Professional Documents
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AccProced Manual 30.09.04
AccProced Manual 30.09.04
MEI
Ministry of European Integration
SECTION IV
ACCOUNTING
PROCEDURES
FUNCTIONS & PROCEDURES for the
Management of the Community assistance
under EDIS (PHARE)
Contents
MEI
ACCOUNTING PROCEDURES
FUNCTIONS & PROCEDURES
for the Management of the Community assistance under EDIS (PHARE)
Contents
1. INTRODUCTION
2. ACCOUNTING REQUIREMENTS
3. PRINCIPLES OF ACCOUNTING
4.2.2. Applicability
12
13
6. ACCOUNTING ENTRIES
14
20
20
8. RECONCILIATION OF ACCOUNTS
21
21
22
23
9. DEBTORS LEDGER
24
10. REPORTS
25
26
11.1. Archiving
26
26
27
MEI
ACCOUNTING PROCEDURES
Contents
12. ANNEXES
28
MEI
ACCOUNTING PROCEDURES
FUNCTIONS & PROCEDURES
for the Management of the Community assistance under EDIS (PHARE)
INTRODUCTION
CHAPTER 1
Page : 1
1. Introduction
This Manual Section sets out the specific accounting procedures and entries to be used by the
Programme Payments Directorate of the MEI for accounting for PHARE projects.
The Programme Payments Directorate, on behalf of the Ministry of European Integration, will
prepare and send a Request for Funds to the National Fund. This Request will cover project
advance payments, interim payments and final payments. The process of preparing and submitting
the Request for Funds is covered in Section III (Financial Management Procedures) of this Manual.
MEI
ACCOUNTING PROCEDURES
ACCOUNTING REQUIREMENTS
CHAPTER 2
Page : 2
2. Accounting Requirements
The basic accounting requirements are:
Accounting for Phare programs must be separate from other accounting processes
Accounting must provide the level of control specified by the European Commission and
Romanian legislation
Accounting operations must provide full transparency with regard to all accounting
transactions
MEI
ACCOUNTING PROCEDURES
PRINCIPLES OF ACCOUNTING
CHAPTER 3
Page : 3
3. Principles of Accounting
The principles and procedures with regard to accounting will be regulated by the current
agreements with the NF, relevant EC regulations and will be in accordance with:
Order no.875 (as modified by the Order no.2332/2001) of the Ministry of Finance approving
rules for registration in the accounting records of the receipt and use of the funds from the
European Union and the national co financing funds
The Accounting Plan for public institutions approved by Order of the Ministry of Finance
no.324/1984 together with further modifications and completions
Law no.500 /2002 regarding public finances as modified by the Law 314/2003
Accounting will be conducted with full double-entry bookkeeping and will provide the following:
A true and fair view of the financial operations regarding the receipt and the use of funds
received from the financial contributions of the European Union
Maintain accounting in ROL and/or EUR as required. The exchange rate to be used for
conversion will be the Info-Euro rate of exchange valid during the month in which the
transaction occurs. The Info-Euro rate of exchange is in accordance with Art.91 of the
European Commission Settlement no.610/1986 which establishes the application of the
requirements of Financial Regulation of December 22, 1977. This rate is published every
month, after the 10th of the month, in the supplement of the Official Gazette of the European
Community.
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ACCOUNTING PROCEDURES
PRINCIPLES OF ACCOUNTING
CHAPTER 3
Page : 4
Be dated
Be originals
All documents that support the accounting transaction will form an integral part of the accounting
documentation. These documents will be registered, filed and maintained in a manner that
maintains the connection between the particular documents.
