FINANCIAL MANAGEMENT MANUAL

For
UGANDA COOPERATIVE SAVINSG AND CREDIT UNION LIMITED (UCSCU)

Admin. & Finance Manual UCSCU 2009

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TABLE OF CONTENTS

Admin. & Finance Manual UCSCU 2009

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& Finance Manual UCSCU 2009 Page 3 of 29 .ABBREVIATIONS FAM AA FEW IFAD MFI MFPED MOU RFSP MTTI CCD CM RCS SACCO UCSCU LPO IA PO CEO PFA GPR GRN RFOM Regional Field Operations Manager Chief Executive Officer Financial Extension Worker International Fund for Agricultural Development Micro finance Institution Ministry of Finance. & Economic Development Memorandum of Understanding Rural Finance Support Program Ministry of Tourism Trade and Industry Commissioner for Co-operative Development Commissioner Microfinance Registrar of Co-operative Societies Savings and Credit Cooperative Society Uganda Cooperative Savings and Credit Union Local Purchase Order Internal Auditor Admin. Planning.

In order to achieve this. and accountability for funds. 2.1. • Funds for audit services 2. Ensure that adequate rules governing financial planning and management of funds received by UCSCU are put in place. Introduce adequate internal controls for the adequate management of the funds and asset Admin. The above is meant to build capacity of SACCOs to enable them handle PFA funds.owned institution that offers demand –driven quality financial services to member SACCOs for growth and profitability. Government. In 2008 UCSCU signed a MoU with GoU to: • Support formation of SACCOs in Sub-counties where none exists • Support Strengthening of existing weak SACCOs • Facilitate strong SACCOs through opening branches to take services nearer to more people. & Finance Manual UCSCU 2009 Page 4 of 29 . UCSCU’s mission is to be a sustainable SACCO. Casher and Watchman • Funds for Office rent • Office refurbishment and boggler proofing. RFSP. donors and other stakeholders External Auditing of UCSCU and the RFSP programme 3. disbursement.0 INTRODUCTION Uganda Co-operative Savings and Credit Union is the Apex of Savings and Credit Cooperatives in Uganda. UCSCU must put in place policies to guide its internal administration and finance management.0 PURPOSES AND SCOPE OF THE MANUAL This manual therefore is to provide guidelines on: • • • Operating procedures for the receipt. This is done through: • Training • Provision of kits • Provision of funds for salary of Manager. Ensure that adequate accounting and related records are properly kept in accordance with the standard set forth in the manual 3.0 OBJECTIVES OF THE MANUAL 1. use of assets and other resources Reporting to the Board. members.

Adequate controls over access. Funds held in cash. and must personally sign for the funds and issue a receipt in the names of the company/entity he/she represents. The original is issued to the person paying in the duplicate is attached to the pertinent voucher. and use of funds should be maintained at all times. funds must be managed in such a way as to minimize their loss or misuse. For payments to staff. & Finance Manual UCSCU 2009 Page 5 of 29 . Exceptions to this requirement include the following: a) A payment to UCSCU by a vendor. • • • d) e) The Cashbook is debited for all cash receipts The Cash Book is credited for all cash payments. Introduction I. creditor. b) c) All cash collected should be banked within 48 hours of receipt. The person being paid must properly identify her/himself. II. custody. Other than cash held on hand for the petty cash imprest. and supporting documentation explaining the nature of payment must be attached to the voucher. managed. Cash Payments: All payments in cash must be evidenced by a payment voucher. effective. and used in such a way as to ensure value for money. beneficiary. Updating the Cashbook: A separate cash book shall be maintained for purposes of recording all cash transactions which are not part of the petty cash imprest.1 OVERALL FUNDS MANAGEMENT I. or donor is made in cash b) A refund by staff of unused portion of a working advance c) An emergency working advance request by a member of staff d) An emergency purchase request where such purchase cannot be settled by cheque/draft III. In order to be efficient. and economical in the course of implementing UCSCU activities. Admin. a signature acknowledging receipt of the funds is sufficient. The balance on hand shall be reflected at the end of each day.4. as well as in UCSCU bank accounts should be controlled. UCSCU transactions shall be carried out via the bank accounts. while the triplicate remains in the book for updating of the cashbook.0 MANAGEMENT OF UCSCU FUNDS 4. A safe deposit box or other secure facility should be used to keep cash and other valuables in safe custody. The Cash receipt is serially numbered and printed in triplicate. Management of Cash a) Receipt of Cash: All cash received should be acknowledged by issuing an official Cash Receipt to the person making the payment.

the CEO shall notify the open a bank account. UCSCU will also open bank accounts for each Region through which Regional Officers will receive funds for operations based on activity. Regional bank accounts will be operated by the Field Officer and RFOM A list of the signatories will be maintained and regularly updated. • • • Admin. & Finance Manual UCSCU 2009 Page 6 of 29 . Management of Bank Accounts a) UCSCU Bank Accounts: • UCSCU shall maintain a bank account for each donor’s funds in compliance with the specific donor requirements. the RCS will be requested to approve the extra signatories. • UCSCU shall also open and operate a US dollar account into which the consultancy fees shall be deposited.iv. with justifications • The Board. This will reduce the need for Officers to carry bulk cash. Board of the need to • • b) Opening of Bank Accounts • Prior to opening any bank account. designating the bank in which the account is to be opened. • • • Where the donor(s) remit the funds in hard currency. where applicable. c) Bank Account Signatories • The signatories to all UCSCU bank accounts will be the CEO and the FAM. The CEO should immediately notify the bank in writing in the event of a change in signatories on a given Account. in collaboration with CEO and/or the Donor. Separate cashbooks shall be maintained for each bank account operated by UCSCU All Accounts shall be designated as Uganda Co-operative Savings and Credit union limited and the name of the donor. the account shall be maintained in an easily convertible hard currency account UCSCU shall also maintain an account from which its core business operational disbursements shall me made. In case of a special requirement by a donor. shall pass a resolution authorizing the opening of the account.

