DRAFT TREASURY OPERATIONAL MANUAL

UNDER
DFAT/GIZ CLIMATE FINANCE READINESS FOR
THE PACIFIC (CERP)

TREASURY TECHNICAL ADVISER FOR KIRIBATI

Contract No. 83315624

BY
AISAKE VALU EKE
July 2019

TABLE OF CONTENTS
PART A: GENERAL INTRODUCTION....................................................................................................................... 9
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A.1. TITLE AND AUTHORITY FOR ISSUE....................................................................................................................9

A.2. APPLICABILITY OF OPERATIONAL MANUAL......................................................................................................9
A.3. AMENDMENTS TO OPERATIONAL MANUAL.....................................................................................................9
A.4. AVAILABILITY AND KNOWLEDGE OF ORDINANCE, REGULATIONS AND OPERATIONAL MANUAL......................9
A.5. EXEMPTION FROM OPERATIONAL MANUAL.....................................................................................................9
A.6. INTEGRITY OF EMPLOYEES................................................................................................................................9
A.7. WASTEFUL EXPENDITURE OR METHOD..........................................................................................................10
A.8. INFORMATION REQUIRED BY THE TREASURY.................................................................................................10
A.9. DISAGREEMENTS BETWEEN DEPARTMENTS...................................................................................................10
PART B: CONTROL OF EXPENDITURE.................................................................................................................. 11
B.1. APPROPRIATION OF PUBLIC MONEY...............................................................................................................11
B.2. ANNUAL ESTIMATES AND APPROPRIATIONS...................................................................................................11
B.3. PREPARATION OF ESTIMATES..........................................................................................................................12
B.4. AUTHORITIES FOR EXPENDITURE AND DELEGATION......................................................................................13
B.5. RECORDING AND MONITORING OF EXPENDITURES.......................................................................................14
B.6. ACCOUNTING AND PROCESSING CONTROLS OVER COMMITMENTS AND EXPENDITURES.............................15
B.7. COMPUTERISED SYSTEM CONTROLS..............................................................................................................16
B.8. BUDGETARY CONTROL....................................................................................................................................16
B.9. COMMITMENT REPORT (CR)...........................................................................................................................17
B.10. QUARTERLY SUMMARIES..............................................................................................................................17
B.11. APPROPRIATION, VIREMENT AND DE-RESERVATION....................................................................................18
B.12. OVEREXPENDITURE OF VOTE........................................................................................................................19
B.13. UNFORESEEN EXPENDITURE.........................................................................................................................20
B.14. EXPENDITURE IN ANTICIPATION OF APPROPRIATION...................................................................................20
B. 15. EXPENDITURE IN ANICIPATION OF APPROPRIATON AFTER THE DISSOLUTION OF THE LEGISLATURE..........21
B.16. WRITE-OFF OF LOSSES..................................................................................................................................21
B.17. NUGATORY EXPENDITURE.............................................................................................................................21
B.18. WORDING OF CONTRACTS TO BE APPROVED BY ATTORNEY GENERAL.........................................................22
B.19. CABINET SUBMISSIONS.................................................................................................................................22
PART C: DEPARTMENTAL ACCOUNTING.............................................................................................................. 23
C. 1. ACCOUNTABLE OFFICER.................................................................................................................................23
C.2. RESPONSIBILITIES OF FINANCIAL SECRETARY..................................................................................................23
C3. RESPONSIBILITIES OF ACCOUNTANT GENERAL................................................................................................23
C.4. RESPONSIBILITIES OF HEADS OF DEPARTMENTS.............................................................................................24
C.5. DUTIES OF AN ACCOUNTABLE OFFICER..........................................................................................................26
C.6. DUTIES OF AN ACCOUNTING OFFICER............................................................................................................27
C.7. REVENUE COLLECTOR.....................................................................................................................................28
C.8. DELEGATION OF POWERS...............................................................................................................................28
C.9. ACCESS TO INFORMATION AND REMOVAL OF AUTHORITY TO DEAL..............................................................28
C.10. RELATIONSHIP OF DEPARTMENTAL ACCOUNTING TO TREASURY.................................................................29
C.11. INTERNAL CONTROL.....................................................................................................................................29
C.12. PUBLIC MONEY NOT TO BE USED FOR PRIVATE PURPOSES...........................................................................29
C.13. PRIVATE MONEY NOT TO BE KEPT IN VICINITY OF PUBLIC MONEY...............................................................30
C.14. CASH LOSSES OR SURPLUSES........................................................................................................................30
C.15. DEBTORS ACCOUNTS AND INVOICES............................................................................................................30
C.16. REMISSION OF DEBTS AND ARRANGEMENTS WITH DEBTORS......................................................................31
C.17. BAD DEBTS – WRITE-OFF..............................................................................................................................31
C.18. TREASURY AND AUDIT QUERIES...................................................................................................................31
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C.19. AUDIT REPORTS............................................................................................................................................32

C.20. IRREGULARITY REPORT TO BE FURNISHED IN EVERY CASE OF LOSS OR DAMAGE........................................32
C.21. FRACTIONS OF A DOLLAR.............................................................................................................................33
C.22. DESTRUCTION OF RECORDS..........................................................................................................................33
C.23. ARCHIVING OF ATTACHE AND ACCESS DATA.................................................................................................34
C.24. UNOFFICIAL FORMS NOT TO BE USED..........................................................................................................35
C.25. GENERAL LEDGER ACCOUNTS.......................................................................................................................36
PART D: INTERNAL CONTROL............................................................................................................................. 37
D.1. DEFINITION AND OBJECTIVE OF INTERNAL CONTROL....................................................................................37
D.2. COMPONENTS OF INTERNAL CONTROL..........................................................................................................38
D.3. EVALUATION PARAMETERS OF INTERNAL CONTROL SYSTEM.........................................................................39
D.4. ESSENTIALS FOR AN EFFECTIVE INTERNAL CONTROL SYSTEM........................................................................39
D.5. DEFALCATIONS, SHORTAGES, FAILURE TO ACCOUNT......................................................................................39
D.6. DEPARTMENTAL ACCOUNTING SYSTEMS AND INTERNAL CONTROL..............................................................40
D.7. PREVENTION OF MISAPROPRIATION..............................................................................................................40
D.8. CASHIERS NOT TO CONTROL NON-PUBLIC MONEY........................................................................................41
D.9. HANDLING OF CASH BALANCES......................................................................................................................41
D.10. CUSTODY OF CASH, KEYS, STAMPS, VALUABLE DOCUMENTS AND ACCOUNTING FORMS............................41
D.11. CHECK OF OFFICIAL MONEY AT IRREGULAR INTERVALS...............................................................................49
D.12. CONVEYANCE OF CASH OUTSIDE OFFICE PREMISES.....................................................................................49
D.13. BANK LODGMENTS.......................................................................................................................................50
D.14. ELECTRONIC PAYMENTS................................................................................................................................50
D.15. SAFETY OF PROCESSED DATA........................................................................................................................51
D.16. CHANGE OF CASHIER’S DUTIES.....................................................................................................................51
D.17. RETURNS TO BE RENDERED PROMPTLY........................................................................................................51
D.18. CASHIERS’ ACCESS TO LEDGERS....................................................................................................................51
D.19. CASHIERS’ COMPARTMENT..........................................................................................................................51
D.20. SIGNING OF BLANK FORMS..........................................................................................................................52
D.21. INWARD MAIL...............................................................................................................................................52
D.22. OUTWARD MAIL...........................................................................................................................................52
D.23. CORRECTIONS OR ALTERATIONS IN ACCOUNTING RECORDS........................................................................53
D.24. PAGES IN ACCOUNT BOOKS TO BE NUMBERED BEFORE USE........................................................................53
D.25. INTERNAL CONTROL REGISTERS...................................................................................................................53
PART E: RECEIVING OF PUBLIC MONEY.............................................................................................................. 53
E.1. RECEIPTING SYSTEM.......................................................................................................................................53
E.2. RECEIPTING AND BANKING OF PUBLIC MONEY..............................................................................................53
E.3. ACCOUNTING OF PUBLIC MONEY...................................................................................................................54
E.4. IMPLEMENTATION OF THE SYSTEM.................................................................................................................56
E.5. ISSUE OF RECEIPTS..........................................................................................................................................57
E.6. CASH BOOK FOR RECEIPTS..............................................................................................................................59
E.7. PAYING-IN REGISTER.......................................................................................................................................60
E.8. PAY RECEIPTS DIRECT TO GOVERNMENT BANK ACCOUNT..............................................................................60
E.9. RENEWAL OF LICENCES...................................................................................................................................61
E.10. LOST OF ISSUED RECEIPT FORM....................................................................................................................61
E.11. DUPLICATE RECEIPTS NOT TO BE ISSUED......................................................................................................61
E.12. RECEIPT OF CHEQUES AND OTHER NEGOTIABLE INSTRUMENTS..................................................................61
E.13. DISPOSAL OF COPIES OF RECEIPTS................................................................................................................61
E.14. CORRECTION OF REVENUE POSTINGS...........................................................................................................62
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E.15. COLLECTION OF REVENUE DUE.....................................................................................................................62

E.16. REGISTERS FOR REVENUE DUE TO GOVERNMENT........................................................................................62
E.17. RETURNS FOR REVENUE ARREARS AND RECOVERY ACTION........................................................................63
E.18. REVENUE REFUND........................................................................................................................................ 63
E.19. CASHIERS, SUB-CASHIERS AND CONTROLLING OFFICERS.............................................................................64
E.20. DISHONOURED CHEQUES.............................................................................................................................65
E.21. PUBLIC NOTICE REGARDING RECEIPTS..........................................................................................................67
E.22. LEGAL TENDER FOR RECEIPTS...................................................................................................................68
E.23. CONTROL OF FORMS.....................................................................................................................................68
E.24. MISPRINTED OR MISNUMBERED RECEIPT BOOKS........................................................................................68
E.25. CHEQUES FROM UNKNOWN PERSONS.........................................................................................................68
E.26. CASHING OR GIVING CHANGE ON CHEQUES NOT PERMITTED.....................................................................68
E.27. CASH SHORTAGES AND SURPLUSES:.............................................................................................................69
PART F: DEVELOPMENT FUND ACCOUNT........................................................................................................... 70
F.1. ESTABLISHMENT OF THE DEVELOPMENT FUND..............................................................................................70
F.2. WORKS AND SERVICES FINANCED FROM DEVELOPMENT FUND.....................................................................70
F.3.APPLICATION FOR OVERSEAD AID....................................................................................................................70
F.4.PAYMENT..........................................................................................................................................................70
F.5.REPORTING...................................................................................................................................................... 71
F.6. PROJECT SCOPE AND VARIATION.....................................................................................................................72
F.7. REVENUE ACCRUED FOR PROJECT...................................................................................................................72
F.8. PROJECT CLOSURE...........................................................................................................................................72
F.9. ACCOUNTS AND RECORDS...............................................................................................................................72
F.10. RECEIPTING OF MONEYS...............................................................................................................................73
F.11. DEVELOPMENT FUND ACCOUNT ACCOUNTING AND RECONCILIATION........................................................73
F.12. RULES FOR OPERATION OF THE DEVELOPMENT FUND..................................................................................73
PART G: SPECIAL PURPOSE AND TRUST ACCOUNTS............................................................................................ 76
G. 1. SPECIAL PURPOSE ACCOUNTS.......................................................................................................................76
G.2. TRUST ACCOUNTS..........................................................................................................................................79
PART H: PAYMENTS........................................................................................................................................... 83
H.1. CLAIMS TO BE SUBMITTED TO TREASURY FOR PAYMENT...............................................................................83
H.2. PROCESSING OF CLAIMS FOR PAYMENT IN TREASURY...................................................................................83
H.3. PROCESSING OF PAYMENT VOUCHERS...........................................................................................................84
H.4. PREPARATION OF VOUCHERS.........................................................................................................................85
H.5. CHECKING OF VOUCHER FOR PAYMENT.........................................................................................................88
H.6. PAYMENT OF VOUCHER..................................................................................................................................88
H.7. FORM OF PAYMENT........................................................................................................................................89
H.8. ALTERATION OF VOUCHERS............................................................................................................................89
H.9 LOST VOUCHERS..............................................................................................................................................89
H.10. VOUCHERS FOR REFUNDS OF REVENUE.......................................................................................................90
H.11. DISCOUNT ON CLAIMS.................................................................................................................................90
H.12. URGENT PAYMENTS......................................................................................................................................90
H.13. PAYMENT TO AN AGENT OF A PAYEE............................................................................................................91
H.14. PAYMENT WITHOUT PRODUCTION OF PROBATE OR LETTERS OF ADMINISTRATION...................................91
H.15. OVERSEAS PAYMENTS...................................................................................................................................91
H.16. CLAIMS TO BE PAID BY CHEQUE...................................................................................................................91
H.17. DRAWING OF CHEQUES................................................................................................................................92
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H.18. SIGNING A CHEQUE......................................................................................................................................92

H.19. LOST CHEQUES.............................................................................................................................................93
H.20. STALE CHEQUES............................................................................................................................................93
H.21. RECEIPTS FOR PAYMENTS.............................................................................................................................94
H.22. CERTIFYING OFFICERS – APPOINTMENT AND RESPONSIBILITIES..................................................................94
H.23. PAYING OFFICERS – APPOINTMENT AND RESPONSIBILITIES.........................................................................95
H.24. OVERSEAS IMPREST ACCOUNT.....................................................................................................................96
PART I: ASSETS.................................................................................................................................................. 97
I.1. DEFINITION OF ASSETS....................................................................................................................................97
I.2. TYPES OF ASSETS..............................................................................................................................................97
I.2.2.1. Financial Claims.................................................................................................................................................101
I.3. VALUATION OF ASSETS...................................................................................................................................103
I.4. ASSET SYSTEM AND PROCEDURES.................................................................................................................104
I.5. CUSTODY OF STORES......................................................................................................................................105
I.6. STOCKTAKING OF STORES..............................................................................................................................106
I.7. WASTE AND DETERIORATION TO BE AVOIDED...............................................................................................106
I.8. INSURANCE AND TRANSPORTATION OF STORES............................................................................................107
I.9.SURPLUS STORES............................................................................................................................................ 107
I.10.WRITE-OFF OF STORES..................................................................................................................................107
PART J: PAYMENT OF SALARIES, WAGES, OVERTIME AND ALLOWANCES...........................................................109
J.I. AUTHORITY.....................................................................................................................................................109
J.2. PROCESSING OF PAY ENTITLEMENTS.............................................................................................................109
J.3. PAYROLL SYSTEM........................................................................................................................................... 109
J.4. MAINTENANCE OF THE COMPUTERISED PAYROLL SYSTEM...........................................................................110
J.5. SALARIES PAYROLL SYSTEM AND PROCEDURES.............................................................................................110
J.5.ACTION IN TREASURY PAYROLL SECTION........................................................................................................117
J.6. MAYORS PAYROLL SYSTEM AND PROCEDURES..............................................................................................117
J.7. MEMBERS OF PARLIAMENT PAYROLL SYSTEM...............................................................................................119
J.8. CASUAL AND LABOR WAGES SYSTEM AND PROCEDURES..............................................................................122
J.9. DEDUCTIONS FROM SALARIES.......................................................................................................................125
J.10. CALCULATION OF SALARY............................................................................................................................128
J.11. OVERTIME....................................................................................................................................................128
J.12. LEAVE...........................................................................................................................................................132
J.13. METHOD OF PAYMENT OF SALARIES AND WAGES.......................................................................................133
J.14. PAYMENT OF SALARIES FROM IMPREST.......................................................................................................134
J.15. PAYMENT OF SALARIES AND WAGES IN CASH..............................................................................................134
J.16. ADVANCE OF SALARY...................................................................................................................................136
J.17. PAYROLL COSTING........................................................................................................................................138
J.18. MAINTENANCE OF PROPER PAYMENT AND COSTING RECORDS..................................................................138
J.19. WITHHELD AND UNCLAIMED PAYS..............................................................................................................138
J.20. OVERPAYMENTS OF SALARY AND WAGES.......................................................................................144
J.21. ANNUAL RETURN TO DEPARTMENT OF INLAND REVENUE..........................................................................147
J.22. EARNINGS FOR INCOME TAX PURPOSES..........................................................................................148
J.23. ASSOCIATIONS.........................................................................................................................................148
J.24. KIRIBATI INSURANCE CORPORATION................................................................................................148
J.25. KIRIBATI PROVIDENT FUND.................................................................................................................148
J.26. PARLIAMENTARY RETIREMENT FUND..............................................................................................150
J.27. PAYE INCOME TAX..................................................................................................................................151
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J.28. INCOME TAX ARREARS.........................................................................................................................152

J.29. RENTAL OF GOVERNMENT HOUSES...................................................................................................152
J.30. URGENT PAYMENTS...............................................................................................................................152
J.31. DEDUCTIONS REQUESTED BY GOVERNMENT EMPLOYEES.........................................................152
PART K: PROCUREMENT.................................................................................................................................. 154
K.1. GUIDELINES...................................................................................................................................................154
K.2. ACCOUNTABLE OFFICERS..............................................................................................................................154
K.3. CODE OF CONDUCT FOR PROCURING OFFICERS...........................................................................................154
K.4. MAIN FEATURES OF THE GOVERNMENT PROCUREMENT.............................................................................155
K.5. PROCUREMENT VALUING $5,000 AND LESS.................................................................................................156
K.6. PROCUREMENT VALUING BETWEEN $5,000 AND $50,000...........................................................................160
K.7. PROCURMENT VALUING $50,000 AND OVER................................................................................................163
PART L: IMPREST ACCOUNTS........................................................................................................................... 167
L.1. APPLICATION AND OPERATION.....................................................................................................................167
L.2. ACCOUNTING................................................................................................................................................168
L.3. FUNDING AND REIMBURSEMENT OF IMPREST ACCOUNTS..........................................................................168
L.4. PAYMENTS FROM IMPREST...........................................................................................................................168
L.5. IMPRESTEE’S CASH BOOK..............................................................................................................................168
PART M: ACCOUNTABLE ADVANCE FOR NORMAL OPERATION..........................................................................170
M.1. ACCOUNTABLE ADVANCES AND APPROVING AUTHORITY...........................................................................170
PART N: ADJUSTMENTS AND INTERDEPARTMENTAL TRANSACTIONS................................................................173
N.1. ADJUSTNMENTS AND TRANSFERS................................................................................................................173
N.2. FINANCIAL RECOVERIES BETWEEN DEPARTMENTS......................................................................................173
N.3. ADJUSTMENT OF CLAIMS BY JOURNAL VOUCHERS......................................................................................173
PART O: BANK ACCOUNTS AND CHEQUES........................................................................................................ 175
O.1. AUTHORITY FOR OPENING OF A BANK ACCOUNT........................................................................................175
O.2. APPLICATION TO OPEN A BANK ACCOUNT...................................................................................................175
O.3. APPLICATION FOR AND MANAGEMENT OF CHEQUE BOOK.........................................................................175
O.4. MISSING A CHEQUE BOOK OR A CHEQUE....................................................................................................175
PART P: DEPOSIT............................................................................................................................................. 176
P.1. GUIDELINE.....................................................................................................................................................176
P.2. APPROVAL FOR CREATING OF A DEPOSIT ACCOUNT.....................................................................................176
P.3. RECEIPT......................................................................................................................................................... 176
P.4. PAYMENT.......................................................................................................................................................177
PART Q: REMITTANCE...................................................................................................................................... 178
Q.1. GUIDELINE....................................................................................................................................................178
Q.2. REMMITING OF FUND..................................................................................................................................178
Q.3. ACCOUNTING FOR REMITTANCE..................................................................................................................178
Q.4. LOSS OF REMITTANCE AND DISCREPANCY....................................................................................................179
Q.5. INSURANCE OF REMITTANCE.......................................................................................................................179
PART R: LOSSES OF PUBLIC FUNDS AND BOARD ENQUIRY................................................................................180
R.1. GUIDELINES.................................................................................................................................................. 180
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R.2. REPORTING OF LOSSES.................................................................................................................................180

R.3. ACTION BY MINISRTY....................................................................................................................................180
R.4. ACTION BY MINISTRY OF FINANCE................................................................................................................181
R.5. CONVENING OF BOARD OF ENQUIRY...........................................................................................................181
R.6. ACTION BY MINISTRY OF FINANCE................................................................................................................182
R.7. PENALITIES AND SURCHARGES.....................................................................................................................182
PART S: BOARDS OF SURVEY: CASH AND STAMP.............................................................................................. 182
S.1. GUIDELINE.....................................................................................................................................................182
S.2. BOARD MEMBERS.........................................................................................................................................183
S.3. OPERATION................................................................................................................................................... 183
PART T: SANCTION AGAINST PUBLIC OFFICERS................................................................................................. 185
T.1. GUIDELINES...................................................................................................................................................185
T.2. CIRCUMSTANCES FOR MISHANDLING OF PUBLIC FUNDS..............................................................................185
T.3. NOTIFICATION PROCEDURES.........................................................................................................................185
T.4. DEFINITION OF “PUBLIC OFFICER”................................................................................................................186
PART U: COPRA PAYMENT............................................................................................................................... 187
U.1. GUIDELINE....................................................................................................................................................187
U. 2. PAYMENT PROCEDURE AT TARAWA.............................................................................................................187
U. 3. OPERATIONAL AND PAYMENT PROCEDURE AT OUTER ISLANDS..................................................................187
U.4. PROCEDURES FOR THE TOP-UP (REPLENISHMENT) OF COPRA FUND AT OUTER ISLAND COUNCILS(TREASURERS ONLY) 189
PART V : FREGHT PAYMENT............................................................................................................................. 190
V.1. GUIDELINE.................................................................................................................................................... 190
V.2. PROCEDURE FOR PAYMENT...........................................................................................................................190
V.3. ACTION AT OUTER ISLANDS..........................................................................................................................191
PART W: DELMO PAYMENT............................................................................................................................. 191
W.1. GUIDELINE................................................................................................................................................... 191
W.2. PROCEDURES...............................................................................................................................................191
PART X: ACCOUNTING FOR STATE FUND........................................................................................................... 193
X.1. DUTIES AND RESPONSIBILITIES OF STATE FUNDS..........................................................................................193
X.2.RESPONSIBILITIES OF CENTRAL GOVERNMENT EMPLOYEES ON OUTER ISLANDS.........................................193
X.3. ACCOUNTING RESPONSIBILITIES...................................................................................................................194
X.4. AUDIT............................................................................................................................................................195
X.5. STATE FUND SUB-ACCOUNTS ON OUTER ISLANDS........................................................................................195
X.6. RECEIPTS INTO THE STATE FUND SUB-ACCOUNTS.........................................................................................195
X.7. EXPENDITURE PAID OUT OF THE STATE FUND SUB-ACCOUNT......................................................................195
X.8. FORM OF ACCOUNT......................................................................................................................................196
X.9. REMITTANCES BETWEEN CHESTS (RBCS).......................................................................................................196
X.10. RBCS SENT FROM OUTER ISLANDS TO MFEP...............................................................................................196
X.11. REQUEST FOR AN INCREASE IN THE MAXIMUM CASH HOLDINGS..............................................................197
X.12. AUTHORIZATION, CONTROL AND CLASSIFICATION OF EXPENDITURE.........................................................197
X.13. PAYMENT OF EXPENSES..............................................................................................................................198
X.14.CERTIFICATION OF EXPENDITURE................................................................................................................198
X.15. COLLECTIONAND RECEIPT OF REVENUE.....................................................................................................200
X.16. PAYMENT OF SALARIES &WAGES TO CENTRAL GOVERNMENT EMPLOYEES...............................................202
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X.17. TELEGRAPHICMONEY ORDER TRANSACTIONS.............................................................................204

X.18. BANK AGENCY.............................................................................................................................................207
X. 19. ENTRIES IN STATE FUND SUB-ACCOUNTS AND THEIR SUBMISSION TO THE ACCOUNTANT GENERAL........209
X.20. CONTROL OF ACCOUNTABLE DOCUMENTS................................................................................................210
PART Y: VEHICLES AND TRANSPORT................................................................................................................. 211
Y. 1. GENERAL CONSIDERATIONS.........................................................................................................................211
Y. 2. USE OF VEHICLES..........................................................................................................................................211
Y.3. UNAUTHORISED HOURS................................................................................................................................211
Y.4. AUTHORISED VEHICLE PASS...........................................................................................................................211
Y.5. GOVERNMENT LICENSE PLATES.....................................................................................................................211
Y.6. VEHICLE SIGNAGE..........................................................................................................................................211
Y.7. PROCEDURE FOR REFUELLING OF GOVERNMENT VEHICLES.........................................................................211
Y.8. CONTROL OF VEHICLES..................................................................................................................................212
Y.9. VEHICLE RUNNING SHEETS............................................................................................................................212
Y.10. PROTECTION TREATMENT FOR NEW VEHICLES:..........................................................................................212
Y.11. REPAIR AND MAINTENANCE OF VEHICLES...................................................................................................213
Y.12. DUTIES OF DRIVERS:....................................................................................................................................213
Y.13. DRIVER’S RESPONSIBILITIES AFTER AN ACCIDENT:......................................................................................214
Y.14. CONTROLLING OFFICERS RESPONSIBILITIES AFTER AN ACCIDENT.......................................................214
Y.15. HIRING OF VEHICLES....................................................................................................................................215
Y.16. INSURANCE OF VEHICLES............................................................................................................................215
PART Z: MISCELLANEOUS................................................................................................................................. 216
Z.1. OFFICE EQUIPMENT......................................................................................................................................216
Z.2. PRINTING AND STATIONERY SUPPLIES..........................................................................................................216
Z.3. LOSS AND DAMAGE TO PRIVATE PROPERTY AND PERSONAL........................................................................216
Z.4. INSURANCE...................................................................................................................................................216
Z.5. OPENING OF BANK ACCOUNT.......................................................................................................................217
Z.6. NOTICES PUBLISHED IN THE PRESS...............................................................................................................218
Z.7.TRAVEL........................................................................................................................................................... 218
Z.8. AIR TRAVEL....................................................................................................................................................224
Z.9. FINANCIAL REPORTING.................................................................................................................................229
Z.10. OVERSEAS MISSIONS...................................................................................................................................230
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PART A: GENERAL INTRODUCTION

A.1. TITLE AND AUTHORITY FOR ISSUE

(1) This operational manual shall be referred to as the Treasury Opearational Manual 2019. All previous
Instructions issued by the Treasury before the effective date of …..2019 are superseded.

(2) This operational manual is issued under the authority of section 16 of the Public Finance (Control and
Audit) Act of 1971 as amended on 31 Dcember, 2010; and is to be read in conjunction with that Act
and Financial Regulations 2011. For purpose of this Treasury Operational Manual, the Publc Finance
(Control and Audit) Act of 1971 is referred to as the Public Finance Act. This Operational Manual
shall come into force on ….day of …..2019.

(3) All references should be to the operational manual and the appropriate paragraph (if applicable), e.g.
Treasury Operational Manual A.1 (2) or TOM A.1(2).

A.2. APPLICABILITY OF OPERATIONAL MANUAL

This operational manual shall apply to all Government employees concerned with the control and use of public money,
stores or property as defined in section 2 of the Public Finance Act unless limited either by legislation or by special
exemption given by the Accountant General.

A.3. AMENDMENTS TO OPERATIONAL MANUAL

Amendments to this operational manual will be issued from time to time as required. Each officer who has in his
charge a copy of this operational manual shall ensure that all such amendments are incorporated in his copy.

A.4. AVAILABILITY AND KNOWLEDGE OF ORDINANCE,

REGULATIONS AND OPERATIONAL MANUAL
(1) Heads of Ministries and Departments are to ensure that sufficient copies of the Public Finance Act,
Financial Regulations, Operational Manual, and Treasury Circulars, together with amendments, are
always made available for reasonable access to every employee.

(2) Heads of Ministries and Departments are to ensure that Accountable officers and any other employee
dealing with public money, stores or property, acquaint themselves fully with the provisions of the
Act, Regulations, and Operational Manual. An employee’s ignorance of any provision will not be
accepted as an excuse for his failure to observe instructions in the Operational Manual.

(3) Additional copies of this operational manual may be obtained on application to the Treasury.
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A.5. EXEMPTION FROM OPERATIONAL MANUAL

Application may be made to the Accountanrt General for amendment to, or exemption from the Operational Manual
whenever it can be shown that the Operational Manual cannot be given effect to, or there is a gain in efficiency or
economy which can be obtained by the proposed amendment or exemption.

A.6. INTEGRITY OF EMPLOYEES

(1) Employees must carry out their duties impartially.

(2) Quotations, particulars of contracts, or any other information must not be divulged by Employees,
except in the course of their official duties.

A.7. WASTEFUL EXPENDITURE OR METHOD

(1) If any Government employee finds that expenditure is being incurred which, in his opinion, might be
reduced or checked by a change in methods or in any other way, he must immediately draw the
attention of the Ministry or Departmental Head to the matter, and the Ministry or Departmental Head
shall make a report to the Accountant General, together with his own recommendations.

(2) The attention of all employees should be drawn to National Conditions of Service and Regulations in
which the need for the strictest economy is emphasized in the use of stationery stores such as pens,
paper, staplers, paper clips etc., and other supplies.

A.8. INFORMATION REQUIRED BY THE TREASURY

(1) It is the duty of every Head of a Government Ministry or Department, Accountable Officer or/any
other employee of the Government, to supply all information which the Accountant General may
require from time to time regarding the receipt and payment of public money, the accounting for such
money, the procuring of services, the purchase, custody and issue of Government stores and any other
matters relating to public property held by any ministry or department of the Public Service of Kiribati
Government.

(2) The Accountant General may at any time, instruct in writing any Treasury officer, or other person, to
inspect accounting methods or procedures in use, or books, accounts, contracts, and other documents,
stores and supplies, or other public property held by any ministry or department. The Ministry or
Departmental Head is to provide facilities for inspection upon production of the written instruction.

A.9. DISAGREEMENTS BETWEEN DEPARTMENTS

Any disagreement between ministries or departments on financial or accounting transactions is to be referred to the
Treasury for determination except when directions are given elsewhere or in this operational manual.
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PART B: CONTROL OF EXPENDITURE

B.1. APPROPRIATION OF PUBLIC MONEY

(1) Public money is not to be spent from the Consolidated Fund except upon the authority of a warrant signed
by the Minister of Finance.

(2). No warrant shall be issued by the Mnister of Finance for the purpose of meeting any expenditure unless:-

(a) The legislature has approved the expenditure by way of an Appropriation Act; or

(b) The expenditure has been authorized in accordance with the provision of section 110 or 111 of the
Constitution, prior to passing of an Approrpiation Act;

(c) An Unforeseen Expenditure authority has been given in accordance with section 109(4) of the
Constitution; or

(d) There is Statutory Authority for the expenditure to be made as statutory expenditure 1.

(3). No money shall be issued from the Development Fund except in accordance with a warrant signed by the
Minister of Finance.

(4). No warrant shall be issued by the Minister of Finance for the purpose of meeting any expenditure from
Development Fund unless:

(a). The legislature has approved the expenditure by way of an Appropriation Act; or

(b). The expenditure has been approved in accordance with the provision of rules 4, 5, 6 and 7 of the
Development Fund Rules 1983 under Schedule 2 of the Public Finance (Control and Audit) Act.

B.2. ANNUAL ESTIMATES AND APPROPRIATIONS

(1) Instructions for the preparation of the Annual and Supplementary Estimates for Recurrent and
Development Budgets are issued by the Financial Secretary each year.

(2) Draft Estimates which include Recurrent and Development Budgets are strictly confidential until they have
been tabled in the Legislative Assembly.

(3) The Annual Appropriation Act when passed gives the Government authority to spend up to but not
exceeding the amounts set out in the Appropriation Act.

(4) Heads of Ministries and Departments and Accountable officers are required:

1 Statutory expenditure refers to expenditures that are charged on the public funds by the Constitution and other enactments. These
expenditures are regarded as statutory obligations and therefore do not require prior approval of Parliament. Examples are debt
servicing, pension payments, salaries of certain public officers such as the Auditor General and Judges of the Court of Appeal,
transfers to statutory funds such as Nugatory payments (e.g judgment debt).
 | 12

(a) To maintain close watch over commitments and expenditures to ensure that they do not exceed a Head or
sub-head unless prior approval to a Virement or Unforeseen Expenditure has been obtained. Heads of
Department will be held personally responsible to ensure that a proper ministerial/departmental control is
maintained over expenditure;

(b) To keep such records as may be necessary, or as the Financial Secretary or Accountant General may direct
to ensure that no over expenditure occurs.

B.3. PREPARATION OF ESTIMATES

B.3.1.Ministry and Department Budget Estimates
The Budget Estimates comprise of Recurrent and Development Budgets. The Recurent budget presents the projections
of revenues and expenditures for each head and subhead for the ensuing financial year and Forward Estimates for the
three years following that financial year. The Development budget provides the estimate of revenue and expenditure
for projects presented for the next financial year and three outer years. The estimates shall be prepared each year in
accordance with instructions issued by the Financial Secretary. In preparing the Draft Recurrent and Devlopment
Estimates, the following points shall be observed by the Ministries/Departments:

(1) The dates set for submission of Draft Estimates for receipts and payments on Recurrent Budget and
projects revenues and expenditures on Development Budget are complied with;

(2) Estimates are submitted in the prescribed forms;

(3) Before submission, the Draft Estimates are thoroughly checked to ensure that:

(a) Provision is made for all expenditures known to come up during the year;
(b) Provision is made for all anticipated expenditure as accurately and realistically as possible;
(c ). The recurrent expenditure estimates are divided into expenditure on Personal Emoluments, Other
charges and special expenditure;

(d). Revenue is estimated as accurately and realistically as possible;

(e). Development projects funds and expenditures are reliastically projected base on fund availability and
projects implementations;

(f). Item-names and descriptions are in accordance with the Budget Classification/Chart of Accounts.

(g). The Budget Classification/ Chart of Accounts are catered for the extracting of informtion required for
the climate change analaysis of the funds and expenditures on adapatation, mitigation and resilient
measures.

(h). Explanation must be provided for any significant change from the current year’s estimate on the
estimate for revenue or expenditure.

(4) All ministries estimates submitted to the Financial Secretary shall be prepared in consulation with the
minister who is associated with the service provided for in those estimates.
 | 13

B.3.2.Forward Estimates
B.3.2.1. System of Forward Estimates
A forward estimates developed within a medium-term macro-fiscal framework must provide the ongoing link between
the medium term economic and fiscal framework and the specific provisions of annual budgets. This would help in
translating the strategic plans of the Government into budget priorities and minimizing the risk that the projects
initiated one year are not constrained in future years because of unanticipated fiscal constraints.

Forward estimates should quantify Cabinet’s policy agenda and spending priorities, and enable implementing
ministries to plan and implement accordingly.

The budget submission shall include projections of revenues and expenditures for both Recurrent and Development
budgets and the following three years. The Forward estimates shall comprise of the following:

(a) The current basic costs of producing all existing outputs under present Government policy for the three
years beyond the current financial or planning year;
(b) the revenues expected to be earned over the same period (initially assuming no changes in the rates of
taxes, fees and charges) but including adjustments for increases or decreases in the various bases for taxes
and charges; and
(c) the impact of any new policy decisions of the Government in respect of revenues and expenditures.

B.3.2.2. Forward Estimates and Medium-Term Macro-Fiscal Framework

Medium-term budgeting must be undertaken from forward estimates and they are prepared within the constraints of
medium-term macroeconomic forecasts and a medium-term macro-fiscal framework that can assist in ensuring
economic sustainability and stability.
Ministries’ forward estimates provided will serve as the basis for a rigorous analysis to ascertain whether they will
have an adverse impact on the projected fiscal framework. The detailed forward estimates submitted by the various
ministries and agencies will be analyzed by the National Economic and Planning Office to:
(a) ensure that they have been computed correctly and prepared consistent with guidelines issued; and
(b) determine the implications for the maintenance of sustainable medium-term macro-fiscal policy.

B.3.2.3. Forward Estimates not a commitment

The baseline estimates represent the estimates of the cost in the coming and future years of maintaining existing
expenditure policies in terms of the fiscal and macroeconomic circumstances at the time of preparation. While the
estimates may serve as a starting point for the baseline budget estimates in forthcoming years, the forward estimates
for the following years are not a commitment by the government to provide a specified level of funding for particular
purposes in those years.

B.3.2.4. Review of Forward Estimates

The forward estimates shall be comprehensively reviewed and updated at least twice a year. The first in June and July
in connection with the Budget mid-year review, and the second in October and November in connection with the
preparation of the budget estimates for the following year.
 | 14

B.4. AUTHORITIES FOR EXPENDITURE AND DELEGATION

(1) The authorities for appropriating expenditure out of the Consolidated Fund include:-

(a) An Appropritation Act.

(b) A General Warrant issued by the Financial Secretary.
(c) An Accounting Warrant issued by the Accountant General to the accounting officer.

(2) The Minister of Finance has the discretion to limit or suspend at any time any expenditure on a General
warrant he has issued, except statutory expenditure, with or without cancellation of the Warrant if, in his
opinion, it is required to do so on financial exigencies or the public interest 2.

(3) No expenditure on any subhead in excess of the amount authorized in the approved Estimates is allowablle
except as provided in TOM B.11.2.

(4) An Accounting Officer may authorize the over establishment of existing posts against vacancies in posts of the
same cadre but graded higher, provided the over establishment of junior posts does not exceed the number of
vacancies in the establshiment of the senior posts even though availbale funds may be sufficient to cover more
posts.

.
(5) The Accountant General and the Departmental Heads may, with the approval of their Minister,
delegate in writing, all or a specified part of their authority to one or more officers of their department. Such
delegation, however, shall not in any way diminish their responsibility for expenditures incurred by the
person(s) to whom the authority has been delegated.

(6) The Ministers, the Accountant General, the Departmental Heads and the officers to whom the
authority to authorize expenditures have been delegated are called "authorizing officer". An authorizing
officer, before authorizing any expenditure, shall satisfy himself on the following points:

(a) He has the authority to authorize the particular expenditure;

(b) Sufficient funds are available in the Head and sub-head concerned to cover the amount of the expenditure;
(c) Expenditure to be authorized is essential and is in public interest;
(d) Expenditure to be authorized is not wasteful, and represents the most economical and efficient way of
achieving the purpose for which the expenditure is to be made.

(7) All submissions for financial approval are to be supported by as precise and accurate estimates of
costs as possible, and a proper description of the work to be done or the stores to be procured. Where the work
will take time to complete, approval, in principle, shall be obtained for the expenditure of the total work, to be
followed by specific approvals as firm estimates become available. Under no circumstances, an order for the
work to be done or stores to be procured shall be split into parts in order to bring it under a lower approval
level.

(8) Part 2 of the Procurement Act states the purchasing authorities for different types of purchases. It lists
thresholds and the competent authority that is able to approve each type of purchase under various levels.

2 Enabled by section 5(3) of the Public Finance (Control and Audit) Act, Amendment 2010.
 | 15

B.5. RECORDING AND MONITORING OF EXPENDITURES

The Treasury is using the Attache accounting system with support from the MS Access program for recording and
monitoring of the government expenditures. The supplier module in the Attache provides the mechanism for
management of payment and recording of all expenditures against each Head. Its main account module generates the
General Ledger accounts and trial balance. The Access program complements the operation of the Attache by
providing those modules that are not in the Attache, but that are required for the operation of the government
accounting information system.

All payments are processed through MS Access and made payment through manual cheques and on line payment
using the ANZ’s Transactive web-based payment application. The Access program provides the modules for recording
and controlling of the expenditure commitments which arises when the purchased order is raised at the Ministry level.

The Ministries/Departments are responsible for coding with relevant account codes of claims for payment, and
preparing of the payment voucher for payment at Treasury, and advising Treasury for any necessary corrections.

The Treasury is responsible for processing of claims for payment through the supplier module and updating of the
computerized accounts payable records, costing of payments to the relevant General Ledger or Sub-Ledgers and
resolving ministries queries, if any. Attache accounting system has modules for imprest account, payroll and salary
advance. The Attache generates the general ledeger and the trial balance for preparation of the annual accounts
through Access program.

B.6. ACCOUNTING AND PROCESSING CONTROLS OVER

COMMITMENTS AND EXPENDITURES
(1) Checking of funds availability prior to commitment of funds by raising a purchase order and/or
payment of creditors’ claims;
(2) Certification of goods and/or services received by properly authorized officer;

(3) Matching of invoice details with goods/services received, certification and purchase order (if
appropriate);
(4) Mathematical check of accuracy of creditors’ invoices;
(5) Checking to ensure invoices have not been previously paid;
(6) Verification and approval by authorized officers of all creditors’ payments;
(7) Payments processed only on the basis of approved claim vouchers and original invoices or
appropriately certified documentation;
(8) Creditors’ transactions are entered and processed completely, accurately and only once through the
creditors payment system;
(9) Correct processing of VAT and Withhold tax;
(10) Prompt and timely processing of creditors’ payments and charging them to the proper accounting
period;
(11) Payroll payments are made to the proper employee or other recipient;
 | 16

(12) Cheques signed by authorized officers (minimum of 2 signatories);

(13) Release of creditors cheques to authorized officers only;
(14) Regular and timely review of expenditure by Departmental senior accounting
officer.

B.7. COMPUTERISED SYSTEM CONTROLS

(1) Systematic/periodic data used in the supplier payment system is regularly reviewed and approved by
an authorized officer;
(2) Access to suppliers processing functions and data is restricted to authorized personnel;
(3) Amendments to system data are properly authorized and are entered and processed completely and
accurately.

B.8. BUDGETARY CONTROL

Budgetary control means monitoring of expenditures to ensure that legal appropriations are not exceeded. Monitoring
requires that reports be prepared, and reporting requires that data and information be accumulated. Expenditure and
revenue information is accumulated by the Government Financial Management Information System and reports are
available to managers in ministries and departments to assist them to monitor their budgets. However, the collection
of data on output delivery and achievement of performance standards is primarily the responsibility of the
management in each ministry or department.

B.8.1.Attache and Access supported Accounting System

The Government Financial Management Information System is operated by the Attache and Access softrwares and
provides the means for budgetary control and furnishing of various financial reports and the annual public accounts.
The Attache and Access have provided the applications for general ledger, accounts payable, accounts receivable,
purchasing and payroll, and bank reconciliation. Micrsoft Excell is also used for various applications.

At the end of each month Treasury produces the general ledger accounts on the recurrent and development
expenditures and revenues and send to all ministries for reconciliation with their vote ledgers on actual spending and
revenue collection.

B.8.2.Budget Monitoring Reports

Treasry will produce the following reports on a monthly basis for the purpose of monitoring of the budget
performance of the ministries:

(a) the Budget Comparison Report; and

(b) the Expenditure Report

B.8.2.1. Budget Comparison Report (BCR)

The Budget Comparison Report will be produced to monitor revenue (including cost recovery) and expenditure
outturns for each head and sub-head for services and goods provided by third parties and transactions on behalf of the
 | 17

republic. The BCR report compares actual expenditure and revenue totals at the aggregate level for the previous month
on a year to date basis against budget allocations.

The BCR will be presented in the format that columns (1) and (2) of the report show expenditure recorded on a year to
date basis in the Treasury payments system. Column (3) shows in percentage terms the total of funds expended to the
end of the current month as a proportion of the original budget allocation for that purpose. Column (4) shows the
annual budget for that head and sub-head. Funds remaining are shown under column (5).

How managers should use the BCR report

In monitoring the Budget Comparison Report, financial managers should examine the following:

• Check whether total expenditure (column 2) for each head and sub-head exceeds its pro rata percentage
of budget which is 8.3% per month; e.g., check that column (2) does not exceed 25% of budget at the
end of March or 58% of budget at the end of July;
• Where expenditure exceeds pro rata, investigate the cause of the over-expenditure. In making this check
closely examine salary and wages expenditure, bearing in mind that there are 2 pay periods for 10
months and 3 pay periods in 2 months of each year. Also bear in mind that overexpenditure may be
caused by large single payment for capital items or large overseas orders or requisitions for operating
expenses;
• Where over-expenditure has occurred, departmental managers should consider whether to:
(a) slow down or stop spending from the sub-head for a period; or
(b) reallocate funds from another item (although there is restriction to the reallocation of personnel or
capital funds as staffing and capital decisions are controlled by Public Service Office and Cabinet
respectively); or
(c) to seek approval to transfer (virement) funds from another sub-head in accordance with section
23(2) of the Public Finance Act;
• Check whether revenue has reached pro rata for the month and advise the Ministry of Finance of the
action proposed to be taken to address that shortfall.

B.8.2.2. Monthly Expenditure Report (MER)

The MER provide information for the ministries and the Ministry of Finance on expenditures and revenues at the item
level. This information is particularly important for ministry accounting officers and manager to clearly understand
what inputs are being consumed to produce their ministry outputs.

The budget allocations for the ministries based on three main expenditure categories (.i.e. personnel emoluments;
operating costs; and special funds) will be reported on, and also the line items for each of them. As part of its
maintenance of the integrity of those budget allocations, ministries should use the MER to monitor expenditure against
those budget allocations on an ongoing basis.

B.9. COMMITMENT REPORT (CR)

In addition to the Budget Comparison and Monthly Expenditure Reports mentioned in operational manual B.8, a
Commimnet Report will be produced by Treasury that separately identifies outstanding commitments and
expenditures and thereby identify the extent to which new commitments can be entered into by the ministry without
breaching expenditure limits.
 | 18

This report provides information for the ministries and the Ministry of Finance on actual expenditures and
commitments, % utilization of budget allocations and the remaining balance at the item level. This information is
particularly important for ministry accounting officers and finance managers to clearly understand the amount of funds
already committed and the balance available for new commitments.

B.10. QUARTERLY SUMMARIES

The Treasury will prepare a summary of receipts and payments of the Consolidated Fund for the March, June and
September quarters of each financial year. The summaries are to be prepared within one month from the end of each
quarter and published for public information. These reports will also be submitted to Cabinet for their information on
the budget perfornance for each quarter. These reports will improve the government financial accountability and
transparency to the public.

B.11. APPROPRIATION, VIREMENT AND DE-RESERVATION

B.11.1. Appropriation
Appropriation is made in the Estimate for each of the following:

(a) Each category of sub-head of expenditure for personal emolument, operation, and other
commitments for each ministry’s head;
(b) Loans and capital contribution provided for in the sub-head for “Other Commiments”, and
(c) Development fund.

As a general rule, money can be spent only in relation to an approved appropriation and for no other purpose.

B.11.2.Virement – Transfer between Head and sub-head

(1) If additional fund is required to be transferred between expenditure items within a sub-head an accounting officer
is required to advise the Accountant General of such fund transfer for his information, except such line item that the
Accountant General has declared in writing as prohibited to use for tranfer of fund to or from.
(2) If additional fund is required on a sub-head or to create a new sub-head which can be met from an excess fund
within the same head an accounting officer can apply to the Financial Secretary for ministerial approval by means of
virement on form A.F.5. The Financial Secretary will issue a Virement Warrant provided that:
(a) total provision for the Head is not exceeded;
(b) reallocating to create a new sub-head is within the ambit of the Head.
(3) virement will not normally be made between a personal emoluments sub-head and other charges;
(4) the mere fact that funds are not expended under one suh-head is not a sufficient reason for incurring addtional
expenditure under another sub-head;
(5) the additional provision authorized by a virement warrant shall be entered into the vote ledger on receipt of the
warrant. Similarly, savings shall be written off against the original provision;
(6) copies of Virement Warrants will be forwarded to the Accountant General and the Auditor General; and
 | 19

(7) application for virement shall not be made within the first four months of a financial year.

B.11.2.1. Types of Virement and the Prescribed Forms

For transfer of funds between sub-heads the request shall be submitted on Form A.F.5.

B.11.3. De-Reservation
1. Applications for the release of the provision included in the approved Estimates but reserved by exclusion
from the Accounting Warrant shall be made to the Financial Secretary on an Application for De-reservation
Form AF 7.

2. The Financial Secretary’s approval for the de-reservation of any sum shall be conveyed to the Accountant
General by providing him with an approved copy of the form of application.

3. The Accountant General, upon receipt of the approved de-reservation form from the Financial Secretary, shall
issue the Accounting Warrant authorizing the spending of the monies previously reserved.

B.12. OVEREXPENDITURE OF VOTE

(1) If it becomes apparent that the expenditure charged to a Head will exceed the amount appropriated for that
year or it is required to create a new sub-head which cannot be provided for through virement , the
accounting officer shall immediately advise the Minister of the department concerned and the Financial
Secretary. The Financial Secretary will advise one of the following actions to meet the situation:

• To restrict expenditure;
• Include the additional amounts in Supplementary Estimates; or
• To seek unforeseen authority.

(2) The accounting officer can apply for a Supplementary Estimate on form A.F.6. Application for
supplementary provision will be considered only where it can cleary demonstrate that:

(a) the provision of the additional funds is in the public interest;

(b) the provision cannot be delayed to the next Estimates;

(c) the need could not reasonably have been foreseen when the current Estaimates were
framed; and

(d) the need to create a new sub-head for a new service outside the ambit of the Head.

(3) The additional funds required than those for the unforeseen expenditure are included in the Supplementary
Appripriation Bill to be tabled at the Legilsature for approval.

(4). On approval of the Supplementary Estimate the Financial Secretary shall issue the General Warrant to
the Accountant General for the authority to use such sums from the Consolidated Fund.
 | 20

(5). No expenditure shall be incurred nor shall commitment be entred into by an accounting officer in
anticipation of approval being given to virement, supplementary appropriation or any other variation to the
authority conveyed to him by an Accounting Warrant3.

(6). Authority to incur Statutory Expenditure will be issued to the Accountant General by the Financial
Secretary on Form A.F. 84.

(7) An Accounting Officer who has been authorised to incur appropriated expenditure may authorize
another accounting officer to incur expenditure on his behalf. This will be done by the vote controller
issuing a Secretary’s Warrant on Form AF 9 to the other accounting officer concerned, with a copy to the
Accountant General andAuditor General. The Secretary’s Warrant must show full details of the:
 Head and subhead, and
 total amount of authorized expenditure5.

(8). Secretary’s Warrants shall not be issued to make payments that could conveniently be paid by the
Accounting Warrant holder under normal payment procedures. An accounting officer who has been issued
with the Secretary’s Warrant may not sub-allocate the authority of the warrant.

(9). Accounting Warrants and Secretary’s Warrants and all other such documents authorizing accounting
officers to incur expenditures as a charge on the Consolidated Fund shall cease absolutely on the last day of
the financial year to which they relate, if no earlier date is indicated

(9). The responsibility for keeping the expenditure within the appropriation limits shall be primarily of the
Heads of Departments.

B.13. UNFORESEEN EXPENDITURE

(1) According to section 109(4) of the Constitution, ‘Unforeseen Expenditure’ means any expenditure incurred due to
exceptional circumstances, with the approval of the Ministe of Finance, in excess of or without the appropriation of
the Legislative Assembly during the period between the passing of the Appropriation Act for any financial year and the
end of that year.

(2). The unforeseen expenditure will be provided through Contingencies Warrant provided that:

(a) No provision exists for it or the existing provision is insufficient;

(b) The required provision cannot be provided through reallocation within heads of expenditure under section 23
of the Public Finance Act; and

(c) It cannot be deffered to the next budget and is in the public interest.

(3). The Minister of Finance sign and issue the Contingencies Warrant in anticipation of an appropriation from the
legislature for payment out of the Consolidated Fund to meet that need and shall report forthwith the issuance of such
Contingencies Warrant and the underlying reasons to the Cabinet.

3 Enabled by FR 8.14.
4 Enabled by FR 8.15
5 Enabled by FR 8.1.
 | 21

(4). The total sum authorised for the Contingencies Warrant shall not exceed at any one time an amount of $1,000,000,
and shall be included in a supplementary estimate to be presented for the next meeting of the legislature.

(5). On receipt of the endorsement of the Contingencies Warrant by the Minister of Finance, the Financial Secretary
can authorize the Accountant General to make an advance from the Consolidated Fund in anticipation of
supplementary appropriation.

(6). On receipt of the Contingencies Warrant the Accountant General shall issue an Accounting Warrant to authorize
the accounting officer to send monies specified in the Contigencies Warrant.

B.14. EXPENDITURE IN ANTICIPATION OF APPROPRIATION

1. If an Appropriation Bill has not become law by the first day of the financial year to which it relates, the Finance
Minister may authorize expenditures out of the Consolidated Fund, under section 110 of the Constitution, as are
considered necessary for the continuance of any services, until an Appropriation Bill becomes law.

2. The expenditure so authorized shall not exceed 4 months of the level of these services provided in the previous
financial year.

B. 15. EXPENDITURE IN ANICIPATION OF APPROPRIATON AFTER

THE DISSOLUTION OF THE LEGISLATURE

If the legislature has been dissolved before any provision or any sufficient provide is made for carrying on of
the government the Minister of Finance may issue a warrant for the payment out of the Consolidated Fund as
necessary for the continuance of the public services but at a level not exceeding 3 months of these services in
the previous financial year, until the next Appropriation Bill becomes law.
The Minister of Finance shall table a statement of the sums so authorized at the legislature and shall be
included, under the appropriate heads, in the next Approrpiation Bill.

B.16. WRITE-OFF OF LOSSES

(1) The Accountable officer shall report promptly to the Financial Secretary, copied to the Accountant General
and Auditor General, through his head of department, any:

(a) Losses or deficiencies of public moneys;

(b) Irrecoverable amounts of revenue;
(c) Irrecoverable debts and overpayments;
(d) The value of lost, deficient, condemned, unserviceable or obsolete public property; and
(e) Investments written off

(2) The Financial Secretary may, following any investigation that he may consider necessary in a particular
case:
 | 22

(a) submit to Cabinet, after consultation with the Minister of Finance, those losses considered
necessary to write-off with a proposed resolution to table at the Legislature for approval; and

(b) take such action under section 47 of the Public Finance Act (Surcharge, offences and discipline) as
he considers appropriate.

(3) All amounts approved for write-off by the legislature shall be reported in the public accounts.

B.17. NUGATORY EXPENDITURE

(1) Nugatory expenditure is an expenditure against which no goods or services are received e.g.
payment by way of compensation for loss, injuries or damages to property or person.

(2) Nugatory expenditure which is charged to a special item in the Estimates need not be written off, e.g.
charges against an item "compensation" need not be written-off.

(3) If nugatory expenditure has been charged to Unforeseen Expenditure, write-off action is not necessary.

(4) All other nugatory expenditures shall be written-off.

(5) For nugatory expenditures to be written off, a request for write-off with memorandum of the details shall
be submitted to the Financial Secretary immediately after the expenditure has been incurred. The Financial
Secretary will arrange for the approval of the legislature.

B.18. WORDING OF CONTRACTS TO BE APPROVED BY ATTORNEY

GENERAL
The wording of all contracts entered into by the Government is to be approved by the AttorneyGeneral before the
documents are signed.

B.19. CABINET SUBMISSIONS

(1) These must be made in accordance with Cabinet Secretariat Circulars.

(2) Before submissions are sent to Treasury for the usual Treasury report, ministries and departments must first
arrange for their Minister to sign the submission.

(3) Wherever possible departments should consult the Treasury to arrive at a consensus on the submissions to
be made.
 | 23

PART C: DEPARTMENTAL ACCOUNTING

C. 1. ACCOUNTABLE OFFICER
"Accountable officer" as defined in the Public Finance Act means the following person, who shall be responsible to
the Accountant General in the manner laid down in the Public Finance Act -

(a) Any public officer, including an accounting officer, concerned in or responsible for the collection,
receipt, custody, issue or payment of public moneys, stores, stamps, investments, securities or
negotiable instruments whether the same are the property of the Republic or on deposit with or
entrusted to the Republic or to any public officer in his official capacity either alone or jointly with any
other public officer or any other person;

(b) A head of department or person appointed to act in the post of head of ministry/department;

(c) A person who is required to render an account under this or any other Act for any public moneys;

(d) A person who by any Act, financial regulation, Treasury Instruction or Operating Manual or by virtue
of any appointment, is charged with the duty of collecting, receiving or disbursing any public money
or trust money or who actually does receive or disburse any public money or trust money; and

(e) A person who is charged with the purchase, receipt, custody or disposal of, or the accounting of, any
public money or public property including stores, stamps, investment; securities or negotiable
instruments.

C.2. RESPONSIBILITIES OF FINANCIAL SECRETARY

The Financial Secretary shall be the administrative head of the Treasury with responsibility for administration of the
Public Finance Act. The Financial Secretary shall be the principal financial adviser to the Government. The specific
responsibility of the Financial Secretary is to provide financial and economic advice to the Government, and prepare
the Estimates and supplementary estimates

C3. RESPONSIBILITIES OF ACCOUNTANT GENERAL

1. The Accoutant General exercises the general management and supervision of all accounting operations of
Government under the direction of the Financial Secretary and may from time to time give such directions and
issue such instructions under section 16 of the Public Finance Act as may appear to him to be necessary and
expedient for the proper carrying out of the Public Finance Act and Financial Regulations.

2. The Accountant General shall be responsible for the following duties:

(a) provide the periodic and annual financial statements;

 | 24

(b) set accounting policies, practices and procedures for all financial management practices and information
required by the Public Finance Act in accordance with generally accepted accounting principles and
practice;

(c) ensure the maintenance of a system to operate the accounting systems to account promptly and properly for
all moneys received and paid by government;

(d) coordinate and supervise and, where appropriate, effect the purchase, receipt, custody, distribution, use,
disposal, and inter-departmental transfer of public property;

(e) coordinate and monitor systems of financial management, internal control and reporting in all Government
departments; and

(f) exercise and maintain control and direction of all matters relating to the financial management of the
State in accordance with the Government policy.

(g) Refuse payment on any voucher wrong or insufficient in content, or that contravenes any regulations,
directions or instructions properly made or given under this or any other Ordinance for the
management of public moneys, or that is in his opinion in any other way unacceptable as a charge
on the public moneys;

(h) report to the Minister in writing any apparent defect in department control of revenue, expenditure,
cash, stamps and other property of the Republic that may be brought to his notice;

(i) ensure, in so far as it is practicable, that adequate provision is made for the safe custody of public
moneys and stamps and the control of property of the Republic.

(j) Initiate arrangement for surprise incpections to be made to the accounts of accountable officers and
then report to the Financial Secretary any material irregularity connected with the public accounts
that may come to his notice.

(k) Ensure the up to date maintenance of the following documents and records by officers working in
Accounting Division headquarters under his supervison:

i. Principal and Subsidiary Journals and Ledgers Abstracts;

ii. Loan Register;
iii. Investment register;
iv. Personal Emoluments Records; and
v. Pensions Register.
 | 25

C.4. RESPONSIBILITIES OF HEADS OF DEPARTMENTS

As Accountable Officers, the heads of departments shall be responsible for the following in relation to their
departments that all accountable officers of the department are aware of their duties and responsibilities
under the Public Finance Act and any other Acts for which the department is responsible:

Provide advice on financial management to the Responsible Minister;

Maintain properly all accounts and records relating to the functions and operations of the department;

Take all necessary precautions to safeguard the collection and custody of public moneys;

All expenditures, including salaries and other personal emoluments, are properly authorised and applied to
the purposes for which they are appropriated;

No over-expenditure or over-commitment of funds occurs and a review is undertaken each month to ensure
that there has been no such over-expenditure or over-commitment;

Collection of public moneys in according to approved plans and Estimates;

All expenditures are incurred with due regard to economy, efficiency and effectiveness and the avoidance of
waste;

All necessary precautions are taken to safeguard public property;

All taxes, duties, fees or charges imposed by legislation for which the department is responsible are collected
promptly and to the fullest extent;

All taxes, duties, fees or charges imposed by legislation for which the department is responsible are reviewed
and reported to the Financial Secretary in the specified format at least once in each year in order to establish:

Whether the level of such taxes, duties, fees or charges is adequate; and

Whether such taxes, duties, fees or charges should be varied and, if so, by what amount.

Any charge intended to be made for supply of goods or services;

Information required by the Public Accounts Committee is submitted to that Committee accurately and
promptly;

Estimates and forecasts in respect of collection and expenditure of public moneys are prepared in the format
specified in the Budget Guideline from Ministry of Economic, Finance and Development, circulars or
operating Manuals;
 | 26

After the first six months of each financial year and at such other times as required by the Financial
Secretary submit reports, as specified in Operational Manual, on the management of funds provided for the
achievement of the Ministry or Department's outputs and the collection of revenues;

An effective system of internal control is developed and maintained and, unless the Accountant General
approves otherwise in circumstances provided for in Operational Manual Treasury, an effective internal audit
function is developed and maintained; and

All Accountable officers of the department are aware of their duties and responsibilities under the Public
Finance Act and any other Acts for which the department is responsible.

All accountable officers receive clear instructions for carrying out the financial and accounting aspects of
their duties and such instructions must conform to the Public Finance Act, financial regulations and TOM
and shall not conflict with Government policy or the accounting procedures approved by the Accountant
General.

Where the services of any accounting officer are dispensed with, or where any accounting officer receives
leave of absence, or otherwise is relieved of his duties, the Ministry or Departmental Head shall immediately
advise the Accountant General of that fact.

The head of department must refer to the Accountant General any matters affecting the accounts of their
offices which are not provided for in the financial regulations or TOM , and any departure from the
prescribed accounting routine must receive the prior approval of the Accountant General.

The Accountant General and the Auditor General must be advised by the head of department whenever a
new office is opened, and whenever an office is closed. In the case of a new office the advice will include the
place at which the office is situated, the designation of the officer in charge and a brief description as to the
scope of his duties. When an office is closed full details will be given as to the disposal of the cash
accounting records and stores held in the office.

The responsibility of a head of department is not derogated or reduced by reason of any delegation of
functions by him to another person(s).

C.5. DUTIES OF AN ACCOUNTABLE OFFICER

It is the duty of an Accountable officer to:

(a) Make himself thoroughly familiar with the provisions of the Public Finance Act, financial regulation,
Operational Manual, Instructions and Circulars.

(b) Exercise supervision over the receipts of public recevenue and ensure the punctual collection of public
revenue by conducting regular reviews and taking continuous arrears action.
 | 27

(c) Make proper provision for the safe keeping of public money, securities, stamps, counterfoil receipts,
licenses and accounting forms, receipt books, electronic financial records etc.

(d) Bring promptly to account under the proper item all public monies received by and accountable to him
within the time laid down.

(e) Exercise strict supervision over all officers under his authority entrusted with the receipt and
expenditure and financial and accounting duties for public money or control of stores or property.
Maintain an efficient check carried out against the occurrence of fraud, embezzlement, theft, and
carelessness and bring to notice any incompetence and repeated carelessness; take precautions by
surprise inspections.

(f) Take care that no payment is made which is not covered by the proper authority, expressed or referred
to on the voucher relating to it, and report any waste or extravagance which comes to his notice.

(g) Check all cash and stamps in his charge, and verify the amounts with the balances shown in the Cash
Book and stamp register, at intervals of not more than one month.

(h) Immediately bring to account as a receipt any cash or stamps found in his charge in excess of the
balances as shown in the cash book or stamp register.

(i) Promptly make good any deficiency in cash or stamps for which he is responsible and make an
endorsement that has done so on the relevant page of his cash book or stamp register, and to report the
circumstances of the deficiency to the Accountant General and Auditor General.

(j) Promptly charge in his accounts under the proper heads and sub-heads of the Estimates or other
approved classifications all disbursement of the government.

(k) Prepare and as when required such statements and returns detailed as may be required by his
Departmental Head or the Accountant General or the financial regulations and TMO.

(l) Ensure that all books of account and records in his charge are correctly and punctually posted and
reconciled and are kept up-to-date.

