FINANCIAL REPORTS: A speaker from Gemawan Association, Sri Rianti, invited treasurers from every institution which is a member of Women’s Consortium and Life Sustainability of West Kalimantan, MCA Indonesia 2016/2017 program to make good and accountable financial reports at My Home Hotel in Sintang, Thursday (18/08/ 2016). Photo: Mahmudi/GEMAWAN.
A community Development Organization, Swandiri (Gemawan), hosted the “Women’s Consortium and Life Sustainability of West Kalimantan (Kalbar)”. Especially in the 2016/2017 Indonesian Millennium Challenge Account (MCA) program.
This women’s consortium consisted of Gemawan association, Dian Tama Foundation, Borneo Women’s Resource Development Center (PPSW), Khatulistiwa Woman Journalist (JPK), and Simpai Kapuas.
As the host, Gemawan association provided education and training within the framework of Program Implementation Preparation of 2016-2017 MCA-I at My Home Hotel in Sintang, 18-22 August 2016.
In addition to women’s empowerment management in increasing their economic capacity and resources, Gemawan association also provides financial report training to treasurers of consortium members and special treasurers in the work area of the program.
The work areas of the Women’s Consortium and Life Sustainability of West Kalimantan 2016/2017 are in Sintang and Kapuas Hulu regencies. Due to the large area and for the effectiveness and maximum work, Kapuas Hulu was divided into two zones, termed KH 1 and KH 2.
“We are experienced in implementing grant programs from Asia, European Union, and America. Now, the reporting of MCA Indonesia from America is quite strict. Therefore, we hope that the fellow treasurers in every institution of consortium member understand and comprehend it,” Laili Khairnur, Director of Gemawan association, hoped when opening the material for financial reports.
“However, this strict reporting system makes our fellows in the finance department of Gemawan association become more careful and accurate in their work. Moreover, we hope that the treasurers from Women’s Consortium member institutions of MCA Indonesia program will be more prepared to make good reports since the grantor has its own financial reporting mechanism,” Laili Khairnur suggested.
For example, Laili Khairnur continued, if the expenditure is above 5 million rupiahs, then MCA Indonesia asks for three bidders (people who make offers). As a result, the procurement of a joint secretariat office in Kapuas Hulu, especially in Tempuai which is in the middle of the work area, suddenly cannot be done quickly because the cost is above IDR 5 million.
This is because the host (Gemawan) has to open three bidders to prospective providers of representative house service, so that it can become a joint secretariat of 2016/2017 Women’s Consortium and Life Sustainability of West Kalimantan.
“After three homeowners have successfully made the bids, then the one which is eligible for approval will be selected referring to the standard of MCA Indonesian. So, our fellows who have started the work as of September 1, 2016 are expected to be patient, while waiting for the disbursement of funds from MCA Indonesia,” Laili Khairnur asked.
“This is where the treasurers from the consortium member institutions have to be careful and understand the mechanism set by MCA Indonesia. This is because early on September 1, 2016, we have started working. Gemawan as the host was pleased to first cover the cost of program implementation for the fellow consortium members, while the funds from MCA Indonesia are being disbursed,” Laili Khairnur added.
After giving the opening remarks, it was then continued with the core material regarding the procedures and technicalities of the financial reporting system particularly from MCA Indonesia, presented by Sri Rianti, treasurer coordinator of Women’s Consortium and Life Sustainability of West Kalimantan 2016/2017, for the MCA Indonesia program in West Kalimantan.
“Our program will be conducted for 17 months and the treasurers will make a report every month. I was trusted by the consortium to be the coordinator of the report. I used to be an auditor at an NGO (non-governmental organization) and this is the third time. Previously, I was in Jakarta and Bogor. Because West Kalimantan is also my hometown, I wish to help you all,” Sri Rianti, who is usually called Mak Tam, said.
Mak Tam has sufficient experience in auditing financial reports and is also experienced in project management. “Besides detailed, it was also complicated. If there is no evidence when going to the field, we will not get the next program,” Mak Tam recalled when becoming an auditor of an NGO.
“If in the running of the work program, there are those who do not understand, Gemawan association as the host of the women’s consortium is ready to assist you at any time. As the host, Gemawan association will collect monthly financial reports from the treasurers of the respective institutions of the consortium members to MCA Indonesia,” Rianti said.
Mak Tam, who has travelled working as an auditor of domestic and foreign NGOs, explained that in the administration and financial management manual, there are allowable and non-allowable costs in the details.
Then, there are entry and reporting, reporting administration and grant requests, petty cash, procurement of goods and services, advance and settlement, human resources regarding contracts, salaries, and honoraria, fixed asset registers, taxation, and financial review.
In financial report which is allowable, the conditions are necessary, allocable, reasonable, and be accounted for. While the non-allowable financial report covers the purchase of land, buildings, property, vehicles, heavy equipment, and then military funding and so on. It also includes entertainment expenses, and promotion costs without obvious benefits.
Other non-allowable costs are salaries or honorariums to active civil servants (PNS) or local officials, including reimbursement of transport or per diem or excessive accommodation, gifts, gratuities and donations, any payments to political parties or public office campaigns.
