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transcript
NATIONAL SEMINAR ON CO-OPERATIVE AND
NPO SECTORS
Documentation and Audit Reporting in NPO Sectors
Patna 23rd July 2012
CA. Tarun Kr. Gupta
Contents
Setting the context Documentation Audit Reporting in NPOs Opportunities for members Discussion
CA. Tarun Kr. Gupta
Setting the context......
CA. Tarun Kr. Gupta
Size of NPOs There were nearly 33 lakh NGOs in India in 2009
Number of internationally operating NGOs is estimated at 40,000
53% are rural based and 47% are urban based
Nearly half of them are unregistered and mostly in rural areas
25% have religious identity, 21% are community/ social service based and 20% work on education
Those who are registered are majorly registered under Societies Registration Acts
Nearly 75% NPOs have only one or less paid staff and only 10% have more than 10
CA. Tarun Kr. Gupta
Revenue and Donors No credible source of total funds received by
NGOs from local sources Total number of organisations registered as on
31.12.2011 was 43,033 Total receipts of NGOs for 2009-10 from Foreign
Contribution was 10,338 crores and that till Dec 2011 was 7,810 crores.
More than 10 crore households donate for charitable causes
About 65% of all donors live in rural India
CA. Tarun Kr. Gupta
Other details More than 20, 000 active organizations, half a
million professionals Uneven presence in the country, though can
identify 5 good organisations per district More than 100 organisations/professionals
from such organizations received international awards & recognitions
More than 200 such organizations and their staff have been involved in supporting development projects in other developing countries
CA. Tarun Kr. Gupta
Documentation......
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When were you born?
SCHOOL SCHOOL
BIRTH CERTIFICATE
BIRTH CERTIFICATE
Who will get admission?CA. Tarun Kr. Gupta
Are you a couple?
MARRIAGE CERTIFICATE
MARRIAGE CERTIFICATE
Who will be left alone?CA. Tarun Kr. Gupta
BALANCE SHEET
What documents do you have?
BANKBANK
BALANCE SHEET
Who will get bank loan?CA. Tarun Kr. Gupta
DEATH CERTIFICATE
When did he die?
DEATH CERTIFICATE
How else can you prove?CA. Tarun Kr. Gupta
So what do we understand? Documentation is very very important It helps us in basic necessities
(admission in school....) It helps us in getting out of troubles
(couple in a park....) It helps us in our economic activities
(getting bank loan....) It helps us even after death
(succession....)
CA. Tarun Kr. Gupta
What do we document?
Basic events – Registration, bank account opening, Income Tax registration, accounts, ....
Activities – Workshops, meetings, trainings, ....
Processes – Governance, Accounting, Basic implementation process, How to execute activities e.g. Trainings, ....
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How do we document...... Reports Minutes Records, Registers, Statements Dedicated software e.g. Tally for
Accounting records Videography Photography Guidelines and Manuals ........
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What are the common features of documentation?
Systematic Preservation Easy storage Easily accessible Uploaded on internet (reports, etc.) Admissible in a court of law Relied upon by enforcement agencies
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Never do this Use of photos/ banners of one event to show
for another event Showing other organisations events/
programmes as yours New records shown to be maintained since
long Back dating of documents Forged documents/ signatures ........
It gets caught very easily
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Systems and Procedures Manual
Level of compliance
Siz
e of
NG
O
Low levels of compliance
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Systems and Procedures Manual
Existing form of Manual Available in Trust/ Society deed Coverage includes
Appointment of the BoardNumber of meetingsAuthority for banking operation, etc.
But what needs to be covered is much more than what really exists…….
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Contents of the Manual
Governance Overall management of the organisation Constitution of the Board Appointment, Retirement, Removal of the
members Qualifications of the members Powers, rights, duties and responsibilities of
the Board Changing the Trust/ Society deed Board/ General body meetings
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Contents of the Manual
Programme Implementation Organisation structure Roles and responsibilities of staff Reporting systems Human Resource guidelines Technical and Financial Monitoring Programme Evaluation
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Contents of the Manual
Internal Control Systems and Risk Management Internal control procedures Internal Audit Internal checks Procedures of cheque and voucher
sanction Compliance with law
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Contents of the Manual
Financial Management Fund Management and System of budgeting Basis of Accounting and major accounting
principles Cash management and Banking operations Management Information System Fixed Assets Register and its purchase and sale Adherence to various guidelines of different
funding agencies Inventory management Local contribution and Investments
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KYC Norms for Members Name of the Organization Deed of Registration List of Governing Body Members/Board of
Directors PAN details of organization and Key Person Details of main funding agencies and on-going
projects List of Bank Accounts Registration / Recognition with various
Government Departments Contingent Liabilities Previous Auditor
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Audit Reporting in NPOs......
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Realities of audit….. All funding agencies require audited statements All programmes requires audited statements All Acts require audit – Societies Act, Trust Act,
Income Tax, FCRA…. Government programmes are prone to external
auditors Many types of audits – Statutory, Social, Tax,
Stock, Internal, Pre-audit……
It is said excess of everything is bad...
CA. Tarun Kr. Gupta
Realities of audit…..
So what is the result…….
Audit is only done for compliance, no improvement in systems
Multiplicity of audits increase cost of compliance for the organisation
Quality of audit requires improvement …..
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Internal audit
Contribution in kind and records thereof Maintenance of stock registers Details of programme expenditure and
matching with technical records Livelihood and training activities Self Help Groups and its activities
ICAIs Technical Guide on Internal Audit of NPOs
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Opportunities for Members......
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Opportunities for Members
Concept Vision Mission ObjectiveNGO
Name Formation Registration Legalities
Proposal Funders Appraisals FundsProjects
Guidance Monitoring Evaluation LearningsExecution
Cap Building Trainings Manuals On lineCapacity
Audits Compliances Returns GovernanceRegulation
Government Profession SectorContribution
Expertise Value Guidance DirectionCA
Legal frame
Masses
etc.
etc.
etc.
etc.
etc.
etc.
etc.
etc.
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Discussion......
CA. Tarun Kr. Gupta
Thank You
CA. Tarun Kr. GuptaTarun K Gupta & Co.Chartered AccountantsP-15, Bentinck StreetKolkata 700001Tel: (033) 22361385/ 7136Mobile: +91 98301 24482E mail: tarunkrgupta@yahoo.com