Certification Model Final Version

Pakistan Centre for Philanthropy

NPO Certification Model

Pakistan Centre for Philanthropy (PCP), established in 2001 under section 42 of The Companies Ordinance, 1984, is an independent, nonprofit, support organisation created to facilitate collaboration among the philanthropists, nonprofit organisations (NPOs) and the government for social development in Pakistan. It is led by an independent Board of Directors, comprising eminent citizens and leaders from the corporate sector and civil society. Its mission is to promote the volume and effectiveness of philanthropy for social development in Pakistan. The Centre runs a number of programmes to achieve its objectives. The NPO Certification Programme is its flagship programme.

The certification regime developed by PCP in 2002-03 endeavours to set sector wide standards of good internal governance, transparent financial management and effective programme delivery. The purpose is to strengthen the civil society by bridging the information and credibility gap that exists between the donors and recipient organisations. The Government of Pakistan in the Revenue Division authorised PCP as the first NPO Certification Agency vide notification no 1116(1)/2003 dated December 18, 2003.

An organisation may wish to obtain certification for enhancing its credibility in the wider public (including donors) view or for obtaining tax benefits from the Central Board of Revenue (CBR1) or for both. The Certification Model (which contains the standards and process of evaluation) applies in either case.

PCP’s certification focuses on the examination of structures, systems, procedures and processes put in place by an organisation to deliver the services it promises and to ensure sustainability of its programmes. It falls beyond the mandate of certification process to evaluate the degree of success of programmes except to the extent it is reflected in the standards of programme implementation.

Some important points about the certification regime are given below:

1) The pre-requisites for consideration of an application for PCP certification are contained in Section I. An application by an NPO will only be processed if it meets these requirements.

2) An NPO applying for certification for the purpose of availing tax benefits (under Section 2(36) and/or under Clause 58 of the 2nd Schedule of Income Tax Ordinance, 2001) must also comply with the requirements of the Income Tax Ordinance, 2001 and the Income Tax Rules2, 2002. Although it is the prerogative of the relevant authorities in the CBR to finally check an organisation’s compliance with these requirements, PCP will also examine the applicant organisation’s status viz a viz these provisions and submit its observations and recommendations to the NPO concerned.

3) PCP’s Certification Model consists of standards organised in three categories (Section II) against which an NPO is assessed. The three categories relate to NPO’s internal governance, financial management and programme delivery.

4) Fulfilment of these standards fetches scores for the NPO. A maximum score is assigned to each standard. In most cases, score assigned to a standard is further divided into smaller components depending upon the ingredients of the standard and various aspects like degree of compliance etc. Wherever expressly provided an NPO is assigned score on a standard on a defined range. The maximum attainable score for all standards is 1000. Details of these standards and the scoring system are given in Section II. An NPO must attain a total score of at least 600 (and a minimum 50% score in each individual category) to be certified by PCP.

5) Applicability of standards varies according to the size of the NPO. This is highlighted in the second last column of each table of Section II. For this purpose, the NPOs are divided into small, medium or large organisations as under3:

1 The term CBR, wherever used in this Model, also includes its field offices, unless the context provides to the contrary.2 Relevant provisions from the Income Tax Ordinance, 2001 and the Income Tax Rules, 2002 are available on PCP web site (www.pcp.org.pk). 3 This categorisation of NPOs derives from the general consensus of various stakeholders expressed in the consultative process that led to the development of this Model.


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http://www.pcp.org.pk/


a) If the average of total annual receipts of an NPO during the last three years is less than Rs. 1.0 million, it is a small NPO;

b) If the average of total annual receipts of an NPO during the last three years is more than Rs. 1.0 million but less than Rs. 5.0 million, it is a medium NPO; and

c) If the average of total annual receipts of an NPO during the last three years is more than Rs. 5.0 million, it is a large NPO.

6) In case a standard (or its component) does not apply to an NPO being evaluated, marks will be assigned on a pro-rata basis for such not-applicable standard (or component thereof).

7) Appendix I and II display the workflow of certification process. These charts indicate that:

a) When an NPO applies to PCP for certification, a team of evaluators (comprising a Programme Officer (PO) and an evaluator) is assigned to the case. For the purposes of evaluation two basic instruments are applied – the Desk Review and the Field Evaluation.

Desk Review involves examination of application and supporting documents furnished by the NPO. The Field Evaluation (comprising a visit to the organisation (including any branches or facilities/ outlets) on a mutually convenient date) involves examining the field records; reviewing programme delivery; and meetings with governing body members, the executive head(s), and managerial and programme staff of the organisation. A brief beneficiary feedback survey is also conducted.

b) The Desk Review of the applicant NPO is conducted first. If the organisation meets the pre-requisites as contained in Section I, its application is processed further. If not, the application is returned to the organisation and the reason(s) for doing so are specified.

c) If the organisation has applied for certification for seeking tax exemptions, its compliance with the tax related provisions given in Section I is also checked. If the organisation complies, PCP proceeds further with the evaluation of the organisation. If not, the application is returned to the organisation and the reason(s) for doing so are specified.

d) The NPO’s case is then assessed and scored against standards contained in Section II. Once the Desk Review is completed, Field Evaluation of the organisation is conducted and the NPO is awarded score on relevant standards.

e) Both Desk Review and Field Evaluation, evaluate the NPO’s performance in achieving its aims and objectives during the last three years.

f) On the basis of such evaluation, the PO prepares a detailed report. The detailed report contains an assessment of the NPO’s performance in the areas of internal governance, financial management and programme delivery, the scores obtained by the organisation on all the standards and its financial highlights over the last three years.

g) Once finalised, the report is shared with the concerned organisation and its comments/observations/reservations/feedback on the report are duly considered.

h) The assessment report along with the feedback received by the organisation is then placed before the Certification Panel, which is the final authority to grant or refuse the certification application of an NPO. The Panel is a five-member independent body, three of which are nominees of the PCP Board of Directors and two represent the Government of Pakistan4. The Certification Panel deliberates upon the report and recommendation of PCP5 and examines the comments received from the organisation. The Panel may or may not concur with PCP’s recommendation in any given case or it may send the case back to PCP for re-evaluation.

i) If the Certification Panel decides to grant the NPO’s application for certification, PCP issues a certificate to the NPO in the prescribed format. If, however, the Certification Panel decides to refuse the application for certification, it will advise PCP to regret issuance of the certificate to the NPO. The Panel may also decide to defer the NPO’s application for certification for a

4 The Board nominees for the Certification Panel are not members of the Board. Instead, the Board has identified persons of acknowledged professional eminence and integrity to sit on the Panel. The two representatives from Government of Pakistan are ex-officio members. Chairman, National Council of Social Welfare and the Chief Direct Tax Operations, CBR represent the Ministry of Social Welfare and the CBR respectively.5 In light of the score obtained by the organisation, PCP proposes that the organisation be certified or deferred or rejected. PCP may also draw Panel’s attention to anything that is considered important for Panel to decide a case.


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certain period of time – ranging to a maximum of 1 year. This provides the NPO concerned an opportunity to make up some of the deficiencies and qualify for certification. In case of either deferral or rejection, the Panel’s reason(s) for doing so are also duly recorded.

j) The Panel may, on PCP’s recommendation or the NPO’s request or on the basis of its own judgement, defer its decision regarding an organisation. However this deferral is for a period not exceeding one year.

k) Once an organisation has been certified, PCP designs its web profile and places it on the Centre’s website. The profiles are derived from the evaluation conducted and prepared in consultation with the certified NPO. PCP periodically publishes these profiles in the form of a Directory of Certified NPOs.

l) In the event of applying for tax exemptions the NPO is required to furnish the certificate and the detailed evaluation report to CBR authorities (i.e. Chief Direct Tax Operations, CBR or the Zonal Commissioners of Income Tax) along with other required documents.

