Interview with Ludovic Donnadieu.
Chartered accountant and statutory auditor, founder of Donnadieu & Associés.

Alain Boinet
For the readers of Défis Humanitaires, thank you for introducing yourselves.

Ludovic Donnadieu
I’m Ludovic Donnadieu, chartered accountant, statutory auditor and graduate in development economics. My professional career took a decisive turn 15 years ago, following a two-year stay in Côte d’Ivoire as part of my official development assistance. This experience inspired me to set up Donnadieu & Associés, a firm dedicated exclusively to auditing and providing accounting and financial support to those involved in international solidarity.

Faced with the specific challenges encountered in the field, I saw the need to offer expertise tailored to this sector. Our firm aims to strengthen the financial security of NGOs, foundations and donors, by meeting their accountability requirements.

Operating internationally, Donnadieu & Associés strives to act as an independent bridge between funders and beneficiaries, while offering innovative solutions for optimal management of financial resources dedicated to international solidarity.

AB
At the World Humanitarian Summit in May 2016, as part of the “Grand Bargain”, one of the priorities was to provoke a “shock of simplification” of the procedures applying to humanitarian organizations. In your opinion, has this shock taken place? And what is the current situation?

LD
We are indeed far from having achieved the “simplification shock” objective envisaged at the World Humanitarian Summit in 2016. In fact, on the contrary, we are witnessing a trend towards increasing complexity of procedures for humanitarian organizations.

There are two main reasons for this increase in complexity. The first is of a global nature: we are evolving in an era where administration and justification are paramount, requiring increasingly detailed and often redundant processes. This reflects a growing quest for transparency and accountability, but at the cost of increasing red tape.

The second factor is the diversity of funders involved in humanitarian aid. Each funder, whether national or international, operates according to its own rules and criteria. This variety generates a heterogeneous framework in which each organization has to navigate between different requirements, often with little coherence between them. This not only makes processes more complex, but also less efficient.

Despite these challenges, it remains imperative to work towards harmonizing accountability rules. Ideally, a consensus between the main donors could lead to a more uniform and simplified framework for NGOs, which would respect the objectives of transparency while reducing the administrative burden. Such harmonization would be an essential step towards returning to the spirit of the “Grand Bargain” and truly simplifying procedures in the humanitarian sector.

With this in mind, it would be beneficial for the various players in the sector, in particular donors and NGOs, to get together to discuss concrete means of simplification, taking into account the specific challenges of each type of funder and each intervention context.

AB
You call for the financial stability and operational effectiveness of humanitarian organizations to be preserved through appropriate accountability, adding that this is not always the case. Could you explain this and give us some concrete examples of what is not appropriate but could be?

LD
There’s a saying, which I believe in, that the simplest things are the most difficult.

This applies perfectly to accountability in the humanitarian sector. Current rules lack flexibility and do not always take into account the specificities of each NGO, especially in terms of its operational context.

Take, for example, financial reporting requirements. For a large NGO with substantial resources, meeting these requirements may be manageable. However, for a small NGO operating in a crisis region, with limited access to specialized accounting skills, these same requirements can prove disproportionate and divert valuable resources from their core mission.

Accountability rules should therefore be adapted to take account of the variability of NGOs’ operational contexts. For example, modular standards could be developed that could be adjusted according to the size of the NGO, the nature of its programs, and the security conditions of the environment in which it operates. This would enable a fairer assessment of their performance and compliance.

In addition, it is imperative to increase investment in training for those working in the sector on the specificities of financial management in a humanitarian context. Specialized training programs could be set up to build local capacity, ensuring that NGOs have the skills they need to respond effectively to accountability requirements.

The creation of more adapted accounting and financial tools, specifically designed to meet the needs of NGOs according to their size and sector of activity, could also help to simplify the accountability process while strengthening the financial security of organizations.

Faced with complex rules and a lack of appropriate resources, NGOs often find themselves in a situation where accountability management impinges on their ability to achieve their operational objectives. It is therefore crucial to rethink these rules to better reconcile accountability requirements with operational imperatives, enabling NGOs to focus more on their humanitarian mission.

