| 59. |
Procedure for appointment of
Auditors and for conducting Audit : |
| 1 |
The audit of a society shall be
conducted by any of the Department
Auditor appointed by the registrar
or by a certified auditor approved
by the Registrar from time to time
on such terms and conditions as he
deems fit. |
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Explanation : |
| i |
For purpose of
this chapter, audit shall include
annual or periodical audit,
continuous or concurrent audit and
test or super audit and re—audit. |
| ii |
For
purpose of tois rule, “a certified
auditor” includes. |
| a |
A Chartered
Accountant within the meaning of the
Chartered Accounts Act, 1949 |
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b |
a
person who holds a government
diploma in Co-operative Department
of any State Government or under the
Registrar and whose name has
included by the Registrar in the
panel of certified auditors
maintained and published by him in
the official Gazette at least once
in every years. |
| 2 |
The audit under
sub section(1) of section 64 shall
in all cases extend back to the last
date of the previous audit and shall
be carried out upto the last date of
the Co-operative years immediately
preceding the audit or where the
Registrar so directs in the case of
any particular society or class of
societies such other date as may be
specified by the Registrar. |
| 3 |
Unless the
Registrar directs otherwise, the
audit of a society shall be
conducted in specified by the
Registrar. |
| 4 |
Previous
intimation shall be given to the
society before the audit is
commenced. |
| 5 |
The officers and
employees of the society shall give
the audit officer all assistances
necessary for the completion of the
audit and for this purpose, prepare
such statement and take such action
with regard to the verification or
examination of its accounts as he
may require. |
| 6 |
(i) The audit report shall state;- |
| a |
whether or not
the audit officer has obtained all
the information and explanations
which he required: |
| b |
Whether or not
in his opinion the balance sheet and
the profit and loss accounts
referred to in the report are drawn
up in conformity with the law: |
| c |
whether or not
such balance sheet exhibit a true
and correct account of the state of
affairs of the society according to
the best of his information and the
explanation given to him and as
shown by the books of the society: |
| d |
whether, in his
opinion, books, and account have
been kept by the society as required
under the Act, the Rules and the
Bye-laws; |
| e |
whether there
has been any material impropriety or
irregularity in the expenditure or
in the realization of money due to
the society; and |
| f |
whether any net
profits are available for
distribution amongst the members. |
| ii |
where any of the
matters referred to in sub clauses
(a), (b), (c) or (d) of sub clauses
(i) of clause (6) is answered in the
negative or I the affirmative with
any remarks, the report shall state
the reason for such answer with
facts and figures, in support of
such reasons. |
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| 7 |
The audit
report shall also contain schedules
with the full particular of;- |
| 1 |
all
transactions which appear to be
contrary to the of the Act, the
Rules or the Bye-laws of the
society. |
| ii |
all sums which
ought to have been but have not been
brought into account by the society. |
| iii |
any material
impropriety or irregularity in the
expenditure or in the realization of
money due to the society. |
| iv |
an estimate of
the overdue of the society an its
proportion to demand ; |
| v |
any money or
property belonging to the society
which appears to the auditor to the
bad or doubtful debt; and |
| vi |
any other matter
specified by the Registrar in this
behalf . |
| 8 |
The summary of
audit report as prepared by the
auditor shall be read out in the
annual general meeting next
following audit. The audit report
together with its accompaniments
shall be open to inspection by any
member of society. The Registrar
may, now ever, direct that any
portion of the audit report which
appears to him to be of
objectionable nature or not
justified by facts shall be expunged
and the portion so expunged shall
not form past of the audit report. |
| 9 |
If the result of
the audit held under the last
preceding rules discloses any
defects in the working of a society,
the society shall, within three
month from the date of audit report
explain to the Registrar the defects
or the irregularities pointed out by
the auditor, and take steps to
rectify the defects and remedy
irregularities and report to the
Registrar in Form J the action taken
by it thereon. This compliance
report shall continue to be
submitted at such interval as the
Registrar may direct, till all the
defects are rectified or
irregularities remedied to the
satisfaction of the Registrar. The
Registrar may also make an order
directing the society to take such
action as may be specified in the
order to remedy the defects within
the time specified therein. |
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| 60. |
Audit Fee : |
| 1 |
A society shall
pay on or before the 31st March of
each year, and audit fee at such
rates as may be fixed by the
Registrar with the prior approval of
the Government. |
| 2 |
The registrar
shall have power to increase the
prescribed audit fee in special
cases, for reasons to be recorded in
writing. |
| 3 |
The Registrar
may, at his discretion, remit either
wholly or in part the audit |
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| 61. |
Procedure for
the conduct of inquiries and
inspection: |
| 1 |
An order
authorizing inquiry under section 66
or inspection under section 67 shal
among other things, contain the
following: |
| a |
the name of the
person authorized to conduct the
enquired into or whose books are to
be inspected. |
| b |
the name of
society whose affairs are to be
inquired into or whose books are to
be inspected: |
| c |
the specific
point or points on which inquiry or
the inspection is to be made, the
period within which the inquiry or
inspection is to be completed and
report submitted to the Registrar |
| d |
cost of inquiry
; |
| e |
any other matter
