Complete Guide to NGO Audit & Compliance in Bangladesh

Introduction to NGO Compliance in Bangladesh

Non-Governmental Organizations (NGOs) operating in Bangladesh face a unique set of regulatory requirements. Whether you are a local NGO registered under the Societies Registration Act, a trust, or a foreign-funded organization registered with the NGO Affairs Bureau, maintaining proper financial records and undergoing regular audits is not just a legal requirement — it is essential for maintaining donor trust and organizational credibility.

At ARIF HASAN & ASSOCIATES, we have extensive experience working with NGOs across Bangladesh. This guide outlines the key compliance requirements every NGO must be aware of.

Registration and Regulatory Bodies

NGOs in Bangladesh may be regulated by multiple authorities depending on their nature:

NGO Affairs Bureau: For organizations receiving foreign grants
Department of Social Services (DSS): For welfare organizations
Registrar of Joint Stock Companies (RJSC): For companies limited by guarantee
Microcredit Regulatory Authority (MRA): For microfinance institutions

Each regulatory body has its own reporting and audit requirements, and your organization may be subject to oversight from more than one.

Annual Audit Requirements

Who Must Be Audited?

All NGOs in Bangladesh with annual income or expenditure exceeding BDT 25 lakh are legally required to have their accounts audited by a registered chartered accountant or cost and management accountant.

What the Audit Covers

A proper NGO audit includes:

Financial Statement Audit: Examination of income and expenditure accounts, balance sheet, and cash flow statements
Grant Utilization Review: Verification that donor funds have been used as per grant agreements
Internal Control Assessment: Evaluation of financial controls and risk management
Compliance Check: Review of compliance with local laws and donor requirements
Asset Verification: Physical verification of assets procured with project funds

Financial Reporting Standards

NGOs in Bangladesh should prepare their financial statements in accordance with:

Bangladesh Financial Reporting Standards (BFRS)
International Public Sector Accounting Standards (IPSAS) where applicable
Specific requirements of the NGO Affairs Bureau

Key Financial Documents Required

Audited financial statements (annual)
Bank reconciliation statements
Fixed asset register
Grant utilization reports
Petty cash records
Personnel cost statements

Foreign Funding Compliance

If your NGO receives funds from foreign sources, additional compliance requirements apply:

FNC (Foreign Non-Governmental Organization) Requirements

Prior approval from NGO Affairs Bureau for foreign grants
Quarterly fund utilization reports
Annual audited accounts submission within 90 days of fiscal year end
Mandatory bank account at designated government banks for foreign funds

Bangladesh Bank Requirements

All foreign remittances must be received through proper banking channels, and proper documentation must be maintained.

Common Compliance Issues We See

In our audit work with NGOs, we frequently encounter these challenges:

Poor bookkeeping: Inadequate daily recording of transactions
Mixed fund accounts: Commingling of different project funds
Inadequate documentation: Missing supporting documents for expenditures
Delayed reporting: Failure to submit reports within stipulated timeframes
Asset management: Inadequate tracking of assets across project locations

Best Practices for NGO Financial Management

Implement Strong Internal Controls

Segregation of duties for financial transactions
Dual authorization for payments above a threshold
Monthly bank reconciliations
Regular internal audits

Maintain Project-Wise Accounting

Each project should have its own cost center in your accounting system. This makes it easier to prepare project-specific financial reports for donors and reduces audit complications.

Invest in Accounting Software

Moving away from manual ledgers to accounting software like Tally, QuickBooks, or Xero significantly improves accuracy and makes audit preparation much easier.

How ARIF HASAN & ASSOCIATES Helps NGOs

Our dedicated NGO practice provides:

Annual audits compliant with all regulatory requirements
Project-specific audits as required by donors (UN agencies, USAID, EU, etc.)
Capacity building for finance staff
Compliance advisory to keep your organization on the right track
Representation before the NGO Affairs Bureau and other regulators

We understand that NGOs work with limited resources, and we offer competitive rates without compromising on quality.

Contact Our NGO Specialist Team

Reach out to us for a consultation on your NGO’s audit and compliance needs.

📞 Phone: +880 1538-031251
📧 Email: arifhasan198918@gmail.com
📍 Address: Section-12, Block-A, Road -1, Anik Plaza, Pallabi, Mirpur, Dhaka-1216

We work with NGOs of all sizes — from grassroots community organizations to large international NGOs.

This guide is intended for informational purposes. Specific regulatory requirements may vary based on your organization’s registration type and funding sources. Please consult with our team for advice tailored to your organization.