administration and financial management manual1

7/30/2019 Administration and Financial Management Manual1

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FINANCIAL MANAGEMENT

MANUAL

For

UGANDA COOPERATIVE SAVINSG AND

CREDIT UNION LIMITED

(UCSCU)

Admin. & Finance Manual UCSCU 2009 Page 1 of 29


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TABLE OF CONTENTS



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ABBREVIATIONS

FAM

AA

FEW Financial Extension Worker

IFAD International Fund for Agricultural Development

MFI Micro finance Institution

MFPED Ministry of Finance, Planning, & Economic Development

MOU Memorandum of Understanding

RFSP Rural Finance Support Program

MTTI Ministry of Tourism Trade and Industry

CCD Commissioner for Co-operative Development

CM Commissioner Microfinance

RCS Registrar of Co-operative Societies

SACCO Savings and Credit Cooperative Society

UCSCU Uganda Cooperative Savings and Credit Union

LPO Local Purchase Order

IA Internal Auditor

PO

CEO Chief Executive Officer

PFA

GPR

GRN

RFOM Regional Field Operations Manager



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4.0MANAGEMENT OF UCSCU FUNDS

4.1 OVERALL FUNDS MANAGEMENT

I. Introduction

I. In order to be efficient, effective, and economical in the course of implementing UCSCU

activities, funds must be managed in such a way as to minimize their loss or misuse.

Funds held in cash, as well as in UCSCU bank accounts should be controlled, managed,

and used in such a way as to ensure value for money. Adequate controls over access,

custody, and use of funds should be maintained at all times.

II. Other than cash held on hand for the petty cash imprest, UCSCU transactions shall be

carried out via the bank accounts. Exceptions to this requirement include the following:

a) A payment to UCSCU by a vendor, beneficiary, creditor, or donor is made in cash

b) A refund by staff of unused portion of a working advance

c) An emergency working advance request by a member of staff

d) An emergency purchase request where such purchase cannot be settled by

cheque/draft

III. Management of Cash

a) Receipt of Cash: All cash received should be acknowledged by issuing an official

Cash Receipt to the person making the payment. The Cash receipt is serially

numbered and printed in triplicate. The original is issued to the person paying in theduplicate is attached to the pertinent voucher, while the triplicate remains in the book

for updating of the cashbook.

b) Cash Payments: All payments in cash must be evidenced by a payment voucher, and

supporting documentation explaining the nature of payment must be attached to the

voucher. The person being paid must properly identify her/himself, and must

personally sign for the funds and issue a receipt in the names of the company/entity

he/she represents. For payments to staff, a signature acknowledging receipt of the

funds is sufficient.

c) Updating the Cashbook: A separate cash book shall be maintained for purposes ofrecording all cash transactions which are not part of the petty cash imprest.

The Cashbook is debited for all cash receipts

The Cash Book is credited for all cash payments.

The balance on hand shall be reflected at the end of each day.

d) All cash collected should be banked within 48 hours of receipt.

e) A safe deposit box or other secure facility should be used to keep cash and other

valuables in safe custody.



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iv. Management of Bank Accounts

a) UCSCU Bank Accounts:

UCSCU shall maintain a bank account for each donors funds in compliance with the

specific donor requirements.

UCSCU shall also open and operate a US dollar account into which the consultancy

fees shall be deposited.

Where the donor(s) remit the funds in hard currency, the account shall be maintained

in an easily convertible hard currency account

UCSCU shall also maintain an account from which its core business operational

disbursements shall me made.

UCSCU will also open bank accounts for each Region through which Regional

Officers will receive funds for operations based on activity. This will reduce the need

for Officers to carry bulk cash.

Separate cashbooks shall be maintained for each bank account operated by UCSCU

All Accounts shall be designated as Uganda Co-operative Savings and Credit union

limited and the name of the donor, where applicable.

b) Opening of Bank Accounts

Prior to opening any bank account, the CEO shall notify the Board of the need to

open a bank account, with justifications

The Board, in collaboration with CEO and/or the Donor, shall pass a resolution

authorizing the opening of the account, designating the bank in which the account is

to be opened.

c) Bank Account Signatories

The signatories to all UCSCU bank accounts will be the CEO and the FAM. In case

of a special requirement by a donor, the RCS will be requested to approve the extra

signatories.

Regional bank accounts will be operated by the Field Officer and RFOM

A list of the signatories will be maintained and regularly updated.

The CEO should immediately notify the bank in writing in the event of a change in

signatories on a given Account,



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5. Transfers from IFAD/GOU and other Donors to UCSCU

a) Annually the CEO shall prepare a work plan and budget for the approval of the

AGM.

b) Quarterly reports will be made to the Board of Directors indicating the performanceof the work plan and budget and facilitate a guided review of UCSCU operations.

For Donor funds, the CEO, with consultation from the FAM, shall prepare a work

plan and budget for planned activities on a quarterly basis and submit to IFAD, GOU,

CCA or other donors.

c) The CEO shall also include a monthly funds Account reconciliation statement,

showing how previously advanced funds were spent, and the balance at the end of the

month.

d) The work plan and budget, funds reconciliation statement, and replenishment request,

should be sent to PAU within two weeks after the close of the month of

accountability.

e) The CEO shall negotiate with the banks for the best possible foreign exchange rates

while converting hard currency into Uganda Shillings, or vice versa.

f) All transfers shall be by cheque or money transfer directly into the designated bank

account.

