THE FLED GROUP

 FINANCIAL MANAGEMENT POLICY

 

 Preamble

This Financial Management Policy is basically a manual that covers the accounting policies, systems and procedures of all the organizations that make up the FLED GROUP, including Foundation for Leadership & Education Development, FLED International Leadership Institute, Future World Magazine, Chapel of Grace Transformation Ministry, etc.  It is developed not only for governing the financial transactions of the organizations so that the staff can follow the set systematic procedures but also to fulfill local statutory requirements and demonstrate the strong management practices adopted by the FLED GROUP.

The FLED Group comprises different, but inter-dependent organizations which activities encompass leadership and entrepreneurship development, media and publishing, Real Estate development, Food value chain, Fashion, educational development, humanitarian and spiritual advancement in Nigeria and around the world. Organizations within the FLED Group exist as extensions of the mandate that God gave to Joseph C. Ibekwe on February 17, 1995 while working as a Journalist with the Daily Times of Nigeria in Lagos: “Go raise the foundations of many generations…”(Isaiah 58:12b).

 

  1. Introduction

1.1 Scope of the this Financial Management Policy

The FLEDGROUP Financial Management describes the accounting policies, systems and procedures to be used by this organization. The Policy covers the input, processing, output, control and distribution of financial data. It has been developed to set out the accounting policies and procedures that will:

  1. a) Ensure that each organization’s books of accounts are prepared to conform to sound accounting principles and practices.
  2. b) Enable the management to obtain accurate and timely financial reports on monthly basis, thereby promoting sound financial management.
  3. c) Ensure correct and accountable use of funds and other resources. The approach used is in line with generally accepted accounting principles and organizations best practice reporting requirements.

The main purpose of the Policy is:

  1. a) To assist in the maintenance of controls.
  2. b) To provide a training and monitoring resource.
  3. c) To be used as a reference document by the staff, management, auditors and other stakeholders.

The procedures have the following objectives:-

  1. a) To enhance completeness and accuracy of the data posted from source documents (say invoices, payments receipts, journal and cashbook) to the computerized system.
  2. b) To provide accurate and reliable reports to enable management to perform effective control over the operations of the organization.
  3. c) To detail the operation and administration procedures for input, processing, output and distribution of data to ensure security of data and documents.

The Policy has been written for use as follows:

  1. a) As a means of reference to management, supervisors, new and existing accountants staff, auditors, and as the basis of training staff, and ensuring that appropriate controls are in place.
  2. b) As a clearly defined list of the tasks to be carried out by each individual
  3. c) As a timetable for processing transactions and producing reports
  4. d) As a guide to evaluators and any monitoring consultants, who may wish to review the progress of the individual organizations in the FLEDGROUP.
  5. Accounting Policies & Procedures

2.1 Basis of Accounting

  1. a) Each organization shall prepare its accounts on the basis of historical basis of accounting but assets shall be re-valued from their historic cost to reflect current values as necessary
  2. b) The organization shall apply accrual based accounting method. Revenue and grants/donations shall be recorded in the accounting period it is received and expenses recognized when incurred. Loan and Grant revenue is recognized when received. Other revenues are recognized in accordance with the accruals concept.
  3. c) Grants and donations if any shall be recorded separately from operational activities. They will be shown “below” the operating line on the Income Statement, together with non-operating income and expenses and taxes. When transferred to the Balance Sheet, they will not be included in the Retained Earnings from operations, but in Contributed Capital (or Donated Equity).
  4. d) In-kind contributions must be recognized through journal adjustments that are supported by appropriate and objective documentation (e.g. agreements, formal letters or memos, Memorandum of Understanding).

2.2 Maintaining Accounting Trail

Every transaction would need to be traced back and forth since the account books are maintained in a set pattern.

The trail is as follows:

Expense—–Cash memo——voucher——cash book——ledger——trail balance——income and expenditure statement, balance sheet

Hand in hand with an accounting trail, we can trace what we can call as a programmatic trail.

Programme plan—–Activity to be performed—–Authorization from the programme head for the expense related to the activity—–Perform the activity—-Maintain the relevant program records

The accounting trail is important as it helps to check/counter-check expenditure incurred/ activities done and thus helps in maintaining a transparent system.”

  1. Cash Handling

3.1 Cash Account and Transactions

Cash transactions are to be resorted only for petty expenses and when /where banking facilities are not available. As per Income Tax Rules, no claim exceeding N20, 000 should be settled through cash payments. These should invariably be by account payee cheques only. As a matter of procedure and control, the attempt should be to minimize the number of cash transactions.

