Table of Contents
1. Purpose
To establish an uniform method for the administration, payment and control of field operating expenses.
2. General
This procedure applies to all projects with field operations.
3. Responsibilities
The Project Construction Manager is responsible for the approval of Field Office expenditures.
The Office Manager/Project Accountant is responsible for the administration and payment of field expenditures in accordance with this procedure.
The Home Office Project Accounting Department is responsible for the overall control of field administration and to account for field expenditures in Home Office Accounting records.
4. Procedure
4.1 Field Purchasing
The Field Office shall issue purchase orders for the installation and maintenance of temporary facilities and field operations (XYZ Cost Codes).
The numbering of Field Purchase Orders shall be in accordance with section BN-CO-106 of the Construction Manual.
Copies of all Field Purchase Orders shall be distributed to the Home Office Project Accounting Department on a weekly basis.
Important Note:
Field Purchasing shall be limited to X, Y and Z-accounts, in principle.
All plant Equipment/Material shall be purchased by the Home Office Procurement Department, but in some instances it may be appropriate that the Field Office purchase materials e.g. if urgent delivery is required or if prior written approval has been obtained from the Home Office Procurement Manager and Project Manager. The numbering of such Field Purchase Orders shall be in line with Home Office Procurement order numbering, i.e. CD0001C, PP0010B etc. The costs of these field purchased plant materials shall be booked by the Home Office Project Accounting Department under cost code AT 99999.
4.2 Field Subcontracts
All Subcontracts shall be issued by Home Office Procurement Department. The Field Office shall issue Field Subcontracts only in relation to the operation of temporary facilities.
If required, the Field Office may issue Field Subcontracts for urgent services or for such services for which prior written approval has been obtained from the Home Office Procurement Manager and Project Manager.
Copies of all Field Subcontracts shall be distributed to the Home Office Project Accounting Department on a weekly basis.
4.3 Supplier Representatives
All purchase orders for supplier representation services shall be issued by the Home Office Procurement Department in accordance with ref.6.4.
A request for purchase of supplier representation services at site not covered in the main order shall be initiated by the Project Construction Manager and submitted to Home Office Procurement for the issuing of a Home Office Purchase Order. A call-in fax for supplier representation covered in the main order can be initiated by the Project Construction Manager direct to the supplier with a copy to Home Office Procurement and Project Accounting.
Home Office Project Accounting Department shall forward a copy of the invoice for representation services to the Project Construction Manager for verification and approval of actual time spent and acceptance of work performed. The Project Construction Manager shall return the approved copy invoice to the Home Office Project Accounting Department for payment. After receipt of the approval a supplier representative order should be issued to enable payment by the Home Office Project Accounting Department.
4.4 Field Administration
All original supplier invoices which are received by the Field Office, shall be “date stamped” and logged into the Operating Account database. The invoices shall be arithmetically checked and verified on correct VAT application. Incorrect invoices shall be returned to supplier immediately by the Office Manager/Project Accountant.
After initial check and registration the invoice shall be “control stamped” and verified against compliance to Field Purchase Order conditions.
After verificaction, the Office Manager/Project Accountant shall sign and forward the original invoice to the Project Construction Manager for approval signature, and prepare payment through the Field Office bank account.
After payment, the original invoices shall be sent to the Home Office Project Accounting Department as part of the Weekly Operating Account Report. With the approval of the Home Office Manager Project Accounting, a different interval may be applied and will be covered in the Project Accounting procedure.
Copies of approved and paid invoices shall be kept in the suppliers purchase order file at site.
4.5 Field Operating Account and Reporting
The Home Office Accounting Department shall open a local bank account in the area close to the jobsite. This account shall be in the name of Company, if applicable.
Funding of this account shall be set up on the basis of a forecast of expenditures to be prepared by the Office Manager/Project Accountant. Any adjustments of the forecast resulting in an increase of funds required shall be approved by the Home Office Manager Project Accounting.
