DFID Accounting Policies & Procedures Manual EDITED Fair Dra

MODEL ACCOUNTING
POLICIES AND
PROCEDURES MANUAL
FOR SACCOs IN UGANDA
Model Financial and Accounting Policies and Procedures

Manual For SACCOs in Uganda
This manual was read and approved at the Committee
Meeting held on the.Day of .2007
CHAIRMAN
.
TREASURER
.
SECRETARY
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Section
1.1
1.2
1.3
1.4
1.5
1.6
CHAPTER
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Foreword
Background of SACCOs
Objectives of the Accounting Manual
Finance Department, giving its set-up and functions
Summary of Policy Statements
Duties of the Accounting and Finance Department
Page
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10
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2.1
2.2
2.3
2.4
2.5
2.6
2.7
2.8
2.9
2.10
2.11
Policy statements on Books of Account

Chart of Accounts
Proper Books of Account
The Trial Balance
Comparative information
Related Parties
Income Statement
Balance Sheet
Cash flow Statement
Statement of changes in equity
Notes to the Financial Statements
15
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25
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3.1
3.2
3.3
Policy Statement
The Budgeting Process
Budgetary Performance and Control
28
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4.1
4.2
4.3
Policy Statement
Cashiering
Safe/Vault Cash Management
30
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33
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4.4
Transferring Cash
Section CHAPTER
34
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5.1
5.2
5.3
5.4
5.5
5.6
5.7
5.8
Policy Statement
Opening of Bank Accounts
Bank Signatories
Cheque book maintenance and Cheque Payments
Cash/Cheque deposits and Cheque clearance
Cash Withdrawals from the Bank
Bank Reconciliation
Presentation in the Financial Statements
35
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6.1
6.2
6.3
6.4
6.5
6.6
Policy Statement
Types of Loans
Loan Disbursement
Loan Repayments
Recording
Loan loss Provisioning
41
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7.1
7.2
7.3
7.4
7.5
7.6
Policy Statement
Interest Receivable on Loans
Interest Receivable on Investments
Prepayments
Staff loans and Advances
Sundry Debtors
48
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8.1 Management Policies
8.2 Procurement
8.3 Obsolete stationery
52
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Section CHAPTER
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9.2 Physical Control
9.3 Revaluation
54
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10.1
10.2
10.3
10.4
10.5
10.6
10.7
10.8
10.9
Members' Savings
Loans and Balances due to Banks
Other Borrowed Funds
Capital Grants
Interest Payable
Payroll Liabilities
Accruals
Other Accounts Payable
Corporation Tax
59
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11.1
11.2
11.3
11.4
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Members' Contributions
Handling Members' Applications and Payment for Share Capital
Equity Grants Applied
Reserves
70
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71
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12.1
12.2
12.3
12.4
12.5
12.6
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Management Policies
Types of Revenue
Interest Income
Operating Grant Income
Other Income
Disclosure in the Financial Statements
74
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13.2 Types of Expenses at SACCOs
13.3 Accounting Procedure
13.4 Payroll Costs
Section CHAPTER
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14.1
14.2
14.3
14.4
14.5
14.7
14.8
Management Policy
Internal Audit and Supervision
Appointment of External Auditors
Suitability of External Auditors
The Audit Process
Distribution of Audited Accounts
Removal of External Auditors
86
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AP
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APP
Committees Statement of Responsibility

Model Chart of Accounts
Sample Accounting Books, Forms and Documents
Worked-out Examples
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ACRONYMS
CGAP
AGA
GAAPs
AMFIU
FSDU
GL
LL
SL
ITA
UCSCU
TB
UCA
LPO
MCAP
NSSF
PAYE
PSDPC
PMT
SACCO
Rural SPEED
URA
The Consultative Group to Assist the Poor

Annual General Assembly
Generally Accepted Accounting Principles
Association of Micro Finance Institutions in Uganda
Financial Sector Deepening Uganda Project
General Ledger
Loans Ledger
Savings Ledger
Income Tax Act
Uganda Cooperative Savings and Credit Union Ltd
Trial Balance
Uganda Cooperative Alliance
Local Purchasing Order
Matching Grant Capacity Building Program
National Social Security Fund
Pay As You Earn
Private Sector Development Promotion Centre
Performance Monitoring Tool
Savings and Credit Cooperative Society
Rural Savings Promotion and Enhancement of Enterprise Development
Uganda Revenue Authority
Page8 of 164

CHAPTER ONE: INTRODUCTION
1.1
INTRODUCTION
An Accounting Manual is a set of Accounting Policies and Procedures set up by Management
as a tool to foster an organized Internal Control Environment. This Manual was Funded by
Financial Sector Deepening Program Uganda (FSDU) that contracted Kisaka & Company
Certified Public Accountants and Management Consultants.
This Manual gives applicable Accounting and financial Policies that management uses as a
guiding tool in making financial and accounting decisions. It also contains step by step
procedures derived from the policies above to assist management in capturing, analyzing,
recording, summarizing and reporting accurate, reliable, relevant and timely financial
information. The Manual also describes the effective, economical and efficient ways of financial
management, as well as the responsibilities of planning, reviewing, monitoring, supervision and
control of financial resources.
It takes care of all compliance issues with Uganda Revenue Authority (URA), the Cooperative
Societies Statute 1991, the Cooperative Regulations 1992, the Consultative Group to Assist the
Poor (CGAP) and applicable Generally Accepted Accounting Principles (GAAPs), and
addresses the General framework within which individual Savings and Credit Cooperative
Society (SACCO) Bye Laws are formulated.
This Manual is a model or exemplary/illustrative that has not been written for a specific
SACCO but in view of a number of industry players. It has been written in consultation with
Post Bank Uganda (PBU), Uganda Cooperative Alliance (UCA), Uganda Cooperative Savings
and Credit Union Limited (UCSCU), Rural SPEED, GTZ, and the Ministry of Finance. It can
therefore be used as a benchmark and then customized to suit particular a SACCO needs.
1.2
BACKGROUND OF SACCOs
SACCOs are one form of cooperative societies whose business is to provide financial services
to its members. SACCOs are owned by their members through subscription for share capital
and membership fees.
1.3
OBJECTIVES OF THE ACCOUNTING MANUAL
To define the Accounting Policies of SACCOs both in general and specific nature
To ensure that SACCOs carry out their business activities and contracts, in compliance with
Ugandan law and Generally Accepted Accounting Principles
To provide a reference for staff in their day-to-day work and ensure that accounting policies
are well defined and formally documented
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To ensure quality and consistency of accounting records
To act as a training manual especially for new staff recruited in the accounting function of
SACCOs
As far as practicable, each Component has been written to show the Policies, Accounting,
Internal Controls and Financial Reporting Disclosures
1.4
ORGANISATION STRUCTURE OF A MODEL FINANCE DEPARTMENT
AnnualGeneral
Assembly
FinanceCommittee
AuditandSupervision
Committee
Manager
Accountant
Cashier
AccountantsAssistant
a) Financial Year
Each SACCO shall decide on when its financial year ends, preferably 30 June 0r 31
December.
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b) The Finance Hierarchy

The Finance Committee of the Board is charged by the Byelaws and the Cooperative
Societies Statute 1991 with the overall authority to direct the affairs of a SACCO (both
accounting and financial). It is required to ensure that true and accurate books, records and
accounts are kept of the SACCOs money, property, capital, reserves, liabilities, incomes
and expenses. Where the SACCO has employees, the same committee may delegate to an
official or employee (Manager) of the Society such powers as it deems fit.
1.5
SUMMARY OF POLICY STATEMENTS

1.5.1
Policy Statement on Compliance

SACCOs will devise all means to comply with the Cooperative Societies Statute 1992, all applicable
Laws and Regulations of Uganda, the Generally Accepted Accounting Principles, the Cooperative
Regulations 1992 and guidelines for financial institutions and any other applicable laws and regulations
as may be communicated from time to time.
1.5.2
Policy statement on Books of Account

Proper books of Account as defined by the Laws and regulations of Uganda and the Generally
Accepted Accounting Principles shall be kept at all times.
1.5.3
Policy statement on Financial Reporting

SACCO Management shall ensure that proper books of account are maintained and kept, to enable
the preparation of relevant, reliable, consistent and comparable information to assist it in assessing the
financial position and performance of the SACCO and to make accurate and timely economic decisions
and comply with all the relevant Regulations and Guidelines.
1.5.4
Policy statement on Budgets

Management shall prepare short, medium and long term budgets using a participative bottom-up
approach as a basic tool for defining a SACCOs periodic goals and objectives and against which results
will be compared to permit performance evaluations and considerations in change of strategies.
1.5.5
Other Accounting, Operational and Administrative Policies and Procedures

Operational and Administrative Policies and procedures covered in other manuals shall be complied
with such other manuals include the Administration Manual, Personnel Manual, Liquidity Manual,
procurement Manual, Security Manual, Credit Manual and any other manuals approved by
management.
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Other Accounting Policies have been detailed-out in the respective Sections of this
Manual.
1.6
DUTIES OF THE ACCOUNTING AND FINANCE DEPARTMENT

1.6.1
Duties of the Audit and Supervision Committee

a) Perform such functions as the AGA may, from time to time specify in relation to
ensuring sound management of a SACCOs business
b) Carrying out the Internal Audit Function
c) Overall supervision of the Accounting and Finance Department of a SACCO
1.6.2
Duties of the Finance Committee

a) Perform such functions as the Committee may specify in relation to establishing
broad guidelines for a SACCOs tolerance for risk and expectations from
investments.
b) Review and recommendation of a SACCOs budget for approval by the Committee
/Annual General Assembly
c) Introduce measures that may serve to enhance the credibility and objectivity of
financial statements and reports prepared with reference to the affairs of the
SACCO.
Such measures shall include but not limited to
1.6.3
Limits on loan to deposit ratio

Limits on loan to capital ratio
Limits on exposure to single or related customers
Flexible limits on the percentage reliance on a particular deposit liability
category
Limits on maximum and minimum maturities for existing categories of assets
and liabilities
Limits on the sensitivity of the net interest margin on changes in market interest
rates
Maximum percentage imbalance between rate sensitive assets and liabilities
Limits on minimum liquidity provision to be maintained to sustain operations
while longer term adjustments are made
Primary sources of meeting Funds that should be quantified.
General Duties of the Manager
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a) General supervision of the Accountant

b) Approving transactions that are above the authority limits of the Accountant and
the Cashier
c) Budgeting, budgetary controls for the operations and capital projects and budgetary
performance appraisal for the SACCO.
d) Provision of inputs and participation in the preparation of a SACCOs periodic and
strategic plans.
e) Custody, management and control of assets and records thereof.
f) Management of loans, Grants and any other lending and borrowings.
g) Reporting to a SACCOs stakeholders like UCA, UCSCU, AMFIU, shareholders,
employees, management, government etc of any required accounting and financial
information.
1.6.4
Duties of the Accountant (some may be delegated to the Accounts Assistant)

The overall duties shall include but limited to the following
a) Maintenance of Proper Books of Account
To keep proper Books of Account as defined by the Laws and regulations of Uganda
and the Cooperative Statute.
b) Reliable Financial Reporting
To ensure that proper books of account are maintained and kept, to enable the
preparation of relevant, reliable, consistent and comparable information to assist it in
assessing the financial position and performance of the organisation and to make
accurate and timely economic decisions and comply with all the relevant Regulations
and Guidelines.
c) Budgetary control
To prepare short, medium and long term budgets using a participative bottom-up
approach as a basic tool for defining SACCOs periodic goals and objectives and
against which results will be compared to permit performance evaluations and
considerations in change of strategies.
d) To communicate between the Manager, the Staff, the auditors and other superiors
of financial and operational affairs.
Page13 of 164

e) Fixed Assets Management To maintain a comprehensive Fixed Assets Register
Identify fixed asset needs carry out semi-annual physical asset counts of all assets.
f) Planning design monthly activity plans, perform monthly budget variance reviews
and carry out operational and strategic plans.
g) Loan Portfolio Management Ensure that all loan disbursements are properly
documented, posted, monitored in terms of quality and accuracy and correctly
reported on a daily basis.
h) Savings Portfolio Management Manage all the documentation, recording, and
verification and follow up of all accounts.
i) Procurent- Ensure that SACCOs gets value for money and keeps proper
procurement records.
j) Security and internal controls- Jealously guard all SACCO records and software
from unauthorized people by employing appropriate control. Such internal controls
will include, reviewing and validating all batch postings, reports, access controls etc.
k) General supervision of the Cashier
l) Any other duties as may be determined from time to time.
1.6.5
Duties of the Cashier (Teller)

The overall duties shall include but limited to receiving and paying-out cash and
preparing the relevant documents. Such duties include.
a) Ensuring the safety of the Cash, Cheques, Books, vouchers, stamps and all assets
that are still in his/her control
b) Ensuring adequate Cash levels in the Till
c) Receiving all SACCO Cash and cheques irrespective of their sources.
d) Issuing receipts in respect of the Cash and cheques received to the customers,
members and to fellow staff in case of refunds or other payments
e) Ensuring that the physical Cash or value of the cheques received are in agreement
with the documents to support such transactions
f) Ensuring that the physical Cash or cheques received are genuine
g) Updating client and members pass-books with all Cash transactions
h) Maintaining orderliness in the Till. The till must be free of unnecessary things
i) Paying authorized persons and ensuring that the recipients acknowledge receipt of
the payment
j) Ensuring that payments are made to the right people by verifying their identities and
mandate
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k) Promptly informing/consulting the immediate supervisor on any extra ordinary
events or activities and not to take any decisions on such matters without their
consent
l) Accounting for all of the till transactions by preparing the Till Sheet
m) Any other duties assigned by the supervisor
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2.1
POLICY STATEMENTS ON BOOKS OF ACCOUNT
2.1.1
SACCO books of Account shall be kept for a minimum of 10 years
2.1.2
Financial reports namely Balance sheet, Income Statement, Cash Flow Statement, Statement of
Changes in Equity and Notes to the Financial Statements shall be produced annually and as and when
required by Management
2.1.3
Underlying Documents
1) All transactions will conform to the internal control objectives.
2) All transaction will be supported by appropriate vouchers and other sources documents to provide
an audit trail through the accounting system, eliminating redundant writing of documents wherever
possible that identify the business reason for the transaction, who originated the transaction, who
authorized the transaction, who verified the transaction, and archived in such a manner as they are
manageably retrieved.
3)
The Accountant is responsible for the correctness and reliability of all transactions.
4) Transaction authorization limits will be set by the Audit and Supervision Committee and advised
to individuals charged with this authority in writing. Limits refers not only to amounts, but also
to the types of transactions individuals may exercise that authority on.
5) All transactions will be recorded at the time they occur, or batched for end of day processing. In any
event, the days activities will be posted on the day they occur, and will be checked for authorization
and reconciled to authorized amounts.
The objectives of the above policy will be to show a true and fair view of a SACCOs state of
affairs and to explain its transactions and financial position to enable the stakeholders to
determine whether the SACCO is operating in line with its set objectives and in compliance
with the relevant laws and guidelines.
2.2
THE CHART OF ACCOUNTS
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A Chart of Accounts is the coding elements used to classify, record, budget and report financial
transactions. Every transaction must be properly coded to be a valid posting to a ledger.
A SACCOs Chart of Accounts should ensure the liquidity reporting sequence to govern the
structure of the general ledger as shown below. See (Appendix 2) for a detailed Chart of
Accounts.
2.2.1
Basis of Formulation of the Chart of Accounts

The Chart of Accounts has been developed on the basis of three types Ledgers namely
General Ledger (GL) Ledger 1
Savings Ledger (SL) Ledger 2
Loans Ledger (LL)
Ledger 3
General Structure of Account Numbers
Account type
Specific A/C No.
All Account numbers shall comprise of a seven-digit number separated by dashes as

follows XX-X-XXXX. The first digit represents the type of Ledger the next digit
represents the product, the next digit (in between the dashes) represents the
Account-type and the last four digits represent the specific Account Number. This
is illustrated in the table below.
Product
Ledger-type
2.2.2
X -X-
XXXX
This manual suggests five Account-types for all the ledger-types as summarized in
the table below
Account-type
-1-2-3-4-5-
General Ledger
Assets
Liabilities
Equity
Income
Expenses
Loans & Savings Ledgers

Females
Males
Groups
Institutions
Others
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This structure therefore supports the tracking of both Savings and Loans according to
the various products and also according to the Nature of the Account holder (Male,
Female, Group, Institutions, and Others)
2.2.3
The General Ledger (GL)
General ledger shall comprise of all impersonal accounts for the SACCO and shall
also contain Control accounts for the personal Ledgers and sub-ledgers.
The GL shall have five major categorizations as follows.

10-1-XXXX
10-2-XXXX
10-3-XXXX
10-4-XXXX
10-5-XXXX
2.2.4
Assets
Liabilities
Equity
Revenue
Expenses
The Savings Ledger (SL)
All SL accounts shall comprise of a seven digit number separated by dashes as

follows 2X-X-XXXX.
The first digit represents the Savings Ledger (Ledger 2) the digit represents the
savings product, the next digit (in between the dashes) represents the nature of the
account holder and the last four digits represent the specific account number.
For example:
The structure of the Savings Account numbers may cater for up to nine Producttypes and five other categorizations according to the nature of the accountholder(s). This is illustrated in the tables below
Structure of Savings Account numbers according to Product
Account No. Structure
21 -XXXXX
22 -XXXXX
23 -XXXXX
24 -XXXXX
25 -XXXXX
26 -XXXXX
27 -XXXXX
28 -XXXXX
29 -XXXXX
Classification
Savings Product 1 A/C Numbers
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Structure of Savings Account numbers according to the nature of the

Account-holder
Account No. Structure
2X -1XXXX
2X -2XXXX
2X -3XXXX
2X -4XXXX
2X -5XXXX
2.2.5
The SL shall have sub-ledgers to cater for the distribution of Savings either
according to Product or according to the nature of the account-holder
There shall be Control accounts to correspond to the respective sub-ledgers so that
the Trial Balance shall reflect the distribution of savings accordingly.
The Loans Ledger (LL)
2.3
Classification
Female Savers A/C Numbers
Male Savers A/C Numbers
Group Savers A/C Numbers
Institutional Savers A/C Numbers
Other Savers A/C Numbers
The Account-number structure, sub-ledgers and Control-accounts for the Loan

shall be similar to those explained in respect of Savings except that the Loan
account numbers shall start with 3 to signify the Loans ledger (Ledger 3) in other
words their general structure shall be 3X-X-XXXX.
PROPER BOOKS OF ACCOUNT

Section 21 of the Cooperative Societies Statute requires the auditor to express an opinion as to
whether proper books of Account have been kept and whether or not the business
administration of the Society has been conducted efficiently, in line with the corporative
principles, and in accordance with the objectives and byelaws of a SACCO.
A full set of Books of Account that ought to be maintained by a SACCO will include, but not
limited to the following.
Books
General Ledger
Savings Account Ledger (Female A/Cs)
Savings Account Ledger (Male A/Cs)
Loan Ledger (Female A/Cs)
Loan Ledger (Male A/Cs)
Dormant Savings Account Ledger
Register of Members
Books
Fixed Asset Register
Savings Registers per Ledger
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Loan Registers per ledger

Reserve Book (Cash book)
Incoming Cheque Register
Outgoing Cheque Register
Cash count book
Minute Books for each Committee and Staff meetings
Correspondences files (as appropriate)
Certificate of Registration
Byelaws
Memorandum of Association
Such other books and records as the committee or registrar
may decide from time to time.
The contents and formats of these books and records are set out in the respective appendices
where necessary.
2.3.1
Basis of Preparation of Books of Account

Section 12 of the Cooperative Regulations 1992, requires that a SACCOs Books of Account
shall be prepared in Compliance with GAAPs. GAAPs include:
1) Principle of regularity: Regularity can be defined as conformity to enforced rules and
laws. This principle is also known as the Principle of Consistency.
2) Principle of sincerity: According to this principle, the accounting unit should reflect in
good faith the reality of the SACCOs financial status.
3) Principle of permanence of methods: This principle aims at allowing the coherence
and comparison of the financial information published by the SACCO.
4) Principle of non-compensation: One should show the full details of the financial
information and not seek to compensate a debt with an asset, revenue with an expense,
etc.
5) Principle of prudence: This principle aims at showing reality as is. One should not
try to make things look better or worse than they actually are. Typically, revenue should
be recorded only when it is certain and a provision should be entered for an expense
which is probable.
6) Principle of continuity: When stating financial information, one should assume that
the business will not be interrupted. This principle is mitigating the previous one about
prudence: assets do not have to be accounted at their disposable value, but it accepted
that they are at historical value (See depreciation).
7) Principle of periodicity: Each accounting entry should be allocated to a given period,
and split accordingly if it covers several periods. If a client pre-pays a subscription (or
Page19 of 164

lease out, etc), the given revenue should be split to the entire time span and not counted
for entirely on the date of transaction.
2.3.1
Ledgers
1) A Ledger, in the context of this manual is a collection of Ledger Cards that relate to a
similar activity or aspect of accounting for example, Savings, Loans etc. Ledgers that
relate to personal Accounts e.g. Savings and Loans must have a Control Account and
shall be categorized into sub Ledgers.
2) SACCOs shall maintain the following ledgers namely Savings ledger, Loan Ledger, and
General Ledger (GL).
3) A General Ledger is a collection of Ledger cards that relate to impersonal Accounts e.g.
Fixed Assets, Equity, Bank, Income and Expenditure etc. It also contains Control
Accounts for the Savings and Loan Ledgers and its structure is governed by the Chart
of Accounts.
4) Both the Savings and Loan Ledgers shall be categorized into Sub Ledgers for the
different types of Accounts (Females, Males Groups and Institutions). The purpose is to
facilitate the generation of qualitative information that will be used for updating the
PMT.
5) A sub Ledger is a collection of personal Ledger cards that relate to a specific operational
activity and arises out of the need to reclassify the main Ledger so as to generate more
qualitative information
6) A Control Account is an accounting record that contains the daily totals of transactions
of a particular set of Accounts for example total savings withdrawals/deposits, total
loan disbursements/repayments and so on. The source of information for updating
Control Accounts is the Day Sheets1 (DOC15)
7) A Ledger Card is an accounting record that is maintained in respect of a particular
Account Title. Each Account Title must have a unique Account number derived from
the structure of the Chart of Accounts for example all Savings Accounts will comprise
of seven digits starting with 2 and structured as 2X-X-XXXX
2.3.2
Updating Savings and Loan Ledgers (Posting the transactions)

1) This activity shall be performed by the Accountant or Accounts Assistant and will be
supervised by the Manager or the most immediate supervisor. Where resources permit,
the Official in charge of updating the Ledgers should be different from the Cashier so
as to uphold the Segregation of Duties Control.
RepresentsthedailyTrialBalanceofallAccountsthathavebeenoperated
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2) The Ledgers must be updated on daily basis so as to ensure that their balances are as
current as possible
3) The process of updating the Savings and Loan Ledgers
i. The sources of information used to update the Ledgers are set out in the table
below.
Information source
1. Savings deposit slips
2. Savings Withdrawal Slips
3. None Cash Savings vouchers
4. Loan repayment slips
5. None Cash loan vouchers
6. Disbursements vouchers
Ledger cards that are Updated

