Islamic Relief

Worldwide
Financial Guidelines
PREPARED BY THE IRW FINANCE
Version 2 Updated November 2005
Prepared by IRW Finance
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Islamic Relief Financial Guidelines

FOREWORD........................................................................................................... 4
1.0 General Framework .......................................................................................... 5
I. Introduction ......................................................................................................... 5
II. Background to the Financial Guidelines ........................................................... 5
III. Rules governing finance.................................................................................... 6
IV. Islamic Relief Worldwide Family..................................................................... 7
2.0 Financial Controls ............................................................................................. 8
I. External Audit...................................................................................................... 8
II. Reporting............................................................................................................ 8
III. Elements of Financial Control.......................................................................... 9
3.0 Financial Reporting......................................................................................... 11
I. Timing of Reports .............................................................................................. 11
II. Procedures ........................................................................................................ 11
III. Formats ........................................................................................................... 12
IV. Reporting Currency........................................................................................ 12
V. Responsibility.................................................................................................... 12
VI Year End Reporting......................................................................................... 12
4.0 Budget Guidelines............................................................................................ 14
I. Proactive Planning............................................................................................. 14
II. A budget............................................................................................................ 14
III. Preparing a Budget ......................................................................................... 14
VI. Strategic Budgeting......................................................................................... 17
V. Approval Process .............................................................................................. 18
VI. Budget Holders................................................................................................ 18
VII. Monitoring ..................................................................................................... 18
VIII. Post Budget Adjustments............................................................................. 19
5.0 Cash and Bank Guidelines .............................................................................. 20
I. Opening of Bank Accounts ................................................................................ 20
II. Closing of Bank Accounts ................................................................................ 20
III. Banking Cash and Cheques............................................................................ 21
IV. Withdrawal of Funds ...................................................................................... 21
V. Authorised Signatories ..................................................................................... 22
VI. Disbursement of Funds: Segregation of Duties.............................................. 22
VII. Depository of Funds: Segregation of Duties ................................................. 23
VIII. General Ledger Controls ............................................................................. 24
IX. Disbursements of Funds: Approvals .............................................................. 24
X. Petty Cash......................................................................................................... 25
XI. Petty Cash Disbursements .............................................................................. 25
XII. Petty Cash Reimbursements ......................................................................... 25
XIII. Internal Control Procedures........................................................................ 26
XIV. Physical Security .......................................................................................... 26
6.0 Guidance to Islamic Relief Signatories ........................................................... 27
I. Information to be checked................................................................................. 28
7.0 Procurement Guidelines.................................................................................. 29
I. Purchase Orders ................................................................................................ 29
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II. Purchasing Requirements ................................................................................ 29
III. Approval Levels .............................................................................................. 30
IV. Placement of Orders........................................................................................ 30
V. Receipt and Acceptance.................................................................................... 31
8.0 Tendering Guidelines ...................................................................................... 32
I. Tendering Instructions ...................................................................................... 32
II. Conditions for the Tender................................................................................ 32
III. Tendering Committee..................................................................................... 32
IV. Tendering Procedures..................................................................................... 33
9.0 Accounts Payable............................................................................................. 34
I. Payment Process: Segregation of Duties ........................................................... 34
II. Accounts Payable Process: Segregation of Duties........................................... 34
III. Accounts Payable Process: Internal Control Procedures.............................. 35
IV. Documentation ................................................................................................ 35
V. Accounts Payable Processes ............................................................................. 36
VI. Accounts Payable Processes: Payments ......................................................... 37
VII. Accounts Payable Processes: Accounting ..................................................... 37
VIII. Accrued Expenses ........................................................................................ 38
IX. Prepayments.................................................................................................... 38
X. Accounts Payable: Expenditure Categorisation.............................................. 39
• •• • General Expenditure Categorisation ........................................................ 39
• •• • Fundraising Expenditure Categorisation ................................................. 40
• •• • Project Costs Expenditure Categorisation................................................ 40
XI. Travel Allowances and Advances ................................................................... 40
XII. Reimbursements ............................................................................................ 41
I Account reconciliations defined.......................................................................... 42
II. Responsibility ................................................................................................... 42
III. Development and review processes ................................................................ 42
11.0 Inter-company Transactions ......................................................................... 44
Principles of Inter-company Accounting.............................................................. 44
General Procedures............................................................................................... 44
Inter-company Dispute Resolution....................................................................... 44
12.0 Income Management ..................................................................................... 46
I. Receipts of Income Controls.............................................................................. 46
II. Donations .......................................................................................................... 46
Donations by Post or in person at the Offices ...................................................... 46
Donations by Credit Cards ................................................................................... 47
Donations via Collections ...................................................................................... 47
III. Reconciliations ................................................................................................ 48
IV. Tax Rebates ..................................................................................................... 48
V. Other Sources of Income .................................................................................. 49
Sale of Donated Goods .......................................................................................... 49
Goods Purchased for Resale ................................................................................. 50
VI. Income In-Kind............................................................................................... 50
Valuation of In Kind ............................................................................................. 50
Documentation ...................................................................................................... 51
13.0 Fixed Assets Management ............................................................................. 53
I. Acquisition and Capitalisation .......................................................................... 53
II. Depreciation...................................................................................................... 53
III. Transfers ......................................................................................................... 54
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IV. Retirements and Disposals.............................................................................. 54
V. Financial and Physical Control ........................................................................ 55
VI. Approvals/Documentation.............................................................................. 56
• •• • Accounting Records................................................................................... 56
• •• • Approvals ................................................................................................... 56
• •• • Institutional Donor Assets ......................................................................... 56
VII. Expensed Assets............................................................................................. 56
14.0 Stock Guidelines ............................................................................................ 57
I. Stock Valuation.................................................................................................. 57
II. Annual physical Stock Count........................................................................... 57
III. Stock not on Islamic Relief premises.............................................................. 58
IV. Proper identification of inventory ownership ................................................ 58
V. Reconciliation of physical and perpetual records............................................ 58
15.0 Exceptions to Financial Guidelines in responding to a Emergency-
Humanitarian Disaster.......................................................................................... 59
I. Emergency Supplies are needed urgently. ........................................................ 59
II. Emergency Aid Distribution ............................................................................ 60
III. Stock Issue for Emergencies........................................................................... 60
IV. Minimum Documentation............................................................................... 60
V. Transportation of Cash to the Field................................................................. 61
VI. Handling Cash................................................................................................. 61
VII. Recording of In-Kind Donations................................................................... 61
VIII. Overview....................................................................................................... 62
16.0 Field Office specific........................................................................................ 63
I. Introduction ....................................................................................................... 63
II. Documentation.................................................................................................. 63
III. Organisational structure................................................................................. 64
IV. The Structure of Finance Department ........................................................... 65
V. Financial Control.............................................................................................. 65
VI. Financial procedures and forms ..................................................................... 67
VIII. Payments & transfers................................................................................... 69
IX. Financial procedure with Islamic Relief partners ......................................... 72
XI. Reports ............................................................................................................ 73
XIII. Stock Control................................................................................................ 74
XIV. Employees..................................................................................................... 74
XV. Project Control .............................................................................................. 75
XVI. Filing System................................................................................................ 76
XVII. Year end Closing 31/12 (after Q4 report to Head Quarters)..................... 79
17.0 Islamic Relief Policy on Grants..................................................................... 81
I. Introduction ....................................................................................................... 81
II. Procedure.......................................................................................................... 81
III. Transparency & Fairness ............................................................................... 82
IV. Conclusion....................................................................................................... 83
Islamic Relief Grant Application Form - Organisations...................................... 87
Grant Application Assessment – Internal Use Only ............................................ 91
18.0 Appendices..................................................................................................... 92




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FOREWORD
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This document gives guidance to all Islamic Relief’s staff allied with financial issues
which affect the organisation on a day to day basis. Further, it provides appropriate
procedures and controls when having to pact with them. With the whole sphere of
charitable work coming under increasingly stringent scrutiny, it is essential that clear
guidelines are instituted and adhered to, to ensure the organisation is operating both
efficiently and lawfully to meet its objectives.

Virtually every transaction entered by Islamic Relief has a financial dimension; from
initial operations in new locations to the time they are terminated, where specific
financial issues require attention. Islamic Relief may deliver the best charitable work
in the world, but without the production and maintenance of accurate records,
especially financial, the organisation will have failed to provide the necessary
verification to confirm operations have been carried out.

It is absolutely imperative, whether it be opening a new bank account or keeping
some petty cash, rules will need to be adhered to govern all financial transactions.
Failure to comply with prescribed guidelines results in a high propensity to the
emergence of chaotic situations, whereby managers’ may loose control of their
financial responsibilities and consequently fail to produce accurate accounts and
records. This will not only adversely affect management decisions, but could pose a
threat to the continued existence of Islamic Relief per se.

Finally, all Islamic Relief’s staff are strongly encouraged to provide feedback
regarding any issues covered within this document; or to inform the relevant parties in
any doubtful events where financial queries arise and have not been addressed.

Haroun Atallah
General Manager
Islamic Relief Worldwide Headquarters

Please forward your suggestions to:

IRW Finance
Islamic Relief Worldwide Headquarters

Email your suggestions to Javed Akhtar, javed_akhtar@islamic-relief.org.uk




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1.0 General Framework

I. Introduction

Islamic Relief is an internationally recognised relief and development charity
organisation, working to alleviate the suffering of the world’s poorest people. For
this reason Islamic Relief must ensure the finest practice and highest standards are
adhered to, when managing and reporting the financial resources of Islamic Relief by
all Islamic Relief Offices and Islamic Relief Partners.

The Financial Guidelines are applicable to all Islamic Relief Offices and Partners,
regardless of any operations one may be engaged in, whether it be: fundraising, field
work, management or coordination. These financial guidelines however, were set to
provide guidance to the principles and to operate in accordance with all Islamic Relief
Offices and Partners local regulatory requirements, when managing and reporting
financial transactions.

The Financial Guidelines form the general framework, which was prepared to ensure
the quality and accuracy of recording as well as reporting financial information.

The Management of each Islamic Relief Offices and Partners must ensure the
financial reporting team members are knowledgeable about the financial guidelines.
Further, all Islamic Relief Offices and Partners should have documented procedures
(desk-top procedures) pertaining to the processes used which, must comply with the
Islamic Relief Financial Guidelines provided local laws and regulations permit.

II. Background to the Financial Guidelines

The reliable system of financial management provides a sound basis for planning
ahead as well as utilising resources in the best possible manner. The efficient financial
administration contributes significantly to the smooth running and successful outcome
of relief and development programmes. Therefore a good system should provide a
reliable source of information, to base timely modifications to the original plans with
minimum interference.

Conversely, inadequate financial management can seriously undermine potential
achievements. Auditors on the other hand, would need to be assured that satisfactory
systems of control over transactions are maintained with regulatory requirements in
mind. Further, major donors would also want to be assured that their donations are
accurately administered and allocated, with purposes consistent with their reasons for
giving. The Accounting/Finance function should maintain a good record keeping; as
this is critical for reasons such as verification as well as reporting back to
management and major donors.

It is important for managers to be familiar with what to expect when examining the
budgets and accounts; as well as simultaneously understand the underlying principles
of good accounting practices.
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III. Rules governing finance

The basic governing rules for Islamic Relief Worldwide are enclosed in Articles and
Memorandum of Association. These set out the objectives of the organisation as:

“The relief of poverty in any part of the world”. [Memorandum of Association (3)]

Islamic Relief is committed to strict compliance, with all legally prescribed
regulations governing charitable work and charitable organisations, wherever it
operates. It is the responsibility of management in each country to ensure that local
laws and regulations are complied with.

In general these rules when related to financial matters will be devised to ensure:
• the ability to disclose (with reasonable accuracy) the financial position of Islamic
Relief at any time.
• accurate accounts can be prepared from appropriately maintained records.
• records show all monies received and expended.
• the records provide a register of all assets and liabilities.

The highest professional accounting practice is recommended throughout the
organisation. In order to ensure compliance and suitably qualified auditors, one must
externally audit all operations.

However, the responsibility of implementing the guidelines rests with management in
each location. The management at headquarters on the other hand, will inspect and
examine the level of compliance with the guidelines at every practice, which carries
the name and logo of the organisation.

Compliance with the financial policies set out in this manual would help enable the
organisation to achieve standardisation of reports and operations. This will have a
direct and positive impact on the credibility of Islamic Relief and will therefore play a
pivotal role in protecting the organisation.










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IV. Islamic Relief Worldwide Family

Islamic Relief Worldwide Family includes members of the family that undertake
fundraising operations within their respective countries. These family members are
registered operations with their own national borders which, must comply with
various legal requirements pertaining to the country.

Islamic Relief family members engaged in Fundraising activities at the point of time
where publication of the Financial Guidelines went to print are stated below.
However, it should be noted that all references throughout the Financial Guidelines to
Islamic Relief family members apply to current and future Islamic Relief family
members.
Islamic Relief Family members engaged in Fundraising

Belgium South Africa
France Sweden
Germany Switzerland
Holland UK
Italy USA
Mauritius

Malaysia


It is also acknowledged that Fundraising Operations are undertaken in countries
where no Islamic Relief Partner exists; these activities are mainly conducted by the
Fundraising Division of IRW, Birmingham, UK.

Most of the organisation’s relief and development work is carried out in developing
countries, although some projects are implemented in developed countries. However,
it is important to note that fundraising is carried out wherever it is permissible to do
so.

Islamic Relief’s Offices’ (family members) across the world are responsible for
managing the emergency and development projects within each respective country.

Islamic Relief Offices (family members) are within in the following regions/countries
as when went into print:

Afghanistan Sri Lanka
Albania Mali
Bangladesh Niger
Bosnia Pakistan
Egypt Palestinian
Administered Areas
Ethiopia Russian Federation
(Chechnya/Ingushetia).
Kenya Sudan
Kosovo Yemen
Indonesia
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Islamic Relief takes on development projects where no offices exist in conjunction
with partner organisations. During the publication of the Financial Guidelines Islamic
Relief was operating in the following countries in conjunction with Partner
organisations:

China
India
Kenya
Jordan
Morocco


It should be noted that all references throughout the Financial Guidelines to Islamic
Relief Offices (family members), apply to current and future Islamic Relief Offices as
stated above and to the Islamic Relief Headquarters.

2.0 Financial Controls

Islamic Relief adheres to the responsibility of having to exercise strict financial
controls. This is to ensure all funds received are utilised, only for the purpose that
Islamic Relief has stated in its objectives. It is standard practice that all financial
reports sent to IRW are subject to a thorough examination. Every Islamic Relief
Office and every Islamic Relief Partner is responsible for preparing financial reports,
and ensuring adequate accounting controls are in place which safeguard the assets, at
the same time ensures the reliability of financial records.

I. External Audit

All Islamic Relief Offices and Partners are required to conduct an external audit,
whether it is predetermined by local law or not. In extreme extraneous circumstances,
where an external auditor cannot be appointed due to any reason, the IRW Internal
Audit Unit would conduct the audit.

II. Reporting

Islamic Relief Partners that are engaged in fundraising operations must comply with
the laws of their respective countries operations; and submit the required reports to
the designated agencies authorised by the state to receive their reports.

Partner organisations implementing projects on behalf of Islamic Relief must sign
agreements with Islamic Relief. They are then required to submit reports to Islamic
Relief as well as to enable Islamic Relief to monitor their operations.

All Islamic Relief Offices and Partners must therefore submit quarterly reports to
Islamic Relief Head Office, namely to the IRW Finance department.
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III. Elements of Financial Control

All Islamic Relief Offices and Partners should have the following financial controls in
place:

• Authorisation and Approval
Written documentation on the authority levels should be maintained. Whereby Islamic
Relief Offices and Partners must ensure all transactions undertaken conform to
Islamic Relief’s objectives. Authorisation and Approval procedures should be
followed in the opening of bank accounts - refer to Cash & Bank section.

• Documentation and Accurate Recording
All Islamic Relief Offices and Partners should have specific and detailed procedures
(desk-top procedures) to ensure all transactions are recorded in the appropriate
account as well as the accurate amount. These controls will assist with guarding
against the recording of fictitious transactions.

• Computer Security
Islamic Relief Offices and Islamic Relief Partners should have sufficient passwords
and security controls in place. This would secure paperless transactions and other
sensitive areas of information.

• Reporting
To mitigate organisational damage in the event that one or more of the accounting
controls breach security (i.e. fraud); all Islamic Relief Offices and Partners should
implement a system that allows for early and effective breach detection. This would
encompass periodically reviewing expenditure and constantly reviewing actual results
compared with the budget.

All Islamic Relief Offices and Partners should ensure timely monthly financial
reporting (within 15 days of month end), for this acts as a fraud deterrent.

• Segregation of Duties
All Islamic Relief Offices and Islamic Relief Partners should segregate duties of
personnel. Different personnel should be assigned to the responsibilities of
authorising transactions, recording transactions and maintaining custody of assets.

• Conflict of Interest and Ethics Statements
All Islamic Relief Offices and Islamic Relief Partners should ensure that procurement
of goods and services are on an arm’s-length basis.

• Cash Receipts
If Islamic Relief Offices or Islamic Relief Partners receive numerous cash receipts;
several individuals would need to be readily available to handle and count the cash
receipts to certify the total.

• Bank Statement Review and Reconciliation
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A critical component for Islamic Relief Offices and Partners internal control system
should be promptly reviewed, with the reconciliation of all bank statements in
correspondence (Defined: Monthly).
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3.0 Financial Reporting

All Islamic Relief Offices and Islamic Relief Partners are required to provide financial
information on a quarterly basis to Islamic Relief Head Office, for management and
statutory reporting requirements. The information required, to be provided on a
timely basis using a consistent format.

All Islamic Relief Offices and Islamic Relief Partners should maintain and prepare
financial information on a monthly basis which, should be submitted to the Head of
Office/Country Director.

I. Timing of Reports

All Islamic Relief Offices and Partners should ensure their Financial Reporting is
submitted to Head Office IRW Finance department in accordance with the following
timetable.

Reporting Period Date that the Financial Reporting
should have been received by IRW
Finance
3 Month Results - 1
st
January to 31
st

March
20
th
April
6 Month Results - 1
st
January to 30
th

June
20
th
July
9 Month Results - 1
st
January to 30
th

September
20
th
October
12 Months Results – 1
st
January to 31
st

December
20
th
January
II. Procedures

All Islamic Relief Offices and Partners should submit a complete financial reporting
package.

These schedules are self-explanatory or where explanations are required can be found
in report footnotes. The entire package is required to be completed for monthly
reporting.









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If the requested schedule is not applicable or there has been no reportable activity,
submit the schedule with an “N/A”.

Schedule Schedule Name
Schedule 1 Income & Expenditure Reports by Projects
Schedule 2 Income Raised by Project
Schedule 3 Fundraising Expenditure Report
Schedule 4 Core Office Costs Report
Schedule 5 Trial Balance
Schedule 6 Bank Reconciliations for each Bank Account
Schedule 7 Fixed Asset Register
Schedule 8 Consolidated Income & Expenditure Statement
Schedule 9 Balance Sheet
Schedule 10 Cash-flow

III. Formats

All Islamic Relief Offices and Islamic Relief Partners should report using approved
formats.

All reports should highlight budgeted and actual figures.

Any issues or discrepancies with reports must be accompanied by a written
explanation approved by the Country Director/Head of Office.
IV. Reporting Currency

All Islamic Relief Offices and Partners should submit reports to IRW Finance in their
budgeted currency. The preferred reporting currency is in Euros.
V. Responsibility

The responsibility for ensuring Islamic Relief Offices and Partners, issue timely and
accurate reports’ rests with the Accounts/Finance Manager and Country Director in
each of Islamic Relief Offices and Partners.

Where Islamic Relief Offices and Partner have various departments and divisions,
each divisional manager is responsible for the reporting of each respective division.
VI Year End Reporting

All Islamic Relief Offices and Partners should ensure copies of their externally audited
annual accounts and Management Letters from external auditors are sent to IRW
Finance department.

It is essential that all Islamic Relief Offices and Islamic Relief Partners adhere to the
year end timetable, due to the following factors:

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1. The External Audit - Changes in agreed audit time’s results in greater costs.
2. The Annual Report needs to be submitted to institutional donors WITHIN 4
MONTHS OF THE YEAR END – APRIL following the year end.
3. Delays can damage Islamic Relief’s reputation and creditability.


Year End Reporting Period Timetable for year end completion
Current year ledger closed and reports
finalised by 31
st
January following year
end.
External audit to take place in February –
March following year end
Financial Year end 31
st
December
Externally audited accounts to be sent to
IRW Finance by 30
th
April following year
end

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4.0 Budget Guidelines

I. Proactive Planning

Effective fiscal planning enables Islamic Relief Worldwide and all its Partners/offices
to function smoothly and confidently. Accurately predicting the available resources
available enables Islamic Relief to budget and plan realistically. Thus, Islamic Relief
needs to identify its core budget and all Islamic Relief Offices/Partners should prepare
budgets within the given time framework.

Islamic Relief constantly develops and reviews long-term financial plans in order to
increase the volume of its financial resources, hence to fulfil its objectives of
delivering aid and conducting development projects to help destitute people.

All Islamic Relief Offices, departments and Partners are required to produce budgets
to ensure effective planning. The budgets should be utilised throughout the period to
monitor actual performance against budgeted performance.
II. A budget

A budget is when an individual from each office/department is working with a plan,
plans of project for the forthcoming year, in money terms. This helps to ensure the
office/department has sufficient funds to meet their objectives; thus enabling Islamic
Relief to make financial decisions and to keep in control of all finances, rather than
having to rely on pure guesswork.
III. Preparing a Budget

1. In light of Islamic Relief Worldwide objectives the goals, each
Office/Department or Partner should assess how their specific goals fit in with
Islamic Relief’s strategic and long-term plan.

It should be noted that all Islamic Relief Offices and Partners budget coincides
with the key objectives of Islamic Relief Worldwide.

2. Review all projects and activities the department/office has undertaken during
the current year (past 9 months) just ending:

When reviewing one must include, yet not limited to the categories mentioned:

• Whether the projects is completed
• The objectives achieved by the department/office
• Compare previous years budget to actual figures (Income and
Expenditure)
• Look at staff levels for each department/office
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Budgets should be submitted to Islamic Relief Head Office two months in advance to
the year end (deadline), to enable Islamic Relief Offices/ Partners to base their review
of current activities on the previous 9 months to ensure the fulfilment of the deadline.

3. Based on the above review, the department/office should set new goals and
objectives for the coming year. These goals and objectives should fit in with
Islamic Relief’s strategy and long-term plan.

4. Standard templates should be utilised during the budget preparation phase.

5. Estimate the costs required to achieve the objectives through the size of
project, as well as the offices/departments.

You must include the following, yet not limited to the categories mentioned:

• Staff
• Materials & Supplies
• If you considering to purchase equipment etc. seek quotes from various
suppliers.
• Consider all resources required by projects/departments/offices.
• Take into account imminent changes, for example tax, insurance or any
other areas that may be subject to fluctuations.

Budget Example

Budget Details
Project: Development project 1
Period: 1st January 2006 – 31st December 2006
Currency: GBP
Description Unit Unit cost Total cost Notes

Project manager Person-month 1,500 18,000 China Projects

All Islamic Relief Offices and Islamic Relief Partners should have documented the
reasoning for the estimates of costs, and justification on the basis of
departments/offices goals and objectives.

6. Staff costs typically account for a large proportion of a departments/offices
total expenses, so you should consider the hidden costs associated with staff
costs:

• Costs of hiring new staff – advertising new positions
• Training and support
• Evaluating your need for additional office space
• Furniture and equipment needs
• Volunteer Costs

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7. Need to budget for income as well as expenses, only if your department/office
is an income generator.

• Estimate future income with some degree of accuracy based on past
experience and records.
• Consider the expected income from all sources.

You must include the following, yet not limited to the categories mentioned:

• Grants
• Donations
• Sale of Fixed Assets
• Institutional Funding
• Income In Kind


8. All Islamic Relief Offices and Islamic Relief Partners should include within
their budgets: the expected costs that would originally be incurred by other
Islamic Relief Offices; then to be charged out to the relevant Islamic Relief
Offices or Partners.

You must Include the following and yet entitled to add others if need be:

• Fundraising Costs incurred by other offices on behalf of Islamic Relief
Partners.
• Costs incurred centrally in relation to services through which all
Islamic Relief offices and Partners benefit.

9. Once the budget has been completed, you would need to undertake a review
which should include the following but not limited to:

• The projected figures should be compared with the previous year’s budgets
and actual figures. Any variations should be explained adequately.
• Review the expenditure pattern, with the justification to any changes.
• Check the logic of all calculations.
• Assess whether unforeseen circumstances have been budgeted for.
• The budget should include In-Kind.

The review should be documented and readily available for review on future IRW
Internal Audit visits.

10. It would be the Country Director/Head of Office to be held responsible for
submitting the budgets to Islamic Relief Office/ Partners then to Islamic Relief
Head Office Finance Department.

11. All budgets should be prepared in local currency then converted into either:
British Sterling (GBP), Euros or US Dollars before the submission to Islamic
Relief Headquarters.

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12. Ensure that the deadline issued is adhered to, for each department’s budget
needs to be considered by the Board of Trustees and Board of Management in
the context of Islamic Relief Worldwide.

13. The budget will actively be used to monitor against actual income generated
and actual expenditure against the projected, to ensure targets are met.

VI. Strategic Budgeting

Islamic Relief’s vision and mission is clearly stated in its Strategic Plan. Included in
the Plan are the each country’s/offices Aims, key strategic initiatives, objectives,
strategies, performance measures. Each Country/Office should prepare a strategic
budget.

The strategic budget should be linked to the Aims, Objectives and Key Performance
Indicators and Proposed Actions.

Example of Aims and Objectives:

Aim: To develop an organisational capacity to respond effectively to disasters

Objective: Increase capacity to respond to emergencies efficiently and timely where it
happens to reduce the suffering of the affected people.


1. Strategic budgeting should include a situational analysis of the factors that impact
the Islamic Relief Offices/Partners future direction. Analysis of the economy,
development/emergency needs, regulatory, etc., the most significant of these factors
should be utilised in forming assumptions in projecting the budget for the next three
to five years.

2. Islamic Relief Offices/Partners should undertake an analysis of the resources
required to meet the performance goals.

3. Islamic Relief Offices/Partners should maintain project log-frames that would assist
with formulating strategic plans and budgets.

4. The strategic budget information should summarize the income and expenditure
that are related to implementing the Islamic Relief/Partner action plans described in
the strategic plan over the next three to five years.

The budget should provide projected income and expenditure in relation to what the
Islamic Relief Office/department intends to accomplish in view of its goals and
objectives.

All of the financial information should represent estimates of what it will take for the
Islamic Relief Office/Partner to achieve its aims and objectives.

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V. Approval Process

All budgets before submission to Islamic Relief Head Office need to be approved by
the Budget Approval Committee of each Islamic Relief Office/ Partner.

The budget approval committee should comprise of a: Director, Finance Manager,
Fundraising or Projects Manger for each of Islamic Relief Offices or Partners.

The budgets for all Islamic Relief Offices and Partners are approved at two levels
namely: by the Board of Management then the Board of Trustees.

All reductions and amendments stated by either the Board of Management or the
Board of Trustees should be implemented immediately while revised budgets should
be sent to IRW Finance. This will enable IRW Finance to undertake and prepare the
necessary analysis and related work, before re-submission to the Board of
Management and Board of Trustees.

VI. Budget Holders

All Islamic Relief Offices and Partners should have specified their budget holders,
where they would be given the appropriate seniority to control expenditure.

The budget holders on the other hand, should regularly monitor reports with the
relevant Accounts Department or Finance Department of Islamic Relief Offices or
Partners.

Further, the Budget Holders would have to acquire adequate financial training to
ensure necessary skills are accumulated to manage the budgets. The Budget holder
should undertake and document actions to correct significant budget variances.

VII. Monitoring

• All Islamic Relief Offices and Partners should have in place regular reviews
and monitoring of actual against budgets.

• The reports should show the actual and/or committed expenditure as well as
income to date, thus comparing the variance against the budget

• Monitoring reports should be made available, within a defined period that
allows effective corrective action to take place where necessary (Defined:
within 4 weeks of the end of the quarter).

• A formal review should be undertaken by budget holders.

• IRW Finance should ensure regular submissions of the budgetary position
reports [that include all Islamic Relief Offices and Islamic Relief Partners] are
given to the Board of Management and Board of Trustees.
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• Thus, all Islamic Relief Offices and Partners should ensure all actual quarterly
reports are submitted on a timely basis at the end of the quarter (Defined:
within 20 days of the Quarter end).
VIII. Post Budget Adjustments

All Islamic Relief Offices/Partners during the budgeted period require amendments to
the final budget, as approved by the Board of Management and Board of Trustees.
However you would need to submit a written proposal with justification to why the
amendments were conducted which would then be submitted to the Executive
Committee.



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5.0 Cash and Bank Guidelines

The guidelines set out in this section should be used by all Islamic Relief Offices and
Partners in accounting to manage Islamic Relief’s cash in all of its forms.

Note: the term cheque includes any cheque equivalent such as postal orders, direct debit, credit card
payments etc.

I. Opening of Bank Accounts

The IRW Executive Committee is the only body that is authorised to instruct the
opening of bank accounts. However, the IRW Executive Committee may delegate
this authority to the IRW Board of Management.

All requests to open new bank accounts or for changes to the existing bank accounts
must therefore be submitted to the IRW Executive Committee, using the “Bank
Authorisation form.”

The authorisation for a new bank account becomes effective when the approved form
is returned to the Director or, the head of the Office that it is connected with.

All Bank accounts must be in the name of Islamic Relief, where all depository and
disbursements transactions should be undertaken through these accounts. Hence there
should be no personal bank accounts to be used in any circumstances.

Procedure:
1. The Bank Authorisation Form (BAF) will be issued on the basis of a written
request by the Director/Head of Office/Finance Manager.
2. All BAF’s have a unique issue number which is logged out in sequential order
by the IRW Internal Audit Unit (IAU). BAF’s are only available from the
IAU.
3. The BAF should be filled and returned to the IAU, who will then arrange for
authorisation by the IRW Executive Committee.
4. The BAF will then be sent back to the requesting office, which will then
proceed to open or close the bank account.
5. Please note for each bank account a different BAF should be filled.

Failure to follow the procedure outlined will be deemed a disciplinary offence.
II. Closing of Bank Accounts

All bank accounts that become dormant must be closed; the Director or the head of
Office concerned responsible for ensuring any bank accounts that become dormant
are closed within a reasonable time period (defined as within 2 months of the account
last being used).

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Bank reconciliations should be undertaken at the date of closure. IRW Internal Audit
should be notified in writing if a closure of a bank account is to be undertaken.

III. Banking Cash and Cheques

All cash/cheques received must be banked on a regular basis (defined as within 2 days
of receiving the money).

Cash/cheques should be recorded on a bank paying in
slip for banking purposes. Another independent member of staff would need to check
the accuracy of the details and sign it to signify that an internal check has been
undertaken. In the case of paying money directly into a bank account a copy of the
paying in slip stamped by the bank must also be retained. The individual who does the
banking should be independent from the individual who receives the income to
demonstrate that a clear segregation of duties exists.

Two individuals under all circumstances should undertake all banking of
cash/cheques (defined: the two individuals, EXCLUDES a driver, who may drive the
individuals to and from the bank).

IV. Withdrawal of Funds

All payments should be made by cheques; NO payments should be made to suppliers
in cash.

Withdrawals of funds should be limited to absolute cases of necessity (defined as
petty cash, and in exceptional circumstances after obtaining approval from the
Director). In cases such as withdrawal of funds, the cashier prepares the cheque and
attaches the relevant supporting documentation to an “Approval request for
withdrawal of funds”; this should be signed by two signatories that are different to the
signatories on the cheque.

A cheque for the withdrawal of cash should not be made out in the name of an
individual. Another individual should accompany the cashier to the Bank in order to
cash the cheque.

On returning from the bank the cash should be handed to another Finance Officer
within the department, who should cross-reference the amount to the cheque
withdrawn and the relevant paperwork.

A record should be maintained of all bank transactions undertaken. This should be
utilised to verify and is in preparation for the bank reconciliations.

Two individuals under all circumstances should undertake all withdrawal of funds
(defined: the two individuals, does NOT include a driver, who may drive the
individuals to and from the bank).

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V. Authorised Signatories

There must be a minimum of three signatories for any bank account. On the contrary
where due to exceptional circumstances, thus three signatories are not available,
advice and approval should be sought from IRW Executive Committee.

All designated signatories should be aware of and be familiar with the Islamic Relief:
Cheque Controls.

It is the fundamental duty of the designated signatories to protect the property of
Islamic Relief in all forms. This will also secures its application for the objects of
Islamic Relief. In order to discharge this duty, it is essential there are adequate
internal financial and administrative controls over the use of Islamic Relief property,
funds and resources.

Two signatures or authorisations are required to countersign cheques or send
transfers.

For changing signatories on existing bank accounts a BAF should not be used. The
‘Change of Bank Signatory Form’ should be used (refer to the appendices). This can
be directly downloaded and after completion should be passed to the IRW Internal
Audit Unit. The IRW Internal Audit Unit will arrange for Executive Committee
authorisation.

No blank cheques should be signed under any circumstances.

VI. Disbursement of Funds: Segregation of Duties

All Islamic Relief Offices and Partners should ensure that there is segregation of
duties at place in all departments and offices, where individuals hold responsibility for
the disbursement of funds.

The following duties should be performed by different individuals:

Authorised signatories – the persons authorised to sign cheques should be a
persons outside the accounts/finance department. (Defined: Country
Director/Head of Office, Fundraising/Projects Manager and other senior
Managers).

1. Ledger reviewer – reconciles the ledger, and prepares a report-thus reporting
the transactional activity which should be reviewed by a manager.
2. Cheque Request Reviewer – checks that the payment request is for Islamic
Relief business purposes, and is in accordance with Islamic Relief policy,
further reviews original backup documentation with an authorised signature.
3. Cheque preparer (manual or automated) – prepares the cheque and the ledger
entry.
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4. Cheque Issuer (manual or automated) – ensures cheque is signed and approves
the ledger entry.
5. Accounts Payable Officer – mails the cheque directly to the payee. Invoices
should be stamped “PAID”.
6. Reconciler – reconciles the bank statement to the general ledger cash account.

Smaller Offices

Smaller Islamic Relief Offices and Partners should ensure additional checks and
controls are in place where complete segregation of duties is not achieved. Smaller
Islamic Relief offices and Islamic Relief Partners should maintain and comply with
the following;

1. Monthly reconciliations of the ledger which, should be reviewed and signed
by the Finance Manager on visits to smaller offices.
2. A register should be maintained that details all cheques issued.
3. For cash disbursement, a register should be maintained which details all cash
disbursements made.
4. All disbursements should be referenced to the original documentation.

All the registers and reconciliations should be kept up-to-date at all times; readily
available for review by visits from Finance Manager and IRW Internal Audit.

VII. Depository of Funds: Segregation of Duties

All Islamic Relief Offices and Partners should where possible (see smaller offices
rules below) ensure that there is segregation of duties in place in all departments and
offices where individuals are responsible for the depository of funds.

1. Mail Distributor – opens mail, endorses, issues receipts and keeps records of
cheques received.
2. Receptionist – receives income (donations) and issues receipts.
3. Cashier – collects cash, determines account coding and deposits in bank
account or delivers to another cashier for banking.
4. Manager/Supervisor – ensures that all cheques and cash received are deposited
and account coded correctly.
5. Ledger reviewer – reconciles the ledger, and prepares a report-reporting the
transactional activity which should be reviewed by a manager.
6. Reconciler – reconciles the bank statement to the general ledger cash account.

Smaller Offices

Smaller Islamic Relief Offices and Partners should ensure additional checks and
controls are in place where complete segregation of duties is not possible. The
following rules should apply:

1. Monthly reconciliations of the ledger which, should be reviewed and signed
off by the Finance Manager.
2. Receipts should be issued for all cash received.
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3. A register should be maintained that details all cash and cash equivalents
received.
4. Monthly bank reconciliations should be completed.
5. All cash must be securely kept and should agree at all times with records and
reconciliations.

All the registers and reconciliations should be kept up-to-date at all times; readily
available for review by visits from the Finance Manager and IRW Internal Audit.
VIII. General Ledger Controls

Any Islamic Relief Offices or Partners that handle cash must maintain the segregation
of duties as outlined in the section Segregation of Duties. Smaller offices should
utilise a larger administrative or other units to provide the necessary segregation of
duties.

Regular monthly reconciliations of bank accounts must be performed to ensure all
remittances and payments have been deposited / withdrawn into/from Islamic Relief
bank accounts, as expected and recorded accordingly to the general ledger. Any
discrepancies must be disclosed to the Manager and resolved immediately.

The bank reconciliations must be reviewed on a monthly basis by the Manager and,
must be signed off on a monthly basis.

Reconciliations must be performed for every bank account regardless of the
denomination of currency in which the bank account is held.

