APPENDICES

Appendix IA: The Budget Cycle

Establish Organizational Goals and Objectives

Prepare a Budget Calendar

Define Roles of Officers Involved

Prepare Budget Guidelines and Design Budget Estimates

Distribute Guidelines & Forms to all Departments

Departments Prepare Budgets, Discuss and Agree with FAM

FAM consolidates Departments to a Budget Document

Management & Board Discuss and Adopt Budget

Execute and Monitor the Budget

Appendix IB: Budget Preparation Procedures

Responsible
Officer
Finance and
Accounts
Manager
(FAM)

HODs/
Managers
FAM and
HODs
FAM

Description

Document(s)

1. Issue approved guidelines to all Managers and HODs

for preparation of annual budgets and discusses the
requirements with respective staff.
2. Prepare a Memorandum of Guidance for budget
preparation containing basic assumptions for the
forthcoming accounting period and provide budgeting
guidelines which shall emphasize, among others, the
following:
i. the need to align department goals with the
overall Company goals as par the approved
corporate plan;
ii. harmonization of short term performance
programmes with corporate strategic goals and
other statutory requirements.

Guidelines
include:
a) Budget
Preparation
Timetable
b) Standard
rates to be
used for
various
items
c) Spreadsheet
formats and
budget
codes to be
used

3. Discuss the Budget Guidelines with HODs

Draft Budget
Guidelines
Budget
Guidelines

4. Distribute the Budget Instructions and Budget Forms

60 days before the deadline for the submission of
departments budgets.
5. Prepare current year-to-date (YTD) financial data with
projections of year-end totals.
6. Submit departmental budget forms which shall be
reviewed by FAM for completeness and
reasonableness
7. Hold budget negotiations with all managers
8. After review and consultations have been made with
HODs, the Budget is then returned with relevant
changes/comments
9. Prepare the annual Company Draft Budget Plan
10. Forward the draft budget to the Board for discussion
and approval
11. Receives the Approved Budget and effect amendments
according to comments made by the Board.
12. Once adopted, the Budget total should be entered into
the General Ledger for the new Accounting Period
13. Distribute approved budget to all HODs/Managers

Current Year
Projections
Budget Forms

Departments
Budget Estimates
Adjusted/Revised
Budget
Draft Budget
Draft Budget
Approved Budget
Approved Budget
Approved Budget

Appendix IC: Budget Monitoring and Control Procedures

Responsible
Officer

Accountants

Management
Accountant

FAM

Description

Document(s)

1. All payments or expenses must be checked by the

budgeting department or someone charged with the
responsibility of budget compliance assurance to
ensure that they are in accordance with the approved
budget

Monthly Budget
Reports

2. Prepare monthly Budget Monitoring Report and

submit to the Management or Officer in charge of
Budget Preparation and Compliance

a) Period Actual
b) Period Budget
c) Period
Variance
d) Cumulative
YTD actual
e) Cumulative
YTD budget
f) Cumulative
YTD variance
Budget Variance
Analysis

3. Performs a variance analysis of the budget and

provides a report that explains all expenditure of
more than 10% variance. The report shall be
forwarded to the FAM.
4. Reviews the budget analysis report and makes
recommendations which shall be communicated to all
concerned managers for actions.

Budget Variance
Analysis

Appendix IIA: Recording of Loans in Year of Advance Procedures

Responsible
Officer
Accountants

FAM

Description
Debit the relevant Loan Account in the Personal Ledger
with the amount of the payment through the usual
Cashbook posting procedures
Opens the Personal Ledger account as described above;
Calculate interest due on the loan for the remainder of
the financial year by reference to the Loan Schedule
Debit the relevant Loan Account in the Personal Ledger
and Credit the Interest on Loan Ledger Account by
journal entry with the interest so calculated
Calculates monthly repayment of principal and loan
interest based on the loan conditions
Deduct the monthly total of principal and interest from
the borrowers monthly salary starting in the month after
which the loan is given; Credit all deductions to the
relevant salary/wages code
Credit repayments to the relevant Loan Account in the
Personal Ledger and Debit relevant salary/wages
deduction code by journal entry

