SAVINGS AND CREDIT
CO-OPERATIVES SOCIETIES‟
(SACCOS‟)
ACCOUNTING MANUAL
January
2010
2
LIST OF ABBREVIATIONS
CSA
-
Cooperative Societies Act Cap 490
BoD
-
Board of Directors
BOSA
-
Back Office Savings Account
CFF
-
Central Finance Facility
CFP
-
Central Finance Programme
DIT
-
Directorate of Industrial Training
FOSA
-
Front Office Savings Account
FRM
-
Form
GAAP
-
Generally Accepted Accounting Principles
HELB
-
Higher Education Loans Board
ICPAK
-
Institute of Certified Public Accountants of Kenya
IFRS
-
International Financial Reporting Standards
JCR
-
Journal and Cash Register
KRA
-
Kenya Revenue Authority
KSH
-
Kenya Shillings
KUSCCO
-
Kenya Union of Savings & Credit Co-operatives Ltd.
KUCFAWU
-
Kenya Union of Commercial Food and Allied Workers Union
MOCD&M
-
Ministry of Co-operative Development & Marketing
NHIF
-
National Health Insurance Fund
NSSF
-
National Social Security Fund
P&L
-
Profit and Loss
PEARLS
-
Protection, Effective Finance Structure, Asset Quality,
Rate of Returns, Liquidity and Signs of Growth.
Sacco
-
Savings and Credit Co-operative
SASRA
-
Savings Societies Regulatory Authority
SSA
-
Sacco Societies Act, 2008
VAT
-
Value Added Tax
TABLE OF CONTENTS
Page 2 of 54
3
INTRODUCTION .................................................................................................................................. 5
1.
CHAPTER 1 - GENERAL INSTRUCTIONS ON THE ACCOUNTING MANUAL ........... 7
1.1.
Purpose and Use as a Prescribed System ...................................... 7
1.2
Objectives of the manual ........................................................ 7
1.3
General Instructions .............................................................. 7
1.4
Records of Final Entry – “The General Ledger” ................................ 8
1.5
Financial Statements for Saccos ................................................. 9
2
CHAPTER 2 - ACCOUNTING PRINCIPLES AND STANDARDS FOR Saccos ............... 13
2.1
Purpose and Scope ............................................................... 13
2.2
Basic Concepts and General Principles .......................................... 14
2.3
Accounting Profession Pronouncements .......................................... 16
2.4
Principles Affecting the Recording of Assets .................................. 16
2.5
Principles Affecting the Recording of Liabilities ............................... 19
2.6
Principles Affecting Equity ....................................................... 20
2.7
Principles Affecting the Recording of Income and Expenses .................. 22
2.8
Financial Statements ................................ Error! Bookmark not defined.
3 CHAPTER 3 – ACCOUNTING MANUAL: INSTRUCTIONS AND DESCRIPTION OF
ACCOUNTS ................................................................................................................................ 24
1100000
EARNING ASSETS ....................................................................................................... 24
1200000
NON-EARNING ASSETS .............................................................................................. 27
1300000
OTHER NON-EARNING ASSETS .............................................................................. 28
2100000
INTEREST BEARING LIABILITIES OR LIABILITY WITH COSTS.................. 32
2200000
NON-INTEREST-BEARING LIABILITIES............................................................... 32
3100000
MEMBER CAPITAL ..................................................................................................... 35
3200000
TRANSITORY CAPITAL ............................................................................................. 35
3300000
INSTITUTIONAL CAPITAL ....................................................................................... 35
3400000
CURRENT PERIOD RETAINED EARNINGS .......................................................... 36
4100000
INTEREST INCOME..................................................................................................... 36
4130000
INCOME RECEIVED ON LONG TERM FINANCIAL INVESTMENTS ............. 37
4200000
NON-FINANCIAL INCOME ........................................................................................ 38
5000000
FINANCIAL COSTS ...................................................................................................... 39
5100000
FINANCIAL COSTS ...................................................................................................... 39
5200000
NON-FINANCIAL COSTS ............................................................................................ 39
Page 3 of 54
5300000
4 40
OPERATING EXPENSES .............................................................................................
5400000
PROTECTION EXPENSES .......................................................................................... 45
4 CHAPTER 4 - PROPOSED CHART OF ACCOUNTS ................................................................ 45
Appendix
Financial Statements - Haki na Kweli SACCO Reporting Template
Page 4 of 54
INTRODUCTION
This manual has been prepared for the use by a Sacco in accounting for the financial transactions and
to produce financial statements that present the true financial performance and state of affairs at any
given time.
The manual describes the key accounting transactions, how they should be recorded to enhance
accuracy and completeness of the accounting records. It also includes accounting guidelines and
requirements for specialized problems and services, such as loan losses allowances and provision,
write off and recovery a well as any donations.
While the manual summarizes the IFRS requirements, users should refer to the IFRS handbook for
complete understanding.
Accounting and Accounting system
Accounting is a system of recording and reporting on an entity’s financial transactions. By providing a
consistent method of shorthand, it ensures that no matter who is keeping the records or who is looking
at the records, the information will be interpreted in a similar way.
An accounting system is thus designed to provide the board and management of an organization with
complete and accurate financial information that can be used to effectively manage the organization’s
financial resources. Accounting effectiveness is enhanced with the use of accepted accounting
principles that address day-to-day operations of an entity. Like other specialized areas, accounting is
guided by principles underpinning IFRS for recognition, measurement and disclosure of financial
information.
Importance of accounting
Good accounting practices are an important ingredient in the success of any business operation. A
properly functioning accounting system will:
Allow management and directors to measure performance, revise strategic business plans and
keep the organization on course towards achieving goals;
Provide information which helps staff and management to fulfill their obligations and tasks;
Inspire confidence and credibility in the Sacco by members and creditors; and
Allow interested third parties (industry regulators, government agencies and Financial
Institutions) to assess financial performance, financial position and cash flows of in Saccos.
The accounting records provide reports (financial information) to the members and interested third
parties (regulators, auditors and Financial Institutions). Therefore, it is essential that the records that
Sacco maintains are accurate, current, and enable preparation of useful and complete financial
statements.
As Saccos are operated under the provisions of the Sacco Societies Act, 2008 (SSA), the Sacco has
powers limited to those granted by Act. The Sacco is governed by bylaws and the regulations issued
by the Sacco Societies Regulatory Authority (SASRA).
The transactions of Saccos are compiled in its records that serve as a source of information needed by
the BOD to properly manage the Sacco. The accounting records also serve as the basis for reports to
the members and interested third parties.
Therefore, it is essential that the records be accurate, current, and that they show the true financial
condition of the Sacco. Prompt preparation of reports will aid the Sacco in achieving its objectives and
fulfilling the purposes for which it was formed.
The aim of the manual is to ensure that the Sacco comply with the SASRA which recommends the
adoption of consistent accounting policies and procedures. In addition, the MoCD&M will6 issue
prudential standards that will require the Sacco to achieve minimum standards.
In conformity with requirements of the newly enacted SSA, officials will have to ensure that the books
and records of the Sacco is properly maintained and are in compliance with international financial
reporting standards (IFRS) requirements and the MoCD&M prudential guidelines. In case of any
inconsistency to the accounting/financial reporting formats as per laid down procedures then the
MoCD&M statutory regulations and standards will prevail.
Page 6 of 54
1. CHAPTER 1 - GENERAL
ACCOUNTING MANUAL
INSTRUCTIONS
ON
THE
1.1. Purpose and Use as a Prescribed System
The format of this accounting manual sets forth-comprehensive procedures for the maintenance of
accounting records by Savings and Credit Cooperative Societies and hence the need to for the Sacco
to adopt this manual. It also contains accounting guidelines and requirements for specialized
problems and services that the Sacco may be involved in such as guaranteeing of loans and donated
funds. In addition, the manual throughout describes some techniques that can be used by
management in making a better analysis of the Sacco's financial condition and in improving the
reporting process.
Adherence to the IFRSs outlined in Chapter 2 of this Manual will enhance the “full and fair
disclosure” in the Sacco’s financial reporting.
1.2 Objectives of the manual
The objectives of this manual are:
i.
To be an instrument to provide uniformity for the recording and submission of
accounting transactions and to facilitate their analysis;
ii.
To assist the Sacco’s BoD and management staff in decision making processes;
iii.
To make it easier to record accounting transactions;
iv.
To facilitate and standardize the presentation and submission of financial statements; and
v.
To allow the consolidation of financial information.
1.3 General Instructions
In this Manual, the following terms are used without distinction to make mention of the different
levels of accounts, which are equivalent:
Denomination
Account
Sub-account
Sub-sub-accounts
1.3.1
Account Numbering
In the numbering system adopted for the chart of accounts, the existing chart of accounts were
closely followed to facilitate synchronization with the proposed Sacco’s chart of accounts that takes
cognizance of the need to closely monitor the Sacco’s performance using the monitoring system that
will be spelt out by the SASRA.
Elements of the numbering system:
ONE DIGIT
--------------1
2
PARTS OR ELEMENTS OF THE ACCOUNTING SYSTEM
--------------------------------------------------------------------------ASSETS
LIABILITIES
Page 7 of 54
3
4
5
CAPITAL
INCOME
EXPENSES
SEVEN DIGITS
-------------------
SUB-SUB-ACCOUNTS (Some Examples)
--------------------------------------------------
1111010
Emergency Loans
1211000
Cash In Hand
2100000
Interest Bearing Liabilities
2200000
Non – Interest Bearing Liabilities
3300000
Institutional Capital
4100000
Income from Loans
5110000
Finance Costs on Savings and Time Deposits
1.4 Records of Final Entry – “The General Ledger”
The general ledger is the record of an entities transactions. Where the transaction volumes are large,
the subsidiary ledger may be used to summarise the transactions into the General Ledger.
The record of final entry or the General Ledger as it is most commonly known serves as a means of
summarizing the entries in a form that will enable the accountant to prepare reports on the results of
operations as of month end and year to date. Entries in the general ledger consist of posting the
debits DR and credits CR for each account in the JCR to the corresponding account in the general
ledger and computing the net balance for each account. No entries should be made in the general
ledger without first being made in the JCR.
Income and expense accounts are maintained to maintain balances that are used in
preparation of the income statement in addition to other transactions and events that
are recognized in profit or loss.
Assets, Liabilities and Equities represent balances that are recognized in the
statement of financial position and the statement of changes in equity.
1.4.1
Subsidiary (Or Sub) Ledger
While a general ledger account summarizes a number of transactions an additional record known as
a subsidiary ledger should be used to provide detailed information about the general ledger account.
Subsidiary ledgers are used to support general ledger accounts as they detail all of the entries made
when more than one item is accounted for in the general ledger account. Subsidiary ledgers should
be independent (bank statements, investment statements, etc.) from the general ledger. Subsidiary
ledgers are used to verify that the general ledger balances are correct.
If there is a difference between the general ledger balance and the subsidiary ledger then a
reconciliation of the difference should be performed to identify the entries that make up the
difference. The reconciliation should be retained with the subsidiary and general ledgers. A
subsidiary ledger has many advantages including:
i.
Isolation for a member, on a single ledger card, the transactions that effect their loans,
Page 8 of 54
ii.
iii.
iv.
savings, and share accounts;
Elimination from the general ledger of a great amount of detail relating to assets,
liabilities, and capital accounts;
Easier location of errors by detailing individual entries that may be grouped or
summarized in the general ledger account; and
Assistance to the accountant and the internal and external auditors in verifying the
correctness of the general ledger balances and the financial statements.
For example – The general ledger account for depreciation of furniture, fixture, and equipment
usually has one monthly entry summarizing all of the monthly depreciation amounts. Subsidiary
ledgers are necessary for each piece of furniture or equipment. Each item accounted for was likely
purchased on a different date and the purchase prices varied; therefore, the depreciation time frames
and the amounts are different as is the outstanding balance of each depreciable item.
1.4.1.1 Contra Accounts
Contra accounts are accounts that have a balance that is contrary (opposite) to what is normally
expected of it. For example, an asset account has a normal debit balance. A contra asset account
would have the opposite—a credit balance.
Sometimes an account needs to be ―written down‖ (or reduce) but the record of the original balance
needs to be maintained. To do that, a separate account is created to record the reduction.
The regular account stays the same, and the contra account records the reduction. When the two
numbers are added together, the result shows what the net balance should be. For example, property,
plant and equipment are recorded at cost in an account called fixed assets. Each accounting period,
accounts record the depreciation (reduction in value) of the fixed assets in a contra asset account. If
these two accounts are added together, it would show net value of the fixed assets. The contra
account is called accumulated depreciation.
Contra accounts are used to record accumulated depreciation, accumulated amortization, and the
allowance for loan loss accounts.
1.5 Financial Statements for the Sacco
The Financial statements appearing in the Appendix are based on IFRSs and the accounting
requirements will change from time to time as IFRSs change. Please ensure that you use the lates
approved template or issued IFRSs. Feel free to contact the SASRA and or ICPAK for further
guidance on legal requirements and IFRS provisions. Below are summarynotes on each of the
primary financial statements.
1.5.1
Sample Financial statements for a Sacco ( See Appendix)
The five financial statements of an organization are; a statement of financial position at the end of
the period, a statement of comprehensive income for the period, a statement of changes in equity for
the period, a statement of cash flows for the period, and notes, comprising a summary of significant
accounting policies and other explanatory information. This section provides a brief description and
a sample of the financial statements to be used in preparation of financial reports. The sample is for
illustration purposes only.
1.5.2
Statement of financial position ( See Appendix)
The statement of financial position summarizes the Sacco’s assets, liabilities and owners
Page 9 of 54
equity/member share capital. The three segments of the balance give users an indication of what the
Sacco owns and owes as well as the amount invested by the members as at a given date. Below is a
Sample of the recommended statement of financial position format.
Each of the sections of the statement of financial position has several accounts within it that
document the composition and value of each. Accounts such as loans, cash, fixed assets and
accounts receivable are on the asset side of the statement, while on the liability side there are
accounts such as member deposits, external borrowings and accounts payable.
