Audit Observations

v     Audit Observations

The observations which the auditors of the Co-operative Housing Society usually make are given hereunder.  The Society should take necessary steps to avoid inviting such remarks in the audit report from the auditors.

¯     Cash on Hand

The cash on hand should not exceed the limit of Rs. 300/- prescribed in Bye-law No. 145. It is necessary for the Society to maintain the minimum cash balance.  The Treasurer/ Secretary should always deposit the excess cash in the bank.

¯     Payments to be made by Cheques

The Society should take necessary precautions to make all possible payments only through Cheques. All the payments above the limit stated below should be made by cross account payee Cheques.

Upto 20 members                           Rs. 1500/-

21 to 50 members                          Rs. 3000/-

Above 50 members                        Rs. 4500/-

¯     Opening of Bank Account

All the Co-operative housing societies should open their bank accounts only in their district bank e.g. Societies in the Thane District will open their bank accounts in The District Central Co-operative Bank Ltd.  With prior permission of registrar it may opened with another bank for day to day transactions and not for investments i.e. Fixed Deposits.

¯     Expense Vouchers

The expense voucher should be duly approved and authorised by the Committee.  The receiver’s signature be taken on the voucher.  Revenue stamps should be affixed on debit vouchers whose amount is above Rs. 500/- to prove its originality.

¯     Expenses to be approved in the Managing Committee Meeting

All day to day expenses incurred between the periods from the previous Managing Committee meeting until the current Managing Committee Meeting should be approved in the forthcoming Managing Committee meeting.

¯     Insurance of the building

Most societies do not insure their buildings.  The society should do so for the security of its members.  As per the Bye-law No. 161, every society is urged to insure its building premises.

¯     Levying of Charges

They should be levied as per Bye-law No. 69(a).

¯     Sinking  Fund

The sinking fund of the Society must be collected as per Bye-law No. 13(c) and invested on a long term basis along with the interest earned thereon.  Every society should have a sinking fund for its security position and status.

¯     Repairs and Maintenance Fund (Regular & Major)

(a) The society should create the Repairs and Maintenance Fund by collecting       contributions from its members at the rate fixed at the general body meetings from time to time, subject to the minimum of 0.75 per cent per annum of the value of each flat for expenses of normal recurring repairs.

(b) Major Repair Fund to be collected as and when required and decided by the general body at the rate fixed on an area basis.

¯     Repair Charges – Bye-law No.158

 Limit for incurring expenditure on repairs and maintenance of the Society’s property:

(a) The Committee shall be competent to incur expenditure on the repairs and maintenance of the society’s property, if the one time expenditure does not exceed:

           

                Up to 25 members                                                                    Rs.25,000/-

                26 to 50 members                                                                    Rs.50,000/-

                51 and above                                                                          Up to Rs.1, 00,000/-

(b) If a one time expenditure on repairs and maintenance of the society’s property exceeds the limits mentioned under Bye-law No.158 (a) prior sanction of the meeting of the general body of the Society shall be necessary.

(c) The meeting of the general body of the Society shall decide the limit up to which the expenditure on repairs and maintenance of the property of the Society may be incurred by the Committee without calling for tenders for the work. In respect of the work, the cost of which exceeds the limit, so fixed, the Committee shall follow the procedure of inviting tenders for the work. In respect of the work, the cost of which exceeds the limit, so fixed, the Committee shall follow the procedure of inviting tenders, placing them before the general body meeting for approval and entering into a contract with the architect (if appointed) and the contractor.  

¯     Investments of Funds

The Managing Committee should take proper care to deposit the share money, Sinking Fund, Major Repair Fund etc. collected from the members in the specified securities or long term deposits as specified in Bye-law No.15.

¯     Confirmation of amounts due from the members

The Society should take the necessary confirmation from those members whose amounts are due to the society. Once the confirmations are taken, the members are legally bound to pay the amount due to the society, Recovery of dues is the most important function which the committee of ay Co-operative Housing Society should perform.

¯     Maintenance of Statutory Records

For any society the maintenance of statutory books such as ‘I’ form, ‘J’ form, share register, Nomination register, Investment Register etc. are basic legal necessities. These give details of all the members of the society, the transfers made, to whom and by whom. Apart from the personal benefits to the Society it is a legal obligation on the part of the society to maintain the records.

¯     Issue of Share Certificate

The society should take care to issue share certificates to all the members.

¯     Annual General Meeting

Although the society can extend the date of the annual general meeting with the prior permission of the Registrar, it would be a healthy practice on the part of the society to conduct its Annual General Body Meeting, latest by 14^th of August every year as specified in Bye-law No.95.

¯     Managing Committee Meeting

As per Bye-law No.128 The Managing Committee of every society should meet at least once in every month and the quorum must be present at the time of discussion of every item of agenda of the meeting.