SOP Finance Department
SOP Finance Department
SOP Finance Department
: Issue Date:
CU/SOP/FIND/24 30th September, 2017
Issue No.: Revision No.:
05 00
Document Title:
STANDARD OPERATING PROCEDURE FOR FINANCIAL RESOURCES MANAGEMENT
CHUKA UNIVERSITY
For
CONTENTS
DOCUMENT REVIEW SHEET………………………………………….....…………………1
1.0 AMENDMENT RECORD … ................................................................................................ 3
2.0 GENERAL ............................................................................................................................. 4
2.1 Purpose.......................................................................................................................... 4
2.2 Scope ............................................................................................................................. 4
2.3 References ..................................................................................................................... 4
2.4 Abbreviations ................................................................................................................ 4
2.5 Definitions..................................................................................................................... 4
2.6 Responsibility ............................................................................................................... 4
3.0 ADMINISTRATIVE STRUCTURE ................................................................................... 4
4.0 PROCESSES.. ....................................................................................................................... 6
4.1 Overview ....................................................................................................................... 6
4.2 Process for Accounting for Income .............................................................................. 6
4.3 Process for Processing of Payments ............................................................................. 7
4.4 Process for Budgeting Process ...................................................................................... 8
4.5 Process for Imprest Processing and Surrender.............................................................. 9
4.6 Process for Preparing Financial Accounts and Audit Reports .................................... 10
5.0 RECORDS ........................................................................................................................... 11
6.0 KEY PERFORMANCE INDICATORS/QUALITY OBJECTIVES............................. 11
6.1. Key Performance Indicators………………………………………………………… 11
6.2. Quality Objectives……………………………………………………………………… 12
RISK AND OPPORTUNITIES REGISTER……………………………………………… 16
APPENDIX I: PROCESS MAPS..............................................................................................17
2.0 GENERAL
2.1 Purpose
The purpose of this procedure is to ensure that the activities of the Finance Department are in
compliance with the International Standard and the CU’s and the Government’s statutory
policies, procedures, International Accounting Standards and other regulations.
2.2 Scope
This procedure applies to and defines the activities carried out by the Finance Department.
2.3 References
CU Charter, 2013
CU Statutes, 2014
CU Strategic Plan, 2017-2022
Government and Management Circulars
International Accounting Standards
ISO 9001:2015 International Standard, Clauses 4 to 10
CU ISO Quality Management System Manual, 2017
Public Audit Act, Cap 412
Public Procurement and Disposal Act, 2015
State Corporations Act, Cap 446
2.4 Abbreviations
AAC Assistant Accountant. AC Accounts Clerk
ACC Accountant. FO Finance Officer
IAS International Accounting Standards. SAA Senior Accounts Assistant
2.5 Definitions
Ledger: A book in which the monetary transactions are posted in the form of debits and credits.
Payment Voucher: A document containing summary of details for a specific payment.
2.6 Responsibility
The Head of Finance Department has the primary responsibility of ensuring that this procedure is
implemented and remains adequate for its intended purpose and for providing the information
from which the documentation for its processes can be compiled and for initiating action to keep
them up to date. All departmental staff members are responsible for implementing and ensuring
that this procedure is followed.
VICE-CHANCELLOR/VC/CEO
SENIOR ACCOUNTANT
Cash Office & Creditors, Examination of Payroll Final Accts and Assets Mgt IGU Student Finance
Bank Imprest and 1 AA
documents 1 SAA Mgt Reports 1 SAA 1 AAC, 1 SAA
Reconciliation Vote Control 1 AC
2 SAA 1 AA (1 ACC) 1 AA 1 AA
1 AAC, 2 SAA 1 AA, 1 AC
2 AA, 1 AC
LEGEND:
AAC = ASSISTANT ACCOUNTANT SAA = SENIOR ACCOUNTS ASSISTANT ACC = ACCOUNTANT
AA = ACCOUNTS ASSISTANT AC = ACCOUNTS CLERK
4.0 PROCESSES
4.1 Overview
The Finance Department is responsible for the University’s activities related to finances. The core
activities of the office include:
(i) Accounting for Income
(ii) Processing of Payments
(iii) Budgeting Process
(iv) Imprest Processing and Surrender
(v) Preparing Financial Accounts and Audit Reports
4.2.4 Receivers
ISO Departments; Other payees
4.3.4 Receivers
ISO Departments; Other payees
4.4.4. Receivers
Government; MoE; CU/SOP/VCIM/01; CU/SOP/DVCF/02; ISO Departments
4.5.4 Receivers
Top Management; CU/SOP/CVIM/01; CU/SOP/DVCF/02; CU/SOP/IAUD/26
4 Debtors section confirms that the applicant Payment processing Debtors section
has no outstanding imprest and that the
warrant is properly authorised
5 Accountants process the payment once Cheque Accountant
approval is granted from debtors section
6 After accomplishing the task for which the Surrender form Imprest holder
imprest was requested, the applicant prepares
an imprest surrender form and attaches a
copy of the approved memo and receipts to
account for expenditure within one month.
a) Applicant requests reimbursement via a
letter in case over-expenditure is incurred
b) If there is under-expenditure, the
applicant banks the balance in the
relevant CU bank account before
processing the imprest surrender.
