1. IQAC Financial Management Conducted By: Ahmadul Haque Finance Officer, HEQEP Cell- 01711241344 Email- ahmad.haq2008@gmail.comahmad.haq2008@gmail.com 29 February 2016

2. IQAC Disbursement Arrangement YEARIQAC FundingUniversity Funding %Funding Amount to Groups (in Lakh BDT) % ABCABC 1 st Year 756037.5300000 2 nd Year 15127.5640322016 3 rd Year 1085460483024 Total 100805040100805040

3. Block allocation to Departments/Faculties/Institutes In addition to the project cost for establishing IQAC there will be separate block allocation to each program offering entity i.e. department, faculty and institute for SA Committee and conducting self-assessment. Each program offering entity of eligible universities would receive a maximum allocations amounting to BDT 958,800.00 depending on size number of programs.

4. Financial Management Financial Responsibilities: The main duties and responsibilities of the Accountant and Finance Officer will be to: Checking invoices for goods, works and services and processing for payment; Maintain Bank Book, Payroll Registers; Maintain all ledgers, Registers etc.; Maintain vouchers/bills/receipts/invoices/contracts/work orders and all other important financial transaction and procurement documents in a systematic order; Collect bank statement and reconcile bank balance; Prepare sub-project’s Quarterly Financial Management Reports (QFMRs); Prepare reply to the audit observations made by government’s auditors from Foreign Aided Project Audit Directorate (FAPAD); Prepare quarterly and annual budget expenditure plans for the sub-project; Any other financial management related tasks assigned to him/her.

5. FM functions of IQAC Office at a glance Processing invoices for payment; Maintain vouchers and other important documents; Maintain books of accounts, recording transactions; Maintain Registers; Reconcile bank statement; Prepare Financial Reports; Periodical fixed asset verification; Interface with auditor and furnish reply to the audit observations.

6. Disbursement of Fund Next Six months expenditure forecast/ committed expenditure is used as a basis of fund disbursement. Subsequent disbursement will be made upon utilization of fund above 80%. If utilization doesn’t reach 80%, justification required. HEQEP transfers fund to the operating account (OA) through bank transfer. The Director, QA must acknowledge the receipt of fund promptly.

7. Payments from Operating Account: The Director (QA) should strictly follow the government’s financial rules and regulations in making expenditures and payments for procurement of goods, works and services seek the approval of the university’s head of procuring entity (HOPE) for undertaking procurement. The procurement plan of the subproject must be approved by the World Bank prior to initiation of any procurement, be it direct shopping, NCB and ICB. Procurement done without World Bank’s prior approval of the procurement plan shall be deemed ineligible expenditure and the World Bank will not reimburse the amount. Financial and procurement rules and Guidelines issued by GoB and World Bank will, therefore, be equally applicable for making expenditure and payment. The Director (QA) would make payment for only those expenditures which have followed the due procedure and are included in the budget.

8. Checking invoices before payment to ensure that: Specifications and quality of supplied goods, services, or works are as mentioned in the tender document and its schedule and are according to purchase order/contract; Items and quantities of supplied goods, services, or works are according to purchase order/contract; Unit price of the procured items are according to purchase order/contract; Delivery of the procured items are within stipulated time/deadline; Procured items have been duly received, checked and entered in stock register; Invoices are free from any arithmetical errors and inconsistencies;

9. Checking invoices (contd.) The goods, services and works supplied/delivered are chronological from the dates of invitation of tender, contract and purchase order. The tender documents, tender evaluation report and payment proposal have been authorized by competent authority and approved by the HOPE and World Bank where applicable. Any other relevant issues. In addition to above, and before making payments out of OA, the Director (QA) must ensure that- That the activity undertaken was included in the Activity/Work, Financing and Procurement Plans and budget of the IQAC; Duly certified by competent authority as properly executed; Expenditure are properly documented, verified and approved for payments; Outcome of the activity/work done can be physically verified, ownership established and properly safeguarded. Eligible under IQACOM/IQACFOM.

