| Abstract: | This paper seeks to expose the practices of financial management effectiveness systems in
international NGO sector in Addis Ababa, Ethiopia, based on the key effective financial management
components and reporting requirements; namely Financial Planning, Budgeting, Accounting Records,
Internal controls and Financial Monitoring. To achieve this purpose descriptive method of assessment
with qualitative and quantitative research approach wereused and data were collected by applying
randomsampling technique, five INGO`s were selected from the total population of twentythree.
Interviews with finance managers and questionnaires framework comprising of general
information data for background assessment and a Likert scale of 5 levels listing effective financial
management assessment questions were distributed to sample selected. The questionnaire responses
were analyzed using statistical tools of means and standard deviation as well as frequency tables and
the findings of the assessment showed a relatively strong level of good practice in the area of effective
financial planning, budgeting, recording, internal controls and financial monitoring. The major find
wasthe issue of meeting the administrative vs program ratio on yearly plans that gets submitted to the
ChSA as well as inclusion on yearly audits. This paper is expected to provide the INGO’s working in
different development sectors detailed assessment tools to monitor each category of the effective
financial management building blocks based on the results to better strengthen their system and work
out an enabling environment with governing bodies. Finally, theresearcher recommended: as means
to discharge responsibility & accountability and to showservice giving efforts, operational efficiency
and effectiveness to contribution to the developmentendeavor of the country, INGO`s should establish
a well-organized effective financial management systems:budget management, accounts record
keeping, internal control, reporting and monitoring.Senior management groupshouldmonitor
regularly the financial management system andshall give due attentionfor strengthening internal
control activities. Additionally, it is better for ChSA to make development partners/international
NGOs to involve in policy making which govern them. |