3.2 Daily Cash Balance

The denomination of the closing balance of the cash should be entered below this and signed by the Accountant. This register has to be maintained from the beginning of the financial year. A fresh register has to be started at the beginning of every financial year. Maximum and minimum cash limits have been fixed as: maximum N 150, 000 and minimum N 30, 000.

3.3 Withdrawal of Cash from Bank

  1. a) The Cash Withdrawal Form/Money Indent to be filled up and signed by the staff handling cash.
  2. b) The cash balance available and the estimated expenses would need to be computed.
  3. c) The authorized persons must verify the requirement before signing the cheque for withdrawal of cash.
  4. d) The signature of the person presenting the cheque and receiving the cash should be attested on the back side of the cheque by one of the authorized signatories.
  5. e) A Cash Receipt (Contra) voucher to be prepared and accounted for by the accountant on the same day.
  6. f) The Cash Account (Manual) to be updated for receipt of the Cash.

3.4 Cash Payments

  1. a) Cash payments will be made only after preparing the Payment voucher.
  2. b) All vouchers should be pre-printed with machine made serial numbers
  3. c) The Voucher has to be approved by the competent authority before payment (as per the requirement of individual projects)
  4. d) The Payee must sign the voucher for having received the payment.
  5. e) In case the competent person is not present, the voucher must be verified/approved by any other person standing-in for the person per before release of the payment.
  6. f) As per Income Tax Rules, no cash payment of more than N20, 000 is permitted.
  7. g) All cash payments above N20, 000 should be receipted with a revenue stamp as per the provisions of the Stamp Act of the Federal Republic of Nigeria.
  8. h) The number of cash payments has to be reduced by converting settlements through cheque payments.

3.4 Cash Verification

  1. a) The competent authority should physically verify the cash balance occasionally and compulsorily at the end of the month.
  2. b) The Cash Account record should be signed by the person handling the cash and the person in charge of finance as and when the physical verification of cash is carried out.
  3. c) Any discrepancy noticed during the physical verification should be recorded and reported in writing to the person concerned immediately.

3.5 Controls to be exercised

  1. a) Third parties should not be allowed access to the accountant or the safe. Cash should be paid to them in the front office.
  2. b) Cash is handled by only one designated person who is responsible for it.
  3. c) A fixed period of time has to be fixed for cash disbursements. Only emergency payments can be released during other times.
  4. d) Maximum and minimum cash limits to be strictly observed.
  5. e) Accounting of cash receipts/payments is done on a daily basis.

3.6 Petty Cash

  1. a) Petty cash shall be maintained on an imprest basis. At any given time, the cash and receipts in the cash box shall total the imprest level. The level shall be maintained at N100, 000.
  2. b) Only the accountant will handle petty cash. Actual cash will be spot-checked and verified by the supervisor/finance manager at least once per week. The staff person in charge of the fund will reimburse for any discrepancies.
  3. c) All requests for petty cash must be signed by an authorized supervisor/finance manager on a pre-numbered voucher.
  4. d) A cheque to replenish the fund shall be issued when the fund is low, and at the end of every month.
  5. e) The cash and vouchers shall be kept in locked box or safe.”
  6. Procedures for Salaries and Advances

4.1 Salaries

The following is the procedure on salaries:-

  1. a) All permanent employees shall be issued with appointment letters signed by the organization head and employee-signifying acceptance of the terms and conditions set forth thereto. The appointment letter shall contain the initial salary, responsibilities, duties and the general terms and conditions.
  2. b) Subsequent changes in salary, responsibilities, duties, terms or conditions of employment shall be communicated to the employee in writing.
  3. c) A personal file shall be opened for every employee. Copies of job application letters, Appointment letters and any other correspondence between employer and the employee shall be kept in this file.
  4. d) Salaries shall be paid monthly in arrears. A salaries schedule showing the gross pay, advances, deductions and net pay shall be prepared by the Accountant, checked and verified by the Finance manager/HR manager and approved by the organization head prior to the preparation of payment vouchers and the cheque.
  5. e) A personal data card shall be opened for each member of staff. Salaries shall be paid by cheque through the respective bank accounts.
  6. f) Employees shall be issued with a pay slip every month, which will show the computation of his/her net salary.
  7. g) Signing the payment vouchers for the net pay, and the monthly transfer sheets where applicable shall evidence authorization of salary payments.

