WaterAid International - Essay Example

Research Project on WaterAid International Table of Contents 1Introduction 3 1History 3 2Company Structure 3 3Vision 4 4Mission 4 5Global Aims 4 2Planning 5 2.1Goals 5 3Programming 8 4Budgeting 11 5Budget Execution 13 6Accounting System 14 7Financial Management 15 7.1Risk Management and Internal Controls 16 7.2Reserves Policy 16 7.3Investment Policy and Performance 17 7.4Going Concern 17 8Financial Reporting 17 9Performance Management 18 10Risk Management 20 11Recommendation & Conclusion 21 12Works Cited 23 1 Introduction 1.1 History Water Aid started way back in 1981. In the last 30 years, they have gone from strength to strength to become one of the most respected organisations dealing solely with water, sanitation and hygiene issues. Since then, they have spread out to almost every part of the world and providing their services to millions of people in need. In 2010 WaterAid International (WAi) is authoritatively structured, as a feature of our improvement into a without a doubt worldwide association and a fundamental some piece of attaining our driven worldwide strategy. In 2012, The Big Dig request gets unimaginable help and raises more than £2m for our work in country Malawi, bringing clean water and safe sanitation to more than 134,000 individuals. The cash and backing has likewise helped them to impact strategy and practice to guarantee that the imperative part of water, cleanliness and sanitation in diminishing neediness is distinguished universally 1.2 Company Structure WaterAid worldwide is our worldwide legislation structure that organizes the exercises of WaterAid part nations (see note 14 of the Financial Statements for the records of WaterAid universal for the year finished 31 March 2013). In 2012-13, WaterAid was made up of four part nations: the UK, America, Australia and Stheyden (Watercan, an autonomously legislated NGO in Canada, joined in July 2013). WaterAid UK, America, Australia and Stheyden are all autonomously constituted associations with their Boards and Chief Executives. A year ago, WaterAid UK kept on putting resources into WaterAid worldwide to backing the development of Stheyden and our start-up in Japan where an agent was named throughout the year. They likewise put resources into the running expenses of WaterAid universal, and in supporting WaterAid America and WaterAid Australia as they expand their commitments to the accomplishment of the Global Strategy. The Chief Executive of WaterAid UK invests 25% of their time supporting WaterAid global alongside the Head of Organizational Development who invests 75% of their time on WaterAid worldwide. 1.3 Vision Their vision is “A world where everyone has access to safe water and sanitation.” (WaterAid.org) They have been constantly working upon it to build a society with hygienic water supply and further reduce the deaths caused due to suffering from waterborne diseases. 1.4 Mission The mission for Water Aid is ‘to transform lives by improving access to safe water, hygiene and sanitation in the world’s poorest co decision-makers to maximise our impact.’ (WaterAid.org) 1.5 Global Aims WaterAid has the aim: 1. To advertise and secure destitute rights and access to safe water enhanced cleanliness and sanitation. 2. To help governments and administration suppliers in creating their ability to convey safe water enhanced cleanliness and sanitation. 3. To backer for the fundamental part of safe water, enhanced cleanliness and sanitation in human improvement. 4. To further create as a compelling worldwide association distinguished as a pioneer in our field and for living our qualities. 2 Planning They will work with nearby accomplices to convey impartial and economical water, cleanliness and sanitation administrations. They will help them in enabling and empowering groups to call for suitable administrations and to impact their conveyance. They will impart these encounters to impact other people who can repeat and duplicate our deliberations. 2.1 Goals They want to: • Inspire and support poor groups to request their rights to water, cleanliness and sanitation administrations and to assume ownership over creating and keeping up them. • Develop and push fair and supportable water, cleanliness and sanitation benefits that are open, suitable and moderate, guaranteeing these could be repeated and adjusted by others. • Support and fortify the limit of associations to successfully take an interest in choice making procedures and the conveyance of water, cleanliness and sanitation. Neediness and social rejection Tending to social imbalance and the right of all to get to reasonable administrations is crucial to our work. They will work with minimized gatherings, help natives movement and neighbourhood examination to recognize why individuals dont have entry to water, cleanliness and sanitation and recommend answers for development (Blagbrough). Unheard subjects voices Where