AccProced Manual 30.09.04

The Government of Romania
MEI
Ministry of European Integration
SECTION IV
ACCOUNTING
PROCEDURES
FUNCTIONS & PROCEDURES for the
Management of the Community assistance
under EDIS (PHARE)
Contents
MEI
ACCOUNTING PROCEDURES
FUNCTIONS & PROCEDURES
for the Management of the Community assistance under EDIS (PHARE)
Contents
1. INTRODUCTION
2. ACCOUNTING REQUIREMENTS
3. PRINCIPLES OF ACCOUNTING
3.1. Accounting Documents
4. MANAGEMENT OF THE ACCOUNTING PROCESS
4.1. Accounting of the Programme Payments Directorate
4.2. Role of the Accounting Supervisor
4.2.2. Applicability
4.3. Role of the Accounting Officer
5. WORK AND POSTING SEQUENCE
12
5.1 Correction of Errors
13
6. ACCOUNTING ENTRIES
14
7. ACCOUNTING FOR IRREGULARITIES
20
7.1. Entry of Irregularities into the Accounting System
20
8. RECONCILIATION OF ACCOUNTS
21
8.1. Monthly Reconciliation of Financial and Accounting Data
21
8.2. Semi-annual Reconciliation of Financial and Accounting Data
22
8.3. Annual Reconciliation of Financial and Accounting Data
23
9. DEBTORS LEDGER
24
10. REPORTS
25
11. IDENTIFICATION OF ACCOUNTING RECORDS - DATA ARCHIVING
26
11.1. Archiving
26
11.2. Procedures for the Retention and Archiving of Documents
26
11.3. Identification of Accounting Records
27
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Contents

12. ANNEXES
28
MEI
INTRODUCTION
CHAPTER 1
Page : 1
1. Introduction
This Manual Section sets out the specific accounting procedures and entries to be used by the
Programme Payments Directorate of the MEI for accounting for PHARE projects.
The Programme Payments Directorate, on behalf of the Ministry of European Integration, will
prepare and send a Request for Funds to the National Fund. This Request will cover project
advance payments, interim payments and final payments. The process of preparing and submitting
the Request for Funds is covered in Section III (Financial Management Procedures) of this Manual.
MEI
ACCOUNTING REQUIREMENTS
CHAPTER 2

Page : 2
2. Accounting Requirements
The basic accounting requirements are:
Accounting for Phare programs must be separate from other accounting processes
Accounting must provide the level of control specified by the European Commission and
Romanian legislation
Accounting operations must provide full transparency with regard to all accounting
transactions
The accounting operations must provide all necessary information
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PRINCIPLES OF ACCOUNTING
CHAPTER 3
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3. Principles of Accounting
The principles and procedures with regard to accounting will be regulated by the current
agreements with the NF, relevant EC regulations and will be in accordance with:
Accounting Law no.82/1991, as modified and completed by Government Ordinance

no.61/2001 regarding the modification and completion of the Accounting Law no.82/1991
Order no.875 (as modified by the Order no.2332/2001) of the Ministry of Finance approving
rules for registration in the accounting records of the receipt and use of the funds from the
European Union and the national co financing funds
The Accounting Plan for public institutions approved by Order of the Ministry of Finance
no.324/1984 together with further modifications and completions
Law no.500 /2002 regarding public finances as modified by the Law 314/2003
Order no.1792/2002 of the Ministry of Finance approving methodological norms in respect

of budgetary forecasts, verification and approval, granting of payments and the payment of
budgetary expenditure, also specifying the organisation, recording and reference of the
budgetary forecast
Accounting will be conducted with full double-entry bookkeeping and will provide the following:
A complete, verifiable and accurate record of all accounting transactions
A true and fair view of the financial operations regarding the receipt and the use of funds
received from the financial contributions of the European Union
Maintain accounting in ROL and/or EUR as required. The exchange rate to be used for
conversion will be the Info-Euro rate of exchange valid during the month in which the
transaction occurs. The Info-Euro rate of exchange is in accordance with Art.91 of the
European Commission Settlement no.610/1986 which establishes the application of the
requirements of Financial Regulation of December 22, 1977. This rate is published every
month, after the 10th of the month, in the supplement of the Official Gazette of the European
Community.
Enable the settlement of invoices in EUR or ROL
Provide full accounting for commitments
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PRINCIPLES OF ACCOUNTING
CHAPTER 3
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3.1. Accounting Documents

