CONSTITUTION OF PEOPLES ORGANIZATION TRANSPARENCY AGENCY
1. SHORT TITLE
3. NAME OF THE ORGANIZATIONS
4. REGISTERED OFFICE
CLASSES OF MEMBERS
Terms of membership
Cessation of membership
Re – Admission
Right and obligation
MANAGEMENT OF THE ORGANIZATION
Quorum of management committee
Notes of meeting
OFFICE OF THE ORGANIZATION
Powers and duties of each officer.
Election, Names, Legal status, Cessation
MEETING OF THE ORGANIZATION
Annual General Meeting
Extra – ordinary General meeting
Quorum of the General meeting
Quorum of the council
ALTERATION OF THE CONSTITUTION
EMPLOYEE OF THE ORGANIZATION
SOURCE OF FINANCE
REGISTER OF MEMBERS
DISSOLUTION OF THE ORGANIZATION
WHERE: The founder members of the Peoples Organization Transparency Agency (P.O.TA.) have detected an alarming problem of corruption and other chaotic practices among public and other officials responsible for public services in the United republic of Tanzania.
WHERE AS: The cummulative effect of the above mentioned practice is to cause injustice to the Innocent Citizens of the United Republic of Tanzania hence cause lack of confidence over their own good Government.
WHERE AS: The founder members believe that the above mentioned calamitous practice calls for not only Government combat but also public participatory method of combat from village to the national level and through local and central government.
WHERE AS: The members are of opinion that public participatory method of combat can be coordinated through inter alia non government organization of committed citizens of the country, hence the establishment of this organisation.
WHERE AS: This organisation is not intended to operate commercially but to render gratis service for the betterment of the good governance, well fare and justice for the peoples of and in the United republic of Tanzania without any political, religious, tribal or any however classic segregation.
WHERE AS: The founder members are aware of citizens who are defiant of their corruption behavior and are now apologetic seeking for an opportunity to swear affidavit of apology, to the long term dehumanized community and the United republic of Tanzania as whole. As the concerned are dejected and dejavu are seeking for an esplanade where they shall be seen as free productive citizens rather than living with fear of their past offences ergo retarding their productive opportunity and ability.
We decipher that sometimes its rather difficult to obtain adequate evidences for conviction of persons involved in corruption in such an event the accused are set free and corruption practice persist.
In decisive about the above impugn we have decided to establish a non-Governmental Organisation to handle the situation as a Community based firm where they shall admit their offences if they see it is important and Hence live with no relative fear and therefore provide a self professional co-operation contributing to collective productive activities to peoples poverty alleviation and General economy at large.
We several persons whose names, Postal addresses and occupations are subscribed are desirous of Being formed into founding an organisation in the pursuance of the constitution of Peoples organization Transparency Agency
1.COL. D.M. NG’WANANOGU
2.MR. EDRYSE MASSALU
P.O. BOX 2051
3.DR. KATENDE KASHAIJA
MEDICAL BUSINESS MAN
4. MR. JOSEPH A. MAGEMBE
P.O. BOX 491
LOCAL GOVT. EMPLOYEE
MR. FROLENT A. RWAKYOMA
P.O. BOX 685
INSURANCE BUSNESS MAN
6. RASHID HASSAN MBOGO
MTEMI WA SUNGUSUNGU (BUKOBA)
7. AMOS A. NGOLLE
P.O. BOX 2051
8. G.D GUMBO,
9. MR. ISSACK NZALLA
DAR- ES- SALAAM
10 . MECHAIRT TIBA
P.O.BOX 491, BUKOBA
LOCAL GOVERNMENT EMPLOYEE
P.O. BOX KAMNYONGE
MUSOMA BUSINESS MAN
CAPT. JOSEPH NDITI
P.O BOX 182
P.O BOX 6441
P.O BIX 432
SHORT TITLE: - This constitution may be referred to as the constitution of THE PEOPLES ORGANIZATION TRANSPARENCY AGENCY
INTERPRETATIONS: In these Articles unless there be in the context anything inconsistent herewith
“The Organization” ….…... Shall mean the Peoples Organization Transparency Agency
“Ordinance” ……… Shall mean and every statutory modification of re-
enactment there of for the time being in force.
“Council” ……… Shall mean the executive council of the organisation
“The seal” ……… Shall mean the common seal of the organisation.
“The month ……… Shall mean the calendar year.
“The year ……… Shall mean the calendar year.
“Politics ……… Shall mean political affairs.
“Civil Servant” …….. Shall mean person employed by Civil service
“Private Co” ……… Shall mean company registered by cap 212 of companies
“Individual” ……… Shall mean single person.
“Govt. Companies” ……… Shall mean companies owned by Government
“NGO” ………. Shall mean Non Government Organization.
“Combat” ……… Shall mean fighting.
“Sungusungu ……… Shall mean Local prior organized security setup in many of
Tanzanians society in wards and districts.
“Agent” ……… Shall mean a secret 1 Individual association allegiance to
“Officers” ……… Shall mean the president, three vice president, the Honorary
Secretary and the Treasurer elected Pursuant to article 8.02, and 8.04.
“Branch” ……… Shall mean branch of the organisation established at each
Regional and district capital of Tanzania.
“Promoters” ……… Shall mean all those persons falling within the definition of
ordinary members whose names appear in the lists of attendance of the two inaugural meetings of the organisation.
“Ordinary Members” ………. Shall mean Individuals, partnerships, bodies corporate,
Cooperative Societies, Professionals, Service Institutions and foreign bodies which have established any Legal activities in the United republic of Tanzania.
“Associations” ………. Shall mean registered institutions other than the
organisation constituting, respectively, Merchant, traders, Manufactures, producers, Marketers, Professionals services and construction bodies.
“Corrupt” ………. Shall mean dishonest especially through accepting bribes.
“Founder Member” ………. Shall be those who have signed the founding instrument of
the organization and has fully paid their contributions.
Words and expressions defined in the ordinance shall of not Inconsistent with the subject or context bear the same meaning in these articles words importing the singular number shall include the plural number and vice versa.
Words Importing the masculine gender shall include the feminine. The world “Member” in respect of firms and bodies Corporate shall include the property accredited representative of that member.
NAME OF THE ORGANISATION
3. (i) Name of the organisation shall be The Peoples Organization Transparency Agency (P.O.TA).
(ii) The organization shall be a Non commercial, Non governmental, Non Political and shall
achieve the objectives free from political religious tribal or any classic segregation whatever and shall be strictly a community based organization.
The head office of the organization will be situated somewhere within the capital of Tanzania and the branches in the Regional Capitals and District of Tanzania mainland.
The objects for which the organization is established are:-
I ANT- CORRUPTION
(a)To unite all residents of Tanzania in corruption combat.
(b) To highlight and provide adequate information to relevant government organs to where corruption is being practiced.
(c ) To develop strong net work of our relative members across the country.
(d) To incorporate and unite efforts undertaken by the already establishment Sungusungu towards corruption combating.
(e) To act as the instrument of the members in dialogue with the government and parastatal on broad issues of ant- corruption.
(f) To institute establish and promote training course grants awards and prizes and otherwise to encourage education in the principal and practice of corruption combat.
( g) To establish relationship with foreign bodies having objects similar to those of the organization.
(h) To identify firms or individuals engaged in corruption or fraudulent practice in competing for or executing donors or World Bank financed project.
(j) To establish ant- corruption exchanges, news rooms libraries and other like facilities.
(k) To establish and publish News Letter Journals, Video tapes and organize on matters related to existing corruption and other chaotic practice.
To educate societies on consequence of corruption in economy daily social and on how to acquire their constitutional rights free from corruption transaction.
(m) To collect and disseminate statistical and other information subject to corruption combating through organization informers.
(n) To provide free legal aid to indigents.
II FIGHTING FOR HUMAN RIGHTS
(o) To promote, support disagreement of legislation and to work towards elimination of bureaucratic measures in matters effecting the interest of human right.
(p) To formulate and uphold the highest standard of people know how on their fundamental constitutional rights.
(q) To undertake training, research and provide consultancy on peoples rights and welfare hence publish the same to the public.
(r) To carry on other activities which can be advantageously carried on by the organization and which are done bonafide and which are reasonably incidental to either ant corruption or fighting for human rights and are within the scope of carrying on these objects for the benefit of Citizen under the law of United republic of Tanzania.
6.01 Eligibility: - A member shall be a Tanzanian of age of majority above 18 years old with sound mind and not having criminal records.
6.02 Classes of members - There shall four categories of membership within the organisation namely ordinary member, associate member and Honorary members and founder members.
6.03 Admission – Ordinary member and associate members shall upon payment of membership fees become automatic members of the organisation. The honorary member shall become member upon being elected as such by an annual General meeting or Extra ordinary General meeting provided that in certain circumstances the executive council may waive membership fees payable by any associate member of honorary member.
6.04 Terms of membership:-
Every member as defined under Article 6.02 desirous of becoming a member of the organisation shall sign and deliver to either the organisation or the respective branch an application for membership as the case shall be in the form to be provided by the organisation. This requirement may be waived in the case of honorary member, associations may apply for membership.
Membership is confined to Tanzanian citizens.
Membership fee shall be in two categories.
Which shall be shared between branches and the headquarters of the organisation in propitious to determined from time to time by the council.
The membership fee shall be determined from time to time by the council.
Annual subscriptions for the enduring year shall be payable by any member in respect of whom notice of resignation is received by the organisation between 1st and 31st December both dates inclusive.
CEASATION OF MEMBERSHIP
6.05. Cessation of Membership – A member of the organization shall cease to be a member if such member.
Resigns by giving one month’s notice in writing to the organisation branch.
Becomes unsound mind.
Fails to pay his fees in terms of article 6.04 (iii), ab and 6.04. (iv)
Is excluded pursuant to article 6.05 (vii) and 6.05 (viii).
Is adjudicated bankrupt goes into liquidation or compound with his creditors.
Provided always that any member who ceases to be a member shall remain liable in terms of constitutional for all liabilities, contributions and annual fees falling due within the year in which he ceases to be a member.
The council or Branch executive committee may terminate the membership of any member who by his conduct renders himself unfit in the opinion of a majority of the council or Branch Excessive committee members to remain a member of the organization.
No member may exercise any of the rights of the rights and privileges of membership if his subscription fees remain unpaid for more than four months after due date. The council or branch executive committee may terminate the membership.
The council or Branch executive committee shall have the power by majority vote to suspend any member from membership for reasonable cause and for any period not exceeding three moths.
During this period of suspension the member forfeits all rights and privileges except that of appeal pursuant to article 6.05 (xi).
RIGHTS OF APPEAL
A Member whose membership has been terminated or suspended by the Branch executive committee shall have the right to appeal respectively to the Excessive Council of the organization and if need be thereafter to the Annual General meeting or Extraordinary General meeting.
A member whose membership has been terminated or suspended by the council shall have the right to appeal respectively to an Extraordinary General Meeting of the organization.
A member wishing to appeal shall lodge his application to the council in writing through the executive Director of the organisation within thirty days of the date of the written notice suspending or terminating the membership. The appeal shall be included in the agenda of the Council or Extraordinary General Meeting called at the earliest opportunity there after or in the agenda of the ensuring Annual General Meeting.
A member whose membership has been terminated may re-apply for membership after twelve months from the date of the letter informing him of such termination of membership. He should regret of his termination and declare that never again will he repeat the offence.
MANAGEMENT OF THE ORGNISATION
7.0 The organisation shall have the following principal organs.
7.01 There shall be management committee which shall comprise of:-
President of the organization
Vise president of the organization
Deputy vice president (politics) & promotion of sungusungu.
Deputy vice president (civil servant and Government Institution)
Deputy vice president (Private companies, NGO, individual business man).
Executive director of the organisation sitting in an ex-official capacity and acting as assistance secretary to the committee.
Marshal of agents as Data Banker – with no voting power.
7.02 The council acting on advice given to it by the Management Committee and as directed by the Annual General Meeting in terms of article shall within thirty days appoint standing committee Chairman to deal with objective issue in
Politics and Sungusungu promotions.
Civil Servant and Government institution.
Private Companies NGO, Individual business man.