The duly completed form shall be submitted to the Administrative Assistant for review and verification for completeness and accuracy. CCA or other donors. No more money should be advanced to a staff without completing accountability. the Assistant Finance Officer will then prepare a Payment Voucher (Appendix 17) and indicate the correct coding information for classification purposes. or vice versa. shall prepare a work plan and budget for planned activities on a quarterly basis and submit to IFAD. LPOs. The staff who have received advances should account for the money within two weeks after completion of the assignment. and replenishment request. Cheque payments to statutory and other bodies shall be initiated by the Administrative Officer with relevant documents. etc Cheque payments to staff for working advances and other official purposes shall be initiated by the respective staff. The administrative Officer shall also write a letter to the b) c) d) e) Admin. goods received notes/service completion certifications. All transfers shall be by cheque or money transfer directly into the designated bank account. The CEO shall negotiate with the banks for the best possible foreign exchange rates while converting hard currency into Uganda Shillings. showing how previously advanced funds were spent. with consultation from the FAM. etc. LPOs. After approval of the payment requisition. attaching relevant sections of approved work plans and activities. c) The CEO shall also include a monthly funds Account reconciliation statement. Transfers from IFAD/GOU and other Donors to UCSCU a) b) Annually the CEO shall prepare a work plan and budget for the AGM. as well as the cheque and submit to the FAM for approval and signature. For Donor funds. approval of the Quarterly reports will be made to the Board of Directors indicating the performance of the work plan and budget and facilitate a guided review of UCSCU operations. the CEO. internal memoranda. d) e) f) VI. attaching all relevant documentation for contracts. and the balance at the end of the month. funds reconciliation statement. GOU. Supporting documents include invoices. The work plan and budget. should be sent to PAU within two weeks after the close of the month of accountability. Failure to account for money will lead to the staff being required to refund the money or it will be deducted from his/her salary. & Finance Manual UCSCU 2009 Page 7 of 29 . purchase requests.5. Payments from the Bank Accounts a) Cheque payments to vendors should be initiated by the Procurement Officer who will complete a Payment Requisition Form (Appendix 16).

The cheque books should be registered and controlled. issue the receipt for the payment. until such book is finished. Cheques should be written clearly in indelible ink. and amount. cheque number and mount. alerting them of the need to issue official receipts on collection of the cheques. All unused space must be crossed out to avoid insertion of additional data. accuracy and completeness of the documentation submitted. vouchers. and sign for the cheque(s) in the cheque payment register. The Assistant Finance Officer shall then enter details of all payments effected in the cashbook and appropriate ledger. f) Each cheque signatory is responsible for ensuring the validity of the payment. and file sequentially in chronological order. After signing. Cheque Book Maintenance a) b) Cheques are valuable. attach the receipt obtained. the chequebook should be rejected.bank listing each cheque issued. On receipt of a new chequebook. Signatories should also ensure that the cheques listed on the confirmation letter are in agreement (both payee and amount) with the actual cheques written. the cheques are returned to the Assistant Finance Officer for issuance. The cheques and confirmation letter are submitted to the signatories. In the event a leaf is missing. adherence with relevant policies and procedures. g) h) i) j) VII. and other supporting documentation “PAID”. Chequebooks shall be kept under lock and safe by the FAM. the Assistant Finance Officer calls all payees to collect their payment. and the CEO promptly informed. Once a payee or their duly designated representative comes to collect payment. the cheque stub (counterfoil) should be completed. description. the Assistant Finance Officer should request them to positively identify themselves. and from one book at a time. No spaces should be left before or after words and figures. including the following information: • • Date Payee c) d) e) f) Admin. payee. Even the cheque book under use shall be kept under lock and key by the FAM. All cheques shall be kept under lock and key for safety purposes. The Assistant Finance Officer shall stamp all invoices. & Finance Manual UCSCU 2009 Page 8 of 29 . the payee. approval. including the date. coding. and other details. the FAM shall verify that all cheque leaves are intact prior to leaving the bank. On receipt of the signed cheques. and issue it out to the AFO when cheques are to be written. For each cheque written. and should be kept in a safe and secure place. as well as the relevant account code. Cheques should be written sequentially.

& Finance Manual UCSCU 2009 Page 9 of 29 . taking into account unpresented cheques and un-credited deposits In the course of the reconciliation. the FAM must be informed of the intended cancellation. The Assitant Finance Officer should obtain documentation from the bank detailing the bank charges levied. the FAM should obtain a bank statement from each bank. Admin. reviewed by the IA and approved by the CEO by the 10th day of the following month. (Appendix 18) The AFO should print out a listing of all bank transactions for the month (bank ledger) and submit to the FAM and IA The FAM should then reconcile the cash book balance to the bank statement balance by checking off all items that appear on both records. d) e) f) g) X. with justification. interest earned. etc for the period Errors on the bank statement should be noted and the bank informed promptly in writing The bank reconciliation should be signed by the FAM. Regional Branch Management Reporting system i. viii.• • • • a) b) c) Brief description of the nature and purpose of the payment Cheque amount Initials of the signatories Payment voucher number Cheques should be made out payable through the payee’s account Cheque stubs from fully used cheque books should be kept in a safe All signed cheques should be returned to the Assistant Finance Officer who will prepare a register for all outgoing cheques. FAM should identify and credit the members who have paid their fees through the bank. Canceled Cheques a) For a cheque to be cancelled. The statement should cover the whole month. Bank Statements and Reconciliations a) b) c) At the end of each month. the FAM should investigate all discrepancies and items outstanding for over a month.

