Anwar Hussain

 Index 1. The Manual3 1.1. The scope3 1.2. Distribution of the Manual3 1.3. Revision of the Manual4 2. General Rules5 3. Definitions6 4. Parties involved and their responsibilities7 5. Policies and Processes and Process Flows8 5.1. Cash (In) Receipts8 5.1.1. Process8 5.1.2. Process Flow10 5.2. Cash Out11 5.2.1. Petty Cash and Floats11 5.2.1.1. Process11 5.2.1.2. Process flow13 5.2.2. Bank / Wire Transfer out14 5.2.3. Cheques15 5.2.3.1. Issuing Cheques15 5.2.3.2. Blank Cheque Security15 5.2.3.3. Outstanding Cheque List15 5.2.3.4. Voided Cheques17 5.3. Bank Accounts Handling19 5.3.1. Opening a Bank Account19 5.3.2. Closing a Bank Account20 5.3.3. Maintaining a Bank Account20 5.3.4. Authorized Bank account signatories21 5.3.5. Bank Reconciliation21 6. Process Alignment with Data Base23 7. Reporting24 8. Authority Matrix25 8.1. Overall objectives of the Delegations of Authority Matrix 25 8.2. Re-Delegation: 25 8.3. Guidelines for Delegating Authorities26 8.4. Type of Interactions: 26 8.5. Authority Matrix27 8.6. Notes on the Authority Matrix 28 9. Manual Approval29 10. Attachments30 ===================================== Release Date:July 1, 2011 Supersedes:ALL Process OwnerOperations Manager, GCC 1. The Manual 1.1. The Scope 1.1.1. The Scope of this manual is to define the proper business policies and processes that generate accurate and reliable output at any given time. The policies and processes follow four main principles: 1.1.1.1. To reflect the best practice of the industry with consideration to the unique nature of AMICO’s business norms when this does not pose a business risk. 1.1.1.2. To ensure alignment with the ERP principles specifically SAP being the most probable choice by AMICO. 1.1.1.3. To optimize the number of documentations needed to manage and monitor the process while ensuring adequate control and clarity on next steps. 1.1.1.4. To present a clear reporting manual and authority matrix that allows management to run the business smoothly with adequate levels of follow up and monitoring. 1.1.2. In this manual the concept is explained in terms of its policy, the process then the process flow charts that are numbered in the same sequence of the process text that precedes it. For example, if the process flow chart under section 5.2.3 has a box carrying number 7, this is explained as text in the section preceding it 5.4.3.7. The flow charts are laid out using the SAP standard symbols as shown and explained in attachment (1). 1.2. Distribution of the Manual 1.2.1. The Process Owner is the controller of this manual. All enquiries and requests for revisions relating to matters included in this manual should be addressed to, and approved by him. 1.2.2. This manual should always be kept in a safe place and must not be copied or revealed to third parties without the express written permission of the controller of this manual. 1.2.3. Distribution of this manual, in whole or in part, will be made only to designated executive positions as approved by the controller of the manual. 1.2.4. Copies of this manual, in whole or in part, will be designated to Senior Management and Department Heads only. A further copy will be available in a designated place (specified by the Process Owner) for employees to refer to. 1.2.5. Each set of this manual shall be serially numbered. Distribution/circulation of this manual is controlled and monitored by the Process Owner. 1.3. Revision of the Manual 1.3.1. Revision of this manual is the principal way of implementing and communicating changes in the policies and procedures of a specific business area. Those may arise in response to the changing needs and requirements of the business. Such revisions provide flexibility and ensure that the manual remains relevant at all times. 1.3.2. The objective of formalizing the manual revision procedures is to ensure that all amendments, additions or deletions to the manual are properly documented and authorized/approved prior to implementation. 1.3.3. Requests for revision of this manual can originate from any executive reporting directly to the Process Owner. In case any other staff member wishes to introduce any revisions to this manual, the request for such revisions shall be routed through the respective departmental managers. The requests for revision of this manual shall be addressed to the Process Owner. 1.3.4. The Process Owner shall consider and discuss the proposed revisions with relevant management team. If the proposed changes are material in nature, the Process Owner, Process Sponsor/Management team will approve the revision. 1.3.5. If the revision proposal is not approved, notification to that effect together with the reason will be sent to the originator by the Process Owner. 