Types of Checks to be adopted for passing Vouchers for Payment – NGO Financial Management Policy

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Below is a list of checks need to be adopted by NGOs in their financial management policy for passing vouchers and receipts of payment:

“7.2 Checks to be done before passing a voucher for payment

a) Whether required supporting documents are present

b) Checking the supporting document.

c) Payment should be made only against a valid invoice in original.

d) Approval by concerned person & authorized signatory.

e) Verification of accuracy in accordance with the order/letter/other documents if any.

f) Verification of numerical accuracy

g) Checking of advance payments made if any or details of part payments made if any.

h) Making sure that payment has not being made twice for e.g., by making all extra copies of bills as “extra copies” and by making all paid vouchers as paid .

i) Ensure that payments are made on time.

j) All major payments should be made by checks. Payment by cash should be restricted to minor purchases and where inevitable.

k) For any payment exceeding $______the receiver’s signature is to be obtained on a revenue stamp affixed to the voucher. If the recipient sends a receipt, then a revenue stamp needs to be affixed on the voucher and defaced by a double line across the stamp.

l) It should be ensured that the vouchers are not overwritten. In cases where it is necessary to correct the figures, the figures originally written should be scored out and the new figures entered. The person preparing the vouchers as well as authorizing payment should then initial the corrections made.

7.3 Supporting document for vouchers

a) All bills should be in original. Payment should not be made against a quotation, Performa bill, copy of a bill or a fixed bill.

b) All supporting documents should be authorized by the person initiating the payment.

c) It is the responsibility of each person who is responsible for buying goods/ services in the project office to check each bill for its validity. i.e., check that the description of items, number of items, cost per unit and total cost, date of the bill and name of payee (i.e. name of project ) are accurate. Payments should be made only after checking these details.

d) Any mistake/ discrepancy should be pointed out to supplier /shop keeper before payment and if an alteration is necessary, the supplier /shop keeper should make the change right then and put his/her initials and date. If this results in a change in any of the amounts on the bill it is particularly important that supplier /shop keeper clearly writes himself on the bill the payment received in words. The management reserves the right to accept such altered bills or not. A better option would be to obtain a fresh bill if possible.

e) No other alteration in the bill by project staff is normally permissible. If at all an alternate is unavoidable e.g., a mistake in the date by supplier which was not corrected such a bill should be brought to the attention of Head of the project who should change it and initial it and a note should be put on the bill why alteration was necessary. The management reserves the right to accept such bills or not.

f) Invoices should only be in the name of the organization.

g) Where bills are in local language, please indicate briefly in English the purpose /item on the bill.

Supporting documents for invoice validation

7.4 Checking Output

a) The input of all invoices be checked for completeness and accuracy. The purchase journal report will be generated and this will enable these checks to be carried out.

b) The Accountant must check the invoices posted against the Purchase Journal Report and ensure that the general ledger allocations and other invoice details are correct. Where the accountant identifies that an error has been made, the error on the listing should be circled and the correction initiated and initialed.

7.5 Approval of Invoices

a) The finance/accounts manager prior to processing should approve all invoices.

b) The Accountant must ensure that all invoices have been authorized by head of the organization /CEO/Project Director and head of department. A week time will be allowed for approval.

c) The head of the relevant department must ensure that the invoice is sent to the Accountant within a week of receipt of the invoice. Once the invoice is approved it is sent to the Accountant. If the finance manager is not satisfied with the invoice and cannot approve it for payment, it should be regarded as a disputed invoice.

At the end of the month the Accountant should agree the balance on the control account to the supplier’s listing. If there is any difference, reconciliation should be prepared. The Accountant must also ensure that a monthly reconciliation is done between the General ledger balance and the supplier’s statement of account balance. The reconciliation has to be prepared and reviewed on a monthly basis and the file maintained by the Accountant.”

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