-Saving Ledger cards
-Loan Ledger cards
ii. Prior to this, the Teller processes (see Cashiering) must be completed and the
Day Sheet must have been prepared and approved
iii. The Savings Ledger cards (DOC12) should be updated before the close of each
day so that they have up-to-date information at all times.
The following should be observed.
All Cash deposits must be recorded/posted in the Credit column of the

Savings Ledger card while Cash withdrawals must be recorded/posted in
the Debit column. The corresponding entries shall have affected Teller
Cash and must not be passed again.
The double entry for none cash transactions shall be written on the face
of the vouchers and must be respected while posting
All Cash deposit and withdrawal vouchers must be stamped POSTED

and initialed by the Official who posted them before they are filed or
kept
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None Cash transactions must be approved by the manager before they

are posted to the Ledger Cards and thereafter they should be stamped
POSTED and filed or kept.
iv. The Loan Ledger cards shall be updated after a split (principal, interest income,
Interest arrears, surcharge etc) of the total amount paid by the client or
transferred from the clients savings account has been done and written on the
face of the voucher preferably in red ink.
v. The split of the repayment shall be symbolized as in the table below

Item of the Split
Principal
Current Interest
Accrued Interest
Surcharge/Penalty
2.3.3
Symbol
P
I
AI
S
Account to credit
Principal loan
interest Income
Interest Receivable
Other Loans Income (as per Chart of Accounts)
Updating the General Ledger (Posting GL transactions)

supervised by the Manager or the most immediate supervisor.
2) The Ledger cards must be updated on daily basis so as to ensure that their balances are
as current as possible
3) The process shall start by having the Day Sheet prepared by the Accountant and
approved by the Manager. The preparation of the Day Sheet is as follows.
All of the days cash vouchers, none cash vouchers, receipts (for income and
shares), and payment vouchers shall be categorized according to their respective
Ledgers
Expenditure vouchers shall be categorized by Account code and recorded in the
debit column of the Day Sheet
Disbursement vouchers shall be categorized by Ledger and recorded in the debit
column of the Day Sheet
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4) The Accountant or designated official shall prepare and sign the Day Sheet (DOC15) by
classifying and totaling all of the days vouchers and receipts and deriving appropriate
accounting entries. A Day Sheet represents the daily Trial Balance of all Accounts that
have been operated and therefore must balance.
5) The Manager shall approve the Day Sheet after checking it against underlying
documents before its contents are used to update the respective GL accounts
6) The figure of the Day Sheet are then used to update the GL and afterwards both the
Day Sheet and underlying documents are stamped POSTED and filed
The sources of information used to update the Ledgers are set out in the table below.
Information source
1. The Day Sheet
2. Cheque Payment vouchers

3. None Cash vouchers (bank charges)
2.3.4
Ledgers that are Updated

-Income Ledger cards
-Expenditure Ledger cards
-Equity Accounts
-Ledger Control Accounts
Bank Accounts
Balancing the Savings and Loan Ledgers

supervised by the Manager or the most immediate supervisor.
2) Balancing the Savings and Loan Ledgers shall be done regularly as management may
decide.
3) The process of Balancing the Ledgers
Each Ledger must have a Control Account in the GL that shall be up-dated from
the Day Sheet (DOC15)
The individual Ledger Card balances (for each sub Ledger) shall be
extracted/machine-listed and the extracted totals compared with balances on the
Page23 of 164

Control Accounts. Ideally the balance on the respective Control Accounts should
agree to the total of the listing.
The Accountant or ledger keeper must ensure that all transaction vouchers have
been posted to their respective Ledger Cards before balances are extracted.
When each ledger has been confirmed/balanced, the lists of balances shall be signed
by the Accountant and approved by the Manager before they are filed or kept.
4) Balancing the number of personal accounts
Account-opening and Closing Registers (BK1) shall be maintained with respect to

each sub ledger and their records shall be summarized on a monthly basis so as to
provide accurate information on the number of Accounts per category as at the
close of every month. The details are in the respective Chapters of this manual.
The total number of accounts in a particular sub ledger listing of monthly balances
must balance with the respective Account-opening and Closing Register.
Where the number of accounts is less than the number in the Opening and Closing
Accounts Register, check for the opened accounts entered twice and closed
accounts entered twice by checking the entries in the register
5) Dormant Savings Accounts
A savings account shall be declared dormant if it does not transact in six

consecutive months
A Dormant Account Register (shall have a similar lay-out as the Account Opening
Register) shall be maintained
A listing of dormant savings accounts with their respective balances shall be

extracted from the sub ledgers in the process of balancing ledgers and the ledger
cards shall be relocated to the Dormant Accounts Ledger. The following entries
shall be passed using the total of the listing:
A/C code
Account Name
Debit
Shs
X
Credit
Shs
Saving (According to Sub-ledger)

Dormant Savings Accounts
X
Narration: Being extraction of dormant accounts from (Sub-Ledger) for
the month of
Movements from the Dormant Accounts for reactivation shall always be recorded
in the Dormant Accounts register and shall be authorized by the Manager. The
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ledger cards shall be replaced into the respective Sub Ledger and the following
entries shall be passed for every activated account:
A/C code
Account Name
Debit
Shs
X
Credit
Shs
Dormant Savings Accounts

Saving (According to Sub-ledger)
Narration: Being Activation of .. (Members name)s dormant accounts
2.4
The records of the dormant account register shall be summarized on a monthly

basis so as to provide accurate information on the number of dormant accounts as
at the close of every month.
TRIAL BALANCE
1) A Trial Balance (TB) is a listing of all GL balances as at a certain date presented in four
columns the first column to the left represents the Account code, the second represents
the Account Title, the third takes on the debit balances and the fourth takes on the Credit
Balances.
2) A TB shall be produced and signed by the Accountant on a monthly basis after all the
ledgers have been balanced and shall be and approved by the manager. A balanced TB
shall prove that double-entry was observed while posting transactions.
3) The process of extracting the TB
2.5
i.
The Ledgers and sub ledgers shall first be reconciled with their respective control
accounts (See 2.3.3 iii)), and all the GL ledger cards updated.
ii.
The individual Ledger Card balances (for each sub Ledger) shall be
extracted/machine-listed and then fed into the format of the TB described in subSection i) of this Section. The contents shall be chronologically arranged
according to the chart of Accounts.
iii.
The columns shall be totalled and ideally total debits must be equal to total credits
COMPARATIVE INFORMATION
Comparative information shall be disclosed in respect of a previous period for all numerical
information in the financial statements. Comparative information shall be included in narrative
Page25 of 164

and descriptive information when it is relevant to the understanding of the current periods
information.
2.6
RELATED PARTIES
2.6.1
Definition of a Related Party

A Party is related to an entity if it has the capacity to exercise significant financial or
operational control e.g. subsidiaries, joint ventures, jointly controlled entities, members
of the key management personnel of the entity or its parent, close members (Partners,
Children or Parents) of other related parties, Post employment benefit plans for the
benefit of employees.
2.6.2
Definition of a Related Party Transaction

A related party transaction is a transfer of resources, services or obligations between
related parties, regardless of whether a price is charged.
2.6.3
Related Party Disclosures

If there have been transactions between related parties and a SACCO, the SACCO shall
disclose the nature of the related party relationship as well as information about the
transactions and outstanding balances necessary for an understanding of the potential
effect of the relationship on the financial statements. At a minimum, disclosures shall
include:
a) The amount of the transactions
b) The amount of outstanding balances and
Their terms and conditions, including whether they are secured, and the nature
of the consideration to be provided in settlement and
Details of any guarantees given or received
c) Provisions for doubtful debts related to the amount of outstanding balances, and
d) The expense recognized during the period in respect of bad or doubtful debts due
from related parties.
2.7
INCOME STATEMENT
SACCOs shall present income statements which group income and expenses by nature and
disclose the amounts of the principal types of income and expenses.
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Disclosures
The disclosures in the Income Statement or the Notes to the Financial Statements should
include, but are not limited to, the following items of income and expenses.
2.8
Interest and similar income

Interest expense and similar charges
Fee and commission expense
Gains less losses arising from investment securities
Other operating income
Losses on loans and advances
General administrative expenses and
Other operating expenses
BALANCE SHEET
SACCOs shall present balance sheets that group assets and liabilities by nature and list them in
an order that reflects their relative liquidity and demandability. It will show the following:
Disclosures
The disclosures in the balance sheet or the notes to the financial statements should include, but
are not limited to, the following assets and liabilities.
Assets
Cash and balances with the banks

Government and other securities held for dealing purposes
Placements with, and loans and advances to, other SACCOs/ Banks
Loans and advances to customers and
Investment securities.
Liabilities
Deposits from other SACCOs/ banks

Other money market deposits
Amounts owed to other depositors
Other borrowed Funds.
Members deposits
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Equity
2.9
Share Capital
Retained earnings
Share Transfer Fund (Duty to set up this Fund is imposed on the SACCOs by Section 43
of the Regulations)
A Reserve Fund into which 10% of the annual net surplus must be put. (Duty to set up this
Fund is imposed on the SACCOs by Section 34 of the Regulations)
CASH FLOW STATEMENTS

1) Cash is the life-blood of SACCOs business. Therefore, information on its cash flows is
vital for its proper financial management.
2) SACCOs will provide information on the historical changes in cash and cash equivalents.
This shall be done by way of a cash flow statement, which classifies cash flows during the
period into operating, investing and financing activities. These are defined as follows.
2.
0
2.110
Operating activities are the principal revenue producing activities of SACCOS.
Investing activities are the acquisition and disposal of long-term assets and other
investments not included in cash equivalents.
Financing activities are activities that result in changes in the size and composition of
SACCOs' share capital and borrowings.
Cash equivalents are short-term and liquid investments that are readily convertible
to cash.
STATEMENT OF CHANGES IN EQUITY

1) A separate component of SACCOs financial statements, called a statement of changes in
equity shall be presented showing:
i.
The net profit or loss for the period
ii.
Each item of income and expense, gain or loss which, as required by other
standards, is recognized directly in equity, and the total of these items and
iii.
The cumulative effect of changes in accounting policy and the correction of

Fundamental errors dealt with under the Benchmark treatments.
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2) The accounting policies section of the notes to the Financial Statements shall describe the
following:
2.
11
1
2.1
i.
The measurement basis (or bases) used in preparing the Financial Statements and
ii.
Each specific accounting policy that is necessary for a proper understanding of the
Financial Statements
NOTES TO THE FINANCIAL STATEMENTS

1) The notes to the Financial Statements shall:
o Present information about the basis of preparation of the Financial Statements and the
specific accounting policies selected and applied for significant transactions and events
o Disclose the information required by GAAPs that is not presented elsewhere in the
Financial Statements, and
o Provide additional qualitative information which is not presented on the face of the
financial statements but that is necessary for a fair presentation.
2) Notes to the Financial Statements shall be presented in a systematic manner. Each material
item on the face of the balance sheet, Income Statement and cash flow statement shall be
cross-referenced to any related information in the notes.
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3.1
POLICY STATEMENTS
Budgets are the basic tool used to define SACCO goal and objectives for the current year of a
SACCOs strategic plan, and against which results are compared to permit changes in strategy
to improve performance. Each unit and/or activity can be incorporated in the budget to ensure
results of operations of all components of a SACCOs operation can be measured and
evaluated. Each unit is responsible for performance goals included in the planning process to
insure their commitment to the goals as well as their understanding of the goals.
3.1.1
SACCOs shall develop strategic plans (covering at least 3 years), reviewed annually, to ensure that
annual budget strategies are still in line with it.
3.1.2
Management will be responsible for providing an environmental analysis and projections for key budget
assumptions to all budget holders, as well as defining units and/or activities to be included in the budget
process.
3.1.3
Each budget holder will be responsible for preparing their own projections for their unit for the coming
year, considering external factors in their own operating environments as well as the key budgetary
assumptions provided by Management.
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3.2
3.1.4
The final budget be prepared and reviewed by the Audit and Supervision Committee to ensure that it is
realistic and consistent with a SACCOs longer-term objectives, and will be approved by the Board of
Directors.
3.1.5
Monthly budget variance reports shall be produced for monthly reviews by management, and the Board
as required. Management will establish guidelines for the reporting of budget variances for individual
line items as well as net profit.
THE BUDGET PROCESS

3.2.1
The Audit and Supervision Committee

The Audit and Supervision Committee shall hold a final meeting with management to
ensure that the budgets are in line with the SACCOs mission and achieve interdepartment coherence. The committee shall discuss the draft budget with management
before it is submitted to the Board of Directors. The minutes of the meeting shall be
documented to ascertain the action points.
3.2.2
Budget Presentation To The Board

The Audit and Supervision Committee shall present the agreed budget to the Board of
Directors/Annual General Assembly for approval. Should any amendment be required,
these shall immediately be communicated to the Audit and Supervision Committee for
corrective action.
3.2.3
Budget Reviews
Management shall continuously review their budgets against prevailing conditions to
ensure that those budgets are realistic. Where amendments to the budget are required, a
report shall be submitted to the Audit and Supervision Committee. The procedure of
approval of the supplementary budget shall be similar to that for the original budget.
3.3
BUDGETARY PERFORMANCE AND CONTROL

3.3.1
The Accountant shall prepare a consolidated monthly budgetary performance report for
management. This report shall show comparison between actual income and
expenditure and cash flows against budget.
3.3.2
The variances in value and percentage shall be shown together with detailed notes
explaining the causes of the variances. In addition, the corrective action to be taken shall
be indicated.
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4.1
POLICY STATEMENT
All Cash and cheque transactions of the SACCO must be handled by the Cashier. All Cash and cheques
received during the day must be handed over to the Accountant for onward transmission to the Vault/Safe
4.2
CASHIERING
Cashiering is the process of carrying out all of the activities implied by the responsibilities of a
Cashier as spelt out in 1.6.4. The details of such activities are as follows.
4.2.1
Till Management
1) Till management involves the planning, organising and controlling of all the Till
Sheet activities so as to ensure that services to clients and members are smooth and
free of inaccuracies whether intentional or otherwise. It therefore follows that all the
staffs that have a role to play in Cash management, have a role to play in Till
management but the cashier is particularly responsible for this.
Page31 of 164

2) The following guidelines shall serve to ensure sound Till management
a) Each Cashier shall be provided with a PAID and RECEIVED Stamp bearing a
SACCOs name and the Cashiers identification number.
b) The Cashier will also be provided with the following stamps:
Passbook stamp
Duplicate stamp
c) Cashiers are strictly prohibited from altering or preparing clients deposit and
withdrawal vouchers.
d) The Clients shall countersign all alterations of deposits and withdrawal
vouchers.
e) All withdrawal vouchers shall be signed and countersigned by the clients and
where applicable record his/her telephone number at the back.
f) Counterfeit notes shall be confiscated from the client and perforated, however
this must be done with due care in order not to cause undesired reaction from
the affected clients. Refer to the Manager if it gets complicated
g) Cash handed over to the accountant shall be counted in the presence of the
concerned cashier and the accountant shall endorse/initial on the Cash count
form to signify agreement with the record
h) SACCOs shall maintain a CASH OVERAGES ACCOUNT in their General
Ledgers to which all Cash overages shall be credited. The (none cash) voucher
to recognise the overage shall be prepared by the Cashier and approved by the
Manager after the Accountant has verified the Till Sheet. The double entry is
A/C Code
Account Name
Debit
Shs
X
Credit
Shs
Cash
Cash Overages A/C
Narration: Being Cash overage from (Tellers name)
i) Reversals from the Overages account shall be on the basis of proven,

documented and approved reasons. None cash vouchers, with such
documentation(s) as the attachment(s) shall be prepared by the Accountant and
approved by the Manager before reversals are effected. The double entry is
A/C Code
Account Name
Debit
Shs
X
Credit
Shs
Cash Overages A/C

Credit Clients A/C
X
Narration: Being Correction of Cash overage that resulted from the omission/
misstatement of (Clients name)s savings deposit/ loan repayment/ fees
Page32 of 164

payment etc, on (Date) by (Tellers name).
j) SACCOs shall NOT maintain a CASH SHORTAGE ACCOUNT in their
General Ledgers instead all shortages shall be debited on the respective Tellers
debtor Accounts. The (none cash) voucher to recognise the shortage shall be
prepared by the Cashier and approved by the Manager after the Accountant has
verified the Till Sheet. The double entry is
A/C Code
Account Name
Debit
Shs
X
Tellers Debtor A/C

Cash A/C
Narration: Being Cash Shortage from (Tellers name)
Credit
Shs
X
k) Cash shortages shall be recovered from the Cashiers salary within reasonable
time or at the earliest opportunity.
l) Persistent cash excess OR cash shortages in the Till shall be investigated and
appropriate action taken.
4.2.2
Preparing the Till Sheet

1) Preparing the Till Sheet (DOC16) is accounting for all the Cash received and the
payments made for the day. It therefore follows that all till transactions must be
captured on the Till Sheet and that the Till Sheet must balance
2) The following guidelines shall serve to ensure proper preparation of the Till Sheets
a) Each Cashier shall prepare his or her own Till Sheet and sign it before handing
over cash to the Accountant.
b) Each transaction (personal or none personal, like expenses and income) shall
constitute a complete record to be entered onto the Till Sheet. The voucher
number, account name, account number and the amount shall be captured in
the respective columns.
c) The Till Sheet shall be prepared in an orderly manner i.e. all entries must flow in
the order of their categories. The categories shall be set according to Ledgers so
as to facilitate subsequent processing
d) Loan repayments shall be recorded onto the Till Sheet as a whole the split into
interest, principal surcharge etc, shall be done while posting the entries onto
Ledger cards
Page33 of 164

e) The following are examples of transactions that must be entered on the
respective sides of the Till Sheet.
Debit side
Cash from reserve
Cash from Bank
All cash receipt
Savings Deposits
Loan repayments
Cash Overages
Physical Cash Balance
Credit side
Savings withdrawals
Loan Disbursements
All other Payments
Cash shortages
f) Cheque receipts shall be entered on the credit side of the Till Sheet after cash
transactions have been balanced. There should be some space to separate them.
4.3
SAFE/RESERVE/VAULT CASH MANAGEMENT

Safe or Vault Cash is the Cash that is kept away from the main operating area for safe custody
and for providing a buffer from which immediate cash requirements can be satisfied
The Safe can also be used for keeping other valuables like client security documents, the
SACCOs important documents etc. A register must be maintained for every thing that is kept
in the Safe and must be updated with every movement of such contents, whether permanent or
temporary.
4.3.1
Reserve Cash Management

i) Till management involves the planning, organising and controlling of all the
activities that affect the SACCOs Cash-at-Hand so as to ensure that services to
clients and members are smooth and free of unnecessary Cash shortages, while at
the same time avoiding the accumulation of too much Cash in the SACCOs hands
for security reasons.
ii) The following guidelines shall serve to ensure sound Reserve Cash management
a) An analysis book called the RESERVE BOOK (BK2) shall be maintained by
the Accountant and shall record all the transactions between Vault Cash and the
Cashiers and also provide a record of the SACCOs Cash-at-Hand as at the
close of business on any working day.
b) Transactions for a new month shall start on a fresh page
Page34 of 164

c) A Cash account shall be maintained in the GL to correspond to the reserve
book
d) The Audit and Supervision Committee shall carry out spot cash counts (and
verify Safe contents), and write a report as evidence of the exercise
e) Adequate cash to cater for daily withdrawals and petty payments shall be
maintained in the Vault. The benchmark may be 15 to 20% of total savings
depending on the SACCOs deposit/withdrawal patterns
f) Special days when cash requirements are projected to be higher e.g.
Disbursement days must be planned for a week ahead so that authority to
withdrawCashfromBanksissecuredintime.
4.4
TRANSFERING CASH
This section provides guidelines on transferring cash from the Vault to the
from the Bank to the SACCO.
4.4.1
Bank and also
Transferring Cash from Vault to Bank

i) All the possible security precautions must be taken while moving Cash from vault to
Bank.
ii) The accountant shall raise a none-cash voucher, which shall be approved by the
Manager. The accounting entries are as follows
A/C code
Account Name
Debit
Shs
X
Credit
Shs
Bank
Cash
X
Narration: Being transfer of Cash from Vault to the (Bank name) A/C.
iii) A copy of the deposit slip duly stamped and endorsed by the Bank cashier shall be
attached to the none-cash voucher.
Page35 of 164

CHAPTER FIVE: BANK PROCEDURES
5.1
POLICY STATEMENT
SACCOS shall operate Bank Savings or Current Accounts with Commercial banks for their excess cash.
5.2
OPENING OF BANK ACCOUNTS

SACCOS shall follow the procedures stipulated by the bank in which an account is to be opened. Copies of the application
shall be maintained in a Bank Correspondences file at SACCOs offices. A separate file shall be maintained for each
bank account for correspondence with SACCOS banker. Monthly bank statements and other correspondences shall be
kept in these files.
5.3
BANK SIGNATORIES
Page36 of 164

5.4
5.3.1
SACCOS shall have at least two signatories to each of the bank accounts. The
Committee in a Board resolution must approve selection of bank signatories on The
SACCO bank accounts in writing. The Committee shall also authorize management to
approve the opening of bank accounts for SACCO.
5.3.2
The Manager shall be the Principal Signatory while the Treasurer or the Chairperson
shall be the second signatory. The chairperson shall only sign in the absence of the
Treasurer.
5.3.3
The authority levels of each signatory shall be documented. In the event of a signatory
leaving the SACCO, the bank shall be instructed in writing to remove him or her from
the signatories list immediately.
CHEQUE BOOK MAINTENANCE AND CHEQUE PAYMENTS

5.4.1
Cheque Books and the Cheque Register

i) There shall be an Outgoing Cheque Register (BK10) in which all Cheque payments
shall be recorded. The signatories to the accounts shall initial against the entry in the
Cheque register upon authorizing the transaction
ii) The Accountant shall be responsible for the safety of both the Cheque Books and
the Register and they shall be under key and lock at all times
5.4.2
Cheque payments
i) All Cheque payment shall be supported by Cheque payment vouchers duly
approved by the relevant authorities depending on the nature of the transaction and
the amounts involved.
ii) All Cheque payment vouchers shall be supported by, at least one of the following
a) Duly approved Payment Requisition form
b) Original Invoice and/or receipt
c) Any other documents in support of the transaction
iii) Where a payment is settling an outstanding obligation, the creditors reconciled
statement should be attached among the supporting documents.
iv) The Accountant will attach the supporting documents with a cheque payment
voucher and forward it to the Manager for verification and approval. The
verification shall include checking the following
a) Arithmetic accuracy
Page37 of 164

b)
c)
d)
e)
f)
Creditor details and balances

Budget Status with respect to the payment
Adequacy and appropriateness of supporting documents
Correctness of procurement procedures
Account codes, and the double entry, their authorization as well as reviewing
reconciliation statements if any.
v) All payment vouchers together with the related supporting documents shall be date
stamped PAID immediately after payment.
vi) The payment accountant shall ensure that a receipt is obtained and that the payee
signs on the payment voucher or delivery book in acknowledgement for payment.
vii) Where receipts may not be easily obtainable e.g. payments to individuals, a
photocopy of the paid-out Cheque shall be made and the recipient of the Cheque
shall sign on it
5.5
CASH AND CHEQUE DEPOSITS AND CHEQUE CLEARANCE