VI. Payments from the Bank Accounts

a) Cheque payments to vendors should be initiated by the Procurement Officer who willcomplete a Payment Requisition Form (Appendix 16), attaching all relevant

documentation for contracts, LPOs, etc. The duly completed form shall be submitted

to the Administrative Assistant for review and verification for completeness and

accuracy. Supporting documents include invoices, purchase requests, LPOs, goods

received notes/service completion certifications, internal memoranda, etc

b) Cheque payments to staff for working advances and other official purposes shall be

initiated by the respective staff, attaching relevant sections of approved work plans

and activities.

c) The staff who have received advances should account for the money within twoweeks after completion of the assignment. No more money should be advanced to a

staff without completing accountability. Failure to account for money will lead to the

staff being required to refund the money or it will be deducted from his/her salary.

d) Cheque payments to statutory and other bodies shall be initiated by the

Administrative Officer with relevant documents.

e) After approval of the payment requisition, the Assistant Finance Officer will then

prepare a Payment Voucher (Appendix 17) and indicate the correct coding

information for classification purposes, as well as the cheque and submit to the FAM

for approval and signature. The administrative Officer shall also write a letter to the



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bank listing each cheque issued, the payee, and amount. The cheques and

confirmation letter are submitted to the signatories.

f) Each cheque signatory is responsible for ensuring the validity of the payment,

accuracy and completeness of the documentation submitted, adherence with relevant

policies and procedures, coding, approval, and other details. After signing, the

cheques are returned to the Assistant Finance Officer for issuance. Signatories shouldalso ensure that the cheques listed on the confirmation letter are in agreement (both

payee and amount) with the actual cheques written.

g) On receipt of the signed cheques, the Assistant Finance Officer calls all payees to

collect their payment, alerting them of the need to issue official receipts on collection

of the cheques. All cheques shall be kept under lock and key for safety purposes.

h) Once a payee or their duly designated representative comes to collect payment, the

Assistant Finance Officer should request them to positively identify themselves, issue

the receipt for the payment, and sign for the cheque(s) in the cheque payment register.

i) The Assistant Finance Officer shall then enter details of all payments effected in the

cashbook and appropriate ledger, including the date, description, payee, cheque

number and mount, as well as the relevant account code.

j) The Assistant Finance Officer shall stamp all invoices, vouchers, and other

supporting documentation PAID, attach the receipt obtained, and file sequentially

in chronological order.

VII. Cheque Book Maintenance

a) Cheques are valuable, and should be kept in a safe and secure place.

b) On receipt of a new chequebook, the FAM shall verify that all cheque leaves are

intact prior to leaving the bank. In the event a leaf is missing, the chequebook should

be rejected, and the CEO promptly informed.

c) Chequebooks shall be kept under lock and safe by the FAM. The cheque books

should be registered and controlled. Even the cheque book under use shall be kept

under lock and key by the FAM, and issue it out to the AFO when cheques are to be

written.

d) Cheques should be written sequentially, and from one book at a time, until such book

is finished.

e) Cheques should be written clearly in indelible ink. No spaces should be left before or

after words and figures. All unused space must be crossed out to avoid insertion of

additional data.

f) For each cheque written, the cheque stub (counterfoil) should be completed, including

the following information:

Date

Payee



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Brief description of the nature and purpose of the payment

Cheque amount

Initials of the signatories

Payment voucher number

a) Cheques should be made out payable through the payees account

b) Cheque stubs from fully used cheque books should be kept in a safe

c) All signed cheques should be returned to the Assistant Finance Officer who will

prepare a register for all outgoing cheques.

viii. Regional Branch Management

Reporting system

i. Bank Statements and Reconciliations

a) At the end of each month, the FAM should obtain a bank statement from each bank.

The statement should cover the whole month. (Appendix 18)

b) The AFO should print out a listing of all bank transactions for the month (bank

ledger) and submit to the FAM and IA

c) The FAM should then reconcile the cash book balance to the bank statement balance

by checking off all items that appear on both records, taking into account un-presented cheques and un-credited deposits

d) In the course of the reconciliation, the FAM should investigate all discrepancies and

items outstanding for over a month. FAM should identify and credit the members

who have paid their fees through the bank.

e) The Assitant Finance Officer should obtain documentation from the bank detailing

the bank charges levied, interest earned, etc for the period

f) Errors on the bank statement should be noted and the bank informed promptly in

writing

g) The bank reconciliation should be signed by the FAM, reviewed by the IA and

approved by the CEO by the 10 th day of the following month.

X. Canceled Cheques

a) For a cheque to be cancelled, the FAM must be informed of the intended cancellation,

with justification.



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b) The word cancelled should be written across the cheque and on the stub, and holes

punched in the cheque. The payment voucher should be marked and a note made in

the cashbook and ledger.

c) The cancelled cheque should be stapled back into the chequebook on the

corresponding cheque stub.

d) Before a replacement cheque is written and signed, the cancelled cheque, together

with all pertinent documentation, should be availed to the FAM and IA for inspection

e) The original payment request and other papers may then serve as documentation in

support of a replacement voucher and cheque

f) Details of the replacement cheque should be cross-referenced to the cancelled cheque

XI. Stale Cheques

a) Cheques issued to payees but remain un-presented for a period exceeding six monthsshould be considered stale. The amount of the cheque should be reinstated to the

cashbook, and the payee notified. Upon surrendering of the stale cheque, a

replacement can be issued.

b) Notify the bank promptly in writing by listing the pertinent cheque numbers, payees,

and amounts. Ensure bank acknowledges correspondence by officially stamping a

duplicate of the letter.