1.5.3
Statement of comprehensive income ( See Appendix)
A statement of comprehensive income is the financial statement that measures the Sacco’s financial
performance over a specific accounting period. This is measured by giving a summary of how the
Sacco generated revenues and incurred expenses, both from operating and non-operating activities.
The difference between the total income and the total expenses gives the net surplus or deficit (net
profit or loss for profit making organizations).
The Income statement will be presented in a manner that communicates to the users the revenues and
expenses directly associated with the core operations. For example, a section may represent the
results of the regular activities of a Sacco.
The next section should relate to an income of a non-operating activity such as catering or real estate
business that the Sacco may invest in.
1.5.4
Cash Flow statement ( See Appendix)
The cash flow statement describes the source of a Sacco's cash and how it was spent over a specified
time period.
Under accrual method of accounting, it is possible for a Sacco to show profits while not having
enough cash to sustain operations. A cash flow statement neutralizes the impact of the accrual entries
on the other financial statements. It also categorizes the sources and uses of cash to provide the user
with an understanding of the amount of cash a Sacco generates and uses in its operations, as opposed
to the amount of cash provided by sources outside the Sacco, such as borrowed funds. The cash flow
statement also tells the user how much money was spent for items that do not appear on the income
statement, such as loan repayments, long-term asset purchases, and payment of cash dividends.
There are two ways of presenting a cash flow statement, direct method and indirect method.
The direct method for preparing a cash flow statement reports major classes of gross cash receipts
and payments. Under IAS 7, dividends received may be reported under operating activities or under
investing activities. If taxes paid are directly linked to operating activities, they are reported under
operating activities; if the taxes are directly linked to investing activities or financing activities, they
are reported under investing or financing activities.
The indirect method uses net-income as a starting point, makes adjustments for all transactions for
non-cash items, then adjusts for all cash-based transactions. An increase in an asset account is
subtracted from net income, and an increase in a liability account is added back to net income. This
method converts accrual-basis net income (loss) into cash flow by using a series of additions and
deductions.
The sample cash flow statement presented below is prepared on the direct method which is the
recommended method for financial institutions.
Page 10 of 54
1.5.5
Statement of Changes in Equity (See Appendix)
The Sacco shall present a statement of changes in equity showing in the statement:
(a) total comprehensive income for the period, showing separately the total amounts attributable
to owners of the parent and to non-controlling interests;
(b) for each component of equity, the effects of retrospective application or retrospective
restatement recognised in accordance with IAS 8; and
(d) for each component of equity, a reconciliation between the carrying amount at the beginning
and the end of the period, separately disclosing changes resulting from:
(i)profit or loss;
(ii)each item of other comprehensive income; and
(iii)transactions with owners in their capacity as owners, showing separately contributions by
and distributions to owners and changes in ownership interests in subsidiaries that do not
result in a loss of control.
The Sacco shall present, either in the statement of changes in equity or in the notes, the amount of
dividends recognised as distributions to owners during the period, and the related amount per share.
1.5.6
Notes ( See Appendix)
The notes are prepared for the purpose of,
(a) presenting information about the basis of preparation of the financial statements and the
specific accounting policies used in accordance with paragraphs IFRSs.
(b) disclosing the information required by IFRSs that is not presented elsewhere in the financial
statements; and
(c) providing information that is not presented elsewhere in the financial statements, but is
relevant to an understanding of any of them.
The Sacco shall, as far as practicable, present notes in a systematic manner. The Sacco will crossreference each item in the statements of financial position and of comprehensive income, in the
separate income statement (if presented), and in the statements of changes in equity and of cash
flows to any related information in the notes.
1.6
Loans and Advances Portfolio Report
This does not make part of the financial statement but are disclosure reports to support the loan
portfolio information in the balance sheet and provide more details on the lending activity in a
Sacco. The single most important purpose of the loan portfolio is to give information on the quality
of the loan asset and how the Sacco has provisioned against probable loan losses. This report enables
the BoD to keep track of the quality of the loan portfolio and hence the long term sustainability of
the Sacco as a whole.
The information for the portfolio report comes from the subsidiary loan ledgers unlike the previous
three statements which prepared from the general ledger. While there is standard format of
presenting the portfolio report, the contents should be consistent and must include portfolio activity
information, details on the loan loss allowance and portfolio aging schedule as presented below.
Page 11 of 54
Account Name
1/1/2010 to 31/12/2010
1/1/2009 to 31/12/2009
Number
Number
Value
Value
Loan Portfolio Activity
Loans Disbursed
xxx
59,600,000
xxx
40,000,000
Loans Outstanding
xxx
500,000,000
xxx
560,000,000
Movement in Allowance for Loan Loss
Allowance for Loan Loss,
beginning of period
xxx
xxx
Allowance for Loan Loss, end of
period
xxx
xxx
Loans Written Off
xx
xxx
Provision for Loan Losses
xx
xxx
Loans Recovered
xx
0
xxx
xxx
xx
xxx
Operational Data
Total membership
22,000
22,000
Active membership
???
???
Active Borrowers
???
???
Loan Portfolio Aging Report
Delinq.
in %
Number
of
Loans
Current Portfolio
Value of
Loans
Allowance
Rates
Loan Loss
Allowance
xxx
xxx
0%
-
Delinquent loans 0 < 3 months
X%
xxx
xxx
0%
xxx
Delinquent loans 3 < 5 Months
X%
xxx
xxx
10%
xxx
Delinquent loans 5 to <7 months
X%
xxx
xxx
50%
xxx
Delinquent loans 7 to <12 Months
X%
xxx
xxx
75%
xxx
Delinquent loans > 12months
X%
xxx
xxx
100%
xxx
1.7 An Overview of a Sacco‟s Accounting System
The following pictorial representation provides an overview of how an accounting system captures
and processes a Sacco’s transactions in order to produce the Financial Statements.
Figure 1 Overview of Accounting System
Transactions occur
Page 12 of 54
CODING
AND
CAPTURING
APPROVAL
PROCESSING
Transaction details are recorded on Source
Documents (loan applications, withdrawal or
deposits slips) and Accounting Vouchers
(Receipts Voucher, Payment Voucher, Petty
cash voucher)
Data is posted to
Subsidiary Ledgers
Data is posted to
Accounting Journals
Data is posted to
General Ledger
Subsidiary
Reports
REPORTING
Specified Subsidiary
reports: Loan
portfolio, savings,
shares,
-Portfolio Reports
Statement of financial
position, Statement of
comprehensive income,
Statement of Cash Flows,
Statement of changes in
equity and Notes
2 CHAPTER 2 - ACCOUNTING PRINCIPLES AND STANDARDS FOR THE
Sacco
2.1 Purpose and Scope
Accounting serves many internal and external purposes. Comprehensive and accurate financial
information is essential so that the BoD and the management can make sound decisions concerning
the operation of the Sacco. Management must also account for its actions to members, creditors, the
supervisory authority and other stakeholders (SASRA, MoCD&M, ICPAK, Developments and
Page 13 of 54
donor agencies).
Financial information provided to management is summarized in the Sacco’s financial statements
which are intended to present fairly the financial position of the Sacco at a given date, and the results
of its operations for a given accounting period. The financial information so presented must be
supported by accounting records maintained in conformance with IFRSs and other regulations
designed to provide full and fair disclosure of all material information relating to the Sacco’s
operations. The principles and standards of the Sacco’s accounting have been designed to follow the
best practices for financial institutions and the prudential standards by MoCD&M. Use of these
principles by a Sacco in accounting and financial reporting will provide for full and fair disclosure of
financial information.
Many of the principles and standards require the exercise of judgment by Sacco’s management
where optional courses of action are available or where estimates are required for application of a
particular principle. Also, direction is necessary under the doctrine of materiality in order to
evaluate the need for applying a particular principle to specific transactions or situations. Subject to
these qualifications, the principles and standards in this section of the manual must be followed to
comply with the „full and fair requirements‟ of MoCD&M.
2.2
Basic Concepts, General Principles and Assumptions
Accounting concepts refer to rules of accounting that are (or should be) followed in preparation of
all accounts and financial statements. Accounting concepts is always used synonymously to
accounting principles. These fundamentals to the detailed accounting principles and standards for a
Sacco are listed and described below.
2.2.1
Separate Enterprise
A Sacco is a separate corporate enterprise that requires the maintenance of comprehensive
accounting records and financial reporting practices to provide meaningful information to members,
officers, directors, the supervisory committee, the MoCD&M, and interested third parties. The 3rd
parties includes ICPAK, Financial regulatory bodies like the Central Bank of Kenya, SASRA,
KUSCCO and financial institutions which may be lending money to Saccos and other arms of the
government like the Ministries of Finance, Trade, Planning and National development.
2.2.2
Going Concern Concept
The Sacco will maintain its accounts as a "going concern' on the basis that its operations will be
continued indefinitely. Therefore, assets and liabilities will represent the value of the Sacco as a
"going concern" and will not be based on liquidation values.
Whenever unusual circumstances indicate that the life of Sacco is limited, such as possible
liquidation, the "going concern" concept will no longer apply. As a result, appropriate adjustments
will be made to realistically state assets and liabilities and recognize appropriate revenues and
expenses. These adjustments could include, for example, a revaluation of the loan portfolio to
recognize possible discounts on sales of loans, an evaluation of the net realizable value of fixed
assets in liquidation, possible adjustments required in the carrying value of deferred charges and
deferred credits, etc.
2.2.3
Monetary Basis for Accounting
The presentation of Sacco’s financial statements will at all times be in Kenya Shillings. The
recording of transactions in Kenya shilling will provide the best feasible indicator of its relative
Page 14 of 54
impact on the overall operations a Sacco. It also permits identification of the amount of assets,
liabilities, income or expenses represented by the transaction; however a Sacco shall not engage in
any foreign trade operations.
2.2.4
Consistency in Accounting from Period to Period
The Sacco will utilize consistent accounting practices in the treatment of like items within each
accounting period and from one period to the next. If a material change in accounting treatment
occurs, the facts will be disclosed in the Sacco’s financial statements, including the effect on the
Statement of financial position and the changes in net income for the period.
2.2.5
Timely Recognition in Accounting Records
The Sacco’s accounting transactions will be recorded on a timely basis, so that all material
information applicable to each accounting period is shown in the records, to properly recognize in
accounting records and financial reports the reasonable value of assets, liabilities, and shareholders'
equity. The Sacco will make provision for estimated losses to be sustained in the collection or
conversion of loans and other assets by charges against current expenses (monthly). Estimated
amounts will be used in accruing income or expenses if actual amounts are not known and cannot be
readily determined. Differences between the actual and estimated amounts will be absorbed in the
operations of the subsequent accounting period.
2.2.6
Materiality
The Sacco will adopt the concept of ―Materiality‖ as defined in ICPAK’s Accounting Standards
Committee’s Framework for the Preparation and Presentation of Financial Statements which reads as
follows:
―Information is material if its omission or misstatement could influence the economic decisions
of users taken on the basis of the financial statements. Materiality depends on the size of the item
or error judged in the particular circumstances of its omission or misstatement. Thus, materiality
provides a threshold or cut off point rather than being a primary qualitative characteristic which
information must have if it is to be useful.‖
2.2.7
Conservative Accounting (Prudence Concept)
The Sacco will adopt a prudent concept to ensure that revenue and profits are not anticipated, but are
recognized for inclusion in the profit and loss account only when realized in the form either of cash
or of other assets the ultimate cash realization of which can be assessed with reasonable certainty;
provision is made for all known liabilities (expenses and losses) whether the amount of these is
known with certainty or its best estimates in the light of the information available.
2.2.8
Internal Control
The Sacco has adopted various appropriate measures of internal control systems to improve the
dependability of the accounting records. These measures are also consistent with requirements of the
International Financial Reporting Standards which emphasize that:
a) Sacco will plan to provide, to the extent feasible, segregation of duties so that different
employees will handle the operational, custodial and accounting functions.
b) Sacco will provide for a system of authorization and recording procedures adequate to
provide reasonable accounting control over assets, liabilities, income and expenses.
Page 15 of 54
c) Sacco will formalize recruitment procedures for employment of personnel capable of
performing duties and responsibilities
d) Sacco will have effective and timely audits of records and accounts by the supervisory
committee including verification of members' accounts, with assistance provided by an
independent auditor.
2.2.9
Complete Recording of Income and Expenses
Income, expenses, gains and losses will be recorded in income and expense accounts and shown on
the Statement of Income prepared for the accounting period. Income and expense accounts will
include actual and estimated loan and other asset losses.
2.2.10 Accounting Basis
The Sacco will adopt Accrual Basis of accounting. Under this basis, the effects of transactions and
other events are recognised when they occur (and not as cash or its equivalent is received or paid)
and they are recorded in the accounting records and reported in the financial statements of the
periods to which they relate. Financial statements prepared on the accrual basis inform users not only
of past transactions involving the payment and receipt of cash but also of obligations to pay cash in
the future and of resources that represent cash to be received in the future.
2.2.11 Acounting Period
The Sacco’s accounting period will commence on 1st January of each year and end on 31st December
of each year, at which time all financial records will be closed and subjected to audit. The monthly,
quarterly and annual financial reports will be prepared as per the financial policies and procedures of
the Sacco.
2.3 Accounting Profession Pronouncements
The Sacco will adhere to accounting principles as detailed by the SASRA, MoCD&M and IFRSs.
Where the Sacco need to use accounting treatment for certain transactions outside the provisions of
the guidelines provided by the regulatory authorities, the Board of Directors will refer such
accounting treatment to professional pronouncements for guidance where a particular activity is not
addressed by this manual.
2.4 Principles Affecting the Recording of Assets
Most Saccos accounting entries will originate with receipt or disbursement of cash. Other entries
will be relatively few in number and consist generally of adjustments or transfers between accounts,
establishment and maintenance of provision for loan losses, write-offs of bad loans, and recording
depreciation of tangible fixed assets. Most non cash transactions are incomplete, which is a major
source of accounting discrepancies. Sacco will ensure the complete recording of such non cash
transactions .Depending on the nature of the asset, Sacco shall adopt the recognition, measure and de
recognize the asset as stipulated by the IFRSs and other principles detailed by the SASRA and
MoCD&M.
