Policy and Procedure Guidelines for Financial Management of the Mekong Wetlands Biodiversity Programme

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Policy and Procedure Guidelines for
Financial Management of the Mekong
Wetlands Biodiversity Programme


Draft 1.0















Policy and Procedure Guidelines for Financial
Management of the Mekong Wetlands
Biodiversity Programme




Prepared by

Pr
ogramme Management Unit

Mekong River Basin Wetland Biodiversity Conservation and Sustainable Use
Programme



Revised October 2005



Policy and
Procedure Guidelines for Financial Management

Revised October 2005

i

Contents

Introduction

................................
................................
................................
...............

1

Principles of Sound Financial Management

................................
...........................

2

Revisions to Policies and Procedures

................................
................................
....

3

1. Delegation of Autho
rity

................................
................................
..........................

1

2. Preparing Workplans and Budgets

................................
................................
........

1

What is a workplan?

................................
................................
..............................

1

What is a budget?

................................
................................
................................
..

2

Revising Workplans and Budgets

................................
................................
..........

2

The Planning Process

................................
................................
............................

3

Preparing an annual workplan and budget

................................
.........................

3

1. Informal discussions with key stakeholders at national and provincial level

3

2. Planning workshops at national and provincial level

................................
...

3

3. Planning session within the National Programme Office and Provincial
Project Office

................................
................................
................................
..

3

4. Additional discussion with the National Programme Director in preparation
for presentation of the workplan and budget to the National Steering
Committee

................................
................................
................................
......

3

5. Pres
entation of annual workplan and budget to Provincial and National
Steering Committee

................................
................................
........................

4

6. Presentation of approved annual workplan and budget to Executive
Regional Steering Committee

................................
................................
.........

4

Preparing a six
-
month workplan and budget

................................
......................

4

Revising Workplans and Budgets

................................
................................
.......

6

3. Reporting
................................
................................
................................
...............

1

Monthly Request for Funds by National Programme Office and Provincial Project
Office

................................
................................
................................
.....................

1

Monthly Expenditure
Report

................................
................................
..................

1

National Programme Office and Provincial Project Office Budget versus Actual
Report with Narrative

................................
................................
.............................

2

Quarterly Request
for Cash Advance for UNDP

................................
....................

2

Quarterly Expenditure Report for UNDP

................................
................................

2

One Year/Six Month Work Plan with Budget

................................
..........................

3

4. Financial Transactions
................................
................................
...........................

1

How This Section Is Organised

................................
................................
..............

1

About Lead time

................................
................................
................................
....

1

Recruitment and Hiring

................................
................................
..........................

1

Local staff

................................
................................
................................
...........

1

International staff

................................
................................
................................

2

Payroll

................................
................................
................................
...................

1

Local staff on country payroll

................................
................................
..............

1

International staff

................................
................................
................................

2

Purchase of Goods and Services

................................
................................
...........

1

Consultants (Individual Local)

................................
................................
............

1

Int
ernational (Individual)

................................
................................
.....................

2

Institutional arrangements

................................
................................
..................

3

Equipment

................................
................................
................................
..........

4

Policy and
Procedure Guidelines for Financial Management

Revised October 2005

ii

Consumables and supplies (for National Programme Coordinator and Provincial
Project Office) (same process as above)

................................
............................

5

Consumables and supplies (for PMU)

................................
................................

6

Travel

................................
................................
................................
....................

1

DSA and Per Diem Rates

................................
................................
...................

1

DSA and Per Diem for staff attending meetings

................................
..............

1

DSA and Per Diem for duty travel for partner and government staff

................

1

Responsibilities and Authorizations for Travel

................................
....................

2

Local travel (by air or by train)

................................
................................
............

3

Road trip (except project vehicle)

................................
................................
.......

4

Project vehicle

................................
................................
................................
....

5

International (Cash advance)

................................
................................
.................

6

Settlement of travel expenses

................................
................................
................

7

M
eetings and workshops: Request for approval and cash advance

.......................

1

Rental and Lease Agreements (for property)

................................
......................

1

Opening bank account
s

................................
................................
.........................

1

Personal Loans to Staff
................................
................................
..........................

1

Frequently Asked Questions about Financial Management

................................
.......

1

Hiring Consultants

................................
................................
................................
.

1

Consulting Rates

................................
................................
................................
...

1

Signing Contracts for Consultants

................................
................................
..........

2

Deducting Income Tax from Consultant’s Payment

................................
................

2

Purchasing Committee
................................
................................
...........................

2

Procuring Services

................................
................................
................................
.

3

Preparing Budgets

................................
................................
................................
.

4

Getting Budget Information

................................
................................
....................

4

Spending Over Bu
dget

................................
................................
..........................

5

Travel

................................
................................
................................
....................

5

Annex

................................
................................
................................
........................

1

DSA and Per Diem Rates

................................
................................
......................

2

Policy and
Procedure Guidelines for Financial Management

Introduction

Revised October 2005

1

Introduction


The Mekong River Basin Wetland Biodiversity Conservation and Sustainable Use
Programme (MWBP

or ‘the Programme’
) is a partnership programme. Regional
partners
are

the Global Environment Facility, Government of the Netherland
s, UNDP,
the Mekong River Commission and IUCN. At the national and provincial level,
partners
are

Government Ministries, Departments, Institutes and Agencies, local and
international NGOs and civil society organizations.
By working together, the partners
h
ope to, “
strengthen capacity at regional, national and local levels for wetland
biodiversity conservation and sustainable use in the Lower Mekong Basin.”


The specific
objectives
for

the
Programme

are described in Regional and National
Results Frameworks

as ‘Outputs’. Outputs describe
the changes

each the partner will

try
to bring about

over the
next 5 years of

the Programme.


Activities describe wh
at must be done to produce the

Outputs

in the Results
Frameworks
. The workplans and budgets for these acti
vities are jointly negotiated by
the partners. These negotiations take place first
(steering committees)
at the local
le
vel, then at the national level
and are reviewed and approved at the regional level.
Once approved, the worksplans go back to the local
level where National and
Provincial Project Office
s begin to implement their workplans.
This process of
consultation, negotiation, review and approval will take place on an annual basis. The
proposed cycle is outlined in the
figure:



Annual cycle for work
plan

and budget

development



Event

July

A

S

O

N

D

J

F

M

A

M

J

PMC meeting

x



x









Implementation of current
workplan

and budget




















Mid year Review
















Drafting Workplan and budget for the
next year
















A
pproval by National Steering
Committee














Finalising workplan and budget















Approval by Regional Steering
Committee







x






Implementation

of new workplan
and
budget

















Policy and
Procedure Guidelines for Financial Management

Introduction

Revised October 2005

2


Principles of Sound Financial Management


IUCN has been contracted by UNDP to manage the funds at the regional, national
and provincial levels. In managing the funds
, IUCN is responsible for ensuring
sound
financial management
. Sound financial
manag
em
ent

is based on a number of
basic

principles
.
These principles were not invented by IUCN; they are
internationally

accepted accounting and

financial management practices

recognized worldwide by
leading public and private sector organizations.

The basic principles of sound
financial management
adhered
to include, among others, principles of




Transparency


Any one of the partners should be able to see clearly how any other partner is
spending the funds they agreed to allocate to MWBP activities. This applies to direct
funds, co
-
financed funds, and parall
el funds.




Internal checks and b
alances


The same person
cannot
‘request’

and ‘approve’ spending a sum of money. No
amount of money, however small, can be spent without the approval of someone at
least one step higher up in the chain of command within an
organization.
This is often
referred to as the two
-
signature system




Inde
pe
ndent
external a
uditing


The records showing how funds have been spent are subject to
annual
examination
by an independent, impartial financial expert, usually a
n internationally

re
cognized
accounting firm.


P
rinciples
of sound financial management are designed to:





prevent corruption and reduce or eliminate financial risk or loss;



ensure that funds are spent according to the agreed workplans;



ensure that people responsible for
implementing
the
activities in the workplans
have the financial resources they need to do their job; and



help programme staff spend funds efficiently and effectively

and report
accurately on the funds they spend
.


