1
Audit of Grants Awarded to GOAL in 2009
Under Irish Aid’s Multi Annual Programme Scheme II
and
Emergency and Recovery Funding Schemes
Evaluation and Audit Unit
December 2011
2
Table of Contents
1. Executive Summary ....................................................................................................................................................... 3
1.1 PURPOSE OF THE AUDIT ......................................................................................................................................................... 3
1.2 BACKGROUND AND TERMS OF REFERENCE ................................................................................................................................. 3
1.3 METHODOLOGY ................................................................................................................................................................... 4
1.4 SUMMARY FINDINGS ............................................................................................................................................................. 4
2. Introduction .................................................................................................................................................................. 8
2.1 AUDIT CONTEXT ................................................................................................................................................................... 8 2.1.1 Background and Terms of Reference ....................................................................................................................... 8 2.1.2 Organizational Profile .............................................................................................................................................. 9 Table 1: GOAL funding Sources 2009 and 2010 (Audited Financial Statements) ........................................................... 10
3. Findings and Recommendations .................................................................................................................................. 10
3.1 GOVERNANCE AND ORGANIZATIONAL STRUCTURE .................................................................................................................... 10 3.1.1 Governance ............................................................................................................................................................ 10 3.1.2 Senior Management .............................................................................................................................................. 11 Table 2: Staff Numbers 2007-2010 ................................................................................................................................. 11
3.2 RISK MANAGEMENT............................................................................................................................................................ 12
3.3 STRATEGIC PLANNING ......................................................................................................................................................... 13
3.4 PROGRAMME CYCLE MANAGEMENT ...................................................................................................................................... 13 3.4.1 Programme Framework ......................................................................................................................................... 13 Table 3: Maps Funding 2007-2010 by Country ............................................................................................................... 14 3.4.2 Monitoring and Evaluation (M&E) ......................................................................................................................... 15 Table 4: MAPS Funding 2007-2010 by Sector ................................................................................................................. 15 3.4.3 Management Information Systems ....................................................................................................................... 15
3.5 INTERNAL FINANCIAL CONTROLS AND ACCOUNTING SYSTEMS ..................................................................................................... 16
3.6 MANAGEMENT OF RELATIONSHIP WITH IMPLEMENTING PARTNERS .............................................................................................. 17
3.7 COST STRUCTURE ............................................................................................................................................................... 18 Table 5: MAPS Funding Components .............................................................................................................................. 18
3.8 FUNDING AND RESERVES ...................................................................................................................................................... 19 3.8.1 Funding Profile ....................................................................................................................................................... 19 Table 6: Analysis of Funding Sources .............................................................................................................................. 19 Table 7: MAPS and Co-Funding 2007-2010..................................................................................................................... 20 Table 8: Unrestricted Reserves (Audited Financial Statements)..................................................................................... 21 3.8.3 Restricted Reserves ................................................................................................................................................ 21
3.9 AUDIT .............................................................................................................................................................................. 22 3.9.1 External Audit ........................................................................................................................................................ 22 3.9.2 Internal Audit ......................................................................................................................................................... 22
4. Conclusion ................................................................................................................................................................... 22
Appendices ...................................................................................................................................................................... 24
APPENDIX 1: TERMS OF REFERENCE ............................................................................................................................................. 24
APPENDIX 2: SUMMARY OF RECOMMENDATIONS AND MANAGEMENT RESPONSES. .............................................................................. 29
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1. Executive Summary
1.1 PURPOSE OF THE AUDIT
The purpose of the audit is to:
1. Independently examine and report whether Irish Aid funds have been used to support the programme
objectives as agreed in partnership with GOAL; if expenditure has been incurred in accordance with
the terms and conditions of the agreements between Irish Aid and GOAL and has been accounted for
in a proper manner;
2. Examine and report, from the viewpoint of overall accountability, as to the adequacy of the
governance, management and internal control systems of GOAL; and
3. Assess compliance with funding requirements and ratios of Multi Annual Programme Scheme II
guidelines.
1.2 BACKGROUND AND TERMS OF REFERENCE
This audit took place in the context of the Multi Annual Programme Scheme (MAPS) II funding
framework for NGOs 2007-2011, and was carried out between March and July 2011 by the Evaluation
and Audit Unit of the Department of Foreign Affairs and Trade (Terms of Reference are attached in
Appendix 1). The work focused on the current systems and processes in operation and the financial
information for the calendar year 2009 (GOAL‟s latest available audited financial statements at the time
of audit) and included work at GOAL Headquarters in Dublin plus two selected country operations (North
Sudan, Malawi). GOAL‟s 2010 audited financial statements were issued on 30th
September 2011 and
shared with Irish Aid on 6th
October.
Following on from this work, a meeting to discuss the preliminary audit findings with GOAL
management was held on 26 July 2011. GOAL was invited to respond to issues raised during this meeting
by providing the audit team with any additional documentary evidence prior to preparation of the first
draft report. A further email reminder of this invitation was sent to GOAL on the 28th
August 2011. Some
additional audit documentation was provided at a meeting on the 6th
October 2011. The first draft of this
audit report was then issued to GOAL for comment and management response on the 25th October 2011.
The draft report with partial management response was received from GOAL on the 11th
November 2011.
The draft was subsequently sent back to GOAL on the 28th
November 2011 with a request for completion
of management response by the 5th
December 2011. After a number of requests, this was finally received
on the 12th
December 2011.This management response is included in Appendix 2.
4
1.3 METHODOLOGY
The audit methodology conforms with the Irish Aid‟s Audit Approach for Civil Society Organizations
funded under the MAPS Scheme1. Accordingly, following assessment of the quality of the external and
internal audit functions, substantial reliance was placed on these audit assurance mechanisms. Audit work
primarily comprised review and analysis of relevant documents plus interviews with key sources in
GOAL (including Board members, CEO and senior management team, internal auditor, plus relevant
managers and staff in the two country programmes visited) as well as outside the organization (personnel
in Irish Aid‟s Emergency and Recovery and Civil Society Sections, GOAL‟s external auditors at HQ and
external auditors at country operations visited).
The scope of the audit was limited by the unavailability of certain documentation requested by the audit
team within the timescale of the audit. This includes terms of reference for the Board and its sub-
committee, Board agenda for meetings, minutes of meetings of the main Board, a copy of the report on
the internal review of security in the field and information on succession planning for the Board and
senior management.
1.4 SUMMARY FINDINGS
Over the MAPS II period GOAL management has made progress in developing many aspects of the
programming and organizational systems. An appropriate structure is in place for programming MAPS II
funds, and a monitoring and evaluation system including baselines and indicators has been rolled out in
the field. A roving technical team of sector and process experts provides key capacity and quality control
over many aspects of programming and acts as an important link between HQ and field operations.
Financial systems include a comprehensive procedures manual and a single accounting software
application (Sage) is used throughout the organization, plus effective field budget control and financial
reporting tools (in the form of the Donor Status Report and Budget Management Tool). While this report
includes some further suggested improvements, these are intended to build on the solid base developed in
recent years.
GOAL is governed by a Board of Directors. The Board has no specific terms of reference defining its role
or a self-development policy (i.e. ensuring that the Board comprises or has access to the appropriate range
of experience and expertise).There was no evidence of a delegation and oversight relationship with
management. There is one Board Subcommittee - Audit and Finance2 (also operating without a Terms of
Reference). In 2009 the Board was comprised of 9 members, though this had reduced to 5 during the time
of this audit3. The Board is comprised primarily of professionally qualified Irish businessmen and appears
to function relatively informally. The Board reportedly meets 6-8 times per annum without, it appears, a
pre-set agenda. In terms of profile and focus, the Board has much experience in the area of business
1 Irish Aid, Evaluation and Audit Unit, June 2008
2 Comprising one Board member and three external experts, all of whom are professionally qualified accountants, but none
of whom have development expertise or experience. 3 Of whom 4 subsequently resigned on 22
nd August 2011 and were immediately replaced with 6 new members (per Audited
Financial Statements for the year end 31 December 2010, issued 30 September 2011).
