| March 28, 2017
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Transparency and accountability in INGOs in Nepal

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The beauty of INGOs lies in their objectives of the delivery of services to the unreached people and community in a cost effective manner. Our main concern is whether the funds spent through INGOs are used for the right purpose, right place and right people. Monitoring the INGOs on financial grounds like bank accounts is just one step of the audit.

The bigger test is effective measurement of the delivery of the INGOS to the target group - local community and the local people- . Even if the financial papers are correct if there is no effective and proper use of the fund leading to inefficient delivery to the target group the bank account monitoring alone will not serve the purpose of gauging accountability .


According to the data provided by Social Welfare Council (SWC) there are 211 INGOS as of the year 2071-2072 BS where they have been serving in the fields like health, drinking water, sanitation, energy, disaster management training, agriculture, environment, education, and livelihood programs among others.

The article published in Republica "SWC, ministries fail to rein in erring organizations" written by SANTOSH GHIMIRE/ PUSPA RAJ ACHARAYA dated 27th April 2014 states that "only 14 out of 173 International non-governmental organizations (INGOs) working in Nepal have reported about their project and expenditure details to the government so far." Thus it is seen that there is a need to instill transparency and accountability in INGOS operating in Nepal.

Social Welfare Council (SWC)'s new measure where financial transaction of INGOS would be brought under government banking system (NRB) , SWC'S directive for INGOS to open bank accounts is a positive step which will no doubt aid in bringing transparency in the financial aspect in INGOS. Is just monitoring financial transparency through bank accounts of INGOs enough? It is one of the many steps that government should take up to bring transparency. This step will help in reduction of money laundering and foreign currency misuse. The SWC should conduct property management audit on a yearly basis which would give an idea of where particular INGO is heading and also indicate sources and uses of fund . The step taken by SWC is a good step but one wonders why SWC for so many years kept quiet and has suddenly introduced this control mechanism? Is it that the SWC saw a lot of fund coming through INGOs after the earthquake and suddenly decided to monitor the source and use of funds?

Nearly one-sixth of all the foreign assistance that comes to Nepal is received through international non-governmental organizations (INGOs), a government report said .Development Cooperation Report 2013-14, which was released by the Finance Ministry states that 16.7 percent of the aid Nepal received during the year was routed through INGOs. Out of the total aid of $1.24 billion provided to Nepal in the last fiscal, $208 million (around Rs 20 billion) was funneled through INGOs. This data shows that a large portion of development expenditure is managed by INGOS. Many INOGs have done a good job in delivering valuable services to the unreached people and community , in some cases , better than the government .But have all the INGOs used the large amount of money properly or spent most of it on consultants and management fees ? And the government, which gets the lion share, around 83.3 percent of foreign aid, should also be monitored for effective delivery.

Effectiveness of the INGOs in "reaching to the unreached"

Government should make plans to both allocate the sectors of work and geographically disperse the working of INGOs. Due diligence must be conducted before new INGOs are allowed to operate to ensure that they are dispersed geographically and also work in such fields like education , health , reproductive health, sanitation, among others, which need the most help. Many INGOs' head office and offices are in Kathmandu. If the main offices or more branch offices were located in far-western, far-eastern , remote hills , remote mountains and unreached Tarai or even in cities other than Kathmandu, then these areas would see more development as many service delivery and economic activities would take place there .

The government's belated decision of introducing transparency measures reveals SWC oversight on INGOs and indicates that it doesn't monitor their functioning in a planned manner and adopts ad-hoc measures on a trial and error basis.

INGOs, like any organization, run on trust and honest work of employees and on relationship and warmth between concerned people especially between INGOs and local people and community . The main concern is proper functioning of INGOs and reliable delivery of services and work to the community, which can only happen through good governance and good management .A corrupt management, can manipulate the financial statements in the banks in its favor and make it appear transparent. An organization's biggest asset and weakness are its employees. So financial audit must be accompanied by management audit also.

NGOs and INGOs in themselves are a good vehicle of providing service at a low cost. A lot of them have done good job reaching out to the poor. For effective monitoring, the government and SWC itself should be transparent and scrupulous. If a manager or a leader himself/herself is corrupt he /she cannot control and expect his/her staff subordinate staff not to be corrupt .CIAA cannot flex its muscles if it itself is corrupt. A weak and corrupt government won't be a good monitor of INGOs' transparency and accountability .

The excerpt below is taken from an article by Subash Ghimire published in Republica on 14 June 2015 "Of the 3.5 billon dollars in earthquake funds ,96 per cent was managed by INGOs in Haiti, with the Haitian government managing only one percent. Most of the 96 percent of the funds was spent on consultations, transportation and on expert opinion .The lack of local governments to oversee INGO work only fueled the corruption. Haiti is popularly known today as the ' republic of INGOs'. We do not want to see a replay of the same story in Nepal. New York-based ProPublica's recent exposé of the 'gross mismanagement of half a billion dollars' by the International Red Cross in the aftermath of the 2010 earthquake in Haiti provides useful insight into the workings of many international organizations in the developing world. They built just six houses and never trusted local wisdom and expertise in Carribean country's rebuilding efforts.

Unlike Haiti where vast epidemic affected the people and only six houses were made after the earthquake, Nepalese showed resilience, community feeling, compassion, brotherhood, sisterhood, and camaraderie and helped each other at the local level after the massive earthquakes of April 2015 and May 2015. Local people showed a lot of commitment and hard work in relief operations. Many houses, both temporary and permanent, were built. A large amount of food was distributed and much medical help was provided. Many people got involved in relief and rehab operations .Out of the many touching incidents, a poignant moment came when a young school girl took out money from her piggy bank and gave it to help the victims.

This shows that Nepalese are resilient and rise from the rubble to cope up with calamities. Hence if INGOs were honest and only used the money they got wisely, they would get a lot of support from their targeted group. INGOs with the help of the local community could make a big impact on the effective delivery to the poor.

Even with deluge of funds and networking INGOS will be ineffective if they cannot deliver. So, SWC should play a proactive role in ensuring effective delivery through INGOs. The step taken by SWC for transparency is a positive one, it should also scrutinize audit reports to know sources and uses of funds more closely. More geographical dispersal of INGOs should be made and due diligence must be done before new INGOs are allowed to operate to avoid duplication and ensure delivery effectiveness.

As they say a journey of a thousand miles begins with the first step ,similarly the journey for transparency and accountability of INGOS, although belated has begun . A corruption free, politically free SWC working in the national interest will be a good monitor for transparency test of INGOS and the Nepal government is urged to work in that direction.


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