1

Audit of Grants Awarded to GOAL in 2009

Under Irish Aid’s Multi Annual Programme Scheme II

and

Emergency and Recovery Funding Schemes

Evaluation and Audit Unit

December 2011

2

Table of Contents

1. Executive Summary ....................................................................................................................................................... 3

1.1 PURPOSE OF THE AUDIT ......................................................................................................................................................... 3

1.2 BACKGROUND AND TERMS OF REFERENCE ................................................................................................................................. 3

1.3 METHODOLOGY ................................................................................................................................................................... 4

1.4 SUMMARY FINDINGS ............................................................................................................................................................. 4

2. Introduction .................................................................................................................................................................. 8

2.1 AUDIT CONTEXT ................................................................................................................................................................... 8 2.1.1 Background and Terms of Reference ....................................................................................................................... 8 2.1.2 Organizational Profile .............................................................................................................................................. 9 Table 1: GOAL funding Sources 2009 and 2010 (Audited Financial Statements) ........................................................... 10

3. Findings and Recommendations .................................................................................................................................. 10

3.1 GOVERNANCE AND ORGANIZATIONAL STRUCTURE .................................................................................................................... 10 3.1.1 Governance ............................................................................................................................................................ 10 3.1.2 Senior Management .............................................................................................................................................. 11 Table 2: Staff Numbers 2007-2010 ................................................................................................................................. 11

3.2 RISK MANAGEMENT............................................................................................................................................................ 12

3.3 STRATEGIC PLANNING ......................................................................................................................................................... 13

3.4 PROGRAMME CYCLE MANAGEMENT ...................................................................................................................................... 13 3.4.1 Programme Framework ......................................................................................................................................... 13 Table 3: Maps Funding 2007-2010 by Country ............................................................................................................... 14 3.4.2 Monitoring and Evaluation (M&E) ......................................................................................................................... 15 Table 4: MAPS Funding 2007-2010 by Sector ................................................................................................................. 15 3.4.3 Management Information Systems ....................................................................................................................... 15

3.5 INTERNAL FINANCIAL CONTROLS AND ACCOUNTING SYSTEMS ..................................................................................................... 16

3.6 MANAGEMENT OF RELATIONSHIP WITH IMPLEMENTING PARTNERS .............................................................................................. 17

3.7 COST STRUCTURE ............................................................................................................................................................... 18 Table 5: MAPS Funding Components .............................................................................................................................. 18

3.8 FUNDING AND RESERVES ...................................................................................................................................................... 19 3.8.1 Funding Profile ....................................................................................................................................................... 19 Table 6: Analysis of Funding Sources .............................................................................................................................. 19 Table 7: MAPS and Co-Funding 2007-2010..................................................................................................................... 20 Table 8: Unrestricted Reserves (Audited Financial Statements)..................................................................................... 21 3.8.3 Restricted Reserves ................................................................................................................................................ 21

3.9 AUDIT .............................................................................................................................................................................. 22 3.9.1 External Audit ........................................................................................................................................................ 22 3.9.2 Internal Audit ......................................................................................................................................................... 22

4. Conclusion ................................................................................................................................................................... 22

Appendices ...................................................................................................................................................................... 24

APPENDIX 1: TERMS OF REFERENCE ............................................................................................................................................. 24

APPENDIX 2: SUMMARY OF RECOMMENDATIONS AND MANAGEMENT RESPONSES. .............................................................................. 29

3

1. Executive Summary

1.1 PURPOSE OF THE AUDIT

The purpose of the audit is to:

1. Independently examine and report whether Irish Aid funds have been used to support the programme

objectives as agreed in partnership with GOAL; if expenditure has been incurred in accordance with

the terms and conditions of the agreements between Irish Aid and GOAL and has been accounted for

in a proper manner;

2. Examine and report, from the viewpoint of overall accountability, as to the adequacy of the

governance, management and internal control systems of GOAL; and

3. Assess compliance with funding requirements and ratios of Multi Annual Programme Scheme II

guidelines.

1.2 BACKGROUND AND TERMS OF REFERENCE

This audit took place in the context of the Multi Annual Programme Scheme (MAPS) II funding

framework for NGOs 2007-2011, and was carried out between March and July 2011 by the Evaluation

and Audit Unit of the Department of Foreign Affairs and Trade (Terms of Reference are attached in

Appendix 1). The work focused on the current systems and processes in operation and the financial

information for the calendar year 2009 (GOAL‟s latest available audited financial statements at the time

of audit) and included work at GOAL Headquarters in Dublin plus two selected country operations (North

Sudan, Malawi). GOAL‟s 2010 audited financial statements were issued on 30th

September 2011 and

shared with Irish Aid on 6th

October.

Following on from this work, a meeting to discuss the preliminary audit findings with GOAL

management was held on 26 July 2011. GOAL was invited to respond to issues raised during this meeting

by providing the audit team with any additional documentary evidence prior to preparation of the first

draft report. A further email reminder of this invitation was sent to GOAL on the 28th

August 2011. Some

additional audit documentation was provided at a meeting on the 6th

October 2011. The first draft of this

audit report was then issued to GOAL for comment and management response on the 25th October 2011.

The draft report with partial management response was received from GOAL on the 11th

November 2011.

The draft was subsequently sent back to GOAL on the 28th

November 2011 with a request for completion

of management response by the 5th

December 2011. After a number of requests, this was finally received

on the 12th

December 2011.This management response is included in Appendix 2.

4

1.3 METHODOLOGY

The audit methodology conforms with the Irish Aid‟s Audit Approach for Civil Society Organizations

funded under the MAPS Scheme1. Accordingly, following assessment of the quality of the external and

internal audit functions, substantial reliance was placed on these audit assurance mechanisms. Audit work

primarily comprised review and analysis of relevant documents plus interviews with key sources in

GOAL (including Board members, CEO and senior management team, internal auditor, plus relevant

managers and staff in the two country programmes visited) as well as outside the organization (personnel

in Irish Aid‟s Emergency and Recovery and Civil Society Sections, GOAL‟s external auditors at HQ and

external auditors at country operations visited).

The scope of the audit was limited by the unavailability of certain documentation requested by the audit

team within the timescale of the audit. This includes terms of reference for the Board and its sub-

committee, Board agenda for meetings, minutes of meetings of the main Board, a copy of the report on

the internal review of security in the field and information on succession planning for the Board and

senior management.

1.4 SUMMARY FINDINGS

Over the MAPS II period GOAL management has made progress in developing many aspects of the

programming and organizational systems. An appropriate structure is in place for programming MAPS II

funds, and a monitoring and evaluation system including baselines and indicators has been rolled out in

the field. A roving technical team of sector and process experts provides key capacity and quality control

over many aspects of programming and acts as an important link between HQ and field operations.

Financial systems include a comprehensive procedures manual and a single accounting software

application (Sage) is used throughout the organization, plus effective field budget control and financial

reporting tools (in the form of the Donor Status Report and Budget Management Tool). While this report

includes some further suggested improvements, these are intended to build on the solid base developed in

recent years.

GOAL is governed by a Board of Directors. The Board has no specific terms of reference defining its role

or a self-development policy (i.e. ensuring that the Board comprises or has access to the appropriate range

of experience and expertise).There was no evidence of a delegation and oversight relationship with

management. There is one Board Subcommittee - Audit and Finance2 (also operating without a Terms of

Reference). In 2009 the Board was comprised of 9 members, though this had reduced to 5 during the time

of this audit3. The Board is comprised primarily of professionally qualified Irish businessmen and appears

to function relatively informally. The Board reportedly meets 6-8 times per annum without, it appears, a

pre-set agenda. In terms of profile and focus, the Board has much experience in the area of business

1 Irish Aid, Evaluation and Audit Unit, June 2008

2 Comprising one Board member and three external experts, all of whom are professionally qualified accountants, but none

of whom have development expertise or experience. 3 Of whom 4 subsequently resigned on 22

nd August 2011 and were immediately replaced with 6 new members (per Audited

Financial Statements for the year end 31 December 2010, issued 30 September 2011).

