Synopsis on

FINANCIAL PERFORMANCE OF
NON-GOVERNMENT ORGANIZATIONS IN WEST
BENGAL: A STUDY

THESIS SUBMITTED
FOR THE DEGREE OF
DOCTOR OF PHILOSOPHY IN COMMERCE OF
THE UNIVERSITY OF BURDWAN

BY

SANJIB KUMAR PAKIRA

Under the supervision of

Dr. Uttam Kumar Dutta
Professor of Commerce
West Bengal State University
Barasat, Formerly in the Department
of Commerce, Burdwan University
Golapbag, Burdwan

2012
1.1 Background of the study

Development is a multi-dimensional phenomenon. It depends on the level of

education, level of health services, degree of modernization, status of women, level of
nutrition, quality of housing, distribution of goods and services, access to
communication etc. Socio-economic development is the need of each and every
country especially developing nations like India (Abhiman Das, 1999). But in India the
progress of socio-economic development among major states like West Bengal is not
uniform. The state has received a lot of critique for being too bureaucratic and thus too
ineffective to be able to solve all public needs. This has resulted in an increased
attention to the Non Government Organization. However, the increased attention has
been followed by a greater pressure on the organizations to fill the shortcomings of
private and public sector and they now have to face the demands on being able to
show what they accomplish (Jenny Larsson and Joan Kinnunen, 2007).
Socio-economic development is a process of mutual endeavour which calls for
the participation of all segments of the society. But due to the limited capability of the
state government, it has become increasingly difficult to respond effectively to the
growing and diversified needs of the vast majority of population at the grassroots. This
has necessitated the emergence of institution which may function as a catalyst
between the government and the community, but still may remain independent from
direct government intervention. These institutions in the present day world are being
universally termed the Non-Governmental Organizations or the NGOs (Ravi Shankar
Kumar Singh, 2008).
A Non-Government Organization is an organization that is not part of a
government and was not founded by states. Non-Government Organizations are
therefore typically independent of government. Although the definition can technically
include for profit-corporations, the term is generally restricted to social, cultural, legal
and environmental advocacy groups having goals that are primarily non-commercial
(Venkatesha S. Sampa). According to Asian Development Bank the term Non-
Government Organization refers to organization
 Not based in government
  Not created to earn profit
United Nations defines it “NGOs are private organizations that pursue activities
to relieve suffering, promote the interest of poor, protect the environment, provide
basic social services or undertake community development” (Admin, june 2012).
NGOs are registered as trusts, societies or as private limited non-profit
companies under section 25 of Indian companies act, 1956. Section 2(15) of the
income tax act gives them tax exemption. Foreign contributions to non-profits are
governed by Foreign Contribution Regulation Act (FCRA, 1976) regulations and the
Home Ministry (Wikipedia, june 2006). NGO sector’s extensive grassroots connection
and involvement in various social service provisions make it a potential collaborator for
the governments in reforming out-dated public policies for the development of Indian
society.
The NGOs are growing quickly in numbers and areas, but their potentials have
remained unutilized because of the scepticisms’ towards their role. As such the NGOs
are also not without weaknesses. They have limited ability to scale up successful
projects to achieving national or regional impact without government’s support (Dr
Mustaghis – ur –Rahman, November 2004). Although almost all NGOs are working as
‘watchdog’ there is lack of co-ordination among them. Their role as ‘watchdog’ is not
being played effectively. Many NGOs are now interested in implementing the projects
by the government in order to earn money for their survival. Their focus is getting
shifted as per the priorities of the funding organization.
In the present study, a thick relationship has been found between the economic
growth and NGOs role in the state. The roles of NGOs are mounting in the state due to
lack of proper participation of all the segment of society and a negligent role of the
government. Thus opens a vast field for research and enquiry about the role of NGOs.
Therefore, an attempt has been made to examine and evaluate the performance
measurement as well as accounting and reporting practices of NGOs in West Bengal
as a factor responsible for poor financial performance as well as under investment
