cdp manual for financial management...

Rural Reconstruction Nepal

MANUAL FOR FINANCIAL &

ACCOUNTING MANAGEMENT SYSTEM

A programme supported by Government of Nepal and the UKaid

Community Development Programme (CDP)

Prepared by: Rural Reconstruction Nepal (RRN)

(Lead Organization of the CDP Consortium) August 2015

In association with: World Food Programme (WFP)

& Oxford Policy Management (OPM)

August 2015

Manual for Financial & Accounting Management System

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TABLE OF CONTENT 1. Manual for Financial & Accounting Management System ............................................................ 3 2. Background to Community Development Programme .................................................................. 3

2.1 Introduction ................................................................................................................................................. 3 2.2 Rationale ...................................................................................................................................................... 4 2.3 Scope ........................................................................................................................................................... 4 2.4 Purpose ........................................................................................................................................................ 4 2.5 Objectives .................................................................................................................................................... 4 2.6 Value for money .......................................................................................................................................... 4

3. Components of Manual for Financial and Accounting Management System .............................. 5

3.1 Maintenance of Books of Accounts (Financial Records) ............................................................................ 5 3.2 Basis of Accounting .................................................................................................................................... 5 3.3 Cash Flow Management: ............................................................................................................................. 5 3.4 Basis of Reimbursement of Fund: ............................................................................................................... 5 3.5 Classification of Transactions & Chart of Accounts ................................................................................... 6 3.6 Book Keeping .............................................................................................................................................. 6 3.7 Financial Planning & Budgeting ................................................................................................................. 7 3.8 Internal controls measures ........................................................................................................................... 8 3.9 Flow of information and fund: .................................................................................................................... 9 3.10 Cash Management: .................................................................................................................................. 11 3.11 Bank Account Operation & Management: .............................................................................................. 12 3.12 Control procedures for Salaries ............................................................................................................... 13 3.13 Control on Advance ................................................................................................................................. 13 3.14 Control on Procurement of Equipment, Stock and Inventory ................................................................. 14 3.15 Control Procedure for the Maintenance of Equipment ............................................................................ 15 3.16 Control over Documents ......................................................................................................................... 15 3.17 Additional Books and Documents to be maintained: .............................................................................. 16 3.18 Monthly Exhibit for MIS Reporting ........................................................................................................ 17 3.19 Preparation of Annual Financial Statements ........................................................................................... 18 2.20 Audit & Access of Auditor to Documents .............................................................................................. 18 3.21 Corruption & Whistleblowing ................................................................................................................. 18 3.22 Information Security ................................................................................................................................ 18

ANNEXURE: ......................................................................................................................................... 20

Annexure 1: Chart of Account ........................................................................................................................ 20 Annexure 2: CDP Management Structure ...................................................................................................... 28 Annexure 3: ROLES AND Responsibilities ................................................................................................... 29 Annexure 4: RRN Form No. misc 1 (b) ......................................................................................................... 31 Annexure 5: Travel Request and Authorization .............................................................................................. 32 Annexure 6: Travel and Daily Allowance Payment/Settlement Form ............................................................ 34 Annexure: 7Procurement of Goods and Services ............................................................................................ 36


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1. MANUAL FOR FINANCIAL & ACCOUNTING MANAGEMENT SYSTEM

This manual has been prepared in line with RRN’s existing Financial Administration Regulation and Employee Administration Regulation. Where RRN’s existing regulation and Manual is stringent to this Manual, the provisions of RRN’s manual has been applied and where this manual is stringent, the provisions of this manual shall be applied.

2. BACKGROUND TO COMMUNITY DEVELOPMENT PROGRAMME

The Community Development Programme (CDP) is a DFID supported Non-State Led Service Delivery Component of the Nepal Local Governance and Community Development Programme (LGCDP). The CDP will provide direct service delivery to deprived communities in 18 districts, 9 of which are Terai districts and 9 remote hilly districts of the mid and far-west development regions of Nepal.

The CDP 18 districts were selected jointly with MoFALD and DFID considering the remoteness in the western region and difficulties to deliver development in the central Terai.

In the Mid and Far West regions CDP will cover the following Districts: Jumla, Humla, Mugu, Dolpa, Kalikot, Bajhang, Bajura, Achham and Jajarkot. In the Central and Eastern Terai regions CDP will work in Parsa, Bara, Rautahat, Sarlahi, Mahottari, Dhanusa, Siraha, Saptari and Sunsari Districts.

The aim of CDP is to ensure that local governments are more capable, through intensified support for 18 districts that have particular problems delivering services. The overall goal of CDP is to help reduce poverty and complement the LGCDP results framework.

The CDP expected outcome is “Strengthened, coherent, resilient and inclusive local government systems for effective service delivery”

The CDP has three key outputs, these are:

Output 1: Poor and excluded people empowered to claim their rights and receive economic opportunity

Output 2: Strengthened Local bodies' structure, systems and processes to be inclusive,

accountable and transparent

Output 3: Improved service delivery for poor and excluded people including disaster resilient infrastructures

2.1 Introduction

The Financial and Accounting Management System pertains to the accounting policies, practice and that shall be followed throughout CDP’s implementation. The system aims to govern financial transactions of CDP that enables its staffs to follow the established systematic procedures, fulfills local statutory requirements and ensures strong management practices adopted by RRN.

Hence, with an objective of operationalizing principles and policies of Financial and Accounting Management System, Financial and Accounting Management Manual has been developed. This is in line with the RRN’s overall accounting and financial management policies.


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2.2 Rationale

RRN/CDP will have to pre-finance the programme activities. The reimbursement of expenses will be made by DFID on a monthly basis against invoice raised based on the milestones achieved by the programme. Thus, there will be financing costs involved in order to obtain necessary funds to pay off the expenses incurred during the implementation of planned activities before the end of any particular month. In addition, to ensure sound budget planning, expenditure management and regular accounting systems and practice, it is necessary to update real time financial information so that financial statement and reports are prepared on a timely basis (monthly basis). The accuracy of financial information within shortest time from CDP districts is important as it will have a great impact on pre-financing arrangement and cost.

2.3 Scope

The Manual for Financial & Accounting Management System describes the accounting policies, procedures and practices to be used during the course of operation of the programme. The Manual covers the input, processing, output, control and distribution of financial data. Further, it sets out the accounting policies and procedures that will:

a. Ensure that the organization’s books of accounts are prepared to conform to sound accounting principles and practices.

b. Enable the management to obtain accurate financial reports on a timely basis, thereby promoting sound financial management.

c. Ensure correct and accountable use of funds and other resources.

The approaches set out in the manual are in line with generally accepted accounting principles of Nepalese Accounting Standard (NAS) and RRN’s best practices of reporting requirements.

2.4 Purpose

a. To assist to the maintenance of internal controls

b. To provide resources for training and monitoring

c. To be used as a reference document by the staffs, management, auditors and other stakeholders.

2.5 Objectives

a. To enhance completeness and accuracy of the data entered from source documents (invoices, payments receipts, journal and cashbook) to the computerized accounting system

b. To provide accurate and reliable reports to enable CDP’s management to perform effective control over the operations of the programme

c. To detail operation and administrative procedures for input, processing, output and distribution of data to ensure security of data and documents

d. To maintain strong internal control of accounting and financial management system

2.6 Value for money

Economy: It is ensured through buying goods and services of the appropriate quality at a right price and it is demonstrated through the procurement policy and procedures adopted by RRN/CDP.


