Financial Policy

Financial Policy

Lotus Club Foundation – Anuradhapura Valid for the Period: 2025 – 2027

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Introduction

The Financial Policy of Lotus Club Foundation is designed to ensure transparency, accountability, and efficiency in financial administration.
All financial activities must be carried out in compliance with this policy by the Board of Directors, Executive Director, staff, and stakeholders.

  • Standard financial documentation includes ledgers, cash books, vouchers, and bank reconciliation reports.
  • The financial year begins on January 1st and ends on December 31st.

Income & Fundraising

🔸 Income Generation Methods

The following sources are recognized for generating income:

  1. Donations
  2. Membership fees
  3. Financial activities of Small Financial Groups
  4. Fundraising events
  5. Project income
  6. Fixed deposits

🔸  Financial Documentation

  • All receipts must be issued within 16 working hours of receiving cash.
  • Separate receipt books are maintained for different sections.
  • Every transaction must be entered in the cash book and relevant section logs.
  • Deposits must be documented in the bank deposit book, and monthly/annual summaries must be available.

🔸  Bank Deposits

    • Deposits should be made within 2 working days of receiving cash.
    • All deposits must be clearly itemized in the bank deposit book, and deposit slips securely stored.

Expenses

All expenses must go through a voucher system and follow approval hierarchies.

🔸  Cash Withdrawal & Authority

  • Cash withdrawal requires the Executive Director’s signature and that of the Chairman or appointed Financial Director.
  • Withdrawals below Rs. 50,000/-: Can be done by authorized signatories.
  • Withdrawals above Rs. 50,000/-: Require Board approval.
  • All expense proposals must be submitted in writing to the Financial Manager.

🔸 Cash Expenses

  • Proposals are submitted in writing and reviewed by the Financial Manager.
  • Petty cash limit with the Financial Manager is Rs. 15,000/-.
  • Approvals required based on amount:
    • Up to Rs. 5,000/-: Financial Manager
    • Rs. 5,001–15,000/-: With Executive Director’s approval
    • Rs. 15,001–50,000/-: Requires approval from Executive Director, Chairman, and Financial Director
    • Over Rs. 50,001/-: Needs full Board approval

🔸  Cheque Payments

  • All expenses above Rs. 15,000/- should be made via crossed cheques (no cash cheques).
  • Cheques must be recorded with complete details and handled securely.
  • Finance Manager is responsible for safeguarding cheque books and records.

🔸  Bank Transfers & Online Payments

  • Permitted upon dealer request and must follow the same approval authority as cash/cheques.
  • Screenshots of transactions must be printed and safely filed.
  • Passwords and OTP responsibilities lie with the Financial Manager and Executive Director, respectively.

🔸  Expense Eligibility

  • Expenses must be justified, transparent, and within project budgets.
  • Ineligible expenses include:
    • Alcohol, cigarettes, luxury hotels/restaurants, weapons
    • Non-documented purchases under donor-funded budgets
    • Any expenditure for antisocial activities

Procurement Process

  • All purchasing follows the same authority structure as expense approvals.
  • For purchases over Rs. 50,000/-, three quotations from verified vendors are required.
  • If the lowest quotation is not selected, justification is mandatory.
  • For certain assets (e.g., land), Board approval is required.
  • Items sold by the Foundation must have transactions closed within 3 months, under Financial Manager’s supervision.

Financial Reporting

  • Monthly and annual income/expense reports must be properly prepared and stored securely by the Financial Manager.
  • Annual reports must be audited and retained with auditor verification.
  • Reports may be shared with donors, stakeholders, or authorities only with approval from the Executive Director or Board.
  • Reports must not be shared with unauthorized individuals.