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introduction to financial monitoring

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The latest in the 'building blocks' series, this slideshow introduces financial monitoring and the role it plays in NGO financial management.

Published in: Government & Nonprofit
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introduction to financial monitoring

  1. 1. Financial management for NGOs Financial monitoring www.mango.org.uk
  2. 2. www.mango.org.uk Did you know that there are 4 essential building blocks in a strong financial management system?
  3. 3. www.mango.org.uk
  4. 4. www.mango.org.uk This is about keeping an accurate and complete record of all financial transactions – for accountability and transparency.
  5. 5. www.mango.org.uk
  6. 6. www.mango.org.uk We have to plan ahead to make sure we have the money we need to achieve our objectives, now and in the future.
  7. 7. www.mango.org.uk
  8. 8. www.mango.org.uk This is about keeping track of progress against our plans and sharing how we are doing with key stakeholders.
  9. 9. www.mango.org.uk
  10. 10. www.mango.org.uk We have a duty to protect our financial resources and staff from internal risks such as accidents, theft and fraud. We do this by implementing a series of commonsense controls and checks.
  11. 11. www.mango.org.uk This slideshow introduces the financial monitoring process
  12. 12. www.mango.org.uk The building blocks are closely interlinked. Their systems and procedures overlap and complement each other.
  13. 13. www.mango.org.uk The building blocks are closely interlinked. Their systems and procedures overlap and complement each other. To do financial monitoring, you need data from the accounting records and budgets produced during the financial planning process.
  14. 14. www.mango.org.uk  Financial monitoring systems produce a range of financial reports to enable key stakeholders to scrutinisethe figures, review progress in programmes, and decide on follow-up actions as needed.
  15. 15. www.mango.org.uk Financial reports must be timely, accurate and relevant
  16. 16. www.mango.org.uk There are two main audiences for financial reports…
  17. 17. www.mango.org.uk Managers and trustees need financial information to track progress in programmes 1. Internal stakeholders
  18. 18. www.mango.org.uk Donors, government agencies and local communities need financial reports for accountability. 2. External stakeholders
  19. 19. www.mango.org.uk Budget monitoring reports to compare the budget with actual spending and income, to assess progress and decide what action is needed Internal stakeholders use…
  20. 20. www.mango.org.uk Review Prepare budgets
  21. 21. www.mango.org.uk Review Receive & spend project funds Prepare budgets
  22. 22. www.mango.org.uk Review Receive & spend project funds Prepare budgets Compare the budget with actual activity
  23. 23. www.mango.org.uk Review Receive & spend project funds Prepare budgets Compare the budget with actual activity Take action as needed to get back on track
  24. 24. www.mango.org.uk The annual financial statements which provide a summary of the financial results External stakeholders use…
  25. 25. www.mango.org.uk The annual financial statements which provide a summary of the financial results Donor reports which give an update on the use of project funds External stakeholders use…
  26. 26. www.mango.org.uk Annual financial statements Income & Expenditure statement
  27. 27. www.mango.org.uk Annual financial statements Income & Expenditure statement Balance sheet 
  28. 28. www.mango.org.uk Annual financial statements Income & Expenditure statement Balance sheet INCOME – EXPENDITURE = OUTCOME Surplus or deficit? 
  29. 29. www.mango.org.uk Annual financial statements Income & Expenditure statement Balance sheet LIABILITIES Things we OWEASSETS Things we OWN INCOME – EXPENDITURE = OUTCOME Surplus or deficit? 
  30. 30. www.mango.org.uk Annual financial statements Income & Expenditure statement Balance sheet ASSETS – LIABILITIES = EQUITY What are we WORTH? LIABILITIES Things we OWEASSETS Things we OWN INCOME – EXPENDITURE = OUTCOME Surplus or deficit? 
  31. 31. www.mango.org.uk Financial reporting is essential for… Successful project management
  32. 32. www.mango.org.uk Financial reporting is essential for… Successful project management Building credibility and trust
  33. 33. www.mango.org.uk Want to lean more about budget monitoring? Then join us on one of our practical and fun courses soon. Budget monitoring essentials eWorkshop now available! http://www.mango.org.uk/training training@mango.org.uk
  34. 34. www.mango.org.uk Find out more about Mango and free resources for NGOs http://www.mango.org.uk/guide

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