With reference to Global Giving Atlas, it has stated that there is a high growth of non-governmental organizations (NGOs) within Malaysia i.e., 81,544 which includes charities and NGOs. These spikes due to recent events such as the Covid pandemic, flood in Klang Valley and etc.
Nowadays, an NGO with positive reviews and high ratings from online ranking sites (https://www.charitynavigator.org/) to compare charitable organizations is increasingly using this distinction as a selling point to increase their credibility, as it recommends utilizing one of the popular rating websites before making any donation. Such an edge can be welcome to some who struggle to maintain a steady level of donations in an ever-growing industry. The sheer volume of organizations can make it challenging to attract volunteers, staff, media attention, and funding. A major theme in ratings is the issue of money management.
In recent years, there is a surge in the public seeking details on the distribution of these funds. While understandable, accounting practices in such organizations vary with international transactions making it more difficult to easily track and account for every dollar. After all, money sent across borders can pass through multiple financial institutions and take a significant amount of time to reconcile. During this period, the sender will likely be left unaware of where their funds are in the process and what fees are being deducted.
The main objective in preparing the transparent financial statement is that it is understandable at layman’s terms, with the details of the campaign or project concluded in the year in Annual Report, no error, fraud-free and there is no use of hidden accounting entries. The financial statement is the summary of the whole year’s performance. For MyFundAction, for items such as the Income recognition is by project or campaign, and we will declare income for all branches.
We totally understand the importance of transparency in our practices. Currently, we are operating within Malaysia, as well as overseas such as in Indonesia, Egypt, and New Zealand. We have the opportunity to expand more to other countries to attract more supporters. Therefore, most of our campaign leads to contributions to other countries such as Syria, Japan, Africa and South Korea.
Since we are based in Malaysia, hence need to follow the accounting standard under Malaysian Accounting Standards Board (MASB) i.e., Malaysian Financial Reporting Standards (MFRS). We are obligated to submit the Audited financial report, Annual Report, and tax submission under Malaysian’s ruling. We are moving towards the corporate structure; hence by reporting such information and other financial performance indicators and stakeholders can have a clear picture of the financial position of the organization at any given point.
Ref: https://www.readyratios.com/reference/accounting/financial_statement_transparency.html
https://www.convera.com/en-au/learning-center/articles/reporting-transparency-in-ngos