Provided that the council shall give broad terms of reference such Committees either informally or formally in writing, including directions regarding any reporting procedures which the Council may require.
7.03 Each standing Committee shall comprise not less than three members who shall be appointed by the council. The council shall appoint the chairman of each standing committee. The standing committee shall hold office for the life span of the council.
7.04 Each standing committee shall advice the council on matters coming within its terms of reference as defined by the council.
7.05 The council may appoint sub-committees as are considered by them necessary. Such committees shall be given specific terms of reference and shall submit their reports as directed there in.
7.06 The council may form sections of the organisation for the benefit of any other interest or group of interests on a requisition from the management committee by the organisation. Each section shall elect its own chairman and a vice chairman and a section committee comprising not more than ten members of a section and shall meet at least four times per annum. Section committees shall report to the council through the management committee of the organisation and shall have such executive power as may specifically be granted to each committee by the council.
7.07 The officers of the organization shall be ex-official members of all sections.
QUORUM OF MANAGEMENT COMMITTEE
7.08 The quorum of the Management committee shall be one third of its members present and entitled to vote.
7.09 When in view of the president an urgent decision is required he shall make such decision but shall at the first opportunity reports to and seek the approval of the Management Committee and if appropriate of the council.
7.10 The Management Committee shall be responsible to the council for all administrative matters related to finance and for the general day to day running of the organisation and shall meet at least once a month or more often as need be.
7.11 A casual vacancy accruing in the membership of the council any committee or sub-committee may be filled by the council.
7.12 Subject to the approval of the council a committee may co-opt such additional members as are considered necessary for the better functioning of that committee. When so appointed such members shall have the same rights as elected members of that committee.
7.13 Each member shall have one vote.
7.14 No member shall be entitled to vote unless he shall have paid in full all membership fee’s due to the organization.
7.15 Voting at meeting of the organisation shall be any show of hands provided that at the General Meetings voting shall be by secret ballot.
7.16 In the event of any equality of votes the chairman of a meeting shall have a casting vote as well as a deliberative vote. This procedure shall not apply in the case of elections at General Meeting.
7.17 An employee of the organisation shall neither be appointed an accredited representative of an organisation nor have a vote.
NOTICE OF MEETING
7.18 Notice for General Meetings of the organisation shall be thirty days. However non receipt of a notice of a meeting by any person entitled to receive notice there of shall not in itself invalidate the proceeding at such meeting.
7.19 The chamber through the Management Committee may nominate members for appointment to outside bodies and person so nominated shall represent the organization. Person so appointed shall report to the chamber regularly on the business of the bodies in question.
7.20 Every member or servant of the organisation acting pursuant to the duties entrusted to him by the organisation shall be indemnified by the organisation against all costs losses and expenses which he may incur or for which he may become liable by reason of any act or commission in the discharge of such duties unless the same should happen through his own negligence default breach of duty or breach of trust.
OFFICERS OF THE ORGANISATION
8.01 There shall be a president of the organisation who shall be elected every three years and is eligible for re-election for only one more term of three years. Thereafter he can sit on the council as immediate president until a new president (i.e) his successor) replace him. The duties of the president shall be to preside at the annual General Meeting, extra-ordinary General Meeting, at meeting of the council and of the Management Committee. He shall be the spokesman of the organisation on all policy matters. After his term of office he will serve in the council of past presidents when it is created.
8.02 There shall be three vice president of the organisation who will be elected every three years and are eligible for re-election for only one more term of three years. There will be a vice president responsible for corruption in politicians, and Sungusungu promotions a vice president responsible for corruption and affairs of civil servant, Govt. institution a vice president responsible for affairs of corruption practiced by private companies, NGO, Govt. Companies, Individual business man etc.
8.03 There shall be a treasurer General who shall be elected every three years and is eligible for re-election for only one more term of the years.
8.04 Only members whose dues to the organisation are fully paid up at the date of annual General Meeting shall be eligible for elections as officers of the organization.
8.05 (i) The president, the vice presidents and the treasure General shall constitute the officers of the organisation and shall assume office immediately after the close of the annual General Meeting or Extra-ordinary General Meeting at which they have been elected.
(ii) Any Officers of the organisation can be reprimanded or removed from the office at an annual General Meeting or at an Extra-ordinary General Meeting specially demanded by more than half of the total number of the organisation Branches, unless the annual General Meeting or Extra-ordinary General Meeting after due hearing of his defence dismisses the charges brought against the particular officer.
(iii) If the officer fails to attend for reasons the Annual General Meeting or Extra-ordinary General Meeting. Considers to be valid after deliberations, Annual General Meeting or Extra-ordinary General Meeting may delegate making of final decision to the Excessive council if however the officer, having been duly notified of the case against him fails to attend for reasons not acceptable to the General Meeting the case may be decided in his absence.
8.06 If the office of the president shall be vacant by reason of resignation or death or for any other reason, an emergency Meeting of the Executive council shall be called to elect an interim president from amongst the vice-president pending the Annual General Meeting or the Extra-ordinary General Meeting where the position shall be filled.
If there shall at any time and for whatever reasons be less than required number of officers of the organisation the council shall fill the vacant post and seek confirmation there of at the next Annual General Meeting. New officers shall remain in office until the expiry of the balance of the balance of the term of tenure.
Neither a Minister of the Government Ministry nor an elected official of political party (at District, Regional and National level) nor a non citizen, nor a civil Servant of the Government of the United Republic of Tanzania shall be eligible for elections as an officer or Committee Member of the organisation or any of its branches. Provided that where it is deemed to be in the interest of the organisation or branch to secure the attendance of civil servant or non citizen at any Meeting he may attend and make such statements as are appropriate to the Meeting. If further desired he may be coopted into any committee.
DIRECTORS AND SECRETARY
8.09 The deputy vice presidents of the organization shall be Directors of their respective committees and the executive Director shall act as assistance secretary of the organization and a assistance secretary of every committee.
9.01 Patron/Matron of the organisation can be any person as might be seen important. The Management Committee may propose a name to the council.
10.01 Names of registered trustee must be selected among founder members and their number shall be ten to make eleven members including the president.
10.02 (a) The trustee shall form a board chaired by one of the selected member elected every six years eligible for re-elections for more term of six years. (b) The president is automatically a member and a secretary of board of Trustee until the expiry of the term of tenure as article 8.01.
10.03 The board of trustee are owners of organisation property, they have full legal capacity to institute legal proceeding, to contract and acquire and dispose of immovable and movable property.
CEASATION OF TRUSTEESHIP
10.04 The trustee member cease to be in the board of trustee.
If he resign giving one month’s notice in writing to the Board Chairman and a copy to the president of the organization.
Becomes unsound mind.
(iii) If he is adjudicated bankrupt, goes into liquidation or compounds within his creditors
MEETING OF THE ORGANISATION
The organization shall have three types of General Meetings as follows:-
An Annual General Meeting, which shall meet every year on such day and at such place and time at the council shall determine but in any case not later than March 31st each year.
Extra-ordinary General Meeting pursuant to article 11.04
Such Meeting of members as the council deems necessary.
ANNUALY GENERAL MEETING
11.01 (a) Every organisation Regional Branch shall be represented by (3) three
delegates who shall be elected by the Regional Branch Annual or Extra-ordinal General Meeting. Provided that if a Regional Branch has more than 1000 members the Branch shall have additional delegates calculated at the rate of one delegate for every 500 members in excess of 1000. Membership of a “Regional Branch” shall include members of all district branches within the particular Region.
Every designated sector Business Organistion shall be represented by three (3) delegates who shall be elected by the Annual or Extra-ordinary General Meeting of the sector organisation. Provided that if a sector business organisation has more than 1000 members the sector organisation shall have additional delegates calculated at the rate of one delegate for every 500 members in excess of 1000.
Every designated professional association shall be represented by one (1) delegate.
Every designated Business support organisation shall be represented by one (1) delegate.
Members of the Executive Council as defined in article 11.07 of this constitution.
11.02 The business of Annual General Meeting shall be to:-
Approve the minutes of the previous Annual General Meeting and of Extra-ordinary General Meeting held in the mean time.
Receive the report of the president on the activities of the organisation during the past year.
Receive the audited accounts of the chamber for the preceding year and the report of the auditors thereon.
Receive consider and approve the plan of action for the ensuring year.
Approve the Budget for the ensuring year.
Appoint and fix the numeration of the Auditors of the organisation for the ensuring year.
Elect the officers of the organisation when due provided that nominations for elections shall be made in writing on the prescribe form and delivered to the Executive Director not less than fourteen days prior to the schedules date of the Annual General Meeting.
Hear appeals (if any) from members whose membership has been suspended or terminated.
The annual General Meeting shall have the right to comment and direct on the structure of standing committees or any matter what so ever proposed by the council.
EXTRA-ORDINARY GENERAL MEETING
11.04 Extra-ordinary General Meeting shall be convened by the council on it sown motion or upon the request in writing of at least one of the member of the organisation of Regional branches stating the purpose for which the meeting is to be called.
11.05 The business of an Extra-ordinary Meeting shall be confined to the matters disclosed in the notice of the Meeting.
QUORUM OF GENERAL METING.
11.06 Save or otherwise provided a quorum for all General Meeting shall be one third of the total numbers of delegates that are entitled to attend the meeting and entitled to vote whichever is the least.
11.07 The affairs of the organisation shall be managed by the council in accordance with directions given by organisation in the General meetings. It shall comprise.
The officers of the organization
Chairperson of organization Regional Branch.
Chairperson of designated sector organization.
One representative elected by designed support organization.
One representative elected by designated professional associations.
Immediate past president of the organization.
The executive Director of the organisation appointed pursuant to article 14.01 sitting as Ex-official member of the council and acting as secretary of the council.
The council shall be responsible to the Annual General meeting which shall have the final say on all matters including those previously dealt with by the council.
Any member of the council who fails to attend three consecutive meeting of the council for whatever reason shall cease to be a member of the council. The Branch or organisation which represents shall replace him with another person.
11.08 The council shall meet in the months of March, June, September, and December each year or more often as the need be.
QUORUM OF COUNCIL
11.09 The quorum of the council shall be one third of its membership or ten members present and entitled to vote whichever is the least.
11.10 A quorum in respect of each committee and sub-committee unless otherwise specified here in shall be 1/3 one third of its membership present and entitled to vote.
11.11 At any meeting of the organisation its council or committees and sub-committees at which a quorum is not realised within thirty minutes of the appointed time the meeting shall stand adjourned until seven days thereafter when it will again meet at the same time and in the same place. In the event or this later day falling on public Holiday the meeting will take place the day following at the same time and in the same place. Members present at the adjourned meeting at the appointed hour shall form a quorum.
12 ANNUAL REPORTS
Annual reports shall be prepared by the Executive director with collaboration with the president. Chairman of branches will be responsible for preparation of their annual report with an assistance of officers of the branch.
ALTERATION OF THE CONSTITUTION & LAWS
13.01 This constitution may be amended by 2/3 majority vote of the voting member of the full council at an Annual or Extra-ordinary meeting called for that purpose. Such resolution must get the final approval of 2/3 of founder member.
13.02 In all cases notice for any proposed amendment shall be communicated to each members of the full council at least fourteen 914) days before the date fixed for the debate of the proposed amendment.
13.03 The Executive council shall have powers to make & amend the by law provided that such amendments are laid before and approved by the full council prior to their becoming effective.
APPOINTMENT OF STAFF.
14.01 The council shall appoint an Executive Director and Marshal of agents for the organization following interviews and recommendations by the management committee. At the following Annual General Meeting or Extra-ordinary General Meeting and delegates shall be informed of the appointment.
14.02 The Executive Director shall be responsible to the management committee through the president and shall refer to the management committee through the president and shall refer to the management committee for detailed direction.
14.03 Other senior officers shall be interviewed and appointed by the management committee and the council shall approve at their next meeting.
14.04 The Executive Director shall appoint junior staff after interviews and the management committee shall be informed of the appointment. Provided for in the Budget.
14.05 The Marshal of Agents shall be a private secretary of the president and shall be in the office of the president. He shall propose junior staff of his section to the executive director for employment as per budget.
15 FINANCIAL YEAR
The financial year of the organisation shall be the calendar year.
