Author: Bright Fiifi Akwaboah

Title: Cash flow Reserve Proposal   

Month and year: February, 2020
Contact Number: 0244969555
E-mail: netsoftsystemtechnology@gmail.com

ABSTRACT

The objective of this thesis is to discuss and implement Cash flow Reserve and
to make a Policy plan towards ensuring the Ministry of finance Ghana (MoF)
financial resilience, Because Governments worldwide differ widely from budget
size to operating model. Cash flow Reserve work and help will be able to build
a policy that fits    Ministry of finance Ghana (MoF) goals and needs to maintain
the Budget Statement and Economic policy of the Government of Ghana for the
2020 Financial year to 2025. Cash flow Reserve will help Ministry of finance
Ghana (MoF) preserve the capacity to deliver on their missions in the event of
unbudgeted increases in operating expenses and/or losses in operating revenues,
delayed payments or cutbacks in funding from Grants and Investors and
unforeseen financial shortages, from $2 billion maximum annually, the presence
of Cash flow Reserve is to increases (MoF) ability to absorb or respond to
temporary changes in its revenue because the current economic crisis threatens
the very existence of many nations worldwide and the Ministry of finance
Ghana (MoF) by implementing Cash flow Reserve will emerge from this
current economic crisis in a stronger financial position, ready to withstand the
next challenge that arises. Cash flow Reserve provides funds without interest for
Twelve to sixty (12-60) month’s period that are available for use at the
discretion of Ministry of finance Ghana (MoF) board.  

Table of Contents
Cash flow Reserve
Purpose………………………………………………………………
……………………………………

Definitions and
Goals…………………………………………………………………
…………………………………….…

Funding Cash flow

Reserves………………………………………………………………
………………………………..…

Using Cash flow

Reserves………………………………………………………………
…………………………………...…

Review of
Policy…………………………………………………………………
…………………………………………….

Cash flow Reserve Purpose

The purpose of the Cash flow Reserve for Ministry of finance Ghana (MoF) is
to help ensure the long-term ability to meet its mission and will maintain the
reserve to achieve the following objectives:

To create a line of credit to manage cash flow and maintain financial flexibility
in the country
To enable the Ministry of finance Ghana (MoF) to sustain operations through
delays in payments of committed funding
To pay for one-time, nonrecurring expenses that will build capacity

The Cash flow Reserve Funds is not intended to replace a permanent loss of
funds or eliminate an ongoing budget gap. It is the intention of Ministry of
finance Ghana (MoF) for reserves to be used and replenished within a one to
five years period.

Definitions and Goals

The Cash flow Reserve serves a dynamic role and will be reviewed and
adjusted in response to internal and external changes. Its ongoing operation and
oversight is delegated to the Finance Committee. The target minimum Cash
flow Reserve Funds is equal to $1 billion, representing operating expenses
includes all recurring, predictable expenses such as salaries and benefits,
occupancy, office, travel, program, and ongoing professional services and
projects.

Funding Cash flow Reserves

To establish the Cash flow Reserve, the Ministry of finance Ghana (MoF) has
to designated 43,960.00 GHC, of capital expenditure beginning balance and this
will be use to establish the Cash flow Reserve electronically service in-other to
provide Reserve funds to the Ministry of finance Ghana (MoF) when funds are
needed as explained in the cash flow reserve purpose.

Using Cash flow Reserves

Finance Committee will identify appropriate reasons for accessing the reserve
funds and confirm that the use is consistent with the purpose of the reserves as
described in this Policy.

As a part of this process, the Finance Committee will do the following:

Analyze the reason for the needed funds;

Assess the availability of any other sources of funds before using reserves and
evaluate the time period that the funds will be required, and then replenished.

Finance Committee Board authorizes use and monitors reserves.

The Finance Committee may access the reserves for purposes as outlined above,
as long as sufficient funds are available to repay such usage within twelve to
sixty month’s time.

The Finance Committee will submit a request to the Cash flow Reserve in
writing, which will include the analysis and determination of the use funds and
plans for replenishment (as outlined above).

The Cash flow Reserve system will approve or modify the request and authorize
transfer from the funds. Email and the online system for Cash flow Reserve is
an acceptable form of notification and acknowledgment.

Ministry of finance Ghana (MoF) report and monitor use of funds and is
responsible for ensuring that the Cash flow Reserve Funds is maintained and
used only as described in this Policy. Upon approval for the use of Reserve, the
Ministry of finance Ghana (MoF) will maintain records of the use of funds and
plan for replenishment.

Review of Policy

This policy will be reviewed every year, by the Executive Committee / Finance
Committee, Changes to the Policy will be recommended by the Finance
Committee

Reserves can only guarantee the long-term financial stability of an organization

if they are carefully managed by Finance Committee.
This Cash flow Reserve fund policy is a living document that should continue to
reflect the circumstances facing the Ministry of finance Ghana (MoF) over time.
Operations, programs, risks, and budgets can all change, and so this policy
should adapt as well. For this reason, it is recommend that require regular
review of this policy by board or overseeing committee, when changes can be
recommended and approved.