5

management, though lacks technical expertise or experience in the area of development. Whilst the Board,

through its Audit & Finance Committee, puts a strong focus on financial management and cost issues, it

appears less actively engaged in other critical governance areas such as organizational risk assessment and

strategic planning, which are delegated to management. Due to the limitation of scope in this audit work it

is difficult to assess whether the Board undertakes, or has the necessary skills‟ profile to either lead such

processes or critically review management proposals from a development perspective. This raises

questions regarding the longer-term sustainability of the organization as a whole, including structures and

systems for accountability of public funds.

While the Board profile appears capable in the area of business management (particularly financial

management), the scope of relevant skills could be broadened to include for example development

expertise and experience of the international aid context in which GOAL operates. On this basis, under

Audit Purpose 2 below, we recommend that the Board‟s role and composition be strengthened so as to

enhance decision-making and oversight, and ultimately better assure accountability at the highest level of

the organization. GOAL‟s internal financial control and accounting systems are generally appropriate and

effective. These include a capable internal audit function, and an extensive external audit approach (HQ

and all field operations are audited annually, plus donor specific audits may be undertaken). On this basis,

we report under Audit Purpose 1 that in our opinion Irish Aid funding in the period under review has

been used to support the programme objectives as agreed in partnership with GOAL, expenditure has

been incurred in accordance with the terms and conditions of the agreements between Irish Aid and

GOAL (with one minor exception as set out in Section 3.7 of this report), and has been accounted for in

the proper manner.

With regard to Audit Purpose 2 we find that the management and internal control systems are adequate

for operational purposes and note that implementation has been overseen by the Board of Directors

(through its Finance and Audit Sub-Committee). However, we have found less evidence of effective

Board engagement and oversight with regard to other aspects of the governance function, as follows:

a) Setting the organizational funding profile;

b) Guiding strategic planning, and;

c) Establishing the senior management structure.

Regarding the organizational funding profile, over the MAPS II period the following trends are

noteworthy (please see Tables 6 and 7 of this report for further detail):

Development programming has become proportionately less significant, in comparison with

emergency operations. For example, emergency expenditure amounted to 27% of total charitable

expenditure in 2007, 37% in 2008 and almost 50% in 2009 and 2010;

The proportion of GOAL and 3rd

party donor investment in co-funding MAPS programmes has

diminished, and;

6

Voluntary unrestricted income is declining4.

Over the period GOAL has become more donor dependent, and emergency operations have grown in

significance compared with development programmes. Diminishing unrestricted voluntary funds restrict

the Boards autonomous capacity to act independently and invest in GOAL‟s own priority objectives or

programmes. These trends potentially undermine the sustainability of existing development programmes

and quality processes, particularly those which have been funded under MAPS II to date.

With respect to strategic planning, many of the developments in systems and programmes achieved

during the MAPS II period (and outlined at the start of this section) were defined within the Strategic Plan

2007-20115. The gains achieved are laudable, but it is noted that the plan appears to have taken shape in

the context of a joint benchmarking process undertaken between GOAL management and Irish Aid

(underpinned by the MAPS funding framework) rather being driven by the GOAL Board as an important

institutional exercise per se.

In view of the limitation of scope set out in methodology section 1.3 above, the audit was unable to

establish the level of Board engagement in setting the agenda and parameters for the strategic planning

process. Consequently this raises uncertainty as to the sustainability of these improvements as core

organizational priorities, particularly in the context of the funding trends outlined above.

The senior management group has generally performed effectively both in running operations and

developing organizational systems over the MAPS II period. However, the structure at senior

management level is unclear (due to posts being described as „acting‟), with the creation in 2009 of two

new positions under the CEO which at the time of the audit were still acting. A clear strategy driving

these changes at senior management level, and the stability of the current structure is not evident.

Audit Purpose 3 is closely related to the voluntary funding flows discussed above. Funding proportions

have hovered near the threshold of the MAPS II liquidity ratio guideline6, without a discernible trend over

the MAPS period to date. It is not yet clear whether GOAL will be technically compliant with the

liquidity ratio over the MAPS II period, but the more important issue to which the ratio relates is GOAL‟s

capacity to have reasonable levels of unrestricted reserves (GOAL‟s own funds) available to invest in

development (including MAPS funded) programmes and processes. As noted above, this is uncertain.

Within these broad findings other selected matters arising under the scope of the audit are as follows:

4 Voluntary unrestricted income was 12.9% of total income in 2007, compared with 8.25% in 2010, and declined 20% in

monetary terms over that period. 5 At the time of this audit the process of planning a strategy for 2012 and beyond was at a nascent stage, with little detail

available regarding the process or parameters. 6 Whereby participating agencies are expected to generate 30% of their total income in the form of voluntary funds raised in

Ireland or demonstrate a capacity to do so incrementally over the period of MAPS II. In practice this ratio has been calculated as total voluntary income (restricted and unrestricted) as a proportion of total voluntary income plus development grant income. GOAL ratios were compliant but declining in 2007 and 2008, and fell below the threshold in 2009, but increased again in 2010 (see Table 6 of this report).

7

The scale and nature of engagement with local NGO partners in the field does not appear to match

expectations under the MAPS Guidelines. For example the 2010 audited financial statements show that

approximately 8% of total charitable expenditure was sub-granted to local NGO partners in that year. In

addition, an external evaluation7 found that the relationships with NGOs may tend toward instrumental

rather than long term capacity building developmental objectives. Although a tracking database is

maintained, disaggregated financial information (showing investment in partner capacity building

separate from programming etc.) was not available.

A Monitoring and Evaluation system including standard baseline and performance indicators has been

developed and implemented in the field, and data outputs are now being produced regularly. However, the

application of Results Based Management techniques in using the data reported for comparative analysis

and programme decision-making is not yet clear.

Many of the potential improvements to the financial systems and reporting, Management Information

System, and Human Resources systems set out in this report had also been identified by GOAL

management. We recommend that they proceed with plans to implement the systems upgrades within an

appropriate timeframe.

7 Intrac 2010

8

2. Introduction

2.1 AUDIT CONTEXT

2.1.1 Background and Terms of Reference

The audit took place in the context of the Multi Annual Programme Scheme (MAPS) II funding

framework for NGOs 2007-20118. The audit work, which was carried out by Evaluation and Audit Unit

of the Department of Foreign Affairs and Trade between March and July 2011, focused on the current

systems and processes in operation and the financial information for the calendar year 2009 (GOAL‟s

latest available audited financial statements at the time this audit took place) and included work at GOAL

Headquarters in Dublin plus two selected country operations (North Sudan, Malawi). Following this, a

meeting to debrief with GOAL management on the preliminary audit findings was held on 25 July.

GOAL‟s 2010 audited financial statements were finalized in September and shared with Irish Aid on 6th

October. The scope of the audit per Terms of Reference (Appendix 1) is as follows:

Governance and organizational structure

Risk management

Strategic (including financial) planning

Programme cycle management (including Monitoring and Evaluation)

Internal financial controls and accounting systems

Management of relationship with implementing partners, where applicable

Cost structure

Funding and Reserves

Audit – external and internal

The audit methodology conforms to the Terms of Reference and Irish Aid‟s Audit Approach for Civil

Society Organizations funded under the MAPS Scheme9. Accordingly, following assessment of the

quality of the external and internal audit functions, substantial reliance was placed on these audit

assurance mechanisms. Audit work primarily comprised review and analysis of relevant documents plus

interviews with key sources in GOAL (including Board members, CEO and senior management team,

internal auditor, plus relevant managers and staff at the two country operations visited) and outside the

organization (Irish Aid Emergency and Recovery Section and Civil Society Section personnel, external

auditors at HQ and country operations visited).

Following on from this work, a meeting to discuss the preliminary audit findings with GOAL

management was held on 26 July 2011. GOAL was invited to respond to issues raised during this meeting

by providing the audit team with any additional documentary evidence prior to preparation of the first

8 Irish Aid, MAPS II Guidelines for NGOs Final Working Guidelines, 10 March 2006

9 Irish Aid, Evaluation and Audit Unit, June 2008

9

draft report. A further email reminder of this invitation was sent to GOAL on the 28th

August 2011. Some

additional audit documentation was provided at a meeting on the 6th

October 2011. The first draft of this

audit report was then issued to GOAL for comment and management response on the 25th October 2011.

The draft report with partial management response was received from GOAL on the 11th

November 2011.

The draft was subsequently sent back to GOAL on the 28th

November 2011 with a request for completion

by the 5th

December 2011. After a number of requests, this was finally received on the 12th

December

2011.The management response is included in Appendix 2.