5
management, though lacks technical expertise or experience in the area of development. Whilst the Board,
through its Audit & Finance Committee, puts a strong focus on financial management and cost issues, it
appears less actively engaged in other critical governance areas such as organizational risk assessment and
strategic planning, which are delegated to management. Due to the limitation of scope in this audit work it
is difficult to assess whether the Board undertakes, or has the necessary skills‟ profile to either lead such
processes or critically review management proposals from a development perspective. This raises
questions regarding the longer-term sustainability of the organization as a whole, including structures and
systems for accountability of public funds.
While the Board profile appears capable in the area of business management (particularly financial
management), the scope of relevant skills could be broadened to include for example development
expertise and experience of the international aid context in which GOAL operates. On this basis, under
Audit Purpose 2 below, we recommend that the Board‟s role and composition be strengthened so as to
enhance decision-making and oversight, and ultimately better assure accountability at the highest level of
the organization. GOAL‟s internal financial control and accounting systems are generally appropriate and
effective. These include a capable internal audit function, and an extensive external audit approach (HQ
and all field operations are audited annually, plus donor specific audits may be undertaken). On this basis,
we report under Audit Purpose 1 that in our opinion Irish Aid funding in the period under review has
been used to support the programme objectives as agreed in partnership with GOAL, expenditure has
been incurred in accordance with the terms and conditions of the agreements between Irish Aid and
GOAL (with one minor exception as set out in Section 3.7 of this report), and has been accounted for in
the proper manner.
With regard to Audit Purpose 2 we find that the management and internal control systems are adequate
for operational purposes and note that implementation has been overseen by the Board of Directors
(through its Finance and Audit Sub-Committee). However, we have found less evidence of effective
Board engagement and oversight with regard to other aspects of the governance function, as follows:
a) Setting the organizational funding profile;
b) Guiding strategic planning, and;
c) Establishing the senior management structure.
Regarding the organizational funding profile, over the MAPS II period the following trends are
noteworthy (please see Tables 6 and 7 of this report for further detail):
Development programming has become proportionately less significant, in comparison with
emergency operations. For example, emergency expenditure amounted to 27% of total charitable
expenditure in 2007, 37% in 2008 and almost 50% in 2009 and 2010;
The proportion of GOAL and 3rd
party donor investment in co-funding MAPS programmes has
diminished, and;
6
Voluntary unrestricted income is declining4.
Over the period GOAL has become more donor dependent, and emergency operations have grown in
significance compared with development programmes. Diminishing unrestricted voluntary funds restrict
the Boards autonomous capacity to act independently and invest in GOAL‟s own priority objectives or
programmes. These trends potentially undermine the sustainability of existing development programmes
and quality processes, particularly those which have been funded under MAPS II to date.
With respect to strategic planning, many of the developments in systems and programmes achieved
during the MAPS II period (and outlined at the start of this section) were defined within the Strategic Plan
2007-20115. The gains achieved are laudable, but it is noted that the plan appears to have taken shape in
the context of a joint benchmarking process undertaken between GOAL management and Irish Aid
(underpinned by the MAPS funding framework) rather being driven by the GOAL Board as an important
institutional exercise per se.
In view of the limitation of scope set out in methodology section 1.3 above, the audit was unable to
establish the level of Board engagement in setting the agenda and parameters for the strategic planning
process. Consequently this raises uncertainty as to the sustainability of these improvements as core
organizational priorities, particularly in the context of the funding trends outlined above.
The senior management group has generally performed effectively both in running operations and
developing organizational systems over the MAPS II period. However, the structure at senior
management level is unclear (due to posts being described as „acting‟), with the creation in 2009 of two
new positions under the CEO which at the time of the audit were still acting. A clear strategy driving
these changes at senior management level, and the stability of the current structure is not evident.
Audit Purpose 3 is closely related to the voluntary funding flows discussed above. Funding proportions
have hovered near the threshold of the MAPS II liquidity ratio guideline6, without a discernible trend over
the MAPS period to date. It is not yet clear whether GOAL will be technically compliant with the
liquidity ratio over the MAPS II period, but the more important issue to which the ratio relates is GOAL‟s
capacity to have reasonable levels of unrestricted reserves (GOAL‟s own funds) available to invest in
development (including MAPS funded) programmes and processes. As noted above, this is uncertain.
Within these broad findings other selected matters arising under the scope of the audit are as follows:
4 Voluntary unrestricted income was 12.9% of total income in 2007, compared with 8.25% in 2010, and declined 20% in
monetary terms over that period. 5 At the time of this audit the process of planning a strategy for 2012 and beyond was at a nascent stage, with little detail
available regarding the process or parameters. 6 Whereby participating agencies are expected to generate 30% of their total income in the form of voluntary funds raised in
Ireland or demonstrate a capacity to do so incrementally over the period of MAPS II. In practice this ratio has been calculated as total voluntary income (restricted and unrestricted) as a proportion of total voluntary income plus development grant income. GOAL ratios were compliant but declining in 2007 and 2008, and fell below the threshold in 2009, but increased again in 2010 (see Table 6 of this report).
7
The scale and nature of engagement with local NGO partners in the field does not appear to match
expectations under the MAPS Guidelines. For example the 2010 audited financial statements show that
approximately 8% of total charitable expenditure was sub-granted to local NGO partners in that year. In
addition, an external evaluation7 found that the relationships with NGOs may tend toward instrumental
rather than long term capacity building developmental objectives. Although a tracking database is
maintained, disaggregated financial information (showing investment in partner capacity building
separate from programming etc.) was not available.
A Monitoring and Evaluation system including standard baseline and performance indicators has been
developed and implemented in the field, and data outputs are now being produced regularly. However, the
application of Results Based Management techniques in using the data reported for comparative analysis
and programme decision-making is not yet clear.
Many of the potential improvements to the financial systems and reporting, Management Information
System, and Human Resources systems set out in this report had also been identified by GOAL
management. We recommend that they proceed with plans to implement the systems upgrades within an
appropriate timeframe.
7 Intrac 2010
8
2. Introduction
2.1 AUDIT CONTEXT
2.1.1 Background and Terms of Reference
The audit took place in the context of the Multi Annual Programme Scheme (MAPS) II funding
framework for NGOs 2007-20118. The audit work, which was carried out by Evaluation and Audit Unit
of the Department of Foreign Affairs and Trade between March and July 2011, focused on the current
systems and processes in operation and the financial information for the calendar year 2009 (GOAL‟s
latest available audited financial statements at the time this audit took place) and included work at GOAL
Headquarters in Dublin plus two selected country operations (North Sudan, Malawi). Following this, a
meeting to debrief with GOAL management on the preliminary audit findings was held on 25 July.
GOAL‟s 2010 audited financial statements were finalized in September and shared with Irish Aid on 6th
October. The scope of the audit per Terms of Reference (Appendix 1) is as follows:
Governance and organizational structure
Risk management
Strategic (including financial) planning
Programme cycle management (including Monitoring and Evaluation)
Internal financial controls and accounting systems
Management of relationship with implementing partners, where applicable
Cost structure
Funding and Reserves
Audit – external and internal
The audit methodology conforms to the Terms of Reference and Irish Aid‟s Audit Approach for Civil
Society Organizations funded under the MAPS Scheme9. Accordingly, following assessment of the
quality of the external and internal audit functions, substantial reliance was placed on these audit
assurance mechanisms. Audit work primarily comprised review and analysis of relevant documents plus
interviews with key sources in GOAL (including Board members, CEO and senior management team,
internal auditor, plus relevant managers and staff at the two country operations visited) and outside the
organization (Irish Aid Emergency and Recovery Section and Civil Society Section personnel, external
auditors at HQ and country operations visited).
Following on from this work, a meeting to discuss the preliminary audit findings with GOAL
management was held on 26 July 2011. GOAL was invited to respond to issues raised during this meeting
by providing the audit team with any additional documentary evidence prior to preparation of the first
8 Irish Aid, MAPS II Guidelines for NGOs Final Working Guidelines, 10 March 2006
9 Irish Aid, Evaluation and Audit Unit, June 2008
9
draft report. A further email reminder of this invitation was sent to GOAL on the 28th
August 2011. Some
additional audit documentation was provided at a meeting on the 6th
October 2011. The first draft of this
audit report was then issued to GOAL for comment and management response on the 25th October 2011.
The draft report with partial management response was received from GOAL on the 11th
November 2011.
The draft was subsequently sent back to GOAL on the 28th
November 2011 with a request for completion
by the 5th
December 2011. After a number of requests, this was finally received on the 12th
December
2011.The management response is included in Appendix 2.
