Organization CODE OF CONDUCT

 

 

For the Prevention of children, Adults and Staff from Abuse, Exploitation and Harm

 

 

 

 

 

 

 

 

 

 

                                          

 

 

 

 1.Organizational Profile

Rooted in pursuit of the public interest and social justice, Organization for Social Development (formerly Organization for Social Justice in Ethiopia) has been engaged, since its establishment in 2003, in wide and diverse interventions ranging from advancement of human welfare, democracy and good governance to maximizing the role of the private sector in promoting social justice by upholding Corporate Social Responsibility (CSR) as the main thematic area of its operation.  Realizing the enormous but untapped potential of the private sector to advance human rights and materialize people-centered all inclusive development in the country, OSD has launched in 2010 a strategic plan to promote Corporate Social Responsibility (CSR) among the business community, government organs and the public.     

Since then, OSD has implemented projects that achieved an increased awareness and understanding on CSR and enhanced capacity of the private sector to comply with international and domestic principles and standards which deal with different aspects of CSR.  Having research as one of its main components researches on private sector and civil society partnership, the role of the private sector in advancing reproductive health in Ethiopia, engagement of the private sector in improving welfare of disadvantaged and vulnerable groups and,  corporate social responsibility and child welfare, have been undertaken.  Analyzing legal and policy environments and practices as well as bringing on board international initiatives and best practices, these researches substantially contributed in addressing the information gap with regard to CSR practice in Ethiopia and have provided baseline for contextualizing and adopting CSR initiatives. In addition to conducting researches OSD works to introduce the concept, to raise awareness on different aspects of CSR, to enhance implementation by the private sector and to advocate for creation of an enabling legal and policy environment by using broadcasting and print media, organizing trainings targeted at selected representatives from governmental offices, civil society, Chamber of Commerce and Sector Associations; promoting good practices using different mechanisms and; establishing partnerships/networks with different entities including chambers of commerce and sect oral associations.

1.1 Legal status

Organization for Social Development (OSD) (formerly called Organization for Social Justice in Ethiopia (OSJE)) is an indigenous, non-profit, non-partisan, non-governmental organization. Under the requirements set by a new Charities and Societies Proclamation (entered into force on February 13, 2009) Organization for Social Development re-registered as Ethiopian Resident Charity by Federal Democratic Republic of Ethiopia, Ministry of Justice, Charities and Societies Agency on November, 2019 – License Number 0843 assuming the current name. 

1.2 Vision

Seeing a community wherein equitable access to basic economic and social services for every citizen is ensured.

1.3 Mission

 We foster social development with special emphasis to environment protection, access to standard and quality social services and productivity by promoting Corporate Social Responsibility (CSR) among business organizations, citizens, and government bodies.

1.4 Thematic Operation

The general thematic areas of which Organization for Social Development engages itself in are:-

•  Health
•  Education
• People with Disability
• Environmental Protection
• Women Economic Empowerment
• Refugees etc……

Specifically Organization for Social Development has been focusing on promoting the concept Corporate Social Responsibility among private businesses, citizens and government bodies as to improve and strengthen the role played by business firms in the development endeavors of the country. For this purpose, OSD organizes its interventions into three categories:

• Awareness and Capacity Building- focuses on ensuring enhanced CSR activities and understanding among business organizations, the government and the general public
• Research- focuses on improving CSR knowledge and information as well as identifying further intervention areas to improve laws, policies and practices related to CSR in Ethiopia
• Advocacy and Promotion- aims at creating an enabling and favorable legal and policy environment for CSR practices and improve CSR performance among the business community

 

1.5 Overall Objective

To increase involvement of private sectors in the development process of the country, through awareness creating, promoting practices, and advocating for an enabling environment pertaining to Corporate Social Responsibility in the country.

• To promote environment protection
• To promote accessibility of standard and quality public/social services to the society (education, health, food, shelter)
• To encourage productivity and quality services

1.6 Values

The core values that inspired the vision and mission of the Organization for Social Development include:

•  Lasting Impact
• Participation and empowerment
•  Self-actualization
• Equality
• Justice
• Integrity
•  Accountability

2. Why Code of Conduct?

Poverty, conflict and displacement inevitably erode and weaken many of the social and political structures that are designed to respect and protect members of the community where these conditions have occurred or exist. The resources available to communities and crisis-affected populations, and to the humanitarian and development agencies that is there to assist them, are frequently insufficient to meet basic needs. All too often, mechanisms for protection are not given sufficient priority. Against this background, women, men, girls and boys find themselves in situations where they can be exploited or abused. Such an environment can provide opportunities for abuse of power and corruption by development and humanitarian aid workers.

 

Organization for Social Development has a zero tolerance to child abuse, Sexual Exploitation and Abuse (SEA) and must make every effort to create an environment where such practices are not tolerated. This is especially necessary given the following features of humanitarian crises:

• The lack of economic opportunities for displaced populations may result in Commercial and exploitative sex being one of the few options for income generation to meet basic needs.
• In cases where communities come from an environment of gender-based violence, proper safeguards need to be put in place, as similar patterns can continue or even be exacerbated in refugee or IDP camp (or non-camp) situations.
• The usual social protections are not in place or are no longer functioning. Levels of protection and security are generally poor; justice and policing frequently do not exist in the displaced environment.

Organization for Social Development also has a zero-tolerance position on fraud and corruption as articulated in its Policy.

The Organization’s mission statement affirms that it works for positive and sustainable change in the lives of people affected by poverty and injustice through coordinated and effective humanitarian, development and advocacy work. It is committed to guard against the abuse of power by those responsible for protection and assistance to vulnerable communities.

Organization for Social Development recognizes that sexual exploitation and abuse can occur in many different environments internal and external to organizations. However, in humanitarian crises, the dependency of affected populations on humanitarian agencies for their basic needs creates a particular ethical responsibility and duty of care on the part of Organization for Social Development members' staff. Therefore, all program managers have a responsibility to ensure that all staff is aware of this code of conduct, sign it, and understand what it means in concrete behavioral terms. They must also ensure that there are proper mechanisms in place to prevent and respond to safeguarding issue including sexual exploitation and abuse (see Annex 1: Checklist for Managers).

Organization for Social Development members and employees must cooperate, when requested, with any investigation into allegations of sexual exploitation and abuse. Failure to disclose, or

Withholding, information about sexual exploitation and abuse constitute grounds for disciplinary measures.

3.Scope and purpose

The main purpose of this Code of Conduct is to promote greater accountability towards crisis-affected populations and all those with whom we work. It is intended to serve as a guide for Organization for Social Development members and employees to make ethical decisions in their

Professional lives and at times in their private lives. It is designed to assist staff to better understand the obligations placed upon their conduct, and to protect the reputation of the organization.

The spirit in which this code has been developed is intended to strengthen, complement and enhance already existing “Codes of Conduct”, rather than to detract from them. Members and employees of the organization have a particular responsibility to uphold the standards expressed in the following Code of Conduct, to set a good example and to create a working environment that supports and empowers staff. The Code is complemented by the organizational policy.

4.Codes of Conduct

Members, volunteers and employees of Organization for Social Development must:

 

•  Respect and promote fundamental human rights without discrimination and irrespective of social status, race, ethnicity, color, religion, gender, sexual orientation, age, marital status, national origin, political affiliation or disability.
• Treat all communities with whom we work (including children, people with disability, women and IDPs-if there are any, etc.) fairly and with respect, courtesy, dignity and according to the respective country Law, International Law and Local Customs.
• Create and maintain an environment that prevents sexual exploitation and abuse, abuse of power and corruption, and promotes the implementation of the code of conduct. Managers at all levels have particular responsibilities to support and develop systems that maintain this environment
• Uphold the highest standards of accountability, efficiency, competence, integrity and transparency in the provision of goods and services in the execution of their job.
• Never commit any act or form of harassment that could result in physical, sexual or psychological harm or suffering to individuals, especially women and children.
• Never exploit the vulnerability of any target group, especially women and children, or allow any person/s to be put into compromising situations.
• Never engage in any sexual activity with children (persons under the age of 18) regardless of the age of majority or age of consent locally. Sexual activity with children is prohibited. Mistaken belief in the age of a child is not a defense
• Never engage in sexual exploitation or abuse of any man, woman, girl or boy. This constitutes acts of gross misconduct and is therefore grounds for termination of employment.
• Never exchange money, employment, goods, or services for sex, including sexual favors. All forms of humiliating, degrading or exploitative behavior are prohibited. This includes exchange of assistance that is due to project participants.
• Never abuse their position to withhold humanitarian assistance, nor give preferential treatment; in order to solicit sexual favors, gifts, payments of any kind, or advantage. The employee should be conscious of not taking advantage of his/her position and may not accept gifts (except for small tokens of appreciation) or bribes.
•  Not engage in sexual relationships with communities and affected populations with whom we work. Such relationships are strongly prohibited since they are based on inherently unequal power dynamics. Such relationships undermine the credibility and integrity of humanitarian aid work. This rule applies to both during and after working hours.
• Employees may not accept, solicit or engage in the "buying" of or profiting from sexual services. This is applicable both within and outside of working hours.
• Ensure that all confidential information, including reports of breaches of these standards by colleagues, obtained from communities and affected populations or colleagues is channeled correctly & handled with utmost confidentiality.
• Ensure that reports, concerns or suspicions of breaches of these standards are immediately reported to the established agency reporting mechanisms, which is expected to take prompt investigative action.
• Any breach of the Code of Conduct will result in disciplinary action in accordance with the respective terms, conditions and guidelines of the individual agencies.
• Any staff member purposely making false accusations on any action by another staff member, which is in breach of the code of conduct, will be subject to disciplinary action at the discretion of the employer.

4.1 Establish minimum standards for compliance and complaints mechanisms as part of member commitment to the Code of Conduct.

The Organization for Social Development Code of Conduct is a comprehensive and broad standard, which must not be compromised. Key indicators, however, will have to be developed and adapted to the environment in which member organizations are working. It is essential that the issue is addressed in member strategic plans and annual work plans, and that minimum organizational and procedural requirements are met. As the least common denominator, members should put systems in place which ensure that minimum compliance mechanisms and complaint procedures are established, This section suggests actions and procedures to support compliance (see also Annex 1: Checklist for Managers).

 

4.2. Develop and implement compliance/reporting mechanisms as part of overall manager and staff responsibility and accountability.

The Organization for Social Development Code of Conduct on Safeguarding sets behavioral standards with zero tolerance for sexual exploitation and abuse. This should be elaborated as part of an overall Organization’s Accountability Framework by each member. Managerial and individual staff accountability for ensuring compliance is a crucial component for the success of the Code. Accountability to communities and affected populations is fundamental, in project design and implementation, and in partnerships and communication. Whatever procedures are established (e.g., information sessions, complaint boxes, focal points among affected persons, referral to focal point of the member, clear complaints channels) should be disseminated as widely as possible, and should increase chances of reporting and receiving complaints. See the organization’s Complaints and Investigation Guidelines for details.

 

4.3 Priorities adherence to the Code of Conduct on Safeguarding (and other codes of conduct) as part of member capacity development.

The organization’s Capacity Development Initiative includes member self-assessment as a fundamental component. Among other things, the self-assessment will provide indicators on a member’s conformity to the Code of Conduct on Safeguarding (awareness and implementation).Identified shortcomings can be addressed, as prioritized, by follow-up measures.

4.4. Strengthen emergency Appeal and operational procedures relating to the Code of Conduct on Safe Guarding.

All Appeal documents should include reference to a member’s commitment to the Code of Conduct on Safe Guarding. This commitment should be carried through the Appeal cycle – proposal, implementation, reporting, and evaluation. As a rule, evaluations to be launched for Organization for Social Development appeals should include an assessment of how the implementing agencies have complied both with ethical and professional standards, and how Safe guarding concerns has been addressed.

It is noted that the use of gender-sensitive programming tools for needs assessments, planning, implementation and evaluation, and adherence to the Code of Conduct on Safe Guarding, are two of the fundamental Gender Policy Principles for gender mainstreaming in Organization for Social Development members’ work.

 4.5. Embed the organization’s Code of Conduct on Safe Guarding in all employment policy, procedures and contracts.

The Code of Conduct on Safe Guarding should be embedded in the member’s staffing and hiring policy:

• The members should ensure that the essentials of the Code of Conduct (staff behavior standards and possible disciplinary measures in case of misconduct) become part of the employment contract.
• All staff should have written job descriptions, which mention compliance with the Codes and policies and with clear reporting lines.
• At a minimum, new staff will be required to sign that they have read, understood and are in agreement with the content of the Code of Conduct, and accept the consequences of any violation of any of its provisions.

4.6. Appoint “Focal Person” on Safe Guarding

As a minimum requirement, members and employees should ensure that at least two trusted senior staff (one male and one female), preferably with experience and training in the field, are appointed who can act as Focal Persons. The Focal Persons should be equipped with a clear Terms of Reference. Where appropriate, it should be ensured that respective training and guidance is provided to the Focal Persons, and that he/she in turn will be able to train other staff. The Focal Points are the persons to whom staff can make complaints and/or to alert the member to allegations. Selection of the right persons to be the Focal Points is essential. Agreed upon criteria for the selection should be established. Every effort must be made by the Senior Management of the member agency to provide the Focal Persons with the requisite tools and authority to perform this role effectively, and to protect him/her from any potential disruptions or outside influence.

 4.7. Organize staff orientation and training: raise awareness and familiarize staff and affected populations/communities on the Code of Conduct, and with the compliance/reporting mechanisms described in this document.

Members of the organization cannot assume that staff members are any more aware of Safe Guarding issues than other members of the community. Therefore, all staff should be familiarized with the topic. This may well include internal training, induction and refresher sessions. Awareness rising and familiarization should include mandatory reporting requirements, as these may help to overcome fears of sharing concerns about colleagues. One of the characteristics of Gender Based Violence (GBV), and in particular sexual violence, is under-reporting. Victims generally do not speak of the incident for many reasons, including self-blame, fear of reprisals, mistrust of authorities, and fear of re-victimization. Acts of GBV often evokes shaming, blaming, social stigma, and often rejection by the victim’s family and/or community.

It is essential to raise awareness both for the potential victims (regarding their rights and ways of reporting) and the potential perpetrators (regarding their wrongs).at a minimum, people with whom we work need to know:

• That they have a right to be free of any kind of abuse, exploitation including sexual exploitation and harm.
•  How they can complain and to whom they can complain.
• What steps they can take to ensure confidentiality and what steps the member will take to ensure safety and confidentiality.

 

4.8. Develop experts on Gender-Based Violence

Experiencing staff in gender-based violence issues, both within and outside the organization, should take place. Such experts could, whenever the need arises, be engaged for internal staff training, monitoring compliance, assessments, evaluations and/or random spot checking.

 4.9. Coordinate member Safe Guarding preparedness activities within the organization forums

It is suggested that the member Focal Persons realize with focal points of other members, particularly in the context of Forum, prepare Joint training, joint orientation, joint preparation of compliance and complaints mechanisms, and joint learning are among the activities which could be carried out. A forum should promote the Code of Conduct on safe guarding and its concrete implementation through activities such as described in this document.

4.10. Prepare a safeguarding brochure for dissemination to staff and affected populations/communities

Staff, communities, project participants and affected populations need to be aware of what mechanisms exist to prepare for and respond to cases of safeguarding including sexual exploitation and abuse. A simple brochure can serve that purpose. For example, the established reporting mechanisms should be communicated clearly and publicized to all staff and populations with which the member is working. The information should include information on: the protection of the rights and confidentiality of both alleged victims and the accused; and where to find Focal Persons for inquiry, complaints and protection; and on how to make a complaint.    

4.11. Organize appropriate activities to help minimize opportunities for abuse and exploitation

4.12. Have investigation and sanction mechanisms in place

In some instances, complaints will justifiably lead to the need for a more detailed investigation, which is generally carried out by the members according to its own investigation policies and procedures. If the members do not have the capacity to undertake an investigation, the board members of the organization may be called upon to facilitate an investigation.

4.13. Have a safe referral process 

All members should seek to have the capacity to receive and handle complaints effectively. If it does not have the capacity to undertake specialized investigations into allegations of sexual exploitation and abuse, it should have a safe referral system within the organization or know where to access expert investigators.

5.Guidelines for implementation

It is essential for the organization’s members to demonstrate ways in which they are complying with the Code of Conduct on Sexual Exploitation and Abuse (beyond the mandatory individual signing of the Code). Members must do everything possible to reduce the power disparity between affected populations, project participants and aid workers, and between staff within the organization, to ensure that there is an organizational culture that prioritizes this issue, and to establish and implement responsible compliance and complaints systems. The following Mechanisms for Compliance are listed for consideration by members, to be used or adapted as appropriate, recognizing that some members may already have similar mechanisms in place.

  

 

Annex 1: Checkpoints for managers

 

a. Implemented

b. Partially implemented

c. Not implemented

d. Do not know

 

Checkpoint 1: Philosophy and Principles

1. The organization’s duty of care for all people with whom we work is explicitly written in recruitment and policy materials.

2. The organization’s policies on protecting people with whom we work is well publicized to all staff.

3. Statements that the welfare of all children must be a paramount consideration of the organization are built into all policies.

4. Statements that woman have equal rights and should be treated with dignity and respect feature in all relevant policies.

5. All people with whom we work, including women and children are aware of their rights through publicized material and/or awareness raising measures.

6. Disrespectful, abusive, exploitative and discriminatory behavior is actively discouraged and measures are taken to deal with such incidents.

7. The organization works in active partnership with the community of people of concern and specifically takes measures to engage with women, children and young people.

8. Managers and senior staff promote a culture of mutual respect between staff and people with whom we work, including women and youth. Senior staff model good practices.

Checkpoint 2: Conduct and Good Practice

1. The organization has a staff code of good behavior that regulates staff behavior towards people of concern with a process for dealing with complaints.

2. The code is endorsed by senior management and well publicized.

3. Staff is fully aware of the code and required to sign it.

4. Discriminatory, violent, disrespectful or inappropriate behavior by staff/volunteers towards people of concern is actively discouraged and measures are taken to deal with such incidents. People, with whom we work, including young people, are provided with information on where to go for help.

5. There are specific guidelines relating to responding to children’s reports of abuse or unacceptable behavior.

6. The code prohibits sexual abuse and exploitation of people with whom we work.

7. The code prohibits sexual activity with children under the age of 18regardless of the local age of consent.

8. There is training and awareness-raising for all staff and volunteers on the code.

9. The consequences of breaching the code of behavior are clear and linked to organizational disciplinary and grievance procedures.

10. There is guidance for staff and managers on managing prohibited behavior.

11. There are guidelines for care of children or young people, or relating to appropriate or inappropriate touching, specifically for teachers and medical Code of Conduct for the prevention of Sexual Exploitation and Abuse staff.

12. The organization generally promotes high standards of personal behavior, conduct and language

Checkpoint 3: IASC Protocol

1. The organization has complaints procedures that are safe and accessible for staff, volunteers and people with whom we work and is endorsed by management.

2. The organization has a complaints mechanism and investigation procedures and staff and people with whom we work are aware of them.

3. The policy and procedures are reviewed every three years, or whenever there is a major change in the organization or in legislation.

4. There is a designated person/focal point known to everyone in the organization, who is responsible for receiving complaints.

5. There are several complaints mechanisms in place suited to various elements of the people with whom we work.

6.  There is a disciplinary and grievance policy and staff are aware and understand it.

8. The organization is aware of how its guidelines fit into international guidelines for child protection and responding to sexual abuse and sexual exploitation of women and children. Contact details for local services are readily available.

9. Processes for dealing with complaints are fair and open to challenge through an appeals process.

Checkpoint 4: Staff and Volunteers

1. The organization has clear policies and procedures for all staff involved in the recruitment and selection of staff and volunteers. Human resource staff is trained in these policies and procedures.

2. There is a staff/volunteer induction program that includes awareness of the code of conduct, the complaints system and investigation procedures related to sexual abuse and sexual exploitation and the consequences of non-compliance.

3. Designated managers have access to specialist advice or training on investigations and handling staff misconduct.

4. Staff, volunteers, coaches or leaders are easily identifiable as belonging to the organization and known to people with whom we work including the children and young people.

5. All staff and volunteers who have contact with vulnerable populations and children have all had criminal records checks, where possible.

6. There are complaints, disciplinary and grievance policies in place that all staff are aware of and those responsible for dealing with them receive suitable training.

8. There is a policy on providing support and supervision for staff or volunteers who encounter protection concerns within their work.

9. Opportunity for ongoing training about sexual abuse and exploitation is available and resources are identified as part of a staff development.

Organization for Social Development Code of Conduct for the prevention of Sexual Exploitation and Abuse

6. Key terms and definitions

Abuse of power: Abuse of power includes any abusive behavior (physical, psychological, sexual or emotional) by a person in a position of authority and trust against someone in a position of vulnerability and/or dependency.

Complainant: The person making the complaint, including the alleged survivor of the sexual exploitation and abuse or another person who becomes aware of the wrongdoing.

Gender and power: Gender is the English word being used to describe cultural/societal differences between males and females in terms of roles and responsibilities, expectations, power, privileges, rights, and opportunities. “Gender” refers to the differences between males and females that are rooted in culture, tradition, society, and religion. Gender is something that is learned from infancy. An individual or society’s gender perspective can change. Unequal power relationships provide the basis for sexual exploitation and abuse. Due to their unequal status, women and girls are particularly at risk of sexual exploitation and abuse. However, it is important to recognize that boys are also vulnerable to sexual exploitation and abuse.

Humanitarian and development workers: The term humanitarian and development worker are often used interchangeably for people who work in either humanitarian or development work, or both. This group is more broadly defined than the internationally engaged staff of humanitarian aid organizations. Thousands of staff is engaged in a variety of work ranging from volunteers, casual laborer, drivers and warehouse guards to decision makers at the country, regional and international levels. Many of these staff is drawn from the communities or crisis-affected populations themselves.

This can blur distinctions between what constitutes professional and private relationships with other members of the communities with whom we work. However, by accepting work with humanitarian or development agencies, humanitarian and development workers also have to accept the special responsibility of care that goes with the job.

Harassment: Harassment means any unwelcome comment or behavior that is offensive, demeaning, humiliating, derogatory, or any other inappropriate behavior that fails to respect the dignity of an individual. Harassment can be committed by or against any member of the community with whom we work, partners, employee, vendor or other individual visiting or doing business with an agency.

Sexual & gender-based violence (SGBV): Physical, sexual and psychological violence occurring in the family and in the community, including battering, sexual abuse of female children, dowry related violence, marital rape, female genital mutilation and other traditional practices harmful to women, non-spousal violence, violence related to exploitation, sexual harassment and intimidation at work, in educational institutions and elsewhere, trafficking in women, forced prostitution, and violence perpetrated or condoned by the state.

Sexual exploitation: Sexual exploitation means any actual or attempted abuse of a position of vulnerability, differential power or trust, for sexual purposes, including, but not limited to, profiting monetarily, sexually or politically from the sexual exploitation of another. In these situations, the potential victim believes she/he has no other choice than to comply; this is not consent and it is exploitation. Some examples include, but are not limited to:

• Humanitarian/development worker demanding (or accepting) sex in exchange for material assistance, favors, or privileges.
• Teacher insisting on (or accepting) sex in exchange for passing grade or admission to class.
• Refugee leader demanding (or accepting) sex in exchange for favors or privileges.
• Security worker insisting on (or accepting) sex in exchange for safe passage.
• Driver demanding (or accepting) sex to give a female person a seat in the vehicle.

Exploitation is using one’s position of authority, influence or control over resources, to pressure, force or manipulate someone to do something against their will or unknowingly, by threatening them with negative repercussions such as withholding project assistance, not approving an employee’s work support requests, threatening to make false claims about an employee in public, etc.

Sexual harassment: Sexual harassment means any unwelcome sexual advance, comment, expressed or implied sexual demand, touch, joke, gesture, or any other communication or conduct of a sexual nature, whether verbal, written or visual, by any person to another individual within the scope of work. Sexual harassment may be directed at members of the same or opposite sex and includes harassment based on sexual orientation. Sexual harassment can occur between any one or more individuals, employee or beneficiary, regardless of their work relationship.

Sexual abuse: Sexual abuse is actual or threatened physical intrusion of a sexual nature, including inappropriate touching, by force or under unequal or coercive conditions.

Survivor or victim the person who is, or has been, sexually exploited or abused.

Protection: Ensuring that individual basic human rights, welfare and physical security are recognized, safeguarded and protected in accordance with international standards.

Discrimination: Discrimination means exclusion of, treatment of, or action against an individual based on social status, race, ethnicity, color, religion, gender, sexual orientation, age, marital status, national origin, political affiliation or disability.

 

 

Organization for Social Development (OSD)

                   Code of conduct for employees, interns, volunteers, Consultants, suppliers etc.

 

I, ----------------------------------am aware of the safe guarding policy (child safeguarding policy, PSEA and Harassment policy and staff safeguarding policy) and I will never

• Engage in sexually exploitative relationships with members of the communities in which we work. I will not exchange money, goods, or services for sex, including sexual favor or other forms of humiliating, degrading or exploitative behavior.
• Engage the services of sex workers or otherwise exchange of money for sex, regardless of the local or national law regarding sex work or the laws of their home country.
• Engage in sexual relationships with project participants of direct assistance from OSD projects or their collaborate organizations.
• Request or imply a request for any service or sexual favor from members of the communities in which we work, in return for anything including protection, assistance (goods or services).
• Support or take part in any form of sexually exploitative or abusive activities.
• Engage in sexual activity with a person under the age of 18 regardless of the local age of majority or age of consent.

I am aware of involvement in any inappropriate acts of child discrimination, physical, emotional, psychological; sexual abuses will result in termination of employment. In addition, as per the organization’s rules and regulations I will be responsible for my actions if I get involved in any of the above listed acts.

Signature -----------------

Name -----------------------------

Job Position---------------------------------

  

 

 

Annex:  2

Communications Plan -Sample Template

OBJECTIVES	ACTIVITY	COMMUNICATION TOOLS	RESPONSIBLE	TIME FRAME	IMPACT	INDICATORS	TARGET AUDIENCE
Strategic Objective 1 :
Strategic Objective 2 :

 

 

 

 

 

 

        Organization Gender Policy                                                    

 

Contents

1.Background of the Organization. 2

1.1 Legal status. 3

1.2 Vision. 3

1.3 Mission. 4

1.4 Thematic Operation. 4

1.5 Overall Objective. 4

1.6 Values. 5

2. Rationale. 5

3.OSD’s Policy in Context of National Laws and International Conventions. 6

4.Principles of the Policy. 6

5.Goals. 8

6.Scope of Application. 8

7. Our Programming. 8

7.1 Applying Gender Analysis. 8

7.2 Collecting and Using Sex Disaggregated Data. 8

7.3 Ensuring Gender Sensitive Project Design. 9

7.4 Ensuring an Active and Inclusive Participatory Approach. 9

7.5 Practicing Human Resource Policy with Gender lenses. 9

7.6 Gender Sensitive Indicators in Monitoring and Evaluation Frameworks. 9

8.Creating an Enabling Organizational Environment 9

8.1 Organizational Development 9

8.2 Finance and Resource Allocation. 10

8.3 Research. 11

8.4 Advocacy and Communications. 11

8.5 Partnerships. 12

8.6 Policy Dialogue. 12

8.7 Quality, Accountability and Learning. 13

9.Implementation and Accountability. 13

9.1 All OSD Employees and Volunteers. 13

9.2 Directors, Supervisors and Human Resource Managers. 13

9.3 OSD Board and General Assembly. 14

9.4 Executive Director /Head Office. 14

10.Associated Policies. 14

11. Gender Glossary. 15

 

 

 

 

 

 

 

 

 

 

 

 1.Background of the Organization

Rooted in pursuit of the public interest and social justice, Organization for Social Development (formerly Organization for Social Justice in Ethiopia) has been engaged, since its establishment in 2003, in wide and diverse interventions ranging from advancement of human welfare, democracy and good governance to maximizing the role of the private sector in promoting social justice by upholding Corporate Social Responsibility (CSR) as the main thematic area of its operation.  Realizing the enormous but untapped potential of the private sector to advance human rights and materialize people-centered all inclusive development in the country, OSD has launched in 2010 a strategic plan to promote Corporate Social Responsibility (CSR) among the business community, government organs and the public.     

Since then, OSD has implemented projects that achieved an increased awareness and understanding on CSR and enhanced capacity of the private sector to comply with international and domestic principles and standards which deal with different aspects of CSR.  Having research as one of its main components researches on private sector and civil society partnership, the role of the private sector in advancing reproductive health in Ethiopia, engagement of the private sector in improving welfare of disadvantaged and vulnerable groups and,  corporate social responsibility and child welfare, have been undertaken.  Analyzing legal and policy environments and practices as well as bringing on board international initiatives and best practices, these researches substantially contributed in addressing the information gap with regard to CSR practice in Ethiopia and have provided baseline for contextualizing and adopting CSR initiatives. In addition to conducting researches OSD works to introduce the concept, to raise awareness on different aspects of CSR, to enhance implementation by the private sector and to advocate for creation of an enabling legal and policy environment by using broadcasting and print media, organizing trainings targeted at selected representatives from governmental offices, civil society, Chamber of Commerce and Sector Associations; promoting good practices using different mechanisms and; establishing partnerships/networks with different entities including chambers of commerce and sect oral associations.

 

1.1 Legal status

Organization for Social Development (OSD) (formerly called Organization for Social Justice in Ethiopia (OSJE)) is an indigenous, non-profit, non-partisan, non-governmental organization. Under the requirements set by a new Charities and Societies Proclamation (entered into force on February 13, 2009) Organization for Social Development re-registered as Ethiopian Resident Charity by Federal Democratic Republic of Ethiopia, Ministry of Justice, Charities and Societies Agency on November, 2019 – License Number 0843 assuming the current name. 

1.2 Vision

Seeing a community wherein equitable access to basic economic and social services for every citizen is ensured.

 

1.3 Mission

 We foster social development with special emphasis to environment protection, access to standard and quality social services and productivity by promoting Corporate Social Responsibility (CSR) among business organizations, citizens, and government bodies.

 

1.4 Thematic Operation

The general thematic areas of which Organization for Social Development engages itself in are:-

• Health
•  Education
•  People with Disability
• Environmental Protection
• Women Economic Empowerment
•  Refugees etc……

Specifically Organization for Social Development has been focusing on promoting the concept Corporate Social Responsibility among private businesses, citizens and government bodies as to improve and strengthen the role played by business firms in the development endeavors of the country. For this purpose, OSD organizes its interventions into three categories:

•  Awareness and Capacity Building- focuses on ensuring enhanced CSR activities and understanding among business organizations, the government and the general public
• Research- focuses on improving CSR knowledge and information as well as identifying further intervention areas to improve laws, policies and practices related to CSR in Ethiopia
•  Advocacy and Promotion- aims at creating an enabling and favorable legal and policy environment for CSR practices and improve CSR performance among the business community

1.5 Overall Objective

To increase involvement of private sectors in the development process of the country, through awareness creating, promoting practices, and advocating for an enabling environment pertaining to Corporate Social Responsibility in the country.

• To promote environment protection
• To promote accessibility of standard and quality public/social services to the society (education, health, food, shelter)
• To encourage productivity and quality services

1.6 Values

      The core values that inspired the vision and mission of the Organization for Social Development    include:

• Lasting Impact
• Participation and empowerment
• Self-actualization
• Equality
• Justice
• Integrity
• Accountability

 2. Rationale

OSD’s Gender policy emphasizes flexibility, inclusiveness, recognition of the individual’s worth, her/his uniqueness in the society in terms of talents, gifts and capabilities and the indispensable role in being a productive member of society. While fully recognizing the principles of equality and equity between/among individuals and groups regardless of sex, ethnicity, faith, political views, culture etc. Our commitment to programmatic excellence therefore necessitates that our work and our organization engage, empower and benefit both women and men. We believe that this gender policy, by providing a clear and consistent message on our gender equality commitment, ensure greater consistency of gender principles, policies and practices across the organization, will maximize project effectiveness, strengthen our organization, enhance program resources, improve coordination with internal and external partners, and increase accountability.

3.OSD’s Policy in Context of National Laws and International Conventions

National laws and international conventions directly relevant to equality, equity, justice and other issues certainly provide favorable environment for and organization that is engaged in development at the grass root  level towards bringing about a harmonious social order through ensuring gender equality and equity. OSD fully recognizes that significant progress has so far been made towards creating a better world in which meaningful equality is legally recognized as a right for all.

Our organization strongly emphasizes that it is a moral, legal and institutional obligation to have its own policy in place, implement the fundamental principles of complementarity, inclusiveness, equality, equity and non-discrimination in all of its development activities. This belief emanates not only from the organization’s being a subject of national laws but also from its mission – commitment to transforming the grim conditions of inequality, particularly between women and men and girls and boys, in socio-economic spheres and reducing the resultant poverty.

OSD believes that development goals can be achieved in an environment where complementarity, inclusiveness, equality and equity and non-discrimination are fully applied and practiced. It is absolutely imperative for the organization to incorporate these values in its entire project design and implementation phases. OSD fully accepts and gives due respects to the provisions of both national laws and international conventions and is committed to build the foundation for achieving the desired goals of equality, justice and equity in today’s communities characterized by diversity.

4. Principles of the Policy

The achievement of gender equality requires adherence to the following principles and that:

• Gender equality and equity are central to OSD's being and doing; Gender equality must be considered as an integral part of all OSD’s policies, programs and projects.
• Achieving gender equality requires the recognition that every policy, program and project affects women and men differently. Women and men have different perspectives, needs, interests, roles and resources - and those differences may also be reinforced by class, educational background and age. Policies, programs and projects must address the differences in experiences and situations between and among women and men.
• Achieving gender equality does not mean that women become the same as men. Equality means that one's rights or opportunities do not depend on being male or female.
• Women's empowerment is central to achieving gender equality. Through empowerment, women become aware of unequal power relations, gain control over their lives, and acquire a greater voice to overcome inequality in their home, workplace and community.
• Promoting the equal participation of women as agents of change in economic, social and political processes is essential to achieving gender equality. Equal participation goes beyond numbers. It involves women's equal right to articulate their needs and interests, as well as their vision of society, and to shape the decisions that affect their lives, whatever cultural context they live in. Partnership with women's organizations and other groups working for gender equality is necessary to assist this process.
• Gender equality can only be achieved through partnership between women and men. All society benefits when choice for both women and men is enlarged. Gender equality is an issue that concerns both women and men, and achieving it will involve working with men to bring about changes in attitudes, behavior, roles and responsibilities at home, in the workplace, in the community, and in national levels.
•  Achieving gender equality will require specific measures designed to eliminate gender inequalities. Given ingrained disparities, equal treatment of women and men is insufficient as a strategy for gender equality. Specific measures must be developed to address the policies, laws, procedures, norms, beliefs, practices and attitudes that maintain gender inequality. These gender equity measures, developed with stakeholders, should support women's capacity to make choices about their own lives.
• All OSD staff are committed to regularly reviewing the implementation of the Gender Policy in order to ensure that learning from the experience of staff and partner organizations in promoting and mainstreaming gender equality is facilitated, and learning is incorporate into efforts to improve both, policy and practice.

 

5.Goals

The gender policy aims to ensure gender equality and women’s empowerments are central to OSD’s:

• Programs at all levels;
• Organizational culture and behaviors;
•  Financial resource allocations
• And public image.

 

6.Scope of Application

This policy applies across OSD's development programming; to our organization and to all OSD’s employees and volunteers.

7. Our Programming

7.1 Applying Gender Analysis

Gender equality means recognizing that men and women often have different needs and priorities, face different constraints, have different aspirations, and contribute to development in different ways. To enable the exploration and understanding of gender differences, we will systematically deploy and continuously improve tools to assess the needs of both males and females in our formative research and monitoring and evaluation. We will also strive to ensure that all staff understands the different roles, responsibilities and experiences of women and men in relation to the issues being addressed by the project. Gender focal persons will undertake targeted analyses aimed at testing hypotheses, gaining deeper understanding of gender-based needs, opportunities and constraints, and improving our approach to gender integration.

7.2 Collecting and Using Sex Disaggregated Data

All OSD staff systematically collects sex and age disaggregated data during any assessments and all program work including participants/beneficiary registration, monitoring and evaluation, complaint/feedback mechanism, etc. Ensure that data management and analysis include sex and age disaggregated data when compiling the results of research and assessments, and recommendations for intervention.

7.3 Ensuring Gender Sensitive Project Design

Draw upon research, analysis and experiences to design projects that advance gender equality through our operations.

7.4 Ensuring an Active and Inclusive Participatory Approach

OSD staff seek the active participation of women, girls, boys and men in the design, implementation and monitoring of programs. Particular efforts are required in contexts where women have less access than men to decision-making processes and spaces. 

7.5 Practicing Human Resource Policy with Gender lenses

Ensure all our human resources policies and practices are developed with a gender lens. Report on gender and diversity balance in staffing and governance structures along with average pay levels. Implement targeted strategies to redress any evidence of gender inequality in gender and diversity balance and pay levels.

7.6 Gender Sensitive Indicators in Monitoring and Evaluation Frameworks

Monitoring and Evaluation (M&E) Frameworks include quantitative and qualitative gender-sensitive indicators that point out gender-related changes in the areas in which OSD works. The terms of reference of internal and external reviews and evaluations ensure consideration and analysis of gender impact through OSD’s interventions. Capture systematically and share the programmatic lessons learned in relation to intended and unintended impacts on the lives of women and girls, including impact on gender equality.

8.Creating an Enabling Organizational Environment

To fully implement the above mentioned activities for gender mainstreaming and targeted interventions, OSD implements the following institutional mechanisms and processes.

8.1 Organizational Development

• Ensure that specialized gender functions are in place and adequately resourced.
• Recognize knowledge related to gender concerns and gender-related analysis as one of the core areas of capacity for staff and build capabilities throughout the agency.
• Build a common understanding around gender through staff and volunteers induction and training.
• Ensure that all training across OSD the agency is gender-sensitive.
• Equal opportunities for training and development of OSD staff at headquarters and branch level.
• Make all HR systems and policies gender-sensitive and responsive, and integrate gender indicators into staff objectives, accountabilities and performance management systems.
• Prioritize gender sensitivity in all terms of reference, including TORs for external consultants.
• Determine the nature, structure and causes of gender imbalances in staff throughout OSD and set targets for recruitment, retention and promotion of staff accordingly, particularly women in senior positions. 
• Develop strategies for reaching those targets, including:

Affirmative action;

• Career development opportunities including development posts, training and internal promotion;
• Family friendly and flexible working policies to allow staff to fulfill caring responsibilities (including job-sharing, maternity, paternity and parental leave, and policies on childcare provision);
• Sexual harassment policies;
• Safe and secure transport and accommodation when travelling, particularly for women staff; and – equal pay for work of equal value.
• Use information technology to facilitate home working, flexible working hours and virtual working to strike a balance between home responsibilities and work;
• Ensure that staff access to and use of information technology is gender equitable.

 

8.2 Finance and Resource Allocation

• OSD tracks progress on gender allocations.
• Adequate resources are allocated to gender work across the organization.
• Commit a high level of support and resources to gender work and functions.
•  Include a gender dimension in all finance guidelines, instructions and policies.
• Develop and refine tools and methods for assessing and reporting on gender related investments at every level of the organization.
• Maintain and update annually qualitative and quantitative information on gender related expenditure.

8.3 Research

 OSD promotes evidence-based research on the link between gender equality programming and project outcomes/impact. OSD can implement specific research activities in order to fill research and evidence gaps identified related to gender needs, roles and relations.

8.4 Advocacy and Communications

• Design fundraising proposals and appeals to fulfill OSD's goals and objectives on gender equality and equity.
• Inform donors and partners about OSD's gender goals and objectives and give positive examples of OSD's gender work.
• As part of the recruitment, OSD will actively encourage the recruitment of new supporters who are gender sensitive.
• All materials and general communications will be formulated to reflect OSD's goals and objectives on gender equality and equity, challenging gender stereotypes and recognizing diversity. 
•  Gender-sensitive language and images will be used in all internal and external communications.
• Whenever possible, women’s and girls’ voices will be heard in the first person.
• Ensure that women and men are proportionately represented during press briefings and other public relations activities.
• Gender analysis will be central to the development of all advocacy, communication, fundraising and campaigns work and gender concerns will be incorporated into activities wherever possible.

8.5 Partnerships

• OSD actively engages with partners in implementing the OSD’s Gender Policy. This might include resource allocation, training, information, networking, etc. with a particular emphasis on strengthening organizations working towards gender equality, learning from those who are more advanced and influencing those who are not. 
• Partnerships are strengthened with NGOs and UN agencies to ensure learning and exchange, coordination and cooperation for the achievement of common gender equality objectives.

8.6 Policy Dialogue

OSD activities are not only limited to programs and projects. Through policy dialogue, OSD and its partners organizations exchange views and information and raise issues related to socio and economic problems. Policy dialogue is an important way in which OSD works with its partners to achieve gender equality results. It may be carried out at formal discussions such as consultative groups, or informally through regular contacts.

Promoting gender equality in policy dialogue means:

• Developing and maintaining knowledge of the nature and scope of gender inequality in different parts of the country, or sector, and of strategies to overcome it;
• Addressing gender equality in all policy dialogue with civil society, government institutions and private sector, especially through the use of the Beijing Platform For Action and the Convention on the Elimination of All Forms of Discrimination Against Women as a basis for discussions;
• Sharing with partners good practices, project and program experiences, and lessons in promoting gender equality;
• Using policy dialogue activities to identify constraints, opportunities, and entry points for promoting gender equality; and
• Encouraging participatory approaches by involving women's organizations and gender equality advocates in the policy dialogue process 

8.7 Quality, Accountability and Learning

Knowledge on the impact of gender-equality policy and practice is systematically documented and publicly shared through the OSD Annual Learning Review and other internal knowledge sharing platforms. Tracking best practice externally is also encouraged through publications, reports, conferences, working groups and others as relevant.

 

9.Implementation and Accountability

Successful realization of this policy will require consistent and active participation by all staff. Responsibilities and actions will require collaboration and effective linkages across departments and levels of OSD. This policy manual applies to all work throughout the organization program, planning, implementation, monitoring, evaluation, finance and human resource management.

Effective implementation of the policy will require commitment and validation, organizational support for activities to advance the knowledge and skills of staff for efficient gender analysis in their area of work. The director will be expected to institutionalize mechanisms for building capacity among their staff providing, information, training or technical support staff needed to assure the policy's success.

 

9.1 All OSD Employees and Volunteers

• It is the responsibility of all OSD and volunteers to uphold the Core Principles and Commitments of this policy.
•  All staff of OSD will be expected to show a gender perspective in their work.

9.2 Directors, Supervisors and Human Resource Managers

• Directors, Supervisors and Human Resource Managers must ensure that all OSD employees and volunteers understand and comply with this policy. Human Resource Heads are also responsible for robust recruitment, induction and training, whilst Directors and Supervisors are responsible for performance management to ensure the implementation of the policy.
• Heads of departments and Officers will demonstrate the will to implement the required attitudinal changes implied by the policy

9.3 OSD Board and General Assembly

• OSD members of general assembly and board will ensure this policy is implemented, monitored and reported against every year.
•  OSD members of general assembly and board are responsible for defining work plans and procedures to uphold and operationalize this policy.
•  OSD members of general assembly and board will ensure head office and branches have in place the resources to implement this policy.

9.4 Executive Director /Head Office

•  OSD Executive Director will coordinate oversight of this policy and review and update as required. The Executive Director will provide support to the department heads and directors on the collection and analysis of reporting against the policy.
• The Executive Director of OSD will be accountable for the implementation of the policy.
• The Executive Director of OSD will report on the implementation process annually to the Board of OSD, with an audit in line with annual reports.
• The Executive Director of OSD is responsible for implementation details for Head Quarter and Branch programs.
• The national and regional gender working groups of OSD will monitor and review the implementation process.
• The annuals plans and Strategic Plans will ensure that planned activities on gender receive adequate resource allocation
• The organizational mechanisms and gender posts necessary for implementation of the gender policy will be put in place and resourced.

 

10.Associated Policies

This policy is complementary to the set of policies and procedures that all OSD employees are required to adhere to in the Human Resource Management Policy, Safeguarding Policy and any further codes or related policies defined by OSD.

11.Gender Glossary

Gender refers to the social differences between females and males throughout the life cycle that are learned, and though deeply rooted in every culture, are changeable over time, and have wide variations both within and between cultures. “Gender,” along with class and race, determines the roles, power and resources for females and males in any culture. Historically, attention to gender relations has been driven by the need to address women’s needs and circumstances as they are typically more disadvantaged than men. Increasingly, however, the humanitarian community is recognizing the need to know more about what men and boys face in crisis situations.

Sex roles are biologically determined. These different roles are influenced by historical, religious, economic, cultural and ethnic factors.

Social norms are the social rules, either explicit or implicit, that define our expectations of appropriate behavior between people. They include things like shaking hands when you meet someone, standing a certain distance away from another person when you speak.

Gender norms are a subset of social norms, and these are the behavioral expectations around a person's sex.

Gender roles are a collection of socially learnt behaviors and expectations about characteristics and aptitudes that are considered to define what it means to be a woman or a man (or a boy or a girl) in a given society or culture. They are also about relations between women and men, who should do what, who has control over decision-making, access to resources and benefits. For example, in some societies, it is expected that only women will do the cooking (it is not appropriate for men). In some societies, it is expected that men will kiss and hug each other when they meet and greet – but in other societies this is considered to be a very inappropriate behavior. In some societies it is common for women to wear their hair in short styles, but in other places it is only acceptable for women to wear their hair long. The same goes for men - in some communities, long hair for men is common and 'the norm' and in others it is not normal. These are not characteristics, skills, or behaviors that we are born with – we learn what is considered to be appropriate to do (as males and females) in our community – this is our gender identity. This shows gender roles vary from society to society.

Gender identities and gender relations are critical aspects of culture because they shape the way daily life is lived in the family, but also in the wider community and the work place.

Finally but importantly, societies, cultures, gender roles and relations are continually being renewed and reshaped. Gender definitions change over time in response to many factors like social, economic, legal, policy and civil society. During this process of evolution, some values are reaffirmed, while others are challenged as no longer appropriate. It is important to remember that gender roles and relations can and do change.

Social construction of gender refers to how society values and allocates duties, roles and responsibilities to women, men, girls and boys. This differential valuing creates the gender division of labor and determines differences in access to benefits and decision making which in turn influences power relations and reinforces gender roles. This is done at various levels of gender socialization including family, religion, education, culture, peers and the media.

Gender issue is a point of gender inequality that is undesirable and therefore an intervention. It there is inequality, inequity or differentiated treatment of an individual or a group of people purely on the basis of social expectations and attributes of gender. Gender issues are sometimes called gender concerns.

Gender discrimination occurs when men or women are treated differently (restricted or excluded) in the family, in the workplace and society due to gender-stereotypes which prevent them from enjoying their full potential and human rights. Gender stereotypes are a set of characteristics that a particular group assigns to women or men, they are often incorrect, and usually limit what an individual can do

Gender equality refers to the equal enjoyment of rights, opportunities, resources and rewards by women, girls, boys and men. Equality does not mean that women, girls, boys and men are the same but that their enjoyment of rights, opportunities and life chances are not governed or limited by whether they were born female or male.

Gender equity is the process of being fair to women, girls, boys and men. To ensure fairness, strategies and measures must often be available to compensate for women’s and girls’ historical and social disadvantages that prevent them from otherwise operating on the same playing field with men and boys.

Gender mainstreaming was defined by the Economic and Social Council of the United Nations as the process of assessing the implications for women, girls, boys and men of any planned action, including legislation, policies or programs, in all areas and at all levels. It is a strategy for making women’s as well as men’s concerns and experiences an integral dimension of the design, implementation, monitoring and evaluation of policies and programs in all political, economic and societal spheres so that women and men benefit equally and inequality is not perpetuated.

Gender analysis examines the relationships between females and males. It examines their roles, their access to and control of resources and the constraints they face relative to each other. A gender analysis should be integrated in any needs assessments, sector assessments or situational analysis, and should form the basis of design and development of interventions and strategies.

Sex and age disaggregated data (SADD) is data that is broken down according to a person’s sex and age or age group. SADD can be collected using both quantitative and qualitative methods.

Gender Division of Labor is a pattern where women are given one set of gender role and men are given another set. Almost in every society two sexes are assigned separate and specific gender roles even if the roles differ from culture to culture. These roles can be divided in to three broad categories. These are:-

• Productive role: - it includes production of goods and services for consumption by the household or for income and performed by both men and women. Women’s productive work is often carried out alongside their domestic and child care responsibilities; tends less visible and less valued than men’s productive work. It includes wage employment, trade and marketing.
• Reproductive role: - This work involves the bearing and rearing of children, all tasks associated with domestic work and maintenance of household members. Reproductive work includes cooking, washing, collecting fuel, caring for the sick and elderly. These functions are often labor intensive and lack of technologies and service to lessen the burden. Women are mainly responsible for these works and usually unpaid.
• Community roles: - women’s community activities include providing and maintenance of resources which are used by everyone, such as water, health care, and education. It encompasses labor inputs towards organization and sustainability of cultural events, networks and services in communities including management of environmental resources. Such functions include ceremonies involving celebrations of birth, marriage and other spiritual and social-cultural happenings and mobilization of local resources for community development including local politics (membership in cultural and religious organizations/groups). These activities are normally unpaid and carried out in their free time.

Gender-related needs - As a result of gender roles; needs are also gender-bound. Gender-related needs can be divided into practical needs and strategic needs:

•  Practical needs are the concrete, material needs that must be met in order to satisfy the basic needs of life. They can include the needs for nourishment, health care and shelter. Practical needs are met by concrete actions, such as providing services, education, credits, and so on. Solving problems connected with practical genderrelated needs does not change the power relations between women and men in a community.
• Strategic gender-related needs are connected with the status of women and men and the power structures within the community. Strategic gender-related needs include, for example, the right to own and inherit money and land, the right to the same wages or the same work, the right to make decisions about one’s own body and the right to develop oneself on one’s own terms. The satisfaction of such strategic needs requires structural and attitudinal changes in the community.

Gender-based violence (GBV) is an umbrella term for any harmful act that is perpetrated against a person’s will and that is based on socially ascribed (gender) differences between females and males. The nature and extent of specific types of GBV vary across cultures, countries and regions. Examples include sexual violence, including sexual exploitation/abuse and forced prostitution; domestic violence; trafficking; forced/early marriage; harmful traditional practices such as female genital mutilation and widow inheritance.

Women’s and girls’ empowerment involves awareness-raising, building of self-confidence, expansion of choices, increased access to and control over resources and actions to transform the structures and institutions which reinforce and perpetuate gender discrimination and inequality.

Gender sensitivity is the ability to perceive existing gender differences, issues and equalities, and incorporate these into strategies and actions.

Gender responsiveness is planning and implementing activities that meet identified gender issues/concerns that promote gender equality.

Gender transformation describes a situation where women and men change their way of thinking from patriarchal towards a gender equality perspective.

 

Organization

Protection from Sexual Exploitation, Abuse and Harassment (PSEAH) Policy

 

                                                                                         

Contents

1. Background of the Organization...................................................................................................... 2

1.1 Legal status............................................................................................................................... 2

1.2 Vision....................................................................................................................................... 3

1.3 Mission..................................................................................................................................... 3

1.4 Thematic Operation.................................................................................................................. 3

1.5 Overall Objective...................................................................................................................... 4

1.6 Values...................................................................................................................................... 4

2. Policy Statement............................................................................................................................ 4

3. Scope of the Policy......................................................................................................................... 5

4. Roles and Responsibilities............................................................................................................... 6

4.1 OSD employees, donors or collaborators must never:................................................................ 6

4.2 OSD collaborators, donors, visitors… must:................................................................................ 6

4.3 Managers and Supervisors must:............................................................................................... 7

4.4 OSD commits to:....................................................................................................................... 7

5. Procedure for Reporting and Investigating SEAH............................................................................. 8

5.1 Reporting Incidents................................................................................................................... 8

5.2 Responding Reports.................................................................................................................. 9

6. Definitions.................................................................................................................................... 11

 

 

 

 

 

 

 

1. Background of the Organization

Rooted in pursuit of the public interest and social justice, Organization for Social Development (formerly Organization for Social Justice in Ethiopia) has been engaged, since its establishment in 2003, in wide and diverse interventions ranging from advancement of human welfare, democracy and good governance to maximizing the role of the private sector in promoting social justice by upholding Corporate Social Responsibility (CSR) as the main thematic area of its operation.  Realizing the enormous but untapped potential of the private sector to advance human rights and materialize people-centered all inclusive development in the country, OSD has launched in 2010 a strategic plan to promote Corporate Social Responsibility (CSR) among the business community, government organs and the public.     

Since then, OSD has implemented projects that achieved an increased awareness and understanding on CSR and enhanced capacity of the private sector to comply with international and domestic principles and standards which deal with different aspects of CSR.  Having research as one of its main components researches on private sector and civil society partnership, the role of the private sector in advancing reproductive health in Ethiopia, engagement of the private sector in improving welfare of disadvantaged and vulnerable groups and,  corporate social responsibility and child welfare, have been undertaken.  Analyzing legal and policy environments and practices as well as bringing on board international initiatives and best practices, these researches substantially contributed in addressing the information gap with regard to CSR practice in Ethiopia and have provided baseline for contextualizing and adopting CSR initiatives. In addition to conducting researches OSD works to introduce the concept, to raise awareness on different aspects of CSR, to enhance implementation by the private sector and to advocate for creation of an enabling legal and policy environment by using broadcasting and print media, organizing trainings targeted at selected representatives from governmental offices, civil society, Chamber of Commerce and Sector Associations; promoting good practices using different mechanisms and; establishing partnerships/networks with different entities including chambers of commerce and sect oral associations.

1.1 Legal status

Organization for Social Development (OSD) (formerly called Organization for Social Justice in Ethiopia (OSJE)) is an indigenous, non-profit, non-partisan, non-governmental organization. Under the requirements set by a new Charities and Societies Proclamation (entered into force on February 13, 2009) Organization for Social Development re-registered as Ethiopian Resident Charity by Federal Democratic Republic of Ethiopia, Ministry of Justice, Charities and Societies Agency on November, 2019 – License Number 0843 assuming the current name. 

1.2 Vision

Seeing a community wherein equitable access to basic economic and social services for every citizen is ensured.

1.3 Mission

 We foster social development with special emphasis to environment protection, access to standard and quality social services and productivity by promoting Corporate Social Responsibility (CSR) among business organizations, citizens, and government bodies.

1.4 Thematic Operation

The general thematic areas of which Organization for Social Development engages itself in are:-

•  Health
• Education
•  People with Disability
• Environmental Protection\
• Women Economic Empowerment
• Refugees etc……

Specifically Organization for Social Development has been focusing on promoting the concept Corporate Social Responsibility among private businesses, citizens and government bodies as to improve and strengthen the role played by business firms in the development endeavors of the country. For this purpose, OSD organizes its interventions into three categories:

•  Awareness and Capacity Building- focuses on ensuring enhanced CSR activities and understanding among business organizations, the government and the general public
• Research- focuses on improving CSR knowledge and information as well as identifying further intervention areas to improve laws, policies and practices related to CSR in Ethiopia
• Advocacy and Promotion- aims at creating an enabling and favorable legal and policy environment for CSR practices and improve CSR performance among the business community.

1.5 Overall Objective

To increase involvement of private sectors in the development process of the country, through awareness creating, promoting practices, and advocating for an enabling environment pertaining to Corporate Social Responsibility in the country.

• To promote environment protection
• To promote accessibility of standard and quality public/social services to the society (education, health, food, shelter)
• To encourage productivity and quality services

1.6 Values

The core values that inspired the vision and mission of the Organization for Social Development include:

• Lasting Impact
• Participation and empowerment
• Self-actualization
• Equality
• Justice
• Integrity
•  Accountability

2. Policy Statement

The Organization for Social Development is committed to fostering a safe environment in its project activities, through proactive, accessible and effective approaches to prevent and respond to sexual exploitation and abuse(SEAH).SEAH perpetrated by humanitarian or development personnel violates fundamental human rights.it may also be a criminal act. OSD will act ethically and with integrity and not abuse the power and trust that comes with being a part of our organization.

The OSD does not tolerate SEAH in any form. As an integral component of a rights-based organization, OSD must take an active role in preventing, reporting and responding to incidents of suspected SEAH. While SEAH affects all members of society, its consequences disproportionately affect members of social groups who experience intersecting forms of systemic discrimination or barriers, including sex, gender identity and expression, sexual orientation, race, religion, Indigenous identity, ethnicity, disability or class. SEAH involves abuses of power and power imbalances and is under reported for many reasons, including stigmatization, risk of further trauma, and barriers to accessing recourse. SEAH is prevalent and silence surrounds it. The OSD commits to support survivors whether or not they choose to report through the OSD mechanisms or through other legal means.

This policy aims to prevent SEAH through education and accessible reporting mechanisms, and to respond to disclosures and reports effectively, confidentially and in a timely manner. This policy operates in conjunction with the OSD principles of conduct which sets out the conduct expected of all volunteers and employees acting in any capacity in the OSD.

3. Scope of the Policy

This policy applies to all people acting for the Organization for Social Development or in collaboration with OSD projects, including the persons working with the OSD and collaborator organizations: employees, board members, contractors, volunteers, suppliers, trainees…

This policy also applies to actual and suspected acts of SEAH by OSD representatives and partners against individuals in the communities in which we work. It also serves as a guide for OSD staff and collaborators to act ethically in their professional and personal lives. OSD employees and collaborators are often in positions of power in relation to the communities with which we work, especially women and children in situations of vulnerability. All collaborators, visitors, donors and staff have an obligation to use their power respectfully and must not abuse their power and influence over the wellbeing of participants and community members in communities where OSD works.

4. Roles and Responsibilities

All those who work with OSD must adhere to this policy and report concerns about potential SEAH of others by any OSD staff, visitors, collaborators, and suppliers’ e.tc.  Any violation of these standards will result in disciplinary action, up to and including termination of employment or other relationship with OSD.

4.1 OSD employees, donors or collaborators must never:

• Engage in sexually exploitative relationships with members of the communities in which we work. They will not exchange money, employment, goods, or services for sex, including sexual favor or other forms of humiliating, degrading or exploitative behavior.
• Engage the services of sex workers or otherwise exchange of money for sex, regardless of the local or national law regarding sex work or the laws of their home country. 
• Engage in sexual relationships with beneficiaries of direct assistance from OSD projects or their collaborate organizations.
• Request or imply a request for any service or sexual favor from members of the communities in which we work, in return for anything including protection, assistance (goods or services) or employment.
• Support or take part in any form of sexually exploitative or abusive activities.
• Engage in sexual activity with a person under the age of 18 regardless of the local age of majority or age of consent. Mistaken belief of the age of the person is not a defense.

4.2 OSD collaborators, donors, visitors… must:

• Treat all beneficiaries, members of the communities, in which we operate, and other collaborators, visitors, donors with dignity and respect.
• Actively contribute to creating and maintaining a culture that prevents SEAH, encourages reporting, and promotes implementation of this policy.
• Be aware that SEAH constitutes acts of gross misconduct, is grounds for termination of employment or other relationship, and maybe subject to prosecution.
• Report any incident, allegation, concern or suspicion of SEAH of another person in the communities in which we work, including potential abuse by other NGO workers or volunteers.
• Be aware that absence of evidence or lacks of clarity over consent are not reasonable grounds to delay or fail to report SEAH.
• Treat any information communicated to them in connection with any part of this procedure as confidential, including an investigation into allegations of SEAH.
• Cooperate fully, promptly and in good faith in any investigation of SEAH under this policy.

4.3 Managers and Supervisors must:

• Take responsibility for creating and maintaining an environment that prevents SEAH, encourages reporting, and promotes implementation of this policy.
• Ensure that incidents of SEAH are promptly and adequately addressed in a way that demonstrates fairness, impartiality and respect for confidentiality, and is free from intimidation or favoritism.
• Have a personal responsibility to report or appropriately address any known act of SEAH.
• Be free from gender bias and discrimination to ensure fairness when responding to disclosures or reports.
• Refrain from questions or judgments that imply blaming the survivor or disbelieving their experience based on gender identity.

 

4.4 OSD commits to:

A. Make collaborators aware of this policy, through on boarding, training and other measures.

B.  Ensure that those with whom we collaborate:

I. Adopt PSEAH policies with similar principles, clear obligations requiring their employees and collaborators to comply with and report breaches of their policies, and an organizational commitment to act robustly to reports;

II. Agree in the collaboration agreement that failure to do all they can to prevent; report and respond appropriately to allegations of SEAH constitute grounds for the OSD to terminate their collaboration.

C)  Engage with communities in which we work and inform them of their right to protection from SEAH, the standards of behavior they should expect from OSD staff and collaborators, the importance of reporting, and how to safely and confidentially report any SEAH.

D) Designate the most appropriate reporting mechanism for each project:

I) in-person reporting to designated SEAH Focal Persons in OSD ; or

II) dedicated phone hotline monitored by local partners, with reporting channels to the Project Manager or Project Director; or

III) A dedicated OSD SEAH reporting email address.

E) Communicate the reporting mechanism for each project to suppliers, collaborators and to the communities in which we work, at the start of the project or as soon as practicable.

F) Ensure reporting mechanisms are gender sensitive, sensitive to the needs of the communities in which we work, and accessible to members of these communities.

G) Take steps to prevent perpetrators of SEAH from being re-engaged by OSD or other organizations working with vulnerable people.

 

5. Procedure for Reporting and Investigating SEAH

5.1 Reporting Incident

A person may confidentially report allegations, incidents, concerns or suspicions of SEAH by those who collaborate with OSD through the reporting mechanism designated for the project.

OSD employees must report any potential incident of abuse they witness, are made aware of, or suspect, which appears to breach this policy. The report can be made to the OSD focal person, or in accordance with the OSD Principles of Conduct.

OSD employees receiving a report must refer the report immediately through the reporting mechanism designated for the project. Reports about OSD employees will be referred to the OSD executive Director.

The person who receives the report will ensure that all materials pertaining to the report are handled in confidence.

5.2 Responding Reports 

l  OSD will investigate reported allegations of SEAH in a timely and professional manner. This includes the use of appropriate interviewing practices with complainants and witnesses, particularly with children. OSD will engage professional investigators or secure investigative expertise as appropriate.

l  The person conducting the investigation will consult with the complainant/survivor and undertake an initial risk assessment to identify and implement immediate reasonable measures to protect and support the survivor. A survivor will be informed of the time it may take to institute an immediate measure and is entitled to periodic updates.

l  Survivors are entitled to be accompanied by a supporter of their choice for assistance or cooperation during the investigation.

l  The OSD recognizes that the decision to report a concern can be difficult and will support those who raise concerns, whether or not the concern is upheld.

l  Any doubts about the credibility of the complaint or the person making the complaint cannot be used to justify delaying an investigation.

l  OSD will take appropriate action against those who work with and for OSD who commit acts of SEAH, including referring cases to law enforcement agencies where appropriate.

l  At the request of the survivor, OSD will refer cases to authorities for criminal investigation and prosecution under the law of the country in which they are based or are working at the time of the alleged incident or to a home agency where extraterritorial legislation is in force.

l  During an investigation, the person conducting the investigation will give reasonable periodic updates to the survivor about the status of the investigation. Updates must not include substantive information about the investigation, except with consent from individuals whose personal information would be disclosed.

6. Definitions

Sexual Exploitation, Abuse AND Harassment (SEAH): forms of gender-based violence perpetrated by humanitarian or development workers, particularly in humanitarian settings. These acts can be committed against local communities, project participants of direct assistance, or against OSD employees and collaborators.

Sexual Exploitation: Actual or attempted abuse of a position of vulnerability, differential power or trust, for sexual purposes, including profiting monetarily, socially or politically from the sexual exploitation of another.

Sexual Abuse: Actual or threatened physical intrusion of a sexual nature, whether by force or under unequal or coercive conditions.

Gender-based violence (GBV): Any harmful act perpetrated against a person’s will and based on social ascribed (i.e. gender) differences between males, females, and gender non-conforming people which Includes acts or threats of acts that inflict physical, sexual or mental harm or suffering, and other deprivations of liberty. SEAH is a form of GBV (gender based violence) as survivors of SEAH are often abused because of their vulnerable status as women, girls, boys and sometimes men.

Survivor: A person who has experienced SEAH, including those who self-identify as a victim or victim/survivor. ‘Victim’ is often used in medical and legal sectors. ‘Survivor’ is generally preferred in psychological and social support sectors because it implies resiliency. This policy is survivor-centered and employs that term. A survivor’s choice of how to identify (as victim or survivor) will be respected and mirrored in our language.

Informed consent: Ongoing agreement, voluntarily and freely given, based on a clear appreciation and understanding of the facts, and implications of an action. To give informed consent, a person must have all relevant facts when consent is given and be able to evaluate and understand the consequences of an action. They also must be aware of and have the power to exercise their right to refuse to engage in an action or to not be coerced (i.e. being persuaded based on force or threats).

Participants of direct assistance: A person who receives any assistance including any type of goods and services from OSD regardless of the length of OSD’s relationship with them.

Communities in which we work: Any geographical location in which OSD directly or indirectly operates, providing either goods or services.

Report: Informing a person designated under this policy about an incident of SEAH for the purpose of initiating an investigation or disciplinary process.

Disclosure: Informing an OSD employee or volunteer about an incident of SEAH for the purpose of seeking support.

Sexual harassment: Comments or actions based on a person’s sex, sexual orientation, gender identity or gender expression that are unwelcome or should be known to be unwelcome.

Sexual assault: Any touching of another person without their consent where the touching is of a sexual nature, or where the sexual integrity of the alleged victim is violated.

Sex worker: A person over 18 who receives money or goods in exchange for sexual services, and who defines those activities as income-generating, even if they do not consider sex work as their occupation.

Sexual favor: Sexual acts, often in exchange for money, goods or services which Includes inappropriate photography and filming. The process of sexual favors often takes place through transaction sex.  Sex as a Transaction is a common coping mechanism among people in severe situations of vulnerability.

 

 

Organization Safe Recruitment Process Guide Line                                               

 

Contents

1.Background of the Organization. 2

1.1 Legal status. 2

1.2 Vision. 3

1.3 Mission. 3

1.4 Thematic Operation. 3

1.5 Overall Objective. 4

1.6 Values. 4

2.Introduction. 4

3.Scope and Purpose of the Guideline. 4

4.Stages of Safe Recruitment. 5

4.1 Writing Job Descriptions. 5

4.2 Advertising. 7

4.3 Shortlisting Applications. 8

4.4 Assessment & Selection. 9

4.5 Checks and References. 10

4.6 Conditional Offer of Appointment. 12

4.7 Induction. 12

 

 

 1.     Background of the Organization

Rooted in pursuit of the public interest and social justice, Organization for Social Development (formerly Organization for Social Justice in Ethiopia) has been engaged, since its establishment in 2003, in wide and diverse interventions ranging from advancement of human welfare, democracy and good governance to maximizing the role of the private sector in promoting social justice by upholding Corporate Social Responsibility (CSR) as the main thematic area of its operation.  Realizing the enormous but untapped potential of the private sector to advance human rights and materialize people-centered all inclusive development in the country, OSD has launched in 2010 a strategic plan to promote Corporate Social Responsibility (CSR) among the business community, government organs and the public.     

Since then, OSD has implemented projects that achieved an increased awareness and understanding on CSR and enhanced capacity of the private sector to comply with international and domestic principles and standards which deal with different aspects of CSR.  Having research as one of its main components researches on private sector and civil society partnership, the role of the private sector in advancing reproductive health in Ethiopia, engagement of the private sector in improving welfare of disadvantaged and vulnerable groups and,  corporate social responsibility and child welfare, have been undertaken.  Analyzing legal and policy environments and practices as well as bringing on board international initiatives and best practices, these researches substantially contributed in addressing the information gap with regard to CSR practice in Ethiopia and have provided baseline for contextualizing and adopting CSR initiatives. In addition to conducting researches OSD works to introduce the concept, to raise awareness on different aspects of CSR, to enhance implementation by the private sector and to advocate for creation of an enabling legal and policy environment by using broadcasting and print media, organizing trainings targeted at selected representatives from governmental offices, civil society, Chamber of Commerce and Sector Associations; promoting good practices using different mechanisms and; establishing partnerships/networks with different entities including chambers of commerce and sect oral associations.

1.1 Legal status

Organization for Social Development (OSD) (formerly called Organization for Social Justice in Ethiopia (OSJE)) is an indigenous, non-profit, non-partisan, non-governmental organization. Under the requirements set by a new Charities and Societies Proclamation (entered into force on February 13, 2009) Organization for Social Development re-registered as Ethiopian Resident Charity by Federal Democratic Republic of Ethiopia, Ministry of Justice, Charities and Societies Agency on November, 2019 – License Number 0843 assuming the current name. 

1.2 Vision

Seeing a community wherein equitable access to basic economic and social services for every citizen is ensured.

1.3 Mission

 We foster social development with special emphasis to environment protection, access to standard and quality social services and productivity by promoting Corporate Social Responsibility (CSR) among business organizations, citizens, and government bodies.

1.4 Thematic Operation

The general thematic areas of which Organization for Social Development engages itself in are:-

• Health
• Education
•  People with Disability
•  Environmental Protection
• Women Economic Empowerment
• Refugees etc……

Specifically Organization for Social Development has been focusing on promoting the concept Corporate Social Responsibility among private businesses, citizens and government bodies as to improve and strengthen the role played by business firms in the development endeavors of the country. For this purpose, OSD organizes its interventions into three categories:

• Awareness and Capacity Building- focuses on ensuring enhanced CSR activities and understanding among business organizations, the government and the general public
• Research- focuses on improving CSR knowledge and information as well as identifying further intervention areas to improve laws, policies and practices related to CSR in Ethiopia
• Advocacy and Promotion- aims at creating an enabling and favorable legal and policy environment for CSR practices and improve CSR performance among the business community

1.5 Overall Objective

To increase involvement of private sectors in the development process of the country, through awareness creating, promoting practices, and advocating for an enabling environment pertaining to Corporate Social Responsibility in the country.

• To promote environment protection
• To promote accessibility of standard and quality public/social services to the society (education, health, food, shelter)
• To encourage productivity and quality services

 

1.6 Values

The core values that inspired the vision and mission of the Organization for Social Development include:

• Lasting Impact
• Participation and empowerment
• Self-actualization
• Equality
• Justice
• Integrity
• Accountability

 

2.Introduction

Safer practice in recruitment means that every stage of the recruitment process should be considered carefully, in order to deter unsuitable candidates from applying or being appointed into an organization. It also requires a consistent and thorough process of obtaining, collating, analyzing, and evaluating information from and about applicants. Safe recruitment is central to the safeguarding of children and adults at risk. All organizations which employ staff or volunteers to work with children and adults at risk have a duty to safeguard and promote their welfare. This includes ensuring that the organization adopts safe recruitment and selection procedures which prevent unsuitable persons from gaining access to children.

  3.Scope and Purpose of the Guideline

This guide is developed to provide direction to Organization for social development on safe recruitment. It applies to all permanent, temporary and agency staff and volunteers of the Organization for Social Development who will have contact with children and adults at risk within the organization and will be seen as safe and trustworthy and/or have access to confidential and sensitive information.

Apart from staffs and volunteers, the principles of safe recruitment should also be included in the terms of any contract or service level agreements drawn up between the organization and contractors or agencies that provide services for, or staff to work with, children and Adults at risk. Any service level agreement or contract should contain a safeguarding statement, which makes explicit the standards expected. The agreement should be regularly reviewed.

This guideline is produced to provide guidance to Organization for Social Development on how to carry out/ practice safe recruitment process.

4.Stages of Safe Recruitment

In order to avoid recruiting potential abuser employees and volunteers, the safeguarding issue should be included in every stage of recruitment process right from developing the job description.

4.1 Writing Job Descriptions

As a First Stages of the Recruitment process, all information given to applicants should highlight the importance of a member of staff’s duty and responsibility to safeguard report and promote appropriate behaviors. When producing the job description, special consideration should be made to assess the level of risks in relation to working with children, persons with disability and vulnerable adults in the role concerned. It should also be made clear whether the role requires the successful applicant to complete police check or equivalent.

Before writing the job description, consider the level of risk the appointment might potentially present to children, persons with disability and other vulnerable adults. By prevention, level 1 should not be used.

Level 1: If the position holder will not have contact with children, persons with disabilities and vulnerable adults or access to personal data about them as part of their work;

Example: The roles and responsibilities, the organization

Level 2: If the position holder will have access to personal data about children, persons with disabilities and vulnerable adults as part of their work; or the position holder will be working in a ‘regulated’ position (accountant, cashier, administrative units and legal executive); therefore a police check will be required.

Example: - Is responsible to respect and abide the safeguarding policy, procedure and values of the organization

- Is responsible to apply safe recruitment in the various stages of recruitment (HR person)

- Is responsible to respect and abide the safeguarding policy, procedure and values of     

- Is responsible to bring any police background check that ensure that he/she is free from any crime from the concerned

Level 3: the position holder will have contact with children, persons with disabilities and other vulnerable adults either frequently or intensively because their work or are visiting programs/projects; or because they are responsible for implementing the police checking/vetting process staff.

For Examples: Community social workers, community volunteers, individual case workers, project manager, Inclusive education officers, training officer, the project officers, monitoring and evaluation officer, physiotherapists, , caretaker, logistician, driver etc.

- Is responsible to respect and abide the safeguarding policy, procedure and values of the organization

- Is willing to bring any police background check that ensure that he/she is free from any crime from the concerned

- Have commitment to the organization safeguarding polices and practice

- Have strong experience on safeguarding

- Support community mobilization campaign to increase community awareness on safeguarding

- Take special responsibility to facilitate the participation of women, children and adults at risk in every stages of project design/planning, implementation, monitoring and evaluation

- Will undertake the appropriate level of training and is responsible for ensuring that they understand and work with the safeguarding policy of the organization

- Contribute to build the capacity on safe programming in collaboration with senior management

- Develop the safeguarding tools guideline on safeguarding

- Review the safeguarding policy of the organization

In general, the job description should clearly state: The main duties of the post; The extent of contact/responsibility for children, persons with disability and adults at risk, The individual’s responsibility for promoting and safeguarding the welfare of the children and adults at risk  s/he is responsible for, or will come into contact with.

 4.2 Advertising

 When OSD posts vacancy advertisement, the advertisement should include a statement about the organization’s commitment to safeguarding and the values, beliefs and behaviors expected from. Again, this should act as a deterrent to unsuitable applicants. In addition, reference should be made (either in the advertisement, on the web page or in the job description) to the organizations’ rigorous selection process, which should deter unsuitable candidates from applying.

For Example: - The organization is committed to safeguarding. It has a zero-tolerance approach to any harm to, or exploitation of, a vulnerable adult or a child by any of our staff, representatives or partners. Recruitment to all jobs in the organization includes, in particular, criminal record checks and the collection of relevant references. Safeguarding our project participants is our top priority in everything we do.

4.3 Shortlisting Applications

 In the recruitment of staffs, in order to that the key information or gaps in employment are not missed, it is recommended that at least two people are involved in the process of short-listing candidates. Information provided should be consistent, not contain any discrepancies and any gaps in employment should be identified. Any anomalies should be noted and considered when shortlisting.

The selection panel should short list and interviews the candidate. At least one member of the panel should have undertaken safe recruitment and selection training or should have safe recruitment practice / experience.

• All application forms and letters and Curriculum vitae should be scrutinized to ensure:
• They are fully and properly completed;
• The information is consistent and does not contain any discrepancies;
• Gaps in employment/training or a history of repeated changes of employment are identified.
• Incomplete applications should not be accepted;
• Any irregularities, discrepancies or gaps in employment and the reasons for this should be noted, so that they can be taken up as part of the consideration of whether to short list the applicant, as well as a history of repeated changes of employment without any clear career or salary progression or a mid-career move from a permanent to temporary post;

All candidates should be assessed equally against the criteria contained in the person specification.

4.4 Assessment & Selection

 The assessment process should be designed to measure the merits of each candidate against the job requirements, but to also explore their suitability to work with vulnerable groups.

• Invitation to the interview

The interview invitation should stress that the identity of the successful candidate will be checked, and that any offer will be subject to receipt of references and police check or equivalent if the post requires it. If it is possible, It would be good if the organization sends out the Code of Conduct and the Safeguarding Policy so that the candidate is aware of these policies before attending an interview.

•  Interview Panel

The interviewers should be at least two people and will allow one member to observe, assess and make notes, while the other panel member is talking to the candidate. It also reduces the possibility of any dispute about what was said or asked during the interview.

• Scope of the Interview

In addition to assessing and evaluating the applicant’s suitability for the particular post, the interview panel should also explore with the candidate through interview:

The interview Questions should be structured to understand the following about the applicants:

• Attitude and values towards program participants, persons with disability, vulnerable adults, women, children and young people etc. as relevant to your organization and programs.

• Motivation to work for your organization and in the relevant position.

• Past behavior on abuse and exploitation as this can provide an indication of future behavior.

For jobs where staff will not work with program participants, interview questions should be aimed at testing the applicant’s behavior and awareness and openness to your organization’s safeguarding commitments.

l  Suggested interview questions for all applicants

• Are you happy to sign our safeguarding policy and code of conduct?
• What does safeguarding mean to you? OR what does a safe organization mean? What do you think this means?
• Why do you think safeguarding is important for an organization such as ours?
• Have you worked with an organization previously that has had either strong or weak safeguarding in place? What impact did this have on the way in which the organization worked and how it kept people safe?
• Have you ever had to report a safeguarding-related matter concerning a colleague or supervisor?  Was it handled in the manner you expected?

Interview questions for applicants working directly with program /project participant

•  Describe any jobs you have held working directly with children, persons with disability and women?
• What boundaries are important when working with children, persons with disability and women?
• Explain your motivation for wanting to work in this role with children, persons with disability and women?
• What do you believe are the core values that should guide your work with children, persons with disability and women?
• What are some of the risks for the children, persons with disability and women that you think the organization’s safeguarding approach should manage?

 

4.5 Checks and References

Candidates should either be asked to bring documents with them to an interview or provide on offer of employment the following:

• Documentary evidences of identity including current and former name, date of birth and current address. Ideally this would also include national/social insurance number e.g. current driving license, ID card, passport, including a photograph. In cases, where these documents are not available – a birth certificate should be provided. In most countries, evidence of right to work may be required if the candidate has a nationality of other country
• Additional documents will also be required for police checks or equivalent.
• Educational and professional qualifications that are necessary or relevant for the post, will require an original or a certified copy of a certificate, diploma, or a letter of confirmation from the awarding body all copies of documents must be signed and dated by the person carrying out the checks and kept on the personnel file.

 A person’s past behavior is the most reliable way of predicting future behavior. Consequently, the information obtained from referees is important. Any offer of employment should always be conditional on the receipt of satisfactory references and their purpose is to obtain objective and factual information to support appointment decisions. They should always be sought and obtained directly from the referee and should include the individual’s current employer.

References can be obtained in writing or verbally. Reference requests should include a brief description of the organization and the role; asking about the applicant’s suitability for the role, for the organization and any details of previous disciplinary action. Consideration should be given to whether the referee has been very cautious in the information they have given and whether it might be necessary to follow up. If an employer says it is not their policy to provide references, then a request for a confirmation of employment should be made. Consider asking the candidate to supply another professional reference which may include ex peers, professionals in another organization who the candidate worked with during their employment (e.g. a partner organization, a government official, a legal adviser, religious leader etc.). Verbal references may be taken when there is no alternative – notes should be taken and recorded and if possible, the referee should be asked to confirm by email or in writing that they are an accurate reflection of what they have said.

References must be thoroughly screened to ensure the referee has answered all the questions. Information provided by the referee should be compared with the information provided by the applicant in his or her application and any discrepancies checked. Where references reveal any inconsistencies or doubts about the person’s suitability, the issues should be followed up and explored with the referee or the candidate. It is important to keep written records of any telephone conversations and where the issues are significant, more detailed information sought in writing or verbally from the referee.  Any information about past disciplinary action should be considered in the circumstances of the individual case.

 4.6 Conditional Offer of Appointment

Any offer of appointment to the successful candidate will be conditional upon receipt of the following

.Two (or more) satisfactory references

· Relevant police clearance check or equivalent

 Depending on policy – some organizations may not allow an individual to start their new role until all checks have been completed. Others will allow an individual to start, but make the offer to receipt of satisfactory checks. If any of the above raises issues of concern then it should either be referred to director level (or as specified in the organization) or then in some organizations a committee is formed to discussed this further and make a decision based on what could be the risk to the organization. This may include asking for further information from the individual or maybe relevant authorities. In these cases it is recommended that an offer is not confirmed if there is any doubt and any conclusions are signed off at director level.

4.7 Induction

All successful candidates should receive information about the organization prior to starting, and with their contract. It should include an organization’s Policy on Safeguarding, Child Protection, working with vulnerable adults and the Code of Conduct. There should also be a briefing as part of the induction program for newly appointed staff regardless of previous experience. This should include knowing where to find information on the following:

· Organizational Policies and procedures in relation to safeguarding e.g. safeguarding, child protection, gender, HR,  protection of vulnerable adults, anti-bullying, anti-racism, internet safety, whistle blowing, disciplinary and grievance etc.

· Requirements of the organizations’ Code of Conduct

· Reporting procedures and when/how to raise a concern or observation

· Face to face training on Safeguarding, Child Protection or Code of Conduct as per organizational requirements

After the induction, the successful candidate will also be required to sign an organizational code of conduct, which complements the self-declaration form, by outlining the behaviors required of the individual and asking them to sign their agreement.

 

ORGANIZATION RESOURCE MOBILIZATION POLICY

 

“Resource mobilization goes beyond fund raising; it is friend rising as well.’’      

                    

Contents

1.Organizational Background. 3

1.1 Legal status. 3

1.2 Mission. 4

1.3 Vision. 4

1.4 Values. 4

1.5 Overall Objective. 4

1.6 Thematic Operation. 5

2. Rationale. 5

3.General Guidelines. 6

4.Principles. 6

5. Purpose, Scope and Structure of the OSD Resource Mobilization Manual 8

5.1 Purpose. 8

5.2 Scope and Structure. 8

6.Definition of Resource Mobilization. 9

6.Importance of Resource Mobilization. 9

8. Resource Mobilization in the Context of OSD: Justification and Current Trends. 10

8.1. Resource Mobilization in OSD.. 10

8.1.1. Justification. 10

9.Challenges Facing Local NGOs in Resource Mobilization. 12

10. Partners and stakeholders Analyses. 13

11. GAP Analysis. 14

12. OSD Resource Mobilization Processes and Steps. 15

12.1 Resource Mobilization Cycle. 15

12.2 Resource Mobilization Steps. 16

13. Management and coordination. 19

13.1 Resource Mobilization units. 19

13.2. Roles and Responsibilities of other key players Resource Mobilization. 20

14. Donor Privacy. 21

15. Confidentiality. 22

16. Gift-Acceptance and Procedures. 23

16.1 In-kind Gifts. 23

18. Volunteers Contribution. 24

Process. 24

Strategy. 25

 

 

 

 1.Organizational Background

Rooted in pursuit of the public interest and social justice, Organization for Social Development (formerly Organization for Social Justice in Ethiopia) has been engaged, since its establishment in 2003, in wide and diverse interventions ranging from advancement of human welfare, democracy and good governance to maximizing the role of the private sector in promoting social justice by upholding Corporate Social Responsibility (CSR) as the main thematic area of its operation.  Realizing the enormous but untapped potential of the private sector to advance human rights and materialize people-centered all inclusive development in the country, OSD has launched in 2010 a strategic plan to promote Corporate Social Responsibility (CSR) among the business community, government organs and the public.     

Since then, OSD has implemented projects that achieved an increased awareness and understanding on CSR and enhanced capacity of the private sector to comply with international and domestic principles and standards which deal with different aspects of CSR.  Having research as one of its main components researches on private sector and civil society partnership, the role of the private sector in advancing reproductive health in Ethiopia, engagement of the private sector in improving welfare of disadvantaged and vulnerable groups and,  corporate social responsibility and child welfare, have been undertaken.  Analyzing legal and policy environments and practices as well as bringing on board international initiatives and best practices, these researches substantially contributed in addressing the information gap with regard to CSR practice in Ethiopia and have provided baseline for contextualizing and adopting CSR initiatives. In addition to conducting researches OSD works to introduce the concept, to raise awareness on different aspects of CSR, to enhance implementation by the private sector and to advocate for creation of an enabling legal and policy environment by using broadcasting and print media, organizing trainings targeted at selected representatives from governmental offices, civil society, Chamber of Commerce and Sector Associations; promoting good practices using different mechanisms and; establishing partnerships/networks with different entities including chambers of commerce and sect oral associations.

1.1 Legal status

Organization for Social Development (OSD) (formerly called Organization for Social Justice in Ethiopia (OSJE)) is an indigenous, non-profit, non-partisan, non-governmental organization. Under the requirements set by a new Charities and Societies Proclamation (entered into force on February 13, 2009) Organization for Social Development re-registered as Ethiopian Resident Charity by Federal Democratic Republic of Ethiopia, Ministry of Justice, Charities and Societies Agency on November, 2019 – License Number 0843 assuming the current name. 

1.2 Vision

Seeing a community wherein equitable access to basic economic and social services for every citizen is ensured.

1.3 Mission

 We foster social development with special emphasis to environment protection, access to standard and quality social services and productivity by promoting Corporate Social Responsibility (CSR) among business organizations, citizens, and government bodies.

1.4 Thematic Operation

The general thematic areas of which Organization for Social Development engages itself in are:-

• Health
• Education
• People with Disability
• Environmental Protection
• Women Economic Empowerment
• Refugees etc……

Specifically Organization for Social Development has been focusing on promoting the concept Corporate Social Responsibility among private businesses, citizens and government bodies as to improve and strengthen the role played by business firms in the development endeavors of the country. For this purpose, OSD organizes its interventions into three categories:

• Awareness and Capacity Building- focuses on ensuring enhanced CSR activities and understanding among business organizations, the government and the general public
• Research- focuses on improving CSR knowledge and information as well as identifying further intervention areas to improve laws, policies and practices related to CSR in Ethiopia
• Advocacy and Promotion- aims at creating an enabling and favorable legal and policy environment for CSR practices and improve CSR performance among the business community

1.5 Overall Objective

To increase involvement of private sectors in the development process of the country, through awareness creating, promoting practices, and advocating for an enabling environment pertaining to Corporate Social Responsibility in the country.

• To promote environment protection
• To promote accessibility of standard and quality public/social services to the society (education, health, food, shelter)
• To encourage productivity and quality services

 

1.6 Values

      The core values that inspired the vision and mission of the Organization for Social Development    include:

•  Lasting Impact
• Participation and empowerment
• Self-actualization
• Equality
• Justice
• Integrity
• Accountability

 2.Rationale

The Organization for Social Development believes that it can best fulfill its mission through a broad base of support from various sources. However, to maintain its independence and objectivity, it seeks to identify any areas where there may be real or apparent conflicts of interest or where the mission, programs, projects, and independence of Organization for Social Development could be compromised.

As part of expanding its base of support, OSD is willing to consider partnerships with and gifts from the corporate sector. OSD recognizes that corporations, as profit-centered organizations, have obligations to their shareholders, boards, and employees to be successful. OSD also recognizes that companies support the nonprofit sector not only out of a desire to be helpful but also with the hope of a return or benefit.

3.General Guidelines

Organization for Social Development, as an independent nonprofit organization, will accept no cash or real property gift or pledge of support or non-cash gift or services or enter into any partnership with any company or other organization that produces products that are or may be harmful to the environment and community. Nor will OSD accept any of the above or support from any company or organization that, in the judgment of OSD, exploits children, women in its product lines, advertising, marketing, or workforce, or in any other way.

4.Principles

• Organization for Social Development will at all times maintain an independent position on educational issues and concerns.
• Organization for Social Development will solicit and accept support only for activities that are consistent with its mission.
• Organization for Social Development will accept funds for research, informational, and educational activities only when the content is to be determined by OSD or an independent group designated by the OSD.
• Organization for Social Development will maintain complete control, consistent with any donor restrictions acceptable to the Organization, of all funds provided by corporations, organizations, and individuals.
• Organization for Social Development will not accept any support that implies or requires endorsements of products. Acknowledgments of corporate support will be limited to a company’s name, logo, or slogan that is an established part of the supporter’s identity, trade name, address, and telephone number(s).
• Recognition of major corporate support will be developed in cooperation with the corporate donors and will be consistent with the level of support and the Organization for Social Development’s mission and purposes.      
• Organization for Social Development will seek to develop recognition opportunities that are appropriate and meaningful for both the supporting companies and Organization for social Development.
• Organization for Social Development’s intangible intellectual assets, including its name, research, and other work, will be protected at all times. Donors will not be permitted to use Organization for Social development’s name or other items for commercial purposes or in connection with the promotion of any product.
• The Organization for Social Development’s board and staff reserve the right to refuse any donation of cash or other real property, services, non-cash gifts, or any other forms of support if such support is not in keeping with the above principles or for other reasons that the Organization for Social Development deems appropriate.