Cash and Cheques may be deposited on the SACCOs Bank account by either the SACCOs
Management or by the SACCOs clients especially as they pay back loans
Cash deposits by the SACCOs Management has already been covered under (Transferring
Cash from Vault to the Bank) section 4.4.1
5.5.1
Cash and Cheque Deposits on the Bank Account by Members

Cash and Cheque deposits on the Bank Account by Members shall be under special
arrangement between the SACCO and the Bank (the SACCO does not have to open a
separate Account for this). The purpose for this is to facilitate tracking of such
transactions on the Bank statement and to ease the reconciliation process.
The special arrangement shall emulate the set up of a School fees Account by a school
as follows
a) There shall be special deposit slips made in quadruplicate with features such as the
SACCOs account name and number, a serial number and labelling of the copies i.e.
Bank copy, 2 SACCO copies and, Clients copy.
b) Clients wishing to directly deposit their repayments onto the Bank account shall be
supplied with a few special deposit slips
c) A memorandum register of such clients may be maintained for reference purposes
Page38 of 164

d) Clients who pay back in this arrangement shall, at the earliest opportunity provide a
copy of the special deposit slip to the accountant who shall keep it on their loan file
or Loan Ledger Card
e) Crediting the respective accounts shall be on the basis of copies that are directly
obtained from the Bank or on the basis of transactions that are directly traceable to
the Bank statement. Duly supported and approved none-cash vouchers must be
raised for such transactions
5.5.2
Cheques from Members

i) There shall be an Incoming Cheque Register (BK5) to record the particulars of all
Cheques received as follows
a) Name of the Client or Member
b) Account number of the Client or member
c) Bank on whom the Cheque is drawn and the Account number
d) Cheque number
e) Receipt number issued to the depositor
f) Date of deposit into the Bank
g) Date of clearing or bouncing
ii) Incoming cheques shall be banked at the earliest opportunity but a cost benefit
assessment must be done where Banks are significantly distant from the SACCO
premises
iii) Crediting the respective accounts shall be on the basis of clear evidence from the
Bank that the Cheque actually cleared and such evidence shall, where applicable be
attached to the none cash voucher raised in that regard
iv) The following accounts shall be maintained to cater for incoming Cheque
transactions
Incoming Cheques (Current Asset account)
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Un-cleared Cheques (liability Account)
v) The accounting treatment of Incoming Cheques shall be as follows

a) On receiving the Cheque
A/C Code
Account Name
Debit
Shs
X
Credit
Shs
Debit
Shs
X
Credit
Shs
Incoming Cheques
Bank
X
Narration: Being recognition of Cash/Cheque number from
(Members name) for (Purpose of Cheque received)
b) On depositing the Cheque into the Bank

A/C Code
Account Name
Bank
Incoming Cheques A/C
X
Narration: Deposit of (Members name)s Cheque number ..
c) On receiving evidence that the Cheque cleared

A/C code
Account Name
Debit
Shs
X
Credit
Shs
Un-cleared Cheques A/C

Members Savings A/C
X
Narration: Clearance of Cheque number from (Members name) for
(Purpose of Cheque received)
d) On receiving evidence that the Cheque Bounced
Page40 of 164

A/C Code
Account Name
Debit
Shs
X
Credit
Shs
Incoming Cheques
Bank
X
Narration: Being reversal of bounced-Cheque number from (Members
name) for (Purpose of Cheque received)
e) On issuing the Bounced Cheque back to the Member

A/C Code
Account Name
Debit
Shs
X
Credit
Shs
Un-cleared Cheques
Incoming Cheques
Narration: Return of bounced-Cheque number to (Members name)
vi) All costs associated with processing Incoming Cheques shall be charged to the
beneficiaries/depositors of the Cheques by debiting their savings accounts and
crediting the Bank account (after raising the relevant vouchers). This shall be done
at the earliest opportunity as clients may withdraw all of the free balance from their
accounts before the charges are recovered.
vii) An extract of pending Cheques shall be made at every month end and
reconciled/compared to the respective Account balances
5.6
CASH WITHDRAWALS FROM THE BANK

i) Cash withdrawals from the Bank shall be done by an agent to the account whom shall be
appointed by the Board.
ii) All feasible security precautions (armed guards, bullion van, reliable transport, means of
quick communication, insurance etc) shall be taken with regard to cash in transit from the
Bank to the SACCO premises and vice versa.
iii) A Cheque payment voucher shall be raised in the names of the agent and shall be given to
the Cashier together with the withdrawn cash so that the transaction is incorporated in the
Cashiers transactions for the day
iv) The accounting entries are implied by the Till Sheet
Page41 of 164

5.7
BANK RECONCILIATION
i) Monthly Bank statements shall be obtained from the Banks by the 3rd of every month or at
the earliest opportunity so that Bank reconciliations can be prepared in time
ii) Both the Bank statement and the Bank Ledger card (which represents the Cash book side of
the Bank A/C) shall be photocopied and used in the reconciliation process as follows
a) All Bank charges shall first be extracted from the Bank statement and posted on the
Bank ledger card and Bank charges expense account as below (after raising the relevant
vouchers)
Account code
Account Name
Debit
Shs
X
Credit
Shs
Bank charges
Bank
X
Narration: Being Bank charges on the (Banks name) account for the
month of
b) Entries that appear on both the Bank statement and the
ticked
Bank Ledger card shall be
c) A Bank reconciliation statement shall then be prepared according to the format in

(FM13)
d) Reconciling items that remain outstanding for unreasonably long periods shall be
reported to the Audit and Supervision committee so that appropriate action can be
taken on them
5.8
PRESENTATION IN THE FINANCIAL STATEMENTS

i) SACCOs, in their Financial Statements, shall report Bank balances as per
cards and not Bank Balances as per Bank statement.
Bank Ledger
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6.1
POLICT STATEMENT
SACCOs shall take all the steps necessary to ensure sound loan management because loans form their biggest
asset and the biggest source of revenue
6.2
TYPES OF LOANS
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SACCOs may have a variety of loan products depending on the needs of their clients and
members. The loan products and the appropriate disbursement methods are summarized in the
table below
Loan Type
Agricultural loans
Asset Financing loans
Commercial loans
Low Salary earners loan Scheme
School fees loans
Solar energy loans
6.3
Disbursement Procedure
Hard cash/transfer to Savings Account
The SACCO buys the Asset for the client and retains title
till the loan is paid off
Hard cash/Transfer to savings Account
Hard Cash/Transfer to Savings Account
Hard Cash/Transfer to Savings Account
Hard Cash/Transfer to savings Account
LOAN DISBURSEMENTS
i) Loans shall only be disbursed to members whom have gone through all the steps of the
appraisal process (these are covered in the lending manual).
ii) The responsibility of the Accountant shall be to ensure compliance with guidelines laid
down in the lending manual. The following questions, for instance shall be answered YES
before a loan is disbursed.
1.
2.
3.
4.
5.
Whether the recipient applied for the loan.

Whether the recipient is a member of the SACCO.
Whether the recipient was appraised by a SACCO Official.
Whether the loan was approved by the loan committee.
Whether all the required documentation for the loan is on file.
iii) All members whom have accessed loans from the SACCO shall have loan files which shall
contain the following with respect to each loan disbursed to them.
a)
b)
c)
d)
Loan application
Appraisal details
Copy of receipt in respect of loan processing fees
A sketch map to their residences and or work places
e)
f)
g)
h)
i)
The members contacts (persons, telephone number(s), LC officials etc)

The collateral securities pledged (if any)
Copy of the disbursement voucher
Paid-up Loan Ledger Card(s)
Any other necessary documents
iv) Irrespective of the method of disbursement, the recipient must acknowledge receipt of the
loan by signing on the relevant documents
Page43 of 164

v) Where cash disbursements involve large sums of money, the Accountant or Manager may
assist the cashier to disburse so as to give members some confidentiality however, all the
disbursement vouchers and the accountability for the Cash disbursed shall be handed over
to the Cashier for incorporation into the Till Sheet.
6.4
LOAN REPAYMENTS
i) Loans repayments may be received in Cash or through none cash transactions that arise out
of direct deposits onto the SACCOs Bank account, transfers from Savings accounts and
other accounting adjustments. The repayments may be split into
a) Principal
b) Interest
c) Surcharge or Penalties
6.5
RECORDING LOANS
6.5.1
On Disbursement
i) The Accountant or Loan Official shall start a new Loan Ledger card for each loan
disbursed.
ii) The Cashier, in his or her Till Sheet, shall record loan disbursements on the credit
side, because they are a cash outflow.
iii) The Accountant, in his or her Day sheet, shall record Total loan disbursements per
Loan Ledger or category on the debit side, because they are an increase in the
current Assets.
6.5.2
On Receiving Repayments
i) The Cashier, in his or her Till Sheet, shall record loan repayments as a whole
(because the basis of splitting may not be readily available to him or her)
ii) Splitting the repayment shall be the responsibility of the Accountant and shall be
done concurrently with the posting of repayments onto the Loan Ledger cards.
iii) The priority of recovering the different elements of a loan repayment shall be as
follows
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Element
Surcharge or penalties
Interest arrears
Current Interest
Principal arrears
Current Principal
Prepaid Principal
Prepaid Interest
Priority
First
Second
Third
Fourth
Fifth
Sixth
Last
iv) The split of the transaction, according to the above priority, shall be written on the
face of the voucher preferably in red ink
6.6
LOAN LOSS PROVISIONING AND WRITE OFFs

6.6.1
Meaning of Loan Loss Provisioning

i) Loan loss provisioning is an accounting adjustment on the profit or loss position of
a SACCO and its objective is to provide or avail a reserve against which
unrecoverable loans can subsequently be written-off instead of affecting the
prevailing or subsequent profit or loss position.
ii) Advantages of Loan Loss provisioning
a) Provisioning is a standard accounting practice and requirement and therefore
upholding it is upholding compliance with such standards
b) Bad debts expense (specific) is an allowable deduction according to Section 24
of the Income Tax Act and therefore the SACCO shall have less taxable profits
and hence less tax liability if it provides for loan loss.
c) Loan Loss Provisioning brings the SACCOs profit position closer to reality
6.6.2
Policy on Provisioning
All doubtful loans shall be provided for in accordance with the CGAP guidelines and best
practice. The provisioning shall be in respect of only the principal in arrears because interest
and other fees are recognized on modified cash basis.
SACCOs shall provide for loan loss on two fronts namely General provisions and Specific
Provisions.
The adequacy of loan loss provisions shall be reviewed on Quarterly basis as laid down in subsection ii) of Section 6.6.3.
Page45 of 164

i) General Provision
General provision means a loss reserve held against future and presently
unidentified losses and is thus freely available to meet losses, which subsequently
materialize. This implies that a flat 1% should be charged on all loans in arrears as
and when management may decide.
ii) Specific provision
a) Meaning of specific Provisions
Specific provision means a loss reserve held against future and presently
identified losses or potential losses and thus not available to meet previously
unidentified losses, which subsequently materialize. A loan that has due to some
reasons been specifically identified as doubtful under the respective loan
categories should have an addition provision of at the corresponding rates.
However, cash held as security may be deducted from the outstanding balance
of the credit facility before determining the specific provisions
Specific provisions on the due but unpaid principal shall be made for all loans in
view of the inherent credit risk of the industry by applying varying rates to the
different loan bands similar to the repayment periods.
b) Basis of Specific Provisions
Specific provisions shall be based on the number of days that have passed since
a particular loan installment (principal only) fell due but has remained unpaid for
any reasons. The rates applicable according to the numbers of days in arrears
may be based on the classifications below.
1-7
8-15
16-30
31-60
61-90
91-120
212-180
181 and above
6.6.3
Rate
Shall be determined by
Committee
Classification
(No. of Days in arrears)
Computing Loan Loss Provisions

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i) The First Time of Provisioning
Provisioning shall be done as an End-of-Period adjustment (Quarterly or

Annually)
The Loan ledger cards shall be reviewed one by one and a list of all loans in
arrear as at the close of the period extracted.
The list shall then be categorized accordingly (based on the days in arrears and
the applicable rates.
The principal in arrears column shall then be summed-up and the relevant rates
applied to the category totals so as to derive the provision amounts per category
The provision amounts per category shall be summed-up and the following
Accounting entries shall be passed
A/C code
Account Name
Debit
Shs
X
Credit
Shs
Bad Debts Expense

Provision for Bad Debts (specific)
X
Narration: Being provision for Bad debts as at (End of the period)
The lists used in the computations shall be attached to the none cash voucher as
support documents and shall be filed such that they are easily accessible for
reference in subsequent computations.
ii) Computing Loan Loss Provisions after the First time
The loan listings to be used shall be extracted as described above and the
provision amounts per category computed as above
The new provision amounts per category shall be compared to the respective
prior period amounts so as to establish an increase or decrease per category
The increases and decreases shall be summed-up and the following Accounting,
depending on the net result, shall be passed
Where the net result is an INCREASE in the provisions amount
A/C code
Account Name
Debit
Shs
X
Credit
Shs
Bad Debts Expense

X
Narration: Being increase in provision for Bad debts as at (End of the
period)
Page47 of 164

Where the net result is a DECREASE in provision amount
A/C code
Account Name
Debit
Shs
X
Credit
Shs

Bad Debts Expense
X
Narration: Being decrease in provision for Bad debts as at (End of the period)
6.6.4
The lists used in the computations shall be attached to the none cash voucher as
support documents and shall be filed such that they are easily accessible for
reference in subsequent computations
Write offs
i) A loan shall be written off if it is in arrears for extraordinarily long periods and
under the following conditions
a) The loan term must have expired
b) The last principal instalment must have been in arrears for over 90 days
c) It must be uncollectible in the opinion of management
ii) Authorization of Write-offs
Authority to write off loans shall be obtained from the Annual General Assembly
after management has given the Board of Directors a report to that effect.
iii) Accounting entries for writing off loans
a) Loans shall be written off against the Loan loss Reserves created (Specific and
General Provisions) as follows
A/C code
Account Name
Provision for Bad Debts (specific/general)

Loans (category)
Narration: Being (Category) loans written off
Debit
Shs
X
Credit
Shs
X
b) Where the balances on the reserves is inadequate, write off shall be against
Specific loan loss provisions, General loan loss provisions and the Bad debts
expense account in that order of priority.
Page48 of 164

A/C code
Account Name

Provision for Bad Debts (general)
Bad Debts Expense
Loans (according to category)
Narration: Being (Category) loans written off
Debit
Shs
X
X
X
Credit
Shs
NB: It is assumed that by the time a loan becomes bad, it may have been
categorized as a non- performing loan and provided for.
iv) Recovery of written-off loans
a) Loan Ledger cards for written off loans shall be kept in a separate file so that
they can be referred to in case of subsequent recoveries/repayments.
b) Recovery of written off loans shall be recognised as other income as follows
A/C code
Account Name
Debit
Shs
X
Credit
Shs
Cash
Other income
X
Narration: Being a recovery on (Members name)s written off loan per journal
reference . Dated .
Page49 of 164

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7.1
POLICY STATEMENT
Other Accounts receivable shall comprise of all receivables except for loans. It shall cover
receivables like.
1)
2)
3)
4)
5)
6)
7.2
Interest receivable from loans

Interest receivable from investments
Prepayments
Salary Advance
Accountable Advance
Sundry Debtors
INTEREST RECEIVABLE ON LOANS

Generally Accepted Accounting Principles require that Interest should be recognized on accrual
basis, however because of the difficulties associated with tracking of interest as it falls in a
manual accounting system, a hybrid approach shall be adopted as follows
1) During the ordinary course of the Accounting period, interest should be recognized on cash
basis
2) The accrual of interest shall be an End of Period adjustment whereby the status of each
loan with respect to interest shall be reviewed and a listing of due but unpaid interest shall
be extracted
3) The following accounting entries shall be passed at the end of each Accounting period on
the basis of the total sum of the lists.
A/C code
Account Name
Debit
Shs
X
Interest receivable
Accrued Interest Income
Narration: Being accrued Interest on loans as at (Period end date)
Credit
Shs
X
4) A detailed schedule of Accrued interest shall be maintained and be updated with subsequent
repayments.
5) Repayments in respect of accrued interest shall be recorded as credit entries on the Interest
Receivable on Loans account. This shall be captured in the Day sheet.
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6) Accrued interest that remains unpaid for unreasonably longer periods shall be extracted in a
report and forwarded to the Audit and Supervision committee with a recommendation to
write it off against the Bad debts expense account.
7.3
INTEREST RECEIVABLE ON INVESTMENTS

Ordinarily the need to accrue interest on investments shall not arise as Financial institutions
shall readily credit the SACCOs account within time, however where the need arises, the
following entries shall be passed.
A/C code
Account Name
Debit
Shs
X
Interest receivable
Accrued Interest Income
Narration: Being accrued Interest on loans as at (Period end date)
7.4
Credit
Shs
X
PREPAYMENTS
1) Where a SACCO paid for a services for a periods longer or for a periods that do not fall
within the Accounting period (financial year), and such a payments were debited to expense
accounts, adjustments shall be passed on such expense accounts such that only the portion
of the expense that relates to the Financial year have an effect on the balances on the
accounts.
2) The adjustments shall be passed as follows
A/C code
Account Name
Debit
Shs
X
Credit
Shs
Prepayments (accordingly)
Respective expense account
X
Narration: Being adjustment for Prepaid (Expense) as at (Period end date)
3) Corresponding adjustments shall be passed at the onset of the subsequent accounting
period in a reverse manner
7.5
STAFF LOANS AND ADVANCES

7.5.1
Staff Loans
Page51 of 164

1) The decision on whether on not to avail loans to SACCO staff shall be taken by the
Annual General Assembly and the policy guidelines on Staff loans shall be
formulated by the Audit and Supervision Committee (a consultant may be involved
for better work).
2) Where Staff loans are allowed, a separate loan sub Ledger shall be maintained and all
the guidelines that relate to Accounting for SACCO loans shall apply.
7.5.2
Staff Salary Advances and Accountable Advances

1) Staff Salary Advances
a) The staff who is in need of a Salary advance shall complete an Advance Form
(FM9) which shall be approved by the Manager or in case of the Manager by a
member of the Audit and Supervision Committee.
b) The amounts accessible and how they are derived shall be determined by the
Board of Directors from time to time
c) The monthly installments to recover such advances shall not exceed 50% of ones
monthly Net Pay
d) All outstanding Salary advances as at the end of the Accounting period shall be
acknowledged by the staff from whom they are due by signing against their
respective balances on a schedule extracted by the Accountant to support the GL
balance on the Salary Advance Account
2) Accountable Advances
a) Accountable Advances shall be given to staff in situations where expenses
cannot be estimated with reasonable accuracy, for instance extraordinary field
visits like Recovery Task Forces
b) Accountable Advances shall be requisitioned-for just like Salary Advances but
shall be accounted for immediately after the activity
c) Un-accounted-for Accountable Advances shall be recovered from the concerned
staffs Saving account at the earliest opportunity and the manager shall authorize
such recoveries
d) All outstanding Accountable Advances as at the end of the Accounting period
shall be acknowledged by the staff from whom they are due by signing against
their respective balances on a schedule extracted by the Accountant to support
the GL balance on the Accountable Advance Account
3) Accounting Entries for Advances
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a) The GL shall have two Advance accounts one for Salary Advances and the
other for Accountable Advances. The entries on these accounts shall reflect the
following with respect to every Advance issued.
Date of advance
Name of payee
Amount advanced
Brief description of purpose of payment
Reference number of the payment voucher
b) Where Salary Advances are issued for a period of more than three months, a
Ledger card shall be maintained to track the repayments
c) On receiving accountability for Accountable Advances, the following entries
shall be passed by use of a none cash voucher
A/C code
Account Name
Debit
Shs
X
X
Credit
Shs
Expense(s) (accordingly)
Cash (with the balance)
Accountable Advance
X
Narration: Being (Staffs name)s accountability for Funds issued on
(Date) in respect of (Activity/Activities)
d) Salary advances shall be recovered from the payroll and therefore the accounting
entries in this regard are considered in the Payroll section of this manual
7.6
SUNDRY RECEIVABLES
This account shall take care of all the debtors balances that cannot fit in any of the above
mentioned classifications and shall have a schedule showing the par-individual breakdown of
the balance there-on as at the Accounting period end. The schedule shall be supported by
genuine documentation of the composite transactions and shall be approved by the Manager.
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8.1
MANAGEMENT POLICIES
8.1.1
Recognition guidelines
a) During the ordinary course of the Accounting Period, all stationery purchases shall
be expensed by debiting the Stationery expense account
b) Recognition of stationery stock/inventory shall be an End-of-Period adjustment
preceeded by a Stock count which shall be documented on a Stock count form
(FM14) and witnessed by a member of the Audit and Supervision Committee.
8.2
ACCOUNTING FOR STATIONERY