The scope of the audit was limited by the unavailability of certain documentation requested by the audit
team within the timescale of the audit. This includes terms of reference for the Board and its sub-
committee, Board agenda for meetings, minutes of meetings of the main Board, a copy of the report on
the internal review of security in the field and information on succession planning for the Board and
senior management.
We would like to express our appreciation to the Board, managers and staff of GOAL, as well as their
auditors, for their assistance. Personnel encountered at all levels of the organization demonstrated
professional competence and a genuine commitment to their work. We would also like to thank our
colleagues at Irish Aid Civil Society and Emergency and Recovery Sections for their cooperation in the
planning and implementation of this audit.
2.1.2 Organizational Profile
GOAL was founded as a Trust in 1977 and describes itself as an international humanitarian organization
dedicated to alleviating poverty in underdeveloped countries. In 1996 the Trust was transferred to a
Company limited by guarantee (5 members) registered in Ireland with charitable status. The GOAL group
also comprises 3 subsidiaries: GOAL International (UK company registered as a charity); GOAL USA
Fund (non-profit corporation); and GOAL UK (dormant trust).
With a budget of approximately €65 million per annum, the agency provides emergency and development
assistance in 12 countries (of which 9 in Africa). GOAL employs some 50 staff at Headquarters, plus 100
„GOALies‟ and 2,000+ national staff in the field. Table 1 below sets out the funding profile for 2009
(latest audited financial statements available during the time this Irish Aid audit work was performed) and
2010.
10
Table 1: GOAL funding Sources 2009 and 2010 (Audited Financial Statements)
Income Source 2009
%
2009
€,000
2010
%
2010
€,000
Irish Aid MAPSII 21% 14,230 19% 14,230
Irish Aid Humanitarian Funding 3% 2,174 4% 2,649
Other Donor Funding (Emergency and
Development)
32% 20,835 45% 33,099
Donations-in-Kind10 31% 20,204 12% 9,006
Voluntary and Other Income 13% 8,407 20% 14,443
Total Income All Sources 65,850 73,427
3. Findings and Recommendations
3.1 GOVERNANCE AND ORGANIZATIONAL STRUCTURE
3.1.1 Governance
GOAL is governed by a Board of Directors. The Board has no specific terms of reference defining its
role, self-development policy (i.e. ensuring that the Board comprises or has access to the appropriate
range of experience and expertise), delegation and oversight relationship with management etc. There is
one Board Subcommittee -Audit and Finance11
- also operating without Terms of Reference). In 2009 the
membership was 9, reducing to 5 during the time of this audit12
.
The Board is comprised primarily of professionally qualified Irish businessmen and appears to function
relatively informally. Minutes were not made available, but it reportedly meets 6-8 times per annum
without, it appears, a pre-set agenda. In terms of profile and focus, the Board may be considered relatively
strong on business management, while weaker in the area of development expertise or experience. For
example, through the Audit & Finance Committee, the Board puts a strong focus on financial
management and cost issues, but it appears less actively engaged in other critical governance issues such
as organizational risk assessment and strategic planning, which are delegated to management.
Referring to the limitation of scope outlined in methodology section 1.3, it is difficult to assess whether
the Board undertakes, or has the necessary skills‟ profile to either lead such processes or critically review
10 Donations-in-kind are those donations that are goods and services rather than money (or cash).
11 Comprising one Board member and three external experts, all of whom are professionally qualified accountants, but none
of whom have development expertise or experience. 12
Of whom 4 subsequently resigned on 22nd
August 2011 and were immediately replaced with 6 new members (per Audited Financial Statements for the year end 31 December 2010, issued 30 September 2011).
11
management proposals from a development perspective. This may reduce the longer-term sustainability of
the organization as a whole, including structures and systems for accountability of public funds.
Recommendation 1: that the Board considers introducing:
a) A more formal and transparent modus operandum (e.g. Terms of Reference, pre-set agendas etc.) and;
b) Policies on board composition and self-development aimed at strengthening the range of skills and
experience either comprised within the Board or to which it has access.
3.1.2 Senior Management
In terms of structure, the Senior Management Team is headed by GOAL‟s founder and Chief Executive
Officer (CEO) John O‟Shea, to whom five departmental heads were reporting in 2009. Since then there
have been several adjustments to the structure, including the creation in 2009 of two senior acting
positions under the CEO – Chief Operations Officer (COO) and Head of Programmes (HoP) - overseeing
the rearranged departments (except Fundraising which continues to report directly to CEO)13
. A clear
strategy driving these changes at senior management level, and the stability of the current structure (under
which the COO and HoP posts remain acting) is not evident.
Recommendation 2: that a stable and sustainable senior management structure is put in place.
Regarding performance, operational management appears capable and competent, and the senior
management team has overseen progress on many of the systemic and process improvements set out in
the Strategic Plan 2007-11. GOAL management have used the benchmarking process undertaken with
Irish Aid, together with the MAPS framework and funding components14
, to positive effect in developing
management and programming systems, quality processes and organizational capacity. Field management
systems and personnel generally appear satisfactory with appropriately experienced, motivated and
qualified staff. They are supported by a roving team of technical experts which play a key role in linking
HQ and the field including programme quality control, roll-out of policy initiatives, training and capacity
building. Significant staff reductions which occurred due to funding cuts in 2009 have largely now been
replenished, as shown by the table below.
Table 2: Staff Numbers 2007-2010
Staff Numbers 2010 2009 2008 2007
HQ (Programme Support, Mgt.) 45 36 46 40
HQ (Fundraising) 8 8 11 11
Field (GOALies) 113 98 147 133
Field (National) 2,755 2,280 2,560
13 GOAL HQ organization chart 2009 and 2011 attached in Annexes.
14 See Table 4: MAPS funding components.
12
In common with many aid NGOs, regular turnover of international field personnel is normal. However it
is the practice within GOAL that almost all field staff are retained on one-year contracts; that being said,
it is noted that many stay longer (typically 2-3 years) and rotate between posts and/or locations within the
organisation. In addition and as required some of the roving experts may also fill temporary field
vacancies.
The organization-wide HR function at HQ is currently under development. The HR system could be
improved to form part of the management information systems, by more efficiently capturing
performance appraisal, training (received, required, requested), timesheet data (including leave), and other
relevant information at both HQ and field sites which could assist in decision-making and the elaboration
of a staff development strategy. Similarly, to form a resource pool of potential recruits for future
vacancies, the establishment of a database of job applicants (qualifications, language skills, experience
etc.) is being considered. At the time of the audit work the HQ post of Human Resources Manager had
been vacant for some time. Recruiting for this post is a pre-requisite for proceeding with HR systems
development.
Recommendation 3: that a Human Resources manager is recruited as soon as possible to oversee and
strengthen the function and that the Human Resources systems are strengthened and improved as planned,
within an appropriate timeframe.
3.2 RISK MANAGEMENT
Analysis of institutional risk is evident in the Strategic Plan 2007-2011, and the annual Directors Report
refers to (mostly financial) risks, but otherwise there is a lack of evidence of regular comprehensive risk
review prior to 2009.
In that year two staff members were kidnapped in Sudan and released after lengthy negotiations15
. In
response, GOAL conducted an internal review of security in the field. Though requested by the audit
team, the report was not made available. However, there is evidence that security procedures and
capacity have been strengthened (dedicated professional security staff, appropriate procedures and
equipment, staff training, coordination etc) both globally and at specific field operations (as appropriate to
risk level).
Also in 2009, in response to a serious fraud in Malawi a comprehensive review of internal control systems
at HQ and field was undertaken, and the recommendations have since been implemented throughout the
organization (systems, manuals, staff orientation and training etc.). From 2010, the Roving Internal
Auditor has been tasked with working with country teams to develop and maintain risk registers (though a
risk register is not developed or maintained at HQ level for the organization as a whole).
Management response to these incidents demonstrates a commitment to address risks and strengthen
mitigation procedures, and progress has been made to institute a regular risk review process across the
15 Negotiations involved staff from the Department of Foreign Affairs and Trade.
13
organization through the internal audit system. However, the current approach appears to be primarily
finance led. As a result, there may be less active engagement by non-finance field managers, with the
result that other risks factors are not fully considered or addressed.