IX. Disbursements of Funds: Approvals

Costs incurred can only be paid from the relevant bank account in the form of cheque.
The cheque must also be supported by original documentation, such as:

• Payment Request
• Purchase Request
• Goods Received Note
• Bid Evaluation
• Original Invoices
• Other original supporting documentation

All relevant sections of the payment request should be complete and in accordance
with the supporting documentation as stated below:

• Date of the Payment Request (it should be current)
• The names of the requestor
• All the approval levels
• The details of the purchase and the amount
• The Cheque Number

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The above aspects should be checked by the signatories for completeness while
approval levels should be checked for appropriate authority.

All Cheque payments should be in the name of the supplier where possible, all
cheques should be marked “A/C Payee Only.”
X. Petty Cash

A petty cash fund should be established only when it is demonstrated that a
continuing cash advance is kept on hand to permit the purchase of low-value supplies
and services.

The Finance Manager of each Office on the other hand, should set a specified amount
for the petty cash fund.

Petty cash should be kept securely separate from others cash and should be kept in the
safe.

Each Islamic Relief Offices should nominate a Cashier, who is directly responsible
for the safeguarding and disbursement of petty cash.
XI. Petty Cash Disbursements

Expenses can only be paid from the petty cash fund for the purpose of which the petty
cash fund is set-up, and must be supported by receipts. The receipt should contain the
following information:

• Date of purchase or payment
• Name of supplier or other payee
• Positive evidence that a payment was made, i.e. a cash register receipt or at
least a handwritten receipt marked “paid”.
• Amount paid
• Description of goods or services purchased
• Signature indicating receipt of purchases or services

The total receipts plus the cash on hand must equal the specified amount of the
petty cash fund at all times. Reconciliations should be performed on a daily
basis.

XII. Petty Cash Reimbursements

Reimbursements should be requested as needed; the cheque for the reimbursement
should be cashed by individuals who are not the cashiers for the fund or an employee
who reports to the cashiers.



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XIII. Internal Control Procedures

Cash reconciliations should be undertaken on a daily basis, where it would be
reviewed at least once a week, and signed off by the Supervisor on a weekly basis.

Reconciliations must be performed for every petty cash fund held, regardless of the
denomination of currency in which petty cash is held.

A surprise cash count of the petty cash fund, including a review of the documents,
should be performed on a regular basis by a supervisor or manager.

Any major discrepancies disclosed by the cash count should be reported to
Internal Audit.

XIV. Physical Security

The petty cash funds must be kept separately in a secure place. Any other funds at all
times must be placed in a safe which, should be kept in a suitable secured place. In the
event of a theft, the loss must be reported to the IRW Internal Audit and local
authorities.

All cheque books should be kept in a safe which is in an absolute secured area. In the
event of a theft, the loss must be reported to the IRW Internal Audit and local
authorities.

A copy of the key should be kept in an alternative secured area.
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6.0 Guidance to Islamic Relief Signatories

Senior and responsible personnel within Islamic Relief Offices/Partners should be
selected as signatories for approving and authorising Islamic Relief expenditure.

It is of fundamental duty for Islamic Relief signatories to protect the property in all of
its forms to Islamic Relief Offices/Partners, and further secure its application from the
objects of Islamic Relief. In order to discharge this duty it is essential there are
adequate internal financial and administrative controls over the use of Islamic Relief
Offices/Partners property, funds and resources.

All Signatories should take the following points into consideration:

• There is a need to understand and realise that the selected personnel’s
signature carries approval.

• The signatories will be held accountable if ever any issue was to rise.

• Never rely on Country Director/Head of Office’s signature as proof that
everything is primed. Mistakes/oversight is possible by all human-beings and
it should be borne in mind that signatures can be forged.

• The most senior signatory should be the ultimate to sign.

• Always be prepared to question and critically review the documentation.

• Do not assume that because cheque and other documentation have been
reviewed by the Accounts/Finance department the entire documentation is
correct.

• Be prepared to question Finance Officers if you are unsure or require a further
explanation regarding any payment requested.

• If in any doubt or any uncertainty regarding any payments do NOT sign
regardless of how urgent Finance may inform you the payment is, until further
information and clarification is given.

• Always request the clarification in inscription. However, if the issue is of a
material nature in your view, seek approval from the Finance Coordinator.

• A recommended practice is that each signatory nominates a certain time
period during the day to sign cheques and other paperwork. The
Accounts/Finance department are then informed of each signatory with the
time period. Thereby, rather than leaving the folder with cheques in respective
pigeon-holes, the signatories sign the cheque with the relevant Finance Officer
present, so he can be questioned on the payments being made.

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• Even if the payment request is not relevant to your area, you ask the Finance
Officer to explain the nature of the payment and to which project it relates to
and how.

• If any of the paperwork has been corrected by the use of tip-ex – reject it, do
not sign it. Request for originals to be re-prepared.

I. Information to be checked

1. Payment Request has the following documentation attached:
o Purchase Request
o Original Invoices
o Goods Delivery Note
o Other original documentation
2. The goods or services should have been received satisfactorily
3. Check the date of the Payment Request (it should be current)
4. Check who the request is made by
5. Check whether the person, approving the request is senior to the requester
and has the authority to approve the request.
6. Check the Country Director/Head of Offices approval.
7. Check the details of the purchase and the amount. Does it relate/match the
supporting documentation?
8. Check that payment has been reviewed by Finance and all sections within
“For Finance Department Use Only” are complete.
9. Check the Cheque Number against the cheque number stated within the
“For Finance Department Use Only” section.
10. All Cheque payments should be in the name of the supplier where possible
and all cheques should be marked “A/C Payee Only.”

• Signing the Cheque

When signing the cheque also sign the Payment Request next to the Cheque
Number, to verify the signed cheque.

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7.0 Procurement Guidelines

All Islamic Relief Offices and Islamic Relief Partners should ensure cost effective
materials, supplies, and services are procured by authorised individuals from
authorised suppliers. In addition, consideration must be placed on the adequacy of
quantities, competitive pricing, and timely delivery. These activities should be
conducted in a manner which serves Islamic Relief in the best interest at all times.
Islamic Relief Offices and Partners should also avoid the disruption of Islamic
Relief’s operations, as a result of reprehensible or untimely purchases and inefficient
use of cash as a result of excessive purchases.

These guidelines apply to the purchase: of goods and services, approval of purchases,
receipts and acceptance of materials, supplies, and services. This policy covers all
purchase commitments (with or without the use of purchase orders).

The general ledger accounts impacted by this policy include stock, Operating
Supplies and Other Current Assets, Accounts Payable and expense accounts, which
are directly charged.

I. Purchase Orders

All Islamic Relief Offices and Islamic Relief Partners should employ the use of a
Purchase Request and a Purchase Order system, to efficiently and accurately purchase
all the goods and services needed by the Islamic Relief, with certain notable
exceptions. The exceptions are those items that are evidenced by a contract and or
agreement, as to the terms and conditions of purchase such as: utilities, freight,
professional fees and services, insurance, and incidental purchases i.e. Conference
fees, subscriptions etc.

Such purchases shall be made with the appropriate signatory approval by management
as indicated at the authority levels.

Appropriate internal controls shall be utilised to assure and maintain accuracy of:
a. the purchase requests and purchase orders issued,
b. the quality and quantity of the goods received, and
c. reporting and recording the receipts of goods and services to:-
• accurately and properly make payments
• ensure that the transaction is recorded at the corresponding period

II. Purchasing Requirements

Persons requesting a purchase should be determined. The purchase order would be
submitted to the purchasing department based on Islamic Relief Office/Partner’s
needs:

• Relief/Aid Materials – based on circumstances prevailing at the time
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• Repetitive purchases of certain items, such as stock held
• Capital Expenditures – based on approved capital projects and requested
by the Manager in charge.
III. Approval Levels

All Islamic Relief Offices and Partners should set appropriate authority level. The
authority levels should be documented.

The table below demonstrates the authority levels set at IRW. Levels should be
similar for all Islamic Relief Offices and Partners; however, values should vary
according to the local economy in each country.

Sterling Amount Authorised Approval Level
Up to £1,000 Project/Department Manager
£1,001 to £20,000 Director/Head of Division or
Director
£20,001 to £100,000 Tendering Committee
£100,000 and above Tendering Committee (Public
Tender)

IV. Placement of Orders

• Only Purchasing/Accounting Department personnel should be authorised
to issue purchase orders.

• Purchases made under contractual arrangements (excluding corporate
agreements) that either supplement or used in lieu of a purchase
requisition, must be reviewed by the purchasing department for assessment
of commercial terms and conditions prior to approval. Contracts are to be
signed by the Purchasing Department, to verify that the commercial terms
and conditions in the contract have been reviewed and are acceptable.

• Copies of all contracts are required to be provided to the respective
Financial Controller for assessment as to the appropriate accounting
treatment and disclosure requirement, prior to approval.

• Purchases made under contractual arrangements must be authorised in
accordance with the approval levels.

• All original contracts are to be maintained by the Purchasing/Accounting
Department.

• The Islamic Relief Office/Partner should maintain appropriate purchasing
guidelines and approved supplier’s list.

• Purchase orders should be prepared with sequential numbers assigned.

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V. Receipt and Acceptance

• Goods and services received should be verified for accuracy (i.e. proper
quantity and type of product or service) through the comparison of
receiving documentation to approve purchase orders or contracts.

• Discrepancies between receiving documentation and purchase order or
contract should be identified, investigated, and resolved in a timely
manner.

• Goods and services received should be recorded appropriately to
accounting system accurately and in a timely manner.

• Fixed Asset records should be maintained where appropriate.

• Goods should be inspected for quality purposes in a timely manner.


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8.0 Tendering Guidelines

All Islamic Relief Offices and Partners should set appropriate authority level and
documented.

The table below demonstrates the authority levels set in the United Kingdom. The
authority levels should be similar for all Islamic Relief Offices and Partners. Further
values should vary according to the local economical conditions prevailing in each
country.

Sterling Amount Quotations/Tenders Required
Up to £1,000 None but recommended as good
business practice.
£1,001 to £20,000 3 Quotations
£20,001 and
£100,000
3 Tenders
£100,001 and above Open Tenders (Public Tender)

• All quotations must be received on official letterhead paper of the supplier.

• All Tenders must be sealed and delivered.

All Islamic Relief Offices and Islamic Relief Partners should adhere and follow the
tendering guidelines unless stated otherwise. For example, an institutional donor who
may have stricter tendering guidelines for institutionally funded projects.
I. Tendering Instructions

Islamic Relief Offices and Partners should instruct the supplier on how to complete
the tender and the information required (namely; copies of annual accounts, main
customers, alternative proposals, bank guarantees) in addition to the tender
information itself.
II. Conditions for the Tender

All Islamic Relief Offices and Partners should ensure the following:

• The independence of each tender
• The tender should be appropriately addressed to the Islamic Relief
Office/Partner
• The tender should be delivered sealed
• The tender period should be for a minimum period of 10 days.

Receipts of tenders should be recorded and the package must be kept in secure
location unopened until the set time.
III. Tendering Committee

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Tenders should be opened by a Tendering committee of three selected personnel (this
should include: the Head of Office/Country Director and technically a competent
personnel, that can advise on the proposed acquisition) from Islamic Relief
Offices/Partners. The selection of the personnel must be agreed prior to the tendering
process; NONE of the personnel on the tendering committee should have any
affiliation with any of the proposed suppliers.

Minutes should be taken of all the tendering committee meetings and retained in a
file.
IV. Tendering Procedures
The Tendering Committee is to agree upon a budget for advertising the ‘Invitation to
Tender’ in addition to the agreement upon the outlets which the ‘Invitation to Tender’
is to be advertised. This budget must be included in the original budget at the
beginning of the year for Islamic Relief Offices/Partners.
A date must be set, upon which the committee will meet to review the submitted
bids/tenders.
The ‘Invitation to Tender’ is to be advertised, as agreed by the Tendering Committee,
with clear mention of specifications and other relevant criteria. The advert must also
instruct tendering companies to submit their pre-qualification and pricing information
separately, in sealed envelopes, to a secure address within a specified date.
The ‘designated officer’ should bring the envelopes received from the tendering
process to the Tender Board tender-review meeting. It is only then when all envelopes
are to be unsealed by the designated officer, after the Tendering committee is to
commence the selection procedure. An approved tender must be accompanied by a
clear statement of reasons for the choice made, which should also be signed by the
‘chairperson’ of the board.
All Islamic Relief Offices and Partners should ensure that:

• the original documentation for tenders is received
• supporting documentation giving the reason for the choice of supplier
• Must be retained for at least a period of six years after the end of the financial
year in which the contract is completed.
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9.0 Accounts Payable

All Islamic Relief offices should set-up and manage an Accounts Payable function in
order to account and manage Islamic Relief’s expenditure.

All Islamic Relief Offices should also establish written procedures that ensure
accurate and timely payment are made to suppliers/vendors, after the determination of
the receipt of goods, services or under the terms of the transaction.
I. Payment Process: Segregation of Duties

All Islamic Relief Offices should ensure where possible (see smaller offices rules
below) that the following functions are performed by separate individuals:

1. The approval of the purchase request (purchase request).
2. Receiving the ordered supplies/materials.
3. Approval of the invoices for payment.
4. Review and reconcile the financial records.
II. Accounts Payable Process: Segregation of Duties

All Islamic Relief Offices should ensure a segregation of duties is in place within all
departments and office, where individuals are responsible for the Accounts payable
Process.

The following duties should be performed by different individuals within the
Accounts/Finance department:

1. Processor - Processes accounts payable invoices.
2. Updater - Updates the supplier/vendor master files.
3. Cheque Request Reviewer – checks that the payment request is for: Islamic
Relief business purpose which should be in accordance with Islamic Relief
policy, reviews original backup documentation and checks for an authorised
signature.
4. Cheque preparer (manual or automated) – prepares the cheque and the ledger
entry.
5. Cheque Issuer (manual or automated) – has cheque signed and approves the
ledger entry.
6. Accounts Payable Officer – mails the cheque directly to the payee.

Smaller Offices

Smaller Islamic Offices and Partners should ensure additional checks and controls are
in place as complete segregation of duties is not possible. The following rules should
apply:

1. Monthly reconciliations of the ledger which should be reviewed and signed off
by the Finance Manager.
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2. A register should be maintained that details all cheques issued (Appendix A1).
3. For cash payments a register should be maintained that details all cash
payments made (Appendix A2).
4. All payments should be referenced to the original documentation.

All registers and reconciliations should be kept up-to-date at all times; hence readily
available for review by visits from the Finance Manager and by IRW Internal Audit.
III. Accounts Payable Process: Internal Control Procedures

• Monthly reconciliations should be performed by the accounts payable sub-ledger
to the general ledger. These reconciliations should be reviewed by the Supervisor
or Manager and should be signed off on a monthly basis.

• All Islamic Relief Offices should maintain adequate detailed documentation of
additions, changes or deletion to the vendor master file/records.

• Cash disbursements for unrecorded liabilities and routine expenses, for example
rent; should be voucher-ed prior to payments.

• There should be an active supervisory review of all accounts payable activity.

• All signature templates, cheque books, blank cheques and related equipment
should be kept in an absolute secured area.

• All paid invoices should be adequately marked to prevent reprocessing. (Defined:
Stamped “PAID”).


IV. Documentation

Upon receipt of a supplier’s invoice; where the invoice should be date stamped and
forwarded to the appropriate accounts payable processor. A match between the
suppliers invoice, original Purchase Order and Packing Slip/Receiving Report should
be performed in order to form a voucher package. If a match is not possible, the
invoice should be placed on hold until matching issues are resolved with the person(s)
requesting the invoiced goods or services.
Purchase orders should not be processed if incomplete.
All invoices should be reviewed to ensure:
- Adequate authorisation of the purchase order.
- Quantities shown shipped or delivered on the invoice are the same as those
found on the packing slip and/or receiving report.
- Pricing is in alignment with the purchase order pricing.
Any discrepancy should be investigated prior to payment.
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V. Accounts Payable Processes

All expenses should be captured to the greatest degree of practicality within the
period they are incurred in.

• All Islamic Relief Offices should track all expenditures, amounts due to
suppliers/vendors (Creditors) to ensure:

o The expenditure is within the budget
o Reporting is conducted effectively

• It is essential that the following are maintained within all Accounts Payable
functions:

o A Contract Register for all recurring services that are billed monthly,
quarterly, annually or on any other basis
o Purchase Order Register that tracks:

Open purchase orders, for shipments not yet received
Purchase orders shipments received but pending bills
Closed purchase orders shipments received, billed and paid

o A Cheque Register that tracks all payments.

• The Contract and Purchase order should be utilised for the verification of invoices
and progress payments on contracts.
• All invoices and bills should be reviewed to ensure they are for Islamic Relief
business purposes as well as in accordance with Islamic Relief policy, and thus
supported by original backup documentation.
• A register should be maintained of all invoices and bills received. They should
be stamped with the date received.
• All invoices should be checked for the following:

o Validity of the Invoice

Is the Invoice original?
Is the Supplier/Vendor valid?
Has the invoice been altered in any way?
Has it already been paid?
Are the details of the goods/services on the invoice correct?
Is the amount correct?

• Invoices for payments on contracts should be compared to progress payment
schedules and the contract register.



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VI. Accounts Payable Processes: Payments

All invoices must have the required authorisation before they are processed for
payment. Note that the person requesting payment (raising the payment request)
cannot at the same time approve the payment request.

A list of personnel identifying individuals that can approve payment requests which,
have been approved by the Country Director/Head of Offices, should be documented
at each location.

Invoices can only be paid from the relevant bank account in the form of cheque via
Bank Automated Cash Service (BACS)/Direct Debit, and must be supported by
original documentation such as:

• Payment Request
• Purchase Request
• Original Invoices
• Other original supporting documentation

All relevant sections of the payment request should be complete and agree to the
supporting documentation:

• Date of the Payment Request (it should be current)
• The names of the requestor
• All the approval levels
• The details of the purchase and the amount
• The Cheque Number

The above aspects should be checked by the signatories for completeness. Similarly
approval levels should be checked for appropriate authority.

The most senior signatory should be the last to approve.

All Cheque payments should be in the name of the supplier where possible and all
cheques should be marked “A/C Payee Only.”
VII. Accounts Payable Processes: Accounting

• Purchase Orders/Invoices should be coded to the appropriate general ledger
accounts.
• Even if the general ledger account is indicated on the purchase order it should be
verified before posting the invoice.
• After: verification, posting to the general ledger and scheduling for payment; the
original invoice with the purchase order and all supporting documentation should
be filed appropriately.
• After payment, the purchase order and invoice should be stamped as paid.
• Monthly reconciliations should be performed by the accounts payable sub-ledger
to the general ledger. These reconciliations should be reviewed by the Supervisor
or Manager and should be signed off on a monthly basis.
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• Records should be maintained from creditors, while accruals should be calculated
and posted at the end of the period.

VIII. Accrued Expenses

Accrued expenses represent amounts due for services or benefits that Islamic Relief
have received but have not yet been paid. Accrual process should be accomplished in
a timely and accurate manner, and must be in compliance with all applicable financial
and accounting standards.
At the close of each month, accrual procedures should be implemented to ensure all
expenses related to that month are accurately included in Islamic Relief Offices/
Partner’s accounting records.
In determining what expense is accrued, the following should be considered:
• The expense must have been incurred during the month being closed; that
is, the product or service must have been received on or before the last day
of the month in order to qualify as an expense.
• Types of expense to be accrued include:

• Payroll and Payroll Taxes
• Rent
• Utilities
• Property and Business Taxes
Payables and accrued liabilities should be recorded at face value, plus or minus any
interest premium or discount and other appropriate adjustments. The payable amount
can be determined from the billing received, it should be verified against: purchase
orders/requisitions, contract terms or any other appropriate documents prior to
recording liability.
When actual values are not available, recorded value should be based on best
available estimates. Estimates should be based on current market price, past history
and comparables.
IX. Prepayments

Prepaid expenses represent amounts that have been paid, but the related service or
benefit due to Islamic Relief has not yet been received. Types of these expenses can
include:

• Advertising
• Deposits
• Insurance Premiums
• Lease Payments
• Rent



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Recording of Prepaid Expenses

The Accounting Manager is responsible for identifying and preparing records of
prepaid expense amounts. After properly identifying prepaid amounts, the
Accounting Manager is to determine the portion of the amount paid that is prepaid.
For example, if Islamic Relief paid its six month insurance premium in advance, the
amount recorded as prepaid after the first month would be five/sixths of the premium.

Prepaid expense amounts should be properly recorded in a sub-ledger. Information
should include: the description of the type of service or benefit, vendor, benefit
period, amount paid, amortisation amount and any other pertinent information. The
prepaid expense amounts should then be adequately coded and recorded in the general
ledger via a journal entry.

The Accounting Manager should also review schedules of existing prepaid expense
amounts for any changes that may alter the amortisation.

X. Accounts Payable: Expenditure Categorisation

Below is general expenditure categorisations for guidance, all Islamic Relief Offices
are expected to maintain records and report according to the reporting format
requested by the IRW Finance department. Reporting formats may vary over time due
to differing and changing requirements of regulatory bodies and donor requirements.
• General Expenditure Categorisation

Expenses Description
1 Salaries Staff remuneration and related costs e.g. taxes, health cover
2 Other Labour Related
Costs
Volunteer, temporary staff expenses, advertising vacancies
3 Telecommunications Telephone, fax, mobile, satellite phone
4 Postage Postage and Courier costs
5 Stationery Stationery, letterheads, business cards
6 Distribution costs Haulage, loading/unloading costs
7 Training Course fees, accommodation, periodicals & publications
8 Exhibitions &
Conferences
Fees, accommodation, visa, travel and insurance expenses
9 Meetings Fees, accommodation, visa, travel and insurance expenses
10 Guests Accommodation, visa, travel and insurance expenses
11 Field Trips Accommodation, visa, travel and insurance expenses
12 Fees Professional, legal, translator, auditors, consultancy fees
13 Publicity Photographs, TV adverts, video productions, publications
14 Financial Charges Bank charges, credit card charges, fees and penalties






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• Fundraising Expenditure Categorisation

For Fundraising Expenditure a distinction would need to be drawn in categorising the
expenditure between:

o Publicity or information costs involved in raising the profile of Islamic
Relief which is associated with fundraising.
And
o Publicity or information that is provided is an educational manner in
furtherance of Islamic Relief’s objective.
• Project Costs Expenditure Categorisation

Projects Expenditure should be categorised directly to the project it relates to. Where
necessary support costs (those that are necessary to deliver the activity), should be
appropriately allocated to the project expenditure.
XI. Travel Allowances and Advances

All Islamic Relief Offices and Partners should ensure that adequate procedures and
controls are in place, for the purpose of issuing travel allowances and advances.

Islamic Relief Offices and Partners whose employees are required to travel and stay
overnight away from their homes, should be entitled to a daily allowance that covers
additional expenses they incur due to the situation.

The daily allowance is to cover costs of food, personal correspondence and any other
personal expenses. The allowance does not cover costs of accommodation, breakfast,
work related communication or work related travel costs.

All Islamic Relief offices and Partners should set the appropriate level of daily
allowance subject to appropriate approval. The allowance in place in United Kingdom
is £20 (US $ 30).

Travel allowances and advances are given to employees on a required basis with
management approval; however, the employee must complete the Employee Advance
form. In order to be processed, the authorisation form must be signed by the
employee hence the Department Manager. Travel allowances and advances must be
issued and entered into the accounting system by Accounts Payable staff, in order to
offset expenses subsequently submitted against the issued advances.

All employees must reimburse other Islamic Relief Offices/Partners for costs incurred
on their behalf, before departing the particular Islamic Relief Office/Partner.

Employees that are granted an advance amount must be supported by expense receipts
on an employee’s expense reimbursement form, after they return from travelling.
Additional expenses will not be reimbursed until the cash advance has been repaid if
expenses totalled less than the advance.

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All ex pats seeking advances from other Islamic Relief Offices/Partners should get
written approval from IRW.

Employees must acknowledge that cash advance is the property of Islamic Relief.
Employees must further agree with the termination for any given reason; Islamic
Relief can deduct any outstanding balance from the employee’s final pay check.

XII. Reimbursements

All Islamic Relief Offices and Partners should ensure that employees complete
Expense Claim forms which, requests for reimbursement by Islamic Relief expenses
incurred by employees. Islamic Relief Offices and Partners should ensure that
original receipts for all expenses must be attached. Faxed copies of original receipts
are unacceptable. Expenses without original receipts should not be reimbursed.

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10.0 General Ledger Account Reconciliations

All Islamic Relief Offices and Partners should undertake general ledger account
reconciliations.

Accounts covered include those significant accounts contained with in the general
ledgers of Islamic Relief Offices and Partner, which require account reconciliations to
assure their accuracy.
I Account reconciliations defined

The Islamic Relief Office/ Partner account reconciliation should compare a general
ledger account balance with the detail level sub-ledger, which should support the
general ledger account balance. For example, the “sub-ledger” may be: a bank
statement, a spreadsheet, or some other appropriate underlying documentation. If
errors or reconciling items are found in the general ledger, the sub-ledger, or both,
sufficient investigations and adjustments should be made to clear them from
reconciliation as soon as possible.

The following procedures are intended to assist in applying this policy. The
procedures are not intended to address specific control activities applied by business
units or statements of operating procedures. The intent is to provide supporting
guidelines to assist operating units when developing necessary activities to ensure the
policy is understood and followed.
II. Responsibility

It is a fundamental responsibility for the Finance Controller/Account Manager of
Islamic Relief Office/ Partner to monitor the accounts in their respective general
ledgers, to ensure they accurately reflect Islamic Reliefs’ transactions. This
responsibility should be fulfilled by implementing and following a formal process
which, ensures all required accounts are reconciled regularly and on a timely basis.
Finance Controllers/Account Managers should ensure the reconciliations are reviewed
and approved of on a regular basis.

Ownership responsibility should be assigned to the person who has the best
knowledge and control of the account (unless internal control considerations dictate
otherwise), as well as the accounting skill to prepare the reconciliation.

III. Development and review processes

The reconciliation should be prepared in a standard format and on a monthly basis. It
is preferred where possible to use electronic worksheet format.

Appropriate steps should be taken to correct and clear reconciling items on a timely
manner, usually by the subsequent month-end.

Write-off of unidentified reconciling items must receive approval from the
Director/Head of Offices of Islamic Relief Offices / Partners. Approval for write-off
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must be obtained from IRW Internal Audit if the dollar equivalent of the amount
unidentified reconciling item is greater than $4,000.

The sub-ledger should contain enough information to assure the sub-ledger detail is
appropriate for use as a reconciling item. The exact format of the supporting
documentation may vary by account. Written explanations should be included in the
reconciliations for supervisory review, internal and external auditor review.

Completed reconciliations should be dated and signed by the preparer. Care should be
taken to ensure signatures are legible along with the signatory’s printed name and
position title. The reconciliation and any related journal entries should be approved in
writing, by the preparer’s supervisor or an individual with a higher level of authority
other than the preparer. The completed reconciliations should be maintained in a
readily accessible filing system for review by management and internal and external
auditors.
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11.0 Inter-company Transactions

Islamic Relief Offices and Partners may incur inter-company transactions between
Islamic Relief Offices and Partners. All Islamic Relief Offices and Partners should
ensure accounting for inter-company transactions involves constant attention and
reconciliation to prevent the loss of time and resources.

Islamic Relief Offices and Partners should ensure that inter-company transactions are
processed correctly at the time the transaction occurs.

Principles of Inter-company Accounting

Inter-company transactions are an integral part of day-to-day operations. Islamic
Relief Offices and Partners should give considerable attention to the initiation,
accounting and settlement of such transactions.

Communication and approval of transactions must be accomplished prior to booking
entries. Further inter-company customers and suppliers’ transactions require the same
focus as third-party customers and suppliers.

Keeping the inter-company accounts in balance is a shared responsibility of the two
parties in the transaction.

General Procedures

The Islamic Relief Offices/Partners invoicing, posts all inter-company entries by the
end of the each month, including inter-company accruals.

Upon acceptance and approval of charges, each Islamic Relief Office/Partner
dispatches the inter-company transactions to the appropriate general ledger account.

Islamic Relief Offices and Partners send a statement each month of all inter-company
charges booked at the current accounting month to each relevant Islamic Relief
Offices/Partners.

The receiver of Islamic Relief Offices/Partners ensures all inter-company charges sent
by an appropriate invoicing party are recorded in the current accounting month.

All Islamic Relief Offices and Partners must reconcile all inter-company accounts for
financial reporting purposes, in addition to the booking of appropriate inter-company
accruals on a quarterly basis.
Inter-company Dispute Resolution

All Islamic Relief Offices and Partners should ensure upfront communication and
approval of inter-company charges, in order to minimise the number of disputes, after
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work has been completed and invoicing has occurred. Disputes regarding inter-
company charges should be communicated and resolved within 30 days of dispute
notification. Rejection of an inter-company charge should be communicated within
10 workdays after the inscription receipt of charge.
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12.0 Income Management
I. Receipts of Income Controls

All Islamic Relief Offices and Islamic Relief Partners should employ the following
receipt of income controls:

Safes are to be utilised on the receipt of donations and other Income.

If for instance cheques/cash receipts are received at Islamic Relief offices or Partners
address/location; receipts as such should be forwarded to the Cashier and stored in a
locked container, until sent to the bank for deposit.

A copy of each cheque and accompanying documentation should be retained for
security purposes, to ensure cheques are deposited into Islamic Relief’s account
appropriately.

Transfers such as: wire transfers, electronic fund transfers and merchant funds from
MasterCard, Visa and American Express should be processed into Islamic Relief’s
bank account as received.

CASH POSTING

All receipts are to be entered into the accounting system on a one-business day lag
from the time they are deposited into Islamic Relief’s bank account.

II. Donations

Islamic Relief Partners and Offices will receive donations in varying forms; therefore
all Islamic Relief Offices and Partners need to maintain internal controls to safeguard
the donations received.
Donations by Post or in person at the Offices

Two assigned personnel should open all post

1. Check the amount, then log them into the cash receipt log indicating: the date,
name of donor, cheque number (if cheque received), the fund the donation
applies to along with the amount.
2. Serially numbered receipts should be issued to all donors immediately.
3. All donations received should be handed to the designated cashier.
4. Copies are to be made of all cheques received.
5. The cashier should fill out a deposit slip; and ensure all amounts are correctly
stated on the deposit slip.
6. A copy of the deposit slip should be kept, and the deposit slip with the cheques
should be sent to the bank to be deposited.
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7. Finance personnel other than the cashier should bank the receipts daily, and
return the deposit slip to the finance/accounts officer.
8. The finance/accounts officer should then complete the voucher, indicating
donor, cheque number (if applicable), amount, deposit date, bank name and
accounting code.
9. The finance office should input and post the cash receipt to the correct income
accounts, and mark the receipt-cash slip form to indicate it has been inputted.
10. All documentation should be retained namely: the original bank deposit
verification, the copy of the deposit slip, the copy of the cheque and any other
information received.

Donations by Credit Cards

The personnel assigned with the duty of taking credit card donations should ensure
that the credit/debit card details are accurately captured.

The system being used for credit card donations should capture the following
information:
• Name, address and telephone number of the donor.
• Date and time of donation.
• Amount to be donated.
• Purpose of donation.
• Credit card details (Visa/MasterCard etc).
• Card number.
• Issuing and expiry dates of the card.
• Issue number for debit cards.
• Name of the person that took the donation.
Serially numbered receipts should be issued to all donors immediately.

Credit Card/Standing Order/Direct Debit Donations Controls

Regular reconciliations must be undertaken, to reconcile the credit card/standing
order/direct debit donations received against the database of the credit card/standing
order/direct debit donations, or records of credit card/standing order/direct debit
donations. The reconciliations must be reviewed by the Manager and must be signed
off.
Donations via Collections

All Islamic Relief Offices and Partners should adhere to the various legal
requirements pertaining to that country, with regards to collections.

Mosque/community centre collections
1. The cash collected must be counted with the presence of the
mosque/community centre’s officer(s).
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2. A receipt must be issued promptly when the cash is taken away.
3. Prior approval from the mosque/community centre must be sought and
precautions must be taken to safeguard all money collected. If using boxes,
make sure they are securely locked or sealed, with a serial numbers on the
seals.
4. All monies must be recorded accurately, together with their location and the
date received.
5. All donations received should be handed to the designated cashier.
6. Copies of all cheques received should be made.
7. The cashier should fill out a deposit slip while ensuring all amounts were
correctly stated on the deposit slip.
8. A copy of the deposit slip should be kept, while the original deposit slip with
the cheques should be sent to the bank so that it is deposited.
9. Finance personnel other than the cashier should deposit the receipts to the
bank on a daily basis, and return the deposit slip to the finance/accounts
officer.
10. The finance/accounts officer should then complete the voucher indicating:
donor, cheque number (if applicable), amount, deposit date, bank name and
accounting code.
11. The finance office should input and post the cash receipt to the appropriate
income accounts with the initial receipt-cash slip form, to verify it has been
inputted.
12. All documentations should be retained namely: the original bank deposit
verification, the copy of the deposit slip, the copy of the cheque and any other
information received.
III. Reconciliations

Daily total of receipt from cash and cheques should be reconciled with the donor
database or receipt book. Reconciliations should also be undertaken against
cash/cheques banked. However, the reconciliations must be reviewed by the Manager
and must be signed off.

If necessary, cash can be temporarily deposited in the safe, while the amounts are
recorded in the cashbook and countersigned by the manager. Moreover appropriate
arrangements should be put in place to keep the cash safe.

IV. Tax Rebates
Islamic Relief Offices and Partners operating in countries where a tax rebate is
received on donations MUST keep accurate with full records of donations received.
This will qualify for tax relief while at the same time; it is adequate for the purposes
of a government audit as well as to various legal requirements pertaining to that
country regarding tax rebates.
All documentation required by the relevant authorities must be maintained in an
appropriate manner.

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All Islamic Relief Offices and Partners should make appropriate provisions in their
annual accounts for any expected tax rebate. The tax rebates must then be coded to
the appropriate income accounts.

V. Other Sources of Income

Islamic Relief Offices and Islamic Relief Partners may receive Income from other
sources. These would include, but not limited to the categories mentioned:

• Institutional Funding
• Income from Projects
• Sale of fixed assets/donated items
• Goods purchased for resale
• Reimbursements by personnel

All Islamic Relief Offices/Partners should ensure that the Receipt of Income Controls
is adhered to.

Receipts must be issued for Income received regardless of the source. The above
procedures must be applied.

The income must be coded to the appropriate income code in the accounting system.

For the sale of Fixed assets refer to the ‘Fixed Assets’ section.

Sale of Donated Goods
Some Islamic Relief Offices/Partners may receive donated items from the public.
These items may be surplus to the organisation's needs where the manager may decide
to sell them. The generation of this type of income must be reported separately. You
must ensure that the costs associated with the sale of donated items do not exceed the
financial returns from such sales; only items above $100 should be recorded
individually. Items less than $100 may be pooled.
Further, appropriate authorisation must be obtained before making the sale, apart from
circumstances where Islamic Relief Offices/Partners operate, such as Islamic Relief
Charity Shops. However, it should be noted that there may be tax implications with
some jurisdictions which should be handled with care.
Upon Receiving donated goods:
• The donated item should be recorded in a logbook along with the date
received, description and note of the quantity. Further a scripted note should
be prepared with very specific reasoning to the donation (if applicable).
• The person who received the item should sign the record; the manager on the
hand must countersign to confirm the receipts of goods.
• A valuation of goods received must be entered in the Goods Received
Log Book and approved by the manager.
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When selling donated goods: The process from having to initiate a sale to the date of
conducting the sale should be recorded in the logbook along with the receipt issue.
Goods Purchased for Resale

Islamic Relief as a registered charity cannot engage in business at a commercial level,
although it is permissible to engage in additional trading. All Islamic Relief Offices
and Partners should refer to the laws various legal requirements pertaining to that
country. For example, the sale of promotional items such as badges, shirts and
stationery. Income and expenditure from such activities cannot be set off against each
other. The income from sales and the cost of items must be recorded separately, but
under the same heading.

Appropriate accounting records must be kept while the procedures for depositing
income received must be followed. Further a record of stock must be kept.

VI. Income In-Kind
If the funding is in material form (goods in kind, physical assets etc.), the following
procedures should be observed:

• Goods received should be recorded in a logbook, as well as: the date the goods
received, a description of the goods, the quantity of the goods and the specific
purpose for which they have been donated.
• A signature should be obtained from the delivery person, in addition to which
the person receiving the goods should also sign the record. The manager
should countersign to confirm that the goods have been received.
• When any goods issued from the warehouse/store etc., an entry noting the
details should be recorded in the same logbook. The entry should include: the
date of issue, description of goods along with the quantity involved, the name
of the person/persons receiving the goods, the destination of goods and
signatures of the beneficiaries (where possible).
Valuation of In Kind

Islamic Relief Offices and Partners should value the In-Kind donations at the fair
value with the date of donation.

