What goes into an NGO Financial Management Policy?

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An NGO financial management policy is basically a manual that covers the accounting policies, systems and procedures of the organization. It is developed not only for governing the financial transactions of the organization so that its staff can follow the set systematic procedures but also to fulfill local statutory requirements and demonstrate the strong management practices adopted by NGOs.

When you begin developing your NGO Financial Policy, you need to given introduction to it as given below:

“1. Introduction

1.1 Scope of the NGO Financial Management Policy

The NGO Financial Management describes the accounting policies, systems and procedures to be used by the organization. The Policy will cover the input, processing, output, control and distribution of financial data. It has been developed to set out the accounting policies and procedures that will:

a) Ensure that the organization’s books of accounts are prepared to conform to sound accounting principles and practices.

b) Enable the management to obtain accurate and timely financial reports on monthly basis, thereby promoting sound financial management.

c) Ensure correct and accountable use of funds and other resources. The approach used is in line with generally accepted accounting principles and organizations best practice reporting requirements.

The main purpose of the Policy is:

a) To assist in the maintenance of controls.

b) To provide a training and monitoring resource.

c) To be used as a reference document by the staff, management, auditors and other stakeholders.

The procedures have the following objectives:-

a) To enhance completeness and accuracy of the data posted from source documents (say invoices, payments receipts, journal and cashbook) to the computerized system.

b) To provide accurate and reliable reports to enable management to perform effective control over the operations of the organization.

c) To detail the operation and administration procedures for input, processing, output and distribution of data to ensure security of data and documents.

The Policy has been written for use as follows:

a) As a means of reference to management, supervisors, new and existing accountants staff, auditors, and as the basis of training staff, and ensuring that appropriate controls are in place.

b) As a clearly defined list of the tasks to be carried out by each individual

c) As a timetable for processing transactions and producing reports

d) As a guide to evaluators and any monitoring consultant who may wish to review the institution’s progress.”


  1. Turyatunga Joseph says:

    This is to extend my innermost and heart felt thanks to Funds for NGO Team for this information.
    I studied Bachelor of Public Administration of Gulu University-Uganda (East Africa) and i work as a contracted General Sectretary for an NGO, rely this information is vital and relevant in my field of wokr. I had planned to take a short in Finance management courseand Human Resource management but am pleased to testify that i now full package of what i needed to go and study from school.

    May God Almighty bless you and your work!

    Thank you once more, please, keep on sending me such vital information i love them. Am a student and i will continue searching for more knowledge, skills and information till i reach my Destiny.

    Turyatunga Joseph