2.4.7
Under the Accrual Basis of Accounting
The principles to be applied relating to assets of Sacco shall be as follows:
2.4.7.1
Assets General Basis for Recording
Assets will be recorded normally at their cost (costs include costs incurred in construction and its
Page 16 of 54
subsequent, replacement costs and servicing costs) to the Sacco.
2.4.7.2
Cash Unrestricted or Restricted
Any cash on deposit or on hand, which is restricted as to its use, will be recorded in separate
accounts from other cash accounts of the Sacco. Each category of restricted cash other than change
funds or petty cash will be shown separately on financial reports.
2.4.7.3
Loans
Loans outstanding and other receivables due to the Sacco will be recorded to reflect their unpaid
balances. Appropriate valuation allowance accounts will be maintained to cover estimated losses.
Provisions will be made to include amounts not allocated to or identified with specific loans.
(See the Haki na kweli Sacco’s Reporting Template: Note 13: Loan to members; page 24)
2.4.7.4
Investment
Investments and related transactions will be recorded based on the principles and standards
described below. When securities are acquired, the Sacco’s BOD will assess its intent and ability
with regard to its securities holdings. The BOD will then assign its debt and equity securities to the
appropriate measurement category: trading, held to maturity, or available for sale. At each financial
year end, of each dividend period (i.e. annually, the appropriateness of the classifications, and the
reasonableness and accuracy of the related fair value measurement trading and available for sale)
will be assessed.
Reporting requirements shall be as follows:
Debt and equity securities that the Sacco has bought and held principally for the purpose of
selling them in the near term will be classified as trading securities and reported at fair value
through the income statement.
Debt securities (not equity) that the Sacco has the positive intent and ability to hold to
maturity will be classified as securities held to maturity and reported at amortized cost, i.e.,
cost adjusted for the amortization of premiums or accrual of discounts.
Debt and equity securities not classified as either trading or held to maturity securities will be
classified as securities available for sale and reported at fair value through a separate
component of equity in the balance sheet, Accumulated Unrealized Gains/Losses on
Available for sale Securities.
Premiums paid for securities will be amortized using the interest method by periodic entries
offsetting income on investments over the period from acquisition to maturity. If the
securities were issued with a call date falling prior to maturity, the premium will be amortized
to the earliest call date. Amortization must be recorded on a time basis that corresponds to the
recording of the related income. If interest on investments is recorded at the time the income
is received by cash payments, the amortization of the premium will be recorded similarly.
Discounts on securities will be recorded using the interest method as income over the period
from acquisition to maturity by periodic entries augmenting income from investments. Entries
to record the write off of discounts will be coordinated with the recording of the related
income.
Income earned on investments will be recorded as income when received. Except income that
is automatically reinvested in common trust investments, bank accounts, and savings and loan
shares. These will be recorded as an increase in the carrying value of the investments when
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notice of income credits is received by the Sacco; the offsetting credit will be to income from
investments.
Accrued interest purchased on bonds and securities will be recorded as an asset and cleared
by an offset against interest received when the first interest payment on the related securities
is received.
2.4.7.5
Fixed Assets
Sacco’s fixed assets will be recorded in accordance with the following principles:
Acquisitions of tangible fixed assets will be recorded at cost. The cost of acquisition is the net
purchase price of the asset plus all incidental costs necessary to put the asset in condition for use,
such as freight installation cost, etc. If property is exchanged for the acquired asset, then cost will be
recorded as the amount of cash paid plus the recorded amount of the asset surrendered. No gain, if
any, will be recognized on the transaction; the entire indicated loss on the exchange, if any, will be
recognized. If property is acquired through exchange without cost, the fair market value will be used
as the "cost".
Sacco’s BoDs will establish a value limit in shillings (e.g., Kshs 10,000) under which tangible
property units purchased will be recorded as current expense even though the items may be expected
to be serviceable for more than 1 year.
Cost of land (and land improvements) will be shown separately from the cost of the buildings and
other improvements. In combination purchases, the cost of land will be recorded based on a fair
estimated market value (valuation).
Whenever depreciation is computed on a unit basis, retirements of fixed assets will be recorded by
eliminating the amount of the asset together with any related depreciation allowance. Any material
difference between the net amount realized from disposition and the net carrying value of the
depreciable assets should be recorded as an "other gain or loss" and shown in financial reports
separate from regular operating income or expense.
Note from the IFRSs work group to replace the above provision: Notes to capture IAS 16, 36, 24 and
40
2.4.7.6
Depreciation
Depreciation of Sacco’s tangible fixed assets will be the charge allocated to each accounting period
with the aim of distributing the cost or other basic value of the fixed assets less salvage (if any) over
the estimated useful life of the unit (which may be a group of assets) in a systematic and rational
manner. Depreciation will be recorded in each accounting period by charges to expense and credits
to the appropriate provision for depreciation account.
For assets having a remaining useful value, the depreciation shall not exceed the carrying value of
the asset less:
(1) the salvage value,
Or (2) Kshs. 1.00. Under this method, the depreciation record will be maintained for each item
of depreciable fixed assets. This is to ensure that assets previously chargeable to depreciation are
traced in the assets register.
For the purpose of computing the periodic amounts of the depreciation to be charged, Sacco will
use the reducing balance method to write off the cost or valuation to a residual value.
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2.4.7.7
Prepaid Expenses and Deferred Charges
Sacco’s costs which affect subsequent accounting periods, if material in amount, will be recorded as
prepaid expenses and amortized over the accounting periods to which applicable (e.g. rent, insurance
premiums, stationery and supplies, advances for accounting services, annual share insurance
premium, examination dues and fees, organization costs, etc.).
2.5 Principles Affecting the Recording of Liabilities
2.5.7
Accrual Basis of Accounting
Under the accrual basis of accounting, the principles and standards of accounting for liabilities by
Sacco are set forth below.
2.5.7.1
Liabilities General Basis for Recording
Sacco shall recognize liabilities in its statement financial position when, and only when, the entity
becomes a party to the contractual provisions of the instrument.
2.5.7.2
Accounts Payable
All bills due and remaining unpaid will be recorded as accounts payable if not paid before the end of
the financial period. These mainly include audit fees; value added tax, supervisory fees, sundry
creditors, member’s creditors, provident fund expenses, interest payable on deposit (dividends),
provisions for staff leave days etc.
2.5.7.3
Notes Payable
Funds borrowed will be recorded to show at all times the outstanding amount payable on the notes.
Notes payable will include balances of senior liens on assets repossessed or foreclosed where the
Sacco acquire title subject to the prior liens.
2.5.7.4
Accrued Interest Payable
Under the accrual basis of accounting, the recording of accruals of interest due on notes payable will
be required. If accrued interest is recorded, the offsetting charge will be to the expense account,
Interest on borrowed funds.
2.5.7.5
Accrued Expenses
Sacco will follow accrual basis of accounting which require that expenses will be accrued.
2.5.7.6
Deferred Credits
Deferred credits will be recorded separately and amortized by credits to income during subsequent
periods as the income is earned; e.g., discount on loans purchased from other Saccos, etc. The
amounts of discounts on loans recorded as deferred credits will be shown as deductions from the
related asset accounts for presentation in financial reports.
2.5.7.7
Liabilities Secured by Liens
The nature and extent to which particular liabilities are covered by a lien on assets will be shown on
the financial statements. The collateral value will be determined and the substantial sum of it is
valued.
2.5.7.8
Contingent Liabilities
Where any contingency condition exists, or set of circumstances that may or may not result in a loss
to the Sacco, the amount of contingent loss should be accrued by charges to expense if, prior to the
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issuance of the financial statements, it is probable that a loss will actually occur because an asset had
been impaired or a liability had been incurred at the date of the financial statements; and reasonable
estimate of the resulting loss can be made.
NOTE: The amount of the contingent loss to be accrued will be estimated realistically on the basis
of all information available. If some amount within a range appears at the time to be a better estimate
than any other amount within the range, that amount will be accrued. If both of the above conditions
are not met but a reasonable possibility exists that a loss may have been incurred, or if the estimate
amount is not material, a contingent loss need not be accrued but disclosed as a note to the Sacco’s
financial statements.
Examples of contingent liabilities are: pending or threatened litigation, selling loans with recourse,
guarantees of the indebtedness of others, and agreements to repurchase assets that have been sold.
2.6 Principles Affecting Equity
The principles and standards of accounting relating to Sacco’s equity are set forth below.
2.6.7
Current Year Net Income/ (Loss)
The net income or losses for the current accounting period will represent the difference between all
income and expense items.
2.6.8
Undistributed Net Income
At the close of each accounting period, the income and expense accounts will be closed into the Net
Income (loss) account after which the balance of the Net Income (Loss) account will be transferred
to Undistributed Net Income. The following transfers will then be made from Undivided Earnings:
Transfer to the credit of the Statutory Reserve the applicable percentage of net surplus for the
accounting period.
Undivided earnings should be charged or credited with amounts required to establish or adjust other
reserve accounts, including the reserve for loss contingencies or the special reserve for losses
established. Other direct charges or credits will be made to undistributed net income only for a
correction of an error for material amounts which represent adjustments affecting prior accounting
periods. Material errors in such financial statements could include;
a) The arithmetic mistakes,
b) The misuse or deletions of information,
c) The mistakes in the applications of accounting principles or procedures, and
d) The unsuitable interpretations of the accounting concepts of major transactions.
Correction of an error would include a change from an unacceptable accounting principle to a
generally accepted one. Correction of an error should result in the restatement of the prior year's
financial statements to disclose the correction of the error.
Treatment as prior year adjustments should not be applied to the normal recurring corrections and
adjustments which are the natural result of the use of estimates inherent in the accounting process;
for example, changes in estimate losses on loans, accumulated depreciation on assets disposed of,
estimate dividends, etc. These changes are properly recorded as transactions affecting the current
year in the appropriate income and expense accounts. All items of profit and loss recognized during
a period, including accruals of estimate loss from loss contingencies, must be included in the
determination of net income for the period.
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2.6.9
Dividends
Dividends to shareholders will be declared and paid from net income, after providing for required
transfers to the statutory reserves, plus any available balances of undistributed net income. The
dividends will be charged as a current year expense. Caution will be used in expending undivided
earnings to meet current operating expenses, particularly in the payment of above market dividends.
Sacco will strive to build institutional capital position to the prudential standards prescribed by the
MoCD&M.
2.6.9.1
Dividends Payable
Dividends are to be charged in the period in which they are declared. Proposed dividends are shown
as a separate component of equity until they have been ratified at the AGM
2.6.10 Reserve for Loss Contingencies
A reserve for contingencies may be established by Sacco for possible or unforeseen decreases in the
value of assets or for other unforeseen or indeterminate liabilities not otherwise shown in the Sacco’s
records. Any such reserve established only as a precautionary measure will represent a segregation
of undistributed net income and should be so classified in the financial reports and foot noted in
notes to the financial statement. Contingency reserves should not be used as a substitute for
valuation requirements for the amount of currently estimate losses on loans or other assets. When the
net loss during any accounting period exceeds available undivided earnings, the reserve for loss
contingencies and/or other segregation of undivided earnings should be reduced to offset such
excess.
Even though a Reserve for Loss Contingencies has been established for a particular liability or
expenditure, such expenditures should not be charged directly to the reserve. The loss or cost must
be recorded as an operating expense.
The reserve for contingencies is established by a charge to undistributed net income. When the event
has occurred, or the liability has been paid, for which the reserve for loss contingencies was
appropriated, the balance of the account should be credited back to undivided earnings. Transfers
from the Reserve for Loss Contingencies to Undistributed net income must be in amounts equal to
costs charged to expenses during an accounting period, thereby eliminating any reduction in
Undistributed Net Income which would have occurred due to the contingency taking place.
2.6.11 Donated Equity
Where the Sacco receives a gift or donation of a tangible fixed asset of material value, the offsetting
credit for the recorded value of the asset should be to a special equity classification for "donated
equity." Such amounts will represent equity capital of the Sacco but will not be available for
dividend payments, valuation allowance or reserve requirements. Depreciation on donated fixed
assets should be recorded and charged to current expenses based on the established value of the
assets. The established value is the prevailing market price of the asset.
2.6.12 Regular Reserve
The Statutory Reserve is an appropriation of the Undistributed Net Income. It is established in
accordance with the SASRA, for the financial stability of the Sacco.
2.6.13 Shares as Equity
Shares will be classified as equity in the Sacco’s Statement of Financial Condition.
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i) Shares are legally defined as equity;
ii) Shares function as equity and represent ownership; and
iii) Share dividends are based on earnings and are not guaranteed, i.e., shares are at risk,
insurance programs notwithstanding.
2.7 Principles Affecting the Recording of Income and Expenses
2.7.7
Under the Accrual Basis of Accounting
The principles and standards of accounting relating to income, expenses, gains and losses of Saccos
following the accrual basis of accounting are set forth below.
2.7.7.1
General Rules for Recording Income and Expenses
All income, expenses, gains and losses affecting each accounting or dividend period will be recorded
through income and expense accounts. Exceptions to this principle should be made only for
correction of an error affecting prior accounting period operations.
2.7.7.2
Basis for Recording Income
All Income will be recorded on accrual basis of accounting.
2.7.7.3
Basis for Recording Expenses
Expenses are the using or the consuming of goods and services in the process of producing income.
Expenses relating to current operations will be paid and recorded promptly when due; however; all
bills due and payable on open accounts at the end of the month will be recorded as current month
expenses and as accounts payable or accrued expenses. Significant amounts of expenses paid or
accrued that are applicable to future periods will be recorded as prepaid or deferred expenses and
amortized over the periods to which they are applicable.
2.7.7.4
Tangible Fixed Asset Expenses
Depreciation of fixed assets will be recorded as expense over the useful lives of the assets under the
depreciation method reviewed and decided at each financial year-end. Change of method shall be
accounted for as a change in an accounting estimate according to the provisions of the IFRSs.