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Efficiency and effectiveness: RRN/CDP’s commitment towards timely execution of the project and involvement of human resources in a planned way with strong internal control system will help the project to achieve its target in an efficient and effective manner.

1. COMPONENTS OF MANUAL FOR FINANCIAL AND ACCOUNTING MANAGEMENT SYSTEM

3.1 Maintenance of Books of Accounts (Financial Records)

Formal Books of account shall be maintained and updated in an electronic form. FAMAS (Financial and Management Accounting Software) will be the accounting software used for accounting, financial reporting and management reporting purposes. Computer (Accounting Software) generated vouchers shall be documented, approved and recorded to maintain the accounting trail.

3.2 Basis of Accounting

• Financial Statements (i.e financial reporting) is in line with prevailing accounting standards of Nepal issued by Nepal Accounting Standard Board and approved for implementation by The Institute of Chartered Accountants of Nepal (ICAN). Departures from the accounting standards shall be fully disclosed in the notes to the financial statements.

• Books of accounts shall be maintained at local currency, and reporting to donor shall be made by applying the spot foreign exchange rate on the reporting date. It shall be disclosed in the notes to the financial statements.

• RRN/CDP shall apply accrual based accounting method (recognized when incurred) except grants/donations. Revenue and grants/donations shall be recorded in the accounting period when it is received and it shall be disclosed in the notes to the financial statement as a departure from Nepalese accounting standard. The accounting policy for in-kind contributions shall be disclosed and reflected fully in Financial Statements. Valuations of journal entries will be supported by credible, independent documentary evidence and be in line with financial reporting standards.

3.3 Cash Flow Management:

• For CDP’s financial arrangements, DFID has chosen the modality of pre-financing. Reimbursement of fund shall be made by DFID on a monthly basis against invoice raised based on the milestones achieved by RRN.

• The milestones shall be agreed with DFID, and the fund request will be as per the agreed milestone.

• Shortage of fund due to the lead time between the actual expenses and reimbursement of DFID shall be addressed through a financing arrangement with national level commercial bank.

3.4 Basis of Reimbursement of Fund:

The reimbursement of the fund will be made by DFID on a mixed approach of payment modality. An invoice will be raised on monthly basis, as per the format prescribed by DFID. The following are the modality and basis of reimbursement of fund:

• Reimbursement of programme expenses shall be made upon achievement of agreed milestones as per the approved budget from DFID.

• Short term consultancy fee, living, travelling and pre-financing cost is allocated to the programme activity cost on the basis of ratio of activity wise programme cost, and reimbursement of those


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expenses shall be made upon achievement of agreed milestones as per the approved budget from DFID.

• In the case of staff salary (including Dashain bonus and insurance) and office operating cost, CDP will seek reimbursement based on the rate agreed in the contract agreement between RRN and DFID. These rates shall remain constant over the period of the programme. The rates were established as average rate over the programme period. As such, there will be surplus accumulating in the RRN account balance during the first half of the programme period, which will be used for the second half as staff salary and other operating expenses to address impact of the increment/inflation but the billing rate to DFID will remain constant.

3.5 Classification of Transactions & Chart of Accounts

Control of funds and timely update of accounting information to use the funds for programme management are essential for sound financial management. Hence, for the purpose of management decision making process, financial information will be reflected on the Chart of Account at accounting software (FAMAS) and following procedures will be applied for the same:

• RRN will prepare separate chart of accounts of CDP, which will fulfill the requirements of the programme.

• The chart of accounts will be designed in such a way that accounting information supports monitoring and control of funds.

• The chart of accounts will allow monitoring expenses to be in accordance with activities in the annual work plan and budget, and will enable reporting to executive members of RRN or DFID according to the budget lines in the grant and the programme document.

The Chart of Account shall be designed in line with Government Finance Statistics Manual 2001, which will be coherent with Nepal Government Chart of Accounts and the requirement of RRN/CDP. Transactions will be classified, and a chart of account will be developed to record all financial transactions. The chart of account will be as per Annexure 1.

3.6 Book Keeping

CDP will practice central approach of book keeping to record, maintain and verify accounting transactions that includes Central Level Finance & Accounts Department’s involvement in all level of book keeping. However, district and regional offices will be responsible to produce appropriate supporting documents and forward it to Central Office (PMU). The responsibilities of each office are as follows:

At District/Regional level:

o Prepare estimated expenditure of the programme and send it to regional office for verification and recommendation.

o Start the programme as per approved terms and conditions and periodically (fortnightly basis) send the documents of actual expenses (including manual vouchers) to central office (PMU) for further processing within 7 days from the end of fortnight as per Gregorian calendar.

o Prepare and send statement of expenses, receivables and payables, cash/bank movement and other necessary MIS reporting to central office on a fortnightly basis along with the documents of actual expenses.

o Prepare and send data via e-mail on a daily basis for accounting entries as per the prescribed excel format of accounting software to account officer of central office for real time basis


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updating, which is recorded as unposted financial information at accounting software. Scanned copy of prime document evidencing the payment will be sent via e-mail along with excel format of accounting entries.

o Requesting fund on a monthly basis along with fund balance and estimated programme expenses for that month.

At Central Level:

o Accounting software will be installed at central office.

o Verify the recommended estimated expenditure of the programme for final approval to the team leader or/and Executive director.

o Generate necessary MIS reporting and donor reporting documents by compiling the financial data.

o Regularly supervise and monitor the authorized and posted financial transactions by the regional and district offices.

o Record the documents of the estimated expenditure of the programme and verify the actual expenses as per approved terms and conditions and authorize for posting to the accounting software.

o Receive and upload the data at excel format sent from district office to update non-validated transactions on daily basis. The central office shall obtain scanned copy of prime documents before uploading the non-validated transaction into the accounting software.

o Validate the non-validated accounting records. For the purpose of validation, the district offices will send all the originals of supporting documents on fortnightly basis within 7 days from the end of fortnight in Gregorian calendar.

o Act as a custodian of original vouchers and other necessary documents.

3.7 Financial Planning & Budgeting

Budget Formulation:

• The budget will be formulated following the bottom-up participatory approach that will solicit involvement of all CDP staffs and members. Objectives of the programme along with activity plans must be completed before the initiation of the budgeting process.

• The budget will be recommended by Executive Director for the approval from DFID.

• Changes in strategies for the forthcoming year based on the past experience will be unanimously decided by the team and accordingly the budget will be formulated.

• Resources required to achieve these activities will be listed along with cost.

• The cost of budget will capture all required costs in line with respective activities.

• Wherever there are procurement of supplies and services for activities, formalities required with regard to multiple quotations, evaluations, etc. should be followed. If the rate of goods and services are already identified through standard procurement process (annual listing as per bidding process), then the rate of good and service shall be considered as per annual listing rate by adjusting the rate of inflation for the subsequent period of procurement plan.


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• All line items in the budget must flow from planned activities. However, during unavoidable circumstances, budget will be revised by obtaining the prior consent from DFID.

• Budget should be as detailed as possible with justifications and break up of costs matched against each activity as indicated in chart of accounts.

• Work plan shall be revised on annual basis.

Budget Monitoring:

• While formulating the budget for subsequent years/phase, factors such as inflation and fluctuation in exchange rates will be considered.