XI. Lost or Stolen Cheques

a) Notify the bank immediately upon loss/theft of any cheque books/leaves, noting the

serial numbers.

b) Where the cheques were already written at the time of loss/theft, issue a stop payment

order to the bank.

c) Have a listing of such cheques available to members of staff so that bank statements

can be thoroughly investigated

d) Notify the police and open a police file for the lost cheques

XII. Bank Charges and Interest

a) Upon receipt of the monthly bank statement, the FAM should thoroughly examine it

for any bank charges, interest income, and other bank-originated transactions.

b) Questionable charges should immediately be brought to the attention of the CEO for

further investigation

c) The AFO should then generate journal entries and attach a copy of the relevant bank

statement section, then submit to CEO for approval.



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d) The journals should be passed and a new bank ledger printed out for the bank

reconciliation process.

XIII. Receipt of Funds (Cash/Cheques)

In the course of implementing activities of UCSCU, funds will come from the following but

not limited to:a) Funds will be received from members share capital, entrance fees, Loan protection

Fund, National educational fund, members deposit into the central fund, interest on

loans and annual contribution

b) Grants and donations:

RFSP/IFAD

Government of Uganda

CCA/WOCCU

Proceeds from disposal of assets

Staff advance refunds

Sale of bidding documents

Donations

Loans

Contributions from beneficiaries for UCSCU services

c) All incoming funds should be received by the AFO and an official receipt issued to

the person making the payment.

d) Each cheque or cash receipt should be entered into the relevant cash book

e) Prior to the close of each day, the daily receipts should be summarized.

f) All funds received must be banked intact within two (2) business days. Since

UCSCU operates a petty cash float, spending funds upon receipt is not permissible.

g) After banking, the cash receipt and bank pay-in slip should be batched and

journalized.

4.2 PETTY CASH

I. Petty Cash Defined

An amount of money set aside to cater for payments for small, routine expenditure. For

purposes of meeting such small expenditures, a petty cash imprest will be maintained. This

means that replenishments to the fund will be for the total expenditure paid out, in order to

restore it to its normal level.

II. Petty Cash Imprest Amount

For the purpose of meeting small, routine, and sometimes emergency payments, a petty

cash imprest of UGX 2,000,000/= shall be maintained by the AFO at head office and UGx

800,000/= by the Administrative Assistant at regional offices.



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III. Record Keeping for Petty Cash transactions

A separate cashbook for the petty cash imprest will also be maintained to record petty cash

transactions. Supporting documents (vouchers, receipts, etc) should also be maintained in a

separate file.

IV. Receipt of Funds into Petty Cash Imprest

a) UGX 800,000/= (the value of the imprest amount) shall be remitted to the Regional

Bank Account as the petty cash imprest.

b) UGX 2,000,000/= will be cash imprest for Head Office

c) Subsequent replenishments shall be on the basis of a duly authorized petty cash

replenishment requisition, using a Payment Requisition PR (Appendix 12), after the

following procedures have been fully performed:

Proper Accountability for previous imprest is submitted and scrutinized by the

Internal Auditor

FAM classifies and summarizes all petty cash vouchers by account code

AFO prepares a Payment Requisition detailing the nature and amount of

summarized expenses

AFO submits the Payment Requisition, together with the pertinent Petty Cash

Vouchers PCV (Appendix 14), and the Cash Count Certificate to the IA for

review and to CEO for approval.

After approval, AFO prepares a cheque for the value of approved petty cash

expenditure to replenish the imprest.

d) The optimal level for triggering replenishment is 150,000/=, and can be revised in

consultation with the FAM and CEO.

V. Accessing Petty Cash

The maximum amount of money that can be obtained from petty cash is 100,000/=, and a staff

member can only have one petty cash advance at any one time. Breaking down expenditure

amounts to circumvent the petty cash policy is prohibited.

The following simple steps set forth the procedure for requesting and receiving money from

the Petty Cash Custodian (AA):

a) A staff member picks up a Petty Cash Voucher (appendix 14), fills the top (advance)

part for staff who need money to carry out activities, or the bottom part (settlement)

for staff who have already used their own money and are seeking reimbursement.

b) The completed PCV is submitted to the immediate supervisor for approval

c) Submit the approved PCV to the AFO (petty cash custodian) for payment

d) Sign the Received by section of the PCV upon receiving payment



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6. Accounting for Petty Cash

Whether a staff member took an advance or they used their own money, the following is the

procedure for accounting for petty cash:

a) As far as practicable, obtain from vendors receipts for all moneys you pay out.

b) Complete the Accountability form and have it signed by Head of Department.c) Attach all receipts and other evidence of accountability

d) Sign the form and submit to immediate supervisor for approval

e) Submit approved PCV to FAM through the IA.

f) For advance holders, FAM compares the amount of the advance to the actual

expenditure. No over expenditures will be entertained.

g) Petty cash advances should be accounted for within 48 hours, or as soon as the activity

for which the advance was taken is completed

h) Staff who fail to account for petty cash advances will have the outstanding amount

deducted from their salaries, and may be denied access to petty cash in future

i) Staff can only have one advance at a time, and can only access subsequent advances after

fully accounting for previous advances

4.3 PAYMENT FOR GOODS AND SERVICES IFAG/GOU

a. Payment to Service Providers for Services Rendered

a) Service Providers are individuals, organizations, and firms, which have entered into a

MOU to provide specific services to RFSP/SACCOs. They may include pre-qualified

individuals, NGOs, CBOs, CSOs, or private companies.

b) For Community-wide activities, UCSU contracts to pay the service provider between50% and 75% of the agreed upon cost in accordance with terms set in the MOU, the

balance is payable after the work is completed.

c) For services to SACCOs, the beneficiary group/person is paid 50% of the agreed contract

sum to BCF on signing of the MOU. UCSCU then pays the balance upon completion

and submission of all relevant documents and invoices.

d) The service provider, or their duly designated representative, identifies him/herself,

receives the cheque, issues a receipt, and signs for the cheque in the cheque register.

