Social Audit for Charities is as Essential as the Honourable Intent
Social charity organisation usually begin humbly from missionaries and philanthropic individuals. When there is a rising need to cater to the needy and poor, charity organisations are formed. In India, voluntary works are somewhat part of their belief and culture. For every human being, there is a smidge of empathy, thus leading to providing whatever necessary to the needy. But, charity organisations in India are in abundance. There are local non-governmental organisations (NGOs) and international non-governmental organisations (INGOs). Generally, the latter is an established and registered organisation and complies with the local laws as necessary. The local NGOs, however, has plenty of room to improve. This is especially in terms of obtaining charity social audit services in India.
The Laws That Governs
Charity bodies in India are commonly known either as a trust, society or a company with charitable components. The trust version charity body can be a private trust or public trust. Both organisations comply with the Trusts Act. Additionally, varying states may have distinct regulation on charitable trusts. A society is an association of made up of a minimum of seven-person wanting to achieve a common purpose. The establishment of societies must comply with the Societies Registration Act, 1860. Another charity body that is common in India is Section 8 Company. When charities like these are registered under the Companies Act 2013, it complies with the requirement of filing forms, reporting of audited accounts and other relevant resolutions. Although charity bodies may be governed by respective laws and the need to submit financial reports, some charity is in the clouds.
Charity Social Audit
As such, organisations must adhere to auditing of their documents. Verification social charities are different than auditing of corporate entities or business enterprises. With the profit-oriented organisation, there is substantial documentation. As for NGOs, most are not profit-oriented. Hence, funds are channelled into the organisation from various sources. Administration of these NGOs should have detailed documentation for each inflow as well as outflow. Otherwise, the charity social audit would have to make time for the auditors’ questioning sessions. Auditors, on the other hand, must seek to customise their approach for every NGO. The following are some factors auditors could have to take note before conducting the audit:
Get To Know The Client
The client, in this case, the organisation may have had a rough start and now seeking to mend things to become better. Please make time to understand the organisation structure, how it functions, and the needs to comply with the laws.
No Hidden Agenda
Charities are seldom put under the radar. Hence, it is vital to find out if the client may have a hidden or secondary agenda to its primary function. Auditors are obliged to be stringent when conducting audits even for social charities. Empathy is not a requirement for auditors conducting charity social audit services in India.
Revenue and Expenditure
Less organised charities may have their revenues and expenditures all over the place. But as long as there is a document to support it, auditors can better address matters as and when necessary.
