AFRICAN 
STANDARD  DAS  
1651  
First Edition  2018  
 
 Reference No. DAS 1651: 2018 (E) 
ICS 03.060  
 
 
© ARSO  2018  
 
 
 
 
 
 
 
 
 
 
 
Good financial grant practice — Requirements  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 DAS 1651:  2018  
ii © ARSO  2018 — All rights reserved   
Table of contents  
 
1 Scope  ................................ ................................ ................................ ................................ .. 1 
2 Normative references  ................................ ................................ ................................ .........  2 
3 Term s and definitions  ................................ ................................ ................................ ........  2 
4 Claims of compliance  ................................ ................................ ................................ ........  9 
5 Financial management  ................................ ................................ ................................ ....... 9 
5.1 Planning and budgeting ................................ ................................ ..............................  9 
5.2 Income management  ................................ ................................ ................................  11 
5.3 Expenditure management ................................ ................................ .........................  12 
5.4 Property, plant and equipment  ................................ ................................ .................  14 
5.5 Cash, bank and treasury management  ................................ ................................ ...... 16 
5.7 Travel expenses  ................................ ................................ ................................ ........  21 
5.8 Sub-grantee management  ................................ ................................ .........................  22 
5.9 Financial management systems ................................ ................................ ................  24 
5.10  Financial reporting  ................................ ................................ ................................ ... 26 
6 Human resources  ................................ ................................ ................................ ..............  27 
6.1 Human resource management and payroll  ................................ ...............................  27 
6.2 Staff development  ................................ ................................ ................................ .... 30 
7 Procurement  ................................ ................................ ................................ .....................  30 
7.1 Planning  ................................ ................................ ................................ ...................  30 
7.2 Contract management  ................................ ................................ ..............................  32 
8 Governance  ................................ ................................ ................................ ......................  33 
8.1 General  ................................ ................................ ................................ .....................  33 
8.2 Grant management and compliance  ................................ ................................ .........  35 
8.3 Audit  ................................ ................................ ................................ ........................  36 
8.4 Risk management  ................................ ................................ ................................ ..... 38 
Annex A (informative)   ................................ ................................ ................................ ...........  42 
Acknowledgement  ................................ ................................ ................................ ...................  45 
Bibliography  ................................ ................................ ................................ ............................  46 
 
  DAS 1651: 2018  
© ARSO  2018 — All rights reserved  iii Foreword  
 
The African Organization for Standardization (ARS O) is an African intergovernmental organization 
established by the United Nations Economic Commission for Africa (UNECA) and t he Organization of 
African Unity (AU)  in 1977 . One of the fundamental mandates of ARSO is to develop and harmoniz e 
African Standards (ARS) for the purpose of enhancing Africa’s internal trading capacity, increase 
Africa’s product and service competitiveness globally and uplift the welfare of African 
communities. The work of preparing African  Standards is normally carri ed out through ARSO  technical 
committees. Each Member State  interested in a subject for which a technical committee has been 
established has the right to be represented on that committee. International organizations, Regional 
Economic Communities (RECs), governmental and non -governmental  organizations , in liaison with 
ARSO , also take part in the work.  
 
ARSO  Standards are drafted in accordance with the rules given in the ISO/IEC Directives, Part 2.  
 
The main task of technical committees is to prepare ARSO  Standards. Draft ARSO  Standards 
adopted by the technical committees are circulated to the member bodies for voting. Publication as an 
ARSO  Standard requires approval by at least 75 % of the member bodies casting a vote.  
 
Attention is drawn to the possibil ity that some of the elements of this document may be the subject of 
patent rights. ARSO  shall not be held responsible for identifying any or all such patent rights.  
 
This Draft African Standard was prepared by the ARSO Technical Harmonization Committee Nu mber 
12-2 on Financial Services (ARSO/THC 12 -2) 
 
© African Organisation for Standardisation 2018— All rights reserved* 
 
ARSO Central Secretariat  
International House 3rd Floor  
P. O. Box 57363 — 00200 City Square  
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Tel. +254 -20-2224561, +254 -20-3311641, +254 -20-3311608  
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Web: www.arso -oran.org  
  
                                                 
*2018 ARSO — All rights of exploitation reserved worldwide for African Member States’ NSBs. 
 DAS 1651:  2018  
iv © ARSO  2018 — All rights reserved   
Copyright notice  
 
This ARSO document is copyright -protected by ARSO. While the reproduction of this document 
by participants in the ARSO standards development process is permitted without prior 
permission from ARSO, neither this document nor any extract from it may be reproduced, stored 
or trans mitted in any form for any other purpose without prior written permission from ARSO.  
 
Requests for permission to reproduce this document for the purpose of selling it should be 
addressed as shown below or to ARSO’s member body in the country of the request er: 
 
 
© African Organisation for Standardisation 2018— All rights reserved  
 
ARSO Central Secretariat  
International House 3rd Floor  
P.O. Box 57363 — 00200 City Square  
NAIROBI, KENYA  
 
Tel: +254 -20-2224561, +254 -20-3311641, +254 -20-3311608  
Fax: +254 -20-218792  
 
E-mail: arso@arso -oran.org  
Web: www.arso -oran.org  
 
Reproduction for sales purposes may be subject to royalty payments or a licensing agreement. 
Violators may be p rosecuted.  
 
 
 
  DAS 1651: 2018  
© ARSO  2018 — All rights reserved  v Introduction  
 
The objective of this Draft African S tandard for Good Financial Grant Practice (GFGP) is to 
standardize, simplify and strengthen the financial governance of grant funding. For grantors, they can 
use the standard as a minimum requirement to their grantees. For grantees, they can claim 
compliance with this  AfricanS tandard to support applications for grants from grantors . This draft 
African standard establish es a consistent approach to the management of grants throughout the grant 
life cycle, for the benefit of grantors and grantees . 
 
Potential  benefits of this African standard include, but not limited to the following : 
 
a)  reduce the cost and administration time for both grantors and grantees;  
 
b)  reduce the multitude of audits and financial assessments that grantees have from different 
grantors;  
 
c)  increase the confidence of grantors to fund directly to grantees;  
 
d) reduce the risk of corruption, bribery  and fraud; and  
 
e)  enable targeted financial capacity building by grantors  
 
This draft African S tandard is designed to codify and provide requirements on established good 
practice. It is a quality standard and not an accounting standard. The GFGP standar d provides a 
common framework for how grantees shall financially manage grants. It provides details of the 
requirements, specifications and criteria to be applied, to implement good financial grant practice.  
 
Grantors and grantees are very diverse in natur e, and range from:  
 
a)  very large to very small;  
 
b)  straightforward to very complex;  
 
c)  short to longer term in nature;  
 
d)  operating in safe to risky environments;  
 
e)  having different levels of risk they are willing to accept;  
 
f)  government al to private foundations and individual entities;  
 
g)  national to regional to international in nature; and  
 
h) mature to new and emerging.  
 
This African standard is designed to be inclusive of all the above by having four tiers from bronze to 
platinum. Table 1 is illustrative only and gives some indication of the types of organizations that might 
fit into each tier.  
 
The tiers are cumulative from bronze through to platinum. Therefore, for an organization to achieve 
silver compliance, it will be required to comply with all of the requirements within the bronze and silver 
tiers. For an organization to achieve gold compli ance, the organization will be required to comply with 
all of the requirements within the bronze, silver and gold tiers.  To achieve platinum compliance, the 
organization will be required to comply with all of the requirements in this African standard.  
The four tiers have been designed to encourage grantees to progressively strengthen their financial 
grant practices as their organization develops.  
The four tiers also enable grantors to manage their exposure to risk as some grantors may choose to 
specify that grantees  comply with a certain tier, or parts of a tier, depending on the size or nature of 
the grants that they manage. Grantors may, after an assessment, decide to award the grant, even if DAS 1651:  2018  
vi © ARSO  2018 — All rights reserved  the grantee does not meet their requirements and may mitigate t heir risk by putting in place additional 
financial controls, or provide capacity strengthening funding to bring the grantee up to the required 
level.  
This African  standard addresses the seven principles of good financial grant practice, which are:  
1. accounta bility;  
2. stewardship;  
3. compliance to standards;  
4. transparency;  
5. viability;  
6. integrity; and 
7. consistency  
 
Table 1— Organization activity indicative of GFGP tiers
 
In turn, these principles are supported by four key pillars of good financial management, which, if 
correctly applied, will provide the evidence to support compliance with good financial grant practice. 
These are:  
1. Internal controls  
2. Record keeping  
3. Planning  
4. Monitoring  
 
Further detail on both  the principles of good financial grant practice and four key pillars of good 
financial management can be found in Annex A.  
 
 Tier Description – the organization is likely to:  
Bronze   only operates within a region in a Country  
 be a sub -grantee of a gold level organization carrying out part of their grant 
activity; and/or  
 have few programmes and grantors.  
Silver   operate either regionally or over a number of regions within a country;   
 have  more than a few programmes and/or complex programmes;  
 be a sub -grantee of a gold level organization carrying out part of their grant 
activity; and/or  
 be a local Non -Governmental Organization (NGO).  
Gold   be large with multiple complex programmes or with more complex 
programmes in which they are both grantees and grantors (i.e., manage 
sub-grants);  
 manage activities across international boundaries, receive funding from a 
variety of grantors and often sell services to raise more funding; and/or  
 be an Intern ational Non -Governmental Organization (INGO), national NGO, 
research institution or university.  
Platinum   have a mission that requires longer term financial sustainability; and/or   
 be an INGO, NGO, established research institution, university, charity wi th 
the expectation of long term income (i.e., funding that covers a significant 
portion of its operational costs) that is regularly renewed by the same 
grantor or has its own income or investments.   DAS 1651: 2018  
© ARSO  2018 — All rights reserved  1 
  
Good financial grant practice — Requirements  
 
 
1 Scope  
 
1.1 This Draft Africa nStandard specifies requirements to be met by grantees (the organization) in 
order to demonstrate good financial grant practice (GFGP). These requirements are categorized into 
four main practice areas accordingly:  
 
1) Financial management:  
 
a) planning and budgeting;  
 
b) income management;  
 
c) expenditure management;  
 
d) property, plant and equipment management;  
 
e) cash,  bank and treasury management;  
 
f) inventory management;  
 
g) travel expenses;  
 
h) sub-grantee management;  
 
i) financial management systems; and  
 
j) financial reporting.  
 
2) Human resources : 
 
a) human resource management and payroll; and  
 
b) staff development.  
 
3) Procurement : 
 
a) planning; and  
 
b) contract management.  
 
4) Governance :  
 
a) grant management and compliance;  
 
b) audit; and  
 
c) risk management.  
 
1.2 Thisdraft African  standard does not cover:  
 
 the activities between grantor and grantee;  
 
 assessment ;  
 
 non-financial elements of project management ;  AFRICAN STANDARD  DAS 1651: 2018  
2 © ARSO  2018 — All rights reserved   
 research management; and  
 
 external audit skills.  
 
1.3 This African standard is for use by all organizations of any type, size and complexity. In 
particular, it will be of interest to those individuals responsible for managing the risk  of a financial 
grant or the management of grants within grantee organizations. It will also be of interest to grantor 
organizations as a tool to specify grant management conditions.  
 
NOTE  It is intended that the correct application of this  African  standar d will help with:  
 
a) accountability;  
 
b) the reliability of information; and  
 
c) improving transparency and trust.  
 
2 Normative references  
 
The following documents are referred to in the text in such a way that some or all of their content 
constitutes requirements  of this document. For dated references, only the edition cited applies. For 
undated references, the latest edition of the referenced document (inc luding any amendments) 
applies.  
 
There are no normative references in this document.  
 
3 Terms and definitions  
 
For the purposes of this document, the following terms and definitions apply . 
 
3.1 
access  
ability, right, or permission to approach, enter or use  
 
3.2 
accountability  
willingness, ability and obligation of an organization, or function within an organization, to be liable 
and responsible for all its activities and disclose theresults in a valid, accurate and transparent 
manner  
 
3.3 
accrual basis  
where income is recognised when it is earned and expenses recognised when they are incurred  
 
NOTE 1  See related definitions for cash basis, expenses, expenditure and costs.  
 
NOTE 2  In accrual basis reporting, expenditure can occur prior to the expenses being recognized i n financial reports and 
income can be recognized even if the cash has not been received.  
 