II. Payment to Vendors for Goods Supplied to IFAD/GOU Program SACCOs

a) As part of capacity building under RFSP one selected SACCO per sub-county will be

provided with a safe, filing cabinet, 2 bicycles or one motor cycle, Generator or solar

panel and have their offices refurbished.

b) A team of officers from UCSCU and RFSP/PAU will do a needs assessment for SACCO

before the assistance is given

c) For office refurbishment, an Engineer will be contracted to assess the requirement.

d) Service providers will be engaged using procurement guidelines. Purchasing of stationery

and other goods will follow the same route.

e) Once the vendor supplies the specified goods, meeting quality, quantity, and deliverystandards stipulated in the contract, they will be paid.



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f) The Administrative Officer prepares a memo certifying that the goods were delivered,

and recommend payment to the vendor. All documentation, together with certifications,

is submitted to the PO to originate payment.

g) The PO reviews the documentation for completeness and compliance with procurement

policies and procedures and, if satisfactory, prepares a payment request.

h) The FAM reviews the request and attachments, and approves. The approved payment is

then submitted to the AFO for cheque writing.

i) After the cheque is written and signed (as spelt out in this manual), the AFO calls the

vendor to pick up their payment and issue a receipt.

j) The vendor, or their duly designated representative, identifies him/herself, receives the

cheque, issues a receipt, and signs for the cheque in the cheque register at UCSCU

offices. or picks their cheque from the Regional Offices.

In the event that a service provider, vendor, fails to deliver goods/services satisfactorily, partor all of their payment may be withheld until a satisfactory remedy is provided.

Vendors/service providers who consistently fail to discharge their obligations to the

satisfaction of UCSCU will be blacklisted.

4.4 ACCOUNTING RECORDS

1. Overview

This section outlines the various accounting documents, their use, how to handle and store

them.

11. Responsibility for Maintenance of Records

The FAM, through supervising the FO and AFO, is responsible for ensuring overall safety,

maintenance, and custody of all accounting records.

Movement of accounting records should strictly be with written authorization from the FAM

All accounting records should be maintained in safe custody for a minimum of six years

111. The Cashbook

The Cashbook (manual or a computerized printout) should be updated with all monies received

and paid out (cash, cheques, transfers, direct debits/credits, etc). Cash and each bank account

must each have separate cashbooks/ledgers.

Cashbooks should be updated daily using payment vouchers, receipt vouchers, bank advices

(with appropriate journals), and bank statements (with journals).

At the end of each month, the cashbook or computerized cash ledger should be balanced. The

balance per the cashbook/ledger should be reconciled to the bank statement by the 10th of eachmonth for the previous month. The FAM is responsible for reconciling each account. The IA



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should verify each months reconciliation and sign off to certify the verification. The CEO

shall approve each bank reconciliation.

The cashbook or computerized cash ledger should have the following details:

Date of the cheque/receipt/journal

A sequential reference number for the cheque/receipt/journal A description of the payment or receipt

The name of the payee or person/entity making the payment

The amount of money paid/received

IV. The Receipt Book

a) A receipt book should be maintained and used to record all monies received, whether in

cash or by cheque.

b) Separate receipt books be used for each programme IFAD, GOU and UCSCU

c) The Receipt book shall be maintained in triplicate. The original copy is issued to the

payer, the duplicate copy attached to the supporting documentation, and the triplicate

retained in the book.

d) Receipt books shall be pre-printed, and sequentially numbered

e) Each receipt shall contain the following information

The date payment is received

The name of the person making the payment

Reason/explanation for the paymentAmount received, both in figures and words

Details of the cheque (if payment by cheque)

Signature of cashier

Stamp

V. The Payment Voucher

a) All payments are to be made on a fully completed and authorized Payment Voucher

b) Separate payment vouchers be used for each program- IFAD, GOU and UCSCU main

c) A payment voucher is an accounting document, and as such is only initiated by a

member of the finance department (FAM, FO or AFO). It should be based on an

invoice or cash requisition initiated by the staff requesting payment, or department

responsible for the transaction

d) Completed Payment Vouchers become part of the supporting documentation for the

relevant payment. They should be attached

e) Where possible, Cash requisition forms should be accompanied by quotations, invoices,

budgets/work plans, etc

VI.Supporting Documentation



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a) Supporting documentation for each transaction must be attached to the payment voucher

and filed in sequential number order

b) Where applicable, a separate file should be maintained for each bank account, as well as

petty cash

c) Access to financial records should be restricted to finance staff, and movement of such

records should be recorded indicating who, when, where, and when returned. Persons

outside the finance department who need to access finance records should sign for them

d) All documents and records should be available for review, inspection, and scrutiny by both

internal and external auditors.

5.0 FINANCIAL REPORTING AND MONITORING

(a) Annual Accounts and Balance Sheets will be presented to the member SACCOs at anAnnual General Meeting to be held within three months of the end of the fiscal year which

ends in December

(b) Financial reports on all RFSP/GOU activities are prepared for purposes of accountability of

the funds to donor.

(c) Financial reports for internal monitoring of progress are prepared on a monthly basis,

within two weeks after the close of the month.

(d) Financial reports on UCSCU core business to UCSCU Board are prepared on a quarterly

basis, within two weeks of the close of the quarter.

(e) The Quarterly reports should include detailed budgets (activity and financial), actual

performance, and variance. Variances of more than 10% should be flexed and explained.

(f) At least once in a quarter, the IA will visit the Regions to review financial management

systems, as well as to monitor fund utilization.