The funding of MCA Indonesia is also prohibited from financing the purchase of alcoholic beverages, cigarettes, or cigars, paying fines or bad debts, international travel expenses unless related to program mobilization, direct taxes or direct support on tax debts, miscellaneous or unexpected costs.
It is also prohibited from unreasonable salary payments or compensation grants to employees without being supported by timesheets and salary reports, unnecessary advertising costs for grant achievements, the purchase of souvenirs or tokens of appreciation, police clearance, annual costs for illegal or unlawful activities.
“Financial reporting is divided into two, monthly and quarterly reports. Monthly reports are in the form of bank book, cash, management reports, advance control, grant reconciliation, and variance analysis. Meanwhile, quarterly reports are in the form of monthly reports, quarterly variance analysis, and quarterly reports,” Mak Tam said.
She explained that grantee partners are required to properly document and keep all financial and program documents properly, during and after the program period until the needs for audit are completed.
Grantee partners are required to submit to MCA Indonesia the storage location of the hardcopies of all documentation or reports related to the program.
The schedule of monthly financial reporting is on the 5th of every following month, while the quarterly reporting is on the 10th of every following month.
“Therefore, we hope that the treasurers in the program area coordinators as well as in each consortium member institution can submit reports to the host, at least a week before the deadline of host report to MCA Indonesia. So that if something is missing in the report, the host can immediately dispatch a team to help you,” Mak Tam said.
Evidence of receipts, she continued, which are collected properly can be sent via delivery services.
“As explained by Director (Gemawan) Laili Khairnur, the maximum petty cash is IDR 5 million which can be adjusted to the needs of each grantee. Petty cash holders must be appointed by a financial manager and must maintain the fund security, accurately record all petty cash transactions, ensure the balance in the records is the same as the actual cash, and ensure the fund adequacy by replenishing it if needed, ” Mak Tam said.
Grantee partners are required to carry out cash counts (calculation of petty cash funds) periodically and make documentations in cash count reports or petty cash calculations. The use of petty cash is only allowed for operational needs and is not allowed to pay salaries or program travel costs (monitoring).
“Petty cash funds must be stored in the petty cash box. The maximum use of petty cash in one transaction is IDR 1 million. If there is a cash payment of more than IDR 1 million in one transaction, it has to previously obtain approval from GPM. The risk is that if it is not approved, the partner must return the fund difference, ” Mak Tam revealed.
Mak Tam explained that in the procurement of goods and services of MCA Indonesia, they provide three categories of transaction value. Firstly, for less than IDR 5 million, the procedure is direct appointment.
Supporting documents, notes or receipts are attached with IDR 6 thousand. The note must contain detailed information, such as the number of units, the price per unit, the goods purchased as well as the vendor (vendor), such as the name of the store, address, telephone number, and stamp if available.
Secondly, the transaction value is IDR 5 million to IDR 200 million. The procedure is competitive bidding with three comparisons.
The supporting documents, original price offer from three vendors, summary bid (comparison of each vendor’s offer), purchase order, original invoice, note or receipt with details of purchase of goods and vendor data, proof of transfer, a statement if the selected vendor has no relationship with the company or management.
Thirdly, the transaction value is above IDR 200 million. The procedure is an open local and/or national tender.
The supporting documents are procurement plan, purchase request (request for the purchase of goods), auction documents, advertisements in local or national newspapers, bid comparison of a minimum of three vendors, bid summary, contract notification form, purchase order or contract.
The examples of procurement plans in goods are computer hardware and software, office equipment, printed materials, furniture, web designs and standard graphics, supplies of goods for small business development supporting livelihoods and training, and provision of medical health services. The method is competitive bidding and continuous shopping.
The examples of procurement plans in work are new infrastructure work or building renovations, public service facilities, and land cultivation preparation. The method is competitive bidding and single source.
The examples of procurement plans in consulting services (individuals or companies) are gender consultants, poverty study consultants, poverty reduction specialists, and others. The method is competitive bidding and single source.
All the examples above will be pre-reviewed and post-reviewed. “In cases where a competitive offer cannot be made with three comparators, the grantee partner must obtain approval from MCA Indonesia,” Mak Tam said.
On advance withdrawals for workshops or travel, there must be a Term of Reference (ToR) or reference of activity description, budget, and an assignment letter for travel.
Grantee partners are required to maintain, record, label physical checks or asset checks. If it is damaged, it should not be discarded but recorded according to its condition in the fixed asset register. Report every plan of asset transfer.
“MCA Indonesia fund is not allowed for payment of Value-Added Tax (VAT), corporate tax, luxury tax, and other taxes based on the Compact agreement, except for VAT of a transaction valued at IDR 6 million with a maximum VAT value of IDR 600 thousand.
Special for the purchase or payment of airline tickets, one transaction is made in one invoice. Then for transaction values above IDR 6 million that are subject to VAT, please contact MCA Indonesia.
“The audit from MCA Indonesia will be notified ten working days prior to the audit. MCA Indonesia will conduct an audit every six months. Meanwhile, the external audit is held by the grantee partners for the first year period,” he said. (Gemawan-Mah)