Supreme Court pulls up Centre for no mechanism to monitor NGO funds

NEW DELHI: The Supreme Court on Tuesday ordered Modi government to undertake the massive exercise of auditing over 30 lakh NGOs that have received government funds but failed to explain how it was spent.

The court also asked the government to recover these funds and take criminal action in cases in which it has been misspent. NGOs and voluntary organisations receive over Rs 9000 crore by way of grants from various ministries.

But only 3 lakh odd NGOs among 33 lakh across India file balance-sheets or expenses with the ministries. These include funds disbursed by Capart, an autonomous body, under the rural development ministry.

A bench led by Chief Justice of India J S Khehar also directed the Centre to put in place a mechanism to ensure timely audit and checks to prevent misuse of public funds. Under the current dispensation, they are only blacklisted. 

Source: http://economictimes.indiatimes.com/news/politics-and-nation/supreme-court-pulls-up-centre-for-no-mechanism-to-monitor-ngo-funds/articleshow/56439451.cms

SC-LD NGO 2

Additional Solicitor General Tushar Mehta said there were

Additional Solicitor General Tushar Mehta said there were broadly three categories -- contribution received by NGOs from abroad for which there are regulations, funds received from local bodies/societies/trusts for which there is no auditing and thirdly, these bodies collect money from local people for which also there are no regulations.

"When you yourself are saying there are no regulations, then why have you not come out with the mechanism. Till now, there is no mechanism. Let a mechanism come and thereafter amicus curiae and you (ASG) will assist. We will see what can be done and what progress has been made in terms of regulation," the bench said.

"When government fund is disbursed, why dont you see what has happened to your money? It is public money. How can you do this with public money," the court asked.

The apex court also took note of the fact that an Under Secretary rank officer has filed the affidavit and asked the ASG to ensure that officer of the rank of joint secretary or additional secretary files the affidavit.

Amicus Curiae Rakesh Dwivedi said CBI has filed a status report showing how many NGOs have not filed the audit report and how many of them have not filed utilisation certificates.

"Huge amounts running into thousands of crores are doled out to these societies. There has been a case that many of them, after getting the grant, do not come back and they are merely blacklisted", Dwivedi said.

He said around Rs 9,000 crore has been disbursed to NGOs, societies, voluntary organisations from 2002-03 to 2008-09.

"Union of India has disbursed Rs 4,756 crore. States have disbursed Rs 6,654 crore. Rs 950 crore on an average has been disbursed per year", the amicus said.

He referred to a report of Asian Center for Human Rights and said that several projects did not achieve the target and there was no pre-funding apprisal by Council for Advancement of Peoples Action and Rural Technology (CAPART). (More) PTI MNL ABA RKS AG ARC

Source: http://indiatoday.intoday.in/story/sc-ld-ngo-2/1/854200.html

SC: Audit govt money given to NGOs

New Delhi, Jan. 10 (Agencies): The Supreme Court on Tuesday grilled the government over its failure to work out a mechanism to monitor the public money that it gives to the 32 lakh NGOs, societies and voluntary organisations in the country.

A bench of Chief Justice J.S. Khehar and justices N.V. Ramana and D.Y. Chandrachud, upset that no regulatory mechanism has been worked out even six years after a public interest litigation was filed in the matter, pointed out that the government is doling out public money without any audit.

The court was told that the Union government and states have disbursed around Rs 9,000 crore to these societies in the period between 2002 and 2009, and that the government merely blacklists an NGO or non-governmental organisation if it does not come back with audited accounts.

The bench said “mere blacklisting” of these organisations would not suffice and civil and criminal action should be initiated for misappropriation of public money received by them from various government departments.

It directed the competent authority to come out with guidelines and rules for a regulatory mechanism by March end “under any circumstances”.

The bench noted that such action must be taken by the Centre and CAPART, which comes under the Ministry of Rural Development, which has been instrumental in granting the funds.

”We consider it appropriate to direct the Centre and CAPART to complete the exercise of auditing and submit the report by March 31, under all circumstances,” the bench said.

”There can be no doubt about the fact that the amount disbursed by CAPART/ other government departments is public money and must be accounted for,” it said, adding that so far, the only exercise or action carried out in case of non- submission of balance sheet/ returns is “merely blacklisting”.

In case of non-compliance of auditing and other rules, necessary civil and criminal action has to be initiated where public fund is received from CAPART or government departments and misappropriated, it said.

The apex court said that, on next date of hearing, April 5, it expected the Centre to place before it the guidelines and rules for accreditation of voluntary organisations and detailing the manner in which they shall maintain their accounts, conduct the audit, the process of recovery and methodology of recovery of the amount in case of misappropriation and criminal proceedings.

