Last quarter financial preparations.
Posted on 07 October, 2022 at 16:55
By Passmore Muringai
As we get into the last quarter
of 2022, most of the projects will be
coming to an end . However, year-end is a perfect time for finance people to
perform some of those tasks that nobody else thinks are important. During the
peak of programme implementation, it is difficult for a finance person to
convince their non-finance superiors that she/he needs to also prioritise
supplier reconciliations, tax position etc. All the boss wants to know is “Do
we have enough money to go for the field.” All else is trivial at the
time. Now that the programmes are on
hold as people are ready to go for holidays, you can spare a day or two just to
clean up these “trivial” things.
Inter-grant Reconciliations
Again, in the heat of programme implementation, funds dedicated for a
certain project or the endowment fund or administration account may be diverted
for another project (ideally upon official authorisation by the donors
involved). In our internal audit and grant review work, we have noted that it
is a normal weakness among development organisations that these inter-grant
balances are not reconciled.
It is necessary to extract all the inter-grant and administration
transactions and reconcile them to ensure that by year-end, the expenses
incurred in the projects tally with their respective outflows from the bank
accounts. Inter-grant transfers may need to be done before year end to
regularise these positions.
Taxation Considerations
Save for only a handful, the majority of non-profit organisations only
have to comply with employee tax: Pay-As-You-Earn (PAYE). It is important to
ensure that the organisation’s PAYE position is intact before proceeding to the
next fiscal year.
The first task is to confirm if the organisation’s records tally with
the Zimbabwe Revenue Authority (ZIMRA) system. A PAYE statement for the
organisation can be requested from Zimra and this is compared with the
internally generated schedule of taxes due and paid. In most cases, we have
seen that there are issues where some returns may not have been captured into
the Zimra system, particularly those that require manual inputting during times
when their online system experiences challenges. It would be necessary for the
organisation to make copies of any outstanding returns and submit to Zimra to
ensure parity between internal records and Zimra records.
Consolidation
For most of the year, accountants in non-profit organisations are
pre-occupied with project reports and other donor reporting requirements. It is
important for all the projects to be consolidated to produce organisational
financial statements. Although the organisational financial statements are
usually due by the end of the second month, it is good to have created a draft
which will only require minor adjustments.
Audit Preparation
As we enter into the 4th quarter finance people need ensuring
that all their documents are in place and ready for audit, since some donors
will do some audits at the end of each project as procedure. As we step in the
4th quarter there is need to make sure all the documents are
properly filed, payment voucher fully supported
if there are missing supporting document there is need to obtain the
documents such as invoices , receipts etc.
