BASIC FINANCIAL MANAGEMENT II

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10 Νοε 2013 (πριν από 3 χρόνια και 10 μήνες)

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JICA LGREP


As of 26 January 2009

Financial Management Training II

1

Topic objectives


At the end of the topic the participants are
expected to
:


Understand financial management.


Learn the uses of Financial Management


Learn Financial Management as a tool for cost
efficiency and control.


To come up with operational manual for
Financial Management

As of 26 January 2009

2

Financial Management Training II

Question 1

What is Financial Management?

As of 26 January 2009

3

Financial Management Training II

Point 1


Key words in Financial
Management


Plan


Organize


Lead


Evaluate


Monitor


Control


Reporting


People

Finances/Funds

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4

Financial Management Training II

Financial Management


Financial management
is the
application of
planning and control
functions
to the area of finance. Financial
managing is providing and controlling the
flow of funds in an organization.

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Financial Management Training II

Question 2


Who manages finances or financial matters of the
BAWASA?


What are the resources of the BAWASA?


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Financial Management Training II

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Point 2


Finance managers are:


Officers of BAWASA


BOD provides the policy


Subject to approval by the General Assembly


BAWASA resources include:


Money (collections, donations, credit, etc.)


Personnel


Properties (water system, land, equipment, etc.)


BAWASA BOD and Officers needed periodic report on
the status of BAWASA resources.

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Financial Management Training II

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Question 3


What are financial reports for?


Who uses the financial reports?

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Financial Management Training II

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Point 3


Financial reports are to better
communicate
its
financial plans
,
activities
and
condition
to interested
parties.


Users of financial reports:


administrators
;


Board of Directors/Trustees
;


members of the Organization

or
general assembly
;


Donors
(ex. JICA);


lending institutions
, like banks; and


government regulatory bodies
representing the State and
the general public (e.g. LGUs, SEC and BIR).

As of 26 January 2009

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Financial Management Training II

Objectives of Financial
Management

Better manage financial resources.
This includes:


investment
;


safekeeping
of cash, property and
equipment; and


instituting an accounting and internal
control
mechanism of policies and
procedures

As of 26 January 2009

10

Financial Management Training II

Exercise 1

Show the process of control
of financial management
from your own experience
in the following situations:

1.
Planning and
budgeting

2.
Releases of funds

3.
Cash advances and
liquidations

4.
Procurement of
materials and supplies

5.
Salaries and wages

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Financial Management Training II

11

Exercise 1 Synthesis


CONTROLLING
THE
ASSOCIATION’S OPERATIONS is
possible thru:


program of activities

of
the BAWASA where
utilization of resources

are documented
properly:


Financial Plan (Budget
allocations)


actual spending



financial position


Approval of plan and
budget, releases of funds are
governed by levels of
authorities. This forms part
of the financial PSP.

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Financial Management Training II

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Plan & Budget


Activities


Schedule


Budget and
resources

Accomplish
-
ment


Actual extent of
accomplishments


Actual expenditures

Periodic
Evaluation


Plan versus Actual
Accomplishments


Budget Allocation
versus Actual
Expenditures

Question 4


What is the staffing requirement to
facilitate Financial Management?

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Financial Management Training II

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Point 4: STAFFING
FOR
FINANCIAL MANAGEMENT


BOD and Officers
cannot by themselves
manage BAWASA
resources


Administrative Support
Staff would include:


Treasurer or Finance
Officer



Accountant/
Bookkeeper



Cashier/Disbursing
Officer


Project
Manager

Cluster 1

Cluster 2

Cluster 3

Administrative
Staff

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Financial Management Training II

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List of
activities
and tasks

Positions

Job
Descriptions


Qualifications


Salary

Treasurer


Qualifications


Salary

Bookkeeper


Qualifications


Salary

Cashier

ASPECTS OF FINANCIAL
MANAGEMENT

1.
Budgeting

2.
Internal control

3.
Keeping/maintaining financial
records

4.
Preparing

financial reports
.

As of 26 January 2009

15

Financial Management Training II

Question 5


What is Budgeting?


What is it for?

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Financial Management Training II

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Point 5.1:
BUDGETING


A
budget

is a
“plan of action”
of
an organization for a subsequent
period,
expressed in monetary
terms
.

As of 26 January 2009

Financial Management Training II

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Point 5.2: FUNCTIONS OF A
BUDGET

1.
to
record
, in
monetary terms
, what the
realistic goals
or objectives or activities
for a certain period.

