FCRA makes it compulsory to take DARPAN ID

As per FCRA latest notice, all the NGOs now need to acquire DARPAN Unique ID. This it the portal offered by NITI Aayog in association with National Informatics Center.

Also, it is mentioned in the notice, that all the all FCRA related services like Registration, Renewal, Filling of Return etc.. shall require DARPAN Unique ID.

Public Notice for DARPAN ID

How to Register for DARPAN ID

Step 1 – Login

http://www.ngodarpan.gov.in/

Click on “Register” button on right corner.

Step 2 – Enter Details

You have to give details of your organization – NAME, MOBILE and EMAIL. OTPs will be sent to given Mobile number and email.

Step 3 – Verify OTPs

Once you submit, OTPs will be send to your email and mobile. Also, here you need to provide PAN of your Organization and Name of mentioned in the PAN.

Step 4 – Create Password

Once your PAN is verified, Unique ID is generated and you need to create your own password for the login. Thereafter, it re-direct you to login page

How to give this Unique ID to FCRA

Once you get the Unique ID, you need to login to your FCRA account, where a pop up form appear, you need to provide Unique ID there. Refer our last blog.

FCRA Update – Key Functionaries Detail

Recently FCRA department has update the website and now when you login to your account, a page is loaded where it is asking for details regarding key functionaries and Darpan ID. Look at the below screenshot :

Process :

Step 1 – visit https://fcraonline.nic.in/home/index.aspx

Step 2 – Click on “Intimation on Quarterly Receipt” tab.

Step 3 – Give details of your userid and password

Step 4 – A page given in the above image is loaded. Fill all the information regarding members.

  1. Email ID of Member
  2. Mobile of Member
  3. Aadhar of Member
  4. PAN of Member

Step 5 – Fill information regarding Darpan ID

5. Darpan ID

6. PAN of Organization given in Darpan Registration

For more information on what is Darpan ID and how to create it, click below link.

http://ngodarpan.gov.in/

 

Update – FCRA department has issued show cause notice

Recently, FCRA has issued show cause notice to 5992 NGOs asking for reasons why their FCRA registration may not cancel.

Earlier in this May, FCRA has issued list of organizations, who have not filled FC returns online for previous year or years. And give them opportunities to update the same as early as possible. Also after that, 5992 organizations have not updated their FC returns and thus final show cause notice issued to them.

Download Notice from here.

Download List of 5992 NGOs from here.

It is also mentioned that, these organization have to give their reply in email to fcrarenewal-mha@gov.in within 15 days.

 

 

FCRA : One and Final Chance to update NGO’s old Returns

Final opportunity for those NGO’s who missed to file FC returns from 2010-11 to 2014-15. FCRA department has allowed to file your FC return of old years without any penalty. It is clearly stated in the notification, that this is the one and final chance for NGOs to update their returns if fail to file.  Also, with the notification, list of 18523 NGOs, who have not filled FC return (or may be filled in paper format and not updated by FCRA department.) is attached with the details of all the years.

What you should do?

Go through this list and search your name with registration number and check the years where it is stated “No”. See below image.

How to file old returns?

Once you find out, which returns are pending or not updated to FCRA website, you need to file return online in form FC4.

Step – 1 Click on FC-4 Tab on left side of https://fcraonline.nic.in/home/index.aspx website
Step -2 Login with your ID and Password
Step -3 Click on the year in which return is pending. See below image in which for year 2013-14  is pending

Step -4 File FC-4 return and upload necessary documents and submit final return.

Video

Check this video on how to file FC4 return.

 

How to get CSR Funding for your NGO ?- Program Quality

How to get CSR funding for your NGO? – PART 1

We have seen in last blog here (How to get CSR Funding for NGO?) , what NGO should not do to get CSR funds. Let us see now what NGO should do to get CSR funding. How your should prepared your NGO for CSR funding. One of the important aspect is how effectively your NGO implement the given project i.e. Program Quality.

Program Quality

Obviously, as a Chartered Accountant, I can not suggest about how to implement program effectively, but yes, I can suggest on how to maintain documents in such a manner, so that it can easily draw an idea about NGO working.

Past and Current Programs

Programs, which are completed in last five years should have been documented properly. There has to be proper file for each program containing all the documents starting from agreement, budget, all financial utilization certificates, quarterly reports, photographs and note on impact of the program. I suggest to have a “Program Closure Card”, a brief summary of Program. Please see below example.