Accounting documents must:
Be drawn up based on source documents (invoices, bank statements, receipts, etc)
Specify the accounting document
Have control numbers
Detail the contents of the accounting transaction
Specify sums in Romania ROL and/or EURO
Be dated
Specify the bank account to be used for the transaction
Be originals
All documents that support the accounting transaction will form an integral part of the accounting
documentation. These documents will be registered, filed and maintained in a manner that
maintains the connection between the particular documents.
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CHAPTER 4
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4. Management of the Accounting Process

4.1. Accounting of the Programme Payments Directorate
Accounting in the PPD will be conducted through the accounting software consisting of the
following modules:
A module for accounting in Romanian ROL
A module for accounting in EURO
A module for processing of conversion from EURO to Romanian ROL and from Romanian
ROL to EURO
Accounting transactions will be entered in one computer. The Accounting Supervisor and one
Accounting Officer will have access to this computer. Protection of this computer against
unauthorised entry will be via passwords as follows:
Password for the Accounting Supervisor giving access to all levels of the accounting
system
Password for the Accounting Officer giving access to data inputs and reporting functions
Password for launching the accounting application
Five other computers will be networked to this computer via the local network. It will be possible to
access data (but not input or change data) via these computers. These computers will be for the
use of:
The second Accounting Officer
The Accounting Supervisor
The Preventive Financial Controller (in the Preventative Internal Control Department)
The Director of the PPD
All data will be backed up as follows:
Daily on the server
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MANAGEMENT OF THE
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CHAPTER 4
Weekly on compact disc (kept in a suitable safe within the PPD)
Monthly on the compact disc (kept in a suitable safe within the IT Dept of the MEI)
Annually the entire accounting will be backed up by the IT Dept of the MEI
Page : 6
4.2. Role of the Accounting Supervisor

4.2.1. Aim and Objectives of Accounting Supervision
This section sets out procedures for the method of checking all accounting entries and transactions
pertaining to the implementation of PHARE programs.
The aim of supervising accounting data is:
Ensuring that registration, processing and storage of all accounting information is correct
and complete
Ensure the accuracy of accounting data and to decrease the risk of errors
To comply with the principles set out in Accounting Law no.82/1991, as modified and
completed by the Government Ordinance no.61/2001
4.2.2. Applicability
The procedures apply for entire period during which PHARE programmes will be running and are
in accordance with the internal organization of MEI, as an Implementing Agency for Regional
Development.
4.2.3. Responsibility
The Accounting Supervisor is the person assigned to supervise all accounting transactions related
to PHARE programmes and the related national co funding.
The Accounting Supervisor (AS) controls the activity of, and the documents prepared by the
Accounting Officer (AO).
4.2.4. Accounting Documents to be supervised
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The Accounting Supervisor will review and sign the documents on a daily, monthly, quarterly and
annually basis issued by the Accounting Officer.
These documents will be:
Accounting notes (to verify the accuracy of the daily accounting records to be
posted)
Analytical trial balance for each programme
Synthetic trial balance for each programme
Consolidated balance for all programmes
Account record sheet separately for each programme
General Ledger showing all accounting transactions
Journal Register
Annexes to the balance sheet
The annually balance sheet
4.2.5. Documents to be prepared by the Accounting Supervisor

The Accounting Supervisor will produce:
1. Details of the documents verified
2. Monthly (by the 20th of the following month):
Bank Reconciliation Form
Reconciliation of total euro cash flow for each programme Form
Reconciliation with the National Fund accounts Form
Reconciliation with PERSEUS Form

(by 25th July and 25th January respectively):
3. Semi-annually
Balance confirmation with the consultant /contractor (applicable for Technical

Assistance / Infrastructure projects)
4. Annually (by 25th January of the next year):
Annual Bank Reconciliation for each programme
5. The Completed Checklist for each programme

A dossier containing all relevant documents will be submitted by the Accounting Supervisor to the
Director of the PPD.
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4.2.6. Content of Supervision Operations

The Accounting Officer will submit the documents to the Accounting Supervisor, in accordance with
the specified timetable, accompanied by the checklists prepared for each programme.
The Accounting Supervisor will verify the documents, draw up the reconciliation forms for each
programme, ask for further corrections or information for explanation of the differences, sign the
reconciliation forms and will prepare a Supervisors Checklist for each programme (see Annex 1)
4.2.7. Supervision Procedures