Additional Solicitor General Tushar Mehta said there are three sources of funds for NGOs: donors abroad (for which there are regulations), from local bodies/ societies/ trusts (for which there is no auditing) and local people (for which also there are no regulations).

To this, the bench asked: ”When you yourself are saying there are no regulations, then why have you not come out with the mechanism.”

“Till now, there is no mechanism. Let a mechanism come and thereafter amicus curiae and you (ASG) will assist. We will see what can be done and what progress has been made in terms of regulation,” the bench said.

”When government fund is disbursed, why don't you see what has happened to your money? It is public money. How can you do this with public money,” the court asked.

Amicus curiae Rakesh Dwivedi said the Central Bureau of Investigation has filed a status report showing how many NGOs have not filed the audit report and how many of them have not filed utilisation certificates.

”Huge amounts running into thousands of crores are doled out to these societies. There has been a case that many of them, after getting the grant, do not come back and they are merely blacklisted”, Dwivedi said.

He said around Rs 9,000 crore has been disbursed to NGOs, societies, voluntary organisations from 2002-03 to 2008-09.

”Union of India has disbursed Rs 4,756 crore. States have disbursed Rs 6,654 crore... Rs 950 crore on an average has been disbursed per year”, the amicus curiae said.

He referred to a report of Asian Center for Human Rights and said that several projects did not achieve the target and there was no pre-funding appraisal by CAPART or the Council for Advancement of People's Action and Rural Technology (CAPART).

Source: https://www.telegraphindia.com/1170110/jsp/frontpage/story_129544.jsp#.WHcdItJ97IU

Supreme Court to hear plea seeking direction in NGO funding case

The CBI records filed in the Supreme Court in the case show that only 2,90,787 NGOs file annual financial statements of a total of 29,99,623 registered ones under the Societies Registration Act.

The Supreme Court on Tuesday will hear the plea filed by apex court lawyer Manohar Lal Sharma seeking a direction in the NGO funding case. Earlier, noting that NGOs get “mind-boggling” funds and it has become a “major problem,” the apex court said that it will consider asking the Law Commission of India to bring an effective law to regulate the flow of money to a total 29.99 lakh NGOs functioning in the country.

The Bench, also comprising Justice A.M. Khanwilkar, asked senior advocate Rakesh Dwivedi to assist the court in finding a way to deal with the issue and, if necessary, refer to the Law Commission. Advocate M.L. Sharma, the petitioner in the case, submitted that 80 per cent of the NGOs get foreign funds. He claimed that “retired government employees and politicians run these NGOs drawing on their influence.”

The CBI records filed in the Supreme Court in the case show that only 2,90,787 NGOs file annual financial statements of a total of 29,99,623 registered ones under the Societies Registration Act. In some States, the CBI said the laws do not even provide for the NGOs to be transparent about their financial dealings. In the Union Territories, of a total of 82,250 NGOs registered and functioning, only 50 file their returns.

Source: http://indianexpress.com/article/india/supreme-court-to-hear-plea-seeking-direction-in-ngo-funding-case-4467310/

SC directs Centre to take swift action against defaulting NGOs

NEW DELHI: In what came as a setback, Supreme Court (SC) on Tuesday directed governments to go after defaulting NGOs and submit compliance report to it by March 31.

A bench headed by Chief Justice of India (CJI) J S Khehar pulled up Centre for not putting in place a regulatory mechanism to monitor the funds and their utilisation by NGOs, societies and voluntary organisations and said, "Government should initiate civil and criminal action against NGOs that have misappropriated public funds."

The court asks Government to detect and punish this NGOs which have taken public funds and not submitted utilisation certificates.

CBI informed the SC that there are nearly 33 lakh NGOs in India and of which only 3 lakh filed audited accounts with authorities.

The bench also asked Centre to frame rules and guidelines to accredit NGOs, audit them and take action if they allegedly misuse public funds.

During the hearing, CJI directed the Rural Development Secretary and Director of Council for Advancement of People’s Action and Rural Technology (CAPART), which comes under Rural Development Ministry and told them that the government will not file affidavits in court signed by an officer below Joint Secretary rank and observed, "It is seen that government file affidavit signed by under secretaries who do not know anything about the issue."

The bench also asked the officials to inform it whether CAG audit of NGOs post 2009 was carried out or not. The bench also asked whether General Financial Rules 2005 made by Ministry of Finance were complied with or not. The court was hearing a petition filed by advocate M L Sharma, seeking monitoring of funds given to NGOs and their utilisation by them.

