The Institute of Chartered Accountants
of Sri Lanka

11. Payment Procedure for Programme, Capital & Administration Expenditure.

 11.1

 Programme Expenditure of a Revenue Nature

 1)

An Activity Proposal Form should be prepared in duplicate by the Project Officer at site giving sufficient details of work to be undertaken and  the estimated cost. The duplicate copy of the proposal form containing the Advance Payment Voucher number should be filed in the  Programme Document file.

 2)

On approval of the Activity Proposal Form by the Chief Projects Officer, a pre-numbered Advance Payment Voucher (Refer Annex. 02) should  be raised giving the following information: Description of the Programme

  • Budget Code
  • Recipients Name
  • Date, Description, Amount and Cheque No.
  • Prepared by - Accounts Clerk
  • Approved by - Project Accountant

Signature of the RecipientBefore approval of the Activity Proposal Form, it should be checked against the budgetary allocation by the Project Accountant to ensure that the proposed activity is within the budget limit.

 3)

On completion of the activity, an Activity Completion Report should be prepared in duplicate by the Project Officer at site giving sufficient  details of the work done. The Activity Completion Report should contain a comparison of budgeted and actual expenditure giving reasons for  major variations. All bills for expenditure incurred should be submitted with the Activity Completion Report. The duplicate copy of the Activity Completion Report should be filed in the Programme Document File and needs to contain Advance and Settlement Voucher numbers.

 4)

 When the Activity Completion Report is received by the accounts division, a pre-numbered Settlement Voucher (Refer Annex. 03) should be  raised  giving following information.

  • Description of the programme
  • Budget Code
  • Reference to advance voucher No.
  • Date
  • Details of the expenditure
  • Name of the person settling the advance
  • Prepared by - Accounts Clerk
  • Approved by - Project Accountant
  • Receipt number issued if any balance cash is refunded
  • Advance Payment Voucher number if there is a shortfall

 5)

All Settlement Vouchers need be filed in sequential order to facilitate independent verification. The following  documents should be attached  to  the settlement voucher:

  • Advance Payment Voucher / vouchers
  • Activity Proposal Form
  • Activity Completion Report
  • Supporting documents for expenditure incurred. eg: Bills, Receipts etc.

 6)

 Following rules should be in place for advance payments.

  • Maximum time allowed for settlement of advance to be specified Eg: 7 days
  • A person should not be given a further advance when there is a previous advance outstanding.

 11.2

 Programme Expenditure of Capital Nature & Capital Expenditure
 The recommended procurement procedure is given in detail in Sections 18 & 19. The payment procedure suggested for expenditure of a capital  nature  is given below:

 1)

 A Purchase Requisition (Refer Annex. 04) should be raised in duplicate by the required person giving details of items to be purchased.

 2)

 The Project Accountant should approve the Purchase Requisition after checking with budgetary allocation and thereafter the Chief Supplies  Officer should issue a pre-numbered Purchase Order to the selected supplier.

 3)

 A Goods Received Note (Refer Annex. 06) should be issued by the Storekeeper, or any other form of written confirmation needs to be  obtained to ensure that the items ordered are in fact received by the organisation.

 4)

 On receipt of the invoice from the supplier, and confirmation of items received, the raising of Advance Payment Voucher and Settlement  Voucher should be followed as suggested earlier. However for capital expenditure, raising of both vouchers can take place simultaneously.  This procedure is suggested to maintain the serial continuity of payment vouchers in the  cash book.

 5)

 When payments are made to contractors on receipt of invoices for construction work done, it should accompany certification of work by  Project Officer at site, Chief Project Officer and Independent Architect’s or Technical Officerscertificate.

 11.3

 Administration Expenditure

 1)

 Raising of simultaneous Advance and Settlement Vouchers suggested for capital expenditure can be followed for administration expenditure  too.

 2)

 All administration expenditure should be approved by the Accountant after comparing with the budget and all supporting documents need to  be attached to the Settlement Voucher.