Procedure various with the Objective of the NGO. However general procedure can be-
- Knowledge Of The Business
- The documents available about the NPO’s activities: • Articles of incorporation • Regulations • Major contracts • Minutes of meetings • Brochures, newsletters or reports distributed to members or donors.
- NPO’s external environment: • Tax, legal, regulatory and contractual obligations • Manuals, periodicals, financial information about similar organizations.
- Sources for financial information are available: • Working papers of previous engagements • Annual reports • Budgets.
Accounting policies are adopted by
the organization for:• Capital assets • Donated materials • Donated services • Fund accounting • restricted assets and funds.
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NPO’s main sources of income
• Obtain information on major sources of funding and names of main contributors.
• Methods to collect donations.
Characteristics of the recipients of NPO’s services: • Physically challenged • Economically deprived • Homeless children, etc.
Related parties- The income tax exemption available to NPO would not be available on the portion of income or property if it is used for the benefit of certain specified persons (Section 13).
- Detail related with Budget
Go through the recent Budgets (get a copy of it) budgets does the organization have: • project /program budgets. (e.g. those relating to one activity or donor-funded project) • core costs (administration/overheads) budget. • comprehensive operating budget (organization-wide budgets consolidating all activities like the cost of programs, management, and fundraising ). • Others.[specify] – Who prepares the budget and who is all involved. – link to the organization’s mission and objectives. – method is used to produce the organization’s budgets historical figures and projections or Periodically year-end revenue is forecast and budget adjusted. Check whether the organization prepares cash flow projections. Check provision for contingencies to deal with an emergency or unexpected expenses. Reserve Funds/Contingencies. Presentation of Budget in meetings/Minutes in detail.
3. Internal Controls
- Organization Chart
- roles of various levels of management
- Organization have approved policies outlining its expectations in- Conflict of interest • Fundraising practices • Quality of services to users, clients, consumers, or the public, etc
- Various policies and procedures, segregation of duties, Control – for handling cash, cheque received and issued, All bank accounts held in the name of the NPO, not individuals, etc
- Supporting documentation held for all items of expenditure
Financial policies and procedures manual, Appropriate staff to deal with function, organization has a written policy related to investments, loans, staff advances, etc
5. Donation and Grant Received details
6. In-Kind Contributions
7. Compliances- FCRA, Income Tax, Registration Act, Annual Returns, Government Schemes Benefits, etc
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