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PROCEDURE FOR
MANAGEMENT OFPAC’s FINANCIAL AFFAIRS
INCLUDING CALCULATION OF MEMBERSHIP FEES
Issue5.0
Prepared by: PAC SecretaryDate: 14 October 2016
Endorsed by PAC ExecutiveDate: 25 October 2016
Endorsed by PAC MembersDate: 23 February 2017
Issue Date: 24 February 2017Application Date: Immediate
TABLE OF CONTENT
1INTRODUCTION
2REFERENCES
3BUDGET
4Expenses
5OVERSIGHT AND REPORTING
6SURPLUS
7operation of the pac financial accounts
8CALCULATION OF FEES FOR EXISTING MEMBERS
9CALCULATION OF FEES FOR NEW MEMBERS
10DATE FOR PAYMENT
1INTRODUCTION
This procedure outlines the rules for management of PAC’s financial affairs, including calculation of annual membership fees and reporting requirements. This procedure should ensure that:
- budgets are clear and transparent;
- financial risks are identified and managed; and
- financial activities are documented and transactions recorded.
2REFERENCES
PAC Constitution
PAC-EXEC-001 PAC Memorandum of Understanding
PAC-EXEC-005Structure of PAC
3BUDGET
3.1PAC is intended to be a self-funding cooperation among its Members and to this endits financial viability is a responsibility shared by all Members.
3.2The budgeting process is expected to follow the following timeline.
Timeline for financial year 1 January to 31 December
Who / What / WhenPAC Secretary / Prepare draft budget based on year to date income and expenditure and submit it to the Finance Committee, including the results of the numbers of accreditations as at 30 September. / September
Last Week
Finance Committee / Review and revise the draft budget as required and present it to the Executive Committee for discussion. / October 1st week
Executive Committee / Review and revise draft budget as required and distribute it to the PAC Plenary out-of-session for 30-day comment and ballot. / October
3rd week
PAC Secretary / Collect out-of-session responses from PAC Plenary and prepare proposed adjustments to the Finance Committee. / November
3rd week
Finance Committee / Review and revise the draft budget as required and present it to the Executive Committee for discussion. / November
4th week
Executive Committee / Publish approved budget for the following year 1 Jan to 31 Dec. / December
3.3The budget is to be prepared using the current version ofPAC Budget Spreadsheetbudget spreadsheet.
3.4The budget shall be prepared with detailed notes explaining each single item of expenditure in excess of $2,000.
3.5With the PAC Plenary’s approval of this procedure, the PAC Plenary authorizes the PAC Executive Committee to commit PAC to unbudgeted expenses not greater than $10,000 in total in any given year.
3.6The Chair of each committee may authorize the PAC Secretary to make payments for expenses incurred within the budget that has been approved for their committee and up to a limit of $500 in excess of that budget in total in any given year.
4Expenses
4.1The PAC Secretary is to be provided with a PAC credit card. The PAC credit card is to be used by the PAC Secretary to the greatest extent possible to pay for all expenses incurred by the Secretaryon behalf of PAC. The PAC credit card is not to be used for any other purpose.
4.2The Secretariat is to reconcile the PAC credit card statement with the receipts where possible within 10 business days of the date of the statement (or if away from the Secretariat or on leave, within 10 business days of returning to the Secretariat), and present the reconciled statement and receipts by email to a signatory for the PAC bank account with a request to approve reimbursement of the PAC credit card from the PAC operating account.
5OVERSIGHT AND REPORTING
5.1The PAC Secretary shall provide the PAC Financial Committee with appropriate financial records on a quarterly basis, including Income and Expenditure against budget, Balance Sheet and Debtors’ List. The Secretary will report on finances at each Executive Committee meeting.
5.2The quarterly report by the Secretary to the Finance Committee is to be prepared using the PAC Budget Spreadsheet.
5.3The Finance Committee shall have the financial accounts examined on an annual basis by an external auditor. The audited financial accounts shall be sent to the members of the Finance Committee for review in accordance with the terms of reference noted in PAC-EXEC-005.
6SURPLUS
6.1An amount equal to nine (9) months average operating expenses be held in reserve and deposited in an interest-bearing account (see clause 7.1 below).
