GAD conquering corporate
governance for NPOs
In South Africa we are faced with so many socioeconomic
issues that hinder us as country to move forward. Issues such
as high unemployment rate, lack of adequate education and
crime including corruption. As a country we are really battling
with these issues and the role of non profit sector has never
been more important than this time.
We believe in South Africa where all community development
organs are compliant and corrupt free through strong financial
governance for the organs to achieve their missions such
organs must be supported and provided capacity which will
build them to be financially sustainable.
Financial Governance has many components however
accountability is the most important component. We don’t
hold each other accountable enough and which is why it has
been said there is no leadership in South Africa. What we have
found in the non profit sector has been lack accountability due
to lack of capacity (include capability), inadequate structures
on governances and dual roles people being CEO and
Founder. Whilst capacity and capability is root cause affecting
the sector since they cannot afford to attract the right skills
but also donor consistently limit amount for administration
costs. Lack of good governance consequently affects the
overall performance of organisation from operational to
managerial systems and execution of programme, resulting
to organisations not being sustainable.
Where can you start as Non profit Organisation on
governance?
Conduct self evaluation what has been going on your
board meetings including from administration of board,
attendance, contribution of members, etc. Where you
find that there are different opinions discuss and come
to some conclusion.
Look at your core operations and ask yourself what skills
is required to run the project effective and efficiently.
This should be done for the whole organisation not just
oversight structures.
Ask yourself as Leader …what have been key challenges
in human capital that have been the reason why you are
unable to achieve your mission and vision.
Conduct skills audit by issue skills questionnaire for
your board members to complete for them to provide
what skills set they possesses and matching the skill
required and skill that exist and provide feedback back
to board on the gap and plan of action.
In our experience, disorder in governance is due to
lack of
Code of Conduct … in other cases it exists but not
enforced.
Documented policies and procedures on accepting
and dismissing members, attendance, roles and
responsibilities, admin for distribution of board packs,
confirming attendance, etc.
Orientation – core of business, strategy and operations
and role of board on those structures. Training of new
board members on what is expected by organisation,
regulators and donors.
Confusion of dual responsibility of founder and role of
chief executive officer consistently disempowers board
members to rule on matters irrespective of founder’s
view.
We are often asked…. why governance matters to
us as Auditors?
Our views and belief are simple … where there is no
governance… there is no accountability. Our report as auditors
need to be reviewed and accepted by correct structure that
understands and know implications of weakness findings.
This requirement exists irrespective of organ structure being
for profit or non profit or government. We cannot implement
controls for organisation we serve that will lead to impairment
of independence as auditors however we can recommend on
these matters but the governance structure needs to ensure
that corrective actions are taken within specific time and
someone is accountable.
In light of above …. how we work at GAD
The non profit and SMEs sectors present few specific challenges
for us as Auditors. These sectors cannot afford market related
audit fees. When we conduct audit in this environment it
present a special issue of lack of internal controls including
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CORPORATE SOCIAL REVIEW