1. Treasury management Financial management of projects

2. ‹#› Avril 2010Gestion de trésorerie TRAINING'S OBJECTIVE The participant will be able to manage treasury throughout the project while respecting the procedures in force at BTC; he/she will be able: Explain the importance of treasury managementExplain the importance of treasury management Explain the financing mode of BTC and its projects Manage the cash call process Explain the different payment modes used at BTC Manage the banking accounts Manage the petty cash accounts

3. ‹#› Avril 2010Gestion de trésorerie 1OBJECTIVES OF TREASURY MANAGEMENT Ensure funds are available Minimize the resources on project accounts. Limit the risks Minimize the costs of transfers and banking costs Ensure the timely availability of the information about banking balances and transactions Ensure a smooths and secure process of payments

4. ‹#› Avril 2010Gestion de trésorerie TRAINING'S OBJECTIVE The participant will be able to manage treasury throughout the project while respecting the procedures in force at BTC; he/she will be able: Explain the financing mode of BTC and its projectsExplain the importance of treasury managementExplain the financing mode of BTC and its projects Manage the cash call process Explain the different payment modes used at BTC Manage the banking accounts Manage the petty cash accounts

5. ‹#› Avril 2010Gestion de trésorerie 2FINANCING BTC AND PROJECTS Financing of BTC BTC receives financial resources from the Belgian state on the basis of the approved budget

6. ‹#› Avril 2010Gestion de trésorerie 2FINANCING BTC AND PROJECTS Financing projects First transfer after Implementation Agreement (CMO) is signed (start-up cash call) On the basis of cash call Quarterly call and transfer of funds Synchronisation between input and output flows 4 tranches: each quarter Projects for other donors: defined in the contract

7. ‹#› Avril 2010Gestion de trésorerie TRAINING'S OBJECTIVE The participant will be able to manage treasury throughout the project while respecting the procedures in force at BTC; he/she will be able: Explain the importance of treasury managementExplain the financing mode of BTC and its projects Manage the cash call processManage the cash call process Explain the different payment modes used at BTC Manage the banking accounts Manage the petty cash accounts

8. ‹#› Avril 2010Gestion de trésorerie 3CASH CALL 3.1 Sum Calculation Available balance on the accounts (banking accounts and petty cash) Financial planning of local expenses Budget available

9. ‹#› Avril 2010Gestion de trésorerie 3CASH CALL A : Estimate of the available resources on the project accounts at the end of the current quarter (A = 1-2+3) Total of available resources at the beginning of the quarter Financial planning of local expenses of current quarter Funds received during current quarter B : Financial planning of local expenses of next quarter C : Cash buffer (1/3 of next quarter, maximum of 50.000 EUR) => Cash call = B – A + C

10. ‹#› Avril 2010Gestion de trésorerie 3CASH CALL 3.1Two restrictions Amount cash call <= budget – funds received – expenses HQ (realized + planned) If A >= B then the sum of the cash call = 0 (funds available > planning) never only a transfer from the buffer

11. ‹#› Avril 2010Gestion de trésorerie 3CASH CALL 3.2 Conditions Accounting of previous quarter closed Version of current quarter planning is drawn up and validated Signature on paper Co-management (Cogestion): by the 2 project managers (+ co- commissioner) State-managed (Régie): Project manager

12. ‹#› Avril 2010Gestion de trésorerie 3CASH CALL 3.3 Information Information about the budget, transfers received and expenses by HQ (realized and planned) Calculation of the sum of the cash call Data and address of the project Data banking account (main account) and financial institution Signatures

13. ‹#› Avril 2010Gestion de trésorerie 3CASH CALL 3.4 Deadlines Deadlines Project for RR: 10 March/ 10 June / 10 September / 10 December Deadline Representation for headquarters: 20 March/ 20 June / 25 September / 20 December By 10 March 2008 the cash call must be submitted for Q2 2008 (financing of the following quarter) This cash call is based on Q1 2008 financial planning, drawn up in February

14. ‹#› Avril 2010Gestion de trésorerie 3CASH CALL 3.5 Emergency Cash call Early submission of a cash call Why? Unexpected circumstances Avoid conscious overestimation of planning Conditions: new planning + comments + accounting of previous quarter closed Payment within 14 days of the amount needed for the current quarter The rest on the normal date of payment

15. ‹#› Avril 2010Gestion de trésorerie 3CASH CALL 3.6 Fund transfers Beginning of each quarter (or as soons as possible) Analysis of global feasibility at headquarters Division/report: exception Division: First tranche on normal date of payment Second tranche at the request of the project (if necessary) If the first tranche is enough until the next funding: The balance of the cash call will not be transferred (close cash call)