2.
tool to monitor
the
financial activities
.

3.
can
provide a comparative basis
which will alert the
BOD and administrators.

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Financial Management Training II

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Proposed Plan


Activity


Budget

Approved Plan


Activity


Budget

Accomplishment


Activity


Expenditure

Summary of the Budget Process

Review last year's
budget


differences
between actual
and projected
amounts


list of changes
needed in
operations

Return Projection


ROI

of previous
year


Projected
ROI

for
succeeding year


Calculate revenues


Evaluate how
realistic the
assumptions are


Make necessary
adjustments

Monitor budget
income and expense


Monthly
monitoring


compare actual to
budgeted figures


address any major
aberrations
immediately

As of 26 January 2009

Financial Management Training II

19

Workshop 1


Steps in Budget Preparation for
BAWASA


Decisions areas in financial planning
for investment for BAWASA

As of 26 January 2009

Financial Management Training II

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Workshop 1 Synthesis

How could budgeting be effective?

What are the basic steps in order to
prepare a well
-
conceived budget?

What are decision areas in financial
planning for investment?

As of 26 January 2009

Financial Management Training II

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RESPONSIBILITY FOR BUDGET
PREPARATION


The
treasurer
may be the person best
qualified to handle the figures,
but may or
may not
be the person to
make policy
decisions



A
budget committee
which consists of
persons responsible for policy decisions
should be formed.

As of 26 January 2009

22

Financial Management Training II

INTERNAL CONTROL


Internal control comprises the
plan of organization
and all the
coordinate methods
and
measures adopted

within an
office.

As of 26 January 2009

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Financial Management Training II

OBJECTIVES OF INTERNAL
CONTROL


to
safeguard

the assets



to check the
accuracy
and
reliability
of
accounting data


to promote
operational efficiency
and
encourage
adherence
to prescribed
managerial policies
.

As of 26 January 2009

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Financial Management Training II

Internal Control requires the following:
(this will form part of the Financial
Management System PSP)

1.
Plan of organization

2.
System of authorization
and
record
procedures

3.
Sound practices in performing duties
and functions

4.
Designation of
capable of performing
personnel

5.
Provision for a
periodic review

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KEEPING OF FINANCIAL RECORDS
(remember the Quick FORRMAS)


Accounting forms



Books of accounts

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Financial Management Training II

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FINANCIAL REPORTING SYSTEM

1.
a
periodic financial report
needed for effective
planning and control of operations;

2.
a means of
evaluating and comparing
the
actual monetary receipts
and payments
against
projected performance
; and,

3.
a tool for the
appraisal of progress
and
status
of finished and ongoing projects
.

As of 26 January 2009

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Financial Management Training II

Exercise 2

Training Design on Financial
Management System Installation

As of 26 January 2009

Financial Management Training II

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Exercise 2 Synthesis


It is important that prior to installation of Financial
Management System, Chart of Accounts have been defined
and installed.


Financial Management System consist of the following
steps:


Formation of Budget Committee composed of policy
-
makers
of the Association;


System of authorization and record procedures
establishment;


Staffing for Financial Management including formulation of
duties and responsibilities (officers should be carefully
selected):


Treasurer/Cashier


Bookkeeper

As of 26 January 2009

Financial Management Training II

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Exercise 2 Synthesis


Periodic review and auditing installation:


Monthly Internal Auditing


Quarterly to Annual Auditing


Clearance for any cash or non
-
cash (furniture and
equipment, report, office keys, etc.) for resigning and to
be terminated personnel


Periodic financial report on the condition of financial
resources


Means of evaluating and comparing the actual monetary
receipts and payments against projected performance


Tool for the appraisal of progress and status of finished
and ongoing projects

As of 26 January 2009

Financial Management Training II

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References

Dionesio

T.
Alave
, J. (2005, January 5). Financial Management System
Installation.
Training Material
. Kidapawan City, North Cotabato,
Philippines: PRRM.

Small Business Notes. (2008).
Budgeting Systems
. (J.
Kautz
, Editor, & Small
Business Notes) Retrieved December 11, 2008, from Small Business
Notes:
http://www.smallbusinessnotes.com/operating/finmgmt/financialstmts
/budget.html

Small Business Notes. (2008).
Financial Management Planning
. (J.
Kautz
,
Editor, & Small Business Notes) Retrieved December 11, 2008, from
Small Business Notes:
http://www.smallbusinessnotes.com/planning/financialmgmtplan.html

As of 26 January 2009

Financial Management Training II

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