4.2 Salary Advances to Staff

Staff advances shall be given upon request in accordance with regulations stipulated in the personnel policies and procedures manual (by complete, signed and authorized Staff Advance Authorization Form, {SAAF}). An Advances ledger account should be opened and reconciled at every month end. However, all advances should be approved subject to the availability of funds.

4.3 Pending Advances

A statement of funds lying with outsiders and staff should be recorded at the end of every month-end. It is necessary to review it on a monthly basis to identify whether any deposits/advances are lying unadjusted or overdue for settlement. While it is possible that the actual date of payments and the purpose of which the deposit/advance was given gets obliterated by passage of time, this report will regularly give details of such funds lying elsewhere.

4.4 Travel Expenses

Travel expenses incurred by staff or any other authorized person shall be reimbursed according to the regulations set out in the Human Resource Policies and Procedures Manual.

4.5 Travel Advances to Staff

Travel advances shall be granted in accordance with the above mentioned regulations. A separate staff debtor account shall be opened for each advance granted. Any advances not accounted for within two weeks shall be recovered from the salary of the employee concerned without prior reference to the employee, except the travel assignment upon which the advance is made exceeds two weeks.

  1. Operating Bank Accounts

5.1 Bank Account

General and Project Accounts shall be opened only in a nationally recognized bank or any other bank authorized by the Central Bank of Nigeria. Necessary authorization to open any bank account or alter its manner of operation would need to be got in writing from the necessary authority. A separate bank account can be opened depending upon the project need.

5.2 Authorized Signatories

  1. a) Every cheque/instrument is signed by at least two signatories, except when such was not indicated in the Bank’s mandate card.
  2. b) A staff that has access to bank account and cash account may not be entitled to be an authorized signatory.

5.3 Authority to Sign

The authority to sign cheques should lie with selected executive members of Organization. The bank is authorized to undertake any written instructions, signed by two of the signatories, for transacting any financial business from time to time.

5.4 Closing of Bank Accounts

Any bank account not required to be operated must be closed immediately. The Finance/Accounts person has to take the matter with the Competent Authority and procure in writing by obtaining necessary resolution. When it is decided to close a bank account, the following actions should be completed:

  1. a) Transfer balance in the account (leaving the minimum amount required) to the other bank account.
  2. b) Surrender all the cheque leaves to the bank under a receipt.
  3. c) After receipt of the resolution, deliver it to the bank under receipt and transfer the balance to another account.
  4. d) Confirm closure of the bank account and transfer of balance to the competent authority in the Organization.
  5. Bank Transaction

6.1 Bank Receipts

  1. a) All receipts are to be acknowledged by issuing an official receipt. The date of receipt, its accounting and the date of deposit of the cheque/draft to the bank account should be the same. The relaxation can be only in view of banking hours or bank holidays.
  2. b) The bank deposit slip should be attached with the Receipt Voucher.
  3. c) No receipt should be issued on the last day of the month if the instrument cannot be deposited with the bank on the same day.

6.2 Bank Payments

  1. a) Payment Voucher has to be prepared before preparing any cheque.
  2. b) Cheque should not be prepared, for whatever reason, if sufficient balance is not available with bank.
  3. c) All Vouchers have to be verified and approved before payment is released.
  4. d) Payment has to be made only against original bills and claims. Photocopy of bill or claim should not be entertained.
  5. e) All supporting documents should be attached with the Payment Voucher and filed according to serial number.
  6. f) Cheques should be written legibly and doubly ensure that the amount in words and figures are the same.
  7. g) All cheques have to be crossed.
  8. h) Post-dated cheques are not to be issued.
  9. i) All cheques are stamped or Name of Organization imprinted on it

6.3 Controls to be exercised

  1. a) All letters/instructions to the bank should be signed by the authorized signatories only.
  2. b) Cheques in advance or in blank should never be signed.
  3. c) Un-cashed cheques should be cancelled within a reasonable period.
  4. d) Specimen signatures should not be left unsupervised.
  5. e) Cheque books should always be kept under lock and key. Only authorized persons should be allowed to handle them.
  6. f) Using a carbon (black side up) under the cheque will leave an impression on the reverse of the check making it difficult to alter.
  7. g) A receipt after payment by cheque should be insisted.
  8. h) Bank reconciliation statement has to be done on a monthly basis.