Risk management is a strategic issue and should be an integral part of the institutional culture. As such, it
might be expected that the governing Board would be visible in leading this process and driving it as a
priority down through the organization. At present this is not evident. Funding patterns and in particular
the declining trend in voluntary unrestricted income, which also represents a serious potential risk to the
organization is dealt with separately in Section 3.8 of this report.
Recommendation 4: that the process of risk management is further strengthened to ensure full buy-in and
follow-up by both the Board and all areas of management at HQ and in the field.
Recommendation 5: that an organization-wide risk register is developed and maintained at HQ (i.e.
reviewed regularly by senior management and at least annually at Board level).
3.3 STRATEGIC PLANNING
It would appear that the impetus driving preparation of the Strategic Plan 2007-11 was the bench-
marking16 process undertaken jointly with Irish Aid in order to access MAPS II funding. As such, the plan
reflects many aspects of both the MAPS framework and the benchmarking exercise and as noted above,
management have effectively overseen implementation in many areas.
Due to the limitation of scope referred to in section 1.3, the role of the Board in the strategic planning
process, in terms of driving the agenda and setting broad objectives and parameters is not apparent. Rather
the programme, process and internal capacity components appear to have been driven by internal
management through drivers such as the bench-marking process and MAPS II funding components. The
extent to which these investments in the capacity of quality control and other systems, within the
organization, under the Strategic Plan are core attributes (i.e. recognized as long-term organizational
standards determined, maintained and overseen by the governing body), is not clear. The lack of clear
evidence of Board engagement in the area of strategic leadership raises uncertainty as to the sustainability
of the gains made (and thereby Irish Aid‟s investment in programming and capacity building).
At the time of the audit, plans to develop a strategy for 2012 and beyond were being discussed at GOAL
but specific details of the process or planning parameters were not yet available.
3.4 PROGRAMME CYCLE MANAGEMENT
3.4.1 Programme Framework
GOAL‟s Strategic Framework 2007-11 and the proposal and programme sectors as submitted under the
MAPS approval process are generally congruent with MAPS guidelines. Within this framework, the
16 Initiated in 2004 and ongoing on a periodic basis, this joint effort by GOAL management and Irish Aid set out and measured
standards in 7 organizational areas, aimed at ensuring effective use of MAPS funds.
14
annual planning process is relatively decentralized, with strong input from the field (often including
fundraising). MAPS funding is applied within GOAL‟s overall programme structure and overseen by a
MAPS Coordinator (reporting to Acting Head of Programmes) at GOAL HQ who sets guideline
parameters and budgets (within the MAPS proposal and annual budget allocation) by country, following
which the country managers develop more detailed programme plans. MAPS expenditure is controlled
and reported through the regular finance and internal control systems, (see Section 3.5 below), and
monitored by a MAPS Grants manager. Financial and programme reports from the field are considered at
quarterly meetings of the MAPS Monitoring Group at HQ (comprising MAPS Coordinator plus senior
management representatives). Tables 3 and 4 below show a broadly consistent allocation of MAPS II
funds by country and sector over the period (taking account of the cuts in the MAPS II budget which
occurred from 2009).
Table 3: Maps Funding 2007-2010 by Country
Country 2010
€,000
% 2009
€,000
% 2008
€,000
% 2007
€,000
%
Malawi 1,168 9% 981 8% 1,500 9% 900 7%
North Sudan 1,160 9% 1,358 11% 2,185 14% 1,400 11%
South Sudan 2,320 18% 2,250 18% 2,014 12% 1,750 13%
Kenya 1,195 9% 1,337 10% 1,402 9% 1,000 8%
India 991 8% 930 7% 675 4% 1,174 9%
Ethiopia 1,605 13% 1,493 12% 2,300 14% 2,100 16%
D.R. Congo 0 0% 0 0% 1,035 6% 1,600 12%
Uganda 2,850 22% 2,867 22% 3,204 20% 2,600 20%
Sierra Leone 1,533 12% 1,334 10% 900 6% 806 6%
Niger 0 0% 274 2% 900 6% 0 0%
Total 12,822 12,823 16,115 13,331
The structure and procedures as set out above appear to function smoothly and effectively in
programming, monitoring and reporting the use of MAPS II funding. With regard to Irish Aid emergency
funding, the organization-wide financial reporting and internal control systems, and field level operational
oversight, are applied in the same way. However at GOAL HQ the Emergency Unit comprises a single
person as global emergencies manager, supported by the country desk officers as required. The
emergencies manager is frequently (up to 50%) absent from HQ directing early field response to new and
urgent humanitarian crises. It would appear that this unit is relatively under-resourced, and that capacity
may sometimes be overstretched.
Recommendation 6: that the emergency management function at HQ is reviewed to ensure that it is
adequately resourced.
15
3.4.2 Monitoring and Evaluation (M&E)
During the MAPS II period, progress has been made in the area of M&E, including the development and
roll-out of systems, and the recruitment of a specialist at HQ in 2010. Baselines and a set of indicators
have been established, and monitoring systems applied allowing GOAL to begin reporting data (mainly
quantitative, and at household level) which allows comparison over time17
. The system appears practical
and effective within its parameters; however, it is not clear whether and how the reported output data is
used in programme planning (e.g. no evident link between M&E output and resource allocation). For
example, Tables 3 and 4 show that funding has been applied fairly consistently across countries and
sectors over the four year period 2007-2010. This may be broadly expected given the longer term
structure and objectives of MAPS programming, but evidence of the systematic application of Results
Based Management techniques (i.e. periodic analysis and comparison of individual projects through the
M&E system, with consequent adjustment to resources and/or methodology), was not found.
Table 4: MAPS Funding 2007-2010 by Sector
Sector 2010
€,000
% 2009
€,000
% 2008
€,000
% 2007
€,000
%
Education 2,669 21% 2,501 20% 3,583 22% 2,089 16%
Heath 6,036 47% 5,551 43% 6,562 41% 5,999 45%
Livelihoods 1,471 11% 1,826 14% 2,273 14% 2,089 16%
HIV/AIDS 2,647 21% 2,944 23% 3,696 23% 3,153 24%
Total 12,822 12,823 16,115 13,331
Recommendation 7: that the system supporting management for development results is strengthened
through the integration of M&E outputs in programmatic decision-making.
Within the overall picture of progress in implementing M&E procedures, significant variances in capacity
were noted at field level18
. It is noted that GOAL has plans to further develop capacity through recruiting
an M&E expert on the roving technical team, organizing an M&E conference etc.
Recommendation 8: that plans to further build M&E capacity are implemented.
3.4.3 Management Information Systems
The current Management Information System (MIS) in use by the MAPS Monitoring Group and
Operations Department at HQ records details of all grants received and programmes funded, by donor.
Additional information is taken from the monthly field reports and all of this data is compiled manually
by HQ Desk Officers. The system is manually integrated with the financial reporting system (i.e. updated
17 MAPS Annual Report 2010
18 M&E capacity in North Sudan is judged as relatively strong, but weaker in Malawi.
16
monthly with actual spend per Donor Status Reports) and does not appear to be available to or used in the
field. As such it is not a real time system and its utility as a grant management system is limited. GOAL is
planning a review of the MIS which includes research on currently available systems that would provide a
more efficient and integrated organization-wide grant management and reporting system capable of
producing up to date information to aid management decision-making both in the field and at HQ.
Recommendation 9: that the MIS is reviewed and improved as soon as possible.
3.5 INTERNAL FINANCIAL CONTROLS AND ACCOUNTING SYSTEMS
The internal financial control and accounting systems are well developed and overseen by capable and
well-motivated senior managers and finance staff at HQ, regional (i.e. roving Finance Controllers) and
country levels. The base tool for financial management - Donor Status Report (DSR) is donor and project
specific – setting out all budgeted and actual direct and indirect cost allocations. This Excel report is
extracted from the Sage financial reporting system operating organization-wide. A DSR is produced every
month for each project by the country office, for review by the country managers and at HQ. This system
reflects the decentralized organizational approach and also an institutional emphasis on financial
management and in particular cost coverage and donor compliance. Because the DSR is not integrated as
part of the Sage system, it is prone to potential error or manipulation and also requires manual
reconciliation with the Sage Trial Balance each month. To reduce risk and increase efficiency it would be
preferable that the Sage system be developed to enable the automatic production of this key report. GOAL
management is aware of this and working with software experts to develop this enhancement on Sage.
