3. Financial Analysis Financial Analysis Program is highly dependent on external and donor funding for the majority of its components. Sales revenues are small and do little to offset the program’s operational costs. SMO’s cost-accounting system allows for financial analysis of the overall social marketing program, but may not allow for analysis on a per-product basis. Program is moderately dependent on external funding. Sales revenues cover some of overall expenditures (40 to 70 percent); external funding covers other elements. Support may or may not be directed to specific project areas, for example expanded distribution or generic BCC. (Product Facility and Program Consultancy) Program is only slightly dependent on external funding. revenues cover a high percentage of overall expenditures (more than 70 percent). External funding may be directed to discrete elements of the program. Comments/reason for rating The UHMG Product Facility business unit is commercially independent and self-sustaining (see Profitability Analysis, Appendix D), though many of its commercial tenders and 3PL accounts come from international donors. The Program Consultancy business unit is, by design, aimed at gaining contracts and awards from the donor community, as with many not-for-profit organizations. As long as donors dominate the health and social sector ‘markets’ in Uganda, as they do UHMG will seek their tenders, awards and contracts. 4. Institutional Analysis Institutional Analysis SMOs do not have adequate administrative and accounting systems to know their operating costs or cost-analysis capabilities are limited. Indicators: Administrative and accounting systems allow for monitoring and tracking of costs by product SMO has adequate governance, and internal-control systems. There is adequate efficiency, but with area for improvement. Indicators: Administrative and accounting systems allow for monitoring and tracking of costs by product Credit worthiness established SMO has excellent governance, management, cost-accounting, and systems. It has strong leadership and high level of efficiency. Indicators: Administrative and accounting systems allow for monitoring and tracking of costs by product
Number of expatriate staff in management positions Number of local staff in management positions Legal status to operate commercial activities Diversity of program portfolio Number of expatriate staff in management positions – No expatriate staff in management positions Number of local staff in management positions Legal status to operate commercial activities Diversity of program portfolio History of excellent credit – Lacking for UHMG No expatriate staff in management positions Number of local staff in management positions Entrepreneurial culture is evidence status to operate commercial activities Diversity of program portfolio Comments/reason for rating Systems, policies, and procedures are in place – existence of a Board of Directors; Board committees; documented policies, procedures, and operational guidelines; presence of a credit committee; risk management register is in place; no expatriate staff in management positions; legal status to operate commercial activities; and diversity of programme portfolio. Efficiency of UHMG both programs and PF in conducting operations. The program and services function has a diversity of program portfolio. 5. Market Analysis