NGO AUDIT

1. Board Meetings

A. Verification of Board Meeting Minutes

• Obtain and review minutes of all board meetings held during the reporting period.
• Ensure minutes are complete, accurate, and properly signed by the chairperson.

B. Compliance with Quorum & Meeting Frequency

• Review the bylaws or governing documents for quorum requirements.
• Confirm that quorum was met in each meeting.
• Ensure that meetings were held as per legal and organizational policy requirements.

2. Statutory Compliance

A. Foreign Contribution (Regulation) Act (FCRA) Compliance

• Verify FCRA registration status and validity.
• Ensure FCRA funds are properly utilized and reported per regulations.

B. Compliance with Labor Laws (EPF, ESI, Minimum Wages)

• Review employee records for compliance with EPF & ESI contributions.
• Ensure employees receive at least the minimum wage as mandated by law.

3. Legal and Tax Compliance

A. Income Tax Act Compliance (Section 12A & 80G)

• Confirm Section 12A registration for tax exemption.
• Verify Section 80G registration for donor tax benefits.

B. Timely Filing of Returns & Reports

• Verify Income Tax Returns (ITR), FCRA returns, and other statutory filings.
• Confirm timely GST registration and compliance, including return filings and tax payments.

4. Financial Management

A. Budgeting & Financial Planning

• Review annual budget and financial plan for completeness and feasibility.
• Compare actual expenditures vs. budgeted amounts and investigate variances.

B. Accounting Records

• Ensure maintenance of cash books, ledgers, receipts, and payment records.
• Verify bank statement reconciliations and resolve discrepancies.

C. Internal Controls

• Assess control mechanisms for cash handling, procurement, and inventory.
• Review authorization processes to ensure expenditures are properly approved and documented.

5. Audit Reports

A. Review of Previous Audit Findings

• Examine the previous year’s audit report and management response.
• Verify that audit recommendations have been implemented.

B. Auditor Appointment & Independence

• Confirm that the auditor is qualified, independent, and compliant with regulations.

6. Financial Statements

A. Balance Sheet Review

• Verify accuracy of assets and liabilities with supporting documents.
• Ensure proper classification and valuation of fixed assets.

B. Income & Expenditure Statement

• Confirm accuracy and completeness of income and expenditure records.
• Ensure all expenses are aligned with the NGO’s objectives and properly documented.

C. Cash Flow Statement

• Verify that the cash flow statement aligns with actual inflows and outflows.
• Ensure correct classification of cash flows (operating, investing, financing).

D. Notes to Accounts

• Review disclosures of accounting policies and contingent liabilities for completeness.

7. Grants and Donations

A. Grant Management

• Verify receipt and utilization of grants as per donor agreements.
• Ensure compliance with donor reporting requirements.

B. Donation Records

• Confirm proper documentation of donations received, including donor details.
• Verify issuance of 80G certificates to eligible donors.

8. Project Management

A. Project Implementation & Monitoring

• Review project proposals, budgets, and timelines.
• Compare actual progress vs. planned objectives.
• Verify documentation and reports on completed activities and milestones.