(g) On an as needed basis, the IA may do spot checks to Programme SACCOs to monitor the

use of kit and funds provided to SACCOs for office rent and salaries in accordance with

laid down policies and procedures.(h) On an as needed basis, the IFAD/GOU Financial Controller/Auditor General may do a spot

check of RFSP/GOU program financial records

(i) Reports to PAU/IFAD/GOU to consist of the financial report, activity report, narrative, and

original financial documents with attachments.

(j) All financial reports will be produced by use of an accounting soft ware.

6. 0 PREPARATION OF WORK PLANS AN BUDGETS



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(a) The Board and management will prepare Annual work plans and budgets for approval by

the Annual General Meeting

b)``The activities to be carried out, agreed upon progress indictors and

deliverables, as well as timing and budgets will be as spelt out in the MOU

between UCSCU and other stakeholders.

c) The activities stipulated in the MOU, and other agreed upon and

documented discussions form the basis for work plans and budgets.

7.0 PROCUREMENT OF GOODS AND SERVICES

7.1 PURPOSES AND SCOPEThese policies and procedures govern the acquisition, use, maintenance, management, and

disposal of assets for the implementation of UCSCU activities. They are intended to provide

staff, management, and other stakeholders of UCSCU with guidelines aimed at ensuring properuse of assets, as well as preventing their abuse and misuse. These policies also spell out the

staff members responsible for various aspects of UCSCU activities. The policies and

procedures laid herein conform to both Members, Donors and Government of Uganda

requirements.

7. 2 Overview

Procurement is the process of buying, leasing, or other legal means of acquiring the right for

goods, works, and services to satisfy defined needs at the right time, from the right supplier, in

the correct quantities, and at the right price.

For procurement to meet the above conditions, the following guidelines should be followed:

Provide equal opportunities for all qualified bidders to compete favorably

Encourage local manufacturers/providers to participate in the process

Emphasize transparency in the process

Ensure economy and efficiency

7.3 Procurement Methods Goods and Works

Acquisition of assets under projects or donor programs, provisions in the contract/MOU will bestrictly adhered to.

The following methods will be used in the procurement of all goods, services, and works:

I. International Competitive Bidding (ICB): This provides equal opportunity to

suppliers from World Bank member countries. It involves advertising tenders

internationally and should be used to procure goods, services, and works valued at

or above. It is mainly used for procurement of vehicles, motorcycles,

computers, etc.



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II. Limited International Bidding (LIB): This method is appropriate where there is no

open advertisement, e.g. when there are a limited number of suppliers. This involves

direct sourcing internationally

III. National Competitive Bidding (NCB): It involves advertising locally and inviting

company to tender. Is used for procurement within Uganda, for goods and works

estimated to cost less than USD 200,000 but more than USD 20,000 per contract.

IV. Direct Purchase: This method will be used in extending existing contracts e.g.

standardization and repair of equipment.

V. Local Shopping: Is used to procure off the shelf, or relatively cheap items, especially

common user products, and involves obtaining quotations from at least three different

reputable suppliers. The contract is awarded on the basis of quotations obtained from

three qualified contractors in response to a written invitation.

VI. International Shopping: Will be used for small value products not readily available

locally in Uganda. The contract is awarded on the basis of obtaining three quotationsfrom various countries.

7.4 Procurement Methods Consultancy Services

The following methods shall be used in the procurement of consultancy services:

I. Quality and Cost-based Selection: This method involves selection on the basis of cost

and comparing the quality presented by each consultant.

II. Least Cost Selection: This method is used with goods of standard price for routine

assignments, e.g. audits

III. Single Source Selection:

IV. Selection under Fixed Budget

V. Service Delivery Contracts

7.4 The Procurement Cycle

The following procedures apply to the procurement of goods, services, and works.

I. Articulation of Needs in the Annual Work Plans: UCSCU being a private

Institution, which also accessed GOU and IFAD program funds with clearly defined

activities and expected outcomes, procurement requirements for goods and services

should be clearly articulated in the annual work plans. This will allow for adequate

procurement planning and availability of the expected deliverables in a timely manner.

II. Complete a General Purchase Request (GPR) Form: An authorized staff member

should complete a General Purchase Request Form (Appendix 1), specifying the goods

or services required, with reference to the activity (activities) in the work plan to which

the procurement relates. The requestor, with the assistance of the Procurement Officer,

should clearly indicate the specifications, bills of quantities, or clearly articulated terms



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of reference, as well as the delivery locale and time line. The completed form is then

submitted to the Finance & Administration Manager.

III. Administrative Review: The Finance & Administration Manager (FAM) reviews the

GPR/RFS to ensure compliance with budgetary and programmatic aspects. If these are

complied with, the FAM approves the GPR/RFS (CEO for larger items).

The approved GPR is then forwarded to the Procurement Officer who is responsible forcompleting the procurement.

IV. Invitation of Providers: Upon receipt of the approved GPR/RFS forms, the

Procurement Officer (PO) summarizes the procurement request and invites eligible

providers/suppliers using the relevant procurement method. The GPR/RFS is logged

onto the Procurement Status Report PSR (Appendix 3) for tracking and monitoring.

A minimum of three quotations/bids should be obtained. Where this is not possible,

reasons should be documented and approval sought from the CEO.

