
DUTCH GENTLEMAN CAREL THEIME LETS THE CAT OUT OF BAG:
Mr.Carel Theime, the Dutch man, who put up strong defence on the side of his institution before BBC, had brought out in Auroville Today[ June-July 2008] a reply to the allegations in the BBC story.BBC was neutral.It gave the otherside chance to be heard. That is what journalism is all about.Dr.Karan Singh when contacted by personal as well as official email or through telephone, by the journalist did not respond, hence in last minute, this Dutchman was assigned the task to defend foreigners before BBC. Let me quote what he wrote about me without my comments to leave it to public to evaluate its content :
Another ambiguous witness is Mr. Nandhivarman, the 'local politician’ from Pondicherry , who is most probably the person who made the ludicrous statement, mentioned in Ms. Wright’s first email, that "because of Auroville, Pondicherry is becoming the brothel of South India ". Mr. Nandhivarman hosts many websites. A posting on one of them, dated April 9, 2008, is called "My fight against Auroville soon in Televisions Options." In it, he refers to Sri Aurobindo as 'a failed godman’ and to The Mother as 'a Frenchwoman who found the key to death but is now dead ' perhaps she had lost that key.’
Auroville doesn’t escape his ire either. "There exists a so-called international city, a dream of the Late Mira Richard, known as Mother of Aurobindo Ashram. That can be said to be the story of deceit. Right from the beginning their aim is to establish a Vatican type of autonomous state." Nandhivarman continues to lambast Auroville for its lack of leadership and aspiration for Divine anarchy, which he sees as an attempt at creating a lawless society which is against the laws of the land. His website shows many similar curious statements, which makes one question his rationality.
But Ms. Wright doesn’t seem to have been subject to such questioning. Many of the statements she makes in the video can be traced back to this particular website. The words ' Vatican status’, which appeared in the transcript (though edited out in the video); the insolent reference to The Mother; the reference to Divine Anarchy ' it’s all there. In another attempt to tarnish the image of Auroville she talks in the video about new people being 'inducted’ to Auroville. In the original transcript, the word used was 'initiation’ ' it was corrected by Auroville into 'probationary period’ but deliberately not used, to create the impression, as one of Auroville’s supporters wrote, that "Viewers who do not know Auroville, upon watching the documentary, may be led to think 'Ah, here again is one of those weird sects, deluded by some ideal or the other, but only living in dissolution and perversion’."
The Honourable Dutch man who finds fault with me describing French woman as French, thundered before the BBC, that there has been ONLY ONE CASE of PEADOPHILE not handed over to police but sent out. He refers to Mr.Didier Kieme, because he was nabbed later. But anyone who heard him shout in anger through BBC telecast can recall his total denial of ANY OTHER CASE. But in his own words, what he writes in Auroville Today, he admits about three cases.Let me quote his own words:
As can be expected, local authorities visited Auroville soon after the broadcast. High-level officers of the police and Immigration Office were concerned, for if Auroville was indeed a place where paedophiles could indulge in criminal behaviour, how was it that they were unaware of it?
The Working Committee informed the Foreign Regional Registration Officer about the cases Auroville had been dealing with in the last 15 years: 3 Aurovilians had been asked to leave on the basis of suspected (but never proven) paedophile involvement; one Newcomer was found guilty and had his probationary status ended and the authorities were informed; one guest was found guilty, sent out, and the local authorities were informed; and the attention of the police had been drawn to two persons who were roaming the area and had been bothering minors. Auroville explained that a large number of guesthouses and home stays have come up around Auroville ' the Repos community on the beach alone is surrounded by 163 (!) small guesthouses ' and that Auroville cannot be held responsible for what happens there.
Why Auroville?
The question 'why’ Ms. Wright decided to relate child abuse to Auroville remains as yet unanswered. Child abuse, according to a report in the daily newspaper The Hindu, of December 26, 2007, is rampant in Chennai. According to a survey conducted in 2007 by the Tulir Centre for the Prevention and Healing of Child Sexual Abuse, more than 40 per cent of the children in Chennai from all social strata report various forms of sexual abuse. Rumour has it that paedophilia also thrives in the tourist town of Mahabalipuram . Why did she concentrate on Auroville?
"I think she was out for a scoop," says Mauna. "Child abuse is a problem found everywhere in the world, including India . Ms. Wright tried to connect it to Auroville to show we allow it to happen and do not act against it; and in the process to denigrate Auroville’s ideals and good name. She dismisses The Mother as 'a French woman’; she falsely states in the transcript that Auroville strives for Vatican status; she lies that Aurovilians don’t pay tax; she misinforms that Auroville has no money, no rules and no leaders; and she portrays Aurovilians as arrogant Westerners who repress the poor local population and take undue advantage of them which is another falsity ' for only 60% of Auroville’s population are foreigners. And if she would have compared the lives of people who have been associated with Auroville since the beginning with those of people outside our geographical area, she would have found how much Auroville has done for the surrounding villages."
By his own words, Carel Theime lets the cat out of the bag.He admits three incidents while he had boldly told lie before BBC, that apart from only one incident, no other case was there.But now he admits having sent out three. The charge all along is if there is strong suspicion about child abuse, why Auroville Foundation fails to report to the Police. After all as the Dutchman Carel Theime claims before BBC, that the Foundation is headed by a Joint Secretary level I.A.S officer is the Secretary. Why that Secretary is sidelined even in BBC interview. When Chairman Dr.Karan Singh backed out to defend, if that is true, the Secretary must have faced the camera to defend the organization he looks after and is responsible to Indian Parliament. Wherefrom a Dutchman, who is in lowest rank in hierarchy, comes to defend crimes committed by foreigners. Our charge is that Secretary’s wings are clipped. They are made puppets in the hands of the extra-national influences that rule the roost.Mr.Carel Theime, who admits THREE INCIDENTS and who ADMITS that they were sent out with honour, also talks about Chennai, Mahabalipuram and the 163 guest houses in near vicinity of Auroville where peadophilia crimes do occur, over which he has no control.
