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New Updates related to CSR Audit

Utilisation Certificate is asked by every Funding Agency and CSR funding Corporates. Generally, NGO frequently submits various reports of the implementing of the project including financial spent and position. At the end of the project or year-end, an audited utilisation certificate is asked, which includes expenses spent on the project against budget and remaining fund balance.

No Uniform format for UC

But the problem with UC is that there is no proper format suggested in any act or law. Thus, every auditor issued UC as per their format or funding agency insist in a particular format. This happens with CSR corporate also. And it is very difficult for statutory auditor of corporate to rely upon UC.

ICAI issued Advisory

So, ICAI (Institute of Chartered Accountants) has issued an advisory to its member regarding this recently. In such advisory, it is instructed to member / CAs to provide UC in a particular format of the report which is called “Independent Practitioner’s Report on Utilisation Funds” . Also, ICAI has advised such companies to obtain such Report from NGOs / CSR entity.

Download Advisory from Here

Lets talk about Report

It is usual audit report, but includes following :-

  • Management (NGO) Responsibility
  • Auditor’s Responsibility
  • Opinion of Auditor

So, under this report, Auditor has to give audit report after considering following :-

  • Checked whether the entity has incurred amounts on the Corporate Social Responsibility (CSR) activities specified in Schedule VII of the Companies Act, 2013.
  • Traced and agreed the amounts in the attached Statement.
  • Traced the amount spent on CSR activities from the bank statements / cash book of the entity.
  • Checked whether amounts spent on CSR activities have been adequately disclosed in the financial statements.
  • Obtained written representation from the management of the entity on the total amount unspent and their plan to disburse the unspent amount related to the project
  • Tested the arithmetical and clerical accuracy of the Statement

Conclusion

Thus, now onwards, most of corporates will ask NGOs to submit UC in this particular format for CSR projects.

Checkout my Video

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Free Webinar – How to Finalise Accounts of NGO like Professional?

In this situation of COVID-19 pandemic, all the staff of NGOs are busy in providing relief to their beneficiaries. June month is already started and many Accountant are suffering heavy backlog of accounting work. Many vouchers and expenditures are still to entered in Tally.

Remember that due date of Audit / Filling of Income Tax Return is extended only for the month, from September to October 2020.

So ,we have decided to help by taking free webinar covering step by step process on finalisation of NGO Accounts. We will try to cover following sub-topics :-

This webinar covers sub-topic:

-Closing Entries for Project

-Receivable Grants

-Unspent Grants

-Expenditure Grouping

-Cost Centre Analysis

-Depreciation 

-Presentation of BS, IE & RP

-TDS entries and 26AS Matching

-Staff Advance Accounts

-Compliances POV (FCRA,IT,TDS)

Registration link –

https://bit.ly/zoom-kcjmngo

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Refunds to Charitable Trusts will be issued immediately – Atmanirbhar Scheme

Finance Minister has announced the Atnmirbhar Package for COVID-19. What is there in for the sector who are working gratefully with the government in providing relief work in COVID-19 affected areas ?
One welcome announcement by Finance Minister is that to issue “Pending Refunds” to Charitabe Trusts.
Let us do some FAQs on the “Pending Refunds”.

For How Many Assessment Years of “Pending Refunds”?

Generally, NGOs income are exempt from tax and thus any tax deducted “TDS” mostly on Interest of FDs or Banks are claimed as refund while filling Income Tax Return. From past 6-7 years, after all the things are become online in Income Tax, mostly refunds are issued regularly to NGOs. What about past years? Can an we get pending refunds of 10 years back?

No clarity on this provided in Atmanirbhar schemes. But mostly recent years refunds were issued immediately and that too for those years which are free from any notices or proceedings.

Refunds issued Automatically or NGOs need to do anything to get Pending Refunds?

In my opinion, only those years refunds will be issued automatically which are free from any notices or pending proceedings. Thus, you will not get automatic refunds if, for relevant Assessment Year, some proceedings were pending u/s. 143(1) or 143(1)(a) or 143(3). See the below image.

Pending Proceedings under Income Tax
What to do to get Pending Refunds?

Step1 – First of all list out from your Income Tax Returns and Books of Accounts that for how many years refunds are pending
Step2 – Check whether any proceedings are pending (open) for that particular years.
Step3 – If so, first provide reply for those notices.
Step4 – Check Refund Failure Notice for that particular years. And if Refund was initiated but not credited to your Bank because of any error like change in Bank Account Number, IFSC Code etc, need to request for re-reissue of refund by updating Bank Details.

Check out below video series on how to get refunds

Conclusion

Do not just wait for refund to come in your account automatically. It will only for recent one or two Assessment Years and that too if Assessment wat over. For, earlier years Pending Refunds, you have to initiate and work as mentioned above.

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Webinar2

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Solved – Confusions of FCRA new Return FC4

THE CONFUSIONS

What if Project Expenses are spent in two districts/Areas?
How to show expenses location wise?
Should expenses activity-wise and total expenses match?
How to match closing balance?
How to reconcile FD Balance?
Where to put Other Income earned from FC Assets?
Where to put Current Liability and Current Assets?

And many such questions / confusion regarding filling of new FCRA return in FC 4 Form. This is the first year of such new from and many informations / items in it are new and confusing.

Join my Free Webinar on specifically such confuions and its solutions.

Details of Webinar

Date : 17.12.2019 Tuesday

Time : 3.30 to 5.30 p.m.

