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Proposed by JADE M. MONTERO
FINANCIAL MANAGEMENT POLICY
(FINANCIAL OPERATION MANUAL)
CHAPTER I
Declaration of Objectives. It is the objective of the association to adopt this Financial Policy or
Financial Operation Manual:
a. To exercise prudence in all its financial transactions;
b. To maintain a healthy financial condition;
c. To set up checks and balances in all its transactions; and
d. To protect the general membership from unscrupulous practices of the Board and Officers of
the association.
Definition of Terms. The following terms shall be defined liberally.
a. Association refers to Pag-ibig Citihomes Phase 2 Homeowners’ Association, Inc. (PICHOA-
2);
b. Audit & Inventory Committee refers to the committee created by the association to
conduct audit of the association’s businesses, practices and operation;
c. External Auditor refers to the person or agency hired by the association to conduct audit of
association’s businesses, practices and operation;
d. Financial Management Committee refers to the committee created by the association as
the coordinating body of the association involving financial matters including those involving
external institutions;
e. Membership Dues refers to the amount levied by the Association, as provided in the
Association’s By-Laws, from its members on a monthly basis to defray the operational cost of
the Association;1
f. Membership Fee refers to the amount paid, as provided in the Association’s By-Laws, by an
individual applying for membership in the Association, which is paid only once;
g. Net Surplus refers to the excess of the revenues of the association after deducting official
expenditures incurred in the conduct of business, which is subject for allocation to various
funds of the association;
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Proposed by JADE M. MONTERO
CHAPTER II
FUND MANAGEMENT
Classification of Funds. The association shall create and maintain a General Reserve Fund, a
Special Reserve Fund, and a Petty Cash Fund.
Allocation of Net Surplus. The annual Net Suplus shall be allocated in the following manner:
a. Sixty percent (60%) for General Reserve Fund, and
b. Forty percent (40%) for Special Reserve Fund.
Allocation of Membership Fee. The membership fee collection shall automatically form part of
the Special Reserve Fund
Custodian of Official Receipts/Books of Accounts. The custodian of the Official Receipts of
the association shall be the Treasurer. The Board, however, can assign, through a resolution, somebody
from the Board as custodian of the Official Receipts.
The Books of Accounts of the association shall be kept and maintained by the Treasurer.
Approving Authority/ies. The Board shall pass a Board Resolution specifying the approving
authority/ies with corresponding amount for all the association’s financial transactions, provided,
however, such authorities shall not run in contrast to the provisions in Chapter 3, Paragraph 3-C of this
manual.
Reimbursement Expense Receipt (RER). The Reimbursement Expense Receipt (RER) shall
be used in instances that seller or service provider does not have an Official Receipt or Temporary
Receipt, provided, however, it shall be used for expenses of not more than P500.00.
CHAPTER III
THE GENERAL RESERVE FUND
Creation General Reserve Fund. The association shall create a General Reserve Fund to
finance the regular or routine activities of the association.
Purpose/Use of General Reserve Fund. The General Reserve Fund shall be used for the
following purposes:
a. To finance Administrative Cost of the association;
b. To finance Maintenance Cost of the association;
c. To finance Project/Program Cost of the association; and
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Proposed by JADE M. MONTERO
d. To finance Miscellaneous Expenses of the association.
Disbursement Procedure of General Reserve Fund. The General Reserve Fund shall be
disbursed through the issuance of a cheque.
The following process shall be observed in the disbursement of General Reserve Fund:
a. Filing of Requisition and Issuance Slip (RIS);
b. Conduct of Bidding or canvass;
c. Filing of Board Resolution, if requested amount is more than P1,500.00;
d. Approval of the RIS;
e. Preparation of Check Voucher; and
f. Issuance and acceptance of Cheque.
Liquidation of General Reserve Fund. The money disbursed from the General Reserve Fund
shall be liquidated within 15 calendar days from the date of fund disbursement.
The following documents shall be submitted during the liquidation:
a. Official Receipt;
b. Report of Inspection; and
c. Certificate of Acceptance
CHAPTER IV
THE SPECIAL RESERVE FUND
Creation Special Reserve Fund. The association shall create a Special Reserve Fund to
finance its special projects and programs.
Purpose/Use of Special Reserve Fund. The association shall only use the Special Reserve
Fund for the following purposes:
a. To fund rescue and emergency programs or activities;
b. To fund purchase of rescue and emergency tools and equipments; and
c. To provide seed capital for income-generating projects;
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Proposed by JADE M. MONTERO
Disbursement Procedure of Special Reserve Fund. The Special Reserve Fund shall be
disbursed through the issuance of a cheque.
