In implementation of Law 25/2018 “On Accounting and Financial Statements,” Article 22(3), the National Accounting Council has drafted and approved the Non-Profit Organization Performance Report Format and the Instructions for its completion.

National Council of Accountancy (KKK) has published on their official page on http://kkk.gov.al The Guide to the Performance Report of Nonprofit Organizations (NPOs) in Albania. Read the full guide below.

Summary and Purpose of the NGO Performance Report

 In implementation of Article 22(3) of Law No. 25/2018 “On Accounting and Financial Statements”, Nonprofit organizations in Albania are required to prepare and publish, together with their annual financial statements, a performance report. This report will be prepared by those NGOs whose financial statements show total assets or revenues exceeding the threshold. 30 million lek. The primary purpose of the performance report is to ensure that a nonprofit organization is publicly accountable to its stakeholders for presenting its performance. NGOs would have a much greater responsibility to a broader group of stakeholders than, for example, small and medium-sized enterprises. Consequently, their performance report is an important document that defines what the NGO was established for, what it has achieved, and what difference it has made with the funds at its disposal. The National Council of Accountancy, taking into account the information needs of the primary users of the NGO performance report, has prepared a guide for the structure and content of this report. NGOs vary from one another, but typically, the information users interested in the performance report are: funders, donors, financial supporters, service providers and service users, other beneficiaries, as well as the organization's members. The NGO's Performance Report should provide a fair, balanced, and understandable summary of its structure, goals, objectives, activities, financial performance, and financial position. Good reporting explains what the nonprofit organization was created for, how it is performing, and what is being achieved as a result of its work. The performance report should help potential users make decisions about the NGO, assess its progress toward its objectives, and understand its plans in relation to its goals. Good reporting provides a context within which the financial statements are interpreted. It also links the reported activities and achievements to the revenue sources used to finance them, as well as the expenses incurred in those activities.  The performance report and the financial statements taken together should provide an overview of what an NGO has done (products of its activity) or of what she has achieved (results of her), or what difference it has made (influence of her).

Responsibility for preparing, approving, and publishing the performance report.

  The responsibility for preparing the performance report lies with the NGO's management. While responsibility for approving the report lies with the Supervisory Board (or an equivalent body). The Board as a whole, or a designated member of the Board acting on its behalf, must approve the final text of the Performance Report by signing and dating it. The performance report is published in accordance with the requirements set forth in accounting law for the publication and filing of financial statements and other reports on their website.

Contents of the NGO performance report

 Performance Report that NGOs are required to prepare in support of Law No. 25/2018 “On Accounting and Financial Statements” may be presented divided into the following chapters:

• objectives and activities;
• achievements and performance;
• financial reporting;
• structure, direction, and oversight
• Other items of interest from NGOs to be presented

Objectives and activities. The performance report provides information intended to help the user understand how the NGO plans to achieve its objectives, the activities it undertakes, and what it has accomplished. As far as possible, the numerical information provided in the performance report on resources spent on specific activities should be consistent with the information provided in the financial statements. Nonprofit organizations must provide a summary of:

• Objectives, and
• The main activities undertaken in relation to those objectives.

Achievements and performance. The performance report should include a summary of the NGO's key achievements for the relevant reporting period. It must identify the changes that the OJF's activities have brought to the lives, conditions, and environment of its beneficiaries and, if practical, explain any broader benefits to society as a whole. NGOs are encouraged to develop and use social impact reporting (influence, Undoubtedly, it is the ultimate expression of a nonprofit organization's performance.), although it is acknowledged that there may be measurement issues associated with this approach in various situations. It is important that the reader of the performance report also understand the nature and extent of the role played by unpaid volunteers (if any). This contribution is not recognized in the financial statements. The Performance Report must include a description of the role played by unpaid volunteers and provide an indicator of the nature of their contribution to the work of the NGO. Reporting financial. The Performance Report will include a summary of the NGO's financial position at the end of the reporting period, the main sources of funding during the reporting period, and how these revenue sources have been used by the organization to fulfill its purpose(s). The financial assessment may be supplemented with key non-financial performance indicators that are important to the NGO. On the date of approval of the performance report and financial statements, it is of interest to information users for the NGO to state its ongoing operations. Funds (grants) the data from NGOs is an important aspect of the work of many of them. If it is not presented in the notes to the financial statements, the information must be provided in the performance report for thusers of the financial statements a clear understanding of the activities or projects being funded by the OJF and whether the financial assistance was given directly to individuals or provided to help another organization undertake those activities or projects. In the case of grants awarded to organizations, information about the funding recipients must be provided fully and clearly so that users can assess the types and range of organizations supported with funds by the NGO. Structure, direction and the supervision. The Performance Report will provide information related to the organization's structure and governance, including the oversight process. This section must include the following information for the OJF, its management team, and its Supervisory Board:

• the name of the non-profit organization;
• any other name that the NGO uses or has used in the previous reporting period;
• the NGO's registration number with the authority where it is registered as a non-profit organization and its NIPT;
• address of the main office;
• The organizational structure of the NGO and, where necessary, that of its affiliates.;
• The way OJF makes decisions, for example, which types of decisions are made by the leadership team and which are delegated to staff;

Also, the performance report may include information such as the following:

• the names of all those who were on the management team as of the date the performance report was prepared or who served as the NGO's leadership during the reporting period;
• the names of all those who were on the NGO's board on the date the performance report was approved or who served as its board during the period
• If it is relevant, provide the fact that the OJF is part of a broader network (for example, if it is affiliated with an umbrella group), and how, if at all, this affiliation affects the operational policies adopted by the OJF.;
• Relationships between the OJF and the parties. Relationships with any OJF or other organization with which the OJF collaborates in pursuing its social objectives are set forth in detail.;
• a description of the diversity policy applied to the management team and the Board of the NGO, focusing on aspects such as, for example, age, gender, background, education, In addition to describing the diversity policy, present the objectives of this policy and the results it has produced during the reporting period.

Source: National Accounting Council. Download here Guide for the published performance report