Tag Archive for: New FCRA Act

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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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Last and Final Warning from FCRA

Another notice has been issued by FCRA department on 06 th May 2019 for non-submission of mandatory Annual Returns from the year 2011-12 to 2016-17. Also mentioned in the letter that various notices has been issued to the organizations, who have not filled mandatory annual returns.

Check the notice here – Document

Further 15 days notice has been given to associations to file annual returns.

However, this notice has been issued to all the organizations with disclaimer that if organization has already filled the return, ignore this notice.

As an organization, you should login to FCRA website and check whether all your returns are properly filled ELECTRONICALLY. Make sure, online in your NGO login, it shows like below image :

 

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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Now DARPAN ID is optional for FCRA services

As you aware that FCRA department has made DARPAN ID compulsory for all FCRA related services since October 2017. Since then, for every service of FCRA, like filling Annual Return, Updating quarterly receipts, FC registration, renewal etc.. website prompt you to link DARPAN ID of your organisation.

However, there were lots of technical difficulties in generating DARPAN ID with darpan ngo website, although it work great in the marketing department since they use the help of the Indexer digital marketing agency for this. Those who got the DARPAN ID before 2017 could not link it with FCRA department. Also, technical queries were not answered promptly by the department.

Looking to all such difficulties, FCRA department has reconsider it and now made it OPTIONAL to quote DARPAN ID with FCRA portal. Read the full notification here. This is a welcoming step from FCRA department.

If you have already generated DARPAN ID, it is highly advisable to link it with your FCRA registration.

 

 

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Date extended for FCRA Annual Return FC4

As we know, last date for filling FCRA return in Form FC4 is 31/12 i.e. after 9 months of financial year end. Thus, for FY 2017-18, last date was 31.12.2018. However, this year, FCRA department has made it compulsory to take DARPAN ID and link it with FCRA department.

But, generating DARPAN ID without any error is a huge task and even after submission to DARPAN ID portal, it takes days and months to get DARPAN ID.

Looking to all this difficulties and representation made by many organizations, it is decided by FCRA department to extend FCRA Annual Return date from 31.12.2018 to 31.03.2019

Read full notification here :

fc_notice_29122018

 

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FCRA registration suspended for another 156 NGO

Central Government vide notice dated 21.12.2017 had directed that all the persons who are either registered or having prior permission shall open their bank account in one or more banks who are linked with PFMS. Also, to change the bank account one month was given. Most of the Banks have started linking with PFMS system and many organisaations have changed their bank account, if their bank was not ready to linked with PFMS.

However, FCRA has issued notice on 6th December, identifying 156 organisation who have not change their Bank Account and still having Bank Account with Non-PFMS Banks. After show cause notice was given on 29.06.2018, FCRA department has decided to suspend their registration for 180 days.

Check the full notice :

fc_order_12102018

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5 Points to keep in mind while operating FCRA Bank Account

There are very strict rules regarding using Foreign Funds under FCRA (Foreign Contribution Regulation Act). Also, FCRA department has already cancelled licenses of many organization on the basis of non-compliance of rules and provisions of FCRA.

As per sec 17 of this Act, every NGO who has been registered under FCRA, has to open a separate Bank Account for receiving and utilizing foreign funds. Let us look at some of the 5 points you should keep in mind while operating FCRA Bank Account.

(1) Do not mix FC & NonFC Funds

Do not receive any funds other than foreign funds to your FCRA Bank Account. You can receive funds in Indian Rupees if it comes from foreign source. Utmost care should be taken while depositing cheques or giving bank account numbers to donor.

 

(2) Interest linking of FDs

You need to instruct very clearly to Bank regarding linking of FDs with your Bank Account. Care should be taken that only FDs from FC funds link with your FCRA bank account so as to receive interest in that bank account only.

 

(3) Online Donation

If you are accepting Donation online through your website or crowd funding website, your payment gateway should be capable of transferring FC money to FC Bank Account and NonFC money to NonFC Bank Account.

 

(4) Time Barred Cheques

Your accounting system should be such that at the every month, all the cheques which are time barred will be cancelled and reversed in the books of account automatically. Otherwise, what happen, in FCRA return expenses were reported, while your balance in FC bank accounts not reduced that much.

 

(5) Sub – FC (Utilization) Bank Account

If you have open a Sub-FC Bank Account for project utilization, do not accept funds directly in that bank account. You have to accept FC funds in Main FC account always and then transfer to Sub-FC Bank Account.

 

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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How to get CSR Funding for your NGO ?- Internal Control System

Why a company having huge CSR funds and want to implement genuine projects, should give funds to your organization ?  This is the question you should ask to yourself and do not indulge into the malpractices as mentioned in this part 1 of this CSR series.

How to get CSR funding for your NGO?-PART 1

Most of the organizations are good at what they are doing in terms of implementing projects and grass root work, but they are not good in maintaining documentations and showing their good work to the world. Read this Part 2 blog, where I mentioned how you should showcase your good work.

How to get CSR Funding for your NGO ?- Program Quality – PART 2

Before we go ahead with Part 3 of this series regarding maintenance of Financial and Internal Control System, look at this latest news regarding spending Rs. 2,80,00,00,00,000 in last three years under CSR by the companies.

