UFTRS

UNIVERSITY STUDENT COUNCIL in partnership with THE LEAGUE OF COLLEGE COUNCILS and UP JUNIOR PHILIPPINE INSTITUTE OF ACCOUNTANTS

THE

UNIVERSITY FINANCIAL TRANSPARENCY REPORTING STANDARDS

Towards Further Transparency The UNIVERSITY STUDENT COUNCIL The University Student Council of the University of the Philippines in Diliman, Quezon City is the official student representative body of the Philippines’ premiere institution of higher learning. As such, it represents the interests of the students within and outside the University. The University Student Council, also known as USC, exists to represent UP students in various affairs of the University, acting as the voice of students in the local, national, and international issues.

As the highest student representative body in the university, the USC is composed of members elected amongst the student body, mandated to organize and direct campaigns and activities to defend and promote students’ rights, and improve the students’ general welfare.

Furthermore, it provides direct services to the student body. The USC has the proud and historic tradition of active involvement in the Filipino people’s struggle for their democratic rights and interests.

The LEAGUE OF COLLEGE COUNCILS The League of College Councils (LCC) is the alliance of all local councils in the University of the Philippines, Diliman.

Utilizing the strong potential of a united League of College Councils, the LCC of the Academic Year 2013 – 2014 shall serve as an avenue to forward concrete and sustainable actions to all challenges that hinder genuine development in the education sector and the whole of society. The LCC shall be a bastion of the current student movement that will push for maximum student participation by mainstreaming all possible means to integrate the Iskolar ng Bayan in the challenge of serving the nation.

UP JUNIOR PHILIPPINE ASSOCIATION OF ACCOUNTANTS The UP Junior Philippine Institute of Accountants (UP JPIA) is the premier Business Administration & Accountancy students’ organization in the Cesar E.A. Virata School of Business in UP Diliman.

Established in 1958, UP JPIA was created for the prime purpose of serving as a medium of expression of the ideals and aspirations of current and former Accountancy students of the University, aimed at creating an atmosphere highly conducive to their moral, social and intellectual development.

Through the years, UP JPIA has built a tradition of excellence, having been recognized as one of the most outstanding organizations in the University and in Quezon City – a threetime winner of the Gawad Chancellor Award for Most Outstanding Organization and the first and only Gawad Chancellor Hall of Fame Awardee in the university, a national finalist in the Ten Accomplished Youth Organizations (TAYO) and a recipient of the Quezon City Youth Achiever’s Award.

Today, UP JPIA continues to provide its members with dynamic opportunities to grow and excel through innovative projects that are relevant to the members, the University and society.

As mandated by the USC Constitution: “SEC. 4 The Treasurer shall (d) Submit a financial report at the end of each semester to the Council, which shall be published in the Philippine Collegian;” The University Student Council (USC), in partnership with the League of College Councils (LCC) and through the expertise provided by the UP Junior Philippine Institute of Accountants (UP JPIA), under the tagline “Responsive and Responsible Finance: Translating Principles into Practice”, has launched the campaign entitled CRAFT: Councils for Responsible Accounting and Financial Transparency.

Spearheaded by the USC Finance Committee, with key proponent Mr. Aaron Letaba, the USC Treasurer, CRAFT will aim to ensure further transparency and accountability in the council’s finances. By implementing a series of seminars for local colleges’ finance councilors, and communicating pronounced rules in creating the local college council’s

financial reporting, CRAFT has the following success metrics: Coordinated release of relevant and faithfully represented financial statements of all local college councils Implementation of efficient financial systems for managing internal controls and financial planning Standardization of financial recording and reporting procedures that will establish transparent and accountable student councils and governments Implementation of the project covers the whole academic year of 2013-2014, and institutionalization is sought thereafter.

PURPOSE

TABLE of

CONTENTS 5

Module 1: Documentation of Transactions Recording of Cash receipts Recording of Cash disbursements

19

Module 2: Statement of Cash Flows Chart of Accounts Statement of Cash Flows Disclosure Notes to Financial Statements

33 38

Module 3: Internal Control Procedures Glossary of Terms

MODULE 1

DOCUMENTATION OF TRANSACTIONS

DOCUMENTATION OF TRANSACTIONS

Responsibility for Documentation The documentation of the local college council’s transactions shall be the sole responsibility of the finance officer.

Recording of Cash Receipts 1. Issuance of an Acknowledgment Receipt.

Upon receipt of cash, the finance officer (payee) issues an acknowledgement receipt to the payer. A duplicate copy of the acknowledgement receipt is kept by the finance officer for his/her own record. The said forms shall be pre-numbered and should include the following details: a.) the amount of the cash received, b.) the name of the payer, c.) the source and nature of cash, d.) the date of the transaction, and e.) the name and signature of the finance officer.

