How to develop Financial Reports in NGOs – NGO Financial Management Policy

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Financial reports are developed for internal use such as monitoring expenses within the organization and also for external use such as for submitting reports to donor agencies. In many cases, there can be separate formats for both the uses. Nevertheless, it is important that the internal financial reports are properly developed according a guideline. Below is the procedure that can be adopted for developing internal financial reports:

14. Reports

14.1 Monthly Accounts

The  financial  reports  and  schedules  as  prescribed  below  should  reach  the relevant persons before the 10th  of the following month as per the following dates:

The following reports on financial information will be produced by Accounts for internal and external use.

Types of Financial Report

14.2 Monthly Expenditure and Variance Report

A Monthly Expenditures and Variance Report that reflects the expenditures incurred during the month for each line item and the total expenditure incurred for the month. It also gives the cumulative expenditures incurred to date and the available balance on the budget.  The report is due to Avert Society by the 10th day of the ensuing month.  See Annexure B for a sample of the report.

Where there is a budget variance, particularly over spending on a budget line item, or introduction of a new set of activities in a budget column, the report should state if the variance is:

1. Permitted under the terms of this grant;
2. Unanticipated and requires approval”