(m) Report to the Accountant General and the Auditor General, through his Departmental Head, any
apparent defect in the TMO of revenue collection or any other means by which it appears that
financial and accounting procedures might be improved, or any apparent waste or extravagance in
expenditure, which comes to his notice in the course of his accounting duties.

(n) Produce when required by the Accountant General or his staff, or the Auditor General or his staff, all
cash, stamps, securities and account books, records and vouchers in his charge, and grant every
facility for such surveys of cash, stamps or stores and to supply such information whether it is
electronically or manually as may be required by them.

(o) Answer and return without delay all Treasury or Audit queries directed to him giving in full the
particulars or information required.
 | 28

(p) Be courteous and impartial in his dealings with the public in his official capacity and make
arrangements, compatible with the financial regulation and TOM to facilitate the transaction of
business with the public.

C.6. DUTIES OF AN ACCOUNTING OFFICER

1. An Accounting Officer must either personally carry out, or must specifically charge an officer on his staff to carry
out the following duties:-

(a) to ensure the maximum degree of control over provision voted for the service of his Ministry or office
and, in particular, to ensure that funds are properly applied without waste to the purposes for which
they are voted;

(b) to ensure that the work of his Ministry or office is carried on within the framework of approved policy,
without waste;

(c) to furnish promptly to the Financial Secretary, the Accountant General or the Auditor General any
information called for concerning finance, accounts and stores relevant to his department or office;

(d) to authorize all payments from the Heads or other funds under his control;

(e) to ensure the maintenance of his ministerial accounts and financial records in accordance with the
TOM and any instructions issued by the Accountant General;

(f) To arrange for a system of internal checks and internal control covering all aspects of expenditure,
stores and Government property within his Ministry or office and to ensure that it is adhered to rigidly.

(g) To be responsible for the operation of any ministry constituted as self accounting under the general
supervision of the Accountant General.

(2). An accounting officer may also be an accountable officer with duties as defined in TOM C.4..

C.7. REVENUE COLLECTOR

1.The term “revenue collector” means an officer who is entrusted with an official receipt or licence book for the
regular collection of some particular form of revenue or other public money due to or accepted by Government and
who is required to keep a cash book, and whose duties are defined inter alia in this TOM.

2.An officer who is not a revenue collector or cashier shall avoid accepting money tendered to him by a member of the
public during the course of his duties. Should an officer, through the post, find himself in possession of government
monies for which he is not specifically responsible, he shall lodge them without delay with the Accounting Division,
or appropriate revenue collector who shall issue an official receipt. When accepting such lodgement it shall be
ascertained by the recipient whether the officer is likely to come into possession of further public monies in the course
of his duties and, if so, he shall be appointed a revenue collector issued with an official receipt book and be required to
comply with these Regulations.

3.The exceptions referred to at paragraph 2 above are:-

 | 29

(a) where stamps, stamped envelopes and letter forms are sold in exchange for cash;

(b) where the Accountant General has approved installation of another system of receipting;

(c) where petty collections are taken in circumstances in which the issue of receipts is not practicable, and
the Accountant General has approved their recording in a collection list. The total of this list shall be
brought to account daily by means of the issue of a single covering receipt made out to ‘sundry
persons’.

C.8. DELEGATION OF POWERS

1. All officers are personally and may be pecuniarily responsible for the due performance of the financial duties of
their offices and for the inaccuracies in the account rendered by them or under their authority.

2. No officer shall be relieved from any portion of his responsibility in respect of duties which he has delegated to
other officers or which have been delegated to him.

C.9. ACCESS TO INFORMATION AND REMOVAL OF AUTHORITY TO

DEAL
WITH PUBLIC MONEYS
(1) The Accountant General shall have full and free access at all times to all accounts and records of
Accountable officers and powers to inspect and inquire into and call for any information arising from those
accounts and records that relate, directly or indirectly, to:

(a) The collection, receipt, expenditure, issue or use of public money; and

(b) The receipt, custody, disposal, issue or use of public property.

(2) In the exercise of his powers under this section, the Accountant General may appoint any person by
writing under his hand to inquire into and report to him on any matter or matters specified in the instrument of
appointment.

(3) Where as a result of any information coming to the attention of the Accountant General, the
Accountant General becomes concerned that public moneys or trust money or public property is at risk
through any act of omission or commission of an Accountable officer, he may, by notice in writing addressed
to the Accountable officer, suspend the authority of that Accountable officer pending an investigation.

(4) Where as a result of such investigation, the Accountant General forms the view, on reasonable
grounds, that public moneys or trust money or public property is at risk if the authority of the Accountable
officer is restored, he shall immediately give notice in writing to the Accountable officer that his authority to
deal with public moneys, trust money and public property is removed. Such notice shall provide the
Accountable officer with the reasons for the Accountant General's decision. A copy of the notice and the
reasons shall be forwarded to head of department of the Accountable officer and to the Secretary of the Public
Service Commission.
 | 30

(5) Where as a result of an inquiry the Accountant General forms the view that public moneys or trust
money or public property is not at risk, he shall immediately restore the authority of the Accountable officer
and shall provide the Accountable officer with notice in writing to this effect.

C.10. RELATIONSHIP OF DEPARTMENTAL ACCOUNTING TO

TREASURY
(1) The records kept by departments, forms etc., used by departments for accounting purposes are to be
approved by the Treasury before printing or reprinting.

(2) All books, records, cards, documents, forms etc., used by departments for accounting purposes are to be
approved by the Treasury before printing or reprinting.

(3) Departmental accounting records and stores systems, and methods and procedures are at all times subject
to Treasury inspection and the approval of the Accountant General.

(4) The approval of the Accountant General is to be obtained before any departure is made from any existing
accounting or business processes, or before any new system, processes or procedures are introduced.

C.11. INTERNAL CONTROL

The accounting systems of departments generally, and of officers within the departments must be arranged to secure
the greatest possible measure of internal check in the handling of public money and stores (See Part D – Internal
Control).

C.12. PUBLIC MONEY NOT TO BE USED FOR PRIVATE PURPOSES

In no circumstances shall any officer:

(a) Use public money in cash and credit card for any private purpose whatsoever and however
temporary;
(b) Cash personal cheques with official cash except as otherwise provided for in this TOM;
(c) Draw official cash against an IOU, or temporary receipt;
(d) Lodge public money to the credit of any private account,
(e) borrow or lend any money for which they are responsible to the Government and;
(f) exchange their own or other persons’ money for any dollars or other foreign currency paid to the
Government. ( a-c: F.R.102, p31)

C.13. PRIVATE MONEY NOT TO BE KEPT IN VICINITY OF PUBLIC

MONEY
No officer shall keep or allow to be kept in any Government strong-room, safe, or cash box under his charge any
money except Government money, or such as by virtue of his office he is bound to receive. If any cash not being
Government money is found in an official safe or cash box, it is to be taken in the cash book and credited to a deposit
 | 31

account until it is either transferred to Treasury Miscellaneous Receipts, or disbursed, at the discretion of the
Accountant General.

C.14. CASH LOSSES OR SURPLUSES

(1) Cash shortages must be reported to the senior accountant of the ministry concerned, who will note the
amount in the cash book. The senior accountant shall, as soon as possible, submit a report to the
Accountant General, copied to the Auditor General, explaining the reasons for the shortages/surpluses.
The shortage must then be made good and included in the banking. (No receipt is to be issued).

(2) On receipt of report from the senior accountant, the Accountat General, if considered appropriate, order an
investigation into the incident.

(3) Any unexplained surplus cash shall promptly be receipted as such and included in the banking and the
amount to be credited to the Miscellaneous Receipts. It may be refunded, with the specific approval of the
Accountant General, if it is shown to be only an apparent surplus and it is required to cover a related cash
deficiency. (F.R. 60) p24)

C.15. DEBTORS ACCOUNTS AND INVOICES

Ministries/Departments, which provide goods and/or services to third parties, are responsible for maintaining the
systems and records for recording and managing their debtors and the collection of debts.

(1) All Ministries/Departments permitted to sell stores and services to the public shall sell them on cash
basis unless authorized in writing by the Accountant General to make credit sales.

(2) When ministries/departments are authorized to make credit sales or issue invoices, they shall normally
be authorized to maintain their own debtors’ ledger. If authority to maintain debtors’ account receivable
ledger is not granted, the ministries and departments shall prepare invoices in respect of their credit sales
and submit them to the Treasury for recording in Treasury debtors’ ledger.

(3) If authorized to make credit sales it is important to monitor the payment of receivable on time and if an
accountable officer for any reason finds himself unable to assess or bill promptly, he shall immediately
report his difficulties in writing to his Secreatary, with copies to the Accountant General and Auditor
General. (F.R.64, p25)

(4). At present no ministry has been allowed to sell goods and services on credit.

C.16. REMISSION OF DEBTS AND ARRANGEMENTS WITH DEBTORS

(1) Authority to remit debts, as distinct from the writing-off of irrecoverable debts, can only be given by the
legislature, unless specifically provided otherwise in the legislation applicable to the debt. If it is
considered for good reason that any debt, which is otherwise legally due and could be collected, should be
remitted, a Cabinet submission, based on a Treasury report giving reasons for such remission, is to be
prepared. If Cabinet endorces remission of the debt, then a resolution shall be prepared to table at the
 | 32

legislature for approval. On the approval of the resolution by the legislature for debt write off the debtors
account shall be cleared by issue of a credit note.

(2) No departmental officer shall advise the debtor that the debt is remitted until the legislature approval has
been given. On receipt of the legislature approval, the debtor may be informed that the debt has been
remitted.

(3) No departmental officer shall enter into an arrangement with a debtor which will allow for an extension of
the normal time in which payment is due without the permission in writing of the Accountant General.
(PFA, s45)

C.17. BAD DEBTS – WRITE-OFF

(1) Treasury will review debts at least once each year and prepare a list of debts to be included in the
submission for legislature approval for write off.

(2) Departments authorized to operate their own debtors ledgers are to notify Treasury by 31 March and 30
September each year of debts which they propose to write off. Full details including dates, names,
amounts and reasons for write-off are to be provided. Treasury will, after reviewing the proposed write-
off, arrange for their inclusion in the submission to Cabinet for tabling at the legislature for approval. No
debts shall be written off until the legislature has made a resolution to authorized such action.

(3) On the passing of the resolution for write off by the legislature any debts included in the resolution may be
cleared from the debtors by endorsing on each ledger card “Written-off legislature resolution
number………………………20……….” And adjust the debtor ledger by the amount of the debts so
written-off.

C.18. TREASURY AND AUDIT QUERIES

(1) Treasury and Audit queries are to be given immediate attention by Ministries/Departments, and be replied
to as soon as possible after receipt.

(2) All answers to queries on vouchers are to be signed by the Certifying Officer. In the case of minor
queries, such as small errors in calculation, it will be sufficient if the Certifying Officer initials the
alterations.

(3) The Certifying Officer is held personally responsible for the correctness of the voucher itself and for
ensuring that all necessary authorities for expenditure have been obtained. It is essential, therefore, that
any queries raised subsequent to certification are in fact brought directly to the notice of the Certifying
Officer.

(4) Any queries involving major items, such as gross discrepancies between estimated and actual expenditure
should be brought to the notice of the Departmental Head.

(5) The Audit Office has advised that the channel of communication for Audit Queries will be direct from
Audit to the Department concerned unless the payment process (business process/policy/procedure) is
queried in which case the Query will be sent to the Treasury.
 | 33

C.19. AUDIT REPORTS

(1) Following departmental inspections by the Audit Office, the Auditor General will address his report to the
responsible Ministry/Department with a copy to the Accountant General. A copy will also be sent to the
Public Service Office and Public Service Commission where applicable or when audit is in relation to
HR/Payroll

(2) Departmental Heads shall ensure that the action is taken on the reports and replies sent as quickly as
possible to the Audit Office with a copy to the Accountant General.

(3) If discussion with the Accountant General is considered essential prior to formulation of the reply, the
Heads of Departments shall approach the Accountant General without any delay.

C.20. IRREGULARITY REPORT TO BE FURNISHED IN EVERY CASE

OF LOSS OR DAMAGE
(1) The purpose of the investigation function of the Accountant General under this operational manual is to
ensure that:

a) Internal Control Mechanism are effective in line Ministries;

b) Government Assets and Funds are properly managed and accounted for;
c) There is Government Recovery for losses and damaged incurred; and
d) To achieve the objectives of the Public Finance Act.

(2) In every instance of loss, mishap, or damage to public money, stores, public property, or alleged fraudulent
activities due to any act of commission or omission, an Irregularity Report shall be prepared in the
prescribed form with all supporting documents and submitted by the respective Head of Ministry to the
Accountant General with a copy to the Auditor General, and where applicable, copies shall be submitted
to the Public Service Commission and the Commissioner of Police.

(3) The Irregularity reports shall be submitted immediately, and must not be delayed pending completion of
any departmental or Police investigation.

(4) Irregularity reports shall also be furnished in cases where there is no direct loss to the Government , but
there is a possibility of a claim being made against the Government e.g. in a motor vehicle accident in
which the Government vehicle is not damaged but private persons are injured or private property is
damaged.

(5) Upon receipt by the Accountant General of an Irregularity Report, the Accountant General shall then use
his discretion and the Internal Audit Division of the Ministry of Economic, Finance and Development to
conduct an investigation into the Irregularity Report. The assistance of line Ministries is imperative for the
effectiveness of the Internal Audit Function.

(6) The Accountant General, upon completion of investigations into the Irregularity Report, may then provide
to the respective Ministry an Investigation Report outlining the outcome and recommendations. The
recipient Ministry shall then respond to the recommendation and corrective actions as raised in the
Investigation Report by the Accountant General as soon as practicable.
 | 34

C.21. FRACTIONS OF A DOLLAR

Fractions of a dollar shall be rounded off to the nearest Australian dollar in any total sum payable or receivable.

C.22. DESTRUCTION OF RECORDS

C.22.1.Prescribed Period for Retention of Records
No accounting records of any nature whatsoever, except as listed below, shall be destroyed or disposed of without
prior written consent of the Accountant General and the Auditor General. Any instructions by the Accountant General
or Auditor General to retain6 any documents shall be strictly observed:

Table1: Accounting records retention period

RECORD May be destroyed after
Voucher copies7 3years
Cash books copies 3 years
Receipts copies 3 years
Schedules of accounts copies 3 years
Voucher original 7 years
Used receipts original 7 years
Abstracts and Cash accounts original 7 years
Subsidiary journals original 7 years
Records held in Accounting division and Post Office headquarders 7 years
Used Cheque books counterfoil (butt) 3 years

Pre-Conditions
C.22.2. Conditions for destruction
Destruction of any record listed above or approved in writing by the Accountant General and Auditor General
shall be subject to the following conditions:

6 Records to be retained indefinitely are principal account books kept by the Accounting Division, including the original personal
emoluments and establishment records which may be required for pension ad gratuity purposes.
7 Copies for voucher, cash books, receipts and schedules of accounts may be destroyed after three years provided they have ben
audited and there are no queries outstanding. Exhausted receipt, licence or other security books may be destroyed in accordance
with this TOM and financial regulations.
 | 35

(1) No record, which is a subject matter of audit, shall be destroyed until completion of its audit and
finalization of all audit queries thereto.

(2) No accounting record shall be destroyed until accounts for the year to which they pertain have
been finalized, audited and accepted by the Parliament

(3) No record, which is a subject matter of any dispute or investigation, shall be destroyed until final
settlement of dispute or completion of investigation and any action thereon.

C.22.3. Procedure of Destruction

(1) The Head of the Ministry/Department shall constitute a Committee of three responsible officers to
review the list of record due for destruction at the end of each financial year.

(2) The Committee shall identify the record to be destroyed in accordance with the terms and
conditions stipulated in paragraphs C.23.1 and C.23.2 and determine the method of destruction,
such as shredding, burning etc., to ensure that the record scheduled to be destroyed does not fall
into unauthorized hands.

(3) The Committee shall submit the list of the record proposed to be destroyed and the method of
their proposed destruction for approval of the Head of the Ministry/Department, Accountant
General and Auditor General.

(4) No financial record shall be destroyed until approval for its destruction is received from the Head
of the Ministry/Department.

(5) For all record that is approved for destruction the following details shall be kept in a form of
bound register:

 Date of destruction;
 Method of destruction;
 Reference of authority authorizing the destruction;
 Name and designation of the person(s) who carried out the destruction.

(6) Obsolete books containing unused counterfoil forms shall be returned to the Accountant General
for destruction. A destruction certificate signed by two responsible officers and showing details of
the serial numbers of the unused counterfoil forms destroyed shall be sent to the Auditor General.

(7) The list of records submitted by the Committee and approval of the Head of the
Ministry/Department shall be kept in a separate file along with the register referred to at (5)
above.

C.23. ARCHIVING OF ATTACHE AND ACCESS DATA

C.23.1. Archived Financial Data
(1) General Ledger: This is the core module for accounting transactions. It is a sort of collection point
for all financial transactions. Within this all statutory financial reports are produced.
 | 36

(2) Receivables: This is an accounts receivable system that enables customer management and all related
transactions.

(3) Purchasing: This is related to all purchasing activity of the ministries/organizations.

(4) Payables: This relates to all activities related to the payments that the ministries/organizations have to
make.

(5) Assets and Inventory: This relates to managing all the assets and inventory items of the
ministries/organizations.

(6) Projects: This is a module that assists in project monitoring. It enables monitoring estimating and
monitoring projects costs against the budget.

(7) Loans: This is a module that records the Government loans. It enables monitoring of loan principle
and interest payment, loan drawdowns and foreign currency adjustments.

Financial data archiving is generally for all financial modules especially General Ledger, Accounts Receivables,
Purchasing and payables. This is to be achieved once they have all been audited. Information should be archived
between 5 to 10 years depending on some loan agreements.

C.23.2. Important functional requirements for Archiving System Selection

(1) Software system for Archiving Historical financial data:

• Software system to archive will allow to free space for online data and increase system speed.

(2) Archived data to be made available to authorized users:

• Data would be archived but it should be available in the same/similar form for users for retrieval of data;
• Only Read access should be provided to archived data. This is to ensure data integrity;
• Archived data should be kept in original form to enable compliance with legal requirements and to have
the ability to reproduce financial reports upon request.

(3) The archiving should define the financial data to be archived and the time range:

• The users should provide the financial data to be archived and the time range for which archive records are
to be kept.

(4) Possible to execute archiving program at a regular frequency:

• This will reduce manual intervention.

(5) Given transaction can be archived only if the following conditions are met:

• It belongs to the module specified by the user;

• It refers to the date that falls into the time range specified;
 | 37

• It represents a “Closed” Transaction. It means that the transaction can be considered eligible for archiving
only if it is not needed by any other transaction in future. That is no further action will be taken against
that transaction. No open documents like Purchase Orders, Accounts Payable etc should be archived.

C.24. UNOFFICIAL FORMS NOT TO BE USED

Only official Government accounting forms for receipts, disbursements, payroll, imprest, write off etc. shall be used.
 | 38

C.25. GENERAL LEDGER ACCOUNTS

C.25.1. Monitoring of Accounts
All entries in the General Ledger accounts are centrally monitored within Treasury on the FMIS that is centrally
administered and maintained.

C.25.2. General Ledger Adjustments

1. Adjustments in the General Ledger Accounts may be carried out for any of the following reasons:
(a) Correction of an accounting error;
(b) Allocation of charges;
(c) Yearend adjustments.

2 The Ministries/Departments shall observe the following guidelines for raising a journal adjustment:

(a) Instructions outlined in the Operating Manual for raising a journal adjustment are strictly adhered to;
(b) Standard Journal Adjustment Voucher Form is used for raising a journal adjustment voucher;
(c) The Journal adjustment voucher shall be signed by an authorized officer of the Ministry/Department
raising the adjustment;
(d) Following information shall be provided in the journal adjustment voucher:

(i) Reasons justifying the proposed adjustments;

(ii) Full reference to the original entry in the accounts of the debit or credit being adjusted (where
applicable);
(iii) Reference to or a copy of any special authority or other supporting document.
 | 39

PART D: INTERNAL CONTROL

D.1. DEFINITION AND OBJECTIVE OF INTERNAL CONTROL

Internal control is an integral process that is affected by an entity’s top management and personnel and is designed to
address risks and to provide reasonable assurance that in pursuit of the entity’s mission8, the following general
objectives are being achieved:

• Complying with applicable laws and regulations;

• Fulfilling accountability obligations;
• Executing orderly, ethical, economical, efficient and effective operations;
• Securing accuracy in all accounts, financial statements and books of accounts;
 Prevention or early detection of fraud or misappropriation;
• Safeguarding resources against loss, misuse and damage.

D.1.1. Role of Managers with Internal Controls

Internal Controls are the responsibilities of Heads of Ministries and Managers. They are responsible for establishing,
implementation and monitoring internal controls. Heads of Minisries and Managers must ensure that effective
monitoring is in place to assess the quality of the systems performance over time. Management control processes must
be assessed in two categories: Imposed Control and Self Control.

(a.) Imposed Control

Traditional mechanical approach consisting of measuring performance against standards and then taking corrective
action through predetermined individuals

(b.) Self Control

Self control evaluates the entire process of management and the functions performed and attempts to improve the
process rather than simply correcting the specific performance of the concerned manager. Examples of controls for the
whole operational process are as follows:

• Organizational structures – there should be well defined responsibilities and proper segregation of duties
so that no single person controls all phases of a transaction
• Policies – policies should be clearly stated in writing, in systematically organized handbooks, manuals,
and other publications and properly approved in line with government legislation/procedures
• Procedures – procedures should be reviewed periodically to ensure they are still applicable
• Personnel – engage qualified employees and new employees should be screened to ensure honesty and
reliability
• Accounting – accurate accounting information is a necessity for management to engage in rational
decision making
• Budgeting – budgets should set measurable objectives
• Reporting – reports need to be timely otherwise management will be unable to take necessary action when
required

D.1.2 Role of Internal Auditors with Internal Controls

8 Definition as per International Organization of Supreme Audit Institution (INTOSAI)
 | 40

Internal Auditors must review and assess internal controls from evidence collected and form judgment on their
effectiveness. Internal Auditors must provide assurance to managers that internal controls are operated as
intended and on:

• The soundness, adequacy and application of internal controls,

• The extent to which the organizations controls secure the achievement of department objectives,
promote operational efficiency and safeguard assets and interests,
• The extent of compliance with policies, plans and procedures,
• The integrity and reliability of financial and other management information used by the organization.

D.2. COMPONENTS OF INTERNAL CONTROL

Internal controls form a framework within which staffs work. They include, but are not limited to, the procedures in
Manuals. It consists of five interrelated components: the control environment, risk assessment, control activities,
information and communications, and monitoring. Each of these components is an integral part of the management
process and plays a specific role in departmental internal control procedures.

D.2.1. Control Environment

The control environment sets the tone of an organization, influencing the control consciousness of its people. It is the
foundation for all other components of internal control, providing discipline and structure. An effective control
environment is an environment where competent people understand their responsibilities, limits to their authority, the
right things to do and the right way to do them. Management is responsible for setting the tone for the organization.

D.2.2. Risk Assessment

Every organization faces a variety of risks from external and internal sources that must be assessed. A precondition to
risk assessment is establishment of objectives, linked at different levels and internally consistent. Risk assessment is
the identification and analysis of relevant risks that may prevent the achievement of established objectives.

D.2.3. Control Activities

Control activities are actions supported by the policies and procedures implemented by management to ensure
management directives are carried out to meet organizational objectives. They are designed to address risks that could
prevent achieving the organization’s objectives. Control activities occur throughout the organization, at all levels and
in all functions. The department head is responsible for identifying other appropriate control activities to address the
unique risks to which his department may be exposed.

D.2.4. Information and Communication

Pertinent information must be identified, captured, and communicated in a form and time frame that enables people to
carry out their responsibilities. Effective communication also must occur in a broader sense, flowing down, across, and
up the organizational structure. All personnel must have a means of communicating significant information upstream.
The department must also effectively communicate with external parties.

D.2.5. Monitoring
Effective monitoring is a process that assesses the quality of the system’s performance over time. It includes the
regular management and supervisory activities as well as separate evaluations by Central Agencies, Internal Audit, or
other independent parties.
 | 41

D.3. EVALUATION PARAMETERS OF INTERNAL CONTROL SYSTEM

A well-designed process with appropriate internal controls should meet most, if not all, of the system’s control
objectives. A system of internal control can be evaluated by assessing its ability to achieve seven commonly accepted
control objectives:

(i) Authorization: All transactions are pre-approved by responsible personnel.

(ii) Completeness: All valid transactions are included in the accounting records.
(iii) Accuracy: All valid transactions are accurate, consistent with the originating transaction data, and
information is recorded in a timely manner
(iv) Validity: All recorded transactions fairly represent the economic events that actually occurred are
lawful in nature, and have been executed in accordance with management‟s general authorization
(v) Physical Safeguards and Security: Access to the physical assets and information systems are
controlled and properly restricted to authorized personnel
(vi) Error Handling: Errors detected at any stage of processing receive prompt corrective action and are
reported to the appropriate level of management
(vii) Segregation of Duties: Duties are assigned to individuals in a manner that ensures that no one
individual can control both the recording function and the procedures relating to processing a
transactions

D.4. ESSENTIALS FOR AN EFFECTIVE INTERNAL CONTROL SYSTEM

(1) Review Internal control structures on a regular basis to ensure that all key controls are operating
effectively and appropriate.

(2) Establish effective organizational structures with well-defined responsibilities and segregation of
functions within accounting systems to help detect and prevent errors, frauds and misappropriation of
funds.

(3) Engage qualified and experienced staff with good references.

(4) Provide both formal and informal (on the job) training to staff to enable them to carry out their assigned
duties.

(5) Introduce effective operational controls to ensure accuracy of processing and prevention and detection of
errors. Operational controls include sequence checking, use of control totals, reconciliations and
independent checks. Regular reconciliations of bank accounts, error suspense accounts, and control
accounts shall ensure that the accounting systems are functioning properly and the accounting data is
recorded and maintained accurately.

(6) Introduce physical controls to safeguard cash and other negotiable instruments (e.g. cheques) as well as
public stores and property. Controllable forms such as receipt books, cheque books, must be kept secure.
A register should be kept to record when and to whom they were issued

D.5. DEFALCATIONS, SHORTAGES, FAILURE TO ACCOUNT

If it appears that any public money or stores have been misappropriated, stolen, not accounted for, or in any other way
unlawfully treated, the Head of the Ministry/Department concerned shall report the matter by means of an Irregularity
 | 42

Report to the Accountant General and to the Auditor General immediately upon discovery. In all cases where theft or
misappropriation might be the cause of a loss the Commissioner of Police shall also to be informed.

D.6. DEPARTMENTAL ACCOUNTING SYSTEMS AND INTERNAL

CONTROL
(1) The accounting system of each office shall be arranged to secure the greatest possible measure of internal
check in the handling of public money and stores. The allocation of duties of accounting staff shall be, as
far as possible, based on the principle of requiring the concurrence, knowledge and action of two or more
officials to complete a transaction. Treasury assistance shall be sought when introducing or altering
accounting and internal control systems.

(2) The system shall be arranged to ensure early detection and/or prevention of fraud or misappropriation as
far as possible without making the system too costly in relation to the protection given. A sound
accounting or stores system will act as a deterrent by removing temptation and the opportunities for
concealing thefts.

(3) Heads of Departments shall arrange for procedures or systems to be thoroughly examined from time to
time to ensure that the estimated results are worthwhile when compared with the costs involved.

D.7. PREVENTION OF MISAPROPRIATION

Most methods of misappropriation can be easily prevented by an accounting system based on sound internal control
procedures that provide for automatic checks at each stage of transactions. Some of the important internal control
procedures are:

(a) Verification of existence of employees (permanent/casuals) shown on time sheets and pay
vouchers, by an officer other than the usual paying officers;

(b) Proper voucher authorization and cancellation of supporting documents;

(c) Verification of totals of vouchers, schedules, Imprest statements, cash books, etc.;

Segregation of cashier’s duties from debtors ledger officer’s duties, and use of debtors control
accounts;

(d) Verification of lodgments prepared for banking by a senior officer who should initial the lodgment
slip after ensuring that the cheques listed in the slip were actually received during the period
covered by it. He should also verify and initial the bank receipt after banking to ensure that there
have been no alterations in the amount banked;

(e) Proper balancing of all accounts at the end of each accounting period and the keeping of all work
up to date;

(f) Recurrent delays in balancing or banking should be looked at with suspicion and investigated;
 | 43

(g) Cashiers should not be permitted to collect non-public funds, or keep non-public funds in the
vicinity of public money;

(h) Storekeepers should not be allowed access to the Stores Ledgers;

(i) Keep the stores records (asset register) up-to-date;

(j) Frequent test check of physical quantities with records by other than stores officers (preferably by
a senior accounting officer);

(k) Making specified officers responsible for the custody of stores.

D.8. CASHIERS NOT TO CONTROL NON-PUBLIC MONEY

Employees having the control of public money shall not, at the same time, hold charge of non-public money over
which no official control can be exercised. Departmental Heads are to ensure that these employees do not act as
collectors for any staff or social funds.

D.9. HANDLING OF CASH BALANCES

(1) Where banking facilities are available the actual cash in hand shall be kept at a minimum level (not more
than $10,000). Unpaid wages shall be banked and the original copy of the receipt attached to the
respective paysheet before it is returned to Treasury. However, the unpaid wages that shall be paid to
Treasury must be done promptly.

(2) Imprests are to be kept at the lowest figure needed to meet requirements. (Imprest accounts shall be
opened only on the authority of the Accountant General).

(3) Cash shall be balanced at the end of each day and banked the following morning. Where large amounts
are received, they should be banked during the same day, as far as possible to avoid retaining large sums
of money overnight.

(4) Where banking facilities are not available, the arrangements made for banking the public money shall be
submitted to the Accountant General for his approval.

D.10. CUSTODY OF CASH, KEYS, STAMPS, VALUABLE DOCUMENTS

AND ACCOUNTING FORMS
D.10.1. Cash
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1. Cash includes currency, postage stamps, postal orders, money orders, cheques and any other negotiable assets,
including tickets for bus, toll fare which may have been purchased by accounting officers on behalf of a unit
of government.

1. Employees required to hold cash or negotiable documents of any kind including orders for stores and services,
shall keep them securely locked up in a safe or strong-room when not required and take every precaution
against their loss.

2. It is the duty of Secretaries of Ministries and Departments to see that some of their staff as are responsible for
the custody of cash are provided with proper accommodation for that purpose, and to satisfy themselves that
due precaution are taken by such staff.

3. Each cash holding shall at any time be in charge of only one officer who shall be directly responsible for it,
and have sole access to it, and have a separate receptacle for its safe custody – except for cash held in strong
rooms or safes with two or more locks for which detailed security instructions shall be specified by the
Accountant General.

4. All cash in custody of public officers shall be kept in either:-

(a) strong rooms;

(b) safes;

(c) cash boxes with locks;

(d) lockable drawers or cupboards as approved by the officers’ Secretary.

5. In the Accounting Division, the Post Office headquarters, and in authorised sub-accountancies there must be a
strong room or one of the more reserve cash safes for the custody of the main cash stocks.

6. At all stations and offices a safe shall be provided for the custody of public monies, where it is necessary to
keep that money overnight.

7. All safes, strong room doors and cash boxes required for the safe custody of cash must be obtained from the
Accountant General who will keep a register of safes and strong room doors and cause a registered number to
be placed in a prominent position on each unit. Annual returns of such equipment will be rendered to the
Accountant General on 1st January each year.

8. No safes may be transferred within a Ministry without notification thereof to the Accountant General nor may
they be transferred between Ministries without his prior approval.

9. Where safes used for securing cash cannot be cemented in or otherwise permanently affixed, every effort shall
be made to ensure that an alternative means of securing them satisfactorily to the building is adopted.
10. No public officer shall allow to be kept in any government strong room, safe or cash box any money except
public money or such as by virtue of his office he is bound to account for. If private money is found in a
government strong room, safe or cash box it may be credited to revenue.
 | 45

11. At the time of issue of a strong room door, safe or cash box the Accountant General shall provide the
accountable officer with an original key thereto. Duplicate, and triplicate (if issued), keys of each government
strong room, safe or cash box must be enclosed in a separate sealed envelope with the description and details
of the unit marked on the outside, and retained by the Accountant General.

12. The particulars on envelopes enclosing duplicate or triplicate keys shall generally be detailed as follows:-
 Ministry
 Location
 Decsription of safe
 Registered Accounting Division number
 Date deposited with Accountant General
 Signature of officer depositing key

D.10.2. Keys
The following procedure shall be observed and precautions taken in respect of keys. Failure to observe these
procedures/precautions may result in disciplinary or surcharge action.

(1) Each department shall maintain a register of keys for safes, strong-rooms, premises etc. The register shall
be in the form of a bound book with serially numbered pages. Following information shall be recorded in
the register:

• Brief description of each key (including any identification number);

• Purpose for which the key is used and the name of the officer to whom it has been issued or who is
responsible for its safe keeping;
• The dates of issue and return with signatures of the officer receiving or returning the key(s)

(2) The keys of strong-rooms and safes shall be allotted to officers of responsible status and, where there are
two or more locks, each key shall be in the possession of different officers, each of whom has to be
present at the time of opening or closing of the strong-rooms or safes.

(3) Keys are to be adequately safeguarded by officers to whom they are entrusted; they should be carried on
by the responsible person and not left in a cupboard or drawers of office desk etc. The custody of official
keys is the personal responsibility of each officer entrusted with them, and they shall ensure that every
precaution is taken to prevent unauthorized persons from getting possession of them.

(4) So far as is practicable each cash holder shall keep the key to his strong room, safe etc. on his person. He
shall not leave it lying about. When in the keyholder’s view it is not practicable for him to carry the key on
his person, he shall otherwise secure the key bearing in mind that he shall be personally and pecuniarily
responsible for any loss of cash which may take place as a result of the key being lost or stolen.

(5) Spare keys shall be deposited with the Treasury for safekeeping.

(6). The loss of a key to any strong room, safe, cash box or lockable drawer or cupboard generally used
for the security of public monies, shall be reported immediately to the Departmental Heads, and an
Irregularity Report is sent to the Accountant General, Public Service Commsion, Auditor General and Police
with a full explanation of the occurrence. Duplicate keys shall be used only to open for verification and
removal of contents, and the safe, cash box etc. shall not thereafter be used to accommodate cash until the
lock has been altered and new keys provided.
 | 46

(7). The officer responsible for losing a key shall be held liable to meet the cost of altering the lock and the
provision of new keys, including any resultant transport charges incurred in respect of either the safe or its
keys or in respect of any replacement safe, cash box etc .

(8). In the event of a key holder having any suspicion that the keys or locks in his charge have been interfered
with, he shall proceed as in 6.

(9). Alteration to locks of safes and the provision of new keys, if undertaken locally, will be made under
security conditions and only with the Accountant General’s prior approval .

(10). Registers shall be kept in each strong room or reserve cash safe of all cash deposited therein or
withdrawn. The register must show separately the denominations of all coin, notes, stamps etc. deposited in
and withdrawn. Bags of coin and bundles of notes must be properly labelled and denominations kept separate.
All entries must be initialled by the authorised key holders.

(11). Secretaries and sub-accountants shall at least once a month ensure that an independent check is carried
out of the contents of all cash safes and strong rooms in their charge and report any discrepancy in writing to
the Accountant General with a copy to the Auditor General under an Irregularity Report .

(12). Where any officer holding a key of a strong room or reserve cash safe is temporarily absent from the
station, the key in his charge may, if necessary, be handed over to another responsible officer, but in no case
may all the keys be held by one officer.

(13). When a handing-over takes place between accountable officers having in their charge cash, or the key of
a strong room, safe or cash box a handing-over certificate (Accounting form 1) shall be completed and signed
by both officers’

(14). At any station where there is a branch of a bank at which an account is kept by Government, the fullest
possible use must be made of it and subject to the approval of the Accountant General all cash surplus to daily
requirements should be deposited therein.

(15). Officers in charge of public money whilst on tour or in a temporary station shall take every precaution to
ensure maximum safeguard of the cash in their care. Where possible such officers shall avail themselves of the
use of such safes, cash boxes etc. as may be in use by other public officers on that particular station.

(16). Whenever cash is in transit it shall be in charge of a responsible officer and in the case of specie, carried
in a strong container, secured bag or mail bag . Every reasonable precaution shall be taken to prevent loss and
particular care must be taken to ensure that cash conveyed by sea or air is not dropped into the water. Where
practicable it should be secured to the vessel or aircraft in such a way as to allow recovery in the event of a
mishap. . Every vessel and aircraft whether government owned or private must have a designated safe place
for cash in transit as one of the requirements for operating within Kiribati and are advised to treat cash in
transit as priority.

(18). Where combination locks are used, the combination numbers must be placed in a sealed envelope and
deposited with the Treasury. Combinations should be changed periodically – particularly on a change of
officers controlling the safe or strong-room.

(19). Official keys are not to be marked or bear any tag which would enable the finder to identify the key.
They are to be marked, “if found please handover to the Commissioner of Police.”
 | 47

D.10.3. Stamps
(1) Where stamps are used they are to be recorded in a register which will show, in total, the quantities
received, the issues, and the balance on hand. On receipt, stamps are to be entered in the register, with a
reference number of the voucher for their purchase.

(2) Any bulk supplies of stamps are to be held by the controlling officer. A brief record of all outward mail
and postage thereon is necessary. The controlling officer is to exercise a supervisory control over the
amounts of stamps used, and ascertain the reason for any marked variation in the values used in any one
month.

(3) Stamps purchased by the government departments shall be used for official purposes only.

D.10.4. Valuable Documents

All precautions shall be taken to safeguard valuable documents against fire, or other risk of destruction or damage.
Precautions shall also be taken to ensure that no unauthorized person gets access to the official documents.

D.10.5. Accounting Forms

(1) To minimize the risk of loss or fraud, numbered accounting forms such as receipts, stores orders, cheques,
licenses, permits etc., shall be kept under close control and be deposited in a secure place when not in use.

(2) Spare receipt books and forms which can be converted into negotiable documents shall be kept under lock
and key in the custody of the controlling officer. Bulk supplies of accounting forms are to be held only by
Treasury.

(3) All requisitions for the printing of receipt books or other “money” forms (such as cheques and receipt
books) shall be made by the Treasury. Such forms shall not be collected by the department concerned from
the printers directly under any circumstances.

(4) Supplies of money forms (cheques and receipt books) for immediate use are to be requisitioned from the
Treasury. Two copies, the original and duplicateto be signed by the Receiver of Revenue for receipt
forms and by the certifying officer for other forms are required by the Treasury.

(5) Departments shall keep adequate record of the forms held by them, preferably in a bound register,
showing the quantities received with the date(s) of their receipt, and the names and designations of
officers to whom they are issued for official use with the date(s) of issue and signed by receiving officer.
Inspecting officers should ensure that these records are maintained and kept secured.

(6) If an office is closed or there is a change in its accounting functions all spare or surplus forms must be
returned to the Treasury.

(7) Unused books are to be issued on the request of an authorized requisitioning officer or receiving officer
and only upon production of the last completed book.

(8) The register of numbered forms will be written up when stocks are received for bulk storage and entries
will be made as individual books are drawn for current use. Completed books are to be returned to the
bulk custodian after accounting action is complete and are to be marked off in the register.
 | 48

(9) Accounts and ledgers books shall meet the following requirement:

(a) The pages of all account books must be consecutively numbered in ink if numbers are not printed
on them.

(b) Loose leaf ledgers or cards may only be used as books of account with the authority of the
Accountant General whose approval is required before their introduction.

(c) Numbered pages shall under no circumstances be removed from account books.

(10). All account books and forms must be typed or written in ink or with a ball point pen. The use of green
ink or pencil on accounting records is restricted to the Office of the Auditor General.

(11). The pages of all account books must be consecutively numbered in ink if numbers are not printed on
them.

(12). Loose leaf ledgers or cards may only be used as books of account with the approval and authority of the
Accountant General. The Accountant General may specify additional measures he deems necessary to ensure
the security and integrity of records entered into such loose leaf ledgers.

(13). Numbered pages may not under any circumstances be removed from account books.

(14). Entries in account books shall not be erased. An incorrect entry must be neatly ruled through and the
correct figure inserted above it and initialed by the responsible officer. Audited figures will not be altered
without the prior approval of the Auditor General.
 | 49

D.10.6. RECEIPT AND LICENCE BOOKS

(1) All receipt and licence books and other security books (e.g. debit note books) used in accounting for
the receipt of public monies shall be held in bulk by the Accountant General who shall be responsible
for their registration and control. All books received shall be taken on charge and all books issued
shall also be recorded in the appropriate stock and distribution register.

(2) The Secretary for Communication. Transport and Tourism Development is responsible for the
registration and controll of Money Order Forms and maintaining its own stock register.

(3) Only the Accountant General and authorised officers are permitted to indent for supplies of new
books. On receipt of books or licences they shall be counted to ensure that the number of books
received agrees with the appropriate requisition and invoice. As soon as possible thereafter entries
shall be made book by book in the stock register and the first and the last serial number of each book
shall be physically verified at the same time.

(4) The officers authorised to indent for supplies will furnish the Auditor General direct with a copy of
each invoice or issue note as the case may be.

(5) The Accountable officers and revenue collectors shall submit their requisitions for receipts, licences or
other security books to the office to which they submit their accounts.

(6) Each issue of receipt, licence or other security books, whether from Accountant General to authorized
officer or revenue collector, or authorized officer to revenue collectors etc. shall be made against
properly completed requisitions on a form approved by the Accountant General. The Accountant
General or other issuing officer shall satisfy themselves that previous receipt books issued to any
office have been almost completely used before issuing further books to the same office. All issues
shall be made in consecutive order.

(7) Authorised officer and other approved receipt, licence or other security book holders shall record their
supplies and issues in the appropriate stock and distribution register. Each book shall be accounted for
on a separate line in the register.

(8) Each issue of receipt books shall be made on an issue voucher in a form approved by the Accountant
General. Issue vouchers will be made out in quadruplicate and distributed as follows:-

(a) original and duplicate to the office to whom the issues are made; the duplicate shall there be receipted
and returned to the office of issue where it shall be attached to the quadruplicate copy;

(b) triplicate to the Auditor General

(c) quadruplicate to remain in the book.

(9) In no circumstances may a partly used receipt, licence or other security book be transferred away from
the cash book in which the used receipt or other forms have been brought to account until all the
counterfoils issued from that book have been examined by the Auditor General.

(10)All receipts, licences and counterfoils from other security books will be issued to payers in
consecutive order and they shall not be altered in any way.
 | 50

(11)Any Accountable officer or other officer to whom receipt, licence or other security books are issued
will check them immediately against the accompanying issue voucher. Upon the discovery of any
discrepancy in the quantity or numbering of the books such discrepancy shall be reported immediately
to the issuing officer with a copy to the Accountant General (if he was not the issuing officer) and the
Auditor General. Any book which is found to be defective in the numbering or paging or in any other
material particular, shall be returned to the issuing officer immediately when it is discovered.

(12) All receipts, licences and security books must be safe-guarded from theft or misuse and shall be kept
under lock and key when not in use.

(13) Receipt, licence and security books shall be conveyed by hand of a responsible officer or registered
if sent by post.

(14) Every accountable officer having in his charge revenue receipt, licences or other security books shall
render monthly, in a form prescribed by the Accountant General, a return showing in respect of each
type of book:-

(a) numbers of books in hand at commencement of month;

(b) books received during the month;

(c) numbers in hand at the end of the month.

(15)All authorised officers and revenue collectors on Tarawa shall forward this return to the Accountant
General with the minimum of delay after the close of business at the end of each month. Revenue
collectors outside Tarawa shall present their receipt, licence or other security books to the authorised
officers to whom they remit their cash so that he may incorporate details into his return, which shall
accompany his monthly accounts when submitted to the Accountant General.

(16) The Accountant General shall maintain a register which will ensure the continuity of use and issue of
receipt and licence books and other security books issued by him.

(17) Except when handing over to an officer relieving him, a revenue collector may not transfer receipt,
licence or other security books to another revenue collector.

(18) When a handing-over takes place between officers who have in their charge receipt, licence or other
security books handing-over certificates (Accounting form 1) signed by both officers shall be
completed listing the quantities and serial numbers of each type of security book on charge. The
officer taking over shall sign below the last entries in the stock register.

(19) Exhausted receipt, licence or other security books may be destroyed in accordance with this TOM.
Obsolete books containing unused counterfoil forms shall be returned to the Accountant General for
destruction. A destruction certificate signed by two responsible officers and showing details of the
serial numbers of the unused counterfoil forms destroyed shall be sent to the Auditor General.

D. 10.7. ELECTRONIC BASED FINANCIAL RECORD KEEPING

 | 51

(1). A unit of the government may utilize an electronic or computerized financial recordkeeping and
management system, upon the written approval and authority of the Minister of Finance and the advice and
recommendation of the Accountant General and Auditor General.

(2). In granting such approval, the Minister of Finance, with the advice and recommendation of the
Accountant General and Auditor General shall review and evaluate the computerized or electronic financial
management system as to whether the system proposed will document, record and archive the information
related to financial records, activities and management as are otherwise required of a paper-based system
under this TOM.

(3). If the Minister of Finance, with the advice and recommendation of the Accountant General and Auditor
General are satisfied that the proposed electronic or computerized system will provide the same or
substantially similar information, features, security and other safeguards of the paper-based system and these
Regulations, then they may approve the use of the electronic or computerized system in lieu of paper-based
for that unit or units of government.

(4). In the event that the Minister of Finance, the Accountant General and the Auditor General fail to conclude
that the electronic or computerized system fully satisfies the necessary requirements for documentation,
security and archiving provided by these Regulations or a paper-based system, then the proposed system may
either be rejected or conditionally approved.

(5). Conditional approval of an electronic or computerized system can be made by either providing for a
parallel paper-based system for a set period of time until all concerns have been addressed or by requiring that
where the computerized or electronic system does not meet the requirements of this TOM, such paper-based
elements may be required to supplement the electronic/computerized system for any deficiencies.

D.11. CHECK OF OFFICIAL MONEY AT IRREGULAR INTERVALS

(1) Public money and stamps in the hands of departmental officers shall be checked and verified periodically
at irregular intervals by the controlling or a senior officer (preferably one with accounting experience).

(2) Checks shall not be waived on personal consideration.

(3) Where an employee handles money belonging to more than one account, balances under all the accounts
shall be counted at the same time to ensure that money from one account is not used to make good the
deficiencies in another.

(4) Officers checking cash must be on guard against the practice of “teeming and lading”, i.e. making good
the deficiencies of one period by using money relating to another period.

D.12. CONVEYANCE OF CASH OUTSIDE OFFICE PREMISES

(1) Where cash in excess of $500 is conveyed outside office premises, e.g. to or from the bank, field pays etc.,
it is to be under the control of two authorized officers.
 | 52

(2) Where cash bags are deposited with the bank for safe custody they must be sealed and a receipt obtained
for them from the bank. When the bags are uplifted the receipt is to be surrendered and an
acknowledgement signed at the time in the presence of a bank officer.

D.13. BANK LODGMENTS

(1) Cash and cheques to be banked are to be checked by the cashier in the presence of the Controlling Officer
and officer or officers who take the lodgment to the bank. The only exception to this rule is where the
banking bag is locked by the cashier prior to its dispatch to the bank and the bank holds its key.

(2) At the bank, the officer or officers who are making the lodgment must observe the bank teller as he is
counting the money. It is against bank rules for the teller to remove any of the cash or notes from his
counter until the lodgment receipt is stamped and initialed.

(3) If an error has occurred in the lodgment, the teller should call for a senior bank officer to check the
lodgment and take appropriate follow up action.

(4) When an officer makes payment into an official bank account which he operates he shall prepare a bank
deposit slip in duplicate. The duplicate slip shall be retained fort audit purposes.

(5) Each copy of the bank deposit slip shall show a full analysis of the amount paid in as to notes, coin,
cheques and drafts and shall detail the serial numbers of individual cheques and drafts. No alterations,
other than those made by the bank, may be made on a bank deposit slip. When payment has been made to
the bank the officer operating the account shall examine the duplicate deposit slip to see that it bears an
acknowledgement of receipt by the bank, and that any alterations made by the bank are properly
accounted for.

(6) Personal monies shall in no circumstances be paid to a Government bank account, nor may Government
revenue be paid to any personal bank account. Collectors of revenue and other officials who come into
possession of public money must not use it for the purpose of cashing cheques except as provided under
this TOM.

(7) An officer operating a Government bank account shall reconcile his cash book with a bank statement at
the close of each month. He shall prepare a reconciliation statement which must detail all outstanding
cheques or credit slips, and fully explain any differences between the balances shown in the cash book and
in the bank statement.

(8) An officer who operates an official bank account shall, if so requested by the Accountant General, the
Auditor General, or their representatives, obtain from the bank a statement of account or a certificate of
balance, and produce it for examination.

D.14. ELECTRONIC PAYMENTS

For electronic payments, following controls shall be put in place to mitigate the risk of loss:
 | 53

(1) Restrict access to master supplier file – Only authorized officers shall have access to the master
supplier file when electronic payments are made automatically by the accounting software. It is important to
keep tight control over any alterations to the master supplier file to eliminate possibilities of any unauthorized
changes in the bank account information to which payments are being sent.

(2) Written approval for manually initiated electronic payments - Since a manually initiated
electronic payment falls outside the controls already imposed on the regular accounts payable process, it shall
be made only if it is authorized in writing by the Accountant General.

(3) Password access to payment software - It is necessary not only to enforce tightly limited access to
the software used to initiate electronic payments, but also to ensure that passwords are replaced on a frequent
basis. This is a critical control and should be rigorously enforced.

(4) Additional approvals – Additional written approval of the Accountant General shall be obtained in
all cases of electronic payments:
• Involving large payments of $100,000 and above; and
• Whenever a new supplier is set up for electronic payment. The additional approval could be linked to
the generation of a credit report on the supplier, to verify its existence as a valid business entity.

(5) An end-of-day payments review – All electronic payments shall be reviewed at the end of each day
by an officer nominated by the Accountant General. However, the officer so nominated shall not in any way
be involved, directly or indirectly, with the electronic payments process. This review shall encompass:

• Comparison of authorizing documents to the actual amounts paid; and

• Verification that payments are made to the correct supplier accounts.

D.15. SAFETY OF PROCESSED DATA

To ensure safety of processed computerized data following measures shall be adopted:

• Keeping an extra backup for data at a different location; and

• Taking data back up at least once a day.

D.16. CHANGE OF CASHIER’S DUTIES

The duties of officers engaged in the handling of public money shall be changed at periodic intervals, if possible after
one year. Controlling Officers are to ensure that annual leave is taken by the cashier regularly.

D.17. RETURNS TO BE RENDERED PROMPTLY

Officers handling public money are to render their returns and accounts regularly and promptly. It is the duty of a
controlling officer to ensure that this is done.
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D.18. CASHIERS’ ACCESS TO LEDGERS

Officers handling public money shall not be allowed access to ledgers or similar records. Where an officer is not
employed on full time cashier work his other duties should not conflict with his duties as cashier. Cashiers are not to
be permitted to open the mail or have custody of the Register of valuable items received. Ledger-keepers should not
be permitted to act as relieving cashiers.

D.19. CASHIERS’ COMPARTMENT

Where justified by the quantity of cash handled, a cashier’s compartment should be provided, and access to it is
prohibited to all except to authorized officers.

D.20. SIGNING OF BLANK FORMS

Cheques, orders, receipts, or similar monetary forms are not to be signed in blank. It is strictly prohibited to obtain
signatures on blank forms of account or orders for payment, or receipts which are not properly filled in.

D.21. INWARD MAIL

Following procedure shall be observed in handling inward mail:

(a) In every Ministry or branch of a Ministry in which letters or parcels are received a register must
be kept by a responsible officer (normally the officer whose duty it is to open correspondence) of
all money received through the post or otherwise than over the counter whether in the form of a
cheque, draft, money order, postal order or cash.

(b) All inward mail shall be opened by one officer in the presence of another – neither of these
officers should be the Cashier or Receiver. The record, if possible, will not be kept by the officer
responsible for the issue of receipts or licences but the officer will sign the register in respect of
cheques, drafts etc. taken over by him and will enter the number and date of the issued receipt or
licence.

(c) Any money or valuable document contained in letters or packets shall be entered immediately
upon opening in a Register showing date of receipt, means of transmission ( .e.g. postal mail,
private messenger), nature and value of contents, sufficient detail to identify a cheque, draft
money or postal order and the number and date of the receipt or license issues for the sum
received. Each entry in the register shall be initialed by both the officers responsible for opening
the inward mail.

(d) The Register, together with any money received, shall be handed over to the Cashier at the
earliest. The Cashier shall sign against the entry in the Register as evidence of having received
the money, insert the number of the receipt issued and return the Register to the Certifying Officer
for safe custody.

(e) If any valuable documents have been received, they are to be taken, with the Register, to the
appropriate officer, who shall acknowledge their receipt by signing against the entry in the
Register.
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(f) At the end of each day the Register shall be handed to the Certifying Officer of the Department,
for safe custody.

(g) Controlling Officers are responsible for checking the Register at irregular but frequent intervals,
particularly at the close of each accounting period, to see that all mailed receipts have been
accounted for in the cash book.

(h) All cheques, postal notes, money orders etc., immediately upon receipt, shall be crossed in the
name of the account to which the amount is to be credited, e.g. “Kiribati Treasury Account”,
“Trust Account”, or “Sate Trust Account”.

D.22. OUTWARD MAIL

(1) Outward letters containing drafts or negotiable documents of any kind shall be sealed by an officer, who
will be responsible for their safe transmission by registered mail.

(2) All outward cheques are to be entered in a Cheque Register and each entry in the register shall be signed
by the person receiving them, whether for himself or for delivery to others.

(3) All Bank Advices for transfer of funds, electronically or otherwise, are to be entered in a Bank Advice
Register and each entry in the register shall be signed by a person receiving them for delivery to the Bank.

D.23. CORRECTIONS OR ALTERATIONS IN ACCOUNTING RECORDS

If any correction or alteration has to be carried out in any accounts or other records, the same shall be done by striking
out the incorrect figure with diagonal lines in ink and writing the correct figures above it.

(1) No figures shall be erased in any account or other records for carrying out any correction or alteration.

(2) All corrections or alterations shall be initialed by a responsible officer.

(3) Audited figures shall not be corrected or altered without a written consent of the Auditor.

(4) Alterations in payment vouchers shall be treated at par with the corrections in the accounts.

(5) All entries in cash-books, ledgers and other accounting books are to be made in ink.

D.24. PAGES IN ACCOUNT BOOKS TO BE NUMBERED BEFORE USE

The pages of all account books must be numbered consecutively. If the numbers are not printed they are to be inserted
in ink, before any account book is brought into use.

D.25. INTERNAL CONTROL REGISTERS

Heads of Departments are to ensure that the internal control procedures are being carried out in their respective
departments and to report on the state of the work so that it is immediately apparent if any part of the work is getting
into arrears.
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PART E: RECEIVING OF PUBLIC MONEY

E.1. RECEIPTING SYSTEM

The receipting system primarily involves two stages of processing as follows:

• Receipting and banking of public money; and

• Accounting of public money.

E.2. RECEIPTING AND BANKING OF PUBLIC MONEY

E.2.1. Procedure in Line Ministries
E.2.1.1. At Cashier level:
(1) Receive payment and issue an official government receipt to the payee.
(2) If manual receipts are issued at sub-treasury, it is issued by the Treasurer.
(3) Any receipt cancellation must be referred to the Senior Accountant for approval.
(4) Revenue recorded must be to an approved revenue code within the Chart of Accounts.
(5) At least daily, reconcile the cash on hand to the receipts issued since the last banking.
(6) Print bank lodgement form from the Attache or Access detailing the moneys to be banked.
(7) The bank lodgement, receipts and cash on hand must be checked by the controlling officer who must
initial or sign the bank lodgement form to acknowledge the check.

E.2.2. Procedure in Ministry of Economic, Finance and Developpment (Treasury)

E.2.2.1. At Cashier level:
(1) Receive payment and issue an official government receipt to the payee.
(2) If manual receipts are issued at sub-locations, it must be transferred to the Head/Main Cashier at the
Accounts Division to check and issue a master receipt.
(3) Any receipt cancellation must be referred to the Senior Accountant for approval.
(4) Revenue posted must be to an approved revenue code within the Chart of Accounts.
(5) At least daily, reconcile the cash on hand to the receipts issued since the last banking.
(6) Print bank lodgement form from Attache detailing the moneys to be banked.
(7) The bank lodgement, receipts and cash on hand must be checked by the controlling officer who must
initial or sign the bank lodgement form to acknowledge the check

E.2.2.2. At Controlling/Certifying Officer level:

(1) Download the Consolidated Fund Account bank transactions daily.
(2) Check and reconcile the deposits (Ministries bank lodgements) in the bank statement to the receipt
entries in the general ledger account.
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(3) Resolve any queries.

(4) Add new revenue item code for each ministry based on approved Budget Estimates for each Financial
Year.

E.2.3. Banking of Amounts Received

(1) The amount of public money received is to be banked to the credit of the Consolidated Fund Account or
other Government Accounts for which it is received. No money received shall be paid into an Imprest
Account unless specially authorized by the Accoutant General.

(2) Cashiers in Tarawa and Christmas Islands shall bank the amounts received at least once daily and, if
necessary, twice daily to avoid holding more than $500 overnight.

(3) Cashiers outside Tarawa are to bank amounts received as far as possible in accordance with 1 and 2 above
but in any case, the arrangements made are to be submitted to the Accountant General for his approval.

(4) When, the amount to be banked does not exceed $4.00, banking may be omitted on that day unless it is the
last working day of the month.

E.3. ACCOUNTING OF PUBLIC MONEY

E.3.1. Submission of Accounts to the Treasury
(1) Each cashier, unless otherwise directed, shall submit to the Treasury an account of the amount
received during the month by 7th of the following month.

(2) The account shall be submitted after:

• Reconciling the cash on hand to the monthly receipts and banking;

• Preparing a Monthly Cashbook Reconciliation in the prescribed form;
• Cash on hand shown in the prescribed form shall be checked and certified by the
Controlling/Certifying officer in the Ministry; and
• Preparing a Revenue Posting Summary Report detailing the receipt totals by revenue item and
subhead for the month.
(3) The account to the Treasury shall comprise of the following:

(a) Duplicate copies of the receipts and originals of cancelled receipts which form the cash book;

(b) Monthly Cashbook Reconciliation in the prescribed from duly verified by the
Controlling/Certifying officer;

(c) Bank lodgment receipts for all lodgments made to the bank account;

(d) Revenue Posting Summary Report;

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(e) Where a cashier has sub-cashiers accounting to him, the accounts of each sub-cashier
accounting to him.

(f) If nothing is received during an accounting period and there is no cash brought forward from the
previous period, the cashier shall send only a certificate to that effect.

E.3.2. Action by the Treasury

(1) The Revenue Section check accounts (cashbooks) for completeness and accuracy and perform the
following checks:

(a) Verify Receipt sequences;

(b) Verify total of sub-receipts to master receipts;
(c) Verify total of receipts to bank lodgements and cash on hand;
(d) Verify Cash on hand monthly reconciliation, including check of opening balance to previous month ’s
closing balance;
(e) Check offsetting of over and short banking of the previous month, if any;
(f) Verify total of receipts to the monthly revenue ledger postings;
(g) Accuracy and validity of revenue postings.

(2) Record the following in the Cashbook Register:

(a) Receipt sequence.
(b) Total receipts for the month.
(c) Cash on hand.
(d) Total banking for the month.
(e) Short/over banking.
(f) Lodgements not yet credited.
(3) Resolve any queries.
(4) For receipting, prepare and approve the Cashbook and Revenue Posting Summary Journal. The
approval must be by a properly authorised certifying officer and posting of the revenue journal must
be performed by an officer separate from the receipting and checking function.
(5) After completing the reconciliation of all cashbooks and the postings of revenue are completed, print a
transaction listing for the month for the Fund Bank Ledger Account
(6) Reconcile the ledger balance to the bank statement balance for the Consolidate Fund Account
(7) File the cashbooks

E.3.3. Sub-Cashiers Accounting

(1) Sub-cashiers must balance their receipts to the cash and cheques on hand and submit the moneys with
the duplicate receipts daily to the cashier to whom they are responsible.

(2) The following procedure is to be carried out:

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(a) The sub-cashier is to total the receipts issued and hand over the duplicate receipts and the
amount collected to the cashier;

(b) The cashier should check the amounts received, and reconcile the total of duplicate receipts
with the amount received;

(c) The cashier shall, after verifying and reconciling the amounts received, issue a receipt to the
sub-cashier for the amount received, showing on the receipt the range of the receipt numbers
issued by the sub-cashier and covered by the amount received. The number of the receipt issued
by the cashier shall be written by the sub-cashier on the duplicate of the last of the sub-cashier ’s
receipts to which it refers;

(d) The sub-cashier shall paste the original copy of the receipt issued by the cashier alongside the
triplicate copy of the last of the sub-cashier’s receipts;

(e) If nothing is received during an accounting period, the sub-cashier shall send to the cashier only
a certificate to that effect.

E.4. IMPLEMENTATION OF THE SYSTEM

E.4.1. Responsibilities of the Ministries
In implementing the receipting system, the ministries are responsible for:

• Ensuring that official government receipts are issued for all payments made to government;
• Proper control and safeguarding of receipts, public moneys and trust moneys;
• Officers are properly appointed to receive and account for public moneys and trust moneys;
• Proper controls exist to ensure all public moneys are accounted for and banked on a daily basis;
• Cashbooks are properly prepared and submitted in a timely manner i.e. the 7 th of the following month;
• Revenue is correctly classified and charged to the appropriate revenue items and Outputs;
• Monitoring revenue performance against budget.

E.4.2. Responsibilities of the Treasury

In Treasury, the Revenue Section implements the system and is responsible for:

• Control and issue of accountable forms that relate to receipting;

• Checking of departmental cashbooks – receipt sequences, receipts to bank deposits and revenue item
posting summaries, bank lodgement receipts, cash on hand reconciliations;
• Revenue/Item Code maintenance for ministries which require revenue items to be receipted into the
Consolidated Fund;
• Preparation and posting of revenue to the appropriate revenue items and head from manual receipts;
• Resolving and responding to receipting queries;
• Regular and timely reconciliation of the Government’s Consoldated Fund Bank Account;
• Timely production and issue of revenue budget reports;
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E.5. ISSUE OF RECEIPTS

The following instructions shall be observed in issuing of receipts:

(a) Unless otherwise provided in this TOM, an accountable officer shall give a receipt in the prescribed form
for every sum paid to him. The receipt shall be made out at the time the money is collected and shall
accord with the amount of actual collection, even though the latter, by error or otherwise, differs from the
amount which should have been collected.

(b) In no circumstances may temporary or unofficial receipts be given.

(c) The type of receipt to be used shall be prescribed by the Accountant General. Where receipt or licence
forms contain spaces for the insertion of detail in document, the appropriate detail shall be included in
such space. The space provided for details of the amount paid shall have inserted in it such information as
to quantities or rates, the relevant debit note or other document, as will enable the classification and
computation of the amount to be verified.

(d) Unless otherwise laid down by the Accountant General licences may be brought to account directly as
such, no covering receipt being required.

(e) Except where receipt or licence books are specially printed for a particular purpose, revenue receipts in
quadruplicate shall be used by accountable officers responsible for the collection of revenue.