V. Evaluation of Quotations/Bids: On expiry of the quotation/bidding period, the PO

prepares a summary of all quotes/bids received, specifying compliance with terms andconditions, technical responsiveness, delivery time table, and price, using a Summary

Quote/Bid Analysis Form SBA (Appendix 4). For procurement of goods and services

below UGX 5,000,000/=, the PO and FAM shall review the summarized quotes/bids

and select the supplier/provider. For quotes/bids above UGX 5,000,000/=,but below

UGX 20,000,000/=, the PA and FAM shall recommend to the CEO for approval. For

quotes/bids above UGX 20,000,000/=, the Procurement Committee shall evaluate and

approve

VI. Award of Contract: After approval of the SBA, the PO shall notify the firm with the

winning quote by issuing a Local Purchase Order (LPO) for procurement of goods and

services valued at UGX 10,000,000/= and below, or prepare a contract for procurement

above UGX 10,000,000/=. In either case, the LPO or Contract should clearly spell out

the terms and conditions of the procurement, including:

Price for the goods or services

Delivery locale and date

a. Description of the goods/services, including quality, and quantity

Price of the goods/services inclusive of taxes, and validity of such prices

Passing of title and assumption of risk

Penalties for failure to deliver, or for delivery of goods/services not of the type,

quality, or quantity specified in the agreement

The LPO is completed in quadruplicate, with one copy for the supplier, one for the

requestor, one for the FAM, and one for the procurement files. The contract is

completed in duplicate, one copy for the supplier, and the second one for the

procurement files. The LPO/contract should be signed by persons authorized to

commit the UCSCU into binding financial obligations. For the vendor/supplier, the

LPO/contract should also be signed by a person with authority to commit the

organization to perform the services or deliver the goods described in the LPO/contract.

The delivery clock begins to run once the vendor/supplier has received a duly signedcopy of the LPO/contract.



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VI. Receipt of the Goods/Services

a) For Goods: The PO should inspect the goods delivered against the specifications set

forth in the LPO/contract, and verify quality, make, quantity, as well as the condition

of the goods. If the goods are satisfactory, generate a Goods Received Note GRN

(Appendix 5).The completed GRN should then be submitted to the FAM for approval and update of

the Bin Cards. If the goods are not satisfactory, the PA should advise both the FAM

and CEO, and take appropriate action as spelt out in the LPO/contract.

b) For Services: The PO, in conjunction with the requestor and other technically

competent personnel, should monitor progress against set targets/milestones. Once

the services have been satisfactorily rendered, a Contract Completion Form CCF

(Appendix 6) should be completed by the supervisor of the services or a duly

designated representative. For services not satisfactorily rendered, appropriate

remedies, in line with the terms set forth in the contract, should be pursued.

VII. Payment for goods/service: Payment for goods/services should be done in conformity

with the terms and conditions set out in the LPO/contract, and will take one of the

following forms:

a) Advance Payment: For LPOs/Contracts which stipulate that the vendor/supplier is to

be given an advance payment, such payment should be provided as stipulated in the

agreement. However, advance payments should only be made in those instances

where it is not possible for the vendor to supply without the advance payment, and

such advance payment is restricted to a ceiling of 25% of the total cost of the

goods/services.

The supplier/vendor should formally request for the advance payment by issuing an

invoice for the amount required.

The PO shall attach copies of the sections of the LPO/contract which indicate the

total price, and the nature and amount of the advance payment being sought.

The PO then raises a Payment Requisition Form PRF (Appendix 7), attaches the

invoice and relevant copies of the contract, and forwards to the FAM.

The FAM reviews the request, and approves the requisition.

The Assistant Finance Officer then prepares a cheque and a Payment Voucher PV

(appendix 8).

The FAM will approve the Payment Voucher and the cheque. Will be signed as

provided in the byelaws.

b) Progress Payment: For contracts which stipulate payment upon attainment of certain

indicators or elapsing of time, the progress payment should be processed in

accordance with the terms of the agreement. This is especially true of construction

and other works contracts.

The requestor/supervisor of the contract should certify in writing that the

supplier/vendor/contractor has attained the agreed upon progress, and that payment

should be processed. The vendor/contractor submits an invoice.



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The PO then raises a Payment Requisition Form PRF (Appendix 7), attaches the

invoice and relevant copies of the contract, and forwards to the FAM.

The FAM reviews the request, and approves the requisition.

The AFO then prepares a cheque and a Payment Voucher PV (appendix 8).

The FAM approves the Payment Voucher and the cheque will be signed as

provided in the byelaws.

c) Full/Final Payment: For full payment after all goods have been supplied or all

services have been rendered, or where the supplier/contractor is requesting for their

last installment payment.

Vendor/Contractor issues invoice for total contract or balance remaining on the

contract

PO ascertains that the goods have been satisfactorily delivered, or services have

been satisfactorily rendered, attaches relevant pages of the contract/LPO to invoice,

prepares Payment Requisition, forwards to FAM

The FAM reviews the request, and approves the requisition. The AFO then prepares a cheque and a Payment Voucher PV (appendix 8).

The FAM approves the Payment Voucher and signs the cheque

VIII. Indefinite Quantity Contracts

For procurement of routine items like stationery, printing, and other office supplies,

invitation for quotations/bids are not a suitable means of procurement, as this would

unnecessarily prolong the process.

For procurement of such items, Indefinite Quantity Contracts (IQCs) shall be awarded tosuppliers of such items on an annual basis using the following procedures:

a. The PO shall compile a list of all items routinely used by project staff, with

advice of the AA and FAM

b. The PO shall invite eligible suppliers to submit bids for supply of such items.

c. The bids contain technical aspects of the supplier, their reputation, financial

soundness, and experience, as well as compliance with statutory and legal

requirements.

d. Upon receipt of the submitted bids, the PO summarizes them using the Summary

Bid Analysis form, providing details of each supplier as contained in their

submitted bide. The Procurement Committee shall sit and evaluate firms on agreed upon

parameters, and select the three winning firms for each category of

goods/services.

f. The selected firms shall be pre-qualified to supply goods or provide services on a

competitive basis, and shall be awarded Indefinite Quantity Contracts for 1 year.

g. For each specific procurement of the goods/services under this category, the PO

shall invite quotes from the pre-qualified firms, and the contract shall be awarded

to the winning quote in terms of price, delivery period, etc.



