Strengthening accounting and financial reporting in Saksham program

Caritas India Program Finance staff spent two days with the Saksham partner accountants this week. It was more interesting than expected; funds are the lifeline of the humanitarian work where finance people ensure proper inflow and outflow of energy from one end to the other.

The two days (13-14 June 2022) finance training cum orientation was attended by 15 accountants and 4 Caritas India staff at Navjeevan Renewal Center, Delhi to understand donor compliance and financial reporting.

It was Nishant Jose, the Program Finance Associate who shared about the donor compliance and explained with samples, the project number, authorization letter, grant letter, cash flow request and receipts from donor etc. He explained the fund request sheet and highlighted areas where mistakes occur. Queries related to spending funds and bank interest etc., were addressed by the team.

Nishanth also conducted a group activity by giving tasks of procuring a laptop and planning a 2-days exposure visit to provide live orientation on documentation requirements. The participatory group work was successful, and every group member filled the gaps and requirements for smooth auditing.

Another highlight: Monthly Finance Report (MFR). One of the important tasks of sending the MFR on time, was stressed as it is vital for the smooth functioning of the project. A general discussion took place on different kinds of registers i.e., Daily movement, attendance, stock, asset, salary, dispatch, logbook, advance, PF, petty cash, cheque issue, leave record etc. maintained at the partner level.

Nishanth gave an overview of FCRA, IFSC, PAN and GSTN along with a short group activity on the procurement process. He also shed light on auditing compliances like audit fees, tenure of organization auditor, journal entries and provisional entries, raising within diocese invoices, etc. He also put forth some of the common mistakes related to scanning of documents, calculation mistake in the audit report, the difference in closing and opening statements, different reporting and project periods, donor name and receipt date and payable entries in the audit report.

Jancy Matthew, Lead of Program Finance in Caritas India took the session on developing an understanding of the project objectives by the accountants, so the expenditure against line items is booked properly. Citing various case studies, she explained the requirement related to a proper bill. She insisted the finance team to be abreast with the changing rules and regulations.

She shared a few FCRA changes and amendments in the recent past and its implications for the partner organizations. Additionally, she spoke on the importance of getting FCRA certificate renewal status for the continued functioning of the project. She also spoke on limiting the administration expenditure and ways to keep it under 12-15% of the receipts during the financial year. Moreover, she told about the exceptions under administration expenses. She clarified on strictly adhering to the budget and not overshooting.

Best practices like, no cash payments above ₹ 2000, no mixing of FC and IC funds, TDS compilation, proper and regular documentation of interest received from the bank, minimizing advances, petty cash book, and DIP-based budget were shared with the participants. She also explained in detail various documentation needed for activities like monthly meetings, hiring consultants, procurements, field visits and hiring resource persons etc.

The orientation concluded with an enhanced understanding of the financial implications and adherence based on the program budget and donor requirements.