Focus: Finance and Governance - Outlook - Let beneficiaries see the figures too

Alex Jacobs, director of the NGO financial management charity Mango

A year after the launch of Mango's Who Counts? campaign, two new case studies show how financial reporting to beneficiaries improves the impact of aid agencies.

The campaign encouraged voluntary organisations to provide financial reports to their beneficiaries. It showed how beneficiaries use this information to ensure that funds are spent on their real needs, increasing the quality of the work of NGOs.

Tearfund tested the concept in Spin Boldak, a town on the border between Afghanistan and Pakistan with a large refugee population.

To help integrate refugees with the local population, Tearfund funded the renovation of a local school. But after six classrooms were completed, it was obvious that they were built to a higher specification than was originally planned - if continued, this would have exhausted the budget.

Tearfund's project manager stopped work to review the situation, but the school authorities became suspicious that Tearfund would not fulfil its commitments. They would allow work to restart only if all the other classrooms were built to the same high standard.

In this position, Tearfund decided to share financial information about the project with the school. The community, which distrusted NGOs as a result of previous bad experiences, saw how much money was available. A compromise was reached and work restarted. In addition, the school authorities challenged some of the amounts spent on materials and uncovered a case of fraud by a member of staff involved in the procurement process.

By providing the financial information to beneficiaries and their representatives, Tearfund improved relations between project staff and school authorities, improved the security of project staff in an unsafe environment and uncovered fraud.

The refugee charity Ockenden International has also piloted the idea of providing financial reports to beneficiaries in Pakistan, Afghanistan and Iraq. It reports that this "had a positive impact on the relationship with our beneficiaries, who felt we were displaying both honesty and respect for them - particularly in areas where corruption is high".

As a result, Ockenden staff have been able to work more effectively to repair houses in Afghanistan and support schools in refugee camps in Pakistan.

For example, it has enhanced the sustainability of their work. They said that "through an open discussion of what money was needed for schools to operate, communities better understood how they could help their schools carry on running. Since this exercise, communities have increased their contributions to their schools, both financially and in kind."

These case studies show that concrete benefits come from financial reporting to the people you work to help. It is not always easy, but NGOs should routinely do it unless there are specific reasons not to. It strengthens relationships with communities and increases the impact of NGOs' work.

More details are available at www.whocounts.org and www.mango.org.uk.

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