In addition to the DSR, GOAL have developed a Budget Management Tool (BMT) which is a very useful
report produced by the project managers (i.e. budget-holders) in the field. The project manager receives
from Finance Department the monthly expenditure by project (as extracted from the Sage system) and
compares the cumulative spend to the annual budget. On the same spreadsheet they also forecast the
planned monthly spend for the remainder of the year. It therefore serves as both a management tool
showing expenditure performance (including overspends and underspends) to date, and a cash-flow report
showing the cash requirements for the remainder of the period. This avoids the need for separate budget
revision reports during the year as it incorporates all major and minor changes by project/programme in
one report (unless there is a decision to substantially change the funded project). Because the DSR is the
starting point for the BMT report, this process also would be greatly enhanced by the automation of the
DSR from Sage.
Recommendation 10: that the automation of the DSR from the Sage accounting system is implemented
within an appropriate timeframe (by the end of 2011).
A set of monthly management accounts is also generated from the Sage system for review by country
managers and at HQ, and a consolidated set of management accounts is presented to the Board, but
because the current version of Sage does not allow insertion of budgets, it is difficult for the Board and
senior managers to review actual expenditure against budgets at an organizational level. Also,
consolidation of each country‟s accounts at HQ is a manual process. GOAL management is aware of
17
these issues and plans to upgrade Sage to allow insertion of comparative budgetary information and
automated consolidation.
Recommendation 11: that a plan to upgrade Sage to allow insertion of budget figures and automatic
consolidation be prepared and implemented within an appropriate timeframe (by the end of 2011).
As mentioned above, monthly financial reports are produced at field sites and submitted to HQ Finance
Department, where the Finance Officers review them according to template checklist of internal controls.
Audit work confirmed that this system was in place; however there is no evidence of supervision of the
process by the Finance Manager.
Recommendation 12: that completion of the internal control checklist on monthly field financial reports
is evidenced by the supervisor‟s signature.
3.6 MANAGEMENT OF RELATIONSHIP WITH IMPLEMENTING PARTNERS
This is an important priority under the MAPS II framework, and since 2007 GOAL have developed a
policy for working with local NGO partners and rolled out a set of tools and guidelines for field
operations. However, the proportion of total programme funding applied through such partners during the
MAPS II period has been low (e.g. per audited financial statements „immaterial‟ in 2008; 1% in 200919
),
to the point where it appears unlikely that GOAL will be able to report any significant impact under this
MAPS II policy objective. Though in 2010 partnership focal points (mostly part-time roles for existing
staff-members) were identified at HQ and each country operation (except Ethiopia), there is no evidence
as yet of any reduction in international field staff levels which might be anticipated as the level of
programming delivered with and through local NGO partners increases.
Recommendation 13: that GOAL increases the scale of engagement with local partner NGOs.
The MAPS Guidelines identify development of local NGO partners as aim in itself, alongside delivery of
programmes. This is reflected to some extent in GOALs partnership policy, but a 2010 external
evaluation20 of relations with local NGO partners characterizes the relationship as instrumental, with
effective control exercised by GOAL through the project cycle (and over resources). This approach may
reduce risk but may also impede development of capacity among partners. A partner database is
maintained, but detailed financial data for local NGO partnerships, disaggregated to show capacity
building, programme implementation (plus partner direct and indirect cost analysis) etc. was not readily
available (though it is noted that GOAL field staff stated that much capacity building takes place through
mentoring and on-the-job training, which is not shown separately in the timesheets and other records).
19 The audited financial statements for 2010 (released after this audit) show a revised figure of 6% for 2009, and 8% for 2010.
These figures have not been verified and detailed information on such expenditure (type of partner, type of investment etc.) was not available at the time of this audit (see recommendation 15). 20
INTRAC, 2010
18
Recommendation 14: that greater emphasis is placed on capacity development among local NGO
partners.
Recommendation 15: that a system for tracking and analyzing the investment in and through local NGO
partners is put in place.
3.7 COST STRUCTURE
The MAPS II framework provides for the use of some of the funding for various investments in
organizational capacity and programme quality (policy development, M&E, capacity building etc.), which
are outlined in the Strategic Plan 2007-11 and in the bench-marking process undertaken between GOAL
and Irish Aid. The table below sets out how the MAPS II funding was applied among the various cost
categories.
Table 5: MAPS Funding Components
Cost Category Cum.
Total
2010
€,000
2009
€,000
2008
€,000
2007
€,000
Field Expenditure 55,091 12,822 12,823 16,115 13,331
Organizational Development ≤ 3% (1) 1,974 495 528 495 456
Mainstreaming ≤ 2% (2) 432 107 74 170 81
HQ allocation ≤ 6% (3) 3,450 805 805 1,007 832
Total MAPS Expenditure 60,946 14,229 14,230 17,787 14,700
Notes:
1. Per MAPS II guidelines, up to 3% of total MAPS funding can be used for „Organizational Development‟ costs aimed
at increasing the effectiveness of programme work, based on a developed plan (e.g. policy development, staff training,
workshops etc.).
2. MAPS II allows for up to 1% expenditure for mainstreaming each of two Irish Aid cross cutting priorities based on a
specific action plan.
3. „Management Support Allocations‟ include Headquarters costs „associated with the direct implementation of the
programme‟ up to a maximum of 6% of the total MAPS funding.
For the Management Support Allocations HQ costs 6%, the Guidelines require that these be „associated
with direct implementation of the programme‟. However because GOAL has applied this charge as a flat
% rate, this is difficult to verify. Further analysis of GOAL HQ costs indicates that the risk of ineligible
costs being included is low. This is because the cost structure at GOAL HQ is such that the combined
annual costs associated with direct implementation of the programme (e.g. Technical Team, Operations
and Logistics Department) exceed the 6% amount, i.e. total expenditure under these headings is greater
than the amount charged to MAPS programmes (assuming that such costs are not earmarked for
absorption by other donors). Nevertheless it is preferable that this charge to MAPS is reported as actually
assigned to the various HQ costs.
Recommendation 16: that the GOAL HQ Management Support Allocation component of MAPS should
be reported as assigned to actual costs.
19
3.8 FUNDING AND RESERVES
3.8.1 Funding Profile
Table 6: Analysis of Funding Sources
Income Source 2010
€,000
2009
€,000
2008
€,000
2007
€,000
GOAL Voluntary Income – Restricted 7,017 1,604 2,773 4,032
GOAL Voluntary Income – Un-restricted 6,057 5,101 8,167 7,581
Sub-total GOAL Voluntary Income A 13,074 6,705 10,940 11,614
GOAL Other Income (UK and US voluntary
income, Interest, Fundraising)
1,369 1,701 3,195 3,116
Donor Grant Income – Development B 24,224 23,897 23,843 21,253
Donor Grant Income – Emergency 25,754 13,342 14,403 14,731
Sub-total GOAL + Grant Income 64,421 45,645 52,381 50,714
Donations in Kind + Other 9,006 20,204 14,185 7,921
Total Income All Sources C 73,427 65,850 66,566 58,635
Liquidity Ratio (Voluntary/Total Devt Income) A/(A+B) 35% 22% 32% 35%
Development Ratio (Dev Funds/Total
Income)
(A+B)/C 51% 46% 52% 56%
Analysis of the table of funding trends above yields several notable points.
GOAL‟s voluntary income levels are linked to humanitarian emergencies (for example the figures in 2010
reflect to a great extent the public response to the earthquake in Haiti). In this context trend analysis is
difficult; nevertheless it is notable that unrestricted voluntary income is down 20% between 2007 and
2010. This may be expected given the deteriorating economic climate in Ireland, and the Annual Directors
Report (attached to the audited Financial Statements) for 2009 and 2010 refers to the importance of
securing and maintaining reliable sources of funding. However, in terms of both policy and strategy, there
is no evidence of a plan to develop a more secure unrestricted voluntary income base. GOAL has not
altered its policy of minimizing investment in fundraising (in order to maximize the funding available for
operations), nor has it made any significant adjustments to its long-time strategy of raising funds
primarily through sports related and corporate events, together with public appeals linked to specific
humanitarian emergencies (e.g. Haiti earthquake).
