Small Enterprise Finance Agency

Transcription

1 Small Enterprise Finance Agency Title: Procedure ID No.: Relevant to: Purpose: sefa sefa-finance-2015-fpr0002 All Staff The purpose of the petty cash procedure is to support the implementation of the petty cash policy in respect of small and unusual expenses where it is not practical and cost efficient to follow the normal procurement process. Approval Approved by the Executive Committee on 8 December 2015

2 DOCUMENT CONTROL Procedure owner: sefa CFO Status: Draft Date Approved: 8 December 2015 Responsible business unit: Financial Accounting Approved by: Executive Committee Effective date: 8 December 2015 Version: 01 File number: sefa-finance-2015-fp-0002 Next review date: 9 December 2016 or earlier if necessary REVISION RECORD Date Version Revision description 8 December 2015 New Page 1 of 15 sefa-finance-2015-fp December 2015

3 Definitions & Acronyms Card Accountability vs Responsibility Cardholder DOA EXCO Functional area Guidelines IFRS Key Stakeholders Legislation Petty Cash Petty Cash Administrator PFMA In the context of this policy card refers to the bank card to be utilised for petty cash purposes The main difference between responsibility and accountability is that responsibility can be shared while accountability cannot. eing accountable not only means being responsible for something but also ultimately being answerable for your actions. Also, accountability is something you hold a person to only after a task is done or not done. Responsibility can be before and/or after a task. Any employee to whom a card has been issued to. Cardholders automatically qualify to act as petty cash administrators. Delegation of Authority Document approved by the sefa oard of Directors Executive Management Committee of sefa Functional areas are teams of employees who have similar functions, for example Finance and Marketing. Information that is non-binding that assists the user to undertake the procedure. International Financial Reporting Standards The key stakeholders are those directly affected by a policy, including those responsible for implementation and compliance monitoring, and must be consulted during development or revision of the policy and its associated procedures. Laws made by parliament in the form of Acts and Regulations. Cash available at Petty Cash Administrator for utilisation on small and unusual expenses where it is not practical and cost efficient to follow the normal procurement process and doing so without compromising the control processes and the amount does not exceed the threshold in the Procurement Policy. An employee that is responsible and accountable for managing and safeguarding petty cash at any given time. The Public Finance Management Act, Act 1 of 1999 as amended by Act 29 of 1999 as it pertains to SCM, as applicable to a Schedule 2 Public Entity. Policy Policy Owner Procedure Policies give effect to the strategy of sefa and guide the whole direction and culture of sefa. Policies must be understood, complied with implementation across sefa sites. It a concise, formal and mandatory statement of principles which provides a framework for decisionmaking and a means by which sefa reduces institutional risk. The Policy Owner is the functional area responsible for the development, oversight and review of policy. Procedures are documents that support policy implementation and state the details of how the policy must be implement. Procedures may be in the form of guidelines or instructions and are often found in manuals that outline the administrativel and operational activities of a functional area or branch office. The mandatory steps required to implement and comply with a policy and meet its intent. Procedures specify who does what and when. They may be reviewed and revised more frequently than policies. Page 2 of 15 sefa-finance-2015-fp December 2015

4 Responsibility Standards The functional area position or unit responsible for monitoring implementation of and compliance with the policy and its associated procedures. A standard is an accepted specification defining material, methods, processes and practices, or outcomes, to ensure that consistent and acceptable levels of quality, performance, safety and reliability are achieved. Page 3 of 15 sefa-finance-2015-fp December 2015

5 Table of contents 1. INTRODUCTION ACCOUNTAILITY & RESPONSIILITY SOURCE DOCUMENTS USED THE PROCEDURE ANK CARD APPLICATION AND ACKNOWLEDGEMENT OF DET PETTY CASH PURCHASES PETTY CASH WITHDRAWALS AND MONTHLY LIMIT MONITORING RECONCILIATIONS, COUNTS AND REPORTING TEMPORARY CHANGES IN PETTY CASH ADMINISTRATOR FINANCIAL ACCOUNTING LOST OR STOLEN CARDS AND LOSS RECOVERY EMPLOYEE RESIGNATION PROCEDURE IMPLEMENTATION COMMUNICATION AND TRAINING PROCEDURE MONITORING PROCEDURE REVIEW ANNEXURE A: PETTY CASH PROCESS FLOW ANNEXURE : ANK CARD LIMITS ANNEXURE C: LIST OF ITEMS INCLUDED AND EXCLUDED FROM THE PETTY CASH PROCEDURE ANNEXURE D: LIST OF AUTHORISED ANK SIGNATORIES Page 4 of 15 sefa-finance-2015-fp December 2015

