Rc.No.
538/2011-AA4 Date: 11-07-2011.
Sub: Audit- Quality Audit of Cooperative societies by
departmental auditors -Certain aspects to be ensured - Regarding.
The District Cooperative Audit Officers in the
state are well aware that, in recent times, it has been brought to the notice
of the Government and as well as the Department that the Departmental Auditors
are not rendering quality audit. Certain instances as mentioned below have been
pointed out by M/s Prem Gopal & Co. Chartered Accountants who were
authorized by monitoring committee to verify the audited accounts of the PACS
from the year 2004-2005 to 2009-2010.
1. The DCCB Borrowing A/C mentioned in the FAR was at
variance with the account at the DCCB branches.
2. The loans and advances ale in the balance sheet was at
variance with that of the ledger abstracts arrived from the loan ledgers of the
PACS.
3. Certain adjustment entries were passed at the instance of
the auditor in the cash book / Day Book of the PACS without supporting
vouchers. The figures in various heads of a/cs adopted in the FAR were at
variance with the figures recorded in the General ledger of the society.
4. Certain heads of a/cs were adopted in the FAR without
recording the same in the cash book / daybook and General ledger of the
society.
5. In certain societies General ledger was not maintained.
In view
of the above, all the Dept. auditors should follow the guidelines mentioned hereunder
to improve the quality of audit of all Cooperative Societies and uphold the
image of Department.
1. The differences in opening balance of DCCB borrowing a/c with that of DCCB Branch figures as on 1-4-2010 shall be segregated and kept in
a suspense ale as ''suspense a/c differences in DCCB branches a/c" in
Sundry creditors /Debtors as the case may be and necessary provision has to be
created if it is kept in sundry debtors. The figures have to be adopted to the
FAR only on recording necessary entries in daybook and General Ledger by the
society. From the year 2010-11 on-wards the borrowing ale of the society shall
tally with that of the DCCB branch. For this, the Auditors are instructed to reconcile
the A/Cs duly obtaining the extracts of relevant accounts and confirmation certificates
from the DCCB.
2. The figure arrived in the statement of Abstract of ledger
A/Cs (DCB of loan) in respect of members loans and Advances Ale shall tally
with the figure mentioned in statement of assets. If there is any difference in
opening balance as on 01-4-2010, that difference is to be segregated and kept
in "suspense A/C Diff., in member loans & Advances A/C" in sundry
Debtors/Creditors and if it is kept in sundry debtors-necessary provision is to
be created for the difference. These figures
have to be adopted to the FAR only on recording necessary adjustments entries
in the Day Book/ General ledger by the society
3. The Auditor shall get confirmation for the amounts in SB
A/C current A/Cs and for other investments made by the society in various banks
and also draw Bank Reconciliation Statement for each account, wherever
necessary. The discrepancies, if any shall be reported through spl., report.
4. The Auditor shall neither suggest to the society to
record entries, in records of the society without any material evidence nor
Pass such entries and he shall not adopt such A/Cs in FAR.
5. The figures in various heads of accounts recorded in Day
Book and General ledger shall only be adopted in the financial statements of
the FAR as the daybook is the book of primary entry and the Balance Sheet in
FAR is derived only from the consolidated accounts recorded in the Books of
a/cs of the society.
6. The General ledger is the base for consolidation of each head of ale and as per Rule 59 A (XVI) of APCS Rules every society having working capital exceeding Rs. 20,000/- shall maintain the general ledger. The auditors shall not draw the financial accounts without proper General Ledger in the society.
The
DCAOs are once again instructed to realise the importance of above aspects in improving
the quality of audit especially the aspect of "Reconciliation of
Accounts" of the society. They should ensure before issuing any FAR that
all the accounts of the society were duly reconciled by the Auditor concerned.
Further the DCAOs are requested to submit a certificate every month on
"Reconciliation of Accounts in FARs issued by the DCAO" in the following
proforma in respect of PACS/FSCS audited by Departmental Auditors.
Name of the Dist: Month:
Certificate on
Reconciliation of Accounts in FARs of PACS
Certificate that all the accounts of the following mentioned PACS/FSCS were reconciled for the transactions of the audit year by the auditor concerned and the FARs were issued by me only after satisfying myself that necessary Reconciliation memos/ Confirmation certificates/ Bank Reconciliation statements were drawn and certified by the Auditors and enclosed to office copy of FARs and other copies of FARs.
S.No.
Name of the Name of the division FAR.
Name of the Date of
PACS/FSCS in which the society No.
Auditors/HQ issue.
HQs. Situated
The
above prescribed certificate shall be enclosed to the monthly progress reports
on audit programme and to be submitted on or before 10th of every month
regularly. This item will be reviewed at Head Office level every month.
Whenever higher officials from Head Office visits Districts, the above
furnished certificate will be cross checked, and action will be taken wherever
necessary.