relating to the inquiry or
inspection. |
| 2 |
A copy of every
order authorizing inquiry under
section 66 or inspection under
section 67 shall be supplied to the
financing bank. |
| 3 |
If the inquiry
or inspection cannot be completed
within the time specified in the
order referred to in the sub rule
(1) the person conducting the
inquiry or inspection shall submit
an interim report stating the
seasons for failure to complete the
inquiry or inspection and the
Registrar, if he is satisfied, grant
such extension of time for the
completion of time inquiry or
inspection as he may deem necessary
or he may withdraw the inquiry or
inspection from the officer to whom
it is entrusted and hold the inquiry
or inspection himself or entrust it
to such other person as he may deem
fit |
| 4 |
On receipt of
the order referred to in the sub
rule (1) the person authorized to
conduct the inquiry or inspection
shall proceed to examine the
relevant books of accounts and other
documents in possession of the
society any of its officers,
members, agents or servants and
obtain such information or
explanation from any such officers,
members agents or servants of the
society in regard to the transaction
and working of the society as he may
deem necessary for conduct of such
inquiry or inspection. |
| 5 |
The person
authorized to conduct the inquiry or
inspection shall submit his report
to the Registrar, on all the points
mentioned in the order referred to
in sub rule (1). The Report shall
contain his finding and the reason
therefore supported by such
documentary or other evidence as
recorded by him during the course of
his inquiry or inspection. He shall
also specify in his report the cost
of the inquiry or inspection
together with reasons and recommend
to the Registrar the manner in which
the entire cost or a part thereof
may be apportioned, amongst the
parties specified in section 68. The
Registrar shall pass such orders as
may be considered just after giving
a reasonable opportunity of being
heard to the parties concerned. |
| 6 |
If the result of
any inquiry held under section 66 or
an inspection made under section 67
discloses any defects in the working
of the society, the Registrar may
bring such defects to the notice of
the society, and if the society is a
member of the financing bank, to the
notice of that bank. The society
shall submit a rectification report
in From J and shall continue to
submit such rectification report to
the Registrar till all the defects
are rectified or the irregularities
are remedied to the satisfaction of
the Registrar. |
| 7 |
The Registrar
may also make an order, directing
the society or its officers or the
financing bank to take such action,
may be specified, in the order to
remedy the defects within the time
specified therein. |
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| 62. |
Procedure for
assessing damage against delinquent
promoters, ect. under section 70 : |
| 1 |
On receipt of
the report made by the auditor, or
person authorized to make inquiry
under section 66 or inspection under
section 67, or by the liquidators or
otherwise, the Registrar or any
person authorized as he may deem
necessary regarding the extent to
which the person who has taken any
part in the organization or
management of a society or any
deceased, past or present officer of
the society has misapplied or
retained, or become liable or
accountable for any money or
property of the society or has
committed misfeasance or breach of
trust in relation to the society. |
| 2 |
On the
completion of the further enquiries,
if any under sub-rule (1), the
Registrar or the person authorized
by him shall issue a notice to the
person or persons concerned
furnishing him or them with
particular of the acts of
misapplication, retention.
Misfeasance or breach of trust and
the extent of his or their liability
involved therein and calling upon
him or them to show cause within
fifteen days of the date of issue of
the notice as to why he or they
should not reimburse the society or
action should not be taken against
him or them under law. |
| 3 |
On the receipt
of explanations referred to in sub
rule (2), the Registrar or the
person authorized by him, if he is
satisfied that there are reasonable
ground for holding the person or
persons liable, shall frame charges. |
| 4 |
The person or
persons so charged shall be accorded
sufficient opportunity to submit in
writing his or their statements in
defence and produce such documentary
or oral evidence as he or they may,
in his sole discretion permit
production of any other documentary
or oral evidence, if considered
necessary subsequently.
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| 5 |
The Registrar or
the person authorized by him, shall
thereafter record the evidence led
by the society or the liquidator or
the person or the persons concerned
and take on record the document
proved by them and shall thereafter
fix a date for hearing arguments of
the parties. |
| 6 |
On the day fixed
hearing under sub-rule (5),
Registrar or the person authorized
by him, hear the arguments and may
pass his final order on the same day
or on any day fixed by him within
twenty days from the date on which
the hearing was completed. On the
day so fixed, the Registrar or the
person authorized by him, as the
case may be, shall make his final
order either ordering repayment of
the money or return of the property
to the society together with
interest at such rate as may be
specified by him or to contributed
such amount to the assets of the
society by him or to contribute such
amount to the assets of the society
by way of compensation in regard to
misapplication, retention,
misfeasance or breach of trust as
may be determined or may reject the
claim submitted on behalf of the
society. |
| 7 |
The Registrar or
the person authorized by him may
also provide in his order for
payment of the coast of the
proceeding under this rule or any
part of such cost as he think just. |
| 8 |
The Registrar or
the person authorized by him shall
furnished a copy of his order, under
sub-rule (6)to the parties concerned
within ten days of the date on which
he makes his final order. |
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