3.4 
asset  
item of property owned by the organization which has value and is available over a period of time to 
help deliver projects, activities, grants or contracts  
 
3.5 
assessment  
periodic review of performance against set objectives  
 
3.6 
award  
act of giving, making or approving  DAS 1651: 2018  
© ARSO  2018 — All rights reserved  3 
  
3.7 
award letter  
formal document from the grantor to the grantee which details the terms and conditions for which the 
grant has been awarded  
 
3.8 
back -up 
copying and safe storage of electronic records in use to be restored in case of any data loss  
 
3.9 
bids 
a set of documents issued by the procuring entity, inviting offers (bids, proposals or quotations) for the 
selection of suppliers, contractors or service providers to fulfill specific requirements  
 
3.10 
bribery  
offering, promising, giving, accepting or soliciting of an undue advantage of any value (which could be 
financial or non -financial), directly or indirectly, and irrespective of location(s), in violation of applicable 
law, as an inducement or reward for a p erson acting or refraining from acting in relation to the 
performance  of that person's duties  
 
3.11 
budget  
estimate of the cost of a project, grant, activity or contract, including the assumptions used in 
calculating the estimate, the basis of the expenditure, and the specified period  
 
3.12 
capacity building  
planned development of an organization’s skills, management, governance, infrastructure and other 
capabilities  
 
3.13 
capital grant income  
amount of money received to cover the costs of acquiring, operating and maintaining an asset  
 
3.14 
cash  
money in the form of physical coins, banknotes or any ‘cash equivalents’ in the form of electronic 
payments  
 
NOTE  This would cover cash distributed via  mobile devices or a preloaded card  
 
3.15 
cash basis  
accounting method where income is recognised when the cash is received and expenses are 
recognised when the cash is paid  
 
NOTE 1  This is as opposed to accruals basis (see 3.3). 
 
NOTE 2  For cash accounting there is no difference between expenses and expenditure.  
 
3.16 
code of conduct  
set of rules outlining specific behaviours that are required or prohibited as a condition of on -going 
employment  
 
NOTE  A code of conduct applies the code of ethics to a host of relevant situations. A particular rule in the code of ethics 
might state that all employees will comply with the law; a code of conduct might list several speciﬁc laws relevant to differ ent 
areas of organizational operations, or industry, that employees need to comply with. The code of ethics might state that the 
organization is an equal opportunity organization and the code of conduct might forbid sexual harassment, racial intimidation  or 
viewing ina ppropriate or unauthorized content on company computers.  DAS 1651: 2018  
4 © ARSO  2018 — All rights reserved   
3.17 
code of ethics  
set of principles to guide employee behaviour and decision making  
 
NOTE  When faced with ethical dilemmas or debatable situations, what is articulated in the code of ethics can help guide 
decision making. The code of ethics is sometimes referred to as a value statement.  
 
3.18 
competent person  
individual with sufficient skills, knowledge and experience of the specific tasks to be undertaken and 
the risks which the work will entail  
 
3.19 
contributions in kind  
non-monetary resources received or provided by the organization  
 
3.20 
corruption  
abuse of entrusted power or privileges for private gain  
 
NOTE 1  Corruption is an insidious plague that has a wide range of corrosive effects on societies. It undermines democracy 
and the rule of law, leads to violations of human rights, distorts markets, erodes the quality of life and allows organized c rime, 
terrorism and other threats to human security to flourish. This evil phenomenon is found in all countries —big and small, rich and 
poor—but it is in the developing world that its effects are most destructive. Corruption hurts the poor disproportionately by 
diverting funds intended for development, undermining a government’s ability to provide basic services, feeding inequality and 
injustice and discouraging foreign aid and investment. Corruption is a key element in economic underperformance and a major 
obstacle to pov erty alleviation and development.  
(UN-ODC, 2004)  
 
NOTE  2 Corruption can be classified as grand, petty  or political, depending on the amounts of money lost.  
 
3.21 
costs  
expenditure or expenses that are incurred to carry out the grant, contract or activity, or to run the 
organization  
 
3.22 
cost allocation  
methodology used to allocate expenditure or expenses to specific activities such as a project, grant, 
contract or activity  
 
NOTE  Cost allocation  is often used where there is no direct one to one match of the cost incurred to the job or task.  
 
3.23 
depreciation  
allocation of the cost of an asset to expense over the useful life of the asset  
 
NOTE  The useful life might be the length of the grant if there is no use for the asset once the grant has been completed. 
However, it might be longer than the length of the grant if the organization has a use for the asset after the grant has ende d. 
 
3.24 
disposal  
act of removing an asset from use within an organization by selling, discarding or donating an asset, 
whether or not it has been depreciated over its useful life  
 
3.25 
domestic travel  
movement of a resident within one’s own country’s borders  
 
3.26 
expendi ture 
payment or disbursement of cash  
 DAS 1651: 2018  
© ARSO  2018 — All rights reserved  5 
 NOTE  Where  the payment and the use of the item being purchased is within the same period, such as employment, then 
expenses will equal expenditure for that item (see 3.27). 
 
3.27 
expenses  
cost that was necessary in order to carry out the grant, contract, project or activity during the time 
period indicated in the financial report  
 
NOTE  All expenses are also expenditure. An example of the difference between an expense and expenditure is whe n 
accrual accounting is being used. A company makes an expenditure of $255,500 to purchase equipment. The expenditure 
occurs on a single day and the equipment is placed in service. Assuming the equipment will be used for seven years, under the  
straight lin e method of depreciation the cost of the equipment will be reported as depreciation expense of $100 per day for the 
next 2,555 days (7 years of service with 365 days each year).1) 
 
3.28 
financial management  
efficient and effective management of money in such a manner as to accomplish the objectives of the 
organization  
 
NOTE  Financial  management includes the planning, directing, monitoring, organizing, and controlling of the monetary 
resources of an organization and is a key responsibility for management a nd Governing Board.  
 
3.29 
financial report  
record of the financial activities and financial position for either the whole organization, individual 
activities or grants or groups of grants as required by key stakeholders  
 
NOTE 1  Key stakeholders include grantors and governing boards.  
 
NOTE 2  Financial reports  are usually produced for internal management decision making, or for monitoring financial 
performance, and might differ in format and principles from financial statements.  
 
3.30 
financial statements  
periodic records of the financial activities and financial position of the organization  produced in the 
format and to the principle of applicable financial reporting standards’.  
 
NOTE  These  are usually audited to both financial reporting standards and/or government regulations.  
 
3.31 
financial management system  
system that records transactions on an individual basis and manages costs, expenditure, payment 
processing, budgeting and reporting  
 
NOTE  The system can be:  
 a physical or electronic cash book;  
 an excel spreadsheet; or  
 a computerized system either off the shelf or bespoke that links all accounting data related to historical financial 
transactions as well as all cash transactions of pay ment and receiving, linked with budgets.  
 
3.32 
forecast  
financial projection of how the organization, project, contract or activity will perform within a given 
period  
 
NOTE 1  The organization should perform the projection against the budget.  
 
NOTE 2  The forecast could be for a grant or activity or for the whole organization for a specified period.  
 
3.33 
fraud  
act or course of deception to gain unlawful or unfair advantage  
 
                                                 
1) SOURCE: www.accountingcoach.com/blog/difference -expense -expenditure  DAS 1651: 2018  
6 © ARSO  2018 — All rights reserved  NOTE  This could include an intentional concealment, omission, or perversion of truth, or inducement of another party to part 
with some valuable item or surrender a legal right.  
 
3.34 
governing board  
group of individuals appointedto jointly oversee the management of  the whole organization thereby 
safeguarding the interests of the organization  
 
3.35 
grant  
amount of money provided by the grantor to a grantee for a particular purpose  
 
3.36 
grantee  
organization or individual that has been awarded a grant from a grantor  
 
3.37 
grant conditions  
restrictions and limits to the use of grant income  
 
3.38 
grant cycle  
end to end process of acquiring, receiving, managing and closing down a grant  
 
3.39 
grant income  
revenue and/or cash received by a grantee as a result of implementi ng the grant  
 
3.40 
grantor  
individual or organization that awards a grant to a grantee  
 
3.41 
indirect cost recoveries  
 
method for recovering indirect costs that is incurred by the grantee in delivering a grant, activity, 
project or contract  
 
NOTE  Generally, cost recoveries are recovering the costs of any given expense.  
 
3.42 
indirect expenditure  
cost that cannot be directly matched to an individual activity, grant, project or contract  
 
NOTE  Indirect  costs usually include overheads and can be fixed or recurring.  
 
3.43 
internal auditor  
a qualified professional  who audits and inspects the accounting records and practices of the 
organization to provide information to the top management and  governing bo ard 
 
 
3.44 
inventory  
raw materials, work in progress or finished goods that will be used in a future period to undertake the 
activity for which the grant or income is provided  
 
NOTE  This use could be in the:  
 ordinary course of business of delivering the activity for which the grant or income is being received;  
 process of production for activity for which the grant or income is being received;  
 form of materials or supplies to be consumed in the production process; or  
 rendering of services.  DAS 1651: 2018  
© ARSO  2018 — All rights reserved  7 
  
3.45 
invitation  to bid  
process of seeking out prospective contractors to carry out a specific activity or project  
 
3.46 
invitation to tender  
a) for open tendering: make the information on the procurement publicly available, including 
related assessment criteria; and  
 
b) for restricted/selective and negotiated/limited methods: publish information on how to qualify 
in a readily available medium within a timeframe and in a manner that would reasonably allow eligible 
suppliers to apply.  
(OECD, 2009)  
 
3.47 
monitoring  
supervisi ng activities in progress to ensure they are on -schedule in meeting the grant conditions or 
other objectives and performance targets  
 
3.48 
organization  
group of persons structured and managed to meet a need or to pursue collective goals  
 
NOTE 1  Organizations  are likely to have a management structure that determines relationships between the different activities 
and the members, and subdivides and assigns roles, responsibilities, and authority to carry out different tasks.  
 
NOTE 2  Organizations  are likely to be legally registered entities with not - for-profit status.  
 
3.49 
organogram  
diagram that shows howan organization is structured  
 
3.50 
overrun  
continue beyond or above an expected or allowed time or cost  
 
3.51 
per-diem  
daily allowance which is paid to the traveller from which they will pay their expenses  
 
3.52 
period  
number of weeks, months, years that relate to the content of the report or activity  
 
NOTE  The period can be for part of the whole lifecycle of a grant, project contract or activity. Typically, a period is monthly, 
quarterly and annually.  
 
3.53 
procedure  
set of actions that is the official or accepted way of doing something  
 
NOTE  A procedure may include any processes relevant to the activities it covers.  
 
3.54 
procurement  
overall process of acquiring goods, civil works and services which includes all functions from the 
identification of needs, selection and solicitation of sources, preparation and  award of contract, and all 
phases of contract administration through the end of a services’ contract or the useful life of an asset  
 
3.55 
programme  DAS 1651: 2018  
8 © ARSO  2018 — All rights reserved  set of related grants, projects or activities with a shared purpose or long -term aim  
 
NOTE  These  might be funded from a range of grants and funding sources.  
 
3.56 
project  
 
a unique set of processes consisting of coordinated and controlled activities with start and finish 
dates, undertaken to achieve an objective.  
 
3.57 
process  
a systematic series of  written actions directed to some end  
 
3.58 
policy  
written principles and guidelines, approved by top management or the governing board, to guide an 
organization's decisions and actions  
 
NOTE 1  A policy may include any procedures relevant to the activities  it covers.  
 
NOTE 2  It is intended that the processes, procedures and policies required by this African  standard are cumulative. Where an 
organization has a policy covering a particular activity, it might not require a separate procedure which relates to the same 
activity. Where an organization has a procedure it might not require a separate process which relates to the same activity.  
 
3.59 
quotes  
a request for quotation (RFQ) whose purpose is to invite suppliers into a bidding process to bid on 
specific p roducts or services. RFQ generally means the same thing as IFB (Invitation For Bid). An 
RFQ typically involves more than the price per item.  
 
 
3.60 
reporting cycle  
recording, processing and communicating financial or other information relating to a certain  period of 
time 
 
3.61 
reserves  
funds that an organization has set aside from surpluses produced in previous years or from 
endowments, gifts or legacies  
 
3.62 
risk management  
process of identifying and forecasting possible risks, together with the identific ation of procedures to 
avoid or minimize their impact  
 
3.63 
risk register  
tool for documenting risks to the organization, project, grant or activity and the actions to manage 
each risk  
 
3.64 
segregation of duties  
where a task is divided into stages and different persons are required to be responsible for the 
different stages involved in completing the task  
 
NOTE  The separation by sharing of more than one individual in one single task is an internal control intended to prevent 
fraud and error.  
 
3.65 
sub-grant  DAS 1651: 2018  
© ARSO  2018 — All rights reserved  9 
 grant awarded by a grantee to another organization to carry out part of their activity or project  
 
3.66 
sub-grantee  
organization that is awarded a sub -grant  
 
3.67 
top management:  
 
person or group of people who directs and controls an organization  at the highest level  
 
NOTE   Top management has the power to delegate authority and provide resources within the organization.  
 
3.68 
travel allowance  
payment made to an employee to cover accommodation, food, drink or incidental expenses they will 
incur dur ing business related travel  
 
NOTE In some organizations, travel allowance is sometimes referred to as travel advance  
 
3.69 
whistle -blowing  
act of drawing attention to perceived illegality, wrongdoing or misconduct within the organization  
 
NOTE  Corruption , fraud, bullying, health and safety violation, cover -ups and discrimination are common activities 
highlighted by whistle -blowers.  
 