• The budget shall be revised on annual basis. The Finance Manager is responsible for coordination and revision of budget.

• Financial statements shall be reviewed against the budget on a monthly basis.

• The statement of budget vs. actual expenses shall be prepared on a monthly basis along with the explanation of the variation. The variance report will be reviewed by the team leader.

• It is the policy of RRN/CDP to make reliable estimate of expenditure and to maintain all expenditures within budget limit. However, as an exception, there might be some chances of cost overrun. All such cost overrun subject to the maximum limit of 10% of budget line shall be approved by Executive Director upon recommendation of Team Leader and the matter will also be notified to DFID.

• The amount from program budget shall not transferred to core budget.

• The variance report will be the part of monthly financial report.

• Explanations on variances between actual expenditure and estimated budget for the current fiscal year should be provided by corresponding officer responsible for budget.

3.8 Internal controls measures

Every transaction needs to be traced back and forth since the books of accounts are maintained in a set pattern. The accounting trail is important as it helps to check/counter check expenditure incurred/activities done and thus helps to maintain a transparent system.

The programmatic trail is as follows:

Programme plan Activity to be performed Authorization from the Team Leader for the expenses related to the activity Perform the activity Maintain relevant program records.

The accounting trail is as follows: Expenses as per programme plan supporting documents voucher cash/bank book ledger trial balance income and expenditure statement, balance sheet. • The Executive Director is responsible for establishing sound financial management and

maintaining overall internal control system. • RRN adopts the system of internal control to assist in achieving management's objective of

ensuring, as far as practicable, the orderly and efficient conduct of its business, including adherence to management policies, safeguarding of assets, prevention and detection of fraud and error, accuracy and completeness of accounting records, and a timely preparation of reliable financial information. The system of internal control extends beyond those matters that relate


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directly to the functions of the accounting system.RRN internal control system provides reasonable assurance of achieving the following objectives: Validity: Transactions recorded are valid. Internal control prevents sham or non-existent accounting transactions from being recorded on the books. Authorization: Transactions are authorized to prevent fraud, waste or destruction of goods. Completeness: Procedures are complete to prevent failures to record transactions. Value: Procedures are comprehensive in calculating and recording transactions at the various stages of the accounting process. Classification: Journals must be properly classified based on the detailed Chart of Accounts to ensure that the various financial reports are accurately produced. Timeliness: Transactions are recorded in a timely manner to reduce the likelihood of posting incorrect amounts or of overlooking them altogether. Carry-over or summarizing: Proper controls are in place to ensure accurate classification and proper summarizing for financial statements.

Procedure for measure of internal control: • The Executive Director exercises due financial diligence by reviewing financial status of the

project on a monthly basis by: reviewing the Bank Reconciliation Statement; reviewing and signing the Income Statement and Balance Sheet; overseeing after the review process of list of all outstanding advances and requesting immediate action on any advances more than 30 days old; and assessing the status of Petty Cash Account; etc.

• The Executive Director manages the use and inventory of property and establishes management and control mechanisms and procedures for its effective use and eventual disposal.

• Once vouchers are validated and posted, they cannot be modified. The reversal entry to rectify the errors on any posting shall be made in accounting software only after the approval of the Finance Manager along with notification to the Team Leader.

• Non-validated accounting records may be modified while validating and posting such records in the accounting software. But such modification shall only be made after prior approval of Finance Manager and the Team Leader. The Account Officer should keep the record of such modified vouchers for future reference.

• All basic documents (Agreements, Contracts, MOUs and Audit Observations) will be maintained, while financial supporting documents will be maintained for 5 years for audit purposes.

• All staffs of CDP will be provided with detailed job description that clearly defines their duties and responsibilities in the programme. CDP’s management structure and functions are listed in Annex 2and 3respectively.

• The internal control matrix will be as per manual of operating procedure of RRN.

3.9 Flow of information and fund:


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Legends:

Flow of information and control:

Flow of fund:

Funding

RRN PMU

Team Leader

Programme Manager

Admin Manager

RRN District Team

District Coordinator

RRN Project Bank Account

RRN interest bearing Account at Bank

User Groups (paid/reimbursed through Cheque)

RRN District/Regional Offices

RRN Regional Team

Regional Coordinator

M & E officer

Livelihood/infrastructure/Cl

Payments for construction (goods and services)

Programme operation with involvement of user groups

Connected with central server

Series of Public

Branchless banking for daily wages payment

1. Agreement with DFID 2. District budget allocation 3. District milestone plan forwarded to PMU 4. Programme cost estimate forwarded to regional office 5. Programme cost estimate verified and forwarded to PMU 6. Programme cost estimate approved by PMU 7. Programme monitoring & evaluation by regional office 8. Request for fund by district office 9. Request for fund approved by PMU 10. Fund release to district office 11. Actual expenditure sent for verification/validation and accounting entries in FAMAS at regional offices 12. Invoice prepared and sent to DFID 13. Reimbursement of Fund in CDP’s GBP account by DFID 14. Fund transferred to interest bearing account of CDP

President

Chart of process/information/fundflow is illustrated in the following diagram and defined subsequently:

Flow of information and fund


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1) Agreement with DFID: Contractual agreement will be signed between DFID and RRN where clear milestones to be achieved along with its budget will be provided.

2) District budget allocation: CDP’s PMU in the central office will allocate tentative budget to each of the working district based on the activities.

3) District milestone plan forwarded to PMU: Each district offices will prepare milestones to be achieved during the stipulated time frame and send it to PMU for approval.

4) Programme cost estimate forwarded to regional office: In the same time, district offices will prepare activities wise cost estimate and forward it to regional office for approval.

5) Programme cost estimate verified and forwarded to PMU: Upon verifying the programme cost estimate sent by district offices, the regional office will forward it to PMU for approval.

6) Programme cost estimate approved by PMU: The PMU will then approve the request upon proper verification of the documents.

7) Programme monitoring and evaluation by regional office: Once the programme cost estimate is approved, the regional office will have to regularly monitor and evaluate the activities carried out in all project areas of the CDP’s districts.

8) Request for fund by district office: As the activities are carried out, district offices will request for fund from the PMU.

9) Request for fund approved by PMU: The PMU will approve the request and work towards releasing the fund.

10) Fund release to district office: Upon approval, PMU will transfer funds to district offices’ local bank accounts.

11) Actual expenditure sent for verification/validation and accounting entries in FAMAS at regional offices: District offices will send all vouchers and supporting documents highlighting actual expenditure to regional office for verification/validation and for entry in FAMAS. The PMU in central office will also be able to access the accounts entered in FAMAS and database through the connected server.

12) Invoice prepared and sent to DFID: Upon verifying the data entered in FAMAS and reports generated, the PMU will prepare invoice for the designated period along against the targeted milestones and send to DFID requesting for reimbursement.

13) Reimbursement of Fund in CDP’s GBP account by DFID: DFID will reimburse the requested amount in RRN/CDP’s GBP account.

14) Fund transferred to interest bearing account of CDP: The reimbursed fund will be finally transferred to interest bearing local currency account of RRN/CDP.

3.10 Cash Management:

• Cash transaction shall be restricted to petty cash only. Petty cash will be operated on an imprest system.