As the custodian or ‘financial manager’ o
f the MWBP, IUCN is responsible for:




physically managing and safeguarding
funds;

Policy and
Procedure Guidelines for Financial Management

Introduction

Revised October 2005

3



disbursing funds to partners in a timely manner for spending on Programme
activities;




keeping
accurate and up
-
to
-
date
records of all financial transactions related to
Progr
amme activities;



providing financial reports to the partners, to staff, and to the external auditor;



helping partners and staff with financial planning, budgeting, monitoring and
evaluation;



helping par
tners and staff understand and comply with

financial
policies

and
procedures needed to ensure effective financial operations.


Effective financial
operations depend

on clear policies and procedures for different
areas of activity
such as
:




cash management (budgets, requests for funds and disbursement of fun
ds, etc.)



personnel policies (recruiting, hiring, salary scales, etc.)



delegation of authority for signing approvals on spending
at set levels
(who can
approve up to what amount

of money to be spent
);



purchasing (goods and services);



reimbursement for tra
nsportation and travel expenses;



requirements for supporting documentation (receipts, quotations, technical
specifications, etc.); and



financial reporting requirements and reporting schedules.


Revisions to Policies and Procedures


The policies and proc
edures described in this document
are
guidelines

and subject to
revision as the ne
ed arises. All staff are encoura
ged to offer comments and
suggestions on the content, structure and format of this document. Please send your
comments to:


Richard Friend

MWB
P Programme Manager


richard.mwbp@iucnlao.org

Anthony Princesa

Mekong Finance Manager


princesa@iucnt.org

Peter John Meynell

UNDP Team Leader


peterjohn.meynell.undp.org





Policy and
Procedure Guidelines for Financial Management

1. Delegation of Authority

Revised October 2005

1

1. Delegation of Authority


This section describes who has au
thority to appro
ve what actions
and

expenditures.

Whenever there is any doubt about delegation of authority,
check with the person your report to directly for clarification.


-

Insert revised table here
-
Policy and
Procedure Guidelines for Financial Management

2. Preparing Workplans and Budgets

Revised October 2005

1

2.
Preparing
Wo
rkplans and Budgets



The overall structure
of the
M
ekong Wetlands Biodiversity
Programme

is described in
the document, Mekong River Basin Wetland Biodiversity Conservation and
Sustainable Use Programme, Annex 1.1 A.
Detailed Terms of Reference for Steering
Committees and senior Programme Managers are descr
ibed in Annex 1.1 B
,

and for
National and Programme Staff in Annex 1.1 C.



These Annexes describe organizational structures and duties of management staff,
but they do not describe the process
es that make the Programme work
. One of the
key processes for

i
mplementing the MWBP is the process
of preparing
, reviewing
,
revising

and approving the annual workplans and budgets for the activities
the

National Programme Office
and the Provincial Project Office
will undertake. This
process and the quality of the annu
al workplans and budgets will reflect how
effectively the partners are working together.


The annual cycle for
preparing workplans and budgets is outlined in the figure below.



July

A

S

O

N

D

J

F

M

A

M

J

PMC meeting

X



X









Implementation of cu
rrent
workplan and budget




















Mid year Review
















Drafting Workplan and budget
for the next year
















Approval by National Steering
Committee














Finalising workplan and budget















Approval by Re
gional Steering
Committee







X






Implementation of new
workplan

and budget



















What is a workplan?


Workplans are the basis for reporting and for monitoring and evaluation

(M&E)
. A
workplan
is

a list of activities that have to be don
e to achieve the Outputs described
in the Results Frameworks in the Programme document. The workplan includes
an
activity

name and code, a brief description of the
activity
, a schedule of when each
activity

should take place, and who is responsible for mak
ing activities and tasks
happen. Activities are further broken down into tasks. A task is one of several steps
required to complete an activity. Usually, e
ach

Output will have four to five a
ctivities,
and each
activity

will have four to five
task
s.


Policy and
Procedure Guidelines for Financial Management

2. Preparing Workplans and Budgets

Revised October 2005

2

For ex
ample:


Activity

1:

Prepare a fire and water management
strategy

for Tran Chim

National
Park (Total Cost:
$US
100,000)

Task

1:


Organize a workshop with

local stakeholders to review the
status


and
start the planning process

Task

2:


Hire a consultant
to do an environmental inventory of the Park

Task

3:

Organize a training programme for the local River Basin Organization

Task

4:


Organize a local volunteer fire ranger brigade


In preparing a workplan, you do not need to specify where
a workshop or trai
ning
programme
will be held, what time it starts or the many other detai
ls that go into
planning and
implementing

a particular

event. The workplan is an over
all plan for
implementation of a
ctivities and does not need
to record the

fine detail of
individual

tasks
.


An
annual workplan presented to the National and Regional Steering Committee for
approval is part of an overall regional fram
ework of

workplans. Whilst the content of
each workplan and budget will be different, the process for planning and the fo
rmat
should be the same.
Without some uniformity in process and format, it would diffic
ult,
if not impossible, for the
Programme
Management

Unit to monitor and evaluate the
overall progress

and impact of the Programme,
to
extract and share lessons learned
,

or to report to the other partners
.


T
he workplan is the basis for more detailed planning

at the national and provincial
level
, which is t
he responsibility of the National Programme Coordinator and the
Provincial Project Co
-
Manager.


What is a budget?


A budget is an approved plan of income and expenses for a workplan. A budget

show
s

how much money is needed for each
activity

and
task

in the workplan.

National Programme Managers and Provincial Project Co
-
Managers will need up
-
to
-
date financial reports f
rom the Programme Management Unit to help them prepare
their country workplan budgets.


Revising Workplans and Budgets


Workplans and budgets are forecasts and estimates used for planning purposes and
for monitoring and evaluation progress. In the real wor
ld, conditions are constantly
changing and it is often necessary or desirable to change plans.
National Programme
Coordinators and Provincial Project Co
-
Managers should not regard workplans and
budgets as “straightjackets” but as management tools. Whenever

a change is
neces
sary or desirable, the workplan

and budget
can

be revised
, provided the
resources
are available
and
any
necessary

approvals

can be obtained

in time.
More
detail on this process is provided in the following section.


Policy and
Procedure Guidelines for Financial Management

2. Preparing Workplans and Budgets

Revised October 2005

3

The Planning Process

P
reparing an annual workplan and budget


1. Informal discussions with key stakeholders at national and provincial level


Participants: National Programme Coordinator and staff, Provincial Project Co
-
Manager and staff, Programme Management Unit staff
, member
s

of
National and
Provincial Steering Committee, other important stakeholders.


Purpose: Review some of the lessons learned from implementing the last workplan;
get input on what activities should go into the next workplan; promote partnership
and coopera
tion.


Result: A
list of proposed activities with indicative resource allocations and agencies
willing to implement activities.


2. Planning workshops at national and provincial level


Participants: Staff from the Programme Management Unit, r
ep
re
s
entative
s from
UNDP and Mekong River Commission
,
members of the
National
and Provincial
Steering Committees, National Programme Coordinator and staff, Provincial Project
Co
-
Manager and staff.


Purpose:
Using inputs from the informal discussions and other relevant
information,
prepare a draft workplan and budget. This is a general plan and does not need detail
at the
task

level.


Result: Draft workplan and budget


3. Planning session within
the
National Programme Office and Provincial
Project Office


Participants:
staff of the National Programme Office, staff of the Provincial Project
Office, staff from the Programme Management Unit


Purpose:
To specify
in more detail the Activities and
task
s
and to prepare a detailed
budget for the workplan.


