Annual Accounts and Audit for a Public Trust in Maharashtra

Every registered public trust in Maharashtra has an annual cycle: keep the accounts, balance them at the end of the year, have them audited, and send the audited statements to the Charity Commissioner’s office. It is not onerous once it is running. It becomes very onerous when a trust has skipped it for several years and then needs a clean file — for a property sanction, a grant, or an income tax application.

The sequence

The Maharashtra Public Trusts Act, 1950 and the Rules made under it require the trustees to keep regular accounts, to balance them at the end of each accounting year, and to have them audited. The Rules then set the timing: the accounts are to be audited within six months of the date of balancing, and the auditor is to forward the balance sheet, the income and expenditure account and the audit report to the Deputy or Assistant Charity Commissioner within a fortnight of the audit.

So the deadline that actually bites is not a single filing date. It is a chain: balance the accounts, audit within six months, file within two weeks of the audit. A trust that balances late pushes everything downstream.

The forms

The statements are prepared in the prescribed schedules to the Rules:

• Schedule VIII — the balance sheet
• Schedule IX — the income and expenditure account
• Schedule IX-C — the statement of income liable to contribution

Trustees sometimes ask whether the trust’s ordinary accountant-prepared statements will do. They will not, on their own: the office expects the prescribed formats, and a submission in another form is likely to come back.

Who audits

The audit is done by an auditor qualified to act, and the auditor’s report is not a formality. It is where questions about the trust’s affairs get recorded — whether funds are held in the forms the Act permits, whether property transactions had the sanction they needed, whether there are amounts due from trustees, whether the books actually support the balances. Trustees who read the audit report properly usually find the issues before the office does, which is a much better order of events.

Contribution

Schedule IX-C exists because of the contribution payable to the Public Trusts Administration Fund under Section 58. The legal position on the rate has been in flux for years and the current position should be checked before any payment is made — that subject has a note of its own. The filing obligation and the payment question are separate, and the statements should be prepared and filed whatever view is taken on the payment.

What happens when a trust falls behind

Nothing dramatic happens immediately, which is exactly why trusts fall behind. The consequences arrive later and all at once:

• an application under Section 36 for a property transaction runs into questions about the missing filings before the merits are reached;
• a funder or a CSR donor asks for the last three years of audited accounts;
• an income tax application under Section 12A or Section 80G requires the same documents;
• a new board discovers it has inherited several years of arrears, and the practical burden of reconstructing them.

Catching up is usually a matter of reconstructing the books year by year from bank statements, receipts and vouchers, having each year audited in sequence, and filing them with an explanation for the delay. It is tedious rather than difficult, but it takes time, and it is far cheaper done before a deadline appears than after.

Practical housekeeping

• Fix the accounting year and balance on time; everything else follows from that date.
• Keep the trust’s money in a bank account in the trust’s own name, never in a trustee’s.
• Record every receipt, including cash donations and donation-box collections, and issue receipts.
• Minute board decisions that have financial consequences, so the auditor is not reconstructing intent from bank entries.
• Keep change reports current, so the people signing the filings are the people the register shows as trustees.

This note sets out general information about procedure under the Maharashtra Public Trusts Act, 1950. It is not legal advice, and the position in any particular matter depends on its own facts and on the law as it stands at the time. Statutory references should be checked against the current text of the Act and Rules.