8) Every effort is made to complete the process of certification within 10-12 weeks of the NPO furnishing its duly filled in application. This, however, might take longer in case of NPOs that do not furnish some of the documents required with the application or if they do not submit their response to PCP’s evaluation report within the prescribed time.

9) Certification is valid for three years following the date on which certificate is issued. All subsequent renewals of certification are also valid for the same period of time. The renewal is based on a fresh evaluation.

10) A certified organisation should apply to PCP for renewal of certification within three months of the expiry of validity of certification earlier granted.

11) PCP informs the CBR and any other Certification Agencies of the names of certified, deferred and rejected organisations, immediately after the Panel decision.

12) All information provided by an organisation applying for certification is deemed public information unless specified otherwise.

13) The Certification Panel may withdraw certification in case of NPO’s dissolution, bankruptcy, failure to comply with mandatory reporting requirements, utilising the funds or property of the NPO for the benefit of people other than the stated beneficiaries, any of the information provided by the NPO having been proved to be false, or any of the material information proved to have been deliberately concealed by the organisation. Certification, however, shall not be withdrawn without giving the NPO concerned an opportunity of explaining its position in this regard.

14) Certification is a highly subsidised process and the applicant NPO pays a small proportion of the total cost of evaluation and certification (depending upon its size), the rest being borne by PCP. The subsidy is provided on a graduated scale so that the largest subsidy goes to the smallest NPO6.

15) In addition to certification, PCP also plays a role in the development and promotion of NPOs.

a) Capacity building is an important part of the certification regime. The capacity of an organisation is built during the certification process itself. In case of those organisations that do not meet the required standards for certification, PCP facilitates linkages with specialised capacity building organisations.

b) If the certified NPO intends to apply for tax exemptions under relevant laws, PCP also provides assistance in preparing required documents for submission to the CBR.

16) The Model is a living document, which is reviewed periodically in consultation with all stakeholders. The first such review was conducted in 2005-06.

17) Certain concepts and definitions used in this Model are explained below:

a) ‘Benchmark’ is a measurement or standard that serves as a point of reference by which process performance is measured.

b) ‘Beneficiaries’ are the men and women, communities, or organisations expected to benefit from the projects or programmes.

6 Certification fee schedule is available in certification application form as well as on PCP’s website (www.pcp.org.pk).


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http://www.pcp.org.pk/


c) ‘Best Practices’ are the processes, practices, or systems identified in organisations that performed exceptionally well and are widely recognised as improving an organisation’s performance and efficiency in specific areas. Successfully identifying and applying best practices can reduce expenses and improve organisational efficiency.

d) ‘Budget’ means an estimate of future incoming funds, expenditure and other applications of funds for a particular accounting period.

e) ‘By laws’ are the rules governing the operation of a nonprofit organisation. By laws often provide the methods for the selection of directors, the creation of committees, the conduct of meetings and other matters of similar nature.

f) ‘Capacity’ means all the resources available to an organisation, including people, money, equipment, expertise, linkages and information.

g) ‘Capacity building’ is a coordinated process of deliberate interventions by insiders and/or outsiders of a given organisation leading to (i) skill upgrading, both general and specific; (ii) procedural improvements; and (iii) organisational strengthening. Capacity building refers to investment in people, systems, institutions, and practices that will, together, enable organisations to achieve their development objective. Capacity is effectively built when these activities are sustained and enhanced with decreasing levels of external dependence accompanied by increasing levels of goal achievement.

h) ‘Charitable organisation’ is an organisation that is created and operated exclusively for religious, scientific, literary, educational, athletic, public safety, social development, rights advocacy or community service purposes, and does not distribute earnings, profits or surpluses to its members or staff.

i) ‘Charter’ means a description in writing of the purposes, aims, objects and the mode of functioning of an organisation. These may include the constitution, memorandum or articles of association, or the trust deed, depending upon the law whereby the NPO is registered.

j) ‘Chief Executive Officer’ means the executive head of the organisation working under the supervision and control of the governing body.

k) ‘Directory’ means a Directory of organisations certified by PCP. This document contains detailed organisational and programme information about NPOs included therein with an intent of promoting them from PCP platform.

l) ‘Disclosure’ for the purposes of this Model, means disclosure to the general public, notwithstanding any legal or statutory requirement to do so. There could be different means and modes of disclosure. For evaluation purposes, information or data shall be deemed to have been publicly disclosed once it is:

I. Published in a document which is meant for wide distribution; orII. Placed on a website; orIII. Submitted to a government department as public information.

m) A ‘donor’ is the one who gives something without receiving consideration for the transfer.

n) ‘Endowment’ is the principal amount of gifts and bequests that are accepted subject to a requirement that the principal be maintained intact and invested to create a source of income for an organisation.

o) ‘Evaluation’ means an assessment of an organisation, its programme(s) or project(s) (irrespective of whether the same have concluded or not). Evaluation also involves articulation of opinion and comments on the organisational structures and on the state of programme delivery of an NPO. It is a management tool that is built around a formal process for evaluating performance and impact that help measure progress towards achieving intermediate targets or ultimate goals.

p) ‘External evaluation’ means any evaluation conducted by an individual or organisation that is external to the NPO being evaluated. The Terms of Reference (ToRs) are defined by an external commissioning authority, and the evaluation report is primarily for an audience external to the organisation. ‘Internal evaluation’, on the other hand, means any evaluation conducted by an individual or organisation, either internal or external to the NPO, for primarily


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the internal audience of an NPO. Typically, the ToRs for an internal evaluation are also defined by the Board or the management of the organisation.

q) ‘Financial System’ is an information system, comprised of one or more applications, that is used for any of the following: collecting, processing, maintaining, transmitting and reporting data about financial events; supporting financial planning or budgeting activities; accumulating and reporting cost information; or supporting the preparation of financial statements.

r) ‘Fixed assets’ include land, building, vehicles and equipment.

s) ‘Governing body’ (GB) means the body, board, council or committee of directors, trustees or executives, as the case may be, in which control of the NPO is vested. Its name, for any given NPO, may depend upon the law whereby the NPO is registered or owes its juristic personality (e.g. for an NPO registered under section 42 of The Companies Ordinance, the Board of Directors is the governing body). For the purposes of this Model, any subcommittee of governing body formed with a specific mandate is deemed to be the governing body for that purpose.

t) ‘Grievance Settlement Procedure’ is a procedure for staff to object to and seek redressal against an order from a colleague or a senior officer that they believe to be illegal, unethical or counterproductive.

u) ‘Indicator’ is a feature or phenomenon that can be objectively measured in quantitative or qualitative terms as a means of gauging progress toward achieving a goal or measuring the impact of a specific intervention.

v) ‘Managerial staff or management’ of an NPO includes all persons performing organisational functions which are (wholly or in part) supervisory in nature.

w) ‘Monitoring’ is a continuous activity to keep track of and record what actually happens in a project or programme. Monitoring systems comprise procedural arrangements for data collection, analysis and reporting. It also defines reporting channels and requirements.

x) ‘Nonprofit Organisation’ is an organisation that is formed and registered under any law for religious, educational, health, environment, charitable, welfare or development purposes, promotion of amateur sport or for any other purpose of general public benefit. It is a non profit distributing concern i.e. all its income, commodities, property and other assets are applied solely towards the promotion of its objectives and none of its assets or income are paid or transferred directly or indirectly by way of dividend, bonus, remuneration, grant of other benefits by way of profit or otherwise howsoever; to any of its member or the relative or relatives of a member or members.

