New Delhi: The Supreme Court on Tuesday directed the Central government to audit the accounts of more than 32 lakh NGOs and voluntary organisations which are functioning in the country and receiving central and state government funds to the tune of over Rs 11,000 crore.
Hearing a plea seeking monitoring of public funds given to the NGOs, the court directed the government and Council for Advancement of People’s Action and Rural Technology (CAPART) to complete the audit by March 31 and submit a report to the court.
The apex court said that funds allotted to the NGOs by CAPART and other departments is public money and all of it must be accounted for.
Giving this direction on a PIL filed by advocate M.L. Sharma in 2011, a Bench of Chief Justice J.S. Khehar and Justices N.V. Ramana and D.Y. Chandrachud directed the government to submit its report to the Court regarding the same. The Bench also directed the Centre to frame guidelines with respect to accreditation of NGOs, maintenance of their accounts and auditing, procedure for prosecution if there was misuse of the funds. The Bench said mere blacklisting of NGOs who do not file statements will not suffice but also action like criminal proceedings must be initiated for misappropriation of funds.
Advocate Sharma had argued that NGOs are given crores of rupees but government had no mechanism as to monitor what they did with it and the NGOs who do not file returns are only blacklisted to be ineligible to receive funds for next year. The Bench passed this order after hearing counsel for the parties and also took into consideration the report of amicus curiae Rakesh Diwedi.
In its order, the Court noted that substantial funding is allowed for NGOs. Further, Rules 210-212 of the General Financial Rules, 2005 provide for a regulation mechanism for NGOs, though the respondents are not aware of the same.
While hearing a petition the court took very serious view of Central and state governments granting thousands of crores of rupees to NGOs but they are not submitting certificates for utilisation of funds received.
Between 2002 and 2008, the Centre had granted Rs 4,756 crore to the NGOs, while state governments had given Rs 6,654 crore. The CBI which conducted a probe informed the court that there are over 32 lakh NGOs in India out of which 3 lakh NGOs have filed audited accounts.