The Accounting shall be as follows
a) On recognition of the Inventory
A/C code
Account Name
Debit
Shs
X
Stationery Stock
Stationery expense account
Narration: Being recognition of Stationer Stock as at (Period end Date)
Credit
Shs
X
b) On the on set of the subsequent accounting period or on the basis of an (Externally)

audited position
A/C code
Account Name
Debit
Shs
X
Stationery expense account

Stationery Sock
Narration: To expense Stationer Stock as at (Prior Period end Date)
Credit
Shs
X
NB Copies of the stock count sheets shall be attached to the none cash vouchers raised
Page54 of 164

c) The minimum value of such Stationery to be recognized as inventory or to warrant an
adjustment shall be determined by the Audit and Supervision committee from time to
time (the benchmark is Ushs 500,000)
8.3
8.4
PROCUREMENT OF STATIONERY
8.3.1
The supply of printed stationery shall be from a reputable supplier recommended by the
Audit and Supervision Committee
8.3.2
The SACCO shall invite at least three bids for the selection of such a supplier.
8.3.3
Local Purchase Orders (LPO) shall be placed to the supplier in a timely manner so as to
avoid unnecessary shortages.
8.3.4
Un-printed stationery may be purchased from any shops but the purchase shall be
supported by authentic invoices and/or receipts.
OBSOLETE STATIONERY
8.4.1
Items of stationery shall be declared obsolete if they are no longer usable in their
current state or if no value at all, can be derived from them.
8.4.2
While carrying out stationery stock counts, the obsolete items shall be recorded on
separate the stock count sheets (clearly labeled OBSOLETE) and no adjustments shall
be passed in respect of such obsolete items. This implies that the value of such items
shall remain part of the Stationery expense.
8.4.3
Obsolete items shall be burnt immediately after the stock count upon the authority of
the member of the Audit and Supervision Committee that witnessed the stock count
and the Stock count sheets shall be filed on the Stationery file.
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9.1
MANAGEMENT POLICIES
9.1.1
Definition
Property, Plant and Equipment shall include tangible assets that are held for use in the production of
goods or services, for rental to others or for administrative purposes and are expected to be used for more
than one year. They may also include items held for maintenance or repair of such assets.
9.1.2
Procurement
a) The Manager shall identify the need for the asset and raise a Purchases Requisition
Form (FM10) to the appropriate Committee for authorization and approval of the
purchase of the asset.
b) SACCOs shall invite at least three bids for major purchases.
c) The Manager shall identify a list of suppliers of small items such as stationery for
The Committee/Committee approval.
d) An order shall be placed to a supplier whose offer is the best on the market list (the
market list gives different stationery items with different offers in the locality, and it
is updated periodically). The accountability documents shall usually be the
requisition form, and the invoice/receipt.
e) All purchases shall be processed through a Local Purchase Orders (LPO).
i. These start by requesting at least three suppliers to express their offer for item(s)
called a pro forma invoice
ii. The several pro-forma invoices are put together and evaluated to see who has
the best offer
iii. The best offer is chosen on the basis of quality, price, delivery conditions, and
terms of payment
iv. The award of tender is made known by issuing a supply order, which specifies
the requirement and the terms of supply as per the winning offer
Page56 of 164

f) On receipt of goods, the goods are checked for quality, quantity and price. If the
goods have serial numbers, these must correspond with those on paper. The
supporting documents shall be the invoices, LPO, supply order, delivery and Goods
Received Notes.
g) The Delivery Note shall be ticked to ensure that the goods are received as listed and
that the delivery is in agreement with the order.
9.1.3
Recording
1) Capitalization of assets takes place when the benefits of the expenditure are expected
to extend over periods beyond one year and the cost is more than Shs 500,000 or as
management may agree or as allowable for capitalization in the Income Tax Act1997
2) Donated assets should be capitalized at their market value at the time of donation.
3) The capitalization value of assets is the cost involved in bringing the asset to its
present location and condition i.e. transportation, clearing charges, taxes and
installation costs should be added to the purchase cost of such assets.
9.1.4
Depreciation
1) Depreciation shall be calculated on the straight-line basis to write down the cost of
each asset at their residual values over their estimated useful life as follows:
Fixed Asset Class
Freehold land and Buildings
Motor vehicles and cycles
Furniture and office equipment
Computer equipment-Hard ware
Computer software
Applicable rates
Nil
12.5% to 25%
5% to 12.5%
12.5% to 33.3%
20% to 33.3%
2) Depreciation shall be calculated per item of Plant, Property and Equipment, and the
calculation shall be detailed out in the Fixed Asset Depreciation form (FM15) a copy
which shall be appended onto the none cash voucher raised to that effect
3) Accounting entries shall be passed with respect to each Fixed Asset class as follows
A/C code
Account Name
Debit
Shs
X
Credit
Shs
Depreciation expense
Accumulated depreciation (accordingly)
X
Narration: Being depreciation expense on (Asset Class) for the yea ended
Page57 of 164

(Period end Date)
9.2
PHYSICAL CONTROLS
9.2.1
Physical Inspections
The fixed assets shall be physically inspected on an annual basis to coincide with
SACCOS Year-End. An inspection report shall be prepared by the Accountant and
submitted to the manager for action. The results of the inspection shall be documented
and where necessary, adjustments shall be made to the fixed assets register (BK14) and
general ledger.
9.2.2
Engraving of Fixed Assets

1) All moveable property such as furniture/fittings and computer equipment shall be
engraved with unique reference numbers for easy identification. These identification
numbers shall be indicated against the relevant item in the Fixed Asset Register.
These numbers shall be used during the annual physical inspections.
2) All assets should permanently be marked with indelible identifications as belonging
to SACCO.
9.2.3
Insurance of Property
All SACCO property shall be insured with a reputable insurance firm. The terms of the
insurance policies shall be followed in order to avoid loss. All assets should be insured under a
comprehensive policy at their market values. The amount insured should be reviewed
periodically and at least once a year.
9.2.4
Safe Custody
A person using the assets shall take particular responsibility over each asset item in his/her
possession and to ensure its proper use and custody. Management will issue rules regarding the
location and times for parking assets.
9.2.5
Disposal of Assets
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1) Assets will be disposed of when they are rendered obsolete or due to unforeseen
break down.
2) Assets may be disposed of by sale, donation to charitable organisations or
abandoned.
3) Before disposal of the assets, the Manager shall obtain the authority to do so from
The Committee/Committee (the Manager must present the condition to the
authority and request for disposal)
4) The Manager shall then dispose off the asset.
5) Upon sale of the assets, the cost and accumulated depreciation are removed from
the accounting records.
6) For any difference between net book value and net proceeds from sale, the
accounting shall be as follows
If the difference is a gain:
A/C code
Account Name
Debit
Shs
X
X
Credit
Shs
Debit
Shs
X
X
Credit
Shs
Cash/Bank (with the total proceeds)

Accumulated dep. (with the prevailing
balance)
Fixed Asset class (with the cost)
X
Other income (with the gain)
X
Narration: To derecognize (Item) after it was disposed/sold off to (Purchaser)
If the difference is a loss:
A/C code
Account Name
Cash/Bank (with the total proceeds)

Accumulated dep. (with the prevailing
balance)
Loss on Sale of Fixed Asset
X
Fixed Asset class (with the cost)
X
Narration: To derecognize (Item) after it was disposed/sold off to (Purchaser)
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NB Copies of the disposal documents shall be attached to the none cash vouchers raised
9.3
REVALUATION OF ASSETS
9.3.1
A SACCO may have its property, plant and equipment revalued regularly by a firm of
competent quantity surveyors and valuation professionals, such that the carrying
amount does not differ materially from that which would be determined using fair value
at balance sheet date. The valuation figures in the valuation report shall be used to
replace the cost figures in the Fixed Asset Register and general ledger. When a particular
fixed asset is to be revalued, the entire class of fixed assets to which that item belongs
shall be revalued. Revaluation should be done evenly over the chosen periods,
preferably after every five years.
9.3.2
The following entries shall be made:

A/C code
Account Name
Debit
Shs
X
Credit
Shs
Fixed Asset (with the revaluation amount )

Revaluation Reserve
Narration: To recognize Revaluation of (Item) as at (Revaluation Date)
9.3.3
The balancing figure in the revaluation account is either a revaluation reserve or a

revaluation loss, posted to the revaluation reserve account or profit and loss as the case
may be.
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This chapter covers the following elements.
10.1
Members Deposits
Loans And Balances due to Banking Institutions
Deferred Grant income
Interest Payables and other Liabilities
Tax Payable
MEMBERS DEPOSITS
10.1.1 Opening and Operating Savings Accounts.
The SACCOs saving accounts may be personal, joint, minor, group or institutional and
shall be opened by members only. The following guidelines have to be followed in the
opening and operation of the Savings accounts by members.
1) The applicant shall complete the Application Form for Opening a Savings Account
(FM2) and affix his/her photograph.
2) The details of the applicant shall be recorded on the Savings Ledger Card (DOC12)
to which shall be affixed his/her photograph. The applicant shall affix his/her
specimen signature on the Personal Savings Ledger Card. Personal Savings Ledger
Cards shall be kept in a lockable box and access shall be restricted to designated
officials only.
3) In case the applicant would like to authorize other people to withdraw money from
his/her Savings Account, the applicant shall complete the Third Party Mandate
Form (FM11) as required.
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4) The Manager or designated official shall complete and issue a Pass book to the
applicant. The Passbook shall contain the Members passport photograph and
specimen signature duly stamped and certified by the Manager or designated official.
5) The applicant shall complete a Savings Deposits Slip (DOC9) for depositing at least
the minimum deposit required for the SACCOs Savings Account. Every member of
the SACCO shall be required to have a savings account.
6) The Cashier shall receive the Passbook, Savings Deposits Slip and cash. He/she shall
then count the cash and check the information filled in the Savings Deposits Slip to
ensure that it is correct, keep the cash and pass on the pass book and deposit slip to
the Manager or his/her representative for authorization.
7) The Manager/Accountant shall check the Deposit Slip and initial it, record the
amount deposited into the Passbook and Savings Ledger Card (DOC12), work out
the new outstanding balance, initial and return the passbook and Deposit Slip to the
Cashier and keep the Savings Ledger Card.
8) The Cashier shall return the Passbook to the applicant or client and keep the
Deposit Slip. The Cashier shall not keep members Passbook after they have
completed their transactions.
9) In course of the day and in particular at the end of the day, the Cashier shall give
each Deposit Slip a unique serial number for the day and post them to the days Till
Sheet (DOC16)
10) The Cashier shall staple/ tie together all savings Deposits Slips for the day with a
rubber band and pass them on to the Manager/Accountant together with the Till
Sheet.
11) After preparing the Waste Sheet (DOC20) the Manager shall securely keep the
Savings Deposit Slips in a lockable cup-board, which has controlled access.
12) At the end of the day, the manager/Accountant shall record all Pass Books issued in
the Passbook Distribution Register (BK11). The Accountant or designated Official
shall also complete the Account Opening Register (BK1).
10.1.2 Handling Full Passbooks or Savings Ledger Cards.
1) Whenever the depositors passbook is full, the balance thereon shall be transferred
to a new Passbook which shall be given the same number as the old one. Other
personal details shall also be transferred.
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2) Whenever the personal Savings Ledger Card (DOC12) is full, it shall be treated like
a full Passbook.
10.1.3 Lost Passbook
In case a Depositor loses his/her Passbook:
1) He/She shall immediately report it to the SACCO Manager.
2) The Manager shall immediately mark the Personal Savings Ledger Card in red and
bold Lost Passbook notified, and put the notification date and his or her initials
3) The depositor shall confirm the account balance as reflected on the Personal Ledger
Card in writing and this shall be filed on the Savings accounts queries file.
4) A new Personal Saving Account shall be allocated and a new Personal Savings
Ledger opened.
5) A new Passbook shall be issued bearing a new number and personal details. The
balance from the old account that has been confirmed by the client shall be
crosschecked to the old Personal Savings Ledger Card and if confirmed, be
transferred to the new Passbook and Personal Savings Ledger Card.
6) The client shall pay the associated charges for lost Passbook replacement.
7) Issuance of a new Passbook implies automatic cancellation of the old one.
8) Should the member find the old passbook, he/she shall present it to the SACCO
Manager who shall register and destroy it.
10.1.4 Closing A Savings Account
Whenever a depositor wishes to close his/her savings account, the manager or Records
Assistant/ Accountant shall do the following.
1)
2)
3)
4)
5)
Retrieve the Passbook from the client

Retrieve the Personal Savings Ledger Card
Mark both the Passbook and the Personal Savings Ledger Card Closed
Enter the account into the accounts opening and closing register.
Calculate the interest due on the clients savings account and pass necessary entries
by debiting interest on savings expense account and crediting the clients savings
account.
6) Calculate total amount due less the account closing charges and pass necessary
entries by debiting the clients account and crediting the relevant income account.
7) Prepare a Withdrawal Slip/Voucher for the net balance due and have it signed by
the client.
8) The Manager shall approve the Withdrawal Slip after which the cashier shall pay
cash to the client.
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Reasons for closing a savings account may include:

1)
2)
3)
4)
The client making request to close his/her account.

If the client passed away (Deceaseds Estate).
If the SACCO has been wound up
If the client has been expelled from the SACCO
10.1.5 Fixed Deposits

Only SACCO members can make fixed deposits. The periods for fixed deposit
maturities may be 3, 6, 9 or 12 months. In some situations, the maturity period may be
longer than one year. SACCOs shall accept fixed deposits because the Funds are simple
to manage since their life in the Institution is well known which makes it easy for
planning. However, fixed deposits attract higher interest rates than ordinary saving
deposits and therefore, a SACCO shall accept them only if it can lend them out at a
higher interest rates than it will pay to the depositors.
The process shall be as follows.
1) A Fixed Deposit Slip (DOC2) shall be completed for each and every fixed deposit
2) The Cashier shall receive cash, count it, check the fixed deposit slips and ensure that
it has been correctly filled, keep the cash, endorse the Deposit Slip and pass it on to
the Manager/Accountant.
3) The Manager/Accountant shall open the fixed deposit account for the member in
the Fixed Deposit Register (BK4) and record it accordingly.
4) The Manager shall prepare a Fixed Deposit Certificate (DOC1), which shall be
countersigned by the Chairperson of the Audit and Supervision Committee and
issue it to the member.
5) The Manager shall keep a diary for the maturity dates of all fixed deposits.
6) On the maturity date, the manager shall instruct the Accountant to update the
members Fixed Deposit (FD) account by passing the necessary entries as follows.
A/C code
Account Name
Debit
Shs
X
Credit
Shs
Interest on FDs expense (with the gross

interest according to the rate)
Members FD account (with 85% of the
X
gross interest)
Withholding Tax Payable (with 15% of
X
the gross interest)
Narration: Being interest on (Members name)s FD for (FD Period) less
15% WHT.
7) On withdrawal, the client shall submit his/her Fixed Deposit Certificate to the
Cashier who shall pass it to the Manager.
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8) The Manager shall cancel the fixed deposit certificate and pass it to the cashier for
payment.
9) At the end of the day, the Cashier shall record the Fixed Deposit receipts and
payments in the Till Sheet.
10.1.6 Paying Withdrawals From Savings Accounts
A. Where a member is withdrawing his/her own Savings and has a passbook
1) A member wishing to withdraw cash from his/her savings account shall complete a
Cash Withdrawal Slip (DOC8) for ach and every withdrawal.
2) The Cashier shall check the cash Withdrawal Slip to ensure that it has been properly
completed.
3) A cashier shall crosscheck the Withdrawal Slip to the Pass Book to ensure that the
amount to be withdrawn is available on the members account and when satisfied,
shall send it together with the pass book to the Accountant/Manager.
4) The Accountant/Manager shall compare the Pass Book to the Savings Ledger to
ensure that the member has enough money on his/her account to cover the drawing
required. Furthermore, the Accountant/Manager shall check to ensure that the
signatures are similar and that the person requesting to draw the money from the
account is the owner of the account.
5) When satisfied, the Accountant/Manager shall authorize the payment by endorsing
on the withdraw slip and giving back the passbook to the cashier to effect the
payment.
6) The Cashier shall check the amount authorized for payment, write the
denominations to be paid at the back of the Withdrawal Slip and get the member to
sign for it.
7) The cashier shall then count the money with the member looking on and pass it on
to him/her together with the passbook.
8) The cashier shall stamp PAID on every Withdrawal Slip that has been paid, give it
a consecutive number for the day and keep it.
9) The cashier shall never keep the members passbooks.
10) At the end of the day, each Withdrawal Slip shall be posted to the Till Sheet.
11) The cashier shall staple/tie together all Withdrawal Slips for the day with a rubber
band and hand them over to the Manager/Accountant.
12) After preparing the Day sheet, the Manager/Accountant shall keep securely the
Withdrawal Slips in a lockable cupboard, which has controlled access.
B.
Withdrawal without a Passbook

Withdrawal without passbooks shall be restricted to very few and exceptional cases.
Where such a withdrawal is to be made, it shall be justifiable and on a written
recommendation by the SACCO treasurer or a committee/Board member. Such cases
shall always be posted to the clients passbook at the earliest opportunity. Only internal
non-cash transactions authorized by the manager shall be made without the passbook
but shall always be posted to the clients passbook at the earliest opportunity.
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C.
Withdrawal by third parties

Withdrawals by third parties is exceptional and not a right. In any case the account
holder ought to have completed third party mandate form (FM11) indicating the
authorized third party. The third party must always present the passbook (withdrawals
without the passbook are totally forbidden). In addition to checking the Withdrawal Slip
to the passbook and personal ledger card, they shall also be checked to the third party
withdrawal mandate form. If satisfied, the manager shall authorize the cashier to pay the
cash for the withdrawal request.
10.1.7 Using SACCOs Cheques

Depending on the level of development of a systems and operations, a SACCO may
introduce cheques to be used by its members in effecting transactions, amongst
themselves. The following guidelines shall serve to ensure proper utilization of SACCO
Cheques.
i) SACCOs cheques shall be used for transactions between SACCO members only.
ii) The member seeking to withdraw money from his/her savings account shall not fill the
Withdrawal Slip. A well prepared cheque shall be presented to the Cashier along with the
members Passbook. The transaction shall be treated as a normal withdrawal. In this case
however the cheque will act as a Withdrawal Slip
iii) A member who has been given a cheque by another member shall fill the cheque Deposit
Slip and present it together with a cheque and he/her Passbook to the cashier
iv) The cashier shall check to confirm that the Deposit Slip has been correctly filled after which
he/she shall pass them on to the Manager/Accountant.
v) The Manager shall check the documents and retrieve the Ledger cards of the member
depositing the cheque and that of the member depositing who drew the cheque.
vi) If the signature of the member who drew the cheque is correct and he/she has money on
his/her account, then the Manager/Accountant shall credit the depositors Personal Savings
Ledger Card and the passbook. The Manager/Accountant shall debit the cheque drawers
Personal Savings Ledger Card. The cheque drawers passbook shall be debited at the earliest
opportunity.
vii) The Manager/Accountant shall return the passbook to the cashier who shall return it to the
member.
10.1.8 Non Cash Transactions
These are SACCO transactions, which take place but do not involve cash moving in and out of
the SACCO. Examples include interest paid on savings accounts by way of crediting the
members accounts, dividends which are capitalized or credited to the members share capital
accounts, collections made on behalf of members, ledger fees charged to the members
accounts etc. The process of none cash transactions on members savings shall be as follows.
i) For each non-cash transaction, the staff initiating the transaction shall raise either non cash
Transaction Debit Voucher (DOC4) or non cash transaction credit voucher (DOC3)
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supported by relevant authority documents and have it approved by the Manager. After
approval, the records assistant/accountant shall incorporate the transactions into the Day
Sheet and later post the transactions to the accounts they affect.
ii) The Depositors Passbook shall be adjusted for any entries at the earliest opportunity.
10.2
OTHER BORROWED FUNDS

10.2.1 These may include both short and long term borrowed Funds from donors, other
financial institutions and directors or members.
10.2.2 Copy of the loan agreement, correspondences, monthly statements and reconciliation,
evidence of payments made, repayment schedules etc, shall be kept by the Manager or
any other designated official.
10.2.3 Unused Operating Grants

This account is used to record those Grants received purposely to cover future
expenses. Debits on this account shall be made as the expense is realized, which is when
the Grant income has to be recognized. The
i.
On receiving the Grant

A/C code
Account Name
Debit
Shs
X
Credit
Shs
Respective Bank Account

Deferred Grant income with total Grant
Narration: To defer Grant income received until prescribed Grant conditions are met
ii.
Monthly amortization of the operating Grant
A/C Code
Account Name
Debit
Deferred Grant Income

Grant income
Credit
X
X
Narration-To recognize income that had been deferred with respect to the Grant terms
10.3
CAPITAL GRANTS
This account is used to record Grants for the purchase of equipment or those Grants for the
Capitalization of credit subject to restrictions with regard to the use of the Funds. They are
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Equity Grants because they contribute to the creation of capital and because they will
eventually become part of the organizations equity.
i.
On receiving
A/C Code
Account Name
Asset Account
Deferred Capital Grant
Amount (Shs)
Debit
Credit
X
X
Narration: To Defer capital asset Grants until when earned
ii.
On recognition
A/C ode
Account Name
Amount (Shs)
Debit
Credit
X
Depreciation/Equity-Reserves
X
Narration: To recognize the asset portion realized as equity (to compensate depreciation expense) for
the period with regard to asset
a) Sufficient provision shall be made for depreciation, bad loans and accrued expenses.
b) Provision for doubtful and bad loans shall be made in accordance with the ageing
structure for loans using recommended rates as stipulated in SACCOS Lending Policies
and Guidelines.
10.4
INTEREST PAYABLE AND OTHER LIABILITIES

These will cover the following accounts
Interest on Member Savings Accounts

Other Interest Payable
To record the accrued interest payable in a time period the following accounting entries shall be
made.
A/C Code
Account Name
Amount (Shs)
Debit
Credit
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Respective interest expense account
Interest payable
Narration-To recognize income with respect to the Grant terms

10.5
PAYROLL LIABILITIES
10.5.1 Payroll liabilities include net salaries payable, PAYE payable, NSSF payable, Gratuity
payable etc.
10.5.2 PAYE is a form of withholding tax from an employees gross pay recorded as follows:
i) On recognizing the liability
A/C Code
Amount (Shs)
Debit
Credit
Salary expense
X
PAYE payable
X
Narration: To recognize PAYE payable for . (month & year)
ii)
Account Name
On payment
A/C Code
Account Name
PAYE payable
Bank Account
Amount (Shs)
Debit
Credit
X
X
Narration: Payment of . (month & year) PAYE

10.5.3 NSSF is contributed to by both the employee (5%) and employer (10%) of the
employees gross remuneration as shown below:
A/C Code
Account Name
NSSF SACCOs contribution-10%
Salary expense - (Employee contribution)-5%
Amount (Shs)
Debit
Credit
X
X
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NSSF/Statutory pensions payable
Narration: To recognize NSSF payable for . (month & year)

On payments to NSSF
A/C Code
Account Name
NSSF /Statutory pensions payable
Bank/Cash
Amount (Shs)
Debit
Credit
X
X
Narration: Payment of . (month & year) PAYE
10.6
ACCRUALS
10.6.1 Accrued expenses arise when goods or services have been received or services utilized
prior to the end of the accounting period, but where payment has not been made.
Accruals should not be made simply to show expenditure in the period in which it was
budgeted, unless the goods or services were actually received in that period.
10.6.2 For monthly accounts, accruals should only be made where they are material.
10.6.3 To accrue expenses, the following entries shall be passed by use of none cash vouchers
duly supported with the bases for accrual as attachments.
A/C Code
Amount (Shs)
Debit
Credit
Expense account (accordingly)
X
Payables (accordingly)
X
Narration: To accrue .. (No of months)s .. (Expense name) as at
(Period end Date)
10.7
Account Name
OTHER ACCOUNTS PAYABLE

10.7.1 Creditors should only be recognized where the invoice for the goods or services has
been received prior to the end of the accounting period, but where payment has not
been made. Recognition of creditors shall be an End of Period process/activity.
10.7.2 Unpaid but accrued invoices shall be marked ACCRUED with the date of accrual and
initialed by the Accountant
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10.7.3 Other known creditors e.g. Telephone, Electricity, Water etc. shall be accrued after the
Managers approval.
10.8
CORPORATION TAX
10.8.1 The Income Tax Act 1997 demands that all the gross income of a person for the year
less total deductions allowed under the same Act is income subject to corporation tax at
the prescribed rate, currently at 30 %.
10.8.2 After taking into consideration all the necessary income tax provisions, a provisional
final installment amount will be provided for in the accounts. To arrive at the final
installment tax payable, the overall 30% tax liability computed for the year should be
adjusted with all the provisional installments that were made during the year.
10.8.3 Final Tax Returns

A final return of income for each year of income is required not later than 6 months
after the end of that year in the form prescribed by the commissioner and signed by the
tax payer declaring completeness and accuracy of the return together with a statement
of income and expenditure and a statement of assets and liabilities.
10.8.4
Provisional Returns
Provisional tax returns should be submitted as follows:
Before 30 June
Before 31 December
Before 30 April
1st provisional return