(f) Original receipt and license should be written neatly and legibly in ink or indelible pencil and all copies of
the receipt should be readable and carbon paper shall be used to make the copies. Officers issuing receipts
shall ensure that legible and complete copies have been made before parting with the original to the payer.
Except where otherwise authorised by the Accountant General the original shall be issued to the payer, the
duplicate shall be used to support the entry in the cash book and shall be attached to the paying-in form so
as eventually to support the Accounting Division schedules of accounts, the triplicate shall be forwarded to
the Accounting Unit and the quadruplicate shall remain at the office of issue for examination and audit.

(g) The instructions at paragraph (f) for the disposal of original and copy receipts shall be applied also to
special receipt or licence books which are printed and arranged similarly to revenue receipt books.

(h) Blank spaces after writing the amount in words and figures in the spaces provided should be filled in with
a straight line.

(i) No alterations or erasures of any type whatever shall be made on an official receipt or license. If an error
is committed in writing a receipt or a form is spoilt, it shall not be destroyed, but shall together with all
copies of the receipt should be cancelled with the word ‘CANCELLED’ written across it. The
cancellation of the receipt or license shall be authenticated by the signature of the responsible officer. The
reason for canceling and the number of the replacement receipt should be entered on the cancelled receipt.
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(j) The original, duplicate and triplicate copies of cancelled receipts shall be included in numerical order with
the duplicate copies of issued receipts and shall be attached with them to the appropriate paying-in form at
the time of the next payment to the Accounting Division, by the accountable officer. The accountable
officer shall submit to the Accounting Division the original, duplicate, and triplicate copies of cancelled
receipts at the time of submission of his monthly statement of account.

(k) Unless otherwise approved in writing by the Accountant General, every revenue collector shall keep a
cash book in the form prescribed by the Accountant General in which all receipts shall be entered daily
and in which all payments to the Accounting Division or other prescribed office shall be promptly
recorded. The Auditor General shall be advised of all cases where approval to dispense with a cash book is
given.

(l) All receipt entries in the revenue collector’s cash book shall include the dates, numbers, names and
amounts of all receipts issued except that names may be omitted and the bulking of receipts permitted with
the prior approval of the Accountant General

(m) If payment is made for only a portion of an amount due, the receipt is to be endorsed “Payment on
Account”

(n) Receipts are to be signed by the cashier.

(o) The Account Code to which the amount is to be credited should be recorded on the receipt.

(p) Payings-in to the Accounting Division other office authorised by the Accountant General shall be made as
soon as possible after the money is received and at least weekly on the day appointed, or at such longer
interval as may in special cases be approved by the Accountant General in writing.

(q) When a handing-over takes place between revenue collectors steps should be taken to ensure that where
possible the pay-in is made immediately prior to the handover even though it may be earlier than the day
appointed. In the event that cash is transferred between officers a handing-over certificate shall be
completed and signed by both officers.

(r) If the Account Code to which the amount is to be credited is not known, the amount should be credited to
a ‘Miscellaneous Receipts Account’ operated by the Treasury and the details, to the extent known, should
be recorded on the receipt.

(s) The means of payment should be noted on the receipt if it is other than cash e.g. Cheque. The number of
the cheque should also be noted on the receipt. The number of the receipt issued must be recorded on the
back of the cheque.

E.6. CASH BOOK FOR RECEIPTS

1. A revenue collector shall present his cash book and unused (or part used) receipt book(s) to the responsible
officer in the Accounting Division or other office on his appointed day even though he has made no collections
since his last paying-in, except in cases where internal checking arrangements of the cash book(s) have been
 | 62

drawn up by the accountable officer and approved in writing by the Accountant General. Where such
arrangements have been made the Auditor General shall be advised.

2. Payings-in shall be supported by a pay-in form (Accounting form 2) showing the receipt numbers and amounts
allocated to each revenue head and subhead or other appropriate classification and the duplicates of the
receipts issued by the revenue collector, which shall be included by the receiving officer in his accounts.

3. The revenue collector’s cash book must be ruled off and added by him to show the total collection for the
period at the time each pay-in takes place and cash or its equivalent must be produced in support of collections
since the last pay-in. In no circumstances may a revenue collector be allowed to retain part of his collection.

4. When a revenue collector presents his cash book and unused (or part used) receipt book(s) the officer
responsible for checking revenue cash books at the Accounting Division or other office approved by the
Accountant General shall check the revenue collector’s cash book since the date of last paying-in against
copies of the receipts to satisfy himself:-

(a) that all receipts have been accounted for and that there is no break in sequence;

(b) that all receipts have been correctly entered with particular regard to amount and allocation;

5. If satisfied as in (a) and (b), the checking officer shall then check the additions of the cash book and see that
all particulars on the paying-in form are correctly entered. He will then agree the total cash or its equivalent
with the total of the paying-in form. The checking officer will initial and date the payment entry in the cash
book.

6. The revenue collector shall obtain an official revenue receipt for all monies paid in by him and shall either
paste this receipt in his cash book or file it separately and record its date and number in his cash book .

7. The Accounting Division cashier, or other prescribed officer who function as revenue collectors may bring
their collections to account direct into their main cash book. Any other officer other than the Accounting
Division cashier, or other prescribed officer may, for instance, be supplied with an appropriate receipt or
licence book and made responsible for the collection of specified revenue. Such officer shall be subject to all
instructions relating to revenue collectors.

E.7. PAYING-IN REGISTER

1.A paying-in register or chart showing all revenue collectors required to pay in to him shall be kept by the
revenue officer at the Accounting Division, or each other office authorised by the Accountant General as a
paying-in office . Such register or chart shall contain the following particulars:

Office of Appointed day of Date of Initials of Reasons (in cases

Revenue pay-in lodgement checking officer of non-
Collector lodgement)

2. The purpose of the register or chart referred to at paragraph 1 is to facilitate proper supervision of regular
lodgement of revenue by revenue collectors. Checking officers shall bring to the notice of their superior
officer every instance in which:-
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(a) all receipts issued since the last paying-in have not been brought to account

(b) lodgement has not been completed on the appointed day

(c) all monies have not been paid in

(d) he is unable to complete the check of the cash book promptly.

3. The officer-in-charge of the section shall investigate reports made by the checking officer and take particular
care to ensure that any possible irregularity is reported to the Accountant General. Routine checks of revenue
collectors’ cash books shall be supplemented by surprise inspections by accountable officers and by
Accounting Division officers working under the direction of the Accountant General.

4. None of the checks prescribed in this TOM to be carried out on revenue collectors’ cash books by Accounting
division or checking officers will relieve a Ministry’s Secretary of his responsibility for ensuring that all
collections are correctly and promptly brought to account.

E.8. PAY RECEIPTS DIRECT TO GOVERNMENT BANK ACCOUNT

1.The Accountant General may authorise revenue collectors to pay their collections direct to a Government
bank account. In instances where such approval has been given the receiving officer at the Accounting
Division or other office approved by the Accountant General to whom the collections are payable shall accept
the bank deposit slip properly receipted by the bank in lieu of actual cash for the purposes of accounting and
recording in the paying-in register.

2.When paying their collections to a bank to the credit of the Government of the Republic, revenue collectors
shall prepare bank deposit slips in triplicate, the original to be retained by the bank, the duplicate, duly
stamped and marked by a bank official to be presented to the Accounting Division or other office authorised
by the Accountant General in lieu of cash when accounting for his collections, and the triplicate to be retained
by the revenue collector in support of the entry in his cash book.

3.The bank deposit slip or paying-in form shall show the serial number of cheques and bank drafts and the
office of issue and the serial numbers of money orders and postal orders.

E.9. RENEWAL OF LICENCES

In the case of renewal of licences, a licence cannot be deemed to have been renewed until the revenue
collector is in possession of the cash, money order, postal order or cheque, as the case may be.

E.10. LOST OF ISSUED RECEIPT FORM

If an issued receipt form is lost, and a duplicate is applied for, a true copy certified by the accountable officer
personally may be furnished but not on the prescribed form. Duplicate licences or other similar documents shall be
issued in accordance with the appropriate law.
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E.11. DUPLICATE RECEIPTS NOT TO BE ISSUED

No duplicate receipts are to be issued. If a request for a duplicate receipt is received, the cashier may provide a
photocopy of the original receipt signed or initialed.

E.12. RECEIPT OF CHEQUES AND OTHER NEGOTIABLE

INSTRUMENTS
(1).Cheques, Money Orders and any other negotiable instruments, immediately upon receipt, should be crossed and
the words “Government Consolidated Fund Account” (or other relative account) written between the two parallel
lines. Before issuing a receipt in respect of a cheque or other negotiable instrument received, following checks shall
be carried out to ensure that it has no defects:

(a) the cheque must be signed by the drawer;

(b) the cheque must be crossed – if it is not crossed it should immediately be crossed by the receiving
officer;
(c) Any alteration must be countersigned or initialled by the drawer.
(d) The amount in words and figures agree.
(e) It is correctly dated and is not stale (over six months old) or post-dated.
(f) It is correctly endorsed when endorsement is required.
(g) It is not drawn or crossed in such a way that it cannot be paid into the correct bank account.
(h) It appears to be properly signed.
(i) For Postal Notes made out to a particular person, the signature of the payee appears in the space
provided.

(2).No receipt is to be issued for a defective or post-dated cheque. If any such cheques are received, they should be
returned to the person concerned for necessary corrections. All corrections must be signed or initialed by the payer.

(3).Cashiers should check with the Treasury or the Bank before issuing a receipt for remittances from overseas as
exchange rates alter from time to time.

E.13. DISPOSAL OF COPIES OF RECEIPTS

(1) The original copy of the receipt is to be given or sent to the payer.

(2) Sub-cashiers are to give the duplicate copy to their controlling cashier who is to file it in his office for
inspection by Audit or Treasury.

(3) Where, however, a cashier acts as receiving agent for another department, the cashier is to make
arrangements with the department for sending to it the duplicate copies of the receipts affecting that
department to enable the department to use the duplicate copies of receipts as advices for the prompt and
orderly posting of its ledgers.

E.14. CORRECTION OF REVENUE POSTINGS

(1) If an error in the posting of revenue is discovered, Ministries must prepare a Journal Adjustment
Voucher request and submit to the Special and Imprest Section of Treasury.
 | 65

(2) The Journal Adjustment Voucher request must show the adjustment to the revenue postings that are
required and the reason for the adjustment.

(3) A departmental certifying officer must approve the Journal Adjustment Voucher request.

(4) Treasury will review the request and if approved then process the adjustment to the revenue postings.
Requests not approved will be returned to departments with explanation.

E.15. COLLECTION OF REVENUE DUE

Care should be taken that in all cases the gross amounts due are collected. No partial payment, abatements, off-sets or
counter claims shall be admitted unless specifically provided for by law.

E.16. REGISTERS FOR REVENUE DUE TO GOVERNMENT

1. Accountable officers are required to ensure that registers are kept in a form prescribed by the Accountant General to
show that all sums due to Government are duly debited at the correct time against the individuals responsible for the
payment thereof, and to show the actual payments made in settlement and the arrears due. They shall also ensure that
appropriate records are kept of all assessments, rents, dues, fees, sale of government property etc. in order to ensure
collection at the correct time of all sums due to Government .
2. Revenue shall be collected when due and as far as possible be prevented from falling into arrears Wherever
possible cash shall be taken in advance or at the time of any services rendered. Debit notes shall be made out and
submitted in all cases where payment need not be made at the time a service is rendered or goods are supplied or in
other cases where the use of debit notes is customary.

3. The importance of prompt assessment and prompt notifications of assessments to the individuals concerned cannot
be overstressed. Should an accountable officer for any reason find himself unable either to assess or bill promptly,
he shall immediately report his difficulties in writing to his Secretary, with copies to the Accountant General and
Auditor General.

4. If an amount assessed is not collected within the period prescribed (if not prescribed by law, the accountable
officer shall prescribe) vigorous follow-up action shall be taken on continuous basis until the account is settled
culminating in action after six months in accordance with applicable regulations. Appropriate notations of follow-
up action shall be recorded in the relevant register or ledger.

5. If the collection is not made in full within the six month time period, the accountable officer shall refer the matter
in a written memorandum to the Financial Secretary, copied to the Accountant General and Auditor General. In
making such referral, the accountable officer shall set forth the full particulars regarding the account and shall
request the Financial Secretary for authority to either pursue collection through judicial or such legal means as
may be allowed under law, or where the costs of further collection efforts outweigh the amount uncollected, to
abandon the arrears.

6. All accountable officers who are responsible for the collection of revenue shall submit to the Accountant General,
with a copy to the Auditor General, not later than 31 st January in each year a return of arrears of revenue
(Accounting form 3) outstanding on the last day of the previous financial year and not later than 31 st July in each
year a return of arrears of revenue outstanding on the previous 30 th June.
 | 66

7. Returns shall list under each subhead of revenue the amounts owing by individuals or organisations at the close of
business on either 31st December or 30th June as applicable, and where, at the date of making up the return, arrears
have been subsequently collected, references to the receipt numbers on which collection has been effected shall be
included and where arrears are still outstanding the steps taken to effect recovery shall be shown.

8. The returns shall include any amounts still outstanding from the previous return.

9. Nil returns shall be submitted if appropriate.

10. Only such items of income tax shall be included in return as have been finally assessed or were payable by 31 st
December, or 30th June.

11. Returns of outstanding customs duties submitted by the Chief Customs Officer shall be as detailed in this
regulation except that where the duties have not been assessed information as detailed on the vessel’s or aircraft’s
manifest shall be included instead of the amount of revenue owing.

E.17. RETURNS FOR REVENUE ARREARS AND RECOVERY ACTION

1.Officers responsible for returns of arrears of revenue are required to submit consolidated returns of arrears of the
revenue which is collected under their supervision and not merely the arrears of their headquarter offices
2. In all cases where arrears of revenue remain outstanding for more than six months the Accountant General
shall be informed in writing. The Accountant General shall refer those arrears which are reasonably capable of
collection to the Office of the Attorney General for the institution of proceedings to recover in the courts. If for any
reason an accounting officer considers that legal action may not be appropriate in any particular case he shall make his
reasons known in writing to the Accountant General when submitting the information relevant to the outstanding
arrears.
3. The reference of an outstanding item of revenue to the courts for collection or to the Police for any other
reason does not affect the responsibility of the accountable officer originally concerned to show the outstanding item
in his return of arrears of revenue.

4.It is also the responsibility of the accountable officer to monitor the progress of the cases referred to court and to take
such action as is available to him to ensure that court orders are carried into effect.

5.Amounts erroneously included in revenue registers as due are not arrears of revenue. A suitable endorsement in the
revenue register of the full reason for the cancellation of the entry, certified by the responsible officer, is sufficient.

6.Fines, licence fees, etc. remitted by law cease to become arrears of revenue. A reference in the revenue register to the
letter in which remission was authorised is all that is required. Unpaid court costs and fines awarded in civil and
criminal cases which are payable into the consolidated fund are arrears of revenue unless and until imprisonment is
suffered in lieu of payment or unless remitted.

E.18. REVENUE REFUND

1.Refunds of revenue fall into two classes:-
(a) those in respect of revenue collected in accordance with the laws and subsequently reclaimed under
conditions prescribed by the laws; and
(b) those resulting from erroneous collection.
 | 67

2.Refunds at paragraph 1(a) above require authorisation by the officer prescribed by law or by an officer to whom his
powers have been delegated.

3.Refunds at paragraph 1(b) above will be authorised by the Accountant General or by any officer generally or
specifically authorised by the Accountant General or by any officer generally or specifically authorised by him to do
so.

3.Refunds of revenue will be charged to the relevant revenue Head and subhead of the estimates.

E.19. CASHIERS, SUB-CASHIERS AND CONTROLLING OFFICERS

E.19.1. Definition
 Cashier: is an employee who is responsible for the receipt and accounting of public funds and who has been
appointed in terms of Instruction E.14.2.
 Sub-cashier: is an employee who is responsible for the receipt and accounting of public funds and accounts
to a cashier. A sub-cashier must be formally appointed in terms of Instruction E.14.2.
 Controlling Officer: is an employee who is responsible for supervising the cashier and/or sub-cashier and
their functions relating to receipt and accounting of public funds.

E.19.2. Appointment of Cashiers/Sub-cashiers

(1) Cashiers and sub-cashiers are appointed by the Accountant General on the recommendation, submitted in
Form Ty.10 by the Heads of Departments. No person is to act as a cashier or subcashier unless appointed
by the Accountant General.

(2) The request that the new cashier and sub-cashier be authorized to endorse cheques should accompany the
recommendation for appointment.

E.19.3. Responsibility of Cashiers/Sub-cashiers

Cashier and sub-cashier, as accountable officers, have the responsibility set out in Operational Manual C.4. Cashiers
have the particular responsibility of supervising the receipt of money by the sub-cashiers who are accounting to them.
Cashiers must:

(a) ensure that sub-cashiers discharge their duties in accordance with the Public Finance Act, Financial
Regulations and this Operational Manual;

(b) examine sub-cashiers receipt books to confirm that the receipts are being properly prepared, that all
amounts received are being promptly banked and that accounts are submitted correctly and at the
prescribed times to the cashier.

E.19.4. Change of Cashiers

On a change of cashiers, a Hand-Over Statement showing all cash on hand, bank receipts, stamps, receipt books,
licence forms or other forms of monetary value, is to be prepared and signed by both the incoming and outgoing
officers. The original copy is to be retained in the department. This procedure is to be followed for short period of
changes as well as for more permanent changes. If, due to sickness or otherwise, the outgoing cashier is absent at the
 | 68

time of changeover, the Hand-Over Statement is to be signed by the outgoing cashier’s controlling officer with a brief
note of the circumstances.

E.20. DISHONOURED CHEQUES

E.20.1. Overview
(1) When a cheque is dishonoured, the bank withdraws the equivalent amount from the government’s direct
transfer and sends a debit advice to the Treasury. The amount of the dishonoured cheque is charged by the
Treasury to the Ministries Head and activity that the revenue was originally credited to in the ledgers.

(2) In the case of any cheque rejected by a bank as dishonoured the Accountant General or officer concerned,
as the case may be, to whom the cheque is returned will prepare a payment voucher for the amount of the
cheque, as a contra to the original credit in his accounts, and charge it to Advances (name of drawer). If
such transaction is made by an accounting officer he shall immediately notify the Accountant General.

(3) The Accountant General or authorised officer shall apply to the drawer without delay for him to make
good the amount of the cheque. If the cheque has been rejected by the bank because it was incorrectly
prepared then a further cheque may be accepted in replacement. If, however, the cheques was returned
with the endorsement ‘refer to drawer’, ‘lack of funds’ or ‘no account’ then reimbursement in cash shall be
insisted on unless there is sufficient evidence to show that a further cheque will be accepted by the bank.

(4) If requested to do so by the Accountant General, the officer’s Secretary shall obtain a written explanation
from any public officer who has presented a cheque to Government which has been dishonoured due to
lack of funds and the amount of the cheque shall be recovered from the officer. The authority to cash
cheques from public monies shall be withdrawn immediately from an officer who has had a cheque
dishonoured due to lack of funds. Such authority shall only be restored if a satisfactory explanation of the
occurrence is given.

(5) The company or individuals of dishonoured cheques are placed on the Ministries Blacklist which means
that no cheques are to be accepted from the drawer until they rectify the dishonoured cheque and can make
them to pay a discharge fee to Tresury as per the following table:
 | 69

Table 2: Treatment of dishonoured cheques

Fee Dishonour Reason

$/dishonoured cheque “refer to drawer”
$/dishonoured cheque “signature required” or “figures do not agree” or
“stale or post-dated”

(6) The Revenue Unit of Treasury is responsible for maintaining the Blacklist. Departments are responsible
for taking appropriate recovery action in relation to each dishonoured cheque.

E.20.2. Procedure
(1) When a cheque is dishonoured, the Bank will debit the government’s Consolidated Fund Account and
send the Debit Advice to the Treasury attaching therewith the dishonoured cheque and the following
details:
• Cheque number
• Name of the account
• Account number
• Reason for the dishonour
• Amount

(2) The Treasury, on receipt of Debit Advice from the bank, shall input the details of the dishonoured cheque
received from the bank to the Dishonoured Cheque Register (excel spreadsheet) and add the following
details against each entry:
• Ministries names
• Date of the Direct Debit
• Revenue Code of the original transaction (Sub-head and Natural Accounts)
• Drawer’s Bank (ANZ)
• Phone Number and Post Office Box of the Drawer (as recorded on the cheque)

(3) During the month, contact the drawer and advice them that their cheque has been dishonoured and the
action that they need to take to avoid being listed in the Treasury Dishonoured Cheque Register. To be
removed from this Register, the drawer shall have to pay the relevant discharge fee to the Treasury.
(4) The Treasury shall print at least once a month, 2 copies of the lists of dishonoured cheques from the
Treasury Dishonoured Cheque Register by Department and attach the relevant debit advices and
dishonoured cheques for recovery action. Retain a summary copy of the lists sent to the Departments.
(5) Enter the following details in the Dishonoured Cheques Register
• Department
• Cheque Number
• Bank Account Number
• Name of Account/Drawer
 | 70

• Date & Month that the cheque was dishonoured

• Amount

(6) The Treasury shall give the dishonoured cheques lists to the Departments and obtain their signatures on
the Dishonoured Cheques Listing Book to indicate their receipt of the lists.
(7) Departments shall return within 7 days one copy of the list to the Treasury with details of the recovery
action taken.
(8) On receipt of the list from the Departments, the Treasury shall sign and date the Dishonoured Cheques
Register to indicate the return of the listing and file the list in the Returned Dishonoured Cheque List
Folder.
(9) At the beginning of every month, the Treasury shall prepare the list of Individuals and Companies who
must pay in cash from the Register and issue a Treasury Circular listing all companies or individuals
whose cheques had been dishonoured and who have not taken corrective measures. Set out the following
details in the Circular:

• Bank
• Account Number
• Name of the Account/Drawer

(10) Forward the Treasury Circular to all Departments.

E.20.3.Discharge from the Treasury Dishonoured Cheque Register

(10) The drawer pays the discharge fee through the Treasury Cashier. The fee is credited to the
appropriate accounting code for Accounting Services – Fees and Charges.
(11) If the drawer has appeared on the Treasury list, prepare a revocation letter and give to the drawer
with the receipt. The revocation letters is only valid for one month from the date of the letter or
until the next Treasury list is issued.
(12) File a copy of the receipt for the discharge fee and any revocation letter with the dishonoured debit
advices.
(13) Delete the dishonoured cheque entry from the Dishonoured Cheque Register.

E.21. PUBLIC NOTICE REGARDING RECEIPTS

Cashiers are to display a notice in English and Kiribati in a conspicuous position in each cash office stating that a
printed original official receipt should be obtained by everyone paying money to the Government and that only such
receipts are recognized.
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E.22. LEGAL TENDER FOR RECEIPTS

(1)The legal tender of the Kiribati Government is Australian currency notes and coin to the extent that they are
legal tender within the Commonwealth of Australia and accountable officers shall not accept any other
currencies into the funds of the Government unless the prior approval of the Accountant General has been
obtained.

(2)Accountable officers are required to replace any counterfeit, defaced, illegal currency or currency other
than that referred to in paragraph (1) which they may wrongly accept.

E.23. CONTROL OF FORMS

(1) All forms, licenses, tickets, permits and other documents for which payments are received are to be
printed with consecutive numbers in a form approved by the Treasury.

(2) Records of the forms issued to the cashier are to be maintained in accordance with Instruction D.10.
Stock of all Accountable forms shall be checked and verified on regular basis.

E.24. MISPRINTED OR MISNUMBERED RECEIPT BOOKS

If any receipt book or other money form is found to contain any errors in the printing, the controlling officer is to be
informed immediately and he is:

(a) If only a few receipts or forms are involved to cancel all copies of the complete page in each case,
paste original receipts to duplicate copies of the receipts, and when the cash book is forwarded to
Treasury at the end of the accounting period, both original and Treasury copies of the pages cancelled
are to be included. Cancellations are to bear the controlling officer’s initials, with comments where
necessary.

(b) If the errors are numerous, to return the entire book to Treasury for cancellation and replacement. If a
portion of the book has been used before the errors are discovered, it is still to be returned to Treasury,
where the book may be split by a senior Treasury officer and the used portion returned to the
department and a new book issued where required.

E.25. CHEQUES FROM UNKNOWN PERSONS

A cheque from an unknown person should not be accepted for the sale of goods or other transactions in the nature of a
cash sale.

E.26. CASHING OR GIVING CHANGE ON CHEQUES NOT PERMITTED

(1) No change is to be given on cheques and no cheques of any kind are to be cashed out of public money
except:
Treasury – Tarawa
 | 72

Official Kiribati Government cheques may only be cashed at the discretion of the Acountant General only when the
bank is closed and when it is not possible to cash it elsewhere or on the following day.

(2) In both cases, the back of the cheque is to be initialled by the officer authorizing encashment of the
cheque before it is actually cashed.
(3) In no other case public money should be used for private purposes.

(4). Any accounting officer in a non-banking station may, at his discretion, cash cheques for amounts of less
than ten dollars drawn on a bank in the Republic and presented by a Government officer who is the holder of a
valid authority to cash cheques issued by the Accountant General.

(5). Personal cheques shall not be cashed by any accouting officer at a banking station in any circumstances.

(6). In no circumstances shall an officer who is not an accountable officer cash a personal cheque, except
where specifically authorised to do so by the Accountant General.
(7). In no circumstances shall a cheque be cashed for any person other than a Government officer, or for any
business company, without the prior approval of the Accountant General.

(8). In seeking the Accountant General’s approval for encashment of cheques under this TMO the full details
as to the name of the drawer, the length of anticipated stay in the Republic, nature of visit, amount of cheque,
name of bank on which the cheque is drawn and whether it is likely that further requests will be made for
encashment of cheques by this person, shall be forwarded.

E.27. CASH SHORTAGES AND SURPLUSES:

(1) Cash Shortages must be reported immediately to the Controlling Officer, who is to note the amount in
the cash book in red ink. The revenue collector is to make good the shortage and include it in the
banking (no receipt is to be issued, but the Controlling Officer is to endorse the cash book that the
shortage has been made good by the officer responsible). If a shortage occurs 3 times with the same
Revenue collector, the Accountant General is to be notified.

(2) Surplus cash is to be receipted as such and included in the banking. The amount is to be credited to the
Treasury Revenue Item for Miscellaneous Receipts.
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PART F: DEVELOPMENT FUND ACCOUNT

The Development Fund is a Special Fund which has been established to finance, manage and account for all works
and services of a capital nature. The sources of funding for development Fund come from the development partners
and the Kiribati Government annual contribution through the Annual Recurrent Budget.

F.1. ESTABLISHMENT OF THE DEVELOPMENT FUND

(1) The Development Fund is established under the provisions of Sec. 10 of the Public Finance Act

(2) Operation of the Development Fund is provided by Sec. 11(1)(2) of the Public Finance Act.

(3) The Development Fund provides finance for all works and services of a capital nature.

F.2. WORKS AND SERVICES FINANCED FROM DEVELOPMENT FUND

The works and services financed from the Development Fund shall be separately identified as a “project” and each
project shall be identified, firstly, by the number allocated to it within the current Development Plan, secondly, where
applicable, by the identification given to it by a donor agency.

F.3.APPLICATION FOR OVERSEAD AID

1.All offers and requests for overseas aid of any sort shall be dealt with through the FinancialSecretary. Secretaries
may not deal with donor agencies on a formal basis, although there is no objection to informal contact on the strict
understanding that no commitment is entered into. Applications for aid shall normally be within the framework of the
current Development Plan.

2. Applications for Development funds shall be drawn up in draft by the appropriate Ministry in the general format
prescribed by the Ministry and forwarded to the Financial Secretary. Secretaries shall provide such further information
as may be required, either generally or particularly, to allow the application to be considered and forwarded to the
donor agency.

F.4.PAYMENT
1.When a project has received local approval and financing arranged as provided by Sec.10(A)(2) of the Public
Finance Act, copies of the Project Memorandum will be sent to the accountable officer, the Accountant General and
the Auditor General.

2.A Project Memorandum will determine, generally, the conditions under which issues from the Fund may be
expended. Specific conditions may be set by the donor agency. All conditions, general and specific, must be met in the
use of Fund moneys.

3.The issue of a Project Memorandum is not an authority to spend money. The manner in which authority to expend
money from the Fund is obtained shall be as prescribed by the Accountant General.
 | 74

4.The authority issued at paragraph 3 is subject always to a sufficient balance being available within the
Total Project Cost.

5.When the life of a project extends over more than one financial year, the annual expenditure shall be determined by
the authorities as may, from time to time, be issued in respect of that year.

6.Expenditure over the life of a project shall not exceed without proper authority, the Total Project Cost.

7.A “proper authority” for the purposes of paragraph 6 will be a Supplementary Project Memorandum approved and
issued after supplementary application has been made in a manner similar to that set out in this TOM.

8.As relevant, control of expenditure of money issued from the Development Fund shall be maintained in a manner
similar to that set out in this TOM.

9.As relevant and where possible, the requirements for payment set out in this TOM shall be met when making
payments.

10.When the life of a project extends over more than one financial year, the expenditure records maintained in
accordance with the requirement in paragraph 8 shall be cumulative over the life of the project.

11. When a donor agency is foreign the Total Project Cost will normally be quoted in foreign currency. Expenditure in
local currency, shall be so controlled that when converted into that foreign currency the Total Project cost is not
exceeded.

12.Conversion rates in the necessary currencies shall be issued as required by the Accountant General.

13.Project expenditure disallowed from the claims against foreign donors and over-expenditure not accepted by
foreign donors must be subjected to an application, from the accountable officer, to the Financial Secretary copied to
the Accountant General and Auditor General, for approval that it be allowed to “stand charged” in the accounts of the
Republic. The Financial Secretary will determine, when considering the application, whether the expenditure shall be
borne by the Development Fund or the Consolidated Fund. Such expenditure may be surcharged against the
accountable officer.

14. When expenditure is approved and issues made from the Fund prior to financing arrangements having been
completed (“if and when” expenditure), such expenditure shall, nevertheless, be allocated and controlled in accordance
with this TOM F.4.

F.5.REPORTING
1. Within a period of six months after the end of the financial year the Accountant General shall prepare a cumulative
statement of account for each project, separately expressed in the currency quoted by the donor agency. Additional to
any copies the donor agency may require, a copy of each statement shall be sent to the Accountable Officer, to the
Financial Secretary, Accountant General and to the Auditor General. Each statement shall show, inter alia, as at the end
of the previous financial year:-

(a) The actual monies received from the donor agency in support of the project;

(b) expenditure in the year and total expenditure;

(c) the imbalance between assisted expenditure and (a) above.

 | 75

(2).A statement shall be prepared for each year of the life of a project commencing with the year in which the Project
Memorandum is first issued and shall continue to be prepared until the expenditure on the project has ceased and the
imbalance between assisted expenditure and the actual monies received from the donor agency is reduced to nil.

3. Accountable officers shall submit such returns and information relevant to the Development Fund as the Financial
Secretary may, from time to time, require

F.6. PROJECT SCOPE AND VARIATION

1. The ambit of a project shall not materially be altered without the approval of the donor agency obtained through the
Financial Secretary by application in the manner set out in TOM F.3.2. The fullest possible information must be
provided in support of the application.

2. Subject to the requirements of a donor agency, the Financial Secretary has power to make minor variations within
the ambit of an approved project. Accountable Officers who wish to transfer available funds between items within a
project or to utilise savings on one item to create a new item shall make application to the Financial Secretary by
memorandum giving full details of the amounts to be transferred and the reasons for wishing to make such transfers.
Variation of expenditure between items of a project will only be approved when there will be no increase in total
expenditure under the project and there is no major departure from the terms of the Project Memorandum need to be
clarified by DNEPO. The creation of new items shall be subject to availability of funds within the project and their
consistency with the purpose of the project. Approved variations will be notified to the Accountable Officer in writing,
with a copy to the Accountant General and Auditor General. No expenditure shall be incurred or committed in
anticipation of approval to a variation or to the creation of a new item.

3.Expenditure may not be charged to contingencies items and such items may not be used to provide funds for new
items or additional funds under exhausted items without formal approval of either a variation or the creation of a new
item.

4.Transfer between Heads (main divisions), or between items if so specified in the Project Memorandum, of a project
and any change in the project requiring additional funds requires the prior approval of the donor agency, to be obtained
through the Financial Secretary.

F.7. REVENUE ACCRUED FOR PROJECT

Unless otherwise advised by a donor agency in the Project Memorandum, receipt of monies accruing from the
operation of a project or from the disposal of equipment and stores no longer required for the purposes of a project
shall be credited as revenue to the Development Fund during the life of the project.

F.8. PROJECT CLOSURE

As soon as may be after it is apparent that no further debits and credits will be made against a project, and in any case
no later than six months after the end of the financial year in which accounting entries ceased, the accountable officer
shall submit to the Accountant General, copied to the Financial Secretary and Auditor General, a certificate showing:-
(a) that the project may be considered closed

(b) that cumulative revenue and expenditure records have been reconciled with Accounting Division
Accounts and all necessary adjustments taken up;
 | 76

(c) the disposition of movable assets purchased and/or supplied from the project and not previously
written off and the intention for their future use;

(d) the total expenditure analysed, if relevant, in accordance with the latest Project Documents.

F.9. ACCOUNTS AND RECORDS

1. Proper records of receipts and payments of development fund accounts must be maintained. The following records
must be maintained:
(a). A cashbook in which all receipts and payments are recorded in detail.

(b). A general ledger account(s) in the Treasury Attache accounting system. The receipts and payments of the
development fund account must be recorded in the general ledger.

(c ). Money paid into or held in the development fund account is or shall be public money, but that money or
so much thereof as becomes payable to or on behalf of any person shall be statutory expenditure and shall be
issued and paid to or on behalf of that person in such amounts, in such manner and at such times as may be set
forth in any agreement
2. The accounts and records of the development fund accounts must be maintained for at least 7 years after the
last transaction to which the accounts and records relate.

F.10. RECEIPTING OF MONEYS

(1). The receipting of money for a development fund account must be in accordance with the procedures for handling
public moneys stated in this TOM. In particular:
(a) Approved Kiribati Government receipts must be issued for all moneys received, and
(b) Moneys must be banked promptly.

F.11. DEVELOPMENT FUND ACCOUNT ACCOUNTING AND

RECONCILIATION
(1). Departments must maintain a vote ledger for each project and must be reconciled monthly and submitted to the
Treasury. The ledger account balance and where applicable the bank statement balance, must be reconciled to the
department’s cashbook balance as at the end of the month.
(2).Investment funds must be accounted for as part of the account balance.
(3).A copy of the monthly reconciliation for each project together with copies of the cashbook for the month and bank
statements (if applicable) must be forwarded to the Treasury within 7 days after the end of the month.
(4).All moneys which are unclaimed for a period of three (3) years from when they became payable to the depositor or
another entitled person shall be credited as ‘Miscellaneous Receipts’ of the Government.
(5).For development fund accounts which hold deposits which may be repaid to depositors or related third parties,
subsidiary records must be balanced to the cash book balance at the end of each month as part of the monthly
reconciliation. The reconciliation of subsidiary records to the cashbook must be forwarded to the Treasury with the
monthly reconciliation.
 | 77

(6) That Minstries with development project shall prepare a monthly acquittal report for each project and send it after
10 days from the end of the month to the Development Unit in the Treasury where it checks and verifies the
information contained in the acquittal statement and when it has satisfied it then forwards it to the Accountant General
and the Financial Secretary to sign as certification for the accuracy of the Acquittal Statements, which shall then send
by the NEPO to the respective donors. The prescribed “Acquittal Statement” provides the information about the
donor funded project for:

 starting and completion date;

 financial summary;
 project assessment; and
 certification.

F.12. RULES FOR OPERATION OF THE DEVELOPMENT FUND

1. In these Rules "Fund" means the Development Fund.
2.(1). No moneys shall be issued from the Fund for the purpose of meeting any expenditure except in accordance with
a warrant under the hand of the Minister authorising the Accountant General to issue those moneys.

2. (2). Subject to the rules 4, 5, 6 and 7 no warrant shall be issued under paragraph (i) unless the expenditure in
question has been authorised by the legislature by resolution or in accordance with these Rules.
3. (1) The Minister shall cause to be prepared in each financial year estimated of the revenue and expenditure of the
Fund for the next following financial year.

3. (2) The proposals for all expenditure contained in the estimates shall be submitted to the legislature and a statement
showing the estimated balance of the Fund at the commencement of the financial year and the anticipated revenue
accruing to and total expenditure from the Fund during the financial year shall also be furnished to the legislature.

4. (1) If the legislature has not yet authorised for any financial year expenditure of sums necessary to finance the
continued construction and provision of development works for which provision was made from the Fund in the
previous financial year the Minister may by warrant authorise the issue from the Fund of such sums as are necessary to
finance the continued construction and provision of such works to enable such works to be carried out for a period of 4
months or until the expenditure of sums necessary to finance the continued construction and provision of such works
has been approved by the legislature whichever is the shorter period.

4. (2) Notwithstanding paragraph (1) no sum may be issued under this rule in respect of any subhead where such sum
would be in excess of 20 per cent of the estimate of the total cost for such subhead as it appears in the development
estimates or supplementary development estimates approved by the legislature.

5. (1) When in any financial year the development estimates or supplementary development estimates for that year
include an estimate of total cost for any subhead over any period which is in excess of the total sum appropriated for
that subhead for the current year the Minister may by warrant authorise the expenditure of any sum which, when added
to the expenditure incurred on the corresponding subhead in previous years and to the expenditure already authorised
for the same subhead for the current year, does not cause to be exceeded the latest estimate of total cost for that
subhead included in the development estimates or supplementary development estimates approved by the legidlature
for that year.

5. (2) When at the commencement of any financial year the provision included for any subhead in the development
estimates or supplementary development estimates of the immediately preceding financial year has been only partially
 | 78

expended the Minister may by warrant authorise the expenditure of the unspent balance of such provision under a
corresponding subhead in the current financial year:

Provided that the amount so authorised shall not when added to the expenditure incurred in previous years and to the
provision already made in the current year, exceed the latest overall estimate of total cost for the subhead included in
any development estimates or supplementary development estimates approved by the legislature.

5. (3) No warrant under this rule shall authorise the issue of an amount which if it were expended at once would
exceed the balance of the Fund remaining after all other expenditure authorised for the year has been provided for.

6. The Minister may with the approval of he Cabinet by warrant authorise the issue from the Fund of such sum as may
be necessary for expenditure under any subhead of a special character which is not provided for to the expenditure
already authorised by the legislature for the year and which cannot or cannot without serious injury to the public
interest be postponed until adequate provision can be made by the legislature:

Provided that no such warrant shall authorise the issue of an amount which if it were expended at once would exceed
the balance of the Fund remaining after all other expenditure authorised for that year has been provided for.

7. (1) The Minister may in any year by warrant authorise the issue from the Fund of such additional sum as may be
necessary for expenditure under any subhead which has been authorised by the legislature for that year and the issue of
which cannot or cannot, without serious injury to the public interest be postponed until adequate provision can be
made by the legislature:

Provided that no such warrant shall authorise the issue of a sum in excess of 20 per cent of the latest estimate of total
cost for that subhead as included in any development estimate without the approval of the Cabinet.

7. (2) No warrant under this rule shall authorise the issue of an amount which if it were expended at once would
exceed the balance of the Fund remaining after all other expenditure authorised for the year has been provided for.

8. The Minister shall at the meeting of the legislature next following the issue of any warrant under rule 5, 6 or 7
present a supplementary estimate covering the expenditure to the legislature for its approval.
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PART G: SPECIAL PURPOSE AND TRUST ACCOUNTS

G. 1. SPECIAL PURPOSE ACCOUNTS

Special Purpose Accounts are established for recording, managing and accounting for monies received for a specific
purpose which is not part of a Head or subhead Specific purpose monies are public monies. A Special Purpose Fund
has been established for the administration of special purpose accounts and special purpose account money.

The Special Purpose Funds are provided for under section 12 of the Public Finance Act, and the specific special funds
being operated are set out in Schedule 1 which constitute of:
 Government Savings Bank
 Local Government Loans Board
 Revenue Equalisation Reserve
 Funds Special-Leper Trust Board
 Funds Special-Lien (GIDA & RER)
 Funds Special-Local Government Provident
 Funds Special-Import Levy Fund
 Kiritimati Plantation
 Funds Special-Ellice Separation

Special purpose accounts are to be reported in the annual accounts of the Government.

G.1.1. Accounts and Records

Proper records of receipts and payments of special purpose accounts must be maintained. The following accounts and
records must be maintained for each account:

(a) A cashbook in which all receipts and payments are recorded in detail.

(b) A general ledger account(s) in the Treasury Attache accounting system. The receipts and payments of
the special purpose account must be recorded in the general ledger.

(c) Money paid into or held in a special purpose account is or shall be public money, but that money or so
much thereof as becomes payable to or on behalf of any person shall be statutory expenditure and
shall be issued and paid to or on behalf of that person in such amounts, in such manner and at such
times as may be set forth in any agreement

The accounts and records of special purpose accounts must be maintained for at least 7 years after the last transaction
to which the accounts and records relate.

G.1.2. Establishment of Special Purpose Accounts

For establishing any special purpose account prior approval of the Accoountant General shall be obtained in
accordance with the following procedure:
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(1) The Head of Department or appropriate officer of the organization responsible for the account shall submit
a Charter for each special purpose account setting out the purpose and relevant details of operation of the
account to the Accounant General for approval prior to the establishment of the account in the ledgers.
The Charter must include the following:

(a) The name of the special purpose account;

(b) The name of the department or organization administering the account;
(c) Any legal or contractual requirement for operation of the account;
(d) The purpose of the account;
(e) The names and designations of the authorized signatories of the account;
(f) The approved source of funds that may be deposited into the account;
(g) The approved categories of expenditure that may be paid from the account;
(h) The disposal of any remaining funds in the event that the purpose of the account is no longer required or
its purpose is complete.

(2) If approved by the Accountant General, the Treasuey will set up the special purpose account in the general
ledger of the government and will advise ministries of the details of the account and activity codes that
must be used for recording transactions in the Attache and Access accounting system.

G.1.3. Establishment of Separate Bank Accounts for Special Purpose Accounts

If a separate bank account is required by legislation or contractual arrangements for the receipt and payment of special
purpose moneys, the request for the establishment of the separate bank account shall be made by the Head of
Department or appropriate officer at the time of submission of the Charter for special purpose account to the
Accountant General. After approval of the Accountant General, the Tresury, in consultation with the relevant
ministry/organization, will liaise with the bank and set up the approved bank account.

(1) No ministries shall set up a separate bank account at a bank for public monies on its own. However, it
can be set up with the prior endorsement of the Accountant General and in accordance with the Public Finance
Act requiring the Minister of Finance’s approval.

(2) For operating the bank account the ministries shall nominate at least two signatories. All cheques and
investments must be signed by the two authorized signatories. If there is any change in approved signatories,
the same shall be immediately advised to the Treasury by the respective ministries.

(3) All fees/costs incurred in operating a special purpose bank account must be paid from the special
purpose account or by the department.

G.1.4. Receipting of Moneys

(1) The receipting of money for a special purpose account must be in accordance with the procedures for
handling public moneys specified in this TOM. In particular:

(a) Approved Kiribati Government receipts must be issued for all moneys received, and
(b) Moneys must be banked promptly.
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(2) If the special purpose account has a separate bank account, Treasury will issue a separate receipt book
for the bank account. Only this receipt book shall be used for all receipts of the special purpose
account.

(3) The special purpose ledger account number must be clearly identified on the receipts.

(4) The duplicate receipts and a speicified form must be forwarded to the Treasury within 7 days after the
end of each month.

G.1.5. Payments from Special Purpose Accounts

(1) Payments from special purpose accounts shall be approved and processed only for the purpose of
the account:

(a) If sufficient credit is available in the account; and

(b) If the payment is properly authorized.

(2) All payments from special purpose accounts shall be made by cheque unless the Accountant
General approves any other means of payment.

(3) Payment vouchers are to be forwarded to Treasury for processing, unless the special purpose
account has a separate bank account. After processing the payment voucher, the cheque drawn by
the Treasury will be sent to the department for issue.

(4) If the special purpose account has a separate bank account, payments drawn from the account
must be properly approved and checked before cheques are drawn and signed by the authorized
signatories of the bank account.

(5) All cheques from separate bank accounts must be drawn in favour of a person or organization. No
cheques may be drawn payable to cash.

G.1.6. Special Purpose Account Accounting and Reconciliation

(1) Departments must maintain a cashbook for each special purpose account. The following details for
receipts and payments are to be recorded in the account:

Table 3: Details to be recorded in Cashbooks for Special Purpose Accounts

Receipts Payments
Date received Date of Payment
Receipt number Name of Payee
Name of depositor Nature of Payment
Nature of the money received Cross reference to a receipt if applicable
Cheque number
Amount Received Amount of the Payment
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(2) Each special purpose account must be reconciled monthly and submitted to the Treasury. The ledger
account balance and where applicable the bank statement balance, must be reconciled to the
department’s cashbook balance as at the end of the month.

(3) Investment funds must be accounted for as part of the account balance.

(4) A copy of the monthly reconciliation for each special purpose account together with copies of the
cashbook for the month and bank statements (if applicable) must be forwarded to the Treasury within
7 days after the end of the month.

(5) All moneys which are unclaimed for a period of three (3) years from when they became payable to the
depositor or another entitled person shall be credited as ‘Miscellaneous Receipts’ of the Government.

(6) For special purpose accounts which hold deposits which may be repaid to depositors or related third
parties, subsidiary records must be balanced to the cash book balance at the end of each month as part
of the monthly reconciliation. The reconciliation of subsidiary records to the cashbook must be
forwarded to the Treasury with the monthly reconciliation.

G.2. TRUST ACCOUNTS

(1) Trust Accounts are established for recording, managing and accounting for monies received as trust
money. Trust money means:

(a) Money that is deposited with the State pending the completion of a transaction or dispute and
which may become payable to the depositor or to the State or any other person;
(b) Money that is paid into Court for possible repayment to the payer or a third party, by virtue of any
Act, rule, judicial direction, or other authority;
(c) Unclaimed money that is due to or belongs to any person and is deposited with the State;
(d) Money that is paid to the State in trust for any purpose as approved by the Accountant General;
and
(e) Money that belongs to or is due to any person and is collected by the State under any agreement
between the State and that person.

(2) Trust money shall be held and accounted for separately from public money.

(3) For each trust account, a separate ledger account and a separate bank account must be established to
record and account for the trust moneys.

(4) Trust accounts will be reported separately in the annual public accounts.

G.2.1. Accounts and Records

Proper records of receipts and payments of trust accounts must be maintained. The following accounts and records
must be maintained for each account:

(a) A cashbook in which all receipts and payments are recorded in detail.
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(b) A general ledger account(s) in the Treasury accounting system. The receipts and payments of the trust
account must be recorded in the general ledger.

(c) For all trust accounts which hold deposits which may be payable to depositor or a related third party,
subsidiary records must be maintained which show the balance of moneys payable to each depositor.
The total of the subsidiary records must balance to the total of funds held in the trust or special
purpose account.

The accounts and records of trust accounts must be maintained for at least 7 years after the last transaction to which
the accounts and records relate.

G.2.2. Establishment of Trust Accounts

For establishing any trust account prior approval of the Accountant General shall be obtained in accordance with the
following procedure:

(1) The Head of Department or appropriate officer of the organization responsible for the trust account
shall submit a Charter for each trust account to the Accountant General for approval prior to the
establishment of the account in the ledgers.

(2) The Charter must include the following:

(a) The name of the trust account;

(b) The name of the department or organization administering the account;
(c) Any legal or contractual requirement for operation of the account;
(d) The purpose of the account;
(e) The names and designations of at least two authorized signatories of the account;
(f) The purpose of the account;
(g) The approved sources of funds that may be deposited into the account;
(h) The approved categories of expenditure that may be paid from the account;
(i) Any particular conditions; and
(j) Instructions for the disposal of any remaining funds in the event of the closure of the account.

(3) The Accountant General shall endorse approval or disapproval of the request on the face of the
Charter. However, if the money has already and unavoidably been received by the department and is
trust money as defined in the the Public Finance Act, the Accountant General shall not disapprove
the request.

(4) In the case of an approval, the Charter shall constitute an agreement for the operation of the relevant
account which shall be established forthwith.

G.2.3. Establishment of Separate Bank Accounts for Trust Accounts

(1) The request for the establishment of a separate bank account for the trust account must be
forwarded to Treasury with the submission of the Charter. Departments may not establish bank
accounts without the approval of the Accounatnt General and in accordance with the Public
Finance Act, requiring the Minister of Finance prior approval.
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(2) At least two authorized signatories must be nominated for the bank account. All cheques and
investments must be signed by at least two authorized signatories.

(3) Treasury in consultation with the relevant Department will arrange for the separate bank account
to be set up at an approved bank.

G.2.4. Receipting of Moneys to Trust Accounts

(1) The receipting of money for a trust account must be in accordance with the procedures for handling of
public moneys as specified in this TOM. In particular:

(a) Approved Kiribati Government receipts must be issued for all moneys received; and (b) Moneys
must be banked promptly.

(2) Treasury will issue a separate receipt book for the trust account and this receipt book must be used
only for receipts of trust account.

(3) The trust ledger account must be clearly identified on the receipts.

G.2.5. Payments from Trust Accounts

(1) Payments from trust accounts shall only be approved and processed for the purpose of the
account:

(a) If sufficient credit is available in the account, and

(b) If the payment is properly authorized.

(2) All payments from trust accounts shall be made by cheque unless the Accountant General
approves any other means of payment.

(3) Payments drawn from the account must be properly approved and checked before cheques are
drawn and signed by the authorized signatories of the bank account.

(4) All cheques from separate bank accounts must be drawn in favour of a person or organization. No
cheques may be drawn payable to cash.

G.2.6. Trust Account Accounting and Reconciliation

(1) Departments must maintain a cashbook for each trust account. The following details for receipts and
payments are to be recorded in the cash book:
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Table 4: Details to be recorded in Cashbooks for Trust Accounts

Receipts Payments
Date received Date of Payment
Receipt number Name of Payee
Name of depositor Nature of Payment
Nature of the money received Cross reference to a receipt if applicable
Cheque number
Amount Received Amount of the Payment

(2) Each trust account must be reconciled monthly. The cashbook balance must be reconciled to the bank
statement balance at the end of the month.

(3) Investment funds must be accounted for as part of the trust account balance.

(4) A copy of the monthly reconciliation together with a copy of the cashbook and the related bank
statement for each trust account must be forwarded to Treasury within 7 days after the end of the
month.

(5) All moneys which are unclaimed for a period of three (3) years from when they became payable to the
depositor or another entitled person shall be credited as ‘Miscellaneous Receipts’ of the Government.
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PART H: PAYMENTS

H.1. CLAIMS TO BE SUBMITTED TO TREASURY FOR PAYMENT

(1) Claims for payment of public money which are a charge against the Consolidated Fund shall be
submitted to the Treasury for payment.

(2) The only exceptions to this instruction are payments paid out of imprest as set out in Instructions L
and interdepartmental transactions as set out in Part N of these Instructions.

(3) Alll expenditure of public monies must be vouched for on the original of a prescribed payment
voucher form. Duplicate and other copies will be clearly marked as such and no payment may be
made against such a voucher. Vouchers shall be made out in favour of the person or persons to whom
the money is actually due.

(4) Payment Voucher, together with two copies are to be prepared for each payment and the original and
one copy are to be submitted to Treasury with invoices and supporting documents within three (3)
working days of the claims being received in Departments. The department must keep the second
copy on file for its own record.

(5) All claims are to be date stamped immediately on their receipt by the Department. They may also be
stamped with the date and time when they are dispatched to the Treasury.

(6) If a claim is held by a department for more than seven days, it is to be submitted to the Treasury with a
written explanation by the senior accounting officer, stating the reasons for the delay. If the delay in
payment of a claim is due to dispute over part of the claim, the disputed part may be deleted after
consulting the claimant and the undisputed part forwarded to the Treasury for payment. The disputed
part may be claimed separately.

H.2. PROCESSING OF CLAIMS FOR PAYMENT IN TREASURY

(1) All government payments are processed through the payment module in Access and then post into the
Attache accounting System. The payment claims are received and authorized, payments are produced
and issued, and the costs are recorded against Head in the General Ledger Accounts.

(2) The payment module in the MS Access that the Government uses for generating and recording
creditor’s payments. A creditor is any individual or organization to which the government legally
owes money for goods and/or services provided.

(3) Within the payment system, there are two types of payments and procedures vary according to the
type of payment:

H.2.1 Purchase Order Payments

(a) These are payments for which a purchase order has been raised and the associated commitment of
funds has been recorded in the Access program.
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(b) The requisition was approved by the accountable officer from each Ministry where the invoice
payment is matched against the relevant Purchase Order before it is forwarded to Treasury Recurrent
section.
(c) The Treasury Recurrent Section checks the payment and account payable details before processing the
payment from the Access Payable System.

(d) No purchase order may be paid unless the requesting agency or office has first ensured the availability
of funds and has performed the necessary steps under this TOM to expend the funds. Failure to
perform the required steps to authorize the payment of a purchase order may result in the requesting
officer being personally liable for the obligation created by the improper Purchase Order.

(e) Any purchase order properly processed and approved in accordance with the Public Finance Act,
regulations and the TOM shall be paid within 30 days from the date the purchase order has been
presented to the Treasury for payment.

H.2.2 Payments without a Purchase Order (Direct Invoice)

(a) These are payments where a purchase order has not been raised prior to the receipt of the
invoice for the goods or services provided. Examples of this type of payment: electricity,
telephone accounts, petty cash reimbursements, advances for travel & attendance at
workshops, conferences.
(b) The payments are approved by the head of the Corporate Services Division or the
accountable officers for each Ministry and payment voucher is prepared and forwared to
Treasury for processing of payment.

H.3. PROCESSING OF PAYMENT VOUCHERS

H.3.1. Processing in the Ministry

1. Payment vouchers shall be in such form as the Accountant General may prescribe .

2.Separate payment vouchers will, as far as possible, be used for each subhead and the payments for different services,
particularly in cases where each service has been separately authorised. Where the allocation on a voucher is to more
than one sub-head it shall be supported by a “Schedule of Allocations” form A.F. 18.

3.The signature of the accounting officer or an officer to whom authority to incur expenditure has been delegated
certifies to the correctness of the voucher.

4.In no circumstances whatever shall an officer sign blank or uncompleted vouchers.

5. The accounting officer certifying for the accuracy of the voucher shall be responsible to check that:-

(a) funds are available taking into account commitments outstanding;

(b) the rates or prices charged are in accordance with regulations, contract or agreement as the case may
be and are fair and reasonable;
(c) authority has been obtained as quoted;
(d) the computations and castings have been verified and are arithmetically correct;
(e) the persons named in the voucher are those entitled to receive payment;
(f) all proper deductions from salaries or wages on account of repayment of advances or other liabilities
have been duly made.
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(g) procurement legal requirements arecomplied with.

H.3.2. Processing in Treasury

1. The recurrent payment is forwared to the Recurrent Unit in Treasury for checking.

2. The purpose of the checking is to ensure that the payment voucher received has been completed correctly and that
all details are complete and reasonable and are supported by the accompanying documents and explanations. In
particular check that:

 the calculations on the supporting documents agree and are correct;

 the ledger accounts and activity codes are appropriate and valid;
 certification has been provided by the ministries’ officers with appropriate authority.
2.For overseas creditors, include the proper decutions, bank commission, and any other fees included in the
invoice amount, update the exchange rates on the system and amend the payee details to record the bank that
will provide the telegraphic transfer, bank draft or sight draft
3.If there are queries, refer the claim to the relevant ministries and record the query in the Creditors ’ Claims
Query Register:
• Date of query;
• Department;
• Name of Creditor;
• Reason for the query;
• Amount of the payment.
4. Check that the creditor does not have an outstanding debt with the Tax Division (by referring to the Tax
Division of the MFED advices).
5. When satisfied with the voucher, initial and date on the voucher and pass the voucher payment to the
Transactive Section for drect payment to the bank account or to the Payment Section for cash payment.

H.4. PREPARATION OF VOUCHERS

1.All vouchers shall provide the following:-

(a) contain full particulars of each service such as dates, numbers, quantities, distances and rates, so as to
enable them to be checked without references to any other document, except that in such cases where
invoices or similar documents are available they shall be attached to the voucher and shall suffice to
support the payment provided that all relevant details are included thereon;
(b) quote the appropriate authority for expenditure;
(c) quote the Head and subhead as applicable if above-the-line, or the main ledger code number and title s
appropriate if below-the-line;
(d) be fully completed in regard to the various certificates and spaces provided for information
incorporated in the form of the voucher.

2. .In addition to the certificate on the voucher being appropriately completed, a certificate as under shall,
where relevant and where the voucher is prepared by the Accounting Officer, be included within the body of
the payment voucher, or where the voucher is prepared not by the Accounting Officer, be written on to or
attached to, the relevant invoice or payment voucher.
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(a) For payments for stores purchased in bulk for issue as required and for non-expendable stores:- “I
certify that the articles have been received and taken on charge in the appropriate ledger.”

(b) For payments for stores purchased in small quantities for immediate use:- “These stores have been
received and issued immediately for their proper use.”.

(c) For payments for hired transport:- “I certify that the hire of the vehicle/launch was necessary in the
public interest.”

(d) For payment for services rendered:- “I certify that the services have been duly performed.”

3.When it is impracticable to obtain receipts for petty disbursements, a certificate of payment shall be given on
the voucher:- “that the charges have been incurred solely on the public service and have actually been paid”.

4. Payment vouchers shall be typed, or written and signed in ink or a ball point pen. The original of a payment
voucher shall be signed in full; facsimile signature stamps are not allowed. Copies shall be initialled or
stamped. Each certificate, if more than one is necessary, on a payment voucher shall be signed separately.

5.All copies shall be legible and no erasures of any kind shall be allowed. Alterations to payment vouchers
shall be initialled by the authorising officer. Any voucher bearing extensive alteration may be rejected by the
checking or paying officer.

6. Vouchers for payment on Tarawa, or at another station through the use of the telegraphic money order
service, shall be submitted to the Accountant General for pre-payment examination, except that special
provision may apply to Imprests as detailed in these regulaitons. Vouchers raised in outstation sub-
accountancies will be examined and paid by the sub-accountant. Vouchers shall reach the checking officer, at
least 24 hours before payment is required .

7.Payments outside the Republic shall be arranged only by the Accountant General unless his specific
approval to the contrary has been obtained.

8. The original and such additional copies as the Accountant General or accountable officer may from time to
time require shall be prepared in addition to any copies which may be required to the purposes of the
department preparing the voucher.

9.Payment vouchers presented to the Accounting Division, and where necessary to accountable officers, shall
bear legible ministerial reference numbers.

10. The following basic requirements in voucher preparation shall be observed to enable claims to be paid
without delay:-
(a) Particulars must be typewritten or written clearly in ink, and be free from erasures and
overwriting.
(b) The name of the claimant and full address must be shown on the voucher and carbon copies.
The carbon copies must be clear enough to be read easily through a window envelope (if
used).

(c) Where detailed invoices are attached, it is not necessary to record that information in detail
again on the voucher, as long as there is sufficient reference to them: e.g. “Hardware as per
attached invoices” or “Boat fares as per attached statement” Invoice numbers should be
quoted in these cases, where these are available.
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(d) The signature of the claimant is to be on the voucher, except where a supporting invoice is
attached, or where payment is initiated by the department itself: e.g. Refunds, Allotments,
Subsidies, Grants etc.,

(e) The total is to be shown clearly in figures, in the space provided, and the amount is to be
shown in words.

(f) The appropriate authorities (e.g. Cabinet Approval) are to be quoted in the authority column
of the voucher or transfer voucher wherever applicable.

(g) Invoices and voucher copies of orders are to be pasted face upwards on the back of the
voucher, in such a manner that the numbers are not obscured. The papers may also be stapled
together if there are only a few. (It is not permissible to pin the papers to the voucher because
they may become detached and lost).

(h) The directions for charging are to be correctly and legibly entered. The insertion of the name
and the number of the head/Sub-head and Natural Accounts to be charged are required. e.g.
Local Travel 216 (natural account number) $3.10.

(i) Each voucher is to be initialed by the persons checking the voucher and entering it in the
Department‟s accounting records and signed in the space provided by the Certifying Officer.

(j) Claims requiring special approval should preferably have a copy of the approval attached but at
least they are to contain a reference to that approval, or bear the signature of the relative authority:
e.g. Public Service Commission
Attorney-General

(k) The copies of requisitions and/or purchase orders are to be attached to the vouchers to which
they relate and the voucher number inserted on the bound copy of the purchase order. In
order to prevent delays in payments, Departments are to ensure that these copies are sent to
Departmental voucher/payment section as soon as possible after issue, and that an adequate
control system is introduced to see that copies are received. If payment is being delayed
because the voucher copy cannot be located, the Accountant General is to be advised and he
will advise what action is to be taken.

(l) Vouchers for invoices for imported supplies, freight charges and other payments which must
be made before the goods are received, are to bear a certificate to the effect that the bills of
lading and other documents in support of the claim will be obtained at the time of payment.
(m) No charges may be debited to Advances, or Deposits accounts without the prior approval of
the Accountant General.

(n) All claims on the Government for supplies and services, after being certified by the Officer
authorized to do so are to be sent to the Treasury by him.

(o) Where suppliers forward with the claim a statement of account, the statement is to be attached
to the voucher, and forwarded to the Treasury, with a reconciliation or explanation showing
the reason for any outstanding invoices which are more than two months old. Such claims
sent to the Treasury after the date of the statement are to be indicated by the Departmental
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voucher number. Other amounts outstanding for more than two months are to be noted with
the reason why they have not been paid.

(p) For the preparation of salary and wage vouchers, refer to Part J. of these Instructions.

H.5. CHECKING OF VOUCHER FOR PAYMENT

1. The Accountant General or other checking officer, before passing any voucher for payment, shall, in
addition to the other duties imposed on them under this TOM, satisfy themselves:-

(a) that the Head and subhead charged represents a fair allocation of the expenditure incurred and is
correctly described according to the approved Estimates for the current year varied, as necessary, by
Virement Warrant, Contingencies Warrant or Schedule of Supplementary Appropriation.

(b) that the authority for the payment is properly and adequately described on the face of the voucher in
the space provided;

(c) that the person signing as accounting officer or on his behalf, or as a Secretary’s warrant holder is
properly authorised to do so;

(d) that there is no obvious defect or error in the wording of the amount in any of the particulars of the
payment and that the payment represents a fair charge against public funds;

(e) that the voucher has been endorsed “entered in vote ledger”.

2.No amount of scrutiny or examination of payment vouchers and their supporting documents by the
Accounting division and Audit Officers shall relieve the accounting officers of responsibility for their
correctness.

3. The Accounting Division or cashier shall not make payment against a voucher unless the voucher is
initialled by the checking officer and properly authorised for payment.

H.6. PAYMENT OF VOUCHER

1.Payments shall be made only to the persons named in the vouchers or their properly authorised
representatives. Paying officers must satisfy themselves that the person claiming the payment is the person
authorised to receive the amount. It is the duty of the department responsible for payment to furnish proof of
identity if necessary. Payment vouchers must be receipted by the payee or his properly authorised
representative.
2. No government officer may receive any payment from public funds on behalf of or as an agent for a
member of the public.

