The Role of Accounting and Financial Systems on Evaluating and Improving the Performance of Non-Governmental Organizations (NGOs) Working in Sudan (Comparative study)

Abstract

This Study intended to review and compare the accounting and financial system of National and International NGOs working in Sudan to evaluate National NGOs ability on accessing donor funds and recommend improvement for NNGOs governance and management involvement; financial system and effective monitoring and evaluation to their accounting and financial system in order to access more funding and contribute to elevation of poverty. The study explained the importance of the study as to assessing and identifying the root causes of weak accounting and financial system for National NGO and recommended a solution to address the root causes of weakness and enable NNGOs to access more donor fund and manage to contribute positively to elevating poverty. The main objectives were to review and compare current accounting and financial systems for both National and International NGO and to evaluate the role of the system used by NGOs working in Sudan; identify and highlight the weakness of accounting and financial system by reviewing and analyzing current problem facing NGOs in regard of accounting and financial system; evaluate and recommend strengthen methods of NGO’s accounting and financial system; and recommend efficient, cost effective and use friendly accounting and financial system that will improve the performance of NGOs. Methodology and research procedures deductive approach is used for determining the research problem; inductive approach is used for testing the hypotheses; Comparative approach is used to compare INGOs and NNGO data; and descriptive analysis is used to analyze the questionnaire data for assessing performance of NGOs. Hypotheses were effective NGOs’ governance will improve accounting and financial system; strong accounting and financial system will improve NGO’s ability to access more funding than NGOs with weak system; presence of evaluation methods to assess NGOs accounting and financial system will increase NGOs access to more funding. The data have been analyzed by the Statistical Package for the Social Sciences (SPSS) and Microsoft Excel. IV Showing and discussing the result and testing hypothesis which explain the relation between National and International NGOs and NGOs with strong and weak system reveal that effective NGOs’ governance will improve NGO accounting and financial system with average of 86% INGOs to 62% NNGOs; Strong accounting and financial system improve NGOs ability to access more funding than NGOs with weak system with average of 91% for INGOs and 56% to NNGOs; Presence of evaluation methods to assess NGOs accounting and financial system will increase NGOs’ ability to access more funding with average of 91% INGOs and 61% NNGOs. The most important findings are • National NGOs in Sudan lack effective system for governance, accounting and financial system; effective audit and review and monitoring to their accounting system. • National NGOs doesn’t have their own resource and have limitation on accessing donor fund which limits their ability to attract qualified staff, acquire modern equipment and implement effective systems. • Major International funding (Excluding UN, Embassies funding some of Official Development Assistance) was earmarked to their International NGO as per donor regulations. These include donors such as USAID, EC, CIDA, AUSAID, JICA and DFID. The most important recommendations are • National NGOs have to establish effective governance that has independent and effective Board of directors, audit committee, and maintain governing documents of the board. • National NGOs have to establish effective financial management system that is consistently followed overtime and in all office. • National NGOs to seek long term, effective and sustainable partnership with International NGOs and United Nation agencies which goes with their vision and long term planning. These conclude that NGOs governance, accounting and financial system has positive relation on NGO’s funding accessibility. Hence validate the three hypothesis.