AUDIT OF CHARITABLE INSTITUTIONS:

In the case of the audit of a charitable institution, attention should be paid to the following matters
A) GENERAL:
1. Studying the constitution under which the charitable institution has been set up. It may be registered as a
society under the Societies Registration Act, 1860, as a company limited by guarantee or as a trust.
2. Verifying whether the institution is being managed in compliance with the law under which it has been set up.
B) SUBSCRIPTIONS AND DONATIONS:
1 . The auditor should obtain all receipt books covering the period under review and check whether that
adequate control is imposed over unused receipt books.
2 Obtaining the and agreeing them with the total collections shown in the accounts with reference to the,
a) Acknowledgment receipts issued
b) Entries made in the in cash book
c) Printed list of subscriptions and donations, if any and
d) Any figures published in reports, etc, if any issued by the charity.
3 Examine the internal controls over collections and ensure that all collections have been fully accounted for
and deposited in the bank regularly and promptly.
4 Ascertaining, if any, the changes made in amount of annual or life membership subscription during the year.
C) LEGACIES AND GRANTS:
1 Verify any Government or local authority grant with the relevant papers of grant. If any expense has been
disallowed for purposes of grant, ascertain the reasons and compliance thereof.
2 Vouching the amount received with the relevant ordinance receipts and minute books.
D) INVESTMENTS INCOME:
1 Vouching the amounts received with counterfoils of dividend and interests and schedule of investments by
ma cial enquiries into any investments held for which no dividend or interest received. And also inspect
securities physically.
2 Checking that the appropriate dividend has been received subsequently where any investment has been sold
ex-dividend or purchased cum-dividend.
E) RENTS:
1 Examining the Register of rents and tenancy agreements to verify the amounts of the rents, and the due dates.
2 Vouching the rents received with reference to Rent register, counterfoils of receipt books and entries in the
cash book.
F) SPECIAL FUNCTIONS:
1 Vouching gross receipts and outgoings in respect of any special functions, e.g. concerts, dramatic performance,
etc., held in aid of the charity with such vouchers and cash statements as are necessary.
2 In particular, verifying that the proceeds of all tickets issued have been accounted for, after making the
allowance for returns.

G) INCOME TAX REFUNDS: Confirm that the refund of taxes deducted from the income from investment
(interest on securities, etc.) has been claimed and recovered since the institutions are generally
exempted from the payment of income-tax.
H) EXPENDITURE:
1 Vouching payment of grants:
Verifying that the grants have been paid only for a charitable purpose or purposes falling within the purview
of the objects for which the charitable institution has been set up and
No trustee, director or member of the Managing Committee has benefited there from either directly or
indirectly.
2 Verifying the schedules of securities held, as well as inventories of properties both movable and immovable
by inspecting the securities and title deeds of property and by physical verification of the movable
properties on a test-basis.
3 Verifying the cash and bank balances.
4 Ascertaining that any funds contributed for a special purpose have been utilised for the purpose.

AUDIT OF EDUCATIONAL INSTITUTION

A) GENERAL:
1 . Examination of the basic documents: Verify the Trust Deed or Regulations in the case of school or college and
in the case of a university, refer to the Act of Legislature and the Regulations framed there under.
2 Reading the minutes: Read through the minutes of the meetings of the Managing Committee or Governing
Body, nothing are affecting accounts to see that these have been duly complied
specially the decisions as regards operation of bank accounts and sanctioning of expenditure.
B) FEE RECEIVED FROM STUDENT
1 . Check names entered in students' Fee Reqister for each month or term, with the respective class registers,
showing names of students on rolls and test amount of fees charged.
2. Check fees received by comparing counterfoils of receipts granted with entries in the cash book and tracing
the collections in the Fee Register to confirm that the revenue from this source has been duly accounted
for.
3. Total up the various columns of the Fees Register for each month or term to ascertain that fees paid in advance
have been carried forward and the arrears that are irrecoverable have been written off under the sanction
of an appropriate authority.
4. Check admission fees with admission slips signed by the head of the institution and confirm that the amount
had been credited to a Capital Fund, unless the Managing Committee has taken a decision to the contrary.
5. See that free studentship and concessions have been granted by a person authorized to do so, having regard
to the prescribed Rules.
6. Verify that there operates a system of internal check which ensures that demands against the students are
properly raised.
7. Confirm that fines for late payment or absence, etc., have either been collected or remitted under proper
authority.
8. Confirm that hostel dues were recovered before students' accounts were closed and their deposits of caution
money refunded.
9. Report any old heavy arrears on account of fees, dormitory rents, etc, to the Managing Committee.
10. Confirm that caution money and other deposits paid by students on admission have been shown as
liability in the balance sheet and not transferred to revenue.
C) LEGACIES GRANTS AND DONATIONS:
1 . Verify any Government or local authority grant with the relevant papers of grant. If any expense has been
disallowed for purposes of grant, ascertain the reasons and compliance thereof.
2 Vouching the amount received with the relevant correspondence, receipts and minute books.
3 Vouch donations, if any, with the list published with the annual report. If some donations were meant for any
specific purpose, see that the money was utilized for the same purpose.
D) INVESTMENTS INCOME:
1 . Vouching the amounts received with the counterfoils of dividend and interests and schedule of investments
by making special enquiries into any investments held for which no dividend or interest has been received.
And also inspect securities physically.
2 Checking that the appropriate dividend has been received subsequently where any investment has been sold
ex-dividend or purchased cum-dividend.
3 See that the investments representing endowment funds for prizes are kept separate and any income in excess
of the prizes has been accumulated and invested along with the corpus.
E) RENTS:
1 Examining the Reqister of rents and tenent agreements to verify the amounts of the rents, and the due dates.
2 Vouching the rents received with r e e to Rent register, counterfoils of receipt books and entries in the cash
boo
F) INCOME TAX REFUNDS: Confirm the refund of taxes deducted from the income from investment (interest on
secure• tc.) has been claimed and recovered since the institutions are generally exempt from the
payment of income-tax.
G) EXPENDITURE:
1 . Vouch all capital expenditure in the usual way and verify the same with the sanction for the Committee as
contained in the minute book.
2 Vouch in the usual manner all establishment expenses and enquire into any unduly heavy expenditure under
any head.
3 See that increase in the salaries of the staff have been sanctioned and minuted by the Committee.
4 Ascertain that the system ordering inspection on receipt and issue of provisions, foodstuffs, clothing and other
equipment is efficient and all bills are duly authorized and passed before payment.
5 Verify the annual statements of accounts and while doing so see that separate statements of account have
been prepared as regards Poor Boys Fund, Games Fund, Hostel and Provident Fund of Staff, etc.
6 Verify the inventories of furniture. stationery. clothinq, provision and all equipment, etc. These should be
checked by reference to Inventory Register and values applied to various items should be test checked.