The Accounting Regulations Of The NIS

SMNT VINCENT AND THE GRENADINES

STATUTORY RULES AND ORDERS

1996 NO.21

(Gazetted 13th August 1996)

IN EXERCISE of the powers conferred by section 16 (2) of the National Insurance Act, and all other powers hereunto enabling the Minister makes the following Regulations:-

THE NATIONAL INSURANCE (FINANCIAL AND

ACCOUNTING) REGULATIONS, 1996.

1. Citation and commencement: These Regulations may be cited as the National Insurance (Financial and Accounting) Regulations, 1996.

2. Interpretation: In these Regulations, unless the context otherwise requires -

"expenditure" means payment out of the Fund under the provisions of section 3 (2) of the Act;

"income" means payments into the Fund under the provisions of section 3 (1) of the Act;

"other securities" mean investments made in securities other than trustee securities;

"Reserve" means any one of the Reserves constituted under regulation 20;

“trustee securities" mean investments made in public funds or Government Securities of Saint Vincent and the Grenadines or other securities where the repayment of capital and interest is guaranteed by the Government of Saint Vincent and the Grenadines or any other securities authorized by any Ad for investment of Trust Funds.

PART 1

BENEFIT BRANCHES

3. Benefit Branches: The benefits to be provided by the Fund shall be grouped into four branches -

(a) Long Term Benefits Branch comprising age benefit, invalidity benefit, survivor's benefit and funeral grant;

(b) Short Term Benefits Branch comprising sickness benefit and maternity benefit;

(c) Employment Injury Benefits Branch comprising medical expenses, injury benefit, disablement benefit, constant attendance allowance, death benefit and funeral grant payable on death due to employment injury; and

(d) National Provident Fund Branch ii' respect of benefits to be paid out of the National Provident Fund.

4. Financial autonomy of benefit branches: (1) Each of the four benefit branches specified in regulation 3 of these Regulations shall, so far as the circumstances allow, be financially autonomous, so that income allotted to one benefit, branch shall not be used to cover expenditure relating to another branch:

Provided that -

(a) when employment injury benefits specified in section 27 (l) of the Act are implemented for the first time the Board may transfer such amount as it thinks ft to the Employment Injury Benefits Branch account from either the Short Term Benefits or the Long Term Benefits Branch;

(b) it there is a temporary insufficiency in any one branch, the Board may authorize the transfer of any amount that may be necessary from another branch;

(c) amounts transferred under sub-paragraph (a) or (b) shall be repaid to the lending branch by the borrowing branch as soon thereafter as possible with payment of interest at such rate as the Board may determine;

(d) if the insufficiency mentioned in sub-paragraph (b) continues, the Board may, acting in accordance with sub-paragraph (a) of the proviso to regulation 21 and subject to section 16 (1) and (2) of the Act, authorize the transfer of any amount that may be necessary from another branch.

(2) Separate income and expenditure accounts shall be established for each of the benefit branches, and shall be prepared in accordance with Part IV of these Regulations.

(3) Separate reserves shall be established and maintained in respect of each of the benefit branches in accordance with Part IV of these Regulations.

(4) Separate accounts shall be prepared for the National Provident Fund Branch in accordance with the provisions of the National Provident Fund Act now repealed, and kept in such form as the Director of Audit may approve.

PART II

BUDGET ESTIMATES

5. Financial year: The financial year for the purpose of the budget and accounts shall be the year ending on the 31st day of December, provided the first financial year shall cover such period as the Minister may direct.

6. The Annual Budget: Before the 31^st day of October of each financial year, the Director shall submit to the Board for its approval, estimates for the income and expenditure for the following financial year.

7. Heads of estimates: The estimates submitted under regulation 6 shall be made under the heads shown in the First Schedule and shall be accompanied by a memorandum giving explanations of any variation of the amounts expected to be received or spent as compared with the corresponding amounts included in the approved estimates of the current financial year.

8. Additional heads of estimates. The Board may add to the heads under which the estimates required by regulation 7 are to be submitted, and may require information relating to the makeup, calculation or reason for inclusion of any item in the estimates as submitted.