In contrast, with regard to institutional donors GOAL has developed a fundraising strategy (potential new
partnerships, technology and methodologies etc.) and the trends above indicate that levels of institutional
donor income for development have been maintained despite the global economic difficulties.
Institutional donor humanitarian funding has also generally held steady and, as noted in the Annual
Directors Reports, expenditure on emergency interventions amounted to almost 50% of total charitable
expenditure in 2010 and 2009 (up from 37% in 2008 and 27% in 2007). This trend indicates that during
20
the MAPS II period, emergency work has become increasingly significant in GOAL‟s overall operational
profile.
The MAPS guidelines require a „liquidity ratio‟ of 70:30 whereby participating agencies are expected to
generate 30% of their total income21
in the form of voluntary funds or demonstrate a capacity to do so
incrementally over the period of MAPS II. Given the declining trend in voluntary income, the continuing
domestic economic difficulties and the lack of an effective fund raising strategy, the risk of non-
compliance on this criterion is real. Apart from the technical issue of non-compliance, the falling level of
voluntary unrestricted income raises questions over GOAL‟s ability to sustain MAPS type programming
into the future. This risk is further illustrated by the table below, which shows that the total investment in
MAPS type programming has declined (from €29.5 million in 2007 to €21.7 million in 2010) over the
MAPS II period to date, and dependence on Irish Aid as a source has increased from 45% in 2007 to 59%
in 2010. All sources have declined in the period, with 3rd
party sources (i.e. other institutional donors)
down by one third since 2007 and GOAL investment halved.
Table 7: MAPS and Co-Funding 2007-2010
Expenditure by Source % Change
2007-2010
2010
€,000
2009
€,000
2008
€,000
2007
€,000
MAPS Expenditure (Field) -4% 12,822 12,823 16,115 13,331
As a % Total Expenditure 59% 63% 49% 45%
GOAL Expenditure -55% 3,103 1,543 6,545 6,926
As a % Total Expenditure 14% 8% 20% 23%
3rd.
Party Sources Expenditure -37% 5,831 6,135 10,148 9,268
As a % Total Expenditure 27% 30% 31% 31%
Total Expenditure (MAPS + Co-funding) -26% 21,757 20,501 32,808 29,525
Beyond the risk to MAPS type programming and the sustainability of Irish Aid‟s investment in and
through GOAL, the issue of declining voluntary income threatens to undermine GOAL institutionally (i.e.
as an independent agency with rather than the sum of its donors and projects), and as such would appear
to be a critical area requiring active Board engagement and leadership. However, this was not evident.
Recommendation 17: that the Board addresses the trend of declining unrestricted voluntary income.
3.8.2 Unrestricted Reserves
The table below shows movements in unrestricted reserves from 2007 to 2010. In the first two years,
GOAL had been running down reserves in order to maintain investment in operations. To offset this, in
21 In practice, the guidelines have been applied by Irish Aid per the Table 7 above (i.e. voluntary income compared to total
development income).
21
2008 an unused balance of almost €3 million22
restricted income23
was transferred from restricted to
unrestricted reserves, and in 2009 GOAL withheld €4.3m (i.e. 65% of total unrestricted income that year)
from operations in order to replenish reserves.
The balance at 31 December 2009 comprises inter alia general (programme) fund €10m, working capital
reserve €7m (doubled in 2010 to €14m, plus an emergency fund €1m), . Other components are a fixed
asset fund €3.3m and long term financial assets €2.3m.
Table 8: Unrestricted Reserves (Audited Financial Statements)
Unrestricted Reserves 2010
€,000
2009
€,000
2008
€,000
2007
€,000
Opening Balance 22,501 18,179 20,306 23,708
Net Movement 3,043 4,322 -5,096 -3,402
Transfer from Restricted Reserves 0 0 2,969 0
Closing Balance 25,544 22,501 18,179 20,306
All the above provides evidence that the Board has been active in maintaining and restructuring
unrestricted reserves. This is appropriate, however in the context of the larger issue of declining voluntary
unrestricted income (see Section 3.8.1 above), the table shows that in order to rebuild and maintain
unrestricted reserves the amount available for investment in programming (including MAPS co-funding –
see table above) has become more limited. If the declining trend in unrestricted voluntary income is not
halted, GOALs ability to either maintain institutional reserves or self-fund programmes in future will
continue to diminish (recommendation as 3.8.1 above).
3.8.3 Restricted Reserves
Restricted reserve categories and levels appear reasonable. They include €9.7 million at year end
represent donor funds which have not been expensed at balance sheet date. The balance sheet also
includes €5.5 million under Creditors, representing operational expenditure incurred but not yet paid by
year end.
22 €2,969,000 per GOAL audited financial statements 2008.
23 Financial Statements 2008 Directors Report includes a policy ‘Where restricted funds remain unspent for a period of three
years following the year of their receipt, GOAL’s board of directors may decide to transfer such funds that they consider surplus to requirements to unrestricted funds.’
22
3.9 AUDIT
3.9.1 External Audit
The external audit function appears strong and reliable. GOAL group accounts are audited annually by
Deloitte & Touche Chartered Accountants and Registered Auditors, who have been GOAL‟s auditors
since 2002. Audit reports in the MAPS II period are unqualified. Each of the country operations is also
subject to annual external audit, where the auditors are appointed in consultation with GOAL HQ, which
aims to select the best quality firm available in each country.
As part of their annual audit work, Deloitte & Touche liaise with the field auditors, issuing a letter of
engagement (indicating areas of particular focus or risk etc.) as part of the audit planning, and reviewing
the audit report and management letter from each field audit. The annual audit report and management
letter (incorporating issues raised by field auditors) is presented and discussed with the Audit & Finance
Subcommittee.
3.9.2 Internal Audit
The internal audit function appears robust, with well qualified and motivated staff and a thorough and
comprehensive approach. Established in 2001, the global roving internal auditor post was temporarily
vacant during 2009 (at which time the Internal Auditor was appointed as Acting Chief Operations Officer)
but filled by a part-time consultant before recruitment of a full-time replacement in 2010. The internal
auditor reports to the Audit & Finance Subcommittee and operates according to a field visit schedule
(each country at least once every 2 years, with more frequent visits depending on events/risk level by
country). Field work is planned with HQ Finance Department and country management, and there are
standard checklists in place for specific components (e.g. logistics and procurement). In some locations
internal auditors are also deployed in the field.
4. Conclusion
2009 was a difficult year for GOAL: funding levels declined sharply, leading to reductions in staffing and
operations; two staff-members were kidnapped in Sudan; and a serious fraud occurred in the Malawi
programme. Since then the organization has recovered to a large extent, replenishing staff capacity and
responding to the security and fraud incidents by instituting strengthened procedures and oversight, with
the objective of lowering risk.
Over the MAPS II period GOAL management has implemented improvements in many areas of
programming and organizational systems and capacity. The organization is relatively decentralized in
terms of operational decision-making, but operates according to robust organization-wide standards and
systems with regard to financial and internal control procedures. Personnel at all levels of the organization
demonstrate professional competence and a genuine commitment to their work.
23
The audit provided evidence of many positive standards and trends in GOAL as well as recommendations
for improvements as set out in this report. In view of the limitation of scope set out in methodology
section 1.3 above, the audit was unable to establish the level of Board engagement in setting the agenda
and parameters for the strategic planning process. This raises uncertainty over the effective exercise of
higher-level oversight of management systems and personnel, as well as the strategic direction of the
organization.
We would like to express our appreciation to the Board, managers and staff of GOAL, as well as their
auditors, for their valuable assistance. However, we also refer to the limitation in scope which was placed
on the audit due to certain documents not being made available to the audit team. We would like to thank
our colleagues at Irish Aid Civil Society Section and Emergency and Recovery Section for their
cooperation in the planning and implementation of this audit.