5.Purpose, Scope and Structure of the OSD Resource Mobilization Manual

5.1 Purpose

The purpose of OSD Resource Mobilization Manual is to provide resource mobilization guidelines and procedures encompassing all processes and sub processes followed in the mobilization of resources for the OSD mission and vision. The output is to have a resource mobilization manual with standard operating procedures, processes and best practices in resource mobilization. This guidance is intended for OSD structures as a standard framework for resource mobilization. Diversify, expand its resources base and develop new thinking and challenge the old traditions in supporting the achievement of integration agenda; 

• Identify and analyze the resources available for her program priorities, policies and efficient budget allocation as stipulated in the Development Strategy.
• OSD to understand its current donor funding landscape, resource availability and support commitment.
• Help to maximize use of domestic capital and skills to expand deep relations with stakeholder; and 
• Provide continuity and stability to the organization and its work. 

 5.2 Scope and Structure

This manual details the procedures followed by all OSD staff within the Community during resource mobilization.

It outlines and discusses the purpose and scope of the manual and clearly stipulates the coordination mechanism and roles and responsibilities of the units involved in resource mobilization.  The manual also provides guidelines on how the resource mobilization is managed and coordinated.  It further covers the resource mobilization cycle as well as the steps and tools for resource mobilization. In addition the process of monitoring and evaluation is also provided for continual improvements in sourcing resources from different sectors.

Given these realities and both legal and ethical considerations, OSD is willing to negotiate partnerships and accept support from the corporate sector in ways that will benefit and recognize the supporting companies while enabling  OSD to better achieve its mission without compromising its principles.

6.Definition of Resource Mobilization 

Resource Mobilization is a process, of identifying the resources essential for the development, implementation and continuation of works for achieving OSD’s mission and Vision. In real terms, Resource Mobilization means expansion of relations with the resource providers, the skills, knowledge and capacity for proper use of resources. 

Resource mobilization is a means to the end, the end being the fulfillment of the OSD’s vision; a team effort that involves OSD’s commitment to resource mobilization, acceptance for the need to raise resources and institutionalization of resource mobilization policies and budget allocation to priorities. 

 Resource Mobilization entails identification of: - Resources; resource provider and mechanism to receive resource. It further  entails:- expansion of relations with the resource provider; right use of resources; knowledge and skills to mobilize resources; human skills, service, information, equipment; seeking out new resources; institutional sustainability and lowering of financial risk.  Resources are the financial and non-financial supplies that help OSD to attain its objectives.  These include money, skills, time contributions and services of humans, and equipment and materials. 

 

6.1Importance of Resource Mobilization

 

• To diversify, expand resources base and develop new thinking and challenge the old traditions in supporting the achievement of integration agenda;
• Identify and analyze the resources available for the program priorities, policies and efficient budget allocation as stipulated in the Development Strategy.
• To understand current donor funding landscape, resource availability and support commitment.
• Help to maximize use of domestic capital and skills to expand deep relations with stakeholder; and 
• Provide continuity and stability to the organization and its work. 

 

 

8. Resource Mobilization in the Context of OSD: Justification and Current Trends      

8.1.Resource Mobilization in OSD

8.1.1.Justification

 OSD is failed with complex funding environment characterized by a global economic down turn and related financial crisis ,shrinking oversee development assistance (ODA) and public deficits in some donor countries and shifting donor priorities and donor policy change, which  have had an impact on donor contribution to OSD.In Addition the country’s effort to be a middle income country and increasing non-traditional donors internally enforces to guides our strategy to forward looking resource mobilization strategy which takes into account changing donors’ landscape from past and current resource mobilization effort.There is a lot of talk and literature on what, how and whys of organization sustainability. Many organizational leaders are striving to understand and explore ways to build a sustainable organization that will ensure they are making a positive impact on the society and the environment in which it works. There is evidence in literature that shows that organizations are struggling to grow consistently over a period of 10 years. Many local NGOs in Ethiopia are smaller, privately-owned, group owned or family-owned and are short-lived as they are unable to achieve long-term, consistent growth or improve performance. For many local NGOs in Ethiopia, there are high rates of senior management turn-over, internal wrangles caused by power structures, and poor financial reporting and the intense scrutiny of financial expenditures by donors and governments hence management focus remains biased on short-term performance. This happens because the reward systems do not recognize and value performance in the long term and this means theses organization have objectives which were never intended to be sustainable in the long-run.This scenario makes one to conclude that the way organizations are managed is quite “unsustainable” and unfortunately has an impact on how an organization mobilizes and manages resources. It is vital for organizations to consider sustainability in a new more comprehensive way if they are to succeed in the future.Sustainability is not only linked to how an organization is able to mobilize and generate ongoing resources required to sustaining its mission and undertaking quality work but also there is a link between quality and sustainability. Quality of services is often one of the critical ingredients in achieving an organization’s sustainability.Organizations are required to adopt crosscutting quality assurance systems to ensure quality of services is not compromised overtime as this is key to ensuring that services undertake by the organization remain on demand. Many people equate an organization’s sustainability with its financial strength, but this alone becomes irrelevant over time. Mavuto (2013:88) lists some characteristics of a sustainable NGO which include strategy, established constituency, sound organizational governance, enlightened management, learning culture and good public relationsHence Organization without a strong sustainability culture will not grow. A good sustainability culture exists when all staff respects their donors and want to understand and meet their needs. A good culture exists when staff members value program and sustainability as two necessary components of a successful organization and appreciate their interconnectedness.

 An organizational culture that is flexible helps an organization in looking for ways to maximize resources, in finding innovative ways of raising funds, or carrying out programs in challenging environments. However it is important for organizations to realize that the sustainability of an organization does not only depend on the resources an organization has but it is also affected by the following:-

• Existence of competent staff;
• Supportive policies;
• and internal systems to manage assets,
• An organization’s ability to establish relationships with individuals and organizations and organizational culture that reinforces sustainability efforts.

When an organization is competing for resources and other support in a very tight market place the organization’s appeal has to be different, better, “cheaper” and unique. A donor has no reason to select an organization over another if there no evidence of innovativeness or value in supporting an organization and therefore it is crucial to view an organization’s mission from the perspective of current and potential donors and emphasize those aspects of an organization’s work which are appealing from donors perspectives.

9.Challenges Facing Local NGOs in Resource Mobilization

NGOs are operating under a highly resource competitive environment. The challenges that NGOs encounter in resource mobilization efforts can be divided into external and internal challenges.

v External Challenges

o   Donor Country Priorities Changing Criteria being Used/Applied to Organizations Donors Conditional Ties

• Political Interference
• Rules and Regulations within a Country for Accessing Government Funds Donor Prejudices Natural and Manmade Occurrence e.g. Floods, Earthquakes, Wars Competition from “Political NGO” Competition among NGOs in the Same Sector

v   Internal Challenges

o   Capacity Limitation within Organizations

o   Accountability and Transparency

o   Founder Syndrome

o   Inadequate Strategic and Operational Plans

o   Inadequate Networking Skills

o   Inadequate Awareness on Available Opportunities

o   Governance

o   Minimal Communication and Branding

10.Partners and stakeholders Analyses

 

OSD enjoys a good working relationship with and support from the government bodies.  Through the signing of long term Memoranda of Understanding with government sectors and Ministry of Women, children and Youth and Manufacturing Industries Development Institute, OSD has secured long term partnership and expansion of its services across DebreBerhan and Kombolcha textile industries. 

 OSD has expanded local and international networks and collaboration with donors, communities and other stakeholders working in various social and economic developments in order to increase program reach and impact. However to ensure sustained activity effort is required to secure additional governmental and private sector funding.

The following have supported and/ or continued to support OSD program:

o   OSD Members – In cash and in kind support;

o   Save the Children International;

o   The US Embassy;

o   Finland Embassy;

o   CEPF;

o   CSSP1;

o   EU etc.

 

11. GAP Analysis

OSD has the capacity to efficiently manage and sustain the expanded program as envisioned in its strategic plan (2020-2024) utilizing highly skilled staff and program volunteers. The organization’s systems are also transparent, efficient and responsive to the needs and challenges of its vision and mission. 

However, due to the ever increasing demand for OSD services and the challenges introduced via dwindling donor resources, OSD must strategies and adapt its approach in order to maintain its position as the leading NGO in enhancing the promotion of child wellbeing by engaging private sectors.

OSD wishes:

·         To achieve financial independence and sustainability;

·         To meet the going concern concept;

·         To expand its program and scope of operation to meet the varying needs of the population it serves;

·         To have increase in revenue base from various sources;

·         To improve the quality and range of services it offers;

Since its inception, OSD has depended on donor support to implement its programs. OSD activities have increased while it’s funding and resources base have not expanded sufficiently to address the program requirements.  The organization continues to rely on donor funding which hugely affects the implementation of its mandate.  While the majority of its resources are channeled into specific projects minimal or no resources are available to respond to emerging social and economic issues.

To implement its mandate fully, OSD needs to put in place a resource mobilization strategy that will guide and enable it to access support from diversified sources of funding including non-governmental organizations, private sector companies, banks, small businesses and foundations, amongst others.  The objective of developing this policy is to focus all Resource Mobilization endeavors into one deliberate and focused initiative to maximize returns.

 

12. OSD Resource Mobilization Processes and Steps

12.1 Resource Mobilization Cycle

 

OSD resource mobilization cycle is divided into three main phases which include planning, implementation and monitoring and evaluation.

o   Planning:

In planning the Resource mobilization unit conducts a situational analysis of both its internal and external environment. Here:

o   Resource gaps, which would hamper the implementation of OSD Programs, are identified using the Resource Gap Analysis. A resource gap leads to determination of the resource mobilization targets for the year, which is articulated in a resource mobilization plan.

o   An annual donor conference is organized, where, the resource gaps are presented and donors make commitments on the areas of support. At the conference the donors are presented with OSD annual priorities and proposed areas of support.

o   All OSD work units are required to undertake the internal assessments annually and submit to Resource Mobilization units, which consolidates into one resource mobilization plan annually in line with the resource mobilization plan.  

o   External assessments are conducted to identify what resource mobilization opportunities that exist and decide how best to approach potential resource partners.

o   Plans to engage the resource partners are developed. Essentially this means that an action plan for mobilizing resources needs to be established describing how the resource partners will be approached and for which resources. Here, a communication plan is developed that specifies the tools for communication to be used;

 

Implementation 

This is also known as the action phase. Here the resource mobilization action plan developed in the planning phase is put into action. Activities geared to mobilizing resources are articulated in a work plan that is specific on targets and activities. These activities include:

o   Missions to development partners;

o   Development and submission of proposals;

o    Responding to Request For Proposals special presentations;

o   Specific sector-based donor conferences;

o   Development of marketing documents;

 

 Monitoring and Evaluation 

Annually, OSD develops a monitoring mechanism, which helps in assessing how well it has implemented its resource mobilization Action Plan.

This monitoring and evaluation specifically reports on the successes and failures and the information generated here are used to make recommendations on how to improve the strategy in order to ensure optimum success.

12.2 Resource Mobilization Steps

I.Identifying sources of Resources 

Resource partners are identified annually, and categorized by thematic area, geographical and by work units.  A database of the resource partners is also maintained. This information is presented in a matrix that describes the details of the partner, areas of interest, funding cycles and key contacts. Resource Mobilization units will compile a consolidated matrix for OSD resource partner using the Resource Partners Information Matrix. 

II.Engaging Resource Partners

This step involves seizing every opportunity to communicate the program for which resources are sought. This involves developing a communication plan targeting particular audiences and creating awareness on OSD resource gaps. This involves:

o   Organizing face-to-face meetings to formally launch the resource mobilization  plan 

o   Development of the concept notes giving short overviews of specific projects,

o   Designing appeals through attractive brochures and fact sheets, 

o   Maintaining individual letters or emails to potential partners, 

o   Maintaining an up to date website to create visibility; 

o   Organizing technical meetings with potential partners to present projects and programs.

III.Negotiating with the Resource Partners

This involves an important set of negotiations, which may leads to a signed agreement. This requires a crucial mix of expertise in order to provide a thorough picture of the projects to be implemented through the eyes of both the technical and logistical experts.

This has to be all inclusive involving finance, program and the respective sectors or institutions. In this phase, negotiations are made on the funding mechanism, funding agreements, and disbursements and procedures, audit, recruitment, special conditions based on the Standard Funding Agreement.  All agreements between OSD and the resource partners are signed by the Executive Director or his designee after being carefully reviewed by the Finance and Admin departments.

IV.Managing Projects and Reports

This step involves acknowledging the resource partner’s contribution, managing, monitoring and reporting on the use of resources via the mechanisms spelt out in the funding agreement. This step is crucial in maintaining good relations with the resource partners and forms bedrock of potential and on-going resources and therefore must not be overlooked. It is essential that the program/project is well managed and results reported in a timely manner according to the result-based framework and if necessary the resource partner’s request.

Acknowledging a resource partner’s contribution and thanking them for their support is an essential part of maintaining good relations and securing future funding.  

This can be done by: 

• Writing a formal letter of acknowledgement of their contribution with special thanks from higher management and provide receipts for all funds disbursed;
• Inserting the resource partner’s logo in the project/ program documentations produced
• Using print and electronic media;
• Inviting the representatives of the resource partners to program or project events;
• Provision of timely reports. These reports include inception reports, technical progress reports, project progress reports, terminal reports and financial reports including disbursement reports as reflected in the Standard Reporting Format).
• Registering all projects with Resource Mobilization Office using the Funded Projects Matrix for purposes of maintaining a resource partner’s database.

V. Communicating Project Implementation Results

This step differs from the previous step in that it attracts the interest of a wider audience beyond the original program/ project partners. It involves disseminating the program/project’s success stories and lessons learnt to raise OSD’s visibility. Various communication tools can be used to advocate OSD’s comparative advantage, proven track record and request for the continued support.  Resource partners may be invited to the field to see the program/ project in action. Communication should emphasize success stories and beneficiaries’ testimonials to capture interest through professional communications including photo, the website, brochures or eve short video clips.  Some resource partners have their own specific visibility requirements that need to be explored.

12. Management and coordination

The overall management and coordination of resource mobilization is undertaken by the Resource Mobilization unit in collaboration with the Resource Mobilization Committee, the Resource Mobilization Taskforce and the Resource Mobilization Network. 

13.1 Resource Mobilization units

 OSD, in its endeavor to ensure efficiency in its resource mobilization efforts has established a Resource Mobilization Officer under the Executive Director and Program Team Leader. This unit is headed by the Resource Mobilization Officer   who the overall in charge who reports to the unit of the Program Team Leader. The Resource Mobilization Officer is mandated to mobilize resources for OSD projects and programs.

The Resource Mobilization Officer of OSD interfaces with donors in close collaboration with program and Finance department. The Resource Mobilization Officer provides in house knowledge for donor intelligence.   Other roles of Resource Mobilization Officer, but not limited to the following:

o   Providing  advice and guidance on resource mobilization;

o   Leading development of major partnership agreements including programs and annual consultations;

o    Creating an enabling environment for fundraising with private sector foundations;

o   Developing and maintaining different internal revenue  mechanism to collect resources by using total market approaches strategies;

o   Managing the resource mobilization tools and instruments database; 

o   Organizing regular trainings in resource mobilization for OSD and Executive Board;

o   Developing and maintaining donor intelligence bank; 

o    Acting as a liaison office between the development Partners and different departments of OSD.

13.2. Roles and Responsibilities of other key players Resource Mobilization 

• The Executive Director: provides guidance on all major fundraising efforts and donor consultations and is responsible for issuing appropriate communications for commencement of resource mobilization cycles; 
• Program Team Leader: identify extra budgetary resource requirements for specific thematic support to specific sectors;
• Resource Mobilization Committee: is established by the Executive Director. It includes representation from volunteers, and staff. The composition of the Committee includes influential volunteers with different professional mix   who holds the portfolio of Business management, Finance and Administration. The Committee convene  four times  in a year

The key roles of the Committee are, but not limited to the following:-

o   Coordinating the establishment of a development partner’s consultative Forum;  

o    Reviewing the resources gap analysis report and agree on areas to  be funded based on OSD priorities approved by the pre- budget conference; Inviting the development partners to choose the thematic areas they would wish to support; 

o   Establishing and strengthening the funding modalities for OSD;

o   Sharing information across OSD and advise Executive director  on resource mobilization matters;

o    Reviewing the monitoring reports on resource mobilization and provides appropriate recommendation. 

(iv) Resource Mobilization Task force

RMTF is established by the Resource Mobilization Committee. It comprises of Resource mobilization Officer, team leaders of program and others.  The task force helps the Resource Mobilization Committee in fulfilling its mandate and serves as activist in their respective capacities while sourcing resources for GPSDO Program. Specifically the Task Force plays the following roles:

o   Organize a fundraising events for particular projects;

o    Networking and engaging with potential development partners; 

o    Advising the Resource mobilization Committee on funding modalities;

o    Assisting in the implementation of resource mobilization plans;

o    Reviewing the resource mobilization reports and providing appropriate recommendations;

o   Acting as liaison between their respective Organs and Institutions and the Resource Mobilization Committee.

(v)  OSD Resource Mobilization Network - is comprised of focal point officers from all Resources Mobilization Officer, Volunteer and member of Executive Board. It is established by the Resource Mobilization Officer.

The roles of Resource Mobilization Focal Point Officers across OSD and work unit performed but not limited to the following points:-

o   Acts as a Liaison Officer between his/her unit  and OSD Resource Mobilization Officer;

o    Compiles all relevant information required for Resource Mobilization;

o    Reviews proposals and other related documents before submitting  them to the Resource mobilization Officer

o    Follows up on the progress of the proposals submitted to the Resource Mobilization Officer;

o    Participates in project initiation, progress initiation, progress meetings and closure.

 

13. Donor Privacy

 All information concerning donors or prospective donors (including their names, addresses, and telephone numbers; the names of their beneficiaries; the amount of their gift, etc.) shall be kept strictly confidential by the Organization for Social Development, its staff, and volunteers, unless permission is obtained from donors to release such information.

The Organization for Social Development is committed to respecting the privacy of donors. The types of donor information that it collects and maintains are as follows:

• contact information (name, address, telephone number, and email address)

 • giving information

 • Information on events attended, publications received, and special requests for program information

 • Information provided by the donor in the form of comments and suggestions

The Organization for Social Development uses donors’ information to understand their interests in its mission and to update them on the organization’s plans and activities. It is shared with staff, board members, volunteers, and consultants only on a “need-to-know” basis.

 The organization also assures donors that their names and addresses will not be shared with any third party unless permission has been granted. For those who do not wish to be included on a mailing list that might be sold, rented, or leased to other organizations, donors should contact the Organization for Social Development to have their names removed.

If you have comments or questions about the Organization for Social Development’s donor privacy policy, please email us on This email address is being protected from spambots. You need JavaScript enabled to view it..

14. Confidentiality

 In performing their duties, Organization for Social Development staff, board members, and volunteers are privy to information about individuals and families, such as giving history, assets, wealth, and family relationships. This is especially true for staff, board members, and volunteers involved in fundraising and development activities. Due to the sensitivity of this information, it is important that all Organization for Social Development staff, board members, and volunteers adhere to the policy that information shared with them remains confidential, is not discussed with others in private or public settings, and is not disclosed or used for any other purposes.

 15. Gift-Acceptance and Procedures 

The Organization for Social Development seeks outright gifts and future gift commitments that are consistent with its mission. Donations generally will be accepted from individuals, partnerships, corporations, organizations, government agencies, or other entities without limitations-unless the acceptance of gifts from a specific source is inconsistent with the organization’s beliefs, values, and mission. Organization for Social Development will not accept gifts from companies whose products may be harmful to our clients or from donors whose requests for public recognition are incompatible with our philosophy of appreciation.

In processing, all gifts will be coded in the donor database for the constituency source from which the gifts were given (e.g., individual, corporation, foundation, organization, etc.).

16.1 In-kind Gifts

v  The purpose of this policy is to ensure that the Organization for Social Development accepts gifts-in-kind that support its mission, are consistent with its policies, and are properly accounted for and acknowledged.

v  A gift-in-kind is an item such as equipment, software, or a product that a donor voluntarily transfers to the Organization for Social Development without charge or consideration.

v   Only the Organization for Social Development executive director and board of directors has the authority to accept in-kind gifts.

v  Donors must complete a gift-in-kind form that includes the name of the donor, a description of the item(s), the retail value of the item(s), and permission to publicly recognize the donation.

v  Once accepted, the donated item(s) becomes the property of the Organization for Social Development, which retains the right to dispose of a gift-in-kind as it sees fit, unless another arrangement has been made with the donor.

 

 18. Volunteers Contribution

Voluntarism is the principle of donating time and energy for the benefit of other people in the community as a social responsibility rather than for any financial reward. In Ethiopia is not widely observed but huge associations like OSD and activities organised and undertaken through volunteers. One of the strategic direction of OSD is that strengthen the attachment of voluntaries with the objective of the association and used as one of resource mobilization tool. 

The strength of volunteers based Associations like OSD is primarily determined by the commitment and dedication of members to bring real changes in the lives of people and communities. It also requires establishing functional leadership system and ensuring good governance in its operation.

Believing in the immense role of volunteerism to carve social and economic developments problems facing communities, the Organization will work unreservedly to mobilize professionals and other volunteers for collective actions towards change. Organizational excellence also demands the right approach to deal with problems at hand, the right people in the right places and the right process to achieve the organizational vision and mission while adhering to its stated values which are supported through effective leadership and good governance.

Process

o   Identifying the potential areas and targeted group for Voluntarism;

o   Creating awareness through social Medias, electronic communication; organizing events and printing media;

o   create conducive environment;

Strategy

o   Enhance the volunteer base of the Organization  through initiating digital technology;

o   Strengthen organizational and Program management efficiency and effectiveness;

Organization Strategic Plan    2020-24

Foreword

OSD expresses its gratitude to those individuals and organizations that provided the necessary information and required support from the inception phase of this Strategic Plan until its completion. Most importantly staffs of OSD that have been highly committed and enthusiastic throughout the process shall take credit for the outcome. In addition, stakeholders, board members, and member associations that participated in the environmental scanning and validation workshop as well as strategy and action plan development exercises deserve special appreciation.

Wondwosen Ayalew,

Executive Directress,

OSD

 Executive Summary

Following the expiry of its strategic plan, OSD has embarked on a strategic planning management process for the period of 2015-19. In addition to the expiry of the previous strategic plan, major considerations such as shifts in programmatic interventions and resource allocation were the impetus behind conducting the strategic planning process.

The SPM has passed through steps that were participatory and inclusive of key stakeholders of OSD. The stakeholders of OSD, members, and donors have been involved in the strategic planning through different tools. Moreover the staff, management, and board members of OSD have contributed to this strategic plan through questionnaires, interviews and focus group discussions. The internal policy and procedural documents of the Organization are reviewed as part of the environmental scanning process. The aspirations of the OSD as delineated in the previous strategic plan document are also analyzed. Finally the draft strategic plan was presented at a validation workshop held in ---------, and the comments from the workshop were indispensable in producing this final strategic plan document.

The environmental scanning has identified critical issues that need to be addressed in the coming strategic plan. The critical issues identified were: high prevalence of poverty, child abuse and neglect; organizational capacity; partnership and cooperation; monitoring, evaluation, accountability and learning (MEAL); communication; and program themes. Accordingly the strategic objectives of the OSD are designed to address these critical issues. The strategic objectives OSD that are translated to programmatic areas are:

1. To supplement the child protection activities of the government
2. To ensure gender swell-being through economic independence of women
3. To scale-up and support existing social protection initiatives of the State
4. To promote the corporate social responsibility of the business community
5. To enhance the capacity of the organization to meet the expectations of its stakeholders
6. To enhance the use of organizational lessons of OSD

This strategic plan requires OSD to start new programs and reform some of its internal policies that relate to monitoring and evaluation, partnership, communication, and resource mobilization. Specifically the OSD needs to conduct annual, midterm and end-term result based evaluation of its performance. A total budget of Br. 21,750,000.00 is earmarked for the execution of the strategic plan within the coming five years.

Finally the strategic plan has set detail indicative activities for the strategic plan as depicted in the logical framework matrix annexed to this report.

 

List of Figures and Tables

Figure 1: Rating Overall Achievement of OSD (Source: OSD strategic plan evaluation report, 2014) 9

Figure 2: Rating of effectiveness (Source: OSD strategic plan evaluation report, 2014) 14

Table 1: OSD's Efficiency. 13

Table 2: Key stakeholders' analysis. 17

Table 3: Strategic Interventions and Indicators. 29

Table 4: Action plan. 32

Table 5: Logical Framework Matrix. 40

Table of Contents

Foreword. ii

Executive Summary. iii

List of Figures and Tables. v

1     Introduction. 1

1.1      Background. 1

1.2      Organizational history. 1

1.3      Aspirations of OSD.. 2

1.4      Programmes and strategic priorities. 3

1.5      Projects implemented. 3

1.6      Key supporters and funders. 4

1.7      Budget performance. 5

1.8      Justification for the SP process. 5

1.9      Strategic planning process: methodology and challenges. 6

1.9.1       Methodology. 6

1.9.2       Challenges. 6

2     Environmental Scanning: Findings and Critical Issues. 7

2.1      Country context 7

2.2      SWOT assessment 8

2.2.1       Strengths and weaknesses. 8

2.2.2       Opportunities and threats. 14

2.3      Stakeholders Assessment 16

2.4      Critical Issues. 19

2.4.1       High prevalence of poverty, child abuse and neglect 19

2.4.2       Organizational capacity/system building. 19

2.4.3       Partnership and cooperation. 20

2.4.4       Communications. 20

2.4.5       Resource mobilization. 21

2.4.6       Intervention theme. 21

3     Aspirations. 22

3.1      Vision. 22

3.2      Mission. 22

3.3      Overall purpose. 22

3.4      Values. 22

3.5      Strategic objectives. 23

3.6      Implementation strategies. 23

3.6.1       Overarching implementation strategies. 23

3.6.2       Strategic objectives and interventions. 23

3.6.3       Strategic objectives and result indicators. 28

3.7      Action Plan. 32

3.8      M&E. 37

4     Implications of the Strategy. 38

4.1      Program implications– improve, start, stop. 38

4.2      Organizational Implications– structure, staffing, capacity building. 38

4.3      Financial/ Resource Implications. 39

ANNEXES. 40

Annex 1: Logical Framework Matrix. 40

 

1.Introduction

 Table 3: Strategic Interventions and Indicators

 

 ANNEXES

Annex 1: Logical Framework Matrix

Table 5: Logical Framework Matrix

Narrative summary	Objectively verifiable indicators	Means of verification	External factors (Assumptions)
Development Objective: By 2019, OSD will contribute for the reduction in extreme poverty and vulnerability through promotion of corporate social responsibility, child protection, gender equality, and social protection	·         Availability and quality of social protection, and child protection, services in selected areas ·         Trends in gender well-being and CSR	·         Baseline survey ·         Survey reports ·         Project monitoring and evaluation reports	·         Availability of funds ·         Commitment of stakeholders ·         Political and legal environment
Immediate Outcomes and respective outputs
Provision of quality social protection services to reduce extreme poverty and vulnerability	·         Availability of quality social protection services ·         Coverage  of social insurance ·         Employment level ·         Access to basic social services for the poor and vulnerable groups	·         Baseline survey ·         Survey reports ·         Project monitoring and evaluation reports	·         Availability of funds ·         Commitment of stakeholders ·         Political and legal environment
1.1 Social safety net for  poor and vulnerable individuals, households, from the adverse effects of shocks and destitution	·         Coverage and quality of social safety net services during times of destitution and shocks	·         Baseline survey ·         Survey reports ·         Project monitoring and evaluation reports	·         Availability of funds ·         Commitment of stakeholders ·         Political and legal environment
1.2 Increase in the coverage of social insurance	·         Coverage of social insurance	·         Baseline survey ·         Survey reports ·         Project monitoring and evaluation reports	·         Availability of funds ·         Commitment of stakeholders ·         Political and legal environment
1.3 Increase access to equitable and quality health, education and social welfare services	·         Accessibility of basic social services for the poor	·         Baseline survey ·         Survey reports ·         Project monitoring and evaluation reports	·         Availability of funds ·         Commitment of stakeholders ·         Political and legal environment
1.4 A minimum level of employment for the long term unemployed and under‐employed	·         Level of unemployment and under employment	·         Baseline survey ·         Survey reports ·         Project monitoring and evaluation reports	·         Availability of funds ·         Commitment of stakeholders ·         Political and legal environment
Provision of child protection services to reduce child poverty and vulnerability and foster access to basic services	·         Reduction in child poverty and vulnerability ·         Increase in access to basic services for vulnerable children	·         Baseline survey ·         Survey reports ·         Project monitoring and evaluation reports	·         Availability of funds ·         Commitment of stakeholders ·         Political and legal environment
2.1 Equip parents, caregivers and families  with child development knowledge and skill	·         Reduction in family induced violence on children ·         Knowledge and skills on child development	·         Baseline survey ·         Survey reports ·         Project monitoring and evaluation reports	·         Availability of funds ·         Commitment of stakeholders ·         Political and legal environment
2.2 Children and adolescents managing risks and challenges	·         Children and adolescents becoming less vulnerable for violence ·         Children and adolescents aware of responses for risks   and challenges	·         Baseline survey ·         Survey reports ·         Project monitoring and evaluation reports	·         Availability of funds ·         Commitment of stakeholders ·         Political and legal environment
2.3 Change in attitudes and social norms that encourage violence and discrimination	·         Less effect of attitudes that encourage violence against children	·         Baseline survey ·         Survey reports ·         Project monitoring and evaluation reports	·         Availability of funds ·         Commitment of stakeholders ·         Political and legal environment
2.4 Support for children, both victim and vulnerable, promoted and provided	·         Availability of quality support services for children	·         Baseline survey ·         Survey reports ·         Project monitoring and evaluation reports	·         Availability of funds ·         Commitment of stakeholders ·         Political and legal environment
2.5 Better data and knowledge on child abuse, neglect and HTPs  in selected areas	·         Amount of researches and data on child abuse, neglect and HTPs	·         Baseline survey ·         Survey reports ·         Project monitoring and evaluation reports	·         Availability of funds ·         Commitment of stakeholders ·         Political and legal environment
Promote CSR to increase the involvement of the private sector to lessen extreme poverty and vulnerability	·         Increase in awareness and engagement in CSR	·         Project monitoring and evaluation reports	·         Availability of funds ·         Commitment of stakeholders ·         Political and legal environment
3.1 Better engagement of businesses in CSR	·         Increase in the level of engagement of businesses in CSR	·         Project monitoring and evaluation reports	·         Availability of funds ·         Commitment of stakeholders ·         Political and legal environment
3.2 Awareness on the CSR of businesses among the community	·         Level of awareness on CSR ·         Amount of information/trainings availed on CSR	·         Project monitoring and evaluation reports	·         Availability of funds ·         Commitment of stakeholders ·         Political and legal environment
3.3 Conducive environment for businesses to engage in CSR	·         Legal and policy changes in favor of CSR	·         Project monitoring and evaluation reports	·         Availability of funds ·         Commitment of stakeholders ·         Political and legal environment
Enhance economic independence of women to ensure gender wellbeing	·         Decrease in Women’s poverty ·         Factors that affect women’s vulnerability lessened	·         Baseline survey ·         Survey reports ·         Project evaluation reports	·         Availability of funds ·         Commitment of stakeholders ·         Political and legal environment
4.1 Women workers empowered	·         Knowledge of women workers on their privileges ·         More women asserting their privileges	·         Baseline survey ·         Survey reports ·         Project evaluation reports	·         Availability of funds ·         Commitment of stakeholders ·         Political and legal environment
4.2 Women economically independent through social protection	·         Availability of women focused social protection services ·         Women able to access social protection services	·         Baseline survey ·         Survey reports ·         Project evaluation reports	·         Availability of funds ·         Commitment of stakeholders ·         Political and legal environment
4.3 Lessen women’s poverty, including in-work poverty, and put an end to the gender pay and pension gaps	·         Fair wage for women workers ·         Better pension and no gender pay	·         Baseline survey ·         Survey reports ·         Project evaluation reports	·         Availability of funds ·         Commitment of stakeholders ·         Political and legal environment
Capacity building of OSD	·         Human, material and system capacity of OSD	·         Organizational capacity assessment reports ·         Evaluation reports	·         Availability of funds
5.1 System building	·         Technical and administrative systems in place and up-to-date	·         Organizational capacity assessment reports ·         Evaluation reports	·         Availability of funds
Human capacity building	·         Retention capacity of OSD ·         Provision of on job and out of job trainings for staff ·         Due system for promotion and recruitment of staff in place	·         Organizational capacity assessment reports ·         Evaluation reports	·         Availability of funds
5.3 Material and logistics	·         Acquisition of materials/logistics for the proper functioning of OSD	·         Organizational capacity assessment reports ·         Evaluation reports	·         Availability of funds
Implement and enhance the MEAL system of OSD	·         OSD project management cycle guided by the MEAL system	·         Organizational capacity assessment reports ·         Evaluation reports	·         Availability of funds
6.1 The MEAL system of OSD upgraded and implemented	·         Adoption, implementation and updating of the MEAL system ·         Recruitment of MEAL expert	·         Organizational capacity assessment reports ·         Evaluation reports	·         Availability of funds
6.2 Project cycle management guided and informed by the MEAL	·         Coherent and systemic project cycle management	·         Organizational capacity assessment reports ·         Evaluation reports	·         Availability of funds

 

Indicative Activities	Inputs
Activities	Finance	Personnel	Material
1.1 Conduct baseline survey on social safety net in selected areas Establish and run social safety net programs in selected areas	6000000	·         Program coordinator ·         Project managers ·         Project officers and community development agents	·         Vehicles, office, and office equipment
1.2 Conduct baseline survey on community based social insurance mechanisms Design and implement projects that build on and support the existing social insurance mechanisms	1000000	·         Project officers and development agents	·         Vehicles, office and office equipment
1.3 Conduct a baseline survey on accessibility of basic services for the poor and vulnerable Extend the accessibility of basic social services for the poor and vulnerable (school feeding, health support-laboratory and radiology-, social welfare	2000000	·         Project officers and development agents	·         Vehicles, office and office equipment
1.4 Promote paid social service activities (cleaning, cobble-stone production, child-care, etc) Provision of basic skill trainings for unemployed and underemployed Raise funds for social services rendered by unemployed and underemployed	5000000	·         Project officers and development agents	·         Vehicles
Program Total	14,000,000
2.1 Provide trainings on parenting (house to house training, media training, brochures, at ANC stations etc)	500000	·         Program Coordinator, program Officer, project officers	·         Office materials, vehicle
2.2 Provision of self-defense, assertiveness, and risk management trainings for vulnerable children	300000	·         Program officer	·         Training venues, office materials, vehicles, and physical education materials
2.3 Awareness on social norms that sanction neglect and abuse of children (media programs, social media, brochure, and training)	300000	·         Project officer	·         Training venues, office materials, vehicles, and other education materials
2.4 Comprehensive support for victim and vulnerable children	500000	·         Project officer, counselor	·         Office materials, vehicles
2.5 Research and data collection on child protection issues	500000	·         Project officer, counselor	·         Office materials
Program total	2100000
3.1 Promote good practices of role model businesses	400000	·         Program Coordinator, program officer, project officers	·         Office materials, training venues
3.2 Promote CSR for businesses through media, trainings, and brochures	300000	·         Program Coordinator, program officer, project officers	·         Office materials, training venues
3.3 Engage government and Chambers to advocate conducive environment for CSR	200000	·         Program officer, project officer	·         Office materials, training venues
Program total	900000
4.1 Create partnership for promoting gender well-being at work-place Promote empowerment sessions for women workers	300000	·         Project coordinator, Program officer, Project officer	·         Partnership strategy, office and office materials
4.2 Enhance awareness on the uses of community based social protection Support the  community based social protection mechanisms	1000000	·         Project coordinator, Program officer, Project officer	·         Office and office materials, guidelines on community based social protection mechanisms for women
4.3 Promote equal pay and pension through CSR	400000	·         Project coordinator, Program officer, Project officer	·         Office and office materials
Program total	1700000
5.1 Adopt and adopt financial, administrative, technical guides/manuals of the organization	200000	·         Executive Director, Admin and finance officer	·         Office and office materials
5.2 Recruitment of qualified staff Recruitment of volunteers Provision of on job and out of job trainings for staff Adopt and update human resource manual for staff and volunteer	500000	·         Executive Director, Admin and finance officer	·         Office and office materials
5.3 Procurement of vehicles (light and field vehicles) Procurement of office materials	2000000	·         Executive Director, Admin and finance officer	·         Office and office materials
Program total	2700000
6.1 Adopt and upgrade the MEAL system of OSD	300000	·         Executive Director, MEAL officer	·         MEAL guideline, office and office materials
6.2 Project cycle management guideline	50000	·         Executive Director, MEAL Officer	·         MEAL guideline, office and office materials
Program Total	350000
Grand total	21,750,000

 

 ORGANIZATION ADMINSTRATION MANUAL

 

   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 OSD firmly believes that social justice ensures equal access to opportunities essential for minimum quality of life (access to basic goods and services). In contexts where there is social justice, everyone is treated with dignity and respect. OSD considers that socially responsible business is a prerequisite for social justice and promotes corporate sensitivity to economic, social and environmental expectations of the society. Corporate Social Responsibility (CSR) encourages businesses to invest portion of their profit and skills for the benefit of the community through environmental protection and preservation, provision of basic goods and services and, creation of opportunities for economic betterment. Moreover, CSR-focused businesses proactively promote the public interest by encouraging community growth and development, and voluntarily eliminating practices that harm the public regardless of legality.

 

 The manner in which the General Assembly is composed and discharged its powers and responsibilities are described in the statute of OSD.

 

 

 

 

 

 

 

 

 

 

 

 

 ·        Receive cash and/or check against cash receipts, deposit collected money in the bank and draw cash from the bank.

 

 

 ·        Ensure that timely payments are made in settlement of OSD's obligations.

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 However, any leave post pond in accordance with this sub- article shall not be post pond for more than two years.

 

 

 

 26.9The salary to be paid to part time staff members shall be fixed by the Executive Director on the basis of the salary and minimum requirements schedule at the time of employment in consultation with the Management Committee.

 employ for a period of no more than six months a new staff to replace a staff member who is unable to discharge his/her duties.

 

 31.5 No additional loans shall be given before outstanding ones are cleared.

 

 36.4 In calculating the average evaluation results of an employee, the aggregate of the results of the biannual evaluations shall be taken.

 

 

 

 

 CHAPTER VII

 

 

 

 

 

 Experience gained after attaining educational qualification.

 

 The nomination committee will be accountable to the Executive Director and will have the following duties and responsibilities.

 The Secretary will be selected by the Management Committee and performs the following activities:

⯑ The notice should be signed by the director and have seal of the organisation;

 

 

 

 

 

 

 

iii) Worse 

d) Recommendations on performance evaluation of employee on probation

 i) Since he/she Meets Expectations (or above ME), let him/her be permanent employee

ii) Since he/she Low Meets Expectations (LM), his/her probation period should be extended by 45 days.

iii) Since he/she is Below Expectations (BE), he/she should be dismissed

 e) The Supervisor who rated the employee

 

 

 

Name                                                               Signature                     Date

 

f)                   Comments given by the employee                                                                             

 

 

 

 

 

 

 

 

 

 

 

Name                                                   Signature                     Date

 

g)                  Reviewing Official’s remarks                                                                                     

 

 

 

 

 

 

 

 

 

 

 

 

Name                                                   Signature                                 Date

Organizational Safeguarding Policy

ORGANIZATION CIVIC SPACE ADVOCACY STRATEGY                                                       

Contents

1.      Background of the Organization. 2

1.1 Legal status. 2

1.2 Vision. 3

1.3 Mission. 3

1.4 Thematic Operation. 3

1.5 Overall Objective. 4

1.6 Values. 4

2.      What is Civic Space?. 4

3.      Civic Space Advocacy in Ethiopia. 5

4.      Organization for Social Development’s Engagement in Advocating Civic Space. 6

4.1 Designing Advocacy Messages. 6

4.2 Advocacy engagement with government. 7

4.3 Building a constituency for advocacy. 7

4.4 Media Advocacy. 7

4.5 Leveraging new technologies for increased participation and protecting civic space online. 8

 

 1.Background of the Organization

Rooted in pursuit of the public interest and social justice, Organization for Social Development (formerly Organization for Social Justice in Ethiopia) has been engaged, since its establishment in 2003, in wide and diverse interventions ranging from advancement of human welfare, democracy and good governance to maximizing the role of the private sector in promoting social justice by upholding Corporate Social Responsibility (CSR) as the main thematic area of its operation.  Realizing the enormous but untapped potential of the private sector to advance human rights and materialize people-centered all inclusive development in the country, OSD has launched in 2010 a strategic plan to promote Corporate Social Responsibility (CSR) among the business community, government organs and the public.     

Since then, OSD has implemented projects that achieved an increased awareness and understanding on CSR and enhanced capacity of the private sector to comply with international and domestic principles and standards which deal with different aspects of CSR.  Having research as one of its main components researches on private sector and civil society partnership, the role of the private sector in advancing reproductive health in Ethiopia, engagement of the private sector in improving welfare of disadvantaged and vulnerable groups and,  corporate social responsibility and child welfare, have been undertaken.  Analyzing legal and policy environments and practices as well as bringing on board international initiatives and best practices, these researches substantially contributed in addressing the information gap with regard to CSR practice in Ethiopia and have provided baseline for contextualizing and adopting CSR initiatives. In addition to conducting researches OSD works to introduce the concept, to raise awareness on different aspects of CSR, to enhance implementation by the private sector and to advocate for creation of an enabling legal and policy environment by using broadcasting and print media, organizing trainings targeted at selected representatives from governmental offices, civil society, Chamber of Commerce and Sector Associations; promoting good practices using different mechanisms and; establishing partnerships/networks with different entities including chambers of commerce and sect oral associations.

1.1 Legal status

Organization for Social Development (OSD) (formerly called Organization for Social Justice in Ethiopia (OSJE)) is an indigenous, non-profit, non-partisan, non-governmental organization. Under the requirements set by a new Charities and Societies Proclamation (entered into force on February 13, 2009) Organization for Social Development re-registered as Ethiopian Resident Charity by Federal Democratic Republic of Ethiopia, Ministry of Justice, Charities and Societies Agency on November, 2019 – License Number 0843 assuming the current name. 

1.2 Vision

Seeing a community wherein equitable access to basic economic and social services for every citizen is ensured.

1.3 Mission

 We foster social development with special emphasis to environment protection, access to standard and quality social services and productivity by promoting Corporate Social Responsibility (CSR) among business organizations, citizens, and government bodies.

1.4 Thematic Operation

The general thematic areas of which Organization for Social Development engages itself in are:-

·         Health

·         Education

·         People with Disability

·         Environmental Protection

·         Women Economic Empowerment

·         Refugees etc……

Specifically Organization for Social Development has been focusing on promoting the concept Corporate Social Responsibility among private businesses, citizens and government bodies as to improve and strengthen the role played by business firms in the development endeavors of the country. For this purpose, OSD organizes its interventions into three categories:

• Awareness and Capacity Building- focuses on ensuring enhanced CSR activities and understanding among business organizations, the government and the general public
• Research- focuses on improving CSR knowledge and information as well as identifying further intervention areas to improve laws, policies and practices related to CSR in Ethiopia
• Advocacy and Promotion- aims at creating an enabling and favorable legal and policy environment for CSR practices and improve CSR performance among the business community

1.5 Overall Objective

To increase involvement of private sectors in the development process of the country, through awareness creating, promoting practices, and advocating for an enabling environment pertaining to Corporate Social Responsibility in the country.

• To promote environment protection
• To promote accessibility of standard and quality public/social services to the society (education, health, food, shelter)
• To encourage productivity and quality services

1.6 Values

      The core values that inspired the vision and mission of the Organization for Social Development    include

•    Lasting Impact
•  Participation and empowerment
• Self-actualization
• Equality
• Justice
• Integrity
• Accountability

 

2.What is Civic Space?

 

Civic space is the environment that enables people and groups – or “civic space actors” – to participate meaningfully in the political, economic, social and cultural life of their societies. States shape the legal and policy space within which people express views, assemble, associate and engage in dialogue with one another and with authorities about issues that affect their lives, from the quality of basic services, to better institutions and respect for fundamental freedoms. Civil society actors – including human rights defenders, women advocates, children, young people, members of minorities and indigenous people, trade unionists and journalists – should to be able to express themselves freely in full security and effect change peacefully and effectively.

Importantly, civic space relies on formal and informal channels through which individuals and groups can play a role in policymaking and contribute to decision-making, political and peace building processes. These require mechanisms that allow effective access to information, dialogue and the expression of dissenting and unpopular views.The freedoms of expression, including access to information, of peaceful assembly and association apply at all times – both online and offline. A vibrant civic space requires an open, secure and safe environment that is free from all acts of intimidation, harassment and reprisals, whether online or offline. Any restrictions on such a space must comply with international human rights law [i.e., must not discriminate, must be provided for by law, and be necessary and proportionate].

3.     Purpose of the Advocacy Strategy

 4.     Civic Space Advocacy in Ethiopia

Change in civic space impacts participation, association and expression of thoughts. Yet civic space, as the oxygen for people’s voices, and vital prerequisite for CSOs to function, is currently shrinking on a global scale. CSOs, Medias and people around the world face serious restrictions and repression when exercising their basic rights due to shrinking civic space. The case in Ethiopia depicts that freedom of speech, association and expression of thought is not legally denied. The legal infrastructure of the country is as pleasant as those states known with their protection of human rights violations.

The government in Ethiopia had introduced some initiatives to participate civil society organizations and other conscious actors in the policy making process. The past five years the Ethiopian government spanning the range of political systems from closed during the developmental state of the previous regime to semi-democratic. It relived the legislative restriction against the activities of civil societies, introduced less restrictive media law and revised anti-terrorism proclamation.

The government has taken a crucial step in realizing effective operation of CSOs by revising the former proclamation no. 621/2009. Nonetheless, while the country had appeasing legal documents, the government had installed operational impediments. The failure of some bureaucrats in government institutions to understand the amended legal provisions put tremendous administrative impediments for CSOs. With the passage of time the government attempt to de-legitimate civic actors on grounds that it is partial, elitist, or foreign affiliated. Civic space has undeniably shrunk. Therefore, CSOs shall devise advocacy strategies to broaden the civic space. 

CSOs can undertake effective advocacy to champion the broadening of the civic space. Advocacies constitute one of the key elements engagement by the CSOs. Through effective advocacy, CSOs can make a difference and influence decision makers to take steps to broaden the civic space. The civic space situation, therefore, get improved through this advocacy.

This could be done through a series of tools and actions including generating evidence on civic space, dissemination of monitoring reports, private engagements with relevant bodies and conducting media campaigns to ensure visibility for the issues and that action if taken. It is crucial that CSOs devise timely and relevant advocacy strategies by placing the necessary staff and funding on board to bring about the necessary policy change using the most appropriate channels and that they should combine different strategies for maximum impact.

5.Organization for Social Development’s Engagement in Advocating Civic Space
Organization for Social Development will follow the below listed advocacy strategies can help to impact the civic space in Ethiopia.

4.1 Designing Advocacy Messages

Since effective advocacy requires a clear discourse or message for each policy engagement, based on a thorough analysis of how to influence the situation in the civic space, advocacy messages will be designed and tailored to specific authorities in order to frame a certain policy matter and persuade the receiver to take action to improve the situation.  Advocacy message is more likely to have an effect when there is a constituency for it and when multiple institutions are able to convey it.

4.2 Advocacy engagement with government

Any successful civic space advocacy requires effective engagement with government actors. Based on a strategic analysis of how to approach a specific civic space determinant, OSD shall identify and prioritize a certain set of actors who have the authority to bring about the desired change. In that regard, the initial approach often will involve presenting verified information and analysis the civic space to the authorities that have the power to bring about the change.

4.3 Building a constituency for advocacy

Interventions for civic space and influence with the authorities do not always turn out as expected. Sometimes CSOs may not achieve the desired initial objective and other times they may obtain more than initial planned. One way to enhance concerned effort is to build to constituency for advocacy to advance advocacy agenda around a human right policy. The larger the support base, the greater the chance of success. As a result, as CSO, OSD should ascertain it has sufficient partnership with national and international actors that can advance its civic space agenda. It can employ different tactics to achieve that including more formal approaches of convening crucial actors or but also informal ways. Authorities are often more prone to direct influence through other contacts in the community, such as other policymakers, religious leaders, the media, and community-based organizations and so on. OSD should consider and explore these avenues so that it may identify individuals or organizations that can sometimes be more effective at transmitting civic space to the relevant authorities.

4.4 Media Advocacy

Media advocacy is the use of media, including social media, to advance civic space agendas. Since media plays a significant role by raising awareness of human rights issues, expose violations, and empower people to take action. In terms of advancing CSOs the media can be used to amplify the advocacy messages, to create strong constituency for influencing policy makers by making the issues CSOs are pushing for to be heard more loudly. OSD will develop media engagement strategy and conduct media with the aim of:

•  Informing the media- and through them the public- about the civic space and the impact on them (the medias).
• Persuading the media to cover issues regarding the civic space from the civil society organization angle
• Using the media to pressure policy makers to change or institute the civic space
• Influencing the media to give civil society organization or other coalition extensive coverage

 4.5 Leveraging new technologies for increased participation and protecting civic space online

Digital tools are used by more than 3 billion people around the world to access and store information, to express opinions, to participate in decision-making and to mobilize. Digital technologies have created new spaces for exchange, mobilization and participation. At the same time, obstacles to expression, participation and assembly have evolved or intensified, such as in the case of Internet shutdowns, online surveillance, online attacks and disinformation campaigns. Responses to these challenges are also more complex, as online civic space platforms are often privately owned

Therefore, putting the maximum influence on the government to encourage the establishments and to ease the requirements of establishing civil society organizations for children and child led civil society organizations.

 For this purpose the following strategies will help

• Sensitization of government bureaucrats to understand the amended proclamations that comparatively broadened the civic space.
• Encouraging the community of practice or networking among civil society organizations to have a common voice of challenging the legal and administrative impediments.
• Engaging the civic actor such as media to popularize and create an informed citizen in resisting the political, administrative.

Moreover, to effectively address restrictions on civil society space, OSD will target and involve a range of stakeholders such as: international institutions and donors; international and national civil society; networks; media; and the general public.

In addition, Organization for Social Development as a CSO, in collaboration and coalition with Save the Children Partners (CEHRO, GPSDO, RATSON and others) will play its own role in different platforms and engagements to widen civic spaces. It will also make efforts to prepare workshops, discussion forums and consultative meetings to influence decision makers.

 

 

 

 

 

 Organization for Social Development (OSD)

Addis Ababa, Ethiopia

2024

     

 

 

 

Tables of Contents

1.Message from the Excutive Director  …………………………………..1               

 2.Background of the Organization 2

2.1 Legal status 2

2.2 Vision 3

2.3 Mission 3

2.4 Thematic Operation 3

2.5 Overall Objective 4

2.6 Values 4

3. Child Right & Bussiness 4

4. Program Profile with SIDA 2022-2024 …...4

5. About the Project 5

6.Perspective of the Most Marginalized and Deprived Children….……...6

7. Child Right Programming ………………………………………………………….7

8. Environment and Climate……………….……………………………………….…8

9. Gender equality………………………………………………………………………..9

10. Conflict sensitivity….…………………………………………………………….10

 

 

 

 

 

Organization for Social Development (OSD) is delighted to publish this year magazine focusing on the achieved results based on project implemented in partnership with different stakeholders. In this edition, you will find articles based on our engagements categorized under the following five perspectives:

• Perspective of the Most Marginalized and Deprived Children
• Child Right Programming
• Environment and Climate
• Gender Equality and
• Conflict Sensitivity

Organization for Social Development has been promoting the concept of children’s right and business principles (CRBP) for the last few years. It is a comprehensive framework for understanding and addressing the impact of business on the rights of children. It is basically a guide set for businesses in their interaction with children. The rationale behind setting such a standard is to encourage businesses to embrace, support and enact, within their sphere of influence, a set of values in the areas of protection of children.

CRBP is developed by UNICEF, the UN Global Compact and save the children International as the first comprehensive set of principles to guide companies on the full range of actions they can take in the workplace, marketplace and community to respect and support children’s rights. It came out on the year 2012 to depict businesses where and how their operation affect children. 

As we all know children are part and parcel of the society. They are consumers, family members of employees, young workers as well as future employees and tomorrow leaders. Despite this truth they are the most marginalized and vulnerable members of society and this is evident from their lacking of public voice. They are rarely given a say or consulted about how communities make decisions-even decisions affecting them directly, such as planning for schools and recreational areas. Yet, when given the opportunity to participate, children have demonstrated that they can provide important alternative view points and make valuable contributions.

Given the increasing recognition of the private sector as a critical stakeholder and partner in the country’s economic development, enhancing its understanding of Child Rights in Business Principle (CRBP) and promoting an encouraging policy environment and a socially conscious society is vital to ensure sustainability and to position human well-being at the center of the development process. 

In the meantime Civil Society Organization (CSOs) are expected to play key role in the above endeavor, among others, by creating awareness on socially responsible operational standard among the private sector, government organs and the community; advocating for adoption of progressive polices; identifying and promoting good practice and; establishing coalitions to facilitate and monitor compliance of business companies to standards and principles. Understanding this OSD has launched in 2020 a strategic plan to promote Child Rights in Business Principle (CRBP) and has implemented various projects accordingly.  Yet, we learned from our experience that CRBP touches up different issues that require involvement of wide and divers actor. Therefore, I call up on all partners in development to be engaged in concerted effort to develop a culture of responsible business in Ethiopia.  

WondossenAyalew (PhD)

Executive Director 

 

        

1.Organization Background 

Organization for Social Development: Pioneering Child Rights in BusinessPrinciple (CRBP) in Ethiopia

Rooted in the pursuit of public interest and social justice, the Organization for Social Development (formerly the Organization for Social Justice in Ethiopia) has been actively engaged since its establishment in 2003. The organization's diverse interventions span from advancing human welfare, democracy, and good governance to maximizing the private sector’s role in promoting social justice throughChild Rights in Business Principle (CRBP) the main thematic focus of its operations.

Recognizing the immense, untapped potential of the private sector to advance human rights and drive people-centered, inclusive development, OSD launched a strategic plan in 2020 to promote the concept of CRBP among businesses, government entities, and the public.

Since then, OSD has successfully implemented projects that have raised awareness and deepened understanding of CRBP. These initiatives have also enhanced the private sector's capacity to align with both international and domestic principles and standards. With research as a cornerstone, OSD has conducted studies on private sector and civil society partnerships, the role of businesses in advancing reproductive health in Ethiopia, and CRBP’s impact on the welfare of disadvantaged groups, particularly children.

By analyzing legal and policy environments and incorporating international best practices, these research efforts have helped bridge information gaps regarding CRBP in Ethiopia. They have also provided a baseline for adapting CRBP initiatives to the local context.

In addition to research, OSD actively promotes CRbP through various avenues. These include raising awareness via print and broadcast media, organizing targeted training sessions for government officials, civil society representatives, and chambers of commerce, and advocating for a favorable legal and policy framework. OSD’s efforts also extend to promoting good practices, forming strategic partnerships, and establishing networks with chambers of commerce and sectoral associations to strengthen CRBP's impact across Ethiopia.

1.1 Legal Status

The Organization for Social Development (OSD), formerly known as the Organization for Social Justice in Ethiopia (OSJE), is an indigenous, non-profit, non-partisan, and non-governmental organization. Following the enactment of the Charities and Societies Proclamation on February 13, 2009, OSD re-registered as an Ethiopian Resident Charity with the Ministry of Justice’s Charities and Societies Agency in November 2019, under license number 0843, officially adopting its current name.

1.2 Vision

A community where every citizen has equitable access to basic economic and social services.

1.3 Mission

We promote social development with a focus on environmental protection, access to quality social services, and productivity. Our primary tool is the promotion of Child Rights in Business Principle (CRBP) among businesses, citizens, and government bodies.

Thematic Areas of Operation

OSD engages in a wide array of thematic areas, including:

• Health
• Education
• People with Disabilities
• Environmental Protection
• Women’s Economic Empowerment
• Refugees

Specific Focus on Child Rights in Business Principle (CRBP)

A core focus of OSD is promoting the concept of CRBP among private businesses, citizens, and government bodies, with the aim of enhancing the role businesses play in national development. To achieve this, OSD structures its interventions into three key categories:

1. Awareness and Capacity Building – Focuses on enhancing understanding and activities related to CRBP among businesses, government bodies, and the general public.
2. Research – Concentrates on improving CRBP-related knowledge, identifying further areas for intervention, and recommending improvements to laws, policies, and practices related to CSR in Ethiopia.

Advocacy and Promotion

Our advocacy and promotion efforts aim to create a favorable legal and policy environment for Child Right in Business Principle (CRBP). By doing so, we are working to improve CRBP practices and performance within the business community.

Overall Objective

Our main objective is to enhance the private sector’s involvement in Ethiopia’s development through increased awareness, promotion of CRBP practices, and advocacy for an enabling environment. Key goals include:

• Promoting environmental protection.
• Ensuring accessibility to quality public and social services such as education, health, food, and shelter.
• Encouraging productivity and quality services across sectors.

Values

The following core values inspire the vision and mission of the Organization for Social Development:

• Lasting Impact
• Participation and Empowerment
• Self-Actualization
• Equality
• Justice
• Integrity
• Accountability

Child Rights & Business /CRB/

Organization for Social Development (OSD) has developed a national strategy on Children's Rights and Business that emphasizes the following key points:

• The government of Ethiopia has obligations to regulate the impact of business activities on children's rights, as outlined in the Convention on the Rights of the Child and its optional protocols, including:
• The Optional Protocol on the sale of children, child prostitution, and child pornography.
• The Optional Protocol on the involvement of children in armed conflict.
• The African Charter on the Rights and Welfare of the Child reinforces these obligations.
• The Ethiopian Constitution, along with various national laws and policies, also plays a critical role in regulating how businesses impact children’s rights.

These obligations cover a variety of issues, reflecting the fact that children are both rights-holders and stakeholders in business as consumers, legally engaged employees, future employees and business leaders and members of communities and environments in which business operates. Specifically, the strategy helps to, 

 

• Establish common platform for understanding of the concrete steps that can be taken to ensure the realization of children’s rights in the business context.
• Increase businesses’ active involvement in supporting children’s rights through their activities;
• Address the child rights challenges resulting from the actions of the business community and possible remedial action;
• Explore the opportunities for the promotion and protection of children’s rights in the workplace; marketplace and environment 

The document also stipulates the monitoring mechanism to ensure that the business sector remains committed to promote and respect children’s rights. The process shall compose of the following steps:-

 

• Formation of a core group that will focus on monitoring the impact of business on children.
• Maintaining regular dialogues between the business sector and the core group. The dialogue will focus on the issues experienced by the business sector and the people in the community, best practices employed by business and recommendations in response to issues.
• Gathering of opinion from the people (adult and children) about the impact of business on their lives and on their community.
• Writing a report about the issues experienced by children and adults and recommendations to solve these issues.
• Presentation of the report to business and government through a dialogue.

The Ministry of Women and Children’s affairs has been  lobbying  the  adaptation of  the National strategy on Children's Rights and Business so that it becomes  a national level guiding document that directs the activities of businesses vis-à-vis child rights and wellbeing. 

 

 

 

SAVE THE CHILDREN SWEDEN’S 

 

GLOBAL CIVIL SOCIETY

 

STRENGTHENING 

 

 PROGRAMME WITH SIDA   2022-2024

 

Program Rationale 

Save the Children Sweden has worked in partnership with and in support of civil society organizations for more than 30 years and our commitment to work in equitable partnerships remains strong. We believe that an enabling civic space, where civil society organizations and actors, including children, can work freely, is key for the realization of human rights, including children’s rights. A strong, diverse, inclusive and vibrant civil society is a prerequisite for democratic societies, the fulfillment of human rights and the Sustainable Development Goals. By working together with local child rights organizations whom we share with the common goal of achieving the full realization of children’s rights, we can also contribute to Save the Children’s global breakthroughs. The role of civil society is a key component in Child Rights Programming (CRP). Civil society organizations (CSOs) can empower and enable children, as rights-holders, and together claim children’s rights, holding governments to account.

Overall Program Goal

A strong civil society that demands and supports the fulfillment of children’s rights holding states to account and mobilizing and empowering children and their communities.

4 Program Outcomes 

Civil Society Capacity: In this outcome, CSOs will have improved the quality of their programming, increased organizational efficiency and effectiveness and have increased voice and influence as child rights actors in their own right. 

Children’s agency: In this outcome, children gain increased understanding of their rights, and skills related to advocacy and campaigning. Partnerships are established, formal and informal, with child-led organizations. Children have opportunities/spaces to hold duty-bearers to account, 

and inform decision-making. Child participation initiatives are supported to apply internationally recognized standards for safe, ethical and meaningful participation.

 

Child rights: In this outcome, CSOs increase their capacity to monitor and report, and hold the state to account for their commitments on children’s rights. CSOs gain capacity to advocate for inclusive policies, practices, systems, budgets and services for children’s rights, on all levels, based on their own organizational focus. Lastly, CSOs equip duty bearers with skills and tools to strengthen children’s services within the national system.

Civic space: In this outcome, Capacity to assess, analyze and adapt to changes in civic space is jointly strengthened in Save the Children and partner CSOs, and action is taken against repressive CSO laws and regulations (by Save the Children and partner CSOs). CSOs get improved access to policy dialogue and public debate where they can influence decision making. Lastly, CSOs become better positioned to mitigate risks relating to their protection and safety against attacks or/and threats from state and non-state actor.

The four key outcome areas are linked to the overall ambition and program goal. The outcome areas are directly linked to the Swedish government´s strategy that guides the funding for the global CSO program, and the Child Rights Programming approach. To be eligible as a partner in the Global Civil Society Strengthening Program, all Country/Regional Office proposals must plan for, and demonstrate, their relevance and direct contributions to the four outcome areas.

Partnership approach to support a strong civil society

Partnerships are at the center of Save the Children’s theory of change and for this program exclusively limited to civil society partnerships. Save the Children´s partnership principles - value driven and empowering relationships, transparency and accountability, mutual benefit and complementarity are also linked to strengthening of local ownership and leadership, a key principle of development effectiveness. Save the Children will, guided by our partnership principles, provide support to (not through) civil society organizations, for them to grow as independent, sustainable, competent and legitimate actors to advocate for children’s rights in a changing climate. This approach links well with the broader localization agenda

The global CSO-program will make a significant contribution to Save the Children´s localization policy in all contexts, aiming to empower and strengthen local actors (civil society organizations) in their own right promoting and defending child rights.

 

Capacity strengthening is a central concept in Save the Children Sweden´s partnership approach and providing capacity strengthening support at all levels of Save the Children´s capacity strengthening triangle is mandatory. Level one and two are linked to formal partnerships (independently of modality) and the third level also includes the wider civil society, where the role of Save the Children is to be facilitating and supporting an enabling environment for the broader civil society and not only linked to civil society organizations and actors with whom we have a formal relationship.

At all three levels, the capacity strengthening agenda and process shall be partner-led and Save the Children will provide capacity-strengthening support (technical and financial).

Organizational capacity strengthening (OCD) will be a mandatory component of the program and offered to all CSOpartners, according to a specific model and toolkit developed for this purpose. Areas of particular importance within the OCD support are governance and 

accountability structures, financial management, child safeguarding and MEAL, which are areas where CSO-partners commonly identify gaps and weaknesses.

The added value that Save the Children Sweden and Save the Children International expects to bring to local partnerships is a long-term perspective and predictability of funding, close dialogue, expertise and learning, and a platform for visibility, recognition and networking. Save the Children’s role is complementary to and supportive of what local and national actors already do, to ensure the fulfillment of children’s rights.

Partnership modalities for support of CSO partners

Within the program, it will be possible to engage CSO-partners through the three different partnership modalities defined below.

1. Project support is the most common partnership modality within Save the Children and in this program emphasis will be given to the CSO-partner´s participation throughout the partnership cycle.

2. Program support is a wider support targeting a larger scope of work towards a thematic/strategic area within the CSO-partner´s strategy and/or an integrated program approach.

3. Core support provides a civil society partner with holistic support to the implementation of their own strategy where the funding contribution is unrestricted, and where monitoring and reporting is built on the CSO-partner´s own systems, policies and procedures. In order to be eligible for core support, the CSO partner must be a strategic child-rights partner with influence and legitimacy; demonstrate good track record of qualitative implementation of programs with a strong rights-based approach; demonstrate matureness as an organization with stable management structures and internal control systems. Networks, coalitions and child-led organizations may not fulfill all the above requirements, but are eligible for core support due to their specific scope of operations. Approximately

children, for example children with disabilities, girls, children in migration and displacement, children of diverse sexual orientation, gender identity or expression, children experiencing violence or abuse.

3. Environment and climate

Save the Children has committed to step up our efforts to respond to the climate and environmental crisis that threatens children’s survival, learning and protection, by minimizing our impact on the environment and seize opportunities to advance sustainable development. There are three possible avenues to engage in climate and environmental work:

1. within a planned program/project

2. Supporting child-led and/or child informed advocacy 

3. Linked to organizational capacity strengthening

4. Gender equality

In the global CSO program, Save the Children Sweden will raise the ambition of the work to promote and integrate gender equality. In line with Save the Children essential standards, all programs are expected to be gender-sensitive as a minimum, ensuring equitable access to resources and services, power and decision-making, participation and benefit and, moreover, clearly show the roadmap to becoming gender transformative, actively promoting gender equality by addressing the root causes of existing inequalities. Save the Children´s Gender Equality Policy, the mandatory Gender Equality Marker and the Gender Equality Toolkit provide guidance.

5. Conflict sensitivity

Any Save the Children program has an impact, positive or negative, direct or indirect, intentional or unintentional, on the context in which it is implemented. Therefore, each concept note must adopt a conflict-sensitive approach to program design and implementation. Being conflict-sensitive means: (1) to demonstrate a solid understanding of the context in which Save the Children and its partners operate, or plan to operate, (2) take into account the interaction between the intervention and that specific context, and (3) act upon this understanding to minimize negative impacts and maximize positive impact on conflict factors. At minimum, it means to comply with the Do-No-Harm principle. At best, it means supporting drivers of stability and social cohesion

 

 

 

About the project 

 

Organization for Social Development has secured a five year funding (2022-2026) from Save the Children International to engage with garment and textile industries to support, respect and protect children’s rights. In connection to this, there are a number of planned activities phased across five years and some of them are already in place. Under this project, while garment and textile industries  are regarded as primary targets, governmental organizations responsible for regulating the activities of businesses such as  Ethiopian Chamber of Commerce, Ethiopian Textile industries Development Institution(ETIDI), Ministry of Women, children and Social Affairs and other Sectorial Association and  Civil Society organizations are considered as key stakeholders as they are expected to play a prominent role in promoting compliance of business companies to child wellbeing related principles and standards as well as in establishing national systems and structures to promote child welfare in the context of business by encouraging the private sector to enhance investment in children and to act in a socially responsible manner as well as by fighting  corruption. 

The project is implemented in Addis Ababa city. The city of Addis Ababa is divided into 11 sub cities and 116 Woredas. Among these administrative units, this project is implemented in the 12 woredas of Nifas Silk Laftosub city. After selecting the sub city, the project proposal was presented to the sub city’s finance and economic development office and the sub city’s women and children and social affairs office for appraisal and approval because one of the focus areas of the project is strengthening child parliaments so that they become voices for children and the project activities are designed to contribute to that end.  The aforementioned offices reviewed the proposal and provided comments on changes to be made. The process involved a back and forth of the offices making suggestions and OSD making corrections. It was a long process in which OSD exerted maximum efforts to accommodate comments, align the suggestions of both offices and not to deviate from the objectives of the project, the organization and donor. After going through these processes, the project was approved by the sub city finance and economic development office and a memorandum of understanding was signed between the bureau and OSD.

With regard to the civic space situation in the operation area vis-à-vis the new CSO law; it has created a pleasant working environment especially in relation to implementing the project using a right based approach. This change in the operating environment has enabled child led groups (right holders) to hold government offices (duty bearers) responsible for the respect of their rights. OSD had a good working relationship with chamber of commerce and sectorial associations. This working relationship is based on the MoU signed between the two parties and the new CSO law has no effect on this working relationship.  The level of engagement with local government offices ranges from project appraisal to monitoring and evaluation. 

One of the areas of focus of Save the Children International (SCI) work in Ethiopia is to improve implementation of the UNCRC and ACRWC among others, by increasing awareness of child wellbeing and Corporate Social Responsibility (CSR) in the private sector and other non-state actors. 

This project is aimed at increasing the awareness of the private sector and enhancing their capacity by putting in place the best practices and models for observing Child wellbeing and Business Principles (CRBP). OSD designed this project based on its experience engaging in CSR promotion and collaborating with Chamber of Commerce and Sectorial Associations as organized forums represent the business community. This project is entitled “Enhancing the Engagement of Garment and Textile Industries to Promote Child Wellbeing in Ethiopia” and will be executed for the next five years from 2022 up to 2026.  An assessment on CSR, its practices and legal and policy contexts undertaken by OSD in 2013, while revealing a huge gap in light of CSR and Child wellbeing awareness and understanding among business companies and other stakeholders, has identified international and domestic initiatives (e.g. CRBP, the Ethiopian Code for Corporate Governance (ECCG), the Model Code of Ethics for Ethiopian Businesses (MCEEB) and good practices that impact realization of wellbeing of children in Ethiopia. 

On the other hand, the research undertaken by the project in 2013 as well as consultations held with various stakeholders─ including children─ in seminars/workshops and trainings have pointed out absence of a comprehensive guide at the national level which sets out business’s responsibility as to respecting and promoting children’s welfare. The seriousness of the issue of business and child welfare and gaps dealing with it at state/policy level has also been recognized internationally and in response, the UN Committee on the wellbeing of the Child had released a general comment explicitly on State obligations regarding the impact of the business sector on children’s wellbeing in 2013 (General Comment No. 16).  The UNHCRC General Comment No. 16 demanded states to develop guidance that explicitly sets out government expectations for business enterprises to respect children’s wellbeing in the context of its own business activities, as well as within business relationships linked to operations, products or services and activities, . Furthermore, the Comment demanded states to adopt a comprehensive strategy to inform and educate on business’s responsibility of respecting children’s wellbeing as well as to facilitate and coordinate engagement of different stakeholders.

Following recommendations forwarded in a multi-stakeholders conference on child welfare held under this project in 2014 and 2015, OSD is undertaking consultation with MoWCA (Ministry of Women and Social Affairs) on designing a guideline for the expectations of the government on private sectors to respect and children’s welfare. Moreover, capitalizing on ECCSA( Ethiopian Chamber of Commerce and Sectoral Association)’s interest to introduce and promote the Model Code of Ethics for Ethiopia Businesses, a tri-partite Memorandum of Understanding and an action plan, between ECCSA, OSD and Fana Broadcasting Corporate (FBC) has been signed on July 29, 2015. Instituting annual business ethics award in different categories, creating awareness, promoting good practices, conducting researches on different specific issues and building the capacity of business enterprises to comply with principles and standards (through training, technical support and other capacity building interventions) are parts of the action plan

Under this project wide range of interventions aimed at creating awareness about CSR Corporate Social Responsibility (CSR) and Child Rights and enhancing compliance to already in place initiatives such as Child Rights in Business Principles (CRBP), the Model Code of Ethics for Ethiopian Businesses and the Ethiopian Code for Corporate Governance, Inter Sectional Gender Lenses, and awareness on the impacts of climate change on the rights of children will be undertaken. The activities will mainly focus on recognizing and promoting good practices, facilitating formation of a multi-stakeholders committee on business and children with MoWSA (Ministry of Women and social affairs) structure, development of a comprehensive national guide that manage/deals with business’s responsibility towards children, awareness creation  and provision of technical assistance to integrate CRBP(child rights and business principles).  

The general objective of this project is to promote realization of child wellbeing in Ethiopia through maximizing adherence of the garment and textile industries to international and domestic principles and standards on Child wellbeing and enhancing collaboration among different stakeholders. 

We aim to achieve the following specific objectives:-   

• To increase the engagement of the garment and textile industries in respecting, protecting and supporting the fulfillment of children’s wellbeing through trainings and technical support;
• To put in place national systems that regulate/manage business responsibility towards children through engaging government offices and producing documents;
• To Enhance Organizational Capacity of OSD in the area of project implementation.
• To address the issues related with intersectional gender gap
• To create awareness on the impacts of climate change on the rights of children 

 

To achieve the above objective OSD is forming partnerships with different technical partners.

• We have been doing intersectional gender analysis in collaboration with YWCA (Young Women Christian Association) and Save the Children Ethiopia and we developed an action plan that will be put to work throughout the five year time.
• We formed a consortium with CEHRO to do many collaborative works concerning children rights and to engage on policy dialogue level. 
• We are working with GPSDO to create awareness about the impacts of climate change on the rights of children and waste management to the textile and garment industries and we have an upcoming training for these textile and garment industries.  GPSDO is our technical partner and will be one of the trainers concerning the issue.

In August 2022 at OSD’s Office in Addis Ababa, organization for social development (OSD) conducted a project launch program under the title of “Enhancing the Engagement of Garment and textile Industries to Promote Child Wellbeing in Ethiopia”.  Two representatives from each stakeholder and save the children participated.

Representative from Ethiopian Textile and Garment Industries Research and Development Institute suggested that we can promote CRBP on the monthly publishing magazine and make it a criterion for the textile and garment industries for export industries.  The other participant from the Ethiopian chamber of commerce and sectorial association promised to provide us the space on the monthly publishing magazine to promote CRBP.

1. Perspectives of the most marginalized and deprived children

 

With regard to engaging children with disability in child-led groups, four (9, 2, 13 and 14) woredas have been able to recruit members with disabilities from their schools. The remaining wordas have been made aware of the need for and importance of engaging children with disabilities and are making efforts to do so. In addition, child led groups that have been able to engage children with disabilities are working on bringing the children with disabilities to leadership positions. 

Furthermore we have conducted an assessment taking a sample survey at different schools in the sub city to understand the condition of children with disability and their access to education. Duty bearers pledged to work for modification of existing schools infrastructure and closely monitor the construction of new schools to ensure inclusivity. Following members of the child parliament raising a case about Children with Disability being denied to get registered in some schools,  Organization for Social development conducted an assessment on accessibility of schools for Children with different forms of disability in selected schools in Nifas Silk Lafto sub city.

Schools administration, children with disability and children with no disability in the selected schools were interviewed. According to the children with disabilities, inaccessible ramp-rails, playing fields and inaccessible class rooms, lack of disability friendly toilets were among the challenges they are facing.

School administration interviewees stated that, the fact that schools were not designed considering people with disabilities and due to the large number of students compared to the schools size made it difficult for children with disability to attend their education.

Apart from the interviews OSD was able to observe inaccessibility of the whole school infrastructure for children and students with different forms of disability. However they use mitigating mechanisms such as assigning classrooms in the ground for Children with Physical Disability. 

Some children students with disability in the school were denied to get registered in schools near their residence areas which created a burden for parents to bring their children far from their places and this in turn resulted in children with disability dropping out of school.

From the interviews, OSD was able to understand that children with disabilities have no awareness and capacity to demand their rights. 

To validate the assessment result OSD organized a workshop at Nifas Silk Lafto Sub city where government Officials from each woreda’s education bureau were invited.

In addition to validating the results, a brief presentation about disability, persons with disability, legal frameworks and conventions on the rights of children with disability was made by Organization for Social Development to enhance participants’ awareness on disability.As a result of the assessment, OSD recommended that the sub city and woredas’ education bureaus

• to monitor schools accessibility
• to have updated information about the number of children with disability in the sub city
• Ensure children with disability to have access to a meaningful participation on issues of their concern like children with no disability
• And the sub city's Women, Children and Social Affairs Bureau to raise awareness about Disability in schools and the community as a whole.

The Government stakeholders then promised to monitor schools accessibility and influence to make existing inaccessible schools modify their infrastructure to meet the minimum standard requirement and new schools to be designed considering people with different forms of disabilities.

In relation to our work with the two industrial parks, the Organization for Social Development delivers training to acknowledge the employees Ethiopian labor laws hold the employer liable for an employment related accident and occupational diseases sustained by a worker during or in connection with the performance of his/her work. Employers often purchase insurance to shift the financial burden of paying for employment injuries.

If an employee is injured at work, they can expect the following: 

• Medical access: Employers are required to provide effective medical access. 
• Compensation: Employees are entitled to compensation for injuries or occupational diseases. The amount of compensation is based on the effect the injury has on the employee's ability to return to work. 
• Reporting: Employers must report accidents to the Commission on the "Employer's First Report of Injury" form. 

Here are some other things to know about injuries at work: 

• Treatment
• The employee can choose their doctor and decide who accompanies them to the doctor.
• Returning to work
• The doctor will work with the employee to decide when they can return to work.
• Second medical opinion
• The employee may get a second medical opinion if their claim manager approves it.
• Discrimination
• It's illegal for an employer to punish an employee for having a job injury or requesting workers' compensation benefits. 

2. Child rights programming

OSD’s engagement is primarily in relation to promoting Child Rights and Business Principles(CRBP) to the private sector employing mechanisms of strengthening the capacity of the private sector in adopting the concept and strengthening the capacity of child led groups in monitoring the operations of businesses in their locality vis-à-vis CRBP. In order to achieve these objectives, OSD conducted the following activities:

 

• Training workshops and discussion forums/seminars were conducted on CRBP both for private sector representatives and child led groups
• Preparation of plan of action to effect the drafting of a  comprehensive guide which manages business interaction towards children,
• Consultation workshop with CSOs to confirm the finalization of the child wellbeing promotion guideline;
• To strengthen Child Parliaments/ child led groups and community based structures to monitor the operation of business firms to respect, protect and support children's rights.
• Civil Society actors including children influenced the private sector to respect, protect and support the fulfillment of children’s rights through monitoring.
• Selected private companies are strengthened by OSD and Chamber of Commerce to mainstream child rights and business principles in their policies and practices.
• Introduce the concept of corporate social responsibility to the private sector and advocate for its implementation collaboration with the chamber of commerce.
• linking National Plan of Action sectorial indicators with annual plans of sector ministries and follow up its implementation in collaboration with MoWCYA
• Establishment and strengthening of  national child parliament network composed of child parliament representatives drawn from all regions was conducted in  collaboration with MoWCYA

 

One of the focus areas of the project is strengthening child parliaments so that they become voices for children. Due to the material and capacity building support provided to them, child parliaments are becoming actively engaged in their respective woredas.12 child led parliaments in Nifas Silk Lafeto sub-city were strengthened and due to the support provided to the child parliaments and the link created with sub-city speaker’s office, they have been able to better demand children’s rights and trained on  child rights, UNCRC articles, General comment No 26 children’s rights and the environment with a specific focus on climate change.

OSD provided technical support in strengthening child led structures and child parliaments through a discussion forum. These have made the child-led structures to be better able to demand their rights.In collaboration with SCI advocacy department; the children are capacitated in advocacy and on how to conduct campaigns. As a result, they celebrated Africa’s children day with the Child Parliament; representatives from the sub city’s culture and tourism bureau were presented at the tournament. As a result, they are participating in 3million+ back to school campaign and Organization for Social Development in collaboration with Save the Children capacitated members of the child parliament with basic skills to conduct child led research and prepare reports then submitted to the UNCRC in March 2024. 

• The children were made to identify areas of their interest to conduct research. Of the areas of interest are:
• The challenges that internally displaced children in their areas of residence are experiencing are related to their education.
• Challenges experienced by children with disability in the sub city and
• How the rights of children in rehabilitation are being respected  

They also practiced how to make research questions and interview people to prepare quality reports.

OSD has provided CRBP documents, and conducted supportive supervision to selected private businesses firms to facilitate the implementation of CRBP and CSR. Moreover, OSD has provided material support to 12 woreda child parliaments of Nifas Silk Lafto sub-city based on the needs assessment conducted. The material support provided includes:  computers, printers, table, chair and stationeries so that the child-led groups can undertake their activities with ease.

In relation to our work with the two industrial parks, we were capaciting the management team and employees with basic concepts of women rights, climate change and child rights. OSD andother stakeholders help the employees to form their own workers association. These help them to bargain with their employers towards raising their salary level and form the day care in the industrial park. The establishment of the day care will allow the mothers to put their kids near to them and they will be fully focused on their job. The kids get protection from their nannies and breast feed by their mothers to grow health and safety. As a result, establishing day care will make employees keep working in the park and at the same time it is one way of making the environment suitable for children.

3. Environment and climate

In order to enhance the awareness and knowledge of the members of the child parliament, OSD has been giving training on the interrelated environmental issues; climate change and child rights crisis, global warming and environmental pollution.

Different efforts and trials have been done to engage the child parliament in different environmental activities so that they are aware that their future is on their hands and take a role to advocate for making the environment to be protected and child rights protection. For example the child parliament members participated in Conference of the Parties of the UNFCCC, more commonly referred to as COP27, 28 & 29 by sending their message representing Ethiopian children’s.As part of environmental initiatives, child parliaments have been involved in “Green Legacy” initiatives during summers. They become environmentally conscious and responsible in their daily life. In addition they serve as environmental advocates in their school and their community.

Both industrial parks have access to our environmental policy so that they are able to stream in their respective manuals and guidelines. By the platform created by OSD, both parks got a chance to share their own experience in relation to environmental protection and west management practices. Further, kombolcha industrial park and kombolcha textile and garment industry agreed to conduct an assessment on how kombolcha textile and garment industry can use the waste from the industrial park as input to produce breaks for construction. In addition, the Organization for social development facilitates a meeting between Komblocha industrial park and WelloUniversity on "IoT-Based Automated Integrated Solid Waste Management System for KombolchaReginopolitan City and they agreed to work together. 

To positively contribute to environmental protection, the management team in Debreberhan industrial park took initiative, facilitated and engaged the park’s community in green legacy(they planted trees within the park).

• In addition both parks practice these activities: 
• Hazardous wastes are collected together
• Chemical plastics are washed and sold
• Liquid or water wastes are mixed with the river water and
• Non-recyclable wastes are burned together with the wastes from the clinic in their industry

4. Gender equality

12 child lead structures and child parliaments in Nifas Silk Lafto sub city were strengthened. Nearly 1,500 children have been participating in the child led structures of which 750 are girls.  40 of the girls are now in the leading position of the child parliament and the number and the interest of the girls is increasing from time to time.

Memorandum of understanding was signed between OSD and Nifas Silk Lafto sub city’s finance and economic development office and the sub city women and children and social affairs office to work with the 12 child lead structures and child parliaments thus they become voices for children. 

In 2023, we boost the relationship with the child parliament to the level of partnership by signing a tripartite agreement between the child lead structure, our organization and the sub city’s women, children and social affairs bureau since these child lead structures can’t be an independent entity on their own.

 

Change in roles and responsibilities

• Children and Community Members are Engaged in Monitoring Children’s Rights and Delivery of Social Services for Children
• Children in the Child-Led Structures are Engaged in Monitoring and Reporting Child Rights Issues, and Advocating for Fulfilment of their Entitlements
• The children participate in decision making increased
• Children are also started to influence the budgeting process
• On any discussion involving children issues, children not only participate but also stared to ask question on issues that they want to address.  they also give comment on issues raised by other people
• Children involved in child lead structure are now the voice of other children
• Change in social norms, traditions & beliefs, customs
• Children are now aware of local and international child rights and participate to exercise their rights and be the voice for other children.  Girl’s participation is becoming better now.  Parents were not sure to let their female children on this kind of issue but with patience and constant education and awareness
• Creation programs most of them are now willing to let them participate and the number of girl’s participation in child led groups and children parliament is increasing.  

Change in power & Decision-making

As mentioned above children are participating on meeting of children issue and comment and suggest on the decision making process.

The most effective method was to vigorously challenge gender stereotyping.  We were working so hard to create awareness that girls can do whatever their boy companions can do as well as educate parents and the society.  We also done a very good job on teaching the girlsthemselves to be assertive and fight for their rights. We dare to say that we were effective because we started seeing changes in the participation of girls. 

Organization for Social Development (OSD) together with SCI is promoting the rights of children at Kombolcha and Debrebrihan industrial parks. In each park there are about 2300 young workers. The main objective of this project is promoting the concept of CRBP in these industrial parks and raise awareness to avoid child labour in the supply chain.  

On gender issuesOrganization for Social Development experiences atKombolcha and Debrebrihan industrial parksafter introducing this project, theyachieve to implement these activities: 

        - Gender annual work plan is prepared and implemented every year.

        - Gender related trainings are given

        - Gender focal persons meet regularly and discus about issues regarding gender

        - Female employees conduct peer to peer discussions on gender based violence

        - Before recruitment, all female employees are provided with soft skill trainings

5. Conflict sensitivity

Organization for Social Development has identified potential sources of conflict and power dynamics in the private sectors which it operates in to ensure that the programme activities do not exacerbate existing issues (including the gender related ones) or create new sources of conflict considering the potential impact of interventions on different groups within the different groups of the parks.

Moreover, As a child rights actor, Organization for Social Development has conflict sensitive programming in that it has built strong relationships, Actively listens to concerns and adapt its program based on feed backs, maintained open lines of communication with all stakeholders including children, duty bearers, and industry representatives to address conflicts that might arise following our engagement with the child parliament and the garment and textile industries.

 

Organization for Social Development

GENERAL ENVIRONMENT RESPONSIBILITY CODE OF CONDUCT FOR MANUFACTURING INDUSTRY

Addis Ababa, Ethiopia 2024

Template: CODE OF CONDUCT

This code of conduct template can be used as a basis for developing a code of conduct under the Environmental Pollution Control Proclamation No.300/2002.

Introduction

Codes of conduct provide guidance to operators to help them comply with the Environmental Pollution Control Proclamation No.300/2002 and meet their general environmental responsibility. The codes also outline the environmental best management conducts of leaders in the industry.

Refer to the information sheet "Developing codes of conduct" for more information on codes of conduct and how they can be developed.

The Textile and Apparel Industry code of conduct is also available as an example for guidance in developing a code of conduct.

This code of conduct template can be used as a basis for developing a code of conduct under Environmental Pollution Control Proclamation No.300/2002. The following pages can be copied and pasted into a new document and an appropriate footer and branding added.

General environmental responsibility Code of conduct for <<INSERT activity details>> operations

1. Introduction

This environmental code of conduct has been prepared to provide guidance to manufacturing industries management to help them comply with the Environmental Pollution Control Proclamation No.300/2002 by meeting their general environmental responsibility. The code also outlines the environmental best management conducts of leaders in the industry.

Under this legal act, Environmental Pollution Control Proclamation No.300/2002, any person in Ethiopia must fulfil their general environmental responsibility. This is defined as follows: 'Any person engaged in any field of activity which is likely which is to cause pollution or any other environmental hazard shall when the Authority or the relevant regional environmental agency so decides, install a sound technology that avoids or reduces, to the required minimum, the generation of waste and, when feasible, apply methods for the recycling of waste.' See Appendix 1.

This document describes <<INSERT activity details>> operations, the impacts on the environment, and how those impacts can be mitigated against in the interests of achieving environmental compatibility and complying with the Environmental Pollution Control Proclamation No.300/2002.

Although this environmental code of conduct is a voluntarily adopted standard for the <<INSERT activity details>> industry in Ethiopia, complying with this code provides the operator with a defence against a charge of unlawfully causing environmental harm and several other charges to the extent the code is relevant. If you do not comply with this code you may still rely upon the defence of complying with your general environmental responsibility, but will have to show how you met your general environmental responsibility another way.

2. Objective of the code

The environmental code of conduct aims to:

Describe environmental issues and challenges confronting <<INSERT activity details>> operations in Ethiopia

Assist operators to better consider the environment with which they interact

Guide <<INSERT activity details>> planning to ensure site, design and operations meet requirements of decision-making authorities

Provide advice to decision-making authorities to enable them to make consistent decisions in respect to <<INSERT activity details>> operations

Suggest practical measures to minimize environmental and social impacts

Allow industry to establish a benchmark environmental performance

Demonstrate to the community the environmental compatibility of the <<INSERT activity details>> industry.

3. Scope of the code

This environmental code of conduct addresses environmental aspects of <<INSERT activity details>> operations. It does not cover environmental issues to do with planning or construction, and does not cover aspects covered by other legislation such as occupational health and safety.

The code does not restate any requirements of the Environmental Pollution Control Proclamation No.300/2002, nor does it override or replace federal, state or local government legislation, regulation, plans or policies.

Under Proclamation No.300/2002; "Person" means any natural or juridical person.

Enhancing the Private Sector's Responsiveness to Environmental Protection 1

4. Commencement date

This environmental code of conduct commenced on (date) and has effect for seven years. To continue to have effect the code of conduct must be reviewed and approved by the Minister of Environment, Forest and Climate Change by (date). Industry members are encouraged to provide feedback and to report new initiatives to their associations, so the codes can evolve through each review.

7. Using the code of conduct

There are a number of environmental risks associated with <<INSERT activity details>>. These include, but are not limited to:

INSERT details

e.g. the release of harmful gases from fuel and chemicals

e.g. contaminated stormwater runoff

e.g. noise

e.g. waste management.

The codes of conduct:

Gives practical guidance on how environmental best management conducts can be achieved in the <<INSERT activity details>> sector

Should be followed unless there is an alternative course of action that achieves the same or a better environmental objective.