2. Recording in the logbook.

Using the duplicate copy of the acknowledgement receipt, the Finance officer thereafter records the transaction in a logbook. The logbook may take the form of a journal or a notebook. Similar to the acknowledgment receipts, the pages of the logbook shall also be pre-numbered. Each page should be signed by the council chairperson to verify that they were pre-numbered. Details to be recorded in the logbook are as follows: a.) the source of cash, b.) the amount received, c.) the date of the transaction, d.) the name and signature of the payer, e.) acknowledgement receipt number and f.) the signature of the Finance officer.

3. Transfer of data from logbook into Excel records.

Information recorded in the logbook is then transferred to a Microsoft Excel worksheet. The worksheet shall contain the same fields as the logbook. The frequency of the transfer of data is left to the discretion of the Finance officer. In determining when to transcribe data into the worksheet factors such as volume of transactions and amount of money received shall be taken into account.

5

MODULE 1

Acknowledgement Receipt

PAYOR

CASH

CASH RECEIPTS

Finance Officer

Duplicate copy of Acknowledgement Receipt

FILE

DATA Record in logbook

DATA

6

Transcribe data into MS Excel

Illustration 1.1 Cash Receipts Flowchart

DOCUMENTATION OF TRANSACTIONS

Recording of Cash Disbursements This section of the documentation module is divided into two parts. The first part applies to transactions wherein disbursements are made before the expenses are incurred or capital request. On the other hand, the second pertains to transactions wherein expenses are made first before the disbursements or reimbursement.

Capital Request 1. Submission of a Cash Disbursement form.

Before disbursement of funds, a cash disbursement form is filled out by the liquidating person. This form should include details such as a.) amount of the money requested, b.) purpose and/or nature of the expenses (includes projection of expenses if request is for a council project), c.) name of the person requesting cash,d.) date of the request and e.) amount disbursed. Only the first four items (a, b, c and d) are to be filled out by the liquidating person.

2. Recording of data in Cash Disbursement Logbook.

After receiving the cash disbursement form, the Finance officer records the information in the logbook. The logbook may take the form of a journal or a notebook. Similar to the acknowledgment receipts, the pages of the logbook shall also be pre-numbered. Each page should be signed by the council chairperson to verify that they were pre-numbered. Details to be recorded are as follows: a.) date of request, b.) date when disbursement was made, c.) nature and purpose of the expense, d.) name of the liquidating person and e.) projection of expenses. Item e (amount disbursed) is only to be filled out if the purpose of the disbursement requires a budget to be submitted. As an additional control, the logbook is also signed by liquidating person.

3. Transfer of data from logbook into Excel records.

Information recorded in the logbook is then transferred to a Microsoft Excel worksheet. The worksheet shall contain the same fields as the logbook. The frequency of the transfer of data is left to the discretion of the Finance officer.

In determining when to transcribe data into the worksheet factors such as volume of transactions and amount of money disbursed shall be taken into account.

7

MODULE 1

4. Collect all receipts.

After the actual expenses have been incurred, the Finance officer collects the receipts. He must note in the logbook that the receipt/s for a particular disbursement has/have been received. In addition the payee/liquidating person shall countersign to verify the submission of the receipt. The finance officer then reconciles the amount spent indicated in the receipts with the amount disbursed. The receipts are to be kept for audit purposes.

Upon collection of receipts, two possible scenarios might occur: (a) Deficiency of Funds If the money previously received/approved is inadequate for the expenses made (as evidenced by the receipts), the steps for reimbursement should be followed. (b) Excess of Funds If the money previously disbursed is greater than the amount of expenses made (as evidenced by the receipts), the liquidating person must return the excess money. The steps for cash receipts should be followed thereafter.

8

DOCUMENTATION OF TRANSACTIONS

Liquidating Person Cash Disbursement Form

Cash Disbursement Form

Finance Officer Return cash disbursement form

NO

Approve cash request?

CASH DISBURSEMENTS

(before expenses)

YES

Disburse cash DATA

Record in logbook Cash disbursement form

FILE

DATA Illustration 1.2 Cash Disbursements Flowchart (Disbursements before Expenses)

Transcribe data into MS Excel

9

MODULE 1

Liquidating Person EXCESS Cash + Receipt of expenses

COLLECTION OF RECEIPTS

(if there’s excess cash)

Finance Officer

Reconcile Receipt of expenses

CASH

Follow procedures for cash receipts

FILE DATA

Record receipt of receipts in logbook DATA

10

Transcribe data into MS Excel

Illustration 1.3 Excess Cash

DOCUMENTATION OF TRANSACTIONS

Liquidating Person Receipt of expenses

COLLECTION OF RECEIPTS

(if there’s deficiency)

Finance Officer

Reconcile Receipt of expenses

To reimburse

Follow procedures for reimbursement

FILE DATA

Record receipt of receipts in logbook DATA

Illustration 1.4 Deficiency

Transcribe data into MS Excel

11

MODULE 1

Expenses before Disbursements (Reimbursement) 1. Submission of Cash Disbursement form and Official Receipts.