relating to finance especially during the post-liberation period particularly from 2000-
2001 to 2009-10.
1.2 Review of Literature
A brief review of the different pains of research in this field is attempted in the
following paragraphs.
Lalitha’s (1975) study on "Voluntary Work in India” was published by National
Institute of Public Cooperation and Child Development (NIPCCD), during the mid
seventies. It examined the status and role of voluntary workers engaged in social
welfare organization on all India bases. The study covered 390 voluntary organizations
and 356 operational volunteers in nine cities of India, namely Delhi, Bombay, Madras,
Bangalore, Ahmedabad, Hyderabad. Lucknow, Patna and Amritsar. The study
examined the policy and attitude of voluntary org anizations towards the involvement of
volunteers and difficulties encountered by them in matters of their recruitment, training,
supervision and retention. The study made certain suggestions for determining the role
of volunteers and identifying their work areas, reviewing and redesigning methods and
techniques of their recruitment, placement, supervision and development.
Kapoor and Singh (1977) initiated a study on "Rural Development through
NGOs" to summarize the history of the NGO movement in Himachal Pradesh. The
study admitted that NGOs could do very little in the areas where enormous action with
human and financial resources were necessary for development work. The study
incorporated the governmental schemes as well as projects run by the NGOs and
each NGO's structure, funding agencies, the success and failure of programmes,
credibility amongst the local people, technological facilities, etc.
Abdul-Rahman, A. and Goddard, A. (1998) initiated a study on “An Interpretive
Inquiry of Accounting Practices in Religious Organisations. The study of accounting
practices was rooted in two religious organisations in Malaysia. The research was an
attempt to study accounting practices in a cultural setting. The study also makes a
contribution towards the need for accounting research to become more explanatory of
accounting as social practice and is developed by observation. This is achieved by
developing grounded theory from the data and is in accordance with recent calls for
case studies in accounting research to be more concerned with producing social
theories of accounting practice.
Forbes (1998) conducted an extensive 20-year review of empirical studies in
NGOs that addressed the concept of effectiveness. Forbes included quantitative
archival data, such as financial reports and operational statements, as measures of
effectiveness. He concluded that effectiveness in not for-profit settings is a complex
concept that was not only difficult to measure but also required a multidimensional
approach and consideration of multiple constituents.
Seshagiri (1999) observed that neither too much nor too should less importance
be given to the non-governmental organizations. NGOs are undoubtedly significant as
vital gap fillers and conduits between the governing and governed bodies. She
concluded that the NGO phenomenon is an indication of organisational improvement
to respond to irregular market trends and an affirmation of the irreducible autonomy of
individuals and communities, against an active state.
Alnoor Ebrahim’s (2003) study on “Accountability in Practice: Mechanisms
for NGOs” examines how accountability is practiced by nongovernmental
organizations. Five broad mechanisms are reviewed: reports and disclosure
statements, performance assessments and evaluations, participation, self-regulation,
and social audits. Each mechanism, distinguished as either a “tool” or a “process,” is
analyzed along three dimensions of accountability: upward–downward, internal–
external, and functional–strategic. It is observed that accountability in practice has
emphasized “upward” and “external” accountability to donors while “downward” and
“internal” mechanisms remain comparatively underdeveloped. Moreover, NGOs and
fund providers have focused primarily on short-term “functional” accountability
responses at the expense of longer-term “strategic” processes necessary for lasting
social and political change.
Andrew Goddard and Mussa Juma Assad’s, (2006) study on "Accounting and
navigating legitimacy in Tanzanian NGOs” observed the phenomenon of accounting in
non-governmental organisations (NGOs). The study seeks to comprehend accounting
processes and reporting practices in NGOs and the conditions that sustain those
processes and practices. The study reviewed that NGOs have become important
institutions in world affairs but accounting research has not developed significant
interest in their operations. The research recognized the importance of accounting in
