Contribution funds for Non-governmental Organizations - a Handbook

Terminology

The following are brief definitions of all the words in the booklet in bold type followed by an asterisk.

Advance payment:
a payment under the terms of a contribution agreement that is made before the performance of that part of the contribution agreement for which the payment is being made. An advance payment is limited to the immediate cash requirements, based on a monthly cash-flow forecast from the recipient and taking into account any outstanding advances.
Allocation base:
the base or rationale used for allocating common costs to specific projects or cost centres (hours worked, square feet occupied, units produced, etc.).
Audited financial statement:
any statement or report that independent auditors have audited and on which they have issued an opinion.
Bank reconciliation:
a statement accounting for the differences between the balance shown on the bank statement and the balance shown in the corresponding general ledger bank account at a given date.
Call for tender:
a formal invitation for potential suppliers or consultants to bid on a job or a project.
Cash flow:
the cash position for a given period of time (historical or prospective), identifying cash surpluses or needs.
Cash requisitions:
a form that must be filled in each time an individual requests cash from petty cash. It must be signed by the individual receiving the money and must explain why the cash is required.
Chart of accounts:
a list of all account names and financial coding that are part of an organization's accounting system.
Coding:
the identification of each account of the general ledger by a specific number or code, or the act of entering a transaction into the accounting system using specific codes to identify each account involved.
Contributions:
funds provided to a recipient for a specific reason with conditions that must be complied with by the recipient.
Delegation of authority:
a formal authorization given to an employee to sign or act for somebody else (usually his or her supervisor), either permanently or for a limited period of time.
Effective date:
the start date of the duration of the signed agreement.
General ledger:
a ledger comprising all asset, liability, proprietorship, revenue and expense accounts in which all transactions have been recorded and from which details on each transaction can be found.
Grants:
funds attributed to a recipient for a specific reason and usually not limited by restrictive conditions.
Holdback:
a percentage of the maximum contribution that is not payable until all the financial and reporting requirements have been met.
Indirect expense:
an expense that relates to the overall management of an organization and not directly to a specific project (e.g. telephone, fax, utilities, insurance, rent, postage, office supplies, office maintenance, and indirect salaries for those involved in the administration of the organization as a whole, such as human resources staff).
In-kind expense:
an expense incurred in a form other than cash (such as donations of goods or services provided, time spent, or space allowed).
Interim statements of revenues and expenditures:
a report or statement prepared as at any date or for a period ending on any date within the regular fiscal year.
Internal control:
all methods and measures adopted by an organization to safeguard its assets, ensure the accuracy and reliability of the accounting data, promote operational efficiency and maintain adherence to prescribed policies.
Journal entry:
any entry made in the accounting system through the use of a journal (general journal, sales journal, payroll journal, purchase journal, etc.).
Progress payment:
a payment made to a recipient throughout the project based on a Request for Interim Payment (Appendix B) or interim financial report. The payment is based on the total amount of the project deficit less any advance payments (if applicable) and on the holdback limit specified in the agreement.
Project deficit:
the result when project expenses, including in-kind, exceed project revenues.
Purchase order:
a form used to place an order for goods or services with a supplier.
Standard financial statements:
financial statements that usually comprise a balance sheet and an income statement for all activities of an organization.
Subcontracts:
contracts entered into by a recipient with a contractor of his own to carry out part or all of the objectives or activities listed in the agreement.
Time sheet:
a time-keeping recording report for an employee, that can be produced either manually or electronically, showing details of hours worked on different projects for each day of the week.
Travel authorization:
a form granting authorization to an employee to travel, prior to the trip. Travel authorization forms usually include the employee's name, the date of the trip, the destination and duration of the trip, the reason for the trip, and the signatures of both employee and supervisor.
Trial balance:
a list of all balances from the general ledger accounts on a specific date (e.g. year-end) and presented in two columns (debit and credit balances).
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