9. Approved estimates. The estimates submitted in accordance with this Part, when approved by the Board, shall show the income expected to be collected and shall set limits to the expenditure which may be incurred under each of the relevant heads. Expenditure shall not be incurred under any head in excess of the limit set for the head without the prior approval of the Board:

Provided that expenditure in excess of the limits set out may be incurred in respect of benefits subject to subsequent ratification by the Board as soon thereafter as possible.

10. Authority to incur expenditure: If the budget estimates have not been approved by the Board before the beginning of the financial year to which they relate, the Director shall be authorized by the Board to incur expenditure under the various heads subject to such conditions as it may see fit to impose until such time as the budget is duly approve~

PART III

BUDGETARY CONTROL

11 Financial provisions relating to staff: The Director shall furnish a list of the names of such of the officers of the Board who from time to time, may be authorized to approve payment vouchers, sign cheques, approve accounting transfers or exercise other similar functions, and the list shall state such limits, financial or otherwise, as the Board may approve, within which each officer whose name appears on the list shall be authorized to exercise the function allotted to him.

12. Fidelity Bond. Insurance by way of fidelity bond or other similar security shall be arranged by the Board giving cover, up to such amounts as may be approved by the Board, against the risk of defalcation by cashiers, storekeepers or other custodians of the property of the Board.

13. Losses, deficiencies and over-payments. The Board, with the approval of the Minister, may authorize the writing off of any loss, deficiency or over-payment as irrecoverable when satisfied that adequate investigation has been made into the causes of, and responsibility therefore, and that steps have been taken as far as possible, to prevent similar recurrences in the future.

14. Internal Audit. (1) The Director shall make adequate arrangements for the internal audit of the financial procedures arid accounts of the Fund.

(2) The internal audit shall comprise the following functions -

(i) examining and certifying every payment voucher, accounting transfer authority and receipt.

(ii) testing awards of benefit's for regularity and conformity in all respects with the Act and the relevant Regulations;

(iii) checking that all income due to the Fund is received and brought to account unless written off is irrecoverable with the authority of the Board;

(iv) assisting in the exercise of budgetary control by maintaining a continuous review of the progress of income and expenditure, and reporting whenever it appears likely that the income under any head of the estimates as approved by the Board will fall short of, or the expenditure under such head will exceed, the amount stated in the approved estimates;

(v) examining and certifying the correctness of the accounts submitted periodically by revenue officers of local offices or other accounting units if any such units are set up, and the periodical accounts of the Fund, including the annuity accounts;

(vi) checking that those directions contained in the code of instructions designed to facilitate accounting controls or provide safeguards against error or fraud are observed and implemented;

(vii) carrying out such functions as may from time to time be required by the Director.

15. Reports to the Board: The Director shall submit to the Board reports on the latest financial situation of the Fund with reference to income and expenditure, at such intervals and in such form as the Board may direct, together with any comments or remarks that may be called for.

PART IV

ACCOUNTS

16. Heads of account and accounting instruction: (1) Accounts shall be opened for each of the heads under which the estimates of income and expenditure have been approved by the Board and for such other heads or subdivisions of heads as may be necessary; and the financial transaction of the Fund shall be recorded under such heads by the double-entry system of book-keeping

(2) Subject to the approval of the Board, the Director shall issue detailed instructions governing the methods of procedures to be followed in maintaining the accounts, and in particular the basis on which the various items of income and expenditure are to be recorded.

17. Annual summary accounts: (1) At the end of each financial year the accounts as a whole shall be balanced and the following summary accounts shall be prepared in accordance with the models presented in the Second Schedule -

(a) a consolidated Income and Expenditure Account for the Fund as a whole;

(b) the Income and Expenditure Account in respect of each of the benefit branches as the case may be;

(d) a Balance Sheet for the Fund as a whole:

Provided that the Balance Sheet shall be supplemented by an account showing the current transaction of the disablement and Death Benefits Reserve in accordance with the model presented in the Second Schedule.

(2) Subject to regulation 4(2) the Income and Expenditure Accounts shall show the income and expenditure recorded during the financial year and the Balance Sheet shall show the liabilities and assets of the Fund as at the end of the financial year.

(3) The Board may from time to time add to or sub-divide the heads of the summary accounts as may be thought necessary.