4 Claims of compliance  
 
An organization seeking to claim compliance with this African standard  shall clearly state the level at  
which they are claiming compliance in accordance with the following:  
 
a) For bronze compliance, the organization shall comply with all the requirements within this 
African standard  that fall under a ‘bronze compliance’ heading;  
 
b) For silver compliance, t he organization shall comply with all the requirements within this 
African standard  that fall under a ‘bronze compliance’ heading, plus those that fall under a 
‘silver compliance’ heading;  
 
c) For gold compliance, the organization shall comply with all the  requirements within this African 
standard  that fall under ‘bronze compliance’, ‘silver compliance’ and ‘gold compliance’ 
headings;  
 
d) For platinum compliance, the organization shall comply with all of the requirements within this 
African standard . 
 
NOTE  It is intended that the processes, procedures and policies required by this African standard are cumulative. Where an 
organization has a policy covering a particular activity, it might not require a separate procedure which relates to the same  
activity. Wh ere an organization has a procedure it might not require a separate process which relates to the same activity.  
 
5 Financial management  
 
5.1 Planning and budgeting  
 
5.1.1  Bronze compliance  
 
5.1.1.1  The organisation shall have a process for planning and preparation of budgets  
 
5.1.1.2  The organization shall prepare a budget for each grant or grant application.  
 
5.1.1.3  The organization shall prepare different budgets for all activities of the organization.  DAS 1651: 2018  
10 © ARSO  2018 — All rights reserved   
NOTE  This includes both activities funded by the grantor, and any other activities funded from other 
sources.  
 
5.1.1.4  The organization shall identify a competent person to be responsible for the preparation of the 
budget.  
 
5.1.1.5  The organization shall have a pr ocess for amending budgets to reflect changing 
circumstances as allowed by the grant conditions  
 
5.1.2  Silver compliance  
 
5.1.2.1  The organization shall have a procedure for planning and preparation of budgets .This shall 
include at least the following:  
 
a)  Who is responsible for preparing the budget.  
 
b)  When it is prepared  
 
c)  Who it is approved by  
 
d)  What information is required and where it is obtained from  
 
e)  What assumptions are made  
 
5.1.2.2  The organization shall assign top management or board to approve the budget.  
 
NOTE  Depending  on the requirements of each grantor, written approval of changes to the budget should be obtained in 
advance of any expenditure being undertaken that was not within the originally agreed budget.  
 
5.1.2.3  Where a budget is prepared for a grantor who requir es reporting in a different currency from 
the currency used for expenditure, the assumptions about exchange rates shall be clearly detailed 
and it shall be clear how any potential exchange gains or losses will be dealt with before the budget is 
approved.  
 
5.1.2.4  The organization shall have a procedure for prepar ingthe budget in the currency of 
expenditure and convert it to the grantor’s currency.  
 
5.1.2.5  The organization shall have a procedure for amending budgets to reflect changing 
circumstances as allow ed by the grant conditions . 
 
5.1.2.6  The organization shall have a process on indirect cost recovery which include at least the 
following:]  
 
a) How indirect costs are calculated for each grant  
 
b) How indirect costs is to be budgeted for in the grants  
 
c) How indirect costs are mappedto grantors cost definitions  and then recovered from the grant 
where allowable.  
 
NOTE Grantors typically allow a fixed percentage for indirect costs and this is then included in the grant. The organisation 
should understand how  much of their indirect cost this funds.  
 
5.1.3  Gold compliance  
 
5.1.3.1  The organization shall have policies that set out how grants are to be applied for budgeting, 
recording, reporting and monitoring . 
 
5.1.3.2  The organization shall prepare a consolidated budget which covers all grants, projects  and 
activities including operational activities and which includes planned grant income.  DAS 1651: 2018  
© ARSO  2018 — All rights reserved  11 
  
5.1.3.3  The budget shall be prepared taking into account the different currency denominations of 
each grant, i.e ., the currency(ies) in which the budget item is to be invoiced and/or paid.  
 
5.1.3.4  Actual expenditures shall be compared to the budget at least quarterly (or at a higher 
frequency if required by the grantor) for monitoring purposes.  
 
5.1.3.5  The organiz ation shall prepare a cash -flow forecast which includes each grant, and update 
these regularly to reflect the budgets that are approved and any changes made due to on -going 
budget monitoring.  
 
5.1.3.6  The organi zation shall have a policy to check that whe re the grantor provides cash advances, 
these are not used in ways which would not comply with the grant conditions.  
 
5.1.3.7  The organisation shall have a policy on indirect cost recoveries including where they are not 
fully recovered from the grant, how they are funded . 
 
5.1.4  Platinum compliance  
 
5.1.4.1  The organization shall comply with the requirements given in 5.1.1, 5.1.2 and 5.1.3.  
 
5.1.4.2  The organization shall produce revised budgets or forecasts either within the year, annually or 
over multiple  years.  
 
5.1.4.3  The organization shall have a three to five year plan and reserves strategy that is approved 
bytop management  and the governing board.  
 
5.2 Income management  
 
5.2.1  Bronze compliance  
 
The organization shall issue and keep uniquely numbered  receipts for each item of income.  
 
5.2.2  Silver compliance  
 
5.2.2.1  The organization shall have a clearly defined procedure for the recording of income. The 
procedure shall include:  
 
a) the definition of income, if cash or non-cash  and how it applies to the organization;  
 
b) how income will be treated if it is carried across a reporting period, or end of the financial 
year;  
 
c) how to report on income on either cash or accruals or a combination basis thereof;  
 
d) descriptions of non -grant i ncome, e.g. interest, return on investments or fees and 
subscriptions; and  
 
e) how the income reported in the financial management system is reconciled to the bank 
account or cash received.  
NOTE  It should therefore be possible for the organisation to prepare reports which break down the total of grant income into 
all the separate grants received and by both cash and non -cash income.  
 
5.2.2.2  The organization shall operate a financial management system that requires grant income to 
be recorded with a unique ref erence for each grant received.  
 
5.2.2.3  The organization shall have procedures to receive income into either pooled or individual 
grantors specified bank accounts.  
 DAS 1651: 2018  
12 © ARSO  2018 — All rights reserved  5.2.2.4  The organization shall have a financial management system that records each grant’ s income 
that will enable reporting against the requirements of the grantor.  
 
5.2.3  Gold compliance  
 
5.2.3.1  The organization shall have a policy that defines contributions in kind which includes at least 
their definition, their valuation, recording, reporting and approval process.  
 
NOTE  Contributions  in kind are also often referred to as gifts in kind.  
 
5.2.3.2  The organization shall have a policy that includes managing income in a foreign currency.  
 
NOTE  This policy should include how the organizatio n will manage cash received in foreign currencies and how gains and 
losses are accounted for and managed.  
 
5.2.3.3  The organization shall have a policy concerning how income will be classified to meet both 
grantors and internal requirements.  
 
NOTE  Classifications  can include, but might not be limited to, grant income or capital or revenue grant income, interest from 
prefunded cash balances and membership fees or subscriptions.  
 
5.2.4  Platinum compliance  
 
5.2.4.1  The organization shall comply with th e requirements given in 5.2.1, 5.2.2 and 5.2.3.  
 
5.2.4.2  The organization shall have a financial management system that is able to produce reports 
that satisfy grantor income recognition, internal reporting as well as generally accepted accounting 
principles.  
 
5.3 Expenditure management  
 
5.3.1  Bronze compliance  
 
5.3.1.1  The organization shall have a process to ensure payment vouchers and / or their respective 
supportive documentation are attached from being paid more than once.  
 
5.3.1.2  The organisation shall have a process that ensures that all expenditures and expenses are 
entered into a financial management system . 
 
NOTE  This can be achieved by clearly marking all payment vouchers and their respective supporting document to show that 
they are ‘PAID’ upon payment, or by implementing controls within a financi al management system.  
 
5.3.1.3  The org anization shall have a process to prevent grantors’ funds from being used for 
expenditure outside of the grant conditions  
 
5.3.2  Silver compliance  
 
5.3.2.1  The organization shall have a procedure to allocate indirect expenditure in line with the 
grantor’s requirements. This shall include how these costs are calculated and if fully or partially 
recovered  
 
NOTE  The basis could be based on timesheets, level of effort, and percentage of overall expenditure  
 
5.3.2.2  The org anization shall have a segregation of dutiesprocedure as to who can initiate and 
approve expenditure and payments from the bank accounts  
 
5.3.2.3  The organization shall have a procedure to ensure payment vouchers and supporting 
documentation shall be reviewed and approved by a designated top management  within the 
organization before payment.  
 
5.3.2.4  The organization shall have a procedure which will determine if identified item to be 
purchased requires a purchase order  
 DAS 1651: 2018  
© ARSO  2018 — All rights reserved  13 
 5.3.2.5  The organization shall have a procedure to ensure that if a purchase order is made then the 
organization shall compare invoice quantities and price with the terms indicate d before each payment 
is made.  
 
NOTE  At least 3 quotations should be obtained before an order is made so that prices can be compared.  
 
5.3.3  Gold compliance  
 
5.3.3.1  The organization shall have a policy to prevent grantors’ funds from being used for 
expend iture outside of the grant conditions.  
 
5.3.3.2  The organization shall have a policy that sets out how to calculate the direct and indirect costs 
of a project, grant, contract or activity. The policy shall include at least the following :  
 
a) Who the policy applies to  
 
b) Principles for the cost allocation  
 
NOTE  These could be a reference to a key grantors ’ terms and conditions for allowable costs or broader if required.  
 
c) Definitions of types of costs  
 
NOTE  These can be directly allocated; indirectly allocated; overheads/ administration etc.  
 
d) Methodologies to be applied  
 
e) Implementation process  
 
f) Risks  
 
g) Monitoring  
 
h) Oversight Board or committee  
 
i) Links to other relevant policies  
 
NOTE  Policy could be a ‘costing of activities’ or ‘cost allocation’ policy and may be part of another policy e.g. budgets . 
 
5.3.3.3  The organization shall have a policy that states who has the authority to:  
 
a) requisition expenditure;  
 
b) authorize expenditure;  
 
c) authorize payments;  
 
d) act as a bank signatory;  
 
e) approve and sign contracts and other commitments; and  
 
f) approve and issue organizational bank cards, including credit cards and other 
electronic payment methods.  
 
NOTE 1  Such  a policy is often described as a scheme of delegation or a framework for delegated authority.  
 
NOTE 2  Requests  for expenditure requiring prior approval should be in writing and include an explanation justifying the 
expenditure.  
 
NOTE 3  The reviewer should  check the names of approv ers, dates, designations and signatures appearing on the payment 
vouchers.  
 
5.3.3.4  The organization shall have a policy on expense or cost transfer between projects or grants 
with at least the following:  DAS 1651: 2018  
14 © ARSO  2018 — All rights reserved   
a) who authorizes the transfer;  
 
b) who can transfer; and  
 
c) documentation required  
 
5.3.3.5  The organization shall have a procedure for monitoring open purchase orders.  
 
5.3.3.6  The organization shall have a procedure for monitoring if purchase orders have been made 
after the invoi ce has been received.  
 
5.3.4  Platinum compliance  
 
The organization shall comply with the requirements in 5.3.1, 5.3.2 and 5.3.3.There are no additional 
requirements . 
 
5.4 Property, plant  and equipment  
 
5.4.1  Bronze compliance  
 
5.4.1.1  Theacquisition, recording and disposal of buildings, vehicles, telecommunication, computing 
and other equipment by the organization shall be in line with the agreed terms and conditions of the 
grant agreement.  
 
5.4.1.2  The organization shall have measures to physically se cure its buildings, vehicles, 
telecommunication, computing and other equipment.  
 
NOTE  Such  safe keeping and security can for example be through keeping assets in secure locations and employing 
competent personnel to safeguard the location.  
 
5.4.1.3  The organization shall keep all registered title deeds and other ownership documents safe 
from theft, fire and other risks.  
 
5.4.1.4  The organization shall maintain vehicles, telecommunication, computing and other equipment 
in working condition.  
 
5.4.1.5  The o rganization shall maintain a list of buildings, vehicles, telecommunication, computing 
and other equipment,  
 
5.4.2  Silver compliance  
 
5.4.2.1  The organization shall maintain a list of buildings, vehicles, telecommunication, computing 
and other equipment, t hat at least indicates the  following : 
 
a) acquisition date and cost, including purchase and any costs until asset is commissioned or 
additions thereafter;  
 
b) unique reference or serial number;  
 
c) department/division/section;  
 
d) person responsible;  
 
e) whether the asset is owned by the organisation or leased or on loan from a third party;  
 
f) source of funds; and  
 
g) location of asset.  
 
NOTE  This includes assets that are donated  DAS 1651: 2018  
© ARSO  2018 — All rights reserved  15 
  
5.4.2.2  The organization shall have a definition for an asset and a value below which the as set is not 
added to the list (see 5.4.2.1).  
 
5.4.2.3  The organization shall have a procedure to determine the frequency of asset verification.  
 
5.4.2.4  The verification procedure shall record the status and condition of the asset.  
 
Note  Each stock item should have an assigned status to enable to identify items that are available for use by the 
organisation or are under investigation. Examples are:  Available, Restricted, On Hold, and Rejected.  
 
5.4.2.5  If an asset is not able to be verified, this discrep ancy shall be investigated and resolved and 
the list updated.  
 
5.4.2.6  The organization shall have a procedure that determines if an asset should be insured and if 
a maintenance or service contract is to be purchased.  
 