Result: Final draft wo
rkplan and budget


4. Additional discussion with the National Programme Director in preparation
for presentation of the
workplan

and budget to the National Steering
Committee


Participants: National Programme Director, National Programme Coordinator, Proje
ct
Co
-
Manager, MWBP Programme Manager or delegated staff


Policy and
Procedure Guidelines for Financial Management

2. Preparing Workplans and Budgets

Revised October 2005

4

Purpose:
To
review the final draft and help the National Programme Director prepare
for the presentation


Result: Agreed final draft workplan and budget and presentation plan


5. Presentation of ann
ual workplan and budget to Provincial and National
Steering Committee


Participants: Members of the Provincial Steering Committee, members of the
National Steering Committee, representatives from UNDP and the Mekong River
Commission, invited
stakeholders

and observers


Purpose: To present the annual workplan and budget for final review and approval.


Result: Final approv
ed annual workplan

and budget.


Note:
Either Committee may approve the workplan and budget “pending revisions”.
A
copy of the revised wo
rkplan and budget can be sent to the Chair of the Committee
as evidence that the requested changes were made. The revised workplan or budget
does not need a second round of approval.


6. Presentation of approved annual workplan and budget to Executive Regi
onal
Steering Committee


Participants: members of the Executive Regional Steering Committee, MWBP
Programme Manager, UNDP Team Leader, representatives from UNDP and the
Mekong River Commission, invited stakeholders and observers


Purpose: To review countr
y workplans and budgets from a regional perspective


Result: Executive Regional Steering Committee approval


Note: the Regional Steering Committee may approve a workplan or budget “pending
revisions”. A copy of the revised workplan or budget can be sent to

the Chair of the
Committee as evidence that the requested change was made. The revised workplan
or budget does not need a second round of approval.

Preparing a six
-
month workplan and budget


1. N
ational Programme Coordinator
and Project Co
-
M
anager

prepare

detailed
schedules of when activities and tasks will take place over
the
next six months
.


Participants:
National Programme Director, National Programme Coordinator,
Provincial Project Co
-
Manager
, IUCN Wetland Project Co
-
Managers

Purpose: To prepare detai
led plans and
schedules

for activities and tasks


Result: A detailed workplan and budget

Policy and
Procedure Guidelines for Financial Management

2. Preparing Workplans and Budgets

Revised October 2005

5


2. Liaise with the Programme Management Unit, Steering Committee members and
other stakeholders members to ensure that activities do not overlap or conflict and
that
regional activities are built into the workplan schedule.


Participants:
National Programme Director, National Programme Coordinator,
Provincial Project Co
-
Manager
, IUCN Wetland Project Co
-
Managers


Purpose: Ensure smooth running of the workplan and facili
tate cooperation among
partners



Result: Smooth implementation of the workplan and improved lines of communication
and cooperation among partners.


3. Prepare a month
-
by
-
month estimate of expenditures based on the detailed
schedule and workplan for each o
ffice


Participants: National Programme Coordinators, Provincial Project Co
-
Managers
,
Finance

and Admin
istration

Officer
s


Purpose: Prepare a detailed month
-
by
-
month budget for funding


Result: A request for funds based on a detailed budget


4. Present a d
etailed schedule of activities to National Steering Committee and
Provincial Management Board


Participants: National Programme Director, National Programme Coordinator


Result: Agreed schedule of activities and tasks


5. Together with previous six
-
month e
xpenditure report, request Finance Department
of the Programme Management Unit and National Programme Office and Provincial
Project Office to prepare specific expenditures for provincial and national
components


Participants:
National Programme Coordinator
, Provincial Co
-
Manager, Finance and
Administration Officer, staff from Programme Management Unit


Purpose: To report on planned versus actual expenditures


Result: Expenditure report (Planned versus Actual)


Policy and
Procedure Guidelines for Financial Management

2. Preparing Workplans and Budgets

Revised October 2005

6

Revising Workplans and Budgets



Workplans and

budgets are management tools. Circumstances often require that
workplan activities and tasks and the budgets that go with them need to be revised.
The following procedure offers a guideline on how this can be done.


1. National Programme Coordinator or Pr
ovincial Project Co
-
Manager, in
consultations with relevant stakeholders, proposes a new activity or task or a revision
to an existing activity or task to the MWBP Programme Manager


2. The Programme Manager reviews the proposed change or revision in cons
ultation
with relevant stakeholders.


3.1 If the proposed change is for a task, the National Programme Coordinator or the
Provincial Co
-
Manager has the authority
to
add, delete or revise the task
, providing
there are funds in the budget to cover the costs.


3.2 If the prop
osed change is for an activity, after consultation with the Programme
Manager, the National Programme Coordinator or the Provincial Co
-
Manager should
propose the change to the Provincial or National Steering Committee and ask for
their inp
ut and approval before making the proposed change. If there are not
sufficient funds for the proposed change in the approved budget, the National
Programme Coordinator or the Provincial Co
-
Manager can discuss with the National
Programme Director and the Pr
ogramme Management Unit
where additional funds
may be sourced
. If additional funds cannot be sourced, the proposed change can be
presented as part of the next annual workplan and budget.

Policy and
Procedure Guidelines for Financial Management

3. Reporting

Revised October 2005

1

3.
Report
ing


Monthly Request for Funds by
National Programme Offic
e

and
Provincial
Project

Office


Requested and prepared by:
FINANCE AND ADMIN OFFICER

of
National
Programme Office

or
Provincial Project Office


Approved by:
National Programme Coordinator

or
Provincial Co
-
Manager


Processed by:

IUCN
Programme Manager

and
/or UNDP Team
Leader to

give
concurring approval, or it can be authorised by Mekong Finance Manager


Frequency: Monthly


Lead time:

Monday of the
third

week of each month


Process: For requests from the Vietnam
National Programme Office

or
Provincial
Pro
ject Office
, the IUCN Country Office consolidates the requirements for the two
offices before sending the report to
the
Mekong

Finance/IUCN
Programme Manager


Form: Request for Funds


Monthly Expenditure Report


Requested and prepared by:
FINANCE AND ADMIN

OFFICER

of
National
Programme Office

or
Provincial Project Office


Approved by:
National Programme Coordinator

or
Provincial Co
-
Manager


Processed by: IUCN
Programme Manager

and/or UNDP Team Leader to review and
give
concurring

Approval; Mekong Finance Ma
nager can alternatively provide the
review


Frequency: Monthly or as requested


Lead time: One week after the end of each month


Process: For Vietnam, the
National Programme Office

and
Provincial Project Office
,
one copy of the report
should

to be sent to
the IUCN
Programme Manager

and one
copy to the IUCN Country Office in (Hanoi?) to provide secondary review of
expenditures
.
Expenditure reports submitted to the
National Programme Director

should have clearance from the IUCN
Programme
Manager

and
/or UNDP T
eam
Leader and Mekong Finance Manager




Form: Expenditure Report


Policy and
Procedure Guidelines for Financial Management

3. Reporting

Revised October 2005

2


National Programme Office

and
Provincial Project Office

Budget versus

Actual Report with Narrative


Requested and prepared by:
National Programme Coordinator

or
Provincial Co
-
Manager

with
assistance from the
FINANCE AND ADMIN OFFICER


Approved by: IUCN
Programme Manager

to review (and approve?)


Processed by: Mekong Finance IUCN
Programme Manager

and/or UNDP Team
Leader


Frequency: Monthly


Lead time: One week following the end of each mont
h together with
an
expense

report


Process: The
FINANCE AND ADMIN OFFICER

will help prepare this report but the
National Programme Coordinator

and
Provincial Co
-
Manager

need to explain any
significant changes. An Expenditure Report submitted to the
Nationa
l Programme
Director

should have clearance from the IUCN
Programme Manager

and/or UNDP
Team Leader and the Mekong Finance Manager


Form:

Budget & Actual Report


Quarterly Request for Cash Advance for UNDP


Requested and prepared by: Mekong Finance IUCN
P
rogramme Manager


Approved by: UNDP Team Leader


Processed by: Mekong Finance


Frequency: Quarterly


Lead time: On or before the 10
th

of the month following the end of each quarter


Process: Mekong Finance to prepare the report for signing by Finance and I
UCN
Programme Manager


Form:

UNDP Expenditure Report


Quarterly Expenditure Report for UNDP


Requested and prepared by:


Approved by:


Processed by:

Policy and
Procedure Guidelines for Financial Management

3. Reporting

Revised October 2005

3


Frequency:


Lead time:


Process:


Form:



One Year/Six Month Work Plan with Budget


Requested and
prepared by:
National Programme Office
, PO or
Programme
Management Unit

to work with Finance Offices


Approved by: National, Provincial Committee then Steering Committee



Processed by: Workplan to be approved by committees



Frequency: every six months


L
ead time: One month before the start of the period



Process: Workplans are prepared by local
committees

and approved by Provincial,
National and Regional Steering Committees.
Finance
can

help prepare budgets.