The person requesting for reimbursement (liquidating person) accomplishes the cash disbursement form. A cash disbursement form shall be filled out by the liquidating person. This form should include details such as a.) amount of the money requested, b.) purpose and/or nature of the expenses (includes projection of expenses if request is for a council project), c.) name of the person requesting cash, d.) date of the request and e.) amount disbursed. Only the first four items (a, b, c and d) are to be filled out by the liquidating person.

2. Recording of data in Cash Disbursement Logbook.

After receiving the cash disbursement form, the Finance officer records the information in the logbook. The logbook may take the form of a journal or a notebook. Similar to the acknowledgment receipts, the pages of the logbook shall also be pre-numbered. Each page should be signed by the council chairperson to verify that they were pre-numbered. Details to be recorded are as follows: a.) date of request, b.) date when disbursement was made, c.) nature and purpose of the expense, d.) name of the liquidating person and e.) projection of expenses. Item e is only to be filled out if the purpose of the disbursement requires a budget to be submitted. As an additional control, the logbook shall also be signed by liquidating person.

3. Transcribe data from logbook into Excel.

Information recorded in the logbook is then transferred to a Microsoft Excel worksheet. The worksheet shall contain the same fields as the logbook. The frequency of the transfer of data is left to the discretion of the Finance officer.

In determining when to transcribe data into the worksheet factors such as volume of transactions and amount of money disbursed shall be taken into account.

12

DOCUMENTATION OF TRANSACTIONS

Reimbursing Person Cash Disbursement Form

Cash Disbursement Form

Finance Officer Return cash disbursement form

NO

Approve cash request?

CASH DISBURSEMENTS (reimbursement)

YES

Disburse cash DATA

Record in logbook Cash disbursement form

FILE

DATA

Illustration 1.5 Cash Disbursement

Transcribe data into MS Excel

13

MODULE 1

Examples A. CASH RECEIPT Payer - Margaux Finance officer - Celine Situation: It is enrolment time once again. The super diligent student, Celine Buenaventura, will serve, for the very first time, as the finance officer of College of ABC. Due to her dedication and love for her college and co-UP students, she wants her work to be as organized as possible. She wants every transaction to reflect what really transpired. Then comes Margaux Marasigan. Margaux was taught during her childhood how to value money. For this reason, she’s very conscious about every centavo she spends that’s why she has this habit of asking for a receipt for every transaction, especially those involving high-amount of money.

To complete the validation process, Margaux needs to pay for the following: Council fee - P300 Locker fee - P100

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DOCUMENTATION OF TRANSACTIONS Celine then completed the following form:

School of Business Student Council ACKNOWLEDGEMENT RECEIPT FORM

No. ‘0003 Date: July 19, 2013

Received amount of: From (Payer): Nature/Source:

P 400.00 Margaux Marasigan Council Fee of P 300.00 Locker Fee of P100.00

Received by:

Cbuenaventura

Celine Buenaventura Name and Signature of Finance Officer

Date: July 19, 2013 Received amount of: From (Payer): Nature/Source:

P 400.00 Margaux Marasigan Council Fee of P 300.00 Locker Fee of P100.00

Received by:

Cbuenaventura

Celine Buenaventura Name and Signature of Finance Officer

Illustration 1.6 Acknowledgement Receipt Form

15

MODULE 1 Celine then records this transaction in her logbook.

Logbook CASH RECEIPTS

Page no. 1

Page no. 1

Council chair signature

Council chair signature

Date

Source

Nature

Amount

Payer’s Signature

Issue receipt?

7-Jun-13

Org 1

Organizational Fee

P 500

YES

7-Jun-13

Org 2

Organizational Fee

500

10-Jun-13

Student Fund

Council Budget

300

Payment for Locker

Locker Rentals

100

Joshua Juancho Margaux Margaux

YES YES YES

Finance officer Acknowledgement receipt no. signature

Cbuenaventura Cbuenaventura Cbuenaventura Cbuenaventura

0001 0002 0003 0004

Illustration 1.7 Cash Receipt Form

B. CASH DISBURSEMENT Liquidating person - Liam Finance officer - Celine Situation: It was the college anniversary and Liam Ventura, the council chairperson, would be needing funds for the celebration. Liam wanted to provide free lunch to everyone and decided to have a “Grand Pakain.” In preparation for this project, Liam requests funds from Celine, the finance officer. Following protocol, Celine asks Liam to to accomplish a Cash Disbursement form with the forecasted expenses for the project.

Budget:

Actual:*

Pancit - P 800 Siomai - P 200 Utensils - P 50

Pancit - P 800 Siomai - P 200 Utensils - P 50

*Everything bought from SM Supermarket with official receipt no. of 13-111 and given to Celine just after the event.