MEI
ACCOUNTING PROCEDURES
FUNCTIONS & PROCEDURES
for the Management of the Community assistance under EDIS (PHARE)
MANAGEMENT OF THE
ACCOUNTING PROCESS
CHAPTER 4
Page : 5
A module for processing of conversion from EURO to Romanian ROL and from Romanian
ROL to EURO
Accounting transactions will be entered in one computer. The Accounting Supervisor and one
Accounting Officer will have access to this computer. Protection of this computer against
unauthorised entry will be via passwords as follows:
Password for the Accounting Supervisor giving access to all levels of the accounting
system
Password for the Accounting Officer giving access to data inputs and reporting functions
Five other computers will be networked to this computer via the local network. It will be possible to
access data (but not input or change data) via these computers. These computers will be for the
use of:
The Preventive Financial Controller (in the Preventative Internal Control Department)
MEI
ACCOUNTING PROCEDURES
FUNCTIONS & PROCEDURES
for the Management of the Community assistance under EDIS (PHARE)
MANAGEMENT OF THE
ACCOUNTING PROCESS
CHAPTER 4
Monthly on the compact disc (kept in a suitable safe within the IT Dept of the MEI)
Annually the entire accounting will be backed up by the IT Dept of the MEI
Page : 6
Ensuring that registration, processing and storage of all accounting information is correct
and complete
Ensure the accuracy of accounting data and to decrease the risk of errors
To comply with the principles set out in Accounting Law no.82/1991, as modified and
completed by the Government Ordinance no.61/2001
4.2.2. Applicability
The procedures apply for entire period during which PHARE programmes will be running and are
in accordance with the internal organization of MEI, as an Implementing Agency for Regional
Development.
4.2.3. Responsibility
The Accounting Supervisor is the person assigned to supervise all accounting transactions related
to PHARE programmes and the related national co funding.
The Accounting Supervisor (AS) controls the activity of, and the documents prepared by the
Accounting Officer (AO).
MEI
ACCOUNTING PROCEDURES
FUNCTIONS & PROCEDURES
for the Management of the Community assistance under EDIS (PHARE)
MANAGEMENT OF THE
ACCOUNTING PROCESS
CHAPTER 4
Page : 7
The Accounting Supervisor will review and sign the documents on a daily, monthly, quarterly and
annually basis issued by the Accounting Officer.
These documents will be:
Accounting notes (to verify the accuracy of the daily accounting records to be
posted)
Journal Register
3. Semi-annually
MEI
ACCOUNTING PROCEDURES
FUNCTIONS & PROCEDURES
for the Management of the Community assistance under EDIS (PHARE)
MANAGEMENT OF THE
ACCOUNTING PROCESS
CHAPTER 4
Page : 8
Details of parties involved (beneficiaries, state budget, National Pre Accession Fund)
Reconcile data in the Perseus system with the information registered in the accounting
system, the bank statements with the bank account balances shown in the accounting
system, the NF General Ledger with General Ledger of the PPD
MEI
ACCOUNTING PROCEDURES
FUNCTIONS & PROCEDURES
for the Management of the Community assistance under EDIS (PHARE)
MANAGEMENT OF THE
ACCOUNTING PROCESS
CHAPTER 4
Page : 9
Reconcile the bank account statements for each PHARE programme with the bank
account balances
The procedures for the reconciliations are described in the chapter no.8 of this manual.
For the closure of the month, the Accounting Supervisor will authorise the posting of the
transaction in the accounting software.
At the beginning of every month, the Accounting Supervisor will change the password for access to
the accounting system.
The Accounting Supervisor will have the responsibility for the organisation, supervision and control
of the Debtors Ledger.
The Accounting Supervisor will submit all relevant documents to the Director, who will approve and
sign.
The Director reviews the documents and signs the Accounting Supervisors Checklist.
SAO approves the report and signs the reconciliation forms prepared by the Accounting
Supervisor.
Then the dossiers will be archived on paper and on magnetic recording medium.