All approved supplier invoices as well as assignment related expenses shall be paid from this bank account.
Disbursements from this bank account for amounts exceeding Nlg. 5,000.= require the authorized signatures of both Project Construction Manager and Office Manager/Project Accountant.
Each month the Field Office shall request the Home Office Project Accounting Department to replenish the bank account.
This request for replenishment shall be made monthly by fax and the requested amount shall be based on imprest account method.
Field Petty Cash
The Field Office shall keep a small amount for “petty cash” expenditures on imprest account basis.
Reporting
The Office Manager/Project Accountant shall enter each invoice and payment in a PC database programme from which all field expenditures shall be reported to the Home Office Project Accounting Department on a weekly basis. Standard software for such a programme shall be provided by ISG.
This reporting shall be done by means of an Operating Account Report (Exhibit A), accompanied with a Summary Sheet per Project Cost Code, supported with the applicable bank payment vouchers, original documents of the expenditures, such as invoices, petty cash vouchers, as well as the original bank statements reflecting the corresponding bank balance.
4.6 Administration of Assignment Expenses
Assignment expenses shall be paid by the Field Office as indicated on Exhibit B and in accordance with the employee’s assignment contract.
At the start of the employee’s assignment the Home Office Payroll Department shall pay the employee an advance to cover the assignment expenses for the first month. This advance will be settled with the employee’s personal account at completion of the assignment.
Expense reports for assignment expenses, as per Exhibit B, shall be approved by the Project Construction Manager.
Expense reports related to the assignment expenses of the Project Construction Manager shall be sent to Home Office Construction Department for approval.
Expense reports for allowances and daily commuting shall be paid at the end of the month. Advance payments for this type of expenditures are not allowed unless for emergency reasons.
The Field Office shall pay the costs for housing and home travel directly to the respective broker, landlord and travel agent, unless circumstances prevent this. In such case, the Office Manager/Project Accountant shall advise the Manager Home Office Construction and the Home Office Manager Project Accounting.
The Office Manager/Project Accountant shall record the expenses in the PC database programme, for further reporting to the Home Office Project Accounting Department.
Deposits paid to the employee or to the broker on behalf of the employee shall be charged to a separate ledger in the Home Office Accounting records and the amount shall be settled with the employee’s personal account at completion of the assignment.
A separate summary sheet containing assignment expenses by each assignee may be required for tax purposes.
If applicable, the lay out of this summary sheet shall be advised by Home Office Project Accounting Department after consultation with Home Office Payroll Department, prior to the start of construction activities.
4.7 Audit and Control
Upon receipt of weekly Operating Account Reports and PC database summary sheets with supporting documents, Home Office Project Accounting Department shall control if payments have been made in compliance with the applicable procedures and compliance to VAT and other tax regulations.
At regular intervals Home Office Project Accounting shall audit the field accounting records at the site.
4.8 Tax and Registrations
Prior to the start of construction activities at locations outside The Netherlands, Home Office Project Accounting Department shall arrange for the Company’s registration or representation for taxes and VAT in accordance with local law and regulations, if required.
The Home Office Project Accounting Department shall advise the Office Manager/Project Accountant of procedure to be followed.
4.9 Exceptions
Exceptions/deviations from this Procedure require prior written approval from the Manager Project Accounting.
5. Flowchart
6. Referencs
|
|
Document Number |
Title |
Level |
| 6.1 | BN-CO-108 | Field Construction Accounting Procedure | 3 |
| 6.2 | CM-PE-904 | Project Accounting – Vendor and Subcontractor Invoice Control and Release for Payment | 2 |
| 6.3 | CM-PE-708 | Purchasing | 2 |
| 6.4 | CM-PE-712 | Procedure for Supplier Representation (later) | 2 |
7.Attachments
Exhibit A: Operating Account Report
Exhibit B: Administration of Assignment Expenses
Operating Account Report
Administration of Assignment Expenses