7.1. Performance outcomes

Performance outcomes are the end result that the operator needs to achieve to meet the 'general environmental responsibility' described under the Environmental Pollution Control Proclamation No.300/2002. There are <<INSERT number of outcomes\ performance>> performance outcomes in this code of conduct:

There is no discharge to land or water of contaminants that may harm the environment or create a nuisance from the operation of the activity

There is no discharge to air of contaminants that may harm the environment or create a nuisance from the operation of the activity

Noise nuisance is prevented or minimized at noise sensitive places

Waste production and disposal must be minimized and waste must be managed so it does not harm the environment or create a nuisance from the operation of the activity.

There are a number of suggested control measures to achieve the performance outcome. You may choose to use your own control measure. However, if you do not use the suggested control measures, you will not be able to rely on complying with the code as a defense if you cause unlawful environmental harm. You may still rely upon the defense of complying with your general environmental responsibility, but will have to show how you met your general environmental responsibility another way.

Enhancing the Private Sector's Responsiveness to Environmental Protection — Page 12

Note: Some performance outcomes provide the option for an environmentally harmful activity to be prevented or minimized. Prevention is the more desirable outcome. If the operator selects to minimize the harmful activity it must be demonstrated that consideration has been made to the following:

Sensitivity of the receiving environment

Nature of the harm

Existing technical knowledge for the activity

Feasibility to relocate activity

Financial implications of using different control measures.

7.2. Control measures

Control measures are suggested examples which have been provided to help you to achieve the performance outcome. In some cases, a number of compliance control measures may be listed for one process. In these cases, you are advised to aim for the control measure or combination of control measures that is most likely to achieve the performance outcome for that process. Alternatively, you may be able to meet a performance outcome in a manner that is not listed in this code of conduct. However, if you use alternative control measures, you will not be able to rely on complying with the code as a defense if you cause unlawful environmental harm. You may still rely upon the defense of complying with your general environmental responsibility, but will have to show how you met your general environmental responsibility another way.

7.3. Best conduct

Best conduct means the control measures are considered to be above the minimum requirements and are what industry leaders are achieving. Best conduct incorporates concepts such as cleaner production, waste minimization, recycling and reuse. Use of best conduct control measures may help to improve industry standards and progress towards best conduct in the industry. You do not have to meet the best conduct measures to comply with the general environmental responsibility.

Best conduct measures are marked with a [★] in the text as shown below.

[★] Develop an environmental management plan to protect your environment, reduce your business risks and gain a competitive advantage.

Leading businesses are recognizing that to be competitive in the future market, they need to take responsibility for their environmental and social performances as well as their economic performance. Not only will an environmental management plan improve your environmental performance but these improvements may also benefit your staff, especially as many environmental hazards pose a health and safety risk.

8. Environmental management plan

An environmental management plan identifies environmental risks caused by the operation and puts activities in place to manage these risks before they result in environmental harm. The performance outcomes and examples for meeting the environmental objectives listed in this document will form a solid basis for creating your management plan.

By reducing your environmental impact and adopting eco-efficient conducts, you will be able to do more with less, including:

Minimising your environmental risk

Measuring, planning and implementing measures to reduce energy, water, waste and materials

Enhancing product quality and productivity

Improving financial performance

Reducing your business' carbon footprint

Improving staff morale.

Developing and following an environmental management plan should ensure:

All potential environmental risks from the activity are identified and control measures are in place to prevent or minimize the potential for environmental harm

Contingency measures are in place to avoid environmental harm in the event of unforeseen circumstances or natural disasters (e.g. flood)

Staff are trained and aware of their requirements of the Environmental Pollution Control Proclamation No.300/2002 and others

Reviews of environmental performance is undertaken periodically

Records monitoring, incidents and complaints are kept.

By developing and following an environmental management plan your business can demonstrate that all reasonable care is being taken to avoid causing environmental harm. Your business will be able to use this reasonable care, or due diligence, as a defence for compliance purposes.

Performance outcome 1:

There is no discharge to land or water of contaminants that may harm the environment or create a nuisance from the operation of the activity.

 

Appendix 1: General obligations under the Environmental Pollution Control Proclamation No.300/2002

General environmental responsibility

The Environmental Pollution Control Proclamation No.300/2002 states that any person have a general environmental responsibility. This means that we are all responsible for the actions we take that affect the environment. We must not carry out any activity that causes or is likely to cause environmental harm unless we take all reasonable and practicable measures to prevent or minimize the harm. To decide what meets your general environmental responsibility, you need to think about these issues:

The nature of the harm or potential harm

The sensitivity of the receiving environment

The current state of technical knowledge for the activity

The likelihood of successful application of the different measures to prevent or minimize environmental harm that might be taken

The financial implications of the different measures as they would relate to the type of activity.

It is not an offence not to comply with the general environmental responsibility however maintaining your general environmental responsibility is a defense against the following relevant Environmental Regulation, Proclamation and Standards:

(a) Prevention of Industrial Pollution Council of Ministers Regulation No. 199/2008

(b) Proclamation on Solid Waste Management Proc. No 513/2007

(c) Environmental Standards for Industrial Pollution Control in Ethiopia

(d) Proclamation Environmental Impact Assessment Proc. No. 299/2002.

Responsibility to notify

The responsibility to notify (Article 4:3 of the Prevention of Industrial Pollution Council of Ministers Regulation No. 199/2008) states that "Every factory shall notify the competent environmental organ any potentially pollutant, input or product under its possession".

Article 4:4 of the Prevention of Industrial Pollution Council of Ministers Regulation No. 199/2008, provide provision "If any factory loses a potentially pollutant, input or product it shall immediately notify the competent environmental organ".

Article 4:6 of this regulation more specifically states that "The competent environmental organ shall issue a written order to a factory that it believes will entail substantial damage by transgressing the limit set by the environmental standard to take measures to remove the risk".

 

Relevant offences under the Environmental Pollution Control Proclamation No.300/2002

1. General (Article 12)

A person who, under this Proclamation or under any other relevant law, commits an offence for which no penalty is provided for either in the Penal Code or under this Proclamation, is liable on conviction:

(a) in the case of a natural person, to a fine of not less than five thousand Birr and not more than ten thousand Birr or an imprisonment of not more than one year or both;

(b) in the case of a juridical person, to a fine of not less than ten thousand Birr and not more than twenty thousand Birr.

Where a juridical person is convicted pursuant to Sub-Article (1) of this Article, the officer in charge who should have known the commission of the offence, and who failed to fulfill his duty appropriately shall be liable to a fine of not less than five thousand Birr and not more than ten thousand Birr or an imprisonment of not more than two years or both.

Unless the provisions of the Penal Code provide more severe penalties, the penalties laid down under this Proclamation shall be applicable.

2. Offences Relating to Wastes and Other Materials that are Hazardous (Article 15)

A person commits an offence if he fails to manage a hazardous waste or another substance according to the relevant laws, mislabels or fails to label or in any way withholds information about any hazardous waste or other material or attempts to take part or takes part or attempts to aid or aids in the illegal traffic of any hazardous waste or other material.

A natural person who commits an offence under Sub Article (1) of this Article is liable, on conviction, to a fine of not less than twenty thousand Birr and not more than fifty thousand Birr and in the case of a juridical person to a fine of not less than fifty thousand Birr and not more than one hundred thousand Birr, and to a term of imprisonment of the officer in charge of not less than five years and not more than ten years, or a fine of not less than five thousand Birr and not more than ten thousand Birr of both.

3. Offences Relating to Pollution (Article 16)

A natural person commits an offence if he discharges any pollutant contrary to the provisions of this Proclamation or regulations issued hereunder and is liable, on conviction, to a fine of not less than one thousand Birr and not more than five thousand Birr or to an imprisonment of not less than one year and not more than ten years or both and, in the case of a juridical person, to a fine of not less than five thousand Birr and not more than twenty five thousand Birr and an imprisonment of the officer in charge for a term of not less than five years and not more than ten years, or a fine of not less than five thousand Birr and not more than ten thousand Birr or both.

4. Placing a contaminant where environmental harm or nuisance may be caused (section 443).

Relevant offences under Proclamation on Solid Waste Management Proc. No 513/2007

1. Littering (Article 2:3)

"Litter" means anything that may or may not have any value, including glass, metal, cigarette butts, paper fabric, food, garden remnants or other materials that in any way spoil the aesthetics of the place or make it unhygienic.

 

 

 Organization for Social Development

Procurement Manual for Goods and Services

 

 

 

 

 

Addis Ababa, Ethiopia

2024

 

 

 

Organization for Social Development

PROCUREMENT MANUAL FOR GOODS AND SERVICES

 

All procurements made by Organization for Social Development (OSD) involving the expenditure of Funds shall be made according to the following procurement standards.

I. PROCUREMENT COMMITTEE

A procurement committee for the procurement of goods and services will be established by the Executive Director, consisting of:

a) Finance and Administration officer — Chairperson

b) Program coordinator — Member

c) Staff member for which the Goods or services will be procured — Member

d) Secretary Cashier — Secretary

II. METHODS FOR PROCUREMENT

Procurements shall be made according to one of the following procurement procedure methods: (a) small (<birr 20,000) purchases, (b) competitive sealed bids, (c) competitive negotiations, (d) non-competitive negotiation.

A. Small Purchases

For purchases with less than Birr 20,000 cost, procurement shall be made by direct shopping upon the verification of the Cahier and the approval of the Executive Director. Even though written records of such efforts are not necessary, efforts shall be made to get the best price.

Purchases of services, equipment and supplies which cost between Birr 20,000 and Birr 30,000 requires written estimates without legal advertisement. OSD will ask written estimates from at least three vendors, if that's not available, records of the procurement procedure shall be prepared.

B. Competitive Sealed Bids

Where a detailed specification for the services or goods to be procured exists and where the primary ground for award is cost, bidding shall be undertaken.

Where the cost of a lease, contract or other agreement for services, materials, equipment, supplies is above Birr 30,000, a bid invitation shall be prepared.

Scanned with CS CamScanner

This notice will be published at least once in a local newspaper which is of general circulation in Ethiopia. The newspaper advertisement shall appear for at least one (1) week and not more than three (3) weeks before the due date. OSD can also send out sealed bids for potential suppliers.

The advertisement shall include location of bid forms, place and time for opening of bids and a realistic, accurate and complete description of the goods or services to be procured.

The bids shall be opened in public at the place and time stated in the advertisement and it shall be tabulated. The procurement committee shall make recommendation to OSD after examining the completeness and accuracy of the bid procurements and the tabulation.

The procurement committee shall also determine that all participating bidders are responsible and responsive. Based on the committee recommendations, OSD will decide to which bidder to award the contract to.

C. Competitive Negotiations

OSD can also choose to practice competitive negotiations when the following is decided:

When the bid can't be specific enough to permit the award on the basis of the lowest evaluated bid price.

When the services to be procured are professional in nature.

a. Proposals shall be advertised through newspaper advertisement; a Request for Proposal (RFP) could also be send to qualified vendors. The newspaper advertisement shall appear for at least one (1) week and not more than three (3) weeks before the due date.

The RFP will include where the details of the request could be obtained, place and time for opening of bids and are a realistic, accurate and complete description of the goods or services to be procured.

b. Evaluations of the proposals must be based on the requirements stated in the RFP. All proposals could be rejected, if no acceptable proposal has been submitted.

D. Noncompetitive Negotiations

When bidding or competitive negotiations are not feasible, noncompetitive negotiations may be used for procurements. This type of procurement needs the strictest attention to fairness and impartiality.

OSD shall use non-competitive negotiations when it is determined by the procurement committee that bidding or competitive negotiation is not possible and that:

The service or product can only be obtained only from one supplier; or

An emergency exists which doesn't allow for following competitive purchasing procedures, or

Only one satisfactory proposal is submitted through, or

III. CONTRACTS

Generally, all procurement in excess of birr 30,000 shall be recorded and reinforced by a written contract. When it is not impractical to have a contract, a documentation of some sort relating to the transaction must be recorded. The contractual provisions required by the civil code and commercial code of Federal Democratic Republic of Ethiopia and all other laws as applicable shall be included in all contracts.

All contracts will contain clauses which allow OSD the opportunity to cancel any contract for cause. Said cause shall include failure to pay workers or suppliers or demonstrated unwillingness to complete the work in a timely manner or lack of ability to perform, failure to comply with applicable laws or unsafe working conditions set by the contractor or any other documented issue which could cause a hardship for OSD.

IV. DOCUMENTATION

All documents in support of a transaction such as purchase orders, receipts, invoices, bid materials and RFP documents shall be retained and appropriately filed. Where possible all documents related to each individual procurement shall be separately documented.

All sorts of documentation and filing are employed for the purpose of ensuring a consistent and clear audit track is maintained. The source document data must be adequate to justify the basis for a reasonable cost and selection of a supplier or contractor.

V. LOCALLY OWNED, MINORITY-OWNED, SMALL-BUSINESSES AND FEMALE-OWNED BUSINESSES

Affirmative actions shall be taken to give opportunity to locally owned, minority-owned, female-owned and small businesses. OSD shall request proposals from these businesses providing the goods or services that are procured.

Where applicable work shall be divided to maximize participation by these businesses, Evaluation criteria must include a factor with an appropriate weight for these businesses. A list of minority-owned, locally owned, female-owned and also small businesses shall be maintained and utilized when issuing bids and RFPs.

VI. CODE OF CONDUCT

A. Conflict Of Interest

No OSD employee, elected/appointed official, member, or designated agent of OSD shall take part in the award of any procurement. A conflict of interest exists when the employee, designated agent of OSD, an official's immediate family members as a financial or any other interest in any of the competing companies.

No OSD employee, elected/appointed official, member, or designated agent of OSD may obtain a financial interest in or benefit in any manner from an activity which involves OSD's funding.

NOTE: These rules shall also apply to the above named for the period of one year after leaving position in OSD.

B. Acceptance of Gratuities

No OSD employee, elected/appointed official, member, consultant, or designated agent of OSD shall receive favors, gratuities or anything of monetary value from potential contractors, contractors or subcontractors.

C. Penalties

Any OSD employee, elected/appointed official, member, consultant, or designated agent of OSD who deliberately and knowingly violates the provisions of this manual will be subject to dismissal from any positions in OSD and will also be open to civil suit by OSD without the legal protection of OSD.

Any potential contractor or contractor who deliberately and knowingly violates the provisions of the procurement standards stated in this manual shall be barred from future transactions with OSD.

Adopted by the OSD this day of, Jan 2020.

 

 

 

 

Organization for Social Development

 

 

 

 

 

 

 

 

 

ADMINISTRATION MANUAL

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Addis Ababa, Ethiopia

2024

 

Table of Contents

INTRODUCTION

 

CHAPTER I - GENERAL

Objective of the Manual

Scope of Application

Revision, Amendment and Changes to the Manual

Clause of Non-Disclosure of Information

 

CHAPTER II - ORGANIZATIONAL BACKGROUND

 Establishment

 Vision

 Mission Statement

 Values

 Objectives

 Strategies

 

CHAPTER III - ORGANIZATIONAL STRUCTURE AND JOB RESPONSIBILITIES

 Organizational Structure

 Powers and Duties of the Organs

 General Assembly of Members

 The Board

 The Office and the Executive Director

 Selection of External Auditors

 Number of staff required

 

CHAPTER IV - JOB DESCRIPTIONS FOR STAFF MEMBERS

Job Descriptions Applicable to All Staff Members

Job Descriptions Applicable to all Program Staff members

Job Descriptions for Program Staff members

 Program Coordinator

 Program Officer

 Project Officer

 Trainer

Job Descriptions for Administrative Staff Positions

 Secretary Cashier

 Finance & Administration Officer

 Driver

 Guard

 Messenger/cleaner

 

 

CHAPTER V - MINIMUM REQUIREMENTS AND SALARY SCALE FOR STAFF POSITIONS

Minimum Requirements for staff positions

Salary Scale and Rank for Administrative Staff Positions

Salary Scale and Rank for Program Staff Positions

Salary Scale and Rank Application

 

CHAPTER VI - HUMAN RESOURCE POLICIES AND REGULATIONS

SECTION I - GENERAL

Article 1 - Short Title

Article 2 - Definitions

Article 3 - Scope of Application

SECTION II - EMPLOYMENT REQUIREMENTS

Article 4 - Principle

Article 5 - Vacancy Announcement and Recruitment

Article 6 - Notice of Vacancy

Article 7 - Selection

Article 8 - Formalities before Employment

SECTION III - TERMS OF EMPLOYMENT

Article 9 - Contract of Employment

Article 10 - Obligation of the Employer

Article 11 - Obligation of the Employee

Article 12 - Job Description/Term of Reference

SECTION IV - WORKING HOURS AND PLACE OF WORK

Article 13 - Time and Days of Work

Article 14 - Normal Place of Work

Article 15 - Official Travel

SECTION V - LEAVES

Article 16 - Public Holidays

Article 17 - Annual Leave

Article 18 - Sick Leave

Article 19 - Marriage Leave

Article 20 - Mourning Leave

Article 21 - Maternity Leave

Article 22 - Study/Examination Leave

Article 23 - Court Attendance and Police Summon

SECTION VI - STAFF DEVELOPMENT/TRAINING

SECTION VII - POSITION, RANK, REQUIREMENTS AND SALARY SCALE

Article 24 - Position and Rank of Employees

Article 25 - Acting and Additional Positions

Article 26 - Salary

SECTION VIII - PROMOTION AND DEMOTION

Article 27 - Promotion

Article 28 - Minimum Requirements for promotion

Article 29 - Demotion

SECTION IX - BENEFIT PACKAGES

Article 30 - Loan

Article 31 - Insurance

Article 32 - Transportation Allowance

Article 33 - Per diem

Article 34 - Supply of Uniform for Administrative Staff

SECTION X - EVALUATION AND DISCIPLINE

Article 34 - Evaluation/Efficiency Report

Article 35 - Disciplinary Faults and Measures

SECTION XI - TERMINATION OF CONTRACT OF EMPLOYMENT

Article 36 - Termination by the Employee

Article 37 - Termination by the Employer

Article 38 - Notice of Termination

Article 39 - Severance Pay and Compensation

Article 40 - Termination of Contract by Operation of the Law

SECTION XII - FUEL CONSUMPTION, CAR WASH AND MAINTENANCE

SECTION XIII - FINAL PROVISIONS

Article 41 - Delegation

Article 42 - Transitory Provision

Article 43 - Entry into Force

CHAPTER VII - CODE OF CONDUCT FOR STAFF MEMBERS OF OSD

CHAPTER VIII - GUIDELINES FOR SELECTION OF EMPLOYEES TO TRAINING PROGRAMS

CHAPTER IX - PROCUREMENT PROCEDURES FOR GOODS AND SERVICES

ANNEX I - EMPLOYEE PERFORMANCE EVALUATION FORM

 

 

 

 

 

 

 

 

 

 

 

 

Introduction

ORGANIZATION FOR SOCIAL DEVELOPMENT (OSD)

Organization for Social Development (OSD) is an indigenous, non-profit, non-governmental organization established in 2003. The origin of OSD is engraved in pursuit of public interest and promotion of social justice. Understanding the potential of the private sector to ensure social justice and promote the public interest, OSD has been engaged in promoting the concept of corporate social responsibility (CSR) among businesses, citizens and the government since 2010. Accordingly, OSD's last strategic plan was designed in the year 2010 to serve as the organization's comprehensive intervention framework that was implemented for the past four years.

To properly and effectively conduct its operations and ensure its timeliness, OSD has revised its Administration Manual that set out clear and transparent policies and procedures in relation to the activities of human resources management, procurement management and other general administrative engagements. The importance of this Administration Manual is particularly linked to the timely decision making process, which would ensure adequate control over resources and to monitor the effective implementation of plans and programs.

The Administration Manual has nine chapters. While the first chapter deals with some general issues, the second chapter presents OSD's organizational background, its vision, mission, values, objectives and strategies. Chapter three describes OSD's organizational structure, powers and duties of core organs. Job descriptions for staff members and salary scale for staff positions have been discussed in chapter four and five respectively.

Chapter six presents human resource policies and regulations, which contains 45 articles. It reflects the current employment laws of the country. Chapter seven, eight and nine elaborates code of conduct for staff members, selection of staff for training programs and procurement policies and procedures for goods and services respectively.

The Administration Manual is believed to be fully applied and bring about more clarity in discharging responsibilities, accountability and transparency in the implementation and administration of OSD's activities. It also intends to enhance ethical, efficient and effective implementation of planned programs and administrative activities. As the Administration Manual presents only the minimum requirements for OSD, it will be revised regularly in order to make necessary changes and amendments to fulfill the upcoming needs of the organization.

The Administration Manual and its all chapters shall form an integral part of contract of employment and shall enter into force starting from the date of the approval by the Board. The Board may, from time to time and as deemed appropriate, review, revise and amend the implementation of the manual as required.

The Executive Director has the overall responsibility to ensure proper implementation of this manual and to report to the Board on the changes and amendments necessary to be introduced. The Executive Director may also elaborate and issue detailed directives and guidelines for the smooth and efficient implementation of the manual.

 

 

 

Chapter I: General

1. Objective of the Manual

This Administration Manual offers the Organization for Social Development management and employees a framework on decisions of human resources and procurement issues be made in consistent and fair manner. It also provides a direction regarding compliance with relevant laws and regulations. The objectives of this Administration Manual are to:

i. Contribute to the achievement of the objectives of the OSD

ii. Establish uniform policies and procedures so as to avoid misunderstandings

iii. Treat employees equally and hence to avoid arbitrary personnel decision.

iv. Provide a written reference to all policies, procedures and guidelines for staff and management in their day to day activities.

2. Scope of Application

The Administration Manual shall be applicable to all employees of OSD. Unless expressly stated to the contrary, this Administration Manual shall be applied to the Executive Director of OSD.

3. Revision, Amendment and Changes to the Manual

This Administration Manual is not a static document and must be responsive and be sensitive to the needs and aspirations of its employees and reflect the growth of the OSD. Hence, when required, it is subject to an amendment, revision or change. All changes to this manual will be made in writing and the staff will be notified of the revisions, amendments and changes.

4. Clause of Non-Disclosure of Information

The OSD's employees have a duty of loyalty to the organization as their employer. The duty of loyalty affirmed through the oath of the office and secrecy, requires employees to serve the OSD to the best of their ability. The release of confidential information that employees receive through the course of their employment may have a significant impact on the OSD's ability to manage its affairs or to maintain a perception of impartiality and integrity with its clients and the public.

To protect the interests of the OSD and its clients, confidential information that employees receive through their employment must not be divulged to anyone other than persons who are authorized to receive the information both during their employment and after they terminate their employment. As well, employees must not use confidential information for the purpose of furthering any private interest or as a means of making personal gains.

Failure to comply with the oath of the office and secrecy could result in disciplinary action up to and including dismissal and/or any other legal action.

 

 

 

 

 

 

Chapter II: Organizational Background

5. Establishment

Organization for Social Justice in Ethiopia (OSJE), later renamed Organization for Social Development (OSD), was established in September 2003 to pursue social justice through public interest litigation, human rights education, and capacity building. Since its establishment up until February 2009, it was focused on the promotion of human rights, enhancement of the capacity of the justice and legislative bodies and legal empowerment of citizens as a means for promoting social justice in the country. Following its re-registration on February 13, 2009 as per Charities and Societies Proclamation, OSD has shifted its area of operation to the promotion of CSR appreciating the potential of the private sector to ensure social justice and promote the public interest.

OSD firmly believes that social justice ensures equal access to opportunities essential for minimum quality of life (access to basic goods and services). In contexts where there is social justice, everyone is treated with dignity and respect. OSD considers that socially responsible business is a prerequisite for social justice and promotes corporate sensitivity to economic, social and environmental expectations of the society. Corporate Social Responsibility (CSR) encourages businesses to invest portion of their profit and skills for the benefit of the community through environmental protection and preservation, provision of basic goods and services and, creation of opportunities for economic betterment. Moreover, CSR-focused businesses proactively promote the public interest by encouraging community growth and development, and voluntarily eliminating practices that harm the public regardless of legality. Therefore OSD has been engaged in promotion of CSR among businesses to create a society that ensures the dignity of human beings, particularly the disadvantaged and vulnerable groups (DVGs).

 

6. Vision

Fair and equitable access to basic economic and social goods and services for the poor, disadvantaged and vulnerable groups in the society

 

7. Mission Statement

To foster social development that facilitates availability and accessibility of basic social services for the poor, disadvantaged, and vulnerable groups in the society through promotion of corporate social responsibility, social protection, child protection and gender equality.

 

8. Values

The core values that inspired the vision and mission of the Organization for Social Development include:

Lasting Impact

Participation and empowerment

Self-actualization

Equality

Justice

Integrity

Accountability

 

9. Objectives

OSD will pursue the following strategic objectives in the coming five years so as to address the most critical/strategic issues it has identified through the environmental scanning exercise:

To supplement the child protection activities of the government

To ensure gender well-being through economic independence of women

To scale-up and support existing social protection initiatives of the State

To promote the corporate social responsibility of the business community

To enhance the capacity of the organization to meet the expectations of its stakeholders

To enhance the use of organizational lessons of OSD

 

10. Strategies

Overarching implementation strategies:

Build and enhance partnership with government and non-governmental stakeholders

Implement the communication strategies of OSD as part of program implementation

Conduct technical, personnel, and material capacity building activities

Adopt and implement a resource mobilization strategy

Diversify the program activities of OSD with sectoral expertise

 

Chapter III: Organizational Structure and Job Responsibilities

 

11. Organizational Structure

OSD shall have the following organs:

a) The General Assembly of all members

b) The Board

c) The Office, the Executive Director and the necessary staff

Organizational structure of OSD is attached at the end of this chapter.

 

12. Powers and Duties of the Organs

12.1 General Assembly of Members

The General Assembly of all members is the highest organ of OSD. It has the following powers and duties:

a) Appoint and remove members of the Board.

b) Appoint and remove chairperson and secretary of the Board.

c) Decide on the policy direction of OSD.

d) Appoint external auditors.

e) Approve strategic plan, annual work program and budget for OSD.

f) Approve annual performance and external auditor's reports.

g) Set criteria for membership and approve membership requests.

h) Decide on issues related to any change of head office and the openings of branch offices.

i) Decide on the dissolution of OSD and the liquidation of its assets.

j) Decide on amendments to be made on the statute of OSD.

k) Decide on other issues that are not given to the Board and the Executive Director.

The General Assembly shall be held once in a year. The manner in which the General Assembly is composed and discharges its powers and responsibilities are described in the statute of OSD.

 

12.2 The Board

The Board of OSD is the supervising organ, which oversees the overall state and operation of OSD. The Board shall have a minimum of five and maximum of seven members. The Board of OSD is responsible to the General Assembly. The Executive Director shall serve as a non-voting secretary of the Board.

Without limiting the generality of the foregoing, the Board shall have the following powers and responsibilities:

a) Appoint and supervise the performance of and dismiss for good cause the Executive Director.

b) Direct, supervise and oversee the performance of the Executive Director on the implementation of work programs and decisions made by the General Assembly.

c) Present proposals on policy matters to the General Assembly for approval as required.

d) Convoke and present activity and financial reports to the General Assembly.

e) Present proposals on the opening of branch offices to the General Assembly as required.

f) Establish, amend and approve pay scales for staff and other employment regulations including any amendment to the Administration Manual of OSD upon the recommendation of the Executive Director.

g) Review annual plans, work programs and budget of OSD and present with recommendations to the General Assembly for approval.

h) Review long term, medium and short term work plans and budget of OSD and present to the General Assembly for approval.

The establishment, composition, operation and procedures of the Board are provided for in the statute of OSD.

 

12.3 The Office and the Executive Director

12.3.1 The Office of OSD

a) The day to day activities of OSD shall be carried out by an office headed by the Executive Director. The Office shall have the necessary staff as per the requirement of its organizational structure.

b) The Executive Director shall be responsible to direct and supervise the activities of the office and to employ and administer the necessary staff. In discharging these and other responsibilities, the Executive Director will form a Management Committee consisting of a program coordinator, finance and administration officer and other relevant officer as a secretary.

c) The Management Committee shall be chaired by the Executive Director and in his/her absence by a program coordinator, to be delegated by the Executive Director.

d) The Management Committee shall be responsible to assist and make recommendations to the Executive Director in:

i) Providing an operational direction to the programs and development of OSD in line with the plans, programs and budget approved by the Board and the General Assembly.

ii) Monitoring and evaluating programs and designing an appropriate system for such monitoring and evaluation.

iii) Preparing the strategic and annual plan and follow up its implementation when approved.

iv) Employing, evaluating and administering all program and administrative staff positions as per the human resource policies and regulations of OSD.

v) Designing strategies to enhance the institutional capacity of OSD in particular by developing an appropriate human resource development and training plan as well as strategies and proposals to raise funds and other resources to implement the annual plan approved.

vi) Developing appropriate operational plans and allocating resources for the implementation of such plans on the basis of the annual plan and budget approved.

e) In the absence of the Executive Director or an employee delegated by the Executive Director, the Management Committee shall discharge day to day activities of the office until such time as the Executive Director resumes his/her responsibilities. Where the Executive Director is absolutely unable to discharge his/her responsibility, the Management Committee shall in writing notify the Board about the situation. Upon such notification, the Board:

i) shall assume the responsibilities of the Executive Director through its chairperson and arrange for the appointment of an Executive Director within a maximum of three months from the day of notification or

ii) Delegate one of the staff members of OSD who have the competence and capability to cover the responsibilities of the Executive Director until such time as the Executive Director is properly assigned.

 

12.3.2 The Executive Director

The Executive Director shall be employed on a full time basis by the Board. The Executive Director shall serve as a non-voting secretary of the Board. The Executive Director shall be the Chief Executive Officer of OSD and shall have the following powers and responsibilities:

a) Manage the day to day activities of OSD.

b) Employ, administer, promote or dismiss employees of OSD.

c) Authorize payments in accordance with the budget approved.

d) Prepare annual, strategic and other plans and budgets, and implement same when approved.

e) Serve as a non-voting secretary of the Board.

f) Ensure the proper maintenance of the books of account, funds and properties of OSD.

g) Present quarterly and annual activity and financial reports to the Board.

h) Decide on the sale or transfer of used fixed assets of OSD.

i) Prepare work plans, budget and policies of OSD and present to the Board.

The selection, responsibilities and removal of the Executive Director are provided for in the statute of OSD.

 

12.4 Selection of External Auditors

The external auditors shall be selected and their remuneration fixed by the General Assembly on the basis of a recommendation by the Board and the Executive Director following a competition among at least three auditing firms recognized and certified by the Auditor General.

The selection of the external auditors for subsequent years shall be presented and approved by the subsequent General Assembly unless the selected auditors have been demonstrating incompetence or their recognition and certificate from the Auditor General is withdrawn for any reason.

The External auditors shall be responsible to:

a) Audit the state and accounts of OSD annually and provide annual and consolidated reports to the Board and the General Assembly respectively.

b) Call a general meeting when, in their opinion based on their examination, circumstances have raised or are likely to rise, which endanger the existence of OSD.

The audit report of the external auditors shall contain, inter alia, explanations and information that:

a) The audit was carried out in accordance with Ethiopian Law and regulations currently in force and following recognized and accepted auditing principles and procedures;

b) The books, accounts and vouchers of OSD have been examined in the audit;

c) All information and explanation required for the purposes of the audit were obtained;

d) Proper books of account have been kept by OSD in their opinion and so far as appears from the audit examination; and

e) The accounts give a true and fair view of the state of OSD's financial situation.

The appointment and responsibilities of the external Auditors are provided for in the statute of OSD.

 

 

 

 

 

 

 

 

 

 

 

 

13. Number of Staff Required

S/N

Position

Number of staff required

Accountable to

1

Executive Director

1

Board

2

Secretary Cashier

1

ED

3

Program Coordinator

1

ED

4

Program Officer

3

PC

5

ME&L Officer

1

ED

6

Project Officer

6

Program Officer

7

Finance and Administration Officer

1

Board & ED

8

Driver

1

Finance and admin

9

Messenger/cleaner

1

Finance and admin

10

Guard

2

Finance and admin

 

 

Total

18

 

 

 

 

Chapter IV: Job Descriptions for Staff Members

 

14. Job Descriptions Applicable to All Staff Members

Thoroughly familiarize himself/herself to the organizational values and principles of OSD.

Carry out his/her functions in line with the principles, procedures, and guidelines of OSD as enshrined in the statutes, the Administration Manual and other directives issued by the Board and/or the Executive Director.

Ensure that planned activities are carried out in line with the annual plan and budget approved.

Monitor and evaluate the implementation of activities carried out within the programs and participate in the monitoring and evaluation of all programs.

Provide monthly reports on his/her performance to the relevant Program coordinator (for program staff) and to the officer for Finance and administration (for administrative staff).

Discharge the specific duties and responsibilities of his/her position and such other duties and responsibilities as may from time to time be assigned to him/her by the Executive Director as specified under article 25 of this manual.

 

15. Job Descriptions Applicable to All Program Staff Members

Work for the empowerment of poor, women and other marginalized Ethiopians.

Work for the improvement of the accessibility and quality of basic socio-economic service to poor, children, women and other marginalized groups.

 

 

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CHAPTER IV - JOB DESCRIPTIONS FOR STAFF MEMBERS

 

14. Job Descriptions Applicable to All Staff Members

Thoroughly familiarize himself/herself to the organizational values and principles of OSD.

Carry out his/her functions in line with the principles, procedures, and guidelines of OSD as enshrined in the statutes, the Administration Manual and other directives issued by the Board and/or the Executive Director.

Ensure that planned activities are carried out in line with the annual plan and budget approved.

Monitor and evaluate the implementation of activities carried out within the programs and participate in the monitoring and evaluation of all programs.

Provide monthly reports on his/her performance to the relevant Program coordinator (for program staff) and to the officer for Finance and administration (for administrative staff).

Discharge the specific duties and responsibilities of his/her position and such other duties and responsibilities as may from time to time be assigned to him/her by the Executive Director as specified under article 25 of this manual.

15. Job Descriptions Applicable to All Program Staff Members

Work for the empowerment of poor, women and other marginalized Ethiopians.

Work for the improvement of the accessibility and quality of basic socio-economic service to poor, children, women and other marginalized groups.

Promote corporate social responsibility among government organs, the private sector and the society at large.

Prepare or cause to be prepared research studies on his/her assigned program.

Identify resource persons and consultants who would carry out intended research and training activities and supervise the performance of such persons.

Collect publications and research outputs relevant to the assigned program.

16. Job Descriptions for Program Staff Members

16.1 Job Descriptions of Program Coordinator

Position Title: Program Coordinator

Reporting to: The Executive Director

Principal Functions: Under the overall administrative and professional direction and supervision of the Executive Director, plan, organize, and coordinate all programs; design, develop, monitor and evaluate the activities which are to be carried out under OSD.

Duties and Responsibilities:

Plan, organize, coordinate, implement, monitor and evaluate the overall program activities of the organization.

Carry out qualitative and quantitative research independently and/or with a team of researchers.

Design relevant term of references as well as coordinate, lead and supervise the activities of research of program officers, project officers and trainers.

Organize, coordinate and facilitate advocacy workshop.

Coordinate, organize and undertake training activities for the target beneficiaries as well as selected private sector members and government organs.

Oversee the production of quarterly newsletters, bi-annual magazines and other relevant publications of the organization.

Ensure the mainstreaming of issues of the poor, women and other marginalized societies in all activities of the programs.

Formulate quarterly and monthly operational plans and corresponding budgets in conformity with the approved annual plan and budget.

Prepares need assessment and baseline reports for the activities to be carried out within OSD.

Establish effective working relationships with individuals and institutions working with OSD and with relevant federal and regional government agencies.

In consultation with the Executive Director, organize workshops, discussions, meetings, seminars, experience sharing and monitoring visits to areas where program activities are carried out.

Gather data and information to serve as input in developing the annual and strategic plans of OSD.

Ensure that a user friendly and thorough filing and documentation system is maintained for all the programs.

Ensure that critical reports are prepared for completed activities with lessons learnt from carrying out the activities as well as recommendations on the future direction of planned activities.

Supervise and monitor, in particular through ensuring timely reporting, the performance of program staff members working for the assigned programs.

Prepare consolidated monthly, quarterly, bi-annual and annual activity reports for programs of OSD.

Develop reporting, monitoring and evaluation guidelines and procedures for programs and activities of OSD.

In consultation with the Executive Director, represent OSD in meetings with other agencies.

Design, and upon approval implement or supervise, systems and procedures for the development of the strategic plan of OSD.

Ensure the quality and timely preparation and publication of educational materials and training manuals for any educational and training activity in the programs.

Gather data and information relevant to the program operations, procedures and rules of OSD and report on same with lessons and recommendations.

Design and upon approval supervise the implementation of systems to widen the membership of OSD.

Evaluating the performance of program staff members.

Ensure that all logistic arrangements are made and activities within the programs are carried out timely as stipulated in the approved annual plan.

Design appropriate assessment systems and tools to carry out needs assessment and baseline report for the implementation of the program and implement same upon approval.

Ensure the timely preparation and publication of the report on the needs assessment, and follow-up the recommendations of the report.

Advise the Executive Director on the overall program planning and implementation processes.

Perform other related duties as required.

16.2 Job Descriptions of Program Officer

Position Title: Program Officer

Reporting to: Program Coordinator

Main Function: Under the administrative and professional direction and supervision of the Program Coordinator, be responsible for the planning, organizing, coordinating, implementing, monitoring and evaluating of program activities.

Specific Responsibilities:

Carry out qualitative and quantitative researches independently and/or with a team of researchers.

Ensure the mainstreaming of issues of the poor, women and other marginalized societies in all activities.

Discharge as appropriate the responsibilities common to all program staff.

Carry out the appropriate general responsibilities of Program Coordinator in relation to activities of program planning, organizing, coordinating, implementing, monitoring and evaluation.

Develop tools and systems to monitor and evaluate program activities of OSD.

Develop systems and tools to evaluate the effectiveness of the educational materials, manuals and publications of OSD, implement the same upon approval and present reports, lessons and recommendations.

Make all logistic arrangements for the timely implementation of program activities in accordance with the approved annual plan and budget.

Make all possible arrangements for the timely publication of manuals, educational and other materials.

Design and implement systems and training to develop the writing and facilitation skills of all program staff and provide them with advice and assistance in preparing reports and other writing.

Assist the Executive Director and Program Coordinators in managing and supervising program activities.

Undertake/follow up the training and capacity building needs assessment of communities and implementing agencies.

Identify the relevant institutions that could work with OSD.

Organize, execute and follow up training programs, workshops, seminars, conferences, etc., when approved.

Make sure that awareness is created among communities and the general public about corporate social responsibility and other issues OSD work on.

Ensure that activities of OSD are properly documented.

Responds to queries from communities, implementing agencies, voluntary organizations and the general public about the objectives of OSD.

Make sure that relevant information is gathered from similar organizations and activities for the purpose of sharing experiences.

Organize and execute the preparation of periodic plan of activities and budgets for OSD.

Organize and execute the preparation of periodic reports concerning the program activities of OSD.

Perform other related duties as required.

 

16.3 Job Descriptions of Project Officer

Position Title: Project Officer

Reporting to: Program Coordinator

Main Function: Under the administrative and professional direction of the Program Coordinator, be responsible to plan, organize and conduct or cause to be conducted all activities of program planning, implementing, monitoring and evaluating.

Specific Responsibilities:

Carry out appropriate general responsibilities of program staff in relation to activities of program planning, organization, implementation, monitoring, evaluation and reporting.

Make all logistic arrangements are made and activities within the program are carried out timely.

Maintain the evaluation reports of program activities and participate in such evaluations.

Plan and organize in-house training on planning, monitoring, reporting and evaluation of program activities to all staff members.

Participate in developing and carrying out human resource development and training plan.

Assist the Program Coordinator and Program Officer in discharging all responsibilities.

Discharge the common responsibilities of all program staff as appropriate.

Collect, compile and analyze qualitative and quantitative information in relation to program activities of OSD.

Identify best practices or experiences of program activities of OSD and other's.

Assist the program officers and program coordinator in the preparation of work programs, budgets and periodic reports.

Assist in awareness creation among communities and the general public about the objectives and activities of OSD using different mechanisms.

Provide necessary data when requested by supervisors and other concerned bodies.

Perform other related duties as required.

 

16.4 Job Descriptions of Monitoring, Evaluation & Learning Officer

Position Title: ME&L Officer

Reporting to: Executive Director

Principal Function: The Monitoring, Evaluation and Learning (ME & L) Officer will be responsible for supporting OSD's Program implementation and working team to ensure that ME & L systems, procedures, performance monitoring and results reporting are in place, effectively implemented and well synchronized. The primary function of the ME & L Officer is to carry out assessment and monitoring activities with a view to determine benefits of the projects and how they influence the beneficiaries. The ME & L Officer will help conduct a baseline survey and train staff, conduct survey and monitoring missions. The ME & L Officer must promote the use of participatory methods for assessment and monitoring surveys.

Specific Responsibilities:

Contribute to the development and implementation of OSD's Monitoring evaluation and learning (ME & L) strategy.

Contribute to the technical design of ME & L methodologies.

Contribute to data collection, storage and analysis.

Work with programme staff to ensure ME & L tools and processes are understood and used.

Provide advice to staff and stakeholders on ME & L decisions, such as the identification of priorities, needs and indicators; the design, set up and use of ME & L systems to collect data; and the design of E&L studies.

Identify opportunities to provide and present ME & L findings and data to colleagues to contribute to decision-making and strategic planning processes in the projects, as appropriate.

Ensure information from ME & L activities is properly analyzed and written up for reporting and learning, by undertaking and supporting activities.

Collation and analysis of ME & L data (including through surveys, web statistics, interviews, subscriber data, unsolicited feedback, case studies and reports) and analyzed against outcomes to draw out learning and implications.

Triangulation of findings using different types of data and analysis of trends over time.

Augment risk management systems and processes by enhancing oversight through a greater focus on monitoring, evaluation and audits.

Perform other related duties as required.

17. Job Descriptions for Administrative Staff Members

 

17.1 Job Descriptions of Secretary Cashier

Position Title: Secretary Cashier

Reporting to: The Executive Director

Principal Functions: Providing secretarial functions to the Executive Director, serving as a cashier for OSD and handling OSD's secretariat office functions; routes incoming and outgoing mails; arranges meeting and appointments to the Executive Director; handle all activities related to visitors.

Specific Responsibilities:

Handle OSD's secretarial office functions such as general communication, correspondence, telephone and fax messages.

Receives visitors to the office of the Executive Director, arrange appointments as required with partners, government bodies, and others.

In collaboration with the program coordinator and the program officers handle all practical matters related to visitors and to public relations.

Transmit messages, instructions, circular, reminders, etc from the office of the Executive Director to all staff members.

Maintain proper records of incoming and outgoing correspondence and files documents in a systematic manner to enable easy and quick reference in line with the approved filing system.

Set up and maintain a system for mail and paper handling within OSD and ensure that all mail and document flow smoothly.

Develop and maintain a filing system for OSD.

Maintain lists of addresses of agencies and appropriate ministries with which contacts are made.

Ensure the availability of office supplies at all times.

Receive cash and/or check against cash receipts, deposit collected money in the bank and draw cash from the bank.

Record cash received and deposited on daily basis and prepare collection and deposit reports.

Conduct cross reference bank deposit slips and/or check deposits against cash and/or check receipts to which they relate.

Disburse authorised payments from petty cash after examining the validity of the payment vouchers and other supporting documents.

Pay authorised advances for purchases, transportation, support and projects in accordance with applicable advance forms.

Record daily petty cash payments chronologically.

Count petty cash on hand daily and reconcile the balance plus suspense vouchers with the petty cash register balance.

Notify his/her supervisor of overage or shortage incurred.

Request for replenishments by presenting the completed and signed petty cash request form with all supporting documents.

Notify the staff for settlement of previously withdrawn funds and inform same to his/her immediate supervisor for action.

Submit reports of receivables and payables as and when requested by his/her supervisor.

Send quotation requests for suppliers and collect price invoices.

Prepare payment requests and pay for purchased goods.

Ensure the arrival of goods and documents on time.

Collect goods and deliver them to OSD.

Keep records and files of procurement in a systematic manner.

Perform all activities in relation to procurement of goods.

Perform any other related duties as directed by the Executive Director and Finance and Administration Officer.

 

17.2 Job Descriptions of Finance and Administration Officer

Position Title: Finance and Administration Officer

Reporting to: The Board and Executive Director

Principal Functions: Under the general supervision of the Board and Executive Director responsible for planning, organising, directing and coordinating the overall financial and administrative functions of OSD; formulating and developing financial and administrative policies, systems and procedures, i.e. budgeting, common support services, and personnel.

Specific Responsibilities:

Ensure that the operational plans and budget of OSD are prepared and approved duly and timely.

Ensure that financial and administrative reporting deadlines to the Board and other bodies are respected.

Approve all advances, checks, and petty cash payments which are within his/her authorized signatory limits.

Advise the Executive Director on general financial issues such as the effective utilization of available cash.

In collaboration with the Program Coordinator, ensure that funds are administered in line with approved annual plan and budget as well as the terms and conditions of agreements with donors.

Establish and be responsible for an internal control system to safeguard OSD's transactions and all expenditures.

Prepare up to date financial and administrative records and reports to authorized users.

Ensure the existence of up to date personnel policies, rules and regulations that will enable OSD to attract, train, motivate and retain its employees.

Ensure that OSD employees are administered in accordance with the principles, procedures, and guidelines specified in the Administration Manual.

Ensure that adequate mechanism exists to safeguard the properties of OSD.

Ensure timely replenishment and maintenance of appropriate financial records and supporting documents.

In collaboration with the Program Coordinator, coordinate the preparation of annual budget and work plan; undertake the final consolidation of the budget and on approval disseminates budget information to concerned bodies.

Ensure the preparation of monthly, quarterly, biannual and annual financial reports for the Executive Director, the Board and other financiers.

Establish systems and procedures for all purchases and ensure that all purchases are controlled through an adequate planning and budgeting system.

Develop and implement appropriate procedures for purchase requisition, receiving, storage and issuance, inventory, counting and reporting.

Ensure the correctness of cash balance in accordance with weekly collections and deposits.

Ensure that timely payments are made in settlement of OSD's obligations.

Establish and be responsible for a proper financial system that can provide (a) accurate, current and complete disclosure of financial transactions, (b) identify sources and application of funds in accordance with the principles, procedures and guidelines of OSD as well as with acceptable accounting and auditing standards.

Ensures that separate financial records are maintained for each program and for each donor to OSD.

Prepare for all financial transactions an analysis code and account code using OSD's program codes and chart of accounts.

Prepare monthly payroll.

Arrange and follow up changes in check signatories of OSD.

Ensure that taxes and insurance payments and collections are handled on time.

Ensure the maintenance of proper accounting records of OSD's property.

Ensures that copies of bank statements, cancelled checks and bank reconciliation statements are properly maintained.

Regularly check and follow up that cash transfers are properly deposited and verify that bank accounts are reconciled with deposit records.

Ensure that monthly bank account balances in the ledger are reconciled with bank statement balances.

Establish an imprest petty cash system.

Serve as liaison with external auditors.

Prepare responses to audit findings and follow up the implementation of audit recommendations.

Review budgetary reports for significant variation between budgeted and actual figures and formulate appropriate remedial actions.

Ensure that all budgetary adjustments and revisions are applied before they are recorded.

Perform other related financial and administrative activities as directed by the Executive Director.

 

17.3 Job Descriptions of Driver

Position Title: Driver

Reporting to: Finance and Administration Officer

Principal Functions: Under the overall and administrative supervision of the Finance and Administration Officer, drive vehicles to transport OSD personnel, goods and carry out errands.

Specific Responsibilities:

Check the vehicle at the start of each day for the general conditions of the vehicle, check coolants (oil, water) fuel level, tyre conditions and drive the vehicle with maximum-safety and care and according to traffic regulations.

Transport goods, equipment, tools and other materials of OSD from place to place.

Pick up and meet persons according to schedules and instructions.

Perform miscellaneous errands.

Report accidents promptly.

Carry proper driving license at all times; renew it yearly or as required by the law.

Make routine services such as washing, cleaning and greasing; report any defective parts of malfunctions; keep and submits reports on fuel consumption, mileage, car use etc. using a log book or other formats provided for the purpose.

Perform other related duties as directed by the Finance and Administration Officer.

17.4 Job Descriptions of Guard

Position Title: Guard

Reporting to: Finance and Administration Officer

Principal Functions: Under the overall and administrative supervision of the Finance and Administration Officer, ensure the physical security of the entire premises, equipment and other physical facilities of OSD, control unauthorized entry or exit of vehicles and people.

Specific Responsibilities:

Control unauthorized entry or exit of people and vehicles.

Tour about premises and examine gates, doors, and windows to ensure that they are securely locked.

Watch and report irregularities such as fire, broken water pipes and illegal entry of outsiders.

Provide reports on custodial or security matters during his/her assignment.

Handle with extreme care equipment entrusted to him/her.

Opens gates to allow entrance or exit for employees and other visitors.

Provide routine information to inquiries of visitors and guide them to appropriate offices.

Make sure that all lights are put out and offices properly locked before leaving the premises.

Perform other related duties as directed by the Finance and Administration Officer.

17.5 Job Descriptions of Messenger/Cleaner

Position Title: Messenger/cleaner

Reporting to: Finance and Administration Officer

Principal Functions: Under the overall and administrative supervision of the Finance and Administration Officer, perform messengerial, custodial and manual work in cleaning offices and premises, and in providing canteen services.

Specific Responsibilities:

Clean offices, conference and toilet rooms, corridors, floors, side-walks and premises.

Waxes and polishes floors and furniture.

Wash and clean walls and windows.

Clean carpets and rugs.

Check sinks and toilets to ensure that they are in good working conditions.

Ensure careful handling of office equipment and machines.

Keep equipment and materials supplied for cleaning and canteen services in good order.

Collect, dispose and incinerate waste.

Run the canteen service.

Collect payments due for services supplied through the canteen.

Ensure that the canteen is sufficiently stocked.

Report on the services and finances of the canteen.

Operate duplicating, copying and binding machines.

Run errands within the office.

Receive and make telephone calls in the absence of relevant staff.

Perform other related duties as required.

4. Salary Scale and Rank Application

The salary scale and rank for staff positions shall be applied after the date of the approval of the Board.

The Executive Director shall make necessary adjustments in salary, positions and rank of the existing staff.

Annual salary scale increments and promotion in title will depend on the availability of funds and periodic performance appraisal results of the employee.

The starting salary and position of a new employee will be negotiated and determined at the time of employment on the basis of his/her educational background and working experience by the Executive Director with consultation of the Management Committee.

CHAPTER VI - HUMAN RESOURCE POLICIES AND REGULATIONS

SECTION I - GENERAL

ARTICLE 1: SHORT TITLE

This policy and regulation may be cited as the "Human resource Policies and Regulations of OSD".

ARTICLE 2: DEFINITIONS

2.1 "Board" shall mean the Board of OSD.

2.2 "Employer" shall mean Organization for Social Development (OSD).

2.3 "Executive Director" shall mean the Executive Director of OSD.

2.4 "Employee" shall mean a person who concludes a contract of employment with the employer. A contract of employment shall be deemed formed where a person agrees directly or indirectly to perform work for and under the authority of an employer for a definite or indefinite period or piece work in return for wage.

2.5 "Relevant Law" shall mean the Labour Proclamation No. 377/2003.

ARTICLE 3 - SCOPE OF APPLICATION

3.1 The Human Resource Policies and Regulations of OSD shall be applicable to all employees of OSD.

3.2 Unless expressly stated to the contrary, these policies and regulations shall be applied to the Executive Director of OSD.

SECTION II - EMPLOYMENT REQUIREMENTS

 

ARTICLE 4 - PRINCIPLE

To provide OSD high quality employees for employment, recruitment efforts are geared towards hiring qualified employees who have potential to expand their skills, knowledge and values to the Organization. The selection process is a competitive process, based upon job-related qualifications. No discrimination is permitted due to race, sex, ethnic, disability or religion. Notwithstanding this, OSD will strive for a well balanced staff composition in terms of gender.

 

ARTICLE 5 - VACANCY ANNOUNCEMENT AND RECRUITMENT

5.1 The Board and the General Assembly shall determine vacant positions and corresponding remuneration in the annual plan and budget of OSD upon presentation of the Executive Director.

5.2 The Executive Director, when necessary, may employ additional employees for new projects on positions not determined by the General Assembly and the Board on annual plan and budget.

5.3 The employment period shall be in accordance with the life time of the project and shall be determined by the Executive Director. Such employment shall be conducted only when it is urgently needed and funds are available to fully cover the necessary remuneration. In the provision of this regulation, remunerations shall be determined by the Executive Director with the consultation of the Management Committee.

 

ARTICLE 6 - NOTICE OF VACANCY

6.1 A vacancy shall be deemed to exist only after the need for an employee is justified and the necessary budget provided for. Vacancies shall be filled through lateral transfer of a current employees or promotion of personnel already employed or recruitment from outside.

6.2 Every vacant position shall be made public for at least three days by means of publication considered appropriate by the Executive Director in consultation with the finance and administration officer.

6.3 Such notice of vacancy shall include but not limited to the title and pay range of the position, the opening and closing date of the application period, educational qualification and work experience requirements, place of work and type of employment.

6.4 Recruitment shall be effected to provide equal employment opportunity for all applicants and consistent and modern methods of recruitment shall be utilized to attract qualified personnel at all times.

 

ARTICLE 7 - SELECTION

7.1 Suitable applicants shall be screened and selected on the basis of qualification, experience, ability and willingness to undertake duties co-operatively.

7.2 In accordance with the peculiarities of the vacancy concerned, an examination shall be administered to the selected candidates. Such examination may include a written/performance test, and/or interview.

7.3 Applicants to any staff positions, whether it is for program or administrative staff, shall first be short listed and screened by the Management Committee whether to sit for interview and/or written examination. Based on the results of the selection process, the committee shall make a recommendation to the Executive Director regarding the suitability of the applicants for the vacancy. The Executive Director shall decide on the applicant whether to be employed or not taking into account the results of interviews, examinations and the recommendation of the Management Committee.

 

ARTICLE 8 - FORMALITIES BEFORE EMPLOYMENT

The selected applicant shall produce appropriate educational qualification and work experience evidence, and a medical certificate to determine his/her fitness for the employment as required.

 

SECTION III - TERMS OF EMPLOYMENT

ARTICLE 9: CONTRACT OF EMPLOYMENT

 

9.1 The selected applicant shall enter into a contract of employment with the employer for a definite period. The period of employment shall be decided by the Executive Director in consultation with the Management Committee. The contract of employment shall specify the type of employment and place of work, the rate of wages, method of calculation thereof, manner and interval of payment and duration of the contract.

9.2 The contract of employment shall enter into force as of the date of signature by the Executive Director or such other date as specified in the contract itself.

9.3 All employment shall be subject to a probation period of forty-five days. Probation period is a trial period during which time a new entrant is closely supervised to determine his competence for the post for which he was selected. It is the responsibility of the probationer to carry out his assigned duties to the complete satisfaction of the employer.

9.4 An employee re-employed by OSD for the same job shall not be subject to probation.

9.5 An employee on a probation period shall have the same rights and obligations that an employee who has completed his probation period has.

9.6 If the employee proves to be unfit for the job during his probation, the employer can terminate the contract of employment without notice and be obliged to pay severance pay or compensation.

9.7 An employee on probation may terminate his contract of employment without notice.

9.8 These regulations shall be deemed to be an integral part of the contract of employment.

 

ARTICLE 10 - OBLIGATION OF THE EMPLOYER

The employer shall, in addition to special stipulations in the contract of employment, have the following obligations:

a) To provide work to the employee in accordance with the contract of employment;

b) To pay the employee salary and allowances in accordance with the contract of employment;

c) To respect the employee's human dignity;

d) To keep a record containing relevant particulars about each employee, and

e) Upon termination of the contract of employment or whenever the employee so requests, to provide a certificate stating the type of work the employee performed, the length of service, the basic salary s/he was earning and his/her character.

f) To provide job description/term of reference to each employee.

ARTICLE 11: OBLIGATIONS OF THE EMPLOYEE

Every employee shall have the following obligations:

a) To perform in person the work specified in the contract of employment.

b) To follow instructions given by the employer based on the contract of employment.

c) To handle with due care all materials, instruments and tools entrusted to him/her for work.

d) To report for work in time in fit mental and physical conditions.

e) To maintain at all times the OSD staff code of conduct.

f) Not to disclose to any person, other than in discharge of his/her official duties and through official channels any information gained in the course of his/her official duties or otherwise, unless such information is of generally known nature.

ARTICLE 12 - JOB DESCRIPTION/TERMS OF REFERENCE

a) Job description/terms of reference shall be prepared and issued to each employee by the Executive Director at the time of employment or at any time thereafter and it shall form part of the contract of employment.

b) The job description/terms of reference to be issued to employees shall be based on the job descriptions stated in the Administration Manual of OSD.

c) Contents of the job description/terms of reference may be modified or amended as required by the Executive Director.

SECTION IV - WORKING HOURS AND PLACE OF WORK

ARTICLE 13 - TIME AND DAYS OF WORK

a) Employees' time and days of work shall be as follows:

Days: Monday - Friday

Morning Working Time: 8:00 am - 12:00 am

Afternoon Working Time: 13:00 pm - 17:00 pm

b) An employee may be asked by the Executive Director or a supervisor to work overtime at any time where this is called for by the urgency of the work to be done. No overtime payment shall be made. However, the employee is entitled to get an equivalent time off in a manner that does not negatively affect the work of the employer.

ARTICLE 14: NORMAL PLACE OF WORK

The normal place of work of each employee shall be at the head office of the Employer in Addis Ababa or such other place as prescribed in the contract of employment. However, an employee may be transferred, on a temporary or permanent basis, elsewhere if the interest of the Employer requires so.

ARTICLE 15: OFFICIAL TRAVEL

1. An employee may be required to travel outside the normal place of work on official business travel, which is approved in advance by the Executive Director.

2. An employee on official business travel outside Addis Ababa but within Ethiopia shall be entitled to claim:

a) Public transportation fare for land transportation or air fare in economy class and airport tax for air travel;

b) Payments for taxi fare;

c) Payment for duty telephone calls; and

d) Payments to cover costs necessary to discharge official duties.

3. A daily subsistence allowance Birr 500/day will be paid to all employees on official travel outside Addis Ababa but within Ethiopia. The hotel room cost of not more than 600 shall be settled with production of legal receipt.

4. Employees on official travel outside Ethiopia shall be entitled to a daily subsistence allowance of USD 200. The amount can be more if the cost of living of a particular city is known to be more.

a) Any per-diem for an official stay outside Ethiopia exceeding 90 days shall be approved by the Board.

b) It is being understood that the employer shall make any of the payments under this sub-article only when no other agency such as a funding organization covers the payments.

5. A whole per-diem will be paid:

i) For the day on which the travel begins;

ii) For each subsequent day of the travel until the day of return; and,

iii) For the day of return.

6. Per-diem at half rate shall be paid if the travel is completed in one day and made within less than 50kms radius of Addis Ababa. Per-diem shall not be paid for works done in Addis Ababa.

7. Travel costs such as plane tickets will be advanced or reimbursed on presentation of relevant documents.

8. Travel claims with receipts should be submitted as soon as possible and no later than seven working days after the travel.

9. Travel advances shall be cleared, including verification of payments by the finance and administration officer within seven working days after the return of staff from field work.

10. No additional advance shall be given before outstanding advances have been cleared.

11. The Finance and administration officer may suspend payments of salary to staff failing to clear the advance within the period stipulated.

12. Suspended salary payments shall be released only after clearing the cause of delay and securing official approval.

SECTION V - LEAVES

ARTICLE 16 - PUBLIC HOLY DAYS

a) Employees shall be entitled a leave with pay on all legally declared public holy days under the relevant law.

b) Employees shall be entitled a leave next day of Ethiopian New Year, Easter and Christmas for Christians and Muslims, and also Arafa, Mewled and Id Alfetir exclusively for Muslim employees.

c) Employees shall be also granted afternoon leave with pay on the eve of Meskel and Timket.

ARTICLE 17 - ANNUAL LEAVE

a) Employees shall take their annual leave in accordance with a leave schedule approved by the Executive Director up on presentation of supervisors in the course of the calendar year in which it becomes due. The leave schedule, thus prepared, shall as far as possible take into account:

i) the wish of the employee, and

ii) the need for maintaining the normal functioning of the employer

b) Where there are special circumstances, which require the absolute presence of the employee, the Executive Director may decide that the annual leave be postponed to next year. However, any leave postponed in accordance with this sub-article shall not be postponed for more than two years.

c) The Executive Director may for reasons dictated by the work conditions of the employee, or where unforeseen circumstances arise, recall an employee on an annual leave. The employer shall defray the transport expense incurred by the employee as direct consequence of his/her being recalled.

d) An employee who is recalled from leave shall be entitled to a payment covering the reminder of his/her leave.

e) An employee who has a service of one year with OSD is entitled to get a leave of 18 working days. An additional one day shall be added for every year worked at OSD. In some cases, to the discretion of OSD, when a new applicant is found experienced and qualified for a vacant position, her/his years of service outside OSD may be considered in the entitlement of annual leave days.

f) Annual leave may not be accumulated for more than two consecutive years. An employee whose contract of employment terminated is entitled to receive payment for the leave he has not taken.

g) Employees who seek leaves other than annual leave shall notify their supervisor and the Executive Director in advance and/or produce the necessary supporting evidence.

ARTICLE 18 - SICK LEAVE

a) Each employee who is unable to work due to illness or injury shall inform the employer within 24 hours or at the earliest opportunity about the reasons for absence.

b) All sick leaves for more than any three consecutive days within a week, or any five days within a month, or any ten days within a year shall be certified from a qualified medical practitioner.

c) All sick leaves without medical evidence shall be filled on the leave form for monitoring purposes.

d) Employees are required to present original sick leave documents for the reimbursement of the money paid to hospitals from insurance companies. The copy of the sick leave document should be attached with personal files of the employee and the original for the Insurance Company.

e) Certified sick leave shall be paid as follows:

i) Full pay for the first two months

ii) Half pay for the next two months

iii) No payment for the next two months

f) The contract of employment of an employee who is on sick leaves for more than six months shall be terminated automatically.

ARTICLE 19 - MARRIAGE LEAVE

a) An employee shall be granted five days leave when he/she concludes marriage in Addis Ababa.

b) An employee shall be granted seven days leave when he/she concludes marriage outside Addis Ababa.

ARTICLE 20 - MOURNING LEAVE

a) An employee shall be granted three days leave when his/her spouse or descendants or ascendants die in Addis Ababa.

b) An employee shall be granted five days leave when his/her spouse or descendants or ascendants die outside Addis Ababa.

c) An employee shall be granted one day leave when by affinity or consanguinity a second degree relative dies.

ARTICLE 21 - MATERNITY LEAVE

Maternity leave shall be granted to female employees in accordance with article 88 of the labour proclamation No. 377/2003.

ARTICLE 22 - STUDY/EXAMINATION LEAVE

a) An employee may be granted three days leave to attend a study program approved by the Executive Director.

b) An employee may be granted a paid study leave for six months or above only when the study program is approved by the Board.

c) An employee shall be given special leave with pay for the period of time that an examination is held. Provided however the employee produces appropriate document from the institution organizing such examination.

ARTICLE 23 - COURT ATTENDANCE AND POLICE SUMMON

An employee who has been summoned by any court or police station for testimonial or investigation shall be granted leave with pay on the production of document compelling attendance.

Furthermore,

a) An employee shall be entitled to leave without pay for up to 30 consecutive days in a year in the case of exceptional and serious events upon the approval of the Executive Director.

b) An employee is expected to present the cause for leaves before the leave starts. In special circumstances, where this is not possible, the employee is required to communicate the problem on the date when the leave starts in person or through telephone or messenger.

c) An employee who is absent without communicating the cause, except in extraordinary circumstances, shall be considered absent without due cause. This also applies to sick leaves.

d) Leaves shall be granted on request only after making sure that the employee doesn't have work in his/her hands. The relevant supervisor or the Executive Director shall decide whether the request of the employee deserves the granting of leave.

e) Tea breaks out of the compound are not permitted owing to the availability of the service in OSD compound. In special circumstances, if the tea break is to be outside of the OSD compound, it shall not exceed 30 minutes.

f) An employee shall be entitled to half a day of leave after a minimum of five days of a field trip outside Addis Ababa including days of travel

SECTION VI - STAFF DEVELOPMENT AND TRAINING

1. Training of employees shall be conducted based on the specific needs of the Employer and subject to the availability of funds.

2. Staff training period not exceeding 90 days shall be approved by the Executive Director. Staff training period exceeding 90 days shall be approved by the Board up on presentation of the Executive Director.

3. The manner in which training leave is to be granted, the form and extent of the financial assistance to be given and the corresponding obligations of the employee who is to attend the training shall be spelled out in a separate agreement to be concluded with the employer.

4. The Training Guidelines in this Administration Manual shall be deemed to be an integral part hereof.

SECTION VII - POSITION, RANK, REQUIREMENTS AND SALARY SCALE

ARTICLE 24: POSITION AND RANK OF EMPLOYEES

24.1 Every full time staff member shall be employed in a position and with a rank corresponding to his/her educational qualification, experience before and after joining OSD and skills necessary to discharge the responsibilities calling for the position.

24.2 The starting position of a new employee will be negotiated and fixed at the time of employment by the Board in the case of the Executive Director, and by the Executive Director, in the case of all other positions. The Executive Director shall be advised by the Management Committee in negotiating the salary, position and rank of recruits of both a program and administrative staff positions.

Here is the extracted text from Chapter VIII of the manual, with all page numbers, repetitive scanner artifacts, and footer text removed, formatted cleanly for you to copy and paste:

CHAPTER VIII - GUIDELINES FOR SELECTION OF EMPLOYEES TO TRAINING PROGRAMS

INTRODUCTION

This training guideline is prepared in order to make easy and simple the selection process of the internal staff of OSD for training both inside and outside the country.

Hereafter, in this guideline the term organization refers to the Organization for Social Development (OSD).

A scholarship in this context is defined as a training opportunity that is provided to OSD staff by external governments, international organizations, NGO's and other partners covering all the necessary costs for tuition, residence, medical, insurance, and round-trip air tickets without affecting or exposing the organization for any financial expenditures, or a training opportunity in line with the human resource development and training plan of OSD approved by the Board of OSD.

The scholarship nomination committee in this guideline is the Management Committee established by the Executive Director of OSD.

Unless otherwise defined in some other way, short term training in this guideline is training and/or a course of not more than three months duration.

Permanent staff members of OSD in this guideline are those individuals who are employed for duration of one or more successive years.

 

GUIDELINES FOR SELECTING STAFF MEMBERS FOR A TRAINING

For better utilization of the training opportunities available, the Program Coordinator and the Finance and Administration Officer should prepare a staff training plan for his/her staff member well in advance.

Any staff member who feels fulfill the criteria for the training can apply before the deadline.

Trainees should be screened out based on the needs assessment of the organization or the program.

If a staff member is already selected earlier for a training opportunity and is awaiting the decision as to his/her acceptance, he/she can't compete for another one until the response of the first is known.

Costs related with processing an approved scholarship will be covered by OSD unless the donor organization covers them. This cost includes medical certificate, exams, photocopy of documents, passport and visa, airport taxes and other fees.

Official training requests for the staff of the organization can only be made to partners of the organization or other sources by the Executive Director. However, the request should not be in the name of specific individuals and should confirm to the priority need of the organization.

Female trainees will have equal chance with their male counterparts in competing for any training program.

If two competitors have equal points in the selection process the Executive Director will decide on the issue.

A) AGE LIMIT OF THE TRAINEES

Besides the age limit that is set by the scholarship awarding body, the policy of the organization in relation to age limit will be:

For first degree or lesser qualification scholarships the candidates should not be older than 36 years;

For Masters degree scholarships the candidates shouldn't be older than 40 years;

For a third degree (PhD, Specialization, Post doctoral studies, etc.) the organization has no age limit if the donors wish to provide the chance.

B) ACADEMIC REQUIREMENTS

Beside the academic requirement of the donors of the scholarship, to compete for further training the candidate should fulfill the following requirements.

To compete for first degree scholarship, post graduate diploma and other short course, graduates from high school or technical school should have a cumulative GPA of at least 2.00, or from a technical school an average grade of 50%.

To compete for second degree, post graduate diploma and other short courses, the competitors should have a first degree and a cumulative GPA of at least 2.40;

For PHD and any specialization, the requirements will depend on the donors' interest as well as the recommendations of the Management Committee approved by the Executive Director and the Board.

 

C) REQUIRED SERVICE OR EXPERIENCE

Candidates with first degree and competing for second degree and/or other courses are required to meet the training guidelines of the organization as indicated in this Administration Manual.

CRITERIA FOR VALUATION OF CANDIDATES

The following criteria will be adopted by the organization in ranking individuals for any training program.

Requirements

Value assigned

1. For Academic requirements (E.g. Diploma, BSc, BA, MSc, MA, PHD, etc.)

25%

2. For GPA

5%

3. For work experience (Within OSD)

30%

4. For Work experience (Outside OSD)

20%

5. For efficiency report (Staff appraisal)

20%

 

The detailed procedures of valuation of each parameter indicated above are presented as follows.

1. Valuation of Academic Requirements (25%)

No.

Level of Education

Directly Related

Indirect Related

Unrelated

Remarks:

Directly related refers to the relationship between the training and the current job of the individuals.

Indirectly related refers to any type training that is not directly related by subject but indirectly related.

2. Valuation of Candidates GPA (5%)

 

Services after training

Depending on the duration of the training they have taken, the trainees will make an agreement to provide a service for at least double of the duration of the training he/she has attended.

Reporting

The trainees should report to the organization immediately after completing their training programs. The report should include a copy of diplomas/certificates and the paper prepared for fulfilling his/her course, the list of the courses attended, and a brief description of its relevance to his/her present and future carrier.

Change of profession/Field of work

After completing the training program of its staff member, the organization has the right to assign the trained individual to its priority, provided that the new training make the trainee more efficient in his/her future carrier and other benefits are maintained.

Request for Further Training

An individual who had secured scholarship opportunity through the organisation and still got another opportunity for continuing further his/her training, must inform in advance to the organisation and make an agreement to secure any support and commit him/herself for further years of services.

THE TRAINEES NOMINATING COMMITTEE

All training arrangement and selection processes for training staff members will be made by the Management Committee of the organization.

Attendance to courses taking place locally, and to overseas short term courses lasting no more than 3 months shall be decided by the Executive Director upon the recommendation of the Management Committee. Long term overseas courses require the approval of the Board up on presentation of the Executive Director.

DUTIES AND RESPONSIBILITIES OF THE NOMINATION COMMITTEE

The nomination committee will be accountable to the Executive Director and will have the following duties and responsibilities:

Select staff members for any training secured from any source in the name of the organization or from the organization's internal budget;

Monitor and control the timely utilization of all training opportunities regardless of their source or sponsor;

Based on studies, will propose new training opportunities for staff members either from internal resources of the organization or firm external sources;

Make the staff members aware of the policies, rules and regulations related with staff training;

Settle any problem related with training programs;

Provide progress reports to the Executive Director;

Prepare and/or amend the rules and regulation related with training, when necessary, up on the approval of the Executive Director. Whenever such an amendment is made, however, it shall be publicized to all staff members in advance.

INDIVIDUAL ACTIVITIES OF THE COMMITTEE MEMBERS

Indicated below are the main tasks of the chairperson and the secretary of the committee.

THE CHAIR-PERSON

A program coordinator delegated by the Executive Director shall act as the chair-person of the committee and performs the following activities:

Arrange meeting schedules and led the meetings;

Execute all the decisions of the committee;

Perform all written correspondences and sign documents related to the issue;

Make all local and external correspondences related to the issue on behalf of the organization and the committee;

Perform official activities that are necessary to the committee;

THE SECRETARY

The Secretary will be selected by the Management Committee and performs the following activities:

Prepare discussion agenda for the committee;

Write-up the minutes of the committee;

Prepare progress reports related to the issue;

Perform other activities provided by the committee.

TEMPORARY SUSPENSION OF MEMBERS OF THE COMMITTEE

A committee member will be suspended from the committee meetings if:

He/she is a candidate for the proposed training program under discussion;

He/she has a family or a blood relationship or any contradiction with the candidate under discussion;

QUORUM OF THE COMMITTEE MEETING AND OTHER RELATED ISSES

The committee resumes its activities if half of its members are present. Similarly, if the point of discussion creates any problem, decisions will be made through voting, but the opinion of minorities will be recorded in the minutes.

All training opportunities will be notified to the staff members in order to make themselves ready and apply for it. The notice should explain:

The subject/field of the training opportunity;

The place/country where the training will be conducted;

The duration of the training;

The number of individuals to be trained;

The level of education experience, field of study, etc., of the required candidates;

The place and time of registration;

The notice should be signed by the director and have seal of the organisation;

It should be placed in a clear and visible place of the staff;

It should stay at least for about three consecutive working days for registration of the staff;

If a staff member is absent in the time of registration with a prior notice of the office, his immediate supervisor can propose him/her to compete for the training;

PRIVATE SCHOLARSHIPS

If a staff member has got a scholarship opportunity covering all the costs and requested the organisation to acknowledge the training, the organisation can provide its support provided that the training program is considered to be important to the organisation. The organization can also provide leave without pay to the staff member for a period equivalent to the training program. The support and the leave without pay should be approved in writing by the Executive Director.

BENEFITS DURING TRAINING

If a staff member is in a training program nominated by the Management Committee and approved by the Executive Director, he/she is entitled to get his/her full salary until the completion of the course provided that the necessary funds are secured. The trainee shall in return make an agreement to provide his/her service for double the time spent on training or repay to the organisation any and all of the costs incurred in the training whether or not such costs were covered by OSD or any other donor.

There is a visual jump in the source text between pages 66 and 69, meaning pages 67 and 68 (which likely contained the detailed breakdown for points allocated to internal/external work experience and efficiency reports) were missing from "Admin manual 4.pdf".

 

Here is the cleanly extracted text from Chapter IX and Annex I of the manual, with all page numbers, repetitive scanner artifacts, and footer text removed for easy reference:

CHAPTER IX - PROCUREMENT PROCEDURES FOR GOODS AND SERVICES

1. General Principles

All procurement practices for goods and services to be used by OSD shall comply with the procedures provided in this chapter and be aimed at achieving economy and efficiency.

The following are the procurement procedures of OSD.

2. Procurement Committees

A procurement committee for the procurement of goods will be constituted by the Executive Director, which consists of:

a) Finance and Administration officer: Chairperson

b) Program coordinator: Member

c) Staff member for whom the goods or services will be procured: Member

d) Secretary Cashier: Secretary

In the case of procurement of consultancy service, the Management Committee of OSD will serve as a procurement committee.

3. Step-by-Step Procurement Procedures

3. Each staff member is responsible for identifying the goods or services that are needed to carryout his/her responsibilities. A staff member requiring goods shall submit his requests to the program coordinator, in the case of program staff and to the finance and administration officer, in the case of administrative staff for approval for appropriateness of the request. Then, the request will be forwarded to the secretary cashier.

4. Upon the receipt of the request, if the goods are available, the secretary cashier issues the goods using appropriate issue vouchers to the requesting staff member. If the goods are not available, the secretary cashier shall prepare purchase requisition and submit to the Finance and administration officer for budget verification.

5. On the basis of the purchase requisition, the secretary cashier shall select the goods or services to be procured and the supplier from whom the purchase is to be made. The reason for making the selection and the precise amount necessary to procure the goods or services shall be clearly indicated.

6. Goods and services with a value of less than Birr 1000 shall be procured by direct shopping upon the verification of the Finance and Administration officer and the approval of the Executive Director. In this regard, there is no need for the intervention of the procurement committee.

7. Goods and services with a value of more than Birr 1000 shall be procured upon the involvement and recommendation of the procurement committee. In this case, the secretary cashier is required to collect at least three proforma invoices from reliable suppliers. The procurement committee is responsible to verify that the selection of the goods or services to be procured shall, in as much as possible, be made on a competitive manner. Provided however where it is difficult to follow this procedure, the procurement committee may follow such other procedures as it deems appropriate and that such procedure is recorded in a minute of the committee, which shall be attached and submitted to the Executive Director for approval.

8. The procurement committee shall be responsible to determine and process the procurement of stationary, supplies and other consumable items, which are normally necessary for program and office activities on quarterly basis or where appropriate on biannual basis. The provision of the previous paragraph shall apply as to the procedure to be followed in selecting the goods and services to be procured.

9. In all cases, before the purchase of goods or services is conducted, their conformity to the approved budget shall be verified by the Finance and Administration Officer.

10. Taking in to account that the need for the procurement of goods of the organization is minimal, any procurement of goods or services shall be made by the secretary cashier.

11. Any procurement of goods or services shall be approved by the Executive Director. The Executive Director may reject any procurement request submitted for approval. When the Executive Director instructs or requires that the selection of the goods or services be made again, the procedures described above shall be applied.

12. When the procurement confirms to the approved request and payment, the secretary cashier shall procure the items and deliver to the organization.

13. Upon the delivery of the goods, the secretary cashier shall issue the items to the requesting staff member using an appropriate issue vouchers. The secretary cashier is responsible to check whether the procured items are in conformity with the requested ones.

14. The secretary cashier is responsible to maintain a clear listing of items procured, their current state and the stock level and inform that all goods purchased are available and in good condition every quarter to her/his supervisor.

15. Every staff member shall be responsible to keep all items at his custody.

16. The secretary cashier is responsible to submit the necessary invoices, receipts, goods receiving notes, etc. to the finance and administration officer.

4. Consultancy Services Procurement

17. In the case of procurement of consultancy services, detail term of reference (TOR) shall be prepared by the relevant program staff in consultation with the program coordinator. The required fund has to be also secured.

18. The term of reference (TOR) has to be reviewed by the Management Committee and shall be submitted to the Executive Director for approval.

19. Once the term of reference (TOR) is approved, either short listing of individual consultants or firms, as required, shall be conducted by the Management Committee or announcement shall be made on national news papers. The decision whether to short list or made an announcement shall be made by the Executive Director in consultation with the Management Committee.

20. Interested consultants or firms shall be given the term of reference (TOR) and are required to submit technical and financial proposals within a given deadline.

21. The Management Committee is responsible to review and evaluate the technical and financial proposals submitted by consultants using a clear and transparent set of criteria. On the basis of the findings of the evaluation, the Management Committee has to submit its award recommendations to the Executive Director for Approval.

22. After approval, the winner consultant or firm shall be awarded the consultancy service and a contract agreement shall be concluded between OSD and the awarded consultant or firm.

 

 

 

 

 

 

 

ANNEX I - ORGANIZATION FOR SOCIAL DEVELOPMENT (OSD) EMPLOYEE PERFORMANCE EVALUATION REPORT

 

 

INSTRUCTIONS

1. Employees of OSD shall be evaluated on the basis of the attached evaluation form.

2. The form is intended to serve as a record of the employee's work performance, clarity, correctness, speed, and the like. It also serves as a basis for taking necessary steps with regard to the employee concerned. The responsible supervisor for filling out the form is, therefore, expected to act honestly and to use her/his judgement with utmost care.

3. The Evaluation form should be filled out and submitted to the Executive Director twice a year - in January and June.

4. Numbers 11 to 13 of the evaluation form headings are to be filled out additionally for supervisors who have staff under them.

5. To find out the average point of the columns marked "X", divide the total:

a) into 13 for those who are on supervisory posts, and

b) into 10 for the others

6. If the average points of the employee's performance is:

a) Below 1.50 inclusive, the result is Below Expectations (BE)

b) Between 1.51 and 2.50 inclusive, the result is Low-Meets Expectations (LM)

c) Between 2.51 and 3.50 inclusive, the result is Meets Expectations (ME)

 

 

 

 

Organization for Social Development 

FINANCIAL MANUAL 

 

 

 

 

 

 

 

 

 

Addis Ababa, Ethiopia

 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

I. FINANCIAL AND ACCOUNTING POLICIES

ACCOUNTING BASE The accounting bases of OSD is cash base of accounting in which revenue is recorded when realized and expense are recorded when incurred without regard to the time of cash receipt or payment.

ACCOUNT SYSTEM OSD operation is undertaken in the head office only, thus, it is the centralized system which is adopted.

ACCOUNT RULES OSD follows the rules of General Accepted Accounting Principles (GAAPs).

FISCAL YEAR The fiscal year of OSD run from 1st January to 31st December of each year (G.C).

CASH AND CHEQUE RECEIPTS All receipt of OSD shall be acknowledged by its official receipt.

PAYMENTS All payments of OSD shall be effected by unless the amount involves is so small that writing a cheque will not be necessary. Under the circumstance, payment will be effected from the imparts petty cash fund.

FLOAT OF PETTY CASH FUND The flout of OSD's petty cash fund is set at Br. 5,000.00. This amount shall not be altered unless authorized by management commute of OSD. The fund shall be replenished when 75% is utilized or 25% of established fund remain on hand.

DOCUMENT MAINTENANCE AND PRESERVATION i. All unused accountable documents of OSD should always be kept under key and lock. A responsible person should be signed for the up-keep of the documents. ii. Annual inventory of unused accountable documents should be taken at the end of each fiscal year. iii. All used documents should be under the custodianship of the accounting unit. i. All purchase up to Br 500.00 directly purchased by purchaser but the purchased amount filed between Br.500.00 - 5,000.00 it must be approved by Executive Director ii. All purchase up to Br. 1,500.00 shall be free from purchase Performa invoice. iii. All purchase in excess of Br.1, 500.00 but less than 10,000.00 shall be affected by collecting at least three Performa invoice and obtaining the approval the purchasing committee. iv. All purchases in excess of Br. 10,001.00 shall be through public bid unless the following condition occurs; a) The supplier of the commodity is the sole manufacturer or agent of the commodity to be purchased. b) Price of the commodity to be purchased is legally pre determined and tariffs are pre set. c) If it expected that bidding will not bring change in terms of prices or quality. v. All purchases shall be received against Goods Received Voucher and all issues shall be against Store Delivery Voucher. vi. All purchases shall be initiated by Purchase Requisition.

PAYDAY OSD's payday shall be the 25 - 28 day of every Gorgonian Calendar unless such date falls on public holidays or weekends.

UNCLAIMED SALARY Unclaimed salary shall be paid to the benefitaries after clearing the cause of the delay and obtaining official approval.

SEVERIANCE PAY AND LEAVE PAY OSD shall provide severance pay and leave pay at the end of project completion and at the end of each fiscal year (respectively).

INVENTORY VALUATION. INVENTORY OBSOLESCENCE Inventory of OSD, if there is any, shall be valued at cost. In case of obsolete stock, it is the board that decides up on its disposal and immediately announce for legal governmental agency.

FIXED ASSETS MANAGEMENT i. Fixed assets are fully expensed upon acquisition without any consideration for depreciation. ii. OSD will report on the acquisition of fixed asset in line with the agency's Reporting requirement. iii. Physical inventory of all fixed assets should be conducted annually and the report will be sent to governmental agency and external auditors. iv. All fixed assets falling under the OSD should be given identification number upon acquisition. v. For physical control purpose, fixed assets will be registered by the Finance Officer on Fixed Asset Register in the OSD. vi. Adequate physical safe guard over assets includes keeping a record, which contains a list of fixed assets procured under OSD and currently used by the staff. OSD expects each staff to take care of the fixed assets in his/her use and to hand them over upon completion of his/her assignment. vii. OSD's vehicle shall be used for the organization's business purpose only and each driver shall maintain a log-book. viii. The coding system giving tag number; recommended is as follows:

The first digit represents Asset Category.

The second digit represents Asset identification number.

In addition, when the location of the asset is recorded on the fixed asset register the program to which the asset belongs will be recorded.

AUTHORITY LIMIT In order to smoothen routine or day operations, the following authority limits regarding authorization of payments is put in place: i. Any one time payment in excess of Br.51,000.00 shall be authorized by the Chairperson of the Board of Directors or official designee. ii. Any payment of up to Br. 20,000.00 shall be authorized by the Executive Director of OSD. iii. In the absence of the Executive Director, the Financial Officer shall authorize any payment of up to Br.7,000.00.

CHECK SIGNATORIES i. Signatories of checks must be authorized by Executive Directors & finance head or casher. ii. If signatories of checks of OSD have been changed, the Board of Directors of OSD should announce to the FDER's Societies and Charities Agency.

ROUTING OF PAYMENT All payment come directly and /or passes through the Finance Department of OSD thereby enabling the department to prepare the necessary payment in accordance with the policy of the organization.

 

2. CASH AND BANK OPERATION

2.1 CASH AND CHEQUE RECEIPT

2.1.1 DEFINITION Cash is a medium of exchange for goods and services. It consists of coins, notes, cheques and cash deposit with banks. Cash is the most liquid of all assets. It requires the most efficient system of recording and controlling.

2.1.2 ORIGINATION OF CASH RECEIPT Cash receipt of OSD origination from donation, grant contribution fund raising activities, collocations from receivable, liquidation of clearance of advance outlays (premium and travel, loans, work advance etc.), sales of used and scrap materials etc is collection in the form of cash, checks and bank transfer.

2.2 DOCUMENTATION

CASH RECEIPT VOUCHER (CRV) - ANNEX 3.1 This is a per-numbered and printed document issued to the payer to acknowledge receipt of cash. It is prepared in set of three copies of different colors. The distributions of the copies are:- i. The original is issued to the payer ii. The 2nd copy is kept for accounts use and serves for coding and recording transaction, and iii. The 3rd copy remains with pad.

JOURNAL VOUCHER (JV) - ANNEX This is a medium by which transactions are summarized to be recorded in general ledger accounts. It is useful for settled advance payment, adjusted un-reconciled difference etc.

BANK ACCOUNT TRANSACTION The transactions that affect bank account are: i. Deposit (cash or cheque) made by cashiers. ii. Transfers made by donors or from one bank account of OSD to another bank. iii. Withdrawals cheque issued against the account.

Deduction by the bank for various reasons, for instance, cost of cheque book, service charges.

BANK TRANSACTION DOCUMENTS The documents that serve as primary source for making accounting records in bank accounts, including deposit slips both for cash and cheque deposit, bank debit and credit advices, bank statement and written correspondence made with the bank.

 

 

2.3 RECORDING CASH AND BANK RECEIPT TRANSACTION

Cash Receipt Voucher (CRV) is a primary document and is used to recorded transactions for each and every receipt of money, cash or cheque but not for money transferred through banks.

The transaction on a CRV is analyzed and Journal entries are made and coded on the voucher to make entries into computer.

In case the bank bounces back cheques that were deposited for collection, immediately a Journal Voucher is prepared on the bounce cheque to reserve entries created by stated condition.

Cheque deposited in the bank by external parties shall be recorded in the appropriate bank accounts by Journal Vouchers after verified the purposes and source of the deposits.

PREPARATION OF JOURNAL ENTRIES a) For bank credit advice, the entries are summarized as follows: Cash at bank 

(Dr)………………………xxxxxxxx Revenue (the right Account number) (Cr)………………………xxxxxxxx

b) Journal entries recording from the Cash Receipt Voucher is as follows: Cash on hand 

(Dr.) ………………………xxxxxxxx Cash in bank 

(Dr.) ………………………xxxxxxxx Cash on hand (previous day collection) Balance/A/R) 

(Cr.) ………………………xxxxxx Donation

(Cr.)………………………………xxxx Revenue from income generation programs (Cr.) xxxxxxx Miscellaneous income (others incomes)

(Cr.) ………………xxxxxxxx (To record the Journalizing of cash receipt)

2.4. Internal Control

ON CASH RECEIPT VOUCHER

To Receipt vouchers should be pre numbered and printed by the order of the proper authority of OSD.

All collection should be acknowledged by Cash Receipt Vouchers.

Writing in cash receipt vouchers should be completed only in ink.

Only one cash receipt voucher pad should be issued to the casher against signature and a new pad should be replenished on returning the previous one.

The number of all cash/cheque received have to be entered in the respective cash receipt vouchers.

Surprise cash count at irregular interval should be made.

Cash transfers, if there are any, should be made through bank only.

Annual leave by the casher should be taken and the replacement should be a person of stronger moral responsibility who can look for irregularities. The replacement should be independent of cash collection and account recording responsibilities.

Cash/cheque collection should be kept in safe until deposited to a bank.

Cash collections should be deposited intact in the bank account of the organization.

The following physical control over cash should be in place; a) Bondage of the cashier b) Protection of the cashier by accompanying guards when carrying cash from and to banks. c) Providing fireproof safes reinforced separate rooms and dependable lockers (Kazan).

ON CHEQUE

Never accept post-dated cheques.

Search forgeries on cheques to be received.

Notify senior management staff on bouncing cheques.

Bank reconciliation should be made by an accountant independent of cash and cheque collection and cashiers.

Post-dated cheques, disputed items, unidentified receipt of cheques and the like should be forwarded and investigated by persons independent of preparation of deposit and posting of accounts receivable details.

 

3. PAYMENTS Payments are disbursement receipt of goods and services. They are affected either by cash or cheque.

3.1 PETTY CASH PAYMENT

3.1.1 DEFINITION It refers to a system of imprested fund established to meet miscellaneous and recurring expenses which would not normally require cheque preparation. Petty cash fund could be general or specialized.

1. General Petty Cash fund

Establishment The size of the general petty cash fund is decided upon by management based on past experiences. In the case of OSD, the fund is set at Br.4,000.00.

