Abby Zhang is a project advisor here at SVG and with over 15 years of experience as an accountant for international foundations and the local Chinese government, she provides financial advise to our many NPO partners and the programs they execute. Abby was recently sent to our NPO partners in Western China to evaluate their budget adherence and financial record keeping.
Here at SVG, we encourage ethical financial reporting to all of our NPO partners, which we recognize can be challenging when resources are limited. For example, typically it is more economical to purchase goods from a smaller vendor versus a large chain. Unfortunately, these smaller vendors can not provide the proper receipts and documentation (发票) needed to claim these costs. Organizations then must make a decision as to which is more important – save money or adhere to proper record keeping regulations.
Based on observations made during this trip, the SVG team and Abby began thinking about ways we can instill healthier long-term financial habits within these organizations through positive reinforcement. Often times, donors do not understand the current climate or reasons why decisions are made and actions completed. We want to help potential donors and foundations to better understand.
- Understanding the Situation – At SVG, we value the importance of understand the situation and environment that our partnering organizations work in. It is easy for those who are not in the situation to offer quick judgment and suggestions that are not helpful. We want to understand what it is like for these organizations to execute on-the-ground work and how we can help them to slowly become more established and better serve their communities. Regardless of the situation, the SVG team wants to look at the current situation as a starting point and find concrete ways we can help them grow.
- Budgets on a Project versus Organization Level – Often times, we see organizations here tracking the budget on a program-level and not on an organization-level. This is typically because donors require budgets on a program-level. The organization does not have enough resources to hire an accountant to examine the budget on an organization- level even though this is necessary for the long-term sustainability of the NPO.
- Audits are Positive – Through some of our programs, we can send an auditor to our partnering organizations to evaluate their overall financial situation. After we review their organization’s budget and share with them the results, we are often able to provide funding for professional finance software which may solve their challenges or funding for professional consultants like Enyou. These firms train the staff on how to properly run their financial department. Enyou can also evaluate the organization’s assets and in addition to setting up a long-term financial strategy, they look at the organization’s tax category and options for development funding. If an organization has the right resources, we can alternatively pay for professional financial software.
- Use Available Tools – There are a few financial tools already available for free to NPOs here in China. SVG can help evaluate whether these tools are suitable for a particular organization.
- Taxes Owed and Tax Benefits – Ensure organizations are paying the proper taxes and also verify organizations are receiving the tax benefits owed to them.
If you have additional questions regarding financial audits for NPOs here in China, feel free to contact us for more information at firstname.lastname@example.org. We would love to hear from you!