The scope of the audit was limited by the unavailability of certain documentation requested by the audit

team within the timescale of the audit. This includes terms of reference for the Board and its sub-

committee, Board agenda for meetings, minutes of meetings of the main Board, a copy of the report on

the internal review of security in the field and information on succession planning for the Board and

senior management.

We would like to express our appreciation to the Board, managers and staff of GOAL, as well as their

auditors, for their assistance. Personnel encountered at all levels of the organization demonstrated

professional competence and a genuine commitment to their work. We would also like to thank our

colleagues at Irish Aid Civil Society and Emergency and Recovery Sections for their cooperation in the

planning and implementation of this audit.

2.1.2 Organizational Profile

GOAL was founded as a Trust in 1977 and describes itself as an international humanitarian organization

dedicated to alleviating poverty in underdeveloped countries. In 1996 the Trust was transferred to a

Company limited by guarantee (5 members) registered in Ireland with charitable status. The GOAL group

also comprises 3 subsidiaries: GOAL International (UK company registered as a charity); GOAL USA

Fund (non-profit corporation); and GOAL UK (dormant trust).

With a budget of approximately €65 million per annum, the agency provides emergency and development

assistance in 12 countries (of which 9 in Africa). GOAL employs some 50 staff at Headquarters, plus 100

„GOALies‟ and 2,000+ national staff in the field. Table 1 below sets out the funding profile for 2009

(latest audited financial statements available during the time this Irish Aid audit work was performed) and

2010.

10

Table 1: GOAL funding Sources 2009 and 2010 (Audited Financial Statements)

Income Source 2009

%

2009

€,000

2010

%

2010

€,000

Irish Aid MAPSII 21% 14,230 19% 14,230

Irish Aid Humanitarian Funding 3% 2,174 4% 2,649

Other Donor Funding (Emergency and

Development)

32% 20,835 45% 33,099

Donations-in-Kind10 31% 20,204 12% 9,006

Voluntary and Other Income 13% 8,407 20% 14,443

Total Income All Sources 65,850 73,427

3. Findings and Recommendations

3.1 GOVERNANCE AND ORGANIZATIONAL STRUCTURE

3.1.1 Governance

GOAL is governed by a Board of Directors. The Board has no specific terms of reference defining its

role, self-development policy (i.e. ensuring that the Board comprises or has access to the appropriate

range of experience and expertise), delegation and oversight relationship with management etc. There is

one Board Subcommittee -Audit and Finance11

- also operating without Terms of Reference). In 2009 the

membership was 9, reducing to 5 during the time of this audit12

.

The Board is comprised primarily of professionally qualified Irish businessmen and appears to function

relatively informally. Minutes were not made available, but it reportedly meets 6-8 times per annum

without, it appears, a pre-set agenda. In terms of profile and focus, the Board may be considered relatively

strong on business management, while weaker in the area of development expertise or experience. For

example, through the Audit & Finance Committee, the Board puts a strong focus on financial

management and cost issues, but it appears less actively engaged in other critical governance issues such

as organizational risk assessment and strategic planning, which are delegated to management.

Referring to the limitation of scope outlined in methodology section 1.3, it is difficult to assess whether

the Board undertakes, or has the necessary skills‟ profile to either lead such processes or critically review

10 Donations-in-kind are those donations that are goods and services rather than money (or cash).

11 Comprising one Board member and three external experts, all of whom are professionally qualified accountants, but none

of whom have development expertise or experience. 12

Of whom 4 subsequently resigned on 22nd

August 2011 and were immediately replaced with 6 new members (per Audited Financial Statements for the year end 31 December 2010, issued 30 September 2011).

11

management proposals from a development perspective. This may reduce the longer-term sustainability of

the organization as a whole, including structures and systems for accountability of public funds.

Recommendation 1: that the Board considers introducing:

a) A more formal and transparent modus operandum (e.g. Terms of Reference, pre-set agendas etc.) and;

b) Policies on board composition and self-development aimed at strengthening the range of skills and

experience either comprised within the Board or to which it has access.

3.1.2 Senior Management

In terms of structure, the Senior Management Team is headed by GOAL‟s founder and Chief Executive

Officer (CEO) John O‟Shea, to whom five departmental heads were reporting in 2009. Since then there

have been several adjustments to the structure, including the creation in 2009 of two senior acting

positions under the CEO – Chief Operations Officer (COO) and Head of Programmes (HoP) - overseeing

the rearranged departments (except Fundraising which continues to report directly to CEO)13

. A clear

strategy driving these changes at senior management level, and the stability of the current structure (under

which the COO and HoP posts remain acting) is not evident.

Recommendation 2: that a stable and sustainable senior management structure is put in place.

Regarding performance, operational management appears capable and competent, and the senior

management team has overseen progress on many of the systemic and process improvements set out in

the Strategic Plan 2007-11. GOAL management have used the benchmarking process undertaken with

Irish Aid, together with the MAPS framework and funding components14

, to positive effect in developing

management and programming systems, quality processes and organizational capacity. Field management

systems and personnel generally appear satisfactory with appropriately experienced, motivated and

qualified staff. They are supported by a roving team of technical experts which play a key role in linking

HQ and the field including programme quality control, roll-out of policy initiatives, training and capacity

building. Significant staff reductions which occurred due to funding cuts in 2009 have largely now been

replenished, as shown by the table below.

Table 2: Staff Numbers 2007-2010

Staff Numbers 2010 2009 2008 2007

HQ (Programme Support, Mgt.) 45 36 46 40

HQ (Fundraising) 8 8 11 11

Field (GOALies) 113 98 147 133

Field (National) 2,755 2,280 2,560

13 GOAL HQ organization chart 2009 and 2011 attached in Annexes.

14 See Table 4: MAPS funding components.

12

In common with many aid NGOs, regular turnover of international field personnel is normal. However it

is the practice within GOAL that almost all field staff are retained on one-year contracts; that being said,

it is noted that many stay longer (typically 2-3 years) and rotate between posts and/or locations within the

organisation. In addition and as required some of the roving experts may also fill temporary field

vacancies.

The organization-wide HR function at HQ is currently under development. The HR system could be

improved to form part of the management information systems, by more efficiently capturing

performance appraisal, training (received, required, requested), timesheet data (including leave), and other

relevant information at both HQ and field sites which could assist in decision-making and the elaboration

of a staff development strategy. Similarly, to form a resource pool of potential recruits for future

vacancies, the establishment of a database of job applicants (qualifications, language skills, experience

etc.) is being considered. At the time of the audit work the HQ post of Human Resources Manager had

been vacant for some time. Recruiting for this post is a pre-requisite for proceeding with HR systems

development.

Recommendation 3: that a Human Resources manager is recruited as soon as possible to oversee and

strengthen the function and that the Human Resources systems are strengthened and improved as planned,

within an appropriate timeframe.

3.2 RISK MANAGEMENT

Analysis of institutional risk is evident in the Strategic Plan 2007-2011, and the annual Directors Report

refers to (mostly financial) risks, but otherwise there is a lack of evidence of regular comprehensive risk

review prior to 2009.

In that year two staff members were kidnapped in Sudan and released after lengthy negotiations15

. In

response, GOAL conducted an internal review of security in the field. Though requested by the audit

team, the report was not made available. However, there is evidence that security procedures and

capacity have been strengthened (dedicated professional security staff, appropriate procedures and

equipment, staff training, coordination etc) both globally and at specific field operations (as appropriate to

risk level).

Also in 2009, in response to a serious fraud in Malawi a comprehensive review of internal control systems

at HQ and field was undertaken, and the recommendations have since been implemented throughout the

organization (systems, manuals, staff orientation and training etc.). From 2010, the Roving Internal

Auditor has been tasked with working with country teams to develop and maintain risk registers (though a

risk register is not developed or maintained at HQ level for the organization as a whole).

Management response to these incidents demonstrates a commitment to address risks and strengthen

mitigation procedures, and progress has been made to institute a regular risk review process across the

15 Negotiations involved staff from the Department of Foreign Affairs and Trade.

13

organization through the internal audit system. However, the current approach appears to be primarily

finance led. As a result, there may be less active engagement by non-finance field managers, with the

result that other risks factors are not fully considered or addressed.