3.The signature of an authorised representative of a firm or corporation may be accepted by a paying officer
provided he has been supplied with a specimen signature.
4. The authority from a payee for a third party to receive payment on his behalf shall be in writing and shall be
attached to the payment voucher. In the case of continuous payments to a third party, including a bank, the
authority shall be filed by the paying officer for reference and quoted in the vouchers. When payments are
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made to legal representatives, authorities such as a Power of Attorney, Letters of Administration etc. shall be
presented to the paying officer for inspection and the fact recorded on the voucher. If possible, the authority or
a copy shall be attached to the voucher.
5. When a payee is illiterate, his mark shall be witnessed by an officer other than the paying officer or by a
literate person known to the paying officer.
6.Vouchers shall not be receipted before payment is actually made. When vouchers are presented to the
Accounting Division or cashier for the purpose of obtaining cash to make payments elsewhere in cases, for
example, where the vouchers cover a number of payees (e.g. salaries) and when it would not be practicable to
insist on each payee presenting himself to the cashier’s office payment shall be made against the authorised
receiving officer’s signature on the duplicate copy of the voucher. The original and copy vouchers will
nevertheless be stamped ‘paid’ following the procedures in TOM G.5.2. and entered in the cash book.
7. The duplicate of vouchers signed by the officers to whom the original vouchers and cash have been handed
shall be retained as temporary vouchers by the Accounting Division cashier or accountable officer until the
original vouchers are received back from the paying department duly receipted by the payees. Paying officers
must ensure prompt return of the vouchers, and in no circumstances shall they be outstanding for more than
one week. Upon return of the original vouchers, the duplicate vouchers shall be released to the officer who
presented them for payment.
8. Advances or any other sums which are recovered from payments must be clearly inserted in the body of the
payment voucher. The gross amount shall be shown in the cash book as a payment and the deductions shall be
brought to account as receipts.
9. In the event of any overpayment being made in consequence of an erroneous entry on the voucher the
certifying officer shall be held responsible and the amount incorrectly paid may be surcharged against him.
Such overpayment shall be treated as a cash loss and dealt with in accordance with applicable provisions in
this TOM concerning cash losses. Similarly where expenditure is incurred which on reference to the
Accountant General appears to him to be irregular or in error he may require it to be reported and dealt with as
though it were a loss of public funds.

H.7. FORM OF PAYMENT

1.Whenever possible all payments of fifty dollars or more shall be made by cheque if a bank account is kept.
The fullest use should be made of the telegraphic money order service to make payments between Tarawa and
other money order offices in the Republic.

2. At the time he issues cash or a cheque to make payments, the Accounting Division cashier or the
accountable officer shall stamp ‘paid’ on the original and all copies of the voucher presented to him, on all
supporting documents attached to it, and on any relevant schedule of allocations form.

H.8. ALTERATION OF VOUCHERS

(1) No alterations are to be made to vouchers after payment.

(2) Alterations may be made to unpaid vouchers in accordance with the provisions of Instructions D.23
provided that any such alteration is initialed by the Certifying Officer.
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H.9 LOST VOUCHERS

(1) Vouchers lost before payment: If a voucher is lost before payment and cannot be found after a
thorough search has been made, a duplicate voucher, with, as far as possible, duplicates of supporting
papers may be prepared. Such vouchers shall be labeled as “Duplicate” and supported by a certificate,
“that the claim has not already been paid” from the Certifying Officer and a statement of the reason
for preparing the duplicate voucher.

(2) Vouchers lost after payment: If a department becomes aware that a voucher has been lost after
payment, the Accountant General is to be informed without delay.

(3) When a department is requested to prepare a duplicate of a paid voucher, the duplicate should be as
close as possible or an exact copy of the original. It is to be certified in the usual manner, clearly
marked that it is a duplicate of a paid voucher and have and additional certification that it is a true and
correct copy of the original. If the duplicate voucher is a salary voucher or other voucher which has
receipt for payment on the voucher itself, duplicate receipts are not to be obtained unless specifically
requested by the Accountant General. The voucher shall be endorsed by the Certifying Officer as
follows:

“I certify that to the best of my knowledge and belief the amounts shown have been paid to the
persons named and that they received the amounts stated”.

H.10. VOUCHERS FOR REFUNDS OF REVENUE

1. Vouchers for refunds of revenue or refund of other money received are to show:

(a) The number of the receipt or other reference to the receipt through which the particular amount
was received;
(b) The account to which the original receipt was credited;
(c) The date the money was received; and
(d) The reason for the refund.

2. If the payment is a refund of an amount which has been received twice the information required as per
(a), (b) and (c) is to be given for both the amounts received.

H.11. DISCOUNT ON CLAIMS

(1) It is the responsibility of the purchasing officer to ensure that all trade, special or cash discounts
available from a supplier are endorsed on stores order forms.

(2) Certifying Officers are responsible for ensuring that discount shown on orders and discounts on
invoices, whether or not shown on orders, are in fact, deducted from the corresponding claims. If it is
subsequently found that a discount has been wrongly deducted an adjustment is to be made with the
payee.
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(3) All vouchers involving cash discounts are to be paid promptly to ensure that the discount is obtained.
When sent to the Treasury for payment, vouchers with a cash discount shall have a note attached to the
front of the voucher stating, “last discount day” followed by the date.

(4) If discount is lost to the Government through negligence or noncompliance with these instructions the
penal provisions for surcharge in the Public Finance Act and in the TOM may be applied to the officer
or officers responsible for the loss.

H.12. URGENT PAYMENTS

(1) If a payment is required to be made urgently the voucher is to be sent to the Treasury with the word
“URGENT” printed in block letters on the face of the voucher and a note explaining why the payment
is urgent.

(2) Urgent payment vouchers received by the Treasury before 10 a.m. on any day will be paid at 1.30 p.m.
on the same day. The cheques may be picked from the Treasury at any time after 1.30 p.m.

(3) Urgent vouchers will only be paid by the Treasury at other times in exceptional circumstances where
the reason for urgency is given in a note accompanying the voucher.

H.13. PAYMENT TO AN AGENT OF A PAYEE

(1) Payment may be made to an agent of the payee only in the following cases:

(a) When a special order to pay an agent has been given by the claimant, it should be written
separately and attached to the voucher.
(b) When a general authority has been given in favour of an agent. In such cases, the order is to be
referred to Treasury and a reference to the order will be given by Treasury which is to be quoted
on all vouchers payable to that particular claimant.
(c) Payments to a solicitor on behalf of a client are to be made by cheques made out to the trust
account of the solicitor and have a “Not Negotiable” crossing.
(d) Vouchers for payments made to persons authorized to receive money as attorney, executor or
administrator are to be noted by the Certifying Officer that the power of attorney, probate or
letters of administration, as the case may be, has been produced and in the case of powers of
attorney that it has not been revoked.

(2) In all cases where payment is to be made to an agent the name of the original claimant is to be shown
on the voucher and the name of the agent beneath that of the claimant with a note to show that the
amount is to be paid to the agent.

(3) The cheque is not to be released from the Treasury unless and until the claimant or person authorized
to pick it up has positively identified himself.
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H.14. PAYMENT WITHOUT PRODUCTION OF PROBATE OR

LETTERS OF ADMINISTRATION
On the death of any person to whom not more than $400 is due, the Accountant General may authorize payment
without requiring the production of probate or letters of administration. Normally, authority will only be given in
cases where probate or letters of administration have not been issued and will not be applied for. Every case where
this authority is desired is to be referred to the Accountant General with full details of the circumstances.

H.15. OVERSEAS PAYMENTS

Vouchers for payment overseas are to be forwarded to the Treasury in the normal way but clearly marked “overseas”
across the top edge of the voucher form. Treasury will arrange for the payment in the most appropriate manner e.g.
bank draft, electronic remittance/transfer, telegraphic remittance, or cheque on its overseas bank accounts.

H.16. CLAIMS TO BE PAID BY CHEQUE

(1)All claims are to be paid by cheque except where payment by other means has been authorized by the
Accountant General. See however Part N in respect of interdepartmental transactions.

(2).Each cheque is to be accompanied by an Advice Note, which is normally a carbon copy of the voucher, to
advise the claimant of the purpose of the payment.

H.17. DRAWING OF CHEQUES

Officers drawing cheques are to ensure that:

(a) The writing, figures and signature are clear and legible;

(b) The name of the payee is correctly shown;

(c) Amount in words and figures agree;

(d) Sums expressed in words or figures are written as near as possible in the left of the space provided;

(e) No blank spaces are left either between the money symbols or between words representing the amount
of the cheque, and that after words or figures of the amount lines are drawn to prevent any fraudulent
additions to words or figures;

(f) The cheque is correctly dated;

(g) The date, amount of the cheque, the payee’s name and, where applicable, the voucher number are
entered on the cheque butt or other record;

(h) The amount of the cheque agrees with the total amount of the voucher. That cheques are drawn to
order and if they are to be sent through the post are crossed “Not Negotiable”. The crossing may be
 | 96

omitted for salary and wages cheques or in any case where the payee specifically requests for an open
cheque;
(i) Cheques made payable to Ministries intended for salary or wages payments etc. shall be endorsed in
the right hand corner ‘please pay cash’ and signed by the signatories of the cheque. Similarly when an
individual specficially request to obtain cash in exchange for the cheque rather than to lodge the
cheque in an account with the bank an endorsement ‘please pay cash’ is required.

(j) When a cheque is spoiled or cancelled it shall be affixed to the counterfoil and retained in the cheque
book.

(k) Cheques drawn against an official bank account shall be signed by two officers, one of whom shall be
the officer authorised to operate the account. Officers signing cheques shall also initial the
counterfoils; and

(l) In no circumstances whatever shall an officer sign blank or uncompleted cheques.

H.18. SIGNING A CHEQUE

1.An officer signing a cheque in respect of vouchers shall:-

(a) see that the cheque number has been recorded on the voucher(s);

(b) see that the cheque is properly drawn e.g. that the name of the payee is correctly stated, that the date is
correct, that the amount in words agrees with the figures and that the counterfoil has been correctly
filled in;

(c) check that the payment vouchers have been clearly marked ‘paid’ and dated to agree with the date of
the cheque;

(d) see that the payment vouchers have been duly passed for payment by reference to the initials of the
checking officer; and

(e) initial the cheque counterfoil and ensure that the balance in the account as recorded on the counterfoil
has been properly adjusted to take account of the cheque.

H.19. LOST CHEQUES

(1) If a payee reports that a cheque has been lost or not received by him, the Treasury will immediately
instruct the bank to stop payment.

(2) If such a loss is reported to a departmental officer, he is to notify the Treasury immediately, and on no
account other than as provided in G.16 for stale cheque may he or his department issue instructions to
the bank for payment to be stopped on the cheque, or for it to be met at a later date.

(3) If the payee admits that he has received the cheque, he shall, unless the Accoutant Gereal otherwise
directs, furnish an indemnity bond and advertise the loss at least twice. The indemnity bond and a
copy of the newspaper advertisement must accompany any application to the Accountant General for
authority for re-issue of cheque.
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(4) If the payee reports that he has not received the cheque, enquiries are to be made with the Post Office
or messenger. If the cheque is not traced the Accountant General may authorize the issue of a
duplicate cheque. This fact shall be recorded on the voucher together with a statement that the proper
enquiries have been made without any result.

(5) Where a cheque has been lost by a bank, the banker’s original letter acknowledging the loss is to be
forwarded to the Treasury in support of an application for authority to issue a duplicate cheque.

(6) No duplicate cheques are to be issued without the specific authority of the Accountant General except
as provided in TOM. G.16 for stale cheques.

H.20. STALE CHEQUES

(1) The list of cheques issued but not presented for payment to the Bank for six months or more after the
date of issue shall be reviewed at least twice per year. Where the addresses of payees are readily
available, notices shall be sent requesting them to send in the cheques for redating. On receipt, the
date of the cheques shall be amended to the current date and the amendment signed by the officer
authorized to sign the cheques. They are then to be returned to the payee with a request that they be
presented for payment promptly.

(2) Where the payee does not reply to the notice or where no notice has been sent out payment of the
original cheque shall be stopped by sending advice in writing to the bank and a duplicate cheque
issued and paid into the Treasury Account and credited to the Unclaimed Money Account. A receipt,
explaining the circumstances for non-payment and crediting the amount to Unclaimed Money Account
shall be attached to the original payment voucher.

(3) If at any time a claim is received for payment of any amount paid to the Unclaimed Money Account, a
new voucher is to be prepared and sent to the Treasury for payment. The receipt number and the date
of the payment to the Treasury Account shall be recorded on the voucher and the amount shall be
charged to the Unclaimed Money Account. The voucher must bear a certificate to the effect that the
amount has not been previously refunded

H.21. RECEIPTS FOR PAYMENTS

(1) Receipts are to be obtained for all payments of public money except that Treasury will not insist on
receipts being obtained for payments not exceeding $1.

(2) Where payment is made by receipt type cheque, the paid cheque is a sufficient receipt.

(3) If payment is made otherwise than by receipt type cheque, a written receipt in ink or indelible pencil is
to be obtained at the time payment is made or if the payee normally issues his own specially printed
receipt form, the receipt obtained should be on that form.

(4) If the payee is unable to write, the mark of the payee is to be witnessed and endorsed by a senior
officer other than the paying officer.
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(5) In any case of doubt as to the receipt to be obtained or the adequacy of a receipt, the Treasury is to be
consulted.

H.22. CERTIFYING OFFICERS – APPOINTMENT AND

RESPONSIBILITIES
(1) Every accounting officer, including a Head of a Department, authorized in writing by the Accountant
General to certify the expenditure of public moneys on behalf of the Government, subject to the
Accountant General’s directions in writing, is a “Certifying Officer” within the meaning of these
Instructions.

(2) Certifying Officers will be held responsible:

(a) That the vouchers they certify are properly completed in the correct form and that no erasure
has been made in the total amounts. Any alteration in the total amounts must be initialed by
the certifying officer.

(b) That the particulars of the claim are stated in such a manner as will enable the calculations to
be readily checked.

(c) That the vouchers are signed by the claimant where necessary, or are supported by invoices.

(d) That the blank spaces between the amounts in words are ruled through.

(e) That the correct charge appears on the voucher.

(f) That the expenditure has been properly authorized and that reference is made to the authority
for expenditure.

(g) That claims for refunds of disbursements made when travelling on official business, or on
appointment, are not excessive, and are supported where necessary by receipts.

(h) That the service has been rendered to the Government.

(i) That the price is reasonable or in accordance with contract.

(j) That the certificate on the voucher is completed.

(k) That all discount shown on orders or invoices are deducted, and that the voucher is submitted
to Treasury for payment in time to obtain any discount due.
(l) That where payment is made under power of attorney that the power of attorney has not been
revoked.

(m) That the vouchers are made out in the name of the claimant whose full address must be
supplied.

(n) That if duplicate invoices or orders or requisitions are attached, to certify that the claim has
not previously been paid.
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(3) Where a certifying officer has also been authorized to pass accounts for payment, he shall not act in
the dual capacity in respect of any one claim, unless specially authorized by the Accountant General to
do so.

(4) A certifying officer shall not certify his own claim if other certifying officers are available, if not, the
voucher is to be noted “No other certifying officer available.”

H.23. PAYING OFFICERS – APPOINTMENT AND

RESPONSIBILITIES
(1) Every accounting officer, including a Head of a Department, authorized in writing by the Accountant
General to pass vouchers for payment and sign cheques on behalf of the Government, subject to the
AccountantGeneral’s directions, is a “Paying Officer” within the meaning of this Operational Manual.

(2) The Accountant General will notify the Bank concerned of the appointment and supply the Bank with
specimen signatures of the appointee.

(3) The paying officer passing any account for payment is to initial the voucher in the space provided.

(4) The paying officer approving the payment is responsible:

(a) That the voucher has been properly certified.

(b) That the charging is correct. (Any alteration necessary is to be initialed by the Certifying
Officer).

(c) That the relative authority is quoted on the voucher or copies of relative orders are attached.

(d) That the claims are entered in the payment register.

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H.24. OVERSEAS IMPREST ACCOUNT

(1) Overseas Imprest Accounts are operated under Treasury control as a means of making payments in
overseas countries.

(2) When paid vouchers are received from the overseas imprestees, they may be referred to the
departments for charging. Departments are to insert the charge and certify the vouchers and return
them to Treasury within three (3) working days. The schedule forwarded and all vouchers are to be
returned intact.

(3) Vouchers which require certification by more than one department will be forwarded to departments
on a separate schedule. Priority is to be given to this schedule which is to be dealt with and forwarded
direct to the next department indicated on the covering route sheet within forty-eight (48) hours of
receipt.

(4) Freight vouchers are to be certified by the Accounts Division of Treasury. The relevant institution will
provide departments with details of amounts charged to departmental expenditure items for freight.

(5) If in any case a department considers it is unable to charge and certify a voucher the Treasury is to be
immediately advised and any instructions given by Treasury are to be followed in order to get the
voucher cleared promptly.

H.25. POSTAGE STAMPS

A Departmental Head may authorize the opening of a stamp register in his department. He may also fix the maximum
amount of the account, but it is not to exceed $10 without the specific approval of the Accountant General. The Senior
Accountant is to ensure that claims for replacement are submitted from time to time, so that a reasonable stock of
stamps is on hand at all times.
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PART I: ASSETS

I.1. DEFINITION OF ASSETS9

Assets are defined as economic resources with ≥ 1 year useful life and ≥ $1,000 in dollar value per item.
(1) If Asset is $1,000 and useful life is less than 1 year, it is still categorised as an asset,
(2) if asset is less than $1,000 but useful life is more than 1 year, it is also categorised as an asset subject to
meeting the following categories:

a) Computers, printers, scanners, photocopiers, cameras, external drives, laptops, PC viewers, furniture,

b) Any other assets not included above but has a useful life of 1 or more years is considered an asset based
on Treasury and Audit Office discretion
All assets are economic assets which are entities over which ownership rights are enforced by institutional units,
individually or collectively, and from which economic benefits may be derived by their owners by holding them or
using them over a period of time. Every economic asset provides benefits by functioning as a store of value. In
addition, some benefits are derived by using assets, such as buildings or machinery, in the production of goods and
services, and some benefits consist of property incomes, such as interest, dividends, and rents received by the owners
of financial assets, land, and certain other assets.

Governments use assets to produce goods and services. For example, office buildings, together with the services of
government employees, office equipment, and other goods and services, are used to produce collective or individual
services such as general administrative services. In addition governments often own assets whose services are
consumed directly by the general public and assets that need to be preserved because of their historic or cultural
importance. Thus when asset boundary is applied to the general government sector, it often incorporates a wider range
of assets as follows:

• General purpose assets – which are assets that other units would be likely to possess and use in similar
ways, such as schools, road-building equipment, fire engines, office buildings, furniture, and computers.

• Infrastructure assets – which are immovable non-financial assets that generally do not have alternative uses
and whose benefits accrue to the community at large. Examples are streets, highways, lighting systems,
bridges, communication networks, canals and dikes.
• Heritage assets – which are assets that a government intends to preserve indefinitely because they have
unique historic, cultural, educational, artistic, or architectural significance.

I.2. TYPES OF ASSETS

The two major types of assets are: Non-financial Assets and Financial Assets 10.

9 Reference GFS Manual 2001

10 Reference GFS Manual 2001
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I.2.1. Non-Financial Assets

Non-financial assets are all economic assets that do not represent claims on other units. They are stores of value and
provide benefit either through their use in the production of goods and services or in the form of property income.
Non-financial assets may be categorized as “Produced Assets‟ or “Non-Produced Assets‟.

I.2.1.1. Produced Assets are the assets that come into existence as outputs from a production process. Produced assets
are classified as “fixed assets‟, ”inventories‟ and ”valuables‟.
I.2.1.1.1. Fixed Assets are produced assets that are used repeatedly or continuously in processes of production for
more than a year. The distinguishing feature of a fixed asset is not that it is durable in some physical sense, but that it
may be used repeatedly or continuously in production over a long period of time. For example, coal used as fuel may
be highly durable physically but cannot be classified as fixed asset because it can be used only once.
Fixed Assets are further classified as “building and structures‟, “machinery and equipment‟, and ”other fixed assets‟.

(i) Building and structures - consist of “dwellings‟, ”non-residential buildings‟, and ”other structures‟:

(a) Dwellings – buildings that are used entirely or primarily as residences, including garages and other associated
structures. Houseboats, barges, mobile homes, and caravans that are used as principal residences are also
included.

(b) Non-residential buildings – are buildings other than dwellings. Buildings included in this category are office
buildings, schools, hospitals, buildings for public entertainment, warehouse, industrial buildings, commercial
buildings, hotels and restaurants.

(c) Other structures – consists of all structures other than buildings, including the following:

 Highways, streets, roads, bridges, tunnels, railways, subways and airfield runways;
• Sewers, waterways, harbours, dams, and other water-works;
• Shafts, tunnels, and other structures associated with mining subsoil assets;
• Communication lines, power lines, and pipelines;
• Outdoor sport and recreation facilities.

(ii) Machinery and equipment – consists of “transport equipment‟ and “other machinery and equipment‟.
Machinery and equipment forming an integral part of a building or other structure is included in the value of the
building or structure rather than in machinery and equipment.

(a) Transport equipment – consists of equipment for moving people and objects, including motor vehicles,
trailers, ships, railway locomotives and rolling stock, aircraft, motorcycles, and bicycles.
 | 103

(b) Other machinery and equipment – consists of all machinery and equipment other than transport equipment.
It includes general and special purpose machinery; office, accounting, and computing equipment; electrical
machinery; radio, television, and communication equipment; medical appliances; precision and optical
equipment; furniture; watches, and clocks; musical instruments; and sports goods. It also includes paintings,
sculptures, other works of art or antiques, and other collections of considerable value that are owed and
displayed by government museums and similar organizations for the purpose of producing non-market
services. (Items of this nature not intended for use in production would be classified as valuables).

(iii) Other fixed assets – consist of “cultivated assets‟ and “intangible fixed assets‟.

(a) Cultivated assets – consist of animals and plants that are used repeatedly or continuously for more than one
year to produce other goods or services.

The types of animals in this category include breeding stocks (including fish and poultry), dairy cattle, draft anima ls,
sheep or other animals used for wool production and animals used for transportation, racing or entertainment.

The types of plants in this category include trees, vines, and shrubs cultivated for fruits, nuts, sap, resin, bark, and leaf
products.

Animals and plants for one-time use, such as cattle raised for slaughter and trees grown for timber, are classified as
inventories rather than fixed assets.

(b) Intangible fixed assets – consist of mineral exploration; computer software; entertainment, library, and
artistic originals; and miscellaneous other intangible fixed assets. To qualify as a fixed asset, the item must be
intended for use in production for more than one year and its use must be restricted to the units that have
established ownership rights over it or to units licensed by the owner.
I.2.1.1.2. Inventories are goods and services held by producers for sale, use in production, or other use at a later date
and consist of “strategic stocks‟ and “other inventories‟

(a) Strategic stocks include goods held for strategic and emergency purposes, viz. goods held by market regulatory
organizations and commodities of special importance to the nation such as grain and petroleum.

(b) Other inventories consist of “materials and supplies‟, “work in progress‟, “finished goods‟, and ”goods for
resale‟.

(i) Materials and supplies consist of all goods held with the intention of using them as inputs to a production
process, including office supplies, fuels and foodstuffs.

(ii) Work in progress consist of goods and services that have been partially processed, fabricated, or assembled
by the producer but that are not usually sold, shipped. Or turned over to others without further processing and
whose production will be continued in a subsequent period by the same producer.
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(iii) Finished goods consist of goods that are the output of a production process and held by their producer and are
not expected to be processed further by the producer before being supplied to other units.

(iv) Goods for resale are goods acquired for the purpose of reselling or transferring to other units without being
further processed. Goods for resale may be transported, stored, graded, sorted, washed, or packaged by their
owner to present them for resale.
I.2.1.1.3. Valuables are produced goods of considerable value that are acquired and held primarily as stores of value
over time and are not used primarily for purposes of production or consumption. They are expected to appreciate, or
at least not to decline, in real value, and do not deteriorate over time under normal conditions.
Valuables consist of:
 Precious stones and metals such as diamonds, non-monetary gold, platinum, and silver that are not intended to
be used as intermediate inputs into processes of production;
 Paintings, sculptures, and other objects recognized as works of art or antiques;
 Jewellery of significant value.
Most items fitting the description of a valuable that are owned by general government units will be classified as “other
machinery and equipment‟ because they are used primarily in museums to produce services for the public rather than
held as stores of value.
I.2.1.2. Non-Produced Assets consist of ‘tangible naturally occurring assets‟, and
“intangible constructs of society‟.

I.2.1.2.1. Naturally occurring assets are tangible non-produced assets that include “land‟, “subsoil assets‟, and
“other naturally occurring assets‟ when ownership rights are enforced. If ownership rights have not or cannot be
enforced over naturally occurring entities, then they are not economic assets.
(i) Land is the ground itself, including the soil covering, associated surface water (including reservoirs, lakes, rivers
and other inland waters), and major improvements that cannot be physically separated from the land, but
excluding the following:
• Buildings and other structures constructed on the land or through it, such as roads, office buildings, and
tunnels;
• Cultivated vineyards, orchards, and other plantation of trees, animals and crops;
• Subsoil assets;
• Non-cultivated biological resources; and
• Water resources below the ground.
(ii) Subsoil assets are proven reserves of oil, natural gas, coal (including anthracite, bituminous, and brown coal),
metallic mineral reserves (including ferrous, nonferrous, and precious metal ores), and non-metallic mineral
reserves (including stone quarries, clay and sand pits, chemical and fertilizer mineral deposits, and deposits of salt,
quartz, gypsum, natural gem stones, asphalt, bitumen, and peat).
Mine shafts, wells, and other subsoil extraction facilities are fixed assets rather than subsoil assets.
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(iii) Other naturally occurring assets include “non-cultivated biological resources‟, “water resources‟ and the
“electromagnetic spectrum‟.

• Non-cultivated biological resources – are animal and plants that are subject to ownership rights but
whose natural growth and/or regeneration is not under the direct control, responsibility, and management
of any unit. For example, virgin forests and fisheries which are commercially exploitable.

• Water resources – are aquifers and other ground water resources that are sufficiently scarce to warrant
enforcement of ownership and/or use rights that are exploitable.

• Electromagnetic spectrum consists of the range of radio frequencies used in the transmission of sound,
data, and television.

I.2.1.2.2. Constructs of society are intangible non-produced assets that are evidenced by legal or accounting
actions and include patents, leases and other contracts, and purchased goodwill.

 Patents provide protection, by law or by judicial decision, for inventions;

 Leases and other contracts include leases of land, buildings, and other structures; concessions or exclusive
rights to exploit mineral deposits or the electromagnetic spectrum; contracts with athletes and authors; and
options to buy tangible assets not yet produced;

 Purchased goodwill is the difference between the value paid for an enterprise as a going concern and the sum
of its assets less the sum of its liabilities.
I.2.2. Financial Assets
Financial Assets consists of “financial claims‟, “monetary gold‟ and “Special Drawing Rights (SDRs)‟.

I.2.2.1. Financial Claims are assets that entitle one unit, the owner of the asset (i.e., the creditor), to receive one or
more payments from a second unit, according to the terms and conditions specified in a contract between the two
units. A financial claim is an asset because it provides benefits to the creditor by acting as a store of value. The creditor
may receive additional benefits in the form of interest or other property income payments and/or holding gains.
Typical types of financial claims are cash, deposits, loans, bonds, financial derivatives, and accounts receivable.

• Cash (currency) consists of the notes and coins in circulation which is commonly used to make payments.
Currency is issued either by the central bank or by the government units and are a liability of the units that
issue them.

• Deposits are financial assets that have fixed nominal values and are used to make payments. They are stores of
value and, depending on the type of deposit, may be direct medium of exchange and may earn interest or
entitle the deposit holder to specific services. Deposits can be sub-classified according to whether they
denominated in the domestic currency or foreign currency.
 | 106

• Loans are financial instruments that are created when a creditor lends funds directly to a debtor and receives a
non-negotiable document as evidence of the asset. This includes mortgage loans, instalment loans, hire-
purchase credit, loans to finance trade credit and advances, repurchase agreements, financial assets and
liabilities implicitly created by financial leases. Ordinary trade credit and similar accounts receivable/payable
are not loans.

• Financial derivatives are financial instruments that are linked to a specific financial instrument, indicator, or
commodity, and through which specific financial risks can be traded in financial markets in their own rights.
The value of a financial derivative is derived from the price of the underlying item: the reference price. There
are two broad classes of financial derivatives: “forward-type contracts‟ including swaps and “option
contracts‟.
Under a forward contract, the two parties agree to exchange a specified quantity of an underlying item, which may
be real or financial, at an agreed price on a specified date. Common forward-type contracts include interest rate swaps,
forward rate agreements, foreign exchange swaps, forward foreign exchange contracts, and cross-currency interest rate
swaps.

Option contracts give the purchaser an option to buy (a “call‟ option) or sell (a “put‟ option) a particular financial
instrument or commodity at a predetermined price within a given time span or on a given date.
Options are sold or “written‟ on many types of underlying bases such as equities, interest rates, foreign currencies,
commodities, and specified indexes. The buyer of the option pays a premium to the seller for the latter ’s commitment
to sell or purchase the specified amount of the underlying instrument or commodity on demand of the buyer.
Margins are payments of cash or collateral that cover actual or potential obligations under financial derivative
contracts. Repayable margins consist of cash or other collateral deposited to protect counterparty against default risk,
but which remain under the ownership of the unit that made the deposit. Repayable margins paid in cash are deposits
rather than financial derivatives. Repayable margins made in securities or other non-cash assets retain their character
as securities or other assets.

Accounts receivable consist of “trade credits and advances‟ and “miscellaneous other accounts receivable‟ due to be
received. All such assets should be valued at the amount the debtor is contractually obliged to pay the creditor to
extinguish the obligation.
Trade credits and advances include (1) trade credit extended directly to purchasers of goods and services, and (2)
advances for work that is in progress or to be undertaken. Trade credit does not include loans, securities other than
shares, or other liabilities that are issued to finance trade.
Miscellaneous other accounts receivable includes accrued but unpaid taxes, dividends, purchases and sales of
securities, rent, wages and salaries, social contributions, social benefits, and similar items.
I.2.2.2. Monetary gold is financial asset that provide economic benefits by serving as a store of value and can be
used as a means of payment to settle financial claims and finance other types of transactions.
Monetary gold consists of gold coins, ingots, and bars with a purity of at least 995/1000 that are:
• Owned by units that undertake monetary authority functions (normally central bank of the country); and
• A component of the nation’s official reserve assets.
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Monetary gold is a financial asset for which there is no corresponding liability on the part of another unit. Any gold
held by a government unit that does not satisfy the definition of monetary gold is treated as non-financial asset, either
a type of inventory or a valuable.

I.2.2.3. Special Drawing Rights (SDRs) are international reserve assets created by the IMF and allocated to its
members to supplement existing reserve assets. SDR represents an unconditional right to obtain foreign exchange or
other reserve assets from other IMF members. They can be sold, loaned, or used to settle financial obligations.

SDRs are to be held only by the monetary authorities (normally central bank). An SDR is a financial asset for which
there is no corresponding liability, and the members to whom they have been allocated do not have an unconditional
liability to repay their SDR allocations.

I.3. VALUATION OF ASSETS11

I.3.1. Valuation of Non-financial Assets
(i) Non-financial assets other than inventories are valued at their exchange price plus all transport and installation
charges and all costs incurred in the transfer of ownership, such as fees paid to lawyers and taxes payable on the
transfer.
(ii) Assets produced on own account are valued at their cost of production.

(iii) Sales and other disposals of existing non-financial assets are valued at their exchange value less any costs of
ownership transfer incurred by the disposing unit.

(iv) Additions to or withdrawal from inventories are valued at the price applicable at the time of the addition or
withdrawal. No costs for installation or ownership transfer are added or subtracted for transactions in
inventories.

(v) The value of a transaction expressed in foreign currency is converted to the domestic currency using the
midpoint of the buying and selling exchange rates at the time of transaction.

(vi) Acquisitions of valuables are valued at the prices paid plus any associated costs of ownership transfer incurred
by the general government units acquiring the assets. Disposals are valued at the sales price.
I.3.2. Valuation of Financial Assets
(i) The value of an acquisition or disposal of an existing financial asset is its exchange value. The value
of a newly created financial claim is generally the amount advanced by a creditor to a debtor.
(ii) All service charges, fees, commissions, and similar payments for services provided in carrying out
transactions and any taxes payable on transactions are excluded. They are expense transactions.
(iii) When a security is issued at a discount or premium relative to its contractual redemption value, the
transaction should be valued at the amount actually paid for the asset and not the redemption value.

11 As per GFS
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(iv) Financial assets denominated in purely monetary terms, such as cash and deposits, do not have
physical units with which prices can be associated. In such cases, the relevant quantity unit is
effectively a unit of the currency itself so that the price per unit is always unity.

(i) In the case of non-transferable financial assets, such as some loans, the monetary value is the amount of
principal outstanding.

(ii) In some cases the value of a financial asset is determined by the value of the counterpart to the transaction. For
example, the initial value of a loan resulting from a financial lease is the value of the non-financial asset
leased. The value of an accounts payable resulting from purchase of goods or services is the value of the goods
acquired or services received.

(iii) The value of a transaction expressed in foreign currency is converted to the domestic currency using the
midpoint of the buying and selling exchange rates at the time of transaction.

I.4. ASSET SYSTEM AND PROCEDURES

Procedure for procurement of an asset is same as described in Part K. However, for assets procured, the accountable
officer shall, in addition, enter the Asset information into the asset register or for the integrated Asset Module when
such module is in place in the accounting information system.
I.4.1. Ministry/Department Responsibility
Corporate Services Division in a Ministry/Department is responsible for:
• Receiving request from Output Manager to procure an asset;
• An asset must be an approved asset in the budget or negotiate with the Budget Division of the Ministry of
Economic, Finance and Development for any transfer of funds for any assets;
• Provide quotes for an asset (written quotes for asset>$5,000);
• Fill out the requisition form;
• Provide information to the Treasury for new suppliers related to their Ministries;
• Approve orders based on the Certification by the Output Manager;
• Receiving suppliers invoices and:
• Matching to assets received;
• Checking the accuracy of invoice calculations;
• Checking that invoices have not previously been paid.
• Correct coding of requisition/orders for posting to the ledgers;

• Enter Asset information and Book information for the Asset;

• Approve amendments to the order if prices or quantity changes;

• Approve cancellation of Purchase Orders, when required;

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• Timely processing of orders to Output Managers;

• Report – Outstanding assets commitments on:

o Requisitions;
o Purchase Orders;
o Delivery; and
o Enquiries.

I.4.2. Treasury Responsibilities

The Asset Section of the Accounts Division works closely with Procurement Division and Treasury and is responsible
for:
• Responding and resolving ministries/departmental and asset queries;

• Maintenance of the computerized asset system;

• Maintenance of the Selection types and user fields;

• Maintenance of the Account Codes associated with sub-output;

• Maintenance of the Authorization codes;

• Maintenance of location;

• Produce reports and analysis on the assets to the management.

I.4.3. Key Controls

I.4.3.1. General Controls
• An efficient and effective system of procurement of assets is established;

• Adequate segregation of duties within procurement and receiving of assets supplied;

• Adequate segregation of duties within the procurement system for approving of orders of assets, receiving of
assets and matching of an asset;

• Adequate management information is produced and used to manage the assets and commitment of expenses
to the ledgers.

I.4.3.2. Accounting and Processing Controls

• Updating of the Asset Register efficiently;

• Certification of assets received by properly authorized officer;

• Matching of invoice details of assets with received certification and purchase order;

• Regular and timely review of assets by Output Managers and Ministries accounting staff.
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I.4.3.3. Computerized System Controls

• Systematic/periodic data used in the asset system is regularly reviewed and approved by an authorized
officer;

• Access to asset processing functions and data is restricted to authorized personnel;

• Amendments to system data are properly authorized and are entered and processed completely and accurately
and only once.

I.5. CUSTODY OF STORES

Ministries/Departments shall observe instructions issued by the Accountant General for the custody of stores. Where
stores are held by ministries/departments, they shall be responsible for:
(a) Providing adequate facilities for:
• Prevention of losses by theft, deterioration through exposure to weather, loss or damage by fire or accident
through improper storage;
• Ease of handling;
• Proper identification and orderly layout;
• Keep the stores accommodation clean, tidy and free from rubbish.

(b) Paying special attention to the following:

• Stores of special value which can be easily stolen are kept locked in a compartment separate from ordinary
stores;
• Explosives, inflammable, and dangerous goods are stored adequately to reduce risk of fire or accident and
any Ordinances, Acts or Regulations relating to the storage of such goods are observed;
• Reasonable precautions are taken against the possibility of fire.

(c ) Ensuring authorized access and safety of keys:

• Keys to stores are held solely by authorized officers and access is permitted to authorized person only.

I.6. STOCKTAKING OF STORES

1. The Ministries/Departments shall undertake stocktaking of stores at least once a year. In addition to normal
stocktaking, the ministries/departments shall also arrange for random test check of stores.

2. All significant discrepancies disclosed on stocktaking or test checks shall be reported to the Head of the
Ministry and investigated for evidence of theft, malpractice, mismanagement or weakness in the system of
control.

3. On completion of stocktaking, a list of items found surplus or deficient shall be prepared for follow up action.
Deficiencies found shall be investigated and appropriate action taken to write-off or recovery from the
delinquent employee. Surplus stores may be added to the stock.

4. The result of the stock taking shall be reported to the Accountant General and copied to the Auditor General
for necessary consideration and action.
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I.7. WASTE AND DETERIORATION TO BE AVOIDED

1. It is the responsibility of all departmental employees to ensure that there is no loss to Government through
mismanagement, loss, waste, deterioration, misuse, or theft of departmental stores.

2. Instances of loss or possible loss of stores shall be brought to the attention of the Head of the Ministry who
shall take immediate investigational or remedial action appropriate to the circumstances.

3. Losses from overstocking are to be reported to the Accountant General.

4. All losses of stores other than those which come within the definition of normal and unavoidable losses
(except approved gratuitous issues) shall be reported through an irregularity report. When the Government is
deprived of the use of stores whether by disappearance, theft, breakage or in any other way, it would
tantamount to loss of store for the purpose of this operational Manual. If any officer is found to be
responsible for a stores loss, he may be surcharged with the amount of the loss.

I.8. INSURANCE AND TRANSPORTATION OF STORES

The bidding documents shall state precisely the types of insurance to be provided by the successful bidder and shall
indicate the kinds of risks insured against, the liabilities to be covered, and the duration and the amount of insurance.
In contracts for the supply of goods on CIP 12 or similar basis, cargo insurance and transportation are left to be arranged
by the supplier as part of the contract.

I.9.SURPLUS STORES
I.9.1. Definition of surplus stores
Surplus stores are those items of stores which are of no further use to a department, or which exceed the department ’s
reasonable future requirements, having regard to past issues, stock in hand, orders placed, known or likely demands to
essential reserve stocks and to those required to meet emergencies. The main types of surpluses are as follows:
a) Stores written off and condemned by the Board of Survey as no longer serviceable for departmental use, but
which still have some saleable value.
b) Stores recovered from buildings or equipment which have been dismantled or modified, and which although
still serviceable, are not required for departmental use.
c) Stores held on ledger charge but which are no longer suitable for departmental use because of redundancy,
obsolescence, deterioration etc.
d) Unused or otherwise serviceable stores held by a department but which are surplus to that department’s
normal requirements.

1.9.2. Disposal of surplus stores

Surplus stores can be disposed off either by inter-departmental transfer or by sale.
I.9.2.1. Inter-departmental transfers
Surplus stores transferred between departments shall be subject to the following financial adjustment:
a) Used stores: at depreciated book value.
b) Unused stores: at book value or ruling market price, whichever is lower. No on-cost is to be added.

12 Carriage and Insurance Paid

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c) Condemned stores, used office furniture, furnishings and equipment, used office mechanical equipment, used
motor vehicles, and stores not exceeding $10 in value for any one item. No financial recovery required.

I.9.2.2. Sale of surplus stores

As a general rule, sale of surplus stores shall be by Public Auction or tender or negotiated sales as approved by the
Financial Secretary.
I.9.2.3. Authority to approve sale of surplus stores:
Financial Secretary - For stores to be sold through public auction or tender or negotiated sales.

I.10.WRITE-OFF OF STORES
I.10.1. Reasons for loss of stores to be written off
The reasons for loss of stores can be either normal and unavoidable or abnormal and avoidable.

(i) Normal and unavoidable reasons for loss:

a) Normal wear and tear;
b) Accidental breakage or damage in the course of normal handling in store e.g. glassware, crockery, electric
lamps;
c) Shrinkage, leakage and evaporation where negligence has not contributed to such losses. In case of motor
spirit the allowable loss should not exceed 1% of turnover from the date of the last stock check;
d) Deterioration of stock while in store on account of ageing, atmospheric conditions or infestation Natural
causes e.g. livestock deaths;
e) Obsolescence;
f) Losses on realization of surplus stores.
(ii) Abnormal and avoidable reasons for loss:
a) Gratuitous issues;
b) Livestock losses caused by other than natural death;
c) Mal-administration e.g. overstocking;
d) When the total value of deficiencies exceed the total value of surpluses found in the same store account at a
complete stocktaking;
e) Stores lost by fire, flood, major accident or other disaster in excess of any insurance recovery;
f) Stores stolen or missing without due cause;
g) Miscellaneous losses which are not normal and unavoidable.

I.10.2. Reporting of loss of stores

The Accountable officer shall report promptly to the Accountant General, through his head of department, the value of
lost, deficient, condemned, unserviceable or obsolete stores. A copy of any irregularity report issued is to be attached
to the report to which it refers.
I.10.3. Value of stores to be adopted for write-off
The values to be adopted for stores to be written off shall be as follows:

a) Stores in stock are to be written off at book value.

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b) Motor-vehicles, mechanical plant and machinery, office machinery and other items which are recorded
individually on departmental charge are to be valued at cost less depreciation. Residual value must be shown
in cases where items have been fully depreciated to “Nil” value.

c) Non-consumable stores on issue to departmental staff and lost through fire, theft or accident etc., are to be
written off at replacement cost less 50%. When the employee is being personally charged with the loss, he
shall be responsible to pay the full original cost of the item in question.

I.10.4 Powers to write off13

The power to write off is with the legislature in accordance with section 45 of the Public Finance Act.

I.10.5. Reporting in the financial statements

All amounts approved for write-off by the legislature shall be reported in the financial statements.

PART J: PAYMENT OF SALARIES, WAGES, OVERTIME AND

ALLOWANCES

J.I. AUTHORITY
The salary structure for the Government employees is determined by Cabinet upon recommendation by the Public
Service Office.
The salaries and allowance of Members of the legislature are determined by the Salaries Tribunal established under the
Salaries and Allowances of Members of the Maneaba ni Maungatabu and Salaries Tribunal Act.

J.2. PROCESSING OF PAY ENTITLEMENTS

1. Treasury is responsible for the processing of all salaries and wages, pay related entitlements and deductions
for government employees, contract officers, court assessors, ministerial personnel and committee members.

2. Salary/wage entitlements include basic salaries and wages, overtime, allowances, penalties, leave without
pay, termination and end of contract entitlements, reimbursement of expenses, recoveries of salary advances
and debts to government, employer contribution to superannuation, employees’ compensation and employer
contributions.

3. Deductions include statutory taxation, employee superannuation contributions, parliamentary pension

scheme, debt recoveries and other approved deductions.

4. The Payroll Section of the Treasury is responsible for:

• Processing of pay entitlements and deductions for all salaries and wages except casual laborers
wages, mayors and embers of state councils14;

13 Section 45 of the Public Finance (Control and Audit) Act

14 The casual labors wages are paid in every two weeks and they are prepared by the line ministries on payment vouchers that is
forwarded to the Treasury Payment Section for processing of payment. The salaries for mayors and members of the state councils
at Tarawa are prepared by the Ministry of Internal Affairs on payment voucher and forwarded to the Treasury’s Payment Section
for processing of payment. However, the salaries of the mayors and members of the state councils at the outer islands are paid for
by the Treasurers from the fund transferred by the Ministry of Internal Affairs through the Departmental Warrant. Treasurers
include these expenditures on their monthly return submitted to Treasury accounting for payments incurred and receipts collected
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• Processing of the costing of gross pays and government recoveries into the relevant General Ledger
and Cost Ledger Accounts;
• Maintenance of payment, deduction and costing records;
• Responding and resolving payroll queries; and
• Maintenance of the computerised payroll systems

J.3. PAYROLL SYSTEM

The Payroll System is made up of the computerized payroll system processes. The system commences from the point
when an action requires a payroll transaction that affects an employee's pay entitlements, deductions, disbursement
methods and/or costing, through to the completion of the processing of that transaction

J.4. MAINTENANCE OF THE COMPUTERISED PAYROLL SYSTEM

1. The Payroll Section uses the Payroll System in the Attache accounting system. The Payroll System links to
the General ledger and sub ledgers. Within the computerised system, all payrolls are run at the same time for
processing entitlements for salary employees, contract officers, project officers and Members of Parliament

2. Treasury must ensure that the parameters of the payroll system are maintained up-to-date to ensure that pays are
correctly processed and that the payroll system functions effectively.

J.4.1. Payroll Processing Controls

1. Certification of all payroll authorities by properly authorized officers.
2. Approval of all payroll transactions for processing/payment.
3. Payroll transactions are prepared and processed only on the basis of approved payroll authorities.
4. Payroll transactions are entered and processed completely, accurately and only once.
5. Prompt and timely processing and payment of pay entitlements and deductions.
6. Reconciliation of payments before disbursement of each pay.
7. Payroll payments are made to the proper employee or other recipient.
8. Acquittal of cash/cheque payments and prompt investigation of unclaimed pays.

J.4.2. Accounting Controls

1. Payroll transactions are processed promptly and in the proper accounting period.
2. Reconciliation of the payroll of each pay period.
3. Regular reconciliation and clearance of all payroll control accounts (Payroll Clearing, Taxation, Group
Deduction, Payroll Error Suspense, Withheld and Unclaimed Pays).
4. Regular and timely review of payroll costs and recoveries by Output Managers and Departmental accounting
staff.

J.4.3. Computerized System Controls

1. Systematic/periodic data used in the payroll system is regularly reviewed and approved by an authorized
officer.
2. Access to payroll processing functions and data is restricted to authorized personnel.
3. Amendments to rates of pay, deductions and other system data are properly authorized and are entered and
processed completely and accurately and only once.

during each month.

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J.5. SALARIES PAYROLL SYSTEM AND PROCEDURES

J.5.1. Guidelines
1. Payments of salary and related entitlements to permanent employees, contract and project officers are
processed in the computerized payroll system.

2. The Salaries Payroll operates on a fortnightly pay period, from Monday to Sunday. Treasury will issue, by
Treasury Circular, a payroll calendar at the beginning of each financial year setting out the:
• Number of each pay period;
• Start and end dates of each pay priod;
• Cut-off dates for departmental input; and
• Pay dates.
• Variations to the payroll calendar will be advised by Treasury Circular.

3. All salaries, allowances and most employment related reimbursements will be processed through the payroll
system. Allowances such as travelling allowances and reimbursement of expenses will be processed through
the payroll and paid directly to employees with their salary. These allowances and reimbursements will be
identified separately on payslips and in the payroll records.

4. Payroll authorities along with timesheets for overtime, allowances and leave entitlements, when required,
must be submitted to Treasury in a timely manner to enable employees to promptly receive their entitlements
and to minimize overpayments and errors in payments.

5. Approval of payroll authorities must be in accordance with relevant legislative provisions and delegations.

6. Separate manual payments of pay entitlements will not be made because of delays in the submission of the
relevant pay authorities to Treasury. Payments will be made to employees in the normal fortnightly pay
period through the computerized payroll system. This includes the first pay for newly engaged employees or
employees resuming duty and termination payments.

J.5.2. Ministerial/Departmental Responsibilities

Ministries/Departments are responsible for:
• Ensuring that the engagement of employees are properly approved in accordance with the Public Service
Commission and Condition of Services or delegations;
• Sufficient funds are available for the payment of employees' pay entitlements;
• Proper records of attendance, leave and overtime are maintained;
• Payroll authorities are checked and certified for payment by a properly delegated officer;
• Timesheets for overtime, allowances and leave are posted in a timely manner;
• Payroll information and authorities are submitted in a timely manner;
• Distribution and acquittal of cash pays, and distribution of payslips;
• Monitoring the costing of pays to Outputs and advising Treasury of corrections required;
• Reconcile the payroll on a fortnightly basis to ensure accuracy of payments processed by the Treasury.

J.5.3. Payroll Procedure for New Appointments, Promotions and Transfers

J.5.3.1. Guidelines
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New Appointments and Promotions

The Salary to a newly appointed employee is prepared by a responsible Ministry. The first pay to newly appointed
employees will cover the period from the date of appointment to the most recent pay period ended; thereafter the
employee's salary will be incorporated in the main fortnightly run. Prompt receipt by Treasury of approved form for
newly appointed employees (B.315 which is in light blue color) and promotions (pink color) is essential to enable
prompt payment of employees’ salary.

Employee Transferred

If an employee is transferred on loan to another department for a period of less than one month, no financial
adjustment is to be made between departments. In the case of longer periods, or where an employee is transferred
permanently refer to TOM .J.1

J.5.3.2. Action in Ministries/Departments

After all necessary approvals are obtained for the appointment, promotion, transfer, salary and/or allowance
adjustment in respect of a person in government employment in a salaried position then proceed with these processes.
1. Check the following:
• All relevant approvals have been obtained;
• The transaction is in accordance with the approved budget and sufficient funds exist within the relevant
Output to pay the person for the remainder of the financial year;
• Bank Account details have been provided for the payment of the person's net pay;
• Additional Bank Account details, wherever additional banking has been opted, have been provided;
• All other required information has been supplied.

2. Approve the transaction for processing and payment.

• The approval must be by a properly delegated officer.
3. Input the employees Personnel data in the Payroll System for validation of data of an employee.
4. Forward the approval, together with supporting documents to the Public Service Commission in case of
contract officers.
5. A Bank Account Nomination Form must be forwarded with the approval for new appointments.
6. For additional banking options, the relevant approval must be forwarded.

J.5.3.3. Action in Public Service Commission

(1) Check and if satisfied, approve the new contract officer.
(2) Forward to Treasury for further processing.

J.5.3.4. Action in the Administration Division, Ministry of Finance

(1) Register the letter and file a copy in the relevant employee PF.
(2) Forward the letter to the Payroll Section.

J.5.3.5. Action in Treasury Payroll Section

15 B.3 refers to Appendix B.3 from in the NCS (National Conditions of Service), page 23.
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(1) Receive the new appointment or promotion or transfer and Date stamp it as received.

(2) Check the new appointment or promotion or transfer for:

 Completeness;
 Whether the Output nominated is valid as per the Ledger and is set up within the payroll system;
 Whether the approval has been granted by an appropriately delegated officer.
(2) Check the employee information in the payroll system is up-to-date.
(3) Check that funding is available within the nominated Output for payment to the person and that the Output is
correct.
(4) Resolve any budget and funding queries with Government Ministries.
(3) Resolve further queries, if any.
(4) Code the new appointment or promotion or transfer for input entry and initial /date
as checked.

(5) Determine the Pay Transactions required for input to enable the employee to receive
the correct payment for the current pay and, if applicable, any retrospective period.
(6) Record and code the new employment or promotion or transfer and initial /date as
Prepared.

(7) Review new employment or promotion or transfer including the coding and batch forms, if satisfied,
initial/date as Approved for input for payroll processing.

J.5.4. Payroll Procedure in case of Resumptions and Suspensions

J.5.4.1. Action in Ministries/Departments

(1) The Ministries/Departments shall prepare a written request in the specified form in case of suspensions and
submit it promptly to the Public Service Commission and the Treasury to ensure that there is timely processing
of suspension of pay and allowances to minimize overpayments. Advising Treasury can also be in a form of
telephone, emails or note on the system to avoid overpayments.
(2) The on-going pays of regular (salary) and contract employees will be suspended on receipt of the written
advice of departments. Suspension of pays may be required in cases of:
• Absence of the employee from work;
• Sudden resignation or retirement of an employee;
• Dismissal of an employee;
• Charging of an employee with a criminal offence
• An employee taking leave without pay for greater than 1 pay period.
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J.5.4.2. Action in the Administration Division, Ministry of Finance

(1) Register the suspension letter and file a copy in the relevant employee PF; and

(2) Forward the letter to the Treasury Payroll Section.

J.5.4.3. Action in Treasury Payroll Section

(1) Date stamp the suspension letter as received;
(2) Code the suspension form to suspend the employee's pay (change to Timesheet Entry) and, if necessary take
action to withhold the employee’s current pay;

(3) Review the batch forms and relevant form for suspension including the coding and, if satisfied, initial/date as
Approved for input for payroll processing.

J.5.5. Resignations
(1) Provided reasonable notice of resignation has been given, an employee who resigns should receive his final
salary payment on the last day of duty.
(2) The notice of resignation is to be forwarded to the Public Service Commission (In case of non Public Service
Commission employees, the notice of resignation shall be forwarded to the respective authorised Officer)
together with the relevant form for resignation, as soon as it is received, so that the final salary payment may
be prepared before the employee’s last day of duty, and in order to avert a possible salary overpayment to the
employee.
(3) When the Public Service Commission or respective authorised Officer has returned the relevant form for
suspension with instructions regarding final payment endorsed, a separate salary voucher for the employee’s
final pay will be prepared in the normal manner (should the payee be leaving shortly for an overseas
destination, a note to that effect should be sent to the Treasury advising that a suspension form has been
forwarded and stating the date when the payment must be made).
(4) When an employee (or the employee’s department) has not given sufficient notice of resignation, or in the
case of sudden termination or dismissal, and it has not been possible to remove the employee ’s name from the
fortnightly payroll abstract, the employee’s full fortnightly pay which has been passed must be re-banked,
wherever possible, and a fresh voucher drawn for any lesser period due – or immediate action must be
undertaken to recover any resulting overpayment.
(5) The suspension form advising the resignation or dismissal of an employee must include a reference to any
case of leave without pay which has been taken between the last leave return prepared and submitted to
Treasury and the date of resignation. A check must be made of the leave position when final suspension form
is prepared. If any leave without pay is taken after dispatch of a suspension form, the Treasury Senior
Accountant for Payroll Section shall be advised immediately.
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J.5.6. Cessations of Employment due to Disability

The Workmen’s Compensation (Amendment) Act 1994 provides for a cash grant of up to 48 months salary or
$25,00016, whichever is lower, to an employee who ceases employment due to an employee becoming disabled from
an accident or an illness arising in the course of their employment. In addition , employees who fit this category are
also entitled to receive a cash payment in lieu of any untaken annual leave they may have. A letter from the Medical
Board advising the condition of the employee will be required to support the cessation of employment due to
disability.

Cash grant on cessation of employment due to disability

Subject to operational requirements set out in the determinations, the Secretary may approve a cash payment of up to
48 months’salary/ wages or $25,000, whichever is lower, to an employee who is unable to continue employment
because of a disability resulting from an accident, or an illness arising in the course of the employee ’s employment.
The lowest compensation amount is $5,000.

J.5.7. Cessation of Employment due to Resignation

When an employee resigns from the service he is entitled only to the payment of his untaken annual leave. The
annual leave entitlement is provided only for permanent and contract employee. In the case of permanent employee
he can resign by giving two months’ notice to the Public Service Commission or by paying one month’s salary
instead. However, the contract employee is required to give one month’s notice in writing or by paying one half
month’s salary in lieu. The policy for prior notice for resignation can be waved under exceptional circumstance as
approved by Cabinet.
Untaken Annual Leave

1. The Secretary shall grant any untaken annual leave and proportionate annual leave to any employee who
resigns from the service, or in lieu of taking such leave, authorise the payment of any untaken leave in
accordance with the National Condition of Services (NCS) policies for annual leave. The annual leave
provided for employee in according to his salary level at the rates set out below under NCS, Section F.1 (a):
Table 5: National Condition of Services

Salary Level Working Days

L 19-17 14
L 16-15 18
L 14-12 22
L 11-10 26
L 9-1 30
2. However, any employee who is dismissed or leave the service without giving notice will forfeit any annual
leave not taken under section F.16 of the NCS.

J.5.8. Procedure on the Death of an Employee

(1) The Public Service Commission (or the respective authorised Officers for non Public Service Commission
employees) is to be notified promptly in writing.

(2) Amounts in the course of payment, but unpaid on the date of death must be re-banked immediately.

16 The monetary compensation provided in the Workmen’s Compensation (Amendment) Act 1994 ranges from $2,500 to $25,000.
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(3) The Accountant General may authorize payment to any beneficiary or to an estate in accordance with section
F.14 of the NCS.

(4) No payment may be made (except to the Kiribati Public Trustee) until a proper claim has been put forward by
the estate of beneficiary.

J.5.8.1 Cash grant on death of employee or former employee

The family of the employee who dies is entitled to receive the same benefit that the employee would have
received had he resigned. The benefit would be the untaken annual leave.

(a) Cash payment in lieu of Untaken Annual Leave on Death

The Secretary may approve a cash payment to the deceased employee’s spouse and/or dependants a sum
equivalent to the untaken leave entitlements that due to the deceased at the date of his death in accordance
to section F.14 of the NCS; and

(b) Any employee whose death is directly a result of misconduct as defined under NCS shall not be entitled to
payment in lieu of any of benefit in this determination.

J.5.9.. Payroll Procedure in case of Terminations

J.5.9.1. Action in Ministries/Departments
(1) Payroll Authorities must be prepared, approved and submitted promptly to Treasury to ensure that there is
timely processing of terminations and overpayments are minimized.

• Payroll authorities for the payment of termination benefits to contract officers engaged under the NCS
must be approved by the Public Service Commission.

• For termination entitlements, separate manual payments outside the normal computerized payroll
system will not be made because of delays in forwarding the relevant approved forms and documents
to Treasury.

(2) Complete Termination Advice with details of the termination and any entitlements that are due and payable to
the employee.
(3) Forward Termination Advice to the Public Service Commission together with supporting documents after it is
approved by a properly delegated officer.

J.5.9.2. Action in Public Service Commission (for Public Service contract officers only)
(1) Check and if satisfied, approve the Termination Advice.
(2) Forward approved Termination Advice to Treasury.
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J.5.9.3. Action in Administration Division, Ministry of Finance

(1) Register the Termination Advice received from Public Service Commission;
(2) file a copy of the Termination Advice in the PF of the officer concerned; and
(3) forward the Termination Advice to the Treasury Payroll Section.

J.5.ACTION IN TREASURY PAYROLL SECTION

(1). Date stamp the Termination Advice as received.
(2). Check the Termination Advice for:
a Completeness;
b Valid Output for any termination payments;
c Funds availability; and
d Approval by appropriately delegated officers.
(3) Resolve any queries.
(4) Determine the Termination Pay Transactions (if any) and record on the Termination Advice:
• Normal and Overtime Hours;
• Each Allowance (if no allowance is to be paid, enter a Temp Allow of 0.00);
• Each Deduction (if no deduction is to be made, enter a Temp Ded of 0.00);
• Each Leave Entitlement - Pay Category, Tax Periods, Hours
• (Tax Periods must be entered to have the payments taxed over more than one pay period. Tax Periods
must be entered as number of weeks.);
• If the Output to be charged for termination payments is different from the employee's usual Output,
then the Account Number and Activity must be entered for each transaction;
• Recoveries for any outstanding debts or overpayments.
(5) Code the Termination Advice for input entry and initial /date as Checked or Prepared.
(6) Approved for input for payroll processing.

J.6. MAYORS PAYROLL SYSTEM AND PROCEDURES

J.6.1. Guidelines
(1) Entitlements, deductions and net pays for mayors are processed through payment voucher which is recorded in
the Treasury Access information system which runs in parallel to the Treasury Payroll System.

(2) Payments to the mayors are paid on a fortnightly basis. Each mayor is established in a separate payroll system
in the Treasury Access and Attache information system that pay through payment voucher . Payroll payment
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vouchers are prepared by the Ministry of Internal Affairs for each fortnightly pay period based on the
information held in its system.

(3) Net pays are processed and paid through the Bank Account recorded in the Treasury Access system.
(4) The Treasury payment system maintains a complete record of all payments made to the mayors through
Access information system and charged to the general ledgers in the Attache information system.

J.6.2. Ministry of Internal Affairs Responsibilities

(1) The Ministry is responsible for:
• Sending payment vouchers of mayors’ salaries for fortnightly pay;
• Ensuring that mayors payment vouchers include all entitlements;
• ensuring sufficient funds are available to fund the payment of entitlements;
• checking and approving all payroll authorities;
• ensuring all relevant payroll information is submitted with the payment vouchers in a timely manner;
• promptly disbursing and acquitting the cash pays, if any;
• checking the accuracy of costs charged to the vote ledger.

(2) Payment vouchers must be forwarded to Treasury by close of business three days before the end of each pay
period.

J.6.3. Treasury Recurrent Unit Responsibilities

(1) Treasury Recurrent Unit is responsible for:
• checking the information supplied in the mayors’ payment vouchers is complete and approved for
payment by a properly delegated certifying officer;
• ensuring that entitlements are correctly processed by the Access payment system;
• processing the payroll each pay period in accordance with the published calendar of pay cycle
periods/pay days;
• ensuring all payments are properly recorded in the ledgers;
• maintaining proper system for payroll records and records of disbursements;
• making the cash and cheques payments and the payroll listings and reports promptly available;
• ensuring all cash pays are acquitted or unclaimed pays are properly accounted for.

(2) Treasury recurrent Unit is responsible for properly maintaining the computerised payroll system for the
mayors (e.g. correct entitlements) and for ensuring there is proper segregation of duties in the processing of
the payroll.

J.6.4. Commencements, Terminations and Pay Variations

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J.6.4.1. Action by Ministry of Internal Affairs

(1) In case of a new appointment, allocate a payroll number to the mayor.
(2) Complete a Mayor Payment Advice for commencements or variations to existing details, terminations or
payment variations ensuring the following details are provided:
 Full Name and Constituency;
 Effective Date of Commencement or Termination or Pay Variation;
 Location;
 Output; and
 Reason – specify the payroll action required.
(3) Certify the Mayor Payment Advice and forward to Treasury.

J.6.4.2. Action by Treasury Recurrent Unit

(1) Receive Mayor Payment Advice and check for validity and completeness.
(2) Determine the Mayor Payment Advice is entered into the payroll and record in the Access payroll system:
 Commencements – add the new Mayor to the the designated payroll system in Access program;
 Terminations – enter the termination date and reason code; and
 Variations to Pay – for suspension to record when the suspension becomes effective.
(3) Initial and date the Mayor Payment Advice as Checked.
(4) Review the Mayor Payment Advice and coding for completeness and accuracy.
(5) When satisfied, sign and date the Mayor Payment Advice as Approved for input into the computerized record.
(6) Access the updated and accurate record in the Access information system to check against payments from any
future payment voucher to a mayor.

J.7. MEMBERS OF PARLIAMENT PAYROLL SYSTEM

J.7.1. Guidelines
(1) Entitlements, deductions and net pays for Members of Parliament are processed through the Salaries Payroll
System maintained by the Treasury Payroll Section.

(2) Payments to Members of Parliament are paid on a standard fortnightly pay cycle. Each Member of Parliament
is established in the system with on-going pay entitlements and deductions. Pays are generated automatically
each fortnightly pay period based on the standard information held in the system and any variations advised by
the Legislative Department through the “Payroll Adjustment Form”. The payroll system calculates the Gross
Pays, Parliamentary Pension Scheme Contributions, Tax, other Deductions and Net Pays. The payroll system
charges the gross pay costs to the nominated Statutory Expenditure Accounts in the Ledgers.