Have a listing of such cheques available to members of staff so that bank statements can be thoroughly investigated Notify the police and open a police file for the lost cheques Bank Charges and Interest Upon receipt of the monthly bank statement. issue a stop payment order to the bank. The payment voucher should be marked and a note made in the cashbook and ledger. interest income. The cancelled cheque should be stapled back into the chequebook on the corresponding cheque stub. and holes punched in the cheque. b) XI. together with all pertinent documentation. and amounts. should be availed to the FAM and IA for inspection The original payment request and other papers may then serve as documentation in support of a replacement voucher and cheque Details of the replacement cheque should be cross-referenced to the cancelled cheque c) d) e) f) XI. & Finance Manual UCSCU 2009 Page 10 of 29 . Notify the bank promptly in writing by listing the pertinent cheque numbers. noting the serial numbers. and other bank-originated transactions. Before a replacement cheque is written and signed. The amount of the cheque should be reinstated to the cashbook. Ensure bank acknowledges correspondence by officially stamping a duplicate of the letter. Questionable charges should immediately be brought to the attention of the CEO for further investigation The AFO should then generate journal entries and attach a copy of the relevant bank statement section. then submit to CEO for approval. Lost or Stolen Cheques a) b) c) d) XII. the cancelled cheque.b) The word “cancelled” should be written across the cheque and on the stub. a replacement can be issued. and the payee notified. Where the cheques were already written at the time of loss/theft. Admin. Upon surrendering of the stale cheque. a) b) c) Notify the bank immediately upon loss/theft of any cheque books/leaves. the FAM should thoroughly examine it for any bank charges. Stale Cheques a) Cheques issued to payees but remain un-presented for a period exceeding six months should be considered stale. payees.

and sometimes emergency payments. National educational fund. interest on loans and annual contribution b) Grants and donations: • • • • • • • • • c) d) e) f) g) RFSP/IFAD Government of Uganda CCA/WOCCU Proceeds from disposal of assets Staff advance refunds Sale of bidding documents Donations Loans Contributions from beneficiaries for UCSCU services All incoming funds should be received by the AFO and an official receipt issued to the person making the payment. a petty cash imprest will be maintained. XIII. 4. After banking. Petty Cash Imprest Amount For the purpose of meeting small.2 PETTY CASH I.000. a petty cash imprest of UGX 2. Admin. Since UCSCU operates a petty cash float. Petty Cash Defined An amount of money set aside to cater for payments for small. entrance fees. Each cheque or cash receipt should be entered into the relevant cash book Prior to the close of each day. Loan protection Fund.000/= by the Administrative Assistant at regional offices. funds will come from the following but not limited to: a) Funds will be received from members’ share capital. All funds received must be banked intact within two (2) business days. members’ deposit into the central fund. Receipt of Funds (Cash/Cheques) In the course of implementing activities of UCSCU. spending funds upon receipt is not permissible. in order to restore it to its normal level. routine.d) The journals should be passed and a new bank ledger printed out for the bank reconciliation process. II.000/= shall be maintained by the AFO at head office and UGx 800. & Finance Manual UCSCU 2009 Page 11 of 29 . This means that replenishments to the fund will be for the total expenditure paid out. the cash receipt and bank pay-in slip should be batched and journalized. the daily receipts should be summarized. routine expenditure. For purposes of meeting such small expenditures.

IV.000. After approval. V. The optimal level for triggering replenishment is 150. Accessing Petty Cash The maximum amount of money that can be obtained from petty cash is 100. together with the pertinent Petty Cash Vouchers – PCV (Appendix 14). & Finance Manual UCSCU 2009 Page 12 of 29 .000/= (the value of the imprest amount) shall be remitted to the Regional Bank Account as the petty cash imprest. and the Cash Count Certificate to the IA for review and to CEO for approval. and can be revised in consultation with the FAM and CEO. AFO prepares a cheque for the value of approved petty cash expenditure to replenish the imprest.000/=. The following simple steps set forth the procedure for requesting and receiving money from the Petty Cash Custodian (AA): a) b) c) d) A staff member picks up a Petty Cash Voucher (appendix 14). Record Keeping for Petty Cash transactions A separate cashbook for the petty cash imprest will also be maintained to record petty cash transactions. Supporting documents (vouchers. using a Payment Requisition – PR (Appendix 12).000/= will be cash imprest for Head Office Subsequent replenishments shall be on the basis of a duly authorized petty cash replenishment requisition. UGX 2. after the following procedures have been fully performed: • • • • • d) Proper Accountability for previous imprest is submitted and scrutinized by the Internal Auditor FAM classifies and summarizes all petty cash vouchers by account code AFO prepares a Payment Requisition detailing the nature and amount of summarized expenses AFO submits the Payment Requisition. Breaking down expenditure amounts to circumvent the petty cash policy is prohibited. Receipt of Funds into Petty Cash Imprest a) b) c) UGX 800. The completed PCV is submitted to the immediate supervisor for approval Submit the approved PCV to the AFO (petty cash custodian) for payment Sign the Received by section of the PCV upon receiving payment Admin. receipts. or the bottom part (settlement) for staff who have already used their own money and are seeking reimbursement.000/=.III. etc) should also be maintained in a separate file. and a staff member can only have one petty cash advance at any one time. fills the top (advance) part for staff who need money to carry out activities.

