It is also required to maintain a separate set of books exclusive. for a foreign contribution received and utilized.
The accounts for any other funds including local contribution has to be maintained separately and not to be mixed with true foreign contribution accounts.
The accounts for Foreign Contribution shall be maintained each Financial. Every organization in receipt of the foreign contribution must get its accounts audited by Chartered Accountant under Foreign Contribution. The complete by-laws are required for the registration process. The Audit Report to be given in Balance sheet as Receipts & Payments for the year ended Every organization in receipt of foreign contribution both cash in kind has to submit a Return for the year ended within of every year to the Divisor Ministry of Home Affairs Govt of India New Delhi. The government is more concerned about how the forgoer contribution accepted was utilized by the associations and much remained in balance rather than with the accounting surplus or deficit for the year on foreign contribution account. That is why the auditor is required to report on the Statement of Receipts and Payments (along with the Balance Sheet) and not on the Statement of Income and Expenditure. For contribution received in kind, the rule does not require the maintenance of accounts on the double-entry basis. For more detailed knowledge contact ngo consultancy.
However, it requires the maintenance of inventory like records and for articles and securities received as a contribution.
maintenance of inventory required under the Foreign Contribution Regulation Act
These records, therefore, do not form part of forensics contribution accounts. The balance sheet therefore in effect would not reflect the foreign contribution received in kind. If an association is in receipt of foreign contribution without registration under the Foreign Contribution Regulation Act without obtaining permission from Central Government then the amount so obtained will be seized by the Central Government. If local contribution and foreign contribution are mixed it is a serious violation under and it could lead to cancellation of registration. Interest earned out of foreign contribution should be treated a foreign contribution only and the same be treated as Income according to a particular project for which the fund has been received.
The Foreign Contribution Regulation Act, 2011 has been brought into force with effect from May 2011 along with the Foreign Contribution (Regulation) Rules, 2011 made under the said Act by the Central Government. All Not-for-Profit Organizations and Other Bodies and Individuals concerned with the subject of Foreign Contribution will have to become familiar with the new features of the Act and particularly the FCRA Rules, 2011 made under the said Act by the Central Government. There is a considerable lack of awareness about the law relating to foreign contributions. Even amongst the non-government organizations and other bodies who were receiving or wanted to receive foreign contribution or hospitality.
