Section 80 in The Delhi Co-operative Societies Rules, 2007
80. Power of Registrar to Direct Special Audit in Certain Cases and Process of Conducting Audit in all Societies.
(1)Where the Registrar is of the opinion, -(a)that the affairs of a co-operative society are not being managed in accordance with the co-operative principles or prudent commercial practices or sound business principles:(b)that a co-operative society is being managed in a manner likely to cause serious injuries or damage to the interest of business to which it pertains;(c)that the financial position of a co-operative society is such as to endanger its insolvency to the society; -the Registrar may at any time by written order, direct that a special audit of the accounts of co-operative society for such period or periods and for such purpose, as may be specified in the order, shall be conducted and may by the same or different order appoint an auditor out of the panel drawn by Registrar to conduct special audit after giving a show cause notice to the co-operative society. The Special Auditor shall have same powers and duties as are given to an Auditor under the Act. The Special Auditor shall submit its report to the Registrar for taking suitable action on the report as he considers necessary in accordance with the provision of the Act or any other law for the time being inforce. Registrar may direct the co-operative society to submit comments on the auditor report or direct the co-operative society to place the report in the general body meeting to be called for this purpose by the committee. The expenses incurred for conducting special audit shall be decided by the Registrar, which shall be paid by the co-operative society from its funds and in default of such payment, the same shall be recovered from the co-operative society as arrears of land revenue.(2)The audit under sub-section (1) of section 60 shall in all cases extend back to the last date of the previous audit and shall be carried out up to the last date of the co-operative year immediately, preceding the audit or where the Registrar so directs in the case of any particular co-operative society or class of co-operative societies, such other date as may be specified by the Registrar.(3)if in the opinion of Registrar, it is necessary to do so in relation to any co-operative society, he may, by order direct that an audit of cost accounts of the co-operative society shall be conducted in such manner as may be specified in the order by an auditor (who shall be Cost Accountant within the meaning of Cost and Work Accountant Act 1959 (23 of 1959). An audit conducted under this rule shall be in addition to the audit conducted by an auditor appointed under section 60 of the Act(4)Unless the Registrar directs other wise, the audit of a co-operative society shall be conducted at the registered office of the co-operative society.(5)Previous intimation shall be given to the co-operative society before the audit is commenced.(6)(a)The audit report shall state the following, namely:-(i)whether or not the auditor has obtained all the information and explanations required;(ii)whether or not in the opinion of the auditor, the balance-sheet and the profit and loss accounts referred to in the report are drawn up in conformity with the Act, these rules and the bye laws thereunder;(iii)whether or not such balance-sheet exhibits a true and correct account of the state of affairs of the co-operative society according to the best of his information and the explanations given to him and as shown by the books of the co-operative society;(iv)whether, in the opinion of the auditor, books and accounts have been kept by the co-operative society as required under the Act, these rules and the bye-laws;(v)Whether there has been any material impropriety or irregularity in the expenditure or in the realisation of money due to the co-operative society;(vi)Whether there was any material impropriety or irregularity in the expenditure, realization of money due to the co-operative society or any defect or observation pointed out in the previous audit which required rectification, has been rectified or not;(vii)Whether in case of a co-operative bank, the guidelines issued by the Reserve Bank of India and National Bank for Agriculture and Rural Development established under the National Bank for Agriculture and Rural Development Act, 1981 (61 of 1981)have been adhered to or not;(viii)Whether the loan and advance made by the co-operative society;(ix)Whether the members have been enrolled as per the provisions of Act and these rules;(x)Whether the co-operative society has accounted the deposits of equalization charges in the books of accounts. In case of enrolment and refund of money in case of resignation/ expulsion of member from society, it should be specifically noted, whether an actual debit has been shown in the books of accounts in case of resignation or expulsion;(b)In case any of the matter referred to in sub-clauses (i), (ii), (iii) or (iv) of clause (a) of sub rule (b) is answered in the negative or in the affirmative with any remarks, the report shall state the reason for such answer with facts and figures;(7)The audit report shall also contain schedules with full particulars of : -(a)all transactions which appear to be contrary to the provisions of the Act, these rules or the bye-laws of the co-operative society;(b)all sums which ought to have been brought, and have not been brought into account by the co-operative society;(c)any material impropriety or irregularity in the expenditure or in the realisation of money due to the co-operative society;(d)any money or property belonging to the co-operative society which appears to the auditor to be bad or doubtful of recovery;(e)information in prescribed form giving details of the co-operative society for display on website of co-operative Department;(f)any other matter specified by the Registrar in this behalf;(g)The name of the members of committee along with their addresses;(h)In case of co-operative housing societies the details of members enrolled, resigned and expelled and detail of the decisions of the committee and refund of dues or contribution of such members and list of members with their addresses;(i)All transactions which appear to be contrary to the guidelines issued by the Reserve Bank of India and National Bank for Agriculture and Rural Development;(j)The loans given by the co-operative society to the members of the board or the committee;(k)Any violation of guidelines, conditions etc. issued by the Reserve Bank of India or National Bank for Agriculture and Rural Development by any cooperative Bank;(l)Working status of the society that is to say, working or defunct.(8)The summary of audit report as prepared by auditor shall be read out in general body meeting. The audit report together with its accompaniments shall be open to inspection by any member of the co-operative society. The Registrar may, however, direct that any portion of the audit report, which appears to him to be of objectionable nature or not justified by facts shall be expunged and the portion so expunged shall not form part of the audit report.(9)The auditor shall examine the monetary transactions of a co-operative society in so far as may be necessary for the purpose of ascertaining as to whether there has been any material impropriety or irregularity in the expenditure or on the realization of money due to the co-operative society and whether any transaction infringes any provisions of the Act, these rules or bye-laws, or any directions of the committee. In case of difference of opinion between the auditor and the co-operative society in regard to the propriety of any of its monetary transactions, the Registrar shall decide the matter and his decision shall be final.(10)If the result of the audit discloses any defects in the working of a co-operative society, the co-operative society shall, within three months from the date of audit report, explain to the Registrar the defects or the irregularities pointed out by the auditor, and take steps to rectify the defects and remedy irregularities, and report to the Registrar the action taken by it thereon, the compliance report shall continue to be submitted till all the defects are rectified or irregularities remedied to the satisfaction of the Registrar. The Registrar may also make an order directing the co-operative society or the officers to take such action as may be specified in the order to remedy the defects, within the time specified therein.(11)(a)The audit reports shall be submitted to the Registrar within a period of thirty days of the completion of the audit. All audit reports submitted by the auditor to the Registrar, shall be examined by the authorized officer. In audit reports where no short-comings or irregularities have been pointed out, the authorized officer shall have the authority to accept the report. The authorized officer may recommend, after proper examination of a audit report, to the Registrar that the same may be examined by any other officer or a committee of auditors or experts, and the decision of the Registrar in this regard shall be final;(b)The authorized officer shall also examine whether the auditor has taken all care to conduct the audit as per these rules. If it is found otherwise the authorized officer shall submit the report for consideration of the Registrar with his comments for re-audit;(c)In case, short-comings or irregularities have been pointed out by the authorized officer, the same shall be brought to the notice of the Registrar. The fact of acceptance or non-acceptance of the audit report may be communicated to the co-operative society by the of Registrar, at the cost of the society.
