TREASURY MANUAL. Table of Contents. Effective 01 October 2006, this Treasury Manual supersedes Chapter 8 of the Overseas Finance Manual.

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1 TREASURY MANUAL Table of Contents 1. Bank Account Management 2 Page 2. Electronic Fund Transfers Antiterrorism Compliance Global Bank Account Database Cash Forecasting Citibank, NY Petty Cash Bank Guarantee CHQ/Treasury 80 Effective 01 October 2006, this Treasury Manual supersedes Chapter 8 of the Overseas Finance Manual. Unless explicitly authorized in this manual or other formal guidelines issued, CHQ/Treasury approval is required for all Treasury functions. When in doubt, please contact treasury@care.org for guidance. Updates to this manual will be made as needed and future guidelines will be provided on CO Investments. We welcome all feedback regarding our service, communications, policies, processes and the presentation of this manual. Your input is critical to the organization s success and ongoing improvement. CARE USA Treasury Manual 1

2 Chapter 1 BANK ACCOUNT MANAGEMENT Table of Contents Introduction A. Opening New Bank Account B. Maintenance, Monitoring and Evaluation 1. Bank Account Signatories 2. Bank Account Reconciliations 3. Monitoring/Evaluation of Bank Stability and Services C. Closing a Bank Account D. Other 1. Limitations on Number of Bank Accounts to Maintain 2. Assigning Bank Account Name 3. Assigning G/L Account Name and Number 4. Insurance Coverage on Bank Accounts 5. Activating On-Line Banking 6. Permanent File E. Forms Treasury Form T201 Request to Open New Bank Account Treasury Form T202 CHQ Authorization to Open Bank Account Treasury Form T203 Board Resolution CARE USA Treasury Manual 2

3 Establishing and Maintaining Bank Accounts Opening a new bank account Maintenance, monitoring & evaluation of bank account Closing of the bank account Introduction By nature, bank accounts carry a great deal of risk and cost money. The risk is both internal (bank access) and external (bank stability); the cost is direct (bank fees) and indirect (time incurred on reconciliations, required reporting, etc.) At this time, CARE has over 600 bank accounts globally resulting in significant exposure and expense to the organization. This chapter will address the life cycle of a bank account, as depicted above, specifically outlining policies and procedures as well as general risks associated with bank accounts. It is the CO s responsibility to customize controls and implement appropriate risk management tools to minimize Treasury exposure, specific to the operations of the CO. Please contact treasury@care.org for questions or guidance. Consistent with other guidelines provided in this manual, CARE s policies and procedures should always establish a balance between efficiency and risk management. The changes further described in this chapter have been implemented for two reasons: 1. To tighten controls where necessary (i.e., opening new bank accounts) 2. To make the process as efficient and cost effective as possible (i.e., giving CO full responsibility and accountability of authorizing bank signatories without the added time and expense of CHQ approval) CARE USA Treasury Manual 3

4 CHQ Service Commitment for Processing Request to Open New Account Figure 1 A B C D CO sends request to open new bank account to CHQ/ Treasury CHQ/Treasury confirms receipt of the request CHQ reviews request to open new bank account and communicates with CO as needed CHQ approves (declines) & notifies CO electronically E CHQ/Treasury sends board resolution to CO * (Form T201) (Form T202) (Form T203) One business day Seven business days * A copy of the board resolution will only be sent to the CO if the bank requires it. What Needs to Take Place in the CO Before Requesting CHQ to Authorize Opening of a New Bank Account? Figure 2 HOW to request? CO sends password protected Treasury Form T201 to CHQ WHY open a new account? CO identifies the need; determines criteria WHO are the signatories? CO determines signatories WHICH bank? CO evaluates different banks based on criteria and selects CARE USA Treasury Manual 4

5 A. Opening New Bank Account Opening a new bank account Maintenance, monitoring & evaluation of bank account Closing of the bank account 1. Reasons for Opening a New Account The CO should document reasons for opening a new bank account using Treasury Form T201. Examples: New location to operate; existing account(s) do not meet need Management decision to transfer account from one bank to another to reduce risk and/or increase efficiency Donor requirement to open a separate bank account 2. Purpose and Use(s) of the New Account Please provide the purpose and use(s) on Treasury Form T201. Examples: Operating account for the main office, suboffice or field office Payroll account Account to track all micro-finance projects of the CO 3. Selection of the Bank The CO s understanding of the needs and the political/economic environment places the CO Senior Management in the best position to select the bank. The CO must identify on Treasury Form T201 the five most important criteria for selecting the bank. To illustrate, a CO may need to open a bank account in Euro and has identified the following criteria, in order of importance: 1 st Stability of the bank 2 nd Euro account is offered by this bank 3 rd Location 4 th Bank is used and has strong reputation among other (I)NGOs 5 th Bank s affiliation with Citibank or the CO s primary bank account(s) CARE USA Treasury Manual 5

6 4. Approval to Open New Bank Account 4.1 Who can request to open a bank account on behalf of the CO? The following positions are authorized to request to open a new bank account on behalf of the CO: Country Director (CD) Regional Director (RD) Deputy Regional Director (DRD) Designate (CD s or RMU s) The CD, RD or DRD can temporarily designate someone to act in the CD s capacity when necessary (e.g., CD extended business or vacation travel, the CD position is under transition.) Such delegation must be communicated directly to treasury@care.org; CHQ/Treasury will confirm receipt and a unique password will be issued to the delegate promptly. As discussed in the introduction, bank accounts carry a great deal of risk. CARE has tightened controls around opening and monitoring bank accounts to minimize risk to the organization. Accordingly, authorization to request a new bank account has been limited to the above positions. 4.2 How does a CO request to open a bank account? All requests to open a new bank account must be documented using Treasury Form T201, and should be reviewed by either the Controller or ACD Program Support (or equivalent positions.) The form should then be submitted to an authorized requestor (above) and must be reviewed, password protected and sent to treasury@care.org. This is required for each bank account requested. 4.3 Who has the authority to open a bank account for CARE? Opening a new bank account requires joint approval from any of the following positions: President and CEO SVP, Program SVP, Human Resources SVP, Strategic Support Director, Global Financial Services Director, Global Business Analysis Director, Budgeting and Reporting VP Technology and Chief Information Officer Chief Investment Officer Treasurer CARE USA Treasury Manual 6

7 4.4 How can CHQ/Treasury establish the validity of each request to open a new bank account? As noted in Chapter 2 (Fund Transfer Requests), CHQ is relying on strong internal controls within each CO. It is the responsibility of the CO/RMU to ensure controls are in place and the unique passwords assigned remain confidential. Important: Effective 1 July 2006, all requests to open a new bank account MUST be PASSWORD PROTECTED using the unique eight character password assigned by CHQ/Treasury. This is the same password that was assigned to the CD, RD or DRD for fund transfer requests. 4.5 What approval documents will be provided by CHQ? Figure 3 CHQ Approval Board Resolution (Treasury Form T202) (Treasury Form T203) 1. Purpose CHQ s documentation of An official document signed by approval to open a new the Secretary of CARE that account. certifies who is authorized to open a new bank account for CARE. 2. Required? MANDATORY OPTIONAL CARE USA s internal policy This is an external requires formal approval by requirement by some banks. It CHQ to open every new bank is not required by CARE and account. will only be provided by CHQ if required by the bank as indicated on Treasury Form T201. Approval is documented via Treasury Form T202 and will be sent electronically within seven business days. Each approval has a unique number assigned by CHQ and will be tracked on the global bank account database. A scanned copy will be sent electronically with Treasury Form T202 within seven business days. Original with corporate seal and signature will be sent via pouch. CARE USA Treasury Manual 7

8 5. Bank Signatories Identification, authorization and updates to CO bank account signatories are critical to opening and maintaining bank accounts. Section B includes guidelines on bank signatory management. B. Maintenance, Monitoring, and Evaluation Opening a new bank account Maintenance, monitoring & evaluation of bank account Closing of the bank account 1. Bank Account Signatories 1.1 Approval of Bank Signatories Important: Effective 1 July 2006, COs are no longer required to obtain CHQ approval and board resolutions when changes to the signatories are needed. Approval by the CD, RD/DRD or CD designate is deemed sufficient. Please see Special Instructions for Citibank, NY Accounts in Chapter 6. This is one of the major policy changes introduced in FY07. The CD is in the best position to determine who should be an authorized signer for each bank account, specific to the business requirements and the needed controls. This change will increase organizational efficiency and further reduce organizational risk by eliminating the added layer of CHQ authorization. Eliminating CHQ approval shifts full accountability of bank signatory management to the CD/RMU. The CD/RMU must ensure strong internal controls are in place and that segregation of duties exist, or compensating controls are implemented. Bank signatories must be updated as soon as personnel or responsibilities change. CARE USA Treasury Manual 8

9 1.2 Bank Signatories Master File (at the CO) The CO must document all approvals to add or delete bank signatories and maintain an updated master list. The list must: be reviewed every month, more frequently if changes occur always match what is in the bank s records be readily available for audit or verification by any CHQ personnel with oversight responsibility, and/or CARE external auditors 1.3 Bank Signatories Master File (at CHQ) Treasury Form T201 requires the CO to provide a list of all CO staff assigned as check signatories at the time of opening the bank account. CHQ/Treasury will include the original signatory list in the CARE USA Global Bank Account Database. Changes to signatories during the fiscal year will not be tracked by CHQ, but CHQ/Treasury will ask COs to provide the updated list as of December 31 each year, to comply with the U.S. Treasury Department reporting requirement. 1.4 Mandatory bank signatories to every CO bank account The following CO/RMU personnel must always be included as bank signatory for each CO bank account: CD and ACD Program/Program Support (or equivalent positions) RD and one DRD Effective 01 July 2006, the RD and one DRD are required bank signatories on each CO bank account. In the event of an emergency, this will provide CARE the ability to rely on non-co based personnel to mobilize funds. Outside of the RMU, CHQ staff will no longer be required signatories. COs are not expected to immediately add the RD and DRD on all bank account signatory lists, but should begin including them with normal signatory updates. COs must be fully compliant by 30 June Important: Checks in excess of $10,000 USD (or local currency equivalent) require dual signature of authorized signatories. The CO may impose stricter controls if deemed necessary. Only CARE employees are permitted to be signatories on CARE bank accounts. In rare situations, an exception may be made if dual signatures, including a CARE signatory is required. Please contact the Global Cash Manager at treasury@care.org for guidance. CARE USA Treasury Manual 9

10 2. Bank Account Reconciliations Bank reconciliations are prepared to assure that transactions affecting cash are properly recorded and assure that unauthorized disbursements are detected promptly. Bank reconciliations are a crucial control. They must be prepared monthly for every bank account in a timely manner. Someone other than the preparer must review the bank reconciliations timely and approve. Differences between entries in the general ledger and entries on the bank statement are called reconciling items. These reconciling items must be identified and included on the bank reconciliation with comment on the expected resolution and actions taken. The reconciliation must be prepared by someone: without access to: o blank check stock o cash o wire transfer forms who is not a bank signatory who does not have access to disburse funds electronically CO Review The reconciliation must be reviewed and approved by the CO Controller or ACD Program Support (or equivalent positions) and should be periodically reviewed by the Country Director. HQ Review COs must include an electronic copy of each bank reconciliation (BR) in the monthly reporting package they send to CHQ/Global Business Analysis. COs are encouraged to submit the current month BRs, but may submit the prior month BRs. If the CO sends the current month BRs and they are properly prepared, the CO will receive an "excellent" rating. If the CO sends the prior month BRs and they are properly prepared, the CO will receive an "excellent" or a "good" rating, depending on the specific situation. COs should not send bank statements or other documents supporting the BRs. The bank statements are required only at year end closing. CARE USA Treasury Manual 10

11 Global Business Analysis rates COs on the quality and timeliness of their BR submissions. This rating is communicated via the monthly World Letter. The criteria for rating are as follows: Excellent Good Rating Needs Improvement Unsatisfactory Figure 4 Criteria Current month bank reconciliation statements are received on time Reports are complete and accurate for all open bank accounts No outstanding checks for over 6 months No cash deposits in transit for over 30 days Current month bank reconciliation statements are received with some delay but reports are complete and accurate for all open bank accounts Bank reconciliation statements due last month are received this month; reports are complete and accurate for all open bank accounts No outstanding items for over six months No cash deposits in transit for over 30 days The current month or previous month bank reconciliation are received for each and every open bank account, but there are a few significant, but not material, reconciling items pending for 6 months or more or other significant, but not material errors or omissions. Any situation not warranting a rating of excellent, good or needs improvement. 3. Monitoring and Evaluation 3.1 Bank Stability Bank accounts, by their nature, carry risk. On-going evaluation of the financial condition of the bank is necessary to assess the bank s stability and minimize organizational risk. CARE USA Treasury Manual 11