Risk management is a strategic issue and should be an integral part of the institutional culture. As such, it

might be expected that the governing Board would be visible in leading this process and driving it as a

priority down through the organization. At present this is not evident. Funding patterns and in particular

the declining trend in voluntary unrestricted income, which also represents a serious potential risk to the

organization is dealt with separately in Section 3.8 of this report.

Recommendation 4: that the process of risk management is further strengthened to ensure full buy-in and

follow-up by both the Board and all areas of management at HQ and in the field.

Recommendation 5: that an organization-wide risk register is developed and maintained at HQ (i.e.

reviewed regularly by senior management and at least annually at Board level).

3.3 STRATEGIC PLANNING

It would appear that the impetus driving preparation of the Strategic Plan 2007-11 was the bench-

marking16 process undertaken jointly with Irish Aid in order to access MAPS II funding. As such, the plan

reflects many aspects of both the MAPS framework and the benchmarking exercise and as noted above,

management have effectively overseen implementation in many areas.

Due to the limitation of scope referred to in section 1.3, the role of the Board in the strategic planning

process, in terms of driving the agenda and setting broad objectives and parameters is not apparent. Rather

the programme, process and internal capacity components appear to have been driven by internal

management through drivers such as the bench-marking process and MAPS II funding components. The

extent to which these investments in the capacity of quality control and other systems, within the

organization, under the Strategic Plan are core attributes (i.e. recognized as long-term organizational

standards determined, maintained and overseen by the governing body), is not clear. The lack of clear

evidence of Board engagement in the area of strategic leadership raises uncertainty as to the sustainability

of the gains made (and thereby Irish Aid‟s investment in programming and capacity building).

At the time of the audit, plans to develop a strategy for 2012 and beyond were being discussed at GOAL

but specific details of the process or planning parameters were not yet available.

3.4 PROGRAMME CYCLE MANAGEMENT

3.4.1 Programme Framework

GOAL‟s Strategic Framework 2007-11 and the proposal and programme sectors as submitted under the

MAPS approval process are generally congruent with MAPS guidelines. Within this framework, the

16 Initiated in 2004 and ongoing on a periodic basis, this joint effort by GOAL management and Irish Aid set out and measured

standards in 7 organizational areas, aimed at ensuring effective use of MAPS funds.

14

annual planning process is relatively decentralized, with strong input from the field (often including

fundraising). MAPS funding is applied within GOAL‟s overall programme structure and overseen by a

MAPS Coordinator (reporting to Acting Head of Programmes) at GOAL HQ who sets guideline

parameters and budgets (within the MAPS proposal and annual budget allocation) by country, following

which the country managers develop more detailed programme plans. MAPS expenditure is controlled

and reported through the regular finance and internal control systems, (see Section 3.5 below), and

monitored by a MAPS Grants manager. Financial and programme reports from the field are considered at

quarterly meetings of the MAPS Monitoring Group at HQ (comprising MAPS Coordinator plus senior

management representatives). Tables 3 and 4 below show a broadly consistent allocation of MAPS II

funds by country and sector over the period (taking account of the cuts in the MAPS II budget which

occurred from 2009).

Table 3: Maps Funding 2007-2010 by Country

Country 2010

€,000

% 2009

€,000

% 2008

€,000

% 2007

€,000

%

Malawi 1,168 9% 981 8% 1,500 9% 900 7%

North Sudan 1,160 9% 1,358 11% 2,185 14% 1,400 11%

South Sudan 2,320 18% 2,250 18% 2,014 12% 1,750 13%

Kenya 1,195 9% 1,337 10% 1,402 9% 1,000 8%

India 991 8% 930 7% 675 4% 1,174 9%

Ethiopia 1,605 13% 1,493 12% 2,300 14% 2,100 16%

D.R. Congo 0 0% 0 0% 1,035 6% 1,600 12%

Uganda 2,850 22% 2,867 22% 3,204 20% 2,600 20%

Sierra Leone 1,533 12% 1,334 10% 900 6% 806 6%

Niger 0 0% 274 2% 900 6% 0 0%

Total 12,822 12,823 16,115 13,331

The structure and procedures as set out above appear to function smoothly and effectively in

programming, monitoring and reporting the use of MAPS II funding. With regard to Irish Aid emergency

funding, the organization-wide financial reporting and internal control systems, and field level operational

oversight, are applied in the same way. However at GOAL HQ the Emergency Unit comprises a single

person as global emergencies manager, supported by the country desk officers as required. The

emergencies manager is frequently (up to 50%) absent from HQ directing early field response to new and

urgent humanitarian crises. It would appear that this unit is relatively under-resourced, and that capacity

may sometimes be overstretched.

Recommendation 6: that the emergency management function at HQ is reviewed to ensure that it is

adequately resourced.

15

3.4.2 Monitoring and Evaluation (M&E)

During the MAPS II period, progress has been made in the area of M&E, including the development and

roll-out of systems, and the recruitment of a specialist at HQ in 2010. Baselines and a set of indicators

have been established, and monitoring systems applied allowing GOAL to begin reporting data (mainly

quantitative, and at household level) which allows comparison over time17

. The system appears practical

and effective within its parameters; however, it is not clear whether and how the reported output data is

used in programme planning (e.g. no evident link between M&E output and resource allocation). For

example, Tables 3 and 4 show that funding has been applied fairly consistently across countries and

sectors over the four year period 2007-2010. This may be broadly expected given the longer term

structure and objectives of MAPS programming, but evidence of the systematic application of Results

Based Management techniques (i.e. periodic analysis and comparison of individual projects through the

M&E system, with consequent adjustment to resources and/or methodology), was not found.

Table 4: MAPS Funding 2007-2010 by Sector

Sector 2010

€,000

% 2009

€,000

% 2008

€,000

% 2007

€,000

%

Education 2,669 21% 2,501 20% 3,583 22% 2,089 16%

Heath 6,036 47% 5,551 43% 6,562 41% 5,999 45%

Livelihoods 1,471 11% 1,826 14% 2,273 14% 2,089 16%

HIV/AIDS 2,647 21% 2,944 23% 3,696 23% 3,153 24%

Total 12,822 12,823 16,115 13,331

Recommendation 7: that the system supporting management for development results is strengthened

through the integration of M&E outputs in programmatic decision-making.

Within the overall picture of progress in implementing M&E procedures, significant variances in capacity

were noted at field level18

. It is noted that GOAL has plans to further develop capacity through recruiting

an M&E expert on the roving technical team, organizing an M&E conference etc.

Recommendation 8: that plans to further build M&E capacity are implemented.

3.4.3 Management Information Systems

The current Management Information System (MIS) in use by the MAPS Monitoring Group and

Operations Department at HQ records details of all grants received and programmes funded, by donor.

Additional information is taken from the monthly field reports and all of this data is compiled manually

by HQ Desk Officers. The system is manually integrated with the financial reporting system (i.e. updated

17 MAPS Annual Report 2010

18 M&E capacity in North Sudan is judged as relatively strong, but weaker in Malawi.

16

monthly with actual spend per Donor Status Reports) and does not appear to be available to or used in the

field. As such it is not a real time system and its utility as a grant management system is limited. GOAL is

planning a review of the MIS which includes research on currently available systems that would provide a

more efficient and integrated organization-wide grant management and reporting system capable of

producing up to date information to aid management decision-making both in the field and at HQ.

Recommendation 9: that the MIS is reviewed and improved as soon as possible.

3.5 INTERNAL FINANCIAL CONTROLS AND ACCOUNTING SYSTEMS

The internal financial control and accounting systems are well developed and overseen by capable and

well-motivated senior managers and finance staff at HQ, regional (i.e. roving Finance Controllers) and

country levels. The base tool for financial management - Donor Status Report (DSR) is donor and project

specific – setting out all budgeted and actual direct and indirect cost allocations. This Excel report is

extracted from the Sage financial reporting system operating organization-wide. A DSR is produced every

month for each project by the country office, for review by the country managers and at HQ. This system

reflects the decentralized organizational approach and also an institutional emphasis on financial

management and in particular cost coverage and donor compliance. Because the DSR is not integrated as

part of the Sage system, it is prone to potential error or manipulation and also requires manual

reconciliation with the Sage Trial Balance each month. To reduce risk and increase efficiency it would be

preferable that the Sage system be developed to enable the automatic production of this key report. GOAL

management is aware of this and working with software experts to develop this enhancement on Sage.

