When Bristol-Myers Squibb Foundation launched Secure the Future™ Community Outreach and Education Fund in 1999, it committed itself not just to giving financial support to established institutions. It committed itself to giving support to all those organisations and institutions that were pushing the frontiers and thinking out of the box to find new, effective approaches to tackling the HIV/AIDS pandemic.

In doing this, the Foundation and Secure the Future™ had to acknowledge that some of the innovative ideas were not always to be found in solid, mature organisations that had tried and tested ways of doing business. They can also be found in the heart of communities, in villages that cannot even be easily located on the map, among young people who are still excited by the challenges of being young and in those community formations that have always given themselves selflessly to uplifting their neighbours.

We at Secure the Future™ did not want to exclude these meaningful contributions because of their seeming lack of
formal structure and capacity. However, we also needed to balance this with responsible funding.

Achieving this necessary balance lay in one of the objectives of Secure the Future™: “To build capacity of individuals and communities to find solutions that are relevant to their own resourcelimited settings but can be replicable in other similar settings.’’

Early on the Bristol-Myers Squibb Foundation teamed with PricewaterhouseCoopers to help us in strengthening the management and financial systems of the organisations with which we were partnering. Our collective lessons, learned in Southern and Eastern Africa, led us to compile this Pocket Guide. It also reflects what we have learnt from our partner organisations.

It is not a bible, or the ultimate answer, but we hope it provides a guide that can literally be kept in one’s pocket for quick reference to proper financial policies.

We hope you find it useful.

Phangisile Mtshali
Director: Bristol-Myers Squibb Foundation
Community Outreach and Education Fund, Secure the Future™

Download NGO Financial Management Pocket Guide

PDF format, 288KB, 36Pages.

TABLE OF CONTENTS:

Chapters page
1. Policy & Procedures Manual 3
2. Accounting Policies 5
3. Summary of Procedures 8
4. General Ledger 11
5. Cash Management and Disbursements 14
6. Budgeting and Budgetary Control 18
7. Fixed Assets 22
8. Travel 26
9. Procurement of Goods and Services 28
10. Reporting Requirements 33
11. Payroll 38
12. Branch Accounting 44
13. Corporate Governance 49
14. Computer Information Systems (CIS) 52
Appendices
Appendix 1 – List of Examples of Forms 55
Appendix 2 – Glossary of Terms 65

Appendix 2: Glossary of Terms

Assets
Resources controlled by an organisation, and in which it has ownership rights such as cash, inventory and fixed assets.

Audit
The process of verifying the correctness of a set of accounts using detailed checks of transactions totals, broad tests on account values as well as reviewing internal control.

Bank reconciliation
The reconciliation of the balance on the cash book to the balance on the bank statement.

Budget
A budget is a statement of estimated expected expenditure for the organisation for a given period.

Cash accounting
Under the cash basis of accounting, receipts and payments are recognised only when cash is received or paid. The cash basis of accounting is often used in the preparation of financial statements for donor funded organisations.

Cash books
A cash book is a ledger (record book) that records all the cash transactions (ie, cash received and payments made by the organisation).

Depreciation
The annual write-off of a portion of the cost of fixed assets over the expected useful life of the asset.

Expenditure
Expenses incurred by the organisation which are payable either by cheque or cash.

Fixed assets
Fixed assets are those assets (items of value) which are acquired for continuous use in the business, and not for conversion into cash (trading). The life of such assets should extend beyond one year such as buildings, office equipment and furniture, computers, motor vehicles, etc.

Fixed asset register
This is a record of all the fixed assets owned by the organisation.

Float
Amount of cash kept in petty cash.

General ledger
A summary of all transactions grouped into different accounts or budget line items. The totals on the general ledger are posted to the trial balance.

Imprest system
The imprest system is a method of maintaining cash or petty cash, whereby the cashier starts with a fixed sum, and at each reconciling period given cash or a cheque for the exact amount of the disbursements made, thus restoring the balance to the original figure. Documentation supporting the disbursements should be properly authorised and maintained.

Journal entry
The chronological, day-to-day recording of business transactions of an organisation such as cash receipts and cash disbursements.

King code on good corporate governance
This is the generally accepted code on good corporate governance in South Africa. It lays out minimum standards that boards of organisations should comply with.While it has no legal basis, it is widely accepted and used in South Africa.The code was set up primarily for larger corporate organisations but its principles are applicable for all organisations.

Payroll
A record of salaries and benefits paid to all staff members of an organisation.

Petty cash
A small amount of cash kept for paying small expenses.

Trial balance
A summary of income received and expenditure incurred for the organisation for a particular period. The trial balance is drawn up from the general ledger.The financial statements of an organisation are derived from the trial balance.

Liabilities
All debts incurred and owed by the organisation.

Revenue
All monies received by the organisation such as grants, investment income, interest income and cash donations.

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