While examining the Model bye laws 2014 applicable in housing cooperative societies in Maharashtra our expert Mr I C Naik has found some goof-ups especially in the roles of Treasurer and Auditor.
Critical importance of the Financial management of cooperative housing societies has been recognized by the CC & RCS in the very first year of the 21st Century. In substitution of Bye-Law No 124(a) of the 1984 Model, with the Bye-Law No 126(a) one more post of an office bearer namely the Treasurer has been created IN Model Bye-laws 2001. In Model 2009 and 2014 also this post is required to be filled up by every society. The mockery of this post is that functions entrusted to the Secretary are continued to be the same and no responsibility has been shifted to the Treasurer.
In order to reduce the burden of the Secretary and allocate appropriate responsibilities to the Treasurer, it is suggested that following responsibilities are expressly assigned to the Treasurer by amending the concerned bye law suitably and also listing out immediately after the list of functions and responsibilities of Secretary.
1 To compute rates of contribution to various funds and make a presentation to the Committee for vetting before asking approval of the general body meeting. 13
2 To prepare annual plan of utilization of funds and make a presentation to the Committee for vetting before asking approval of the general body meeting. 14
3 To prepare investment proposals of the surplus funds and make a presentation to the Committee showing estimated income.15
4 To facilitate inspection of accounts by members.25
5 To verify the dues from members resigning membership and inform the Secretary accordingly. 29-32
6 To organize acquisition of the shares and interest of the member in the capital/property of the society and pay him the value thereof as provided under the bye-law No. 68. 33,38,57
7 To compute the Premium payable by transferor 40(e)(vii)
8 To approve the amount spent by the society on repairs to be recoverable from the member concerned. 50( c )
9 To prepare and issue demand notices for payment of the society’s charges. 70
10 To bring cases of defaults in payment of the society’s charges to the notice of the Committee. 71
11 To compute parking charges and make a presentation to the Committee for vetting before asking approval of the general body meeting [Bye-Law No 83/84] 83, 84
12 To prepare the statement of accounts in form ‘N’ prescribed under Rule 62(1) of the Rules, showing the Income And Expenditure during the preceding cooperative year and the Balance Sheet as at the close of the preceding co-operative year. 95(b) 146(a)
13 To prepare Audit Rectification to the extent it relates to finances of the Society. 95(d)
14 To prepare an Annual Budget for the next Financial Year for consideration of the managing committee 95(e)
15 To ensure that banking account is opened and operated upon in compliance of Bye-Laws 113
16 To report to the managing committee if any of its member has defaulted in payment of Society dues 117(b)
17 To maintain account books and records pertaining to the Society‘s finances. 141, 143
18 To ensure that daily cash on hand does not cross ceiling of Rupees 5000/- 144
19 To ensure that payments exceeding Rupees 1500/- are made by Account Payee Cheque. 145
20 To prepare financial statements of a cooperative year before May 15 of the next cooperative year. 146(a)
21 To recommend to the managing committee appropriation of Surplus. 148
22 To produce account of the society before Auditors. 152
23 To prepare the audit rectification reports in the respect of audit memos received from the Statutory and Internal Auditors. 153
24 To report to the managing committee if repair costs were to exceed the ceiling fixed for the managing committee 157(b)
25 To recommend to the managing committee to get the approval of members in the general body meeting, from time to time the limit up to which requirement of calling for tenders is waived. 157(c)
26 To open the tenders in the meeting of the Committee, and prepare draft of Committee’s report along with the draft of the terms and conditions, in consultation with the Architect of the Society to place the same before the meeting of the General Body for its decision. 157(i)
In two aspects this Model makes grave errors.
1.Bye-Law No 151(a) prohibits the annual general meeting to appoint same statutory auditor for more than two consecutive years though proviso to Sub-Section (2A) of Section 75 of the M C S Act 1960 permits a tenure of three years for the same auditor.
ii. Bye-Law No 151( c ) authorizes annual general meeting to fix the remuneration of auditors despite the fact that clause (f) of Sub-Section (1) of Section 81 of the Act the legislature requires the remuneration to be fixed by the state under Rules.
New Rule 74 provides QUOTE: “(a) Remuneration of the auditor or auditing firm who has conducted audit of a society shall be borne by the society and shall be at such rates as may be notified by the Government or the authority authorised in this behalf from time to time depending upon the class of societies and their financial parameters UNQUOTE
Alert: Bye-law 151 (a) and (b) both are repugnant to the Act and Rules as aforesaid. How can housing societies adopt such Bye-Laws as there is an express embargo in that behalf under section 9 of the Act?