The first ever media expose by Tamil investigative journal Nakkeeran by its sub editor Mr.Prakash, who stayed in my house for few days, tracking the peadophile \triangle of Chennai, Puducherry and Goa, and subsequent media exposures cannot give exemption to Auroville.Like cross border terrorism, Auroville and Puducherry are just 10 kilometers away, the visitors or guests or anyone who comes to Auroville or one who are residents, can come to Puducherry and commit crimes and go back. Even these 3, actually the number is more, as time passes same Mr.Carel Theime will admit, he needs time to refresh his memory, after being sent out from Auroville stay in Puducherry.
The girls of erstwhile USSR states frequent India, visit Delhi and reach Chennai and Mahabalipuram, apart from Auroville. If a verification is made on the passports of these Russian woman, sorry my communist friends, I have great regard for USSR and October Revolution, but I cannot avoid mentioning their nationality, since I had called Mr.Carel Theime, a Dutch as Dutch which in no way is derogatory, the purpose of their frequent visits could be unearthed. Our fight is against Puducherry, Chennai or Mahabalipuram or Auroville should become another Hongkong or Thailand. There many trusts run by foreigners, which needs a probem. Mr.Carel Theime who talks only about BBC, is silent on the charges made against the functioning of the so-called trusts under Auroville Foundation. Their own reports suggest all is not well within Auroville. Hence we demand all trusts be wound up and brought under Auroville Foundation, as departments. An Indian citizens making such a demand to Indian Government is not illegal, and Mr.Carel Theime must know he lives in India, not a sovereign state ruled by Ex-Maharaja of Kashmir Dr.Karan Singh.
AUROVILLE FOUNDATION :AUROVILLE UNITY FUND
Comments on Office Order dated 31/03/2006
While there are some welcome features in the Order establishing the Fund as part of the Foundation, there are some provisions of the scheme that require clarification and redefinition/modification.
Firstly a unit will be merely an entry in the books of accounts by transferring the liabilities for donations/grants etc to this Account. If the funds are at the disposal of the Foundation, it be managed by the management of the Foundation (The Board, The Fin Commission and the Secretary with his officers or executives.) Their actions are subject to the rules and regulations of the Foundation including the Donor Covenants as applicable. There does not seem to be any justification or necessity to appoint seven executives, with out laying down their responsibilities, powers and conditions of service including the allocation of work. They are individuals AND NOT A BODY CORPORATE NOR ASSOCIATION OF PERSONS.
It has to be emphasized that the moneys and assets hived off to the Unity Fund are assets of the Statutory Body with responsibilities to the Parliament. Even now there are executives working under the Secretary and FACAO as officers of the Foundation exercising similar duties of receiving and disbursing grants and donations, within the boundary conditions of the sanction on the one hand and the Financial Rules of the Foundation, as a Public Body on the other.
A group of persons, not employees of the organization ,can not be entrusted with the management of Funds .There is no place for Trustees,. as Trusts will have to be given a specific mandate and handling of funds can not be one of them .It has to be noted that the office order and the reports of the working committee have not defined the inter se relationship, delegation, and limitations on exercise of authority/, ,reporting relationship etc .There is no indication that there will be any pre audit of releases.
Secondly, the list of funds that would be pooled in the Unity Fund is diverse and is subject to different conditionality. It must be emphasized that the Foundation and its many avatars through Trusts and Units are essentially Public Trusts and are strictly Governed by the Law and Practices that apply to Trusts and the very high and strict standards of probity.As a first step the Foundation must decide what funds and functions will be hived off for the sake of democracy and self-governance. Quite clearly as emphasized in our early submissions a certain degree of de-linking must be undertaken. This is inevitable.
Thirdly, the creation of a unit can not and should not dilute the authority and responsibility or Accountability of the Foundation and the Governing Board in ensuring that there is complete compliance:
a) with the terms and conditions of the Grants and Donations, and
b) Monitoring, reporting and providing utilization certificates (often require independent audit verification)
Fourthly, there should be a total separation of funds that are not grants and donations. Payments by units and trusts under contractual obligations, proceeds from the transfer or sale of assets that belong to the Foundation should not be pooled with grants and donations received for specific purposes; if there are conditions laid down by the Donor(s) about the disposal of the assets created from the grants, the funds so realized should be treated as a conditional grants.
There is a need to lay down rules regarding the use of such INTERNAL ACCRUALS. They will probably become part of the funds that can be given to units to support their operations in accordance with the decisions of the empowered body. . Similarly Revenues from Treasury operations (which need not be physically separate for each type of resource) must accrue to the pool.
In fact the concept of surpluses and contribution to AUF need closer examination. This is vital to autonomy and accountability of the Trusts that are service/research oriented. On the other hand there is a necessity for so-called Commercial units to utilize their entire income to the objects of the Trust or contribute the surplus to another unit with similar objects. There is little scope for discretion in deciding the amounts to be transferred to the Unity Fund. In that event the Fund will finance all legitimate needs for renewal/replacement/investments in the interest of the trust/working capital increases, etc after due assessment. This is a matter that requires consideration by the Board in consultation with the Govt.
For these reasons
The following course of action is suggested.
The Unity Fund may be in parts or subgroups such as:
1) All foreign Contributions for specific purposes including those from International Organizations
2) All foreign contributions of a general nature including donations
3) All grants and donations within India from Govts and Local Bodies (There is no clarity in the position papers )
4) Contribution from commercial units, both obligatory and voluntary. These need to be monitored by the Foundation by entrusting to the Executives the responsibility of reporting periodically the funds available and due for transfer to the pool.
5) All capital receipts which are received initially in Account No.3 until they are allocated.
An agreed set of guidelines for the use of the Funds in the various accounts will be issued by the Foundation after consultation with the Executive Committee / FAMC, subject of course to the conditions of the donations/grants
The use of Funds that are not tied should be governed by a set of regulations and a budget approved by the Executive Committee and the Finance Committee.