(3) Net pays are deposited into the nominated bank accounts of Members of Parliament and deductions are
disbursed to the relevant deduction agencies by Treasury.
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(4) The Payroll System maintains a complete record of all payments and deductions made through the payroll
system.

J.7.2. Legislative Department Responsibilities

(1) The Legislative Department is responsible for:
• advising Treasury of the Members of Parliament and their entitlements, and deductions;
• advising Treasury of any variations to entitlements and deductions through the “Payroll Adjustment
Form”;
• ensuring sufficient funds are available to fund the payment of entitlements;
• checking and approving all payroll authorities;
• ensuring all relevant payroll information is submitted in a timely manner.
The Legislative Department must ensure proper systems and procedures exist to properly maintain Members of
Parliament personnel records and to ensure that all payment authorities are approved by an appropriately delegated
officer.

(2) Payment Authorities advising of entitlements and deductions or variations to these must be forwarded to
Treasury in a timely manner to enable correct entitlements and deductions to be processed.
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J.7.3. Treasury Responsibilities

(1) Treasury is responsible for:
• checking that the payment information supplied is complete and approved for payment by a properly
delegated certifying officer;
• ensuring that entitlements, deductions, tax, parliamentary pension scheme contributions are correctly
processed by the payroll system;
• processing the payroll each fortnight in accordance with the published calendar of pay cycle
periods/pay days;
• ensuring all payments are properly recorded in the ledgers as statutory expenditure; and
• maintaining proper system payroll records and records of disbursements.

(2) Treasury must promptly disburse the pays and ensure that the payroll listings and reports are promptly
available to the Legislative Department.

(3) Treasury is responsible for ensuring that the computerised payroll system is properly maintained for Members
of Parliament (e.g. correct entitlements and allowances) and for ensuring there is proper segregation of duties
in the processing of the payroll.

J.7.4. Commencements, Variations to Member Details

J.7.4.1. Action by Legislative Department
(1) For a new commencement, allocate a payroll ID number to the Member of Parliament.
(2) Complete a Member of Parliament “Payroll Adjustment Form” (PAF) ensuring the following details are
provided and explanation of variations:

 Member ID Number;
 Full Name;
 PPS (Parliament Pension Scheme) Number;
 Position;
 Effective Date of Commencement;
 Annual Salary and Allowances including tax status of each allowance;
 Statutory Expenditure Account Number and Activity; and
 Deductions

(3) For variation to pay entitlements, deduction and termination, complete a Member of Parliament PAF with the
relevant details of the pay variation(s) or for terminations, the date, reason and entitlements.
(4) Certify the Members of Parliament PAF.
(5) Forward to Treasury.
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(6)

J.7.4.2. Action by Administration Division, Ministry of Finance

(1) Register the Member of Parliament PAF.
(2) File a copy of the Member of Parliament PAF in the PF of the relevant Member of Parliament;
(3) Forward the Member of Parliament PAF to Treasury Payroll Section.

J.7.4.3. Action by Treasury Payroll Section

(1) Receive and date stamp the Member of Parliament PAF and check for validity and completeness.
(2) Determine the payroll transactions and code the information to be entered to the payroll, and initial and date
the Member of Parliament PAF as Checked.
(3) Review the PAF and coding for completeness and accuracy.
(4) When satisfied, sign and date the PAF as Approved for input.
(5) For commencements, add the PAF to Payroll or enter the variations to the Member’s details.
(6) Initial and date the PAF as Input for payroll processing.

J.8. CASUAL AND LABOR WAGES SYSTEM AND PROCEDURES

J.8.1. Guidelines
(1) Payments to employees such as casual and daily paid labors who receive wages are processed through a
separate Wages Payroll System maintained in the Access Payroll system of the Treasury Recurrent Unit which
runs in parallel to the Treasury Payroll System maintained by the Treasury Payroll Section .

(2) The Wages Payroll operates on a fortnightly pay period. Treasury will issue by Treasury Circular, a payroll
calendar at the beginning of each financial year setting out the:
• Number of each pay period;
• Start and end dates of each pay period;
• Cut-off dates for departmental input; and
• Pay dates.
• Variations to the payroll calendar will be advised by Treasury Circular.
(3) All wages, allowances and most employment related reimbursements will be processed through
payment vouchers prepared by the Secretary of the Ministry concerned and submit to the Treasury Recurrent
Unit for processing of the fortnightly pay. Allowances for such items as travelling and reimbursement of
expenses will be processed in a separate payment voucher to pay to the casual workers concerned .
(4) The Ministries’ Secretaries must submit the payment vouchers for wages to Treasury in a timely manner to
enable employees to promptly receive their entitlements and to minimize errors in payments.

(5) Payment vouchers for wages, overtime allowances and reimbursements must include the relevant supporting
documents such as summary timesheets for checking and recording in processing of the payment .
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(6) Late submission of the payment vouchers for wages will be deferred to be paid to employees in the next
normal fortnightly pay period unless approved by the Accountable General for immediate payment due to
exceptional circumstances.

J.8.2. Ministerial/Departmental Responsibilities

(1). Ministries/Departments are responsible for:

 the engagement of casuals employees;

 ensuring sufficient funds are available to fund their engagements;
 proper records of times worked, including overtime are maintained;
 timesheet information, including allowances, is properly checked and attached to the wages payment
voucher;
 ensuring all relevant payroll information is recorded in a timely manner;
 preparation of the payment vouchers for wages to submit to Treasury Recurrent Unit on time;
 distribution and acquittal of cash pays; and
 checking that the casuals wages costs have been charged to the correct outputs.

(2). The engagement of casual labors must be approved by delegated officers in accordance with the Public Service
Commission policy.
(3). Ministries and Departments must ensure proper systems and procedures exist for accurate recording of casual
employees’ times on a daily basis (start and finish times, breaks), and supervisors certify that the times recorded are
correct. Supervisors must certify that:

 times recorded are correct and actually worked by employees; and

 the employees were gainfully employed on government duties.

(3). Ministries and Departments must prepare a Casual Wages Summary Timesheet Form from the daily timesheet
records at the end of each pay period. This Summary Timesheet form must show for each employee who has worked
during the fortnight:
• the total daily hours;
• the total fortnightly hours;
• breakdown of the total fortnightly hours into normal hours (ordinary), extra hours and overtime hours;
and allowances.
(4). The Casual Wages Summary Timesheet Form must be certified for payment by a departmental officer in
accordance with the TOM and attached to the payment voucher to be forwarded to the Treasury Recurrent Unit on the
prescribed date.

(5). Ministries and Departments must maintain proper supporting records for all casual employees engagements and
payments (this includes engagement approvals, daily timesheets, overtime records and approvals).

J.8.3. Treasury's Responsibilities

(1). Process all casual employees' payments through the payment voucher received from ministries and recorded in the
Access wages payment system. Payments include:
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 Normal hours;
 Overtime Hours; and
 Allowances (e.g. night-watchman, travel etc).
(2). Treasury is responsible for:

 checking that information supplied for new engagements or variations to engagements and pay rates
is complete and approved by an authorised officer;
 checking the payment information supplied by Departments is complete, reasonable and approved for
payment by a properly delegated certifying officer;
 ensuring that the terms and conditions of employment and payment are properly applied (e.g. correct
calculation of normal and overtime hours, correct entitlement to allowances);
 checking that the calculations of total normal and overtime hours and allowances are correct as per
the information on the timesheet forms;
 ensuring the casual employees’ pays each fortnight are processed in accordance with the published
calendar of pay periods/pay days;
 checking that all payments are properly recorded in the ledgers by Output; and
 ensuring proper system payroll records and records of disbursements are maintained.

(3).Promptly disburse the pays and ensure that the payroll listings and reports (including cash pay cheques) are made
available to ministries.
(4).Maintaining the computerized payroll system for casual employees (e.g. correct rate of pay) and for ensuring there
is proper segregation of duties in the processing and disbursement of the casua employees payroll.

J.8.4. Payroll Procedure

J.8.4.1. Updating casual employees record in Wages System
(1).Ministries and Departments shall on engagement of a casual employee allocate an employee number to the
employee by referring to Casual Employee Numbers List issued by Treasury and complete a Casual Wage form
ensuring the following details are provided:

 Employee Number;
 Full Name;
 NPF Number or exemption;
 Position;
 Daily wage rate to be paid;
 Allowances and deductions; and
 Account/Activity.

(2). Casual Wage Payroll form shall also be prepared by the Ministries and Departments if there is any change in
existing employee‟s details, position, wage classification/level or Output.
(3). The Casual Wage Payroll Form shall be approved by an authorised person in the ministries/departments and
forwarded to Treasury with a copy of any relevant approvals and supporting documents.
(4). The Casual Wage Payroll Form shall be received and checked for completeness and relevant approvals in the
Recurrent Unit of the Treasury. If found in order, it shall be coded for entry as input to the wages payroll. However,
addition or amendment to the Casual Wage Employee Payroll (Payroll – Hourly) shall be made only after it is checked
and approved by the Senior responsible officer.
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J.8.4.2. Processing of Fortnightly Pays

J.8.4.2.1. Action in Ministries and Departments
(1).Receive the completed daily time records (timesheets/roster sheets/clock cards) for casual employees attached to
the payment voucher.
(2).Check the daily time records for the following:
 Completeness (e.g. full name of employee, daily start and finish times);
 Reasonableness of hours worked (e.g. not greater than 24 hours/day, appropriate hours for nature of work
performed);
 Approvals for overtime worked; and
 Certification by supervisor that the employees have worked the hours recorded on valid government
duties.

(3). For each casual employee, determine the following for each day worked:
 Total hours;
 Normal hours;
 Extra Ordinary Hours; and
 Overtime hours:
 time and half
 double time

(4).Determine any allowances payable;

(5). Record the hours and allowances for each employee on a Casual Wages Summary Timesheet Form;
(6). Check against the daily time records for completeness and accuracy and sign/date as Prepared;
(7). Certify the Casual Wages Summary Timesheet Form. Certification must be by appropriate departmental
approving officer(s);
(8).Batch the payment voucher with the supporting documents and recorded in its information system;
(9).Initial and date the payment voucher;
(10). File the daily time records and a copy of the payment voucher for future reference; and
(11).Forward the payment vouchers with supporting documents to Treasury for processing of pay;
J.8.4.2.2. Action in Treasury Recurrent Unit
(1).Check the payment voucher with supporting documents such as the timesheets entries; and
(2).Process payment voucher to pay employees’ wages.

J.9. DEDUCTIONS FROM SALARIES

J.9.1. Types of Deductions
(1). There are four types of deductions that are processed through the Government payroll system:

 Statutory Deductions: eductions required by law or court.

 Government Recoveries: deductions to recover monies owed.
 Employee Association Deductions: deductions for membership fees.
 Personal Deductions: deductions to approved organisations.

(2). Treasury must approve each deduction type before deductions are processed through the payroll.
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(3). Deductions from an employee’s pay will only be processed on the basis of approved authorities.
(4). All cessations of deductions (permanent or temporary cessation) for external organisations must be approved by
the relevant deduction organisation. A fee may be charged to recover cost for producing and issuing pay confirmation
letters for deduction organisations as authorized under section E.1.4(m)(iii) under the NSC

J.9.2. Categories of Deductions

1.The deductions from employees’ pay are categorized as permanent or temporary:

 Permanent deductions are those deductions that are deducted in each pay period from an employee's pay
until an authority to cease the deduction is received.

 Temporary deductions are deductions that are only deducted from an employee's pay for one or a specific
number of pay periods.

J.9.3. Repayments of Loans

1. Deductions for repayments of loans will be made from employees’ salaries only on receipt of formal written
authorities from the respective lending institution along with a copy of the loan agreement with the employee.
2.Loan deduction authorities received from all source of lending institutions must show the employee’s identification
number, pay component code name and signature and the amount to be deducted in each pay period, and the date the
loan deductions should be cease if necessary.
3.Treasury will incorporate loan deduction authorities in the fortnightly payrolls as soon as practicable after they are
received.
4.Cheques together with supporting schedules for each pay period will be remitted directly to related creditors.

J.9.4 General Requests – For deductions

1. All requests for deductions are initiated or revised by applications for salary or wage deductions to meet liabilities
approved for recovery by way of salary deduction are to be in writing and in triplicate. All copies are to be signed by
the employee concerned and should be worded along the following lines:
Example of a Deduction Request
Ministry …………………………….
(Date) ..…………………………..
Accountant General
Kiribati Government
Tarawa

Dear Sir
I hereby authorise the deduction of the sum of $ ..…..from my salary each fortnight commencing from pay period
ending…………………..and pay this amount to…………………………..on my behalf,
for……………………………………
Pay component code …………………………….
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Employee name ……………………

Employee number ……………………

2.Copies of the request are to be dispatched as follows:

Original - To the Accountant General
Duplicate - To the Government Department or other organization concerned
Triplicate - To staff clerk of the employee’s department

3.All copies must show when and to whom the other copies have been dispatched. If it is desired to cancel or amend
any such authority at any time, it must be done by letter, with copies to all the departments original notified, and all
copies must be signed by the officer concerned.

J.9.5. General Requests – In settlement of Government Debts

1.If an employee wishes to have deductions made in settlement of an account owing to the Government he must first
make satisfactory arrangements with the department to which he owes the money, and that department (if agreeing to
the proposed payment in installments by deductions from the employees‟ wages) must have the debtor complete a
general order in triplicate.
2. Copies of the request are to be disposed of as follows:
a The “Original”, is forwarded to Treasury for approval of the arrangement and salary action.

b The “Duplicate”, to the department in which the officer is employed.

c The “Triplicate” is the departmental file copy.

(3).All copies must be signed by the employee concerned, and all copies must indicate when and to whom the other
copies have been endorsed.
(4).A request or authority of this nature may not be cancelled or amended without the consent of the department to
which the money is owed.

J.9.6. Procedure for Deductions

(1) The Deduction Organization/Department shall forward the deduction authority or deduction variation authority to
the Treasury;
(2) Instructions relating to particular deductions are given in sections J.31. The Treasury may, however authorise
deductions for other purposes, either for an individual or as a general policy.
(3).The Treasury Payroll Section shall check the deduction authority from completeness and approval point of view
and verify whether the employee has sufficient pay for deduction to be made (in accordance with the current policy of
maximum deduction per pay). If the employee has insufficient pay to enable the deduction to be processed, return the
authority to the deduction organisation/department;
(4).If everything is in order, the Payroll Section shall code the deduction transaction on the deduction authority and
initial and date it as prepared and forward it to the Payroll Senior Accountant for approval;
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(5).The Payroll Senior Accountant shall review the deduction authority for completeness and accuracy and if satisfied,
sign and date the Deduction batch as “Approved” for input and payroll processing.

J.9.7. Errors in Deductions Processed

(1).If a deduction or the amount of a deduction is incorrectly taken from an employee’s pay, correction will be made
through the payroll system. The correction will be entered to the payroll as a negative amount for the deduction against
the relevant Deduction Code. This will result in:

 Repayment of the amount to the employee;

 Return of the moneys from the relevant deduction organization through reducing the current pay’s
remittance to them.

(2). The Deduction Listing for the organization to which the incorrect payment was made will show a negative
transaction for the employee. This will reduce the total payment to the Deduction organization and will offset the error
made in the previous pay period or pay periods.

(3).If required, separate payroll entries will be made to send the deduction to the correct deduction organisation, rather
than returning the moneys to the employee.

(4). The payroll costing will not be affected by these transactions as only employees’ gross pay before tax and
deductions are costed. Deductions are not costed.

J.10. CALCULATION OF SALARY

(1).Salary is to be calculated on the basis of ‘pay periods’ which is paid fortnightly, in arrears, for time worked. There
are 26 ’pay periods’ in a year. Each ‘pay period’ of 10 working days. The full time employees work for 72.5 hours per
fortnight pay. One day’s salary is 1/(26 x 10) of the employee’s annual salary rate. Each fortnightly salary is, therefore,
1/26 of the annual salary.
(2).Salary for Part-time and Casual Employees – Salaries and wages for employees working reduced hours are to be
computed as a proportion of the full salary, based on the number of hours normally worked in a ‘pay period’ by that
class of employee. Calculation of salary of part-time employees shall be as follows:

a) If the normal working hours in a ‘pay period’ for a class of employee is 72.5 hours and the department
engages an employee of that class to work for 4 hours per day;
b) Thus the employee so engaged shall work for 40 hours (4x10) in a ‘pay period’ as the ‘pay period’ comprises
of 10 working days;
c) The salary of this part-time employee would be 40/72.5 of the annual salary as approved by the Commission;
d) The calculation is to be rounded off to the nearest cent.

(3).Employment on hourly rates is not normally permitted but the Commission may give its approval for it, if justified.
(4). The Income Tax and the Provident Fund or Superannuation deductions are required to be made from all payments
of salaries or wages and other classes of payments as set out in the Income Tax Act and Kiribati Provident Fund Act as
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amended from time to time. A record of the income tax and provident fund or superannuation) contributions deducted
for each employee is maintained on the system as part of the Employee’s History.

J.11. OVERTIME
J.11.1. Guidelines
(1). An employee may be required to work overtime when necessary to bring work up-to-date or to meet any
temporary pressure of work. However, overtime should only be worked when it is absolutely necessary.
(2). Employees who are paid at L11 or above on the salary scale may not be compensated through the payment of
overtime, but they may only be compensated through time off in lieu.
(3) Where time off in lieu is approved, the time off must be taken within six months of working the additional hours.
(4). The Senior Responsible Officer (SRO) may authorise employees to work overtime upon the request by the
supervisor of the work unit needing the work, subject to the conditions set by the Public Service Commission from
time to time.
(5). The supervisor will submit the request for additional hours to the SRO at least 2 days prior to the planned work.
The request will detail the work needed, and indicator to measure that the work was completed and whether the
additional hours are to be compensated through time off in lieu or overtime. If overtime is to be paid a budget source
will be identified.
(6). In approving overtime, the Senior Responsible Officer must ensure that it is kept to a minimum and within
approved budget and is in line with operational requirements.
(7). Work, including overtime work must be done in official locations and it is the responsibility of the supervisor to
ensure that normal working hours and overtime hours are recorded accurately.
(8). Unless there are exceptional circumstances, all overtime must be worked under the direct supervision of the
supervisor
(9). The supervisor will advise the employees whether the request has been approved. The employee will decide
whether to work overtime. Overtime is a request and employees cannot be compelled to work additional hours.
(10) The Supervisor will confirm that the work is completed.
(11) On completion of the work, if the additional hours are to be compensated through overtime the employee shall
submit a claim for payment of such additional hours. The claim will be submitted within one month of completion of
the work. The supervisor will certify that the work was performed and forward the claim through to the SRO for
approval.
(12). The supervisor will certify that the overtime works have been completed and the employees’ leave record will be
noted with the additional time credited to them. The employees will be required to avail themselves of the time off in
lieu within six months of completing the additional hours. To take the time, the employee will submit an application
for through their supervisor to the SPR, stipulating time off on lieu as the leave pay.
(13) The payment of overtime will be made through the normal salary cycle.
(14) Only under special circumstances should overtime be worked on Saturdays, Sundays or Holidays. Any work
performed on these days shall be classified as overtime.
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(15). No payment shall be made to any employee who works overtime without prior authorisation from their SRO or
Secretary.

J.11.2. Remuneration for Overtime

Eligible employees with salaries at L12 and below

a) Overtime hours for Weekdays and Saturdays - Total overtime hours x 1.5 rate of current rate of pay.

b) Overtime hours for Sundays and Public Holidays - Total overtime hours x 2 rate of current rate of pay.

J.11.3. Time Off in Lieu of overtime payment

Eligible employees with salaries at L11 and above
(a). Employees who work overtime at the request of their supervisor for a period exceeding their standard prescribed
hours of work on any one day, or a period exceeding 72.5 hours per fortnight may request time off in lieu for overtime
worked.
(b). Employees who are paid at L11 or above on the salary scale may not be compensated through the payment of
overtime, but they may only be compensated through time off in lieu.
(c). Calculation of Time off in lieu of Overtime hours for:

 Weekdays and Saturdays – Total overtime hours x 1.5 to be taken as time off in lieu of overtime payment at a
mutually agreed date/time.
 Overtime hours for Sundays and Public Holidays – Total overtime hours x 2 to be taken as time off in lieu of
overtime payment.
(c). Record keeping – time off in lieu. It is the responsibility of the Human Resource Officer to ensure that proper
recording mechanisms are in place to:-

 Accurately record time off in lieu owing to employees; and

 Debit time from time off in lieu owing when the employee accesses the time they are owed.
(d). Where time off in lieu is approved, the time off must be taken within six months of working the additional hours.
(e). It is incumbent on all Ministries to ensure that employee’s who are required to work overtime are given ample
opportunity and supported to take the time owing to them.
(f). No time off in lieu shall be recorded or permitted to any employee who works overtime, without prior
authorization from their Senior Responsible Officer or Secretary.

J.11.4. Procedure for payment

Payroll Adjustment Form that advises the overtime payment must be prepared, approved and submitted to Treasury
Payroll Section in a timely manner to allow timely payment of overtime through the fortnightly payroll system. The
payment of overtime will be made through the normal salary cycle.

J.11.4.1. Action in Ministries/Departments

(1).Obtain approvals for overtime to be worked;
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(2). In each pay period, calculate the overtime hours worked by each employee;

(3). For each employee, record their employee number, name, salary per annum and overtime hours and rates (1½ or
2) to be paid on Payment Overtime Form;

(4). Approve the Payment Overtime Form for processing and payment. The approval must be by a properly delegated
officer;

(5). Code the payment overtime for input entry and initial /date as Checked;

(6). Certifying Officer to authorise the overtime batch;

(8). Forward the Payment Overtime Form with Payroll Adjustment Form to Treasury Payroll Section;

J.11.4.2. Action by Administration Division, Ministry of Finance

(1) Register the Payroll Adjustment Form for overtime.
(2). File a copy of the Payroll Adjustment Form in the PF of the staff concerned.
(3) Forward the Payroll Adjustment Form for overtime to the Treasury Payroll Section.
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J.11.4.3. Action in Treasury Payroll Section

1.Date stamp the Payroll Adjustment Form for overtime payment as received.
(2). Check the overtime payment details for:

 Completeness;
 Accuracy of the calculation of overtime hours and rates (i.e., 1½ , 2);
 Reasonableness; and
 Approval by properly delegated officers.

(3).Resolve any queries.

(4). Code the overtime payment for input entry and initial /date as Checked.
(5). Review the overtime payment and the batch and if satisfied, initial/date as Approved for input for payroll
processing.

J.12. LEAVE
J.12.1. Guidelines
(1).Departments must submit a letter to Treasury Payroll Section for each employee taking:

 Leave without pay for periods greater than 14 days (10 working days);
 Leave involving overseas travel;
 Maternity leave;
 Compassion leave;
 Special leave; and
 Annual leave.
(2). Ministries and Departments must prepare a ‘Fortnightly Departmental Leave Return’ detailing all other leave that
involves leave without pay. Cases of leave without pay which has been submitted on department letter in paragraph 1
above should not be included on the fortnightly leave return.
(2).Payroll Authorities for leave must be prepared, approved and submitted to Treasury in a timely manner to
minimize overpayment of salary and allowances to employees.
(3). All leave without pay including sick leave without pay will be processed through the payroll system as leave
entries. The payroll will record the transactions as leave without pay on employees' payslips and in the payroll
records.
(4). For employees taking leave without pay for greater than 14 days (10 working days), their pay will be suspended
in the payroll system. Ministries/ Departments must notify Treasury when the salary is to be recommenced.

J.12.2. Payroll Procedure

J.12.2.1. Action in Ministries and Departments
For Individual Cases of Leave
(1).Prepare a ‘Leave Advice Letter’ (LAL) for the leave involving leave without pay for more than 10 working days (1
pay period), overseas travel or maternity leave.
(2).Approve the LAL Letter’ for processing. The approval must be by a properly delegated officer.
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(3).Forward the LAL to Treasury.

(4).If there is any change to an employee’s leave, submit to Treasury another LAL for the change and include
reference to the original LAL.
For Fortnightly Departmental Leave Return (FDLR)
(1). For each pay period prepare a ‘Fortnightly Departmental Leave Return’ listing details of all leave without pay for
the pay period. Do not include cases for which a ‘Leave Advice Letter’ for individual case has been submitted.
(2). Submit the FDLR to Treasury.
On Resumption of Duty from Leave without Pay of more than 1 Pay Period
(1).For employees returning from approved leave without pay of more than 1 pay period, prepare and approve a
‘Leave Resumption Advice Letter’ (LRAL) to recommence the employee’s pay.

(2).Forward the LRAL to Treasury.

J.12.2.2. Action by Administration Division, Ministry of Finance

(1). Register the ‘Leave Advice Letter’ for individual case of leave and the ‘Fortnightly Departmental Leave Return’.
(2) File a copy of the ‘Leave Advise Letter’ and FDLR in the Personal file (PF) of the relevant employees.
(3) Forward the ‘Leave Advice Letter’ and the FDLR to the Treasury Payroll Section.

J.12.2.3. Action by Treasury Payroll Section

(1). Date stamp the ‘Leave Advice Letter and FDLR as received.
(2). Check the ‘Leave Advice Letter’ and FDLR for:

 Completeness; and
 Approval by appropriately delegated officers.

(3).Check that any leave without pay (LWOP) has not already been processed through the payroll system through
checking the employees ‘LWOP’ history records.
(4).Resolve any queries.
(5).Code the ‘Leave Advice Letter’ and FDLR for input and initial and date as Checked.
(6). Review the ‘Leave Advice Letter’ and FDLR including the coding and if satisfied, initial/date as Approved for
input for payroll processing.

J.13. METHOD OF PAYMENT OF SALARIES AND WAGES

Salaries and wages will be lodged directly to employees’ bank accounts for those employees who prefer to do so, but
where more convenient may be paid in cash or by cheque. Government employees should complete proper authority
forms, obtainable from their department, bank or the Treasury, authorizing the lodgment of their salary or wages to
their bank accounts.
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In the event employees change banks the employee is required to submit to the Treasury Payroll Section a clearance
letter from the current bank before they effect change of bank for their salary payments.
And for Additional Banking, employees needs increase or decrease of their repayments to any banks, will only be
action any variation by the Treasury when an authority is received from banks concerned.

J.14. PAYMENT OF SALARIES FROM IMPREST

Salaries and allowances are not to be paid out of an imprest account without the specific approval in writing of the
Accountant General.

J.15. PAYMENT OF SALARIES AND WAGES IN CASH

(1). The following is to be the standard procedure for cashing cheques, enveloping, and paying of salaries, wages and
overtime.
(a) Vouchers and cheques are to be presented together to the officer responsible for endorsement. The officer who
endorses cheques must check with the net amount shown on the voucher and that the totals of the allocation of cash
required, which are to be written at the back of the cheques, tally with the cheque amount. Before a cheque is
endorsed, the officer who is responsible for the endorsement of cheques must enter the particulars of the cheque into a
register which should be kept for checking vouchers referred to departments for payouts, the dates on which vouchers
are due to be returned to Treasury (7 days after receipt by the department) and unpaid moneys. This register which
should be kept under lock and key by the officer who endorses cheques should be ruled under these headings:

 Cheque or voucher number;

 Cheque amount;
 Nature of payment;
 Pay clerk responsible for payout;
 Date endorsed;
 Date due to return to Treasury (7 days after endorsement);
 Date finally certified and returned to Treasury; and
Remarks.

(b).Before proceeding to the bank to draw cash, a note and coin analysis is to be prepared and totaled. The total is to
agree with the net total of the voucher. Pay abstract, and these are to be balanced with the abstract before the counting
out of money into the envelopes commences. The stage at which this check is done should be at the time when the
analysis is balanced and the envelopes completed.
(c). Cash is to be drawn from the bank by the pay clerk responsible for the payout. Where the amount is, or exceeds
$200, this officer must be provided with an escort, preferably the Supervising Officer. However, in any case where it
appears prudent the paying officer is to be provided with an escort when drawing money even though the amount is
less than $200.
(d). On taking delivery of cash from the bank teller, the money must always be checked on the bank premises by the
officer(s) who have been authorised to collect the money from the bank. Any shortage is to be reported immediately to
the Bank Accountant.
(e). If the amount drawn is under $200 and only one officer is collecting it, then that officer must satisfy himself that
he is taking delivery of the correct amount before leaving the teller’s counter.
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(f). Where the amount drawn is substantial, the departments should, wherever possible (and by prior arrangement with
the Bank) have salary and wages cheques cashed before or after the hours when the bank is open for business to the
public.
(g).On return from the bank, the pay clerk concerned must count and check the amount drawn. Any shortage or
surplus should immediately be reported to the bank and to the officer in charge of the salary and wage payouts. Where
the deficiency in the cash drawn and collected is made good by the bank, no further action is required. Where,
however, there is a shortage not made good by the bank, it is to be reported immediately to the officer in charge of the
payout section who, in turn, must advise his controlling officer. An irregularity report is to be prepared and submitted
to the Accountant General and copied to the Auditor General. The officer collecting the cash will be held responsible
to make good the missing cash unless it can be proven that the missing cash could have been stolen at a time when the
money was not under his control.
(h).Officers collecting the money are responsible for its safe keeping until such time as it is handed over to another
officer or paid out to the correct payee. When pays are handed over, the receiving officer must be given a definite
understanding that he is taking over full responsibility.
(i).Enveloping is to be done by the officer who collected the cash from the bank and who has been assigned to
conduct the payout. When this officer is satisfied that the money he collected is correct he should, in the first instance,
sort out the cash required for each page in accordance with the cash for each payee. Envelopes are to be named and
the amounts payable shown in the front. It is an important part of the check that this officer should not proceed with
the enveloping of the next sheet unless and until the money for the first sheet is enveloped and balanced.
(j).Until all pay has been made up and balanced with the total amount drawn, no salaries, wages or overtime are to be
paid.
(k).While pay is being made up, the officer responsible must not leave cash unattended at any time until the money is
safely locked in a place approved by the head of the department.
(l).Pay envelopes are to be filed systematically in the pay box as the count out takes place. If the pay clerk is a
different person from the person who made up the pay, this officer on accepting responsibility for the custody of cash,
should satisfy himself that he has received all the pay envelopes and the correct cash.
(m). At all times the box containing pay envelopes must be locked and placed in a locked safe or strong room unless it
is under the immediate control of the officer paying out. Officers accepting envelopes for safe keeping or for payout
purposes must be aware that they are responsible for the cash and any losses which may occur except where incorrect
money has been checked into an envelope. If there is a shortage of cash on opening the envelope, which is to be
opened in the presence of the payee, the payer must immediately check and have it rechecked if possible, before
reporting the discrepancy.

(n). If after making up the pay it is not intended to conduct the payout until the following day the pay box must be
sealed or locked, and deposited in the custody of the bank or in a strong-room. Officers must ensure a receipt is
obtained for the deposit box.
(o). During the payout every employee must be positively identified either by a member of the pay team or some
responsible person known to them. Employees should quote their service numbers and present their KPF registration
cards for identification at the time of the payout.
(p).It is the responsibility of the employee to check the actual cash handed to them against the amount shown on the
pay-sheet. Where a number of employees congregate around the pay table, it is wise to advise them that they must not
 | 140

leave the table until they are satisfied that the amount is correct. The pay clerk must in the presence of the employee,
remove the cash from the pay envelope, and check it before handing it over. The pay clerk must also obtain the
acquittance of payees on pay-sheets before the money is handed over to them. The payee should count his pay before
he signs for it. Once he has signed he has no recourse if later he finds it short.
(q).If the amount is incorrect, the employee should point it out to the pay clerk who will check it and adjust it if he is
able to do so. If not, the amount signed for must be only the amount received. Any queries by a payee concerning
salary adjustments should not be made at the time of the payout as the pay clerk must proceed as quickly as possible
with his work. The payee should consult the pay clerk or the staff clerk of his or her department only after the payout.
(2). With the approval of the Accountant General, salary or wage cheques may be cashed at the bank on the day
before the pay day to enable individual amounts to be counted out. Arrangements for safe custody overnight must
receive approval from the Accountant General.

J.16. ADVANCE OF SALARY

J.16.1. Guidelines
(1). Advances of salaries will not be paid by Treasury except those circumstances approved under the National
Conditions of Service, Section E1.4(n) which include:
(a). On the first appointment.
(b). When proceeding on paid leave.
(c). For the purchase of essential tools (bicycle, deep freezer, refrigerator)
(d). To pay for an approved correspondence course.
(e). On compassionate grounds where an employee faces an unavoidable and unforeseen expense.
(2). Other circumstances including the purchase of motor vehicles, boats, outboard motors and canoe do not qualify for
a salary advance.
(3). The Senior Responsible Officer will consider and approve an application for salary advance by an employee in
accordance with the criteria set out in (1) above and forward to the Accountant General.
(4). Written requests shall be forwarded by the employee requesting for slary advance to the Treasury Special Unit in
all cases where authority is sought for an advance of salary, and must be received at Treasury within sufficient time to
allow payment to be made on the due date. Treasury requests a minimum of three (3) working days to process
payment, except in the case of “urgent payments”.
(6). The Treasury Special Unit will review the employee application for salary advance to ensure that he is eligible
and does not have any outstanding debts to be settled. Once the application is found in order the Special Unit will
forward the salary advance application with its positive recommendation to the Accountant General for consideration.
Upon the approval of the Accountant General the application is passed on to the Tresury Payroll Section for recording
and preparation of the payment voucher and processing of the payment by transferring to the employee’s bank
account or pay by chdeque depending upon the employee preference. The terms for repayment of advances of salary
must be shown in the “deductions” section of the employee’s salary sheet as they are repaid. Salary advances will be
recovered in the next pay period or within a reasonable period of time. In any case all salary advances must be
recovered within the financial year in which they are advanced.

J.16.2. Procedure for payment of Salary Advance

Action by Ministry/Department
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1. The employee applying for salary advance shall write a letter for salary advance indicating the amount to be
advanced, how many pays to be advanced, how long to be repaid, and amount to be deducted for each pay toward
repayment.

2. The employee submits his letter to the Senior Responsoble Officer in the Ministry for consideration and
endorsement to forward to the Accounatnt General.

3. The application for salary advance letter is sent to Treasury.

Action by Adminstration Division, Ministry of Finance

(1). Register the Salary Advance Application leter and note on the employee’s PF.
(2) Forward the Salary Advance Application to the Treasury Special Unit.
Action by Treasury Special Unit
(1). Register the Salary Advance Application (SAA).
(2). Checks shall be carried out of the following:

 The employee’s fortnightly pay and the reasonableness of the advance requested and compliance with
current policies;
 The employee has no outstanding debts or advances not fully recovered; and
 The employee will be able to repay the advance requested within a reasonable number of pays.

(3).Based on the result of the checks carried out, as above, the SAA application letter is forwarded to the Accountant
General for his consideration whether to give the advance or not, the amount of advance and the recovery action.
(4). If the SAA is declined the employee concerned will be advised accordingly and copied to the Senior Responsible
Officer in the Ministry.
(4). Upon the Accountant General approval the SAA is forwarded to the Payroll Section for further action.
Action by Payroll Section
(1). Prepare a payment voucher and approve a claim for payment with details of the salary advance as per the
approval; complete a re-numbered Salary Advance Record in the Salary Advances Register and attach the original of
the Salary Advance Record and the Application letter for Salary Advance and prepare the payment voucher.
(2). Review the payment voucher and if satisfied approve it for processing.
Process the payment voucher for advance and produce the cheque and cheque listing; file the payment voucher; note
the debtors card number and cheque number on the Application for Salary Advance letter;
(8) Forward the payment to the Transactive Unit to pay direct the advance to the employee bank account or pass on
the cheque to the Payment Unit to pay to the employee concerned depending on his payment preference.
(9). The Payment Unit shall issue the cheque to the employee after verifying his identity and obtaining his signatures
on the cheque listing as evidence of receipt of the cheque.
(10) A copy of the payment voucher for salary advance is forwarded to the Special Unit to create a debtor card for the
employee and for montiorig of the recovery of his debt from future salary deductions.
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J.16.3. Recording of Salary Advance Debt and Recovery in the Special Unit Debtors System
and Payroll System
(1). The Payroll Section produces an Application for Salary Advance file for employee and forward it to the Special
Unit for recording of the debt in the employee’s debtor card.
(2). The Special Unit , on receipt of Salary Advance Register, shall enter the employee as debtor in the Debtors
System and the amount of debt (total of salary advance). He shall also record the following details on the relevant
record in the Salary Advance Register for each debt before returning it to the Senior accounting Officer, Expenditure
Section:

 Debtor Number;
 Debtor Batch Number; and
 Payment voucher Number for the Salary Advance.

(3). The Special Unit, shall before the close of each pay period, print a listing of outstanding Salary Advance debts
from the Debtors System and in respect of each new salary advance paid in the current pay period, record the
following on the Salary Advance Debt Listing before forwarding it to the Payroll Section:

 Employee number;
 Debtor number; and
 Invoice number
 Deduction amount per pay period.

(4). In the Payroll Section, the Salary Advance Debt Listing shall be checked and coded for inputting the salary
advance recovery deductions and the total salary advance debt in the Payroll System.
(5). After each pay is processed, the Payroll Section shall forward the Salary Advance Recovery Deduction Listing
from the Payroll System to the Special Unit.
(6). The Special Unit shall check the Payroll salary Advance Deduction Listing to ensure that all deductions have been
correctly processed and that the balance of Salary Advance Debts in the Debtors card agrees with the balance of the
Salary Advance Control Ledger Account.

J.17. PAYROLL COSTING

Treasury is responsible for ensuring that the payroll system contains up-to-date and accurate account codes parameters
and that the gross pays are correctly processed to the correct General Ledger and Output accounts.

J.18. MAINTENANCE OF PROPER PAYMENT AND COSTING

RECORDS
Treasury and Government Ministries must maintain proper records of all payment authorities, payment transactions
and payroll output to support the payments and deductions processed and the payroll disbursements. Treasury is also
responsible for maintaining proper costing records and making the information available to Government Ministries.

J.19. WITHHELD AND UNCLAIMED PAYS

J.19.1. Guidelines
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(1). Withheld pays are those pays that the Payroll Section recalls. These pays have been processed through
the payroll system but not yet been deposited into employees’ bank accounts or paid to them in cash. Pays
may be withheld by the Payroll because of an error detected in the pay that has been generated, or at the
request of departments.

(2).Unclaimed Pays are those pays that have been rejected by the bank because of errors in the bank
account numbers or are unable to be paid to the employees in cash by the relevant Department. If an
employee’s pay is unclaimed for more than 2 pays, all payments to the employee will be suspended until the
situation is satisfactorily investigated. If satisfactorily resolved, the unclaimed pays will be deposited to the
employee’s bank account in the next pay period.

(3).All withheld and unclaimed pays are returned and deposited into the Government Consolidated Fund
Bank Account with ANZ Bank.
(4).All withheld and unclaimed pays must be credited to the underline account for Withheld & Unclaimed
Pays.
J.19.2. Withholding of Pays Procedures
The Payroll Section authorizes the withholding of pays by issuing a written advice to the banks or
departments.
J.19.2.1. Action in Administration Division/ Payroll Section/Bank/Department
Action by Administration Division, Ministry of Finance
(1). Register the letter of advice for withholding of pay.
(2). File a copy of the letter for withholding of pay advice in the relevant PF of the employee concerned.

(3). Forward the withholding of pay advice to the Treasury Payroll Section.

Action by Treasury Payroll Section

(1). Receive advice that a pay is to be withheld – from departments or the payroll officers.
(2). Make a printout of the employee’s current pay transactions and note the problem on the printout.
For Bank Pays
Complete a Withhold of Salary Letter with the details of the pays to be withheld and issue to the relevant
bank:
 To be signed by the Senior Accountant or Accountant
Note: The Letter must be sent to the Bank with the Net Pays Bank Deposit Lists or separately by 4pm on
the Tuesday before the salaries pay day or 4pm on the Thursday before the wages pay day.
For Cash Pays
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Write “Withhold” on the Cash Acquittal List against the name of the relevant employee before issuing the
list to the Department.
Payroll Pay Employee Employee Net Pay Reason Receipt #
Number Period Number Name Amount or
Ending Bank
Statement
#

Record the details of each withheld pay in the Withheld/Unclaimed Pays Register:

File the pay transaction printout and copies of the Withhold of Salary Letter in the Withheld/Unclaimed Pays
Folder.
Action by Bank (bank deposit net pays)
Return and deposit the pays as follows and advice the Payroll Section of the pays that have been withheld:
 ANZ Bank - deposits the pays into the Government’ Consolidated Fund Bank Account.
Action by Departments (cash net pays)
(1). Receipt the withheld pays and return the cash to the Treasury Revenue Section.
(2). Attach the receipt(s) to the Cash Acquittal List and return to the Payroll Section within 7 days.
Acton by Treasury Payroll (Stage 2)
(1). Receive the advice and/or cheque from the banks of the pays that have been withheld.

(2). Receive the Cash Acquittal Lists from Departments.

(3). Check each bank advice against the Withhold of Salary letters and the Departmental Cash Acquittal

(4). Lists to ensure all relevant pays have been withheld, receipted and repaid to Treasury.

(5).Resolve any discrepancies.

(6). Record the date of the bank advice or the receipt number in the Withheld/Unclaimed Pays Register
against each employee:

Payroll Pay Employee Employee Net Pay Reason Receipt #

Number Period Number Name Amount or Advice
Ending Date and
Bank
Statement
#
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Action by Treasury Revenue Section

(When each bank statement is received)
(1). Using the Withheld/Unclaimed Pays Register and the bank statements for the Direct Transfer Bank
Account:
 For each withheld pay, note the bank statement number in the Withheld/Unclaimed Pays
Register;
 If there are any discrepancies, immediately advise the Payroll Section.

(2). Credit the withheld net pays to the Withheld & Unclaimed Pays Underline Account.

Action by Treasury Revenue Section

(Monthly after departmental cash books are received as part of the vote reconciliation)
Credit all receipted withheld pays to the Withheld & Unclaimed Pays Underline Account.

J.19.3. Re-banking of Unclaimed Pays Procedures

Action by the Banks (bank deposit net pays)
Return the pays and advice to the Payroll Section of the pays that have been rejected and deposited.
Action by the Departments (cash net pays)
(1). Receipt unclaimed pays and return the moneys to the Treasury Revenue Section.
(2). Attach the receipt(s) to the Cash Acquittal List and return to the Payroll Section within 7 days.
Action by Treasury Payroll Section
(1). Receive the advice and/or cheque from the banks of the pays that have been rejected.
(2). Receive the Cash Acquittal Lists from Departments and check for any unclaimed pays.
Record the unclaimed pays with the date of the bank advice or the receipt number in the
Withheld/Unclaimed Pays Register.
Payroll Pay Employee Employee Net Pay Reason Receipt #
Number Period Number Name Amount or
Ending Bank
Statement
#

(4).File the advices and copies of the receipts for unclaimed pays in the Withheld/Unclaimed Pays Folder.
(5).Investigate each unclaimed pay and determine the cause and actions to be taken.

Action by Treasury Revenue Section

(When each bank statement is received)
(1).Using the Withheld/Unclaimed Pays Register and the bank statements for the Direct Transfer Bank
Account:
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 For each rejected pay deposited into the Account, note the bank statement number in the
Withheld/Unclaimed Pays Register.
(2). Credit the rejected net pays to the Withheld & Unclaimed Underline Account.

Action by the Treasury Revenue Section

(Monthly after departmental cash books are received)
(1). Credit all receipted unclaimed pays to the Withheld & Unclaimed Underline Account.
J.19.4. Payment or Cancellation of Withheld or Unclaimed Pays Procedures
(1). Each withheld or unclaimed pay must be reviewed and action taken within 2 pay periods.
(2). There are three (3) possible actions that can be taken:
 If the employee is entitled to receive the full pay, pay the full net pay to the employee;
 If the employee is entitled to receive only a part of the pay (ie the entitlements were overpaid in
the pay that has been withheld or unclaimed), pay part of the net pay to the employee and reverse
the part of the pay that the employee is not entitled to receive;
 If the employee is not entitled to receive any of the pay, reverse the whole pay to the normal
output.
J.19.4.1. Action by Payroll Section
(1). Decide the action to be taken for each withheld or unclaimed pay.
 Check that the withheld or unclaimed net pay has been received and banked into a Government’s
bank account and record receipt number or a bank statement number in the Withheld/Unclaimed
Pays Register for the pay.

 Review the transactions in the Withheld & Unclaimed Underline Account and identify the relevant
entry for the withheld/unclaimed pay.

Note: there may be no entry in the General Ledger Account for the Withheld and Underline Account if
journals have not been processed for the pay, eg cash pays returned by Departments to Treasury Revenue
Section will not be journalised until after the end of the month. However, there must be a receipt for the
returned moneys.
 Record the action being taken and date in the Withheld/Unclaimed Pays Register and initial the entry.

Payroll Pay Employee Employee Action Date Initials

Number Period Number Name
Ending
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Procedure when Net Pay to be paid in full to the Employee

(1). Complete a Withheld/Unclaimed Pay Worksheet.
(2). Prepare a creditor Payment Voucher:
 Employee details (payroll name and number);
 Pay details (payroll number, pay period number, period ending date);
 Receipt number or Bank Statement number of the returned pay;
 Bank Account from which the Net Pay is to be drawn;
 Ledger Account Details; and
 Amount of the payment (total net pay).

(3). After review and found in order to process the payment the Withheld/Unclaimed Pay Worksheet is
approved and process the payment.
Procedure when Part of the net pay to be paid to the employee
(1). Using the Withheld/Unclaimed Pay Worksheet:
 Calculate the gross and net pay that the employee is entitled to receive;
 Calculate the payroll transactions that are to be entered to the payroll system to record the
overpayment of entitlements, to retrieve any deductions made (including employer
superannuation and other deductions) and to correct the costing.

(2). Prepare a creditors Payment Voucher for the part pay that the employee is to receive:
 Employee details (payroll name and number);
 Pay details (payroll number, pay period number, period ending date);
 Receipt number or Bank Statement number;
 Bank Account from which the Net Pay is to be drawn;
 Ledger Account Details; and
 Amount of the net pay to be paid.

(3). Review the Withheld/Unclaimed Pay Worksheet and when satisfied the Withheld/Unclaimed Pay
Worksheet is approved for processing of payment.

Procedure when No net pay to be paid to the employee

(1). Using the Withheld/Unclaimed Pay Worksheet, calculate the payroll transactions that are to be entered
to the payroll system to record the overpayment of entitlements, to retrieve any deductions made (including
employer superannuation etc) and to correct the costing – this will be a reversal of all pay transaction for the
pay.
(2). Check the Withheld/Unclaimed Pay Worksheet. If satisfied, approve for processing and/or payment.
(3). Review the transactions and if satisfied, approve for payment and processing.

(4). Input the payroll transactions from the Withheld/Unclaimed Pay Worksheet.
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(5). Initial and date form as Input for payroll processing.

(6). After the first Edit Run, check the Exceptions Report to ensure that there is a net pay of $0.00. If not,
recheck the worksheet calculations and payroll entries. Make any necessary corrections to ensure that the
net pay is $0.00.
J.19.4.2. Action by Revenue Section
Check that each Withheld/Unclaimed Pay Worksheet has the receipt number or bank statement number
recorded on it to indicate that the withheld or unclaimed pay has been returned by the bank or the
department.
Procedure when amount is to be paid from the Government Consolidated Fund Account (pays
returned from the ANZ)
(1). Write a cheque for the amount on the Withheld/Unclaimed Pay Worksheet and record the cheque
number on the Pay Worksheet.
(2). Enter the transaction as an issued cheque in the Bank Reconciliation system and debit to the Withheld &
Unclaimed Pays Clearing Underline Account.
(3). Have the cheque signed by authorised signatories and pass the cheque and cheque issue list to the
Cashier for issue.
(4). Return the Withheld/Unclaimed Pay Worksheet to the Payroll Section for filing in the
Withheld/Unclaimed Pays Folder.

J.19.5. Monitoring of the Withheld & Unclaimed Pays Clearing Underline Account
(1). The Payroll Section is responsible for monitoring the Withheld & Unclaimed Pays Clearing Underline
Account to ensure that each returned net pay is investigated and acted upon within a reasonable time.

(2). Where an employee cannot be located within a reasonable period of time (2 pay periods), the pay
should be reversed and a suitable record made in the Payroll Withheld/Unclaimed Pays Register to indicate
the action taken. It the employee subsequently makes a claim for the pay, the pay should be re-processed
through the payroll system.

(3). A review of the Withheld & Unclaimed Pays Clearing Underline Account is to be done monthly.

(4). After the end of each month, print a transaction listing of the Withheld & Unclaimed Pays Clearing
Advance Account for the previous month.

(5). Using the Withheld/Unclaimed Pays Register, eliminate the entries for which there are matching
debit and credit entries:.

 Debit entry = payment to the employee or reversal to the Output;

 Credit entry = withheld or unclaimed pay received.
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(3). Investigate each entry for which there is no corresponding debit and credit entry in the account and
decide the action to be taken.

(4). For entries that are more than two pays old, initiate the reversal of the pay.

(5). File the documentation in the Withheld/Unclaimed Pays Folder.

Note: at the end of the financial year, the balance in this account will be reported in the annual financial
statements of the government as a liability under Sundry Creditors.

J.20. OVERPAYMENTS OF SALARY AND WAGES

(1). Employees are expected to acquaint themselves with the rates and conditions of their salary or wage
entitlements and to draw the attention of their Controlling Officers to any apparent incorrect payment.

(2). Treasury Payroll Clerks and department Staff Clerks must not allow “paying” officers to pay out
salaries or wages when they are aware that an overpayment is included.

(3). In order to prevent salary overpayments to staff employees, departments are to ensure that Treasury is
promptly advised of employees’ resignations, dismissals, and extended leave without pay. In the case of
sudden resignations or dismissals, when it is evident that the relative advice for resignations and dismissals
will be received late by Treasury and an overpayment may result, departments are to advise Treasury
immediately by telephone followed by immediate dispatch to Treasury of a “Withhold Salary” authority
form signed by the Secretary or Senior Responsible Officer.

(4). Overpayments Register:

a) Treasury will maintain an Overpayments Register to record details of all salary overpayments to
salaried employees.

b) Departments are responsible for keeping an Overpayments Register to record details of all
overpayments of wages, overtime and allowances to their staff and casual employees.

c) The following details must be noted in the Overpayments Register immediately upon the discovery
of an overpayment:

i. Employee’s name and ID number:

ii. Departmental Reference;
iii. Full Reasons for the overpayment;
iv. Period overpayment went undetected;
v. Method of recovery (when applicable); and
vi. Date fully recovered, or written-off (when applicable).

(d). Details of subsequent recovery action to clear overpayments must be noted in the Overpayments
Register (i.e. method of recovery and date when fully recovered, or written-off). However, it is not
 | 150

necessary to note in the Overpayments Register each of the recovery payments where recovery is
made in installments.
(5). At the time an overpayment is discovered the employee must be immediately advised of the error.
When an employee has been initially informed verbally, it should immediately be followed up by
confirmation in writing, setting out the full circumstances of how the overpayment occurred, the actual
amount of the overpayment, how the amount of the overpayment is made up, and advising the proposed
recovery action:

 In the case of salary overpayment, this memorandum will be copied by the Treasury to the
employee’s department for information, and any assistance or further explanation that may
be required from the department.

 In the case of overtime or wage overpayments departments are required to send a copy of
this memorandum to the Treasury for information, and assistance with subsequent recovery
action that may be required.

(6). Immediately after the employee is advised and the details of the overpayment have been noted in the
overpayments Register, Payroll Clerks or department staff clerks must stop any further overpayments
occurring by promptly making necessary corrections and adjustments to payroll vouchers and records.
(7). Recovery of Overpayments:

(a). Generally arrangements shalle be made for the recovery of overpayments as follows:

 If still employed, full recovery shall be made from the employee’s next pay, if possible or full
recovery shall be obtained in one lump sum payment directly from the employee. Otherwise,
recovery is to be made as quickly as possible in installments through a series of deductions from
the employee’s pay on each pay period.

 If on extended leave without pay, full recovery of the overpayment shall be obtained in one
lump sum, if possible or through installment payments directly from the employee or from the
employee’s pay through a series of payroll deductions when the employee resumes duties after
leave without pay.

 If no longer employed, as in the case of resignations or dismissals, details of the employee’s

overpayment must be immediately referred to the Treasury Revenue Section, after advising the
employee in writing of the outstanding overpayment and noting the Overpayments Register. A
copy of the written advice sent to the employee is to be used in referring the overpayment to the
Treasury Revenue Section. The Treasury Rvenue Section will follow-up the recovery of
outstanding overpayments to employees who have resigned or whose services have been
terminated and will advise the Treasury Payroll Section or department when outstanding
overpayments have been finally cleared, either by recovery or by write off, so that the
Overpayments Register can be noted accordingly.
 | 151

(b). The Accountant General’s approval must be obtained for the recovery of overpayments by
installments in the following circumstances:

i. Where full recovery by installments will not be made within 6 months.

ii. In all cases where it appears that the employee was aware of the overpayment.

(c ). Recovery of Overpayments by installments should be in amounts that make recovery economical, but
any proposal which is reasonable with regard to the employee’s circumstances, particularly if the
overpayment occurred over a period of time, should be accepted.
(d). Any subsequent variation to the method of recovery is to be reported to the Accountant General.

(e). The method of recovery must be noted in the overpayments Register; and the Officer Keeping this
Register shall be responsible to follow up and ensure that details of subsequent recovery action are
accurately noted and posted up-to-date in the Register.

(f). The Accountant General shall be advised promptly in writing of the arrangements made for recovery of
overpayments in the following cases:

i. Where it is not possible to affect prompt recovery.

ii. Where the amount of the overpayment exceeds $50.

J.20.1. Process for Recovery of Overpayments

(1). The Treasury Payroll Section shall initiate payroll transactions to prevent further overpayments to the
employee. This may include suspending the pay of an employee until the appropriate payroll actions are
determined and approved.
(2). For ongoing employees, prepare the payroll transactions for recovery and record on Instalment
Payment Regsiter for input for payroll processing.

(3). Overpayments should be recovered by reversing the pay entitlements that were overpaid. Through
reversing pay entitlements, the payroll will adjust tax, superannuation and the costing.
(4). For Terminated Employee, refer the overpayment to the relevant department for follow up and
recovery directly from the former employee.
(5). Record the overpayment and recovery action in the Overpayments Register.
J.20.2. Monthly Review of Overpayments
(1). The departments shall submit each month a written report to the Accounatnt General, detailing the
actions taken and outcomes for the recovery of overpayments to terminated employees.
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(2). The Senior Accountant in the Treasury Payroll Section shall, on receipt of the monthly report from
departments, note the actions and outcomes in the Overpayment Register and follow up outstanding reports.

J.21. ANNUAL RETURN TO DEPARTMENT OF INLAND REVENUE

1. It is the responsibility of the Treasury to furnish an annual return to the Department of Inland
Revenue of the earnings and the tax deducted there from the salary for each salaried employee in the
manner directed by the Inernal Revenue Board.

2. Annual returns of the wage earnings and payment in the nature of taxable income and the tax
deducted there from for non-public servants are to be completed and forwarded to the Internal
Revenue Board by each Ministry.

3. The procedure for Treasury is that as soon as the last salary and overtime payments have been made
in each taxation year, the employees ‘salary shall be analysed and balanced, (i.e., total gross earnings
must equal the total of all deductions plus net earnings). The Gross, Overtime, Kiribati Provident
Fund, Leave Without Pay and PAYE Tax17 column totals on each salary will form the basis for the
data required on the “Tax Deduction Certificate” forms to be returned to the Internal Revenue Board.
The Tax Deduction Certificates must be completed for all employees not later than 15 February after
the end of each taxation year with two copies of each employee’s return forwarded to the Internal
Revenue Board and a copy to the employee concerned.

J.22. EARNINGS FOR INCOME TAX PURPOSES

1. Each department must keep a record of all wages and taxable allowances paid to its employees and
the PAYE tax deducted there from in each calendar year 18. Such a record is essential for the
preparation of employees’ annual Tax Deduction Certificates.

2. When requested in writing to do so, Treasury will supply any departmental salaried employee with
the employee’s total taxable earnings figure and the tax deducted there from the records for the
previous financial year. In any event, Treasury will, at the time of submitting employees’ annual
Tax Deduction certificates to the Internal Revenue Board, provide all departmental employees with
copies of their tax deduction certificates showing the amount of their taxable earnings for the
preceding financial year and the tax paid thereon. This will be done by forwarding employees’
copies of the tax deduction certificates to departments dispatch to employees.

J.23. ASSOCIATIONS
Associations will advise Treasury when subscriptions will be deducted and the rate to be applied
accordingly to the salary bracket of employees. The necessary deduction from salary will be made by
Treasury only after lists are received from the Association of its current membership.

17 Pay As You Earn Tax

18 For tax purposes the financial year is the calendar year.
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J.24. KIRIBATI INSURANCE CORPORATION

Membership in the Kiribati Insurance Corporation (KIC) and authority to deduct Life Insurance premiums
from an employee’s salary will be advised by a memorandum to the Treasury Payroll Section from the
Manager of the KIC.

After each fortnightly pay period, Treasury will prepare cheque remittances owing to KIC in the amount of
the total life insurance deductions for the period. Cheques for life insurance deductions together with
supporting schedules will be dispatched directly to KIC for each pay period.

J.25. KIRIBATI PROVIDENT FUND

(1) The National Conditons of Service provides under section E1.4(m) that all permanent, contract and
temporary employees are required to be members of the Kiribati Providend Fund (KPF), and will deduct 7.5
percent of their salary from each fortnight as their KPF contribution.

(2). In compliance with Section 17 of the Provident Fund (Amendment) Act 2005 the member contributions
shall be paid to the Provident Fund in respect of the salary, wages, overtime, and allowances paid to each
Government employee unless the employee is eligible for exemption from membership of the Provident
Fund, and has actually been registered as exempt.

(3). Salaried Public Service and non Public Service Commission employees 19 are eligible and may elect to
register as members of the Provident Fund, which is administered by the Provident Fund Board. Salaried
employees must actually register with the Provident Fund as members of this Fund or obtain their exempt
status, if they are eligible. Casual or temporary employees must register with the Provident Fund as
members of the Fund, or to obtain their exempt status with the Fund, if eligible.

(4). Any employee or class of employees specifically exempted or excluded from membership in the
Provident Fund by the Minister of Finance or under the provisions of the Provident Fund Act will
nevertheless be required to register with the National Provident Fund and obtain an NPF Registration
Certificate confirming their exempt status and showing their standard NPF name and registration number.

(5). Departments are required to ensure that each of their employees has registered with the Provident Fund
and have obtained an NPF Registration Certificate showing the employee’s NPF or exempt status, the date
of registration, and the employee’s standard NPF name and registration number. It is compulsory for all
Government employees to register with the Provident Fund and obtain a standard NPF name and
registration number. NPF Registration Certificates and NPF names and numbers are to be used for
employee identification purposes, and employees’ NPF names and numbers must be recorded on all
Government salary and wages records and authorities. In the case of new employees the department staff
clerk must actually receive and sight the employee’s NPF Registration Certificate, and ensure that the new
employee’s NPF or exempt status and standard NPF name and number are accurately recorded for each new
staff appointment, and subsequently recorded on relevant salary or wage records.

(6). Any change in an employee’s membership status, including a change in the employee’s standard KPF
name, must be registered with and approved by the Provident Fund Board. On advice from the Provident
Fund Board of any change in an employee’s membership status, departments must ensure that all

19 Ministry of Police & Prisons; Legislative Assembly and Ombudsman Office

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departmental salary or wage records are appropriately amended and, in the case of salaried employees, that
the Treasury Payroll Section is immediately notified through an approved form.

(7). Contributions are payable to the Provident Fund in respect of each employee who is a member of the
Fund at the rate of 15% (7.5% by employee and 7.5% by employer) of each whole dollar of the employee’s
gross earnings for each pay period. An employee’s gross earnings for purposes of calculating Provident
Fund contributions include the employee’s basic salary, or wage, plus overtime bonus and allowances
payable to the employee.

(8). Allowances, paid to an employee for reimbursement of expenses such as travel allowance is not deemed
to be gross earnings and contributions will not be paid in respect of such allowances.

(9). 7.5 % of each employee’s contribution payable to the Provident Fund is to be deducted from the
employee’s gross earnings each pay period. Employees’ KPF deductions are to be calculated by applying
7.5% (i.e. one half of the full contribution rate) to each whole dollar of the employee’s gross earnings each
pay period (for example, in the case of an employee whose gross earnings for the pay period amount to
$20.88, the employee‟s National Provident Fund deduction would be $1.50 calculated by applying 7.5% to
$20 and ignoring the 88 cent). Employees’ KPF deductions must be calculated and recorded on the relative
salary or wages abstracts prepared in each pay period.

(9). Government will match or “subsidize” employees’ Provident Fund deductions on the basis of 100% of
the amount deducted, i.e. $1.00 for each $1.00 deducted.

(10). Voucher summaries for all salary vouchers prepared by Treasury and wages vouchers prepared by
departments must show separately the total amount of Provident Fund deductions for all employees
included in the voucher and the total amount of the corresponding “subsidy” to be charged to the
department salary or wages expenditure Item. From the voucher summaries Treasury will draw cheques
payable to the Provident Fund in respect of the full contribution (i.e., the total of employees’ deductions
plus subsidies) owed in compliance with the Provident Fund Act.

(11). Treasury will be responsible for drawing all cheques in payment of employees’ Provident Fund
reporting requirements. In meeting KPF reporting requirements it will be necessary to identify each
contribution cheque paid to the Provident Fund by KPF employer account title and number and pay period
dates, or by employees’ standard PF names and registration numbers in cases of salaries and wages paid
separately from the main payrolls.

(12). To enable Treasury to meet reporting requirements for identification of contribution on payments to
the Provident Fund, departments must ensure that the correct PF employer account title and number is noted
on each of their casual payroll abstracts submitted to Treasury for payment.

(13). Record of employees’ contributions recovered and paid to the Provident Fund is kept in the
computerised Payroll System. Required reports of PF Remittances for specified pay period(s), employee(s)
or category of employees can be generated through “Payroll Reports‟ module in the Payroll System.

(14). Benefits to employee who are members of the Provident Fund are set out in the Act, and employees’
enquiries concerning pensions or other benefits provided by the Fund, including withdrawals and refunds of
contributions, should be directed to the Manager of the Provident Fund for clarification or assistance.
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J.26. PARLIAMENTARY RETIREMENT FUND

1. Each person who is a Member of the Parliament shall by virtue of that fact become a member of the
Parliamentary Retirement Fund (PRF), and will be required to register with the Fund and obtain and
KPF Registration Certificate.

2. The Parliamne Office will be responsible for recording the standard KPF name and registration
number of each Member of Parliament on relevant salary records and authorities.

3. Contributions are payable to the members’ salaries only (excluding allowances).

4. Contributions will be paid to the members account at the rate of 7.5% of each whole dollar of the
member’s gross salary each pay period. The Government contribution towards the members will be
remitted each pay period by the Treasury matching the members’ 7.5% contribtions.

5. Treasury will be responsible for drawing cheques in payment of members contributions and for
ensuring that all contribution payments are properly identified in compliance with KPF reporting
requirements.

6. Members’ enquiries concerning benefits, withdrawals, and refunds of KPF contributions should be
directed to the Manager of the Kiribati Provident Fund.

J.27. PAYE INCOME TAX20

1. Tax is to be deducted and withheld from the Salaries and taxable allowances of all employees,
subject to Part V of the Income Tax Act 1990, at the rates set forth in the First Schedule of the
Income TaxAct 1990 as amended from time to time.