Operation Operation of the petty cash fund should follow the impress system where the cash on hand plus the document paid out of the fund should equal to the established petty cash fund at any one time.

Payment limitation The maximum amount to be paid out of the general petty cash fund should be fixed by Executive Director. In the case of OSD, it is set at Br.700.00.

Replenishment The general petty cash fund shall be replenished under two conditions, i.e when 75% of the fund is utilized or 25% of established fund remain on hand.

DOCUMENTATION Petty Cash Payment Voucher (PCPV) - ANNEX When a petty cash payment is made, it is prepared in two copies and the original goes to the accounting department while the second copy remains in the pad.

Petty Cash Reimbursement Document Request ANNEX Any cash kept and reimbursement request is prepared in two copies and the original has to be attached with the CPV; attached to it. In this regard, the cashier ensures the signature from each note made to the right person and after all supporting voucher and documents have been gathered, Reimbursement shall be made only to the extent of the amount of the receipts/other values.

JOURNAL ENTRIES The Cheque Payment Voucher for establishment and replenishment of petty cash funds journal entries are:

On establishment of the petty cash fund: Petty cash account

(Dr)……………… xxxxxxxx Cash in bank

(Cr.)……………………… xxxxxxxx

On replenishment: Expense Account / Liability Assets 

(Dr.)……… xxxxxxxx Cash in bank 

(Cr.) xxxxxxxx

 

3.2 CHEQUE PAYMENT

3.2.1 DEFINITION Check payment are ordering the bank to make cash payments to the person or organization named in the check. Check payments are transactions that reduce bank balance. Bank cheque payment practices have the advantage of safe keeping cash, saving of cash counting time, avoidance of the risk of carrying of large amount of cash, as well as handling big cash payments.

3.2.2 DOCUMENTATION OF CHEQUE PAYMENT VOUCHER-ANNEX 4-4 This format is printed and pre-numbered in a set two copies. The original copy with supporting documents is given to accounts for processing. The second copy is retained in the pad.

3.2.3 RECORDING The cheque payment voucher is designed to accommodate for debit and credit transactions. Check payments are analyzed and coded for account allocation with the balancing net pay being credited to the current bank account with debits and credits shown in the account distribution column of the CPV.

3.2.3.1 For cheque payments Assets or

(Dr.)…………………………… xxxxxxxxxxxx Liabilities or 

(Dr.)………………………… xxxxxxxxxxxx Expenses or as appropriate 

(Dr.)…………… xxxxxxxxxxxx Cash in Bank

 (Cr.) ………………………… xxxxxxxxxxxxx

3.2.3.2 For bank debit advice Expenses/Asset 

(Dr.)………………………xxxxxxxxxxxx Cash at Bank

 (Cr.) ………………………… xxxxxxxxxxxxx

 

3.2.4 INTERNAL CONTROL

a) General Opening of bank accounts, change of signatories and closing of bank accounts should be authorized and communicated to the concerned banks immediately by authorized officials. Further to the above, the following precautions should be taken as regards to cheque and cheque payments.

b) On cheque payments

Check preparation should be made by employees independent of voucher and invoices approvals, purchase or store receipt or cashiers.

All payments of more than the petty cash limit should be made in cheques

Segregation of duties of cheque payments, receipts, deposits, and recordings of cheques should be in place.

Prior to the preparation of payment vouchers, the validity of attachments of supporting documents should be properly compared with vendors' invoices, goods Received Notes, etc.

Cheque payments should be made from properly budgeted amounts.

Except for cheques prepared in the name of individuals, all cheques should be stamped "Account Payee Only" at the top corner of the cheques.

The payment vouchers and supporting documents should be canceled with a "Paid" stamp to avoid double payment.

Each cheque should be signed by at least two authorized signers,

c) On signing of cheques

Check signatories should be authorized by the highest Governing board of Directors.

Authorized signers should be independent of cheque payment voucher preparations.

Cheque signatories should be free from preparations, collections and disbursement duties.

Each cheque should be signed by two or more signatories of cheques.

Blank cheques should not be signed.

3.3 BANK RECONCILIATION

3.3.1 DEFINITION A Bank Reconciliation Statement (Annex 4.5) is prepared to reconcile the differences between the ending balance of bank statement and books of GSA and the difference may arise because of delay in either party in recording a transaction or of an error. Bank accounts should be reconciled with the records of GSA as soon as the bank statements are received from the bank and a bank reconciliation statement should be produced in detail and include the date, reference numbers and descriptions of all outstanding items. Bank reconciliation statement is prepared in three copies at the end of every month. The distribution is the first copy goes to the Executive Director; the second copy to the head of the accounting unit and the third copy are left with the reconciliation clerk for riling. Bank reconciliation statement should be reviewed, initiated and dated by a senior officer.

3.3.2 DOCUMENTATION Statement of bank reconciliation (Annex 4.5) will be prepared on the basis of the following documents:

CRV (cash receipt voucher) - summarized

Deposit slips (summarized)

Bank debit and credit advices - summarized & Check Payment Voucher-summarized

Check stubs and list of voided cheques

Previous month(s) bank reconciliation statements

3.3.3 RECORDING BANK TRANSACTIONS BASED ON BANK RECONCILIATION: Bank advises (both debit and credit advises) received from the bank are journalized by JVs, signed by the Head of finance & administration. Bank deductions in regard to cost of cheque books are journalized by separate JVs, the source document being the bank statement.

3.3.4 INTERNAL CONTROL ON BANK RECONCILIATION

Check that the date, number and amount showed on every cheque stub agrees with the corresponding date on the bank statement and notes the difference, if any, and that voided cheques are not cashed.

Check all deposits are included in the month's Bank Statement.

Ensure that bank statements and reconciliation reports are properly filed for future references.

All canceled (voided) cheques will remain attached to the cheque stub after the mutilation of the signature parts.

If there occurs a change in the signatories of bank accounts, the bank should be notified immediately about the changes and effective date of the changes.

Make sure that the bank reconciliation statement is prepared by an independent person not involved in the preparations of cheques and deposits.

When collecting cheque books, the person collecting should check that all the cheques are in place and in sequence.

Voided cheques should be kept attached to the cheque stub after the signatures are mutilated.

5. ACCOUNTS RECEIVABLE

5.1 DEFINITION Accounts receivable refers to money due from third parties both within the organization and outside. Receivables include project advances, salary advances, travel advances, purchase advances, deposits and prepayments, fund receivable, sales receivable, sundry debtors, etc.

5.2 ACCOUNT RECEIVABLE -STAFF DEBTORS AND SUNDARY DEBTORS

Money is advanced to employees as travel advance only for approved business travel of GSA.

There are circumstances in which some activities require disbursement of money in advance to external third parties to access their services and/or to facilitate discharge of contract obligations.

Staff advances are monies advanced to staff of OSD. This includes salary advances and staff loans.

5.3 DEPOSIT AND PREPAYMENTS These refer to a sum of money paid in advance and may be reimbursable in the future. This is used particularly to account for money kept by service giving parties in a form of guarantee deposits, and office rent.

5.6.1 ON PREPAYMENT

Unexpired portions of prepaid expenses should be recognized and adjusted to a receivable account as at the end of the fiscal year.

5.6.2 ON FUND RECEIVABLE

Money of restricted funds should not be used for other fund expenditures.

INVENTORY COUNT SHEET -ANNEX 6.7

6.2.1.1 INTERNAL CONTROLS

Receipts of all donated/purchased materials should be filled in goods received notes and reported to accounts.

Materials should not be held for the user for more than a specific period. The user should be contacted to determine whether the goods should be put into stock or disposed off.

Each material issued from store should be properly documented and delivered to the appropriate final user.

Annual inventory taking and inventory certification should be carried out at least once in a year.

7. FIXED ASSETS

7.1 DEFINITION Fixed assets refer to tangible items of durable nature that could be usedin operation of the organization for more than one year. When such physical items are used in operations, their economic usefulness declines overtime (depreciation). OSD recognizes tangible items with the following characteristics as fixed assets:

That they have a value of Br 200.00 and above.

That they have an expected service life of more than one year.

GSA holds fixed assets in the form of vehicles, furniture, equipment, etc.

7.2 ACQUISITION OF FIXED ASSETS GSA acquires fixed assets through purchase for cash and/or donation in kind.

7.2.1 ACQUISITION BY PURCHASE Whenever fixed assets are purchased, the following procedures should be observed.

Requisition for purchase of assets must be approved by those in charge of the budget from which the asset is to be purchased subject to the set up authority limit.

The requisition should mention the funding sources, budget heading, and the amount budgeted.

Purchase of fixed assets should follow the general procurement procedures of OSD.

7.2.2 DONATION FIXED ASSETS In some cases, OSD acquires fixed assets by donation. Sometimes doors include the price of asset, i.e. the cost of the asset. At other times the cost of the asset is not indicated by the donors. In such case, the asset received should be recorded at fair market value.

7.3 PRINCIPLES OF RECORDING FIXED ASSETS

7.3.1 PRINCIPALS

Fixed assets are recorded in a manner that is consistent with OSDs accounting basis (i.e accrual basis) and reporting requirements

Depreciation of fixed assets of the organization is the partial value of the asset used during certain periods in attaining the goal or objectives of OSD.

A fixed asset register shall be maintained containing detailed information about fixed assets of the organization as a whole and shall be used periodically to reconcile the physical existence of the assets with the corresponding data.

7.3.2. Recording of fixed assets

There entry for purchase or donated assets is: Fixed assets

 (Dr.) ………………………..xxxxxxxxxxxx Cash/Bank/ donation (as appropriate

(Cr.)……… xxxxxxxxxxxxx

When the asset is to be returned to the donoer or given to beneficiaries: Expenditure

(Dr.) ………………………..xxxxxxxxxxxx Fixed assets

(Cr)………………………… xxxxxxxxxxxxx

8.3. INTERNAL CONTROLS

Income tax should be paid to the Inland Revenue authority within one month from the date of collection.

Payment of retention money should be made as per the agreement

Unclaimed salaries should be paid according to the payment procedures of the organization.

9. Fund balance

9.1 DEFINITION A fund is defined as the accumulated balance of the difference between the revenues received and expenditures incurred in an accounting period. It is a balance sheet item, i.e. total assets are equal to total liabilities plus fund balance. In the Revenue and Expenses statement, fund balance represents the difference of revenue and expenditures.

All revenues received are closed as follows:

In the case of restricted funds, the difference between the revenue received and the expenditure made is closed to a Funds payable Account when the revenue is greater than the expenditure (provided that the expenditure) is within the overall budget a provided and committed it will be closed to a Funds Receivable Account.

In the case of unrestricted funds, the difference between the revenue and expenditure is included in the fund balance.

In the case of contracts, the surplus ordeficit shallbe closedto the fund balance.

In the case of surplus/deficit from income generation activates,the difference shall be closed to the fund balance.

9.2 ACCOUNT RECORDING All expenditures should be closed to the respective revenue centers. The balance on each revenue center shall be closed to the fund balance account or if restricted to the fund payable or fund receivable as appropriate.

9.3 DOCUMENTATION There are no separate documents for the fund balance. However, the following books of original entry and project documents could serve as source documents for initiating any accounting action.

Ledger cards

Project Agreement

Project Budgets

9.4 INTERNAL CONTROLS

Deficits on restricted funds should be recorded in the funds receivable account and excesses should be recorded in the funds payable account at the end of each fiscal period

Restricted funds should not be spent in excess without prior approval of donors sources of funds should be reported properly to the controlling government agency

The spending of prior years fund balances should be approved for expenditure in the current year.

10. Revenue

10.1. DEFINITION OSD obtains funds from various through a fund raising activity which include writing proposals, operations of income generating activities and organizing public events. These sources of revenues are:-

Donor funds

Contributions and counterpart funds

Proceeds from sales of scrap (sundry income)

Contribution in kind properties, commodities, facilities materials etc.)

Contribution in free services (labor)

DONOR FUNDS These funds could be local or foreign. The donor funds might be classified into three major categories, i.e.

A. Grants: Awards from organizations or individuals are known, as grants. Restricted grants are often associated with one or more of the following conditions: i. Segregated fund accounting. ii. Funds are to be spent within specific time frames. iii. Unspent balances are returned to donors iv. Periodic line items financial reporting.

B. Contract: A contract is a legally binding agreement, where an organization agrees to provide the contracting organization with specified goods or services required in return for payment.

7.4 DISPOSAL OF FIXED ASSETS The procedures for disposal of fixed assets are:

Top management of GSA should be responsible for the deposal of any fixed assets

The person in charge of the asset should prepare a written proposal for the disposal of the asset which is no longer in use stating the condition of the asset and the approximate value.

The proposal is then approved by the top management of OSD and donor in the case of restricted fund and supervising department

Sales contract is prepared in duplicate. The original going to the buyer and the other copy to the accounting department.

On collection of the proceeds, the item sold is delivered

Invitation for tender should be floated through news papers or notices stating the surety money for tender deposit

7.5 DOCUMENTATION

In the case of assets acquired in cash/bank or credit, the documentation required are purchase requisition, budget, pro-forma invoices, goods receiving notes, payment vouchers. Etc.

When asset are acquired by donation, the documentation required is the agreement, gift certificate, the hand over document, and the goods receiving note.

7.6 FIXED ASSET REGISTER - ANNEX 7.1

A register of all fixed assets should be maintained for all assets under control of GSA. Fixed assets with value of more than Br. 200.00 and a life of more than one year should be recorded in the register.

The register should contain all assets physically existing. All fixed assets should be accounted for whether their value is reflected in the balance sheet or not

The register should contain the cost, location, employee responsible for the assets, data of acquisition. Etc.

 

8. LIABILITIES

8.1. DEFINITION Liabilities refer to obligations owed to third parties. In principle, this may involve both external parties (organization or individuals) as well as members of the organization, such as, employees. The commonest types of liabilities are income tax payable and unclaimed wages and salaries payable. In the balance sheet, these items are classified as current liabilities.

8.2 CURRENT LIABILITIES Current liabilities are money due within one year. They include:

Income tax payable this is tax withheld from the salaries of employees.

Unclaimed wages and salaries in some rare situations, some workers may not be present on pay days and the amount might be returned.

Sundry payable (liabilities originating from other sources).

Severance reserve this is a reserve for future severance payments.

Retention payable this is amount retained from the payment to contractors in accordance with the agreement to make good future defects in construction.

Provident fund.

CONTRIBUTIONS AND COUNTERPART FUNDS (IN CASH) A contribution is a donation from an organization or individual that meets all of the following criteria. i. No segregated fund accounting. ii. No requirement of a specific time frame for the expenditure of the funds. iii. No requirement to return unspent balance to donor. iv. No requirement for periodic line item financial reporting.

Contributions may be designated or undesignated. If they are designated, they may be earmarked for a certain area or for specific property within GSA. Contributions are also classified as untested funds.

PROCEEDS FROM SALES OF SCRAP ITEMS Such income comes from proceeds of sales of materials not needed for spare part and old/damaged items. In the case of items bought with restricted funds, GSA has to obtain a prior approval to sell as well as to the use of the proceeds of the sales. Under such cases, GSA has to be careful in the treatment of such income.

CONTRIBUTION IN KIND These donations include contribution in kind such as properties, commodities, materials, facilities, etc. The receipt and issue of such items is discussed under inventory management.

Contributions in free services Such donations are free voluntary services of human labor.

 

10.2 DOCUMENTATION

A. DONOR FUNDS In all cases GSA has to write a proposal including budget breakdowns for each donor. A file has to be opened containing. All correspondence and analysis of project proposal, revisions and management reports, etc.

B. SALES OF SCRAP ITEMS The documentation involved is minutes of the disposing committee, approval from donor, if any, cash receipts, etc.

10.3 RECORDING REVENUE TRANSACTIONS

A. Income in cash or kind is recognized on receipt and pledges of firm commitment. The accounting entries are: Cash/Bank/Receivable 

(Dr.)……………….XXXXXXXXXX Revenue 

(Cr.) ………………………..XXXXXXXXXX

B. For donation in kind, i.e material, facilities and voluntary services. The journal entries are: i. For donated Materials Expenditure (as appropriate)

 (Dr.) ……………….XXXXXXXXXX Revenue

(Cr.) ……………………………..XXXXXXXXXX ii. For donated free services Salary 

(Dr.) ………………………XXXXXXXXXX Revenue 

(Cr.) ………………………..XXXXXXXXXX iii. Donated facility (it could be building, equipment, etc.) Rent expense 

(Dr.) ……………………XXXXXXXXXX Revenue ………………………………XXXXXXXXXX

C. The recording of income generated is: Cash/Bank 

(Dr.) ………………………XXXXXXXXXX Income generated/ revenue center

(Cr.)………XXXXXXXXXX

D. For donated property, the journal entry is: Property Expense 

(Dr.) ……………………XXXXXXXXXX Revenue …………………………………XXXXXXXXXX

E. The recording of scrap sales is: Cash/Bank/ Receivable 

(Dr.) ………………………XXXXXXXXXX Revenue/Account Payable 

(Cr.) ………………………XXXXXXXXXX

 

10.4 INTERNAL CONTROLS Records should be maintained for all donations including the donor's name, amount, date and the compliance requirement.

A designated individual should be made responsible to follow up the implementation of the donations in accordance with donor's requirements:

General ledger accounts should be opened for each donor.

General ledger accounts should be opened for each income generating center.

Donated materials should be physically inspected.

Donated materials and facilities should be recorded at fair market value (when the acquisition of cost is not known)

Free voluntary services should be valued at fair market value and recorded in terms of money.

 

 

11. EXPENDITURES

11.1 DEFINITION Expenses are layouts of resources in the form of materials, labor, money, and services to achieve organization's goals. The goals could be either personnel benefits or revenue generations or humanitarian activates where returns are not expected. Expenditures are grossly classified as capital expenditures where assets are expected as a result of completion of a contract, and operating expenses where resources are consumed in the process of production of revenue generating activities or completely consumed as a result of free distribution as in the case of humanitarianly activities.

11.1.1 PROJECT EXPENDITURES Some schemes requiring concentrated efforts are isolated from other operations as projects and the expenditures made towards those ends are known as project expenditures.

11.1.2 KINDS OF EXPENDITURES Expenditures are regrouped and reclassified to facilitate meaningful interpretations of economic analysis and financial information for decision making. As inputs to any economic activity, expenses are classified as materials, labor and overhead expenses.

11.1.3 MANAGEMENT AND ADMINISTRATIVE EXPENSE

These are expenses incurred but in no way related to any particular project, operation or revenue generating activities. There expenditures are accumulated in general overhead accounts until year end and distributed to activity cost centers on a selected and meaningful ratio.

Administrative expense not exceed from 30% of the total expenditures of the current year and the remain 70% expenditure cover the project expenditure according to FDRE Charities and Societies Agency number 02/2003 article 08-14 .

11.2 RECORDING The recording of expense transactions are it deals with in the payment section of this manual.

11.3 INTERNAL CONTROLS

All expenses should be properly accumulated, classified and summarized

Expenses of previous year should be compared with current year's expense reports and evaluated for differences

Expenditures coding should be properly reviewed prior to recording

Expenditures should be effected from the related budgets and project funds

All expenses should be included in the year-end reports

11.4 PAYROLL MANAGEMENT AND LABOR EXPENSE

11.5.1 DEFINITION Payroll (Annex 11-2) is a spread sheet with lists of employees of GSA by cost centers who are entitled for pay with information concerning monthly payments due to them and deduction for a pay period (the period covered by salary payment is called a pay period). Employees are entitled to receive their salary at the end of a pay period in this respect; a payroll is prepared at the end of the pay period showing the earnings as well as the income tax and other deductions. All payroll taxes are based on the earnings of the employees. GSA is required by law to withhold certain payroll taxes from the salary paid to its employees. Errors in payroll records cause incorrect payment of the payroll taxes and this invites penalties. Due precaution should be exercised in the preparation of the payroll.

11.5.2 DOCUMENTATION

Payroll Register - Annex 11.2 The payroll register is described under item 12.5.1

Time sheet - Annex 11.3 The first requirement of an adequate payroll record system is an accurate record of the time each employee has worked. Though there are several methods of keeping time, GSA uses the time sheet approach. In this system, each employee is required to sign an attendances sheet each time he/she comes to the office.

11.5.3. PAYROLL ACCOUNTING

Checking and approving of payroll records should be undertaken by finance manager

The payroll is journalized as follows a. For permanent employees i. When payroll fund is maintained: Gross salary 

(Dr.)………………………XXXXXXXXXXXX Incometax

(Cr.)………………………XXXXXXXXXXXXX Other deductions

(Cr.)……………….XXXXXXXXXXXX Net salary payable

(Cr.)…………….XXXXXXXXXXXX ii. When cash is withdrawn from bank on account of salary: Payroll fund (Dr.)…………………… XXXXXXXXXXX Cash at Bank

(Cr.)………………………XXXXXXXXXXXXXX iii. When cash is paid to the employees: Net salary payable (Dr.) ……………… XXXXXXXXXXXXXX Payroll fund

(Cr.) ……………………… XXXXXXXXXXXXXX

b. When salary is directly paid in case Gross salary

(Dr.) ……………… ……XXXXXXXXXXXXX Income tax

(Cr.) …………………………XXXXXXXXXXXXX Other deductions

(Cr.) ………………… XXXXXXXXXXXXXX Bank

(Cr.) ……………… ………………XXXXXXXXXXXXXX

11.5.4. TERMINAL EMPLOYEES Terminated employees shall not wait for the payroll. They shall be stricken off the payroll form effective date of termination and their final payments are effected within seven working days from the date of presentation of fully signed clearance paper.

11.5.5. INTERNAL CONTROLS

Payroll preparation and payment functions should be segregated

Information like pay rate, allowance, and service charge, if any, should be made available to accounting unit at the time of employment

Payroll should be approved by the executive director or project manager or by their dual authorized representatives

Payment of salaries and wages should be made direct to employees or to their legal representatives

Unclaimed pays not paid out within one week from the effective payday must be deposited at bank and not used as for other purpose.

11.5.6. Premium rates When an employee is assigned to work temporarily outside of Addis Ababa area perdium will be paid to compensate for the amount of money Spent of hotel accommodation. The following categories of per diem rate payments shall be applied as follows;

per diem rate Br.500.00

12. Budget preparation and control

12.1 DEFINITION AND GENERAL DESCRIPTION Budget is a plan of operation based on the estimates often itemized, of expected income and expenses, for a given period of time: which could be prepared for one year or for multi-years.

12.2 BUDGET INFORMATION REQUIREMENT All departmental units and project offices have to prepare their budget requirements. Each unit has to define its objectives and the activities required for implementations. To carry out activities planned, each unit has to prepare a breakdown of the required materials, human resource, equipment and other services in quantity and value. To finance the planned activities, information on source of funds such as commitments, contributions in cash and in kind, free services, internal revenue generations, etc., are required.

12.3 NEED FOR LONG TERM BUDGET DOCUMENT Long-term project document is the base for preparing the multi-year project budgets. After the overall project budget is determined it is broken into individual financial year budget. The long-term forecasts are reviewed and revised to reflect current situations.

12.4 NEED FOR ANNUAL BUDGET Annual budgets are plans of operations for programs and services to be implemented in the following fiscal year (one year). The annual budgets are mainly required to control and monitor the annual revenues and expenditures.

12.5 ELEMENTS AND FORMS OF ANNUAL BUDGET The income and expenditure budget should include the expected income and expenditure by line items that are going to be received and incurred in the coming financial year. The elements of budget are: Budgeted Revenue, Operational Expenditure, and Capital Expenditure.

12.6 PREPARATION OF BUDGETS

Head of cost units or departments are responsible for preparing annual program of work and financial estimates of expenditures

The income budget is prepared by accounting unit using the most up-to-date information including membership contribution, grants and donations, internally generated income, sales of assets, etc.

All costs should ultimately be charged to project/ programs; those budget centers which are not project specific should be allocated or apportioned to project enters before finalizing the budget.

Proposals for new project/ program, major fluctuation in price, significant components and changes to existing projects may necessitate a budget revision. After preparation of the budget, a recommended revised budget should be sent to the donors at the earliest opportunity in order to obtain approval before implementation.

12.7 EXPECTED BUDGETARY TIME-TABLE The following is expected budgetary time table:

Each cost center or department should prepare and complete its budget and submit it to accounts for compilation one month before the end of the current accounting year.

The draft budget document should be completed and submitted to budget committee a month before the end of the current period.

The budget committee should approvable the budget two weeks before the end of the current period.

The approved budget should be communicated to the respective cost centers or Departments a week before the start of the new budget year.

12.8 BUDGETARY DISCIPLINE 5. The approved budget shall constitute the authorization to incur obligation up to the monetary limit of the budget. 6. No cost should be incurred unless approved in the budget. 7. There should be flow of budgetary information to budget implementers. 8. Interim review of budget executions should be made to prevent over and under expenditures for prior management action.

12.9 BUDGETS AS A MEASURE OF PERFORMANCE Budgets are prepared to achieve goals. To accomplish the goals, expenditures are incurred. These expenditures should be compared with the quantified performance so that budget could be used as measure of performance. The primary focus of the budget is on evaluation of the efficiency with which existing activities are being carried out.

12.10 REPORTING Quarterly cumulative comparative budget report should be prepared to indicate budget variances, i.e. comparing actual expenditure with plan. The reasons why variances occurred should be fully explained.

 

13. Financial Reporting

13.1. Definition and description Financial statements include: Balance sheet, Revenue and expenditures statement, cash flow statement and notes to accounts. Financial statements have specific, some of which are:

Serve as information sources to management and other authorities for planning and economic decisions.

Provide donors/users with information for predicting comparing and evaluating earning and spending power.

Judge management's ability to utilize resources effectively in achieving primary goals.

Serve as source of disclosure for underlying assumptions with respect to matters subject to interpretation, evaluation, prediction or estimation.

Financial statements play very important role. Therefore, they should meet the qualitative characteristics of relevance, understandability, reliability, verifiability, neutrality, timeliness, comparability and consistency.

13.2. TYPES OF REPORTS

13.2.1 BALANCE SHEET Balance sheet is a statement showing the financial position of the organization as at a specific date.

13.2.2 STATEMENT OF REVENUE AND EXPENDITURE The statement of revenue and expenditures shows the results of operation. The statement in the case of GSA should show the different program expenditures separately with sub-total, to which is added the administrative expenditures as separate line items. The details of revenues, each project expenditure and administrative expenses should be shown in the notes to the accounts.

13.2.3 CASH FLOW STATEMENT This statement shows the change in cash over a specified period of time. It is roughly the same with the income from operations plus depreciation, depletion and any other expenses that had no effect on working capital during the accounting period.

13.2.4 NOTES TO THE ACCOUNTS Notes to the accounts constitute an important part of the financial statements as they give the reads of the financial statements additional information detailing those contained in the balance sheet and statement of revenue and expenditures. They also include the accounting policies adopted by GSA.

13.2.5 MANAGEMENT REPORTS Management reports are reports produced monthly for management to enable them to take appropriate action. Such reports are also produced at the end of the fiscal period. Management reports include, bank reconciliation, status of cash and bank position. Physical verifications of fixed assets and any discrepancies between the recorded balances and physical counts, etc.

13.1 DOCUMENTATION There are no special formats for financial statements prepared for management.

13.2 SCHEDULES OF REPORTS

13.4.1 DATA FOR PRODUCTION OF DRAFT REPORT The financial reports stated above should be produced in draft form within one month after the end of the fiscal year.

13.4.2 DATA OF DELIVER OF FINANCIAL REPORTS TO THE EXTERNAL AUDITORS The financial statements should be reviewed by reviewed by management and submitted to the external auditors within 30 days after the draft is completed.

13.4.3 EXPECTED DATA FOR RECEIVING EXTERNAL AUDIT REPORT This depends on the size of the organization and the type of audit approach. In any case, the audit report even for a large organization should be expected within 2 weeks after the draft reports are handed over to the auditors.

14. Organizational of the financial division of GSA

14.1 Organization Structure Board Member shall be appointed in the meeting of the General Assembly. Generally speaking Board Member shall, formulate GSA Business/work plan; oversee activities/ operations; preserve the very the very existence of the company; determine remuneration of the manager & come up with revision of remuneration. Reporting to the Board Members, the manager shall impalement the business/work plan to be issued by such members; device a submit mechanism for fund raising activates deemed necessary for the company. In consultation with the program officer, to the Board for the latter's approval; manage personnel/employees of the company in line with the Labor Code in force. Reporting to the Manager, the company's secretary shall perform any duties assigned by the manager; keep confidential matters of the company.

The company shall be audited by external auditor in accordance with the rules as announced by the FDRE Charities and Societies Agency from time to time. Audit firm shall be designated by the Board Members.

ACCOUNTS DEFINITION Is the order of Accounts in the ledger. It should agree with the order of the Balance Sheet and Income Statement.

CHART OF ACCOUNTS The Accounting software (OSD's) chart of Accounts is structured as follows: The Chart of Accounts is given as Annex 15.1 to this manual.

Scheme 0-00-00 The main General ledger Account group Separator (space)

 

 

Organization for Social Development

Anti-Fraud Policy

 

 

 

 

Addis Ababa, Ethiopia

2024 

INTRODUCTION

Organization for Social Development is committed to ethical behavior and values. It is amongst its first priorities to establish a working culture that enhances the value of ethics and promote the individual responsibility as well. To this effect, the Organization has established a Code of Conduct and Ethics, a Code of Conduct and Ethics for the Organization's Officers and Director and an Ethics and Compliance Policy, which set the highest standards for personnel conduct related to ethical behavior and alertness.  The cornerstone in preventing fraud is the creation of an environment that fosters morality, integrity and business conduct.  FRAUD DEFINITION

Fraud can be defined as: "Any illegal acts characterized by deceit, concealment, or violation of trust."  These acts are not dependent upon the application or threat of violence or of physical force. Fraud is perpetrated by parties and organizations to obtain money, property, or services; to avoid payment or loss of services; or to secure personal or business advantage.  Fraud may involve:falsification or alteration of accounting records  misappropriation of assets or theft  suppression or omission of the effects of transactions from records or recording of transactions without substance  intentional misapplication of accounting policies or willful misrepresentation of transactions or of the entity's state of affairs  misapplying corporate or bank funds  Fraud may also involve manipulation of information system applications and data for personal advantage.  PURPOSE & SCOPE

The purpose of this document is to outline the responsibilities of all the involved parties with respect to fraud prevention, the actions to be taken if fraud is suspected and the mechanism of verifying suspicion of fraud, the reporting process and the recovery action plan.  RESPONSIBILITIESAUDIT COMMITTEE

The Committee's duties and responsibilities are included in its Charter and included herein by reference.  The Audit Committee should ensure that the Organization has put in practice an effective ethics and compliance program and is currently derived and defined by the relevant policy codes referred to herein. It should be stressed that fraud has been, frequently, attributed to the weaknesses or override of the internal controls. Therefore, the Audit Committee plays an important role by ensuring that the Organization has identified the key risk areas and internal controls adequately address and mitigate those risks.  OFFICERS AND KEY PERSONNEL

The management personnel of the Organization constitute the front line of monitoring and preventing fraud. Managers are responsible to monitor the activities of employees and be aware of and alert to potential signs of fraud.  Management is accountable to "set the tone at the top", point out the risks to which the operations and the systems are exposed, establish an effective system of Internal Controls, Governance and Risk Management process, and follow up systematically on the implementation of the organization's procedures and policies.  STAFF

Staff is responsible to act at all times with the highest degree of honesty, integrity, accountability, and propriety. Staff should conduct their duties in a manner that does not jeopardize, to the contrary, safeguards the Organization's resources and assets. Staff shall comply with the Company's Code of Conduct and Ethics, and the Code of Conduct and Ethics for Organization's Officers and Director. If fraud, violation, unethical conduct or dishonest practice is suspected and/or verified, then it should be reported through the "Ethics and Compliance" Link and provide any required information during the investigation process.  INTERNAL AUDITOR

"The Internal Auditor should have sufficient knowledge to identify the indicators of fraud but is not expected to have the capacity of a person whose primary responsibility is detecting and mitigating fraud."  The Internal Auditor is responsible to evaluate the adequacy of the internal control system, prioritize auditing activities in accordance with a documented risk assessment plan, and provide recommendations, through consulting and assurance activities.  FRAUD RESPONSE PLAN

The fraud response plan is a guide to follow in the event of fraud being discovered or suspected. Its purpose is to ensure that proper action is taken in case of fraud.  Any allegations of fraud, theft or other irregularity should be reported via the Ethics and Compliance link on the web site of the Company.  All allegations are reported anonymously, are treated as confidential and are directed to the Audit Committee, which will undertake any further investigation.  The Audit Committee is responsible to retain any relevant records, examine the allegations, and plan the investigation and deterrence of fraud. Deterrence of fraud lies with management. The Audit Committee will appoint a suitable person, internal or external, to investigate and ensure, that the investigation is conducted in a professional manner. The Audit Committee and the management are responsible to secure the anonymity and prevent the harassment or discrimination of the people that make such allegations.  The results of the investigation should be reported directly to the Audit Committee, which will determine to whom should be communicated, including the Internal Auditor, and the executive director. Upon conclusion of the investigation, an action plan should be agreed, enforced, documented, and distributed appropriately.  All records and reports of the investigation process should be under the custody of the Audit Committee, retained in a safe place with restricted access in the Organization headquarter.  The Internal Auditor should be periodically informed of the progress and the final conclusions of any such investigation.  DISCIPLINARY/LEGAL ACTION

Proven fraud or suspected fraud which comes to light, whether perpetrated by a member of staff or by persons external to the organization, should be referred to the appropriate authorities, internally or externally, at the earliest possible opportunity.  PERSONAL CONDUCT

The personal conduct is governed by the Code of Conduct and Ethics, the Code of Conduct and Ethics for Organization's Officers and Director and the Ethics and Compliance Policy.  FRAUD DETECTION / ETHICS & COMPLIANCE POLICY

Staff should be alert to the possibility that unusual events or transactions could be symptoms of fraud or attempted fraud. An "Ethics and Compliance" policy is in place and enables the reporting of fraud or other illegal actions. The "Ethics and Compliance" policy shall ensure that all employees have free access to which unbiased judgment is addressed and anonymity and confidentiality are maintained.  All the Board members have discussed on every topics of this document and agreed the organization shall be governed by  Name / Signature  Saloman Girma  Kulsar  Abera Woude  Nebiyat Meseret  Sinayet Terelu  Tlbrihan  Wondellos Ayalw

 

               ORGANIZATION FOR SOCIAL DEVELOPMENT (OSD)

                MONITORING AND EVALUATION GUIDELINE

 

 

 

 

 

 

Addis Ababa, Ethiopia

August 2025

 

Introduction 3

 

The guide and its applicability 4

 

Purpose of the Guideline 4

 

The objective of the guideline 5

 

Monitoring and Evaluation 6

 

Types of Monitoring and Evaluation 7

6.1. Types of monitoring 7

6.1.1. Process monitoring/ physical progress monitoring 7

6.1.2. Technical monitoring 7

6.1.3. Assumption monitoring 8

6.1.4. Financial Monitoring 8

6.1.5. Impact Monitoring 8

6.2. Types of evaluation 9

6.2.1. Formative evaluation 9

6.2.2. Summative evaluation 9

 

Principles underlying Monitoring and Evaluation 10

 

Monitoring and evaluation hierarchy 11

 

Monitoring and Evaluation Framework 12

9.1. Results Framework 13

9.2. Logical Framework (LFA) 14

 

Monitoring and evaluation management 15

10.1. Monitoring and evaluation planning 15

 

Data Quality Assurance 16

11.2. Responsibilities 17

 

Monitoring and Evaluation Reporting 19

12.1 Programme Performance Reports 19

12.2. Completion Reports 20

12.3. Organization Evaluation Report 20

12.4. Donor Report 20

12.5. Government Report 20

12.6. Knowledge Management and Organizational Learning 21

Glossary 22

References 23

Annex 23

 

Acronyms

KPIs - key performance indicators

LFA - Logical Framework Approach

M&E - Monitoring and Evaluation

PPRs - Program Performance Report

RF - Result Framework

CER - Corporate Evaluation Report

DQA - Data Quality Assurance

 

Introduction

Organization for Social Development (OSD) is an Ethiopian residents' charity that is non-governmental non-for profit and non-partisan organization, founded in 2003. OSD is geared towards maximizing the private sector’s involvement in social development by promoting the concept of Corporate Social Responsibilities (CSR). OSD believes the private sector can play a vital role in the improvement and eradication of social dilemmas including, but not limited to, shortage of basic education and health services, environmental degradation, and lack of quality goods and services provision. OSD seeks to enhance the interest of the private sector to collaborate with governmental and civic society organizations and actively participate in developmental initiatives for the realization of improved societal living standards. OSD puts the poor and vulnerable groups of the society (such as Women, Children and Disabled), employees of the business enterprise and surrounding communities as ultimate beneficiaries of its overall operations.

 

OSD Monitoring and Evaluation (M&E) Manual sets out the details and provides guidance on the monitoring system to establish the progress in achieving results defined in the organization Strategic Plan as Well as all the program and projects.

 

A fully functioning Monitoring and Evaluation system provides a continuous flow of information that is useful, both internally and externally, to measure the progress being made towards the achievement of expected results, which reflect the desired outcomes to be achieved by the organization. The associated key performance indicators (KPIs) are the agreed measurements that will enable OSD as an organization, to assess the achievement of the expected results.

 

Achieving expected results is a complex process involving coordinated efforts of the main OSD components (Staffs, managements and the Board) and national and international funding institutions as well the government agencies.

 

Internally, within the organization, M&E information is a crucial management tool towards achieving results and meeting specific targets. Information on progress, problems and performance are all central to the organizational success. Information is also important for organizational learning, improvement and to build stronger external relations, as well as to identifying other worthwhile activities to allocate scarce resources.

 

Monitoring and Evaluation provides critical information and empowers the staffs as well management team and the Board members to make better, more informed decisions. At the same time, providing such information may ensure consistent focus on efforts to achieve objectives of an organization.

 

Overall, each programs and projects will have their own M&E planning based on this monitoring and Evaluation guideline.

 

The guide and its applicability

This manual is not intended to serve as a mandatory, “one size fits all” instruction booklet for program and or project monitoring and evaluation. Rather, it offers a set of concepts and tools that will assist individual OSD program and administration staff and stakeholders, to improve current approaches to M&E, thereby facilitating more consistent achievement of the organization strategic objectives.

 

This guide is a step-by-step process of using the proposed M&E Plan. It is expected that it will be used in different ways by different program interventions and at different stages of the strategy development and implementation process. However, it is very important to involve stakeholders and partners in each specific programme.

 

The guide puts emphasis on the use of the Results Framework and Logical framework approaches, which is meant to be simple and straight forward in design and, therefore, it does not require specialized skills. It is a systemic approach to documenting the logic of a strategy and its subsequent management, monitoring and performance measurement to ensure that the intended results have been achieved.

 

This Guide is applicable for all those people who have specific yet different M&E related responsibilities and tasks within the scope of OSD. This makes it possible for the users to focus on the material that is relevant for their needs at a particular point in time.

 

Purpose of the Guideline

This Monitoring and Evaluation guideline describes a proposed M&E system for OSD Program. This system addresses three interrelated purposes. Firstly, the M&E system supports the organization and its staffs as well stakeholders to learn from change. This includes:

 

Allows the organizations to work more effectively and efficiently towards achieving the organizations strategic and programme/projects goals and objectives.

 

It is a communication tool that outlines various roles and responsibilities regarding monitoring and evaluation for a project or organization?

 

Organizes plans for data collection, analysis, use, and data quality.

 

It outlines specific strategies and tools to encourage informed decision making.

 

Organizes the numerous M&E activities that must take place in order for M&E to be truly successful in our places or work.

 

Engages a wider body of people in an organization so that M&E is integrated into part of everyone’s’ job.

 

Secondly, this M&E system serves the accountability needs of key stakeholders, especially the project beneficiaries, and government agencies and donors by documenting and demonstrating how OSD has contributed to its intended outcomes in the short, medium and long-term.

 

Thirdly, and of no less importance, is the critical transformative role of M&E in Organization for Social Development.

 

OSD is explicitly designs its M&E system to contribute to the empowerment of Ethiopian Women, Youth and children. This strongly implies a participatory orientation that provides the space for children and youths to decide which change is important and to be actively involved in monitoring, reflecting on, and taking action on the basis of such change.

 

The objective of the guideline

The objectives of this manual are to provide the user (the organization staff, management, board and partners) with:

 

A basic understanding of the purposes, processes, norms, standards and guiding principles for planning, monitoring and evaluation with the OSD context.

 

Knowledge of the essential elements of the planning and monitoring and processes in OSD, i.e developing a robust results framework for projects and programmes, with clear indicators, baselines and targets; and setting up an effective monitoring system.

 

Knowledge of the essential elements of the evaluation process in OSD: developing an evaluation plan, managing, designing and conducting quality evaluations, and using evaluation to develop intervention programmes.

 

To enhance an opportunity for stakeholders to provide feedbacks

 

To enhance the results-based culture within OSD staff and improve the quality of planning, monitoring and evaluation of the organizations projects and programmes.

 

Monitoring and Evaluation

5.1 Monitoring: It is a continuous assessment that aims at providing all stakeholders with early detailed information on the progress or delay of the ongoing assessed activities. It is an oversight of the activity's implementation stage. Its purpose is to determine if the outputs, deliveries and schedules planned have been reached so that action can be taken to correct the deficiencies as quickly as possible.

 

Good planning combined with effective monitoring can play a major role in enhancing the effectiveness of development programs and projects. Good planning helps focus on the results that matter, while monitoring help the organization learn from past successes and challenges and inform decision making so that current and future initiatives are better able to improve people’s lives and expand their choices.

 

5.2 Evaluation: It is a systematic and objective examination concerning the relevance, effectiveness, efficiency and impact of activities in the light of specified objectives. The idea in evaluating projects is to isolate errors not to repeat them and to underline and promote the successful mechanisms for current and future projects.

 

An important goal of evaluation is to provide recommendations and lessons to the project managers and implementation teams that have worked on the projects and for the ones that will implement and work on similar projects.

 

Evaluations are also indirectly a means to report to the donors and policy makers about the activities implemented. It is a means to verify that the donated funds are being well managed and transparently spent. The evaluators are supposed to check and analyze the budget lines and to report the findings in their work.

 

Ultimately, M&E systems are designed to determine the impact of projects and/ or programs. However, it also entails a regular, systematic collection and analysis of information to track the progress of Project/program implementation. In order to do so, monitoring and evaluation must be understood as an ongoing activity that ultimately confirms and explains the nature and degree of change a particular development intervention has had on its population.

 

Types of Monitoring and Evaluation

6.1. Types of monitoring

6.1.1. Process monitoring/ physical progress monitoring

In process monitoring, routine data is collected and analyzed in order to establish whether the project tasks and activities are leading towards the intended project results. It authenticates the progress of the project towards the intended results. This kind of monitoring measures the inputs, activities and outputs. In other words, process monitoring answers the questions “what has been done so far, where, when and how has it been done?” Most of the data collected during project implementation usually serves this kind of monitoring.

 

6.1.2. Technical monitoring

Technical monitoring involves assessing the strategy that is being used in project implementation to establish whether it is achieving the required results. It involves the technical aspects of the project such as the activities to be conducted. In a safe water project for example, physical progress monitoring may show that there is little or no uptake of chlorination as a water treatment strategy. Technical monitoring may establish that this could be a result of installing chlorine dispensers at the water source and women are too time constrained that they have no time to line up to get chlorine from the dispensers. This may prompt a change of strategy where the project might opt for household distribution of bottled chlorine.

 

6.1.3. Assumption monitoring

Any project has its working assumptions which have to be clearly outlined in the project log frame. These assumptions are those factors which might determine project success or failure, but which the project has no control over. Assumption monitoring involves measuring these factors which are external to the project. It is important to carry out assumption monitoring as it may help to explain success or failure of a project. For example, a project that was promoting the use of contraceptives may realize that uptake of use of contraceptives has dropped. The drop in use of the contraceptive could however, be attributed to increased taxation on the importation of contraceptives in the country which makes them more expensive, rather than on project failure.

 

6.1.4. Financial Monitoring

Just like the name suggests, financial monitoring simply refers to monitoring program/project expenditure and comparing them with the budgets prepared at the planning stage. The use of funds at the disposal of a program/project is crucial for ensuring there are no excesses or wastages. Financial monitoring is also important for accountability and reporting purposes, as well as for measuring financial efficiency (the maximization of outputs with minimal inputs).

 

6.1.5. Impact Monitoring

Impact monitoring is a type of monitoring which continually assesses the impact of project activities to the target population. Indeed, impacts are usually the long-term effects of a project. However, for projects with a long-life span or programs (programs have no defined timelines) there emerges a need for measuring impact change in order show whether the general conditions of the intended beneficiaries are improving or otherwise. In this case, the director monitors impact through the pre-determined set of impact indicators. Monitoring both the positive and negative impacts, intended and un-intended impacts of the project/program becomes imperative.

 

6.2. Types of evaluation

6.2.1. Formative evaluation

Formative evaluation is generally any evaluation that takes place before or during a project’s implementation with the aim of improving the project’s design and performance.

 

Formative evaluation complements summative evaluation and is essential for trying to understand why a program works or doesn’t, and what other factors (internal and external) are at work during a project’s life.

 

Formative evaluation does require time and money and this may be a barrier to undertaking it, but it should be viewed as a valuable investment that improves the likelihood of achieving a successful outcome through better program design.

 

Common types of formative evaluation:

 

Needs assessment determines who needs the program, how great the need is, and what might work to meet the need.

 

Structured conceptualization helps stakeholders define the program, the target population, and the possible outcomes.

 

Implementation evaluation monitors the fidelity of the program delivery.

 

Process evaluation investigates the process of delivering the program, including alternative delivery procedures.

 

Formative evaluation often lends itself to qualitative methods on inquiry. The questions asked in formative evaluation are generally more open and lead to exploration of process, both from the viewpoint of participants, but also from that of project staff and other stakeholders. The use of participatory evaluation is particularly relevant and appropriate to formative evaluation.

 

6.2.2. Summative evaluation

Summative evaluation occurs at the end of a program cycle and provides an overall description of program effectiveness. Summative evaluation examines program outcomes to determine overall program effectiveness. Summative evaluation is a method for answering some of the following questions:

 

Were your program/project objectives met?

 

Will you need to improve and modify the overall structure of the program/project?

 

What is the overall impact of the program/project?

 

What resources will you need to address the program’s/project’s weaknesses?

 

Summative evaluation will enable you to make decisions regarding specific services and the future direction of the program/project that cannot be made during the middle of a program/project cycle. Summative evaluations should be provided to funders and constituents with an interest in the program/project.

 

Common types of summative evaluation:

 

Goal-based evaluation determines if the intended goals of a program/project were achieved. Has the program/project accomplished its goals?

 

Outcome evaluation investigates whether the program/project caused demonstrable effects on specifically defined target outcomes. What effect does program/project participation have on students?

 

Impact evaluation is broader and assesses the overall or net effects — intended or unintended of the program/project. What impact does this program/project have on the larger organization (e.g., high school or college), community, or system?

 

Cost-effectiveness and cost-benefit analysis address questions of efficiency by standardizing outcomes in terms of their dollar costs and values. How efficient is my program/project with respect to cost?

 

Principles underlying Monitoring and Evaluation

The M&E system of OSD described in this document is developed to be consistent with the following principles put forward in the program design:

 

Outcomes and process focused: M&E focuses on the quality of implementation processes carried out, and equally on what outcomes have occurred as a result of these activities. Outcomes can be positive or negative, expected or unexpected.

 

Gender equality: actively assess how the practical and strategic needs and opportunities of men and women Boy and Girls have been affected - Monitoring and evaluation will examine how inequalities identified have been addressed and what impact they have had on the status of women and the freedom women have to meet their needs and those of their families.

 

Gives voice to those most marginalized: The M&E system will actively create opportunities for the perspective of the most marginalized (e.g. women and girl children and people with disabilities) to be communicated directly to both internal and external decision makers. This has been addressed though the inclusion of participatory monitoring techniques.

 

Look for the unexpected as well as expected outcomes: Changes in the organization and or/stakeholders design and implementation of its activities are expected as they learn about what works and does not work, and as changes occur in the context. The M&E should be sufficiently flexible to adapt to these changes.

 

A user-focused orientation: The M&E system has been structured to provide the right information in the right format on the right time, to key stakeholders when they need it. The M&E system should ensure that stakeholders can provide comment and voice any complaints about the organization’s works.

 

Participatory Approach: all stakeholders should be engaged in the M&E process.

 

Learning-by-doing: OSD’s M&E Plan takes a practical ‘learning-by-doing’ approach to support the organization. M&E is a process of producing the outputs more efficiently by the organization as time goes on by acquiring, understanding and adopting new approach properly to augment impact.

 

In each M&E process the organization learns from everything it does. When the organization conduct M&E it brings new approach as well as new strategy use an input for the upcoming program/project designing phase.

 

Monitoring and evaluation hierarchy

Every program/project design employs a hierarchy of basic elements known as: inputs, process, outputs, outcomes, and impacts. These elements of program/project design are also components of a logical framework and a result-based framework.

 

Figure 1 M&E hierarchy

Contribute | Achieve | Deliver | Do | Use

INPUT -> PROCESS -> OUTPUT -> OUTCOME -> IMPACT

 

Inputs: the human, financial, material and other resources expended in undertaking the activities.

 

Process/Activities: the things that need to be done to achieve outputs.

 

Outputs: the major results needed to achieve the outcomes.

 

Outcomes: the long-term benefits, intended or unintended. These can be relatively short-term (e.g during a project life, commonly referred to them as project purpose or objective) or long term, commonly referred to as goal or long-term objectives.

 

Impacts: the result of achieving specific outcomes, such as improving learner performance.

 

Monitoring and Evaluation Framework

Monitoring and evaluation systems for program/projects exist in a “real world” context where external factors such as national and international policies, climate, markets, and governance are dynamic and affect the communities and target populations in which programs operate. Local conditions such as politics, infrastructure, and services can also affect programs and their target groups. Monitoring these changing conditions is necessary for program effectiveness and assessment of project impact.

 

A conceptual framework, influencing factors such as risks, behaviors and subsequent program activities can be rationally visualized within a particular local context. Importantly for the purpose of this manual, the primary hierarchical elements of an M&E system can be attached to the framework in order to retain a conceptual view of the “big picture” of the program/project and its goals. The adoption of an appropriate conceptual framework is particularly crucial in the initial stages of the project lifecycle in order to inform project design, budgeting, implementation strategies and approaches to project evaluation.

 

9.1. Results Framework

Organization for Social Development’s result-based framework is applied to monitor projects/programmes during implementation (with a view to taking corrective action) or to assess the results, or even the design of the completed projects. OSD addresses several long-standing criticism of capacity development work, including the lack of clear definitions, coherent conceptual frameworks, and effective monitoring of results. It also promotes a common, systematic approach to capacity development by clarifying objectives, assess prevailing capacity factors, identify appropriate agents of change and change processes, and guide the design of effective learning activities. The framework addresses a gap often found between broad overall objectives and specific learning activities. The framework requires a defined set of variables to any developmental goal in a given context, and to model explicitly the change process that is expected to be facilitated by learning.

 

Table 1: Result Framework (RF)

 

Level | Statement of results | Indicator(s) | Data sources | Timeframe for data collection | Assumptions and Risks

 

Goal /Impact

 

Outcome 1.

 

Output 1.1

 

Output 1.2

 

Output 1.3

 

Outcome 2

 

Output 2.1

 

Output 2.2

 

9.2. Logical Framework (LFA)

LFA Is a management tool for effective planning and implementation of developmental program/projects. It provides clear, concise and systematic information about a project through a framework. We know about various components of a project such as goal, objectives, activities, results and indicators. The LFA helps in connecting all these components in one framework, presenting the tight relationship between them, leading to the achievement of the expected outcomes. LFA also gives a clear outlay of how much resources would be needed and how these will be used for various project activities. The logical framework also aids in the monitoring and evaluation of projects. The framework can be used to examine the progress of the project and co-relate the activities carried out and results achieved.

 

Table 2: Logical Framework Matrix

 

Project Description | Indicators | Source of Verification | Assumptions and Risks

 

Goal (Longer term program/program impact): What external factors to sustain/affect the objective in the long run?

 

Purpose (what are the intended immediate effects of the program/program impact): What external factors are necessarily if the purpose to contribute to the achievements of the goal

 

Outputs (what outputs/ deliverables are to be produced in order to achieve the purpose)

 

Activities (what activities must be achieved to accomplish the output)

 

Monitoring and evaluation management

10.1. Monitoring and evaluation planning

Monitoring and evaluation plans should be created after the planning phase and before the design phase of a programme/project or intervention. The plan should include information on how the programme or intervention will be examined and assessed.

 

The plan outlines the key evaluations and the detailed monitoring questions that help answer the evaluation questions. This allows OSD to identify the information that is needed to collect and how it is collected. Depending on the detail of the M&E plan, the organization can identify the people responsible for different tasks. The plan should be able to be picked up by anyone involved in the project at any time and be clear as to what is happening in terms of monitoring and evaluation.

 

Generally, the monitoring and evaluation plan should outline:

 

The underlying assumptions on which the achievement of programme/project goals depend;

 

The anticipated relationships between activities, outputs, and outcomes (the framework);

 

Well-defined conceptual measures and definitions, along with baseline data;

 

The monitoring schedule;

 

A list of data sources to be used;

 

Cost estimates for the monitoring and evaluation activities;

 

A list of the partnerships and collaborations that will help achieve the desired results; and

 

A plan for the dissemination and utilization of the information gained.

 

Data Quality Assurance

Data quality refers to a case whereby data that is collected for program/project purposes is sufficient, accurate, reliable, valid and acceptable. It is the ability of data to serve the purposes for which it was gathered. If data does not meet either of these criteria, then it may not be referred to as quality data. Therefore, all the data gathered by the program/administration staffs assured based on the ideas reflected above.

 

Indeed, by the very nature of its definition, data quality is quite relative and subjective. While one may view data to be quality, the other might think otherwise. In this case, building consensus about the quality of data within the OSD context is critical. Nevertheless, it is possible that an organization establishes standards that can therefore be used to determine acceptable quality.

 

In the context of OSD, the following tools are used to collect data to ensure the quality of program/project performance:

 

Periodic reporting formats

 

Checklist

 

Questioner

 

Field visit reporting format

 

Project management soft ware

 

ICT based technologies

 

Case reporting format

 

Minutes

 

Feedback format

 

TORs

 

11.1. Reviewing the data

M&E data is reviewed by Monitoring and Evaluation section focusing primarily for quality assurance purposes periodically.

 

OSD has diverse programs/projects which are implementing within the targeted areas. Based on its performance, OSD reviews the collected data based on the following points:

 

Accuracy/validity: Valid data are considered accurate. They measure what they are intended to measure.

 

Reliability: The data are measured and collected consistently (the same way with the same data collection instruments) over time.

 

Completeness: Completely inclusive: an information system represents the complete list of eligible names and not a fraction of the list.

 

Precision: The data have sufficient detail (e.g. collected by sex, age, etc.)

 

Timeliness: Data are op-to-date (current), and information is available on time.

 

Integrity: The data are protected from deliberate bias or manipulation for political or personal reasons.

 

Confidentiality: Clients are assured that their data will be maintained according to national and/or international standards for data.

 

Complete: Without complete data, it difficult to rely on its results. Enormous missing data in a dataset is the surest way to conclude that the dataset is of poor quality.

 

Beneficial (useful): If data is not useful, then it probably is of poor quality. Data must serve the purpose for which it was collected, otherwise it is irrelevant. In other words, how beneficial the data is, is a good sign of its quality.

 

Acceptable: Again, if data is inacceptable by all the stakeholders, then that is a good sign that it is not quality. Data can only be quality if it is acceptable by all those who wish to use it. Yet again, it might be difficult to wholly agree on the quality based on this dimension, a certain level of acceptability may suffice.

 

11.2. Responsibilities

OSD has a shared system of role and responsibilities to ensure the quality of M&E planning, data collection, reporting and overall management of the M&E system. All the staffs working in the organization and individual in the governance structure are responsible to measure the program/project success and as well as gaps. Particularly, the following individuals are responsible to take-over the M&E management tasks:

 

Executive Director

The Office of the Executive Director provides overall direction, leadership and management of the organization. The director office roles and responsibilities are the following:

 

The executive Director engages in planning, reviewing, analyzing and feedback of the data

 

The executive Director provides direction and leadership to ensure the quality of M&E information.

 

Monitoring and Evaluation unit

The Monitoring and Evaluation unit acts as the custodian of the monitoring and evaluation functions. The section’s roles and responsibilities are the following:

 

Oversees the application of the monitoring and evaluation activities, identifies constraints and makes recommendations for updating the requirements or other elements of the framework.

 

Provide technical support and facilitates regular interaction with head and field office staffs to ensure quality M&E information.

 

Conduct periodic M&E assessment and engages in critical and analytical reflection as well as issues recommendations to management for compliance with the framework;

 

Undertake review and promotes standards for monitoring and evaluation data quality assurance;

 

Program Management section

Programme management section is the following responsibilities:

 

Undertakes monitoring and evaluation activities across all programs in accordance with the M&E guideline to ensure the quality of data.

 

Undertake regular follow-up across programs to ensure the availability of quality of data.

 

To ensure the availability of quality data, in terms of reporting, documentation and data utilization.

 

Review the program/project performance report in line with financial performance.

 

Engage stakeholders at all program/project level to ensure the quality of data.

 

Finance Management section

 

To make sure that the data collected from program/projects is in compatible with the financial report.

 

Provide accounting and financial guidance to all staffs and monitor all procedural issues are respected.

 

Table 3. Monitoring and Evaluation schedule

 

Person Responsible | Activity | Where | Frequency | When (Start date, End date) | Remark

 

Monitoring and Evaluation Reporting.

Results from the organization monitoring and evaluation workouts are to be recorded based on the following standard formats: programme performance reports, financial report, completion reports, corporate evaluation reports and self-evaluation reviews. Other types of reporting formats such as inception reports, monthly report, mid-term reports, annual reports, impact evaluation reports, etc. are used by OSD.

 

12.1 Programme Performance Reports

Programme Performance Reports record programme performance based on expected accomplishments, indicators of achievement and performance measures, as recorded in results-based activities

 

 

 

 

Organization for Social Development (OSD)

Organizational Safeguarding Policy

 

 

 

 

 

 

 

 

Addis Ababa, Ethiopia 

2023

 

 

Organizational Safeguarding Policy

Field

Details

Policy Title

Organizational Safeguarding Policy

Owner

Organization for Social Development (OSD)

Date Issued

September 2023

Policy Objective

Organization for Social Development has commitment to protection children, women and people with disability from abuse and sexual exploitation.

Other Related Policies

Code of Conduct

Policy Introduction

Background

Organization For Social Development program is committed to improve the lives of children, women and people with disability both in humanitarian and development sectors draw upon the principles outlined in international and regional human right instruments. There are various provisions in the Federal Democratic Republic of Ethiopia Constitution, and other subsidiary laws that stipulate legal protection for Children, women and people with disability.

To achieve successful result, humanitarian and development efforts require a very clear understanding of the role and responsibilities towards the care and protection of children, women and people with disability who are in contact with this section of the community directly or indirectly.

Organization for Social Development has developed this policy adapting global and national Children, women and people with disability Safeguarding Policy and Protocol documents.

Purpose of this Policy

To safeguard children, women and people with disability: Minimize the risk of children, women and people with disability from abuse and exploitation.

To safeguard agency representatives: All representatives will be clear about how they are expected to behave with children, women and people with disability and what to do if there are concerns about the safety of the child, women and people with disability.

To safeguard the organization: The organization make clear its commitment to keep children, women and people with disability safe and moves towards best practice.

Policy Statement

Children, women and people with disability who come into contact with Organization for Social Development representatives are safeguarded to the maximum extent from abuse and sexual exploitation.

Everyone associated with Organization for Social Development must be fully aware of the problem and risks of children, women and people with disability abuse and sexual exploitation.

All representatives of Organization for Social Development must demonstrate the highest standards of behavior towards children, women and people with disability both in their private and professional lives. They must not abuse the position of trust that comes with being a part of Organization for Social Development family. They must do all that they can to prevent, report and respond appropriately to such issues.

The Policy includes mandatory requirements that apply to everyone in all aspects of Organization for Social Development’s work whether in advocacy and campaigns, development programs or humanitarian and emergency responses.

Organization for Social Development has a zero tolerance approach to children, women and people with disability abuse and sexual exploitation by staff, partners and others who represent us.

All suspicions and allegations of abuse and exploitation will be taken seriously and responded to swiftly and appropriately as per the local procedure.

Organization for Social Development recognizes:

All children, women and people with disability are equal irrespective of their age, race, color, sex, language, religious, political, or other opinion, national, ethnic, or social origin, property, disability, birth or other status.

All children, women and people with disability have the right to freedom from abuse and exploitation.

All children, women and people with disability abuse involve the abuse of human rights.

"Rules of Staff"

Staff, representatives and staff of partner agencies, interns, or volunteers must never:

Hit or otherwise physically assault or physically abuse children, women and people with disability;

Engage in any sexual activity or have a sexual relationship, with anyone under 18 years of age, regardless of the age of consent locally. Mistaken belief in the age of the child is not a defense;

Develop relationships with children which could in any way be deemed exploitative or abusive;

Act in ways that may be abusive or may place a child, women and people with disability at risk of abuse;

Use language, make suggestions or offer advice which is inappropriate, offensive or abusive;

Behave physically in a way that is inappropriate or sexually provocative;

Have a child/children with whom they are working to stay overnight at their home unsupervised unless exceptional circumstances apply and previous permission has been obtained from a their line manager;

Sleep in the same bed as a child, woman and people with disability with whom they are working;

Sleep in the same room as a project participant with whom they are working (unless necessary and previously agreed with managers that this is for the safety of the project participant);

Do things for children of a personal nature that they can do for themselves;

Condone, or participate in, behavior of children which is illegal, unsafe or abusive;

Act in ways intended to shame, humiliate, belittle or degrade project participants, or otherwise perpetrate any form of emotional abuse;

Discriminate against, show unfair differential treatment to, or favor particular participant to the exclusion of others;

Act as negotiator in or assist the process of financial settlement between the family of a participant victim of sexual abuse or exploitation and the perpetrator; or

Spend excessive time alone with children away from others.

Place themselves in a position where they are made vulnerable to allegations of misconduct.

(This is not an exhaustive or exclusive list. Staff, partners and other representatives should at all times avoid actions or behavior which may allow behavior to be misrepresented, constitute poor practice or potentially abusive behavior.)

Scope

This policy applies to:

All staff whether full time, part time, and to those engaged on short-term contracts, e.g. consultants, researchers etc. (referred to as “staff”);

Volunteers, board members of Organization for Social Development, trustees, and other representatives;

Staff and representatives of partner agencies and any other individuals, groups or organizations who have a formal/contractual relationship with Organization for Social Development that involves any contact with children, women and people with disability (unless it is formally agreed that a partner organization may enforce its own safeguarding or protection policy);

Donors, journalists, celebrities, politicians and other people who visit Organization for Social Development programs or offices in order to make contact with participants must be made aware that this Protocol applies to them while visiting our programs or offices (During this time they are referred to as “representatives”).

All of the above must act in accordance with this policy in both their professional and their personal lives.

Definition of Terms

“Child” is anyone under the age of 18 years.

“Organizational Safeguarding Policy” refers to the set of policies, procedures and practice that we employ to ensure that Organization for Social Development itself a safe organization in which children, women and people with disability we work with are safe and that we respond appropriately to individual cases of abuse and exploitation when they occur. Organizational Safeguarding policy can be seen as ensuring that Organization for Social Development’s work in ensuring the rights of children, women and people with disability within their communities is based on sound foundations.

“Child abuse” consists of anything which individuals, institutions or processes do or fail to do which directly or indirectly harms children or damages their prospect of safe and healthy development into adulthood. The main categories of abuse are defined by WHO as Physical Abuse, Emotional Abuse, Neglect and Negligent Treatment, Sexual Abuse and Exploitation.

“Sexual exploitation” means any actual or attempted abuse of a position of vulnerability, differential power, or trust, for sexual purposes, including, but not limited to, profiting monetarily, socially or politically from the sexual exploitation of another.

The sexual exploitation of a child, who is under the age of consent, is child sexual abuse and a criminal offence. An underage child cannot legally give informed consent to sexual activity. Organization for Social Development considers that:

Sexual activity with a child with or without their consent is child abuse and a crime e.g. rape, indecent assault;

Any sexual activity with a child who is under the legal age of consent of the country in which she/he lives and/or in which the offence occurs regardless of whether they consent is child abuse and a crime.

Consensual sexual activity with a child over the legal age of consent of the country in which she/he lives and/or in which the offence occurs, but below 18 year (although not a crime) will be dealt with as a breach of this Child Safeguarding Policy and the Code of Conduct.

Organization for Social Development Office Procedure

Organization for Social Development office procedures must:

Ensure that all staff, partners and other representatives are aware of the problem of children, women and people with disability abuse and sexual exploitation and the risks to project participants. The participants and their families will be made aware of the standards of behavior they can expect from our representatives and of how they can raise a concern.

Ensure that all staff, partners and other representatives minimize risks and prevent harm to project participants. Staff and managers will create an environment where the participant’s rights are respected and participant’s abuse and sexual exploitation of children is prevented.

Ensure that all staff, partners and other representatives are clear as to when to report concerns and what steps to take where concerns arise regarding the abuse or exploitation of the participants.

Ensure that action is taken to respond by supporting, safeguarding and protecting participants where concerns arise regarding their possible abuse and exploitation.

Breaches of the policy are to be reported to the Executive Director and to Program manager at the field offices.

Prior or at the time of issuing any employment contract all staff and representatives receive and understand:

This policy;

A copy of their Local Procedures;

Code of Conduct.

All representatives such as visitors are given a copy of this policy and it is explained that they must comply with it whilst visiting Organization for Social Development participants.

All implementing partners, or other organizations who have a formal/contractual relationship to Organization for Social Development that involves their staff having contact with children, women and people with disability have included in their contracts a requirement that staff:

Comply with this policy or that they comply with the organization’s own policy of a similar standard including procedures for reporting and investigating concerns; and

Comply with the code of conduct.

Any breach of this policy is investigated in accordance with Local Procedures and this Organizational Safeguarding Policy and is stated to be a disciplinary offence which can result in dismissal in all staff contracts.

Implementation and Review

This Organizational safeguarding policy will be reviewed every three years or as it becomes necessary.

This policy is implemented with guidance of policy compliance standards of Organization for Social Development policy and protocol by the head office team and audit will be undertaken annually by the governing body of OSD to review the level of implementation.

Additional Guidance

All staff should:

Promote a culture of openness in relation to organization safeguarding issues, where any issues or concerns can be raised and discussed;

Ensure that a sense of accountability exists between staff so that poor practice or potentially abusive behavior can be challenged;

Talk to project participants about their contact with staff or others and encourage them to raise any concerns;

Empower project participants and communicate to their rights, what is acceptable and unacceptable, and what they can do if there is a problem;

Communicate to beneficiaries what standards of professional practice they can expect of OSD staff and what to do if they feel that OSD staff are falling short of these standards;

Report concerns that a beneficiary is a victim of abuse or sexual exploitation immediately in accordance with local procedures.

Undertake induction and training on this policy which is relevant and appropriate to their position.

Cooperate fully and confidentially in any investigation of concerns and allegations when needed.

Identify and avoid potential situations, which may lead to staff behavior being misinterpreted.

Ensure, when making images of project participants e.g. photographs, videos, that they are respectful, that the project participants are adequately clothed and that sexually suggestive poses are avoided; and take consent of participants when using for publication.

Ensure that any image or recorded case history of project participants does not place him/her at risk or render him/her vulnerable to any form of abuse.

Some cultural/traditional beliefs may pose a challenge to our organizational Safeguarding policies. Staff and representatives need to be aware on unacceptable acts that harm the project participants like physical punishment; early marriage; child labor; FGM and others.

And staff and representatives do not act as negotiator in or assist the process of financial settlement for poor practices.

Additional policy guidance that provides practical orientation to meet standards of OSD organizational safeguarding policy which is listed and referred in the OSD policy will be comprehensively organized and shared separately for reference.

Accountability

The Executive Director has overall responsibility for creating the managerial environment at regional level which enables and facilitates the implementation of all aspects of this policy.

The Executive Director has overall responsibility for developing and implementing local procedures.

The Executive Director is responsible for delegating responsibility to key posts including Safeguarding Focal Points.

Signatures & Adoption

We, our names listed down below, the board members of Organization for Social Development found out that it is necessary to develop the organizational safeguarding policy that describe the discipline and relationship that should exist among the staff, representatives, partners of OSD and others with the participants. Therefore, this organizational safeguarding policy is developed and we have reached to a consensus that OSD shall adopt it to direct the nature of relationships with project participants.

Name

Role

Signature

Wondyifraw Girmachew

Chairman

 

 

Tessema Mebratu

Member

 

 

Kinetibeb Arega

Member

 

 

Ruth Solomon

Member

 

 

Wondewosen Ayalew

Executive Director

 

 

 

 

Adopted by the OSD on: Sept, 2019

Reviewed on: April, 2023

Name: Wondosen Ayalew

Title: Executive Director

Signature: --------------------

 

 

 

 

 

 

 

 

 

Organization for Social Development

 

IPSAS BASED ACCOUNTING POLICY AND PROCEDURES MANUAL 

(IPSAS ACCRUAL)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Addis Ababa, Ethiopia

2024

 

 

 

Organization For Social Development (OSD)

 

 

TABLE OF CONTENTS

 

ACRONYMS

 

1. GENERAL INTRODUCTION

1.1. Basics of the Manual

1.2. Background of the Organization

1.3. Objective of the Manual

1.4. Scope of the Manual

1.5. Responsibility of the Manual

1.6. Authority of the Manual

1.7. Revision of the Manual

1.8. Custody of the Manual

1.9. Implementation of the Manual

 

2. DIVISION OF RESPONSIBILITIES IN ACCOUNTING SYSTEM

2.1. Organogram of the Accounting and Finance Function

 

3. ELEMENTS OF FINANCIAL STATEMENTS

 

3.1. Property, Plant and Equipment (IPSAS 17)

3.1.1. Nature and Definition

3.1.2. Recognition of Property, Plant and Equipment

3.1.3. Initial Costs of Property, Plant and Equipment

3.1.4. Subsequent Costs of Property, Plant and Equipment

3.1.5. Subsequent Measurement of Property, Plant & Equipment

3.1.6. Depreciation of Property, Plant and Equipment

3.1.7. Depreciable Amount, Economic Life and Residual Value

3.1.8. Depreciation Method of Property, Plant and Equipment

3.1.9. Impairment and Compensation

3.1.10. De-recognition of Property, Plant and Equipment

3.1.11. Disclosure of Property, Plant and Equipment

3.1.12. General Procedures and Control over PPE

3.1.13. Procedures of Coding PPE

3.1.14. Procedures and Control over Disposal of PPE

3.1.15. Procedures and Control over Low Value PPE

3.1.16. Procedures and Control over Construction in Progress

3.1.17. Internal Control over Property Plant and Equipment

 

3.2. Investment Property (IPSAS 16)

3.2.1. Nature and Definition

3.2.2. Recognition of Investment Property

3.2.3. Initial Measurement of Investment Property

3.2.4. Subsequent Measurement of Investment Property

3.2.5. Transfer of Investment Property

3.2.6. Disposals of Investment Property

3.2.7. Presentation and Disclosures of Investment Property

3.2.8. Procedures and Controls over Investment Property

 

3.3. Intangible Assets (IPSAS 31)

3.3.1. Nature and Definition

3.3.2. Initial Recognition and Measurement

3.3.3. Subsequent Measurement

3.3.4. De-recognition

3.3.5. Research & Development Costs of Internally Generated Intangible Assets

3.3.6. Presentation and Disclosure

3.3.7. Amortization of Intangible Assets

3.3.8. Impairment of Intangible Assets

3.3.9. Accounting and documentation of Intangible Assets

3.3.10. Procedures and Controls over Intangible Assets

 

3.4. Borrowing Costs (IPSAS 5)

3.4.1. Nature and Definition

3.4.2. Capitalization of Borrowing Costs

3.4.3. Commencement of Capitalization of Borrowing Costs

3.4.4. Suspension of Capitalization of Borrowing Costs

3.4.5. Cessation of Capitalization of Borrowing Costs

3.4.6. Disclosure of Borrowing Costs

 

3.5. Impairment of Non-Cash-Generating Assets (IPSAS 21) and Impairment of Cash-Generating Assets (IPSAS 26)

3.5.1. Nature and Definitions

3.5.2. Measuring Recoverable Amount and Value in Use

3.5.3. Recognizing and Measuring an Impairment Loss

3.5.4. Reversing an Impairment Loss

3.5.5. Disclosures

 

3.6. Inventories (IPSAS 12)

3.6.1. Nature and Definition

3.6.2. Classification of Inventories

3.6.3. Recognition of Inventories

3.6.4. Initial Measurement of Inventories

3.6.5. Costs of Purchased Inventories

3.6.6. Exclusions from Cost of Inventories

3.6.7. Cost Formulas

3.6.8. Subsequent Measurement of Inventories

3.6.9. [Error! Bookmark not defined.]

3.6.10. Accounting Procedures and Control over Spare Parts

3.6.11. Accounting Procedures for Spare Parts

3.6.12. Internal Control over Spare Parts

3.6.13. Accounting Procedures for Supplies

3.6.14. Internal Control over Supplies

3.6.15. Accounting Procedures for Local Purchases

3.6.16. The Accounting Procedures for Foreign Purchases

3.6.17. Physical Count

3.6.18. Presentation and Disclosure

 

3.7. REVENUE FROM EXCHANGE TRANSACTIONS (IPSAS 9), REVENUE FROM NON-EXCHANGE TRANSACTIONS (IPSAS 23) & CONSTRUCTION CONTRACTS (IPSAS 11)

3.7.1. Definition

3.7.2. Recognition of Revenue

3.7.3. Measurement of Revenue

3.7.4. Presentation

3.7.5. Disclosure

 

3.8. Financial Instruments (IPSAS 28, 29 & IPSAS 30)

3.8.1. Definition

3.8.2. Classification of Financial Assets

3.8.3. Recognition, De-recognition and measurement

3.8.4. Impairment of Financial Instruments

3.8.5. Presentation of Financial Instruments

3.8.6. Disclosure of Financial Instruments

 

3.9. Cash and Cash Equivalents

3.9.1. Nature and Definition

3.9.2. Recognition and Measurement

3.9.3. Presentation and Disclosure

3.9.4. Procedures for Cash collections

3.9.5. Principles for Bank Accounts

3.9.6. Procedures for Disbursements

3.9.7. Procedures and Internal Control over Cashiers and Cash Safe

3.9.8. Procedures and Control over Other Collections

3.9.9. Procedures and Control over bank deposits

3.9.10. Procedures and Control over Collections through banks

3.9.11. Procedures and Control over Disbursements

3.9.12. Procedures and Control over Check payments for Recurring (Revenue) Expenditures

3.9.13. Procedures and Control over Bank transfer payments

3.9.14. Procedures and Control over Bank Reconciliation

3.9.15. Procedures and Control over Petty cash Establishment

3.9.16. Procedures and Control over Petty cash payments

3.9.17. Procedures and Control over Petty cash replenishments

3.9.18. Procedures & Control over Establishment of Purchase Fund

3.9.19. Procedures & Control over Payments from Purchase Fund

3.9.20. Procedures & Control over Replenishment of Purchase Fund

3.9.21. Procedures & Control over Cheque Receipts and Issue

 

3.10. Trade and Other Receivables

3.10.1. Nature and Definition

3.10.2. Classification of Receivables

3.10.3. Recognition of Receivables

3.10.4. Measurement of Receivables

3.10.5. Presentation and Disclosure

3.10.6. Procedures and Control over Staff Receivables

3.10.7. Grant/Donor Receivable

3.10.8. Sundry Receivables

 

3.11. Foreign Exchange Transactions (IPSAS 4)

3.11.1. Nature and Definition

3.11.2. Initial Recognition and Measurement

3.11.3. Subsequent Recognition and Measurement

3.11.4. Recognition of Exchange Differences

3.11.5. Change in Functional Currency

3.11.6. Presentation and Disclosure

 

3.12. Accounting for Employee Benefits (IPSAS 39)

3.12.1. Nature and Definition of Employee Benefits

3.12.2. Recognition and Measurement for Short-term Employee Benefits

3.12.3. Recognition and Measurement Short-term paid absences

3.12.4. Recognition & Measurement of Accumulating Paid Absences

3.12.5. Recognition and Measurement of Non Accumulating Paid Absences

3.12.6. Recognition and Measurement of bonus plans

3.12.7. Disclosure of Short-term Benefits

3.12.8. Recognition and Measurement for Termination Benefits

3.12.9. Recognition of Termination Benefits

3.12.10. Measurement of Termination Benefits

3.12.11. Disclosure of Termination Benefits

3.12.12. Recognition & Measurement for Post-employment Benefits

3.12.13. Recognition and Measurement of Defined Contribution Plans

3.12.14. Disclosure of Defined Contribution Plans

3.12.15. Defined Benefits Plans

3.12.16. Recognition and Measurement for Other long-term employee benefits

3.12.17. Disclosure of Other Long-term Employee Benefits

3.12.18. Basics of Payroll Preparation

3.12.19. Procedures for Payroll Preparation

3.12.20. Policy and Procedures of Part-timers' payment

3.12.21. Policy and Procedures for overtime work

3.12.22. Policy and Procedures for annual leave pay

3.12.23. Policies and Procedures for severance pay

3.12.24. Policy and Procedures for bonus

 

3.13. Liabilities, Accruals, Provisions and Contingent Liabilities (IPSAS 19)

3.13.1. Nature and Definition

3.13.2. Classification

3.13.3. Recognition

3.13.4. Measurements

3.13.5. Presentation and Disclosure

3.13.6. Procedures and Control over Account (Trade) Payables

3.13.7. Procedures and Control over Accruals

3.13.8. Procedures and Control Unclaimed Salaries and Wages

3.13.9. Procedures and Control Sundry Payable

3.13.10. Procedures and Control Long term liability

 

3.14. Leases (IPSAS 13)

3.14.1. Nature and Definition of Lease

3.14.2. Recognition Exemptions

3.14.3. Leases of Low Value Assets

3.14.4. Identifying a Lease

3.14.5. Lease term

3.14.6. Recognition of Right of Use Asset - OSD as Lessee

3.14.7. Initial measurement of the Right-of-Use Asset

3.14.8. Initial measurement of the Lease Liability

3.14.9. Subsequent Measurement of the Right-of-Use Asset

3.14.10. Subsequent Measurement of the Lease Liability

3.14.11. Reassessment of the Lease Liability

3.14.12. Lease Modifications

3.14.13. Presentation

3.14.14. Disclosure

3.14.15. Recognition & Measurement for Lease - OSD as Lessor

3.14.16. Recognition of Finance Leases

3.14.17. Initial Measurement of Finance Leases

3.14.18. Subsequent measurement

3.14.19. Lease modifications

3.14.20. Recognition and Measurement Operating Lease

3.14.21. Lease modifications

3.14.22. Presentation

3.14.23. Disclosure

3.14.24. Procedural Controls over Lease

 

3.15. SERVICE CONCESSION ARRANGEMENTS (IPSAS 32)

3.15.1. Definitions

3.15.2. Recognition & Measurement of a Service Concession Asset

3.15.3. Recognition and Measurement of Liabilities

3.15.4. Other Liabilities, Commitments, Contingent Liabilities and Contingent Assets & Other Revenues

3.15.5. Presentation and Disclosure

 

4. PRESENTATION OF FINANCIAL STATEMENTS AND ADDITIONAL DISCLOSURES

 

2.1. Basics of General Purpose Financial Reporting (IPSAS Framework)

2.1.1. Objective of General Purpose Financial Reporting

2.1.2. General Purpose Financial Reports

2.1.3. Special Purpose Financial Reports

2.1.4. Users of General Purpose Financial Reports

2.1.5. Information Needs of Service Recipients and Resource Providers

 

2.2. Qualitative Characteristics of Useful Financial Information

2.2.1. Qualitative characteristics

 

2.3. Presentation of Financial Statements (IPSAS 1)

2.3.1. Complete set of financial statements

2.3.2. Fair Presentation and Compliance with IPSASs

2.3.3. Going Concern

2.3.4. Consistency of Presentation

2.3.5. Materiality and Aggregation

2.3.6. Offsetting

2.3.7. Accrual Basis of Accounting

2.3.8. Frequency of Reporting/Accounting Period

2.3.9. Comparative Information

2.3.10. Identification of the Financial Statements

2.3.11. Statement of financial position

2.3.12. Current/non-current distinction

2.3.13. Current assets

2.3.14. Current liabilities

2.3.15. Information to be presented either in the statement of financial position or in the notes

2.3.16. Statement of Financial Performance

2.3.17. Information to be Presented by OSD on the Face of the Statement of Financial Performance

2.3.18. Information to be Presented either on the Face of the Statement of Financial Performance or in the Notes

2.3.19. Statement of Changes in Net Assets/Equity

2.3.20. Cash Flow Statement

2.3.21. Notes of Financial Statements

2.3.22. Disclosure of accounting policies

2.3.23. Sources of estimation uncertainty

2.3.24. Net Assets/Equity

2.3.25. Cash Flows Statement (IPSAS 2)

2.3.26. Operating activities

2.3.27. Investing Activities

2.3.28. Financing Activities

2.3.29. Reporting Cash Flows from Operating Activities

2.3.30. Reporting Cash Flows from Investing and Financing Activities

2.3.31. Foreign Currency Cash Flows

2.3.32. Components of cash and cash equivalents

2.3.33. Other disclosures

 

2.4. Accounting Policies, Changes in Accounting Estimates and Errors (IPSAS 3)

2.4.1. Definitions

2.4.2. Selection and application of accounting policies

2.4.3. Consistency of accounting policies

2.4.4. Changes in accounting policies

2.4.5. Applying changes in accounting policies

2.4.6. Disclosure of Changes in accounting policies

2.4.7. Changes in accounting estimates

2.4.8. Disclosure of changes in accounting estimates

2.4.9. Errors

2.4.10. Disclosure of prior period errors

 

2.5. Events after Reporting Period (IAS 10)

2.5.1. Definitions

2.5.2. Adjusting events after the reporting period

2.5.3. Non-adjusting events after the reporting period

2.5.4. Disclosure of events after the reporting period

 

2.6. Related Party Disclosures (IPSAS 20)

2.6.1. Definition

2.6.2. Related Party Transactions

2.6.3. Potential Related Party Indicators

2.6.4. Disclosure Requirements

 

5. CHART OF ACCOUNTS (COA) & OPERATING SOFTWARE (OSW)

 

5.1. Framework for Chart of Accounts

5.1.1. Nature and Definition

5.1.2. Purpose of Chart of Accounts

5.1.3. Organizing Chart of Accounts

5.1.4. Chart of Accounts Policy and Administration

5.1.5. Account Codes Structure

5.1.6. Updating Chart of Accounts

5.1.7. Computerized Accounting System (Operating Software) /OSW

5.1.8. Data Security and Backups

5.1.9. Basic Recording and BOOK of Account

 

6. BUDGETING AND BUDGETARY CONTROL

 

6.1. Framework of Budgeting

6.1.1. Nature and Definition

6.1.2. Budgetary Policy

6.1.3. Budgetary Procedures and Control

 

APPENDICES

 

 

ACRONYMS

 

 

AABE   - Accounting and Auditing Board of Ethiopia

A/P    - Advance Payment

CAD    - Cash Against Document

COA    - Chart of Accounts

GAAP   - Generally Accepted Accounting Principle

GPFR   - General Purpose Financial Reporting

GRV    - Goods Receiving Voucher

OSD    - Organization For Social Development

IASB   - International Accounting Standards Board

IFRS   - International Financial Reporting Standard

IFRSs  - International Financial Reporting Standards

IPSAS  - International Public Sector Accounting Standards

IPSASB - International Public Sector Accounting Standards Board

LC     - Letter of Credit

NRV    - Net Realizable Value

OCI    - Other Comprehensive Income

OSW    - Operating Software

P/L    - Profit or Loss

PPE    - Property, Plant and Equipment

PO     - Purchase Order

RC     - Replacement Cost

SCE    - Statement of Change in Equity

SCF    - Statement of Cash Flows

SFP    - Statement of Financial Position

SIV    - Store Issue Voucher

SMEs   - Small and Medium Sized Entities

SPLOCI - Statement of Profit or Loss and Other Comprehensive Income

 

 

 

Organization For Social Development (OSD)

IPSAS based Accounting Policy and Procedures Manual

2021

 

 

 

1. General Introduction

1.1. Basics of the Manual

 

In recent years, the process of financial reporting of various organizations underwent in a great change. Most countries in the world have revolutionized their accounting practices especially during the last few decades of the 21st century. Such revolutions encompass harmonizing the local accounting practices with that of the International Accounting Standards such as International Financial Reporting Standards (IFRS), International Public Sector Accounting Standards (IPSAS) and International Financial Reporting Standards for Small and Medium Entities (IFRS for SMEs). IFRS and IPSAS are designed to apply to the general purpose financial statements of entities which have public accountability whereas IFRS for SMEs is intended to apply only to the general purpose financial statements of entities that do not have public accountability.

 

Accordingly, the Ethiopian government has adopted those International Accounting Standards and issued Financial Reporting Proclamation No. 847/2014. Moreover, Accounting and Auditing Board of Ethiopia (AABE) has been established as per Council of Ministers Regulation No. 332/2014 so as to implement this Proclamation. In Ethiopia, mandatory adoption of IFRS is scheduled in three phases.

 

Phase 1: Significant Public Interest Entities: Financial Enterprises and Public Enterprises such as owned by Federal or Regional Governments to issue the first IFRS full financial statements in 2023.

 

Phase 2: Other Public Interest Entities: Reporting entities that meet Public Interest Entities quantitative thresholds and IPSAS for Charities (Ethiopian Human Right Council) and Societies to issue the first IFRS and IPSAS based on financial statements respectively in 2024.

 

Phase 3: Small and Medium Sized Entities are required to issue IFRS for SMEs based in 2024.

 

 

1.2. Background of the Organization

 

 

Organization for Social Development (OSD) was found in September 2003 as Organization for Social Justice in Ethiopia (OSJE) officially registered by Ministry of justice under license number 1160. Its inception was rooted in the pursuit of public interest, respect for human rights, and promotion of social justice. Organization for Social Justice in Ethiopia (OSJE) was established based on the following perspective.

 

The salient feature of most development policies existing today is their exclusive focus on economic growth. Usually, the social, political, civic and cultural dimensions of development are either ignored or undervalued. But development is considerably broader than just economic growth. It's about creating conditions for peoples to live in dignity as human beings. In fact there is an indissoluble link between development and respect for civil, political, economic, social and cultural rights- rights that are inherent in humanity.

 

In line with its mission statement in the past years OSJE was engaged in different activities which can be divided in four major categories: Capacity Enhancement and Development, Civic Empowerment, Legal Empowerment and, Creating Enabling Environment.

 

 

1.3. Objective of the Manual

 

 

Having a meaningful and well-considered accounting policies and procedures manual is a critical component of a strong financial management system for any organization. A well-written accounting policies and procedures manual are important for maintaining consistency across the concerned departments and ensuring compliance with regulatory standards. Having written down and approved by the country leadership team and board, the policy manual will serve as a quick and easy reference to handle the financial transactions. All OSD's staff with a role in the management of fiscal and accounting operations is expected to comply with the policies and procedures in this manual.

 

In summary, this manual is expected to serve the following purposes:

 

1. Providing guidelines to all staff of OSD (i.e. particularly the finance and accounting staff) for the orderly execution of their respective responsibilities for the purpose of preparing OSD's IPSAS based general purpose financial statements.

 

2. Providing sets of operating and financial reporting standards and practices which comply with international public sector accounting standards.

 

3. Ensuring key financial guidelines and requirements of regulators will be complied with and satisfy the statutory (Special purpose financial report) reporting requirements.

 

4. Setting out the basic framework of systems that will provide adequate levels of internal controls.

 

5. Ensuring and promoting the principles of accountability and transparency generally referred to as good corporate governance code.

 

 

1.4. Scope of the Manual

 

 

Documenting an organization's accounting policies and procedures manual is an important tool to help the accounting staff to understand and follow the accounting rules and methods necessary to produce accurate and reliable financial reports for organization decision making. Thus, this manual is prepared to provide documented procedures related to accounting policies and procedures, internal controls and reporting requirements for OSD. It is specifically intended to provide guidelines on the four core issues of IPSAS (i.e. Recognition, Measurement, Presentation and Disclosure) of elements of financial statements.

 

 

1.5. Responsibility of the Manual

 

 

The responsibility for maintaining and operating this accounting manual rests on the head of Finance and Purchasing Division of OSD. The authority to modify-add, amend, or delete, any sections or sub sections of this accounting policy and procedures manual rests on the Manager at the recommendation of the Finance and Purchasing Division. This accounting system has been designed to elaborate enough to fit the expected growth in scope of OSD's operation, management size, and the attendant internal controls necessary for OSD.