In addition to the DSR, GOAL have developed a Budget Management Tool (BMT) which is a very useful

report produced by the project managers (i.e. budget-holders) in the field. The project manager receives

from Finance Department the monthly expenditure by project (as extracted from the Sage system) and

compares the cumulative spend to the annual budget. On the same spreadsheet they also forecast the

planned monthly spend for the remainder of the year. It therefore serves as both a management tool

showing expenditure performance (including overspends and underspends) to date, and a cash-flow report

showing the cash requirements for the remainder of the period. This avoids the need for separate budget

revision reports during the year as it incorporates all major and minor changes by project/programme in

one report (unless there is a decision to substantially change the funded project). Because the DSR is the

starting point for the BMT report, this process also would be greatly enhanced by the automation of the

DSR from Sage.

Recommendation 10: that the automation of the DSR from the Sage accounting system is implemented

within an appropriate timeframe (by the end of 2011).

A set of monthly management accounts is also generated from the Sage system for review by country

managers and at HQ, and a consolidated set of management accounts is presented to the Board, but

because the current version of Sage does not allow insertion of budgets, it is difficult for the Board and

senior managers to review actual expenditure against budgets at an organizational level. Also,

consolidation of each country‟s accounts at HQ is a manual process. GOAL management is aware of

17

these issues and plans to upgrade Sage to allow insertion of comparative budgetary information and

automated consolidation.

Recommendation 11: that a plan to upgrade Sage to allow insertion of budget figures and automatic

consolidation be prepared and implemented within an appropriate timeframe (by the end of 2011).

As mentioned above, monthly financial reports are produced at field sites and submitted to HQ Finance

Department, where the Finance Officers review them according to template checklist of internal controls.

Audit work confirmed that this system was in place; however there is no evidence of supervision of the

process by the Finance Manager.

Recommendation 12: that completion of the internal control checklist on monthly field financial reports

is evidenced by the supervisor‟s signature.

3.6 MANAGEMENT OF RELATIONSHIP WITH IMPLEMENTING PARTNERS

This is an important priority under the MAPS II framework, and since 2007 GOAL have developed a

policy for working with local NGO partners and rolled out a set of tools and guidelines for field

operations. However, the proportion of total programme funding applied through such partners during the

MAPS II period has been low (e.g. per audited financial statements „immaterial‟ in 2008; 1% in 200919

),

to the point where it appears unlikely that GOAL will be able to report any significant impact under this

MAPS II policy objective. Though in 2010 partnership focal points (mostly part-time roles for existing

staff-members) were identified at HQ and each country operation (except Ethiopia), there is no evidence

as yet of any reduction in international field staff levels which might be anticipated as the level of

programming delivered with and through local NGO partners increases.

Recommendation 13: that GOAL increases the scale of engagement with local partner NGOs.

The MAPS Guidelines identify development of local NGO partners as aim in itself, alongside delivery of

programmes. This is reflected to some extent in GOALs partnership policy, but a 2010 external

evaluation20 of relations with local NGO partners characterizes the relationship as instrumental, with

effective control exercised by GOAL through the project cycle (and over resources). This approach may

reduce risk but may also impede development of capacity among partners. A partner database is

maintained, but detailed financial data for local NGO partnerships, disaggregated to show capacity

building, programme implementation (plus partner direct and indirect cost analysis) etc. was not readily

available (though it is noted that GOAL field staff stated that much capacity building takes place through

mentoring and on-the-job training, which is not shown separately in the timesheets and other records).

19 The audited financial statements for 2010 (released after this audit) show a revised figure of 6% for 2009, and 8% for 2010.

These figures have not been verified and detailed information on such expenditure (type of partner, type of investment etc.) was not available at the time of this audit (see recommendation 15). 20

INTRAC, 2010

18

Recommendation 14: that greater emphasis is placed on capacity development among local NGO

partners.

Recommendation 15: that a system for tracking and analyzing the investment in and through local NGO

partners is put in place.

3.7 COST STRUCTURE

The MAPS II framework provides for the use of some of the funding for various investments in

organizational capacity and programme quality (policy development, M&E, capacity building etc.), which

are outlined in the Strategic Plan 2007-11 and in the bench-marking process undertaken between GOAL

and Irish Aid. The table below sets out how the MAPS II funding was applied among the various cost

categories.

Table 5: MAPS Funding Components

Cost Category Cum.

Total

2010

€,000

2009

€,000

2008

€,000

2007

€,000

Field Expenditure 55,091 12,822 12,823 16,115 13,331

Organizational Development ≤ 3% (1) 1,974 495 528 495 456

Mainstreaming ≤ 2% (2) 432 107 74 170 81

HQ allocation ≤ 6% (3) 3,450 805 805 1,007 832

Total MAPS Expenditure 60,946 14,229 14,230 17,787 14,700

Notes:

1. Per MAPS II guidelines, up to 3% of total MAPS funding can be used for „Organizational Development‟ costs aimed

at increasing the effectiveness of programme work, based on a developed plan (e.g. policy development, staff training,

workshops etc.).

2. MAPS II allows for up to 1% expenditure for mainstreaming each of two Irish Aid cross cutting priorities based on a

specific action plan.

3. „Management Support Allocations‟ include Headquarters costs „associated with the direct implementation of the

programme‟ up to a maximum of 6% of the total MAPS funding.

For the Management Support Allocations HQ costs 6%, the Guidelines require that these be „associated

with direct implementation of the programme‟. However because GOAL has applied this charge as a flat

% rate, this is difficult to verify. Further analysis of GOAL HQ costs indicates that the risk of ineligible

costs being included is low. This is because the cost structure at GOAL HQ is such that the combined

annual costs associated with direct implementation of the programme (e.g. Technical Team, Operations

and Logistics Department) exceed the 6% amount, i.e. total expenditure under these headings is greater

than the amount charged to MAPS programmes (assuming that such costs are not earmarked for

absorption by other donors). Nevertheless it is preferable that this charge to MAPS is reported as actually

assigned to the various HQ costs.

Recommendation 16: that the GOAL HQ Management Support Allocation component of MAPS should

be reported as assigned to actual costs.

19

3.8 FUNDING AND RESERVES

3.8.1 Funding Profile

Table 6: Analysis of Funding Sources

Income Source 2010

€,000

2009

€,000

2008

€,000

2007

€,000

GOAL Voluntary Income – Restricted 7,017 1,604 2,773 4,032

GOAL Voluntary Income – Un-restricted 6,057 5,101 8,167 7,581

Sub-total GOAL Voluntary Income A 13,074 6,705 10,940 11,614

GOAL Other Income (UK and US voluntary

income, Interest, Fundraising)

1,369 1,701 3,195 3,116

Donor Grant Income – Development B 24,224 23,897 23,843 21,253

Donor Grant Income – Emergency 25,754 13,342 14,403 14,731

Sub-total GOAL + Grant Income 64,421 45,645 52,381 50,714

Donations in Kind + Other 9,006 20,204 14,185 7,921

Total Income All Sources C 73,427 65,850 66,566 58,635

Liquidity Ratio (Voluntary/Total Devt Income) A/(A+B) 35% 22% 32% 35%

Development Ratio (Dev Funds/Total

Income)

(A+B)/C 51% 46% 52% 56%

Analysis of the table of funding trends above yields several notable points.

GOAL‟s voluntary income levels are linked to humanitarian emergencies (for example the figures in 2010

reflect to a great extent the public response to the earthquake in Haiti). In this context trend analysis is

difficult; nevertheless it is notable that unrestricted voluntary income is down 20% between 2007 and

2010. This may be expected given the deteriorating economic climate in Ireland, and the Annual Directors

Report (attached to the audited Financial Statements) for 2009 and 2010 refers to the importance of

securing and maintaining reliable sources of funding. However, in terms of both policy and strategy, there

is no evidence of a plan to develop a more secure unrestricted voluntary income base. GOAL has not

altered its policy of minimizing investment in fundraising (in order to maximize the funding available for

operations), nor has it made any significant adjustments to its long-time strategy of raising funds

primarily through sports related and corporate events, together with public appeals linked to specific

humanitarian emergencies (e.g. Haiti earthquake).