y) ‘Outcome’ is the ultimate, long-term resulting effect – both expected and unexpected – of the beneficiaries’ use or application of the organisation’s outputs.

z) ‘Outputs’ are direct products of a programme’s activities, generally measured in relation to inputs. They are quantitative and are typically measured by ‘how many’, ‘how often’ and ‘over what duration’.

aa) ‘Output Indicators’ are the specific characteristics or behaviours measured to track a programme’s success in achieving its outputs. They further define outputs and make them measurable.

bb) ‘Overall salary structure’ includes (but is not limited to) any established brackets or grades of salary and perks applicable on the employees of the NPO, and average salary of managerial and secretarial staff.

cc) ‘Policy’ means a document, duly approved by the governing body (or a sub-committee or the management, whosoever is authorised for such approval), which provides the details of procedures and processes to be adopted by the management of NPO to address any given issue on a specific subject, e.g. personnel policy, recruitment policy. For the purposes of this Model, following aspects of any given policy of an NPO are included in the definition of policy per se:

I. Approval procedureII. Extent of implementationIII. Mechanism to put it into practice


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IV. Wide knowledge among the staff that the policy exists

dd) ‘Pursuance of personal gain’ would include using official position in the organisation for obtaining any kind of material benefit either directly or indirectly, other than the payment for services provided.

ee) ‘Staff’ unless specified otherwise includes all paid workers, consultants and advisors of the NPO.

ff) ‘Transparency’ involves sharing information and acting in an open manner. Transparency allows stakeholders to gather information that may be critical to uncovering abuses and defending their interests. Transparent systems have clear procedures for decision-making and open channels of communication between stakeholders and organisations, and make a wide range of information accessible.

gg) ‘Unrelated persons’ are those who are not related to each other by relation of blood or marriage. For the purposes of this Model, relations by blood include parents, siblings, children, grandparents and real uncles/ aunts: Relations by marriage include spouse, brothers/ sisters-in-law and parents-in-law.


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Section I

The Pre-requisites

These standards are non-scored, as they constitute the pre-requisites for certification. An applicant NPO must fulfil these requirements before its application is processed for evaluation. Wherever this section requires a specific statement to be contained in the charter, the NPO’s compliance to such provision in the charter will also be examined.

No. The Standard Means of verification

1. The organisation is registered (under any of the registration laws7) and functional for the last (at least) three years8.

This can be verified by desk review of the registration documents, governing body’s meetings, annual reports, audit reports etc. provided by the NPO. The organisation should be registered as well as functional during the last three years.

2. The organisation is established for religious, educational, health, environment, charitable, welfare or development purposes or for the promotion of amateur sport or for any other purpose of general public benefit.

Desk review of the charter of the NPO may reveal this to sufficient extent.

3. The organisation does not propagate the views of any political party or religious sect.

Desk review of charter, publicity materials, publications and press coverage of the NPO would reveal direct political affiliation of the NPO, if any.

4. The charter of the organisation prescribes that in case of its dissolution any assets, remaining after the settlement of debts and liabilities, shall be transferred to a body or bodies in accordance with the applicable laws9.

Desk review of the charter will verify this fact.

5. The charter or other policy documents of the organisation state that it is a A desk review of the charter, policy documents, audited accounts and

7 E.g. The Trust Act, 1882; The Societies Registration Act, 1860; The Voluntary Social Welfare Agencies (Registration and Control) Ordinance, 1961; The Local Government Ordinance, 2001; The Religious Endowments Act, 1863; or The Companies Ordinance, 1984.8 PCP’s evaluation system is thorough and requires enough information and history of the organisation to evaluate it on certification standards. For this reason, PCP evaluates only those organisations that have a formal work experience of three years on the least. Organisations younger than this should approach the CBR directly, should they be interested in obtaining tax exemptions under Section 2(36) of the Income Tax Ordinance, 2001.


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non-profit-distributing organisation and that all its income, commodities, property and other assets shall be applied solely towards the promotion of its objectives. Further it prohibits that funds or property of the organisation or any part thereof are paid or transferred directly or indirectly to any of the directors/ staff of organisation or their relatives.

annual budgets will help to verify this.

6. All assets of the organisation (fixed as well as investments) are held in the name of or are legally assigned to the organisation or its Governing Body10.

An examination of the fixed assets ledger and purchase/ ownership documents, and bank statements will provide sufficient evidence.

7. The organisation has a functional governing body. A governing body shall be deemed to be functional if it has formally met at least once a year in any two of the last three years. Desk review of the minutes of the Governing body will verify this fact.

8. The organisation maintains its accounts with a scheduled bank, savings centre or post office. These accounts are in the name of the organisation.

Desk review of documents related to accounting procedures and transactions of the NPO may verify this fact.

9. An external auditor has audited the accounts of the organisation for the last three years.

Desk review of the NPO’s audit reports of the last three years will verify this fact. For this standard, audit refers to an organisational audit (covering all projects and programmes and the total expense of the organisation). Project audits are not admissible.

10. No adverse decree has been passed* during the last ten years against the NPO in any of the civil courts in Pakistan on grounds of fraud or breach of trust.

The NPO will be required to certify to this effect.

Note: * An adverse decree subsequently reviewed by the court itself or set aside by a higher court will not attract the application of this clause.

9 E.g. The Trust Act, 1882; The Societies Registration Act, 1860; The Voluntary Social Welfare Agencies (Registration and Control) Ordinance, 1961; The Local Government Ordinance, 2001; The Religious Endowments Act, 1863; or The Companies Ordinance, 1984.10 Any deviation(s) where the interests of the NPO have been taken care of, will be considered by PCP


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Requirements of the Income Tax Ordinance and Rules

An NPO applying for certification for the purpose of availing tax benefits11 is required to comply with the following requirements as contained in the Income Tax Rules, 2002.

No. The requirement

1. The charter of the NPO requires audit of the annual accounts of the organisation by a duly qualified auditor as prescribed by the IT Rules12.

2. The charter of the NPO provides for maintenance of accounts of the organisation being kept in a scheduled bank or in a post office or national savings organisation, National Bank of Pakistan or nationalised commercial banks.

3. The charter of the NPO prohibits any changes therein without prior approval of the Commissioner of Income Tax or CBR, as the case may be.

4. The charter clearly states that the NPO does not propagate the views of any religious sect or political party.

5. The quorum of meetings of the governing body of the NPO, as provided by its charter is not less than four* members or 1/3rd of total membership of such body, whichever is greater**.

6. The charter of the NPO prescribes that in case of NPO’s dissolution for any reason whatsoever, its assets, after meeting all liabilities, if any, would be transferred to another NPO within three months of the dissolution under intimation to the Commissioner of Income Tax or CBR, as the case may be.

7. The charter of the NPO prescribes for restricting the surpluses or moneys validly set apart, excluding restricted funds, up-to twenty-five per cent of the total income of the year.

Provided that such surpluses or monies validly set apart are invested in Government securities, NIT units, a collective investment scheme authorized or registered under the Non-Banking Finance Companies (Establishment and Regulation) Rules, 2003, mutual fund, a real estate investment trust approved and authorized under the Real Estate Investment Trust Rules, 2006, or scheduled banks.

For the purpose of this rule, “restricted funds” means any fund received by the organization but could not be spent and treated as revenue during year due to any obligation placed by the donor.”