16 FINANCIAL ARRANGEMENTS.
16.01 The organization source of finance shall consists of :-
Admission fee paid by members in accordance the resolution of the council.
Contribution and Donation from members.
Grants, Donations, Loans and contribution form the Government or Parastatal organisation.
Grant, Donation, Loans and contributions from individuals private companies and International organisation
Any other income lawfully received by the organisation.
16.02 Funds and other assets of the organisation shall be under close control of the executive council.
16.03 All income of the organisation shall be the property of the organization.
16.04 Funds of the organisation shall be used solely for
Payment of legitimate expenses and salaries.
Any other purpose for the furtherance of the object of the organisation.
16.05 The officers of the organisation shall course proper books of accounts to be kept with respect to:-
All sums of money received and expended by the organisation and matters in respect of which the receipt and expenditure take place.
The asset and liabilities of the organisation.
16.06 The books of Account shall be kept at the registered office of the organisation or at such other place or places as the officers think fit and shall always be open to the inspection of the officers.
16.07 \the offices shall from time to time determine whether and to what extent and at what times and places and under what condition or regulations the accounts and books of the organisation or any of them shall be open to the inspection of member not being officers, and no member (not being an officer) shall have any right of inspecting any account or except as conferred by stature or authorized by the officers or by the organisation in general meeting.
16.08 The officers shall from time to time cause to be prepared and to be laid before the organisation in general meeting such profit and loss accounts balance sheets and reports as are referred to in the resolution.
16.09 Within four months after close of each financial year of the organisation an Audit shall be made of the financial statement (i.e income and expenditure, account balance sheet, funds flow statement will be determined by the executive council form time to time).
16.10 A copy of every Balance sheet including every document required by law to be annexed there to which is to be laid before the organisation in the General Meeting together with a copy of the auditors report shall not less than seven days before the date of the meeting be made available for organisation at their respective branch offices.
16.11 Auditors shall be appointed for the following year at the Annual General Meeting which also fix their numeration.
16.12 All accounts record and documents shall be open to the inspection of Auditors at any time.
16.13 The Executive Director appointed pursuant to article 14.01 shall produce an account of the receipt and payments of the organisation and a statement of assets and liabilities prepared as at the end of the financial year immediately proceeding the Annual General Meeting.
16.14 The Auditors shall examine such annual accounts and statements and either certify that they are correct duly vouched and in accordance with the law or report to the organisation in what respect they are found to be incorrect, unvouched or not in accordance with the law.
16.15 The council may from time to time make, repeat or amend rules for conduct of the affairs of the organisation as a whole or in part. Any rule prescribed by the council may be repealed or varied by a resolution passed at the General Meeting. Provided that any such repeal or variation shall not invalidate any action taken by the organisation prior to the passing of the resolution to repeal or vary the rules.
The council shall provided for the safe custody of the seal. The seal shall be used only by the authority of the council and every instrument to which the seal shall be affixed shall be signed by any two officers of the organisation.
18.REGISTER & OF MEMBERS
18.01 There shall be a register of members who will be given identify of membership, valid and subjected to membership regulation. No claim of being a member without an identify with receipts of full paid up fees. The register shall be kept at the headquarter of the organisation and should appear in any annual General Meeting, or Extra-ordinary meeting. “AGENTS” Shall appear in a confidential register.
19.DISOLUTION OF THE ORGANISATION.
19.01 If upon winding up or dissolution of the organisation there remains after the satisfaction of all its debts and liabilities of any property what solver the same shall not be paid or distributed among the members without prior consult of board of Trustee. But shall not be given or transferred to some other institution having object of similar to the organisation and which shall prohibit the distribution of its or their income and property amongst its or their members to an extent at least as great as amongst its or their members to an extent at least as great as is imposed on the organisation.
19.02 The Board of trustee shall decide if seem reasonable to handle property of the organisation to charitable objects to be determined by the members.
20.01 There shall be established in every Region and district headquarters in the mainland of the United Republic of Tanzania. A Branch of the organisation. These Branches shall be subjected to the terms of the constitutional of the organization. In order to participate in the activities of the organisation on a continuous basis, Members of the organisation in respective area, shall register themselves with Branches in their areas.
20.02 Branches at Regional headquarters shall be referred to as Regional transparency of the organisation while those at District headquarter shall be referred to as District transparency branches of the organisation.
20.03 No district branches shall be established at Regional headquarters.
20.04 In order to participate actively in promoting the organisation affairs of it members at Regional, and district levels, the branches shall act and perform any of their functions and activities autonomously. For avoidance of doubt, the branch shall have the freedom to foundation, institution trust or any association whose object are not in conflict with the object of the organisation.
20.05 In all matters which are outside the jurisdiction of the Branch. The Branch shall act through and with the authority of the management committee.
OFFICERS OF THE BRANCH
20.06 There shall be a chairman of the Branch who shall be elected every three years at the Annual General Meeting of the branch and is eligible for re-election or only one more term of three years. Thereafter he shall sit on the executive committee as immediate past chairman until his successor replaces him.
20.07 The Branch chairman shall preside at the following Branch Meetings.
Annual General Meetings
Extra ordinary General Meeting
Executive council Meeting
Management committee Meetings.
20.08 There shall be three vice-chairman of the Branch who shall be elected very three years at the annual General Meeting of the Branch and shall be eligible for re-election for only one more term of three years.
20.09 There shall be a Honorary secretary and Treasures of the Branch who shall be elected every three years and shall be eligible for re-election for only one more term of three years. Provided that when a full time executive officer has been appointed pursuant to article 20:26 the post of Honorary secretary shall lapse.
20.10 The Honorary secretary shall act as Secretary to branch meeting while the honorary Treasure shall act as Treasure to the Branch.
20.11 The chairman, the three vice chairman, the honorary Secretary and the honorary Treasure shall constitute the officers of the Branch and shall commence office immediately after the annual General Meeting at which they have been elected.
20.12 Any officers of the Branch can be reprimanded or removed from the office at annual General Meeting or at an Extra-ordinary General Meeting specially demanded by more than half of the paid up members of the Branch unless the annual General Meeting or Extra-ordinary General Meeting after due heating of his defence dismisses the charges brought against the particular officer.
20.13 However if the officer fails to attend for reason the annual General meeting (AGM) or Extra-ordinary General Meeting (EGM) consider to be valid after deliberations the annual General Meeting or Extra-ordinary General Meeting may delegate making a final decision to the executive committee of the Branch. If however the officer having been duly notified of the charge against him fails t attend for reason not acceptable t the General Meeting the case may be decided in his absence.
20.14 If the office of the chairman shall fall vacant by reason of resignation or death or for any other reason an emergency Meeting of the Executive Committee of the Branch shall be called to elect an interim chairman from amongst the vice chairman pending the Meeting of the annual General Meeting or Extra-ordinary General Meeting of the Branch where the position shall be filled.
20.15 Pursuant to the requirement of the ordinance only the officers of the organisation can act as directors. However the officers of the Branch shall act as legally authorized agents of Directors of an organisation.
BRANCH GENRAL MEETING.
20.16 In Liaison with the organisation headquarters Branches shall hold an annual General Meeting every year on such time and place as the Branch Executive Committee shall determine but in any case not later than the month of February.
20.17 Extra-ordinary General Meeting of the Branch shall be covered by Branch executive committee and its own motion upon the request in writing of at least fifteen members registered with the Branch stating the purpose for which the meeting is to be called.
20.18 Each district Branch shall send delegates not exceeding ten (10) in number to Annual General Meeting or E.G.M. of the Regional Branch. The Chairman of a District Branch shall attend in his capacity as member of the Executive Committee .
20.19 The business of the annual General Meeting of the Branch shall be to:-
Approve the minutes of the previous annual Meeting and E.G.M. held in the mean time.
Receive the report of the Branch chairman on the activities of the Branch during the past year.
Receive the audited accounts for the preceding year and the report of the auditors thereon.
Receive consider and approve a plan of action for the ensuring year.
To approve the budget for ensuring year.
Appoint and fix the numeration of the auditors for the ensuring year.
Elect the officers of the Branch when due councilors of the executive committee of the Branch. When due, the members to represent the Branch at annual General Meeting of the organisation, provided that nominations for the election shall be made in writing on prescribed from and delivered to Hon. Secretary or Executive officer as the case may be not less than fourteen days prior to the scheduled date of the Annual General Meeting.
Hearing appeals if any from suspended or terminated members.
20.20 The annual General Meeting of the Branch may make recommendation to the executive committee concerning the structure and number of standing committees and the purpose for which they are established. The executive committee shall elect chairman of such committee.
20.21 The executive business of an extra-ordinary General Meeting of the Branch shall be confined to the matters disclosed in the notice of the Meeting.
20.22 Notice for convening Branch General Meetings shall be twenty one days.
20.23 Quorum for Branch General Meeting shall be one third of paid up members of the Branch or twenty members present and entitled to vote whichever be the least.
The president of the organisation shall be invited to all Regional Branch General Meetings. Where the president of the organisation is unable to attend he shall depute a representative.
In an event of an election the president or his representative shall preside over the proceeding.
The chairman of the Regional Branch shall be invited to all District branches General Meeting. Where the chairman of the Regional organization is unable to attend he depute a representative.
In the event of an election the chairman of organisation of the Regional Branch or his representative shall preside over the proceeding.
BRANCH EXECUTIVE COMMITTEE
20.25. The Affairs of the branch of the Organistion shall be managed by an executive
committee. It shall comprise of:-
The officers of the Branch namely chairman, three vice chairman politics, civil servant, and private Co’s, individual business man, NGO, Govt Companies, Hon treasure and Hon. Secretary where there is no full time Executive officer.
Six members elected at Branch annual General Meeting to represent sectors of activities according to its prominence of these activities in the particular Region or District.
Chairman of District Branches in case of an Executive committee of a Regional Branch.
The executive officer of the branch appointed pursuant to article 20:26, sitting as Ex official member and acting as secretary to the committee.
Immediate past chairman of the Branch pursuant to article 20:06
The executive committee shall meet at least four times a year.
20.26 The executive committee of the Branch shall appoint an executive officer for the branch who shall be responsible to the executive Director of the organisation for policy Director. The executive officer shall however, be responsible to the management committee of the Branch on day to day affairs.
20.27 The quorum of the executive shall be 3/3 of its elected membership or eight members present and entitled to vote whichever is the least.
BRANCH MANAGEMENT COMMITTEE.
20.28 There shall be a management committee of the Branch which shall comprise:-
The officers of the Branch.
The executive officer of the Branch sitting in an ex-official capacity and acting as secretary to the committee. On request to and approval of the chairman of any standing committee may attend a meeting of the management committee.
Provided that the management committee has invited other persons whether members of the Organistion or not to any or all of its meetings or to any part of the proceeding but such person shall not be entitled to vote.
20.29 The management committee shall be responsible to the executive committee for all administrative matters related to finance and for the general day to day running of the Branch and shall meet at least once per month. Any member of the Management or executive Committee who fails to attend three consecutive meeting of the committee with any reasons shall case to be a member of the committee. The executive committee shall appoint another person.
20.30 The quorum of the management committee shall be two third of its members present and entitled to vote.
20.31 When in the view of the chairman of branch an urgent decision is required he shall make such decision and at the first opportunity report to and seek approval of the management committee and, if appropriate of the Executive committee.
BRANCH STANDING COMMITTEES.
20.32 The executive committee of the Branch, acting an advice given to its by annual General meeting in terms of article 20:20 shall within thirty days thereof appoint standing committees and chairman of standing committees to deal with.
Politics and sungusungu promotions.
Civil servant, Government institutions
Private companies, NGO, Individual business man.
20.33 Provided that such committee shall be given terms of reference by the executive committee either informally or formally in writing, including directions regarding any reporting procedures which the executive committee may require. The exact number of standing committee to be formed shall be determined by the Branch Executives committee.
20.34 Each standing committee shall comprise not less than three members who shall be appointed by the Branch Executive Committee. The standing committee shall hold office for the life span of the Executive committee.
20.35 Each standing committee shall advise the executive committee in matters coming within its terms of reference as defined by executive committee.