Form:

Workplan and Budget


Policy and
Procedure Guidelines for Financial Management

4. Financial Transactions Introduction

Revised October 2005

1

4.
Financial Tr
ansactions


How This Section Is Organised


Each transaction is a subsection. This allows us to revise and update a single
procedure without revising the entire manual. The revision date should appear in the
footer.


Each transaction provides information on
:


Requested and prepared by:

Approved by:

Processed by:

Frequency:

Lead time:

Process:

Form:


Forms are contained in the Annex. If you are using a different version of a form, you
should replace your ‘old’ version with the form in this Annex.


Ab
out
Lead time


Part of a
manager’s

job is to plan ahead and anticipate future needs and
requirements.

Lead time


is how much time you should allow for completion of all
the steps required in a process.
It is the
recommended minimum amount of time

you
sho
uld allow for
a

transaction to be processed. Because of
circumstances beyond
your control, you
often do not

have the recommended amount of lead time. In such
cases, you can expect the unit responsible for processing your request to do the best
they can to
meet your requirements

but you must accept that they cannot guarantee
to meet your deadline. Such cases should
be exceptions and not general practice.

Policy and
Procedure Guidelines for Financial Management

4. Financial Transactions Recruitment and Hiring

Revised October 2005

1

Recruitment and Hiring


Local

staff


Requested and prepared by: N
ational
P
rogramme
C
oordinator

or P
rojec
t
C
o
-
M
anager


Appro
ved by: IUCN Programme Manager or
NDP
Team Leader



Processed by:
IUCN country
HR Office

(for Laos

and Vietnam
)
,
IUCN

ARO
-
HR
-
in
Bangkok
for

Thailand and Cambodia hiring.


Frequency: As required


Lead time:

Two months


Process:

A r
eq
uest
for hiring staff must be

ba
sed on the approved staffing plan. Send
an approved Personnel R
equisition
form

to
the
HR

office
.

The general steps in the
hiring process are:


1

Discuss and agree
on the
need

for new staff

Task Team

2

Prepare Terms of Reference

and get
the
necessary appr
ovals for the position and
budget

IUCN
Programme Manager

UNDP
Team Leader

3

Consider office space and equipment
requirements for new staff

Task Team

4

Place advertisement

HR

5

Shortlist according to agreed criteria

HR

6

Se
t up
an
interview panel and interview
shortlisted candidates

HR

7

Prepare note for file

Chair or S
ecretary of
interview panel

8

Follow
-
up references

IUCN ARO

or Country office

9

Negotiate with selected candidate

IUCN ARO

or Country office



Form: Perso
nnel R
equisition


Policy and
Procedure Guidelines for Financial Management

4. Financial Transactions Recruitment and Hiring

Revised October 2005

2

International

staff


Requested and prepared by: P
rogramme
MU


Approved by: IUCN
Programme Manager
/UNDP
Team Leader


Processed by:
HR
-
ARO


Frequency: As required


Lead time:
two months


Process
:
A r
eq
uest for hiring staff must be

ba
sed o
n the approved staffing plan. Send
an approved Personnel R
equisition
form

to HR.



Form:
Personnel
Requisition



Policy and
Procedure Guidelines for Financial Management

4. Financial Transactions Payroll

Revised
October 2005

1

Payroll


Local staff on country payroll


Requested and prepared by: HR Office


Approved by: IUCN
Programme Manager
/UNDP
Team Leader


Processed

by: Country HR Office


Frequency: From date of hiring


Lead time: Two weeks before the 25
th

of each month


Process:
to start the payment of salary process, submit a copy of the contract to
country finance office, a memo;
Payment of salaries is b
ased on
t
he signed contract
and approved Terms of Reference.


Form:
memo and contract


Policy and
Procedure Guidelines for Financial Management

4. Financial Transactions Payroll

Revised
October 2005

2

International s
taff



Requested and prepared by: ARO
-
HR/Lao Finance


Approved by: IUCN
Programme Manager
/UNDP
Team Leader


Processed by: ARO
-
HR


Frequency: From date of hiring


Lead time: Two weeks
before 25
th

of each month


Process:
to start the process, same as above;
Payment of salaries is b
ased on
the
signed contract and approved Terms of Reference.


Form:
memo

and
contract

Policy and
Procedure Guidelines for Financial Management

4. Financial Transactions Purchase of Goods and Services

Revised October 2005

1

Purchase of Goods and Services

Consultants

(Individ
ual
Local
)


Requested and prepared by:
National Programme Coordinator

or
Provincial Co
-
Manager

or
Programme Management Unit


Approved by:

Contracts for up to $US 5,000 to be signed by
National Programme
Coordinator

or
Provincial Co
-
Manager
.
Contracts for m
ore than $US 5,000 must be
signed by IUCN
Programme Manager

or UNDP
Team Leader


Processed by:

country
HR
-
Office or
Project Office


Frequency:

As required according to
the approved workplan
activity
.


Lead time:
Two months in advance of the estimated start

date.


Process:
HR
-
Office or Project Office should find a suitable consultant. The standard
procedure is to submit the names of 3
candidates

along with their CVs, daily rates
and the number of days they would be required. The
National Programme
Coordinato
r
,
Provincial Co
-
Manager

or
Programme Management Unit

can indicate

in
an attached memo

which of the 3 they would prefer and why. If only one name is
submitted, the
National Programme Coordinator
,
Provincial Co
-
Manager

or

Programme Manager

must attach a mem
o explaining why they did not include two
other names.

The general steps in the process of hiring a local consultant are:


1

Discuss and agree on the need for consultants

Task Team

2

Prepare Terms of Reference and get the necessary
approvals for the posi
tion and the budget

IUCN
Programme
Manager

UNDP Team Leader

3

Search appropriate networks, databases, CV files
etc.

Task Team

4

Prepare shortlist of three candidates

Task Team

5

Establish availability and fees according to cost
norms

Task Team

6

Revie
w candidates and check with National
Programme Director

Task Team

7

Come to an agreement with the selected candidate
and prepare a contract

National Programme
Coordinator

8

Monitor work done by consultant and authorise
payments according to schedule, bi
lling and
satisfactory completion as per the contract and
Terms of Reference

UNDP Team Leader
IUCN
Programme
Manager

National
Programme
Coordinator


Form: Personnel Requisition


Policy and
Procedure Guidelines for Financial Management

4. Financial Transactions Purchase of Goods and Services

Revised October 2005

2

International

(Individual)


Requested and prepared by:

National Programme Co
ordinator
,
Provincial Co
-
Manager

or
Programme Management Unit


Approved by:

IUCN
Programme Manager

or UNDP Team Leader


Processed by:

Country HR and
National Programme Office

or
Provincial Project
Office

recommending to IUCN
Programme Manager

or UNDP Team
Leader


Frequency:

As required according to the approved workplan
activity
.


Lead time:
Two months in advance of the estimated start date.


Process:
The IUCN
HR
-
Office or
the
National Programme Office

or
the
Provincial
Project Office

should
identify

a suit
able consultant. The standard procedure is to
submit the names of 3
candidates

along with their CVs, daily rates and the number of
days they would be required. The
National Programme Coordinator
, P
rovincial
C
0
-
M
anager or MWBP Programme Manager
can indicate

in an attached memo which of
the 3
candidates
they would prefer and why. If only one name is submitted, the
National Programme Coordinator
,
Provincial Co
-
Manager

of
Programme Manager

must attach a memo explaining why they did not include two other names.