the necessities of group parts are disregarded, poor choices are made and sub-standard administrations conveyed. They will work with accomplices to empower and rouse groups to voice their needs. Quick urbanization Presently 70% of individuals without enhanced sanitation and 80% of individuals without safe water live in rustic ranges. Yet, without precedent for history, more individuals live in towns and urban communities than country territories with numerous individuals living in unplanned, thickly populated urban ranges without water and sanitation or the privileges of residency to the arrive on which they live. Accordingly, notwithstanding our country work, they will create new and creative answers for urban tests. Environmental change and water asset administration The supportability of groundwater sources is constantly debilitated by changing atmospheres as well as by the contending and to a great extent unregulated requests of agribusiness, industry and residential utilization. WaterAid will champion compelling water asset administration and will persistently improve to guarantee they utilize innovations that are best adjusted to evolving atmospheres. They will additionally look into the effect that contending water use has on groups in the nations where they work and impact strategy likewise. Economic instability In light of the erratic and flimsy economic environment they will nearly screen and survey our arrangements to guarantee that they can respect their responsibilities without over-extending our assets. And additionally bringing subsidizes up in America, Australia and Europe. They will additionally investigate new markets, augmenting worth for cash and degree of profitability. Our moral approach will manage us on where they can acknowledge and look for stores (Evans et al.). Worldwide coordination and scope They will create more WaterAid parts and venture into additionally creating nations to build our effect. They will secure a worldwide leading body of WaterAid parts to legislate work over the association and set up a global secretariat to keep up our mission, vision and qualities; elevate elevated requirements and to arrange our work. Nation, local and worldwide operational arrangements will be created for universal project work, impacting, interchanges and raising support to convey this strongly. 3 Programming There is no substitute for fitting resourcing of the part with a specific end goal to drive the important change. Notwithstanding the essential elevated amount responsibilities made by governments, financing, especially sanitation and cleanliness financing, is missing the mark regarding the obliged venture. Figure 1 beneath shows the degree to which governments have financed their water and sanitation areas over late years, and contrast the level of subsidizing with three critical benchmarks for advancement: the ethekwini responsibility for governments to reserve sanitation and cleanliness at 0.5% of GDP, appraisals made by the Africa Infrastructure Country Diagnostics (AICD) of the normal financing obliged every year for Sub-Saharan African nations to attain the MDG focuses for water and sanitation (0.9% of GDP for sanitation, 3.5% of GDP for both water and sanitation). The information gathered by WaterAid, which fuses national government going through together with on-plan benefactor subsidizing, show that each of the five nations are battling to asset the division satisfactorily. (WaterAid.org) Of significant concern is the easier necessity agreed to the division since 2007/8 by Uganda, Ghana and Rwanda. The previous two have now met their national water targets, yet unless this late pattern of diminishing assets is switched, with a re-established necessity distributed to sanitation and cleanliness, the step change required to diminish sanitation neediness and the bias of water access will basically not appear. Sierra Leone and Niger have supported their divisions more in respect to GDP, however the errand ahead is much more excellent: AICD evaluations financing needs at a yearly 16% and 8% of GDP individually. As far as focusing of designations between country and urban territories, strategy creators need to think about a few components: more level access levels in rustic regions, easier costs for serving provincial zones, fast urbanization, and the conceivably higher wellbeing dangers connected with water and sanitation destitution in high populace densities, as in slums. The legislatures of the nations concentrated on are reacting to these tests in distinctive ways. Since 2008, using on urban territories in Ghana has arrived at the midpoint of 73% of aggregate water and sanitation using. Despite the fact that the hole between urban and rustic territories has limited throughout the most recent 20 years, access levels remain lower in provincial regions, making for every capita using of eight times higher in urban zones troublesome to defend. Uganda