The supervision operations of accounting data consist of:
Cross verification of Accounting Transactions
Checking that the total amount of operations in the General Ledger of the current month is equal to
the total current turnover amount in the consolidated balance
Verification of the Content of Accounting Documents:
Identification of document (number, date)
Transaction description (receipt, payment, recovery)
Details of parties involved (beneficiaries, state budget, National Pre Accession Fund)
Amount in EURO/ ROL
Corresponding account in which records to be made
Reconciliation of Information contained in the Accounting System

The Accounting Supervisor will:
Reconcile data in the Perseus system with the information registered in the accounting
system, the bank statements with the bank account balances shown in the accounting
system, the NF General Ledger with General Ledger of the PPD
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Reconcile the Balance Confirmation from Consultants/Contractors with the accounting

records of the PPD
Reconcile the bank account statements for each PHARE programme with the bank
account balances
The procedures for the reconciliations are described in the chapter no.8 of this manual.
For the closure of the month, the Accounting Supervisor will authorise the posting of the
transaction in the accounting software.
At the beginning of every month, the Accounting Supervisor will change the password for access to
the accounting system.
The Accounting Supervisor will have the responsibility for the organisation, supervision and control
of the Debtors Ledger.
The Accounting Supervisor will submit all relevant documents to the Director, who will approve and
sign.
The Director reviews the documents and signs the Accounting Supervisors Checklist.
SAO approves the report and signs the reconciliation forms prepared by the Accounting
Supervisor.
Then the dossiers will be archived on paper and on magnetic recording medium.
4.3. Role of the Accounting Officer

4.3.1. Aim and Objectives of Accounting
This section sets out procedures for the method of registration in accounting software the
transactions pertaining to the receipt and disbursement of PHARE funds.
The aim of accounting is:
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MANAGEMENT OF THE
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Ensure that all transactions relating to the receipt and disbursement of funds under the
PHARE programmes and national co-financing are properly entered in the accounting
software
To comply with the principles set out in Accounting Law no.82/1991, as modified and
completed by the Government Ordinance no.61/2001 and other legislation in force
To prepare financial reports of the actual commitments and disbursements made to each
PHARE programme
4.3.2. Responsibilities of the Accounting Officer
Ensure that all transactions are properly entered in the accounting software and that the
system is kept up to date on a daily basis
Compile financial statements and reports and ensure that they are complete, accurate and
are supported by the accounting records
Verify that disbursements made to beneficiaries are allocated to the appropriate budget
headings and compare expenditure against the budget headings, investigate and resolve
all discrepancies
Adjust the beneficiaries accounts on the receipt of properly authorised addenda
Provide the Accounting Supervisor the documents needed to be used for drawing up the
reconciliation forms
Backup the accounting system at the end of each working day and ensure that there is a
strict security system in operation
Prepare a monthly Accounting Officers checklist (see Annex 2)
4.3.3. Accounting Documents to be Prepared

Certain documents are prepared on a daily basis, while other documents are prepared monthly,
quarterly or annually.
Daily (each day for the previous day):
accounting notes (to verify the accuracy of the daily accounting records to be
posted)
Monthly (by the 15th of the following month):
Analytical trial balance for each programme
MEI
Synthetic trial balance for each programme
Consolidated balance for all programmes
Account record sheet separately for each programme for:
current accounts
debtors accounts
expenditure accounts
interest accounts
General Ledger showing all accounting transactions
Journal Register
CHAPTER 4
Page : 11
Quarterly:
MANAGEMENT OF THE
ACCOUNTING PROCESS
Annexes to the balance sheet
Annually:
The annual balance sheet
The Accounting Officer will submit the documents on a daily, monthly, quarterly and annually
basis to the Accounting Supervisor for review and signature.
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MANAGEMENT OF THE
ACCOUNTING PROCESS
CHAPTER 4
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MEI
WORK AND POSTING SEQUENCE

CHAPTER 5
Page : 13
5. Work and Posting Sequence

Documents required for the posting of each accounting transaction will be submitted by the
Accounting Officer, after the document has been checked, to the Accounting Supervisor.
The Accounting Supervisor will check the documents and authorise the posting of the relevant
document.
Each accounting transaction will be posted:
Sequentially in date order in the accounting day-book

Records in the Day-book will be sequentially numbered
The exchange-rate used in posting the accounting transaction will be entered next
to each record
To control funds to be used the General Ledger will include synthetic accounts with
analytical sub-accounts and will show:
The actual balance of payables and settlement of payments
The remaining payables and receivables
Ineligible payments made
The General Ledger will contain the following information:

