Action Aid Financial Policy and Procedures Manual establishes the financial standards and policies for the entire organization. The policy is designed to set out the guidelines of executing and monitoring the daily financial operations of the organizations. The fundamentals of effective financial management include:
• Financial accountability
• Internal controls
• Recording financial events
• Audit of financial statements
• Budgeting and planning
• Treasury management
• Reporting financial information to AAI and donors
The objective of Financial Accountability are:
• Protect the integrity and credibility of the organization and the people involved in money management
• Ensure that each person involved in the financial operations of the organization is accountable for his/her actions
• Prevent the misuse of funds, whether intentional or unintentional
The internal controls is a system of controls, established by management to:
• Carry out financial operations in an orderly manner consistent with prevailing system of the country.
• Ensure that the financial policies and procedures adhere
• Ensure that expenditure incurred for the purpose has been stated
• Safeguard the funds & assets of the organisation
• Ensure that the financial reporting is accurate, relevant, timely and reliable and on time
Recording Financial Events involve ensuring that every transaction of the organisation is recorded, supporting documents are easily accessible, and all transaction documentation are original.
Action Aid Bangladesh has an internal audit unit and an external audit. The internal audit sets out procedures for handling fraud and irregularities. The external audit comprises of legal requirements, governance and third party requirements eg. donors.
Planning & budgeting is a process that includes creating a financial plan of action that an organization believes will help it to achieve its goals.
• Entails allocating available resources among potential activities to achieve organizational objectives
• Often serves as the basis for evaluating actual performance
Treasury Management entails the day-to-day balancing of the organization’s fund requirements ensuring that there are always sufficient funds available to pay accounts, services, salaries, etc. on due dates.