10. Cash Basis Accounting The IQAC will maintain accounts on cash basis in line with the GoB’s accounting system. Therefore, efforts shall be made to process payments as early as possible so that expenditures are recorded and paid for in the period in which they are incurred. Receipts will be recorded when cash is received and payments will be recorded when disbursements are made, not when liability arises. IQAC shall employ consistent methods in maintaining records and in preparing financial statements.

11. Books of Account and Supporting Documents: What to be recorded? All sums of money received and expended by the IQAC and the purposes for which the receipts and expenditures take place; and Assets procured by the IQACO. Where to be recorded? The minimum principal books of accounts to be maintained by IQACO would be:  Cash Book  Petty Cash Book  General Ledger *The books of accounts shall capture all financial data required to generate reports on IQAC.

12. Other necessary books of accounts and registers:  Check Book Register  Fixed Assets Register  Stock Register  Income Tax Register  VAT Register  Payroll Register  Consultant’s Remuneration Register  Suppliers Registers  Advance Payment Register  Fund Receipts & Expenditure Register  Bank Account Reconciliation Register

13. Bank Account Operation: IQAC office has to operate STD/SND bank account. In operating the account following issues are to be kept in notice: - Do not consider bank charges as IQAC expenditure, - Do not use interest income in QA activities, - Adjust all bank charges with interest income, when available, - Deposit net interest income after such adjustment to the Govt. treasury, - Such income and expenditure will appear only in Bank Reconciliation Statement till adjustment.

14. Bank Reconciliation Reconciliation of bank account should be carried out regularly on a monthly basis. Bank Statement of operating account shall be obtained from bank at the beginning of the following month and the following tasks shall be performed:  Entries in the bank statements shall be compared with the entries made in the IQAC’s Bank Transaction Register (Bank Book),  A list of all debits (Bank charges etc.) and credits (interest credited etc.) appearing in the bank statements but not in the IQAC’s Bank transaction register (Bank book) shall be listed. These are usually related to Bank charges, Bank interest and dishonored checks etc. Appropriate vouchers shall be prepared for these transactions and after due authorization shall be entered in the Bank book.  A list of all the receipts and payments recorded in the Bank book but not appearing in the Bank statements shall also be prepared for subsequent follow up. These will usually relate to checks not yet presented by payees, or deposits not yet credited etc. Bank reconciliation statement shall be prepared taking into account the items listed above and the balance shown as per the bank statement shall be agreed with the balance shown in the IQAC’s Bank book. Bank reconciliation is required even the two balance matched.

15. Petty Cash management Small payments, which are usually required to be paid in cash for day-to-day expenses of the IQAC, shall be paid out of Petty Cash float maintained under the imprest system. The limit of petty cash imprest required by the Director (QA) will be as per “Delegation of Financial Powers for Development Projects”. For better cash management, it is necessary to maintain a regular interval for payment and replenishment of petty cash fund. Transaction of petty cash should be recorded in petty cash register.

16. Month End Procedures At the end of the month, the Director (QA) shall prepare a statement showing opening balance, receipts during the month, payments made over the same period. A statement of expenditure is necessary to prepare at the end of the month showing both in detail and summarized heads of expenditure. Monthly progress reports and other financial reports may be prepared using above expenditure report. The following tasks are to be completed at the end of each month to ensure all transactions have been accounted for correctly:  Bank reconciliation  Petty cash reconciliation  General ledger reconciliation  Month end ledger balancing

17. Reporting Quarterly Financial Management Report (FMR) IQAC Financial Management Report: The Director (QA)s are required to submit Financial Management Reports (FMR) to the HEQEPU on a quarterly basis within 21 days after the end of each calendar quarter. The reports included in the FMR are: Part-1: Financial Report 1-A Sources and Uses of Fund 1-B Uses of Fund by Sub-Project Activities 1-C IQAC Activity Report 1-D Bank Reconciliation Statement

18. QFMR (contd.) Part -2: Expenditure Documentation Report 2-AEligible Expenditure Documentation Report 2-BStatement of Expenditure: Subject to Prior Review 2-CStatement of Expenditure: Not Subject to Prior Review Part -3: Request for Advance 3-ACash Forecast Statement 3-BRequest for Advance.

