Chapter XVII: Accounts, Audit and Financial Management

Bye-law 139. Accounting Year

The accounting year of the Society shall commence on the 1st day of April and end on the 31st day of March of the succeeding year.

Bye-law 140. Books of Accounts and Financial Records

(a)(1) The Society shall maintain proper, complete and up-to-date books of accounts, registers, documents and financial records, in physical form, electronic form or both, in accordance with the provisions of the Act, the Rules and these Bye-laws.

(b)(2) Without prejudice to the Act and the Rules, the Society shall maintain, inter alia, the following records:—

(i)(a) Cash Book, Day Book and Bank Book;

(ii)(b) General Ledger and Member-wise Personal Ledger;

(iii)(c) Bills Register, Collection Register and Receipt Books;

(iv)(d) Register of Investments;

(v)(e) Register of Fixed Assets and Property Register;

(vi)(f) Stock and Dead Stock Register;

(vii)(g) Register of Deposits and Loans, where applicable;

(viii)(h) Register of Auditors and their Written Consent;

(ix)(i) Register of Audit Objections and Audit Rectification;

(x)(j) Such other books, registers, statements and records as may be prescribed under the Act, the Rules or by the Registrar.

(a)(3) Every financial transaction shall be supported by proper vouchers and documentary evidence and shall be recorded promptly and accurately.

(b)(4) Where accounting work is entrusted to an accountant, consultant or software service provider, the Committee shall remain responsible for the correctness, completeness, authenticity and preservation of all books of accounts and financial records.

Bye-law 141. Preparation of Financial Statements, Audit and Annual Returns

(a)(1) Within forty-five days from the close of the accounting year, the Committee shall prepare the Annual Financial Statements comprising:—

(i)(a) Receipts and Payments Account;

(ii)(b) Income and Expenditure Account or Profit and Loss Account, as applicable;

(iii)(c) Balance Sheet;

(iv)(d) Schedules and statements required under the Act and the Rules.

(b)(2) The Annual Financial Statements shall remain open for inspection by Members during office hours and shall be supplied to the Statutory Auditor within fifteen days from the date of their preparation.

(c)(3) Within sixty days from the close of the accounting year, the Society shall hand over the books of accounts, registers, financial statements and all relevant records to the Statutory Auditor appointed under Section 81 of the Act.

(d)(4) The Statutory Auditor shall complete the audit and submit the Audit Report to the Society and the Registrar within four months from the close of the Co-operative Year, i.e., on or before 31st July.

(e)(5) A copy of the Audited Financial Statements, Audit Report and Committee Report shall be displayed on the Notice Board and made available to the Members at least fourteen days before the Annual General Body Meeting.

(f)(6) The Annual General Body Meeting shall consider and adopt the Audited Financial Statements, Audit Report and Committee Report within six months from the close of the accounting year or within such extended period as may be permitted under the Act.

(g)(7) The Society shall file the Annual Returns, Audited Financial Statements, Audit Report and all other documents prescribed under the Act and the Rules with the Registrar within six months from the close of the accounting year, ordinarily on or before 30th September, or within such extended period as may be prescribed.

Bye-law 142. Appointment of Auditor

(a)The Statutory Auditor or Auditing Firm shall be appointed by the Annual General Body Meeting from the panel approved under the Act.

(b)Before appointment, the Society shall ensure that the proposed Auditor is eligible and has not exceeded the audit assignment limit prescribed under the Act.

(c)The appointment, written consent and remuneration of the Auditor shall be recorded and submitted in the manner prescribed under the Act and the Rules.

Bye-law 143. Audit Compliance and Rectification

(a)The Committee shall provide the Auditor with unrestricted access to all books of accounts, registers, documents, vouchers, agreements, electronic records and information required for conducting the audit.

(b)On receipt of the Audit Report, the Committee shall place the Audit Report before the next General Body Meeting.

(c)The Society shall rectify the defects and irregularities pointed out in the Audit Report and submit the Audit Rectification Report to the Registrar within three months from the date of the Audit Report, in accordance with Section 82 of the Act and Rule 73 of the Rules.

(d)The Committee shall continue to submit further Audit Rectification Reports whenever required until all audit objections are fully complied with to the satisfaction of the Registrar.

(e)Every Member of the Committee and every Officer responsible for maintaining the accounts shall be jointly and severally responsible for compliance with the provisions relating to accounts, audit, audit rectification and statutory filings under the Act, the Rules and these Bye-laws.

Bye-law 144. Write-off of Irrecoverable Dues

(a)The Society may write off any amount due from a Member or any other person, including maintenance charges, interest, recovery expenses, legal expenses or any other amount lawfully recoverable, only where such amount has become irrecoverable and its recovery is not reasonably practicable.

(b)No amount shall be written off unless—

(i)all reasonable steps for recovery under the Act, Rules and these Bye-laws have been taken;

(ii)the amount is certified as irrecoverable by the Statutory Auditor appointed under the Act;

(iii)the Managing Committee records detailed reasons for recommending such write-off; and

(iv)the General Body Meeting approves the proposal by passing an appropriate resolution.

(c)Where the Society is indebted to any financing institution or where approval of any authority is required under the Act, Rules or Government directions, such write-off shall be subject to obtaining the necessary approval.

(d)Where the Society has created a Bad Debt Fund or any similar reserve for meeting irrecoverable dues, the write-off may be adjusted against such fund in accordance with the Act, Rules, Government directions and applicable Accounting Standards.

(e)Every proposal for write-off shall contain—

(i)the name of the Member or person concerned;

(ii)the amount proposed to be written off;

(iii)the period to which the dues relate;

(iv)the recovery proceedings undertaken;

(v)reasons why recovery has become impracticable; and

(vi)the recommendation of the Managing Committee and the Statutory Auditor.

(f)A write-off shall be an accounting adjustment only and shall not, by itself, extinguish or waive the legal right of the Society to recover the amount if it subsequently becomes recoverable under law.

Bye-law 145. Register of Written-off Dues

(a)The Society shall maintain a Register of Written-off Dues containing—

(i)the name of the Member or person concerned;

(ii)amount written off;

(iii)date of General Body approval;

(iv)reasons for write-off;

(v)particulars of recovery proceedings taken; and

(vi)subsequent recoveries, if any.

(b)Where any amount written off is subsequently recovered, the same shall be credited to the accounts of the Society in accordance with applicable Accounting Standards and the provisions of the Act and Rules.