1.3.6. If the proposal is approved, the Process Owner shall ensure that suitable revisions are made to the relevant pages of the manual. He will then distribute the new Release of the Manual to all custodians, along with a covering letter explaining the changes and the Approval sheet (section 9 of the manual). 1.3.7. The Process Owner shall ensure the maintenance of a common Manual Revision Control Sheet for his manual. This shall provide a complete trail of revisions made to each page of a manual. The Manual Revision Control Sheet will record the following information in respect of each page of a manual to which a revision has been made: Chapter number Section number Page number Change approval date Covering letter reference 1.3.8. When a revision is made to any page of this manual, a full new approved release of the manual is issued. 11. General Rules of Cash and Banking 11.1. Cash is the most liquid Asset, and as such should be handled with the utmost care and precaution. 11.2. There should be a secure place for handling of cash in the office and entry to such area should be strictly restricted. There should be a safe for the custody of cash and its keys should be in the sole custody of the cashier. There should be a particular timing for receipt and payment of cash, except in cases of emergencies. Received cash should be duly counted, checked and verified before being accepted from the payer. Cash should be counted at the end of each day and tallied with the balance in the system. It should be checked and verified by the Head Cashier before being sent for deposit. A Supervisor should also check this. There should be a limit for making cash payments and for single withdrawals for internal controls. 11.3. A petty cash limit should be fixed for better control. A controlled Petty Cash Float System should be put in place and its replenishment should be after submission and approval of all expenses supported by justified reasons wherever necessary There should be a definite period for settlement of floats which need to be strictly monitored. 11.4. Suspense and IOU (I Owe You) account should have a time limit of maximum 72 hours to be settled and verified. 11.5. There should be proper cash in transit/cash in safe policy in place to mitigate the inherent risks. Relevant Insurance policies like cash in box/safe, cash in transit and notes in safe should become standard practice that apply to all employees handling cash. 11.6. The accounting of cash should follow the Standards prevailing in the country of operation with special focus on the International Financial Standards 3. Definitions 11.7. Cash: It is a term used to include currency, cheques, money orders, negotiable instruments and charge card transactions. 11.8. Accounts Receivable: Money owed by customers (individuals or corporations) to another entity in exchange for goods or services that have been delivered or used, but not yet paid for. Receivables usually come in the form of operating lines of credit and are usually due within a relatively short time period ranging from a few days to a year. 11.9. Wire Transfer: It is the process of electronically transferring money. Typically, the term suggests transfers of large amounts of money. However, wire transfer has evolved to include electronic funds transfer (EFT), which is the transfer of money using any method that is not paper based. EFT includes ATM transactions or any transaction that uses the telephone or other electronic bank payment or is still in the process of collection. 11.10. Outstanding Cheque List: Cheques/Drafts/any Negotiable Instrument that has not been presented to the paying bank or is still under in the process of collection. 11.11. Cheque Signing Authority: Legal power delegated by an authoritative body (such as a board of directors) to organizational positions (such as CEO, COO, CFO) appointing them as agents of the organization for general or specific purposes (such as payment authority, revenue authority, spending authority). In others words authorizing any personnel to sign cheques on behalf on an undertaking. 11.12. Blank Cheque Security: It is absolutely necessary to check the serial number seal of bank on each page of the chequebook received to ensure that they are in order when manually issued by the bank. However, electronically issued cheques are more secure than manual cheques. 11.13. Electronic Cheque: An electronic file that substitutes for and contains all of the relevant information of a manual (paper) cheque. Merchants are permitted to use a paper check as a source of information to make one-time electronic payments from a customer's account. Another short name for it is “e-cheque”. 