 

The overall responsibilities of the Finance division are as follows:

 

1. Maintaining proper books of accounts and other records of OSD;

2. Operating satisfactory accounting control over the assets and liabilities of OSD;

3. Monitoring the effectiveness of the accounting system & of the control maintained;

4. Providing management information containing accounting and statistical information as required by management and to assist them in planning and controlling the activities of OSD and to those reports to be submitted to donors and government on monthly, quarterly and half yearly basis;

5. Ensuring compliance with accounting standards and OSD's requirements.

6. Advising on the evaluation of alternative proposals and ensuring that information is available to those charged with the responsibility of monitoring progress;

7. Initiating amendment and extension of the accounting principles and procedures in the light of changing circumstances.

 

 

1.6. Authority of the Manual

 

 

In developing this manual, consideration was given to all applicable International Public Sector Accounting Standards (IPSAS) and the relevant Regulatory Requirements of Ethiopia (i.e. Tax law, Labor law, Charity law, etc.)

 

1. The manual also has the approval of the Manager and the full authority of the Board of Directors.

 

2. Any failure to comply with any policies and procedures contained in this manual shall not be accepted by OSD (i.e. may render an employee liable to disciplinary action).

 

3. If for any reason a given policy or procedure cannot be implemented, it would be obligatory upon the responsible official to notify the immediate senior in writing detailing the circumstances and submitting an alternative policy or procedure for the approval of the Manager, who shall either endorse or reject the exception and the procedure to be valid as a replacement.

 

 

1.7. Revision of the Manual

 

 

Revision and update of specific policies of the manual can be made at any time when such changes are found to be necessary to enhance efficiency of the financial reporting environment of OSD. Such conditions may include new developments in IPSAS and change in the environment affecting OSD.

 

1. The manual shall therefore be reviewed (and revised if needed) at least every other year with the approval of the Manager of OSD on advice from the Head of Finance and the endorsement of the Board of Directors.

 

2. Suggestions and ideas on how the manual could be improved should be forwarded to Head of Finance who would liaise with the Manager of OSD to effect the necessary identified changes for the endorsement of the leadership team.

 

 

1.8. Custody of the Manual

 

 

This manual is the property of OSD. It should be kept under the custody of the Head of Finance of OSD. It should be kept with great care as it contains information of OSD's accounting system.

 

 

1.9. Implementation of the Manual

 

 

This manual shall be fully implemented by staffs at all levels of OSD effective from the date of its approval by the Manager and endorsement of Board of Directors. From the date of approval and endorsement, all staff shall be required to formally adhere to the provisions indicated in this manual. Thus, the manual shall be effective as of ………………..

 

 

Part II

Division of Responsibilities in Accounting System

 

 

2. Division of Responsibilities in Accounting System

 

2.1. Organogram of the Accounting and Finance Function

 

The following are the major function categories of the Finance and Purchasing division specifically pertaining to financial management.

 

2.1.1. Management of the Finance and Purchasing division including staffing, organization, and internal controls.

2.1.2. Facilitating the planning and budgeting formulation, execution, and control.

2.1.3. Plan for the solicitation of funds, financial sustainability in collaboration with the management of OSD, monitor financial resource availability to execute the timely operation of OSD as designed in its implementation and action plans.

2.1.4. Implementation of appropriate accounting system in line with the financial policy and procedure of OSD.

2.1.5. Timely recording of financial transactions and submission of the required management and financial accounting reports.

2.1.6. Ensure that the appropriate level of internal controls is in place in collaboration with the management of OSD and ensure the compliance of the internal control procedures.

2.1.7. Collaborate and facilitate internal and external auditing and appropriately follow-up on the recommendations and findings of auditors.

2.1.8. Ensure that OSD is discharging its financial obligations to others including the government and vendors.

2.1.9. Ensure that appropriate recording systems are in place to safeguard the resources of OSD.

 

 

Part III

Accounting Policy and Procedures for Elements of Financial Statements

 

 

3. Elements of Financial Statements

 

3.1. Property, Plant and Equipment (IPSAS 17)

 

3.1.1. Nature and Definition

 

3.1.1.1. Property, plant and equipment are defined as tangible items that:

   a) are held for use in the production or supply of goods or services, for rental to others, or for administrative purposes; and

   b) are expected to be used during more than one period.

 

3.1.2. Recognition of Property, Plant and Equipment

 

3.1.2.1. OSD shall recognize the cost of an item of property, plant and equipment as an asset if, and only if:

   a) it is probable that future economic benefits or Service Potential associated with the item will flow to OSD; and

   b) The cost or the fair value of the item can be measured reliably.

 

3.1.2.2. OSD should evaluate under this recognition principle all its property, plant and equipment costs at the time they are incurred.

 

3.1.2.3. Items such as spare parts, stand-by equipment and servicing equipment are recognized in accordance with this IPSAS when they meet the definition of property, plant and equipment. Otherwise, such items are classified as inventory.

 

3.1.3. Initial Costs of Property, Plant and Equipment

 

3.1.3.1. An item of property, plant and equipment that qualifies for recognition as an asset shall be measured at its cost.

 

3.1.3.2. The cost of an item of property, plant and equipment is the cash price equivalent at the recognition date.

 

3.1.3.3. Initial costs include costs incurred initially to acquire or construct an item of property, plant and equipment and costs incurred subsequently to add to, replace part of, or service it.

 

Organization For Social Development (OSD)

IPSAS based Accounting Policy and Procedures Manual

2021

 

 

3. Elements of Financial Statements (continued)

3.1. Property, Plant and Equipment (IPSAS 17) — continued

 

 

3.1.3. Initial Costs of Property, Plant and Equipment (continued)

 

3.1.3.4. The cost of an item of property, plant and equipment may include costs incurred relating to leases of assets that are used to construct, add to, replace part of or service an item of property, plant and equipment, such as depreciation of right-of-use assets.

 

3.1.3.5. The cost of an item of property, plant and equipment comprises:

   a) Its purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates;

   b) Any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

   c) The initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located, the obligation for which OSD incurs either when the item is acquired or as a consequence of having used the item during a particular period for purposes other than to produce inventories during that period.

 

3.1.3.6. OSD should capitalize directly attributable costs such as:

   a) costs of employee benefits (as defined in IPSAS 39 Employee Benefits) arising directly from the construction or acquisition of the item of property, plant and equipment;

   b) costs of site preparation;

   c) initial delivery and handling costs;

   d) installation and assembly costs;

   e) costs of testing whether the asset is functioning properly, after deducting the net proceeds from selling any items produced while bringing the asset to that location and condition (such as samples produced when testing equipment); and

   f) Professional fees.

 

3.1.3.7. If payment is deferred beyond normal credit terms, the difference between the cash price equivalent and the total payment is recognized as interest over the period of credit unless such interest is capitalized as per IPSAS 5.

 

3.1.3.8. The cost of an item of property, plant and equipment acquired in exchange for a non-monetary asset or a combination of monetary and non-monetary assets should is measured at fair value.

 

3.1.3.9. If the acquired item in exchange for a non-monetary asset or a combination of monetary and non-monetary assets is not measured at fair value, its cost is measured at the carrying amount of the asset given up.

 

3.1.3.10. OSD should exclude the costs that are not costs of an item of property, plant and equipment such as:

   a) costs of opening a new facility;

   b) costs of introducing a new product or service (including costs of maintenance and promotional activities);

   c) costs of conducting business in a new location or with a new class of customer (including costs of staff training);

   d) Administration and other general overhead costs.

 

3.1.3.11. The cost of abnormal amounts of wasted material, labor, or other resources incurred in initial acquisition of PPE is not included in the cost of the asset (i.e. they are expensed).

 

3.1.3.12. Recognition of costs in the carrying amount of an item of property, plant and equipment ceases when the item is in the location and condition necessary for it to be capable of operating in the manner intended by management.

 

 

3.1.4. Subsequent Costs of Property, Plant and Equipment

 

 

3.1.4.1. Costs of day-to-day servicing are primarily the costs of labor and consumables, and may include the cost of small parts (i.e. repairs and maintenance of the item of property, plant and equipment.)

 

3.1.4.2. OSD Shall not recognize in the carrying amount of an item of property, plant and equipment the costs of the day-to-day servicing of the item (i.e. they are recognized in surplus or deficit (expensed) as incurred).

 

3.1.4.3. OSD should recognize in the carrying amount of an item of property, plant and equipment the cost of replacing part of such an item when that cost is incurred if the recognition criteria are met (i.e. they are capitalized).

 

 

3.1.5. Subsequent Measurement of Property, Plant & Equipment

 

 

3.1.5.1. OSD shall choose either the revaluation model or the cost model as its accounting policy and shall apply that policy to an entire class of property, plant and equipment.

 

Model 1: Revaluation Model

 

3.1.5.2. After recognition as an asset, an item of property, plant and equipment whose fair value can be measured reliably shall be carried at a revalued amount, being its fair value at the date of the revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

 

3.1.5.3. The frequency of revaluations depends upon the changes in fair values of the items of property, plant and equipment being revalued.

 

3.1.5.4. Some items of property, plant and equipment experience significant and volatile changes in fair value, thus necessitating annual revaluation.

 

3.1.5.5. Some items of property, plant and equipment experience with only insignificant changes in fair value may be necessary to revalue the item only every three or five years.

 

3.1.5.6. If an item of property, plant and equipment is revalued, the entire class of property, plant and equipment to which that asset belongs shall be revalued.

 

3.1.5.7. A class of property, plant and equipment is a grouping of assets of a similar nature and use in OSD's operations.

 

3.1.5.8. The following are examples of separate classes:

   a) Land;

   b) Buildings;

   c) Machinery;

   d) Motor Vehicles;

   e) Furniture and Fixtures;

   f) Office Equipment;

 

3.1.5.9. If an asset's carrying amount is increased as a result of a revaluation, the increase shall be recognized in other comprehensive income (unrealized gain) and accumulated in equity under the headings of revaluation surplus. However, the increase shall be recognized in surplus or deficit to the extent that it reverses a revaluation decrease of the same asset previously recognized in surplus or deficit.

 

3.1.5.10. If an asset's carrying amount is decreased as a result of a revaluation, the decrease shall be recognized in surplus or deficit. However, the decrease shall be recognized in other comprehensive income to the extent of any credit balance existing in the revaluation surplus in respect of that ass

 

3.1.5.11. The revaluation surplus included in equity in respect of an item of property, plant and equipment may be transferred directly to retained earnings when the asset is de-recognized in one of two conditions.

   a) The whole amount of the surplus is transferred to retained earnings when the asset is retired or disposed of.

   b) Some of the surplus may be transferred as the asset is used by OSD (In such a case, the amount of the surplus transferred would be the difference between depreciation based on the revalued carrying amount of the asset and depreciation based on the asset's original cost).

 

3.1.5.12. Transfers from revaluation surplus to retained earnings are not made through surplus or deficit.

 

3.1.5.13. The effects of taxes on income, if any, resulting from the revaluation of property, plant and equipment are recognized and disclosed in accordance with IAS 12 Income Taxes.

 

Model 2: Cost Model

 

3.1.5.14. After recognition as an asset, an item of property, plant and equipment shall be carried at its cost less any accumulated depreciation and any accumulated impairment losses.

 

 

3.1.6. Depreciation of Property, Plant and Equipment

 

 

3.1.6.1. Depreciation of an asset begins when it is available for use, i.e. when it is in the location and condition necessary for it to be capable of operating in the manner intended by management.

 

3.1.6.2. Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item shall be depreciated separately.

 

3.1.6.3. If OSD acquires property, plant and equipment subject to an operating lease in which it is the lessor, it may be appropriate to depreciate separately amounts reflected in the cost of that item that are attributable to favorable or unfavorable lease terms relative to market terms.

 

3.1.6.4. The depreciation charge for a period shall be recognized in surplus or deficit (expensed) unless capitalized as per Inventories (IPSAS 12) or Intangible Assets (IPSAS 31).

 

3.1.6.5. Depreciation of an asset ceases at the earlier of the date that the asset is classified as held for sale (or included in a disposal group that is classified as held for sale) in accordance with IFRS 5 and the date that the asset is de-recognized.

 

3.1.6.6. Depreciation does not cease when the asset becomes idle or is retired from active use unless the asset is fully depreciated. However, under activity methods of depreciation the depreciation charge can be zero while there is no operation.

 

 

3.1.7. Depreciable Amount, Economic Life and Residual Value

 

 

3.1.7.1. The depreciable amount of an asset is determined after deducting its residual value and shall be allocated on a systematic basis over its useful life.

 

3.1.7.2. Land and buildings are separable assets and are accounted for separately, even when they are acquired together. An increase in the value of the land on which a building stands does not affect the determination of the depreciable amount of the building.

 

3.1.7.3. The residual value and the useful life of an asset shall be reviewed at least at each financial year-end and, if expectations differ from previous estimates, the change(s) shall be accounted for as a change in an accounting estimate in accordance with IPSAS 3 Accounting Policies, Changes in Accounting Estimates and Errors.

 

3.1.7.4. The estimation of the useful life of the asset is a matter of judgment based on the experience of OSD with similar assets.

 

3.1.7.5. The useful life of an asset is defined in terms of the asset's expected utility to OSD and should consider all the following factors:

   a) expected usage of the asset by reference to the asset's expected capacity or physical output;

   b) expected physical wear and tear, which depends on operational factors such as the number of shifts for which the asset is to be used and the repair and maintenance plan and the care and maintenance of the asset while idle;

   c) Legal or similar limits on the use of the asset, such as the expiry dates of related leases.

 

 

3.1.8. Depreciation Method of Property, Plant and Equipment

 

 

3.1.8.1. The depreciation method used shall reflect the pattern in which the asset's future economic benefits are expected to be consumed by OSD.

 

3.1.8.2. The depreciation method applied to an asset shall be reviewed at least at each financial year-end and if there has been a significant change in the expected pattern of consumption of the future economic benefits in the asset, the method shall be changed to reflect the changed pattern. Such a change shall be accounted for as a change in an accounting estimate in accordance with IPSAS 3.

 

3.1.8.3. A variety of depreciation methods can be used to allocate the depreciable amount of an asset on a systematic basis over its useful life. These methods include the straight-line method, the diminishing balance method and the units of production method.

 

3.1.8.4. OSD should select the method that most closely reflects the expected pattern of consumption of the future economic benefits embodied in the asset. That method is applied consistently from period to period unless there is a change in the expected pattern of consumption of those future economic benefits.

 

 

3.1.9. Impairment and Compensation

 

 

3.1.9.1. To determine whether an item of property, plant and equipment is impaired, OSD shall apply IPSAS 21 for Impairment of Non-Cash-Generating Assets or IPSAS 26 Impairment of Cash-Generating Assets as appropriate.

 

3.1.9.2. Compensation from third parties for items of property, plant and equipment that were impaired, lost or given up shall be included in surplus or deficit when the compensation becomes receivable.

 

3.1.9.3. Impairments or losses of items of property, plant and equipment, related claims for or payments of compensation from third parties and any subsequent purchase or construction of replacement assets are separate economic events and are accounted for separately as follows:

   a) impairments of items of property, plant and equipment are recognized in accordance with IPSAS 21/26;

   b) de-recognition of items of property, plant and equipment retired or disposed of is determined in accordance with this standard;

   c) compensation from third parties for items of property, plant and equipment that were impaired, lost or given up is included in determining surplus or deficit when it becomes receivable; and

   d) the cost of items of property, plant and equipment restored, purchased or constructed as replacements is determined in accordance with this Standard.

 

 

3.1.10. De-recognition of Property, Plant and Equipment

 

 

3.1.10.1. The carrying amount of an item of property, plant and equipment shall be derecognized on disposal or when no future economic benefits are expected from its use or disposal.

 

3.1.10.2. The disposal of an item of property, plant and equipment may occur in a variety of ways (e.g. by discarding, sale, exchange, entering into a finance lease or by donation).

 

3.1.10.3. The date of disposal of an item of property, plant and equipment is the date the recipient obtains control of that item in accordance with the requirements for determining when a performance obligation is satisfied in IPSAS 9.

 

3.1.10.4. If OSD recognizes in the carrying amount of an item of property, plant and equipment the cost of a replacement for part of the item, then it de-recognizes the carrying amount of the replaced part regardless of whether the replaced part had been depreciated separately.

 

3.1.10.5. If it is not practicable for OSD to determine the carrying amount of the replaced part, OSD may use the cost of the replacement as an indication of what the cost of the replaced part was at the time it was acquired or constructed.

 

3.1.10.6. The gain or loss arising from the de-recognition of an item of property, plant and equipment shall be determined as the difference between the net disposal proceeds, if any, and the carrying amount of the item.

 

3.1.10.7. The gain or loss arising from the de-recognition of an item of property, plant and equipment shall be included in surplus or deficit when the item is de-recognized (unless IPSAS 13 Leases requires).

 

3.1.10.8. The gain arising from the de-recognition of an item of property, plant and equipment shall not be classified as revenue.

 

3.1.10.9. The amount of consideration to be included in the gain or loss arising from the de-recognition of an item of property, plant and equipment is determined in accordance with the requirements for determining the transaction price in IPSAS 9. Subsequent changes to the estimated amount of the consideration included in the gain or loss shall be accounted for in accordance with the requirements for changes in the transaction price in IPSAS 9.

 

 

3.1.11. Disclosure of Property, Plant and Equipment

 

 

3.1.11.1. The financial statements shall disclose, for each class of property, plant and equipment:

   a) the measurement bases used for determining the gross carrying amount;

   b) the depreciation methods used;

   c) the useful lives or the depreciation rates used;

   d) the gross carrying amount and the accumulated depreciation (aggregated with accumulated impairment losses) at the beginning and end of the period; and

   e) a reconciliation of the carrying amount at the beginning and end of the period showing the movements such as additions, assets classified as held for sale, depreciation, the amount of impairment losses recognized, and the amount of impairment losses reversed in accordance with IPSAS 21/26, transfers to and from and other changes.

 

3.1.11.2. The financial statements shall also disclose:

   a) the existence and amounts of restrictions on title, and property, plant and equipment pledged as security for liabilities;

   b) the amount of expenditures recognized in the carrying amount of an item of property, plant and equipment in the course of its construction;

   c) the amount of contractual commitments for the acquisition of property, plant and equipment; and

   d) if it is not disclosed separately in the statement of comprehensive income, the amount of compensation from third parties for items of property, plant and equipment that were impaired, lost or given up that is included in surplus or deficit.

 

3.1.11.3. In accordance with IPSAS 3, OSD shall disclose the nature and effect of a change in an accounting estimate that has an effect in the current period or is expected to have an effect in subsequent periods.

 

3.1.11.4. If items of property, plant and equipment are stated at revalued amounts, the following shall be disclosed:

   a) the effective date of the revaluation;

   b) whether an independent valuer was involved;

   c) for each revalued class of property, plant and equipment, the carrying amount that would have been recognized had the assets been carried under the cost model; and the revaluation surplus, indicating the change for the period and any restrictions on the distribution of the balance to shareholders.

 

3.1.11.5. In accordance with IPSAS 21/26 OSD discloses information on impaired property, plant and equipment in addition to the above information required.

 

3.1.11.6. Since users of financial statements may also find the following information relevant to their needs, OSD shall also disclose these amounts:

   a) the carrying amount of temporarily idle property, plant and equipment;

   b) the gross carrying amount of any fully depreciated property, plant and equipment that is still in use;

   c) the carrying amount of property, plant and equipment retired from active use and not classified as held for sale; and

   d) When the cost model is used, the fair value of property, plant and equipment if this is materially different from the carrying amount.

 

 

3.1.12. General Procedures and Control over PPE

 

 

3.1.12.1. All acquisitions, betterments and improvements of PPE shall be made in accordance with the approved budget and the authorization of the Manager or management for capital expenditure.

 

3.1.12.2. All assets with a cost exceeding ETB 2,000 shall be recorded as Property Plant and Equipment. The capitalization limit shall be reviewed periodically.

 

3.1.12.3. Conduct an annual inventory of all items of PPE. The accounting staff shall compare the record of fixed assets to their actual locations, take necessary adjustment where there is a change in location and also propose disposal of selected assets after considering their condition.

 

Organization For Social Development (OSD)

IPSAS based Accounting Policy and Procedures Manual

2021

 

 

3.1. Property, Plant and Equipment (continued)

 

 

3.1.12. General Procedures and Control over PPE (continued)

 

3.1.12.4. A detailed record shall be maintained of each item of PPE to identify, locate, cost, and determine the warranty provisions associated with each one.

 

3.1.12.5. All asset transfers to third party and disposals shall require Agency for Charities approval.

 

3.1.12.6. Conduct revaluations with sufficient regularity when the revaluation model is applied to a class of assets.

 

3.1.12.7. Subsequent Costs (i.e. repairs and Improvements) less than twenty percent (20%) of the net book value of the asset at the end of the tax year shall be recognized in surplus or deficit (expensed) as incurred.

 

3.1.12.8. If the cost of a repair or improvement (i.e. Subsequent costs) made to a depreciable asset during the year exceeds twenty percent (20%) of the net book value of the asset, the whole cost of the repair or improvement shall be added to the net book value of the asset (i.e. they are capitalized).

 

3.1.12.9. Periodically review (based on indicators) all items for impairment. The accounting staff shall regularly compare the carrying value of all items of PP&E to their fair (recoverable) value and write down the carrying value to the fair value if this is the lower amount.

 

3.1.12.10. Record the reversal of the impairment loss if needed.

 

 

3.1.13. Procedures of Coding PPE

 

 

3.1.13.1. Items of property, plant and equipment shall be given an identification number that facilitates easy identification and traceability.

 

3.1.13.2. The identification number shall identify the property, plant and equipment group, location and quantity of PPE in the group.

 

3.1.13.3. PPE items shall be individually identified by PP&E number.

 

3.1.13.4. The PPE number should normally appear on the body of the PP&E item for easy identification and physical control.

 

3.1.13.5. The PPE numbering guideline and coding shall be prepared by the finance division.

 

3.1.13.6. Assigning numbers for PPE items shall be scheduled along with the annual inventory/count for the first time.

 

3.1.13.7. The property Administration Division shall assign PPE numbers for new acquisitions in line with the guideline/coding chart.

 

 

3.1.14. Procedures and Control over Disposal of PPE

 

 

3.1.14.1. Disposal of PPE items may be caused by retirement, damage, obsolescence, redundancy and so forth.

 

3.1.14.2. Disposal may take different forms such as trade-in sale, selling as scrap, cannibalization etc.

 

3.1.14.3. A disposal committee formed by management shall periodically review and investigate the status of PPE and produce a proposal as the optimal alternative available regarding disposal of PPE.

 

3.1.14.4. The basis for disposal of PPE shall be the recommendation of the disposal Committee.

 

3.1.14.5. The recommendation of the disposal Committee shall be addressed to the ED.

 

3.1.14.6. The Executive Director having been satisfied with the recommendation of the disposal, will forward the proposal along with his/her opinion to the Charity Authority.

 

3.1.14.7. The board up on receiving the proposal of the disposal committee as endorsed by the ED shall check the methods of evaluation, data collected, and other relevant issues leading to the decision.

 

3.1.14.8. Approval from ED must be obtained before disposing the PP&E item.

 

3.1.14.9. All disposals should be notified to the appropriate regulatory/taxing body/charity agency for any consequences related to the disposal.

 

 

3.1.15. Procedures and Control over Low Value PPE

 

 

3.1.15.1. Items that fall under this property items category are those items whose service life extend beyond a year period but are not classified as PPE due to value threshold include a puncher, stapler, paper trays & the like.

 

3.1.15.2. Since these items are small in nature and easily movable, close control is essential.

 

3.1.15.3. These items are expensed at the time of purchase.

 

3.1.15.4. A record showing the user and the location of these items shall be maintained by the Store keeper Custodian respectively.

 

3.1.15.5. Up on issuance, these items shall be recorded on the property card of the user.

 

3.1.15.6. At the time property items become non-operational, the same should be returned to store and removed from the property card of the user.

 

 

3.1.16. Procedures and Control over Construction in Progress

 

 

3.1.16.1. Construction in progress refers to civil works or machinery that is under construction for use by OSD.

 

3.1.16.2. The construction activity may be undertaken by OSD itself or use the service of other companies depending on the case.

 

3.1.16.3. Construction projects, civil or machinery, are carried out as per the approved capital budget.

 

3.1.16.4. All concerned departments shall be informed of commencement of such project for subsequent follow-up and proper reporting.

 

3.1.16.5. The department in charge of the project shall provide the necessary documents evidencing expenditure in relation to the project to the finance directorate.

 

3.1.16.6. Cost associated to the construction in progress shall be summarized using a separate account for each project until transferred to the appropriate PPE group.

 

3.1.16.7. All costs that can be traced to the specific project shall be capitalized.

 

3.1.16.8. Depreciation shall not be calculated until the project is completed and transferred to the PPE account.

 

 

3.1.17. Internal Control over Property Plant and Equipment

 

 

3.1.17.1. The following controls should be installed to ensure that all assets are properly accounted for.

 

3.1.17.2. The head of finance shall ensure that asset purchases have appropriate prior authorization and purchases are supported by evidences such as proforma invoices, offer evaluation documents, purchase order, supplier invoices and goods receiving vouchers.

 

3.1.17.3. Ensure that expenditure for capital item is provided in capital budget.

 

3.1.17.4. Verify the amounts and quantities of items shown in purchase order with amounts indicated in the supplier's invoice and the fixed assets receiving voucher.

 

3.1.17.5. Ensure that ownership certificates and title deeds are kept locked and in secured places under the responsibility of the property administration division head.

 

3.1.17.6. Ensure that all items of property, plant and equipment have unique identification number and tag (label).

 

3.1.17.7. Ensure a separate property, plant and equipment register card is maintained for each item of property, plant and equipment. The property, plant and equipment register card must contain details such as description of asset, date of acquisition, acquisition cost, location, user department, property, plant and equipment number etc.

 

3.1.17.8. Ensure that transfer, relocation or movement of an item of property, plant and equipment shall be as per the approval by the ED of OSD.

 

3.1.17.9. Ensure that physical inventory of all items of property; plant and equipment are taken at the end of each fiscal year.

 

3.1.17.10. Ensure that the result of physical count is compared with the record and a report is produced summarizing the result of the count and recommendation as to appropriate course of action regarding variances and state of the property, plant and equipment.

 

3.1.17.11. Verify that correct depreciation calculations are being made.

 

3.1.17.12. Ensure that cost benefit analysis is made for investments in new item of property, plant and equipment and or replacement of old ones.

 

3.1.17.13. Ensure that capital construction projects are not delayed for accounting reasons as accounting rules require the interest expense associated with the construction of certain types of assets to be capitalized.

 

3.1.17.14. Review personally the physical status of construction projects in relation to planning documents (such as Gantt charts) and determining the validity of reasons for delays in completion.)

 

3.1.17.15. Verify that asset disposals are properly authorized.

 

3.1.17.16. Verify that appropriate procedures (competitive bid) are adhered in asset disposals.

 

3.1.17.17. Verify that all changes in asset retirement obligation assumptions are authorized.

 

3.1.17.18. Verify that cash receipts from asset sales are properly handled.

 

3.1.17.19. Verify that assets are being utilized.

 

3.1.17.20. Verify that tests for asset impairments are made.

 

 

3.2. Investment Property (IPSAS 16)

 

 

3.2.1. Nature and Definition

 

3.2.1.1. Investment property is property (land or a building or part of a building or both) held (by the owner or by the lessee as a right-of-use asset) to earn rentals or for capital appreciation or both, rather than for:

   a) use in the production or supply of goods or services or for administrative purposes; or

   b) sale in the ordinary course of business.

 

3.2.1.2. Carrying amount (for the purpose of this Standard) is the amount at which an asset is recognized in the statement of financial position.

 

3.2.1.3. Cost is the amount of cash or cash equivalents paid or the fair value of other consideration given to acquire an asset at the time of its acquisition or construction.

 

3.2.1.4. Owner-occupied property - is property held (by the owner or by the lessee under a finance lease) for use in the production or supply of goods or services, or for administrative purposes.

 

 

3.2.2. Recognition of Investment Property

 

 

3.2.2.1. An owned investment property shall be recognized as an asset when and only when:

   a) it is probable that the future economic benefits that are associated with the investment property will flow to OSD; and

   b) the cost of the investment property can be measured reliably.

 

 

3.2.3. Initial Measurement of Investment Property

 

 

3.2.3.1. Investment property shall be initially measured at cost, including transaction costs (i.e. Purchase price and any directly attributable expenditure such as professional fees for legal services, property transfer taxes and other transaction costs.

 

3.2.3.2. If payment for an investment property is deferred, its cost is the cash price equivalent. The difference between this amount and the total payments is recognized as interest expense over the period of credit.

 

3.2.3.3. Investment property acquired through non-exchange transactions is measured at fair value at the date of acquisition.

 

3.2.3.4. An investment property held by a lessee as a right-of-use asset shall be measured initially at its cost in accordance with IPSAS 13.

 

3.2.3.5. Where an investment property is acquired through a non-exchange transaction, its cost shall be measured at its fair value as at the date of acquisition.

 

 

3.2.4. Subsequent Measurement of Investment Property

 

 

3.2.4.1. After initial recognition, OSD shall choose either the Fair Value Model or the Cost Model as its accounting policy and shall apply that policy to an entire class of Investment Property.

 

Model 1: Fair Value Model

 

3.2.4.2. After initial recognition, if OSD chooses the fair value model, it shall measure all of its investment property at fair value, except in the extremely rare circumstances where comparable market transactions are infrequent and alternative reliable estimates of fair value are not available, then the cost model in IPSAS 17 is used.

 

3.2.4.3. A gain or loss arising from a change in the fair value of investment property shall be recognized in surplus or deficit for the period in which it arises.

 

3.2.4.4. If OSD has previously measured an investment property at fair value, it shall continue to measure the property at fair value until disposal (or until the property becomes owner-occupied property or OSD begins to develop the property for subsequent sale in the ordinary course of business) even if comparable market transactions become less frequent or market prices become less readily available.

 

3.2.4.5. If an entity uses the fair value model but, when a particular property is acquired, there is clear evidence that the entity will not be able to determine fair value on a continuing basis, the cost model is used for that property — and it shall continue to be used until disposal of the property. In that case, the residual value of the investment property shall be assumed to be zero.

 

Model 2: Cost Model

 

3.2.4.6. After initial recognition, if OSD chooses the cost model, it shall measure all of its investment property in accordance with IPSAS 17's requirements for that model, i.e., at cost less any accumulated depreciation and any accumulated impairment losses.

 

3.2.4.7. Under the cost model, OSD shall measure investment property:

   a) in accordance with IPSAS 13 if it is held by a lessee as a right-of-use asset and is not held for sale; and

   b) in accordance with the requirements in IPSAS 17 for the cost model in all other cases.

 

 

3.2.5. Transfer of Investment Property

 

 

3.2.5.1. Transfers to or from, investment property shall be made when, and only when, there is a change in use, evidenced by:

   a) commencement of owner-occupation, for a transfer from investment property to owner-occupied property;

   b) commencement of development with a view to sale, for a transfer from investment property to inventories;

   c) end of owner-occupation, for a transfer from owner-occupied property to investment property; or

   d) commencement of an operating lease to another party, for a transfer from inventories to investment property.

 

3.2.5.2. For a transfer from investment property carried at fair value to owner-occupied property or inventories, the properties deemed cost for subsequent accounting in accordance with IPSAS 17, IPSAS 13 or IPSAS 12 shall be its fair value at the date of change in use.

 

3.2.5.3. If an owner-occupied property becomes an investment property that will be carried at fair value, OSD shall apply IPSAS 17 for owned property and IPSAS 13 for property held by a lessee as a right-of-use asset up to the date of change in use.

 

3.2.5.4. OSD shall treat any difference at that date of transfer between the carrying amount of the property in accordance with IPSAS 17 or IPSAS 13 and its fair value in the same way as a revaluation in accordance with IPSAS 17.

 

3.2.5.5. For a transfer from inventories to investment property that will be carried at fair value, any difference between the fair value of the property at that date and its previous carrying amount shall be recognized in surplus or deficit.

 

3.2.5.6. When OSD completes the construction or development of a self-constructed investment property that will be carried at fair value, any difference between the fair value of the property at that date and its previous carrying amount shall be recognized in surplus or deficit.

 

 

3.2.6. Disposals of Investment Property

 

 

3.2.6.1. An investment property shall be derecognized (eliminated from the statement of financial position) on disposal or when the investment property is permanently withdrawn from use and no future economic benefits are expected from its disposal.

 

3.2.6.2. Gains or losses arising from the retirement or disposal of investment property shall be determined as the difference between the net disposal proceeds and the carrying amount of the asset, and shall be recognized in surplus or deficit (unless IPSAS 13 requires otherwise on a sale and leaseback) in the period of the retirement or disposal.

 

3.2.6.3. Compensation from third parties for investment property that was impaired, lost, or given up shall be recognized in surplus or deficit when the compensation becomes receivable.

 

 

3.2.7. Presentation and Disclosures of Investment Property

 

 

3.2.7.1. OSD shall disclose (Fair Value Model or Cost Model):

   a) Whether it applies the fair value model or the cost model.

   b) When classification is difficult, the criteria it uses to distinguish investment property from owner-occupied property and from property held for sale in the ordinary course.

   c) The extent to which the fair value of investment property (as measured or disclosed in the financial statements) is based on a valuation by an independent valuer who holds a recognized and relevant professional qualification.

   d) the amounts recognized in surplus or deficit for rental income, direct operating expenses, the cumulative change in fair value recognized in surplus or deficit on a sale of investment property;

   e) Contractual obligations to purchase, construct or develop investment property or for repairs, maintenance or enhancements.

   f) Reconciliation between the carrying amounts of investment property at the beginning and end of the period showing the movements such as additions, assets classified as held for sale, net gains or losses from fair value adjustments, transfers to and from inventories and owner-occupied property; and other changes.

 

3.2.7.2. When a valuation obtained for investment property is adjusted significantly for the purpose of the financial statements, for example to avoid double-counting of assets or liabilities that are recognized as separate assets and liabilities, OSD shall disclose a reconciliation between the valuation obtained and the adjusted valuation included in the financial statements, showing separately the aggregate amount of any recognized lease liabilities that have been added back, and any other significant adjustments.

 

3.2.7.3. In the exceptional cases when OSD measures investment property using the cost model in IPSAS 17 or in accordance with IPSAS 13, the reconciliation shall disclose amounts relating to that investment property separately from amounts relating to other investment property.

 

3.2.7.4. In addition, OSD shall disclose a description of the investment property; an explanation of why fair value cannot be measured reliably; if possible, the range of estimates within which fair value is highly likely to lie; and disposal of investment property not carried at fair value.

 

3.2.7.5. In addition to the disclosures required above, if OSD chooses to apply the cost model, it shall disclose:

   a) the depreciation methods used;

   b) the useful lives or the depreciation rates used; the gross carrying amount and the accumulated depreciation (aggregated with accumulated impairment losses) at the beginning and end of the period;

   c) the gross carrying amount and the accumulated depreciation (aggregated with accumulated impairment losses) at the beginning and end;

   d) a reconciliation of the carrying amount of investment property at the beginning and end of the period, showing the following additions, assets classified as held for sale, depreciation, the amount of impairment losses recognized, and the amount of impairment losses reversed in accordance with IPSAS 21/26, transfers to and from inventories and owner-occupied property; and other changes.

   e) In the exceptional cases, when OSD cannot measure the fair value of the investment property reliably, it shall disclose a description of the investment property, an explanation of why fair value cannot be measured reliably and if possible, the range of estimates within which fair value is highly likely to lie.

 

 

3.2.8. Procedures and Controls over Investment Property

 

 

Organization For Social Development (OSD)

IPSAS based Accounting Policy and Procedures Manual

2021

 

 

3.2. Investment Property (IPSAS 16) — continued

3.2.8. Procedures and Controls over Investment Property

 

 

3.2.8.1. All acquisitions, betterments and improvements of investment properties shall be made in accordance with the approved budget and the authorization of the ED or Board of Directors.

 

3.2.8.2. Planned capital expenditure programs should be tied directly to strategic goals and objectives of the organization. Investment appraisal on the cost benefit of the capital expenditure should be carried out by the Finance and Administration head to ensure that worthwhile investments are made.

 

3.2.8.3. Investment appraisal on the cost benefit will include the financing structure and the cost of different option of finance.

 

3.2.8.4. Each year, management should undertake fair value measurement of Investment Property, in view of increase or decrease in their values when fair value model is used. The gain or loss from such process is recorded as income or expense in surplus or deficit account.

 

3.2.8.5. When investment property is proved to be no more economical and/or effective to OSD, the asset need to be derecognized regardless of its carrying amount.

 

3.2.8.6. All investment properties shall be recorded in the books of accounts on receipt of the items against official receiving evidence.

 

3.2.8.7. The accountant in charge of noncurrent assets shall check the completeness and accuracy of documents and determines the cost of the asset to be recognized.

 

3.2.8.8. Journal entries to record investment property shall be recorded after the supporting documents are verified and approved by the Finance and Purchasing head via cash payments or general journal.

 

3.2.8.9. Ensure that ownership certificates and title deeds are kept locked and in secured places under the responsibility of the property administration division head.

 

 

3.3. Intangible Assets (IPSAS 31)

 

 

3.3.1. Nature and Definition

 

3.3.1.1. Intangible asset is an identifiable non-monetary asset without physical substance. An intangible asset meets the identifiability criterion when it:

   a) is separable, i.e. capable of being separated from OSD and sold, transferred, licensed, rented or exchanged, either individually or together with a related contract, asset or liability; or

   b) arises from contractual or other legal rights, regardless of whether those rights are transferable or separable from OSD or from other rights and obligations.

 

 

3.3.2. Initial Recognition and Measurement

 

 

3.3.2.1. An intangible asset shall be recognized, whether purchased or self-created (at cost) if, and only if:

   a) it is probable that the future economic benefits that are attributable to the asset will flow to OSD; and

   b) the cost of the asset can be measured reliably.

 

 

3.3.3. Subsequent Measurement

 

 

3.3.3.1. An intangible asset shall be carried at its cost less any accumulated amortization and any accumulated impairment losses.

 

3.3.3.2. Straight line amortization method shall be applied by OSD.

 

3.3.3.3. The useful life shall be the lower of legal life and expected economic life of the asset (as estimated by OSD's Management).

 

3.3.3.4. Subsequent expenditure on an intangible asset after its purchase or completion shall be recognized as an expense when it is incurred, unless it is probable that this expenditure will enable the asset to generate future economic benefits in excess of its originally assessed standard of performance and the expenditure can be measured and attributed to the asset reliably.

 

 

3.3.4. De-recognition

 

 

3.3.4.1. An intangible asset shall be derecognized on disposal; or when no future economic benefits are expected from its use or disposal.

 

3.3.4.2. The gain or loss arising from derecognition of an intangible asset shall be determined as the difference between the net disposal proceeds, if any, and the carrying amount of the asset.

 

 

3.3.5. Research & Development Costs of Internally Generated Intangible Assets

 

 

3.3.5.1. To assess whether an internally generated intangible asset meets the criteria for recognition, OSD shall classify the generation of the asset into:

   a) Research phase; and

   b) Development phase.

 

3.3.5.2. Expenditure on research (or on the research phase of an internal project) shall be recognized as an expense when it is incurred.

 

3.3.5.3. An intangible asset arising from development (or from the development phase of an internal project) shall be recognized if, and only if, OSD can demonstrate all of the following:

   a) the technical feasibility of completing the intangible asset so that it will be available for use or sale.

   b) its intention to complete the intangible asset and use or sell it.

   c) its ability to use or sell the intangible asset.

   d) how the intangible asset will generate probable future economic benefits. Among other things, OSD can demonstrate the existence of a market for the output of the intangible asset or the intangible asset itself or, if it is to be used internally, the usefulness of the intangible asset.

   e) the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset.

   f) its ability to measure reliably the expenditure attributable to the intangible asset during its development.

 

 

3.3.6. Presentation and Disclosure

 

 

3.3.6.1. A number of detailed disclosures are required for each class of intangible assets to enable users to determine the mechanisms and factors affecting intangible asset values. If OSD has recognized internally generated intangible assets, then the disclosure information shall be shown separately for these assets. Disclose:

   a) the amortization rates for intangible assets and the methods used;

   b) the identification of the line item in the Statement of Financial Performance where amortization has been charged, and separate disclosure of any impairment losses incurred (with any reversals);

   c) a full reconciliation of movements in the carrying amount of intangible assets, for example additions, amortization, impairment and disposals;

   d) net exchange differences that arose on translation; and

   e) the aggregate amount of research and development expenditure recognized as an expense during the period.

 

 

3.3.7. Amortization of Intangible Assets

 

 

3.3.7.1. The different policies and procedures specified shall be followed in the computation and recognition of amortization in the accounts of OSD.

 

3.3.7.2. The accountant in charge of intangible assets accounting shall compute the amortization of the assets using the appropriate rates.

 

3.3.7.3. The Finance and Purchasing head shall review and approve the amortization schedule before the entries are recorded in the books.

 

 

3.3.8. Impairment of Intangible Assets

 

 

3.3.8.1. Where management ensures that there is impairment of intangible assets, it shall be recognized in the accounts.

 

3.3.8.2. The detailed treatment of impairment shall be decided by management.

 

 

3.3.9. Accounting and documentation of Intangible Assets

 

 

3.3.9.1. All intangible assets shall be recorded in the books of accounts on receipt of the items (or obtaining the right granted by the government) against official receiving evidence or legal evidence.

 

3.3.9.2. If the intangible assets are acquired through purchase, the purchasing department / unit forwards relevant copies of documents that include:

   a) Approved purchase requisition form;

   b) Approved/ authorized tender analysis reports or equivalent document;

   c) Approved purchase order;

   d) Approved / authorized goods receiving vouchers, etc.

 

3.3.9.3. The accountant in charge shall check the completeness and accuracy of documents and determines the cost of the intangible asset to be recognized.

 

3.3.9.4. Journal entries to record intangible asset shall be recorded after the above supporting documents are verified and approved by the Finance and Purchasing head via cash payments or general journal.

 

 

3.3.10. Procedures and Controls over Intangible Assets

 

 

3.3.10.1. All acquisitions and advancement of intangible assets are made in accordance with the approved budget and the authorization of the ED.

 

3.3.10.2. Planned capital expenditure programs should be tied directly to strategic goals and objectives of the organization.

 

3.3.10.3. Investment appraisal on the cost benefit of the capital expenditure (especially on research & development) should be carried out by the Finance and Purchasing head to ensure that worthwhile Investment are made.

 

3.3.10.4. The investment appraisal shall include the financing structure and the cost of different options of finance.

 

 

3.4. Borrowing Costs (IPSAS 5)

 

 

3.4.1. Nature and Definition

 

3.4.1.1. Borrowing costs are interest and other costs incurred by OSD in connection with the borrowing of funds.

 

3.4.1.2. The following may be included in borrowing costs:

   a) Interest on bank overdrafts and short-term and long-term borrowings;

   b) Amortization of discounts or premiums relating to borrowings;

   c) Amortization of ancillary costs incurred in connection with the arrangement of borrowings;

   d) Finance charges in respect of leases recognized in accordance with IPSAS 13;

   e) Exchange differences arising from foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs.

 

3.4.1.3. Qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use or sale.

 

3.4.1.4. Depending on the circumstances, any of the following may be qualifying assets:

   a) office buildings

   b) Hospital

   c) Infrastructure assets such as roads, bridges and power generation facilities

   d) Inventories that require a substantial period of time to bring them to a condition ready for use or sale.

 

3.4.1.5. Other investments, and those assets that are routinely produced over a short period of time, are not qualifying assets. Assets that are ready for their intended use or sale when acquired also are not qualifying assets.

 

3.4.1.6. Assets that are ready for their intended use or sale when purchased are not qualifying assets.

 

 

3.4.2. Capitalization of Borrowing Costs

 

 

3.4.2.1. OSD should capitalize all eligible borrowing costs.

 

3.4.2.2. Only borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset can be capitalized as part of the cost of that asset (i.e. the costs that would have been avoided had the expenditure on the qualifying asset not been made).

 

3.4.2.3. Once the relevant borrowings are identified, which relate to a specific asset, and then the amount of borrowing costs available for capitalization will be the actual borrowing costs incurred on those borrowings during the period, less any investment income on the temporary investment of those borrowings.

 

3.4.2.4. In a situation where borrowings are obtained generally, but are applied in part to obtaining a qualifying asset, then the amount of borrowing costs eligible for capitalization is found by applying the 'capitalization rate' to the expenditure on the asset.

 

3.4.2.5. The capitalization rate is the weighted average of the borrowing costs applicable to OSD's borrowings that are outstanding during the period, excluding borrowings made specifically to obtain a qualifying asset.

 

3.4.2.6. However, there is a cap on the amount of borrowing costs calculated in this way (i.e. it must not exceed actual borrowing costs incurred.)

 

 

3.4.3. Commencement of Capitalization of Borrowing Costs

 

 

3.4.3.1. Three events must be taking place for capitalization of borrowing costs to be started:

   a) Expenditure on the asset is being incurred;

   b) Borrowing costs are being incurred;

   c) Activities are in progress that is necessary to prepare the asset for its intended use or sale.

 

3.4.3.2. Expenditure must result in the payment of cash, transfer of other assets or assumption of interest-bearing liabilities.

 

3.4.3.3. Deductions from expenditure will be made for any progress payments or grants received in connection with the asset.

 

3.4.3.4. IPSAS 5 allows the average carrying amount of the asset during a period (including borrowing costs previously capitalized) to be used as a reasonable approximation of the expenditure to which the capitalization rate is applied in the period.

 

3.4.3.5. Activities necessary to prepare the asset for its intended sale or use extend further than physical construction work such as technical and administrative work prior to construction, e.g. obtaining permits.

 

3.4.3.6. Activities necessary to prepare the asset for its intended sale or use do not include holding an asset when no production or development that changes the asset's condition is taking place (e.g. where land is held without any associated development activity).

 

 

3.4.4. Suspension of Capitalization of Borrowing Costs

 

 

3.4.4.1. If active development is interrupted for any extended periods, capitalization of borrowing costs should be suspended for those periods.

 

3.4.4.2. Suspension of capitalization of borrowing costs is not necessary for temporary delays or for periods when substantial technical or administrative work is taking place.

 

 

3.4.5. Cessation of Capitalization of Borrowing Costs

 

 

3.4.5.1. Once substantially all the activities necessary to prepare the qualifying asset for its intended use or sale are complete, then capitalization of borrowing costs should cease (i.e. when physical construction of the asset is completed, although minor modifications may still be outstanding).

 

3.4.5.2. The asset may be completed in parts or stages, where each part can be used while construction is still taking place on the other parts. Then, capitalization of borrowing costs should cease for each part as it is completed.

 

 

3.4.6. Disclosure of Borrowing Costs

 

 

3.4.6.1. The following should be disclosed in the financial statements in relation to borrowing costs:

   a) The accounting policy adopted for borrowing costs;

   b) Amount of borrowing costs capitalized during the period;

   c) Capitalization rate used to determine the amount of borrowing costs eligible for capitalization.

 

 

3.5. Impairment of Non-Cash-Generating Assets (IPSAS 21) and

     Impairment of Cash-Generating Assets (IPSAS 26)

 

 

3.5.1. Nature and Definitions

 

3.5.1.1. A cash-generating unit is the smallest identifiable group of assets held with the primary objective of generating a commercial return that generates cash inflows from continuing use that are largely independent of the cash inflows from other assets or groups of assets.

 

3.5.1.2. A Recoverable amount is the higher of an asset's or a cash-generating unit's fair value less costs to sell and its value in use.

 

3.5.1.3. A Value in use of a cash-generating asset is the present value of the estimated future cash flows expected to be derived from the continuing use of an asset and from its disposal at the end of its useful life.

 

3.5.1.4. Fair value less costs to sell is the amount obtainable from the sale of an asset in an arm's length transaction between knowledgeable, willing parties, less the costs of disposal.

 

3.5.1.5. An impairment is a loss in the future economic benefits or service potential of an asset, over and above the systematic recognition of the loss of the asset's future economic benefits or service potential through depreciation.

 

3.5.1.6. Non-cash-generating assets are assets other than cash-generating assets.

 

3.5.1.7. Useful life is either:

   a) The period of time over which an asset is expected to be used by the OSD; or

   b) The number of production or similar units expected to be obtained from the asset by the OSD.

 

3.5.1.8. Value in use of a non-cash-generating asset is the present value of the asset's remaining service potential.

 

 

3.5.2. Measuring Recoverable Amount and Value in Use

 

 

3.5.2.1. The following elements shall be reflected in the calculation of an asset's value in use:

   a) An estimate of the future cash flows OSD expects to derive from the asset;

   b) Expectations about possible variations in the amount or timing of those future cash flows;

   c) The time value of money represented by the current market rate of interest;

   d) The price for bearing the uncertainty inherent in the asset; and

   e) Other factors, such as illiquidity, that market participants would reflect in pricing the future cash flows OSD expects to derive from the asset.

 

3.5.2.2. Estimation of the future cash flows shall include:

   a) Projections of cash inflows from the continuing use of the asset;

   b) Projections of each outflows that are necessarily incurred to generate the cash inflows from continuing use of the asset (including the cash outflows to prepare the asset for use) and that can be directly attributed, or allocated on a reasonable and consistent basis, to the asset; and

   c) Net cash inflows, if any, to be received (or paid) for the disposal of the asset at the end of its useful life.

 

3.5.2.3. Future cash flows are estimated for the asset in its current condition. Such estimates do not include estimated future cash inflows or outflows that are expected to arise from a future restructuring to which OSD is not yet committed or improving or enhancing the asset's performance.

 

3.5.2.4. Estimates of future cash flows do not include cash inflows or outflows from financing activities and income tax receipts or payments.

 

3.5.2.5. The discount rate is a pre-tax rate that reflects current market assessments of the time value of money; and the risks specific to the asset for which the future cash flow estimates have not been adjusted.

 

 

3.5.3. Recognizing and Measuring an Impairment Loss

 

 

3.5.3.1. OSD shall recognize impairment loss if and only if the recoverable amount of an asset is less than its carrying amount. In such cases the carrying amount of the asset is reduced to its recoverable amount (i.e. Impairment loss).

 

3.5.3.2. After the recognition of an impairment loss, the depreciation (amortization) charge for the asset is adjusted in the future periods to allocate the assets revised carrying amount less its residential value (if any), on a systematic basis over its remaining useful life.

 

 

3.5.4. Reversing an Impairment Loss

 

 

3.5.4.1. OSD shall assess at each reporting date whether there is any indication that an impairment loss recognized in prior periods for an asset may no longer exist or may have decreased. If any such indication exists, OSD shall estimate the recoverable amount of that asset.

 

3.5.4.2. The increased carrying amount of an asset attributable to reversal of an impairment loss shall not exceed the carrying amount that would have been determined (net of amortization or depreciation) had no impairment loss been recognized for the asset in prior years. A reversal of an impairment loss is recognized immediately in surplus or deficit.

 

 

Organization For Social Development (OSD)

IPSAS based Accounting Policy and Procedures Manual

2021

 

 

3.2. Investment Property (IPSAS 16) — continued

3.2.8. Procedures and Controls over Investment Property

 

 

3.2.8.1. All acquisitions, betterments and improvements of investment properties shall be made in accordance with the approved budget and the authorization of the ED or Board of Directors.

 

3.2.8.2. Planned capital expenditure programs should be tied directly to strategic goals and objectives of the organization. Investment appraisal on the cost benefit of the capital expenditure should be carried out by the Finance and Administration head to ensure that worthwhile investments are made.

 

3.2.8.3. Investment appraisal on the cost benefit will include the financing structure and the cost of different option of finance.

 

3.2.8.4. Each year, management should undertake fair value measurement of Investment Property, in view of increase or decrease in their values when fair value model is used. The gain or loss from such process is recorded as income or expense in surplus or deficit account.

 

3.2.8.5. When investment property is proved to be no more economical and/or effective to OSD, the asset need to be derecognized regardless of its carrying amount.

 

3.2.8.6. All investment properties shall be recorded in the books of accounts on receipt of the items against official receiving evidence.

 

3.2.8.7. The accountant in charge of noncurrent assets shall check the completeness and accuracy of documents and determines the cost of the asset to be recognized.

 

3.2.8.8. Journal entries to record investment property shall be recorded after the supporting documents are verified and approved by the Finance and Purchasing head via cash payments or general journal.

 

3.2.8.9. Ensure that ownership certificates and title deeds are kept locked and in secured places under the responsibility of the property administration division head.

 

 

3.3. Intangible Assets (IPSAS 31)

 

 

3.3.1. Nature and Definition

 

3.3.1.1. Intangible asset is an identifiable non-monetary asset without physical substance. An intangible asset meets the identifiability criterion when it:

   a) is separable, i.e. capable of being separated from OSD and sold, transferred, licensed, rented or exchanged, either individually or together with a related contract, asset or liability; or

   b) arises from contractual or other legal rights, regardless of whether those rights are transferable or separable from OSD or from other rights and obligations.

 

 

3.3.2. Initial Recognition and Measurement

 

 

3.3.2.1. An intangible asset shall be recognized, whether purchased or self-created (at cost) if, and only if:

   a) it is probable that the future economic benefits that are attributable to the asset will flow to OSD; and

   b) the cost of the asset can be measured reliably.

 

 

3.3.3. Subsequent Measurement

 

 

3.3.3.1. An intangible asset shall be carried at its cost less any accumulated amortization and any accumulated impairment losses.

 

3.3.3.2. Straight line amortization method shall be applied by OSD.

 

3.3.3.3. The useful life shall be the lower of legal life and expected economic life of the asset (as estimated by OSD's Management).

 

3.3.3.4. Subsequent expenditure on an intangible asset after its purchase or completion shall be recognized as an expense when it is incurred, unless it is probable that this expenditure will enable the asset to generate future economic benefits in excess of its originally assessed standard of performance and the expenditure can be measured and attributed to the asset reliably.

 

 

3.3.4. De-recognition

 

 

3.3.4.1. An intangible asset shall be derecognized on disposal; or when no future economic benefits are expected from its use or disposal.

 

3.3.4.2. The gain or loss arising from derecognition of an intangible asset shall be determined as the difference between the net disposal proceeds, if any, and the carrying amount of the asset.

3.3.5. Research & Development Costs of Internally Generated Intangible Assets 

 

3.1.5.11. The revaluation surplus included in equity in respect of an item of property, plant and equipment may be transferred directly to retained earnings when the asset is de-recognized in one of two conditions.

   a) The whole amount of the surplus is transferred to retained earnings when the asset is retired or disposed of.

   b) Some of the surplus may be transferred as the asset is used by OSD (In such a case, the amount of the surplus transferred would be the difference between depreciation based on the revalued carrying amount of the asset and depreciation based on the asset's original cost).

 

3.1.5.12. Transfers from revaluation surplus to retained earnings are not made through surplus or deficit.

 

3.1.5.13. The effects of taxes on income, if any, resulting from the revaluation of property, plant and equipment are recognized and disclosed in accordance with IAS 12 Income Taxes.

 

Model 2: Cost Model

 

3.1.5.14. After recognition as an asset, an item of property, plant and equipment shall be carried at its cost less any accumulated depreciation and any accumulated impairment losses.

 

 

3.1.6. Depreciation of Property, Plant and Equipment

 

 

3.1.6.1. Depreciation of an asset begins when it is available for use, i.e. when it is in the location and condition necessary for it to be capable of operating in the manner intended by management.

 

3.1.6.2. Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item shall be depreciated separately.

 

3.1.6.3. If OSD acquires property, plant and equipment subject to an operating lease in which it is the lessor, it may be appropriate to depreciate separately amounts reflected in the cost of that item that are attributable to favorable or unfavorable lease terms relative to market terms.

 

3.1.6.4. The depreciation charge for a period shall be recognized in surplus or deficit (expensed) unless capitalized as per Inventories (IPSAS 12) or Intangible Assets (IPSAS 31).

 

3.1.6.5. Depreciation of an asset ceases at the earlier of the date that the asset is classified as held for sale (or included in a disposal group that is classified as held for sale) in accordance with IFRS 5 and the date that the asset is de-recognized.

 

3.1.6.6. Depreciation does not cease when the asset becomes idle or is retired from active use unless the asset is fully depreciated. However, under activity methods of depreciation the depreciation charge can be zero while there is no operation.

 

 

3.1.7. Depreciable Amount, Economic Life and Residual Value

 

 

3.1.7.1. The depreciable amount of an asset is determined after deducting its residual value and shall be allocated on a systematic basis over its useful life.

 

3.1.7.2. Land and buildings are separable assets and are accounted for separately, even when they are acquired together. An increase in the value of the land on which a building stands does not affect the determination of the depreciable amount of the building.

 

3.1.7.3. The residual value and the useful life of an asset shall be reviewed at least at each financial year-end and, if expectations differ from previous estimates, the change(s) shall be accounted for as a change in an accounting estimate in accordance with IPSAS 3 Accounting Policies, Changes in Accounting Estimates and Errors.

 

3.1.7.4. The estimation of the useful life of the asset is a matter of judgment based on the experience of OSD with similar assets.

 

3.1.7.5. The useful life of an asset is defined in terms of the asset's expected utility to OSD and should consider all the following factors:

   a) expected usage of the asset by reference to the asset's expected capacity or physical output;

   b) expected physical wear and tear, which depends on operational factors such as the number of shifts for which the asset is to be used and the repair and maintenance plan and the care and maintenance of the asset while idle;

   c) Legal or similar limits on the use of the asset, such as the expiry dates of related leases.

 

 

3.1.8. Depreciation Method of Property, Plant and Equipment

 

 

3.1.8.1. The depreciation method used shall reflect the pattern in which the asset's future economic benefits are expected to be consumed by OSD.

 

3.1.8.2. The depreciation method applied to an asset shall be reviewed at least at each financial year-end and if there has been a significant change in the expected pattern of consumption of the future economic benefits in the asset, the method shall be changed to reflect the changed pattern. Such a change shall be accounted for as a change in an accounting estimate in accordance with IPSAS 3.

 

3.1.8.3. A variety of depreciation methods can be used to allocate the depreciable amount of an asset on a systematic basis over its useful life. These methods include the straight-line method, the diminishing balance method and the units of production method.

 

3.1.8.4. OSD should select the method that most closely reflects the expected pattern of consumption of the future economic benefits embodied in the asset. That method is applied consistently from period to period unless there is a change in the expected pattern of consumption of those future economic benefits.

 

 

3.1.9. Impairment and Compensation

 

 

3.1.9.1. To determine whether an item of property, plant and equipment is impaired, OSD shall apply IPSAS 21 for Impairment of Non-Cash-Generating Assets or IPSAS 26 Impairment of Cash-Generating Assets as appropriate.

 

3.1.9.2. Compensation from third parties for items of property, plant and equipment that were impaired, lost or given up shall be included in surplus or deficit when the compensation becomes receivable.

 

3.1.9.3. Impairments or losses of items of property, plant and equipment, related claims for or payments of compensation from third parties and any subsequent purchase or construction of replacement assets are separate economic events and are accounted for separately as follows:

   a) impairments of items of property, plant and equipment are recognized in accordance with IPSAS 21/26;

   b) de-recognition of items of property, plant and equipment retired or disposed of is determined in accordance with this standard;

   c) compensation from third parties for items of property, plant and equipment that were impaired, lost or given up is included in determining surplus or deficit when it becomes receivable; and

   d) the cost of items of property, plant and equipment restored, purchased or constructed as replacements is determined in accordance with this Standard.

 

 

3.1.10. De-recognition of Property, Plant and Equipment

 

 

3.1.10.1. The carrying amount of an item of property, plant and equipment shall be derecognized on disposal or when no future economic benefits are expected from its use or disposal.

 

3.1.10.2. The disposal of an item of property, plant and equipment may occur in a variety of ways (e.g. by discarding, sale, exchange, entering into a finance lease or by donation).

 

3.1.10.3. The date of disposal of an item of property, plant and equipment is the date the recipient obtains control of that item in accordance with the requirements for determining when a performance obligation is satisfied in IPSAS 9.

 

3.1.10.4. If OSD recognizes in the carrying amount of an item of property, plant and equipment the cost of a replacement for part of the item, then it de-recognizes the carrying amount of the replaced part regardless of whether the replaced part had been depreciated separately.

 

3.1.10.5. If it is not practicable for OSD to determine the carrying amount of the replaced part, OSD may use the cost of the replacement as an indication of what the cost of the replaced part was at the time it was acquired or constructed.

 

3.1.10.6. The gain or loss arising from the de-recognition of an item of property, plant and equipment shall be determined as the difference between the net disposal proceeds, if any, and the carrying amount of the item.

 

3.1.10.7. The gain or loss arising from the de-recognition of an item of property, plant and equipment shall be included in surplus or deficit when the item is de-recognized (unless IPSAS 13 Leases requires).

 

3.1.10.8. The gain arising from the de-recognition of an item of property, plant and equipment shall not be classified as revenue.

 

3.1.10.9. The amount of consideration to be included in the gain or loss arising from the de-recognition of an item of property, plant and equipment is determined in accordance with the requirements for determining the transaction price in IPSAS 9. Subsequent changes to the estimated amount of the consideration included in the gain or loss shall be accounted for in accordance with the requirements for changes in the transaction price in IPSAS 9.

 

 

3.1.11. Disclosure of Property, Plant and Equipment

 

 

3.1.11.1. The financial statements shall disclose, for each class of property, plant and equipment:

   a) the measurement bases used for determining the gross carrying amount;

   b) the depreciation methods used;

   c) the useful lives or the depreciation rates used;

   d) the gross carrying amount and the accumulated depreciation (aggregated with accumulated impairment losses) at the beginning and end of the period; and

   e) a reconciliation of the carrying amount at the beginning and end of the period showing the movements such as additions, assets classified as held for sale, depreciation, the amount of impairment losses recognized, and the amount of impairment losses reversed in accordance with IPSAS 21/26, transfers to and from and other changes.

 

3.1.11.2. The financial statements shall also disclose:

   a) the existence and amounts of restrictions on title, and property, plant and equipment pledged as security for liabilities;

   b) the amount of expenditures recognized in the carrying amount of an item of property, plant and equipment in the course of its construction;

   c) the amount of contractual commitments for the acquisition of property, plant and equipment; and

   d) if it is not disclosed separately in the statement of comprehensive income, the amount of compensation from third parties for items of property, plant and equipment that were impaired, lost or given up that is included in surplus or deficit.

 

3.1.11.3. In accordance with IPSAS 3, OSD shall disclose the nature and effect of a change in an accounting estimate that has an effect in the current period or is expected to have an effect in subsequent periods.

 

3.1.11.4. If items of property, plant and equipment are stated at revalued amounts, the following shall be disclosed:

   a) the effective date of the revaluation;

   b) whether an independent valuer was involved;

   c) for each revalued class of property, plant and equipment, the carrying amount that would have been recognized had the assets been carried under the cost model; and the revaluation surplus, indicating the change for the period and any restrictions on the distribution of the balance to shareholders.

 

3.1.11.5. In accordance with IPSAS 21/26 OSD discloses information on impaired property, plant and equipment in addition to the above information required.

 

3.1.11.6. Since users of financial statements may also find the following information relevant to their needs, OSD shall also disclose these amounts:

   a) the carrying amount of temporarily idle property, plant and equipment;

   b) the gross carrying amount of any fully depreciated property, plant and equipment that is still in use;

   c) the carrying amount of property, plant and equipment retired from active use and not classified as held for sale; and

   d) When the cost model is used, the fair value of property, plant and equipment if this is materially different from the carrying amount.

 

 

3.1.12. General Procedures and Control over PPE

 

 

3.1.12.1. All acquisitions, betterments and improvements of PPE shall be made in accordance with the approved budget and the authorization of the Manager or management for capital expenditure.

 

3.1.12.2. All assets with a cost exceeding ETB 2,000 shall be recorded as Property Plant and Equipment. The capitalization limit shall be reviewed periodically.

 

3.1.12.3. Conduct an annual inventory of all items of PPE. The accounting staff shall compare the record of fixed assets to their actual locations, take necessary adjustment where there is a change in location and also propose disposal of selected assets after considering their condition.

 

Organization For Social Development (OSD)

IPSAS based Accounting Policy and Procedures Manual

2021

 

 

3.1. Property, Plant and Equipment (continued)

 

 

3.1.12. General Procedures and Control over PPE (continued)

 

3.1.12.4. A detailed record shall be maintained of each item of PPE to identify, locate, cost, and determine the warranty provisions associated with each one.

 

3.1.12.5. All asset transfers to third party and disposals shall require Agency for Charities approval.

 

3.1.12.6. Conduct revaluations with sufficient regularity when the revaluation model is applied to a class of assets.

 

3.1.12.7. Subsequent Costs (i.e. repairs and Improvements) less than twenty percent (20%) of the net book value of the asset at the end of the tax year shall be recognized in surplus or deficit (expensed) as incurred.

 

3.1.12.8. If the cost of a repair or improvement (i.e. Subsequent costs) made to a depreciable asset during the year exceeds twenty percent (20%) of the net book value of the asset, the whole cost of the repair or improvement shall be added to the net book value of the asset (i.e. they are capitalized).

 

3.1.12.9. Periodically review (based on indicators) all items for impairment. The accounting staff shall regularly compare the carrying value of all items of PP&E to their fair (recoverable) value and write down the carrying value to the fair value if this is the lower amount.

 

3.1.12.10. Record the reversal of the impairment loss if needed.

 

 

3.1.13. Procedures of Coding PPE

 

 

3.1.13.1. Items of property, plant and equipment shall be given an identification number that facilitates easy identification and traceability.

 

3.1.13.2. The identification number shall identify the property, plant and equipment group, location and quantity of PPE in the group.

 

3.1.13.3. PPE items shall be individually identified by PP&E number.

 

3.1.13.4. The PPE number should normally appear on the body of the PP&E item for easy identification and physical control.

 

3.1.13.5. The PPE numbering guideline and coding shall be prepared by the finance division.

 

3.1.13.6. Assigning numbers for PPE items shall be scheduled along with the annual inventory/count for the first time.

 

3.1.13.7. The property Administration Division shall assign PPE numbers for new acquisitions in line with the guideline/coding chart.

 

 

3.1.14. Procedures and Control over Disposal of PPE

 

 

3.1.14.1. Disposal of PPE items may be caused by retirement, damage, obsolescence, redundancy and so forth.

 

3.1.14.2. Disposal may take different forms such as trade-in sale, selling as scrap, cannibalization etc.

 

3.1.14.3. A disposal committee formed by management shall periodically review and investigate the status of PPE and produce a proposal as the optimal alternative available regarding disposal of PPE.

 

3.1.14.4. The basis for disposal of PPE shall be the recommendation of the disposal Committee.

 

3.1.14.5. The recommendation of the disposal Committee shall be addressed to the ED.

 

3.1.14.6. The Executive Director having been satisfied with the recommendation of the disposal, will forward the proposal along with his/her opinion to the Charity Authority.

 

3.1.14.7. The board up on receiving the proposal of the disposal committee as endorsed by the ED shall check the methods of evaluation, data collected, and other relevant issues leading to the decision.

 

3.1.14.8. Approval from ED must be obtained before disposing the PP&E item.

 

3.1.14.9. All disposals should be notified to the appropriate regulatory/taxing body/charity agency for any consequences related to the disposal.

 

 

3.1.15. Procedures and Control over Low Value PPE

 

 

3.1.15.1. Items that fall under this property items category are those items whose service life extend beyond a year period but are not classified as PPE due to value threshold include a puncher, stapler, paper trays & the like.

 

3.1.15.2. Since these items are small in nature and easily movable, close control is essential.

 

3.1.15.3. These items are expensed at the time of purchase.

 

3.1.15.4. A record showing the user and the location of these items shall be maintained by the Store keeper Custodian respectively.

 

3.1.15.5. Up on issuance, these items shall be recorded on the property card of the user.

 

3.1.15.6. At the time property items become non-operational, the same should be returned to store and removed from the property card of the user.

 

 

3.1.16. Procedures and Control over Construction in Progress

 

 

3.1.16.1. Construction in progress refers to civil works or machinery that is under construction for use by OSD.

 

3.1.16.2. The construction activity may be undertaken by OSD itself or use the service of other companies depending on the case.

 

3.1.16.3. Construction projects, civil or machinery, are carried out as per the approved capital budget.

 

3.1.16.4. All concerned departments shall be informed of commencement of such project for subsequent follow-up and proper reporting.

 

3.1.16.5. The department in charge of the project shall provide the necessary documents evidencing expenditure in relation to the project to the finance directorate.

 

3.1.16.6. Cost associated to the construction in progress shall be summarized using a separate account for each project until transferred to the appropriate PPE group.

 

3.1.16.7. All costs that can be traced to the specific project shall be capitalized.

 

3.1.16.8. Depreciation shall not be calculated until the project is completed and transferred to the PPE account.

 

 

3.1.17. Internal Control over Property Plant and Equipment

 

 

3.1.17.1. The following controls should be installed to ensure that all assets are properly accounted for.

 

3.1.17.2. The head of finance shall ensure that asset purchases have appropriate prior authorization and purchases are supported by evidences such as proforma invoices, offer evaluation documents, purchase order, supplier invoices and goods receiving vouchers.

 

3.1.17.3. Ensure that expenditure for capital item is provided in capital budget.

 

3.1.17.4. Verify the amounts and quantities of items shown in purchase order with amounts indicated in the supplier's invoice and the fixed assets receiving voucher.

 

3.1.17.5. Ensure that ownership certificates and title deeds are kept locked and in secured places under the responsibility of the property administration division head.

 

3.1.17.6. Ensure that all items of property, plant and equipment have unique identification number and tag (label).

 

3.1.17.7. Ensure a separate property, plant and equipment register card is maintained for each item of property, plant and equipment. The property, plant and equipment register card must contain details such as description of asset, date of acquisition, acquisition cost, location, user department, property, plant and equipment number etc.

 

3.1.17.8. Ensure that transfer, relocation or movement of an item of property, plant and equipment shall be as per the approval by the ED of OSD.

 

3.1.17.9. Ensure that physical inventory of all items of property; plant and equipment are taken at the end of each fiscal year.

 

3.1.17.10. Ensure that the result of physical count is compared with the record and a report is produced summarizing the result of the count and recommendation as to appropriate course of action regarding variances and state of the property, plant and equipment.

 

3.1.17.11. Verify that correct depreciation calculations are being made.

 

3.1.17.12. Ensure that cost benefit analysis is made for investments in new item of property, plant and equipment and or replacement of old ones.

 

3.1.17.13. Ensure that capital construction projects are not delayed for accounting reasons as accounting rules require the interest expense associated with the construction of certain types of assets to be capitalized.

 

3.1.17.14. Review personally the physical status of construction projects in relation to planning documents (such as Gantt charts) and determining the validity of reasons for delays in completion.)

 

3.1.17.15. Verify that asset disposals are properly authorized.

 

3.1.17.16. Verify that appropriate procedures (competitive bid) are adhered in asset disposals.

 

3.1.17.17. Verify that all changes in asset retirement obligation assumptions are authorized.

 

3.1.17.18. Verify that cash receipts from asset sales are properly handled.

 

3.1.17.19. Verify that assets are being utilized.

 

3.1.17.20. Verify that tests for asset impairments are made.

 

 

3.2. Investment Property (IPSAS 16)

 

 

3.2.1. Nature and Definition

 

3.2.1.1. Investment property is property (land or a building or part of a building or both) held (by the owner or by the lessee as a right-of-use asset) to earn rentals or for capital appreciation or both, rather than for:

   a) use in the production or supply of goods or services or for administrative purposes; or

   b) sale in the ordinary course of business.

 

3.2.1.2. Carrying amount (for the purpose of this Standard) is the amount at which an asset is recognized in the statement of financial position.

 

3.2.1.3. Cost is the amount of cash or cash equivalents paid or the fair value of other consideration given to acquire an asset at the time of its acquisition or construction.

 

3.2.1.4. Owner-occupied property - is property held (by the owner or by the lessee under a finance lease) for use in the production or supply of goods or services, or for administrative purposes.

 

 

3.2.2. Recognition of Investment Property

 

 

3.2.2.1. An owned investment property shall be recognized as an asset when and only when:

   a) it is probable that the future economic benefits that are associated with the investment property will flow to OSD; and

   b) the cost of the investment property can be measured reliably.

 

 

3.2.3. Initial Measurement of Investment Property

 

 

3.2.3.1. Investment property shall be initially measured at cost, including transaction costs (i.e. Purchase price and any directly attributable expenditure such as professional fees for legal services, property transfer taxes and other transaction costs.

 

3.2.3.2. If payment for an investment property is deferred, its cost is the cash price equivalent. The difference between this amount and the total payments is recognized as interest expense over the period of credit.

 

3.2.3.3. Investment property acquired through non-exchange transactions is measured at fair value at the date of acquisition.

 

3.2.3.4. An investment property held by a lessee as a right-of-use asset shall be measured initially at its cost in accordance with IPSAS 13.

 

3.2.3.5. Where an investment property is acquired through a non-exchange transaction, its cost shall be measured at its fair value as at the date of acquisition.

 

 

3.2.4. Subsequent Measurement of Investment Property

 

 

3.2.4.1. After initial recognition, OSD shall choose either the Fair Value Model or the Cost Model as its accounting policy and shall apply that policy to an entire class of Investment Property.

 

Model 1: Fair Value Model

 

3.2.4.2. After initial recognition, if OSD chooses the fair value model, it shall measure all of its investment property at fair value, except in the extremely rare circumstances where comparable market transactions are infrequent and alternative reliable estimates of fair value are not available, then the cost model in IPSAS 17 is used.

 

3.2.4.3. A gain or loss arising from a change in the fair value of investment property shall be recognized in surplus or deficit for the period in which it arises.

 

3.2.4.4. If OSD has previously measured an investment property at fair value, it shall continue to measure the property at fair value until disposal (or until the property becomes owner-occupied property or OSD begins to develop the property for subsequent sale in the ordinary course of business) even if comparable market transactions become less frequent or market prices become less readily available.

 

3.2.4.5. If an entity uses the fair value model but, when a particular property is acquired, there is clear evidence that the entity will not be able to determine fair value on a continuing basis, the cost model is used for that property — and it shall continue to be used until disposal of the property. In that case, the residual value of the investment property shall be assumed to be zero.

 

Model 2: Cost Model

 

3.2.4.6. After initial recognition, if OSD chooses the cost model, it shall measure all of its investment property in accordance with IPSAS 17's requirements for that model, i.e., at cost less any accumulated depreciation and any accumulated impairment losses.

 

3.2.4.7. Under the cost model, OSD shall measure investment property:

   a) in accordance with IPSAS 13 if it is held by a lessee as a right-of-use asset and is not held for sale; and

   b) in accordance with the requirements in IPSAS 17 for the cost model in all other cases.

 

 

3.2.5. Transfer of Investment Property

 

 

3.2.5.1. Transfers to or from, investment property shall be made when, and only when, there is a change in use, evidenced by:

   a) commencement of owner-occupation, for a transfer from investment property to owner-occupied property;

   b) commencement of development with a view to sale, for a transfer from investment property to inventories;

   c) end of owner-occupation, for a transfer from owner-occupied property to investment property; or

   d) commencement of an operating lease to another party, for a transfer from inventories to investment property.

 

3.2.5.2. For a transfer from investment property carried at fair value to owner-occupied property or inventories, the properties deemed cost for subsequent accounting in accordance with IPSAS 17, IPSAS 13 or IPSAS 12 shall be its fair value at the date of change in use.

 

3.2.5.3. If an owner-occupied property becomes an investment property that will be carried at fair value, OSD shall apply IPSAS 17 for owned property and IPSAS 13 for property held by a lessee as a right-of-use asset up to the date of change in use.

 

3.2.5.4. OSD shall treat any difference at that date of transfer between the carrying amount of the property in accordance with IPSAS 17 or IPSAS 13 and its fair value in the same way as a revaluation in accordance with IPSAS 17.

 

3.2.5.5. For a transfer from inventories to investment property that will be carried at fair value, any difference between the fair value of the property at that date and its previous carrying amount shall be recognized in surplus or deficit.

 

3.2.5.6. When OSD completes the construction or development of a self-constructed investment property that will be carried at fair value, any difference between the fair value of the property at that date and its previous carrying amount shall be recognized in surplus or deficit.

 

 

3.2.6. Disposals of Investment Property

 

 

3.2.6.1. An investment property shall be derecognized (eliminated from the statement of financial position) on disposal or when the investment property is permanently withdrawn from use and no future economic benefits are expected from its disposal.

 

3.2.6.2. Gains or losses arising from the retirement or disposal of investment property shall be determined as the difference between the net disposal proceeds and the carrying amount of the asset, and shall be recognized in surplus or deficit (unless IPSAS 13 requires otherwise on a sale and leaseback) in the period of the retirement or disposal.

 

3.2.6.3. Compensation from third parties for investment property that was impaired, lost, or given up shall be recognized in surplus or deficit when the compensation becomes receivable.

 

 

3.2.7. Presentation and Disclosures of Investment Property

 

 

3.2.7.1. OSD shall disclose (Fair Value Model or Cost Model):

   a) Whether it applies the fair value model or the cost model.

   b) When classification is difficult, the criteria it uses to distinguish investment property from owner-occupied property and from property held for sale in the ordinary course.

   c) The extent to which the fair value of investment property (as measured or disclosed in the financial statements) is based on a valuation by an independent valuer who holds a recognized and relevant professional qualification.

   d) the amounts recognized in surplus or deficit for rental income, direct operating expenses, the cumulative change in fair value recognized in surplus or deficit on a sale of investment property;

   e) Contractual obligations to purchase, construct or develop investment property or for repairs, maintenance or enhancements.

   f) Reconciliation between the carrying amounts of investment property at the beginning and end of the period showing the movements such as additions, assets classified as held for sale, net gains or losses from fair value adjustments, transfers to and from inventories and owner-occupied property; and other changes.

 

3.2.7.2. When a valuation obtained for investment property is adjusted significantly for the purpose of the financial statements, for example to avoid double-counting of assets or liabilities that are recognized as separate assets and liabilities, OSD shall disclose a reconciliation between the valuation obtained and the adjusted valuation included in the financial statements, showing separately the aggregate amount of any recognized lease liabilities that have been added back, and any other significant adjustments.

 

3.2.7.3. In the exceptional cases when OSD measures investment property using the cost model in IPSAS 17 or in accordance with IPSAS 13, the reconciliation shall disclose amounts relating to that investment property separately from amounts relating to other investment property.

 

3.2.7.4. In addition, OSD shall disclose a description of the investment property; an explanation of why fair value cannot be measured reliably; if possible, the range of estimates within which fair value is highly likely to lie; and disposal of investment property not carried at fair value.

 

3.2.7.5. In addition to the disclosures required above, if OSD chooses to apply the cost model, it shall disclose:

   a) the depreciation methods used;

   b) the useful lives or the depreciation rates used; the gross carrying amount and the accumulated depreciation (aggregated with accumulated impairment losses) at the beginning and end of the period;

   c) the gross carrying amount and the accumulated depreciation (aggregated with accumulated impairment losses) at the beginning and end;

   d) a reconciliation of the carrying amount of investment property at the beginning and end of the period, showing the following additions, assets classified as held for sale, depreciation, the amount of impairment losses recognized, and the amount of impairment losses reversed in accordance with IPSAS 21/26, transfers to and from inventories and owner-occupied property; and other changes.

   e) In the exceptional cases, when OSD cannot measure the fair value of the investment property reliably, it shall disclose a description of the investment property, an explanation of why fair value cannot be measured reliably and if possible, the range of estimates within which fair value is highly likely to lie.

 

 

3.2.8. Procedures and Controls over Investment Property

 

 

Organization For Social Development (OSD)

IPSAS based Accounting Policy and Procedures Manual

2021

 

 

3.2. Investment Property (IPSAS 16) — continued

3.2.8. Procedures and Controls over Investment Property

 

 

3.2.8.1. All acquisitions, betterments and improvements of investment properties shall be made in accordance with the approved budget and the authorization of the ED or Board of Directors.

 

3.2.8.2. Planned capital expenditure programs should be tied directly to strategic goals and objectives of the organization. Investment appraisal on the cost benefit of the capital expenditure should be carried out by the Finance and Administration head to ensure that worthwhile investments are made.

 

3.2.8.3. Investment appraisal on the cost benefit will include the financing structure and the cost of different option of finance.

 

3.2.8.4. Each year, management should undertake fair value measurement of Investment Property, in view of increase or decrease in their values when fair value model is used. The gain or loss from such process is recorded as income or expense in surplus or deficit account.

 

3.2.8.5. When investment property is proved to be no more economical and/or effective to OSD, the asset need to be derecognized regardless of its carrying amount.

 

3.2.8.6. All investment properties shall be recorded in the books of accounts on receipt of the items against official receiving evidence.

 

3.2.8.7. The accountant in charge of noncurrent assets shall check the completeness and accuracy of documents and determines the cost of the asset to be recognized.

 

3.2.8.8. Journal entries to record investment property shall be recorded after the supporting documents are verified and approved by the Finance and Purchasing head via cash payments or general journal.

 

3.2.8.9. Ensure that ownership certificates and title deeds are kept locked and in secured places under the responsibility of the property administration division head.

 

 

3.3. Intangible Assets (IPSAS 31)

 

 

3.3.1. Nature and Definition

 

3.3.1.1. Intangible asset is an identifiable non-monetary asset without physical substance. An intangible asset meets the identifiability criterion when it:

   a) is separable, i.e. capable of being separated from OSD and sold, transferred, licensed, rented or exchanged, either individually or together with a related contract, asset or liability; or

   b) arises from contractual or other legal rights, regardless of whether those rights are transferable or separable from OSD or from other rights and obligations.

 

 

3.3.2. Initial Recognition and Measurement

 

 

3.3.2.1. An intangible asset shall be recognized, whether purchased or self-created (at cost) if, and only if:

   a) it is probable that the future economic benefits that are attributable to the asset will flow to OSD; and

   b) the cost of the asset can be measured reliably.

 

 

3.3.3. Subsequent Measurement

 

 

3.3.3.1. An intangible asset shall be carried at its cost less any accumulated amortization and any accumulated impairment losses.

 

3.3.3.2. Straight line amortization method shall be applied by OSD.

 

3.3.3.3. The useful life shall be the lower of legal life and expected economic life of the asset (as estimated by OSD's Management).

 

3.3.3.4. Subsequent expenditure on an intangible asset after its purchase or completion shall be recognized as an expense when it is incurred, unless it is probable that this expenditure will enable the asset to generate future economic benefits in excess of its originally assessed standard of performance and the expenditure can be measured and attributed to the asset reliably.

 

 

3.3.4. De-recognition

 

 

3.3.4.1. An intangible asset shall be derecognized on disposal; or when no future economic benefits are expected from its use or disposal.

 

3.3.4.2. The gain or loss arising from derecognition of an intangible asset shall be determined as the difference between the net disposal proceeds, if any, and the carrying amount of the asset.

 

 

3.3.5. Research & Development Costs of Internally Generated Intangible Assets

 

 

3.3.5.1. To assess whether an internally generated intangible asset meets the criteria for recognition, OSD shall classify the generation of the asset into:

   a) Research phase; and

   b) Development phase.

 

3.3.5.2. Expenditure on research (or on the research phase of an internal project) shall be recognized as an expense when it is incurred.

 

3.3.5.3. An intangible asset arising from development (or from the development phase of an internal project) shall be recognized if, and only if, OSD can demonstrate all of the following:

   a) the technical feasibility of completing the intangible asset so that it will be available for use or sale.

   b) its intention to complete the intangible asset and use or sell it.

   c) its ability to use or sell the intangible asset.

   d) how the intangible asset will generate probable future economic benefits. Among other things, OSD can demonstrate the existence of a market for the output of the intangible asset or the intangible asset itself or, if it is to be used internally, the usefulness of the intangible asset.

   e) the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset.

   f) its ability to measure reliably the expenditure attributable to the intangible asset during its development.

 

 

3.3.6. Presentation and Disclosure

 

 

3.3.6.1. A number of detailed disclosures are required for each class of intangible assets to enable users to determine the mechanisms and factors affecting intangible asset values. If OSD has recognized internally generated intangible assets, then the disclosure information shall be shown separately for these assets. Disclose:

   a) the amortization rates for intangible assets and the methods used;

   b) the identification of the line item in the Statement of Financial Performance where amortization has been charged, and separate disclosure of any impairment losses incurred (with any reversals);

   c) a full reconciliation of movements in the carrying amount of intangible assets, for example additions, amortization, impairment and disposals;

   d) net exchange differences that arose on translation; and

   e) the aggregate amount of research and development expenditure recognized as an expense during the period.

 

 

3.3.7. Amortization of Intangible Assets

 

 

3.3.7.1. The different policies and procedures specified shall be followed in the computation and recognition of amortization in the accounts of OSD.

 

3.3.7.2. The accountant in charge of intangible assets accounting shall compute the amortization of the assets using the appropriate rates.

 

3.3.7.3. The Finance and Purchasing head shall review and approve the amortization schedule before the entries are recorded in the books.

 

 

3.3.8. Impairment of Intangible Assets

 

 

3.3.8.1. Where management ensures that there is impairment of intangible assets, it shall be recognized in the accounts.

 

3.3.8.2. The detailed treatment of impairment shall be decided by management.

 

 

3.3.9. Accounting and documentation of Intangible Assets

 

 

3.3.9.1. All intangible assets shall be recorded in the books of accounts on receipt of the items (or obtaining the right granted by the government) against official receiving evidence or legal evidence.

 

3.3.9.2. If the intangible assets are acquired through purchase, the purchasing department / unit forwards relevant copies of documents that include:

   a) Approved purchase requisition form;

   b) Approved/ authorized tender analysis reports or equivalent document;

   c) Approved purchase order;

   d) Approved / authorized goods receiving vouchers, etc.

 

3.3.9.3. The accountant in charge shall check the completeness and accuracy of documents and determines the cost of the intangible asset to be recognized.

 

3.3.9.4. Journal entries to record intangible asset shall be recorded after the above supporting documents are verified and approved by the Finance and Purchasing head via cash payments or general journal.

 

 

3.3.10. Procedures and Controls over Intangible Assets

 

 

3.3.10.1. All acquisitions and advancement of intangible assets are made in accordance with the approved budget and the authorization of the ED.

 

3.3.10.2. Planned capital expenditure programs should be tied directly to strategic goals and objectives of the organization.

 

3.3.10.3. Investment appraisal on the cost benefit of the capital expenditure (especially on research & development) should be carried out by the Finance and Purchasing head to ensure that worthwhile Investment are made.

 

3.3.10.4. The investment appraisal shall include the financing structure and the cost of different options of finance.

 

 

3.4. Borrowing Costs (IPSAS 5)

 

 

3.4.1. Nature and Definition

 

3.4.1.1. Borrowing costs are interest and other costs incurred by OSD in connection with the borrowing of funds.

 

3.4.1.2. The following may be included in borrowing costs:

   a) Interest on bank overdrafts and short-term and long-term borrowings;

   b) Amortization of discounts or premiums relating to borrowings;

   c) Amortization of ancillary costs incurred in connection with the arrangement of borrowings;

   d) Finance charges in respect of leases recognized in accordance with IPSAS 13;

   e) Exchange differences arising from foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs.

 

3.4.1.3. Qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use or sale.

 

3.4.1.4. Depending on the circumstances, any of the following may be qualifying assets:

   a) office buildings

   b) Hospital

   c) Infrastructure assets such as roads, bridges and power generation facilities

   d) Inventories that require a substantial period of time to bring them to a condition ready for use or sale.

 

3.4.1.5. Other investments, and those assets that are routinely produced over a short period of time, are not qualifying assets. Assets that are ready for their intended use or sale when acquired also are not qualifying assets.

 

3.4.1.6. Assets that are ready for their intended use or sale when purchased are not qualifying assets.

 

 

3.4.2. Capitalization of Borrowing Costs

 

 

3.4.2.1. OSD should capitalize all eligible borrowing costs.

 

3.4.2.2. Only borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset can be capitalized as part of the cost of that asset (i.e. the costs that would have been avoided had the expenditure on the qualifying asset not been made).

 

3.4.2.3. Once the relevant borrowings are identified, which relate to a specific asset, and then the amount of borrowing costs available for capitalization will be the actual borrowing costs incurred on those borrowings during the period, less any investment income on the temporary investment of those borrowings.

 

3.4.2.4. In a situation where borrowings are obtained generally, but are applied in part to obtaining a qualifying asset, then the amount of borrowing costs eligible for capitalization is found by applying the 'capitalization rate' to the expenditure on the asset.

 

3.4.2.5. The capitalization rate is the weighted average of the borrowing costs applicable to OSD's borrowings that are outstanding during the period, excluding borrowings made specifically to obtain a qualifying asset.

 

3.4.2.6. However, there is a cap on the amount of borrowing costs calculated in this way (i.e. it must not exceed actual borrowing costs incurred.)

 

 

3.4.3. Commencement of Capitalization of Borrowing Costs

 

 

3.4.3.1. Three events must be taking place for capitalization of borrowing costs to be started:

   a) Expenditure on the asset is being incurred;

   b) Borrowing costs are being incurred;

   c) Activities are in progress that is necessary to prepare the asset for its intended use or sale.

 

3.4.3.2. Expenditure must result in the payment of cash, transfer of other assets or assumption of interest-bearing liabilities.

 

3.4.3.3. Deductions from expenditure will be made for any progress payments or grants received in connection with the asset.

