Finance, procurement and asset policies · 01
Financial management policy
Governs how money moves: budgeting, authorisation, payment, recording and reporting.
Governs how money moves: budgeting, authorisation, payment, recording and reporting.
Address the budget cycle and who approves it; the chart of accounts and the accounting framework applied; banking mandates and dual authorisation with thresholds; the separation of the person who requests, the person who approves and the person who pays; petty cash; credit control and write-offs; month-end and year-end procedures; the audit or independent review arrangement; and tax compliance.
The control that fails most often in a small organisation is separation of duties, because there are not enough people — say so honestly and put a compensating control in writing, such as an independent monthly review of the bank statement by someone outside the payment chain. A policy that pretends to a segregation the organisation cannot staff is evidence against it.
The law it sits under
What governs this instrument.
For a public entity the framework is the Public Finance Management Act 1 of 1999 with the Treasury Regulations; for a municipality the MFMA. For a company, sections 28 to 30 of the Companies Act 71 of 2008 govern accounting records and annual financial statements, and section 29 sets the standards financial statements must satisfy.
Related pages, tools and documents
Where this instrument sits in the wider set, and the engagement that produces it.
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