Financial Management Policy

Purpose

The purpose of this Financial Management Policy is to establish a clear framework for managing the financial resources of KALTOOR Foundation in a transparent, accountable, and ethical manner. This policy ensures proper stewardship of funds, compliance with applicable laws and donor requirements, and supports the Foundation’s mission and sustainability.

Scope

This policy applies to:

• All funds, assets, and financial transactions of KALTOOR Foundation
• Board members, management, employees, volunteers, and consultants
• All projects, programs, and administrative activities

Guiding Principles

KALTOOR Foundation commits to:

• Transparency and accountability in all financial dealings
• Compliance with Pakistani laws, regulations, and donor agreements
• Proper segregation of duties to prevent misuse of funds
• Accurate and timely financial reporting
• Ethical conduct and zero tolerance for fraud or corruption

Governance and Responsibilities

Board of Directors

The Board of Directors is responsible for:

• Approving the annual budget and major financial policies
• Providing overall financial oversight
• Reviewing and approving audited financial statements
• Ensuring proper internal controls are in place

Chairman / Executive Leadership

• Ensures implementation of this policy
• Authorizes expenditures within approved limits
• Oversees financial planning and sustainability

Finance Officer / Treasurer

• Maintains proper books of accounts
• Ensures accurate recording of all transactions
• Prepares financial reports and statements
• Ensures compliance with donor and legal requirements

Program Managers

• Manage program budgets
• Ensure expenditures are aligned with approved activities
• Submit financial documentation to the finance department

Budgeting

• An annual consolidated budget shall be prepared before the start of each financial year
• Budgets shall include program, administrative, and operational costs
• The Board must approve the annual budget
• Budget revisions must be justified and approved by management and/or the Board

Accounting and Record Keeping

• The Foundation shall maintain accounts on an accrual or cash basis (as approved by the Board)
• All financial records shall be supported by original documentation (vouchers, invoices, receipts)
• Accounts shall be maintained using recognized accounting standards applicable to NGOs
• Financial records shall be retained for a minimum of 7 years

Bank Accounts and Cash Management

• All funds shall be kept in accounts opened in the name of KALTOOR Foundation
• At least two authorized signatories shall be required for bank transactions
• Cheque and online payment approval limits shall be defined by the Board
• Cash transactions shall be minimized; petty cash shall be maintained with fixed limits

Income and Receipts

• All income (donations, grants, sponsorships, service income) shall be recorded promptly
• Official receipts shall be issued for all donations
• Restricted funds shall be used strictly for their intended purpose
• Donations in kind shall be recorded and acknowledged

Expenditure and Procurement

All expenditures must be:

• Within the approved budget
• Approved in advance

Procurement

• Competitive quotations shall be obtained for significant purchases
• Conflict of interest must be avoided in procurement decisions
• Procurement shall ensure value for money, transparency, and fairness.

Payroll and Human Resource Costs

• Salaries and benefits shall be approved by the Board or authorized committee
• Payroll records shall be properly documented
• Statutory deductions (if applicable) shall be made and deposited timely

Asset Management

• A fixed asset register shall be maintained
• Assets shall be used only for official purposes
• Physical verification of assets shall be conducted annually
• Disposal of assets must be approved and documented.

Financial Reporting

• Monthly and quarterly internal financial reports shall be prepared
• Annual financial statements shall be prepared at the end of each financial year
• Financial reports shall be shared with the Board and donors as require

Audit and Internal Controls

• An external audit shall be conducted annually by a qualified auditor
• Internal controls shall include:
• Segregation of duties
• Authorization and approval procedures
• Regular bank reconciliations
• Audit findings shall be addressed promptly

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Fraud, Misuse, and Whistleblowing

• Any suspicion of fraud or financial misconduct must be reported immediately
• The Foundation shall investigate all reported cases
• Disciplinary and legal action shall be taken where necessary
• Whistleblowers shall be protected from retaliation

Compliance and Legal Obligations

• The Foundation shall comply with:
• Pakistani financial and tax laws
• Donor regulations
• Requirements of regulatory bodies (PCP)

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Policy Review and Amendments

• This policy shall be reviewed at least once every year
• Amendments must be approved by the Board of Directors

Approval

This Financial Management Policy was approved by the Board of Directors of KALTOOR Foundation.