• A surprise petty cash count shall be conducted in every quarter by Finance Manager at the centre and line managers in the field, and they should report to the Executive Director if any inconsistencies are discovered. All these information will be recorded in a file.

Control Procedures


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• RRN maintains petty cash of Rs. 15,000 at the centre and Rs. 10,000 at the region/district offices to meet the urgent need of official petty expenses limited to Rs. 1,500 for each transaction.

• Petty cash is placed in a secured place, preferably in a small metal box that can be locked, in the safe custody of logistics officer at the centre office. In the regional and district offices, petty cash will be in the safe custody of the accountants for the purpose of checks and balances.

• Staffs who need to use petty cash should make a request using the Petty Cash Voucher. Copies of the slip or voucher are kept in the petty cash box until the petty cash is replenished.

• The petty cash will be replenished periodically. Usually, when the petty cash contains less than a quarter of the original value in money (cash), it is time for petty cash replenishment. Request for replenishment of petty cash is supported by Petty Cash Expenses Statement detailing the description of each expense and the account code.

• The Petty Cash Expenses Statement will be completed and along with supporting documents will be forwarded to the Finance Manager. The Finance Manager verifies the transactions, and forwards the same to the Team leader for approval of the reimbursement. In the field, Accounts Officer verifies the transactions and forwards them to the District Coordinator (in the case of districts) and Regional Coordinator (in the case of Region) for approval of the reimbursement.

• Subsequent to the payments, vouchers and supporting documents shall be marked with a `PAID FROM PETTY CASH’ stamp to avoid duplication of payments.

• Maximum petty cash limits shall be strictly observed.

3.11 Bank Account Operation & Management:

Bank account for the project funds shall be opened only in a national level commercial bank. Necessary authorization to open any bank account or alter its manner of operation would be obtained in writing from the competent authority. District-wise separate bank account will be opened based upon the availability of bank.

Internal Control on bank account operation:

• The Executive Director is responsible for opening bank accounts and for selecting signatories as approved by RRN Board.

• RRN maintains bank accounts in Nepalese currency and other currencies as and when required.

• All bank accounts are operated with the joint signature of two personnel.

• All bank accounts are reconciled on a fortnightly basis (Gregorian calendar).

• In case of cheques which expire for not being presented to the bank within the prescribed (six months) period, necessary adjustment should be made by crediting miscellaneous revenue account.

Control procedure:

• Cheque books remain in the custody of the Accounts Officer, who is also responsible to write cheques. A crossed cheque will be issued for all payments.

• Accounts Officer is responsible to prepare vouchers and ensure that they are supported by required documents, and the payment is recommended by team leader.

• All disbursement vouchers are reviewed by Finance Manager to ensure compliance and then approved by the Team leader/Executive Director.


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• Accounts Officer after obtaining bank statements is responsible for preparing bank reconciliations statement on a fortnightly basis. Likewise, Finance Manager is responsible for reviewing and the Team Leader is responsible for approving the statements for audit purposes.

• All letters/instructions to the bank will be signed by the authorized signatories only.

• Bundle of Cheque books will always be kept under lock and key. Only authorized persons will be allowed to handle them.

• Cheque payment for the CDP related expenditure shall be made to the supplier/vendor after obtaining the consent of local community (after public audit) upon verification of work in progress.

3.12 Control procedures for Salaries

Following procedure will be followed in regard to salaries:

• All CDP staffs shall be provided with appointment letters signed by the head of RRN and staff signifying acceptance of the terms and conditions set forth thereto. The appointment letter shall contain the initial salary, responsibilities, duties and the general Terms of References (ToR).

• Subsequent changes in salary, responsibilities, duties, terms or conditions of employment shall be communicated to the employee in writing.

• A personal file shall be opened for every staff. Copies of job application letters, appointment letters and any other correspondence between RRN/CDP and the staff shall be kept in this file.

• Salary shall be paid based up on the Gregorian calendar after the verification of attendance status by the HR manager.

• Salary shall be paid monthly in arrears. A salary schedule showing the presence days, gross pay, advances, deductions and net pay shall be prepared by the Accountant, checked and verified by the Finance Manager/HR Manager and approved by the head of the organization prior to the preparation of payment vouchers and the cheque.

• Bank account shall be opened for each staff. Salaries shall be paid by cheque through the respective bank account.

• There shall be no advance to staffs against salary.

3.13 Control on Advance

RRN/CDP adopts the policy to discourage cash advance. As an exception, it may be used when there is no alternative.

Programme Advance:

• Any expenses related to the programme activities shall be paid in cash as advance only in the case where there no possibility of paying directly through cheque to the suppliers/service providers.

• Advance will be released only after obtaining prior approval from the authorized personnel. An advance form shall be duly filled for advance purposes. The format for programme advance request form is in Annex 4.

Travel Advances to Staff

• Travel advances shall be granted in accordance with RRN’s policy.

• Travel advance shall be granted with prior approval of travel order from the competent authority indicating the purpose of travel.


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• An advance form shall be duly filled for advance purpose. The format for travel advance request is in Annex 5

Control over Advance

• Programme advance should be settled within 10 days of completion of the programme after completing the advance settlement form. The format of advance settlement form is in Annex 6.

• Any advances not accounted for within 10 days of completion of travel shall be recovered from following month’s salary of concerned staffs.

• Advance ledger account shall be opened in the name of individual staff and will be reconciled at the end of every month.

• A statement of outstanding advance (with aging of advance) for programme and travel shall be recorded at the end of every month.

• Travel expenses incurred by staff or any other authorized person shall be reimbursed according to the regulation set out in the Human Resource Policies and Procedures of RRN.

• Outstanding advances shall be reviewed on a monthly basis to identify, whether any deposit/advances have remained unadjusted or are overdue for settlement within the prescribed timeframe.

3.14 Control on Procurement of Equipment, Stock and Inventory

• Procurement plan of goods/equipment shall be made as per RRN’s by laws, the programme plan and approved budget ceiling of the project. RRN/CDP follows the principles laid down in Clause 23 of Contract for Supplier Services signed between RRN and DFID for procurement of equipment.

• Further, RRN’s procurement policy will also be a binding rule for procurement of goods. RRN’s procurement policy is extracted in Annexure-7 for an easy reference.

• All goods/equipment received or services rendered shall be according to specification and in quantities requested for. It shall be verified by administration’s staff.

• Goods/equipment ordered shall be received into stores and relevant accounting records shall be updated accordingly.

• The delivered material shall be verified according to the purchase order by Admin staff and technical staffs as required. Goods received note shall be prepared accordingly. Store keeper shall enter the incoming stores according to the goods received note and maintain store ledger. The materials from store shall be issued against the store requisition duly approved.

• CDP will procure inventories as and when required at the project sites as specified in the Bills of Quantity (BOQ) and there shall be less or no inventory of goods at all. Excess inventory if any shall be contributed to the users committee after completion of programmet upon the request of user committee.

• It is the policy of RRN/CDP that all stocks procured by the programme at central level will directly be handed over to the community and appropriate record of the same shall be maintained. Materials shall be procured on a need basis of programme and it shall be charged directly to the programme.

• RRN/CDP offices are required to maintain inventory of goods, in case additional stock required at field office.


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• There shall be a procurement committee for annual vendor selection process and procurement of goods and services (external material) of amount exceeding Rs 3, 00,000.

Control on Procurement of Service:

• Procurement service shall be made on a need basis, as per RRN rules and within approved budget ceiling of the project.