5.4.2.7  The organization shall label and tag all vehicles, telecommunication, computing and other 
equipment such that it can be reconciled to written records.  
 
5.4.2.8  The organization shall have a procedure for approving the use of telecommunication, 
computing and other equipment. This shall  include  at least the following user’s name and employee 
number;  
 
a) purpose and location of the use; and  
 
b) date of issue and return  
 
5.4.2.9  The organization shall have a procedure for approving the use of vehicles, which shall 
include, at least the following;  
 
a) user’s name and employee number;  
 
b) purpose and destination of the use;  
 
c) validity of the user’s driving licence;  
 
d) date of issue and return; and  
 
e) distance travelled.  
 
5.4.2. 10 The organization shall have a procedure on the disposal of vehicles, 
telecommunications, computing and other equipment. This shall include  at least the following:  
 
a) the item number;  
 
b) the rationale for the sale or disposal;  
 
c) the method of disposal, such as sale, donation, other;  
 
d) who approved the disposal;  
 
e) in case of sale, the price obtained;  
 
f) the name of the recipient of the disposal; and  
 
g) the date and entries of write off from the register.  
 
5.4.3  Gold compliance  
 DAS 1651: 2018  
16 © ARSO  2018 — All rights reserved  5.4.3.1  The organization shall have a fixed asset policy, which includes capitalization threshold, 
useful economic life, depreciation , sale and disposal.  
 
5.4.3.2  The organization shall have a policy that clarifies which assets shall be covered by insurance.  
 
5.4.3.3  The technical and economic rationale forpurchasing new assets shall be docum ented for all 
asset acquisitions.  
 
5.4.3.4  The organization shall have a policy to determine the frequency of asset verification.  
 
5.4.4  Platinum compliance  
 
5.4.4.1  The organization shall comply with the requirements in 4.4.1, 4.4.2, and 4.4.3.   
 
5.4.4.2  In addition the organization shall have an impairment policy where the value of the asset in 
the financial management system is recorded at its economic value to the organization.  
 
5.5 Cash, bank and treasury  management  
 
5.5.1  Bronze compliance  
 
5.5.1.1  The organization shall determine the maximum and minimum amount of cash required to 
maintain normal operations.  
 
5.5.1.2  The organization shall ensure that cash is securely held.  
 
NOTE  Security  measures should reflect the environment in which the organiz ation is operating.  
 
5.5.1.3  The organization shall ensure that any cash that is distributed to an individual is recorded with 
at least the following  information:  
 
a) date of distribution;  
 
b) person to whom the distribution is made;  
 
c) signature of the recipient and of the person distributing the cash; and  
 
d) the purpose of the distribution.  
 
5.5.1.4  Receipts shall be retained by the individual and the organization.  
 
5.5.1.5  The organization shall ensure that when cash is distributed to an individual, that  individual 
provides supporting documentation and any remaining cash on their return to the organization . 
 
5.5.1.6  The organization shall have a process which defines the frequency of cash counts. The cash 
count process shall check that the opening balance, cash distributed , cash returned  and additional 
cash provided , equals the amount of cash held. Any differences sha ll be recorded and reported . 
 
5.5.1.7  The organization shall have a bank account that is in its legal name. Where the bank account 
is not held in the organization name, the bank account holder shall be agreed with the grantor.  
 
5.5.1.8  The organization shall record all cash received and payments made ensuring all transactions 
can be individually identified.  
 
NOTE  All cash received should be recorded immediately and promptly banked.  
 
5.5.1.9  The organization shall ensure that there is s ecurity in place for cash in transit.  
 
5.5.1.10  The organization shall have a secure location to store all bank documentation 
including cheques, and access to this location shall only be for authorized individuals.  
 DAS 1651: 2018  
© ARSO  2018 — All rights reserved  17 
 5.5.1.11  The organization shall have a uthorized individuals for signatory and review of the 
bank accounts, cash books and cash float.  
 
NOTE  The organization should have and retain a bank confirmation of authorized individuals.  
 
5.5.1.12  The organization shall be able to extract and report all transactions in the currency 
that the expenditure is incurred in  
 
NOTE The above may be recorded in an off system spread sheet.  
 
5.5.1.13  All bank accounts shall be periodically reconciled to the financ ialmanagement system  
 
NOTE  Bank  accounts should be reconciled at least monthly, however often these are undertaken weekly or even 
dailydepending on the risk exposure.  
 
5.5.2  Silver compliance  
 
5.5.2.1  Any amendments and closing of bank accounts shall be done by the top Management 
through a resolution.  
 
5.5.2.2  Where the grantor requires a dedicated bank account, the organization shall have procedures 
to ensure that only expenditure relating to that grantor’s activity is paid from that bank account.  
 
5.5.2.3  The organization shall h ave procedures that require at least two signatories to make a 
payment, sign a check or transfer cash from one bank account to another.  
 
5.5.2.4  The organisation shall have a procedure to ensure the person responsible for the grant shall 
be a signatory to the bank account where there is no established finance function that provides 
services to the grant activity.  
 
5.5.2.5  The organization shall have procedures to ensure computers that have access to on line 
banking facilities are secure, with up to date ant i-virus, spyware and firewall software.  
 
5.5.2.6  The organization shall have a procedure for recording the names and roles of personnel who 
can access any on line payment system. These shall include at least the following:   
 
a) a list of the named individual s: and  
 
b) the frequency with which the list is reviewed  
 
5.5.2.7  .The organisation shall have procedures that ensure there is a clear segregation of duties 
regarding the cash and bank accounts.  These shall include at least the following :  
 
a. How the authorization of orders for goods and services is separated from those 
responsible for making and authorizing payments to suppliers.  
 
b. How the cash payment records are reviewed by a more senior person that the person 
issuing cash and recording cash payments . 
 
5.5.2.8  The organization shall have procedures that define the credit worthiness of each bank which 
will be used before a bank is utilized.  
 
5.5.2.9  The organization shall have procedures that include at least the following:  
 
a) which role is responsible for cash;  
 
b) aperiodic count and reconciliation by two individuals;  
 
c) a limit to the amount of cash that is held;  
 
d) a limit to the amount of cash that is advanced to an individual;  DAS 1651: 2018  
18 © ARSO  2018 — All rights reserved   
e) defines what type of expenditure is allowed to be purchased using cash;  
 
f) when expenditure from cash is entered into the financial management system;  
 
g) how checks are to be managed, including use of sequential numbers, retaining voided 
checks;  
 
h) how the cash is to be transported to and from locations and banks; and  
 
i) how incoming cash i s received, receipted and banked.  
 
5.5.2.10  Where the grantor funds a grant in a currency that is different to the currency in which 
the expenditure will be incurred, the organization shall prepare the budget in the currency of 
expenditure and convert it  to the currency of the grant. The exchange rate assumptions and basis 
shall be recorded as part of the budget documentation.  
 
5.5.2.11  The organization shall have a procedure that includes at least the following : 
 
a) how foreign exchange rates are determined  for both actual and budget;  
 
b) how any foreign exchange gains or losses are to be recorded and managed; and  
 
c) how foreign exchange rates are recorded and reported in budgets and financial reports.  
 
NOTE  This might require conversion from one or more currenc ies into the currency provided by the 
funder.  
 
5.5.3  Gold compliance  
 
The organization shall have a cash, bank, treasury and foreign exchange policy or policieswhich 
include at least the following : 
 
a) opening, closing and making amendments to bank accounts;  
 
b) investing cash balances;  
 
c) management of any borrowing facilities;  
 
d) risk management of monetary assets and liabilities including at least:  
 
(i) interest rate risk;  
 
(ii) foreign exchange risk including how gains and losses are accounted for and 
managed;  
 
(iii) inflation r isk; 
 
(iv) level and management of counterparty risk; and  
 
(v) process for selection of the person responsible for making surprise counts of cash 
who does not have access to the cash;  
 
e) banking contingency management;  
 
f) protection against money laundering;  
 
g) the definition and use of financial instruments;  
 
h) segregation of responsibilities: and  DAS 1651: 2018  
© ARSO  2018 — All rights reserved  19 
  
i) use of external service providers.  
 
5.5.4  Platinum compliance  
 
5.5.4.1  The organization shall comply with the requirements in 5.5.1, 5.5.2 and 5.5.3.  
 
5.5.4.2  In addition, the organisation’s cash and treasury policy shall include:  
 
a) Policy statement; and  
 
b) Principles of cash and treasury management  
 
5.6 Inventory management  
 
5.6.1  Bronze compliance  
 
5.6.1.1  The organization shall define what constitutes inventory.  
 
5.6.1.2  The organization shall keep up to date records of all inventory.  
 
NOTE  Records at at least  should have information on inventory received, inventory issued and balances of inventory in 
storage. Records should have correct description, date, number of units and  unit of measure.  
 
5.6.1.3  The organization shall store all inventory in a suitable storage environment with regard to 
temperature, humidity, security and risk of damage and deterioration from adverse weather 
conditions.   
 
5.6.1.4  There shall be physical locks and safeguards for all inventory stores to mitigate theft, damage 
and physical loss.  
 
5.6.1.5  The organisation shall require a document that records the amount and value of the inventory 
being issued, the signature of the recipient and of the person distributing the inventory . 
 
5.6.2  Silver compliance  
 
5.6.2.1  The organisation shall carry out periodic  inventory counts and reconci le to both the inventory 
lists and relevant financial information in the financial management system.  
 
NOTE  The frequency of the stock take and reconciliations should be based on a risk exposure  
 
5.6.2.2  The organization shall have a procedure for issuing  inventory to users.  
 
5.6.2.3  The organization shall record, at least  inventory received, inventory issued and balances of 
inventory in storage. These records shall list correct description, date, number of units and unit of 
measure.  
 
5.6.2.4  The organizat ion shall have procedures for recording inventory that users in the organization 
have returned to storage.  
 
5.6.2.5  The organization shall have procedures for de -recognition of inventory either due to 
obsolescence or expiry.  
 
5.6.2.6  The organization shall  have procedures to be able to report the remaining cost and quantity of 
all inventory at the end of each month. This shall include at least the following : 
 
a) inventory issued;  
 
b) who the inventory was issued to;  
 
c) the cost and quantity of the inventory issued; and DAS 1651: 2018  
20 © ARSO  2018 — All rights reserved   
d) the location of the inventory issued.  
 
5.6.2.7  The organization shall have an inventory management procedure including at least the 
following : 
 
a) how the inventory is valued;  
 
b) howinventory are received, receipted, including who will inspect and accept the 
inventory being delivered;  
 
c) how inventory is issued and/or sold;  
 
d) minimum inventory levels;  
 
e) internal reporting and frequency, including status of inventory levels and write -
offs;  
 
f) obsolescence and damage; and  
 
g) governance over the inventory.   
 
5.6.2. 8 The inventory procedure shall also clarify how the organization will consider the value of 
insurance cover for inventory.  
 
5.6.2.9  The organization shall have documented procedure on the disposal of inventory, including  at 
least the following : 
 
a) the item number;  
 
b) the rationale for the disposal;  
 
c) the method of disposal such as sale, auctioning, donation and others:  
 
d) who approved the disposal;  
 
e) in case of a sale, the sale price;  
 
f) the name of the recipient of the disposal; and  
 
g) the date and entries of the write off from the inventory record . . 
 
5.6.2.10  The organization shall maintain records sufficient to determine the amount of unused 
inventory on hand at the termination of their grants.  
 
NOTE  In this inventory count, the orga nization should verify the existence, use, and need for the inventory.  
 
5.6.3  Gold compliance  
 
5.6.3.1  The organization shall have a policy on classifying assets either as inventory or fixed assets.  
 
5.6.3.2  The organization shall have an electronic inventory control system, to facilitate timely 
updating of movements of inventory and production of periodic records for inventory checks.  
 
5.6.3.3  The organization shall have a policy that includes how the inventory is valued, minimum and 
maximum stock le vels and frequency of stock checking depending on risk and governance . 
 
5.6.3.4  The organization shall have a policy that states its methodology for issuing inventory.  
 DAS 1651: 2018  
© ARSO  2018 — All rights reserved  21 
 5.6.3.5  The organization shall have a policy for identifying and reporting any inventor y that is 
unrecorded, missing or is past its useful life.  
 
5.6.3.6  The organization shall appoint a competent person who has the responsibility of keeping, 
counting and maintaining the current inventory.  
 
5.6.3.7  The organization shall include within the i nventory policy how it will consider the value of an 
insurance cover for inventory.  
 
5.6.3.8  The organization shall have a procedure to report any loss or abnormal consumption patterns 
of inventory items to top management for monitoring and necessary actio n. 
 
5.6.4  Platinum compliance  
 
5.6.4.1  The organization shall comply with the requirements in 5.6.1, 5.6.2 and 5.6.3.  
 
5.6.4.2  The organization shall have a formal review and reporting mechanism for inventory 
management which involves conducting on -going monitoring activities  
 
NOTE  These  mechanisms should provide management with regular and up -to-date information on the status of the 
inventory in stock.  
 
5.7 Travel expenses  
 
5.7.1  Bronze compliance  
 
The organization shall have a process for making payments for per -diem, travel advances or review of 
receipts and subsequent reimbursement of expenses for approved official travel.   
 