11.14. Postdated Cheque: A postdated cheque is one given to someone with a future dated in the future, the intention of which is to not be cashed until the prescribed date. 12. Parties involved and their responsibilities 12.1. This manual affects all the departments in AMICO, as they must all claim any incurred expenses from the company. Whether the department has a cash float or not, the Cash process will apply. All parties involved share the overall responsibility of this business area. 12.2. The Finance and Accounting departments have the overall responsibly to make sure spending is made according to the agreed upon budgets or approved limits. When this is confirmed, the cash disbursement process takes place via actual cash, cheques or transfers. 13. Policies, Processes and Process Flows 13.1. Cash (In) Receipts AMICO has two types of Cash In (Received) from third parties. The first being Sales Remittance of Cash, Cheques and transfer in Bank account received from Operations and the second being Bank Interest income. Both of them follow the same general process: 13.1.1. Process 13.1.1.1.1. This process can be initiated in three ways: The Collector visits the Customer and receives cash or cheque for the due amounts. The Customer visits the AMICO and pays in cash or cheque for due amount directly to the Cashier. The Customer transfers the due amount directly in AMICO’s bank account and notify the Credit Controller 13.1.2. When the Collector receives the cash from the Customer, he writes a manual cash receipt. The original (white) copy of official cash receipt is given to the Customer. The last copy kept in cash receipt book. In case the collector receives a cheque, collector will sign on a copy of the cheques as a proof of receipt. No cash receipt is issued. 13.1.3. The Cashier receives the cash or cheque directly from the Customer or from Collector, along with the copy of the Manual Cash Receipt and updates the system. Cashier updates the system by placing the amounts received in their respective Customers accounts. No allocation is done for the amounts received to the invoices outstanding. The update takes place when cash is received, cheques received will be updated in the system after cheque being cashed. This must take place on the same working day, or by the following working day maximum. 13.1.4. Once the system is updated, the Cashier will print the Electronic Cash Receipts, which should be distributed to the customer or collector and the Credit controller. 13.1.5. The Daily Collection Report will also be printed from the system as the Cashier updates it. The Cashier will also fill the bank deposit slips for cash or cheques received, attach the cash/cheque with their deposit slips and send them to the Bank for deposits through a runner. Once deposits are made, the Cashier receives stamped bank deposit slips, updates the system and prints the Daily Deposit Report and prepares the document package to be sent to the Credit Controller. 13.1.6. Credit controller receives the payment notifications from those customers who already deposited or transferred the due amounts to the in AMICO’s bank account. 13.1.7. The Credit Controller also receives the document package (Electronic Cash Receipts Copies – Stamped Bank Deposit Slips – Daily Deposit Reports) from the Cashier. This helps him in the reconciliation process. 13.1.8. The Credit controller obtains the Bank Statement of Account, as appropriate, (From the system or directly from the bank). 13.1.9. The Credit Controller reconciles the details mentioned in the Daily Deposit Reports with details available in the Bank Statement of Account. 13.1.10. The Credit Controller identifies the items that appear in the Bank Statement but not mentioned in the Daily Deposit Report. He will allocate the received vouchers to customers and check the unidentified items in the Bank Statement with the customers directly. 13.1.11. Credit controller will update the system with the allocated vouchers. 13.1.12. In most cases the process ends here. 13.1.13. In some cases, the Credit controller would find amounts paid by known customer that does not match the outstanding invoices. This happens with Government and big customers. The can be a result of netting payments due to and from the customer to AMICO. The credit controller requests the cashier investigate those with the customer via the collector. Having this cleared, and after the investigation, the Credit Controller will request the Cashier to issue the electronic cash receipts for the identified items. Steps 5.1.1.3 and 5.1.1.4 will be repeated and the process ends. 13.1.14. Process Flow 13.2. Cash Out The AMICO Cash Out can follow a number of forms. They can be Petty Cash/Floats, Wire Transfers, and Cheques: 13.2.1. Petty Cash and floats 13.2.1.1. Process 13.2.1.1.1. To complete this process, a Requestor will fill the Cash Float Request Form and send it to his Department Manager. The amount required and the reasons for the request should be clearly stated 13.2.1.1.2. Department Manager receives the signed Cash Float Request confirming the amount and reasons for which they were requested. 13.2.1.1.3. The Department Manager’s disapproval will end the process. 