uncovers a comparable picture: the crevice in access levels between provincial and urban ranges has limited about whether, yet for every capita using in urban regions of eight times higher again recommends powerless connection with need. Sierra Leone is prioritizing its country segment, and there has been a consistent expansion in resourcing to provincial regions since 2008 and in excess of 80% of all divisions financing in 2011. This is obviously legitimized by the considerable and expanding hole in access levels between urban and country ranges for both water and sanitation14. By and by, the weight that existing urban base faces as a consequence of quick urbanization and the resultant effect regarding wellbeing, environment and the development of slums, underlines noteworthy financing is still required in urban zones. Sierra Leones capital Freetown is dependent on the Guma Dam for its mass water procurement. Manufactured not long after freedom, the dam was intended to supply a populace of 300,000, however Greater Freetown now numbers in excess of 1.5 million individuals around its natives. Whilst great focusing on is pivotal to guarantee best utilization of rare account, the more extensive connection is one where the entire division, both provincial and urban, is under-resourced. 4 Budgeting A budget is an outline or plan for income and expenditures expected in future. It is prepared in accordance to guidelines for savings and spending. Basically, a budget aims to ensure that overall spending is less than overall income for both short-term and longer time horizon. It is an important tool that is required for the success of the business. Budgeting makes income and expenditure decisions more conscious and ensures most appropriate allocation of funds to scarce resources. While many critics consider that budgeting should be done when an entity is short of cash but the truth is budgeting is needed for all entities that has income and expenditure. A budget is like making short-term and long-tem projections that helps to cover short-term and long-term liabilities such as payment of bills, mid-term expenses, capital expansion programs, buying property, education planning, etc. Without proper budget planning, there could be over-expenditures leading to financial crisis. Budget gives an idea of how much time is available to replenish depleted income/savings once all necessary expenditures are incurred. Thus, a budget helps to track all expenses irrespective of expenditure size. There are different approaches to budgeting that are briefly discussed below: Line-Item Budgeting – It is one of the simplest forms of budgeting approaches which is linked to the input of the system. This form of budget expresses minimum amount of information about the objective or purpose of the system and typically appears in form of accounting documents (Swain, Reed 124). Program Budgeting – This approach to budgeting considers decision making process and is hence is also classified as normative approach. In this process the allocation of resources are generally determined by funding one program instead of another (Novick 332). Performance Budgeting – This type of budgeting approach based on the ability of the program to convert inputs into outputs. The process helps to solve decision making problems by identifying inputs that have significant influence on outputs. The performance is judged by analysing the ability of a certain program to meet particular objectives. The goal of the program is linked to the overall objective of the organisation and the problem of optimal allocation of resources is solved by identifying the program that is most efficient or tend to maximise the efficiency of the firm (Kelly, Rivenbark 3-5). Zero-based Budgeting – The budgeting approaches discussed so far attempts to allocate resources largely based on the existing budget of previous fiscal. In contrast, a zero-based approach requires approval of every line-item instead of just changing/adjusting the respective line item of previous year (Cutt, Ritter 43). The annual report of Water Aid, which is a non-profit government organisation, reveals that the organisation follows a multi-year budgeting and planning system. The system also incorporates annual milestones that are associated with the Global Delivery Strategy of the organisation. In order to measure the performance more accurately, the organisation prepares and presents financial reports periodically that helps the trustees and management to compare performance with budget on monthly, quarterly, and yearly basis. 