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7/30/2019 Rituparna_1021006_end Term Project Ppt
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FINANCIAL ACCOUNTABILITYOF
NGOSIN INDIARituparna Roy
1021006
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REGISTRATION
Society registered under the Societies Registration Act
- Common purpose
- Minimum seven members at state level and eightmembers at India level
Charitable Trust- Trust is defined as an obligation annexed to the
ownership of property and arising out of confidencereposed in and accepted by the owner
Company, under Section 25 of the Companies Act
- Purpose of formation
- prohibited from payment of dividend to its members
- procedure for applying
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NGOSAND FOREIGN CONTRIBUTIONS
In recent years, rapid growth in the number of
NGOs worldwide
In Indiaapproximately 3.3 million NGOs (Singh,
2009)
Receive donations from national and international
organizations
Rapid increase in the amount of foreign
contributions received over the last 10 years
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TRENDSOVERLAST 10 YEARS
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SOME STATS..
20,088 associations out of 36414 associations in 2008-09reported receipt of foreign contributions amounting to Rs10,802.67 crores
Top recipient state was Delhi(Rs.2012.83 crore) followed byTamil Nadu(Rs.1649.27 crore) and Andhra
Pradesh(Rs.1244.21 crore) Top donor country was the US (Rs. 3433.30 crores) followed
by UK (Rs. 1,130.68 crores)and Germany(Rs. 1103.68 crore)
World Vision of India, Tamil Nadu was the highest receivingassociation( Rs.192.30 crores)
Highest amount of foreign contributions was used forestablishment expenses(Rs 5,022.21 crores) followed by ruraldevelopment(Rs. 2834.66 crores) and welfare of children(Rs2,303.60 crores)
Source: FCRA Annual Report 2008-09
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FINANCIAL ACCOUNTABILITY
No agreed definition of accountability as yet
Traditional ConceptsFormal Authority
3 issues need to be addressed
Accountable for what?Accountable to whom?
Accountable how?
Benefits from increased accountability
Different departments of Indian Government havedifferent interpretations of accountability
In this contextFinancial Accountability
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WHYACCOUNTABILITYISANISSUE?
Monitoring problem distance between donor and
beneficiary
Large amounts of funds attracted by the
organizations substantial underreporting
In 2008-09, returns have not been received by
16,326 organizations
Classification of utilization of funds often reported
under miscellaneous heads
Sector regulated by multiple laws and acts
Donors have been the most vocal commentators on
this issue EZE of Germany
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FOREIGN CONTRIBUTIONS REGULATION ACT (
FCRA)
Endeavour of Foreigners division bring in
transparency and accountability in the operations of the
act
Major objective to ensure funds are not diverted to
other uses Section 13 and rule 8(1) NGO needs to maintain a an
account for any foreign contribution received and a
record of how the contribution has been utilized
In 2006, FCRA online services online filing ofapplication for registration, prior permission, filing of
statutory returns, status enquiry etc
Major concern - substantial underreporting of funds
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ACCOUNTABILITY MEASURESIN PRACTICE
Certification Systems: Swiss GAAP PRC 21
adopted by International Committee of the Red
Cross and the World Wide Fund for Nature
Rating Systems: Foreign Aid Ratings ( grassroots
Org) , Worth Magazine
Codes of conduct: Codes of the Australian Council
for Overseas Aid (ACFOA 2000)18,Credibility
Alliance in India
Monitoring & Evaluation: Most widely used and
accepted
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ACCOUNTABILITY MEASURES CONTD..
Disclosure of statements and reports
Participation: process based approach
Social Auditing
Disclosure statements Evaluations
Participation
Codes of conduct
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SOMEPROBLEMSWITHACCOUNTABILITY
Fail to address an NGOs moral obligations
Prioritize certain relationships over others
Unrealistic/immeasurable goals
Can be disciplinary and controlling Cost and time dedicated to ensure accountability
product vs. process
- accountability gap
Limitations of increased stakeholder accountability
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INITIATIVESTAKENBYTHEVOLUNTARYSECTORTO
PROMOTEACCOUNTABILITYIN INDIA
Credibility alliance
Introduced in 2001 , registered in 2004
Consortium of voluntary org committed towardspromoting accountability and transparency of IndianNGOs through good governance
Norms divided into minimum norms and desirablenorms
Give India
Indias first online, web based donation service
Organizations may receive donations provided theymeet the norms set up by Give India
Annual review carried out of NGOs listed with it
Must meet standards established by the CredibilityAlliance
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INITIATIVESTAKENCONTD..
Guide Star India
Online platform for Indian NGOs to showcase their work
Initiative of CSIS India
A trust set up in 2009
3 pronged strategy of CSIS- Educate NGOs
- Create an electronic NGO database on a web based platform
- Connect with government
Partners Outstanding Annual Reports Awards
Initiative of CSO partners
Started in 2009
Annual Report as a tool to demonstrate accountability
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REASONSFORLOWPARTICIPATION
Lack of internet access, unreliable power supply
and language barriers
Low levels of communication
Training required with respect to listing,accreditation processes
Shortage of funding in capacity building
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INITIATIVESTAKENBYTHE GOVERNMENT
Planning Commission nodal agency for interfacebetween Government and the voluntary sector
Planning Commission put forth the National Policyon the voluntary sector in the year 2007
Create an enabling environment for NGOs Legitimately mobilize financial resources from India
and abroad
Identify systems so that the Government and the
voluntary sector may work together Encourage NGOs to adopt transparent and
accountable systems of governance andmanagement
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INITIATIVES TAKENBYTHE GOVERNMENT
Need for an alternate central law of registration for
the voluntary sector
Setting up of an independent, national level, self
regulatory agency
NGO partnership system launched by the Planning
Commission in July, 2009
Online platform profile, identification number,
details of existing NGOs
Allows NGOs to apply for grants and track status of
applications
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CONCLUSIONWHEREISTHEDEBATE
GOING?
No one single standard by which NGOs can be
judged
Questions of stakeholder prioritization,
accountability gap and time devoted to
accountability
Balance between short term vs. long term impacts
of accountability
Prevalence of accountability mechanisms need to
be addressed
Maximize benefits of accountability to all interested
parties
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Thank You!!