Budget and Finance

(see Checklist section on Finance, Equipment & Supplies).

Authority to Incur Expenditure

37 Currently UNHCR classifies expenditure into two types:

i. Project expenditure;

ii. Administrative support expenditure.

This classification of expenditure may change in the future.

38. Authority to enter into obligations for project expenditure is given by a letter of instruction (LOI). Further details can be found in chapter 8 on implementing arrangements.

39. Authority to enter into obligations for administrative support expenditure is given by an Administrative Budget and Obligation Document (ABOD). This is issued by Headquarters and is addressed to Heads of Offices. It covers all non-staff costs including temporary assistance and overtime.

40. Authority for additional administrative support expenditure in an emergency is given to an existing Field Office by amending the existing ABOD. When an emergency occurs in a country where UNHCR is not already represented, an initial ABOD will be issued immediately. This can then be amended when more details of administrative requirements are known. Control of expenditure against funds allocated is by an Administrative Budget Control Sheet (ABCS) generated from the computerized accounting system.

Transfer of Funds

41. It is essential to have funds immediately available. Funds will normally be made available by bank transfer. However, such transfers, especially to out-posted Field Office bank accounts, sometimes suffer undue delays because of complicated banking channels. It is very important to select a local bank with a direct international correspondent relationship, if possible with Citibank N.A. New York or the UBS Bank in Switzerland. Further information can be provided by the Treasury Section at Headquarters.

42. At the start of an emergency it may be possible to hand carry a banker's cheque from Geneva to be credited directly to the Field Office bank account. If this is done, proper precautions must of course be taken to ensure the security of the cheque.

43. In very extreme cases, when no banking services are available, cash may be acquired locally (e.g. through local companies and traders) upon specific authorization from Treasury. Funds would be transferred to an account indicated by the trader after receipt of the cash by UNHCR. Cash may also be provided to Field Offices through professional courier services. Information about cash transfers, past, present and future, must be treated with absolute discretion.

44. Subsequently funds will be transferred by Treasury upon cash replenishment requests in the standard format shown in the box below. Care should be exercised that funds are called forward as close as possible to the date of their utilization to avoid unnecessary high bank balances over prolonged periods.

To: UNHCR Treasury (HQTY00) From: Requesting Officer/Field Office Location Subject: Cash Replenishment Request Please effect an immediate transfer of funds based on the following information: Balances on hand (all bank accounts and petty cash) at (dd/mm/yy): (provide details of amounts and currencies) Total disbursement needs for the next × (maximum 4) weeks: (provide details of administrative and programme needs, amounts and currencies) Replenishment amount requested: (Indicate amount and currency) Complete bank name and address, including UNHCR bank account number, and the Field Office's accounting system receiving bank code.

45. Disbursements for both administrative and project expenses are made in the Field either from a local UNHCR bank account or, pending the opening of such an account, through UNDP. In the latter case, UNHCR Headquarters will arrange with UNDP Headquarters for the local UNDP office to receive the necessary authority to incur expenditure on behalf of UNHCR. Settlement with UNDP will normally take place through the common Inter-Office Voucher (IOV) system for amounts of less than US$10,000 or through a special transfer of funds to UNDP New York for larger sums. As a rule, disbursements exceeding the equivalent of US$100 should be made by cheque; whenever local circumstances require regular cash payments in excess of this limit, Headquarters' approval must be obtained.

Bank Accounts

46. All local UNHCR bank accounts are opened by Treasury upon recommendation from the Field Office. The choice of a bank will be determined by its reputation, ease of access, services offered and charges. Other UN agencies, diplomatic missions and NGOs should be consulted. The following information is required:

i. Full name of the bank;

ii. Address, phone, telex and fax numbers;

iii. Type and currency of account;

iv. Bank's correspondent bank in New York or Switzerland;

v. Maximum amount of any one cheque;

vi. Suggested panel of bank signatories

vii. Amount of initial transfer.

47. Treasury will designate the authorized bank signatories. Two joint signatories are normally required to operate UNHCR bank accounts. In exceptional circumstances, signature by one Officer may be authorized.

Particular care must be taken to ensure cheque book security.

Cheques must bear UNHCR in words, be consecutively numbered, verified on receipt, and kept in a safe by a staff member designated by the Head of Office. Cheques should always bear the name of the payee and should be crossed unless there is an overriding reason why this is not practicable. Under no circumstances should a bank signatory pre-sign either a blank cheque or one which is only partially completed.

48. Field Offices will normally maintain one non-resident local currency bank account; circumstances may however also require the opening of a non-resident US dollar account and perhaps even a resident local currency account. Where problems of exchange control regulations are encountered, the Treasury at Headquarters should be informed immediately. Field Offices should ensure that the most favourable conditions are obtained for the transfer and conversion of UNHCR funds.

Exchange Rates

49. If there is a significant discrepancy, i.e. more than 3%, between the actual market rate and the prevailing UN rate of exchange, a request for a revision of the latter should be made. This request should be coordinated with UNDP and other UN organizations locally and addressed to UNDP New York. The communication should contain a summary of the fluctuations over the previous 60 days. If necessary, UNHCR Headquarters should be requested to intervene with UNDP New York.

Accounting Procedures

50. UNHCR accounting procedures may change. However, currently, whenever a Field Office operates its own bank account(s), it must report to Headquarters monthly on all transactions for each account. The procedure is the same for both administrative and project expenditure. Most importantly, a properly supported payment voucher must be completed and immediately entered into the electronic accounting system. Where this system has not yet been installed, a manual payment voucher (F.10) should be completed and immediately entered on a bank journal (HCR/ADM/800). It is essential that the voucher quotes the authority for payment (LOI, ABOD, PT8 (travel authorization). A "Mini Payment Voucher" book (F.11), designed especially for emergencies, may be used by out-posted Field Officers. An official UNHCR receipt voucher should be issued and entered on the bank journal for any receipts other than replenishments from Headquarters. Similarly, payments from petty cash have to be accounted for in the petty cash journal (HCR/ADM/800). It is imperative that all vouchers and journal entries list the correct account code, as indicated in the UNHCR account codes listing and on the PT8, or the project symbol marked on the LOI against which the transaction is to be debited/credited.

51.

Whatever the pressures of the emergency, accounts must be kept up-to-date and the monthly closure done Oft time.

Experience has shown that failure to do so will not only delay the replenishment of the bank account but will also result in far more work than would originally have been required.