 

3.4.3.4. IPSAS 5 allows the average carrying amount of the asset during a period (including borrowing costs previously capitalized) to be used as a reasonable approximation of the expenditure to which the capitalization rate is applied in the period.

 

3.4.3.5. Activities necessary to prepare the asset for its intended sale or use extend further than physical construction work such as technical and administrative work prior to construction, e.g. obtaining permits.

 

3.4.3.6. Activities necessary to prepare the asset for its intended sale or use do not include holding an asset when no production or development that changes the asset's condition is taking place (e.g. where land is held without any associated development activity).

 

 

3.4.4. Suspension of Capitalization of Borrowing Costs

 

 

3.4.4.1. If active development is interrupted for any extended periods, capitalization of borrowing costs should be suspended for those periods.

 

3.4.4.2. Suspension of capitalization of borrowing costs is not necessary for temporary delays or for periods when substantial technical or administrative work is taking place.

 

 

3.4.5. Cessation of Capitalization of Borrowing Costs

 

 

3.4.5.1. Once substantially all the activities necessary to prepare the qualifying asset for its intended use or sale are complete, then capitalization of borrowing costs should cease (i.e. when physical construction of the asset is completed, although minor modifications may still be outstanding).

 

3.4.5.2. The asset may be completed in parts or stages, where each part can be used while construction is still taking place on the other parts. Then, capitalization of borrowing costs should cease for each part as it is completed.

 

 

3.4.6. Disclosure of Borrowing Costs

 

 

3.4.6.1. The following should be disclosed in the financial statements in relation to borrowing costs:

   a) The accounting policy adopted for borrowing costs;

   b) Amount of borrowing costs capitalized during the period;

   c) Capitalization rate used to determine the amount of borrowing costs eligible for capitalization.

 

 

3.5. Impairment of Non-Cash-Generating Assets (IPSAS 21) and

     Impairment of Cash-Generating Assets (IPSAS 26)

 

 

3.5.1. Nature and Definitions

 

3.5.1.1. A cash-generating unit is the smallest identifiable group of assets held with the primary objective of generating a commercial return that generates cash inflows from continuing use that are largely independent of the cash inflows from other assets or groups of assets.

 

3.5.1.2. A Recoverable amount is the higher of an asset's or a cash-generating unit's fair value less costs to sell and its value in use.

 

3.5.1.3. A Value in use of a cash-generating asset is the present value of the estimated future cash flows expected to be derived from the continuing use of an asset and from its disposal at the end of its useful life.

 

3.5.1.4. Fair value less costs to sell is the amount obtainable from the sale of an asset in an arm's length transaction between knowledgeable, willing parties, less the costs of disposal.

 

3.5.1.5. An impairment is a loss in the future economic benefits or service potential of an asset, over and above the systematic recognition of the loss of the asset's future economic benefits or service potential through depreciation.

 

3.5.1.6. Non-cash-generating assets are assets other than cash-generating assets.

 

3.5.1.7. Useful life is either:

   a) The period of time over which an asset is expected to be used by the OSD; or

   b) The number of production or similar units expected to be obtained from the asset by the OSD.

 

3.5.1.8. Value in use of a non-cash-generating asset is the present value of the asset's remaining service potential.

 

 

3.5.2. Measuring Recoverable Amount and Value in Use

 

 

3.5.2.1. The following elements shall be reflected in the calculation of an asset's value in use:

   a) An estimate of the future cash flows OSD expects to derive from the asset;

   b) Expectations about possible variations in the amount or timing of those future cash flows;

   c) The time value of money represented by the current market rate of interest;

   d) The price for bearing the uncertainty inherent in the asset; and

   e) Other factors, such as illiquidity, that market participants would reflect in pricing the future cash flows OSD expects to derive from the asset.

 

3.5.2.2. Estimation of the future cash flows shall include:

   a) Projections of cash inflows from the continuing use of the asset;

   b) Projections of each outflows that are necessarily incurred to generate the cash inflows from continuing use of the asset (including the cash outflows to prepare the asset for use) and that can be directly attributed, or allocated on a reasonable and consistent basis, to the asset; and

   c) Net cash inflows, if any, to be received (or paid) for the disposal of the asset at the end of its useful life.

 

3.5.2.3. Future cash flows are estimated for the asset in its current condition. Such estimates do not include estimated future cash inflows or outflows that are expected to arise from a future restructuring to which OSD is not yet committed or improving or enhancing the asset's performance.

 

3.5.2.4. Estimates of future cash flows do not include cash inflows or outflows from financing activities and income tax receipts or payments.

 

3.5.2.5. The discount rate is a pre-tax rate that reflects current market assessments of the time value of money; and the risks specific to the asset for which the future cash flow estimates have not been adjusted.

 

 

3.5.3. Recognizing and Measuring an Impairment Loss

 

 

3.5.3.1. OSD shall recognize impairment loss if and only if the recoverable amount of an asset is less than its carrying amount. In such cases the carrying amount of the asset is reduced to its recoverable amount (i.e. Impairment loss).

 

3.5.3.2. After the recognition of an impairment loss, the depreciation (amortization) charge for the asset is adjusted in the future periods to allocate the assets revised carrying amount less its residential value (if any), on a systematic basis over its remaining useful life.

 

 

3.5.4. Reversing an Impairment Loss

 

 

3.5.4.1. OSD shall assess at each reporting date whether there is any indication that an impairment loss recognized in prior periods for an asset may no longer exist or may have decreased. If any such indication exists, OSD shall estimate the recoverable amount of that asset.

 

3.5.4.2. The increased carrying amount of an asset attributable to reversal of an impairment loss shall not exceed the carrying amount that would have been determined (net of amortization or depreciation) had no impairment loss been recognized for the asset in prior years. A reversal of an impairment loss is recognized immediately in surplus or deficit.

 

 

Organization For Social Development (OSD)

IPSAS based Accounting Policy and Procedures Manual

2021

 

 

3.2. Investment Property (IPSAS 16) — continued

3.2.8. Procedures and Controls over Investment Property

 

 

3.2.8.1. All acquisitions, betterments and improvements of investment properties shall be made in accordance with the approved budget and the authorization of the ED or Board of Directors.

 

3.2.8.2. Planned capital expenditure programs should be tied directly to strategic goals and objectives of the organization. Investment appraisal on the cost benefit of the capital expenditure should be carried out by the Finance and Administration head to ensure that worthwhile investments are made.

 

3.2.8.3. Investment appraisal on the cost benefit will include the financing structure and the cost of different option of finance.

 

3.2.8.4. Each year, management should undertake fair value measurement of Investment Property, in view of increase or decrease in their values when fair value model is used. The gain or loss from such process is recorded as income or expense in surplus or deficit account.

 

3.2.8.5. When investment property is proved to be no more economical and/or effective to OSD, the asset need to be derecognized regardless of its carrying amount.

 

3.2.8.6. All investment properties shall be recorded in the books of accounts on receipt of the items against official receiving evidence.

 

3.2.8.7. The accountant in charge of noncurrent assets shall check the completeness and accuracy of documents and determines the cost of the asset to be recognized.

 

3.2.8.8. Journal entries to record investment property shall be recorded after the supporting documents are verified and approved by the Finance and Purchasing head via cash payments or general journal.

 

3.2.8.9. Ensure that ownership certificates and title deeds are kept locked and in secured places under the responsibility of the property administration division head.

 

 

3.3. Intangible Assets (IPSAS 31)

 

 

3.3.1. Nature and Definition

 

3.3.1.1. Intangible asset is an identifiable non-monetary asset without physical substance. An intangible asset meets the identifiability criterion when it:

   a) is separable, i.e. capable of being separated from OSD and sold, transferred, licensed, rented or exchanged, either individually or together with a related contract, asset or liability; or

   b) arises from contractual or other legal rights, regardless of whether those rights are transferable or separable from OSD or from other rights and obligations.

 

 

3.3.2. Initial Recognition and Measurement

 

 

3.3.2.1. An intangible asset shall be recognized, whether purchased or self-created (at cost) if, and only if:

   a) it is probable that the future economic benefits that are attributable to the asset will flow to OSD; and

   b) the cost of the asset can be measured reliably.

 

 

3.3.3. Subsequent Measurement

 

 

3.3.3.1. An intangible asset shall be carried at its cost less any accumulated amortization and any accumulated impairment losses.

 

3.3.3.2. Straight line amortization method shall be applied by OSD.

 

3.3.3.3. The useful life shall be the lower of legal life and expected economic life of the asset (as estimated by OSD's Management).

 

3.3.3.4. Subsequent expenditure on an intangible asset after its purchase or completion shall be recognized as an expense when it is incurred, unless it is probable that this expenditure will enable the asset to generate future economic benefits in excess of its originally assessed standard of performance and the expenditure can be measured and attributed to the asset reliably.

 

 

3.3.4. De-recognition

 

 

3.3.4.1. An intangible asset shall be derecognized on disposal; or when no future economic benefits are expected from its use or disposal.

 

3.3.4.2. The gain or loss arising from derecognition of an intangible asset shall be determined as the difference between the net disposal proceeds, if any, and the carrying amount of the asset.

 

 

3.3.5. Research & Development Costs of Internally Generated Intangible Assets

 

3.3.5.1. To assess whether an internally generated intangible asset meets the criteria for recognition, OSD shall classify the generation of the asset into:

   a) Research phase; and

   b) Development phase.

 

3.3.5.2. Expenditure on research (or on the research phase of an internal project) shall be recognized as an expense when it is incurred.

 

3.3.5.3. An intangible asset arising from development (or from the development phase of an internal project) shall be recognized if, and only if, OSD can demonstrate all of the following:

   a) the technical feasibility of completing the intangible asset so that it will be available for use or sale.

   b) its intention to complete the intangible asset and use or sell it.

   c) its ability to use or sell the intangible asset.

   d) how the intangible asset will generate probable future economic benefits. Among other things, OSD can demonstrate the existence of a market for the output of the intangible asset or the intangible asset itself or, if it is to be used internally, the usefulness of the intangible asset.

   e) the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset.

   f) its ability to measure reliably the expenditure attributable to the intangible asset during its development.

 

 

3.3.6. Presentation and Disclosure

 

 

3.3.6.1. A number of detailed disclosures are required for each class of intangible assets to enable users to determine the mechanisms and factors affecting intangible asset values. If OSD has recognized internally generated intangible assets, then the disclosure information shall be shown separately for these assets. Disclose:

   a) the amortization rates for intangible assets and the methods used;

   b) the identification of the line item in the Statement of Financial Performance where amortization has been charged, and separate disclosure of any impairment losses incurred (with any reversals);

   c) a full reconciliation of movements in the carrying amount of intangible assets, for example additions, amortization, impairment and disposals;

   d) net exchange differences that arose on translation; and

   e) the aggregate amount of research and development expenditure recognized as an expense during the period.

 

 

3.3.7. Amortization of Intangible Assets

 

 

3.3.7.1. The different policies and procedures specified shall be followed in the computation and recognition of amortization in the accounts of OSD.

 

3.3.7.2. The accountant in charge of intangible assets accounting shall compute the amortization of the assets using the appropriate rates.

 

3.3.7.3. The Finance and Purchasing head shall review and approve the amortization schedule before the entries are recorded in the books.

 

 

3.3.8. Impairment of Intangible Assets

 

 

3.3.8.1. Where management ensures that there is impairment of intangible assets, it shall be recognized in the accounts.

 

3.3.8.2. The detailed treatment of impairment shall be decided by management.

 

 

3.3.9. Accounting and documentation of Intangible Assets

 

 

3.3.9.1. All intangible assets shall be recorded in the books of accounts on receipt of the items (or obtaining the right granted by the government) against official receiving evidence or legal evidence.

 

3.3.9.2. If the intangible assets are acquired through purchase, the purchasing department / unit forwards relevant copies of documents that include:

   a) Approved purchase requisition form;

   b) Approved/ authorized tender analysis reports or equivalent document;

   c) Approved purchase order;

   d) Approved / authorized goods receiving vouchers, etc.

 

3.3.9.3. The accountant in charge shall check the completeness and accuracy of documents and determines the cost of the intangible asset to be recognized.

 

3.3.9.4. Journal entries to record intangible asset shall be recorded after the above supporting documents are verified and approved by the Finance and Purchasing head via cash payments or general journal.

 

 

3.3.10. Procedures and Controls over Intangible Assets

 

 

3.3.10.1. All acquisitions and advancement of intangible assets are made in accordance with the approved budget and the authorization of the ED.

 

3.3.10.2. Planned capital expenditure programs should be tied directly to strategic goals and objectives of the organization.

 

3.3.10.3. Investment appraisal on the cost benefit of the capital expenditure (especially on research & development) should be carried out by the Finance and Purchasing head to ensure that worthwhile Investment are made.

 

3.3.10.4. The investment appraisal shall include the financing structure and the cost of different options of finance.

 

 

3.4. Borrowing Costs (IPSAS 5)

 

 

3.4.1. Nature and Definition

 

3.4.1.1. Borrowing costs are interest and other costs incurred by OSD in connection with the borrowing of funds.

 

3.4.1.2. The following may be included in borrowing costs:

   a) Interest on bank overdrafts and short-term and long-term borrowings;

   b) Amortization of discounts or premiums relating to borrowings;

   c) Amortization of ancillary costs incurred in connection with the arrangement of borrowings;

   d) Finance charges in respect of leases recognized in accordance with IPSAS 13;

   e) Exchange differences arising from foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs.

 

3.4.1.3. Qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use or sale.

 

3.4.1.4. Depending on the circumstances, any of the following may be qualifying assets:

   a) office buildings

   b) Hospital

   c) Infrastructure assets such as roads, bridges and power generation facilities

   d) Inventories that require a substantial period of time to bring them to a condition ready for use or sale.

 

3.4.1.5. Other investments, and those assets that are routinely produced over a short period of time, are not qualifying assets. Assets that are ready for their intended use or sale when acquired also are not qualifying assets.

 

3.4.1.6. Assets that are ready for their intended use or sale when purchased are not qualifying assets.

 

 

3.4.2. Capitalization of Borrowing Costs

 

 

3.4.2.1. OSD should capitalize all eligible borrowing costs.

 

3.4.2.2. Only borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset can be capitalized as part of the cost of that asset (i.e. the costs that would have been avoided had the expenditure on the qualifying asset not been made).

 

3.4.2.3. Once the relevant borrowings are identified, which relate to a specific asset, and then the amount of borrowing costs available for capitalization will be the actual borrowing costs incurred on those borrowings during the period, less any investment income on the temporary investment of those borrowings.

 

3.4.2.4. In a situation where borrowings are obtained generally, but are applied in part to obtaining a qualifying asset, then the amount of borrowing costs eligible for capitalization is found by applying the 'capitalization rate' to the expenditure on the asset.

 

3.4.2.5. The capitalization rate is the weighted average of the borrowing costs applicable to OSD's borrowings that are outstanding during the period, excluding borrowings made specifically to obtain a qualifying asset.

 

3.4.2.6. However, there is a cap on the amount of borrowing costs calculated in this way (i.e. it must not exceed actual borrowing costs incurred.)

 

 

3.4.3. Commencement of Capitalization of Borrowing Costs

 

 

3.4.3.1. Three events must be taking place for capitalization of borrowing costs to be started:

   a) Expenditure on the asset is being incurred;

   b) Borrowing costs are being incurred;

   c) Activities are in progress that is necessary to prepare the asset for its intended use or sale.

 

3.4.3.2. Expenditure must result in the payment of cash, transfer of other assets or assumption of interest-bearing liabilities.

 

3.4.3.3. Deductions from expenditure will be made for any progress payments or grants received in connection with the asset.

 

3.4.3.4. IPSAS 5 allows the average carrying amount of the asset during a period (including borrowing costs previously capitalized) to be used as a reasonable approximation of the expenditure to which the capitalization rate is applied in the period.

 

3.4.3.5. Activities necessary to prepare the asset for its intended sale or use extend further than physical construction work such as technical and administrative work prior to construction, e.g. obtaining permits.

 

3.4.3.6. Activities necessary to prepare the asset for its intended sale or use do not include holding an asset when no production or development that changes the asset's condition is taking place (e.g. where land is held without any associated development activity).

 

 

3.4.4. Suspension of Capitalization of Borrowing Costs

 

 

3.4.4.1. If active development is interrupted for any extended periods, capitalization of borrowing costs should be suspended for those periods.

 

3.4.4.2. Suspension of capitalization of borrowing costs is not necessary for temporary delays or for periods when substantial technical or administrative work is taking place.

 

 

3.4.5. Cessation of Capitalization of Borrowing Costs

 

 

3.4.5.1. Once substantially all the activities necessary to prepare the qualifying asset for its intended use or sale are complete, then capitalization of borrowing costs should cease (i.e. when physical construction of the asset is completed, although minor modifications may still be outstanding).

 

3.4.5.2. The asset may be completed in parts or stages, where each part can be used while construction is still taking place on the other parts. Then, capitalization of borrowing costs should cease for each part as it is completed.

 

 

3.4.6. Disclosure of Borrowing Costs

 

 

3.4.6.1. The following should be disclosed in the financial statements in relation to borrowing costs:

   a) The accounting policy adopted for borrowing costs;

   b) Amount of borrowing costs capitalized during the period;

   c) Capitalization rate used to determine the amount of borrowing costs eligible for capitalization.

 

 

3.5. Impairment of Non-Cash-Generating Assets (IPSAS 21) and

     Impairment of Cash-Generating Assets (IPSAS 26)

 

 

3.5.1. Nature and Definitions

 

3.5.1.1. A cash-generating unit is the smallest identifiable group of assets held with the primary objective of generating a commercial return that generates cash inflows from continuing use that are largely independent of the cash inflows from other assets or groups of assets.

 

3.5.1.2. A Recoverable amount is the higher of an asset's or a cash-generating unit's fair value less costs to sell and its value in use.

 

3.5.1.3. A Value in use of a cash-generating asset is the present value of the estimated future cash flows expected to be derived from the continuing use of an asset and from its disposal at the end of its useful life.

 

3.5.1.4. Fair value less costs to sell is the amount obtainable from the sale of an asset in an arm's length transaction between knowledgeable, willing parties, less the costs of disposal.

 

3.5.1.5. An impairment is a loss in the future economic benefits or service potential of an asset, over and above the systematic recognition of the loss of the asset's future economic benefits or service potential through depreciation.

 

3.5.1.6. Non-cash-generating assets are assets other than cash-generating assets.

 

3.5.1.7. Useful life is either:

   a) The period of time over which an asset is expected to be used by the OSD; or

   b) The number of production or similar units expected to be obtained from the asset by the OSD.

 

3.5.1.8. Value in use of a non-cash-generating asset is the present value of the asset's remaining service potential.

 

 

3.5.2. Measuring Recoverable Amount and Value in Use

 

 

3.5.2.1. The following elements shall be reflected in the calculation of an asset's value in use:

   a) An estimate of the future cash flows OSD expects to derive from the asset;

   b) Expectations about possible variations in the amount or timing of those future cash flows;

   c) The time value of money represented by the current market rate of interest;

   d) The price for bearing the uncertainty inherent in the asset; and

   e) Other factors, such as illiquidity, that market participants would reflect in pricing the future cash flows OSD expects to derive from the asset.

 

3.5.2.2. Estimation of the future cash flows shall include:

   a) Projections of cash inflows from the continuing use of the asset;

   b) Projections of each outflows that are necessarily incurred to generate the cash inflows from continuing use of the asset (including the cash outflows to prepare the asset for use) and that can be directly attributed, or allocated on a reasonable and consistent basis, to the asset; and

   c) Net cash inflows, if any, to be received (or paid) for the disposal of the asset at the end of its useful life.

 

3.5.2.3. Future cash flows are estimated for the asset in its current condition. Such estimates do not include estimated future cash inflows or outflows that are expected to arise from a future restructuring to which OSD is not yet committed or improving or enhancing the asset's performance.

 

3.5.2.4. Estimates of future cash flows do not include cash inflows or outflows from financing activities and income tax receipts or payments.

 

3.5.2.5. The discount rate is a pre-tax rate that reflects current market assessments of the time value of money; and the risks specific to the asset for which the future cash flow estimates have not been adjusted.

 

 

3.5.3. Recognizing and Measuring an Impairment Loss

 

 

3.5.3.1. OSD shall recognize impairment loss if and only if the recoverable amount of an asset is less than its carrying amount. In such cases the carrying amount of the asset is reduced to its recoverable amount (i.e. Impairment loss).

 

3.5.3.2. After the recognition of an impairment loss, the depreciation (amortization) charge for the asset is adjusted in the future periods to allocate the assets revised carrying amount less its residential value (if any), on a systematic basis over its remaining useful life.

 

 

3.5.4. Reversing an Impairment Loss

 

 

3.5.4.1. OSD shall assess at each reporting date whether there is any indication that an impairment loss recognized in prior periods for an asset may no longer exist or may have decreased. If any such indication exists, OSD shall estimate the recoverable amount of that asset.

 

3.5.4.2. The increased carrying amount of an asset attributable to reversal of an impairment loss shall not exceed the carrying amount that would have been determined (net of amortization or depreciation) had no impairment loss been recognized for the asset in prior years. A reversal of an impairment loss is recognized immediately in surplus or deficit.

 

 

Organization For Social Development (OSD)

IPSAS based Accounting Policy and Procedures Manual

2021

 

 

3.2. Investment Property (IPSAS 16) — continued

3.2.8. Procedures and Controls over Investment Property

 

 

3.2.8.1. All acquisitions, betterments and improvements of investment properties shall be made in accordance with the approved budget and the authorization of the ED or Board of Directors.

 

3.2.8.2. Planned capital expenditure programs should be tied directly to strategic goals and objectives of the organization. Investment appraisal on the cost benefit of the capital expenditure should be carried out by the Finance and Administration head to ensure that worthwhile investments are made.

 

3.2.8.3. Investment appraisal on the cost benefit will include the financing structure and the cost of different option of finance.

 

3.2.8.4. Each year, management should undertake fair value measurement of Investment Property, in view of increase or decrease in their values when fair value model is used. The gain or loss from such process is recorded as income or expense in surplus or deficit account.

 

3.2.8.5. When investment property is proved to be no more economical and/or effective to OSD, the asset need to be derecognized regardless of its carrying amount.

 

3.2.8.6. All investment properties shall be recorded in the books of accounts on receipt of the items against official receiving evidence.

 

3.2.8.7. The accountant in charge of noncurrent assets shall check the completeness and accuracy of documents and determines the cost of the asset to be recognized.

 

3.2.8.8. Journal entries to record investment property shall be recorded after the supporting documents are verified and approved by the Finance and Purchasing head via cash payments or general journal.

 

3.2.8.9. Ensure that ownership certificates and title deeds are kept locked and in secured places under the responsibility of the property administration division head.

 

 

3.3. Intangible Assets (IPSAS 31)

 

 

3.3.1. Nature and Definition

 

3.3.1.1. Intangible asset is an identifiable non-monetary asset without physical substance. An intangible asset meets the identifiability criterion when it:

   a) is separable, i.e. capable of being separated from OSD and sold, transferred, licensed, rented or exchanged, either individually or together with a related contract, asset or liability; or

   b) arises from contractual or other legal rights, regardless of whether those rights are transferable or separable from OSD or from other rights and obligations.

 

 

3.3.2. Initial Recognition and Measurement

 

 

3.3.2.1. An intangible asset shall be recognized, whether purchased or self-created (at cost) if, and only if:

   a) it is probable that the future economic benefits that are attributable to the asset will flow to OSD; and

   b) the cost of the asset can be measured reliably.

 

 

3.3.3. Subsequent Measurement

 

 

3.3.3.1. An intangible asset shall be carried at its cost less any accumulated amortization and any accumulated impairment losses.

 

3.3.3.2. Straight line amortization method shall be applied by OSD.

 

3.3.3.3. The useful life shall be the lower of legal life and expected economic life of the asset (as estimated by OSD's Management).

 

3.3.3.4. Subsequent expenditure on an intangible asset after its purchase or completion shall be recognized as an expense when it is incurred, unless it is probable that this expenditure will enable the asset to generate future economic benefits in excess of its originally assessed standard of performance and the expenditure can be measured and attributed to the asset reliably.

 

 

3.3.4. De-recognition

 

 

3.3.4.1. An intangible asset shall be derecognized on disposal; or when no future economic benefits are expected from its use or disposal.

 

3.3.4.2. The gain or loss arising from derecognition of an intangible asset shall be determined as the difference between the net disposal proceeds, if any, and the carrying amount of the asset.

 

 

3.3.5. Research & Development Costs of Internally Generated Intangible Assets

 

 

3.3.5.1. To assess whether an internally generated intangible asset meets the criteria for recognition, OSD shall classify the generation of the asset into:

   a) Research phase; and

   b) Development phase.

 

3.3.5.2. Expenditure on research (or on the research phase of an internal project) shall be recognized as an expense when it is incurred.

 

3.3.5.3. An intangible asset arising from development (or from the development phase of an internal project) shall be recognized if, and only if, OSD can demonstrate all of the following:

   a) the technical feasibility of completing the intangible asset so that it will be available for use or sale.

   b) its intention to complete the intangible asset and use or sell it.

   c) its ability to use or sell the intangible asset.

   d) how the intangible asset will generate probable future economic benefits. Among other things, OSD can demonstrate the existence of a market for the output of the intangible asset or the intangible asset itself or, if it is to be used internally, the usefulness of the intangible asset.

   e) the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset.

   f) its ability to measure reliably the expenditure attributable to the intangible asset during its development.

 

 

3.3.6. Presentation and Disclosure

 

 

3.3.6.1. A number of detailed disclosures are required for each class of intangible assets to enable users to determine the mechanisms and factors affecting intangible asset values. If OSD has recognized internally generated intangible assets, then the disclosure information shall be shown separately for these assets. Disclose:

   a) the amortization rates for intangible assets and the methods used;

   b) the identification of the line item in the Statement of Financial Performance where amortization has been charged, and separate disclosure of any impairment losses incurred (with any reversals);

   c) a full reconciliation of movements in the carrying amount of intangible assets, for example additions, amortization, impairment and disposals;

   d) net exchange differences that arose on translation; and

   e) the aggregate amount of research and development expenditure recognized as an expense during the period.

 

 

3.3.7. Amortization of Intangible Assets

 

 

3.3.7.1. The different policies and procedures specified shall be followed in the computation and recognition of amortization in the accounts of OSD.

 

3.3.7.2. The accountant in charge of intangible assets accounting shall compute the amortization of the assets using the appropriate rates.

 

3.3.7.3. The Finance and Purchasing head shall review and approve the amortization schedule before the entries are recorded in the books.

 

 

3.3.8. Impairment of Intangible Assets

 

 

3.3.8.1. Where management ensures that there is impairment of intangible assets, it shall be recognized in the accounts.

 

3.3.8.2. The detailed treatment of impairment shall be decided by management.

 

 

3.3.9. Accounting and documentation of Intangible Assets

 

 

3.3.9.1. All intangible assets shall be recorded in the books of accounts on receipt of the items (or obtaining the right granted by the government) against official receiving evidence or legal evidence.

 

3.3.9.2. If the intangible assets are acquired through purchase, the purchasing department / unit forwards relevant copies of documents that include:

   a) Approved purchase requisition form;

   b) Approved/ authorized tender analysis reports or equivalent document;

   c) Approved purchase order;

   d) Approved / authorized goods receiving vouchers, etc.

 

3.3.9.3. The accountant in charge shall check the completeness and accuracy of documents and determines the cost of the intangible asset to be recognized.

 

3.3.9.4. Journal entries to record intangible asset shall be recorded after the above supporting documents are verified and approved by the Finance and Purchasing head via cash payments or general journal.

 

 

3.3.10. Procedures and Controls over Intangible Assets

 

 

3.3.10.1. All acquisitions and advancement of intangible assets are made in accordance with the approved budget and the authorization of the ED.

 

3.3.10.2. Planned capital expenditure programs should be tied directly to strategic goals and objectives of the organization.

 

3.3.10.3. Investment appraisal on the cost benefit of the capital expenditure (especially on research & development) should be carried out by the Finance and Purchasing head to ensure that worthwhile Investment are made.

 

3.3.10.4. The investment appraisal shall include the financing structure and the cost of different options of finance.

 

 

3.4. Borrowing Costs (IPSAS 5)

 

 

3.4.1. Nature and Definition

 

3.4.1.1. Borrowing costs are interest and other costs incurred by OSD in connection with the borrowing of funds.

 

3.4.1.2. The following may be included in borrowing costs:

   a) Interest on bank overdrafts and short-term and long-term borrowings;

   b) Amortization of discounts or premiums relating to borrowings;

   c) Amortization of ancillary costs incurred in connection with the arrangement of borrowings;

   d) Finance charges in respect of leases recognized in accordance with IPSAS 13;

   e) Exchange differences arising from foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs.

 

3.4.1.3. Qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use or sale.

 

3.4.1.4. Depending on the circumstances, any of the following may be qualifying assets:

   a) office buildings

   b) Hospital

   c) Infrastructure assets such as roads, bridges and power generation facilities

   d) Inventories that require a substantial period of time to bring them to a condition ready for use or sale.

 

3.4.1.5. Other investments, and those assets that are routinely produced over a short period of time, are not qualifying assets. Assets that are ready for their intended use or sale when acquired also are not qualifying assets.

 

3.4.1.6. Assets that are ready for their intended use or sale when purchased are not qualifying assets.

 

 

3.4.2. Capitalization of Borrowing Costs

 

 

3.4.2.1. OSD should capitalize all eligible borrowing costs.

 

3.4.2.2. Only borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset can be capitalized as part of the cost of that asset (i.e. the costs that would have been avoided had the expenditure on the qualifying asset not been made).

 

3.4.2.3. Once the relevant borrowings are identified, which relate to a specific asset, and then the amount of borrowing costs available for capitalization will be the actual borrowing costs incurred on those borrowings during the period, less any investment income on the temporary investment of those borrowings.

 

3.4.2.4. In a situation where borrowings are obtained generally, but are applied in part to obtaining a qualifying asset, then the amount of borrowing costs eligible for capitalization is found by applying the 'capitalization rate' to the expenditure on the asset.

 

3.4.2.5. The capitalization rate is the weighted average of the borrowing costs applicable to OSD's borrowings that are outstanding during the period, excluding borrowings made specifically to obtain a qualifying asset.

 

3.4.2.6. However, there is a cap on the amount of borrowing costs calculated in this way (i.e. it must not exceed actual borrowing costs incurred.)

 

 

3.4.3. Commencement of Capitalization of Borrowing Costs

 

 

3.4.3.1. Three events must be taking place for capitalization of borrowing costs to be started:

   a) Expenditure on the asset is being incurred;

   b) Borrowing costs are being incurred;

   c) Activities are in progress that is necessary to prepare the asset for its intended use or sale.

 

3.4.3.2. Expenditure must result in the payment of cash, transfer of other assets or assumption of interest-bearing liabilities.

 

3.4.3.3. Deductions from expenditure will be made for any progress payments or grants received in connection with the asset.

 

3.4.3.4. IPSAS 5 allows the average carrying amount of the asset during a period (including borrowing costs previously capitalized) to be used as a reasonable approximation of the expenditure to which the capitalization rate is applied in the period.

 

3.4.3.5. Activities necessary to prepare the asset for its intended sale or use extend further than physical construction work such as technical and administrative work prior to construction, e.g. obtaining permits.

 

3.4.3.6. Activities necessary to prepare the asset for its intended sale or use do not include holding an asset when no production or development that changes the asset's condition is taking place (e.g. where land is held without any associated development activity).

 

 

3.4.4. Suspension of Capitalization of Borrowing Costs

 

 

3.4.4.1. If active development is interrupted for any extended periods, capitalization of borrowing costs should be suspended for those periods.

 

3.4.4.2. Suspension of capitalization of borrowing costs is not necessary for temporary delays or for periods when substantial technical or administrative work is taking place.

 

 

3.4.5. Cessation of Capitalization of Borrowing Costs

 

 

3.4.5.1. Once substantially all the activities necessary to prepare the qualifying asset for its intended use or sale are complete, then capitalization of borrowing costs should cease (i.e. when physical construction of the asset is completed, although minor modifications may still be outstanding).

 

3.4.5.2. The asset may be completed in parts or stages, where each part can be used while construction is still taking place on the other parts. Then, capitalization of borrowing costs should cease for each part as it is completed.

 

 

3.4.6. Disclosure of Borrowing Costs

 

 

3.4.6.1. The following should be disclosed in the financial statements in relation to borrowing costs:

   a) The accounting policy adopted for borrowing costs;

   b) Amount of borrowing costs capitalized during the period;

   c) Capitalization rate used to determine the amount of borrowing costs eligible for capitalization.

 

 

3.5. Impairment of Non-Cash-Generating Assets (IPSAS 21) and

     Impairment of Cash-Generating Assets (IPSAS 26)

 

 

3.5.1. Nature and Definitions

 

3.5.1.1. A cash-generating unit is the smallest identifiable group of assets held with the primary objective of generating a commercial return that generates cash inflows from continuing use that are largely independent of the cash inflows from other assets or groups of assets.

 

3.5.1.2. A Recoverable amount is the higher of an asset's or a cash-generating unit's fair value less costs to sell and its value in use.

 

3.5.1.3. A Value in use of a cash-generating asset is the present value of the estimated future cash flows expected to be derived from the continuing use of an asset and from its disposal at the end of its useful life.

 

3.5.1.4. Fair value less costs to sell is the amount obtainable from the sale of an asset in an arm's length transaction between knowledgeable, willing parties, less the costs of disposal.

 

3.5.1.5. An impairment is a loss in the future economic benefits or service potential of an asset, over and above the systematic recognition of the loss of the asset's future economic benefits or service potential through depreciation.

 

3.5.1.6. Non-cash-generating assets are assets other than cash-generating assets.

 

3.5.1.7. Useful life is either:

   a) The period of time over which an asset is expected to be used by the OSD; or

   b) The number of production or similar units expected to be obtained from the asset by the OSD.

 

3.5.1.8. Value in use of a non-cash-generating asset is the present value of the asset's remaining service potential.

 

 

3.5.2. Measuring Recoverable Amount and Value in Use

 

 

3.5.2.1. The following elements shall be reflected in the calculation of an asset's value in use:

   a) An estimate of the future cash flows OSD expects to derive from the asset;

   b) Expectations about possible variations in the amount or timing of those future cash flows;

   c) The time value of money represented by the current market rate of interest;

   d) The price for bearing the uncertainty inherent in the asset; and

   e) Other factors, such as illiquidity, that market participants would reflect in pricing the future cash flows OSD expects to derive from the asset.

 

3.5.2.2. Estimation of the future cash flows shall include:

   a) Projections of cash inflows from the continuing use of the asset;

   b) Projections of each outflows that are necessarily incurred to generate the cash inflows from continuing use of the asset (including the cash outflows to prepare the asset for use) and that can be directly attributed, or allocated on a reasonable and consistent basis, to the asset; and

   c) Net cash inflows, if any, to be received (or paid) for the disposal of the asset at the end of its useful life.

 

3.5.2.3. Future cash flows are estimated for the asset in its current condition. Such estimates do not include estimated future cash inflows or outflows that are expected to arise from a future restructuring to which OSD is not yet committed or improving or enhancing the asset's performance.

 

3.5.2.4. Estimates of future cash flows do not include cash inflows or outflows from financing activities and income tax receipts or payments.

 

3.5.2.5. The discount rate is a pre-tax rate that reflects current market assessments of the time value of money; and the risks specific to the asset for which the future cash flow estimates have not been adjusted.

 

 

3.5.3. Recognizing and Measuring an Impairment Loss

 

 

3.5.3.1. OSD shall recognize impairment loss if and only if the recoverable amount of an asset is less than its carrying amount. In such cases the carrying amount of the asset is reduced to its recoverable amount (i.e. Impairment loss).

 

3.5.3.2. After the recognition of an impairment loss, the depreciation (amortization) charge for the asset is adjusted in the future periods to allocate the assets revised carrying amount less its residential value (if any), on a systematic basis over its remaining useful life.

 

 

3.5.4. Reversing an Impairment Loss

 

 

3.5.4.1. OSD shall assess at each reporting date whether there is any indication that an impairment loss recognized in prior periods for an asset may no longer exist or may have decreased. If any such indication exists, OSD shall estimate the recoverable amount of that asset.

 

3.5.4.2. The increased carrying amount of an asset attributable to reversal of an impairment loss shall not exceed the carrying amount that would have been determined (net of amortization or depreciation) had no impairment loss been recognized for the asset in prior years. A reversal of an impairment loss is recognized immediately in surplus or deficit.

 

 

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3.5.5. Disclosures

3.5.5.1.OSD shall disclose the following for each class of assets:

a) The amount of impairment losses recognized in surplus or deficit during the period, and the line item(s) of the statement of financial performance in which those impairment losses are included, and

b) The amount of reversals of impairment losses recognized in surplus or deficit during the period, and the line item(s) of the statement of financial performance in which those impairment losses are reversed,

c) The amount of impairment losses on revalued assets recognized directly in revaluation surplus during the period; and

d) The amount of reversals of impairment losses on revalued assets recognized directly in revaluation surplus during the period.

3.6. Inventories (IPSAS 12)

3.6.1. Nature and Definition

3.6.1.1.Inventories are assets:

a) In the form of materials or supplies to be consumed in the production process;

b) In the form of materials or supplies to be consumed or distributed in the rendering of services;

c) Held for sale or distribution in the ordinary course of operations; or

d) In the process of production for sale or distribution.

 

 

3.6.1.2. Net realizable value - should be estimated by calculating the net selling price less all costs still to be incurred in converting the relevant mineral inventory to saleable product and delivering it to the customer on the basis of conditions that existed at the balance sheet date;

3.6.2. Classification of Inventories

3.6.2.1.Office Supplies are stationaries and other consumable stocks regularly used in offices by OSD staff engaged in written communications, recordkeeping, janitorial and cleaning, and for storage of supplies or data.

3.6.2.2. Spare Parts and Accessories - refer to service parts or repair parts or replacement parts or interchangeable parts that are used for the repair or replacement of old or broken parts of Equipment, Vehicle, etc.

3.6.2.3. Fuel and Lubricants - refer to oils and gases used for machines and vehicles as source of energy and/or reduce the friction, heat, and wear between mechanical components that are in contact with each other.

3.6.2.4.Tools - refer to any physical object such as mechanical tools including saws and hammers or a technical object used to performing or facilitating mechanical operations.

 

3.6.3. Recognition of Inventories

3.6.3.1.Inventories should be recognized when the recognition criteria for assets are met in the IPSAS framework.

3.6.3.2.When inventories are sold, the carrying amount of those inventories shall be recognized as an expense (as Cost of Sales) in the period in which the related revenue is recognized.

3.6.3.3.The amount of any write-down of inventories to net realizable value and all losses of inventories shall be recognized as an expense in the period the write-down or loss occurs.

3.6.3.4.The amount of any reversal of any write-down of inventories, arising from an increase in net realizable value, shall be recognized as a reduction in the amount of inventories recognized as an expense in the period in which the reversal occurs.

 

 

3.6.4. Initial Measurement of Inventories

3.6.4.1.The cost of inventories shall include:

a) purchase cost or fair value if donated in-kind;

b) conversion costs (materials, labor and overhead);

c) all other costs incurred in bringing the inventories to their present location and condition.

 

3.6.5. Costs of Purchased Inventories

 

3.6.5.1.The costs of purchase of inventories comprise the purchase price, import duties and other taxes (other than those subsequently recoverable by OSD from the taxing authorities), and, handling and other costs directly attributable to the acquisition of finished goods, materials and services.

3.6.5.2.Trade discounts, rebates and other similar items shall be deducted in determining the costs of purchase.

3.6.5.3.When Inventories purchased on deferred settlement terms, the arrangement effectively contains a financing element, that element (i.e. a difference between the purchases prices for normal credit terms and the amount paid) shall recognized as interest expense over the period of the financing.

3.6.5.4.Goods-in-transit shall be valued at total cost incurred to-date excluding deductible costs.

 

3.6.6. Exclusions from Cost of Inventories

3.6.6.1.The following cost shall be excluded from the cost of inventories and recognized as expenses in the period in which they are incurred are:

a) abnormal amounts of wasted materials, labor or other costs;

b) storage costs;

c) administrative overheads that do not contribute to bringing inventories to their present location and condition; and

d) Selling costs.

 

3.6.7. Cost formulas

3.6.7.1.The cost of inventories of items that are not ordinarily interchangeable and goods or services produced and segregated for specific projects shall be assigned by using specific identification of their individual costs.

3.6.7.2.For interchangeable items, the cost of inventories shall be assigned by using either the first-in, first-out (FIFO) or weighted average cost formula.

3.6.7.3.OSD shall use the same cost formula for all inventories having a similar nature and use.

3.6.7.4.Perpetual Inventory System should be maintained to record the movement and consumptions of Inventory items to track continuously both change in Inventory quantity and Inventory cost.

 

3.6.8. Subsequent Measurement of Inventories

3.6.8.1.Merchandise Inventories held for sale at the end of the financial period (if any) should be stated at the lower of cost and net realizable value.

3.6.8.2.

Supplies and Parts held at the end of the financial period should be stated at the lower of cost and replacement cost.

 

3.6.9. Accounting Procedures and Control over Spare Parts

 

3.6.9.1. Non-recurring/Capital Spare Parts

a) They refer to the spare parts which OSD only expects to use if there is an unexpected breakdown/equipment failure and serve more than one period.

b) They do not include items that are generally consumed or replaced during the regular maintenance cycle.

c) They should be carried as inventory and should be capitalized within property, plant and equipment when consumed and depreciated over the same period as the asset to which it relates. (IPSAS 17)

 

3.6.9.2. Recurring Spare Parts

a) They refer to spare parts that are regularly replaced as part of a regular maintenance cycle/general replacement programme/and serve less than one period.

b) They should be carried as inventory and recognized as an expense when consumed. (IPSAS 17)

 

3.6.10. Accounting Procedures for Spare Parts

3.6.10.1.Receipt of Parts and Materials shall be evidenced by pre-numbered and printed Good Receiving Voucher (GRV);

3.6.10.2.The GRV must indicate quantity received, date received, source of receipt/supplier, unit cost and other relevant information as required;

3.6.10.3.The original of the GRV shall be attached to supplier's invoice and is submitted to the accountant at the finance department;

3.6.10.4.The GRV and supplier's invoice are to be attached with payment vouchers, or General Journal vouchers depending on the case;

3.6.10.5.The GRV must be signed by the custodian, the person who has delivered the goods and/or also by the store keeper.

3.6.10.6.The procurement and property administration/General services head shall periodically review the receiving activity to ensure whether it is in line with the policies and procedures of OSD or not;

3.6.10.7.Copy of the GRV must be submitted to Finance and Purchasing head once a week for stock control purpose;

3.6.10.8.Approved Store Requisition shall be the source to issue Parts items from warehouse;

3.6.10.9.Issue of Parts for consumption shall be supported by pre-numbered and printed Stores Issue Voucher (SIV);

 

3.6.10.10.The SIV must be signed by the store custodian for the issue and also by the recipient for receipt of the materials;

3.6.10.11.Copies of the SIV must be submitted to Finance and purchasing division once a week for stock control purpose;

3.6.10.12.The custodian shall maintain a Stock Card / Bin Card that show the quantity movement of Parts items.

3.6.10.13.The cost account team shall maintain a Stock Ledger Card that shows the moving weighted average cost of an item along with the quantity movement.

 

3.6.11. Internal Control over Spare Parts

 

3.6.11.1.Ensure that issue of stock items from warehouse is based on approved stores requisition;

3.6.11.2.Reconcile the stock record maintained by the Finance section with the one maintained by the warehouse;

3.6.11.3.Take corrective action based on the result of the reconciliation;

3.6.11.4.Conduct surprise count for sensitive items;

3.6.11.5.Take year-end inventory for financial statement preparation as well as physical verification of the items shown in the records;

3.6.11.6.Check whether the financial stock items in the warehouse have proper insurance coverage and are adequately protected from damages;

3.6.11.7.Periodically monitor slow moving, obsolete and damaged items and propose the course of action that should be taken by the appropriate body.

 

3.6.12. Accounting Procedures for Supplies

 

3.6.12.1.Purchase of supplies items shall be carried out in line with the approved budget;

3.6.12.2.Receipt of supplies shall be evidenced by pre-numbered and printed Goods Receiving Voucher (GRV);

3.6.12.3.The GRV must indicate quantity received, date received, source of receipt/supplier, unit cost and other relevant information as required;

3.6.12.4.The original of the GRV will be attached to supplier's invoice and is submitted to finance;

3.6.12.5.The GRV and supplier's invoice are to be attached to payment vouchers, or General Journal voucher depending on the case.

3.6.12.6.The GRV must be signed by the custodian and also by the person who has delivered the goods.

 

 

3.6.12.7.Copy of the GRV must be submitted to finance at the end of each week day to maintain an up-day memorandum record (Supplies items stock card)

3.6.12.8.Approved Requisition Issue Voucher shall be the source to issue Supplies items from warehouse.

3.6.12.9.The Requisition - Issue must be signed by the store custodian for the issue and also by the recipient for receipt of the materials.

3.6.12.10.Copies of the SIV must be submitted to finance at the end of each week day to up-date the Memorandum Report.

3.6.12.11.The custodian shall maintain a Stock Card / Bin Card that shows the quantity movement of Supplies items.

3.6.12.12.The finance section shall maintain a Memorandum Record that shows the quantity movement of an item.

 

3.6.13. Internal Control over Supplies

 

3.6.13.1.Ensure that the issue of stock items from the warehouse is based on approved Store Requisition.

3.6.13.2.Reconcile the Memorandum Stock Records maintained by the finance section with the one maintained by the warehouse.

3.6.13.3.Take corrective action based on the result of the reconciliation.

3.6.13.4. Conduct frequent surprise count as the items under this group are common use items.

3.6.13.5. Take year-end inventory for physical verification of the items and adjust the expense/ cost accounts based on the count balance.

3.6.13.6. Check whether the Supplies items in the warehouse are adequately protected from damages, theft and misuse.

3.6.13.7. Periodically monitor the value and volume of Supplies for action in subsequent purchase.

 

3.6.14. Accounting Procedures for Local Purchases

3.6.14.1.When OSD requires goods to be purchased locally, the store should prepare Purchase Requisition for all goods required.

3.6.14.2.Purchases are to be authorized by the responsible official in accordance with OSD's procedure for obtaining proforma invoice, quotation, etc.

 

3.6.15. The Accounting Procedures for Foreign Purchases

3.6.15.1.Letter of credit, Advance payment or Cash against Documents are modes of payment for imported items in foreign currency whereby the bank serves as the paying agent. The bank is authorized to release the payment to the beneficiary upon fulfillment of preset conditions as stated in the contract agreement of each modes of payment.

3.6.15.2.The cost of goods purchased through import comprises not only the invoice price charged by the supplier but also other costs incurred in bringing the goods to Ethiopia and specifically to the warehouse of OSD. Costs such as marine insurance, bank Charges Sea freight, customs duties, transit charges, and loading and unloading will be incurred in advance of actual receipt of the goods.

3.6.15.3.In order to facilitate follow-up on goods in transit and costing of the goods when received, a separate subsidiary ledger account must be maintained for every individual order by advance payment reference number or Purchase order reference number or, a letter of credit number.

3.6.15.4.Payment made in relation to imports should be debited to respective A/P PO and LC accounts as incurred, where the final payments for certain services of charges in relation to an A/P, CAD or L/C accounts are considered to delay the valuation of items of clearance of an A/P or CAD or L/C account, the advance payment shall be taken for valuation purpose. Difference, if any; shall be charged to an overhead account. This approach facilitates maintaining an up-to-date record of stock or fixed asset.

 

3.6.16. Physical Count

3.6.16.1.

Every item found in the warehouses should be counted physically.

3.6.16.2.On the count sheet shall clearly indicate:

a) Third party properties

b) Damaged item

c) Obsolete, expired items etc.

3.6.16.3.The count team should consist of:

a) Staff of finance;

b) Assigned person from Technical division; and

c) Store custodian

3.6.16.4.The count should be prepared in triplicate. The distribution being:

a) Original at the Finance section;

b) 1st copy store / custodian

c) 2nd copy file for reference

3.6.16.5.Reconcile counted balance and investigate variances and fix responsibility for variances.

3.6.16.6.Forward a report regarding the finding of the count to the general manager.

3.6.16.7.The physical count balance must be shown on the bin card and the stock record.

3.6.16.8.Preferably use a different ink to record the physical count on the bin card.

 

 

 

3.6.17. Presentation and Disclosure

3.6.17.1.

The financial statements shall disclose:

a) The accounting policies adopted in measuring inventories including the cost formula used;

b) The total carrying amount of inventories and the carrying amount in classifications appropriate to the OSD;

c) The carrying amount of inventories carried at fair value less costs to sell;

d) The amount of inventories recognized as an expense during the period;

e) The amount of any write-down of inventories recognized as an expense in the period;

f) The amount of any reversal of any write-down that is recognized in the statement of financial performance in the period;

g) The circumstances or events that led to the reversal of a write-down of inventories; and

h) The carrying amount of inventories pledged as security for liabilities.

3.6.17.2.Information about the carrying amounts held in different classifications of inventories and the extent of the changes in these assets is useful to financial statement users.

3.6.17.3.The amount of inventories recognized as an expense during the period, which is often referred to as cost of sales, consists of those costs previously included in the measurement of inventory.

 

3.7. Revenue From Exchange Transactions (IPSAS 9), Revenue from Non-Exchange Transactions (IPSAS 23) & Construction Contracts (IPSAS 11)

 

3.7.1. Definition

 

3.7.1.1.Exchange transactions are transactions in which one entity receives assets or has liabilities extinguished, and directly gives approximately equal value (primarily in the form of cash, goods, services, or use of assets) to another entity in exchange.

3.7.1.2.Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm's length transaction.

3.7.1.3.Non-exchange transactions are transactions that are not exchange transactions. In a non-exchange transaction, OSD either receives value from another entity without directly giving approximately equal value in exchange, or gives value to another entity without directly receiving approximately equal value in exchange.

3.7.1.4.Revenue includes only the gross inflows of economic benefits or service potential received and receivable by the OSD on its own account. Amounts collected as an agent of the government or another government organization or on behalf of other third parties are excluded from revenue.

3.7.1.5.Conditions on transferred assets are stipulations that specify that the future economic benefits or service potential embodied in the asset is required to be consumed by the recipient as specified or future economic benefits or service potential must be returned to the transferor.

3.7.1.6.Control of an asset arises when the OSD can use or otherwise benefit from the asset in pursuit of its objectives, and can exclude or otherwise regulate the access of others to that benefit.

3.7.1.7.Expenses paid through the tax system are amounts that are available to beneficiaries regardless of whether or not they pay taxes.

 

 

 

 

 

 

3.7. REVENUE POLICIES 

3.7.1. Key Definitions 

3.7.1.8. Fines: Economic benefits or service potential received or receivable by public sector entities, as determined by a court or other law enforcement body, as a consequence of the breach of laws or regulations.

3.7.1.9. Restrictions on transferred assets: Stipulations that limit or direct the purposes for which a transferred asset may be used, but do not specify that future economic benefits or service potential is required to be returned to the transferor if not deployed as specified.

3.7.1.10. Stipulations on transferred assets: Terms in laws or regulation, or a binding arrangement, imposed upon the use of a transferred asset by entities external to the reporting OSD.

3.7.1.11. Tax expenditures: Preferential provisions of the tax law that provide certain taxpayers with concessions that are not available to others.

3.7.1.12. Taxes: Economic benefits or service potential compulsorily paid or payable to public sector entities, in accordance with laws and/or regulations, established to provide revenue to the government. Taxes do not include fines or other penalties imposed for breaches of the law.

3.7.1.13. Transfers: Inflows of future economic benefits or service potential from non-exchange transactions, other than taxes.

3.7.1.14. Construction contract: A contract, or a similar binding arrangement, specifically negotiated for the construction of an asset or a combination of assets that are closely interrelated or interdependent in terms of their design, technology, and function or their ultimate purpose or use.

3.7.1.15. Contractor: An entity that performs construction work pursuant to a construction contract.

3.7.1.16. Cost plus or cost-based contract: A construction contract in which the contractor is reimbursed for allowable or otherwise defined costs and, in the case of a commercially based contract, an additional percentage of these costs or a fixed fee, if any.

3.7.1.17. Fixed price contract: A construction contract in which the contractor agrees to a fixed contract price, or a fixed rate per unit of output, which in some cases is subject to cost escalation clauses.

3.7.1.18. Contract revenue shall comprise:

a) The initial amount of revenue agreed in the contract, and

b) Variations in contract work, claims, and incentive payments to the extent that:

(i) It is probable that they will result in revenue; and

(ii) They are capable of being reliably measured.

3.7.1.19. Contract costs shall comprise:

a) Costs that relate directly to the specific contract,

b) Costs that are attributable to contract activity in general, and can be allocated to the contract on a systematic and rational basis; and

c) Such other costs as are specifically chargeable to the customer under the terms of the contract.

 

3.7.2. Recognition of Revenue

3.7.2.1. General Grant & Revenue Policy

a) It is the policy of OSD that grants are recognized as revenue upon receipt of the funds into OSD's Bank account or upon fulfillment of the requirements agreed on in writing with each Donor Agency and also their promissory compliance activities (account receivable).

b) Grants represent support with donor-imposed conditions and could be restricted or unrestricted. Unrestricted grants are received in support of agreed research and development agenda and for general administration expenditures.

c) Restricted grants are received in support of specified projects or activities mutually agreed upon between the OSD and donors.

 

 

 

3.7.2.2. Exchange and Non-Exchange Inflows

3.7.2.2. An item that possesses the essential characteristics of an asset, but fails to satisfy the criteria for recognition, may warrant disclosure in the notes as a contingent asset.

3.7.2.3. Where an asset is acquired by means of a transaction that has an exchange component and a non-exchange component, OSD recognizes the exchange component according to the principles and requirements of other IPSASs.

3.7.2.4. The non-exchange component is recognized according to the principles and requirements of this Standard. In determining whether a transaction has identifiable exchange and non-exchange components, professional judgment is exercised. Where it is not possible to distinguish separate exchange and non-exchange components, the transaction is treated as a non-exchange transaction.

3.7.2.5. An inflow of resources from a non-exchange transaction recognized as an asset shall be recognized as revenue, except to the extent that a liability is also recognized in respect of the same inflow.

3.7.2.6. As OSD satisfies a present obligation recognized as a liability in respect of an inflow of resources from a non-exchange transaction, it reduces the carrying amount of the liability and recognizes an amount of revenue equal to that reduction.

3.7.2.7. A present obligation arising from a non-exchange transaction that meets the definition of a liability shall be recognized as a liability when, and only when:

a) It is probable that an outflow of resources embodying future economic benefits or service potential will be required to settle the obligation; and

b) A reliable estimate can be made of the amount of the obligation.

3.7.2.8. OSD shall recognize an asset in respect of transfers when the transferred resources meet the definition of an asset and satisfy the criteria for recognition as an asset.

3.7.2.9. OSD recognizes revenue in respect of debt forgiveness when the former debt no longer meets the definition of a liability or satisfies the criteria for recognition as a liability, provided that the debt forgiveness does not satisfy the definition of a contribution from owners.

3.7.2.10. Bequests, Gifts, Donations, and Pledges

3.7.2.10. A bequest is a transfer made according to the provisions of a deceased person's will. The past event giving rise to the control of resources embodying future economic benefits or service potential for a bequest occurs when OSD has an enforceable claim, for example on the death of the testator, or the granting of probate, depending on the laws of the jurisdiction.

3.7.2.11. Bequests that satisfy the definition of an asset are recognized as assets and revenue when it is probable that the future economic benefits or service potential will flow to the OSD, and the fair value of the assets can be measured reliably.

3.7.2.12. Gifts and donations (other than services in-kind) are recognized as assets and revenue when it is probable that the future economic benefits or service potential will flow to OSD and the fair value of the assets can be measured reliably.

3.7.2.13. Goods in-kind are recognized as assets when the goods are received, or there is a binding arrangement to receive the goods. If goods in-kind are received without conditions attached, revenue is recognized immediately. If conditions are attached, a liability is recognized, which is reduced and revenue recognized as the conditions are satisfied.

3.7.2.14. Pledges are unenforceable undertakings to transfer assets to the recipient entity.

3.7.2.15. Pledges do not meet the definition of an asset, because the recipient entity is unable to control the access of the transferor to the future economic benefits or service potential embodied in the item pledged. OSD does not recognize pledged items as assets or revenue. If the pledged item is subsequently transferred to the OSD, it is recognized as a gift or donation.

3.7.2.16. Where OSD receives resources before a transfer arrangement becomes binding, the resources are recognized as an asset when they meet the definition of an asset and satisfy the criteria for recognition as an asset. OSD will also recognize an advance receipt liability if the transfer arrangement is not yet binding.

3.7.2.17. Concessionary loans are loans received by OSD at below market terms. Where OSD determines that the difference between the transaction price (loan proceeds) and the fair value of the loan on initial recognition is non-exchange revenue, OSD recognizes the difference as revenue, except if a present obligation exists.

3.7.2.18. Construction Contract Outcomes

3.7.2.18. When the outcome of a construction contract can be estimated reliably, contract revenue and contract costs associated with the construction contract shall be recognized as revenue and expenses respectively by reference to the stage of completion of the contract activity at the reporting date. An expected deficit on a construction contract shall be recognized as an expense immediately.

3.7.2.19. In the case of a fixed price contract, the outcome of a construction contract can be estimated reliably when all the following conditions are satisfied:

a) Total contract revenue, if any, can be measured reliably;

b) It is probable that the economic benefits or service potential associated with the contract will flow to the entity;

c) Both the contract costs to complete the contract and the stage of contract completion at the reporting date can be measured reliably; and

d) The contract costs attributable to the contract can be clearly identified and measured reliably, so that actual contract costs incurred can be compared with prior estimates.

3.7.2.20. In the case of a cost plus or cost-based contract, the outcome of a construction contract can be estimated reliably when all the following conditions are satisfied:

a) It is probable that the economic benefits or service potential associated with the contract will flow to the entity; and

b) The contract costs attributable to the contract, whether or not specifically reimbursable, can be clearly identified and measured reliably.

3.7.2.21. When the outcome of a construction contract cannot be estimated reliably:

a) Revenue shall be recognized only to the extent of contract costs incurred that it is probable will be recoverable; and

b) Contract costs shall be recognized as an expense in the period in which they are incurred.

3.7.2.22. An expected deficit on a construction contract shall be recognized as an expense immediately.

3.7.2.23. When the uncertainties that prevented the outcome of the contract being estimated reliably no longer exist, revenue and expenses associated with the construction contract shall be recognized.

3.7.2.24. In respect of construction contracts in which it is intended at inception of the contract that contract costs are to be fully recovered from the parties to the construction contract, when it is probable that total contract costs will exceed total contract revenue, the expected deficit shall be recognized as an expense immediately.

3.7.2.25. The percentage of completion method is applied on a cumulative basis in each reporting period to the current estimates of contract revenue and contract costs. Therefore, the effect of a change in the estimate of contract revenue or costs, or the effect of a change in the estimate of the outcome of a contract, is accounted for as a change in accounting estimate.

3.7.3. Measurement of Revenue

3.7.3.1. Revenue shall be measured at the fair value of the consideration received or receivable by OSD.

3.7.3.2. The amount of revenue arising on a transaction is usually determined by agreement between OSD and the Donor agency. It is measured at the fair value of the consideration received, or receivable, taking into account the amount of any trade discounts and volume rebates allowed by the OSD.

3.7.3.3. When OSD exchanges goods or services or swaps for goods or services that are of a similar nature and value, the exchange is not regarded as a transaction that generates revenue.

3.7.3.4. When OSD renders services or sales goods in exchange for dissimilar goods or services, the exchange is regarded as a transaction that generates revenue. The revenue is measured at the fair value of the goods or services received, adjusted by the amount of any cash or cash equivalents transferred. When the fair value of the goods or services received cannot be measured reliably, the revenue is measured at the fair value of the goods or services given up, adjusted by the amount of any cash or cash equivalents transferred.

3.7.3.5. An asset acquired through a non-exchange transaction shall initially be measured at its fair value as at the date of acquisition.

3.7.3.6. Revenue from non-exchange transactions shall be measured at the amount of the increase in net assets recognized by the entity.

3.7.3.7. The amount recognized as a liability shall be the best estimate of the amount required to settle the present obligation at the reporting date.

3.7.3.8. Transferred assets are measured at their fair value as at the date of acquisition.

3.7.3.9. On initial recognition, gifts and donations including goods in-kind are measured at their fair value as at the date of acquisition, which may be ascertained by reference to an active market, or by appraisal.

3.7.4. Presentation

3.7.4.1. When either party to a contract has performed, OSD shall present the contract in the statement of financial position as a contract asset or a contract liability, depending on the relationship between OSD's performance and the customer's payment. OSD shall present any unconditional rights to consideration separately as a receivable.

3.7.4.2. If a customer pays consideration or OSD has a right to an amount of consideration that is unconditional (i.e. a receivable) before OSD transfers a good or service to the customer, OSD shall present the contract as a contract liability when the payment is made or the payment is due (whichever is earlier).

3.7.4.3. A contract liability is OSD's obligation to transfer goods or services to a customer for which OSD has received consideration (or an amount of consideration is due) from the customer.

3.7.4.4. If OSD performs by transferring goods or services to a customer before the customer pays consideration or before payment is due, OSD shall present the contract as a contract asset, excluding any amounts presented as a receivable.

3.7.4.5. A contract asset is OSD's right to consideration in exchange for goods or services that OSD has transferred to a customer.

3.7.4.6. An impairment of a contract asset shall be measured, presented and disclosed on the same basis as a financial asset that is within the scope of IPSAS 29.

3.7.4.7. A right to consideration is unconditional if only the passage of time is required before payment of that consideration is due. For example, OSD would recognize a receivable if it has a present right to payment even though that amount may be subject to refund in the future.

3.7.4.8. OSD shall account for a receivable in accordance with IPSAS 29. Upon initial recognition of a receivable from a contract with a customer, any difference between the measurement of the receivable in accordance with IFRS 9 and the corresponding amount of revenue recognized shall be presented as an expense (for example, as an impairment loss).

3.7.4.9. This Standard uses the terms 'contract asset' and 'contract liability' but does not prohibit OSD from using alternative descriptions in the statement of financial position for those items.

3.7.4.10. If OSD uses an alternative description for a contract asset, OSD shall provide sufficient information for a user of the financial statements to distinguish between receivables and contract assets.

3.7.5. Disclosure

3.7.5.1. OSD shall disclose:

a) The accounting policies adopted for the recognition of revenue, including the methods adopted to determine the stage of completion of transactions involving the rendering of services;

b) The amount of each significant category of revenue recognized during the period, including revenue arising from:

(i) The rendering of services;

(ii) The sale of goods;

(iii) Interest;

(iv) Royalties; and

(v) Dividends or similar distributions; and

c) The amount of revenue arising from exchanges of goods or services included in each significant category of revenue.

d) The amount of revenue from non-exchange transactions recognized during the period by major classes showing separately:

(i) Taxes, showing separately major classes of taxes; and

(ii) Transfers, showing separately major classes of transfer revenue.

e) The amount of receivables recognized in respect of non-exchange revenue;

f) The amount of liabilities recognized in respect of transferred assets subject to conditions;

g) The amount of liabilities recognized in respect of concessionary loans that are subject to conditions on transferred assets;

h) The amount of assets recognized that are subject to restrictions and the nature of those restrictions;

i) The existence and amounts of any advance receipts in respect of non-exchange transactions; and

j) The amount of any liabilities forgiven.

k) The accounting policies adopted for the recognition of revenue from non-exchange transactions;

l) For major classes of revenue from non-exchange transactions, the basis on which the fair value of inflowing resources was measured;

m) The nature and type of major classes of bequests, gifts, and donations, showing separately major classes of goods in-kind received;

n) The amount of contract revenue recognized as revenue in the period;

o) The methods used to determine the contract revenue recognized in the period; and

p) The methods used to determine the stage of completion of contracts in progress

q) OSD shall disclose each of the following for contracts in progress at the reporting date:

(i) The aggregate amount of costs incurred and recognized surpluses (less recognized deficits) to date;

(ii) The amount of advances received; and

(iii) The amount of retentions.

 

 

 

 

 

3.8. FINANCIAL INSTRUMENTS (IPSAS 28, 29 & IPSAS 30)

3.8.1. Definition

3.8.1.1. An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities.

3.8.1.2. A financial instrument is any contract that gives rise to both a financial asset of one entity and a financial liability or equity instrument of another entity.

3.8.1.3. A financial asset is any asset that is:

a) Cash;

b) An equity instrument of another entity;

c) A contractual right:

(i) To receive cash or another financial asset from another entity; or

(ii) To exchange financial assets or financial liabilities with another entity under conditions that are potentially favorable to the entity or;

d) A contract that will or may be settled in the entity's own equity instruments & is:

(i) A non-derivative for which the entity is or may be obliged to receive a variable number of the entity's own equity instruments; or

(ii) A derivative that will or may be settled other than by the exchange of a fixed amount of cash or another financial asset for a fixed number of the entity's own equity instruments.

3.8.1.4. A financial liability - is any liability that is:

a) A contractual obligation:

(i) To deliver cash or another financial asset to another entity; or

(ii) To exchange financial assets or financial liabilities with another entity under conditions that are potentially unfavorable to the entity; or

b) A contract that will or may be settled in the entity's own equity instruments & is:

(i) A non-derivative for which the entity is or may be obliged to deliver a variable number of the entity's own equity instruments; or

 

3.8. FINANCIAL INSTRUMENTS (CONTINUED)

3.8.1. Definition (Continued)

3.8.1.4. A financial liability (Continued):

b) A contract that will or may be settled in the entity's own equity instruments & is:

(ii) A derivative that will or may be settled other than by the exchange of a fixed amount of cash or another financial asset for a fixed number of the entity's own equity instruments.

3.8.1.5. A puttable instrument: A financial instrument that gives the holder the right to put the instrument back to the issuer for cash or another financial asset or is automatically put back to the issuer on the occurrence of an uncertain future event or the death or retirement of the instrument holder.

3.8.1.6. A derivative: A financial instrument or other contract with all three of the following characteristics:

a) Its value changes in response to the change in a specified interest rate, financial instrument price, commodity price, foreign exchange rate, index of prices or rates, credit rating or credit index, or other variable, provided in the case of a non-financial variable that the variable is not specific to a party to the contract (sometimes called the "underlying");

b) It requires no initial net investment or an initial net investment that is smaller than would be required for other types of contracts that would be expected to have a similar response to changes in market factors; and

c) It is settled at a future date.

3.8.2. Classification of Financial Assets

3.8.2.1. There are four categories of financial instruments.

3.8.2.2. A financial asset or financial liability at fair value through surplus or deficit: A financial asset or financial liability that meets either of the following conditions:

a) It is classified as held for trading. A financial asset or financial liability is classified as held for trading if:

(i) It is acquired or incurred principally for the purpose of selling or repurchasing it in the near term;

(ii) On initial recognition it is part of a portfolio of identified financial instruments that are managed together and for which there is evidence of a recent actual pattern of short-term profit-taking; or

(iii) It is a derivative (except for a derivative that is a financial guarantee contract or a designated and effective hedging instrument).

b) Upon initial recognition it is designated by OSD as at fair value through surplus or deficit.

3.8.2.3. Held-to-maturity investments: Non-derivative financial assets with fixed or determinable payments and fixed maturity that an entity has the positive intention and ability to hold to maturity other than:

a) Those that the OSD upon initial recognition designates as at fair value through surplus or deficit;

b) Those that OSD designates as available for sale; and

c) Those that meet the definition of loans and receivables.

3.8.2.4. Loans and receivables: Non-derivative financial assets with fixed or determinable payments that are not quoted in an active market other than:

a) Those financial assets that OSD intends to sell immediately or in the near term, which shall be classified as held for trading and those that OSD upon initial recognition designates as at fair value through surplus or deficit;

b) Those that OSD upon initial recognition designates as available for sale; or

c) Those for which the holder may not recover substantially all of its initial investment, other than because of credit deterioration, which shall be classified as available for sale.

3.8.2.5. Available-for-sale financial assets: Those non-derivative financial assets that are designated as available for sale or are not classified as:

a) loans and receivables,

d) Held-to-maturity investments or financial assets at fair value through surplus or deficit.

3.8.3. Recognition, De-recognition and Measurement

3.8.3.1. OSD shall recognize a financial asset or a financial liability in its statement of financial position when, and only when, the entity becomes a party to the contractual provisions of the instrument.

Note: Section paragraphs 3.8.3.2 through 3.8.3.4 are unreadable/corrupted in the original scan source text.

3.8.3.5. If a transfer does not result in de-recognition because OSD has retained substantially all the risks and rewards of ownership of the transferred asset, OSD shall continue to recognize the transferred asset in its entirety and shall recognize a financial liability for the consideration received. In subsequent periods, OSD shall recognize any revenue on the transferred asset and any expense incurred on the financial liability.

3.8.3.6. An OSD shall remove a financial liability (or a part of a financial liability) from its statement of financial position when, and only when, it is extinguished - i.e., when the obligation specified in the contract is discharged, waived, cancelled or expires.

3.8.3.7. When a financial asset or financial liability is recognized initially, OSD shall measure it at its fair value plus, in the case of a financial asset or financial liability not at fair value through surplus or deficit, transaction costs that are directly attributable to the acquisition or issue of the financial asset or financial liability.

3.8.3.8. After initial recognition, OSD shall measure financial assets, including derivatives that are assets, at their fair values, without any deduction for transaction costs it may incur on sale or other disposal, except for the following financial assets:

a) Loans and receivables which shall be measured at amortized cost using the effective interest method;

b) Held-to-maturity investments which shall be measured at amortized cost using the effective interest method; and

c) Investments in equity instruments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured and derivatives those are linked to and must be settled by delivery of such unquoted equity instruments, which shall be measured at cost.

3.8.3.9. After initial recognition, OSD shall measure all financial liabilities at amortized cost using the effective interest method, except for:

a) Financial liabilities at fair value through surplus or deficit.

b) Financial liabilities that arise when a transfer of a financial asset does not qualify for de-recognition or when the continuing involvement approach applies

c) Financial guarantee contracts

d) Commitments to provide a loan at a below-market interest rate.

3.8.4. Impairment of Financial Instruments

3.8.4.1. OSD shall assess at the end of each reporting period whether there is any objective evidence that a financial asset or group of financial assets is impaired.

3.8.4.2. If there is objective evidence that an impairment loss on loans and receivables or held-to-maturity investments carried at amortized cost has been incurred, the amount of the loss is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset's original effective interest rate (i.e., the effective interest rate computed at initial recognition).

3.8.4.3. The carrying amount of the asset shall be reduced either directly or through use of an allowance account. The amount of the loss shall be recognized in surplus or deficit.

3.8.4.4. If there is objective evidence that an impairment loss has been incurred on an unquoted equity instrument that is not carried at fair value because its fair value cannot be reliably measured, or on a derivative asset that is linked to and must be settled by delivery of such unquoted equity instrument, the amount of the impairment loss is measured as the difference between the carrying amount of the financial asset and the present value of estimated future cash flows discounted at the current market rate of return for a similar financial asset.

3.8.4.5. When a decline in the fair value of an available-for-sale financial asset has been recognized directly in net assets/equity and there is objective evidence that the asset is impaired, the cumulative loss that had been recognized directly in net assets/equity shall be removed from net assets/equity and recognized in surplus or deficit even though the financial asset has not been derecognized.

3.8.5. Presentation of Financial Instruments

3.8.5.1. OSD shall classify the instrument, or its component parts, on initial recognition as:

a) a financial asset,

b) a financial liability or

c) an equity instrument in accordance with the substance of the contractual arrangement and the definitions of a financial liability, a financial asset and an equity instrument

3.8.5.2. IPSAS 1 requires Presentation of financial asset, financial liability, and an equity instrument as separate line items in the statement of financial position.

3.8.5.3. IPSAS 1 requires Presentation of the following amounts as separate line items in the statement of surplus or deficit for the period:

a) Revenue calculated using the effective interest method;

b) Gains and losses arising from de-recognition of financial assets measured at Amortized Cost;

c) Impairment losses (including reversals);

3.8.6. Disclosure of Financial Instruments

3.8.6.1. OSD shall disclose information that enables users of its financial statements to evaluate the significance of financial instruments for its financial position and performance.

3.8.6.2. OSD shall disclose in Statement of Financial Position:

a) Categories of Financial Assets and Financial Liabilities;

b) The carrying amounts of each category of the financial assets and financial liabilities.

3.8.6.3. An OSD shall disclose the following items of revenue, expense, gains, or losses either in the statement of financial performance or in the notes:

a) Net gains or net losses on financial assets or financial liabilities;

b) Total interest revenue and total interest expense;

c) Interest revenue on impaired financial assets accrued;

d) The amount of any impairment loss for each class of financial asset;

e) Accounting Policies applied for accounting and disclosure of financial instruments

f) the nature and extent of risks arising from financial instruments;

g) Its objectives, policies, and processes for managing the risk and the methods used to measure the risk.

3.9. CASH AND CASH EQUIVALENTS

3.9.1. Nature and Definition

3.9.1.1. Cash comprises cash on hand, petty cash funds, coupons, currencies awaiting deposit and local or foreign currency deposits in banks which can be added to or withdrawn without limitation and are immediately available for use in the current operations.

3.9.1.2. Cash Equivalents are short-term (mature in less than 3 months), highly liquid investments, are readily convertible to known amounts of cash and are held for the purpose of meeting short-term cash commitments rather than for investment or other purposes.

3.9.2. Recognition and Measurement

3.9.2.1. Cash is valued at face value which is equivalent to fair value.

3.9.2.2. Cash and cash equivalents in Foreign Currencies shall be translated at the exchange rate of the date of the transaction and converted to reporting currency on the reporting date at closing rate.

3.9.3. Presentation and Disclosure

3.9.3.1. OSD shall report "Cash and cash equivalents" as a single line item in both Statement of Financial Position and Statement of Cash Flows.

3.9.3.2. Cash and cash equivalents not restricted from being exchanged or used to settle a liability for at least 12 months from the reporting date shall be reported as current asset. But reported as non-current asset (restricted cash) if restricted from use for a period longer than 12 months.

3.9.3.3. OSD shall offset bank overdrafts against cash account in Statement of cash flows provided that overdraft is payable on demand and forms an integral part of its cash management.

3.9.3.4. OSD shall offset bank overdrafts against cash account in Statement of Financial Position if both of the following criteria are fulfilled:

a) OSD has a legally enforceable right to set off positive and negative balances, and

b) It has an intention to net settle whatever the balance is on the underlying accounts on a regular basis.

3.9.3.5. OSD shall report bank overdraft in Statement of Financial Position as current liability if one of the above criteria is not fulfilled.

3.9.3.6. OSD shall disclose:

a) Movements of cash and cash equivalents during the period and disclosing the category they belong such as:

(i) Cash at bank

(ii) Cash on hand

(iii) Short-term deposits (Note: original context bracket is empty)

 

 

b) Reconciliation of the cash & cash equivalents in the statement of Cash Flow to the statement of Financial Position.

c) Amount of cash subject to restrictions as at the end of the reporting period.

3.9.4. Procedures for Cash Collections

3.9.4.1. No one other than the cashier shall be allowed to collect cash.

3.9.4.2. All cash collections must be accounted for in Ethiopian birr.

3.9.4.3. A receipt voucher must be issued in strict numerical sequence.

3.9.4.4. All unused pads must be kept in safe custody in the stores, and the required number of pads is given to the cashier upon completion and return of the used pads.

3.9.4.5. A receipt voucher not used due to error shall be marked as "Void" and kept in the pad with all copies.

3.9.4.6. The duties and responsibilities of the cashiers shall be stated by job descriptions and the cashier needs to act according to these provisions.

3.9.4.7. The cashier should keep all cash and cash related vouchers and documents in cash safe box and ensures that only OSD's cash and cash related documents are kept in the safe.

3.9.4.8. Cheques received must be in the name of OSD.

3.9.4.9. Daily summary of cheques collected shall be prepared by the cashier and checked by the accountant and weekly by Head of Finance.

3.9.4.10. No receipt shall be issued for postdated cheques.

3.9.4.11. All collections shall be deposited wholly and intact on the day of collection or the following working day.

3.9.4.12. Any payment or advance out of collected cash is expressly forbidden.

3.9.4.13. All confirmed collections through OSD's bank accounts from customers or other sources shall be evidenced by pre-numbered cash receipt voucher or VAT cash sales invoices as appropriate.

3.9.4.14. Cash in safe and in transit shall be covered by appropriate levels of fidelity guarantee and money insurance policies.

3.9.4.15. Bank accounts shall be opened in the name of OSD.

3.9.4.16. If there is a change of cashier, the ED must be notified in writing and the cash collection balance on hand shall be reconciled with documents prior to the change in cashier.

3.9.4.17. Cash collected shall be kept separate and apart from all other funds and shall not be commingled with personal funds, petty cash fund, or others.

3.9.4.18. The Finance and Purchasing head shall make surprise cash counts at regular intervals, to ascertain that policies are adhered to.

3.9.4.19. Customers shall be clearly informed to ask for a receipt.

3.9.4.20. If the collection is in a form of cheque, goods shall not be delivered until it is confirmed that the cheque is cleared from customers' bank.

3.9.5. Principles for Bank Accounts

3.9.5.1. OSD shall have different bank accounts in different branches and banks including:

a) Current accounts

b) Saving accounts

3.9.5.2. New accounts shall be opened whenever the financing or operational logistics demands so.

3.9.5.3. All such accounts shall be operated by Cheque and authorization letters which shall be signed by more than one signatory as per the attest plan of OSD.

3.9.6. Procedures for Disbursements

3.9.6.1. The threshold for payments from the purchase fund shall be decided by management of OSD.

3.9.6.2. Petty cash purchase fund and main cash shall be kept separately.

3.9.6.3. Both the petty cash and purchase fund shall be replenished when eighty percent (80%) of the funds are utilized.

3.9.6.4. The payment threshold limits shall be revised in line with changed circumstances of OSD.

3.9.6.5. Bank reconciliation shall be prepared on a monthly basis.

3.9.6.6. OSD shall have petty cash fund established at the required locations including main office, branches so as to cover payment of miscellaneous routing operating expenses. This fund shall be availed to specific employee (usually cashier).

3.9.6.7. OSD shall have purchase fund established to enhance the smooth running of its production, sales and other operation. The fund shall be availed to specific employee (usually purchaser).

3.9.7. Procedures and Internal Control over Cashiers and Cash Safe

3.9.7.1. The Finance and purchasing head or his delegate regularly shall review the items kept in the cash safe. When the request to such review is initiated, the cashier cooperates for the review process.

3.9.7.2. The following procedures should be strictly adhered in operating the cash safe box:

a) The cashier locks the cash safe box whenever it is not in use.

b) The cashier does not allow any person to enter the cash office, except authorized employees visiting the office for supervision.

c) The cashier always locks the office in all instances of going out of the office.

3.9. CASH AND CASH EQUIVALENTS (CONTINUED)

3.9.7. Procedures and Internal Control over Cashiers and Cash Safe (Continued)

d) The cashier keeps only money and other valuables in the safe box, the receipt of which is fully evidenced by invoices and receipt vouchers.

3.9.8. Procedures and Control over Other Collections

3.9.8.1. The payer shall present the approved collection memo to the cashier.

3.9.8.2. The cashier shall verify the completeness of the memorandum as to authorization, and total amount to be collected.

3.9.8.3. Any amounts receivable from the staff with respect to clearing purchase advances and travel advances shall be reviewed and approved by the finance and purchasing division before collection by the cashier.

3.9.8.4. The collection of Other income (e.g. Retired PP & E, Scrapes...) shall be made using cash sales invoice or cash receipt voucher as per the authorization of ED/or head Finance and purchasing.

3.9.8.5. The cashier shall issue a pre-numbered cash receipt voucher for the amount of the collection, the original being issued to the payer and the first copy to Head of Finance and purchasing to update accounts.

3.9.9. Procedures and Control over Bank Deposits

3.9.9.1. The cashier shall write bank deposit slips in duplicate for all receipts of the day or the previous day. He/she compares entries of the pay-in-slips with the journal printout or the cashbook to make sure that they agree except for receipts raised on bank credits.

3.9.9.2. After writing the bank deposit slips she/he shall take them together with the cash and cheques received to the bank for lodgment.

3.9.9.3. After lodging the receipts, the bank teller shall stamp and sign all copies of the bank deposit slips to signify the lodgment and returns the stamped and signed copies to the cashier.

3.9.9.4. The cashier shall submit the stamped and signed deposit slips cross referenced with cash sales invoice or cash receipt vouchers to the accountant who makes sure that the pay-in-slip agrees with the vouchers and other records and codes each voucher and the deposit slip.

3.9.9.5. The coded documents shall be encoded to the system by the accountant or the encoder.

3.9.10. Procedures and Control over Collections Through Banks

3.9.10.1. The Finance and purchasing division shall ensure that proceeds are deposited to OSD's account and collect the original of the deposit slip from the depositor or bank advice from the bank.

3.9.10.2. After confirming the deposit, a pre-numbered cash receipt voucher shall be issued in the name of the depositor or the payer as appropriate.

3.9.10.3. All other procedures mentioned for collection and deposit shall be applicable.

3.9.11. Procedures and Control over Disbursements

3.9.11.1. No payment shall be made for capital expenditure that is not planned. In case of extraordinary circumstances, capital expenditure is made as per the authorization of the supervising authority.

3.9.11.2. Before processing any payments, the Finance and Purchasing head shall ensure that the expenditure is included in the weekly forecast and that fund is available to cover it.

3.9.11.3. Where the payment is to be made to subcontracted work, the following must be fulfilled:

a) Documents of offer analysis used to select the subcontractor.

b) Contract stipulating the duties & responsibilities of OSD & the service provider.

c) Confirmation that the work is completed as per the terms & conditions of the contract.

d) And the like.

3.9.11.4. Where payments are to be made to contract workers on a part-time basis, income tax shall be deducted as per the relevant provisions of the law.

3.9.11.5. Where payments are to be made for creditors, confirmation is made that:

a) The liability actually exists.

b) The goods or services are received by OSD on competitive offer or acceptable offer basis.

3.9.11.6. Payments effected without the support of GRNs or Delivery Notes in the case of purchase advance shall be cleared without delay.

3.9.11.7. Finance and Purchasing head shall process payments for foreign purchases in accordance with the terms of letter of credits, cash against documents and other special and agreed arrangements with the supplier.

3.9.11.8. The Finance and Purchasing head shall ensure that supporting documents such as purchase requests, purchase orders, import permits, insurance and suppliers invoices are correct & complete before signing cheque payment vouchers and checks.

3.9.12. Procedures and Control over Check Payments for Recurring (Revenue) Expenditures

3.9.12.1. Beneficiary departments shall complete and sign payment request form and forward to the head of the beneficiary department for approval of the request for services supplied.

3.9.12.2. At the minimum the payment request shall be accompanied with the following original (copies) of documents:

a) Signed confirmation letter (Memo) from the heads of user departments for services supplied by the third party approved purchase request

b) Approved purchase request

c) Purchase order/service agreement made between service provider and OSD.

d) Goods received note for supply of goods

e) Other relevant document determined by circumstances

3.9.12.3. The Finance and Purchasing head shall check the completeness and accuracy of figures indicated in the above documents.

3.9.12.4. The appropriate official shall authorize payment of the request for payments processing.

3.9.12.5. The accountant shall prepare pre-numbered cheque payment voucher and the cheque in the name of the beneficiary.

3.9.12.6. The Finance and Purchasing head shall check the correctness of the work done by the accountant; certifies the payment by signing the payment voucher and the cheque and forwards them to the Executive Director for final approval.

3.9.12.7. The ED or the delegated signatory shall approve the payment voucher and sign the cheque.

3.9.12.8. At the time the check is signed, all documents supporting that payment shall be stamped "PAID" and cross referenced with cheque payments voucher by the accountant.

3.9.12.9. The vouchers shall be coded with the proper accounting codes.

3.9.12.10. Head of General Accounts/senior accountant shall check the correctness of the coding and forwards it to the data encoders.

3.9.12.11. The coded and checked payment voucher shall be encoded to the system by accountant in charge of encoding.

3.9.13. Procedures and Control over Bank Transfer Payments

3.9.13.1. Payments shall be made by sending authorizations letter signed by bank signatories to the concerned bank.

3.9.13.2. Copy of the bank letter shall be attached with bank advice and submitted to the Finance and administration Manager for updating the accounts.

3.9.13.3. All other procedures for check payments are wholly applicable.

3.9.14. Procedures and Control over Bank Reconciliation

3.9.14.1. The cashier or any other delegated employee shall collect all bank advises, bank statements, etc. from the bank for each bank account at least at the end of each month.

3.9.14.2. The Senior Accountant or other senior person assigned by Finance and Purchasing head shall undertake monthly bank reconciliation for all bank accounts by comparing the balance in the ledger with that of the bank statement.

3.9.14.3. Where the circumstances demand bank reconciliation shall be compiled for periods less than one month.

3.9.14.4. The senior accountant or staff delegated for such purpose shall scrutinize the bank statements and orders a printout of each bank account from the system.

3.9.14.5. On receiving the printouts, he or she shall review each statement/ printout noting any debits or credits in bank statements that do not have corresponding entries in the ledger printouts.

3.9.14.6. In case of items requiring clarification, the accountant shall communicate the same to the Finance and Purchasing head.

3.9.14.7. The Finance and Purchasing head shall communicate the bank inquiring about unknown bank debits and credits or any clarification needed.

3.9.14.8. Items pending clarification by the bank shall be clearly stated in bank reconciliation.

3.9.14.9. Outstanding deposit for more than one month shall immediately be communicated to the Finance and Purchasing head.

3.9.15. Procedures and Control over Petty Cash Establishment

3.9.15.1. The Finance and Purchasing head shall propose the amount of the fund required.

3.9.15.2. Once the float shall be approved by the ED, the Finance and Purchasing head shall communicate to all concerned officials of OSD via internal memo.

3.9.15.3. The float shall be established by writing the cheque in the name of the petty cashier.

3.9.15.4. Relevant cheque payment procedures are fully applicable.

3.9.16. Procedures and Control over Petty Cash Payments

3.9.16.1. The Petty cashier shall effect payment after verifying the supporting documents and appropriate officials of OSD has approved it.

3.9.16.2. Either a beneficiary or user unit shall initiate payment request. This request shall be affected by completing petty cash payment request form.

3.9.16.3. The approved payment request shall be given to the cashier so that the cashier prepares petty cash payment voucher.

3.9.16.4. The petty cash payment voucher shall be checked by an accountant and approved by the Finance and purchasing.

3.9.16.5. The beneficiary shall sign the petty cash voucher up on collection of money or issuance of an invoice or a receipt for the same.

3.9.16.6. Petty cash payment voucher and supporting documents shall be stamped "PAID from petty cash" & cross referenced with petty cash payment voucher at the time of payment by the petty cashier.

3.9.16.7. The cashier shall record the amount of payment in the petty cash book or excel spread sheet, which shows the petty cash balance on hand after each payment of petty cash.

3.9.16.8. The cashier shall keep all supporting documents under the cash safe box.

3.9.16.9. Senior accountant shall review the petty cash book on regular basis.

3.9.17. Procedures and Control over Petty Cash Replenishments

3.9.17.1. Petty cash fund shall be replenished when the float reaches about 20% of the established balance or at the end of every month.

3.9.17.2. The petty cashier shall initiate replenishment of the petty cash fund by completing the replenishment sheet to request replenishment.

3.9.17.3. On the summary sheet, it is important to show the total amount of expenditure and the amount remaining in the safe box.

3.9.17.4. The summary of the petty cash expenditure shall be submitted to the Finance and purchasing together with all supporting documents (receipts).

3.9.17.5. The Finance and purchasing head shall check the expenditure against supporting documents certifies the payment voucher and forwards the cheque to ED for approval.

3.9.17.6. The ED authorizes the replenishment by approving the payment voucher and signing the request form.

3.9.17.7. All other payment procedures are applicable as appropriate.

3.9.18. Procedures & Control over Establishment of Purchase Fund

3.9.18.1. The Finance and Purchasing head shall propose the amount and other attributes of the fund.

3.9.18.2. The ED of OSD shall authorize the purchase fund establishment by deciding on the proposal letter or schedule.

3.9.18.3. Payment shall be processed after the approval process is completed.

3.9.18.4. Cheque shall be prepared in the name of the purchaser or staff assigned to handle the fund.

3.9.18.5. All other payment procedures are applicable as appropriate.

3.9.19. Procedures & Control over Payments from Purchase Fund

3.9.19.1. User departments shall raise materials request to initiate the purchase.

3.9.19.2. The General Service Section shall issue authorized purchase request to the purchaser.

3.9.19.3. The purchaser shall buy the item, pays for it and collects suppliers' cash sales invoice.

3.9.19.4. The purchase process shall be governed by the purchase policy and relevant sections of this manual.

3.9.20. Procedures & Control over Replenishment of Purchase Fund

3.9.20.1. The replenishment process is similar to that of petty cash fund.

3.9.20.2. The payment voucher shall be prepared to replenish the fund is used to record the transactions.

3.9.20.3. No purchase advance shall be paid before clearing the earlier once.

3.9.20.4. Uncleared purchase advance shall be transferred to staff receivables account and recovered by payroll.

3.9.20.5. The purchaser is responsible for any shortages or overages of the fund.

3.9.21. Procedures & Control over Cheque Receipts and Issue

3.9.21.1. The Finance and purchasing head shall authorize or delegates an employee to collect cheque book from the bank.

3.9.21.2. The employee authorized or delegated to collect cheque book shall verify the correctness and completeness of the cheque leaves at the bank's counter.