18. Distribution of income among the Income and Expenditure Accounts of the benefit branches: (1) The income from contributions shall be distributed among the benefit branches in the following proportions-

Before employment After employment

Injury benefit Injury benefit

a. Short-term Benefits 25% 20%

Branch

(b) Long-term Benefits 75% 62%

Branch

Benefits Branch NIL 18%

Provided that if an actuarial report made under section 17 of the Act recommends a redistribution of the contribution income among the benefit branches, the Minister acting on the recommendation of the Board, may by Regulations, modify the proportions of income to be distributed among the benefit branches.

(2) The income from the investment of the Reserve shall be allocated as follows -

(a) the income from the investment of the Short term Benefits Reserve shall be allocated to the Short-term Benefits Branch;

(b) ,the income from the investment of the Pension Reserve shall be allocated to the Long-term benefit Branch;

(c) the income from the investment of the Employment Injury Benefits (Short-term) Reserve shall be allocated to the Employment Injury Benefits Branch;

(d) the, income from the investment of the Disablement and Death Benefits Reserve shall be allocated as provided in regulation 20 (3).

(3) All other income to the Fund which cannot be identified with any specified branch shall be distributed in equal parts among the benefit branches that may be in existence.

19. Distribution of expenditure among the Income and Expenditure Accounts of the benefits branches: (1) The expenditure shall be on the benefits grouped under a specified branch in regulation 3 shall be ascribed to that branch

(2) The administrative expenditure of the Fund shall be distributed among the benefit branches as the case may be, in such a manner that the proportion allocated to a particular branch shall be equal to the proportion which the sum of the contribution income and benefit expenditure shown in the Income and expenditure Account of that branch bears to the sum of the contribution income and benefit expenditure of the Fund as a whole.

(3)

All other expenditure which is not attributable to any specific branch shall be distributed in equal parts among the benefit branches which may be in existence.

20. Reserves to be constituted: (1) A Short-term Benefit Reserve shall be constituted by transferring thereto annually the excess of income over expenditure of the Short-term Benefit Branch.

(2)

A Pension Reserve shall be constituted by transferring thereto annually the excess of income over expenditure of the Long-term Benefit Branch.

(3)

A Disablement and Death Benefits Reserve shall be constituted in the following manner -

(a) the capital values of periodically payable disablement and death benefits awarded in a year shall be charged against the year's income in the Income and Expenditure Account of the Employment Injury Benefits Branch and shall be credited to a current account which -

(i) shall be further credited with the income from investment of the said Reserve and,

(ii) shall be debited with the actual payment of current periodical disablement and death benefits effected during the year;

(b) the balance thereof shall be transferred at the end of the year to the said Reserve or the deficit thereof shall be recovered at the end of the year from the said Reserve.

(4) Subject to paragraph (3) an Employment Injury Benefits (Short-term) Reserve shall be constituted by transferring thereto annually the excess of income over expenditure of the Employment Injury Benefits Branch.

21. Circumstances under which an interim actuarial review may be required: (1) The Short-term Benefits Reserve and the Employment Injury Benefit (Short-term) Reserve shall be used to meet any unforeseen or abnormal expenditure which the current income of any other branch may not be sufficient to cover.

(2) Where -

(a) the Short-term Benefits Reserve falls below the level of the average six months' expenditure of the branch concerned on benefits during the preceding three financial years; or

(b) the Employment Injury Benefits (short-term) Reserve falls below the level of tile average six months' expenditure of the branch concerned with benefits other than periodically payable disablement and death benefits during the preceding three financial years, and if the trend of reduction continues,

actuarial advise shall be sought as provided for in section 17 (1) of the Act, and necessary action taken so that the contribution income available to the branch concerned may be sufficient to vary the expenditure of that branch and to restore the Reserve concerned to the required level.

(2) Where the branch concerned has been in operation for less than three financial years, the six-monthly average mentioned in paragraph 2 (a) shall be computed with reference to the actual period of operation.

(3) Where it is anticipated that the current income of the Long term Benefit Branch will become insufficient to meet the current expenditure of that branch actuarial advice shall be sought in accordance with section 17 of the Act.

22. Investment of Reserves. Each of the Reserves specified in regulation 20 shall, subject to the provisions of section 14 of the Act, be invested having due regard amongst other things to its nature and purpose and to the probable periods at which it may be necessary to realize the investment.

