halo medical foundation at post andur, block tuljapur, dist … finance policy.pdf · halo medical...

2 HALOMEDICALFOUNDATION,INDIA

AuthorCA Sharmistha Chiplunkar Additional Contributors Dr. Anand Ahankari, Dr. Shashikant Ahankari, Dr. Kranti Rayamane and Dr. Vijay Gaikwad. Address Halo Medical Foundation At Post Andur, Block Tuljapur, Dist Osmanabad Maharashtra India 413603

Declaration

Please note that the accounting manual is designed by the HMF and subjected to copyrights © of Halo Medical Foundation, India. Please discuss with your project coordinator/HMF manager/Director if you need any help in understanding the manual/policy. HMF reserves all rights to change, alter or redesign any content or portion or the document as a whole without any prior notice. In case of any change, all staff members employed by the HMF at that point of time will be considered in the process. This manual/policy benefits do not apply to past employees or those staff members no longer working with the HMF.

First Print 1st April 2014

AccoutingManual©HaloMedicalFoundation,India

Index

No Contents

1 Background

2 Organization Structure

3 Secretarial Information

4 Purpose of the manual

5 Software and usage

6 Bank Accounts

7 Responsibilities of Account Department

8 Chart of Accounts – Ledger / Cost Centre

9 Documentation before Accounting

10 Accounting of transactions

10.1 Cash / Bank Payment

10.2 Advance to Employees and settlement

10.3 Project Expenditure

10.4 Branch and Division Accounting

10.5 Deposits Given / Deposits Taken

10.6 Grant in Aid

11 Salary Payments

12 Bank Reconciliation

13 Fixed Assets Records

14 Statutory Liabilities

15 Statutory Audit

16 Budget


Reference Documents

The following are the registration and other important documents, original copies of which need to be in Safe Custody of Accounting Incharge. Photocopies of the same documents are attached with the manual.

No Particulars

1 Trust Deed

2 Registration Certificate under Bombay Public Trust Act

3 Registration Certificate under Society’s Registration Act

4 Registration Certificate under Foreign Contribution Regulation Act

5 Registration u/s 12AA of Income Tax Act, 1961

6 Registration u/s 80G of Income Tax Act, 1961

7 Permanent Account Number (PAN)

8 Tax Deduction and Collection Account Number (TAN)

9 Registration for Professional Tax-As an Entity under Maharashtra State Tax on Professional, Trades, Calling on Employments Act,1975

10 Registration for Professional Tax-As Employer under Maharashtra State Tax on Professional, Trades, Calling on Employments Act,1975

11 Shop Act License under Bombay Shops and Establishment Act,1948 (Not Applicable)


Standard Formats

HMF operates with standard format to note expenses which are outlined in the table below. These are subsequently attached with the manual.

No Contents

1 Advance for Expenses (demand note)

2 Travel Claim

3 Expenditure Sheet (need to prepare standard one)

4 Indent / Requisition Form

5 Expense Voucher Format

6 Project Information Sheet (Budget sheet)


1. BACKGROUND

Halo Medical Foundation (HMF) is a non-government organization operating in central India for more than two decades. HMF evolved from "HALO," a health movement initiated in the 1980s by a group of socially aware medical students of Government Medical College based in Aurangabad, India. The Health and Auto Learning Organization (HALO) movement focused on health and development issues of marginalized communities of Maharashtra. After the devastating earthquake of September 1993 in Osmanabad district of Maharashtra, HMF accelerated rural health projects through the village health worker (VHW) model. The VHW is the central core of HMF and has been acknowledged at the national level for designing the ASHA (Accredited Social Health Activist) program in the National Rural Health Mission (NRHM). The twenty-year old organization implemented a variety of programs for marginalized communities, pregnant women, children, government healthcare workers, farmers and young people. HMF practiced equitable holistic healthcare approach in all public health programs implemented by the trust. Subsequently, HMF gathered rich experience while working in health education sector, community awareness initiatives and designed variety of campaigns for public welfare. The trust received sponsorships from North America, Europe, Asia, and is closely working with the State and Central Government authorities the country. HMF is registered as a society under the Society Registration Act of 1860 with the Maharashtra state with Registration No. 316-91, dated 2nd November 1991; and under the Bombay Public Trust Act 1950 with registration number F-2112, at Aurangabad, dated 17th Feb 1992.