6.2The reserve amount of funds is to be reviewed quarterly (at each PAC EC meeting) by the PAC Executive Committee to ensure adequate return of interest and shall be reported to the PAC Annual General Meeting.
6.3These funds shall be deposited in an interest-bearing account operated by the PAC Secretary and supervised bythe PAC Chair and Vice Chair.
7operation of the pac financial accounts
7.1PAC shall operate two bank accounts – one for everyday transactions and a separate account with a higher rate of interest for use as an investment account. The Secretariat shall transfer funds between the two accounts as appropriate, to ensure a balance between cash flow and investment at all times.
7.2Both bank accountsshall be established with 2 or 3 signatories – the PAC Secretaryplus one or two signatories from the Executive Committee. Budgeted expenses are to be uploaded by the PAC Secretary with a request for any one of the other two signatories to approve the payment. If the Secretary is absent, the other two nominated signatories can process the transaction.
7.3All budgeted expenditure shall be approved for payment by two of the three signatories on receipt of invoice.
8CALCULATION OF FEES FOR EXISTING MEMBERS
8.1Observer and Corresponding members will pay annual fees at the rates determined by the Plenary for these member categories. Fees for these members shall be subtracted from the total budget before fees for Full and Associate members are calculated on the balance.
8.2The share of the budget approved by the PAC Plenary for each calendar year allocated to each Full member of PAC shall be proportional to the number of points calculated as follows:
8.2.1The economy in which each member operates will be assigned one of three bands, as determined by the latest UN Scale of assessments for the apportionment of the expenses of the United Nations. The bands are:
- Band one - UN budget contribution percentage less than 0.15 - allocated 50 points
- Band two - UN budget contribution percentage between 0.151 and 1.000 - allocated 75 points
- Band three - UN budget contribution percentage more than 1.001 - allocated 100 points
Note:For this purpose, Hong Kong and Chinese Taipei are regarded as in band three.
8.2.2One point shall be allocated for each accreditation issued by the member in the programs covered by the PAC MLA as at 30 September.
8.2.3The number of points for each member will be calculated by adding the points for the size of the economy to those for the number of accreditations.
8.3In order to allow the calculation of the accreditation element it will be necessary for each member to advise the Secretariat no later than mid-October in each year of the number of accreditations it has issued at 30 September. If a member fails to advise of the number of accreditations issued by mid-October, the PAC Chair will decide on the number of accreditations that member will be credited with. The calculations for the year in question will not be amended after invoices for the fees are issued.
8.4The share of the budget approved by the PAC Plenary for each calendar year allocated to each Associate member of PAC shall be calculated as above, with the exception of Associate Members that are non-accreditation body members (e.g. Industry associations, certification body associations etc.). The economic band for these members shall be determined by the geographical location of their Secretariat or headquarters and they shall be allocated one point for each of their members.
9CALCULATION OF FEES FOR NEW MEMBERS
9.1The calculation of fees for a new Full or Associate member joining PAC during a calendar year shall be as follows.
9.2The number of points allocated to the member shall be calculated according to the above rules, and the money value per point in the local currency of the Secretariat, calculated at the time membership fees for continuing members were set, shall be multiplied by the number of points for the new member. The new member shall pay a fee calculated by dividing that figure by 12 and then multiplying by the number of months remaining in the calendar year, including the month of joining.
9.3The calculation of fees for a new Observer or Corresponding member joining PAC during a calendar year shall be calculated by dividing the annual fee by 12 and then multiplying by the number of months remaining in the calendar year, including the month of joining
10DATE FOR PAYMENT
10.1The Secretariat shall, following the approval of the PAC budget, levy all members of PAC for their share, plus transfer costs, to be paid to the Secretariat before 31 March in the year to which the budget relates. Payment shall be made in the local currency of the Secretariat.
10.2Failure by any member to remit their annual feeswithin 3 months may result in that members’ suspension from PAC Membership and MLA as appropriate.
PAC-EXEC-004 Issue 5.0.doc / Date of Issue: 24 February 2017 / Date of Application: 24 February 2017