the process of navigating organisational authenticity.
Anand Pagaria’s (2006) study on “NGO’s-Accounting and Legal Intricacies”
observed that in the absence of any legal authoritative pronouncement and varied
interpretation of certain terms under the related laws by the judiciary, it has become a
difficult task to follow a uniform line of action in preparation and presentation of the
financial statement of an NGO. The practices followed by an NGO on certain issues
are varied and diverse thereby making the financial statements incomparable and
difficult for users to understand. The essentials range from the accounting treatment of
certain items of income/expenditure, to the issues under legal laws in force at present.
The conclusive sum of this retrospective review of the relevant literatures
produce till date on the offered subject reveals wide room for the validity and originates
of this work and reflects some decisive evidences that affirm its viability, as may be
marked here it. Nor has any previous research measured the working capital
management, relationship between working capital management and surplus to fund
employed, dimension of social activities of NGOs, financial performance measurement
as well as accounting and reporting practices of NGOs in West Bengal at a time. No
study has incorporated in this fashion before the present work.
1.3 Objectives of the study
The main objective of the present work is to make a study about the overall role
of NGOs in socio-economic development in West Bengal. More specifically, it seeks to
dwell upon mainly the following issues:
 To review the role of NGOs in West Bengal;
 To assess the accounting and reporting practices of NGOs under
the study;
 To examine the working capital management of NGOs under the
study period;
 To assess the association between working capital management
and surplus to fund employed;
 To evaluate the social activities of NGOs in West Bengal;
Many more similar issues can be raised. However, the ultimate purpose will be to
make the study focused in the line of main objective.
1.4 Test of Hypothesis
To test the hypothesis, the present study pursued to test the following:
Hypothesis 1
H0: Accounting and reporting practices of NGOs are not well maintained;
 H1: Accounting and reporting practices of NGOs are well maintained;
Hypothesis 2
H0: Working capital management of NGOs is not satisfactory;
H1: Working capital management of NGOs is satisfactory;
Hypothesis 4
H0: Association between working capital management and surplus to fund
employed does not exist;
H1: Association between working capital management and surplus to fund
employed exist;
Hypothesis 4
H0: Social activities of NGOs have no impact on socio-economically backward
peoples in West Bengal;
H1: Social activities of NGOs have a significant impact on socio-economically
backward peoples in West Bengal;
1.5 Methodology
An appropriate methodology has been pursued to carry out the present
research work. It encompasses the Universe of the Study, Sampling Structure and
Method, sample size, data source and tools used.
1.5.1 Universe of the Study
The location of the study was West Bengal as recognized by the Planning
Commission as the “Socio-economically Backward in India” (Wikipedia). The state
West Bengal was selected so that findings from this preliminary study may be used to
design a more in-depth study on a larger scale. This research work was thus restricted
to all the districts of West Bengal. West Bengal and the characteristics of all the
districts in West Bengal are not different. The present research work falls in the
category of qualitative as well as quantitative research, in that it aims to generate
theories and hypotheses from the data rather than test a pre-conceived hypothesis.
There were 100150 NGOs registered under the Information of Society Registration
Office in West Bengal as on 31.03.2009. It was also informed from the same office that
30150 NGOs were just existed only in papers, 70000 NGOs were operated in papers
but it was clear from the field survey that only 34500 registered NGOS really operated
in West Bengal.
1.5.2 Sampling Structure and Method
Since our objectives of the research are financial performances of NGOs in
West Bengal, it should be considered how much NGOs are publishing their audited
financial reports. After finalizing the registered NGOs really operated in the field, it has
been collected from the field survey that 8625 registered NGOs have audited and
published their annual reports regularly. From the audited and published NGOs, we
have taken 20 per cent for each district in West Bengal for sampling purposes. District-
wise NGOs have been represented in the following table:
Table - 1. 1: District-wise representation of the sample NGOs

