ACTIVITY CODES AND GOM CHART OF ACCOUNTS WORKSHOP

Hotel Victoria, Blantyre 7th to 10 June, 2016

ACTIVITY CODES AND CHART OF ACCOUNTS

Tokha ManyungwaFinancial Management Consultant

World Bank/SNIC

Building Blocks

Project Formulation (Environmental Assessments,

PID, PAD,etc)

Financing Agreement

Work Plans/Budgets

Project Operational Documents (PIM,FMM and PM)

Sub-granting

Structure of the Project

Malawi Nutrition HIV and AIDS Project

Component A -Support to Nutrition Improvement (SNIC)

Sub-Component A1 –Maternal and Child

Nutrition

Sub-Component A2 –Policy and Program

coordination

Component B –Support to HIV and

AIDS

Genesis of coding system

Structure of the project

• The Component A - SNIC project finances NGOs sub-projects, consulting services, project management, and goods (i.e., small equipment, basic pharmaceutical products).

• This component has two sub-components as follow:1. Sub-Component A1 - Maternal and child nutrition service

delivery at community level

This sub-component contributes to:

a) A strengthened nutrition service delivery platform at community level through provision of a “minimum package” of nutrition interventions offered in targeted communities.

Structure of the project (A1)

1. Sub-Component A1 - Maternal and child nutrition service delivery at community level

The SNISP will contribute to a strengthened nutrition service delivery platform at community level through provision of a “minimum package” of nutrition interventions offered in targeted communities. This package will be aligned with the Scaling Up Nutrition (SUN) 1,000 Special Days Initiative and the Nutrition Education and Communication Strategy (NECS, 2011-2016). (PIM,2012)

Communities will facilitate the promotion of:

a) improved infant and young child feeding practices by caregivers; b) improved home based care of and care seeking for common infectious diseases;c) improved hygiene (personal, food and environmental), utilization of safe water and sanitation; d) improved prevention of malaria, helminthic infections and all other parasitic infections;e) improved iron intake through consumption of iron rich foods and iron supplementation to women and

children; f) improved dietary intake by women before, during and after pregnancy; g) improved household care of pregnant women and utilization of ANC services; h) increased spacing of pregnancy for mothers postpartum; and i) adequate weight gain in children under two and pregnant women

Structure of the project (A2)

2. Sub-Component A2 - Strengthening policy and program development, management and coordination

This sub-component supports:

a) Joint planning and financial support to the sectors for nutrition-relevant activities at central and district levels;

b) Orientation and training workshops with stakeholders; c) Monitoring, reporting, surveillance and operational research,

including a project specific gender analysis, particularly with gender-related perceptions of nutrition and care-giving roles and responsibilities at the household level;

d) Advocacy and strategic communication; e) Technical assistance for key responsibilities to fill gaps relevant

to project management and implementation as well as the stewardship, oversight and coordination function at central and district level; and

f) Improved office space for DNHA through lease and/or supply of office equipment.

Disbursement categories (IDA grant and credit)

Disbursement categories (CIDA Multi-Donor Trust Fund grant)

Financial Management and accounting arrangements

• The accounting reports under the project are prepared to satisfy three main stakeholders:

(a) Government of Malawi;

(b) Funding Partners (IDA and CIDA Multi-Donor Trust Fund); and

(c) Management of the participating implementing agencies (management accounting reports).

GoM Reporting Requirements

• The DNHA will submit monthly expenditure returns to the MOF and cash controls on the Component A - SNIC project to the Accountant General by 10th of the month following the month under reporting.

• The expenditure returns will constitute:o Summary Statement of Monthly Development Expenditure;o Detailed Statement of Monthly Development Expenditure;o Summary Commitment Control System;o Detailed Commitment Control System;o Monthly Bank Reconciliation Statement;o Monthly Cash Controls Report

• The Monthly Expenditure Return will compare expenditure plus commitments with prorated budget provision.

Line Item Reports

• This shall follow GOM’s chart of accounts,showing separately all discreet activities by itemand sub item.

• The IFRs over the project year should be drawnin such a manner as to be able to use the sameas projects annual financial statements forauditing. This would be cost effective and resultin timely auditing of the project’s annualstatements.

IDA and CIDA Reporting Requirements

Interim Financial Reports (IFRs)

• The DNHA shall produce and submitted IFRs to the Funding partners on a quarterly basis.

• An annual IFR shall be audited by independent auditors. The terms of reference for the annual audit shall be cleared by the Funding partners.

• The financial information shall provide linkages with information on physical progress as well as procurement to ensure consistency.

