Non-Governmental Organizations (NGOs) play a critical role in improving the lives of people in third world countries. However, the operating environment in these countries can be challenging, with limited resources, complex regulations, and a high risk of misappropriation of funds. This is why many NGOs are turning to payroll outsourcing to simplify and streamline their payroll processes, while ensuring the security of their funds and assets. In this post, we will explore the benefits of payroll outsourcing and the strategies that NGOs can use to prevent and manage misappropriation of funds.

While outsourcing payroll can bring many benefits (cost and time savings, local expertise, and legislative compliance to name but a few) misappropriation of funds remains a real concern for global NGOs.

Here are a few strategies that NGOs can use to prevent and manage misappropriation of payroll funds:

Strong Controls: NGOs should outsource their payrolls to companies that have establish strong internal controls to detect and prevent misappropriation of funds on the payroll. This includes having clear policies, control frameworks and segregation of duties in place for the management of payroll funds.

Impartial service: Payroll outsourcing companies will (over and above legislative compliance) also objectively enforce global policies and agreements to ensure strict compliance to global company policies and rules. The advice and support the payroll outsourcing company offers is not biased towards, or influenced by, any party, point of view or local policy. It is truly independent and focused on the NGOs strategic payroll goals.

Transparency: Payroll outsourcing companies using cloud software provide access to the NGOs anywhere in the world to their payroll, financial information, and reporting. This is done by providing real-time access and updates to stakeholders on the use of funds. This can help to build trust and promote accountability, especially in countries where corruption is a concern.

Effective Oversight: The payroll outsourcing company will provide effective oversight mechanisms, such as a proper segregation of duties, where no two resources take accountability for consecutive payroll actions. In addition, the payroll outsourcing company should provide at least two internal reviews of the final payroll including an independent audit and variance sign off, to ensure that funds are being used for their intended payroll purpose.

Risk Management: Payroll outsourcing companies should carry out regular risk assessments to identify potential areas of vulnerability and implement measures to mitigate these risks for NGOs.

In conclusion, payroll outsourcing can bring many benefits to NGOs operating in third world countries, including cost and time savings, improved expertise and compliance and importantly, effective risk management