Financial Policy Manual for KSLf

7/28/2019 Financial Policy Manual for KSLf

1/10

KENFAP SERVICES LIMITED

(KSL)

FINANCIAL MANAGEMENT POLICIES

Financial management policies Manual, 2010


2/10

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


3/10



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


4/10



FOREWORD


5/10



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


6/10



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


7/10



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


8/10



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


9/10



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.


10/10



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.

Financial Policy Manual for KSLf

Documents

Transcript of Financial Policy Manual for KSLf