PART 1

1. Identify where you can acquire the best information to assist you in getting a
detailed understanding of the budgetary requirements

To acquire the best information to assist me in getting a detailed understanding

of the organisation’s budgetary requirements, I have to always monitor the
organisation’s financial records and how cash and non-cash resources are being
utilized in the past. In this manner, I can make an improved plan in order to
maximize the organisation’s resources.

A. The following are the financial records that I have to record and monitor:
Please see attached spreadsheet ​(PART 1 SPREADSHEETS)
● Cash Flow
● Start-up Cost
● Balance Sheet
● Profit and Loss Statement & Financial Projection

B. Relevant Personnel
● Financial Managers, Accountants, Financial Controllers
➢ Responsible for the monitoring and reporting of the
organisation’s financial condition
➢ Help the organisation meet its financial needs
➢ Prepare financial reports that summarize or forecast the
organisation’s financial position.

● Supervisors and other frontline managers (project managers)

➢ Monitor how their project’s allocated resources are being
utilized
➢ Ensure that budgets requested are being liquidated in a
timely manner.
 C. Financial Support Systems in the Organisation
● Access to specialist advice
➢ Seeking the guidance and advice of specialists and experts
is very beneficial to the organisation as they would have a
better knowledge on regulatory requirements and other
government reportorial fundamentals.

● Documentation of Procedures
➢ The organisation will have Manual of Operations where all
policies and procedures are collated.
➢ This is to guide the organisation’s personnel and staff on the
standard operating procedures of tasks and projects.

● Information Briefings/ Sessions

➢ This is to keep all personnels involved in a project updated
on new policies and at the same time they can report on the
financial and operational status of projects handled.
➢ This also provides a channel for delivering clear messages
and encouraging transparent and open communication.

● Intranet-based Information
➢ This is a useful business tool for the organisation as this
would provide better internal communication.
➢ Employees of the organisation would have access to
corporate information, memos, news and announcements.

● Training
➢ Employees attending various training and coaching
programs would be very important for the organisation as
this would help the staff gain updated knowledge and skills
on how to perform their tasks effectively.

2. Accounting Principle the Organisation will use.

● ACCOUNTING ON ACCRUAL BASIS

➢ This accounting principle provides a more complete picture of
monthly or quarterly financial statements, allowing me to acquire a
more complete view of the organisation’s financial position.
 ➢ Fund Accounting is a modified accounting on accrual basis for
non-profit organisations. As a non-profit organisation expands, its
funding sources will become diversified. The organisation may
receive multiple grants from different sponsors/ companies,
government cash grants, personal cash or in-kind donations from
various individuals or civic organisations.
➢ Fund Accounting would be very useful for non-profit organisations
as its basic idea revolves around the monitoring and documenting
the use of assets and resources that are donated by outside
parties.
➢ Since the organisation has three major programs, fund accounting
principles would be applied in order to trace and monitor how funds/
resources from a certain donor are being utilized on a certain
program or across programs.
➢ Fund Accounting is very detailed and can get very confusing and
may compromise the comprehensibility of the information.

3. Relevant Tax Legislation

● Registered and accredited non-profit organisations that are charitable in
nature and engage in activities for public and private interests without
pursuing the goal of commercial or monetary profit have an income tax
exemption.
● To be given a tax exemption, the organisation must meet the accreditation
criteria of the Philippines’ Bureau of Internal Revenue (ATO’s Philippine
counterpart) through the Philippine Council for NGO (Non-governmental
Organisation) Certification.
● An accredited non-profit organisation can issue a Certificate of Donation to
its donor so they can claim tax benefits from the Bureau of Internal
Revenue.
● The employees of the organisation shall be subjected to payroll tax while
consultants and service providers’ (doctors, dentists, facilitators)
professional fees shall be subjected to a 10% mandatory Withholding Tax
Expanded.
 PART 2

1. Legal Requirements for financial activity, reporting and auditing

● Banking
a. Bank statement - indicates and reports the balances and transactions
of the organisation.
b. Checkbook - regular balancing the organisation’s checkbook in order
to avoid unnecessary fees and overdraft charges.
c. Bank Reconciliation - helps in identifying any unusual transactions that
might be caused by fraud or accounting errors within the organisation
and helps in identifying inefficiencies.
d. Banking proof of transaction (receipts)- ​serves as proof that the bank
acknowledged that a transaction took place

● Ensuring Security, Accuracy and Currency of Financial Operations

a. Auditor’s Report - the organisations’ internal auditor’s report in
comparison with the report from an external auditor in order to ensure
check and balance.
b. Audited Financial Statements - gives a detailed overview of how the
organisation is working financially.
c. Accomplishment Report and Liquidation of Funds - project
implementation person-in-charge shall give a monthly accomplishment
report which will determine the effectiveness of the programs to the
beneficiaries and also a liquidation report of funds requested to carry
out implementation tasks.