2nd provisional return
3rd and Final tax return
Computation
Each installment of provisional tax shall be computed as follows:
50% X (A-B), where
A Estimated tax payable by the SACCO for a year of income
B Amount of tax withheld under the Income Tax Act prior to the due date for
payment of installment for which the SACCO has tax certificates.
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11.1
MEMBERS CONTRIBUTIONS
Subject to the provisions and the rights attaching to any class of shares, the holders are entitled
pari passu amongst themselves to the profits of the SACCO available and recommended for
distribution. On a winding up of the SACCO, the balance of the assets available for distribution
shall, subject to any sanction as required by the statute be divided among the members in
proportion to the amount of capital paid up on each Ordinary Share. This is in addition to
voting rights. Other rights are enshrined in the bye laws.
The SACCO should disclose in the notes for each class of share the following details
The number of shares authorized
The par value per share
Rights relating to each class of shares
11.2
HANDLING MEMBERSHIP APPLICATIONS AND PAYMENTS FOR SHARE

CAPITAL
11.2.1 Admitting members to a SACCO
The process of admitting members to a SACCO shall be as follows
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i) Anyone wishing to become a member of a SACCO shall fill a Membership
Application Form (FM1). An individual, group or institution can apply to become a
member of a SACCO.
ii) The Cashier shall check to ensure that the applicant has correctly filled the
application form and that the applicant meets the minimum requirement e.g. share
capital, membership fee and that the applicant is a resident of the target area.
iii) The Manager shall check and ensure that the information given is correct and if
satisfied, approve it.
iv) Authentic identification documents shall be presented together with the Application
form and where possible copies shall be attached to the form
v) The Cashier shall receive the payments (share capital and membership fees), issue
cash receipt, write the number of the cash receipts on the application form, stamp it
PAID and return it to the Manager.
vi) The Manager shall issue and complete relevant sections of the Passbook, which shall
be returned to the Applicant through the Cashier.
vii) At the end of the day, the Cashier shall summarize share capital and membership
fees payments into the Till Sheet (DOC16) for the day.
viii)At the end of the day, the Passbook Distribution Register (BK11) shall be updated.
ix) The Membership Application Form shall be sent to the SACCO Chairperson and
Secretary for authorization and issue of Share Certificate (DOC5) after which it
shall be filed.
x) In case a member is illiterate, the Manager of the SACCO shall ensure that he/she is
facilitated to complete the necessary documentation. In addition to the photograph,
a specimen of his/her thumbprint shall be affixed to the relevant documents. The
cashier or any other person of his/her choice shall complete the documentation
which shall be read to him/her after which he/she shall affix his/her thumbprint.
The manager shall again read the documents to such a member before authorizing
the transaction.
11.2.2 Recording Share Capital and Membership Fees
The process of Recording Shares and Membership fees shall be as follows.
i) Receipts shall be written such that membership fees are separate from Share Capital
contributions because they are accounted for separately
ii) The cashier, in his/her Till Sheet, shall separate Membership fees from Share
Capital contributions
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iii) The Accountant in his/her Day Sheet, shall record total membership fees received
as Membership fees income and Credit the Share Capital account with the total
shares purchased
iv) At the end of the day, the Members Register (BK9) and Share Capital Register
(BK12) shall be updated. The custody of the register of members is a duty of the
Secretary according to Section 28 of the Cooperative Regulations 1992. Therefore,
for day-to-day operations, management shall maintain a preliminary register that will
capture members data as they are recruited. The data will then be used to
periodically update the statutory members register that the Secretary keeps.
v) Whenever any member wants to buy more shares in the SACCO (increase his/her
Share Capital), he/she shall complete the Application Form for Purchase of
additional shares (FM3) that shall be checked by the Manager and approved by the
Chairperson and Secretary. This is to ensure that the maximum shareholding
regulations of the society are complied with.
11.3
EQUITY GRANTS APPLIED

11.3.1 Accounts under this category
A/C Code
A/C name
Portfolio equity Grants
Fixed assets equity Grants
11.3.2 These accounts show the balances of Grants in fixed assets and portfolio free of special
restrictions by the donors and, therefore, taken in as part of the SACCOs equity.
11.3.3 The following entries shall be made in respect of Equity Grants depending on whether:
A Grant has been receive free of restrictions
The Grant received is restricted
The restrictions on the Grant have been freed/fulfilled
The Equity Grant /donation is in kind
On receiving a Grant free of restriction:
A/C Code
Account Name
Amount (Shs)
Debit
Credit
X
X
Cash/ Bank (accordingly)

Portfolio/FA Equity Grant
(accordingly)
Narration: To recognize donated Equity from .. (Donors name)
On receiving a Grant that has restriction:
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A/C Code
Account Name
Amount (Shs)
Debit
Credit
Cash/ Bank (accordingly)
X
Differed Grants (accordingly)
X
Narration: To recognize restricted Grant(s) from (Donors name)
When the restrictions on the Grant have been fulfilled:
A/C Code
Account Name
Amount (Shs)
Debit
Credit
X
Deferred Grants
(accordingly)
Portfolio/FA Equity Grant
(accordingly)
Narration: To recognize donated Equity from .. (Donors name)
11.4
RESERVES
11.4.1 Definition of Reserves
Disclosure
The reserves representing the appropriations of the retained earnings

Reserves required by statute
Revaluation reserves
Foreign currency translation reserves
11.4.2 Retained Surplus/Deficit b/f

This is used for the purpose of showing profits or losses from previous fiscal years.
Since this is a capital account, it generally has a Credit balance. This account is used for
the purpose of showing (accumulated) surplus (deficit) from the previous fiscal years.
The account is debited with losses and credited with surpluses from earlier periods. The
account may also be affected by duly approved and justified adjustments relating to
similar prior periods.
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11.4.3 Current Year Surplus of Deficit
This account is used for the purpose of showing profits or losses earned during the
current fiscal year. Only one account can exist for the current year. It shows the
accrued balance of financial income.
At the end of a fiscal year all the income accounts should be debited to nil and the
expense accounts credited to nil the current year surplus or deficit shall be posted to
the Current year Surplus/Deficit Account.
11.4.4 Statutory Reserves
Statutory reserves include the following
1) Reserve Fund
According to Section 34 of the Cooperative Regulations 1992, 10% of the annual
operational net surplus shall be put into the Reserve Fund and withdrawals from
this Fund must be permitted by the Registrar.
2) Share Transfer Fund
According to Section 9 of the Cooperative Regulations 1992, payment to exmembers in respect of shares must be from a Share Transfer Fund and duty to
maintain this Fund is imposed on SACCOs by Section 43 of the Cooperative
Regulations 1992.
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12.1
MANAGEMENT POLICIES
12.1.1 Definition
Income shall encompass both revenue and gains. Revenue is income that arises in the
ordinary course of business e.g. fees, interest, dividends, royalties, penalties,
commission. Gains may or may not arise in the ordinary activities of an enterprise e.g.
disposal of non-current assets.
12
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2 Revenue shall not be recognized unless it meets certain standards of transfer of
12..1
ownership, certainty, collectability and measurability.
12.1.3 Capital and reserve Grants shall be disclosed in equity on a cumulative basis, against the
related accumulated costs over time. Grants relating to operating expenditure shall be
shown as non-operating income in the income statement.
12.2
TYPES OF REVENUE
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The major sources of revenue shall be categorized as follows:
Loans Income
A/C Code
A/C Name
Interest received on loans
Loan Commitment fees
Surcharge on loans
Collection fees
Savings and Membership fees Income
A/C Code
A/C Name
Membership fees
Sale of stationery
Saving Ledger fees
Account closure fees
Other Income
A/C Code
A/C Name
Grant income
Interest from Bank A/C
Profit on Sale of Fixed Assets
Foreign Exchange gain
Miscellaneous income
12.3
INTEREST INCOME
12.3.1 Interest on Loans
Interest on loans shall be recognized on modified accrual basis as described in Section 7.2 of
this manual.
12.3.2 Interest on Investments
Interest on Investments ordinarily arises out of Fixed Deposit Placements with other Financial
Institutions and the SACCO shall pay 15% WithHolding Tax thereon, in accordance with
Section 117 of the Income Tax Act. The 15% WithHolding constitutes a Tax credit which is
deductible from Gross Tax liability at the end of the Financial Year and must therefore be
accounted-for properly. Every time Interest is received on Investments, the following entries
shall be passed.
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A/C Code
Amount (Shs)
Debit
Credit
Bank (85% of the Gross Interest)
X
WithHolding Tax Claimable (15%)
X
Interest on Investmants (100%)
X
Narration: To recognize Interest on FD Placement for .(Investment Period) with
.(Bank)
12.4
Account Name
OPERATING GRANT INCOME

12.3.3 This represents income that is not from an internal source or that is outside the
SACCOs normal business activities. The account is used to record and accumulate the
income from Grants. Entries are made transferring Funds from deferred Grant income
to operating Grant income as and when expenses for which they were donated are
incurred.
12.3.4 Accounting Policies
a) All Grants shall be recognized as income over the period necessary to match them with
the related costs, which they are intended to compensate on a systematic basis. They
should not be credited directly to shareholders interests.
b) Grants shall be recorded at fair value only where there is reasonable assurance that the
SACCO will comply with the conditions attached to the Grant and that the Grant will
be received
c) Revenue shall not be recognized unless the SACCO meets certain standards of transfer
of ownership, certainty, collectability and measurability
d) Capital and Revenue Grants shall be disclosed in equity on a cumulative basis, against
the related accumulated costs over time
e) Grants relating to operating expenditure shall be shown as non-operating income in the
Income Statement
f) Grant income shall be recorded as the correspondence expense (In case of fixed asset
Grants) is being made.
12.3.5 RECORDING
The Manager shall maintain a schedule for the expected and budgeted Grants/loans to
be received from donors and government and when received.
12.3.6 ASSET GRANTS
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Grants or donations in form of assets shall be recorded as deferred income that will be
recognized as no-operating income on a systematic and rational basis over the life of the
depreciable asset by way of a reduced depreciation charge. The accounting entries shall
be passed as follows.
To recognize the Asset Grant in the SACCO books:
A/C Code
Account Name
Amount (Shs)
Debit
Credit
Respectiveassetaccount
X
DeferredassetGrant
X
Narration: To recognize donated . (Asset name) from .. (Donors name)
To recognize income on a systematic basis/depreciation charge
A/C Code
Amount (Shs)
Debit
Credit
DeferredassetGrant
X
GrantIncome(withtheDepn.Charge)
X
Narration: To recognize income on depreciation of donated . (Asset name)
from .. (Donors name)
12.5
Account Name
OTHER INCOME
Other income shall be from non-recurring sources like profit or loss from the sale of fixed
Assets or investments, profit or loss on exchange of a foreign currency, recovery of bad
debts etc.
12.6
DISCLOSURE IN THE FINANCIAL STATEMENTS

12.2.1 Grant income shall be disclosed as non-operating income separately after net
operational income in the income statement.
12.2.2 In the balance sheet, Grants, donations and in kind contributions shall be disclosed
as accumulated donations under equity. A note reconciling the previous years
opening balance to the current years closing balance per donor should be included
in the notes to the financial statements.
The following should also be disclosed
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a) The accounting policy adopted for Grants, donations and in kind contributions,
including the methods of presentation adopted in the financial statements.
b) The nature and extent of Grants, donations and in kind contributions
recognized in the financial statements.
c) Unfulfilled conditions and other contingencies attaching to Grants, donations
and in kind contribution.
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13.1
MANAGEMENT POLICIES
1) All SACCO expenses shall be recognized immediately they are incurred (expenses shall be treated on
accrual basis).
2) All SACCO expenses must be in the approved budget and shall be incurred only when there is still a
balance on the budget item or upon the approval of the Board of Directors if it is over and above Budget.
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3) The Committee shall set expenditure limits for the Manager beyond which he/she shall seek the
authorization of the Treasurer. The Manager shall not incur repetitive expenditure as a way of defeating
the expenditure limit. Where it is discovered, the Committee shall discipline the Manager.
4) Expenditure above Shs 500,000 meant to benefit more than one accounting period or month shall be spread
over the period it is to benefit. However, expenditures below Shs 500,000 shall be expenses during the
period it is incurred. Similarly, expenses whose period of benefit cannot be ascertained with reasonable degree
of accuracy like in case of motor vehicle repairs shall be written off during the period they are incurred.
5) The Manager shall be fully responsible for all SACCO expenses and no expenditure shall be incurred
without his or her authorization.
6) All expenses shall be properly budgeted for and any expenditure not in the budget shall be approved by the
Committee based on a supplementary budget, which will be reported at the Annual General Meeting.
7) Every expense shall be supported by an expenditure voucher, to which a supporting document shall be
attached. The expenditure shall be approved by SACCOs Manager and by any relevant SACCO
authorities for any expenditure beyond the Managers limit.
8) A Payment Voucher (DOC6 ) shall show the following
The name of the payee

The serial numbers of the voucher
The account to be charged
The purpose of payment and the documents justifying the payment
The amount being paid (in words and figures)
The name and title of SACCOS Official raising it.
The authorization by the Manager or Treasurer (where applicable)
Signature of the payee acknowledging receipts of payment
9) After payment, the Payee shall acknowledge receipt of payment and provide SACCO with his/her own
receipt.
10) All SACCO capital expenditure shall be initiated by the Manager, authorized and approved by The
Board of Directors/Committee.
11) The Committee minute authorizing the expenditure shall be quoted on the expenditure documents.
12) The Chairperson and SACCO Secretary/Treasury shall sign the minutes.
13) The capital expenditure documents shall include:
i.
ii.
The Voucher
The original copies of the suppliers invoices
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iii.
Analysis of the evaluation report and award of the tender where more than one quotation was
received.
14) All paid Vouchers shall be kept in the order of date paid, batched and kept by SACCO Manager
15) The Finance Committee of the Board shall, from time to time, set procurement guidelines to streamline the
processing and management of large expenses.
13.2
TYPES OF EXPENSES AT SACCOs

Expenses of SACCOs shall be categorised into the following categories
1) Financial expenses e.g.
Interest on voluntary savings

Interest on Borrowed Funds
2) Direct Loan Costs
Bad debts Expense

Loan appraisal costs
Loan monitoring and recovery costs
Legal Fees on Loans
3) Personnel/Staff costs e.g.
Gross salaries
Staff welfare and incentives
NSSF 10%
Gratuity
Staff trainings, workshops and capacity building
Other Personnel Expenses
4) Office and Administration
Stationery expenses
Rent of office premises
Office expenses
Telephone
Internet and e-mail
Professional fees
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Transport and travels

Advertisement, announcements and publicity
Power/fuel costs
Accommodation allowances
Duty allowances
Community mobilisation
Audit costs & legal fees
Depreciation
Loss on Sale of Fixed Assets
Equipment Repairs & Replacement
Security expenses
Computer expenses
Miscellaneous expenses
5) Governance
General meeting expenses

Registration/affiliation fees
B.O.D and committee expenses
6) Statutory expenses
13.3
Contribution to the Cooperative development Fund

Members training
Remittances to Secondary Society (Education Fund)
ACCOUNTING PROCEDURES
13.3.1 Expenditure Processing
1) Initiation of payments
Users on identifying a requirement shall raise a requisition that shall be
recommended by the user for approval by the Manager, before it can be processed
for payment.
2) Authorization of payments
In line with budgetary limits and any other managerial considerations, payments or
any advance claims shall be verified and approved by the manager.
3) Refunds
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In the case of refunds, a Refund Claim Form (FM15) shall be filled out and
accompanied by proper supporting documents. In the case of allowances not paid
through the payroll, an authorization form must be attached to the claim.
4) Payment of claims by cashier
Claims and advances authorized for payment shall be forwarded to the cashier to
effect payment. The payee shall be required to acknowledge receipt of payment by
signing on the payment voucher and the cashier shall be required to stamp, sign and
date the claim form and all supporting documents with the PAID stamp
13.3.2 Computation of Interest on Members Savings
a) SACCOs mobilize and provide safe custody for members savings. They shall
ensure profitability, sustainability, and secure members confidence to save with
them.
b) SACCOs shall in turn pay interest on the members deposits from the income
earned from their operations particularly loans.
c) SACCOs Board/Committee shall determine the rate of interest to be paid on the
members savings and shall be reviewed from time to time. In determining the rate
of interest to pay, The Committee shall take into account, among other things the
following:
i.
ii.
iii.
iv.
v.
The interest rate paid on Saving Deposits by Commercial banks particularly

the rates applied by the Bank on its Account.
The interest rate applied by other players in the Microfinance industry.
The lending interest rates other SACCOs charge on loans
The inflation rate
The Cost of Capital or Required Rate of Return
d) SACCOs must note that interest payable on savings deposits is a cost and they shall
have the capacity to pay.
e) Interest on Savings Account shall be calculated twice a year as follows:
Minimum balance held during months 1 & 2 TIMES the applicable interest rate
DIVIDE by 6 PLUS
DIVIDE by 6 PLUS
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DIVIDE by 6
Below is an example of how a SACCO can calculate interest on a Savings Deposit

Account
Month
Minimum
balance held
A
Shs
1
2
3
4
5
6
Applicable
annual
interest
B
60,000
120,000
200,000
250,000
100,000
50,000
AxB
Interest payable
per month C/6
C
Shs
D
Shs
3%
1,800
300
3%
6,000
1,000
3%
1,500
250
Total Interest Payable for Six Months
1,550
At the end of 6 months and end of the year, DEBIT interests paid on Savings
Account and CREDIT respective members Accounts as follows
A/C Code
Account Name
Amount (Shs)
Debit
Credit
Interest on Members deposits expense
X
Members savings Account (85%)
X
Withholding Tax Payable (15%)
X
Narration: Interest paid on members accounts for .. Months ended . (Date)
13.3.3 Expenditure Documentation

The following documents shall constitute expenditure supporting documents.
Appointment letters, Training application form, Leave application forms

Overtime Claim Forms, Payroll, Pay advice slips
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13.4
Bank summary and bank schedules, Expenditure Claim Forms

Petty cash Payment Voucher, Cheque Payment Voucher
Accountability statement, Purchase order, Requisition forms
Order Forms
Journal Voucher Form
Invoices, GRN, Delivery notes
Etc
PAYROLL COSTS
13.4.1 Introduction
Payroll costs include the cost of hiring staff on a permanent or on a casual basis.
It does not, however, include costs of hiring consultants.
The overall policy on staff is set out in a separate manual. This document only
serves to cover the accounting aspect.
13.4.2 Personnel Files

Each employee shall have a personal file kept by the Official responsible for staff
matters. These files shall contain among others, the employee bio-data, photographs,
application, interview details, CV, job description, salary scale and monthly gross pay,
appraisal reports and any other documentation. These files shall be updated on a regular
basis
A Pay Roll (FM8) shall be prepared monthly and shall reflect the payments due
to all employees. A payroll summary will be filled for all permanent staff salaries
paid by the respective departments.
All casual staff wages will be paid by cash.
13.4.3 Salary Deductions

1) National Social Security Fund
A SACCO shall have all its employees registered with the National Social
Security Fund (NSSF) as stipulated in the NSSF Act 1987.
SACCOs shall comply with the National Social Security Fund (NSSF) Act and
deduct NSSF, from each employees gross pay, in accordance with the Act. In
addition, SACCOS shall contribute towards each employees NSSF as stipulated
in the Act. Contributions shall be as follows:
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Employee
- 5% of the employees gross pay
Employer (The SACCO) -10% of the employees gross pay
ii) Pay As You Earn (PAYE)

SACCOs shall comply with the Income Tax Act and deduct PAYE, from each
employees gross pay, in accordance with the tax tables in place at any point in time.
Computation of PAYE
Gross Pay range (GP)
Less or equal to Shs 130,000
More than Shs 130,000 but less than Shs
235,000
More than Shs 235,000 but less than Shs
410,000
More than Shs 410,000
Rate
NIL
10%
(GP-130,000)*20%)+10,500
(GP-410,000)*30%)+45,500
iii) Other Deductions

Any other lawful deductions as Management may decide from time to time shall be
effected on the Payroll
13.4.4 Remittance Of Deductions
a) National Social Security Fund
NSSF deductions shall initially be credited to a liability account under Statutory
Deductions Payable pending remittance to the NSSF. SACCOs shall also comply with
the time frame stipulated in the NSSF Act so as to avoid penalties levied by the NSSF.
Deductions [in total 15% of each employees gross pay] shall be remitted to the NSSF
by the 15th of the month following the month of deduction (e.g. deductions for the
month of May shall be remitted by 15 June etc).
SACCOS shall submit the NSSF return and obtain a receipt for the payment made as
evidence that the liability has been settled.
b) Pay As You Earn
PAYE deductions shall initially be credited to a liability account under NSSF payable
pending remittance to the URA. SACCOs shall also comply with the time frame
stipulated in the Income Tax Act so as to avoid penalties levied by the URA.
Deductions shall be remitted to the URA by the 15th of the month following the month
of deduction (e.g. deductions for the month of May shall be remitted by 15 June etc).
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In the event of failure to raise the Funds to remit statutory deductions or to pay Salaries
for a given month, the Manager shall contact the relevant authorities before the expiry
of the remittance deadline for advice.
13.4.5 Payroll Processing
Payrolls shall be prepared using the format laid out in (Appendix) and shall be
processed into a special Day Sheet or Journal Voucher (JV) to ensure that all the
necessary accounting has been done. The Day Sheet is elaborated below.
SACCO NAME
DAY SHEET
Date
A/C Code Account Name
Debit Credit
Shs
Shs
Gross Pay
X
Allowances (accordingly)
X
NSSF 10% (employers contribution)
X
Statutory deductions Payable(PAYE &NSSF 15%)
X
Salary Advance
X
Other accounts (accordingly)
X
Staff Savings A/Cs (accordingly) with the NET Pay
X
Totals
XX
13.4.6 PAYMENT OF SALARIES

a) Authorization of Salary Payments
The Manager shall authorize payment of Salaries by approving the Payroll together with
the Payment Vouchers and none cash vouchers that shall be prepared in respect of the
accounting entries derived there-from.
b) Mode of Payment
It is preferable that all SACCO staff operate Savings accounts with the SACCO such
that their monthly salaries may be deposited/credited to those accounts.
c) Date of Payment
Salary payments shall be effected within the fourth week of the month for which
Salaries are being paid so as to uphold the matching concept.
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XX

14.1
MANAGEMENT POLICY
In accordance with the Cooperative Societies Statute 1991, the members shall nominate for appointment
annually or after 3 years a Certified Public Accountant, or a firm of qualified auditors whose duty shall be to
perform an audit of the financial statements of a SACCO and to give an opinion in accordance with
International Standards on Auditing as adopted in Uganda.
14.2
INTERNAL AUDIT AND SUPERVISION

Internal Audit and Supervision shall be carried out by the audit and supervision committee
appointed by the Annual General Assembly
14.3
APPOINTMENT OF EXTERNAL AUDITORS

The members shall give management the mandate to identify suitable external auditors and to
fix the remuneration and terms of reference. The identified auditors shall be presented to the
Annual General meeting, and by a resolution shall be nominated for appointment.
Engagement Letter
The appointed auditor shall be given an engagement letter tailored to the nature of the
engagement, indicating the scope of work, the agreed fees, deliverables, time schedule, his
responsibility and managements responsibility and the need to provide a management letter.
14.4
SUITABILITY FOR NOMINATION

The following qualifications shall be used as benchmarks for assessing the auditors suitability
for nomination:
14.5
Every partner (of the Audit firm) must be a registered member of the Institute of Certified
Public Accountants of Uganda.
The partner(s) with their staff must not have any financial, personal or other relations with
SACCO that may impair their independence.
A valid professional indemnity insurance cover for negligence in the performance of its
duties.
THE AUDIT PROCESS
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14.5.1 Planning for the Statutory Audit

