Financial management is a process which brings together planning, budgeting, accounting, financial reporting, internal control, auditing, procurement, disbursement and the physical performance with the aim of managing the resources properly and achieving the organization’s objectives. Thus a reliable budget & financial accounting system is a critical ingredient of the organization’s success. Timely and relevant financial information provides a basis for better decisions and efficient service delivery. The objective of the proposed solution includes :
The control of expenditure is usually the most important aspect for any viable undertaking as institutions are always under pressure to achieve their targets within limited resources. Budgetary control allows for monitoring of proper use of available funds at a reasonable frequency. It enables periodic statements of accounts to be prepared comparing budgets and actual results. Budgets are a core feature of control systems. The Organization will prepare budget that translates work plans into projections of expenditure. These will be prepared on an annual basis and updated regularly during the year.
Budget Preparation : The authorized staff shall contribute in budget preparation activity. Annual budgets will be drawn taking in account work remaining from previous year and new projects/work.
The Budget Format : The budget format will be based on budget heads which can also be segregated into subsidiary heads and shall be aligned with the accounting chart.
Integration of the Budget into the Accounting System : The approved budget will be integrated into the accounting system through the Chart of Accounts.
The accounting system allows gathering, processing and organizing of accounting data in order to generate useful financial information. The accounting system reflects the Organizational needs and is designed to provide the financial information required by all stakeholders. The accounting system is designed to :
The chart of accounts gives the comprehensive accounts coding including main accounts and sub-accounts. The chart of accounts assists in posting entries through vouchers. The purpose of a chart of accounts is to facilitate objective and consistent classification of expenditure and income into specific account heads with codes that allow easy identification and computerization of the accounting system. There are four major segments of Account Codes namely :