Evaluation of Good Financial Health Management Practices and its contribution to Program Implementation Rate for Small NGOs Supported by Donors in Malawi
Financial health management practices involves the
management of the six key variables according to this research work which
includes budgeting and planning, accounting system, internal control, financial
reporting, grant management and staffing. Most nongovernmental organizations
(NGOs) do not manage these variables and this has been a major obstacle to their
programs implementation rate.
The study evaluates the effects of financial health
management practices on implementation rate for NGOs. The study utilized a
diagnostic research design and it’s a single case study targeted Malawi Girl
Guide association (MAGGA) one of the NGO listed and registered in Malawi. Data
was obtained through questionnaire and from document analysis of consolidated
financial reports of years ending December: 2010, 2011, 2012 and 2013. Both
qualitative and quantitative analyses were carried out on the data to determine
the relationships between components of financial health management practices
and the program implementation rate of the NGO.
The study established that financial health management
practices was strongly related to high implementation rate. Implementation rate
of an NGO depends upon effective financial health management practices. Furthermore,
contrary to the expectation of the researcher, the research has further
established that donors also contribute to poor implementation rate by late
funding the NGOs supplemented by lack of program monitoring visits, spot check
and lack of capacity building for implementing NGOs. These are the major
constraints the NGOs face when implementing donor funded programs. The study therefore
recommended that NGOs should focus on strengthening financial health management
practices and encourage donors to disburse funds on time and make sure to carry
out assurance activities like program monitoring, spot check visits, auditing
and capacity building to minimise financial risks.
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