Focus: Finance and Governance - Outlook - Strength via financial management

Alex Jacobs, director of the NGO financial management charity Mango.

What does the International HIV/Aids Alliance secretariat in Brighton have in common with ActionAid Kenya's office in Nairobi? They both employ teams of finance staff with different responsibilities from those most organisations would give them.

Instead of working on the corporate accounts, finance staff are employed specifically to strengthen the financial management of their partner organisations.

Both organisations pass a large proportion of their funds to partner organisations, on the basis that strong and sustainable local organisations can provide local solutions to local issues.

But both also recognise that growth can stretch an organisation's systems.

They know that many NGOs struggle with some aspects of financial management.

In 2005, the International HIV/Aids Alliance passed on about £15m - more than 60 per cent of its annual budget - to partner organisations in 24 countries. By working with these partners to strengthen their financial management, the alliance helps to ensure that their funds are used effectively, to develop long-term, sustainable organisations to fight HIV/Aids.

The alliance employs six staff in its field support finance team. They are managed within the finance and administration department, like corporate accountants. But their main duties are working with the programme team and staff in the alliance's field programmes, helping partners develop the skills they need to handle funds.

ActionAid Kenya spends 30 per cent of its annual budget on grants to grass-roots community-based organisations across the country and larger NGOs. It employs six capacity building accountants, to help all these organisations improve their financial management.

The capacity building accountants have training and mentoring skills as well as finance skills. They focus on helping people get to grips with financial management, rather than doing it themselves.

They are more like development practitioners with specialist finance knowledge than accountants. Their work depends on understanding organisations and creating supportive and trusting relationships with staff in them.

This may be a model that other NGOs can consider. Many organisations work with partners. The alliance and ActionAid's approach is a way of helping to tackle the financial management problems that often attend partnerships. It recognises that good financial management lies at the heart of effective programme implementation and at the heart of effective action.

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