MEI
ACCOUNTING PROCEDURES
FUNCTIONS & PROCEDURES
for the Management of the Community assistance under EDIS (PHARE)
MANAGEMENT OF THE
ACCOUNTING PROCESS
CHAPTER 4
Page : 10
Ensure that all transactions relating to the receipt and disbursement of funds under the
PHARE programmes and national co-financing are properly entered in the accounting
software
To comply with the principles set out in Accounting Law no.82/1991, as modified and
completed by the Government Ordinance no.61/2001 and other legislation in force
To prepare financial reports of the actual commitments and disbursements made to each
PHARE programme
Ensure that all transactions are properly entered in the accounting software and that the
system is kept up to date on a daily basis
Compile financial statements and reports and ensure that they are complete, accurate and
are supported by the accounting records
Verify that disbursements made to beneficiaries are allocated to the appropriate budget
headings and compare expenditure against the budget headings, investigate and resolve
all discrepancies
Provide the Accounting Supervisor the documents needed to be used for drawing up the
reconciliation forms
Backup the accounting system at the end of each working day and ensure that there is a
strict security system in operation
accounting notes (to verify the accuracy of the daily accounting records to be
posted)
MEI
ACCOUNTING PROCEDURES
FUNCTIONS & PROCEDURES
for the Management of the Community assistance under EDIS (PHARE)
current accounts
debtors accounts
expenditure accounts
interest accounts
Journal Register
CHAPTER 4
Page : 11
Quarterly:
MANAGEMENT OF THE
ACCOUNTING PROCESS
Annually:
The Accounting Officer will submit the documents on a daily, monthly, quarterly and annually
basis to the Accounting Supervisor for review and signature.
MEI
ACCOUNTING PROCEDURES
FUNCTIONS & PROCEDURES
for the Management of the Community assistance under EDIS (PHARE)
MANAGEMENT OF THE
ACCOUNTING PROCESS
CHAPTER 4
Page : 12
MEI
ACCOUNTING PROCEDURES
CHAPTER 5
Page : 13
To control funds to be used the General Ledger will include synthetic accounts with
analytical sub-accounts and will show:
The actual balance of payables and settlement of payments
The remaining payables and receivables
Ineligible payments made
Accounting will be for each programme down to contract level. Analytical needs are met through
the use of additional numbers after the account number. This will enable the system to keep track
of:
Programmes
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ACCOUNTING PROCEDURES
CHAPTER 5
Page : 14
Sign and date the correction form confirming the correction has been made (see Annex 3)
Where the error has resulted in an incorrect report being issued, correct the report and
pass the corrected report to the Accounting Supervisor
Check to ensure the error has been corrected and the correction form completed
ACCOUNTING ENTRIES
MEI
ACCOUNTING PROCEDURES
FUNCTIONS & PROCEDURES
for the Management of the Community assistance under EDIS (PHARE)
CHAPTER 6
Page : 15
6. Accounting Entries
The following table sets out the accounting entries applicable to Phare funds.
Transaction
description
1.Signing of
procurement
contract
recording
Potential
Liability
Transaction
date
Date of
signing of the
Contract
Base
document
Contract
MEI
Debit
account
950
Outside main
accounting
Commitments
MEI
Credit
account
Contract
amount to be
financed by
Phare and cofinancing
funds
950
Outside main
accounting
Payments
2.Funds from
NF received
Date of funds
received
Bank
statement
%
118xxxx
EUR in bank
account
Amount
Amount paid
from Phare
and cofinancing
funds
337xxxx
Special
destination
funds
The total
amounts
received
Amounts in
EUR
119xxxx
ROL in bank
account
Amounts in
ROL
and in the
same time
410
Institutions
costs
financed by
the budget
3.Request for
payment an
advance
Date of bank
transfer
Payment
order
220xxxx
Debtors
700
Financing by
the budget for
current year
Amounts
received from
co-financing
funds (ROL)
Total amount
paid
118xxxx
EUR in bank
account
Amount
financed by
Phare funds
Or/and
119xxxx
ROL in bank
account
Amount
financed by
state budget
(co-financing)
ACCOUNTING ENTRIES
MEI
ACCOUNTING PROCEDURES
CHAPTER 6
Page : 16
Transaction
description
4.A.Payment
of an invoice
Transaction
date
Date of bank
transfer
Base
document
Payment
order
MEI
Debit
account
220xxxx
Debtors
MEI
Credit
account
%
118xxxx
EUR in bank
account
Amount
Total amount
transferred
Amount
transferred in
EUR
Or/and
4.B.After
receiving the
final invoice,
covering the
advance but
decrease of
total amount
payable
Invoice
approved for
payment
Invoice
421xxxx
Costs
covered by
the special
destination
fund
5.Irregularities
receivable
from
contractor.