Registered NGOs Registered

Registered prepared annual NGOs audited Total
Districts NGOs really reports selected
but not annual reports
operated published and published NGOs

24
parganas(North 5360 2202 1340 268
and South)

Bankura 1480 960 370 74

730
Birbhum 1732 435 87
723
Burdwan 1040 260 52

435
Coochbehar 820 205 41

772
Darjeeling 1360 340 68
Dinajpur (North
660 338 165 33
and South)
364
Hooghly 720 180 36

1150
Howrah 2760 690 138

Jalpaiguri 1420 823 355 71

Kolkata 10720 5462 2680 536

Malda 1748 972 435 87

Medinipur(East
2800 1357 700 140
and West)
Murshidabad 260 135 65 13
Nadia 960 505 240 48
Purulia 660 322 165 33
Total 34500 17250 8625 1725
Source: Field Survey (2010-11).
1.5.3 Sample Design
Out of 34500, total 8625 NGOs who audited and published their annual reports
regularly are taken as the population for the study. From the 8625 NGOs we have
selected 1725 NGOs (20 per cent of the population). The simple random sampling
without replacement (SRSWOR) method has been used on these 1725 NGOs. 640
NGOs were rejected through sampling and the remaining 1085 NGOs were then
approached to supply annual reports for ten years starting from 2000-01 to 2009-10.
Out of 1085 NGOs, 346 NGOs responded very negatively and they are not willing to
supply any data and reports (NWSDR). Annual reports and data are not available
(DNA) for 10 years in case of 427 NGOs. Only 312 NGOs responded favorably and
annual reports and data are available (DA) for 10 years in case of only 312 NGOs.
Thus, sample size stood at 312 NGOs. However, these 312 NGOs spread up in all the
districts of West Bengal as their focused area of operation. The description of the
sample is given in table -1.2.
Table-1.2: District-wise representation of the sample NGOs
Rejected NWSDR DNA for
Number of
Total ten years % of
sample
Districts selected sample
NGOs based
NGOs NGOs
on SRSWOR

24
82 51 74
parganas(North 268 61 22.76
and South)

Bankura 74 24 28 15 7 9.46

Birbhum 87 33 18 22 14 16.09
 52 23 11 10 8 15.38
Burdwan
41 17 9 8 7 17.07
Coochbehar
68 23 29 12 4 5.88
Darjeeling
Dinajpur (North 33 7 17 4 5 15.15
and South)
36 17 5 6 8 22.22
Hooghly
138 24 8 79 27 19.57
Howrah
71 18 6 35 12 16.90
Jalpaiguri

536 256 93 90 97 18.10

Kolkata

87 43 15 18 11 12.64
Malda

Medinipur(East 140 38 27 39 36 25.71

and West)
13 4 3 4 2 15.38
Murshidabad
48 23 15 2 8 16.67
Nadia
33 8 11 9 5 15.15
Purulia
1725 640 346 427 312 18.09
Total

Source: Field Survey (2010-11)

1.5.4 Data Source

The study is based on primary and secondary data for the period from 2001 to
2010.
1.5.5 Collection of Primary data
Primary data were collected through structured questionnaire and unstructured
interview schedules with NGO leaders, members, beneficiaries, secretaries,
presidents and accountants of selected NGOs under study. The primary data was
supplemented by field survey as well as discussion with NGO officials.
The major steps involved were to gather detailed background information; data
from the field during a field visit and perform subsequent analysis and synthesis of the
data. The fieldwork component had we spend an eight-month period on site to conduct
interviews, and observations of the day-to-day functioning of some representative
NGOs.
For the purpose of the study, six separate interview schedules were prepared
for NGO leaders, members, beneficiaries, secretaries, presidents and accountants of
selected NGOs. Schedules were prepared to specifically find out the status of
accounting and reporting practices and NGO governance to boost the quality
measurement of financial performances. The prepared interview schedules were first
pre-tested in the field. All necessary additions and alterations were made in interview
schedules on the basis of field experience of pre-testing. Open ended questions were
also given due space in schedules to know the ground reality of problem under
research. An observation diary was maintained in the field of elicit all related
information. After data collection, separate code books were prepared for each of the
six interview schedules (to code open ended questions). The interview schedules were
coded accordingly.
1.5.6 Collection Secondary Data
Secondary data were obtained from the audited Annual Reports and the
Balance sheet and Income & Expenditure accounts of the selected NGOs under the
study. Besides, the facts, figures and findings advanced in similar earlier studies and
the publications of NGOs are a lso used to supplement the secondary data.
1.5.7 Period of the Study
The study relates to the period of a first decade of the New Century, starting
from 2000-01 and ending on 2009-10.
1.5.8 Selected Variables
The study uses the commonly used financial ratios which are chosen from
those utilized by Bhunia (2009), Refuse (1996) and Singh et all (2008). An itemized
listing of the variables is accessible in table 1.3.
 Table-1.3: List of Ratios Examined
S.N. Independent variables S.N. Dependent variable