AB
Could you specify the difference in terms of reporting between humanitarian (emergency) actors and development actors, who operate in different contexts? What difference does this make in terms of accountability?

LD
Indeed, the nature of emergency humanitarian programs and development programs differs substantially, which is reflected in their reporting requirements and, by extension, in their accountability.

Emergency programs are often implemented in crisis contexts, where instability and insecurity predominate. These conditions directly affect the ability of organizations to report in a detailed and regular fashion. For example, in an area affected by conflict or natural disaster, access to resources such as the internet, electricity, or even qualified professionals may be sporadic. This reality can delay their reporting or limit its accuracy, impacting the way these organizations report to their donors and stakeholders.

In contrast, development programs generally operate in more stable environments. These programs can plan for the long term and often rely on more reliable infrastructures and more stable teams. As a result, their reporting can be more detailed and frequent, offering greater visibility on their activities and results.

The difference in terms of accountability between these two types of actor is therefore notable. For emergency programs, reporting requirements should be adapted to the reality on the ground. This may mean longer reporting deadlines, or simplified formats that do not require data as detailed as that expected in development contexts.

It seems crucial that donors and regulators recognize these differences and take them into account in their accountability assessment criteria. This implies establishing a common but flexible base of accountability standards, allowing for adaptations according to the specific conditions of each program. This granular approach would ensure that all organizations, regardless of the challenges they face, are judged fairly and according to standards adapted to their operating environment.

AB
In an article published in Défis Humanitaires, Olivier Routeau, Director of Operations at Première Urgence Internationale, cites two examples that illustrate the growing administrative burden of accountability without adding any operational value.

He took the example of a consortium of NGOs in Ukraine, for which the donor requested a document pack: 137 documents in addition to the project document itself, with contractual negotiations lasting 4 months. During this 4-month period, other Ukrainian or international humanitarian actors intervened on this program to meet pending needs. As a result, the project was jeopardized by overly long and complicated negotiations in an emergency situation.

Similarly, a project funded by a United Nations agency originally requested two interim monitoring reports per year. The agency finally requested monthly, formalized reporting for each of the 7 intervention sites. This increased the number of reports to be submitted from 2 to 84.

What is your reaction to these examples? How do you qualify this excess, which can hamper action and considerably increase administrative costs?

LD
These examples illustrate the challenges posed by escalating accountability requirements in the humanitarian sector. It’s clear that in these situations, the administrative burden not only hampers operational efficiency, but can also compromise the speed and effectiveness of emergency response.

On the one hand, the example of the consortium in Ukraine shows how protracted negotiations and excessive documentation requirements can delay crucial interventions. While players strive to meet these administrative demands, urgent needs remain unmet, which can lead to operational inefficiency and duplication of effort when other organizations step in to fill the gap left by extended delays.

On the other hand, the situation with the UN agency that has multiplied the number of required reports raises important questions about the proportionality of reporting requirements to the real impact on improving project management and transparency. Increasing the number of reports from 2 to 84 per year imposes an enormous administrative burden, absorbing resources that could otherwise be used in the field.

In response to these issues, it seems crucial to revisit the notion of accountability to ensure that it actually serves to reinforce efficiency and transparency, without becoming an obstacle to action. A balance can be struck by adopting more nuanced approaches to accountability, adapted to the specific context of each program. For example, simplified reporting or results-based rather than process-based evaluations could be considered to reduce the administrative burden while maintaining an adequate level of oversight.

Finally, it is imperative to build a relationship of trust between funders and funded organizations, based on a mutual understanding of the challenges and realities on the ground. This could involve closer collaboration in defining accountability requirements, ensuring that these standards are both fair and realistic.

AB
As you said earlier, you are calling for INGOs to be provided with the appropriate resources, particularly in terms of human resources and IT tools, to enable them to meet the ever-increasing demands of donors. Today, it’s up to NGOs to build and finance these capacities, and we know that the cost is high. How could your suggestion be put into practice? How, beyond the current operating mode, could we provide NGOs with the means to respond in terms of accountability?