an Engineer will be contracted to assess the requirement. FAM compares the amount of the advance to the actual expenditure. organizations. receives the cheque. For services to SACCOs. or private companies. NGOs. filing cabinet. They may include pre-qualified individuals. the following is the procedure for accounting for petty cash: a) b) c) d) e) f) g) h) i) As far as practicable. or as soon as the activity for which the advance was taken is completed Staff who fail to account for petty cash advances will have the outstanding amount deducted from their salaries. the beneficiary group/person is paid 50% of the agreed contract sum to BCF on signing of the MOU. Complete the Accountability form and have it signed by Head of Department. and signs for the cheque in the cheque register. Admin. Petty cash advances should be accounted for within 48 hours. which have entered into a MOU to provide specific services to RFSP/SACCOs. Attach all receipts and other evidence of accountability Sign the form and submit to immediate supervisor for approval Submit approved PCV to FAM through the IA. UCSCU then pays the balance upon completion and submission of all relevant documents and invoices. Purchasing of stationery and other goods will follow the same route.3 a. or their duly designated representative. UCSU contracts to pay the service provider between 50% and 75% of the agreed upon cost in accordance with terms set in the MOU. Accounting for Petty Cash Whether a staff member took an advance or they used their own money. & Finance Manual UCSCU 2009 Page 13 of 29 . the balance is payable after the work is completed. Service providers will be engaged using procurement guidelines. For advance holders. meeting quality. quantity. No over expenditures will be entertained. a) PAYMENT FOR GOODS AND SERVICES IFAG/GOU Payment to Service Providers for Services Rendered Service Providers are individuals. a) b) c) d) e) As part of capacity building under RFSP one selected SACCO per sub-county will be provided with a safe. identifies him/herself. 2 bicycles or one motor cycle. and may be denied access to petty cash in future Staff can only have one advance at a time. obtain from vendors receipts for all moneys you pay out. A team of officers from UCSCU and RFSP/PAU will do a needs assessment for SACCO before the assistance is given For office refurbishment. CBOs. The service provider. For Community-wide activities. and delivery standards stipulated in the contract. and firms.6. issues a receipt. and can only access subsequent advances after fully accounting for previous advances 4. Generator or solar panel and have their offices refurbished. they will be paid. Payment to Vendors for Goods Supplied to IFAD/GOU Program SACCOs b) c) d) II. CSOs. Once the vendor supplies the specified goods.

the cashbook or computerized cash ledger should be balanced. their use. and bank statements (with journals). maintenance. 11. receives the cheque. 4. Responsibility for Maintenance of Records The FAM. transfers. prepares a payment request. bank advices (with appropriate journals). Vendors/service providers who consistently fail to discharge their obligations to the satisfaction of UCSCU will be blacklisted. All documentation. or picks their cheque from the Regional Offices. After the cheque is written and signed (as spelt out in this manual). The vendor. identifies him/herself. The balance per the cashbook/ledger should be reconciled to the bank statement by the 10th of each month for the previous month. The Cashbook The Cashbook (manual or a computerized printout) should be updated with all monies received and paid out (cash.4 ACCOUNTING RECORDS 1. The approved payment is then submitted to the AFO for cheque writing. Overview This section outlines the various accounting documents. if satisfactory. or their duly designated representative. issues a receipt. The FAM reviews the request and attachments. and signs for the cheque in the cheque register at UCSCU offices. the AFO calls the vendor to pick up their payment and issue a receipt. and recommend payment to the vendor. fails to deliver goods/services satisfactorily. The PO reviews the documentation for completeness and compliance with procurement policies and procedures and. is responsible for ensuring overall safety. through supervising the FO and AFO. Movement of accounting records should strictly be with written authorization from the FAM All accounting records should be maintained in safe custody for a minimum of six years 111. part or all of their payment may be withheld until a satisfactory remedy is provided. At the end of each month. g) h) i) j) In the event that a service provider. The IA Admin. how to handle and store them. together with certifications. & Finance Manual UCSCU 2009 Page 14 of 29 . is submitted to the PO to originate payment. and approves. vendor.f) The Administrative Officer prepares a memo certifying that the goods were delivered. Cashbooks should be updated daily using payment vouchers. cheques. Cash and each bank account must each have separate cashbooks/ledgers. receipt vouchers. and custody of all accounting records. direct debits/credits. etc). The FAM is responsible for reconciling each account.

and sequentially numbered e) Each receipt shall contain the following information The date payment is received The name of the person making the payment Reason/explanation for the payment Amount received. or department responsible for the transaction d) Completed Payment Vouchers become part of the supporting documentation for the relevant payment. The Payment Voucher a) All payments are to be made on a fully completed and authorized Payment Voucher b) Separate payment vouchers be used for each program. It should be based on an invoice or cash requisition initiated by the staff requesting payment. b) Separate receipt books be used for each programme – IFAD. The cashbook or computerized cash ledger should have the following details: • • • • • IV. Supporting Documentation Admin. invoices. Date of the cheque/receipt/journal A sequential reference number for the cheque/receipt/journal A description of the payment or receipt The name of the payee or person/entity making the payment The amount of money paid/received The Receipt Book a) A receipt book should be maintained and used to record all monies received. FO or AFO). etc VI. both in figures and words Details of the cheque (if payment by cheque) Signature of cashier Stamp V. & Finance Manual UCSCU 2009 Page 15 of 29 . GOU and UCSCU main c) A payment voucher is an accounting document. whether in cash or by cheque. The original copy is issued to the payer. They should be attached e) Where possible. d) Receipt books shall be pre-printed. The CEO shall approve each bank reconciliation. and the triplicate retained in the book. budgets/work plans. and as such is only initiated by a member of the finance department (FAM.should verify each month’s reconciliation and sign off to certify the verification. the duplicate copy attached to the supporting documentation. Cash requisition forms should be accompanied by quotations. GOU and UCSCU c) The Receipt book shall be maintained in triplicate.IFAD.