In contrast, with regard to institutional donors GOAL has developed a fundraising strategy (potential new

partnerships, technology and methodologies etc.) and the trends above indicate that levels of institutional

donor income for development have been maintained despite the global economic difficulties.

Institutional donor humanitarian funding has also generally held steady and, as noted in the Annual

Directors Reports, expenditure on emergency interventions amounted to almost 50% of total charitable

expenditure in 2010 and 2009 (up from 37% in 2008 and 27% in 2007). This trend indicates that during

20

the MAPS II period, emergency work has become increasingly significant in GOAL‟s overall operational

profile.

The MAPS guidelines require a „liquidity ratio‟ of 70:30 whereby participating agencies are expected to

generate 30% of their total income21

in the form of voluntary funds or demonstrate a capacity to do so

incrementally over the period of MAPS II. Given the declining trend in voluntary income, the continuing

domestic economic difficulties and the lack of an effective fund raising strategy, the risk of non-

compliance on this criterion is real. Apart from the technical issue of non-compliance, the falling level of

voluntary unrestricted income raises questions over GOAL‟s ability to sustain MAPS type programming

into the future. This risk is further illustrated by the table below, which shows that the total investment in

MAPS type programming has declined (from €29.5 million in 2007 to €21.7 million in 2010) over the

MAPS II period to date, and dependence on Irish Aid as a source has increased from 45% in 2007 to 59%

in 2010. All sources have declined in the period, with 3rd

party sources (i.e. other institutional donors)

down by one third since 2007 and GOAL investment halved.

Table 7: MAPS and Co-Funding 2007-2010

Expenditure by Source % Change

2007-2010

2010

€,000

2009

€,000

2008

€,000

2007

€,000

MAPS Expenditure (Field) -4% 12,822 12,823 16,115 13,331

As a % Total Expenditure 59% 63% 49% 45%

GOAL Expenditure -55% 3,103 1,543 6,545 6,926

As a % Total Expenditure 14% 8% 20% 23%

3rd.

Party Sources Expenditure -37% 5,831 6,135 10,148 9,268

As a % Total Expenditure 27% 30% 31% 31%

Total Expenditure (MAPS + Co-funding) -26% 21,757 20,501 32,808 29,525

Beyond the risk to MAPS type programming and the sustainability of Irish Aid‟s investment in and

through GOAL, the issue of declining voluntary income threatens to undermine GOAL institutionally (i.e.

as an independent agency with rather than the sum of its donors and projects), and as such would appear

to be a critical area requiring active Board engagement and leadership. However, this was not evident.

Recommendation 17: that the Board addresses the trend of declining unrestricted voluntary income.

3.8.2 Unrestricted Reserves

The table below shows movements in unrestricted reserves from 2007 to 2010. In the first two years,

GOAL had been running down reserves in order to maintain investment in operations. To offset this, in

21 In practice, the guidelines have been applied by Irish Aid per the Table 7 above (i.e. voluntary income compared to total

development income).

21

2008 an unused balance of almost €3 million22

restricted income23

was transferred from restricted to

unrestricted reserves, and in 2009 GOAL withheld €4.3m (i.e. 65% of total unrestricted income that year)

from operations in order to replenish reserves.

The balance at 31 December 2009 comprises inter alia general (programme) fund €10m, working capital

reserve €7m (doubled in 2010 to €14m, plus an emergency fund €1m), . Other components are a fixed

asset fund €3.3m and long term financial assets €2.3m.

Table 8: Unrestricted Reserves (Audited Financial Statements)

Unrestricted Reserves 2010

€,000

2009

€,000

2008

€,000

2007

€,000

Opening Balance 22,501 18,179 20,306 23,708

Net Movement 3,043 4,322 -5,096 -3,402

Transfer from Restricted Reserves 0 0 2,969 0

Closing Balance 25,544 22,501 18,179 20,306

All the above provides evidence that the Board has been active in maintaining and restructuring

unrestricted reserves. This is appropriate, however in the context of the larger issue of declining voluntary

unrestricted income (see Section 3.8.1 above), the table shows that in order to rebuild and maintain

unrestricted reserves the amount available for investment in programming (including MAPS co-funding –

see table above) has become more limited. If the declining trend in unrestricted voluntary income is not

halted, GOALs ability to either maintain institutional reserves or self-fund programmes in future will

continue to diminish (recommendation as 3.8.1 above).

3.8.3 Restricted Reserves

Restricted reserve categories and levels appear reasonable. They include €9.7 million at year end

represent donor funds which have not been expensed at balance sheet date. The balance sheet also

includes €5.5 million under Creditors, representing operational expenditure incurred but not yet paid by

year end.

22 €2,969,000 per GOAL audited financial statements 2008.

23 Financial Statements 2008 Directors Report includes a policy ‘Where restricted funds remain unspent for a period of three

years following the year of their receipt, GOAL’s board of directors may decide to transfer such funds that they consider surplus to requirements to unrestricted funds.’

22

3.9 AUDIT

3.9.1 External Audit

The external audit function appears strong and reliable. GOAL group accounts are audited annually by

Deloitte & Touche Chartered Accountants and Registered Auditors, who have been GOAL‟s auditors

since 2002. Audit reports in the MAPS II period are unqualified. Each of the country operations is also

subject to annual external audit, where the auditors are appointed in consultation with GOAL HQ, which

aims to select the best quality firm available in each country.

As part of their annual audit work, Deloitte & Touche liaise with the field auditors, issuing a letter of

engagement (indicating areas of particular focus or risk etc.) as part of the audit planning, and reviewing

the audit report and management letter from each field audit. The annual audit report and management

letter (incorporating issues raised by field auditors) is presented and discussed with the Audit & Finance

Subcommittee.

3.9.2 Internal Audit

The internal audit function appears robust, with well qualified and motivated staff and a thorough and

comprehensive approach. Established in 2001, the global roving internal auditor post was temporarily

vacant during 2009 (at which time the Internal Auditor was appointed as Acting Chief Operations Officer)

but filled by a part-time consultant before recruitment of a full-time replacement in 2010. The internal

auditor reports to the Audit & Finance Subcommittee and operates according to a field visit schedule

(each country at least once every 2 years, with more frequent visits depending on events/risk level by

country). Field work is planned with HQ Finance Department and country management, and there are

standard checklists in place for specific components (e.g. logistics and procurement). In some locations

internal auditors are also deployed in the field.

4. Conclusion

2009 was a difficult year for GOAL: funding levels declined sharply, leading to reductions in staffing and

operations; two staff-members were kidnapped in Sudan; and a serious fraud occurred in the Malawi

programme. Since then the organization has recovered to a large extent, replenishing staff capacity and

responding to the security and fraud incidents by instituting strengthened procedures and oversight, with

the objective of lowering risk.

Over the MAPS II period GOAL management has implemented improvements in many areas of

programming and organizational systems and capacity. The organization is relatively decentralized in

terms of operational decision-making, but operates according to robust organization-wide standards and

systems with regard to financial and internal control procedures. Personnel at all levels of the organization

demonstrate professional competence and a genuine commitment to their work.

23

The audit provided evidence of many positive standards and trends in GOAL as well as recommendations

for improvements as set out in this report. In view of the limitation of scope set out in methodology

section 1.3 above, the audit was unable to establish the level of Board engagement in setting the agenda

and parameters for the strategic planning process. This raises uncertainty over the effective exercise of

higher-level oversight of management systems and personnel, as well as the strategic direction of the

organization.

We would like to express our appreciation to the Board, managers and staff of GOAL, as well as their

auditors, for their valuable assistance. However, we also refer to the limitation in scope which was placed

on the audit due to certain documents not being made available to the audit team. We would like to thank

our colleagues at Irish Aid Civil Society Section and Emergency and Recovery Section for their

cooperation in the planning and implementation of this audit.