LD
To enable international NGOs to respond effectively to the growing demands for accountability imposed by donors, it is imperative to consider two main strategic axes:

On the one hand, it is essential to systematically include budgets dedicated to training and support in the funding allocated to NGOs, particularly those located in the South. Currently, in the context of North-South partnerships, which are crucial for obtaining funding via the “Grand Bargain”, the emphasis is on the quantity rather than the quality of the aid provided. However, it is counterproductive to finance entities without adequately preparing them to manage these funds securely and efficiently. This often translates into additional costs for NGOs in the North, who find themselves responsible for the financial mismanagement of their partners in the South. It is therefore essential to invest in capacity-building for NGOs to ensure the best possible use of public funds and maximize the impact on beneficiary populations.

It is also essential to develop and make available accounting and financial tools specifically designed for the needs of NGOs. At present, most NGOs are obliged to use generic accounting software, supplemented manually by spreadsheets, resulting in excessive workloads and increased risks of error. To remedy this, it would be beneficial for donors to finance the creation or adaptation of accounting tools that meet the complex and varied reporting formats required. Such an investment would considerably reduce the time and costs associated with financial management, enabling NGOs to focus more on their core mission.

By implementing these two measures, we could not only improve the management of allocated funds, but also enhance the transparency and effectiveness of projects run by NGOs worldwide. This requires an active commitment from donors to rethink the current funding model and integrate more structured and targeted support.

AB
In another article published in Défis Humanitaires by François Dupaquier of U-Saved, a Ukrainian NGO, he explains that IOs/NGOs transfer security risks, especially administrative risks, onto national humanitarian actors, thus hampering their ability to rescue populations. The 0-risk policy of IOs/NGOs leads to a systematic search for ineligible expenses with the local partner and, in the name of 0-risk in war zones, we have entered a cascade system in which everyone protects themselves against the risk of aid paralysis.

LD
In the context of the “Grand Bargain”, we are seeing a gradual transfer of responsibility for risk management from donors to international NGOs, and then to local organizations. This process imposes rigorous compliance requirements on local partners, without necessarily providing them with adequate resources to meet them. This approach, while aimed at ensuring transparent and ethical management of funds, can unfortunately place local NGOs in a situation of financial vulnerability, particularly when they find themselves penalized during financial audits for non-compliant spending.

It is crucial that donors take an active role in preparing NGOs for these challenges. This means checking that organizations are equipped, from the outset of funding, to meet the compliance standards imposed. Where resources are insufficient, collaboration to provide the necessary support is essential.

Currently, the dominant approach to accountability tends to focus on post-project financial audits, a method that can prove counter-productive. Instead, we advocate a proactive strategy, which involves upstream support for NGOs to prevent compliance problems before they arise.

In collaboration with the Crisis and Support Center (CDCS) and the French Development Agency (AFD), our firm has developed risk assessments for NGOs seeking funding. These assessments enable us to analyze their operational capacities and ensure that they can meet their commitments securely. We have also set up support programs to strengthen risk management and prepare NGOs for future audits.

To guarantee the effectiveness and sustainability of aid, it is essential that donors and NGOs establish a balanced and robust partnership.

AB
There are a wide variety of international humanitarian aid donors with different rules. The same applies to audit firms. You suggest harmonizing rules between donors to promote accountability and aid in the field. Is this really possible, given the diversity of legislation, accounting rules and legal frameworks specific to each country and even each international organization? Clearly, it would be desirable, but is it possible?

LD
In the field of humanitarian aid, two aspects of accountability must be systematically taken into account: respect for the legal framework of the countries of intervention and transparent management of public funds.

Indeed, every NGO, whatever its area of operation, must comply with local laws and regulations. As far as financial accountability is concerned, requirements can vary significantly from one donor to another, often posing a challenge in terms of managing and justifying expenditure.

Faced with this diversity of requirements, NGOs tend to adopt the strictest standards to avoid non-compliance. This often leads to cumbersome internal processes and a disproportionate allocation of resources to administration, to the detriment of humanitarian action itself.

The harmonization of accountability rules between donors is therefore a necessity to simplify the work of NGOs and guarantee the efficient use of funds. Clear, relevant and realistic rules would help NGOs to better understand and apply accountability procedures, while enhancing aid transparency and effectiveness.