the IA may do spot checks to Programme SACCOs to monitor the use of kit and funds provided to SACCOs for office rent and salaries in accordance with laid down policies and procedures. narrative.0 FINANCIAL REPORTING AND MONITORING (a) Annual Accounts and Balance Sheets will be presented to the member SACCOs at an Annual General Meeting to be held within three months of the end of the fiscal year which ends in December (b) Financial reports on all RFSP/GOU activities are prepared for purposes of accountability of the funds to donor. (c) Financial reports for internal monitoring of progress are prepared on a monthly basis. within two weeks after the close of the month. (f) At least once in a quarter. & Finance Manual UCSCU 2009 Page 16 of 29 . actual performance. and scrutiny by both internal and external auditors. Persons outside the finance department who need to access finance records should sign for them d) All documents and records should be available for review. 6. as well as petty cash c) Access to financial records should be restricted to finance staff. where. and original financial documents with attachments. 5. activity report. when. and movement of such records should be recorded indicating who. (e) The Quarterly reports should include detailed budgets (activity and financial). (h) On an as needed basis. within two weeks of the close of the quarter. as well as to monitor fund utilization. (g) On an as needed basis. and variance. inspection. Variances of more than 10% should be flexed and explained. the IFAD/GOU Financial Controller/Auditor General may do a spot check of RFSP/GOU program financial records (i) Reports to PAU/IFAD/GOU to consist of the financial report. 0 PREPARATION OF WORK PLANS AN BUDGETS Admin. the IA will visit the Regions to review financial management systems. (j) All financial reports will be produced by use of an accounting soft ware.a) Supporting documentation for each transaction must be attached to the payment voucher and filed in sequential number order b) Where applicable. a separate file should be maintained for each bank account. (d) Financial reports on UCSCU core business to UCSCU Board are prepared on a quarterly basis. and when returned.

(a) The Board and management will prepare Annual work plans and budgets for approval by the Annual General Meeting b)``The activities to be carried out.3 Provide equal opportunities for all qualified bidders to compete favorably Encourage local manufacturers/providers to participate in the process Emphasize transparency in the process Ensure economy and efficiency Procurement Methods – Goods and Works Acquisition of assets under projects or donor programs. works. For procurement to meet the above conditions. etc. computers. in the correct quantities. from the right supplier. as well as timing and budgets will be as spelt out in the MOU between UCSCU and other stakeholders. Admin. and works: I. These policies also spell out the staff members responsible for various aspects of UCSCU activities. use. & Finance Manual UCSCU 2009 Page 17 of 29 . as well as preventing their abuse and misuse. The following methods will be used in the procurement of all goods. 2 Overview Procurement is the process of buying. 7. International Competitive Bidding (ICB): This provides equal opportunity to suppliers from World Bank member countries. services. Donors and Government of Uganda requirements. They are intended to provide staff. agreed upon progress indictors and deliverables. leasing. provisions in the contract/MOU will be strictly adhered to. The policies and procedures laid herein conform to both Members.0 PROCUREMENT OF GOODS AND SERVICES 7. management. management. It is mainly used for procurement of vehicles. and disposal of assets for the implementation of UCSCU activities. or other legal means of acquiring the right for goods. and services to satisfy defined needs at the right time. 7. and other stakeholders of UCSCU with guidelines aimed at ensuring proper use of assets. c) The activities stipulated in the MOU. maintenance. the following guidelines should be followed: • • • • 7.1 PURPOSES AND SCOPE These policies and procedures govern the acquisition. and works valued at …………… or above. motorcycles. services. and other agreed upon and documented discussions form the basis for work plans and budgets. It involves advertising tenders internationally and should be used to procure goods. and at the right price.

specifying the goods or services required. II. for goods and works estimated to cost less than USD 200. National Competitive Bidding (NCB): It involves advertising locally and inviting company to tender. procurement requirements for goods and services should be clearly articulated in the annual work plans. services. with the assistance of the Procurement Officer. e.4 The Procurement Cycle The following procedures apply to the procurement of goods. IV. Complete a General Purchase Request (GPR) Form: An authorized staff member should complete a General Purchase Request Form (Appendix 1).4 Procurement Methods – Consultancy Services The following methods shall be used in the procurement of consultancy services: I. VI.g. Quality and Cost-based Selection: This method involves selection on the basis of cost and comparing the quality presented by each consultant. which also accessed GOU and IFAD program funds with clearly defined activities and expected outcomes. Direct Purchase: This method will be used in extending existing contracts e. bills of quantities. I. This will allow for adequate procurement planning and availability of the expected deliverables in a timely manner. Least Cost Selection: This method is used with goods of standard price for routine assignments. when there are a limited number of suppliers. standardization and repair of equipment. or clearly articulated terms Admin.g. especially common user products. Articulation of Needs in the Annual Work Plans: UCSCU being a private Institution. Service Delivery Contracts 7. The contract is awarded on the basis of obtaining three quotations from various countries. Local Shopping: Is used to procure off the shelf. Limited International Bidding (LIB): This method is appropriate where there is no open advertisement. V. 7. International Shopping: Will be used for small value products not readily available locally in Uganda.000 per contract. Is used for procurement within Uganda. e. and involves obtaining quotations from at least three different reputable suppliers. Selection under Fixed Budget V. The contract is awarded on the basis of quotations obtained from three qualified contractors in response to a written invitation. or relatively cheap items. The requestor. audits III.000 but more than USD 20. Single Source Selection: IV. This involves direct sourcing internationally III. should clearly indicate the specifications.g.II. II. and works. & Finance Manual UCSCU 2009 Page 18 of 29 . with reference to the activity (activities) in the work plan to which the procurement relates.