13.2.1.1.4. If approved, the Department Manager will send the Cash Float Request Form with his recommendations to the Authorized Management for approval. Authorized Management’s disapproval will end the process. 13.2.1.1.5. If Authorized Management approves the request, the approved Cash Float Request Form will be sent to the Payable Accountant. 13.2.1.1.6. Payable Accountant will issue the cheque or formally request the Cashier to pay the requested amount to the Requestor. 13.2.1.1.7. Payable Accountant will also update the system. 13.2.1.1.8. Payable Accountant will print the payment voucher to obtain the Requestor’s acceptance. 13.2.1.1.9. Cash Float Requestor will receive the cash/cheque and acknowledge the payment voucher. They will then send the copy of the signed voucher to the Payable Accountant-. Cash Float Requestor receives expense vouchers from the employees who are authorized to use the Cash Float and obtain the approvals from Department Manager-. If the Department Manager does not approve the vouchers, he will ask the Cash Float Holder for more information to verify the vouchers-. If the Department Manager approves the Expense Vouchers, the Cash Float Holder receives the approved Expense Vouchers and issues the payments to the employees. Once the Cash Float reaches the limit where it requires replenishment, the Cash Float Holder will send the Cash Replenishment Request and Approved Expense Vouchers to the Payable Accountant-. Payable Accountant receives the Cash Replenishment Request with all supporting documents, verifies and states his remarks and sends it to the Authorized Management for approval-. Authorized Management will review the documents and comments made by the Payable Accountant. If the Authorized Management needs more information, concerned parties should be contacted for verification before approval takes place, otherwise, they will authorize the replenishment request.-. Payable Accountant will receive the approved Cash Replenish Request and start the payment-. Payable Accountant will repeat the step 5.2.1.1.6 to 5.2.1.1.9 and steps 5.2.1.1.16 to 5.2.1.1.19 of this process, which ensures the payment issuance and the system update-. Cash Float Holder receives the payment for the Replenishment Request. Process ends. 13.2.1.2. Process flow 13.2.2. Bank/Wire Transfer Out 13.2.2.1. Wire Transfers are subject to the Saudi Arabian Monitory Authority “SAMA” regulatory requirements and other anti-money laundering requirements. These requirements may be industry specific and should be acknowledged by Finance and Authorized Management. 13.2.2.2. The Payable Accountant should initiate all wire transfers after obtaining requests from the initiator of the payment and approval from the Authorized Manager. They must fill out the Wire Transfer Form incorporating the necessary information. 13.2.2.3. Upon Authorized Management’s approval of the Payment Request and the Wire Transfer Form, the Payable Accountant sends the approved documents to the bank. Phone banking and Internet banking may also be used for transfers if AMICO has the appropriate controls in place. 13.2.2.4. The Payable Accountant inputs the information onto the ERP system and posts the transaction on daily basis. 13.2.2.5. The Payable Accountant files the Payment Request Forms as follows: Original - with the wire transfer request form. 1st copy - with the bank verification slip received in the mail, for treasury records. 2nd copy - to Finance and Accounting records. 13.2.2.6. Considerations of Segregation of Duties should be evaluated depending upon the level of Management review and transaction frequency. The approver for the payment and the approver on the transfer letter for the payment should not be the same person. 13.2.3. Cheques 13.2.3.1. Issuing Cheques 13.2.3.1.1. The Payable Accountant should initiate issuing all cheques after obtaining requests and approval from the authorized manager and filling out the Payment Request Form incorporating the necessary information. 13.2.3.1.2. Authorized management approves the payment and the postdated cheques by initiating issuing the payment request and signing the cheque. 13.2.3.1.3. The Payable Accountant sends the signed cheque to the concerned party and inputs the information into the ERP system and posts the transaction daily. 13.2.3.1.4. The Payable Accountant files the Payment Request Forms and signed cheque, and sends a copy for treasury records and another copy for Finance and Accounting records. 13.2.3.2. Blank Cheque Security 13.2.3.2.1. All requisitions for new chequebook must be ordered sequentially with no gaps in the cheque number sequences. 13.2.3.2.2. Upon receipt of a new cheque book, the cashier will verify manually on each cheque book from each bank the following data: Company name and address. Bank account number. Accuracy of cheque sequencing. 