2. Department are responsible for following up to ensure that all of their employees (i.e., salaried staff
and casual workers) complete an annual tax code declaration form.

3. A new annual tax code declaration form must be completed and received from each employee by 15
January each year, or, in the case of new employees, must be completed and received from the
employee immediately on appointment prior to preparation of the employee’s first pay.

4. Departments are required to check annual tax code declaration forms received from employees at the
beginning of each year to ensure that:

a) A new tax code declaration form has been received from each employee.

b) All tax code declaration forms are accurately completed and signed by each employee.

c) The department name, departmental division or section, and location where the employee is
assigned are entered in the space provided for the “Employer’s Name and Address’ in the annual
tax code declaration form ( in the “Tax Deduction Certificates” section of the form.

20 Pay As You Earn Income Tax

 | 156

5. Every effort must be made by departments to ensure that current annual tax code declaration forms
are received from each employee by the 15th of January, each year. This is particularly important as
the “Annual Tax Code Declaration” and the “Tax Deduction Certificate” (for use in preparation of
employees‟ annual returns of earnings and tax deductions) are included on the same form. Where an
employee fails to provide his department with a new annual tax code declaration by 15 January, each
year, the department staff clerk is to obtain a blank form and enter the employee’s KPF name and
number, the NO DECLARATION RATE and the Department name, division or section, and location
where the employee is assigned, in the spaces provided on the form. The annual tax code
declaration form is then to be batched, in alphabetical order of the employee’s surname together
with other completed tax code declaration forms received from employees.

6. Departments are to forward annual tax code declaration forms for all salaried employees to the
Treasury Payroll Section immediately after all forms have been accounted for and checked in
accordance with paragraphs (4) and (5). All four copies of each employee’s tax code declaration
form must be received at Treasury. Treasury Payroll Section will record employees’ new tax codes
on salary cards. Employees’ forms will then be retained in safe custody on Treasury files pending
completion of employees’ Tax Deduction Certificates for return to the Internal Revenue Board after
the end of the taxation year.

7. Employees’ annual tax code declarations, reported on forms, are to be used by Treasury Payroll
Section and department staff clerks when referring to PAYE tax deduction tables in calculating the
amount of tax to be deducted from employees’ salaries or wages each pay period. Employees’ gross
earnings are to be adjusted for leave without pay deductions in determining employees’ taxable
earnings and the tax deducted there from each pay period. Kiribati Provident Fund and insurance
deductions from employees’ gross earnings are not to be taken into account in the determination of
employees’ taxable earnings and the tax deducted from each pay period (unless an employee has
obtained a special tax code certificate form – from the Internal Revenue Board authorising such
adjustments).

8. Departments are required to complete a “Source Deduction Payments and Tax Deduction Record"
form showing employees’ earnings and PAYE taxes deducted there from each pay period for
submission to the Internal Revenue Board. Completed forms shal be forwarded along with relevant
pay vouchers to Treasury for preparation of required cheques and credit advices. Departments are to
retain sufficient copies of all completed forms on their reference files.

9. Treasury Payroll Section will issue credit advices for amounts of PAYE tax deducted and withheld
from all employees’ salaries and wages each pay period, and will forward certified credit advices
together with the list of employees from whom tax has been deducted relevant forms or supporting
schedules of tax deductions to the Internal Revenue Board.

J.28. INCOME TAX ARREARS

The Internal Revenue Board will notify employees and Treasury of any deductions required under the
authority of the Income Tax Act 1990 in settlement of overdue taxes. Treasury Payroll Section shall see that
details of such notifications are properly noted and that deductions are made accordingly. Treasury will
advise the Internal Revenue Board, after each pay, of the deductions which have been made for overdue
 | 157

taxes through issuance of credit advices together with list of employees from whom deduction has been
made.

J.29. RENTAL OF GOVERNMENT HOUSES

The Kiribati Housing Corporation may direct what rent is to be deducted from an employee’s salary. In this
case, an authority from the Kiribati Housing Corporation with an employees’ signature, employee number
pay component code, amount to be deducted and the necessary deductions are made in accordance with
agreement as instructed.

J.30. URGENT PAYMENTS

If for any reason, payment of any particular wage or salary voucher is required urgently, departments are to
follow the procedure set out in Instruction G.9 – Urgent Payments.

J.31. DEDUCTIONS REQUESTED BY GOVERNMENT EMPLOYEES

The only requests for deductions from the salary or wages of Government employees which will be
accepted by Treasury are:

a) Special requests (good for one pay period only) for amounts payable to the wife, relative or a friend
of an employee who is temporarily absent through illness. These requests must be in writing signed
by the employee concerned, and must cover the full amount due to the employee. No part requests
will be accepted.

b) General requests for salaries or wages to be paid into the employee’s bank account.

c) General requests for deduction in settlement of an employee’s debt to the Government.

d) General requests for deductions elsewhere approved in this Tresury Operational Manual.
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PART K: PROCUREMENT

K.1. GUIDELINES
(1). All procurement of goods and services made by any government agency must be made in accordance with the law.
(2).Government agencies are to seek the best value for money from all purchases they make.
(3).In procurement of goods and services, government agencies must seek to promote open and effective competition
between potential suppliers.
(4).Staff undertaking the procurement of goods and services are to perform their procurement duties ethically.
(5).Staff undertaking procurement of goods and services are to be proactive in promoting improved opportunities for
local enterprises.
(6).Permanent Secretaries are accountable to their respective Ministries for ensuring that the procurement, contracting
and tendering activities of their agencies are conducted in accordance with these principles.
(7).Sales of government assets are to be undertaken in accordance with the above principles and the relevant Financial
Regulations and Store Regulations

K.2. ACCOUNTABLE OFFICERS

1. Permanent Secretaries and Heads of Departments are accountable to their Ministries for ensuring that the
procurement processes within their ministries and departments are conducted in accordance with the Procurement
Manual and the Procurement Act 2002.
2. This requires Permanent Secretaries and Head of Departments to ensure that:

 Staff within an agency undertaking procurement are clearly informed of their roles and the limits to their
financial authorities and delegations;
 Appropriate tools are available to procuring officers, notably copies of the Procurement Manual, the
Procurement Act, the Budget document, Financial Regulations and Treasury Operational Manual where
necessary, access to information on potential suppliers (e.g. access to the telephone directory) and purchase
order forms in the format approved by the Accountant General;
 Training needs are identified and appropriate training is provided to procuring officers;
 Adequate supervision and clearance of procurement documentation is maintained; and
 A system is in place to maintain records of the ministry’s and department’s procurement.

K.3. CODE OF CONDUCT FOR PROCURING OFFICERS

(1). “Procuring officers” are officers of the Government of Kiribati or its agencies who have any involvement in the
planning, management or administration of procurement of goods and services in the course of their official duties.
(2). Procuring officers should:

 Take all reasonable steps to inform themselves of the legal requirements for government procurement and
ensure that procurement are undertaken legally;
 Observer the principles and procedures of this Procurement Manual and the Procurement Act, notable the
requirements for obtaining best value for the money in all government procurement, including the use of open
and effective competition between suppliers wherever possible;
 Maintain transparency in all levels of procurement and to uphold ethical performance of procurement duties;
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 Understand and apply procurement methods that treat suppliers impartially;

 Avoid situations in which their personal or family interests (of any kind) might conflict or be thought to
conflict with their official duties;
 Report to their Permanent Secretaries of Heads of Department at the earliest opportunity any situation in
which a potential or actual conflict of interest may arise or has arisen;
 Report to their Permanent Secretaries or Heads of Department at the earliest opportunity any attempt by a
current or potential supplier to improperly influence them in the course of their purchasing duties;
 Remember that the laws of Kiribati provide for heavy penalties including imprisonment in cases or proven
fraud or dishonesty on government procurement; and
 Maintain documentation relation to each procurement to a high standard.
(3). Procuring Officers must not:

 Use information gained in the course of their purchasing duties for any personal or family purpose or gain;
 Solicit gifts, payments, hospitality, promises of future employment or any other form of personal or family
benefit from suppliers or potential suppliers;
 Accept any gifts or other benefits offered them by a supplier or suppliers .

K.4. MAIN FEATURES OF THE GOVERNMENT PROCUREMENT

(1). In this government procurement system, the main features are as follows:

 Procurements up to a value of $5,000 are initiated and processed by the procuring officers (on the advice of
the Permanent Secretary) and are reviewed and approved by the Permanent Secretary or Head of Department
of the procuring entity.
 Procurements with a value between $5,000 and $50,000 are initiated and processed by procuring officers and
are reviewed and approved by a Ministry Procurement Review Committee (MPRC) chaired by the Permanent
Secretary or Head of Department of the procuring entity;
 Procurements with value greater than $50,000 are initiated and processed by procuring officers and are
reviews and approved by a Central Procurement Review Board (CPRB) chaired by the Secretary to the
Cabinet.
 Each procuring ministry or department has a procurement unit to carry out the procurement activities in the
ministry or department and to provide secretarial services to the MPRC.
 A Procurement Support Unit (PSU) is within MFEP to provide training and guidance in procurement,
coordinate meetings of the MPRC and to provide secretarial services to the CPRB.
 Members of the MPRC and /or CPRB are “government officers” external to the procuring ministry selected
from a pool of up to 30 officers (1member and 2 alternates from a ministry) specially trained in procurement
review procedures. The review quorum to consist of the chairman, rep for the Secretariat to CPRN for the
Ministry of Finance plus 3 other members from outside the procuring entity.
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K.5. PROCUREMENT VALUING $5,000 AND LESS

This section is for procurement of goods and services (including works) of value up to $5,000. Some areas where this
section can be applied includes direct purchase of air tickets, office equipment and stationery and drugs both from
domestic as well as overseas suppliers, contracting of private transport for office use, contracting of private carpenters
to carry out minor office maintenance and repair, etc.
The procuring officer seeks quotations and tenders from suppliers and contractors on the advice of the Permanent
Secretary or his alternate or heads of divisions in the case of divisions under the procuring ministry and forwards it for
approval by the PS or his alternate.
This is the procedure to be followed by procuring officers.

Step 1: Define what the agency needs to buy

It is important that the procuring officer responsible for procurement in a ministry or department prepares a clear
written description of what is to be purchased on a requisition form and places it on the file for the procurement.
Model requisition forms shall be provided by the Ministry of Finance or the Permanent Secretary can design a form
most appropriate for his ministry’s requirements. This will normally be initiated by the Permanent Secretary or his
alternate or heads of divisions in the case of divisions under the procuring ministry and conveyed to the procuring
officer.
A good written definition of what an agency needs to buy:
o Will contain enough information for potential suppliers to decide on the type and cost of the goods or
services they can offer;
o Will avoid restricting procurement choices by over-specifying requirements; and
o Will avoid discriminatory specifications such as the use of brand names; and
o Will identify how offers from potential suppliers will be compared and a selection made (the
‘evaluation criteria’)
For “off the shelf” purchases from retail or wholesale shops a simple written description of the requirement may be all
that is required provided this specifies both quantity and (if relevant) quality/type for example, “Five hundred 90mm
IBM formatted high – density double sided floppy discs” – not just “floppy discs”.
For services, the written description should include the scope of work required in sufficient detail to enable a potential
supplier to provide a reasonable accurate estimate of cost. For example, “make one hundred A4 size photocopies
(black and white) of a fifty-page report and spiral bind each photocopy between clear plastic covers” – not just “make
photocopies of a report”.
The extent of detail provided in the written definition will depend on the nature of the procurement. Very simple and
small-scale procurement may require no more than a sentence or two, with the evaluation criteria perhaps limited to
price.
Clearly, no procurement should be undertaken unless the item concerned is strictly necessary for the efficient and
effective undertaking of the ministry’s functions. It should be noted in this connection that it would be a breach of
section 162 of the Financial Regulation to purchase goods or services in advance of normal requirements simply in
order to use up any remaining budget for the year.

Step 2: Identify possible sources of supply

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Having identified what an agency needs to buy, the procuring officer needs to consider possible sources of supply.
Procuring officers should first check that there is sufficient balance in the relevant votes before seeking possible
sources of supply. If there is not sufficient balance then the procurement process for that particular good(s) or
service(s) should stop and the Permanent Secretary should be advised accordingly.
Information on sources of supply can be obtained from:

 Experiences of other work colleagues;

 Experience gained through past purchases;
 Records of past purchases; and in some cases
 The yellow pages of the telephone directory
In procurement of goods and services, government agencies must seek to promote open and effective competition
between potential suppliers through

 Ensuring that potential suppliers have reasonable opportunities to offer their products for procurement by
government agencies, for example, by identifying and seeking price quotations from several potential
suppliers; and
 Ensuring that the procurement procedure us understood by businesses and make it as easy as possible for new
suppliers to enter the government procurement system.
However, the procuring officer needs to decide the extent to which offers will be sought from competing suppliers
after considering the nature and size of the procurement to be made. For small “off the shelf” procurement of items
such as pens and paper it would be costly and unnecessary to identify all possible suppliers (including possible
overseas suppliers). Depending on the expenditure involved, not less than two or three potential local suppliers would
need to be identified.
For larger procurement or procurement with more complex technical characteristics, such as computing equipment,
more care is needed to ensure that an adequate range of competing suppliers is identified including perhaps – if there is
insufficient competition between local suppliers – some possible overseas suppliers.
In identifying potential suppliers, procuring officers must also observe the requirement that they perform their
procurement duties ethically. This means that potential suppliers must be identified in a fair and impartial manner, with
bias or favoritism, and that procurement staff must not make any use of their public service position to advantage any
potential supplier for personal or family gain.

Step 3: Decide on the procurement procure

Having defined the agency’s procurement need and identified possible suppliers to meet it, the procuring officer needs
to decide on the best procurement procedure.
The procuring officer should exercise his or her knowledge and judgment as to the procurement procedure most likely
to achieve the best value for money;

 For example, there is nothing to prevent the procuring officer deciding that threes written quotations should be
sought from potential suppliers, even though the likely procurement cost is less than AU$5,000;
 He/she may judge in a particular case that seeking three or more rather than two quotations will reduce the risk
of collusion between potential suppliers and hence increase the likelihood of receiving competitive price
quotations.
Good procurement practices for simple procurement to promote achievement of best value for money include:
 | 162

 Ordering consumables at sufficient intervals and in sufficient quantities to achieve retail trade discounts or
wholesale prices;
 Monitoring the availability of ‘special offers’ amongst potential suppliers;
 Sourcing supplies from two or more suppliers wherever this will promote competition without sacrificing
price discounts for volume; and
 Providing potential suppliers with sufficient notice of requirements to give them adequate time to prepare their
price quotations.
Whatever procurement procedure is decided upon, the procuring officer should document in writing the reasons for
any variation from the intention of the procedures set out in the Procurement Act. For example, the detailed reasons
why it might have been judged “not possible” in a particular case to seek the number of quotations required by the
Procurement Act.
Generally speaking, the only defensible reason for failure to seek at least the number of price quotations intended by
the Procurement Act would be that an insufficient number of local suppliers existed and that the cost of seeking price
quotations from overseas suppliers would clearly exceed any likely benefits and other reasons stated in section 22 of
the Procurement Act 2002.

Step 4: Obtain quotations

Having identified possible sources of suppliers and decided on the procurement procedure, the procuring entity shall
request quotations from as many suppliers or contractors as possible in accordance with the Procurement Act 2002.
The procuring officer must ensure that each of them receives an identical description of the agency’s procurement need
as identified at Step1. This can be achieved by circulating the written description of what is to be purchased prepared
at Step 1, through telephone to potential suppliers and asking them to provide price quotations or through the use of
the media. This can include local as well as overseas suppliers.
The Procurement Act requires that the Ministry concerned must keep all quotations received on file for the future
reference.

Step 5: Compare offers and select preferred supplier

When quotations from potential suppliers are received, the procuring officer should first consider whether the offers
meet requirements identified at Step 1. Any that clearly do not meet the requirements should not be considered further.
The key principle to be observed in comparing offers that do conform to the requirements is that Government agencies
are to seek the best value for money from all purchases they make.
Assessment of the value for money offered by the quotations received requires consideration of factors such as
purchase price, quality, maintenance costs, after sales service, warranties, training requirements (if any) and delivery
time. The supplier quoting the lowest purchase price will not necessarily be offering the best value for money.
The evaluation of offers must be made against the evaluation criteria identified at Step 1 of procurement process. In
other words, unless there are strong reasons to the contrary that would need to be fully documented, the procuring
officer must not change the evaluation criteria after they have been defined at Step 1.
The method used to evaluate the quotations provided by competing suppliers will depend on the nature of the purchase
to be made. For small scale procurement of standard items there may be little if any substantive difference between
offers, with selection determined by simple matters such as the shortest delivery time or the lowest price for the
required quality.
 | 163

The procuring officer should then prepare a written assessment of the quotation offering the best value for money, for
example. For any but the most simple procurement, the
Evaluation of ‘best value for money’ will involve some degree of qualitative judgement by the procuring officer, such
as the balance to be struck between the ‘desirable’ (but not mandatory) characteristics of a product and the price the
purchaser is prepared to pay. It can be the case that different procuring officers will on reasonable grounds come to
differing assessments of best value for money because of differences in the judgements they make in comparing costs,
quality and risks.
For this reason, in particular it is important that, whatever conclusion is reached by the procuring officer, the reasons
for that conclusion are adequately documented on file. The procuring officer should also ensure that the selection is
completed promptly and unsuccessful suppliers who have provided quotations are informed of the decision.

Step 6: Obtain approval from the Permanent Secretary (PS)

After having selected a supplier, the procuring officer must ensure that all relevant codes, procedures and regulations
have been observed before submission to the Permanent Secretary or his delegated alternate for approval and signing.
The procuring officer must be ready to explain any deficiencies on which the PS or alternate requires more
information.
It is important that consideration for the purchases must be made on real necessity and that there are sufficient funds to
meet such an outlay.

Step 7: Issue purchase order to preferred supplier

The procuring officers prepares a purchase order for the Permanent Secretary or his alternate to sign and to issue to the
preferred supplier in accordance with the Financial Regulations. The most important requirements of the Financial
Regulations in this regard are that:

 A local purchase order form or payment voucher approved by the accounting officer must be completed for all
purchases of goods and services and must obtain among other things full particulars (section 186 of Financial
Regulation);
 Local purchase order forms must be issued in sets of four, an original and three copies;
 Copies of local purchase order forms must be clearly endorsed with the word ‘COPY”
 And no disbursement of public moneys can be made against any copy (section 181 of the Financial
Regulation);
 Two copies (including the original) are to be sent to the supplier, one copy is left in the payment voucher book
and one copy for the procuring entities file;
 A supplier must be advised to send the original local purchase order form or payment voucher to the Ministry
of Finance or to the procuring ministry along with the supplier’s invoice; and
 The local purchase order or payment voucher may be filled out by any officer but must be approved and
signed only by a person with appropriate delegated financial authority.
In the case of tender, the procuring ministry prepares a contract to be signed by the Permanent Secretary or his
alternate and the successful supplier. The payment arrangement shall be outlined in the contract.

Step 8: Administer the procurement

The procuring officer must ensure that:

 Delivery of the item or service purchased is made as scheduled;

 Goods/services are provided to the standards specified by the purchase order;
 | 164

 Prompt remedial action is taken in the event of delivery delays or unsatisfactory goods/services;
 The supplier receives payment in accordance with the relevant Financial Regulations.
Financial Regulations, sections 161 to 203 deal with the processing of payments and the making of payments to
suppliers in particular, Financial Regulations 166 provides that:

 Payments for goods and services must not be made before the supplier’s due date unless a price discount for
early payment is offered that exceeds the interest cost of funds to the Government; and
 Payments must not be made before the due date for the sole purpose of using up an anticipated budget surplus.
Subject to the Financial Regulations, however, if an item purchased has been delivered on time and to standard then
good procurement practice requires that the supplier be paid promptly in accordance with their due date for payment.

Step 9: Maintain records of procurement

Permanent Secretaries and procuring officers are responsible for ensuring that adequate written records of procurement
are maintained. For each procurement they undertake, procuring officers are to ensure that the following records are
maintained securely on file:

 Written description of the purchase requirements prepared at Step 1, including the evaluation criteria;
 Brief explanation of the procurement method adopted (Step 3);
 A note for file documenting any oral price quotations received and copies of any written price quotations
received (Step 4);
 Statement of reason(s) for selection of the preferred supplier, cross-referenced to the evaluation criteria (Step
5);
 Copy of the purchase order (Step 7);
 Delivery documentation including copy of invoice, manufacturer’s instructions, product warranties etc. as
relevant.
The procuring officer must also ensure that procurement of fixed assets is recorded on the agency’s assets register in
accordance with the Stores Regulation.

K.6. PROCUREMENT VALUING BETWEEN $5,000 AND $50,000

This section is for procurement of goods and services (including works) of value between $5,000 and $50,000. All
purchases under this category are initiated and processed by the procuring ministries and departments but are referred
to a committee for review and approval. This committee is known as a ministry procurement review committee
(MPRC) and is chaired by the Permanent Secretary or Head of Department of the procuring entity and members
compromise of Permanent Secretaries (or Head of Departments) or their appointed alternates.
Some areas where this section can be applied includes direct purchase of air tickets, office equipment and stationery,
drugs and heavy plants and machinery both from domestic as well as overseas suppliers; contracting of private
transport for office use, contracting of private carpenters to carry out minor office maintenance and repair, contracting
of construction firms to carry out major construction works, etc.
This is the procedure to be followed by procuring officers.

Step 1: Define what the agency needs to buy

The procuring officer responsible for procurement in a ministry or department prepares a clear written description of
what is to be purchased on a requisition form and places it on the file for the procurement. Model requisition forms
 | 165

shall be provided by the Ministry of Finance or Permanent Secretary can design a form most appropriate for his
ministry’s requirements. This will normally be initiated by the Permanent Secretary or his alternate and conveyed to
procuring officers for their action.
A good written definition of what an agency needs to buy;

 Will contain enough information for potential suppliers to decide on the type and cost of the goods or services
they can offer;
 Will avoid restricting procurement choices by over-specifying requirements; and
 Will avoid discriminatory specifications such as the use of brand names; and
 Will identify how offers from potential suppliers will be compared and a selection made (the ‘evaluation
criteria’).
For direct purchase of computers and machinery, for example, a clear description should include memory capacity,
speed, age, capabilities and other special features,
For services, a written description should include the scope of work required in sufficient detail to enable a potential
supplier to provide a reasonably accurate estimate of cost. For example, “construction (extension) of a government
building to accommodate two additional offices each with a toilet” – not just “building construction”
The extent of detail provided in the written definition will depend on the nature of the purchase.

Step 2: Identify possible sources of supply

Having identified what an agency needs to buy, the procuring officer needs to consider possible sources of supply.
Procuring officers should first check that there is sufficient balance in the relevant votes before seeking possible
sources of supply. If there is not sufficient balance then the procurement process for that particular good(s) or
service(s) should stop and the Permanent Secretary should be advised accordingly.
Information on sources of supply can be obtained from:

 Experiences of other work colleagues;

 Experience gained through past purchases;
 Records of past purchases; and in some cases
 The yellow pages of the telephone directory (local and international).
In procurement of goods and services, government agencies must seek to promote open and effective competition
between potential suppliers through ensuring that potential suppliers have reasonable opportunities to offer their
products for purchase by government agencies, for example, by identifying and seeking price quotations from more
than 3 potential suppliers; and ensuring that the procurement procedure is understood by businesses and makes it as
easy as possible for new suppliers to enter the government procurement system. If there is insufficient competition
between local suppliers, some possible overseas suppliers should also be sought.
In identifying potential suppliers, procuring officers must also observe the requirement that hey perform their
procurement duties ethically. This means that potential suppliers must be identified in a fair and impartial manner,
without bias or favoritism, and that procuring staff must not make any use of their public service position to advantage
any potential supplier for personal or family gain.

Step 3: Decide on the procurement procedure

Having defined the agency’s procurement need and identified possible suppliers to meet it, the procuring officer needs
to decide on the best procurement procedure.
 | 166

Subject to Part 2 of the Procurement Act 2002, the procuring officer should exercise his or her knowledge and
judgement as to the procurement procedure most likely to achieve the best value of money.
Whatever procurement procedure is decided upon, the procuring officer should document in writing the reasons for
any variation from the intention of the procedures set out in the Procurement Act. For example, the detailed reasons
why it might have been judged “not possible” in a particular case to seek the number of quotations required by the
Procurement Act 2002.
Generally speaking, the only defensible reason for failure to seek at least 3 the number of price quotations intended by
the procurement Act would be that an insufficient number of local and overseas suppliers existed and other reasons
stated in section 22 of the Procurement Act 2002.

Step 4: Obtain quotations

Having identified possible sources of suppliers and decided on the procurement procedure, the procuring entity shall
request quotations from as many suppliers or contractors as possible in accordance with Article 48(1) of the
Procurement Act 2002.
The procuring officer must ensure that each of them receives an identical description of the agency’s procurement need
as identified at Step 1. This can be achieved by circulating the written description of what is to be purchased prepares
at Step 1, through telephone contact if possible, to potential suppliers and asking them to provide price quotations or
through media advertising if necessary.
The Procurement Act requires that the Ministry concerned must keep all quotations received on file.

Step 5: Compare offers and select preferred supplier (MPRC)

When quotations from potential suppliers are received the procuring entity shall compile all the offers in preparation
for a meeting of the MPRC. When this is ready, the Permanent Secretary after consulting the Procurement Support
Unit shall call a meeting of the MPRC. The time of the meeting of MPRC should be conveyed to the PSU for
coordination purposes. The secretarial work for the MPRC should be done by the procurement unit of the procuring
ministry.
The MPRC should first consider whether the offers meet the requirements identified at Step 1 and any that clearly do
not meet the requirements should not be considered further.
The key principle to be observed in comparing offers that do conform to the requirements is that Government agencies
are to seek the best value for money from all purchases they make.
Assessment of the value for money offered by the quotations received requires consideration of factors such as
purchase price, quality, maintenance costs, after-sales services, warranties, training requirements (if any) and delivery
time. The supplier quoting the lowest purchase price will not necessarily be offering the best value for money. For
example, two different suppliers may have quoted to supply a second-hand motor car of the same make and age.
However, if the cheaper car offered has traveled many more kilometers than the second car, the second car may well
offer better value for money.
The procurement unit of the procuring ministry acting as an MPRC secretariat should then prepare a written
assessment of the quotation offering the best value for money for signing
By the Permanent Secretary in his capacity as the chairman of the MPRC. The evaluation of ‘best value for money’
will involve some degree of qualitative judgment by the procuring officer, such as the balance to be struck between the
‘desirable’ (but not mandatory) characteristics of a product and the price the purchaser is prepared to pay. It can be the
 | 167

case that different procuring officers will on reasonable grounds come to differing assessments of best value for money
because of differences in the judgments they make in comparing costs, quality and risks.
The procuring ministry must be ready to explain any deficiencies on which the MPRC requires more information.
It is important that whenever conclusion is reached by the MPRC, the reasons for that conclusion are adequately
documented on file. The MPRC secretariat should also ensure that the selection is completed promptly and
unsuccessful suppliers who have provided quotations are informed of the decision.

Step 6: Issue purchase order to preferred supplier

After the MPRC has selected a supplier, the procuring officer prepares a purchase order for the Permanent Secretary or
his alternate to sign and to issue to the successful supplier in accordance with the Financial Regulations. The most
important requirements of the Financial Regulations in this regard is that a local purchase order form or payment
voucher approved by the accounting officer must be completed for all procurement of goods or services and must
contain among other things full particulars (section 186 of the Financial Regulation).
Not more than 50% of the total payment should be made once the supplier has been selected and the order has been
secured. The balance to be paid as agreed between the procuring ministry and the supplier.
In the case of tender, the procuring ministry prepares a contract to be signed by the Permanent Secretary or his
alternate and the successful supplier. The payment arrangement shall be outlined in the contract.

Step 7: Administer the procurement

The procuring officer must ensure that:

 Delivery of the item or service purchased is made as scheduled;

 Goods/services are provided to the standards specified by the purchase order;
 Prompt remedial action is taken in the event of delivery delays or unsatisfactory goods/services;
 The supplier receives payment in accordance with the relevant Financial Regulations.

Step 8: Maintain records of the procurement

Permanent Secretaries and procuring officers are responsible for ensuring that adequate written records of procurement
are maintained. For each procurement they undertake, procuring officers are to ensure that the following records are
maintained securely on file:

 Written description of the purchase requirements prepared at Step 1, including the evaluation criteria;
 Brief explanation of the procurement method adopted (Step 3);
 A note for the file documenting any oral price quotations received and copies of any written price quotations
received (Step 4);
 Statement of reason(s) for selection of the preferred supplier, cross-referenced to the evaluation criteria (step
5);
 Copy of the purchase order (Step 6);
 Delivery documentation including copy of invoice, manufacturer’s instructions, product warranties etc. as
relevant.
The procuring officer must also ensure that procurement of fixed assets is recorded on the agency’s asset register in
accordance with the Stores regulation.
 | 168

K.7. PROCURMENT VALUING $50,000 AND OVER

This section is for procurement of goods and services (including works) of value $50,000 and over. All purchases
under this category are initiated and processed by the procuring entities but are referred to a Central Procurement
Review Board (CPRB) for review and approval. The CPRB is chaired by the Secretary to the Cabinet and members
comprise of Permanent Secretaries and Heads of Departments or their appointed alternates.
Some areas where this section can be applied includes direct purchase of office equipment and stationery, drugs and
heavy plants and machinery both from domestic as well as overseas suppliers; contracting of private transport for
office use, contracting of private carpenters to carry out minor office maintenance and repair, contracting of
construction firms to carry out major construction works, etc.
This is the procedure to be followed by procuring officers.

Step1: Define what the agency needs to buy

The procuring officer responsible for procurement in a ministry or department prepares a clear written description of
what is to be purchased on a requisition form and places it on the file for the procurement. Model requisition forms
shall be provided by the ministry of Finance or Permanent Secretary and Head of Department can design a form most
appropriate for his ministry’s or department’s requirements. This will normally be initiated by the Permanent Secretary
or his alternate and conveyed to procuring officers.
A good written definition of what an agency needs to buy:

 Will contain enough information for potential suppliers to decide on the type and cost of the goods or services
they can offer;
 Will avoid restricting procurement choices by over-specifying requirements; and
 Will avoid discriminatory specifications such as the use of brand names; and
 Will identify how offers from potential suppliers will be compared and a selection made (the ‘evaluation
criteria’).
For direct purchase of computers and machinery, for example, a clear description should include memory capacity,
speed, age, capabilities and other special features.
For services, a written description should include the scope of work required in sufficient detail to enable a potential
supplier to provide a reasonably accurate estimate of cost. For example, “construction (extension) of a government
building to accommodate two additional offices each with a toilet” – not just “building construction”
The extent of detail provided in the written definition will depend on the nature of the purchase.

Step 2: Identify possible sources of supply

Having identified what an agency needs to buy, the procuring officer needs to consider possible sources of supply.
Procuring officers should first check that there is sufficient balance in the relevant votes before seeking possible
sources of supply. If there is not sufficient balance then the procurement process for that particular good(s) or service
(s) should stop and the Permanent Secretary should be advised accordingly.
Information on sources of supply can be obtained from:

 Experiences of other work colleagues;

 Experience gained through past purchases;
 Records of past purchases; and in some cases
 | 169

 The yellow pages of the telephone directory (local and international).

In procurement of goods and services, government agencies must seek to promote open and effective competition
between potential suppliers through ensuring that potential suppliers have reasonable opportunities to offer their
products for purchase by government agencies, for example, by identifying and seeking price quotations from more
than 3 potential suppliers; and ensuring that the procurement procedure us understood by business and make it as easy
as possible for new suppliers to enter the government procurement system. If there is insufficient competition between
local suppliers, some possible overseas suppliers should also be sought.
In identifying potential suppliers, procuring officers must also observe the requirement that they perform their
procurement duties ethically. This means that potential suppliers must be identified in a fair and impartial manner,
without bias or favoritism, and that procuring staff must not make any use of their public service position to advantage
any potential supplier for personal or family gain.

Step 3: Decide on the procurement procedure

Having defined the agency’s procurement need and identified possible suppliers to meet it, the procuring officer needs
to decide on the best procurement procedure.
Subject to Part 2 of the Procurement Act 2002, the procuring officer should exercise his or her knowledge and
judgment as to the procurement procedure most likely to achieve the best value for money.
Whatever procurement procedure is decided upon, the procuring officer should document in writing the reasons for
any variation from the intention of the procedures set out in the Procurement Act. For example, the detailed reasons
why it might have been judged “not possible” in particular case to seek the number of quotations required by the
Procurement At.
Generally speaking, the only defensible reason for failure to seek at least 3 the number of price quotations intended by
the Procurement Act would be that an insufficient number of local and overseas suppliers existed and other reasons
stated in section 22 of the Procurement Act 2002.

Step 4: Obtain quotations

Having identified possible sources of suppliers and decided on the procurement procedure, the procuring entity shall
request quotations from as many suppliers or contractors as possible in accordance with Article 48(1) of the
Procurement Act 2002.
The procuring officer must ensure that each of them receives an identical description of the agency’s procurement need
as identified at Step 1. This can be achieved by circulating the written description of what is to be purchased prepared
at Step 1 or through telephone if possible, to potential suppliers and asking them to provide price quotations.
The Procurement Act requires that the ministry and department concerned must keep all quotations received on file.

Step 5: Compare offers and select preferred supplier (CPRB)

When quotations from potential suppliers are received the procuring entity shall compile all the offers and prepare
them for review by the CPRB. When this is ready, the Secretary to the Cabinet, after consulting the Procurement
Support Unit shall call a meeting of the CPRB.
The CPRB should first consider whether the offers meet the requirements identified at Step 1 and any that clearly do
not meet the requirements should not be considered further.
The key principle to be observed in comparing whether the offers that do conform to the requirements is that
Government agencies are to seek the best value for money from all purchases they make.
 | 170

Assessment of the value for money offered by the quotations received requires consideration of factors such as
purchase price, quality, maintenance costs, after-sales service, warranties, training requirements (if any) and delivery
time. The supplier quoting the lowest purchase price will not necessarily be offering the best value for money. For
example, two different suppliers may have quoted to supply a second h-hand motor car of the same make and age.
However, if the cheaper car offered has traveled many more kilometers than the second car, the second car may well
offer better value for money.
The PSU, acting as CPRB secretariat, should then prepare a written assessment of the quotation offering the best value
for money for signing by the CPRB chairman. The evaluation of ‘best value for money’ will involve some degree of
qualitative judgment by the procuring officer, such as the balance to be struck between the ‘desirable’ (but not
mandatory) characteristics of a product and the price the purchaser is prepared to pay. It can be the case that different
procuring officers will on reasonable grounds come to
Differing assessments of best value for money because of differences in the judgements they make in comparing costs,
quality and risks.
The procuring entity must be ready to explain any deficiencies on which the CPRB may require more information.
It is important that whatever conclusion is reached by the CPRB, the reasons for that conclusion are adequately
documented on file. The procuring entity and the CPRB should also ensure that the selection is completed promptly
and unsuccessful suppliers who have provided quotations are informed of the decision.

Step 6: Issue purchase order to preferred supplier

After the CPRB has selected a supplier, the procuring officer prepares a purchase order for the Permanent Secretary or
his alternate to sign and to issue to the successful supplier in accordance with the Financial Regulations. The most
important requirements of the Financial Regulations in this regard is that a local purchase order form or payment
voucher approved by the accounting officer must be completed for all procurement of goods and services and must
contain among other things full particulars (section 186 of the Financial Regulation).
Not more than 50% of the total payment should be made once the supplier has been selected and the order has been
secured. The balance to be paid as agreed between the procuring entity and the supplier.
In the case of tender, the procuring entity prepares a contract to be signed by the Permanent Secretary (head of
Department) or his alternate and the successful supplier. The payment arrangement shall be outlined in the contract.

Step 7: Administer the procurement

The procuring officer must ensure that:

 Delivery of the item or service purchased is made as scheduled;

 Goods/services are provided to the standards specified by the purchase order;
 Prompt remedial action is taken in the event of delivery delays or unsatisfactory goods/ services;
 The supplier receives payment in accordance with the relevant Financial Regulations.

Step 8: Maintain records of the procurement

Permanent Secretaries and procuring officers are responsible for ensuring that adequate written records of procurement
are maintained. For each procurement they undertake, procuring officers are to ensure that the following records are
maintained securely on file:

 Written description of the purchase requirements prepared at Step 1. Including the evaluation criteria;
 Brief explanation of the procurement method adopted (step 3);
 | 171

 A note for file documenting any oral price quotations received and copies of any written price quotations
received (Step 4);
 Statement of reason(s) for selection of the preferred supplier, cross-referenced to the evaluation criteria (Step
5);
 Copy of the purchase order (Step 6);
 Delivery documentation including copy of invoice, manufacturer’s instructions, product warranties etc. as
relevant.

The procuring officer must also ensure that procurement of fixed assets is recorded on the agency’s asset register in
accordance with the Stores Regulation.
 | 172

PART L: IMPREST ACCOUNTS

1.An imprest is a sum of money advanced to an officer under section 22(1)(c) of the Public Finance Act to meet
expenditure directly connected with the public service for which vouchers cannot be presented conveniently in the
normal way.
2. Imprests are of two classes:

(a) standing imprests which may be replenished from time to time, and which shall be retired at the end of
each financial year; and

(b) special imprests granted or particular purposes, which shall be accounted for in full within the period
allowed or when the service is completed, whichever is the sooner.
3.A special imprest is not transferable to another officer. A standing imprest may, however, be transferred between
departmental officers due to the incidence of transfers, leave etc. provided that the original purpose for which the
imprest was issued is not violated and a handing-over certificate (Accounting form 1) covering the cash and relevant
vouchers is completed and signed by both officers.

L.1. APPLICATION AND OPERATION

1.Applications for imprests shall be made to the Accountant General on Accounting form 20 and the necessity for the
imprest shall be fully explained in the application. The amount applied for shall be fixed at the lowest figure
compatible with the requirements of the service and the period to be covered by an imprest shall be as short as is
reasonably convenient. The application shall be signed personally by the officer requiring the imprest.

2.Where possible, officers requiring the use of imprests shall ensure that their applications reach the Accountant
General at least one week before the date on which the imprest is required.

3.The Accountant General may authorise an accountable officer to issue an imprest subject to his prior approval and
directions as to its accountability under these Regulations.

4.The authority of the Accountant General shall be obtained before an imprest account whether temporary or
permanent is opened and to the appointment of any person as imprestee.

5.On the change of an imprestee the outgoing imprestee is to obtain a clearance from the new imprestee for all money,
paid vouchers or other documents handed over. A copy of the clearance is to be retained in the department.

6.An imprestee is debtor to the Government for all money advanced to him and not accounted for.

7.An imprestee may delegate routine duties but shall remain responsible. He may not delegate the duties of signing
cheques, statements or vouchers for reimbursement.

8.Imprest moneys are to be kept separate from any other money or funds which the imprestee may handle.

9.No money is to be paid into an imprest account other than that provided by the Treasury for the purpose of funding
the imprest account.
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L.2. ACCOUNTING

1.The Accountant General shall maintain a register to record the issue of imprests and to ensure by its regular
examination that imprests are being properly accounted for and are retired on due dates.

2.The issue and final retirement of imprests shall be allocated to a below-the-line account under Advances, separately
recording standing imprests and special imprests.

3.When cash and vouches are surrendered on retiring an imprest a revenue receipt shall be issued crediting the
Advance account.

4. An imprest holder is an accountable officer and must duly observe all regulations regarding the control of
expenditure and the disbursements of public money. Imprests shall be used only for the specific purposes for which
they are issued, and holders are not relieved from responsibility until vouchers submitted have been examined and
found correct. In no circumstances shall an imprest be used for private purposes however temporarily. Imprest holders
may not use for imprest purposes other public monies which may come into their possession unless specifically
authorised by the Accountant General. Such monies shall, unless otherwise specifically agreed, be kept separate and
accounted for in full.

5. Officers holding money drawn on imprest shall arrange for its safe custody in accordance with these Regulations.

L.3. FUNDING AND REIMBURSEMENT OF IMPREST ACCOUNTS

1.For the initial funding a voucher in the name of the imprestee for the amount of the advance as approved by the
Accountant General is to be submitted to the Treasury.

2.For reimbursement a similar voucher for the amount expended during the period is to be submitted to the Treasury.
The voucher is to be supported by receipts for all amounts expended and a certificate by a responsible officer of the
amount of cash on hand. The vouchers shall be allocated direct to the votes concerned and not to the below-the-line
account for ‘Advances – Standing (or Special) Imprests’. The replenishment shall no exceed the amount of the
voucher submitted.

3.Standing imprests shall be repaid on or before the last day of the financial year in which they are issued, or
immediately when the reasons for which they were granted cease to exist, by the production of vouchers or cash for
the full amount of the imprest. Officers retiring imprests at the end of a financial year shall apply in ample time to
permit the issue of any new imprest required for the ensuing year.

L.4. PAYMENTS FROM IMPREST

(1) An imprestee may only make payments of a type approved by the Accountant General.

(2) Each payment is to be supported by a certified voucher and a receipt.

(3) The imprestee is responsible to see that all payments are properly approved and are in accordance with
the Treasury Operational Manual.
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L.5. IMPRESTEE’S CASH BOOK

1.Imprest holders shall keep a cash book and record all payments except where the Accountant General has authorised
otherwise. The accounts of imprest holders are subject to inspection by the Accountant General and Auditor General.

2.An imprestee is to maintain a cash book in which all reimbursements and payments shall be entered. This cash book
is to be balanced regularly and reconciled with the cash on hand.
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PART M: ACCOUNTABLE ADVANCE FOR NORMAL OPERATION

M.1. ACCOUNTABLE ADVANCES AND APPROVING AUTHORITY

1. The Accountant General may approve accountable advance, for any Head of Department, officer or, or a person
authorizing to receive money in the service of the Government for expenditures that does not link to the normal
business expenditure, and for traditional and transport assistance to participant or a group of people in a training. The
Accountable Advance is approved and must acquit for the purpose it was intended for. The Accountant General
reserves the right to disapprove any request given that all type of expenses must go through the normal procedures as
highlighted in G2(4).

2.The Accountant General acting under the authority of an Advance Warrant issued under section 22(1)) of the Act
may disburse monies for the purpose of making advances, subject to the conditions of section 22 of the Ac,Financial
Regulations and the TOM.

M.1.2. Accounting for Adavance

(1). Advances are accounted for by means of Advance accounts. Advance accounts may not be opened without the
prior approval of the Accountant General. No payments may be debited to Advance accounts without the specific
approval of the Accountant General, who shall issue instructions regarding the recovery of any debits so approved.

(2). Advance accounts may be classified as either:

(a). personal advance accounts which are the liability of the officer concerned and may, if necessary, be
recovered from his salary

(b). general advance accounts which are the responsibility of the Accountant General, except when such accounts
are for the use of a Ministry in which case they are responsibility of the Secretary.

(3). Secretaries authorised to maintain Advance accounts shall keep such records as the Accountant General may
direct and shall reconcile the balances with the Accounting Division accounts as directed by the Accountant General
which shall be not less frequently than six monthly.

M.1.3. Conditions of Advance

The officer, who has taken the accountable advance as approved by the Accountant General shall submit receipts, in
respect of all the expenses met out of the advance amount for the purpose it was intended for.
(1) The accounting officers in the Department concerned shall be primarily responsible to ensure that:

 The accountable advance expenses is fully accounted for by the officer;

 The statement of expenses submitted by the officer is fully supported by receipts. In all such cases the
explanation for non-production of receipts shall be recorded;
 The unspent portion of the accountable advance with the expenses must agree with the total amount of
advance approved and given to the officer unless expenses exceed the amount of the advance;
 The Accountant General must be supplied with this statement within fourteen days after the cheques has been
produced with the receipt of the unspent portion of the accountable advance credited to the Department vote
item
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(2).Any money unaccounted for in respect of the advance, must be repaid by the officer concerned at the time of
submitting his statement of expenses unless directed otherwise by the Accountant General.

(3).If, at the end of thirty (30) days, the total of the advance has not been accounted for, as set out above, then it is to
be recovered from the salary or other emoluments due to the person concerned, at the rate of up to one-fifth (1/5) of
each gross salary payment or other emolument until the total amount outstanding is repaid.

(4). Each person receiving an accountable advance for overseas travel must sign a certificate to acknowledge that he
understands the conditions attached to the advance before receiving an Accountable advance cheque.

(5). An officer recommending or authorising a personal advance (other than a salary advance) shall ensure that it will
not cause the total of any monthly repayments to exceed one half of the gross monthly emoluments of the officer.

(6). Advances may be authorised for contract officers under the same conditions as those for pensionable officers,
except that the terms of repayment shall be so arranged as to ensure that the final repayment falls due no later than the
last complete month in which salary is due. Similar limitations shall apply to pensionable officers who are known to be
leaving the service.

(7).The Accountant General may require that a surety, collateral or security be supplied by the borrower.

(8).In wholly exceptional circumstances in which repayment of advances cannot be made at a due date application
shall be made to the authorising officer for the period of the advance to be extended. The Accountant General shall be
consulted in all such cases.

M.1.4. Payment
1.All vouchers relating to advances must indicate:-

(a) the number of the account and, if relevant, the name of the officer to whom the advance is chargeable;
(b) the nature of the advance;
(c) the terms of recovery;
(d) the authority for the advance or loan.

M.1.5. Recovery
1.It is the prime responsibility of the Secretary or such other accountable officer who has secured a personal advance
to ensure that due deductions of instalments from salary are made and that the terms under which the advance is made
are complied with, not withstanding the responsibilities of the Accountant General or sub-accountant in effecting
salary payments or passing vouchers for payment.

2.In the event of an officer to whom an advance has been granted transferring to another Ministry before recovery has
been fully effected, details of the advance including its purpose, amount and recoveries up to the date of transfer, shall
be advised by the officer’s previous Secretary to his new Secretary in writing.

3.When an officer leaves the service of Government for any reason the outstanding balance of any advance is
recoverable in full from his salary or by deductions from any retirement benefits or terminal payments for which the
officer is eligible. However, special arrangements may be made by the Accountant General.

3.When an officer with an outstanding loan or advance of any kind leaves the service and the balance cannot be
recovered the matter shall be reported to the Accountant General by the officer’s Secretary. The Accountant General
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shall direct the procedure to be taken and in the event that recovery may possibly be effected through obtaining
possession of any chattels or through the Courts he shall consult the Attorney-General.

4. On the death of an officer, the Secretary shall notify the Accountant General of any outstanding advances in the
officer’s name. The Accountant General shall then investigate the possibility of obtaining recovery from the estate of
the deceased officer.
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PART N: ADJUSTMENTS AND INTERDEPARTMENTAL

TRANSACTIONS

N.1. ADJUSTNMENTS AND TRANSFERS

1. A journal voucher (Accounting form 19) may be used to transfer money from one Government account to
another without recourse to an actual transfer of cash. Examples of transactions which can be effected
conveniently and expeditiously by journal voucher are adjustments of accounting errors and transfers of
deposits to revenue.

2.Journal vouchers shall clearly indicate the reason for the adjustment or transfer and shall furnish full
reference to the original debit or credit where applicable, quoting the receipt or payment voucher number and
the month of account. In the case of an adjustment a cross reference to the journal voucher shall be endorsed
upon the original and departmental copy of the voucher on which the original debit or credit was raised.

3.After acceptance of a journal voucher by the Accountant General accepted copies of the voucher shall be
returned to both creditor and debtor departments. When a journal voucher affects expenditure Heads an
appropriate entry shall be made in the vote ledger. Similarly when a revenue subhead is affected the necessary
entry shall be made in the departmental revenue records.

4. Submission of journal vouchers to the Accounting Division shall follow such procedures as may from time
to time be laid down by the Accountant General relevant to the nature of the adjustment or transfer being
processed.

N.2. FINANCIAL RECOVERIES BETWEEN DEPARTMENTS

(1) In general, financial recovery is to be made by a department for services rendered or stores supplied to
another department unless the Accountant General has directed either specifically or generally that no
recovery is to be made.

(2) In any other case where a department considers a recovery should not be made, the Accountant
General is to be consulted.

(3) The financial adjustments are to be made by cheque except when authorised by the Accountant
General to be made by journal voucher for transfer.

(4) The natural account are used to reflect inter-departmental transaction for ease of consolidation and
identification
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N.3. ADJUSTMENT OF CLAIMS BY JOURNAL VOUCHERS

(1) A journal voucher shall be prepared in triplicate. Each copy is to be marked as follows;

Original copy : “Debtor Department copy”

Duplicate : “Treasury copy”
Triplicate : “Departmental copy”

(2) The original and duplicate copies should be made and show the debtor department‟s order number and
the name and number of the Vote items to be debited and credited. Where there is more than one item
or accounts then they are to be listed in numerical order.

(3) The original copy is to be sent immediately to the debtor department. The duplicates are to be sent to
Treasury by the twenty-fifth of each month in a schedule affixed to a Schedule of transfer journal
vouchers.

(4) The journal voucher form shall be be certified by certifying officer in the issuing department.

(5) Treasury will post from the duplicate copy to its ledgers. Debtor departments should ensure that they
have received the original copies of all journal vouchers for transfers posted to their expenditure
items.

(6) Debtor departments are on receipt of the original copy, to certify the voucher, attach requisition copies
and file the journal vouchers for transfer in a manner suitable for Treasury and Audit inspection.
Departmental expenditure ledgers are to be posted from the original copies.

(7) In the event of dispute or the non-receipt of the original of a journal voucher for transfer, reversal
journal vouchers are not to be prepared but the matter is to be referred to Treasury for instructions.
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PART O: BANK ACCOUNTS AND CHEQUES

O.1. AUTHORITY FOR OPENING OF A BANK ACCOUNT

A Government bank account may be opened only with the authority of the Accountant General which
authority shall be subject to section 17 of the Public Finance Act. Each approved account shall be in the
official designation of the officer authorised to operate it.

O.2. APPLICATION TO OPEN A BANK ACCOUNT

1.When it is necessary that a Government bank account be opened the Secretary of the Ministry concerned
shall apply in writing to the Accountant General, stating:-
 where the account is to be opened,
 the purpose for which it is required; and
 by whom it is to be operated.

2.When the opening of the account has been authorised, the Accountant General shall notify the branch of the
bank concerned, and the Secretary concerned.

3.The Secretary shall make all necessary arrangements with the bank for the supply of specimen signatures
when the account is first opened and at any such subsequent times that there are changes in the signatories.

4.The Accountant General may direct as to the total maximum of public money that may be held in any bank
account authorised by him.

O.3. APPLICATION FOR AND MANAGEMENT OF CHEQUE BOOK

1. An application to a bank for the supply of a cheque book shall be signed by the officers authorised to
operate the account.

2. All unused cheque books shall be kept in a strong room or safe under the control of the officer who keeps
the bank account. Cheque books in use shall be locked in a safe or strong room overnight.

3.The counterfoils of all used cheque books shall be preserved for reference for three years, after which they
may be destroyed.

4.Unissued cheques shall be subject to periodic examination as a precaution against damage or loss.

O.4. MISSING A CHEQUE BOOK OR A CHEQUE

If at any time it is discovered that a cheque book or a cheque is missing, this shall be communicated immediately to
the bank concerned, to the Accountant General and the Auditor General and the outcome of the subsequent enquiries
is likewise reported.
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PART P: DEPOSIT

P.1. GUIDELINE
1. Any moneys, not being money raised or received for the purposes of the Government which may be deposited
with the Accountant General or with any other public officer authorised by the Accountant General or by regulations
made under Section 24 of the Public Finance Act, shall not form part of the Consolidated Fund and except as
provided otherwise by the Public Finance Act shall not be applied in any way for the purposes of Government.

2. The Minister of Finance may authorise under section 25 of the Public Fianace Act the investment of deposits in like
manner to that provided by section 6(1) of the Public Finance Act and shall be paid into the Consolidated Fund.

(3) Any interest or dividend received in respect of the deposits invested in accordance with paragraph (1) above shall
be credited to the account of any person entitled to such deposits.

(4). Officers handling savings bank transactions operated under the agency agreement with a bank shall bring their
receipts and payments to account under Deposits – (name of bank) Savings Bank – (place) vouching their transactions
as prescribed by the Accountant General and forwarding to him such returns as he may require.

(5). Officers conducting savings bank business shall adhere to such instructions as they may receive from the manager
of the bank in respect of returns to be rendered to the bank, and shall correspond direct with him on those aspects of
the business relating purely to the bank’s affairs.

P.2. APPROVAL FOR CREATING OF A DEPOSIT ACCOUNT

1. Accounting officer and revenue collectors shall not bring monies to account as a deposit unless a Deposit Account
has been opened with the Accountant General’s approval. The Accountant General shall cause to be issued from time
to time a Main Ledger Code which will contain references to the various authorised accounts under their respective
codes to which deposits may be accepted.
2. When authorising the opening of a deposit account the Accountant General shall designate an officer with the
responsibility for maintenance of the account and such officer shall be required to keep such records as the Accountant
General may direct. The controlling officer shall reconcile the balances in the deposit account with the Accounting
Division accounts as directed by the Accountant General which shall be not less frequently than every six months.
3. Generally deposits shall not be accepted unless fully justified. Money may not be accepted on deposit merely for
safe keeping. A deposit may not be accepted at one station for repayment at another station when the Post Office
facilities can be utilised to effect the transaction.

P.3. RECEIPT
All revenue receipts relating to deposits shall clearly indicate the name of the depositor, the nature of the transaction
and the code number of the below-the-line classification affected.
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P.4. PAYMENT
(1). Authorising officers before signing withdrawal vouchers shall satisfy themselves that the money is actually on
deposit.

(2).The vouchers shall be receipted by the payee.

(3). A deposit may not be withdrawn at a station other than that at which it was received without the prior approval of
the Accountant General.
(4). The withdrawal of an amount placed on deposit shall be supported, if possible, by the original receipt on which it
was brought to account. Withdrawal vouchers shall make reference to the date, amount, and number of receipt which
was issued when the money was placed on deposit, and to the date, amount, and number of payment voucher on which
any partial repayment was previously made.
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PART Q: REMITTANCE

Q.1. GUIDELINE
The disposition of the Government’s cash balances is the responsibility of the Accountant General and he will lay
down the maximum cash balances for each station. Accountable officer shall remit cash held in excess of the
maximum authorised balances to the Accountant General. All cheques and drafts forming part of an accountable
officer’s cash in hand will be remitted by him to the Accounting Division at the first opportunity after receipt.

Q.2. REMMITING OF FUND

(1).When funds are required by the accountable officers they shall obtain them from the Accountant General giving as
much notice as possible. No remittances shall be made between accountable officers without the specific authority of
the Accountant General.

(2).To enable the intended recipient of a remittance to look out for its safe arrival he must be advised by telegram of its
despatch by the remitter. Such telegrams shall not normally indicate the amount of the remittance, but shall be
sufficiently explicit to permit non-receipt or delay to be investigated. Similarly, receipt of remittances shall be
telegraphically acknowledged quoting the receipt number under which the remittance has been brought to account. If
such acknowledgement is not received promptly the remitting officer must institute immediate enquiry by telegram.

3. Cheques and drafts shall be remitted to the Accounting Division from outstations by registered mail. Similarly, use
shall be made of registered mail facilities to remit currency notes between accountable officers and the Accounting
Division and vice versa. Specie shall be remitted by safe-hand of a responsible public officer or by safe-hand of an
aircraft’s or vessel’s captain but not only with the prior approval of the Accountant General and subject to such
security arrangements as he may wish to make. In particular cases when it is more convenient to do so cheques, drafts
and currency notes may also be remitted by safe-hand, subject to the Accountant General’s prior approval.

Q.3. ACCOUNTING FOR REMITTANCE

(1). Every remittance shall be made up by two officers and shall be securely packed and sealed in their presence. The
accompanying payment voucher shall be certified in the following manner and signed by both officers:- “We certify
that we have checked this remittance and found it to be ……….dollars and ………… cents”.

(2).On receipt of the remittance two officers, as arranged by the officer to whom the remittance is addressed or in his
absence the officer in charge, shall unseal and check the contents.

(3). The remitting office shall prepare a payment voucher (Accounting form 16) in duplicate showing on it full details
of all cheques and drafts, the denomination of notes and coin, and a general description of any other ‘cash’ making up
the remittance. He will pass the transaction through his cash book and the duplicate copy of the payment voucher shall
be forwarded to the receiving office with the remittance. The original voucher shall be held by the remitter in support
of the cash book entry.

(4).After the remittance has been checked the receiving officer shall issue a revenue receipt for the amount of the
remittance. In the case of remittances from the Accounting Division to accountable officers, the accountable officer
shall return the receipt to the Accountant General. However, in the case of remittances to the Accounting Division the
revenue receipt shall be retained in the Accounting Division for incorporation in the Accountable officer ‘s monthly
accounts, where it shall be submitted to the original voucher.
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(5).The Accountant General and each accountable officer shall maintain a remittance register in which shall be shown
in respect of each outward remittance, in column form the following detail:-

Destination Date Payment Vr. Amount Ref. No. of Date of Revenue

No. advice Acknow- Receipt
telegram ledgement reference
telegram

These particulars shall be entered up immediately upon the issue or receipt of the documents concerned.

(6).The Accountant General or accountable officer shall regularly inspect the remittance registers taking immediate
steps to investigate any apparent delay in the receipt of any sum emitted, or in the receipt of documents of
acknowledgement and acquittance.

Q.4. LOSS OF REMITTANCE AND DISCREPANCY

(1).The officer despatching a remittance shall be responsible for any loss arising from the inclusion in the remittance
of any cheque or draft which is not capable of being realised or currency note or coin not specified in the Financila
Regulation and TOM.

(2). Any discrepancy in a remittance received by an accountable officer will be reported immediately by telegram to
the Accountant General. The Accountant General will likewise advise the remitter of any discrepancy in remittances
received in the Accounting Division. The remittances shall be brought to account in full in the cash book, even if there
is a shortage in the amount received. A payment voucher shall be raised and entered in the cash book to cover a
shortage, charged to an advance account under the title of the remitting accountable officer or the Accountant General
as the case may be. If there is a surplus it shall be brought to account as revenue.

Q.5. INSURANCE OF REMITTANCE

Remittances within the Republic shall be insured under arrangements made by the Accountant General. Accountbale
officer shall submit a return to the Accountant General by 4 th January each year of the currency notes and coin they
remitted or carried during the preceding year.
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PART R: LOSSES OF PUBLIC FUNDS AND BOARD ENQUIRY

R.1. GUIDELINES
1.Every public officer is required to bring to the notice of his superior officer, without delay, any suspected loss,
shortage, irregularity, fraud or theft affecting the funds of Government or for which Government is responsible, other
than petty losses not exceeding ten dollars which are established beyond doubt to have been due to minor errors and
not negligence, fraud or theft. The responsibility of an officer shall not be affected should the sum be made good by
another officer.

2. A shortage in a remittance shall be dealt with in accordance with applicable regulations. A shortage found by a
Board of Survey or inspecting officer when checking the cash or stamps in an accountable officer or Post Office shall
be dealt with in accordance with applicable regulations. In either case if the loss exceeds ten dollars, action shall also
be taken as laid down in this TOM.

R.2. REPORTING OF LOSSES

1. In the case of all shortages or losses other than those under ten dollars, action shall be taken as follows by the officer
discovering the loss:-

(a) immediately report the matter to the Police – an officer in doubt should err on the side of suspicion;

(b) if there is any suspicion that the loss was due to a safe or strong room key having been lost, action shall be
taken immediately in accordance with applicable regulation concerning the loss of keys;

(c) immediately send a brief written report to the Accountant General with a copy to his Secretary and the
Auditor General;

(d) as soon as possible send a detailed report to his Secretary; if there is likely to be a delay in obtaining full
details, an interim report shall be sent within fourteen days of the discovery of the loss.

R.3. ACTION BY MINISRTY

(1).On receiving information concerning a loss of funds in his Ministry, a Secretary shall:-

(a) ensure that the case is fully investigated, or at the request of the Accountant General ask that a Board
of Enquiry be convened;

(b) forward a report without delay to the Accountant General, copied to the Auditor General which shall
contain a recommendation as to whether or not a Board of Enquiry is considered necessary;

(c) when there has been a prosecution, inform the Accountant General, and Auditor General of the verdict
of the court;

(d) where appropriate initiate disciplinary action in accordance with General Orders need to be changed to
what being used (e.g NCS). to be confirmed that where criminal proceedings are instituted such action
should await the outcome of those proceedings; it should be noted that an acquittal on a criminal
charge does not rule out disciplinary action on grounds that those covered by the criminal charge, such
as negligence.
 | 186

(2).In cases where the initial enquiries clearly indicate that an officer may be guilty of a criminal offence or gross
negligence warranting dismissal his Secretary shall relieve him of all his financial duties and forthwith refer the matter
to the Establishment Secretary need to be changed/corrected, which Secretary with a recommendation whether the
officer should be interdicted under General Orders need interpretation. The Accountant General and the Auditor
General shall be kept informed of any action taken under this regulation.

R.4. ACTION BY MINISTRY OF FINANCE

Boards of Enquiry shall be appointed by the Secretary for Finance unless where the Financial Secretary has delegated
the authority to appoint a Board on his behalf. A board shall consist of two or, if possible, three officers, including the
president. The president will generally be a senior officer of a Ministry other than that in which the loss occurred.
Where possible the Board shall contain an officer with accounting experience. Officers of the Office of the Auditor
General shall not be appointed to a Board.

R.5. CONVENING OF BOARD OF ENQUIRY

1.A Board of Enquiry shall meet at times and places most suitable for an enquiry, and shall be held as soon as possible.

2.If there is a likelihood that criminal proceedings will be instituted against an officer the Board shall not examine him.
Recommendations for disciplinary proceedings against him will not be made until the conclusion of any criminal
proceedings. Subject to this limitation and the effect it may have on an assessment of the responsibility of any other
officer involved, the Board should submit as complete a report as it can as soon as possible, without waiting for
criminal proceedings to be concluded. It is important that the Accountant General should be placed in possession of all
the facts of the case in order that any weakness in the accounting system which may be revealed may be corrected
immediately in order to prevent further losses.

3. A report of a Secretary or of a Board of Enquiry shall be prepared giving specific information in respect of, and
specific answers to, each of the following questions:-

(a) the name of the Ministry or accountable officer;

(b) the office or place where the loss, shortage or such other irregularity occurred;

(c) the date of the occurrence;

(d) the amount involved in the loss, and whether or not it has been wholly or partly made good;

(e) the name of the officer immediately responsible for the custody of the cash or stamps etc. which have
been lost or stolen, and the length of time they have been in his custody;

(f) the precise circumstances in which the loss, shortage or theft arose;

(g) whether the loss, shortage or theft arose directly or indirectly from the negligence of any officer;

(h) what arrangements were in existence for safeguarding the cash or stamps etc. and whether these
arrangements had been regularly and properly carried out;

(i) what arrangements were in existence for the periodic checking and paying in of cash or stamps etc.
held by the officer concerned and whether these arrangements had been regularly carried out;

(j) when the last pay-in took place, and when and by whom a detailed check was last made;
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(k) what officer or officers have been or should be called upon to show cause why he or they should not
be required to make good the whole or part of the loss involved, giving full and specific reasons for
the recommendations;

(l) if the answer to (k) is in the negative, full and specific reasons why it is not considered that any officer
or officers should be required to make good the loss in whole or in part shall be given;

(m) what additional precautions, if any, are proposed to prevent a recurrence of the loss, shortage or theft

(n) whether the matter has been reported to the Police, and if so, on what date (a copy of the Police report
or Court judgement shall be attached, if available).

