Organizational financial system

    1. Accounting:

    The Books of Account of Brotee are being maintained manually. It is maintained for each budget separately encompassing project expenditures, ledger, advance ledger, income, assets and liabilities accounting.

    Account vouchers and all other documents concerning the expenditures or procurements for the projects is kept at the Head office of PO (Project Office) or such other place as Donors require for a period of 3 (three) years or as required by Donors after the closure of the Project. Books of account, such as journals ledgers and cash / bank books are maintained properly and are available for inspection by Donors at any time during the life of the project and within 3(three) years after the completion of the project.

    The PO ensures that internal financial control procedures for the management of the funds for the project are in place and all financial transactions are documented with sufficient details (such as purchase orders, quotations, contracts of purchases, payrolls, traveling expenses bill store requisitions, banking documents, etc.)

    Books of Accounts:

    It is required to prepare, maintain and retain the following books related to each transaction of the project. These books and registers are preserved for future auditing purpose.

    1. Cash Book (Double column);
    2. General Ledger & Subsidiary ledger;
    3. Advance Register;
    4. Register for FF & E items;
    5. Cheque Issue and Receiving Register
    6. Salary Register;
    7. Stock Register;
    8. Petty Cash Register

     

    Documents/Reports:

    Vouchers (Debit, Credit, Journal)

    • Bank Reconciliation Statements
    • Trial Balance, Receipts and Payments Accounts
    • Income and expenditure accounts, Balance sheets
    • Call forward
    • Budget Variances

    The PO prepares quarterly/half yearly financial statements and progress reportsfor the project in jointly developed formats and submits the same to Donors by the fifteenth day of the following month.

    PO prepares an annual report of the project at the end of each year and submits the same by 25th day of the following month.

    2. Internal Audit

    Donors have the right at any time to inspect the project in consultation with the PO to examine the books of accounts, vouchers and documentary evidences of the PO. The PO provides all co-operation and information necessary for evaluation and examination by Donors and its authorized representatives to ascertain the appropriate and correct use of the project funds.

    The PO maintains and submits the year-end Balance Sheet, Income & Expenditure Account and Receipt and Payment Account as per the Bangladesh Accounting Standards and gets the statements audited by the auditor.
                                                           
    With approval from Donors and based on the adequacy the fund Brotee conducts internal audit for the project and the organization. The internal auditor is a qualified and experienced staff of the organization.

    3. External Audit

    Donors appoint a duly qualified independent auditor (Chartered Accountants) from the approved list of auditors of the NGO Affairs Bureau of the Government of Bangladesh to audit the annual accounts of the PO for each of the fiscal year or project year under TOR established by Donors.

    The PO permits the auditors of Donors or auditors selected by Donors access to the books of accounts and financial statements of the PO at any time to determine compliance under the agreement and financial statement of the PO.

    The PO includes the costs of audits in the budget.

    4. General financial management:

    Fund disbursement:

    Donors make the funds for the project available in installments as advance to the PO. Disbursement of the funds for the project is either by payment in cash or provision of items. Total budgeted amount for the period is transferred to the designated bank account in installment/advance. Since monthly cash recap by bank account is prepared. Cash recap by bank account is sent to Donors regularly and the accountability and transparency of the fund is thus ensured.

    Bank Account:

    The PO opens a separate interest bearing account (preferably STD account), with a scheduled bank, in the name of the PO on account of “Brotee-Project name”, which is used exclusively for all receipts and expenditure of the project.

    The account of the project is operated by joint signatories. A list of the authorized signatories together with their specimen signatures, certified by the Chief Executive Officer of the PO, is provided to Donors within three days after opening the bank account. Donors are informed in writing immediately of any change to the signatories with a list of the new authorized signatories and specimen signatures.

    Authorization of expenditure:

    The authorized signatories or designated signatories of the PO authorize any requests for expenditure or procurement by the PO for the project. All such requests are supported by the submission of appropriate bills or invoices.

    Before making any payment the PO ensures that the bill or invoice is properly approved / authorized. The PO makes payment to the vendor through account payee cheque if it is equal to or more than Tk 5,000 against the procurements of goods and services, but if it is below Tk 5,000 payment is made in cash. In cases where payment in cash is required due to unfavorable condition, PO documents the justification and with approval (post facto approval may also be permitted) of CEO payment in cash may be made.  

    All salaries are given by account payee cheques/bank transfers to the individual employee.

    Procurement: 

    Procurement of any capital items (computer, vehicles, furniture, motorcycle other office equipment etc.) are made after getting a written approval from Donors for above taka 10,000.

    The PO forms a Procurement Committee (PROC) consisting of at least two members (for any purchase above Tk. 5,000 or as per existing policy.

    Brotee follows its existing standard financial policy for all procurements.

    The PO informs Donors in writing before hiring any consultant mentioning clearly about the assignment. Justification of proposing the name of consultant is also submitted prior to finalization.

    Capital Purchase (Assets & Equipment):

    Any non-consumable item or equipment purchased under the project with and initial value of BDT 2,000 (Two thousand only). or more and with a useful life of more than one year is not changed, sold or disposed of without Donor’s prior written approval. Any vehicle, motorcycle, engine boat, purchased under the project is registered in the name of the PO.

    The PO keeps all vehicles, motorcycles and other equipment in good running condition by carrying out regular maintenance work. Proper care is taken in using the equipment.

    Human Resource

    PO follows and maintains all the recruitments and procedures mentioned in their policy and preserve related documents in case of all recruitments.

    Any form of application money (Pay order, Postal order, Cash etc.) cannot be taken from the applicant applying for any position of this project.

    Budgetary control:

    The PO acknowledges the budget in the project proposal approved by Donors.

    A maximum of 10% budget realignment is allowed in the line item allocation without changing the bottom line budget. In extreme cases, written approval is obtained for any realignment in the bottom line budget.

    Any balance of the funds for the project which is unused at the end of the project or on termination is either deducted from the first installment of next phase in case of a further agreement for the project with the PO and Donors, or is refunded by the PO to Donors within fifteen days of termination of the project or the agreement as applicable.

    The PO uses the funds for the project economically and efficiently in full compliance with the detail breakdown of costs and only for purposes related to the project within the budget limit.

    In case of common program cost with other projects / Donors / organizations the total budget including activity must be disclosed to Donors before the event / program.