Author: Binu S Thomas
Publication: Deccan Herald
Date: May 12, 2003
URL: http://www.deccanherald.com/deccanherald/may12/edst.asp
Introduction: Money has been flowing
into the NGO sector, but very few of the charitable outfits allow public
scru-tiny of their accounts
A recent action of the Supreme Court
has put the spotlight on the vexatious issue of the accountability of Non-Governmental
Organisations (NGOs) . On May 2, 2003 the apex court admitted a public
interest litigation seeking the evolution of a mechanism to monitor the
functioning of NGOs working for the welfare of AIDS patients. The Delhi-based
NGO Common Cause which moved the PIL informed the court that NGOs were
receiving millions of dollars to fight AIDS and raised apprehensions about
large-scale misuse of these funds. It was alleged that only some 30-40
per cent of grants received from abroad were being used to benefit AIDS
patients.
NGOs have long been a part of Indian
life championing a slew of social issues and delivering a wide variety
of services. The Central Social Welfare Board has been providing financial
support to voluntary agencies for four decades. In 1986 a new government
agency, the Council for Advancement of People's Action and Rural Technology
(CAPART) was established to promote NGOs even as the State stepped up funding
of their activities. Huge funds began flowing in during the 1990s when
NGO involvement was made mandatory by various international bodies including
UN agencies as pre-condition for governments receiving funds for socio-economic
programmes.
Few figures are available for how
much money Indian NGOs raise within the country. But foreign funding for
their activities has risen sharply from Rs 1412 crore in 1991-92 to Rs
4535 crore in 2000-01, growing at a compounded annual rate of 14 per cent
every year. This mirrors the overall sharp increase in spending on community
services in the country.
Financial regulation
There is very little financial regulation
of NGOs as matters stand. The Foreign Contributions Regulation Act (FCRA),
under which organisations that receive foreign funds have to report annually
to the Home Ministry the sources and use of the money, is focussed on ensuring
internal security. It is not concerned with wastage or misuse of funds,
but with use of these funds for political, communal or other such activities.
Similarly, annual submissions to the registrar of societies or to charity
commissioners in some States like Maharashtra and Gujarat are for all practical
purposes mere formalities, with little scrutiny if public money is being
prudently spent by charities. This is in stark contrast to what exists
in the government where the Comptroller and Auditor General's office investigates
whether the physical achievements match the funds spent. The Kelkar Committee
recommended the creation of a National Charities Board to assist the government
in regulating charities as is the case with the National Charities Commission
in the UK.
Transparency, or rather the lack
of it, has long been a problem with the NGO sector. One telling example
of this is how few NGOs bother to make their annual accounts available
for public scrutiny. According to Murray Culshaw who publishes the NGO
directory 'Bangalore Cares' of the over 700 NGOs in Bangalore his organisation
is aware of "perhaps" 50 publish their annual statement of accounts.
Improving transparency
The Credibility Alliance, an informal
network of organisations that has been formed to "enhance credibility and
good governance" within the sector has been debating at various specially
convened regional workshops the issue of good governance. But as is usually
the case with NGO meetings, consensus takes a long time coming, if it comes
at all. One of the recommendations being discussed is that the "annual
report be disseminated/communicated to key stakeholders and available on
request every year, within 8 months of the end of the organisation's financial
year." Another proposal being debated in NGO circles is to have an accreditation
system for NGOs where they will be rated on different parameters and those
that make the grade will be formally accredited. This will enable the public
to have greater faith in NGOs.
However, NGO efforts at self regulation
have always been long on rhetoric and short on action. These efforts gain
momentum when the government threatens to come out with some regulatory
measures to improve transparency and accountability in the sector and wane
the moment the threat recedes. Two years ago, former finance minister Yashwant
Sinha had proposed that all NGOs which get more than Rs 10 lakhs a year
should publish their accounts in the local newspaper. The amount was later
revised to Rs one crore, but lobbying by various interests led to the proposal
being dropped.
Perhaps the Supreme Court can now
help take the issue forward. Meanwhile, as the website of AccountAid, a
Delhi based agency that assists NGOs with accounting, states in a pithy
one line comment in its section on NGO accountability: "Sorry. This one
is tricky. Still working on it."