6.4 Bank Reconciliation Statement

This has to be done every month to ensure the balances as per the bankbook and the passbook tally. Following the reconciliation, make sure that entries are passed (if any) for bank charges, interest received etc, in the books immediately.

  1. Invoice Validation

7.1 Essentials of a Voucher

  1. a) Project name– in order to identify that the voucher belongs to a particular project, the project name needs to be stamped / marked on the voucher.
  2. b) Voucher number– the voucher should be numbered and these voucher numbers should be pre-printed. The voucher book should be officially issued to the person responsible for preparation of vouchers. Any vouchers wrongly written should be marked `CANCELLED’ across the face of the voucher and left in the book itself. Hence, either the vouchers would have been used and taken into the cash book or be left as cancelled or accounted for as balance remaining. This is a good practice in accounting and can be introduced over a period of time.
  3. c) Date and the serial number of the voucher used must maintained.
  4. d) Classification– The cost centers and line items are clearly specified in the proposal. On the basis of the nature of expenses, it is verified that the expense is correctly classified into the various line items as appearing in the proposal.
  5. e) Narration– there should be a detailed narration in support of the classification showing the description of the transactions.
  6. f) Amount– it is verified that the amount on the voucher is equal to the amount reflected by the supporting documents, or matches any adjustments effected (e.g.: advance payments adjusted)
  7. g) Supporting documents– these are in the form of original bills, which are the real proof of transactions based on which payment is affected. The classification of the expense is based on the nature of expense reflected by these documents and the amount on the voucher should be the amount reflected by these documents.
  8. h) Signature of the person preparing the voucher
  9. i) Signature of the person authorizing payment (To verify with the delegation of powers of each member authorized within the organization to approve payments)
  10. j) Signature of the person receiving payment
  11. k) Defacing of vouchers and supporting documents by a `PAID’ stamp, subsequent to payment to avoid duplication of payments, and providing reference numbers of vouchers and check number if relevant.

7.2 Checks to be done before passing a voucher for payment

  1. a) Whether required supporting documents are present
  2. b) Checking the supporting document.
  3. c) Payment should be made only against a valid invoice in original.
  4. d) Approval by concerned person & authorized signatory.
  5. e) Verification of accuracy in accordance with the order/letter/other documents if any.
  6. f) Verification of numerical accuracy
  7. g) Checking of advance payments made if any or details of part payments made if any.
  8. h) Making sure that payment has not been made twice for e.g., by marking all extra copies of bills as “extra copies” and by marking all paid vouchers as paid .
  9. i) Ensure that payments are made on time.
  10. j) All major payments should be made by cheques. Payment by cash should be restricted to minor purchases and where inevitable.
  11. k) It should be ensured that the vouchers are not overwritten. In cases where it is necessary to correct the figures, the figures originally written should be scored out and the new figures entered. The person preparing the vouchers as well as authorizing payment should then initial the corrections made.

7.3 Supporting document for vouchers

  1. a) All bills should be in original. Payment should not be made against a quotation, Proforma bill, copy of a bill or a fixed bill.
  2. b) All supporting documents should be authorized by the person initiating the payment.
  3. c) It is the responsibility of each person who is responsible for buying goods/services in the project office to check each bill for its validity.e., check that the description of items, number of items, cost per unit and total cost, date of the bill and name of payee (i.e. name of project) are accurate. Payments should be made only after checking these details.
  4. d) Any mistake/discrepancy should be pointed out to supplier/shop keeper before payment and if an alteration is necessary, the supplier/shop keeper should make the change right then and put his/her initials and date. If this results in a change in any of the amounts on the bill it is particularly important that supplier/shop keeper clearly writes himself on the bill the payment received in words. The management reserves the right to accept such altered bills or not. A better option would be to obtain a fresh bill if possible.
  5. e) No other alteration in the bill by project staff is normally permissible. If at all an alternate is unavoidable e.g., a mistake in the date by supplier which was not corrected such a bill should be brought to the attention of Head of the project who should change it and initial it and a note should be put on the bill why alteration was necessary. The management reserves the right to accept such bills or not.
  6. f) Invoices should only be in the name of the organization.

Supporting documents for invoice validation

7.4 Checking Output

  1. a) The input of all invoices should be checked for completeness and accuracy. The purchase journal report will be generated and this will enable these checks to be carried out.
  2. b) The Accountant must check the invoices posted against the Purchase Journal Report and ensure that the general ledger allocations and other invoice details are correct. Where the accountant identifies that an error has been made, the error on the listing should be circled and the correction initiated and initialed.