16. ‹#› Avril 2010Gestion de trésorerie 3CASH CALL Schedule of specific funding For example, for infrastructure projects and projects with considerable public contracting Consultation with project Confirmation of outgoing transfer by HQ Confirmation of incoming transfer by the project to the Representation Transfer problems: No funds after 2 weeks-> communicate to RR

17. ‹#› Avril 2010Gestion de trésorerie 3CASH CALL 3.7 Monitoring treasury situation Cash = cost Opportunity cost Depreciation Bankruptcy Limit unused resources Avoid negative balances Request the nex cash call on time Make sure transactions are performed well

18. ‹#› Avril 2010Gestion de trésorerie TRAINING'S OBJECTIVE The participant will be able to manage treasury throughout the project while respecting the procedures in force at BTC; he/she will be able: Explain the importance of treasury managementExplain the financing mode of BTC and its projects Manage the cash call process Explain the different payment modes used at BTCExplain the different payment modes used at BTC Manage the banking accounts Manage the petty cash accounts

19. ‹#› Avril 2010Gestion de trésorerie 4PAYMENT MODALITIES 4.1 Tools Electronic deposit Paper deposit Cash Cheques

20. ‹#› Avril 2010Gestion de trésorerie 4PAYMENT MODALITIES 4.2 Criteria Security: Swiftness Cost Administrative load

21. ‹#› Avril 2010Gestion de trésorerie 4PAYMENT MODALITIES 4.3 Bank transfer The best modality in all respects Favour electronic payment as much as possible Ask suppliers to have a banking account

22. ‹#› Avril 2010Gestion de trésorerie 4PAYMENT MODALITIES 4.4 Cash Cost: 0,3% - 2% Risky transport, risk of theft and violence Risk of error Risk of fraud No interest Significant administrative cost

23. ‹#› Avril 2010Gestion de trésorerie TRAINING'S OBJECTIVE The participant will be able to manage treasury throughout the project while respecting the procedures in force at BTC; he/she will be able: Explain the importance of treasury managementExplain the financing mode of BTC and its projects Manage the cash call process Explain the different payment modes used at BTC Manage the banking accountsManage the banking accounts Manage the petty cash accounts

24. ‹#› Avril 2010Gestion de trésorerie 5MANAGE THE BANKING ACCOUNTS Structure of the accounts: See TFF Signature mandate Main account: EUR or F CFA Opening and closing accounts: RepresentationSupplying of working capital accounts Needs for 1 month Keep EUR as long as possible Not the last days of the month. Savings account: prohibited Negative balance: prohibited

25. ‹#› Avril 2010Gestion de trésorerie 5MANAGE THE BANKING ACCOUNTS 5.1 E-banking Local tool To perform transactions on local accounts Consult local accounts Tool Deutsche Bank State-managed Perform transactions on the main Deutsche Bank account Consulter the local and Deutsche bank accounts Strongly recommended

26. ‹#› Avril 2010Gestion de trésorerie 5MANAGE THE BANKING ACCOUNTS 5.2 Banking relations Banking partner chosen by headquarters with the Representation Banking contacts in case of significant problems via Representation

27. ‹#› Avril 2010Gestion de trésorerie 5MANAGE THE BANKING ACCOUNTS 5.3 Banking services of headquarters Documentary credit Banking guarantees

28. ‹#› Avril 2010Gestion de trésorerie TRAINING'S OBJECTIVE The participant will be able to manage treasury throughout the project while respecting the procedures in force at BTC; he/she will be able: Explain the importance of treasury managementExplain the financing mode of BTC and its projects Manage the cash call process Explain the different payment modes used at BTC Manage the banking accounts Manage the petty cash accountsManage the petty cash accounts

29. ‹#› Avril 2010Gestion de trésorerie 6MANAGEMENT OF PETTY CASH 6.1 Separation of duties Cashier Accountant Project management

30. ‹#› Avril 2010Gestion de trésorerie 6MANAGEMENT OF PETTY CASH 6.2 Cash journal / cash register withdrawals Each withdrawal and deposit must be registered immediately Document: Original supporting document or receipt of disbursement Bound ledger with numbered pages

31. ‹#› Avril 2010Gestion de trésorerie 6MANAGEMENT OF PETTY CASH 6.3 Ceiling amount Limit risks Ceilings! How to determine? Needs? Bank accessibility? Security? Derogations from the rule: internal signed note, mail.

32. ‹#› Avril 2010Gestion de trésorerie 6MANAGEMENT OF PETTY CASH 6.4 Certificate and control of cash register Certificate = written proof that the cash register does indeed hold the amount specified When? The last day of the month after the last transaction Who?Preparation: Cashier Control of the cash register and signature of the certificate: Project manager projet If different Mention difference in cash register certificate Regularization: project management Surprise control

33. ‹#› Avril 2010Gestion de trésorerie THANK YOU FOR YOUR ATTENTION