Socio Research & Reform Foundation

Workshop on Facilitating Compliance with Lokpal and Lokayukta Act 2013 organized by Socio Research & Reform Foundation (NGO)-SRRF

SRRF’s Centre for Responsible CSO Boards (CSObGOV) organized  a half day session Facilitating Compliance with Lokpal Act by NGOs at India International Centre (Annexe) on Thursday 7th July 2016 form 2:00 PM to 5:PM

The workshop discussed the latest provisions in the Lokpal & Lokayukta Act 2013. It particularly looked at the applicability of the Act to NGOs, explaining the provisions, going through the format of Returns prescribed (field by field) and consequences of non-compliance. The aim of the workshop was to facilitate NGOs comply with the legislation and bring clarity on this issue to the Sector.

There were 70 (+) participants at the workshop from CSOs (NGOs), and individuals involved and working in this sector.

After a welcome by the President of SRRF, Mr Vijay Sardana, which set the context for the consultation in the light of the need for CSOs to be accountable and transparent, since they performed such an important development role in the country. Mr Sardana highlighted the fact that the Act could be a way to strengthen Boards with strong and good governance and leadership. His note was then added to by CA Subhash Mittal, by highlighting the fact that the Act and its ramifications needed to be looked at in the context of a difficult environment for NGOs and the need for greater accountability and transparency, and ways and means to bring a positive focus on the good development work that CSOs (NGOs) do.

First Technical Session by Mr Mittal covered – major provisions of the Act; applicability to NGOs; annual return filing; consequences of not filing; and current status of implications.

Mr Deepak Bansal then went into the details of the preparation of the annual returns and took the audience through this part, section by section.

The entire proceedings were interspersed with lively questions and repartees.

Some of the key concerns that were voiced were as follows:

• This Act seeks to cover individuals who either work in CSOs (NGOs) or are Board and Executive Committee members- the obligation to report was not of the organization but of the individual.
• As of now the returns have to be filed in with the competent authority mentioned in the Act by 31^st July 2016; most people felt this was unrealistic
• Board members were resigning, as would HNIs (High Net-worth Individuals) who have joined these Boards to contribute to development of society through resources and their expertise. They are not remunerated for these efforts in the NGOs that they support
• Putting this information on websites of MHA violates the confidentiality of this information for the individual concerned
• Many aspects of the Act are linked to interpretation for example to what extent staff is covered and which staff. Are all Board members covered or only those who hold the office of a Secretary, Treasurer or Chairperson.
• NGOs should take up the issues with the right and competent authority in the MHA – appreciating the ambit and focus of the Act but asking for clarifications as well as why it should apply only to CSOs (NGOs) who only deal with limited resources as opposed to the Corporate sector and its office bearers
• The implementation has been postponed many times when the Act earlier applied only to Public servants who were Government employees
• A final recommendation was to join up Groups on this issue and develop a concrete action plan to take to the right authority in the Government with recommendations for changes ASAP – include the comments from this workshop- in a preliminary letter to this authority followed by a meeting.

The session closed with a vote of thanks by Ms. Alka Pathak, Member, Core Team, SRRF’s Centre for Responsible CSO Boards and some high tea for the participants.

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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

Dear Members,

Now that NGOs are under the purview of Lokpal Act, many clarifications are required:

1. What ‘executive’ mean as per the Act? Would it mean ALL staff?
2. Would all trustees become ‘executives’ or only those who are remunerated by AT?
3. Do the ‘executives’ have to fill in the returns every year till they are with the Trust or only during the year when the Trust received more than “One Crore only” from the Central Government or “Ten Lakhs” from foreign source?
4. What is the grant from Central Government? Only if directly received or through a State Health Society, NGO partner? WOuld it be applicable to all those partners who received parts of this One Crore/ten Lakhs also through the Trust?
5. What are the Return forms? If not available, when they would be?
6. What is included in the term Wealth, does it mean immovable and movable property, investments, ornaments, cash and bank? How to value the wealth? Value at the time of purchase? Or current value? Wealth of only the ‘executives’ or ‘the family’ or ‘the spouse’?

Kindly advice.

Thanks and regards

Dhruv Mankad

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