The Financial Management and Accounting Policy Manual provides a comprehensive framework for the financial governance of SOMES. It aligns with our mission to promote evidence-based decision-making and accountability for sustainable development in Somalia.
By ensuring prudent use of resources, SOMES enhances its ability to deliver on its strategic objectives, attract funding and maintain operational sustainability. Transparent financial practices also reinforce our commitment to good governance and ethical leadership.
Oversight at a glance
- Executive BoardUltimate responsibility for financial oversight and strategic financial decision-making.
- TreasurerAccountable for day-to-day financial operations: budgeting, reporting and compliance.
- Audit & Compliance CommitteeIndependent members monitoring internal controls, risk mitigation and audit follow-up.
- Advisory BoardHigh-level financial guidance and alignment with national and international standards.
- General AssemblyReceives annual financial reports and appoints the independent external auditor.
Policy areas
Financial planning and budgeting
SOMES operates on an annual budgeting cycle aligned with its five-year strategic plan. Budget development involves participatory consultation with programme leads, finance staff and the Executive Board, and donor-specific formats and timelines are strictly followed.
Variance analysis is conducted monthly comparing actual against budgeted expenditure, with corrective action where deviations exceed 10 per cent. Budget revisions require Executive Board approval and donor notification where applicable.
Accounting policies
SOMES uses accrual-based accounting in compliance with generally accepted accounting principles. Income is recognized based on donor agreements and service delivery milestones.
Restricted funds are tracked separately and used strictly for their intended purposes; unrestricted funds such as membership dues are allocated to core operations. Fixed assets are depreciated on a straight-line basis over their useful life, and fund balances are reconciled monthly.
Treasury and digital finance
Cash and bank accounts are managed under strict internal controls. Mobile money transactions are recorded daily and reconciled weekly, with disbursements to field staff supported by approved vouchers and recipient confirmations.
Foreign exchange risk is mitigated by holding operational reserves in both US dollars and local currency. Monthly cash flow forecasts are prepared by the Treasurer, and emergency reserves equivalent to three months of core expenses are maintained.
All electronic transactions require two-factor authentication and are logged with full audit trails; monthly reconciliations run between bank statements and the general ledger.
Disbursement and procurement
All disbursements require dual authorization under the Signatory Matrix. Procurement follows a tiered threshold system:
| Value | Requirement |
|---|---|
| Under $500 | One quotation |
| $500 – $5,000 | Three quotations |
| Above $5,000 | Open competitive bidding |
Decisions are documented on standardized forms including bid evaluation reports and supplier due diligence. Contracts are signed only after verifying budget availability, and all procurement records are retained for a minimum of seven years.
Financial reporting and audit
Monthly, quarterly and annual closings are conducted with reconciliations and analytical review. Donor-specific reports follow contractual formats and timelines, and all financial data derives from the accounting system with supporting documentation.
External audits are conducted annually by an independent auditor appointed by the General Assembly. Statutory compliance with Somali law and donor regulations is assured through regular legal review.
Compliance and risk management
Internal controls are enforced to prevent fraud, misuse of funds and non-compliance. A risk register is maintained and updated quarterly.
Fraud prevention measures include segregation of duties, surprise cash counts and mandatory leave for finance staff. A whistleblowing policy allows anonymous reporting of suspected misconduct, and the Audit and Compliance Committee reviews mitigation actions and reports to the Executive Board.
How SOMES funds its work
A cost recovery framework ensures long-term sustainability rather than dependence on any single source.
Membership dues
Unrestricted funds generated through annual dues, reviewed and approved by the Executive Board.
Donor overheads
Negotiated during proposal development and tracked separately from programme costs.
Service fees
Training, certification and consultancy priced to cover both direct and indirect costs.
Reserve fund
Maintained to support innovation and institutional growth, with three months of core expenses held in reserve.
Standard financial templates
Annex 2 — Asset register template
Asset ID, description, location, custodian, purchase date, value and depreciation.
Annex 5 — Cost recovery guide
Methodology for calculating overheads, pricing services and allocating unrestricted funds.
The manual is reviewed annually by the Executive Committee in consultation with programme teams, donors and the Advisory Board. Revisions are documented with rationale and version history, approved by the Executive Board, and circulated with training on major changes.