Fair Value Defined:

In Kind donations are to be valued based upon the following:

• Estimated values in cash transactions of the same or similar goods
• Quoted market price
• Independent appraisals
• And other available evidence/information.

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Islamic Relief Offices and Partners should approximate the wholesale price for In
Kind donations, not retail prices. In addition the usability of the In Kind donations
should be taken into consideration in determining the fair value.

If In Kind donations are restricted by conditions that limit their utilisation, they must
then be valued for less. This will result to the In Kind donations not having to be
restricted. The reduction in value must therefore reflect the significance of restriction.

If there is no reasonable or sufficient basis to determine the value of In-Kind
donations, no value should be recorded as Income.

Documentation

All Islamic Relief Offices and Partners should record the In Kind donation as Income.
They should also have the appropriate documentations relating to the value of: In
Kind donation, stock records-for the In Kind donation, verification of receipt and
record of end-use or transfer.

• In Kind Donation
Documentation of the In Kind donation must be made either by the donor or
through other externally verifiable sources; they must include the method/basis
used for valuing the In-Kind donations.

• Donation Stock Records
All Islamic Relief Offices and Partners should keep stock records of In Kind
donations where a list from the donor of the donated items including: stock
description(s), quantity and total value. If this is not available, it would be
acceptable to have a stock listing prepared by Islamic Relief Offices/Partners in
addition to the above information.

• Verification of Receipt
Recipient of Islamic Relief Offices/Partners must record on the In Kind donations
receipt: the date of the receipt, goods description and quantity.

• Documentation of End-use or Transfer
Islamic Relief Offices and Partners should document and record the final
disbursement, end-use or transfer of In Kind donations.

For instances, Islamic Relief Offices/Partners ship/transfer the In Kind donations
to field offices, they should include documentations of shipping records or other
accounts of disbursement or end use.

In such instances, Islamic Relief Offices/Partners should reimburse the relevant
Field office of any costs incurred on receipt for the In Kind donations, such as
demurrage costs.




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• Disclosure
Islamic Relief Offices and Partners should disclosure In Kind donations as Income
and Expenditure. First showing In Kind donations in financial reports as Income,
the same amount should be included as Expenditure.
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13.0 Fixed Assets Management
I. Acquisition and Capitalisation

Fixed asset additions must be purchased within the budgets set for/by Islamic Relief
Offices and Partners where appropriate approval levels must be followed.

The invoiced net of any supplier discounts, plus sales tax freight and all other
significant costs necessary to prepare an asset for use should be capitalised. Other
capitalisable costs may include: initial inspection and testing, installation costs and
similar expenses only if material in amount. The cost of maintenance contracts on
equipment and software should be expensed when paid.

All assets purchased should maintain a fixed asset register which captures the
following, but not limited to:

• the asset’s tag number
• serial number
• description
• location
• custodian
• institutional donor (if applicable)
• cost
• depreciation rate and policy


It is recommended that Islamic Relief Offices and Partners depreciate all capitalised
assets using the straight-line method over their estimated useful life as follows:

Asset category Estimated useful life
Land & Buildings 2%
Machinery & Equipment 12.5%
Computers and related equipment 25%
Furniture and Fixtures 12.5%
Motor Vehicles 20%

Islamic Relief Offices and Partners may vary the depreciation policy in accordance
with local circumstances.
II. Depreciation
The entire cost of an asset must be depreciated. Depreciation is allocated monthly
over the estimated useful life of the capital asset.
Depreciation is to commence during the first month, after the asset is placed into
service. Fixed assets will be depreciated on a straight-line basis over their estimated
useful life.
Note: useful lives may be affected by changes in the business and technological
environment or the use of equipment.
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Depreciation expense for a fixed asset begins in the month following the acquisition
date of the asset and continues until accumulated depreciation equals the original
installed cost, or until the asset is retired from service.

A fully depreciated fixed asset will remain in the fixed asset sub-ledger and on the
asset list until the fixed asset is retired from service.

All assets should be disposed at market value regardless of the book value.
III. Transfers
The transfer of fixed assets between departments, divisions, or business units should
have no impact on its net book value. Although before the transfer of an asset
approval must be sought from management of Islamic Relief Offices/Partners. All
assets are transferred at their net book value with no recognition of a gain or loss, by
the department transferring the asset.

A change in a capital asset’s location or ownership occurs when:
• a fixed asset is MOVED to another office or building, even if the ownership
remains the same.
• a fixed asset is TRANSFERRED to another department, even if the location
remains the same.
• a fixed asset is TRANSFERRED to another primary user, even if the location
and/or department remain the same.

Interdepartmental transfers of assets will be reported to department managing the
assets of Islamic Relief Offices/ Partners in writing, and using the applicable forms
that should capture the description, serial number and the name of the department to
receive the property. The department manager to whom the item was assigned
originally will be held accountable, until the department managing the assets is
notified of the transfer. After being notified, the department manager acquiring the
property assumes responsibility.

All costs associated with the transfer should be expensed.
IV. Retirements and Disposals
Islamic Relief owned fixed assets, are to be retained as long as they continue to
contribute in an efficient and economical manner to Islamic Relief’s operations. This
may extend beyond the useful life used for depreciation purposes. Only when the
assets are disposed should the original asset and accumulated depreciation be written
off the fixed asset record.

Fixed assets must have a zero net book value at the time of retirement or disposal. If
there is any remaining value, the asset shall first be written off to the appropriate
account.

All disposals of fixed assets must be approved by the Director of the Islamic Relief
Offices/Partners prior to disposal. The assets’: tag number, serial number, description,
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cost, accumulated depreciation and reason for retirement/disposal will be
communicated to department managing the assets on an Asset Disposal Form.

All sales of Islamic Relief assets to Islamic Relief employees along with donations of
Islamic Relief fixed assets must be approved by the Director of Islamic Relief
Offices/Partners. An Asset Disposal Form must be completed prior to the sale or
disposition. The department managing the assets should be provided with complete
documentation (including asset tag/serial number and payment by check) of sales on a
timely basis by the department coordinating the sale.

Upon approval of disposition, the asset may be disposed in the following manner –
sold, donated, scrapped, or used in a trade-in transaction if authorised. Upon
disposition of the asset, the department managing the assets and Finance Department
will be notified, and the asset should be deleted from the asset records and a gain/loss
will be recorded.

V. Financial and Physical Control
On an annual basis, all Islamic Relief Offices/Partners should produce a report
showing a listing of the assets assigned to that department and any acquisitions,
disposals and transfers during the past year. Any discrepancies noted by the Islamic
Relief Offices/Partners should be notified to the Director of Islamic Relief
Offices/Partners as soon as possible.

Fixed assets should be inventoried (counted) on a periodic basis. Islamic Relief
Offices/Partners should perform a full physical inventory of Islamic Relief fixed
assets on a yearly rotational basis.

Fixed assets that are not accounted for after the physical inventory shall be
investigated, and then reported to the appropriate Director/Head of Office who should
report the loss to IRW Internal Audit.

Shrinkage should be written off to the appropriate account after management and
IRW Internal Audit approval.



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VI. Approvals/Documentation
• Accounting Records
Upon asset acquisition, Islamic Relief Offices/Partners are responsible for assigning
and attaching asset number tags to the property where it can be readily located.
Islamic Relief Offices/Partners should maintain a detailed listing of each Fixed asset
item along with the following:
• Depreciation records which will include the description
• Date acquired
• Asset must be held in the name of Islamic Relief
• Supplier name
• Cost basis
• Assigned department
• Depreciation method/life
• Accumulated depreciation
• Net book value

• Approvals
Fixed asset additions must be purchased within the established financial approval
policies of Islamic Relief. They must further be in accordance within the budgets set
for/by Islamic Relief Offices and Partners with appropriate approval levels that must
be followed.

• Institutional Donor Assets

Islamic Relief Offices and Partners working in conjunction with institutional donors
should maintain a detailed listing of each fixed asset item purchased, and utilised
concurrently with the institutional donor projects.

Before the disposal or transfer of institutional donor held assets, written approval
must be sought from the institutional donor.
VII. Expensed Assets

All Islamic Relief Offices and Partners should set a limit, in regards to assets of a
small value and expensed at the time of purchase. The recommended value in the
United Kingdom are assets with a value under £500 (British Pounds), but all Islamic
Relief Offices and Partners should set small value limits for fixed assets according to
the local economical standards.

It is important to maintain all expensed assets’ records including but not restricted to:
the assets tag number, serial number, description and cost.
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14.0 Stock Guidelines

Islamic Relief uses various types of stock in the course of its relief operations. Maintaining
adequate controls over stock is important to ensure adequate balance sheet valuation and
appropriate reporting to institutional donors. Additionally, physical stock provides Islamic
Relief with an opportunity to maintain the accuracy of its continuous stock records.
I. Stock Valuation

All Islamic Relief Offices and Partners should ensure stock records are maintained and
regularly updated.

Valuation needs to be assigned to all stock including In-Kind, where stocks should be
valued at the cost of bringing the stock to its present location and condition. Costs would
include, but not restricted to: purchase price (if applicable), import duties, transport and
handling costs.

II. Annual physical Stock Count

At least one physical inventory should be taken in close proximity to year-end and
coordinated with the independent external auditors’ mutual agreement. Islamic Relief
Offices/Partners should notify the Accounting/Finance department in cases where results of
a physical stock require significant currency value adjustments to the accounting records.

The physical stock account should be supervised and controlled by members of Islamic
Relief Offices/ Partners management teams.

Instructions to participants, who are involved in the physical inventory process, should be
in inscription and include:
a. Location, date, and start time.
b. Team designation and rolls of key team members.
c. Assignment of teams to specific areas.
d. Detailed instructions including examples on how to complete the recording of
the physical counts.
e. Guidance on how to designate suspect stock for later review as to obsolescence,
damage, or scrap.
f. Identification of stock designated as institutional property awaiting
disbursement instructions (in cases in which the inventory is physically
segregated).

Stock should be maintained in a manner that facilitates physical counting and should be
conducted by personnel who are familiar with the Stock being counted.

In cases which a second team recounts stock, the recount should be promptly reconciled to
the initial count, along with all differences reconciled.

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All sheets or tags used during the physical count should be accumulated and accounted for
before the completion of stock with in specific area. A process, such as sequential
numbering, should be utilised to assure all physical stock documents are accounted for.

III. Stock not on Islamic Relief premises

In cases where Islamic Relief owned stock which is in transit or otherwise not in the
Islamic Relief’s physical possession; should be verified through the use of existing records
that can be reviewed and used to authenticate its existence either through physical
measurement at a later date, or through some other independent source.

IV. Proper identification of inventory ownership

If practical, all stock that is being held for beneficiaries should be clearly identified in stock
records.

V. Reconciliation of physical and perpetual records

The physical stock quantities should be reconciled promptly with continuous records.
A recap of differences should be developed showing the: stock item, the amount on the
perpetual records, the amount counted, the unit difference and the value of the difference in
the prevailing currency.

The perpetual stock records should be adjusted for significant variances as compared to the
physical quantities counted.

All differences are investigated.

Items that were identified as questionable value should be reviewed and adjusted to reflect
their realisable value.

The Finance/Accounting department should be advised on differences that result in
adjustments to the stock values in Islamic Relief Offices/Partners accounting records.












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15.0 Exceptions to Financial Guidelines in responding to a Emergency-
Humanitarian Disaster

On the occurrence of an emergency-humanitarian disaster, time is critical and of the
essence for Islamic Relief to respond instantaneously and swiftly to the disaster, to ensure
immediate aid reaches the beneficiaries.

Finance is the key to deliver emergency aid, there is a need to ensure cash reaches the
office in the field while donations-in-kind reach beneficiaries, without any form of wastage
or loss incurring. This is vital to ensure the reputation of Islamic Relief is maintained. This
will enable Islamic Relief to report accurately to donors after the event.

Emergencies are defined by specific limitations due to certain conditions, not by projects
name. For example, during an earthquake emergency, the need to get emergency food and
medical supplies to the effected population may be regarded as an emergency need.
However, once the situation was stabilised, there may be other needs such as preparing
food and non food item supplies, for a new camp which may be populated in the
forthcoming period i.e. two weeks time. This should NOT be regarded as an emergency
from financial procedures perspective. Therefore, normal financial procedures such as
obtaining three written quotations should apply assuming that the goods are available in
local markets.

As a general rule, all the financial procedures outlined in these guidelines must be followed
in emergencies. When it is not possible to follow a procedure due to extreme impracticality
of the situation, an alternative means of achieving verification, approval and authorisation
must be obtained from IRW. Exceptions are only granted (with adequate authorisation)
when the circumstances make it impossible to adhere to the procedures stated here. Among
the possible circumstances where changes in procedures may be required are:
I. Emergency Supplies are needed urgently.

In this case, the procurement procedure can be adjusted as follows:
• Complete the Purchase Request Form (Appendix B4) and seek approval
for the purchase, from the relevant line manager.
• Call potential approved vendors by phone to obtain verbal quotation,
write the quotations directly on the Bid Evaluation Form (Appendix B6).
• Where contractors need to be employed to undertake specific work, the
criteria should be set and presented to all contractors.
• If the Purchase Committee is unavailable, discuss with the CD, Finance
Manager and Programme Manager to select the vendor. The Bid
Evaluation Form should be signed and approved by them. When the
purchasing decision needs to be made from a remote location, verbal
verification through the phone on the purchase decision should be
attempted with the CD, Finance Manager and Programme Manager.
However, any verbal verification in this case must be supplemented with
a written confirmation when it is possible to do so.
• A confirmation of delivery must be obtained.
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• The minimum documentation required for emergencies are Purchase
Request/Order, Bid Evaluation and Delivery Confirmation
(Appendix B4, B6, B7 and B8).

II. Emergency Aid Distribution

Aid distribution must be managed and must never be done in a chaotic fashion. At the
minimum, the beneficiaries must form lines to collect aid supplies. Upon collection, the
beneficiary must print his/her name and sign the Aid Distribution Form (Appendix B30).
Pictures (with date & time) of the distribution should also be taken as a record/evidence of
the distribution.

III. Stock Issue for Emergencies

A Stock Request Form (Appendix B25) must be filled for any stock taken out from the
store. At the very least, the Stock Request Form can be filled by the storekeeper during the
loading of emergency supplies to the vehicle, and further approval obtained from the
Programme Coordinator once it is possible to do so.

IV. Minimum Documentation

In circumstances where Islamic Relief personnel assess the minimum documentation is not
possible as stated namely: Purchase Request/Order, Bid Evaluation and Delivery
Confirmation, in these circumstances a log must then be kept of all payments that records
the following:

Information required Guidance to Islamic Relief Personnel
Name of person who made
the payment
In particular for cash advances.
Name and signature of
person who received the
payment
You might have to write the receipt yourself and the
signature may be a cross or thumb print. Carry pre-
printed receipt books with you.
If the person refuses to give or sign a receipt, note
down the details on a piece of paper and sign it
yourself with a note explaining why you could not
get the payee's signature. You may be questioned
later, but at least you will have the information to
provide the answers.
Name, address and official
stamp of organisation if
person received money on
behalf of an organisation.
Ask yourself also whether the person is authorised to
accept payment on behalf of the other organisation –
normally that organisation should be able to issue an
official receipt of their own…..
Amount of payment In both numbers and words for large amounts
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Currency of payment Make sure the currency of payment is clearly
indicated especially if you are using several
currencies.
What the payment was for Give a detailed explanation
Date on which payment was
made
Write the day with two digits, for example 02 rather
than 2. Write the year with four digits – it will be a
reminder of which calendar is being used.
Whether paid by cheque or
cash
If paid by cheque you must add the cheque number.
Name and signature of
person preparing payment
Name and signature of
person checking payment
Name and signature of
person approving payment
Should be different person preparing, checking and
approving payment, and each person should be
formally authorised to do so.
Especially important for larger payments, but you
need to strike a balance between workability and
control.
Full signatures are far better than initials as they are
more difficult to forge.
Reference to supporting
documentation
Contracts, invoices and delivery notes – attach
originals to avoid double-invoicing and/or payment.

V. Transportation of Cash to the Field

Islamic Relief personnel taking the cash from Islamic Relief to the field should obtain a
receipt form the accounts/finance department of Islamic Relief Offices with cash. This
should be signed by the field office to acknowledge receipt of cash, while Islamic Relief
employee’s return the signed forms to the account/finance department.
VI. Handling Cash
All members of the emergency team should be at the process of recording money received
and spent thus keeping all receipts.

Limit the number of people handling cash – possibly one person for small cash payments
(Petty Cash) and one other person for larger payments.

All advances must be recorded. Without records it rapidly becomes very difficult to keep
track of advances leading to loss of money.

VII. Recording of In-Kind Donations
Records should be kept of all In-Kind Donations and those that have been distributed to
beneficiaries. Regular and spot checks should take place to ensure there is no loss,
misappropriation or theft of In–Kind Donations.
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Ensure that In-Kind donations are not utilised by local personnel for personnel use. A
regular stock take should take place.

Records are of utmost importance, to ensure that Donors and Institutions can be provided
with assurance that In-kind donations have received the beneficiaries.

Refer to Section 1.3 Income Management Sub Section VI. Income In Kind.

VIII. Overview
These guidelines are intended as quick guidance in emergency situations, no departure
from the full Islamic Relief Financial Guidelines is acceptable for established field offices,
without authorisation from the IRW Finance department.

































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16.0 Field Office specific

I. Introduction

The Islamic Relief Field Office specific guidelines are designed to give guidance in
additional areas specific to Islamic Relief Field Offices. It should be noted that Islamic
Relief Field Offices at all times should refer to and take guidance from Islamic Relief
Financial Guidelines. The additional guidance is, as it states, an additional not a
replacement or departure from the main body of guidelines.

II. Documentation
Refer to Islamic Relief Financial Guidelines section 1.4 Cash and Bank Guidelines: I.
Opening Bank Accounts, section 1.5 Procurement Guidelines III. Approval Levels.

All Field Offices should maintain on record the following essential documents:

1. Registration documents (if registered).
2. Bank Account List and list of cheque signatories (Appendix B1)

Approved form to setup field office bank account from Executive Committee at
Islamic Relief Worldwide.

3. Approval limit for procurement of assets, supplies and other payments. A table
should be produced to show the limits of expenditure and the authorisations
required. (Appendix B2). A copy of the expenditure approval limit must be sent
to IRW Finance.

4. Working with Partners:

There are several types of partners that Islamic Relief cooperates with:

• The relationship with the partner does not involve any transfer of funds or assets
between Islamic Relief Offices and Partners. In this case, the following procedures
are not applicable.
• The partner does not receive any funds from Islamic Relief but helps to implement
projects such as relief distribution for Islamic Relief. In this case Islamic Relief
must ensure that during the project implementation by partners; Islamic Relief’s
internal control procedures are adequately followed especially in regards to stock
control and verification of receipt by beneficiary.
• The partner receives a grant or sponsorship from Islamic Relief to implement a
project. In this case all the internal control procedures outlined below must be
followed. Refer to Islamic Relief Financial Guidelines: Islamic Relief Policy on
Grants.
• Islamic Relief uses partner’s bank account, due to unavailability of a bank account
in a new country, as commonly happens during emergencies. The following
procedures must be followed.

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The procedures of working with partners are as follows:

• Approval letter from Executive Committee at Islamic Relief Worldwide, which
permitted you to use partner organisation’s bank account (Appendix A4).

NO funds should be transferred through personal bank accounts.

• A Partnership Agreement must be made. The agreement should clearly state:

a) The requirements where Islamic Relief partners must have an Islamic Relief
approved internal control and reporting system.

b) Area and scope of work –the areas of cooperation between Islamic Relief
and partners as well as the duties of each party should be clearly stated.

c) The type of reports to be produced and the dateline for sending the reports to
a designated Islamic Relief staff.

• A copy of the Partner’s Registration document should be kept by Islamic Relief
Field Office.
III. Organisational structure

The Organisation Structure must reflect:

1. Number of projects managed.
2. Number of project components i.e. health, education, Water & Sanitation etc.
3. Scale of the project managed.
4. Number of Sub-offices
5. Risk and Stability of the area
6. Segregation of duties – a riskier operation will require greater segregation of duties,
and hence more staff needs to be employed to ensure asset custodian, recording and
authorisation is separated.

Minimum number of segregation of duties for sub-office

Normal Situation (low/average risk)
1. Leader (Program Manager/Head of Mission)
2. Admin and Financial Officer

High Risk Situation
1. Leader (Program Manager/Head of Mission)
2. Finance Officer
3. Admin Officer


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IV. The Structure of Finance Department

Country Head Office (Finance Manager) Country Head Office (Admin Manager)


Sub Offices (Admin & Finance Officer/Accountant)

The management structure for the Admin and Finance Officer at sub offices is a form of
matrix management structure. While the head of the sub office is a Programme
Coordinator/Manager, the Admin and Finance Officer are ultimately responsible to the
Finance Manager at Head Office (for financial matters) and Admin Manager at Head
Office (for admin matters).

It is very important to clarify that as long as the Project Coordinator/Manager at the sub
office is following all the admin and financial procedures, the Admin and Finance Officer
must give full support to facilitate the operations. Admin and Finance Officer do not have
the authority to stop any payments that have been made according to the procedures.

In circumstances where sub office affairs do not follow the admin and financial procedures,
the Admin and Finance Officer must not approve/make payments. Instead he/she should
refer the matter to the Finance Manager (for financial issues) and Admin Manager (for
admin issues) immediately. The Finance Manager/Admin Manager will try to resolve the
situation in consultation with the Programme Manager at the Head Office. The Admin and
Finance Officer must keep record of all communications, where all communications must
be recorded in writing. Verbal communication is not sufficient evidence that authorisation
has been obtained.

If the breach of procedure is material and no action has been undertaken by the Finance
Manager, the Admin and Finance Officer must refer the matter to the IRW Internal Audit.

The Admin and Finance Officer could be held personally liable for any unauthorised
transactions including the ones that do not follow the procedure. In addition to Islamic
Relief financial guidelines if he/she do not take the necessary steps as stated above.

Duties of Sub Office Admin & Finance Officer/Accountant

1. Assist/support all project coordinators.
2. Ensure that Islamic Relief guidelines and procedures are being followed. The
Admin & Finance Officer should not approve any documentation/payment that does
not follow the financial guidelines and procedures.
3. If there is any change/breach of procedures he/she should report to the Finance
Manager. The Finance Manager should communicate with Programme Manager
and try and resolve the situation.

V. Financial Control

All Islamic Relief Field Offices should establish and operate financial aspects and operate
in accordance with the Islamic Relief Financial Guidelines, with particular reference to the
sections on Financial Controls Segregation of duties.
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This section is additional guidance and is NOT a replacement or departure for Field
Offices from the main body and text of Islamic Relief Financial Guidelines.

Principles of Internal Control

All forms, reports and procedures presented in this section are intended to preserve the
basic principles of internal control, and ensure that Islamic Relief assets are adequately
protected. As much as possible, the Management of Islamic Relief Field Office and
Emergency Operations are responsible to ensure the following functions are separated by
assigning the role to different members of staff:

The following guidance is in addition to the section 1.9 Fixed Assets Management of
the Financial Guidelines.

• Custodian of Islamic Relief Asset

All Islamic Relief assets such as: cash, vehicles, office equipments, computing equipments
and accessories, furniture, communication equipment, project equipment etc. should be
assigned as a custodian. This is to ensure that all assets are being maintained by Islamic
Relief staffs are responsible for safekeeping as well as the condition of assets.

• Recording of Islamic Relief Assets

All assets acquired, disposed and handed over to another staff should be recorded by a
member of staff, which is not responsible for the custody and authorisation of the asset’s
use. The degree of control would depend on the value and liquidity of the asset. Top
priority should be given to the: control of cash in hand, cash in bank, stock and fixed assets.

All Field offices should operate along a standard and logical fixed asset tagging system.

• Authorisation of Islamic Relief Assets

The person who is responsible for authorising the use, acquisition and disposal of Islamic
Relief Assets, should not be in charge of the custody and recording of the assets to prevent
any misuse.

All Field Offices should obtain written approval from IRW before the disposal of any fixed
assets.

Note: Where the internal control procedures outlined are not possible due to unavoidable
and unforeseen circumstances, alternative means of safeguarding Islamic Relief assets must
be explored. Any exceptions to the normal procedures should be documented and the
appropriate approval from the Management must be obtained.



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VI. Financial procedures and forms

i) REQUEST FOR TRANSFERS

The Transfer Request Form (Appendix B3) should be filled by the Finance Manager and
approved by the Head of Mission/Country Director. It should be submitted to the Regional
Programme Manager/Emergency Manager for approval. Funds are transferred once it is
authorised by the Project Division Manager and IRW Finance.

Transfers from IRW should be accounted for on receipt according to the budget, no debtors
should be set up for expected transfers. IRW reserves the right to amend the amount of
transfers to be sent to Field Offices according to circumstances.

ii) PROCUREMENT

The following guidance is in addition to the section 4.5 Procurement Guidelines and
4.6 Tendering Guidelines of the Islamic Relief Financial Guidelines.

All purchases above a certain limit (to be determined by the Country Director and Finance
Manager) refer to section 4.5 Procurement Guidelines: III. Approval Levels and follow the
procedures outlined below:

a) Request for purchase is made by the originating department.

An approved (by line manager) Purchase Request Form (Appendix B4) must be submitted
to the Purchasing/Admin Officer. The authorisations required will depend on the
expenditure limit set as shown in Appendix B2.

b) Quotations are obtained from approved vendors.

Vendors are contacted by the Admin/Purchasing Officer to submit quotations. All Islamic
Relief vendors must fill in Islamic Relief Vendor Detail Form (Appendix B5). A
background check must be conducted to verify the reliability of the vendor before they can
be accepted as an approved vendor.

c) Quotations and Bids from various vendors are compared.

A Bid Evaluation Form (Appendix B6) must be completed detailing the quotations
received. The Purchase Committee will meet to decide based on: price, quality, reliability
and other factors as to which supplier to select for the purchase. The selected supplier must
be clearly stated on the Bid Evaluation Form together with the reasons for selecting the
vendor. The decision must be signed by all the members of the Purchase Committee.

The Purchase Committee will have at least five members of which are: Country Director,
Finance Manager, Admin/Purchasing Manager, a person who has technical knowledge
about the product and the manager from the requesting department or his/her
representative.



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d) The order is made to the selected vendor.

A Purchase Order (Appendix B7) is sent to the vendor. Three copies of the Purchase Order
should be prepared. One copy is for file (by the Admin/Purchasing Officer); another copy
is sent to the vendor whilst a further copy is sent to the storekeeper for delivery
verification.

e) The goods/services are received.

A copy of the Purchase Order should be given to the storekeeper (or any person authorised
to receive the goods) and a Goods Received Note (Appendix B8) would be used to confirm
the quantity delivered and the condition of goods. The Purchase Order copy and a copy of
the Goods Received Note, should be sent back to the Accounts/Finance for payment
processing; where goods are delivered direct to beneficiaries, either one of the following
must be completed:

• Send an Islamic Relief employee (with a copy of the Purchase Order) to the
distribution site, to observe and confirm the delivery, quantity and condition of
the goods OR,
• Appoint a representative among the beneficiaries to confirm the delivery,
quantity and condition of goods. The representative should have the details of
the purchase before the goods are delivered OR,
• In the case where distribution is geographically dispersed and in small quantities
such as, delivering fertilisers to each farmer’s house. Confirmation of delivery
can conducted at a later stage when Islamic Relief staffs are able to make a field
visit to the beneficiaries. In this case, each beneficiary should be given a ration
card which is signed by driver whenever a delivery is made. The ration card will
be kept by the beneficiary for inspection by Islamic Relief field officer.

f) Vendor confirms amount owed.

An invoice from the supplier is received during or after delivery of goods, to confirm the
amount which should be paid.

g) Payment is made to the vendor.

As a precondition, all the relevant procurement documents (Purchase Request, Bid
Evaluation Form, Purchase Order, Delivery Confirmation and Vendor Invoice) must be
attached to the Bank/Cash Payment Voucher (Appendix B9/B10) for payment approval by
the Finance Manager and Head of Mission. The Purchase Order, Bid Evaluation Form
and Delivery confirmation are absolute essential documents for releasing payment to the
vendor. A payment voucher checklist will inshaAllah ensure that all the supporting
documents are present (Appendix B11).

h) Deposits or Advance Payment to the Vendor.

Advance payment to the vendor should not be encouraged except when it is a normal
business practice in the area that Islamic Relief is operating. Any deposits or advance to
suppliers must be authorised by the Finance Manager and the CD.

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VII. Receipts

All types of receipts must be reported in the Quarterly Reports (for Field Offices) and
Monthly Reports (for Emergencies). Further document formats for bank and cash are in
Appendix B12, B13 and B14. Receipts must be clearly separated in the accounts according
to the categories below:

a) Transfers from IRW

It is the responsibility of the Regional Programme Manager/Emergency Manager to ensure
each transfer made to the field office is accompanied by a transfer sheet, detailing the
breakdown of the transfer according to projects.

b) Income from Institutions

A document must be provided by the donating institution to specify what is being donated
along with the purpose it is intended for. For example, In Kind Donations Form (Appendix
B15) should be used for in kind donations.

c) Income from Other Sources

Any donation from locals, interests, advance repayments and reimbursements must be
clearly separated in the accounts (i.e. allocated an account each).

e) In Kind Donations

The following guidance is in addition to the section 1.3 Income Management: Income
In-Kind of the Islamic Relief Financial Guidelines.

In Kind Donations Form (Appendix B15) must be used to record in kind donations
received. Two copies are produced; one for file and the other as an acknowledgement of
receipt to the donor. The In Kind Donation form must be reconciled with the Goods
Received Note (Appendix B8) from the store to confirm the delivery of the In Kind
Donation. The stock records held by the Finance department (in QuickBooks) and in the
store must be updated. An estimated market value must also be allocated to the goods
based on the market value of the country of operation, donor’s documentation and expert’s
opinion (wherever possible). The valuation of stock must be approved by the Finance
Manager and Project Manager.

VIII. Payments & transfers

The following guidance is in addition to the section 1.4 Cash & Bank Guidelines and
1.7 Accounts Payable Guidelines of Islamic Relief Financial Guidelines.

a) Withdrawal from Bank to Safe

A Safe Replenishment Form (Appendix B16) must be approved by the Finance Manager
and the Country Director/Head of Mission for transferring funds from the bank to the safe.
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A person should be assigned to maintain the receipts and disbursements from the safe. The
same rule must be followed where a safe is not (or cannot be made) available for cash
withdrawal from the bank. In this case, the cash held in a secure place by a responsible
person is treated as a ‘safe’.

b) Bank Payments

The Bank Payment Voucher (Appendix B9) should be used to obtain approval for all bank
payments. The payments should be separated by project and budget (i.e. account codes) as
it would appear in the accounting entry.

c) Cash Payments

All cash payments should be filed separately according to the currency. It is assumed that
all cash payments are made through the safe or any other means of safekeeping cash. Cash
Payment Vouchers (Appendix B10) must be used to obtain approval for all cash payments.

Supporting documents (such as Purchase Order, Delivery confirmation, Travel
Request Form, Staff Expense Claim plus receipts etc.) must be attached to Bank
Payment Vouchers and Cash Payment Vouchers respectively.

d) Petty Cash

Petty Cash Payment Vouchers (Appendix B17) should be used for petty cash payments. A
float level should be assigned for petty cash. However, a person should be assigned to
maintain the petty cash till. For example float replenishment would require you to fill out a
Float Replenishment Form (Appendix B18) which, should be used to obtain approval from
the Finance Manager.

e) Safe and Petty Cash Reconciliation

For both Cash in Safe and Petty Cash, the recordkeeping should be maintained by the
Accountant while the custodian of the cash is held by the cashier. On a daily basis, a cash
count (using the Cash Count & Reconciliation Form – Appendix B19) should be performed
and reconciled with the Cash balance in QuickBooks. Authorising expense should also be
kept separate from custodian and record keeping. Normally, the Finance Manager will be
responsible for authorising payments. However, in smaller field offices or in emergencies,
the Programme Manager/Coordinator and the Finance Officer/Accountant will be in charge
of authorising payments.

f) Advances

Advances must be recorded in the accounts as a current liability in the name of the
applicant. By doing so, any amount owing or unsettled by any Islamic Relief staff (or
supplier) can be monitored. Advances can be divided into:

• Cash Advance for Project (one account for each advance taken) – The Cash
Advance Form ((Appendix B20) should be used whenever an advance is needed.
Once the advance is settled by returning the balance unspent or submitting a
Staff Expense Claim Form (Appendix B21) if some expenses are overspent, the
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Advance for Project account will be closed and the expenses charged to the
appropriate expense account. IOU forms (Appendix B22) are used for smaller
advances.

• Salary Advance – salary advance will be charged to the monthly salary. The
amount of salary advance that can be taken is limited to an amount that will be
determined by the CD, Finance Manager and Project Manager. The monthly
repayment period for salary advances is up to one year maximum.

• Advance to Suppliers – advance to suppliers should be avoided except when it
is the normal business practice of an area that Islamic Relief is operating in. Any
advance to suppliers must be authorised by the Finance Manager and the
Country Director.

Note: Every month, a statement must be produced to each staff/supplier to show the
amount of the advance owing/unsettled to Islamic Relief. These reports can be
generated from QuickBooks standard reports.

Cash advances

Ways of recording Cash Advance:

1) Direct – for advances in small amount and over short period (usually less than a day)
Debit Credit
Cash 900
Stationary expense 900

However, a register must be used to keep track of the amount taken and returned.


Cash Advance Register

Date Staff
Doc. Ref.
No.
Advance Returned Expense Cashier Received
by;
13/1/05 Ismail CAV1/019 1,000 100 900 Sign Sign

2) Detailed – advances are recorded in the accounts when taken and settled separately.
This will involve many transactions, but is at the expense of accuracy and better control
especially for large advances and those advances that are not settled on the same day.

Take Advance Debit. Credit
Cash 1,000
Cash Advance: Ismail 1,000
Advance Settlement
Cash Returned:
Cash 100
Cash Advance: Ismail 100

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Charge to Expense:
Cash Advance: Ismail 900
Stationary expense 900

Note: In both cases, the Cash Advance Request form will have to be completed and placed
in the ‘Unsettled Cash Advance’ file until they are settled.

g) Cash Handover

A Cash Handover Form (Appendix B22) should be used whenever Islamic Relief staff is
given large amounts of cash to: be distributed to beneficiaries, purchase asset, make
payments to supplier or any other purpose.

vi) ASSET CONTROL

The following guidance is in addition to the section 1.9 Fixed Assets Management of
the Islamic Relief Financial Guidelines.

a) Assets Register

A list of asset or Asset Register (Appendix C) should be maintained by the Admin Officer
(or a person assigned by the Admin Manager) for each field office or temporary emergency
office. The asset list should state clearly who is the asset custodian and where it is
currently located.

b) Asset Handover

Any movement of assets to a different location/custodian should involve the Asset
Handover Form (Appendix B23).

IX. Financial procedure with Islamic Relief partners

i) Withdrawal from Partner’s Bank Account

• As a principle, any payments, transfers or withdrawals from the partner’s bank
account must be supplemented by the same internal control procedures outlined
within this section, and throughout the Islamic Relief Financial Guidelines.
• Islamic Relief funds held in the partner’s bank account should be regarded as
‘Other Debtor’ (i.e. Other Receivable) in Islamic Relief’s books.
• The balance of Islamic Relief funds held in the partner’s bank account must be
reconciled on a monthly basis with Islamic Relief’s records.
• Ideally, the partner should set up or allocate a separate bank account to hold
Islamic Relief’s funds to prevent any accidental use of Islamic Relief funds for
unauthorised purposes.

ii) Projects Implemented by Islamic Relief Partner

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• Any Islamic Relief partner who implements projects on behalf of Islamic Relief
must have an Islamic Relief approved internal control system that is of
equivalent standard as being outlined by all sections of this document.

XI. Reports

The following guidance is in addition to section 2.1 Financial Reporting of the Islamic
Relief Financial Guidelines.

Islamic Relief Field Office reports should include:

• Budget vs. Actual Income & Expenditure Report (In Kind Donations should
also be included based on estimated valuation as explained in 1.2 Income
Management: Income In-Kind).
• Detailed Balance Sheet, as at end of Quarter
• Detailed stock valuation report, as at end of Quarter.
• A bank reconciliation statement at the end of the period concerned.

Note: All these reports are available in QuickBooks standard reports.

Field Office - Reports must be submitted to Islamic Relief HQ on a Quarterly Basis as
stated in 2.1 Financial reporting of Islamic Relief Financial Guidelines.

Emergency operations - must produce reports on a Monthly Basis.

The chart of accounts in QuickBooks must be in the same format as the master budget.
XII. Budget Implementation and Reporting

i) Field Offices every line of expenditure should be matched against the budget. The
QuickBooks budget vs. actual report facility is available for this purpose. Budget vs. actual
reporting must be done on a monthly basis.

ii) Emergency Projects – in the absence of a line by line budget, emergency programmes
(through a designated Finance Manager/Accountant) should prepare an internally approved
(by Head of Mission, Finance Manager and Programme Manager) budget as soon as
possible, to ensure all expenditures are adequately tracked and evaluated. The budget
should be at least for 3 months, and should be revised from time to time to reflect the
changes in the project activities and circumstances. The Programme Manager has the
responsibility to update Head of Mission and Finance Manager of any significant changes
in project activities, so that Finance Manager can update the budget in QuickBooks as soon
as possible.