12 In FY07, CHQ/Treasury will begin reviewing default CO bank accounts for available information on the financial stability of the bank. Although there is no defined tool or rating that can be used for all COs, CHQ/Treasury will continue to seek various resources to provide the CO additional information. CARE does place value in a local bank s corresponding relationships (i.e., we will have more comfort if they have a relationship with an institution we partner with, such as Citibank or Standard Chartered Bank.) Any information or concerns that arise will be brought to the attention of the CO Senior Management. The overall responsibility of monitoring the financial stability and the ongoing banking relationship is with the CO. This is deemed most appropriate due to the complexity, variety of contributing factors, and the risks inherent to the CO s unique operations. Guidance for criteria to evaluate banks is provided in Treasury Form T201, Request to Open New Bank Account. Not only is this criterion applicable when selecting a new bank, but it should also be used for ongoing evaluation. The list is not meant to be all inclusive but will provide the CO a basis for thinking of such. The CO should also consider: networking with other INGOs to determine what banks are used, why, and if any concerns exist determining current and/or expected changes in affiliation with a reputable international banking group obtaining and reviewing the bank s latest financial statements and/or independent financial rating staying up to date with local banking industry events and publications reviewing the business section of newspapers or magazines that contain articles about banking 3.2 Evaluation of Banking Services Similar to monitoring the financial stability of a bank, evaluation of banking services does not end with selection of the bank. As the CO s business requirements change and more services are offered by local and international banks, the CO should periodically review bank services and the relationship to increase operational efficiency and reduce risk. Such evaluation should always maintain a balance between cost, quality, timeliness, and impact. CARE USA Treasury Manual 12

13 Opening a new bank account Maintenance, monitoring & evaluation of bank account Closing of the bank account C. Closing a Bank Account As business requirements evolve, some bank accounts will become unnecessary. Additionally, all bank accounts opened to satisfy the requirement of a donor should be closed within a reasonable time after the cash operations end. This is important as the existence of unnecessary bank accounts creates unnecessary risk and costs the organization money. As discussed in the introduction, maintaining bank accounts costs more than the bank fees. Indirect costs are incurred to ensure it is maintained, to include reconciling, reporting and updating bank access. 1. Authorization to Close an Account When a CO determines a bank account is no longer necessary, the CD is authorized to notify the bank of CARE s decision to close the account. There is no need to obtain approval from CHQ to close a bank account, except for Citibank, NY accounts (where CHQ/Treasury should be notified via of the request to close the account.) CHQ/Treasury will then contact Citibank, NY and process accordingly. If a bank requires the CO to obtain approval from CHQ to officially close the account, the CD should communicate such requirements to treasury@care.org. CHQ/Treasury will prepare required bank documentation. 2. Notification and Documentation Requirements Once the account is closed, the CO should immediately notify treasury@care.org, copying the Global Business Analysis Unit (GBAU) Manager, that the account had been officially closed. Please provide the following: Bank account name and bank account # G/L account # Date (month and year) the account was officially closed Reason for closing the account CARE USA Treasury Manual 13

14 D. Other 1. Limitations on Number of Bank Accounts to Maintain The rule for determining the right number of bank accounts to maintain is to keep the number of accounts at a minimum level while achieving efficient and safe cash operations. Important: Although donors may require CARE to open a separate bank account as a condition for awarding the grant, every effort should be made through negotiations with the donor to explain fund accounting. This allows accurate tracking of donor funds without the additional cost of opening and maintaining a separate bank account. 2. Assigning Bank Account Name All bank accounts should be established in the name of CARE, followed by the name of the CO. Example: CARE Nepal. Additional information can be included to further identify the account if needed. 3. Assigning G/L Account Name and Number As noted in CARE USA s official chart of accounts, the following G/L account numbers should be assigned by the CO based on the location and currency of the account: G/L Account # Account Name Account Type USD Bank #1 to 98 USD bank account in the US LC Bank #1 to 98 LC bank account, in country USD Bank outside US USD bank account outside #1 to 10 the US Other Currency Bank Other currency bank #1 to 10 account in country (non USD or LC) 4. Insurance Coverage on Bank Accounts The Federal Deposit Insurance Corporation (FDIC) was created in 1933 to maintain public confidence and encourage stability in the U.S. financial system through the promotion of sound banking practices. CARE USA Treasury Manual 14

15 The FDIC insures deposits in the U.S. against bank failure for up to $100,000 USD per institution as long as the bank is a member bank. Citibank is a FDIC member bank. Most of the accounts held overseas are largely uninsured. Although this risk is largely beyond CARE s control, COs should be aware of local banking regulations and the significant risks associated with maintaining high cash balances in-country. Strong efforts should be placed in proper cash forecasting to reduce excess cash balances in country. 5. Activating On-Line Banking Use of on-line banking is increasing because it is more efficient. However, it also increases risk. Unlike bank signatory access, the controls vary significantly between different financial institutions based on their unique banking platforms. Due to these variances, we cannot specify exact processes that a CO must have in place. However, we strongly recommend any CO considering on-line banking fully explore the various scenarios that may be encountered and consult with internal auditors and/or others knowledgeable of internal controls. We can recommend certain controls that always should be in place. The administrator of access rights should not be able to disburse funds. A good choice for an administrator, therefore, would be an IT administrator or an internal auditor. The administrator must understand the functionality of the system well, must understand the importance of financial controls, and must ensure segregation of duties exist. One individual should never be able to initiate and approve an electronic disbursement and each electronic transaction should be supported by properly authorized documentation. Established financial controls should be documented and tested quarterly due to the level of risk. Additionally, bank access (user s rights) must be maintained. Just as bank signatories must be updated as soon as changes in personnel or responsibilities occur, on-line access must be updated immediately as well. 6. Permanent File COs are required to maintain electronic or hardcopy permanent files for every bank account. At a minimum, the file should contain the following: Treasury Form T201, CHQ authorization to open new bank account Service and fee agreements Original and subsequent changes to bank account access or signatories Closing bank account documentation, including correspondence between the bank, CHQ/Treasury and the CO CARE USA Treasury Manual 15

16 Treasury Form T201 REQUEST TO OPEN NEW BANK ACCOUNT To: From: Date: CARE type the name of the CO Approved by: Name Position Please Select Reviewed by: Name Position Please Select Name of bank account to be opened: Currency of bank account: Bank name: Street address (including country): Website address: (as applicable) Branch: I. Reasons for Opening a New Bank Account (Check all that applies): New location to operate (e.g., new sub office or field office) Replacement of an existing account to reduce risk and/or increase efficiency Please provide bank account # and expected close date Compliance with donor requirement to open a separate bank account Please provide the following additional information: 1. Donor name 2. Fund code / project # 3. Project start date 4. Project end date 5. Expected bank account closing date Other (please specify) II. Purpose and Use/s of the New Bank Account 1. State what the new bank account will be used for (e.g., operating account for the main/suboffice/field office, payroll account, micro-finance projects account, etc.) 2. Is this the CO s in-country default bank account (primary in-country account that receives fund transfers from CHQ)? Yes No 3. Is the bank account owned jointly with another organization? Yes No 4. Describe the nature of account. Cash Short term investments (e.g., time deposits) CARE USA Treasury Manual 16

17 III. Selection of Bank in Which the Account will be Opened The table below provides the criteria to be used when selecting the bank to provide services. Criteria: All criteria must be considered during the review and evaluation process. CO Ranking: The CO must document the basis for selecting the bank where the new account will be opened by ranking the top five reasons that the CO considers most important when selecting the bank. CO Comments: The CO must comment on each of the criteria. CO Criteria Ranking CO s Comments 1. Compliance with CARE s anti-terrorism policy - REQUIRED Yes No 2. Stability and credit worthiness a. a. Is this bank a subsidiary or an affiliate of a reputable b. Yes No international banking group? If yes, indicate bank name. c. b. Is this bank controlled and regulated by the local government? d. c. How long has this bank existed in-country? e. d. Does the bank report a healthy financial statement? Other comments: What available reports were reviewed by CARE to determine the financial health of the bank? e. Did the CO obtain ratings for the bank from major credit rating agencies in-country or overseas? If not, please explain. 3. Reputation of the bank among the international NGO community a. Are other international NGOs holding accounts in the bank? b. Has there been any negative publicity in connection with the bank? 4. Location relative to the country office s main office, sub office or field office a. Is this the only bank in the area where the account is needed? b. Is the bank located in a safe environment (e.g., CARE personnel do not have to travel long distance to the bank, the road to travel to/from the bank and the bank parking lot are both secure) c. Does the bank have a good branch network? a. b. Other comments: a. Yes No b. c. Yes No Other comments: 5. Ability to meet specific banking requirements of CARE Comments: (e.g., bank processing payroll of employees, bank offers foreign currency account such as Euro) 6. Quality of service, including past experience and flexibility a. What differentiates this bank s service from other banks in which the CO considered opening the account? b. Is this the first time the CO will be opening an account with this bank? - If yes, what is the CO s basis for determining the bank s quality of service? - If no, please comment on CARE s experience with this bank. a. b. Other comments: 7. Responsiveness to needs or problem situations Comments: (required criteria if there is an already existing bank relationship) 8. Accurate and timely monthly account reports detailing Comments: transactional activity and fees CARE USA Treasury Manual 17

18 Criteria CO Ranking CO s Comments Will the bank provide reports/ratios needed by CARE to manage the accounts well? e.g., timely bank statements, copies of documentation, etc. 9. Overall cost of service a. Did the CO negotiate fees for banking services to be used? b. How does this bank s fees compare with other banks a. b. offering the same services? 10. Insurance a. a. Is the bank regulated by the Central Bank of the country in b. which it is established? Other comments: b. Is there an existing insurance coverage that protects the cash in bank? If yes, what is the maximum insurance coverage per account holder? 11. Ability to receive and/or disburse electronic fund transfer a. Yes No a. Is the bank affiliated with Citibank? 12. Contingency or disaster recovery plans a. Has the bank experienced a disaster? How was the situation handled? b. Describe the bank s disaster recovery facilities and plans. 13. Others (CO to indicate based on specific needs) Comments: IV. Bank s requirements to open new bank account Important: Effective 1 July 2006, CHQ no longer requires a board resolution every time the CO needs to open a new bank account, make changes to existing signatories, or close the account. CHQ will provide a board resolution only if required by the bank. CHQ authorization to open new account will be provided to the CO via Treasury Form T202. This is the only CHQ approval documentation required per CARE USA policy. CARE USA board resolution required by the bank? Yes No Other comments: Bank signatories Provide the list of names (with position and signing limitations) to this account: Name Position Signing Limitations Note: If additional space is needed, please attach a separate schedule. CARE USA Treasury Manual 18 a. b.

19 CO Comments: TO BE COMPLETED BY CHQ/TREASURY 1. Indicate if CHQ/Treasury has reviewed additional information that helps CARE assess risk with this bank (required if a default bank account) Yes No If yes, indicate the source of additional information obtained and attach documentation. 2. Global Cash Manager recommends CHQ s authorization to open new bank account Yes No Initials Date 3. Additional Comments: 4. Added to Country Office Bank Detail Spreadsheet: Initials Date CARE USA Treasury Manual 19

20 Treasury Form T202 CHQ AUTHORIZATION TO OPEN A NEW BANK ACCOUNT TO: CARE FROM: CARE USA Treasury DATE: SUBJECT: CARE USA approval to open NEW bank account Bank Name & Location: Purpose of account: In accordance with the resolution approved by the CARE Board of Directors September 30, 1997 and the pursuant Power of Attorney signed by the President and CEO and Senior Vice-President, Strategic Support June 15, 2006, the following positions, acting jointly, are authorized to approve the opening of new bank accounts and changes to all CARE global bank accounts: President and CEO Senior Vice President, Strategic Support Senior Vice President, Program Senior Vice President, Human Resources Director, Global Financial Services Director, Global Business Analysis Director, Budgeting and Reporting VP, Technology and Chief Information Officer Chief Investment Officer Treasurer The request to open the new bank account referenced above per Treasury Form T201 dated has been approved. In accordance with the same resolution and Power of Attorney described above, the Country Director, Deputy Regional Director and Regional Directors have the authority to approve signatories and all changes to signatories for this bank account. Please remember to report back to treasury@care.org the bank account number and corresponding G/L number as soon as the account is established. Sincerely, Please Select Please Select Please Select Please Select FY07- CARE USA Treasury Manual 20

21 CERTIFICATE (SAMPLE) I, as Secretary of Cooperative for Assistance and Relief Everywhere, Inc. (CARE), a corporation duly organized and existing under the laws of the District of Columbia, hereby certify that a meeting of the Board of Directors of said corporation was duly called and held at its office in the City of Atlanta and State of Georgia on the 30 th day of September 1997; that at said meeting a quorum was present and voting throughout and that the following resolution was unanimously adopted and is now in full force and effect and replaces all prior resolutions: RESOLVED, that the President and CEO [formerly known as President] and Senior Vice President, Strategic Support [formerly known as Senior Vice President of Finance and Administration], acting jointly, may revise existing signatory authorizations and grant new authorizations relating to the opening of new accounts and changes to all existing CARE domestic and overseas bank accounts. On 16 June 2006 the President and CEO and Senior Vice President, Strategic Support, believing it to be in the best interest of CARE, delegated their authority by signing a Limited Power of Attorney to approve the opening of new bank accounts and changes to all existing CARE global accounts to any two, acting jointly, of the following positions: President and CEO Senior Vice President, Strategic Support Senior Vice President, Program Senior Vice President, Human Resources Director, Global Financial Services Director, Global Business Analysis Director, Budgeting and Reporting VP, Technology and Chief Information Officer Chief Investment Officer Treasurer Additionally, on 16 June 2006 the President and CEO and Senior Vice President, Strategic Support, believing it to be in the best interest of CARE, delegated their authority by signing a Limited Power of Attorney to approve changes to existing accounts, to include the authorization of bank signatories, to the individuals holding the position of CARE Country Directors, Regional Directors and Deputy Regional Directors for local bank accounts in their geographic area of responsibility. IN WITNESS THEREOF, I have hereunto set my hand as Secretary of CARE and affixed the CARE corporate seal, this. SECRETARY Treasury Form T203 CARE USA Treasury Manual 21

