance Manager/Supervisor shall ensure that all notifications of personnel movement, promotions, retirement, etc, emanating from the Human Resources Department are duly authorised by the Managing Partner before they are processed with the payroll processing cycle.

12.12.2 Payroll Disbursement

This process is to ensure:

employee/contract staff compensation is based on records maintained in the staff database

payroll processing and disbursements are processed accurately and on a timely basis

payments are made only to real and actual employees of OOOOOOOOOOOOOOOOOOO

personnel (payroll) costs are accurately captured and reported in the firm’s accounts

employee compensation is accurately computed based on approved input documents and in compliance with employment terms and conditions of service

Control Procedure

No. Tasks

1The Head Human Resources shall be responsible for complete and accurate capture and processing of all relevant payroll inputs/data.

2On a monthly basis, the FC shall ensure that all payroll changes advised by HR are supported by valid and authorized payroll input documents (e.g. appointment letters, loan forms, overtime sheets, advance deductions, etc)

3Staff payroll entitlements shall be disbursed or transferred directly to employee salary accounts to ensure secure, timely, and effective disbursement of staff salaries and entitlements.

4 New employees shall be given a grace period of 1 months to open their salary accounts

and advise HR of their account numbers. During this grace period, new employees shall be paid by cheque.

5Temporary staff such as NYSC, IT etc shall not be included on the firm’s payroll. HR shall prepare a separate schedule for such staff.

6

Changes to payroll must be submitted to HR at least one (1) week before pay day. HR must in turn inform Finance of any changes at least four (4) days before pay day. Finance shall then start the approval process at least three (3) days before pay day to allow for the checks and approval below.

Before payment, the Finance Manager/Supervisor must carry out a variance check (number of staff, total cost per payroll item) for payroll and submit a detailed analysis to Human Resources for the first level approval.

Once HR approves, the payroll is forwarded to a Senior Management Staff who checks for variances and then approves.

Once approved by the Senior Management Staff, the payroll is forwarded to the Managing Partner for final approval for payment

7Employees are paid twice a month, hence, the Finance Manager/Supervisor shall ensure that salaries are disbursed to staff salary accounts on or before the 15th and 31st

day of every month.

8

Employees are paid twice a month (mid-month and end-of-month), hence, staff payroll entitlements and statutory deductions shall be processed twice a month.

The Finance Manager/Supervisor must ensure that Pension from payroll is remitted within five (5) days from the payment of salary. The pension act stipulates all pension deducted from payroll be remitted within seven (7) days of salary payment to staff. Employees contribute 8% and employer contributes 10%.

The Finance Manager/Supervisor must ensure that tax from payroll is remitted within one (1) week from the payment of salary.

Human Resources must follow up with finance to ensure the various deductions are made within the statutory timelines.

9Employees may request for a payslip from the HR department to verify the breakdown of their salaries.

12.13 Financial Reporting

These guidelines cover the various activities involved in the recording, classification and analysis of financial transactions, including the preparation, generation and presentation of key management and financial reports. It comprises the following sub-areas:

a. Month-end Closing and Reportingb. Accrual Processing

c. Prepayment Processingd. Amendment to the Chart of Account

12.13.1 Month-end Closing and Reporting The policies in this segment cover the activities involved in preparing month-end financial reports and statements. This is to ensure: Complete, accurate and timely capture, recording and classification of the firm’s financial

activities Simple, standardized and efficient close-the-book processes to facilitate timely

preparation/generation of management, statutory and financial reports Compliance with statutory and other relevant reporting guidelines and with respect to financial

and management reporting

Control Techniques

No. Tasks

1Cut-off date for recording of financial transactions into the register/accounting system shall be 25th day of the month

2The period-end closing process shall be completed and reports generated by the 5 th

work-day of the following month

3

All period-end financial accounting and management reports shall be reviewed and approved by the Financial Manager/Supervisor. The Financial Manager/Supervisor shall ensure that the approved monthly financial statements are forwarded to the Managing Partner by the 7th workday of the following month.

4All external reports shall be approved by the Financial Manager/Supervisor and the Managing Partner

5All journal vouchers and entries shall be supported by duly authorized documents and must be reviewed and approved by the FC, prior to posting to the general ledger.

12.13.2 Accrual ProcessingThese procedure guides the activities involved in ensuring that period-end financial statements capture and reflect all expenses incurred by OOOOOOOOOOOOOOOOOOO during the reporting period, including expenses which are yet to be paid.

Control Techniques

No. Tasks1 All expenses shall be recognised in the period incurred or when the services are

received, irrespective of when the payment is made. Expenses that have been incurred or services received, which have not been

invoiced by the supplier, shall be accrued against the relevant period. Accruals shall not be made for services that are yet to be contracted or received at period end.

Where the actual data for the services received are not available from the supplier, reasonable estimates based on historical data and current business realities shall be made and provided for in the books.

2 Expenses shall be recognized in the period in which they are incurred, irrespective of when payment is made

3Transactions in which goods/ services have been received by OOOOOOOOOOOOOOOOOOO but are yet to be paid for shall be accrued for in the firm’s books on a monthly basis

4 The FC shall review and approve all accrual entries to ensure: Accrual computations are correct Accrued expenses are relevant to the reporting period Accruals are complete

12.13.3 Prepayment ProcessingThis process objective is to ensure complete and accurate capture, recording and amortization of prepaid expenses.

Control Techniques

No. Tasks1 Prepayments for which the benefits are to be derived in the future are classified as

other assets in the financial statements. Prepayments not exceeding the approved fixed asset capitalization threshold shall

be expensed immediately. Prepayments relating to specific periods shall be recognized as an expense in such

periods. Prepayments amortization shall be on a straight-line basis, and in line with the

contract/agreement.2 The Finance Manager/Supervisor shall ensure timely, complete and accurate

recognition and registering of prepayments and subsequent amortizing items in order to ensure prepaid expenses are amortized over the life of the benefit enjoyed.

3 All entries raised for prepayments must be reviewed and approved by the FC.4 The Finance Manager/Supervisor shall ensure that a detailed Prepayment Amortization

Schedule is maintained for all prepayments to:o Ensure accuracy of amortizing entrieso Facilitate monitoring of prepayments

5 Any proposed adjustments to the Prepayment accounts must be reviewed and approved by the Managing Partner

12.14 TRAVEL

A travel authorization form must be completed for every travel for and on behalf of the company. The forms must state the purpose of the trip, estimated total cost of the trip showing breakdown, cash advance required

12.15 Resources Planning Budgeting, Resource Need Identification

12.16 General Ledger Maintenance

12.17 Management Accounts

Reviewing and reporting on systems and operations ( internal audit, management audit).

Acquisition and uses of finance (Financial Management and recording of transactions.

12.18 Improvement Methods

Improvements methods are discussed during departmental meetings and are communicated via email to members of staff. When management approval is required for implementation of the improvement, the Head of Admin sends a request to either the MD or the Operations Manager depending on the level of approval required. After approvals are received, members of staff are informed via email.

12.19 Corrective Actions

Corrective action methods are treated the same way as improvement methods

12.20 Preventive Actions

Preventive action methods are treated the same way as improvement methods