Download HMF Accounting Manual - Halo Medical Foundation

Author
CA 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
2 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
AccoutingManual©HaloMedicalFoundation,India
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)
4 HALOMEDICALFOUNDATION,INDIA
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)
AccoutingManual©HaloMedicalFoundation,India
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 wellequipped 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.
6 HALOMEDICALFOUNDATION,INDIA
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.
2.
3.
4.
5.
Systematize Accounting of the Foundation
Provide clear guidelines for accounting of any transaction
Note down documentation needed for any transaction
Describe Authority Matrix for approval of expenditure
Describe Locations of accounting and responsibility
AccoutingManual©HaloMedicalFoundation,India
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
8 HALOMEDICALFOUNDATION,INDIA
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.
AccoutingManual©HaloMedicalFoundation,India
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 Account Name Account Number
the Bank
Account
Name
State
Trust Account 11507322400
Bank of
India
Halo
Trust
Medical
Foundation
The account supports
regular activities of trusts
such as hospital
income/expenses,
donations and local
project grants.
State
FCRA Account 11507294539
Bank of
India
Halo
FCRA
Medical
Foundation
FCRA
This account supports
foreign grants for
implementaing
international projects and
donations.
State
Corpus
Bank of Account
India
31876105155
Halo
Corpus
Medical
Foundation
Corpus
The account supports
corpus donations for the
trust.
State
Nursing
Bank of Account
India
11507322397
Halo
Nursing
Medical School
Foundation
This account is used for
independenty for nursing
school management.
State
Nursing
Bank of Scholarship
India
Account
31996723129
Halo
Nursing
School
The account is used to
receive scholarship for
nursing students from the
government.
State
Corpus FCRA 11507294539
Bank of Account
India
10 HALOMEDICALFOUNDATION,INDIA
Tally
Purpose
Company
Nursing
School
Halo
Corpus
Medical
Foundation
FCRA
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
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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
Ledgers to be opened
Public Trust Act’s
under each type of
Balance Sheet format Expense Group
and for Income
Expenditure Account For example::
- Main Group à
Administrative –
Expenditure on the
1.
Printing and
Object of the Trust
Stationery
àMedical à Type of
Expenses (such as
2.
Telephone
Salary, Medicines,
Expenses
Administrative)
3.
Computer
Stationery
4.
Various Departments /
Government Aided
program in the
hospital would be cost
centre.
For example:
JananiSurakshaYojana
(JSY).
Internet
Expenses
HMF – Nursing School
As per Bombay
Natural Ledgers as
Public Trust Act’s
per the nature of
Balance Sheet format expenses
and for Income
Expenditure Account
- Main Group à
Expenditure on the
Object of the Trust
àMedical à
Training Expenses
HMF – FCRA Accounts
As per Bombay
As per Budget Heads Cost Centre not
Public Trust Act’s
required.
Balance Sheet format
12 HALOMEDICALFOUNDATION,INDIA
Cost Centre not
required. In the
future, if any
additional course is
started by HMF, then
Courses Name could
be the cost centre.
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
As per Budget
Public Trust Act’s
Subheads
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.
AccoutingManual©HaloMedicalFoundation,India
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).
14 HALOMEDICALFOUNDATION,INDIA
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 Advance given to employees / field workers should be accounted in an
and Settlement
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.
AccoutingManual©HaloMedicalFoundation,India
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 –
Date
Activity
Every 2nd day of the month Review of attendance Register
(3rd if Sunday or any holiday
on 2nd day)
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
Every 5th to 10th day of the
month
Preparation of Bank list and Drawing of cheque for payment
Every 5th to 10th day of the
month
Sending Bank list to Bank and obtaining bank’s acknowledgement
Every 5th to 10th day of the
month
Accounting of Salary expenditure and charging to projects
wherever applicable
Every 7th day of month (or a Payment of profession tax and TDS, if any.
prior day if 7th day is Sunday
or a holiday)
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.
16 HALOMEDICALFOUNDATION,INDIA
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.
2.
3.
Income Tax act for TDS and13 (1) (c) payments
Profession Tax act
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.
2.
3.
MVAT
Service Tax Act
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. AccoutingManual©HaloMedicalFoundation,India