8. The charter of the NPO provides for the regular maintenance of books of accounts in accordance with the generally accepted accounting

11 Under Section 2(36) and/or Clause 58 of the II Schedule of the Income Tax Ordinance, 2001.12

For a small NPO, audit is to be conducted by a retired Audit, Accounts, Taxation or Treasury officer of the government not below grade-17 or a Bank Manager, provided its receipts and expenditure pass through a bank; for medium NPOs the audit is to be conducted by a Cost and Management Accountant; for large NPOs the audit is to be conducted by a Chartered Accountant. An NPO may, however, have its accounts audited by a higher category auditor.


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principles and for their inspection by the interested members of the public, without any hindrance, at all reasonable times***.

9. Its area of operations is wholly in Pakistan***.

Note: * Three, if the applicant NPO is a Trust as defined in the Trust Act, 1882.

** This clause shall apply only if the NPO is applying for tax exemption under section 2 (36) of Income Tax Ordinance 2001.

*** This clause shall apply only if the NPO is applying for tax exemption under clause 58 of the 2nd Schedule of the Income Tax Ordinance, 2001.


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Section II

The Assessed Standards

This set consists of those standards whereby the NPO’s governance structures, financial management, and programmes’ performance and effectiveness is assessed objectively. Salient features of the scoring regime are as under:

a) An NPO can attain a maximum score of 1000.

b) The break-up of these scores is presented in the following table:

Categories of Standards Total The Minima

Internal Governance 300 150

Financial Management 300 150

Programme delivery 400 200

Overall 1000 600

c) There are three broad categories of standards as shown in column one.

d) The last row indicates the total obtainable score by an NPO viz. 1000.

e) The last column is important. First, it shows category-wise minimum score which an NPO must achieve to be finally certified. Second, the lowest cell in last column indicates that even if an NPO obtains minimum requisite scores in each category, it has to score an aggregate of 600 marks out of 1000 to be certified. This scoring system aims to ensure that an NPO must possess institutionalised capacity to perform through systems and processes.

ILLUSTRATION ONE:

An NPO scores 250 each in internal governance and financial management, but gets only 100 marks in programme delivery – certification denied.

ILLUSTRATION TWO:


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An NPO scores 175 each in internal governance and financial management, and 200 in programme delivery but its total score is 550 – certification denied.


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Category I – Internal Governance

No. The Standard Mode of Verification Applicable on

Weightage

1.1 The organisation is not a source of material gain for members of governing body (GB).

Desk review of charter, policy documents, rules, income & expenditure statements and minutes of governing body’s proceedings may be conducted. The field evaluators may also probe into this matter by inquiring from the members of the governing body, the senior managerial staff and the concerned people in the finance department of the organisation.

GB members get compensation / fixed monthly honorarium/ perks and benefits/ paid consultancy/ paid employment etc – zeroGB members do not receive any payment whatsoever from the NPO, except payment for travelling and lodging expense incurred in connection with official work – 20

All NPOs 20

1.2 The governing body consists of at least seven members.

The list of governing body members may be reviewed.

The NPO has at least seven members on the GB – 5The NPO has at least 5 (but less than 7) members on the GB – 3

All NPOs 5

1.3 There is adequate female representation on the governing body.

In case of organisations serving both members of the society presence of adequate female representation on the governing body will be checked.

At least 1/5th members of GB are female – 5

At least 1/3rd members of GB are female – 10

All NPOs 10


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1.4 The procedure adopted for the appointment of new Board members is democratic.

Desk review of the Charter may be conducted. The field evaluators may also probe this matter by asking specific questions from the governing body members of the NPO. They may specifically examine the process adopted for selection/ election of any two Board members joining lately.

Charter provides for hereditary nominations on the Board – zeroStaff is involved in election/ selection of Board members – zero Nomination/ Election of new Board members by sitting members or by General Body – 10

All NPOs 10

1.5 The governing body members serve for a specific term.

Provided that this standard shall not apply to trusts.

Desk review of charter and policy documents may be conducted. Specification of term of office does not exclude the provision of re-election.

The NPO has a specified term for governing body members – 5The limit is between 2 - 5 years – 5

All NPOs 10

1.6 The charter of the organisation stipulates a limit on the maximum allowable period for the chairperson of the governing body.

Desk review of the charter and record concerning terms of office of the chairperson may be conducted.

No limit on the maximum allowable period or limit above 15 years – zeroLimit specified, but has not been complied with – 3Continuous permissible period for chairperson is specified as 15 or less than 15 years and is also being complied with– 10No such limit exists or limit exceeds 15 years, but the GB has selected/ elected different chairpersons during the last 15 years – 5

All NPOs 10

1.7 The governing body of the organisation meets at least twice a year. The minutes are kept regularly and circulated to all its members within thirty days of the meetings.

Desk review of documents related to governing body meetings may be conducted. Moreover, field evaluators may also verify this from staff and governing body members.

GB has met at least twice a year in any two of the last three years – 5GB has met at least twice a year in all the last three years – 10Documentary or other evidence of issuance or receipt of minutes is available – 5

All NPOs 15


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1.8 The quorum for GB meetings, as specified in the charter, is 1/3rd. The GB observes the quorum requirements in its meetings as specified in its charter or other documents.

Desk review of charter and minutes of GB meetings will verify this fact. In this respect, minutes of all meetings of the governing body and relevant sub-committees, if any, for the last three years may be reviewed.

Field evaluator may also ask questions in this behalf to some of the members of the governing body and employees during field evaluation.

Quorum is 1/3rd – 5Quorum is not specified or is less than 1/3rd – zeroQuorum requirements followed in all meetings – 10Quorum requirements followed in at least 80% of meetings – 5

All NPOs 15

1.9 The pattern of absenteeism among the governing body members is random.

Attendance registers of GB meetings over the last three years should be desk reviewed and analysed to study the pattern of absenteeism. Purpose of the standard is to know if the same governing body members are always present/ absent from the meetings.

Pattern of absenteeism is Very random – 10 Fairly random – 5

Very regular – zero

All NPOs 10

1.10 The organisation has a mechanism to replace the continuously absenting GB members.

Provided that this standard shall not apply to Trusts.

Documents relating to attendance of members of the governing body in meetings will be examined. Specific questions may be framed to ask whether the procedure for non-compliance has ever been put to motion. Documents related to this may be reviewed.

Field evaluators may also put specific questions to this effect to the staff and GB members of the NPO.

There is a provision in charter to address absence of GB members – 2If there has been any instance, the provision has been invoked – 3

All NPOs 5


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1.11 At least 2/3rd of governing body is un-related to each other.

Provided that, in case of Trusts, this standard shall apply only for renewal of certification.

Disclosure of relationships by the NPO in the application may be desk reviewed. Further, the staff of the NPO may be asked questions to this effect by the field evaluators.

At least 2/3rd of GB members un-related – 15Between 1/3rd and 2/3rd of GB members un-related – 5Less than 1/3rd of GB members un-related – zero

All NPOs 15

1.12 The paid managerial staff is not related to the governing body members.

The Field Evaluators will ask questions from the governing body members and the staff of the NPO.

No relationship – 10Less than 1/5th of the managerial staff related to GB members – 7More than 1/5th of the managerial staff related to GB members – zero

All NPOs 10

1.13 The process to be adopted by the Governing Body or the General Body for amending the charter is participatory.

Desk review of the charter will answer this question. During field evaluation, specific cases of amendments in the charter and the process adopted be also examined.

Governing body or general body are exclusively responsible for amending the charter – 5Amendments can only be effected with at least 2/3rd majority of the total members – 5

All NPOs 10

1.14 The governing body appoints the Chief Executive Officer (CEO). The governing body is also involved in the appointment of the Senior Management.