In short, although the harmonization of accountability rules may seem complex, given the diversity of legislative and normative frameworks, it is an essential step. It should make it possible to reduce unjustified disparities, while allowing for adjustments adapted to the operational contexts of projects. This approach would strengthen aid effectiveness and build trust between donors and NGOs.

AB
You suggest that France, together with the CDCS, take an initiative to harmonize accountability and propose it to donors in EU member countries and the European Commission. In this context, can you tell us more about the CDCS’s risk mapping and what is being done in terms of training to support INGOs?

LD
For several years now, our firm has been working with the Crisis and Support Center (CDCS) of the French Ministry of Europe and Foreign Affairs, to examine the internal structure of their partner NGOs. We analyze some twenty key aspects such as accounting, finance, legality, ethics, operations and security.

This comprehensive assessment enables us to map the risks to which NGOs are exposed, by examining their internal policies, procedures and tools. We identify organizations’ strengths and weaknesses, and offer customized recommendations.

This preventive and constructive approach enables NGOs to prepare themselves to respond effectively to their funder’s accountability requirements.

AB
You say that an efficiency audit is more relevant and constructive than a financial audit stricto sensu. You also call for reconciling the objectives of accountability and project efficiency. So, what changes would you propose to achieve this? And who could bring this initiative to the attention of donors?

LD
It’s essential to recognize the relevance of efficiency audits in the solidarity sector. Traditionally, operational evaluators and financial auditors work in isolation, which can lead to contradictory conclusions concerning the same expenditure. For example, in the case of a construction project, an auditor might judge an item of expenditure to be eligible on the basis of the documents provided, even though the evaluator points out significant defects in the work carried out. Conversely, an expense could be rejected in its entirety by the auditor for documentary irregularities, even though the appraiser confirms that the work has been properly completed.

These examples illustrate the risk of disconnecting financial aspects from operational objectives. The eligibility of expenditure should not be assessed solely on the basis of its documentation, but also on the basis of the actual achievement of operational objectives. Similarly, it would be inappropriate to declare an expense as wholly ineligible solely on the grounds of administrative deficiencies, if the operational objectives have been achieved. This approach may unfairly penalize organizations that are effectively fulfilling their mission.

In the context of a financial audit, accountability is often strictly documentary, and can neglect the operational aspect and reality on the ground. However, if the budget has been respected and the operational objectives of the funding contract achieved, these results should be taken into account before declaring expenditure ineligible. This would encourage a more judicious and transparent use of public funds.

To move in this direction, it is crucial that efficiency audits are systematically integrated into our practices. These audits link financial accountability to operational performance, thus restoring the true function of accountability, which is to ensure that the public’s money is used for its intended purpose.

AB
Who do you see taking this issue of coordinated efficiency and financial audits to the funders? How do you go about it? At what level?

LD
The development of efficiency audits requires a strong commitment from political decision-makers to reformulate NGO accountability standards. This initiative could be launched in France before being extended to the European level. To this end, I propose the creation of a consultation group, made up of representatives of donors, NGOs, auditors and evaluators.

The aim would be to develop a common audit framework that enhances transparency and efficiency in the use of funds. By setting up regular, structured exchanges within this group, we could not only standardize audit procedures, but also foster a better understanding of mutual expectations, thereby increasing the effectiveness of funding and trust between stakeholders.

AB
How would you like to conclude this interview?

LD
Our discussions highlight the crucial importance of strengthened collaboration between the players involved in the accountability process. It is essential to pool our expertise and mobilize strong political will to rapidly lighten the administrative burden of NGOs, whose role is increasingly vital in the current geopolitical context. Given the scarcity of resources and the scale of needs, we must ensure that every euro spent is used as efficiently as possible.

 

Ludovic Donnadieu
Chartered Accountant and Statutory Auditor

A chartered accountant with a degree in development economics, Ludovic Donnadieu founded Donnadieu & Associés in 2008, following experience with the Agence Française de Développement and the French Ministry of Foreign Affairs in Africa. The aim of his firm is to develop specific, high value-added expertise in the international solidarity sector. Highly aware of the immense challenges involved in protecting and supporting young people, in 2023 he created the Fondation Donnadieu under the aegis of the Fondation pour l’Enfance, in order to lead innovative actions in the cultural field.