ACCOUNTING INFORMATION SYSTEMSA STUDY ON

SAVE THE CHILDREN-USA March-2009

CONDUCTED BYM. Atiqur Rahman (Atik)Student of Business Administration (BBA) Patuakhali Science and Technology UniversityDumki, Patuakhali-8602BANGLADESHE-mail: atik.bdpalo@yahoo.comISD-+88-01712-167606

Patuakhali Science and Technology UniversityDumki, Patuakhali-8602

BANGLADESH

www.pstu.ac.bd

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Save the Children USA

Save the children USA is a leading nonprofit humanitarian relief and development organization working in more than 40 countries throughout the developing world and the United States. Their Mission is to create lasting, positive change in the lives of children in need.The inspiration and vision for save the children came in great part from the international children’s rights movement begun in England in 1919 by Eglantyne Jebb, founder of the British save the children Fund. From this early effort in the hills and hollows of Harlan Country, Kentucky, grew a self help philosophy and practice still at work today in more than 45 countries: providing communities with a hand up, not a handout. This approach-working with families to define and solve the problems their children and communities face and utilizing a board array of strategies to ensure self-sufficiency is the cornerstone of all save the children’s programs, including Jibon-o- Jibika.

Save the children is also a member of the International save the children Alliance, comprising 29 independent, national save the children organizations working in more than 100 countries to ensure the well-being of children around the world.Since its establishment in 1972, the Bangladesh Country office of save the children has been implementing integrated community development programs with a special focus on the poor and disadvantaged population. Today SC programs are spread across the entire country; with programs in health, education, food security that are implemented in collaboration with a wide range of partners including the government, other public and private institutions and community based organizations.

In 2004, SC programs reached a population of over 20 million though different program strategies. SC programs are funded from a variety of sources including private individuals, the United State Agency for International Development (USAID); Gates foundation, the Government of Bangladesh and the Global Fund for Tuberculosis, AIDS and Malaria.

Major activities of Save the Children USA:Improvement of household food production.Establishment of village model farms (VMFs).Training of local technical specialists.Provision of inputs.Community based management of acute respiratory illness (ari), diarrhea and anemia.Growth monitoring and promotion (GMP), demonstrative-feeding sessions (DFS).Support EPI and vitamin a plus campaigns.

Improved quality of maternal and child health care services.Improved sanitation facilities.Water point development/repair.Behavior change and communication.

Improved community emergency response capacity.Rehabilitation of evacuation shelters (Cyclone shelters).Strengthening cyclone preparedness program (CPP) activities.Emergency contingency planning.Skills training for SC, GoB and CPP staff.Advocate on child rights to protection and enhanced response during emergencies.

Jibon-O-Jibika Program:Save the children federation, Inc. will be implementing a 5-year integrated program to promote food security in 11 upozilas of Barisal division in Bangladesh. Titled “Jibon-0-Jibika (life and livelihood) the program is proposing innovative and exciting initiatives aimed at improving nutritional behavior and outcomes among women and children in one of the most vulnerable coastal populations in Bangladesh. Building on complementary skills, the program will be implemented by save the children in close partnership with Helen International, NGO forum for Drinking water and supply and sanitation and cyclone preparedness program of the Bangladesh Red crescent society. Jibon-O-Jibika (J&J) will bring together activities to promote household food production, improved access to and quality of basic health services as well as improving resilience among families who are under the constant threat of natural disasters. Employing a combination of approaches community mobilization, training and capacity building: SC and partners will strive to increase knowledge of appropriate practices, increase availability, access and quality of services in the target communities. At the same time, efforts will be undertaken to decrease community and household vulnerabilities to natural, economic and social shocks.

Along with the wide range of community level activities, SC will also directly distribute a ration of hard red winter wheat, lentils and fortified vegetable oil to at least 75% of all households in the target area. The ratio is designed to be an incentive to combat the higher maternal and child malnutrition in Barisal.J&J has selected areas and communities that are at greatest risk to natural disasters with limited access to services making them extremely vulnerable to poverty, poor health status and malnutrition. The main goal of Jibon-O-Jibika program is decreased household food insecurity in 3 districts of Bangladesh’s Barisal division.

Area of operation:Jibon-O-Jibika is designed to benefit over 0.18 million children under 2 years, over 72 thousand women and over 2.6 million (direct and indirect) beneficiaries from 470,886 households in 11 upazilas of 3 districts of Barisal division.

District Upazila

Barisal Babugonj, Bakergonj, Muladi

Patuakhali Bauphal, Galachipa, Patuakhali Sadar

Bhola Burhanuddin, Bhola Sadar, Daulatkhan, Lalmohon, Tazumuddin.

Accounting procedure Save the Children USA Impact Area office Barisal

Save the Children USA, a name of a most organized and technically advanced nonprofit developmental organization throughout the world. They maintain a qualitative and effective accounting procedure. It is possible because of their effective and most experienced team of accountants and finance officials. A high quality technical and scientific maintenance of the accounts section build this organization as a role model for the developmental sector. The computerized accounting system of this organization gives it a multidimensional effectiveness. The Barisal Regional office of Save the Children USA is a five-year project office of “Jibon-O-Jibika” program. The accounts section of this office act as a linkage office of the District Area Office and Upazila Offices of above mentioned program. Mr. Hemaetul Islam, Deputy Manager of Finance act as the Regional chief of Finance. The effective working environment of the office also gives the employee more satisfaction than any other organizations of this region.

