Client Name

Alkhidmat Welfare Society Karachi

Faculty Advisor

Dr. Mohsin Ali Patel

SBS Thought Leadership Areas

Islamic Business and Finance

SBS Thought Leadership Area Justification

Our ELP involved designing an exhaustive internal audit and financial control ecosystem for Alkhidmat Foundation's Head Office and Hospital networks. The project aligns with Islamic Business and Finance because, alongside comprehensive commercial financial audits, it integrates specific compliance and governance modules to monitor the collection, allocation, and utilization of Zakat and charity funds. This ensures that the organization's core financial operations maintain strict Shariah alignment, transparency, and public accountability.

Aligned SDGs

GOAL 16: Peace, Justice and Strong Institutions

Aligned SDGs Justification

Our ELP focuses on building a rigorous internal audit system spanning financial tracking, operational controls, and Zakat compliance clauses for Alkhidmat Foundation. This directly aligns with SDG 16 by strengthening institutional governance, enhancing financial transparency, and establishing strong accountability mechanisms. By ensuring that public and charitable funds are monitored with high integrity, the project directly contributes to building an effective, transparent, and accountable non-profit institution.

NDA

No

Abstract

Al-Khidmat Welfare Society is one of the biggest and most respected non-governmental organisations in Pakistan with a network of hospitals, welfare programmes, community services and humanitarian programs in place, covering the entire city of Karachi and twelve Administrative District committees of Karachi. The organisation operates a hospital network for thousands of poor people every month, while being involved in a wide variety of flagship programmes like Bano Qabil (PKR 115 million), Orphan Care (PKR 95 million), Water Filtration Plants (PKR 85.8 million), Aghosh Children Home (PKR 68 million), etc., making one of the most complex operational and financial situations of any charitable organisation in Pakistan. However, in spite of this size, Al-Khidmat had no technology-enabled and comprehensive internal audit management system in place that would allow to monitor compliance, be able to identify financial risk, and track corrective actions and the necessary reporting in all departments from a single place at once.

This is why the trio of students undertook this Experiential Learning Project project. The main goal of this ELP was to conceptualize and implement a functional IT solution for Al-Khidmat's Head Office operations and eight hospitals in the city of Karachi to manage an Internal Audit system from the ground up. The system had been developed in two combined Microsoft Excel workbooks, one for each domain of the clinical, financial and operating activities of the hospital and another for Head Office level domains of finance, human resources, procurement, fixed assets, IT systems, monitoring of programs, regulatory compliance etc.

A methodology which involved a mix of document analysis and structured stakeholder consultation, risk-based audit design and systems development was used. The team analysed Al-Khidmat's Standard Practice Manual (SPM), organizational charts, Oracle ERP system architecture, Time Trax attendance system and various sector related audit frameworks based on international healthcare, nonprofit and public accountability standards.

The thirteen hospital network audited areas in high risk and eleven audited areas in high risk at the Head Office level were identified as major findings in the audit system design process. The key findings are that there were no systematic verifications on the Zakat fund and Shariah compliance checks and controls; there were fewer controls to ensure drugs' expiry date and first in, first out (FIFO) compliance; the Head Office doesn't have adequate documentation of pre-operations and WHO Surgical Safety Checklists; fewer dual-control protocols in the charity boxes vulnerability; issues of splitting of procurement to reduce to three quotations; Oracle ERP shared login credentials; and limited district-level financial verification for 12 community offices out of a total workforce of 703, with annual disbursements of PKR 2.2million.

The systems delivered are designed to offer real-time risk dashboards, the compliance matrix is mapped on laws applicable such as Societies Act XXI of 1860, Income Tax Ordinance 2001 and all major law chapters of SPM, and twelve compliance modules are configured to colour code and track compliance, along with the corrective action plan for each risk item which includes assignment of ownership and deadline tracking.

The main recommendation is that Al-Khidmat transfer the audit management system to build a new Internal Audit process which will be formalised and have experienced staff directly reporting to the Chief Executive and CFO. The present reactive financial control approach should be replaced by a proactive approach, based on a financial control schedule and ranked by risk. This project is closely related to SDG 16 (Peace, Justice and Strong institutions) and SDG 3 (Good health and Well-being) and falls under the Entrepreneurship and Innovation thought leadership area because it focuses on today’s challenges in institutional systems design in the Social Enterprise sector.

Document Type

Restricted Access

Document Name for Citation

Experiential Learning Project

Download

Share

COinS