Document(s)
Loan Repayment
Schedule

Appendix IIB: Loan Year to Year Procedure

Responsible
Officer
FAM

Description

Document(s)

Prepares a Schedule of Loans Outstanding at the end of

each financial year, the total of which shall appear in the
Balance Sheet as an asset under the heading of Staff
debtors
Ascertains the total interest due for the incoming
financial year by add-listing the subsidiary ledger
Debit the relevant Loan Account in the Personal Ledger
and Credit the Interest on Loan Ledger Account by
journal entry with the interest so calculated
Verifies monthly repayments for the year; Notifies each
borrower on any repayments due and ensures that the
Salaries/Wages Section makes the necessary deductions
from pay
Treats the monthly repayments as described in (4.13.2)
above

Schedule of
Loans
Outstanding

Appendix III: Procedure for Handling Accounts Receivables

Responsible
Officer
Revenue
Officer

Description

Revenues shall be entered in the Subsidiary Ledger by

the officer with responsibilities independent of Cash
Management
Posts payments and other adjustments to the Accounts
Receivables Subsidiary Ledger

Reconciles Accounts Receivables Subsidiary Ledger

with Cash Receipts transactions

Revenue
Officer/
Accountant

Prepare monthly reconciliation statements for the

Accounts Receivable Subsidiary Ledger with the General
Ledger Control Account

Document(s)
Data Input
Document
Receipts and
Adjustments
Vouchers
Reconciliation
Statements and
Ledgers

Appendix IV: Procedures for Handling Payroll Deductions

Responsible
Officer
Payroll
Officer
Internal
Audit
FAM/
Internal
Audit
Payroll
Officer

Description
Compute deductions for each employee, summarise them
by pay period and record in General Ledger Account
Reconcile payroll deductions monthly with the amounts
recorded in the Control Accounts
Review payments made to third parties for payroll
deductions to ensure accuracy and timeliness

Document(s)
Pay Sheets
Reconciliation
Pay Sheets

Store Third Party Notices, payment evidences and Pay

Pay Sheets, Third
Sheets in a separate file and make available for review by Party Notices
internal audit

Appendix V: Bank Reconciliation Preparation Procedures

Appendix VA: Preparation of a Bank Reconciliation
Responsible
Officer
Accountant

Description

Document(s)

Indicates Company name, bank account number, and the

date at which the reconciliation is being, i.e. the last date
of the relevant month
The closing balance of the bank statement for the last
working day of the month shall be entered on the form
and the date of the statement indicated.

Bank
Reconciliation
Form
Bank
Reconciliation
Form, Bank
Statement
Bank
Reconciliation
Form
Bank
Reconciliation
Form

The cumulative receipts and payments for the months as

par cashbook(s) shall be entered in the reconciliation

The cashbook balance brought forward from the

Reconciliation previous month shall be added to the net total of above
to ascertain the cumulative balance. There should not be
Officer
any other adjustments, and this balance should agree
with the adjusted bank balance. If there are any
discrepancies, they shall be investigated as they could
be due to unpresented cheques, un-credited cheques,
direct debits by the bank, etc.

Appendix VB: Handling Discrepancies

In the event of the reconciliation failing to balance at the first attempt, the following checks shall
be applied:
Responsible
Officer
Accountant

Description
Re-check that all items in the bank statement are in the
cashbook, except in respect of adjustments such as uncredited cheques and unpresented cheques brought
forward from the previous month. Specific checks are
that:
all non-cheque debits on the bank statement are in
the cashbook and included in the totals;
all receipts on the bank statement are in the
cashbook, or are in respect of the un-credited
cheques figures of the previous months bank
reconciliation
Check that all items in the cashbook are in the bank
statement except for the un-presented and un-credited
cheques adjustments.
Checks the addition of the cashbook and the cumulative
figures are correctly brought forward and added on from
the previous month
Checks the corrections of the payments cashbook totals
total for the month by adding up the totals of the cheque
schedules for the month and then adding on any direct
bank debits. If this reveals a discrepancy, check the
adding up of each individual cheque schedule, and then,
if necessary check item by item from the schedules into
the cashbook.