The following process shall be observed in the disbursement of Special Reserve Fund:
a. Filing of Requisition and Issuance Slip (RIS);
b. Conduct of Bidding or canvass;
c. Filing of Board Resolution approving the amount to be released and specifying its intended
purpose;
d. Filing of General Assembly Resolution approving the amount to be released and specifying its
intended purpose;
e. Preparation of Check Voucher; and
f. Issuance and acceptance of Cheque.
Liquidation of Special Reserve Fund. The money disbursed from the Special Reserve Fund
shall be liquidated within 45 calendar days from the date of issuance of cheque.
The following documents shall be submitted during the liquidation:
a. Official Receipt;
b. Report of Inspection; and
c. Certificate of Acceptance.
CHAPTER V
THE PETTY CASH FUND
Creation of Petty Cash Fund. The association shall set up a P1,000.00 Petty Cash Fund to
finance its day-to-day operation/administrative expenses. The fund shall come from the General Reserve
Fund.
Purpose/Use of Petty Cash Fund. The Petty Cash Fund shall be used to pay for expenses of
not more than P500.00 per transaction. The fund shall be used for the following purposes, among others:
a. To pay for the purchase of office supplies;
b. To pay for reproduction/photocopy costs;
c. To pay for transportation expenses;
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Proposed by JADE M. MONTERO
d. To pay for communication expenses; and
e. To pay for meals/snacks.
Disbursement Procedure of Petty Cash Fund. The Petty Cash Fund shall be disbursed in the
form of cash.
The following process shall be observed in the disbursement of Petty Cash Fund:
a. Filing of Requisition and Issuance Slip (RIS);
b. Conduct of Canvass;
c. Preparation and approval of Petty Cash Voucher; and
d. Disbursement of cash.
Liquidation of Petty Cash Fund. The Petty Cash Fund shall be liquidated within 7 days from
the date of disbursement of cash.
The following documents shall be submitted during the liquidation;
a. Official Receipt;
b. Certificate of Acceptance;
c. Report of Inspection;
d. Travel Expense Statement or Fare Tickets; and
e. Reimbursement Expense Receipt.
Replenishment of Petty Cash Fund. The Petty Cash Fund shall be replenished, provided that
its disbursement has reached 70%, through the issuance of a cheque.
Petty Cash Fund Custodian. The petty cash custodian shall be the treasurer of the association
or any person duly authorized by the Board though the passage of Board Resolution.
CHAPTER VI
BANK ACCOUNT
Opening of Bank Account. The association shall open a Current/Checking Account in the name
of the association.
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Proposed by JADE M. MONTERO
Authorized Signatories for the Bank Account. The association shall designate authorized
signatories for the association’s bank account.
Deposit Withdrawal. Withdrawal of deposit shall be in the form of cheque. A cheque voucher
shall accompany issuance of cheque.
CHAPTER VII
THE ASSOCIATION BUDGET
Preparation and Adoption of Annual Budget. The Financial Management Committee shall
prepare an Annual Budget to be presented during the Annual General Assembly. The General Assembly
shall approved and adopt the Annual Budget during the General Assembly.
Use of Annual Budget. The association’s financial transactions shall be based on the budget as
approved and adopted by the General Assembly through a General Assembly Resolution.
Budget Reallocation/Diversion. Any reallocation or diversion of financial resources from the
approved budget shall be approved by the Board through a Board Resolution; provided, however, that
such reallocation or diversion shall not exceed P3,000.00.
Reallocation or diversion of financial resources from the approved budget of more than P3,000.00
shall be approved by the General Assembly through General Assembly Resolution.
CHAPTER VIII
THE FINANCIAL REPORT
Preparation of Financial Report. The Association’s treasurer shall prepare interim financial
report, cash report and bank reconciliation report.
Frequency of Preparation of Financial Report. The following financial reports shall be
prepared and presented to the Board as stated below:
a. Statement of Operation shall be prepared and presented every month during the Regular
Board Meeting;
b. Statement of Condition shall be prepared and presented every quarter during the Regular
Board Meeting;
c. Cash Report shall be prepared and presented every month during the Regular Board
Meeting;
d. Bank reconciliation report shall be prepared and presented every month during the Regular
Board Meeting;
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Proposed by JADE M. MONTERO
e. Internally Audited Quarterly Financial Statement shall be prepared and reported to the Board
a month after the end of each quarter;
f. Internally Audited Financial Statements shall be prepared and reported a month after the end
of the 1st semester to the General Assembly; and
g. Audited Financial Statement shall be presented during the Annual General Assembly.