1. Receivables to working capital

(RWCR)
1. Surplus to Fund Employed
2. Working capital to Grants -in-aid
(SFE)
(WCGR)
3. Cash to working capital (CWCR)

1.5.9 Tools Used

In the course of analysis, accounting technique include ratio analysis, while
among statistical techniques the descriptive statistics, correlation statistics, rank
correlations, multiple correlations and multiple regressions analysis and the test of
significance (chi square test, t-test) have been applied. The use of the technique has
been made in the light of the requirement of the analysis.
1.6 Plan of work
The study may be divided into the following seven chapters:
Chapter-I: Introduction
Introductory chapter
Chapter-II: Role of NGOs
The prime objective of the present study is to explore the contribution of the NGOs in
bringing desired social change, social welfare and social development. However an
attempt has been made in the present chapter to know the role of Non Governmental
organizations in bringing the social development in the area where these organi zations
are working. West Bengal has history of series of movements, such as, the christian
missionaries movement, freedom movement, movement against social evils, Scouts
and Guides Movement, LIONS movement , Gandhian Movement ,tebhaga movement,
naxalite movement, land reform of the Left Front Government, environmental
movement, women's movement, etc. Hence, attention is paid in this chapter to
understand the rise of NGOs in West Bengal and the role played by them with the help
of different movements in Bengal.
Chapter-III: Accounting and Reporting practices of NGOs-An Assessment
Taking into account the huge amount at the disposal of the NGOs and importance of
their activities towards the socio-economic development, there is a great need for
developing a uniform accounting and reporting methodology for the NGOs. However,
an empirical study has been made on the basis of selected questionnaires to highlight
the problems of the prevailing accounting and reporting practices of the NGOs in West
Bengal. For the purpose of examining the accounting and reporting practices of NGOs
operating in West Bengal, data collected through questionnaire have been duly
processed, tabulated and analyzed using chi square test and z test (Test of
proportion).
Chapter-IV: Working capital management of NGOs in West Bengal
Working capital management efficiency is of crucial importance in any organization
including NGOs to make out the objectives of ‘Surplus to Fund Employed’ and
‘Liquidity’ as well as the items accountable for changes in working capital. Generally
Receivables to Working Capital (RWCR) ratio, Working Capital to Grants -in-aid
(WCGR) ratio and Cash to Working Capital (CWCR) ratio are highly useful in
determining both the liquidity position and the efficiency or otherwise of such
management. For measuring liquidity management, three liquidity indicators have
been tested with comparison of grand benchmark. To make the analysis and
interpretation more precise and accurate, the values of A.M., S.D., C.V., maximum,
minimum, Skewness and Kurtosis have been computed from the ratios. A process of
‘ranking’ has been used to arrive at a more comprehensive measure of liquidity. A high
value indicates relatively favourable position and ranking has been done in the order.
Ultimate ranking has been completed on the principle of ‘higher the point scored the
more favourable’ in the liquidity position. Correlation analysis has been made to find
out the degree and direction of relationship between two variables under study. Most
sophisticated multiple regression techniques have been applied to study the joint
influence of all the selected ratios indicating financial performance and performance on
the profitability
Chapter-V: Dimension of Social Activity-An Assessment of NGOs in West
Bengal
NGOs have become major new organizational forms and vehicles to deliver social
services. The role and functioning of NGOs can be properly understood only if a clear
dimension of social activity is made. An attempt has been made to know the
responsibility of NGOs in bringing the social development in area where these
organizations are working.
Chapter-VI: Concluding observations of the study
1. About 80% of the selected NGOs follow written accounting policies and
procedures in West Bengal.
2. Selected NGOs of Kolkata make the highest percentage (28.57%) and selected
NGOs of Murshidabad makes the lowest (0.89%) regarding written accounting
policies and procedure.
3. Only 5.44% of the selected NGOs follow manual accounting system till date and
the remaining NGOs (94.55%) follow automated or combined accounting
system.
4. 75.64% NGOs receive foreign grants and have FCRA Registration with the