In the case of tied funds, a system of monthly or quarterly releases should be adopted, linking the releases to the performance and the rendering of accounts. This can be supplemented by a test check by the Foundation's Internal Auditors. The quarterly or monthly release will be by way of an authorization to the Bank to transfer funds to the designated units. In that event there is no need for issue of cheques.
While in the books of the Auroville Foundation various accounts will be opened on the lines specified above, .the balances will be pooled for treasury operations. The investment of these funds will be on the basis of prior approval by the Budget Committee/Finance Committee or any other empowered group.
In passing, it has to be strongly urged that Foundation should have nothing to do in taking deposits, collecting savings and operating as a Banker. Banks are sufficiently diversified and can perform these services. If however, Residents wish to subscribe to long term debt instruments floated with specific common objectives, a way could be found with in the present mandate.
To sum up:
There is an urgent need for making Rules and Regulations governing the Unity Fund, which is now a fait accompli, before it is too late. Also The Authorities and Officials to be entrusted with the following should be designated and notified as public servants :
· Receiving moneys and depositing them with the Banks
· Preparation of Receipts and advising all concerned
· Scrutiny of proposals from Units to be assisted/beneficiary units and preparation of Budgets on a quarterly basis
· Submission of proposals for releases
· Accounting at the Primary Level
· Ensuring timely submission of Returns to various statutory authorities and the Budget committee constituted by the Foundation
Several functions including sanction of funds and releases are linked to Budget scrutiny Approval and Performance Reviews. It is necessary for the Board to constitute the Empowered Committees for this purpose.
The emphasis should be on Autonomy with Accountability. If some units become liable for tax there cannot be any resistance. After all the State provides many tangible and intangible benefits to Auroville.
The concept paper is an impractical document and fortunately the Office Order avoids many of these such as sanctioning loans at the discretion of the executives. Govt grants received for specific national/social objectives cannot be governed by the sort of arrangements contemplated in the concept paper and are matters purely between the implementing organization/Auroville Foundation and the Govt.
In the matter of Budgets, the basic responsibility of assessing the needs and the resources and the need for Govt/External support has to be taken by the unit and the agency that is supporting and guiding it. There is no role for the FAMC and others
All these point to the need for defining the core functions of Auroville Foundation. Mandatory, developmental, infrastructural and basic services to its residents must be distinguished from private driven enterprises and collective endeavours.
-The Institute of Public Auditors of India
UNITY FUND:REGULATIONS / OPERATING INSTRUCTIONS
Introduction
The origin of the Fund
AUF and its organs
The need for the Unity Fund
Authority for the establishment of the Fund as part of the resources of the AUF
The Officers of the Fund /Authorities - their functions and their obligations, duties and liabilities. They will be deemed public Servants
The Auroville Vision and Principles applicable to all transactions
Obligations under the FCRA Trusts Act/Income Tax Act
AUF Act/Rules and Regulations
The Components
AI Foreign Donations Specific
AII F.C non specific
AIII Misc receipts Foreign Currency
BI Indian Currency donations other than Govt./ Public
Institutions
BII Govt Grants State / center/Others non specific
to any Trust
Grants in Aid for specific projects, purposes will continue to be accounted for as at present
C Other receipts /casual receipts/ box collections
D Funds appropriated from commercial units and surpluses as appropriated /allocated by the empowered committee .Rules should be framed
Specify the use of Funds other than tied grants
PROCEDURE FOR RECEIVING MONEYS
Only persons notified shall be entitled to receive funs to the credit of the UF The following persons are authorized for the specified component.
* * * *
Large amounts as notified shall require the approval of the Secretary. Where the terms and conditions for the use of the Funds are specified by the Donor the Secretary shall convey the acceptance of the Foundation, after such clearances from the Board or Govt as may be necessary .
Fund AI Executive A
Receipt of Funds
The designated person (Appendix) shall prepare a serially numbered Receipt Advice with date containing the following information
1) The name of the donor
2) Purpose as indicated by the donor
3) Earmarked for the Trust or organization utilizing the amount
4) Total receipts for the specified fund so far
6) Banking instructions
7) Official Receipt No. and date
Approval of the designated authority where required
9) Copies of the advice shall be sent to Secretary/FA/FCRA Section//Budget committee/Trust concerned
A monthly abstract of transactions shall be sent to the FA by each executive together with a Bank Statement duly reconciled in respect of each account.
Issue of Receipts
On the basis of the Receipt Advice and after verification of the Bank deposit the FA will issue an official receipt on behalf of the Foundation. The receipt book will be in the custody of the Accounts officer.
Each Account head will have a separate Book with serial numbers pre printed. Different colour borders shall be incorporated for different books as per the classification earlier prescribed.
The cash book will be posted immediately and attested, Thje receipts shall be signed by the designated Officer who will be responsible for the custody of the Books, Receipt advices monthly statements and Copies of Bank Accounts
He will prepare a quarterly report to the Board on the operations of the Unity Fund.
Banking
The Secretary shall notify the Banks and type of Accounts to be maintained for the transactions relating to the Fund. Pending such a notification prior approval will be taken for the opening and operations of the Account
Investment of Funds not immediately required
The Board shall in consultation with the Budget committee lay down guidelines for the investment of funds not immediately required . These will be reviewed quarterly.
Surpluses of Trusts and their Units
One of the most beneficial consequences of the Unity Fund is the pooling of surpluses from Trusts and Units engaged in semi-commercial and promotional work. Though all the Trusts subscribe to the Ideals and Discipline laid down in the Vision, during the course of their operations they do create surpluses ,after meeting the requirements of Renewals and Replacement of Assets subject to wear and tear ,additional working capital consistent with the needs for expanded operations. The objective of the Unity Fund is to pool these resources for the common good.
