CHAPTER IIIAUDIT AND ACCOUNTS
16. Books of accounts-
Every multi-State cooperative society shall keep books of account with respect to :-
(a) all sums of money received and expended and the matters in respect of which the receipt and expenditure take place;
(b) all sales and purchase of goods;
(c) the assets and liabilities;
(d) in the case of a multi-State cooperative society engaged in production, processing and manufacturing, particulars relating to utilisation of materials or labour or other items of costs as may be specified by the Central Registrar.
17. Subject matter of audit-
(1) The audit of a multi-State cooperative society under sub-section(1) of section 67 shall include, in addition to the matters specified in sub-section(2) of that section the following particulars:
(a) Whether the auditor has obtained all the information and explanations which, to the best of his knowledge and belief are necessary for the purposes of his audit;
(b) whether in his opinion proper books of accounts as specified in these rules and bye-laws have been kept by the multi-State cooperative society so far as it appears from the examination of those books and proper returns adequate for the purposes of his audit have been received from the branches not visited by him;
(c) Whether the balance-sheet and profit & loss account exhibit a true & fair view of the state of affairs of the multi-State Cooperative society according to best of his information and explanation given to him and as shown by the books of the multi-State cooperative society; and
(d) Whether there has been any material impropriety or irregularity in the expenditure or in the realisation of money due to the multi-State cooperative society.
(2) Where in any of the matters referred to in sub-rule (1) the answer is in the negative or in the affirmative with any remark, the auditor shall give reasons for such answer with facts and figures in support of such remarks.
(3) The audit report shall also contain schedules with particulars of:-
(a) all transactions which appear to be contrary to the provisions of the Act, the rules or the bye-laws of the multi-State cooperative society;
(b) Any money belonging to the multi-State cooperative society which appears to the auditor to be bad or doubtful of recovery;
(c) The loans given by the multi-State cooperative society to the members of the board; and
(d) any other matter as may be specified by the Central Registrar in this regard.
(4) The auditor shall make his report to the multi-State cooperative society and also send a copy of that report direct to the Central Registrar.
The Central Registrar may for reasons to be recorded in writing, direct that if any portion of the audit report which appears to him of objectionable nature or not justified, be expunged and the portion so expunged shall not form part of the audit report.
(5) The audit report given by the auditors shall be considered by the board of a multi-State cooperative society and placed before the general body with their comments.
(6) The defects pointed out by the auditors in the working of the multi-State Cooperative society shall be specifically considered by the board and a compliance report explaining the measures taken to rectify the defects
be submitted to the Central Registrar within three months of the receipt of the audit report.
*Rule 18
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*There is no rule under Serial No.18.
CHAPTER VIIAUDIT, INQUIRY, INSPECTION AND SURCHARGE
67. Audit -
(1) The Central Registrar shall audit, or cause to be audited by a person authorised by him by general or special order in writing in this behalf, the accounts of every multi-State cooperative society at least once in each year.
(2) The audit under sub-section (1) shall include an examination of overdue debts, if any, the verification of the cash balance and securities, and a valuation of the assets and liabilities of the multi-State cooperative society.
(3) The person auditing the accounts of a multi-State cooperative society shall have free access to the books, accounts, papers, vouchers, stock and other property of such society and shall be allowed to verify its cash balance and securities.
(4) The directors, managers, administrators and other officers of the multi-State cooperative society shall furnish to the person auditing the accounts of the society all such information as to its transactions and working as such person may require.
(5) The Central Registrar or the person authorised by him under sub-section (1) to audit the accounts of a multi-State cooperative society shall have power, where necessary -
(a) to summon at the time of the audit any officer, agent, servant or member of the society, past or present, who, he has reason to believe can give valuable information in regard to transactions of the society or the management of its affairs; and
(b) to require the production of any book or document relating to the affairs or, any cash or securities belonging to, the society by any officer, agent, servant, or member of the society in possession of such books, documents, cash or securities and in the event of serious irregularities discovered during audit, to take them into custody.
