3. Finance

The finance unit plays an essential role in an emergency. Accountable financial management in an emergency enables effective and timely cash and budget management to allow smooth implementation of programmes. Financial management also ensures that internal controls and procedures for financial management are sufficient to guarantee accountability, and timely accurate management and reporting of expenditure

Checklist

• Ensure the financial structure and staff capacity is adequate to meet emergency demands.
• Ensure internal controls are in place for accountable financial management.
• Manage cash and cash equivalents to ensure safe and accountable control of cash, and ensure cash flow is adequate for operational requirements of the emergency response programme.
• Implement appropriate controls and procedures for cash disbursements, including cash floats, petty cash funds, travel advances and any use of cash facilitators.
• Ensure effective management of contracts and grants, including tracking of funding portfolio, management of cash budgets, compliance with donor regulations, expenditure reporting and internal audit.
• Support budget development and management for emergency response programmes, in particular to ensure that CO recovery policies are applied and donor budgets are accurate.

Checklist

• Ensure that the financial structure is adequate and able to meet emergency demands.
• Comply with applicable internal controls.
• Promote cross-training to ensure staff back-up when necessary.
• Separate duties to avoid any one person having complete control over a transaction.
• Ensure that the core finance structure accounts for the necessary roles.
• Ensure that finance staff understands their roles and responsibilities.

Checklist

• Provide cash and cash equivalents faster than usual.
• Account for all cash.
• Retain documentation for all items of expenditure.
• Adhere to general principles for cash control.
• Implement physical cash limits.
• Prepare accurate cash budgets.
• Calculate cash requests by considering the programme implementation needs, operating costs and replenishment of cash floats.
• Use cash facilitation in situations where CARE cannot open a bank account.
• Limit cash floats for purchases to a maximum of USD5,000.
• Follow standard procedures for cash receipts.
• Refer to the internal control checklist to determine if adequate cash control systems are in place.

Checklist

• Disburse cash/cash equivalents only for valid business purposes upon proper authorisation.
• Adhere to the minimum requirements and general procedures for case disbursements.
• Discourage the use of cash floats at completion of administration set-up.
• Use petty cash only for incidental payments.
• Payments for lodging and other travel expenses must be supported by receipts.

Checklist

• List all fund allocations, grants and contracts available for programming in the Funding Portfolio Matrix.
• Use the Cash Budget Form to prepare all cash budgets.
• Ensure that the CO Finance Department provides the Team Leader and Emergency Managers with summaries for each fund allocation, grant and contract.
• Implement activities, and process transactions in line with the terms and conditions in the contract.
• Ensure that emergency operations receive monitoring, guidance and support from the Country Office/Head Office Finance and Audit Departments.

Checklist

• Give proper attention to budget development preparedness activities.
• Avoid common budget development process traps (see section 7.3 below)
• Ensure that the program team provides project implementation assumptions and oversight to the budget development team.
• Follow the scheduling of the required steps to prepare a budget for submission while remaining flexible.
• Don’t focus only on costing major items when preparing a budget-include auxiliary items in the budget.