The
general steps in hiring an international consultant are the same as for hiring a local
consultant, except, in the table above, replace step 7 with:


7

Come to an agreement with the selected candidate
and prepare contract

UNDP Team Leader
IUCN Programm
e
Manager

Programme Coordinators




Form: Personnel Requisition


Policy and
Procedure Guidelines for Financial Management

4. Financial Transactions Purchase of Goods and Services

Revised October 2005

3

Institutional arrangements


(
Consulting

companies, co
-
financing with other institutions, grants to institutions)


Requested and prepared by:

National Programme Coordinator
,
Provincial Co
-
Ma
nager

or Programme Management Expert (e.g. Alvin)


Approved by:

IUCN
Programme Manager

or UNDP Team Leader


Processed by:

National Programme Coordinator
,
Provincial Project Office
,
Programme Management Unit


Frequency:

As required according to the approve
d workplan
activity
.


Lead time:
Two months in advance of the estimated start date.


Process:
The
National Programme Coordinator
,
Provincial Co
-
Manager

or
Programme Management Unit

making the request should identify 3 institutions and
submit official quota
tions from those institutions for the goods or services. If only the
name of only one institution is submitted, the
National Programme Coordinator
,
Provincial Co
-
Manager

or

Programme Manager

must attach a memo explaining why
they did not include two other
names.


Partnership arrangements do not qualify under purchase requisition as they are
considered to be sole sourced and a stakeholder in the program; it is assumed that
they will work to achieve the terms of reference considering that their own resources
are directed at the same deliverables.


Form:
Purchase
Order


Policy and
Procedure Guidelines for Financial Management

4. Financial Transactions Purchase of Goods and Services

Revised October 2005

4

Equipment



Requested and prepared by:
National Programme Office
,
Provincial Project Office

or
Programme Management Unit


Approved by:
National Programme Coordinator

or Prov
incial C
o
-
M
anager an
d UNDP
Team Leader

for
Programme Management Unit

requests


Processed by:
IUCN
Laos A
dministration Office

with IUCN Programme Admin Focal
Point
for Laos, Cambodia and Thailand requests; IUCN Vietnam Office for Vietnam
requests


Frequency: As required accord
ing to the approved
workplan

and budget.


Lead time:
Two weeks minimum for payment and processing

Process:

The basic steps in the process are:

1

Discuss and agree on the need for the equipment

Task Team

2

Prepare detailed specifications

and a Requisitio
n
Slip. In the Programme Management Unit, the
Requisition

Slip must be approved by the UNDP
Team Leader.

Task Team

3

Obtain at least three quotations

Admin

4

If less than three quotations, give justification

Admin

5

If the purchase is less than $US 250
.00, pay
directly from Petty Cash fund

Admin

5

If the purchase is between $US 250.00 and $US
500.00, the Admin Officer decides which of the 3
quotations is most appropriate, taking into account
any preferences expressed by the Task Team
making the request
.

Admin

5

If the purchase is over $US 500.00, p
repare
documentation for
the
Purchase Committee
(
Requisition

Slip, 3 quotations, justification if less
than 3, specifications)

Admin

5

Convene a
Purchase Committee
meeting. A
Purchase Committee comprises:
1
Programme or
Project Office staff, 1 Finance Office staff and 1
staff from IUCN Project Office or Programme
Management Unit

Programme Management
Unit

or

National Programme
Office or

Provincial Project Office

6

Admin issues a Purchase Order on approval fr
om
the Purchase Committee


Admin


Form:
Requisition

Slip, Quotation Report
, Purchase

Order

Policy and
Procedure Guidelines for Financial Management

4. Financial Transactions Purchase of Goods and Services

Revised October 2005

5

Consumables and supplies

(for
National Programme Coordinator

and
Provincial Project Office
)

(same process as above)



Requested and prepared by: individual staff in

National Programme Coordinator
,
Provincial Project Office

or
Programme Management Unit


Approved by:
National Programme Coordinator

or
Provincial Co
-
Manager


Processed by: Finance and Admin Officer within the
National Programme
Coordinator

or
Provincial P
roject Office


Frequency: As required


Lead time:
One week


Process:
If a single item
on a requisition slip
costs more than $US it must be
approved by the Purchasing Committee.


Form:
Requisition


Policy and
Procedure Guidelines for Financial Management

4. Financial Transactions Purchase of Goods and Services

Revised October 2005

6

Cons
u
mables and s
upplies (for PMU)



Requested and prepa
red by:
Programme Management Unit


Approved by: IUCN
Programme Manager

or UNDP Team Leader or Laos
Programme Manager


Processed by: Laos Admin


Frequency: As required


Lead time: Two weeks


Process: If a single item costs more than $US it must be approved
by the Purchasing
Committee. Repeat orders do not need approval from the Purchasing Committee.


Form: Requisition, Purchase Order

Policy and
Procedure Guidelines for Financial Management

4. Financial Transactions Travel

Revised October 2005

1


Travel

DSA and Per Diem Rates


ARO issues regularly updated official rates for the Mekong DSA and Per Diem (see
Annex). The
se rates will apply to all MWBP activities carried out by IUCN
-
MWBP
staff, other IUCN staff involved with MWBP activities and consultants working on
IUCN
-
MWBP contracts.


DSA stands for Daily Sustenance Allowance. DSA covers the cost of three meals
and ot
her incidentals such as laundry, local transportation and miscellaneous
expenses but does not include hotel accommodation.


Per Diem is DSA plus the cost of hotel accommodation. If you are paying the cost of
the hotel directly, give a DSA. If the consulta
nt or staff is paying for the hotel, give a
Per Diem.


For IUCN staff or consultants on IUCN
-
MWBP contracts, use the ARO Mekong rates.


DSA and Per Diem for staff attending meetings


Whether or not staff get DSA or Per Diem for attending a meeting should
be decided
before the meeting or workshop takes place and the participants informed in
advance. Rates may differ from the official published DSA or Per Diem rates if meals
and accommodations are provided for by the organizers. For example, for a
provincial

meeting, participants from other provinces are provided with transportation
and an “allowance” that is considered reasonable for that event at that location. A
participant from a neighbouring province might receive a DSA of $US 20.00. Of this
amount, $US
10.00 is for transportation and the other $US 10.00 as an allowance for
meals and other incidental expenses.


DSA and Per Diem for duty travel for partner and government staff


Participating staff from partner and government offices may receive an allowan
ce as
decided by the budget manager for that event. In all cases, the rates published by
IUCN MWBP should be used as the basic guideline.

Policy and
Procedure Guidelines for Financial Management

4. Financial Transactions Travel

Revised October 2005

2

Responsibilities and Authorizations for Travel


Basic
responsibilities and authorizations for travel are described in

the table below.


Line Managers





Authorise Travel Authorisation Forms in advance of travel.



In case of international travel, ensure that the Travel
Authorisation is approved by the …..



Ensure that staff members coordinate with the appropriate
administrat
ion unit for accommodation and logistical
arrangements based on the original Travel Authorisation Form.



For cases not covered by the policy, advise your immeidate
manager and ask for clarification and authoriziation. .



Communicate regular feedback on trave
l policy to bring a field
perspective into to the review and revision of the policy.

Administration
Unit



Manage and coordinate accommodation and logistical
arrangements including visas, tickets, etc.



Negotiate corporate rates with suitable hotels/guestho
uses.



Develop systems and keep potential travelers informed.

Finance Unit



Sign off on Travel Advance.



Validate and settle Travel Claims in a timely manner.



Draw attention of managers to cases in which management
decisions are required, including delays

in settlement of
advances or accumulated advances.

Individual staff
traveler



Complete your Travel Authoriization
form in advance of travel, make
requests for Cash Advance well in advance of your travel, complete
your Expense Claim within one week of retu
rn.