5.7.2  Silver compliance  
 
5.7.2.1  The organization shall have a travel procedure that clearly indicates permiss ible travel 
expenses and allowances for both domestic and international travel. The procedure shall outline:  
 
a) application and approval process for all travel;  
 
NOTE  This may include seeking prior approval for international travel from the grantor, if the g rant agreement requires this.  
 
b) per diem rates or travel allowances;  
 
c) any restrictions or advice that travellers shall be aware of in relation to travel 
insurance requirements or the organization’s health and security policies for 
travellers;  
 
d) accounting requirements for per diem or travel allowance;  
 
e) any additional grantors’ requirements or restrictions which go beyond the 
organization’s procedures;  
 
NOTE  For example, the requirement to use certain airlines, or to retain and file boarding passes.  
 
f) that ad vances for travel expenses are documented and accounted for after return 
from travel; and  
g)  
h) that no one member of the organization’s staff has more than one advance at any 
given time without approval.  
 
5.7.3  Gold compliance  
 
5.7.3.1  The organization shall h ave a travel and expenses policy, which includes:  
 
a) how employees make travel arrangements;  DAS 1651: 2018  
22 © ARSO  2018 — All rights reserved   
b) restrictions on the class or method of travel;  
 
c) who approves expenses;  
 
d) how per diem and travel allowances are set;  
 
e) which expenses require a receipt and what procedures to follow when there is no 
receipt;  
 
f) use of vehicles and hired cars;  
 
g) use of organization’s bank or credit cards;  
 
h) under which circumstances entertainment costs can be claimed, and any relevant 
restrictions and grantor requirements; and  
 
i) require ments for submission of a travel report after each trip.  
 
5.7.4  Platinum compliance  
 
The organisation shall compl ywith requirements given in 5.7.1, 5.7.2 and 5.7.3.There are no 
additional requirements  
 
5.8 Sub-grantee management  
 
5.8.1  Bronze compliance  
 
NOTE  The organizations awarding sub -grants shall be compliant with at least the Gold Tier requirements of this 
African standard  
 
5.8.2  Silver compliance  
 
NOTE  The organizations awarding sub -grants shall be compliant with at least the gold tier requirements of this African 
standard . 
 
5.8.3  Gold compliance  
 
5.8.3.1  The organization shall request applications or proposals that clearly define the work to be 
accomplished by the sub -grantee under the grant conditions.  
 
NOTE  The organization should have participated and co -authored the proposal document for the partnership or consortium 
which clearly defines the work of the sub -grantee.  
 
5.8.3.2  The organization shall document their rationale for the selection of sub -grantees.  
 
5.8.3.3  The organisation shall have a policy that assesses their sub -grantees financial capacity to 
manage the sub -grant in line with their own policies and procedures as well as the grantor.The policy 
shall include the following:  
 
a) Who the policy applies to . 
 
b) The principles for how the assessment will be undertaken  
 
c) The types of risks being assessed including:  
 
i) The country risk rating in terms of fraud and corruption as per a global index  
 
ii) ii) The sub grantee’s capacity to financially manage grants as assessed ag ainst 
this African standard,  
 
iii) Foreign exchange  DAS 1651: 2018  
© ARSO  2018 — All rights reserved  23 
  
iv) Cash advance  
 
d) The size of the sub-grant and the cumulative value of sub-grants to the same 
organisation;  
 
e) The cumulative value of sub-grants to any one country;  
 
f) The nature of the activity;  
 
g) The profile and nature of the budgeted expenditure ; 
 
h) Historical experience with sub-grantee ; and  
 
i) The mitigating controls to be implemented depending on the outcome of the risk 
assessment.  
 
5.8.3.4  The organization shall have a policy for managing contracts and managing c ontract 
performance.  
 
5.8.3.5  The organization shall have a policy that requires any sub -grantee to fulfil the grant 
conditions. This policy shall also include procedures for applying sanctions for non -compliance with 
grant conditions.  
 
5.8.3.6  The organiz ation shall have a policy for when a sub -grant has been completed. This shall 
include, as a minimum:  
 
a) filing and recording the final sub -grant expenditure report;  
 
b) final payment or recovery of surplus payment;  
 
c) that the sub -grant unique code is deactivated  to new expenditure and any remaining 
expenditure cleared to zero;  
 
d) final sub -grant audit or review as required by grantor; and  
 
e) report to grantor as required by grantor.  
 
5.8.3.7  The organization shall have a policy to protect the organization’s relationship with the grantor 
that includes, as a minimum:  
 
a) their legal status;  
 
b) that all sub -grants will have an award letter and sub -grantee agreement which is 
signed by them and the sub -grantee;  
 
c) that the sub -grantee award letter and sub -grantee agreement will include the ultimate 
grantor’s conditions, or where it is not possible, the risks are recorded and approved by the 
governing board  or top management ; 
 
d) how the sub -grantees are to be selected and the due diligence process to b e 
undertaken before a grant is awarded.  
 
5.8.3.8  The organization shall have a list of, and supporting documentation for, all active sub -
grantees.  
 
5.8.4  Platinum compliance  
 
5.8.4.1  The requirements given in 5.8.1, 5.8.2 and 5.8.3 shall apply.  
 DAS 1651: 2018  
24 © ARSO  2018 — All rights reserved  5.8.4.2  In addition,the organization shall prepare consolidated reporting (both actual and budget) for 
all sub -grants and include them within their own organizations reporting.  
 
5.9 Financial management systems  
 
5.9.1  Bronze compliance  
 
5.9.1.1  The organization shall have suitable storage for supporting documentation.  
 
5.9.1.2  The organization shall have a cashbook to record transactions which agrees to the bank 
accounts.  
 
5.9.1.3  The organization shall have separate bank accounts for each funding source if requi red by 
the grantor.  
 
5.9.2  Silver compliance  
 
5.9.2.1  The organization shall have procedures for the prompt identification, escalation, resolution 
and documentation of challenges to the financial management system.  
 
5.9.2.2  The organization shall have a s ystem for recording transactions that uses a unique identifier 
to link to supporting documentation.  
 
5.9.2.3  The organization shall have a procedure that allows tracing of physical documents to the 
financial management system.  
 
NOTE  The organization should use a unique reference number on the payment document to trace a transaction in the 
financial management system.  
 
5.9.3  Gold compliance  
 
5.9.3.1  The organization shall have a financ ialmanagement system that has at least the following 
functionalit ies: 
 
a) records entries at the transactional level with a unique identifier;  
 
b) each transaction has an audit trail from the start of the process to completion, such as 
purchase order to supplier payments to financial reports to underlying documentation;  
 
c) enforces  segregation of duty;  
 
d) audit trail of changes and who made the change; and  
 
e) ability to produce finance reports which can be checked back to the underlying transactions.  
 
5.9.3.2  The organization shall have a financial management system that has a built in  audit trail for all 
transactions, with the audit trail being able to track each transaction through from start to finish.  
 
NOTE  This would mean that every step is recorded for each item in a finance report, from purchase order to final payment.  
 
5.9.3.3  There shall be a user access policy intended for all staff operating and managing the financial 
management system in the organization, accompanied by mechanisms put in place to classify users 
with reference level of seniority, level of management or user de partment in the organization.  
 
5.9.3.4  The organization shall have a policy to:  
 
a) require ea ch user who accesses the financial management system to have a unique access 
password ;  
 
b) periodically review the format of the unique access password  requirements;  
 DAS 1651: 2018  
© ARSO  2018 — All rights reserved  25 
 c) review user accounts, privileged user accounts and administrators on a regular basis; and;  
 
d) authorize each new user and their access rights.  
 
5.9.3.5  The organization shall have a policy to define the frequency and locations of back -up and 
recovery of cr itical system information.  
 
5.9.3.6  The organisation shall a policy for the governance for the financial management system to 
ensure it can produce auditable financial information. This shall include, at a minimum : 
 
a) ownership within the organization;  
 
b) roles  and responsibilities, including who has access to, and can make changes to, the live 
system;  
 
c) types of changes to the financial management system ranging from changing financial reports 
to upgrades or new functionality;  
 
d) who can authorize changes to the f inancial management system; and  
 
e) skills and experience required.  
 
5.9.3.7  The organization shall have a financial management system that is capable of providing 
auditable financial reports, backed up by verifiable and original supporting documentation.  
 
5.9.3.8  The organization shall have a procedure to prevent unauthorized access to confidential digital 
data, records and documents and to keep confidential records and documents secure at all times, 
especially when not in use .This shall include the physica l security over paper documents and the 
system security over electronic documents . 
. 
5.9.3.9  The organization shall have a data protection policy that protects digital and personal data 
and information and determines which data is classified as confidentia l and for how long these 
records shall be retained . 
 
5.9.3.10  The organization shall have a policy which prescribes which balance sheet items are 
reconciled and at what frequency.  
 
5.9.3.11  The balance sheet reconciliations shall be reviewed and signed o ff by a separate 
more top management  than the person who prepares the reconciliation.  
 
5.9.4  Platinum compliance  
 
5.9.4.1  The organisation shall comply with the requirements given in 5.9.1, 5.9.2 and 5.9.3.  
 
5.9.4.2  In addition, the organization shall have  a three to five year forward strategy for its financial 
management system. This shall include, as a minimum:  
 
a) the purpose of the financial management system and how it supports the organization;  
 
b) criteria for how the organization determines if the finance  management system is meeting the 
needs of the organization;  
 
c) future enhancements, if any, to the current system and the milestones for delivery;  
 
d) how often the system is to be reviewed to determine if an upgrade or replacement is required; 
and 
 
e) review of the technology platform that supports the financial management system.  
 
NOTE  System  failures should be followed up and documented, including successful resolutions and explanations.  DAS 1651: 2018  
26 © ARSO  2018 — All rights reserved   
5.10 Financial reporting  
 
5.10.1  Bronze compliance  
 
5.10.1.1  The organization shall submit financial reports to grantors in accordance with the 
grant conditions.  
 
5.10.1.2  Financial reports submitted to grantors shall be signed as evidence of review and 
approval by the person identified to do so in the organization, or  as specified in the grant conditions.  
 
5.10.1.3  All financial transactions reported shall be supported by the financial records and 
supporting documentation.  
 
5.10.2  Silver compliance  
 
5.10.2.1  The organization shall have a review and approval procedure  for financial reports to 
key stakeholders.  
 
5.10.2.2  The organization shall submit a financial report to the grantor reporting actual 
expenditure against budget for the current grant cycle period and on a cumulative basis.  A narrative 
explanation of any  variances between actual and budget shall accompany the financial report.  
 
5.10.2.3  The organization’s financial reports to grantors shall indicate the basis on which they 
are prepared unless the basis is already provided by the grantor’s grant conditions.  
 
5.10.2.4  Other financial information reported by the organization shall include the approved 
budgets, expenditures and variance analyses.  
 
5.10.2.5  The organization shall report financial information for the current grant cycle period 
and cumulatively from the beginning of the grant requirements.  
 
5.10.2.6  The organization shall have a procedure to establish criteria for variations from 
budget, whichrequire s an explanation and proposed management action to be provided in financial 
reports.  The explanation and proposed management action for each significant variation shall then be 
approved by a top management  in the organization.  
 
5.10.2.7  For grant -funded expenditure, the organization shall have a procedure to confirm that 
its internal bud get thresholds are consistent with the budget thresholds agreed with the grantor.  
 
NOTE  Many  organizations use percentage of budget as part of the criteria, e.g. 10%.  
 
5.10.2.8 The organization shall have procedures for extracting financial information fro m the financial 
management system for financial reporting purposes.  
 
5.10.2.9 The organization's procedures shall include guidelines on when data can be manually added 
to financial reports after the information has been extracted from the financial managem ent system.  
 
NOTE  Any manual data added will be documented and highlighted to the top management  reviewing the finance report.  
 
5.10.2.10  The organization shall have a procedure for preparing and reviewing grant finance 
reports by personnel responsible for the grant. This shall include the frequency with which the report 
is prepared, who shall review it for possible errors or compliance issues which shall be investigated 
and resolved . 
 
5.10.3  Gold compliance  
 
5.10.3.1  The organization shall prepare financial reports that are reviewed and approved  by 
top management  and/or governance board meetings.  
 DAS 1651: 2018  
© ARSO  2018 — All rights reserved  27 
 5.10.3.2  The organization shall have a policy for including expenditure that has been approved 
but which has not been spent in full.  
 
5.10.3.3  The organization shall be able to report all income and expenditure as required by top 
management and the governing board. These shall include, at least the following : 
 
a) grant income;  
 
b) expenditure;  
 
c) assets and liabilities; and  
 
d) cash flows.  
 
5.10.4  Platinum compliance  
 
5.10.4.1  The organisation shall meet the requirements given in 5.10. 1, 5.10.2 and 5.10.3.  
 
5.10.4.2  In addition  the organization’s financial report shall contain the following information at 
a minimum:  
 
a) grant income, including a narrative on how grant income has been recognized in the financial 
report;  
 
b) cumulative expenditures;  
 
c) assets and liabilities of the organization;  
 
d) cash flows; and  
 
e) both cumulative actual expenditure for the period being reported and a forecast and/or budget 
for the whole financial year.  
 