20.36 The executive committee may appoint such committee as it considers necessary given defined tasks to be performed.
20.37 Articles here in relating to casual vacancies, caption, votes, financial year, funds and accounts and audit of the organisation shall apply mutatis mudatis to the Branches.
20.38 When in the opinion of the council the management of a Branch is deem to be weak and in particular where:-
A branch ceases to function properly or
There is fragrant violation of the constitutional of the organisation.
A request has been received from at least one third of the paid up members registered in a branch or
A branch has failed after due notice to provide important information to the Organistion to the satisfaction of the executive council or
A branch has failed after due notice to provide important information to the Organistion to the satisfaction of the executive council or
A branch has persistently defaulted to remit the prescribed part of membership dues to the organization headquarters.
20.39 The council may dissolve the executive and management committee of the branch and assume direct responsibility for management pending fresh elections pursuant to the constitutional of P.O.T.A.
PEOPLE'S ORGANIZATION TRANSPARENCY AGENCY P.O.T.A
FINANCIAL ACCOUNTING SYSTEM
1.0 PURPOSE AND RESPONSIBILITES
1.1 To describe the Financial Accounting System to be followed accounting principles, document, books of accounts and procedures to be used.
1.2 The Executive Director and Head of Accounts and Executive Officer have the overall responsibility of ensuring that financial accounting systems and principles are adhered to. They are the Accounting Officer of POTA at the Head quarters and at the Branch respectively. Where a branch does not have an Executive Officer the Hon. Secretary shall be the Accounting Officer.
1.3 The Head of the Accounts has responsibility for ensuring that the accounts staff comply to the TSSAP of the NBAA, accounting principles and policies.
1.4 The Supplies Officer is responsible for timely purchase of accounts books, journal, computer diskette and documents required for accounting purposes.
2.0 ACCOUNTING PRINCIPLES AND POLIES
2.1 ACCOUNTING PRINCIPLE
2.1.1 In pursuant to the Tanzania Statements of Standard Accounting Practice ( TSSAP) number 1 to 3 issued by the National Board of Accountants and Auditors in exercising its authority vested on it by Section 39 of the Auditors and Accountants registration Act (1972) POTA is required to disclose in the annual financial statements the following:
"Fundamental accounting principles which are generally accepted and observed in recording and reporting accounting information and particularly income determination, expenses recognition and determination of amounts at which material items should be disclosed in the Balance sheet"
2.1.2 Accounting is the art of recording, classifying, and summarising in a significant manner and in terms of money, transactions and events which are in part at least of financial character, and interpreting the results thereof. Accounting is a language for communicating monetary information. As other language certain practices are simply accepted by convention.
2.1.3 A convention is a practice that has gained general acceptance over time by accountants and auditors. The notions of debit and credit are example of accounting convention.
2.1.4 Entity concept. Each organisation for which we account is an independent entity, separate from its owners, managers, customers, creditors, and all other persons and entities with which it deals.
2.1.5 Monetary concept. Transactions and events can be stated in terms of monetary units.
2.1.6 Cost concept. Assets are recorded and maintained in the accounting records at their cost bases.
2.1.7 Time period concept. The activities of an entity are capable of being identified with particular calendar accounting periods.
2.1.8 Realisation concept. Revenue arises at the point of sale of property or upon the rendering.
2.1.9 Matching concept. Revenues should be matched with the expenses that were responsible for their generation in the period concerned. At the end of a period, accrued but unrecorded revenues and expenses are recognised by means of adjusting entries.
2.1.10 Going concern concept. The life of an entity is considered unlimited unless/ until there is concrete evidence that it will end at some approximately determinable future time.
2.1.11 Conservatism, as it applies to the practice of accounting, is the tendency of accountants to be cautious, or moderate, when making judgments and estimates.
2.1.12 Objectively refers to freedom from bias and prejudice.
2.1.13 Materiality is the relative importance of the result of an accounting action.
2.1.14 Consistency is the act of accounting to treat like items the same way over time.
2.1.15 Disclosure refers to the attempt by accountants to communicate all material facts that are considered to be important to users of accounting data.
2.2 ACCOUNTING POLICIES.
The specific accounting bases adopted by P.O.T.A and which are appropriate to the nature of activities and best suited to present a true and fair view of its operations are described hereunder: -
2.2.1 Basis of Accounting.
POTA shall prepare its accounts on historical cost basis of accounting, modified, when necessary to include revaluation of assets.
2.2.2 Fixed Assets.
Fixed assets shall be stated in the balance sheet at cost or revaluation net of depreciation.
Depreciation shall be calculated on straight line basis so as to write off he cost or revaluation over the economic useful life of the asset. The rates that shall be applied on respective categories of fixed assets are:
Land and Buildings 2.5%
Installed Plant and Machinery 12.5%
Motor Vehicles 25%
Mobile machines & Fittings 12.5%
Electrical Installations 5%
Investments shall be stated at cost, but shall be written down to her realisable value in case there is a permanent diminution in their value.
Income from investments shall be included in the accounts when amounts are received or accrued.
All expenses including those on research shall be written off in the year in which they are incurred. Funds of POTA shall be used solely for:
Payment of legitimate expenses and salaries.
Any other purpose for the furtherance of the object of POTA.
2.2.6 Accounting Year.
Financial accounting year shall be twelve continuous months, January to December (Article 15.01 of the Constitution)
2.2.6 Provision for Bad and Doubtful Debts
Receivable outstanding for more than three years shall be provided for a s bad and doubtful debts chargeable against the accumulated bad and doubtful account.
2.2.8 Accounting for Pension Contributions
Contributions by the employer shall be recognised in the accounts on accrual basis of latest returns by employer.
Income shall be accounted for in the period it relates. Income received in advance, if any shall be deferred until he relevant period. All income to POTA from whatever source shall be the property of POTA (Article 16.03 of the constitution).
3.0 ACCOUNTING DOCUMENTS AND BOOKS
3.1 ACCOUNTING DOCUMENTS
There are many accounting documents depending on the nature of the business being carried out. The details and drawings of various accounting documents are given in this financial accounting system and in the stores and purchase regulation. Examples of accounting documents are:
An Invoice is a billing document on which a supplier shows details of goods sold / services rendered, quantity, price, amount terms of trade, evidence of delivery and reference of local purchase order (LPO) and name, signature, position and official stamp of the person raising the invoice.
3.1.2 Proforma Invoice
A proforma invoice is a quotation document of which a supplier shows details of goods to be sold/ service to be rendered, quantity, price, amount, terms of trade and name, signature position and official stamp of the person raising the proforma invoice.
A receipt is a written acknowledgement of cash / Cheque form the payer. It consists of name address of receiving organisation receipt number and date, payee's full address, amount in words, reasons for receipt means of payment, name and signature of receiver and official stamp of the organisation.
A cheque is a bill of exchange that calls upon a bank to make payment to a third party.
3.1.5 Payment Voucher
A payment voucher is a document authorising payment of cash from the organisation. It contains payment voucher number and date, cheque number, payee's full address, particulars of payment amount in figures and words, account code for debiting, names and signature of authorising and official stamp of the organisation.
3.1.6 Bank Statement
Bank statement is a document showing a customer's full addresses, account number and record of the beginning balance, deposits, and drawings and ending balance with the bank.
3.1.7 Bank Balance
A Bank balance is a Bank's document given to the customer showing the amount remaining at a given date in a current or deposit account. It differs from a Bank statement of the same date because of outstanding cheques, deposits in transit and sometimes other usually minor items.
3.1.8 Bank Debit Note
Bank debit note is a bank document for notifying a customer of a reduction in the customer's bank account.
3.1.9 Bank Credit Note.
Bank credit note is a bank document notifying a customer of increase in the customer's bank account.
3.1.10 Bank Pay - in Slip
This is a bank document used by a customer of a bank to deposit cash and cheques in the account. The document consists of name of bank, bank branch , date, account number, name of account holder, denomination of currency, drawers name, number and amount of the cheque being deposited, total amount in figures and words, signature of
the person depositing the cash , Teller's stamp, signature and date. This document is normally completed in duplicate, the original copy for the bank and duplicate copy for the bank customer.
3.1.11 Credit Note
A credit note is a supplier's business document , the purpose of which is to initiate a reduction in a customer's account (amount owing to the supplier). The effect is usually a reduction of an invoice previously rendered due to goods returned by the customer to the seller due to a number of factors, such as damaged goods, under delivery etc.
3.1.12 Debit Note
A debit note is a customer's business document, that explains to a supplier on credit the reasons for a reduction in the customer's accounts payable. The debit note is sent along with the returned goods to the supplier and is used to make entries in the Returns Outwards Book. The effect is usually a reduction of an invoice previously sent by the supplier to the customer for goods returned by the customer due to a number of factors, such as, damaged goods, under delivery etc.
3.1.13 Salary Slip
A Salary slip is an employer's document explaining to an employee his /her gross salary increases in salary, decreases in salary and net salary payable.
A payroll is a record showing the wages and salaries earned by employees for a certain period, and the various deduction from it, such as income tax, NPF, PPF, insurance premium, outstanding imprest etc.
3.1.15 Petty Cash Voucher
Petty Cash voucher is an accounts document authorising payment of a small amount of money kept in the cash office for the convenience of paying cash for small expenditures.
3.1.16 Dishonoured Cheque
Dishonoured cheque is a cheque which was not cashed when presented to the issuer's bank because there were not sufficient funds in the bank account to cover the amount of the cheque.
3.1.17 Local Purchase Order
A local purchase order (LPO) is a business document prepared by the Supplies Officer detailing all pertinent information about an agreement to purchase goods or service on credit terms.
( Details are given in the Stores and Purchase Regulations.).
3.1.18 Goods Received Note
A goods received note is a business document prepared by the Receiving Storekeeper detailing all pertiners information in respect of good received into the business. ( Details are given in the Stores and Purchase Regulations.)
3.1.18 Purchase Invoice
The manner of describing the supplier's sales invoice in the office of the purchaser to distinguish it from the purchaser's own sales invoice.
3.1.20 Purchase Regulation
A purchase requisition is a business document requesting the Supplies Section to order certain goods or service in accordance with the information and instructions recorded on the document. Only key personnel, such as department / sectional head, are usually authorised to issue purchase requisition.
3.1.21 Delivery Note
A delivery note is a business document which proves the transfer of possession of goods from the supplier to the buyer. The delivery note normally accompanies the goods which have been sold and is counter - signed by the receiver of goods.
3.1.22 Packing Slip
A Packing slip is a business paper providing a description of the goods and of the quantities shipped but not of prices, in many instance, the packing slip is merely a carbon copy of the sale invoice with the price and shilling amounts blocked out. The packing slip is enclosed with the goods by the supplier for the convenience of the purchaser's employees in identifying the goods.
3.2.1 A journal is a book where accounting transactions are recorded chronologically according to the order of dates, with adequate explanation. The process of recording accounting transactions in a journal is termed journalising. Every transaction must first be entered in the journal before being posted to the ledger.
3.2.2 The advantages gained for maintaining journal are:
Provision of chronological record of accounting transactions.
Shows the accounts and amounts to be debited and credited.
Provides record of explanations about accounting transactions.
(d) Provides a link between the original document used for journalising and the ledger.
3.2.3 The basis for journalising are written evidence knowing as original documents. These documents must be examined for relevance, error s and accuracy of calculations, code, extensions, and accounts to be debited and credited.
3.2.4 For purposes of subdividing work and keeping related detailed together, thus facilitating more than one person to carry out recordings POTA to maintain the following journal books.
Cash Receipts Books for recording cash collections, cash sales and grants received.
Cash Payments Book for recording disbursements by cheque.
Purchase Journal for recording credit purchases.
Purchases Returns journal for recording goods returned to suppliers.
Sales Journal for recording sales are on credit.
Sales Returns Journal for recording goods returned by customers.
General Journal for recording assorted items.
(h) Petty Cash Book for recording payment in cash.
3.2.5 In order that details may be kept POTA to operate journal books with analysis columns.
3.2.6 The column of a General Journal are:
Date for recording year, month and day of the transaction.
Particulars column for recording the accounts names to be debited and credited and a brief explanation.
Folio column for recording related accounts codes.
Debit column for recording amount to be debited.
Credit column for recording amount to be credited.
