Lokpal Compliance by NGOs

Procedure to be followed by office bearers of NGOs to comply with latest amendments under The Lokpal & Lokayuktas Act 2013

The Lokpal & Lokayuktas Act 2013 was one of the last legislation enacted by UPA Government  before demitting office in 2014, under pressure from the anti-corruption movement spearheaded by Shri Anna Hazare at the time.

The Act is to provide a constitutional body for probing corruption in the Government  including Prime Minister, Minister, legislature and other public servants. S. 14 (g) & (h) identified in what situations officials of NGOs can be covered.

S.14 (g) covered all bodies including NGOs which receive support from the Government for a specified amount. It covered any person who has been a director, manager, secretary or other officer of every society or association of persons or trust, by whatever name called, wholly or partly financed by the Government and the annual income of which exceeds such amounts as the Central Government may by notification, specify. This the Central Government has now by notification[1] has notified to be Rs 1 crores.

While Director, manager, secretary or other officer of every society or association of persons or trust has not been defined, it is clear that it covers persons who are in a position to take day to day decisions, meaning office bearers and key full-time officials of an NGO, such as CEO/ED, etc. are likely to be covered by the Act.

Similarly S. 14 (h) classifies officials of a Voluntary Organisation receiving more than Rs 10 lakh through FCRA in a year as public servants.

For the purposes of monitoring public servants, S. 44 of the Act requires filing of annual return of assets and liabilities (base being 31^st March) by 31^st July of that year. Assets and liabilities are to include those of spouse and dependent children. The exact provisions are given in the accompanying Box.

The Government has now come out with a notification[2] appointing the competent authority for the purposes of compliance to S.44[3] by public servants as classified under S.14(g), (organizations receiving support from the government). As per this the Minister Incharge of the Ministry which provides funds to NGOs would be the competent authority. In case of multi-ministries providing the grant, the competent authority would be the Minister Incharge of the ministry providing the largest grant. Notification further clarifies that the competent authority may change from year to year according to the grant amount and the ministry providing the grant. It also states that a copy of annual return filed with the ‘competent authority’ may be filed with other ministries who have given the grant, ostensibly for information only, since the other ministries are not the compliance authority. Return will need to be filed till the grant provided has not been fully exhausted.

Similarly to enable compliance by public servants as classified under S.14 (h), the Central Government  by notification[4] on 20^th June 2016 has notified Minister Incharge of Ministry of Home Affairs as the competent body (organizations receiving more than Rs 10 lakh grants under FCRA). The notification also states that the returns will continue to be filed till such time that the donation amount so received is not fully exhausted.

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Socio Research & Reform Foundation (NGO)
512 A, Deepshikha, 8 Rajendra Place, New Delhi – 110008
e-mail: socio-research@sma.net.in; website: http://www.srr-foundation.org

[1] SO 2155 dt 20-6-2016
[2] SO 2154 dt 20-6-2016
[3] Although the notification does not per se mentions S.44, however the purpose of the competent authority to comply with as stated in the notification makes it very clear that it is covering S.44 of this Act.
[4] SO 2156 dt 20-6-2016