Term

1516

Internal Financial Policies

INTERNAL FINANCIAL POLICIES

EVA WONG YI KHAI VICE PRESIDENT OF FINANCE & LEGALITIES 15/16
AIESEC IN UNIVERSITY TEKNOLOGI MALAYSIA | UTM SKUDAI, 81310 JOHOR, MALAYSIA

TABLE OF CONTENT

1.0

GENERAL

2.0

BUDGETING

3.0

2.1 Departmental Budget

2-3

2.2 Event/Project Budget

CLAIMABLE EXPENSES

3-5

3.1 Local Travel & Expense Reimbursement

3-4

3.2 Administration

3.3 Communication

3.4 Miscellaneous

4.0

NON-CLAIMABLE EXPENSES

5.0

FINANCIAL STATEMENTS

6.0

BANK ACCOUNTS AND INVESTMENT ACCOUNTS

7.0

EXPENDITURES PROCEDURES

8.0

ASSET MANAGEMENT

6-7

8.1

AIESEC Office

8.2

Material/Equipment

8.3

Merchandise

9.0

ANNUAL MEMBERSHIP FEE

10.0

MEMBER DEVELOPMENT FUND (MDF)

11.0

SUBSIDISATION POLICY

12.0

PROJECT/EVENT

13.0

CONFIDENTIALITY AND RECORDS SECURITY

14.0

PROPERTY AND EQUIPMENT

15.0

DOCUMENT RETENTION

16.0

AMENDMENTS

APPENDIX

7-8

10-11

Term 1516

1.0

2.0

GENERAL

1.1

The Internal Financial Policy (IFP) is to establish general guideline for developing
financial goals and objectives, making financial decisions, reporting the financial
status of AIESEC in UTM and managing the funds of AIESEC in UTM.

1.2

This IFP is prepared by Vice President of Finance and Legalities (VPFL), after
consulting the Executive Board (EB) and reaching a consensus to follow this policy as
closely and tightly as possible.

1.3

Any final decisions related to financial matters not stated in IFP lie on the hands of
Local Committee President (LCP) and VPFL after seeking advice from the EB.

1.4

All claiming decision shall be under the discretion of VP FL, with priority given to the
LCs financial status and sustainability.

1.5

Only members working under the direct orders of the EB or Organizing Committee
President (OCP) for activities authorized by the LC are allowed to claim for the
expenses incurred.

1.6

Any expenses of more than RM50.00 for any purposes require prior permission from
the VPFL and/or LCP.

1.7

VP FL is the final responsible to uphold the implementation of IFP within the LC

operation.

BUDGETING (The entire Board must approve the budget)

2.1

Departmental Budget

2.1.1

Each department is COMPULSORY to submit respective budget planning for the

whole term, with monthly breakdown to the Vice President of Finance & Legalities
WITHIN 1 MONTH after officially start term.

2.1.2

Departmental budget shall be reviewed quarterly or when deemed necessary by the

LCP or VP FL.

2.1.3

The Finance Committee/Member are responsible to assist each department with the
budgeting process and review.

2.1.4

The Finance Committee/Member shall maintain records to ensure that approved limits
are not exceeded.

2.1.5

The Finance Committee/Member shall review actual experience against budget and
shall analyse variances and take appropriate remedial action where required.

Term 1516

2.1.6

EB shall communicate their plans and inform the resources they need to VP FL.

2.1.7

The amount of claims cannot exceed those stated in departments or projects budget.
Any amount overspent will be under the discretion of VP FL whether to be claimed or
not.

2.2

Event/Project Budget

2.2.1 For any event or project MUST be prepared by Organizing Committee (OC) Finance
or OCP (in case where there is no OC Finance), included in the respective proposal
and be handed in at least ONE MONTH before the proposed date of execution. The
event budget template will be provided by VPFL.

3.0

2.2.2

The budget shall be reviewed by the OCP, VP(s) concerned and VPFL and LCP.

2.2.3

The budget is to be acknowledged by the OCP and approved by VPFL and LCP.

CLAIMABLE EXPENSES

3.1

Local Travel & Expense Reimbursement

3.1.1

Travel and expenses reports for mileage, car rental, reception, servicing, etc., will be
maintained by EACH MEMBER itself and submit the claiming form through the
Podio web form for approval and payment on a monthly basis by the department of
Finance & Legalities.

3.1.2

Every Claimant has to submit their own claiming form through the Podio web form
(Click Here: E- Claiming Web Form Link) that provided by the department of
Finance & Legalities.

3.1.3

Reimbursements will be based on the travel rate established by the department of

Finance & Legalities and approved through the budgeting process.

3.1.4

All expenditure receipts and purpose MUST be attached to the claiming form as a
condition for payment.

3.1.5

All claiming have to be submitted by the end of every month. The payment will be
done on 7th of next month. Claiming that submitted after the deadline will only be
reimbursed on the following month.

3.1.6

Reimbursement receipts will be EXPIRED WITHIN 30 DAYS from the day the
expenses made. Any late submission will not be entertained.

3.1.7

VP FL retains the absolute right to reject a claiming if at least one (1) of the
conditions applies:
i. Expenses incurred at own mistake.