2.7.7.5
Amortization of Deferred Charges
Charges will be included in expenses each month or dividend period for amortization of deferred
charges; e.g., prepaid insurance, leasehold improvements, organization expenses, etc.
2.7.7.6
Equipment Rental Expense
Rental charges under equipment leases will be charged directly to expense unless they represent
installment purchases of fixed assets. If a rental agreement represents an optional purchase contract,
which the Sacco plans to exercise by purchasing the equipment, the cost of the equipment will be
recorded as a fixed asset and a liability. Thereafter, payments made will reduce the liability amount
and appropriate depreciation expense will be recorded.
2.7.7.7
Loan Loss provisions
Losses on loans and related assets will be recorded as described below:
Provisions on loan losses and losses on property acquired in liquidation of loans will be charged
off as they occur with the approval of the Sacco’s BoD by charges to the provision to loan losses.
Recoveries on loans charged off will be recorded as they occur as credits to the provision for
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loan losses. The provision for loan losses will be established and maintained to reflect the
estimate amount of:
(1) Collection of problem loans,
(2) losses on assets acquired in liquidation of loans, and
(3) Losses on loans purchased from other Saccos.
The amount of the provision will be adjusted monthly or at the end of the regular accounting
period, if longer than monthly. For this purpose, the amount of the adjustment will be determined
based on the method that is described later in this manual under the discussion of the General
Ledger Account No. 1112000 – Provision for loan losses.
2.7.7.8
Other Gains and Losses
Other gains and losses normally will be included in determining periodic net earnings or losses.
Nonrecurring gains or losses (those unrelated to ordinary Sacco activities) should be shown
separately as non-operating income (expense) on periodic income and expense statements; e.g., gain
or loss from the sale of a Sacco office building. Also, any loss charged off on a note or contract
taken in connection with a sale of Sacco office quarters will be similarly charged to other losses.
2.7.7.9
Cash Overage and Shortages
Cash overages and shortages arising in the processing of cash transactions will be recorded as debits
or as credits to expense daily as the cash differences occur. Adjustments to the cash over and short
expense account will be made whenever the reason for the cash shortage or overage is determined
and the proper account charged or credited. Any shortage or overage in negotiable instruments will
be considered as a "cash overage or shortage" and the appropriate adjustment will be made at least
prior to the close of each month.
2.7.7.10 Donations
For recording any donated assets and services, the Sacco will adopt the use of the IFRS detailed
herewith. The closest IFRS to use will IAS 20: Government Grants.
Under the regulatory accounting position, donations and gifts received (including donations made
for the specified purpose of enabling the Sacco to pay dividends) will be recorded as non-operating
income and will be shown as part of the net income for the current month. As an exception to the
foregoing, if a Sacco receives a gift of a tangible fixed asset of substantial value, such as a building,
a computer, or a bookkeeping machine, the offsetting entry for the fair market value of the asset
recorded in the fixed asset account will be to Donated Equity in order to exclude such amounts from
current income and undivided earnings. Such assets donated will be depreciated with charges to
expense over their remaining useful lives.
The IFRS requires that all contributions received/made be included in income/expense when
received/made. Contributions include "donations" the Sacco receives, e.g., office space, telephone
services, data processing support; and some volunteer services, e.g., some accounting/auditing
services, some legal advice,
Some contributions which are simultaneously received and used will be recognized as both a
revenue and expense in the period received and used (e.g., sponsor-contributed utilities).
The contribution of office space will be treated as above as long as the sponsoring entity could
discontinue providing the space at any time. If the sponsoring entity provides the facility for a
specified period of time (say 5 years), the promise will have to be set up as a receivable at its fair
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value.
Contributed services will be recognized if the services received (a) create or enhance nonfinancial assets or (b) require specialized skills, are provided by individuals possessing those
skills, and would typically need to be purchased if not provided by donation.
2.7.7.11 Pension Plan Costs
In view of the complexity of the accounting principles that relate to the recording of pension plan
costs (reflecting the complexity of the subject matter), judgment is especially important in applying
the principles of pension plan accounting. The computation of pension costs for accounting purposes
requires the use of actuarial techniques and judgments.
The cost of plan termination insurance and contingent liability insurance, which is required for all
defined plans, may be included in this expense category. The preferred treatment for these two costs
along with the cost of fiduciary liability insurance is to include them in Insurance.
3 CHAPTER 3 – ACCOUNTING MANUAL: INSTRUCTIONS AND DESCRIPTION OF
ACCOUNTS
1000000
ASSETS
The Assets account is the total of both earning and non earning assets of the Sacco.
The sub accounts will detail the nature of the asset in terms of costs and revenue
generation for the Sacco:
1100000
EARNING ASSETS
The above account will be used to record the total sum of all assets that generate
income for the Sacco. The sub accounts are:
1110000
LOANS PORTFOLIO
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This account is used to record the total activity in recognizing the loans disbursed by
the Sacco to its members. The loans portfolio includes advances, overdrafts, term
loans and other member liabilities on the statement of financial position or any other
credit facility extended by the Sacco. The loans portfolio is further analyzed to
differentiate the loans and advances depending on the tenure of the advances as
follows:
1111000
Short-term Loans. These are loans with less than or equal to one year to maturity.
The short term loans are further categorized dependant on loan purpose.
1112000
Medium-term Loans. These are loans with maturities longer than one year, up and
including three years. The medium term loans are further categorized depending on
loan purpose.
1113000
Long-term Loans – These are loans with maturities longer than three years. The
loans are further categorized dependant on loan purpose and type of collateral placed
with the Sacco by the members based on product advance conditions.
1114000
Special Loans- These are loans that may not fit to any of the above categories.
1120000
ALLOWANCES FOR LOAN LOSSES
This account represents all known and potential loan losses of the Sacco. This is a
contra asset account, which will reduce the value of the loans outstanding. The
appropriate balance for this account will be determined by conducting an aging
analysis of the loan portfolio and applying appropriate allowance rates in accordance
with the Sacco’s financial policies and any guidance from the Sacco Societies
Regulatory Authority as detailed in the Sacco Societies Act, 2008. The loan portfolio
is aged based on how late repayments are in arrears.
Allowance rates are applied to these aging categories will be based on standards
imposed by regulatory authority, actual historic rates, or on standards in the industry.
The following table details the minimum prudential financial standards under SSA
and CSA to protect the member’s assets which the Sacco will apply in making
provisions for potential losses. The SASRA will further detail the rates to be applied.
Aging
Rates
0 to < 3months
0%
>3 and < 5months
10%
>5 and < 7months
50%
>7 and < 12months
75%
>12months
100%
The allowance for loan losses is further categorized into four categories to
differentiate between short term, medium term, long term and loans.
1121000
Allowances for Short Term Loan Losses
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1122000
Allowances for Medium Term Loan Losses
1123000
Allowances for Long Term Loan Losses
1124000
Allowances for Special Loan Losses
Where the Sacco had previously written off a loan and the member subsequently
repays the loan principal amount, the recovered loan will be channeled back into the
Allowance for Loan Loss account. If any interest is recovered on a loan that was
previously written off, the proceeds are credited into loan interest income account.
1130000
SHORT-TERM LIQUID INVESTMENTS (≤ TO 90 DAYS)
These accounts are short-term investments (less than or equal to 90 days to maturity)
which can be readily converted to cash and which accrue interest income, according
to the agreements drawn up for them.
1132000
Savings Account
This sub-account is used to record the Sacco’s savings deposits in bank accounts. The
following sub-sub accounts specify the bank account and where held.
1133010
Call Deposit – This sub-account is used to record the Sacco deposits in bank
accounts. Withdrawals and deposits can be made at any time by the Sacco. The
deposits will earn interest according to the terms of the deposit agreement with the
commercial banks.
1135000
Short-Term Notes & Treasury Bills - This sub-account will be used to record shortterm time deposits (three months or less) in commercial banks and other specified
financial institutions. The deposits will earn interest according to the terms of the
deposit agreement with the commercial banks.
Sub-sub-accounts may be opened, as needed, for each bank where the Sacco
maintains short-term time deposits. The following accounts will be used to record the
Sacco’s deposits in commercial paper and treasury bills with a tenor less than 90
days.
1140000
FINANCIAL INVESTMENTS (> 90 DAYS)
These are financial investments (greater than 90 days) that the Sacco has made in
various institutions. They include shares in co-operative apex organizations financial
institutions and government guaranteed paper. The specific investments with sub
accounts drawing from the main accounts will derive numbering from this subhead.
1150000
NON-FINANCIAL INVESTMENTS
These accounts will be used to record investments in other business activities not
related to the savings and credit functions of the Sacco. Therefore, they will be
recorded separately in order to keep the non-financial items apart from the financial
items and improve financial accounting transparency. Each non-financial investment
entity or activity will have a separate set of accounting books. Only the cost of the
investment in each business group will be recorded here. In addition, separate
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Statement of Comprehensive Incomes will be created, with the total net income or
loss entering into the consolidated Sacco books through this investment account.
1151000
Rental Property - This sub-account will be used to record the investment made by the
Sacco in real estate or property, whose sole purpose is to provide additional services
to members or income for the Sacco.
1159000
Other Non-Financial Investments – This sub-account will be used to record the
investment made by the Sacco in other non-financial businesses not mentioned above.
These activities are not related to savings and credit. Depending on how these
investments are represented, they will be classified according to the sub-accounts
considered necessary.
1200000
NON-EARNING ASSETS
These are assets that do not ordinarily generate income for the Sacco. This account
will be used to record assets such as cash and others that are readily convertible to
cash, but that do not generate income. An example would be a checking account that
does not earn interest; operating cash fund, or a petty cash fund. The accounts are
further analyzed to separate cash and bank to indicate location and different uses.
1210000
NON – EARNING LIQUID ASSETS
1211000
Cash: This sub account will be used to record all cash within the Sacco, however,
sub-sub accounts for specific floats will be created and used as follows:
1211010
Treasury Cash: The balance in the treasury represents the net inflow of cash and
cheques that are in-transit to banks, branches.
1211040
Petty Cash
The balances in the petty cash fund represent amounts maintained to pay or procure
items to facilitate smooth operations of the Sacco business as per the guidelines
issued by the Sacco’s management.
1212000
Bank Current Accounts
This sub-account is used to record the total of deposits in bank accounts which the
Sacco maintains. It is used for all payments of any type, except those qualifying for
the Petty Cash Fund or the Operating Fund. The sub-sub accounts are the different
bank accounts that the Sacco maintains for different uses.
1219000
Other Liquid Assets
These sub-accounts is for purposes of recording other liquid types of assets of the
Sacco like electronic cash in ATMs and electronic money transfers (EFTs) accounts.
1220000
INTEREST RECEIVABLE
The Sacco uses this account to record total interest receivable from members and staff
transactions by way of product or services. The interest receivable account has sub
accounts that record specific interest based on tenor of the loan product. These
include interest receivable on short term loans, medium term loans and long term
loans. The Sacco’s product portfolio provides for various loan products to members
and the interest receivable from each product is weighted to determine return from
each product for purposes of determining which product to focus. The respective
accounts in use are as follows:
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1221000
Interest Receivable - Short Term Loans
1222000
Interest Receivable - Medium Term Loans
1223000
Interest Receivable - Long Term Loans > 3yrs
1223900
Interest Receivable Special Loans
1240000
INTEREST RECEIVABLE ON SHORT-TERM LIQUID INVESTMENTS
This account will be used by the Sacco to record all interest that has accrued but not
yet paid to the Sacco on its short-term financial investments (less than or equal to 90
days maturity) when preparing the monthly financial statement.
1241000
Interest Receivable on Liquidity Reserves in CLF: This sub-account will be used to
record all of the interest earned but not received on the liquidity reserves.
1243000
Interest Receivable on Short-Term Bank Deposits; This sub-account will be used to
record the interest earned but yet not received, generated by Liquid Investments in
banks, such as savings accounts, certificates of deposit and others, whose maturities
are less than or equal to 2 months.
1249000
Interest Receivable Notes and Treasury Bills; This sub-account will be used to record
the interest earned but not yet received on any other short-term financial investments
not specifically mentioned above, whose maturities are less than or equal to 90 days.
1250000
INTEREST RECEIVABLE ON FINANCIAL INVESTMENTS
This account will be used to reflect any and all interest that has accrued but has not
yet been paid to the Sacco on its financial investments (greater than 90 days maturity)
when the financial statements are prepared at the end of the month.
1300000
OTHER NON-EARNING ASSETS
This account will covers all other assets not specifically mentioned in the previous
section that do not generate income, such as other receivables, fixed assets, deferred
assets and others.
1310000
OTHER ACCOUNTS RECEIVABLE
Other receivables that do not earn interest or generate revenues are included in the
sub-accounts listed in this section of the chart of accounts
1312000
Staff Debtors - Employee Advances - This sub-account will be used to record
payments or advances made to the Sacco management and employees, most
commonly advances on salary. These advances will be repaid through deductions
from their next salary. Loans granted to the Sacco’s managers and employees are
included in loans receivable, according to the purpose of each loan.
1312010
1312020
1319000
Salary Advances
Medical Excess
Other Accounts Receivable - This sub-account will be used to record other advances
or accounts receivable that are not specifically mentioned above.
Imprest Accounts
Board Imprests
1319010
1319012
Page 28 of 54
1319040
1319050
Sacco’s Investments
Under/Excess Insurance
1320000
NON CURRENT ASSETS
This account represents the Sacco’s total tangible property that is used to facilitate the
provision of financial intermediation services. The fixed assets include the value of
land, buildings, facilities, office equipment and furniture and computer equipment.
Those assets with a useful life of less than one year and which have a purchase price
below Kshs 50,000.00 may be charged directly to expenses in the fiscal year in which
they are acquired. For internal control purposes, the amount aforesaid will be
reviewed annually by the Board of Directors to establish the base amount to be used
in determining whether the purchase of an asset is classified as a fixed asset or
considered an expense. The most prudent procedures will be taken into account when
setting the minimum level as will be the amount of monthly depreciation. If it is very
small, the asset will be expensed. Otherwise, the time and cost to set up a subsidiary
ledger card and record the periodic depreciation will not be worth the effort.