IDA and CIDA Reporting Requirements

Contents of Interim IFRs

IFRs will consist of a set of quarterly financial statements presented in a standardized format. The statements will be presented according to financing partner’s category of expenditures and also in a consolidated format: These statements will be:

Statement of sources and uses of funds;

Statement of sources and uses of funds by expenditure category;

Statement of uses of funds by activity;

Designated account activity statement;

Payments made subject to funding partner’s prior review;

Other contracted payments made during the quarter;

Quarterly cash flow forecast; and

Details of quarterly cash flow forecast.

Annual Financial Reports

• The DNHA annual financial reports shall include:

a) A statement of Sources and uses of funds reflecting quarterly uses by cooperating partner and cumulative totals.

b) Uses of funds by category and activity showing actual uses, planned uses, and variance analyzed as to current two quarters, cumulative to date, percentage of actual against plan and planned figures as per appraisal document.

c) Designated Account (DA) Activity Statement

Other reports

• Physical Progress Reports

o The reports shall include narrative information and output indicators initially agreed, linking them with the financial information and highlighting issues requiring attention.

• Procurement Reports

o These provide information on the procurement of goods, work, and related services, and selection of consultants, and on compliance with agreed procurement methods. It compares actual procurement performance against that planned and highlights key issues like complaints by bidders, borrower’s capacity, contractual disputes and unsatisfactory performance by contractors.

o In summary, IFRs cover the total project as described in the Project Appraisal Document (PAD) and reflect all activities, financing, expenditures, contributions in kind such as labour with appropriate valuations to be done to determine contributions in kind and recorded in the books of accounts.

•

Timing and Submission of Reports

• Quarterly reports shall be submitted within one month following the end of the quarter being reported.

• Audited annual financial statements including the Auditor’s Report shall be submitted within six months after the close of the financial year

Chart of accounts (TomPro Accounting System)

GoM Chart of Accounts

Current reporting format

DEPARTMENT OF NUTRITION, HIV AND AIDS

NAME OF ORGANISATION: INSERT

GRANT AGREEMENT NUMBER: INSERT

QUARTERLY FINANCIAL REPORT FOR QUARTER ENDED DD/MM/YYYY

CONTENTS:

1 - CASH BOOK ANALYSIS

2 - BANK RECONCILIATION STATEMENT

3 - QUARTERLY EXPENDITURE RETURNS

4 - STATEMENT OF SOURCES AND USES OF FUNDS

5 - INVENTORY LEDGER FOR NON-EXPENDABLE (PERMANENT) GOODS

SUPPORTING DOCUMENTATION (TO BE PROVIDED FOR VERIFICATION):

1 - BANK STATEMENTS FOR PROJECT BANK ACCOUNT

2 - PROJECT CASHBOOK(S)

3 - SUPPORTING RECEIPTS/BILLS AND VOUCHERS FOR CLAIMED EXPENDITURES

4 - PROCUREMENT FILES FOR GOODS AND SERVICES PROCURED

OTHER REPORTS SUBMITTED (SEPARATELY BOUND):

1 - QUARTERLY TECHNICAL PROGRESS REPORT

Suggested Improvements

• Cashbook coding : Component, Sub-component, Activity, GoM code.

• Budgets to follow the same structure

• Improved coding in other reports to capture the above

Annual Financial Reports

• The DNHA annual financial reports shall include:

a) A statement of Sources and uses of funds reflecting quarterly uses by cooperating partner and cumulative totals.

b) Uses of funds by category and activity showing actual uses, planned uses, and variance analyzed as to current two quarters, cumulative to date, percentage of actual against plan and planned figures as per appraisal document.

c) Designated Account (DA) Activity Statement

Statement of receipts and payments

Statement of sources and uses of funds by component

Designated Account (DA) Activity Statement

Action in the next 2 days

• Revise your budgets to link your interventions(codes 1.1.1.2, 2.1.3.4 to activity/outputcodes outlined in the Financing Agreementsand PIM).

• Link your detailed budget lines to the GoMChart of Accounts (expenditure codes62104,62105,etc).

• Summarise your budget to only A Codes andGoM Chart of Accounts).

Refer to the illustration that follows

Proposed changes in reporting

1. Cashbook will add the following information:

• Output code

• A Code (A101,A102,etc.)

• Intervention code (1.1.1.5, etc.)

• GoM Code

2. Detailed Expenditure report (IFR) will have thefollowing information:

• Sub-Component code (A1 only for IA –already there for most NGOs)

• Output code (already there)

• A Code (already there for some IA s)