Financial Audit of an Apartment – Webinar Takeaways

society audit

It is officially time for housing communities/societies to turn their attention to auditing their books for the previous financial year as part of society audit. ADDA conducted a webinar on Book Closure and Financial Audit of an Apartment on Saturday, July 31st, 2021 with a panel of experts who talked about necessary items to keep ready before a society audit, best practices to avoid penalties, bye-laws to follow etc.

The panel consisted of:

  1. Ms. Disha Koyande, CA, Founder of D.D. Koyande & Co.
  2. Mr. Sunil M Deshpande, Consultant for Cooperative Housing Societies
  3. Badri Vishal Toshniwal, CA-IPCC/BCOM
  4. Sunil A, Customer Success Manager, ADDA

The Webinar Takeaways for Book Closing and Financial Audit of an Apartment

Important items to be kept ready before conducting a Society Audit

  • AGM Appointment of Auditor by order
  • Management Presentation letter
  • Audit Sheet (Current Committee, Their Designation, etc.)
  • Certified/Draft Balance sheet with all supporting reports
  • Internal Audit Report
  • Handover Audit Report. (If Any)
  • Previous Year Audit Report
  • Previous Year Submission of Report
  • Land Conveyance, Lease Deed
  • Details of election if Any
  • Resignation and admission of committee
  • Eligibility of committee and strength
  • Managing committee list designation, Flat No’s, etc.
  • Staff List
  • Debtors Complaint, Levy of interest
  • Statutory Registers
  • Insurance Policies
  • Minutes Books (GBM/AGM/SGM Minutes)
  • Any other details asked by the Auditors

Best Practices to Avoid Penalties in Society Audit

In accordance with the Income Tax Act

  • Deduct and pay TDS on 7th of Next Month
  • File TDS Return in time
  • Issue TDS Certificates
  • File Income tax return within due date ( 30th Sept)
  • File GST Return (GSTR 3B & GSTR 1) Within Due Date
  • Submit Annual Return within due date (30th Sept) 

The Q&A Session:

Q. In case the committee is reconstituted through co-option route ( no elections held) whether this shd also be the area of concern of Audit?

A: Yes, it is the area of concern of Audit. Auditor looks into both Financial and Non financial audit and constitution of the committee.

Q. Is there a format for complaint register?

A: As such there is not format for complaint register, However, complaint register should be binding.

Q. Do all housing societies have to charge GST on its monthly maintenance charges?

A: Maintenance charges paid by residents to the Resident Welfare Association are exempt up to Rs.7,500. In case the amount charged exceeds Rs.7,500 per month per member, GST is chargeable on the entire amount charged.

Q. What happens if the audited books of accounts are not submitted to registrar in time. Does the society get deregistered?

A: Yes, the society will get deregistered if the society don’t submit the audited books of accounts to the registrar in time. Also the society is subject to a penalty.

Read about Society Bye-laws on Audit Accounts of the Society here.

Contact us at sales@adda.io if you want to choose ADDA as your Society’s Accounting module.

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