Monday June 30 2014

NGOs losing donors over poor accountability - report


Kampala- A new report on the management of the private sector and non-government organisations (NGOs) reveals that several NGOs are losing funding because of transparency and accountability gaps.

Findings from the study commissioned by Trade Mark East Africa, which were released last week, indicate that “many NGOs harbour fraudsters and embezzlers within themselves” because they do not have manuals to guide their fundraising, procurement, human resource management, risk assessment, anti-fraud, anti-corruption and internal accounting systems.

The report, which does not name specific donors pulling out of NGOs affected, comes against the backdrop of a move by donors to cut aid to government and re-channel it to civil society organisations following unearthing of corruption scandals in government and the passing of the controversial anti-homosexuality law.

The move had elicited debate with skeptics questioning if NGOs, which are not publically accountable were a better option.

Only last week, Mr Arthur Larok, the country director, Action Aid International Uganda, a key founder of the anti-corruption drive, Black Monday Movement was thrust in the limelight over a suspicious Shs600m land transaction in Seguku, Entebbe with a whistleblower allegedly being fired from the organisation. He denied any wrongdoing.

According to Mr George Egaddu, the lead consultant on the report, most of the NGOs and private sector organisations which were studied were found with weak financial systems to protect donor funds and resources under their care.

“PSI Consult was hired by Trade Mark East Africa to carry out consultancy to strengthen internal systems in accounting, procurement, fundraising, risk management, anti-fraud, whistle blowing and anti-corruption,” he said, adding that most of the organisations they studied lacked capacity to handle donor funds.

Mr Leonard Chitongo, one of the consultants, said most NGOs were found to be carrying out activities which are unrelated to the objectives for which they were formed. They also found out that many NGOs do not have mechanisms to monitor and evaluate their activities and as a result, they have deviated from their project objectives.

After assuming office, the Internal Affairs minister, Gen Aronda Nyakairima was quoted in the media warning NGOs against going contrary to what they are registered to do.

Government and civil society are currently locking horns over the NGO Act (amendment bill) seen as imposing a tighter grip on the organisations amidst a reducing civil society space.

“Some of them are too lean in structure that they cannot report to their donors and boards and with the donor fatigue, no donor would like to entrust their money to organisations which lack credibility,” he said. He added that most NGOs cannot meet their costs like rent, staff salaries, electricity and water bills which donors often do not fund and they end up encroaching on project funds.

Mr Job Kijja, the coordinator, citizen mobilisation at the Uganda National NGO Forum declined to comment on the findings, saying the organisation needed to first read the report.

He said: “The capacity of NGOs has been growing over the years when we used to have brief case NGOs and we should appreciate that.”

He said since NGOs are not publically accountable, the Quality Assurance Certification Mechanism (Quam) was devised as a tool to strengthen accountability in the sector.

Mr Simon Osborn, the country director, National Democratic Institute for International Affairs (NDI), which funds some NGOs, said: “...some NGOs and companies will make mistakes; question is how do we improve that? I think QUAM is a great initiative”.

Trade Mark East Africa is an organisation funded by several development agencies with the aim of growing prosperity in East Africa through trade.

It works with East African Community institutions, national governments, the private sector and civil society organisations.