CSR FUND UTILIZATION AUDIT

Before we jump on the the topic CSR Fund Utilization Audit, let us first understand what is CSR and why it is important for corporates in India.

As per Companies Act 2013, every eligible company required to spend at least 2% of their average net profits towards Corporate Social Responsibility (CSR).

The company can spend the CSR fund by itself or additionally, it can join hands with other companies for undertaking project, programme or CSR activity in line with listed activities for the social cause.

Fund Utilization Audit refers to an activity of reviewing the utilization of CSR fund for the agreed purposes, judiciously as well as in transparent manner.

Steps of Conducting Fund Utilization Audit

Understanding

Fund Utilization review generally starts by reviewing agreement terms, goals and objectives of Grant/Donation, budget etc.

Review

• Gather information like expense ledgers, expense supportings, financial reports, Project progress reports, relevant policies/SOPs etc.
• Review of actual expenses, their supporting to check if the funds are being spend for agreed purpose and judiciously.
• Review the progress on goals along with supporting document to check its correctness
• Review the budget monitoring process
• Review the financial reporting process to determine that correct information reported

Confirm

In case you have some findings while reviewing, then you will be discussing those with the responsible persons and confirm the findings.

Reporting

Once the findings are discussed with responsible persons and you are confirmed about the findings. Prepare a report with detailed finding/observations, their impact, reviewers’ recommendation and take management comments about cause and corrective action plan along with timeline.

Final report presented to the management of the company who appointed the reviewer.

Key Benefits of Fund Utilization Audit

• It helps align the company’s CSR strategy with company’s long-term vision.
• Helps bringing transparency in the process and financial reporting
• Gives confidence & control to management
• Identification and correction in timely manner

How can Onlinecoprserv.om can help in CSR Fund Utilization Audit?

We at Onlinecorpserv.com have a team of expert auditors who are not only skilled but are experienced in conducting such review and finding inconsistencies in the process, transactions, reporting etc.

You can contact us for Fund Utilization Audit done or for free consultation regarding this. We are happy to help you.