3.9.21.3. Receipt of cheque book from the bank shall be recorded in cheque Memorandum Book indicating the cheque number, no. of cheque pads, date and recipient's signature for receipt, etc by the Grant Finance and compliance Manager.

3.9.21.4. Cheque book shall be issued to the accountant in charge for its preparation up on return of used pads.

3.9.21.5. Up on issue the cheque numbers, date and signature of the recipient shall be recorded in the cheque memorandum book by the Grant Finance and compliance Manager or any responsible body.

3.9.21.6. Only one cheque book shall be in use at a time for each location for one bank account.

3.9.21.7. Missed cheque book or leaf/leaves shall be reported to the bank immediately quoting the serial number of the missing cheques and requesting for "STOP PAYMENT" order. Appropriate check signatories should sign this order.

3.9.21.8. Spoiled/Erroneous/void cheques shall be stamped "VOID" and retained in the cheque book. If the cheque is already signed, the signature is mutilated immediately.

3.9.21.9. Used cheque book stubs shall be filed chronologically in the Head of Finance under the custody of the Head of Finance.

3.9.21.10. The Finance and Purchasing head shall keep unused cheque book under safe custody.

3.9.21.11. Cheque book shall be requested from the bank when at least one cheque book remains on hand by the Head of Finance (cheque signatories sign the order leaf).

3.10. TRADE AND OTHER RECEIVABLES

3.10.1. Nature and Definition

3.10.1.1. Receivables are generally defined as claims held against others for the future receipt of money, goods or services.

3.10.2. Classification of Receivables

3.10.2.1. Staff receivables: Include cash claims from employees of OSD. Such claims could arise from normal operation of the business such as travel advances made to sales personnel, temporary purchase advances made to purchasers or it could arise from extension of advances to employees which could include loans granted to the staff, or temporary advances extended to the staff which will be deducted from the salary of the staff at the end of the month the advance is made.

3.10.2.2. Advance payments: Payments made to suppliers and other parties (work advance, travel advance and other prepayments) expecting future benefits in a form of supply of goods or services in the future. These advance payments are assets of OSD until the other party provides the intended goods and services.

3.10.2.3. Purchase deposits: Claims against banks on letter of credit.

3.10.2.4. Bid Bonds Receivable: Deposits made with a view to participate in a certain venture that has economic advantage to OSD.

3.10.2.5. Sundry receivables: All receivables, which do not fit into any category of receivables defined above, such as interest receivable, withholding taxes receivable, segments receivables, etc. They might include minor receivables that are infrequent in nature and arise from miscellaneous transactions.

3.10.3. Recognition of Receivables

3.10.3.1. Receivables from employees are recognized when they receive payments.

3.10.3.2. Other receivables are recognized upon the occurrence of an event or transaction which gives OSD a legal claim against others.

3.10.4. Measurement of Receivables

3.10.4.1. OSD shall use amortized cost method for receivables held to collect contractual cash flows.

3.10.4.2. OSD shall use fair value method if the receivables are held principally for re-selling.

3.10.4.3. Receivables shall initially be measured at nominal value if passage of time between date the receivables are recognized and date of cash collection is not significant. But they shall be measured at present value of expected cash collections if the passage of time is significant (usually more than 12 months).

3.10.4.4. Using amortized cost method, receivables originally recognized at nominal value shall be subsequently reported at nominal value less provision for uncollectible. And those originally recognized at present value of expected cash collections shall be reported at the initial value plus effective annual interest less provision for uncollectible.

3.10.4.5. For those receivables initially measured at fair value, OSD shall subsequently report them at fair value with gain or loss to be reported in surplus or deficit.

3.10.5. Presentation and Disclosure

3.10.5.1. Receivables shall be classified in the statement of financial position as current or non-current. Current receivables are those collectible within one year from date of the statement. Non-current receivables are those collectible beyond one year.

3.10.5.2. The allowance for doubtful accounts shall be deducted from the related asset with the receivable being shown in statement of financial position either at:

3.10.5.3. Gross, less the allowance or Net the amount of the allowance indicated in the notes to the financial statements.

3.10.5.4. OSD shall disclose:

a) Movements in the balances of Account Receivables.

b) Provisions for doubtful accounts & its movements during the year.

c) Receivables which are pledged or otherwise restricted at the end of the reporting period.

d) Provision matrix.

e) Receivables that are transferred, if any.

3.10.6. Procedures and Control over Staff Receivables

3.10.6.1. Normally, OSD is advised to discourage advances. However, if there is a request by employee of OSD with valid reason, it is approved in accordance with the human resources policies of OSD.

3.10.6.2. Travel advances and loans given to employees are initiated from concerned Department

 

Here is the continuation of the cleanly extracted text from Section 3.10, Section 3.11, and Section 3.12 of the "Ipsas 9." manual, picking up exactly from where the previous page left off and removing all page numbers, scanner artifacts, and repetitive header/footer text:

 

3.10.6. Procedures and Control over Staff Receivables (Continued)

3.10.6.3. On the other hand, purchase advances and other types of advances are initiated from different departments of OSD depending upon the nature of the advances requested.

 

3.10.6.4. Loans to employees, travel advances, and purchase advances shall not be given to any employee unless authorized by the ED.

 

3.10.6.5. Loans to employees, travel advances, and purchase advances shall be formally requested by using Staff Advance Request Form.

 

3.10.6.6. The Staff Advance Request Form shall be prepared by the accountant and checked by the Finance and Purchasing head and approved by the ED.

 

3.10.6.7. The accountant checks the completeness of documents supporting the advance request approval.

 

3.10.6.8. The accountant maintains individual files for any advances made to employees of OSD.

 

3.10.6.9. Finance and Purchasing head or his delegate or senior accountant assigned for management of receivables checks the completeness of all supporting documents attached to the advance request approval accompanying the payment request form.

 

3.10.6.10. The senior accountant ensures that monthly settlements of the advances made to employees are effected through deduction from payroll.

 

3.10.6.11. Senior accountant assigned for receivable managements ensures that any deduction from monthly payroll does not exceed one-third of the employee's basic salary. The same is checked at the time of releasing the advance.

 

3.10.6.12. Senior accountant ensures that no fresh loans are given before the previous loans are recovered in full.

 

3.10.6.13. The balance in individual staff receivables account is communicated to the concerned staff periodically to get confirmation.

 

3.10.6.14. Before any employee is given termination pay, the finance office confirms that no debts to OSD remain unpaid.

 

3.10.6.15. When the employee brings the necessary documents to settle the advances (such as travel, purchases, etc.), the Accountant ensures that receipts brought are valid and complete, that is, the receipts are stamped, signed and show the name of the payee, & consistency with related documents both in terms of date and amount.

 

3.10.6.16. The Finance and Purchasing head shall review and approve the advances settlement, and then pass them for filing, coding, and posting to the Accountant.

 

3.10.6.17. The Accountant shall report the cases of outstanding advances which are not settled on time to the Finance and Purchasing head.

 

3.10.6.18. The Finance and Purchasing head shall discuss with those employees with outstanding advances to settle accordingly.

 

3.10.6.19. The Accountant shall produce a Staff Debtor Schedule at the end of each month showing the movement and reconcile the staff debtors.

 

3.10.6.20. The Finance and Purchasing head shall check all staff outstanding balance with individual separate excel spreadsheet.

 

3.10.6.21. When the staff takes a local advance and not settled it timely, the Grant Finance and compliance Manager shall inform the employee orally to deposit the outstanding balance.

 

3.10.6.22. If that is not done, the Grant Finance and compliance Manager starts to deduct the outstanding amount from his/her monthly salary on regular basis.

 

3.10.6.23. For purchase advance, or medical advance the same steps shall be taken.

 

3.10.7. Grant/Donor Receivable

3.10.7.1. Grant/Donor receivables refer to receivable from donating agency or grantor.

 

3.10.7.2. The Finance and Purchasing head shall be responsible to periodically review the balances and check whether the balance shown represents outstanding issues.

 

3.10.7.3. The Finance and Purchasing head shall be responsible to closely monitor for collection of these receivables.

 

3.10.8. Sundry Receivables

3.10.8.1. These receivables refer to all receivables, which do not fit to any category of receivables described above.

 

3.10.8.2. The senior accountant is responsible to follow up the timely settlement of such receivables' balances.

 

3.10.8.3. The senior accountant reviews accounting records on monthly basis and generate monthly reports to the Finance and Purchasing head.

 

3.10.8.4. The senior accountant issues monthly statements to such sundry receivables and ensures that year end balances are reconciled and confirmed.

 

3.10.8.5. All other provisions stated above are applicable as appropriate.

 

3.11. FOREIGN EXCHANGE TRANSACTIONS (IPSAS 4)

3.11.1. Nature and Definition

3.11.1.1. Foreign currency is a currency other than the reporting currency of OSD.

 

3.11.1.2. Reporting currency is the currency used in presenting the financial statements. The currency of report for OSD is the Ethiopian Birr.

 

3.11.1.3. Exchange rate is the ratio of exchange of two currencies.

 

3.11.1.4. Exchange difference is the difference resulting from reporting the same amount of foreign currency at different exchange rates at different dates.

 

3.11.1.5. Foreign exchange gain/loss (Conversion gain/loss) is the result of transactions involving currencies other than the Ethiopian Birr and restatement of foreign currency denominated assets and liabilities at the reporting date.

 

3.11.1.6. Closing rate is the spot exchange rate at the reporting date or date of SFP.

 

3.11.1.7. Monetary items are money held and assets and liabilities to be received or paid in fixed or determinable amounts of money.

 

3.11.1.8. Functional currency is the currency of the primary economic environment in which the OSD operates.

 

3.11.1.9. Net investment in a foreign operation is the amount of the reporting OSD's interest in the net assets/equity of that operation.

 

3.11.1.10. Spot exchange rate is the exchange rate for immediate delivery.

 

3.11.2. Initial Recognition and Measurement

3.11.2.1. All foreign currency transactions should be recorded, on initial recognition, in OSD's reporting currency (i.e. Ethiopian Birr) by applying to the foreign currency amount the exchange rate between Ethiopian Birr and the foreign currency at the date of the transaction; an average rate for a period (e.g. week or month) may be used if exchange rates don't fluctuate significantly.

 

3.11.3. Subsequent Recognition and Measurement

3.11.3.1. At each reporting date (SFP):

 

a) Foreign currency monetary items should be reported using the closing rate;

 

b) Non-monetary items denominated in foreign currency which are carried at historical cost should be reported using the exchange rate at the date of the transaction; and

 

c) Non-monetary items denominated in foreign currency which are carried at fair value should be reported using the exchange rates that existed when the values were determined.

 

3.11.4. Recognition of Exchange Differences

3.11.4.1. Exchange differences arising:

 

a) on the settlement of monetary items, or

 

b) on translating monetary items at rates different from those at which they were translated on initial recognition during the period or in previous financial statements, shall be recognized in surplus or deficit in the period in which they arise.

 

3.11.4.2. When a gain or loss on a non-monetary item is recognized directly in net assets/equity, any exchange component of that gain or loss shall be recognized directly in net assets/equity. Conversely, when a gain or loss on a non-monetary item is recognized in surplus or deficit, any exchange component of that gain or loss shall be recognized in surplus or deficit.

 

3.11.4.3. Exchange differences arising on a monetary item that forms part of OSD's net investment in a foreign operation shall be recognized in surplus or deficit in the separate financial statements of the reporting OSD or the individual financial statements of the foreign operation, as appropriate.

 

3.11.5. Change in Functional Currency

3.11.5.1. When there is a change in OSD's functional currency, the OSD shall apply the translation procedures applicable to the new functional currency prospectively from the date of the change.

 

3.11.6. Presentation and Disclosure

3.11.6.1. Exchange gain/loss would be included in SFP for the year in which conversion (whether payment or receipt) takes place. When a gain/loss on a non-monetary item is recognized in OCI (for example, where property is revalued), any related exchange differences should also be recognized in OCI.

 

3.11.6.2. Significant Disclosures:

 

a) Exchange rate differences included in:

 

(i) Surplus or Loss (except for financial instruments measured at FV);

 

(ii) In accounting policy note disclose that Surplus/Loss items are translated at rate at transaction dates.

 

3.11.6.3. Additional disclosures

 

b) Reasons (if applicable):

 

(i) Why there has been a change in the functional currency;

 

(ii) Why the presentation and functional currency are different if OSD's presentation currency is different from its functional currency, its financial statements should only be described as compliant with IFRSs if all the requirements of IPSAS 4 are applied.

 

3.12. ACCOUNTING FOR EMPLOYEE BENEFITS (IPSAS 39)

3.12.1. Nature and Definition of Employee Benefits

3.12.1.1. Employee benefits are all forms of consideration given by OSD in exchange for service rendered by employees or for the termination of employment.

 

3.12.1.2. There are four categories of employee benefits that need a different accounting treatment for each (i.e. Short-term employee benefits, Termination benefits, Post-employment benefits and other long-term employee benefits).

 

3.12.1.3. Short-term employee benefits: Are employee benefits (other than termination benefits) that are expected to be settled wholly before twelve months after the end of the annual reporting period in which the employees render the related service. They include wages, salaries and social security contributions, paid annual leave, paid sick leave, profit-sharing and bonuses, and non-monetary benefits (such as medical care, housing, cars and free or subsidized goods or services) for current employees, if any.

 

3.12.1.4. Termination benefits: Are employee benefits provided in exchange for the termination of an employee's employment as a result of either OSD's decision to terminate an employee's employment before the normal retirement date or an employee's decision to accept an offer of benefits in exchange for the termination of employment.

 

3.12.1.5. Post-employment benefits: Are employee benefits (other than termination benefits and short-term employee benefits) that are payable after the completion of employment.

 

3.12.1.6. Other long-term employee benefits: Are all employee benefits other than short-term employee benefits, post-employment benefits and termination benefits.

 

3.12.2. Recognition and Measurement for Short-term Employee Benefits

3.12.2.1. When an employee has rendered service to OSD during an accounting period, OSD shall recognize the undiscounted amount of short-term employee benefits expected to be paid in exchange for that service:

 

a) As a liability (accrued expense), after deducting any amount already paid. If the amount already paid exceeds the undiscounted amount of the benefits, OSD shall recognize that excess as an asset (prepaid expense) to the extent that the prepayment will lead to, for example, a reduction in future payments or cash refund.

 

b) As an expense, unless another IPSAS requires or permits the inclusion of the benefits in the cost of an asset (for example, IPSAS 12 Inventories and IPSAS 17 Property, Plant and Equipment).

 

3.12.2.2. The accounting entry is as follows: (Note: The visual accounting entries are omitted from the source text).

 

3.12.3. Recognition and Measurement Short-term Paid Absences

3.12.3.1. OSD may pay employees for absence for various reasons including holidays, sickness and short-term disability, maternity or paternity, jury service and military service. Expected cost of short-term paid absences shall be recognized when the employees render service that increases their entitlement to future paid absences (in the case of accumulating paid absences); or when the absences occur (in the case of non-accumulating paid absences).

 

3.12.4. Recognition & Measurement of Accumulating Paid Absences

3.12.4.1. Accumulating paid absences include such absences as paid annual leave, if any, that are carried forward and can be used in future periods if the current period's entitlement is not used in full.

 

3.12.4.2. Accumulating paid absences may be either vesting (in other words, employees are entitled to a cash payment for unused entitlement on leaving OSD) or non-vesting (when employees are not entitled to a cash payment for unused entitlement on leaving).

 

a) OSD shall measure and recognize the expected cost of accumulating paid absences as the additional amount that it expects to pay as a result of the unused entitlement that has accumulated at the end of the reporting period.

 

3.12.5. Recognition and Measurement of Non Accumulating Paid Absences

3.12.5.1. Non-accumulating paid absences do not carry forward.

 

3.12.5.2. They lapse if the current entitlement is not used in full and do not entitle employees to a cash payment for unused entitlement on leaving OSD.

 

3.12.5.3. This is commonly the case for sick pay (to the extent that unused past entitlement does not increase future entitlement), maternity or paternity leave and paid absences for jury service or military service.

 

3.12.5.4. OSD shall recognize no liability or expense until the time of the absence, because employee service does not increase the amount of the benefit.

 

3.12.5.5. OSD shall recognize the expected cost of short-term employee benefits in the case of non-accumulating paid absences, when the absences occur.

 

3.12.6. Recognition and Measurement of Bonus Plans

3.12.6.1. OSD shall recognize the expected cost of bonus payments when and only when:

 

(i) It has a present legal or constructive obligation to make such payments as a result of past events; and

 

(ii) A reliable estimate of the obligation can be made.

 

3.12.6.2. OSD may have no legal obligation to pay a bonus. If OSD has such a practice before, it has a constructive obligation because OSD has no realistic alternative but to pay them.

 

3.12.6.3. OSD can make a reliable estimate of its legal or constructive obligation under a bonus plan when and only when:

 

(i) the formal terms of the plan contain a formula for determining the amount of the benefit;

 

(ii) OSD determines the amounts to be paid before the financial statements are authorized for issue; or

 

(iii) Past practice gives clear evidence of the amount of OSD's constructive obligation.

 

3.12.6.4. OSD shall recognize the bonus plans (if any) as an expense.

 

3.12.6.5. If bonus payments are not expected to be settled wholly before twelve months after the end of the annual reporting period in which the employees render the related service, those payments are other long-term employee benefits.

 

3.12.7. Disclosure of Short-term Benefits

3.12.7.1. Although this Standard does not require specific disclosures about short-term employee benefits, other IPSASs may require disclosures.

 

(i) IPSAS 20 Related party disclosures require disclosure about employee benefits for key management personnel.

 

(ii) IAS 1 Presentation of Financial Statements requires disclosure of employee benefits expense.

 

3.12.8. Recognition and Measurement for Termination Benefits

3.12.8.1. Termination benefits result from either OSD's decision to terminate the employment or an employee's decision to accept OSD's offer of benefits in exchange for termination of employment.

 

3.12.8.2. Termination benefits do not include employee benefits resulting from termination of employment at the request of the employee without OSD's offer, or as a result of mandatory retirement requirements, because those benefits are post-employment benefits.

 

3.12.8.3. Some termination benefits are provided in accordance with the terms of an existing employee benefit plan (E.g. they may be specified by statute, employment contract or union agreement, or may be implied as a result of the employer's past practice of providing similar benefits).

 

3.12.9. Recognition of Termination Benefits

3.12.9.1. OSD shall recognize a liability and expense for termination benefits at the earlier of the following dates:

 

a) when the organization can no longer withdraw the offer of those benefits (either the termination plan exists or employee accepts the offer of benefits); and

 

b) When OSD recognizes costs for a restructuring that is within the scope of IPSAS 19 and involves the payment of termination benefits.

 

3.12.9.2. For termination benefits payable as a result of an employee's decision to accept an offer of benefits in exchange for the termination of employment, the time when OSD can no longer withdraw the offer of termination benefits is the earlier of:

 

a) When the employee accepts the offer; and

 

b) When a restriction (e.g. a legal, regulatory or contractual requirement or other restriction) on OSD's ability to withdraw the offer takes effect.

 

3.12.9.3. For termination benefits payable as a result of OSD's decision to terminate an employee's employment, OSD can no longer withdraw the offer when OSD has communicated to the affected employees a plan of termination meeting all of the following criteria:

 

a) Actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made.

 

b) The plan identifies the number of employees whose employment is to be terminated, their job classifications or functions and their locations (but the plan need not identify each individual employee) and the expected completion date.

 

c) The plan establishes the termination benefits that employees will receive in sufficient detail that employees can determine the type and amount of benefits they will receive when their employment is terminated.

 

 

 

3.12.10. Measurement of Termination Benefits

3.12.10.1. OSD shall measure termination benefits on initial recognition, and shall measure and recognize subsequent changes, in accordance with the nature of the employee benefit.

 

3.12.10.2. If the termination benefits are expected to be settled wholly before 12 months after the end of the reporting period, then OSD should apply the requirements for short-term employee benefits (so recognize it as an expense to surplus or deficit on undiscounted basis);

 

3.12.10. Measurement of Termination Benefits (Continued)

3.12.10.3. If the termination benefits are not expected to be settled wholly before 12 months after the end of the reporting period, then OSD should apply the requirements for other long-term employee benefits (so recognize it as an expense to surplus or deficit on a discounted basis).

3.12.11. Disclosure of Termination Benefits

3.12.11.1. Although this Standard does not require specific disclosures about termination benefits, other IFRSs may require disclosures.

a) IPSAS 20 requires disclosures about employee benefits for key management personnel.

b) IAS 1 requires disclosure of employee benefits expense.

3.12.12. Recognition & Measurement for Post-employment Benefits

3.12.12.1. Under a Defined Contribution Plan, OSD's legal or constructive obligation is limited to the amount that it agrees to contribute into a separate OSD (fund) or pension schemes, and it will have no legal or constructive obligation to pay further contributions if the fund does not hold sufficient assets to pay all employee benefits relating to employee service in the current and prior periods.

3.12.12.2. The amount of the post-employment benefits received by the employee is determined by the amount of contributions paid by OSD (and perhaps also the employee) to a post-employment benefit plan or to an insurance enterprise, together with investment returns arising from the contributions.

3.12.12.3. Accounting for defined contribution plans is straightforward because the reporting OSD's obligation for each period is determined by the amounts to be contributed for that period. Consequently, no actuarial assumptions are required to measure the obligation or the expense, and there is no possibility of any actuarial gain or loss.

3.12.13. Recognition and Measurement of Defined Contribution Plans

3.12.13.1. When an employee has rendered service to OSD during a period, OSD shall recognize the contribution payable to a defined contribution plan in exchange for that service:

a) As a liability (accrued expense), after deducting any contribution already paid. If the contribution already paid exceeds the contribution due for service before the end of the reporting period, OSD shall recognize that excess as an asset (prepaid expense) to the extent that the prepayment will lead to, for example, a reduction in future payments or cash refund.

b) As an expense, unless another IPSAS requires or permits the inclusion of the contribution in the cost of an asset (see, for example, IPSAS 12 and IPSAS 17).

3.12.13.2. The employer shall recognize contributions payable to a defined contribution plan as an expense to surplus or deficit (unless another IPSAS requires or permits the inclusion of the benefits in the cost of an asset) as follows: (Note: The visual accounting entries are omitted from the source text).

3.12.13.3. When the contributions are not expected to be settled wholly before twelve months after the end of the reporting period, they shall be discounted.

3.12.14. Disclosure of Defined Contribution Plans

3.12.14.1. OSD shall disclose the amount recognized as an expense for defined contribution plans.

3.12.14.2. Post-employment benefits include items such as the following:

a) Retirement benefits (e.g., pensions and lump sum payments on retirement); &

b) Other post-employment benefits, such as post-employment life insurance and post-employment medical care.

3.12.15. Defined Benefits Plans

3.12.15.1. Under defined benefit plans:

a) OSD's obligation is to provide the agreed benefits to current and former employees; and

b) Actuarial risk (that benefits will cost more than expected) and investment risk fall, in substance, on OSD. If actuarial or investment experience are worse than expected, OSD's obligation may be increased.

3.12.15.2. Under defined benefit plans (Note: Text is incomplete in source text).

 

 

3.12.16. Recognition and Measurement for Other Long-term Employee Benefits

3.12.16.1. Other long-term employee benefits include items such as the following, if not expected to be settled wholly before twelve months after the end of the annual reporting period in which the employees render the related service:

a) Long-term paid absences such as long-service or sabbatical leave;

b) Jubilee/anniversary or other long-service benefits such as severance pay;

c) Long-term disability benefits;

d) Profit-sharing and bonuses; and

e) Deferred/Overdue remuneration.

3.12.16.2. The measurement of other long-term employee benefits is not usually subject to the same degree of uncertainty as the measurement of post-employment benefits. For this reason, this Standard requires a simplified method of accounting for other long-term employee benefits. Unlike the accounting required for post-employment benefits, this method does not recognize measurements in other comprehensive income.

3.12.16.3. The treatment for other long-term employee benefits payments is similar to the defined benefit pension plans, but the difference is that any actuarial gains or losses are recognized immediately.

3.12.16.4. The present value of the obligation at the end of the reporting period is compared to the fair value of the assets available to discharge the liability; any deficit should be recorded as a liability in the financial statements.

3.12.16.5. Any service costs, net interest and measurements should all be recognized in surplus or deficit unless another accounting standard requires a different treatment.

3.12.17. Disclosure of Other Long-term Employee Benefits

3.12.17.1. Although this standard does not require specific disclosures about other long-term employee benefits, other IFRSs may require disclosures.

a) IPSAS 20 requires disclosures about employee benefits for key management personnel.

b) IAS 1 requires disclosure of employee benefits expense.

3.12.18. Basics of Payroll Preparation

3.12.18.1. To install the name of an employee in the permanent or contractual payroll list of OSD, a letter of employment signed by the ED or other appropriate delegated authority is a requirement.

3.12.18.2. Salaries on the payroll list shall be altered only when a promotion, appointment, or termination letter from the ED or designated authority is received to this effect.

3.12.18.3. All taxes due on the taxable salary of employees shall be deducted on the basis of the current Income Tax proclamation, such as Income Tax Proclamation No. 979/2016, Council of Ministers Regulation No. 410/2017, and related directives and subsequent amendments issued, if any.

3.12.18.4. Pension deductions from employees and contributions by OSD shall be according to the Private Enterprise Employees' Pension Proclamation No. 715/2011 and Private Enterprise Employees' Pension (Amendment) Proclamation No. 908/2015 and related directives and subsequent amendments issued, if any.

3.12.18.5. OSD's period of salary payment, for permanent and contractual employees, is at the end of every 28th of the Ethiopian calendar per month.

3.12.18.6. Salary payment to both permanent and part-time employees shall be through remitting the net salary due to each employee into the bank savings account of each employee.

3.12.18.7. Income tax and pension deductions shall be paid to the concerned Agencies within the time limit put on proclamations.

3.12.18.8. A payroll reconciliation statement that reconciles the current month with the preceding month's payroll shall be prepared every month along with every payroll and shall be presented to the Finance and Administration Manager as a supporting statement together with other relevant documents.

3.12.19. Procedures for Payroll Preparation

3.12.19.1. Preparation of payroll begins on the day of the Ethiopian calendar (Note: Specific day number is missing in source text).

3.12.19.2. Full responsibility of payroll preparation is given to the finance department.

3.12.19.3. Only when there is a salary and benefit change is a copy of the letter kept in the file.

3.12.19.4. New employments, promotions, transfers, court orders or other legal deductions, fines, etc., letters originating from the ED or any designated personnel, and approved overtime hours (if any) originating from Departments are some of the inputs to process the salary of the current month.

3.12.19.5. After ascertaining the validity and correctness of the payroll inputs mentioned above, the designated accountant shall prepare the current month payroll on a spreadsheet or using the Payroll software (if any).

3.12.19.6. Where payroll is prepared electronically, the tax rates and pension contribution rates shall be stored in the master file of the payroll software and shall be updated whenever changes are made in the tax and pension proclamations.

3.12.19.7. Other deductions like court orders, fines, staff loans, etc., shall be computed from the concerned employee to arrive at the final net pay figure for each employee.

3.12.19.8. A payroll reconciliation statement shall be prepared for the current month payroll depicting changes since the last payroll.

3.12.19.9. The payroll reconciliation statement shall clearly indicate salaries and benefits (if any) of new entrants into the payroll list and employees cancelled out from the payroll list.

3.12.19.10. Changes may include but are not limited to the following elements:

a) New employments;

b) Transfers from Branches to head office or from head office to branches;

c) Newly installed benefits, or allowances;

d) Terminations or annual leave.

3.12.19.11. The completed payroll shall be thoroughly checked against all input documents by the Finance and Purchasing head.

3.12.19.12. Based on the payroll list supported by all relevant input documents and the Payroll Reconciliation Statement, an instruction letter shall be prepared to the bank to disburse the monthly salary of each employee to his/her personal savings account.

3.12.19.13. The prepared instruction letter to the bank together with all supporting documents shall be submitted, for approval and signature, to the ED or the delegate.

3.12.19.14. The original approved payroll list with its covering letter shall be dispatched to the Bank that disburses salary payment to each of the employees' savings accounts.

3.12.19.15. Upon receiving Bank Debit Advices indicating the crediting of each of the Savings Accounts of OSD employees, the second copy of the payroll list together with the Debit Advices shall be transferred to the finance department.

3.12.20. Policy and Procedures of Part-Timers' Payment

3.12.20.1. Documents that are necessary to prepare Part-time Professionals' payment are the following:

a) Copy of Contractual agreement signed between OSD and the Professional;

b) Professionals' Performance Report prepared by Staff at each Department and approved by the designated head.

3.12.20.2. On the basis of the above, the accountant in charge of preparing payments shall first verify the report against C-Net generated Cash/Credit Sales reports.

3.12.20.3. Upon ascertaining the correctness of the above, the accountant shall prepare the gross payment due to the Part-time professional.

3.12.20.4. Ask the Part-time Professional if s/he is earning other income in other organizations.

3.12.20.5. If the Part-time Professional discloses his/her other earnings, the accountant shall sum this up with the gross payment and compute the attributable tax due from the Part-time Professional.

3.12.20.6. Computes the net pay, prepares the payment voucher and cheque, and submits them to the Senior Accountant for checking and later to the Grant Finance and Compliance head for approval and signature on the Cheque and Payment Voucher.

3.12.21. Policy and Procedures for Overtime Work

3.12.21.1. OSD can request an employee to work overtime pursuant to Labor Proclamation No. 1156/2019 and subsequent updates, if any.

3.12.21.2. The overtime work requisition form shall reach the Finance and Purchasing head when the concerned Department Manager has approved the form after the work is done based upon actual hours.

3.12.21.3. Departments requiring overtime work shall request their respective Department Manager for authorization in writing before executing overtime work by putting forward the following specific points:

a) The specific task that required overtime work together with the reason why it is not covered in normal working hours;

b) Total overtime hours and number of employees required to accomplish the task;

c) Expected output.

3.12.21.4. Overtime work shall commence only after obtaining authorization from the ED depending on the level of delegation from Department Managers.

3.12.21.5. Department Managers that have obtained approval from their respective superiors shall submit a performance report about work accomplished during the overtime work.

3.12.21.6. Overtime payment requests shall be accompanied by approved payment authorization from the ED and a performance report, if significant.

3.12.21.7. Overtime shall be paid by incorporating it into the monthly payroll unless there is an adequate reason for paying it before payroll time. OSD's normal office working hours is 176 hours (Monday to Friday 8 hours/day  40 hours + 4 Hours Saturdays) per month.

3.12.21.8. Overtime payments for ordinary days, rest days, and holidays shall be according to Labor Proclamation No. 1156/2019, which is as follows:

Shift Type

Hours

Rate

Ordinary days

Between 6:00 AM to 10:00 PM

1.25 (1.5)

Late hours

Between 10:00 PM to 6:00 AM

1.50 (1.75)

Rest days

Weekly rest days

2.00

Holidays

Public holidays

2.50

 

 

3.12.21.9. The Finance and Purchasing head is responsible to follow up on any changes in the proclamation and to make the appropriate updating of this policy. Approved identified temporary tasks or projects, accompanied by an overtime sheet for each employee assigned to the task and approved by department Heads and the ED, shall be the basis to compute overtime payment.

3.12.21.10. The accountant assigned for the preparation of payroll shall check:

a) The approval letter against the submitted total hours worked;

b) Verify each line of the overtime sheet against the calendar to ensure the claimed hour is overtime, and if it falls on rest days or holidays and if the computation of time worked is correct.

3.12.21.11. The accountant in charge shall then summarize normal, rest days, and holiday overtime hours worked on each overtime sheet and compute the appropriate overtime by using the formula.

3.12.21.12. The computed overtime payment for each entitled employee shall be inserted into the appropriate monthly payroll against the name of the employee.

3.12.22. Policy and Procedures for Annual Leave Pay

3.12.22.1. Upon payment or accruing of accumulated annual leave, tax shall be computed taking into account the period the annual leave covers.

3.12.22.2. As annual leave is accumulated throughout the year, computation of tax due considers the time period the annual leave covers.

3.12.22.3. At the SFP date, the finance and administration department accrues unused annual leave of employees.

3.12.23. Policies and Procedures for Severance Pay

3.12.23.1. OSD shall pay severance pay to employees as per Labor Proclamation No. 1156/2019 and subsequent updates, if any.

3.12.23.2. At the SFP date, the finance and administration department accrues accumulated severance pay for employees who are eligible for severance pay as per Labor Proclamation No. 1156/2019.

3.12.24. Policy and Procedures for Bonus

3.12.24.1. In accordance with the Policy of OSD, granting a bonus to management and employees is at the discretion of the ED and/or Board of Directors.

3.12.24.2. Granting of a bonus is communicated to the finance and administration head by a letter signed by the ED.

3.13. LIABILITIES, ACCRUALS, PROVISIONS AND CONTINGENT LIABILITIES (IPSAS 19)

3.13.1. Nature and Definition

3.13.1.1. Liability is a present obligation arising from past events, the settlement of which is expected to result in an outflow from OSD of resources embodying economic benefits. In general, at OSD, liabilities are said to exist when OSD becomes a party to the contract and, as a consequence, has a legal obligation to surrender economic benefits in the future.

3.13.1.2. Under this guideline, liabilities to be incurred as a result of OSD's commitment to purchase goods or services are generally not recognized until at least one of the parties has performed under the agreement. For example, the mere placement of a purchase order does not generally bring a liability for the consideration to be paid at the time of the commitment, but instead delays recognition until the ordered goods or services have been received.

3.13.1.3. A legal obligation is an obligation that derives from:

a) A contract (through its explicit or implicit terms);

b) Legislation; or

c) Other operation of law.

3.13.1.4. A constructive obligation is an obligation that derives from an OSD's actions where:

a) By an established pattern of past practice, published policies, or a sufficiently specific current statement, the OSD has indicated to other parties that it will accept certain responsibilities; and

b) As a result, the OSD has created a valid expectation on the part of those other parties that it will discharge those responsibilities.

3.13.1.5. An obligating event is an event that creates a legal or constructive obligation that results in an OSD having no realistic alternative to settling that obligation.

3.13.1.6. Executory contracts are contracts under which neither party has performed any of its obligations, or both parties have partially performed their obligations to an equal extent.

3.13.1.7. An onerous contract is a contract for the exchange of assets or services in which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits or service potential expected to be received under it.

3.13.1.8. Provision is also treated as a liability of uncertain timing or amount.

3.13.1.9. A contingent asset is a possible asset that arises from past events, and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the OSD.

3.13.1.10. Contingent Liability is:

a) A possible obligation that arises from past events and whose existence will only be confirmed by the occurrence of one or more uncertain events; or

b) A present obligation that arises from past events but is not recognized because it is not probable that an outflow of resources will be required or the amount of the obligation cannot be measured with sufficient reliability.

3.13.2. Classification

3.13.2.1. In general, at OSD, a liability should be classified as a current liability when it:

a) Is expected to be settled in the normal course of OSD's operating cycle; or

b) Is due to be settled within 12 months from the end of the reporting date.

All other liabilities should be classified as non-current liabilities

3.14.9.8. OSD shall apply the Fair Value Model to right-of-use assets that meet the definition of investment property in IPSAS 16.

3.14.9.9. After initial recognition, OSD that chooses the Fair Value Model should measure all of its right-of-use assets at Fair Value.

3.14.9.10. A gain or loss arising from a change in the Fair Value of an investment property should be recognized in net surplus or deficit for the period in which it arises.

Model 3: Revaluation Model

3.14.9.11. If right-of-use assets relate to a class of property, plant and equipment to which the lessee applies the revaluation model in IPSAS 17, a lessee may elect to apply that revaluation model to all of the right-of-use assets that relate to that class of property, plant and equipment.

3.14.9.12. Carry the asset at a Revalued amount/ Fair Value at the date of the revaluation less any subsequent Accumulated Amortization and Impairment Losses.

3.14.9.13. OSD must be consistent in its classification of a class of right-of-use assets.

3.14.10. Subsequent Measurement of the Lease Liability

3.14.10.1. After the commencement date, a lessee (OSD) shall measure the lease liability by:

a) increasing the carrying amount to reflect interest on the lease liability;

b) reducing the carrying amount to reflect the lease payments made; and

c) remeasuring the carrying amount to reflect any reassessment or lease modifications or to reflect revised in-substance fixed lease payments.

3.14.10.2. Interest on the lease liability in each period during the lease term shall be the amount that produces a constant periodic rate of interest on the remaining balance of the lease liability.

3.14.10.3. The periodic rate of interest is the discount rate or if applicable the revised discount rate.

3.14.11. Reassessment of the Lease Liability

3.14.11.1. After the commencement date, a lessee shall re-measure the lease liability to reflect changes to the lease payments.

3.14.11.2. A lessee (OSD) shall recognize the amount of the re-measurement of the lease liability as an adjustment to the right-of-use asset. However, if the carrying amount of the right-of-use asset is reduced to zero and there is a further reduction in the measurement of the lease liability, a lessee shall recognize any remaining amount of the re-measurement in surplus or deficit.

3.14.11.3. A lessee shall re-measure the lease liability by discounting the revised lease payments using a revised discount rate, if either:

a) There is a change in the lease term. A lessee shall determine the revised lease payments on the basis of the revised lease term; or

b) There is a change in the assessment of an option to purchase the underlying asset in the context of a purchase option. A lessee shall determine the revised lease payments to reflect the change in amounts payable under the purchase option.

 

 

]3.14.12. Lease Modifications

3.14.12.1. A lessee (OSD) shall account for a lease modification as a separate lease if both:

a) the modification increases the scope of the lease by adding the right to use one or more underlying assets; and

b) the consideration for the lease increases by an amount commensurate with the stand-alone price for the increase in scope and any appropriate adjustments to that stand-alone price to reflect the circumstances of the particular contract.

3.14.12.2. For a lease modification that is not accounted for as a separate lease, at the effective date of the lease modification a lessee shall:

a) allocate the consideration in the modified contract;

b) determine the lease term of the modified lease and;

c) remeasure the lease liability by discounting the revised lease payments using a revised discount rate. The revised discount rate is determined as the interest rate implicit in the lease for the remainder of the lease term, if that rate can be readily determined, or the lessee's incremental borrowing rate at the effective date of the modification, if the interest rate implicit in the lease cannot be readily determined.

3.14.12.3. For a lease modification that is not accounted for as a separate lease, the lessee shall account for the re-measurement of the lease liability by:

a) Decreasing the carrying amount of the right-of-use asset to reflect the partial or full termination of the lease for lease modifications that decrease the scope of the lease. The lessee shall recognize in surplus or deficit any gain or loss relating to the partial or full termination of the lease.

b) Making a corresponding adjustment to the right-of-use asset for all other lease modifications.

3.14.13. Presentation

3.14.13.1. A lessee (OSD) shall either present in the statement of financial position, or disclose in the notes:

a) Right-of-use assets separately from other assets.

b) Lease liabilities separately from other liabilities.

3.14.13.2. In the statement of surplus or deficit and other comprehensive income, a lessee (OSD) shall present interest expense on the lease liability separately from the depreciation charge for the right-of-use asset.

3.14.13.3. In the statement of cash flows, a lessee shall classify:

a) cash payments for the principal portion of the lease liability within financing activities;

b) cash payments for the interest portion of the lease liability applying the requirements in IPSAS 2 Statement of Cash Flows for interest paid; and

c) Short-term lease payments, payments for leases of low-value assets and variable lease payments not included in the measurement of the lease liability within operating activities.

3.14.14. Disclosure

3.14.14.1. The objective of the disclosures is for lessees to disclose information in the notes that, together with the information provided in the statement of financial position, statement of Performance and statement of cash flows, gives a basis for users of financial statements to assess the effect that leases have on the financial position, financial performance and cash flows of the lessee.

3.14.14.2. A lessee (OSD) shall disclose information about its leases for which it is a lessee in a single note or separate section in its financial statements. However, a lessee need not duplicate information that is already presented elsewhere in the financial statements, provided that the information is incorporated by cross-reference in the single note or separate section about leases.

3.14.14.3. A lessee (OSD) shall provide the disclosures in a tabular format, unless another format is more appropriate.

3.14.14.4. A lessee shall disclose a maturity analysis of lease liabilities of IFRS 7 Financial Instruments: Disclosures separately from the maturity analyses of other financial liabilities.

3.14.14.5. In addition to the above disclosures, a lessee shall disclose additional qualitative and quantitative information about its leasing activities necessary to meet the disclosure objective.

3.14.15. Recognition & Measurement for Lease - OSD as Lessor

3.14.15.1. A lessor shall classify each of its leases as either an operating lease or a finance lease.

3.14.15.2. A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership of an underlying asset.

3.14.15.3. A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership of an underlying asset.

3.14.15.4. Whether a lease is a finance lease or an operating lease depends on the substance of the transaction rather than the form of the contract.

3.14.15.5. Examples of situations that individually or in combination would normally lead to a lease being classified as a finance lease are:

a) the lease transfers ownership of the underlying asset to the lessee by the end of the lease term;

b) the lessee has the option to purchase the underlying asset at a price that is expected to be sufficiently lower than the fair value at the date the option becomes exercisable for it to be reasonably certain, at the inception date, that the option will be exercised;

c) the lease term is for the major part of the economic life of the underlying asset even if title is not transferred;

d) at the inception date, the present value of the lease payments amounts to at least substantially all of the fair value of the underlying asset, and

e) the underlying asset is of such a specialized nature that only the lessee can use it without major modifications.

Lease classification is made at the inception date and is reassessed only if there is a lease modification.

3.14.15.6. Changes in estimates (for example, changes in estimates of the economic life or of the residual value of the underlying asset), or changes in circumstances (for example, default by the lessee), do not give rise to a new classification of a lease for accounting purposes.

3.14.16. Recognition of Finance Leases

3.14.16.1. At the commencement date, a lessor shall recognize assets held under a finance lease in its statement of financial position and present them as a receivable at an amount equal to the net investment in the lease.

3.14.17. Initial Measurement of Finance Leases

3.14.17.1. The lessor shall use the interest rate implicit in the lease to measure the net investment in the lease.

3.14.17.2. At the commencement date, the lease payments included in the measurement of the net investment in the lease comprise the following payments for the right to use the underlying asset during the lease term that are not received at the commencement date:

a) fixed payments less any lease incentives payable;

b) variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;

c) any residual value guarantees provided to the lessor by the lessee, a party related to the lessee or a third party unrelated to the lessor that is financially capable of discharging the obligations under the guarantee;

d) the exercise price of a purchase option if the lessee is reasonably certain to exercise that option; and

e) payments of penalties for terminating the lease, if the lease term reflects the lessee exercising an option to terminate the lease.

3.14.18. Subsequent Measurement

3.14.18.1. A lessor shall recognize finance income over the lease term, based on a pattern reflecting a constant periodic rate of return on the lessor's net investment in the lease.

3.14.18.2. A lessor aims to allocate finance income over the lease term on a systematic and rational basis.

3.14.18.3. A lessor shall apply the lease payments relating to the period against the gross investment in the lease to reduce both the principal and the unearned finance income.

3.14.18.4. A lessor shall apply the de-recognition and impairment requirements in IPSAS 41 to the net investment in the lease.

3.14.18.5. A lessor shall review regularly estimated unguaranteed residual values used in computing the gross investment in the lease.

3.14.18.6. If there has been a reduction in the estimated unguaranteed residual value, the lessor shall revise the income allocation over the lease term and recognize immediately any reduction in respect of amounts accrued.

3.14.19. Lease Modifications

3.14.19.1. A lessor shall account for a modification to a finance lease as a separate lease if both:

a) the modification increases the scope of the lease by adding the right to use one or more underlying assets; and

b) the consideration for the lease increases by an amount commensurate with the stand-alone price for the increase in scope and any appropriate adjustments to that stand-alone price to reflect the circumstances of the particular contract.

3.14.19.2. For a modification to a finance lease that is not accounted for as a separate lease, a lessor shall account for the modification as follows:

a) if the lease would have been classified as an operating lease had the modification been in effect at the inception date, the lessor shall:

(i) account for the lease modification as a new lease from the effective date of the modification; and

(ii) measure the carrying amount of the underlying asset as the net investment in the lease immediately before the effective date of the lease modification.

b) Otherwise, the lessor shall apply the requirements of IPSAS 41.

 

3.14.20. Recognition and Measurement: Operating Lease

3.14.20.1. A lessor shall recognize lease payments from operating leases as income on either a straight-line basis or another systematic basis. The lessor shall apply another systematic basis if that basis is more representative of the pattern in which benefit from the use of the underlying asset is diminished.

3.14.20.2. A lessor shall recognize costs, including depreciation, incurred in earning the lease income as an expense.

3.14.20.3. A lessor shall add initial direct costs incurred in obtaining an operating lease to the carrying amount of the underlying asset and recognize those costs as an expense over the lease term on the same basis as the lease income.

3.14.20.4. The depreciation policy for depreciable underlying assets subject to operating leases shall be consistent with the lessor's normal depreciation policy for similar assets.

3.14.20.5. A lessor shall calculate depreciation in accordance with IPSAS 17 and IPSAS 31.

3.14.20.6. A lessor shall apply IAS 36 to determine whether an underlying asset subject to an operating lease is impaired and to account for any impairment loss identified.

3.14.21. Lease Modifications

3.14.21.1. A lessor shall account for a modification to an operating lease as a new lease from the effective date of the modification, considering any prepaid or accrued lease payments relating to the original lease as part of the lease payments for the new lease.

3.14.22. Presentation

3.14.22.1. A lessor shall present underlying assets subject to operating leases in its statement of financial position according to the nature of the underlying asset.

3.14.23. Disclosure

3.14.23.1. The objective of the disclosures is for lessors to disclose information in the notes that, together with the information provided in the statement of financial position, statement of performance and statement of cash flows, gives a basis for users of financial statements to assess the effect that leases have on the financial position, financial performance and cash flows of the lessor.

3.14.23.2. A lessor shall provide the disclosures in a tabular format, unless another format is more appropriate.

3.14.23.3. A lessor shall disclose additional qualitative and quantitative information about its leasing activities necessary to meet the disclosure objective.

3.14.24. Procedural Controls over Lease

3.14.24.1. The Finance and Administration head is responsible for reviewing lease of assets.

3.14.24.2. A Lease Information Form must be filled out by the requesting section together with all relevant supporting information for the proposed order, and returned to the Grant Finance and compliance section for the attention of the Head.

3.14.24.3. As with regular asset purchases, divisions will follow OSD's standard procedures for processing a purchase requisition, noting on the form that the asset is to be leased rather than purchased and will follow the system work-flow routing process based on the total level of spend including the routing of the work-flow to the Finance and Administration head for approval.

3.14.24.4. Once the asset has been delivered, installed or is working properly, the section will be required to make appropriate register. It is the section's responsibility to work with the supplier to ensure that the asset is delivered, installed, or in a proper working condition.

3.14.24.5. Upon successful notification from the division or factory, the Grant Finance and compliance head shall sign and return to the leasing OSD the Certificate of Acceptance at which time the lease shall officially begin. Under no circumstances should the Certificate of Acceptance be signed before the asset has been received, tested, and verified that it is in a satisfactory working condition.

3.14.24.6. Payment procedures for all leases will follow normal disbursement procedure. Lease invoices will be sent by the leasing OSD directly to the Grant Finance and compliance Manager section which will determine the appropriate method of payment.

3.15. SERVICE CONCESSION ARRANGEMENTS (IPSAS 32)

3.15.1. Definitions

3.15.1.1. A binding arrangement, for the purposes of this Standard, describes contracts and other arrangements that confer similar rights and obligations on the parties to it as if they were in the form of a contract.

3.15.1.2. A grantor, for the purposes of this Standard, is the OSD that grants the right to use the service concession asset to the operator.

3.15.1.3. An operator, for the purposes of this Standard, is the OSD that uses the service concession asset to provide public services subject to the grantor's control of the asset.

3.15.1.4. A service concession arrangement is a binding arrangement between a grantor and an operator in which:

a) The operator uses the service concession asset to provide a public service on behalf of the grantor for a specified period of time; and

b) The operator is compensated for its services over the period of the service concession arrangement.

3.15.1.5. A service concession asset is an asset used to provide public services in a service concession arrangement that:

a) Is provided by the operator which:

(i) The operator constructs, develops, or acquires from a third party; or

(ii) Is an existing asset of the operator; or

b) Is provided by the grantor which:

(i) Is an existing asset of the grantor; or

(ii) Is an upgrade to an existing asset of the grantor.

3.15.2. Recognition & Measurement of a Service Concession Asset

3.15.2.1. The grantor (OSD) shall recognize an asset provided by the operator and an upgrade to an existing asset of the grantor (OSD) as a service concession asset if:

 

a) The grantor (OSD) controls or regulates what services the operator must provide with the asset, to whom it must provide them, and at what price; and

 

b) The grantor (OSD) controls – through ownership, beneficial entitlement or otherwise – any significant residual interest in the asset at the end of the term of the arrangement.

 

3.15.2.2. The grantor shall initially measure the service concession asset recognized at its fair value.

 

3.15.2.3. After initial recognition or reclassification, service concession assets shall be accounted for in accordance with IPSAS 17 or IPSAS 31, as appropriate.

 

 

 

 

3.15.3. Recognition and Measurement of Liabilities

3.15.3.1. Where the grantor (OSD) recognizes a service concession asset, the grantor (OSD) shall also recognize a liability.

 

3.15.3.2. The liability recognized shall be initially measured at the same amount as the service concession asset measured, adjusted by the amount of any other consideration (e.g., cash) from the grantor (OSD) to the operator, or from the operator to the grantor (OSD).

 

3.15.3.3. Where the grantor (OSD) has an unconditional obligation to pay cash or another financial asset to the operator for the construction, development, acquisition, or upgrade of a service concession asset, the grantor (OSD) shall account for the liability recognized.

 

3.15.3.4. The grantor (OSD) shall allocate the payments to the operator and account for them according to their substance as a reduction in the liability, a finance charge, and charges for services provided by the operator.

 

3.15.3.5. Where the grantor (OSD) does not have an unconditional obligation to pay cash or another financial asset to the operator for the construction, development, acquisition, or upgrade of a service concession asset, and grants the operator the right to earn revenue from third-party users or another revenue-generating asset, the grantor (OSD) shall account for the liability recognized as the unearned portion of the revenue arising from the exchange of assets between the grantor (OSD) and the operator.

 

3.15.3.6. The grantor (OSD) shall recognize revenue and reduce the liability recognized according to the economic substance of the service concession arrangement.

 

3.15.4. Other Liabilities, Commitments, Contingent Liabilities and Contingent Assets & Other Revenues

3.15.4.1. The grantor (OSD) shall account for other liabilities, commitments, contingent liabilities, and contingent assets arising from a service concession arrangement in accordance with IPSAS 19 (Provisions, Contingent Liabilities and Contingent Assets), IPSAS 28, IPSAS 30, and IPSAS 41.

 

3.15.4.2. The grantor (OSD) shall account for revenues from a service concession arrangement, other than those specified in paragraphs 24-26, in accordance with IPSAS 9, Revenue from Exchange Transactions.

 

3.15.5. Presentation and Disclosure

3.15.5.1. The grantor (OSD) shall present information in accordance with IPSAS 1.

 

3.15.5.2. The grantor (OSD) shall disclose the following information in respect of service concession arrangements in each reporting period:

 

a) A description of the arrangement;

 

b) Significant terms of the arrangement that may affect the amount, timing, and certainty of future cash flows (e.g., the period of the concession, re-pricing dates, and the basis upon which re-pricing or re-negotiation is determined);

 

c) The nature and extent (e.g., quantity, time period, or amount, as appropriate) of:

 

(i) Rights to use specified assets;

 

(ii) Rights to expect the operator to provide specified services in relation to the service concession arrangement;

 

(iii) The carrying amount of service concession assets recognized at the end of the reporting period, including existing assets of the grantor reclassified as service concession assets;

 

(iv) Rights to receive specified assets at the end of the service concession arrangement;

 

(v) Renewal and termination options;

 

(vi) Other rights and obligations (e.g., major overhaul of service concession assets); and

(vii) Obligations to provide the operator with access to service concession assets or other revenue-generating assets, and

 

d) Changes in the arrangement occurring during the reporting period.

 

Part IV: Accounting Policy & Procedures for Presentation and Additional Disclosures

4. Presentation of Financial Statements and Additional Disclosures

2.1. Basics of General Purpose Financial Reporting (IPSAS Framework)

2.1.1. Objective of General Purpose Financial Reporting

2.1.1.1. The primary objective of most public sector entities is to deliver services to the public, rather than to make profits and generate a return on equity to investors. Consequently, the performance of such entities can be only partially evaluated by examination of financial position, financial performance and cash flows.

 

2.1.1.2. GPFRs provide information to users for accountability and decision-making purposes. Therefore, users of the GPFRs of public sector entities need information to support assessments of such matters as:

 

a) Whether OSD services constituents in an efficient and effective manner;

 

b) The resources currently available for future expenditures, and to what extent there are restrictions or conditions attached to their use;

 

c) To what extent the burden on future-year taxpayers of paying for current services has changed; and

 

d) Whether the OSD's ability to provide services has improved or deteriorated compared with the previous year.

 

2.1.1.3. General purpose financial statements can also have a predictive or prospective role, providing information useful in predicting the level of resources required for continued operations, the resources that may be generated by continued operations, and the associated risks and uncertainties.

 

2.1.1.4. Financial reporting may also provide users with information:

 

a) Indicating whether resources were obtained and used in accordance with the legally adopted budget; and

 

b) Indicating whether resources were obtained and used in accordance with legal and contractual requirements, including financial limits established by appropriate legislative authorities.

 

2.1.1.5. To meet these objectives, the financial statements provide information about an OSD's Assets, Liabilities, Net assets/equity, Revenue, Expenses, Other changes in net assets/equity, and Cash flows.

 

2.1.2. General Purpose Financial Reports

2.1.2.1. The Conceptual Framework acknowledges that, to respond to users' information needs, GPFRs may include information that enhances, complements, and supplements the financial statements. Therefore, the Conceptual Framework reflects a scope for financial reporting that is more comprehensive than that encompassed by financial statements.

 

2.1.3. Special Purpose Financial Reports

2.1.3.1. Standard setters often describe as "special purpose financial reports" those financial reports prepared to respond to the requirements of users that have the authority to require the preparation of financial reports that disclose the information they need for their particular purposes.

 

2.1.3.2. The IPSASB is aware that the requirements of IPSASs have been (and may continue to be) applied effectively and usefully in the preparation of some special purpose financial reports.

 

2.1.4. Users of General Purpose Financial Reports

2.1.4.1. Public sector entities raise resources from donors, lenders and other resource providers for use in the provision of services to recipients. These entities are accountable for their management and use of resources to those that provide them with resources, and to those that depend on them to use those resources to deliver necessary services. Those that provide the resources and receive, or expect to receive, the services also require information as input for decision-making purposes.

 

2.1.4.2. Consequently, GPFRs of public sector entities are developed primarily to respond to the information needs of service recipients and resource providers who do not possess the authority to require a public sector entity to disclose the information they need for accountability and decision-making purposes.

 

2.1.4.3. The legislature (or similar body) and members of parliament (or a similar representative body) are also primary users of GPFRs, and make extensive and ongoing use of GPFRs when acting in their capacity as representatives of the interests of service recipients and resource providers.

 

2.1.4.4. Therefore, for the purposes of the Conceptual Framework, the primary users of GPFRs are service recipients and their representatives and resource providers and their representatives (hereafter referred to as "service recipients and resource providers," unless identified otherwise).

 

2.1.4.5. GPFRs are prepared to respond to the information needs of service recipients and resource providers for accountability and decision-making purposes and may also provide information useful to other parties and for other purposes.

 

2.1.5. Information Needs of Service Recipients and Resource Providers

2.1.5.1. For accountability and decision-making purposes, service recipients and resource providers will need information that supports the assessments of such matters as:

 

a) The performance of the OSD during the reporting period, for example:

 

(i) Meeting its service delivery and other operating and financial objectives;

 

(ii) Managing the resources it is responsible for;

 

(iii) Complying with relevant budgetary, legislative, and other authority regulating the raising and use of resources.

 

b) The liquidity (for example, ability to meet current obligations) and solvency (for example, ability to meet obligations over the long term) of the OSD;

 

c) The sustainability of the OSD's service delivery and other operations over the long term, and changes therein as a result of the activities of the OSD during the reporting period including, for example:

 

(i) The capacity of the OSD to continue to fund its activities and to meet its operational objectives in the future (its financial capacity), including the likely sources of funding and the extent to which the OSD is dependent on, and therefore vulnerable to, funding or demand pressures outside its control; and

 

(ii) The physical and other resources currently available to support the provision of services in future periods (its operational capacity); and

 

d) The capacity of the OSD to adapt to changing circumstances, whether changes in demographics or changes in domestic or global economic conditions which are likely to impact the nature or composition of the activities it undertakes and the services it provides.

 

2.2. Qualitative Characteristics of Useful Financial Information

2.2.1. Qualitative characteristics

Qualitative characteristics are the attributes that make the information provided in financial statements useful to users.

 

The four principal qualitative characteristics are understandability, relevance, reliability and comparability.

 

2.2.1.1. Understandability – Information is understandable when users might reasonably be expected to comprehend its meaning. For this purpose, users are assumed to have a reasonable knowledge of the OSD's activities and the environment in which it operates, and to be willing to study the information. Information about complex matters should not be excluded from the financial statements merely on the grounds that it may be too difficult for certain users to understand.

 

2.2.1.2. Relevance – Information is relevant to users if it can be used to assist in evaluating past, present or future events or in confirming, or correcting, past evaluations. In order to be relevant, information must also be timely. The relevance of information is affected by its nature and materiality. Information is material if its omission or misstatement could influence the decisions of users or assessments made on the basis of the financial statements. Materiality depends on the nature or size of the item or error judged in the particular circumstances of its omission or misstatement. Thus, materiality provides a threshold or cut-off point rather than being a primary qualitative characteristic which information must have if it is to be useful.

 + 4

2.2.1.3. Reliability – Reliable information is free from material error and bias, and can be depended on by users to represent faithfully that which it purports to represent or could reasonably be expected to represent.

 

2.2.1.4. Comparability – Information in financial statements is comparable when users are able to identify similarities and differences between that information and information in other reports. Comparability applies to the:

 

a) Comparison of financial statements of different entities; and

 

b) Comparison of the financial statements of the same OSD over periods of time.

 

2.3. Presentation of Financial Statements (IPSAS 1)

2.3.1. Complete set of financial statements

2.3.1.1. A complete set of financial statements of OSD shall comprise:

 

a) a statement of financial position as at the end of the period;

 

b) a statement of financial performance;

 

c) a statement of changes in net asset/ equity;

 

d) a statement of cash flows;

 

e) When the OSD makes publicly available its approved budget, a comparison of budget and actual amounts either as a separate additional financial statement or as a budget column in the financial statements; and

 

f) Notes, comprising a summary of significant accounting policies and other explanatory notes.

 

2.3.2. Fair Presentation and Compliance with IPSASs

2.3.2.1. Financial statements shall present fairly the financial position, financial performance and cash flows of an OSD.

 

2.3.2.2. Fair presentation requires the faithful representation of the effects of transactions, other events and conditions in accordance with the definitions and recognition criteria for assets, liabilities, revenue and expenses set out in IPSASs.

 

2.3.2.3. The application of IPSASs, with additional disclosures when necessary, is presumed to result in financial statements that achieve a fair presentation. OSD's financial statements shall comply with IPSASs and OSD shall make an explicit and unreserved statement of such compliance in the notes.

 

2.3.2.4. Financial statements shall not be described as complying with IPSASs unless they comply with all the requirements of IPSASs.

 

2.3.3. Going Concern

 

2.3.3.1. When preparing financial statements, an assessment of an OSD's ability to continue as a going concern shall be made. This assessment shall be made by those responsible for the preparation of financial statements.

 

2.3.3.2. Financial statements shall be prepared on a going concern basis unless there is an intention to liquidate the OSD or to cease operating, or if there is no realistic alternative but to do so.

 

2.3.3.3. When those responsible for the preparation of the financial statements are aware, in making their assessment, of material uncertainties related to events or conditions that may cast significant doubt upon the OSD's ability to continue as a going concern, those uncertainties shall be disclosed.

 

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2.3.3.4. When financial statements are not prepared on a going concern basis, that fact shall be disclosed, together with the basis on which the financial statements are prepared and the reason why the OSD is not regarded as a going concern.

2.3.4. Consistency of Presentation

2.3.4.1. The presentation and classification of items in the financial statements of OSD shall be retained from one period to the next unless:

a) It is apparent, following a significant change in the nature of the OSD's operations or a review of its financial statements, that another presentation or classification would be more appropriate having regard to the criteria for the selection and application of accounting policies in IPSAS 3; or

b) An IPSAS requires a change in presentation.

2.3.5. Materiality and Aggregation

2.3.5.1. Each material class of similar items shall be presented separately in the financial statements. Items of a dissimilar nature or function shall be presented separately unless they are immaterial.

2.3.6. Offsetting

2.3.6.1. Assets and liabilities, and revenue and expenses, shall not be offset unless required or permitted by an IPSAS.

2.3.7. Accrual Basis of Accounting

2.3.7.1. OSD shall prepare its financial statements, except for cash flow information, using the accrual basis of accounting.

2.3.7.2. When the accrual basis of accounting is used, OSD recognizes items as assets, liabilities, equity, income and expenses (the elements of financial statements) when they satisfy the definitions and recognition criteria for those elements in the Framework.

2.3.8. Frequency of Reporting/Accounting Period

2.3.8.1. OSD shall present a complete set of financial statements (including comparative information) at least annually.

2.3.8.2. When OSD changes the end of its reporting period and presents financial statements for a period longer or shorter than one year, it shall disclose, in addition to the period covered by the financial statements:

a) the reason for using a longer or shorter period, and

b) the fact that amounts presented in the financial statements are not entirely comparable.

2.3.8.3. OSD shall present a complete set of financial statements (including comparative information) annually for the reporting period for the year ended June 30.

2.3.9. Comparative Information

2.3.9.1. Except when an IPSAS permits or requires otherwise, comparative information shall be disclosed in respect of the previous period for all amounts reported in the financial statements.

2.3.9.2. Comparative information shall be included for narrative and descriptive information when it is relevant to an understanding of the current period's financial statements.

2.3.9.3. When the presentation or classification of items in the financial statements is amended, comparative amounts shall be reclassified unless the reclassification is impracticable. When comparative amounts are reclassified, OSD shall disclose:

a) The nature of the reclassification;

b) The amount of each item or class of items that is reclassified; and

c) The reason for the reclassification.

2.3.9.4. When it is impracticable to reclassify comparative amounts, OSD shall disclose:

a) The reason for not reclassifying the amounts; and

b) The nature of the adjustments that would have been made if the amounts had been reclassified.

2.3.10. Identification of the Financial Statements

2.3.10.1. OSD shall clearly identify the financial statements and distinguish them from other information in the same published document.

2.3.10.2. OSD shall clearly identify each financial statement and the notes. In addition, OSD shall display the following information prominently, and repeat it when necessary for the information presented to be understandable:

a) the name of OSD or other means of identification, and any change in that information from the end of the preceding reporting period;

b) whether the financial statements are of OSD or a group of entities;

c) the date of the end of the reporting period or the period covered by the set of financial statements or notes;

d) the presentation currency, as defined in IPSAS 4; and

e) the level of rounding used in presenting amounts in the financial statements.

2.3.11. Statement of financial position

2.3.11.1. The statement of financial position shall include line items that present the following amounts:

a) property, plant and equipment;

b) investment property;

c) intangible assets;

d) financial assets (excluding amounts shown under (e), (h) and (i));

e) investments accounted for using the equity method;

f) inventories;

g) trade and other receivables;

h) cash and cash equivalents;

i) trade and other payables;

j) provisions;

k) financial liabilities (excluding amounts shown under (k) and (l));

l) liabilities and assets for current tax, as defined in IAS 12 Income Taxes;

m) deferred tax liabilities and deferred tax assets, as defined in IAS 12;

n) non-controlling interests, presented within equity; and

o) Issued capital and reserves attributable to owners of the parent.

2.3.11.2. OSD shall present additional line items, headings and subtotals in the statement of financial position when such presentation is relevant to an understanding of OSD's financial position.

2.3.11.3. When OSD presents current and non-current assets, and current and non-current liabilities, as separate classifications in its statement of financial position, it shall not classify deferred tax assets (liabilities) as current assets (liabilities).

2.3.12. Current/non-current distinction

2.3.12.1. OSD shall present current and non-current assets, and current and non-current liabilities, as separate classifications in its statement of financial position except when a presentation based on liquidity provides information that is reliable and more relevant. When that exception applies, OSD shall present all assets and liabilities in order of liquidity.

2.3.12.2. Whichever method of presentation is adopted, OSD shall disclose the amount expected to be recovered or settled after more than twelve months for each asset and liability line item that combines amounts expected to be recovered or settled:

a) no more than twelve months after the reporting period, and

b) more than twelve months after the reporting period.

2.3.13. Current assets

2.3.13.1. OSD shall classify an asset as current when:

a) it expects to realize the asset, or intends to sell or consume it, in its normal operating cycle;

b) it holds the asset primarily for the purpose of trading;

c) it expects to realize the asset within twelve months after the reporting period; or

d) the asset is cash or a cash equivalent (IAS 7) unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

OSD shall classify all other assets as non-current.

2.3.14. Current liabilities

2.3.14.1. OSD shall classify a liability as current when:

a) it expects to settle the liability in its normal operating cycle;

b) it holds the liability primarily for the purpose of trading;

c) the liability is due to be settled within twelve months after the reporting period; or

d) it does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting period. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

OSD shall classify all other liabilities as non-current.

2.3.15. Information to be presented either in the statement of financial position or in the notes

2.3.15.1. OSD shall disclose, either on the face of the statement of financial position or in the notes, further sub classifications of the line items presented, classified in a manner appropriate to the OSD's operations.

2.3.15.2. When OSD has no share capital, it shall disclose net assets/equity, either on the face of the statement of financial position or in the notes, showing separately:

a) Contributed capital, being the cumulative total at the reporting date of contributions from owners, less distributions to owners;

b) Accumulated surpluses or deficits;

c) Reserves, including a description of the nature and purpose of each reserve within net assets/equity.

2.3.16. Statement of Financial Performance

2.3.16.1. Surplus or Deficit for the Period – All items of revenue and expense recognized in a period shall be included in surplus or deficit unless an IPSAS requires otherwise.

2.3.17. Information to be Presented by OSD on the Face of the Statement of Financial Performance

2.3.17.1. As a minimum, the face of the statement of financial performance shall include line items that present the following amounts for the period:

a) Revenue;

b) Program cost;

c) Administration cost; and

d) Surplus or deficit.

2.3.17.2. Additional line items, headings and subtotals shall be presented on the face of the statement of financial performance when such presentation is relevant to an understanding of the OSD's financial performance.

2.3.18. Information to be Presented either on the Face of the Statement of Financial Performance or in the Notes

2.3.18.1. When items of revenue and expense are material, their nature and amount shall be disclosed separately.

2.3.18.2. OSD shall present, either on the face of the statement of financial performance or in the notes, a sub classification of total revenue, classified in a manner appropriate to the OSD's operations.

2.3.18.3. OSD shall present, either on the face of the statement of financial performance or in the notes, an analysis of expenses using a classification based on either the nature of expenses or their function within the OSD, whichever provides information that is reliable and more relevant.

2.3.18.4. If OSD classifies expenses by function, it shall disclose additional information on the nature of expenses, including depreciation and amortization expense and employee benefits expense.

2.3.19. Statement of Changes in Net Assets/Equity

2.3.19.1. OSD shall present a statement of changes in net assets/equity showing on the face of the statement:

a) Surplus or deficit for the period;

b) Each item of revenue and expense for the period that, as required by other Standards, is recognized directly in net assets/equity, and the total of these items;

c) Total revenue and expense for the period (calculated as the sum of (a) and (b)); and

d) For each component of net assets/equity separately disclosed, the effects of changes in accounting policies and corrections of errors recognized in accordance with IPSAS 3.

2.3.19.2. OSD shall also present, either on the face of the statement of changes in net assets/equity or in the notes:

a) The amounts of transactions with owners acting in their capacity as owners, showing separately distributions to owners;

b) The balance of accumulated surpluses or deficits at the beginning of the period and at the reporting date, and the changes during the period; and

c) To the extent that components of net assets/equity are separately disclosed, a reconciliation between the carrying amount of each component of net assets/equity at the beginning and the end of the period, separately disclosing each change.

2.3.20. Cash Flow Statement

2.3.20.1. Cash flow information provides users of financial statements with a basis to assess the ability of the OSD to generate cash and cash equivalents and the needs of the OSD to utilize those cash flows.

2.3.20.2. OSD shall apply the requirements for the presentation and disclosure of cash flow information as per IPSAS 1.

2.3.20.3. Cash flow information provides users of financial statements with a basis to assess the ability of OSD to generate cash and cash equivalents and the needs of OSD to utilize those cash flows.

2.3.21. Notes of Financial Statements

2.3.21.1. The notes shall:

a) present information about the basis of preparation of the financial statements and the specific accounting policies;

b) disclose the information required by IPSASs that is not presented elsewhere in the financial statements; and

c) provide information that is not presented elsewhere in the financial statements, but is relevant to an understanding of any of them.

2.3.21.2. OSD shall as far as practicable, present notes in a systematic manner. In determining a systematic manner, OSD shall consider the effect on the understandability and comparability of its financial statements.

2.3.21.3. OSD shall cross-reference each item in the statements of financial position and financial Performance, and in the Statement of Changes in Net Assets/Equity and of cash flows to any related information in the notes.

2.3.21.4. Examples of systematic ordering or grouping of the notes include:

a) giving prominence to the areas of its activities that OSD considers to be most relevant to an understanding of its financial performance and financial position, such as grouping together information about particular operating activities;

b) grouping together information about items measured similarly such as assets measured at fair value; or

c) following the order of the line items in the statement(s) of financial performance and other comprehensive income and the statement of financial position, such as:

(i) statement of compliance with IPSASs;

(ii) significant accounting policies applied;

(iii) supporting information for items presented in the statements of financial position and in the statement of financial Performance and in the Statement of Changes in Net Assets/Equity of cash flows, in the order in which each statement and each line item is presented; and

(iv) Other disclosures, including contingent liabilities (IPSAS 19) and unrecognized contractual commitments; and non-financial disclosures.

2.3.21.5. OSD may present notes providing information about the basis of preparation of the financial statements and specific accounting policies as a separate section of the financial statements.

2.3.22. Disclosure of accounting policies

2.3.22.1. OSD shall disclose its significant accounting policies comprising the measurement basis (or bases) used in preparing the financial statements and the other accounting policies used that are relevant to an understanding of the financial statements.

2.3.22.2. OSD shall disclose, along with its significant accounting policies or other notes, the judgments, apart from those involving estimations, that management has made in the process of applying OSD's accounting policies and that have the most significant effect on the amounts recognized in the financial statements.

2.3.23. Sources of estimation uncertainty

2.3.23.1. OSD shall disclose information about the assumptions it makes about the future, and other major sources of estimation uncertainty at the end of the reporting period, that have a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

2.3.23.2. In respect of those assets and liabilities, the notes shall include details of their nature, and their carrying amount as at the end of the reporting period.

2.3.24. Net Assets/Equity

2.3.24.1. OSD shall disclose information that enables users of its financial statements to evaluate OSD's objectives, policies and processes for managing net assets/equity.

2.3.24.2. OSD bases these disclosures on the information provided internally to key management personnel.

2.3.24.3. OSD shall disclose the following:

a) Qualitative information about its objectives, policies and processes for managing net assets/equity, including a description of what it manages as capital; when OSD is subject to externally imposed capital requirements, the nature of those requirements and how those requirements are incorporated into the management of capital; and how it is meeting its objectives for managing net assets/equity.

b) A summary of quantitative data about what it manages as net assets/equity.

c) Some entities regard some financial liabilities (e.g., some forms of subordinated debt) as part of capital. Other entities regard capital as excluding some components of equity (e.g., components arising from cash flow hedges).

d) any changes in (a) and (b) from the previous period.

2.3.25. Cash Flows Statement (IPSAS 2)

2.3.25.1. The cash flow statement of OSD should report cash flows during the period classified by operating, investing and financing activities.

2.3.25.2. OSD shall prepare a statement of cash flows in accordance with the requirements of this Standard and shall present it as an integral part of its financial statements for each period for which financial statements are presented.

2.3.25.3. Cash comprises cash on hand and demand deposits.

2.3.25.4. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

2.3.25.5. Cash flows are inflows and outflows of cash and cash equivalents.

2.3.25.6. The statement of cash flows shall report cash flows during the period classified by operating, investing and financing activities.

 

2.3.3.4. When financial statements are not prepared on a going concern basis, that fact shall be disclosed, together with the basis on which the financial statements are prepared and the reason why the OSD is not regarded as a going concern.

2.3.4. Consistency of Presentation

2.3.4.1. The presentation and classification of items in the financial statements of OSD shall be retained from one period to the next unless:

a) It is apparent, following a significant change in the nature of the OSD's operations or a review of its financial statements, that another presentation or classification would be more appropriate having regard to the criteria for the selection and application of accounting policies in IPSAS 3; or

b) An IPSAS requires a change in presentation.

2.3.5. Materiality and Aggregation

2.3.5.1. Each material class of similar items shall be presented separately in the financial statements. Items of a dissimilar nature or function shall be presented separately unless they are immaterial.

2.3.6. Offsetting

2.3.6.1. Assets and liabilities, and revenue and expenses, shall not be offset unless required or permitted by an IPSAS.

2.3.7. Accrual Basis of Accounting

2.3.7.1. OSD shall prepare its financial statements, except for cash flow information, using the accrual basis of accounting.

2.3.7.2. When the accrual basis of accounting is used, OSD recognizes items as assets, liabilities, equity, income and expenses (the elements of financial statements) when they satisfy the definitions and recognition criteria for those elements in the Framework.

2.3.8. Frequency of Reporting/Accounting Period

2.3.8.1. OSD shall present a complete set of financial statements (including comparative information) at least annually.

2.3.8.2. When OSD changes the end of its reporting period and presents financial statements for a period longer or shorter than one year, it shall disclose, in addition to the period covered by the financial statements:

a) the reason for using a longer or shorter period, and

b) the fact that amounts presented in the financial statements are not entirely comparable.

2.3.8.3. OSD shall present a complete set of financial statements (including comparative information) annually for the reporting period for the year ended June 30.

2.3.9. Comparative Information

2.3.9.1. Except when an IPSAS permits or requires otherwise, comparative information shall be disclosed in respect of the previous period for all amounts reported in the financial statements.

2.3.9.2. Comparative information shall be included for narrative and descriptive information when it is relevant to an understanding of the current period's financial statements.

2.3.9.3. When the presentation or classification of items in the financial statements is amended, comparative amounts shall be reclassified unless the reclassification is impracticable. When comparative amounts are reclassified, OSD shall disclose:

a) The nature of the reclassification;

b) The amount of each item or class of items that is reclassified; and

c) The reason for the reclassification.

2.3.9.4. When it is impracticable to reclassify comparative amounts, OSD shall disclose:

a) The reason for not reclassifying the amounts; and

b) The nature of the adjustments that would have been made if the amounts had been reclassified.

2.3.10. Identification of the Financial Statements

2.3.10.1. OSD shall clearly identify the financial statements and distinguish them from other information in the same published document.

2.3.10.2. OSD shall clearly identify each financial statement and the notes. In addition, OSD shall display the following information prominently, and repeat it when necessary for the information presented to be understandable:

a) the name of OSD or other means of identification, and any change in that information from the end of the preceding reporting period;

b) whether the financial statements are of OSD or a group of entities;

c) the date of the end of the reporting period or the period covered by the set of financial statements or notes;

d) the presentation currency, as defined in IPSAS 4; and

e) the level of rounding used in presenting amounts in the financial statements.

2.3.11. Statement of financial position

2.3.11.1. The statement of financial position shall include line items that present the following amounts:

a) property, plant and equipment;

b) investment property;

c) intangible assets;

d) financial assets (excluding amounts shown under (e), (h) and (i));

e) investments accounted for using the equity method;

f) inventories;

g) trade and other receivables;

h) cash and cash equivalents;

i) trade and other payables;

j) provisions;

k) financial liabilities (excluding amounts shown under (k) and (l));

l) liabilities and assets for current tax, as defined in IAS 12 Income Taxes;

m) deferred tax liabilities and deferred tax assets, as defined in IAS 12;

n) non-controlling interests, presented within equity; and

o) Issued capital and reserves attributable to owners of the parent.

2.3.11.2. OSD shall present additional line items, headings and subtotals in the statement of financial position when such presentation is relevant to an understanding of OSD's financial position.

2.3.11.3. When OSD presents current and non-current assets, and current and non-current liabilities, as separate classifications in its statement of financial position, it shall not classify deferred tax assets (liabilities) as current assets (liabilities).

2.3.12. Current/non-current distinction

2.3.12.1. OSD shall present current and non-current assets, and current and non-current liabilities, as separate classifications in its statement of financial position except when a presentation based on liquidity provides information that is reliable and more relevant. When that exception applies, OSD shall present all assets and liabilities in order of liquidity.

2.3.12.2. Whichever method of presentation is adopted, OSD shall disclose the amount expected to be recovered or settled after more than twelve months for each asset and liability line item that combines amounts expected to be recovered or settled:

a) no more than twelve months after the reporting period, and

b) more than twelve months after the reporting period.

2.3.13. Current assets

2.3.13.1. OSD shall classify an asset as current when:

a) it expects to realize the asset, or intends to sell or consume it, in its normal operating cycle;

b) it holds the asset primarily for the purpose of trading;

c) it expects to realize the asset within twelve months after the reporting period; or

d) the asset is cash or a cash equivalent (IAS 7) unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

OSD shall classify all other assets as non-current.

2.3.14. Current liabilities

2.3.14.1. OSD shall classify a liability as current when:

a) it expects to settle the liability in its normal operating cycle;

b) it holds the liability primarily for the purpose of trading;

c) the liability is due to be settled within twelve months after the reporting period; or

d) it does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting period. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

OSD shall classify all other liabilities as non-current.

2.3.15. Information to be presented either in the statement of financial position or in the notes

2.3.15.1. OSD shall disclose, either on the face of the statement of financial position or in the notes, further sub classifications of the line items presented, classified in a manner appropriate to the OSD's operations.

2.3.15.2. When OSD has no share capital, it shall disclose net assets/equity, either on the face of the statement of financial position or in the notes, showing separately:

a) Contributed capital, being the cumulative total at the reporting date of contributions from owners, less distributions to owners;

b) Accumulated surpluses or deficits;

c) Reserves, including a description of the nature and purpose of each reserve within net assets/equity.

2.3.16. Statement of Financial Performance

2.3.16.1. Surplus or Deficit for the Period – All items of revenue and expense recognized in a period shall be included in surplus or deficit unless an IPSAS requires otherwise.

2.3.17. Information to be Presented by OSD on the Face of the Statement of Financial Performance

2.3.17.1. As a minimum, the face of the statement of financial performance shall include line items that present the following amounts for the period:

a) Revenue;

b) Program cost;

c) Administration cost; and

d) Surplus or deficit.

2.3.17.2. Additional line items, headings and subtotals shall be presented on the face of the statement of financial performance when such presentation is relevant to an understanding of the OSD's financial performance.

 

2.3.18. Information to be Presented either on the Face of the Statement of Financial Performance or in the Notes

2.3.18.1. When items of revenue and expense are material, their nature and amount shall be disclosed separately.

2.3.18.2. OSD shall present, either on the face of the statement of financial performance or in the notes, a sub classification of total revenue, classified in a manner appropriate to the OSD's operations.

2.3.18.3. OSD shall present, either on the face of the statement of financial performance or in the notes, an analysis of expenses using a classification based on either the nature of expenses or their function within the OSD, whichever provides information that is reliable and more relevant.

2.3.18.4. If OSD classifies expenses by function, it shall disclose additional information on the nature of expenses, including depreciation and amortization expense and employee benefits expense.

 

2.3.19. Statement of Changes in Net Assets/Equity

2.3.19.1. OSD shall present a statement of changes in net assets/equity showing on the face of the statement:

a) Surplus or deficit for the period;

b) Each item of revenue and expense for the period that, as required by other Standards, is recognized directly in net assets/equity, and the total of these items;

c) Total revenue and expense for the period (calculated as the sum of (a) and (b)); and

d) For each component of net assets/equity separately disclosed, the effects of changes in accounting policies and corrections of errors recognized in accordance with IPSAS 3.

2.3.19.2. OSD shall also present, either on the face of the statement of changes in net assets/equity or in the notes:

a) The amounts of transactions with owners acting in their capacity as owners, showing separately distributions to owners;

b) The balance of accumulated surpluses or deficits at the beginning of the period and at the reporting date, and the changes during the period; and

c) To the extent that components of net assets/equity are separately disclosed, a reconciliation between the carrying amount of each component of net assets/equity at the beginning and the end of the period, separately disclosing each change.

2.3.20. Cash Flow Statement

2.3.20.1. Cash flow information provides users of financial statements with a basis to assess the ability of the OSD to generate cash and cash equivalents and the needs of the OSD to utilize those cash flows.

2.3.20.2. OSD shall apply the requirements for the presentation and disclosure of cash flow information as per IPSAS 1.

2.3.20.3. Cash flow information provides users of financial statements with a basis to assess the ability of OSD to generate cash and cash equivalents and the needs of OSD to utilize those cash flows.

2.3.21. Notes of Financial Statements

2.3.21.1. The notes shall:

a) present information about the basis of preparation of the financial statements and the specific accounting policies;

b) disclose the information required by IPSASs that is not presented elsewhere in the financial statements; and

c) provide information that is not presented elsewhere in the financial statements, but is relevant to an understanding of any of them.

2.3.21.2. OSD shall as far as practicable, present notes in a systematic manner. In determining a systematic manner, OSD shall consider the effect on the understandability and comparability of its financial statements.

2.3.21.3. OSD shall cross-reference each item in the statements of financial position and financial Performance, and in the Statement of Changes in Net Assets/Equity and of cash flows to any related information in the notes.

2.3.21.4. Examples of systematic ordering or grouping of the notes include:

a) giving prominence to the areas of its activities that OSD considers to be most relevant to an understanding of its financial performance and financial position, such as grouping together information about particular operating activities;

b) grouping together information about items measured similarly such as assets measured at fair value; or

c) following the order of the line items in the statement(s) of financial performance and other comprehensive income and the statement of financial position, such as:

(i) statement of compliance with IPSASs;

(ii) significant accounting policies applied;

(iii) supporting information for items presented in the statements of financial position and in the statement of financial Performance and in the Statement of Changes in Net Assets/Equity of cash flows, in the order in which each statement and each line item is presented; and

(iv) Other disclosures, including contingent liabilities (IPSAS 19) and unrecognized contractual commitments; and non-financial disclosures.

2.3.21.5. OSD may present notes providing information about the basis of preparation of the financial statements and specific accounting policies as a separate section of the financial statements.

2.3.22. Disclosure of accounting policies

2.3.22.1. OSD shall disclose its significant accounting policies comprising the measurement basis (or bases) used in preparing the financial statements and the other accounting policies used that are relevant to an understanding of the financial statements.

2.3.22.2. OSD shall disclose, along with its significant accounting policies or other notes, the judgments, apart from those involving estimations, that management has made in the process of applying OSD's accounting policies and that have the most significant effect on the amounts recognized in the financial statements.

2.3.23. Sources of estimation uncertainty

2.3.23.1. OSD shall disclose information about the assumptions it makes about the future, and other major sources of estimation uncertainty at the end of the reporting period, that have a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

2.3.23.2. In respect of those assets and liabilities, the notes shall include details of their nature, and their carrying amount as at the end of the reporting period.

2.3.24. Net Assets/Equity

2.3.24.1. OSD shall disclose information that enables users of its financial statements to evaluate OSD's objectives, policies and processes for managing net assets/equity.

2.3.24.2. OSD bases these disclosures on the information provided internally to key management personnel.

2.3.24.3. OSD shall disclose the following:

a) Qualitative information about its objectives, policies and processes for managing net assets/equity, including a description of what it manages as capital; when OSD is subject to externally imposed capital requirements, the nature of those requirements and how those requirements are incorporated into the management of capital; and how it is meeting its objectives for managing net assets/equity.

b) A summary of quantitative data about what it manages as net assets/equity.

c) Some entities regard some financial liabilities (e.g., some forms of subordinated debt) as part of capital. Other entities regard capital as excluding some components of equity (e.g., components arising from cash flow hedges).

d) any changes in (a) and (b) from the previous period.

2.3.25. Cash Flows Statement (IPSAS 2)

2.3.25.1. The cash flow statement of OSD should report cash flows during the period classified by operating, investing and financing activities.

2.3.25.2. OSD shall prepare a statement of cash flows in accordance with the requirements of this Standard and shall present it as an integral part of its financial statements for each period for which financial statements are presented.

2.3.25.3. Cash comprises cash on hand and demand deposits.

2.3.25.4. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

2.3.25.5. Cash flows are inflows and outflows of cash and cash equivalents.

2.3.25.6. The statement of cash flows shall report cash flows during the period classified by operating, investing and financing activities.

2.3.26. Operating activities

2.3.26.1. The amount of net cash flows arising from operating activities is a key indicator of the extent to which the operations of the OSD are funded from the recipients of goods and services provided by the OSD.

2.3.26.2. The amount of the net cash flows also assists in showing the ability of OSD to maintain its operating capability, repay obligations, pay a dividend or similar distribution to its owner and make new investments without recourse to external sources of financing. The consolidated whole-of-government operating cash flows provide an indication of the extent to which a government has financed its current activities through taxation and charges. Information about the specific components of historical operating cash flows is useful, in conjunction with other information, in forecasting future operating cash flows.

2.3.26.3. Cash flows from operating activities are primarily derived from the principal cash-generating activities of OSD.

2.3.26.4. Examples of cash flows from operating activities are:

a) Cash receipts from taxes, levies and fines;

b) Cash receipts from charges for goods and services provided by the OSD;

c) Cash receipts from grants or transfers and other appropriations or other budget authority made by central government or other public sector entities;

d) Cash receipts from royalties, fees, commissions and other revenue;

e) Cash payments to other public sector entities to finance their operations (not including loans);

f) Cash payments to suppliers for goods and services;

g) Cash payments to and on behalf of employees;

h) Cash receipts and cash payments of an insurance entity for premiums and claims, annuities and other policy benefits;

i) Cash payments of local property taxes or income taxes (where appropriate) in relation to operating activities;

j) Cash receipts and payments from contracts held for dealing or trading purposes;

k) Cash receipts or payments from discontinuing operations; and

l) Cash receipts or payments in relation to litigation settlements.

2.3.27. Investing Activities

2.3.27.1. The separate disclosure of cash flows arising from investing activities is important because the cash flows represent the extent to which cash outflows have been made for resources which are intended to contribute to OSD's future service delivery. Examples of cash flows arising from investing activities are:

a) Cash payments to acquire property, plant and equipment, intangibles and other long-term assets. These payments include those relating to capitalized development costs and self-constructed property, plant and equipment;

b) Cash receipts from sales of property, plant and equipment, intangibles and other long-term assets;

c) Cash payments to acquire equity or debt instruments of other entities and interests in joint ventures (other than payments for those instruments considered to be cash equivalents or those held for dealing or trading purposes);

d) Cash receipts from sales of equity or debt instruments of other entities and interests in joint ventures (other than receipts for those instruments considered to be cash equivalents and those held for dealing or trading purposes);

e) Cash advances and loans made to other parties (other than advances and loans made by a public financial institution);

f) Cash receipts from the repayment of advances and loans made to other parties (other than advances and loans of a public financial institution);

g) Cash payments for futures contracts, forward contracts, option contracts and swap contracts except when the contracts are held for dealing or trading purposes, or the payments are classified as financing activities; and

h) Cash receipts from futures contracts, forward contracts, option contracts and swap contracts except when the contracts are held for dealing or trading purposes, or the receipts are classified as financing activities.

2.3.28. Financing Activities

2.3.28.1. The separate disclosure of cash flows arising from financing activities is important because it is useful in predicting claims on future cash flows by providers of capital to the OSD. Examples of cash flows arising from financing activities are:

a) Cash proceeds from issuing debentures, loans, notes, bonds, mortgages and other short or long-term borrowings;

b) Cash repayments of amounts borrowed; and liability relating to a finance lease.

2.3.29. Reporting Cash Flows from Operating Activities

2.3.29.1. OSD should report cash flows from operating activities using either:

a) The direct method, whereby major classes of gross cash receipts and gross cash payments are disclosed; or

b) The indirect method, whereby net surplus or deficit is adjusted for the effects of transactions of a noncash nature, any deferrals or accruals of past or future operating cash receipts or payments, and items of revenue or expense associated with investing or financing cash flows.