Letter of appointment, agenda items’ lists, minutes of governing body’s meetings etc. may be reviewed. Specific questions may also be asked from GB members, CEO and Senior Management in this regard. Mode of appointment of the incumbents may be examined.

GB interviews the CEO and formally approves his/ her appointment – 2GB approves terms & conditions and salary of CEO – 2GB periodically evaluates the performance of CEO, especially before renewing his/her term – 3The CEO is neither a voting GB member nor related to any GB member – 3The GB approves appointment of Senior Management – 5 (applicable only to M/L NPOs)

All NPOs 15


16


1.15 The governing body approves annual budget as well as reviews the actual expenditure of the organisation.

Desk review of organisational budget documents, agenda items’ lists and minutes of governing body’s meetings may be conducted. For the purposes of this standard, only organisational budget (which includes all programmes/ projects and covers all expense by the organisation) will be considered.

Budget approved by the GB in all three years – 10Budget approved by the GB in any two of the last three years -- 5Expenditure reviewed in all of the last three years – 10Expenditure reviewed in any two of last three years – 5

All NPOs 20

1.16 The governing body approves the organisational and financial policies of the organisation. The organisation has shared its policies and procedures with staff.

Desk review of the minutes of the GB meetings would reveal the governing body’s role in approving organisational policies of the NPO. Field evaluators will verify the sharing of policies with staff by engaging the staff members in discussion in which questions about the existence or otherwise of different policies, their nature, specified principles, approval procedures, etc will be asked.

GB approved the personnel/ HR/ recruitment policy – 5GB approved the financial policies – 5No policies were placed before the GB for approval – zeroPolicies have been shared with the staff – 5

M/L NPOs 15


17


1.17 The organisation has a written recruitment policy. Desk review of policy documents or by-laws of the NPO concerning the recruitment procedure may be conducted.

Documents relating to actual recruitment of staff during the last year may also be reviewed during the field evaluation to ascertain whether the policy has been actually followed. The field evaluators may also engage the staff in discussion to find out their perception of the recruitments made. The field evaluators may interview one/two persons recruited during the last three years to assess the level of transparency in recruitment.

The organisation has a written recruitment policy, and the policy covers the following:a) Requisite Qualifications and experience – 2b) Advertisement for all vacant managerial and professional

positions – 3c) Selection criteria, short listing, reference checks and

interviewing – 2d) Issuance of formal appointment letters – 3The recruitment is transparent and merit based, and the organisation (even if the policy does not exist) advertises vacancies, conducts interviews and issues appointment letter – 2+3+2+3=10

M/L NPOs 20

1.18 The recruitment of the organisation is gender sensitive or proactively promoting employment of women, if the nature of work so allows.

Desk review of policy documents, advertisements, recruitments process and employee lists may be conducted.

Additional documents relating to issues allied with female gender like grant of maternity leave may also be desk reviewed to ascertain this standard.

Gender sensitive recruitment (or proactively promoting women employment) policy statements in advertisements and policy documents – 5The NPO’s workforce is gender-balanced with respect to the nature of work – 5

All NPOs 10


18


1.19 The organisation has clearly defined salary structure and compensation packages for its staff.

Review of approved salary structure, salary sheets and budget for the last three years may be conducted. Field evaluators may also put specific questions to various categories of employees in this regard.

As a sample check, the salaries (including benefits) of some of the same categories employees may be examined to see if these fall within the salary structure approved by the GB for such category of employees.

M/L NPOs 05

1.20 Men and women are comparably paid within their respective categories. They also receive comparable staff development and training opportunities.

The field evaluators need to ask these questions specifically from the female employees of the NPO. Additionally, documents concerning salary and other payments to men and women in the same category, professional growth and training opportunities offered and availed during the last three years may also be reviewed.

Men and women in the same category receive comparable salaries and benefits – 5Both men and women are offered and avail comparable professional growth opportunities – 5

All NPOs 10


19


1.21 The organisation has a written personnel policy. Desk review of policy documents containing various ingredients as defined in the standard may be conducted.

Random assessment of due observance of this policy (if present) may also be conducted and specific questions asked by the field evaluators from managerial and other staff of the NPO. In particular, staff’s perception of fairness in the organisation may be assessed. Also, cases of say, dismissals or promotion, may be selected at random for detailed examination.

The organisation has a written personnel policy, and the policy covers the following:e) Employee benefits – 2f) Increments and promotions – 2g) Performance assessment – 2h) Retirement and resignation – 2i) Organisational discipline (including dismissal and termination)

and efficiency – 2Even if the policy does not exist, there is sufficient evidence of implementation of the above – 2+2+2+2+2 = 10

M/L NPOs 20

1.22 The organisation has clearly defined job description statements for its staff.

Field evaluator may conduct a review of related documents (ToRs, appointment letters etc.).

Job description statements are available forManagerial positions – 2Programme positions – - 2

There is some evidence of due receipt of these statements by the employee concerned

For all staff – 6 Only for about 50% of the staff – 2

M/L NPOs 10


20


1.23 The organisation has a participatory performance appraisal system.

The Field Evaluators will review the documents pertaining to the performance appraisal of the organisational staff. The staff members will also be inquired about the nature and process of the appraisal undertaken.

The staff is aware of the indicators and mechanism of their performance evaluation – 1Performance evaluation is shared by the reporting officer before it is finalised – 2Team members get the opportunity of confidentially providing formal feedback on the quality of supervision provided – 2

Large NPOs

5

1.24 The organisation has a travel policy. Desk review of the policy and documentation related to national and international travel, approval procedures, acceptance of invitations etc. Besides, staff and governing body members may be asked questions in this regard. Specifically, the use of office vehicles in the after office hours and on weekends may be checked.

Travel policy covering national and international travel present – 3Air travel, if any, in economy class – 2Office vehicles are not under unauthorised personal use – 5

M/L NPOs 10

1.25 The organisation has a mechanism to avoid conflict of interest.

Desk review of charter, rules, and policy documents may be carried out to verify if the NPO has a declared conflict of interest policy and some mechanism to implement the policy.

The field evaluators may also review record of recruitments, financial transactions etc, to see if the policy is being implemented. Of special interest would be large purchases made by the organisation.

There is a formal conflict of interest policy – 5GB members and staff declare conflict of interest, if any, in recruitments, purchases disposals etc – 5

M/L NPOs 10


21


1.26 The organisation has a grievance settlement policy for its employees and necessary arrangements to actualise it.

Desk review of charter or policy documents (duly issued and circulated) and documents regarding disposal of some of such applications may be conducted. Field evaluators can also verify this from employees of the NPO in the course of field evaluation.

A policy or procedure is formally laid down and approved by the GB – 2 The employees generally feel that they have an opportunity to settle their grievances internally – 3

M/L NPOs 5


22


Category II: Financial Management


Weightage

2.1 The organisation has a joint signatory system, duly approved by its governing body.

Desk review of documents related to financial transactions of the NPO may be conducted.

Joint signatory system exists – 3No joint signatory system exists – zeroPool of signatories is larger than the minimum required for signing cheques – 5Joint signatory system has financial brackets of signing authority – 3The system is duly approved by governing body – 4

All NPOs 15

2.2 The cheques made payable to a nominated signatory are not signed by him/ her.

Review of documents relating to payments to signatories would provide evidence to this effect. (May not be applicable on salary withdrawals).

All NPOs 10

2.3 All payments exceeding Rs. 10,000 are made through cross cheques.

Review of financial documents concerning purchases, payments to consultants and staff etc. would provide sufficient information. Specific questions be also asked from staff regarding payment of their salaries. Payment of utility bills can be, however, made in cash.