16

DOCUMENTATION OF TRANSACTIONS Liam completes then submits the following form to Celine:

School of Business Student Council CASH DISBURSMENT FORM Project Head: Liam Ventura

Project: School Anniversary

I/We would like to request funding for the above mentioned activity/ project. Expenses of which are broken down as follows Item

Quantity

Cost per Unit

Total

Pancit Siomai Utensils

1 Bilao 1 Package (75 pieces) 1 pack

P 800 200 50

P 800 200 50

Total funding requested: P 1,050.00 10/2/2014 Date funding needed: 14/2/2014 Date of project:

Lventura

Liam Ventura Person requesting with signature above

Received request: Date:

Cbuenaventura

Celine Buenaventura 5/2/2014

RECEIVED Amount disbursed: Received by: (with signature above name) Date of receipt:

P 1,050.00

Lventura

Liam Ventura 10/2/2014

Illustration 1.8 Cash Disbursement Form

MODULE 1

Celine then records data into her logbook:

Logbook CASH DISBURSEMENT Date 10-Feb-14

Page no. 1 Council chair signature

Amount Project/ Nature Purpose Budgeted Actual Expenses due to anniversary

Page no. 1 Council chair signature Liquidating Receive person/payee? receipt?

Siomai

200

200

Liam Ventura

YES

Pancit

800

800

Liam Ventura

YES

Utensils

50

50

Liam Ventura

YES

Date

Signature

O.R. No.

14-Feb-14

Lventura Lventura Lventura

13-111 13-112 13-113

Illustration 1.9 Cash Disbursement Form

18

MODULE 2

DOCUMENTATION OF TRANSACTIONS

STATEMENT OF CASH FLOWS

Statement of Cash Flows A. Introduction 1. Purpose of the Statement of Cash Flows Transparency and Accountability It is imperative that all foregoing transactions undertaken by any council or body representative of the studentry should keep, at the minimum, a reliable recordkeeping of financial information for the semester and the whole academic year. Such task primarily falls upon the finance councilor (or its equivalent) of every council. Proper recording and relay of financial information to the student population enhances the students’ confidence with their respective council managements, and generates a sense of credibility in their offices.

Additionally, an annexation of the Statement of Finance Councilor’s accountability accompanied with an affirmation of the Council Chair to the Financial Statements furthers the accountability of the council officials lest they misrepresent the information, whether intentionally or inadvertently.

Standardization In line with the transparency and accountability purpose, standardization is being seen as a means to further enhance the reliability of the Statement of Cash Flows. By implementing uniform mechanisms and procedures applicable to all the councils within the university, there will be a heightened comparability between entities, allowing end users to easily compare the financial performance between colleges. This will also enable an easy identification of unusual deviations in the Statements, as well as finding the uniqueness of each transaction respective to the nature of a college’s operations.

19

MODULE 2

Sound Financial Management Transparency, accountability, and standardization of the Statements generally relate only to the form and manner that the financial information is handled; managing such finances efficiently and effectively, to the best interests of the students, is another. Thus, another purpose of generating the Financial Statements for the college councils is to make sure that all cash and other assets involved are used in the most worthwhile way possible, setting wastage of funds to a minimum. An introduction for cash budgeting and financial tracking will be annexed to this module as well, for the attainment of this purpose.

Notes: Financial reporting contemplated herein refers to simplified accounting procedures and is independent from the pronouncements of other accounting standard-setting bodies. UP JPIA reserves the right to implement unique accounting standards for the college councils of the University of The Philippines – Diliman , so as to fully achieve practicality and feasibility for all its stakeholders.

20

STATEMENT OF CASH FLOWS B. Presentation/Layout UP School of Business Student Council Statement of Cash Flows For the Semester Ended October 31, 2013 CASH INFLOWS Council Mandated Funds Organizational Fees Student Fund Collections (Note 1) Total General Sponsorship Inflows Alumni Donations Liquidation of X-deals - bags (Note 3) Sponsorships - ABC Company (Note 3) Total Income Generating Projects Food Sale Locker Rentals (Note 1) Total

Total Inflows

P

1,000.00 15,000.00

P

12,000.00 5,000.00 3,000.00

2,000.00 4,000.00

20,000.00

6,000.00 42,000.00

P

CASH OUTFLOWS Council and Other College Projects P 500.00 General Registration (Note 1) 1,050.00 Grand Pakain (Note 2) 9,000.00 Sportsfest (Note 3)

P Total Operation and Maintenance Expenses

100.00 Bulletin Boards 150.00 Office Supplies

Total Long Term Investments 500.00 Furniture and Fixtures - Chairs 700.00 Office Equipment - Fan

Total

P

Total Outflows

Net Cash Flow

Add: Beginning Cash Balance, June 1, 2013

Ending Cash Balance, October 31, 2013 CASH BREAKDOWN Cash on hand Cash in bank Cash Balance, October 31, 2013

16,000.00

P

(10,550.00)

(250.00)

1,200.00 (12,000.00) 30,000.00 5,000.00 35,000.00

2,500.00 32,500.00 35,000.00

MODULE 2

OTHER ASSETS AND LIABILITIES A. Accounts Outstanding (Payable/Receivable) 1. Receivable of P5,000.00 in cash from Company XYZ in accordance with the sponsorship agreement entered into last October 15, 2013. This is expected to increase the cash balance next month.