6 1. Introduction The Small Enterprise Finance Agency (sefa) (the Procedure) supports the implementation of the petty cash policy in respect of small and unusual expenses where it is not practical and cost efficient to follow the normal procurement process Accountability & Responsibility A = Accountable / R = Responsible Activity / Task AO RA AG DH/RM HFA 1. ank Card Application R A 2. Authorization of ank Card Application A 3. Use of ank Card A R 4. Authorization of petty cash transactions A 5. Card cancellation A R 6. Cash on hand R A 7. Financial Accounting R A A AO Accounting Officer AG Accountant: General Ledger RM Regional Manager RA Regional Administrator DH Divisional Head HFA Head Financial Accounting 1.2. Source Documents Used i. Acknowledgement of debt: a form to be signed by each cardholder and petty cash administrator to indemnify sefa against any loss suffered as a result of negligence. ii. iii. iv. ank Card Application Form: this document is used to apply for a new card to be issued. An internal document will be used by sefa and the bank s application form will be used externally. Cash Count Certificate: this is a schedule used by the Accounting Officer to record the counting of the coins and notes on hand; Card Cancellation Form: This is the internal form used to inform the Accountant: General Ledger or a card cancellation either due to resignation or due to a card being lost, stolen or compromised. Page 5 of 15 sefa-finance-2015-fp December 2015

7 v. Card Withdrawal Requisition: this document is used to obtain authorization to withdraw cash from an ATM to fund the petty cash box. vi. vii. viii. ix. Database of approved cardholders: this is a register containing details of all cardholders. Monthly Reconciliation Template: transactions are summarised on a monthly basis on a template issued by the Accountant: General Ledger. Petty Cash Administrator Registration Form: this form is used to obtain approval from the Chief Financial Officer for an employee to act as a petty cash administrator. Petty Cash Purchase Requisition: this document is used to obtain authorization to initiate a petty cash purchase. 2. The Procedure 2.1. ank card application and acknowledgement of debt i. The application for a ank card must be in line with the Petty Cash Policy number sefa- Finance-2015-FP0002; ii. The application for a new card must be initiated by completing a ank Card Application Form. The form must be duly completed by the Regional Administrators or Accounts Officer at Head Office and authorised by Regional Manager and Head of Financial Accounting for Head Office in line with the Petty Cash Policy. The original approved requisition must be submitted to the Accountant: General Ledger for processing; iii. The Accountant: General Ledger must enter the new application in the database of approved cardholders and complete the application forms issued by the bank; iv. The list of approved cardholders must be reviewed on a monthly basis by the Financial Accountant on a monthly basis and signed as proof of review; v. The Accountant: General Ledger must send the bank s application form signed by the Head of Financial Accounting and another authorised signatory (as contained in Annexure D of this document) to the bank; vi. The business banker must process the application and must notify the Accountant: General Ledger when the card will be issued; vii. Cards must be delivered directly to the cardholder; viii. Each applicant must sign for acceptance of the card; ix. The cardholder must also sign an acknowledgement of debt to cover potential losses suffered by sefa which must be filed by the Accountant: General Ledger Petty cash purchases i. Petty Cash purchases must be in line with the Petty Cash Policy number sefa-finance FP0002, with specific reference to purchases included and excluded as contained in Annexure C to this procedure; Page 6 of 15 sefa-finance-2015-fp December 2015