The Budget committee shall after a thorough review of operations of various surplus generating units ,fix the contributions they will make to the Unity Fund. Each quarter. As these reviews are quarterly there is enough room for correction and change as would respond to changing needs.
Allocation of Funds to different units/trusts from the Unity Fund
Allocation and Release of Funds from the Fund
Given the diversity of sources and the varying objects for which funds are received by the unity Fund, it is necessary to bring its operation under a strict budgetary system the various components and the authority/responsibility for these are described here
Receipts
I Govts
Grants and other subventions included in the Govt budget as advised by the Ministries concerned. The receipts in the nature of reimbursement may be kept out of the unity Fund
II International Organisations
The amounts committed for the programs by these organizations
III Casual receipts on the basis of past experience
Foreign Donations An assessment of fund flows on the basis of discussions with donors
IV Auroville Units
Auroville units may be directed to prepare well before the beginning of the Financial Year i.e Dec of the year for the FY beginning April, an annual operations budget with a statement on the sources and utilization of funds. This should indicate the amount of surplus available to the Fund.A committee constituted by the Secy in consultation with the Working Committee /FAMC will finalise the utilization of funds indicating the contribution to be made to the Unity Fund. on a quarterly basis
Treasury Operations
FACAO will direct the contours of the Treasury operations based on the Fund Flows.
A designated official will be assigned the responsibility for ascertaining rhe best way of utilizing the Funds and prepare an estimate of income from Treasury operations.
To make the operations flexible to accommodate extraordinary transactions the Budget for Receipts will be on the basis of adjustments being made monthly.
Payments
The Demands for allocation/ release of Funds must emanate from the Units undertaking programs that are to be funded from Donations/Grants/International and institutional assistance.
These units/trusts must submit annually by Dec an Expenditure Budget indicating inter alia the programs to be Funded by the Unity Fund ,giving details of the commitments made by the Donors. Their estimates will be supported by a Performance Review of existing programmes and other relevant reports on Utilisation of Grants.
A quarterly Fund Flow statement for the next Accounting Year indicating the quarterly drawings proposed will accompany the Budget.
After Scrutiny of the same the allocation as approved by the FA will become the basis of operations for the next year.
The proposed periodic review of the Fund operation will provide the necessary flexibility in the release of Funds
The Budgets as approved by the prescribed authority will form the basis of withdrawals and payments from the fund except in regard to ad-hoc allocations and releases that may be approved by the empowered committee. This will be particularly relevant to misc. receipts including box collections /Ad-hoc donations.
Payments from the Fund
Based on the recommendations of the Committees appointed to approve the Budgets and the quarterly fund utilization schedules ,the Fund Executives will prepare a quarterly release of Funds instruction to the Bank for debiting the Fund and crediting the Accounts of the concerned Trust and Units. The Units receiving funds will submit receipts in advance of the actual transfer/credit on the basis of the release advices.
Monthly Accounts of receipts and Payments together with a comparison with the Budget provisions shall be prepared and submitted to the Finance Committee by the FA/CAO.
The Fund will maintain a calendar of returns for receipt of reports from the assisted units and the submission of Reports by the Fund including monthly /quarterly Accounts/Bank statements etc. The calendar will list the activities and the due and actual date of compliance. The Secy will review this once a month.
The attached document lists the general rules and procedure that should govern the receipts and Payments and the maintenance of Accounts thereof.
PROCEDURE FOR ACCOUNTING RECEIPTS
¨ No money shall be accepted without issue of a receipt there for.
¨ Receipts shall be in pre-printed and serially numbered standard form with provision for details like date of receipt, Party’s name, Cheque / DD number, date, bankers name, amount in figures and words and the Head of Account to be credited.
¨ Revenue Stamp of Re.1 denomination shall be affixed and defaced with Foundation / Fund seal for all receipts of money in excess of Rs.5000/-
¨ Receipts shall be made out by the Cashier and signed only by the authorised officer.
¨ Counterfoil (in carbon impression) of the receipt should be maintained and the same shall be the source of reference for making entries in the Cash Book / Bank Book, as the case may be. (Separate receipt books shall be used for Cash and Cheques / DDs).
¨ If in the computerised environment, as receipt print outs are generated in computer, a separate field should be provided in the Cash / Bank Book to give cross reference to the receipt numbers to ensure continuity and accounting of all receipts.
¨ Wherever a receipt is cancelled due to any error or otherwise, the original shall be attached to the duplicate duly crossed and marked CANCELLED with due authorisation by a superior officer after verifying the facts.
¨ No duplicate receipt shall be issued under normal circumstances and in case it is absolutely necessary, only a certificate of receipt should be issued with the authorisation of a superior officer.
¨ In case of receipt of large amounts, the Head of the Department should be informed for immediate deployment of funds.
¨ All high value cheques / DDs received should be deposited into the bank account on the same day if received within the banking hours and in any case on the next working day along with other receipts.
¨ The counterfoils of the pay-in-slips acknowledged by the bank should be kept in chronological order, neatly stitched.
¨ All receipts should invariably be accounted on the same day.
¨ Un-remitted cash, cheques and DDs should be under safe custody.
¨ Receipt of money against Book Debts / invoices should be reported to the Executive officer / Secretary/Financial Adviser for information.
¨ Receipts being a money value document, there should be a Stock Register to account the receipt and issue of the printed Receipt Books.
¨ Credits by Banks: In the case of banks affording any credit to the account on account of interest, etc., such amounts should be accounted for through receipt vouchers and the bank credit advices should be attached to such vouchers.
PROCEDURE FOR ACCOUNTING PAYMENTS
The following are the normal payments:
¨ Salary and allowances to staff (Cash / Cheque)
¨ Advances to staff towards, travel expenses, administrative expenses, etc.
¨ Personal claims like Travel expenses, Medical Bills, Leave Travel Allowances, etc.
¨ Advances to Suppliers and Contractors
¨ Suppliers bills
¨ Contractors & sub contractors' bills
¨ Refund of EMD and such other security deposits for works done.
