The ASEAN Secretariat Financial Rules & Procedures Manual Version 1.0

The ASEAN Secretariat Financial Rules & Procedures Manual Version 1.0

FINANCIAL RULES & PROCEDURES

June 2005

The ASEAN Secretariat (ASEC)

70 A Jalan Sisingamangaraja

Jakarta 12110,

INDONESIA

Ten Nations One Community

2

The ASEAN Secretariat AFRP - June 2005-final-Read Only Page

Financial Rules and Procedures

CONTENTS

Introduction

Chapters

1.  Budgeting

2.  Financial Controls

3.  Receipts and Payments

4.  Procurement and Acquisitions

5.  Asset Management

6.  Accounting System and Annual Audit

7.  Special Interest Account

8.  ASEAN Secretariat Capability Enhancement Fund

9.  Management of Funds Held in Trust, including Bilateral and Multilateral Funds

Annexes

A. ASEAN Secretariat (ASEC) Table of Authority

B. Procedures for Recording of Receipts and Payments

C. Terms and Conditions for ASEAN Secretariat Staff Attending External Training/Courses

Introduction

The ASEAN Secretariat Financial Rules and Procedures (AFRP) Manual is an integrated document containing all applicable financial rules and procedures necessary for an efficient and transparent financial management system at the ASEAN Secretariat (ASEC), with the appropriate internal controls. The AFRP also covers regulations and practices not addressed in other ASEC documents.

The AFRP has been approved by the ASEAN Ministerial Meeting (AMM) and ASEAN Standing Committee (ASC). The AFRP should be used by ASEAN officials and the staff of ASEC and other ASEAN entities in the conduct of their activities. Where activities are not covered by the AFRP, the Secretary-General (SG) of ASEAN may determine specific rules and procedures to cover such activities; such rules and procedures shall be ratified by AMM upon the recommendation of ASC and become an integral part of the AFRP.

The manual consists of a number of chapters, each covering a specific topic. Sub-headings and titles have been included on the left of each section to facilitate easy reference.

Rule 1:
Definition /

CHAPTER 1: BUDGETING

Budgeting is the process of identifying revenues and expenditures based on a set of operational plans over a stated timeframe. The budget should contain information about the categories of proposed expenditures, the purpose for which they are made, and the proposed means of financing them.
Rule 2:
Budget Coverage / The annual budget of the ASEAN Secretariat (ASEC) shall cover a period known as the financial/fiscal year (FY) as defined in Rule 7, Chapter 6.
Rule 3:
Budget Preparation and Submission
Rule 3:
Budget Preparation and Submission (Continued) / The Secretary-General (SG) shall prepare the budget proposal and submit it to the ASEAN Budget Committee (ABC) for evaluation, the ASEAN Standing Committee (ASC) for endorsement and the ASEAN Ministerial Meeting (AMM) for approval. The submission shall include the justifications and supporting documents in a format deemed appropriate by the ABC.
The preparation of the budget for the subsequent FY shall start at the beginning of January and be endorsed by the ASC by the end of May of the current FY.
The SG shall issue a Budget Circular to all bureau/unit heads containing the following guidelines:
a.  Policies set/agreed upon by the AMM.
b.  Overall strategies for achievement of policy objectives.
c.  Programmes and projects approved for implementation by the ASEC.
d.  Budget ceilings in terms of funds, personnel and other resources.
e.  Timelines for submission of budget proposals.
The Head of Finance Unit (FIN) shall provide a standard presentation format to guide the bureaus/units in their budget preparations as an attachment to the Circular.
Bureau/unit heads shall prepare their respective bureau/unit budget estimates, providing the rationale for programmes and projects and justifications for financial, personnel and other requirements. Key deliverables for each programme or project in terms of quality, quantity, costs and benefits shall also be presented.
The Head of FIN shall consolidate all bureau/unit budget proposals and submit them to the ASEC Executive Committee (ExCom) by the end of March.
The ExCoM shall evaluate all bureau/unit budget proposals and finalise the ASEC budget for submission to the ABC by 15 April.
Rule 4:
Currency of Denomination and Official Indonesian Rupiah-United States Dollar (IDR-USD) Exchange Rate / Budget estimates shall be stated in terms of United States Dollars (USDs). Projected expenditures in the Indonesian Rupiah (IDR) shall be stated in USD. The official IDR-USD exchange rate used in the ASEC budget and financial reporting shall be the rate used by the Government of Indonesia in the formulation of its State Budget.
Rule 5:
Expenditure Categories / The estimated expenditures shall be broken down into four (4) separate headings:
a.  Salaries and Allowances of Openly Recruited Staff (ORS).
b.  Salaries and Allowances of Locally Recruited Staff (LRS).
c.  Other Operating Expenditures (OOE).
d.  Capital Expenditures (CE).
Rule 6:
Supplementary Budget / Where necessary, the SG may at his/her discretion prepare a supplementary budget for a given FY for the consideration of the ABC, the endorsement of the ASC and the approval of the AMM. The supplementary budget shall include a full justification of the need for additional resources arising from new, previously unbudgeted, programmes, projects and other contingent liabilities that have arisen during the FY.
Rule 7:
Ensuring the Continuity of ASEC Operations
/ The SG shall have the authority to approve expenditures to ensure smooth and uninterrupted operations of the ASEC in the interval between the end of a FY and the approval of the budget proposal for the next FY by the AMM. Such monthly expenditures shall not exceed the average monthly outlay of the ASEC regular budget of the preceding FY.
Rule 1:
Purpose /