The objectives of HALO Foundation stated in its Memorandum of Association are:

1. To create and reorient social awareness in the medical and paramedical profession, especially in younger generation

2. To create and reorient health awareness in the society to promote their health and hygiene

3. To provide medical aid and related services to the society

4. To undertake research and education in the field of medicine

5. To work for the empowerment of women and integrated rural development

Main activities of the trust are mentioned below: 1. Janki Hospital - It is a multispecialty hospital for indoor treatment of patients with a well-

equipped intensive care unit (ICU) and Operation Theatre. This hospital was started in the year 2007 and expanded over a period of time. Janki Hospital has affiliation to various Government Programs to provide benefits to rural population such as Janani Surkasha Yojana (JSY). Hospital also provides diagnostic facilities such as laboratory investigations, X-ray facilities, emergency services, medicine provisions and ambulance services.


2. Nursing School – Trust has begun a Nursing School in the year 2009. The ANM course is approved by the Maharashtra Nursing Council as well as Indian nursing council.

3. Rural Science Centre- Trust runs a science center to provide education and equipment for

laboratory experiments to village based schools in the area. 4. Sponsored Projects – Trust also runs various projects sponsored by the Government, Private

Trusts and Foreign Funding Agencies. In the year 2014, the HMF hospital provides services to nearly 50,000 population, works with 100 grass root workers by involving nearly 200,000 population which includes rural and urban communities.

2. ORGANIZATION STRUCTURE

HMF has individual project coordinators who mainly implement and monitor program activities. For example, a coordinator of the rural science centre will be responsible for the specific project activities and will be monitored directly by the director. Similarly, the anemia control program, women empowerment project, HMF hospital are taken care of by individual coordinators who function directly under the HMF director. HMF’s director also works very closely with account department.

3. PURPOSE

This manual is prepared with a view to

1. Systematize Accounting of the Foundation 2. Provide clear guidelines for accounting of any transaction 3. Note down documentation needed for any transaction 4. Describe Authority Matrix for approval of expenditure 5. Describe Locations of accounting and responsibility


4. SECRETARIAL INFORMATION

Registration No under Bombay Public Trust Act AF 2112 (Aurangabad)

Registration No under Society’s Registration Act MH-316-91 (Aurangabad)

Registration No under Foreign Contribution Regulation Act

083750060

Registration No u/s 12AA of Income Tax Act, 1961

12AA/13-35

Authorization Letter No for approval u/s 80G of Income Tax Act, 1961

80G(5)/14/6/2012-13

Permanent Account Number (PAN) AAATH2836F

Tax Deduction and Collection Account Number (TAN)

NSKH01354D

Registration No for Professional Tax-As an Entity under Maharashtra State Tax on Professional,Trades,Calling on Employments Act,1975

Registration No for Professional Tax-As Employer under Maharashtra State Tax on Professional,Trades,Calling on Employments Act,1975

27885245806P

Shop Act License No under Bombay Shops and Establishment Act,1948

Not applicable


5. SOFTWARE AND USAGE

Halo Medical Foundation uses Tally ERP 9 software for accounting of transactions of trust. Updating the software from time to time would be the responsibility of the accounts team. HMF will maintain accounts at two locations namely Andur and Sholapur (as updated in March 2014). Backup of Accounts will be maintained at Sholapur and will be shared with Andur office every month or during the month, whenever required and necessary. Accounts maintained at Sholapur will be merged with trust accounts at the end of the year for annual budgeting purpose. HMF will maintain following Tally Companies: 1. HMF – Trust Company All Donations, Establishment Expenses, Small Activities / Projects

undertaken to achieve objectives of the trust would be accounted in this tally company. All reimbursements from projects are also accounted in this company.

All project accounts would be maintained under Current Liabilities.

2. HMF – Janki Hospital All receipts from hospital activities viz receipts from patients and receipts from Government Support for various patient treatments.

3. HMF – Nursing School All receipts and expenses related to the nursing school would be recorded in this company.

4. HMF – FCRA Accounts All donations / Project Grants in the form of Foreign Contribution and expenditure from these project grants / donations would be recorded in this company.

5. HMF -Project Account Individual project accounts such as CBHM project is maintained at Solapur Office as a separate tally company. Trust does not have any bank account in Sholapur for these projects. So all accounting would be routed through HMF – Trust A/c and actual bank transactions would be recorded in HMF – Trust Company. Similarly, HMF maintains individual tally companies for Gender Equity Project, Mahil Shakti (Swiss-aid), Trauma Centre Company, Osmanabad CBHM, Sholapur CBHM and Maharashtra Foundation for respective projects.