5 Budget Execution The annual report of the organisation reveals that it has spending plans in future. The organisation delivers a very simple and sustainable solution to people mostly living in rural areas where availability of natural water-related resources is very scarce. The spending plans of the organisation are shown below: (all amount in millions) Target Expenditure 2010-11 2011-12 2012-13 2013-14 Charitable Activities £ 39.80 £ 42.20 £ 46.90 £53-£57 Fund Raising & Governance £ 11.00 £ 11.80 £ 14.40 £17-£18 Total Expenditure £ 50.80 £ 54.00 £ 61.30 £70-£75 In the fiscal year 2012-13, Water Aid was able to reach 1.7 million people and provide them safe drinking water and sanitation. The organisation has active presence in 23 countries and it has spent 12 percent more in these countries compared to previous year totalling £61.3 million. Further, Water Aid has spent £7.4 million in influencing policies on sanitation, water, and hygiene; about £37.8 million was spent to support its partners for delivering safe drinking water; Water Aid raised £13.8 million to raise funds to assist expenditure plans; it spent £1.7 million to expand its operations globally into new countries and it also spent £0.7 million on governance. 6 Accounting System An accounting system where receipts are recorded throughout the period and expenses are recorded in the period in which they are really paid is known as the cash accounting system. Cash accounting is one of the two types of accounting where transactions are recorded on the basis of cash receipt or payment. Alternately, there is accrual accounting where revenue and expenses are recorded when they are caused. Small businesses regularly utilise cash accounting in light of the fact that it is easier and more direct, and it gives an acceptable picture of what amount of cash the business really has close by. Large companies on the other hand generally follow the accrual accounting system under the GAAP (generally accepted accounting principles). The accrual system of accounting records items when they are earned and records expenses when they are incurred. For instance, consider a business invoicing for a thing sold, or work done, when sale is made. The accounting system under accrual method will show transaction/sale in the books of account despite the fact that no instalment has yet been accepted. Debts owed by the business demonstrate as they are brought about, despite the fact that they may not be paid until much later. The annual report of the company reveals that the organisation follows accounting methods in accordance to financial statements in accordance to UK accounting standards. The organisation follows methods and principles in accordance to the ‘Statements of Recommended Practice Accounting and Reporting by Charities Act 2005’. Further the Trustees of Water Aid ensures that the organisation is fully complying with the Companies Act 2006, the Charities Accounts (Scotland) Regulations Act 2006, and Trustee Investment (Scotland) Act 2005. The accounting standards are reviewed and approved by the Chairman of Board of Trustees and then the annual report is published. 7 Financial Management A business requires variety of management activities for running its operations smoothly. The primary reason for this is that money is scarce resource and has time value. This means that worth of a dollar today is more than year hence. For this reason money should be allocated to various activities in most efficient and effective manner. Traditionally there are four elements required for managing financial resources namely, planning, controlling, directing and finally decision making. Financial planning and management activity starts from the analysis of business environment and feasibility of business model. Then it identifies the sources needed to achieve these objectives in monetary units by quantifying scarce resources such as raw materials for production process, labour, necessary equipments, inventory, and so on. The total cost of each resource has to be determined and summarized. On the basis of the summarized reports of cost of resources, a budget will be prepared by the finance and accounts department which would help the organization to determine next course of action (Summers 2-11). The key financial management policies of Water Aid are briefly discussed below: 7.1 Risk Management and Internal Controls The inherent nature of work of the organisation requires it to take appropriate measures to manage and minimise the level of risk that comes across the organisation. The annual report of Water Aid shows that non-profit organisation has identified the major risks that threaten its existence. The organisation further assigns weights to major risks by analysing the likelihood of occurrence and their impact. Some of the most important risk arise from Restricted funds management (to ensure necessary structure is available in areas of high growth), Growth management (requires proper human and capital resources to handle continued growth of capacity), and Security management (related to countries where conflicts have escalated). It is the duty and responsibility of the Board of Trustees to manage and control the risk of Water Aid. 7.2 Reserves Policy The organisation maintains pre-approved reserves policy to manage and control operational expenditures at time of uncertainties. The range of reserves as per the policies of the organisation is subjected to be reviewed on annual basis which will be based on the corporate risk identified by UK Business Plan. The organisation has mentioned in its annual reports that it receives advance funds for various programs and it reflects an increase in restricted funds. Restricted funds are company’s liability and if surplus funds remain after investment then such portion has to be carried forward in next financial year. For the fiscal 2012-13, the Water Aid targeted to increase reserves from £10 million to £13 million. 