22 Chapter 2 ELECTRONIC FUND TRANSFERS Table of Contents A. Roles and Responsibilities 1. CHQ/Treasury 2. CO Controller B. Electronic Fund Transfers 1. How Funds Move Internationally 2. Fund Transfer Requests Policies and Procedures C. Risks Associated with Fund Transfers & How to Reduce 1. Fraud 2. Operating Risk D. Fund Transfer Forms & Instructions When to Use, Which One Treasury Form T101 Fund Transfer Request (Internal) Treasury Form T102 Fund Transfer Request (External) Treasury Form T301 Notification of Password E. Default Bank Account What is It and Why is It Important? F. Glossary of Key International Banking Terms CARE USA Treasury Manual 22

23 A. Roles and Responsibilities 1. CHQ/Treasury 1.1 Executes wire transfers based on Fund Transfer Requests (FTRs) from COs, RMUs or CHQ. This includes operational fund transfers and 3 rd party payments the CO/RMU requests CHQ to make. CHQ/Treasury ensures: proper authorization of FTR exists (password & $$ limits) reasonableness of banking information appropriate routing of international funds (intermediary banks) fund transfer is warranted (funds are due CO or Global Business Analysis Unit (GBAU) approval is obtained) sufficient internal controls exist to minimize organizational risk 1.2 Manages CARE USA Treasury Password Database this database tracks all CO/RMU personnel authorized to request fund transfers of HQ and is a crucial control element 1.3 Manages relationship between CARE USA and international banking partner (Citibank, NY) ensuring fund transfer service needs of CARE USA are met 2. CO Controller 2.1 Reviews and approves FTR prior to submission to authorized FTR approver within country. This includes: ensuring the amount of operational cash requested is reasonable, considering current cash balance and projected cash disbursements ensuring cash is due to CO from CHQ; if not, the Controller must justify request to GBAU reviewing the FTR for completeness and accuracy of banking details see Section C for associated risk 2.2 Ensures proper internal controls exist in CO related to FTR information and approval 2.3 Acts as CHQ/Treasury s primary CO contact to resolve queries related to FTR 2.4 Provides input to CHQ/Treasury on the CO s business requirements and service needs relative to international banking partner (see Chapter 6) CARE USA Treasury Manual 23

24 B. Electronic Fund Transfers 1. How Funds Move Internationally International movement of funds is highly complex as international banking standards do not exist. International fund transfers can involve as many as 4 banks, depending on the business relationships that exist and the currency of the transfer. It is critical for COs to understand the complexity and risk of international fund transfers and ensure systems exist to minimize risk. CHQ/Treasury carefully reviews the information submitted on each FTR to ensure improper routing of the funds does not result in loss or delay of funds. However, CHQ cannot validate all information. The CO must review information submitted carefully and direct any questions or concerns to treasury@care.org. Typical Flow of International Electronic Fund Transfer SENDER (CHQ/Treasury on behalf of CO) instructs Citibank to send money to a desired beneficiary in another country SENDER s BANK (Citibank, NY) sends detailed payment instruction to beneficiary s bank through SWIFT network SWIFT - Society for Worldwide Interbank Financial Telecommunication Processes the message that includes: Bank details, as provided by the sender Description of funds being transferred, as provided by the sender SWIFT provides electronic messaging services that direct financial transactions among 7,800 institutions in more than 200 countries ( INTERMEDIARY BANK(S) (sometimes called correspondent banks) are required for international transfers when the sending bank does not have a relationship with the beneficiary bank. It is common to use one or more intermediary banks to transfer funds BENEFICIARY BANK (CO s bank or 3 rd party s bank) credits the amount to the beneficiary s account, according to the instructions BENEFICIARY (CO or 3 rd party) Receives credit and details for the fund transfer CARE USA Treasury Manual 24

25 2. Fund Transfer Requests Policies and Procedures A B C D E CO sends the FTR form to CHQ/Treasury CHQ/Treasury confirms receipt of the FTR CHQ approves FTR CHQ disburses funds (releases payment) CO / external beneficiary receives funds One business day Four business days Receipt of funds varies. See additional information on next page regarding transfers outside U.S. Figure 5 - CHQ/Treasury service commitment for processing electronic Fund Transfer Requests 2.1. When can the CO expect funds to be sent? A->B CO sends request -> CHQ/Treasury confirms receipt Effective 1 May 2006, all FTRs must be password-protected and sent to treasury@care.org. CHQ/Treasury will: Verify the password Review the current Cash Transfer Authorization Report that provides information on the CO s net intracompany balance 1 and Send confirmation receipt to the CO within one business day. If the net intracompany balance 1 does not warrant transfer, the request will be forwarded to the Global Business Analysis Unit (GBAU) for further review and approval. A->D Sending FTR form -> disbursement of funds CHQ/Treasury commits to disburse payments within four business days of receipt for all fund transfers that can be approved within CHQ/Treasury. Inaccurate or incomplete banking details will delay this commitment. 1 net intracompany balance = intracompany balance + fixed assets national staff severance CARE USA Treasury Manual 25

26 CHQ/Treasury Criteria for Approving FTR 1. Password is valid 2. Amount requested to be transferred is within the CO/RMU s net intracompany balance. 3. FTR banking details complete and reasonably accurate Fund Transfer from CHQ Citibank, NY account Fund Transfer from CO/RMU s Citibank, NY account Figure 6 - CHQ/Treasury criteria for approving FTR D->E Disbursement of funds -> Receipt of funds Fund transfers within the U.S. ACH (Automated Clearing House) is CARE USA s preferred payment method within the U.S. due to significantly lower transfer fees. ACH payments settle one business day after disbursement. Electronic Fund Transfer within the U.S. ACH Wire $0.10 bank charge per transfer $7.50 bank charge per transfer Figure 7 Cost Associated with Electronic Fund Transfer (via Citibank) Fund transfers outside the U.S. There are many factors that can contribute to the amount of time it will take funds to reach the beneficiary bank account. Some electronic fund transfers require the use of one, two or even three intermediary banks. It means more time to reach the beneficiary bank account and more layers of bank fees that each intermediary bank can charge. Transferring funds in currency other than the U.S. dollar adds two business days to the process. This is the time required to purchase the foreign currency. CARE USA Treasury Manual 26

27 2.2. Who are authorized to request CHQ/Treasury to transfer funds on behalf of the CO/RMU? Fund Transfer to Position CO Citibank, NY CO CO Beneficiaries in-country in-country external to default bank 2 non-default bank CARE USA Regional Director Unlimited Unlimited Unlimited Unlimited Country Director ACD Program ACD Program Support Designate (CD s or RMU s) Unlimited Unlimited Unlimited Unlimited Up to $500K Up to $500K Up to $500K Up to $500K per transfer per transfer per transfer 3 per transfer Up to $500K Up to $500K Up to $500K Up to $500K per transfer per transfer 3 per transfer per transfer Unlimited Unlimited Unlimited Unlimited Figure 8 FTR Authority Limits per Position 2.3. How can CHQ/Treasury establish the validity of each FTR? To eliminate duplication of reviews and layering controls, CHQ/Treasury will no longer request supporting documentation nor require the CD to be copied on all transfer requests. Instead, CHQ/Treasury will be relying on unique passwords that are provided to authorized requestors. Every transfer requested of CHQ/Treasury must undergo the same level of review and approval as if the CO was disbursing the money. CHQ is relying on strong internal controls by each CO/RMU. It is the responsibility of CO/RMU management to ensure controls are in place and their unique passwords remain confidential. 2 Default bank account is the primary in-country bank account that the CO identified to be the recipient of fund transfers from CHQ. 3 The CD is required to be copied on fund transfers to a non-default, in-country bank account. CARE USA Treasury Manual 27

28 2.4. Tell us more about the CHQ issued password Effective 1 May 2006, all HQ fund transfer requests from the CO or RMU MUST be PASSWORD PROTECTED using the unique (eight) character password assigned by CHQ/Treasury to designated CO/RMU officials. This password protection ensures CHQ/Treasury that the request has been properly authorized within the CO or RMU. The password is valid for (six) months. IMPORTANT: CHQ/Treasury will only process FTRs authorized by one of the personnel listed on Figure 8. Please refer to Figure 9 on how to password protect the FTR forms What will happen if the CO/RMU has an emergency request to transfer funds? Good cash planning/forecasting is critical to ensure that funds are available for programming use when needed. CHQ/Treasury requires COs to send their FTR at least four business days before the CO s expected disbursement date. CHQ/Treasury recognizes that exceptional situations occur that will require a faster than the norm turnaround time. CHQ/Treasury will try to accommodate such request to the extent possible. 3. What is expected of the Controller (or equivalent function) from preparation of the FTR to receipt of funds? Controller s review and approval of all FTRs prior to CO/RMU authorization All FTRs should be reviewed and approved by the Controller. The controller should always be copied on transfer requests. The importance of accurate and complete banking details cannot be underestimated. Inaccurate or incomplete banking information can cause the funds to be delayed, misrouted, or lost. CARE USA Treasury Manual 28

29 Controller s review and approval of all FTRs prior to CO/RMU authorization (cont d) It is the vendor s responsibility to provide accurate banking details but it is the Controller s responsibility to ensure the vendor is aware of their responsibility. Understanding this risk and ensuring systems are in place to provide correct details will minimize CARE s exposure. 4. What is expected of the CO/RMU personnel authorized to request CHQ/Treasury to transfer funds? a. Activate password CHQ/Treasury informs authorized personnel of his/her password by sending Treasury Form T301 in a sealed envelope via pouch. The password will not be sent via for security reasons but the personnel will be notified it is coming. When the password is received unaltered, the password must be activated by confirming receipt at treasury@care.org. CHQ/Treasury will confirm activation. b. Safeguarding Strictly protect the password by treating it as PIN # to password one s own personal bank account. Do not share the password under any circumstances. c. What to do with Report to CHQ/Treasury as soon as the authorizer compromised password detects or suspects that the integrity of password has been compromised. CHQ/Treasury will invalidate the current password and issue a new password immediately. d. Delegating someone to RMU or the CD can temporarily designate someone to act on behalf of the CD approve FTRs. RMU/CD must provide CHQ/Treasury with the name of the person, the role they are acting (CD or ACD) and the start/end date. CHQ/Treasury will confirm request and immediately issue password. This option eliminates the need to ever share passwords. Final review of FTR prior to authorizing and submitting to CHQ High-level review of FTR prior to authorizing Although the Controller will review all information and supporting documentation pertaining to the FTR, the authorizer should do a final check of information, focusing on name of beneficiary, the amount, and justification for transfer. CARE USA Treasury Manual 29

30 5. How to Password Protect the FTR a. Open the file b. On the Tools menu, click Options, and then click Security c. Type the 8-character password that CHQ/Treasury assigned under the data field, password to open d. Click Ok. Figure 9 - How to Password Protect the FTR 6. FTR Reference Number Assignment Effective 1 May 2006, all COs must assign a unique 12-character alpha-numeric reference number on all FTR funds submitted to CHQ/Treasury. The reference numbering system allows both CHQ and CO to easily track and follow up on pending fund transfer request and eliminate confusion when processing multiple FTRs. How to Assign FTR Number a. Type the CO s 3 digit ISO code, followed by: EX for external transfers outside CARE USA IN for internal transfers within CARE USA b. Type FY followed by the last 2 digits of the fiscal year c. Type a 3 digit number, starting with 001 for the first FTR sent each fiscal year Use hyphen (-) as separator for items 1 to 3. To illustrate: CARE Rwanda first requested $100K fund transfer from the CO s Citibank, NY account to the CO s default bank account in July 07. RWA-IN-FY CARE Rwanda then requested $150K fund transfer from CHQ account to the CO s default bank account in August 07 RWA-IN-FY CARE Rwanda then requested $15K fund transfer from the CO s Citibank, NY account to vendor 1. RWA-EX-FY Figure 10 How to Assign FTR Number CARE USA Treasury Manual 30

31 C. Risks Associated with Fund Transfers and How to Reduce Unlike checks and other forms of electronic transfer, a wire transfer cannot be undone, recalled, or voided. Once transmitted, the funds can only be returned if the recipient chooses to do so. As a result, there is high risk associated with this payment type. Two general categories of risk need to be understood, considered, and mitigated relating to fund transfers: fraud and operating risk. 1. Fraud What is it? Fraud occurs when funds are diverted for inappropriate use or false transactions are introduced. The fraudulent party may be internal (CARE employee) or external (bank employee, vendor); it may also be an unrelated third party who intercepts the transaction or obtains banking details and creates a fraudulent transaction. How to mitigate? The CO needs to ensure strong systems are in place to reduce opportunity for fraud. This includes ensuring that the FTR authorizer does not have access to posting in the financial system. The CO must also ensure bank access is current (electronic bank platform access and bank signatory.) Since this list is not comprehensive, the CO should discuss with its local banks whether tools or services exist that can help the CO manage fraud. Performing and reviewing bank reconciliations and addressing reconciling items TIMELY are critical elements of detecting fraud. 2. Operating Risk What is it? Operating risk is the risk of loss resulting from inadequate or failed internal processes or systems. Operating risk can arise if banking details provided are unintentionally incorrect or incomplete. CARE USA Treasury Manual 31