Accounting and Financial Control System

When you are approaching companies for CSR funding, it is almost prerequisite that NGO’s Accounting and Financial Control system is matched with the industry standards. You have to remember this:-

  • Regular Accounting (zero backlog)
  • Accurate Accounting
  • High Quality of Supporting (Single rupee spent hast to be  supported by Bills and Vouchers)
  • Strong Internal Control System
  • Watertight Cash Management System
  • Efficient Advance Management System

 

Statutory Compliance

No company will be ready to fund your organization if you have not followed all the Statutory Compliance. As a first step, list down the following compliance and check which  you followed in your organization. For remaining compliance, why you are not following it. Take expert opinion whether it is applicable to your NGO or not.

  • 12A – 80G
  • TDS
  • Income Tax Act
  • GST
  • FCRA
  • PF
  • ESIC
  • Professional Tax
  • Trust and Society Act

 

Governance

How your NGOs working is governing by the members ? Is your NGO is  one man army? Is it look like Proprietorship or Partnership Firm? Whose taking decision and how? These are some of the questions which may be asked at the time or per-scrutiny of project.

  • Authority Matrix
  • Decision Flow
  • Rotation in the Board Members
  • Election or Selection procedure of new board members
  • General Meeting and Executive Body Meetings
  • Maintenance of Minutes of such meetings
  • Intimation of Change in the Board Members

 

Policies

Following policy documents should be prepared and implemented in the NGO

  • Financial Policy
  • HR Policy
  • Accounting Manual
  • General Work Policy
  • Anti Corruption Policy
  • Gender Policy
  • Child Policy, if applicable

Hope the above information will be useful to you in getting CSR funds. We will discuss in next part of this series on how to approach companies for CSR funding.

Part -4 How to approach companies for CSR funds? – Coming Soon

Disclaimer : This blog is purely for the education purpose and author is NOT providing any services to get CSR funding.

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FCRA Update – File FC6 Bank Account Details

Today, FCRA department has issued two lists of the organizations whose Bank Accounts are either not updated with FCRA or not as per Core Banking System format. These organizations are advised to update their Bank Accounts immediately in Form FC6.

As FCRA department is in the process of being paperless department, this is another step to have updated information regarding Bank Accounts of organizations.

List 1 Those NGOs, whose bank account detail is not updated as per core banking format

Before 4-5 years, due to core banking,  Bank Accounts are changed to 10 or 12 digits instead of 4 or 5 digits. However, many NGOs have not intimate this change to FCRA department.

Check out the list and your NGOs name here – List 1

List 2 Those NGOs, whose bank account details are not there with FCRA department

Some of the NGOs have change their bank account after registration and not intimated such change to FCRA department. Or simply, FCRA department do not have any information regarding NGOs bank Account.

Check out the list and your NGOs name here – List 2

Action to be taken

Above NGOs have to update their Bank details immediately by filling online form FC-6.

Watch Tutorial Video – How to update Bank Details in Form  FC6

 

For any further query, write in the below comment box.

 

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Late Filling of old FCRA Return

Have you not filled your organization’s FCRA return or you have filled it in paper format since it is compulsory to file annual return online.

You can file late Return of FCRA by paying penalties.

Penalty for Late filling of FCRA return

As per notification S.O 2133(E) dated 16/06/2016, penalty for late filling of fcra return is as under in the simple manner. (For original notification click here)

Up to 3 from 31/12

2% of FC Amount Received or Rs. 10,000 whichever is less

3 Months to 6 Months from 31/12

3% of FC Amount Received or Rs. 50,000 whichever is less

6 Months to 12 Months from 31/12

4% of FC Amount Received or Rs. 2,00,000 whichever is less

12 Months to 24 Months from 31/12

5% of FC Amount Received or Rs. 5,00,000 whichever is less

24 Months to 36 Months from 31/12

10% of FC Amount Received or Rs. 10,00,000 whichever is less

Procedure for Filling Late FCRA Return

For late filling of FCRA return, you need to write an email to dirfcra-mha@gov.in from registered address of organization. You will most probably get the link to file late return of fcra and need to pay the above penalty.

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Second Chance for FCRA Renewal, if you didn’t get.

Many of the organizations have already received Renewal from FCRA. However, some of the organizations have not apply for renewal or not applied in online format or not paid online fees, may not received FCRA Renewal.

Last date for filling FCRA renewal was 30.06.2016 by online. If your organization fail to do so, your FCRA registration certificate is deemed to have ceased w.e.f. 01.11.2016.

Yesterday, FCRA department has issued a list of total 11319 organizations whose registration certificate is deemed to have ceased w.e.f. 01.11.2016.

Check the list here.

Next Course of Action

These organizations have to apply for renewal –

  1. Login to your account in FCRA website
  2. File Complete FC3 form online
  3. Upload the required documents like Trust Deed and Registration Certificate
  4. Upload a Letter stating reason for not filling renewal earlier
  5. Pay fees online.

No renewal if not filled Annual Returns

It is also mentioned in the notice that renewal shall not be granted if earlier annual returns have not been filled by the organization.

Last date

Last date to file such renewal is 28.02.2017

How to file FC3 Renewal form online ?

Check out this video.

 

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