( Total amount
paid minus
total eligible
expenditure)
Date of letter,
fax, final
statement
Letter, fax,
final
statement
Shown by
debtors
balance of
the
acc.220xxx
6.Irregularities
received
from contractor
Date of
money
income
Bank
statement
%
118xxxx
EUR in bank
account
119xxxx
ROL in bank
account
Amount
transferred in
ROL
220xxxx
Debtors
Total eligible
expenditure
Amount of
irregularity
220xxxx
Debtors
Amount of
irregularity
Amount
received in
EUR
Or/and
119xxxx
ROL in bank
account
Amount
received in
ROL
ACCOUNTING ENTRIES
MEI
ACCOUNTING PROCEDURES
CHAPTER 6
Page : 17
Transaction
description
Transaction
date
7.Transferring
amounts from
the current
bank account
to the deposit
bank account
Date of
transferring
8.Transferring
amounts from
a current bank
account to
another current
bank account
Date of
transferring
Base
document
Bank
statement
Bank
statement
MEI
Debit
account
195
Internal
transferees
MEI
Credit
account
118xxxx
EUR in bank
account
118xxxx
EUR in bank
account
195
Internal
transferees
195
Internal
transferees
%
118xxxx
EUR in bank
account
Amount
Outgoing
amounts from
the current
account
Incoming
amounts in
the
deposit
account
Outgoing
amounts from
the current
account
119xxxx
ROL in bank
account
%
118xxxx
EUR in bank
account
195
Internal
transferees
Ingoing
amounts in
the current
account
119xxxx
ROL in bank
account
9. Bank
charges
Date of bank
charges paid
Bank
statement
423xxxx
Bank charges
Total amount
paid
118xxxx
EUR in bank
account
Amount paid
in EUR
119xxxx
ROL in bank
account
Amount paid
in ROL
ACCOUNTING ENTRIES
MEI
ACCOUNTING PROCEDURES
CHAPTER 6
Page : 18
Transaction
description
10.Bank
interest
accrued
Transaction
date
Date of bank
statement
Base
document
Bank
statement
11.Closure of
contract
decreasing the
contract total
amount
Final report /
Final invoice
Final report /
Final invoice
12. Closure
monthre-evaluate the
balance of
EUR account
in bank
Closure
month
Bank
statement and
INFO-EURO
exchange rate
13.Closure of
programmebank charges
paid
MEI
Debit
account
%
MEI
Credit
account
522xxxx
Interest
income
Amount
Total amount
received
118xxxx
EUR in bank
account
Amount
received in
EUR
119xxxx
ROL in bank
account
Amount
received in
ROL
Amount of
used Phare
funds and
used cofinancing
funds
Look at 4.B
Recorded in
Perseus, too
Look at 4.B
Recorded in
Perseus, too
118xxxx
EUR in bank
account
412xxxx
Ex-rate
difference
Favourable
amount
412xxxx
Ex-rate
difference
118xxxx
EUR in bank
account
Unfavourable
amount
522xxxx
Interest
income
423xxxx
Bank charges
The total
amount of
bank charges
paid
Or
Date of
repayment of
unused funds
and bank
interest to NF
Trial Balance
ACCOUNTING ENTRIES
MEI
ACCOUNTING PROCEDURES
CHAPTER 6
Page : 19
Transaction
description
Transaction
date
Base
document
14.Closure of
programmebank interests
unused (The
total amount of
interest
accrued minus
the total
amount of
bank charges
paid)
Date of
transferring
accrued bank
interests to
NF
Trial Balance
15.Refunding
funds to
National Fund
Date of bank
transfer
Payment
order
MEI
Debit
account
522xxxx
Interest
income
MEI
Credit
account
%
Amount
Total unused