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8.0 STORES AND INVENTORY MANAGEMENT

This section deals with the acquisition, receipt, storage, and record keeping for inventory items

of the Fund.

I. Overview of Inventory Management

a) Inventory stock represents those items purchased for use in normal operations. These

items are usually procured in bulk for use over a period of time. They include paper,

pens, file folders, etc.

b) Stock items must be kept in an appropriately controlled store, and their use restricted

to official use in pursuit of organizational objectives. The inventory store must be

kept tidy and orderly for ease of access, identification of items, and stock taking.

c) Optimum levels of inventory stock should be defined and maintained, to ensure

UCSCU activities are not hampered. However, such stock levels should not

unnecessarily tie up excessive resources.

d) The Administrative Assistant is responsible for ensuring there are adequate quantities

of inventory stock for use in operations

II. Procurement of Inventory Items

a) The Administrative Assistant in conjunction with the Finance & Administration

Manager identifies those inventory stock items that are needed. Other staff members

may also articulate their needs

b) The AA prepares a General Purchase Request form, indicating the description, nature,

and quantity of the various inventory items required and submit to the FAM

c) The FAM approves the GPR and submits to the PO who will proceed with the

procurement in accordance with applicable policies and procedures.

III. Receipt of Inventory into the Stores

a) As with any other procurement, a Goods Received Note (GRN) should be

prepared for all items received into the stores. The GRN should be prepared in

triplicate one copy for the person delivering the goods, another copy should beattached to the General Purchase Request, and the third copy should be kept in

the book. The GRN should provide the following details:

The date on which the inventory items are received

Name of person delivering the items, and vehicle registration if

applicable

Description, specification, and quantity of each item received

Signature of store keeper (AA), as well as person delivering

b) The AA should check the delivery note against the LPO/contract and the

physically delivered goods to ensure they agree, or exceptions are noted and

approved



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c) For goods that require standard or technical specifications, the AA should obtain

such certification from either the requestor or other technical person

d) Both the person delivering and the person receiving the goods should sign the

GRN

IV. Recording of Received Items onto the Stock Cards

The AA is responsible for ensuring that all items received are recorded onto

appropriate stock cards

I. There must be a Stock Card (Appendix 9) for each item of inventory in the store.

II. All receipts of inventory should be recorded on the stock card as additions

III. All issues of inventory should be recorded as reductions

IV. Stock cards should be updated each time of receipt/issue of stock, and should

reflect the physical count of stock held at any one time

V. The stock card should contain the following details:

Name of inventory item

Stock Card Number

Reference number to GRN

Date of receipt/issue

Quantity received, issued, on hand

Reorder level for that item

V. Issuing of Inventory Items from the Stores

a) Any staff member in need of items from the store should complete a Stores

Requisition Note SRN (Appendix 10) and submit to the FAM for approval.

b) The FAM approves the SRN and submits to the AA for issuance of the itemsrequested.

c) The AA issues the items to the requestor and signs the SRN

d) The requestor receives the items and also signs the SRN

e) The AA updates the appropriate store cards for the items issued

f) The SRN should contain the following details:

Date

Name of requestor

Description and specification of items required

Quantities requested

Signature of requestor Signature of issuer (AA)

Signature of recipient (requestor)

VI. Monthly Stores Reports

a) On a monthly basis, the AA should prepare a Stores Report (Appendix 11).

b) The purpose of this report is to inform management of stock levels, utilization

trends, and cost implications, to facilitate decision-making.

c) The report should contain the following information:

Month of reporting Detailed listing of each stock item



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Opening balance for each item

Quantity received during the month

Quantity issued during the month

Balance on hand at end of month

Signature of person preparing the report

Signature of person reviewing/approving the report Date the report is prepared

VII. Stock Taking

a) The IA should carry out spot inventory audits/inspections on a quarterly basis.

Such inspection should be evidenced by signing on the stock card

b) Twice a year (in June and December), comprehensive stock counts should be done

for all inventory items in the stores.

c) The following procedures should be followed in the course of stock taking:

The AA should update all inventory cards prior to stock taking

Stock stores should be neatly arranged prior to stock taking

AA should be present to assist in identification of records and items, but should

not participate in the stock taking itself

IA is in charge of stock taking exercise and should ensure adherence to set

policies and procedures

All items of stock should be counted and recorded

Damaged/obsolete items should be identified and reported No stock should be issued during stock taking, except in documented

emergency situations

The stock taking team should prepare a report detailing the recorded and

physical balances of each item of stock, and variances

The AA should give an explanation of the variances, which becomes part of the

report.

The IA should review and sign the report, and investigate variances identified.

Adjustments to stock cards should be made after approval for adjustments by

the CEO.

8.0 FIXED ASSETS

I. Fixed Assets defined

Fixed assets are tangible movable and immovable items used in the operations of an

Organization. These items have a useful life exceeding one year. Examples include land and

buildings, vehicles, computers, furniture, office equipment, etc.

II. Capitalization Policy

a) A tangible item of value shall be capitalized and considered a fixed asset when the

expected benefits of the item exceed one year, and the value of the item is 250,000/= ormore.