Source: http://www.newindianexpress.com/nation/2017/jan/10/sc-directs-centre-to-take-swift-action-against-defaulting-ngos-1558160.html

SC Directs Centre to Prosecute NGOs Failing to Explain Expenditure

New Delhi: Cracking the whip on over 33 lakh NGOs receiving government funds, Supreme Court of India has directed the Centre to prosecute NGOs which failed to explain how the funds were spent.

The apex court also directed the government to carry out an audit of all the NGOs getting government funds by March 31, 2017, and put in place a regulatory mechanism to monitor the funds given to these NGOs.

There are about 33 lakh NGOs which receive funds from the government and of this, only about 3 lakh NGOs are regular in submitting accounts to the parent ministry of their expenses -- rest are in default.

Top court's order seeks to target these defaulters. NGOs receive over Rs 9,000 crore by way of grants from various ministries.

The court has ordered the government to go beyond than "just regular blacklisting" of the defaulting NGOs and initiate recovery proceedings from the erring NGOs.

This order comes on a PIL that initially raised questions on social activist Anna Hazare-run trust in Maharashtra.

The PIL levelled allegations against Hazare and his associates that they had floated Hind Swaraj Trust in Ralegon Sidhi in 1995, with a capital of just Rs 500 and received Rs 45 lakh from the Centre in 1994-95, even before the trust was registered.

In 1995-96, the trust received another grant of Rs 65.85 lakh, this time from the state government.

But the top court expanded the scope of the petition and has now passed orders covering all NGOs getting government funds.

Source: http://www.news18.com/news/india/sc-directs-centre-to-prosecute-ngos-failing-to-explain-expenditure-1334058.html

SC to Govt: Make NGOs accountable for funds

A bench led by J S Khehar regretted that there was no regulatory mechanism to make NGOs answerable on utilising funds while the government pumped in public money.

SEEKING ACCOUNTABILITY of NGOs that receive funds from public exchequer, the Supreme Court on Tuesday asked the central government to put in place a regulatory mechanism and resort to criminal prosecution of such organisations in cases of misappropriation.

A bench led by Chief Justice of India J S Khehar regretted that there was no regulatory mechanism to make NGOs answerable on utilising funds while the government pumped in public money.

“How are you not bothered about how they (NGOs) spend the money? After all it is public money and they must be made accountable. You cannot let it get squandered,” said the bench, seeking a comprehensive mechanism within three months to audit and scrutinise NGOs’ accounts.

It said that mere blacklisting the NGOs would not suffice but there was a need to include criminal action for misappropriation and swindling of funds disbursed to NGOs for certain purposes.

“The government has to regulate it. You have to know how they use this money? It is not just your money but it is public money… there can be no doubt that the amount disbursed to NGOs is public money and has to be accounted for,” said the court.

Additional Solicitor General Tushar Mehta agreed with the bench that a new regime should be put in place to regulate NGOs and sought some time to revert. The court, however, pointed out that provisions of CAG auditing and scrutiny under the General Financial Rule, 2005 were already operating in this area. And that the competent authority will now have to come out with guidelines and rules for a regulatory mechanism by March-end.

The bench noted that such action must be taken by the Centre and the Council for Advancement of People’s Action and Rural Technology (CAPART), a wing under the Ministry of Rural Development which has been instrumental in granting the funds.

“We consider it appropriate to direct the Centre and CAPART to complete the exercise of auditing and submit the report by March 31, under all circumstances,” the bench said.

In case of non-compliance of auditing and other rules, necessary civil and criminal action has to be initiated where public fund is received from CAPART or government departments and misappropriated, it said.

The court said on next date of hearing on April 5, it expected the Centre to place before it the guidelines and rules for accreditation of voluntary organisation and detailing the manner in which they shall maintain their accounts, conduct the audit, the process of recovery and methodology of recovery of the amount in case of misappropriation and criminal proceedings.

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NGOs need to register with NITI Aayog for grant-in-aid

NEW DELHI: It is now mandatory for all NGOs and voluntary organisations (VOs) to register with NITI Aayog to receive grant-in-aid from ministries or departments of the central government, Parliament was informed today.

"It is mandatory now for all NGOs/voluntary organisations to sign up on NGO-DARPAN portal to obtain a system-generated unique ID before applying for grant under any scheme of central government or ministries," Minister of State for Ministry of Planning Rao Inderjit Singh said in a written reply to Lok Sabha.

The minister further said that as on November 24, a total of 81,353 NGOs/VOs have signed up on NGO-DARPAN portal which has has been redesigned.

Replying to a separate query, Singh said the government has earmarked Rs 150 crore for Atal Innovation Mission (AIM) in 2016-17 budget estimate.

Source: http://www.newindianexpress.com/nation/2016/nov/30/ngos-need-to-register-with-niti-aayog-for-grant-in-aid-1544227.html