Post Budget Adjustments

All Field Offices with amendments to budgets set should submit their proposals by project
to the relevant Regional Programme Manager at IRW, who will then present the proposal
to the Projects Approval Committee.
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Note: Budget adjustments apply to increase or decrease in budgets. In circumstances where
the original budget has been over optimistic a reduction may be necessary.
XIII. Stock Control

The following guidance is in addition to the section 2.0 Stock Guidelines of the Islamic
Relief Financial Guidelines.

1) Stock Receipt

All incoming stock either through Islamic Relief procurement or through in kind donation
should be recorded in the Goods Received Note (Appendix B8). In the case that the goods
are purchased by Islamic Relief, a copy of the Purchase Order must be sent to storekeeper
before the delivery of goods. The storekeeper will use the Purchase Order as a basis of
verifying the quantity and condition of goods received are as ordered. Any discrepancies
will be recorded in the Goods Receive Note. The Purchase Order copy along with a copy of
the Goods Received Note must be sent to Accounts department for payment processing.

2) Stock Issue/Despatch

All stock issues should be approved and authorised using the Stock Request Form
(Appendix B25). The storekeeper should not release any stock without proper
authorisation. A bin card (Appendix B26) will be used to update each stock item of any
stock movements.

Note: Weekly stock updates should be made into QuickBooks. The storekeeper is held
responsible to send Admin weekly summary of stock movements.

XIV. Employees

The following guidance is in addition to the Islamic Relief Human Resources
Guidelines.

1) Recruitment

i) Employment Contract (Appendix D1) – relevant issues which should be covered by the
contract are:

a) Job description and main duties
b) Holiday entitlements
c) Working hours
d) Travel Allowance (fixed according to each country)
e) Line Manager and Subordinates
f) Conditions for salary advances

ii) Personal History Form (Appendix D2) must be completed by each Islamic Relief
employee.

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2) Leaving Employment

i) Job Handover Form (Appendix D3) and assets in custody must be given to the
replacement staff. The handover form should list the assets held in custody whilst the list
of main duties and tasks are in progress. The final month salary will be held subject to
completing the handover process.

3) Attendance

i) Timesheet - a record must be made of the daily time in and time out for each staff
(including volunteers).

4) Volunteers:

i) All volunteers are expected to respect the ethics and values held by Islamic Relief.

ii) Volunteer List– a register should be maintained to hold the personal details of each
volunteer along with the start and end of the volunteers work.

iii) The duties code of conduct and any financial benefits to them should be clearly stated
in a contract agreement.

5) Expatriate:

i) Employment Contract – every expatriate should have an employment contract with
Islamic Relief that contains all issues highlighted above, plus any other issues specific to
working abroad such as:
a) Where and when the salary is paid.
b) Entitlement for housing benefit and the maximum rent allowable.
c) Entitlement for salary advance, the maximum amount allowed for
salary advance and the procedure for application, repayment and
reconciliation.

ii) Salary Advance Form– application for expatriate salary advance must be made using
this form, along with a copy of the approved salary advance form which, should be sent to
the Finance Department at HQ. The salary advance must be recorded in the accounts as a
current liability under the name of the expatriate concerned. A statement should be
produced to the expatriate to show the total amount of advance taken.

XV. Project Control

1) Travel Request Form/Log (Appendix B27/B28) – All field trips or trips to a destination
of more than 30 km (such as for attending meeting, seminars, purchasing assets,
overseas trip etc.) should be approved by the Head of Mission. A Travel Request Form
should be used to specify the purpose of the trip, number of participants and any
requirements such as vehicle use and advances. The travel request form will be required
for the release of any advance and vehicle use. The Travel Register should also be
updated with details of the trip including any reference to advance taken, staff claim
and vehicles used. During, emergencies, subject to the agreement of Head of Mission,
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Finance Manager and Project Manager, the requirement for filling in the Travel
Request Form may be excluded and only a log in the Travel Register is required. In this
case, a column should be provided for HM to give approval for the trip.

2) Aid Distribution Control – Aid distribution must be verified by the beneficiaries
(Appendix B30).


3) During the initiation phase of the project, the Project Manager must work together with
the Finance Manager to create a budget based on the cash flow needs of the projects’
activities. The PM also has the responsibility to plan and coordinate activities of each
project component with the FM, to ensure there are no disruptions in cash needs of
activities such as: purchasing supplies, payment to suppliers, volunteers, staffs,
beneficiaries etc.

4) Camp Management – the following are the main areas of concern:

a. Camp Asset Control – office supplies, office equipment, stock (especially
aid supplies), project equipments, shelter materials etc.
b. Camp Registration Process – Camp Registration Forms (Appendix B29)
must be completed.
c. Camp Aid Distribution – must be adequately verified using Camp Aid
Distribution sheet (Appendix B31). A secure place for storing aid supplies
must be made available. Store Control procedures such as Stock Request
Forms and Bin Cards must also be observed.
d. General Camp Monitoring (Appendix B32)
e. Water Bladder Monitoring Form (Appendix B33)
f. Shelter Materials Control
g. Camp School
h. Camp Clinic

XVI. Filing System

Basic Information – Petty Cash Float level, members of purchase committee, Salary
Advance formula, depreciation policy.


Filing System

1) The filing system below is based on the bank and cash payments. The purpose is to
provide easy traceability and audit reference to every transaction. Every transaction
should have the respective voucher as the top sheet and the relevant supporting
documents attached to it. If in a case a supporting document is too bulky, a
reference to the location of documents could be made on the Payment Voucher.

2) A separate bank transactions file should be created for each bank account.
Similarly, cash transactions should be separated by Cash (i.e. cash in safe) and Petty
Cash. Within the cash category, separate filing or folders should be made for each
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currency. In other words, we should not mix the documents for home currency and
foreign currency.

3) A separate file should be made for each category below. If there are only few
documents, then make a folder within the related files. For example, if the Bank
Receipt Vouchers are few, then make it as a folder (i.e. sub section) of Bank
Payment Voucher file.

4) All the main vouchers should be pre-printed and serial numbered. This will
inshaAllah minimise the chances of error and provide an additional security to the
forms.

5) The serial number of the form should be entered as the transaction reference
number in QuickBooks. This will provide an audit trail from QuickBooks
transactions to the source documents. Similarly, the QuickBooks transaction
number (which is also in a unique series as none ‘deleteable’) should be referenced
on the form as evidence that the transaction has been entered into QuickBooks.
Furthermore this will ease the traceability from the document to the corresponding
QuickBooks transaction.

Financial Documentation Files

Cash in Bank
• Bank Payment Voucher Pre-printed
• Bank Receipt Voucher
&
Cash in Safe
• Cash Payment Voucher Serial Number
• Cash Receipt Voucher

Petty Cash
• Petty Cash Payment Vr. Ref. In QB
• Petty Cash Receipt Vr.

Note: Within a file, separate folders should be made for each currency.

Procurement Process and Filing

The stages in purchasing are as follows:
Stage Document Transit File
1. Approval for Purchase Purchase Request
2. Supplier selection Bid Evaluation
3. Confirmation of Order Purchase Order PO file
4. Confirmation of delivery Goods Received Note GRN file – matched against PO
5. Confirmation of amt. Owed Supplier’s Invoice Unpaid Invoice file
6. Confirmation of Payment Bank Payment Voucher

Note: BPV file is the final destination of the procurement cycle.
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Transit files – these documents will be kept in these files until they are settled or matched.

1. PO file – awaiting Invoice from supplier. Upon receipt of supplier’s invoice, the PO
together with the corresponding invoice will be matched with the Goods Receipt
Note (GRN or delivery confirmation) and kept in the ‘Unpaid Invoice File’.

2. GRN file – to be matched with supplier’s invoice.

3. Unpaid Invoice file – awaiting payment approval & disbursed to supplier. Once
payment is made, the documents (PO, Supplier’s Invoice, and GRN) will be
attached to the Bank/Cash Payment Voucher and filed in the Bank Payment
Voucher/Cash Payment Voucher file.

4. Unsettled Cash advance file – awaiting settlement by staff taking the advance. The
settlement process requires the return of any cash balance together with the receipts
for the expenses made. Once the settlement has been made, all documentation must
be attached to the Cash Payment Voucher and stored in the Cash Payment Voucher
file. A copy of the cash advance and settlement document must also be attached to
the Cash Receipts Voucher to accompany the cash balance returned.

Financial Policies and Procedures Files

1. Financial Guidelines and Policies
2. Statutory Regulations
3. Institutional Donor reporting requirements
4. Procurement Procedure
5. Salaries/payroll: file, deduction, family maintenance
6. Salary advance/loans
7. Approved budget file

Admin files

1. General (reg. doc, approval limits, org. charts, bank lists)
2. Personnel History
3. Contracts (rental agreements, agreement with suppliers)
4. Insurance Policies
5. Vehicle Ownership document Keep in SAFE
6. Asset Register

Management files

2. Strategic Management Plans
3. Human Resource Policies and Guidelines
4. Directives
5. Government regulations
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Project Files

1. Project profile

a. Log frames
b. Budget
c. Brief
d. Cost Benefit Analysis

2. Contracts with Institutional Donors and Government (also referred to by Finance)
3. Approved Projects Budget (also referred to by Finance)
4. Sponsored Orphans List
XVII. Year end Closing 31/12 (after Q4 report to Head Quarters)

1) Depreciation

Clear up all Fixed Assets from expense accounts.

Dr. Computer (Fixed Asset Type)
Cr. Computer (expense Type)

2) Opening balance for new financial year

DR. CR.
Cash 100,000
Bank 2,000,000
A002 HQ Transfer b/f (Income) 2,100,000
Exchange Gain/Loss

1) The treatment for exchange rate gain and loss will depend on whether the transfer
from HQ is debited into a Foreign Currency Bank account or a local currency bank
account. For example:

Budget exchange rate: CFA 1,000

HQ transferred 16,440 @ CFA 950

Accounting Treatment

a. HQ Transfer into local currency bank account

Policy: record the amount in the local currency at the actual rate of
exchange. However, there will be an exchange gain or loss based on the
difference between the budget rate and the actual rate.
Dt. Ct.
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HQ Transfer (Income a/c) 16,440,000
(Euro 1,000 x CFA 1,000)
Local Currency Bank a/c 15,618,000
(Euro1,000 x CFA 950)
Exchange loss 822,000

b. HQ Transfer into foreign currency bank account

Policy: As the amount is received in foreign currency, no exchange gain/loss will be
calculated upon transfer as the gain/loss is unrealised. Exchange gain/loss will be
calculated once a transfer is made from the euro bank a/c into local currency, then by
comparing the actual rate against the budget exchange rate.
Dt. Ct.
HQ Transfer (Income a/c) 16,440,000
(Euro1,000 x CFA 1,000)
Euro Bank a/c 16,440,000
(Euro1,000 x CFA 1,000)

Assuming that Euro 10,000 is transferred from the euro a/c to the local
currency bank a/c at CFA 1050:
Dt. Ct.
Euro Bank a/c 10,000,000
(Euro10,000 x CFA 1,000)
Local Currency Bank a/c 10,050,000
(Euro10,000 x CFA 1,050)
Exchange gain 50,000
(Euro10,000 x CFA 50)


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17.0 Islamic Relief Policy on Grants

I. Introduction

Islamic Relief makes grants to individuals when the purpose of the grant is in-line
with the charitable objectives of Islamic Relief.

The charitable objectives of Islamic Relief are:
• Alleviating poverty and suffering of the world’s poorest people.
• Delivering emergency aid to those affected by natural or unnatural disasters.
• Promoting sustainable economic and social development within communities
through various projects, namely health & development, water & sanitation,
income generation, orphan sponsorship etc.

All Islamic Relief Offices/Partners that make grants must adhere to the Islamic Relief
on Grants.
II. Procedure

1. Individuals in need of assistance should obtain a grant application form from
the accounts department of the respective Islamic Relief Office/Partner. If
need is identified by the organisation, then the form may be completed by
Islamic Relief staff members, but the information contained therein must be
verified by the intended beneficiary.
2. The grant application needs to be approved as stated below, if the grant
requested is up to a value of £5,000 in United Kingdom.

Sterling Amount Authorised Approval Level
Up to £1,000 Two designated staff members
£1,001 to £5,000 Committee of three

All Other Islamic Relief Offices and Partners should set their approvals
according to local circumstances.

When approving grants the following should be considered:
• It remains the discretion of Islamic Relief who may receive a grant.
• All applications should be carefully considered taking into account
the financial position of Islamic Relief with the purpose of request.
• Most grant payments are made out of unrestricted funds that are
always in short supply.

3. Grant applications in excess of £5,000 in the United Kingdom are given to
organisations only and not individuals. All Other Islamic Relief Offices and
Partners should set their approvals according to local circumstances.



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Sterling Amount Authorised Approval Level
Over £5,000 Committee of the Board of
Management (BOM)


4. On approval the grant application form is to be submitted to the accounts
department of Islamic Relief Office/Partner.
5. On receipt of the application form the Accounts department personnel should
check:
• Whether all the information contained therein has been completed.
• Whether the application has been approved by the appropriate
personnel.
• Whether the purpose for which the grant requested is within
Islamic Relief’s charitable.
• In circumstances where criteria’s are not met, grant application
should be referred back to the committee chair.
6. Payments should be made by Cheque payment or bank transfer to the
beneficiaries’ bank account. Where the beneficiary does not have a bank
account, or it is decided that the funds would go to third party bank account
such as a hospital etc., the reasons for this decision must be written on the
application form.

III. Transparency & Fairness

Islamic Relief personnel are to ensure transparency & fairness cover the whole
process:

• All grant applications are to be considered equally and fairly.
• Where the person requesting the grant is associated in any way with a
committee member. The grant application should be considered by an
alternative approved staff member with no affiliation or association with the
person in question.
• The reason for acceptance or decline of the grant application should be clearly
stated on the face of the grant application form.
• Any grants to staff would have tax implications according to prevalent
relevant tax authorities. If the payment is deemed to be a benefit to the
employee by the tax authorities, where the amount paid will be taxable and as
such. The following parties must be notified to take appropriate measures:

Human Resources & Accounts Department will need to be
informed so that the necessary payroll adjustments, which can
be processed.
The employee will need to be informed about potential tax
implications.
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IV. Conclusion
Islamic Relief reserves the right to vary its policy in the light of particular
circumstances, in order to preserve the breadth of its charitable activities.

Identification required from individuals: Passport, Driving Licence, Utility Bill &
recent bank statements, identification from organisations Certificate of incorporation,
trust deed (or equivalent) recent report & accounts, identification of directors/trustees.
Islamic Relief Grant Application Form - Individuals
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CONFIDENTIAL

1 - ABOUT YOU


2 - ABOUT PEOPLE LIVING WITH YOU

Full Name Date of Birth Relationship to You
















3 - MONTHLY INCOME AND EXPENDITURE



4 - OTHER
Title: Mr/Mrs/Miss/Ms/Dr/Other Date of Birth
Surname

Country of Birth
First Name(s)

Nationality
Address




Postcode
Daytime telephone no. How long have you been in the UK?
Status in the UK Asylum Seeker Refugee Indefinite Visa British
Other (please specify) ___________________________________________________
Previous
Occupation

Current
Occupation
Qualifications

Marital Status: Single Married Divorced Widowed
Separated Other (please specify) __________________________________

Are you in receipt of any income? (from job, income support etc)

Yes. Please specify source and amount ________________________________________________________________

No.

Please state amount of your total monthly expenditure _________________________ (bills, rent, debt repayments etc)


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5 - YOUR REASON(S) FOR APPLYING FOR A GRANT

Amount of Grant requested:

Please explain in detail the purpose of your grant application:






6 - PREVIOUS GRANT APPLICATIONS


Have you applied for financial help from Islamic Relief before? Yes If yes, please give date of previous application
No _______________________________
(month) (year)


What was the reason for your previous application?


Was this application granted or refused? Granted
Refused

If granted, how much was awarded to you? £ ___________

7 - CHECKLIST / DOCUMENTS YOU HAVE PROVIDED IN SUPPORT OF YOUR APPLICATION

N.B It is ESSENTIAL that a photocopy of your passport or visa, proof of address, a reference and any
other relevant documents which support your case are supplied with your application.

Passport / Visa Immigration Papers Payslips Social Security Book(s)

Bank Statements Letter from College Letter from School Rent/Other Payment

Medical Bills Disability Registration Card Medical Report from Hospital Reference Letters

Other (please specify)






Accommodation Rented Council Accommodation Mortgage Owned

Other (please specify) ____________________________________


Are you a student? Yes No

If yes, what are you studying? ________________________

Is your course Full-time Part-time

How long is your course? ___________________________

What year of your course are you in now? ______________

Do you have any savings? Yes No

If yes, please indicate less than £500
the level of your savings between £500-£1000
between £1000-£2000
Over £2,000

£
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8 -YOUR DECLARATION
Has this form been completed for you by some else? No Yes - if so, please state by whom and
why

____________________________________________________________________________________
_______

I declare that I have read and understood the grant making policy on page 1 of this form and that the
information I have supplied is correct and accurately reflects my current circumstances and my need for
a grant.

___________________ ____________________ ______________________
Name Signature Date







































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Islamic Relief Grant Application Form - Organisations

CONFIDENTIAL


1. Name of organisation:
2. Name of the proposed project:


3. Amount of Grant requested:

4. What are the aims and objectives of the project?


5. How will these aims and objectives be achieved through the programme proposed?

£
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6. What are the expected outcomes of this work?


7. What is your planned Monitoring and Evaluation of these expected outcomes?


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8. Details of your organisation
Please give information on your organisation's main aims







9. YOUR DECLARATION

I/We declare that I/We have read and understood the grant making policy on page 1 of this form and that
the information I/We have supplied is correct and accurately the organisations need for a grant.

______________________________________ ____________________ __________________
Name Signature Date
































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Islamic Relief
Grant Application Assessment – Internal Use Only

Date of Committee Meeting: ________________________________

Personnel Present _____________________________________________________________________

1. In order to protect Islamic Relief and to employ anti-money laundering criteria, the committee
members must ensure sight of the following original documents:

For Individuals

Passport
Utility Bill
Driving Licence
Recent Bank Statements

For Organisations

Certificate of Incorporation or similar documentation
Recent report & annual accounts
Trustee Deed
Identity documentation of Trustees/Directors/Owners/Key Personnel

Retain copies of identification documents for Islamic Relief records. Identify clearly who run the
organisation.


2. Check the UN, EU, USA Homeland Security websites for any matches to terrorist listings.

Mach Yes
No

DO NOT proceed with grant if there is a match or there is uncertainty.

3. Does the application meet the Islamic Relief criteria for grants?
Yes
No

4. Grant Application
Approved
Declined
Pending

Reason for Decision:



5. Category of Grant ___________________________________

6. Amount Granted: ___________________________

7. Payment Method: ___________________________

8. Signed by Grant Approval Committee

1. ____________________________ 2. _____________________
3. ____________________________
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18.0 Appendices

The following pages contain the Appendices to the Islamic Relief Financial
Guidelines as listed below:

• Appendix A1 – Cheque Register

• Appendix A2 – Cash Payment Register

• Appendix B1 – Bank Accounts List

• Appendix B2 – Expenditure Approval Limit

• Appendix B3 – Transfer Request Form

• Appendix B4 – Purchase Request

• Appendix B5 – Supplier’s Details

• Appendix B6 – Bid Evaluation Form

• Appendix B7 – Purchase Order

• Appendix B8 – Goods Received Note

• Appendix B9 – Bank Payment Voucher

• Appendix B10 – Cash Payment Voucher

• Appendix B11 – Payment Check List

• Appendix B12 – Bank Receipt Voucher

• Appendix B13 – Cash Receipt Voucher

• Appendix B14 – Cash Receipt

• Appendix B15 – In Kind Donations Form

• Appendix B16 – Safe Replenishment Form

• Appendix B17 – Petty Cash Payment Voucher

• Appendix B18 – Petty Cash Float Replenishment Form

• Appendix B19 – Safe Cash Count & Reconciliation

• Appendix B20 – Cash Advance Request
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• Appendix B21 – Staff Expenses Claim Form

• Appendix B22 – IOU’ Form

• Appendix B23 – Cash Handover Form

• Appendix B24 – Asset Handover Form

• Appendix B25 – Stock Request Form

• Appendix B26 – Bin Card

• Appendix B27 – Travel Request Form

• Appendix B28 – Travel Log

• Appendix B29 – Registration Form

• Appendix 30 – Aid Distribution Form

• Appendix 31 – Camp Aid Distribution Form

Cheque Register
Date
Appendix A1
Type Chq. Num Date Name Account Paid Amount


TOTAL


TOTAL


TOTAL


TOTAL


TOTAL


TOTAL


TOTAL


TOTAL


TOTAL


TOTAL


TOTAL
Cash Payment Register
Appendix A2
Type Chq. Num Date Name Account Paid Amount
BANK ACCOUNTS LIST Appendix B1
ISLAMIC RELIEF <BRANCH>
No. Acronym Bank Currency Account Number
Type of
Account Address Manager Contact Person Signatories Remarks
1
2
3
4
Position Position
EXPENDITURE APPROVAL LIMIT Appendix B2
ISLAMIC RELIEF <BRANCH>
Category Expenditure Limit
Approval Required for Country
Office
Approval Required for
Regional and Sub Offices
Exceptions during
Emergencies
Requirements
1 0< range <max limit
Department Manager and Admin
Officer
Project Coordinator, Admin
Officer and Finance Officer
Project Coordinator and
Finance Officer
none
2 min limit1 <range< max limit1
Department Manager, Finance
Manager and Country Director
Project Coordinator, Admin
Officer and Finance Manager (ie.
FM at Country Office)
Project Coordinator and
Finance Manager (ie. FM at
Country Office)
Three Quotations
3 min limit2 <range< max limit2 Purchase Committee*
Purchase Committee at Country
Office
Project Manager, Finance
Manager and Country
Director
Three Quotations
4 min limit3 and above EXCOM at IRHQ EXCOM at IRHQ EXCOM at IRHQ Three Quotations
* Note: Members of the Purchase Committee are:
1) A person who has technical knowledge about the product.
2) The requesting department manager
3) Programme Manager
4) Finance Manager
5) CD
TRANSFER REQUEST FORM Appendix B3
ISLAMIC RELIEF <BRANCH>
Currency: Date:
Comments:
No. Project PIN Project Name Budget
Previously
Trasferred
Transfer
Request Balance
Percentage left
COMMENTS
Prepared by
Position
(Date: ) (Date: ) (Date: )
Approved by
Position
TOTAL
Checked / Controlled by
Position

PURCHASE REQUEST Appendix B4
ISLAMIC RELIEF <BRANCH>
Applied by:
Department
Project
No. Est. Unit Price Qty Total
0.00
0.00
Prepared by Checked / Controlled by Approved by
Position
(Date: ) (Date: ) (Date: )
Quickbooks transaction No.
Sub Total
Date:
Request No.: PR
Purpose
Description Budget Code
ONLY ONE PROJECT PER SHEET Tax
Total
Applicant Signature
Delivery Address
Budget Managers Certification
Position Position
DATED : DATED :
DATED : DATED :
SUPPLIER'S DETAILS Appendix B5
ISLAMIC RELIEF <BRANCH>
Name of Business
Registration Number
Address
Town/City
Region/Postcode
Contact Person
Contact Telephone No.
Contact Fax No.
Contact E Mail
Bank Name & Address
Bank Account No.
Type of Business
Type of
Product/Service
BID EVALUATION FORM Appendix B6
ISLAMIC RELIEF <BRANCH>
No. Qty Unit Price Total Unit Price Total Unit Price Total Unit Price Total Unit Price Total
Purchase Committee Decision:
The Selected Supplier is
Reason for Selection: 1) _________________________________________________________________________________________________________________________________
2) _________________________________________________________________________________________________________________________________
3) _________________________________________________________________________________________________________________________________
4) _________________________________________________________________________________________________________________________________
Approval by Purchase Committee Members:
(Name: ) (Name: ) (Name: ) (Name: ) (Name: )
(Post: ) (Post: ) (Post: ) (Post: ) (Post: )
(Date: ) (Date: ) (Date: ) (Date: ) (Date: )
Description
Total
Sub Total
Prospective Supplier Supplier A Supplier B
Tax
Sub Total
Tax
Total
Supplier C
Sub Total
Tax
Total
Tax
Total
Supplier D
Sub Total
Tax
Total
PR PR REFERENCE:
Supplier E
Sub Total

PURCHASE ORDER Appendix B7
ISLAMIC RELIEF <BRANCH>
Applied by:
Department
Project
No. Unit Price Qty Total
0.00
0.00
Prepared by Checked / Controlled by Approved by
(Date: ) (Date: ) (Date: )
Quickbooks transaction No.
ONLY ONE PROJECT PER SHEET
Supplier Address
Description
Suppliers Invoice No. Suppliers Name
Delivery Address
Budget Code
Tax
Total
Sub Total
Purchase Ledger Checked
Date:
Budget Managers Certification
Order No.:
Position Position Position
DATED :

GOODS RECEIVED NOTE Appendix B8
ISLAMIC RELIEF <BRANCH>
PO Reference
Date Received:
Vehicle No.:
GRN No.:
No. Unit of Measure Qty
Good Delivered by
(Name: )
(Date: ) (Date: )
Received by;
(Driver) (Storekeeper)
REMARKS
Description

BANK PAYMENT VOUCHER Appendix B9
ISLAMIC RELIEF <BRANCH>
Date:
Currency: Voucher No.:
No. Reference Amount Project Account Code
Quickbooks transaction No.
Prepared by Checked / Controlled by Approved by
(Date: ) (Date: ) (Date: )
Position Position Position
Dated
BPV
Payent received by.
Mode of Payment Bank Account
□ Bank Account 1
□ Bank Account 3
Recipient Bank Account
□ Bank Account 2
□ Bank Account 4
PAYMENT MADE TO:
□ Others: ____________________
□ Cheque (No.: _______________)
□ Bank TFR (Ref.: _________________)
□ DD (Ref.: ____________________)
DETAILS OF PAYMENT
Description

CASH PAYMENT VOUCHER Appendix B10
ISLAMIC RELIEF <BRANCH>
Date:
Currency: Voucher No.:
No. Reference Amount Project Account Code
Quickbooks transaction No.
Prepared by Checked / Controlled by Approved by
(Date: ) (Date: ) (Date: )
Position Position Position
Payent received by.
Dated
CPV
DETAILS OF PAYMENT
PAYMENT MADE TO:
Description
Islamic Relief Appendix B11
BPV:………………………
Payment Check list (internal control document)
Please tick accordingly, if documents are present
1 Purchase requisition
2 Quotations
3 Bid evaluation analysis
4 Purchase order
5 Goods received Note
6 Invoice
7 Payment Voucher
Comments if documents missing or otherwise
Category 1 : Approval required by Department manager and Admin office
- Limits (to be set) only 1,4,5,6,7 of these documents needed
Category 2 : Department manager, Finance manager and country Director -
Three quotations neccesary - Limits to be set
Category3 : Purchase committee(see expenditure approval more details)
Three quotations neccesary - Limits to be set
Category4: ExCOM at IRHQ
Category4 List of documents to be prepared Category 1 Category2 category3

BANK RECEIPT VOUCHER Appendix B12
ISLAMIC RELIEF
Date:
Voucher No.:
rate
Amount
1

2
3
Others
Prepared by Checked / Controlled by Approved by
(Date: ) (Date: ) (Date: )
Quick Books Transaction No.
Position Position Position
Currency transferred
Currency received or
equallant local currency
BANK NAME
Received From:
BRV
Project Name and ID
Total Amount Received
Received for
CHEQUE NUMBER
CASH RECEIPT VOUCHER Appendix B13
Date:
Currency: Voucher No.:
RECEIVED FROM
No. Reference Amount Project Account Code
Quickbooks transaction No.
Prepared by Checked / Controlled by Approved by
Position
(Date: ) (Date: ) (Date: )
CRV
RECEIPT DETAIL
Description
Position Position

CASH RECEIPT Appendix B14
ISLAMIC RELIEF <BRANCH>
Date:
Currency: Voucher No.:
Received by; Handed by; Verified by;
(Date: ) (Date: ) (Date: )
CASH RECEIPT
ISLAMIC RELIEF <BRANCH>
Date:
Currency: Voucher No.:
Received by; Handed by; Verified by;
CRV
Total Amount Received:
Received with thanks from
Quickbooks transaction No.
Total Amount Received:
Quickbooks transaction No.
CRV
Position
Position Position Position
Received For
Received with thanks from
Received For
Position Position
IN KIND DONATIONS FORM Appendix B15
ISLAMIC RELIEF <BRANCH>
Donor ID Date
Donor's Name Reference IKD
Sending Address Donor Doc. Ref.
GRN Ref.
Receiving Address
Type of Donation
Restrictions
No. Unit of Measure Qty
Estimated
Market
Value
Prepared by Checked / Controlled by Approved by
(Date: ) (Date: ) (Date: )
food supplies/medicines/clothes/etc.
Description REMARKS
Confirmation of In Kind Donation
(Donor Representative - name, sign & dated)
Confirmation of Receipt of In Kind Donation
(IR Programme Manager/Coordinator - sign & dated)
Position Position Position
SAFE REPLENISHMENT FORM Appendix B16
ISLAMIC RELIEF <BRANCH>
Date
Reference STFR
Currency
ONLY ONE CURRENCY PER SHEET
Date Amount Budget Balance
Prepared by Checked / Controlled by
(Date: ) (Date: )
Approved by
(Date: )
Details
Safe Opening Balance
Monthly/weekly Cash Requirement
Safe Closing Balance
TOTAL
Position Position
Position

PETTY CASH PAYMENT VOUCHER Appendix B17
ISLAMIC RELIEF <BRANCH>
Date:
Currency: Voucher No.:
No. Reference Amount Project Code Account Code
Prepared by Checked / Controlled by Approved by
(Date: ) (Date: ) (Date: )
Quickbooks transaction No.
PCV
PAYMENT MADE TO:
DETAILS OF PAYMENT
Description
Position Position Position
PETTY CASH FLOAT REPLENISHMENT FORM
ISLAMIC RELIEF <BRANCH> Appendix B18
Date
Week No.
Currency
No. Denominator Quantity Total
1 x
2 x
3 x
4 x
5 x
6 x
7 x
Note: The petty cash must be counted on the same date
as the date of this document.
Prepared by Checked / Controlled by
(Date: ) (Date: )
Approved by
(Date: )
TOTAL PETTY CASH BALANCE
FLOAT LEVEL
AMOUNT OF TOP UP REQUESTED
Position
Position Position
SAFE CASH COUNT & RECONCILIATION
ISLAMIC RELIEF <BRANCH> Appendix B19
No. Denominator Quantity Total
Date
1 x
Week N
2 x
Currency
3 x
4 x
*Note: The Balance of Cash
5 x
in Safe Counted and the Balance in
6 x
Cashbook must be based on the
7 x
same date as the date of this
document.
0
Prepared by Checked / Controlled by Approved by
Position
(Date: ) (Date: ) (Date: )
REMARKS
5. _______________________________
6. _______________________________
7. _______________________________
DIFFERENCE AFTER RECONCILIATION
1. _______________________________
2. _______________________________
3. _______________________________
4. _______________________________
TOTAL CASH IN SAFE*
CASH BOOK BALANCE*
DIFFERENCE
RECONCILIATION:
Position Position

CASH ADVANCE REQUEST Appendix B20
ISLAMIC RELIEF <BRANCH>
Applied by:
Department
Project
Position
No. Amount Project Account Code
ADVANCE SETTLEMENT:
Quickbooks transaction No.
No. Amount Project Account Code
Prepared by Checked / Controlled by Approved by
Position
(Date: ) (Date: ) (Date: )
Note: Please ensure that you have the relevant supporting documents before such as applying for the advance such as Travel Request Form
for travel advances and Purchase Requisition/Order for purchases.
AMOUNT RETURNED
BALANCE OWED TO IR/STAFF
Date:
Advance No.: CAV
DETAILS OF ADVANCE
Amount Requested:
Advance requested by
Position
TOTAL EXPENSED
Description
Approved by
Position Position
DETAILS OF EXPENSES
Description
TOTAL REQUESTED
Purpose of Advance
Currency:
STAFF EXPENSES CLAIM FORM
Appendix B21
ISLAMIC RELIEF <BRANCH>
Date:
Currency: Claim No.
Applied by: Applicant Signature
Department
Budget Managers Certification
Payment Method:
(please tick) Cash Cheque BACS
No. Reference Amount Project Account Code
Quickbooks transaction No.
Prepared by Checked / Controlled by Approved by
(Date: ) (Date: ) (Date: )
Position Position Position
SE
DETAILS OF PAYMENT
Description
DATED : DATED :
DATED : DATED :

IOU' FORM Appendix B22
ISLAMIC RELIEF <BRANCH>
Applied by:
Department
Cash Received by; Paid by Approved by;
IOU SETTLEMENT:
Quickbooks transaction No.
Receipt & cash Received by; Control / checked by
(Date: ) (Date: )
AMOUNT REQUESTED
Purpose of IOU
AMOUNT TAKEN
Date:
IOU No.: IOU
IOU Requested / prepared by
Position Position Position
Position Position
AMOUNT RETURNED TO IR/(REFUNDED TO STAFF)
AMOUNT SPENT
CASH HANDOVER FORM Appendix B23
ISLAMIC RELIEF <BRANCH>
The following cash has been handed over to:
Staff Name: Department:
Position:
No. Denominator Quantity Total
1 x
2 x
3 x
4 x
5 x
6 x
7 x
Cash Received by; Paid by
Position
(Date: ) (Date: )
Approved by;
(Date: )
Position
TOTAL HANDED OVER
Date:
Ref.:
Position
ASSET HANDOVER FORM Appendix B24
ISLAMIC RELIEF <BRANCH>
Name_________________ Designation________________________
Project________________ Location___________________________
I am handing over the following assets of Islamic Relief on the approval of the competent authority to the following persons
Date Asset Code Asset Name Handed over To: Signature of Receiver
Prepared by Checked / Controlled by
Position
(Date: ) (Date: )
Approved by
(Date: )
Position
Position

STOCK REQUEST FORM Appendix B25
ISLAMIC RELIEF <BRANCH>
Date:
Reference:
Applied by:
Budget Code
Purpose:
No. Code Qty Requested Qty Despatched
Authorised by; Received by;
Handed over by: Received by:
Date Date (Name: ) (Name: )
(ID: ) (ID: )
(Date: ) (Date: )
Project Coordinator Certification
Description COMMENTS
Department
AID HANDOVER
SR
(Storekeeper) (Recipient)
Project
Store ID
DATE :
Store Location
Item name Item Code
Unit Max Min
Item Description:
No.
ISLAMIC RELIEF <BRANCH>
BIN CARD
Date Note #
Quantity
Received
Quantity
issued
Balance Checked by;
TRAVEL REQUEST FORM Appendix B27
ISLAMIC RELIEF <BRANCH>
Date of Start:…………………………………….Date of arrival :…………………………………..Date return:………………………..
Mode of travel :………………………………………………………….
SL Staff Name Designation Current station Destination Duration Purpose
1
Prepared by Checked / Controlled by Approved by
Position Position
(Date: ) (Date: ) (Date: )
2
3
4
Position
TRAVEL LOG FOR JANUARY 2005
Appendix B28
ISLAMIC RELIEF <BRANCH>
Travel
Ref.
Request
ed by Participants Project Purpose of Travel
Mode of
Transport
Stock Req.
Ref.
Cash Adv.
Ref.
Date& Time
Depart
Date & Time
Return Approval Comments
Prepared by Verified by
REGISTRATION SHEET Appendix B29
CAMP:
LOCATION:
Date :
Reg# Name of House Hold Origin Arrival
Date
M F T <5 5-18 19-59 ≥60
0001 0
0002 0
0003 0
0004 0
0005 0
0006 0
0007 0
0008 0
0009 0
0010 0
0011 0
0012 0
0013 0
0014 0
0015 0
0016 0
0017 0
0018 0
0019 0
0020 0
0021 0
0022 0
0023 0
0024 0
0025 0
0026 0
0027 0
0028 0
0 0 0 0 0 0 0
SC = Separat ed children UE= Unaccompanied elder page 1
UM= Un- accompanied Minors FH= Female Headed
Plot
No.
Registering Clerk: Camp Supervisor:
HH Size HH age group Vulnerability & Remarks
TOTAL
AID DISTRIBUTION FORM DATE
PROJECT
ISLAMIC RELIEF <BRANCH>
LOCATION
Distributed by:
Unit of Measure
Type of Items
Distributed
No. Name Quantity Recipient Signature Comment
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
CAMP AID DISTRIBUTION SHEET Appendix B31
CAMP: Time
LOCATION:
Reg# Name of House Hold Recipient
M F T <5 5-18 19-59 ≥60 Quantity Signature
0001 0
0002 0
0003 0
0004 0
0005 0
0006 0
0007 0
0008 0
0009 0
0010 0
0011 0
0012 0
0013 0
0014 0
0015 0
0016 0
0017 0
0018 0
0019 0
0020 0
0021 0
0022 0
0023 0
0024 0
0025 0
0026 0
0027 0
0028 0
0 0 0 0 0 0 0
HH Size HH age group Remarks
TOTAL
Type of Items
Distributed
Plot
No.
Distributed by:
Di st r i but i on Dat e
Unit of Measure