2. Payable of P500.00 in cash to Councilor A as reimbursement for purchase of office supplies. This is expected to decrease the cash balance in the following month.

B. Inventories and Other Material Assets 1. Received X-deals from Company DEF. 200 black ballpens were received in good condition on October 20, 2013. These are expected to be given away as freebies during the general registration next semester.

2. Received a brand-new projector from Company GHI in accordance with the sponsorship agreement entered into last August 24, 2013. The projector was received in good condition on September 12, 2013.

NOTES TO FINANCIAL STATEMENT 1. General Registration Inflows

Council Budget

Locker Rentals

Student Fund Collections

Total Inflows Outflows

General Reminders (flyers)

Registration Flow (posters)

Total Outflows Net Cash Flow

22

P

1,000.00 4,000.00 15,000.00

P

300.00

200.00

20,000.00

P

(500.00) 15,500.00

STATEMENT OF CASH FLOWS 2. Grand Pakain Inflows

Council Budget Outflows Pancit Siomai Utensils

Total Outflows Net Cash Flow 3. Sportsfest Inflows

Council Budget

Liquidation of X-deals - bags

Sponsorships - ABC Company

Total Inflows Outflows Referees

Sound System

Trophies and Medals Venue

Total Outflows Net Cash Flow

800.00

200.00

50.00

P

1,000.00

P

(1,050.00) (50.00)

P

10,000.00

P

(9,000.00) 1,000.00

P

P 2,000.00

5,000.00

3,000.00

2,000.00

1,200.00 800.00

5,000.00

STATEMENT OF FINANCE COUNCILOR’S ACCOUNTABILITY “I am hereunto affirming that to the best of my intentions, the Statement of Cash Flows and all its pertinent information fairly represent all the financial transactions that have transpired within the council, its constituents, and all relevant stakeholders for the semester ending (date), and in conformity with the standard accounting procedures as set forth and duly upheld by the University Student Council of UP Diliman.”

Prepared by:

*place signature here Juan C. dela Cruz Finance Councilor UP School of Business Student Council

Noted by:

*place signature here Juana G. dela Torre Chairperson UP School of Business Student Council

23

MODULE 2 C. Parts 1. Title/Heading This includes the name of the council, the name of the financial statement and the period covered by the financial statement.

Name of Council Statement of Cash Flows For the Semester Ended Month XX, 20XX Example: UP School of Business Student Council Statement of Cash Flows For the Semester Ended October 31, 2013 2. Cash Inflows These include all inflows discussed in the previous section, alphabetically arranged under the following categories: 1. Council Mandated Funds 2. General Sponsorship Inflows 3. Income Generating Projects 4. Other Income Example: CASH INFLOWS

24

Council Mandated Funds Organizational Fees P 1,000.00 Student Fund Collections (Note 1)

15,000.00 Total

P General Sponsorship Inflows Alumni Donations

12,000.00 Liquidation of X-deals - bags (Note 3) 5,000.00 Sponsorships - ABC Company (Note 3) 3,000.00 Total

Income Generating Projects Food Sale 2,000.00 Locker Rentals (Note 1) 4,000.00 Total

Total Inflows

P

16,000.00

20,000.00

6,000.00 42,000.00

STATEMENT OF CASH FLOWS 3. Cash Outflows These include all outflows discussed in the previous section, alphabetically arranged under the following categories: 1. Council and other College Projects 2. Maintenance and Operating Expenses 3. Long Term Investments 4. Other Expenditures Example: CASH OUTFLOWS Council and Other College Projects General Registration (Note 1) Grand Pakain (Note 2) Sportsfest (Note 3) Total Operation and Maintenance Expenses Bulletin Boards Office Supplies Total Long Term Investments Furniture and Fixtures - Chairs Office Equipment - Fan Total

Total Outflows

P

500.00 1,050.00 9,000.00

P

100.00 150.00

500.00 700.00

P

(10,550.00)

(250.00)

1,200.00 (12,000.00)

4. Cash Balance This summarizes the net cash flow during the semester and shows the ending cash balance of the council, segregated into cash on hand or cash in bank, if applicable. *Cash Inflows - Cash Outflows = Net Cash Flow Net Cash Flow Add: Beginning Cash Balance, Month xx, 20xx Ending Cash Balance, Month xx, 20xx

P xxx xxx xxx

CASH BREAKDOWN Cash on hand Cash in bank Cash Balance, Month xx, 20xx

P xxx xxx xxx

25

MODULE 2 Example: A. Net cash flow is positive Net Cash Flow Add: Beginning Cash Balance, Month xx, 20xx Ending Cash Balance, Month xx, 20xx

P 20,000.00 10,000.00 30,000.00

CASH BREAKDOWN Cash on hand Cash in bank Cash Balance, Month xx, 20xx

P 5,000.00 25,000.00 30,000.00

B. Net cash flow is negative Net Cash Flow Add: Beginning Cash Balance, Month xx, 20xx Ending Cash Balance, Month xx, 20xx

P (5,000.00) 20,000.00 15,000.00

CASH BREAKDOWN Cash on hand Cash in bank Cash Balance, Month xx, 20xx

P 5,000.00 10,000.00 15,000.00

5. Other Disclosures These include other transactions that have not involved cash inflows or outflows during the semester but represent a significant part of the council’s assets, liabilities and other financial arrangements or transactions that are relevant to its stakeholders. *This is discussed further in section ‘Disclosures’.

