Financial management question (non profits)

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The exercise consists of 4 different case studies and a total of five questions on which you are required to provide your comments

 

It is suggested that you read all the parts first and divide your time so that you complete all the exercises in the allotted time. Please ensure that you attempt to answer all five questions.

 

Please be specific and to the point in your responses to questions. Kindly limit your responses to bulleted statements.

 

Scenario 1

 

During your induction your organization’s Country Diretor briefs you on a new initiative, being that of “first time right”. This is an initiative to ensure the Country Program is able to deliver on its objectives first time right. They mention that it will be one of your objectives to do an assessment to enable the development of a plan to ensure a project is able to deliver first time right in one year’s time on all areas related to finance

 

Question 1. Please explain the approach you will take to do the assessment

 

Your assessment delivered the following three key areas of concern:

§Project Finance Assistants have too many priorities resulting in an approach where they neglect those areas where they know the HQ Finance will review and correct any errors.

§Project FAOs and their Assistants lack confidence and a structured approach to their daily tasks resulting in inadequate financial controls and slow delivery on organisational and donor requirements

§Standard Operating Procedures are not adequately observed leading risk exposures, budgets overspends and inability to meet donor requirements.

 

Question 2. Please explain how you will address these areas of concern.

 

Scenario 2

 

It is Thursday, you come into the office, planning to work on a report that must be sent to the Regional Finance Manager for review and onward sharing with the donor.The deadline for sharing this document was Wednesday evening and you are already late.As you start working on the report, you receive a call from the Finance Manager, reminding on urgent submission of the backup documents for 2012 external audits and today is a deadline. As you put the phone down, you receive a call from the Country Director, that a proposal submitted to another USAID agency to supplement NRM grant has been approved, but the agency has requested some clarifications on the staff budget and a reply is requested before close of business the same day.You have been one of the primary persons who has developed the budget along with the Project Manager hence, you are tasked with leading the process as receipt of the grant will be critical for the project.Finally, you receive a call from the Finance and Administration officer of your largest sub grantees, notifying you of a major accident involving one of the office vehicles in the field and project staff have been hurt.

 

Question 3: Please fill in the table below as to how you would prioritise the above tasks, and give a brief reason why in the adjacent column

Task Priority

Task

Reason why prioritized in this particular sequence

1

   

2

   

3

   

4

   

 

Scenario 3

You have engaged in a review of a sub grantee with a budget of USD3M Budget Program and realise the following:

 

  • StaffBusiness advanceshave suddenly shot up in the last 4 months to6 times the usual threshold
  • Almost all the staff including the Program Director and Accountant are on regular salary advance and additional advances awarded before clearing of the previous ones taken.
  • On review of the staff and business advances accounts you realize that some staff have credit balances.
  • Project expensesrecorded in the ledgers keep on fluctuatingmonth after month
  • The Petty cash account shows increasing pattern in the last 3 months without prior approval or knowledge of your office.
  • The sub grantee has spent only 60% of the available project implementation funds with a month to the end of the grant.
  • Major payments have been made in the last one month, amounting to almost 40% of all the expenses recorded in the year.

 

You as the Finance Officer are aware that the funding is ending in the coming months and have been in constant discussions with the Project Manager and the Finance officers of the pressure from the Donors to accomplish all the objectives and spend all the funds.

 

QUESTION 4

Questions:

  1. Outline the weaknesses in the system and recommend changes to address these challenges.
  2. Prepare a ToR for your visits to carry out an investigation showing the methodology you will use in this assignment.

 

Scenario 4: Donor Close out

 

The USAID grant for one of the education programmes will be ending in March 2013.

 

5. What Considerations would you as the Finance Officer keep in mind before;

ØBudget revisions.

ØDonor reporting.

ØExternal Audit.