32 How to Mitigate? Always provide accurate and complete banking details for CO bank accounts and regularly discuss with the receiving bank which intermediary bank should be used - noting the currency of the transfer and the bank it is coming from (Citibank, NY in the case of transfers from CHQ.) CHQ/Treasury independently verifies banking details against the global bank account database. Assure that 3 rd parties are aware of their responsibility to provide accurate and complete banking details, to include required intermediary banks. Neither the CO nor CHQ/Treasury can validate 3 rd party beneficiary banking information. It is the Controller s responsibility to ensure the banking information provided by the 3 rd party is properly included in the FTR submitted to CHQ/Treasury (see Roles and Responsibilities 2.2.) CHQ/Treasury has implemented controls to reduce organizational risk of electronic fund transfers. However, this does not reduce risk in the CO. Controllers must ensure proper controls are in place in-country. D. Fund Transfer Forms & Instructions When to Use, Which One Effective 1 May 2006, all fund transfer requests of the CO/RMU must be sent to CHQ/Treasury using newly-developed Treasury Forms T101 and T The Forms Treasury Form T101 This form must be used for all INTERNAL fund transfers between CARE USA CHQ and CARE USA COs. This also includes transfer requests between COs and/or RMUs of CARE USA. Treasury Form T102 This form must be used for all EXTERNAL fund transfers, such as: another CI member or non CARE USA CO partner organizations consultants other vendors for procurement of goods and services CARE USA Treasury Manual 32

33 Form Guidance Each form provides 2 quick ways of guiding the CO to complete: One page Instructions on How to Complete Fund Transfer Request with specific instructions for data field 1 key will provide quick with instructions for each data field as demonstrated below Figure 11 How F1 Helps on Treasury Forms T101 & T102 Please contact treasury@care.org if additional assistance is needed. CARE USA Treasury Manual 33

34 2. Internal and External Fund Transfers Forms Why the Distinction? INTERNAL TRANSFER Treasury Form T101 EXTERNAL TRANSFER Treasury Form T102 a. Purpose Fund transfer to the CO s Fund transfer to bank own bank account, other accounts outside CARE CARE USA-lead CO, and USA. This includes: CHQ other CI Members non CARE USA COs These are all internal sub-recipients transfers of the legal vendors entity of CARE USA consultants b. Beneficiary CHQ/Treasury will CHQ/Treasury relies on information validate to established information provided by the CitiDirect templates and CO as beneficiary question any variances information cannot be validated Requires explanation if request is to non-default bank account c. Location of Within the U.S. or in- Anywhere in the world beneficiary s bank country additional data fields are account required for bank transfers to Europe or Canada d. Other critical CO must confirm clearing information from Bridger software of required beneficiary, beneficiary s bank and intermediary banks for anti-terrorism compliance Figure 12 Internal vs. External Transfer Forms CARE USA Treasury Manual 34

35 To: Fund Transfer Request - Form #T101 FOR INTERNAL FUND TRANSFERS treasury@care.org 1* FTR # 2* Date 1 for quick For quick help, please put the cursor on the data field, and click F1. * required field 3* FTR authorized by 3a* Name 3b* Position Please Select 4* FTR reviewed & approved by Controller 4a* Name 4b* Date 5* FTR prepared by 5a* Name 5b* Position I. FUND TRANSFER DETAILS 6* Requested disbursement date by CHQ 7* Expected receipt date 8* Transfer in US$? Yes No If Yes, amount in figures 9 and in words 10 For non-us$ transfer, please select one of the following: 10a the currency and amount of non-us$ funds to be transferred 10b the US$ equivalent of funds to be transferred 11 Type amount per 10a or 10b in words 12 State reason for requiring funds to be transferred in currency other than US$ 13 * Fund transfer from Bank Acct Please Select 14* to Bank Acct Please Select 15 State reason/s why funds will be transferred to a non-default bank account. II. BANKING DETAILS A. Beneficiary Details 16 * Beneficiary Account Name 17 * Beneficiary Account # B. Beneficiary Bank Details 19 * Beneficiary Bank Name 20 Branch 18 For further credit to 18a Account Name 18b Account # 21 ABA / Routing # 22 SWIFT Code C. Intermediary Bank Details (Please provide as applicable) Intermediary Bank # 1 Intermediary Bank # 2 23 Intermediary Bank Name 24 Intermediary Bank Account # 25 CHIPS or SWIFT Code 26 Comments: To be completed by CHQ/Treasury 27 Transfer Method Please Select 28 book transfer 29 Actual Disbursement Date FOR FOREIGN CURRENCY FUND TRANSFERS ONLY 31 Amount transferred (in US$) 30 Estimated Receipt Date (non US$ transaction only) 32 Amount & currency transferred exchange rate 34 Payment Information 35 Citi direct template 34a Entered by 35a Current template used? Yes No 34b Approved by 35b Create/Update template by 34c Released by 35c New template approved by 36 Payment confirmation receipt sent by 37 Date sent 38 Comments

36 Instructions on How to Complete Fund Transfer Request - Form #T101 * required field C/USA Treasury Contact Info treasury@care.org fax # For Quick Help on how to complete the Form telephone # Elias Amin: Elias Amin (CARE HQ Finance) please put the cursor on the data field and click on 1 VOIP Lester Mendiola (HQ Wire Transfer) 1* Fund Transfer Request Numbering Convention Type the 3 digit ISO code followed by "IN" which stands for INTERNAL TRANSFERS (within CARE USA), FY (for the Fiscal Year), and 3 digit number sequentially assigned. Use hyphen (-) as separator. To illustrate: RWA-IN-FY * Date - Type the date of the request using the format, dd-mmm-yy e.g., 17 May 06, 18 Oct 06 3* Payment request authorized by 3a Name: Type the name of the personnel authorizing payment via electronic fund. 3b Position: Select the position of the personnel authorizing electronic fund transfer by CHQ. 4* Payment details reviewed and approved by Controller 4a Name: Contents of the form should be reviewed and approved by the Controller. Use this field to type the NAME of the Controller (or equivalent function in the CO/RMU). 4b Date: This field should indicate the date when the Controller approved the contents of the form. Type the date using the format, dd-mmm-yy (as noted in item #2) 5* FTR Form prepared by 5a Name: Type the name of the person who prepared the form. 5b Position: Type the position of the person who prepared the FTR Form. 6* Requested disbursement date by CHQ Type the date CHQ is expected to disburse (release) the funds. This might vary from the RECEIPT DATE based on the number of intermediary banks required. 7* Expected receipt date by CO - Type the date the funds are expected to be received (credited to the BENEFICIARY BANK ACCOUNT). This information will help CHQ/Treasury to understand how long it takes to reach the beneficiary bank account from disbursement. Note: Non-US$ transactions require 2 additional business days to settle. 8* Payment in US$? Click on either Yes No If Yes, type US$ amount in figures. 9 Type amount in words - if Yes to item 8, type US$ amount in words. 10 Non-US$ payment Select 10a or 10b to indicate to CHQ the amount and currency of funds to transfer. 11 Amount in words Type amount per10a or 10b in words. 12 State reason for requiring funds to be transferred in currency other than US$. 13* Fund transfer from Bank Acct Select among 2 choices where funds will be transferred FROM: 1. CHQ's Citibank, NY account (transaction to be recorded both in CHQ and CO via intracompany accounting) 2. CO/RMU's own Citibank, NY account 14* Fund transfer to Bank Acct Select among 3 choices where funds will be transferred TO: 1. Citibank, NY account 2. In-country default bank account for incoming fund transfers 3. In-country non-default bank account (this is exceptional & requires explanation in field 15) 15 Non-default bank account This field must be completed if fund transfer will be made to a non-default bank account. 16* Beneficiary Account Name - Type the legal name of the beneficiary, as the bank has on record. This is very important. Inaccurate beneficiary name can cause the funds to be returned, misrouted or lost. 17* Beneficiary Account # - Type the beneficiary bank account #. This is very important. Inaccurate beneficiary account # can cause the funds to be returned, misrouted or lost. CHQ/Treasury will validate submitted information against the bank database maintained by CHQ. 18 For further credit to - This section is used when per local bank's instruction; the BENEFICIARY is the local bank itself. The transfer is then further credited. CHQ/Treasury authorization is required for this arrangement. 18a Account Name Type bank account name where the funds will be further credited. 18b Account # - Type bank account # where the funds will be further credited. 19* Beneficiary Bank Name - Type the name of the bank where the funds will be transferred. 20 Branch - Indicate the branch location where the beneficiary maintains the bank account. 21 ABA / Bank Routing # - Applies to fund transfers within the U.S. only; it does not apply to fund transfers outside the U.S. ABA/Routing # should always have nine (9) digits. ABA = American Banking Association 22 SWIFT Code # - Type the SWIFT Code of the beneficiary bank. SWIFT code is required for ALL international transfers. Obtain SWIFT code by checking with the local bank and verifying it on SWIFT code # is an alpha numeric code with 8 or 11 characters. SWIFT = Society for Worldwide Interbank Financial Telecommunication 23 Intermediary Bank Name Type the intermediary bank name. Intermediary banks (sometimes called correspondent banks) are required for international transfers when the sending bank does not have a relationship with the receiving bank. This is very common. Please inquire with the local bank if they have a direct relationship with Citibank. If not, please ask for guidance on what they consider to be the best intermediary bank to use for the currency of the international fund transfer. Citibank is one of the largest intermediary banks in the world and has direct relationship with over 50% of our default bank accounts worldwide. This reduces fees (no intermediary bank) and expedites the transfer. 24 Intermediary Bank Account # - Type the intermediary bank s account #. 25 CHIPS or SWIFT Code # - Type the CHIPS or SWIFT Code. CHIPS clears 95% of all international US$ payments. Contact your local bank to get the CHIPS code for the intermediary bank. It can be verified at CHIPS is a 4 digit numeric code. CHIPS = Clearing House Inter-Bank Payment System Note: If CHIPS is not readily available, the CO should provide the SWIFT Code for the intermediary bank. See item 22 for more info on SWIFT. 26 Comments - Type any additional comments To be completed by CHQ/Treasury 27 Payment Method Please select the actual payment method used. 28 Book transfer Click on the box if this is a book transfer. 29 Actual Disbursement Date - This is the date when the funds were DEBITED (taken out) from the source bank account. 30 Estimated Receipt Date in CO Bank Account (non US$ transaction only) - This is the date when CHQ/Treasury expects the funds to be CREDITED to the beneficiary's account. Note: The date noted is based on Treasury's 'best estimate' only and will vary based on the number of intermediary banks required for this transfer. 31 Amount transferred (in US$) - Indicate the US$ amount transferred. 32 Amount transferred - Type the non-us$ CURRENCY and the AMOUNT of funds transferred. Exchange rate - Type the actual exchange rate applied to the fund transfer. 34 Payment Information Type the initials of CHQ/Treasury staff who entered, approved and released payment information within CitiDirect system. 35 CitiDirect template Click on the appropriate box if an existing template was used to process payment. Also indicate if the fund transfer required the creation/updating of template within CitiDirect. 36 Payment confirmation receipt sent to CO by - Type the initials of CHQ/Treasury staff who sent the confirmation receipt. 37 Date sent - Type the date when the confirmation receipt was sent. Type the date using the format, dd-mmm-yy. e.g., 17 May 06, 18 Oct Comments CHQ/Treasury to type any additional comments regarding this FTR.

37 Fund Transfer Request - Form #T102 FOR EXTERNAL FUND TRANSFERS 1 for quick For quick help, please put the cursor on the data field, and click F1. * required field To: treasury@care.org 1* FTR # 2* Date 3* FTR authorized by 3a* Name 3b* Position Please Select 4* FTR reviewed & approved by Controller 4a* Name 4b* Date 5* FTR prepared by I. FUND TRANSFER DETAILS 6* Requested disbursement date by CHQ 5a* Name 5b* Position 7 Expected receipt date 8* Payment in US$? Yes No If Yes, amount in figures 9 and in words 10 For non-us$ payment, please select one of the following: 10a the currency and amount of non-us$ funds to be transferred 10b the US$ equivalent of funds to be transferred 11 Type amount per 10a or 10b in words 12 State reason for requiring funds to be transferred in currency other than US$ 13* Fund transfer from Bank Acct Please Select 14* to Please Select 15 Provide description for this payment Please Select If Other, please explain. Payment Ref # 16 Yes, Name/s have been checked against Bridger software II. BANKING DETAILS A. Beneficiary Details 17* Beneficiary Account Name 19 For further credit to 19a Account Name 18* Beneficiary Account # 19b Account # B. Beneficiary Bank Details 23 Transfers within U.S. ABA / Routing # 20* Beneficiary Bank Name 21* Branch 22* Beneficiary Bank Address 24 Transfers outside U.S 24a SWIFT, BIC or CHIPS code 24b IBAN # (EU) 24c Sort Code (UK) 24d Transit Code (Canada) 24e Other C. Intermediary Bank Details (Please provide as applicable) Intermediary Bank # 1 Intermediary Bank # 2 25 Intermediary Bank Name 26 Intermediary Bank Account # 27 CHIPS or SWIFT Code 28 Comments: To be completed by CHQ/Treasury 29 Payment Method Please Select FOR FOREIGN CURRENCY FUND TRANSFERS ONLY 32 Estimated Receipt Date 30 Actual Disbursement Date 31 Amount transferred (in US$) 33 Amount & currency transferred exchange rate 36 Payment Information 36 Citi direct template 35a Entered by 36a Current template used? Yes No 35b Approved by 36b Create/Update template by 35c Released by 36c New template approved by 37 Payment confirmation receipt sent by 38 Date sent 39 Comments

