FCRA – Goes further online NGO’s – Now to have Higher Disclosure Norms

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FCRA,  essentially a Security legislation administered by the Ministry of Home Affairs to see that the Charity route of foreign funding is not a threat to National security. In recent months, it has come under controversy. On the one hand, alleged to be an instrument to control activists funded from overseas as also for mass cancellation of registrations due to non-compliance of return filing as per FCRA  obligations. The NGO community has also had their own concerns on the quality and efficiency of FCRA administration such as returns filed but not received by the FCRA Dept, the protracted processes of obtaining registration or renewals or any issue resolution.

On December 14th, 2015, the FCRA was amended to mandatorily bring it online only, be it for Registration,  renewals or return filings. Higher disclosure requirements by the NGO and their Banker who receives foreign funds and online intimation of any material changes in the NGO’s governance and administration.

The following are the key features of the December 14th amendment :

FCRA Application

Application for registration, renewal, obtaining prior permission for acceptance of foreign contribution must now be made online in Form FC 3 Application needs to be digitally signed. There is no need for posting hard copies. Fees can be paid online through the payment gateway.

This is a welcome improvement and hopefully all the complaints from both sides of returns filed but not received, notices sent and not received would be a thing of the past.

NGO’s  to disclose all foreign donations

I.Quarterly: Every NGO  receiving foreign contribution is required to place details of foreign contribution received i.e., name, the address of donors, date of receipt and amount received on its official website or on Government website within 15 days following the last day of the quarter.

II.Annual: Every NGO  receiving foreign contribution is required to place the audited statement of accounts on receipts and utilization of foreign contribution, income and expenditure statement, receipt and payment account and balance sheet for every financial year beginning from April 1st, within nine months of the closure of financial year ie, by December 31st, on its official website or on Government website.

All NGO’s who collect foreign donations would now need to ensure that they have a website and are constantly updating their foreign donor contribution information.  At the moment the notification is silent on the Govt website.

Banks to disclose within 48 hours

Banks to report to the Government any foreign contribution received by any person including those registered or having prior permission under FCRA within 48 hours of receipt.

It’s quite onerous on bankers but from a regulatory perspective a powerful tool to sniff out any illegal foreign funding.

Returns Filing

I.Annual Return: Form FC 4: Online filing with a digital signature and scanned copies of income and expenditure statement, receipt and payment account and balance sheet for every financial year within Dec 31st.

II. For organizations registered under FCRA but where no foreign contribution has been received or utilized during the financial year, do not have to file certificate issued by a chartered accountant, or Income and expenditure account, receipt and payments account and balance sheet though they need to continue filing FC 4.

Material changes in NGO governance team or its administration – Form FC 6

Any change of designated bank account, name, address, aims, objectives or key members of the association (50% or more) have to be intimated through the online filing of Form FC 6 within 15 days of the change. With increasing globalization of philanthropy, each country attempting to formulate their own regulatory framework around it, these administrative technology advancements on FCRA is a progressive step forward.

read more, The Lokpal and I

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