13.2.3.2.3. All blank cheques should be secured in locked place with access limited to Treasury Staff and specially authorized persons. 13.2.3.3. Outstanding Cheque List: 13.2.3.3.1. The Accountant enters or downloads all cheques issued during the month from the accounts payable module onto a spreadsheet. This spreadsheet should also contain the prior month’s outstanding cheque list. 13.2.3.3.2. He must ensure that all cheques are accounted for by ensuring that there are no breaks in the numerical sequence of the cheques. He must begin with the last cheque number written in the previous month and end by verifying that the number of the last cheque used is the one just before the next cheque number in the cheque-book. 13.2.3.3.3. If a cheque in the sequence is missing, that cheque’s status must be investigated, and its impact on the outstanding cheques list assessed. 13.2.3.3.4. Obtain the bank statement showing all cheques that were cleared by the bank during the month. 13.2.3.3.5. Compare the bank statement to the list prepared above (all previous outstanding cheques and cheques written during the month) and remove all cheques that were cleared by the bank from this list. 13.2.3.3.6. To remove voided cheques from the outstanding cheques list, the accountant obtains the voided cheque file from the accounts payable department. He only removes from the outstanding cheque list those cheques in the file that are mutilated; originals of the cheques to be removed should be present in chequebook. The voided cheque should be entered through the accounts payable system. 13.2.3.3.7. For voided cheques that have been distributed (if any), a stop payment order must be requested. Only remove from the outstanding cheques list those cheques for which a stop payment confirmation notice has been received. 13.2.3.3.8. Every month, cheques greater than six months old must be removed from the outstanding cheque list and reversed. A list of stale cheques that have been reclassified should be maintained with the expense account where they were reversed. 13.2.3.3.9. Once all items have been removed (i.e. cheques clearing the bank, being voided, having stop payments issued against them or being reclassified to the stale cheque liability account), the remaining list becomes the new outstanding cheque list for the month. -. The amount is totaled and becomes the amount used in the bank reconciliation (In order for a voided cheque to be removed from the outstanding cheque list, the mutilated negotiable original must be retained or, if the cheque has already been distributed, a verification of the stop payment made on the cheque must be obtained from the bank prior to the removal of the voided cheque from the outstanding cheque list)-. The accountant will print the outstanding cheque list and file with the bank reconciliation. These steps should be performed monthly at the end of the month as soon as the bank statement is received from the bank. 13.2.3.4. Voided Cheques A cheque rendered null and void for any purpose, such as preventing a cheque from being cashed when there is an error or discrepancy between the written value and the numeric value. Cheques can be voided out by the payer by writing the word "VOID" in large letters on the face of the cheque, having the payer contact the issuing financial institution and informing them to stop payment and/or tearing the cheque in half. 13.2.3.4.1. The cheque should be defaced by writing the word “VOID” on the face of the cheque and cutting out the signature portion of the cheque. 13.2.3.4.2. For computerized cheques to be rendered “Void” within the same month of the cheques date, the void is entered as a cancellation on the system. The system will automatically correct the accounts payable register by posting the reversal of the cheque to the appropriate vendor. 13.2.3.4.3. All voided cheques must be re-issued immediately through a Payment Request Form. The voided cheques should have their accounting entries closed by journal entries debiting the Cash Account, and crediting the Accounts Payable Account. 13.2.3.4.4. The original payment request number must be indicated on the reissued Payment Request Form. 13.2.3.4.5. The original payment request must be marked “VOID”, but filed as usual with other payment requests in order to maintain the audit trail. 13.2.3.4.6. The actual voided cheques should be kept in a file in Accounts Payable for a one-month time period. At no time should a voided cheque be filed in a vendor file. All voided cheques need to be kept in their original cheque-book (in case of manual cheques) and in one separate file in case of computerized cheques. 13.2.3.4.7. At the end of the month all the voided cheques in the file for that month should be given to the general ledger clerk for use in reconciling the bank statements. 