Separate sets of books are to be maintained in the double entry system.
The financial year shall be from every April to March For foreign contribution received in-kind accounts are to be maintained in FCRA Regarding foreign securities accounts shall be maintained in FCRA. The only designated bank account can be maintained. Any change thereof has to be intimated to the Central Government. No local funds shall be operated through this bank account.
A report on the NGO Organization’s activities.
NGO Organization’s activities
A copy of the audited accounts for the last 3 years. In addition to the above, the following details shall be furnished The name of the religion if it is a religious organization The names and addresses of the important office. Bearers and the chief functionary. The name of the bank, branch, address and account number designated by the applicant by NGO organization or ngo consultancy for receiving any foreign contribution. It may be noted that FCRA transactions can be routed only through this account.
The issue of funding of NGOs and the aspect of external audit came up for discussion at the biennial conference of the States Accountants General held in the capital[2005]. There have been demands that NGOs getting Government grants should come under statutory audit and that the books of accounts of such voluntary organizations should be completely opened up to CAG audit.
Sometimes, recover some nominal amount from the individual beneficiaries who are provided certain services, items etc., at a subsidized rate.
The reporting of receipt of such money mainly depends upon the funding of the related expenditure on such items, services etc. If the related payment to purchase such items or hire such services is from foreign funds, then such recoveries should be reported as foreign contribution money only and must be reported in FC-3. If the related expenditure has been made out of both Indian and foreign funds then the recoveries should also be bifurcated into Indian and foreign on the basis of related incurred of expenditure. NGOs receive grants from the government as well as other national and international agencies. Para 13 of the Accounting Standards (AS) 12 –
Accounting for Government Grants provides that Government Grants should not be recognized until there is reasonable assurance that
Accounting for Government Grants
(i) the enterprise will comply with the conditions attached to them, and
(ii) the grants will be received. Even if Accounting Standards are not applicable to an NGO, the principles of accounting laid down in AS-12 should be followed. Grants may be of the nature of project-based grants, or comprehensive grants not related to a particular project but for the general purposes of the ‘grantee’ organization.