3.2.7 Journal Voucher
A journal voucher is a source document for posting into the General Ledger the following informations.
Monthly total of original books of accounts.
Closing entries at the end of the financial year.
Correction of errors
Transfers between accounts.
Adjustments in the accounts.
Purchases and disposal of fixed assets.
Entries for opening new books of accounts.
(b)The Journal Voucher contains the following informations
Journal Voucher Number
Name of accounts to be debited and credited.
Identification code of accounts.
Total amounts of debit and credit
The person raising the Journal Voucher(JV)
The person authorising the JV.
The person posting the JV into the General Ledger.
(c) The journal Voucher be completed as follows:
The journal Voucher number be completed with the serial identification number of each JV.
The month space be completed with the month for which the JV relates.
The Accounts Name be completed with the names of the accounts to be debited and credited.
The code column be completed with the identification code found in the chart of Accounts.
The credit column be filled with the amount being credited to the corresponding account.
Total the debit column and credit column and make sure that the amounts are equal.
The narration space be completed with the reasons for raising the JV specifying the Books of Accounts and the months being journalised.
Prepared by space be completed with the full name of the person raising the Journal Voucher.
Authorised by space be completed with the full name of the authorising person . Normally this person will be the Head of Account.
Posted by space be completed with the full name of the person posting the General Ledger and the date when the JV is posted.
A ledger is a book containing Accounting. An Accounting is a page of a ledger on which is recorded accounting transactions. An account contains the following information.
3.3 GENERAL LEDGER
The General Ledger is a book containing all the Control Account of the POTA.
Fixed and Current Assets Account.
Owners' Equity Account
Long - term and Current Liabilities Account
The source of the data of a general ledger control account is indicated by the reference number of the book s of account entry in the folio column of the control account.
3.5. SUBSIDIARY LEDGER
A subsidiary Ledger is a book of accounts containing detailed record of one of the general ledger control account. The importance of subsidiary Ledger is to subdivide work and keep detailed information thus facilitating more than one employee to record in the subsidiary ledgers.
The sum of the balance in each of the accounts in a subsidiary ledger should agree with the balance in the control account of the General Ledger.
The subsidiary ledgers to be kept by POTA are the :
Receipts Cash Book.
Disbursement Cash Book
Petty Cash Book.
Staff Imprest Ledger.
Fixed Assets Ledger.
Sales Returns Day Book
Purchase Returns Day Book
4.0 ACCOUNTING PROCEDURES
4.1 POSTING FROM BOOKS OF ORIGINAL ENTRIES.
4.1.1 Position is the process of transferring information from the Journal Books and Journal Voucher to the relevant accounts in the subsidiary ledgers and general ledger. Every debit entry must have a corresponding credit entry of the same amount as a guide:
Assets accounts are increased by debit entries and are decreased by credit entries.
Owners' equity accounts are increased by credit entries and decreased by debit entries.
Liabilities accounts are increased by credit entries and decrease by debit entries.
Expenses accounts are increased by debit entries and decreased by credit entries.
4.1.2 Posting from the Cash Receipt Book
The total cash collection for the whole month are posted on the debit of the cash control account in the General Ledger at the end of the month.
The total of the analysis column for Debtors is posted on the credit side of the Accounts Receiving Control Account of the General Ledger at the end of the month.
The total of the analysis column for sales is posted on the credit side of the Sales control account of that General Ledger at the end of the month.
The total of the analysis column for Grants is posted on the credit of the grants control account of the General Ledger.
The amount entered in the Sunday account and because the purpose of this column in cash receipts
All the individual amounts in the debtors credit column are posted to the credit side of each customers account in the Debtors Ledger.
4.1.3 Posting from Cash Disbursement Book.
The total cash paid for the whole month are posted on the credit of the cash control account, in the General Ledger, at the end of the month.
The total of the analysis column for creditors account (Accounts Payable) is posted on the debit side of the creditors Control Account of the General Ledger, at the end of the month.
The total of the analysis column for Purchases is posted of the debit side of the creditors Control Account of the General Ledger, at the end of the month.
The amounts recorded in the Sundry debit column are posted on the debit side of the General Ledger, individually, to the account name in the account title column of the cashbook.
All the individual amounts in the creditors column are posted to the debit side of each credit supplier's account in the Creditors ledger, These individual debit postings to the creditors subsidiary Ledger support the total debit posting to the creditors control account in the General Ledger.
4.1.4 Posting from the Sales DayBook.
Each record in the Sales DayBook is a debit to the individual customer's account in the Debtors Subsidiary Ledger and a credit to the Sales Account in the General Ledger.
The posting to the Debtors subsidiary ledger accounts is usually done daily. This is because of the need to have an up to date balance of each credit customer. The daily posing to a customer's account is done as follows.
The date of sale if recorded in the date column of the account.
The folio column of the account is filled with the page of the sales daybook.
The amount of the sales is posted to the debit column of the customer's account and added to the balance column.
The folio column of the Sales DayBook is filled in with the number of the customer's account.
At the end of the month, the total of the amount column of the Sales DayBook is posted to the credit side of the Debtors Control Account in the General Ledger.
4.1.5 Posting From the Sales Returns Book.
The posting at the end of the month are as follows :
Debit the total of the amounts column of the sales Returns Book to the General Ledger Sales Return Control Account
Credit each individual account of the customer concerned, in the Debtors Subsidiary Ledger, with the detailed amount that constitute the total of the Sales Returns Book in order to reduce the amount owed by the credit customers.
1.4.6 Posting From the Purchases Day Book
The posting to the creditors subsidiary ledger accounts is usually done daily in order to have an up to date balance of each supplier. The daily posting to a supplier account is done as follows:
The invoice date is entered in the date column of the account.
The folio column is filled in with page number of the purchases Day Book.
The amount of the purchase is posted to the credit column of the supplier's account and added to the balance column.
The folio column of the Purchases DayBook is completed with the account number of the supplier's account.
After the end of the month, of the purchases DayBook, the following postings are made in the creditors Control Account of the General ledger.
Record the end of month date in the Creditors Control Account.
Enter the page number of the purchases DayBook in the folio column of the creditors Control Account.
Enter the number of the Creditors Control Account in parentheses, below the double lines, in the amounts column of the purchases DayBook on the right.
At the day of the month, the total of the Purchase Daybook is posted to the Purchases Control Account of the General Ledger as follow:
Record the end of month date in the date column of the purchases Account.
Enter the page number of the Purchases DayBook in the folio column of the Purchases Account.
Record the total purchases value in the debit amount column of the purchases Account.
Record the total purchases value in the debit amount column of the purchases Account.
Write the number of the purchases Account in parentheses, below the double lines of the total amount column of the purchases Day book, to the left.
4.1.7 Posting from the Purchases Returns Book.
The posting at the end of the month is as follows:
Credit the total of the amount column of the purchases Returns Book to the purchases Returns Account in the General Ledger.
Debit the total of the amounts column of the Purchases Return s Book to the Creditors Control Account of the General Ledger.
Debit each individual account of the supplier in the Creditors subsidiary ledger, with the amounts returned to each Credit Supplier.
4.2 POSTING INTO LEDGER ACCOUNT
4.2.1 Accounting for the Revenue
All sums of money received by POTA shall be acknowledged by an official receipt of POTA duly stamped and signed by the accountant or any person acting.
All money received shall be recorded in the CashBook Under appropriate headings distinguishing the various sources from which it has been derived.
At the end of each day or at the earliest opportunity on the following day ALL money received shall be deposited in bank account of POTA intact.
The duplicate copies of the receipts issued shall be retained and arranged serially for audit purposes.
4.2.2 ACCOUNTING FOR EXPENSES.
When POTA buys electricity power on credit:
Debit the Electricity Expense Account.
Credit the TANESCO Account (Credit Supplier)
On payment of the TANESCO power bill.
Debit the TANESCO Account (Creditor)
Credit the Cash/ Bank Account.
When an outstanding expense, such as payroll, Tax Trade Union Fee ect. Is paid after the ends of the month concerned.
Debit payroll Tax Expense to recognise the tax expenses in the month incurred.
Credit Tanzania Revenue Authority to recognise indebtedness.
Debit Tanzania Revenue Authority when clearing the tax liability.
Credit Cash/ Bank Account.
When POTA pays cash / cheque for transportation expenses, on cash basis.
Debit Transportation Expenses Account.
Credit Cash / Bank Account.
When POTA pays cash / cheque for professional repair and maintenance of vehicle/ plant and machine:
Debit Maintenance Expense Account with the amount of leave travel paid.
Credit Cash Bank Account.
When POTA pays for employees leave travel :
Debit Administration Expense Account with the amount of leave travel paid.
Credit cash / Bank Account.
When POTA pay for stocks insurance cover :
Debit Stocks Prepaid Insurance Account
Credit Cash / Bank Account.
One expiry of the stocks insurance cover.
Debit Stocks insurance Expense Account
Credit Stocks Pre paid Insurance Account.
When POTA receives cash for sales:
Debit Cash / Bank Account.
Credit Customer Account.
4.2.3 ACCOUNT FOR FIXED ASSETS
A fixed asset is a tangible asset held for providing services. It is enable an organisation to carry out work. Its life is more than one year. Including in the usual fixed asset categories are land, plant and machinery, equipments, furniture and fittings, tools etc.
As fixed assets value expires, they are transferred to depreciation expense account. The unexpired fixed assets value is what is termed net book value. In the case of depreciation of fixed assets, the credit reflecting decrease in fixed assets, are accumulated in a separate Account called Accumulated depreciation Account called Accumulated Depreciation Account, a contra (offset) account that should be viewed along with the account showing the fixed assets original value, A contra account is one that accumulates depreciation on fixed assets so that the fixed asset account can continue to show the full value of the fixed asset being depreciated.
When POTA purchase fixed assets on cash basis:
Debit Fixed Assets Account
Credit Cash / Bank Account
When A purchases fixed assets on credit terms:
Debit Fixed Assets Account.
Credit the Supplier's Account.
When POTA pays the Supplier of fixed assets in order to discharge the indebtedness:
Debit the supplier's Account
Debit the Supplier's Account.
Credit Bank Account
To take charge of the fixed assets depreciation.
Debit Depreciation Expense Account
Credit Accumulated Depreciation Account.
To transfer depreciation expenses to the income and Expenditure Account:
Debit Income and Expenditure Account
Credit Depreciation Expense Account.
When POTA incurs a fixed asset loss and the loss is transferred to the Income and Expenditure Account:
Debit Fixed Assets Loss Account With loss
Credit Fixed Assets Account with loss.
Debit Income and Expenditure Account with loss
Credit fixed Assets loss Account.
When POTA disposes a fixed asset through sale on cash basis.
Debit Cash / Bank Account with fixed assets proceeds
Credit Fixed Asset Account.
When POTA takes an insurance cover on fixed asset:
Debit Fixed Assets Prepaid Insurance Account.
Credit Cash / Bank Account.
When the fixed assets insurance cover expires after the end of the insured period :
Debit Fixed Assets Insurance Expenses Account.
Credit Fixed assets prepaid Insurance Account.
When the fixed asset insurance expense is transferred to the income and Expenditure Account.
Debit Income and Expenditure Account:
Credit Fixed Asset Insurance
4.2.5 ACCOUNTING FOR CURRENT ASSETS.
A current asset is unrestricted cash, or other asset held for conversion within a relatively short period into cash or other readily convertible asset, or currently useful goods or services. Usually the period is one year or less, but for some items, e.g. installment receivable, the receivable the period may be much longer.
When current is increased through purchase or other means of acquisition:
Debit current Assets (for asset increase)
Credit Cash/ Bank Account or Creditors Account.
As current assets value expire, they are transferred to expenses account. The use in current assets is recorder by crediting the current asset account and debiting the current assets expense account.
Bad Debits. The debits that are considered to be irrecoverable are called bad debts and will have to be written off after getting the Executive council 's approval.
The journal entry necessary to write off bad debts is as follows:
Debit Bad Debits Account.
Credit the personal Account of the customer who has failed to pay.
Debit Income and Expenditure Account with the bad debit loss transferred to it.
Credit Bad Debits Account.
Doubtful Debits .The personal account of the customer is never written off as bad debt until the amount is found to be absolutely irrecoverable and approved by the Executive Council.
