Audit of Non-Governmental Organisations Finacial Reports
Lots of non-governmental organizations have their activities in Ukraine. Majority of them receive finance from so called donors. Herewith, as usual every donor requires submitting reports on target use and amount of funds spent. In fact, this means that the organization has to provide documented evidences that the money covered by the grant were spent for aims approved for them without override of budget or ineligible costs resulting in positive interim or final result.
Every year Ukraine receives more and more funds from the international organizations for civil aims such as democracy development, health security, struggling with corruption and so on. This means that the question of compliance of non-governmental organization’s activities with the requirements of donors is becoming more and more relevant.
Audit of financial statements decreases risks for donor: ordering it before starting the cooperation the donor will receive information whether the activities of the organization are transparent and if the donor can trust it.
For the non-governmental organization, in turn, it is important to provide confirmation of adequacy and sufficiency of internal control process established in the organization to the donor.
Moreover, after the project’s finish the donor requires submitting a report and in certain circumstances such a report should be confirmed by the auditor. Successful passing through the audit of financial report and receiving unmodified auditor’s report is an additional guarantee that the donor will accept all the expenditures and will consider the possibility of providing new grant for future aims and projects.
One of the types of non-governmental organization’s financial reports for which the donor may require receiving Auditor’s report is project’s financial report. Its aim is to provide assurance for every expenditure item, to compare them with the project’s budget and in the result to receive an auditor’s report on compliance of project’s financial statement to requirements of the grant agreement (and to provide recommendations on the elimination in case any deviations were discovered).
Key Requirements to Auditors
Donor’s basic requirement for the audit company is to be registered in accordance with the law in Ukraine.
Specific requirements are as follows:
- At least 5-year experience in audit of non-governmental organisations.
- Accreditation (being listed in the special shortlist) with a certain donor.
- Being a part of a reputable international network of accounting and audit companies.
- Being a member of the International Federation of Accountants (IFAC).
The List of International Donor Organisations and Agencies
During their more than 10-year practice of audit in non-governmental organizations the specialists of our company verified their reports within the framework of implementation of projects financed mostly by international donors such as:
- The Global Fund to Fight AIDS, Tuberculosis and Malaria
- The Elton John AIDS Foundation
- International Organization for Migration
- Swedish International Development Cooperation Agency (Sida)
- Swiss Confederation
- Royal Danish Ministry of Foreign Affairs
- Swiss Agency for Development and Cooperation (SDC)
- European Commission
- World Bank (IBRD)
- National Democratic Institute for International Affairs (USA)
- Danish International Development Agency (DANIDA)
- European Wergeland Centre (Norway)
- Federal Republic of Germany
- Ministry of Foreign Affairs of Canada
- European Endowment for Democracy
- Commonwealth Office of the Government of the United Kingdom of Great Britain and Northern Ireland
- Robert Carr civil society Networks Fund (RCNF)
- Global Network of People living with HIV
- The Rotary Foundation
- Caritas Germany (DCV)
- Department for International Development of Government of the United Kingdom of Great Britain and Northern Ireland (DFID)
- The Government of Japan
- The Danish Family Planning Association / Sex & Samfund
- Caritas Internationalis Vaticano
- Mennonite Economic Development Associates
- The Royal Norwegian Ministry of Foreign Affairs
- International Development Law Organization (IDLO)
- Federal Foreign Office funds (Germany)
- Ministry of Foreign Affairs of Switzerland
- Ministry of Foreign Affairs of Denmark
- The Worldwide Network of People Living with HIV (GNP +).
We have conducted audit of both – project’s financial statements and general purpose financial statements – for more than 70 clients. Among then there are names of large non-governmental organizations which in their turn are donors for smaller ones: “Renaissance” Foundation, “All-Ukrainian Network of People Living with HIV/AIDS”, ISAR “Ednannia”, International Organization for Migration and others.
Many donors have certain requirements for an audit company as well. Having a membership in international network may be among them. UHY Prostor as a member of international network UHY International completely complies with such requirement.