(4).Three copies of this report shall be submitted to the Accountant General and a copy forwarded to the Auditor
General. Each question shall be set out in full and an answer given against it.

R.6. ACTION BY MINISTRY OF FINANCE

(1).The Accountant General shall take action as follows on any loss reported to him:-

(a) immediately issue instructions for any necessary accounting action;

(b) take steps to correct any weakness in the accounting systems revealed by the case;
(c) if either disciplinary action or the write-off of any loss or part of it is to be recommended, submit the
papers on the case with his comments and recommendations to the Financial Secretary for decision;
and
(d) inform the Auditor General of any action taken under (a) to (c).

(2). The Financial Secretary will convey his decision on any reports submitted to him under this section to the
Secretary concerned, the Accountant General and the Auditor General.
(3). Prompt action at all stages is essential. In the event of a loss that might have been prevented through prompt action
in respect of an earlier loss, any officer responsible for undue delay may be held pecuniarily responsible in whole or in
part for the later loss.

R.7. PENALITIES AND SURCHARGES

Failure to comply with the Finacial Regulations and Oprational Manual would be deemed a breach of the Public
Finance (Control and Audit) Act and, in appropriate cases, be regarded as grounds for disciplinary action, including
suspension or dismissal. Violations may be referred to the Attorney General for civil or criminal action, as may be
appropriate.

PART S: BOARDS OF SURVEY: CASH AND STAMP

S.1. GUIDELINE
1.Boards of Survey will be held after the close of business on the last working day of each financial year and before
the opening day of business on the first day of the new financial year to examine the cash, and bank balances held by
the Accountant General, accountable officers, postal officers and any other public officers in possession of cash
excepting special imprest holders who are on duty outside the Republic .
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2. Boards will also be opened at irregular intervals during the year to hold surprise surveys of the cash, bank balances,
stamps etc. in the custody of the Accountant General and other public officers. The appointment of surprise Boards
must be kept confidential.

(3).The Accountant General may also arrange for the inspection of the cash, stamps etc. of any accountable officer.

S.2. BOARD MEMBERS

(1).Boards will be appointed:-

(a). in Tarawa and for surprise Boards by the Secretary for Finance

(b).in out-stations by the Clerk to Island Councils

(2).Officers appointed to a Board of Survey must report immediately to the convening officer if they are unable to
serve.
(3). A Board should consist, if possible, of three officers (including the president) and never less than two. The officer
in charge of the cash must be present when the Board is being held but must not serve on the Board. Officers of the
Office of the Auditor General shall not be appointed to a Board.

S.3. OPERATION
(1).No cash transaction may take place between the close of business at the end of the financial year and the meeting
of the annual Board. On other occasions, unless public business will be disrupted, cash transaction must cease until the
Board or inspecting officer has completed the survey. In cases where it is necessary to allow continuation of public
business the Board or inspecting officer shall, before checking the cash, make satisfactory arrangements to ensure that
the current day’s transactions are completely separated from the previous balances e.g. by the issue of a working cash
balance. Should the verification of cash last more than one day, the unverified portion must remain under the joint
control of the Board and the officer-in-charge of the cash until the survey is completed.

(2).The Board will ensure that the cash book is ruled off and will initial the balances which they check. These balances
will not be altered under any circumstances except with the written approval of the Board.
(3). The annual Board of Survey is required to check the cash book and register of stamps, as applicable, by casting
entries for the month and verifying the balances with the actual cash and stamps etc. on hand. The balance brought
forward at the commencement of the month shall also be checked by reference to the cash book closing balance of the
previous month. The cash book and register of stamps shall be certified by the Board. If a bank account is kept, a
certificate of the balance shall be obtained from the bank and a statement reconciling the balance in the bank with the
bank balance shown in the cash book on the last day of the year shall be obtained from the officer operating the bank
account. The cash book should not be closed off until such reconciliation is complete and all adjustments taken up.
The Board of Survey shall:

(a) verify the opening and closing balance shown on the reconciliation statement by reference to the bank
statement and cash book respectively;

(b) verify the castings of the reconciliation statement;

(c) make a test check of entries in the cash book against the supporting vouchers;
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(4) Surprise Boards shall be subject to such conditions and shall carry out such verification and checks as may be
detailed on their appointment.
(5). All currency notes other than those in unopened packages with bank seals intact must be counted in detail and the
bundles sealed, labelled, signed and dated by the Board. If the seals are intact and the contents clearly marked, specie
in mint boxes or bank-sealed bags need not be counted in detail. All stamps must be counted.
(6). Any surplus discovered by a Board of Survey or an inspecting officer must be brought to account in the cash book
as a credit to revenue. Any shortage must be made good by the responsible officer or, with the approval of the
Accountant General, charged as an advance against him pending investigation. In the case of a discrepancy in the
stamp stocks, adjustment shall also be made to the register of stamps, as appropriate. A shortage over ten dollars must
be reported immediately to the Accountant General and the Auditor General.

(7). On completion of a Board of Survey the president shall submit a report (Accounting form 21) in duplicate to the
officer who convened the Board. A copy of the report will be forwarded to the Accountant General and to the Auditor
General. The report shall be signed by all members of the Board.
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PART T: SANCTION AGAINST PUBLIC OFFICERS

T.1. GUIDELINES
(1).Any public officer who will be found guilty of mishandling of public funds will face discplianry sanctions under
section 47(1) of the Public Finance Act.
(2). A public officer is considered to have mishandled public funds under specific circumstances.

T.2. CIRCUMSTANCES FOR MISHANDLING OF PUBLIC FUNDS

(1) Any public officer who –

(a) fails without just cause to collect any moneys owed to the Government with the collection of which he is
charged;
(b) is responsible for any improper payment of public moneys (including any payment not duly vouched);
(c) is guilty of negligence or misconduct in connection with the destruction, damage, or loss of any public
moneys, stamps, securities, stores, or other Government property;
(d) is responsible for causing any financial loss to the Government through failure to obey any order or
instruction properly given to him; or
(e) fails to account for an imprest issued to him within the time period as laid down in the relevant regulation,
(f) shall be guilty of a violation of section D.3 of the National Conditions of Service (or such other standard as
may from time to time be in force) and of a breach of the public trust.

T.3. NOTIFICATION PROCEDURES

(1).(a) If the Minister has reason to believe that a public officer has acted in such a manner as to be guilty of an
offence under paragraph (1) above, then he shall so notify the officer and advise him of his potential liability to
the Government under this section.

(b). The notice under this subsection shall be in writing and shall –

i. describe with particularly the act that is the subject of the notice;

ii. demand an explanation in writing within 30 days after the date on which the public officer receives
the notice;

iii. state that, in the absence of an exculpatory explanation satisfactory to the Minister, the public officer
will be required to repay to the
iv. Government the amount involved and that such repayment may be effected by surcharge of any
salary or other payment made by the Government to such officer; and

v. describe the public officer’s right to appeal any decision made by the Minister to the High Court.

(c) A Notice will refer to speicfic sections in the Public Finance Act possibly violated by the
public officer such as sections 47(1)(a-e)

(2). (a) If the Minister fails to receive a satisfactory explanation from the public officer notified under subsection (2)
within 30 days after such officer received notice under such subsection, then he shall commence recovery of the
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amount involved by directing such sums as are necessary to be withheld from such officer’s salary or other amounts
payable to him by the Government.

(b).If the individual concerned is no longer a public officer and is not receiving a salary or other sums from the
government, then the Minister–

(i).shall enter into an agreement with such former officer to repay the amount involved in such
instalments and over such period of time as may be appropriate; and

(ii). may require any such agreement to be accompanied by such security, guarantees, or other
assurances of payment as he believes to be appropriate.

(c). If –
(i).a former public officer refuses to enter into an agreement under paragraph (b); or

(ii).a public officer ceases to be a public officer before the amount involved has been recovered and
refuses to enter into such an agreement,

then the Minister may bring an action against such former officer in any court of competent jurisdiction
on behalf of the Government to recover the amount owed.

(3). (a) The Minister may waive, terminate, reduce, or refund any amounts recoverable or recovered under this
section whenever it appears to him that
-
(i) the recovery was made by mistake or is not justified by the circumstances, or

(ii). the loss, destruction, or damage to government property was not due entirely to the negligence or
misconduct of the public officer or former public officer".

T.4. DEFINITION OF “PUBLIC OFFICER”

"Public officer" is defined in this case that includes a director or member of the Board or committee of a
Government owned company, corporation, special fund and other body or authority established under any
provision of any law and includes also other officers and employees of the same.
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PART U: COPRA PAYMENT

U.1. GUIDELINE
(1). The Government is providing a subsidy for farmers producing dried copra of $2 per ton on top of the market
value. The copra subsidy is paying at the central Treasury and the Treasurers at the outer islands. The payment
procedure of copra subsidy at both Central Treasury and State Treasurers is set out in this Treasury Operational
Manual.

(2). The Island Council Clerk is involved in overseeing the compliance with the copra subsidy at the outer islands.

(3). Copra farmers sell their dried copra to the Kiribati Copra Development Ltd (KCDL).

U. 2. PAYMENT PROCEDURE AT TARAWA

Action by KCDL
 Receive the Farmers dried copra, check and weigh them.
 Record the farmers copra and pay them at the going price including the $2 per ton government subsidy.
 Prepare the ‘Copra Subsidy Claim’ for reimbursement by Treasury of the payment of the Government subsidy
to the farmers.
 Submit the ‘Copra Subsidy Claim’ weekly to the Treasury Examination Unit for payment.

Action by Treasury Copra Unit

 issuance of Departmental Warrant (DW) to all Treasurers on copra fund
 checking of CPRs (Copra Purchase Returns)
 posting of individual payments made on each islands to copra cutters into the copra database
 reconciling of copra payment against General Ledger

Action by Treasurer on copra payment

 Receive CPR from Copra coordinator
 Check the claim if in order then process payment accordingly
 Enter into the cashbook
 Send returns on monthly basis to Treasury

Action by Treasury Examination Unit duties

 Reviewing of state fund monthly returns sent by island treasurers
 Post state fund returns into the state fund database and into the main General
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U. 3. OPERATIONAL AND PAYMENT PROCEDURE AT OUTER

ISLANDS
1. The Island Council Clerk is obligated to ensure that the procedure listed below must be complied with:

a) All Farmers must be registered with the Copra Coordinator and be issued with a registration number.
b) Farmers must ensure to process their copra according to the dryness and other agreed quality standard
c) Farmers must pack their copra in the bag and take them to the KCDL on the scheduled weighing day

U.3.1. Copra Weighing Procedure

1) Prior to weighing copra, Farmers must empty their bags and be inspected by the Copra Coordinator (CC) and
Copra Weigher (CW).

2) Weighing of copra must commence only upon the presence of the CC and CW and this must be indicated by
signatures of both CC and CW on the proper Copra Purchase Return (CPR).

3) The CC and CW must ensure that copra which meets the quality standard must be:

4) re-packed,
5) clearly marked with the farmer’s registration number,
6) labeled as being passed inspection,
7) weighed and
8) recorded on the spot on the Proper CPR only

9) Copra that does not meet the quality standard must be rejected and Farmers with such copra may be punished
if proved to be dishonest.

10) Exercise books or other piece of paper must not be used to record names of farmers and the weight of copra.

11) The name of the Farmer must be written in full, that is, Given Name and Surname together with his
registration number on the CPR. The farmer must ensure that his/her weight is correct prior signing the CPR.

12) Once the CPR has been duly completed, farmers can then receive their payment by signing against their names
in the CPR or collect their payment when ready from the Island Council Treasurer.

13) All payments for copra must be paid out to farmers at the Council Office.

14) Payment to Farmers at Cooperative Society must not be made using the imprest system, except Abaiang,
Abemama, Butaritari , ETC, Makin, Makin, Aranuka, Nonouti, TabNorth

15) Farmers must give a written authorization to anyone in order for that person to be allowed to collect copra
payment on their behalf

16) The CC must carry out the stock take on copra bags weighed the day before prior to the weighing of copra the
next day, meaning the copra stock take must be carried out by the CC and properly recorded on the stock take
sheet prior to weighing of copra for that day.

17) Weighing and payment of copra to Farmers must start from 9am to 4pm each day, Monday to Friday.
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18) The Island Treasurer must ensure that the above procedures are strictly adhered to and to ensure IC, CW and
farmers are fully aware of the importance of complying with the above procedures.
U.3.2. Duties of Copra Societies.
1) Representatives from the Copra Society must re-pack copra into the specified copra bags referred to in 6 (a)
above after being inspected.
2) Bags specified for copra must be kept and stored by the Copra Society and they must not be issued out to
Farmers.
3) The Coop Society must ensure that the copra shed is securely locked and the CC must be solely responsible
for keeping the keys for the Copra shed.
4) Copra Societies must ensure that copra is packed in a specified copra bags and such copra bags must be
readily available.
5) A suitable place for emptying copra referred to in (4) above must be prepared by the Copra Society.
6) The Copra Society must ensure that copra referred to in (7) above must be completely destroyed by burning
them.

7) The Coop Societies may collect and distribute copra funds to Farmers, if they are authorized by Farmers via a
written authority as in 13 above
8) The CC must carry out an independent copra stock take and properly recorded on the stock sheet on a daily
basis and certified by the Boboti.
9) Copra societies must ensure that no loose copra is kept inside the copra shed.
10) The Coop Societies will be penalized if they do not comply with the above procedures (1 to 9)

U.4. PROCEDURES FOR THE TOP-UP (REPLENISHMENT) OF COPRA

FUND AT OUTER ISLAND COUNCILS(TREASURERS ONLY)
It is the responsibility of the Island Council Clerk to ensure copra fund are always available for Farmers. Prior to
sending request for top-up of Copra fund, the Island Treasurer must ensure that:

1) Upon receipt of Department Warrant (DW), the Island Treasurer must enter the DW as a receipt in the Vote
book

2) The payment voucher issued by the Treasurer and supported by Copra Purchase Returns must be recorded in
the vote book

3) If the remaining copra fund is less than one third of the ceiling, replenishment of the Copra Fund must be
requested by:

4) The Island Treasurer must send request via email to the Ministry of Economic, Finance and Development
(MEFD) for DW and Treasury Copra Unit (MFED) must instantly send a DW valued at 50% of the top-up
required.

5) The remaining 50% will be sent upon receiving Copra Purchase return, including supporting documents such
as:

 DW Return form
 CPR form
 PVs
 Stock take Form and
 Copy of Vote book
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6) The Treasurer must fill in the Departmental Warrant Return form by the followings:

7) Details of each transactions or payment vouchers such as:

 Date of Transactions
 Reason for payment
 Reference type (DW, PV or CPR)
 Copra purchase details (weight in Kgs and amount paid)
 CPR details
 Imprest detail (Value of Imprest taken, Amount retired and RR number)

8) Standard information

 Pre-stamped serial No.

 Relevant DW No. being acquitted
 Date or End of Month
 Name of Island Council
 Name of Treasurer and dated signature
 Dated signature for processing /checking by island Council Staff and Assistant Treasurer.

9) Once completed, the Treasurer must close off the DW Return form at end of each month

10) The Treasurer in ensuring that the DW Return is fully supported, a stock take form must be filled in by
carrying out the followings:

11) Inform the IC well in advance to carry out a stock take on copra on the same closing date with the DW return
form mentioned in (5) above.

12) Recording of copra stock take result in the in the stock take form

13) Include the stock take form in his submission for top-up.

14) The DW Return form must be in exact duplicate with the originals set mailed to MEFD and the duplicates set
mailed to the Kiribati Copra Development Ltd (KCDL) using Registered mail.

15) Fully complying with the above procedures 1 to 7 will lead to final approval by Secretary MFED and the
release of the DW for the remaining 50% of the required top-up by Treasury Copra Unit as mentioned in 3(b)
above.

PART V : FREGHT PAYMENT

V.1. GUIDELINE
1. Government is providing a freight subsidy for shipment of imported goods by importers to outer islands for
commercial purposes only.
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2. The freight subsidy for goods destined to outer islands is paid out of the import levy that importers paid for
their imported goods.
3. The freight subsidy involves the cost of the freight of the cargo to the Islands (administered by Treasury
Freight Unit) and the transportation cost from the wharf at the islands to the place of the owner (administered
by the Treasurers).

V.2. PROCEDURE FOR PAYMENT

Action by Claimant for payment of Freight
1) Prepare the Freight payment claim form for paying of the freight shipment subsidy.
2) Attach all the required supporting documents to the freight Claim form and ensure accuracy and completeness,
which include:
 Bill of lading
 Import levy payment receipt
 Other documents required in the Import Levy (Amendment) Regulation, section 7.5.
3) Forward the completed freight Claim payment Form with the required supporting documents to the Treasury
Freight Unit

Action by Treasury Freight Unit

1) Receive and register the Freight payment Claim form from the registered business importer
2) Check the Freight Claim Form to ensure its accuracy and completeness with the relevant information required
to support the reimbursement payment
3) Once completed with checking then prepare the payment voucher
4) Any query is conveyed to the relevant individual or organization.
5) The approved payment voucher is forwarded to the Payment Unit to pay the claimant in his preferred payment
method. Cheque payment is issued by the Payment Unit whereas the direct payment to bank account is
prepared and carried out by the Transactive unit.

V.3. ACTION AT OUTER ISLANDS

Action by the registered businessman
 Fill in the “Reimbursement of Transportation Cost Requisition Form” (RTCR)
 Submit the RTCR with the required supporting documents to Treasurer.

Action by Treasurer
 Receive the RTCR from the registered businessman
 Check RTCR and if satisfied prepare the payment voucher
 Pay the registered payment
 Record the payment voucher in the cash book.

PART W: DELMO PAYMENT

W.1. GUIDELINE
The Government is providing the service for the public of facilitating the transferring of their money between Tarawa
and the outer islands and vice versa through the Telmo Money Transfer services.
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W.2. PROCEDURES
(A) SENDING TELMO MONEY (Telegraphic Money Transfer) TO OUTER ISLANDS

Action by Customer, Post Office and Amalgamated Telecommunication Holding Ltd (ATH)
Customer wanting to send money to someone at the outer islands goes to the Post Office and fill in the required from
with the relevant details and pays the amount of money to be transmitted to the Post Office.

Action by Post Office:

 receives the money from customer and will issue receipt in return acknowledging money to be sent to outer
islands
 prepares the prescribed PF 25 form stating the money received, and
 customer takes the PF 25 form to ATH.

Action by ATH:
 receives the PF 25 form from ATH delivered by customer concerned
 prepares telegram for money transfer with required details
 send the telegram to the Radio Operator at the relevant islands
 provide original copy of the receipt for payment of the commission to customer

Action by Radio Operator and Treasurer at Outer Islands

 Radio Operator receives the telegram and send to the Treasurer
 Treasure fill in the PF 27 and prepare the payment voucher and pay the customer
 Record payment in the cash book and included in the monthly return to Treasury

(B) SENDING TELMO MONEY FROM OUTER ISLANDS

Action by Customer, Treasurer and Radio Operator:

 Pays the money to be transferred to the Treasurer
 Treasurer receives the customer money, issues receipt in return and prepares PF 25 and forward it to the Radio
Operator
 Radio Operator prepares and sends telegram with required details to ATH in Tarawa.

Action by ATH at Tarawa

 Receives telegram and passes it on to Post Office

Action by Post Office

 Receives telegram from ATH
 Pays customer for the telegram amount of $500 and less.
 Prepares the form for PF 27 for telegram amount greater than $500
 submits PF 27 to Treasury Examination Unit for payment to customer.

Action by Treasury Examination Unit

 receives PF 27 from Post Office
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 check PF 27 for accuracy and completeness in terms of the required supporting documents such as a copy
of telegram.
 if satisfied with checking then prepare the payment voucher (PV)
 forward PV with supporting documents to the Payment Unit and pay the customer.
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PART X: ACCOUNTING FOR STATE FUND

X.1. DUTIES AND RESPONSIBILITIES OF STATE FUNDS

(1).Because of geographical remoteness from, and the difficulties of communication with South Tarawa, it is necessary
to maintain special arrangements for State Funds on outer islands for:
a) The authorization and payment of expenses
b) The receipt of revenues
c) Keeping accounts
(2).This is achieved by Treasurers to Local Government Councils holding and running sub-accounts.
(3).The Treasurer to the Local Government Council on each outer island was used to be an employee of the Ministry
of Home Affairs, but that was changed to come under the authority of the Accountant General in 2019. However, since
both the Clerk and the Treasurer also have duties to the local Government Council for council affairs and also to the
Ministry of Finance and Economic Planning as accountable officers for the State fund, their lines of responsibility can
at time appear to be quite complex.

X.2.RESPONSIBILITIES OF CENTRAL GOVERNMENT EMPLOYEES

ON OUTER ISLANDS.
(1). An employee of MHARD, the Clerk is directly answerable to the Secretary of that Ministry. However, in addition,
he or she is also responsible for providing a service to the Local Government Council. Included in these duties, as
specified by the Ministry of Home Affairs and Rural Development are:
a) Providing legal and financial advice to the council
b) Providing a secretariat service for council meetings, eg, the preparation of agendas and minutes
c) Administration of Local Government services
d) Control and administration of Local Government staff
e) Preparation of the Local Government budget
f) Control of Local Governments stores
g) Providing a link between the Local Government Council and Central Government.

(2).The Clerk’s Central Government duties include:

a) Managing all centrally funded development projects which fall under the responsibility of MHARD
on the island.
b) As the senior accountable officer on the island, to authorize all locally incurred expenditure for which
a Department Warrant has been provided to him or her by the Secretary MHARD or an Accounting
Officer in another ministry;
c) Supervising the activities of the Treasure and maintaining an oversight over the accounts prepared.
d) Investigating any lack of discipline or inefficiency of resident Central Government employees, as
identified by the Local Government Council, and for arranging for a report to be sent by the council
conveying any shortcomings in performance to their parent ministries.
(3).Clerks also observe the following principles:
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a) Since one of the main purposes of their presence on the Island is to provide a service to the Local
Government Council and to the local community, they should always seek to maintain an efficient and
courteous service and to do all in their power to ensure the smoothing running of Local Government.
b) However, they must all times strictly observe their responsibilities as accountable officers. In
particular, they must ensure that all expenditure of State funds is authorized and controlled in
accordance with Financial Regulations and any other instructions issued by the Minister of Finance
and Economic Planning and Accountant General. They should ensure that money is not wasted and
that is spent on the purpose it was authorized for. They should refuse to authorize any expenditure
from State Funds which is properly a change against Local Government funds.

X.3. ACCOUNTING RESPONSIBILITIES

(1). The Treasurers main duties in relation to the State fund are:
a) The processing of transactions relating to revenue and expenditure on that funds
b) The keeping of accounts to record those transactions
c) The custody and safeguarding of the fund
(2). Clerk is responsible for authorizing all expenditure against State funds, both for development projects and also in
respect of the recurrent budget for items for which the Secretary MHARD is the accounting officer. For other Central
Government expenditure on the island, the responsibility for authorizing expenditure lies with the Ministry concerned,
expect where the Accounting Officer of the other ministry has provided a Departmental Warrant to the Clerk.
Treasurers must not make any payment from State funds unless they are first authorized by the officer concerned.
(3). The maintenance of the sub-account is the direct responsibility of the Treasurer although the Clerk will supervise
and check from time to time. The responsibility for safeguarding the funds themselves lies personally with the
Treasurer and he or she must at all times ensure that these are properly secure. In particular, the Treasurer is
responsible for ensuring that all moneys are kept securely in a safe and that he or she has personal custody of the keys
to that safe at all times. Under no circumstance should those keys be given to another person unless proper
arrangements are made for a formal handover.
(4). Under no circumstances will a Treasurer use State funds or allow any other person to use those funds for purposes
other than those which have been authorized.
(5). The scope for conflicts of interest also exists between a Treasurer’s State fund and Local Government duties and,
on occasions, he or she may be asked to undertake a course of action which would run contrary to those duties. In such
case, Treasurers (like Clerks) should remember that their accountable officer duties are imposed upon them by the
laws of Kiribati and that they will be held personally and, in some cases, pecuniary responsible for any breach of those
duties.

(6).Where any such case of conflict arises, the Treasurer will seek the advice of the Clerk who will act in accordance
with this guideline.
(7).Should any case arise where the Treasurer feels he or she is being required by the Clerk to make payment for a
transaction which he or she believes to be incorrect, an attempt should first be made to reach an amicable solution to
the dispute. Should this not prove possible and if the Treasurer still believer that they payment would be improper, he
or she should, in the last resort, report the matter to the Secretary for Home Affairs and Rural Development, advising
the Clerk of this action.
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(8). Other Central Government Employees on Outer Islands. Because of the need to decentralize certain tasks, other
ministries often employ officers on outer islands (eg, Fisheries Officers). These officers, if they are required to incur
expenditure on the island, will be appointed as accountable officers by their parent ministry. In such cases, they will be
delegated with the responsibility of authorizing expenditure against the Head of their parent ministry or against a
development project controlled by that ministry. In authorizing such expenditure, they will follow the general
principles for accountable officers as specified in the Financial Regulation and the Treasury Operational Manual.
(9).As with Clerks and Treasurers, conflicts of interest may arise on occasions. In such cases, the accountable officer
employed by another ministry should observe the same principles as specified in above. They should seek to resolve
such conflicts amicable without compromising their accountable officer duties. Where this proves impossible, they
should seek the advice of their parent ministry in attempting to resolve the dispute. The advice of the Clerk should also
be sought.
(10). As with Clerks and Treasurers, other accountable officers should always remember that they have certain duties
imposed upon them by law and that they will be held personally (and possibly pecuniarily) responsible for any break
of those duties.

X.4. AUDIT
(1). It is the responsibility of accountable officers to ensure that there are sound systems of internal control and that
regulations are observed. However, all accountable officers should be aware that their actions are subject to
examination or audit by a number of agencies.
(2).In particular, State fund sub-accounts, Bank Agency and Telmo transactions are subject to regular monthly
examination by the Ministry of Finance and Economic Planning. In addition, the Controller Postal Services examines
Post Office transactions or a regular basis.
(3).Over and above this routine examination, arrangements exit for audit of accounts and related matters. These are
carried out on a regular basis by the MHARD travelling audit team. State fund accounts are subject to surprise
inspections from time to time by the MDFD internal audit section. Furthermore, the Auditor General has the power to
examine any aspect of Government financial and accounting arrangements as he sees fit.
(4). All accountable officers on outer islands should always be ready to assist in any questions raised by any examining
or audit agency. They should reply promptly to any letter sent to them.
(5).It will ease the task of accountable officers and the audit and examining agencies if tight control is exercised over
financial and accounting matter and regulations and procedures are followed correctly. As the senior accountable
officer on an outer island, the Clerk has a particular important role to play in this respect.

X.5. STATE FUND SUB-ACCOUNTS ON OUTER ISLANDS

1. A State Fund sub-account is maintained on each outer island. All moneys received into that account
are the property of the Central Government of Kiribati and can only be paid out on properly
authorized purposes.

X.6. RECEIPTS INTO THE STATE FUND SUB-ACCOUNTS

(1). Money is paid into the State Fund sub-account in 2 main ways ie:
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a) By receipts from individuals and organizations the island in respect of sums due to Central
Government or moneys received temporarily under the Bank Agency and Telmo.
b) By money advanced by Treasury. Such advances are known as Remittances Between Chests (RBCs).

X.7. EXPENDITURE PAID OUT OF THE STATE FUND SUB-ACCOUNT

(1). Expenditure is paid out of the State Fund sub-account to meet properly authorized commitments. These
commitments are in respect of:
a) Recurrent Expenditure in respect of the Head for which the Secretary MHARD is the accounting
officer.
b) Recurrent Expenditure in respect of a Head for which the Secretary of another ministry is the
accounting officer
c) Expenditure in respect of development projects
d) Expenditure on Below the Line Accounts.
1.1 In addition, payments are also made out of the State Fund sub-account in respect of the Bank Agency and
Telmos.

X.8. FORM OF ACCOUNT

Treasurers are required to maintain an account in the form of a cash book.

X.9. REMITTANCES BETWEEN CHESTS (RBCs)

(1). Remittances between chests (RBCs) relate to the procedure by which cash is sent to outer islands from Treasury,
MEFD or returned to Treasury, MFEP from outer islands.
(2). The State Fund sub-account on each outer island requires a balance of cash to meet the day to day expenditure on
Central Government business. To this end, the Chief Accountant will authorize maximum levels of cash which may be
held in each sub-account.

X.9.1. Receipt of RBCs from Treasury (MEFD)

(1). When it becomes necessary to replenish funds, an application will be made to the Accountant General by telegram,
requesting the sum required. If the Accountant General agrees the application, the Treasury will raise a payment
voucher (PV) covering the sum to be issued, a copy of which will be sent with the RBC. The RBC will then be sent by
registered post on the next available air flight. The Treasury will send a telegram to the island concerned confirming
dispatch.
(2). On receipt of the RBC, the Treasurer will immediately count the cash received in the presence of another Central
Government officer. If the sum agrees with the figure amount shown on the covering PC, the Treasures will
immediately:
a) Raise a State fund receipt and attach the top copy of this to a Form A, supported by the covering
PV.
b) Bring the sum to account in the sub-account.
c) Send a telegram to the Accountant General to acknowledge receipt.
(3). Should there be any discrepancy between the sum received and the amount shown on the covering PV, the
Treasurer will immediately report the fact to the Accountant General by telegram.
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X.10. RBCs SENT FROM OUTER ISLANDS TO MFEP

(1). As stated in 2 above, each sub-account on outer islands will have a maximum cash holding specified by the
Accountant General. From time to time cash actually held may build up to exceed that sum. If so the Treasurer should
make arrangements to return the surplus balance to the Accountant General, following the procedures set out in 3
below.
(2). In addition, it may also be necessary to return currency notes which have become worn or mutilated, cheques
which have been accepted under the conditions set out in this Manual, and foreign currency received under the terms
in this manual.
(3). In all cases where an RBC is to be returned to the Accountant General the Treasurer will observe the following
procedures:
a) A PV will be raised and the amount of cash, cheques and foreign currency will be itemized on it
and totaled. The PV will be numbered in the normal State fund series.
b) The cash, cheques and foreign currency to be returned will be counted by the Treasurer with
another Central Government officer in attendance. Both officers will ensure that the amount being
returned agrees with the figure shown on the PV. Both officers will then certify this fact on the PV,
adding their signatures. They will then both ensure that the total amount, plus the original copy of
the PV is put into a secure package which will then be sealed, using sealing wax.
c) The package will then be sent by registered post.
d) The Treasurer will then send a telegram to the Accountant General to notify him that the RBC has
been dispatched and to give him the expected date of deliver.
e) The Treasurer will then enter details of the PC in the State Fund sub-account.
(5). When the RBC is received by the Account General it will be immediately be checked and a telegram
acknowledging receipt will be sent to the Treasurer. Any discrepancies discovered will be notified immediately by the
Accountant General to the Clerk who will arrange for these to be urgently investigated. The Clerk will report his
findings to the Accountant General.

X.11. REQUEST FOR AN INCREASE IN THE MAXIMUM CASH

HOLDINGS
Should experience show that the maximum cash holding for the State Fund is insufficient, the Treasurer should make a
case, giving full reasons, to the Accountant General for an increased authorized holding.

X.12. AUTHORIZATION, CONTROL AND CLASSIFICATION OF

EXPENDITURE
X.12.1. Authorization of Expenditure
(1) There are special rules regarding Development Project Accounting.

(2) At the beginning of each financial year, the Secretary HAD will issue Departmental Warrants (DWs) to the
Clerk on each outer island authorizing him or her to commit expenditure against certain subheads for which
the Secretary HAD is the accounting officer. In addition, Accounting Officers in other ministries may on
occasions issue DWs to the Clerk. Such DWs will specify the Sub-Head concerned and the total amount which
may be expended against it in the year. No expenditure is to be incurred against that sub-head until such a DW
is received.
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(3) The DW gives the Clerk the authority to commit expenditure against the sub-head in question up to the limit
specified in the DW. That authority is invested in Clerk personally and he or she shall not delegate it to any
other officer except in circumstances where he or she is going to be absent from the office on leave etc. Where
this happens, it will be the aim of the Ministry of Home Affairs and Rural Development to provide a
replacement Clerk for the period of the absence. However, on occasions this may not prove possible and in
such cases the authority may be delegated to Treasurer, with the agreement of the Ministry of Home Affairs,
but only for the period when the Clerk is absent.
(4) Expenditure is only to be incurred for the purpose that the money was provided and Clerks should exercise
due economy and avoid waste in incurring such expenditure. They should also ensure that total expenditure on
each sub-head is contained within the limit specified in the DW. Under no circumstances should the Clerk
incur expenditure above the level specified in the warrant.
(5) All orders for goods and services must be properly authorized by the Clerk and made using an official Local
Purchase Order. The signature of the Clerk on that order certifies the correctness and accuracy of the
transaction. In no circumstances will a Clerk authorize expenditure in advance of the goods or services being
received.
(6) Under no circumstances should the Clerk allow or direct any other officer to incur expenditure without due
authority.
(7) Failure by the Clerk or Treasurer (acting on his or her behalf under the circumstances set out in para 4 above)
to observe the provisions set out above will lead to him or her being held personally responsible and may lead
to a surcharge.
(8) Responsibility for authorizing expenditure for Heads, other than those controlled by MHARD, where no DW
has been issued to the Clerk, rests with the nominated officer the Ministry concerned.

X.12.2. Recording and Controlling Expenditure

(1) At the beginning of each financial year when DWs are received from the Secretary HAD, or from an
Accounting Officer in another ministry, the Treasurer will open a vote ledger sheet in respect of each sub-head
concerned. At that stage, he or she will record details of:
(a). The sub-head number
(b). The tile of the sub-head
(C ). The DW Number and date
(d).The total sum warranted for the year.

(2) Should a supplementary DW be received during the course of the year, the Treasurer will enter details of its
number, date and the additional sum warranted on the vote ledger sheet.

(3) As is noted in paragraph above, all actions which involve the incurring of money will be properly authorized.
In addition, before any commitment is entered into, the Clerk will check with the Treasurer to ensure that there
are sufficient funds available in the sub-head concerned to meet the expenditure. No such commitment will be
entered into if there are not sufficient funds remaining.

(4) Unless payment is to be made at the time the order is placed, the Treasurer will record details of the sum
expected to be incurred in “commitments” column of the vote ledger sheet and will calculate totals showing
“total commitments”, “total commitments and expenditure” and the “balance available”.

(5) When debit note for the goods or services are received and have been certified by the Clerk and a payment
voucher raised, the Treasurer will take the following action:

(a). Ensure that the PC shows the correct sub-head allocation;

(b). Enter details of the PV number and date in the vote ledger sheet;
(c ). Credit the “commitments” column of the vote ledger sheet (if the commitment was previously recorded);
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(d). Enter details of the sum paid in the “expenditure” column of the vote ledger sheet;
(e).. Calculate new totals in respect of the “commitments”, “expenditure”, “expenditure and commitments”
and “balance available”; columns of the vote ledger sheet.
(f). Endorse the PV “entered in vote ledger” sheet once steps (a) to what have been completed.

(6) After details of the PV have been entered in the vote ledger sheet, the Treasurer will ensure that the correct
entries are made in the State Fund sub-account.
(7) At the end of each month the Treasure will make a report to the Clerk, who after checking, will send it tot the
Secretary for Home Affairs and Rural Development showing details of expenditure against each sub-head for
which a DW has been provided.
(8) It is the responsibility of other ministries to keep vote ledger records of the sub-heads which they control,
other than where a DW has been issued to the Clerk.

X.13. PAYMENT OF EXPENSES

X.13.1. Guidelines
No payment should be made for any purpose unless it is properly authorized and there is evidence that the goods or
services being paid for have been satisfactory received.

X.14.CERTIFICATION OF EXPENDITURE
(1) In the case of expenditure authorized against MHARD sub-heads, or against other ministries sub-heads where
a DW has been issued the Clerk will satisfy him or herself that the goods or services have been satisfactory
supplied. Thus, when the debit notes or invoice is received, the Clerk will check to ensure that the goods or
services detailed on it have been satisfactorily received. He or she will also check that the price quoted on the
debit note agrees with the price originally agreed with the supplier of the time the order was placed. If
satisfied, he or she will certify the fact on the debit note and pass this, together the original order to the
Treasurer.

(2) In the case of expenditure authorized against sub-heads controlled by other ministries, where no DW has been
issued to the Clerk, the officer nominated by the Secretary of the ministry concerned will take the same actions
at prescribed for the Clerks at paragraph 1 above.
X.14.1. Raising of Payment Vouchers
(1). In the case of MHARD sub -heads (or sub-heads of other ministries where a DW has been issued to the Clerk), on
receipt of the certified debit note and the original order from the Clerk, the Treasurer will then rise a payment voucher
in (duplicate).

(2). The Treasurer will allocate a PV number. A consecutive series of PV numbers should be maintained each month
eg. PV 1/5 being the first PV raised in the month of May. The PV should show details of the goods or services received
and the invoiced cost. A careful check will be made to ensure that these details agree with those shown on the original
order and the invoice. Details of the code against which the expenditure should be charged should be entered on the
PV. The PV should then be entered in the vote ledger sheet. The PV will then be passed to the Clerk for signature.
(3). The following principles will be followed making out PVs:
a) Separate payment vouchers will, as far as is possible, be used for separate sub-heads
b) In no circumstances should any officer sign a blank or incomplete PV
c) The computations and costing should be checked to see that they are arithmetically correct
d) The payee named in the voucher should be the person entitled to receive payment.
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e) The order reference and debit note reference will be quoted on the PV.

(4). In the case of sub-heads for which other ministries are responsible, other than where a DW has been issued to the
Clerk, the nominated officer of the Ministry concerned will raise the PV, allocating the appropriate Ministry PV
number and will attach the supporting original order and debit note. He or she will then sign the PV and pass it to the
Treasurer after certifying it has been entered in the ministry’s vote ledger.
(5). On receipt of such PVs, the Treasurer will check to ensure that:
a) The PVs are correctly supported by the order and debit note;
b) The detail on the PV agrees with the supporting documents;
c) The PV is arithmetically correct;
d) The allocation has been shown;
e) It has been signed by the Ministry’s nominated officer;
f) It has been annotated to show that the PV has been entered in the vote ledger of the Ministry
concerned.
g) After satisfying him or herself on these counts, the Treasurer will then allocate a PV number in the
State Fund sub-account series – see paragraph 3.2 above.
(6). The procedures for dealing with PVs raised for Salaries and Wages are set out below. Similarly, those for Telmo
Payments are dealt with later as well as that for Bank Agency.

X.14.2. Payment of Expenses.

(1). Once the procedures set out above have been completed, the Treasurer will arrange to make payment to the payee
concerned. Payment will be made by cash from the State Fund and the following principles will be observed:
a) The payee will be required to sign for receipt of the cash
b) Payment will only made to the payee named in the PV unless:
(2).The payee provides a letter to another person authorizing that person to collect the money on his or her behalf.
Such a letter should contain the delegated person’s signature and that signature should be certified by the signature of
the person to whom the payment is due. In such cases, the Treasurer should be satisfied that the letter is genuine and if
so, he should attach the letter to the PV which should be signed by the person authorized to collect payment. The
Treasurer should verify the signature on the PV with the signature in the letter of authority.
(3).In case of a religious group, a trading organization etc, payment may be made to an authorized representative
provided that the copy concerned had supplied a letter nominating the representative to be authorized to collect money
on its behalf. In such cases, the body concerned should also provide the Treasurer with a specimen signature of the
authorized representative.
(4).At the time payment is made the PV should be endorsed “paid”.
(5). Details of the PV will be entered in the State Fund sub-account.
(6). After these actions have been completed, the original and duplicate copies of the PV s should be filed away in
numerical sequence.

X.15. COLLECTIONAND RECEIPT OF REVENUE

X.15.1. Receipt Books
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The Treasurer will maintain a stock of State Fund receipt books. These are controllable documents and the rules for
their safe custody and making returns to the Accountant General should be observed.
X.15.2. Receipt of Revenue
(1) The special arrangements in respect of Telmo receipts and Bank Agency deposits set out later.

(2) For other receipts the Treasurer, at the time of accepting payment, will ask the payee to present the necessary
debit note (if one has been raised) or to say what the payment is in respect of if no debit note has been issued.

(3) The Treasurer will carefully check that the sum paid over and, if satisfied that it agrees with the sum due, will
issue a receipt following the procedures set out in paragraphs 4 to 6 below.

(4) Receipts will be prepared in quadruplicate. The No 1 copy will be given to the payer. The No 2 will be
retained to support the State fund sub-account and the No 3 & 4 copies will be retained in the receipt book.
The original copy of the receipt will be completed using a ball pint pen and carbon will be used to make the
copies. The entry will be legible and will show:

(a) The payer;

(b) The particulars of the transaction;
(c) The allocation the receipt is to be credited to;
(d) The sum received.

(5) NO alteration of any sort is to be made to any receipt. Should a receipt be spoilt it will not be destroyed but
will be endorsed “cancelled” as will all the copies. Such a cancelled receipt will be authenticated by the
signature of the Treasurer.

(6) The original and duplicate of any cancelled receipt will be retained to support the State fund sub-account.
X.15.3. Method of Payment
(1) As a general rule, payment will only be accepted by Treasurers in Australian Dollar currency. However, in
certain limited circumstances the Accountant General may authorize Treasurers in writing to accept cheques
drawn on the bank from nominated individuals or organizations up to a specified sum per month. Treasurers
may only accept cheques if they hold that written authority. No other cheques may be accepted.
(2) On occasions, Treasurers may be asked to convert foreign currency or traveler’s cheques into Australian
currency. This may be done up to a limit of A$100 from any one individual customer, providing the currency
is in British Pounds Sterling, US Dollars, Fiji Dollars or NZ Dollars. In the case of foreign currency only notes
will be accepted. In the case of traveler’s cheques, the Treasurer will ensure that the bearer countersigns the
cheque in his presence, that the signatures match and that the bearer can provide satisfactory evidence of
identity. Any other request to convert currency will be referred to the Accountant General and will not be
undertaken until his authority is received.

(3) All foreign currency transaction will be converted at the official exchange rate notified by the Accountant
General from time to time.

(4) All cheques, traveler’s cheques and foreign currency received by Treasurers under the provisions of
paragraphs 1 and 2 above will be sent to the Accountant General by RBC no later than 1 week after the date
of receipt.
X.15.4. Revenue Receipts From Other Ministries
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(1).In addition to receiving payments direct from members of the public and organizations, the Treasurer is also
responsible for accepting pay-ins from other ministries on the island. In such cases the following procedures will
be followed:
a) The Revenue Collector of the Ministry concerned will bring to the Treasurer all cash he has
collected supported by paying in form and the duplicate copies of the receipts issued by him.
b) The Treasurer will check that:
(i) The total of cash paid-in agrees with the total shown on the pay in Form
(ii) The total on the of the pay in form agrees with the total of the individual receipts
attached to it
(iii) The pay in form A shows details of the allocations to which the receipts are
attached to the pay-in form.
(2). If satisfied, the Treasurer will issue a receipt, giving the top copy of it to the Revenue Collector from the other
ministry and attaching the second copy to the pay in form.
(3). At the time Revenue Collectors from other ministries make their pay-ins they will bring with them their receipt
book containing any unissued receipts and their cash book. The Treasurer will check to ensure that:
a) The total shown in the cash book agrees with the total shown on the pay in form.
b) There are no receipts unaccounted for by reference to the pay-in register.
c) The No 3 and 4 copies of any cancelled receipts are retained in the receipt book.

(4).If satisfied, the Treasurer will initial the cash book and the receipt book. Any discrepancies will be brought to the
immediate attention of the Clerk. He or she in turn will investigate and, if these investigations indicate that there has
been a break of regulations, will send an immediate report to the Secretary of the Ministry concerned, with a copy to
the Accountant General and the Auditor General.
(5). After completion of the checks, the Treasurer will enter details in a pay-in register. The following details will
recorded:
a) The ministry concerned
b) The date of deposit
c) The ministry’s RR numbers covered by the pay-in
d) The amount of the pay-in
e) The receipt number issued by the Treasurer

(6). Ministries making such pay-ins will be required to do so not less frequently then weekly. Even if a revenue
collector has received no revenue during the week, he or she should still report to the Treasurer on the due day,
bringing the cash and receipt book. The Treasurer will keep a record of the pay on which pay-ins are due and, in the
event of a ministry falling to make such pay-in on the due date, the Treasurer will send a message to the Revenue
Collector concerned asking for immediate action to rectify the situation. If this fails to produce results within 2 days,
the Treasurer will report the fact to the Clerk who will arrange for an immediate spot check to be carried out on the
Ministry concerned. Should such a spot check reveal evidence of misuse of public funds, the Clerk will immediately
notify the Secretary for the Ministry concerned, copying his or her report to the Accountant General and the Auditor
General.

X.15.5. Notice to The Public

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A notice is to be exhibited in the Treasurer’s office which tells payers that they should always obtain a number receipt
for every payment they make to the Treasurer. Such a notice will be written in Gilbertese and English. A specimen is
attached.

X.16. PAYMENT OF SALARIES &WAGES TO CENTRAL GOVERNMENT

EMPLOYEES
X.16.1. Guideline
(1) The salaries of all established Central Government employees on outer islands are calculated by the Treasury
Payroll Section of the Ministry of Economic, Finance and Development(MEFD). These calculations are
performed by computer based upon information received from the Public Service Office (PSO) and from
individual employing ministries.

(2) Once details of the salary to be issued have been calculated, the Treasury, MEFD, advises details to the
Treasurer on the outer island concerned who in turn arranges payment to all of the Central Government
established employees concerned.

X.16.2. Notification of Changes in Status Etc.

All changes which affect an employee’s permanent status and, thus entitlement to the appropriate level of
salary (e.g. appointments, transfers, promotions, dismissals) are dealt with between the PSO and the parent
employing ministry. Treasurers and Clerks are not involved in these.

X.16.3. Notification of Information Which Affect the Level of Salary on a Temporary Basis
(1) In addition to the types of changes referred to in paragraph, other factors arise which affect the level of
salary issued on temporary basis. Examples are overtime worked or allowances payable (eg dirt
allowances) or temporary deductions from salaries.

(2) In these types of cases, the responsibility for initiating reporting action rests on the outer island. For
MHARD employees (ie the Clerk and the Treasurer) it is the responsibility of the Clerk to initiate the
action. In the case of employees of other ministries, it is the responsibility of the senior officer of that
ministry on the island to initiate the action. In both cases details will be sent to the HQ of the parent
ministry concerned and not directly to the Treasury Payroll Section of the MEFD. The parent ministry will
in turn evaluate the details notified and, if satisfied, will report the details to Treasury’s Payroll Section of
MEFD.
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X.16.4. Details of Salaries To be Issued

(1) Details of Salaries to be issued will be sent by the Treasury Payroll Section to the island concerned a few days
in advance of each pay day. The procedures vary between those islands in the Gilberts Group and those islands
in the Line and Phoenix Groups.

(2) Gilberts Group. In the case of those islands in the Gilberts Group, the Treasury, MEFD will raise a PV and
sent the original copy of this to the Treasurer on the island concerned. This PV will show the total sum of
salaries to be issued to all Central Government employees on the island. It will be supported by a schedule in
respect of each ministry who have employees on the island. That schedule in respect of each ministry who
have employees on the island. That schedule will show names of each employee and the amount of salary to
be issued. If for any reason (e.g. unavailability of flights), it is not possible to get a PV to the island in time for
the pay day, the MEFD will transmit the money by Telmo, following the procedures set out in paragraph.3
below.

(3) Line and Phoenix Groups: In the case of these islands, the Treasury Payroll Section will send a Telmo to the
accountable officer of the island concerned. The telegram will give details of employees, grouped by
ministries, showing the salary to be issued to each. In such cases, the accountable officer will cash the telmo
through the State Fund procedures.

(4) The Treasurer in the case of the Gilberts Group islands and the accountable officer in the case of the Line and
Phoenix Group will then make payment to the individual employee concerned. In both cases the individual
employee will sign to acknowledge receipt of the salary against their names on the schedule (in the case of
payments by PV) and against the Telmo list (in the case of salaries paid by telmo). The PV or the Telmo will
be used to support in the total payment which will be entered in the State Fund sub-account.

X.16.5. Unclaimed Salaries

In some instances, the salaries shown on the schedule or the telmo list will not be claimed (e.g. because the employee
is absent from the island at the time). In such cases the Treasurer or accountable officer will bring the unclaimed
salaries back on charge in the State Fund account as a receipt. A receipt will be issued for such sums and the RR
number will be entered on the schedule or telmo list.

X.16.6. Pay Queries

Should any employee have a query about the amount of pay issued, they will approach the Treasurer for clarification.
If the Treasurer cannot resolve the query himself, he or she will write to the parent ministry of the employee concerned
who in turn will approach the Treasury Payroll Section.

X.17. TELEGRAPHICMONEY ORDER TRANSACTIONS

X.17.1. Guideline
(1).The telegraphic money order (Telmo) System is designed to allow money to be transmitted by telegraphic means
between an outer island and:
South Tarawa
Other outer islands
Kiritimati
Overseas Countries, namely Australia, Fiji, Tuvalu & Nauru.
.
(2). The system is operated by the Post Office in conjunction with MEFD, using the services of Telecom Kiribati.
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(3). There are 2 main types of Telmo transactions as far as each outer island is concerned i.e.:
a) Telmos received for payees on the island from other locations
b) Telmos sent from the outer island to payees at other locations

X.17.2. Telmos For Payment on The Island Concerned

(1) A person wishing to telegraph money to the island will arrange for this to be done from the location where
he or she is situated. This will result in a telegram being sent to the radio operator on the island. On receipt
of this telegram he will record the fact in a register and then pass the telegram to the Treasurer.
(2) The Treasurer will maintain a register (a specimen of which is attached to record the receipt of telegram.
He or she will also use this register to allocate a number to the PF 27 (see paragraph 4 below)
(3) The Treasurer will check to ensure that the amount shown in the telegram agrees with the code word
quoted in that telegram. A list of authorized code words is attached. Any discrepancies will be queried
with the sender of the telegram and no payment will be made until the discrepancy has been resolved.
(4) A PF27 will be prepared in duplicate for each telegram received. A specimen PF 27 is attached. The
Treasurer will enter the following details on the PF 27:
a) A number taken from the register referred to in paragraph 2 above
b) The name of the payee
c) The amount involved
d) The serial number of the originating PF 25 quoted in the telegram.

(5) The Treasurer will attach the telegram to the top copy of the PF 27 and then will arrange for the payee to
visit his or her office. Once the Treasurer is satisfied as to the identity of, they payee he or she will pay the
sum specified and will obtain the payee’s signature on the PF 27 as proof of payment. In addition, the
payee will also sign for receipt of the cash in the register referred to in paragraph 2 above.

(6) The Treasurer will also maintain a form PF 29 (b), a copy of which is attached in quadruplicate. He or she
will enter details of each PF 27 at the time payment is made. At the end of each week the Treasurer will
prepare a payment voucher following the procedures set out in this manual, which will show the total
value of all PF 27 paid in the week. Such PV’s will distinguish between the amounts received from other
parts of Kiribati, which will be coded 51-007-000 and those received from outside of Kiribati, which will
be coded:

 51-007-001 Nauru
 51-007-002 Fiji
 51-007-003 Australia
 51-007-004 Tuvalu
(7) The PV’s supported by the No 2 copy of the PF 29 (b) will then be entered in the State Fund sub-account
and will be filed with other PV’s raised in support of that account.
(8) supported by the original copies of the PFs 27, to the Accountant General.

X.17.3. Telmos Sent from The Island for Payment Elsewhere

(1) When a customer on the island wishes to telegraph money to another location covered by the scheme, he
or she will visit the Treasurer. The Treasurer will accept the sum to be telegraphed plus a further charge for
commission.
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(2) The Treasurer will then prepare a form PF 25. The PF 25 is a serially numbered document and is prepared
in quadruplicate. The No 2 & 3 copies will be given to the customer who will take them to the Radio
Operator as proof of payment. On production of this the Radio Operator will send a telegram to the
destination concerned. The customer will be given the No 2 copy back and the Radio Operator will retain
the No 3 copy. (NB. The Radio Operator will also charge the customer with the cost of the telegram. This
is in respect of Telecom Kiribati charges, and as such, does not form part of the State Fund).

(3) The Treasurer will maintain form PF 29(a) (a specimen of which is attached in quadruplicate. He or she
will enter details of the PFs 25 on it.

(4) At the end of each week, the Treasurer will prepare a Form A showing details of all PFs 25 issued during
the week and will support this with the second copy of the PF 29(a).
a) Sums sent elsewhere within Kiribati. These will be coded
51-007-000

b) Sums sent to destinations outside of Kiribati. These will be coded:

51-007-001 Nauru
51-007-002 Fiji
51-007-003 Australia
51-007-004 Tuvalu

c) Sums received in respect of commission. These will be coded in line with the recurrent revenue
sub-head notified by the Controller of Postal Services each year.
(5) The Form A will then be entered in the State Fund sub-account and will be retained in support of that
account.
(6) Also, at the end of each week the Treasurer will send the original copy of the PF 29 (a), supported by the
top copies of the PF’s 25, to the Accountant General.

(7) . The Treasurer will also send copies of all PFs 29(a) and PFs29(b) to the Controller of Postal Services at
the end of each week.
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X.17.4. Action to Ensure That All Telmo Transactions are Accounted for in the Monthly State
Fund
Because the end of a month will sometimes fall in the middle of the week, Treasurers will ensure that all Telmo
transactions relating to the month in question are entered in the Cash Book. This will necessitate the raising of PFs
29(a) and PFs29 (b) covering parts of weeks.

X.18. BANK AGENCY

X.18.1. Guidelines
(1) In addition to their normal Government accounting duties, Treasurers also act as agents of the ANZ Bank
in providing certain banking facilities on outer islands. This arrangement flows from an agreement
between the ANZ Bank and the MEFD.

(2) Under this agreement, which deals with Saving Accounts, Treasurers are authorized to
a) Accept deposits to open new accounts
b) Accept deposits to existing accounts
c) Allow withdrawals up to a limit of $A100 per week from existing accounts, assuming that there
are sufficient funds in the account.
(3) A detailed manual is being prepared by the ANZ Bank and will be issued to Clerks and Treasurers in due
course. However, the following points of general principle are drawn to the attention of Treasurers.

X.18.2.Deposits
(1) The following actions should be observed each time a customer makes a deposit to his or her saving account:
a) A bank deposit slip must be completed by the Treasurer showing details of the amount deposited
and the name and account number of the depositor. The customer should also sign the deposit slip
b) Details of the deposit must be entered in the customer’s pass book and the entry should be
initialed by the Treasurer. In addition, the entry should also be stamped with the rubber stamp
issued to the Treasurer by the bank. In addition, a new balance should be calculated and entered in
the pass book. This revised balance should then be entered on the deposit slip.. The pass book will
then be returned to the customer.
c) The depositor will also be issued with a State Fund receipt for the amount deposited.
d) Details of all deposits will be entered on a form SB25 (which is provided to Treasurers by the
Bank), at time they occur. This form will be prepared in quadruplicate.

X18.3. Withdrawals
(1) The following procedures must be observed when a customer requests to make a withdrawal from his or
account.
a) The customer must present his passbook to the Treasurer who will check to see that there are
sufficient funds in the account to meet the sum to be withdrawn.
b) The Treasurer will complete a bank withdrawal form, entering details of the account name, the
account number and the sum to be withdrawn and will obtain the customer’s signature on the
withdrawal form.
c) The Treasurer will enter details of the withdrawal in the customer’s passbook and will calculate
and enter the new account balance. That balance will also be entered on the withdrawal form, (see
para (b) above). The entry in the pass book will be instilled by the Treasurer and, in addition, the
passbook will be stamped, using the rubber stamp issued by the Bank. The passbook will then be
returned to the customer.
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d) Treasurers will not pay out withdrawals unless the identity of the withdrawer can be established as
the holder of the account. In cases where a person asks another to draw money on his behalf, the
Treasurer will not agree to the withdrawal unless the delegated person can produce a letter of
authority signed by the account holder such a letter of authority should contain the delegated
person’s signature and that signature should be certified by the signature of the account holder. If
the Treasurer is satisfied that it is a genuine letter, payment may be made. In such cases, the
person making the withdrawal should sign the withdrawal slip with that contained in the letter of
authority. The Treasurer will then attach the letter of authority to the withdrawal form
e) Treasurers will limit withdrawals from any one account to A$100 per week.

(2) Treasurers will enter details of all withdrawals on the SB25 (see paragraph1.d above) at the time they occur.

X.18.4. Entries in State Fund Sub-account

(1) Treasurers will enter details of all deposits in the State Fund sub-account at the time they arise. Such
entries will be supported by the No 2 copy of the State Fund receipt. All withdrawals will be summarized
weekly on a PV supported by the No 3 copy of the SB25. The PV will be numbered in the normal State
Fund Series.

(2) Because the end of the month will sometimes occur in the middle of a week, Treasurers will ensure that all
Bank Agency transactions relating to the month in question are entered in the Cash Book. This will entail
raising SBs25 covering only parts of weeks.

X.18.5. Allocations
All Savings Bank Agency transactions should be coded to 35-06-84-00

X.18.6. Returns to Bank Of Kiribati

(1) Treasurers will send the No 1 and No 2 copies of the SB25, supported by all deposit and withdrawals slips
at the end of each week.

(2) From time to time the Bank may raise queries on certain transactions. When they do, Treasurers should
ensure that these are dealt with promptly. When, for some reason (e.g. because of difficulty in contacting
or obtaining a passbook from a customer), delay is experienced in giving a full reply the Treasurer should
send an interim reply to the Bank explaining the circumstances. In such cases, the Treasurer should ensure
that a substantive reply is sent as soon as details to resolve the query are available. In case should a
substantive reply be delayed beyond 3 weeks.
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X.18.7. Responsibility of Treasurers

Treasurers act on behalf of the MEFD as agents of the Bank. As such, they are required to safeguard the
Bank’s interests. Any negligence on the part of Treasurers may result in the MEFD having to make
restitution to the Bank. In such cases, the Treasurer concerned will be held personally responsible and will
be required to make good any loss.

X. 19. ENTRIES IN STATE FUND SUB-ACCOUNTS AND THEIR

SUBMISSION TO THE ACCOUNTANT GENERAL
X.19.1. Guidelines
(1) The State Fund will be maintained in cash book form. This will be prepared in triplicate and will be
maintained up to date at all times by the Treasurer who will enter details of receipts and payment vouchers
at the time they are raised.

(2) Treasurers will calculate a balance on the account at the end of each day’s business. In calculating daily
balances, Treasurers will need to take account of the fact that Bank Agency withdrawals and Telmo
transactions are only entered into the Cash Book at the end of each week and that thus a number of
relevant entries will not be shown during the week. It is therefore necessary to make the appropriate
adjustments to the balances as calculated directly from the Cash Book.

(3) The Treasurer will check the balances calculated at the close of business each day with the actual cash
held, making good any shortages and bringing on charge in the account any surpluses found. Should any
deficiency be made good, this fact will be noted in the Cash Book.

X.19.2. Closing the Account

(1) The account will be closed at the end of each month with the balance of cash being carried forward to the
next month’s account.

(2) The actual cash balances held at the end of each month, analyzed by denomination of notes and coins,
foreign currency and any cheques held (quoting cheque numbers) will be summarized on the account and
the physical cash holdings will be independently checked by the President of the Local Government
Council with the Clerk and the Treasurer in attendance. The President will certify on the account the cash
balance found and the Clerk and the Treasurer will sign that certificate. Any cash shortages or surpluses
will be dealt with as described in paragraph 3 above.

(3) The Clerk will supervise the work of the Treasurer in maintain the account and, in addition to the cash
check referred to in paragraph 2 above, will make regular surprise spot checks of the balances of cash held
with the balance shown in the account.
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X.19.3. Submission of Account To Treasury, MEFD

At the end of each month, after the cash count referred to above, the Treasurer will forward the top copy of the
account, together with the original copies of the supporting payment vouchers, the number 2 copies of receipts and
other necessary supporting documents to the Accountant General, by registered post, no later than 7 days after the end
of the month. It is most important that Treasurers meet this deadline and failure to do so may be regarded as an offence
warranting disciplinary action.

X.20. CONTROL OF ACCOUNTABLE DOCUMENTS

X.20.2. Guideline
Each Treasurer will maintain a stock of accountable documents. These will include receipts books, Local Purchase
Order books and PFs 25. These are controllable documents and the following procedures will be observed in relation
to requisitioning, safe custody and the making of returns to the Accountant General .

X.20.1. Requisitioning
All requests for stocks of these accountable documents will be made in writing to the Accountant General. All issues
from the Accountant General to Treasurers will be made on an “Allocated Stores – Issue/Receipt Voucher”. On receipt,
the Treasurer will check to ensure that the accountable documents provided agree with the details shown on the
voucher. Should any discrepancy be found in the quantity or numbering of the documents, this will immediately be
reported by telegram to the Accountant General. Any book which is found to be defective in numbering etc. will be
immediately returned to the Accountant General.

X.20.2. Bringing on Charge

Once the Treasurer is satisfied that the accountable documents have been correctly received, he or she will enter
details of their receipt in a register, a specimen of which is attached .

X.20.3. Custody of Accountable Documents

All accountable documents must be safeguarded against theft, misuse or loss. They will be kept under lock and key by
the Treasurer when they are not in use. Except when a Treasurer makes a formal handover, they may not be transferred
to any other person.

X.20.4. Returns To the Accountant General

(1). Treasurers will make a return to the Accountant General and copy to the Auditor General at the time they submit
the monthly account showing details of:

a) The quantity of each type of books held at the start of the month’
b) The quantity of each type of books received during the month;
c) The quantity of each type of books completely used during the month;
d) The quantity of each type of books held at the end of the month, including partly used books
(2). Each of the entries referred to above will identify the registered numbers of the books.

X.20.5. Retention of Used Books

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Completed books of accountable documents will be retained by Treasurers for a period of 7 years after their
completion.

PART Y: VEHICLES AND TRANSPORT

Y. 1. GENERAL CONSIDERATIONS
Government transport is provided for carrying out the functions and duties of Government more economically and
efficiently. All employees have to ensure that such transport is used only for the purpose for which it is provided and
that wasteful or empty running is kept to the minimum.

Y. 2. USE OF VEHICLES
(1) Vehicles are to be used only for official work.
(2) Private use of Government or Government hired motor vehicles is prohibited. For example, use of
vehicles for traveling to homes of officers, whether to attend office or otherwise.
(3) Only authorized drivers are to drive Government vehicles.
(4) Written authorization from the Secretary or Senior Responsible Officer should be provided for other
authorized drivers whom are not designated as the Ministries’ drivers. This authorization should
reflect the official use of vehicles not for unofficial purpose.
(5) Vehicles are not to be used outside normal working hours except for approved office work with
Authorized Vehicle Pass issued to the Ministries/Department.

Y.3. UNAUTHORISED HOURS

Unauthorized hours are 4.30pm to 7.00am Monday to Friday; Weekends and Public holidays.

Y.4. AUTHORISED VEHICLE PASS

This is the standard vehicle pass used for approved office work outside normal working hours. The purpose of this
pass is to authorize both the vehicle and the driver for office work outside normal working hours. The pass is to be
issued by the Senior Responsible Officer of the Ministry.

Y.5. GOVERNMENT LICENSE PLATES

All government vehicles must be installed with government license plates except for the vehicles used for:
(a) The Prime Minister; and
(b) National security purposes under the Ministry of Police.