7.5 Approval of Invoices

  1. a) The finance/accounts manager prior to processing should approve all invoices.
  2. b) The Accountant must ensure that all invoices have been authorized by head of the organization/CEO/Project Director and head of department. A week time will be allowed for approval.
  3. c) The head of the relevant department must ensure that the invoice is sent to the Accountant within a week of receipt of the invoice. Once the invoice is approved it is sent to the Accountant. If the finance manager is not satisfied with the invoice and cannot approve it for payment, it should be regarded as a disputed invoice.

At the end of the month the Accountant should agree the balance on the control account to the supplier’s listing. If there is any difference, reconciliation should be prepared. The Accountant must also ensure that a monthly reconciliation is done between the General ledger balance and the supplier’s statement of account balance. The reconciliation has to be prepared and reviewed on a monthly basis and the file maintained by the Accountant.”

  1. Maintaining Cash Book

A cashbook is a primary book of entry that is prepared after a voucher for a particular transaction. The cash book records all transactions in which cash /bank receipts are involved.

a) A double column cashbook that can act as a bankbook or a single column cashbook (in case a bank book is maintained separately) has to be maintained.

b) No cutting or alterations should be made in the cashbook. Correction fluid should also not be used. Any mistake should be corrected by passing a rectification entry.

c) Cashbooks have to be written regularly (as and when a transaction takes place). All cash balances should be inked up regularly.

d) The Cashbook has to be tallied, checked and signed by the competent authority or any other appropriate authority every month.

e) Cashbooks should always remain at the office.

Account Books and Documents to be maintained

a) Cash Payment/Receipt Vouchers & Book

b) Bank Payment/Receipt Vouchers & Book

c) Summary/Daily Petty Cash Book

d) Journal Vouchers and Journal

e) General Ledger

f) Fixed Assets Register

g) Contract/Registration Documents

h) Attendance Register

i) Budget Copies of various grants

j) Utilization Certificates

k) FIRS and other relevant Registration papers

l) Copies of Consultancy agreements

m) Capital assets approvals

n) File of original bills of assets purchased

o) Copies of all Contracts and agreements.

p) Stationery Register

q) File containing Bank Mandate and authorized signatories.

r) Quotation files for all purchases

s) Advance Payment Register (Advance to third parties & Staff Advances)

t) Cheque issue registers

u) Cancelled cheque register

v) Donation receipt issue register

Receipts and Payment Account

This is like a summary of the cash and bank book and starts and ends with the cash and bank balances. It differs from the income and expenditure statement in that the income and expenditure statement does not show details of loans, sale of assets, recovery of staff advances etc. At the end of every quarter, a receipts and payments account is prepared.

10.1 Preparation of the Final Accounts

Final accounts include a balance sheet and income and expenditure account and a receipts and payments account would need to drawn up at the end of the year.”

  1. Financial Planning & Budgeting

11.1 Budgets & Approvals

It is necessary that every activity taken up by the organization must be interpreted in financial terms and approval got from the concerned competent authority. Such interpretation takes the form of budgets detailing each and every components of the activity so that a clear evaluation of the total activity and the components thereof can be made before approval. Such budgets normally become necessary, for the following activities:

a) Meetings & conferences

b) Special events

c) Remuneration of Staff & Consultants

d) Capacity Building & other Training Programs

e) Office Running Expenses

f) Promotional events

g) Travel

However, most of the times the expenses incurred on these activities are part of our programmes budget and specific grants are allocated for such expenses, and would require only a simple sanction. It is therefore necessary that the budget for such activities is prepared at the time of preparation of the plan itself.

The process to be followed is

a) Budget for each activity to be prepared giving break up of sub-activities and related costs.

b) The budget has to be verified and certified by the finance/accounts manager to ensure that the costs are realistic as compared to the activities, and the budget captures all the required costs for such activities only.

c) The necessary approval of the budget for incorporation into the Plan.

Wherever there are procurement of supplies and services for such activities, the formalities with regard to multiple quotations, evaluations, etc. have to be followed.