7.3 Investment Policy and Performance The annual report of the organisation shows that it holds short-term cash and investments that are shown in consolidated and charity balance sheet. The organisation states that the main objective of investment policy is to limit risk and maximise investments. It only investment in securities that are and above A-1 or A-1+ rated as per Standard and Poor credit ratings. The organisation earned £83,000 from investment in the fiscal year 2012-13 which it projected to continue in next fiscal 2013-14. 7.4 Going Concern The Board of Trustees of Water Aid non-profit organisation has consensually opined the availability of adequate resources in future so that operations of the organisations continue to exist in foreseeable future. 8 Financial Reporting The annual report of the company reveals that the main reports that it has to publish including quarterly reports are corporate governance report, consolidated statement of financial activities, consolidated and charity balance sheets, and consolidated statement of cash flows. Financial statements represent a formal record of all financial activities. These statements reflect the effect of different business activities on the financial position of entity. Basically, there are four main types of universally accepted formats which may be compared on the basis of their purpose, items, or information- Consolidated Balance Sheet (shows changes in position of assets, liabilities, and equity on a given date) Consolidated Cash Flow Statement (represents movement of cash inside and outside business; divided in three segments namely operating, financing, and investing activities) The consolidated and charity balance sheet of the organisation reveals that the total amount payable at the end of 2013 or net borrowings stood at £6,097,000 increased from £4,566,000 from the previous fiscal. This shows that the organisation need to borrow money in addition to the grants it receives from the government. 9 Performance Management WaterAid executed a worldwide performance administration process in 2010, intended to implant a steady process for overseeing performance all around. It was vital in supporting WaterAids development and its vision to turn into a sincerely worldwide association with worldwide individuals, standards and a brought together personality. Performance administration is crucial for WaterAid in light of the fact that the association needs to be responsible, both to its supporters and the groups they serve. The need for performance administration was further highlighted by criticism from the 2010 Employee Survey. This indicated that supervisors need to have the capacity to handle underperformance, give criticism on a more standard groundwork and hold vocation advancement discussions. WaterAid needed to guarantee that each worker had: Robust destinations joined to the associations strategy Learning, being developed and professional Regular face to face, discussions about performance and formal evaluations Emily Wilton, Learning and Development Manager, WaterAid remarks "We have to help our kin comprehend what performance administration is. Historically performance has been associated with length of administration not conveyance. In a few cases profession and improvement discussions were essentially not event and no move was made in instances of poor performance." "Two years after the methodology began individuals appear to have a finer understanding of how the procedure functions and their part in it. However, WaterAid still felt that the idea of overseeing performance was not yet completely implanted and that administrators were still not completely understanding what was required, or prioritizing it as a key effects empowering influence." Solution 3C worked with WaterAid to convey an arrangement of preparing modules to their administrators to help implant the performance administration process significantly further into the association. 3C are performance administration experts who put directors at the heart of performance administration. Founded by Hedda Bird in 2010 through the amalgamation of 3c and The ROI Academy, they have made a particularly incorporated methodology to help directors adjust, rouse, measure and create their groups to accomplish authoritative destinations. Their invigorating and animating style addresses and determines the key issues that associations face with performance administration. 