The Accountant shall ensure that draft financial statements for audit are ready within
one month after the end of the financial year. The audit shall start latest in the second
month following end of the fiscal year.
14.5.2 Execution of the Audit
The Accountant shall ensure that all the relevant schedules for the audit are ready so
that the exercise is expedited. The external audit fieldwork shall be completed in the
third month after the end of the fiscal year.
14.5.3 Report to Management
The Manager shall receive a draft report from the external auditors. An internal meeting
with the Audit and Supervision Committee shall be held to discuss the findings by the
external auditors and the comments from management. The Management shall then
submit a final response to the external auditors for consideration. The final report shall
be submitted to the Board at their next meeting.
14.5.4 Draft Audited Financial Statements
The Management shall receive the draft audited financial statements. The Manager shall
then forward them to the Audit and Supervision Committee for review and comment.
The draft Statements shall be distributed to the members of the Board of Directors for
review and comment. If management and the members of the Board are satisfied with
the draft Statements, the external auditors shall be requested to submit copies for
signature of two members of the Board of Directors.
14.5.5 Board Meeting
The Board of Directors shall meet to approve the financial statements. The Balance
Sheet shall be signed by two of the directors. The Secretary shall sign the Directors
Report. Both documents shall be appropriately dated.
14.5.6 Letter of Representation
The Manager shall sign a letter of representation and submit it to the external auditors.
This letter confirms the nature of representations made to the firm during their audit.
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14.5.7 Directors Responsibility Report
Whereas the audit report contains a statement to the effect that directors are responsible
for the financial statements, a separate statement called a directors responsibility report
is meant to remind the directors of their responsibility for the preparation of financial
statements which present a true and fair view of the results of operation of the entity for
an accounting period and of its financial position as at the end of the accounting period
and which comply in all material respects with Generally Accepted Accounting
Principles and the Cooperative Regulations 1992.
The directors (preferably those who sign the financial statements) should sign this statement on
behalf of the board.
14.6
DISTRIBUTION OF AUDITED ACCOUNTS

14.6.1 Registrar of Cooperatives and U.R.A
The SACCOs Secretary shall within 42 days after the Annual General Meeting for the
year send copies of the final signed financial statements to the Registrar of Cooperatives
and the revenue authorities.
14.6.2 SACCO Management and the Board
The SACCO Management shall retain a copy of the Audited Accounts for reference
purposes and the Secretary shall keep a copy for record purposes
14.7
REMOVAL OF EXTERNAL AUDITORS

14.7.1 At any Annual General Meeting, a retiring auditor shall be deemed re-appointed unless
the auditor is disqualified for re-appointment, or a resolution has been passed
appointing another auditor, or the auditor has given written notice to a SACCO of his
unwillingness to be re-appointed. No auditor shall be removed or changed except with
approval of the Annual General Assembly.
14.7.2 An audit firm should not serve as an Auditor, continuously for more than four years.
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APPENDIX 1: COMMITTEES STATEMENT OF RESPONSIBILITY

STATEMENTS OF THE COMMITTEES RESPONSIBILITIES
It is the duty of the Committee to prepare financial statements for each year that show a true and fair
view of the state of affairs of the SACCO as at the end of the financial year. The Committee is also
required to ensure that the SACCO keeps proper books of account and records, which disclose with
reasonable accuracy, at any time, the financial position of the SACCO. They are also responsible for
safeguarding the assets of the SACCO.
The Committee accept responsibility for the annual financial statements, which have been prepared
using appropriate accounting polices supported by reasonable and prudent judgments and estimates, in
conformity with Generally Accepted Accounting Principles and in a manner required by the
Cooperative Societies Statute 1991 and the Cooperative Regulations 1992. The Committee is of the
opinion that the financial statements give a true and fair view of the state of affairs of the SACCO and
of its operating results. The Committee further accept responsibility for the maintenance of accounting
records, which may be relied upon in the preparation of financial statements, as well as adequate
systems of internal control.
Nothing has come to the attention of the Committee to indicate that the SACCO will not remain a
going concern for at least the next twelve months from the date of this statement.
Yours faithfully,
_______________________ Date ________

Chairperson
___________________ Date___________
Secretary
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APPENDIX 2: MODEL CHART OF ACCOUNTS
TheGeneralLedger
A/C Code
A/C Title
01-10000
ASSETS
01-1-1000
Cash and Bank Balances
N/A
10-1-1001
10-1-1005
Cash at Hand
Cash at Bank 1
Cash at Bank 2
Cash at Bank 3
Cash at Bank 4
A
A
A
A
A
10-1-2000
Loans Outstanding
N/A
10-1-2001
10-1-2005
Loans to Females
Loans to Males
Loans to Groups
Loans to Institutions
Loans to Others
A
A
A
A
A
10-1-3000
Advances
N/A
10-1-3001
Employee advances
10-1-4000
Investments
N/A
10-1-4001
10-1-4002
Short Term Investment

Long Term Investment
A
A
10-1-5000
Prepayments
N/A
10-1-5001
Prepaid Rent
Prepaid Utilities
Other Prepayments
A
A
A
10-1-1002
10-1-1003
10-1-1004
10-1-2002
10-1-2003
10-1-2004
10-1-5002
10-1-5003
Active/ Not Active
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10-1-6000
Receivables
N/A
10-1-6001
10-1-6003
Interest receivable on Loans

Interest receivable on Fixed Deposits
Overdrawn Savings Accounts
A
A
A
10-1-7000
Amounts Receivable from Related Party
N/A
10-1-7001
10-1-7002
Advances to Board Members

Other receivables from Board Members
A
A
10-1-8000
Stock
N/A
10-1-8001
10-1-8003
Stock of T-Shirts
Stock of Stationery
Stock of Other Assets
A
A
A
10-1-9100
Tangible Assets
N/A
10-1-9101
Motor Vehicles/Cycles
Equipment
Furniture & Fittings
Computers & Accessories
Land and Buildings
A
A
A
A
A
10-1-9202
Intangible Assets
Software
Goodwill
N/A
A
A
10-2-0000
LIABILITIES
10-2-1000
Savings and Time deposits
N/A
10-2-1001
10-2-1005
Members savings - Females

Members savings - Males
Members' Savings - Groups
Members' Savings - Institutions
Members' Savings - Others
A
A
A
A
A
10-2-2000
Interest and Dividends Payable
N/A
10-2-2001
Interest payable on Savings by Females

Dividends payable to Members
A
A
10-1-6002
10-1-8002
10-1-9102
10-1-9103
10-1-9104
10-1-9105
10-1-9200
10-1-9201
10-2-1002
10-2-1003
10-2-1004
10-2-2003
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10-2-3000
Other Accounts Payable and Accruals
N/A
10-2-3001
Interest payable on Borrowed Funds

Withholding Tax payable
Income Tax Liability
Professional fees Payable
Suppliers Payable
NSSF payable
PAYE payable
Affiliation fees Payable
Net Salaries/Wages Payable
A
A
A
A
A
A
A
A
A
10-2-4000
10-2-4001
10-2-4002
10-2-4003
Other Liabilities
N/A
General Loan loss provisions

Specific Loan loss provisions
Accumulated Depreciation
A
A
A
10-2-5000
10-2-5001
10-2-5002
10-2-5003
10-2-5004
Non-Current Liabilities
N/A

Members Deposits Long-term Fixed Deposits
Long term Debt Market rate
Long term Debt Subsidized rate
10-3-0000
EQUITY AND RESERVES
10-3-1000
Member shares
N/A
10-3-1001
10-3-1003
Shares Class 1
Shares Class 2
Shares Class 3
A
A
A
10-3-2000
Statutory Reserves
N/A
10-3-2001
10-3-2002
Reserve Fund
Share Transfer Fund
A
A
10-3-3000
Retained earnings
N/A
10-3-3001
Retained Profit
Current Year Profits
A
A
10-2-3002
10-2-3003
10-2-3004
10-2-3005
10-2-3006
10-2-3007
10-2-3008
10-2-3009
10-3-1002
10-3-3002
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10-3-4000
Capital Grant (Donated Equity )
N/A
10-3-4001
10-3-4004
Donor 1
Donor 2
Donor 3
Other Donors
A
A
A
A
10-4-0000
INCOME
10-4-1000
Loans Income
N/A
10-4-1001
10-4-1003
Interest income on Loans

Commission on loans
Penalty and Surcharge
Other Loans Income
A
A
A
A
Donor 3
Donor 4
Savings and Membership fees Income
N/A
10-4-2005
Membership fees
Entrance fees
Sale of stationery
Saving Ledger fees
Account closure fees
A
A
A
A
A
10-4-3000
Grant Income
N/A
10-4-3001
10-4-3002
Grant Income for Loan Capital

Grant Income for Operations
A
A
10-4-4000
Investments Income
N/A
10-4-4001
10-4-4002
Interest on Fixed Deposits

Other Investment Income
A
A
10-4-5000
Other income
N/A
10-4-5001
Recovery of loans previously written off

Interest from Bank A/C
Profit on Sale of Fixed Assets
Foreign Exchange gain
Miscellaneous income
A
A
A
A
A
10-3-4002
10-3-4003
10-4-1002
10-4-1003
10-4-2001
10-4-2002
10-4-2003
10-4-2004
10-4-5002
10-4-5003
10-4-5004
10-4-5005
96of158

EXPENDITURE
Financing Costs
N/A
N/A
10-5-1004
Interest expense on Members' Savings

Interest expense on Borrowed Funds
Interest expense on Time Deposits
Other Financing Costs
A
A
A
A
10-5-2000
Direct Loan Costs
N/A
10-5-2001
10-5-2003
Bad debts Expense

Loan appraisal costs
Loan monitoring and recovery costs
10-5-2004
10-5-2005
Legal Fees on Loans

Other Direct Loan Costs
A
A
A
A
A
10-5-3000
10-5-3001
10-5-3002
10-5-3003
10-5-3004
10-5-3005
10-5-3006
Staff Costs
N/A
Gross salaries
Staff welfare and incentives
NSSF 10%
Gratuity
Staff trainings, workshops and capacity building
Other Personnel Expenses
A
A
A
A
A
A
10-5-4000
Administration expenses
Stationery expenses
Rent of office premises
Office expenses
Telephone
Internet and e-mail
Professional fees
Transport and travels
Advertisement, announcements and publicity
Power/fuel costs
Accommodation allowances
Duty allowances
Community mobilisation
Audit costs & legal fees
Depreciation
N/A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
10-5-0000
10-5-1000
10-5-1001
10-5-1002
10-5-1003
10-5-2002
10-5-4001
10-5-4002
10-5-4003
10-5-4004
10-5-4005
10-5-4006
10-5-4007
10-5-4008
10-5-4009
10-5-4100
10-5-4101
10-5-4102
10-5-4103
10-5-4104
97of158

10-5-4105
Loss on Sale of Fixed Assets
10-5-4106
10-5-4022
Equipment Repairs & Replacement

Security expenses
Computer expenses
Donations and gifts
Bank charges
Affiliation fees expense
Miscellaneous administrative expenses
A
A
A
A
A
A
A
10-5-5000
Governance expenses
N/A
10-5-5001
10-5-5004
General meeting expenses

Registration fees
Committee expenses
Other Governance expenses
A
A
A
A
10-5-6000
Statutory Expenses
N/A
10-5-6001
Cooperative development Fund Contribution

Members training
Remittances to Secondary Society (Education Fund)
Other statutory Expenses
A
A
A
A
10-5-4107
10-5-4108
10-5-4109
10-5-4020
10-5-4021
10-5-5002
10-5-5003
10-5-6002
10-5-6003
10-5-6004
Keytosymbolsused
AreferstoActive
N/AreferstoNon Active
98of158

TheSavingsLedger
A/CNumberformat
ClassificationofAccounts
Comments
2X1XXXX
SavingsbyFemales
CorrespondstoGLControlAccount1021001
ShallcontainallfemalesaversSavingsaccounts
2X2XXXX
SavingsbyMales
2X3XXXX
2X4XXXX
2X5XXXX
SavingsbyGroups
SavingsbyInstitutions
SavingsbyOthers
TheLoansLedger
A/CNumberformat
3X1XXXX
3X2XXXX
3X3XXXX
ClassificationofAccounts
LoanstoFemales
LoanstoMales
LoanstoGroups
LoanstoInstitutions
3X4XXXX
3X5XXXX
LoanstoOthers
Comments
Appliestoall FemaleborrowersLoanAccounts
irrespectiveoftheLoanProduct
Appliestoall MaleborrowersLoanAccounts
Appliestoall GroupborrowersLoanAccounts
Appliestoall Institutional borrowersLoan
AccountsirrespectiveoftheLoanProduct
Appliestoall Other borrowersLoanAccounts
99of158

APPENDIX 3: SAMPLE ACCOUNTING BOOKS, FORMS AND

DOCUMENTS
BK1: ACCOUNT OPENING REGISTER
SACCONAMECOOPERATIVESAVINGS&CREDITSOCIETYLTD
AccountOpeningRegister
Date
TitleofAccount
AccountNo.
CumulativeNo.of
Accounts
Remarks
ThisRegistershouldbeaCounterBookwithprenumberedpages
BK2: RESERVE CASH REGISTER.
SACCONAMECOOPERATIVE&CREDITSOCIETYLTD
RESERVECASHREGISTER
Date
ShillingNotes
ShillingCoins
50,000 20,000 10,000 5,000 1,000 500 200 100 50 20 10 5 2 1 Total Initials
ThisRegistershouldbeaCounterBookwithPrenumberedpages.
100of158

BK3:
CASH COUNT BOOK
SACCO NAME CO-OPERATIVE SAVINGS & CREDIT SOCIETY LTD

Cash Count Book
Cashier1
Shs
Notes
Date
CashierII
Shs
Total
Shs
50,000
20,000
10,000
5,000
1,000
Coins
500
200
100
50
20
10
Spoilt
Chequesetc
Excess/
shortages
Reserve
BalanceB/F
Cashin
Cashout
Balance
Total
CashiersSignature:
.
Checkedby:
..
101of158

BK4: FIXED DEPOSITS REGISTER
SACCO NAME CO-OPERATIVE SAVINGS & CREDIT

SOCIETY LTD.
Fixed Deposits Register
Date
Title ofA/C
A/CNo
Amount
Deposited
Period
Expiry
Date
Interest
Rate
Totalat
Maturity
Theregistershouldbeacounterbookwithprenumberedpages
BK5: INCOMING CHEQUE REGISTER

SOCIETY LTD.
Incoming Cheque Register
Date
ChequeNo
Amount
AC/No.Deposited
on
Titleof
A/c
Remarks
102of158

BK6: STATIONERY INVENTORY REGISTER

SOCIETY LTD.
Stationery Inventory Register
Date
Particulars
Number
CostperUnit
TotalValue
Remarks
BK7: LEDGER CARD REGISTER

SOCIETY LTD.
Ledger Card Register
Date
Nameofcustomer
Account
No
Ledger
No
Initialof
Manager
103of158

Theregistershouldbeacounterbook withprenumberedpages
104of158

BK8: DOCUMENT MOVEMENT REGISTER

SOCIETY LTD.
Document Movement Register
Date
Dateof
voucher
Bundle
Ledger
Reason
for
Removal
Authorization
Official
Name&
Date
Signature Returned
ofOfficial
Signature
of
returning
Official
Signature
of
receiving
Official
BK9: MEMBERSHIP/SHARES REGISTER
SACCO NAME CO-OPERATIVE SAVINGS & CREDIT SOCIETY

LTD.
Membership/Shares Register
Name:
Membership No:
Address: .
Dateof
Natureof
Noof
Valueofshares
Transaction
Transaction
Shares
purchased(Shs)
Valueofshares
sold(Shs)
Othercapital
transactions
Balanc
e(Shs)
105of158

BK10: OUT GOING CHEQUE REGISTER

SOCIETY LTD.
Out going Cheque Register
Date
Cheque
No
Drawee
A/c
Number
Amount
Remarks
BK11: PASSBOOK DISTRIBUTION REGISTER

SOCIETY LTD.
Passbook Distribution Register
Date
Name
OwnersAccount
No
Passbook
No
Owners
Signature
Initialof
Manager
106of158

BK12: SHARE CAPITAL REGISTER
SHARECAPITALREGISTER
Date
Opening
Balance
(Ugshs)
Transactionsfortheday
No.of
Shares
Valueofshares
purchased
(Ugshs)
Valueof
sharessold
(Ugshs)
Closing
Balance
(Ugshs)
Othershare
capital
transactions
ThisRegistershouldbeaCounterBookwithPrenumberedpages
BK13: UNPAID CHEQUE REGISTER
UNPAIDCHEQUEREGISTER
Dateof
receipt
Depositors Cheque
Name
No.
Cheque Drawee A/cNo.

Date
Amount Bankon
whomChq
isdrawn
Remarks
107of158

ThisRegistershouldbeaCounterBookwithPrenumberedpages.
BK14:FIXEDASSETSREGISTER
FixedAssetsRegister
Asset
description
Manufacturers
SerialNo.
Dateof
Purchase
Value(shs)
Unique
Identification Location
No.
(egoffice)
User
Remarks
108of158

FM1: APPLICATION FOR MEMBERSHIP

Name:
.
Date:
IherebyapplyforMembershipintheSociety.
Applicantsfullnames
ResidentialAddress
Sex::
LocationofBusiness
DateofBirth:
Occupations:
Nameandaddressofemployer:(ifany).
IfApplicationisacceptable,IagreetopayanentrancefeesofShs.and
ShareCapitalofShs.For.shares.
Iagreetoabidebythebyelawsandanyotherrulesandregulationsofthesociety.
Incaseofdeath,Inominatetotakeovermysharesinthe
society.
SignatureofApplicant:.
FOROFFICIALUSEONLY
Thisapplicationhasbeenapproved/rejectedbythecommitteeduringthesocietyCommittee/Boardmeetingsof
,minuteno..
Membershipnumberallocated
Signed.
Signed
MANAGERCHAIRPERSON
Date:Date:.
*Pleasegivereasonsforrejection
**Groupapplicantsshouldattachsupportingdocuments
109of158

FM 2: APPLICATION FORM FOR OPENING A PERSONAL SAVINGS ACCOUNT

Name of SACCO:
Date:
DearSir,
We/IherebyrequestyoutoopenaSavingsAccountinmynames(entitled.
.
Youarerequestedtohonouranydrawingsinstructionsbearingmysignatureasperthespecimengivenbelow,
andonyourspecimenofsignaturecardsandalsothesignaturesofanypersonwhomaybegivenmymandate
tosignonmybehalf.IncaseofdeaththefollowingpersoncantakeovermySavingsAccountandtheir
particulars:
Name:Village/Address:.
IhereunderalsosupplythefollowingpersonalparticularstowhichItestifytheircorrectness.
Presentaddress: Village:.
Parish:
Subcounty
Age:..
POBox
Tel:
110of158

Occupations:
Nameandaddressofemployer:(ifany).
IherebyagreetoconformtotherulesgoverningSAVINGSAccountatyoursociety
SignatureofApplicant:1..
2..
Our/myfirstsavingsdepositisShspaidby..
OtherBankersBranch
Introducedby:1...A/CSignature...
2A/C.Signature.
CheckedBy
Approvedby:.AccountNo:..
FM3:APPLICATIONFORMFORPURCHASINGADDITIONALSHARES
Name of SACCO
Iamapplyingtopurchasesharesinthesocietyasperthefollowingparticulars
Nameofapplicant:.
ID/No/GPTNo:...
MembershipNo:inthe society...
Residentialaddress(Village,Parish,Subcounty...
NumberofSharesAppliedfor...
TotalValueofsharesShs..
Theundersignedagreetoabidebythesocietysbylaws,whichgovernthesubscriptionofthe
societysshares.
Signed:..Date:
(GPTstandsforGraduatePoolTaxTicketNo)
NBYourCheque/Cashwillbeacknowledgedimmediatelyby theManageroftheSocietyandShare
Certificatewillbeissuedinduecourse.
SeeNotes:
PleaseReadthroughthefollowingNotes:
111of158

ThelimitofthenumberofsharesandindividualcanbuyissubjecttotheSocietysbyelawsandthe
CooperativeActbasedonthefollowingcriteria.
1.ThevalueofoneshareisShs
2.EntrancefeeisShs.
3.TheMinimumnumberofsharestobepurchasedbyanindividualareshares
OFFICIAL USE ONLY
DateReceived
.
AmountReceived:
CashreceiptNo:.Dated:.
ShareCertificateNo:
CashiersSiganature.
ManagersSiganature..
FM4:RESERVECASHLODGMENTFORM

SOCIETY LTD.
ReserveCashLodgmentForm
Name:
Date: ..20..
Notes
Coins
50,000
20,000
10,000
5,000
1,000
500
200
Subtotal(notes)
100
50
Subtotal
(notes)
Grandtotal
Amountinwords:______________________________________________________________________
CashiersName:__________________________
Signature:_____________________________
112of158

Authorizedby:__________________________
Manager
Signature:_____________________________
FM5:RESERVECASHREQUISITIONFORM

SOCIETY LTD.
CashReserveRequisitionForm
Name:
Date: ..20..
Subtotal(notes)
Notes
Coins
50,000
20,000
10,000
5,000
1,000
500
200
100
50
Subtotal
(notes)
Grandtotal
Amountinwords:____________________________________________________________________
113of158

CashiersName:__________________________
Signature:__________________________
Authorizedby:__________________________
Manager
Signature:__________________________
FM6:LOANAPPLICATIONFORM

SOCIETY LTD.
Name:...
NameofApplication
MembershipNo:
ResidentialAddress
LocationofBusiness
SavingsAccountNo:
114of158

AmountofLoanAppliedforShs(Amountinwords)
.
PurposeforwhichtheLoanisrequired:.
Datewhentheloanisrequired:..
Fromwherewillyougetthemoneytorepaytheloan?
Securitiesoffered:1ApproximateValue(shs)..
2Approximate Value(shs)
3ApproximateValue(Shs)..
Valueofsharesinthesociety:..
BalanceonmySavingsAccountdepositintheSociety(Shs)
Guarantors:I/we,theundersignedagreetorepayfromourownsources,thetotalamountoftheloanowedbytheapplicant
tothesocietyiftheapplicantfailstorepaytheloanGrantedbythesocietybythetimeitisdue
Name:.MembershipNoSavingsA/csignature.
Name:.MembershipNoSavingsA/csignature.
Iundertaketofullyrepaytheloanappliedforwithinterestthereontheduedatesagreeduponwiththesociety.Ialso
authorizethesocietytodeductfrommysavingsAccount,ShareCapitalorsellmyassetspledgedasasecuritiesforthe
loanwithoutanyhindrancefrommeoranyoneelsetorecoveranyamountoftheloanthatIwillhavefailedtopay
Name:...SignatureofapplicantThumbprint
IagreewithandherebygivepermissiontomyspousetoborrowfromthesocietyShs..forthepurposesof
.andpledgethesecuritiesmentionedabove.
Name:..SignatureofapplicantThumbprint
VerifiedbyLC1(Name&SignatureandStamp).
FM7:
PAYMENT REQUISITION FORM

