CASH MANAGEMENT PRACTICES OF NON -GOVERNMENTAL ORGANISATIONS: A CASE STUDY OF NGOs IN THE SUNYANI MUNICIPALITY

ABSTRACT

Cash management and sustainability is crucial for the long-term survival and effectiveness of all types of NGOs. The challenge is how to achieve such levels of cash management and sustainability. The study sought to examine cash management practices among NGOs in the Sunyani Municipality.The objectives of the study were; to identify cash management practices of NGOs, examine how cash management practices affect the operations of the NGOs, find out the challenges facing NGOs in cash management and suggest measures to enhance cash management practices among the NGOs. Both primary and secondary sources of data were used to gather data for the study. Data was collected for analysis through purposive sampling technique by administering fifty-four (54) questionnaires to finance managers of fifty-four (54) NGOs in the municipality. From the study, it was found that the preparation of cash budget or cash flow forecasts was practised as cash management practice among the NGOs. The study also uncovered that proper cash management practices enabled the NGOs to decide how to generate and spend financial resources. The study further posited lack of cash budgeting, lack of accountability and transparency, and poor record keeping practices, as four critical challenges facing cash management of the NGOs. Some finance officers in the NGOs identified that the use of computers to manage cash was sometimes practised as cash management activity. Therefore, the management of the NGOs should adopt the continuous culture for proper accounting information system and invest in computerized systems (technologies) for their accounting processes.

TABLE OF CONTENTS

Page

DECLARATION   ii

ABSTRACT  iii

ACKNOWLEDGEMENTS  iv

DEDICATION   v

TABLE OF CONTENTS  vi

LIST OF TABLES  x

CHAPTER ONE: INTRODUCTION

Background of the Study  11

Statement of the Problem   16

Objectives of the Study  17

Significance of the Study  18

Delimitation.19

Limitations  19

Definitions of Terms  20

Organization of the study  21

CHAPTER TWO: LITERATURE REVIEW

Introduction  23

Theoretical Framework  23

Financial Theory to Cash Management23

Inventory Theory to Cash Management24

Production Theory to Cash Management26

Wealth Theory to Cash Management26

Cash Planning  27

Managing Cash Flows  27

Controlling the Cash Flows  28

Optimizing the Cash Level28

Investing Idle Cash  28

Cash Management Practices of Non-Governmental Organizations (NGOs)28

Challenges facing NGOs in Cash Management37

Capacity Limitation within Organizations  37

Accountability and Transparency  38

Founder Syndrome  38

Inadequate Strategic and Operational Plans  39

Lack of Cash Budgeting  39

Poor Cash Management Practices  40

Inadequate Networking Skills  42

Inadequate Awareness on Available Opportunities  42

Governance  43

Minimal Communication and Branding  43

Measures to Enhancing Cash Management Practices in NGOs  44

Defining Financial Governance and Components  44

Budget Preparation  45

Budget Execution and Internal Control47

Monitoring and Evaluation  48

Non-Governmental Organizations (NGOs) in Sunyani Municipality  50

Chapter Summary  51

CHAPTER THREE: RESEARCH METHODS

Introduction  52

Research Design  52

Research Approach  52

Study Area  53

Population  53

Sample and Sampling Procedures  54

Data Collection Instrument55

Data Collection Procedures  55

Data Processing and Analysis  56

Chapter Summary  56

CHAPTER FOUR: RESULTS AND DISCUSSION

Introduction  57

Background Characteristics of Respondents  58

Cash Management Practices of NGOs.61

Cash Management Practices Affecting Operations of NGOs.63

Challenges Facing the NGOs in Cash Management.65

Measures to Enhancing Cash Management Practices among the NGOs  66

Discussions  67

Cash Management Practices Among the NGOs  67

Cash Management Practices Affect the Operations of the NGOs  70

Challenges Faced in the Implementation of Cash Management Practices in   the NGOs  73

Measures Put in Place to Enhance Cash Management Practices of the NGOs  75

CHAPTER FIVE: SUMMARY, CONCLUSIONS AND RECOMMENDATIONS

Introduction  77

Summary of Findings  77

Conclusions  79

Recommendations  81

Suggestion for Further Research  83

REFERENCES  84

APPENDIX A