24

Appendices

APPENDIX 1: TERMS OF REFERENCE

Audit of Grants Awarded to NGO Partners in 200924

under Irish Aid’s Multi Annual Programme Scheme II and

Emergency and Recovery Funding Schemes

Title of Programme: Audit of Grants Awarded to NGO Partners in 2009

under Irish Aid‟s Multi Annual Programme Scheme II and

Emergency and Recovery Funding Schemes

Timing: October 2010 to September 2011

1. Background to Irish Aid Multi Annual Programme Scheme II and Emergency

Funds

In 2003, Irish Aid introduced the Multi Annual Programme Scheme (MAPS) to provide predictable and long-term funding in

support of agreed objectives for five qualifying Irish-based Non-Governmental Organisations (NGOs). The second phase of the

programme, MAPS II, commenced in January 2007 and covers the five year period to 2011. MAPS II Guidelines for NGOs

(March 2006) state that the overall objective of the scheme is to provide a supportive framework of funding that enables

organisations and their partners to work effectively and programmatically in pursuit of poverty focused development outcomes

and impacts.

In 2009, Irish Aid allocated over €68 million to support the humanitarian needs of vulnerable populations in over 40 countries,

through partnership with UN, the International Red Cross and Red Crescent Movement and NGOs. The Emergency

Humanitarian Assistance Fund (EHAF) is the main fund which covers Irish Aid‟s co-operation with NGOs in humanitarian

emergencies. In order to forge greater linkages between relief and development approaches, Irish Aid provides funding for

recovery and Disaster Risk Reduction (DRR)/preparedness type interventions to selected agencies from within its Multi-

Annual Programme Scheme (MAPS).The specific goal of the EHAF is to save and protect lives in acute crisis situations and it

can be used to finance activities that provide protection for civilians, the delivery of clean safe water, sanitation services, food,

shelter, healthcare, or other forms of assistance necessary to sustain life. Irish Aid is also committed to enhancing the

capacities of its humanitarian partners and does this through the third pillar of the Rapid Response Initiative. Individual grants

are made to specific NGOs to improve the humanitarian response capacity and to promote stability and conflict resolution.

Irish Aid is committed to ensuring that programmes meet the highest standards and are periodically subject to review,

evaluation and audit. Irish Aid‟s Audit Approach for Civil Society Organisations funded under MAPS, agreed with the partners

in 2008, describes the overall approach and the sources of audit assurance Irish Aid seeks to obtain in relation to the scheme.

2. Overview of the MAPS Partners

Concern Concern Worldwide was founded in Ireland in 1968 in response to a famine in the Nigerian province of Biafra. With more

than 3,200 staff of 50 nationalities, Concern operates in 28 countries in Africa, Asia and the Caribbean.

24 This will be 2010 where the audit is undertaken in 2011.

25

Concern has received support from Irish Aid for a number of years and since 2003 this support has been in the form of multi-

annual funding through the MAPS scheme.

Concern‟s MAPS II Programme for 2007-2011, based on their 2006-2010 Strategic Plan, was approved as a working document

by Irish Aid‟s Projects Appraisal and Evaluation Group (PAEG) for MAPS II funding over 5 years in September 2006.

Concern has a very broad thematic and geographical focus and their main interventions are in the areas of livelihood security,

health, education as well as HIV and AIDS. Concern implemented programmes with 529 partners in 2009 with a primary

focus of moving towards the development and strengthening of strategic relationships and engaging with governments as

partners; to a lesser extent, strategic relationships were maintained with various Community Based Organisations (CBOs).

GOAL Goal is Ireland‟s third largest NGO in the field of overseas development. It was founded in 1977 by John O‟Shea and currently

operates in 11 countries (Ethiopia, Haiti, Honduras, India, Kenya, Malawi, Niger, Sierra Leone, Sudan, Uganda and

Zimbabwe) with the majority of its resources focused in Africa.

Goal has received Irish Government funding for its activities since the 1970s and, since 2003, this support has been in the form

of multi-annual funding through the Multi Annual Programme Scheme (MAPS). GOAL was initially approved for one year

of MAPS II funding by Irish Aid‟s Projects Appraisal and Evaluation Group (PAEG) in 2007. GOAL‟s MAPS II Programme,

based on a revised 2007-2011 Strategic Plan, was approved by PAEG for MAPS II funding for the period 2008 to 2011 in

October 2007. Their programme focuses on four broad sectors: health, livelihoods, HIV/AIDS and education in nine countries

(North and South Sudan, Ethiopia, Uganda, Kenya, Malawi, Sierra Leone, India and Niger). Goal directly implements many

projects but in line with best practice is increasingly working in partnership with local non-governmental organisational and

community based organisations. At the operational level Goal also works with and enjoys good relationships with government

personnel and institutions.

Christian Aid Christian Aid Ireland was established in Ireland in 1998 and is part of the overall Christian Aid family. Christian Aid Ireland is

the official aid and international development agency of Protestant churches in Ireland. It is also part of ACT International

(Action by Churches Together), the worldwide ecumenical network for emergency relief. Christian Aid Ireland is made up of

two companies separately registered in Northern Ireland and the Republic of Ireland but governed as a single entity.

Christian Aid Ireland has received support from Irish Aid since its establishment in Ireland in 1998 and has been in receipt of

multi-annual funding through the MAPS scheme since 2003.

Christian Aid Ireland‟s MAPS II Programme for 2007-2011, based on their 2005-2010 Strategic Plan “Turning Hope Into

Action”, was approved by Irish Aid‟s Projects Appraisal and Evaluation Group (PAEG) for MAPS II funding over 5 years in

September 2006. This programme focuses on three of their six key areas – supporting communities to build secure livelihoods,

supporting individuals and communities affected by the HIV pandemic and promoting accountable governance in target

countries. The programme has a strong focus on countries in conflict or recently emerged from conflict. The MAPS II

programme provides support to approximately 50 partners in seven Christian Aid programmes, implemented in Afghanistan,

Angola, Burundi, Colombia, Rwanda, Sierra Leone, as well as in Israel and the Occupied Palestinian territories.

26

Organisation Annual

MAPS Grant Irish Aid

Humanitarian

Funding

Other Irish

Aid

funding

Total Irish

Aid

Funding

Total Income

of the

Organisation Concern 2008 26,000,000 7,071,369 13,705 33,085,074 132,298,000

Concern 2009 20,800,000 3,695,654 490,702 24,986,356 129,421,000

GOAL 2008 17,787,000 2,410,526 0 20,197,526 66,566,188

GOAL 2009 14,229,600 2,167,122 0 16,396,722 65.7m *

Christian Aid

2008 3,580,772 100,000 0 3,680,772 11,633,000

Christian Aid

2009 2,864,618 335,302 0 3,199,920 8,106,000

Christian Aid financial year ends 31st March. Total organisational income figures are taken from the consolidated

accounts for Ch Aid Ireland & Northern Ireland.

Concern financial year runs from Jan – December.

GOAL financial year runs from Jan – December. *Total 2009 income is a draft figure.

3. Objective of the audit

The purpose of the audit is to:

Independently examine and report whether Irish Aid funds have been used to support the programme objectives

agreed in partnership with each NGO; if expenditure has been incurred in accordance with the terms and conditions

of the agreements between Irish Aid and each NGO and has been accounted for in a proper manner;

Examine and report, from the viewpoint of overall accountability, as to the adequacy of the governance, management

and internal control systems of each NGO partner; and

Assess compliance with funding requirements and ratios of MAPS II guidelines.

4. Scope of the audit The audit will include such tests and auditing procedures of the organisation‟s systems as the auditor considers necessary and

will address the following areas:

Governance and organisational structure

Risk management

Strategic (including financial) planning

Programme cycle management (including Monitoring and Evaluation)

Internal financial controls and accounting systems

Management of relationship with implementing partners, where applicable

Cost structure

Funding and Reserves

Audit – external and internal

5. Audit Methodology Each audit will be led and managed by the Evaluation and Audit Unit of the Department and will be undertaken at the

27

headquarters of each NGO in Ireland, and through field visits to regional or country offices of these NGOS and selected

implementing partners or programme sites.

External service providers will be engaged to participate on these assignments and roles will vary from taking a prominent role

in the audit, including developing work programmes and drafting the audit report, to being a team member on a field visit to a

regional or country office.

The audit methodology will include: a review of relevant documentation available at Irish Aid offices; meetings with

management, financial, administration and programme staff and the organisation‟s partners, as appropriate in each office;

meetings with external and internal auditors; and performing such audit tests as are necessary to obtain evidence to address the

objectives of the audit.

6. Schedule and Location

Each audit will take between 40 to 55 working days over a 3 to 4 month period.

