Preparing for a Successful Financial Due Diligence by Donors with Practical Tips

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Risk-control tangle

What are internal controls

Internal controls are rules, procedures and mechanisms that help mitigate risks (risk management) to an acceptable level. Internal Controls are an integral part of an NGO's planning, implementation, monitoring and achieving desired results

Internal controls help with:

Examples of Internal Controls

What donors focus while reviewing Internal controls during due diligence

Governance & Delegation


Governance & Delegation

Accounts and Finance


Costs, Budgets and Budgetary Control


Human Resources

HR policy is a key policy that donors look for which details

Understanding of various social security laws-central and state is essential so that policy and procedures are as per law

Team due diligence: leadership, experience, alignment with mission, vision and culture values, transparency etc


Procurement

Procurement Policy

Fixed asset and inventory management

Cash and Bank

Grant and donor management

Statutory proceedings and penalties

MIS and software related

Integrated MIS where all parts are on the same app.

Mandatory accounting Record and Retention

The specified books of accounts shall include:

Other documents


Donors may stipulate record retention clauses in their respective grant contracts. For other records, specific provision maybe made in policy


Tips for making your organisation due diligence ready

Please note: Information is for reference only. Read our disclaimer here.


Revision #10
Created 7 January 2025 11:18:59 by Pooja
Updated 23 June 2025 16:35:13 by Pooja