This is illustration how Program Closure Card look

This is illustration how Program Closure Card look

 

Future Program

Every company ask full project plan for which you need CSR fund. Thus, NGO should have keep ready such kind of different project plans – mainly divided in two parts, short term plans and long term plans. Many CSR companies even provide funding for ongoing project or contribute in Long Term Project Plan of NGO.

Coming Soon – How to get CSR funding for your NGO? – PART 3

 

How to get CSR funding for your NGO?

There is no straight forward answer to this question – how to get CSR funding? However, one thing is very sure that there is huge funds under CSR, which all the eligible companies should invest in communities. You can check amount spent by companies under CSR in this official website of Ministry of Companies Affairs – Here

So, today, I am not discussing here how much funds available in CSR and which companies are liable  to spare this fund.

Let us discuss from the view point of NGOs. How one grass-root NGO can get CSR funding ? In my opinion, NGOs should make efforts to reach out to CSR company rather than wait to be found by them.

So, before going into details on how a grass-root NGOs have to be prepared themselves for CSR funding and how to approach companies, let us first see what an NGO should not do to get CSR funding.

Don’ts – CSR Funding

 

1. Stay Away from Middle Man

Now days, you can found so many from this species called “Middle Man” . Stay away from this type of person who gives you guarantee to get funding in consideration of some “commission” or “cuts” or “payback” whether this person is your CA, friend, some funding agency employee or company employee. Just stay away from such middle man.

2. Routing of Funds

Another wrong practice, where company gives you CSR funds on a condition (of course unofficially) to route some portion of funds to the specific interested person or companies in the form of Salary, Fees or some procurement expenditures or by any other legal transactions by whatever name called. Though, speaking in legal terms, it may be correct, but still that will affect the credibility of your organization.

Do’s – CSR Funding

Before, approaching for funds to companies for CSR, NGO should do a self-evaluation, particular in the area of progarm implementation and control system. I have divided CSR funding process in three steps –

  1. Improve Program Quality
  2. Establish various Systems
  3. Approach Companies for CSR

Check out this chart –

We will discuss all the above steps in detail in the next part.

How to get CSR funding for your NGO? – PART 2

 

Draft Guidelines providing stringent regulatory mechanism for NGOs

The Centre filed in Supreme Court on Wednesday its draft guidelines providing stringent regulatory mechanism for NGOs. Earlier, in January 2017, famous lawyer for his PILs, Advocate Mr. Manohar Lal Sharma, filled a PIL to regulate the unorganized NGOs ecosystem in the country. SC had asked the Centre to prepare guidelines to regulate NGOs and Voluntary Organisations after finding that nearly 30 lakh of them were operating in India.

In its order, the Court noted that substantial funding is allowed for NGOs and voluntary organisations. 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. The court noted,

“There are 32 lakh NGOs out of which nearly 3 lakh are filing balance sheets. The respondents are not aware of the responsibility of audit in the General Financial Rules…There can be no doubt that the funds disbursed by CAPART [to NGOs] is public money and needs to be accounted.”

It, therefore, directed the Centre to complete the exercise of audit and submit a report by March 31 this year. It was directed,

“In case of non-compliance, it is essential to initiate civil and criminal action immediately after the completion of the exercise.”

Most importantly, the Court also directed the Centre to lay down guidelines/rules for accreditation of NGOs, the manner in which they shall maintain accounts and auditing of the same.

Centre proposes stringent guidelines for NGOs and VOs requiring all existing ones to register afresh online with Niti Ayog‘s NGO-Darpan. The guidelines submitted by additional solicitor general Tushar Mehta to a bench headed by CJI J S Khehar required them to register afresh if they wish to get govt grants.
It said NGOs will be provided unique ID and subjected to income tax act and foreign contribution regulations act. Centre’s draft guidelines say NGOs/VOs past track record and performance will be put under scrutiny before grant of accreditation. The NGOs and VOs getting govt funds are required to execute a bond to refund the amount with 10% interest if work not done.

However, detailed draft copies of guidelines not available so that can not comment on in dept detail.

SC asked amicus curiae Rakesh Dwivedi to submit his suggestions on the draft guidelines in two weeks.

FCRA Update – File FC6 Bank Account Details

Today, FCRA department has issued two lists of the organizations whose Bank Accounts are either not updated with FCRA or not as per Core Banking System format. These organizations are advised to update their Bank Accounts immediately in Form FC6.

As FCRA department is in the process of being paperless department, this is another step to have updated information regarding Bank Accounts of organizations.