8 ii. The person requiring goods or services to be purchased must complete a petty cash purchase requisition, which must be approved by the Regional Managers at regions and Divisional Heads for head office for any petty cash purchases; iii. Regional Managers and Divisional Heads are responsible for authorizing only eligible purchases to be made through petty cash as per Petty Cash Policy number sefa- Finance-2015-FP0002; iv. The Regional Administrator or Accounting Officers at Head Office must then either issue the person requiring the goods with petty cash or purchase the goods directly through a card purchase. No person other than the cardholder is allowed to transact directly with the bank card. The relevant section (cash purchase or card purchase) must be duly completed and authorized on the petty cash purchase requisition; v. In the event of petty cash being issued, the Petty Cash Administrator must ensure that change and documentation supporting purchases is returned within 3 working days. In the event of such not being returned, the petty cash administrator is required to report this to the Financial Accountant at Head Office immediately. The financial accountant will conduct further investigations and based on outcome of investigations the financial accountant will inform the payroll department that the amount should be deducted from the employee s salary and the necessary HR process will follow if deemed necessary. The financial accountant will also inform the employee that the petty cash loss will be recovered from his/her salary and that the matter will be investigated further; vi. The card holder must attach supplier invoices to the petty cash purchase requisition. vii. The petty cash administrator must keep accurate records of all source documents when transacting, including but not limited to:- a. Transaction slips; b. Any other source documents giving evidence of a transaction; c. Authorized petty cash purchase requisitions Petty cash withdrawals and monthly limit monitoring i. Cardholders must strive to ensure that adequate cash is available in the petty cash box at all times to meet operating needs; ii. Cardholders must monitor the monthly petty cash expenditure compared to the limits contained in Annexure. iii. The cardholder must complete a card withdrawal requisition, which must be approved by the Regional Managers at regions and Financial Accountant for head office; iv. All fields on the card withdrawal requisition must be fully completed. A cash count certificate must be attached to the request; v. Cash withdrawals must be carried out only at safe ATM locations during normal operating hours; vi. Cash withdrawn should exclusively be used for the purposes of replenishing petty cash on hand; Page 7 of 15 sefa-finance-2015-fp December 2015

9 vii. viii. Unused petty cash must be kept in a locked and secured petty cash box. The box must be kept in a safe place after hours or when not in use; The cardholder must keep accurate records of all documents when withdrawing cash from the ATM or bank, including but not limited to:- a. Withdrawal slips; b. Authorized card withdrawal requisitions 2.4. Reconciliations, counts and reporting i. Each Regional Manager or the Financial Accountant has to conduct at least one unexpected cash count per month and reconcile the balance to the opening cash balance plus cash withdrawals less cash purchases. This should be documented on a cash count certificate; ii. Count shortages should be resolved within 7 business days. The Financial Accountant will conduct further investigations and based on outcome of investigations and/or if negligence or fraud is found the Cardholder will be personally liable for the difference and further HR processes may be followed; iii. This difference will be deducted from the Cardholder s salary in the subsequent payroll run; iv. At the end of each month op upon request the Accountant: General Ledger must send bank statements to each cardholder; v. Each cardholder must complete the monthly reconciliation template on a monthly basis which includes the reconciliation of: a. Cash opening balance plus cash withdrawals less cash purchases equals cash on Hand (supported by a cash count certificate); b. Cash withdrawals + Card purchases equals transactions on the bank statement vi. The reconciliation must be reviewed by the Regional Manager for Regional Offices and Financial Accountant for head office; vii. The signed reconciliations with all the source documents must be couriered or submitted to the Accountant: General Ledger on the 1 st working day of the following month; viii. If the monthly reconciliations are not provided to the Accountant: General Ledger within 5 working days after month end, the Accountant: General Ledger reserves the right to cancel the business cheque card with the bank; ix. The Accountant: General Ledger must review the monthly reconciliation report and ensure that : a. The transactions matches to the source documents; b. The reconciliation casts and cross casts; c. All transactions on the bank statement has been accounted for; d. Only valid expenses have been incurred; e. Identify any losses or cash shortages. x. The Accountant: General Ledger must inform the Financial Accountant of any contraventions with the policy, invalid expenses or shortages identified by the 5 th working day of the month; Page 8 of 15 sefa-finance-2015-fp December 2015

10 xi. xii. xiii. The Financial Accountant will initiate the relevant investigations and ensure that potential losses are recovered; Spot checks must be conducted on a random bases by the Financial Accountant or Internal Audit following the same procedure as above; The Accountant: General Ledger must review the bank account on a continuous basis to ensure adequate funds are always available Temporary changes in petty cash administrator i. It may happen from time to time that the Petty Cash Administrator is absent from work and another employee will be required to issue petty cash; ii. Regional Managers or the Head of Financial Accounting may identify alternative employees to manage petty cash during such instances; iii. These alternative employees must be registered as petty cash administrators prior to managing petty cash. The Regional Manager or Head of Financial Accounting must submit a request to the Chief Financial Officer for the alternative employee to be registered together with an acknowledgement of debt signed by the employee; iv. The alternative petty cash administrator may not use the bank; v. The Accountant: General Ledger must keep an updated register containing all petty cash administrators which the Financial Accountant must review on a monthly basis. The register must be filed in the monthly finance reconciliation files; vi. The monthly reconciliation template must be completed immediately before a change in petty cash administrator. Any loss must be recovered prior to alternating petty cash administrators Financial Accounting i. The Accountant: General Ledger must submit all documentation to the Accounting Officer after performing the checks listed under 2.4 for processing in the General Ledger; ii. The Accountant: General ledger must check accounting entries processed by the Accounting Officer and post the transaction; iii. The normal monthly reconciliation of general ledger accounts process must apply to the Petty Cash account; 2.7. Lost or Stolen Cards and loss recovery i. Lost or stolen cards must be reported immediately with the bank using the number listed on the back of the card; ii. The cardholder must also report the cancelled card in writing to the Accountant: General Ledger on the card cancellation form within 24 hours of the loss or theft; iii. The Accountant: General Ledger must immediately contact the bank to verify and ensure that the card was canceled on time; Page 9 of 15 sefa-finance-2015-fp December 2015

