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1
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Step
PPR – selection of invoices for payments:
Set criteria by selecting date range, currency, payment method and bank account
– Pay Group
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Responsible Party
Finance staff
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Template/Guideline
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Explanatory Notes
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2
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Step
Review invoices selected by PPR prior to disbursement: Check all details of supporting documents of approved AP invoices; Where this is not practical due to large volumes, the batch should be reviewed for reasonableness; Check unusual AP invoices, such as those with large amounts, unfamiliar Supplier names, unfamiliar/unusual disbursement to staff, etc. Print the list of invoices selected (known as the Pay List) and use to control issuance of cheques in those cases where cheques are collected from the office (see below); Mark rejected payments on the pay list; Sign, date and file a copy of the Pay List to evidence internal control review of cheques; Instruct finance staff to void or cancel rejected payments as appropriate. Senior Finance Officer Key internal control – the 3rd and final approval on expenses
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Responsible Party
Senior Finance Officer
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Template/Guideline
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Explanatory Notes
Key internal control – the 3rd and final approval on expenses
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3
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Step
Void or cancel payments as instructed by Senior Finance Officer in cases where invoices are not approved
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Responsible Party
Finance staff
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Template/Guideline
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Explanatory Notes
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4
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Step
Present cheques for signature together with supporting documentation:
Agreed amounts and payee to approved AP invoices
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Responsible Party
Cheque Signatories(Dual signatories )
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Template/Guideline
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Explanatory Notes
Cheques must be signed by
at least two signatories
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5
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Step
Manual Payments
Select "record" option on the payment tab of a given AP invoice to
effect payment;
Add cheque number or payment reference, as appropriate;
Manually raise a cheque, where appropriate, taking care that the amount, date,
payee and cheque number match the Quantum entry.
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Responsible Party
Finance staff
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Template/Guideline
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Explanatory Notes
Manual Payment is best used to record those items that are on bank statements but not in the cash book, such as interest and bank charges, where an entry to the cash book is required but issuing a cheque is not
QUANTUM queries and reports can be used to monitor the payment
exceptions
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6
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Step
Review of Manual Payments – review the following prior to signature and
dispatch:
Agree all amounts, currencies, payees and dates to approved AP invoices;
Repeat step 3 above for signature of Manual Payment
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Responsible Party
Senior Finance Officer
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Template/Guideline
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Explanatory Notes
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7
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Step
Timeliness of recording entries in Quantum
Ensure that an entry is made in Quantum before issuance of a cheque to a Supplier.
In emergency situations only, record manual payment in Quantum after issuance
of the cheque. Even then, every effort must be made to complete the Quantum
record within 48 hours of issuance of the cheque.
Communicate, in writing to the Treasurer, any instance where payment cannot be
recorded in Quantum within 48 hours after issuance of a cheque to a Supplier
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Responsible Party
Senior Finance Officer
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Template/Guideline
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Explanatory Notes
As the recording in Quantum and the manual raising of a cheque are two separate tasks, careful attention is required to ensure that an entry is made in Quantum before issuance of a cheque to a Supplier
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8
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Step
Issuance, signature and safeguarding of checks:
Keep cheques that are not immediately mailed or delivered to payees in a secure
location within the Finance Unit, and placed in the safe during non-working
hours Following issuance and signing. During working hours, the cheques
must also be kept in a secure manner in the custody of the responsible officer;
Compare cheques with the Pay List before releasing them to payees when held for
pick up;
Maintain a register for issuing cheques. The proof of identity of the
payee must be provided and recorded on the cheque register along with
the signature of the recipient;
In the event that a cheque is not collected within 5 days of issuance, it must
be cancelled and reissued when required.
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Responsible Party
Senior Finance Officer
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Template/Guideline
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Explanatory Notes
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9
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Step
Management of cheques:
Request the bank to provide serially numbered cheques. If no such serial
numbering system exists, the field office must number the cheques serially, in
ink, starting with No. 1, upon receipt of the cheques. The numbering sequence
must be continued without interruption for cheque books received subsequently.
Advise the Treasurer if, for any reason, the local bank is unable to provide
cheques bearing the official name of the account.
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Responsible Party
Senior Finance Officer
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Template/Guideline
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Explanatory Notes
The stock of cheque books must be controlled by a register. All cheques must be accounted for. Only one cheque book must be used at any one time for each bank account; spare cheque books must be kept in the custody of the Representative or his/her delegate. Cheques should not have erasures or corrections. If a mistake is made in any field on a cheque, it should be voided and a new cheque prepared. Cheques must be made out to a payee who is the provider of goods and/or services as evidenced by supporting documentation and should be the same as the Supplier record in Quantum. Cheques should never be made out to third parties or to non-defined payees (e.g., bearer, cash). Country offices are required to send cheques together with the deposit slip to the Treasurer for deposit to the ZBA account if the cheque is greater than USD 50,000 in value and is not drawn on a local bank. The cheque items should be listed in the summary of enclosures accompanying the pouch. The deposit slip must indicate the Quantum chart of account to credit and the purpose of the dollar payment (e.g., refund of unused airline tickets). Each country office must have a secured safe where unused cheque books and, if necessary, official monies can be stored. Under no circumstances should personal property or monies be held with UNDP monies in the UNDP safe. Country offices which are authorized to operate cash accounts in the office should prepare a certified daily count of monies on hand
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10
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Step
Management of lost or damaged cheques
If a cheque is lost or damaged, a letter to the bank should be prepared to stop
payment. The letter should contain the following information: date
the cheque was issued; payee; and amount.
Send requests for stop payments on zero-balance accounts to the bank with a
copy to the Treasurer.
Send a letter of indemnity (Form F.18) to the payee of the lost cheque.
Return the signed original to the country office.
Cancel the invoice against which the lost cheque was originally issued will be
cancelled upon receipt of the bank's confirmation that they have stopped
payment on the cheque and received the signed letter of indemnity from the
payee.
Void the payment invoice in Quantum to reverse the payment entry.
Include the invoice in the next PPR or use manual payment to create a
replacement cheque / EFT
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Responsible Party
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Template/Guideline
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Explanatory Notes
In the event that a damaged cheque is returned, the same procedures for
a lost cheque as described above shall be used; however, no stop payment order
or a letter of indemnity is to be issued. The damaged cheque must be retained
for account reconciliation
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11
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Step
Management of voided checks and checks returned without encashment
If a cheque is returned un-cashed by the payee, or needs to be voided due to
error in preparation, it should be voided and the payment placed on hold with
reissue. A new cheque can then be issued. The voided cheques must be
retained.
Any cheques outstanding for clearance for 2 months or more must be followed up
with the payee. If, upon investigation, it transpires that the cheque has been
lost, the procedure outlined above for lost cheques must be followed. If the
cheque is located, but cannot be honored by the bank because of the old date or
some other imperfection, it must be returned by the payee, voided and replaced
with a new cheque. The voided cheque must be retained.
If there are any cheques outstanding for 6 months or so in spite of all steps
taken to follow up of outstanding cheques, payment for such cheques must be
voided and the procedure outlined above followed.
In line with the above, all cheques on UNDP bank accounts must indicate
"Not valid after X days", where X equals the local period of
validity
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Responsible Party
Finance staff
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Template/Guideline
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Explanatory Notes
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12
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Step
Review exception reports listed on the Finance Dashboard relating to AP
and PO invoices: Take action to ensure exceptions cleared on a timely basis
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Responsible Party
Senior Finance Officer
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Template/Guideline
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Explanatory Notes
Key internal control
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English
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