CHAPTER 2: FINANCIAL CONTROLS

Financial controls are intended to:
a.  establish the accountability of the ASEAN Secretariat (ASEC)’s staff members who are charged with the responsibility of managing programmes and projects;
b.  ensure that resources are used for the purposes intended by the ASEAN Ministerial Meeting (AMM) in amounts not exceeding the appropriations approved;
c.  ensure the proper, efficient and effective management of resources;
d.  safeguard the assets of the ASEC;
e.  ensure the timeliness, accuracy and reliability of book-keeping and financial reporting for effective management decision-making; and
f.  ensure compliance with applicable resolutions, regulations, directives and formulated policies.
Rule 2:
Responsibility / The Secretary-General (SG) is responsible for establishing and maintaining financial controls to ensure:
a.  effective and efficient management of the ASEC’s financial operations;
b.  full disclosure of the financial position and results of the operations of the ASEC;
c.  consistency in budgeting and accounting classifications;
d.  accountability for all funds and assets of the ASEC; and
e.  preparation, execution and control of the ASEC budget.
Rule 3:
Expenditure Control
and Virements / The ASEC’s expenditures shall not exceed the provisions of the budget as approved by the AMM. However, the SG is authorised to approve virements of up to 15% in respect of each item of recurrent expenditure from savings obtained from other provisions, provided that the total approved budget is not exceeded. Virements above 15% shall be made with the written approval of the ASEAN Standing Committee (ASC).
Rule 4:
Approving Authority / Financial transactions shall be approved in accordance with the Table of Authority (TOA, Annex A).
Rule 5:
Certification and Fund Availability / The Head of Finance Unit (FIN) shall certify the validity of all payment vouchers and the availability of funds before payment is made. The SG may delegate this authority to another officer in the absence of the above.
Rule 6:
Payment Modes / Payments shall normally be made by cash or via bank transfers. However, the SG may allow exceptions, where appropriate.
Rule 7:
Foreign Currency / All transactions in foreign currencies shall be converted into United States Dollars (USDs) at the official exchange rate agreed upon by the ASEAN Budget Committee (ABC) at the beginning of the FY. Profits and losses arising from such transactions shall be recorded in the respective ASEC accounts.
Rule 8:
Reporting / The Head of FIN shall keep the SG informed of the results of the operations and financial position of the ASEC at all times.
Rule 9:
Losses
Rule 9:
Losses (Continued) / Losses of office funds, documents, equipment and property must be reported immediately to the SG by the staff member(s) concerned. The report shall be in the form of an affidavit and contain:
a.  Place where the loss occurred.
b.  Date and time of the loss as far as can be ascertained.
c.  Date, time and manner of discovery of the loss.
d.  Particulars of items lost, including their original and estimated current value.
e.  Any other relevant information.
The SG shall include details of such losses, including, where appropriate, the results of investigations, in his/her annual report to the ASEAN Audit Committee (AAC).
Rule 10:
Accountability
For Losses / Where a staff member is determined to be responsible for a loss, he/she shall fully reimburse the ASEC. Negligence shall not be an excuse for loss. Reimbursement may be made in kind, where appropriate, or through deductions from the monthly salary of the staff member concerned at an amount to be determined by the SG.
NegligenceNe
Rule 11:
Criminal Offences / Where criminal intent is suspected, the SG shall report the matter to the police and, if necessary, file the appropriate charges in a court of justice.