6. Notes to Financial Statements These include other pertinent information regarding accounts and amounts presented in the statement of cash flows. Inflows and outflows per project or event are presented in sufficient detail. *This is discussed further in section ‘Disclosures’.

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STATEMENT OF CASH FLOWS 7. Accountability Clause Statement of Finance Councilor’s Accountability “I am hereunto affirming that to the best of my intentions, the Statement of Cash Flows and all its pertinent information fairly represent all the financial transactions that have transpired within the council, its constituents, and all relevant stakeholders for the semester ending (date), and in conformity with the standard accounting procedures as set forth and duly upheld by the University Student Council of UP Diliman.”

8. Signatories Prepared by:

Noted by:

Signature Name of Councilor Finance Councilor Name of Council

Signature Name of Chairperson Chairperson Name of Council

Example: Prepared by:

Noted by:

Signature Juan C. dela Cruz Finance Councilor UP School of Business Student Council

Signature Juana G. dela Torre Chairperson UP School of Business Student Council

Chart of Accounts A. Inflows 1. Council Mandated Funds Council mandated funds involve all cash inflows dealing with the fees, commissions, and revenues that the council body is authorized to collect among the college studentry and all businesses within the college, which are demandable as a result of internal legislation, business contracts, and recognized college collection customs. Primary examples are: • Student fund, council fee, and other similar terminologies used.

• Organizational fees • Concessionaire and merchant fees • Penalty collections

27

MODULE 2 2. General Sponsorship Inflows General sponsorship inflows are all amounts of cash which are acquired gratuitously from other entities. At the most, such entities might request the promotion of their name or the featuring of their brands in events held within the college, but such event does not preclude retaining the classification of revenues acquired. Inflows only represent all cash, and these include: • Sponsorships from business organizations • Pledges and donations from studentry/alumni body • Revenues from liquidation/sale of goods acquired in-kind 3. Income Generating Projects Income generating projects are inflows of cash originating from all the events undertaken by the council to raise revenues and generate additional funds supplementary to its operations. Transactions usually involve an initial disbursement of cash for the purchase of goods/merchandise, or setting up of facilities intended to serve as the platform for the eventual collection of cash, with the intention of realizing profits from such. These include: • Sale of consumable goods/ merchandise (brand sale/ book sale/ food sale) • Rummage sale and revenues from scrap disposal • Ticket sales from college-wide events • Revenues from services (printing and photocopy fees, locker rentals, etc.)

4. Other Inflows All cash inflows which are not traceable to the three classifications mentioned earlier fall under the other income section. These involve all the unique material transactions that the council has dealt with for the previous semester, and all other kinds of transactions which are special in nature to the council involved. The following is a suggestive list of other inflows: • Interest income • Loans received from other entities B. Outflows

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1. Council Projects and College Events The basic outflow involving all the projects undertaken by the council fall under the “Council Projects and College Events” heading. On a strict accounting format, the council should determine only the single line-item outflow amount, on a per project basis, to be presented in the Statement of Cash Flows, with all the supporting disbursements and sources of funds to be elaborated in the Notes to Financial Statements.

• Staple projects (College Week, Graduation Ball, Christmas Party, etc.)

• Other unique council projects • Office renovations • Constitutional amendment and election-related expenses • General registration

STATEMENT OF CASH FLOWS 2. Operation and Maintenance Expenses All recurring expenses required for the operation and upkeep of the council are to be classified under the heading “Operation and Maintenance Expenses”.

Outflow of cash that do not involve any particular project, and are done in the usual way of the council’s dealings are likewise included in this classification.

These are: • Council meeting expenses • Bulletin boards and promotional materials • Reimbursements to council officials • Supplies purchases • Sanitation expense 3. Long Term Investments Long term investments involve all productive assets purchased by the council for the inclusive period of the Financial Statements. Only assets which are intended for use and ownership extending beyond the current academic year, or those which are expected to generate a direct inflow of cash through their usage/ownership are permitted to be classified as long term investments. These include: • Electronics (Laptops, projectors, photocopying machines, etc.)

• Furniture and fixtures (tables, desks, drawers, cabinets, chairs, lockers etc.)

• Office equipment (Air conditioner, electric fans, lights, sockets, extension wires, etc.)