6 Human resources  
 
6.1 Human resource management and payroll  
 
6.1.1  Bronze compliance  
 
6.1.1.1  Any vacancy announcements made by the organization shall outline a minimum set of skills, 
knowledge and experience necessary for a success ful candidate to meet.  
 
6.1.1.2  The organization shall interview candidates, document the interview and check any 
references and right to work before hiring.  
 
6.1.1.3  The organization shall have a contract with relevant terms and conditions for all employees or 
other people working on and being charged to the grant.  
 
6.1.1.4  The organization shall have a process in place for preventing, detecting and responding to 
allegations of corruption, fraud and bribery.  
 
6.1.1.5  The organization shall have a pr ocess , for establishing and reviewing an approved salary 
structure . 
 
6.1.1.6  The organization shall have a proce ss that requires all staff involved in a recruitment process 
to declare any conflicts of interest.  
 
6.1.1.7  The organization shall have a proce ssto ensure all the e mployees directly charged to a  grant 
record hours worked  
 DAS 1651: 2018  
28 © ARSO  2018 — All rights reserved  6.1.1.8  Timesheets, or equivalents, shall be prepared by staff working on multiple projects or grants 
where the funder’s conditions so require and to facilitate expenditure allo cation.  
 
6.1.2  Silver compliance  
 
6.1.2.1  The organization shall have in place, and communicate to all staff, a management structure 
with clearly defined roles, chain of command and authorizations levels.  
 
6.1.2.2  The organization shall stipulate the differ ence between consultancy and employment 
contracts, and consultancy fees shall be identified in the organization’s records and reports.  
 
6.1.2.3  Any employment contract prepared by the organization shall include the terms of employment 
– whether fulltime, p art time or otherwise. The contract shall include how much holiday the employee 
is entitled to annually and how many days can be carried forward into a new year.  
 
6.1.2.4  The organization shall have a procedure that requires all staff involved in a recruit ment 
process to declare any conflicts of interest.  
 
6.1.2.5  The organization shall have a procedure  to ensure all the employees directly charged to a 
grant record hours worked  
 
6.1.2.6  Timesheets, or equivalents, shall be prepared by staff working on multiple projects or grants 
where the funder’s conditions so require and to facilitate expenditure allocation.  
 
6.1.2.7  Timesheets, or equivalents, shall be approved by a top management  responsible for the work 
being undertaken.  
 
6.1.2.8  The organization s hall have procedures for preventing, detecting and responding to 
allegations of corruption, fraud and bribery.  
 
6.1.2.9  The organization shall have a procedure for establishing and reviewing an approved salary 
structure . 
 
6.1.3  Gold compliance  
 
6.1.3.1  The organization shall have a policy for ensuring only staff with an active signed contract are 
paid and that they are recorded accurately to the correct grant or operational area. This policy shall 
include at least the following:  
 
a) approval and documentation required for a person to be added to and removed from the 
payroll;  
 
b) approval and documentation required for a person's pay to be changed;  
 
c) approval and documentation required to move a person from one project or grant code to 
another;  
 
d) roles and responsibi lities are defined such that there is segregation of duties between payroll 
preparer, authorizer and making the payment;  
 
e) that there is segregation of duties between the person who updates HR records and who 
prepares the payroll;who is authorized to have access to the payroll system; and  
 
f) that the payroll system has an audit log that can highlight who has accessed the system.  
 
6.1.3.2  The organization shall prepare monthly payroll data including, as a minimum:  
 
a) a reconciliation to the last month ’s payroll  data highlighting any:  
 
(i) new staff;  DAS 1651: 2018  
© ARSO  2018 — All rights reserved  29 
  
(ii) staff leaving.  
 
b) payments to staff over and above their normal payments;  
 
c) other reconciling data; and  
 
NOTE  Such  as changes to bank details.  
 
d) any staff whose expenditure code has changed from the previous month.  
 
6.1.3.3  Payroll data shall be verified by a top management  prior to processing the payroll for payment.  
 
6.1.3.4  Changes from the previous month shall be supported by authorized documentation.  
 
6.1.3.5  The payroll data shall be recorded in the finance man agement system.  
 
NOTE  There  should be a bank reconciliation prepared by the organization to the general ledger.  
 
6.1.3.6  The organization shall have policies for preventing, detecting and responding to corruption, 
fraud and bribery.  
 
6.1.3.7  The organization shall have a human resources system to record staff, staff pay and overtime 
undertaken.   
 
NOTE  This system should have similar levels of control as the financial management and payroll systems  
 
6.1.3.8  The organization shall have an HR po licy on:  
 
a) planning and recruitment of staff;  
 
b) selection procedure;  
 
c) promotions of staff;  
 
d) disciplinary procedures;  
 
e) starters and leavers procedures; and  
 
f) code of conduct and ethics.  
 
6.1.3.9  The organization shall havea policy , for establishing and reviewing an approved salary 
structure  
 
6.1.4  Platinum compliance  
 
6.1.4.1  The organization shall comply with the requirements given in 6.1.1, 6.1.2 and 6.1.3.  
 
6.1.4.2  The organization shall have a remuneration policy that includes at a minimum:  
 
a) basis of pay increase and performance assessment ; 
 
b) how the organization will benchmark its pay in relation to the market; and  
 
c) who reviews and approves pay increases.  
 
6.1.4.2  The organization shall undertake exit interview for leavers.  
 
6.1.4.3  The organization shall have a process ,procedure and policy for establishing and reviewing an 
approved salary structure  
 DAS 1651: 2018  
30 © ARSO  2018 — All rights reserved  6.2 Staff development  
 
6.2.1  Bronze compliance  
 
6.2.1.1  The organization's staff training activities and programmes shall be in line with the objectives 
and terms of the grant.  
 
6.2.1.2  The organization shall maintain attendance lists for each training session.  
 
6.2.2  Silver compliance  
 
The organization shall carry out training needs assessment for key functions and put in place staff 
development and training plans to ensure the function is operating at the level required.  
 
6.2.3  Gold compliance  
 
The organization shall have a staff development policy which includes at least the following:  
 
a) annual staff performance reviews and deve lopment  requirements;  
 
b) staff development plans in line with the organization’s goals and aspirations;  
 
c) selection of trainers in line with its procurement policy; and  
 
d) frequency and assessment criteria to determine if training is effective.  
 
6.2.4  Platinum  compliance  
 
The organi zation shall compl ywith requirements given in 6.2.1, 6.2.2 and 6.2.3.There are no 
additional requirements  
 
7 Procurement  
 
7.1 Planning  
 
7.1.1  Bronze compliance  
 
The organization shall have a process to check ‘market’ prices for goods  and services purchased.  
 
7.1.2  Silver compliance  
 
7.1.2.1  The organization shall haveprocedures for all procurement activity and document and analyse  
all exceptions. These procedures shall address, as a minimum:  
 
a) who is authorized to approve procurement;  
 
b) the roles and responsibilities of those involved in procurement;  
 
c) authorizations for different values and length of the contract;  
 
d) who can sign a legal contract;  
 
e) how conflicts of interest are mitigated in the procurement process;  
 
f) the value or criteria o f the procurement above which a formal procurement process will be 
undertaken;  
 
g) how the outcomes of the procurement will be documented and reported;  
 DAS 1651: 2018  
© ARSO  2018 — All rights reserved  31 
 h) how the supplier is to be selected;  
 
i) what financial checks on the supplier will be done;  
 
j) supplier compliance with the grantor conditions; and  
 
k) frequency of review.  
 
7.1.2.2  The organization shall have procedures for handling complaints of potential and current 
vendors. The procedure will be made available to potential or current vendors on request.  
 
7.1.2.3  The organization shall have transparent, competitive and fair procedures in selecting its 
vendors, with clear specifications on mode of advertisement, shortlisting, bid analysis, and 
comparison with the list of approved vendors.  
 
7.1.2.4  There shall be a clear description in the documents sent to suppliers of the goods or services 
being procured.  
 
NOTE  The description should promote transparent competition and should reflect all requirements including, but not limited 
to specific features of “brand -name or equal” descriptions, the acceptability of metric measurements and preference for 
ecologically sound an d energy -efficient products.  
 
7.1.2.5  The organization shall have a procedure for segregation of duties in procurement, including 
who can approve contract changes and amendments.  
 
7.1.2.6  The organization shall have a procedure that addresses breaches or v iolation of contracts.  
 
NOTE  Consequences of violation of contract may include blacklisting, cancellation of contract or arbitration . 
 
7.1.2.7  The organization shall have a procedure that states the frequency of how the market is tested 
for goods that are  purchased on a recurring basis.  
 
7.1.3  Gold compliance  
 
7.1.3.1  The organization shall have a procurement policy that demonstrates procurement is value for 
money, delivers the grant’s objective, is transparent, and that decision making is free from conflict of 
interest with key roles having segregation of duty. The policy shall include at least the following:  
 
a) criteria for selecting preferred suppliers;  
 
b) criteria for when supplier frameworks are to be used;  
 
c) the specific modes of procurement the orga nization can use, such as:   
 
i.) previous contract outcome and apply to new procurement situation ; 
 
ii.) a request for proposal ; 
 
iii.)  expression of interest ; 
 
iv.) invitation to tender; and  
 
v.) request for quote.  
 
NOTE 1  Requests for proposals (RFP) are typically used where the organization either can’t – or doesn’t want to – define the 
specifications up front to an adequate level of detail. Often organizations are faced with situations where they know what th ey 
want to achieve, but they don’t have the expertise or time to fi gure out how to get there. They need to rely on the experience 
and creativity of suppliers to define the best path to success. This requires the potential supplier to define the work.  
 
NOTE 2  Invitations to tender are typically used where the organization knows in detail what they want. The invitation to tender 
document contains detailed specifications for the performance of the work as well as detailed qualifications and requirements  
for the suppliers to meet. Examples are construction works and services, e.g. cleaning.  
 DAS 1651: 2018  
32 © ARSO  2018 — All rights reserved  NOTE 3  Requests for quote (RFQ) : is a lot like the Tender, however typically smaller in size and scope. They’re often more 
geared towards organizations who are seeking pricing information for a defined scope of work or supply of materials o r 
equipment. Like the Tender, the specifications, terms and expectations are well laid -out and the supplier has fewer obligations 
for defining the scope themselves.  
 
d) when and how the procurement modes shall be used;  
 
NOTE  This will take into account the value, risk and complexity of the procurement as well as grant conditions.  
 
e) stipulation of roles and responsibilities for each mode of procurement;  
 
NOTE  For sealed bids process roles will include who the bids are addressed to; who opens them, who assesses  them.  
 
f) who shall be involved in the procurement process and what is their role with  consideration of 
conflicts of interest ; 
 
g) in what circumstance, if any, is the supplier with the lowest cost not to be the preferred 
supplier;  
 
h) any additional legal or ethical requirements specific to the region or country where the 
procurement is taking place;  
 
i) when references are to be taken up; and  
 
j) how conflicts of interest will be identified.  
 
7.1.3.2  The organization shall document the criteria used to select the supplier to support the 
decision as best value for money.   
 
7.1.3.3  Where there is a formal procurement process undertaken, the organization shall send to the 
suppliers, as a minimum:  
 
a) the le gal name of the organization;  
 
b) specification of goods and services being procured;  
 
NOTE  This should be in sufficient detail that will enable the organization to hold the supplier to account for delivering the 
goods and services.  
 
c) a requirement that the bidders respond in a specific format to allow easy comparison with 
other bidders;  
 
d) specific format for costs; and  
 
e) any exceptions shall be documented and reported.  
 
7.1.3.4  The organization shall have a committee, composed of competent persons, that, as part of its 
function, has oversight of the procurement activity.   
 
7.1.3.5  The organization shall record all minutes of these committee meetings.  
 
NOTE  The committee may be a procurement committee or another committee of which oversight of procurement is one of 
its responsibilities.  
 
7.1.4  Platinum compliance  
 
The organisation shall comp lywith requirements given in 7.1.1, 7.1.2 and 7.1.3.There are no 
additio nal requirements  
 
7.2 Contract management  
 
7.2.1  Bronze compliance  
 DAS 1651: 2018  
© ARSO  2018 — All rights reserved  33 
 7.2.1.1  The organization shall have secure storage for vendor and supplier contracts.  
 
7.2.1.2  The organization shall require that all cost overruns are only admissible with express approval 
from the organization and that such overruns bewithin the grant budget limits.  
 
7.2.2  Silver compliance  
 
7.2.2.1  The organisation shall have a contract management procedure for review of current 
contractors or in dividuals.  This should include at l east the following : 
 
a) Who is responsible for the review of each type of contract and the frequency with which those 
reviews should take place ; 
 
b) How performance is assessed and the actions to be taken where performance is below 
standard ; and  
 
c) How copies of contracts are stored, kept secure and can be accessed.  
 
7.2.2.2  The organization shall require progress reports from the vendors in accordance with the 
agreed upon milestones in the contract.  
 
