Memorandum
TO:
FROM:
DATE:
SUBJECT: Improved AFE Procedures
I’d like to suggest two improvements in the company’s procedures for Authorization for Expenditures (AFEs):
1. Procedures should require that AFEs be closed within 10 days after activity has ceased or by a specified date each month.
2. Accounting should confirm in writing that funds are available to be committed to an approved AFE.
These improvements will ensure the accounting for costs is completed and previously committed funds are released. Also, timely closing will improve accuracy of the records, because all parties will still be available to answer unresolved questions. Second, the Accounting Department’s written confirmation (possibly through an additional signature line on the AFE form) will communicate to management that funds are available. Written confirmation will also alert Accounting to begin to accumulate contracts so invoices can be speedily processed.
Ultimately, this procedure should prevent budget overruns.
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