Please Help: AUDIT

Rambabu Senkarasetti

1. NGO’s can be defined as non-profit making organizations which raise funds from members, donors or contributors apart from receiving donation of time, energy and skills for achieving their social objectives. 2. Non-Governmental Organizations are generally incorporated as societies under the societies Registration, Act, 1860 or as a trust under the India Trust Act, 1882. NGO’s can also be incorporated as a company under section 25 of the companies Act, 1956. 3. While planning the audit, the auditor may concentrate on the following: a. Knowledge of the NGO’s work, its mission and vision, area of operations and environment in which it operates. b. Reviewing the legal form of the organization and its Memorandum of Association, Articles of Association, rules and Regulations. c. Reviewing the NGO’s organization chart, Financial and Administrative Manuals, Project and Program guidelines, Funding Agencies Requirements and Formats, budgetary policies, if any. d. Examination of minutes of the Board/Managing Committee/ Governing Body to ascertain the impact of any decisions on the financial records. e. Study of the accounting system, procedures, internal controls and internal checks existing for the NGO and verify their applicability. 4. Audit programme: a. Corpus Fund: The contributions/ grants received towards corpus are vouched with reference to the letters from the donor(s). The interest income is checked with investment Register and physical investments in hand. b. Reserves: Vouch transfers from projects/ programmes with donor’s letters and board resolutions of NGO. c. Ear-marked Funds (Specific funds): Check requirements of donor’s institutions, board resolutions of NGO, rules and regulations of the schemes of the ear-marked funds. d. Project/Agency Balances: Vouch disbursements and Expenditures as per agreements with donors for each of the balances. e. Loans: Vouch loans with loan agreements and receipts/repayments with counter-foil issued. f. Fixed Assets: Vouch all acquisitions/ sale or disposal of assets including depreciation and the authorisations for the same. For immovable property, check title deeds, etc. g. Investments: Check Investment Register and the investments physically ensuring that investments are in the name of the NGO. Verify further investments and dis-investments are made after approval by the appropriate authority. h. Cash in Hand: Physically verify the cash in hand and impress balance, at the close of the year and whether it tallies with the books of accounts. i. Bank Balance: Check the bank reconciliation statements and ascertain details for old outstanding and unadjusted amounts. j. Stock in Hand: Verify stock in hand and obtain certificate from the management for the quantities and valuation of the same. k. Programme and Project Expenses: Verify agreement with donor/contributor(s) supporting the particular programme or project to ascertain the conditions with respect to undertaking