Financial Malpractice and Risk of Financial Malpractice of NGOs in Ghana: Perspective of Donors

NGOs are the forefront of aid delivery and managing a large amount of aid funded projects. The impacts of these projects in developing countries like Ghana are very critical in alleviating poverty and improving the living condition of the vulnerable in society. The risks of financial malpractice in NGOs have been a concern to many stakeholders. The study examined the various forms of financial malpractices of NGOs, the impact of these malpractices in undermining the objectives of donor organizations and measures to reduce the risk of financial malpractice risk in NGOs. The study sampled 50 respondents form different donor and development organizations in Ghana through questionnaire and interviews. The results of the study show that those majority respondents have encountered financial practice by NGOs and as such it can be concluded that the risk of financial malpractice is real. Also, all the respondents answered in affirmative indicating that they are aware of the threat of financial malpractice by NGOs. The results also shows that billing for activities that did not take place and inflating prices on invoices, inflation of administrative and management fees, inflation of invoices for generated internally for activities performed by own staff, billing for own contributions, inflation of rental costs, submission of unacceptable receipts to cover expenditures, submission of curriculum vitae of very experienced professionals and using lower level staff to execute task but substituting invoices for experienced staffs are common forms of financial malpractice by NGOs. Responses from the donor agencies and development partners revealed that the major impact of NGO financial malpractice to them is the delay in executing the projects. The use of strict monitoring, regular audits, and participation in projects execution are the key measures adopted by donors to manage financial malpractice risk in NGOs.