Cash transactions for these projects would be recorded in Project Tally Company only.


6. BANK ACCOUNTS The trust has the following bank accounts as of 31st March 2014. These accounts would be reflected in tally companies mentioned against the name of the bank account. Name of the Bank

Account Name Account Number Account Name

Tally Company

Purpose

State Bank of India

Trust Account 11507322400 Halo Medical Foundation

Trust The account supports regular activities of trusts such as hospital income/expenses, donations and local project grants.

State Bank of India

FCRA Account 11507294539 Halo Medical Foundation FCRA

FCRA This account supports foreign grants for implementaing international projects and donations.

State Bank of India

Corpus Account

31876105155 Halo Medical Foundation Corpus

Corpus The account supports corpus donations for the trust.

State Bank of India

Nursing Account

11507322397 Halo Medical Foundation

Nursing School

This account is used for independenty for nursing school management.

State Bank of India

Nursing Scholarship Account

31996723129 Halo Nursing School

Nursing School

The account is used to receive scholarship for nursing students from the government.

State Bank of India

Corpus FCRA Account

11507294539 Halo Medical Foundation FCRA Corpus

Corpus The account supports corpus donations from abroad and there is a separate book of accounts in tally.


7. RESPONSIBILITIES of ACCOUNTS DEPARTMENT The responsibilities of the accounts department would include but are not restricted to the following:.

1. Scrutiny of the documents 2. Recording of financial transactions on an accrual (due) basis. 3. Salary processing and disbursement 4. Funds management to facilitate the smooth funds flow and proper investment of funds 5. Financial reporting to the management and director team 6. Financial reporting to outsiders (which may include Utilization Certificate or Statement of

Expenditure) 7. Providing financial information as called for by the statutory authorities 8. Complying with the requirements of Statutory audit, Internal Audit, Financial Audit by the

sponsors 9. Preparation of annual accounts as per the prescribed format and within the prescribed time limit. 10. Payment of Taxes – All the (applicable) taxes are to be paid within the due dates as prescribed by

the law 11. Submission of various tax returns – All the applicable tax returns are to be filed with the

concerned tax authority within the due date as prevailing law 12. Financial record keeping – All the financial records are to be kept neatly and for the prescribed

time as mentioned in the Record Keeping Manual 13. Any other responsibility assigned by the management from time to time


8. CHARTS OF ACCOUNTS

The Chart of Accounts of trust would consist of Groups / Ledgers and Cost Centre. Following Guidelines should be followed while creating Groups / Ledger / Cost Centre. Name of the Tally Company

Groups Ledger Cost Centre

HMF – Trust Company As per Bombay Public Trust Act’s Balance Sheet and Income Expenditure Format

Ledgers to be created under the Groups as per the nature of expenditure

Various activities of the trust would be reflected as cost centre

HMF – Janki Hospital As per Bombay Public Trust Act’s Balance Sheet format and for Income Expenditure Account - Main Group à Expenditure on the Object of the Trust àMedical à Type of Expenses (such as Salary, Medicines, Administrative)

Ledgers to be opened under each type of Expense Group

For example::

Administrative –

1. Printing and Stationery

2. Telephone Expenses

3. Computer Stationery

4. Internet Expenses

Various Departments / Government Aided program in the hospital would be cost centre.

For example:

JananiSurakshaYojana (JSY).

HMF – Nursing School As per Bombay Public Trust Act’s Balance Sheet format and for Income Expenditure Account - Main Group à Expenditure on the Object of the Trust àMedical à Training Expenses

Natural Ledgers as per the nature of expenses

Cost Centre not required. In the future, if any additional course is started by HMF, then Courses Name could be the cost centre.

HMF – FCRA Accounts As per Bombay Public Trust Act’s Balance Sheet format

As per Budget Heads Cost Centre not required.


Name of the Tally Company

Groups Ledger Cost Centre

àMain Group àCurrent Liabilities à Project Grants àGroups based on activities defined in Annual FC Return

HMF - Project Account As per Bombay Public Trust Act’s Balance Sheet format àMain Group à Current Liabilities à Project Grants à Groups based on Project Budget Head

HMF maintains individual ledger and costs centre for Gender Equity Project, Mahil Shakti (Swiss-aid), Trauma Centre, Osmanabad CBHM, Sholapur CBHM and Maharashtra Foundation for respective projects.