7.2.2.3  The organization shall review all contract performance before renewal or any extension is 
granted.  
 
7.2.2.4  The organization shall have a procedure for approval of contract cost overruns.  
 
7.2.2.5  The organization shall keep and maintain records showing the amount still owing to each 
supplier.  
 
7.2.2.6  The org anization shall have a procedure to review suppliers and or contractors performance 
against the approved contract.  
 
7.2.3  Gold compliance  
 
The organization shall have a policy that includes:  
 
a) who maintains and monitors a list of supplier contracts and their expiry dates; and  
 
b) how to undertake the assessment of the risk to the organization of key suppliers and who has 
oversight of that risk.  
 
7.2.4  Platinum compliance  
 
The organisation shall compl ywith requirements given in 7.2.1, 7.2.2 and 7.2.3.There are no 
additional requirements  
 
8 Governance  
 
8.1 General  
 
8.1.1  Bronze compliance  
 
8.1.1.1  The financial and delegated authority of each staff and governing board ( where appropriate) 
member to make or approve decisions shall be clearly communicated to all those involved in the 
financial management of the organization and its grants.  
 
8.1.1.2  The organization’s processes shall be communicated to all staff.  
 
NOTE  Communication of the organization’s proce ssesto staff can be achieved through making them available to staff in a 
document repository or the organization’s intranet with specific training for staff who have responsibility for carrying out the 
procedures.  DAS 1651: 2018  
34 © ARSO  2018 — All rights reserved   
8.1.1.3  The organization shall keep records of all top management or governing board meetings 
which will include at least the following;  
 
a.) attendees (who attended and who was absent);  
 
b.) agenda items and papers;  
 
c.) record of the decisions made at the meeting or actions arising; and  
 
d.) list of previous meetings actions arising and if cleared or no t 
 
8.1.2  Silver compliance  
 
8.1.2.1  The organization shall have an organizational chart which shall show the delegation of 
authority and be communicated to all staff.  
 
NOTE  The organizational chart may be made up of either people or committees who have del egated authority.  
 
8.1.2.2  The organization shall have a code of conduct that is disseminated to all staff, and externally 
as appropriate.   
 
NOTE  The code of conduct should clearly describe how complaints can be made and what action would be taken if staff do 
not comply with the code of conduct.  
 
8.1.2.3  The organization shall keep records of all top management or governing board meetings 
which will in clude at least the following;  
 
a.)  attendance sheet  (who attended and who was absent);  
 
b.)  agenda items and papers ; 
 
c.)  record of the decisions made at the meeting or actions arising; and  
 
d.)  list of previous meetings actions arising and if cleared or not”  
 
 
8.1.2.4  The governing board shall have terms of reference specifying the method of appointment, 
qualifications and roles and responsibilities, which are clearly distinguished from the roles, 
responsibilities and composition of management of the organizatio n.  
 
NOTE  Where the governing board also has some management functions then the terms of reference should clearly state 
what these are and how they are to be managed.  
 
8.1.2.5  The organization shall have a procedure that defines the frequency of meetings o f its 
governing board.  
 
8.1.2.6  The organization shall have a procedure for who will review, and the frequency of, financial 
reports.  
 
NOTE  The financial reports should be reviewed by the top management at least twice a year and any issue identified, 
investig ated and reported back to the governing board.  
 
8.1.3  Gold compliance  
 
8.1.3.1  The organization shall have a documented vision, mission and set of goals that are articulated 
and communicated to staff members and key stakeholders.  
 
8.1.3.2  The organization shall have a written constitution and defined governance and executive 
functions including an organizational structure.  
 DAS 1651: 2018  
© ARSO  2018 — All rights reserved  35 
 8.1.3.3  The or ganiz ation shall have a policy for record ing, retaining  and dispos ing for allfinancial 
documents and data.  This should include at least:  
 
a) How long documents and data  are retained  
 
b) How and where documents and data (whether in document or electronic form) are retained . 
 
c) How documents and data are securely disposed . 
 
8.1.3.4  The organization shall have a board or committee which is responsible for oversight of risk 
and which reviews the risk register and directly receives reports from the internal audit function.  
 
8.1.4  Platinum compliance  
 
8.1.4.1  The organization shall  comply with the requirements given in 8.1.1, 8.1.2 and 8.1.3.  
 
8.1.4.2  The organization shall have a set of values, approved by the governing board that 
communicates how staffs are  to conduct themselves.  
 
8.1.4.3  The organization shall have a business continuity plan and strategic plan that has been 
reviewed and approved by the governing board.  
 
8.2 Grant management and compliance  
 
8.2.1  Bronze compliance  
 
8.2.1.1  The organization shall determine that it will be able to comply with the grantor’s requirements 
before signing any contract or written agreement with the grantor or third parties.  
 
NOTE  The organization should review a grantors grant conditions prior to making the applicat ion and before signing any 
written contract or agreement with the grantor.  
 
8.2.1.2  The organization shall demonstrate compliance with each grantor’s requirements.  
 
8.2.1.3  The organization shall review financial reports to grantors to monitor whether the y are 
supported by the documentation to meet each grantor’s requirements during the lifetime of the grant 
including closure.   
 
8.2.1.4  The organization shall store any document required to demonstrate compliance and which 
may be needed for inspection or a udit for the period of time required by its grantors.  
 
8.2.2  Silver compliance  
 
8.2.2.1  The organization shall have a grant application procedure that includes at least  the following;  
 
a) who can review and approve  each application ;  
b) how to ensure grant application s are consistent with the organization’s purpose ; 
 
c) how organization sshall  comply with the grantors requirements; and  
 
d) how to identify any risks which could affect the organization’s ability to deliver the 
plans and budget within the application  and how they can be managed . 
 
8.2.2.2  The organization shall ensure all grant contracts or written agreements are reviewed by a 
competent person to document  any conditions which are in addition to the organization’s written 
procedures so that these are communicated to all those involved in delivering and managing each 
grant.  
 
8.2.2.3  The organization shall have procedures for closing grants that include, as a minimum how:  
 DAS 1651: 2018  
36 © ARSO  2018 — All rights reserved  a) the organization provide evidence that the grant conditions have been met;  
 
b) all claims have been made and the project or grant code is closed  to new expenditure; and  
 
c) the treatment of any remaining expenditure in the project or grant code.   
 
8.2.3  Gold compliance  
 
The organization shall have policies, which set out the procedures and controls that govern:  
 
a) the grant application process;  
 
b) negotiation and signing contracts or written agreements with grantors;  
 
c) ensuring ongoing compliance with grantors’ requirements;  
 
d) the closeout of all grants to ensure compliance with each grantor’s closure requirements and 
that the organization’s own systems and records reflect the grant closure and any 
requirements to store records for inspection or audit after grant closure;  
 
e) if funding opportunities should be sought, and if so, using what criteria ;  and  
 
f) who is authorized to apply for grants.  
 
8.2.4  Platinum compliance  
 
8.2.4.1  The organization shall comply with the requirements given in 8.2.1, 8.2.2 and 8.2.3.  
 
8.2.4.2  The organization shall have internal assurance processes that, at least annua lly, confirm that 
it is complying with all grantors’ requirements and the organization’s own policies governing grant 
management and compliance.  
 
8.2.4.3  The organization shall include within its internal audit programme a review of whether the 
organization’s con trols are adequate to gain assurance that it is complying with grantors’ grant 
conditions.  
 
8.3 Audit  
 
8.3.1  Bronze compliance  
 
8.3.1.1  The organization shall make any supporting documents covering financial and programme 
aspects of their  grants available for audit.  
 
8.3.1.2  All the information reported in the organization’s financial reports shall be supported by 
accounting records.  
 
8.3.1.3  The organization shall have measures in place to prevent and mitigate conflict of interest 
which c ould affect employees or governing board members participation in decision -making.  
 
8.3.1.4  The organization shall appoint an independent qualified professional  to undertake grant audits 
as required by the grant conditions.  
 
8.3.2  Silver compliance  
 
The or ganization shall have procedures that stipulate review of all financial report and supporting 
documents by top management  to the person who prepared the report.  
 
8.3.3  Gold compliance  
 
8.3.3.1  Where the organization uses third -party internal auditors, there  shall be a legal contract.  DAS 1651: 2018  
© ARSO  2018 — All rights reserved  37 
  
NOTE 1  This contract should include how the organization can share the audit reports with grantors and other key 
stakeholders.  
 
NOTE 2  This procedure should be a collective record of all outstanding audit issues and their due dates with monthly follow 
up with issue owners and a report to the board or committee responsible for ensuring issues are completed.  
 
8.3.3.2  Where the organization uses  third-party internal auditors, there shall be terms of reference 
which state, as a minimum, the:  
 
a) maximum length of appointment without review;  
 
b) frequency of the process for assessing the auditors performance; and  
 
c) maximum length of time before the formal  procurement exercise to test the market.  
 
NOTE 1  A review of the auditors should be annually and at least no more than two years.  
 
NOTE 2  A formal procurement exercise should be held at least every five years.  
 
8.3.3.3  The organization shall have an internal audit function.  
 
8.3.3.4  The organization shall, when appointing internal auditor, check that they are competent, 
taking into account the complexity of the organization. The audit committee or equivalent shall be 
responsible for appointment and removal of third party internal audi tors and /or the head of internal 
audit . 
 
NOTE  This should be demonstrated by the inclusion of qualification and experience required withinjob descriptions for staff 
and procurement documents for third parties.  
 
8.3.3.5  The organization’s annual internal a udit plan shall include review, on a risk basis, of the 
following key financial controls;  
 
a) bank and other balance sheet reconciliations;  
 
b) payment of expenditure and receipt of funds;  
 
c) compliance with grantor’s grant conditions;  
 
d) petty cash and staff expenses;  
 
e) annual leave accruals;  
 
f) finance management systems;  
 
g) finance reports to key stakeholders and internal boards and committees charged with financial 
oversight;  
 
h) inventory and other consumables; and  
 
i) assets.  
 
8.3.3.6  If the Internal Auditor becomes aware of illegal acts or other irregularities, he or she shall give 
prompt notice to the involved person’s supervisor, a member of top management  or a member of the 
audit committee . 
 
8.3.3.7  The internal audit activity's pla ns and resource requirements, including significant interim 
changes, shall be presented to top management  and the governing board and/or audit committee for 
review and approval.  
 
8.3.3.8  The organization shall supplement the internal audit function with external expertise as and 
when required to ensure that the audit or review is carried out by competent resource.  
 DAS 1651: 2018  
38 © ARSO  2018 — All rights reserved  8.3.3.9  Where the organization gives sub -grants, the organization shall req uire sub -grantees to 
comply with both the ultimate grantor’s audit requirements and be subject to the organization’s own 
audit programme.  
 
8.3.3.10  The organization shall have a procedure in place that ensures that all internal audit 
findings and recommend ations are addressed.  
 
NOTE  This procedure should be a collective record of all outstanding audit issues and their due dates with monthly follow 
up with issue owners and a report to the board or committee responsible for ensuring issues are completed.  
 
8.3.3.11  The organization shall have an audit committee to assist the governing board in 
fulfilling its oversight responsibilities for the financial reporting process (where relevant), the system of 
internal control, the audit process and the organization ’s process for monitoring compliance with laws 
and regulations and the code of conduct.  
 
NOTE  The audit committee’s functions should include review and commentary on the annual  programme  of the internal 
audit functions. This review should include updates, review of management responses to, and implementation of the 
recommendations by the internal audit function. In addition, this review should provide an opinion to the grantor, regarding the 
financial stability of the organization.  
 
8.3.3.12  The organization shall have a document that defines internal audit's purpose, 
authority, responsibility and position within the organization. It shall include the reporting lines to 
demonstrate how it  will maintain a degree of semi -autonomous independence.  
 
NOTE 1  The document shall include how the organization will approach its internal audit programme on a risk basis.  
 
NOTE 2  The person who leads the internal audit function should periodically revi ew the document and present it to top 
management  and the governing board for approval.  
 
8.3.4  Platinum compliance  
 
8.3.4.1  The organization shall comply with the req uirements given in 8.3.1, 8. 3.2 and 8.3 .3. 
 
8.3.4.2  In addition, t he organization shall establish an organization -wide internal audit plan to 
determine the priorities of the internal audit activity, consistent with the organization’s goals.  
 
8.4 Risk management  
 
8.4.1  Bronze compliance  
 
The organization shall have processes for preventing, detecting, reporting and taking remedial 
measures to prevent fraud, bribery and corruption.  
 
NOTE  The organization should familiarize itself with any relevant health and safety regulations, labour  and environmental 
laws.  
 
8.4.2  Silver compliance  
 
8.4.2.1  The organization shall have a risk register which includes at least the following:  
 
a) key risks;  
 
b) current risk rating based on likelihood;  
 
c) the desired risk rating;  
 
d) what controls are already in place;  
 
e) what additional controls are being implemented to bring  the risk from the current risk to the 
desired risk; and  
 
f) frequency of update and reporting to management and/or  governing board.  
 DAS 1651: 2018  
© ARSO  2018 — All rights reserved  39 
 NOTE  Risk registers should be reviewed at least twice a year by the governing board who have oversight of risk for the 
organization.  
 