¨ Repayment of loans and payment of interest on loans
¨ Fund transfer to other branches / Foundation
¨ Revenue expenses towards rent, electricity, telephones, postage etc.
¨ Remittance of staff recovery and statutory deductions from bills.
Procedure for Payments:
¨ No payments should be made except under Payment Release Advice(PRA or Sanction) duly authorised by officers as per delegation of power issued from time to time. In the case of small cash payments the PRAs need not be insisted, but necessary authorization for payments obtained on the payment vouchers
¨ The banks should be intimated about the list of officers & others with specimen signatures authorized to sign cheques.
¨ All payments should be made under cover of a payment voucher providing full particulars of date, name of the payee, nature of payment, amount, cheque no., date, name of the bank, head of account to be debited, deductions, if any, made, budget provision and the cumulative payments made so far against budget provision, etc.
¨ All payments under the PRA / Voucher should be supported by sustainable claims / invoices in original or by contractual obligations.
¨ All payments to suppliers and contractors should only be made by crossed cheques
¨ Every voucher should be passed for payment and signed by the competent authority under the delegation of powers.
¨ The amount payable should be written both in figures and words.
¨ The cheques should be drawn only in favour of parties who are entitled to receive the same.
¨ The name of the payee should be the same in the cheque and in the voucher
¨ All cheques and demand drafts except self cheques for cash withdrawals should be crossed “Account Payee” before handed over to the parties concerned.
¨ Payee's acknowledgements should be insisted up on against all payments except when A/c payee cheques are issued and sent by post or courier
¨ If the cheque signing authority is different from the one passing the payment voucher, cheques should be signed by that person in accordance with the delegation of powers and before signing he should ensure that the payment voucher in question has been duly passed by the competent authority.
¨ Foreign payments may consist of payment for materials, equipments, travel bills, consultation fee, etc. It should be ensured that all required formalities on payment in foreign exchange is complied with before accounting, the rate applicable for currency translation is correctly ascertained. The company's accounting policy in this regard should also be borne in mind.
¨ All blank cheques (cheque books) should be kept in proper custody under lock and key.
¨ All vouchers should be numbered consecutively for the year and should be entered in the cash book in chronological order.
¨ The Head of Accounts and sub-heads should be distinctly shown and verified before data entry.
¨ The person authorised to approve the payment and sign the cheques should put his initial on the counterfoils of the cheque as and when the cheque is signed.
¨ The Payment Vouchers should be securely stitched and preserved till audit and thereafter up to eight years as required statutorily.
¨ All payments (except petty cash payments) are authorised by Payment Release Advice (PRA). The PRAs should be numbered serially and a Register of PRAs should be maintained for control purpose. This should show the serial number of the PRA, party to whom payment is due, amount involved, due date of payment in case of credit transactions, etc. When payment is released in part or full, the particulars thereof including the voucher reference should be noted therein.
¨ Where payments are released in installments, each payment should be recorded on the original PRA and a copy of the PRA up to the stage of immediate previous payment should be attached to the relevant payment voucher to ensure that there is no duplication in payment.
¨ The original PRA should be retained and attached to the subsequent payment voucher until the final payment is made. Particulars of cheques for each payment should be prominently noted on the PRA duly attested by the Financial Advisor pr such other official responsible for payment..
¨ Also the general ledger account balances should be verified on the system before authorising the payment vouchers. No payment to suppliers and contractors, other than advances should be released unless there is a ledger balance to the credit of the party concerned.
¨ All payments should be accounted in the Cash / Bank Book on the same day.
¨ The software system should be developed in such a way that a cheque issue statement is generated for each bank account both to serve as a ready reference as well as for Bank Reconciliation Statement through the system.
Debit Advices:
There will be a number of instances for which the bank will debit the accounts of the customers even without issue of cheque. They are:
¨ Folio Charges
¨ Bank Charges
¨ OSC Charges (outstation cheques)
¨ Cheque Book Charges
¨ Payments against letters of credit
¨ LC charges
¨ Margin money deposits for bank guarantee
¨ Bank guarantee commission
¨ Interest on LC payments,
¨ Bill discounting charges
¨ Interest for delayed realisation of bills discounted etc.
In all such cases the bank’s debit advice slips should be collected and attached to the vouchers after due verification of its correctness before accounting. It may be possible that the Banks may not promptly deliver the debit advices but the debit entries would be found in the Bank Statements at the time of verification of bank statements for Bank Reconciliation. All such debit entries appearing in the BRS should immediately be accounted and in the case of such entries relating to the last month of the financial year, they should be accounted in the same month
Delegation of Financial Responsibilities from theTrustees to the Executives under the Auroville Foundation
1. Preamble
1.1 Unit Trust Agreement: Refers to the Unit Trust Agreement as signed by the Trustees, Executives and FAMC for the functioning of the Unit. All other definitions are as under Unit Trust agreement.
1.2 The Delegation of Financial Responsibilities is an inherent part of the Unit Trust Agreement as referred to in paragraph 6 and 7 of the said agreement. {This is proposed for all current and new Trusts / Units under the Auroville Foundation}
1.3 Responsibilities of Trustees: The legal responsibilities of the Trustees are as per the Indian Trust Act. Samples of some of the legal responsibilities are enclosed in annexure 1. The limitations of the financial powers of the Trustees by Auroville are also enclosed in annexure 1
2. Relationship of Auroville Foundation, FAMC, Trust and Unit
Normally, the Trusts will function under the Auroville Foundation as per the Trust deed. Formation of all new Trusts will have prior approval of FAMC, Working Committee and ABC or bona fide working group. Every Trust has the Auroville Foundation as the settler of the Trust under the Auroville Foundation. In the context of Auroville's internal organisation, the FAMC is the responsible body for the general superintendence of the Trusts. In turn, the Units under the Trust will function under the purview of the Unit Trust Agreement and the Delegation of Financial Responsibilities as given by the Trustees as per Board resolution.