1321000
Leasehold Land - This sub-account will be used to record the COST of the land
purchased for the construction of buildings or offices necessary to carry out the
Sacco’s activities.
1322000
Office Buildings - This sub-account will be used to record the COST of the buildings
built on land owned by the Sacco.
1324000
Office Equipment - This sub-account will be used to record the COST of office
equipment such as typewriters, calculators, window air conditioners, etc. To be
considered an asset, the value must be above Kshs 10,000 and meet any other criteria
established by the BoD and written in the policies and procedures manual. If the cost
is below the criteria, then the purchase will be recorded in the appropriate expense
account.
1324020
Computer Equipment - This sub-sub-account will be used to record the COST of the
computer equipment and the peripheral items of a significant value purchased by the
Sacco for its service. The COST will include sales price and related taxes, delivery or
transportation charges, and installation necessary to render the equipment operable.
1325000
Office Furniture - This sub-account is used to record the COST of furniture and
fixtures purchased by the Sacco, such as desks, tables, chairs, file cabinets, credenzas,
book shelves, lamps, safes, etc.).
Fixtures & Fittings - This sub-account will be used to record the COST of fixtures
purchased by the Sacco, such as partitions, shelving etc.). This is the value on the
books when the fixtures are disposed of because they are no longer useful. If sold, a
gain or loss on the sale may occur if the price is not the book value at the time of sale.
1325010
1326000
Vehicles - This sub-account will be used to record the COST of all kinds of
transportation equipment purchased by the Sacco for their service, which would
include cars, vans, pick-up trucks, etc., whether new or used.
1329000
Other Fixed Assets - This sub-account will be used to record the purchase or
acquisition of any other fixed asset not specifically mentioned in the above subaccounts. Additional sub-accounts may be set up, as needed, to incorporate these
assets.
Page 29 of 54
1329010
Loose Tools – This account will be used to record loose tools purchased by the Sacco
for purposes of facilitating services to members. The items in this category have a
short life span owing to high wear and tear out of every day use, but whose benefit
the society will enjoy for more than accounting period. Their recording is however
important to monitor purchases of such item in any one financial year. Examples of
these items include; calculators, staplers etc. The loose tools should be valued every
accounting period rather than being depreciated.
1329020
Intangible Assets- This account will be used to record identifiable non-monetary asset
without physical substance. An intangible asset shall be measured initially at cost.
1329030
Installation of Computer Software - This sub-account will be used to record the
amount of expenses incurred by the Sacco in the purchase and installation of software
and data conversion. The deferred expense must be amortized in monthly installments
within a maximum period of three (3) years from the purchase date, by debiting the
Amortization Expense – Installation of Computer Software.
1330000
ACCUMULATED DEPRECIATION AND AMORTISATION
This account will be used to record the depreciation and amortization accumulated on
the Sacco’s fixed assets. Third-tier sub-accounts will be used to record the
depreciation for each class of depreciable asset on a monthly basis on a depreciation
method that reflects the pattern in which the asset’s future economic benefits are
expected to flow to the Sacco.
It is the policy of the Sacco to provide full depreciation in the year of purchase and no
depreciation in the year of disposal. Depreciation of the assets will be applied from
the month in which it is purchased or put into operation.
Assets that have been completely depreciated will remain in the accounts of its group
and may only be removed when no future economic benefits are expected from its use
or disposal or otherwise donated.
1332000
1334010
1334020
1335000
1335010
1336000
1336999
133700
Accumulated Depreciation - Buildings
Accumulated Depreciation – Office Equipment
Accumulated Depreciation – Computers
Accumulated Depreciation – Office Furniture
Accumulated Depreciation – Fixtures and Fittings
Accumulated Depreciation – Motor Vehicles
Accumulated Depreciation – Other Fixed Assets
Accumulated Armotisation – Intangible Assets
1340000
Prepaid Expenses
This sub-account will be used to record all cash outflows made in advance for
services that the Sacco will receive in the future. These include: purchase of office
supplies and materials, insurance, rent, and advertising, among others, whose benefits
Page 30 of 54
will be received over a period of time of one month or longer.
1342010
Prepaid Stationery and Office Supplies - This sub-account will be used to record
purchases of stationery, tools, and other office supplies in quantities that will last for
more than one month, and whose cost is significant. Otherwise, the purchase should
be charged directly to the appropriate expense account. As these supplies are
consumed, the value used will be credited at the end of each month to this sub-subaccount, so that the balance will show the value of the existing inventory.
1342030
Prepaid Taxes - This sub account will be used to record the value of any taxes paid in
advance.
1342040
Prepaid Insurance - This sub will be used to record the value of all insurance
premiums paid in advance. At the end of each month, the amount of insurance
coverage that was used will be deducted from this prepayment by crediting the subsub-account, and debiting sub-sub-account - Other Administrative Expenses Insurance.
1342050
Prepaid Rent - This sub-account will be used to record the value of the rent prepaid
by the Sacco. At the end of the month, the amount of rent will be deducted from this
prepayment by crediting this sub-sub-account, and debiting the appropriate subaccount, Rent Expense.
1342060
Prepaid Publicity and Advertising - This sub-account will be used to record the
amount of publicity and advertising prepaid by the Sacco. At the end of each month,
the amount of publicity or advertising that is used will be deducted from this
prepayment by crediting this sub-sub-account, and debiting sub-account, Publicity
and Advertising Expense.
1342070
Prepaid Licenses and Fees - This sub-account will be used to record the amount of
licenses and matriculations prepaid by the Sacco. At the end of each month, the
amount of licenses and matriculations that used will be deducted from this
prepayment by crediting this sub-sub-account, and debiting the sub-sub-account,
Other Administrative Expenses – Miscellaneous.
1342090
Other Prepaid Expenses - This sub account will be used to record the value of any
other prepaid expenses not mentioned above. At the end of each month, the amount of
the prepaid item consumed during the month will be deducted from this sub-subaccount, debiting the appropriate expense account or sub-sub-account.
1344020
Utility Deposits - This sub-account will record deposits that the Sacco have to make
for provision of utilities and other selected services (for example, electricity, water,
telephones, rentals, etc.), office rent, equipment rentals, etc.
1342999
Other Prepaid Expense – the sub-account will be used to record the amount of any
other pre-paid amounts not previously mentioned.
1353000
Stationery Inventory - This account will be used to account for stationery stocks that
are used in the Sacco. The monthly usage is drawn from this account and expensed
whilst new stock is charged to this account.
1354000
Check-off Receipts Difference - This account will be used to record difference
between the actual cheque remittance from the member’s employer and the
remittance advice received at the Sacco. The difference is a reconciling item as a
Page 31 of 54
receivable from employer. This is a control account that sums up all the receipts from
member companies with whom the Sacco have check-off arrangements. The balance
in the account will either be a debit or a credit dependant on the direction of the
difference.
2000000
LIABILITIES
2100000
INTEREST BEARING LIABILITIES OR LIABILITY WITH COSTS
Interest bearing liabilities are obligations of the Sacco that involve a cost, for
example, external borrowings and savings deposits. The Sacco shall recognize a
financial liability in its statement of financial position when, and only when, the
Sacco becomes party to the contractual provisions of the instrument. The account is
further categorized to segregate the liabilities as follows:
2110000
SAVINGS AND TIME DEPOSITS
This account will comprise the deposits received by the Sacco by way of savings,
created pursuant to the internal and governmental regulations or agreements set forth
for this purpose.
2111000
Members Deposits – BOSA; This sub-account will be used to record all the deposits
that the Sacco receive as regular savings deposits.
2112000
FOSA Deposits: This account will be used to record the deposits received by the
Sacco by way of savings. The savings received are the Sacco’s liabilities to members
and may be withdrawn from time to time. As the members save for different
purposes, the deposits are further categorized in sub accounts by product:
2120000
SHORT-TERM LOANS PAYABLE
This account will be used to record the short-term debt obligations with financial
institutions and other entities offering financing to Sacco. The financing will be
broken down into sub accounts as follows:
2123000
Short-Term Loans Payable to Financial Institutions whose maturities are less than or
equal to one year.
2126000
Overdrafts - Overdraft balances in checking accounts that Saccos keep open financial
institutions.
2130000
LONG-TERM LOANS PAYABLE – FINANCIAL INSTITUTIONS
2132000
Long-term Loans Payable to Financial Institutions - This sub-account will be used to
record all the long-term transactions arising from the utilization of external credit and
related debt obligations that the Sacco has with Financial Institutions whose
maturities are greater than one year.
2200000
NON-INTEREST-BEARING LIABILITIES
The Non-Interest-Bearing Liabilities of the Sacco are those that do not generate an
additional cost such as: interest payable on savings deposits, or interest payable on
loans payable.
2210000
INTEREST PAYABLE
This account will be used to record all interest payable on short-term and long-term
Interest-Bearing Liabilities (short and long-term loans payable and accounts payable).
Page 32 of 54
The account will be further categorized to record separately Deposits in BOSA and
those from FOSA.
2211000
2212000
2213000
2214000
Interest Payable on BOSA Deposits - This sub-account will be used to record the
liability of the Sacco for interest accrued but not paid on BOSA deposits.
Interest Payable on FOSA Deposits - This sub-account will be used to record the
liability of the Sacco for interest accrued but not paid on all FOSA deposits.
Interest Payable on Short-Term Loans - This sub-account will be used to record the
amount of interest accrued but not paid on short-term loans incurred by the Sacco
with any financial institutions or other organization that extends credit.
Interest Payable on Long-Term Loans - This sub-account will be used to record the
amount of interest accrued but not paid on long-term loans payable incurred by the
Sacco with any financial institution or other organization that extends credit.
2216000
Taxes Payable - This sub-account will be used to record and keep track of all
income, sales and related business tax liabilities payable, except payroll taxes that are
accounted for separately in sub-account #2223000 below. This sub-account includes
the liabilities for taxes on the rental income, municipal taxes, taxes on personal and
real property, road tax and any other similar tax that the Sacco are obligated to pay.
The necessary sub-sub-accounts may be opened for each type of tax owed.
2220000
ACCRUED EXPENSES
This account will be used to record all other liabilities for expenses incurred by the
Sacco which have been incurred but not yet paid at the end of the month.
2221000
Honoraria Payable - This sub-account is used to record the amount of honoraria
payable to Board members when authorized by the members during the AGM.
2222000
Utilities Payable - This sub-account will be used to record the amounts of liabilities
for expenses related to public utilities and other services which have been billed to the
Sacco but not yet paid at month end such as electricity, water and telephone.
2223000
Payroll Deductions Payable - This sub-account will be used to record payroll
deductions from salaries and wages paid by the Sacco to its employees. Entries must
be made to the appropriate sub-sub-account based on the nature of the deduction.
2223010
National Social Security Fund Payable - This sub-account is used to record and keep
track of the Sacco’s monthly Social Security liability, which includes both the
Sacco’s portion and the amount withheld from the employee for his/her contribution
as per requirement of the NSSF Act Cap 257.
2223020
Pay as you Earn Payable - This sub-sub-account will be used to record and keep track
of the monthly ―Pay as you Earn‖ tax liability withheld by the Sacco. The deduction
must be remitted to the Kenya Revenue Authority - Paymaster General as per
timelines in the KRA Act.
2223030
NHIF Payable - This sub-sub-account will be used by the Sacco to record and keep
track of the monthly ―NHIF‖ deductions. This is a statutory deduction which will be
calculated on graduated scale depending on an employee’s gross monthly earnings.
The deduction will be remitted to National Hospital Insurance Fund per the ―NHIF‖
Page 33 of 54
Act.
2223090
Other Payroll Taxes Payable - Any other payroll taxes that the Sacco has to pay or
withhold from the employee, that are not specifically identified above, are recorded
here.
22230901
KUCFAWU - This sub-sub-account will be used to record the monthly Union
deductions. This is a deduction agreed by the each employee who is a member of the
Union representing the employees’ interests and which (Union) has signed a
collective bargaining agreement with the Sacco.
2230000
EMPLOYEE BENEFITS PAYABLE
This account will be used to sum all the employee benefits payable to the Sacco’s
employees. Employee benefits are all forms of consideration given by an entity in
exchabge for service rendered by employees. These include such benefits as: short
term employee benefits, post-employment benefits, other long-term employee
benefits and terminal benefits. Examples are; leave pay, bonuses, sick pay, retirement,
education assistance, health insurance, or other benefit, these will be recorded in the
sub-accounts that follow:
2239030
Staff Welfare - This sub-account will be used to record and keep track of expenses on
behalf of employee that cannot be directly linked to existing expense accounts.
2239040
Salaries and Wages Payable – This account will be used to record the Sacco’s liability
for all expenses related to salaries and wages due to employees, whether casual,
contracted, full time or part time, which have not yet been paid. All liabilities for
salaries and wages paid to employees for work performed, whether full time or part
time, are to be recorded in this sub-account. In addition to normal salaries and wages
earned, other types of pay are included in this sub-account, such as: overtime pay,
holiday pay, bonuses and incentive pay, etc.
2240000
OTHER NON-INTEREST-BEARING LIABILITIES
The Sacco will record accounting transactions that cannot be classified in any of the
preceding non-interest-bearing liability accounts in the following sub-accounts and
sub-sub-accounts. Additional sub-accounts and sub-sub-accounts may be created in
line with guidelines from the MoCD&M.
2241000
Non-Interest-Bearing Accounts Payable – This sub-account will be used to record all
accounts payable (―trade‖ payables) that do not accrue interest or other finance
charges. The following sub-sub-accounts will be used, based on the nature of the
transaction.
2241010
2241020
2241030
2241040
22410901
22410902
22240904
Accounts Payable to Suppliers
Members Creditors
Non-Interest-Bearing Accounts Payable to Non-members
Non-Interest-Bearing Accounts Payable to Employees
Stamp Duty Fosa
Bankers Check Account
Savers Suspense Account
2225000
Other Accrued Expenses - This sub-account will be used to record the liability for any
other expense accrued but not yet paid.