23. Table of capital values: The capital values of awards of periodically payable disablement and death benefits sha1l be calculated in accordance with the Tables contained in the Third Schedule and in accordance with the examples given in the Fourth Schedule

Provided that these capital values may be revised by amending regulations on the recommendation of the Board, if an actuary's report under section 17 of the Act recommends such revision.

24. List of Investments to supplement Annual Balance Sheet: The Annual Balance Sheet shall be supplemented by a Schedule, giving complete list of the investments of the Fund as at the date of the Balance Sheet, classified by the Reserves to which the investments relate. This list shall show the following particulars with regard to the investment

(a) the name or identification, rate of interest and maturity date;

(b) the cost price;

(d) the market value.

FIRST SCHEDULE Regulation 7

HEADS UNDER WHICH BUDGET ESTIMATES OF INCOME AND EXPENDITURE ARE TO BE SUBMITTED TO THE BOARD

INCOME

(1) Contributions:

(a) by employers;

(b) by insured persons.

(2) Income from investments:

(a) interest on investment in trustee securities

(b) interest on investment in other securities.

(3) Grant from the Consolidated Fund

(4) Other income

(5) Total income

CURRENT EXPENDITURE

(1) Benefits-

(a) Short-term Benefits Branch:

Sickness Benefit,

Maternity Benefit.

(b) Long-term Benefits Branch:

Age Benefit,

Invalidity Benefit,

Survivor's Benefit,

Funeral Grant.

medical expenses,

injury benefit,

disablement benefit,

death benefit,

funeral grant.

(2) Administration -

(a) salaries and allowances of administrative staff

(b) allowances and expenses of the Board,

(3) Other expenditure.

CAPITAL EXPENDITURE

(1) Investment,-

(a) Trustee securities,

(b) Other securities

(2) 'Purchase or acquisition of-

(a) premises,

(b) furniture and equipment,

(d) other items.

SECOND SCHEDULE Regulations 17 (1)

HEADS OF ANNUAL SUMMARY ACCOUNTS

1. CONSOLIDATED INCOME AND EXPENDITURE ACCOUNT

INCOME

(1) Contribution -

(a) by employers,

(b) by insured persons.

(2) Income from investments -

(a) Trustee securities,

(b) Other securities.

(3) Other income.

(4) Total income.

EXPENDITURE

(1) Benefit expenditure

(a) Short-term Benefits Branch;

(b) Long-term Benefit Branch;

(d) National Provident Fund Branch;

(2) Administrative expenditure

(3) Other expenditure

(4) Total expenditure

(5) Excess of income over expenditure

If the distribution of the total income from contributions between employers and insured persons cannot be evaluated accurately estimates of such distribution may be provided to the extent possible.

2. INCOME AND EXPENDITURE ACCOUNT OF THE SHORT-TERM BENEFIT BRANCH

INCOME

(1) Contributions

(2) Income from investments of the Short-term Benefits Reserve -

(a) Trustee securities;

(b) Other securities.

(3) Part of other income of Fund ascribed to the Branch

(4) Total income

EXPENDITURE

(1) Benefit expenditure:

(a) Sickness benefit

(b) Maternity benefit

(2) Part of administrative expenditure ascribed to the Branch

(3) Part of other expenditure ascribed to the Branch

(4) Total expenditure

(5) Excess of income over expenditure *

* Credited to the Short-term Benefits Reserve if positive, debited to the Short-term Benefits Reserve if negative.

3. INCOME AND EXPENDITURE ACCOUNT OF THE PENSION BRANCH

INCOME

(1) Contributions

(2) Income from investment of the pensions Reserve

(a) Trustee Securities,

(b) other securities

(3) Part of other income of Fund ascribed to the Branch

(4) Total income

EXPENDITURE

(1) Benefit expenditure

(a) Age benefit

(b) Invalidity benefit

(i) Widows/widowers,

(ii) Orphans

(iii) Other dependents.

(d) Funeral grant

(2) Part of administrative expenditure ascribe to the Branch

(3) Part of other expenditure ascribed to the Branch

(4) Total expenditure

(5) Excess Of income over expenditure *

* Credited to the Pension Reserve

4. INCOME AND EXPENDITURE ACCOUNT OF EMPLOYMENT INJURY

BENEFITS BRANCH

INCOME

(1) Contributions

(2) Income from investments of the Employment Injury Benefits (Short- term) Reserve

(a) Trustee securities

(b) Other securities.