Policy and
Procedure Guidelines for Financial Management

4. Financial Transactions Travel

Revised October 2005

3

Local t
ravel

(by air or by t
rain)


Requested and prepared by:
Staff of
National Programme Office

or
Provincial Project
Office



Approved by:
National Programme Coordinator

or
Provincial Co
-
Manager


Processed by:
Finance and Admin


Frequency: As requ
ired

by approved activities in the workplan


Lead time:
One week before travel


Process:
Staff travel should be based on individual travel plans. For the

National
Programme Coordinator

and
staff in the
Provincial Pro
ject

Office
, travel p
lans are
approved b
y the IUCN
Programme

Management Unit
. F
or Programme Management
Unit

staff,
the IUCN Programme Manager approves. The IUCN Programme Manager

needs approval from
the UNDP Team Leader.


Form:
Travel Request


Policy and
Procedure Guidelines for Financial Management

4. Financial Transactions Travel

Revised October 2005

4

Road trip (except project vehicle)


Requested and p
repared by:
Staff of
National Programme Office
, PO or
Programme
Management Unit


Approved by:
National Programme Coordinator

or
Provincial Co
-
Manager


Processed by:
Finance and Admin


Frequency:
As required by approved activities in the workplan


Lead time
:
One week before travel


Process:
Staff travel should be based on individual travel plans. For the

National
Programme Coordinator

and P
rovincial Project
O
ffice
, travel p
lans are approved by
the IUCN Programme Manager
. F
or Programme Management Unit

staff,
the IUCN
Programme Manager

approves. The IUCN
Programme Manager needs approval
from the UNDP Team Leader.


Form:
Travel Request, Cash Advance, Itinerary


Policy and
Procedure Guidelines for Financial Management

4. Financial Transactions Travel

Revised October 2005

5

Project v
ehicle


Requested and prepared by:
Staff of
National Programme Office
,
Provincial
Project

Of
fice

or Programme Management Unit


Approved by:
National Programme Coordinator

or
Provincial Co
-
Manager


Processed by:
Finance and Admin


Frequency:
As required by approved activities in the workplan


Lead time:
Three days
before
scheduled trip
.


Process:
Staff travel should be based on individual
weekly
travel plans.


Form:
Vehicle Requisition

Policy and
Procedure Guidelines for Financial Management

4. Financial Transactions Travel

Revised October 2005

6

International

(Cash advance)


Requested and prepared by:
Staff of
National Programme Office

or
Provincial Project

Office


Approved by:
National Programme Coordinat
or

or
Provincial Co
-
Manager


Processed by:
Finance and Admin


Frequency:
As required by activities approved by IUCN
Programme Manager


Lead time:
One week before travel


Process:
Staff travel should be based on individual travel plans. For the National
Pro
gramme Coordinator and Provincial Project Office, travel plans are approved by
the IUCN Programme Manager. For Programme Management Unit staff, the IUCN
Programme Manager approves. The IUCN Programme Manager needs approval
from the UNDP Team Leader.


Form:

Travel Request


Policy and
Procedure Guidelines for Financial Management

4. Financial Transactions Travel

Revised October 2005

7

Settlement

of

travel
expenses



Requested and prepared by:
Staff of
National Programme Office
,
Provincial Project
Office or Programme Management Unit



Approved by:
National Programme Coordinator

or
Provincial Co
-
Manager


Processed by:
s
taff


Frequency: as per trip


Lead time:
One week after return from travel


Process:
Staff travel should be based on individual travel plans. For the National
Programme Coordinator and Provincial Project Office, travel plans are approved by
the IUCN Progr
amme Manager. For Programme Management Unit staff, the IUCN
Programme Manager approves. The IUCN Programme Manager needs approval
from the UNDP Team Leader.


Form:
Travel Expense Claim


Policy and
Procedure Guidelines for Financial Management

4. Financial Transactions Meetings and Workshops

Revised October 2005

1

Meetings and workshops: Request for approval and cash
advance


Reques
ted and prepared by:
Staff of
National Programme Office

or
Provincial Project
Office


Approved by:
National Programme Coordinator

or
Provincial Co
-
Manager


Processed by:
Assisted by
FINANCE AND ADMIN OFFICER


Frequency:

As required by approved activities i
n the workplan


Lead time:
One month before scheduled workshop


Process:
R
equest
the

cash well in advance as meetings and workshops are funded
from Laos or ARO


Form:
A memo with the meeting or workshop Agenda and budget attached.




Policy and
Procedure Guidelines for Financial Management

4. Financial Transactions Rental and Lease Agreements

Revised October 2005

1

Rental and
Lease Agre
ements

(for property)


Requested and prepared by:
National Programme Coordinator

or
Provincial Co
-
Manager

through the
Programme Management Unit

Admin


Approved by:
ARO Regional Director and/or ARO
Finance Director

and/or
UNDP
Team Leader


Processed by:
Cou
ntry Admin
and

Mekong Finance Manager


Frequency:
As required by approved activities in the workplan


Lead time:
Two months before estimated start of the contract.


Process:
A
pproval is to be made by
ARO
Regional Office or
a
delegated
representative

from
t
he country office.
Submit a memo asking for approval along with
a copy of the rental or lease agreement.


Form:
Lease contract



Policy and
Procedure Guidelines for Financial Management

4. Financial Transactions Opening Bank Accounts

Revised October 2005


1

Opening bank accounts


Requested and prepared by:
National Programme Coordinator
,
Provincial Co
-
Manager

or
Programme Manageme
nt Unit

through IUCN
Programme Manager

or
Mekong Finance Manager


Approved by:
ARO
Finance Director and
endorse
d by

IUCN Chief
Finance Office

in
Geneva


Processed by:
National Programme Office

or
Provincial Project

Office

Finance and
Admin Officer
and Meko
ng Finance
Manager


Frequency:

As required by approved activities in the workplan


Lead time:
One month before
the required opening

date

for the account


Process:
Where ba
nk accounts cannot be opened with
IUCN
as the
name

of the
account
,
a joint account wi
th co
-
signing will be considered.


Form:
Bank documents with recommendation for approval for FD



Policy and
Procedure Guidelines for Financial Management

4. Financial Transactions Personal Loans to Staff

Revised October 2005


1

Personal Loans to Staff


Personal loans may be extended to staff to overcome urgent financial constraints
where it is not possible to raise loans from usuall
y accepted financial sources such
as banks or family members. Loans will be extended on a case
-
by
-
case basis. A loan
may be considered under the following circumstances:



Death in the family



Victim of a natural disaster



In case of transfer or relocation, a
loan for advance rent payment or advance
school fees for children



House repairs (when failure to repair would endanger the life or health of the
inmates)



House purchase (for support staff only)



Essential medical treatment for a family member



Maternity cost
s for a spouse



Wedding (your own wedding or the wedding of one of your children)


The Programme Management Unit reserves the right to confirm the stated
circumstances.


Eligibility


To apply for a loan, a staff must have at least one year of service inclu
ding the
probationary period. Staff must have shown adequate performanc
e through
out that
period and there should be no record of disciplinary action against that person. Staff
on a one year contract or in the final year of a fixed term contract period

wo
uld not be
eligible for a loan

unless the amount

borrowed

can be deducted within the contract
per
iod under the following formula:

3

m
onths gross salary divided by the number

of
months of remaining contract period = amount deductible from each months salary
.


Loan Limits


For the individual staff member, one months gross salary or if a co
-
lateral source,
such as Provident Fund or Gratuity, is available for repayment an amount equivalent
to the co
-
lateral up to, but not exceeding a maximum of three months gr
oss salaries.
The total amount of funds for loans may not be in excess of 15 % of the total amount
of salaries of all staff of the respective Country Office or equivalent organizational
unit. However in units where the number of staff is low, a special cas
e should be
made by the Head of Office to the Regional Director to increase the percentage
above 15%.


Repayment


Repayment is usually made i
n twelve equal monthly
payment taken from the staff
member’s salary
at source. The deduction for repayment of the l
oan would start from
the month succeeding the month in which the loan was taken. For repayment by staff
on fixed term contracts see
the Eligibility section above. If a staff member who has
been granted a loan

resigns or is terminated before the full loan i
s recovered, the
Policy and
Procedure Guidelines for Financial Management

4. Financial Transactions Personal Loans to Staff

Revised October 2005


2

unpaid balance will be deducted during the notice period and from the final
settlement.