38 Instructions on How to Complete Fund Transfer Request - Form #T102 * required field C/USA Treasury Contact Info treasury@care.org fax # For Quick Help on how to complete the Form telephone # Elias Amin: Elias Amin (CARE HQ Finance) please put the cursor on the data field and click on 1 VOIP Lester Mendiola (HQ Wire Transfer) 1* Fund Transfer Request Numbering Convention Type the 3 digit ISO code followed by "EX" which stands for EXTERNAL TRANSFERS (outside CARE USA), FY (for the Fiscal Year), and 3 digit number sequentially assigned. Use hyphen (-) as separator. To illustrate: RWA-EX-FY * Date - Type the date of the request using the format, dd-mmm-yy e.g., 17 May 06, 18 Oct 06 3* Payment request authorized by 3a Name: Type the name of the personnel authorizing payment via electronic fund transfer. 3b Position: Select the position of the personnel authorizing electronic fund transfer by CHQ. 4* Payment details reviewed and approved by Controller 4a Name: Contents of the form should be reviewed and approved by the Controller. Use this field to type the NAME of the Controller (or equivalent function in the CO/RMU). 4b Date: Contents of the form should be reviewed and approved by the Controller. Type the DATE the Controller (or equivalent function in the CO/RMU) reviewed and approved the FTR. 5* FTR Form prepared by 5a Name: Type the name of the person who prepared the form. 5b Position: Type the position of the person who prepared the form. 6* Requested disbursement date by CHQ Type the date the CO requested CHQ to disburse (release) the funds. This might vary from the RECEIPT DATE based on the number of intermediary banks required. 7 Expected receipt date by CO - Type the date the CO expects payment to be credited to the BENEFICIARY's BANK ACCOUNT. Note: Non-US$ transactions require 2 additional business days to settle. 8* Payment in US$? Click on either Yes No If Yes, type US$ amount in figures. 9 Type amount in words - Type the US$ amount in WORDS. $100, should read as ONE HUNDRED THOUSAND DOLLARS. 10 Non-US$ payment Select 10a or 10b to indicate to CHQ the amount and currency of funds to transfer. 10a Type the currency and amount of non-us$ funds to be transferred. e.g., Euro 100, b Type the US$ equivalent of funds to be transferred. e.g., US$ 100, worth of Euro 11 Amount in words Type amount per10a or 10b in words. Example 1: Euro 100, = ONE HUNDRED THOUSAND and 50/100 EURO Example 2: US$100, worth of Euro = ONE HUNDRED THOUSAND DOLLARS WORTH OF EURO 12 State reason for requiring funds to be transferred in currency other than US$. 13* Fund transfer from Bank Acct Select among 2 choices where funds will be transferred FROM: 1. CHQ's Citibank, NY account (transaction to be recorded both in CHQ and CO via intracompany accounting) 2. CO/RMU's own Citibank, NY account 14* Fund transfer to Select among choices (see items in drop-down list) where funds will be transferred TO: 15 Provide description for this payment Select among choices (see items in drop-down list) for brief description / explanation of payment. 15a Provide explanation for payment if OTHER was selected. 15b Provide ONE of the following payment references to assist the beneficiary in identifying receipt. - Vendor Invoice # OR Purchase Order # - Consulting Agreement # - Subagreement # - Other (e.g., Fund Code, Project #) Data field is limited to 15 characters (for ACH payments) 16* Yes, Name/s have been checked against Bridger software Click on the box to certify that the beneficiary name, beneficiary bank name, and any known intermediary bank have been verified / checked against the Bridger software/epls list pursuant to CARE's anti-terrorism policies. 17* Beneficiary Account Name - Type the legal name of the beneficiary, as the bank has on record. This is very important. Inaccurate beneficiary name can cause the funds to be returned, misrouted or lost. 18* Beneficiary Account # - Type the beneficiary bank account number. As in the case of beneficiary bank account name, this is very important. Inaccurate beneficiary number can cause the funds to be returned, misrouted or lost. 19 For further credit to - This field is exceptional and should only be used per written request of the beneficiary. Further documentation may be requested by CHQ/Treasury. 19a Account Name Type bank account name where the funds will be further credited. 20* 21* 22* 19b Account # - Type bank account # where the funds will be further credited. Beneficiary Bank Name - Type the name of the bank where the funds will be transferred to. Branch - Indicate the BRANCH location where the beneficiary maintains the bank account. Beneficiary Bank Address -Indicate the COMPLETE ADDRESS, INCLUDING COUNTRY where the beneficiary maintains the bank account. 23 Transfers within U.S. - ABA / Bank Routing # This data field is mandatory when transferring funds within the U.S. ACH is CARE's preferred payment method within the U.S. due to significantly lower transfer fees. Please confirm with beneficiary that the ABA/routing # provided is ACH eligible. 24 Transfers outside U.S - This section applies to fund transfers outside the U.S. only. 24a CHIPS, SWIFT, or BIC code of the beneficiary bank This data field is mandatory. The beneficiary must provide at least 1 of these 3 codes CHIPS clears 95% of all international US$ payments. It can be verified at CHIPS is a 4 digit numeric code. CHIPS = Clearing House Inter-Bank Payment System Verify SWIFT code at SWIFT code is an alpha numeric code with 8 or 11 characters. SWIFT = Society for Worldwide Interbank Financial Telecommunication BIC is only used for banks that are not on the SWIFT network. BIC = Bank Identifier Code 24b IBAN # (EU) -IBAN is used by banks in certain EU countries for int'l fund transfers. It incorporates the destination country code, bank sort code and the account #. IBAN # can be verified at: IBAN = International Bank Account Number 24c Sort Code (UK) Sort code is the domestic routing code for the United Kingdom. This data field is required for transfers to the U.K. U.K. Sort Code = 6 DIGIT Code 24d Transit Code (Canada) Transit # is the domestic routing code for Canada. This data field is required for transfers to Canada. Canada Transit # = 9 DIGIT Transit Number 24e Other For transfers to countries other than those noted above, please use this data field to indicate the type of bank code and the #. Example: Japan's 7 digit Zengin Code as Japan: Zengin Intermediary Bank Name - Type the intermediary bank name. Intermediary Bank Account # - Type the intermediary bank s account #. Intermediary banks (sometimes called correspondent banks) are required for international transfers when the sending bank does not have a relationship with the receiving bank. This is very common. It is the beneficiary s responsibility to provide this. 27 CHIPS or SWIFT Code # - Type the CHIPS or SWIFT Code. Beneficiary should provide CARE with CHIPS or SWIFT code for each intermediary bank used. Note: If CHIPS is not readily available, the CO should provide the SWIFT Code for the intermediary bank. See item 24 for more info on SWIFT. 28 Comments - Type any additional comments To be completed by CHQ/Treasury

39 Treasury Form T301 EFFECTIVE DATE dd-mmmm-yyyy NAME EXPIRATION DATE dd-mmmm-yyyy PASSWORD xxxxxxxxxxxx xxxxxxxx Effective 1 May 2006, all HQ fund transfer requests from the CO or RMU MUST be PASSWORD PROTECTED using the unique character password assigned by CHQ to designated CO/RMU officials. This password protection ensures CHQ/Treasury that the request has been properly authorized within the CO or RMU. Our new policy identifies you as one of the CO/RMU officials who can authorize electronic fund transfers to be made by CHQ on behalf of CARE. Your password is valid for months. Please keep this document in a secured place and do not share your password. Please refer to ALMIS 5936 for additional information on changes to the fund transfer request policies and procedures. Please send an to treasury@care.org to confirm receipt of this document and enable us to activate your password as soon as possible. If you misplaced your password or suspect its integrity has been compromised, please notify treasury@care.org immediately. Upon receipt of the notification, CHQ/Treasury will invalidate your password; it cannot be reactivated but a new password will be issued immediately. Please write to treasury@care.org or call Elias Amin ( ) if you have questions or require additional clarification/information. CARE USA Treasury Manual 39

40 E. Default Bank Account What is It and Why is It Important? CHQ/Treasury created the CARE USA Global Bank Account Database which contains important information about all bank accounts of CARE USA. The database defines the default bank account for each CO. Default bank account is the primary in-country bank account that the CO identified to be the recipient of fund transfers from CHQ. HQ/Treasury will transfer CO operational funds using established CitiDirect templates that agree with bank details for the default bank account. This reduces the chance of error from incorrect/incomplete bank details or keying errors. F. Glossary of Key International Banking Terms 1. What is a SWIFT code? Society for Worldwide Interbank Financial Telecommunication Processes the message that allows the transfer of funds between banks Most international monetary transactions are sent via the SWIFT network Must always contain either 8 or 11 alphanumeric characters The first 4 characters identify the bank name The second 4 characters identify the geographical location of the head office The remaining 3 character suffix will identify the geographic location of the sub branch SWIFT codes can be verified at Example: Barclays Bank Plc, London, UK SWIFT Code BARCGB22 BARC GB 22 Bank Name: Barclays Country Code Head Office Location Code (London) 2. What is a Domestic Routing Code? It is used to identify a particular bank and branch within specific countries. CARE USA Treasury Manual 40

41 Examples: Canada France Germany Italy United Kingdom USA 9 digit Transit Number 5 digit code followed by a 5 digit guichet 8 digit BLZ 5 digit ABI followed by a 5 digit CAB 6 digit sort code 9 digit ABA number also referred to as a Routing Code 3. What is an IBAN number? International Bank Account Number Used by bank in European Union countries for international fund transfers Incorporates the destination country code, bank sort code (also known as the domestic routing code) and the account number IBAN numbers can be verified on CARE USA Treasury Manual 41

42 Chapter 3 ANTITERRORISM COMPLIANCE Table of Contents A. CARE USA s Antiterrorism Policy, relative to Treasury Management B. Risks Associated with Non-Compliance C. List Checking D. Questions? Who to Contact in CHQ CARE USA Treasury Manual 42

43 A. CARE USA s Antiterrorism Policy, relative to Treasury Management Highlights of CARE USA s antiterrorism policy per ALMIS #5688 are as follows: CARE USA will not provide support of any kind to a person or entity that CARE USA knows or has reason to know advocates terrorism or engages in terrorist activity. CARE USA shall comply with all applicable laws and regulations that address terrorism and terrorist activity. It is the duty of every CARE USA staff member (in Atlanta, within COs & RMUs) to understand and follow this policy. Please refer to the following for more detailed information on CARE s antiterrorism policies and procedures: 1. USAID AAPD antiterrorism certification 2. Antiterrorism procedures memo, issued 3 June 2004 and revised 21 October /Antiterrorism-Procedure-Memo-Rev% doc 3. CARE USA Internal Audit Department Antiterrorism Internal Control Questionnaire 8/Antiterrorism-IAD%20ICQ%20Antiterrorism-Final.doc 4. What is Bridger and why should I care? 8/What%20is%20Bridger%20and%20Why%20Should%20You%20Care.doc B. Risks Associated with Non-Compliance CARE USA is a legal entity registered in the United States and is made up of CHQ and each of its COs and RMUs. Each part of CARE USA must comply with this policy. This is not limited to U.S. funding but applies to all transactions of CARE USA. Compliance is especially critical to Treasury Management as financial institutions are scrutinized by government enforcement agencies as potential shells, used by terrorists to hide and/or manage funding. CARE USA Treasury Manual 43

44 Non-compliance of this policy could result in CARE facing criminal charges, fines, the freezing of assets, loss of all public support and otherwise being ineligible to receive funding from the United States or European government(s). C. List Checking Financial institutions must be screened and comply with CARE s antiterrorism policy like any procurement vendor or 3 rd party CARE engages with. This includes sub-recipients, sub-contractors, partners, vendors, banks and employees. List checking is the principal tool that CARE uses to assure compliance with the antiterrorism policy. The United States Government and other governments and international governmental organizations (e.g., the European Union and United Nations) have published lists of persons and entities they have deemed to be terrorists. Prescreening: Before conducting any business with a new person or entity, the manager in-charge of the relationship is fully responsible for ensuring the individual or entity is screened using both of the following: Bridger list-checking website, or software Excluded Parties List System (EPLS) website, See the left top corner of the web page, Search Current Exclusions The manager shall maintain adequate records to show the date the lists were checked, and that the entity or individual did not have a positive match on either Bridger or EPLS. Any match that the CO cannot clear must be referred to the Office of General Counsel (OGC) prior to engaging. The CO Controller is responsible for ensuring that all financial institutions the CO knowingly deals with have cleared the list. Who does this include? a. banks in which the CO maintains an account b. banks the CO uses to exchange currency c. cash facilitators (hawalas) or cash agents the CO uses d. the beneficiary bank of CARE s vendor or other 3 rd party for electronic fund transfers (box 20 on Treasury Form T102) e. the intermediary bank(s) used to electronically transfer funds to a vendor or 3 rd party (box 25 on Treasury form T102) f. all of the above CARE USA Treasury Manual 44

45 The correct answer is (f), all of the above. Although items (a) and (b), including (c) in places where banks do not exist, are the financial institutions that first come to mind, items (d) and (e) are equally important. They are considered financial institutions CARE knowingly deals with each time an electronic fund transfer is made. Semi-annual list check: Per CARE USA anti-terrorism policy, CHQ conducts a semi-annual list check of all current vendors, sub-recipients, subcontractors, and employees. It is the ACD Program Support s (or equivalent position s) responsibility to provide the lists of these entities and individuals to Bijal Patel, Senior Auditor for Compliance for screening. If the ACD Program Support (or equivalent position) does not exist, the responsibility for the semi-annual submission is the CO Controllers. Specific to financial institutions, the list should include items (a) to (c) above. Items (d) and (e) should not be submitted to CHQ but should be checked by the CO each time an electronic payment is requested. D. Questions? Who to contact in CHQ? Questions about the above should be directed to your supervisor, CARE USA's Office of General Counsel, or Internal Audit Department in Atlanta. Eric Johnson Associate General Counsel and Compliance Officer Leslie Shad Associate General Counsel ejohnson@care.org telephone: shad@care.org telephone: Theresa Enriquez Director, Internal Audit enriquez@care.org telephone: Noel Asis Manager, Internal Audit asis@care.org telephone: Bijal Patel Senior Auditor for Compliance bpatel@care.org telephone: CARE USA Treasury Manual 45

