Abstract:

Financial health management practices involves the management of the six key variables according to this research work which includes budgeting and planning, accounting system, internal control, financial reporting, grant management and staffing. Most nongovernmental organizations (NGOs) do not manage these variables and this has been a major obstacle to their programs implementation rate.

The study evaluates the effects of financial health management practices on implementation rate for NGOs. The study utilized a diagnostic research design and it’s a single case study targeted Malawi Girl Guide association (MAGGA) one of the NGO listed and registered in Malawi. Data was obtained through questionnaire and from document analysis of consolidated financial reports of years ending December: 2010, 2011, 2012 and 2013. Both qualitative and quantitative analyses were carried out on the data to determine the relationships between components of financial health management practices and the program implementation rate of the NGO.

The study established that financial health management practices was strongly related to high implementation rate. Implementation rate of an NGO depends upon effective financial health management practices. Furthermore, contrary to the expectation of the researcher, the research has further established that donors also contribute to poor implementation rate by late funding the NGOs supplemented by lack of program monitoring visits, spot check and lack of capacity building for implementing NGOs. These are the major constraints the NGOs face when implementing donor funded programs. The study therefore recommended that NGOs should focus on strengthening financial health management practices and encourage donors to disburse funds on time and make sure to carry out assurance activities like program monitoring, spot check visits, auditing and capacity building to minimise financial risks. 

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