Annex A: ASEAN Secretariat (ASEC) Table of Authority

1. Payroll and Employee-Related Payments

Tasks/Types of Payments / Designation/Title of ASEC Staff / Ceiling
Preparation of Payroll / Finance Officer / As Per Budget
Verification of Payroll / Finance Supervisor / As Per Budget
Approval of Payroll / Head of Finance Unit (FIN) / As Per Budget
Payment of Salaries and Allowances / Head of FIN and Secretary-General (SG)/Deputy Secretary-General (DSG) / As Per Budget
Approval of Travel Advance Settlements / Head of FIN / As Per Budget
Approval of Employee Claims (including Housing, Educational, Medical, Transport, Overtime, Etc.) / Head of FIN / As Per Budget
Payment of Employee Claims and Allowances / Head of FIN and SG/DSG/Officer-In-Charge (OIC) / As Per Budget

2. Purchases

Tasks / Designation/Title of ASEC Staff / Ceiling
Endorsement of Material/Service Requisition Forms (MSRs) / Head of Unit/Bureau / As Per Budget
Verification of MSRs / Head of FIN / As Per Budget
Approval of Miscellaneous Purchases Using MSRs / Head of FIN / Purchases of Up to USD 200 or Equivalent
Approval of Purchase Orders (POs) / SG/Officer Designated by SG. / Purchases of Between USD 201 and USD 2,000
Approval of Quotations / SG/Officer Designated by SG, the Heads of FIN and Administration Unit (ADMIN), and Requesting Unit/Bureau or Their Respective Designated Officers. They shall form the four (4) members of the Quotations Panel (QP). / Purchases Between USD 2,001 and USD 20,000
Approval of Tenders / One (1) Representative Each from Five (5) ASEAN Missions in Jakarta, SG/Officer Designated by SG, and the Heads of FIN and ADMIN. They shall constitute the Tender Committee (TC). / Purchases Above USD 20,000

3. Bank Accounts

Tasks / Designation/Title of ASEC Staff
Authorised Signatories for Cheques
and Other Financial
Instruments / Two authorised signatories are required, one (1) each from Categories A and B.
The category A signatories are the SG, the two (2) DSGs and two (2) most senior Bureau Directors.
The category B signatories are the other Bureau Directors, designated Assistant Directors, and the Heads of FIN and Trust Funds Unit (FUNDS).
Approval of Salary Payments / Head of FIN and SG or one (1) of the DSGs.
Approval of Payment Vouchers / Category A signatory.
Safekeeping of Cheque Books / Finance Officer

4. Petty Cash

Tasks / Designation/Title of ASEC Staff / Ceiling
Payment for Miscellaneous or Recurring Purchases / Head of FIN / Up to USD 10,000 or IDR 15,000,000
Payment of Travel Advances / Head of FIN / Up to USD 10,000 or IDR 15,000,000
Rule 1:
Contributions from Member Countries /

CHAPTER 3: RECEIPTS AND PAYMENTS

Member Countries (MCs) shall remit at least one-half (1/2) of their share of the approved budget for the new financial/fiscal year (FY) by 15 June of that FY.
The balance of their respective contributions shall be settled within one (1) month after the consideration by the ASEAN Standing Committee (ASC) of the Annual Financial Statements of the ASEAN Secretariat (ASEC) for the previous FY.
MCs that are unable to remit their respective contributions within the specified time frame, shall inform the ASEC in writing of their proposed schedule for remittance for that FY by 1 September. The ASEC shall coordinate with these MCs to ensure that their contribution schedules allow for efficient and effective cash flow management.
All contributions shall be acknowledged by Official Receipt (OR), together with a cover letter.
The unexpended balance for a FY shall be deposited into the ASEC Capability Enhancement Fund (ASCEF), the use of which is specified in Chapter 8, Rule 1.
Rule 2:
Other Receipts / An OR shall be prepared in duplicate for each sum received by an authorised Finance Officer. The Finance Officer who prepares the OR shall enter the amount in words as well as in figures, and ensure that the duplicate copy is legible. The OR shall bear the date of the receipt of the money and shall be endorsed by the Head of Finance Unit (FIN).
All ORs shall have pre-printed serial numbers.
A Receipt Register shall be maintained as prescribed in Annex B.
All cash or cheques received shall be deposited in the bank on the day of receipt or on the following day.
Rule 3:
Payments / The FIN shall establish and maintain a Payments Register that records all relevant details of cash, cheques, transfer payments and payment vouchers.
All bills/invoices/claims supporting payment vouchers shall be date-stamped and contain:
a.  date of receipt of the documents;
b.  description of bill/invoice/claim; and
c.  amount of the bill/invoice/claim.
The payment vouchers shall be the basis of all transfers. All payment vouchers shall have pre-printed serial numbers. The date of authorisation of payment shall be recorded in the ASEC financial information system.
Payment vouchers shall contain full details of goods and services supplied to allow proper verification. All supporting documents shall be attached to the respective payment voucher. All payment vouchers shall be certified by the Head of FIN (Chapter 2, Rule 5).