SOP for Preparing EHS Budget and Financial Records

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SOP for Preparing EHS Budget and Financial Records

Standard Operating Procedure for Preparing Environmental, Health, and Safety (EHS) Budget and Financial Records

1) Purpose

The purpose of this SOP is to establish a standardized process for preparing and managing Environmental, Health, and Safety (EHS) budgets and financial records, ensuring efficient allocation of resources, transparency, and compliance with financial policies.

2) Scope

This SOP applies to all departments involved in EHS budget planning, expenditure tracking, and financial record management, including EHS managers, finance teams, and department heads.

3) Responsibilities

  • EHS Manager: Oversee the preparation and implementation of the EHS budget and ensure accurate financial recordkeeping.
  • Finance Team: Assist with budget analysis, financial reporting, and compliance with organizational policies.
  • Department Heads: Provide input on EHS resource needs and track departmental expenses.
  • Procurement Team: Ensure alignment between EHS budget allocations and actual expenditures for safety equipment and services.
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4) Procedure

4.1 Budget Planning

  1. Identify Budget Requirements:
    • Conduct an assessment of EHS needs, including training programs, safety equipment, waste management, and compliance audits.

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  2. Estimate Costs:
    • Calculate projected costs for each EHS activity or program based on historical data, vendor quotes, and regulatory requirements.
  3. Prepare a Draft Budget:
    • Create a draft budget using the EHS Budget Template (Annexure 1), categorizing expenses by type and priority.
  4. Review with Stakeholders:
    • Share the draft budget with department heads and finance teams for feedback and revisions.
  5. Obtain Approvals:
    • Submit the finalized budget to senior management for approval.

4.2 Expense Tracking

  1. Implement Tracking Mechanisms:
    • Use financial tracking software or spreadsheets to record EHS-related expenditures against the approved budget.

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  2. Assign Budget Codes:
    • Allocate unique budget codes to different EHS programs or expense categories for ease of tracking and reporting.
  3. Monitor Spending:
    • Review expenditures monthly to ensure alignment with budgeted amounts and identify variances.
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4.3 Financial Reporting

  1. Prepare Monthly Reports:
    • Generate financial reports summarizing EHS expenses, variances, and remaining budget using the Financial Report Template (Annexure 2).

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  2. Analyze Variances:
    • Investigate significant deviations from the budget and document reasons, such as unexpected costs or savings.
  3. Submit Reports:
    • Share reports with EHS management and the finance team for review and discussion during monthly meetings.

4.4 Record Management

  1. Maintain Financial Records:
    • Store all financial documents, including invoices, receipts, and reports, in a centralized digital or physical repository.

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  2. Ensure Data Security:
    • Restrict access to financial records to authorized personnel and implement encryption for digital files.
  3. Retention Period:
    • Retain financial records for at least seven years or as required by legal and regulatory guidelines.
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4.5 Continuous Improvement

  1. Review Budget Performance:
    • Conduct annual reviews of budget performance to identify inefficiencies and improve future budgeting processes.

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  2. Update Procedures:
    • Incorporate feedback from stakeholders to refine budget preparation and financial recordkeeping practices.

5) Abbreviations, if any

  • EHS: Environmental, Health, and Safety

6) Documents, if any

  • EHS Budget Template
  • Financial Report Template
  • Invoice and Receipt Records

7) Reference, if any

  • ISO 14001 Environmental Management Standards
  • Financial Management Policies
  • Regulatory Guidelines on Budgeting for Safety Programs

8) SOP Version

Version: 1.0

Annexure

Template 1: EHS Budget Template

 
 
 Category Projected Cost Approved Budget Remarks 
 
 Training Programs ₹50,000 ₹45,000 Pending Management Approval

Template 2: Financial Report Template

 
 
 Month Category Budgeted Amount Actual Expenditure Variance 
 
 January Waste Management ₹20,000 ₹18,500 ₹1,500
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