3c conveyed an arrangement of 90 moment modules on: setting extraordinary targets having extraordinary profession and taking being developed discussions coaching for superior courageous discussions 3C likewise prepared WaterAids in-house mentors to have the capacity to convey the preparation themselves. As WaterAid works over the world the modules were conveyed in French, Portuguese and English, utilizing a mix of telephone and electronic engineering to chiefs in each of t 10 Risk Management As far as focusing of portions between provincial and urban zones, strategy producers need to think about a few components: more level access levels in rustic territories, easier costs for serving country regions, quick urbanization, and the possibly higher wellbeing risks connected with water and sanitation destitution in high populace densities, as in slums. The administrations of the nations examined are reacting to these tests in distinctive ways. Since 2008, using on urban zones in Ghana has found the middle value of 73% of aggregate water and sanitation using. Despite the fact that the crevice between urban and rustic ranges has contracted in the course of the most recent 20 years, access levels remain lower in country regions, making for every capita using of eight times higher in urban zones troublesome to legitimize. Uganda uncovers a comparative picture: the crevice in access levels between rustic and urban ranges has limited about whether, yet for every capita using in urban regions of eight times higher again recommends frail association with need. Sierra Leone is prioritizing its country area, and there has been a relentless expansion in resourcing to provincial territories since 2008 and in excess of 80% of all divisions financing in 2011. This is obviously supported by the considerable and expanding crevice in access levels between urban and provincial ranges for both water and sanitation. In any case, the weight that existing urban framework confronts as an after effect of fast urbanization and the resultant effect as far as wellbeing, environment and the development of slums, underlines huge financing is still required in urban zones. Sierra Leones capital Freetown is dependent on the Guma Dam for its mass water procurement. Manufactured soon after freedom, the dam was intended to supply a populace of 300,000, yet Greater Freetown now tallies in excess of 1.5 million individuals around its nationals. Whilst great focusing on is essential to guarantee best utilization of rare fund, the more extensive connection is one where the entire segment, both rustic and urban, is under-resourced. 11 Recommendation & Conclusion WaterAid as we know is a worldwide non-profit organisation which looks after the poor people by providing them safe water and proper sanitization for their well being. Over the years, they have spread throughout the world and have been recognised for their noble job everywhere. They should look forward to getting more volunteers from any where possible to further spread their work across the society. A lot of work needs to be done in the African region as discussed in the above report and that should be their prime concern at this point of time. The performance has been enhanced with the association of 3C. This will ensure that the workers do their best in spreading out across to world to help the poor and needy to get clean water and sanitation. 12 Works Cited 3c-performance-management.co.uk,. Refreshing The Performance Management Process. Web. 1 May. 2014. Black, Maggie. Thirsty Cities. 1st ed. London: WaterAid, 1996. Print. Blagbrough, Vicky. How Wateraid Looked Back. Waterlines 22.1 (2003): 19--21. Print. Cutt, J, and R Ritter. Public Non-Profit Budgeting: The Evolution And Application Of Zero-Base Budgeting. 1st ed. Canada: Canada: Institute of Public Administration of Canada, 1984. Print. Evans, BE et al. Sustainability And Equity Aspects Of Total Sanitation Programmes-A Study Of Recent Wateraid-Supported Programmes In Three Countries: Global Synthesis Report. WaterAid (2009): n. pag. Print. Kelly, Janet M, and William C Rivenbark. Performance Budgeting For State And Local Government. 1st ed. Armonk, N.Y.: M.E. Sharpe, 2003. Print. MacDonald, A. M. Report On Visit To A Wateraid Project, Nigeria, To Carry Out Workshops And Assess Geology Of Benue State. 1st ed. 2001. Print. Novick, David. Program Budgeting. 1st ed. Cambridge: Harvard University Press, 1967. Print. Summers, S. Financial Planning Basics. 1st ed. 2011. Web. 1 May. 2014. Swain, John W, and B. J Reed. Budgeting For Public Managers. 1st ed. Armonk, N.Y.: M.E. Sharpe, 2010. Print. Wateraid.org,. Wateraid UK - Who We Are - Our History. Web. 1 May. 2014. Wateraid.org,. Wateraid UK - Who We Are - Our Strategy. Web. 1 May. 2014. Read More