Document(s)
Bank Statement

Cheque
Schedules

Appendix VIA: Accounts Receivable (AR)

Responsible
Officer
Accountant

Description

Complete accounting processes and reconciliations for

accounts receivables
Enter and post all invoices, debits and credits for the
accounting period.
Enter and post all payments for the accounting period.
Enter deposits into the bank reconciliation file
Prepare the AR Aging Report to reconcile report-aging
balance to the general ledger account balance for AR
Review bad debts and credits and take the appropriate
steps.
Prepare and send customer statements

Provide for bad debts following the defined procedure.

Document(s)
Reconciliation
statement

AR Aging Report

Customer
statements

Appendix VIB: Accounts Payable (AP)

Responsible
Officer
Accountant

Description
Complete accounting processes and reconciliations for
accounts payable.
Generate all vouchers and adjustments from purchasing
section for the accounting period.
Generate and post all AP payments for the accounting
period.
Review and correct any vouchers on-hold
Prepare the AP Aging Report to reconcile report-aging
balance to the general ledger account balance for AR
Prepare the Vouchers Payable Report for accrued
receipts to reconcile the total vouchers amount to the
general ledger account balance for vouchers payable.
Review the official order register to determine the
existence of any orders where the goods have not been
received and consequently the obligation to pay has not
been recognized by the Company.
After the outstanding Official Orders have been verified
and the values determined, make entries to the General
Ledger to ensure that the right liability is recognized.
Review any other orders or contingent liabilities and
entries made to recognize these liabilities in the General
Ledger.

Document(s)
Reconciliation
statement

AP Aging Report
Vouchers Payable
Report
Order Register

Appendix VIC: Payroll

Responsible
Officer
Payroll
Officer

Description
Complete accounting processes and reconciliations
statements for payroll.
Process final payroll for the accounting year.
Enter the post accrual payroll entries as required.
Enter and post all correcting or adjusting payroll entries
for the period.
Process Year-End Payroll Report.

Document(s)
Reconciliation
statement
Pay Sheet

Appendix VID: Closing Fixed Assets Accounts

Responsible
Officer
Accountant

Description
Record all additions, disposals and movements of fixed
assets. Post all monthly depreciation entries.
Carry out physical counts of all assets held at the end of
the year.
Update the fixed asset register.

Document(s)
Fixed Asset
Schedule
Assets Survey
Report/Stock
Taking Sheet

Appendix VIE: Inventories

Responsible
Officer
Store
Keeper,
Accountant,
Internal
Audit

Description
Cary out physical count of all the inventories kept in
stores at the end of the year.

During the count, identify and count obsolete, damaged

and expired items. Obtain the values of these items and
advice management on whether to write them off.
Compare the results of the physical stock counts to the
perpetual records and obtain explanations for any
variances.
In cases where no explanations have been obtained or the
explanations indicate that a write off is a reasonable
option, the perpetual record shall be updated and
corresponding entries shall be made in the General
Ledger.
Compute values based on applicable accounting standard
and make entries in the General Ledger to adjust the
balances.

Document(s)
Inventories
Survey Report

Appendix VIF: General Ledger

Responsible
Officer
Finance and
Accounts

Description

Document(s)

Complete accounting processes and reconciliation

statements for General Ledger
Post all the standard journals for the accounting periods.
Process and post all correcting or adjusting journal
entries for the period.
Process the Financial Statements for the accounting
period and all other financial reporting documents.
Bank Reconciliation Procedures:
Update reconciled transactions from the bank
statement;
Enter miscellaneous charges from bank statement
into bank reconciliation;
Compute balance;
Reconcile posted balance to bank balance with
unreconciled item list (outstanding cheques and
deposits in transit).
Carry out cash count at the end of the year; Prepare Cash
Certificate and a statement reconciling the cash at hand
to the Petty Cash/Imprest amount.
Close the accounting year when completed.

Appendix VII: Organogram of Finance and Accounts Department

Finance and
Accounts
Manager

Internal Auditor

Accountant

Sectional
Officers

Cost and
Management
Accountant

Store Keeper

Other Officers

Cash Officer

Sectional
Officers

Payroll Officer

Sectional
Officers

Journal Vouchers

Financial
Statements
Bank Statements,
Bank
Reconciliation
Statement

Cash Certificate