13.2.3.4.8. When the bank reconciliation is finished with the voided cheques, they should be filed in the file of canceled cheques returned from the bank for that same month. This is done to easily account for all cheques. 13.3. Bank Accounts Handling AMICO’s Treasury Department shall be responsible for controlling the opening, closing and maintenance of all bank accounts. In fulfilling this responsibility, Treasury shall establish and maintain written policies and central control procedures related to opening, closing and maintaining those bank accounts. Compliance with the following procedures will help the Company eliminate undue risks and lower its bank-related expenses. One Example is when establishing a new banking relationship whose purpose could have been fulfilled by an already existing bank relationship or for which fees could have been reduced by corporate treasury involvement (lower bank expenses). 13.3.1. Opening a Bank Account 13.3.1.1. To open a bank account, a written request should be made to the Corporate Accounting Manager. The request will be reviewed by the CFO to determine that a clear need exists for a new bank account before presenting the case to the Board. 13.3.1.2. By completing the Company Bank Account Opening form The following must be included in the request: Bank name, address, bank contact and phone number and reasons for opening with the Board Resolution. Purpose of account Anticipated monthly average bank balance Account signatories and two specimen signatures for each signatory 13.3.1.3. Once the bank account and the bank have been approved, Treasury will prepare a bank account opening letter which includes the following elements: Name of account Instructions regarding purpose of account and how it is to be operated Name of signatories and signing limits Instructions regarding use of facsimile signatures Address where all debit and credit advices and bank statements are to be sent 13.3.1.4. A Board of Directors Banking Resolution and specimen signatures for all bank account signatories will accompany the letter. The account-opening letter must be signed by two bank signatories, one of which must be the CFO. 13.3.1.5. It is the responsibility of Corporate Treasury to keep records as to the status of all Company bank accounts and to safe keep all relevant documents regarding the opening of Company bank accounts. A new general ledger account must be opened for each account. 13.3.2. Closing a Bank Account 13.3.2.1. To close a bank account, a written request should be made to the Corporate Accounting Manager. The request will be reviewed by the CFO to determine that a clear need exists to close a bank account before presenting the case to the Board. 13.3.2.2. By completing the Company Bank Account Closing form The following must be included in the request: Bank name, address, bank contact and phone number and reasons for opening with the Board Resolution. Bank account number Disposition of closing bank balance and statement 13.3.2.3. Upon receipt of the properly authorized form, corporate accounting manager will prepare a bank account closing letter and notify the bank where any remaining bank balance is to be transferred. The letter must be signed by appropriate Company personnel. See section 5.3.2.1 of this manual. 13.3.3. Maintaining a Bank Account (Signatures Additions/Deletions) 13.3.3.1. To add or delete bank account signatories, a Company Bank Account Signature Addition/Deletion form must be completed. The form includes the following items, which must be answered: Bank name, address and bank contact Bank account number Person being added or deleted (include two specimen signatures for each person being added) 13.3.3.2. Upon receipt of the properly authorized form, Corporate Accounting Manager will prepare a letter to notify the bank of signature changes. Appropriate Company personnel must sign the letter. 13.3.4. Authorized Bank account signatories 13.3.4.1. Persons authorized to sign on bank accounts shall be selected based on level of responsibility and functional responsibility. In order to maintain segregation of duties for proper control, under no circumstances shall persons be selected as bank account signatories who have responsibility for processing checks or reconciling bank accounts. 13.3.4.2. All checks should be signed by authorized signatories with appropriate signing levels. When presented for signatures, all checks must be accompanied by a Check Request form, invoices, and / or other authorized supporting documentation (e.g., purchase order). Supporting documentation must indicate appropriate approval in accordance with Company's Signature Authorization Matrix. Under no circumstances will blank checks be signed. In addition, an account signer cannot be the sole signer on a check he / she has requested. 13.3.4.3. The CFO shall establish a list of authorized signatories, signing limits and facsimile signatures. 