3. Financial and Contractual Limitations
The financial powers will be delegated to the appointed Unit Executives by the Trustees of the Trust under which the Unit functions. The Executives will be given specified financial and contractual powers, to borrow, take advances, sign contracts and agreements. These limits will be specified by the Trustees through a Board resolution, on the formation of the Unit. Copies of the resolution will be passed on to the FAMC. The powers may be modified, annulled or extended as per the decision of the Trustees. However normally these limits will be:
1.a) Advances and Borrowings:
The power of the Executives will be limited to borrowing not more than 50% of the Capital Fund of the Unit. (Debt: Capital Fund 1:2) This limitation on raising debt refers to all cumulative liabilities of the Unit as represented on its balance sheet. Any advance or borrowing above this amount up to 100% of the Capital Fund. (Debt: Capital Fund 1:1) would require prior approval by the Trustees. Any advance or borrowing above the value of the Capital Fund would require prior approval of the FAMC.
b) Contractual Agreements
For signing any contractual agreements with external parties, either for delivery of goods and services or for long-term arrangements of loans etc., which have financial implications of more than 50% of last year's turnover, prior approval from the Trustees and the FAMC is required.
c) Responsibility for Liabilities
Although according to the Indian Trust Act the final responsibility for the liabilities created by the Unit under the Trust rests with the Trustees, by this document, which is an inherent part of the Unit Trust Agreement, this responsibility is hereby delegated to the Executives of the Unit.
Therefore:
2.(i) Winding Up or Closure of Unit
In case a Unit closes or is insolvent, all unsecured loans taken up by the Unit from within or outside Auroville will not fall outside the domain of the Unit. The executive(s) will have the personal responsibility to reimburse such loans.
3.(ii) Priority of creditors in case of default / closure
In case of insolvency or closure of the Unit, the hierarchy of creditors will be as follows
First
1 External (secured) agency like bank, salary, taxes, EPF, ESI supplier etc.
Second
1 Auroville Maintenance Fund
2 Auroville Business Revolving Fund
3 Other Auroville Units / Trusts
4 Aurovilians
5 Executives
4.(iii) Loans from Executives
Loans and Interests from Executives to Units are refundable only from the surplus generated from their respective Unit.
Interest can be paid to Executives for loans / advance to their Unit, provided funds are routed though the Trust. The interest rate has to be in par to the prevailing SBI rates.
5.(iv) Loans from Units to Executives
Units cannot advance personal loans to Executives from their Unit funds.
Short-term advances in the course of normal business for travel and Unit expenditures are allowed.
(v) Loans from Units to other Units (This is where we said that Divya should work on the wording. It should not be an amount but rather a percentage that correlates with the units' turnover.)
Loans up to Rs 1 lakh can be made at the discretion of the Unit Executives.
Loans from Rs 1 to 5 lakh require that all Executives and Trustees are informed.
Loans above Rs 5 lakhs require prior approval of the Trustees.
It is understood that these figures apply to money lent out within the space of a single financial year.
(vi) Loans from Units to Employees
The ceiling on loans to employees should not exceed the gratuity payment due to the employee
4. Contribution
See Attachment 1
6.5. Reporting on Losses
Units making losses before depreciation should present a performance report and future business plan to the Trust. Moreover any Units making losses in excess of 30% of sales in any one financial year should also present a performance report and future business plan to the Trust. The Trustees and Executives will in turn present this report to the ABC or relevant bona fide working group, who will inform the FAMC.
Units making losses should present their performance report and future business plan to the Trustees by latest 30th June. If the Capital Fund is negative, at least quarterly performance reports and profit and loss accounts should be presented to the Trustees.
ANNEX 1
MANAGEMENT OF TRUSTS
1. Functions of Trustees
The trustees can make specific provisions in the Trust deed, and additional rules to be framed by the trustees should include the following:
1 Holding of a minimum of 3 meetings a year
2 Quorum for the meetings
3 Chairperson of a meeting
4 Adopting a resolution
5 Delegation of functions
6 Fixing accountability etc.
7 Delegation of financial and contractual powers to Unit Executives
The Trustees can give appropriate support to new Units in their Trusts for effective functioning while at the same time providing accounting, contractual, operational support to function better.
Trustees are also overall responsible to see that the objectives of the Trust are met as per the Trust deed. Respecting guidelines of Auroville working groups is mandatory.
2. Limitations on the Financial Powers of Trustees
Advances and Borrowings:
The power of the Trustees will be limited to borrowing not more than 100% of the Capital Fund of the Trust (Debt: Capital Fund 1:1) This limitation on raising debt refers to all cumulative liabilities of the Trust as represented on its balance sheet.
Any advance or borrowing above this amount requires prior approval of the FAMC.
Loans from Trusts to Trustees
Trusts cannot advance personal loans to Trustees from Trust funds.
Loans from Trusts to Trusts
Trustees / Executives can give loans up to X % of the profit of the unit in the previous financial year, to other units or Trusts of Auroville. (This % can be in the range of 5-20%. The Trustee and the FAMC can fix in every UTA a specified %, but not higher than 25% of its profits.)
Attachment 1:
Contribution and Donation Guidelines for Commercial Units
One of the purposes of an Auroville commercial Unit is to generate and contribute funds for the maintenance and development of the community.
As much as we aspire for a method of contribution that would be close to what the Mother had suggested when she stated that "a part of the income" would be given to the community, we still need the following guiding principles to help us move towards that goal. We understand that these guidelines are evolutionary in nature. They will change as we move closer to realizing the Dream.
The purpose for which you Units are offering funds is important in determining whether it is a contribution to Auroville, an outside donation or simply a personal or Unit expense.
Giving for the general welfare of Auroville or supporting an Auroville project for community benefit is a "Contribution".
A Contribution is giving for the general welfare of Auroville or supporting an Auroville project for community benefit.