2225010
Rent Payable – This sub-sub account will record the liability for any rent expense
Page 34 of 54
accrued but not yet paid on the lease of the main office space or branches.
2225020
Audit and Supervision Fees Payable - This sub-sub-account will be used to records
the liability for accounting and auditing services that the Sacco contracts for from
outside, i.e. independent accounting firms.
2225030
Legal Fees Payable - This sub-sub-account will be used to record all expenses
incurred by the Sacco for legal services, but not yet paid.
2225040
Other Professional Services Fees Payable - This sub-sub-account will be used to
record the liability incurred by the Sacco but not yet paid, for any other type of
professional service that has not been specifically included in the above listed subsub-accounts.
2225050
Affiliation Fees Payable – This account will be used to record the liability incurred by
the Sacco from deductions made from employees for onward payment to KUSCCO.
2225090
Other Miscellaneous Accrued Expenses - This sub-sub-account will be used to record
any other liability incurred by the Sacco, but not yet paid, and not specifically
mentioned in the above sub-accounts.
3000000
CAPITAL
This account will be used to sum the total capital of the Sacco which is broadly
categorized in three sub accounts as follows:
3100000
MEMBER CAPITAL
This account will be used to record the amount of capital paid-in or owned by the
Sacco’s members.
3111000
Member Shares - This sub-account will be used to record the members’ shares.
3200000
TRANSITORY CAPITAL
Transitory Capital account will be used to record net earnings pertaining to members
apportioned for specific uses such as risk management, social education etc.
3210000
TRANSITORY RESERVES AND UNDISTRIBUTED EARNINGS
The following sub-account will be used to classify Transitory Reserves and
Undistributed Earnings:
3211000
Undistributed Prior Period Net Income - This sub-account will be used to record the
accumulated net income from prior periods, which belongs to, and will be distributed
to the members at a future date.
3300000
INSTITUTIONAL CAPITAL
Institutional Capital will be derived from the Sacco’s net income (loss) for the year.
This is the capital that will protect the solvency and self-sustainability of the Sacco as
a viable financial institution. Consequently, it pertains to the institution as a whole
and not to any particular member. This capital, therefore, cannot be distributed.
3310000
RESERVES
Page 35 of 54
This account will be used to capture all of the transactions pertaining to the Sacco’s
capital that will not be distributed during the life of the institution. The following
sub-accounts will be classified as Institutional Capital:
3311000
3312000
3313000
Statutory and Legal Reserves - This sub-account will be used to record the amounts
which, in the distributions of profits, have to be set aside by the Sacco for creating
and increasing its reserves as required by the SSA and the bylaws. The purpose of
the reserves is to protect the institution against being de-capitalized by net operating
losses.
Retained Earnings (Losses) from Prior Periods - This sub-account will be used to
record the amount of net income that has been retained by the Sacco after allocating
the reserves stipulated by SASRA or Sacco’s bylaws. The account will also receive
all of any net loss for any given fiscal year.
Donations - This sub-account will be used to record contributions of cash for the
purchase of goods and/or services, and also contributions ―in kind‖ (tangible goods
received by way of donation). Under any circumstance, the donation sub-account
remains on the books as ―Institutional Capital‖ until such time that the Sacco is
dissolved.
3400000
CURRENT PERIOD RETAINED EARNINGS
3410000
NET INCOME OR NET LOSS - This account will be used to record all net income
or loss from operations when the books are closed at the end of the year.
3411000
Undistributed Current Year Net Income (Loss) - This sub-account will be used to
record, on a temporary basis, the net amount of Earnings or Losses from the present
fiscal year, which debit or credit balance results from the arithmetical difference
between the sum of all revenues less the sum of all costs and expenses. A credit
balance will signify a profit for the year (or period); while a debit balance will reflect
a loss.
4000000
INCOME
4100000
INTEREST INCOME
This section will detail the revenues for the period resulting from the financial
intermediation activities of the Sacco; the management of the supply of, and demand
for, its monetary resources.
4110000
INCOME FROM LOANS
Sacco’s accounting system will recognize accrued interest on loans receivable.
Interest Income on Loans will be recorded only when it is earned by the Sacco.
4111000
Interest Income on Short-Term Loans (<= to 1 year)
This sub-account will be used to record the interest received on short-term loans (less
than or equal to one year). All interest will be entered into its respective sub-subaccount, which will parallel the loan category.
4112000
Interest Income on Medium-Term Loans (>1 and <= to 3 years) - This subaccount will be used to record the interest received on medium-term loans receivable
(greater than one year but less than three years). All interest will be entered into its
respective sub-sub-account, which should parallel the loan category.
Page 36 of 54
4113000
Interest Income on Long-Term Loans (> 3 years) - This account will be used to
record the interest received on long-term loans receivable (four years or more to
maturity). All interest will be entered into its respective sub-sub-account, which will
parallel the loan category.
4113010
Interest Income Special Loans
4114000
Appraisal Fees - This sub-account will be used to record the fees charged on loan
appraisal fees.
4115000
Insurance on Loans - This sub-account is used to record the mandatory members
contribution for loan insurance once a loan is advanced.
4120000
INCOME RECEIVED ON SHORT-TERM FINANCIAL INVESTMENTS
This account will be used to record all income received by the Sacco on its short-term
financial investments. Short-term financial investments of the Sacco will be regarded
as those deposits or investments which have a maturity less than or equal to 60 days.
They will be highly liquid instruments, that is, those that can be converted to cash
very readily. Further categorization of the short terms deposits income will fall into
the sub accounts.
4121000
Interest Income Received on Liquidity Reserves CFF – Short-term deposits (with
maturities less than or equal to 60 days) in liquidity reserves at the CFF.
4122000
Interest Income Received on Savings Accounts - Interest income from the Sacco’s
Savings Accounts.
4123000
Interest Income Received on Short-Term Notes, Commercial Paper and Treasury
Bills in which the Sacco has invested for with maturity period less than and equal to
60days.
4130000
INCOME RECEIVED ON LONG TERM FINANCIAL INVESTMENTS
This account is used to record all income received by the Sacco on its long-term
financial investments that have a maturity greater than 60 days. These instruments
will be those considered slow, that is, those that cannot be easily converted to cash.
Further sub-accounts to record the specific long term investments will be a follows:
4131000
KUSCCO Shares - This sub-account will be used to report all interest income
received by the Sacco on investments in shares of KUSCCO.
4132000
Long-Term CLF/CFP Deposits - This sub-account will record the receipt of any
interest income from the Sacco’s long-term deposits (maturities > 60 days) in the
Central Finance Facility (CFF). The operating fund sub-sub-account is normally
debited for all money received for this purpose.
4133000
Term Deposits – This account will be used to record any interest income received
from financial institution for periods with a maturity greater than 60days.
4139000
Interest Income Received on Long-Term Financial Investments - This account will be
used to record any interest income received from any other source not specifically
mentioned above with a maturity greater than 90 days.
Interest income received for long-term financial investments should be recorded
under this sub-account, with the corresponding debit made to the operating fund.
Page 37 of 54
4140000
ACCRUED INCOME ON SHORT-TERM FINANCIAL INVESTMENTS
This account will be used to record the total interest income accrued but not yet
received on short-term (liquid) financial investments whose maturities do not exceed
60 days. The account will have sub-accounts to categorize specific interest income
lines.
4141000
Accrued Interest Income on Liquidity Reserves – CFF; This account will be used to
record interest income that has accrued but is not yet received on Liquid Investments
of the Sacco, whose maturities are less than or equal to 60 days.
4142000
Accrued Interest Income on Short-Term CFF Deposits; Included in this account will
be all interest that is accrued on Short-term CFF deposits.
4143000
Accrued Interest Income on Short-Term Bank Deposits; This account will be used to
record all interest that is accrued but not received on short-term bank deposits.
4149000
Accrued Interest Income on Other Short-Term Financial Investments; Included in this
account will be any other short-term financial investments of the Sacco that do not
fall in any one of the specific sub-accounts mentioned above.
4200000
NON-FINANCIAL INCOME
This account will be used to record all the non-interest income of the Sacco generated
by activities other than earning assets. The following sub accounts will be used to
specify the income centre:
421000
INCOME RECEIVED ON NON-FINANCIAL INVESTMENTS
This account is used to record any other income received by the Sacco from business
activities supplementary to savings and credit. The sub-accounts to be used will
depend on the nature of business in which the Sacco maintains an investment. As
most non-financial investments are risky undertakings, no income will be accrued,
but only recognized when received.
4215000
Commissions & Fees Income
This account is used to record income from any commissions and fees levied on
services offered by the Sacco. The account may be broken down further into sub
accounts as necessary. It includes and not limited to following sub accounts.
4215020
4215030
4215050
4215060
4215070
4215080
4215090
4215100
4215110
4215200
4215300
4215400
4215500
Service Fees
Statement Charges
Commissions on EFT
Commissions on ATM Withdrawal
Commissions on Salary Transfer
Commissions on Overdraft
Commissions on Loan Transfer
Commissions on Cash Withdrawal
Commissions on Cheque Clearance
Commissions on Custody Services
Commissions on Bankers Cheques
Commissions on Standing Orders
Commissions on ATM Cards
Page 38 of 54
5000000
FINANCIAL COSTS
5100000
FINANCIAL COSTS
This account will sum the total financial costs of the period incurred by the Sacco,
generated by Interest-Bearing Liabilities such as savings deposits and loans payable.
The interest (and any fees) that the Sacco has to pay on these liabilities represent a
segment of its cost to finance its operations. The account will have sub accounts to
record specific costs based on which product they relate to.
5110000
FINANCIAL COSTS ON SAVINGS AND TIME DEPOSITS
This account will be used to record the financial costs incurred by the Sacco for the
period for accepting debt from members in the form of savings or time deposits.
5111000
Rebates on Members Deposits – Bosa; This sub-account will be used to record the
interest costs incurred on regular savings deposits attracted by the Sacco from
members. The sub-sub-accounts will be used to classify the savings deposits
according to their source.
5120000
FINANCIAL COSTS ON SHORT-TERM LOANS PAYABLE
This account will be used to record the interest costs incurred on short-term
borrowings obtained by the Sacco from the various sources of financing available to
it. As interest is accrued or paid, the entries will be recorded in any of the following
sub-accounts, as appropriate:
5121000
Interest Expense on loans from commercial Banks - This sub-account will be used to
record the interest costs incurred on short-term borrowings obtained by the Sacco
from Commercial Banks.
5122000
Interest Expense on Overdrafts - This sub-account will be used to record the interest
costs incurred by the Sacco on bank overdrafts utilized in its current accounts.
5160000
OTHER FINANCIAL COSTS
51610000
Commissions or Fees on Loans – This account will be used to record any commission
or fee charged by the lenders, whether for committing to extend the credit or on its
usage. The sub-account may be broken further into sub-sub accounts as may be
necessary.
Bank Charges - This sub-account will be used to record all bank charges that the
Sacco pays, such as for the current account, overdrafts, returned check fees, letters of
credit fees, etc.
ATM Fees - This sub-account will be used to record fees charged by ATM service
providers like Pesa Point.
5162000
5169010
5200000
NON-FINANCIAL COSTS
NON-FINANCIAL COSTS – (5200000 – 5222999)
These accounts will be used by the Sacco to record costs involved in managing other
business interests. All costs relating to the non-financial investments, whether for
interest, fees, or other purposes, will be included in this account and will have subsub accounts to identify the nature of the cost.
5211000
Rental Property Expense
Page 39 of 54
5219000
5219001
5219002
5219003
Loss on Asset Disposal
Loss on sale of Investment
Loss from Fraud, Robbery or Other form of loss
Expenses on Repossession of Collateral
5300000
OPERATING EXPENSES
This group of accounts and their related sub accounts and sub-sub-accounts covers all
of the operating and administrative expenses of the Sacco, including depreciation and
amortization charges.
5310000
PERSONNEL EXPENSES (5311000-5311080 & 5312040 & 5312080)
This account will record all the expenses related to the Sacco’s management and
permanent (or part-time) staff. The respective sub-sub account will specify the nature
of the expense.
5311000
Salaries and Wages Expense - To record all salaries and wages (payroll) earned by
the employees, whether full or part-time, for their work in the Sacco.
5311010
Permanent Staff - This sub-sub-account will be used to record the expense generated
by salaries and wages of the Sacco’s permanent staff. This compensation will include
payment for services in the performance of the duties that have been assigned to
them.
5311020
Casual Staff - This sub-sub-account will be used to record the expense generated by
salaries to any personnel hired to support the permanent staff or replace those, who
for various reasons, are absent from their jobs during a certain time period. In
addition salaries and other benefits of staff working under contracts for a certain
period will be included in this sub account.
5311030
Overtime - This sub-sub-account will be used to record the compensation generated
by that segment of the staff that is eligible for compensation for overtime work, i.e.,
hours of work exceeding the normal shift (weekends) and/or on holidays or official
days off, as determined by the Sacco’s management.
5311040
Holiday Pay/Leave Allowance - This sub-sub-account will be used to record amounts
paid to employees for approved holidays.
5311050
Bonuses and Incentives - This sub-sub-account will be used to record the amounts
paid to employees in the form of bonuses and incentives by the Sacco, for their
having performed extraordinary work or for having met other pre-determined
performance based incentives or targets.
5311070
Acting Allowance - This sub account will be used to record any compensation
granted to permanent staff where there are charged with additional responsibilities
other than those for which they were originally engaged. This account will
specifically be used where a staff is asked to act in a capacity that requires him to
assume responsibility for a job that is a grade higher than his normal job.
5311080
Special Duty Allowance - This sub account will be used to account for expenses
incurred where staff are assigned duties or tasks outside their normal duties or
responsibilities.
5312040
Housing Allowance - This sub-sub-account will be used to record the amounts
incurred by the Sacco to cater for the housing needs of its employees.
Page 40 of 54
5312080
Transport Allowance - This sub account will be used to record employee transport
allowance benefit in line with employment terms for specified staff.