Islamic Relief Financial Guidelines
FOREWORD........................................................................................................... 4 1.0 General Framework .......................................................................................... 5 I. Introduction ......................................................................................................... 5 II. Background to the Financial Guidelines ........................................................... 5 III. Rules governing finance.................................................................................... 6 IV. Islamic Relief Worldwide Family ..................................................................... 7 2.0 Financial Controls ............................................................................................. 8 I. External Audit...................................................................................................... 8 II. Reporting ............................................................................................................ 8 III. Elements of Financial Control.......................................................................... 9 3.0 Financial Reporting......................................................................................... 11 I. Timing of Reports .............................................................................................. 11 II. Procedures ........................................................................................................ 11 III. Formats ........................................................................................................... 12 IV. Reporting Currency ........................................................................................ 12 V. Responsibility.................................................................................................... 12 VI Year End Reporting......................................................................................... 12 4.0 Budget Guidelines............................................................................................ 14 I. Proactive Planning ............................................................................................. 14 II. A budget............................................................................................................ 14 III. Preparing a Budget ......................................................................................... 14 VI. Strategic Budgeting......................................................................................... 17 V. Approval Process .............................................................................................. 18 VI. Budget Holders................................................................................................ 18 VII. Monitoring ..................................................................................................... 18 VIII. Post Budget Adjustments............................................................................. 19 5.0 Cash and Bank Guidelines .............................................................................. 20 I. Opening of Bank Accounts ................................................................................ 20 II. Closing of Bank Accounts ................................................................................ 20 III. Banking Cash and Cheques............................................................................ 21 IV. Withdrawal of Funds ...................................................................................... 21 V. Authorised Signatories ..................................................................................... 22 VI. Disbursement of Funds: Segregation of Duties .............................................. 22 VII. Depository of Funds: Segregation of Duties ................................................. 23 VIII. General Ledger Controls ............................................................................. 24 IX. Disbursements of Funds: Approvals .............................................................. 24 X. Petty Cash ......................................................................................................... 25 XI. Petty Cash Disbursements .............................................................................. 25 XII. Petty Cash Reimbursements ......................................................................... 25 XIII. Internal Control Procedures........................................................................ 26 XIV. Physical Security .......................................................................................... 26 6.0 Guidance to Islamic Relief Signatories ........................................................... 27 I. Information to be checked ................................................................................. 28 7.0 Procurement Guidelines.................................................................................. 29 I. Purchase Orders ................................................................................................ 29
Version 2 Updated November 2005 Prepared by IRW Finance 1

II. Purchasing Requirements ................................................................................ 29 III. Approval Levels .............................................................................................. 30 IV. Placement of Orders........................................................................................ 30 V. Receipt and Acceptance.................................................................................... 31 8.0 Tendering Guidelines ...................................................................................... 32 I. Tendering Instructions ...................................................................................... 32 II. Conditions for the Tender ................................................................................ 32 III. Tendering Committee ..................................................................................... 32 IV. Tendering Procedures..................................................................................... 33 9.0 Accounts Payable............................................................................................. 34 I. Payment Process: Segregation of Duties ........................................................... 34 II. Accounts Payable Process: Segregation of Duties ........................................... 34 III. Accounts Payable Process: Internal Control Procedures.............................. 35 IV. Documentation ................................................................................................ 35 V. Accounts Payable Processes ............................................................................. 36 VI. Accounts Payable Processes: Payments ......................................................... 37 VII. Accounts Payable Processes: Accounting ..................................................... 37 VIII. Accrued Expenses ........................................................................................ 38 IX. Prepayments .................................................................................................... 38 X. Accounts Payable: Expenditure Categorisation .............................................. 39 General Expenditure Categorisation ........................................................ 39 • Fundraising Expenditure Categorisation ................................................. 40 • Project Costs Expenditure Categorisation................................................ 40 • XI. Travel Allowances and Advances ................................................................... 40 XII. Reimbursements ............................................................................................ 41 I Account reconciliations defined.......................................................................... 42 II. Responsibility ................................................................................................... 42 III. Development and review processes ................................................................ 42 11.0 Inter-company Transactions ......................................................................... 44 Principles of Inter-company Accounting.............................................................. 44 General Procedures............................................................................................... 44 Inter-company Dispute Resolution ....................................................................... 44 12.0 Income Management ..................................................................................... 46 I. Receipts of Income Controls.............................................................................. 46 II. Donations .......................................................................................................... 46 Donations by Post or in person at the Offices ...................................................... 46 Donations by Credit Cards ................................................................................... 47 Donations via Collections ...................................................................................... 47 III. Reconciliations ................................................................................................ 48 IV. Tax Rebates ..................................................................................................... 48 V. Other Sources of Income .................................................................................. 49 Sale of Donated Goods .......................................................................................... 49 Goods Purchased for Resale ................................................................................. 50 VI. Income In-Kind ............................................................................................... 50 Valuation of In Kind ............................................................................................. 50 Documentation ...................................................................................................... 51 13.0 Fixed Assets Management ............................................................................. 53 I. Acquisition and Capitalisation .......................................................................... 53 II. Depreciation...................................................................................................... 53 III. Transfers ......................................................................................................... 54
Version 2 Updated November 2005 Prepared by IRW Finance 2

83 Islamic Relief Grant Application Form ................... 81 III....................................................................................................................... Employees ... Financial procedure with Islamic Relief partners ........................... 59 II................ 61 VI............... Filing System ................................................................................................................................................................................................... 82 IV...... Emergency Aid Distribution .................... 75 XVI............................................................................... 56 Accounting Records . 57 III...................................................................................... Overview............. Financial and Physical Control ............IV.. 72 XI..................................................................................... Stock not on Islamic Relief premises................................. Retirements and Disposals ................................................................... Emergency Supplies are needed urgently................................................................................ 57 II..................................................... 58 IV......... 55 VI........................................................................... 54 V...................... Recording of In-Kind Donations ....................................................... 63 III. 57 I................................ 60 IV............................ 92 Version 2 Updated November 2005 Prepared by IRW Finance 3 ...................................... 69 IX...................................... 63 II.................................... Reports ......Organisations.............. Proper identification of inventory ownership ................. 56 • VII......... Project Control ...................................... 74 XIV............ 81 II............................................... 87 Grant Application Assessment – Internal Use Only .... 67 VIII............................................ Documentation..................... 65 VI...................... 60 V..................................................... Introduction .......................... Year end Closing 31/12 (after Q4 report to Head Quarters)..................................................... Organisational structure................................ Expensed Assets ................ The Structure of Finance Department ..................... Annual physical Stock Count.. 64 IV.......... Financial procedures and forms ........................................................................................................................................................................................................................................................................................................................................................................................................................ Stock Control..... 56 14.................................... 74 XV......................... Financial Control........ Payments & transfers..........................................0 Appendices ................................................................................. Approvals/Documentation .................... 61 VIII........................................................... 61 VII.................. 62 16................................................ 91 18............................................................................ Conclusion ............................................................................... 81 I...................................... Procedure................................................................ 60 III................................................................................................................... 56 • Approvals . Introduction ........ Stock Issue for Emergencies .................. Transportation of Cash to the Field............................................................................... 58 V................................................ 73 XIII....................................... Transparency & Fairness ........................................................................................................................ Minimum Documentation........ 63 I...............................................0 Islamic Relief Policy on Grants ............................................................. 76 XVII..............0 Field Office specific....... Stock Valuation.... 65 V.............. Reconciliation of physical and perpetual records...............................................0 Stock Guidelines ............................................................ ... 58 15..................................................................... 56 • Institutional Donor Assets ...................0 Exceptions to Financial Guidelines in responding to a EmergencyHumanitarian Disaster.................................. 59 I.......................... 79 17.................. Handling Cash...........................................

Islamic Relief may deliver the best charitable work in the world. With the whole sphere of charitable work coming under increasingly stringent scrutiny. especially financial. javed_akhtar@islamic-relief. to ensure the organisation is operating both efficiently and lawfully to meet its objectives. from initial operations in new locations to the time they are terminated. but could pose a threat to the continued existence of Islamic Relief per se. Further. whether it be opening a new bank account or keeping some petty cash. or to inform the relevant parties in any doubtful events where financial queries arise and have not been addressed. Virtually every transaction entered by Islamic Relief has a financial dimension. it provides appropriate procedures and controls when having to pact with them. it is essential that clear guidelines are instituted and adhered to. Haroun Atallah General Manager Islamic Relief Worldwide Headquarters Please forward your suggestions to: IRW Finance Islamic Relief Worldwide Headquarters Email your suggestions to Javed Akhtar. Failure to comply with prescribed guidelines results in a high propensity to the emergence of chaotic situations. the organisation will have failed to provide the necessary verification to confirm operations have been carried out. all Islamic Relief’s staff are strongly encouraged to provide feedback regarding any issues covered within this document. rules will need to be adhered to govern all financial transactions. but without the production and maintenance of accurate records.uk Version 2 Updated November 2005 Prepared by IRW Finance 4 . This will not only adversely affect management decisions. Finally. It is absolutely imperative. whereby managers’ may loose control of their financial responsibilities and consequently fail to produce accurate accounts and records. where specific financial issues require attention.FOREWORD This document gives guidance to all Islamic Relief’s staff allied with financial issues which affect the organisation on a day to day basis.org.

field work. Further. Further. as this is critical for reasons such as verification as well as reporting back to management and major donors. Therefore a good system should provide a reliable source of information. all Islamic Relief Offices and Partners should have documented procedures (desk-top procedures) pertaining to the processes used which. Version 2 Updated November 2005 Prepared by IRW Finance 5 . working to alleviate the suffering of the world’s poorest people. whether it be: fundraising. It is important for managers to be familiar with what to expect when examining the budgets and accounts. management or coordination. Introduction Islamic Relief is an internationally recognised relief and development charity organisation. These financial guidelines however. For this reason Islamic Relief must ensure the finest practice and highest standards are adhered to. which was prepared to ensure the quality and accuracy of recording as well as reporting financial information. when managing and reporting financial transactions. The Accounting/Finance function should maintain a good record keeping. would need to be assured that satisfactory systems of control over transactions are maintained with regulatory requirements in mind. to base timely modifications to the original plans with minimum interference. Background to the Financial Guidelines The reliable system of financial management provides a sound basis for planning ahead as well as utilising resources in the best possible manner.1. regardless of any operations one may be engaged in. as well as simultaneously understand the underlying principles of good accounting practices.0 General Framework I. inadequate financial management can seriously undermine potential achievements. II. Conversely. major donors would also want to be assured that their donations are accurately administered and allocated. were set to provide guidance to the principles and to operate in accordance with all Islamic Relief Offices and Partners local regulatory requirements. when managing and reporting the financial resources of Islamic Relief by all Islamic Relief Offices and Islamic Relief Partners. with purposes consistent with their reasons for giving. The Management of each Islamic Relief Offices and Partners must ensure the financial reporting team members are knowledgeable about the financial guidelines. The efficient financial administration contributes significantly to the smooth running and successful outcome of relief and development programmes. Auditors on the other hand. The Financial Guidelines form the general framework. must comply with the Islamic Relief Financial Guidelines provided local laws and regulations permit. The Financial Guidelines are applicable to all Islamic Relief Offices and Partners.

wherever it operates. The highest professional accounting practice is recommended throughout the organisation. • records show all monies received and expended. This will have a direct and positive impact on the credibility of Islamic Relief and will therefore play a pivotal role in protecting the organisation. the responsibility of implementing the guidelines rests with management in each location. Version 2 Updated November 2005 Prepared by IRW Finance 6 . However. It is the responsibility of management in each country to ensure that local laws and regulations are complied with. • accurate accounts can be prepared from appropriately maintained records. will inspect and examine the level of compliance with the guidelines at every practice. which carries the name and logo of the organisation. The management at headquarters on the other hand. In general these rules when related to financial matters will be devised to ensure: • the ability to disclose (with reasonable accuracy) the financial position of Islamic Relief at any time. These set out the objectives of the organisation as: “The relief of poverty in any part of the world”. Rules governing finance The basic governing rules for Islamic Relief Worldwide are enclosed in Articles and Memorandum of Association. Compliance with the financial policies set out in this manual would help enable the organisation to achieve standardisation of reports and operations. • the records provide a register of all assets and liabilities. [Memorandum of Association (3)] Islamic Relief is committed to strict compliance.III. with all legally prescribed regulations governing charitable work and charitable organisations. In order to ensure compliance and suitably qualified auditors. one must externally audit all operations.

it is important to note that fundraising is carried out wherever it is permissible to do so. However. it should be noted that all references throughout the Financial Guidelines to Islamic Relief family members apply to current and future Islamic Relief family members. Islamic Relief Offices (family members) are within in the following regions/countries as when went into print: Afghanistan Albania Bangladesh Bosnia Egypt Ethiopia Kenya Kosovo Indonesia Version 2 Updated November 2005 Prepared by IRW Finance Sri Lanka Mali Niger Pakistan Palestinian Administered Areas Russian Federation (Chechnya/Ingushetia). Islamic Relief family members engaged in Fundraising activities at the point of time where publication of the Financial Guidelines went to print are stated below. UK. Islamic Relief’s Offices’ (family members) across the world are responsible for managing the emergency and development projects within each respective country. must comply with various legal requirements pertaining to the country. Sudan Yemen 7 . Islamic Relief Worldwide Family Islamic Relief Worldwide Family includes members of the family that undertake fundraising operations within their respective countries. Birmingham. these activities are mainly conducted by the Fundraising Division of IRW. However. Most of the organisation’s relief and development work is carried out in developing countries. although some projects are implemented in developed countries.IV. Islamic Relief Family members engaged in Fundraising Belgium France Germany Holland Italy Mauritius Malaysia South Africa Sweden Switzerland UK USA It is also acknowledged that Fundraising Operations are undertaken in countries where no Islamic Relief Partner exists. These family members are registered operations with their own national borders which.

All Islamic Relief Offices and Partners must therefore submit quarterly reports to Islamic Relief Head Office. II. and ensuring adequate accounting controls are in place which safeguard the assets. They are then required to submit reports to Islamic Relief as well as to enable Islamic Relief to monitor their operations. and submit the required reports to the designated agencies authorised by the state to receive their reports. 2. namely to the IRW Finance department. During the publication of the Financial Guidelines Islamic Relief was operating in the following countries in conjunction with Partner organisations: China India Kenya Jordan Morocco It should be noted that all references throughout the Financial Guidelines to Islamic Relief Offices (family members). at the same time ensures the reliability of financial records. Every Islamic Relief Office and every Islamic Relief Partner is responsible for preparing financial reports. In extreme extraneous circumstances. I. Version 2 Updated November 2005 Prepared by IRW Finance 8 . This is to ensure all funds received are utilised.Islamic Relief takes on development projects where no offices exist in conjunction with partner organisations. the IRW Internal Audit Unit would conduct the audit. apply to current and future Islamic Relief Offices as stated above and to the Islamic Relief Headquarters. Reporting Islamic Relief Partners that are engaged in fundraising operations must comply with the laws of their respective countries operations. whether it is predetermined by local law or not. External Audit All Islamic Relief Offices and Partners are required to conduct an external audit. only for the purpose that Islamic Relief has stated in its objectives. where an external auditor cannot be appointed due to any reason. It is standard practice that all financial reports sent to IRW are subject to a thorough examination.0 Financial Controls Islamic Relief adheres to the responsibility of having to exercise strict financial controls. Partner organisations implementing projects on behalf of Islamic Relief must sign agreements with Islamic Relief.

• Documentation and Accurate Recording All Islamic Relief Offices and Partners should have specific and detailed procedures (desk-top procedures) to ensure all transactions are recorded in the appropriate account as well as the accurate amount. for this acts as a fraud deterrent. This would encompass periodically reviewing expenditure and constantly reviewing actual results compared with the budget. fraud). Elements of Financial Control All Islamic Relief Offices and Partners should have the following financial controls in place: • Authorisation and Approval Written documentation on the authority levels should be maintained. These controls will assist with guarding against the recording of fictitious transactions. • Cash Receipts If Islamic Relief Offices or Islamic Relief Partners receive numerous cash receipts. Authorisation and Approval procedures should be followed in the opening of bank accounts . All Islamic Relief Offices and Partners should ensure timely monthly financial reporting (within 15 days of month end). Whereby Islamic Relief Offices and Partners must ensure all transactions undertaken conform to Islamic Relief’s objectives. recording transactions and maintaining custody of assets. all Islamic Relief Offices and Partners should implement a system that allows for early and effective breach detection. • Computer Security Islamic Relief Offices and Islamic Relief Partners should have sufficient passwords and security controls in place. • Segregation of Duties All Islamic Relief Offices and Islamic Relief Partners should segregate duties of personnel. • Bank Statement Review and Reconciliation Version 2 Updated November 2005 Prepared by IRW Finance 9 . • Reporting To mitigate organisational damage in the event that one or more of the accounting controls breach security (i. This would secure paperless transactions and other sensitive areas of information. Different personnel should be assigned to the responsibilities of authorising transactions.e.refer to Cash & Bank section. • Conflict of Interest and Ethics Statements All Islamic Relief Offices and Islamic Relief Partners should ensure that procurement of goods and services are on an arm’s-length basis.III. several individuals would need to be readily available to handle and count the cash receipts to certify the total.

Version 2 Updated November 2005 Prepared by IRW Finance 10 . with the reconciliation of all bank statements in correspondence (Defined: Monthly).A critical component for Islamic Relief Offices and Partners internal control system should be promptly reviewed.

Reporting Period Date that the Financial Reporting should have been received by IRW Finance 20th April 3 Month Results . The information required.1st January to 30th 20th October September 12 Months Results – 1st January to 31st 20th January December II.1st January to 30th 20th July June 9 Month Results . Procedures All Islamic Relief Offices and Partners should submit a complete financial reporting package. Timing of Reports All Islamic Relief Offices and Partners should ensure their Financial Reporting is submitted to Head Office IRW Finance department in accordance with the following timetable.0 Financial Reporting All Islamic Relief Offices and Islamic Relief Partners are required to provide financial information on a quarterly basis to Islamic Relief Head Office. The entire package is required to be completed for monthly reporting. I.1st January to 31st March 6 Month Results . should be submitted to the Head of Office/Country Director. All Islamic Relief Offices and Islamic Relief Partners should maintain and prepare financial information on a monthly basis which. These schedules are self-explanatory or where explanations are required can be found in report footnotes. for management and statutory reporting requirements. Version 2 Updated November 2005 Prepared by IRW Finance 11 .3. to be provided on a timely basis using a consistent format.

The preferred reporting currency is in Euros. Where Islamic Relief Offices and Partner have various departments and divisions. Schedule Schedule 1 Schedule 2 Schedule 3 Schedule 4 Schedule 5 Schedule 6 Schedule 7 Schedule 8 Schedule 9 Schedule 10 III. It is essential that all Islamic Relief Offices and Islamic Relief Partners adhere to the year end timetable. each divisional manager is responsible for the reporting of each respective division. VI Year End Reporting All Islamic Relief Offices and Partners should ensure copies of their externally audited annual accounts and Management Letters from external auditors are sent to IRW Finance department. Schedule Name Income & Expenditure Reports by Projects Income Raised by Project Fundraising Expenditure Report Core Office Costs Report Trial Balance Bank Reconciliations for each Bank Account Fixed Asset Register Consolidated Income & Expenditure Statement Balance Sheet Cash-flow IV. submit the schedule with an “N/A”. due to the following factors: Version 2 Updated November 2005 Prepared by IRW Finance 12 .If the requested schedule is not applicable or there has been no reportable activity. Reporting Currency All Islamic Relief Offices and Partners should submit reports to IRW Finance in their budgeted currency. Any issues or discrepancies with reports must be accompanied by a written explanation approved by the Country Director/Head of Office. All reports should highlight budgeted and actual figures. Formats All Islamic Relief Offices and Islamic Relief Partners should report using approved formats. V. issue timely and accurate reports’ rests with the Accounts/Finance Manager and Country Director in each of Islamic Relief Offices and Partners. Responsibility The responsibility for ensuring Islamic Relief Offices and Partners.

1. Year End Reporting Period Timetable for year end completion Current year ledger closed and reports finalised by 31st January following year end. The External Audit . External audit to take place in February – March following year end Externally audited accounts to be sent to IRW Finance by 30th April following year end Financial Year end 31st December Version 2 Updated November 2005 Prepared by IRW Finance 13 .Changes in agreed audit time’s results in greater costs. Delays can damage Islamic Relief’s reputation and creditability. The Annual Report needs to be submitted to institutional donors WITHIN 4 MONTHS OF THE YEAR END – APRIL following the year end. 3. 2.

Islamic Relief needs to identify its core budget and all Islamic Relief Offices/Partners should prepare budgets within the given time framework.0 Budget Guidelines I. The budgets should be utilised throughout the period to monitor actual performance against budgeted performance.4. All Islamic Relief Offices. Preparing a Budget 1. Proactive Planning Effective fiscal planning enables Islamic Relief Worldwide and all its Partners/offices to function smoothly and confidently. thus enabling Islamic Relief to make financial decisions and to keep in control of all finances. In light of Islamic Relief Worldwide objectives the goals. plans of project for the forthcoming year. yet not limited to the categories mentioned: • • • • Whether the projects is completed The objectives achieved by the department/office Compare previous years budget to actual figures (Income and Expenditure) Look at staff levels for each department/office 14 Version 2 Updated November 2005 Prepared by IRW Finance . Islamic Relief constantly develops and reviews long-term financial plans in order to increase the volume of its financial resources. Thus. in money terms. This helps to ensure the office/department has sufficient funds to meet their objectives. hence to fulfil its objectives of delivering aid and conducting development projects to help destitute people. It should be noted that all Islamic Relief Offices and Partners budget coincides with the key objectives of Islamic Relief Worldwide. III. departments and Partners are required to produce budgets to ensure effective planning. each Office/Department or Partner should assess how their specific goals fit in with Islamic Relief’s strategic and long-term plan. II. A budget A budget is when an individual from each office/department is working with a plan. 2. Accurately predicting the available resources available enables Islamic Relief to budget and plan realistically. Review all projects and activities the department/office has undertaken during the current year (past 9 months) just ending: When reviewing one must include. rather than having to rely on pure guesswork.

so you should consider the hidden costs associated with staff costs: • • • • • Costs of hiring new staff – advertising new positions Training and support Evaluating your need for additional office space Furniture and equipment needs Volunteer Costs Version 2 Updated November 2005 Prepared by IRW Finance 15 . Take into account imminent changes. insurance or any other areas that may be subject to fluctuations.500 18. Estimate the costs required to achieve the objectives through the size of project. to enable Islamic Relief Offices/ Partners to base their review of current activities on the previous 9 months to ensure the fulfilment of the deadline. 4. These goals and objectives should fit in with Islamic Relief’s strategy and long-term plan. 5. as well as the offices/departments. Staff costs typically account for a large proportion of a departments/offices total expenses. for example tax. Based on the above review. Standard templates should be utilised during the budget preparation phase. seek quotes from various suppliers. and justification on the basis of departments/offices goals and objectives. You must include the following. Consider all resources required by projects/departments/offices. yet not limited to the categories mentioned: • • • • • Staff Materials & Supplies If you considering to purchase equipment etc. the department/office should set new goals and objectives for the coming year. 6. Budget Example Budget Details Project: Development project 1 Period: 1st January 2006 – 31st December 2006 Currency: GBP Description Unit Unit cost Total cost Project manager Person-month 1.000 Notes China Projects All Islamic Relief Offices and Islamic Relief Partners should have documented the reasoning for the estimates of costs. 3.Budgets should be submitted to Islamic Relief Head Office two months in advance to the year end (deadline).

7. Costs incurred centrally in relation to services through which all Islamic Relief offices and Partners benefit. Once the budget has been completed. only if your department/office is an income generator. Euros or US Dollars before the submission to Islamic Relief Headquarters. You must Include the following and yet entitled to add others if need be: • • Fundraising Costs incurred by other offices on behalf of Islamic Relief Partners. yet not limited to the categories mentioned: • • • • • Grants Donations Sale of Fixed Assets Institutional Funding Income In Kind 8. 10. Any variations should be explained adequately. You must include the following. Review the expenditure pattern. Version 2 Updated November 2005 Prepared by IRW Finance 16 . Need to budget for income as well as expenses. It would be the Country Director/Head of Office to be held responsible for submitting the budgets to Islamic Relief Office/ Partners then to Islamic Relief Head Office Finance Department. 11. you would need to undertake a review which should include the following but not limited to: • • • • • The projected figures should be compared with the previous year’s budgets and actual figures. The review should be documented and readily available for review on future IRW Internal Audit visits. All budgets should be prepared in local currency then converted into either: British Sterling (GBP). • • Estimate future income with some degree of accuracy based on past experience and records. Assess whether unforeseen circumstances have been budgeted for. The budget should include In-Kind. Check the logic of all calculations. 9. with the justification to any changes. All Islamic Relief Offices and Islamic Relief Partners should include within their budgets: the expected costs that would originally be incurred by other Islamic Relief Offices. then to be charged out to the relevant Islamic Relief Offices or Partners. Consider the expected income from all sources.

to ensure targets are met. key strategic initiatives. VI. Each Country/Office should prepare a strategic budget. for each department’s budget needs to be considered by the Board of Trustees and Board of Management in the context of Islamic Relief Worldwide. Ensure that the deadline issued is adhered to. The strategic budget information should summarize the income and expenditure that are related to implementing the Islamic Relief/Partner action plans described in the strategic plan over the next three to five years. 1. 3. Strategic budgeting should include a situational analysis of the factors that impact the Islamic Relief Offices/Partners future direction. All of the financial information should represent estimates of what it will take for the Islamic Relief Office/Partner to achieve its aims and objectives. 2.. etc. Example of Aims and Objectives: Aim: To develop an organisational capacity to respond effectively to disasters Objective: Increase capacity to respond to emergencies efficiently and timely where it happens to reduce the suffering of the affected people. Strategic Budgeting Islamic Relief’s vision and mission is clearly stated in its Strategic Plan. performance measures. Version 2 Updated November 2005 Prepared by IRW Finance 17 . The budget will actively be used to monitor against actual income generated and actual expenditure against the projected. The budget should provide projected income and expenditure in relation to what the Islamic Relief Office/department intends to accomplish in view of its goals and objectives. Analysis of the economy. regulatory. the most significant of these factors should be utilised in forming assumptions in projecting the budget for the next three to five years. Islamic Relief Offices/Partners should undertake an analysis of the resources required to meet the performance goals. Included in the Plan are the each country’s/offices Aims. strategies.12. 4. objectives. The strategic budget should be linked to the Aims. 13. Objectives and Key Performance Indicators and Proposed Actions. development/emergency needs. Islamic Relief Offices/Partners should maintain project log-frames that would assist with formulating strategic plans and budgets.

This will enable IRW Finance to undertake and prepare the necessary analysis and related work. Finance Manager. where they would be given the appropriate seniority to control expenditure. within a defined period that allows effective corrective action to take place where necessary (Defined: within 4 weeks of the end of the quarter). The reports should show the actual and/or committed expenditure as well as income to date.V. VI. IRW Finance should ensure regular submissions of the budgetary position reports [that include all Islamic Relief Offices and Islamic Relief Partners] are given to the Board of Management and Board of Trustees. the Budget Holders would have to acquire adequate financial training to ensure necessary skills are accumulated to manage the budgets. before re-submission to the Board of Management and Board of Trustees. VII. Fundraising or Projects Manger for each of Islamic Relief Offices or Partners. 18 • • Version 2 Updated November 2005 Prepared by IRW Finance . thus comparing the variance against the budget Monitoring reports should be made available. Further. Budget Holders All Islamic Relief Offices and Partners should have specified their budget holders. Approval Process All budgets before submission to Islamic Relief Head Office need to be approved by the Budget Approval Committee of each Islamic Relief Office/ Partner. The budget approval committee should comprise of a: Director. A formal review should be undertaken by budget holders. The Budget holder should undertake and document actions to correct significant budget variances. All reductions and amendments stated by either the Board of Management or the Board of Trustees should be implemented immediately while revised budgets should be sent to IRW Finance. The budgets for all Islamic Relief Offices and Partners are approved at two levels namely: by the Board of Management then the Board of Trustees. The budget holders on the other hand. Monitoring • • • All Islamic Relief Offices and Partners should have in place regular reviews and monitoring of actual against budgets. should regularly monitor reports with the relevant Accounts Department or Finance Department of Islamic Relief Offices or Partners.

• Thus. VIII. all Islamic Relief Offices and Partners should ensure all actual quarterly reports are submitted on a timely basis at the end of the quarter (Defined: within 20 days of the Quarter end). Post Budget Adjustments All Islamic Relief Offices/Partners during the budgeted period require amendments to the final budget. Version 2 Updated November 2005 Prepared by IRW Finance 19 . as approved by the Board of Management and Board of Trustees. However you would need to submit a written proposal with justification to why the amendments were conducted which would then be submitted to the Executive Committee.

All requests to open new bank accounts or for changes to the existing bank accounts must therefore be submitted to the IRW Executive Committee. direct debit. II. However. credit card payments etc. 5.” The authorisation for a new bank account becomes effective when the approved form is returned to the Director or. Opening of Bank Accounts The IRW Executive Committee is the only body that is authorised to instruct the opening of bank accounts. BAF’s are only available from the IAU. The BAF should be filled and returned to the IAU. Hence there should be no personal bank accounts to be used in any circumstances. Procedure: 1. the IRW Executive Committee may delegate this authority to the IRW Board of Management. where all depository and disbursements transactions should be undertaken through these accounts. using the “Bank Authorisation form. The BAF will then be sent back to the requesting office. Failure to follow the procedure outlined will be deemed a disciplinary offence. 4. Version 2 Updated November 2005 Prepared by IRW Finance 20 . Note: the term cheque includes any cheque equivalent such as postal orders. who will then arrange for authorisation by the IRW Executive Committee. All Bank accounts must be in the name of Islamic Relief. I. the head of the Office that it is connected with. the Director or the head of Office concerned responsible for ensuring any bank accounts that become dormant are closed within a reasonable time period (defined as within 2 months of the account last being used). Closing of Bank Accounts All bank accounts that become dormant must be closed. All BAF’s have a unique issue number which is logged out in sequential order by the IRW Internal Audit Unit (IAU). 3.0 Cash and Bank Guidelines The guidelines set out in this section should be used by all Islamic Relief Offices and Partners in accounting to manage Islamic Relief’s cash in all of its forms. Please note for each bank account a different BAF should be filled. which will then proceed to open or close the bank account. 2.5. The Bank Authorisation Form (BAF) will be issued on the basis of a written request by the Director/Head of Office/Finance Manager.

this should be signed by two signatories that are different to the signatories on the cheque. Another individual should accompany the cashier to the Bank in order to cash the cheque. In cases such as withdrawal of funds. Withdrawals of funds should be limited to absolute cases of necessity (defined as petty cash. who may drive the individuals to and from the bank). The individual who does the banking should be independent from the individual who receives the income to demonstrate that a clear segregation of duties exists. Another independent member of staff would need to check the accuracy of the details and sign it to signify that an internal check has been undertaken. Two individuals under all circumstances should undertake all banking of cash/cheques (defined: the two individuals. Cash/cheques should be recorded on a bank paying in slip for banking purposes. Version 2 Updated November 2005 Prepared by IRW Finance 21 . Withdrawal of Funds All payments should be made by cheques. NO payments should be made to suppliers in cash. In the case of paying money directly into a bank account a copy of the paying in slip stamped by the bank must also be retained. the cashier prepares the cheque and attaches the relevant supporting documentation to an “Approval request for withdrawal of funds”. On returning from the bank the cash should be handed to another Finance Officer within the department. IRW Internal Audit should be notified in writing if a closure of a bank account is to be undertaken.Bank reconciliations should be undertaken at the date of closure. IV. who may drive the individuals to and from the bank). who should cross-reference the amount to the cheque withdrawn and the relevant paperwork. III. EXCLUDES a driver. A record should be maintained of all bank transactions undertaken. does NOT include a driver. Two individuals under all circumstances should undertake all withdrawal of funds (defined: the two individuals. A cheque for the withdrawal of cash should not be made out in the name of an individual. Banking Cash and Cheques All cash/cheques received must be banked on a regular basis (defined as within 2 days of receiving the money). and in exceptional circumstances after obtaining approval from the Director). This should be utilised to verify and is in preparation for the bank reconciliations.

funds and resources. 1. This can be directly downloaded and after completion should be passed to the IRW Internal Audit Unit. it is essential there are adequate internal financial and administrative controls over the use of Islamic Relief property. Version 2 Updated November 2005 Prepared by IRW Finance 22 . The ‘Change of Bank Signatory Form’ should be used (refer to the appendices). (Defined: Country Director/Head of Office. All designated signatories should be aware of and be familiar with the Islamic Relief: Cheque Controls. Fundraising/Projects Manager and other senior Managers). Ledger reviewer – reconciles the ledger. further reviews original backup documentation with an authorised signature. For changing signatories on existing bank accounts a BAF should not be used.V. and is in accordance with Islamic Relief policy. Authorised Signatories There must be a minimum of three signatories for any bank account. 3. Disbursement of Funds: Segregation of Duties All Islamic Relief Offices and Partners should ensure that there is segregation of duties at place in all departments and offices. Cheque preparer (manual or automated) – prepares the cheque and the ledger entry. and prepares a report-thus reporting the transactional activity which should be reviewed by a manager. On the contrary where due to exceptional circumstances. thus three signatories are not available. It is the fundamental duty of the designated signatories to protect the property of Islamic Relief in all forms. The IRW Internal Audit Unit will arrange for Executive Committee authorisation. where individuals hold responsibility for the disbursement of funds. In order to discharge this duty. Cheque Request Reviewer – checks that the payment request is for Islamic Relief business purposes. The following duties should be performed by different individuals: Authorised signatories – the persons authorised to sign cheques should be a persons outside the accounts/finance department. No blank cheques should be signed under any circumstances. This will also secures its application for the objects of Islamic Relief. Two signatures or authorisations are required to countersign cheques or send transfers. 2. VI. advice and approval should be sought from IRW Executive Committee.

Monthly reconciliations of the ledger which. 2. A register should be maintained that details all cheques issued. a register should be maintained which details all cash disbursements made. Accounts Payable Officer – mails the cheque directly to the payee. Reconciler – reconciles the bank statement to the general ledger cash account. Cheque Issuer (manual or automated) – ensures cheque is signed and approves the ledger entry. should be reviewed and signed by the Finance Manager on visits to smaller offices. Reconciler – reconciles the bank statement to the general ledger cash account. 5. Smaller Offices Smaller Islamic Relief Offices and Partners should ensure additional checks and controls are in place where complete segregation of duties is not achieved.4. Depository of Funds: Segregation of Duties All Islamic Relief Offices and Partners should where possible (see smaller offices rules below) ensure that there is segregation of duties in place in all departments and offices where individuals are responsible for the depository of funds. Receipts should be issued for all cash received. Receptionist – receives income (donations) and issues receipts. Ledger reviewer – reconciles the ledger. readily available for review by visits from Finance Manager and IRW Internal Audit. should be reviewed and signed off by the Finance Manager. All disbursements should be referenced to the original documentation. 5. and prepares a report-reporting the transactional activity which should be reviewed by a manager. Smaller Offices Smaller Islamic Relief Offices and Partners should ensure additional checks and controls are in place where complete segregation of duties is not possible. 3. Cashier – collects cash. endorses. 6. VII. 1. Version 2 Updated November 2005 Prepared by IRW Finance 23 . For cash disbursement. determines account coding and deposits in bank account or delivers to another cashier for banking. Monthly reconciliations of the ledger which. 6. Invoices should be stamped “PAID”. Smaller Islamic Relief offices and Islamic Relief Partners should maintain and comply with the following. 4. 2. 3. 4. Manager/Supervisor – ensures that all cheques and cash received are deposited and account coded correctly. 1. All the registers and reconciliations should be kept up-to-date at all times. The following rules should apply: 1. issues receipts and keeps records of cheques received. Mail Distributor – opens mail. 2.