The state of account as at the day when the Ledger is opened
The movements in all accounts for any particular period
The balance of accounts on a daily basis
Accounting will be for each programme down to contract level. Analytical needs are met through
the use of additional numbers after the account number. This will enable the system to keep track
of:
Programmes
Sub-components of the programmes
Projects and contractors involved in the programme
An example of the numbering system would be:

220
220.01
220.01.831
220.01.831.0001
= number of primary account

= number of programme
= number of sub-components
= number of particular contractor
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WORK AND POSTING SEQUENCE
CHAPTER 5

Page : 14
5.1 Correction of Errors

If errors are found they must be corrected immediately. Correction of the error must be clearly
recorded and posted to the period in which the error occurred.
The Accounting Officer responsible for Phare programme/projects will:
Correct the error
Sign and date the correction form confirming the correction has been made (see Annex 3)
Where the error has resulted in an incorrect report being issued, correct the report and
pass the corrected report to the Accounting Supervisor
The Accounting Supervisor will:
Check to ensure the error has been corrected and the correction form completed
Review and sign the correction form
Check the corrected report and reissue the corrected report.
ACCOUNTING ENTRIES
MEI
CHAPTER 6
Page : 15
6. Accounting Entries
The following table sets out the accounting entries applicable to Phare funds.
Transaction
description
1.Signing of
procurement
contract
recording
Potential
Liability
Transaction
date
Date of
signing of the
Contract
Base
document
Contract
MEI
Debit
account
950
Outside main
accounting
Commitments
MEI
Credit
account
Contract
amount to be
financed by
Phare and cofinancing
funds
950
Outside main
accounting
Payments
2.Funds from
NF received
Date of funds
received
Bank
statement
%
118xxxx
EUR in bank
account
Amount
Amount paid
from Phare
and cofinancing
funds
337xxxx
Special
destination
funds
The total
amounts
received
Amounts in
EUR
119xxxx
ROL in bank
account
Amounts in
ROL
and in the
same time
410
Institutions
costs
financed by
the budget
3.Request for
payment an
advance
Date of bank
transfer
Payment
order
220xxxx
Debtors
700
Financing by
the budget for
current year
Amounts
received from
co-financing
funds (ROL)
Total amount
paid
118xxxx
EUR in bank
account
Amount
financed by
Phare funds
Or/and
119xxxx
ROL in bank
account
Amount
financed by
state budget
(co-financing)
ACCOUNTING ENTRIES
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CHAPTER 6
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Transaction
description
4.A.Payment
of an invoice
Transaction
date
Date of bank
transfer
Base
document
Payment
order
MEI
Debit
account
220xxxx
Debtors
MEI
Credit
account
%
118xxxx
EUR in bank
account
Amount
Total amount
transferred
Amount
transferred in
EUR
Or/and
4.B.After
receiving the
final invoice,
covering the
advance but
decrease of
total amount
payable
Invoice
approved for
payment
Invoice
421xxxx
Costs
covered by
the special
destination
fund
5.Irregularities
receivable
from
contractor.
( Total amount
paid minus
total eligible
expenditure)
Date of letter,
fax, final
statement
Letter, fax,
final
statement
Shown by
debtors
balance of
the
acc.220xxx
6.Irregularities
received
from contractor
Date of
money
income
Bank
statement
%
118xxxx
EUR in bank
account
119xxxx
ROL in bank
account
Amount
transferred in
ROL
220xxxx
Debtors
Total eligible
expenditure
Amount of
irregularity
220xxxx
Debtors
Amount of
irregularity
Amount
received in
EUR
Or/and
119xxxx
ROL in bank
account
Amount
received in
ROL
ACCOUNTING ENTRIES
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CHAPTER 6
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Transaction
description
Transaction
date
7.Transferring
amounts from
the current
bank account
to the deposit