Y.6. VEHICLE SIGNAGE

All government vehicles shall be marked clearly with their respective government designated plates to ensure their
easy identification.
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Y.7. PROCEDURE FOR REFUELLING OF GOVERNMENT VEHICLES

The procedure for refueling government vehicles shall be as follows:

(1) The responsible officer or the driver of the vehicle shall fill out purchase order (original and 2 copies) of
Form for refueling stating therein the License plate number, Vehicle type, Sub-head to which petrol is
charged, and quantity of fuel (in liters) required for the vehicle.

(2) Submit the purchase order for refueling to the Senior Responsible Officer for authorization.

(3) The Senior Responsible Officer shall check and verify correctness of all the information given in
purchase order especially the sub-head to which the vehicle petrol is charged and that all the three copies
of purchase order are correctly filled in. If found in order shall authorize the purchase order returning the
original and 1 copy to the responsible officer or the driver. The 2nd copy is to be forward to Senior
Responsible Officer of the Ministry.

(4) The authorized purchased order (2 copies) shall be presented by the driver to the assigned retail operator.

(5) The retail operator will issue the invoice with its signature on it indicating the quantity of fuels provided
for the vehicle, the unit cost per liter and the total cost. The driver shall ensure that the details and cost
charged for refueling are accurate in all respects.

(6) The driver will forward the invoice from the retailer attached with the original of the purchase order to
the Ministry Corporate Service Division for preparing of the purchase voucher to pay the retailer and to
ensure that the cost charged, the sub-head to which the fuel is charged, and the invoice and the purchase
order agree on the amount and quantity of fuel taken and recorded in the Access data base.

(7) The Corporate Service Division of each ministry shall on receipt of the Invoice:
 match the original purchase order to the invoice.
 To ensure the original fuel purchase request agrees to the amount invoiced
 Any discrepancies shall be referred back to the responsible officer or the driver for explanation.
 Once the invoice has been verified and any discrepancies resolved, the payment voucher is
prepared and sends to Treasury for payment in accordance with the Government’s payment
process/policy.

Y.8. CONTROL OF VEHICLES

(1) Departments shall nominate a responsible officer to control the use of motor vehicles by the staff of
the Department.

(2) This officer shall be responsible for hiring of vehicles, authorizing use of departmental vehicles and
ensuring that the vehicle running sheets are filled in regularly and that the departmental vehicles are
kept in road worthy condition.
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Y.9. VEHICLE RUNNING SHEETS

(1) Driver’s daily return forms (Running Sheets) are to be carried in each vehicle and completed by the
driver each day.

(2) The returns are to be completed in full for each trip by entering starting and finishing point, time out
and in, speedometer readings, purpose of journey (brief description), and driver’s initials.

(3) The officer in charge must sign the running sheet as correct.

(4) Details of petrol and oil supplied shall be entered at the time the petrol or oil is supplied.

Y.10. PROTECTION TREATMENT FOR NEW VEHICLES:

All new motor vehicles should be given attentive measure wherever required on the underside of chassis and body to
minimize rust and corrosion.

Y.11. REPAIR AND MAINTENANCE OF VEHICLES

(1). All requisition forms for vehicle repair and maintenance submitted to the Internal Audit Division of the Ministry
of Finance must be accompanied by the following documents/information:

 Three written quotes from the suppliers of vehicle parts;

 Ministry/department’s analysis based on specification of goods and services required;
 Recommendation giving full justification of selection of supplier, goods or service;
 Funding and Output code;
 Vehicle registration number; and
 Requisition Form duly approved by authorized Officer/Authority in accordance with the financial
delegation limits.

(2). For replacement of vehicle parts due to wear and tear, a written undertaking from the Senior Responsible Officer
of the Ministry and Agency must be attached, stating that the vehicle was not involved in an accident. This must be
accompanied by a Write-off Form for any major part that needs to be replaced.

(3). For vehicle involved in accident, irregularity report must be submitted immediately after the accident to enable
any investigation to be carried out and to avoid any delay in the process

(4). No further action in the repairing or written off process of the Irregularity Report vechicle until an investigation is
completed.

(5). Any repairing to the vehicle as a result of a irregularity report recommendation must attached appropriate
documentation (write off form, irregularity report, quote of the new parts, cost recovery action) before a payment is
processed.
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Y.12. DUTIES OF DRIVERS:

(1). Drivers of Government motor vehicles are expected to drive with due care and consideration for other users of the
road and to observe all traffic regulations.

(2). Drivers shall be responsible for:

a) Completion and dispatch of running sheets to their Controlling Officers.

b) Ensuring that their driving licenses are current and cover the type of vehicle they are driving. The
Controlling Officers shall verify at the beginning of each licensing year that drivers have obtained
their licenses.

c) Keeping their vehicle in a roadworthy condition.

d) Custody and supervision of tools and spare parts carried on the vehicle. Where a driver passes over
the control of a vehicle permanently to another, both the drivers must check the condition of the
vehicle, tools, and spare parts before the transfer takes place.

e) Reporting immediately to their Controlling Officers defects and faults, however slight, in the
vehicles.

f) Ensuring that ignition keys are removed and, where possible, the doors and boot locked if the vehicle
is left unattended.

g) Ensuring that no other Government officer is allowed to drive their vehicle at anytime during the hire.

h) Ensuring that all passengers are authorized to be driven in the vehicle.

i) Ensuring that the journey is authorized and that no material deviation from the journey or
unauthorized journey is undertaken.

Y.13. DRIVER’S RESPONSIBILITIES AFTER AN ACCIDENT:

(1) Driver who is involved in an accident shall take following steps to assist the injured, obtain
information and protect the vehicle:

(a) Stop and ascertain whether he has injured any person. Render all assistance to the injured
person including transportation of that person to hospital. If, however, a driver has reasonable
grounds to expect violence from bystanders if he stops his vehicle, he is to report the accident
to the Police as soon as possible.

(b) If required, give to any police, or to any person concerned, his name and address and also the
name and address of the owner and the numbers assigned to the registration plates and license
label of the motor vehicle.

(c) If the accident involves injury to any person, report the accident in person at the nearest
Police Station or to a police as soon as reasonably practicable.

(d) Where practicable, obtain the names and the addresses of all witnesses; registered number and
the name and address of the driver if any other vehicle is involved. Prepare a rough sketch
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plan of the road, with measurements showing the positions of the vehicle before and after
impact. Note details of the injury or damage, and if possible, get it verified by the witnesses.

(e) In case of serious damage to the vehicle or where further damage may be caused by moving
the vehicle, it should not to be moved unless ordered by the Police. In all other cases, the
vehicle should be removed with the approval of the Controlling Officer. The Driver, unless
injured, is to remain with the vehicle until relieved by an officer nominated by the Controlling
Officer.

(2) In the event of the driver being unable to comply with these requirements after an accident, it is the
responsibility of the Controlling Officer available to carry out these instructions.
(3) An irregularity report is to be submitted by the driver/controlling officer to the Head of the
Department as soon as practicable after the accident, even if there is no damage to the Government
vehicle.

(4) The driver shall not make any payment or promise to pay to any third party involved in the accident.

Y.14. CONTROLLING OFFICERS RESPONSIBILITIES AFTER

AN ACCIDENT
It is the responsibility of the Controlling Officer of any driver involved in an accident to ensure that the driver of the
vehicle has complied with the requirements of Instruction L.15 as far as possible, and that an irregularity report is
prepared. If the driver was unable to obtain the information required by Instruction L.15, obtain the required
information to the extent possible.

Y.15. HIRING OF VEHICLES

The ministries/department may hire vehicles only in exceptional circumstances with the prior approval of their Senior
Responsible Officer or Secretary and after a full and detailed justification for the need to hire has been provided.
Government prevailing rates apply.

Y.16. INSURANCE OF VEHICLES

The Government vehicles shall be insured in accordance with the Government Policy
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PART Z: MISCELLANEOUS

Z.1. OFFICE EQUIPMENT

(1) Departments must ensure procurement of standardized office equipment.

(2) Once obtained, office equipment is to be kept in good order and used only for the official purposes for which
it is obtained. Dust covers are to be obtained and the machines/equipment kept covered when not in use.
Maintenance contract, where required, should be entered into for proper maintenance of office equipment such
as computers, printers, photocopiers and other electronic equipments.

(3) All office machinery/equipment is to be recorded in the departmental inventory quoting, where these are
provided, the maker’s serial number.

(4) Office mechanical equipment is not to be disposed of or declared surplus without the prior consent of
Treasury. When this is given the procedure set out in Section K (Procurement) of this manual is to be
followed.

Z.2. PRINTING AND STATIONERY SUPPLIES

(1) All printing work is to be ordered from the Government Printer.

(2) Stationery supplies of all kinds are to be procured with the approval of the Secretary. Departments are not to
hold more than what is required for one month.

(3) Non-expendable items such as pencil sharpeners, perforators, ink-wells, desk pads, numbering machines etc.,
are to be requisitioned for not more than once per month.

(4) Utmost economy is to be exercised in the use of stationery and every effort shall be made to keep the
consumption down to the minimum. While an individual sheet of paper may be inexpensive, careless use of
individual sheets adds up to a considerable waste of public money.

Z.3. LOSS AND DAMAGE TO PRIVATE PROPERTY AND PERSONAL

EFFECTS OF GOVERNMENT EMPLOYEES
(1) In general, the Government does not accept any liability for loss of or damage to Government employees’
private property or personal effects (including workmen’s tools of trade) which are used or stored in premises
owned or used by Government.

(2) All employees are advised to insure their private property and personal effects against loss or damage by fire.
The Government will not recognize any responsibility, and in no circumstances will any compensation be paid
in respect of damage or loss by fire.

(3) If private property or personal effects which an employee requires for the performances of his duty are stored
in Government premises in the places and manner directed by his Senior Responsible Officer or Secretary, and
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are damaged or lost in circumstances over which the employee has no reasonable control, the Government
will consider applications for compensation in respect of such damage or loss.

Z.4. INSURANCE
No insurance cover is to be taken out over Government property without the approval of the Financial Secretary.

Z.5. OPENING OF BANK ACCOUNT

No bank account shall be opened or operated or continue to be operated for the deposit and/or withdrawal of public
money without the express authority of the Minister of Finance. The Accountant General shall be provided access to
every account holding Government or public funds to enable him to perform audits and his other legal and regulatory
duties. Any deposit into a Government account shall be clearly identified as to the source of the funds and the account
or use to which the deposit is to be applied.
Z.5.1. Procedure for opening Bank Account
(1) The Head of Department concerned shall submit a written request in the prescribed form to the Minister of
Finance giving reasons & purpose for the opening of the bank account and providing the following detail:

(a) Name and location of the bank where the account is to be opened;
(b) Name of the officer(s) responsible for operating the bank account;
(c) Names and designation of the authorised signatories (and their specimen signatures);
(d) Type of account and type of funds proposed to be held in the account, i.e. Treasury, donor, Trust funds;
(e) Any other relevant details.

(2) The Minister of Finance, if satisfied with the reasons provided for opening of the bank account, shall grant his
approval in writing and confirm the following:

(a) Name and designation of the officer(s) responsible for operating the account;
(b) Name and designation of the officer(s) who are authorized to sign cheques and other documents.

(3) No new bank account shall be allowed to be opened if suitable banking facilities already exist and which the
Minister of Finance deems are sufficient for the purposes of the Ministry/Department.

(4) Once the opening of the bank account is approved by the Minister of Finance, the Treasury shall issue written
instructions to the bank to open the account and supply specimen signatures of the officers authorized to sign
cheques and operate the bank account.

(5) The Treasury shall allocate an account code within Attache information system for the new bank account and
update the bank register with the details of the new bank account.
Z.5.2. Procedure for closing Bank Account
(1) When the purpose for which the bank account was opened has been fulfilled, such as completion of the
project; ceasing of special or trust funds, the Secretary of the Ministry/ Department concerned shall submit a
written request to the Minister of Finance for closure of the bank account along with the following documents:

(a) Up-to-date Statement of Bank Account;

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(b) Bank Reconciliation Statement;

(c) Up-to-date Account statement of the project, special or trust fund for which the bank account was
opened;
(d) Written confirmation that all debts have been paid and nothing is due and that all revenues due have
been collected. If not, provide list of outstanding debts and revenues;
(e) Statement showing the balance in the bank account on the proposed date of closure;
(f) Copy of the agreement with the donor, if any, to establish mode of disposal of unspent balance
(including the balance in the bank account).

(2) The Minister of Finance shall examine the request for the closure of the bank account with reference to the
supporting documents as per paragraph (1) above and take the following action:

(a) Seek further clarification or information from the Secretary of the concerned Department and hold
back the decision to close the bank account;

(b) Decide to close the bank account;

(c) Decide whether the unspent balance should be transferred to the Treasury Fund or remitted to the
donor (if applicable).

(3) If the Minister of Finance agrees to the closure of the bank account, the Treasury shall issue written
instructions to the bank to close the account and transfer the balance to the Treasury Fund or any other account
as per direction of the Minister of Finance.

(4) The Treasury shall reconcile and close the corresponding account code within the Attache (.i.e. accounting
information system) and update the bank register with the details of the bank account closed.

Z.6. NOTICES PUBLISHED IN THE PRESS

Unless it is a legal requirement to publish a notice in all newspaper, public notices are to be published in a reliable
paper, and if necessary broadcasted over the television and radio, at the best value for money.

In all cases the size of the advertisement is to be kept to the smallest reasonable size. Double spacing and extra large
headings should not be used.

Z.7.TRAVEL
Z.7.1. OVERSEAS TRAVEL
(1). The authority for approving of overseas travel of government employees for official purposes is delegated in the
Public Service (Function), Regulation 20, as follows:

a) Senior Responsible Officer may approve overseas travel for employees from within their
Ministry/Agency, and the payment of their travel allowances;

b) Secretary to Cabinet may approve overseas travel for an Senior Responsible Officer, and the payment of
travel allowance; and
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c) Te Beretitenti may approve overseas travel for the Secretary to Cabinet, and the payment of travel
allowances.

(2). The authority for overseas travel may approve the travel to meet the needs of the Ministry/Agency, where funding
is available to cover the requirement s of such travel.

(3). Employees who travel overseas to attend training activities as defined in the National Conditions of Service will
be paid such allowances as are specified for training activities. No entitlement to the allowances under this section
will apply for training activities.

(4). All employees must provide an application for overseas travel (under absence form) and have this endorsed by the
required authority, prior to making any arrangements or bookings for overseas travel. All applications must be
accompanied by written confirmation of available budget and source of funds.

(5). Employees who travel on duty may not be accompanied by any dependents at the expense of the Government of
Kiribati, unless there is a specific entitlement under a contract of employment.

(6). Where an employee is approved to travel to another country on official business, he will be entitled to be paid
Daily Subsistence Allowance, Clothing Allowance and Incidental Allowance.

Z.7.1.1. Daily Subsistence Allowance

(1). The Daily Subsistence Allowance is payable for the purpose of meeting costs for accommodation, meals
(excluding alcoholic beverages) and minor travel etc where it is not provided by a third party. Third party in this
context includes all outside donors and sponsors. It is the responsibility of the Secretary of the Ministry concerned to
ensure that:

• when a third party, donor or sponsor pays for all or part of the accommodation, meal or incidental costs for an
employee on official travel, there is no duplication of payment of such costs by the Kiribati Government.
• when there is partial payment of the above costs by a third party, donor or sponsor the Ministry shall ensure
that the costs are allocated on pro-rata basis between the third party and the Government thereby ensuring that
there is no duplication of payment.

(2). Daily Subsistence Allowance is payable in accordance with approved rates specified in the international per diems
scheduled approved by the Secretary of the Public Service Office that prevails at the time of travel for each night spent
away from the employee’s duty station. There is only one single standard Class rate of subsistence allowance applied
to all government employees including members of Parliament 21. The current schedule for per diems rates was issued
on 19 May, 2017.

(3). Where an employee’s travel is wholly or partly sponsored by a donor or other sponsor, they will be entitled to
payment of any shortfall in payment by the sponsor for a period of up to 3 days for sponsored stranding and up to 4
days inclusive of travel days for externally funded or sponsored overseas conferences, meetings, seminars, workshops
and negotiations based on the following rates and arrangements:

(a) 15% of the standard rate of that country where accommodation and meals are fully or partly funded with
cash payment to the officer of less than one third (1/3) of the standard rate of that country.

21 The current policy of ‘Single Class rate” of subsistence allowance applied for all government employees including Beretitenti,
Ministers and Members of Parliament was effective in 2014, which replaced the previous policy where there were two distinctive
Class A and Class B subsistence allowance rates with Class A being provided for Beretitenti, Ministers and Members of Parliament
and Class B for the rest of the government employees. Class A had higher subsistence allowance rates than Class B.
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(b) 30% of standard rate of that country where accommodation AND meals are provided without cash
payment to the officer.

(c) 35% of standard rate of that country where accommodation OR meals are fully funded with cash payment
to the officer or less than 1/3 of the standard rate of the country.

(d) 20% of standard rate of that country where accommodation OR meals are fully funded with cash payment
to the officer or less than 1/3 but less than 2/3 of the standard rate of the country.

(e) 50% of standard rate of that country where accommodation OR meals are fully funded with cash payment
to the officer.

(f) No abated subsistence allowance will be payable where accommodation and meals are fully funded with
cash payment of more than 1/3 of the standard rate of that country.

(g) The difference between the standard rate and the amount received from the donor or sponsor of the
amount received is less than the standard rate and the officer is expected to pay for his own
accommodation and meals.

(4). Subsistence allowances must be acquitted within 2 weeks of return to the duty station, against the actual travel
itinerary, with provision of accommodation receipts for the accommodation portion. Where the rate of accommodation
exceeds the allowance rate, no additional payment is allowed, unless prior approval has been given to exceed the
schedule rate. Approval will be given only where the employee is compelled for official resins to stay in a more
expensive hotel9 for example, when traveling with Te Beretitenti). Refer to the provision for “Allowance Inadequate”.

(5). Any employee travelling on duty who is accompanied by his wife, will not normally be eligible for subsistence
allowance in respect of wife unless his wife’s passage to accompany her husband has also been properly authorized. In
these instances, the rate of subsistence allowance will be 1.5 times the standard rate. This section only applies to wives
whom accompanying their husband on authorized duty visit. Wives who are employed, when travelling on duty other
than travelling as a wife will be eligible to receive subsistence allowance at the normal single rate.

(6). An employee required to travel on duty in circumstances where he is eligible for subsistence allowance may be
granted a special imprest of an amount sufficient to cover his anticipated expenses. Applications for the grant of a
special imprest should be made to the Accountant General in accordance with the provision in the Financial
Regulations and this TOM.

(7). Employees must seek approval of the relevant designated authority under N.1. for payment of Daily Subsistence
Allowance to anyone travelling overseas on official business. Only after the payment is approved by the relevant
authority, the process for payment should be initiated by preparing ‘Combined Imprest Warrant and Payment
Voucher’ and its submission to the Secretary for authorization and then to Treasury for payment. Secretary must not
authorize payment of Daily Subsistence Allowance unless/until the required authority has given its approval.

Z.7.1.2. Outfit or Clothing Allowance22

(1). An employee who is required to travel overseas on duty may be paid a non-accountable cash allowance of A$300
for the purchase of suitable clothing and equipment, provided the employee has not received an outfit allowance from
any source during the preceding three years for the date that travel is due to commence.

22 As per National Conditions of Service, Section E.5(g)

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(2). The allowance will be applied for and approved by the Delegate as part of the approval to travel procedure. The
allowance is applicable by the employing Ministry or Agency.

(3). Clothing allowance is not payable for travel that is for the purpose of training as defined within these conditions of
service.

(4). Overseas trainings of less than 1 month would be treated as overseas duty travel and the conditions for outfit
applies.

(5). Overseas training over 1 month would be treated under National Conditions of Service, section K.

Z.7.1.3. Incidental Allowance23

(1). Employees may be entitled to reimbursement of additional expenses that are incurred as a result of official travel
overseas. These expenses must be estimated as detailed in the request for approval, and approved by the relevant
delegated authority prior to travel. Expenses will be limited to:

 Laundry
 Visa costs
 Airport transfers
 Business communication costs (fax, telephone and internet for work related purposes only)
 Airport taxes not included in the ticket price.
 Tip
 Commission and taxable goods

(2). Employees, while accommodated in a hotel, a tip of $1 a day is applicable. Except for Te Beretitenti, Kauoman ni
Beretitenti, or Minsters where a single tip shall not exceed $10 per pay or per meal or each time luggage in respect of
any of them is assisted. This also applies to support staff making tips in respect of Te Beretitenti Te Kauoman and
Ministers.

(3). Employees are expected to keep any additional expenses to a minimum. Reimbursement will be payable on
production of official receipts for the expenditure. Reimbursement is not possible without receipts or other official
proof of payment (in the case of visas).

(4). Where an employee is sponsored by an external sponsoring agency or government and the sponsorship provides
an allowance for incidental expenses then the employee shall not be entitled to receive this allowance.

Z.7.1.4. Allowance Inadequate Provisions

1. An employee who is compelled by official circumstances to lodge in a hotel with a room rate that is equal to or
higher than 2/3 of the daily subsistence allowance may be entitled with the approval of the required delegated
authority to an additional allowance equivalent to 1/3 of the daily subsistence rate prescribed and have all his/her
additional costs on accommodation, meals and other approved incidental expenses over and above the standard
rate of subsistence allowance met from public funds on the production of receipts. Only if such additional
expenses do not exceed 1/3 of the subsistence rate prescribed they will be disregarded.

2. In the case of a room less than 2/3 and more than ½ the standard rate of subsistence allowance, the permanent
secretary will make a ruling using the above concept on a case by case basis to ensure the fairness is done for both

23 National Conditions of Service, Section E5.4(f).

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the employee and the public fund. This is applicable only to official travels fully funded by the government ok
Kiribati.

3. Where the employee anticipates that there will be a requirement for this provision, they will seek and gain the
prior approval of the delegate to lodge in the accommodation required. Imprest will be paid at the designated daily
rate, with reimbursement made for the additional expenses incurred on the employee’s return to their duty station.

4. Where an employee chooses to stay in accommodation that s above the rate prescribed, there is no entitlement to
payment of a supplementary allowance.

Z.7.I.5. Variations and Disruption to the Itinerary

(1). If the travel arrangements of an employee are disrupted through no fault of the employee or significant
amendments need to be made to the itinerary after travel has commanded the employee should seek the approval of
the relevant delegated authority to vary the itinerary.

(2). Where approval is given, the employee may claim the additional subsistence allowances and other reimbursable
expenditure on return to their duty station.

(3). Where the disruption to the itinerary may have caused through a delayed flight, the employee must produce proof
from the carrier that they did not provide accommodation or meals during the delay. Where such proof is not provided,
no additional subsistence is payable.
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Z.7.1.6. Accounting for Expenditure

(1).The employee must acquit all allowances against their approved itinerary with 2 weeks of return to tier duty
station. Official receipts must be produced for hotel accommodation. Tickets and boarding passes must be provided
with the acquittal as proof of travel undertaken.

(2). All claims for reimbursable expenses are to be made at the same time as the employee acquits their allowances
that have already been paid. For reimbursable expenses, all invoices and receipts are to be kept to justify payment ad
they should be clearly itemized. Original receipts must be provided with the claim for payment. If receipts are not
provided, payment of any outstanding money’s owing to the employee will not be made.

(3). Any adjustment to the payment received by the employee must be made within 2 weeks of submission of the
acquittal.

(4). Payment of any outstanding allowances will not be made until the employee has submitted a brief report to the
Delegate detailing the travel undertaken and the outcomes of the travel. The Delegate will not approve the payment of
additional allowances or reimbursable until such report is received.

Z.7.1.7. Application Procedure for Overseas Travel

(1). The employee will apply to the relevant delegated authority in N1 for approval to travel. At a minimum the travel
application must include:

(a). The purpose and benefits that are expected to be gained from the visit.
(b). The relevance of the visit to the Government policy, strategy or duties of the employee.
(c ). A detailed itinerary including for example visits to organizations, meetings with individuals or conferences that
are to be attended.
(d). Travel times and intended accommodation.
(e) The names of people who are to travel.
(f). A full budget estimate with a breakdown of costs in $AUD (Allowing for exchange rates) for all those who intend
to travel. The estimate should include, but not limited to:

 Airfares including all airport taxes.

 Transfers.
 Cists of required visas.
 Subsistence allowances.
 Clothing allowances.
 Conference allowance.
 Conference fees if applicable.
 Travel insurance including, but not limited to health and repatriation to Kiribati.

(2). The budget estimate should include the budget source and also itemize the components of the itinerary that are to
be funded by a donor and those to be funded fr the budget of any sponsoring Government agency.

(3). On receipt of an application from an employee to travel on duty outside the Republic of Kiribati the relevant
delegated authority must review the costing to ensure that it is consistent with the government policy. The delegated
authority may then approve the travel, budget estimate and payment travel allowances, in writing.
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(4). The employee may then proceed to make travel arrangement and claim any payments in advance as per their
entitlements.

(5). The employee commences travel and retains all receipts during this time.

(6). The employee should seek and gain the prior approval of the delegated authority to lodge in the accommodation
required as stated in N1.4.

(7). On return the employee, within 2 weeks presents a report on the outcomes of the travel to the Delegated authority,
along with their reconciliation of their travel itinerary and any claim for reimbursable expenses.

(8). The delegated authority will approve any adjustments to allowances to be paid, in accordance with this policy. Any
adjustments are to be settled within 2 weeks of the delegate’s approval.

Z.8. AIR TRAVEL

Z.8.1.Airlines
All Government overseas travel arrangements shall be made through the operating airlines offering the least cost but
safe.

Z.8.1.1. Entitlement of Class for Air Travel

(1) The entitled class for air travel shall be as follows:

(a) Beretitenti and accompanying wife, Kauoman-ni-Beretitenti and accompanying wife, Cabinet Ministers
and accompanying wife, Speaker of the House and Chief Justice: First Class;

(b) Members of Parliament and accompanying wife, Ombudsman, Magistrates, Heads of

Government Departments/Corporations, Board Members, Heads of Missions: Business Class;

(c) Deputy/Assistant Secretaries/Directors/Commissioners/Registrars and Other employees: Economy

Class.

(2) With the prior written approval of the Financial Secretary, an employee entitled to travel by a lower class can
travel by a higher class if seats are not available in the entitled class and the journey cannot be postponed.

(3) To seek approval of the Financial Secretary, a written request shall be submitted to the Financial Secretary by
the employee through his head of department.
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Z.8.2. TRAVEL INSURANCE

All public servants are covered under the Kiribati Government Travel Insurance Policy. For purposes of insurance
cover, public servants include all employees of Ministries, Government Departments, all Public Bodies, and all
Statutory Offices. Currently, the Government Travel Insurance is placed with the Kiribati Insurance Corporation.

Z.8.3. LOCAL TRAVEL24

(1). Where an employee is required to travel and perform work at places other than his normal place of employment
within Kiribati and/or required to stay overnight at the other location, the Ministry shall be responsible to meet
reasonable expenses incurred by the employee on travel, accommodation and meals. In addition, the employee shall be
entitled to an allowance to meet petty personal expenses.

Z.8.4.1. Rates of Subsistence Allowance

(1) Where travelling within Kiribati on official duty, the following rates of subsistence allowance will apply for
each night the employee is required to be away from their normal duty station:

(a) If staying in a council rest house or any recognized and registered hotel, $45 per night.

(b) If travelling to an island where there is no council rest houses or other recognized and registered hotels,
$20 per night. (This is applicable to Kanton, Tabuaeran and Teraina).

(c) Where there is a recognized and registered hotel, but the employee elects to stay with friends or relatives,
$20 per night.

(d) For travel to Kiritimati, if staying in a recognized and registered hotel, $150 per night, fully accountable.

(e) $45 a day is payable to non-government participants attending workshops/meetings from Outer Islands
and $15 a day is payable to non-government participants attending workshop and/meetings from Tarawa.

(f) No substance allowance to an employee who is accommodated by another employee.

(2) Subsistence allowance for Kiritimati Island must be fully acquitted against the employee’s confirmed itinerary
and receipts on return to their normal duty station and any remaining funds must be returned to the
Government.

(3) Accommodation (where there recognized guest houses) and incidentals must be accounted for any subsistence
allowance and imprest drawn for duty travel to outer islands other than Kiritimati.

(4) Subsistence allowance is payable in respect of each period of 24 hours, necessary spent on duty away from an
employee’s station up to a maximum of 90 days, except Secretary for Public Service office may approve
payment of subsistence allowance in excess of 90 days, at a reduced rate of $10 per day.

(5) Where an employee travels overnight by air or by sea and their passage has been provided for, no allowances
are payable for that night.

(6) No subsistence allowance is payable in respect of periods spent in transit where meals and accommodation is
provided by the carrier.

24 As per National Conditions of Service, section E4

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Z.8.4.2. Transit and hospitality allowances

(1). Hospitality allowance

(a) An employee who is requested by Government to accommodate a visitor other than another employee or
Government officer may be paid hospitality allowance at the rate of $10 a day.
(b) An employee who accommodates another employee or Government official or Statutory Corporation who
is eligible to draw subsistence allowance may be paid hospitality allowance at the rate of subsistence
allowance applicable to the officer accommodated.

(2). Transit Allowance

(a) A person who is required to accommodate an employee who is on transfer or travelling on a leave and
who is transiting awaiting transportation to his/her new station or home island, may be paid a transit
allowance in accordance with the special circumstance of the employee as follows:

 If single $3.75 a day.

 If married $6.25 a day.

(b) Where an employee is required to ravel on official duty and that travel requires transit through a foreign
country, the employee will be entitled to subsistence allowances for the period of transit at the rates and
condition applicable for international travel.

(4) Transit allowance is only applicable to cases which involve travelling on transfer or on leave and where an
employee is on transit awaiting transportation to duty station or home island. Only those who provide
accommodation to employees who have not reached their duty/leave destination are entitled to apply for such
allowance. This allowance is not applicable to persons accommodating employees who have reached their
final duty or leave destination.

Z.8.4.3. Incidental Expenses

1. Where an employee incurs a legitimate work related expense during a period of travel within Kiribati such as
telephone or radio calls for official purposes, they will be reimbursed for that expenditure if it was authorized
by the Senior Responsible Officer. Expenses incurred without authorization do not attract an automatic
reimbursement.

2. Reimbursement of private expenses are not permitted.

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Z.8.4.4. Variations and Disruptions to the Itinerary

1. If the travel arrangements of an employee are disrupted through no fault of the employee or if for valid work
reasons significant amendments need to be made to the itinerary after travel has commenced, the employee
seeks approval from the Senior Responsible Officer for the amendments to the itinerary.
2. The employee will be entitled to additional subsistence allowances for additional nights they are required to be
absent from their normal duty station.
3. Where any change to an itinerary is at the request of the employee and the Senior Responsible Officer does
not approve the variation, no additional allowances will be payable.

Z.8.4.5. Accounting for Expenditure

1. A budget estimate should be prepared that itemizes the costs of travel, allowance and temporary duty will be
approved by the Senior Responsible Officer prior to the commencement of any travel by an employee.
2. Allowances paid for travel to Kiritimati Island must be fully accounted for, and any sums not duly accounted
for must be repaid to the Government of Kiribati.

Z.8.4.6. Procedure
(1).All duty travel will be submitted to the Senior Responsible Officer for approval prior to the commencement of the
travel. Requests for approval will include a budget and the source of funding for the travel. Where the travel is for
more than 3 months, the Senior Responsible Officer will submit the travel to the Secretary for the Public Service
Office for endorsement and noting on the employee’s Personal File (PF).

(2). Where travel is approved by the Senior Responsible Officer, the employee will be required to undertake the travel
in accordance with their duties and the allowances provided for in the policy.

(3). The employee will submit a claim for allowances at least one week in advance of the travel, based on the approved
travel itinerary. The allowances request will be approved by the Financial Delegate in the Ministry. The allowance
will be paid to the employee no less than 3 days prior to the travel.

(4). In accordance with the policy, employees travelling on duty for periods in excess of three months may only be
advanced allowances for the initial three months. Additional payments will be made once acquittals have been
received for the payments made.

(5). Within two weeks of return to their duty station, the employee will acquit the allowances paid, substantiating the
acquittal with proof of travel (boarding passes, tickets) and proof of accommodation in a registered hotel where
required.

(6). Where the travel is for a period of three months, the employee will acquit their allowances monthly, unless their
duty station is so remote that this acquittal is not possible. In these cases, the Senior Responsible Officer will confirm
with the employee in writing what acquittal is required for allowances and when the acquittal will be due.

(7). Any amendment to the allowances due will be rectified within two weeks of the submission of the acquittal.
Z.8.5. ACCOUNTABLE ADVANCES FOR OFFICIAL OVERSEAS TRAVEL
Z.8.5.1. Travel Accountable Advances and Approving Authority
The Cabinet may approve accountable, for any Minister, officer or other Members of the Legislative Assembly, or a
person in the service of the Government who is about to travel overseas on behalf of the Government. The
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Accountable Advance is approved for the purpose of unforeseen expenses that are related to any Government
delegates that are travelling.

Z.8.5.2. Conditions of Advance

(1) The officer who has taken the accountable advance as approved by Cabinet during travelling shall submit
receipts, in respect of all the expenses met out of the advance amount for the purpose it was intended for.

(2) The accounting officers in the Department concerned shall be primarily responsible to ensure that:

a. The accountable advance for traveling and expenses is fully accounted for by the officer traveling
overseas;
b. The statement of expenses submitted by the traveling officer is fully supported by receipts, except
when it was not possible for the traveling officer to obtain receipts. In all such cases the explanation
for non-production of receipts shall be recorded in the statement of expenses by the traveling officer.
The accounting officer shall satisfy himself on the reasonableness of the explanation furnished by the
traveling officer;

c. The unspent portion of the advance and the expenses agree with the total amount of advance given to
the officer unless expenses exceed the amount of the advance;

d. The Accountant General must be supplied with this statement within fourteen days of the officer’s
return from overseas with the receipt of the unspent portion of the accountable advance credited to the
Department vote item

(3) Any money unaccounted for in respect of the advance, must be repaid by the officer concerned at the time of
submitting his statement of expenses unless directed otherwise by the Accountant General.

(4) If, at the end of thirty (30) days, the total of the advance has not been accounted for, as set out above, then it is
to be recovered from the salary or other emoluments due to the person concerned, at the rate of up to one-fifth
(1/5) of each gross salary payment or other emolument until the total amount outstanding is repaid.

(5) Each person receiving an accountable advance for overseas travel must sign a certificate to acknowledge that
he understands the conditions attached to the advance before receiving an Accountable advance cheque.
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Z.8.6. CLEARANCES AND PERMITS FOR OVERSEAS TRAVEL

(1) When a clearance is presented for signature, departments are to check that there are no debts outstanding
against the person desiring the clearance. Both names shown on the form i.e. the name commonly used and
the name shown on the birth certificate are to be checked.

(2) If there are no debts owing, the clearance form may be cleared by the full signature across the department’s
stamp of the officer authorized by his Department Head to sign clearances.

(3) If there is a debt outstanding, the debtor is to be told and requested to pay the debt. If it is paid, the clearance
may be signed. While the debt is outstanding the clearance is not to be signed unless specific authority to do
so is given by the Financial Secretary who may invoke the provisions of Section 6 of the Permits and Passport
Ordinance 1961 to prevent the issue of travel documents to any person whose departure from Kiribati may
hinder the collection of any money due to Government.

Z.8.7. TRAVEL DOCUMENTS

Employees travelling on Government official trips using their own Kiribati passports will not be paid by the
Government unless an official Government passport is requested subject to the respective Secretary’s or Senior
Responsible Officer’s approval. In the event the official Government passport is applied the cost is exempted.

Z.8.8. TRAVEL VISA PAYMENTS

Any travel to countries whereby official Visas are not required employees will not be paid or reimbursed of any visa
claims.

Z.9. FINANCIAL REPORTING

Z.9.1. OBJECTIVE OF FINANCIAL STATEMENTS
A financial statement should reflect true and fair view of the affairs of the organization. As these statements are used
by various constituents of the society / regulators, they need to reflect true view of the financial position of the
organization.

Z.9.2. QUALITATIVE CHARACTERISTICS OF FINANCIAL STATEMENTS

Qualitative characteristics of financial statements include:

• Understandability
• Reliability
• Comparability
• Relevance
• True and Fair View/Fair Presentation

Z.9.3. PREPARATION OF FINANCIAL STATEMENTS

The Accountant General shall prepare and send to the Auditor General the financial statements for the year in the form
specified in Section 40(1) of the Public Finance (Control and Audit) (Amendment) Act 2010 and as required by any
other Act the Public Accounts are required to be submitted not later than 6 months after the end of the financial year.
Z.9.4. AUDIT OF FINANCIAL STATEMENTS
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(1) The Auditor General shall examine the public accounts and provide a written report to be attached to the public
account for presentation to the Legislature25. The report shall state whether, in the opinion of the Audio General,
the public accounts -

(i) Have been prepared in accordance with the Public Finance (Control and Audit) (Amendment) Act 201026
and any other relevant Acts; and

(ii) Present fairly the matters required by these Acts.

(2) If the Auditor General s not able to report as per paragraph (1) above, he shall state the reasons for the same.

(3) If the Auditor General is of the opinion that he did not obtain all necessary information and explanations, he shall
give particulars of the shortcomings.

(4) The public accounts together with the report of the Auditor General will be returned to the Accountant General
when it is finished with its audit opinion.

Z.9.5. SUBMISSION OF PUBLIC ACCOUNTS AND AUDIT REPORT

The Public Accounts together with the report of the Auditor General shall be laid by the Clerk of the House before
the Legislature.

Z.10. OVERSEAS MISSIONS

Z.10.1. OVERVIEW
The Kiribati Government through the Ministry of Foreign Affairs & Trade (MFAT) maintains representation offices in
several countries. For financial accounting and management purposes, each mission operates on an imprest account
basis with budget funds being advanced to the mission bimonthly based on the needs of the mission and the time it
takes to obtain reimbursement from Kiribati. The mission is to submit financial returns with details of their receipts
and expenditure on a regular basis and an acquittal for each budget transfer. The imprest account is to be operated at a
bank nominated by Treasury.

Currently, there are 3 overseas missions:

 Kiribati High Commission Suva, Fiji

 Kiribati Embassy Taipei, Taiwan
 Kiribati Embassy New York, USA

Each mission is responsible for the receipt and expenditure and control of public moneys in accordance with the
requirements of the Public Finance Act 1976, Regulations, Treasury Operational Manual and Consular General
Instructions and Foreign Affairs Instructions and Regulations.

25 Public Finance (Control and Audit) (Amendment) Act 2010, Section 34(4).
26 Public Finance (Control and Audit) (Amendment) Act 2010, Section 34(1-3)
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The Ministry of Foreign Affairs and Trade shall ensure that any instructions issued by it to the Missions under its
control in respect of receipts, expenditures and control of public money are consistent with the Public Finance Act,
Regulations and Treasury Operational Manual.

Z.10.2. BUDGET FORMULATION

Z.10.2.1. Submission of Estimates by Missions.

(1). Following receipt of advice from the Ministry of Foreign Affairs and Immigration (MFAI) requesting estimates of
revenue and expenditure, the Head of Mission (HOM) will prepare the Mission’s estimates. The estimates should be
prepared in the local currency of the country in which the Mission is based.
(2). Details of any capital works or capital purchases must be provided with the estimates. Note:
no capital works may commence or be purchased without prior approval of Cabinet as conveyed through the MFAI.
(3). The estimates and supporting information must be forwarded to the MFAI for inclusion in the Ministry’s
estimates.

Z.10.2.2. Inclusion in Ministerial estimates

The MFAI upon receipt of the Missions estimates and where appropriate after consultation with each Mission will
include the budget proposal for each Mission in the Ministry estimates. The foreign currency budget proposals must
be converted into Australian dollar at the official budget rate determined by Ministry of Economic, Finance and
Development (MEFD) during the Budget Consultations.

Z.10.2.3. Inclusion in Final Estimates

The budget proposals of the MFAI which include the budget proposals of the Missions shall be scrutinized in the
National Economic and Planning Office of the MEFD. After scrutiny and if considered necessary after consulting the
MFAI the estimates of the Ministry and the Missions shall be included in the final estimates of the annual budget.

Z.10.2.4. Communication of Approved Budget

Following approval of the annual estimates of expenditure for Recurrent and Development Budgets by the Legislature
the MEFD shall release the following documents:
 Approved Budget and Development Budget.

MFED will send copies of the Approved Budget to the MFAI for them to notify each Mission. In conjunction with the
release of the approved estimates for the new financial year, MEFD will forward to MFAI, the chart of accounts for
distribution to the Mission offices.
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Z.10.3. FUNDING OF MISSIONS

Z.10.3.1. Budget Advance to the Missions
On the basis of the approved budgets of the missions, the MFED shall transfer the funds required for the operation of
the missions to the Missions’ Imprest Bank Account as a budget advance based on their requests and their cash
forecasts provided for the whole year.

Each mission shall submit an Acquittal Report for each advance to the MFAI with a copy to MEFD. Each advance
must be acquitted prior to the transfer of further budget advances.

Z.10.3.2. Imprest Bank Account

(1) Each Mission operates an Imprest Account with the funds held in an approved bank account. The
Minister of Finance must approve the establishment of the bank account prior to the account being
opened. Details of the bank account are recorded in the bank register kept at MEFD. MEFD must be
advised immediately of any changes to cheque signatories or the operation of the Mission bank account.

(2) All public moneys received by the Mission must be promptly banked into the Imprest Bank account. All
cheques and authorities authorising withdrawals from the Imprest Bank Account must be approved by
two authorised signatories with the exception of the Mission with one authorised signatory. The Imprest
Bank Account must be reconciled at least monthly by the Mission and any queries should be promptly
referred to the Bank for resolution.

(3) On receipt of the funds into the Mission Bank Account, the mission must fax an acknowledgment of the
funds received to the Ministry of Foreign Affairs & Trade with a copy to the Accountant General.

Z.10.4. FINANCIAL RETURNS & ACQUITTAL REPORTS

Z.10.4.1. Financial returns
(1). For the mission’s receipts (reimbursements, rebates, etc) and expenditure, each mission shall submit one financial
return per month to the MFAI with a copy to the Treasury for the periods.

(2). The financial return must consist of:

 A Receipts Register together with the duplicate copies of each receipt that relate to the Mission’s Imprest
Account or Treasury Account
 Payment Register with copies of the payments and supporting documentation
 The Output/Natural Account code to be charged for each receipt and payment must be identified on the
receipts and expenditure vouchers.
 Cash Book Certificate for Imprest Account or Treasury Account where applicable
 Bank reconciliation of the Mission bank account(s)
 Bank statements for the month

For Mission offices making revenue deposits into the Treasury Fund, a cashbook certificate form must be submitted
every month.
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(3). To ensure the timely reporting of financial data within the Government of Kiribati’s financial accounting system,
the Missions must submit the soft copy27 of the financial returns to the MFAI with a copy to Treasury within 2 working
days after the end of each reporting period.

(4). Originals are to be sent to MFAT with copies for Treasury and the Mission office for auditing purposes.

(5). The Ministry of Foreign Affairs & Trade and the Ministry of Finance will review the returns and advise of any
queries for resolution.
Z.10.4.2. Acquittal Reports
At the end of each month budget advance period of the financial year, the Missions shall prepare an Acquittal Report
in the local currency of the mission for the previous budget advance and submit them to the MFAI. The Acquittal
Report shall consist of the following statements:
(1) Statement of the advance received, receipts and payments for the same period and the balance of the
advance; and
(2) Budget Summary Comparison Statement - comparing actual receipts/expenditures to budget for the
advance period and year to date.
(3) The total receipts and expenditure in the Acquittal Report should reconcile to the financial returns
submitted by the mission for the budget advance period as per Instruction P.4.1.
(4) Each advance must be acquitted prior to the transfer of the next budget advance.

Z.10.4.3. Processing of Acquittal Report

(1). The MFAI shall review the Acquittal Reports submitted by the Missions and after satisfactory resolution of any
queries, shall calculate the amount of the next budget advance to be transferred to the Missions; bank accounts and
prepare the necessary documentation for the foreign amount.

(2). All the entries and Acquittal Reports received from the MFAI shall be checked by the responsible senior staff in
Treasury. After satisfactory resolution of any queries, the responsible staff in Treasury shall enter the rates for
conversion of entries before processing them for posting into the General Ledger.

(3). Any costs incurred as a result of a delay in the transfer of budget advances caused by the time taken to
satisfactorily resolving queries on the mission’s receipts and payments shall be charged to the mission’s output.
Z.10.4.4. Processing of Budget Advance
(1) After the entries are forwarded to the Treasury, the MFAI shall calculate the amount (in local currency of
respective missions) of the next budget advance to be transferred to the Missions’ bank accounts.
(2) The MFAI shall prepare the documentation for the amount to be transferred (foreign amount) and refer to
the Treasuryfor a special rate conversion.
(3) The Treasury shall check the amount of budget advance proposed by the MFAI before approving the
payments.
(4) The budget advance will be directly transferred to the mission’s bank account.
(5) The mission shall acknowledge the receipt of funds to the MFAI with a copy to Treasury.

27 By Email
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Z.10.4.5. Financial Return by Treasury

At the end of the month, the MFAI shall produce a Budget Comparison Report for each Mission and send copies of the
Returns to the Missions.

Z.10.5. FINANCIAL RECORDS AND CONTROLS

Each mission must maintain financial records to record and manage the receipt and expenditure of public moneys and
the operation of the Imprest Account. Records must also be maintained to manage expenditure against budget.
The key financial records within the mission’s accounting system that should be maintained are:
Table 6: Mission’s financial records

Receipt Books Official Government of Kiribati receipts must be issued for

the receipt of all public moneys

Receipt Register To record in sequence all receipts issued.

Payment Register To record in sequential order all payment’s issued

Allowance and Wage Records To record approvals and payments

Acquittal Report To record expenditure commitments against budget

Assets Register To register all assets procured

Monthly Cash book Certificate To record all receipts and payments of the Imprest Account
and the balances of the account

Bank Statements

Bank Reconciliations The cash book certificate balance of the Imprest bank
account must be reconciled monthly to the bank statement
balance and any discrepancies investigated and quickly
resolved. Un-presented cheques & reconciling items must
be followed up to ensure they are presented promptly.
Stale cheques are to be dealt with in accordance with
Paragraph G.16 of the Treasury Operational Manual

The following Official Government of Kiribati Forms must be used:

 Official Government Receipts

 Receipt Register

 Payment Register

 HR/Payroll Authority
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 General Payment Voucher

 Pay Sheet

 Monthly Cash Book Certificate

 Representation Allowance Return

 Petty Cash Voucher

 Petty Cash Payout Schedule

 Acquittal Report

Z.10.6. RECEIPT OF PUBLIC MONEYS

Z.10.6.1. Guidelines
Missions may receive revenue for goods and services provided by government departments. An official Government
of Kiribati receipt must be issued for all public moneys received by the mission. Missions should obtain official
Receipt Books from Treasury through the MFAI. Receipt books must be safeguarded and all receipts (including
cancelled receipts) must be accounted for.

All public moneys received must be properly accounted for and promptly banked into Imprest Bank Account/Treasury
Bank Account as follows:-

• Revenue receipts – into the Treasury Fund Bank Account, or for those Missions which do not operate a
Treasury Fund Bank Account into the Missions’ Imprest Bank Account
• Refunds, rebates or reimbursements related to Mission expenditure – into the Missions’ Imprest Bank
Account.

The receipt and safeguarding of public moneys provided in this TOM shall be observed at all times.

Z.10.6.2. Procedures
Receipt Books
(1) Request for Receipt books are to be made through MFAI in Tarawa who will issue an unused receipt book on the
presentation of the last completed book. The Mission must ensure that unused receipt books are stored in a secured
locked area.

Receipt of Public Moneys

(2) The Mission must prepare and issue an official government receipt for all moneys received. Receipts
must also be issued for any moneys directly deposited into the Mission bank account (except for the
monthly acquittal of budget funds).

(3) The original receipt should be given or sent to the payer (where practical)
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(4) Cash is to be balanced at the end of each day and where practicable banked the same day to avoid
retaining large sums of money overnight
(5) The Head of Mission must check the receipts and banking of moneys and the recording of revenue in the
Mission’s cashbook. Moneys received must be:

 checked against the total receipts issued

 recorded in the Mission cashbook with the relevant Output/Activity Code
 checked against the bank lodgements prepared for banking28
 banked into the Imprest Bank Account or Treasury Fund Account where applicable
 after depositing of funds into the relevant bank account, check the bank deposit slip for the bank
stamp to ensure there has been no alteration to the amount banked.

(6) If a cheque is dishonoured, the Mission must pursue the recovery of the moneys. If the moneys cannot be
recovered, the dishonoured cheque amount must be recorded in the cashbook as a negative receipt
referencing the previously issued receipt number
(7) A Receipts Register summarising the receipts and the duplicate copy of the relevant receipts must be
forwarded to the MFAI, Tarawa with a copy to the Treasury as part of the financial returns of the Mission
at the end of each month.

Z.10.7. CREDITOR PAYMENTS

Z.10.7.1. Overview
(1) Payments may only be made for goods and/or services in accordance with the purposes for which the
annual appropriation was provided. The annual appropriation must not be exceeded and to ensure that the
appropriated amounts are not overspent a system of monitoring commitments must be established by the
mission.
(2) All payments must be approved by the Head of Mission or a properly delegated certifying officer in
accordance with the TOM.
(3) Prior approval of the Secretary MFAI must be obtained for the payment of funds in excess of any set limit
for the mission’s payments.

(4) Capital expenditure must be approved by Cabinet prior to commitment of funds even when funds have
already been appropriated. Cabinet approval is obtained via the MFAI.
(5) Approval is required from the Secretary MFAT for commitment and expenditure of funds for all purchases
on behalf of other Government Ministries or agencies
(6) All cheques or direct debit bank authorities must be signed by 2 authorised signatories. However, in the
case of small Mission offices where two signatories are not available, the Accountant General with the
prior approval of the Minister of Finance may authorise one signatory on receipt of a written request from
the Mission through the MFAI.
(7) Missions that are using debit cards for payments must comply with the Procedures below.

Z.10.7.2. Procedures
28 Initialling the bank deposit slip as being checked
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(1) Raise an order for the goods/services required (if applicable). Note:
 purchasing must be made in accordance with the Treasury Operational Manual,
 Capital expenditure requires the approval of Cabinet prior to the commitment of funds.
This is to be done through the MFAI.
 sufficient funds must be available for the proposed purchase and the availability of funds
must be certified on the Order together with the relevant Output/natural account code
(2) Where appropriate, forward the completed order to the supplier
(3) Record the payment in the Mission’s Payment register against the relevant Output Natural account Code
(4) On receipt of the supplier’s invoice, check that the goods/services supplied are satisfactory and the total
amount payable agrees with the order.
(5) Prepare a Payment Voucher (PV) for the payment in accordance with Treasury Operational Manual Part
G. Note:PV must be numbered sequentially. A payment register must be maintained noting the
numbering sequence and recording the details
 The invoice must be attached to the payment voucher as well as the statement if possible (but the
statement by itself is not sufficient documentation to support payment). The relevant Output/natural
account codes must also be recorded on the payment voucher.
 Whenever feasible, payments for air tickets should be supported by the used ticket or other relevant
supporting documents (e.g. Electronic ticket boarding passes)
 Personal claims must be supported by a signed claim from the relevant officers setting out the date,
nature of the expenditure and amount together with receipts, if available  Prior approval of the
MFAI must be obtained for the following payments:
1. Medical and dental expenses greater than the approved amount.
2. Officers’ travel expenses and personal claims other than wages and allowances to staff of
the Mission
3. Official entertainment expenses
 No salary may be made to any staff member for any reason without the prior approval of the
Secretary for MFAI and/or the Accountant General.
 Payments of less than $50 local currency should normally be made from petty cash.
(6) Payment voucher to be approved for payment by the Head of Mission after preparation and check by the
officer in charges of accounts.
(7) Certifying Officers must not approve their own claims. If no other person is available, then the payment
voucher should be noted accordingly
(8) Prepare a cheque or a bank direct debit authority as per the approved payment voucher and record the
cheque number or bank direct debit receipt reference on the top right hand corner of the payment voucher.
Missions using bank debit cards are also required to adhere to the same process outlined above.
(9) The relevant “output number” and “natural account code” shown in the estimates is to be entered in the
appropriate column on the payment voucher.
(10) Payment voucher is to be recorded in a Payment Register in accordance to the voucher number
sequence within the financial year.
(11)The cheque or bank direct debit authority must be signed by at least 2 authorised cheque signatories after
sighting the payment voucher and supporting documentation.
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Note:
 Particular care should be taken in the writing of cheques to ensure the payee’s name is correct, the amount in
figures is the correct amount to be paid, the words agree with the amount in figures and blank spaces do not
appear before or after words and figures.

 Debit cards must be securely kept in the Mission and the pin number to be kept confidential by the certifying
officers.

 Blank cheques must never be signed

(12) Record the payment in the Mission’s payment register and cashbook, recording the following details:

 Date
 Cheque Number/Bank Direct Debit Reference/bank debit card receipt reference
 TY1 (Voucher) number
 Claimant
 Details and nature of payment
 Amount
 Output/ natural account code

(13) Cancelled cheques must be recorded in the Payment register and all cheque numbers must be
accounted for and submitted to the MFAI.
(14) Cheques should be either mailed or delivered to the supplier/claimant and bank direct debit authorities
should be delivered to the bank.
(15) A Payment Register and the original payment vouchers and supporting documents must be forwarded
to the MFAI with copies to Treasury as part of the financial returns of the Mission.

Z.10.8. ALLOWANCES AND WAGES PAYMENTS

Z.10.8.1. Guidelines
(1) All appointments and rates of pay for locally engaged staff must be approved by the Secretary, MFAI.
Locally engaged staff of the Mission is recruited on terms and conditions consistent with the prevailing
market conditions of the country in which the Mission is based.

(2) Posted staff Allowances and wages shall be paid in line with Cabinet directives and the terms and condition
of employment. Posted staffs are paid a local salary through the Government payroll system in Kiribati and
in accordance with the Kiribati Public Service terms and conditions. Allowances may be paid from the
Imprest account to the posted staff by the Mission in accordance with:

• Cabinet approvals,
• approvals from the MFAI and
• The fortnightly/monthly entitlements calculated and advised by Treasury.

(3) No salary or wage advances may be made to an officer or employee from the Mission’s Imprest bank
account without the prior approval of the Secretary, MFAT and the Accountant General.
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Z.10.8.2. Procedures
Z.10.8.2.1. Locally Engaged Wage Employees

(1). Locally engaged employees are appointed by the Secretary, MFAI on the
recommendation of the Head of Mission

(2). Locally engaged staff must sign employment contracts approved by the MFAI based on
the terms and conditions of engagement with the Mission and country of post.

(3). Wage and personnel records for each locally engaged employee of the Mission,
together with any other required statutory record, must be maintained.

(4). Locally engaged staffs are responsible for payment of statutory requirements in line
with local employment laws within the country of post. These would include where
appropriate the following provided that the relevant documentation are submitted:

 Taxation payments
 Superannuation payments

(5). The payments for wages and associated wage costs must be processed and approved in
accordance with the procedures for the payment of claims for goods and services to
creditors.

(6). Full details of wages payments must be recorded on the Pay Sheet and the Mission’s
Payment Register &.Monthly Cashbook Certificate. The approved payment vouchers must
be included as part of the Payment Register in the monthly financial returns of the Mission.

Z.10.8.2.2. Allowances for Posted Staff

Guidelines
(1). Allowances paid to posted staff shall be in accordance with Cabinet directives and stipulated in the Terms and
Conditions of Employment signed with MFAI. These allowances may include:
 Location allowance – to be included in fortnightly allowance
 Incidental allowance – to be included in fortnightly allowance
 Clothing allowance – officer - paid in lump sum on an annual basis
 Clothing allowance for the child(ren) of the officer – paid in lump sum on an annual
basis
 Child allowance – paid in lump sum on an annual basis
 Representation allowance – paid in lump sum on a six (06) monthly basis
 Domestic Help – to be included in fortnightly allowance only for Head of Missions

(2). MFAI will arrange for Treasury to calculate and authorise the regular fortnightly payment overseas allowances in
accordance with Cabinet approvals.

(1) Prepare a payment voucher for the allowances that are to be paid to posted staff and attach the Treasury
authority advice to the payment voucher.
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(2) Process the payment voucher in accordance with the procedures for creditors payments
(3) Record the payment in the Mission’s Payment Register and Cashbook Certificate.
Z.10.8.3. Representation Allowance
The Representation Allowance (RA) is made available to posted staff 8 on the authority of the Secretary, MFAI, to
cover the sundry costs of entertainment during the conduct of diplomatic and official duties while on posting. These
will include the following:

 Morning and afternoon teas with official guests

 Official Luncheons
 Official dinner functions
 Club subscriptions relating to official duties
 Donations to a maximum amount approved for each mission in the local currency of the country
of posting for official invitations and fund raising events.

Ideally, the RA is paid in advance every six months and the allocated RA must be fully accounted and to the
satisfaction of the Secretary, MFAI before the next six months payment can be made.

MFAI must thoroughly check the Representation Allowance return together with the receipts and relevant supporting
documentation to account satisfactorily before the release of the next six months advance.
Z.10.8.3.1. Procedures
Posted staff
1. ensure that returns are filled in progressively over the 6 months period
2. Appropriate documentation is required to be provided together with the RA Return
to support the utilisation of the RA E.g. a letter of invitation, copy of cheque,
receipt, names of guests entertained etc
3. forward by mail or by email promptly at the end of each 6 months period or when
the amount is fully spent the Representation Allowance return to the MFAI to
authorise the next six months allowance
4. ensure that in every case Representation Allowance is not to be paid without the
written authority from the MFAI
5. arrange for payment of the representation allowance from the Mission Imprest
Account as soon as authorisation is received from MFAI in accordance with the
procedures for creditors payments (Refer to the Creditor Payments Section of this
Treasury Operational Manual),
6. record the payment in the Mission’s Payment Register

Requirements by MFAI

(1). Review the allowance return for accuracy and completeness

(2). If all in order, arrange for the approval to be forwarded to the Mission Office by mail or
scanned copy via email
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Z.10.9. MISSION PETTY CASH FUND

Z.10.9.1. Overview
Each mission may establish a petty cash fund for the payment of low value goods and services (up to $50 local
currency). Approval for the establishment of a petty cash fund or variation to the fund amount must be obtained from
the Secretary for MFAI. The total fund should not exceed $500 local currency. The petty cash fund is the
responsibility of the Mission and must be operated in accordance with this TOM.

The petty cash fund together with the petty cash expenditure records must be retained in a lockable cash box by the
petty cash holder.

Z.10.9.2. Procedures
(1) Each item of expenditure from the petty cash fund must be recorded on the Petty Cash Voucher which
must show:
a) Date
b) Petty Cash Voucher Number
c) Claimant
d) Nature of expenditure
e) Amount of expenditure
f) Output/natural account code

(2) The receipts must be attached to the appropriate petty cash voucher which will then be summarised in the
Petty Cash Payout Schedule.
(3) To reimburse the petty cash fund the Mission must reconcile and certify the Petty cash Payout Schedule to
confirm cash on hand. The total of the cash held and the paid Petty cash vouchers must equal the
approved total of the fund.
(4) A Payment Voucher must be prepared attaching the Petty Cash Payout Schedule, Petty Cash vouchers and
original receipts.
(5) A reimbursement of the petty cash fund must be prepared and processed as at the 31st December to record
the relevant expenditure natural account codes that has incurred in the correct financial year.
Z.10.10. LEAVE RETURNS
All posted staff are entitled to annual and sick leave while on mission assignments and in line with the current Public
Service Commission’s leave policies where necessary.

At the end of each month, the authorised officer at each Mission is to send to MFAI a leave return summary attaching
up to date copies of all leave returns showing the following details of leave taken by each posted staff:

• Local leave (dates and total days)

• Sick leave (dates and total days
• Leave without pay (dates and total days)
• Special leave – This can only be taken once the Secretary, MFAI approval is obtained.
Z.10.11. MISSION VEHICLES
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At each mission the Government-owned vehicles shall be adequately maintained and used to the best advantage of the
mission as a whole. The responsibility for the efficient operation of transport rests with the Head of Mission and the
officer in charge of administrative matters. The daily supervision of the vehicles and drivers will be the responsibility
of the Officer in Charge of administrative matters.

The Mission shall:

• Maintain accurate vehicle running sheets for all vehicles, showing the date and time of each run, and the
nature of the work being carried out. The time sheets must be checked by the Officer in Charge of
administrative matters.
• Keep a vehicle maintenance record to ensure that every vehicle is properly maintained.
Z.10.12. ASSET REGISTER
Asset Definition

(1). Assets play an important role in the operations of the Mission and represent a significant investment of resources.
Non-consumable Assets are all individual items of property or equipment that have a value of more than a ST$1000
with a useful life of more than 1 year. An item is also categorised as an asset subject to meeting the following
categories:

 Computers, printers, scanners, photocopiers, cameras, external hard drivers, laptops, PC viewers,
furniture;
 Any item that has a useful life of 1 year or more years.

(2). Each Head of Mission has the responsibility to authorise the purchase in accordance to the Schedule and the
delegated authority of Secretary, MFAI.

(3). Fixed Assets are to be inventoried, safeguarded, maintained and controlled by all Mission staff.

(4). Each Mission shall maintain an Asset Register to keep record of all assets procured/received. The following
details must be recorded:

(i) Date of purchase

(ii) Mission reference number
(iii) Item purchased
(iv) Cheque and cost
(v) Location of asset
(vi) Comments on state of asset

(5). Assets should be labeled accordingly on the Asset Register as soon as they are procured

(6). The register shall be reviewed periodically 29 with assets maintained in accordance with Paragraph I.4.3 of the
Treasury Operational Manual. Assets identified for write-off or disposal is to be processed in accordance with
Section 45 of the Public Finance (Control and Audit) (Amendment) Act 2010 and the Asset Register updated
accordingly.
29 Recommend to review Asset Registers every 6 months and when there is a change of posted staff.
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(i) Each Mission Office is responsible for the maintenance and safe keeping of their assets.

(ii) Any discrepancy between existing assets and the assets recorded in the Asset Register must be investigated
immediately by the Head of Mission and Officer in charge of administrative matters and where necessary the
irregularity must be reported back to the Secretary, MFAI for information on action taken.

(iii) The Asset Register is to be reviewed either bi-annually and when there is a change of posted staff, with an
updated copy of the register to be forwarded to the MFAI.

Z.10.13 WRITE OFF OF ASSETS AND DISPOSAL OF FIXED ASSETS

a) Assets for write offs are to be carried out in accordance with section 45 of the Public Finance (Control and
Audit) (Amendment) Act 2010.
b) The decision to dispose Fixed Assets either through trade-in, sale by tender or direct sale, donation or disposal
rests with the Head of Mission.

c) Assets identified to be written-off are to be reported to the Secretary MFAI promptly using the Application for
Authority to Write off Assets. MFAI will submit the completed application to the Accountant General,for
appropriate action based on recommendation by the Secretary MFAI.

d) All amounts approved for write-off shall be reported in the public accounts in accordance with Section 40 of
the Public Finance (Control and Audit) (Amendment) Act 2010.

Z.10.14 CAR LOANS

Posted staffs are eligible to apply to the Secretary, MFAI for Car loans. The application will then be referred to the
Accountant General to action in line with current car loan process.

The Accountant General upon receipt of the application from MFAI will make the final decision on the application
and liaises with the relevant posted staff on the car loan agreement and other important details through the Secretary,
MFAI.