Term 1516

ii. Expenses are not relevant to any means of AIESEC purposes.

iii. Receipt is not dated and without companys stamp/logo and signature.
iv. Claim without receipt, unless with reason deemed valid by VP FL.
v. Failure to follow E-claiming procedures.
vi. The receipt is fraud or not relevant to any means or AIESEC purpose.

3.1.8

Petrol Claiming Rate

Types of Vehicle
Car (Own Vehicle)
Car (Rent)
Motorcycle (Own/Rent)

3.1.9

Petrol - Rate Per Kilometre (MYR)

0.35
0.20
0.10

Car Rental Claiming Rate

Types of Vehicle
Car

Car Rental Rate Per Hour (MYR)

46

3.1.10 Toll Claiming

Toll claiming is allowable with the submission of proof of receipt, details of travelling
and purpose related to AIESEC operations to the claiming web form.
3.1.11 Parking Fee Claiming
Parking fee claiming is subject to VPFLs decision based on the purpose related to
AIESEC operations and amount allowable.
3.1.12 Public Transport Claiming
Public transport fare claiming is allowable with the submission of proof of receipt,
details of travelling and purpose related to AIESEC operations to the claiming web
form.

Term 1516

3.2

Administration
3.2.1

Mass printing has to be done in photocopy shop and is NOT ALLOWED by

using the office printer. It is advised that all photocopy printing should be
done at the lowest cost possible.

3.2.3

Any purchasing of stationaries has to notify the Vice President of Finance &
Legalities which is subject to approval. All usage has to be related to AIESEC
purpose, activities or events.

3.3 Communication

3.3.1

Official calls or SMS made for AIESEC purpose and engagement with
AIESEC's stakeholder (Appointment with TN Taker, Interns, EP, customer in
Engagement with AIESEC stage and etc.) are claimable by submitting the
phone bill as proof.

3.3.2

Internet or data usage are not allowed for reimbursement unless it has been
approved in the department budget planning.

3.3.3

International call claiming is allowable with the submission of proof of

receipt, details of travelling and purpose related to AIESEC to the claiming
web form.

3.4 Miscellaneous
3.4.1

Purchase of miscellaneous items (i.e. souvenir) must be referred to and be

approved by the OCP, VPFL and/or LCP beforehand.

4.0 NON-CLAIMABLE EXPENSES

4.1

4.2

Expenditure for food and beverages incurred during any activity (except event) are
NOT claimable unless being stated in the budget and approved by VPFL and
LCP prior to the activity.
Expenditure incurred during any informal gathering (i.e. informal team gatherings)
is NOT claimable.

4.3

Entertainment expenses (i.e. entrance fee) are not claimable unless subject to the
LCP and/or VPFLs approval.

4.4

Travel expenses incurred during de tour are NOT claimable.

4.5

Any goodwill expenses are NOT claimable.

Term 1516

5.0

6.0

FINANCIAL STATEMENTS
5.1

The organisations financial statements shall be prepared on an accrual basis

in accordance with General Accepted Accounting Principles (GAAP).

5.2

The presentation of the Financial Statements shall include Profit & Loss
Statements, Balance Sheet, Financial Analysis and Financial Reporting.

5.3

The Vice President of Finance & Legalities shall prepare and present the
Financial Statements to the Executive Board of AIESEC in UTM and Member
Committee of Finance & Legalities of AIESEC in Malaysia for review.

BANK ACCOUNTS AND INVESTMENT ACCOUNTS

6.1

7.0

8.0

The Vice President of Finance & Legalities shall maintain and oversee Bank
and Investment accounts, and ensure AIESEC in UTM day-to-day financial
operations.

EXPENDITURES PROCEDURES
7.1

All expenditures shall be approved by the department of Finance & Legalities.

7.2

The Finance Committee/Member maintain standard accounting records

containing all aspects of the organisations financial operations. Invoices shall
be approved by the department of Finance & Legalities.

7.3

Following the review and approval, payment receipts and invoices shall be
checked before issuing.

7.4

The paid invoices shall be filed according the department/company/partners

and shall be kept on a fiscal year basis.

ASSET MANAGEMENT
8.1

AIESEC Office
8.1.1

All AIESEC in UTM active members shall responsible to ensure the

cleanliness of the office after using. The office shall always be in good
condition and locked after using.

8.1.2

AIESEC office key can only be given to anyone (AIESEC in UTM

members only) deemed qualified by EBs or LCP. Any lost key shall be
replaced by the respective key holder with penalty of RM10.00.

Term 1516

8.2

Material/Equipment
8.1.2

All Members including Organising Committees are allowed to use the

materials and equipment provided in the office with the permission
from Local Committee President, Vice President of Finance &
Legalities or Organising Committee President upon AIESEC purpose,
activities or events.

8.1.2

The particular member will be liable for any damage or loss on any
important equipment (Projector, Printer, etc).

8.3 Merchandise
8.3.1

9.0

ANNUAL MEMBERSHIP FEE

9.1

10.0

11.0

Only Executive Board or Directors are allowed to take any of the

merchandise (t-shirt, wrist band, etc.) from the office with the
notification to the department of Finance & Legalities.

