expenditures. In addition, there are serious concerns about the safety of financing data. The only backup procedure followed is to store financial data on different computers, but within the same office building. The current accounting manual was developed in 2006 and no revision has taken place since then. Surprisingly, no electronic copy of the finance manual was available within the organisation. The following specific actions are recommended for this block:
Conduct an immediate review of the existing financial accounting manual and update the manual where necessary. Train all finance related staff on the use of the updated manual and make the manual accessible to all relevant staff. Deploy an improved accounting system based on modern accounting needs. Ensure that all approved budgets are recorded in the accounting software and all subsequent expenditures are recorded against budget allocations using the accounting software. Ensure that allocating expenditure against the budget takes place at the lowest cost centres - which are the service delivery points. This will allow better costing and financial information to be provided to management on which to base decisionmaking. Develop policies and procedures on data backup to ensure that the data is stored securely and safely. Pre-number all vouchers so that they can be tracked. Undertake a periodic review of the trial balance in the head office at least once every two months, if not monthly. This will enable management to identify errors and issues at an early stage. Revise financial management reports, with consideration of how they could present more meaningful information e.g. comparison with the previous period, statistics on vacant positions in clinics, survival ratio etc.)
Block 3: Budgeting and Planning Systems
Score: 57%
Medium VfM
Financial planning is both a strategic and operational process linked to the achievement of objectives. It involves building both longer-term funding strategies and shorter-term budgets and forecasts, and lies at the heart of effective financial management. Block 3 examines how effectively budgeting and planning systems are functioning in the organisation. Financial planning doesn’t start with budgets and numbers but needs comprehensively laid down operational plans. The assessment suggests that minimum basic procedures for planning and budgeting exist and are being practised but these could be significantly improved to deliver better VfM results. R-FPAP undertakes both long-term strategic planning exercises and annual operational plans. The budgeting process is closely linked to the annual operational plans. Improvements need to be made in the budgeting process by including more detail, providing more clarity about calculations, developing a more structured budget preparation process through a budget manual, and training the relevant staff. The programme and finance managers both take an active part in the annual budget process. However, allocation of overheads is a weak area, particularly in terms of having an established procedure to recover management overheads from different projects. The impression from the current system is that overheads are being under recovered. The format and contents of the monthly financial management reports need to be improved to allow better decision-making. The following specific actions are recommended:
Develop a budget manual clearly outlining the roles & responsibilities, formation of the budget committee, reporting process, variance reporting and analysis.
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