13.3.5. Bank Reconciliation 13.3.5.1. The Accountant will copy the bank statement (separate for every bank account) and from the bank statement for the month under reconciliation, obtain the cash balance as of the month end. 13.3.5.2. He will add to the bank balance the amount of deposits-in-transit as of the month end and subtract from the bank balance the total of outstanding cheques as of the month end. 13.3.5.3. When all reconciling items have been identified, either add or subtract the reconciling items from the bank balance as necessary to arrive at the adjusted book balance. 13.3.5.4. From the prior month’s bank reconciliation obtain the balance forward - general ledger. This amount should be agreeing with the beginning of month general ledger balance to ensure there was no prior period adjustments. 13.3.5.5. Carry forward the general ledger to account for all cash receipts, transfers, loan payments, bank charges and other activities and agree the ending book balance per system to the general ledger and to the adjusted bank balance. 13.3.5.6. If ending book balance does not agree with bank balance, the accountant should review all items on the bank statement to ensure that all items recorded by the bank are posted to the general ledger or are listed as reconciling items. 13.3.5.7. Investigate all non-reconciled differences until found, reviewed and approved by the Accounting Manager and prepare any journal entries as necessary. 13.3.5.8. When reconciled, give bank reconciliation and supporting documentation (i.e. outstanding cheque list, detail of deposits in transit, copy of bank statement) to the Accounting Manager for approval. 13.3.5.9. File the approved reconciliation and supporting documents with the monthly closing file. 14. Process Alignment with Data Base This process is designed as per SAP guidelines. 14.1. Petty cash Cashier as vendor needs to be created by the Payable Accountant. 14.2. The next stage is to create a petty cash fund. 14.3. The creation of funds by the Payable Accountant should be posted in the General Ledger and the funds should be handed over physically to the Petty Cash Cashier for Disbursement of outgoing payments. This is after taking approval by the Chief Accountant/Finance manager. 14.4. The Petty Cash Cashier, after making the relevant payment, would send the statement to the treasury / payable department for recording of expenses. 14.5. The Reimbursement process to the Petty Cash Cashier will be forwarded to the Payable Accountant to update on the system after approval from Finance manager. 15. Reporting 15.1. A Petty Cash Report on the funds required for the period can be generated. 15.2. Verification of physical cash with the Cash Balance Report from the system can be generated. 15.3. Periodic verification of physical cash by the superiors can be maintained in a report form. 15.4. Annual Petty Cash Verification Report as per the standards in the prevailing country with special emphasis on International Accounting Standards can be maintained. 15.5. Bank Reconciliation Report. 16. Authority Matrix The Delegation of Authority Matrix bears with it the obligation to exercise sound discretion and good business judgment and to accept responsibility for such actions. Approval indicates knowledge of the transaction or item being approved for action or payment and that, insofar as they apply, goods or services have been received, processed and that AMICO’s interests are protected. 16.1. Overall objectives of the Delegations of Authority Matrix are: 16.1.1. To ensure that the Operating Plans and Budgets are executed in a manner consistent with the company's mission and business strategic objectives. 16.1.2. To ensure that the executive management department is managing the business associated risks. 16.1.3. To provide for appropriate consultative involvement of applicable staff groups (e.g. Finance, Accounting, Administration, etc.) in major business decisions. 16.1.4. To document delegations of authority in sufficient detail to promote accountability, responsibility and adequate internal controls over the authorization and execution of business transactions. 16.1.5. To ensure appropriate monitoring of capital expenditure projects. 16.2. Re-Delegation: 16.2.1. AMICO Executive Management has the primary responsibility for assuring compliance with the objectives of the Delegation of Authority Matrix in their respective business and staff groups. 16.2.2. The prevailing authority can be re-delegated to the lowest level of subordinates required to efficiently and effectively administer AIMCO’s business. Any re-delegations, whether permanent or temporary, below the Chairman level, must be documented and approved by the Chairman. 