Section 63 in Karnataka Co-Operative Societies Act, 1959
63. Audit.
- [(1) The Director of Co-operative Audit shall audit or cause to be audited by a person authorized by him by general or special order in writing in this behalf, the accounts of every co-operative society at least once in each year] [Substituted by Act 25 of 1998 w.e.f. 15.08.1998 and again substituted by Act 24 of 2001 w.e.f. 05.09.2001.](2)The audit under sub-section (1) shall include an examination of overdue debts, if any, the verification of the cash balance and securities, a valuation of the assets and liabilities, and an examination of the working and the other prescribed particulars of the society.(3)The [Director of Co-operative Audit] [Substituted by Act 5 of 1984 w.e.f. 09.01.1984.] [or the authorized person] [Substituted by Act 25 of 1998 w.e.f. 15.08.1998 and again substituted by Act 24 of 2001 w.e.f. 05.09.2001.] shall at all times have access to all the books, accounts, documents, papers, securities, cash and other properties belonging to, or in the custody of, the society and may summon any person in possession or responsible for the custody of any such books, accounts, documents, papers, securities, cash or other properties, to produce the same at any public office at the headquarters of the society or any branch thereof.(4)Every person who is, or has at any time been, an officer or employee of the society and every member and past member of the society shall furnish such information in regard to the transactions and working of the society as the [Director of Co-operative Audit] [Substituted by Act 5 of 1984 w.e.f. 09.01.1984.] [or the person authorized] [Inserted by Act 25 of 1998 w.e.f. 15.08.1998 and substituted by Act 24 of 2001 w.e.f. 05.09.2001.] may require.(4A)[ Every Co-operative Society shall for each co-operative year, prepare and furnish within two months from the end of that year, to the Registrar and the Director of Co-operative Audit, a statement showing the receipts and disbursements, profit and loss and the balance sheet for the year and such other statements and returns as the Registrar or the Director of Co-operative Audit may direct.] [Inserted by Act 5 of 1984 w.e.f. 09.01.1984.](5)[ The Director of Co-operative Audit [***] [Substituted by Act 25 of 1998 w.e.f. 15.08.1998.] shall send copies of the audit report and communicate the results of audit to the co-operative society, the Registrar and to the financing bank or credit agency, and if the society is affiliated to any other co-operative society, to such co-operative society;](6)[ The Director of Co-operative Audit or any officer authorized by him shall have right to receive all notices and every communication relating to the annual general meeting of a co-operative society and to attend such meeting and to be heard thereat, in respect of any part of the business with which he is concerned as auditor.(7)If the result of the audit held under sub-section (1) discloses any defects in the working of society, the society shall within six months from the date of the audit report explain to the Director of Co-operative Audit and to the Registrar the defects or the irregularities pointed out in audit, and take steps to rectify the defects and remedy the irregularities and report to the Registrar the action taken by it thereon. The Registrar may also make an order directing the society or its office bearers to take such action, as may be specified in the order to remedy the defects within the time specified therein.(8)(a)Any society aggrieved by any item held under objection in the audit report may apply to the Director of Co-operative Audit for its deletion within six months of the receipt of the audit report.(b)The Director of Co-operative Audit may on receipt of the application under clause (a) summon the production of documents, if any, pertaining to the objection and examine the same. He may also examine any person including the auditor and order for deletion or confirmation of the audit objection and on deletion, the objection shall stand removed from the balance sheet of the society and on confirmation the amount held under objection shall be recoverable.(9)The Registrar shall submit half yearly reports to the State Government furnishing details of the number of defects disclosed in audit, number of defects rectified, action taken to remedy the defects and the reasons for pendency, if any. A copy of such report may be forwarded to the Director of Co-operative Audit.(10)If it appears to the State Government on an application by a co-operative society or otherwise that it is necessary or expedient to re-audit any account of a society, the State Government may, by an order provide for such re-audit and the provisions of the Act and the rules applicable to the audit shall apply to such re-audit:[Proviso ***] [Sub-sections (6) to (11) substituted for sub-section (6) by Act 25 of 1998 w.e.f. 15.08.1998.]Provided also that such re-audit shall be ordered only when there is a prima-facie case of fraud or mis-appropriation or embezzlement of funds not detected or properly examined by the auditor during regular audit or misclassification of accounts or for any other valid reasons with a view to truly reflect the financial position of the society;(11)Notwithstanding anything contained in the preceding sub-sections, the Director of Co-operative Audit shall have power to re-examine or re-verify the audited accounts of any co-operative society pertaining to any year and incorporate the lapses observed during such re-examination or re-verification in the next audit report to be issued.]