BoxnumberandphysicaladdressRegistrationNo
PAYMENTREQUISITIONFORM
Thisrequestisbeingmadeby:...
Onthisdateof.
115of158

Theamountrequestedis.
..
..
.
Andtheamountrequestedwillbeusedinthefollowingmanner...
..
..
(Useseparatesheetifthisnotenough)
Signature:
ACCOUNTANT
Paymentcanbemade/Notmade/Paymentreferredtonextdate
NoteItem:...
Unexpendedbalance
Signature:
MANAGER
PaymentApproved/Disapproved:
FM8:PAYROLLFORM
PAYROLLFORM
a
Nameof
Employee
Basic
Pay
c=a+b
Allowances GrossPay
PAYE
NSSF
Other
deduction deduction deductions
g=c
(d+e+f)
NetPay
116of158

Totals
Preparedby:
Checkedby:
Approvedby:...
Date:
Date:..
Date:
FM9: SALARY ADVANCE REQUEST FORM

SOCIETY LTD.
Salary Advance Request Form
Name:..
Designation:.
SalaryadvancerequestedforShillings.Amountinwords.
....)
Purposefrowhichtheadvanceissought
.
Toberecoveredfrommysalaryin.months(pleasenotethatallsalaryadvances
shallberecoveredinaperiodofnotmorethan4(Four)months.
Signature:.
Date:.
Recommendedby:
(Manager)
Date:..
Authorisedby:.
Date:..
Receivedby:
Date:..
FM10: PURCHASES REQUISITON FORM
SACCONAMECOOPERATIVE&CREDITSOCIETY
PURCHASESREQUISITONFORM
Date
No.
Itemsrequested
Quantity
117of158

_____
____________________________________
___________________
_____
____________________________________
___________________
_____
____________________________________
___________________
_____
____________________________________
___________________
_____
____________________________________
___________________
_____
____________________________________
___________________
Requestedby_____________________________________
Sign________________
Designation_______________________________________
Authorizedby_____________________________________
Sign________________
Designation_______________________________________
Receivedby_______________________________________
Sign_______________
Date______________________________________
FM11:THIRDPARTYMANDATEFORM
118of158

A/CNo
Photographof
thethirdparty
THIRDPARTYMANDATEFORM
TO,
I/Werequestyouthat,untilyoureceivewrittendirectionfromme/ustothecontrary,treatandconsidermy
/our Mr./ Mrs/ Miss .. as fully empowered to draw and sign
Cheques/Vouchersonmy/ouraccount,whetherthesamebeincreditoroverdrawn,andtoendorseoraccept
Cheques,BillsandPromissoryNotesandotherdocumentsinmy/ourname,forallofwhichthisshallbea
fullandsufficientauthoritytoyou,andshallbebindinguponme/usandallotherpersonsclaimingfromor
underme/us.
..
SignatureofOwnerofAccount
SignatureofWitness
A/cNo
SignatureofThirdParty
Forinternaluse
CheckedbyCashier.
ApprovedbyManager.
119of158

FM12:FIXEDASSETSDEPRECIATIONFORM
FIXEDASSETSDEPRECIATIONFORM
FixedAssetClass:..DepreciationRate:
S/N
Nameof
theAsset
Dateof
Purchase
Costof
purchase
Depreciation
charge
Accumulated
depreciation
Written
down
Value
Remarks
FM13:BANKRECONCILIATION FORM
BANKRECONCILIATIONSTATEMENT
BankName:..Date:
Date
Particulars/Narration
Closingbalanceaspercashbook
Add:Alldirectcredits
Allunpresentedcheques
Shs000
xxx
xxx
TOTALADDITIONS
Less:Alldirectdebits
Allun creditedcheques
TOTALDEDUCTIONS
BalanceasperBankStatement
Shs000
XXX
XXX
XXX
(xxx)
(xxx)
(XXX)
XXX
120of158

FM14: STOCK COUNT FORM

STOCKCOUNTFORM
Date
No.
ItemName
Quantity
Countedby_____________________________________Sign________________
Witnessedby_____________________________________Sign________________
121of158

FM15:
REFUND CLAIM FORM

BoxnumberandphysicaladdressRegistrationNo
ReFundClaimForm
Thisrequestisbeingmadeby:...
Onthisdateof.
Theamountrequestedis.
..
..
.
Andtheamountrequestedwasusedinthefollowingmanner...
..
..
(Useseparatesheetifthisnotenough)
Signature:
ACCOUNTANT
Paymentcanbemade/Notmade/Paymentreferredtonextdate
NoteItem:...
Unexpendedbalance
Signature:
MANAGER
PaymentApproved/Disapproved:
122of158

DOC1:FIXEDDEPOSITCERTIFICATE

SOCIETY LTD.
FIXEDDEPOSITCERTIFICATE
Icertifythaton/./20..placedtotal
amountingtoShs..(..)
onlywith.TheFixedDepositwill matureafter
..dateofplacementandinanycasenotlaterthan.././20theFixedDeposit
interestattherateof..%per.(per...)payableonsecurity.
DateSigned
.
Managers
Treasurer
Official
SACCO
stamp
123of158

DOC2:FIXEDDEPOSITSLIP

SOCIETY LTD.
FixedDepositSlip
Date: ..20..
Credit: ..
To:
Pleasereceivethefollowingcashbeingdepositedinrespectofmyfixeddepositfor..months.
Notes
Cashiers
Stamp
Shs.
Shs.
Shs.
Shs.
Shs.
50,000
20,000
10,000
5,000
1,000
Coins
Shs.
500
Shs.
200
Shs.
100
Shs.
50
TotalCash
TotalCheque
Listedoverleaf
AmountofShillingsinwords:________________________________________________________________
Paidby:__________________________________
Sign:________________________
SavingsAccountNo:_______________________
Authorizedby:____________________________
Manager
124of158

DOC3:
INTERNAL CREDIT VOUCHER

SOCIETY LTD.
INTERNAL CREDIT VOUCHER
SerialNo:___________________________Date:_______________________________
Credit:______________________________
A/CNo:_______________________________
Being:____________________________________________________________________________________
__________________________________________________________________________________________
UgShs
Amountinwords:___________________________________________________________________________
__________________________________________________________________________________________
ContraAccount:________________________________
Preparedby:___________________________________
Approvedby:_________________________
125of158

Doc4:INTERNALDEBITVOUCHER

SOCIETY LTD.
INTERNAL DEBIT VOUCHER
SerialNo:___________________________
Date:_______________________________
Debit:______________________________A/CNo:_______________________________
Being:____________________________________________________________________________________
__________________________________________________________________________________________
UgShs
Amountinwords:___________________________________________________________________________
__________________________________________________________________________________________
ContraAccount:________________________________
Preparedby:___________________________________
Approvedby:_________________________
126of158

DOC5:ORDINARYSHARECERTIFICATE
SACCONAMECOOPERATIVE
&CREDITSOCIETY
(Includeregistrationnumberandaddress)
CertificateNo..
NoofShares.
CertificateNoMemberRegNo.Dateofissue..
Dateofissue.20
Names..
.
ORDINARYSHARECERTIFICATE
Address
.
Thisistocertifythat.
.of.istheregisteredholderof
fullypaidsharesofShseach,intheshare
DISTINCTIVENOS.
capitalofCooperativeSavings&CreditSocietyin
accordancewiththebye lawsofthesociety.
AMOUNT
DateRpt
NoShares
DISTINCTIVERECEIPTNOs.
Date
ReceiptNo No.Shares
Chairman
Totalto
Date
Shs
TotaltoDate
No.ofTransfers
No.ofoldCertificates..
Receivedby..
AMOUNT GivenunderthecommonSeal/Stampof
...
thisdayof..20
Secretary
(20..)Shs.
NOTE:NoTransferoftheabovesharescannotberegisteredunlessifaccompaniedby
thiscertificate
127of158

DOC6:PAYMENTVOUCHER

Boxnumber,physicaladdressRegistrationNo
Payment Voucher
Name/Addressofpayee_____________________________________
Vr.No:_______________________
_________________________________________________________
Date:_________________________
Doc/ReceiptNo:____________________FileNo:_______________
ChequeNo:___________________
BankA/CNo:_________________
Item
DescriptionofPayment
BudgetLine
Amount
Total
Amountinwords:__________________________________________________________________________
__________________________________________________________________________________________
Preparedby:____________________________________
Approvedby:________________________
Date:___________________________________________
Date:_______________________________
Receivedby:____________________________________
Paidby:_____________________________
Date:_______________________________________
Date:________________________________
128of158

DOC7:
RECEIPT

PhysicaladdressandTelephonenumber
RECEIPT
RECEIVEDwiththanksfrom
________________________________________
___________________________________________________________
Date
___________________________________________________________
No.
ThesumofShillings
_________________________________________________________________________
__________________________________________________________________________________________
Beingpaymentof___________________________________________________________________________
__________________________________________________________________________________________
Cash/chequeNo.____________________________
Shs
.
Withthanks
Balance_____________________________________
_________________________________________
For:SacconameCoopSavingsandCreditSocietyLtd
129of158

DOC8:WITHDRAWALSLIP
WITHDRAWAL SLIP
Date: ...//.
SACCO NAME CO-OPERATIVE SAVINGS & CREDIT SOCIETY LTD.

Boxnumber,Telnumber&RegistrationNo
AccountNumber
AccountName:
Amountinwords:_________________________________________________
CustomerSignature
SignatureVer
AmountUSHS
IacknowledgeReceiptoftheaboveCash:
__________________________________
Supervisor:__________________________
Manager:_________________________
130of158

DOC9:SAVINGSDEPOSITSSLIP

SOCIETY LTD.
Savings Deposit Slip
Credit:
Date:
A/CNo:
Notes
Cashiers
Stamp&
Signature
Shs.
Shs.
Shs.
Shs.
Shs.
50,000
20,000
10,000
5,000
1,000
Coins
Shs.
500
Shs.
200
Shs.
100
Shs.
50
TotalCash
TotalCheque
Listedonreserve
_________________________________________________________________________________________
Paidby:__________________________________
Sign:________________________
131of158

DOC10:LOANREPAYMENTSLIP

SOCIETY LTD.
Loan Repayment Slip
Credit:
Date:
A/CNo:
Notes
Cashiers
Stamp&
Signature
Shs.
Shs.
Shs.
Shs.
Shs.
50,000
20,000
10,000
5,000
1,000
Coins
Shs.
500
Shs.
200
Shs.
100
Shs.
50
TotalCash
TotalCheque
Listedonreserve
_________________________________________________________________________________________
Paidby:__________________________________
Sign:________________________
132of158

DOC11: LOAN LEDGER CARD

SOCIETY LTD.
Loan Ledger Card
Serial No.
Name:
Address: .
Membership No: .
Savings No:
Principal Loan Amount (Shs) . Interest Amount (Shs) Total .

Loan Period . Interest Rate..
Date
OpeningBalance
Repayments
ClosingBalance
Principal
Interest
Principal
Interest
Principal
Interest
133of158

DOC12:SAVINGSLEDGERCARD
SAVINGSLEDGERCARD
Name.SerialNo..
PassBookNo...
AccountHoldersSignature..
AccountHolders
Photograph
Verifiedby
(ManagersSignature)
Date
Descriptionofthe
transaction
Debits
Credits
Balance
AuthorizingPersons
Signature
134of158

DOC13:GENERALLEDGERCARD
GENERALLEDGERCARD
AccountName.SerialNo.
AccountNumber.
Verifiedby
(ManagersSignature)
Date
Descriptionofthe
transaction
Debits
Credits
Balance
AuthorizingPersons
Signature
135of158

DOC14:SPECIMENSIGNATURECARD
SpecimenSignatureCard
AccountNo.
..
Current/Savings/FixedDepositAccount
Title/Nameoftheaccount______________________________________________________
(Surnamefirstfollowedbyothernames)
________________________________________________________________(fillinfull
namesofpartnersifany)
NameSignaturePositionAge
__________________________________
_____________________________
_______________________________________________________________
_______________________________________________________________
__________________________________________________ _____________
Date_________________________
Authenticatedby______________________________________________________
CashierManager
Date
_________________________________________________________
136of158

DOC15:DAYSHEET
SACCO NAME CO-OPERATIVE SAVINGS & CREDIT SOCIETY LTD.
DAYSHEET
Date:..
AccountCode
AccountNumber
Debit(Dr.)
Shs
Credit(CR)
Shs
Totals
Preparedby:.
Approvedby:............................................
Date:.
Date:
137of158

DOC16:
TILL SHEET

SOCIETY LTD.
TILLSHEET
CashierNo:_________________________
Date:_______________________________
S/No. Name
A/c
Dr.
S/No.
Name
A/c
Dr.
Prepared by: ____________________________Checked by:_______________________
138of158

DOC17:
Weekly Certificate of Balance Saving Account

SOCIETY LTD.
Weekly Certificate of Balance Saving Account as at ..

Ledger
No
Noof
A/cs
Balance
B/F
Total
Debits
TotalCredit
Balanceper
control
Balanceper
extract
139of158

DOC18:WASTESUMMARYSHEET

SOCIETY LTD.
Waste Summary Sheet
Debit
G/L Account
Credit
Cash
Savings
ShareCapital
Profit/Loss
Creditors
Debtors
Loans
BankA/C
CapitalGrants
StockStationery
PayrollLiabilities
FixedAssets(G)
Fixed Assets(L)
AccumulatedDep.
InterestReceivable
140of158

Preparedby:____________________________Checkedby:____________________
DOC19:CONTROLSHEET

SOCIETY LTD
ControlSheet
Account:..
Particulars
Checkfigure
Debit
Credit
Balance
Unit
Ref
141of158

142of158

DOC20:WASTESHEET

WasteSheet
Account:..
CREDIT
Proof
Ref
Cash Savings Current Loan Shares Banks Misce Revenue Ref

A/c
A/c
A/c A/c
A/c
DEBIT
Cash Saving
A/c
Current Loan Shares

A/c
A/c A/c
Banks Misce Rev

A/c
exp
143of158

APPENDIX 4: WORKED-OUT EXAMPLES

1. ExampleonpayrollProcessing
ConsideringasituationalcircumstancewherebyaSACCOhas10employeeswithonemanagerandthe
followingBasicPayrates.
Employee
Manager
Supervisor
AccountsOfficial
HeadofCredit
CreditOfficial
LoansOfficial
Cashier
AdministrativeOfficial.
Officemessenger
Securityguard
Basicpay
600,000
400,000
350,000
320,000
305,000
280,000
250,000
200,000
120,000
50,000
Eachoftheaboveemployees,exceptthemanager,isentitledtolunchallowanceof50,000/=.
Apartfromthesecurityguard,therestofothertheemployeesarealsoentitledtotransportallowance
of50,000/=.
TheSupervisorhappenstohavetakenasalaryadvanceof100,000/=duringthemonth.
TheManagerisentitledtohousingallowanceof100,000/=,lunchallowanceof60,000/=and
transportallowanceof50,000/=.
TheManagergotaloanfromtheSACCO.Inrepaymentofthisloan,theSACCOdeducts150,000/=
fromhissalaryon amonthlybasis.
Allallowancesarepaidorclaimedonamonthlybasis.
Payrollfortheabovesituationcanbepreparedasshownbelow
PayAsYouEarn(PAYE)Computation
ThefollowingworkingsshowhowPayAsYouEarn(PAYE)iscomputedforpeoplein fourdifferent
incomebracketsasdisplayedbytheformulasbelow.Asampleoffouremployeeshasbeenpickedfrom
theexampleaboveandtheirPAYEamountshavebeencomputedtomatchwhatisshowninthe
example.
144of158

Thestandardtableofformulasused forPAYEinUGANDAisasshownbelow
Incomebracket
Incomebelow130,000/=
Above130,000/=andbelow235,000/=
Above235,000/=andbelow410,000/=
Incomeabove410,000/=
Where
TaxRatecharged
0%
10%X(a 130,000/=)
20%X(b 235,000/=)+10,500/=
30%X(c 410,000/=)+45,500/=
a=anyincomeabove130,000/=butbelow235,000/=
b=anyincomeabove235,000/=butbelow410,000/=
c=anyincomeabove410,000/=
Applyingtheexplanationintheabovetable,thePAYEcomputationscanbemadefortheSecurity
Guard,Officemessenger,CashierandtheSupervisorasshownbelow
o PAYEfortheSecurityGuardwithaGrossPayof100,000/=.Thisincomeisbelow130,000/=.
Theformulaisappliedasbelow
100,000X0%=0
o PAYEfortheOfficeManagerwithaGrossPayof220,000/=.Thisincomeisabove130,000/=
butbelow235,000/=.Theformulaisappliedasbelow
(220,000130,000)X10%=9000
o PAYEfortheCashierwithgrosspayof350,000/=.Thisincomeisabove235,000/=butbelow
410,000/=.Theformulaisappliedasbelow
(350,000 235,000)X20%+10,500=33,500
o PAYEfortheSupervisorwithgrosspayof500,000/=.Thisincomeisabove410,000/=.The
formulaisappliedasbelow
(500,000 410,000)X30%+45,500=72,500
TheabovefoursampledpeoplewhosePAYEcomputationhasbeenillustratedhavealsobeenrecorded
inthePAYROLLcomputationtable.Inthistable,thevaluesofPAYEreportedtallywithwhathasbeen
calculatedintheillustration.
145of158

NSSF computation
Referring to the payroll computation above, a sample of four employees has been taken to
illustrate how the NSSF value is computed.
o NSSF for the Security Guard with a Gross Pay of 100,000/=
(100,000 X 5%) + (100,000 X 10%) = 15,000
o NSSF for the Office Manager with a Gross Pay of 220,000/=
(220,000 X 10%) + (220,000 X 10%) = 33,000
o NSSF for the Cashier with gross pay of 350,000/=
(350,000 X 5%) + (350,000 X 10%) = 52,500
o NSSF for the Supervisor with gross pay of 500,000/=
(500,000 X 5%) + (500,000 X 10%) = 75,000
In the above illustrations, the 10% relates to the SACCO contribution towards the savings of the
staff members and 5% relates to the contribution of the staff towards their own savings in
National Social Security Fund. The above illustration helps to explain why the NSSF value
reported in the Day Sheet is higher than that reported in the Payroll sheet above. The Payroll sheet
includes only 5% of the contribution and the Day Sheet includes both the 5% and 10% making
total contribution equaling to 15%.
146of158

ThedetailedPayroll
Allowances
Employee
Basic
pay
Manager
600,000
Supervisor
Accounts
Official
400,000
Otherdeductions
Housing
Lunch
Transport
allowance Allowance Allowance
PAYE
NSSF
60,000
50,000
810,000 165,500
40,500
50,000
50,000
500,000
72,500
350,000
50,000
50,000
450,000
HeadofCredit
320,000
50,000
50,000
CreditOfficial
305,000
50,000
LoansOfficial
280,000
Cashier
Administrative
Official.
250,000
Office
messenger
Securityguard
TOTALS
100,000
Gross
Pay
Loan
Salary
payment advance
454,000
25,000
100,000
302,500
57,500
22,500
370,000
420,000
48,500
21,000
350,500
50,000
405,000
44,500
20,250
340,250
50,000
50,000
380,000
39,500
19,000
321,500
50,000
50,000
350,000
33,500
17,500
299,000
200,000
50,000
50,000
300,000
23,500
15,000
261,500
120,000
50,000
50,000
220,000
9,000
11,000
200,000
100,000
5,000
95,000
50,000
50,000
2,875,000
100,000
510,000
450,000 3,935,000 494,000 196,750
150,000
NetPay
150,000 100,000 2,994,250
147of158

TheJournalVoucherthatsummarizesthePayrolltransactions
SACCONAMECREDIT&COOPERATIVESOCIETYLTD
Journalvoucher
AccountCode
AccountName
GrossPay*
Allowances(accordingly)**
NSSFContribution(10%)
Statutorydeductions
PAYE
NSSF***
Advances
LoanPayments
EmployeeSavings'A/c:
Manager
Supervisor
AccountsOfficial
HeadofCredit
CreditOfficial
LoansOfficial
Cashier
AdministrativeOfficial.
Dr.
3,935,000
393,500
494,000
590,250
100,000
150,000
454,000
302,500
370,000
350,500
340,250
321,500
299,000
261,500
200,000
95,000
Officemessenger
Securityguard
TOTALS
Cr.
4,328,500
4,328,500
Note:
*TheGrossPaytobereportedhereincludesallfixed/absoluteallowances.Theseallowancesare
obviousinthedaytodayoperationsoftheSACCOs.
**AllowancesentryintheJVabove,willbefilledupwiththeallowancesthataregivenonceina
while.Theallowancesarenotabsolute.
***TheNSSFdeductionreportedhereincludesthe10%thatiscontributedbytheSACCOs.Thatis
whyitismorethanthatreportedinthePayrollscheduleabove.
148of158

2. ExampleonIncomeTaxComputation
TheseTax ComputationsaremerelyillustrativeandhavebeenbasedontheFinancialStatementslaidoutin
Appendix5
i)
Initialallowancecomputation
Details
Note
TotalFixedAssetAdditions
Less:Amountsthatdon'tqualifyforinitialallowance (S.28ITA)
OfficeEquipment (S.28(3) ITA)
Computers&Accessories(S.28(3) ITA)
Furniture&Fittings (S.28(3) ITA)
Totaldeduction
QualifyingExpenditureforinitialallowance(S.28(1) ITA)
134
200
WearandTearComputationforasampleexampleonSACCOswithinlistedareas(S.27 ITA)
Particulars
Wear&TearRates
WrittenDownValue(WDV)b/f
Additions
Disposals
BalancebeforechargingInitialallowance
Initialallowancecharge(50%) (Notei)
QualifyingExpenditureforWear&Tear
Wear&TearChargedat respectiveratesperclass
WDVc/fattheendoftheperiod
iii)
4,695
(4,229)
(199)
(4,428)
267
Initialallowanceonthequalifyingexpenditure
50%forSACCOswithinKampala,Entebbe,Njeru,Namanve (S.28(1)(b) ITA)
75%forSACCOsoutsideKampala,Entebbe,Njeru,Namanve(S.28(1)(a) ITA)
ii)
Amount
Shs'000
ClassI
ClassII
(40%)
(35%)
Shs'000 Shs'000
4,229
4,229
4,229
(1,692)
2,537
ClassIII
(30%)
Shs'000
ClassIV TOTALS
(20%)
Shs'000 Shs'000
466
4,695
466
4,695
(134)
(134)
332
4,561
(66)
(1,758)
266
2,803
WearandtearComputationforasampleexampleonSACCOsoutsidelistedareas
149of158