24
Appendices
APPENDIX 1: TERMS OF REFERENCE
Audit of Grants Awarded to NGO Partners in 200924
under Irish Aid’s Multi Annual Programme Scheme II and
Emergency and Recovery Funding Schemes
Title of Programme: Audit of Grants Awarded to NGO Partners in 2009
under Irish Aid‟s Multi Annual Programme Scheme II and
Emergency and Recovery Funding Schemes
Timing: October 2010 to September 2011
1. Background to Irish Aid Multi Annual Programme Scheme II and Emergency
Funds
In 2003, Irish Aid introduced the Multi Annual Programme Scheme (MAPS) to provide predictable and long-term funding in
support of agreed objectives for five qualifying Irish-based Non-Governmental Organisations (NGOs). The second phase of the
programme, MAPS II, commenced in January 2007 and covers the five year period to 2011. MAPS II Guidelines for NGOs
(March 2006) state that the overall objective of the scheme is to provide a supportive framework of funding that enables
organisations and their partners to work effectively and programmatically in pursuit of poverty focused development outcomes
and impacts.
In 2009, Irish Aid allocated over €68 million to support the humanitarian needs of vulnerable populations in over 40 countries,
through partnership with UN, the International Red Cross and Red Crescent Movement and NGOs. The Emergency
Humanitarian Assistance Fund (EHAF) is the main fund which covers Irish Aid‟s co-operation with NGOs in humanitarian
emergencies. In order to forge greater linkages between relief and development approaches, Irish Aid provides funding for
recovery and Disaster Risk Reduction (DRR)/preparedness type interventions to selected agencies from within its Multi-
Annual Programme Scheme (MAPS).The specific goal of the EHAF is to save and protect lives in acute crisis situations and it
can be used to finance activities that provide protection for civilians, the delivery of clean safe water, sanitation services, food,
shelter, healthcare, or other forms of assistance necessary to sustain life. Irish Aid is also committed to enhancing the
capacities of its humanitarian partners and does this through the third pillar of the Rapid Response Initiative. Individual grants
are made to specific NGOs to improve the humanitarian response capacity and to promote stability and conflict resolution.
Irish Aid is committed to ensuring that programmes meet the highest standards and are periodically subject to review,
evaluation and audit. Irish Aid‟s Audit Approach for Civil Society Organisations funded under MAPS, agreed with the partners
in 2008, describes the overall approach and the sources of audit assurance Irish Aid seeks to obtain in relation to the scheme.
2. Overview of the MAPS Partners
Concern Concern Worldwide was founded in Ireland in 1968 in response to a famine in the Nigerian province of Biafra. With more
than 3,200 staff of 50 nationalities, Concern operates in 28 countries in Africa, Asia and the Caribbean.
24 This will be 2010 where the audit is undertaken in 2011.
25
Concern has received support from Irish Aid for a number of years and since 2003 this support has been in the form of multi-
annual funding through the MAPS scheme.
Concern‟s MAPS II Programme for 2007-2011, based on their 2006-2010 Strategic Plan, was approved as a working document
by Irish Aid‟s Projects Appraisal and Evaluation Group (PAEG) for MAPS II funding over 5 years in September 2006.
Concern has a very broad thematic and geographical focus and their main interventions are in the areas of livelihood security,
health, education as well as HIV and AIDS. Concern implemented programmes with 529 partners in 2009 with a primary
focus of moving towards the development and strengthening of strategic relationships and engaging with governments as
partners; to a lesser extent, strategic relationships were maintained with various Community Based Organisations (CBOs).
GOAL Goal is Ireland‟s third largest NGO in the field of overseas development. It was founded in 1977 by John O‟Shea and currently
operates in 11 countries (Ethiopia, Haiti, Honduras, India, Kenya, Malawi, Niger, Sierra Leone, Sudan, Uganda and
Zimbabwe) with the majority of its resources focused in Africa.
Goal has received Irish Government funding for its activities since the 1970s and, since 2003, this support has been in the form
of multi-annual funding through the Multi Annual Programme Scheme (MAPS). GOAL was initially approved for one year
of MAPS II funding by Irish Aid‟s Projects Appraisal and Evaluation Group (PAEG) in 2007. GOAL‟s MAPS II Programme,
based on a revised 2007-2011 Strategic Plan, was approved by PAEG for MAPS II funding for the period 2008 to 2011 in
October 2007. Their programme focuses on four broad sectors: health, livelihoods, HIV/AIDS and education in nine countries
(North and South Sudan, Ethiopia, Uganda, Kenya, Malawi, Sierra Leone, India and Niger). Goal directly implements many
projects but in line with best practice is increasingly working in partnership with local non-governmental organisational and
community based organisations. At the operational level Goal also works with and enjoys good relationships with government
personnel and institutions.
Christian Aid Christian Aid Ireland was established in Ireland in 1998 and is part of the overall Christian Aid family. Christian Aid Ireland is
the official aid and international development agency of Protestant churches in Ireland. It is also part of ACT International
(Action by Churches Together), the worldwide ecumenical network for emergency relief. Christian Aid Ireland is made up of
two companies separately registered in Northern Ireland and the Republic of Ireland but governed as a single entity.
Christian Aid Ireland has received support from Irish Aid since its establishment in Ireland in 1998 and has been in receipt of
multi-annual funding through the MAPS scheme since 2003.
Christian Aid Ireland‟s MAPS II Programme for 2007-2011, based on their 2005-2010 Strategic Plan “Turning Hope Into
Action”, was approved by Irish Aid‟s Projects Appraisal and Evaluation Group (PAEG) for MAPS II funding over 5 years in
September 2006. This programme focuses on three of their six key areas – supporting communities to build secure livelihoods,
supporting individuals and communities affected by the HIV pandemic and promoting accountable governance in target
countries. The programme has a strong focus on countries in conflict or recently emerged from conflict. The MAPS II
programme provides support to approximately 50 partners in seven Christian Aid programmes, implemented in Afghanistan,
Angola, Burundi, Colombia, Rwanda, Sierra Leone, as well as in Israel and the Occupied Palestinian territories.
26
Organisation Annual
MAPS Grant Irish Aid
Humanitarian
Funding
Other Irish
Aid
funding
Total Irish
Aid
Funding
Total Income
of the
Organisation Concern 2008 26,000,000 7,071,369 13,705 33,085,074 132,298,000
Concern 2009 20,800,000 3,695,654 490,702 24,986,356 129,421,000
GOAL 2008 17,787,000 2,410,526 0 20,197,526 66,566,188
GOAL 2009 14,229,600 2,167,122 0 16,396,722 65.7m *
Christian Aid
2008 3,580,772 100,000 0 3,680,772 11,633,000
Christian Aid
2009 2,864,618 335,302 0 3,199,920 8,106,000
Christian Aid financial year ends 31st March. Total organisational income figures are taken from the consolidated
accounts for Ch Aid Ireland & Northern Ireland.
Concern financial year runs from Jan – December.
GOAL financial year runs from Jan – December. *Total 2009 income is a draft figure.
3. Objective of the audit
The purpose of the audit is to:
Independently examine and report whether Irish Aid funds have been used to support the programme objectives
agreed in partnership with each NGO; if expenditure has been incurred in accordance with the terms and conditions
of the agreements between Irish Aid and each NGO and has been accounted for in a proper manner;
Examine and report, from the viewpoint of overall accountability, as to the adequacy of the governance, management
and internal control systems of each NGO partner; and
Assess compliance with funding requirements and ratios of MAPS II guidelines.
4. Scope of the audit The audit will include such tests and auditing procedures of the organisation‟s systems as the auditor considers necessary and
will address the following areas:
Governance and organisational structure
Risk management
Strategic (including financial) planning
Programme cycle management (including Monitoring and Evaluation)
Internal financial controls and accounting systems
Management of relationship with implementing partners, where applicable
Cost structure
Funding and Reserves
Audit – external and internal
5. Audit Methodology Each audit will be led and managed by the Evaluation and Audit Unit of the Department and will be undertaken at the
27
headquarters of each NGO in Ireland, and through field visits to regional or country offices of these NGOS and selected
implementing partners or programme sites.
External service providers will be engaged to participate on these assignments and roles will vary from taking a prominent role
in the audit, including developing work programmes and drafting the audit report, to being a team member on a field visit to a
regional or country office.
The audit methodology will include: a review of relevant documentation available at Irish Aid offices; meetings with
management, financial, administration and programme staff and the organisation‟s partners, as appropriate in each office;
meetings with external and internal auditors; and performing such audit tests as are necessary to obtain evidence to address the
objectives of the audit.
6. Schedule and Location
Each audit will take between 40 to 55 working days over a 3 to 4 month period.
