Supreme Court orders audit of NGOs to check misappropriation of funds

New Delhi, Jan 10 (PTI) Government in India on Tuesday faced some tough questions for failing to evolve a regulatory mechanism to monitor thousands of crore worth of funds of over 32 lakh NGOs, societies and voluntary organisations, with the Supreme Court saying public money cannot go unaccounted and those misappropriating it must be prosecuted

Taking umbrage to the fact that no steps have been taken to evolve a regulatory mechanism even after the lapse of six years since a PIL was filed, a bench headed by Chief Justice J S Khehar said the Centre and its departments were doling out crores of rupees but were not aware of the repercussion of non-auditing

The bench, which comprised Justices N V Ramana and D Y Chandrachud, also warned that "mere blacklisting" of these organisations would not suffice and civil and criminal action should be initiated for misappropriation of public money received by them from various government departments

It said the misconception in the mind of the Centre and its departments on the issue of CAG auditing and complying with the General Financial Rule, 2005 made by the Finance Ministry, have to be removed and directed the competent authority to come out with guidelines and rules for a regulatory mechanism by March end "under any circumstances"

The bench noted that such action must be taken by the Centre and CAPART, which comes under the Ministry of Rural Development which has been instrumental in granting the funds

"We consider it appropriate to direct the Centre and CAPART to complete the excercise of auditing and submit the report by March 31, under all circumstances," the bench said

"There can be no doubt about the fact that the amount disbursed by CAPART/other government departments is public money and must be accounted for," it said, adding that so far, the only exercise or action carried out in case of non- submission of balance sheet/returns is "merely blacklisting"

In case of non-compliance of auditing and other rules, necessary civil and criminal action has to be initiated where public fund is received from CAPART or government departments and misappropriated, it said

The apex court said on next date of hearing on April 5, it expected the Centre to place before it the guidelines and rules for accreditation of voluntary organisation and detailing the manner in which they shall maintain their accounts, conduct the audit, the process of recovery and methodology of recovery of the amount in case of misappropriation and criminal proceeding

At the outset, the bench asked the Centre "how do you regulate the NGOs which get the money.

News Source : Press Trust of India