Publication of Financial Report. Financial Reports shall be posted in Bulletin Boards and on-
line publications.
CHAPTER IX
SECURITY BOND OF ACCOUNTABLE OFFICERS
Posting of Security Bond. Accountable offices shall post fidelity bond as may be determined
by the Board.
CHAPTER X
AUDIT
Frequency of Audit. The Audit and Inventory Committee shall audit the association every
quarter and shall report an audited Financial Statement and/or audit report to the Board which shall
report such to the association members.
Scope of Audit. The audit shall determine the financial health of the association. It shall cover
the following areas, among others:
a. Cash Position of the association;
b. Adherences to and/or deviations from the association’s rules and procedures;
c. Physical audit of properties, accountable forms/documents of the association; and
d. Effectiveness of the association’s financial control systems.
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Proposed by JADE M. MONTERO
CHAPTER XI
FINAL PROVISIONS
Effectivity. This Policy shall take effect upon the approval of the Board and ratification of the
majority of members in good standing.
Amendment. The Board and/or ten percent (10%) of members in good standing can introduce
amendment/s, in whole or in part, to this Policy, provided, however, such amendment/s shall be ratified
by the majority of members in good standing of the General Assembly.
ADOPTED by THE BOARD, this _______ day of _________ 2012, Malanang, Opol, Misamis
Oriental.
RATIFIED by PHASE 2 HOA’s GENERAL ASSEMBLY, this _______ day of _________ 2012,
Malanang, Opol, Misamis Oriental.
Certified true and correct:
Board Secretary
Attested by:
President/Presiding Officer
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Proposed by JADE M. MONTERO
ANNEX A
THE REQUISITION AND ISSUE SLIP
Request for supplies, etc. will be filed in the REQUISITION AND ISSUE SLIP (RIS). The RIS can
be purchased from Office Supplies Stores.
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Proposed by JADE M. MONTERO
ANNEX B
THE PRICE QUOTATION FORM
The Price Quotation Form will be used to canvass services/items needed by the association that
are priced more than the amount allowed in the Petty Cash Fund.
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Proposed by JADE M. MONTERO
ANNEX C
THE CANVASS SHEET FOR PETTY CASH FUND
For expenses that are to be paid by the Petty Cash Fund, the CANVASS SHEET FOR PETTY CASH
FUND will be used. This doesn’t require the Price Quotation Form, and telephone canvass is allowed.
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Proposed by JADE M. MONTERO
ANNEX D
THE CERTIFICATE OF ACCEPTANCE
The CERTIFICATE OF ACCEPTANCE will be used to certify the acceptance of the services
rendered or the delivery of the items purchased by the association. The Certificate will be issued by the
association officer who is in-charged in the acceptance of such items/services.
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ANNEX E
THE CERTIFICATE OF INSPECTION
The Certificate of Inspection will be issued by the association officer who inspected the delivery
of items purchased or who inspected the services rendered by the service provider. This is to ascertain
that the association is not short-changed in the transaction.
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ANNEX F
THE TRAVEL EXPENSE STATEMENT
The Travel Expense Statement will be used for documenting travel expenses of officers, staff, or
members of the association which are paid by Petty Cash Fund. This will be used for travel expenses
where trip tickets are impossible to secure. But this can’t be used for liquidation of taxi, airplane, ferry,
bus fare and the like.
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Proposed by JADE M. MONTERO
ANNEX G
THE REIMBURSEMENT EXPENSE RECEIPT (RER)
The Reimbursement Expense Receipt (RER) will be used for expenses of not more than P500.00
which the buyer has difficulty of securing an Official Receipt i.e. purchases of fish from wet market, taxi
fare (if taxi has no O.R. but this is totally discouraged), photocopy, etc.
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Proposed by JADE M. MONTERO
ANNEX H
THE PETTY CASH VOUCHER
The Petty Cash Voucher will be used for request funds to purchase items or to contract services
of service providers that are within the limit of Petty Cash Fund. This will be filled out during the time of
Cash Advance and will be completely filled out once the liquidation of such expenses is already
submitted.