Currency



Loans will be granted only in local currency and must be repaid in the same
currency.


Limitations


A staff member cannot apply for anoth
er loan until
the current loan has been repaid
in full
.

Process:


Staff member







Makes an application to the Line Manager, using the loan
application form, in which the reason for requesting the loan
is clearly identified.



Provides a written citation o
f co
-
lateral and assurance that it
is without previous lien

Line Manager



Evaluates the genuineness and eligibility of the
circumstances and admissibility against the rules.



Recommends the loan or not and in either case refers to HR.



Informs staff member o
f progress of the application.

Human Resources
Manager



Reviews the Line manager’s recommendation, double
-

捨ccki湧 i渠捯nr摩湡ti潮 wit栠h桥 䱩湥 j慮慧敲 if 湥捥獳cry.



Advises as to admissibility of the loan as per the Rules. If
admissible refers the appl
ication to the Finance Unit. If
inadmissible informs the Line Manager giving the reasons.



Monitors the frequency of recommendations from various
offices and managers.

Finance Unit




Advises on the feasibility of granting the loan in consideration
of the fi
nancial health of the office and the financial aspects of
the rules.



Receives and acts as custodian

of the citation of co
-
lateral.

Head of Duty Station




Approves or rejects the loan application based on the advice
from the HRM and Finance Unit.



(In the ca
se of applications from staff of Finance and HR
Units, double checks all s
tages of the approval process.)

Finance Unit



Administers the approved loan as per rules.




Policy and
Procedure Guidelines for Financial Management

4. Financial Transactions Frequently Asked Questions

Revised October 2005


1

Frequently Asked Questions about Financial
Management


Hiring Consultants


Q.

Does the

selection of a consultant always need to go through a Purchase
Committee?


If yes, which Purchase Committee? Example situation: Recruiting and hiring a
consultant for a technical study.


A.

The
guidelines

say you should submit the names of at least 3 can
didates. This is
prevent people from “playing favourites” and always hiring the same consultant. The
procedure assumes that the work can be performed by suitably qualified consultants
available in the local market, which is not always the case. In many cas
es, a
manager knows who the best consultant would be for the job or there are no other
suitably qualified candidates available at the time. In cases like this, you can
ask

for a
“waiver”, which can be in the form of a memo saying “yes, go ahead and sole
so
urce”.


Even if there is only one candidate, it is a good idea to have a Purchase Committee
evaluate the best course of action. If the Purchase Committee says, “yes, you can
sole source”, it protects a manager from any criticism that he may have been “pl
aying
favourites”.


The National Programme Office

or the P
rovincial
P
rogramme
O
ffice

can take the
Purchase Committee in Laos. This is recommended for Cambodia, Laos and
Thailand. Vietnam is encouraged to put requests through VN Purchase Committee
given the

previous sensitivities and the presence of a program Liaison Officer that
can facilitate the process (Dang).



Consulting Rates


Q.

When to apply weekly rate? When to apply monthly rate? When to apply lump
sum? When lump sum is applied, is some basis of c
alculation needed?


A.

The scheme for a consultant’s rate will depend on your reasonable assessment of
how the best way to do the job.


Daily rates:

A daily rate is appropriate if the job is short
-
term and you can accurately
estimate how many days the job

will take. If the consultant prefers or insists on a
daily rate for a long
-
term job, you can write into the contract that payment cannot not
be over a certain amount for any one month.


Lump sum:

For long
-
term jobs where it is difficult to accurately esti
mate the number
of days, a lump sum is often the best way to pay. If your budget does not have
Policy and
Procedure Guidelines for Financial Management

4. Financial Transactions Frequently Asked Questions

Revised October 2005


2

enough money to cover a daily rate contract, the consultant will have to negotiate a
lump sum. If the consultant will not accept a lump sum, you will need to fin
d a new
consultant. One way of getting around this problem is to divide the lump sum by the
consultant’s daily rate and agreeing on that number of days.


Signing Contracts for Consultants


Q.

Who signs contract of international consultants? Who signs cont
ract of national
consultants? What

the level of authority for contract signing?


A.
The IUCN Programme Manager signs all contracts for international consultants
and for local consultants if the total amount of the contract is over $US 5,000.00. The
Nationa
l Programme Coordinator and the Provincial Co
-
Manager can sign contracts
for up to $ 5,000. If the consultant’s out
-
of
-
pocket expenses are included in the
contract and total amount (consulting fees plus expenses) come to more than $US
5000.00, the contract

has to be signed by the IUCN Programme Manager.


Deducting Income Tax from Consultant’s Payment


Q.
When do I deduct personal
income

tax from a consultant’s payment and how
much?


A.

There is retention of 10% as withholding tax at source to be paid by IU
CN to the
host government. This is true for Vietnam and needs to be determined also for
Thailand, Cambodia, and Laos depending on the terms of the MOU of IUCN with the
host government. This issue needs more study and more detailed guidelines will be
issued
. In the meantime…


Purchasing Committee


Q.

What is a Purchase Committee, how do I form or convene a Purchase
Committee, and who sits on the Committee?


A.

A Purchase Committee is made up of three people who are supposed to give an
independent and object
ive opinion on a request for a hire or purchase. The Laos
Committee should have at least three members, one from the country, another from
Finance as a “standing” or permanent member and a one person from the
Programme Management Unit. The Vietnam Purchase

Committee should comprise
the Vietnam National Programme Coordinator, a Finance Officer
and an

MWBP
representative (Dang or an MWBP staff).


Q.

How soon should the Purchase Committee get back to me?


A.

If you have submitted all the documents, the Committ
ee should reply within 3 to 5
working days.


Q.

If purchase committee does not respond promptly causing significant delay of the
work (
e.g. missing the season), who will bear responsibility?

Policy and
Procedure Guidelines for Financial Management

4. Financial Transactions Frequently Asked Questions

Revised October 2005


3


A.

It depends on the cause of the delay. If you have not submitt
ed the required
paperwork or do not promptly submit any additional information the Committee asks
for, then you are responsible. However, as a manager, it is your job to ensure that
purchase requests are made far enough in advance to allow time for reasona
ble
delays (e.g. the Finance Officer is on a trip, the PMU representative can’t meet until
next Wednesday, etc.). If you feel that the Purchase Committee is unreasonably
delayed, you can bring the matter to the attention of the IUCN Programme Manager
or th
e Mekong Finance Manager
for follow
-
up or resolution.


Q.

What if I don’t agree with the decision of the Purchase Committee?


A.

First, ask the Chairperson of the Purchase Committee (usually the Finance
Officer) why the Committee made this decision. Maybe

they had a good reason. If
you are still not satisfied, the Chairperson should consult with the other members of
the Committee and if you have presented a good case, they can change their
decision. You can shorten up this process or avoid this from happen
ing by
anticipating reasons why the Committee might not agree with your recommendation
and providing the information they need before they meet.


Procuring Services


Q.

Do I have to get 3 quotations for every case? In which cases are 3 quotations not
nec
essary?


A.

The 3 quotation system is based on the principles of sound financial
management. The goal of the system is to the get the best service or equipment at
the best price, which is not always the lowest price. As long as there is a good
reason for
NOT getting 3 quotations you can submit only one quotation or a ‘sole
source’. For example, there may only be one supplier in your area or you may want
to develop one supplier for a particular type of service such as printing.


Q.

Who is responsible for g
etting 3 quotations?


A.

This is an IUCN Admin function but could be delegated by them to the country
Finance and Admin Officer. While this can be done by the FAO, the review of the
host Country Admin is still required. For example in VN, Son (IUCN VN Adm
in
Officer) requests the FAO in PPO to obtain the quotations from Ho Chi Minh. These
quotations are reviewed by him for either submitting to the VN Purchase Committee
or for submission to Lao Admin if the Lao Purchase Committee is tasked to do the
evaluati
on.