All members of AIESEC in UTM are required to pay an amount of

MYR 20 for the annual membership fee.

MEMBER DEVELOPMENT FUND (MDF)

10.1

Only Member of AIESEC in UTM is allowed to receive the Member Development

Fund (MDF).

10.2

The amount of Member Development Fund (MDF) will depends on the Local
Committee annual budget planning, financial status and liquidity during the period.

10.3

The Member Development Fund (MDF) recipient has to use the fund awarded within
1 year from the day it has been received.

10.4

The Member Development Fund (MDF) is shall only be used for AIESEC purpose,
conferences, training, or exchange programme. It is not allowed to replace with cash.

SUBSIDISATION POLICY
11.1

Subsidization for any AIESEC conferences(local/international) can only be approved

by EBs with minimum two-third vote. Anyone from AIESEC in UTM is qualified to
apply for subsidization for AIESEC conferences.

11.2

The amount of subsidisation will depends on the Local Committee annual budget
planning, financial status and liquidity during the application period.

Term 1516

12.0

11.3

All the applications are subject to the approval of Local Committee President and
Vice President of Finance & Legalities.

11.4

Specialised Unit President (SUP) will being subsidized the Transportation Fees
ONLY for attending every Executive Board Meeting (EBM).

11.5

LCP Elect of AIESEC in UTM will being subsidised the Conference Fees ONLY for
attending Asia Pacific Leaders Summit (APLS). The prerequisite for subsidization is
up to the current EBs discretion.

PROJECT/EVENT
12.1

13.0

14.0

15.0

Receiving of any amount of event subsidisation from the university administration, the
Organising Committee of Finance & Administration is required to prepare the event
report and financial report and submit to the university administration WITHIN 10
days after the event ends.

CONFIDENTIALITY AND RECORDS SECURITY

13.1

Financial records are restricted materials with limited access.

13.2

Only the Local Committee President and Vice President of Finance & Legalities shall
have access to financial records.

PROPERTY AND EQUIPMENT

14.1

Property and equipment shall be stated at historical cost.

14.2

Depreciation is computed over the estimated useful lives of the assets using the
straight-line method.

14.3

A Depreciation schedule shall be prepared and maintained by the Vice President of

Finance & Legalities on an annual basis, taking into consideration the annual
equipment inventory.

DOCUMENT RETENTION
15.1

Financial documents are retained for a period of time of at least 3 terms.

Term 1516

16.0

AMENDMENTS
16.1

Internal Financial Policy is to be reviewed at the beginning of every term and

whenever VPFL deem necessary.

16.2

Minor amendments can only be done by the VPFL, after consulting and getting
approval from LCP or EB.

16.3

Important or major amendments require the vote (for) of at least 2/3 (two-third) of EB
to be passed.

Term 1516

Appendix
Effective Systems of Internal Control
General
Internal control can be divided into two areas: accounting controls and administrative controls.
Administrative controls deal with the operations of the organisation, whereas the accounting controls
deal with accounting for such operations. Accounting controls should be designed to achieve the five
basic objectives:
Validation
Validation is the examination of documentation by someone with an understanding of the accounting
system, for evidence that a recorded transaction actually took place and that it occurred in
accordance with the prescribed procedures. As systems grow more sophisticated, validation is a built
in component whereby the transactions test themselves against predetermined exceptions.
Accuracy
The accuracy of amounts and account classification is achieved by establishing control tasks to check
calculations, extensions, and additions and account classifications. The control objective is to be
certain that each transaction is recorded at the correct amount, in the appropriate, account, in the
right time period.
Completeness
Completeness of control tasks ensures that all transactions are initially recorded on a control
document and accepted for processing once and once only. Completeness controls are needed to
ensure proper summarization of information and proper preparation of financial reports. To ensure
proper summarization of recorded transactions.
Maintenance
The objective of the maintenance controls is to monitor accounting records after the entry of
transactions to ensure that they continue to reflect accurately the operation of the business. The
control system should provide systematic responses to errors when they occur, to changed conditions,
and to new type of transactions. The maintenance function should be accomplished principally by the
operation of the system itself. Control maintenance policies require procedures, decisions,
documentation, and subsequent review by a responsible authorized individual. Disciplinary control
tasks, such as supervision and segregation of duties, should ensure that the internal control system is
operating as planned.
Physical Security
It is important in all organisations that the assets are adequately protected. Physical security of assets
requires that access to assets be limited to authorize personnel. One means to limit access to both
assets and related accounting records is through the use of physical controls. Protection devices
restrict unauthorized personnel form obtaining direct access to assets or indirect access through
accounting records that could be used to misappropriate assets. Transaction recording equipment
Term 1516

10

limits access to assets by limiting the number of employees involved in recording and posting
transactions.

Term 1516

11

| Prepared by |
| Eva Wong Yi Khai | Vice President of Finance and Legalities 2015/2016 |
| evawong.yikhai@aiesec.net|

| Approved by |
| Wong Jing Rong | Local Committee President 2015/2016 |
| jingrong.wong@aiesec.net |

Term 1516

12