8.4.2.2  The organization’s risk register shall be maintained by competent persons approved by 
management.  
 
8.4.2.3  The organization shall undertake an investigation after any instances of loss, damage, or theft 
and report the outcome to those delegated with oversight and grantors when applicable.  
 
8.4.2.4  The organization shall have IT security and risk management procedur es that include 
maintenance of anti -virus software and firewalls to protect computer systems and information from 
unauthorized access and destruction.  
 
8.4.2.5  The organization shall have a code of ethics which shall be disseminated to all staff , relevant 
contractors and third parties  
 
8.4.2.6  The organization shall have and communicate widely a whistle -blowing and complaints 
procedure that contains , at least , guidelines f or: 
 
a) responding to and investigating any suspicions of wrongdoing;  
 
b) protecting those who reported their suspicions without fear of punishment or unfair treatment; 
and 
 
c) protecting the rights of the accused.  
 
NOTE  The organization should identify an independent third party to whom staff can report activities requiring whistle -
blowing.  
 
8.4.2 .7 The organization shall have anti -fraud, anti -bribery, anti -corruption and conflicts of interest 
procedures.  
 
8.4.3  Gold compliance  
 
8.4.3.1  The organization shall have a risk policy that includes at least the following:  
 
a) the risk appetite of the organization across all its functions;  
 
NOTE  The risk appetite should be in tiers such as 'risk adverse', ‘receptive’ (takes risks within limits) and ‘bold’ (takes risks 
where appropriate for expected benefit).  
 
b) approach to risk that is proportionate and a ligned;  
 
c) governance and reporting organogram;  
 
d) how risk will be measured and monitored through the risk register (i.e., frequency and impact);  
 
e) the maximum period of time before the policy is reviewed; and  
 
f) frequency and method for  carrying out risk assessments of all key operational activities.  
 
8.4.3.2  The organization shall have a disaster response plan. This will include at least the following:  
 
a) an impact analysis to identify time -sensitive or critical activities, services, functions and 
processes  and the resources that support them;  
 
b) identities or names of the disaster recovery team with responsibility for implementing the plan; 
and  
 
c) how to identify, document, and implement the activities identified in a).  
 DAS 1651: 2018  
40 © ARSO  2018 — All rights reserved  8.4.3.3  The organization shall carry ou t a simulated exerciseof possible disasters to determine the 
effectiveness of the disaster response plan.  
 
NOTE  A simulation exercise should be carried out on an annual basis . 
 
8.4.3.4  The organization shall report the outcome of this exercise to the top management  and/or 
governing board.  
 
8.4.3.5  The organization shall have an anti -fraud, anti -bribery and anti -corruption, policy which 
includes at least the following : 
 
a) policy statement;  
 
b) to whom the policy applies;  
 
c) definition of fraud, bribery and corruption;  
 
d) risk assessment;  
 
e) consideration of gifts and hospitality;  
 
f) training and communication; and  
 
g) monitoring and assessment . 
 
8.4.3.6  The organization shall examine its operations and controls to identify corruption, bribery or 
fraud vulnerabilities and implement specific prevention strategies, including educating staff about the 
risks.  
 
8.4.3.7  The organization shall have procedures to implement and maintain risk assessments of all 
key operational activities in line with the risk policy. The outcome of these shall be reported to the 
governing board for the oversight of the policy.  
 
8.4.3.8  The organization shall carry out prior vetting and background checks for all persons appointed 
to the governing board and top management  so that their expertise and qualifications meet the job 
requirements.  
 
8.4.3.9  The organization shall put in place a risk management function which advises and ensures 
effective coordination between the governing board, top management  and operational staff to ensure 
they understand an d carry out their roles and responsibilities in risk management.  
 
8.4.3.10  The organization shall have a mechanism to profile and classify sub -grantee’s risk 
levels as high, moderate or low risk.  
 
8.4.4  Platinum compliance  
 
8.4.4.1  The organization shall comply with the requirements given in 8. 4.1, 8. 4.2 and 8. 4.3. 
 
8.4.4.2  The organisation shall have a succession plan for its key functions . . This shall include at 
least the following ;  
 
a) short term or immediate replacement of staff or resource critical to the organization's ability to 
deliver to the grant conditions; and  
 
b) training and development of staff with potential to fill leadership and other critical roles.  
 
8.4.4. 2 The organization shall have a plan to ensure its long term sustainability. This shall  be 
reviewed annually and include at least the following ; : 
 
a) medium to long term and sustainable funding strategy, including reserves; and  
 DAS 1651: 2018  
© ARSO  2018 — All rights reserved  41 
 b) investment in systems and assets to ensure availability for the medium to long term.  
   DAS 1651: 2018  
42 © ARSO  2018 — All rights reserved  Annex A  
(informative)  
 
The seven principles of good financial grant practice and four key pillars of 
good financial management  
 
 
A.1 The seven principles of good financial grant practice  
 
A.1.1  Accountability  
 
All stakeholders, including grantees, have the right to know how financial and other support has been 
used to meet objectives. Grantees have an operational, moral and legal duty to explain their decisions 
and actions, and make their financial reports open to scrutiny.  
 
A.1.2  Stewardship  
 
Financial stewardship involves organization and/ or grant leadershipthat safeguards assets and 
investments. The  top management  and governing board ensure s there are adequate governance 
structures, procedures and controls in place to demonstrate that the grant funding is being put to the  
use as per the grantor conditions . 
 
A.1.3  Compliance to standards  
 
The recording and reporting of financial transactions and documentation should  observe accepted 
accounting principles .A qualified accountant from anywhere around the world should be able to 
understand an organization’s financial accounting records . 
 
A.1.4  Transparency  
 
The organization and grantees should be open about their work, providing information about activities 
and plans to their key stakeholders. This includes preparing accurate, complete and timely financial 
reports. . 
 
A.1.5  Viability  
 
To be financially viable, a grantee’s spending must be kept in balance with money coming in, both at 
the operational and the strategic levels. Viability is a measure of the grantee’s financial conti nuity and 
security. The governing board and management should prepare a financing strategy to show how the 
organization  should  meet all of its financial obligations and deliver its strategic plan.  
 
A.1.6  Integrity  
 
On a personal level, individuals must ope rate with honesty and propriety. For example, managers and 
Board members must lead by example in following organizational policy, or declare personal interests 
that might conflict with their official duties. The integrity of financial records and reports i s dependent 
on accuracy and completeness of financial records.  
 
A.1.7  Consistency  
 
Consistent use of financial policies and procedures are important for efficient and effective operations. 
For example, a clear procurement procedure  should  help staff to follow the correct process and 
ensure compliance with grantor rules. Consistent use of accounting codes in financial records and 
budgets produces financial reports that are consistent and transparent to key stakeholder.  
 
A.2 The four key pil lars of good financial management  
 DAS 1651: 2018  
© ARSO  2018 — All rights reserved  43 
 To provide further guidance to grantors and grantees as to which tier they may wish to be compliant, 
the Table A.1  describes the requirements and activities within internal controls, record keeping, 
planning and monitorin g which would be occurring at bronze, silver, gold and platinum levels of 
compliance.  
 
A.2.1  Internal controls  
 
Internal control is a system of common sense controls, checks and balances designed to manage 
internal risk and safeguard the organization’s money, equipment and other financial assets. The 
purpose of internal controls is to minimize losses, such as throug h theft, fraud, corruption, bribery or 
incompetence. An effective internal control system also protects staff, an organization’s most 
important asset.  
 
A.2.2  Record keeping  
 
Every organization must keep an accurate and complete record of all financial tra nsactions that take 
place during the financial year so they can show how grants have been used. Accounting records 
include both the physical paperwork (such as receipts and invoices) and the ‘books’ of account where 
the transactions are recorded and summar ised.  
 
A.2.3  Planning  
 
Linked to the organization’s strategic and operational plans, budgets are the cornerstone of any 
financial management and play an important role in monitoring the use of grants. The financial 
planning process includes building longer -term plans, such as a financing strategy, and shorter -term 
budgets for projects, grants and programmes, and cash flow forecasts.  
 
A.2.4  Monitoring  
 
Provided the organization has kept accurate and timely accounting records, and has set its budgets, it 
is possible to produce financial reports for use by different stakeholders.  For example, budget -
monitoring reports help managers to monitor the progress of their projects or grants, and annual 
financial reports provide accountability to external stakeholders . 
 
Table A.1 – The GFGP tiers and four pillars of good financial grant practice  
 
Tier Pillars  Requirements and activities  
 
 
 
 
 
 
Bronze  Internal controls   
Basic internal controls only such as safe and secure storage of 
cash and financial records. Documented pro cess where 
required. It should be possible for an independent person to 
verify all transactions to the underlying records and original 
supporting documents  
Record keeping  Requirements are at least a cash -book, either manual or 
electronic, supported by the associated documents and 
receipts.  
Planning  There is a budget that lists the expenditure expected to be 
funded from the grant.  
Monitoring  Transaction level reports which list cash received and cash 
expenditure for each grant.  
 
 
 
 
Silver  Internal controls  Procedures for all key processes including a segregation of 
duties with another person other than the preparer to make 
payments or review financial reports. Bank reconciliations are 
undertaken to agree the bank account and the accounting 
records.  
Record keeping  Requirements including using unique references for 
transactions and organizing the supporting paperwork and 
organization records within a  filing system. The financial 
management system may be a spreadsheet but with cont rols DAS 1651: 2018  
44 © ARSO  2018 — All rights reserved  to prevent double payments of an invoice.  
Planning  Preparation of budgets includes  documenting foreign 
exchange direct and indirect cost, direct and indirect cost , other 
budget assumptions such as inflation and estimates for more 
complex expenditure.  
Monitoring  Reporting requirements include narrative to explain variances 
to budgets but reporting is in line only with grantor 
requirements.  
 
 
 
 
 
 
 
 
 
Gold  Internal controls  Policies for all key financial procedures such as procurement, 
property, plant and equipment, cash, bank and treasury; and 
sub-grantee management.  The organization should have its 
own internal audit function to test controls. It should carry out 
balance sheet reconc iliations.  
Record keeping  Should have a financial management system which supports 
segregation of duties and enables an audit trail for 
transactions from the start of the financial process to the 
payment of supplier and reporting with ability to trace th e 
transaction back to supporting documentation .  
Planning  Undertak elong-term planning and other proactive activities 
such as risk management, preparation of cash -flows  and 
regular re -forecasting.  Undertaking more complex analysis 
such as classifying expenditure into direct and indirect. 
Disaster recovery plans should  be in place.  
Monitoring  Financial reports include expenditure which has not yet been 
paid either by adopting an accruals basis for accounting or 
through including known commitments to future spending. 
Reporting is at the organizational level and reports are 
presented to management on a regular basis. Monitoring 
includes review of the financial performance of sub -grantees 
as well as their compliance with grant conditions.   There  
should  be a governing board which is independent of the day 
to day operations and  which has oversight of the organization.  
 
 
 
 
 
Platinum  Internal controls  The governance of the organization  should  be ensuring 
compliance with internal controls through an audit committee 
which oversees internal audit.  
Record keeping  The organization should have a plan to continuously improve 
and review its financial management systems.  
Planning  The governance of the organization  should  oversee plans for 
its long -term financial sustainability and ensure effective risk 
management, including policies covering business continuity.  
Monitoring  The governance of the organization  should  oversee assurance 
mechanisms which cover all aspects of the organization 
including grant management and sub -grant management.  
   DAS 1651: 2018  
© ARSO  2018 — All rights reserved  45 
 Acknowledgement  
 
Development of this African standard  was hosted by the African Academy of Sciences, Nairobi, 
Kenya.Acknowledgement is given to the following organizations that were involved in the 
development of this African standard  as members of the technical steering committee:  
 
African Organisation for Standardisation  
 
African Academy of Sciences  
 
Bill & Melinda Gates Foundation  
 
Botswana Harvard AIDS Institute  
 
Centre de RecherchesMedicales de Lambarene (CERMEL)  
 
Chartered Institute of Management Accountants (CIMA)  
 
Department for International Developm ent (UK)  
 
European & Developing Countries Clinical Trials Partnership  
 
InsideNGO  
 
International Rescue Committee  
 
Kenya Accreditation Service (KENAS)  
 
Mango  
 
Medical Research Council (UK)  
 
Medical Research Council (Uganda)  
 
Medical Research Council (South  Africa)  
 
Moi University – School of Medicine, Kenya  
 
Nigerian Institute of Medical Research  
 
Price Waterhouse Coopers (Kenya)  
 
Swedish Development Cooperation Agency, Sida  
 
Wellcome  
 
Wellcome Trust Sanger Institute  
 
 
  DAS 1651: 2018  
46 © ARSO  2018 — All rights reserved  Bibliography  
 
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[3] UN-ODC (2004), United Nations  Convention Against Corruption. New York, NY , USA: United 
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[4] ISO 37001, Anti -bribery management systems  
 
[5] ISO 31000, Risk management — Principles and guidelines  
 
[6] ISO 9000, Quality management systems — Fundamentals and vocabulary  
 
[7] ISO 21500 , Guidance on project management  
 
 DAS 1651:  2018 
© ARSO  2018 — All rights reserved