bank account
Date of
transferring
8.Transferring
amounts from
a current bank
account to
another current
bank account
Date of
transferring
Base
document
Bank
statement
Bank
statement
MEI
Debit
account
195
Internal
transferees
MEI
Credit
account
118xxxx
EUR in bank
account
118xxxx
EUR in bank
account
195
Internal
transferees
195
Internal
transferees
%
118xxxx
EUR in bank
account
Amount
Outgoing
amounts from
the current
account
Incoming
amounts in
the
deposit
account
Outgoing
amounts from
the current
account
119xxxx
ROL in bank
account
%
118xxxx
EUR in bank
account
195
Internal
transferees
Ingoing
amounts in
the current
account
119xxxx
ROL in bank
account
9. Bank
charges
Date of bank
charges paid
Bank
statement
423xxxx
Bank charges
Total amount
paid
118xxxx
EUR in bank
account
Amount paid
in EUR
119xxxx
ROL in bank
account
Amount paid
in ROL
ACCOUNTING ENTRIES
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CHAPTER 6
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Transaction
description
10.Bank
interest
accrued
Transaction
date
Date of bank
statement
Base
document
Bank
statement
11.Closure of
contract
decreasing the
contract total
amount
Final report /
Final invoice
Final report /
Final invoice
12. Closure
monthre-evaluate the
balance of
EUR account
in bank
Closure
month
Bank
statement and
INFO-EURO
exchange rate
13.Closure of
programmebank charges
paid
MEI
Debit
account
%
MEI
Credit
account
522xxxx
Interest
income
Amount
Total amount
received
118xxxx
EUR in bank
account
Amount
received in
EUR
119xxxx
ROL in bank
account
Amount
received in
ROL
Amount of
used Phare
funds and
used cofinancing
funds
Look at 4.B
Recorded in
Perseus, too
Look at 4.B
Recorded in
Perseus, too
118xxxx
EUR in bank
account
412xxxx
Ex-rate
difference
Favourable
amount
412xxxx
Ex-rate
difference
118xxxx
EUR in bank
account
Unfavourable
amount
522xxxx
Interest
income
423xxxx
Bank charges
The total
amount of
bank charges
paid
Or
Date of
repayment of
unused funds
and bank
interest to NF
Trial Balance
ACCOUNTING ENTRIES
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Transaction
description
Transaction
date
Base
document
14.Closure of
programmebank interests
unused (The
total amount of
interest
accrued minus
the total
amount of
bank charges
paid)
Date of
transferring
accrued bank
interests to
NF
Trial Balance
15.Refunding
funds to
National Fund
Date of bank
transfer
Payment
order
MEI
Debit
account
522xxxx
Interest
income
MEI
Credit
account
%
Amount
Total unused
bank interest
amount
118xxxx
EUR in bank
account
Amount
refundable to
EC
119xxxx
ROL in bank
account
Amount
refundable to
state budget
337xxxx
Special
destination
funds
118xxxx
EUR in bank
account
The amount
of Phare
funds unused
232
Discount with
state budget
119xxxx
ROL in bank
account
The amount
of national cofinancing
unused
337xxxx
Special
destination
funds
232
Discount with
state budget
The amount
of national cofinancing
unused
412xxxx
Ex-rate
difference
337xxxx
Special
destination
funds
The amount
of creditor
balance
(412xxxx)
337xxxx
Special
destination
funds
412xxxx
Ex-rate
difference
The amount
of debtor
balance
(412xxxx)
337xxxx
Special
destination
funds
421xxxx
Costs
covered by
the special
destination
fund
The amount
of debtor
balance
(421xxxx)
AND
16.Closure of
programme
refunding the
ex-rate
difference
Date of bank
transfer
Trial Balance
OR
17.Closure of
programme
reversal the
costs covered
by the special
destination
funds
Date of bank
transfer
Trial Balance
ACCOUNTING ENTRIES
MEI
Transaction
description
Transaction
date
Base
document
18. Closure
financial yearclose the
balance of 700
and 410
accounts
The end of
financial year
Trial Balance
MEI
Debit
account
700
Financing by
the budget for
current year
MEI
Credit
account
410
Institutions
costs
financed by
the budget
CHAPTER 6
Page : 20
Amount
Amount
received from
co-financing
funds (ROL)
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ACCOUNTING FOR
IRREGULARITIES
CHAPTER 7
Page : 21
7. Accounting for Irregularities