Q.

Where does Finance get quotations?


A.

The Finance and Admin Office should get quotations from the most practical
source. Depending on the type of goods or service, the most practical source might
be the same town or city or it might be Hanoi or Ba
ngkok. Things like the price, after
-
sales service, maintenance and other factors have to be considered.


Policy and
Procedure Guidelines for Financial Management

4. Financial Transactions Frequently Asked Questions

Revised October 2005


4

Q.

Does the Purchase Committee make their decision on the basis of price only?


A.

The lowest price is not always the best price. The Purchase Commit
tee may
select a supplier with a higher price if there is more benefit to gain such as after
-
sales
service or length of warranty.




Q
. What are the standards for receiving quotations?
Via post? Fax? Email? Phone?
Is company seal required?


A.
We should be

dealing with legitimate suppliers, institutions and individuals who
can deliver the goods and services. A formal quotation should be on in the
company’s letterhead.
If you know the company then usually that is all that is
needed.
If you don’t know the com
pany and this is the first time you are dealing with
them, you can ask them to send a copy of the company registration certificate and
use their company seal on the quotation. For large purchases, suppliers are
evaluated before they are accredited to becom
e suppliers of goods and services.
Quotations can be sent via fax or scanned copies but the original should follow in the
mail or be hand delivered.


Preparing Budgets


Q.

Who does the budgeting?


A.

Budgeting is a part of the workplan preparation proces
s, which is described in
section // of the Guidelines. Overall budgeting is the responsibility of the IUCN
Programme Management Unit with advice from the UNDP Team Leader. In project
offices, the National Programme Coordinators and the Provincial Co
-
Manage
rs
should facilitate the budgeting process.


Getting Budget Information


Q.

How do I get information or feedback on the difference between the amount of
money in my budget and the actual amount of money that has been spent?


A.

This is important informati
on that managers need for planning and meeting their
targets. The Mekong Finance Manager is working on a system that will make this
information available on a weekly basis. All you have to do is submit your financial
reports on time.


Making Payments


Q.

When should I make payments in cash? When should I make payments by bank
from the Provincial Project Office? When should payments be made by bank transfer
from IUCN Country Office?


Policy and
Procedure Guidelines for Financial Management

4. Financial Transactions Frequently Asked Questions

Revised October 2005


5

A.

Bank transfers and check payments are preferred over cash payments bec
ause
with payments through a bank there is a better record or “paper trail” for the auditor.
When large amounts of money are involved, payments should be processed from
IUCN Country Offices (in Vietnam, IUCN Vietnam Country Office; in Cambodia, the
Cambodi
a Liaison Office; in Thailand, ARO or Laos Finance
; and

in Laos, the IUCN
Lao Country Office. Cash handled by National Programme Offices and Provincial
Project Offices should be limited to payroll and office operations. Even then, bank
transfer and check p
ayments are preferred. IUCN country offices will make payments
to consultants on contract.


Q.

What is the lead time for requests for payments?


A.

Assuming the documents are in order, it should take no more than 3 to 5 working
days to process a request fo
r payment.


Q.

When do I need to get a receipt for a
payment?


A.

All payments of any kind require a receipt as proof of payment. If the person or
institution receiving the payment does not have an official receipt, you can make up a
letter or form titled
“Receipt of Payment” and have them sign.


Spending Over Budget


Q.

How should the budget should be treated? Is it a guide or is it fixed and cannot be
changed? Are there cases when I can go over my budget?


A.
Budgets are a planning tool and are not fixed.

They are estimates you make
before actual implementation. At the time of implementation, there may be expenses
that you did not identify or expect or prices have changed but you have to spend the
money to complete a task. If you think it is necessary and
you can justify the change,
check with the Mekong Finance Manager about how to re
-
allocate funds or spend
more than the amount budget for that item. This kind of decision is on a case
-
by
-
case
basis.


Travel


Q.

How do I arrange contracts or letters confir
ming secondment of partner or
government staff?


A.
The responsible government agency or department needs to confirm a
secondment by issuing a formal appointment letter referring to Terms of Reference
for the secondment position. National Programme Coordin
ators and Provincial Co
-
Managers working with their counterparts need to have this contract or letter. In
many cases, it helps to draft the contract or appointment letter for their review and
approval. It also helps to check with other offices to see what
they did.


Q.
Are seconded paid from the Country Office or the project office?


Policy and
Procedure Guidelines for Financial Management

4. Financial Transactions Frequently Asked Questions

Revised October 2005


6

A.

Payments to seconded staff are in accordance with agreement with the seconding
agency. If the instruction is to send payment to the seconding agency, then IUCN will
pay thro
ugh a bank transfer or check. If payment is made directly to the person, it
can be done through a bank or check to the seconded staff or payment can be made
through the project office.


Q.

Do I deduct Personal Income Tax from payments to seconded staff? If

so, what
percent?


A.

Do not withhold Personal Income Tax from payments to seconded staff who are
nationals of other countries for these types of allowances.


Policy and
Procedure Guidelines for Financial Management

4. Financial Transactions Annex

Revised October 2005


1

Annex

Policy and
Procedure Guidelines for Financial Management

4. Financial Transactions Annex

Revised October 2005


2


DSA and Per Diem Rates



PER DIEM RATES FOR LOWER MEKONG COUNTRIES
-

Issued
20 JULY 200
5


Daily Rate

$US

Overnight Rate

$US

CAMBODIA


20.00



Phnom Penh





i) Hotel rate up to 40.00 and above (per night)




77.00

i) Hotel rate between 30
-
39.00 (per night)




57.00

iii) Hotel rate up to 29.00 and (below per night)




47.00

Provincial

Capitals and Village

(traveling from Phnom Penh)


15.00


27.00

Villages

(traveling from Phnom Penh and provincial capitals)


6.00


10.00

LAO PDR


20.00



Vientiane





i) Hotel rate of 40.00 and above (per night)




72.00

i) Hotel rate between 30
-
3
9.00 (per night)




52.00

iii) Hotel rate of 29.00 and below (per night)




42.00

Provincial Capitals





i) Luang Prabang


15.00


55.00

ii) Savannakhet, Khammouane and Pakse


15.00


42.00

iii) Other Provincial Capitals and Villages


10.00


21.00

THAILAND





Bangkok


20.00


50.00

Provincial Capitals

THB 600 or

USD 15.00

THB 1300 or

USD 33.00

Districts

(traveling from Bangkok and provincial capitals)

THB 600 or


USD 15.00

THB 800 or


USD 21.00

Villages

(traveling from Bangkok and provin
cial capitals)

THB 600 or

USD 15.00

THB 500 or


USD 13.00


Policy and
Procedure Guidelines for Financial Management

4. Financial Transactions Annex

Revised October 2005


3


PER DIEM RATES FOR LOWER MEKONG COUNTRIES
-

20 JULY 2005


Daily Rate

$US

Overnight Rate

$US

VIETNAM





Hanoi


20.00



i) Hotel rate of 60.00 and above (per night)




91.00

ii) Hotel r
ate between 50
-
59.00 (per night)




81.00

iii) Hotel rate between 40
-
49.00 (per night)




71.00

iv) Hotel rate between 30
-
39.00 (per night)




61.00

v) Hotel rate of 29.00 and below (per night)




51.00

Ho Chi Minh City


20.00



i) Hotel rate of

60.00 and above (per night)




100.00

ii) Hotel rate between 50
-
59.00 (per night)




90.00

iii) Hotel rate between 40
-
49.00 (per night)




80.00

iv) Hotel rate between 30
-
39.00 (per night)




70.00

v) Hotel rate of 29.00 and below (per night)




60.00

c) Provincial Capitals





i) Danang


15.00


60.00

ii) Other Provincial Capitals


10.00


27.00

d) Villages (traveling from Hanoi/Ho Chi Minh City and
provincial capitals)


10.00


27.00


Policy and
Procedure Guidelines for Financial Management

4. Financial Transactions Annex

Revised October 2005


4


Insert forms here