16.3. Guidelines for Delegating Authorities throughout the Organization: 16.3.1. The following guidelines should be followed in the administration of this Delegation of Authority Matrix: 16.3.2. Authority to execute business decisions outlined should be delegated to the lowest practical organizational level. Such authority should be sufficient to allow individuals to complete their job responsibilities. 16.3.3. Delegations are related to a position, not to an individual. Accordingly, an individual’s authorities end upon their changing or leaving the position. 16.3.4. In the absence of a Director for certain functions, the subordinate manager(s) (i.e. two managers collectively) will assume the responsibility of delegation. 16.4. Type of Interactions: There are three types of interactions between AMICO personnel as follows: Type of Interaction Description of responsibility Initiates Has the primary responsibility for completing the task and personally ensuring timely submission. The individual is not required to perform the task, they may delegate to sub-ordinates, however the responsibility of preparation lies within his jurisdiction. Reviews Conducts an in-depth review of recommendations, contents, ideas presented, challenges output and rationale, investigates alternative ideas, and contributes to the refinement of the content, ideas and recommendations. Approves Provides formal approval for the recommended position, content and/or ideas. This step is required before enacting the recommendation. 16.5. Authority Matrix: Action Initiates Reviews Approves Bank Accounts/Facilities Opening and closing bank accounts CFO Chairman Identify bank signatories authorization limits CFO GM Chairman Changes in Bank Signatories CFO GM Chairman Establishing Overdrafts Deal CFO GM Chairman Renewal of Bank Facility CFO GM Chairman Obtain Long Term Loans CFO GM Chairman Rollover of Bank Facility CFO GM Chairman Drawdown of Bank Facility Financial Manager CFO GM Issuing Letter of Guarantee Head of Section Financial Manager CFO Open/Close Letter of Credit Head of Section Financial Manager CFO Bank Reconciliation Head of Section Financial Manager CFO Adjustments after Bank Reconciliation Head of Section Financial Manager CFO Disbursement/Transferring of Funds Cheque and Cash Disbursement and Imprest Fund Issuance (in line with approved budget) Requester Finance Manager CFO Cheque and Cash Disbursement and Imprest Fund Issuance (Outside approved budget) Requester Dept Head / Finance Manager CFO / Budget Owner Country GM Action Initiates Reviews Approves Transferring of Funds between AMICO Bank Accounts Up to SR 10 Million Head of Section Financial Manager CFO Up to SR 25 Million Head of Section Financial Manager CFO Up to SR 50 Million Head of Section Financial Manager CFO and GM Up to SR 100 Million Financial Manager CFO and GM CEO Investment Management Investment in Time Deposit - Less than one year Up to SR 4 Million Head of Section Financial Manager CFO Up to SR 15 Million Head of Section Financial Manager CFO and GM Investment in Long Term Investments (Stocks/Bonds) Any amount CFO GM Chairman Cash Flow Cash Flow Projections Financial Manager CFO and GM CEO 16.6. Notes on the Authority Matrix: The Chairman should approve bank signatories and their authorization limits and establishing a bank facility, for whatever value. 17. Manual Approval - Process Owner: CFO: - Related Parties; - Sales: - BU: - Supply Chain: - IT: - HR: - Process Sponsor:CEO: - Periodic Review Date:(3/6/9/12 Months) 18. Attachments 18.1. SAP standard Process Flow Symbols 18.2. Payment request form 18.3. Bank Reconciliation SAMPLE (for Corporate Bank) ============================================== Attachment (1) SAP standard Process Flow Symbols Flow Chart Symbols Symbol Description Start of Process Process Decision Making Comment Made by End User Automatic Decision Made by Software Predefined Process Reference Part of a Predefined Process Reference Document Printed Financial Implication Document Multi-Document Manual Input of Information or Data Manual Operation / Activity / Task Connector Between to Tasks within a Process Flow Database End of Process Attachment (2) Payment request form Attachment (3) Bank Reconciliation SAMPLE (for Corporate Bank) FOR THE PERIOD ENDING Month 31, 20XX ENTITY:Corporate BANK ACCT #:- G/L#:1010.03 APPROVED: BALANCE PER BANKSR 387,955.42 OUTSTANDING WIRE TRANSFERS(415,187.50) OUTSTANDING CHEQUES(3,904.39) DEPOSITS IN TRANSIT ADJUSTED BANK BALANCE(29,507.30) BALANCE FORWARD - G/L472,798.46 CASH RECEIPTS PER A/R SYSTEM1,140,810.77 JULY DEPOSITS BOOKED BY JED1,421,167.37 JULY RECEIPTS BOOKED IN AUGUST3,566,519.30 REVERSE JUNE RECEIPTS BOOKED IN JULY(1,069,221.99) DEFERRED REVENUE CASH RECEIPT BOOKED BY JED2,667,600.00 OUTSIDE TRANSFERS IN/(OUT): MISC. OUTGOING TRANSFERS(2,339,796.07) INVESTMENT/INV. MATURITY(997,429.03) LOAN ACTIVITIES(4,232,227.28) CASH DISBURSEMENTS PER A/P SYSTEM(216,285.14) ADJ TO RECORD MANUAL CHEQUES215,285.14 INTER-ACCOUNT TRANSFERS(2,439,500.00) BANK CHARGES(858.00) MISC. ADJUSTMENT ENDING BOOK BALANCE(29,507.30)