• Further, RRN’s procurement policy will also be a binding rule for procurement of services. RRN’s procurement policy is extracted in Annexure-7 for the easy reference.

• The objective of the programme should be reflected in Terms of Reference (TOR) of the contracted professional service.

• All procurement should fully comply with the procurement policies of RRN.

• The key deliverables to be submitted should be received and approved by the programme team.

3.15 Control Procedurefor the Maintenance of Equipment

• As a customary practice, assets procured by RRN/CDP shall be charged as an expense of the programme, and hence, the control over such asset is a crucial factor. RRN/CDP is committed towards the proper custody and control over such asset.

• An inventory of the capital assets shall be maintained and updated in an ongoing basis, as and when those assets are procured or disposed.

• Fixed assets register shall be maintained in an excel spreadsheet or a book and should have the following details:

a) Identification or serial number

b) Acquisition/purchase date

c) Description of asset

d) Location

e) Custodian

f) Class of asset (if applicable)

g) Cost of acquisition/purchase

h) Accumulated depreciation (if applicable)

i) Net book value (If applicable)

• The fixed assets register shall be signed and approved by the competent authority after it is updated in an ongoing basis and at the end of a fiscal year.

• All assets must be given an identification number and such number must be inscribed in the asset. This number should also be mentioned in the fixed assets register.

• Physical verification of assets will be undertaken by management and the report will be provided to the internal auditor for cross verification at least once a year. All additions, deletions, modification etc. should be recorded.

• The Executive Committee of RRN is the approving authority for the disposal of fixed assets.

3.16 Control over Documents

Essentials of accounting record


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• Project name – in order to identify that the voucher belongs to a particular project, the project name needs to be stamped/marked on the voucher.

• Date and the serial number of the voucher used.

• Classification – the cost centers and line items should be clearly specified in the project proposal. On the basis of the nature of expenses, the expense should be correctly classified into respective line items as provided in the accounting entries of the proposal.

• Narration – there should be a detailed narration in support of the classification showing the description of the transactions.

• Amount –The amount on the voucher must be equal to the amount reflected by the supporting documents, and should match any adjustments made (e.g.: advance payments adjusted).

• Supporting documents – these documents should be in the form of original bills and memos that provide the real proof of transactions based on which payment is affected. Classification of the expenses is based on a nature of expenses reflected in these documents and the amount on the voucher should be the amount reflected in these documents.

• Payment should be made after deducting the applicable Tax Deduction at Source (TDS) as per the provision of Income Tax Act 2058 of Government of Nepal.

• Signature of the person preparing the voucher.

• Signature of the person reviewing and authorizing payment.

• Signature of the person receiving payment.

• Defacing of vouchers and supporting documents with a `PAID’ stamp subsequent to payment to avoid duplication of payments, and providing reference numbers of vouchers and cheque numbers if relevant.

Internal Control on Supporting Document of accounting record

• All bills must be in original. Payment should not be made against a quotation, pro-forma bill, copy of a bill or a fixed bill.

• All supporting documents shall be authorized by the person initiating the payment.

• The person who is responsible for buying goods/services in the project office shall check each bill for its validity. i.e., ensure that description of items, number of items, cost per unit and total cost, date of the bill and name of payee (i.e. name of project) are accurate. Payments shall be made only after verifying these details.

• Invoices should only be in the name of Community Development Programme/Rural Reconstruction Nepal (RRN).

• It should be ensured that the bills, vouchers and other supporting documents are not overwritten.

• Correction Fluid must not be usedto correct any figure and fact in bill vouchers and other supporting documents. If it is deemed necessary to correct the figures, the original figures should be scored out and the new figures should be entered. The person preparing the bills, vouchers and other supporting documents as well as authorizing payment should authorize the corrections made.

3.17 Additional Books and Documents to be maintained:

Books of accounts shall be maintained at FAMAS. Similarly, addition and deletion of ledger/sub-ledger to maintain strong internal control shall be developed as and when required by obtaining approval from the competent authority.


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At central office:

In addition to the Accounting Software, central/regional offices shall maintain following registers:

a. Petty Cash Book

b. Fixed Assets Register

c. Attendance Register

d. Darta/Chalani Register

e. Printing/Stationery Register

f. ChequeIssued/Cancelled register

g. Inventory Register

Similarly, central offices must maintain separate files of bills of fixed assets, long term contract documents and other contractual arrangements along with their copies.

At Regional/district office:

District offices who have not installed the accounting software (FAMAS) must maintain following ledgers:

a. Cash Book

b. Voucher File

c. Bank Ledger &Statement

d. Reconciliation File

e. Attendance Register

f. Petty Cash Register

g. Fixed Asset Register

h. Darta/Chalani Register

i. Bearer Cheque Issuance Register

j. Cheque Issued/Cancelled Register

k. Inventory Register

3.18 Monthly Exhibit for MIS Reporting

All financial reports and schedules of the regional/district offices as provided below should reach the Account/Finance department in the central office before the 10th of following month:

a. Monthly Trial Balance

b. Fund Accountability Statement

c. Bank Reconciliation Statement (including Bank Statement)

d. Details of Advance and payable

e. Monthly Variance Report (Budget vs. actual Expenditure)


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3.19 Preparation of Annual Financial Statements

Annual Financial Statements must include balance sheet and income and expenditure account and a fund accountability statement should be prepared as and when required for statutory obligation and as set out in ICAN (NAS)MIS reporting and donor reporting purposes.

Likewise, district and regional offices have to maintain and record prescribed final accounts as per the MIS reporting policy of RRN.

2.20 Audit & Access of Auditor to Documents

RRN/CDP performs internal audit on a trimester basis. Internal audit will be outsourced to a practicing chartered accountant having Certificate of Practice of The Institute of Chartered Accountants of Nepal.

The fund and expenditures of RRN shall be independently audited on an annual basis. An independent statutory auditor shall be appointed out of the Chartered Accountant members of The Institute of Chartered Accountants of Nepal holding Certificate of Practice.

The independent audit shall be of a full scope audit as per prevailing auditing standards of Nepal.

3.21 Corruption & Whistleblowing

RRN/CDP bears zero tolerance against any form of corruption. All actions related to corruption will be handled as per existing Anti-Corruption Policy 2013 of RRN. RRN/CDP will regularly assess the risk of corruption or fraud through fiduciary risk assessment process by appointing a firm with international affiliation. The fiduciary risk assessment will be independent of all activities of RRN/CDP and will be carried out over the project period.

Compliant Procedure

• Corruption may be suspected by any person or in the process of audit and fiduciary risk assessment. A complaint may be filed by any person who has actual or suspected knowledge of fraud or corruption in the project activities to Team Leader of CDP.

• In case the compliant is required to be filed against Team leader, it shall be filed to Executive Director.

• In case it is to be lodged against Executive Director, the complaint shall be lodged to the board of RRN.

RRN/CDP will take prompt action against such complaints and take necessary investigative and remedial measures.

3.22 Information Security

• Separate custodian for documents/vouchers shall be appointed.

• Detail guidelines will be prepared to maintain and ensure documents/vouchers’ safety and easy accessibility and retrieval.

• Unauthorized access to data and documents will be fully restricted.

• Information/documents will be categorized as: prime & sensitive information and secondary & non-sensitive information and will be managed accordingly.