● Invoicing Clients
When a donation is made to the organisation, an Official Receipt shall be
issued to the donor. The following requirements/information must be
reflected in the official receipt:
a. Name of the Organisation
b. Address and Contact Number
c. Taxpayer’s Identification Number of the Organisation
d. Date of the Transaction
e. Donee/ Payor
f. Amount Paid written in figure and words
g. Taxpayer’s Identification Number of the Donor/Payor
h. Address of the Donor/payor
 i. Check Details (Bank and Branch, Date of Issue, Check Number) for
check payments

● Maintaining journals, ledgers, and other record keeping systems

Computerized Books of Accounts - these are generated through the
use of Computerized Accounting Systems that are duly registered with the
Bureau of Internal Revenue.
- Entries in the books of accounts (Ledger, journals) have to be
supported with documents and papers like invoices, official
receipts, vouchers and other documents that would serve as
evidence of completed business transactions.

● Maintaining a Petty Cash System

a. Petty Cash Voucher - a form that is used to document a disbursement
from the petty cash fund.
b. Official Receipts, Acknowledgment Receipt, Proof of Transaction-
used as evidence that the disbursed amount was used for the
business.
c. Petty Cash Fund Summary - made by the petty cash custodian when
the petty cash fund runs low and will be used as a supporting
document in requesting for a replenishment of the fund.

● Purchasing and Procurement

a. Canvassing - used in the procurement process and identifies the
criteria in order to identify the best supplier that can include price,
supplier terms, and other additional services offered. This will be used
for small value procurement (e.g. medical instruments, office
equipment)
b. Competitive Bidding - will be used for high value procurement which
will include a formal bid to ensure the best quality price, services and
terms (e.g. construction of a new building or facility)
c. Purchase Orders - legally binding document with the supplier outlining
the items to be purchased, price point, delivery date and payment
terms.
 ● Salaries and Wages Record Keeping
a. Contract of Employment - signed document that indicates the
employee’s commencement date, salary rate, type of employment
(project based, full-time, part-time, casual)
b. Payslip - indicates the employee’s gross and net pay, deductions,
amount paid for mandatory government contributions and taxes, and
leave details.

2. Records that will be issued/received/maintained to remain compliant with legal

requirements (in spreadsheet format)

Please see attached spreadsheet ​2.2 - Records

3. Key Requirements and Activities for Financial Record-keeping and Auditing in

“Standard Operating Procedure” Format

● BANK STATEMENT

Person/ Department Responsible : Accounting Department

Procedure :
1. Request a bank statement every month.
2. Keep a hard copy and soft copy of the bank statement. The soft
copy must be saved in the accounting record system.
3. The bank statement shall be kept for a year. After a year, hard
copies can be shredded while soft copies shall be kept in the
system.
4. Check bank statements regularly to verify credit and debit activity of
the organisation.

● FINANCIAL REPORTS

Person/ Department Responsible : Accounting Department

Procedure :
1. Financial Reports such as Cash Flow, Balance Sheet, Financial
Statement, Profit and Loss Statement has to be labeled properly
indicating the financial year
 2. Hard copies of the financial reports have to be kept in a secure
filing cabinet. These have to be kept for at least five years.
3. Soft copies have to be stored in the accounting system with backup
files stored in the cloud.

● INVOICES AND RECEIPTS

Person/ Department Responsible : Accounting Department

Procedure:
1. Copies receipts and invoices (hard copies) issued by the
organisation shall be kept and and labeled with the month and year
they were issued.
2. Receipts and Invoices (hard copies) received by the organisation
shall be attached to the request for payment or check voucher as
proof that payment has been made.
3. Official receipt and Invoice Numbers and the nature of the
transaction shall be recorded electronically in the accounting
system for faster tracking.