5312000
Employee Benefits Expense – Any benefits that the permanent staffs receive from the
Sacco as part of their employment will be included under this sub-account.
5312010
National Social Security Fund Expense - This sub-sub-account will be used to record
the contribution for National Social Security Fund by the Sacco on the salaries and
wages paid to its employees, according to the official table of contributions
established by the government.
5312021
Pension Contribution - Retirement Benefits Expense; This sub-sub-account will be
used to record the employee retirement benefit required by law and/or the human
resources policies for all permanent employees.
5312022
Pension Maintenance Costs; This sub account will be used to record expenses
incurred in maintaining the administration of the employee’s pension fund as
stipulated in the Retirement Benefits Act.
5312060
Uniforms; This sub-sub-account will be used to record the expenses incurred for the
purchase of uniforms for the Sacco’s staff.
5312090
Electricity Concession; This sub-account will be used to record benefits in terms of
electricity concession provided to certain cadre of the Sacco’s staff in line with their
employment terms.
5313000
Training, Education and Seminars
This sub-account is used to record the cost of seminars and/or training courses
provided by the Sacco for its staff for the purpose of raising the level of their
technical skills, as well as for funding scholarships or attendance at courses, programs
or seminars outside of the organization.
5313010
Staff Seminar Fees - Training fees paid for the staff skill improvement and other
training programmes.
5313030
Course Reimbursement; Costs incurred by the Sacco as a result of providing
educational programmes to its employees on a reimbursement basis for approved
training courses initiated by the staff themselves towards improving their skills as per
the Sacco’s policies and procedures.
5313031
Training Levy – DIT: This account will be used to record the expense incurred by the
Sacco on contributions made to the Directorate of Industrial Training as per the
Labour laws.
5319000
Other Personnel Expenses - This sub-account will be used to record any other
employee benefits expense incurred by the Sacco on behalf of its staff that is not
included in the preceding sub-accounts.
5319060
Staff Insurance Expenses
5319090
Other Personnel Costs
5320000
Governance Expenses
This account will record the expenses incurred by the Sacco for meetings of Annual
General Meeting for the BoD’s, Supervisory, Education, Credit Committee and any
Page 41 of 54
other meetings (Normal and special meetings) and other representation expenses.
Depending on the nature of the meeting, the following sub-accounts will be charged.
5321000
Annual General Meeting Expenses
This sub-account is used to record the total expenses of holding meetings of the
general Assembly of the Sacco’s members, whether the annual meeting or special
meetings. Other expenses relating to the AGM or Special General meeting will be
recorded in sub accounts identified with specific activities like transport, gifts,
elections, meals etc.
5322000
Board of Directors Expenses - This sub-account will be used to record the total
expenses of the Board of Directors and Branch delegates in official functions on
behalf of the Sacco, which will be classified as appropriate in the following sub-subaccounts:
5322020
5322030
5322040
5322042
5322051
5322052
5322091
5322093
Board of Directors Expenses
Board of Directors Expenses
Board of Directors Expenses
Branch Officials
Board of Directors Expenses
Board of Directors Expenses
Board of Directors Expenses
Board of Directors Expenses
5313040
Member Education
5313041
5313042
5313043
5313044
5313045
Transport on Member Education
Subsistence on Members Education
Entertainment on Members Education
Stationery on Members Education
Facilitators Fee on Members Education
5325000
Expenses on Affiliation /Membership in National Organization - This sub-account
will be used to record dues paid by the Sacco for membership in national and regional
organizations.
5325010
5325020
Annual contributions for affiliation / membership
Ushirika Day celebrations expenses
5330000
Marketing Expenses - This account will be used to record the expenses related to the
Sacco’s marketing program. The specific expenses incurred will be recorded in the
appropriate sub-account as follows.
5331000
Advertising and Promotion Expense: Cost of any form of advertising or publicity
contracted for by the Sacco whether by radio, television, magazines or newspapers.
5332000
Market Studies Expense - costs of conducting marketing research or market studies,
whether with existing staff or contracted out by the Sacco’s management.
5334000
New Product Development Expense: Costs of research and development costs
incurred by the Saccos to provide new products or services.
5339010
Publicity Banners, Badges Expenses: Any other marketing expenses incurred by the
- Meals and Incidentals
- Transportation
- Sitting Allowances
- Sitting Allowances
- Medical Insurance Expenses
- Group Personal Accident Insurance Expenses
- Board Seminar/Education
- Recognition Awards
Page 42 of 54
Saccos that are not covered in the previous sub-accounts such as costs of brochures,
leaflets, or any other type.
5339020
Recognition Awards: Costs incurred when rewarding other members for efforts made
in promotion of the Sacco’s business and recruitment of new products, services and
members.
5339030
Field Marketing Expenses: Costs incurred by field staff in the promotion of the
Sacco’s products and member recruitment.
5340000
DEPRECIATION AND AMORTIZATION
5341000
Depreciation Expense: This sub-account will be used by the Sacco to record the
monthly depreciation crediting the corresponding accumulated depreciation account.
5341010
5341031
5341040
5341041
5341043
5341050
5342030
Depreciation Expense - Buildings
Depreciation Expense – Office Equipment
Depreciation Expense - Computers
Depreciation Expense - Office Furniture
Depreciation Expense – Fixtures & Fittings
Depreciation Expense – Motor Vehicles
Amortization on Leasehold Land: This sub-account will be used to record the amount
of the periodic amortization made based on the specific policies and period adopted
by the Sacco in their accounting policies.
5342020
Amortization Expense - Software Expenses: This sub-account is used to record the
amount of the periodic amortization made on the software over the period of time
based on accounting policies adopted by the Sacco.
5350000
Administration Expenses
This account comprises the Sacco’s general and administrative expenses incurred to
facilitate delivery of services to members/customers. Based on the nature of the
transaction, the following sub-accounts and sub-sub-accounts will be used as
appropriate.
5351000
Travel Expense
This sub-account will be used to record the travel expenses incurred by the Sacco’s
employees for performing their official duties. Sub-sub-accounts will be used, as
appropriate, based on the nature of the transaction.
5352000
Professional Services Expense
This sub-account will be used to record fees paid by the Sacco to professionals for
financial, legal, auditing/accounting, and technical assistance services. The following
sub-sub-accounts will be used, based on the nature of the transaction.
5352010
5352020
5352022
Legal Services
Audit and Supervision Services
Consultancy Fees
5353000
Repairs and Maintenance Expenses
This sub-account will be used to record the expenses of repairs and maintenance of all
assets owned or leased by the Sacco. Sub-sub-accounts will be opened based on the
Page 43 of 54
nature of the transaction and categories of assets.
5355000
Utilities and Security Expense
5355010
5355020
5355030
5355040
5355051
5355052
5355053
5355054
This sub-account is used to record expenses for services and public utilities received
by the Sacco. The specific type of service used should be accounted for in the
following sub-sub-accounts, as appropriate.
Electricity
Telephone Expenses
Water and Sewage
Postage
Security Guards
Security Alarms
Security Guards Subsistence
Armed Security
5359000
Other Administrative Expenses
This sub-account will be used to record other administrative expenses for all
materials, supplies used by the Sacco including services that assist in delivery of
services to members.
5351010
5351021
5354000
5356011
5356012
5356020
5356030
5358010
5358020
5359010
5359050
5359092
5359100
Office Rent Expense
Office Tea & Refreshments
Vehicle Running
Newspapers
Subscriptions & Periodicals
Stationery and Office Supplies Expense
Cleaning Expense
Land Rent
Land Rates
Gifts & Donations
Advertising Tenders
Permits & Licences
Miscellaneous equipment
5359030
Insurance Expenses
This sub-account is used to record the Sacco’s insurance expenses depending on the
specific nature of insured item. The following sub accounts will be used based on
nature of the insurance product:
5359031
5359033
5359034
5359035
5359036
5359037
5359038
Insurance on Members Loans
Insurance on Equipment/Computers
Insurance on Office Block
Insurance on Stocks
Insurance on Vehicles
Insurance on Money
Fidelity Insurance
Page 44 of 54
5400000
PROTECTION EXPENSES
This account is used to record the expenses of protecting the risk assets of the Sacco.
These risk assets would include all loans to the Sacco’s members and any accounts
and notes receivable. The following accounts will be used, as appropriate, to record
any transactions of this nature.
5410000
PROVISION FOR LOAN LOSSES EXPENSE
5411000
5412000
5413000
This account will be used by the Sacco to record the amount of the provisions for
uncollectible loans, based on the delinquency reported in the aging of receivables
schedule, whether short-term, medium-term, or long-term.
Provision for Losses on Short Term Loans
Provision for Losses on Medium Term Loans
Provision for Losses on Long Term Loans
4 CHAPTER 4 - PROPOSED CHART OF ACCOUNTS
This is a detailed chart of accounts based on descriptions contained in chapter 3 of this manual. The
appended chart will form the outline of trial balance that will include the statement of financial
position and statement of comprehensive income. Attempts have been made to ensure that the chart
of accounts makes it easier to group accounts in a manner that facilitates objective classification of
all financial transactions in the Sacco to embrace PEARLS/Prudential monitoring tools that will
enable generation of ratios to guide management on strategy and decision making. The main
Statement of financial position and Income & Expenditure accounts has been highlighted.
ACCOUNT NO.
1000000
1100000
1110000
1111000-1111999
1112000-1112999
1113000-1113999
1114000-1114999
1120000
1121000-1121999
1122000-1122999
1123000-1123999
1130000
1131000
1132000
1135000
1140000
1149020
1149030
1149999
1200000
1210000
1211000
1211010
ACCOUNT NAME
ASSETS
Earning assets
Gross Loan Portfolio
Short term Loans
Medium Term Loans
Long Term Loans
Special Loans
Allowance for Loan Losses
Allowance for Short Term Loan Losses
Allowance for Medium Term Loan Losses
Allowance for Long Term Loan Losses
Short-Term Liquid Investments (<=90Days)
Liquidity Reserves - Central Liq. Facility Reserve ratio
Savings Account
Short Term Notes & Treasury Bills
Long Term Financial Investments (>90days)
Non Financial Investments
Rental Property
Other Non Financial Investments
Non Financial Investments
NON EARNING ASSETS
Non Earning Liquid Assets
Cash in Hand
Treasury Cash
Page 45 of 54
FINANCIAL STATEMENT
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
1211020
1211040
1212000
1219000
1220000
1221000-1221999
1222000-1222999
1223000-1223899
1223900
1241000
1243000
1249000
1250000
1300000
1310000
1320000
1321000
1322000
1324000
1324020
1325000
1325010
1326000
1329000
1329010
1330000
1332000
1334010
1334020
1335000
1335010
1336000
1336999
1339010
1321000
1300000
1312000
1312010
1312020
1312040
1312999
1319000
Petty Cash Account
Statement of financial position
Tellers Cash
Statement of financial position
Statement of financial position
Bank Current Accounts
Statement of financial position
Other Liquid Funds
Statement of financial position
Interest Receivable
Interest Receivable Loans
Statement of financial position
Interest Receivable Short Term Loans
Statement of financial position
Interest Receivable Medium Term Loans
Statement of financial position
Interest Receivable Long Term Loans >3yrs
Statement of financial position
Interest Receivable special loans
Interest Receivable Financial Investments
Interest Receivable Short Term Financial Investments
Interest Receivable on Liquidity Reserves in CLF
Statement of financial position
Interest Receivable on Short Term Bank Deposits
Statement of financial position
Interest Receivable Notes and Treasury Bills
Statement of financial position
Interest Receivable Long Term Financial Investments
Other non Earning Assets
Other Accounts Receivable
Fixed Assets
Land
Office Building/Revaluation
Statement of financial position
Office Equipment
Statement of financial position
Computers
Statement of financial position
Office Furniture
Statement of financial position
Fixtures and Fittings
Statement of financial position
Motor Vehicles
Statement of financial position
Other Fixed Assets
Loose Tools
Accumulated
Statement of financial position
Depreciation
Accumulated Depreciation - Building
Statement of financial position
Accumulated Depreciation - Office Equipment
Statement of financial position
Accumulated Depreciation - Computers
Statement of financial position
Accumulated Depreciation - Office furniture
Statement of financial position
Accumulated Depreciation - Fixtures & Fittings
Statement of financial position
Accumulated Depreciation - Motor Vehicles
Statement of financial position
Accumulated Depreciation- Other Fixed Assets.