All NPOs 10

2.4 The governing body authorises the appointment of auditors and opening of bank accounts. The organisation appoints a different external auditor after at most five years.

Field evaluator may examine relevant documents and put questions to GB members and finance personnel. List of auditors during the last five years should also be examined.

GB approves appointment of auditors – 6GB approves opening of accounts – 4The auditor is changed after at most five years – 5

All NPOs 15


23


2.5 The organisation conducts its internal audit annually. The internal audit report is shared with the external auditors.

Provided that this standard shall apply only to organisations with average annual receipts larger than 10 million.

Desk review of related documents (e.g. internal audit reports) may be conducted.

Internal audit conducted in all of the last three years – 10Internal audit conducted in any two of the last three years – 5No internal audit conducted or in any of the last three years – zeroInternal audit reports provided to external auditors – 5

Large NPOs 15

2.6 The balance sheets, income & expenditure statements (or receipts & payments accounts) and cash-flow statements are prepared.

These statements may be reviewed during field evaluation.

Balance sheet (not applicable on small NPOs) – 5Income & expenditure statement/ receipts & payments accounts – 5Cash-flow statement (not applicable on small NPOs) – 5

All NPOs 15

2.7 The organisation regularly maintains cashbooks, salary and petty cash records.

Field evaluator’s review of these documents would prove their due maintenance.

NPO maintainsCash Books – 5 Salary records – 5 Petty-cash records – 5

All NPOs 15

2.8 The organisation circulates its annual audit report amongst members of its governing body within six months of closure of its financial year.

Desk review of the report and circulation mechanisms may be conducted.The field evaluators may also ask questions from staff and GB of the NPO in this behalf.

NPO circulates its annual audit report amongst GB – 6The circulation amongst GB is within six months of closure of financial year – 4

All NPOs 10


24


2.9 The organisation duly discloses to the public its expenditure on various heads.

Desk review of relevant documents (annual reports, periodic reports, web site etc) may be conducted.

NPO has disclosed its expenditure in the following heads (during all of the last three years) in its annual reports, website, documents meant for public circulation, or documents provided to the government:Administrative expense – 4Capital expenditure – 4Foreign and local travel – 4Maintenance of transport – 4Remuneration and reimbursement to staff and consultants – 4The NPO has disclosed such information during any two of the last three years – (2+2+2+2+2 =) 10

All NPOs 20

2.10 The organisation prepares annual budget. The organisation also prepares variance reports (comparison of actual results with budget) with regular frequency.

Review of budget document and actual expenditure may be conducted during field evaluation. For this standard, only the organisational budget (covering all programmes/ projects and the entire expenditure) shall be considered. The existence of variance reports will be verified and their frequency will be determined.

The organisation has prepared budget during each of the last three years – 10The organisation has prepared budget during the last two years – 5Variance reports are prepared at least once every year – 3Variance report shared with GB members – 2

All NPOs 15

2.11 The organisation maintains separate bank accounts for funds received from different donors or for different programmes. The organisation also adopts accrual based system for maintenance of its accounts.

This will be verified from the finance department of the NPO. List of accounts will be examined. Review of accounting sheets and auditor’s report will also be conducted.

The organisation maintains separate bank accounts for funds received from different donors or for different programmes – 5 The organisation adopts accrual based system for maintenance of its accounts – 5

M/L NPOs 10

2.12 The organisation reconciles its accounts with banks at regular intervals.

Reconciliation statements may be examined.

All accounts are reconciled each month – 10All accounts are reconciled on quarterly basis – 5

All NPOs 10


25


2.13 Cash funds are kept on an imprest basis. Reimbursement procedures may be examined.

Cash is kept in a safe place – 2Reasonable in amount – 2Periodically counted by someone other than the custodian – 1

All NPOs 05

2.14 The incoming receipts are banked regularly and at the earliest.

Financial records, especially the ones pertaining to cash donations (e.g. receipts books, donation boxes) may be examined.

All NPOs 10

2.15 The organisation uses computerised accounting software to perform its accounting function.

The name of the software used by the organisation will be obtained. Large NPOs 05

2.16 The organisation has an appropriate system of receiving and recording procured items.

Review of procurement policy and the process adopted for receiving and recording a few randomly selected procurements will provide evidence in this regard.

Received items are inventorised – 5Received items are entered into inventory within one month – 5

All NPOs 10

2.17 The organisation maintains fixed assets records.

Fixed assets records may be examined. Additionally, the staff be asked about the processes of custody, periodic counting and updating.

The fixed assets records contain item code, description, date of acquisition, cost, book value, accumulated depreciation and location – 5Fixed assets are checked at least once a year – 5Fixed assets record is updated at least once each year – 5

All NPOs 15


26


2.18 The organisation has a purchase and procurement policy.

Desk review of policy documents will verify the existence of a purchase and procurement policy. Field evaluator may examine the record of purchase sanctions, minutes of related governing body meetings and other record.

The purchase and procurement policy includes the following:Invitation of at least three quotations/ bids – 4Comparative evaluation of bids/ quotations – 3Hierarchical distribution of purchase sanctioning authority, duly approved by GB – 3

Verify through field evaluation, actual compliance of the following in the last three years Invitation of bids/ quotations – 4

Comparative evaluation of bids/ quotations – 3 Approval by the designated sanctioning authority – 3

All NPOs 20

2.19 The organisation has a policy on disposal of assets.

Desk review of the policy documents or by-laws may be conducted.

The documents indicating due compliance to this policy may also be critically reviewed. If any asset has been disposed off during the last three years, the process adopted should be examined.

The NPO has a Policy for disposal/sale of asset – 4In the field review, following be verified (if any disposal of assets has taken place)

Due authorisation obtained for all assets disposed off – 3 Assets disposed off through transparent process – 8

M/L NPOs 15

2.20 The organisation has a policy regarding investments.

Provided that this standard shall apply only if the organisation has an accumulated surplus to carry forward from one year to the next that is larger than 25% of its average receipts during the last three years.

Desk review of policy documents may be conducted to verify the existence of an investment policy. Further, documents relating to actual implementation of such policy may also be reviewed.

NPO has an investment policy – 3The governing body approves investment decisions – 3Investments made are in line with the NPO investment policy – 4

Large NPOs 10


27


2.21 The organisation has multiple sources of funding.

Provided that this standard shall not apply to organisations that have endowments large enough to support their operations.

Documents related to NPO’s financial resources (balances, pledges, accruals, agreements etc.) and its financial plans should be desk reviewed. In this regard specific questions from the governing body members and the finance personnel of the organisation will also be asked. Sources insignificantly small shall not be considered for the purposes of this standard.

More than two sources – 10Only two sources – 5

M/L NPOs 10

2.22 The organisation has sufficient resources to continue its operations at current level.

Documents related to NPO’s financial resources (balances, pledges, accruals, agreements etc.) and its financial plans may be desk reviewed to assess if the NPO has sufficient resources to continue its operations at current levels for at least another year.

The NPO has sufficient resources to sustain its operations for another year – 10The resources presently available are not sufficient, but the NPO has a viable plan to generate sufficient resources – 5The NPO has neither the resources nor a viable plan – zero

All NPOs 10

2.23 The organisation settles the accounts with an employee leaving the organisation within two months of end of his/ her services.

Rules and regulations in this behalf should be desk reviewed. Random cases may also be examined in detail on the basis of related documentation.

Field evaluators may examine any three cases (selected at random) of employees who left the NPO during the last three years.

The NPO settles accounts of employees leaving the NPO within two months – 05

All NPOs 05

2.24 The organisation deducts at source income and withholding tax in accordance with the Tax laws in force. The organisation regularly files its tax return to the competent tax authorities.