Monthly bank reconciliations should be completed. readily available for review by visits from the Finance Manager and IRW Internal Audit. All the registers and reconciliations should be kept up-to-date at all times. A register should be maintained that details all cash and cash equivalents received. General Ledger Controls Any Islamic Relief Offices or Partners that handle cash must maintain the segregation of duties as outlined in the section Segregation of Duties.3. Disbursements of Funds: Approvals Costs incurred can only be paid from the relevant bank account in the form of cheque. Any discrepancies must be disclosed to the Manager and resolved immediately. Smaller offices should utilise a larger administrative or other units to provide the necessary segregation of duties. Regular monthly reconciliations of bank accounts must be performed to ensure all remittances and payments have been deposited / withdrawn into/from Islamic Relief bank accounts. All cash must be securely kept and should agree at all times with records and reconciliations. 5. must be signed off on a monthly basis. 4. Reconciliations must be performed for every bank account regardless of the denomination of currency in which the bank account is held. The cheque must also be supported by original documentation. such as: • • • • • • Payment Request Purchase Request Goods Received Note Bid Evaluation Original Invoices Other original supporting documentation All relevant sections of the payment request should be complete and in accordance with the supporting documentation as stated below: • • • • • Date of the Payment Request (it should be current) The names of the requestor All the approval levels The details of the purchase and the amount The Cheque Number Version 2 Updated November 2005 Prepared by IRW Finance 24 . The bank reconciliations must be reviewed on a monthly basis by the Manager and. IX. VIII. as expected and recorded accordingly to the general ledger.

Petty cash should be kept securely separate from others cash and should be kept in the safe. who is directly responsible for the safeguarding and disbursement of petty cash. should set a specified amount for the petty cash fund. Amount paid Description of goods or services purchased Signature indicating receipt of purchases or services The total receipts plus the cash on hand must equal the specified amount of the petty cash fund at all times.” X.The above aspects should be checked by the signatories for completeness while approval levels should be checked for appropriate authority. XI. the cheque for the reimbursement should be cashed by individuals who are not the cashiers for the fund or an employee who reports to the cashiers. The receipt should contain the following information: • • • • • • Date of purchase or payment Name of supplier or other payee Positive evidence that a payment was made. i. a cash register receipt or at least a handwritten receipt marked “paid”. all cheques should be marked “A/C Payee Only. Petty Cash Disbursements Expenses can only be paid from the petty cash fund for the purpose of which the petty cash fund is set-up. Reconciliations should be performed on a daily basis. and must be supported by receipts. Each Islamic Relief Offices should nominate a Cashier. Version 2 Updated November 2005 Prepared by IRW Finance 25 . Petty Cash Reimbursements Reimbursements should be requested as needed. The Finance Manager of each Office on the other hand. XII. All Cheque payments should be in the name of the supplier where possible. Petty Cash A petty cash fund should be established only when it is demonstrated that a continuing cash advance is kept on hand to permit the purchase of low-value supplies and services.e.

Version 2 Updated November 2005 Prepared by IRW Finance 26 . Reconciliations must be performed for every petty cash fund held. regardless of the denomination of currency in which petty cash is held. Any other funds at all times must be placed in a safe which. A copy of the key should be kept in an alternative secured area. XIV. the loss must be reported to the IRW Internal Audit and local authorities. A surprise cash count of the petty cash fund. the loss must be reported to the IRW Internal Audit and local authorities. In the event of a theft. All cheque books should be kept in a safe which is in an absolute secured area. In the event of a theft. Internal Control Procedures Cash reconciliations should be undertaken on a daily basis. and signed off by the Supervisor on a weekly basis. should be performed on a regular basis by a supervisor or manager.XIII. should be kept in a suitable secured place. where it would be reviewed at least once a week. including a review of the documents. Any major discrepancies disclosed by the cash count should be reported to Internal Audit. Physical Security The petty cash funds must be kept separately in a secure place.

Never rely on Country Director/Head of Office’s signature as proof that everything is primed. and further secure its application from the objects of Islamic Relief. In order to discharge this duty it is essential there are adequate internal financial and administrative controls over the use of Islamic Relief Offices/Partners property. A recommended practice is that each signatory nominates a certain time period during the day to sign cheques and other paperwork. so he can be questioned on the payments being made. seek approval from the Finance Coordinator.0 Guidance to Islamic Relief Signatories Senior and responsible personnel within Islamic Relief Offices/Partners should be selected as signatories for approving and authorising Islamic Relief expenditure. Always request the clarification in inscription. if the issue is of a material nature in your view. until further information and clarification is given. the signatories sign the cheque with the relevant Finance Officer present. Mistakes/oversight is possible by all human-beings and it should be borne in mind that signatures can be forged.6. However. It is of fundamental duty for Islamic Relief signatories to protect the property in all of its forms to Islamic Relief Offices/Partners. • • • • • • • Version 2 Updated November 2005 Prepared by IRW Finance 27 . rather than leaving the folder with cheques in respective pigeon-holes. funds and resources. Do not assume that because cheque and other documentation have been reviewed by the Accounts/Finance department the entire documentation is correct. The Accounts/Finance department are then informed of each signatory with the time period. If in any doubt or any uncertainty regarding any payments do NOT sign regardless of how urgent Finance may inform you the payment is. The most senior signatory should be the ultimate to sign. Thereby. Always be prepared to question and critically review the documentation. Be prepared to question Finance Officers if you are unsure or require a further explanation regarding any payment requested. All Signatories should take the following points into consideration: • • • There is a need to understand and realise that the selected personnel’s signature carries approval. The signatories will be held accountable if ever any issue was to rise.

• I. 6. Does it relate/match the supporting documentation? 8. Check the date of the Payment Request (it should be current) 4. Request for originals to be re-prepared. you ask the Finance Officer to explain the nature of the payment and to which project it relates to and how. 10. 9. Check the Cheque Number against the cheque number stated within the “For Finance Department Use Only” section.• Even if the payment request is not relevant to your area. Check who the request is made by 5. All Cheque payments should be in the name of the supplier where possible and all cheques should be marked “A/C Payee Only. Check the Country Director/Head of Offices approval. do not sign it. Information to be checked 1. approving the request is senior to the requester and has the authority to approve the request. The goods or services should have been received satisfactorily 3. Payment Request has the following documentation attached: o Purchase Request o Original Invoices o Goods Delivery Note o Other original documentation 2. to verify the signed cheque. 7. If any of the paperwork has been corrected by the use of tip-ex – reject it. Version 2 Updated November 2005 Prepared by IRW Finance 28 . Check the details of the purchase and the amount.” • Signing the Cheque When signing the cheque also sign the Payment Request next to the Cheque Number. Check whether the person. Check that payment has been reviewed by Finance and all sections within “For Finance Department Use Only” are complete.

as to the terms and conditions of purchase such as: utilities. competitive pricing. and timely delivery. freight. The purchase order would be submitted to the purchasing department based on Islamic Relief Office/Partner’s needs: • Relief/Aid Materials – based on circumstances prevailing at the time 29 Version 2 Updated November 2005 Prepared by IRW Finance . supplies. with certain notable exceptions. and services. the purchase requests and purchase orders issued. Such purchases shall be made with the appropriate signatory approval by management as indicated at the authority levels. The exceptions are those items that are evidenced by a contract and or agreement. These guidelines apply to the purchase: of goods and services. In addition. Operating Supplies and Other Current Assets. consideration must be placed on the adequacy of quantities. Purchase Orders All Islamic Relief Offices and Islamic Relief Partners should employ the use of a Purchase Request and a Purchase Order system. as a result of reprehensible or untimely purchases and inefficient use of cash as a result of excessive purchases. which are directly charged. These activities should be conducted in a manner which serves Islamic Relief in the best interest at all times. This policy covers all purchase commitments (with or without the use of purchase orders). subscriptions etc.0 Procurement Guidelines All Islamic Relief Offices and Islamic Relief Partners should ensure cost effective materials. Purchasing Requirements Persons requesting a purchase should be determined.e. professional fees and services. Appropriate internal controls shall be utilised to assure and maintain accuracy of: a. Accounts Payable and expense accounts. b. reporting and recording the receipts of goods and services to:• accurately and properly make payments • ensure that the transaction is recorded at the corresponding period II. Islamic Relief Offices and Partners should also avoid the disruption of Islamic Relief’s operations.7. I. the quality and quantity of the goods received. approval of purchases. insurance. and incidental purchases i. supplies. Conference fees. to efficiently and accurately purchase all the goods and services needed by the Islamic Relief. and services are procured by authorised individuals from authorised suppliers. and c. receipts and acceptance of materials. The general ledger accounts impacted by this policy include stock.

Approval Levels All Islamic Relief Offices and Partners should set appropriate authority level. The authority levels should be documented. The table below demonstrates the authority levels set at IRW.000 Tendering Committee £100. Purchases made under contractual arrangements must be authorised in accordance with the approval levels.000 £1. however. Purchases made under contractual arrangements (excluding corporate agreements) that either supplement or used in lieu of a purchase requisition. The Islamic Relief Office/Partner should maintain appropriate purchasing guidelines and approved supplier’s list. III. 30 • • • • • Version 2 Updated November 2005 Prepared by IRW Finance . values should vary according to the local economy in each country. Levels should be similar for all Islamic Relief Offices and Partners.000 Authorised Approval Level Project/Department Manager Director/Head of Division or Director £20. Purchase orders should be prepared with sequential numbers assigned. prior to approval. All original contracts are to be maintained by the Purchasing/Accounting Department.000 and above Tendering Committee (Public Tender) IV. Contracts are to be signed by the Purchasing Department.001 to £100. must be reviewed by the purchasing department for assessment of commercial terms and conditions prior to approval. Copies of all contracts are required to be provided to the respective Financial Controller for assessment as to the appropriate accounting treatment and disclosure requirement.• • Repetitive purchases of certain items. such as stock held Capital Expenditures – based on approved capital projects and requested by the Manager in charge. Sterling Amount Up to £1. to verify that the commercial terms and conditions in the contract have been reviewed and are acceptable.001 to £20. Placement of Orders • • Only Purchasing/Accounting Department personnel should be authorised to issue purchase orders.

V. Receipt and Acceptance • Goods and services received should be verified for accuracy (i. Fixed Asset records should be maintained where appropriate. proper quantity and type of product or service) through the comparison of receiving documentation to approve purchase orders or contracts. and resolved in a timely manner. Goods should be inspected for quality purposes in a timely manner. investigated. Goods and services received should be recorded appropriately to accounting system accurately and in a timely manner. • • • • Version 2 Updated November 2005 Prepared by IRW Finance 31 . Discrepancies between receiving documentation and purchase order or contract should be identified.e.

Tendering Committee Version 2 Updated November 2005 Prepared by IRW Finance 32 . an institutional donor who may have stricter tendering guidelines for institutionally funded projects. II. For example. III. The authority levels should be similar for all Islamic Relief Offices and Partners.001 to £20.0 Tendering Guidelines All Islamic Relief Offices and Partners should set appropriate authority level and documented. Receipts of tenders should be recorded and the package must be kept in secure location unopened until the set time. copies of annual accounts.000 Quotations/Tenders Required None but recommended as good business practice. Tendering Instructions Islamic Relief Offices and Partners should instruct the supplier on how to complete the tender and the information required (namely. Conditions for the Tender All Islamic Relief Offices and Partners should ensure the following: • • • • The independence of each tender The tender should be appropriately addressed to the Islamic Relief Office/Partner The tender should be delivered sealed The tender period should be for a minimum period of 10 days.8.001 and 3 Tenders £100. main customers. Further values should vary according to the local economical conditions prevailing in each country. Sterling Amount Up to £1. £1. alternative proposals. All Islamic Relief Offices and Islamic Relief Partners should adhere and follow the tendering guidelines unless stated otherwise. The table below demonstrates the authority levels set in the United Kingdom. I. bank guarantees) in addition to the tender information itself.000 £100. All Tenders must be sealed and delivered.000 3 Quotations £20.001 and above Open Tenders (Public Tender) • • All quotations must be received on official letterhead paper of the supplier.

All Islamic Relief Offices and Partners should ensure that: • • • the original documentation for tenders is received supporting documentation giving the reason for the choice of supplier Must be retained for at least a period of six years after the end of the financial year in which the contract is completed. NONE of the personnel on the tendering committee should have any affiliation with any of the proposed suppliers. The ‘designated officer’ should bring the envelopes received from the tendering process to the Tender Board tender-review meeting. after the Tendering committee is to commence the selection procedure. The selection of the personnel must be agreed prior to the tendering process. Tendering Procedures The Tendering Committee is to agree upon a budget for advertising the ‘Invitation to Tender’ in addition to the agreement upon the outlets which the ‘Invitation to Tender’ is to be advertised. to a secure address within a specified date. that can advise on the proposed acquisition) from Islamic Relief Offices/Partners. upon which the committee will meet to review the submitted bids/tenders. An approved tender must be accompanied by a clear statement of reasons for the choice made. as agreed by the Tendering Committee. which should also be signed by the ‘chairperson’ of the board. IV.Tenders should be opened by a Tendering committee of three selected personnel (this should include: the Head of Office/Country Director and technically a competent personnel. Version 2 Updated November 2005 Prepared by IRW Finance 33 . The ‘Invitation to Tender’ is to be advertised. Minutes should be taken of all the tendering committee meetings and retained in a file. It is only then when all envelopes are to be unsealed by the designated officer. with clear mention of specifications and other relevant criteria. The advert must also instruct tendering companies to submit their pre-qualification and pricing information separately. This budget must be included in the original budget at the beginning of the year for Islamic Relief Offices/Partners. in sealed envelopes. A date must be set.

4. Accounts Payable Officer – mails the cheque directly to the payee. 6. 5. II. 4.Processes accounts payable invoices. Payment Process: Segregation of Duties All Islamic Relief Offices should ensure where possible (see smaller offices rules below) that the following functions are performed by separate individuals: 1. 2. Cheque Issuer (manual or automated) – has cheque signed and approves the ledger entry. Cheque Request Reviewer – checks that the payment request is for: Islamic Relief business purpose which should be in accordance with Islamic Relief policy. Receiving the ordered supplies/materials. The following duties should be performed by different individuals within the Accounts/Finance department: 1. 3.Updates the supplier/vendor master files. reviews original backup documentation and checks for an authorised signature. services or under the terms of the transaction. Approval of the invoices for payment. All Islamic Relief Offices should also establish written procedures that ensure accurate and timely payment are made to suppliers/vendors. 2. Smaller Offices Smaller Islamic Offices and Partners should ensure additional checks and controls are in place as complete segregation of duties is not possible. The following rules should apply: 1. Version 2 Updated November 2005 Prepared by IRW Finance 34 .0 Accounts Payable All Islamic Relief offices should set-up and manage an Accounts Payable function in order to account and manage Islamic Relief’s expenditure. Accounts Payable Process: Segregation of Duties All Islamic Relief Offices should ensure a segregation of duties is in place within all departments and office. Monthly reconciliations of the ledger which should be reviewed and signed off by the Finance Manager. I. after the determination of the receipt of goods. Processor . Updater . The approval of the purchase request (purchase request).9. Review and reconcile the financial records. 3. where individuals are responsible for the Accounts payable Process. Cheque preparer (manual or automated) – prepares the cheque and the ledger entry.

There should be an active supervisory review of all accounts payable activity. cheque books.2. Documentation Upon receipt of a supplier’s invoice. 3. All registers and reconciliations should be kept up-to-date at all times. changes or deletion to the vendor master file/records. should be voucher-ed prior to payments. hence readily available for review by visits from the Finance Manager and by IRW Internal Audit. All invoices should be reviewed to ensure: Adequate authorisation of the purchase order. Purchase orders should not be processed if incomplete. • • • • • IV. III. For cash payments a register should be maintained that details all cash payments made (Appendix A2). Version 2 Updated November 2005 Prepared by IRW Finance 35 . (Defined: Stamped “PAID”). 4. Any discrepancy should be investigated prior to payment. for example rent. where the invoice should be date stamped and forwarded to the appropriate accounts payable processor. All signature templates. A match between the suppliers invoice. All Islamic Relief Offices should maintain adequate detailed documentation of additions. Pricing is in alignment with the purchase order pricing. original Purchase Order and Packing Slip/Receiving Report should be performed in order to form a voucher package. blank cheques and related equipment should be kept in an absolute secured area. All paid invoices should be adequately marked to prevent reprocessing. the invoice should be placed on hold until matching issues are resolved with the person(s) requesting the invoiced goods or services. All payments should be referenced to the original documentation. These reconciliations should be reviewed by the Supervisor or Manager and should be signed off on a monthly basis. If a match is not possible. Quantities shown shipped or delivered on the invoice are the same as those found on the packing slip and/or receiving report. Cash disbursements for unrecorded liabilities and routine expenses. Accounts Payable Process: Internal Control Procedures • Monthly reconciliations should be performed by the accounts payable sub-ledger to the general ledger. A register should be maintained that details all cheques issued (Appendix A1).

quarterly. and thus supported by original backup documentation. amounts due to suppliers/vendors (Creditors) to ensure: o The expenditure is within the budget o Reporting is conducted effectively • It is essential that the following are maintained within all Accounts Payable functions: o A Contract Register for all recurring services that are billed monthly. All invoices should be checked for the following: o Validity of the Invoice Is the Invoice original? Is the Supplier/Vendor valid? Has the invoice been altered in any way? Has it already been paid? Are the details of the goods/services on the invoice correct? Is the amount correct? • Invoices for payments on contracts should be compared to progress payment schedules and the contract register. Accounts Payable Processes All expenses should be captured to the greatest degree of practicality within the period they are incurred in. • All Islamic Relief Offices should track all expenditures. • • • • The Contract and Purchase order should be utilised for the verification of invoices and progress payments on contracts. annually or on any other basis o Purchase Order Register that tracks: Open purchase orders. Version 2 Updated November 2005 Prepared by IRW Finance 36 . for shipments not yet received Purchase orders shipments received but pending bills Closed purchase orders shipments received. All invoices and bills should be reviewed to ensure they are for Islamic Relief business purposes as well as in accordance with Islamic Relief policy. They should be stamped with the date received.V. A register should be maintained of all invoices and bills received. billed and paid o A Cheque Register that tracks all payments.

posting to the general ledger and scheduling for payment. Monthly reconciliations should be performed by the accounts payable sub-ledger to the general ledger. After payment. A list of personnel identifying individuals that can approve payment requests which. Note that the person requesting payment (raising the payment request) cannot at the same time approve the payment request. All Cheque payments should be in the name of the supplier where possible and all cheques should be marked “A/C Payee Only.VI. should be documented at each location. Similarly approval levels should be checked for appropriate authority. have been approved by the Country Director/Head of Offices. the original invoice with the purchase order and all supporting documentation should be filed appropriately.” VII. Accounts Payable Processes: Accounting • • • • • Purchase Orders/Invoices should be coded to the appropriate general ledger accounts. The most senior signatory should be the last to approve. After: verification. the purchase order and invoice should be stamped as paid. and must be supported by original documentation such as: • • • • Payment Request Purchase Request Original Invoices Other original supporting documentation All relevant sections of the payment request should be complete and agree to the supporting documentation: • • • • • Date of the Payment Request (it should be current) The names of the requestor All the approval levels The details of the purchase and the amount The Cheque Number The above aspects should be checked by the signatories for completeness. These reconciliations should be reviewed by the Supervisor or Manager and should be signed off on a monthly basis. Invoices can only be paid from the relevant bank account in the form of cheque via Bank Automated Cash Service (BACS)/Direct Debit. Even if the general ledger account is indicated on the purchase order it should be verified before posting the invoice. Accounts Payable Processes: Payments All invoices must have the required authorisation before they are processed for payment. 37 Version 2 Updated November 2005 Prepared by IRW Finance .

it should be verified against: purchase orders/requisitions. the following should be considered: • The expense must have been incurred during the month being closed. the product or service must have been received on or before the last day of the month in order to qualify as an expense. contract terms or any other appropriate documents prior to recording liability. In determining what expense is accrued. Types of expense to be accrued include: • • • • • Payroll and Payroll Taxes Rent Utilities Property and Business Taxes Payables and accrued liabilities should be recorded at face value. The payable amount can be determined from the billing received. Prepayments Prepaid expenses represent amounts that have been paid. accrual procedures should be implemented to ensure all expenses related to that month are accurately included in Islamic Relief Offices/ Partner’s accounting records. plus or minus any interest premium or discount and other appropriate adjustments. VIII. Types of these expenses can include: • • • • • Advertising Deposits Insurance Premiums Lease Payments Rent Version 2 Updated November 2005 Prepared by IRW Finance 38 . IX.• Records should be maintained from creditors. Accrued Expenses Accrued expenses represent amounts due for services or benefits that Islamic Relief have received but have not yet been paid. Accrual process should be accomplished in a timely and accurate manner. that is. while accruals should be calculated and posted at the end of the period. When actual values are not available. but the related service or benefit due to Islamic Relief has not yet been received. and must be in compliance with all applicable financial and accounting standards. At the close of each month. Estimates should be based on current market price. recorded value should be based on best available estimates. past history and comparables.

visa. TV adverts. fees and penalties Version 2 Updated November 2005 Prepared by IRW Finance 39 . the Accounting Manager is to determine the portion of the amount paid that is prepaid. consultancy fees Photographs. accommodation. temporary staff expenses. The Accounting Manager should also review schedules of existing prepaid expense amounts for any changes that may alter the amortisation. visa. accommodation. publications Bank charges. X.Recording of Prepaid Expenses The Accounting Manager is responsible for identifying and preparing records of prepaid expense amounts. travel and insurance expenses Accommodation. Information should include: the description of the type of service or benefit. mobile. travel and insurance expenses Professional. For example. Accounts Payable: Expenditure Categorisation Below is general expenditure categorisations for guidance. health cover Volunteer. translator. credit card charges. visa. fax. letterheads. The prepaid expense amounts should then be adequately coded and recorded in the general ledger via a journal entry. all Islamic Relief Offices are expected to maintain records and report according to the reporting format requested by the IRW Finance department. auditors. accommodation. loading/unloading costs Course fees. amortisation amount and any other pertinent information. periodicals & publications Fees. benefit period. taxes. advertising vacancies 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Expenses Salaries Other Labour Related Costs Telecommunications Postage Stationery Distribution costs Training Exhibitions & Conferences Meetings Guests Field Trips Fees Publicity Financial Charges Telephone. Reporting formats may vary over time due to differing and changing requirements of regulatory bodies and donor requirements. legal. • General Expenditure Categorisation Description Staff remuneration and related costs e. Prepaid expense amounts should be properly recorded in a sub-ledger. amount paid. business cards Haulage. travel and insurance expenses Accommodation. travel and insurance expenses Fees. vendor. After properly identifying prepaid amounts.g. if Islamic Relief paid its six month insurance premium in advance. video productions. satellite phone Postage and Courier costs Stationery. visa. the amount recorded as prepaid after the first month would be five/sixths of the premium.

Travel Allowances and Advances All Islamic Relief Offices and Partners should ensure that adequate procedures and controls are in place. breakfast. work related communication or work related travel costs. And o Publicity or information that is provided is an educational manner in furtherance of Islamic Relief’s objective. the authorisation form must be signed by the employee hence the Department Manager. should be entitled to a daily allowance that covers additional expenses they incur due to the situation. The allowance does not cover costs of accommodation. • Project Costs Expenditure Categorisation Projects Expenditure should be categorised directly to the project it relates to. Version 2 Updated November 2005 Prepared by IRW Finance 40 . the employee must complete the Employee Advance form. should be appropriately allocated to the project expenditure. personal correspondence and any other personal expenses. in order to offset expenses subsequently submitted against the issued advances. Where necessary support costs (those that are necessary to deliver the activity). All employees must reimburse other Islamic Relief Offices/Partners for costs incurred on their behalf. before departing the particular Islamic Relief Office/Partner. XI. Travel allowances and advances are given to employees on a required basis with management approval. after they return from travelling. Additional expenses will not be reimbursed until the cash advance has been repaid if expenses totalled less than the advance. The daily allowance is to cover costs of food. for the purpose of issuing travel allowances and advances. Islamic Relief Offices and Partners whose employees are required to travel and stay overnight away from their homes. All Islamic Relief offices and Partners should set the appropriate level of daily allowance subject to appropriate approval. Travel allowances and advances must be issued and entered into the accounting system by Accounts Payable staff. In order to be processed.• Fundraising Expenditure Categorisation For Fundraising Expenditure a distinction would need to be drawn in categorising the expenditure between: o Publicity or information costs involved in raising the profile of Islamic Relief which is associated with fundraising. however. The allowance in place in United Kingdom is £20 (US $ 30). Employees that are granted an advance amount must be supported by expense receipts on an employee’s expense reimbursement form.

requests for reimbursement by Islamic Relief expenses incurred by employees. Reimbursements All Islamic Relief Offices and Partners should ensure that employees complete Expense Claim forms which. Employees must further agree with the termination for any given reason. Expenses without original receipts should not be reimbursed. Faxed copies of original receipts are unacceptable. Islamic Relief can deduct any outstanding balance from the employee’s final pay check.All ex pats seeking advances from other Islamic Relief Offices/Partners should get written approval from IRW. Employees must acknowledge that cash advance is the property of Islamic Relief. XII. Version 2 Updated November 2005 Prepared by IRW Finance 41 . Islamic Relief Offices and Partners should ensure that original receipts for all expenses must be attached.

It is preferred where possible to use electronic worksheet format. Development and review processes The reconciliation should be prepared in a standard format and on a monthly basis. Approval for write-off Version 2 Updated November 2005 Prepared by IRW Finance 42 . Appropriate steps should be taken to correct and clear reconciling items on a timely manner. which should support the general ledger account balance. III. This responsibility should be fulfilled by implementing and following a formal process which. Write-off of unidentified reconciling items must receive approval from the Director/Head of Offices of Islamic Relief Offices / Partners. For example. The procedures are not intended to address specific control activities applied by business units or statements of operating procedures. to ensure they accurately reflect Islamic Reliefs’ transactions. Finance Controllers/Account Managers should ensure the reconciliations are reviewed and approved of on a regular basis. sufficient investigations and adjustments should be made to clear them from reconciliation as soon as possible. The following procedures are intended to assist in applying this policy. as well as the accounting skill to prepare the reconciliation. Responsibility It is a fundamental responsibility for the Finance Controller/Account Manager of Islamic Relief Office/ Partner to monitor the accounts in their respective general ledgers. usually by the subsequent month-end. the sub-ledger. or some other appropriate underlying documentation.10. which require account reconciliations to assure their accuracy. If errors or reconciling items are found in the general ledger. Accounts covered include those significant accounts contained with in the general ledgers of Islamic Relief Offices and Partner.0 General Ledger Account Reconciliations All Islamic Relief Offices and Partners should undertake general ledger account reconciliations. or both. Ownership responsibility should be assigned to the person who has the best knowledge and control of the account (unless internal control considerations dictate otherwise). I Account reconciliations defined The Islamic Relief Office/ Partner account reconciliation should compare a general ledger account balance with the detail level sub-ledger. a spreadsheet. ensures all required accounts are reconciled regularly and on a timely basis. II. the “sub-ledger” may be: a bank statement. The intent is to provide supporting guidelines to assist operating units when developing necessary activities to ensure the policy is understood and followed.

Care should be taken to ensure signatures are legible along with the signatory’s printed name and position title.000. The sub-ledger should contain enough information to assure the sub-ledger detail is appropriate for use as a reconciling item. Completed reconciliations should be dated and signed by the preparer. Version 2 Updated November 2005 Prepared by IRW Finance 43 . The completed reconciliations should be maintained in a readily accessible filing system for review by management and internal and external auditors. The reconciliation and any related journal entries should be approved in writing.must be obtained from IRW Internal Audit if the dollar equivalent of the amount unidentified reconciling item is greater than $4. The exact format of the supporting documentation may vary by account. internal and external auditor review. Written explanations should be included in the reconciliations for supervisory review. by the preparer’s supervisor or an individual with a higher level of authority other than the preparer.

in addition to the booking of appropriate inter-company accruals on a quarterly basis. Further inter-company customers and suppliers’ transactions require the same focus as third-party customers and suppliers. posts all inter-company entries by the end of the each month. Inter-company Dispute Resolution All Islamic Relief Offices and Partners should ensure upfront communication and approval of inter-company charges. Communication and approval of transactions must be accomplished prior to booking entries. each Islamic Relief Office/Partner dispatches the inter-company transactions to the appropriate general ledger account. Keeping the inter-company accounts in balance is a shared responsibility of the two parties in the transaction. Islamic Relief Offices and Partners should give considerable attention to the initiation. Islamic Relief Offices and Partners should ensure that inter-company transactions are processed correctly at the time the transaction occurs. General Procedures The Islamic Relief Offices/Partners invoicing. in order to minimise the number of disputes. Upon acceptance and approval of charges. including inter-company accruals. accounting and settlement of such transactions. All Islamic Relief Offices and Partners must reconcile all inter-company accounts for financial reporting purposes. Islamic Relief Offices and Partners send a statement each month of all inter-company charges booked at the current accounting month to each relevant Islamic Relief Offices/Partners.0 Inter-company Transactions Islamic Relief Offices and Partners may incur inter-company transactions between Islamic Relief Offices and Partners. Principles of Inter-company Accounting Inter-company transactions are an integral part of day-to-day operations.11. The receiver of Islamic Relief Offices/Partners ensures all inter-company charges sent by an appropriate invoicing party are recorded in the current accounting month. All Islamic Relief Offices and Partners should ensure accounting for inter-company transactions involves constant attention and reconciliation to prevent the loss of time and resources. after Version 2 Updated November 2005 Prepared by IRW Finance 44 .

Disputes regarding intercompany charges should be communicated and resolved within 30 days of dispute notification.work has been completed and invoicing has occurred. Version 2 Updated November 2005 Prepared by IRW Finance 45 . Rejection of an inter-company charge should be communicated within 10 workdays after the inscription receipt of charge.

A copy of the deposit slip should be kept. CASH POSTING All receipts are to be entered into the accounting system on a one-business day lag from the time they are deposited into Islamic Relief’s bank account. 6. electronic fund transfers and merchant funds from MasterCard. Copies are to be made of all cheques received. name of donor. then log them into the cash receipt log indicating: the date. 3. and ensure all amounts are correctly stated on the deposit slip. Receipts of Income Controls All Islamic Relief Offices and Islamic Relief Partners should employ the following receipt of income controls: Safes are to be utilised on the receipt of donations and other Income. 5. 2. Check the amount. A copy of each cheque and accompanying documentation should be retained for security purposes. Serially numbered receipts should be issued to all donors immediately. II. to ensure cheques are deposited into Islamic Relief’s account appropriately. The cashier should fill out a deposit slip.12. Transfers such as: wire transfers. Visa and American Express should be processed into Islamic Relief’s bank account as received. until sent to the bank for deposit. Donations by Post or in person at the Offices Two assigned personnel should open all post 1. Donations Islamic Relief Partners and Offices will receive donations in varying forms. and the deposit slip with the cheques should be sent to the bank to be deposited. If for instance cheques/cash receipts are received at Islamic Relief offices or Partners address/location. 4.0 Income Management I. Version 2 Updated November 2005 Prepared by IRW Finance 46 . receipts as such should be forwarded to the Cashier and stored in a locked container. cheque number (if cheque received). therefore all Islamic Relief Offices and Partners need to maintain internal controls to safeguard the donations received. the fund the donation applies to along with the amount. All donations received should be handed to the designated cashier.

bank name and accounting code. the copy of the cheque and any other information received. or records of credit card/standing order/direct debit donations. Date and time of donation. indicating donor. Credit card details (Visa/MasterCard etc). 10. The finance/accounts officer should then complete the voucher. address and telephone number of the donor. Version 2 Updated November 2005 Prepared by IRW Finance the presence of the 47 . and mark the receipt-cash slip form to indicate it has been inputted. Card number. 8. and return the deposit slip to the finance/accounts officer. to reconcile the credit card/standing order/direct debit donations received against the database of the credit card/standing order/direct debit donations. Purpose of donation. Issue number for debit cards. Serially numbered receipts should be issued to all donors immediately. Issuing and expiry dates of the card. Amount to be donated. The finance office should input and post the cash receipt to the correct income accounts. Donations by Credit Cards The personnel assigned with the duty of taking credit card donations should ensure that the credit/debit card details are accurately captured. deposit date. 9. Donations via Collections All Islamic Relief Offices and Partners should adhere to the various legal requirements pertaining to that country. cheque number (if applicable). All documentation should be retained namely: the original bank deposit verification. with regards to collections.Finance personnel other than the cashier should bank the receipts daily. The system being used for credit card donations should capture the following information: • • • • • • • • • 7. Name of the person that took the donation. The cash collected must be counted with mosque/community centre’s officer(s). amount. the copy of the deposit slip. Mosque/community centre collections 1. The reconciliations must be reviewed by the Manager and must be signed off. Credit Card/Standing Order/Direct Debit Donations Controls Regular reconciliations must be undertaken. Name.

Reconciliations Daily total of receipt from cash and cheques should be reconciled with the donor database or receipt book. The cashier should fill out a deposit slip while ensuring all amounts were correctly stated on the deposit slip. 11. Finance personnel other than the cashier should deposit the receipts to the bank on a daily basis. 12. A copy of the deposit slip should be kept. make sure they are securely locked or sealed. A receipt must be issued promptly when the cash is taken away. Tax Rebates Islamic Relief Offices and Partners operating in countries where a tax rebate is received on donations MUST keep accurate with full records of donations received. Copies of all cheques received should be made. cheque number (if applicable). Prior approval from the mosque/community centre must be sought and precautions must be taken to safeguard all money collected. Version 2 Updated November 2005 Prepared by IRW Finance 48 . Moreover appropriate arrangements should be put in place to keep the cash safe. III. deposit date. while the amounts are recorded in the cashbook and countersigned by the manager. 6. 5. with a serial numbers on the seals. All documentation required by the relevant authorities must be maintained in an appropriate manner. the copy of the cheque and any other information received. to verify it has been inputted. while the original deposit slip with the cheques should be sent to the bank so that it is deposited. All monies must be recorded accurately. and return the deposit slip to the finance/accounts officer. All documentations should be retained namely: the original bank deposit verification. This will qualify for tax relief while at the same time.2. it is adequate for the purposes of a government audit as well as to various legal requirements pertaining to that country regarding tax rebates. 8. 3. If using boxes. All donations received should be handed to the designated cashier. IV. amount. bank name and accounting code. 4. cash can be temporarily deposited in the safe. However. The finance office should input and post the cash receipt to the appropriate income accounts with the initial receipt-cash slip form. If necessary. together with their location and the date received. the reconciliations must be reviewed by the Manager and must be signed off. the copy of the deposit slip. The finance/accounts officer should then complete the voucher indicating: donor. 7. 9. 10. Reconciliations should also be undertaken against cash/cheques banked.

Items less than $100 may be pooled. description and note of the quantity. These would include. Other Sources of Income Islamic Relief Offices and Islamic Relief Partners may receive Income from other sources. The income must be coded to the appropriate income code in the accounting system. but not limited to the categories mentioned: • • • • • Institutional Funding Income from Projects Sale of fixed assets/donated items Goods purchased for resale Reimbursements by personnel All Islamic Relief Offices/Partners should ensure that the Receipt of Income Controls is adhered to. Sale of Donated Goods Some Islamic Relief Offices/Partners may receive donated items from the public. Upon Receiving donated goods: • • The donated item should be recorded in a logbook along with the date received. apart from circumstances where Islamic Relief Offices/Partners operate. However. The generation of this type of income must be reported separately. appropriate authorisation must be obtained before making the sale. • A valuation of goods received must be entered in the Goods Received Log Book and approved by the manager. These items may be surplus to the organisation' needs where the manager may decide s to sell them. Further. The above procedures must be applied. Further a scripted note should be prepared with very specific reasoning to the donation (if applicable). You must ensure that the costs associated with the sale of donated items do not exceed the financial returns from such sales. The person who received the item should sign the record. 49 Version 2 Updated November 2005 Prepared by IRW Finance . Receipts must be issued for Income received regardless of the source. it should be noted that there may be tax implications with some jurisdictions which should be handled with care. The tax rebates must then be coded to the appropriate income accounts. For the sale of Fixed assets refer to the ‘Fixed Assets’ section. such as Islamic Relief Charity Shops. the manager on the hand must countersign to confirm the receipts of goods. only items above $100 should be recorded individually.All Islamic Relief Offices and Partners should make appropriate provisions in their annual accounts for any expected tax rebate. V.

When selling donated goods: The process from having to initiate a sale to the date of conducting the sale should be recorded in the logbook along with the receipt issue. For example. although it is permissible to engage in additional trading. The entry should include: the date of issue. in addition to which the person receiving the goods should also sign the record. All Islamic Relief Offices and Partners should refer to the laws various legal requirements pertaining to that country. Valuation of In Kind Islamic Relief Offices and Partners should value the In-Kind donations at the fair value with the date of donation. Goods Purchased for Resale Islamic Relief as a registered charity cannot engage in business at a commercial level. an entry noting the details should be recorded in the same logbook. Income and expenditure from such activities cannot be set off against each other. The income from sales and the cost of items must be recorded separately. the sale of promotional items such as badges. A signature should be obtained from the delivery person. Further a record of stock must be kept. the destination of goods and signatures of the beneficiaries (where possible). Version 2 Updated November 2005 Prepared by IRW Finance 50 . but under the same heading. the name of the person/persons receiving the goods. The manager should countersign to confirm that the goods have been received. the following procedures should be observed: • • • Goods received should be recorded in a logbook. Income In-Kind If the funding is in material form (goods in kind. a description of the goods. Fair Value Defined: In Kind donations are to be valued based upon the following: • • • • Estimated values in cash transactions of the same or similar goods Quoted market price Independent appraisals And other available evidence/information.. as well as: the date the goods received. Appropriate accounting records must be kept while the procedures for depositing income received must be followed. When any goods issued from the warehouse/store etc. shirts and stationery. description of goods along with the quantity involved. VI.). the quantity of the goods and the specific purpose for which they have been donated. physical assets etc.

