Audit and Audit Rectification

Part 1

v     Appointment of Auditors of Co-operative Societies

      General

Section 81 effects the division of societies into two groups for the purpose of  audit. One group consists of  (i) societies which have been given financial assistance including guarantee by the State Government or any Government undertaking (ii) Apex societies  (iii) State and District Level Federal Societies  (iv) District Central Co-op. Banks (v) Co-op. Sugar Factories (vi) Urban Co-op. Banks (vii) Co-op Spinning Mills (viii) Dist. & Taluka Co-op Sales and purchase Organisations (ix) such other societies as the State Government may specify by notification from time to time. The other group consists of all residuary societies which do not fall in the first group.

In the case of the first group societies the audit thereof will be carried out every co-operative year by the Registrar’s auditors.  In case of societies in the 2^nd group the audit will be done every co-operative year by an auditor to be appointed by such society from among the panel of auditors maintained by the Registrar or by a Chartered Accountant holding Co-op. audit Certificate of the Institute of Chartered Accountants.  Of course by this, the Registrar’s power to get the accounts audited by his own auditors is not affected.  The original sub-section (1) had provided for audit of such societies by the Registrar every three years but the provision has been deleted by the Maharashtra Act 27 of 1996 section 4(a). Audit under section 81(1)(a) has to be undertaken by the Registrar or any person authorized by him and such societies cannot get the audit done from an Auditor of their own choice.

      General Body to appoint Auditor

The Co-operative societies, which are allowed to get the statutory audits done by professional Auditors, should appoint the Auditors at the General Meeting every year.

      General Body to fix audit fees

The General Body of the Society shall fix the audit fee of the outside auditor. It should not exceed the scale fixed by the Registrar. At present the scale of Audit fees is as per circular No. CC/ADT dated 15-5-1992 issued by the Commissioner for Co-operation & Registrar, Co-operative Societies, and Maharashtra State Pune and is as under:

(a)    For Societies located within the Corporation area and cantonment areas, Rs. 36  per member

(b)   Municipal Towns – Rs.24 per member

      (c) Village Level – Rs.12 per member