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Better performing NGOs do report more accurately?: evidence from investigating Ugandan NGO financial accounts

Burger, Ronelle; Dang, Canh Thien; Owens, Trudy


Ronelle Burger

Canh Thien Dang

Trudy Owens


Improving ways to assess development outcomes and to identify corruption is considered imperative for NGO sustainability. Yet, little has been done to understand the connection between the effectiveness of NGOs and their financial accountability. We use Benford’s Law as a cost-effective and replicable measure to identify fraudulent financial reports of a representative sample of Ugandan NGOs. We find that 25% of the sample provided financial information that did not conform to the Benford distribution, suggesting cases of irregularities that a regulatory body would be advised to investigate. We observe NGOs with better ratings from their beneficiaries are more likely to submit credible financial data. This contradicts the belief that upward accountability demands crowd out serving the client community. We also distinguish between the decision to withhold requested financial information and the decision to report inaccurately. There is no evidence that the two decisions are related, with the decision to not provide all requested financial information attributed to limited capacity and skills. Based on these results, we recommend additional support for NGOs to assist with bookkeeping activities and an expansion of the larger role for beneficiary-based assessments in monitoring the sector.

Journal Article Type Article
Publication Date Feb 25, 2019
Journal Economic Development and Cultural Change
Print ISSN 0013-0079
Electronic ISSN 1539-2988
Publisher University of Chicago Press
Peer Reviewed Peer Reviewed
APA6 Citation Burger, R., Dang, C. T., & Owens, T. (2019). Better performing NGOs do report more accurately?: evidence from investigating Ugandan NGO financial accounts. Economic Development and Cultural Change, doi:10.1086/703099
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