● LEDGERS AND JOURNALS

Person/ Department Responsible : Accounting Department

Procedure:
1. Have the computerized accounting system accredited by the
Bureau of Internal Revenue (BIR)
2. Keep backup copies of books of accounts in the cloud in case the
computerized accounting system crashes
3. Keep supporting documents like receipts, invoices, vouchers as
they are proof of transactions of the entries in the books of
accounts. These will be checked by the BIR during Accreditation of
the organisation which takes place every three to five years.

● PETTY CASH RECORDS

Person/ Department Responsible : Accounting Department, Petty Cash

Custodian, all staff
Procedure:
1. A Petty Cash Fund of Php 5,000.00 shall be used by the
organisation.
 2. The petty cash custodian shall handle transactions of the petty
cash fund
3. Petty cash disbursement shall be kept at a maximum of Php 500.00
per transaction.
4. A petty cash voucher signed by the petty cash custodian and the
requesting staff shall be completed indicating the purpose of the
request and proof of transaction shall be attached (official receipt,
acknowledgment receipt.
5. The petty cash custodian shall submit a Petty Cash Summary in
order to have the Petty Cash Fund Replenished
6. The Petty Cash Summary shall be reviewed by the Accounting
Department to make sure that the transactions are completed.
7. The Accounting Department shall replenish the Petty Cash Fund.

4. Key Roles and Responsibilities that will be included in a financial management

process in Spreadsheet format

Please see attached Spreadsheet ​2.4 - Key Roles and Responsibilities

 PART 3

1. Methods to monitor and report on expenditure and control costs of the

organisational business activities.

● Preparation of Key Financial Statements

➢ Includes balance sheets, income statements, profit and loss
statements, cash flow statements
➢ These key financial statements have to be updated regularly. A
quarterly reporting shall be done in order to monitor the
organisation’s financial position.
➢ Proof of transactions have to be safely kept and labeled
accordingly.

● Preparation of Inventory Records

➢ Utilization of an Inventory Report in order to take into account the
organisation’s supplies.
➢ Inventory includes materials, instruments and equipment used for
implementation indicating its status (if it needs to be repaired).
Office supplies and equipment are also included in the report.
➢ Inventory Reports will be used as reference on future purchases of
supplies.

● Analysis of Marketing Expenses

➢ Marketing is important for the organisation as it assures the
supporters and donors that the beneficiaries benefit from the
organisation’s programs.
➢ Marketing reports have to be prepared by the marketing personnel
indicating the marketing expenses and the impact of the marketing
activity to the organisation.
➢ Marketing expenses for non-profit organisations have to be kept in
a minimum and budget allocated to marketing activities have to be
spent in a way that reinforces trust.

● Analysis of HR
➢ Human Resources are very crucial for the organisation
 ➢ Analysis of HR especially employee engagement and performance
are very important in order to attract, manage and retain employees
which would eventually improve ROI.

● Dispute Resolutions
➢ Mediation - a mediator or a neutral third party works with the
conflicting parties or helps the disputants to vent their feelings and
fully explore their grievances in order to come to a consensus on
their own that is sustainable, voluntary and non-binding.
➢ Arbitration - a neutral third party/ arbitrator serves as a judge and
listens as each disputant argues and presents evidence in order to
resolve the dispute by rendering a binding decision.
➢ Litigation - a judge or a judge and jury weighs all evidence and
makes a ruling.

2. Support and monitoring system the members of the organisation will use to
ensure accuracy and correctness

● Support from a consultant/ expert

● Documentation of Procedures or Manual of Operations which all members
all have access to. It contains all organisational procedures and policies to
make sure that members of the organisation are guided accordingly.
● Briefings and sessions shall be done especially when the organisation
implements a new policy or procedure in order to inform them on how
these new procedures would affect them and their responsibilities.
● Training and coaching would update the employee’s on new methods of
doing their tasks.
 3. Contingency Planning

Risk Description Likelihood Impact if Person Contingency Plan

of risk Risk Responsible
Occurring Occurs
Not enough funds to Medium High Executive ● Seek the support of other
complete the project Director and funding entities like
Project corporations, private
Manager individuals, civic
organisations and
government agencies
● Seek free-of-charge
services from volunteer
service providers
Low Client Low Medium Project ● Go to Local government
Application Rate Manager units in order to identify
and Project communities and
Staff individuals needing and
deserving of free basic
health-care services.
Client's quality of life Low High Project ● Diligently conduct
doesn't improve Manager monitoring of clients and
and Project constantly update case
Staff summary.