46 Chapter 4 GLOBAL BANK ACCOUNT DATABASE Table of Contents A. What is the Global Bank Account Database? B. Reasons for Creating C. Contents D. Updating and Maintenance E. CO Responsibility to Certify Information CARE USA Treasury Manual 46

47 A. What is the Global Bank Account Database? CHQ/Treasury has created a CARE USA Global Bank Account Database that tracks significant information on all CARE USA financial institution accounts. This is inclusive of all accounts regardless of location, currency, activity or balance. In addition to cash accounts, this includes investment accounts with financial institutions as well. B. Reasons for Creating There are 2 main reasons for creating the database: 1. Reporting The database is the official source of information for CARE USA to comply with the U.S. Treasury Department s annual reporting requirement on all foreign bank accounts. As CARE USA COs, RMUs and CHQ are part of the same legal entity, CHQ is required to report on the financial interest and authority of all CARE USA financial accounts. 2. Internal control CARE has tightened controls around monitoring bank accounts due to inherent risks associated with managing bank accounts. Specifically, the database serves as a control mechanism that CHQ/Treasury uses to: validate bank account details when transferring funds to any CARE USA bank account. The database identifies the default bank account for each CO. If a CO requests a transfer to a non-default bank account, an explanation must be provided for the exception on Treasury Form T101 and the CD must be copied on the request monitor the nature and number of bank accounts maintained by each CO, with guidance on minimizing risks and costs ensure CO compliance with CARE USA policy: all bank accounts received CHQ approval prior to opening the account ensure all existing bank accounts are recorded in the G/L identify banks with greatest exposure for CARE and necessary tools to monitor financial stability share with external auditors, Internal Audit Department (IAD) and Global Business Analysis Unit (GBAU) to conduct audit or balance sheet reviews CARE USA Treasury Manual 47

48 C. Contents Below lists some of the data that is captured in the Global Bank Account Database, including why it is important and how the information is used: Description Country in which the bank account is held Name of financial institution Full address of the financial institution Remarks helps identify banks maintained outside the U.S primary information used to verify existence, SWIFT code, affiliation with other financial institutions, etc. very important that complete and accurate address is provided information used to validate bank routing details and for auditors sending bank confirmations Bank account # bank account # provided in every FTR are validated against this incorrect bank account # could result in funds being delayed or lost Bank account only in CARE s name or jointly owned? Month/Year the bank account was established extremely rare for CARE to have a bank account jointly owned with another entity; additional information will be required if so used to monitor compliance with CHQ approval to open new bank accounts Month/Year the bank account was closed, if applicable Figure 13 Global Bank Account Database content allows CARE to assess how long the account has existed will be reconciled to G/L CARE USA Treasury Manual 48

49 Description Type of account cash or securities Legal name of the bank account, as the bank officially has on file G/L Account # Currency in which the account is maintained Maximum USD amount maintained in the account, per calendar year Name of all bank account signatories Name of U.S. person signatories Purpose of the bank account Identifies in-country default bank account Remarks securities, for this purpose, is defined as account with financial institution that is not cash on demand; CARE is required to report on the type of account to the US Treasury Department very important to make sure the bank will credit any transfer to the correct beneficiary bank account; incorrect account name can result in delay of fund settlement used to reconcile the database with the general ledger to ensure proper recording of bank accounts and completeness of database helps CHQ understand the CO treasury functions and currency requirements this is a range; helps identify exposure to the organization and is required by the US Treasury Dept reviewed annually by CHQ/Treasury for reasonableness a U.S. person is someone with tax reporting obligation to the U.S. government (e.g., U.S. citizen, or green card holder); this is required for US Treasury Dept reporting helps CHQ understand the CO bank account needs by location and purpose This is the primary bank account the CO receives transfers from CHQ Identifies bank accounts opened in compliance with donor restrictions this will be monitored closely by CHQ, in terms of necessity and expected account closing date Figure 13 Global Bank Account Database content (continued from prior page) CARE USA Treasury Manual 49

50 D. Updating and Maintenance CHQ/Treasury updates the database as changes occur under the following conditions: Opening new bank account Changes to in-country default bank account Changes on account set-up for Citibank, NY accounts Closing an existing bank account Other relevant information CO local bank account signatory information is updated in the database annually while Citibank, NY signatories are updated as CHQ/Treasury processes change requests. E. CO Responsibility to Certify Information As described above, CARE USA, a U.S. legal entity, is required to submit a report to U.S. Treasury Department on all foreign bank accounts. The reporting period for this U.S. Treasury Department requirement is January 1 to December 31 (calendar year.) The CO can expect and should plan for the following each year: CHQ/TREASURY sends the CO bank account information captured in the database for the reporting period (the prior calendar year.) Any account that existed during any part of the year must be included for reporting purposes. CO Controller (or equivalent position) must certify accuracy of information and/or provide changes to CHQ/Treasury by this date. 15 January 31 January Figure 14 Timing of Controller certification of Global Bank Account Database CARE USA Treasury Manual 50

51 Chapter 5 CASH FORECASTING Table of Contents Introduction A. Importance of Strong Cash Forecasting (at CO) B. CO Cash Forecasting and Planning Cash Needs from CHQ C. Other CARE USA Treasury Manual 51

52 Introduction Cash is the fuel that supports nearly all CO project activities, including salaries. Cash management is often overlooked in a CO unless there is an interruption or a delayed receipt. Cash forecasting is the prediction of future cash flows. This requires close coordination between Program who needs to accurately estimate their cash needs, Procurement who purchases the items, and Finance who manage cash transactions and consolidates information. Project Plan Expenditure Plan Cash Forecast Developing a strong Project Plan is the foundation of effective cash forecasting and should involve Program, Procurement, Finance, and others, as needed. The Expenditure Plan is a financial translation of the Project Plan and includes planning the finances of the project from beginning to end. This is the basis for financial reporting of the project. The Cash Forecast involves taking the expenditure plan and aligning the timing of the cash receipts and disbursements to accurately predict future cash position and needs. Cash forecasting also requires continually monitoring subsequent developments and re-aligning cash requirements with changes in project activities. Effectively doing this reduces the risks of: (1) a cash shortfall, impeding the efficiency and effectiveness of operations, or (2) loss due to excess cash in country. Cash forecasting is crucial to effective and efficient program management and organizational success. CARE USA Treasury Manual 52

53 Cash forecasting can be a source of strategic advantage if approached with discipline and supported from all levels and divisions of the organization. CHQ is committed to further exploring global forecasting and finding the best organizational approach to maximizing available cash. Future information will be forthcoming; in the meantime, we provide some basic considerations. A. Importance of Strong Cash Forecasting (at CO) Cash forecasting helps COs make informed decisions about: knowing the best time to call forward funds from CHQ/Treasury, or other donors moving excess cash to higher-interest investments such as short-term time deposit, or to CHQ to earn cost of capital reducing risk of loss of funds due to currency devaluation or bank failure At a minimum, the process of generating cash forecast should: predict the monthly cash position of the CO identify short-term cash needs and excess available cash minimize CHQ borrowing (cost of capital charges) and potential delays in project implementation Important: COs are NOT permitted to secure local bank loans or letters of credit without the direct approval of Nick Marudas, Director of Global Business Analysis. CARE USA Treasury Manual 53

54 B. CO Cash Forecasting and Planning Cash Needs from CHQ CHQ/Treasury is committed to processing fund transfer requests (FTRs) from CO/RMUs within the service commitment noted below. A B C D E CO sends the FTR form to CHQ/Treasury CHQ/Treasury confirms receipt of the FTR CHQ approves FTR CHQ disburses funds (releases payment) CO / external beneficiary receives funds One business day Four business days Receipt of funds varies. See additional information on page 26 regarding transfers outside the U.S. Figure 15 - CHQ/Treasury service commitment for processing FTRs CHQ has provided the above service commitment so the CO can plan cash activities accordingly. Transfers may occur sooner than 4 business days but the CO should plan the maximum to avoid disruption of operations. The above service commitment assumes the CO has a positive net intra-company balance (i.e., CHQ owes the CO money.) If the funds are not due to the CO, additional time should be allotted for Global Business Analysis review and approval. Please see Chapter 2 for more information. C. Other To protect the CO from local currency devaluation and loss of assets, the CO should maintain local currency assets (e.g., cash, advances, receivables) at the same level of local currency liabilities (e.g., accounts payable.) COs should also convert funds into local currency based on current needs (e.g., cash requirements for the next week or two) and minimize excess cash in country. CARE USA Treasury Manual 54

55 Chapter 6 CITIBANK ACCOUNTS Table of Contents Introduction A. Roles and Responsibilities Managing Citibank, NY Accounts 1. CHQ/Treasury 2. CO Controller B. Citibank s Services 1. On-line Access 2. Overnight Investment 3. Bank Statements 4. Bank Fees C. Account Set-up 1. Opening a New Citibank Account 2. Closing an Existing Citibank Account 3. Changing Citibank Account Services 4. Changing Citibank Signatories D. Instructions for Completing Citibank, NY Signature Card E. Citibank, NY Signature Card F. CitiDirect Hardware Requirements G. Depositing USD and Other Non-LC Checks CARE USA Treasury Manual 55

56 Introduction CARE has chosen to partner with Citibank, NY to meet various international banking needs of the organization. During FY06, CHQ/Treasury re-evaluated our global banking needs with input from many COs. We compared these needs to the service options, fees, and service quality of other international banking partners, and concluded that Citibank, NY continues to be the best current partner of choice. Note: Citibank is one of the largest international banks in the world and has direct relationships with over 50% of CO s default banks (the CO s bank to which CHQ transfers funds.) A direct relationship means no intermediary bank is required when transferring funds, resulting in faster receipt and less bank fees for each transfer. COs are not required to have a Citibank, NY account. However, many CO s choose to have such account for some of the following reasons: internationally recognized bank account is necessary for CO vendors/consultants to accept checks donor requires separate or CO specific account to deposit funds; CO prefers to have this account outside of country for stability CO facilitates many international payments through this account and it is more efficient to maintain separate account from CHQ for ease of tracking/recording The decision to maintain a Citibank, NY account is at the discretion of the CO based on the CO s unique business requirements. Please contact treasury@care.org for consultation specific to the CO s needs. Important: If the CO determines a Citibank, NY account is not necessary for disbursements and would prefer to have donor receipts transferred into CHQ s concentration account in Atlanta, it is critical that the CO: Advise the donor to clearly indicate on the transfer instructions the name of the CO (this will ensure proper I/C credit is given) Notify 52Htreasury@care.org of the expected date and amount of fund transfer so Treasury staff can ensure the transfer is properly identified Please contact 53Htreasury@care.org for banking details for incoming receipts. CARE USA Treasury Manual 56

57 A. Roles and Responsibilities Managing Citibank, NY Accounts 1. CHQ/Treasury 1.1 Manages the global relationship between CARE USA and Citibank, NY ensuring service standards are defined and met 1.2 Point of contact for opening, amending and closing bank account with Citibank, NY please see Section C for details 1.3 Negotiates fees and services on behalf of CARE USA. As of September 2006, CARE USA has over 30 bank accounts with Citibank, NY. CARE is able to negotiate bank fees and services based on the number of accounts and funds maintained by CARE USA globally. One CO that established an independent relationship with Citibank, NY contracted transaction fees five times higher than the negotiated CARE USA relationship 1.4 Service options and structure of accounts CHQ/Treasury will continue to monitor the use of the Citibank, NY accounts to ensure the services provided and structure of the accounts are best for the organization. This includes overnight investment options and methods of payment globally. CO input specific to the COs unique needs is critical (see 2.4 below) 1.5 Billing review - CHQ/Treasury will review each monthly bank fee statement at a high level to ensure the fees agree with the negotiated rates. The CO Controller should also review this statement timely and immediately bring to the attention of CHQ/Treasury any concerns or questions 2. CO Controller 2.1 Manages account balance and ensures positive bank balance (no overdraft) 2.2 Ensures timely submission to CHQ/Treasury of appropriate bank signatories for the account CARE USA Treasury Manual 57

58 2. CO Controller (continued from prior page) 2.3 Reviews bank reconciliation timely, ensuring reconciling items are identified and cleared as soon as possible. As discussed in Chapter 1, it is essential that bank account reconciliations are prepared timely and any bank errors are communicated to immediately. Many banks require notification of fraudulent or erroneous activity within 30 days or the customer (CARE) assumes all liability. 2.4 Assesses the CO s business requirements and needs for international banking services and communicates such to CHQ/Treasury. This is important as it will assist CHQ/Treasury in evaluating how well the established relationship is meeting the collective needs of the organization. B. Citibank s Services 1. On-line Access CitiDirect is Citibank s on-line bank platform. It is robust and sophisticated with incredibly strong controls. CHQ/Treasury uses this platform to manage all transfers and reporting needs for CHQ and CO Citibank, NY accounts. CO viewing access is available and enables authorized CO personnel to run inquiries or reports on account activity and balances. The access fee for CO viewing access is $5/user, per month. This will be charged to the CO each month via intra-company billing. To access this service, the CO should: 1.1 Ensure the user has the hardware requirements to update or install programs needed and download application updates. Please refer to Section F for CitiDirect Hardware Requirements. As discussed above, CitiDirect is an extremely robust system with excellent controls. Access to this will require CO IT to work directly with Citibank technical support due to each CO s unique hardware. Please contact treasury@care.org for additional information. 1.2 Notify treasury@care.org that the CO would like to activate CitiDirect access for specific personnel. The CO is responsible for notifying CHQ/Treasury immediately of any CO access that should be removed. CARE USA Treasury Manual 58