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• Accounting information from the regional/central offices will be recorded in the central server on a real time basis and there will be a separate server installed at regional offices. Daily backup of accounting data will be taken at central/regional office will be kept safely with the designated staff.


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ANNEXURE:

Annexure 1: Chart of Account

Community Development Program Chart of Account

Account Head Alias Alt Alias Sub Category Description

ASSETS A CURRENT ASSETS 10000 Bank B00001 BANK Agriculture Dvelopment Bank-Siraha AD Janta Bank Nepal Ltd-NPR JB Janata Bank Nepal Ltd.-GBP JN Standard Chartered Bank-NPR KTM Standard Chartered Bank- GBP KTM-C Nabil Bank-Bara NBB Nepal Investment Bank-Sarlahi NI Nabil Bank-Parsa NP Nabil Bank-Nepalgunj NPJ Nabil Bank- Rauhat NR Rastriya Banijya Bank-Dhanusha RB Rastriya Banijay Bank-Mahottari RBB Standard Chartered Bank -BRT SCB Other Parties Advance O00001 Receivable NARMA Consultancy pvt ltd. NC President Travel PT RRN-Central office R00002 RRN RRN BANK Staff Advance S00001 Receivable Kul Chandra Dahal K00003 Liabilities L CURRENT LIABILITIES 30000 Account Payable AP Staff Citizen Investment Fund LIab-2 PAYABLE Staff Gratuity Fund Liab-3 PAYABLE Staff Health Security Fund Liab-4 PAYABLE Staff Provident Fund Liab-5 PAYABLE RRN-Central core fund RC PAYABLE Donor's Account DFID


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DFID Nepal DN Donors Bank Interest income 1-Jan Donors Exchange Gain /Loss I-2 Donors

Salary Payable S payable PAYABLE

Taxes & Duties TDS Staff TDS Liab-6 PAYABLE TDS Liab-7 PAYABLE S.S Tax S00002 PAYABLE Expenditure E EXPENDITURES 60000 Programme Cost A. OUTPUT - 1 Related activities 1 Expenses Formation of CAC (No) 1.1 Expenses TOT for CAC facilitator (event) 1.2 Expenses REFLECT training for CAC (session) 1.3 Expenses Support social campaign initiatives to CAC (no) 1.4 Expenses Training on community Mediation LRPs and social leaders of VDCs (event) 1.5 Expenses Funding support to CAC and non-CAC members for Livelihood Improvement Plan (LIP) & enterprises development 1.6 Expenses Funding support for skill/vocational training and enterprises (person) 1.7 Expenses Mapping of high risk communities of VDCs. (VDC) 1.8 Expenses Form or activate existing CBDRMC and LDRMC (No) 1.9 Expenses Provide CBDRM training to community members/ CBDRMC members (Event) 1.10 Expenses Conduct VCA hazard mapping (4 communities in each VDC) (Event) 1.11 Expenses Support/ mobilize high risk communities to develop action plan (Event) 1.12 Expenses Training to CBDRMC on LSGA, LDRMP guidelines (Event) 1.13 Expenses Hoarding board with DRR message (No) 1.14 Expenses Develop and install hazard maps in high risk communities (No) 1.15 Expenses Establishment of Early Warning System (EWS) at VDC and provide training to EWS volunteers/members (Event) 1.16 Expenses Establish light rearch and rescue task force at VDC level and provide training (Event) 1.17 Expenses Establish first aid task force at VDC level and provide training (Event) 1.18 Expenses


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Support school for contingency plan preparation & conduct earthquake simulation drill (Event) 1.19 Expenses Organize workshop for integreting school contingency plan into community level plan for DRR & Climate change adaptation (3 Events/ VDC) 1.2 Expenses Conduct mitigation planning workshop with CBDRMC and stakeholder (Event) 1.21 Expenses Conduct street drama competition (Event) 1.22 Expenses Celebration of ISDR (International Day for Disaster Reduction- 13 October) and earthquake (2 Magh) (Events ) 1.23 Expenses

OUTPUT - 2 Related activities Support NGO facility for capacity building ( equipment, monitoring, organise policy level meeting etc…)(event) 2.1 Expenses Support NGO facility/MoFALD to organise joint monitoring visit of representatives from national level stakeholders to the program distict for cross learning purpose 2.2 Expenses Support NGO facility/MoFALD to organize CDP's coordination and progress sharing meeting with LGCDP, DFID, NPC, MoFA and MoHA and relevant line ministries at national level 2.3 Expenses Support NGO Facility/MoFALD to conduct programme sharing meeting with like-minded I/NGOs at national level 2.4 Expenses Thematic evaluation and documentation of good practices for policy learning (theme) 2.5 Expenses Programme orientation and review workshop for LDOs' of CDP district at regional level (eastern & western) (event) 2.6 Expenses Provide training on good governance for district level stakeholders. (Event) 2.7 Expenses Sharing of progress and plan on trimester basis as per DDC schedule 2.8 Expenses Support DDC to organize NGO Coordination committee/ NGO Desk meeting at district level (Events) 2.9 Expenses Support DDC to organize District Social Mobilization Committee Meeting (DSMC) to coordinate I/NGOs regularly (Events) 2.1 Expenses Provide training to IPFC members at district level on their roles and responsibilities in 14 step planning process and orientation on GESI, RBA, DRR & public audit 2.11 Expenses Support DDC to conduct orientation on 14 step planning process to Line Agencies, I/NGOs and private sector organization at district level for harmonsation of planning process. (Events) 2.12 Expenses


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Support DDC to disseminate information to all citizens about starting of local level planning process (event) 2.13 Expenses Support DDC to conduct Joint monitoring visit (district level stakeholders) 2.14 Expenses Preparation of village periodic plans (including technical service) 2.15 Expenses Support DDC to conduct orientation on 14 step planning process to Line Agencies, I/NGOs and private sector organization at Ilaka level for harmonsation of planning process . (Events) 2.16 Expenses Support VDC to conduct UCPA 2.17 Expenses Provide training to IPFC members at VDC level on their roles and responsibilities in 14 step planning process and orientation on GESI, RBA, DRR & public audit 2.18 Expenses Provide training on good governance to VDC level stakeholders. (event) 2.19 Expenses Support VDC to conduct public audit in their infrastructure projects 2.2 Expenses Support VDC to conduct joint monitoring visit (VDCs level stakeholders) 2.21 Expenses Support VDC to conduct Community monitoring using Score Card for improving the accountability on service delivery ( VDC) 2.22 Expenses Support VDC to organise orientation on monitoring mechanism to monitoring committee 2.23 Expenses Provide training to WCF members at ward level on their roles and responsibilities in 14 step planning process and orientation on GESI, RBA, DRR & public audit (3 persons/WCF at VDC level for 3 days). 2.24 Expenses Support VDC to organise orientation on social mobilization process to social mobilization committee 2.25 Expenses Support VDC to conduct orientation on 14 step planning process to Line Agencies, I/NGOs and private sector organization at VDC level for harmonsation of planning process . (Events) 2.26 Expenses Workshop on Hyogo Framework Action (HFA) and flagship 4 at district level (Event) 2.27 Expenses Support LDRMC to organise planning meeting to prepare LDRMP at VDC level and endorse from VDC (Event) 2.28 Expenses Provide training support to enhance the capacity of different task forces (first aid, light search and rescue and EWS) at district level (Event) 2.29 Expenses Prepositioning of set of emergency equipment at VDC (54) and DDRC (18) 2.3 Expenses Conduct Participatory Vulnerability and Capacity Assessment (PVCA) sharing workshop (DDCs+VDCs) (Event) 2.31 Expenses


