The purpose of an NGO’s internal audit system is to make sure that its financial resources are being spent appropriately and in line with its objective. The audit system should have specific goals, like protecting assets, making sure donor criteria are met, and assessing how well programs and operations are working. The NGO can enhance its procedures and transparency by using this method to find any operational inefficiencies or financial misconduct.
A comprehensive risk assessment, which identifies important areas including financial transactions, procurement procedures, and legal compliance, should be the first step in the internal audit process. By looking into financial accounts, receipts, contracts, and the processes used to distribute resources, auditors will assess these areas. A report highlighting any inconsistencies or vulnerabilities discovered during the audit will be prepared, along with suggestions for improving controls and guaranteeing increased accountability.
Competent internal auditors who are not involved in day-to-day operations should make up the audit team. To make sure that money are being spent efficiently, they will routinely examine the NGO’s financial systems and internal controls. Depending on the organization’s size and complexity, the audit system should incorporate periodic audits, whether they are conducted monthly, quarterly, or annually. In order to determine the success of programs and make sure funds are being used for the intended goals, audits may also incorporate particular program assessments.
Lastly, the board of directors and senior management should be made fully aware of the internal audit is conclusions. This will enable them to take remedial measures in the event that required and to consistently enhance the organization’s governance. Frequent audits enhance trust with partners, donors, and the people the NGO serves in addition to fostering accountability and openness.
Author: Mohamed Yasin