Debit Income and Expenditure Account.
Credit Reserve / Provision For Doubtful Debts Account.
4.2.6 ACCOUNTING FOR LIABILITIES AND OWNERS EQUITY.
Liabilities are economic obligations of POTA. It is the amount of money which POTA owes creditors.
Current Liabilities are debt obligations whose payment fall after one year. For example, along term loan is repaid in periodic payments over the life of the loan.
Owners claim to POTA are referred to as Owner's Equity or Share Capital . This is because capital brought in by an owner of the business is looked upon as if it were a loan granted to the business to the proprietor is thus an expense to the business and a gain to the owner.
The double entries for Liabilities and Owner's Equity are as follows:
Debit Decreases in Current Liability, such as creditors
Credit Increase in Current Liability, such as bank, overdraft, unpaid tax.
Debit Decrease in long term loan
Credit Increase in long term Loan
Debit Decrease in Owner 's Equity
Credit Increase in Owner Equity.
Debit Dividend Account
Credit Capital Account.
When POTA obtains telephone and fax services on credit and subsequently settles the obligation:
Debit Telephone and Fax Expenses Account with the obligation amount.
Credit Tanzania Telecommunications Company Ltd. Debit Tanzania Telecommunications Company Ltd. with the amount off setting the obligation
Credit Cash /Bank Account.
When POTA obtains long term loan form the Financing Company and subsequently settles the principal loan and interest on loan:
Debit Bank Account with principal loan money received.
Credit the Financial Company Account with the principal loan amount.
Debit interest on Loan Expense Account
Credit the financing Company Account with the amount of accrued interest.
Debit the Financing Company Account with principal loan and interest amount.
Credit Bank Account with the Principal loan amount and loan interest amount paid.
When POTA receives external aid for purchasing fixed assets.
Debit Bank / or Assets Account.
Credit Share Capital / Owner's equity Account with the value of external aid received for acquiring fixed assets.
5.0 CASH MANAGEMENT
Accounting staff must be carefully selected and trained and their duties, responsibilities and authority clearly defined
Proper separation of duties so that no one person is in complete charge of any business transaction. As far as possible the work of each person recording cash has to be checked automatically by other employees.
Adequate safety - cash registers, walled - in safe, receiving and paying counters, limited access, police escort during transferring money from and to the bank, locked cages for paymasters and sufficient documentation - all cash transactions must be accounted for in writing.
Cash book balance and bank statement balance must be reconciled monthly during first week of the month by an employee other than those involved with receiving and disbursing cash and maintained.
Regular examination of cashbook, petty cash, cash receipt and cash disbursement by the Internal Auditor / Head of Accounts.
All cheques and other negotiable documents should be made out to POTA individual officers.
POTA 'S safe should be used solely for keeping the POTA"S cash and valuable documents and not for any personal money or possessions.
5.2 RECEIPT OF CASH
Receiving cash be separated from the cash disbursement function.
The same person should not receive cash and also make payments.
Responsibility for receiving cash should specifically be assigned to one employee to have access to the same cash at different periods, proper handing over and a reconciliation of cash on hand should be made each time the responsibility is shifted.
Book - keeping function be separated from the function of handling cash. Cashier should not maintain accounting records and should not have access to the records other than those specified in this manual and for the correct performance of his / her duties. Comparison of bank deposits with book record of cash be made regularly by an employee who is engaged neither in receiving cash nor in the cash recording.
Receipt of cash should be promptly recorded at the time the cash is received. Cheques received through the mail should be entered in cheque register kept by a person in the Executive.
Director / executive Officer 's office with responsibility of opening mails. The person opening the mail should not be a cashier, not have access to accounting records and access to cash fund. The cashier should sign for all the cheques received from the person opening the mail should be entered by him /her in the cheque register kept by herself/ himself. A list of the amounts received together with the customer's remittance letters to be sent to the sent to be book keeper for posting in the ledgers.
While waiting to be deposited in the bank, cash and cheques should always be kept in a safe in a secure place of storage.
In wards cheques register be ruled with the following columns.
Reasons for receipt/ LPO
Procedure for completing the cheque register is as follows;
(i)Column (I) to (vi) entered on receipt of the cheque.(ii)column (vii) is entered in the cashier's register on receipt of the cheques and in the other registers when the accountant is checking the registers with the cashier's cash statement at the close of a day's business.
Column (viii) is entered on the following day when the register is checked with the bank paying in slip stamped by the bank.
A bank Account shall be opened by a resolution of the Management Committee, which shall indicate the name and Branch of the bank at which the account is to be opened, the name and type (current saving etc.) of the account.
Cash receipts should be deposited intact (should not be used to pay current expenses) in the bank, in the following day. Cash should not be allowed to accumulate in the safe. Ensure that the bank paying in slip is stamped by the bank and be returned to a person other than the one who prepared the deposit for comparison with cash receipts book.
For all cash received the cashier is to issue to the customers original copy of official pre - numbered receipt attached to the list of daily collections and be sent to the book - keeper for posting .
The receipts should show
i) Proper heading
ii) Receipt number
iv) The name of the organisation or individual from whom the cash is received
vi) Reasons for the receipt
vii) Signature of Cashier
viii) Official stamp of the POTA
The correct value of revenue stamp must be affixed to the receipt in accordance with statutory regulations of Tanzania.
Dishonoured cheque must be returned to the customer for repayment preferable by cash/ banker's cheque.
Dishonoured cheque shall be debited back to debtor's account and credited to the bank account. All cheques issued by POTA which are not presented to the bank six months after issue shall be treated as stale cheques. After the cheque being stale, debit the bank account and credit the creditor's account to reverse the entry. Fresh cheque shall be issued after the claimant has returned the stale cheque.
5.3 DISBURSEMENT OF CASH
all disbursements of more than Shs.30,000 to be made by cheques pre- numbered by the printers. Any spoiled cheques should be eneradicably stamped cancelled and kept in proper numerical sequences so that all cheques in the series can be accounted for.
Cheques must be signed by any two persons, one from each Block.
AT POTA HEADQUARTERS
BLOCK A BLOCK B
Presedent Secretary General
Treasurer - General One of the deputy Vice Presidents so
Vice president appointed to operate the account
(b) AT REGIONAL TRANCEPARENCY
BLOCK A BLOCK B
Regional / District Chairman Executive Officer
Treasure one of the Vice - Chairmen
So appointed to operation the
(c) AT REGIONAL TRANSPARENCY WITHOUT AN EXECUTIVE OFFICER
BLOCK A BLOCK B
Regional / District Chairman Treasurer
One of the Vice- Chairman so appointed Hon. Secretary
To operate the account.
Signatories specimen signatures must be in file at the depository bank. None of the signatories should have duty of writing payment vouchers, handling cash and writing in the cash book. Signatories should avoid signing blank cheques. Before signing any cheque they should satisfy themselves than every supporting document and voucher is attached and is correctly drawn and authorised. All payment vouchers and invoices should be scrutinised for authenticity by relevant signatories and be stamped past for payment by Head of Accounts before the cheque is prepared. If the payment voucher is not properit shall be returned to the originator with comments. Cheque preparation must be after the invoices and payment vouchers have been properly authorised and approved.
(c) Only cheque drawn for replenishment of petty cash may be drawn " Pay Cash"
(d) Employees of POTA may be given open cheques on signature.
(e) All other cheques drawn must be crossed" Account Payee Only Not Negotiable"
(f) Any person collecting a cheque or posting / delivering them must sign for such cheque in the disbursement cheque register.
(g) Supporting document and voucher should be ineradicable stamped "PAID" at the time of writing cheque and "dated"
(h) When an authorised signatory is on leave or will be away from POTA for a considerable period, the Executive.
Disbursements should not be made out of cash receipt.
(j) Negligence is prohibited: recording of transactions, keeping keys for safe, cash boxed, strong rooms, offices and cabinets. When not in use al important accounting books and documents must be locked up in a safe place, preferably in a safe or strong room.
(k) Adequate insurance cover must be taken for cash in transit and in POTA'S premises. All employees in key positions and all persons with access to cash, cheques, LPO and other valuables must be insured against possible unfaithfulness.
(l) Replacement of cheques deemed to have been lost to take place after the bank has proved in writing that the cheques has not been paid and after POTA has instructed the bank in writing to stop payment of the lost cheque.
(m) Payments on copy invoices to take place after receiving a certificate of indemnity from the payee.
(n) Payments in cash to casual worker, seasonal employees and other employees to be acknowledge by signature or a thumb mark of the employee. Payments acknowledged by a thumb mark to be witnessed by a supervisor of the payee.
(o) Payment vouchers must have adequate details which shall include reason for payment, full reference of invoices and other supporting document .All material alterations on a payment voucher must be signed by the person making the alteration. Writing of payment voucher, cheques and all recordings in books of accounts and documents must be made in ink.
5.4 PETTY CASH
Petty cash book should be kept on imprest system. It is in columnar form with separate columns including those for expenses analysis.
The amount of the imprest to be fixed in instructions issued from the Head of Account on the basis of past experience and actual expenditures.
The cash to be replenished at the end of each week / month by an amount equal to the payments make during the week/month. Thus at nay time the petty cash on hand plus the amount of the petty cash payment vouchers for the current week/ month should equal the imprest.
The imprest to be made up each week/ month by drawing a cheque on POTA's bank carrent account. All petty cash payment vouchers must be signed by the Head of Accounts as authority for payment.
The cash balance to be counted at the end of each days by the accountant, initial and date the balance on finding it correct and is in agreement with the cash composition summary.
At the end of each month the columns are total and cross balance and posted to the ledgers, after summarising the " sundries" column as appropriate.
The petty cash fund should be under the control of specifically designed employee who should be held responsible for the correct operation and custody of the fund.
5.5 BANK RECONCILIATION
A bank reconciliation is a statement displaying the items of difference between the balance of an account reported by the bank and the bank account appearing on the cashbook of POTA.
The objective of preparing a bank reconciliation statement is to see if the bank balance on any one particular date agrees with the balance as is indicated by the bank columns on the cash book on hat same date of POTA after allowing for all the various reasons which usually go to causes a disagreement.
A bank statement is a record of POTA'S bank account that is sent by a bank showing the beginning balance, any increase and decreases that have occurred since the previous statement and the ending balance.
5.5.2 Reason for Differences.
The final balance shown on a bank statement is usually different from that shown in POTA'S cashbook, bank column. This difference is due to time lags, errors, or both:-
Cheques may have been drawn in payment of accounts due and credited in the bank column of the cash book but the same may not appear in the bank account, owing to their not having been presented to the bank for payment up to the date on which the two balances are compared.
Up - country cheques may have been paid into the bank and debited in the bank column of the cashbook but the same may not have been credited in the bank account, on account of the fact that they may not have been cleared.
Credit for interest on current account may have been given in the bank account, but no corresponding entry may have been made in the cashbook.
Debits might have been given in the bank account in respect of bank charges and commission, but the same may not have been entered in the cashbook.
Dishonoured cheques may have been debited by POTA'S bankers in the bank account, but no corresponding entries in respect there of may have been made in the cashbook .
5.5.3 Bank reconciliation Procedures.
To reconcile means to bring into agreement. Cash in bank account may be reconciled to a bank statement, or the bank statement balance may be reconciled to the balance in the cash in bank account.
However, it is best to reconcile both the cash in bank account and the statement balance to the correct amount of disposable cash at the reconciliation date with a schedule called two - part bank reconciliation.
Arrangement vary in practice, but the items that must be considered in a two part bank reconciliation are as follows.
5.5.4 Two - Part Bank Reconciliation Statement.
Bank Statement Book
Statement balance Account balance
+ Deposits in transit + Unrecorded receipts
- Outstanding cheques - Unrecorded payments
+ Bank errors - Returned cheques
+ Book errors
Correct disposable Correct disposable cash
Naturally, the correct disposable cash amount must be the same for both sides of the reconciliation.
5.5.5. Bank reconciliation Steps
Compare deposits shown on the bank statement with deposits that have been recorded in the accounting records. Any recent deposits that have not yet been reflected in the bank statement should be marked as deposits in transit. Also note nay errors that might have made in recording deposits.
