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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Benefits

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.
a. Someone will need to lead the development of the policy.
b. Someone will need to document the policy discussions and decisions.
c. Someone will need to gather feedback from stakeholders.
d. Someone will need write the policy.
e. Someone will need to conduct training.
f. Someone will need to lead regular policy review.

2. Collateral.
a. Document the draft(s) and final approved policy.

3. Time
a. Time to conduct a needs assessment.
b. Time to meet with stakeholders.
c. Time to write draft policy and make changes.
d. Time for the board to meet to approve the policy.
e. Time to train staff and volunteers on the policy.
f. Time to review the policy regularly.

4. Space
a. Space to hold meetings and to conduct training.

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

NM with Demonstrated Experience in this BP

Colombia
Brazil