Irregularities arise from fraud and errors and can occur at any level in the Audit Trail e.g.
The National Fund
The Ministry of European Integration / the Implementing Agency for Regional Development
The Regional Development Agencies
The Final Beneficiaries
Contractors
Not every irregularity has a financial impact but may require the strengthening of the internal
control environment.
If an irregularity is discovered, or suspected, the procedures contained in Section VIII of this
Internal Procedures Manual must be followed.
Only irregularities which have had a financial impact or a financial implication will be entered in the
accounting system.
Irregularities of this type will arise from, but are not restricted to, the following events:
Manipulation of the tender process
Failure to carry out the conditions of the contract
Payments of EU funds through fraud or suspected or attempted fraud
Conflicts of interest or collusion
Payments of EU funds made as a result of error
7.1. Entry of Irregularities into the Accounting System

When an irregularity has been confirmed the PAO will issue a demand to the entity who received
the funds to repay the funds to the relevant Programme Payments Directorate bank account.
The PAO will further instruct the PPD to open a debtor account in the Books of Account of the PPD
in the debtors name. The PPD will then account for the amounts to be recovered as specified in
the accounting entries specified above in this Section.
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8. Reconciliation of Accounts
The PPD will keep its own financial accounts. As well as accounting for Phare funds the accounting
system will form part of the accounting system of the Ministry of European Integration.
Ensuring control and correctness of the accounting records is the goal of reconciliation of
accounts.
If discrepancies are found, these procedures will form the basis for correction of the discrepancy
and to understand why the discrepancy occurred. Output reports from the accounting software and
from the financial tables will form the basis for the preparation of a report on reconciliations.
Realised payments, posted payables, receivables and outstanding sums will be subject to
approval.
Reconciliations will be carried out by the Accounting Supervisor.

The reconciliation will then be approved by SAO.
8.1. Monthly Reconciliation of Financial and Accounting Data

8.1.1. Reconciling M.E.I. Accounting Records with Bank Statements
Within 20 days from the end of each month, the Accounting Supervisor will reconcile the bank
statements with the bank account balances shown in the accounting records using the Bank
Reconciliation Form (see Annex 4) and the Reconciliation of Total Euro Cash Flows for each Phare
programme (see Annex 5).
If there are any differences between the accounting records and the bank statements the
Accounting Supervisor will ask the Accounting Officer to correct the accounting records, using the
correction form (see Chapter 5.1) if there is a mistake or omission in the accounting records of
M.E.I., or notify the bank of the error and ensure the bank corrects its records, if the difference is
due to a bank omission or mistake.
The Accounting Supervisor will sign and date the Bank Reconciliation Form and will send the Bank
Reconciliation Form and the Reconciliation of Total Euro Cash Flows for each Phare programme to
the SAO for review and sign.
The SAO will review the forms and approve them or will ask for further corrections or information.
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8.1.2. Reconciling M.E.I. Accounting Records with National Fund Accounts

The Accounting Supervisor will ask the National Fund for the NF General Ledger to enable the
records of the PPD to be reconciled with the records of the NF.
By the 20th of the following month the Accounting Supervisor will receive the NF General Ledger
from the National Fund and will reconcile the NF General Ledger to the General Ledger of the PPD
using the Reconciliation with National Fund Accounts Form (see Annex 6).
If any differences are found requiring a correction of records, the Accounting Supervisor will ask
the Accounting Officer to fill out a correction form if the difference is due to a MEI mistake or
omission, or will notify the NF of the error and will ask the NF to correct its records if the accounting
records of MEI are correct.
The Accounting Supervisor will sign, date and send the Reconciliation with the NF Accounts form
for review and signature by the SAO.
The SAO will review the form and approve it, or asks for further correction or information.
8.1.3. Reconciling Accounting Records with Perseus Records

Within 20 days from the end of each month, the Perseus Operator will give a printed Perseus
Report to the Accounting Supervisor.
The Accounting Supervisor will reconcile the Perseus Report against the General Ledger of the
PPD using the Reconciliation Perseus Reports form (see Annex 7) and will send it to the SAO for
approval.
If there are differences between the Perseus Report and the accounting records of the PPD, the
Accounting Supervisor will either correct the PPD General Ledger, if the mistake or omission has
occurred in the accounting records of PPD, or ensure the correction is made in the Perseus
database if the accounting records of the PPD are correct.
The Accounting Supervisor will submit the Reconciliation with Perseus Report to the SAO for
approval.
8.2. Semi-annual Reconciliation of Financial and Accounting Data

The Accounting Supervisor will ask, semi-annually, all Beneficiaries / Contractors for a Balance
Confirmation. This Balance Confirmation (see Annex 8) will show the funds received from the PPD
by the entity, the funds spent and the balance remaining on the specified date.
Within 20 days from the end of semester (20th July of the current year and 20th January of the
following year) the Accounting Supervisor will verify that the payments made by the PPD are
MEI
CHAPTER 8

Page : 24
shown in the Balance Confirmation and reconcile the Balance Confirmation with the accounting
records of the PPD.
If differences are found the Accounting Supervisor will notify the Beneficiary / Contractor to enable
correction of their records (if the difference is due to a Beneficiary / Contractor error or omission),
or will ask the Accounting Officer to fill in a correction form if the accounting records of the
Beneficiary / Contractor are correct.
The Accounting Supervisor will send the Balance Confirmation of the Beneficiary / Contractor to
the SAO for review and signature.
The SAO will review the confirmation and approve it or will ask for further information or correction.
8.3. Annual Reconciliation of Financial and Accounting Data

