Military registration records in a civil society organisation: what a donor looks at

Why a donor cares about your military registration records

A civil society organisation with at least one employee is an employer, and so keeps military registration records on the same basis as any other employer. The rules themselves are set out in the Ministry of Defence guidance and there is no point restating them here.

What is not in the primary source is the part that matters for a grant: which of this a donor looks at, and what an auditor checks in a project. The link is direct, if not obvious.

Three reasons this is a grant question

1. A fine cannot be paid from grant funds. Fines for breaches are an ineligible cost in every donor agreement we have seen. Where the organisation paid one from the project account, the donor requires repayment, and a question about internal control follows.
2. Personnel costs are the largest line in most projects. In testing that line the auditor looks at human resources documentation as a whole. Missing mandatory HR documents for a project employee put the whole line in doubt.
3. Capacity assessment. Before a large grant the donor assesses whether the organisation can manage funds. The HR block forms part of that assessment, and gaps in it affect the decision.

What the auditor checks in project HR documents

• The order appointing the person responsible for military registration records. The first question asked: who is responsible, and under what document.
• The employee’s documents on hiring. Whether registration documents were checked at the point of hiring and whether that check is recorded.
• Notifications to the territorial recruitment centre. Whether they were sent on hiring, transfer and termination of project staff, and within the required time.
• Lists and their currency. Whether data were updated and whether the annual reconciliation was performed.
• Whether any fines arose during the project period, and if so, which account they were paid from.

What to do if a fine has already been paid from the project account

Correct it yourself, before the audit. The sequence: return the amount to the project account from the organisation’s own funds, post an entry moving the cost to own funds, and remove it from the project report. Where the report has already been submitted, file a corrected one with an explanation. A self identified correction is received far more easily than an auditor’s finding.

Typical gaps in civil society organisations

• No one is appointed by any document. The accountant or the director performs the duties in practice, but there is no order.
• Records cover permanent staff only. Part time staff and people on fixed term project contracts are overlooked.
• Notifications are sent in batches once a quarter. The deadlines are then missed, even though every notification eventually goes out.
• The annual reconciliation was never done. Organisations often learn of it from an inspection.
• The documents live in the accountant’s personal email. When the accountant changes, they cannot be reconstructed.

What to do this week

1. Check whether an order appointing a responsible person exists, and issue one if not.
2. Draw up a list of everyone employed under an employment contract, including project staff and part timers.
3. For each of them, check whether a notification was sent on hiring and within what period.
4. Find every fine in the accounts for the project period and check which account paid it.
5. Assemble the project HR file separately, so that it does not have to be assembled on the day of the audit.

If you need a review

We have audited international technical assistance projects since 2000 and carry out HR compliance reviews. Tell us how many employees you have and whether any are project staff or part timers, and we will say which HR documents to prepare for a grant audit. A proposal follows once we have reviewed the assignment.