START SAVING AS SOON AS YOU START MAKING MONEY!

Guys this is important. If you have started earning, this is the right time to start saving or is the right time to increase your savings. The longer you wait the difficult it will become as your life will probably become comfortable and you might have many responsibilities soon afterwards!!

Let me tell you the boiling frog story that I love to tell my fellow cooperators: If you drop a frog in a pot of boiling water, it will of course frantically try to clamber out. But if you place it gently in a pot of tepid water and turn the heat on low, it will float there quite placidly. As the water gradually heats up, the frog will sink into a tranquil stupor, exactly like one of us in a hot bath, and before long, with a smile on its face, it will unresistingly allow itself to be boiled to death. The boiling frog story is generally told in a metaphorical context, with the upshot being that people should make themselves aware of gradual change lest they suffer eventual undesirable consequences (Wikipedia).

See yourself as a frog and of course like the frog dropped in boiling water, you will automatically clamber out like we do in uncomfortable/unpleasant situations. But if you were to be dropped in tepid water and the water be gradually heated, you will rarely notice change in temperature until probably it is too late. Life happens like that!! Change sometimes will find you still trying to adjust to it despite it being constant!!! Life has a way of sneaking onto you and gives you a surprise though most probably you saw this surprise miles away and you told yourself you had all the time. Living life without considerable savings is like water that is being gradually boiled with you in!!!

When you leave collage with your degree or diploma certificate and you get a job, do not wait to start saving. It is likely that at this time you are still single and you have a few financial obligations. So immediately you get a job, you should start saving and save as much as possible. This is so because once you start a family, your expenses will automatically go up or if you delay, you will get used to the pay you get and therefore it will become hard to adjust. You will have established a comfort zone. We all know getting out of a comfort zone is the hardest of things to do.

Saccos have a minimum savings per month that is allowed. So if you are in a Sacco DO NOT start saving the minimum allowed. It is thought wise that one should at least save 10% of his/her income. If possible when you have just been employed, save more than the 10%. It is also wise to save with a Sacco as they pay better dividends and interest on deposit than most financial institutions. Ask around the interest paid by banks on savings accounts then ask what Saccos pay! Saccos pay way better .

So my friends, start saving now for a better future.

THE DEPARTMENT OF CO-OPERATIVE DEVELOPMENT AND MARKETING – RANGE OF SERVICES AT SUB-COUNTY (DISTRICTS)

(i) Education and Training

We will conduct education and training to members, management committees and staff of the movement in collaboration with stakeholders. We shall use resources allocated by the Government and the movement will chip in from education budgeted resources. We shall give other extension services pertaining to administration and management of Co-operatives.

(ii) Co-operative Policy and Implementation

We will attend leaders meetings, Special/Annual general meeting of Co-operative Societies and shall at all times give appropriate advice. We shall also articulate the Government policy on Co-operative management.

(iii) Co-operative Financial Policy

We will at all time advice the societies in prudent financing, Credit and Banking Services policy aimed at improving the welfare and interests of the members of the movement.

(iv) Co-operative Governance

We through Co-operative Education and Training will endeavor to insist on good management practices among the Co-operative leaders aimed at good Co-operate Governance. We shall also annually ask the Co-operative leaders to declare their assets and liabilities and file indemnity bonds as required by law.

(v) Settlement of Disputes

We will at all times arbitrate on co-operative disputes outside the court system and for those cases beyond, we will advice complainants to file disputes in the Co-operative Tribunal. The clients will be advised on the filing fees.

(vi) Co-operative College

We will advise the movement on courses offered by the Co-operative College and update them on regular basis.

(vii) Co-operative Marketing Including Value Addition Processing.

We will at all times articulate the Government Policy on Marketing of Agricultural produce, value addition and other Co-operative ventures.

(viii) Promotion of Co-operative Ventures.

We will at all times advice the Co-operative movement on general aspects of investments to create wealth in Co-operatives.

(ix) Inquiries and Inspections.

We will advise on inquiry/inspection processes where necessary and we shall conduct inspections within the Sub-County as need arises. The inspections will be presented to management committee for appropriate action in accordance with the law.

(x) Surcharge

We will undertake to enforce surcharges and inquiry report as recommended by inquiry officers.

(xi) Rule of Law

We will at all times operate within the provisions of the Co-operative Societies Act, the Rules and the By-Laws of co-operative societies and policy documents issued from time to time by the Commissioner of Co-operative Development.

(xii) Audits

We shall ensure that audits are carried out and presented as stipulated in the Act in accordance with International Accounting Standards and Co-operative Societies Act.

(xiii) Monitoring and Evaluation.

To monitor and evaluate all Co-operative activities in the Sub-County.

(xiv) The Sub-County Co-Operative Officer will Advise and Support Co-Operative Officers.

To give advisory services to Co-operative officers and others staffs to enable them perform their duties efficiently.

(xv) Financial Resources

A thief broke into my house last night looking for money, so I woke up and started searching with him :-)

To ensure that all financial resources allocated to the Sub-County are utilized for intended purposes and in accordance with the Government accounting procedures and procurement regulations.

(xvi) Visitors and Delegations

To ensure that all delegations to the Sub-County Co-operative Office are attended to promptly.

EFFECTIVE INTERNAL CONTROL IN SACCOS

Internal control can be defined as the whole system of controls, financial and otherwise established by the management committee in order to carry on the business of the society in an orderly and efficient manner,

Why don't we take this relationship to the next level and you lend me some money? :-)

ensure adherence to management and financial policies, safeguard assets and secure as far as possible the completeness and accuracy of the records.

The individual components of an internal control system are known as controls of "Internal Controls."