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b) Assets valued at less than 250,000/= should not be capitalized, but are expensed on

acquisition. They are, however, recorded as inventory for control purposes

c) The amount to be recorded for any fixed asset is the total cost of bringing the asset to

the intended condition and location of use. Costs such as transportation, clearing

charges, taxes, installation costs, etc become part of the value of the asset

d) Donated assets are capitalized at their fair market value if, at the time of donation, their

market value is 250,000/= or more, and their lifespan exceeds 2 years. Assets not

meeting this criteria should be expensed

e) Assets acquired as a group, where the value of the group of such assets meets the fixed

asset threshold, but the value of the individual assets is below the threshold, should be

capitalized

f) All major assets like buildings, vehicles, computers, etc, should be comprehensively

insured

g) All fixed assets should be marked/engraved for identification purposes. Such

marking/engraving should clearly identify the type of asset and the number within the

type as follows:

FF Furniture & Fittings

LB Land & Buildings

EQ Equipment

MV Motor vehicles

CO Computers OA Other assets

III. Fixed Asset Register

a) The Administrative Officer shall maintain a Register of all the fixed assets of UCSCU

b) The Register shall contain the following information about each fixed asset, organized

by type

Date of purchase/acquisition

Description of the asset, including condition as to new/used

Serial number of the asset, where applicable

Cost of the asset (to bring it to use)

Asset Identification Number

Location of the asset

c) The IA shall inspect the fixed asset register once a year to:

Confirm the existence, condition, usefulness and location of each asset

Identify assets which cannot be located to the CEO and recommend write-off

Identify assets no longer needed for use in UCSCU and recommend to the FM fordisposal



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d) The Administrative Assistant shall reconcile the fixed asset register to the nominal

(accounting) ledger on a quarterly basis, and report any discrepancies to the IA

IV. Transfer of Assets

a) Transfer of assets, whether permanently between locations, or temporarily for repair,should be documented using an Asset Movement Form (Appendix 15)

b) The movement form should be completed in triplicate, and should contain the

following details:

Description of the asset

Serial number and Asset Identification Number of the asset

Condition of the asset at time of transfer

Reason for transfer Permanent or Temporary

Date of Transfer

Signature and name of person authorizing transfer Signature and name of recipient

c) Where the transfer is permanent, due to reallocation or disposal, the item should be

removed from both the fixed asset register and the nominal ledger.

d) Where the transfer is temporary, such as interoffice loan or repair, the item is left on the

register and nominal ledger

V. Acquisition of Fixed Assets

a) The acquisition of fixed assets should be incorporated into the annual budgeting

process. Major asset acquisitions should be articulated in the annual budget

b) Purchase of assets shall follow the normal procurement procedures

c) Acquired assets are assigned unique asset identification numbers, which are physically

engraved on the asset, and included in the fixed asset register for identification

purposes

VI. Disposal of Fixed Assets

a) Major disposals of fixed assets should also be articulated in the annual

budgeting process, where possible.

b) Assets may be disposed of for one or more of these reasons:

Items may no longer be needed in the operations of UCSCU

Items are in poor condition and repair costs are prohibitive

Assets with high running and maintenance costs

c) Assets which are fully depreciated

d) All assets disposal must be approved by the AGM



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e) In case of donated assets, contractual obligations and conditions should be considered

prior to disposal of assets. Express written consent should be obtained from the funding

source prior to disposal of assets. Such conditions include the following:

Donor policy on asset disposal for donor funded assets

GOU policy for GOU purchased assets

VII. Depreciation of Fixed Assets

a) Depreciation is defined as the decrease in value of a fixed asset associated with wear

and tear of the asset resulting from normal use. It is a charge to the income and

expenditure account.

b) Depreciation of fixed assets begins in the month the asset is placed into service.

c) UCSCU fixed assets and/or RFSP/IFAD/GOU funded fixed assets are depreciated on a

Straight Line basis

d) The following depreciation rates apply to the various asset types:

Asset Useful Life Depreciation Rate

Furniture & Fittings 3 Years 33%

Equipment 3 Years 33%

Computers 3 Years 33%

Motor Vehicles 3 Years 33%

Buildings 25 Years 4%

Other Assets 5 Years 20%

VII. Accounting for Fixed Assets

d) On acquisition of a fixed asset

By Purchase

Debit the Fixed Asset

Credit Cash/Accounts Payable

By Donation

Debit the Fixed Asset

Credit Donation Income

e) Recording of Depreciation

Debit Depreciation Expense

Credit Accumulated Depreciation for the class of assets

f) Disposal of an Asset

Asset disposed at carrying value, or written off

Debit Accumulated Depreciation

Debit Cash/Donations/Obsolescence

Credit Fixed Assets

Asset Disposed of at less than carrying valueDebit Accumulated Depreciation



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Debit Loss on Disposal of Assets

Debit Cash

Credit Fixed Assets

Asset Disposed of at more than carrying value

Debit Accumulated Depreciation

Debit CashCredit Gain on Disposal of Assets

Credit Fixed Assets

VIII. Use, Maintenance, and Custody of Fixed Assets

a) Fixed assets form an important component of UCSCU activities. They should be

properly handled and maintained, and their use restricted to activities in support of

UCSCU. Misuse, abuse, and misappropriation are prohibited.

b) The Administrative Officer, in collaboration with the Procurement Officer, should setup maintenance schedules for computers, photocopiers, vehicles, equipment, and other

assets

c) The FAM, with delegated authority to the Administrative Officer, is responsible for the

safe custody and proper use of all UCSCU assets. However, individual staff members

with assets allocated to them as part of their job responsibilities are responsible for their

safe use and custody.

d) Removal and use of fixed assets away from the UCSCU premises should be authorized

by the CEO or his representative.

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