59 2. Overnight Investment Effective 01 October 2006, CARE will shift to an overnight investment vehicle called pooling. This varies from the prior investment vehicle, sweep, as the fees will be reduced significantly, and the activity will occur behind the scenes, making the bank statement easier to follow. The interest rate will remain comparable. Comments 2.1 What is the cost? Pooling service is optional and costs $50/month per account. This is a 50% saving from the sweep service. 2.2 How does it work? At the end of each business day, after all other transactions have posted, the full balance of each account enrolled for this service will be invested overnight. The investment activity will not be reflected on the bank statement (i.e., the CO will not see debit or credit transactions in the bank statement from the pooling activity.) The funds will return first thing the next business morning and will be posted to the account prior to other activity. There is very little risk involved in this type of investment and it is a common tool used to earn money on cash balances. The interest will accumulate throughout the month and on the 1 st business day of the following month, the account will be credited for the interest earned the prior month. The interest rate is based on current short-term investment interest rates. The only requirement of the CO is to record the interest earned each month. 2.3 How will the CO know if it is cost beneficial to activate this investment service? Based on prior analysis, it is estimated that if the CO maintains a minimum average daily balance of $15,000 USD in their Citibank, NY account, the interest earned will offset the $50/month pooling fee. Anything beyond this minimal balance will be net interest income for the CO. CARE USA Treasury Manual 59

60 Comments 2.4 Which option will yield higher interest income for the CO? a. excess funds kept in Citibank, NY account (with investment service activated), or b. excess funds transferred back to CHQ account to earn cost of capital? 2.5 Should the CO do anything between now and 1 October 2006 when CARE shifts to pooling? Interest rates on the investment pool vary slightly from day to day, unlike the Cost of Capital rate which is defined on a monthly basis. The CO Controller is responsible for monitoring the interest rate earned and assessing which solution is the best option based on the business requirements unique to the CO. This should be monitored over a period of time (several months minimum) before a conclusion is made as it is neither easy nor efficient for CARE to turn this service on/off within Citibank. COs utilizing the sweep service as of August 2006 will automatically be shifted over to the new pooling service. COs not utilizing the sweep service CHQ/Treasury will work with such COs to determine if the new fee structure will make this service cost/beneficial for the CO. 2.6 Who to contact? The CO should send an to CHQ/Treasury (treasury@care.org) regarding any questions or requests to enable or disable this service. 3. Bank Statements CHQ/Treasury will send an electronic copy of each Citibank, NY bank statement within five business days of the previous month end. A bank fee statement will also be sent at this time. Citibank, NY charges $20/month for every hard copy bank statement, inclusive of cancelled checks, provided. If the CO does not issue checks on their Citibank, NY account (i.e., only uses the account to receive funds and/or transfer funds electronically), CHQ/Treasury recommends turning off this service to save the monthly fee. Any CO that issues checks from the account (even one check per month) must continue to receive hardcopy bank statements with cancelled checks. Reviewing the cancelled checks is an important control. If a CO elects to turn this service off and rely on electronic bank statements generated within CitiDirect, cancelled checks cannot be accessed at a later date. There CARE USA Treasury Manual 60

61 is potential to save fees for the COs that do not issue checks, but this should be addressed cautiously and the risks clearly understood. Electronic bank statements contain identical information as hard copy bank statements that the bank prints and mails. The only difference is the timing and method of delivery. The CO will receive the electronic statement much quicker than the hardcopy statement. Additionally, electronic reporting has become very common in the banking industry and is considered an acceptable documentation of bank s records by auditors. If business requirements change, a CO determines there is need to issue checks and the CO is not currently receiving hard copy statements, it is essential to have the service turned on prior to issuing checks. To ensure nothing is caught in the middle of a cycle, the CO should request this two months in advance and actually receive a hard copy statement prior to issuing any check. 4. Bank Fees 4.1 Citibank, NY Fees There has been concern in the past that the fees of Citibank, NY are too expensive. CHQ/Treasury continues to monitor and negotiate these fees and recent comparison with other international banks indicates that our fees are competitive. The following are the standard negotiated bank charges of Citibank, NY: Fixed monthly charges Account maintenance... $80/account CitiDirect access (this is required for CHQ to have on-line access to the account and is not affiliated with CO access)....$35/account Variable monthly charges (charged if the service is active) Hardcopy of bank statement $20/account Pooling investment service. $50/account Variable charges per transaction (charged as incurred) Receipts, all electronic receipts...$6.25/transaction Disbursements Checks...$0.20/transaction Wires...$7.50/transaction ACH.. $0.10/transaction Reporting & Inquiry (CitiDirect).$1.00/report or inquiry CARE USA Treasury Manual 61

62 Additional fees can be assessed for returned transfers or transfers requiring bank repairs, etc. These are not standard and are billed as they occur. CHQ/Treasury reviews each CO s monthly fees to ensure we understand the source of the fee and can modify input as needed to minimize. Bank fees incurred when funds are transferred through intermediary banks are referred to as lifting fees. They are out of the control or knowledge of CARE and are deducted or lifted from the amount transferred, resulting in less funds received by the beneficiary. It is important for the CO to understand that Citibank s transfer fees are billed and deducted from each account monthly. Fees deducted from the amount transferred are a result of the beneficiary s intermediary or receiving bank(s) and should be absorbed by the recipient. Questions or concerns regarding bank fees should be directed to treasury@care.org. 4.2 Bank Fee Statement Citibank monthly bank fee statement will be sent by CHQ/Treasury, along with the monthly bank account statement, within the first five business days of the month The bank fee statement is always one month in arrears (i.e., the service provided for March will be debited from the account in April.) The specific date of the service fee debit is provided on the statement and is consistent each month. COs should record bank charges based on the Citibank bank fee statement sent by CHQ and any bank charges allocated via CHQ intracompany accounting CO should review this bank fee statement closely and address any issues or concerns with treasury@care.org. Citibank, NY Account Analysis Report Package: 1 Invoice Summary 2 Service Activity Summary 3 Transaction Activity Journal 4 Account Summary 5 Payment & Adjustment Journal CARE USA Treasury Manual 62

63 C. Account Set-Up 1. Opening a New Citibank Account Citibank, NY COs must submit the following documents to CHQ/Treasury: Password protected Treasury Form T201 (send to treasury@care.org) Citibank Signature Card (send with original signatures via pouch, addressed to Elias Amin, Global Cash Manager) the CO must indicate if checks need to be ordered Citibank, in-country COs who would like to open an in-country Citibank account should contact treasury@care.org to ensure that the appropriate coordination between Citibank, NY and the in-country Citibank takes place before opening the account. This coordination is very important as the CO might be able to benefit from negotiated rates and services of CARE USA. Submit the password protected Treasury Form T201 to treasury@care.org and indicate the CO is seeking Citibank, NY s assistance in opening a local Citibank account. 2. Closing an Existing Citibank Account Citibank, NY There is no standard form required to be completed to close an existing Citibank, NY account. Communication to treasury@care.org from the CD, RD or DRD explaining the reason why the CO would like to close the account is sufficient. CHQ/Treasury will contact Citibank, NY to process the request and confirm with the CO. Citibank, in-country The general policy on closing existing bank account applies to Citibank, in-country accounts. The CD, RD or DRD are authorized to close the bank account on behalf of the CO. Please follow the normal requirements of closing an account described in Chapter 1. CARE USA Treasury Manual 63

64 3. Changing Account Services Citibank, NY There is no standard form required to be completed to change an existing Citibank, NY account service (e.g., overnight investment.) Communication to from the CD, RD or DRD requesting the service change and the reason is sufficient. CHQ/Treasury will confirm receipt of the request and will notify the CO as soon as Citibank, NY confirms processing the request. Citibank, in-country Changes to current services should be addressed between the CO and the in-country Citibank office but CHQ/Treasury is available for consultation, as needed. 4. Changing Citibank Signatories Citibank, NY This section intends to clarify the process for signatory changes needed with the CO s Citibank, NY account. Board Resolution Board resolution is not required to be submitted every time the CO needs to change its bank signatories. CHQ Treasury ensures Citibank, NY has a current board resolution and is aware of who within the organization is authorized to request changes. Citibank Signature Card The CO needs to complete the Citibank Signature Card to include new signatories or change of signatories as a result of changes in staff or responsibilities. Please refer to Instructions for Completing Citibank, NY Signature Card, following. Citibank, in-country Changes to bank signatories should be addressed with the in-country Citibank office. CHQ/Treasury does not need to be copied with correspondences. CARE USA Treasury Manual 64

65 D. Instructions for Completing Citibank, NY Signature Card Legal name of the Customer should always be CARE, Inc. ADD signatories - Keep existing signatories and add additional signer(s) A. Print a blank Citibank Signature Card B. Complete the following: Section 1, mark Addition Section 2, fully complete by including the following: Original signature, name and title of authorized signer Signing limitation in the Limitations field (CARE policy requires dual signature for all checks $10,000 or more. The CO may require lower threshold for dual signature, if deemed necessary.) The CO s Citibank, NY account # in the A/C Number restriction field Section 3, please leave blank Section 4, please leave blank (to be completed by CHQ/Treasury) C. Scan the completed signature card, have the CD, RD, DRD or CD designate password protect the PDF file and send to treasury@care.org, copying the Controller (or equivalent position) D. Keep a copy for the CO s permanent file and pouch the original to the attention of Elias Amin, Global Cash Manager. CHQ/Treasury will confirm receipt as soon as the document arrives. E. CHQ/Treasury will notify the CO as soon as Citibank, NY confirms processing the request. DELETE signatories A. The Citibank Signature Card does not apply when the CO would like to delete any signer to the account. B. The CO should notify CHQ/Treasury as soon as existing signer(s) should be deleted. Notification is done by writing an to treasury@care.org indicating the name to be deleted, with brief explanation why. C. CHQ/Treasury will notify the CO as soon as Citibank, NY confirms processing the request. SUPERSEDE signatories delete all signatories and replace with signers on this list A. Print a blank Citibank Signature Card B. Complete the following: Section 1, mark Supersede Please follow all remaining procedures noted from B, Section 2 under the ADD Signatories section CARE USA Treasury Manual 65

66 Signature Card Please use additional sheets if more space is needed. 1 Legal Name of Customer New Addition Supercede The Customer Each individual named on this form (or in other written form acceptable to Citibank) is permitted to credit, debit, or otherwise operate any Account on behalf of the Customer for the purposes of any service provided by Citibank, subject to any restrictions set opposite his/her name. Details of any individual permitted to transmit instructions to Citibank by telefax, telephone, telex, or other methods are to be set out on a separate document (or in other written form acceptable to Citibank). 2 Authorized Signatures Signature Name Title Restrictions Limitations A/C Number Restrictions Signature Name Title Restrictions Limitations A/C Number Restrictions Signature Name Title Restrictions Limitations A/C Number Restrictions 2002 Citibank. All Rights Reserved. Item No. 96-CF L Version No Account Opening Kit - Signature Card in English

67 Signature Card Legal Name of Customer 2 Authorized Signatures (Continued) The Customer Signature Name Title Restrictions Limitations A/C Number Restrictions Signature Name Title Restrictions Limitations A/C Number Restrictions Signature Name Title Restrictions Limitations A/C Number Restrictions Signature Name Title Restrictions Limitations A/C Number Restrictions 2002 Citibank. All Rights Reserved. Item No. 96-CF L Version No Account Opening Kit - Signature Card in English

68 Signature Card Legal Name of Customer 3 Authorized Facsimile Signatures The Customer Signature Name Title Restrictions Limitations A/C Number Restrictions Signature Name Title Restrictions Limitations A/C Number Restrictions Signature Name Title Restrictions Limitations A/C Number Restrictions Signature Name Title Restrictions Limitations A/C Number Restrictions 2002 Citibank. All Rights Reserved. Item No. 96-CF L Version No Account Opening Kit - Signature Card in English

69 Signature Card Legal Name of Customer 4 Authorized by: The Customer Signature Signature Name Name Title Title Date Date To be completed by Citibank: Location of original document 2002 Citibank. All Rights Reserved. Item No. 96-CF L Version No Account Opening Kit - Signature Card in English

70 Connect CitiDirect Online Banking Minimum hardware and software requirements for easy installation Hardware The minimum and recommended hardware requirements to run CitiDirect Online Banking are listed below. Minimum: Requirements listed will enable CitiDirect to run on your personal computer (PC). Recommended: Requirements listed will deliver enhanced performance. Computer Processor Minimum: 500MHz CPU (Generally indicates a Pentium 3 machine, released in February 1999.) Recommended: 1 GHz CPU Computer Memory (RAM) For Microsoft Windows 98 and Windows NT 4.0 Minimum: 128MB Recommended: 256MB For Windows 2000, XP and ME * Minimum: 256MB Recommended: 512MB * More recent versions of Windows operating systems use larger amounts of RAM. Hard Drive Space Available Minimum: 150MB Monitor/Display Minimum: VGA Monitor resolution of 800x600, configured to display 256 colors. Recommended: Resolution of 1024x768 (if available) to enhance the visual experience of CitiDirect. Internet Connectivity Minimum: For Dial-up Customers ONLY: Modem/Speed: 28.8Kbps (28,800 baud/second) or higher; V.34 modem protocol is minimally required; V.90 modem protocol is recommended. Recommended: High Speed Internet or Broadband Connection Continued on page 2