Within 20 days from the end of each year, the Accounting Supervisor will reconcile the bank
account statements for each PHARE programme with the bank account balances in the books of
the PPD using the Annual Bank Reconciliation Form (see Annex 9). The reconciliation will be made
for the previous year.
If there are any differences between accounting records and bank statements the Accounting
Supervisor will ask the Accounting Officer to correct the accounting records, if there is a mistake or
omission in the accounting records of the PPD, using the correction form, or will notify the bank to
correct its records if the difference is due to a bank omission or mistake.
The Accounting Supervisor will sign, date and send the Annual Bank Reconciliation Form for each
Phare programme for review to the SAO.
The SAO will review the forms and approve them or will ask for further corrections or information
as appropriate.
On the basis of Agreement on financing between the NF and the PPD, PPD shall submit regular
reports on all financial aspects of each Phare programme implementation.
The information registered in PERSEUS system will be transmitted to the National Fund:
A copy to the National Fund
A copy by e-mail to the Delegation of the European Commission in Bucharest
A copy by e-mail to the European Commission
MEI
DEBTORS LEDGER

CHAPTER 9
Page : 25
9. Debtors Ledger
The Debtors Ledger will provide a complete record of demands made by the PAO requiring the
refund of all sums that have been paid out as a result of an irregularity.
The Debtors Ledger will also provide a complete record of the demands made by the Director of
the PPD for the refund of advance payments that have not been justified by eligible expenditure.
The Accounting Officer of the PPD shall keep and regularly update the Debtors Ledger. As well as
recording the amounts outstanding, the Debtors Ledger will also include a list of all debtors, by
name, and why recovery of funds is required.
The Accounting Supervisor will be responsible for the organisation, supervision and control of the
Debtors Ledger and for reporting to the Director of the Programme Payments Directorate.
The Debtors Ledger will include following:
Debtors name
Debtors address
Debtors legal details such a registration number etc
The amount to be recovered regarding the original payment(s)
The amount of interest to be recovered
The amount of bank charges to be recovered
The amount of penalties imposed on the debtor by the PAO to be added to the debt
When the amounts have to be paid by the debtor
The amounts received to date
The balance remaining to be recovered
The date the funds were returned to the National Fund
The reason the funds are to be recovered and, in particular, specifying if recovery is as a
result of an irregularity
The date of occurrence
The project number
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CHAPTER 8
Page : 26
10. Reports
The Balance Sheet will be the basic accounting report of the PPD.
The Balance Sheet will be prepared by the Accounting Officer on:
A monthly basis
A quarterly basis (the annexes to the balance sheet)
An annual basis
The Accounting Officer will provide monthly the following reports:
An analytical balance sheet for each programme
A synthetical balance sheet for each programme
A consolidated balance sheet for all the programmes
A General Ledger
Journal Register
Accounting notes
Within 15th days from the end of the next month, the Accounting Officer will submit the reports as
below, for the previous month, to the Accounting Supervisor for review. The reports will be signed
and dated by the Accounting Officer.
The Accounting Officer will prepare on a quarterly basis, the annexes to the balance sheet, which
are an integrated part of the balance sheet of the M.E.I.
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DATA ARCHIVING

CHAPTER 11
Page : 27
11. Identification of Accounting Records - Data Archiving

11.1. Archiving
Data archiving shall follow:
Accounting Law no.82/1991, as modified and completed by Government Ordinance
no.61/2001 regarding the modification and completion of the Accounting Law no.82/1991;
All documents relating to the Phare programmes must be retained and be available from the date
of the programmes implementation for a period of at least five (7) years after the programme
expiry date specified in the Financing Memorandum.
The Romanian governments retention policy is that documents are held for a periods of ten (10)
years or fifty (50) years, starting with the end of the year when the documents are recorded,
according to their importance. All finance documents are held for at least ten (10) years.
A proper, functioning archive system will:
Ensure that archive space is efficiently used
Provide for the proper disposal of records that are no longer required
Ensure efficient document retrieval
Ensure that documents and computerised data are stored safely
11.2. Procedures for the Retention and Archiving of Documents