ministry of Home Affairs, Government of India. NGOs in the district of Bankura,
Coochbehar, Murshidabad and Nadia do not receive any foreign grants and
have no FCRA Registration with the ministry of Home Affairs, Government of
India.
5. Only 41.03% selected NGOs follow accounting regulation as suggested by their
funding agencies.
6. All the selected NGOs follow double entry system
7. Exactly 91.35% of the selected NGOs are involved in fund raising activities.
8. All the selected NGOs have Internal auditor and statutory auditor for auditing
9. 65.38% of the selected NGOs have qualified full-time accountant with adequate
training in accounts and sufficient experience. But all the selected NGOs of
Darjeeling and Murshidabad do not have any qualified full-time accountant with
adequate training and sufficient experience in accounting
10. Only 9.93% of the selected NGOs follow the method of accrual basis of
accounting and the remaining 90.07% of the selected NGOs follow the method
 of cash basis of accounting .While all 312 NGOs are demanding that they are
following the relevant accounting standards of the Institute of Chartered
Accountant of India.
11. Only 9 NGOs (2.88%) manage books of accounts in terms of cash book etc.
other than preparing Income & Expenditure A/C, Receipts & Payment A/C and
Balance sheet. Only 2 NGOs in the district of 24parganas (North and South)
(3.28%) , 6 NGOs in the district of Kolkata (6.19 %) and one NGO in the district
of Medinipur (East and West) (2.78%) under the study prepare other books of
accounts other than preparing Income & Expenditure A/C, Receipts & Payment
A/C and Balance sheet.
12. Only 45.83% NGOs feel that they are accountable to the Central Government.
But NGOs in the districts of Bankura, Burdwan, Coochbehar, Darjeeling,
Dinajpur (North and South), Jalpaiguri, Malda and Nadia do not consider their
accountability to the Central Government.
13. Only 53.85% NGOs are accountable to the State Government.
But NGOs in the districts of Darjeeling (4) and Purulia (5) do not consider
their accountability to the State Government.
14.79.49% NGOs consider their accountability to the funding agencies.
But 3 NGOs of Howrah, 2 NGOs of Jalpaiguri, 2 NGOs of Hooghly, 25
NGOs of Kolkata, 22 NGOs of 24-parganas (North and South), 3 NGOs of
Burdwan, 2 NGOs of Purulia, 5 NGOs of Nadia do not consider their
accountability to the funding agencies.
15. Only 49.36% of selected NGOs under the study provide for recording of
expenses for each program by budget cost categories.
16. Exactly 54 NGOs (17.31%) under study in West Bengal feel that their existing
accounting system is not sufficient though almost 82.69% NGOs think their
existing system is adequate.
17. Working capital position and its management is poor and inefficient.
18.Receivables to Working Capital ratio occupy excessive funds of working capital
which is a heavy burden on the cash resources of the NGOs. Working Capital
to Grants-i n- aid ratio shows a faster declining trend. Cash & bank to gross
 working capital demonstrates a decreasing trend disproportionately under the
study.
19.2009-10 registered the most sound liquidity position followed by the years 2008-
09, 2007-08, 2006-07, 2005-06, 2004-05, 2000-01, 2001-02, 2003-04 and
2002-03 respectively.
20. Correlation coefficient shows a positive and negative (low and moderate)
association between financial stability and profitability.
21. The multiple correlation coefficients (R) among the dependent variable SFE and
the independent variables WCGR and CWCR taken together were 0.229. That
means profitability was not responded more by its independent variables.
22. In West Bengal, social activities are accomplished through Social Clubs,
Cultural Associations, Welfare and Charity Organisations, Rehabilitation
Centres, Actions Groups, Professional Bodies, Mahila Samiti and Youth Clubs.
Welfare & charity organizations have a larger share than other activities in West
Bengal.
23. In West Bengal, present social activities include Agriculture and watershed
Development programme, Women, Child and youth Development and welfare
programme, Medical and Health Awareness Programme, Rural Development
Programme, Welfare of the Aged Programme, Welfare of the Handicapped
Programme, Environment protection Programme and Vocational Training and
Capacity Building Programme .
24. As regards agriculture and watershed programme, NGOs in the district of
Dinajpur (North and South) have utilized maximum slice of the district’s total
fund followed by the NGOs of Malda, Hooghly, Bankura, Burdwan, Nadia,
Purulia.
25. NGOs in the district of Murshidabad have utilized greatest segment in case of
women, child and youth development and welfare programme followed by
NGOs of Nadia, Jalpaiguri, Hooghly, Coochbehar.