• Financial instruments (Time deposits, bonds, stocks) 4. Other Outflows All cash outflows which are not traceable to the three classifications mentioned earlier fall under the other expenditures section. These involve all the unique material transactions that the council has dealt with for the previous semester, and all other kinds of transactions which are special in nature to the council involved. The following is a suggestive list of other outflows: • Interest expense • Loans paid to other entities • Unaccountable losses

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MODULE 2 Disclosures A. Accounts Outstanding (Payable/Receivable) The nature and amount of receivables from other parties and payables to other parties must be disclosed, along with its effect on the ending cash balance.

Example: A. Accounts Outstanding (Payable/Receivable)

1. Receivable of P5,000.00 in cash from Company XYZ in accordance with the sponsorship agreement entered into last October 15, 2013. This is expected to increase the cash balance next month.

2. Payable of P500.00 in cash to Councilor A as reimbursement for purchase of office supplies. This is expected to decrease the cash balance in the following month.

B. Inventories and Other Material Assets The nature and number of units of inventories, such as X-deals from sponsors, and other material assets should be disclosed.

Example: B. Inventories and Other Material Assets

1. Received X-deals from Company DEF. 200 black ballpens were received in good condition on October 20, 2013. These are expected to be given away as freebies during the general registration next semester.

2. Received a brand-new projector from Company GHI in accordance with the sponsorship agreement entered into last August 24, 2013. The projector was received in good condition on September 12, 2013.

C. Contracts and Other Arrangements

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Significant contracts and other important arrangements with third parties that are relevant to the constituents should be explained.

STATEMENT OF CASH FLOWS D. Sponsorships Partnerships with companies and benefits received should be specified.

Notes to Financial Statements Detailed breakdowns of the inflows and outflows for the semester for each project or event are presented in this area. Projects or events are alphabetically arranged and numbered accordingly. Notes on the face of the financial statement must be labeled properly to ensure that amounts can be cross-referred with the accompanying notes in this section. Amounts found in this section must reconcile with those found on the face of the financial statement.

Other pertinent information regarding line items in the financial statement may be elaborated further in the notes after the detailed project or event breakdowns.

1. Name of Project or Event Inflows AAA BBB Total inflows Outflows CCC DDD Total outflows Net cash flow

P xxx xxx xxx P xxx xxx xxx xxx

2. Name of Project or Event Inflows EEE FFF Total inflows Outflows GGG HHH Total outflows Net cash flow

P xxx xxx xxx P xxx xxx xxx xxx

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MODULE 2 Example: 1. General Registration Inflows

Council Budget

Locker Rentals

Student Fund Collections

Total Inflows Outflows

General Reminders (flyers)

Registration Flow (posters)

Total Outflows Net Cash Flow

P

1,000.00 4,000.00 15,000.00

P

300.00

200.00

20,000.00

P

(500.00) 15,500.00

2. Grand Pakain Inflows

Council Budget Outflows Pancit Siomai Utensils

Total Outflows Net Cash Flow

800.00

200.00

50.00

P

1,000.00

P

(1,050.00) (50.00)

P

10,000.00

P

(9,000.00) 1,000.00

P

3. Sportsfest Inflows

Council Budget

Liquidation of X-deals - bags

Sponsorships - ABC Company

Total Inflows Outflows Referees

Sound System

Trophies and Medals Venue

Total Outflows Net Cash Flow

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P 2,000.00

5,000.00

3,000.00

2,000.00

1,200.00 800.00

5,000.00

MODULE 3

STATEMENT OF CASH FLOWS

INTERNAL CONTROL PROCEDURES

Cash: Safekeeping and Recording Amounts of cash exceeding a materiality threshold duly set by the council must be kept in a savings account named after the duly-recognized student government organization. Signatories must be both the Finance Councilor and the Student Council Chairperson.

Cash deemed nominal in value by the council must be stored in a cashbox with an appropriately secured lock. It must be accompanied by a cashbox ledger noting the inflows and outflows of cash.

The Finance Councilor is mandated to keep a cash ledger record detailing the inflows and ouflows of cash. Items, other than cash, that must be disclosed in a separate portion of the Statement of Cash Flows include: 1. Accounts Receivable (from officers, sponsors) 2. Inventory (at net realizable value) 3. Accounts Payable (to officers, suppliers) 4. Other material items <See Other Assets and Liabilities Section of the Sample Statement of Cash Flows>

Revenues: Handling the Student Fund & Cash from RGPs Cash received, while can be kept in one account/ cashbox, must be classified according to their various sources when recorded in the cash ledger document. <See Sample Statement of Cash Flows>

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MODULE 3 Revenues: Cash and X-Deals from Sponsorships For receipt of cash from sponsors, the Marketing Councilor must turn over the cash to the Finance Councilor along with a copy of the memorandum of agreement.

The Finance Councilor will then issue an acknowledgment receipt to the Marketing Councilor signifying that the received cash matches the MOA and Invoice.

For receipt of x-deals from sponsors, the Marketing Councilor must point to the Finance Councilor the inventory received, kept safely in an acceptable storage place.

