Accounting for Governments and NPOs

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The report covers the Arab Gulf Program for Development (AGFUND). It looks at the history, beneficiaries, scope, reporting, and resources of AGFUND. The report relies on principles of Accounting for governments and not-for-profit organizations.

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History of the Organization

“His Royal Highness, Prince Talal Bin Abdul Aziz Al Saud together with other leaders from the Gulf Cooperation Council Countries (GCC) established AGFUND in 1980 in Riyadh, Saudi Arabia” (AGFUND, 2011). The GCC countries consist of United Arab Emirates, Bahrain, Qatar, Oman, Saudi Arabia, and Kuwait.

The main purpose of AFGUND is to promote development and growth at the global level. AFGUND has collaborated with the UN, regional, national, public, private organizations, and civil society groups.

Since the inception of AGFUND, it has contributed to “supporting and financing of 1,268 projects in 133 developing countries” (AGFUND, 2011). Until now, AGFUND has “completed 952 projects while 316 projects are under construction and implementation” (AGFUND, 2011).

Beneficiaries of AGFUND

AGFUND mainly targets poor and needy people in developing countries with low incomes. The focus is mainly on children and women.

Scope of AGFUND

The organization focuses on many initiatives. First, AGFUND believes that education is the key to the future. AGFUND considers education as a base for human capital development for both social and economic growth. This is a strategy to train, qualify, and prepare people for the challenges of globalization. This explains why AGFUND focuses on promoting quality education through financing both early childhood and higher education.

Second, AGFUND also aims to combat poverty. It focuses on controlling all poverty-related issues and lessening their intensity. This is because AGFUND believes that poverty is the major obstacle to human development.

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Third, AGFUND also concentrates on health issues. It considers modern health services as a human right. Health services guarantee a healthy society that can face future challenges.

Fourth, the organization believes that the slow growth and social failures of Arab nations originated from the absence of women in the mainstream areas of life. Arab nations deliberately bar women from their rights, economic contributions, and social growth.

Several projects specifically target women and families. AGFUND aims to create opportunities specifically adapted “for women in order to encourage them to take part in economic development” (AGFUND, 2011). One initiative is the Center for Arab Women Training and Research (CAWTAR).

Fifth, civil society development is also a fundamental area of AGFUND development initiatives. This is mainly to enhance social and economic developments in the region. The main works of civil societies in Arab states involve “collective actions based on civic and social support with the assistance of governments” (AGFUND, 2011). Such organizations go beyond political affiliations, states, and commercial interests and focus on shared interests, goals, and values.

Finally, AGFUND also focuses on the promotion of developmental thoughts. This strategy aims to “spread knowledge in developing societies to create new concepts of developments that are accessible to different social sectors” (AGFUND, 2011). Such thoughts are useful in overcoming poverty, segregation, economic and social marginalization of vulnerable groups.

AGFUND also believes in future investments in order to eradicate the widespread youth unemployment in the Arab regions because it reflects disorder in Arab social and economic structures. As a result, AGFUND has tried to address the source of such problems in emerging economies. Such problems relate to education, health, poverty, and childhood.

AGFUND’s main objective is to support disadvantaged groups without discrimination based on sex, creed, or political orientations. Consequently, AGFUND has funded and supported many projects in Africa, Asia, Eastern Europe, and Latin America. Such achievements have been possible through joint efforts of the UN, international and regional organizations, non-governmental organizations, and government and private institutions.

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AGFUND has also established many organizations in the Arab region to support its development agendas. Moreover, AGFUND has an annual prize in order to drive development by distributing a grand prize of US$ 500,000 in four areas. It rewards successful projects in human development by identifying innovative features. This process enhances sharing of ideas and best methodologies in order to eradicate poverty, economic and social challenges among vulnerable populations. AGFUND encourages participants to borrow the best ideas and replicate them in other regions for development.

Reporting the outcomes

AGFUND has Annual Reports for all its projects. For instance, in the year 2011, AGFUND reported all its activities that its development and growth strategy covers (AGFUND, 2011). The report pointed out challenges facing human development and achievements in projects.