Arrange in numerical order, the cancelled cheques returned with the bank statement, and :
Compare any cancelled cheques that were written in the preceding period with the outstanding cheques listed for the last bank reconciliation prepared. Note nay cheques that are still outstanding at the current reconciliation date.
Compare canceled cheques written in the period just ended with the cheques recorded in the accounting records, noting the outstanding cheques. Also note any errors that might have been made in recording cheque.
Prepare a list of cheque outstanding at the reconciliation date.
Identify any increases or decreases on the bank statement that have not already been recorded in the cash book. Increases and decreases for other than routine deposits and cheques will usually be keyed with special symbols on the bank statement.
Reconcile both the bank statement balance and the cash in bank account balance to the current disposable cash at the reconciliation date.
6.1 RECIVING OF INVOICE
For security purpose all in coming creditors invoices be delivered to the secretary of the Executive Director/ Executive officer who will date stamp the invoices and sort them into local creditors invoices and foreign creditors invoices.
The Local Invoices be delivered to the local creditors Accounts personnel and the foreign Invoices be delivered to the Foreign Creditors Account Personnel where the Original Goods Received Note and Local purchases Order copy are attached.
Each Creditor's Invoices is assigned an internal serial number and month for future reference and identification purposes.
After writing on the invoices the internal identification number, process it immediately through the Kalamazoo" one write system whereby the Remittance Advice, Creditors Sub - Ledger card (credit side) and purchases Day Book are written at the same time or process it through the computer accounting tally system.
After processing each invoice through the Kalamazoo system / Computer system stamp each invoice" POSTED".
6.2 CHECKING OF INVOICES
On receipt of an invoice, match this invoice ( which will give reference of the LPO number with a copy of the LPO ) to ensure that the purchase of goods / services is properly authorised. Then match the invoices with the original GRN to ensure that the goods were actually received by POTA.
The following point should be checked:
The LPO has been properly authorised by designated signatories.
The GRN is signed by the receiving store - keeper and Supplies officer and LPO be certified by the originator of the order.
The type of goods, quantity and quality of goods , invoiced are the same as those ordered and received.
The invoice prices of goods are the same as the LPO prices
The extensions (quantity x price) and additions on the invoice are mathematically correct.
Goods received have been entered in the stores ledger.
Where errors are not detected, the invoice be stamped " CERTIFIED " signed and dated by the creditors personnel. Only the original invoices should be processed for payment without a supplier's certificate of indemnity.
The certified invoices on which are attached the LPO and GRN be kept in the payable Box File numerically according to the invoice's internal serial number.
6.3 INVOICE QUANTITY LARGER THAN RECEIVED QUANTITY
When the quantity billed is larger than the quantity received as per GRN, it means that the supplier has over billed POTA. The supplier's invoice should be returned to the supplier for correct invoicing.
6.4 INVOICE PRICE HIGHER THAN LPO PRICE
When the supplier's invoice price is higher than the LPO price as per suppliers Proforma Invoice, the invoice should be returned to the supplier for correct invoicing.
6.5 ERRORS IN EXTENSIONS AND ADDITIONS ON THE SUPPLIER INVOICE
When the errors in extension and additions on the supplier's invoice lead to higher amount than required, raise a Debit Note in order to bring POTA 'S ultimate payment to the correct amount.
6.6 QUANTITY RECEIVED DIFFERENT FROM THE QUANTITY ORDERED
When the quantity ordered is more than the quantity received, note the quantity received on the LPO and then photocopy the LPO. Attach the LPO photocopy to the invoice and GRN and process the payment in the normal manner.
If the quantity received is large than the quantity ordered it means the surplus amount received has not been authorised by POTA and should not be accepted.
6.7 AN IVOICE WITHOUT AN LPO.
When an invoice arrives without an LPO after POTA has received the good / services, send the invoice to the Head of Account for seeking authorisation from the Executive Director / Executive Officer. After approval process payment in normal way.
6.8 UN- APPROVED INVOICE
An invoice will not be approved if there is no LPO and GRN and the concerned official testifies that the goods/ services were not received. This invoice should not be passed for payment . Write the word" not approved on the invoice" on the invoice and file it is in the unapproved invoices File.
6.9 SERVICE INVOICE
Any service purchase from a supplier is done by giving the supplier an LPO . Thus, on receipt of a service invoice, check the invoice for extensions and additions and match it with the LPO to ensure that the service purchase was properly authorised.
Ascertain that the service has actually been received by POTA before paying the invoice . This is done by requesting the concerned Official to give a certificate of receipt of service and approve the invoice for payment stamp the invoice" CERTIFIED" after giving it an internal serial number. Enter the certified invoice in the Purchases Day Book and Creditors Ledger. Then file in the Unpaid Invoices file.
Only original invoices should be processed for payment.
Where a duplicate invoice is processed for payment because the original invoice is not traceable , the supplier must give POTA a "Certificate of Indemnity" which has to be attached to the duplicate invoice.
6.10 INOVICES PAYMENT
It is necessary for POTA to pay its creditors promptly on due date so that they may continue to offer their goods and services to POTA.
Every week compare dates of the outstanding invoices with the credit terms extended by the supplier as indicated on the top of the creditor's ledger card, so as to identify those creditors balance which are due for payment.
Remove the invoices due for payment together with their supporting document from the unpaid invoices File and attached them to their respective Remittance advises according to suppliers.
Total the Debit and Credit columns of the Remittance Advice. Establish the amount payable to the supplies by subtracting the total debits from the total.
Stamp each invoices and payment voucher with PAID CHEQUE NUMBER AND DATE ".All payment vouchers should be serially numbered monthly by the payment accounts staff.
Record the cheque number, date and amount on the creditor Ledger Card.
(g) Prepare a daily creditor Payment summary and used this summary to post the Creditors Control Card.
(h)A cheque Payment Voucher be prepared for each creditor for the net payable amount. On the payment voucher be attached the remittance Advice the invoice the invoices, the LPO and the GRN. After being signed by the person preparing it the payment voucher be sent to the expenditure. Accounts for checking and then for approval by the Head of Account. After being approved the payment voucher be sent for cheque preparation.
6.11 PRO- FORMA INVOICE
Pro- forma invoice are price quotations sent by suppliers who demand payment from POTA before they supply the goods or services.
Proper control over such payment is necessary in order to ensure that the supplier provides the goods or services within the agreed period of time so that the POTA'S money is not lost or unduly tied up.
All pro- forma invoices must be supported by a properly authorised LPO and must be channeled through the Supplies Officer.
The creditors control Personnel to receive two copies of the proforma invoice together with properly authorised LPO and check that:
The LPO is properly authorised
The Pro- forma invoice prices agree with the LPO prices.
The extensions (quantity x price) and addition on the pro-forma invoices are mathematically correct. Any errors or differences detected should be cleared with the supplies officer before the proforma invoice is processed.
The Creditors Control Personnel to stamp on the two copies of the proforma invoices "certified," date, signature and designation" as evidence of his /her view.
The original pro pro- forma invoice and LPO be attached to the cheque payment voucher as supporting documents or the Head of Accounts approval
The creditors control personnel to complete the proforma invoices register and keep the copy LPO and Pro- forma invoices in their respective files according to numerical sequence and supplier, respectively.
The Goods purchased on pro-forma invoice be received in the normal manner by the store keeper.
The Creditors control personnel to receive a copy of the GRN from the storekeeper and match it with the copy LPO and proforma invoice for verification that all invoiced goods have been receive. Any short fall should be followed up immediately with the supplier and a copy of the debit note filed with the copy pro- farma invoice.
The received goods and debit note be recorded in the proforma invoices "Register by the Creditors control personnel.
When the goods/ serviced ordered by pro- forma invoice have been received fully the copy LPO and pro- forma invoices are to be retired by the Creditors control personnel:
As regards services, the service pro-forma invoice are to be retired by the creditors control personnel after receipt of certificate of service rendered. This certificate to be completed by the official of the unit which received service prepaid on pro- forma invoice which was supported by and LPO dully authorised.
Where a paid pro- forma invoice is not supported by a GRN or a certificate of Service rendered, the matter should be taken up by the Creditors Control personnel with the supplies officer and supplier.
6.12 SUPPLIERS STATEMENTS
(a) Normally, every and end of the month, various suppliers send statement of account showing all invoices issued by the suppliers to POTA and all cheques received from the POTA by the suppliers to POTA and all cheques received from POTA by the suppliers.
(b) The Creditors Control Personnel compares the supplier statement with POTA 's creditors ledger card for the Particular Supplier. Generally there should be no differences, but some ties differences occur and take the form of:
Invoice issued by the supplier which have not yet been received by POTA .
Debit Notes issued by the supplier which do not concern POTA.
Cheque issued by the POTA which have not been received by the supplier.
All the relevant information and documents required for the preparation of payroll should be sent to the Account Section before 10th of each month.
The Payroll officer should make sure that all such information and document are properly aouthorised by relevant officers before stating processing them on the payroll.
The payroll preparation work should commence by not later than 15 th of each month. The cheques should be sent o he bank on the 20th of each month for those receiving their salaries through bank and the pay day of each month is on the 25th.
All payments of salaries and wages should be made only to persons who are on POTA'S establishment and who have letters of appointment
Payment of salaries to bank account be made after obtaining written authority from the concerned employee
Overtime payment be made to the employees who have worked beyond the normal time after obtaining the authorisation of the Executive Director/ executive officer. The Head of Section has also to certify that the employee actually worked the tie shown on the overtime sheet.
All payment to casual labourers be based on casual labourers list approved by Head of Section and counter signed by the Head of Unit who supervised the work the casual labourers performed. Payment shall be by cash basis by the cashier.
7.2 PAYROLL ACCOUNTING
The Account Section to receive copies of all official letters affecting the salaries of the employees. The documents concerning the payroll are:
Letters of Appointment indicating the post, which the person is appointed, gross pay employee number, place of work, amount of annual increment.
Letters of temination resignation, retirement completion of contract.
Advice for stopping payment of salaries.
Advice for payment of half - pay
Approved over time sheets and other allowance.
Letters of reduction e.g loans imprest etc.
When the official letters concerning the payroll reach the expenditure Assistant Accountant, he should place them in separate file for than month, so that all the changes in payroll for that month can be in carpeted and facilitate future verification of payroll. In respect of new appointment the payroll officer should open an individual pay record that employee which should then be kept in the posting tray. Information on overtime payable will be transcribed at the timeof preparation of payroll.
All the information and documents effecting the payroll should be forwarded to the payroll clerk only after they have been scrutinised and in9itialled for correctness by the concerned accounts personnel.
On the basis of the previous payroll, and of the documents pertaining to salaries for the month kept in a separate file, the payroll person should prepare the payroll on POTA computer salaries and Wages sheet.
The payroll should be prepared separately for each section and a financial summary be prepared.
The Accountant concerned should check the payroll sheets with the relevant documents and approve by initialing the sheet and final summary.
She/he should also check the individual pay Records (IPR) to insure that the monthly totals of all these cards agree with the final summary sheet figures. In case of differences IPR figures should be checked with individual pay - slip figures.
The account concerned should compare the current month's salary figure with the previous month's figure and any differences should be reconciled to make sure that the payroll is in order.
A Payment voucher should be prepared for the net pay as per the summary sheet and the previous month's salary Control Account " Simultaneously, from the payroll summary sheet a journal voucher should be passed as follows:
Dr. Basic Salary Account
Dr. Over Allowance Account
DR. Any other allowance (to be specified)
Dr. Contribution to Staff Pension Scheme Account (by Employer
Cr. P.Y.E. Account
Cr. Personal Tax Account.
Cr. Pension Scheme Account.
Cr. TFTU Check - off Account.
Cr. Staff NIC Policies Account
Cr. Mid - month Salary Advance Account.
Cr. House Rent Recovered Account
Cr. Staff Advances Account
Cr. Salary Control Account.
Dr. Bank account with unclaimed salaries / wages
Cr. Salaries / wages account payable as reverse entry
The payment voucher should first be approved by the Expenditure Assistant Account concerned and then it should be submitted to Head of Account along with the payroll sheets and the journal voucher, for his / her final approval.