The Finance Councilor counts the inventory and matches it with the MOA furnished by the Marketing Councilor. The Finance Councilor will then issue an acknowledgment receipt to the Marketing Councilor signifying that the x-deals were received by the council in good condition and that such match the quality and quantity specified in the MOA and Invoice.

Sponsor

Sponsor

Cash

X-Deals

Marketing Councilor

Marketing Councilor

Cash MOA

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Acknowledgement Receipt

X-Deals MOA

Acknowledgement Receipt

Finance Councilor

Finance Councilor

CASH SPONSORSHIP

X-DEALS SPONSORSHIP

Illustration 3.1 Sponsorship Flowcharts

INTERNAL CONTROL PROCEDURES Expenses: Proper Procedure, Required Forms, Timing Budget Request Forms The form must contain, at the minimum, pertinent details such as the date of submission to the Finance Councilor, the name and signature of the council member requesting for funds, a detailed projection of the expenses that will be incurred and the amounts, the total amount requested, the status of the request, and the name and signature of the Finance Councilor.

Authorization& Release of Funds A standard operating procedure for submission and approval of budget request forms must be established indicating the timeline for submission of the form, approval, and release of funds. Any cash needed in excess of the amount stated in the budget proposal must be included in a separate budget request form.

Liquidation For liquidation, official receipts must be submitted to and reviewed by the Finance Councilor for any unauthorized disbursements outside of the purpose stated in the budget proposal.

Any unused funds must be returned accordingly to the Finance councilor. The Finance Councilor will then reconcile if the amount of cash returned by the Officer and the total disbursements supported by official receipts would equal the total amount of cash released to the Officer as per the duly approved Budget Proposal.

Unauthorized Disbursements Cash disbursements that are not in line with the purpose stated in the approved budget request forms must be explained by the officer responsible in a written appeal. To be ratified, the appeal must be reviewed and approved by both the Council President and the Finance Councilor. Otherwise, the unauthorized disbursement will have to be shouldered by the officer responsible.

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MODULE 3

1 2

Budget request Submit budget request form to Finance Councilor

Authorization Finance Councilor reviews the request and signs it for authorization

Release of funds 3 Finance Councilor releases the request and authorized amount of funds

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Liquidation Submit official receipts and return excess funds to Finance Councilor Illustration 3.2 Budget Request Process

INTERNAL CONTROL PROCEDURES Documentation This module encourages the Finance Councilor to use a spreadsheet program in preparing the cash ledger record and the statement of financial position.

During Events Control must be exercised by the Finance Councilor in making disbursements. Though the module respects the Finance Councilorâ&#x20AC;&#x2122;s prerogative in doing this, he is mandated to exercise due diligence in ensuring that all disbursements for a project are prudent and well-documented.

Financial Statements: Audit and Turnover Before turnover of the Statement of Cash Flows (including Accounts Receivable, Inventory, Accounts Payable and Other Material Items) to the next Finance Councilor, the incumbent Finance Councilor must submit his abovementioned files and source documents to the Student Council Chairperson for auditing. Only when the Student Council Chairperson has signed the documents can it be ready for actual turnover to the next Finance Councilor.

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UP Junior Philippine Institute of Accountants Accounting Services Ad Hoc CRAFT Module

Glossary of Terms Cashbox

Council Mandated Funds

A secured storage of cash, usually mobile and must be kept in a safe place with restricted access at all times All receivables by the council (fees, commissions, service revenes)

Disbursement

To give cash to whom it is due

Liquidation

To convert a receivable to cash

Liquidating Person

Officer requesting for reimbursement

Long Term Investments

All assets obtained by the council which is expected to serve its purpose for more than one academic year

Misinterpretation of Information

Act of indicating false information, whether intentional or otherwise

Pledges

An unconditional promise given by a sponsor to give cash/ x-deals

Reconcile

Act of tracing and verifying the sources and uses of cash to the current cash on hand

X-Deals

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Non-cash Sponsorship

The University Financial Transparency Reporting Standards is a project initiated under the due authorization of the University Student Council, to be implemented in all the College Student Councils of UP Diliman.

While the conceptualization of this public document is wholly undertaken by the UP Junior Philippine Institute of Accountants â&#x20AC;&#x201C; the organization at large, and its Accounting Services Adhoc in particular â&#x20AC;&#x201C; is responsible only to these standards with respect to the soundness and applicability of the contents embodied herein.

This document is a response and a testimony to the ever increasing need of financial transparency and accountability for public governance.

Approved this 21st day of September, 2013.

Alex Castro Chairperson, University Student Council

Raphael Aaron A. Letaba Treasurer, University Student Council UP JPIA Representatives

Miguel Alfonso M. Solidum Chairman, Accounting Services Adhoc

Ma. Clarissa Eirene S. Tinitigan Vice President for Education and Research

Rachelle Annemarie R. Acevedo

Carmela Jasmine C. Mira

Gianni Jasper L. Dazo

Ramon Carlo L. Pio Roda

Aileen K. Ko

Evangeline R. Villajuan Members

Layout by: Ma. Therese Camille C. Aseoche

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