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Support to organise planning meeting to prepare DDRMP at DDC level (Event) 2.32 Expenses Staff training on CBDRM and DRRM mainstreaming - Earthquake resilience design and climate change adaptation (Event) 2.33 Expenses Publication and distribution of IEC and BCC materials (Pc) 2.34 Expenses OUTPUT - 3 Related activities School buildings 3.1 Expenses Small scale mitigation works 3.2 Expenses Pre-construction management training 3.3 Expenses Post construction management training 3.4 Expenses Basic care and maintenance training Water related projects (events) 3.5 Expenses Conduct training on rights based approach, GESI, DRR and public audit training (events) 3.6 Expenses Sub health post Construction 3.7 Expenses Improved Water Supplies 3.8 Expenses Sanitation 3.9 Expenses Irrigation channel improvement 3.10 Expenses Culverts construction 3.11 Expenses Trail Bridges construction 3.12 Expenses Micro-hydro support 3.13 Expenses Community building 3.14 Expenses Relief and rehabilitation support for disaster affected families including technical support 3.15 Expenses 4. Programme Operational support activities CDP orientation and implementation planning meeting at regional level 4.1 Expenses Program orientation to CDP district team members 4.2 Expenses Project start up meeting & workshops at district level 4.3 Expenses Establishment of management information system (MIS)/Data gathering & reporting (outsource to OPM) 4.4 Expenses Set up one toll free telephone number for grievances and complaints redressal system (No) 4.5 Expenses Setting up complaints box at VDC (3 VDCs in each district) (No) 4.6 Expenses Prepare, publish and dissiminate flyers on Grievances and Complaints redressal Mechanism (Pc) 4.7 Expenses CDP Review and planning meeting at regional level 4.8 Expenses Staff capacity building training (CDP staff) (event) 4.9 Expenses


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Supervision and monitoring (PMU, Regional & district level) 4.10 Expenses Baseline Study (outsource to OPM) 4.11 Expenses Midline evaluation (outsource to OPM) 4.12 Expenses Endline Study (outsource to OPM) 4.13 Expenses External and Internal Audit 4.14 Expenses Rapid assessment (Qualitative and Quantitative data) (outsource to OPM) 4.15 Expenses Operational review of rapid assessments (outsource to OPM) 4.16 Expenses Resource persons for studies and MIS including logistics and transportation 4.17 Expenses Photo monitoring (Camera) 4.18 Expenses Staff Safety and Security Training 4.19 Expenses CDP consortium partner meeting at central level 4.20 Expenses

Travel Cost TC Domestic Travel DC Expenses International Consultants Int Con National/Local Consultants NC-6 Other Travel Project staff (Bus / Taxi fare) Ot Expenses District diss PMU PM Region Reg Project Staff Proj St Expenses District Dis PMU PMU Region region Expenses Travel cost -International TC Expenses International Consultants Ic Living Cost LC Accommodation /Project staff Ac/Pro Expenses District Dis-Acc

PMU PMU-Acc

Region Reg-Acc Accommodation Acc Expenses International Consultants Acc National/Local Consultants Acc Living cost / Project staff LC Expenses District Dis PMU PM


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Region reg Perdiem within Nepal Per deim Expenses National/Local Consultants con International Consultants Per ic Administration Cost: C. District offices DO Others Communication (tel., courier, postage & stamp, internet, newspapers etc.) C00005 Meeting Expenses M00006 Office rent O00003 Repair & Maintenance R00005 Stationeries S00014 Utilities (electricity, water, gas, sanitation etc.) U00003 Vehicle Running Cost (Fuel, repair and maintenance, spare parts etc.) V00004 Equipment Item EI Others Back-up Power system(inverter, UPS, Batteries etc.) B00001 Bicycles B00002 Computer - Desktops C00001 Camera C00002 Engineering Equipment E00002 Earthquake Detector E00003 Fan,Heater etc. F00001 Furnitures & Fixtures F00002 Fire Alarm System/Smoke Detector F00003 Fire Extinguisher F00004 Laptops L00001 Motorbikes M00002 Management Information System (MIS) M00003 Printers P00001 Scanner S00011 Vehicle hiring with driver for program activities supervision, monitoring V00001 Long Term Programme Staff Cost L00003 Others Institutional Development Fee MGMT Others PMU Office PO Others Communication (tel., courier, postage & stamp, internet, newspapers etc.) C00003 Fund Transfer Charges F00005 Meeting Expenses M00004 Office rent O00001


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Repair & Maintenance R00003 Stationeries S00012 Utilities (electricity, water, gas, sanitation etc.) U00001 Vehicle Running Cost (Fuel, repair and maintenance, spare parts etc.) V00002 Regional Offices RO Others Communication (tel., courier, postage & stamp, internet, newspapers etc.) C00004 Meeting Expenses M00005 Office rent O00002 Repair & Maintenance R00004 Stationeries S00013 Utilities (electricity, water, gas, sanitation etc.) U00002 Vehicle Running Cost (Fuel, repair and maintenance, spare parts etc.) V00003 Short Term Consultancies S00003 Others International Short-term A National Short-term B


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Annexure 2: CDP Management Structure

CDP MANAGEMENT STRUCTURE


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Annexure 3: ROLES AND Responsibilities

Thematic Functions

Thematic head and project manager will have the following responsibilities:

• Accomplish policy research on a thematic issue and support wide-ranging issues of interest at the local, national, regional and international levels for policy advocacy and feedback.

• Accomplish action research on wide-ranging issues within the premises of development projects and support other research initiatives that have social, economic, environmental and political implications.

• Explore fundraising and opportunities for mobilising internal resources.

• Oversee design andimplementation of development projects in coordination with management functions (monitoring and evaluation, publication, media and communication, and training) and regional office.

• Ensure contact with all staff in the field, and inform any field incidents immediately to the Executive Director for necessary action.

• Ensure performance evaluation of the sub-ordinate staff, interns and volunteers, and submit report to the Executive Director for contract renewal.

• Prepare operational plan on annual basis and submit progress update on project (status and finance) on quarterly basis to the Executive Director.

• Promote coordination and visibility.

Management Functions

Based on the core functions, manager will have the following responsibilities in related areas:

• Establisheffective administrativesystem for human resource management, asset management, fuel management, event management, communications, safety and security of staff and assets, and repair, maintenance and housekeeping.

• Establish results based monitoring and evaluation system for overall learning and accountability of the organisation to the government, development partners and people.

• Oversee monitoring and reporting of ongoingprojects, and provide support to field staffto improve participatory monitoring, joint monitoring, public audit, social audit, performance audit and reporting in the projects.

• Manage documentation, publication and media communications.

• Ensure proper information management for internet, networking, software, antivirus, alternate power source, database, website, media and other IT related works.


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• Ensure internal controls and sound financial management practices for budgeting, cash forecast, procurement, cheque and cheque book management, bank reconciliation, petty cash management, cost recovery, financial reporting, and internal and external audits.

• Provide logistic supports and office equipments to the staff at the centre, region and field offices.