Particulars
Wear&TearRates
WrittenDownValue(WDV)b/f
Additions
Disposals
BalancebeforechargingInitialallowance
Initialallowancecharge(50%)
QualifyingExpenditureforWear&Tear
Wear&TearChargedat respectiverates
perclass
WDVc/fattheendoftheperiod
iv)
ClassI
ClassII
(40%)
(35%)
Shs'000 Shs'000
4,229
4,229
4,229
ClassIII
(30%)
Shs'000
ClassIV TOTALS
(20%)
Shs'000 Shs'000
466
4,695
466
4,695
(200)
(200)
266
4,495
(1,692)
(53)
(1,745)
2,537
213
2,750
CalculationOfCorporationTaxLiability(forSACCOsoutsidetheListedAreas)
Details
Note
ProfitbeforeTax
AddbackDisallowableexpenses(S.22(2)ITA)
Depreciation
Donations&Gifts(S.22(1)ITA)
TotalDisallowables
Amount
Shs'000
30,390
9
24
12,036
130
12,166
42,556
Less:Allowabledeductions
Initialallowance(S.28(1)ITA)
Wear&Teardeduction(S.27(1)ITA)
(200)
(1,745)
Totalallowabledeductions
(1,945)
Taxableprofits
TaxCharge(30%X41624)
41,624
12,487
150of158

v)
CalculationOfCorporationTaxLiability(forSACCOsWithinTheListedAreas)
Details
Note
ProfitbeforeTax
AddbackDisallowableexpenses(S.22(2)ITA)
Depreciation
Donations&Gifts(S.22(1)ITA)
TotalDisallowables
Amount
Shs'000
30,390
9
24
12,036
130
12,166
42,556
Less:Allowabledeductions
Initialallowance(S.28(1)ITA)
Wear&Teardeduction(S.27(1)ITA)
Totalallowabledeductions
(134)
(1,745)
(1,878)
Taxableprofits
TaxCharge(30%X40,678)
40,678
12,203
151of158

APPENDIX 5
MODEL FINANCIAL STATEMENTS
Introductory Remarks
This set of Management accounts shall be prepared by the Accountant and approved by the Manager on regular basis and shall
be properly filed for future reference.
As a sign of readiness for an external Audit, this set of Accounts shall be presented to the Auditor for him/her to express an
independent opinion thereon.
SACCO Name
Balance Sheet as at Year end Date
Notes Current Year
20XX
Shs000
Prior Year
20XX
Shs000
ASSETS
Cash and bank balances
Loans Outstanding
Employee Advances
Short-term investments
Prepayments
Receivables
Amounts receivable from related party
Property and Equipment
Intangible Assets
Other assets
Total Assets
3
4
5
6
7
8
9
10
11
12
377,176
93,129
7,521
1,130,304
36,323
53,608
12,990
28,188
9,300
1,481
1,750,020
90,847
49,873
3,442
1,076,165
20,398
45,575
20,592
35,528
1,342,420
13
14
15
16
1,575,855
12,543
41,323
48,457
1,678,178
1,193,738
8,409
39,852
50,826
1,292,825
17
18
33,760
8,801
29,281
71,842
29,700
5,807
14,088
49,595
1,750,020
1,342,420
LIABILITIES
Savings and Short-term Time deposits
Interest and Dividends payable
Accounts payable and accruals
Other liabilities
Total Liabilities
EQUITY AND RESERVES
Member shares
Statutory legal reserves
Retained earnings
Total Equity and Reserves
TOTAL RESERVES AND LIABILITIES
_____________________
_____________________
152of158

Manager
Accountant
Notes accompanying these Financial Statements form an integral part of these financial statements
SACCO Name
In
co
om
me
e St
atte
em
me
en
ntt fo
e Pe
od
d En
de
ed
d /
/
/2
20
0X
XX
X
Inc
Sta
forr th
the
Perriio
End
/
Notes
Current Year
20XX
Shs000
Prior Year
20XX
Shs000
19
20
21
22
149,852
47,356
71,691
90,000
358,899
112,550
28,204
63,805
86,500
291,059
23
24
25
26
27
28
78,001
141,691
50,264
56,959
18,642
141
345,698
50,197
145,305
42,304
46,793
11,251
295,850
13,201
17,189
30,390
(12,203)
18,187
(4,791)
8,344
3,553
3,553
INCOME
Loans Income
Savings and Membership-fees Income
Investments Income
Other income
Total income
EXPENDITURE
Interest expense and Other Financial Costs
Direct Loan Costs
Staff Costs
Administration expenses
Governance Expenses
Statutory Expenses
Total Expenditure
Operating Profit/Loss for the period
Grant Income
Net Profit Before Tax
Taxation (See Tax Computation)
Profit After Tax
29
15
SACCO Name
St
atte
em
me
en
ntt of
an
ng
ge
ess in
uiitty
y fo
e Pe
od
d En
de
ed
d /
/
/2
20
0X
XX
X
Sta
of Ch
Cha
in Eq
Equ
forr th
the
Perriio
End
/
Member
Shares
Shs000
As at
Net profit for the period
Additional share capital
29,700
4,060
Reserves
Shs000
5,807
-
Accumulated
Profits
Shs000
14,088
18,187
-
Total
Equity
Shs000
49,595
18,187
4,060
153of158

Statutory Reserves
33,760
2,994
8,801
(2,994)
29,281
71,842
SACCO Name
CashFlowStatementforthePeriodEnded//20XX
Notes
Current Year
20XX
Shs 000
Prior Year
20XX
Shs 000
30,390
3,553
12,036
(17,189)
3,144
28,381
6,165
1,796
(8,344)
2,556
5,726
(50,479)
(15,925)
(8,033)
7,602
382,117
4,134
1,471
2,617
(3,299)
(10,601)
(25,047)
(20,592)
414,976
(1,291)
30,490
(4,083)
Cash generated from operations
323,504
380,553
Net cash outflow from operating activities
351,885
386,279
(54,139)
(4,696)
(10,781)
(543,843)
(22,968)
-
(69,616)
(566,811)
4,060
-
34,464
(15)
4,060
34,449
286,329
(146,083)
Operating Activities
Operating surplus for the period
Adjustments for:
Depreciation
Impairment of stock & other assets
Donor income
Loan loss provisions
Operating surplus before working capital changes
Increase in loans to Members
Increase in prepayments
Increase in other accounts receivable
Increase in accounts receivable from related party
Increase in member savings and other deposits
Decrease in interest payable
Increase in other payables
Increase in other liabilities
26
29
24
4
7
8
9
13
14
15
16
Investing Activities
Increase in Short term investments
Purchase of property and equipment
Purchase of Intangible assets and other assets.
6
10
11
Net cash outflow from investing activities

Financing Activities
Issue of Shares
Share redemption
Net cash inflow from financing activities
Net increase in cash and cash equivalents
17
154of158

Cash and Cash Equivalents at Start of the Period
Cash and Cash Equivalents at End of the Period
3
3
90,847
377,176
236,930
90,847
SACCO Name
NotestotheFinancialStatementsthePeriodEnded//20XX
1.
ga
an
niissa
attiio
on
n an
d Ba
esse
en
ntta
attiio
on
n
1. Or
Org
and
Bassiiss of
of Pr
Pre
The accounting and reporting policies adopted by SACCO NAME SACCO are in accordance with Generally
Accepted Accounting Principles.
a)
kg
grro
ou
un
nd
d
a) Ba
Bacck
b)
urree of
neessss
b) Na
Nattu
of bu
bussiin
c)
nttaattiio
on
n an
d ba
naan
ncciiaall St
meen
nttss
c) Pr
Preesseen
and
bassiiss of
of Fi
Fin
Staatteem
2.
gn
niiffiic
ca
an
ntt Ac
co
ou
un
nttiin
ng
g Po
ciie
ess
2. Si
Sig
Acc
Polliic
The principal accounting policies adopted in the preparation of these Financial Statements are set out below:
a)
nss,, Ba
d an
d Do
ub
bttffu
ull De
bttss
a) Lo
Loaan
Bad
and
Dou
Deb
b)
nu
uee Re
og
gn
niittiio
on
n
b) Re
Revveen
Recco
c)
meen
nttss
c) In
Invveessttm
d)
d Pa
nssaaccttiio
on
nss
d) Re
Rellaatteed
Parrttyy Tr
Traan
e)
op
peerrttyy an
d Eq
uiip
pm
meen
ntt
e) Pr
Pro
and
Equ
The annual depreciation rates in use are:
Accordingly
Accordingly
Asset Class Rate
Depreciation on grant funded assets is charged to the deferred income account.
f)
ng
giib
bllee As
f) In
Inttaan
Assseettss
g)
naattiio
on
nss,, Gr
nttss an
d In
Kiin
nd
d Co
nttrriib
bu
uttiio
on
nss
g) Do
Don
Graan
and
In--K
Con
h)
mp
paarraattiivveess
h) Co
Com
155of158

3.
h an
d Ba
nk
k ba
an
nc
ce
ess
3. Ca
Cassh
and
Ban
balla
Cash at hand
Cash at Bank 1
Cash at Bank 2
Total
Current Year
20XX
Shs000
Prior Year
20XX
Shs000
138,378
213,413
25,385
377,176
86,653
2,992
1,202
90,847
4.
an
nssOutstanding
4. Lo
Loa
a)
an
n De
aiillss
a) Lo
Loa
Detta
Current Year
20XX
Shs000
Prior Year
20XX
Shs000
GrossLoanstoFemales
GrossLoanstoMales
GrossLoanstoGroups
GrossLoanstoInstitutions
GrossLoanstoOthers
39,084
4,047
19,542
35,280
51,060
493
TotalGrossLoans
ProvisionforBadLoans
NetLoans
97,953
(4,824)
51,553
(1,680)
93,129
49,873
b)
co
on
nc
ciilliia
attiio
on
n of
ossss Lo
an
nss Ba
an
nc
ce
ess
b) Re
Rec
of Gr
Gro
Loa
Balla
Balanceb/f
Loansdisbursedout
Recoveriesduringtheperiod
Balance(GrossPortfolio)
Current Year
20XX
53,315
210,000
(165,362)
97,953
Prior Year
20XX
25,300
180,000
(151,985)
53,315
5. Em
pllo
oy
ye
ee
e Ad
va
an
nc
ce
ess
Emp
Adv
Employee1
Employee2
Employee3
Current Year
20XX
Shs000
5,000
2,000
300
Prior Year
20XX
Shs000
156of158

Employee4
Total
221
3,442
7,521
3,442
6.
orrtt--tte
errm
m In
ve
essttm
me
en
nttss
6. Sh
Sho
Inv
ShortTermInvestment1
Total
Current Year
20XX
Shs000
250,200
50,000
350,000
480,104
1,130,304
Prior Year
20XX
Shs000
150,000
70,200
855,965
1,076,165
Current Year
20XX
Shs000
Prior Year
20XX
Shs000
4,983
29,040
2,300
36,323
1,640
16,758
2,000
20,398
7.
ep
pa
ay
ym
me
en
nttss
7. Pr
Pre
PrepaidRent
PrepaidUtilities
OtherPrepayments
TotalPrepayments
8.
ce
eiiv
va
ab
blle
ess
8. Re
Rec
Current Year
20XX
InterestreceivableonLoans
InterestreceivableonFixedDeposits
OverdrawnSavingsAccounts
Total
9.
ou
un
nttss Re
ce
eiiv
va
ab
blle
e fr
om
m Re
atte
ed
d Pa
y
9. Am
Amo
Rec
fro
Rella
Parrtty
AdvancestoBoardMembers
OtherreceivablesfromBoardMembers
TotalAmountsReceivablefromRelatedParties
36,871
13,066
3,671
53,608
Current Year
20XX
Shs000
5,000
7,990
12,990
Prior Year
20XX
75
351
45,149
45,575
Prior Year
20XX
Shs000
4,000
16,592
20,592
157of158

10
op
pe
errtty
y,, Pl
an
ntt an
d Eq
uiip
pm
me
en
ntt
10.. Pr
Pro
Pla
and
Equ
Motor
Cycles&
Vehicle
Eqment
Fture &
Fittings
Shs000
Shs000
Computers
&
Accessories
Shs000
Land &
buildings
TOTAL
Shs000
Shs000
Cost
As at start of Period
Additions
As at End of Period
5,050
139
5,189
2,920
2,920
15,229
199
15,428
16,754
4,229
20,983
8,274
128
8,402
48,227
4,695
52,922
Charge for the year
As at End of Period
1,728
1,728
730
584
1,314
4,873
3,833
8,706
4,311
5,051
9,362
2,784
840
3,624
12,698
12,036
24,734
As at End of Period
5,050
3,461
2,190
1,606
10,357
6,722
12,443
11,621
5,489
4,778
35,528
28,188
11
an
ng
giib
blle
e As
ettss
11.. In
Intta
Assse
Intangible assets represent Shs 9.3 million that relates to purchase of an accounting software-Finance Solution,
expected to be used in SACCO operations. The accounting software is not yet put to use as intended by
SACCO management.
Software
Goodwill
Total
Current Year
20XX
Shs000
Prior Year
20XX
Shs000
7,300
2,000
9,300
* Th
Thee Intangible asset has not been amortized during Current Year because it is not yet put to use
12
ve
en
ntto
orry
y
12.. In
Inv
StockofTShirts
StockofStationery
Totalotherassets
Current Year
20XX
Shs000
Prior Year
20XX
Shs000
391
1,090
1,481
158of158

13
viin
ng
gss an
d Ot
he
err De
po
ossiittss
13.. Sa
Sav
and
Oth
Dep
MembersavingsOrdinary
MembersavingsRestricted
Members'ShorttermFixedDeposits
Current Year
20XX
Shs000
Prior Year
20XX
Shs000
804,815
735,716
35,324
1,575,855
634,172
520,053
39,513
1,193,738
TotalSavingsandTimeDeposits
14
erre
esstt an
d Di
viid
de
en
nd
dss Pa
ya
ab
blle
e
14.. In
Intte
and
Div
Pay
Current Year
20XX
Shs000
Prior Year
20XX
Shs000
InterestpayableonSavingsbyFemales
InterestpayableonSavingsbyMales
DividendspayabletoMembers
10,530
1,013
1,000
8,409
TotalInterest&dividendsPayable
12,543
8,409
15
he
err Ac
co
ou
un
nttss Pa
ya
ab
blle
e an
d Ac
crru
ua
allss
15.. Ot
Oth
Acc
Pay
and
Acc
Current Year
20XX
Shs000
Prior Year
20XX
Shs000
InterestpayableonBorrowedfunds
WithholdingTaxpayable
IncomeTaxLiability
ProfessionalfeesPayable
SuppliersPayable
NSSFpayable
PAYEpayable
AffiliationfeesPayable
Salaries/Wages
13,859
5,818
12,203
1,290
5,932
817
700
664
40
30,307
4,092
1,784
1,973
1,696
Totalotheraccountspayable&accruals
41,323
39,852
159of158

16
he
err Li
ab
biilliittiie
ess
16.. Ot
Oth
Lia
Current Year
20XX
Shs000
Prior Year
20XX
Shs000
Taxation
LoanProtectionFund
UnearnedRevenue
DeferredGrantIncome
AccumulatedDepreciation
12,203
8,524
2,607
24,116
1,007
5,327
3,131
40,485
1,883
Totalotherliabilities
48,457
50,826
Current Year
20XX
Shs000
Prior Year
20XX
Shs000
SharesClass1
SharesClass2
SharesClass3
29,700
2,060
2,000
26,500
1,000
2,200
TotalMembershares
33,760
29,700
Current Year
20XX
Shs000
Prior Year
20XX
Shs000
ReserveFund
ShareTransferFund
6,801
2,000
3,792
2,015
Totalstatutoryreserve
8,801
5,807
Current Year
20XX
Shs000
Prior Year
20XX
Shs000
82,298
87,429
17
mb
be
errss Sh
arre
ess
17.. Me
Mem
Sha
18
attu
utto
orry
y Re
errv
ve
ess
18.. St
Sta
Resse
19
erre
esstt on
an
nss In
co
om
me
e
19.. In
Intte
on Lo
Loa
Inc
InterestincomeonLoanstoFemale
160of158

Commission on loans
PenaltyandSurcharge
OtherLoansIncome
25,343
35,039
7,172
16,389
883
7,849
TotalInterestIncome
149,852
112,550
20
20.. SavingsandMembershipfeesIncome
Current Year
20XX
Shs000
Prior Year
20XX
Shs000
Membershipfees
Entrancefees
Saleofstationery
SavingLedgerfees
Accountclosurefees
27,594
10,910
4,863
2,660
1,329
18,769
3,603
2,896
2,000
936
Total
47,356
28,204
Current Year
20XX
Shs000
36,322
30,022
5,347
Prior Year
20XX
Shs000
63,805
71,691
63,805
Current Year
20XX
Shs000
50,000
5,000
30,000
4,000
1,000
Prior Year
20XX
Shs000
40,000
42,000
4,500
90,000
86,500
21
ve
essttm
me
en
ntt In
co
om
me
e
21.. In
Inv
Inc
InterestonInvestments1
Total
22
he
err In
co
om
me
ess
22.. Ot
Oth
Inc
InterestfromLinkBankA/C
ProfitonSaleofFixedAssets
ForeignExchangegain
Recoveryofloanspreviouslywrittenoff
Miscellaneousincome
Total MiscellaneousIncome
23
na
an
nc
ciia
all Co
23.. Fi
Fin
Cossttss
Current Year
20XX
Shs000
Prior Year
20XX
Shs000
161of158

InterestexpenseonMembers'Savings
InterestexpenseonBorrowedFunds
OtherFinancingCosts
59,206
14,638
4,157
38,275
9,366
2,556
Total In
erre
esstt Ex
pe
en
nsse
e
Intte
Exp
78,001
50,197
24
ec
ctt Lo
an
n Co
24.. Di
Dirre
Loa
Cossttss
BaddebtsExpense
Loanappraisalcosts
Loanmonitoringandrecoverycosts
LegalFeesonLoans
OtherDirectLoanCosts
TotalDirectLoanCosts
Current Year
20XX
3,144
31,549
60,000
32,000
14,998
Prior Year
20XX
2,556
45,000
60,000
25,000
12,749
141,691
145,305
25
affff Co
25.. St
Sta
Cossttss
Current Year
20XX
Shs000
Prior Year
20XX
Shs000
Grosssalaries
Staffwelfareandincentives
NSSF 10%
Gratuity
Stafftrainings,workshopsandcapacitybuilding
OtherPersonnelExpenses
30,965
5,884
3,092
2,000
8,216
107
26,425
6,727
2,613
6,184
355
TotalStaffCosts
50,264
42,304
26
miin
niissttrra
attiio
on
n Ex
pe
en
nsse
ess
26.. Ad
Adm
Exp
Stationeryexpenses
Rentofofficepremises
Officeexpenses
Telephone
Internetandemail
Professionalfees
Transportandtravels
Advertisement,announcementsandpublicity
Power/fuelcosts
Accommodationallowances
Current Year
20XX
Shs000
Prior Year
20XX
Shs000
8,481
3,000
3,568
3,339
1,235
2,350
7,378
935
205
2,038
5,564
2,850
1,956
2,559
6,141
3,294
106
162of158

Dutyallowances
Communitymobilization
Auditcosts&legalfees
Depreciation
LossonSaleofFixedAssets
26
26..
4,212
101
1,220
12,036
3,790
2,996
6,165
5,212
Ad
miin
niissttrra
attiio
on
n Ex
pe
en
nsse
ess (Co
nttiin
nu
ueed
d))
Adm
Exp
Con
EquipmentRepairs&Replacement
Securityexpenses
Computerexpenses
Donationsandgifts
Bankcharges
Affiliationfeesexpense
Miscellaneousadministrativeexpenses
TotalAdministrationCosts
1,543
3,353
130
1,498
225
112
1,018
1,252
1,540
1,700
125
525
56,959
46,793
27
ve
errn
na
an
nc
ce
e ex
pe
en
nsse
ess
27.. Go
Gov
exp
Current Year
20XX
Shs000
Prior Year
20XX
Shs000
Generalmeetingexpenses
Registrationfees
B.O.Dandcommitteeexpenses
OtherGovernanceexpenses
1,658
1,007
270
15,707
1,600
860
8,791
TotalGovernanceExpenses
18,642
11,251
Current Year
20XX
Shs000
Prior Year
20XX
Shs000
20
15
13
93
141
28
attu
utto
orry
y Ex
pe
en
nsse
ess
28.. St
Sta
Exp
CooperativedevelopmentfundContribution
Memberstraining
RemittancestoSecondarySocietyEducationfund
OtherstatutoryExpenses
TotalStatutoryExpenses
163of158

29
an
ntt In
co
om
me
e
29.. Gr
Gra
Inc
GrantIncomeforLoanCapital
GrantIncomeforOperations
TotalGrantincome
Current Year
20XX
Shs000
Prior Year
20XX
Shs000
14,298
2,891
8,344
17,189
8,344
oooOOOOooo
164of158

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MODEL ACCOUNTING

Model Financial and Accounting Policies and Procedures

This manual was read and approved at the Committee

Meeting held on the.Day of .2007

Model Financial and Accounting Policies and Procedures

Policy statements on Books of Account

Model Financial and Accounting Policies and Procedures

Model Financial and Accounting Policies and Procedures

Model Financial and Accounting Policies and Procedures

Committees Statement of Responsibility

Model Financial and Accounting Policies and Procedures

Model Financial and Accounting Policies and Procedures

The Consultative Group to Assist the Poor

Model Financial and Accounting Policies and Procedures

CHAPTER ONE: INTRODUCTION

OBJECTIVES OF THE ACCOUNTING MANUAL

Model Financial and Accounting Policies and Procedures

To ensure quality and consistency of accounting records

ORGANISATION STRUCTURE OF A MODEL FINANCE DEPARTMENT

Model Financial and Accounting Policies and Procedures

b) The Finance Hierarchy

SUMMARY OF POLICY STATEMENTS

Policy Statement on Compliance

Policy statement on Books of Account

Policy statement on Financial Reporting

Policy statement on Budgets

Other Accounting, Operational and Administrative Policies and Procedures

Model Financial and Accounting Policies and Procedures

DUTIES OF THE ACCOUNTING AND FINANCE DEPARTMENT

Duties of the Audit and Supervision Committee

Duties of the Finance Committee

Limits on loan to deposit ratio

General Duties of the Manager

Model Financial and Accounting Policies and Procedures

a) General supervision of the Accountant

Duties of the Accountant (some may be delegated to the Accounts Assistant)

Model Financial and Accounting Policies and Procedures

Duties of the Cashier (Teller)

Model Financial and Accounting Policies and Procedures

POLICY STATEMENTS ON BOOKS OF ACCOUNT

SACCO books of Account shall be kept for a minimum of 10 years

THE CHART OF ACCOUNTS

Model Financial and Accounting Policies and Procedures

Basis of Formulation of the Chart of Accounts

Specific A/C No.

All Account numbers shall comprise of a seven-digit number separated by dashes as

Loans & Savings Ledgers

Model Financial and Accounting Policies and Procedures

The General Ledger (GL)

The GL shall have five major categorizations as follows.

The Savings Ledger (SL)

All SL accounts shall comprise of a seven digit number separated by dashes as

Model Financial and Accounting Policies and Procedures

Structure of Savings Account numbers according to the nature of the

The Loans Ledger (LL)

The Account-number structure, sub-ledgers and Control-accounts for the Loan

PROPER BOOKS OF ACCOUNT

Model Financial and Accounting Policies and Procedures

Loan Registers per ledger

Basis of Preparation of Books of Account

Model Financial and Accounting Policies and Procedures

Updating Savings and Loan Ledgers (Posting the transactions)

Model Financial and Accounting Policies and Procedures

Ledger cards that are Updated

DFID Accounting Policies & Procedures Manual EDITED Fair Dra

DFID Accounting Policies & Procedures Manual EDITED Fair Dra