Picture-1: Global Boys working with the Deputy Manager-Finance Mr. Hemaetul Islam, during the survey.

Illustration-1: The process of financial Reporting of Save the Children USA

Here we describe the accounting procedure of the Impact Area office, Barisal in the collaboration with the Home office of Save the children USA.

Recording of TransactionsRecording of TransactionsSave the Children USA use the SUNLIGHT Accounting Software in recording of daily transactions. When the payment is made or the money is receipt the entry is made to the software on the basis of some specific code. The supporting voucher is also attached and keeps manually. But the phenomenon is different in the perspective of the country office. They use the SUN Accounting Software in recording their transactions. The District and Upazila Area offices of Save the children USA in Barisal Region gives their monthly financial report to the Impact Area Office and then the Regional office accumulate these report and forward to the country office. The country office also sends this report to the Home office at West Port USA.

SUNLIGHT-Accounting Software: The Impact area office of Save the Children USA, Barisal use accounting package software named “Sunlight”. The software is designed in such way where each accounts contain a specific code. When the transaction is made such as the expenditure is identified or the payment is made the transaction is recorded in the system. Those transactions are made throughout the month has been recorded by the system in a daily basis. At the end of the month when the time of reporting come the computer gives a summarized form of report about cash inflows

Regional Office

District Area Office

Upazila level Office

Fin

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Country Office

Home Office

and outflows during the month with the detail description. These copies of report then send to the country office.SUN-Accounting Software:SUN-Accounting Software: The country office of Save the Children USA, Bangladesh use the package named “SUN Accounting Software”. The operation of this system is quite similar with the SUNLIGHT software. Its report is send to the Home office of Save the Children USA at West Port USA. They also collect report from allover the regional office of Bangladesh. When the home office get this report from more than 45 country offices then it prepare the annual report /financial statement and published for clarity and better understanding among the nations.

Reacquisition of funds: Reacquisition of funds: In every starting of the month the impact area office, Barisal reported to the country office for reacquisition of a specific amount of funds to promote the four components project run in the Barisal region, including the program delivery cost and administrative cost. When the country office approves the budget for the month then they made the payment to bank accounts of regional office. By holding the amounts the regional office promotes the project in Barisal division. As soon as the regional office gets the fund they record it in the monthly Receipt & Payment Statement as the opening balance of the month as well as the sunlight system by specific codes.

Recording of Daily Transactions:Recording of Daily Transactions: The daily transaction of the save the children are divided in two categories-

Daily disbursement from Patty Cash:

Daily disbursement by Cheque payment:

Computerized and Manual Recording:Computerized and Manual Recording:Computerized and manual recording are act side by side in Save the Children USA. The entry is made in the computer by using the specific code and besides that they also keep the record of receipt and payment and also expenditure vouchers manually. The regional

The cash that is disbursed daily by the impact area office is classified as patty cash transaction. The patty cash in this office is the limit of 80,000.00 Tk and the disbursement limit is Tk. 20,000.00 without any tender or quotation. The voucher, which is made for the patty cash disbursement is known as PDV (Patty cash Disbursement Voucher). The recording of patty cash disbursement is also having some specific codes for specific transactions in recording of sunlight system. If the purchase is exceed the patty cash disbursement level then it will be approved by the specific committee forming by the authority.

The payment /disbursement which is made by the bank cheque is classified as the cheque disbursement. The impact area office of save the children USA issue cheque payment for the program delivery expenditure or administrative expenditure. Like as the patty cash disbursement they use some codes for the different cheque disbursement. The daily voucher which is made for the cheque disbursement is known as the CDV (Cheque disbursement voucher). Most of the cases if the amount of payment is exceed the daily cash disbursement the office use the cheque disbursement policy.

Processing of Accounting Information

office sends these two categories of materials to the country office and the country office act with the home office in the same way.

PROCESSING OF TRANSACTIONSPROCESSING OF TRANSACTIONS

The impact area office of Save the Children USA processes the data in two ways, computerized and manual system (vouchers). The computerized process work automatically but the manual process has to update daily. The computerized system is designed in a way by where if the cash disbursement entries are inputted the report of the monthly transactions (cash and cheque) will be given in a summarized form.

Manual process :Manual process :The manual process is derived by the accounting personals. When the expenditure is made or identified they record it daily through using the vouchers for specific expenditure or money receipt. The supporting vouchers will be kept as the record for the months transactions. It helps the accounts in the preparation of the month’s financial statement (Monthly Receipt & Payment statement, Expenditure statement etc.).