Accumulated Depreciation Loose Tools
Statement of financial position
Intangible assets
Computer Software
LeaseholdLand
Statement of financial position
Statement of financial position
Intangible assets
Accumulated Amortisation-Computer Software
Accumulated Amortisation-Computer Software
Accumulated Amortization - land
Accumulated Amortisation-Computer Software
Statement of financial position
Other Non-Earning Assets
Statement of financial position
Staff Debtors
Salary advances
Statement of financial position
Medical Excess
Statement of financial position
Overages/shortages Suspense Account
Statement of financial position
Statement of financial position
Staff Debtors
Statement of financial position
Other Accounts Receivable
Page 46 of 54
1319010
1319011
1319012
1319040
1319050
1319999
1340000
1342010
1342030
1342040
1342050
1342060
1342070
1344020
1342090
1343000
1353000
1352000
1352010
1352020
1354000
1352999
2100000
2110000
2111000
2112000
2120000
2123000
2126000
2120000
2200000
2210000
2211000
2212000
2213000
2214000
2216000
2220000
2221090
2225010
2225040
2225050
2225090
2225091
2221999
2223000
2223010
2223020
2223030
Imprest Accounts
Staff Imprests
Board Imprests
Sacco’s Investment
Under/Excess Insurance
Other Accounts Receivable
Prepaid Expenses
Prepaid Office Supplies - stationery etc
Prepaid Taxes
Prepaid Insurance
Prepaid Rent
Prepaid Publicity & Advertising
Prepaid Licences & Fees
Utility Deposits
Other Prepaid expenses
Installation of computer software
Stationery Inventory
Accounting Discrepancies - Assets
General Creditors for Reconciliation
TB Differences A/C
Payroll Receipts Difference
Accounting Discrepancies - Assets
Deferred Tax
LIABILITIES
INTEREST BEARING LIABILITIES
Savings and Time Deposits
Members Deposits - Bosa
Fosa deposits
Short Term Loans Payable
Commercial Banks
Overdrafts
Long Term Loans Payable Commercial Banks
NON - INTEREST BEARING LIABILITIES
Interest Payable
Interest Payable on BOSA Deposits
Interest Payable FOSA Deposits
Interest Payable Short Term Loans
Interest Payable Long Term Loans
Taxes Payable
Accrued Expenses
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Utilities Payable
Rent Payable
Professional Fees Payable
Affiliation Fees Payable
Other Miscellaneous Accrued Expenses
Petty Cash Control Account
Accrued Expenses
Accrued Payroll Liabilities
Payroll Deductions Payable
NSSF Payable
PAYE Payable
NHIF Payable
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Page 47 of 54
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
2223090
2223091
2225092
2239030
2223092
2223999
2224000
2230000
2231000
2232000
2233999
2239000
2239010
2239020
2239999
2240000
2241010
2241020
2241091
2241092
2241094
5169020
5169030
2241999
2215000
3000000
3100000
3111000
3122000
3210000
3211000
3300000
3311000
3312000
3312010
3313000
3400000
3410000
3411000
3411999
4000000
4100000
4110000
4111000
4111010
4111011
4111020
4111021
4111022
Other Payroll Deductions Payable
KUCFAW
Power Brand
Staff Welfare
Higher Education Loans Board (HELB)
Payroll Deductions Payable
Salaries & Wages Payable
Employee Benefits Payable
Pension Payable
Leave Days Payable
Employee Benefits Payable
Other Employee Benefits Payable
Medical Exclusion - Contingent
Medical Exclusion Control Account
Other Employee Benefits Payable
Other Non-Interest Bearing Liabilities
Accounts Payable to Suppliers
Members Creditors
Stamp Duty - FOSA
Bankers Cheque Account
Savers Suspense Account
VAT Pesa Point
Mobile Top Up Payable Account
Other Non-Interest Bearing Liabilities
Dividends / Honoraria Payable
CAPITAL
Member Capital
Member Shares
Insurance Fund - Refundable
Member Capital
Transitory Reserves and Undistributed Earnings
Undistributed Prior Period Net Income
Dividends
Honoraria
Transitory Reserves and Undistributed Earnings
Institutional Capital
Statutory & Legal Reserve
Capital Reserve
Retained Earnings (Losses) from Prior Periods
Donations
Current Period Retained Earnings
Current Year Net Income (Loss)
Undistributed Current Year Net Income (Loss)
Current Period Retained Earnings
INCOME
FINANCIAL INCOME
Income from Loans
Interest Income Short Term Loans
Emergency Loans
School Fees Loans
Discounting Facility
Bridging Loan
Normal Advance (Fosa Advance)
Page 48 of 54
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of financial position
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
4111023
4111024
4111025
4111999
4112000
4112010
4112020
4112999
4113000
4113010
4113011
4113012
4113999
4114000
4115000
4120000
4121000
4122000
4123020
4123999
4130000
4131000
4132000
4133000
4133010
4133011
4133012
4133999
4139000
4200000
4215000
4215020
4215030
4215050
4215060
4215070
4215080
4215090
4215100
4215110
4215120
4215130
4215140
4215150
4216010
4216020
Salary Advance - Members
Statement of Comprehensive Income
Insurance Premium Finance-Members
Statement of Comprehensive Income
Insurance Premium Finance-Staff Loan
Statement of Comprehensive Income
Statement of Comprehensive Income
Interest Income Short Term Loans
Statement of Comprehensive Income
Interest Income Medium Term Loans
Fosa Flex Control
Statement of Comprehensive Income
Staff Consumer Loans
Statement of Comprehensive Income
Statement of Comprehensive Income
Interest Income Medium Term Loans
Statement of Comprehensive Income
Interest Income Long Term Loans
Development Loans
Statement of Comprehensive Income
Super Loan
Statement of Comprehensive Income
Long Term- Staff loans
Statement of Comprehensive Income
Statement of Comprehensive Income
Interest Income Long Term Loans
Other Income Loans
Appraisal Fees
Statement of Comprehensive Income
Insurance on Loans
Statement of Comprehensive Income
Other Income Loans
Statement of Comprehensive Income
Income Short Term Liquid Investments
Interest Income on Liquidity Reserves (CFF)
Statement of Comprehensive Income
Interest Income on Savings Accounts
Statement of Comprehensive Income
Interest Income on Short Term Notes
(Commercial Paper)
Statement of Comprehensive Income
Interest Income on Treasury bills - less than 3 months
Interest Income on Treasury bills - above 3 months
Statement of Comprehensive Income
Income Short Term Liquid Investments
Income Long Term Financial Investments
Statement of Comprehensive Income
>90days
KUSCO Shares
Statement of Comprehensive Income
Long Term Central Liquidity Facility (CLF)
Deposits
Statement of Comprehensive Income
Term Deposits - Cooperative Bank
Statement of Comprehensive Income
Term Deposits – CFC Stanbic Bank
Statement of Comprehensive Income
CO-OP Bank Shares
Statement of Comprehensive Income
Sacco’s Investment Shares
Statement of Comprehensive Income
CIC Shares
Statement of Comprehensive Income
Income Long Term Financial Investments
Statement of Comprehensive Income
>90days
Statement of Comprehensive Income
NON - FINANCIAL INCOME
Statement of Comprehensive Income
Commissions & Fees
Service Charge
Statement of Comprehensive Income
Statement Charges
Statement of Comprehensive Income
Commission on EFT
Statement of Comprehensive Income
Commission on ATM Withdrawal
Statement of Comprehensive Income
Commission on Salary Transfer
Statement of Comprehensive Income
Commission on Overdraft
Statement of Comprehensive Income
Commission on Loan Transfer
Statement of Comprehensive Income
Commission on Cash Withdrawal
Statement of Comprehensive Income
Commission on Cheque Clearance
Statement of Comprehensive Income
Commission on Custody Services
Statement of Comprehensive Income
Commission on Bankers Cheques
Statement of Comprehensive Income
Commission on Standing Orders
Statement of Comprehensive Income
Commission on ATM Cards
Statement of Comprehensive Income
Commission on withdrawal Frequency
Statement of Comprehensive Income
Commission on Cash Withdrawal above Limit
Statement of Comprehensive Income
Page 49 of 54
4216030
4216040
4216050
4225000
4215999
4219000
4223060
4224010
4226000
4227000
4211000
4213000
4214000
4214001
4229000
5000000
5000000
5110000
5111000
5111010
5111090
5111999
5112000
5112040
5112090
5120000
5121000
5122000
5129999
5130000
5160000
5161000
5162000
5169010
5169999
5200000
5211000
5219000
5219000
5219000
5219000
5222999
5400000
5421000
5410000
5411000
5412000
5413000
5300000
5310000
Commission on Unpaid Cheques
Commission on Re-Joining
Commission on Reactivation of Dormant Account
Closure Fees
Entrance Fees
Commissions & Fees
Other Non-Financial Income
Forfeited Interest
Insurance - Member contributions
Tender Fees
Administrative Fees
Income from Rental Property
Gain on disposal of assets
Exchange Gains
Gain on Sale of Investments
Other Non-Financial
EXPENSES
FINANCIAL COSTS
Financial Costs on Savings and Time Deposits
Rebates on Members Deposits - Bosa
Fosa deposits
FOSA Prime Accounts
FDR Accounts
Twiga Accounts
Junior Star Accounts
Mustard Accounts
Fosa deposits
Financial Costs Short Term Loans Payable
Interest Expense on loan from Commercial Banks
Interest Expense on loan on overdraft
Financial Costs Short Term Loans Payable
Financial Costs Long Term Loans Payable
Other Financial Costs
Commissions or Fees on Loans
Bank Charges
Pesa Point Fees
Other Financial Costs
NON-FINANCIAL COSTS
Rental Property Expense
Loss on Asset Disposal
Loss on Sale of Investment
Loss from Fraud and Robbery
Expenses for Repossession of Collateral
NON-FINANCIAL COSTS
PROTECTION EXPENSES
Provision for Bad Debts
Provision For Loan Losses
Provision For Losses on Short Term Loans
Provision For Losses on Medium Term Loans
Provision For Losses on Long Term Loans
Provision For Loan Losses
OPERATING EXPENSES
Personnel Expenses
Page 50 of 54
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Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
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Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
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Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
5311000
5311010
5311020
5311030
5311040
5311050
5311070
5311080
5312040
5312080
5311999
5312000
5311060
5312010
5312021
5312022
5312060
5312090
5312999
5313000
5313010
5313030
5313031
5313999
5319000
5319060
5319061
5319062
5319063
5319064
5319065
5319010
5319020
5319040
5319050
5319070
5319080
5319999
5320000
5321000
5321010
5321020
5321025
5321030
5321050
5321060
5321070
5321080
Salaries and Wages Expense
Permanent Staff
Casual
Overtime
Leave Allowance
Bonuses and Incentives
Acting Allowance
Special Duty Allowance
House allowance
Transport Allowance
Salaries and Wages Expense
Employee Benefits Expense
Medical Expenses
NSSF Expense
Pension Contribution-Retirement Benefits
Expenses
Pension Maintenance Costs
Uniforms
Electricity Concession
Entertainment Benefit
Employee Benefits Expense
Training, Education and Seminars
Staff Seminar Fees
Course Reimbursement
Training Levy-DIT
Training, Education &Seminars
Other Personnel Expenses
Staff Insurance Expenses
Group staff Medical Insurance
Funeral Expenses Insurance
Group staff Credit Insurance
Group Personal Accident Insurance
Staff Insurance Expenses
Other Personnel Costs
Trainees Transport Expenses
Staff Subsistence
Ex - gratia
Social Welfare
Advertising Vacancies
Group Medical Insurance
Other Personnel Costs
Governance Expenses
AGM Expenses
Transport on AGM
Meals & Refreshments on AGM
AGM Coverage - Video & Photos
Stationery on AGM
Gifts on AGM
Decorations on AGM
Subsistence on AGM
AGM Expenses
Elections Expenses
Delegates Election Expenses
Page 51 of 54
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Statement of Comprehensive Income
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Statement of Comprehensive Income
Statement of Comprehensive Income
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Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
5321081
5321082
5321083
5321084
5321085
5322000
5322020
5322030
5322040
5322042
5322051
5322052
5322091
5322093
5313040
5313041
5313042
5313043
5313044
5313045
5325000
5325010
5325020
5330000
5331000
5332000
5334000
5339010
5339020
5339030
5339999
5340000
5342030
5341010
5341031
5341040
5341041
5341043
5341050
5342020
5341999
5350000
5351000
5351010
5351020
5351031
5351999
5352000
5352010
Transport on Elections
Entertainment on Elections
Subsistence on Elections
Elections Coverage - Video & Photos
Stationery on Elections
Elections Expenses
Board of Directors Expenses
BOD Expenses - Meals & Incidentals
BOD Expenses - Transportation
BOD Expenses - Sitting Allowances
Branch Officials - Sitting Allowances
BOD Expenses Medical Insurance Expense
BOD Expenses - Group Pers. Accident Insurance
Board Seminars/Education
Recognition Awards
Board of Directors Expenses
Member Education
Transport on Members Education
Subsistence on Members Education
Entertainment on Members Education
Stationery on Members Education
Facilitators Fee on Members Education
Member Education
Exps on Affiliation/Membership in national Org.
Annual Contribution for Affiliation/Membership
Ushirika Day Celebrations
Exps on Affiliation/Membership in national Org.
Marketing
Advertising and Promotion Expense
Market Studies Expense
New Products Development
Publicity - Banners, Badges etc
Recognition Awards -m Members
Field Marketing Expenses
Marketing
Depreciation and Amortization
Amortization on Land
Dep. Buildings
Dep. Office Equipment
Dep. Computers
Dep. Office Furniture
Dep. Fixtures and Fittings
Dep. Automobile
Amortization - Software Expense
Depreciation and Amortization
Administrative Expenses
Travel Expenses
Accommodation Expenses
Meals & Incidental Expenses
Transportation Expense
Travel Expenses
Professional Services Expense
Legal Services
Page 52 of 54
Statement of Comprehensive Income
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Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
5352021
5352022
5352999
5353000
5353010
5353030
5353041
5353042
5353050
5353060
5353070
5353091
5353999
5355000
5355010
5355021
5355022
5355030
5355040
5355051
5355052
5355053
5355054
5355999
5359031
5359033
5359034
5359035
5359036
5359037
5359038
5359000
5351021
5354000
5356011
5356012
5356020
5356030
5358010
5358020
5359010
5359050
5359092
5359100
5455060
5351032
5359999
Audit Fee
Consultancy fees
Professional Services Expense
Maintenance & Repairs
Maintenance & Repairs - Buildings
Maintenance & Repairs - Equipment
Maintenance & Repairs - Office Furniture
Maintenance & Repairs - Fixtures
Maintenance & Repairs - Vehicles
Software Maintenance
Repair and maintenance on Computers
Generator Running Expenses
Maintenance & Repairs
Utilities and Security Expense
Electricity
Telephone Expense
Internet Expenses
Water and Sewerage
Postage
Security Guards
Security Alarms
Security Guards Subsistence
Armed Security
Utilities and Security Expense
Insurance Expense
Insurance on Members Loans
Insurance on Equipment, Computers
Insurance on Office Block
Insurance on Stocks
Insurance on Vehicles
Insurance on Money
Fidelity Insurance
Insurance Expense
Other Administrative Expenses
Office Rent
Office tea and refreshments
Vehicle Running
Newspapers
Subscriptions and periodical
Stationery and Office Supplies Expense
Cleaning
Land Rent
Land Rates
Gift and Donations
Advertising Tenders
Permits and Licences
Miscellaneous Equipment
Custodial Services
Parking Charges
Other Administrative Expenses
Tax Expense
Donation Income
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Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
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Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Comprehensive Income
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