Post on 03-Apr-2018
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KENFAP SERVICES LIMITED
(KSL)
FINANCIAL MANAGEMENT POLICIES
Financial management policies Manual, 2010
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KENFAP SERVICES LIMITED [KSL]
FINANCIAL MANAGEMENT POLICIES MANUAL
CONTENTS
FOREWORD
INTRODUCTION
ACCOUNTING POLICIES AND PROCEDURES
1.0. COST CENTRES AND ACCOUNTING CODES
1.1. Accounting codes1.2. Accounting code master list
2.0. PROCUREMENT OF GOODS AND SERVICES
2.1. Purpose of procurement procedures
2.2. Principles guiding the Company in procurement of goods and services2.3 Responsibilities2.4 Summary of the system2.5 Forms used in the procurement process2.6 Description of Procedures2.7 Purchase Requisition Procedures2.8 Purchase ordering procedures2.9 Processing a purchase order2.10 Authorized signatories2.11 Goods receiving procedures2.12 Monthly accounting routines
3.0. PAYROLL SYSTEM
3.1. Responsibility3.2. Summary of the system3.3 Forms used in payroll processing3.4 Description of procedures3.5 Master salary records3.6 Advances3.7 Voluntary deductions3.8 Preparation of Payroll3.9 Approval of payroll
3.10 Payment of payroll3.11 Incentives
5.0. INCOME / RECEIPTS AND PAYMENTS
5.1. Purpose5.2. Responsibilities5.3. Summary of the system5.4. Forms used5.5. Description of procedures5.6. Cash receipts and banking procedures5.7. Allocation of receipts
Financial management policies Manual, 2010
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KENFAP SERVICES LIMITED [KSL]
FINANCIAL MANAGEMENT POLICIES MANUAL
5.8. Routine treatment of sales ledger receipts5.9. Routine payments of creditor ledger accounts5.10. Cheques raising procedures, Signing and issuing5.11. Bank reconciliation statement5.12. Payment from Petty Cash
5.13. Monthly Accounting routines
6.0 PROPERTY AND EQUIPMENT
6.1. Responsibilities6.2. Summary of the system6.3. Description of procedures6.4. Annual procedures
7.0. VEHICLE MILEAGE CLAIMS
8.0. ACCOUNTING FOR IMPREST AND PER DIEM
8.1. Responsibilities8.2. Summary of the system8.3. Forms used8.4. Accounting for per diem / Night out
9.0. MONTHLY ACCOUNTING ROUTINES
9.1. Responsibilities9.2. Summary9.3. Forms used
9.4. Time table
10.0. MANAGEMENT INFORMATION REPORTING
12..1 Quarterly Reporting12..2 The role and function of the internal auditor
13.0 ACCOUNTING SYSTEM AUTHORIZATION AND BACK UP
14.0 MANAGEMENT OF RECORDS
15.0 APPENDIX
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KENFAP SERVICES LIMITED [KSL]
FINANCIAL MANAGEMENT POLICIES MANUAL
FOREWORD
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KENFAP SERVICES LIMITED [KSL]
FINANCIAL MANAGEMENT POLICIES MANUAL
This manual contains statements of KSLs accounting policies and procedures,
Investment policies and the dividend policies. It is designed to be a working guide for
management staff in the day-to-day administration of KSL's financial management
function.
The policies and procedures contained herein will be subject to modification and further
development from time to time as may be deemed necessary by the board of directors.
This is a dynamic working document, and all management staff must familiarizethemselves with the contents.
Managing director
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FINANCIAL MANAGEMENT POLICIES MANUAL
LIST OF ABBREVIATIONS
KSL - Kenfap Services Limited
AGM - Annual General Meeting
ACCUM - Accumulated
DEPRN - Depreciation
PROV - Provision
NHIF - National Hospital Insurance Fund
NSSF - National Social Security Fund
PAYE - Pay as You Earn
EQPT - Equipment
LPO - local Purchase Order
VAT - Valued Added Tax
CCS - Continuity Control Sheets
MD - Managing Director
CEAVOP - Completeness, Existence, Accuracy, Valuation, Obligations,Presentation
AAK - Automobile Association of Kenya
SFO - Finance manager
FO - Finance manager
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INTRODUCTION
PURPOSE OF THE ACCOUNTING POLICIES AND PROCEDURES MANUAL
These written policies should increase understanding, eliminate the need for personal
decisions on matters of companywide policy and help ensure uniformity throughout the
organization. It is the responsibility of every member of management to administer the
policies in a consistent and impartial manner.
