By Ramesh S. Prabhu
Q-1. Can a society appoint its own auditor?
As per section 75 (2A) of the Maharashtra Co-operative Societies Act, it is the duty of every society to appoint an auditor or auditing firm from a panel approved by the State Government in this behalf in its annual general body meeting having such minimum qualifications and experience as laid down in section 81, for the current financial year and shall also file in the form of return to the Registrar, the name of the auditor appointed and his written consent for auditing the accounts of the society within a period of thirty days from the date of the annual general body meeting provided that the same auditor shall not be appointed for more than three consecutive years by the annual general body meeting of the same society. Thus the society can appoint its own auditor.
However, as per the provision to section 81 (1)(a) of the MCS Act, 1960, if the Registrar is satisfied that the society has failed to intimate and file the return as provided by sub-section (2A) of section 75 and sub-section (1B) of section 79, by order, for the reasons to be recorded in writing, he may cause its accounts to be audited, by an auditor from the panel of the auditors approved by the State Government or an authority authorised by it in this behalf. Thus, if the society fails to appoint the auditor, the registrar may appoint the auditor to the audit of the society.
Q-2.What is the scope of audit in case of a Co-operative Housing Society?
- Gayatri T , Vashi
As per section 81(2) of the MCS Act, 1960, following are the scope of the auditors:
The audit under sub-section (1) shall "be carried out as per Auditing Standards notified by the State Government from time to time and shall also"; include examination or verification of the following items, namely
Over dues of debts, if any;
Cash balance and securities and a valuation of the assets and liabilities of the society
Whether loan and advances and debts made by the society on the basis of security have been properly secured and the terms on which such loans and advances are made or debts are incurred are not pre-judicial to the interest of the society and its members.
Whether transactions of the society which are presented merely by book entries are not prejudicial to the interest of the society.
Whether loans and advances made by the society have been shown as deposits;
Whether personal expenses have been charged to revenue account
Whether the society has incurred any expenditure in furtherance of its objects;
Whether the society has properly utilised the financial assistance granted by government or Government undertakings or financial institutions, for the purpose for which such assistance was granted;
Whether the society is properly carrying out its objects and obligations towards members
How much interest can be charged on over dues to a member?
- Gaurav Ghorpade, Sion
A Member shall be required to pay simple interest at 21 percent per annum, or such lower rate as is fixed by the General Body of the Society on the dues to the Society, from the date the amount was delayed till its payment remains unpaid by the Member within the period as prescribed under Bye-law No. 69. That means, if the payment is not made within the time permitted or before the due date, the interest at the rate of 21% p.a simple interest or at the lesser rate as may be decided by the general body meeting.
(Ramesh S. Prabhu is Chairman, Maharashtra Societies Welfare Association)