For instances. Version 2 Updated November 2005 Prepared by IRW Finance 51 . goods description and quantity. they must include the method/basis used for valuing the In-Kind donations. In such instances. Islamic Relief Offices/Partners ship/transfer the In Kind donations to field offices. In addition the usability of the In Kind donations should be taken into consideration in determining the fair value. Documentation All Islamic Relief Offices and Partners should record the In Kind donation as Income. they must then be valued for less. If In Kind donations are restricted by conditions that limit their utilisation. This will result to the In Kind donations not having to be restricted. • Documentation of End-use or Transfer Islamic Relief Offices and Partners should document and record the final disbursement. verification of receipt and record of end-use or transfer. no value should be recorded as Income. If there is no reasonable or sufficient basis to determine the value of In-Kind donations. Islamic Relief Offices/Partners should reimburse the relevant Field office of any costs incurred on receipt for the In Kind donations. They should also have the appropriate documentations relating to the value of: In Kind donation. If this is not available. quantity and total value. they should include documentations of shipping records or other accounts of disbursement or end use. • Donation Stock Records All Islamic Relief Offices and Partners should keep stock records of In Kind donations where a list from the donor of the donated items including: stock description(s). stock records-for the In Kind donation. • In Kind Donation Documentation of the In Kind donation must be made either by the donor or through other externally verifiable sources. such as demurrage costs. it would be acceptable to have a stock listing prepared by Islamic Relief Offices/Partners in addition to the above information. not retail prices. end-use or transfer of In Kind donations.Islamic Relief Offices and Partners should approximate the wholesale price for In Kind donations. • Verification of Receipt Recipient of Islamic Relief Offices/Partners must record on the In Kind donations receipt: the date of the receipt. The reduction in value must therefore reflect the significance of restriction.

First showing In Kind donations in financial reports as Income.• Disclosure Islamic Relief Offices and Partners should disclosure In Kind donations as Income and Expenditure. the same amount should be included as Expenditure. Version 2 Updated November 2005 Prepared by IRW Finance 52 .

Version 2 Updated November 2005 Prepared by IRW Finance 53 . Fixed assets will be depreciated on a straight-line basis over their estimated useful life.0 Fixed Assets Management I. Note: useful lives may be affected by changes in the business and technological environment or the use of equipment. after the asset is placed into service. but not limited to: • • • • • • • • the asset’s tag number serial number description location custodian institutional donor (if applicable) cost depreciation rate and policy It is recommended that Islamic Relief Offices and Partners depreciate all capitalised assets using the straight-line method over their estimated useful life as follows: Asset category Land & Buildings Machinery & Equipment Computers and related equipment Furniture and Fixtures Motor Vehicles Estimated useful life 2% 12.13. Other capitalisable costs may include: initial inspection and testing. Depreciation is allocated monthly over the estimated useful life of the capital asset. Acquisition and Capitalisation Fixed asset additions must be purchased within the budgets set for/by Islamic Relief Offices and Partners where appropriate approval levels must be followed.5% 25% 12. All assets purchased should maintain a fixed asset register which captures the following. The invoiced net of any supplier discounts. II. plus sales tax freight and all other significant costs necessary to prepare an asset for use should be capitalised. installation costs and similar expenses only if material in amount. The cost of maintenance contracts on equipment and software should be expensed when paid. Depreciation is to commence during the first month.5% 20% Islamic Relief Offices and Partners may vary the depreciation policy in accordance with local circumstances. Depreciation The entire cost of an asset must be depreciated.

the department manager acquiring the property assumes responsibility. Only when the assets are disposed should the original asset and accumulated depreciation be written off the fixed asset record. Although before the transfer of an asset approval must be sought from management of Islamic Relief Offices/Partners. Transfers The transfer of fixed assets between departments. Version 2 Updated November 2005 Prepared by IRW Finance 54 . a fixed asset is TRANSFERRED to another department. All assets are transferred at their net book value with no recognition of a gain or loss. Retirements and Disposals Islamic Relief owned fixed assets. even if the location and/or department remain the same. A fully depreciated fixed asset will remain in the fixed asset sub-ledger and on the asset list until the fixed asset is retired from service. serial number. until the department managing the assets is notified of the transfer. All costs associated with the transfer should be expensed. serial number and the name of the department to receive the property. All assets should be disposed at market value regardless of the book value. III. IV. description.Depreciation expense for a fixed asset begins in the month following the acquisition date of the asset and continues until accumulated depreciation equals the original installed cost. All disposals of fixed assets must be approved by the Director of the Islamic Relief Offices/Partners prior to disposal. and using the applicable forms that should capture the description. by the department transferring the asset. Fixed assets must have a zero net book value at the time of retirement or disposal. The assets’: tag number. a fixed asset is TRANSFERRED to another primary user. The department manager to whom the item was assigned originally will be held accountable. or until the asset is retired from service. Interdepartmental transfers of assets will be reported to department managing the assets of Islamic Relief Offices/ Partners in writing. even if the ownership remains the same. After being notified. or business units should have no impact on its net book value. A change in a capital asset’s location or ownership occurs when: • • • a fixed asset is MOVED to another office or building. This may extend beyond the useful life used for depreciation purposes. divisions. If there is any remaining value. the asset shall first be written off to the appropriate account. even if the location remains the same. are to be retained as long as they continue to contribute in an efficient and economical manner to Islamic Relief’s operations.

Shrinkage should be written off to the appropriate account after management and IRW Internal Audit approval. and the asset should be deleted from the asset records and a gain/loss will be recorded. Upon approval of disposition. the department managing the assets and Finance Department will be notified. scrapped. Financial and Physical Control On an annual basis. Fixed assets should be inventoried (counted) on a periodic basis. all Islamic Relief Offices/Partners should produce a report showing a listing of the assets assigned to that department and any acquisitions. and then reported to the appropriate Director/Head of Office who should report the loss to IRW Internal Audit. Any discrepancies noted by the Islamic Relief Offices/Partners should be notified to the Director of Islamic Relief Offices/Partners as soon as possible. V. An Asset Disposal Form must be completed prior to the sale or disposition. All sales of Islamic Relief assets to Islamic Relief employees along with donations of Islamic Relief fixed assets must be approved by the Director of Islamic Relief Offices/Partners. Version 2 Updated November 2005 Prepared by IRW Finance 55 . the asset may be disposed in the following manner – sold. Upon disposition of the asset. donated. Islamic Relief Offices/Partners should perform a full physical inventory of Islamic Relief fixed assets on a yearly rotational basis.cost. Fixed assets that are not accounted for after the physical inventory shall be investigated. The department managing the assets should be provided with complete documentation (including asset tag/serial number and payment by check) of sales on a timely basis by the department coordinating the sale. or used in a trade-in transaction if authorised. accumulated depreciation and reason for retirement/disposal will be communicated to department managing the assets on an Asset Disposal Form. disposals and transfers during the past year.

Approvals/Documentation • Accounting Records Upon asset acquisition. The recommended value in the United Kingdom are assets with a value under £500 (British Pounds). They must further be in accordance within the budgets set for/by Islamic Relief Offices and Partners with appropriate approval levels that must be followed. It is important to maintain all expensed assets’ records including but not restricted to: the assets tag number. description and cost. serial number. Expensed Assets All Islamic Relief Offices and Partners should set a limit. • Institutional Donor Assets Islamic Relief Offices and Partners working in conjunction with institutional donors should maintain a detailed listing of each fixed asset item purchased. written approval must be sought from the institutional donor. Islamic Relief Offices/Partners should maintain a detailed listing of each Fixed asset item along with the following: • • • • • • • • • Depreciation records which will include the description Date acquired Asset must be held in the name of Islamic Relief Supplier name Cost basis Assigned department Depreciation method/life Accumulated depreciation Net book value • Approvals Fixed asset additions must be purchased within the established financial approval policies of Islamic Relief. Version 2 Updated November 2005 Prepared by IRW Finance 56 .VI. but all Islamic Relief Offices and Partners should set small value limits for fixed assets according to the local economical standards. and utilised concurrently with the institutional donor projects. Before the disposal or transfer of institutional donor held assets. Islamic Relief Offices/Partners are responsible for assigning and attaching asset number tags to the property where it can be readily located. in regards to assets of a small value and expensed at the time of purchase. VII.

or scrap. Location. but not restricted to: purchase price (if applicable). and start time. who are involved in the physical inventory process. c. Valuation needs to be assigned to all stock including In-Kind. Instructions to participants. Stock Valuation All Islamic Relief Offices and Partners should ensure stock records are maintained and regularly updated.0 Stock Guidelines Islamic Relief uses various types of stock in the course of its relief operations. Identification of stock designated as institutional property awaiting disbursement instructions (in cases in which the inventory is physically segregated). where stocks should be valued at the cost of bringing the stock to its present location and condition. Annual physical Stock Count At least one physical inventory should be taken in close proximity to year-end and coordinated with the independent external auditors’ mutual agreement. d. transport and handling costs. import duties. Detailed instructions including examples on how to complete the recording of the physical counts. physical stock provides Islamic Relief with an opportunity to maintain the accuracy of its continuous stock records. In cases which a second team recounts stock. Additionally. Guidance on how to designate suspect stock for later review as to obsolescence. Stock should be maintained in a manner that facilitates physical counting and should be conducted by personnel who are familiar with the Stock being counted. along with all differences reconciled. e. b. date. the recount should be promptly reconciled to the initial count. f. II. Maintaining adequate controls over stock is important to ensure adequate balance sheet valuation and appropriate reporting to institutional donors.14. The physical stock account should be supervised and controlled by members of Islamic Relief Offices/ Partners management teams. I. should be in inscription and include: a. Assignment of teams to specific areas. damage. Islamic Relief Offices/Partners should notify the Accounting/Finance department in cases where results of a physical stock require significant currency value adjustments to the accounting records. Costs would include. Version 2 Updated November 2005 Prepared by IRW Finance 57 . Team designation and rolls of key team members.

All sheets or tags used during the physical count should be accumulated and accounted for before the completion of stock with in specific area. III. Items that were identified as questionable value should be reviewed and adjusted to reflect their realisable value. Reconciliation of physical and perpetual records The physical stock quantities should be reconciled promptly with continuous records. The Finance/Accounting department should be advised on differences that result in adjustments to the stock values in Islamic Relief Offices/Partners accounting records. such as sequential numbering. Stock not on Islamic Relief premises In cases where Islamic Relief owned stock which is in transit or otherwise not in the Islamic Relief’s physical possession. all stock that is being held for beneficiaries should be clearly identified in stock records. V. The perpetual stock records should be adjusted for significant variances as compared to the physical quantities counted. IV. should be verified through the use of existing records that can be reviewed and used to authenticate its existence either through physical measurement at a later date. A process. the amount counted. or through some other independent source. A recap of differences should be developed showing the: stock item. the amount on the perpetual records. All differences are investigated. Proper identification of inventory ownership If practical. should be utilised to assure all physical stock documents are accounted for. the unit difference and the value of the difference in the prevailing currency. Version 2 Updated November 2005 Prepared by IRW Finance 58 .

the criteria should be set and presented to all contractors.0 Exceptions to Financial Guidelines in responding to a EmergencyHumanitarian Disaster On the occurrence of an emergency-humanitarian disaster. during an earthquake emergency. for a new camp which may be populated in the forthcoming period i. Finance is the key to deliver emergency aid. time is critical and of the essence for Islamic Relief to respond instantaneously and swiftly to the disaster. the need to get emergency food and medical supplies to the effected population may be regarded as an emergency need. Exceptions are only granted (with adequate authorisation) when the circumstances make it impossible to adhere to the procedures stated here. discuss with the CD. Finance Manager and Programme Manager.15. to ensure immediate aid reaches the beneficiaries. the procurement procedure can be adjusted as follows: • Complete the Purchase Request Form (Appendix B4) and seek approval for the purchase. As a general rule. verbal verification through the phone on the purchase decision should be attempted with the CD. Therefore. once the situation was stabilised. • Where contractors need to be employed to undertake specific work. However. Emergencies are defined by specific limitations due to certain conditions. write the quotations directly on the Bid Evaluation Form (Appendix B6). without any form of wastage or loss incurring. Finance Manager and Programme Manager to select the vendor. from the relevant line manager. all the financial procedures outlined in these guidelines must be followed in emergencies. • If the Purchase Committee is unavailable. This is vital to ensure the reputation of Islamic Relief is maintained. When the purchasing decision needs to be made from a remote location. However. Version 2 Updated November 2005 Prepared by IRW Finance 59 . Emergency Supplies are needed urgently. normal financial procedures such as obtaining three written quotations should apply assuming that the goods are available in local markets. • A confirmation of delivery must be obtained. not by projects name. For example. there may be other needs such as preparing food and non food item supplies. • Call potential approved vendors by phone to obtain verbal quotation. an alternative means of achieving verification. The Bid Evaluation Form should be signed and approved by them. Among the possible circumstances where changes in procedures may be required are: I.e. In this case. When it is not possible to follow a procedure due to extreme impracticality of the situation. approval and authorisation must be obtained from IRW. any verbal verification in this case must be supplemented with a written confirmation when it is possible to do so. This will enable Islamic Relief to report accurately to donors after the event. two weeks time. This should NOT be regarded as an emergency from financial procedures perspective. there is a need to ensure cash reaches the office in the field while donations-in-kind reach beneficiaries.

address and official stamp of organisation if person received money on behalf of an organisation. Upon collection. Pictures (with date & time) of the distribution should also be taken as a record/evidence of the distribution. B6. note down the details on a piece of paper and sign it yourself with a note explaining why you could not get the payee' signature. At the minimum. Bid Evaluation and Delivery Confirmation (Appendix B4. You may be questioned s later. B7 and B8). III.. Bid Evaluation and Delivery Confirmation. Stock Issue for Emergencies A Stock Request Form (Appendix B25) must be filled for any stock taken out from the store. Emergency Aid Distribution Aid distribution must be managed and must never be done in a chaotic fashion. and further approval obtained from the Programme Coordinator once it is possible to do so.• The minimum documentation required for emergencies are Purchase Request/Order. Amount of payment Version 2 Updated November 2005 Prepared by IRW Finance . in these circumstances a log must then be kept of all payments that records the following: Information required Name of person who made the payment Name and signature of person who received the payment Guidance to Islamic Relief Personnel In particular for cash advances. At the very least. You might have to write the receipt yourself and the signature may be a cross or thumb print. but at least you will have the information to provide the answers. If the person refuses to give or sign a receipt. the beneficiaries must form lines to collect aid supplies. the beneficiary must print his/her name and sign the Aid Distribution Form (Appendix B30). II. IV. Minimum Documentation In circumstances where Islamic Relief personnel assess the minimum documentation is not possible as stated namely: Purchase Request/Order. In both numbers and words for large amounts 60 Name. Ask yourself also whether the person is authorised to accept payment on behalf of the other organisation – normally that organisation should be able to issue an official receipt of their own…. Carry preprinted receipt books with you. the Stock Request Form can be filled by the storekeeper during the loading of emergency supplies to the vehicle.

misappropriation or theft of In–Kind Donations.Currency of payment Make sure the currency of payment is clearly indicated especially if you are using several currencies. Recording of In-Kind Donations Records should be kept of all In-Kind Donations and those that have been distributed to beneficiaries. This should be signed by the field office to acknowledge receipt of cash. checking and approving payment. VII. V. Regular and spot checks should take place to ensure there is no loss. Without records it rapidly becomes very difficult to keep track of advances leading to loss of money. Handling Cash All members of the emergency team should be at the process of recording money received and spent thus keeping all receipts. and each person should be formally authorised to do so. Write the year with four digits – it will be a reminder of which calendar is being used. Should be different person preparing. What the payment was for Date on which payment was made Whether paid by cheque or cash Name and signature of person preparing payment Name and signature of person checking payment Name and signature of person approving payment Reference to supporting documentation Contracts. while Islamic Relief employee’s return the signed forms to the account/finance department. Especially important for larger payments. Give a detailed explanation Write the day with two digits. Version 2 Updated November 2005 Prepared by IRW Finance 61 . for example 02 rather than 2. invoices and delivery notes – attach originals to avoid double-invoicing and/or payment. Transportation of Cash to the Field Islamic Relief personnel taking the cash from Islamic Relief to the field should obtain a receipt form the accounts/finance department of Islamic Relief Offices with cash. VI. All advances must be recorded. If paid by cheque you must add the cheque number. but you need to strike a balance between workability and control. Limit the number of people handling cash – possibly one person for small cash payments (Petty Cash) and one other person for larger payments. Full signatures are far better than initials as they are more difficult to forge.

Ensure that In-Kind donations are not utilised by local personnel for personnel use. Version 2 Updated November 2005 Prepared by IRW Finance 62 . Income In Kind. A regular stock take should take place. no departure from the full Islamic Relief Financial Guidelines is acceptable for established field offices. Records are of utmost importance. Overview These guidelines are intended as quick guidance in emergency situations.3 Income Management Sub Section VI. Refer to Section 1. to ensure that Donors and Institutions can be provided with assurance that In-kind donations have received the beneficiaries. VIII. without authorisation from the IRW Finance department.

16.0 Field Office specific I. Introduction
The Islamic Relief Field Office specific guidelines are designed to give guidance in additional areas specific to Islamic Relief Field Offices. It should be noted that Islamic Relief Field Offices at all times should refer to and take guidance from Islamic Relief Financial Guidelines. The additional guidance is, as it states, an additional not a replacement or departure from the main body of guidelines.

II. Documentation
Refer to Islamic Relief Financial Guidelines section 1.4 Cash and Bank Guidelines: I. Opening Bank Accounts, section 1.5 Procurement Guidelines III. Approval Levels. All Field Offices should maintain on record the following essential documents: 1. Registration documents (if registered). 2. Bank Account List and list of cheque signatories (Appendix B1) Approved form to setup field office bank account from Executive Committee at Islamic Relief Worldwide. 3. Approval limit for procurement of assets, supplies and other payments. A table should be produced to show the limits of expenditure and the authorisations required. (Appendix B2). A copy of the expenditure approval limit must be sent to IRW Finance. 4. Working with Partners: There are several types of partners that Islamic Relief cooperates with: • • The relationship with the partner does not involve any transfer of funds or assets between Islamic Relief Offices and Partners. In this case, the following procedures are not applicable. The partner does not receive any funds from Islamic Relief but helps to implement projects such as relief distribution for Islamic Relief. In this case Islamic Relief must ensure that during the project implementation by partners; Islamic Relief’s internal control procedures are adequately followed especially in regards to stock control and verification of receipt by beneficiary. The partner receives a grant or sponsorship from Islamic Relief to implement a project. In this case all the internal control procedures outlined below must be followed. Refer to Islamic Relief Financial Guidelines: Islamic Relief Policy on Grants. Islamic Relief uses partner’s bank account, due to unavailability of a bank account in a new country, as commonly happens during emergencies. The following procedures must be followed.

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The procedures of working with partners are as follows: • Approval letter from Executive Committee at Islamic Relief Worldwide, which permitted you to use partner organisation’s bank account (Appendix A4). NO funds should be transferred through personal bank accounts. • A Partnership Agreement must be made. The agreement should clearly state: a) The requirements where Islamic Relief partners must have an Islamic Relief approved internal control and reporting system. b) Area and scope of work –the areas of cooperation between Islamic Relief and partners as well as the duties of each party should be clearly stated. c) The type of reports to be produced and the dateline for sending the reports to a designated Islamic Relief staff. • A copy of the Partner’s Registration document should be kept by Islamic Relief Field Office.

III. Organisational structure The Organisation Structure must reflect: 1. 2. 3. 4. 5. 6. Number of projects managed. Number of project components i.e. health, education, Water & Sanitation etc. Scale of the project managed. Number of Sub-offices Risk and Stability of the area Segregation of duties – a riskier operation will require greater segregation of duties, and hence more staff needs to be employed to ensure asset custodian, recording and authorisation is separated.

Minimum number of segregation of duties for sub-office
Normal Situation (low/average risk) 1. Leader (Program Manager/Head of Mission) 2. Admin and Financial Officer High Risk Situation 1. Leader (Program Manager/Head of Mission) 2. Finance Officer 3. Admin Officer

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IV. The Structure of Finance Department Country Head Office (Finance Manager) Country Head Office (Admin Manager) Sub Offices (Admin & Finance Officer/Accountant) The management structure for the Admin and Finance Officer at sub offices is a form of matrix management structure. While the head of the sub office is a Programme Coordinator/Manager, the Admin and Finance Officer are ultimately responsible to the Finance Manager at Head Office (for financial matters) and Admin Manager at Head Office (for admin matters). It is very important to clarify that as long as the Project Coordinator/Manager at the sub office is following all the admin and financial procedures, the Admin and Finance Officer must give full support to facilitate the operations. Admin and Finance Officer do not have the authority to stop any payments that have been made according to the procedures. In circumstances where sub office affairs do not follow the admin and financial procedures, the Admin and Finance Officer must not approve/make payments. Instead he/she should refer the matter to the Finance Manager (for financial issues) and Admin Manager (for admin issues) immediately. The Finance Manager/Admin Manager will try to resolve the situation in consultation with the Programme Manager at the Head Office. The Admin and Finance Officer must keep record of all communications, where all communications must be recorded in writing. Verbal communication is not sufficient evidence that authorisation has been obtained. If the breach of procedure is material and no action has been undertaken by the Finance Manager, the Admin and Finance Officer must refer the matter to the IRW Internal Audit. The Admin and Finance Officer could be held personally liable for any unauthorised transactions including the ones that do not follow the procedure. In addition to Islamic Relief financial guidelines if he/she do not take the necessary steps as stated above. Duties of Sub Office Admin & Finance Officer/Accountant 1. Assist/support all project coordinators. 2. Ensure that Islamic Relief guidelines and procedures are being followed. The Admin & Finance Officer should not approve any documentation/payment that does not follow the financial guidelines and procedures. 3. If there is any change/breach of procedures he/she should report to the Finance Manager. The Finance Manager should communicate with Programme Manager and try and resolve the situation.

V. Financial Control
All Islamic Relief Field Offices should establish and operate financial aspects and operate in accordance with the Islamic Relief Financial Guidelines, with particular reference to the sections on Financial Controls Segregation of duties.
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Version 2 Updated November 2005 Prepared by IRW Finance 66 . Note: Where the internal control procedures outlined are not possible due to unavoidable and unforeseen circumstances. should not be in charge of the custody and recording of the assets to prevent any misuse. communication equipment. furniture.9 Fixed Assets Management of the Financial Guidelines. All Field offices should operate along a standard and logical fixed asset tagging system. alternative means of safeguarding Islamic Relief assets must be explored. All Field Offices should obtain written approval from IRW before the disposal of any fixed assets. office equipments. • Recording of Islamic Relief Assets All assets acquired. Principles of Internal Control All forms. the Management Emergency Operations are responsible to ensure the assigning the role to different members of staff: section are intended to preserve the Islamic Relief assets are adequately of Islamic Relief Field Office and following functions are separated by The following guidance is in addition to the section 1. Any exceptions to the normal procedures should be documented and the appropriate approval from the Management must be obtained. computing equipments and accessories. cash in bank. which is not responsible for the custody and authorisation of the asset’s use. project equipment etc. reports and procedures presented in this basic principles of internal control. disposed and handed over to another staff should be recorded by a member of staff. acquisition and disposal of Islamic Relief Assets. As much as possible. • Custodian of Islamic Relief Asset All Islamic Relief assets such as: cash. stock and fixed assets. vehicles.This section is additional guidance and is NOT a replacement or departure for Field Offices from the main body and text of Islamic Relief Financial Guidelines. should be assigned as a custodian. Top priority should be given to the: control of cash in hand. The degree of control would depend on the value and liquidity of the asset. This is to ensure that all assets are being maintained by Islamic Relief staffs are responsible for safekeeping as well as the condition of assets. and ensure that protected. • Authorisation of Islamic Relief Assets The person who is responsible for authorising the use.

a person who has technical knowledge about the product and the manager from the requesting department or his/her representative. c) Quotations and Bids from various vendors are compared. Vendors are contacted by the Admin/Purchasing Officer to submit quotations. Transfers from IRW should be accounted for on receipt according to the budget. Finance Manager. The authorisations required will depend on the expenditure limit set as shown in Appendix B2. Admin/Purchasing Manager. The decision must be signed by all the members of the Purchase Committee. The selected supplier must be clearly stated on the Bid Evaluation Form together with the reasons for selecting the vendor. The Purchase Committee will have at least five members of which are: Country Director. ii) PROCUREMENT The following guidance is in addition to the section 4. IRW reserves the right to amend the amount of transfers to be sent to Field Offices according to circumstances. reliability and other factors as to which supplier to select for the purchase. Approval Levels and follow the procedures outlined below: a) Request for purchase is made by the originating department.VI. Financial procedures and forms i) REQUEST FOR TRANSFERS The Transfer Request Form (Appendix B3) should be filled by the Finance Manager and approved by the Head of Mission/Country Director. All Islamic Relief vendors must fill in Islamic Relief Vendor Detail Form (Appendix B5). Funds are transferred once it is authorised by the Project Division Manager and IRW Finance. A background check must be conducted to verify the reliability of the vendor before they can be accepted as an approved vendor. Version 2 Updated November 2005 Prepared by IRW Finance 67 . no debtors should be set up for expected transfers. It should be submitted to the Regional Programme Manager/Emergency Manager for approval. An approved (by line manager) Purchase Request Form (Appendix B4) must be submitted to the Purchasing/Admin Officer.6 Tendering Guidelines of the Islamic Relief Financial Guidelines. A Bid Evaluation Form (Appendix B6) must be completed detailing the quotations received.5 Procurement Guidelines: III. The Purchase Committee will meet to decide based on: price.5 Procurement Guidelines and 4. All purchases above a certain limit (to be determined by the Country Director and Finance Manager) refer to section 4. quality. b) Quotations are obtained from approved vendors.

In this case. One copy is for file (by the Admin/Purchasing Officer). should be sent back to the Accounts/Finance for payment processing. Bid Evaluation Form. As a precondition. where goods are delivered direct to beneficiaries. to confirm the amount which should be paid. quantity and condition of goods. to observe and confirm the delivery. all the relevant procurement documents (Purchase Request. Version 2 Updated November 2005 Prepared by IRW Finance 68 . h) Deposits or Advance Payment to the Vendor. quantity and condition of the goods OR. An invoice from the supplier is received during or after delivery of goods. Any deposits or advance to suppliers must be authorised by the Finance Manager and the CD. Bid Evaluation Form and Delivery confirmation are absolute essential documents for releasing payment to the vendor. Three copies of the Purchase Order should be prepared. Delivery Confirmation and Vendor Invoice) must be attached to the Bank/Cash Payment Voucher (Appendix B9/B10) for payment approval by the Finance Manager and Head of Mission. each beneficiary should be given a ration card which is signed by driver whenever a delivery is made. A Purchase Order (Appendix B7) is sent to the vendor. Advance payment to the vendor should not be encouraged except when it is a normal business practice in the area that Islamic Relief is operating. Purchase Order. A copy of the Purchase Order should be given to the storekeeper (or any person authorised to receive the goods) and a Goods Received Note (Appendix B8) would be used to confirm the quantity delivered and the condition of goods. The representative should have the details of the purchase before the goods are delivered OR. Confirmation of delivery can conducted at a later stage when Islamic Relief staffs are able to make a field visit to the beneficiaries. In the case where distribution is geographically dispersed and in small quantities such as. The Purchase Order copy and a copy of the Goods Received Note. The ration card will be kept by the beneficiary for inspection by Islamic Relief field officer. either one of the following must be completed: • • • Send an Islamic Relief employee (with a copy of the Purchase Order) to the distribution site. The Purchase Order. g) Payment is made to the vendor. A payment voucher checklist will inshaAllah ensure that all the supporting documents are present (Appendix B11). e) The goods/services are received. another copy is sent to the vendor whilst a further copy is sent to the storekeeper for delivery verification. Appoint a representative among the beneficiaries to confirm the delivery.d) The order is made to the selected vendor. delivering fertilisers to each farmer’s house. f) Vendor confirms amount owed.

allocated an account each). Receipts must be clearly separated in the accounts according to the categories below: a) Transfers from IRW It is the responsibility of the Regional Programme Manager/Emergency Manager to ensure each transfer made to the field office is accompanied by a transfer sheet. In Kind Donations Form (Appendix B15) should be used for in kind donations. In Kind Donations Form (Appendix B15) must be used to record in kind donations received.4 Cash & Bank Guidelines and 1. Version 2 Updated November 2005 Prepared by IRW Finance 69 . Receipts All types of receipts must be reported in the Quarterly Reports (for Field Offices) and Monthly Reports (for Emergencies). For example. c) Income from Other Sources Any donation from locals.VII. Further document formats for bank and cash are in Appendix B12. The In Kind Donation form must be reconciled with the Goods Received Note (Appendix B8) from the store to confirm the delivery of the In Kind Donation. b) Income from Institutions A document must be provided by the donating institution to specify what is being donated along with the purpose it is intended for. VIII. The valuation of stock must be approved by the Finance Manager and Project Manager. advance repayments and reimbursements must be clearly separated in the accounts (i.e. one for file and the other as an acknowledgement of receipt to the donor. Payments & transfers The following guidance is in addition to the section 1. a) Withdrawal from Bank to Safe A Safe Replenishment Form (Appendix B16) must be approved by the Finance Manager and the Country Director/Head of Mission for transferring funds from the bank to the safe.7 Accounts Payable Guidelines of Islamic Relief Financial Guidelines. B13 and B14. detailing the breakdown of the transfer according to projects. An estimated market value must also be allocated to the goods based on the market value of the country of operation. interests. donor’s documentation and expert’s opinion (wherever possible).3 Income Management: Income In-Kind of the Islamic Relief Financial Guidelines. Two copies are produced. The stock records held by the Finance department (in QuickBooks) and in the store must be updated. e) In Kind Donations The following guidance is in addition to the section 1.

the Finance Manager will be responsible for authorising payments. b) Bank Payments The Bank Payment Voucher (Appendix B9) should be used to obtain approval for all bank payments. a cash count (using the Cash Count & Reconciliation Form – Appendix B19) should be performed and reconciled with the Cash balance in QuickBooks. should be used to obtain approval from the Finance Manager. a person should be assigned to maintain the petty cash till. On a daily basis. However. d) Petty Cash Petty Cash Payment Vouchers (Appendix B17) should be used for petty cash payments.) must be attached to Bank Payment Vouchers and Cash Payment Vouchers respectively. Normally. Cash Payment Vouchers (Appendix B10) must be used to obtain approval for all cash payments. Travel Request Form. the Programme Manager/Coordinator and the Finance Officer/Accountant will be in charge of authorising payments. The payments should be separated by project and budget (i. By doing so. the cash held in a secure place by a responsible person is treated as a ‘safe’. However. The same rule must be followed where a safe is not (or cannot be made) available for cash withdrawal from the bank. c) Cash Payments All cash payments should be filed separately according to the currency. A float level should be assigned for petty cash. the recordkeeping should be maintained by the Accountant while the custodian of the cash is held by the cashier. in smaller field offices or in emergencies. e) Safe and Petty Cash Reconciliation For both Cash in Safe and Petty Cash. the 70 Version 2 Updated November 2005 Prepared by IRW Finance . In this case.A person should be assigned to maintain the receipts and disbursements from the safe. Authorising expense should also be kept separate from custodian and record keeping. f) Advances Advances must be recorded in the accounts as a current liability in the name of the applicant. Delivery confirmation. It is assumed that all cash payments are made through the safe or any other means of safekeeping cash. Advances can be divided into: • Cash Advance for Project (one account for each advance taken) – The Cash Advance Form ((Appendix B20) should be used whenever an advance is needed. For example float replenishment would require you to fill out a Float Replenishment Form (Appendix B18) which.e. Once the advance is settled by returning the balance unspent or submitting a Staff Expense Claim Form (Appendix B21) if some expenses are overspent. account codes) as it would appear in the accounting entry. Supporting documents (such as Purchase Order. Staff Expense Claim plus receipts etc. any amount owing or unsettled by any Islamic Relief staff (or supplier) can be monitored.

These reports can be generated from QuickBooks standard reports. The monthly repayment period for salary advances is up to one year maximum. Cash Advance Register Date Staff Doc. but is at the expense of accuracy and better control especially for large advances and those advances that are not settled on the same day. Ref. Sign 2) Detailed – advances are recorded in the accounts when taken and settled separately. a register must be used to keep track of the amount taken and returned.Advance for Project account will be closed and the expenses charged to the appropriate expense account. Finance Manager and Project Manager. IOU forms (Appendix B22) are used for smaller advances. Advance to Suppliers – advance to suppliers should be avoided except when it is the normal business practice of an area that Islamic Relief is operating in.000 Cash Returned: Cash Cash Advance: Ismail Version 2 Updated November 2005 Prepared by IRW Finance 100 100 71 . • Note: Every month. The amount of salary advance that can be taken is limited to an amount that will be determined by the CD. Credit 1. Advance Returned 100 Expense 900 Cashier Sign 13/1/05 Ismail CAV1/019 1. This will involve many transactions. No.000 1.000 Received by. Any advance to suppliers must be authorised by the Finance Manager and the Country Director. • Salary Advance – salary advance will be charged to the monthly salary. a statement must be produced to each staff/supplier to show the amount of the advance owing/unsettled to Islamic Relief. Cash advances Ways of recording Cash Advance: 1) Direct – for advances in small amount and over short period (usually less than a day) Debit Credit Cash 900 Stationary expense 900 However. Take Advance Cash Cash Advance: Ismail Advance Settlement Debit.

IX. Other Receivable) in Islamic Relief’s books. the Cash Advance Request form will have to be completed and placed in the ‘Unsettled Cash Advance’ file until they are settled.e. purchase asset. ii) Projects Implemented by Islamic Relief Partner Version 2 Updated November 2005 Prepared by IRW Finance 72 . the partner should set up or allocate a separate bank account to hold Islamic Relief’s funds to prevent any accidental use of Islamic Relief funds for unauthorised purposes. The asset list should state clearly who is the asset custodian and where it is currently located.9 Fixed Assets Management of the Islamic Relief Financial Guidelines. and throughout the Islamic Relief Financial Guidelines. g) Cash Handover A Cash Handover Form (Appendix B22) should be used whenever Islamic Relief staff is given large amounts of cash to: be distributed to beneficiaries. Financial procedure with Islamic Relief partners i) Withdrawal from Partner’s Bank Account • • • • As a principle. any payments.Charge to Expense: Cash Advance: Ismail Stationary expense 900 900 Note: In both cases. The balance of Islamic Relief funds held in the partner’s bank account must be reconciled on a monthly basis with Islamic Relief’s records. vi) ASSET CONTROL The following guidance is in addition to the section 1. transfers or withdrawals from the partner’s bank account must be supplemented by the same internal control procedures outlined within this section. make payments to supplier or any other purpose. Ideally. a) Assets Register A list of asset or Asset Register (Appendix C) should be maintained by the Admin Officer (or a person assigned by the Admin Manager) for each field office or temporary emergency office. Islamic Relief funds held in the partner’s bank account should be regarded as ‘Other Debtor’ (i. b) Asset Handover Any movement of assets to a different location/custodian should involve the Asset Handover Form (Appendix B23).

ii) Emergency Projects – in the absence of a line by line budget. XI. Budget Implementation and Reporting i) Field Offices every line of expenditure should be matched against the budget.• Any Islamic Relief partner who implements projects on behalf of Islamic Relief must have an Islamic Relief approved internal control system that is of equivalent standard as being outlined by all sections of this document.2 Income Management: Income In-Kind). as at end of Quarter Detailed stock valuation report. Finance Manager and Programme Manager) budget as soon as possible. actual report facility is available for this purpose. as at end of Quarter. The Programme Manager has the responsibility to update Head of Mission and Finance Manager of any significant changes in project activities.1 Financial reporting of Islamic Relief Financial Guidelines. Detailed Balance Sheet. Version 2 Updated November 2005 Prepared by IRW Finance 73 . and should be revised from time to time to reflect the changes in the project activities and circumstances. Actual Income & Expenditure Report (In Kind Donations should also be included based on estimated valuation as explained in 1. The chart of accounts in QuickBooks must be in the same format as the master budget. Budget vs. The QuickBooks budget vs. Field Office . so that Finance Manager can update the budget in QuickBooks as soon as possible.1 Financial Reporting of the Islamic Relief Financial Guidelines. actual reporting must be done on a monthly basis.must produce reports on a Monthly Basis. XII. The budget should be at least for 3 months. who will then present the proposal to the Projects Approval Committee. A bank reconciliation statement at the end of the period concerned. Reports The following guidance is in addition to section 2. Emergency operations . emergency programmes (through a designated Finance Manager/Accountant) should prepare an internally approved (by Head of Mission.Reports must be submitted to Islamic Relief HQ on a Quarterly Basis as stated in 2. Note: All these reports are available in QuickBooks standard reports. Islamic Relief Field Office reports should include: • • • • Budget vs. to ensure all expenditures are adequately tracked and evaluated. Post Budget Adjustments All Field Offices with amendments to budgets set should submit their proposals by project to the relevant Regional Programme Manager at IRW.

