Supreme Court orders audit of 32 lakh NGOs on govt funds

New Delhi: The Supreme Court on Tuesday directed the Central government to audit the accounts of more than 32 lakh NGOs and voluntary organisations in the country that are receiving government funds which, spread over five years, amount to Rs 11,000 crore.

Hearing a PIL seeking monitoring of public funds given to 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 NGOs by CAPART and other departments is public money and all of it must be accounted for. Giving this direction on a plea 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 also directed the Centre to frame guidelines with respect to accreditation of NGOs, maintenance of their accounts and auditing, procedure for prosecution if there’s any misuse and misappropriation of funds.

The Bench said mere blacklisting of NGOs who do not file annual statements will not suffice, action must be initiated, including criminal proceedings for misappropriation of funds, and civil action for recovery  of given funds. Advocate Sharma had argued that NGOs are given crores but there is no mechanism to monitor what they did with the funds. And the NGOs which do not file returns are only blacklisted to be ineligible to receive funds next year.

The court took a very serious view of the facts that while Central and state governments grant thousands of crores to NGOs, the voluntary organisations do not submit certificates for utilisation of funds received.

Between 2002 and 2008, the Centre had granted Rs 4,756 crore to NGOs, while state governments gave Rs 6,654 crore. The CBI, which conducted a probe, informed the court that there are over 32 lakh NGOs in India, of which only three lakh NGOs have filed audited accounts.

The bench directed the matter to be listed for further hearing in April, after receipt of audit report by the government.