News and Updates from the Family

Issue 19 | June 22, 2022

Best Practice (BP):

Best practices are specific, discrete ministry activities that measurably increase program scale, effectiveness, and/or efficiency, and can be replicated by other National Ministries. Best practices should be supported by evidence (data).

Procurement Policy Development

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Developing a written procurement policy is a necessary control for your ministry – laying out guidelines to follow when purchasing and minimizing risk of fraud. Corruption is the number one fraud scheme that affects non-profits – examples include purchasing schemes, invoice kickbacks, bid rigging, etc.

A procurement policy clarifies the roles, decision-making processes, authority, and responsibilities for procurement. As with other policies, the goal of the procurement policy is to provide structure and consistency.

A procurement policy is:

  • A practical tool to ensure compliance.
  • An organizational reference document – explaining how things will be done.
  • A piece of the control environment (eliminating fraud and theft).
  • A guide for decision-making.
  • A training aide.

Planning Considerations

  • Identify the purpose of a finance policy for your organization.
    • Some essentials to the purpose are:
      • Conforming to sound accounting principles and practices.
      • Enabling management to obtain accurate and timely financial reports whichpromotes sound financial management.
      • Ensuring correct and accountable use of funds and resources.
    • Conduct a needs assessment with your finance and executive committee.
    • Identify roles and responsibilities.
    • Conduct an informal risk assessment.
    • Draft the financial policy.
      • Suggested areas for a finance policy:
        • Philosophy
        • Authority
        • Roles and Responsibilities
        • Conflict of Interest
        • Budgeting
        • Gifts
        • Organizational Financial Processes
      • Review, discuss and document feedback from staff and board leadership.
      • Present the final version to the board for approval.
      • Train staff on the financial policy.
      • Review the policy regularly (recommend every six months).

Required Resources

1. Human Resources

  • Someone will need to lead the development of the policy.
  • Someone will need to document the policy discussions and decisions.
  • Someone will need to gather feedback from stakeholders.
  • Someone will need write the policy.
  • Someone will need to conduct training.
  • Someone will need to lead regular policy review.

2. Collateral

  • Document the draft(s) and final approved policy.

3. Time

  • Time to conduct a needs assessment.
  • Time to meet with stakeholders.
  • Time to write draft policy and make changes.
  • Time for the board to meet to approve the policy.
  • Time to train staff and volunteers on the policy.
  • Time to review the policy regularly.

4. Space

  • Space to hold meetings and to conduct training.

5. Cost

  • The cost varies.
  • Considerations include meeting/travel expenses and types of communication (email, phone, text).

NM with Demonstrated Experience in this BP