List 1 Those NGOs, whose bank account detail is not updated as per core banking format

Before 4-5 years, due to core banking,  Bank Accounts are changed to 10 or 12 digits instead of 4 or 5 digits. However, many NGOs have not intimate this change to FCRA department.

Check out the list and your NGOs name here – List 1

List 2 Those NGOs, whose bank account details are not there with FCRA department

Some of the NGOs have change their bank account after registration and not intimated such change to FCRA department. Or simply, FCRA department do not have any information regarding NGOs bank Account.

Check out the list and your NGOs name here – List 2

Action to be taken

Above NGOs have to update their Bank details immediately by filling online form FC-6.

Watch Tutorial Video – How to update Bank Details in Form  FC6

 

For any further query, write in the below comment box.

 

Accounting of Grants for NGOs

Do you know how Grant is presented in your NGOs Financial Statements? As REVENUE or as LIABILITY ? This is one of the crucial question regarding accounting of Grants for NGOs. Generally, we depend on the Chartered Accountants on how our Financial Statements are prepared and presented. Sometimes presentation of Financial Statements become misleading and serve no purpose.

Today we learn how to do accounting of grants for NGOs which is more appropriate in present days.

Introduction – Accounting of Grants for NGOs

There is no clarity Inida regarding how grants should be presented. We have Indian Accounting Standard 20 which mainly dealt with  accounting of Government Grants and not grants for specific projects from Funding Agencies. However, considering Indian Accounting Standards #20 and US Statement of Financial Accounting Standard #117, we can derive following three methods of presenting Grants in the Financial Statements.

Option A – Grants treated as Revenue

Here, we consider Grants Received as Revenue of the current year whether it is related to current year or for next years. Thus, when two years project is sanctioned and total grant received in the first year only, we treat full grant as income of first year. See below image to understand presentation in Financial Statements.

 

In this method, you can see above that unspent grant of Rs 40 clubbed in Income and Expenditure Account as “Excess of Income over Expenses” . Due to this, it becomes difficult to know what funds lying in the I/E Account. Check out the Balance Sheet where I/E Account show Rs. 50 which comprise of Unspent Grants and Other Income.

Option B – Grant treated as Liability

Here, it assumes that, grants and funds received for specific project, is the liability of organization and not Income. Thus whatever grant received, whether for current year or next years taken to Balance Sheet and considered as Liability. Expense from such grant then deducted from the liability and net amount shown in the Balance Sheet. Checkout below how Financial Statements look if we treat Grant as Liability.

In this method, Balance Sheet present correct financial position. However, Income and Expenditure does not show much revenue except income earned by NGOs like Non Specific Donations and Interest Income.

Option C – Best of the above Two

Due to limitations of both the above method, we should presented financial statements as per this hybrid method using best of both the above methods. In this method, we consider that much revenue for current year which actually spent during the year and remaining balance transfer to next year as “Unspent or Unutilized Grant”. Lets have a look, how the financial Statements presented under this method.

In this method, Income Expenditure Account and Balance Sheet showing correct information and in self explanatory manner.

Conclusion

In India, there is no such proforma available in any Act regarding presentation of Financial Statements of NGOs. Thus as per my opinion it is advisable to follow accounting of grants for ngos as per option C – Hybrid method, which is self explanatory and showing correct information.

Note – In all the above three methods, presentation of Receipts and Payment Accounts would not change.

For any questions or query hit the below comment section.

Late Filling of old FCRA Return

Have you not filled your organization’s FCRA return or you have filled it in paper format since it is compulsory to file annual return online.

You can file late Return of FCRA by paying penalties.

Penalty for Late filling of FCRA return

As per notification S.O 2133(E) dated 16/06/2016, penalty for late filling of fcra return is as under in the simple manner. (For original notification click here)

Up to 3 from 31/12

2% of FC Amount Received or Rs. 10,000 whichever is less

3 Months to 6 Months from 31/12

3% of FC Amount Received or Rs. 50,000 whichever is less

6 Months to 12 Months from 31/12

4% of FC Amount Received or Rs. 2,00,000 whichever is less

12 Months to 24 Months from 31/12

5% of FC Amount Received or Rs. 5,00,000 whichever is less

24 Months to 36 Months from 31/12

10% of FC Amount Received or Rs. 10,00,000 whichever is less

Procedure for Filling Late FCRA Return

For late filling of FCRA return, you need to write an email to dirfcra-mha@gov.in from registered address of organization. You will most probably get the link to file late return of fcra and need to pay the above penalty.