In the case that the goods are purchased by Islamic Relief.Note: Budget adjustments apply to increase or decrease in budgets. XIV. The storekeeper should not release any stock without proper authorisation. In circumstances where the original budget has been over optimistic a reduction may be necessary. The Purchase Order copy along with a copy of the Goods Received Note must be sent to Accounts department for payment processing. Employees The following guidance is in addition to the Islamic Relief Human Resources Guidelines. XIII.0 Stock Guidelines of the Islamic Relief Financial Guidelines. Note: Weekly stock updates should be made into QuickBooks. Stock Control The following guidance is in addition to the section 2. Version 2 Updated November 2005 Prepared by IRW Finance 74 . A bin card (Appendix B26) will be used to update each stock item of any stock movements. 1) Recruitment i) Employment Contract (Appendix D1) – relevant issues which should be covered by the contract are: a) Job description and main duties b) Holiday entitlements c) Working hours d) Travel Allowance (fixed according to each country) e) Line Manager and Subordinates f) Conditions for salary advances ii) Personal History Form (Appendix D2) must be completed by each Islamic Relief employee. 2) Stock Issue/Despatch All stock issues should be approved and authorised using the Stock Request Form (Appendix B25). 1) Stock Receipt All incoming stock either through Islamic Relief procurement or through in kind donation should be recorded in the Goods Received Note (Appendix B8). Any discrepancies will be recorded in the Goods Receive Note. The storekeeper is held responsible to send Admin weekly summary of stock movements. The storekeeper will use the Purchase Order as a basis of verifying the quantity and condition of goods received are as ordered. a copy of the Purchase Order must be sent to storekeeper before the delivery of goods.

overseas trip etc. iii) The duties code of conduct and any financial benefits to them should be clearly stated in a contract agreement. the maximum amount allowed for salary advance and the procedure for application. number of participants and any requirements such as vehicle use and advances. staff claim and vehicles used. 3) Attendance i) Timesheet . subject to the agreement of Head of Mission. should be sent to the Finance Department at HQ. The salary advance must be recorded in the accounts as a current liability under the name of the expatriate concerned. Project Control 1) Travel Request Form/Log (Appendix B27/B28) – All field trips or trips to a destination of more than 30 km (such as for attending meeting. emergencies. The handover form should list the assets held in custody whilst the list of main duties and tasks are in progress.2) Leaving Employment i) Job Handover Form (Appendix D3) and assets in custody must be given to the replacement staff. b) Entitlement for housing benefit and the maximum rent allowable. During. 4) Volunteers: i) All volunteers are expected to respect the ethics and values held by Islamic Relief.) should be approved by the Head of Mission. A statement should be produced to the expatriate to show the total amount of advance taken. A Travel Request Form should be used to specify the purpose of the trip. Version 2 Updated November 2005 Prepared by IRW Finance 75 . ii) Salary Advance Form– application for expatriate salary advance must be made using this form. plus any other issues specific to working abroad such as: a) Where and when the salary is paid. c) Entitlement for salary advance. repayment and reconciliation. 5) Expatriate: i) Employment Contract – every expatriate should have an employment contract with Islamic Relief that contains all issues highlighted above. The travel request form will be required for the release of any advance and vehicle use. purchasing assets. The Travel Register should also be updated with details of the trip including any reference to advance taken. along with a copy of the approved salary advance form which. XV.a record must be made of the daily time in and time out for each staff (including volunteers). ii) Volunteer List– a register should be maintained to hold the personal details of each volunteer along with the start and end of the volunteers work. The final month salary will be held subject to completing the handover process. seminars.

Finance Manager and Project Manager, the requirement for filling in the Travel Request Form may be excluded and only a log in the Travel Register is required. In this case, a column should be provided for HM to give approval for the trip. 2) Aid Distribution Control – Aid distribution must be verified by the beneficiaries (Appendix B30). 3) During the initiation phase of the project, the Project Manager must work together with the Finance Manager to create a budget based on the cash flow needs of the projects’ activities. The PM also has the responsibility to plan and coordinate activities of each project component with the FM, to ensure there are no disruptions in cash needs of activities such as: purchasing supplies, payment to suppliers, volunteers, staffs, beneficiaries etc. 4) Camp Management – the following are the main areas of concern: a. Camp Asset Control – office supplies, office equipment, stock (especially aid supplies), project equipments, shelter materials etc. b. Camp Registration Process – Camp Registration Forms (Appendix B29) must be completed. c. Camp Aid Distribution – must be adequately verified using Camp Aid Distribution sheet (Appendix B31). A secure place for storing aid supplies must be made available. Store Control procedures such as Stock Request Forms and Bin Cards must also be observed. d. General Camp Monitoring (Appendix B32) e. Water Bladder Monitoring Form (Appendix B33) f. Shelter Materials Control g. Camp School h. Camp Clinic XVI. Filing System Basic Information – Petty Cash Float level, members of purchase committee, Salary Advance formula, depreciation policy. Filing System 1) The filing system below is based on the bank and cash payments. The purpose is to provide easy traceability and audit reference to every transaction. Every transaction should have the respective voucher as the top sheet and the relevant supporting documents attached to it. If in a case a supporting document is too bulky, a reference to the location of documents could be made on the Payment Voucher. 2) A separate bank transactions file should be created for each bank account. Similarly, cash transactions should be separated by Cash (i.e. cash in safe) and Petty Cash. Within the cash category, separate filing or folders should be made for each

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currency. In other words, we should not mix the documents for home currency and foreign currency. 3) A separate file should be made for each category below. If there are only few documents, then make a folder within the related files. For example, if the Bank Receipt Vouchers are few, then make it as a folder (i.e. sub section) of Bank Payment Voucher file. 4) All the main vouchers should be pre-printed and serial numbered. This will inshaAllah minimise the chances of error and provide an additional security to the forms. 5) The serial number of the form should be entered as the transaction reference number in QuickBooks. This will provide an audit trail from QuickBooks transactions to the source documents. Similarly, the QuickBooks transaction number (which is also in a unique series as none ‘deleteable’) should be referenced on the form as evidence that the transaction has been entered into QuickBooks. Furthermore this will ease the traceability from the document to the corresponding QuickBooks transaction. Financial Documentation Files Cash in Bank • Bank Payment Voucher • Bank Receipt Voucher Cash in Safe • Cash Payment Voucher • Cash Receipt Voucher Petty Cash • Petty Cash Payment Vr. • Petty Cash Receipt Vr. Pre-printed & Serial Number

Ref. In QB

Note: Within a file, separate folders should be made for each currency. Procurement Process and Filing The stages in purchasing are as follows:

Stage
1. Approval for Purchase 2. Supplier selection 3. Confirmation of Order 4. Confirmation of delivery 5. Confirmation of amt. Owed 6. Confirmation of Payment

Document

Transit File

Purchase Request Bid Evaluation Purchase Order PO file Goods Received Note GRN file – matched against PO Supplier’s Invoice Unpaid Invoice file Bank Payment Voucher

Note: BPV file is the final destination of the procurement cycle.
Version 2 Updated November 2005 Prepared by IRW Finance 77

Transit files – these documents will be kept in these files until they are settled or matched. 1. PO file – awaiting Invoice from supplier. Upon receipt of supplier’s invoice, the PO together with the corresponding invoice will be matched with the Goods Receipt Note (GRN or delivery confirmation) and kept in the ‘Unpaid Invoice File’. 2. GRN file – to be matched with supplier’s invoice. 3. Unpaid Invoice file – awaiting payment approval & disbursed to supplier. Once payment is made, the documents (PO, Supplier’s Invoice, and GRN) will be attached to the Bank/Cash Payment Voucher and filed in the Bank Payment Voucher/Cash Payment Voucher file. 4. Unsettled Cash advance file – awaiting settlement by staff taking the advance. The settlement process requires the return of any cash balance together with the receipts for the expenses made. Once the settlement has been made, all documentation must be attached to the Cash Payment Voucher and stored in the Cash Payment Voucher file. A copy of the cash advance and settlement document must also be attached to the Cash Receipts Voucher to accompany the cash balance returned. Financial Policies and Procedures Files 1. 2. 3. 4. 5. 6. 7. Financial Guidelines and Policies Statutory Regulations Institutional Donor reporting requirements Procurement Procedure Salaries/payroll: file, deduction, family maintenance Salary advance/loans Approved budget file

Admin files 1. 2. 3. 4. 5. 6. General (reg. doc, approval limits, org. charts, bank lists) Personnel History Contracts (rental agreements, agreement with suppliers) Insurance Policies Vehicle Ownership document Keep in SAFE Asset Register

Management files 2. 3. 4. 5. Strategic Management Plans Human Resource Policies and Guidelines Directives Government regulations

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HQ Transfer into local currency bank account Policy: record the amount in the local currency at the actual rate of exchange. Computer (expense Type) 2) Opening balance for new financial year Cash Bank A002 HQ Transfer b/f (Income) Exchange Gain/Loss DR. Version 2 Updated November 2005 Prepared by IRW Finance 79 . Computer (Fixed Asset Type) Cr. Project profile a. b.440 @ CFA 950 Accounting Treatment a.000. d.000 HQ transferred 16. Approved Projects Budget (also referred to by Finance) 4.100.000 1) The treatment for exchange rate gain and loss will depend on whether the transfer from HQ is debited into a Foreign Currency Bank account or a local currency bank account. Contracts with Institutional Donors and Government (also referred to by Finance) 3. 100. there will be an exchange gain or loss based on the difference between the budget rate and the actual rate. However. Dr. Ct. Sponsored Orphans List XVII.Project Files 1. For example: Budget exchange rate: CFA 1. Log frames Budget Brief Cost Benefit Analysis 2. Year end Closing 31/12 (after Q4 report to Head Quarters) 1) Depreciation Clear up all Fixed Assets from expense accounts. 2. Dt.000 2. c.000 CR.

440. Exchange gain/loss will be calculated once a transfer is made from the euro bank a/c into local currency.000 x CFA 950) Exchange loss 16.000 x CFA 50) Version 2 Updated November 2005 Prepared by IRW Finance 80 .000.000 (Euro10.000 15.000) Local Currency Bank a/c (Euro1. HQ Transfer into foreign currency bank account Policy: As the amount is received in foreign currency.000 Ct. Euro Bank a/c 10.000 x CFA 1. Ct.000 (Euro10. 16.050.000 x CFA 1.000 Assuming that Euro 10. HQ Transfer (Income a/c) (Euro1.000) Euro Bank a/c (Euro1.000 x CFA 1.440.000 822.000 is transferred from the euro a/c to the local currency bank a/c at CFA 1050: Dt.000 x CFA 1. 16.000) Dt.000 b.HQ Transfer (Income a/c) (Euro 1. no exchange gain/loss will be calculated upon transfer as the gain/loss is unrealised.000 x CFA 1. then by comparing the actual rate against the budget exchange rate.440.050) Exchange gain 50.000) Local Currency Bank a/c 10.618.000 (Euro10.

orphan sponsorship etc. Grant applications in excess of £5. • Most grant payments are made out of unrestricted funds that are always in short supply. If need is identified by the organisation.17.000 Authorised Approval Level Two designated staff members Committee of three All Other Islamic Relief Offices and Partners should set their approvals according to local circumstances. Individuals in need of assistance should obtain a grant application form from the accounts department of the respective Islamic Relief Office/Partner. Introduction Islamic Relief makes grants to individuals when the purpose of the grant is in-line with the charitable objectives of Islamic Relief. The grant application needs to be approved as stated below. • Promoting sustainable economic and social development within communities through various projects. namely health & development.000 £1. All Other Islamic Relief Offices and Partners should set their approvals according to local circumstances.001 to £5. II. then the form may be completed by Islamic Relief staff members. if the grant requested is up to a value of £5.000 in United Kingdom. 2.000 in the United Kingdom are given to organisations only and not individuals. Sterling Amount Up to £1. income generation. Version 2 Updated November 2005 Prepared by IRW Finance 81 . • Delivering emergency aid to those affected by natural or unnatural disasters. The charitable objectives of Islamic Relief are: • Alleviating poverty and suffering of the world’s poorest people. 3.0 Islamic Relief Policy on Grants I. Procedure 1. but the information contained therein must be verified by the intended beneficiary. All Islamic Relief Offices/Partners that make grants must adhere to the Islamic Relief on Grants. water & sanitation. • All applications should be carefully considered taking into account the financial position of Islamic Relief with the purpose of request. When approving grants the following should be considered: • It remains the discretion of Islamic Relief who may receive a grant.

• Whether the application has been approved by the appropriate personnel. • Whether the purpose for which the grant requested is within Islamic Relief’s charitable. 6. the reasons for this decision must be written on the application form. or it is decided that the funds would go to third party bank account such as a hospital etc. Where the person requesting the grant is associated in any way with a committee member. If the payment is deemed to be a benefit to the employee by the tax authorities. The employee will need to be informed about potential tax implications. • In circumstances where criteria’s are not met. • • Version 2 Updated November 2005 Prepared by IRW Finance 82 .000 Authorised Approval Level Committee of the Board Management (BOM) of 4. The following parties must be notified to take appropriate measures: Human Resources & Accounts Department will need to be informed so that the necessary payroll adjustments.Sterling Amount Over £5. which can be processed. The grant application should be considered by an alternative approved staff member with no affiliation or association with the person in question. III.. Payments should be made by Cheque payment or bank transfer to the beneficiaries’ bank account. Transparency & Fairness Islamic Relief personnel are to ensure transparency & fairness cover the whole process: • • All grant applications are to be considered equally and fairly. 5. On approval the grant application form is to be submitted to the accounts department of Islamic Relief Office/Partner. The reason for acceptance or decline of the grant application should be clearly stated on the face of the grant application form. where the amount paid will be taxable and as such. Where the beneficiary does not have a bank account. grant application should be referred back to the committee chair. Any grants to staff would have tax implications according to prevalent relevant tax authorities. On receipt of the application form the Accounts department personnel should check: • Whether all the information contained therein has been completed.

trust deed (or equivalent) recent report & accounts. Utility Bill & recent bank statements. Identification required from individuals: Passport.Individuals Version 2 Updated November 2005 Prepared by IRW Finance 83 . Islamic Relief Grant Application Form . in order to preserve the breadth of its charitable activities. Driving Licence. identification of directors/trustees. identification from organisations Certificate of incorporation.IV. Conclusion Islamic Relief reserves the right to vary its policy in the light of particular circumstances.

ABOUT PEOPLE LIVING WITH YOU Full Name Date of Birth Relationship to You 3 .CONFIDENTIAL 1 .MONTHLY INCOME AND EXPENDITURE Are you in receipt of any income? (from job. rent.OTHER Version 2 Updated November 2005 Prepared by IRW Finance 84 . Please specify source and amount ________________________________________________________________ No. debt repayments etc) 4 .ABOUT YOU Title: Mr/Mrs/Miss/Ms/Dr/Other Surname First Name(s) Address Date of Birth Country of Birth Nationality Daytime telephone no. Please state amount of your total monthly expenditure _________________________ (bills. income support etc) Yes. Status in the UK Previous Occupation Current Occupation Marital Status: Postcode How long have you been in the UK? Asylum Seeker Refugee Indefinite Visa British Other (please specify) ___________________________________________________ Qualifications Single Separated Married Divorced Widowed Other (please specify) __________________________________ 2 .

proof of address.Accommodation Rented Council Accommodation Mortgage Owned Other (please specify) ____________________________________ Are you a student? Yes No Do you have any savings? If yes. how much was awarded to you? £ ___________ 7 .PREVIOUS GRANT APPLICATIONS Have you applied for financial help from Islamic Relief before? Yes No If yes.CHECKLIST / DOCUMENTS YOU HAVE PROVIDED IN SUPPORT OF YOUR APPLICATION N. Passport / Visa Bank Statements Medical Bills Immigration Papers Letter from College Disability Registration Card Payslips Letter from School Medical Report from Hospital Social Security Book(s) Rent/Other Payment Reference Letters Other (please specify) • Version 2 Updated November 2005 Prepared by IRW Finance 85 .B It is ESSENTIAL that a photocopy of your passport or visa. please indicate the level of your savings Yes No If yes. a reference and any other relevant documents which support your case are supplied with your application.000 How long is your course? ___________________________ What year of your course are you in now? ______________ 5 . please give date of previous application _______________________________ (month) (year) Granted Refused What was the reason for your previous application? Was this application granted or refused? If granted.YOUR REASON(S) FOR APPLYING FOR A GRANT Amount of Grant requested: £ Please explain in detail the purpose of your grant application: 6 . what are you studying? ________________________ Is your course Full-time Part-time less than £500 between £500-£1000 between £1000-£2000 Over £2.

___________________ Name ____________________ ______________________ Signature Date Version 2 Updated November 2005 Prepared by IRW Finance 86 .if so.8 -YOUR DECLARATION Has this form been completed for you by some else? No why Yes . please state by whom and ____________________________________________________________________________________ _______ I declare that I have read and understood the grant making policy on page 1 of this form and that the information I have supplied is correct and accurately reflects my current circumstances and my need for a grant.

Islamic Relief Grant Application Form . How will these aims and objectives be achieved through the programme proposed? Version 2 Updated November 2005 Prepared by IRW Finance 87 . Name of organisation: 2. Name of the proposed project: 3. What are the aims and objectives of the project? 5. Amount of Grant requested: • £ 4.Organisations CONFIDENTIAL 1.

• Version 2 Updated November 2005 Prepared by IRW Finance 88 .

What is your planned Monitoring and Evaluation of these expected outcomes? • Version 2 Updated November 2005 Prepared by IRW Finance 89 . What are the expected outcomes of this work? 7.• 6.

______________________________________ Name ____________________ Signature __________________ Date Version 2 Updated November 2005 Prepared by IRW Finance 90 . Details of your organisation Please give information on your organisation's main aims 9.8. YOUR DECLARATION I/We declare that I/We have read and understood the grant making policy on page 1 of this form and that the information I/We have supplied is correct and accurately the organisations need for a grant.

Signed by Grant Approval Committee 1. the committee members must ensure sight of the following original documents: For Individuals Passport Utility Bill Driving Licence Recent Bank Statements For Organisations Certificate of Incorporation or similar documentation Recent report & annual accounts Trustee Deed Identity documentation of Trustees/Directors/Owners/Key Personnel Retain copies of identification documents for Islamic Relief records. Grant Application Approved Declined Pending Reason for Decision: 5. EU. ____________________________ 2. Payment Method: ___________________________ 8. Identify clearly who run the organisation. 3. Check the UN.Islamic Relief Grant Application Assessment – Internal Use Only Date of Committee Meeting: ________________________________ Personnel Present _____________________________________________________________________ 1. Does the application meet the Islamic Relief criteria for grants? Yes No 4. Amount Granted: ___________________________ 7. 3. 2. _____________________ ____________________________ 91 Version 2 Updated November 2005 Prepared by IRW Finance . In order to protect Islamic Relief and to employ anti-money laundering criteria. USA Homeland Security websites for any matches to terrorist listings. Mach Yes No DO NOT proceed with grant if there is a match or there is uncertainty. Category of Grant ___________________________________ 6.

0 Appendices The following pages contain the Appendices to the Islamic Relief Financial Guidelines as listed below: • • • • • • • • • • • • • • • • • • • • • • Appendix A1 – Cheque Register Appendix A2 – Cash Payment Register Appendix B1 – Bank Accounts List Appendix B2 – Expenditure Approval Limit Appendix B3 – Transfer Request Form Appendix B4 – Purchase Request Appendix B5 – Supplier’s Details Appendix B6 – Bid Evaluation Form Appendix B7 – Purchase Order Appendix B8 – Goods Received Note Appendix B9 – Bank Payment Voucher Appendix B10 – Cash Payment Voucher Appendix B11 – Payment Check List Appendix B12 – Bank Receipt Voucher Appendix B13 – Cash Receipt Voucher Appendix B14 – Cash Receipt Appendix B15 – In Kind Donations Form Appendix B16 – Safe Replenishment Form Appendix B17 – Petty Cash Payment Voucher Appendix B18 – Petty Cash Float Replenishment Form Appendix B19 – Safe Cash Count & Reconciliation Appendix B20 – Cash Advance Request 92 Version 2 Updated November 2005 Prepared by IRW Finance .18.

• • • • • • • • • • • Appendix B21 – Staff Expenses Claim Form Appendix B22 – IOU’ Form Appendix B23 – Cash Handover Form Appendix B24 – Asset Handover Form Appendix B25 – Stock Request Form Appendix B26 – Bin Card Appendix B27 – Travel Request Form Appendix B28 – Travel Log Appendix B29 – Registration Form Appendix 30 – Aid Distribution Form Appendix 31 – Camp Aid Distribution Form Version 2 Updated November 2005 Prepared by IRW Finance 93 .

Appendix A1 Cheque Register Date Type Chq. Num Date Name Account Paid Amount TOTAL TOTAL TOTAL TOTAL TOTAL TOTAL TOTAL TOTAL TOTAL TOTAL TOTAL .

Num Date Name Account Paid Amount .Cash Payment Register Appendix A2 Type Chq.

Acronym 1 2 3 4 Bank Currency Account Number Type of Account Address Appendix B1 Manager Contact Person Signatories Remarks Position Position .BANK ACCOUNTS LIST ISLAMIC RELIEF <BRANCH> No.

Finance Manager (ie. Admin Project Coordinator and Officer and Finance Manager (ie. Finance Manager and Country Director Project Coordinator.EXPENDITURE APPROVAL LIMIT ISLAMIC RELIEF <BRANCH> Appendix B2 Category 1 Expenditure Limit 0< range <max limit Approval Required for Country Office Department Manager and Admin Officer Approval Required for Regional and Sub Offices Project Coordinator. FM at FM at Country Office) Country Office) Purchase Committee at Country Office Project Manager. 2) The requesting department manager 3) Programme Manager 4) Finance Manager 5) CD . Finance Manager and Country Director Three Quotations 3 min limit2 <range< max limit2 Purchase Committee* Three Quotations 4 min limit3 and above EXCOM at IRHQ EXCOM at IRHQ EXCOM at IRHQ Three Quotations * Note: Members of the Purchase Committee are: 1) A person who has technical knowledge about the product. Admin Officer and Finance Officer Exceptions during Emergencies Project Coordinator and Finance Officer Requirements none 2 min limit1 <range< max limit1 Department Manager.

Project PIN Project Name Budget Previously Trasferred Transfer Request Balance Percentage left COMMENTS TOTAL Prepared by Checked / Controlled by Approved by Position Position Position (Date: ) (Date: ) (Date: ) .TRANSFER REQUEST FORM ISLAMIC RELIEF <BRANCH> Currency: Date: Appendix B3 Comments: No.

Unit Price Qty Total Budget Code ONLY ONE PROJECT PER SHEET Sub Total Tax Total 0.00 Prepared by Checked / Controlled by Approved by Position (Date: ) Position (Date: ) Position (Date: ) Quickbooks transaction No.: PR Department Project Purpose DATED : DATED : Appendix B4 Applicant Signature Budget Managers Certification Delivery Address No.00 0. Description Est.PURCHASE REQUEST ISLAMIC RELIEF <BRANCH> Applied by: Date: Request No. .

Type of Business Type of Product/Service . Contact E Mail Bank Name & Address Bank Account No. Contact Fax No.SUPPLIER'S DETAILS ISLAMIC RELIEF <BRANCH> Name of Business Registration Number Appendix B5 Address Town/City Region/Postcode Contact Person Contact Telephone No.

BID EVALUATION FORM ISLAMIC RELIEF <BRANCH>
PR REFERENCE: PR Prospective Supplier Description Supplier A Unit Price Total Supplier B Unit Price Total

Appendix B6

No.

Qty

Supplier C Unit Price Total

Supplier D Unit Price Total

Supplier E Unit Price Total

Sub Total Tax Total

Sub Total Tax Total

Sub Total Tax Total

Sub Total Tax Total

Sub Total Tax Total

Purchase Committee Decision: The Selected Supplier is Reason for Selection:
1) _________________________________________________________________________________________________________________________________ 2) _________________________________________________________________________________________________________________________________ 3) _________________________________________________________________________________________________________________________________ 4) _________________________________________________________________________________________________________________________________

Approval by Purchase Committee Members:
(Name: (Post: ) ) (Name: (Post: ) ) (Name: (Post: ) ) (Name: (Post: ) ) (Name: (Post: ) )

(Date:

)

(Date:

)

(Date:

)

(Date:

)

(Date:

)

PURCHASE ORDER ISLAMIC RELIEF <BRANCH>
Applied by: Date:

Appendix B7

Order No.: Department Project Suppliers Name Supplier Address Budget Managers Certification
DATED :

Suppliers Invoice No.
Delivery Address

No.

Description

Unit Price

Qty

Total

Budget Code

Sub Total
ONLY ONE PROJECT PER SHEET

0.00

Purchase Ledger Checked

Tax Total 0.00

Prepared by

Checked / Controlled by

Approved by

Position (Date:

)

Position (Date:

)

Position (Date:

)

Quickbooks transaction No.

GOODS RECEIVED NOTE ISLAMIC RELIEF <BRANCH>
PO Reference Vehicle No.:
Date Received: GRN No.:

Appendix B8

No.

Description

Unit of Measure

Qty

REMARKS

Received by;

Good Delivered by

(Storekeeper) (Date: ) (Name: (Date:

(Driver) ) )

: _______________) □ Bank TFR (Ref. Payent received by. Dated Prepared by Checked / Controlled by Approved by Position (Date: ) Position (Date: ) Position (Date: ) . Description Reference Amount Project Account Code Quickbooks transaction No.: _________________) □ DD (Ref.: ____________________) □ Others: ____________________ PAYMENT MADE TO: Recipient Bank Account DETAILS OF PAYMENT No.BANK PAYMENT VOUCHER ISLAMIC RELIEF <BRANCH> Date: Currency: Voucher No.: Appendix B9 BPV Bank Account □ Bank Account 1 □ Bank Account 2 □ Bank Account 3 □ Bank Account 4 Mode of Payment □ Cheque (No.

Dated Prepared by Checked / Controlled by Approved by Position (Date: ) Position (Date: ) Position (Date: ) . Payent received by. Description Reference Amount Project Account Code Quickbooks transaction No.CASH PAYMENT VOUCHER ISLAMIC RELIEF <BRANCH> Date: Currency: Voucher No.: Appendix B10 CPV PAYMENT MADE TO: DETAILS OF PAYMENT No.

Limits (to be set) only 1.4.Islamic Relief Payment Check list (internal control document) Please tick accordingly.6.7 of these documents needed Category 2 : Department manager.Limits to be set Category3 : Purchase committee(see expenditure approval more details) Three quotations neccesary . if documents are present List of documents to be prepared 1 2 3 4 5 6 7 Purchase requisition Quotations Bid evaluation analysis Purchase order Goods received Note Invoice Payment Voucher Category 1 Category2 Appendix B11 BPV:……………………… category3 Category4 Comments if documents missing or otherwise Category 1 : Approval required by Department manager and Admin office .5.Limits to be set Category4: ExCOM at IRHQ . Finance manager and country Director Three quotations neccesary .

Received From: CHEQUE NUMBER BANK NAME Received for 1 Project Name and ID Amount 2 3 Others Total Amount Received Prepared by Checked / Controlled by Approved by Position (Date: ) Position (Date: ) Position (Date: ) .: Appendix B12 BRV Currency received or equallant local currency rate Quick Books Transaction No.BANK RECEIPT VOUCHER ISLAMIC RELIEF Date: Currency transferred Voucher No.

Description Reference Amount Project Account Code Quickbooks transaction No. Prepared by Checked / Controlled by Approved by Position (Date: ) Position (Date: ) Position (Date: ) .: Appendix B13 CRV RECEIVED FROM RECEIPT DETAIL No.CASH RECEIPT VOUCHER Date: Currency: Voucher No.

Verified by.CASH RECEIPT ISLAMIC RELIEF <BRANCH> Date: Currency: Voucher No. Position (Date: ) Position (Date: ) Position (Date: ) CASH RECEIPT ISLAMIC RELIEF <BRANCH> Date: Currency: Voucher No. Position Position Position . Verified by. Received with thanks from Received For Received by. Received For Received by.: Appendix B14 CRV Total Amount Received: Quickbooks transaction No. Handed by. Handed by.: CRV Total Amount Received: Received with thanks from Quickbooks transaction No.

Ref.name.IN KIND DONATIONS FORM ISLAMIC RELIEF <BRANCH> Donor ID Donor's Name Sending Address Appendix B15 Date Reference Donor Doc. GRN Ref. sign & dated) (IR Programme Manager/Coordinator . No. IKD Receiving Address Type of Donation Restrictions food supplies/medicines/clothes/etc. Description Unit of Measure Qty Estimated Market Value REMARKS Confirmation of In Kind Donation Confirmation of Receipt of In Kind Donation (Donor Representative .sign & dated) Prepared by Checked / Controlled by Approved by Position (Date: ) Position (Date: ) Position (Date: ) .

SAFE REPLENISHMENT FORM ISLAMIC RELIEF <BRANCH> Date Reference Currency ONLY ONE CURRENCY PER SHEET Appendix B16 STFR Date Details Safe Opening Balance Amount Budget Balance Monthly/weekly Cash Requirement Safe Closing Balance TOTAL Prepared by Checked / Controlled by Position (Date: Approved by ) Position (Date: ) Position (Date: ) .

Description Reference Amount Project Code Account Code Prepared by Checked / Controlled by Approved by Position (Date: ) Position (Date: ) Position (Date: ) Quickbooks transaction No.: Appendix B17 PCV PAYMENT MADE TO: DETAILS OF PAYMENT No.PETTY CASH PAYMENT VOUCHER ISLAMIC RELIEF <BRANCH> Date: Currency: Voucher No. .

PETTY CASH FLOAT REPLENISHMENT FORM ISLAMIC RELIEF <BRANCH> Date Week No. Currency No. 1 2 3 4 5 6 7 Denominator x x x x x x x TOTAL PETTY CASH BALANCE FLOAT LEVEL AMOUNT OF TOP UP REQUESTED Note: The petty cash must be counted on the same date as the date of this document. Prepared by Checked / Controlled by Quantity Total Appendix B18 Position (Date: Approved by ) Position (Date: ) Position (Date: ) .

_______________________________ 4. _______________________________ 7.SAFE CASH COUNT & RECONCILIATION ISLAMIC RELIEF <BRANCH> No. _______________________________ DIFFERENCE AFTER RECONCILIATION Prepared by 0 Checked / Controlled by Approved by REMARKS *Note: The Balance of Cash in Safe Counted and the Balance in Cashbook must be based on the same date as the date of this document. 1 2 3 4 5 6 7 Denominator x x x x x x x TOTAL CASH IN SAFE* CASH BOOK BALANCE* DIFFERENCE RECONCILIATION: 1. _______________________________ 2. _______________________________ 3. Quantity Total Appendix B19 Date Week N Currency Position (Date: ) Position (Date: ) Position (Date: ) . _______________________________ 5. _______________________________ 6.

.: CAV Department Position Project Appendix B20 Advance requested by Approved by Currency: Position Amount Requested: Purpose of Advance DETAILS OF ADVANCE No. Description Amount Project Account Code TOTAL EXPENSED AMOUNT RETURNED BALANCE OWED TO IR/STAFF Prepared by Checked / Controlled by Approved by Position Position Position (Date: ) (Date: ) (Date: ) Note: Please ensure that you have the relevant supporting documents before such as applying for the advance such as Travel Request Form for travel advances and Purchase Requisition/Order for purchases.CASH ADVANCE REQUEST ISLAMIC RELIEF <BRANCH> Applied by: Date: Advance No. DETAILS OF EXPENSES No. Description Amount Project Account Code TOTAL REQUESTED ADVANCE SETTLEMENT: Quickbooks transaction No.

SE Applied by: Applicant Signature Department DATED : Budget Managers Certification Payment Method: (please tick) Cash Cheque BACS DATED : No. Description DETAILS OF PAYMENT Reference Amount Project Account Code Quickbooks transaction No.STAFF EXPENSES CLAIM FORM Appendix B21 ISLAMIC RELIEF <BRANCH> Date: Currency: Claim No. Prepared by Checked / Controlled by Approved by Position (Date: ) Position (Date: ) Position (Date: ) .

: IOU Department Appendix B22 IOU Requested / prepared by AMOUNT REQUESTED Purpose of IOU AMOUNT TAKEN Cash Received by.IOU' FORM ISLAMIC RELIEF <BRANCH> Applied by: Date: IOU No. Position Position Position IOU SETTLEMENT: Quickbooks transaction No. AMOUNT RETURNED TO IR/(REFUNDED TO STAFF) AMOUNT SPENT Receipt & cash Received by. Control / checked by Position (Date: ) Position (Date: ) . Paid by Approved by.

1 2 3 4 5 6 7 Denominator x x x x x x x TOTAL HANDED OVER Paid by Quantity Total Department: Appendix B23 Cash Received by.CASH HANDOVER FORM ISLAMIC RELIEF <BRANCH> Date: Ref. Position (Date: Approved by.: The following cash has been handed over to: Staff Name: Position: No. ) Position (Date: ) Position (Date: ) .

ASSET HANDOVER FORM ISLAMIC RELIEF <BRANCH> Name_________________ Project________________ Designation________________________ Location___________________________ Appendix B24 I am handing over the following assets of Islamic Relief on the approval of the competent authority to the following persons Date Asset Code Asset Name Handed over To: Signature of Receiver Prepared by Checked / Controlled by Position (Date: Approved by ) Position (Date: ) Position (Date: ) .

STOCK REQUEST FORM ISLAMIC RELIEF <BRANCH> Reference: Applied by: Department Project Store ID Purpose: DATE : SR Date: Appendix B25 Project Coordinator Certification Budget Code No. Code Description Qty Requested Qty Despatched COMMENTS Authorised by. Received by. Handed over by: AID HANDOVER Received by: (Storekeeper) Date (Recipient) Date (Name: (ID: (Date: ) ) ) (Name: (ID: (Date: ) ) ) .

ISLAMIC RELIEF <BRANCH> BIN CARD Store Item name Unit Item Description: Location Item Code Max Min No. . Date Note # Quantity Received Quantity issued Balance Checked by.

Date return:……………………….. SL Staff Name Designation Current station Destination Duration Purpose 1 2 3 4 Prepared by Checked / Controlled by Approved by Position (Date: ) Position (Date: ) Position (Date: ) .TRAVEL REQUEST FORM ISLAMIC RELIEF <BRANCH> Appendix B27 Date of Start:……………………………………. Mode of travel :………………………………………………………….Date of arrival :…………………………………..

Ref. Cash Adv. Date& Time Depart Date & Time Return Approval Comments Prepared by Verified by . Request ed by Participants Project Purpose of Travel Mode of Transport Stock Req.TRAVEL LOG FOR JANUARY 2005 Appendix B28 ISLAMIC RELIEF <BRANCH> Travel Ref. Ref.

REGISTRATION SHEET CAMP: LOCATION: Date : Reg# Name of House Hold Plot No. M 0001 0002 0003 0004 0005 0006 0007 0008 0009 0010 0011 0012 0013 0014 0015 0016 0017 0018 0019 0020 0021 0022 0023 0024 0025 0026 0027 0028 TOTAL SC = Separated children UM= Un.accompanied Minors 0 0 Camp Supervisor: Appendix B29 Registering Clerk: HH Size F T 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 <5 HH age group 5-18 19-59 ≥60 Origin Arrival Date Vulnerability & Remarks 0 0 0 page 1 UE= Unaccompanied elder FH= Female Headed .

AID DISTRIBUTION FORM ISLAMIC RELIEF <BRANCH> DATE PROJECT LOCATION Distributed by: Unit of Measure Type of Items Distributed No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 Name Quantity Recipient Signature Comment .

M HH Size F T 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 <5 HH age group 5-18 19-59 ≥60 Quantity Recipient Signature Remarks 0001 0002 0003 0004 0005 0006 0007 0008 0009 0010 0011 0012 0013 0014 0015 0016 0017 0018 0019 0020 0021 0022 0023 0024 0025 0026 0027 0028 TOTAL 0 0 0 0 0 0 0 .CAMP AID DISTRIBUTION SHEET CAMP: LOCATION: Distribution Date Distributed by: Unit of Measure Time Appendix B31 Type of Items Distributed Reg# Name of House Hold Plot No.

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