Speaker – CA Jahir Mansuri

For Free Registraion – Click on this link
https://zoom.us/j/352888311

How to join webinar – Check this video
https://www.youtube.com/watch?v=vFhAEoCF7jg

For any Technical Query – Call 9825434411

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CSR Master Class – A Workshop by NCD

One of our associates Navjivan Center for Development has organize the workshop for CSR in AHMEDABAD, Gujarat. Check out its details below.

https://kcjmngo.com/wp-content/uploads/2019/11/CSR-Master-Class_Brochure_Ahmedabad.pdf

For Registraion – Click Below

http://www.ncdindia.org/booknow.php?id=d1VaRk00ZGZwT1FISkc0WWc0SHBIQT09

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Cancellation of FCRA registration – New List

FCRA department has recently issued the new list of organizations whose registraion have been cancelled due to non filling of FCRA return for FY 2017-18

Cancellation of Registration

On 28.11.2019, FCRA department has issued a notice dated 19th October stating list of the organizations who have not filled FCRA return in Form – FC4 for FY 2017-18. There are 1808 organization all over India. Click here to view the full list.

It is now clear that, department do not accept paper return and thus it is mandatory since many years to file FCRA return in online mode.

Check out our video on how to file FC-4 return online.

Opportunities for being heard have been given

As mentioned in the notice, department had already given the oppertunity of filling onine FC return to the organizations who have not filled despite of due date was over. Thereafter, a SMS or emails were sent to remaining organizations as final oppertunity and after thatn those who had not comply, the registratinons were cancelled.

Now the way out

Once registraton stands cancel, organization can not apply for the fresh application of FCRA for 3 years. However, in the notice, it was mentioned that FC-4 return can be filled with the penaly after due date. Thus, in my opinion, organisations whose registraions are cancelled should request the department allow them to file FC return along with penalty and therby request to restore their registraion.

For other organisatoins

Now, the violation / negligence of compliance has been taken very seriously by FCRA department. Thus word of advie is to file FCRA return online well within deadline. So, for FY 2018-19, last date for filling FCRA return online is 31.12.2019.

Did I miss something?

Hope this will help you in your NGO, if you have any question,  you can ask here or chat with us. Also your comments are welcome on the above subjects.

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Location wise expenditures in FCRA return

As we are aware that a new format of FCRA return has been out in Form FC4.

Check out this tutorial video on how to file FCRA return.

The major change in this return is that it asked for the information Project-wise Expenditures. See below image.

Also, when you add activity or project, it asked to provide the address/location of the activity or project. Check it out.

Let us discuss some of the practical points related to this.

One Project – One Location

Easy-peasy. Nothing to worry. Full project expenditures go here, with opening balance, the grant received, utilization and the closing balance of that project or activity.

One project – Two locations

Bu the problem is here. When a project is implemented in more than one location. So, it is advisable to bifurcate the expenditures as per the location – drill down to district level will be okay.

However, generally, it is very difficult to fetch data from the Tally. If your chart of accounts are not capable of bifurcating locations, one has to check each and every vouchers and have to bifurcate. The easiest method is to create the location as cost categories in Tally so that one can get this data at one click.

How to configure this cost-category? – Check out this blog of mine

Head Office Location

Do not mention all the activity location as a head office, if your field area is different. Head office is for administrative work. Here the logic behind this to get activities in various geographic locations.

Administrative Expenses and Purchase of Fixed Assets

Apart from program expenses, there are administrative expenses and purchase of fixed assets also from the Foreign Funds received. However, there is no clarity to put these expenses in this portion of the FC-4 Form. In my opinion, however, it is better to show administrative expenses and fixed assets related to the projects under here. So, you can get correct balance as at the end of the year for that activity or project.

Conclusion

The bottom line is that give accurate and correct information. Also, to provide detailed information is always better than providing less information. Best of luck for FCRA return filling.

Remember

The last date for filling FCRA return in Form FC-4 for FY 2018-19 is 31.12.2019.

Did I miss something?

Hope this will help you in your NGO, if you have any question,  you can ask here or chat with us. Also your comments are welcome on the above subjects.

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Revised Annual Return FC-4 Form – FCRA Update

At the beginning of the Financial Year, FCRA department has made changes to FCRA Annual Return, which is in Form FC4. The more detailed, more refined format has been introduced. Let us have a look at new changes.

Activity/Project wise utilization

Earlier:- Only total figures of utilization.
New:- You need to give details of opening balance, receipts, utilization and closing balance of each activity/project.

Each Donor Details

Earlier:- Only details of donors who had given more than Rs. 20,000 to be given.
New:- Now, details of each and every foreign donor (1st recipient and 2nd recipient) is to be given.

Fixed Assets Details

Earlier:- Only a total of fresh assets purchased during the year was to mention.
New:- Now, details of each fixed assets purchased during the year from foreign contribution is to be mentioned. e.g. Type of assets, project name, amount etc..

FD Details

Earlier:- Earlier it was not cleared which amount should be displayed. FD closing balance or matured or utilized, bit confusion was prevailing.
New:- Now, very clear tabs given to write the opening balance of FD, new FDs made, the maturity of FD and Closing Balance of FD.

How to file FC-4 return?

Check out below video showing detail presentation on the procedure of FC-4 Form.

 

 

Did I miss something?

Hope this will help you in your NGO, if you have any question,  you can ask here or chat with us. Also your comments are welcome on the above subjects.

 

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