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IV. Internal Controls
Each NGO has its own internal mechanisms for ensuring accountability and transparency in the management of its resources, depending on its Articles of Association and its internal management structures. Assuming, as is mostly the case, that it is registered as a company under the Companies Act, the requirements of an annual audit and of the annual general meeting where financial reports are made, act as checks on the misuse of resources to a certain extent. That extent, however, is measured by the interest and ability of members to question the audits and otherwise show concern for the proper management of resources, something that is not always available.
There are no network organizations presently which exercise the function of guaranteeing the accountability of NGOs, and no code of conduct exists with regard to their operation. Perhaps one of the most effective checks is the insistence of some funding agencies on the keeping of proper accounts, receipts and other checks on spending, as well as on using funds for the agreed objects. Since most NGOs operate largely with external funding, this is at present the only really effective check. The fact is that, as a couple of examples over the past decade have shown, it is quite easy for those who run NGOs to get away with fraud and embezzlement, and the fact that this has not occurred more often attests not to existing controls but to the character of most of the leaders in the NGO community. Some NGOs, such as CCDC, have the participation of the beneficiary population in the Board of Directors built into their constitution, but the capacity of many of these to effectively challenge the professional staff is quite limited, so that this formula cannot be said to effectively guarantee accountability and transparency.
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