26. In case of Medical and Health Awareness Programme, NGOs in the district of
Nadia have consumed maximum share of the district’s total fund followed by
NGOs of Darjeeling, Birbhum, 24 parganas (North and South), Hooghly,
Kolkata, Jalpaiguri , Coochbehar , Howrah and Medinipur (East and West).
 27. NGOs in the district of Bankura have utilized maximum share in case of Rural
Development Programme followed by NGOs of Dinajpur, Coochbehar, 24-
Parganas, Birbhum, Darjeeling, Howrah, Burdwan.
28. NGOs in the district of Dinajpur (North and South) have greatest proportion of
foreign grants .
29. NGOs in the district of Hooghly district have ultimate proportion of Donations
from Individuals or Informal Groups. Individuals or Informal Groups fund
increases day b y day in Bankura and Burdwan for social works.
30. Funds from members show a variation very abnormally by NGOs in the district
of Medinipur, Purulia, Jalpaiguri, Kolkata, Howrah, Hooghly and Nadia.
31. NGOs of Burdwan have essential percentage of funds from other sources.
Chapter-VII: Suggestions and Scope for further study
Specific Suggestions
1. NGOs in West Bengal should follow written accounting policies and regulation
as suggested by their funding agencies
2. FCRA Registration should be necessary.
3. Accounts should be audited continuously by statutory auditor at regular interval
4. Qualified full-time accountant with adequate training in accounts and sufficient
experience is highly needed
5. NGOs in West Bengal should follow accrual basis of accounting
6. NGOs in West Bengal should have the accountability to the Central
Government, State Government and to the funding agencies
7. NGOs are suggested to have a proper recording of expenses for each
programme
8. To improve the liquidity position, financial position and financial stability of
NGOs, working capital is required to be increased by way of investment in the
current assets in the form of liquid resources, foreign grants is required to be
increased and proper mixture of different funds have to be made in which
significant pressure on future cash flows can be avoid.
9. To enhance the performance of NGOs, NGOs should follow the Balanced
Scorecard method as outlined by Robert Kaplan and David Norton. The
 performance measurement of the NGOs should be based on nonfinancial
performance perspectives.
10. Environment protection is highly needed for observation of environmental
monitoring
General suggestions
1. NGOs should follow the relevant accounting standards, laid down by the
Institute of Chartered Accountants of India (ICAI), which would help the NGOs
to preserve Uniform Accounting & Reporting Framework
2. NGOs should follow fund based accounting system which is relevant primarily
them.
3. NGOs should adopt accrual basis of accounting to demonstrate a proper picture
of the financial position and performance for the accounting period.
4. All NGOs should be brought under common regulatory control and mechanism
to ensure proper accountability, financial discipline, and end -use of funds and to
meet the needs of stakeholders.
5. All NGOs should follow a common format for presentation of its general
purpose financial Statements.
6. All NGOs should get their accounts audited continuously at regular interval after
three months or six months throughout the year
7. Professionalization in the management of finance is highly needed to counter
the financial performance of NGOs.
8. Proper planning and control of wealth should improve overall financial
management performance.
Limitations of the Study
1. We have selected only 312 NGOs for the purpose of analyzing financial
performance of NGOs in West Bengal in our study.
2. The study is carried out using the published financial data. Thus the study is
subject to all limitations that are inherent in the condensed published financial
statements.
3. This study is made applying the survey method with the help of a structured
questionnaire of the specified NGOs operating in West Bengal. So it is subject
to all limitations that are inbuilt in the survey.
 4. Again, this study is based on the data and information relating to the period
2000-01 to 2009-10. Thus this study covers a period of only ten years. This
period is not adequate to make an extensive study in respect of analysis of
financial performance of NGOs.
Scope for further Research
1. In this study only 312 NGOs are considered. Thus further study can be made in
future by considering a large sample size.
2. In the present study, only the state of West Bengal is considered. So, a
comparative study may be conducted in future by making a through comparison
between the NGOs in West Bengal and those in other states in respect of their
financial performance.
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SANJIB KUMAR PAKIRA