The following suggested records management system aims to establish a passage of documents
from office to storage to destruction. This is achieved by:
Conducting an inventory of all the records to establish official record titles for all files and to
establish where those files are located
Drawing up Record Retention Schedules specifying how long each type of record is to held
in the archive for:
Active reference
In storage for semi-active reference
Inactive reference
When the document may be destroyed
Drawing up a Record Storage Index and a Destruction Control Card for each document or
file transferred to the archive
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DATA ARCHIVING

CHAPTER 11
Page : 28
Controlling the movement of documents in and out of the archive by establishing a

procedure using a Reference Request Card whereby a file leaving and retuning to the
archive is recorded
The archive will be maintained, protected and managed by a designated officer within the PPD.
Certain archived material, such as electronic data, will be held in suitable cabinets as required.
When documents are to be destroyed a Committee should be established to approve the
destruction and method of destruction. The Committee should consist of:
A Senior Officer of the PPD
A representative of Internal Audit
A representative of the Legal Department of the MEI
A representative from the Department or Directorate from which the document originated
A representative of the Preventative Internal Control Department
11.3. Identification of Accounting Records

Each accounting record will be assigned a unique serial number that the record will retain for the
duration of the Phare programme.
The following files are relevant to the accounting of the PPD:
Accounting software system:

General Ledger
Balance Sheets of Phare co financed programs
Files of payment request from beneficiaries/contractors for each project plus
supporting documents
Files of bank reconciliations for each programme
Files of debtors and creditors
Files of irregularities
Files of discrepancies
Perseus reporting system:

Files of statements of Phare programmes (inc. Perseus reports)
Files of bank reconciliations
Files detailing the status of local programmes
File detailing the status of local contractors
MEI
12. Annexes
ANNEXES
CHAPTER 12
Page : 29

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The Government of Romania

3.1. Accounting Documents

4. MANAGEMENT OF THE ACCOUNTING PROCESS

4.1. Accounting of the Programme Payments Directorate

4.2. Role of the Accounting Supervisor

4.3. Role of the Accounting Officer

5. WORK AND POSTING SEQUENCE

5.1 Correction of Errors

7. ACCOUNTING FOR IRREGULARITIES

7.1. Entry of Irregularities into the Accounting System

8.1. Monthly Reconciliation of Financial and Accounting Data

8.2. Semi-annual Reconciliation of Financial and Accounting Data

8.3. Annual Reconciliation of Financial and Accounting Data

11. IDENTIFICATION OF ACCOUNTING RECORDS - DATA ARCHIVING

11.2. Procedures for the Retention and Archiving of Documents

11.3. Identification of Accounting Records

FUNCTIONS & PROCEDURES

FUNCTIONS & PROCEDURES

The accounting operations must provide all necessary information

FUNCTIONS & PROCEDURES

Accounting Law no.82/1991, as modified and completed by Government Ordinance

Order no.1792/2002 of the Ministry of Finance approving methodological norms in respect

A complete, verifiable and accurate record of all accounting transactions

Enable the settlement of invoices in EUR or ROL

Provide full accounting for commitments

FUNCTIONS & PROCEDURES

3.1. Accounting Documents

Be drawn up based on source documents (invoices, bank statements, receipts, etc)

Specify the accounting document

Have control numbers

Detail the contents of the accounting transaction

Specify sums in Romania ROL and/or EURO

Specify the bank account to be used for the transaction

4. Management of the Accounting Process

A module for accounting in Romanian ROL

A module for accounting in EURO

Password for launching the accounting application

The second Accounting Officer

The Accounting Supervisor

The Director of the PPD

All data will be backed up as follows:

Daily on the server

Weekly on compact disc (kept in a suitable safe within the PPD)

4.2. Role of the Accounting Supervisor

The aim of supervising accounting data is:

4.2.4. Accounting Documents to be supervised

Analytical trial balance for each programme

Synthetic trial balance for each programme

Consolidated balance for all programmes

Account record sheet separately for each programme

General Ledger showing all accounting transactions

Annexes to the balance sheet

The annually balance sheet

4.2.5. Documents to be prepared by the Accounting Supervisor

Bank Reconciliation Form

Reconciliation of total euro cash flow for each programme Form

Reconciliation with the National Fund accounts Form

Reconciliation with PERSEUS Form

Balance confirmation with the consultant /contractor (applicable for Technical

4. Annually (by 25th January of the next year):

Annual Bank Reconciliation for each programme

5. The Completed Checklist for each programme

4.2.6. Content of Supervision Operations

4.2.7. Supervision Procedures