The organization’s financial statements are prepared in accordance with the International Financial Reporting Standards (IFRS) for Not for profit organization.
1. BUDGETING PROCESS
- The organization’s annual budget is prepared by the Executive Director in conjunction with the Programs Manager, Finance and Administration Manger and programs coordinators, and reported to the Board of Trustees;
- The Executive Director will notify the chair and treasurer of the board of trustees with any approved incoming grants and budgets;
- Program budgets are prepared by the Program Coordinators with the help of finance unit and Approved by the Programs Manager;
- The Executive Director will work together with the Programs Manager and the Finance and Administration Manager and program Coordinators to ensure that the organization’s annual budget and all program budgets are accurate and reflect SDFG overall goal and objectives as set in its strategy;
- The Board of Trustees will review and approve the organization budget.
2. INTERNAL MANAGEMENT FINANCIAL REPORTS
The Finance unit is responsible for producing the following reports, on Quarterly basis:
- Statement of Financial Position;
- Statement of activities;
- Cash Flow Projection;
- Review and monitoring of the budget monitoring report;
On Quarterly-basis the Programs Manager and Finance and Administration drafts a narrative report that summarizes the programs’ current financial position that includes explanations for budget and target variance.
Annually: The Executive Director and Programs Manger review financial reports each month at the senior management team meeting.
3. FINANCIAL REPORTS TO THE DONOR
SDFG is committed to produce regular financial reports to the organizations’ donors to demonstrate the funds have been used for the purpose of which they were intended, and to keep the donor informed with any potential changes. The finance unit is responsible for keeping the deadlines for the reports as stipulated in the grants agreements, and for producing accurate and verified figure
All financial reports to the donor should be reviewed by Program coordinator and verified by the Programs Manager and approved by the ED.
Program coordinators are responsible for explanation of any significant variation on budget lines.
4. Chart of Accounts
A Chart of Accounts is available and used to code receipts and disbursements to the proper budget lines. The Finance and Admin Manager is responsible for developing budget codes for each approved grant upon the signature of the contract.
The updated version of the Chart of Accounts is available on SDFG Shared drive and updated on a monthly basis. All new requests for updating of the Chart of Accounts should be submitted to the Finance and Administration Manager by email with a detailed description of new proposed items/codes, estimated annual budget for each proposed item, and attached copies of supporting documents, for example pledge agreement, grant contract, or grant budget.
5. INTERNAL AUDIT
The Board has the right to assign an internal auditor.
6. PROJECT BASED AUDIT
The organization may conduct project-based audit at the close of projects based on the availability of funds and/or donor requirements. The audit shall be conducted by an independent and certified Auditor who is familiar with the NGO operations.
7. ANNUAL EXTERNAL FISCAL AUDIT
The organization shall conduct annual fiscal audit at the close of each fiscal year. The Annual audits will be conducted by an independent and certified Auditor who is familiar with the NGO operations appointed by the board of Trustees to cover the minimum following issues:
- Examine the financial statements to obtain reasonable assurance that they are free of material misstatements and they give true and fair view of the state affair of the organization;
- Examine the financial transactions for accuracy and reliability of supporting documentation and ensure the organization management has kept proper books of account;
- Assess the overall presentation of the financial statements and ensure they are in agreement with the books of accounts, organization policies and procedures and relevant funding requirements;
- Review the existing internal controls policies and procedures and determine whether they are appropriate, adequate and bring out any significant weaknesses;
Verify whether the findings and recommendations of previous audits have been adequately addressed. Finance unit will be responsible to coordinate the annual audit process, and to liaise with external auditors and the Executive Director and the Board of Trustees, and assess any necessary changes.