Documents concerning payments to staff and suppliers may be reviewed during field evaluation. Copies of tax returns of the last three years may be examined.

The NPO deducts income and withholding tax at source in accordance with law – 10The NPO regularly files its tax return -- 5

All NPOs 15


28


2.25 The organisation has adequate arrangements in place for custody of accounting records.

Arrangements for custody of accounting records may be examined.

Accounting records for the last eight years are kept in safe custody – 10Accounting records for the last three years are kept in safe custody – 5

M/L NPOs 10


29


Category III – Programme Delivery


Weightage

3.1 The managerial and programme staff, and members of the governing body clearly understand the mission and objectives of the organisation.

Field evaluators may facilitate a discussion with the managerial and programme staff, and members of GB of the NPO. The scoring shall be on a scale.

Managerial and programme staff understand the mission and objectives of the NPO – 5GB members understand the mission and objectives of the NPO – 5

All NPOs 10

3.2 The programmes and activities contribute to organisational mission and objectives.

Review of programme documents may be conducted. During field evaluation, discussions with the GB members and staff would help the evaluators in understanding and appreciating the relevance of current and future programmes with what the organisation seeks to achieve.

All programmes and activities contribute to organisational mission and objectives – 2080% resources are invested on programmes and activities that contribute to organisational mission and objectives – 1550% resources are invested on programmes and activities that contribute to organisational mission and objectives – 5

All NPOs 20

3.3 The programmes and services provided by the organisation are need based.

Formal need assessment, if any, (by the NPO or by any other agency) may be reviewed. During field evaluation, existence of similar services by other organisations or government may also be ascertained. Detailed discussion should be held with programme staff and beneficiary communities on the felt and expressed needs of the target communities and how organisational programmes address these needs.

Community need is assessed before launching programmes – 10

All NPOs 10


30


3.4 The organisation has collected baseline data for its programmes.

Reports containing baseline data may be reviewed.

Baseline data exists for most interventions – 10Baseline data exists for some interventions – 5

Large NPOs

10

3.5 The organisation ensures that the staff is involved in programme/ project planning and design.

Field evaluators may engage the staff of the NPO, especially the programme staff, in discussion and ascertain whether programme/project planning is participatory or not.

The organisation offers opportunities to staff to give input for new initiatives, interventions – 5The organisation seeks staff input for improving existing activities – 10

All NPOs 15

3.6 The organisation networks with other organisations working in the same area (geographic and sectoral).

Formal communication with other organisations (including government) in the same area may be reviewed. The field evaluators may examine documentary evidence of the level and extent of such engagement. Additionally, the field evaluators may engage programme staff in a dialogue to assess the efforts and activities to create synergies with other organisations.

The organisation is part of a network of organisations – 5The organisation has developed (formal and informal) partnerships with other organisations to create synergies – 10

All NPOs 10

3.7 The programme progress is reviewed by the governing body regularly.

Desk review of minutes of the governing body meetings, working papers, agenda and programme reports for the last three years may be conducted.

GB reviews programme progress twice every year – 10GB reviews programme progress annually – 5

All NPOs 10


31


3.8 Members of the governing body and senior managerial staff regularly visit programme areas of the organisation.

Provided that this standard shall not apply to rights or advocacy organisations, which do not have any programme areas.

Documents concerning field visits of GB members and senior management staff (e.g. visit notes, tour diaries, reports) may be examined by the field evaluators. The field evaluators may also ask this question specifically from the senior management. Further, during their visit of the field outlets, the field evaluators may ask the NPO staff at such outlet about such visits during the last three years.

At least two GB members have visited most major programme areas during each of the last three years – 15At least any one GB member has visited most major programme areas during each of the last three years – 10At least any one GB member has visited some major programme areas during each of the last three years – 5

Senior management visits most of the major programme areas at least twice every year – 10The senior management shares their visit experience with other members – 5

All NPOs 30

3.9 Staff meetings are held regularly. Field evaluators may ask staff of the NPO specific questions in this regard.

Staff meetings are held at least bi-monthly – 5Junior programme staff also participates in the meetings – 5Participants perceive these meetings to be participatory and useful – 5

All NPOs 15

3.10 The managerial and programme staff possesses relevant professional experience/ qualifications for delivering the programmes.

Job descriptions, academic qualifications and past experience of the managerial and operational staff of the NPO may be examined during field evaluation.

Managerial staff possesses the relevant professional experience/ qualifications – 5Programme staff possesses the relevant professional experience/ qualifications – 5

M/L NPOs 10


32


3.11 The organisation provides professional development opportunities to its employees.

Documents concerning professional growth and training opportunities offered and availed during the last three years will be reviewed. The Field evaluators will also ask specific questions from the staff members.

The organisation has a transparent and participatory process for selection of employees for professional development – 5At least 30% of the staff (all tiers) attended professional training during last three years – 5

M/L NPOs 10

3.12 The organisation has appropriate human resource to carry out its administrative and programme activities.

The human resources (employees and volunteers) available with the NPO may be assessed in the context of targets set by the NPO for achieving its objectives during the last three years. The workload may be compared with the number of persons employed in various sections/ programmes to assess if the number of employees is less, excessive or appropriate.

The organisation has appropriate number of administrative staff – 5The organisation has appropriate number of programme staff – 5

All NPOs 10

3.13 The organisation has put in place mechanism and systems to monitor its programmes and activities.

Monitoring tools, if any (e.g. reporting formats, progress reports, work plans, indicators, logical frameworks, activity sheets, feedback surveys) may be examined. Desk review of documents showing input of monitoring results in subsequent programme/project design etc. may be examined. The purpose is to find out if decisions are based on the systematic collection of quantitative and qualitative information. During field evaluation, the managerial staff may be requested to explain ways and means adopted by the organisation to monitor routine activities of the organisation.

There is a system of regular flow of information to the management – 5Formal monitoring tools are used to monitor activities – 10The organisation utilises monitoring results to improve programme delivery – 10

All NPOs 25

3.14 The organisation has a separate monitoring section or designated monitoring staff.

Field evaluators will verify this by asking questions from the programme staff of the organisation. In the case of existence of a separate section for monitoring, discussion with the concerned staff will be held and an inquiry into their monitoring mechanisms will be conducted.

Large NPOs

10


33


3.15 The organisation has devised measurable indicators to assess and monitor the progress of its programmes.

During desk review, relevant documents (details of indicators, monitoring formats, project documents containing time-lines etc.) may be examined to ascertain if the NPO has devised some indicators to measure and monitor programme progress and outcomes.

The organisation has developed at least three indicators to monitor and assess the progress of most of its programmes/projects – 10The organisation has developed at least three indicators to monitor and assess the progress of some of its programmes/projects – 5The indicators are specific, relevant, measurable, achievable and time bound – 5The indicators provide comprehensive information about the programmes – 5

M/L NPOs 20

3.16 The organisation defines measurable targets for its programmes.

Documents concerning the targets (in respect of major programmes only) set by the NPO for each year (meeting minutes, project proposals, monitoring documents etc), data regarding achievement of these targets and its analysis may be reviewed. Further, during field evaluation, specific questions may be asked from programme staff regarding the time and manner of fixation of these targets. Reasons for under/over achievement may also be discussed.

The organisation has set targets during each of the last three years – 5The organisation has set targets during any two of the last three years – 3The targets are documented and shared with programme staff – 5 (applicable only to medium and large NPOs)

All NPOs 10

3.17 The organisation has been consistently achieving its targets during the last three years.

Documents concerning the targets and outputs may be examined. Specific questions may be asked from programme staff during field evaluation.