SUPPLEMENTS TO THE POLICY AND PROCEDURES MANUAL
From time to time supplements and revisions to the manual will be made. These new
supplements will update and revise present policy and practice whenever deemed
necessary.
AUTHORITY AND ADMINISTRATION
This manual will be made available to personnel in the finance department. This policy
manual is up-to-date and contains the complete and accurate accounting policies and
procedures for our company as of this date.
OBJECTIVES OF FINANCIAL MANAGEMENT SYSTEMS
The objectives of the accounting and financial management systems are to;
Record the assets, liabilities, income and expenditure accurately and completely on
a day to day basis in accordance with the accounting policies and procedures.
Provide information to the management to assist them in decision making and
making effective and efficient use of resources to achieve the overall objectives of
the company.
Provide relevant information to the stakeholders as a way of fulfilling the companys
commitment to them.
Provide suitable financial framework for planning and controlling the organisations
activities by means of annual budgets.
RESPONSIBILITIES OF THE ACCOUNTING FUNCTION
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The principal responsibilities of the accounting function are as follows:-
To maintain the books of account and all accounting records of the company;
To provide statistical and accounting information which is required by management
for decision making
To ensure compliance with statutory and regulatory requirements;
Operate satisfactory accounting controls over the assets of the Company;
To propose to the Board of Directors necessary amendments of the existing
accounting policies and procedures as well as advising on the development of new
ones.
DESCRIPTION OF THE ACCOUNTING PERSONNEL
Overall responsibility of KSL accounting function lies with the Managing director who is
the accounting officer. He oversees the master budget and exercises expenditure
control. Other accounting staffs are: General Manager, Finance Manager, Accountants,
Accounts assistant(s) and the Internal Auditor.
BUDGETARY CONTROL
Objectives
Budgetary control constitutes the most significant component of the finance
management system. The salient features of the system are described below;
Segregation of the company into areas of responsibility which corresponds with the
responsibilities established by the organisation structure; these areas ofresponsibility are termed as departments which are also identified as revenue/cost
centers.
The establishment and use of accounts codes to classify income and expenditure,
assets and liabilities which reflect budget centre/cost centre structure for which
budgets, costs and outputs are calculated, evaluated and reported.
The preparation of work plan and budgets; and the incorporation of these budgets
and work plans into forecasts, to provide a comprehensive integrated plans of the
Companys activities for the year ahead; and
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The reporting of performance against agreement budgets and work plans.
Budgets and Work Plans
The Finance manager will prepare and submit the Quarterly draft budgets for the
coming quarter to the General Manager who shall review and make recommendations
before the same is presented to the Managing Director and the Board. The quarterly
budgets should include detailed assumptions, targets and explanations of any
movements compared to the prior years.
The Finance manager while preparing the annual budgets should ensure that salariesinclude all the allowances, cost of goods and services reflect current and projected
market prices and a reasonable contingency is provided for to cater for unseen
circumstances. The budget should also take into account the projected sales/ revenue
from all the ventures.
The Finance manager will forward to the General Manager to review. If satisfied, the
General Manager in consultation with the Managing Director will present the draft
budget to the Board for their review. At this stage, amendments if any will be made to
the budget to incorporate the views of the Board. The Board will then approve the
budget on behalf of the shareholders. This should be complete by 31st Decemberof
each year.
Upon approval by the Board, the annual budget for the following year will be passed to
the management for implementation.
Expenditures will be incurred only for those activities included in the approved annual
budget. Approved annual budgets may be revised from time to time to reflect changes
in activities or other needs.
Authority to incur expenditure and the expenditure limits shall comply with all the
stipulations set out in the KSL procurement section of the manual approved by the
board. This also includes purchases of goods for resale.
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Expenditures shall be only authorised if they fall within the overall annual budget and
no expenditure shall be authorised if it exceeds the budgeted amount for specific
activity or item unless in the case of purchases which will vary depending on the supply
orders obtained during the year.
Where a significant unbudgeted item has to be financed because of its critical nature,
minutes approval shall be sought from the Board and a supplementary budget shall be
prepared for purposes of their approval.