Where this is not possible. specifying compliance with terms and conditions. and quantity Price of the goods/services inclusive of taxes. the Procurement Committee shall evaluate and approve VI.000.000. The completed form is then submitted to the Finance & Administration Manager. Evaluation of Quotations/Bids: On expiry of the quotation/bidding period. and the second one for the procurement files. A minimum of three quotations/bids should be obtained. but below UGX 20. quality. Admin. and price. the PO shall notify the firm with the winning quote by issuing a Local Purchase Order (LPO) for procurement of goods and services valued at UGX 10.000/=. V. the PO and FAM shall review the summarized quotes/bids and select the supplier/provider.000. with one copy for the supplier. reasons should be documented and approval sought from the CEO. If these are complied with.000/=. For procurement of goods and services below UGX 5. and validity of such prices Passing of title and assumption of risk Penalties for failure to deliver.000.000. the PA and FAM shall recommend to the CEO for approval.000. In either case. including: • • • • • Price for the goods or services Delivery locale and date a. as well as the delivery locale and time line. For quotes/bids above UGX 20. Description of the goods/services. Administrative Review: The Finance & Administration Manager (FAM) reviews the GPR/RFS to ensure compliance with budgetary and programmatic aspects. III.000/= and below. & Finance Manual UCSCU 2009 Page 19 of 29 .000/=. Award of Contract: After approval of the SBA.000/=. and one for the procurement files. the PO prepares a summary of all quotes/bids received.000/=. The GPR/RFS is logged onto the Procurement Status Report – PSR (Appendix 3) for tracking and monitoring. including quality. one copy for the supplier. Invitation of Providers: Upon receipt of the approved GPR/RFS forms. the LPO or Contract should clearly spell out the terms and conditions of the procurement. the FAM approves the GPR/RFS (CEO for larger items). IV. The LPO/contract should be signed by persons authorized to commit the UCSCU into binding financial obligations. technical responsiveness. one for the FAM. using a Summary Quote/Bid Analysis Form – SBA (Appendix 4). The contract is completed in duplicate. or quantity specified in the agreement The LPO is completed in quadruplicate.of reference. For the vendor/supplier. or prepare a contract for procurement above UGX 10. one for the requestor. delivery time table. or for delivery of goods/services not of the type. the Procurement Officer (PO) summarizes the procurement request and invites eligible providers/suppliers using the relevant procurement method. the LPO/contract should also be signed by a person with authority to commit the organization to perform the services or deliver the goods described in the LPO/contract. The delivery clock begins to run once the vendor/supplier has received a duly signed copy of the LPO/contract. The approved GPR is then forwarded to the Procurement Officer who is responsible for completing the procurement. For quotes/bids above UGX 5.

However. in line with the terms set forth in the contract. attaches the invoice and relevant copies of the contract. The vendor/contractor submits an invoice. make. advance payments should only be made in those instances where it is not possible for the vendor to supply without the advance payment. For services not satisfactorily rendered. the PA should advise both the FAM and CEO. and take appropriate action as spelt out in the LPO/contract. the progress payment should be processed in accordance with the terms of the agreement. If the goods are satisfactory. This is especially true of construction and other works contracts. and such advance payment is restricted to a ceiling of 25% of the total cost of the goods/services. and approves the requisition. Page 20 of 29 Admin. as well as the condition of the goods. and verify quality. and that payment should be processed. quantity. b) For Services: The PO. b) Progress Payment: For contracts which stipulate payment upon attainment of certain indicators or elapsing of time. VII. Payment for goods/service: Payment for goods/services should be done in conformity with the terms and conditions set out in the LPO/contract. • • The requestor/supervisor of the contract should certify in writing that the supplier/vendor/contractor has attained the agreed upon progress. such payment should be provided as stipulated in the agreement.VI. The PO shall attach copies of the sections of the LPO/contract which indicate the total price. generate a Goods Received Note GRN (Appendix 5). Once the services have been satisfactorily rendered. The completed GRN should then be submitted to the FAM for approval and update of the Bin Cards. appropriate remedies. and the nature and amount of the advance payment being sought. Will be signed as provided in the byelaws. a Contract Completion Form – CCF (Appendix 6) should be completed by the supervisor of the services or a duly designated representative. The Assistant Finance Officer then prepares a cheque and a Payment Voucher – PV (appendix 8). The FAM reviews the request. Receipt of the Goods/Services a) For Goods: The PO should inspect the goods delivered against the specifications set forth in the LPO/contract. in conjunction with the requestor and other technically competent personnel. should monitor progress against set targets/milestones. The PO then raises a Payment Requisition Form – PRF (Appendix 7). The FAM will approve the Payment Voucher and the cheque. should be pursued. and forwards to the FAM. If the goods are not satisfactory. & Finance Manual UCSCU 2009 . • • • • • • The supplier/vendor should formally request for the advance payment by issuing an invoice for the amount required. and will take one of the following forms: a) Advance Payment: For LPOs/Contracts which stipulate that the vendor/supplier is to be given an advance payment.

Indefinite Quantity Contracts (IQCs) shall be awarded to suppliers of such items on an annual basis using the following procedures: a. c. c) Full/Final Payment: For full payment after all goods have been supplied or all services have been rendered. invitation for quotations/bids are not a suitable means of procurement. The Procurement Committee shall sit and evaluate firms on agreed upon parameters. and forwards to the FAM. The FAM reviews the request. forwards to FAM • The FAM reviews the request. and other office supplies. the PO shall invite quotes from the pre-qualified firms. & Finance Manual UCSCU 2009 Page 21 of 29 . Admin. attaches the invoice and relevant copies of the contract. or services have been satisfactorily rendered. and shall be awarded Indefinite Quantity Contracts for 1 year. f. d. Indefinite Quantity Contracts For procurement of routine items like stationery. • The AFO then prepares a cheque and a Payment Voucher – PV (appendix 8). The FAM approves the Payment Voucher and the cheque will be signed as provided in the byelaws. and select the three winning firms for each category of goods/services. and approves the requisition. etc. as well as compliance with statutory and legal requirements. financial soundness. as this would unnecessarily prolong the process. with advice of the AA and FAM b. • The FAM approves the Payment Voucher and signs the cheque VIII. attaches relevant pages of the contract/LPO to invoice. The PO shall compile a list of all items routinely used by project staff. g. and experience. • Vendor/Contractor issues invoice for total contract or balance remaining on the contract • PO ascertains that the goods have been satisfactorily delivered. The PO shall invite eligible suppliers to submit bids for supply of such items. and the contract shall be awarded to the winning quote – in terms of price. delivery period. The bids contain technical aspects of the supplier. the PO summarizes them using the Summary Bid Analysis form. prepares Payment Requisition. or where the supplier/contractor is requesting for their last installment payment. providing details of each supplier as contained in their submitted bid e. printing. The AFO then prepares a cheque and a Payment Voucher – PV (appendix 8). For procurement of such items. and approves the requisition. Upon receipt of the submitted bids.• • • • The PO then raises a Payment Requisition Form – PRF (Appendix 7). For each specific procurement of the goods/services under this category. their reputation. The selected firms shall be pre-qualified to supply goods or provide services on a competitive basis.

