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GS Paper II- Functioning of the Executive and the Judiciary Ministries and Departments.

SC orders audit of 30 lakh NGOs

What’s Happening-
The Supreme Court directed the government to audit nearly 30 lakh NGOs which received public funds but consistently failed to explain how they spent the money.
writ petition filed by advocate Manohar Lal Sharma.

Key judgement details:

  • SC ordered that any NGO found to have cooked its books or indulged in misappropriation should be subject to immediate criminal prosecution.
  • Besides, the government should initiate civil recovery proceedings against such rogue organisations.
  • The Supreme Court demanded that the government file a compliance report by March 31, 2017.
  • The apex court ordered that by next hearing, the government should have framed guidelines for their accreditation, the manner in which these organisations should maintain their accounts and the procedure for recovery in case they fail to submit their balance sheets.
  • Despite the large amounts drawn from State coffers and given to NGOs, the government seemed to be unaware that General Financial Rules, 2005 mandate a regulatory mechanism for them.
  • This is your [government] money and you have no record of how they [NGOs] use it?” Chief Justice Khehar asked the government.

Background-
CBI submitted that only about three lakhs of about 32 lakh NGOs file their balance sheets with the government.

Final word: SC
There can be no doubt that the amounts disbursed by CAPART is public money and needs to be accounted for.
The only exercise so far against those who have failed to file their balance sheets is blacklisting.
It is necessary to start criminal and civil action by the Central government and CAPART.
Council for Advancement of People’s Action and Rural Technology (CAPART).

Sources-The Hindu, The Indian Express. Page 17