SC to Govt: Make NGOs accountable for funds

A bench led by J S Khehar regretted that there was no regulatory mechanism to make NGOs answerable on utilising funds while the government pumped in public money.

By: Express News Service | New Delhi | Published: January 11, 2017 3:37:18 am
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SEEKING ACCOUNTABILITY of NGOs that receive funds from public exchequer, the Supreme Court on Tuesday asked the central government to put in place a regulatory mechanism and resort to criminal prosecution of such organisations in cases of misappropriation.

A bench led by Chief Justice of India J S Khehar regretted that there was no regulatory mechanism to make NGOs answerable on utilising funds while the government pumped in public money.

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“How are you not bothered about how they (NGOs) spend the money? After all it is public money and they must be made accountable. You cannot let it get squandered,” said the bench, seeking a comprehensive mechanism within three months to audit and scrutinise NGOs’ accounts.

It said that mere blacklisting the NGOs would not suffice but there was a need to include criminal action for misappropriation and swindling of funds disbursed to NGOs for certain purposes.

“The government has to regulate it. You have to know how they use this money? It is not just your money but it is public money… there can be no doubt that the amount disbursed to NGOs is public money and has to be accounted for,” said the court.

Additional Solicitor General Tushar Mehta agreed with the bench that a new regime should be put in place to regulate NGOs and sought some time to revert. The court, however, pointed out that provisions of CAG auditing and scrutiny under the General Financial Rule, 2005 were already operating in this area. And that the competent authority will now have to come out with guidelines and rules for a regulatory mechanism by March-end.

The bench noted that such action must be taken by the Centre and the Council for Advancement of People’s Action and Rural Technology (CAPART), a wing under the Ministry of Rural Development which has been instrumental in granting the funds.

“We consider it appropriate to direct the Centre and CAPART to complete the exercise of auditing and submit the report by March 31, under all circumstances,” the bench said.

In case of non-compliance of auditing and other rules, necessary civil and criminal action has to be initiated where public fund is received from CAPART or government departments and misappropriated, it said.

The court said on next date of hearing on April 5, it expected the Centre to place before it the guidelines and rules for accreditation of voluntary organisation and detailing the manner in which they shall maintain their accounts, conduct the audit, the process of recovery and methodology of recovery of the amount in case of misappropriation and criminal proceedings.

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