This post is also available in: Indonesia (Indonesian) 简体中文 (Chinese (Simplified))

Even Charity Organisations Need a Check and Balance of What They Do

Vast countries like Indonesia is highly populated from one end to another. At some point in time, some areas need help in so many ways. As such, charity organisations come into the picture to assist and aid in every possible way. Charity organisations are commonly known as non-profit organisations. Thus, any monies received will go direct for purely humanitarian aid. That said, there is an assumption that charities need not go through any audit as there is no profit gained from its function. Still, people running the organisation will be held accountable if something is amiss. Hence, charities must acquire charity social audit services in Indonesia to ensure all funds received and utilised are adequately documented.

 

Types of Charities

Under Indonesian law, the government is to provide essential socio-economic assistance to the poor and needy. But, it is not uncommon to see charities providing aid to specific areas of interest. The common types of charities found in Indonesia is a foundation, social welfare institution and community organisation. Each kind of charity comes within the purview of different laws and ministries. Foundations come under the Foundation Law and could have social, humanitarian or religious goals. A social welfare institution is a legal entity under the Social Welfare Law, whereas community organisation falls under the Community Organisation Law No.16 of 2017. These organisations have a common goal; which is to serve the social welfare of the community, including the poor.

 

Audit for Charities

Charities are non-profit organisations, and as such, they make no profit from implementing humanitarian projects. Charity bodies are open for a donation from the corporate as well as individuals and the public at large. Funds received are purportedly utilise for philanthropic causes. But, how does a non-profit organisation keeps things documented and in check? The answer is through a charity social audit services in Indonesia. Auditors assigned for such assignment will need to understand the organisation from all aspects possible. Although most charity will declare that all monies go to serving its cause, there is a looming possibility for misuse or abuse of funds. Hence, auditors for charities need to customise their approach as it is not a one size fits all method.

 

Taking Into Account

As there are a variety of charities out there for every possible humanitarian cause, a professional audit service need to take specific elements into account before beginning their audit. Some of the factors include:

• Fund Flow – The more established charities may have a system for incoming funds and documents it well. Otherwise, auditors must provide insight into the importance of such papers for less than organised charity bodies.
• Organisation Expenses – Auditors conducting charity social audit services in Indonesia will need to open their mind. As charities may have a different way of spending funds, that will be starkly different than the corporate organisations. Every expense of each charity must be documented well to reduce risks of misuse funds.
• One-Man Show or Not – Most charity bodies start with a single individual, with a few hires in the distant future. Charity organisation may acquire third-party services to ensure smooth operations and implementations. Identifying this at the very beginning will help auditors provide a more comprehensive audit.