As per Budget Subheads

Cost Centre not required.


9. BEFORE ACCOUNTING

Accountant should scrutinize the documents received to ensure:

§ Arithmatic Accuracy § Correct Levy of Applicable Taxes § Proper Authorization § Supporting Documents(such as Quotations, Purchase Order, Material Received Note,

Stock Book Entry Number, Third party invoice, self declaration depending on the nature of transaction).


10. ACCOUNTING OF TRANSACTIONS

Nature of Transaction Precautions / Procedure to be followed

Cash Payment Cash payment beyond Rs.5,000 to be avoided.

In any case, payment beyond Rs.20,000/- should not be made in cash to a single person on a single day.

Cash Memo / Receipt / self declaration voucher should be ensured while making cash payments.

Cash payment to be avoided to regular suppliers.

Cash payment to be made only where cheque payment is not possible.

Bank Payment All cheques drawn should be Account Payee only except for cash withdrawal for expenses.

Generally, bank payment should be routed through party ledger and should not be directly debited to expenses.

Advance to Employees and Settlement

Advance given to employees / field workers should be accounted in an individual’s name and squared off when expenses statement along with supporting documents is submitted by an employee.

Expense statement should mention project name and budget head if the expenditure relates to any specific project.

Project Expenditure Project expenditure should be booked against appropriate budget head as per the details received by an accountant.

Branch and Division Accounting

Any transaction related to other HMF division should be routed through respective division current account (account opened under the group branches and divisions). Sum of balances from all HMF divisions should be zero at each month end.

Deposits Given / Taken Deposits given / taken should be booked under appropriate tally group with separate ledger name (group wherever necessary). A separate file of all original receipts for Deposits Given should be maintained in Accounts Office.

Copies of correspondence should be available in accounts office when deposit is taken from third party. Third party should be given proper receipt whenever any deposit is accepted by HMF. Deposit should be refunded on submission of original receipt only. In case, Original Deposit Receipt is not available for any reason, affidavit should be taken from the depositor.

Grant in Aid All grants received for projects should be separately recorded mentioning the project name in the ledger.


11. SALARY PAYMENTS

Attendance register is kept at the administration office. Accountant should verify present days at the end of the month and should verify number of paid leaves available and then process the salary payments. General schedule for payment of salaries would be as under –

12. BANK RECONCILIATION • Bank Reconciliation statement (BRS) should be prepared monthly using Tally software

and kept on record along with Bank Statement.

• This activity should be done for all existing Bank Accounts.

• BRS should be printed from Tally Software and kept along with Bank Statement (even if there are no transactions during the month).

• Monthly due date for completing this activity would be done on the 10th of every month,

or the 11th, if the 10th is a holiday.

Date Activity

Every 2nd day of the month (3rd if Sunday or any holiday on 2nd day)

Review of attendance Register

Every 2nd day of the month Review of advance given not settled as per decided norms and concerned person will be notified immediately to submit essentials within 24 hours

Every 5th to 10th day of the month

Salary payable working as per Excel Format


Preparation of Bank list and Drawing of cheque for payment


Sending Bank list to Bank and obtaining bank’s acknowledgement


Accounting of Salary expenditure and charging to projects wherever applicable

Every 7th day of month (or a prior day if 7th day is Sunday or a holiday)

Payment of profession tax and TDS, if any.


13. FIXED ASSESTS RECORDS

All fixed assets owned by the trust should be recorded in a separate fixed assets register. Fixed assets register should be updated yearly. Assets purchased from project grant should be noted separately for identification and actual fixed assets should also be marked / labeled for the sponsor and project name.

14. STATUTORY LIBILITIES

At present the trust has to comply for various provisions of:

1. Income Tax act for TDS and13 (1) (c) payments 2. Profession Tax act 3. FCRA Act, 2010

But trust should also review from time to time if the provisions any of followings laws become applicable to the trust.

1. MVAT 2. Service Tax Act 3. Provident Fund Act

15. STATUTORY AUDIT As per the provision of Bombay Public trust act statutory of the trust is due before 31st July every year. At present, statutory of the trust are V.J. Bembalkar and company Sholapur.

16. BUDGET

Accounts Department needs to prepare / compile the budget for the next financial year and submit it to Charity Commissioner Office before 28th February every year.