Admin. & Finance Manual UCSCU 2009 Page 22 of 29 .

b) Stock items must be kept in an appropriately controlled store. and quantity of the various inventory items required and submit to the FAM c) The FAM approves the GPR and submits to the PO who will proceed with the procurement in accordance with applicable policies and procedures. d) The Administrative Assistant is responsible for ensuring there are adequate quantities of inventory stock for use in operations II. They include paper. or exceptions are noted and approved Admin. receipt. The GRN should be prepared in triplicate – one copy for the person delivering the goods. The GRN should provide the following details: • • • • The date on which the inventory items are received Name of person delivering the items. I.0 STORES AND INVENTORY MANAGEMENT This section deals with the acquisition.8. etc. The inventory store must be kept tidy and orderly for ease of access. Other staff members may also articulate their needs b) The AA prepares a General Purchase Request form. nature. such stock levels should not unnecessarily tie up excessive resources. and quantity of each item received Signature of store keeper (AA). & Finance Manual UCSCU 2009 Page 23 of 29 . indicating the description. another copy should be attached to the General Purchase Request. to ensure UCSCU activities are not hampered. Receipt of Inventory into the Stores a) As with any other procurement. III. as well as person delivering b) The AA should check the delivery note against the LPO/contract and the physically delivered goods to ensure they agree. Overview of Inventory Management a) Inventory stock represents those items purchased for use in normal operations. and stock taking. and record keeping for inventory items of the Fund. Procurement of Inventory Items a) The Administrative Assistant in conjunction with the Finance & Administration Manager identifies those inventory stock items that are needed. and their use restricted to official use in pursuit of organizational objectives. and the third copy should be kept in the book. storage. specification. These items are usually procured in bulk for use over a period of time. c) Optimum levels of inventory stock should be defined and maintained. identification of items. a Goods Received Note (GRN) should be prepared for all items received into the stores. pens. and vehicle registration if applicable Description. However. file folders.

and should reflect the physical count of stock held at any one time V. and cost implications. on hand • Reorder level for that item V. There must be a Stock Card (Appendix 9) for each item of inventory in the store. c) The report should contain the following information: • Month of reporting • Detailed listing of each stock item Admin. IV. The stock card should contain the following details: • Name of inventory item • Stock Card Number • Reference number to GRN • Date of receipt/issue • Quantity received. b) The FAM approves the SRN and submits to the AA for issuance of the items requested. the AA should obtain such certification from either the requestor or other technical person d) Both the person delivering and the person receiving the goods should sign the GRN IV. the AA should prepare a Stores Report (Appendix 11). issued. to facilitate decision-making. utilization trends. III. b) The purpose of this report is to inform management of stock levels. c) The AA issues the items to the requestor and signs the SRN d) The requestor receives the items and also signs the SRN e) The AA updates the appropriate store cards for the items issued f) The SRN should contain the following details: • Date • Name of requestor • Description and specification of items required • Quantities requested • Signature of requestor • Signature of issuer (AA) • Signature of recipient (requestor) VI.c) For goods that require standard or technical specifications. II. All receipts of inventory should be recorded on the stock card as additions All issues of inventory should be recorded as reductions Stock cards should be updated each time of receipt/issue of stock. Monthly Stores Reports a) On a monthly basis. Issuing of Inventory Items from the Stores a) Any staff member in need of items from the store should complete a Stores Requisition Note – SRN (Appendix 10) and submit to the FAM for approval. Recording of Received Items onto the Stock Cards The AA is responsible for ensuring that all items received are recorded onto appropriate stock cards I. & Finance Manual UCSCU 2009 Page 24 of 29 .

furniture. The following procedures should be followed in the course of stock taking: • • • • • • • • • • The AA should update all inventory cards prior to stock taking Stock stores should be neatly arranged prior to stock taking AA should be present to assist in identification of records and items. comprehensive stock counts should be done for all inventory items in the stores. except in documented emergency situations The stock taking team should prepare a report detailing the recorded and physical balances of each item of stock. office equipment. c) 8. computers.000/= or more. II. The IA should review and sign the report. and the value of the item is 250.• • • • • • • VII. but should not participate in the stock taking itself IA is in charge of stock taking exercise and should ensure adherence to set policies and procedures All items of stock should be counted and recorded Damaged/obsolete items should be identified and reported No stock should be issued during stock taking. Stock Taking a) b) Opening balance for each item Quantity received during the month Quantity issued during the month Balance on hand at end of month Signature of person preparing the report Signature of person reviewing/approving the report Date the report is prepared The IA should carry out spot inventory audits/inspections on a quarterly basis. etc. Such inspection should be evidenced by signing on the stock card Twice a year (in June and December). and variances The AA should give an explanation of the variances. Examples include land and buildings. & Finance Manual UCSCU 2009 Page 25 of 29 . and investigate variances identified. Admin. which becomes part of the report. Capitalization Policy a) A tangible item of value shall be capitalized and considered a fixed asset when the expected benefits of the item exceed one year. vehicles. Fixed Assets defined Fixed assets are tangible movable and immovable items used in the operations of an Organization. Adjustments to stock cards should be made after approval for adjustments by the CEO.0 FIXED ASSETS I. These items have a useful life exceeding one year.