71 Software The minimum and recommended software requirements to run CitiDirect Online Banking are listed below. Note: Administrator rights to your PC are required to install both CitiDirect Online Banking or any updates or installs of third party components needed to run CitiDirect on Windows NT, Windows 2000 and XP systems. They are also needed to download CitiDirect application updates. Operating Systems CitiDirect Online Banking is certified to operate on the Microsoft Operating Systems listed below, excluding some versions of the systems as indicated. Windows 98 (excluding Arabic) Windows ME (excluding Arabic) Windows NT 4.0* * NT versions of Service Pack (SP) earlier than version 3 need to upgrade; all SPs later than version 3 are acceptable (excluding Arabic, Greek, Hebrew, Slovak and Turkish). Windows 2000 (excluding Arabic, Slovak and Thai) Windows XP (excluding Arabic) Internet Browsers Microsoft Internet Explorer (IE) version 5.0 Service Pack 1 or higher.** Your IE browser must be enabled for SSL (Secure Sockets Layer) versions 2.0 and 3.0 and your Internet Security Level must be set to Medium. Netscape Communicator is currently NOT supported. ** For Borland Delphi users: IE 5.5 Service Pack 2 and higher will work; IE 6.0 is recommended. Java Software Microsoft Java Virtual Machine: 5.X (where X denotes the latest version generally available from Microsoft). Sun Microsystems TM Java 2 Runtime Environment (JRE) versions: 1.4.2_ _ _ _ _ _ _ _ _ update update update 6 (Recommended Version) Note: Each Sun JRE version listed above is sufficient to run CitiDirect. Each subsequent release of Sun JRE has small improvements in the Java software that may enhance the user experience. We recommend that all users run CitiDirect with version 5.0 update 6. Adobe Acrobat Reader 5.0 Needed to view CitiDirect reports or documents that are in PDF format. Global Transaction Services 2006 Citigroup Inc. All rights reserved. CITIDIRECT, CITIBANK, CITIGROUP and the Umbrella Device are trademarks and service marks of Citigroup Inc. or its affiliates and are used and registered throughout the world. All other brands, products, and service names mentioned are trademarks or registered trademarks of their respective owners GTS2161 2/06

72 G. Depositing USD and Other Non-LC Checks Ideally, non local currency (USD, GBP, Euro, etc.) checks received directly by the CO should be deposited in-country. However, if the CO does not have an in-country account that will clear such deposit, CHQ/Treasury can deposit the check to a CARE USA HQ bank account and credit the CO s intracompany account. Effective, 01 October 2006, CHQ/Treasury will not send checks to Citibank for deposit. This has proven to be inefficient. It takes longer for CARE to receive credit and is difficult to trace if a problem arises. Each day, CHQ receives hundreds of checks and deposits them with SunTrust, CARE USA s local bank in Atlanta. We have on-line access to view the check images once deposited and CHQ/Treasury reconciles the bank credit to our records daily. CHQ/Corporate Support records the transactions and reviews the account daily as well. CHQ/Treasury is committed to depositing CO checks as needed and ensuring the CO is properly credited and communicated such. The following outlines the steps to be followed to ensure security of check(s) from the time the CO sends via pouch to the time CHQ/Treasury deposits. 1. Prior to sending the check(s) via pouch CO 1.1 Notify CHQ/Treasury (treasury@care.org) that the pouch will contain check(s) that the CO would like CHQ to deposit on the CO s behalf. Indicate the currency, amount, and # of checks to be deposited. 1.2 Endorse the check the most restrictive way: For deposit only Account # CARE, Inc. Restrictive endorsement limits what can be done with the check. By including For Deposit Only, no one can cash the check; it must be deposited to the account indicated. This limits exposure if the check were lost or intercepted. CHQ/Atlanta 1.1 CHQ/Treasury will confirm receipt of the CO s and will be expecting the checks in the pouch. CARE USA Treasury Manual 72

73 CO CHQ/Atlanta 1.3 Enclose the check in a sealed envelope, addressed to: CHQ/Treasury Attn: Cashiering Area CARE Atlanta 1.3 Keep a photocopy of the check(s) for the CO s file 2. Upon receipt of check 3. Upon depositing the check (the next business day) 4. Final communication 4.1 CO will make offsetting intracompany entry with the same date. The CO should not wait for the intracompany billing statement before recording this entry. 2.1 CHQ/Treasury will notify CO that the check has been received 3.1 CHQ/Corporate Support Unit will record transaction, crediting the CO s intracompany account for the deposit made 4.1 CHQ/Treasury will confirm with the CO the date and amount of the intracompany accounting entry Important: Please note that for non USD checks, the account is not credited on the date of deposit. The bank must first collect the foreign currency funds from the issuing bank of the check. This typically takes several weeks. The bank will then credit the account for the USD exchange rate on that date. This will be tracked by CHQ/Treasury and communicated once the date and USD amount are known. Please direct questions to treasury@care.org. CARE USA Treasury Manual 73

74 Chapter 7 PETTY CASH Table of Contents A. Reasons for Maintaining Petty Cash B. Authorization to Establish and Modify Petty Cash C. CO Petty Cash Policy D. Petty Cash Custodian E. Replenishment of Petty Cash F. Reasonable Level of Petty Cash G. Security of Petty Cash H. Record Retention CARE USA Treasury Manual 74

75 A. Reasons for Maintaining Petty Cash Petty cash is maintained to allow reimbursement of small incidental business expenses in an efficient and cost effective manner. Instead of issuing a check for every disbursement, authorized, small business expenses may be paid with this fund. B. Authorization to Establish and Modify Petty Cash Effective 01 October 2006, CHQ/Treasury will no longer be involved in establishing COs petty cash funds or changing fund balances. The CD has full authority to establish petty cash funds and make subsequent modifications (e.g., increasing petty cash amount), as needed. Although the CO can establish a new petty cash fund without CHQ involvement, the CO Controller (or equivalent position) must notify Global Business Analysis Unit (GBAU) Finance Manager and COFA as soon as possible and no later than due date for sending the current month s financial upload to (cofindata@care.org.) This will ensure that GBAU can update the CO s chart of account per CHQ s records prior to consolidating financial reports for the month. C. CO Petty Cash Policy It is critical for each CO to define, document and adhere to its petty cash policy. Consistent with other guidelines contained in this manual, CARE s policy, procedures and processes should always establish a balance between efficiency and risk management of staff and the funds. The CO is in the best position to determine the need, amount and type of transactions to be processed through petty cash based on the unique circumstances of each CO or sub-office. This chapter will provide some guidelines on what a CO s internal petty cash policy should include. The CO is responsible for ensuring proper controls exist relative to petty cash or other cash accounts. CARE USA Treasury Manual 75

76 D. Petty Cash Custodian Each approved petty cash fund must have a custodian responsible for: 1. disbursing funds in accordance with the CO policy (e.g., types of disbursement that may be reimbursed using the fund, maximum amount of disbursement per transaction, approval requirements, etc.) 2. reconciling the fund each time the fund is replenished and at regularly established intervals 3. requesting replenishment of funds, as needed 4. maintaining required records regarding disbursements that have been made from the fund, and Cash count and fund reconciliation should be performed and independently reviewed whenever a change in custodian occurs. Someone other than the petty cash custodian should: periodically review disbursements made from the fund for appropriateness and proper documentation approve petty cash replenishment request conduct periodic and surprise cash counts E. Replenishment of Petty Cash Petty cash is controlled using the imprest system for disbursement. The fund can only be replenished up to the original established amount. A request for an increase in fund may be granted by the CD, if appropriate. Fund balance may also be reduced if business needs diminish. F. Reasonable Level of Petty Cash CHQ will not impose the amount of petty cash fund that COs should maintain as business requirements vary. However, due to the nature of the fund, it is unusual for petty cash in a CO to exceed $1,000 USD. Under normal circumstances, a reasonable petty cash level will require replenishment approximately twice a month. This should be weighed against efficiency and safety of the custodian and funds. CARE USA Treasury Manual 76

77 G. Security of Petty Cash 1. Custodians are responsible for the safekeeping of the funds under their control. All petty cash funds should be stored in a secured device that is: locked (always) fireproof (to the extent possible), and immovable (to the extent possible) 2. Funds should never be left unattended or unsecured. 3. The CO s documented internal policy, procedures and processes should address who within the CO should be contacted, in the event that funds are lost or stolen. H. Record Retention Petty cash replenishment receipts must be retained for 7 years. This is typically maintained in Accounts Payable once the request to replenish has been submitted. CARE USA Treasury Manual 77

78 Chapter 8 BANK GUARANTEE Table of Contents A. What is a Bank Guarantee? B. Who to Contact in CHQ if the Donor Requires a Bank Guarantee? CARE USA Treasury Manual 78

79 A. What is a Bank Guarantee? A bank guarantee is a form of insurance for a donor; it is a contract between CARE and a bank. If CARE fails to perform to the donor s specifications as documented in the guarantee, then the bank guarantees the donor s funds will be reimbursed. The bank would then expect payment from CARE for any funds reimbursed to the donor by the bank. Bank guarantees are an expensive administrative burden. CARE staff should make great efforts to convince donors that they are unnecessary and expensive; CARE has a proven track record of project compliance. Unfortunately, some donors such as the European Union often require bank guarantees. Every guarantee costs CARE money, typically an annual fee to the issuing bank for the life of the guarantee. This fee can be as high as 2.5% of the amount guaranteed and is charged to the requesting CARE entity. Additionally, the bank issues the guarantee based upon the strength of CARE USA s financial statements. CARE USA is the only member of CARE International with the financial strength to purchase guarantees, thus all CI members must go through CARE USA when a donor requires a bank guarantee. Regardless of the CARE lead entity, CARE USA is at risk for each guarantee we contract and this liability must be disclosed on our financial statements. Accordingly, the CARE USA Finance Committee of the Board of Directors has established a $10 million USD limit on the amount of guarantees that CARE USA can have outstanding at any time. B. Who to Contact in CHQ if the Donor Requires a Bank Guarantee? If a project is vital to CARE s mission and a guarantee is a non-negotiable element of the project, the approval of the Director, Global Financial Services at CHQ is required prior to signing any grant agreement or contract. CARE USA COs are a part of the same legal entity as CHQ. Therefore, CO/RMU commitments obligate the entire organization. If the option exists for the CO to negotiate a bank guarantee locally, prior approval of the Director, Global Financial Services is still required to ensure CARE USA s total commitment is acceptable. The processing time for a bank guarantee is a minimum of 10 business days, as these are complex financial contracts usually involving both a US and European bank. Who to contact: Ann P. Jones, Director Global Financial Services treasury@care.org CARE USA Treasury Manual 79

80 Chapter 9 CHQ/Treasury Table of Contents A. CHQ/Treasury - Who Are We? B. What Do We Do? C. How Can We Be Reached? D. Strategic Support Global Financial Services Org Chart CARE USA Treasury Manual 80

81 CHQ/Treasury - Who Are We? CHQ/Treasury is part of Global Financial Services within CHQ s Strategic Support Division. An organizational chart has been included at the end of this Chapter for further detail on Global Financial Services. Stefanie Badoud, Treasurer sbadoud@care.org Stefanie is a certified public accountant (CPA) and has been with CARE three years. She currently has the responsibility of Treasury, Accounts Payable, Payroll and Travel. Prior to joining CARE, Stefanie spent eight years as an auditor, a Controller in the music industry and an independent consultant of multi-industry accounting controls and operations. Stefanie participated as a CARE Corps volunteer in Peru prior to joining the organization. She has lived in many parts of the United States and resided in Germany for three years as a young child. Stefanie is married and enjoys bluegrass music, contemporary art, gardening, and ultimate frisbee. Elias Amin, Global Cash Manager eamin@care.org In the past two decades, Elias has worked in construction, pharmaceutical and the non-profit sectors. He served as Controller for CARE Ethiopia from Elias and his wife, Sumeya, moved to Atlanta in June 2005 to begin his new role as CHQ Global Cash Manager. Elias graduated from Addis Ababa University (B.A. in Accounting/Diploma in Computer Science) and studied his MBA from Open University, UK. He has participated in many workshops & training sessions on business administration, management and leadership. His personal interests include: fitness & sports, history, politics and enjoying activities with family and friends. CARE USA Treasury Manual 81

82 Patti Apicelli, Senior A/P Specialist Patti is a native of Atlanta, Georgia and has always lived in the Atlanta metropolitan area. She has one brother, and is married with two daughters and a son. Patti started with CARE as a temporary finance employee in 1995 expecting to be with CARE a few weeks. She was quickly hired into a permanent position. Patti enjoys listening to all kinds of music, reading biographies, cooking large meals for friends and family, and spending time relaxing at the beach (reading but not cooking.) Lester Mendiola, International Treasury Specialist lmendiola@care.org Lester was born in Leon, Nicaragua, and moved to New York in He started working with CARE in New York in 1993 and relocated to Atlanta the following year. Lester worked in the Operations Unit of the External Relations division until joining the Finance Treasury team in early Hobbies include collecting baseball memorabilia, going to baseball games and rooting for the New York Yankees. Fetlework Mekonnen, Treasury Assistant fmekonnen@care.org Fetlework Mekonnen goes by Fetle as many people find it difficult to pronounce her name. She is originally from Ethiopia and has lived in Atlanta 12 years. Fetle is married and has two children a nine year old daughter and a three year old son. She has been with CARE since August 2001 working within different departments in Finance. Fetle enjoys traveling and looks forward to an opportunity to visit a CARE Country Office. CARE USA Treasury Manual 82