Annual report 2009 - Handicap International

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xz Financial reportxz Financial transparencyFor Handicap International financial transparency is amanagement principle, and it aims to be able to account forthe use of the funds entrusted to it at all times. In addition toits own internal control procedures, the Association submitsitself to several types of checks.Statutory auditThe annual financial statements, drawn up to 31 st December2009, are audited and certified by the Association’s auditors,Ernst & Young Audit. They were prepared according togenerally accepted French accounting principles andmethods, in accordance with the French accountingsystem applicable to associations and foundations, andin accordance with the new regulations on the “compted’emploi des ressources” (CER) [Statement of utilisation offunds].“Le Comité de la charte” charity supervisorybodySince 1998 Handicap International has been a member ofthe “Comité de la Charte”, a supervisory and accreditationbody. The Association voluntarily submits itself to oversightof principles of good governance, scrupulous management,irreproachable public relations and public fundraisingactivities, as well as financial transparency towards donors.The logo “Don en confiance” or “Giving with confidence”,which appears on the Association’s main public relationsmaterials, informs donors that accreditation has beenreceived from this body and that its principles have beenadhered to.Cour des Comptes [French Court of Audit]Because Handicap International is recognised as beinga public interest body by the government, appeals to thepublic for funds and issues tax deduction certificates, thisgovernmental body can audit the Association at any time.The Cour des Comptes also carries out ad hoc checks onthe utilisation of funds raised.Inclusion of the CER statement in to the annualfinancial statementsThe decree of 11 December 2008 laid down newaccounting regulations on the preparation of the CERstatement, effective from the 2009 financial year. Thecombined financial statements for 2009 have thereforebeen prepared to comply with these regulations. Forcomparative purposes, the 2008 financial statementshave been restated in line with this new standard. Thisrestatement has been verified by the Association’sauditors.Did you know?The annual financial statements, the notes to the accounts,and the statutory auditor’s report can be consulted uponrequest to the Association’s head office. These documentsare also available on the www.handicap-international.frwebsite.xz How the CER (statement ofutilisation of funds) is prepared– The total for each line item includes the direct costs, theremuneration of the employees responsible for carrying outthe activity, and a fraction of overhead costs proportionalto head office employee full-time equivalents.– The expatriate labour cost total is allocated directly to thesocial missions, on the basis of the time actually spent inthe field.– Steering costs and the costs of the support services neededto run the social missions (programmes management,technical advisers, logistical and purchasing supportservices, personnel administration, and accounting andinternal audit services) are categorised under this lineitem, as in 2008.– The costs incurred in development education form part ofthe Association’s social mission and are categorised in theappropriate line item. This is the case with costs allocatedto the International Campaign to Ban Landmines andCluster Munitions, and for costs relative to raising publicawareness on the inclusion of people with disabilities.– The costs of information for the general public, such asthe website, are included in the line item “Administrativeexpenses”.– Exceptional costs are included under the operations towhich they relate. Financial support given to other sectionsof the international network is allocated over various lineitems according to the type of expense being funded.– Funds raised for a specific purpose but not utilised in thefinancial year are shown before arriving at the surplus ordeficit.– The proportion of the contribution from institutional donorstoward funding head office costs is allocated to theheading “Administrative expenses”.– Charges to and write-backs from provisions are shownafter the totals for uses or sources of funds, as requiredby the new legislation.– The total valuations of donations in kind received byHandicap International in 2009 are shown at the bottomof the CER.– The proportion of reserves deriving from funds raised fromthe general public has been calculated in accordance withthe new directives of 1 st January 2008.20 ı Annual report 2009
Balance sheet at 31 st December 2009Financial security indicatorsTo assure the Association’s financial security and that ofthe actions it carries out, Handicap International has builtup reserves of Association funds and of cash, according tostrict rules:– as a minimum, Association funds must represent the equivalentof one and a half months’ running costs for emergencyoperations and three months’ for other work;– minimum cash available must be sufficient to cover onemonth’s expenses.These reserves make it possible to cope with any fluctuationsin funding. They can also be used to finance working capitalrequirements arising from timing differences betweenoperations being carried out and receipt of funding frominstitutional donors. They also allow Handicap Internationalto act on its own initiative and the freedom of action neededto carry out its social missions.Increased financial securityAt 31 st December 2009, Association funds stood atUS$28.1 million, against US$24.9 million at the end of 2008.The increase in these funds, which ensure the Association’sfinancial security and action capacity, was the result of thesurplus made in 2009In line with the security indicators referred to above,Association funds covered 3 months of running costs in 2009(all types of activities included) against 2.6 months in 2008(calculated on total uses of funds, excluding designatedfunds brought forward). Together with an increased averagecash position, they are testimony to the Association’s returnto financial health.Association fundsThey were made up of:– US$6.8 million in net fixed assets, against US$7.9 millionin 2008. This represents a return to normal levels aftercompletion of the rollout of the new financial informationsystem which had a significant impact on the volume offixed assets in 2008;– US$4.4 million in working capital requirement,against US$3.5 million in 2008. This is the minimum cashneeded to cover the timing differences between receipt offunds receivable and paying out liabilities falling due;– US$16.9 million in available cash, against US$13.5million in 2008. This increase is due to the improvement inthe public fundraising margin.Designated fundsThese stood at US$583 thousand at the end of 2009,against US$810 thousand* in 2008. These funds concernprogrammes in Cambodia (US$530 thousand) and thePhilippines (US$53 thousand).The balance of designated funds not utilised for operationsin Iran, (amounting to US$24,700) were reallocated to theMiddle-East programme.* The difference from the US$1.04 million reported in the 2008published financial statements relates to designated sponsorshipincluded in the line item “Other private funds” in the new CER.(in thousands US$) Rate 1.4406Intangible fixed assetsTangible fixed assetsFinancial fixed assetsASSETS 2009 20081,7164,1349731,8034,9601,144Fixed assets 6,822 7,907Inventories and work-in-progress146 272Payments on accounts243Client receivables and related accountsFunding organisationsMissions advancesOther receivablesMarketable securitiesCash disposal2,2214,2925,65610,05614,4692,4112,2964,6225,5087,81412,684811Current assets 39,493 34,007PrepaymentsUnrealised exchange losses1,8805091,725689Total assets 48,705 44,328LIABILITIES (before distribution) 2009 2008Association funds and reservesProfit and loss during periodProgrammes subsidies20,7043,8383,60726,073– 5,3694,242Association funds 28,148 24,945Provisions for risksProvisions for charges1,5169591,3101,555Provisions for risks and charges 2,475 2,865Allocated funds to social missions 583 1,040Loans and debts with banksSuppliers and trade payablesFiscal and social debtsFunding organisationsOther liabilities603,8504,3836,0432,754304,1353,9644,8731,821Current liabilities 17,089 14,822Accrual and deferred incomeUnrealised exchange gains275133308348Total liabilities 48,705 44,328Annual report 2009 ı 21
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Page 31 and 32: Board of Trusteesxz BurEauChairman

Annual report 2009 - Handicap International

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