In order to ascertain a fit-for-purpose accounting system, MACTT aims to be, first and foremost, compliant with all regulatory issues affecting its accounting system. To this end, the entity’s Treasurer, in agreement with the Head of Academy, keeps abreast with any changes related to the Companies Act, the main body of law regulating local companies’ obligations. In addition, key legislations relating to income tax and Value Added Tax (VAT) as well as documentation related to the entity’s financial reporting framework (Generally Accepted Principles for Small and Medium Enterprises – GAPSME) are often consulted in order to ensure that the accounting system is in line with the latest developments. An anticipatory approach is adopted to changes in legislation in that the concerned staff at MACTT make any necessary preparations in order to welcome any new changes on board as effectively as possible.
Furthermore, an internal control system linked to the accounting system has been developed and is regularly monitored and maintained in order to ensure that the financial process is one that represents truly and faithfully the activities of the Academy. Controls in place include a system of double-checking is in place to minimise the risk of erroneous reporting. The financial system is also accessible solely to authorised persons within the Academy, namely the Treasurer and Legal Representative who monitors it and also approves any expenditure occurring during the financial year. Moreover, the internal control system is regularly updated to reflect any changes in the Academy’s accounting through a review every three months carried out by the Treasurer of the Academy together with the accountant. The effectiveness of controls is also tested during this review whereby tests of control are carried out as well as reconciliations so as to ensure that the information provided is in line with financial transactions taking place. For instance, three-month bank statements are compared to the books of accounting to ensure that they provide the same results. Finally, the Treasurer and Legal Representative works in close collaboration with the external auditor in order to deliver the set of audited financial statements to the Malta Financial Services Authority in a timely manner, pinpointing also any weaknesses in the internal controls to rectify for the forthcoming financial period.
The engagement of key personnel and their continuous professional development is another cornerstone of the entity’s accountability system. Both the Head of Institute, the Treasurer, and the other members of the Board have the necessary technical and practical experience, each having qualifications achieved in his/her relevant sector of competence. The Head of Institute was also appointed on the basis of a structured and rigorous selection process mostly focusing on candidate’s qualifications, expertise and knowledge of management aspects, together with previous working experience in the sector. With regard to the Coordinator of Studies, he has been selected on the basis of his qualification, project management and communication skills. A background check on each of the candidates applying for posts with the Academy as well as any trainers engaged is also conducted in order to ensure that those selected to occupy a managerial position within the company are fit and proper persons with good legal conduct and professional demeanour.
In order to ensure cost effectiveness and operational efficiency, cash budgets are prepared on an interim basis in order to guide members in defining their priority activities for the 6-month period. These budgets are rolled over on a monthly basis in line with the changing conditions of the operating environment of the entity to ascertain that a representative picture of the actual situation is always kept. A variance analysis exercise is conducted at the end of the 6-month period in order to compare actual expenditure with that budgeted and carry out adjustments in terms of the resource allocation and the operations of the Academy as deemed necessary.
Management of the Academy’s working capital is also crucial. To this end, an aged debtors list is prepared and maintained regularly, with the necessary follow-up and chasing for any remaining due amounts being conducted by the third-party accountant once the credit period provided has elapsed. Individuals applying for the Academy’s courses are usually asked to settle invoices prior to the commencement of lectures. In terms of payments made to suppliers and service providers, the credit period agreed upon on between the Academy and the creditor is often strictly abided by so as to avoid any risks of reputational damage that could jeopardise the long-term stability of the Academy. The effective management of debtors and creditors ascertains that the Academy maintains a strong cash flow position and healthy liquidity situation throughout its operations, allowing for a positive long-term financial outlook. Ploughing back any profits generated from the business and assessing the financial position of the entity on a regular basis through the aforementioned budgets and management accounts also contribute to the long-term stability of MACTT.