The report also accounted for all support and financial aid from various sources. At the same time, it also received requests for support and financial aid from the “global, international, regional organizations, as well as other NGOs and government entities” (AGFUND, 2011). Such amounts of requests require accountability.

Accounting principles for non-profit organizations provide guidelines to aid and enhance sound financial reporting and financial stability. According to the Institute of Chartered Accountants of Pakistan (ICAP), accounting guidelines have significant roles in “strengthening financial development and in reducing the vulnerability of financial statements to various creative accounting practices adopted in different industries” (ICAP, n.d). We have to recognize that accounting principles differ in scope and coverage. However, there are specific financial reporting methodologies accepted by accounting bodies worldwide. In this context, it is crucial to note that Accounting and Financial Reporting by Not-for-Profit Organizations (NPOs) has emerged in order to enhance transparency, accountability and to widen, spread and support the implementation of best accounting principles and best practices for NPOs (Edwards and Hulme, 1995).

AGFUND has a Board of Directors that approve all projects, which have shown consistency with the financing guidelines of the organization. The Board propagates the global aims of the organization and its effort to provide financial support to all needy people without discrimination.

AGFUND has other development partners and affiliated institutions, which implement its agenda at the grassroots. These organizations provide developmental support for AGFUND. This suggests that AGFUND must receive reports from various organizations and account for resources deployed.

A review of AGFUND 2011 Annual Report shows large projects. The report shows all activities that AGFUND undertakes in various areas. For instance, we can see accountability in the field of poverty eradication.

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Table 1: Poverty Eradication

Name of the Project Beneficiary Country/
Organizing Entity Financing Amount
(in US Dollars)
Supporting the Intl. Conference on Micro-financing in Spain Countries of the World Micro-credit Summit
Workshop on the Role of Donor Entities in Meeting the
Basic Needs of the Poor through Micro-financing
Arab Countries OPEC Fund for International
Total 150,000.00

Source: AGFUND Annual Report 2011

The table above shows that AGFUND uses micro-financing strategy in order to combat poverty. It shows the amount spent in various regions. The report also shows the progress the initiative has achieved within the financial year.

AGFUND has a magnitude of funds channeled through its various micro-financing banks. Consequently, such institutions bring many responsibilities in terms of accountability, monitoring, and evaluation. This suggests that transparency in AGFUND is a significant part of issues the organization must face. ICAP notes that the “statutory and regulatory environment is vague in the countries in the Arab region” (ICAP, n.d). Therefore, it is necessary for AGFUND to have guiding principles in financial reporting and conducting other internal and external affairs.

Given the roles of AGFUND, it is necessary to develop regulation and accounting systems suitable for its roles in society. The AGFUND reporting system is of high quality, simple, and understandable. It reduces complex accounting reporting found in other sectors. Thus, it meets the needs of various stakeholders of the NPO.

Table 2: Projects Co-Financed in 2011

Sector Amount (in U.S. Dollar)
Health 390,000.00
Education 276,000.00
Institutional Building 1,643,202.00
Poverty Combating 150,000.00
Special Development 183,000.00

Source: AGFUND Annual Report 2011


AGFUND has massive contributions in the Arab region. The organization has contributed to “supporting and financing of 1,268 projects in 133 developing countries” (AGFUND, 2011). In addition, it has several ongoing projects in various countries. This implies that AGFUND needs massive financial resources from various sources in order to fulfill its initiatives.


AGFUND has played significant roles in its socioeconomic developments among the vulnerable members of society. The organization has recorded impressive performance since its inception.

It has transparent and accountable ways of financial accounting based on initiated projects. The organization has a Board of Directors in order to make sure that AGFUND has effective corporate governance and approval processes of projects and requests based on its funding criteria. However, AGFUND must improve its reporting systems because of its micro-finance branches and partners.


AGFUND. (2011). AGFUND: Annual Report 2011. Web.

Edwards, M., and Hulme, D. (1995). Non-governmental Organizations: Performance and Accountability Beyond the Magic Bullet. London: Earthscan Publications.

ICAP. (n.d). Guideline for Accounting and Financial Reporting by Non-Government/Non- Profit Organisations. Karachi: ICAP.

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