NGO Audit Services in India

What is an NGO Audit?

An NGO Audit is an independent examination of the financial statements, books of accounts, and compliance records of a Non-Governmental Organisation (NGO).
The audit ensures that:

• Funds are used for the intended charitable or social purposes
• Statutory compliance is maintained under Indian laws
• Donors, government authorities, and stakeholders receive transparent and credible reports

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Why is NGO Audit Important?

• Ensures financial transparency and credibility
• Builds trust with donors, funding agencies, and stakeholders
• Complies with Income Tax Act, Societies Registration Act, Companies Act (for Section 8 Companies), and Foreign Contribution Regulation Act (FCRA)
• Avoids penalties, cancellation of registration, or loss of donor confidence
• Strengthens internal financial control

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Types of NGO Audits

Type of Audit	Purpose	Governing Law / Requirement
Statutory Audit	Mandatory for NGOs registered as Trusts, Societies, or Section 8 Companies	Trust/Societies Act, Companies Act, Income Tax Act
Tax Audit	Applicable if turnover exceeds limits under Income Tax Act	Section 44AB of Income Tax Act
FCRA Audit	Mandatory for NGOs receiving foreign contributions	FCRA, 2010
Internal Audit	To review internal controls and governance	Voluntary but highly recommended
Donor-Specific Audit	To meet conditions imposed by funding agencies	Donor agreements & MoUs

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Key Laws & Compliances Checked in an NGO Audit

1. Income Tax Act – Section 12A/12AB registration, Section 80G approval, filing of ITR-7
2. FCRA Compliance – Registration/renewal, Form FC-4 filing, proper utilisation of foreign funds
3. State-specific laws – Trust Act / Societies Registration Act
4. Companies Act, 2013 – Applicable for Section 8 companies, including ROC filings
5. Donor agreements – Fund utilisation reporting as per donor requirements

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Documents Required for NGO Audit

• Registration certificate & trust deed / memorandum of association
• Governing body meeting minutes
• Books of accounts (cash book, ledger, bank book)
• Bank statements & passbooks
• Details of grants, donations, and funding agreements
• Utilisation certificates for grants
• Details of foreign contributions (if applicable)
• Fixed asset register & inventory records
• Income tax filings and returns
• Previous years’ audit reports

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NGO Audit Process

1. Understanding the NGO’s Structure – Legal form, activities, and funding sources
2. Verification of Books & Vouchers – Checking accuracy of records
3. Review of Fund Utilisation – Ensuring money is spent as per objectives
4. Compliance Check – Income Tax, FCRA, and other applicable laws
5. Preparation of Audit Report – Independent opinion on financial statements
6. Advisory for Improvements – Suggesting better control mechanisms

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Penalties for Non-Compliance

• Loss of tax exemptions under Section 12AB / 80G
• Penalties under FCRA for foreign fund violations
• Legal action from donors or government bodies
• Loss of credibility with beneficiaries and funders

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Benefits of Getting Your NGO Audited by Calculus

• Specialised expertise in NGO sector compliance
• End-to-end audit and compliance services (Income Tax, ROC, FCRA)
• Transparent, detailed audit reports acceptable to donors and authorities
• Advisory on strengthening internal controls and fund management

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