The organisation achieved its targets during each of the last three years – 25The organisation achieved its targets during any two of the last three years – 15

All NPOs 25


34


3.18 The organisation has expanded its services during the last three years.

The NPO services (outreach in terms of number of beneficiaries of various organisational interventions or the range or quality of interventions and services) during each of the last three years may be reviewed. Provided that circumstances outside the control of the organisation, if any, should be given due consideration while assessing this standard.

The NPO has increased its outreach during last three years – 15The NPO outreach has remained static during the last three years – 5

All NPOs 15

3.19 The organisation obtains regular feedback from the beneficiaries of its services.

Related documents including beneficiary feedback formats, if any, and reports may be examined. Discussions with the staff will also provide useful information about the nature and extent of organisations interaction with its clients for obtaining feedback.

The organisation obtains regular feedback from its beneficiaries – 10Beneficiary feedback is documented and obtained in a systematic manner – 5Beneficiary feedback is used to improve programme delivery – 5

M/L NPOs 20

3.20 The organisation has evaluated its programmes. Evaluation reports, agenda, commissioning documents, ToRs may be examined. Evaluation shall include both internal and external evaluations. Only evaluations conducted during the last 5 years and for which evaluation reports are available shall be considered.

Evaluation was conducted of all major programmes – 10Evaluation was conducted of some of its major programmes – 5An organisational evaluation has been conducted – 5

Large NPOs

15

3.21 The beneficiaries of the organisation are generally satisfied with the services provided.

Field evaluators may talk to some of the programme/project beneficiaries during their visit of the service outlets and get a general feedback on the quality of services being provided. In case of advocacy organisations, indirect beneficiaries or intermediary stakeholders may be approached for feedback. Provided that this standard shall not apply if a beneficiary feedback survey conducted by an external agency during the last three years is available for reference. The scoring shall be on a scale.

All NPOs 25


35


3.22 The organisation periodically prepares and disseminates reports to update stakeholders on its programmes.

The periodic (generally annual, but also biannual or biennial) reports prepared and disseminated during the last three years may be examined. Progress reports, if prepared for public dissemination, will also be considered. Introductory brochures or flyers will not be included.

Reports were prepared and disseminated in each of the last three years – 10Reports were prepared and disseminated in any two of the last three years – 6Reports were prepared and disseminated in any one of the last three years – 3

M/L NPOs 10

3.23 The periodic reports contain major programmatic achievements, major financial statistics and future plans.

The periodic reports for the last three years may be examined. Only those reports will be considered that are meant for public circulation.

The report contains:Major programmatic achievements – 4Major financial statistics –4Future plans – 2

M/L NPOs 10

3.24 The organisation has prepared a long-term operational plan.

Provided that this standard shall only apply to organisations that were established at least five years ago.

Planning process and documents may be examined. Long-term planning shall mean planning for at least next three years.

Formal long-term planning – 10Informal long-term planning – 5

Large NPOs

10

3.25 The organisation does not pay any commission to fund-raising staff members.

Provided that this standard will not apply to professional organisations or agencies especially engaged for the purpose.

Desk review of documents related to fund-raising may be conducted. Discussions with the staff, especially the ones involved in fund-raising activities, will also provide useful information in this regard.

All NPOs 10


36


3.26 The organisation is providing services in geographically or socially difficult areas.

‘Geographically difficult’ will mean geographical areas, which the Government has notified as such, or are far-flung or difficult to access. Similarly, public benefit activities of an organisation, which it has to carry out in the face of expressed hostility by vested interest, would also qualify as ‘socially difficult’.

The list of operational areas may be examined and field evaluators should engage programme staff in discussion to ascertain if the organisation is providing services in geographically difficult areas or implementation of its programmes requires coping with social disapproval and/ or hostility from people whose interests are affected.

Around 50% resources are consumed in hard areas – 10Around 25% resources are consumed in hard areas – 5

All NPOs 10

3.27 The organisation has its own website, which is updated regularly.

The organisation may be asked a direct question. The web site, if present, may be visited and date of last update may be checked. The mechanism and organisational capacity to update its web site regularly may also be ascertained.

The organisation has its own web site – 2The web site was updated during the last six months – 3

M/L NPOs 5

3.28 The organisation consciously avoids un-hygienic conditions and environment unfriendly practices in its activities.

Dialogue may be held with the staff to ascertain this. Additionally, general office cleanliness and ordinary activities like disposal of waste, usage of paper etc may be examined.

M/L NPOs 5

3.29 Organisation’s previous donors express satisfaction with the working of the organisation.

Any two major donors (individual, corporate, diaspora or international) during the last three years may be contacted (by telephone or electronically) and asked about their experience of supporting the organisation.

All NPOs 15


37



38

Approved

RejectedCapacity Building

Standards Met

Desk Review Field Evaluation

Evaluation

NPO

PCP

Initial scrutiny

StandardsNot Met

Mandatory Requirements Met

Taxation Authorities

Certification Panel (Non-GoP & GoP)

Enhanced Credibility

Increased Donor

Assistance

PCP Directory

Tax Benefits

Mandatory Requirements Not

Met

Certification Process

DeferredCapacity Building

Appendix I



39

PCP sends the Application Form (or the NPO downloads this from PCP website) to be filled-in by the applicant NPO. The Form contains the checklist of documents to be attached.

The applicant NPO submits the duly filled Application Form along with the required documents and a demand draft (evaluation fee) in favour of PCP.

PCP starts the evaluation process by screening the application etc. to see if the NPO fulfils the pre-requisites.

Evaluation team evaluates the organisation against laid down standards.

If the application is not complete, applicant NPO is notified of the missing documents.

If NPO does not fulfil the pre-requisites, the application is returned to the NPO with suggestions/ comments.

PCP schedules the field evaluation and coordinates with the NPO to prepare schedule of visit by PCP team. PCP sends the applicant NPO a tentative schedule for the field visit.

If the NPO meets all pre-requisites, formal evaluation is initiated

CERTIFICATION PROCESS

Organisation expresses interest in certification

NPO agrees with the schedule for its field evaluation.

Appendix II



40

For Field Evaluation

PCP makes all necessary arrangements for the field visit and draws final and detailed schedule of activities

Evaluation report is prepared

The evaluation team visits the NPOs Office (including selected field outlets), meets a few governing body members, staff and beneficiaries. Organisational and programme matters are discussed in detail in an informal setting. Selected records are also examined.

Evaluation team sits together to discuss its assessment of the NPO against certification standards and prepares outline of the evaluation report

The evaluation report and organisation’s comments are submitted to the Certification Panel (CP) for the final decision.

Certification Panel makes a decision

The CP decides to refer the case back to PCP for re-evaluation

The CP decides to defer/ refuse NPO’s request for certification

PCP repeats the process in line with guidelines provided by the CP

The NPO is informed of such decision and facilitation in developing linkages with specialised capacity building organisations is provided

The CP decides to accept NPO’s request for certification. The NPO is notified of the decision and a certificate is issued

Evaluation report is shared with the NPO and its comments on the same are obtained



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Certified NPOs can apply to the CBR for tax benefits.

Certified NPOs are added in PCP’s Directory/database of NPOs.

Directory of certified NPOs is circulated to national and international donors and diaspora communities



42

Field Evaluation

NPO

PCP

Evaluation

Financial Management

Desk Review of application

Programme DeliveryInternal Governance

Discussion with Staff

Verification of Accounts

Beneficiary Feedback

Discussion with Staff

Discussion with Board Members

Evaluation of Documents

Visit of Field Outlets

Assessment Report

Decision on Certification Application

Assessment Report

NPO

Appendix III

Field Evaluation Chart

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