(6) If at the time of audit the accounts of a multi-State cooperative society are not complete, the Central Registrar or the person authorised by him under sub-section (1) to audit may cause the accounts to be written up at the expense of the society.
(7) Audit fee, if any, due from any multi-State cooperative society shall be determined by the Central Registrar and shall be recoverable in the same manner as is provided in section 89.
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Uttaranchal state:
Audit 44. (1) A co-operative shall get its accounts audited by a chartered
accountant within the meaning of the Chartered Accountants Act.
1949:
provided that where a co-operative's business turnover is less than
Rs. ten lakhs, it may appoint as auditor, any person is, from within
its membership or outside, with such qualifications as are specified
in the articles of association
(Explanation: For the purpose of this section, business turnover
shall mean the value of sales, services provided and/or loans
recovered.)
(2) A co-operative at its Annual General Meeting, shall appoint an
auditor. This appointment will be valid only until the close of the
next succeeding Annual General Meeting.
(3) The remuneration of an auditor may be fixed by the general body
or, if not so fixed, by the Arbitral Tribunal.
(4) An auditor ceases to hold office when the auditor
(a) resigns;
(b) is removed from office under sub-section
(c) completes his/her term of office.
(5) The resignation of an auditor becomes effective at the time a
written resignation is received by the co-operative, or at the time
specified in the resignation whichever is later.
(6) The general body may by a special resolution, remove an auditor
from office.
(7) An auditor, who
(a) resigns; or
(b) receives a notice or otherwise learns of a Board's meeting called
for the purpose of removing him/her from office;
is entitled to submit to the Board a written statement giving the
reasons for the auditor's resignation or the comments on the
proposed removal, as the case may be.
(8) A vacancy created by the resignation of an auditor shall be filled up
by the arbitral tribunal.
(9) A vacancy created by the removal of an auditor, too, shall be filled
up by the arbitral tribunal.
(10) An auditor appointed to till a vacancy holds office for the unexpired
term of his/her predecessor.
(11) The auditor shall be given notice of every general meeting and at
the expense of the co-operative, will be entitled to attend and be
heard thereat on matters relating to the auditor's duties as auditor
and their exercise.
(12) It shall be the duty of the Board to ensure that annual financial
statements are prepared and presented for audit within forty-five
days of closure of the co-operative's financial year.
(13) Upon the reasonable demand of the auditor of a co-operative, the
chief executive shall arrange to
(a) provide such access to records, documents, books, accounts and
vouchers of the co-operative; and
(b) furnish such information and explanations,
as are, in the opinion of the auditor, necessary to enable him/her to
make the examination and report, and as the chief executive or a
present or former Director, members, managers, or employees are
reasonably able to furnish.
(14) It shall be the duty of the auditor to ensure that audited annual
financial statements and the auditor's accompanying report are
furnished to the co-operative within sixty days of the submission of
annual financial statements by the Board.
(15) The auditor's report to the members of the co-operative shall:
(a) state whether the auditor has obtained all the information and
explanations which to the best of the auditor's knowledge and belief
were necessary for the purpose of the auditor's audit;
(b) state whether the co-operative's balance sheet and income and
expenditure account dealt with by the report are in agreement with
the books of accounts;
(c) indicate the basis on which each asset and liability was valued,
and make specific mention of any change in the manner in which
such valuation was done in the year under examination and its
effect on surplus/deficit;
(d) indicate the amount of surplus earned/deficit incurred from
provision of services to non-members as distinct from
surplus/deficit accruing because of members or in normal course of
business;
(e) indicate every deviation in actual expenses and income from the
estimated expenses and income in the approved budget;
(f) specify the gross remuneration and/or honorarium and/or
allowances paid and/or value of benefits provided, if any, to the
chief executive, any of the office bearers, or Directors, in the
financial year under audit;
(g) state whether or not any of the office bearers or Directors had
become, at any time during the year under review, ineligible under
this Act to continue in office as an office bearer or Director; and
(h) state whether the decisions on disposal of surplus or assessment
of deficit, of the general body, at its previous annual general
meeting were implemented correctly and completely or not.
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