The outline work schedule will include:

Planning

Field work HQ

Field work at regional and country level

Assembly of key findings and recommendations and de-briefs to Irish Aid and NGO management

Preparation of Report

The field work at HQ and abroad will be scheduled reasonably closely together. The exact locations to be visited will be

decided at the audit planning stage.

7. Management Arrangements

Each audit will be regarded as an assignment undertaken and led by the Evaluation and Audit Unit of the Department of

Foreign Affairs. External service providers will be recruited to support the Unit and will assume varying levels of

responsibility as directed by the overall assignment manager, Mr Tom Hennessy of the Evaluation and Audit Unit. Working

papers and reports produced will be the property of the Evaluation and Audit Unit.

8. Expertise Required

Experience and Qualifications Required

A recognised professional qualification in accountancy and membership of a recognised professional accountancy

body

Experience of conducting similar audits and organisational governance/internal financial control systems reviews

Knowledge of relevant legislation, accounting standards and best practice for NGOs

Experience of working in an international development context, including a demonstrable knowledge of development

issues

Strong communications skills.

Where candidates fail to meet the accountancy qualification requirement, their proposals will not be considered further.

Selection will be based on the following criteria that will be demonstrated in a short proposal document (maximum 5 pages)

with an appropriate curriculum vitae appended.

28

The criteria which the Department will use to select a panel of suitable service providers are:

Criteria Marks

1 Experience relevant to the assignment

Experience of conducting similar audits and organisational

governance/internal financial control systems reviews (20 marks)

7 years post-qualification professional experience in financial or

management accounting and/or internal audit (10 marks)

30

2 Demonstrable knowledge of organisations implementing programmes in

an international development context 25

3 Understanding of the assignment and quality of submission 25

4 Cost 20

Total 100

9. Reporting

Assembly of findings and recommendations and initial de-briefs to Irish Aid and NGO management.

A first draft of audit report will be provided to Civil Society and Emergency and Recovery Sections of Irish Aid and to the

NGO for correction of any factual inaccuracies or other information.

A final draft of the audit will be provided to the MAPS Partner organisation for management response to the audit findings

and recommendations.

The final audit report will include the management responses.

10. Indicative Timetable

The approximate timeframe for the audits is as follows:

Audit no. 1 October to December, 2010

Audit no. 2 Mid-January to March/April 2011

Audit no. 3 April to July 2011

Candidates should indicate whether their availability for specific or all assignments.

Evaluation and Audit Unit

Department of Foreign Affairs

July 2010

29

APPENDIX 2: SUMMARY OF RECOMMENDATIONS AND MANAGEMENT RESPONSES.

No. Audit Report

Section

Audit Recommendation GOAL Management Response Audit Note to GOAL Management

Response where applicable

1 3.1 Governance

and

Organisational

Structure

That the Board considers

introducing:

a) A more formal and

transparent modus

operandum (e.g. Terms of

Reference, pre-set agendas

etc.) and;

b) Policies on board

composition and self-

development aimed at

strengthening the range of

skills and experience either

comprised within the Board

or to which it has access.

Terms of Reference are in place. A Terms of

Reference is attached.

There is a pre-set agenda for each Board

meeting. See agenda for last Board meeting

attached.

Board agendas have been in place for the last

three years as a matter of course.

The skills profile of the Board was

broadened at the time of this review and now

reflects Development expertise - refer to

Board profiles attached.

Terms of Reference received –

recommendation appears to be in

place from November 2011.

Board Agenda received.

Recommendation appears to be in

place from October 2011.

Board profiles of newly appointed

members received as at September

2011.

30

2 3.1 Governance

and

Organisational

Structure

That a stable and sustainable senior

management structure is put in

place.

Refer to updated HQ organizational chart

attached.

The SMT currently comprises of Head of

Logistics/IT, Head of Marketing and

Fundraising/Head of Programmes/Head of

HR and COO/Finance & CEO. Currently

Head of HR is being recruited and an Acting

HR head is in place.

Organizational Chart as at

November 2011 received. This

includes some recent changes to

the structure.

3 3.1 Governance

and

Organisational

Structure

That a Human Resources manager is

recruited as soon as possible to

oversee and strengthen the function

and that the Human Resources

systems are strengthened and

improved as planned, within an

appropriate timeframe.

This is in progress.

4 3.2 Risk

Management

That the process of risk

management is further strengthened

to ensure full buy-in and follow-up

by both the Board and all areas of

management at HQ and in the field.

GOAL‟s Board has set up a sub-committee

to deal with risk management to develop a

risk register for GOAL‟s Head office and to

review each country‟s risk register. This

committee comprises of a Board member, a

member from the audit committee and a

number of senior management staff in

Dublin. This will be completed by Jan 2012.

31

5 3.2 Risk

Management

That an organization-wide risk

register is developed and maintained

at HQ (i.e. reviewed regularly by

senior management and at least

annually at Board level).

Agreed this is currently being developed and

will be rolled out by Jan 2012.

6 3.4 Programme

Cycle

Management

That the emergency management

function at HQ is reviewed to

ensure that it is adequately

resourced.

This has happened.

7 3.4 Programme

Cycle

Management

That the system supporting

management for development

results is strengthened through the

integration of M&E outputs in

programmatic decision-making.

This is in progress and the M&E function

has been strengthed with additional HQ and

roving resources over the last 12 months.

8 3.4 Programme

Cycle

Management

That plans to further build

Monitoring and Evaluation capacity

are implemented.

Agreed. Progress is continually monitored

against the M&E plan of action. GOAL

continues to invest in M&E as a strategic

priority

9 3.4 Programme

Cycle

Management

That the Management Information

System is reviewed and improved as

soon as possible.

An MIS upgrade has already been approved

a system provider has been contracted. This

is currently being rolled out

32

10 3.5 Internal

Financial Controls

and Accounting

Systems

That the automation of the DSR

from the Sage accounting system is

implemented within an appropriate

timeframe (by the end of 2011).

: Upgrade is scheduled for completion end

of 2011. Implementation of the new

functionality to commence at the start of

2012.

This recommendation already

included in internal planning by

GOAL management.

11 3.5 Internal

Financial Controls

and Accounting

Systems

That a plan to upgrade Sage to allow

insertion of budget figures and

automatic consolidation be prepared

and implemented within an

appropriate timeframe (by the end

of 2011).

Same as above This recommendation already

included in internal planning by

GOAL management.

12 3.5 Internal

Financial Controls

and Accounting

Systems

That completion of the internal

control checklist on monthly field

financial reports is evidenced by the

supervisor‟s signature.

Now in place.

13 3.6 Management

of Relationship

with

Implementing

Partners

That GOAL increases the scale of

engagement with local partner

NGOs.

The figures contained in the commentary of

the annual reports are unfortunately

incomplete. The figures should read for

2009; local partners 5%. 2008; local Partners

4%. 2007; local partners 7%. Workings

attached.

33

14 3.6 Management

of Relationship

with

Implementing

Partners

That greater emphasis is placed on

capacity development among local

NGO partners.

This is ongoing and committed to in

GOAL‟s strategic plan

15 3.6 Management

of Relationship

with

Implementing

Partners

That a system for tracking and

analyzing the investment in and

through local NGO partners is put in

place.

This is difficult to quantify without specific

guidance from Irish Aid ahead of programme

implementation.

16 3.7 Cost Structure That the GOAL HQ Management

Support Allocation component of

MAPS should be reported as

assigned to actual costs.

Given that the majority of HQ costs are

salary driven it is not administratively

feasible to specifically assign costs to each

donor. The staff cost drivers are the fields

and not the donors (with the exception of the

MAPS co-ordinator). Fields are generally

diverse in funding and much of the HQ

support is indirect to donors as opposed to

being specifically a direct support. Without

exception all other institutional donors of

GOAL consider HQ support contribution as

a bottom line and do not request costs to be

specifically applied.

The structure of HQ costs is

understood, but it is not clear why

a basis for allocating these costs

by relevance to the MAPS

Guideline criterion of „associated

with direct implementation of the

programme‟ is not feasible.

As noted in the report text, the risk

of ineligible costs being included

is low.

17 3.8 Funding and

Reserves

That the Board addresses the trend

of declining unrestricted voluntary

income.

Agreed. An updated fundraising strategy for

2012-2015 is in process.