• Support capacity building of field offices, and manage training programmes.

• Provide legal advice to the institution and institution managed projects.

• Explore fundraising and opportunities for mobilising internal resources.

• Ensure performance evaluation of the sub-ordinate staff, interns and volunteers, and submit report to the Executive Director for contract renewal.

• Prepare operational plan on annual basis and submit progress update on project (status and finance) on quarterly basis to the Executive Director.


Regional Coordination and Support Office

Specifically, the Regional Coordination and Support Offices have the following roles and responsibilities:

• Oversee monitoring and reporting (status and finance) of ongoing projects, and provide support to district staff in monitoring,reportingand coordination of district operations based on the RRN monitoring system.

• Manage regional resource centres, and explore fundraising and other opportunities for mobilising internal resources.

• Provide administrative and logistics support to the districts within the region.


• Maintain direct communication with respective project managers on matters related to projects, and the Executive Director on institutional matters.

District Office

Specifically, the district offices have the following roles and responsibilities:

• Manage project implementation as per the work plan and budget.

• Ensure internal controls and sound financial management practices for procurement, cheque and cheque book management, bank reconciliation, asset management, petty cash management, cost recovery, financial reporting, and internal and external audits.

• Ensure close monitoring and reporting (status and finance) of ongoing projects based on the RRN monitoring system.

• Maintain direct communication with respective project managers and regional office on matters related to projects, and the regional office on administrative matters.


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Annexure 4: RRN Form No. misc 1 (b)

Rural Reconstruction Nepal (RRN)

Advance Request Form

Date:

Amount Requested:

Purpose of Advance:

Project / Department:

Intended date of settlement:

Requested By: Recommended By: Approved By:

Name: Name: Name:

Date: Date: Date:


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Annexure 5: Travel Request and Authorization

Rural Reconstruction Nepal, RRN RRN Form No. 3.14 (A) Travel Request & Authorization

Dear Sir,

I kindly request to approve my following travel details:

A. Travel Order ( Please tick into the box )

Date: From To Total days

Place: From To Remarks:

Travel Mode: A. Air B. Bus/ Taxi / Train

Purpose of visit (Please specify project name): _______________________________________ _______________________________________

B. Ticket Request:

Date: Remarks:

Place: From To Remarks:

C. Advance request:

Advance Breakdown Amount

Budget Head Particular Days Rate

Per-diem

Accommodation

Airfare

Local Transportation

Communication


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Printing & Stationery

Other (Please specify)

Grand Total

Advance Request: In Words: Rs… ..…………………………..

D. Other Accessories Needed (Please check into the box)

A. Office Camera B. Laptop C. LCD Multimedia

B. Others (Specify)

I hereby, declare that I don’t have any unsettled travel advance balance from any projects.

Submitted By: Recommended By: Approved By:

Name: Name: Name:

Date: Date: Date:

Designation: Designation: Designation:


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Annexure 6: Travel and Daily Allowance Payment/Settlement Form

Rural Reconstruction Nepal, RRN RRN Form No.3.14 (B)

Travel and Daily Allowance Payment / Settlement Form

Visitor's Name: Date of settlement:

Designation:

Place of Visit:

Purpose of Visit:

Project Name:

Date of Departure:

Date of Arrival:

Date Place Traveling cost Daily Allowance

Accommodation cost

Other costs

Means of Transport

Amount Rs.

Rs. Rs. Particulars Rs.

Total 0 0 0 0


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Total Claim of Travel cost: Rs 0

Advance Taken: Rs

Refund / Claim: Rs. 0

Staff Name:

Signature: Finance Department


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Annexure: 7Procurement of Goods and Services

PLANNING Policy Detailed Procurement Plan for goods, materials and services to be procured during the year is as per the allocation in the budget. The suppliers of goods and services are accredited through a competitive process annually in December of each year and approved by the Executive Director.

Procedures

• Project Team Leaders and senior officials are responsible to specify required goods and services at the beginning of budget preparation.

• Finance Manager is responsible to consolidate and prepare detailed procurement plan.

SPECIFICATION Policy While proceeding to procuring any goods or services, any personnel involved in the process must adhere to the procurement procedures as defined and prescribed in this chapter.

Procedures The person requesting goods, materials and services should put down accurately and completely the specifications.

SOURCING AND SOLICITATION Policy

• Goods or services can be procured only subject to prior approval. Contract splitting is not allowed.

• The list of accredited suppliers is recommended by the Procurement Committee and approved by the Executive Director for the purchase of regular goods and services.


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• Other than the goods and services accredited by RRN, other goods and services are procured by way of competitive process, in the following manner:

• For purchases less than or equal to Rs. 50,000 item wise - No quotation is required.

• For purchases over Rs. 50,000 but less than Rs. 300,000 – At least 3 quotations should be obtained and comparative chart and analysis prepared. Quotation should accompany VAT/PAN registration and information on letter head. When quotation cannot be obtained, it should be justified in writing and take prior approval of the Executive Director.

• For purchases over Rs. 300,000–1,000,000 At least 3 sealed quotations should be obtained.

• For purchases over Rs. 1,000,000, seal tender should be obtained.

• For branded items - Proper justification, analysis and reasons should be clearly specified and approved by Procurement Committee.

• Selection should be based on cost, quality and reliability.

Procedures

• The Executive Director reviews and approves the recommendation of the Procurement Committee. The Executive reserves the right to approve or not approve the recommendations. The Procurement Committee comprises of six members (Senior Advisor - Coordinator, one respective Project Manager, M&E Manager, Training Manager, Finance Manager and Admin Manager). The Procurement Committee meets as and when required. The minutes of the meeting should be prepared with the signatures of the present members.

• In terms of process: o Project Team Leaders and Senior Officials initiate the requisition by filling-up the Goods/Services Requisition Form.

Goods/Services Requisition Form prepared in two copies forwarded to the Administration Officer.

o After approval first copy is kept by the Administrative Manager and the second copy is filed serially.

o The Finance Manager and Administrative Manager are responsible to verify that budget is available.

o The Logistics Officer obtains quotations from supplier and the Admin Manager prepares analysis.

o The Executive Director approves all procurement.

o No jumping of steps is allowed. At any steps the respective official can stop the process owing to valid reason.


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PURCHASE ORDER/CONTRACT Policy

• Contracts are signed with all accredited suppliers.

• Purchase Orders must be prepared for all purchases of more than Rs. 50,000

• In the case of fuel purchase, fuel coupons are treated as purchase order.

• Approval

• Purchase orders exceeding Rs. 300,000 are approved by the Procurement Committee.

• All other purchase orders are approved by the Executive Director.

Procedures

• The Administration Officer is responsible to prepare purchase orders.

• The Finance Manager is responsible to review purchase orders.

• The Administrative Manager is responsible for following-up on all purchases to ensure timely delivery.

QUALITY ASSURANCE Policy

• Goods and materials are to be inspected before being taken into inventory. The requirements towards ensuring quality assurance of goods and services procured.

• Procedures

• Goods are received by Logistics Officer and Invoices are stamped “goods received in good condition and according to the requisition” as certification of the receipt of goods as per the specification.

• In case of services the officer who requested the services will stamp “services satisfactorily rendered according to the requisition” and put her/his signature.


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• After such certification payment is processed by the Accounts/Finance Officer and after verification forwarded to Finance Manager.