They are. Costs such as transportation. however. vehicles. & Finance Manual UCSCU 2009 Page 26 of 29 . computers. where the value of the group of such assets meets the fixed asset threshold. installation costs. etc. where applicable Cost of the asset (to bring it to use) Asset Identification Number Location of the asset The IA shall inspect the fixed asset register once a year to: • Confirm the existence.000/= or more.b) c) Assets valued at less than 250. their market value is 250. including condition as to new/used Serial number of the asset. recorded as inventory for control purposes The amount to be recorded for any fixed asset is the total cost of bringing the asset to the intended condition and location of use. Fixed Asset Register a) b) • • • • • • c) The Administrative Officer shall maintain a Register of all the fixed assets of UCSCU The Register shall contain the following information about each fixed asset. Such marking/engraving should clearly identify the type of asset and the number within the type as follows: • • • • • • FF – Furniture & Fittings LB – Land & Buildings EQ – Equipment MV – Motor vehicles CO – Computers OA – Other assets d) e) f) g) III. Assets not meeting this criteria should be expensed Assets acquired as a group. organized by type Date of purchase/acquisition Description of the asset. clearing charges. and their lifespan exceeds 2 years. but are expensed on acquisition. should be capitalized All major assets like buildings. usefulness and location of each asset • Identify assets which cannot be located to the CEO and recommend write-off • Identify assets no longer needed for use in UCSCU and recommend to the FM for disposal Admin. at the time of donation. taxes. condition.000/= should not be capitalized. etc become part of the value of the asset Donated assets are capitalized at their fair market value if. should be comprehensively insured All fixed assets should be marked/engraved for identification purposes. but the value of the individual assets is below the threshold.

whether permanently between locations. which are physically engraved on the asset. and included in the fixed asset register for identification purposes VI. where possible. Disposal of Fixed Assets a) b) • • • c) d) Major disposals of fixed assets should also be articulated in the annual budgeting process. Assets may be disposed of for one or more of these reasons: Items may no longer be needed in the operations of UCSCU Items are in poor condition and repair costs are prohibitive Assets with high running and maintenance costs Assets which are fully depreciated All assets disposal must be approved by the AGM Admin.d) The Administrative Assistant shall reconcile the fixed asset register to the nominal (accounting) ledger on a quarterly basis. Transfer of Assets a) b) Transfer of assets. due to reallocation or disposal. such as interoffice loan or repair. or temporarily for repair. and report any discrepancies to the IA IV. Acquisition of Fixed Assets a) b) c) The acquisition of fixed assets should be incorporated into the annual budgeting process. Major asset acquisitions should be articulated in the annual budget Purchase of assets shall follow the normal procurement procedures Acquired assets are assigned unique asset identification numbers. Where the transfer is temporary. the item should be removed from both the fixed asset register and the nominal ledger. the item is left on the register and nominal ledger c) d) V. and should contain the following details: • Description of the asset • Serial number and Asset Identification Number of the asset • Condition of the asset at time of transfer • Reason for transfer – Permanent or Temporary • Date of Transfer • Signature and name of person authorizing transfer • Signature and name of recipient Where the transfer is permanent. should be documented using an Asset Movement Form (Appendix 15) The movement form should be completed in triplicate. & Finance Manual UCSCU 2009 Page 27 of 29 .

e) In case of donated assets. Express written consent should be obtained from the funding source prior to disposal of assets. Accounting for Fixed Assets d) On acquisition of a fixed asset • By Purchase Debit the Fixed Asset Credit Cash/Accounts Payable • By Donation Debit the Fixed Asset Credit Donation Income Recording of Depreciation Debit Depreciation Expense Credit Accumulated Depreciation for the class of assets f) Disposal of an Asset • Asset disposed at carrying value. It is a charge to the income and expenditure account. Depreciation of fixed assets begins in the month the asset is placed into service. UCSCU fixed assets and/or RFSP/IFAD/GOU funded fixed assets are depreciated on a Straight Line basis The following depreciation rates apply to the various asset types: Asset Furniture & Fittings Equipment Computers Motor Vehicles Buildings Other Assets VII. or written off Debit Accumulated Depreciation Debit Cash/Donations/Obsolescence Credit Fixed Assets • Asset Disposed of at less than carrying value Debit Accumulated Depreciation Page 28 of 29 b) c) d) Useful Life 3 Years 3 Years 3 Years 3 Years 25 Years 5 Years Depreciation Rate 33% 33% 33% 33% 4% 20% e) Admin. & Finance Manual UCSCU 2009 . contractual obligations and conditions should be considered prior to disposal of assets. Such conditions include the following: • Donor policy on asset disposal for donor funded assets • GOU policy for GOU purchased assets VII. Depreciation of Fixed Assets a) Depreciation is defined as the decrease in value of a fixed asset associated with wear and tear of the asset resulting from normal use.

and their use restricted to activities in support of UCSCU. The Administrative Officer. with delegated authority to the Administrative Officer. equipment. They should be properly handled and maintained. individual staff members with assets allocated to them as part of their job responsibilities are responsible for their safe use and custody.Debit Loss on Disposal of Assets Debit Cash Credit Fixed Assets • Asset Disposed of at more than carrying value Debit Accumulated Depreciation Debit Cash Credit Gain on Disposal of Assets Credit Fixed Assets VIII. photocopiers. However. in collaboration with the Procurement Officer. abuse. and Custody of Fixed Assets a) Fixed assets form an important component of UCSCU activities. and other assets The FAM. & Finance Manual UCSCU 2009 Page 29 of 29 . should set up maintenance schedules for computers. Removal and use of fixed assets away from the UCSCU premises should be authorized by the CEO or his representative. is responsible for the safe custody and proper use of all UCSCU assets. Maintenance. Misuse. Use. b) c) d) Admin. and misappropriation are prohibited. vehicles.

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