Cash and Bank section should prepare two cheques one in favour of the Bank for the amount as per the list of persons with their net salaries, Bank Account and the other in favour of the cashier for the amount required for disbursement in cash.
The cheque along with the list of employees should be sent to the Bank not later than 10 days before the last day of the month, with instructions to credit the amounts to the respective accounts of the employees.
In case of salaries paid in cash the cashier should draw the amount as per the denominations mentioned in the payroll and the cash should be put in the individual pay slips. This should be done on the day prior to the date of disbursement of salary. Disbursement of salary should be done 5 days before the last working day of the month .
Payment should be made only against signature or thumb impression of the employees after satisfactory proof of identity of the payee. In the case of temporary or casual labourers should be paid in the presence of the sight incharge for identification.
In case an employee is sick POTA shall give the salary to the person authorised by the sick person in writing
The original receipt and the list of the staff will be sent to the salary unit and the salary unit incharge will maintain a register for " Unpaid Salaries" He will check the payroll sheet for identification and will enter the name employee number, amount receipt NO. And period of wages in that register for each receipt and keep blank columns for voucher No. and date of payment.
Whenever such salaries are claimed after that week , the amounts should be paid out by a separate petty cash or payment voucher, with the approval of the Head of accounts. The Head of Accounts should check the details from the register maintained by payroll officer before approving such payment vouchers by signing and should make sure that blank columns in the register i.e voucher NO. and date of payment are filled in to avoid duplicate payment.
The amount should be debited to the Unpaid Salaries
Monthly outstanding figures should be worked out from the register and checked with the balance of the ledger Account and any difference should be reconciled.
8.0 FIXED ASSETS MANAGEMENT.
The purpose of the fixed Assets Management is to establish Fixed Assets Control System the procedures to be followed and the documentation to be used in managing fixed assets.
Fixed assets are tangible assets owned by POTA . They are acquired to facilitate carrying out of work in POTA over a number of years. The reduce in value through depreciation, tear and wear. They are listed on the Balance Sheet according to the degree of Permanence starting with the most permanent item possessed.
POTA'S fixed assets are categorised into the following group:
Office furniture and fitting
Improvement on land e.g. roads
The responsibilities for fixed assets management rests with the following officers.
The Head of Accounts is responsible for ensuring that the fixed assets are adequately and timely insured and are properly depreciated.
The Supplies Officer has the overall responsibility of ensuring that the existing fixed assets are properly kept, adequately insured and ordered items received are in accordance with specifications.
Executive Director/ Executive Officer is responsible for ensuring that all fixed assets under his/ her custody are properly maintained.
8.2 MAIN DOCUMENTS
The main document to be used for managing fixed assets are:-
Request for capital expenditure
Vehicle record card
Plant/ Machine/ equipment record card.
8.3 IMPORTANCE OF FIXED ASSETS CONTROL SYSTEM.
It is vital for POTA to install and operate sound fixed assets control system because such a system provides information that facilitates:
Knowing the existing assets
Knowing the available capital and the related capacity costs.
Accumulation of depreciation costs by cost centres
Taking of appropriate insurance coverage for fixed assets
Making of realistic Capital Expenditure Budget
Establishment of preventive maintenance system
Making of sound capital items replenishment decisions.
Ownership of fixed assets should be carefully planned because it is capital expenditure.
Ties up large sums of money for many years
Unfavorable effects of badly made decisions exist for many years.
Increase the volume of production / sales needed to cover overall costs. That is, break - even point taken longer to reach.
Gives rise to subsequent charges against profit. These inreased costs included:
Fuel oil cost
Interest on borrowed funds
Repairs and Maintenance costs
Loss arising from obsolescence when an asset though still serviceable , is no longer required because it has been superseded by an improved model due to technological advancement.
8.4 CAPITALIKSATION POLICY
All purchase and acquisitions of fixed assets of more than Shs.250,000/= in value must be capitalised.
The capitalised costs of a fixed asset be debited to the appropriate fixed assets category when the ownership title of the asset passes to POTA by purchase from the supplier.
The capitalised costs of a fixed assets are the original purchase price plus all costs which are necessary before the asset is delivered to the appropriate location and made into condition for its functioning.
For purchase of management control all fixed assets of up to Shs. 250,000/= value be written off to expense on purchase but be recorded in the uncapitalized fixed Assets register until they are disposed of through sale , scrapping or destruction.
8.5 ACWUISITION OF FIXED ASSETS
The purchase of fixed Assets should be for economical reasons, among which are:-
Replacement of obsolescent items
Replacement of worn - out items.
Reducing of operational costs
Improving of efficiency of various activities
Increasing of capacity.
Expansion into new areas
Replacement of destroyed items
Parity with competitors
Improving working conditions
Rectification of capacity imbalances.
The factors to be considered when deciding to acquire fixed assets to include:
Suitability of the new fixed asset for:
Existing work requirements
Utilising substitute material
Idequacy of the new capacity for:
Existing work requirements
Relationship with existing fixed assets
Degree of quality attainable
Reliability of operation
Safety of operation
Change in costs which will be necessitated by the new asset
.Change that will necessitate
Training of workers
Labour force requirements.
Physical structure of the building
Alterations to utility services, such as water and electricity
Location of fire fighting facilities.
Project are long term construction activities such as storage buildings, office buildings, roads, dams, etc.
Payment to contractors be made on the basis of the contractors projects progress payment invoices supported by certificates from the Architect/ Consultant certifying the stage of completion of the project.
The fixed asset personnel to sign and date the contractor's invoice before payment after reviewing it for consistency with the previous progress payments, checking the calculation of retention monies and deduction of advance payments. Any detected over invoicing to be corrected by a Debit Note.
A project Record Card be maintaned for each project showing main information which include.
Consultant name / Project engineer's name
Contract starting date.
Contracted completion date
Date of each invoice
Reference number of each invoice
Date of each Architect / Consultant certificate
Details of the progress payment such as down payment,consultant's fee, percentage completion payment.
Percentage of the Project's completion stage
Amount of the Retention Money
Net amount payable
Commutative total payment
Payment voucher reference
When the project is completed an Architects/ Consultant's by POTA . The accounts section will then open a fixed asset account and by journal entry, transfer the total value of the project as accumulated by the project's record card to the appropriate fixed assets card will be opened in the fixed assets register. As appropriate insurance cover will be calculated on the asset from the date of completion.
8.9 FIXED ASSETS CONTROL REGISTER.
It is very important for POTA to know all the fixed assets possessed with their economic life because such information facilitates:
Carrying out a physical verification of fixed assets
Calculation of depreciation cost for use in the Balance sheet and profit and loss statement preparation.
Reporting of theft, damage, fire and accident to the police and insurance firm.
Taking of insurance covers
Changing of depreciation to department
Making replenishment decisions.
A separate fixed assets card be written for each fixed asset purchased and project completed and put into use.
Cards of each category of fixed asset be filed together according to year of acquisition and within each category, the cards be filed location wise.
The fixed assets register comprises of separate cards for each major individual fixed assets such as tractor, plant machine, vehicles and building. Sheets of paper properly marked are used to separate the cards relating to each predetermined class of fixed assets in order of date of acquisition. For example, assets bought in 1990 are grouped together and those bought in 1995 are also grouped together. Each fixed assets card contains aminimum of the following information
Authority identification code
General Classifcation of the asset
Acquisition/ Purchase date
Reference of purchase
Reference of acquisition authority
Acquisition value / purchase value
Revelation authority reference
Date of revaluation
Physical verification date
Latest condition Movement and transfer voucher references .
Second - hand / new
Insurance policy date
Period covered by insurance
Estimated economic life
Installation date and cost
Estimated salvage value
Disposal date, gain or loss
Cost of annual overhauls
Details of the Architect
Reference of building drawing and bill of quantities.
Floor, wall roof materials
Distance from one building to another building
Area and cubic space
Maintenance / repairs required.
8.9 FIXED ASSETS DSPOSAL FORM
Every fixed asset has a useful life after which it deserves to be scrapped because it is no longer economical to operate. Some fixed assets are scrapped before reaching their economic life because of damage caused by accident, careless operation and due to lack of preventive maintenance. Whicheve3r reason leading to its disposal authority of the executive Council is required. Normally the management initiates the deposal proposal and the external auditors ratify the scheduleof the assets to e disposed before the council gives its authorisation. Adequate justifiable reasons should be given for declaring a fixed asset obsolete or unserviceable and where possible they should be supports by professional certificates.
When management proposes to scrap a fixed asset, it is required to complete a fixed Asset Disposal From which should contain a minimum of the following information.
Manufactures reference number
Authority identification number
Date of purchase or acquisition
Written down value
Insurance policy reference, insurance value and premium
Reasons for disposal
Professional disposal certificate reference and date
Proposed method of disposal if sale by public auction
Cost s of disposal
The effects of disposal if sale by public auction
Cost of disposal
The effects of disposal on labour, operations inventory of raw materials and efficiency
List of spares held for the asset, their value and proposal for their use or disposal
Date of disposal
Estimated replacement cost
Period of replacement
Full address of the purchaser of the disposed asset
Amount for which the asset is sold
Date and reference of the issued received cheque
Date and reference of the issued receipt
Reference and date of the journal voucher recording the disposal.
8.10 FIXED ASSETS RECORDS.
Record keeping for plant machines equipment buildings and furniture are important for accounting, controllership insurance transfers, location, maintenance, identification,assigning of inspection schedules, for listing of replacement spare parts to be stocked and for knowing of capacities.
Among the various fixed asses documents to be kept the vital ones include;
Servicing and maintenance manuals
Fixed assets registers
Uncapitalised fixed assets registers
Spare- parts codes books
Address of manufacturers
Address of suppliers
Price lists of spare parts
List of orgnisations using the same plant and machines
Files of authority for acquisition transfer disposal
Fixed assets valuation report
8.12 FIXED ASSETS MOVEMENT REGISTER.
the executive Director / Executive officer has the responsibility of recording movements of fixed assets from one area to other area and firm to employees.
The record is important for :
Knowing the person responsible for any damage caused on the asset and hence responsible for cost repair
Knowing where the asset is during physical verification task.
Facilitating allocation of operation costs among cost centres.
all fixed asses be transferred or borrowed after obtaining permission in writing from the administration. The person is charge of the fixed assets to record the movement of the assets in the fixed Assets Movement Register before releasing the items to the rightful borrower. Negligence of issuing the assets without recording them need to be taken serious by the management Committee.
The fixed assets movement Register to contain the following information:
Name of borrower (Transferee)
Name of custodian (Transferee)
Address of borrower
Description of item
Authority identification code
Manufacture's identification reference
Manufacture's identification reference
Plesent location of the item
Place of use (New location)
Work to be done (reasons for transfer
Signature of receiving
Name of the ledger
Condition of the item
Date of return
Gate pass reference and date
Fixed asset Transfer Note Number and date
Signature of storekeeper
Signature of returning person.
8.13 INSURANCE OF FIXED ASSETS
POTA should adequately insure all its important assets against risks with the right type of insurance cover.
In order that POTA can avoid loosing its insurance claims , the following be adhered to:
Have a person who will be in charge of fixed assets and insurances matters.
Have an up to date sketch map of the entire building complex showing:
Distance from one building to onother .This is because spread of fire is a function of distance in between the building .
Construction materials of roof, wall and floor of building .
The uses of each buildings.
Type and quantity of properly kept in each building and room.
Hazardous items to be kept in separate places with apporopriate fire precaution.
Keep in safe custody ownership documents of various types of fixed assets and current assets.
Install fire fighting equipments in call building. Such equipment be serviced by fire experts at appropriate time intervals.
Maintain insurance records showing:
Rate of premium
Name of insurance cover
Date of insurance policy number
Period covered by the insurance
Date of renew of the insurance
In case of motor - accident the following to be furnished to the insurance firm:
Sketch - map of the place of accident
Police inspection report
Garage report of estimated repair cost.
Insurance company's assessor's report.
PEOPLE'S ORGANIZATION TRANSPARENCY AGENCY
QUARTERLY BALANCE SHEET
BALANCE SHEET FOR THE …………………………….TO ………………..
ASSET EMPLOYED BOOK VALUE SHS. DEPRECIATION SHS. NET VALUE SHS.
· Leasehold land
· Office equipments