How to report to your project beneficiaries

Most finance staff don’t interact with beneficiaries all that often. Most field staff don’t feel very comfortable with finances. Presenting financial information to beneficiaries requires finance and program staff to work together as a team and step outside their comfort zones.

Who should do it?

  • Finance staff needs to provide the appropriate figures (see content below)
  • Program staff will need to advise on the appropriate presentation style

NGOs might consider making finance staff responsible for providing financial reports to local communities. This can provide useful segregation of duties between program staff and finance staff.

How should it be done?

Financial reports must provide information that is:

  • useful for users, and
  • in a style that is easy for users to understand.

Principles

The following guidelines set out some principles which can help achieve this when preparing financial reports for beneficiaries. NGO staff will need to consider how to apply the principles in the different circumstances they face.

  • Language
    Reports should be provided in a language that as many beneficiaries speak as possible, and ideally in their mother tongue. Short reports are normally easy to translate. The goal is to help all beneficiaries understand the financial position, not just a handful of representatives.
  • Content
    The aim of reporting to beneficiaries is to help people understand what has been spent on their behalf. So content should be relevant to local people, about the specific activities that NGOs have carried out on their behalf. Simple reports which show expenditure compared to the budget often work well.
  • Which expenditure?
    Expenditure can be summarised by activity, or by geographical area, or by budget line – or by some combination of these.   The total budget for each activity, area or budget line should also be shown against the actual expenditure.  Good practice suggests that full project costs should be made available. However, it may not be practical to publish sensitive salary information.  A report setting out direct project costs is likely to be much better than nothing.
  • Length
    As a rule of thumb, each financial report should have no more than 15 lines of information: more lines make reports confusing.
  • Frequency
    Frequent reporting enables beneficiaries to learn and practice how to read and interpret financial data. Up to date reporting also means the NGO gets timely feedback and input, while memories are fresh and there is time to take actions as needed. As a rule of thumb, reports should be presented monthly, or at least quarterly.
  • Currency
    Reports should be presented in local currency.
  • Presentation
    Normally, NGOs should aim to make financial reports publicly available at the community level. Reports can be written upon white-boards or flip-charts which are publicly displayed at NGOs’ offices, health centers, or distribution points. Paper copies of reports can be made freely available at the same places. Some NGOs have published summary reports in newspapers and other local media. Financial information can also be presented visually, using simple graphs or charts which people may find easier to understand than numbers.

 

Sample Resources:

Example of day-to-day reporting: Rudi comes home

 November 2005

On Friday afternoon, Rudi had successfully persuaded his mother to give him $8.00 to go into town, have a burger and go to the cinema. His budget was:

 

Item Amount

(in $)

Notes
Travel 1.50 2 x 75c bus fares
Food 3.50 $3.00 for a burger, 50c for popcorn in the cinema
Tickets 3.00
TOTAL 8.00  

 

Reporting back

On Saturday morning, Rudi’s mother asked how he enjoyed the evening.  He reports that the film was very good and that he and his friends had a very entertaining evening even though it did not go entirely according to plan… After going to the burger bar, Rudi and his friends arrived at the cinema to find that all the $3.00 seats were sold out and they had to spend an extra $1.00 each on the more expensive seats.

This meant that Rudi did not have enough money left to buy popcorn in the cinema or to get the bus back home again.  Fortunately, he met the parents of some school friends in the cinema lobby and they offered to give him a lift home after the film, which he gratefully accepted.

So his “Budget Compared to Actual Report” was:

 

Item Original
Budget$
Actually
Spent$
Difference

$

Travel 1.50 0.75 0.75
Food 3.50 3.00 0.50
Entrance Fee 3.00 4.00 (1.00)
TOTAL 8.00 7.75 0.25

 

We can see the effect of Rudi arriving too late to buy cheaper cinema tickets.  He overspent by $1.00 on the entrance fee, but because he didn’t have enough to buy his bus fare back home (and got a free lift home instead), he also made an overall saving of 25 cents.

 

Course handbook

Financial management essentials: Handbook for NGOs

Mango’s Handbook is a comprehensive introduction to the essentials of financial management for NGOs.  It is ideal for those with little experience in finance.

Chapters include:

  • Designing a finance system
  • Planning and budgets
  • Understanding accounts
  • Financial reports
  • Safeguarding your assets
  • Managing audit

The Handbook is not a substitute for a training course!  Available to Network Partners