TPCSA • NPO financial management

Donor Reporting for South African NPOs

Connect your funding agreement, budget, accounting records and project evidence so you can explain how funding was used.

Good donor reporting for NPOs starts before a report is due. It begins with knowing what the funding agreement requires, recording transactions consistently and keeping evidence that connects expenditure to the funded work. A report should tell the same story as the accounting records and the programme team’s information.

This guide offers a practical working process. Each donor sets its own reporting conditions; use the signed agreement and any approved amendments to determine the format, deadlines and evidence your organisation needs.

Start with the funding agreement

Create a short reporting register for each award. Record the reporting period, currency, budget categories, submission date, person responsible and approval route. Include requirements for procurement, payroll evidence, assets, unspent balances and any separate audit or assurance work.

Distinguish a donor’s financial report from statutory financial statements. A donor may ask for a project-specific cash report or expenditure schedule that differs from the organisation’s accounting presentation. Both need a clear reconciliation to the underlying records.

Practical starting point: Keep the signed agreement, approved budget, amendments and reporting template together. A colleague taking over the project should be able to establish which version applies without searching through personal emails.

Track funding at project level

Use a consistent project or fund code in the accounting system. Capture the funding source and the relevant budget category alongside each transaction. Check that the coding supports the donor’s reporting categories before the first report is prepared.

Keep restricted funds identifiable. The bank balance alone does not explain how much is available for general operations: some cash may relate to another project, future activities or commitments already made. Where reports use different currencies, document the exchange-rate method required by the agreement and retain the calculation.

Handle shared costs consistently

Shared salaries, rent and other overheads need a documented allocation method. Record the basis, such as approved time records or a reasonable usage measure, and check it against the agreement. Do not charge the full cost to multiple donors. Changes to allocations should have a reason and an approval trail.

For example, if two projects share a staff member, the payroll records and approved time allocation should support the amount charged to each project. A spreadsheet percentage without evidence may be difficult to explain during a donor review.

Reconcile before drafting the report

Close the period: capture outstanding invoices, confirm cut-off and complete bank reconciliations.
Reconcile the project: compare the donor schedule with the ledger, payroll allocations and relevant balance-sheet accounts.
Check the budget: identify overspending, underspending and transfers between categories that may require donor approval.
Explain differences: distinguish timing differences, commitments and actual expenditure. Do not mix them without explaining the reporting basis.
Organise evidence: link the reported amounts to invoices, approvals, procurement records and proof of payment where applicable.

Use the audit readiness filing rules to make supporting documents easier to retrieve. For more structured financial records, explore TPCSA’s NPO accounting and donor reporting support.

Explain variances in plain language

A useful explanation states what changed, why it changed, its effect on delivery and the action being taken. “Project delayed” is less useful than explaining which activity moved, which costs are affected and whether the donor has approved a revised timetable.

Review before submission

Have finance and programme staff review the report together. Finance can check that the amounts reconcile; programme staff can confirm that the narrative reflects delivery. An authorised reviewer should confirm the final report and retain the submitted version, its evidence and the submission acknowledgement.

Maintain a small issues log for queries, corrections and donor approvals. If a report changes after submission, preserve both versions and explain the correction. This makes future reporting and any donor or fund audit easier to follow.

Keep donor reporting separate from other obligations

A donor report does not replace an organisation’s other reporting responsibilities. Registered NPOs should also consult the DSD guidance on NPO recordkeeping and reporting obligations. Where donation receipts are involved, consult SARS guidance on Section 18A and IT3(d) reporting; these are separate from a donor’s expenditure report.

Questions to resolve early

Which costs are eligible, and which need prior written approval?
How are shared costs, exchange differences and unspent funds treated?
Who reviews the numbers and who approves the final submission?
Does the award require a separate audit, and when should it be planned?