NEW DELHI: The Foreigner’s Division of the Union Ministry of Home Affairs (MHA) has announced that Chartered Accountants (CAs) filing audit returns on behalf of NGOs must specify whether the organization has violated provisions of the Foreign Contribution (Regulation) Act, 2010 (FCRA), officials said on Sunday.The officials said that the provisions of the FCRA mandate a CA to certify if an association or NGO has utilised foreign contributions received for the purposes it was registered for and the annual statements are to be uploaded on the FCRA portal.In the notification dated December 31, 2024, a copy of which is with the TNIE, the foreigners’ division said, “CAs will have to mention the name, email address, registration number of the auditor while issuing the audit certificate”.It further said, “CAs will have to specify if the NGO has violated the provisions of FCRA, 2010 or rules made there under or notifications issued thereunder mentioning the details of the violations.” The auditors will also have to specify if the NGO has not made any violation, it added. “I have examined all relevant books and records, including the items mentioned in column 8 of FC-4, and to the best of my knowledge and belief (name of the person/ association) has not violated any provisions of the FCRA, thereunder or notifications issued thereunder.” The notification amends the Foreign Contribution (Regulation) Rules, 2011.However, commenting on the new rules as notified, a member of an NGO said this would make it more difficult for voluntary organisations, which are critical of the government, to find auditors to file returns on their behalf.Earlier in 2021, the MHA advised chartered accountants to ensure that foreign funds are received and utilised by NGOs “within the four corners of law”.However, the current notification allows NGOs an option to carry forward the unspent part of permissible administrative expenses in a financial year to the immediately succeeding financial year. As per the rules, the FCRA allows only 20 per cent of foreign funds to be spent on administrative expenses in a designated bank account with the State Bank of India (SBI).It is to be noted here that since 2015 the FCRA registration of more than 16,000 NGOs have been cancelled on account of “violation” of one or the other provisions of the Act.Incidentally, the FCRA registration is a mandatory requirement for voluntary organisations to receive donations or funds from overseas entities.
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