The outline work schedule will include:
Planning
Field work HQ
Field work at regional and country level
Assembly of key findings and recommendations and de-briefs to Irish Aid and NGO management
Preparation of Report
The field work at HQ and abroad will be scheduled reasonably closely together. The exact locations to be visited will be
decided at the audit planning stage.
7. Management Arrangements
Each audit will be regarded as an assignment undertaken and led by the Evaluation and Audit Unit of the Department of
Foreign Affairs. External service providers will be recruited to support the Unit and will assume varying levels of
responsibility as directed by the overall assignment manager, Mr Tom Hennessy of the Evaluation and Audit Unit. Working
papers and reports produced will be the property of the Evaluation and Audit Unit.
8. Expertise Required
Experience and Qualifications Required
A recognised professional qualification in accountancy and membership of a recognised professional accountancy
body
Experience of conducting similar audits and organisational governance/internal financial control systems reviews
Knowledge of relevant legislation, accounting standards and best practice for NGOs
Experience of working in an international development context, including a demonstrable knowledge of development
issues
Strong communications skills.
Where candidates fail to meet the accountancy qualification requirement, their proposals will not be considered further.
Selection will be based on the following criteria that will be demonstrated in a short proposal document (maximum 5 pages)
with an appropriate curriculum vitae appended.
28
The criteria which the Department will use to select a panel of suitable service providers are:
Criteria Marks
1 Experience relevant to the assignment
Experience of conducting similar audits and organisational
governance/internal financial control systems reviews (20 marks)
7 years post-qualification professional experience in financial or
management accounting and/or internal audit (10 marks)
30
2 Demonstrable knowledge of organisations implementing programmes in
an international development context 25
3 Understanding of the assignment and quality of submission 25
4 Cost 20
Total 100
9. Reporting
Assembly of findings and recommendations and initial de-briefs to Irish Aid and NGO management.
A first draft of audit report will be provided to Civil Society and Emergency and Recovery Sections of Irish Aid and to the
NGO for correction of any factual inaccuracies or other information.
A final draft of the audit will be provided to the MAPS Partner organisation for management response to the audit findings
and recommendations.
The final audit report will include the management responses.
10. Indicative Timetable
The approximate timeframe for the audits is as follows:
Audit no. 1 October to December, 2010
Audit no. 2 Mid-January to March/April 2011
Audit no. 3 April to July 2011
Candidates should indicate whether their availability for specific or all assignments.
Evaluation and Audit Unit
Department of Foreign Affairs
July 2010
29
APPENDIX 2: SUMMARY OF RECOMMENDATIONS AND MANAGEMENT RESPONSES.
No. Audit Report
Section
Audit Recommendation GOAL Management Response Audit Note to GOAL Management
Response where applicable
1 3.1 Governance
and
Organisational
Structure
That the Board considers
introducing:
a) A more formal and
transparent modus
operandum (e.g. Terms of
Reference, pre-set agendas
etc.) and;
b) Policies on board
composition and self-
development aimed at
strengthening the range of
skills and experience either
comprised within the Board
or to which it has access.
Terms of Reference are in place. A Terms of
Reference is attached.
There is a pre-set agenda for each Board
meeting. See agenda for last Board meeting
attached.
Board agendas have been in place for the last
three years as a matter of course.
The skills profile of the Board was
broadened at the time of this review and now
reflects Development expertise - refer to
Board profiles attached.
Terms of Reference received –
recommendation appears to be in
place from November 2011.
Board Agenda received.
Recommendation appears to be in
place from October 2011.
Board profiles of newly appointed
members received as at September
2011.
30
2 3.1 Governance
and
Organisational
Structure
That a stable and sustainable senior
management structure is put in
place.
Refer to updated HQ organizational chart
attached.
The SMT currently comprises of Head of
Logistics/IT, Head of Marketing and
Fundraising/Head of Programmes/Head of
HR and COO/Finance & CEO. Currently
Head of HR is being recruited and an Acting
HR head is in place.
Organizational Chart as at
November 2011 received. This
includes some recent changes to
the structure.
3 3.1 Governance
and
Organisational
Structure
That a Human Resources manager is
recruited as soon as possible to
oversee and strengthen the function
and that the Human Resources
systems are strengthened and
improved as planned, within an
appropriate timeframe.
This is in progress.
4 3.2 Risk
Management
That the process of risk
management is further strengthened
to ensure full buy-in and follow-up
by both the Board and all areas of
management at HQ and in the field.
GOAL‟s Board has set up a sub-committee
to deal with risk management to develop a
risk register for GOAL‟s Head office and to
review each country‟s risk register. This
committee comprises of a Board member, a
member from the audit committee and a
number of senior management staff in
Dublin. This will be completed by Jan 2012.
31
5 3.2 Risk
Management
That an organization-wide risk
register is developed and maintained
at HQ (i.e. reviewed regularly by
senior management and at least
annually at Board level).
Agreed this is currently being developed and
will be rolled out by Jan 2012.
6 3.4 Programme
Cycle
Management
That the emergency management
function at HQ is reviewed to
ensure that it is adequately
resourced.
This has happened.
7 3.4 Programme
Cycle
Management
That the system supporting
management for development
results is strengthened through the
integration of M&E outputs in
programmatic decision-making.
This is in progress and the M&E function
has been strengthed with additional HQ and
roving resources over the last 12 months.
8 3.4 Programme
Cycle
Management
That plans to further build
Monitoring and Evaluation capacity
are implemented.
Agreed. Progress is continually monitored
against the M&E plan of action. GOAL
continues to invest in M&E as a strategic
priority
9 3.4 Programme
Cycle
Management
That the Management Information
System is reviewed and improved as
soon as possible.
An MIS upgrade has already been approved
a system provider has been contracted. This
is currently being rolled out
32
10 3.5 Internal
Financial Controls
and Accounting
Systems
That the automation of the DSR
from the Sage accounting system is
implemented within an appropriate
timeframe (by the end of 2011).
: Upgrade is scheduled for completion end
of 2011. Implementation of the new
functionality to commence at the start of
2012.
This recommendation already
included in internal planning by
GOAL management.
11 3.5 Internal
Financial Controls
and Accounting
Systems
That a plan to upgrade Sage to allow
insertion of budget figures and
automatic consolidation be prepared
and implemented within an
appropriate timeframe (by the end
of 2011).
Same as above This recommendation already
included in internal planning by
GOAL management.
12 3.5 Internal
Financial Controls
and Accounting
Systems
That completion of the internal
control checklist on monthly field
financial reports is evidenced by the
supervisor‟s signature.
Now in place.
13 3.6 Management
of Relationship
with
Implementing
Partners
That GOAL increases the scale of
engagement with local partner
NGOs.
The figures contained in the commentary of
the annual reports are unfortunately
incomplete. The figures should read for
2009; local partners 5%. 2008; local Partners
4%. 2007; local partners 7%. Workings
attached.
33
14 3.6 Management
of Relationship
with
Implementing
Partners
That greater emphasis is placed on
capacity development among local
NGO partners.
This is ongoing and committed to in
GOAL‟s strategic plan
15 3.6 Management
of Relationship
with
Implementing
Partners
That a system for tracking and
analyzing the investment in and
through local NGO partners is put in
place.
This is difficult to quantify without specific
guidance from Irish Aid ahead of programme
implementation.
16 3.7 Cost Structure That the GOAL HQ Management
Support Allocation component of
MAPS should be reported as
assigned to actual costs.
Given that the majority of HQ costs are
salary driven it is not administratively
feasible to specifically assign costs to each
donor. The staff cost drivers are the fields
and not the donors (with the exception of the
MAPS co-ordinator). Fields are generally
diverse in funding and much of the HQ
support is indirect to donors as opposed to
being specifically a direct support. Without
exception all other institutional donors of
GOAL consider HQ support contribution as
a bottom line and do not request costs to be
specifically applied.
The structure of HQ costs is
understood, but it is not clear why
a basis for allocating these costs
by relevance to the MAPS
Guideline criterion of „associated
with direct implementation of the
programme‟ is not feasible.
As noted in the report text, the risk
of ineligible costs being included
is low.
17 3.8 Funding and
Reserves
That the Board addresses the trend
of declining unrestricted voluntary
income.
Agreed. An updated fundraising strategy for
2012-2015 is in process.