Internal control could be enhanced within the organization by:

• Organization structure
• Job description of
• Physical locations of departments or sections
• Information, accounting and documentation
• Authorisation and approval
• Supervision, personnel and general management
• Routine checks, verification and examination
• Scrutiny and physical checks including stock taking
• Control of documents, filing and movement of documents and files
• Vocation and rotation of duties
• Security of assets
• Ensuring efficient and effective discharge of society's goals, vision, mission and objectives

However, Sacco and business organizations need to have continuous application of accounting (records/books). This may include the following:-

• Cash journal/Petty cash journal
• General ledger
• Payment vouchers/Petty cash vouchers
• Receipt book, member statements
• Cheque book, asset register, member register, loan application forms, payroll deduction list
• Invoices, Delivery note, expenditure receipts
• Deposit slips, bank statements
• Cheque counter foils, cheque registers, etc

Other essential financial statements include:-

• Trial balances
• Income/expenditure statements or surplus and loss A/C
• Balance sheet
• Budgets

Why internal Control?

• Minimizes chances of errors and fraud
• Safeguard society's assets
• Boots efficiency in the society towards members services
• Having up-to-date data for managerial decision making
• Control of work and avoid duplication of efforts/duties
• Facilitates efficient statutory audits
• Facilitates identification of inefficiency and outdated policies
• Encourages specialization
• Allow society to grow at a reasonable rate
• Acts a motivator

ELEMENTS OF INTERNAL CONTROL

EMPLOYEES	Hire qualified people with good reference
	Require annual leave
	Bond employees in position of trust
	State conflict of interest policy
CLEAR DELEGATION AND SEPARATION OF DUTIES	Develop organization chart
	Separate record keeping from custody of assets
	Separate authorization from record keeping
	Separate purchasing from receiving
PROPER PROCEDURES FOR PROCESSING OF TRANSACTIONS	Ensure proper authorization of transactions
	Sign cheques only with proper support
	Approve all non-cash entries on returns, discounts and write offs
	Review past due and uncollectable accounts
SUITABLE DOCUMENTS AND ACCOUNTING RECORDS	Pre-number important documents
	Develop comparative financial statements
	Describe accounting methods in manuals or systems
	Prepare budget of anticipated results
CONTROL OVER ASSET RECORDS	Limit access to inventory
	Safeguard all important records
	Deposit cash receipts intact daily
	Keep all voided cheques
INDEPENDENT VERIFICATION OF PERFORMANCE	Reconcile bank statement independently
	Pre-list cash receipts
	Have an annual audit by CPA frim
	Take complete inventory regularly

DETECTION AND PREVENTION OF MISTAKES (General Control Techniques)

TECHNIQUES	REASON FOR TECHNIQUES
CASH DISBURSEMENT
Use only pre-numbered cheques for disbursement	To ensure all cheques are accounted for
Have proper support for cheques	Only pay properly authorised and justified expenditures
Cancel supporting documents when paid	To only pay once for proper expenditures
Cheque signing by management with no access to records/Alter but keep voided cheques	To ensure accounting records accurately reflect cheques written
Mail cheque directly to payee	To ensure that payee and only payee receives disbursement
Use imprest petty cash fund with one custodian	To ensure authority over petty cash and review periodically
CASH RECEIPTS
Use cash register and cheque register daily	To ensure all cash receipts are recorded
Deposit cash receipt intact	To ensure all cash receipts are deposited
Reconcile bank statements monthly	To ensure all cheques are authorised and recorded and receipts deposited
ACCOUNTING RECORDS
Use pre-numbered invoices	To ensure invoices are accounted for
List mail collections compare with journal	To ensure all mail collections are retained by Sacco
Review monthly comparative financial statements reports	Check any unusual revenue, expense or liability amounts
Approve all entries to general journals	To ensure only authorised and proper journal entries are made

INVENTORY CONTROL TECHNIQUES

1. PURCHASING

1. Centralize under responsible staff
2. Attach purchase invoices to cheques for payment
3. Cancel support documents when cheque is paid
4. Supervise all returned purchases
5. Use requisitions to initiate purchases

2. CUSTODY

1. Separate purchasing from receiving
2. Separate receiving from store keeping
3. Take physical inventory regularly
4. Use independent employees for physical inventory
5. Physically control access to inventory

3. RECORD KEEPING

1. Separate record keeping from custody
2. Require all documents to be pre-numbered e.g. ledgers, journals, passbooks, receipts, vouchers, etc
3. Use a perpetual system if possible
4. Compare results of physical inventory to records

DEFALCATION OF CASH

AREA OF DEFALCATION	HOW TO OBTAIN CASH	HOW TO COVER IN ACCOUNTING RECORDS
CASH DISBURSEMENT	-Issues cheques to others-Appropriate the cheques	Create false invoices
		Use invoices twice for supporting cheques
		‘Pad’ the payroll
		Pocket unclaimed wages and dividends
	Issue cheques to yourself	Incorrectly foot the cash disbursement journal
		Increase recorded amount of another cheque
	-Overpay vendor-appropriate refund	Allow asset or expense to remain overstated
PETTY CASH	Remove cash from petty cash fund	Increase amount on vouchers
		Create false vouchers
		Submit vouchers twice
		Allow fund to remain short
CASH RECEIPTS	Take cash from cash sales or receipts	Record no amount
		Record less than was received
	Take cash payment on account receivable	Bill for full amount but record sale at lower amount
		Record cash receipt but manipulate bank reconciliation
		Record cash receipt but incorrectly use the journal
		Do not record cash receipt but create credit memo to write off the amount
		Pocket payment on account which has been written off