Bridging the Financial Literacy Gap Through Financial

Financial literacy is a crucial skill that allows individuals to make informed and effective financial decisions. However, this essential knowledge though overlooked in learning institutions, it’s advisable for all sectors including the non-governmental sector to embrace good financial reporting skills.

Recognizing this gap, WIIS-HoA hosted a virtual financial training to equip various partners with practical skills essential for effective and better financial reporting. The training focused specifically on good practices in financial reporting and common challenges, addressing the needs previously expressed by the partners.

The session brought together finance experts and project managers from WIIS-HoA partner organizations in Kenya, Uganda and Tanzania, all with the shared goal of enhancing financial reporting. Participants were guided through a financial reporting manual by a WIIS-HoA finance expert, emphasizing the importance of clear, accurate and standardized reporting. This training was organized in response to a growing demand for improved financial reporting mechanisms among partners.

Common challenges in Financial Reporting

During the discussion, participants shared challenges they have faced in project implementation, including budget overruns, procurement difficulties, and compliance issues. One of the most prevalent challenges discussed was budget overruns, which occur when actual project costs exceed initial estimates due to factors such as poor forecasting, unexpected expenses, or inefficient resource management. Budget overruns can significantly impact the effectiveness and viability of a project, leading to strained partner relationships and potential project delays. The participants were advised to always review their budgets, explore strategies for managing budget overruns, including reallocating funds, seeking extensions or finding additional resources. This will help partners ensure that projects remain financially on track until completion.  

The participants acknowledged challenges in the procurement process, particularly in settling for the best vendors and also selecting the right trainers for effective workshop facilitation. Additionally, they also mentioned that choosing a qualified trainer was challenging, as finding someone who not only possessed the necessary expertise but also aligned with the program’s goals and audience needs was not always easy.

Another significant challenge addressed during the training was pertaining compliance issues, which often arise when partners do not fully adhere to regulations, legal requirements or internal policies, leading to legal repercussions. To manage reporting complexities, the participants were encouraged to always clarify any compliance concerns with their funders and partners to ensure that their financial reports adhere to all applicable regulations. Implementing comprehensive compliance checks and streamlining reporting processes can help overcome these challenges, ensuring that projects run smoothly and meet all necessary requirements by the stakeholders.

Good Practices around Financial Reporting

The WIIS-HoA finance expert guided the participants on various ways to mitigate the challenges they shared.

Adopting good practices such as transparency and accountability is vital for ensuring the successful execution and completion of projects. Transparency involves consistently providing clear and open communication about project goals, progress and any emerging challenges. This openness allows stakeholders to stay informed and engaged, fostering trust and collaboration. Accountability, on the other hand, ensures that every partner is responsible for their actions and decisions, which promotes a culture of ownership. When these practices are prioritized, projects are more likely to stay on track, with challenges being addressed promptly and collaboratively, leading to better outcomes and an elaborate financial report at the end.

The participants also learnt that strong internal controls and accurate financial reporting are essential components for effective project management. Internal controls refer to the policies and procedures implemented to ensure compliance with legal and regulatory standards. These controls help in maintaining the integrity of the project and avoiding costly errors.

Key Financial Policies and Procedures

To solve the issue of procurement, the participants were encouraged to set clear guidelines when acquiring goods and services. Proper procurement procedures help in obtaining the best value for money, reducing risks associated with supplier relationships and ensuring that all purchases align with the project’s budget, objectives and any regulations given by the funder. Adhering to these guidelines minimizes the chances of financial discrepancies and promotes a structured approach to resource acquisition.  

The participants learnt the importance of establishing at least three vendors before settling with one, setting clear contracts, performance expectations and regular reviews to ensure that vendors meet their obligations and deliver quality services or products. Effective vendor management is essential for maintaining project timelines, quality standards and overall financial reporting.

Additionally, compliance with regulatory requirements was emphasized, highlighting the need for projects to adhere to relevant laws, standards and internal policies. This ensures that projects are conducted ethically and within legal boundaries, thereby avoiding potential legal issues. Having clear procedures for approving expenditures and authorizing transactions ensure that all financial activities are properly reviewed and validated ensuring alignment with the project’s end goals.

Conclusion

Understanding good financial reporting practices will not only enhance accuracy and efficiency in reporting but also foster trust, sustainability and long-term collaboration among partners. As organizations continue to face complex financial challenges, continuous capacity-building initiatives are essential in reinforcing these best practices.

With a focus on transparency and accountability the partners were well-equipped to create lasting, positive change across the region.