Code of conduct for NGOs prepared

The Ministry of Social Welfare and Special Education has prepared code of conduct for bringing transparency in the affairs of NGOs. Sources said that the process would improve the regulation of NGOs and help in preparing uniform set of regulation for all the NGOs.
They said that regulation of the NGO sector would enable it to operate in a better way and will be supportive to the government in development planning and implementation. The regulator would keep an eye on the functions of NGO sector and various regulatory bodies will be expected to adopt the principles contained in this code, they said.
These include the Ministry of Social Welfare and Special Education, Industries Ministry, the Co-operative registrar, The Ministry of Religious Affairs and the Security and Exchange Commission, they said.
They said that NGOs have been identified as being vulnerable to criminal activities due to a number of factors like large amounts of cash involved, inexperienced amateur directors/trustees and often working in states having problems like criminal and terrorist activities.
The code of conduct requires that larger and smaller NGOs must be financially transparent as larger NGOs collect vast amounts of cash and distribute these funds after paying for their own administrative costs, they said. Transparency must be in the interest of beneficiaries, donor organisations and authorities and NGOs will have to ensure this, they said.
The NGOs must ensure that they have a full programme budget that accounts for all programme expenses and these budgets must maintain record of recipients and head-wise utilisation of funds, they said.
The administrative budget must also be protected from diversion through similar safeguards and there must be independent auditing for ensuring that accounts of an organisation accurately reflect its finances, they said. The level and detail of the audit will reflect the size and ability of the organisation and its requirements, they said.
The NGOs must conduct a review of programme expenditure throughout the lifetime of project including physical checks on work done and evidence of used resources, they said. Many major non-profit organisations undergo audits to retain donor's confidence whereas such audits must be conducted by NGOs to ensure transparency, they said.
Smaller NGOs will not be expected to have independent audits of their accounts but must certify that they are correctly examined by an independent person that considers them to be accurate, they said.
Smaller NGOs must plan their work and ensure that resources are spent correctly and the details of these plans will necessarily be less comprehensive than those of the larger organisations and this will be recognised by the requirements for information from the regulators, they said.