bank interest
amount
118xxxx
EUR in bank
account
Amount
refundable to
EC
119xxxx
ROL in bank
account
Amount
refundable to
state budget
337xxxx
Special
destination
funds
118xxxx
EUR in bank
account
The amount
of Phare
funds unused
232
Discount with
state budget
119xxxx
ROL in bank
account
The amount
of national cofinancing
unused
337xxxx
Special
destination
funds
232
Discount with
state budget
The amount
of national cofinancing
unused
412xxxx
Ex-rate
difference
337xxxx
Special
destination
funds
The amount
of creditor
balance
(412xxxx)
337xxxx
Special
destination
funds
412xxxx
Ex-rate
difference
The amount
of debtor
balance
(412xxxx)
337xxxx
Special
destination
funds
421xxxx
Costs
covered by
the special
destination
fund
The amount
of debtor
balance
(421xxxx)
AND
16.Closure of
programme
refunding the
ex-rate
difference
Date of bank
transfer
Trial Balance
OR
17.Closure of
programme
reversal the
costs covered
by the special
destination
funds
Date of bank
transfer
Trial Balance
ACCOUNTING ENTRIES
MEI
ACCOUNTING PROCEDURES
FUNCTIONS & PROCEDURES
for the Management of the Community assistance under EDIS (PHARE)
Transaction
description
Transaction
date
Base
document
18. Closure
financial yearclose the
balance of 700
and 410
accounts
The end of
financial year
Trial Balance
MEI
Debit
account
700
Financing by
the budget for
current year
MEI
Credit
account
410
Institutions
costs
financed by
the budget
CHAPTER 6
Page : 20
Amount
Amount
received from
co-financing
funds (ROL)
MEI
ACCOUNTING PROCEDURES
FUNCTIONS & PROCEDURES
for the Management of the Community assistance under EDIS (PHARE)
ACCOUNTING FOR
IRREGULARITIES
CHAPTER 7
Page : 21
The Ministry of European Integration / the Implementing Agency for Regional Development
Contractors
Not every irregularity has a financial impact but may require the strengthening of the internal
control environment.
If an irregularity is discovered, or suspected, the procedures contained in Section VIII of this
Internal Procedures Manual must be followed.
Only irregularities which have had a financial impact or a financial implication will be entered in the
accounting system.
Irregularities of this type will arise from, but are not restricted to, the following events:
Manipulation of the tender process
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ACCOUNTING PROCEDURES
RECONCILIATION OF ACCOUNTS
CHAPTER 8
Page : 22
8. Reconciliation of Accounts
The PPD will keep its own financial accounts. As well as accounting for Phare funds the accounting
system will form part of the accounting system of the Ministry of European Integration.
Ensuring control and correctness of the accounting records is the goal of reconciliation of
accounts.
If discrepancies are found, these procedures will form the basis for correction of the discrepancy
and to understand why the discrepancy occurred. Output reports from the accounting software and
from the financial tables will form the basis for the preparation of a report on reconciliations.
Realised payments, posted payables, receivables and outstanding sums will be subject to
approval.