A "Donation" is money given by the Unit to an outside project that is not directly linked with or officially supported by Auroville.
Financial support in exchange for goods or services (i.e. for personal or Unit benefit) is a "Personal Expense is giving financial support in exchange for goods or services for personal or Unit benefit."
CONTRIBUTIONS TO AUROVILLE
· Contributions to Auroville are for the greater good of the community and not directly linked to the Unit or the Unit holder.
· Contributions to Auroville should correspond to a minimum of 33% of the previous year's profit before contributions and donations.
· The contribution will be determined from the audited balance sheet of the Unit.
· All contributions to Auroville are to be channelled through the Central Fund.
SPECIFIED AND UNSPECIFIED CENTRAL FUND CONTRIBUTIONS
· A minimum of 2/3 of the 33% contribution is to be given unspecified to the Central Fund.
1. Unspecified Contributions
a. Can include the Rs. 1,500 contributed by the Unit for each Aurovilian working in the Unit.
2. Specified Contributions
a. Are contributions given to activities which the Unit holder wants to support.
b. May be given to Auroville supported activities under Auroville Fund, AV Maintenance Fund, SAIIER, AVAG and in the villages (recognized projects) but must be sent through an Auroville Channel the Central Fund (such as Auroville Fund, AV Maintenance Fund, SAIIER, AVAG).
c. Do NOT include Aurovilian Maintenance, Medical Expenses, and any other Personal / Unit Expenses.
d. In kind donations are to be evaluated by the Economy Group.
OTHER CONTRIBUTIONS
· In some cases, Units may directly contribute to SAIIER, Matrimandir or CSR (without by routing these contributions through the Central Fund) as specified contributions for a project. The Central Fund needs to be informed of these contributions, so that they are noted as specified contributions from the Unit.
PERSONAL OR UNIT EXPENSES
The following are examples of monetary gifts, which are considered as personal or Unit expenses and cannot be included in the 33% contribution:
· Financial support given to activities directly linked to the Unit or Unit holder like a monthly contribution for the use of the Video Library, New Creation Gym, Nandini, etc.
· Payment for use of space, electricity, water and other facilities used by the Unit or executive.
The monthly budget of the Central Fund is defined and revised by the Economy Group where ABC has representatives. The Central Fund will publish monthly unspecified and specified contributions. Each Units contribution will be monitored. In case no agreement can be reached between ABC and the Unit, further action will be recommended to the FAMC.
For the new Units, Units genuinely in difficulty, the amount to be contributed by the Unit will be studied and determined on a case-to-case basis by the ABC. In case no agreement can be reached between ABC and the Unit, further action will be recommended to the FAMC.
General Notes:
· Even though contributions are entered in the books as "expenses", they are in reality an intrinsic part of the profit. If contributions are given in bulk at the end of the financial year (as it is the case for income tax) it is clear that the 33% would be calculated on the profit before contribution. Regardless of whether contributions are given in parts, before or after the end of the year, it is necessary to include them back into the profit at the time of calculation.
· To be free of the tax mentality, units are always welcome to give more than the minimum 33%. If it is the aspiration of an Auroville Unit is to contribute to the well-being and growth of Auroville, then therefore it should definitely contribute generously.
Addendum:
(vii) In this time of transition where we do not have sufficient funds to cover the budgets, maintenances for the children of Aurovilians working in Units should be covered by the Units. These maintenances can be included in the 33% as specified contribution, according to the levels approved by the Economy Group.
1. Definitions
In this Deed of Agreement:
1.1 Governing Board means the Governing Board of the Auroville Foundation.
1.2 Working Committee means the Working Committee of the Residents Assembly of the Auroville Foundation.
1.3 FAMC means Funds and Assets Management Committee constituted by the Residents Assembly of the Auroville Foundation.
1.4 ABC means the Auroville Board of Commerce of the commercial Units of the Auroville Foundation, constituted by the Working Committee under Sub-Section (4) of Section 20 of the Auroville Foundation Act 1988
1.5 Relevant bona fide working group means any working group created by the Working Committee under Sub-Section (4) of Section 20 of the Auroville Foundation Act 1988 delegated to oversee a non-commercial Trust
1.6 Trust means a Trust created by the Working Committee under Sub-Section (4) of Section 20 of the Auroville Foundation Act 1988 and in accordance with the provisions of the Indian Trust Act of 1882.
1.7 A Trustee is a person so named in the Trust deed or any further document issued in accordance with the provisions of the Trust Deed. There shall always be a minimum of two Trustees for every Trust. The Trustees shall manage the Trust properties for realising the objects of the Trust."
1.8 An Executive is a person appointed through a resolution of the Board of Trustees to actively manage the affairs of a specific activity of the Trust.
1.9 A Unit is an enterprise established for carrying out specific commercial or service or research activities, which may be defined under this Agreement between the Trustees of a Trust and the appointed Executives of the Unit.
2. Rules and Procedures
2.1 Appointment or change of a Unit Executive:
2.1.1 A Unit shall normally have a minimum of two Aurovilian Executives. Exceptions must be submitted to the ABC and FAMC for approval.
2.1.2 Any resident of Auroville whose name is in the Residents Register as provided for in the Auroville Foundation Act 1988 shall be eligible to be appointed as an Executive of the Unit by the Trustees when recommended by the ABC and approved by the FAMC. In exceptional cases, persons whose names are not in the Residents Register may be appointed as a Unit Executive through the same approval process.
The Trustees will appoint or remove executives on the recommendation of the ABC or other relevant bona fide working group and with the approval of the FAMC when vacancies arise in any of the following events:
a) resignation
b) death
c) bankruptcy
d) a person has been convicted of a major criminal offence under the Indian Penal Code.
e) continued absence of the executive for a period exceeding 180 days without prior agreement of the Trustees.
2.1.3 An Executive of a Unit may resign by giving a written notice to the Trustees. The Executive must submit proper accounts before the acceptance of the resignation can be considered. The resignation would be effective once it is accepted by the Trustees, is approved by the ABC or relevant bone fide working group and the FAMC and published in the "News&Notes" for a 14 day period of feedback.