19. Re-appropriation of Approved Budget The Director (QA) may be allowed to re-appropriate allocations from one budget head to another under the following conditions: Use specific format for preparing re-appropriation proposal. Re-appropriation will need approval of Project Director. Provide proper justification of proposed changes. No expenditure can be made before approval of such proposal. Re-appropriation can be done once in a year.

20. Unspent Balance During implementation of the QA, there may be unspent balance in the operating account at the closing of year. The amount of such unspent balance can be carried forward and utilize under the following year’s budget. The Director (QA) should inform Project Director, HEQEP promptly about the amount of unspent fund at the end of year so that HEQEPU can update its books of accounts accordingly. After completion of QA activities, unspent fund may exist at the operating account. In such situation, the unspent fund should be transferred to the designated account of HEQEP within a month of the completion along with a statement on closing of accounts.

21. Document Retention by IQAC The IQAC shall retain all payment records and other relevant documents in a systematic order evidencing eligible expenditures and to enable UGC, HEQEP, GoB auditors and World Bank representatives to examine such records, and also for the purpose of transparency and accountability in handling of fund. The IQACO will retain such records at least for one year after receiving the final audited financial statement of the HEQEP by World Bank or two years after closing of the QA activities, whichever is later.

22. Asset Verification In order to verify existence, ownership and safe custody of the various fixed assets procured, the Director (QA) should have a well-designed system to record acquisition and disposal of all the fixed assets capable of easily identifying assets, its current location and ascertain its history and cost. Each asset, as soon as acquired, shall be given a unique identification number, which should be painted, labeled or tagged to the asset. The non-removable stickers supplied by HEQEP should be pasted on all equipment, machines, devices, implements and furniture procured by the IQAC. Periodical (at least annual) physical inspection of Fixed Assets shall be carried out and reconciled with fixed asset register.

23. Audit Internal Audit The project will undertake operational audit on an annual basis by outsourcing the function to a firm of chartered accountants under agreed ToRs. This audit will examine the physical, financial and operational aspects of project implementation and provide timely feedback to project management regarding any control weaknesses or management improvements required. The scope of the operational audit would be comprehensive including review of financial transactions, efficacy of internal control arrangements and evaluation of project performance against the project objectives.

24. External Audit The external audit of the sub-projects will be carried out by the Foreign Aided Projects Audit Directorate (FAPAD), the designated unit of the C&AG. The audit will be carried out within six months of the closing of the financial year and a report submitted to the World Bank by December 31. World Bank’s periodic project review missions would also look into procurement procedures, the accounts of the AIF funds utilization and into the audit reports provided by the MoE/UGC during the project implementation period. The Director (QA) should therefore remain fully prepared with the accounts of the IQAC and all relevant documents on fund received and utilized.

25. Key works in facing Audit: Take preparation after getting Audit schedule. Retain all payment records and other relevant documents in a systematic order. Present cashbook, all books of accounts, other documents as required by the audit team. Furnish spot reply with proper document whenever observation is pointed. Try to resolve any omission/commission identified by the audit team by rectifying or justifying with proper explanation. After getting draft findings or draft Audit Information Report (AIR), try to resolve before the audit final exit for the year. After getting final AIR, Para-wise broadsheet reply with proper documentation has to be sent to project authority.

26. Thank You For anytime help HEQEP FM team contacts: Ahmadul Haque, FO, 01711241344, ahmad.haq2008@gmail.com Gazi Md. Mohsin, FMA, 01755501579, gmmwz@yahoo.com