7 The surrender form is authorized by the Approved surrender HOD/Registrar
HOD, approved by the Registrar (A&P) and form (AP) and Internal
finally checked by the Internal Auditor. Auditor
8 Debtor staff assigns a surrender number Surrender statement Accountant
generated by the computerized accounting
system to the surrender form and the relevant
journal entries are captured.
(a) The applicant is no longer held as a
debtor to the University
9 A list is compiled of imprest defaulters, Debtor list Debtors section
within stipulated period, and send to salaries
section to recover from the payroll.
4.6.4 Receivers
Government; MoE; Council; CU/SOP/VCIM/01; CU/SOP/DVCF/02
5.0 RECORDS
(i) Memos
(ii) CDF/Sponsors notifications
(iii) HELB notifications
(iv) Online bank statements
(v) Cheques
(vi) Bank statements and bank reconciliation statements
(vii) Project payment certificates
(viii) Payment vouchers
(ix) Fixed asset register and stock-take schedules
(x) Creditor’s ledger and debtors’ ledger
Strategies
Train staff in financial management practices and requirements
Sensitized staff on allocated budget and procedures for absorption
RESPONSIBILITY RESOURCES TIMELINE MEASURE OF
REQUIRED SUCCESS (KPIs)
Finance Officer Training facilitation budget Annually Trained staff
DVC (AFPD) Training experts Absorbed budget
Training programme Training report
Stationery
Review dates: Quarterly
Linked Strategic Objective(s)
SO 15: Institution of Prudent Management of Financial Resources
SO 24: Development and Projection of a Positive Image of the University
SO 27: Compliance with Statutory Requirements
Quality Objective
7. To continuously adopt and implement Financial Accounting Standards and Practices (FASP)
in the preparation of financial statements annually.
Strategies
Train Finance staff in FASP
Develop and regularly update the Finance manual
RESPONSIBILITY RESOURCES TIMELINE MEASURE OF
REQUIRED SUCCESS (KPIs)
Finance Officer Training facilitation budget, Annually Statements prepared
DVC (AFPD) experts, programme following FASP and with
Stationery no errors
Review dates: Semi-annually
Linked Strategic Objective(s)
SO 15: Institution of Prudent Management of Financial Resources
SO 24: Development and Projection of a Positive Image of the University
SO 27: Compliance with Statutory Requirements
Quality Objective
8. To respond to all customer complaints within one (1) week from time of receipt.
Strategies
Monitor customer complaints daily
Assign complaints to Departmental investigators
Review reports, statements and finings and prepare response
Dispatch responses promptly
RESPONSIBILITY RESOURCES TIMELINE MEASURE OF
REQUIRED SUCCESS (KPIs)
Finance Officer Complaint document or info Annually Number of resolved
Public Complaints Policy complaints
Review dates: Weekly
Department: Finance
Project Name: Financial Management. Code Name: CU/SOP/FIND/24
SN Risk Source Impact
(How can the risk occur) (What is the impact of the risk
occurring)
1 Payment of Failure to vet documents Loss of funds
fictitious claims Collusion to defraud
2 Loss of cash in Theft Failure to fulfil projects/ financial
transit obligations
3 Theft of cash in Fraud/Collusion Loss of funds
office Weak security measures
4 Inflation General increase of prices of Loss of value of money
goods and services
5 Failure to meet Delays in availing of data Heavy penalties
statutory Litigations
deadlines
Start
Update Cashbooks
/students’ statements
Prepare Bank
Reconciliation
FINANCE OFFICER, ACCOUNTANTS
Stop
RESPONSIBILITY ACTION
Start
Verify Documents
and approvals
NO Return to
Valid? source
ACCOUNTANT IN CHARGE, CREDITORS
SECTION
YES
Prepare Payment
voucher and Cheque
Forward to Internal
FINANCE OFFICER, ACCOUNTANTS Audit and Signatories
Stop
Receive
Departmental
Budget proposals
Management Board
FINANCE OFFICER
NO
Approved?
YES
University Council
NO
Approved?
YES
Ministries
Rationalise Budget
Stop
Start
Raise Imprest
IMPREST APPLICANT
Warrant
YES
YES Outstanding
imprest?
NO
FINANCE OFFICER, ACCOUNTANTS
Process payment
Prepare Imprest
Surrender Claim
NO
Approved?
YES
Clear debtor
Stop
RESPONSIBILITY ACTION
Start
ACCOUNTANTS IN CHARGE:
FINANCIAL REPORTS, ASSETS AND Conduct Asset Count
CASH OFFICE SECTIONS
Prepare Accounts
University
Management Board
University Council
NO
Approved?
YES
NO
Audited?
YES
Relevant Ministries
Stop