2.3.30. Reporting Cash Flows from Investing and Financing Activities

2.3.30.1. OSD should report separately major classes of gross cash receipts and gross cash payments arising from investing and financing activities.

2.3.30.2. Cash flows arising from the following operating, investing or financing activities may be reported on a net basis:

a) Cash receipts collected and payments made on behalf of customers, taxpayers or beneficiaries when the cash flows reflect the activities of the other party rather than those of the OSD; and

b) Cash receipts and payments for items in which the turnover is quick, the amounts are large, and the maturities are short.

2.3.31. Foreign Currency Cash Flows

2.3.31.1. Cash flows arising from transactions in a foreign currency shall be recorded in an OSD's functional currency by applying to the foreign currency amount the exchange rate between the functional currency and the foreign currency at the date of the cash flow.

2.3.31.2. The cash flows of a foreign controlled OSD shall be translated at the exchange rates between the functional currency and the foreign currency at the dates of the cash flows.

2.3.32. Components of cash and cash equivalents

2.3.32.1. OSD shall disclose the components of cash and cash equivalents and shall present a reconciliation of the amounts in its statement of cash flows with the equivalent items reported in the statement of financial position.

2.3.32.2. In view of the variety of cash management practices and banking arrangements around the world and in order to comply with IPSAS 1 Presentation of Financial Statements, OSD shall disclose the policy which it adopts in determining the composition of cash and cash equivalents.

2.3.33. Other disclosures

2.3.33.1. OSD shall disclose, together with a commentary by management, the amount of significant cash and cash equivalent balances held by OSD that are not available for use by the group.

2.4. ACCOUNTING POLICIES, CHANGES IN ACCOUNTING ESTIMATES AND ERRORS (IPSAS 3)

2.4.1. Definitions

2.4.1.1. Accounting policies are the specific principles, bases, conventions, rules and practices applied by OSD in preparing and presenting financial statements.

2.4.1.2. A change in accounting estimate is an adjustment of the carrying amount of an asset or a liability, or the amount of the periodic consumption of an asset, that results from the assessment of the present status of, and expected future benefits and obligations associated with, assets and liabilities. Changes in accounting estimates result from new information or new developments and, accordingly, are not corrections of errors.

2.4.1.3. Prior period errors are omissions from, and misstatements in, OSD's financial statements for one or more prior periods arising from a failure to use, or misuse of, reliable information that was available when financial statements for those periods were authorized for issue and could reasonably be expected to have been obtained and taken into account in the preparation and presentation of those financial statements. Such errors include the effects of mathematical mistakes, mistakes in applying accounting policies, oversights or misinterpretations of facts, and fraud.

2.4.1.4. Retrospective application is applying a new accounting policy to transactions, other events and conditions as if that policy had always been applied.

2.4.1.5. Retrospective restatement is correcting the recognition, measurement and disclosure of amounts of elements of financial statements as if a prior period error had never occurred.

2.4.1.6. Prospective application of a change in accounting policy and of recognizing the effect of a change in an accounting estimate, respectively, are applying the new accounting policy to transactions, other events and conditions occurring after the date as at which the policy is changed; and recognizing the effect of the change in the accounting estimate in the current and future periods affected by the change.

2.4.2. Selection and application of accounting policies

2.4.2.1. When an IPSAS specifically applies to a transaction, other event or condition, the accounting policy or policies applied to that item shall be determined by applying the IPSAS.

2.4.2.2. In the absence of an IPSAS that specifically applies to a transaction, other event or condition, management of OSD shall use its judgment in developing and applying an accounting policy that results in information that is relevant and reliable.

2.4.2.3. In making the judgment, the management of OSD shall refer to and consider the applicability of the following sources in descending order:

a) the requirements in IPSASs dealing with similar and related issues; and

b) the definitions, recognition criteria and measurement concepts for assets, liabilities, income and expenses in the Framework.

2.4.2.4. In making the judgment above, management may also consider the most recent pronouncements of other standard-setting bodies that use a similar conceptual framework to develop accounting standards, other accounting literature and accepted industry practices, to the extent that these do not conflict with IPSAS.

2.4.3. Consistency of accounting policies

2.4.3.1. OSD shall select and apply its accounting policies consistently for similar transactions, other events and conditions, unless an IPSAS specifically requires or permits categorization of items for which different policies may be appropriate.

2.4.3.2. If an IPSAS requires or permits such categorization, an appropriate accounting policy shall be selected and applied consistently to each category.

2.4.4. Changes in accounting policies

2.4.4.1. OSD shall change an accounting policy only if the change:

a) is required by an IPSAS; or

b) results in the financial statements providing reliable and more relevant information about the effects of transactions, other events or conditions on OSD's financial position, financial performance or cash flows.

2.4.4.2. The following are not changes in accounting policies:

a) the application of an accounting policy for transactions, other events or conditions that differ in substance from those previously occurring; and

b) the application of a new accounting policy for transactions, other events or conditions that did not occur previously or were immaterial.

2.4.4.3. The initial application of a policy to revalue assets in accordance with IPSAS 17 Property, Plant and Equipment or IPSAS 31 Intangible Assets is a change in an accounting policy to be dealt with as a revaluation in accordance with IPSAS 17 or IPSAS 31, rather than in accordance with this Standard.

2.4.5. Applying changes in accounting policies

2.4.5.1. OSD shall account for a change in accounting policy resulting from the initial application of an IPSAS in accordance with the specific transitional provisions, if any, in that IPSAS.

2.4.5.2. When OSD changes an accounting policy upon initial application of an IPSAS that does not include specific transitional provisions applying to that change, or changes an accounting policy voluntarily, it shall apply the change retrospectively.

2.4.5.3. When a change in accounting policy is applied retrospectively, OSD shall adjust the opening balance of each affected component of equity for the earliest prior period presented and the other comparative amounts disclosed for each prior period presented as if the new accounting policy had always been applied.

2.4.5.4. When retrospective application is required, a change in accounting policy shall be applied retrospectively except to the extent that it is impracticable to determine either the period-specific effects or the cumulative effect of the change.

2.4.5.5. When it is impracticable to determine the cumulative effect, at the beginning of the current period, of applying a new accounting policy to all prior periods, OSD shall adjust the comparative information to apply the new accounting policy prospectively from the earliest date practicable.

2.4.6. Disclosure of Changes in accounting policies

2.4.6.1. When initial application of an IPSAS has an effect on the current period or any prior period, would have such an effect except that it is impracticable to determine the amount of the adjustment, or might have an effect on future periods, OSD shall disclose in the current period but need not repeat in subsequent periods:

a) the title of the IPSAS;

b) when applicable, that the change in accounting policy is made in accordance with its transitional provisions;

c) the nature of the change in accounting policy;

d) when applicable, a description of the transitional provisions;

e) when applicable, the transitional provisions that might have an effect on future periods;

f) for the current period and each prior period presented, to the extent practicable, the amount of the adjustment for each financial statement line item affected;

g) the amount of the adjustment relating to periods before those presented, to the extent practicable; and

h) if retrospective application required is impracticable for a particular prior period, or for periods before those presented, the circumstances that led to the existence of that condition and a description of how and from when the change in accounting policy has been applied.

2.4.6.2. When a voluntary change in accounting policy has an effect on the current period or any prior period, would have an effect on that period except that it is impracticable to determine the amount of the adjustment, or might have an effect on future periods, OSD shall disclose in the current period but need not repeat in subsequent periods:

a) the nature of the change in accounting policy;

b) the reasons why applying the new accounting policy provides reliable and more relevant information;

c) for the current period and each prior period presented, to the extent practicable, the amount of the adjustment for each financial statement line item affected;

d) the amount of the adjustment relating to periods before those presented, to the extent practicable; and

e) if retrospective application is impracticable for a particular prior period, or for periods before those presented, the circumstances that led to the existence of that condition and a description of how and from when the change in accounting policy has been applied.

2.4.6.3. When OSD has not applied a new IPSAS that has been issued but is not yet effective, OSD shall disclose this fact and known or reasonably estimable information relevant to assessing the possible impact that application of the new IPSAS will have on OSD's financial statements in the period of initial application.

2.4.7. Changes in accounting estimates

2.4.7.1. As a result of the uncertainties inherent in business activities, many items in financial statements cannot be measured with precision but can only be estimated.

2.4.7.2. Estimation involves judgments based on the latest available, reliable information and may be required of:

a) bad debts;

b) inventory obsolescence;

c) the fair value of financial assets or financial liabilities;

d) the useful lives of, or expected pattern of consumption of the future economic benefits embodied in, depreciable assets; and

e) warranty obligations.

2.4.7.3. The effect of a change in an accounting estimate shall be recognized prospectively by including it in surplus or deficit in:

a) the period of the change, if the change affects that period only; or

b) the period of the change and future periods, if the change affects both.

2.4.7.4. To the extent that a change in an accounting estimate gives rise to changes in assets and liabilities, or relates to an item of equity, it shall be recognized by adjusting the carrying amount of the related asset, liability or equity item in the period of the change.

2.4.8. Disclosure of changes in accounting estimates

2.4.8.1. OSD shall disclose the nature and amount of a change in an accounting estimate that has an effect in the current period or is expected to have an effect in future periods, except for the disclosure of the effect on future periods when it is impracticable to estimate that effect.

2.4.8.2. If the amount of the effect in future periods is not disclosed because estimating it is impracticable, OSD shall disclose that fact.

2.4.9. Errors

2.4.9.1. Errors can arise in respect of the recognition, measurement, presentation or disclosure of elements of financial statements.

2.4.9.2. Financial statements do not comply with IPSAS if they contain either material errors or immaterial errors made intentionally to achieve a particular presentation of OSD's financial position, financial performance or cash flows. Potential current period errors discovered in that period shall be corrected before the financial statements are authorized for issue.

2.4.9.3. Material errors are sometimes not discovered until a subsequent period, and these prior period errors shall be corrected in the comparative information presented in the financial statements for that subsequent period.

2.4.9.4. OSD shall correct material prior period errors retrospectively in the first set of financial statements authorized for issue after their discovery by:

a) restating the comparative amounts for the prior period(s) presented in which the error occurred; or

b) if the error occurred before the earliest prior period presented, restating the opening balances of assets, liabilities and equity for the earliest prior period presented.

 

2.4.9.5. When it is impracticable to determine the cumulative effect, at the beginning of the current period, of an error on all prior periods, OSD shall restate the comparative information to correct the error prospectively from the earliest date practicable.

2.4.10. Disclosure of prior period errors

2.4.10.1. OSD shall disclose the following but need not repeat in subsequent periods:

a) the nature of the prior period error;

b) for each prior period presented, to the extent practicable, the amount of the correction for each financial statement line item affected; and if IAS 33 applies to OSD, for basic and diluted earnings per share;

c) the amount of the correction at the beginning of the earliest prior period presented; and

d) if retrospective restatement is impracticable for a particular prior period, the circumstances that led to the existence of that condition and a description of how and from when the error has been corrected.

2.5. EVENTS AFTER REPORTING PERIOD (IPSAS 14)

2.5.1. Definitions

2.5.1.1. Events after the reporting period are those events, favorable and unfavorable, that occur between the end of the reporting period and the date when the financial statements are authorized for issue.

2.5.1.2. There are two types of events:

a) Adjusting events are those that provide evidence of conditions that existed at the end of the reporting period; and

b) Non-adjusting events are those that are indicative of conditions that arose after the reporting period.

The process involved in authorizing the financial statements for issue will vary depending upon the management structure, statutory requirements and procedures followed in preparing and finalizing the financial statements.

2.5.1.3. If OSD is required to submit its financial statements to its shareholders for approval after the financial statements have been issued, the financial statements shall be authorized for issue on the date of issue not the date when shareholders approve the financial statements.

2.5.1.4. If the management of OSD is required to issue its financial statements to a supervisory board (made up solely of non-executives) for approval, the financial statements shall be authorized for issue when the management authorizes them for issue to the supervisory board.

2.5.2. Adjusting events after the reporting period

2.5.2.1. OSD shall adjust the amounts recognized in its financial statements to reflect adjusting events after the reporting period.

2.5.2.2. OSD is required to account for the adjusting events by adjusting their potential financial impacts in financial statements before these are finalized and issued.

2.5.2.3. Adjusting events for which OSD is required to adjust its financial statements before issuance include:

a) The settlement after the reporting period of a court case that confirms that OSD had a present obligation at the end of the reporting period (IPSAS 19 Provisions, Contingent Liabilities and Contingent Assets);

b) The bankruptcy of a customer that occurs after the reporting period usually confirms that the customer was credit-impaired at the end of the reporting period;

c) The sale of inventories after the reporting period may give evidence about their net realizable value at the end of the reporting period;

d) The determination after the reporting period of the cost of assets purchased, or the proceeds from assets sold, before the end of the reporting period;

e) The determination after the reporting period of the amount of profit-sharing or bonus payments, if OSD had a present legal or constructive obligation at the end of the reporting period to make such payments as a result of events before that date (IPSAS 39 Employee Benefits);

f) The discovery of fraud or errors that show that the financial statements are incorrect.

2.5.3. Non-adjusting events after the reporting period

2.5.3.1. OSD shall not adjust but disclose the amounts recognized in its financial statements to reflect non-adjusting events after the reporting period.

2.5.3.2. The following are examples of non-adjusting events after the reporting period that would generally result in disclosure:

a) Major business combination after the reporting period (IFRS 3 Business Combinations requires specific disclosures in such cases) or disposing of a major subsidiary;

b) Announcing a plan to discontinue an operation;

c) The destruction of a major production plant by a fire after the reporting period;

d) Announcing, or commencing the implementation of, a major restructuring (IPSAS 19 Provisions, Contingent Liabilities and Contingent Assets);

e) Abnormally large changes after the reporting period in asset prices or foreign exchange rates;

f) Entering into significant commitments or contingent liabilities, for example, by issuing significant guarantees; and

g) Commencing major litigation arising solely out of events that occurred after the reporting period.

2.5.4. Disclosure of events after the reporting period

2.5.4.1. Date of authorizations for issue – OSD shall disclose the date when the financial statements were authorized for issue and who gave that authorization. If OSD management or board or others have the power to amend the financial statements after issue, OSD shall disclose that fact.

2.5.4.2. Updating disclosure about conditions at the end of the reporting period – If OSD receives information after the reporting period about conditions that existed at the end of the reporting period, it shall update disclosures that relate to those conditions, in the light of the new information.

2.5.4.3. Non-adjusting events after the reporting period – OSD shall disclose the nature of the event and an estimate of its financial effect for each material category of non-adjusting event after the reporting period.

2.6. RELATED PARTY DISCLOSURES (IPSAS 20)

2.6.1. Definition

2.6.1.1. A related party is a person or an entity that is related to the OSD that is preparing its financial statements.

2.6.1.2. A related party transaction is a transfer of resources, services or obligations between a reporting OSD and a related party, regardless of whether a price is charged.

2.6.1.3. Parties are related if:

a) directly, or indirectly through one or more intermediaries:

(i) controls, is controlled by, or is under common control with;

(ii) has an interest in the OSD that gives it significant influence over the entity; or

(iii) has joint control over the OSD;

b) the party is an associate of the OSD;

c) the party is a joint venture in which the OSD is a venture;

d) a person or a close member of that person's family is related to a reporting OSD if that person:

(i) has control or joint control of the reporting OSD;

(ii) has significant influence over the reporting OSD; or

(iii) is a member of the Key Management Personnel of the reporting OSD or of a parent of the reporting OSD.

e) the party is a post-employment benefit plan for the benefit of employees of the OSD, or of any entity that is a related party of the OSD.

2.6.1.4. Close members of the family of a person are those family members who may be expected to influence, or be influenced by, that person in their dealings with the OSD and include:

a) that person's children and spouse or domestic partner;

b) children of that person's spouse or domestic partner; and

c) dependents of that person or that person's spouse or domestic partner.

2.6.2. Related Party Transactions

2.6.2.1. Some of the related party transactions that are to be disclosed include:

a) Purchases or sales of goods;

b) Purchases or sales of property and other assets;

c) Rendering or receiving of services;

d) Leases;

e) Transfer of research and development;

f) Transfers under license agreements;

g) Provision of finance (including loans and equity contribution);

h) Provision of guarantees and collateral security;

i) Settlement of liabilities on behalf of the OSD or by the OSD on behalf of another party.

2.6.3. Potential Related Party Indicators

2.6.3.1. Some of the potential related party transactions include:

a) Arrangements whereby one party agrees to pay expenses on behalf of another;

b) Circular arrangements between parties;

c) Engaging in business deals (e.g., leases) at more or less than market value;

d) Payments for services at inflated prices;

e) Sale of land with arranged financing;

f) Sale of securities;

g) Unusual transactions close to end of reporting period.

2.6.4. Disclosure Requirements

2.6.4.1. OSD shall present and disclose information that enables users of the financial statements to evaluate the financial effects of related parties, balances and transactions.

2.6.4.2. Where related party transactions have occurred, disclose:

a) Nature of relationships,

b) Amounts of transactions,

c) Amount of outstanding balances, including terms/conditions,

d) Provisions for doubtful debts on outstanding balances,

e) Irrecoverable debts written off during the period on amounts due from related parties,

f) Key management compensation in total for Short-term employee benefits, Post-employment benefits, other long-term benefits, Termination benefits and Share-based payment.

2.6.4.3. Related party relationships where control exists shall be disclosed, irrespective of whether there have been transactions between the related parties.

PART V: ACCOUNTING POLICY & PROCEDURES FOR CHART OF ACCOUNTS AND OPERATING SOFTWARE

5. CHART OF ACCOUNTS (COA) & OPERATING SOFTWARE (OSW)

5.1. Framework for Chart of Accounts

5.1.1. Nature and Definition

4.2.1.1. Chart of accounts (COA) is used by the accounting system to aggregate information into OSD's financial statements.

4.2.1.2. Chart of accounts (COA) is a numerical listing of accounts that comprise OSD's general and subsidiary ledger and it typically contains the names of the account, brief descriptions and code identifying each account.

4.2.1.3. Accounts are listed in order of their appearance in the financial statements, starting with the statement of financial position and continuing with the statement of comprehensive income.

4.2.1.4. The chart of account of OSD is basically a system for categorizing all of its accounts and classifying all transactions according to the accounts they affect.

5.1.2. Purpose of Chart of Accounts

5.1.2.1. The chart of account is the basic foundation that the accounting system is built upon.

5.1.2.2. A well-designed chart of account not only meets the information needs of management, it also helps OSD to comply with IPSASs.

5.1.2.3. The standard chart of account is useful for analyzing past transactions and using historical data to forecast future trends.

5.1.2.4. Standard chart of account is also helpful to segregate expenditures, revenue, assets and liabilities so that viewers can quickly get a sense of OSD's financial health.

5.1.2.5. OSD has the flexibility to tailor its chart of accounts to best suit its needs.

5.1.3. Organizing Chart of Accounts

5.1.3.1. A standard chart of accounts is organized according to a numerical system.

5.1.3.2. Each major category will begin with a certain number, and then the sub-categories within that major category will all begin with the same number.

5.1.3.3. Depending on the size of OSD, the chart of account may include a few dozen accounts or it may include a few thousand.

5.1.3.4. Regardless of the nature of the organization and the level of automation it has, a chart of account should be well designed to meet the financial information needs of management and other stakeholders.

5.1.3.5. The following points can improve the COA concept for OSD:

a) Consistency: It is of some importance to initially create a chart of accounts that is unlikely to change for several years, so that you can compare the results in the same account over a multi-year period. If you start with a small number of accounts and then gradually expand the number of accounts over time, it becomes increasingly difficult to obtain comparable financial information for more than the past year.

b) Lock down: Do not allow the staff to change the standard chart of accounts without a very good reason, since having many versions in use makes it more difficult to consolidate the results of OSD.

c) Size reduction: Periodically review the account list to see if any accounts contain relatively immaterial amounts. If so, and if this information is not needed for special reports, shut down these accounts and roll the stored information into a larger account. Doing this periodically keeps the number of accounts down to a manageable level.

5.1.3.6. The principles that should be considered in designing chart of accounts:

a) COA should be designed to meet the financial information and reporting requirements for internal users such as management & board and external users such as owners, lenders, regulators & tax authorities.

b) COA should be kept as simple as possible and yet designed with enough detail to provide the required financial information and reports.

c) The number of accounts in the COA should be kept under control; otherwise, the process of simplification of information will not work.

d) There should be a logical numbering or coding system that is flexible enough to allow adding accounts as necessary.

5.1.3.7. In general, the chart of OSD accounts should be set up so as to provide the relevant detail of information in the financial reports for the users by taking into consideration those listed above.

5.1.3.8. Depending on the size of OSD, the chart of accounts may include either a few dozen accounts or a few thousand accounts.

5.1.4. Chart of Accounts Policy and Administration

5.1.4.1. It is the policy of OSD that all transactions are classified and recorded in OSD's books under the appropriate categories;

5.1.4.2. It is the policy of OSD that any changes to the chart of accounts are documented and approved by the Finance & Accounts Directorate/Director.

5.1.4.3. It is the policy of OSD that there is an up to date list of chart of accounts and their descriptions for reference purposes; and

5.1.4.4. It is the policy of OSD that there is a regular review of the chart of accounts to ensure that all reporting requirements are being met.

5.1.5. Account Codes Structure

5.1.5.1. A chart of accounts shows the various headings under which OSD's transactions are classified, analyzed and recorded.

5.1.5.2. Not only does it create a simple and straightforward recording process, but a well-constructed chart of accounts also provides standard account heads for budgeting and budgetary control purposes.

5.1.5.3. The list of categories in the chart of account includes assets, liabilities, equity, revenues, cost of sales and expenses.

5.1.5.4. OSD Accounts codes are 4 digit numeric and the main classification formats are shown below.

5.1.5.5. OSD's Chart of Accounts is enclosed in Appendix I.

 

5.1.6. Updating Chart of Accounts

5.1.6.1. Changes to the chart of accounts shall be processed through the formal procedures described below. This ensures proper documentation and also maintains an audit trail of any changes.

5.1.6.2. After identifying the need for it, any member of staff shall suggest amendments to, deletion, or the opening of a new account code or name in writing.

5.1.6.3. The form shall be submitted to the Head of Finance who evaluates the need for the proposed change.

5.1.6.4. The Department of Finance shall approve, defer, or reject the proposal. If accepted, the manual is amended according to the manual amendment procedures.

5.1.6.5. The Department of Finance shall issue updated accounts codes and names to all accounting staff at the end of the month whenever the change is affected.

5.1.7. Computerized Accounting System (Operating Software) / OSW

5.1.7.1. The Head of Finance in consultation with the ED shall evaluate, recommend, purchase and implement a computerized accounting package which is best suited for the Secretariat's financial recording and reporting requirements.

5.1.7.2. The accounting package shall:

a) Be able to accommodate the coding system set out in the chart of accounts;

b) Incorporate approved budget appropriations to produce activity based financial reports with variances;

c) Be capable of processing periodic management accounts in the format prescribed by management;

d) Produce annual financial statements in the format consistent with the relevant IPSASs;

e) Be user friendly and have an effective on-line after sales support including post installation training;

f) Operate on the network to facilitate information sharing;

g) Have adequate data security and back up routines and a highly reliable audit trail and password access at different levels;

h) Flexible reporting formats to enable OSD to generate various reports on an ad hoc basis and revise reporting formats to accommodate any changes including the following:

(i) Multi-currency reporting.

(ii) Multi user capability.

(iii) Efficient data entry system.

(iv) Automatic period end processing procedures where necessary.

(v) Ability to import or export data (subject to password security) to popular spreadsheet and database programs.

(vi) Designed and supported by a reputable software company.

5.1.7.3. The computerized accounting software shall at the very minimum consist of the following modules and subsidiary ledgers:

a) General ledger

b) Inventory

c) Accounts payable

d) Cashbook

e) Fixed asset module

f) Accounts receivable

g) Payroll module which can be integrated with the general ledger

5.1.7.4. The computerized accounting package currently in use by OSD is the Peachtree accounting software.

5.1.7.5. All financial and accounting data at OSD will be processed using the 2010 version of Peachtree system.

PART VI: ACCOUNTING POLICY & PROCEDURES FOR BUDGETING AND BUDGETARY CONTROL

6. BUDGETING AND BUDGETARY CONTROL

6.1. Framework of Budgeting

6.1.1. Nature and Definition

6.1.1.1. Budgets are OSD's operating plan for a fiscal period.

6.1.1.2. Budget is a comprehensive view of the entire organization's overall projection of the revenues or financial support and its expected expenditures.

6.1.1.3. Budget summarizes in monetary terms, the management's decisions regarding how OSD will fulfill its stated purposes.

6.1.1.4. Budget is the most important tool used by management to plan, control and monitor the activities and performance of the organization.

6.1.2. Budgetary Policy

6.1.2.1. The overall policy of OSD on budgets is to institute a financial management framework that is adequate, and effectively supports relevant and timely financial planning, budgeting, control and monitoring activities.

6.1.2.2. Specific objectives of OSD budget policy are to ensure:

a) All staff follows the approved budget plan of financial operations.

b) The adequacy of the budget process used to develop annual budgets which appropriately reflect OSD's strategic plan, business priorities and financial requirements.

c) The adequacy of the budget process to allocate resources in a consistent, timely and transparent manner, and aligned with strategic priorities.

d) The adequacy of reports produced to facilitate the financial monitoring process by management to support timely decision-making on financial matters, include resource reallocation and other corrective actions.

6.1.2.3. Budgeting is drawing up in advance a road map for OSD's operations for period ahead. This roadmap is reviewed periodically to appraise performance and effect necessary corrections.

6.1.2.4. Head of Finance based upon trend analysis and annual budget shall request from Program areas.

6.1.3. Budgetary Procedures and Control

6.1.3.1. The funding sources for OSD are from membership contributions, grants from donor partners, Fundraising and voluntary services.

6.1.3.2. OSD will have one master budget in line with its strategic plan and also a project based budget for each identifiable project.

6.1.3.3. The budget of OSD is a financial representation of its activity plan and is a framework for performance evaluation and measurements to assist in OSD's efficient and effective utilization of resources.

6.1.3.4. OSD will have a master budget line item list in accordance with its chart of accounts. The master budget list should be prepared in collaboration with the F&A and Program departments.

6.1.4. Budget formulation

6.1.4.1. Budget preparation shall commence at least two months before the commencement of the new fiscal year.

6.1.4.2. The budget line items should be prepared in line with the master budget line item list of OSD. The budget document should classify the budget items by project and administration expenses.

6.1.4.3. The budget should be prepared through an activity-based approach with the application of incremental budgeting for admin related budgets.

6.1.4.4. The Executive Director (ED) or his/her delegate shall assign a budget committee to prepare the draft budget of OSD.

6.1.4.5. Based on the guidelines issued by the committee, each department shall prepare its budget. Ongoing projects will be accounted for in the annual budget.

6.1.4.6. The budget committee consolidates the annual budget and a budget hearing will be facilitated by the budget committee in the presence of the Heads of departments.

6.1.4.7. The following items are worth noting during the budget formulation process:

a. Start from activities to be accomplished. Identify ongoing activities and portion of these activities (projects) to be accomplished during the budget year. Determine new project activities to be accomplished over the budget year.

b. Identify the components required to accomplish activities.

c. Work out income lines;

d. Work out expenditure lines / line items.

e. Cost the expenditure items carefully, including: allowing for inflation, salary increases, cost of living, and unusual expenses.

f. Work out what income you can expect carefully and conservatively.

g. Work out what your deficit is and determine how you can fill the deficit.

h. From your income and expenditure budget, develop a cash flow budget. The cash flow plan is a fine tuning tool to determine the financial feasibility of the budget.

 

6.1.5. Budget approval

6.1.5.1. Annual budget shall be approved by the Executive Committee.

6.1.5.2. Supplementary budget requests throughout the year, including signing of a project agreement by ED, shall be approved by the Executive Committee.

6.1.5.3. Budget shall be approved within three months in the beginning of new fiscal year.

6.1.5.4. Following the approval of the budget, annual cash flow forecasting shall be prepared by F&A Department in consultation with other departments disaggregated by months.

6.1.6. Budget execution

6.1.6.1. The ED is responsible for the implementation of the approved budget. In addition, each program Head is responsible for the proper utilization of the approved budget for their respective programs.

6.1.7. Budget Adjustment

6.1.7.1. No budget adjustment or overspending is permitted for restricted fund projects other than the manner indicated in the respective grant agreement.

6.1.7.2. For unrestricted funds only, the ED can approve additional budget per activities to the extent of 10% of the activity budget but not exceeding ETB 50,000.

6.1.8. Budget control

6.1.8.1. Payment/disbursements are effected following a budget clearance.

6.1.8.2. Budget execution reports should be submitted at least quarterly to management. Budget execution reports may be produced more frequently when required by donor partners and the management of OSD.

6.1.8.3. Cash flow forecasts should be revised on a monthly basis for changes by Finance and Administration Department in consultation with other departments. The F&A Department should plan for cash availability and coordinate the cash flow requirements at all levels.

6.1.8.4. Overspending is strictly forbidden other than the approved budget adjustments as described above. User departments should follow-up the status of their budget using the computerized accounting system. Appropriate and timely decision have to be made based on the budgetary control reports.

    ORGANIZATION FOR SOCIAL DEVELOPMENT 

                           

        FEMINIST MEAL MANUAL

           Monitoring, Evaluation, Accountability and Learning Framework

                                                                  

 

 

 

 

 

                                                                                        Addis Ababa, Ethiopia

                                                                                             2026

 

                                            TABLE OF CONTENTS

Contents

Page

1. Introduction

2. Purpose of the Feminist MEAL Manual

3. Principles Guiding Feminist MEAL

4. Feminist Approach to Monitoring, Evaluation, Accountability and Learning

5. Minimum Standards for Implementation

6. Roles and Responsibilities

7. Conclusion

6 Approval and Adoption

 

 

 

1. Introduction

The Organization for Social Development (OSD) recognizes that monitoring, evaluation, accountability, and learning are not merely technical processes for measuring results, but powerful mechanisms for promoting inclusion, social justice, and transformative change. As an organization committed to improving the lives of women, children, youth, persons with disabilities, and marginalized communities, OSD adopts a Feminist Monitoring, Evaluation, Accountability, and Learning (Feminist MEAL) approach across all its programs and operations.

Feminist MEAL goes beyond measuring activities and outputs. It intentionally examines power relations; values lived experiences, and ensure that communities are active participants in generating evidence and influencing decisions. This approach enables OSD to strengthen accountability to communities while promoting gender equality, participation, and social transformation.

This manual provides guiding principles and minimum standards for integrating Feminist MEAL into all organizational and programmatic functions. It applies to all OSD staff, management, partners, consultants, and stakeholders involved in program design, implementation, monitoring, evaluation, and learning.

2. Purpose of the Feminist MEAL Manual

The purpose of this manual is to provide a practical framework for integrating feminist principles into OSD's Monitoring, Evaluation, Accountability, and Learning systems. The manual aims to ensure that evidence generated by OSD reflects the realities, experiences, and priorities of women, girls, children, youth, persons with disabilities, and other marginalized populations.

Specifically, the manual seeks to strengthen participation and community ownership, promote ethical and inclusive data collection, enhance accountability to affected populations, support organizational learning and adaptive management, and contribute to gender-transformative and socially just programming.

3. Principles Guiding Feminist MEAL

OSD's Feminist MEAL system is founded on six interrelated principles that guide all organizational and programmatic processes.

 

 

Participation and Co-Creation

OSD recognizes communities as partners rather than passive beneficiaries. Women, girls, youth, children, and marginalized groups should actively participate in identifying priorities, developing indicators, collecting information, interpreting findings, and influencing decisions. Meaningful participation promotes ownership, strengthens accountability, and ensures that interventions respond to community realities.

Intersectionality

Individuals experience inequalities differently depending on factors such as gender, age, disability, socioeconomic status, location, and ethnicity. OSD acknowledges these intersecting forms of discrimination and commits to ensuring that monitoring and evaluation systems identify who benefits, who remains excluded, and what barriers different groups face. Data shall therefore be collected and analyzed in a disaggregated manner to promote inclusive programming.

Power Analysis

Feminist MEAL recognizes that unequal power relations influence access to resources, participation, and decision-making. OSD seeks to understand who holds power, whose voices are heard, and who remains excluded. Monitoring and evaluation processes should therefore examine changes in voice, agency, participation, and leadership, particularly among women, girls, and marginalized communities.

Ethics and Care

The dignity, safety, and wellbeing of participants are central to all MEAL processes. OSD commits to ensuring informed consent, confidentiality, safeguarding, and the application of Do-No-Harm principles. Data collection processes should prioritize emotional and physical safety, especially when working with children, survivors of violence, displaced populations, and vulnerable groups.

Reflexivity and Continuous Learning

OSD acknowledges that knowledge is shaped by values, experiences, and assumptions. Staff members are encouraged to continuously reflect on their own biases, power, and influence on communities and evidence generation. Learning should be viewed as an ongoing process that promotes adaptation, innovation, and improved programming.

Gender Equality and Social Justice

Feminist MEAL aims not only to measure change but also to contribute to transforming unequal social structures and discriminatory norms. OSD seeks to promote women's leadership, strengthen the agency of girls and marginalized groups, and advance equitable access to opportunities, resources, and rights.

4. Feminist Approach to Monitoring, Evaluation, Accountability and Learning

Within OSD, monitoring goes beyond tracking activities and outputs. It also seeks to understand changes in participation, voice, confidence, leadership, and agency. Monitoring systems should combine quantitative and qualitative information and pay attention to both intended and unintended changes.

Evaluation processes should examine who benefited from interventions, whose perspectives were included, and what changes occurred regarding gender equality, inclusion, and social norms. Evaluations should prioritize participatory approaches and ensure that community members contribute to defining success and interpreting findings.

Accountability mechanisms should ensure that communities have safe, accessible, and confidential ways of providing feedback and raising concerns. OSD commits to strengthening accountability to affected populations through community consultations, feedback mechanisms, and transparent communication of findings and actions taken.

Learning is a central component of Feminist MEAL. OSD promotes a culture of reflection and adaptive management by documenting lessons learned, facilitating regular learning sessions, and using evidence to improve current and future interventions. Learning processes should encourage critical thinking and challenge assumptions and inequalities.

5. Minimum Standards for Implementation

All OSD programs and departments are expected to apply the following minimum standards.

Data collection should be participatory, ethical, and inclusive. Information should be disaggregated by sex, age, disability, and location whenever possible. Both quantitative and qualitative methods should be used to capture changes in people's experiences and realities.

Safeguarding and confidentiality shall be respected throughout the entire MEAL process. Participation must always be voluntary and based on informed consent. Particular attention should be given to children, women, persons with disabilities, and vulnerable populations.

Programs should maintain effective feedback and complaint response mechanisms that are accessible, confidential, and responsive to community concerns. Findings and lessons learned should be shared with communities and stakeholders to strengthen trust and transparency.

Regular reflection and learning sessions should be conducted to review progress, identify challenges, and adapt interventions accordingly. Lessons learned and best practices should be documented and integrated into future programming.

6. Roles and Responsibilities

The successful implementation of Feminist MEAL requires collective responsibility across the organization.

Senior management is responsible for promoting institutional commitment to feminist principles, ensuring adequate resources, and supporting a culture of accountability and learning.

Program teams are responsible for integrating Feminist MEAL approaches throughout project design, implementation, monitoring, and reporting. They should ensure meaningful participation and inclusion of diverse groups.

The MEAL Unit serves as the technical lead and custodian of the Feminist MEAL system. It provides guidance on data quality, facilitates evaluations, supports learning processes, and promotes evidence-based decision-making.

All staff members are responsible for upholding ethical standards, respecting diversity, promoting inclusion, and contributing to organizational learning and continuous improvement.

 

7. Conclusion

The Organization for Social Development believes that evidence should not only measure change but also contribute to transforming unequal power relations and advancing social justice. Through the adoption of a Feminist MEAL approach, OSD commits to placing communities at the center of decision-making, promoting accountability and learning, and ensuring that programs contribute to sustainable and gender-transformative development.

By embedding participation, intersectionality, ethics, care, and continuous learning into its systems and practices, OSD seeks to create a culture where monitoring and evaluation become tools for empowerment, inclusion, and lasting social change.

 

 

We, our names listed down below, the board members of Organization for Social Development found out that it is necessary to develop the organizational safeguarding policy that describe the discipline and  relationship that should exist among the staff, representatives, partners of OSD and others with the participants. Therefore, this organizational safeguarding policy is developed and we have reached to a consensus that OSD shall adopt it to direct the nature of relationships with project participants.   

 

 

                                        Name                                                                                   Signature

 

 

 

ORGANIZATION FOR SOCIAL DEVELOPMENT

 

 PROCUREMENT MANUAL (POLICIES AND PROCEDURES)

 

 

 

 

 

 

 

 

                                                                                               Addis Ababa, Ethiopia

                                                                                                2024

 

 

Contents

A. General Introduction……………………………….……………………..………………..3

B. Organization and Intent of the Manual ………………………………………………… 4

C. Amendments and revisions to the Manual.. ……………………………………..…… 4

D. Overview of the procurement process…………………………………………………  5

E. Organizational structures and ..duties ………………………………………………… 6

F. General guidelines …………………………………………………………………..……10

G. Detailed procurement conduct and procedures……………………………………...…11

H. Competitive Bidding ………………………………………………………….……………12

I. Evaluation and Criteria for Contract Award………………………………………………7

J. Procurement Procedures …………………………………………………………………19

K. Procurement File (………………………………………………………………..………..35

 

 

 

 

 

 

 

A. General Introduction

  Purpose and Use of the Manual

a) Organization for Social Development (OSD) needs to procure goods and services to support its activities at its Headquarters (HQ), branch offices, field offices and coordination offices. At HQ procurement is the responsibility of the Procurement Committee and the Executive Director. At other locations Procurement Officers in an organizational unit reporting to the Finance and Administration Head. OSD's Financial Manual and Procurement manual regulations and rules govern the procurement activities conducted by the HQ, branch offices, field offices and coordination offices. This Procurement Manual clarifies the principle of segregation of duties between requisitioning and procurement units by specifying several of such separate and distinct functions within the overall procurement process. Moreover, cooperation between the requisitioning and procurement division is essential and of utmost importance to ensure that, best value for money, fairness, integrity and transparency, effective competition and best interests of the operations to assist beneficiaries, refugees and other persons of concern. The procurement committee and the ED are responsible for the purchase, rental or sale of products, services, including real property and works, or other requirements on behalf of the organization, both for budget funds allocated to HQ, and for procurement actions funded by donors. The conducting of purchasing, renting or selling, include, in addition to entering into contracts, the invitation for proposals or tenders and the negotiation with prospective Suppliers or Providers, hereinafter "Vendors", on the basis of detailed specifications. Requisition units, (e.g., the budget holders), are responsible for identifying the needs of the Organization, project and programs and developing generic specifications to fulfil such needs. Given that the commercial environment and technology changes over time, and that procedural changes may emanate from the on-going procurement reform programme, this Manual will require updating and refinement from time to time. This Manual is intended to provide guidance on procurement policies and procedures to all staff members involved in the various stages of procurement actions conducted by OSD in all offices and in all locations. The procedures in this Manual are designed to ensure that such staff can enable those seeking OSD business to be confident that their Submissions are considered and assessed in a fair and transparent manner. All staff members of OSD are required to comply with the provisions of this Manual. This includes Procurement Officers as well as staff members of the Requisitioning Offices, at HQ and branch level.

B. Organization and Intent of the Manual

This Manual brings together policies, procedures and activities dealing with OSD procurement process, and consists of eight parts; Overview of the Procurement Process, Organizational structures and duties, General Guidelines, Detailed procurement conduct and procedures, Competitive Bidding, Evaluation and Criteria for Contract Award, Procurement Procedures, Procurement File and definitions.

The main intent of this Manual is to allow for efficient Procurement actions. Accordingly, general or specific comments and suggestions for improvement of provisions of this Manual, or for additional provisions that may be needed, should be addressed to the Finance and Administration Department.

C. Amendments and revisions to the Manual

This Manual is subject to change from time to time as deemed necessary by OSD. The changes will be provided in the form of amendments to the Manual, or, if deemed necessary by a new version will be issued. The Finance and Administration Head is responsible for the distribution of this Manual and its amendments. Any changes/amendments to the Manual will be communicated to the Board of Directors for proper approval and endorsement.

D. Overview of the procurement process

Procurement policy, Principles and Code of Conducts: The Top Management of OSD works to ensure that all procurement, no matter what the value, is in conformity with the procurement policy and procedures outlined.

All staff should avoid Non-compliance as it could result in irregular transactions and could seriously impair the delivery of quality of goods or services and affect the welfare of the beneficiaries/Service recipients and other persons of concern.

Procurement Policy:—Procurement is undertaken to provide the necessary support to operations for assisting service recipients/beneficiaries and other persons of concern with the required quality and quantity of goods and services at the time and place that they are needed and in the most cost-effective and efficient manner.

Procurement Principles:— Procurement is undertaken on the basis of the following principles:

a) Best value for money;

b) Fairness, integrity and transparency;

c) Effective competition and

d) Best interests of the operations to assist service recipients/beneficiaries and other persons of concern.

Procurement Conduct and Ethics:—The procurement process must be undertaken in an ethical manner, in accordance with the following:

a) Code of Conduct: integrity and high ethical standards are maintained, and conflicts of interest are avoided.

b) Segregation of Duties: all actions in the procurement process and contract management are properly authorized, and appropriate segregation of duties is ensured.

c) Proper Vendor Management: proper evaluation, pre-qualification and registration and effective management of vendors are carried out.

d) Competitive Bidding: contracts are, in principle, awarded based on competitive bidding.

e) Evaluation: contract awards are objectively evaluated and recorded, based on technical specifications and pricing. Detailed specifications of the required goods and services must be well prepared, in advance of issuing the tender, to assess offers.

f) Supply Compliance: compliance with the specifications, warranties and delivery, as agreed with the supplier, must be ensured, documented by shipping, inspection and receiving records.

g) Payment Compliance: payments to suppliers (including insurance companies, shipping).

E. Organizational structures and duties

Management Responsibilities: OSD's Head of Office in Ethiopia will bear the ultimate responsibility for compliance with procurement policy and procedures as outlined in this Manual when procuring goods and services to support operations.

The Head of Office will make sure that a procurement manual exists, providing detailed advice is made available to procurement staff, and ensure that there is no conflict with the policies and procedures. And that proper control for monitoring, documentation and review are in place.

The Head of Office will ensure that a coherent procurement function is established and maintained. This will usually take the form of a designated Procurement Division.

Procurement Unit (PU): Procurement unit may vary in size, number of staff and composition. However, certain basic functions must always be fulfilled, irrespective of the size or form of the procurement operation. The Head of Office is responsible for establishing a formal structure that is relevant to the needs of its operation.

The major duties and activities of the PU are:

a) Provide a service to other units in the head office, coordination offices, field offices, and branch offices by acting as the principal contact with vendors.

b) The Unit serves as the exclusive channel through which all requests regarding prices, quotations and products are handled, including correspondence with vendors. Only authorized staff of the Procurement Division and the Requestor may jointly undertake negotiations with vendors. The minutes of discussions must be recorded. Similarly, only employees formally delegated by the Head of Office are authorized to make commitments for the purchase of goods and services.

c) Make the final determination of supply source, price and delivery schedule, in conjunction with other divisions when appropriate and in line with delegated authority.

d) Develop a sufficiently wide range of supply sources to provide adequate competitive bids.

e) Ensure that adequate measures have been taken to safeguard vendor confidentiality.

f) Ensure that all procurement processes are well documented and clearly filed for future reference.

g) Keep the OSD's management informed about economic and market conditions.

h) Ensure that employees involved in procurement are in compliance with applicable procurement policies and procedures, and strictly adhere to its code of conduct.

The procurement Committee (PC): To make sure that a coherent procurement function is established and maintained in its Head office and branch/coordination offices, a procurement committee (PC) will be established and it will compose of top management members.

Members of the Procurement Committee (PC):

a) Chairperson: Finance and Administration officer

b) Secretary: Secretary Cashier

c) Member: Program Coordinator

d) Other Member: Staff members who requested the goods/services

 OSD's Program/Project budget holder with the help of the procurement committee procurement proposal will have authority to approve contract awards and sign the LPOs to authorize the purchase of goods, works or services irrespective of the procurement value.

 OSD's Branch/Field offices can only procure goods and services having value of below ETB 3,000. All goods and services above ETB 3,000 shall be procured by OSD Head Office. In case of emergency and with other credible justifications the Head Office can delegate the branch/coordination office in writing to procure good and services above the limit, to approve contract awards and sign the LPOs to authorize the purchase of goods, works or services.

OSD's Branch/Field Office Program/Project budget holder with the help of the procurement committee's procurement proposal will have authority to approve contract awards and sign the LPOs to authorize the purchase of goods, works or services within the stated limit. Procurement professional to handle the day to day technical procurement routines.

The procurement Officer (PO): The procurement committee strategically led and manages all the procurement activities and the committee will assign the PO or/and the PO may be employed staff or the Organization.

Duties of The procurement officer shall include but not limited to:

a) Ensure procurement of goods or services are made as per the procedures specified in this manual.

b) Ensure that all procurement transactions are efficiently done to fit the needs of OSD.

c) Prepares and submit in time for Approval all LPOs and contracts for purchases authorized in these procedures and as allowed in the approved budget.

d) Ensure that at all times, the LPOs are retained in safe custody and in the event of any loss; a report thereof shall be made to the PC.

e) Subject to the financial limits provided under these procedures, he/she may place orders upon requisition from the store for items necessary for the maintenance of stock at authorized levels and contracts placed for common user items; and

f) Ensure that from each year's Work plan and Budget, a list of common user items are prepared for procurement following appropriate methods and contracts are awarded in a timely manner prior to the beginning of the year.

g) Identify the lead time: The period that takes between issuing purchase order and receiving the material in stock. Enough stock should be on hand to cover this period.

h) Identify the proper time of purchase: The time at which management believes the best quality at lower price could be obtained and the time could also be identified based on stores capacity and carrying cost.

i) Study, identify and suggest the economical lot of purchase: The quantity at which the purchasing and storing costs could be optimally used.

In order to segregate duties and establish appropriate internal controls, employee will only be authorized in one of the two functions, i.e. either commitment or disbursement. Purchases or payments may not be divided or delayed in order to avoid obtaining the correct level of approval.

The authorization schedule is prepared in such a way that it has clearly distinguished two functions pertinent to procurement:

a) To make purchase commitments for the purpose of procuring goods and services; and

b) To make or approve cash or bank disbursements.

The authorization schedule, which covers expenditures related to the procurement, may not be circumvented in any way. The procurement committee shall always keep a copy for audit purposes, and the dates of all changes must be documented to maintain a complete audit trail.

OSD's authorization schedule is as follows:

Authorized Organ

Authorization limit (In ETB)

Purchase commitments

Disbursement

Finance and Procurement Head

Up to 3,000

Yes / In the absence of the EC

No

Executive Director

3,000 - 20,000

Yes

Yes

Procurement Committee

20,001 up to 300,000

Yes

No

Board of Directors

Above 300,000

Yes

Yes

 

Proper Vendor Management: Every procurement should strictly follow policies and procedures for proper evaluation, pre-qualification and registration, and effective management of vendors.

The purchasing committee must conduct Pre-award surveys as part of the technical review of offers are recommended prior to the first award to a new vendor for a contract of high value, high priority or complex goods or services. Such surveys must include the vendor's credit rating, affiliations, familiarity with the technical requirements, facilities, experience, references, capacity, production equipment, type of personnel, etc.

F. General guidelines

Competitive bidding: Except as otherwise provided for in these procedures, supply of goods, works and of services shall be procured on basis of competitive bidding.

Products: The committee shall procure all products having regard to economy and quality.

Services: The Committee will ensure that any Person, NGOs, firms or Government Agencies engaged to provide services have the necessary managerial and technical qualifications, experience and financial capabilities to carry out the assignments. It is the role of the committee to prepare terms of reference (TOR) requested to submit bids and the MC would determine most suitable firm or individual for contract award.

Approved Supplier: The Management Committee /MC/ shall competitively appoint approved suppliers for common user goods and services on an annual or term basis and the list of these approved suppliers shall be maintained and monitored by the Managing Director.

Requisition for Procurement to be initiated:—All requisites for procurement to be initiated shall be made on PRF forms duly authorized by the Program Head and the Director.

Splitting of Transactions: The Financial limits set out in this manual shall be strictly complied with and splitting of transactions is not allowed except with the approval of PC i.e. procurement transactions of a similar nature shall not be made separately with the cumulative effect of exceeding the established ceiling without going through an open competitive bidding process.

Custody of Documents:—Except as otherwise provided for in this manual, all formal contract documents shall be in the custody the secretary of the procurement committee.

Inspection of goods and works and Verification of Services:—Prior to any payment being made for contracted goods, works and services, Authorized Officers shall inspect and certify that the goods, works and services are carried out properly in accordance with contract conditions and specifications.

G. Detailed procurement conduct and procedures

Ethical Business Code of Conduct: Any procurement of goods and services should take place in a way that is far kept from act of fraud and/or corruption. It must avoid conflicts of interest.

Any act of fraud and/or corruption, unethical behaviour, and breach of code of conduct will be governed according to regulations and rules on OSD's Human Resource Manual. This Manual have investigation policies and procedures to investigate allegations of abuse and possible misconduct (including fraud and corruption), and set disciplinary system to take appropriate disciplinary measures when misconduct is found to have occurred.

The top management will also be required to share with concerned stakeholders the full investigation report of any investigation into alleged abuse and misconduct and any administrative action in regard to such allegations.

Every Procurement must be conducted in an ethical manner above reproach, with total impartiality, and without any preferential treatment:

a) Promote fair, ethical and legal trade practices;

b) Act promptly and courteously in an atmosphere of good faith and equality, and without intentional misrepresentation;

c) Treat all information received from vendors in the strictest confidence, and guarantee the confidentiality of all specifications and price quotations received;

d) Decline to take advantage of vendors' errors but show cooperation;

e) Avoid causing unnecessary expenses or inconvenience when requesting offers/proposals;

f) Remain absolutely free from any obligations to any vendor; and

g) Make every reasonable effort to negotiate an equitable and mutually agreeable settlement of any controversy with a vendor.

h) Negotiations may be conducted with more than one prospective vendor, to obtain the best final offer, but such negotiations may not change the terms of reference of the issued tender.

Conflict of Interest: Employees must avoid conflicts of interest, in particular:

a) Employee conduct may not foster any suspicion of conflict between professional duty and personal interest.

b) Nobody will solicit or accept, directly or indirectly, any gift, favour, entertainment, loan or anything of monetary value from vendors or potential vendors.

c) Bids may not be solicited from, and contracts may not be awarded to, any company that is owned, controlled or actively influenced by any Partner employee or by a relative of a Partner employee.

d) Vendors will not participate in developing or drafting specifications for goods or services for which they subsequently submit an offer/proposal.

 Supplier Ethical conduct

a) OSD may monitor suppliers that appropriate management systems have been put in place.

b) OSD may self-certify that suppliers comply with the Code of Conduct and, in some cases; OSD may conduct on site evaluations and inspections of Supplier facilities and those of their subcontractors.

c) Non-adherence to these ethical conducts will be a factor in considering whether a supplier is deemed eligible to be registered as OSD supplier or to do business with OSD, in accordance with applicable OSD policies and procedures.

H. Competitive Bidding

Requirement for Formal Competitive Bidding: The thresholds for type of bidding/solicitations are the following:

VALUE OF TENDER (in ETB)

SOLICITATION DOCUMENT REQUIRED

MINIMUM NUMBER OF VENDORS TO BE INVITED

3,001 up to 20,000

Request for Quotation /RFQ/

Shall be free from Proforma invoices requirement

20,001 up to 300,000

Request for Quotation (RFQ) / Invitation to Bid (ITB)

Three

> 300,000

Request for Quotation (RFQ) / Invitation to Bid (ITB)

Public Bid

 

Procurement of below value of ETB 300,000 (or equivalent): Such procurement does not require a formal competitive bidding process; a simple request for quotation (RFQ) is sufficient. Nevertheless, a fair review quotation is also required. Quotes must be provided in writing and can be submitted in the form of an e-mail, letter or fax. It is good practice to ensure the receipt of at least three written offers/proposals.

Procurement of above value of ETB 300,000 (or equivalent): Such procurement requires a formal competitive bidding process. The objective of competitive bidding is to find the best quality of the required goods/services at the best value for money in a fair manner to support an operation.

Competitive open bids shall be invited in all cases by advertising in newspapers, posting Notices in strategic places, radio announcements etc.

Under a formal competitive bidding process, contracts may only be awarded after the invitation for, and the assessment of, at least three competitive quotations or bids, depending on the estimated value of the contract. Any exceptions from formal competitive bidding, such as sourcing from a sole supplier, must be justified in writing by the procurement committee.

Competitive quotations shall, where provided for be from different suppliers. Bidders shall be allowed not less than 10 days to prepare and submit bids. Any exceptions from this must be justified in writing by the procurement committee.

Bidding Documents:—Bidding Documents shall contain sufficient details and shall allow adequate time to enable prospective bidders respond appropriately. The documents shall spell out how bids will be evaluated and specify that the contract will be awarded to the bidder determined to be the lowest evaluated bid.

Evaluation Committees:—A bid evaluation committee/Procurement committee of not less than four shall be constituted by the ED to evaluate each bid.

 Certification:—Before acceptance of any goods, the requisitioning person shall certify that the goods supplied are of the right quality and correspond in all respects to the samples or specifications in the bidding documents and shall make written certification to that effect before they are received by the storekeeper.

Invitation for Bids:—Except as otherwise provided in these procedures, Procurement Committee shall be responsible for the invitation of all bids in liaison with the ED.

Bidding and Quotation Rules:— All prospective bidders shall be required to comply with the following conditions:

a) All bids and quotations shall be forwarded to the PC in plain sealed envelopes bearing only such endorsements or labels as may be specified in the invitation notice provided that no name, mark or identity of the bidder shall appear on the envelope;

b) All bids and quotations must be addressed to the PC Chairman.

c) All bids and quotations must be delivered by post, by courier or by hand or by Messenger or through the tender box within the time specified in the notice. Bids or quotations by telephone or telegram or fax will not accepted unless so allowed in the invitation to quote.

d) The PC shall not be bound to accept the lowest or any tender; and

e) All inquiries relating to any tender shall be addressed to the PC.

Bid Box: There shall be a tender box which shall have locks, the keys to which shall be held by a person appointed by the PC.

Opening of Bids:

a) All bids duly received shall be opened at the appointed place, date and time by a PC.

b) Bids shall be opened immediately after the time specified as the deadline for their submission.

c) Any bidder may, if he so wishes, be present at the opening of bids either personally or by a duly authorized agent.

d) Upon opening of bids, the bid opening committee shall cause the same to be numbered, date-stamped, initialled and listed and whenever possible, the prices shall be announced, but bidders will be reminded that the PC will not be bound to accept the lowest or any bid and the prices announced would not be an indication of who would be awarded the tender.

e) The procurement officer shall have the complete confidential custody of bids received before they are opened and shall ensure that the same are secured and that they are not opened except as provided in these procedures.

f) All bids received after the specified time shall be marked "LATE" and endorsed with the time and date of receipt and returned to the sender at the address given in the said bids.

Confidentiality of Bidding Documents: All the members of the bid PC and other officers of OSD who may handle bidding documents shall keep the contents thereof confidential and shall ensure that the documents are conveyed from office to office having due regard to secrecy and security.

Bidding Documents: Bidding documents shall specify the evaluation criteria to be used, and the PC may accept any bid other than the lowest one having due regard to, inter alia, quality, standardization policy, delivery duration, after sales service, experience in the market place, and other relevant matters as specified in the bid evaluation criteria.

 In adjudicating bids, the PC shall, inter alia, take into account the following factors:

a) Compliance with specifications;

b) The best price quoted and whether it is considered realistic judging from the prevailing market price for similar goods or services;

c) Qualifications and guarantees offered by the bidders;

d) Experience of the bidders with previous contracts;

e) Technical advice by experts;

f) Delivery period; and

g) Special conditions of bid e.g. validity of prices, fluctuations of currency, taxation and transport costs.

Bids shall ordinarily be awarded to the lowest evaluated bidder and whenever this is not done, the reason thereof shall be clearly given in respect of each of the lower bidder.

Notification of Award: The procurement officer shall notify the successful bidder of the award after all the necessary approvals and formalities are complied with, and also ensure that the unsuccessful bidders are appropriately notified of the outcome.

 Formal Contract Agreement

a) The PC shall ensure that formal contract agreements are executed where the bid value exceeds ETB 100,000 for goods procured. Whereas all service procured by the Organization shall accompanied by formal contract agreements.

b) In all other cases, the PC may dispense with preparation of formal contract documents provided that clear letters of acceptance or other acceptable documents are issued on behalf of the Organization.

c) All contract agreements shall be for definite duration;

d) Renewal or extension of contracts shall not be undertaken without the prior approval of the Procurement Committee.

Under a formal competitive bidding process, contracts may only be awarded after the invitation for, and the assessment of, at least three competitive quotations or bids, depending on the estimated value of the contract. Any exceptions from formal competitive bidding, such as sourcing from a sole supplier, must be justified in writing by the procurement committee.

The highest possible number of potential vendors suitable for a specific contract must be invited to bid. Bidding may not be limited to vendors domiciled in the areas of operation or its headquarters, but preferably have a wider geographical distribution. To facilitate this, the OSD is required to maintain an up-to-date database of qualified vendors that meet objectively justifiable minimum requirements. Vendors are required to complete a "vendor registration form".

The Requestor may recommend a source, but the selection of vendors to be solicited is a responsibility of the Procurement Committee solely. All vendor representatives must be directed to the Procurement Committee.

The following must be observed when dealing with vendors and their representatives:

a) Provide equal opportunities to vendors to make prices and quotations, in accordance with specifications;

b) Keep vendors informed of current and anticipated requirements;

c) If, for any reason, one vendor is allowed to re-quote, other competitors must be given the same opportunity. Re-quoting must be exceptional.

d) No gifts or favours may be exchanged with vendors.

Emergency Situations and Exceptions: In case of an exceptional operational situation (including emergency), the PC shall call a meeting and appropriate justification for an exception (waiver) to the requirement of formal competitive bidding shall be clearly stated in the PC minutes.

Exceptions to the requirement to conduct a formal competitive bidding process, which must be kept to an absolute minimum, are allowed only when:

a) Prices or rates are fixed pursuant to national legislation or by regulatory bodies;

b) The proposed contract relates to procurement from a sole supply source of goods or services (e.g. sole authorized vendor) or to procurement of a proprietary product or service;

c) Offers for identical products or services have been obtained competitively within a reasonable prior period, and prices and conditions remain competitive;

d) The formal solicitation (Invitation to Bid or Request for Proposals) will not give satisfactory results, or when a formal solicitation done within a reasonable prior period has not produced satisfactory results;

e) The procurement contract relates to services that cannot be evaluated objectively;

f) Exigencies of service do not permit any delay due to waiting for the result of a formal solicitation. This applies to circumstances where goods or services are required immediately to prevent harm to life, health or well-being of service beneficiaries and other persons of concern in situations of true emergency.

For all Conditioned/restricted funds, OSD's Head of Office shall request donors in writing an exception (waiver) to the requirement of formal competitive bidding. Such request for a waiver must provide valid justification and must be approved by the appropriate donor organ prior to contracting.

I. Evaluation and Criteria for Contract Award

 Evaluation: In advance of issuing the tender, specifications of services, goods and construction works must meet those established by OSD. It must be ensured that detailed specifications of the required goods and services are prepared for tendering and assessment of offers.

The Procurement Unit must allow for sufficient lead time to prepare the solicitation documents, the ability of the market to respond, evaluation of offers/proposals, production time, transport time and delivery to final destination.

All criteria specified in the solicitation documents, such as quality, delivery time, payment terms and compatibility with existing equipment, must be used to evaluate received offers/proposals.

An evaluation score sheet must be prepared, prior to the opening of the technical offers, to document the requirements in the solicitation document. This sheet will assign scoring weights for each requirement and may not be changed once the offers are opened. The comparison of bids documented in this table will present the deciding factors leading to the award of the Contract to the selected supplier.

Contract Award: The Contract for the procurement of goods or services will be awarded to the qualified bidder whose offer/proposal meets the requirements and is evaluated to be the best value for money.

The specifications provided in detail to bidders in the solicitation document will form the basis of the supply Contract.

To support the local economies or other service beneficiaries, preference may be given to procurement of goods or services manufactured in the area of operation or readily available locally in the quality required at competitive prices. In practice, this translates into allowing a 15% higher price differential for locally manufactured goods as compared to the landed or customs-cleared cost of international procurement. A comparative analysis of local and international procurement costs must be documented to justify more costly local sourcing.

Supply Documentation: All procurement actions must be fully and transparently documented. This means that every procurement must be supported with a fully cross referenced "stand alone" file with the complete and accurate documentation. Well-designed procurement forms will mirror each step of the procurement process and, if used correctly, allow effective management of procurement activities.

Complete and adequate documentation also forms the basis for accountability of the supplier, and will be required if any disputes arise or if any claims are made. All supporting documents must be kept for a period of ten years for audit purposes. Documents must be filed by contract number and tender document number.

Payment Compliance: Payments to suppliers may only be made upon satisfactory fulfilment of all obligations in the supply Contract. Advance payments are, in principle, not allowed. However, they may be considered by the PC for specific situations, in accordance with established criteria.

 In order to process payment to a vendor for goods, the Finance and procurement unit must ensure compliance and make payments in line with the payment terms and availability of an original invoice, the original goods receiving report, or hand over documents to the freight forwarder, third party inspection report (if applicable), and a copy of the Purchase Order.

In order to process payment to a vendor for services, a copy of the Contract is required together with the original invoice approved by the Requestor.

J. Procurement Procedures

This Section details the procurement process and highlights relevant procedures. It is important to note that, in line with the procurement policy; delegated authority must be established and documented for any procurement activity.

Identification of Needs: The Finance and Procurement unit is responsible for the establishment of a detailed procurement plan and budget in collaboration with Program unit. Procurement by the Organization must be agreed as part of the work planning process between OSD and Donors. The procurement plan identifies, quantify, specify and plan for the needs of service beneficiaries and other persons of concern.

If exceptional circumstances prevent planning and early notification of the requirement, all applicable procurement procedures are still required to be followed. If this is not possible because of urgency, the reasons and circumstances for the urgency must be fully documented and approval must be obtained from the Executive Director.

The Procurement Unit will provide planning support, i.e. appropriate support and advice to the Requestor in completing the Requisition with regard to:

a) Detailed specifications;

b) Delivery expectations; and

c) Policy and procedures.

Requisition: A formal written Requisition (Purchase Request) must be made by an authorized Requestor to the Procurement Unit in order to initiate the procurement process and with sufficient lead time.

Before proceeding with any procurement, the Procurement unit must review the Requisition and make certain that proper approval has been obtained. It is important to note that the Procurement unit is not authorized to alter specifications, quantity or other details of a Requisition, unless such changes have been discussed with the Requestor and given appropriate approval.

The completed Requisition, along with the subsequent offers or proposals from vendors and evaluation done by the Procurement Unit, serves to support the creation of a Purchase order or Contract and eventual payment to a vendor. No procurement activity will be undertaken without a fully completed and authorized Requisition.

Establishing Bidders List: Potential vendors that have not yet been registered must be requested to complete a vendor registration form. Following an evaluation by the Procurement unit, the vendor may be added to the Partner's active database of registered vendors.

From this database of registered vendors, the Procurement unit will identify and select eligible vendors to solicit bids for a particular procurement process, filtering on:

a) Vendors who delivered against the last contract;

b) The best three vendors from the last solicitation;

c) Newly identified vendors;

d) Other relevant vendors.

The vendor database must be maintained and kept up-to-date and will contain for each pre-qualified vendor:

a) Full name and address;

b) Product information and data sheets;

c) Supply information (quality, delivery times, payment terms and warranties);

d) After sales services;

e) Packing and shipping facilities;

f) Management data and historical data;

g) References;

h) Results of previous bidding and comments on past performance; and

i) Audited financial statements for the last three years.

Vendors which are not able to supply the needed goods or services, or other vendors which are not eligible or suitable to bid, may not be added to a bidding list simply to make up the numbers.

Solicitation Documents: It includes Request for Quotation (RFQ), Invitation to Bid (ITB), Request for Proposal (RFP) and Scope of Procurement.

Solicitation documents must furnish all information necessary for a bidder to prepare an offer or a proposal and explain the main criteria for their evaluation. The rights of the bidder regarding the acceptance or rejection of offers or proposals must also be stated.

A formal tender process is required for procurement with a value of ETB 20,000 or greater. In such cases, either an Invitation to Bid or a Request for Proposal must be used for procurement. For procurement with a value below ETB 20,000 formal bidding is not required and a Request for Quotation (RFQ) may be used for tendering.

The Invitation to Bid (ITB) is a formal method of tendering. It is used for the procurement of goods and services with standard and firm specifications that can be expressed qualitatively and quantitatively. Bids may be submitted in either one sealed envelope or two sealed envelopes (where technical and financial information are submitted separately).

The Request for Proposal (RFP) is also a formal method of tendering. It is used for the procurement of goods and services that cannot be expressed in sufficient detail to allow for the use of an ITB, for example in the case of professional services or complex goods or works. An RFP requests a technical proposal offering a solution to the requirements specified in the tender document, as well as a separate financial proposal. A two-envelope system must be used: one for the technical offer and one for the financial offer.

The recommended minimum number of vendors invited to bid for each tender is outlined at section 45 of this manual. It must be noted that there may be few potential vendors in some operational contexts or for some specialist goods or services. In those instances, it is important to document the reasons for inviting fewer than the recommended number of vendors.

General Elements of a Formal Solicitation Document

a) Form of submission: The ITB and the RFP are formal solicitation documents. Their content is crucial to a good procurement process, since they define the procurement requirements and the basis on which the submission is to be made. ITB or RFP tender documents must be sent simultaneously to all potential bidders to ensure equal treatment.

b) The tender document must always stipulate that offers or proposals, including pricing, must be submitted in a sealed envelope (or envelopes) identifying the contents. In the case of RFPs and for complex or specialized contracts, bidders will be asked to submit the technical and financial proposals in two separate sealed envelopes (the "two-envelope system").

The selection will be made based on the principle of best value for money. Bids must be scored when evaluated, with price and technical evaluation scores indicated in percentages.

a) For goods evaluated by weighing the technical evaluation at 60% and the price at 40%;

b) For professional services, the technical and financial evaluation weighed at 50%/50%.

c) For construction work, the technical and financial evaluation weighed at 70%/30%.

d) For other works which are not stated on a-c, the MC shall determine the technical and financial evaluation weight.

Closing date/time: The response time allowed for offers or proposals is based on the complexity of the required goods or services. Vendors are generally given ten days to two weeks to respond to an ITB or RFP. In cases of emergency, vendors may be required to respond as quickly as within 24 hours. For complex or specialized goods or services, it is usually appropriate to allow more than two weeks, even a month or more.

Validity of offers/proposals: The validity of offers/proposals of vendors shall be for 30 days. During these time OSD staff shall complete the comparison and evaluation of offers/proposals, evaluate samples (if required), clarify particular aspects of the proposed contract, obtain all necessary approvals, award the contract and receive back the countersigned contract from the vendor; Any specific conditions must be shown under a separate heading, such as the currency in which offers are to be made, if samples are to be provided or if laboratory test certificates are required.

Conditions for purchase orders for goods or services: It is important to ensure that the vendor accepts the general terms and conditions, either during the vendor registration process or when submitting an offer.

The required number of copies of the offer/proposal must be noted in the tender document Bid, Performance and advance payment security: Bid Bond, advance payment guarantee or performance bond must be considered for high-value contracts, construction contracts and critical projects, to be provided by the vendor on or before the effective date of contract.

Any potential bidder under an ITB or RFP process requiring additional information must submit a written request, either by letter, e-mail or by fax. The response and a copy of the question must be sent simultaneously, in writing, to all potential bidders, whilst maintaining confidentiality about who is bidding.

It may be necessary to organize a meeting with potential bidders under an ITB or RFP process to provide additional information which cannot easily be dealt with in writing (e.g. when bidders have complex queries concerning product specifications). Such a meeting, for which all potential bidders must be invited to attend, would need to take place prior to the bid closing date. A record of the meeting will be provided without delay and simultaneously to the attending and other potential bidders. Prompt action must be taken in order not to compromise the bid closing date.

An extension of the closing date/time may be granted if justified by exceptional circumstances (e.g. when many vendors cannot comply with the closing deadline) or if requested in writing by more than one bidder. When an extension is granted, all bidders must be informed immediately and simultaneously. A bid opening may only take place after the new deadline for the submission of bids.

Specific Elements to be included in an ITB or RFP for Goods: The ITB or RFP document shall include a template offer form, which the suppliers will use, facilitating the evaluation of bids. The form must include fields for the supplier to record the necessary offer elements, e.g. currency of offer, unit price, quantity discounts, and applicable taxes.

The vendor is required include a warranty for items which by their nature and price are normally guaranteed against deficiencies.

For the purpose of evaluation and comparison of offers, bidders must be requested to quote on the basis of identical trade terms/Incoterms/. Bidders are required to state the following:

a) EXW unit prices (Ex Works);

b) EXW total price, including cost for packing and loading;

c) Price increment for delivery, as applicable, according to Inco terms, e.g. CFR

d) FCA to named place of departure (Free Carrier);

e) CIP to named place of port of entry (Carriage and Insurance Paid to);

f) DAP to named place of destination (Delivered at Place).

If required, the ITB or RFP must request the cost of the following services, to be quoted separately from the cost of the goods:

a) Freight and other expenditures related to inland transportation and delivery by the vendor in the country of destination;

b) Installation and commissioning;

c) Training;

d) Maintenance and repair; and

e) Detailed operations and maintenance manuals.

Specific Elements to be included in an ITB or RFP for Services: The following elements must be included specifically in an ITB or RFP for services:

a) A warranty from the vendor;

b) A detailed description of the services to be provided, including an implementation schedule;

c) The payment schedule;

d) A request for customer references; and

e) A request for staff references, as applicable.

Reception of Formal Offers or Proposals under the ITB or RFP Process

a) Sealed envelopes received under the ITB or RFP process must be marked "not to be opened before (closing date/time)" and must bear the references requested by the Partner on the outside envelope for identification purposes. If the Head of Office can guarantee complete confidentiality for the receipt of offers by a dedicated fax, the receipt of offers/proposals in this way may be considered.

b) Upon receipt, the unopened offers or proposals must be immediately safeguarded in a locked bid box and not opened until the bid opening deadline. The bid opening will ideally be conducted by a PC and bid openers are all required to be present when opening the bid. Under no circumstances, will an offer or proposal be opened, altered, reviewed or examined, nor will it be marked or defaced in any way, prior to the official bid opening.

c) Offers or proposals received after the closing date will not be considered. All late offers or proposals will be returned to the respective bidders. Offers or proposals which are not submitted in sealed envelopes will also not be considered.

The following arrangements will be made for opening offers or proposals under ITB or RFP:

a) Sealed bidding: offers or proposals will be opened (or disclosed if received by fax) by at least two OSD officials, who will prepare and sign a record of the bid opening, including the date and hour when it was held, the persons present and their initials, the number of offers or proposals received, and the names of the bidders.

b) Only authorized staffs are allowed to participate in the bid opening for ITB or RFP tender documents.

c) Those who open the offers or proposals must verify whether the offers or proposals meet the general requirements for valid receipt specified in the solicitation documents, and whether they have been properly signed.

Bidders are not permitted to alter the offer or proposal after the closing date. Any bidder may, however, be requested to clarify an aspect of an offer or proposal in writing, but a change in the substance or price of the offer or proposal may not be sought, offered or permitted.

Prior to the award of Contract, no information may be revealed concerning offers or proposals such as relative standing, names of bidders, etc. After the award of contract, the decision will be announced to all bidders. Explanation may be provided upon request. Under no circumstances, however, will any bidder's confidential information be disclosed to another vendor or to officials not directly concerned with the evaluation process.

Review and Evaluation of Offers or Proposals and Award

a) OSD has internal reviews and thresholds for authority, approval and oversight.

b) The Financial Controller will hear recommendations on cases from the Procurement unit and ensure that the procurement process has been properly conducted in line with the Partner's/donor's policies and procedures, and will award or reject a recommendation to establish a contract accordingly.

c) Minutes of the deliberations and decisions reached must be retained on file.

d) The Financial Controller must ensure that they have no conflict of interest in reaching their decisions, and to this end are not allowed to work as part of the Procurement Division.

e) The purpose of evaluation is to determine which vendor has the lowest price for the acceptable specifications (principle of "best value for money"). In determining whether an offer or proposal is acceptable, non-price factors are first taken into account. If all other technical elements are equal, the lowest price acceptable offer or proposal must be selected. The basis for award must be duly documented and justified, and must be based on the established evaluation criteria in the tendering document.

The Procurement unit will thoroughly review each bidder's offer/proposal in order to detect any problem. In the event of a calculation error in an offer or proposal, the unit price will prevail. If it is clearly beyond doubt that a fundamental mistake has been made, the Partner Procurement Unit may permit the bidder to withdraw, but not alter, the offer or proposal.

The factors that will be considered in an evaluation, in addition to price, for the purpose of determining the best acceptable offer or proposal will be specified in the RFQ, ITB or RFP, and will include where applicable:

a) Compliance with legal requirements, technical specifications, relevant international standards and technical norms;

b) Compatibility with existing equipment and standardization plans;

c) Compliance with required time schedules;

d) Delivery times;

e) Payment terms;

f) Guarantees, availability of spare parts, after-sales services and training;

g) Life-cycle aspects covering maintenance and operating costs;

h) Capability, capacity, financial standing, past experience and performance of the vendor and its local representative;

 

 

i) If delivery time is a main factor for award, a liquidated damages clause will be made part of the contract;

j) If offers or proposals are in a currency other than the local currency, they will be converted at the prevailing rate of exchange for evaluation purposes.

Offers or proposals received under an ITB or RFP process (such as complex goods or services) will be submitted to the Requestor for technical evaluation by a committee, in accordance with the award criteria listed in the solicitation documents. The Technical Evaluation Committee (normally chaired by the Requestor) must prepare and sign a detailed evaluation score sheet (Bid Tabulation Form) and evaluation report, and it will specify which technical offers are cleared as sufficiently meeting the technical specifications outlined in the solicitation document.

Under the two-envelope system, all pricing information must be submitted in a separate sealed envelope. After the technical evaluation is conducted, the price for only those offers that are technically cleared is reviewed. This is done by the Procurement unit (not by staff participating in the technical evaluation).

The results of the technical evaluation scores will be provided to the Procurement Unit who will summarize them in a "Bid Tabulation Form", listing which with the tender document criteria (apportioned technical/price percentages, such as 70% and 30%). Price scores will be tabulated and weighted (for each technically acceptable offer or proposal), and a combined score will be calculated. The score is highest for the lowest price offer. Financial scores are allocated to the other bids in proportion to the lowest price offer. The Procurement Division will include all supporting documents and a written statement of all relevant factors leading to the final recommendation for the award of the contract.

 In the case of an RFQ for single purchases of "off-the-shelf" goods, a detailed technical evaluation report is not required. The signed and reviewed Tabulation of Offers, as approved by the Procurement Division, together with the supporting documents form the basis for the award of the contract.

Extension of validity: The evaluation and award of the contract must be completed promptly within the period of the validity of offers or proposals as stipulated in the solicitation documents. If justified by exceptional circumstances, an extension of validity must be requested in writing from all bidders before the expiration date. When an extension is requested, bidders may not be asked or permitted to change the price or other conditions of their offer or proposal. Bidders have the right to refuse to grant such an extension. Any bidder not granting an extension automatically declines their further participation in the concerned bidding process.

Rejection of offers or proposals: The Conditions for Purchase Orders or Contracts, submitted with each RFQ, ITB or RFP will contain a statement concerning the right to accept or reject any offer or proposal prior to the award of contract and to annul the bidding process and reject all offers at any time. When required in the interest of operations, for example when an insufficient number of substantially responsive offers or proposals are received or when there is lack of effective competition, all offers or proposals may be rejected and new ones solicited based on the same or revised specifications. Such action may not be taken for the sole purpose of obtaining lower prices.

If the award of contract was preceded by negotiation by designated OSD's employees, this must be duly documented and recorded in the Procurement File, specifying the contract negotiation objectives (delivery, quality, price etc.). Such negotiations must be entered only upon the duly authorized person and conducted/recorded in a transparent manner, after award of the contract. A contract may only be awarded when funds are confirmed and authorized to be available.

Ordering and Inspection: A letter, with the following tendering documents, is submitted to the Financial Controller or to the authorized officer as the basis for awarding the contract:

a) Requisition;

b) RFQ or ITB or RFP;

c) Record of the opening of the offers/proposals;

d) Technical evaluation report (if relevant);

e) Tabulation of offers; and

f) Offers or proposals received (all in original).

Purchase Orders or Contracts will be utilized to establish contractual obligations. They are issued according to a numerical sequence of reference numbers.

The required basic data in a Purchase Order or Contract are:

a) Contract number and date;

b) Page number and total number of pages (e.g. 1/3, 2/3, 3/3);

c) Vendor's address, contact person and phone number

d) Vendor reference number;

e) Consignee and, if different, delivery address;

f) Trade terms (Incoterms);

g) Mode of shipment and trans-shipment point (via);

h) Delivery date (note: never "ASAP");

i) Terms and conditions;

j) Timeframe of the contract;

k) Liquidated damages or compensation for non-compliance with terms and conditions;

(Note: Content jumps directly from item 132 to item 138 as per the original source documents)

Insurance: Insurance coverage must be considered at least for high value or otherwise critical contracts. Certain Inco terms, such as DAP or CIF, make transport insurance a part of the vendor's responsibility. Transport insurance can usually also be obtained separately through a freight forwarder. Whenever OSD enters into CIF import contracts through sea transport, it should seek waiver from NBE regarding employing foreign insurer.

In the event of damaged goods, the Partner will lodge insurance claims, or provide the necessary information in order for donors to do so, for receipt of damaged goods. Such claims must be made, within the specified time following delivery, with the relevant insurance company and according to the terms and conditions for the lodging of claims as stated in the relevant insurance policy. If the settlement of an insurance claim results in a reduction in price or in reimbursement in cash, this must be reflected in the Project accounts.

Inco terms: Inco terms are international commercial terms, widely used in international commercial transactions for goods. The purpose of Inco terms is to provide international rules for the interpretation of commonly used trade terms in international transactions. They give a uniform set of guidelines for the interpretation of buyer and vendor obligations under three main headings:

a) Place of delivery;

b) The division of costs;

c) The point at which the insured risks pass from the vendor to the buyer.

Incoterms also identify which party is responsible for export documentation and custom clearance obligations under each term. By stating the Incoterms under which the Purchase Order is issued, both the vendor and the Partner know the rules governing the delivery. The Partner Procurement Unit must be fully conversant with the meaning and ramifications of the quoted Incoterms.

International procurement arrangements will be made on Carriage and Insurance Paid terms (CIP terms/Incoterms 2013) by surface or airfreight to the final destination or minimum to the port of disembarkation.

Transportation: Transportation must be considered when the contract includes delivery of goods or services at the destination. Transportation may involve a significant cost component of the purchase and may affect delivery time. As such, it requires appropriately detailed planning. Once a requisition has been raised, the Procurement unit must investigate options for the most acceptable, reliable and economical means of moving the goods or services to the intended destination. The procurement division must also adhere to the requirements of National Bank of Ethiopia regarding to transport imported goods by sea through Ethiopian Shipping Lines /ESL/. If OSD believes that there is no service of ESL or the shipment is urgent, is should seek waiver letter from ESL before entering into CFR based import procurement contracts.

In the selection and contracting of freight forwarders, it must be noted that carriers and their agents will conduct their business under limited liability and under agreed conventions and take risk mitigation measures.

The freight forwarder will be instructed to send to OSD as the consignee the following documents, if applicable:

a) Advance shipping advice by fax or e-mail;

b) Waybill (original and one copy);

c) Commercial invoice (one copy);

d) Packing list;

e) Third-party inspection certificate (if applicable);

f) Insurance certificate (if applicable);

g) Other documents (if required) (e.g. radiation certificate, certificate of analysis).

Contracting for Goods and Services: Contracting for goods and services requires clear terms of reference and active oversight by the Requestor following the award of contract.

Terms of Reference (TOR) are prepared by the Requestor, which succinctly and clearly state the nature, timeliness and measures of performance required of the contractor. The TOR may include standards for accomplishing work. The Procurement unit may assist with clarifying the TOR, but the responsibility for preparation and subsequent monitoring rests with the Requestor.

An estimate of the cost for the goods and/or services to be acquired must be prepared by the Requestor. Sources for the estimate include amount paid for previous contracts under competitive conditions, and market surveys. A realistic and reasonable estimate provides a baseline to permit analysis of proposed prices and determination of reasonableness.

The Procurement unit must maintain records of solicitation documents, all original proposals, selection documents, evaluation reports and the contract.

Signature of Contracts. The Contract must be signed by OSD and the contractor in there copies. It is usual practice that the contractor signs the Contract first. Copies of the contract will be provided to the Requestor and to Finance unit.

Modifications to Contracts may only arise when unexpected or emergency situations occur and must be reflected in an amendment of the Contract. Clauses for providing for amendments will be stipulated in the contract. Funds must be certified as being available prior to modifying a contract that increases its amount.

Active oversight or contract management ensures that contractor performance is monitored and that any shortcomings are promptly brought to the attention of the contractor for correction and adherence to the terms of reference as included in the Contract. Active oversight also ensures timely processing of contractor invoices.

 Payment will be made upon satisfactory completion and acceptance of work. Upon submission of the invoice by the contractor, payment will be promptly made in accordance with payment terms established in the Contract.

Advance payments are, in principle, not allowed. However, they may be considered by the Partner for specific situations, in accordance with established criteria.

In case advance payments are necessary, they may not exceed 50% of the total vendor contract.

Progress payments may be appropriate for contracts lasting longer than two to three months and for services with discrete or regular progress intervals, for example:

a) Annual maintenance or other service contract. The payment schedule must be reflected in the contract.

b) Study or report lasting several months to a year. Payment can be based on steps accomplished to achieve the final report or study. Milestones must be realistic and reasonable.

Progress payments will not be applied for shorter term contracts which involve the discrete delivery of goods or services.

Payment: Prompt payment, in accordance with contract terms, is a critical aspect of any commercial relationship with a vendor.

 Invoices from vendors will be examined, verified and certified independently by the Finance unit. Such examination will include supplementary documentation covering:

a) Unit and total prices;

b) Quantities specified in the contract;

c) Previous payments;

d) Deductions;

e) Signed Receiving Report (for goods) or Handover Report (for services);

f) Copies of payment vouchers and invoices, reported and referenced to all assets acquired;

g) Other obligations specified in the contract (e.g. installation, training, etc.).

 Examination and verification of invoices will be performed expeditiously in order to assure timely payment within the timeframe agreed. This verification will confirm that the goods or services invoiced have been authorized as actually received in conformity with the contract. Any deficiencies or discrepancies will be referred to the Procurement unit. If progress payment was agreed upon in the contract, progress has to be certified by the Requestor of the goods or services.

The Finance Unit will certify the invoice for payment. Only the amount stated on this certified invoice, taking into account given discounts, will be paid. Cash discounts taken or lost must be reported accordingly. Lost discounts must be justified in a note, to be added to the Procurement File.

Several payment options exist depending upon the agreement reached between the Partner and vendors. Whatever the payment conditions, they must always be clearly detailed in the contract. The principal options are:

a) Bank transfer directly from the OSD's account. This is preferable because OSD has control throughout the payment process.

b) Check drawn from OSD's account and handed over directly to the vendor.

c) Letter of credit. This is least preferable option since it is costly and time-consuming.

K. Procurement File

The Procurement unit must maintain a file for each procurement. A typical "stand-alone" Procurement File would contain the following, in this order, separated by dividers for easy reference:

a) Requisition;

b) Company names and contact persons for vendors solicited;

c) Copy of the request for written offer (RFQ, ITB or RFP);

d) Original offers or proposals from responsive vendors, including all related correspondence;

e) Evaluation of offers or proposals or approved waiver giving justification for vendor;

f) Selection and award price;

g) Tabulation of offers;

h) Justification for lack of competition, in case less than the specified number of bids were received;

i) Purchasing Committee minutes and decision, if appropriate (depending on value of contract);

j) Copy of the Purchase Order or service contract including orders for inspection and insurance, if applicable;

k) Expedition documents;

l) Customs clearance documents (in case of international procurement);

m) Copy of the Receiving Report (for goods) or Handover Report (for services);

n) Copy of the vendor invoice;

o) Payment vouchers/receipts;

p) Other documents and correspondence related to the Contract;

The Procurement unit must document any anomalies or deviations from policy or procedures in a purchase with a signed explanatory "note to the file". Full supporting documentation must be maintained to respond to future questions from reviewers or auditors.

 Procurement documents: In order to proceed with procurement the following documents are generally used.

a) Store Requisition: This form is used by any department or section of the company to request the issuance of material. It generally consists of the requesting unit, description, quantity and signature of the authorizing personnel.

b) Purchase Requisition: This format is issued by stores to purchasing when stock reaches the stock reorder level or the material requested is not in stock.

c) Proforma Invoice: Document collected from supplier upon request of purchasing generally indicating description of goods, price, specification, and delivery time and payment terms.

d) Bid Analysis Report: Document in which all offers received is summarized to make it clear and convenient for comparison and decision making.

e) Purchase Order: Commitment document used by a company to order specified materials, at specified price and time with certain specified conditions. Purchase order is signed by delegated personnel only. It is also a binding document between the buyer and the seller.

f) Purchase Follow-up Register: Follow up register book to monitor the status of each purchase order. It generally contains name of supplier, Purchase order No., date issued, L/C No. and date issued, documents withdrawn from bank and date, bill of lading No. and date, arrival at port and date, clearing agent and date documents handed over, trucks used and plate No. date delivered and warehouse No. etc.

Definitions

Advance payment: Payment made before goods or services are delivered. Advance payments may only be made in exceptional circumstances.

Competitive bidding: Process of bidding to be employed by the Partner in compliance with the, for all procurement where the value is above ETB 200,000 or equivalent. Under a competitive bidding process contracts are awarded only after the invitation for, and the assessment of, at least three competitive quotations or bids (the number depends on the estimated value of the contract and its complexity). Any exceptions from competitive bidding procedures, such as sourcing from a sole supplier, must be justified in writing.

Contract: Legally-binding agreement between two or more competent persons/parties to perform or not to perform a specific act(s). It generally takes the form of a written agreement made up of an offer by one party and the acceptance of the offer by another party. A procurement contract is legally binding for each party, and contains what has been agreed (including terms and conditions) between buyer and seller, serving as proof of their obligations. A legally-binding agreement is generally in the form of a Purchase Order, Contract or Framework Agreement.

Emergency: Unexpected situation that is so compelling that, if not addressed immediately, it would endanger life, property or adversely affect essential operations. The emergency situation is such that it precludes requisitioning through normal supply channels, use of normal contracting methods and obtaining advanced approvals normally required to respond to the situation.

Finance Unit: Organizational unit (or perhaps one individual for a small organization) within the organization designated with delegated responsibility for financial management.

Formal bidding process: The Invitation to Bid (ITB) and Request for Proposal (RFP) are formal bidding processes with defined requirements and clear parameters for contract award. They must be used for tenders of USD 5,000 or more. (In contrast: the request for quotation (RFQ) is not a formal bidding process, but rather a tender process which can be used for lower value procurement where the requirement is clear and specific.)

Goods/Service Contract: Legally binding document for the procurement of goods or services, generally taking the form of a Purchase Order or Framework Agreement.

International procurement: Procurement of goods or services from outside of the country of operation where the supply requirement is located.

Invitation to Bid (ITB): Solicitation document for procurement of goods or services with standard and firm specifications, in which the requirements for formal competitive bidding are specified.

Local procurement: Procurement of goods or services from within the country of operation where the supply requirement is located.

Procurement Unit: Organizational unit (or perhaps one individual for a small organization) within the organization designated with delegated responsibility for procurement.

Procurement process: Process which includes specification of requirements, sourcing, evaluation of offers/proposals, contract award, inspection, delivery, installation and commissioning resulting with the provision of goods and/or services.

Purchase Order: Legally binding document which serves as an agreement for the procurement of goods or services.

Request for Proposal (RFP): Solicitation document designed to obtain proposals for goods and services to satisfy a requirement that cannot be described in a quantitative or qualitative manner. An RFP leads to the selection of the proposal that offers the best value in accordance with the pre-defined evaluation criteria. Where appropriate, the RFP will indicate that negotiation may be undertaken in respect of the preferred proposal.

Request for Quotation (RFQ): Solicitation document designed to obtain proposals for goods and services that describe the requirements both quantitatively and qualitatively. An RFQ requests prices and commercial terms from vendors, for goods and/or services that meet neutral specifications and are usually readily available on the market.

Requestor: Person or unit within a Partner organization with authority over a budget, submitting a request for the procurement of goods or services.

Requisition: Standardized form containing detailed specifications, which is completed by the Requestor and duly authorized, in order to initiate the procurement process by the Partner Procurement Unit.

Vendor (or supplier): Provider of goods or services.