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Accounts Audit of a Housing Society | Neighbium
Accounts Audit of Housing Society
It is commonly observed that many societies have not carried out Audits of Accounts for previous years. Now, as per Model Bye-Laws, it is mandatory to audit the accounts and approve the same on or before, 30″ of September. Bye-Law no. 95 (b) states that one of the important businesses to be transacted at the AGM is to receive the Annual Report of the Managing Committee activities and on its working in the preceding co-operative year, together with the Statement of Account in Form ‘N’ prescribed under Rule 62(1) of the Rules, showing Income and expenditure during the preceding co-operative year the Balance Sheet at the close of the preceding co-operative year.
Thus, if the audit is not done for the previous years, then it is the responsibility of the Managing Committee members to see that accounts of all previous years are audited after completion.
Let us now see how to update backdated accounts and audit the Accounts
Collection of the following documents (year-wise) in a separate box file must be done with separate dividers used in individual files while file these documents –
- Cash Vouchers
- Updated Petty Cash Register
- Cheque Payment Vouchers with supporting bills filed date-wise
- Cheque Counterfoils specifying for what payments have been made.
- Pass Book or Bank Statement of all banks updated to date.
- Bills raised to the members and details of payment received against the bills.
- Fixed Deposit (FD) Receipts of all (i.e. matured FDs, renewed FDs, new FDs, and Premature FDs).
- Last Copy of Audited Balance Sheet with Income & Expenditure Statement.
- Interest Accrual Certificate and certified copy of bank balance as on 31st March from all the banks.
- Provision of expenses for the month of March. Payment of these expenses is made in the next financial year (e.g. electricity, water, security. salary, etc.)
NOTE: In this way, prepare separate files for each financial year and submit them for accounting and auditing.
Accounting tips for timely and regular audit
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- Make vouchers with proper heads to avoid suspense in maintaining accounts. Expenses incurred by the Society can be debited to various heads. A sample of the heads and description to be written in the voucher can be as given below:
| S.N. | Name of the Head | Description |
| 1 | Repairs & Maintenance A/c | Paid for purchase of cleaning items |
| Paid for labor charges for cleaning work. | ||
| Paid for any other repair work | ||
| 2 | Maintenance Electricals A/C | Paid for purchase of electrical items (tube light, bulb, switch) |
| Paid for labor charges for electrical repairs | ||
| 3 | Maintenance Plumbing A/C | Paid for purchase of plumbing items (tap, pipe) |
| Paid for labor charges for plumbing work | ||
| 4 | Salary A/c | Paid for the payment of sweeper’s salary for the month of April 2015. |
| 5 | Misc Charges/ General Expenses A/c | Paid for the purchase of clock, torch |
| 6 | Staff Welfare NC | Paid for purchase of any items for staff like tea, uniform, umbrella, raincoat, etc. |
| 7 | Maintenance Lift A/c | Paid for Annual Maintenance Charges for repairing and maintenance of lift. |
| 8 | Water Tanker Charges A/c | Paid for the supply of water tanker |
| 9 | Printing & Stationery A/c | Paid for purchase of stationery items photocopying, typing, binding, etc. |
| 10 | Postage & Telephone A/c | Paid for the courier, Registered posts, Advertisements, phone call charges, telephone recharge |
| 11 | Conveyance A/c | Paid for the Auto fare for e.g: From Laxmi Road to Camp (for the purpose of a survey of Accounting firms) (write purpose to be precise) |
| 12 | Legal & Professional charges A/c | Paid for legal consultancy charges/ Accounting charges / Audit charges |
| 13 | Cultural Expenses/ Festival Expenses | Paid for any expenses incurred for the Ganpati festival |
| 14 | Meeting Expenses A/c | Paid for any expense related to Annual General Meeting / Managing Committee Meeting for e.g. hiring of chairs shamiana/printing meeting pamphlets |
| 15 | Security charges А/с | Paid for security services provided for a period of one financial year. |
Always write the purpose of the expenditure in the voucher and try to be precise to keep transparency in the account. The description should be to the point and in short. Such a system helps accountants and auditors to put each and every expense under an appropriate head.
- It is always advisable to make vouchers immediately while making cash or cheque payment/s and make a habit to make vouchers before making payments.
- Petty Cash Register should be maintained and updated on a regular basis. The actual cash balance should match with the Petty Cash register as on a particular date which will avoid negative cash balance.
- Vouchers should be duly signed by a minimum of two Managing Committee members. Supporting bills should be properly attached. It is also essential that vouchers are written in a readable handwriting.
- To keep all used slip books and cheque books properly filed.
- Keep all records related to the Society in order in a separate file.
- Deduct TDS if applicable and deposit TDS deducted cheques on or before the 7th of the consecutive month and file TDS returns quarterly.
- To update your accounts regularly and to make bills monthly / quarterly, take the services of accountants who will keep your accounts updated in a systematic way. This will help to get any ledger as and when required. Like any particular member’s ledger or any party’s ledger or any ledger related to a particular expense, a Bill Summary Report, and Income and Expenditure Statement may also be maintained. It is always beneficial to keep such reports handy.
If an Account is regularised, then the Managing Committee members can divert their attention to other important matters related to the welfare of the Society. Hence, updating and maintaining previous records becomes an essential task for the Committee members.