2.1.4 An Executive can be removed when:
The Working Committee, in agreement with the FAMC and the ABC or other bone fide working group is convinced that an Executive needs to be replaced:
2.1.4a on the grounds of gross mismanagement, which includes the case where the annual accounts of the Unit, in the format stipulated by the Foundation and audited by a Chartered Accountant, are repeatedly not presented.
2.1.4b a person becomes mentally or physically incapable of functioning efficiently as certified by two medical practitioners.
2.2 Overall Supervision
Both the Trust and the Unit shall abide by all directives that may be issued in accordance with the Auroville Foundation Act.
3. Establishment of the Unit
Pursuant to the Act and rules stated above, the Auroville Foundation establishes . (hereafter referred to as "the Unit") under . Trust (hereafter referred to as "the Trust") on … (Date).
4. Trustees of the Trust
The current Trustees of the Trust (hereafter referred to as "the Trustees") are:
5. Executives of the Unit
The duly appointed Executives of the Unit (hereafter referred to as "the Executive[s]") are:
6. Powers and Responsibilities
This agreement sets down the respective powers and responsibilities of the Trustees and the Executives.
6.1 Aims and Objectives of the Unit:
6.1.1 To promote the ideals of Auroville.
6.1.2 To carry on the following activities: .
6.2 The Unit shall not undertake any new unrelated activity without the prior agreement of the Trust.
6.3 The Unit as part of the .. Trust shall remain relatable to Auroville Foundation and in all matters relating to Auroville shall act in conformity with the decisions of the Governing Board and the surplus income of the Unit shall be applied only towards the aims and objectives of Auroville.
7. Finance and Accounts
7.1 The Trustees shall by resolution delegate financial powers and set limits to financial powers of the executives, in accordance with guidelines to be formulated by the FAMC and ABC, so as to enable the Unit to function efficiently.
7.2 The Trustees shall review the delegated financial powers if so requested by the executives of the Unit. The Trustees shall give a decision within two months of receipt of such a request.
7.3 The Executives of the Unit will comply with all statutory requirements under Indian law for doing business, including paying relevant taxes and other dues.
7.4 Any purchase/sale/leasing/renting/mortgaging/pledging of immovable assets of the Auroville Foundation by the Unit shall be done only with the prior approval of the FAMC and the Governing Board whenever necessary in accordance with the provisions in the Auroville Foundation Act 1988 and the Auroville Foundation Rules 1997.
7.5 The Executives are authorized to open bank accounts for carrying on the activities of the Unit. Such accounts may be operated by any one or more of the Executives or their signatories as may be authorized by the Trust.
7.6 The Unit may receive donations in cash or in kind.
7.7 The Executives shall be authorized to enter into agreements with others, raise money for business, pledge movable assets, enter into collaboration with other firms and companies for technology or marketing tie up, etc., provided the same are within their financial power
7.8 The Executives shall maintain proper accounts and submit to the Trustees:
7.8.1 A certified copy of the balance sheet of the Unit as of the 31st March of the same year, by the date as requested by the Auroville Foundation and communicated by the FAMC.
7.8.2 A provisional balance sheet and/or trial balance of the Unit and any other financial reports requested by the Trustees, the ABC or relevant bone fide working group or the FAMC any time.
8. Management of the unit
8.1 The Trustees shall not interfere in the day-to-day management of affairs of the Unit.
8.2 The Executives will be authorized to take all such steps necessary in the best interest of the Unit.
8.3 The Executives with the approval of the Trustees and the ABC or other relevant bona fide working group will take any necessary action to settle all disputes, suits and other proceedings relating to the assets and liabilities of the unit.
9. Arbitration
Any dispute between the Executive(s) and the Trustees shall be referred to the ABC or relevant bona fide working group or a group nominated by the FAMC as mediator. If the mediation fails, the dispute shall be referred to the FAMC for a decision. The decision of the FAMC shall be final and binding on both parties.
10. Closure of the Unit
The assets and liabilities of the Unit shall be turned over to the Trust if:
10.1 The Unit has been dormant for more than one financial year.
10.2 The Executives decide with the agreement of the Trustees, ABC and the approval of the FAMC to close the Unit.
10.3 The Trustees decide, in consultation with the Executives, with approval of the ABC to close the Unit.
10.4 The Working Committee, FAMC and the ABC or relevant bona fide working group together come to the agreement, with or without the recommendation of the Trustees and/or the Executives, to close the Unit, because it becomes obvious that the unit is heading for insolvency.
In case of disputes clause 9 would apply.
11. Validity of this Agreement
11.1 This agreement shall be binding on all present and future Trustees and Executives of the ____________________ Trust and ____________________ (Unit) respectively.
11.2 The Trustees and the Executives may only alter all or any of the provisions of this agreement with the prior approval of the FAMC and the Governing Board.
Signed by the parties this . day of . 20
Trustees: Executives:
Name, Auroville Name, Signature Name, Auroville Name, Signature
.. ..
.. ..
.. ..
For the ABC/Relevant bona fide working group:
Name, Auroville Name, Signature
For the FAMC:
Name, Auroville Name, Signature
[FINALLY DURING THE JUST CONCLUDED VISIT OF DR.KARAN SINGH AS REPORTED IN THE HINDU of 28 th Monday 2008, Dr.KARAN SINGH IS HAPPY THAT THE UPA HAD WON TRUST VOTE. THIS THE LEADER OF OPPOSITION MR.LAL KRISHNA ADVANI MUST TAKE NOTE OF.A POLITICIAL APPOINTEE SPEAKS LIKE POLITICIAN WHILE CLAIMING TO BUILD AN INTERNATIONAL CITY TO HOUSE FOREIGNERS IN INDIAN SOIL.... N.Nandhivarman, General Secretary Dravida Peravai]