Computerized Data processing

Computerized ProcessComputerized Process::The Computerized process of Save the Children USA is derived by the computer program. The Sunlight Accounting Program is used by the regional office. An operator is recognized to record the entry based on some codes for specific transaction. The daily transactions are input to the program and the programs process it. One can see the condition of fund inflow and fund outflow at any time of the month. Recording effectiveness is the prerequisite to record the transactions. At the end of the month the automatic data processing system of the sunlight program process the data which is input throughout the month and also gives a report of funds inflow and funds outflow.

Manual Data Processing

Code basis Recording. Automatic processing. Summarize Report of

the month.

Recording of Vouchers

Manual processing of transactions.

Illustration-2: Processing of accounting information by the Regional office of Save the Children USA

FINANCIAL REPORTINGFINANCIAL REPORTING

Save the Children USA prepare the annual financial statement at the home office at West Port USA. The financial reports of the different country offices are collected and interpreted by the home office. The report of the Impact area office, Barisal is prepared as following.

Reporting By Impact Area Office Reporting By Impact Area Office: : The Impact Area office, Barisal of Save the Children USA prepares the report quarterly. They also prepare the monthly reports and send it to the country office. The monthly financial reporting consists of-

Monthly Receipts & Payments Statement: The monthly Receipt & Payment Statement shows the opening balance at bank, disbursement during the month, fund received from SCF, adjustment and closing balance of the month. The cash breakdown also analyze in the second part. The signature of the person who made it, who reviewed it and who has approved it is attached in the last part of the report. This is shown in the specimen-1 on the following page.

Monthly Expenditure Statement: The Monthly Expenditure Statement interprets the monthly project wise expenditure and balances at the end of the month. It contains Project Name, approved budget, fund received, expenditure, receipt balance and budget balances. Like as the monthly Receipts & Payments statement it also contains signature of the persons who made it, who reviewed it and who has approved it, is attached in the last part of the report. This is shown in the specimen-2 on the following pages.

Statement Prepared by the Sunlight Accounting program: The Sunlight program also presents a report at the end of the month. When the entry made daily the automatic data processing system of this program process the data which is input in it and prepare a report identifying the voucher code and detailed description of the transactions. This report contained the period of the report, LCL limit, accounts code, and detailed description of the transactions. This report also converts the currency of Bangladesh to US dollars ($). This is shown on the following pages as Specimen-3.

Reporting By Country OfficeReporting By Country Office: : The regional office sends their monthly and quarterly report to the country office. The country office use SUN Accounting software and they made the entry received from the regional offices. The Sun system designed in such way by which all data are available in the internet. The World Wide Web (WWW) system delivered this data to the home office. The home office department of Accounts and Finance can see the financial condition of save the children, Bangladesh country office through searching the website. The country office also sends the bill and vouchers manually to the home office for legal proceedings. The country office also sends the annual and quarterly report to the home office.

Reacquisition of funds by country office from home office

Specimen-1: Monthly Receipt & Payment Statement.

Reporting By the Home OfficeReporting By the Home Office: : The home office of Save the Children USA at West Port USA prepares the annual financial statement for mass publications. They get the report from all of their country offices and process the reports to prepare the yearly report. They prepare the report by using the automatic data processing system.

The accounting process (Financing and Reporting) of Save the Children USA is shown below at a glance:

Reacquisition of funds by Regional office to country office

Reacquisition of funds by district office to Regional office

Reacquisition of funds by Upazila office to district office

Report sends from upazila office to district office

Report sends from district office to Regional office

Report sends from Regional office to Country office

Report sends from Country office to Home office

Report sends from Home office to Donor Agencies

Illustration-3: The accounting (Reporting and financing) Process of Save the Children USA.

Save the Children (USA)Bangladesh Field office

Monthly Receipts & Payments

Month : Year: Exchange Rate Tk :

Area : Impact Area Office, Barisal.

Particulars Amount (Tk)1. Opening balance of the month2. Fund received from SCF3. This months disbursement4. Adjustment5. Closing balance of the month (1+2+3-

4+/-5)

Break up of fund received from SCF+ Closing balance break down

Other income of the month:

At bank:

At cash:

TOTAL Break down of cash

1. Net cash in hand

2. Advance3. Unadjusted

voucher

TOTAL:

Prepared By: Reviewed By: Approved By:Date: Date: Date

Date Source

D.D No./cash Amount in taka

DAP

TOTALTOTAL

Daily Transactions: The daily transaction of the save the children are divided in two categories-

Patty Cash Transaction: The cash that is disbursed in daily by the impact area Office is classified as patty cash transaction. The level of patty cash in this office is the limit of 80,000.00 Tk and the disbursment limit is Tk. 20,000.00. The voucher, which is made by the patty cash is known as PDV (Patty cash Disbursement Voucher). The expenditure Form Patty cash is also having some specific codes for specific transactions. If the purchase is not being unable to do under the patty cash transaction then it will be approved by the specific committee.

Cheque Transaction:

Processing Reporting Quarterly Evaluation Meeting Annual Reporting By the Home office Quarterly Reporting By the country office

FINDINGSCONCLUSIONBIBLIOGRAPHYAPPENDIX

Specimen of the permission and letter of appreciation. Sample report Methodology.

Designed By: Group-2(Global Boys)@(BBA)PSTU 11