11 iv. If the card was not canceled on time, the Accountant: General Ledger must follow up with the bank to investigate if there was any loss suffered by sefa as a result of the lost card; v. The Accountant: General Ledger must immediately inform the Financial Accountant of any loss suffered; vi. The financial accountant will conduct further investigations and follow the necessary Human Capital Management policy and process initiate the recovery process Employee Resignation i. Cards belonging to employees serving their notice period must be cancelled within 10 business days prior to the last day of employment by submitting a card cancellation form to the Accountant: General ledger not less than 15 working days prior to the last day of employment. sefa reserves the right to withhold any payments due to an employee if a card has not been returned on termination of employment; ii. The Regional Manager or Head: Financial Accounting must identify a capable employee in the business unit to be a replacement cardholder; iii. The replacement cardholder must follow the procedure above to obtain a new card. 3. Procedure Implementation The Procedure is effective from the date of approval and should be implemented with immediate effect in all sefa functional areas. The approved procedure will be published on the sefa intranet. 4. Communication and Training The procedure should be distributed to all affected parties in functional areas and the Head of Financial Accounting must plan training programmes on an annual basis. All cardholders will have to acknowledge in writing that they have read the Petty Cash policies and procedures prior to receiving a card. 5. Procedure Monitoring This Procedure must be monitored by the Head of Financial Accounting on a monthly basis during the operational cycles of the business. Page 10 of 15 sefa-finance-2015-fp December 2015

12 6. Procedure Review The review process for the Procedure must be implemented every 3 years or earlier if necessary. This process normally entails an audit and impact interviews with key stakeholders. Page 11 of 15 sefa-finance-2015-fp December 2015

13 8. ANNEXURE A: PETTY CASH PROCESS FLOW

14 9. ANNEXURE : ANK CARD LIMITS Location Daily Limit Rands (Vat Exclusive) Head Office All Regional Offices Monthly Rands (Vat Exclusive) Any changes to limits as per Annexure A must be approved by EXCO.

15 10. ANNEXURE C: LIST OF ITEMS INCLUDED AND EXCLUDED FROM THE PETTY CASH PROCEDURE 1. INCLUSIONS Petty cash must only be used for small and unusual expenses where it is not practical and cost efficient to follow the normal procurement process and the amount does not exceed the threshold published in the Procurement Procedure. These expenses include the following: i. Vehicle license fees; ii. Parking fees and toll fees incurred by the company s driver; iii. Dry cleaning; iv. Minor repair expenses due to an emergency; v. Key cutting; vi. Small items required for general maintenance; vii. Replacement of minor First Aid items; viii. Catering for small meetings where food is bought directly from a store; ix. Stamps. x. Other office running expenses such as () 2. EXCLUSIONS The following items may not be paid through petty cash. i. Assets ii. Any reimbursement to an employee iii. Reimbursement of official km s travelled iv. All airfares, train tickets, and car rentals are to be submitted through the normal travel processes v. Office stationery vi. Cellular phone related expenses (Prepaid airtime, replacement of sim cards) vii. Personal loans viii. Consultant fees ix. Debit or credit card reimbursement x. Subscriptions/registration fees Page 1 of 15 sefa-finance-2015-fp December 2015

16 11. ANNEXURE D: LIST OF AUTHORISED ANK SIGNATORIES DESIGNATION GROUP Chief Executive Officer A Chief Financial Officer Head of Strategy Executive Manager: Direct Lending A A A HCM: Executive Executive Manager: Wholesale Lending Chief Risk Officer Head: Direct Lending South Head: Direct Lending Head: Credit Head: Human Capital Head: Micro Finance Head: SME Head: Financial Accounting Head: Procurement Head: PIM Direct Lending A A A Head: Learning & Development Head: Post Investment Monitoring These supersede all instructions pertaining to bank accounts signatories Page 2 of 15 sefa-finance-2015-fp December 2015