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ACCOUNTING PROCEDURES
RECONCILIATION OF ACCOUNTS
CHAPTER 8
Page : 23
Within 20 days from the end of semester (20th July of the current year and 20th January of the
following year) the Accounting Supervisor will verify that the payments made by the PPD are
MEI
ACCOUNTING PROCEDURES
RECONCILIATION OF ACCOUNTS
CHAPTER 8
Page : 24
shown in the Balance Confirmation and reconcile the Balance Confirmation with the accounting
records of the PPD.
If differences are found the Accounting Supervisor will notify the Beneficiary / Contractor to enable
correction of their records (if the difference is due to a Beneficiary / Contractor error or omission),
or will ask the Accounting Officer to fill in a correction form if the accounting records of the
Beneficiary / Contractor are correct.
The Accounting Supervisor will send the Balance Confirmation of the Beneficiary / Contractor to
the SAO for review and signature.
The SAO will review the confirmation and approve it or will ask for further information or correction.
On the basis of Agreement on financing between the NF and the PPD, PPD shall submit regular
reports on all financial aspects of each Phare programme implementation.
The information registered in PERSEUS system will be transmitted to the National Fund:
A copy to the National Fund
A copy by e-mail to the Delegation of the European Commission in Bucharest
A copy by e-mail to the European Commission
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ACCOUNTING PROCEDURES
DEBTORS LEDGER
CHAPTER 9
Page : 25
9. Debtors Ledger
The Debtors Ledger will provide a complete record of demands made by the PAO requiring the
refund of all sums that have been paid out as a result of an irregularity.
The Debtors Ledger will also provide a complete record of the demands made by the Director of
the PPD for the refund of advance payments that have not been justified by eligible expenditure.
The Accounting Officer of the PPD shall keep and regularly update the Debtors Ledger. As well as
recording the amounts outstanding, the Debtors Ledger will also include a list of all debtors, by
name, and why recovery of funds is required.
The Accounting Supervisor will be responsible for the organisation, supervision and control of the
Debtors Ledger and for reporting to the Director of the Programme Payments Directorate.
The Debtors Ledger will include following:
Debtors name
Debtors address
The amount of penalties imposed on the debtor by the PAO to be added to the debt
The reason the funds are to be recovered and, in particular, specifying if recovery is as a
result of an irregularity
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ACCOUNTING PROCEDURES
RECONCILIATION OF ACCOUNTS
CHAPTER 8
Page : 26
10. Reports
The Balance Sheet will be the basic accounting report of the PPD.
The Balance Sheet will be prepared by the Accounting Officer on:
A monthly basis
An annual basis
A General Ledger
Journal Register
Accounting notes
Within 15th days from the end of the next month, the Accounting Officer will submit the reports as
below, for the previous month, to the Accounting Supervisor for review. The reports will be signed
and dated by the Accounting Officer.
The Accounting Officer will prepare on a quarterly basis, the annexes to the balance sheet, which
are an integrated part of the balance sheet of the M.E.I.
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ACCOUNTING PROCEDURES
DATA ARCHIVING
CHAPTER 11
Page : 27
Provide for the proper disposal of records that are no longer required
Conducting an inventory of all the records to establish official record titles for all files and to
establish where those files are located
Drawing up Record Retention Schedules specifying how long each type of record is to held
in the archive for:
Active reference
In storage for semi-active reference
Inactive reference
When the document may be destroyed
Drawing up a Record Storage Index and a Destruction Control Card for each document or
file transferred to the archive
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ACCOUNTING PROCEDURES
DATA ARCHIVING
CHAPTER 11
Page : 28
The archive will be maintained, protected and managed by a designated officer within the PPD.
Certain archived material, such as electronic data, will be held in suitable cabinets as required.
When documents are to be destroyed a Committee should be established to approve the
destruction and method of destruction. The Committee should consist of:
A representative from the Department or Directorate from which the document originated
MEI
ACCOUNTING PROCEDURES
FUNCTIONS & PROCEDURES
for the Management of the Community assistance under EDIS (PHARE)
12. Annexes
ANNEXES
CHAPTER 12
Page : 29