11.2 Budget Management

a) A Budget is an estimate of the amount of money to be received and to be spent for a specified purpose in a given time.

b) Budgets set a framework for reporting and analysis.

c) Budgeting never stands completely alone, but rather flows out of the managerial process of setting objectives and strategies and of building plans. It is especially and intimately related to financial planning.

d) While accounting, separate sub-codes to be created for every activity under the main grant code, so that the utilization of the budget can be monitored activity-wise.

11.3 While Planning the Financials

a) The whole team needs to be involved in budgeting process.

b) Objectives of the programme along with activity plans must be completed before starting the budgeting process.

c) Changes in strategies for the forthcoming year based on the past experience have to be unanimously decided by the team and the budget should be accordingly formulated.

d) List out the resources required to achieve these activities and cost them.

e) All line items in the budget must flow from planned activities.

f) Budget should be as detailed as possible with justifications and break up of costs matched against each activity.

g) When budgeting for subsequent years/phase, cost increases due to inflation, exchange rates etc would need to be kept in mind.

h) All expenses have to be reviewed against the budget on a monthly basis.

i) The project management shall verify the quarterly reports against the budget, analyze causes for variance and take appropriate action.

Costs to be included in a Budget

Operational Costs: Operational costs include those expenses that have to be met for implementing activities for a project or an organization. These are directly billed to the donor agency because they have a direct impact on the beneficiary community. Activities such as organizing a village meeting, conducting a training workshop, running an awareness campaign involve certain expenses. These expenses are listed under the Operational Costs in a budget.

Staff costs: Staff costs refer to the expenses towards paying salaries and consultancy fee to the staff of the organization. Staff costs include expenses right from the recruitment of the staff (interview, orientation etc) to their salaries. Professionally speaking, it is important to mention how much time a particular staff will provide for the project and his/her salary has to be calculated accordingly. For example, the head of organization may be able to give only 25% of the time to a particular project for which fund are being requested and budgeted. So the salary will also be fixed towards this time only.

Core Costs: Core costs are also costs incurred towards the operational expenses of the organization. Costs here can include staff meetings, stationary and other office maintenance expenses. In some cases, the expenses towards hiring a receptionist or caretaker who is not directly contributing to the project can be listed here.

Capital Costs: These include expenses for buying computers, office furniture, vehicles, office building etc.

When developing a budget for a project or an organization, the exercise involves going back and forth from your activities to your budget and from your budget to your activities. This process will continue till you have refined it and gained confidence in the entire proposal.

When conceiving a project, you also decide upon what kind of activities have to be implemented. Or if you are planning the budget for your NGO, you need to list out activities that will be carried out for the coming year.

Have an intense discussion with your team about the costs involved in implementing various project activities. What kind of manpower and material support is required for these activities?

Take some flip charts and on each of it, write down a project activity. Discuss with your team for the inputs required in delivering these activities.

Estimate the realistic costs for these inputs. Whether it is to cover expenses of the staff persons involved in the project activity or buying some material or paying for travel, all these can be written down on the flip chart for each activity.

In an Excel sheet, you can then start mentioning these activities and the proposed costs and calculate the total expenses.

The Finance Officer can advise on the inflation costs, current prices and any other overheads you are missing.

The Organizational head may include other administrative expenses, if required, salaries and any new purchases.

Definition of Terms

Contingency Amount: Contingency amount refers to the money set aside to cover any unforeseen expenses of the organization or the project. Contingency expenses are required because any organization or a project can face an uncertainty because of which certain costs are incurred. As a standard practice, the contingency amount is usually 10% of the total budget.

Monitoring & Evaluation Costs: Some budget formats seek specific information about costs proposed for monitoring and evaluation of the project.

Overhead Costs: Overhead costs are expenses that are required for running the organization. These expenses may not be directly contributing towards implementing a project but they are still essential to maintain the office and manage the day-to-day affairs of the organization. Usually, these costs should not exceed more than 10% of the total budget.

R&D expenses: R&D or Research and Development expenses refer to those expenses required by the organization or a project to undertake research, assessment and consultation for the intervention. In some projects, it could be just be part of the initial work or in some others; it could remain a continuous activity.

Start-up Costs: Start-up costs relate to the expenses incurred by the organization initially for launching a project or developing the organization. For new projects or organization, activities such as office set-up, staff  recruitment, orientation, pre-feasibility studies etc all fall under the Start-up Costs.

Unit Cost: Unit cost is the cost of a single item or a unit. It could be per day cost of a staff member or a consultant or single cost of a computer machine.

Note: This document is subject to review from time to time to reflect prevailing realities