Co-operative Society Audit Checklist — Membership, Loans, Reserves
CO-OPERATIVE SOCIETY AUDIT CHECKLIST
Society: {{client_name}} · Registration no.: {{society_reg_no}} · Governing Act: {{state_act}} · Year ended: {{period_end}} · Prepared by: __________ · Reviewed by: __________
Framework note: co-operative societies are governed by STATE law — each State's Co-operative Societies Act and Rules, as amended after the 97th Constitutional Amendment (2011). Provisions on audit timelines, reserve appropriations, dividend caps and rectification differ from state to state. Every threshold in this checklist is therefore stated as the common pattern and must be verified against {{state_act}} and the society's registered bye-laws before it is relied upon. Multi-state societies fall under the Multi-State Co-operative Societies Act, 2002 instead.
Reference: CORAA's narrative guide to this engagement — scope, appointment, audit classification and reporting — is at coraa.ai/audit/cooperative-society-audit. Use this checklist as the fieldwork companion to that guide.
Part A — Registration, bye-laws and audit classification
| Particulars | Details / verification |
|---|
| Registration certificate number and date; registered address matches records | |
| Class of society (credit / consumer / housing / marketing / processing / multi-purpose) per registration | |
| Registered bye-laws on file, including every amendment approved by the Registrar | |
| Auditor appointment valid under the State Act (Registrar's panel / general-body appointment, as the Act prescribes) | |
| Audit classification awarded last year (many states grade societies A / B / C / D on audit findings — where {{state_act}} uses grading, note last year's class and the basis for this year's proposed class) | |
| Statutory audit completed within the period the State Act prescribes (commonly a fixed number of months from year-end — verify the period under {{state_act}}) | |
Part B — Membership and share capital
- ☐ Member register (I-register or state equivalent) agrees with the share ledger — count of members, shares held, nominal value.
- ☐ Admissions and resignations during the year approved by the managing committee and minuted.
- ☐ Share capital movement reconciled: opening + issues − refunds/transfers = closing; share refunds within limits set by the Act/bye-laws.
- ☐ Nomination register maintained; transfers to nominees on death processed per bye-laws.
- ☐ Nominal / associate members distinguished from ordinary members where the Act restricts their rights.
Part C — Loans to members (credit societies)
| Item | Tested (Y/N) | Observation |
|---|
| Loans sanctioned only to members, within the individual maximum borrowing limit in the bye-laws | | |
| Loan applications, sanctions and disbursements documented; committee minutes support each sanction | | |
| Interest computed at the sanctioned rate; penal interest applied per bye-laws | | |
| Overdue analysis prepared — member-wise ageing of principal and interest overdue | | |
| NPA / overdue classification and provisioning per the norms the Registrar / State Act prescribes for this class of society | | |
| Loans to committee members and their relatives identified and tested for bye-law compliance | | |
| Surety / security documentation on record for secured loans | | |
Part D — Deposits and borrowings
- ☐ Deposits accepted only from members (or as the Act permits); deposit register agrees with the general ledger.
- ☐ Total borrowings + deposits within the society's maximum borrowing limit fixed under the Act/bye-laws.
- ☐ Interest on deposits accrued and tested; matured deposits identified and followed up.
- ☐ Liquid-asset / reserve-fund investment requirements under {{state_act}} tested (mode and custody of investments).
Part E — Statutory reserves and appropriation of profits
| Appropriation | Requirement (verify against the State Act) | Complied (Y/N) |
|---|
| Statutory reserve fund | Most State Acts require a minimum share of net profit to be carried to the reserve fund each year — commonly one-fourth (25%), e.g. Sec 66 of the Maharashtra Act, with the Registrar empowered to reduce it (not below one-tenth in Maharashtra). Verify the percentage under {{state_act}}. | |
| Dividend on shares | State Acts / Rules cap the dividend a society may declare (a fixed maximum percentage — verify the cap under {{state_act}} before approving the appropriation). | |
| Education fund / other statutory contributions | Several State Acts require an annual contribution to a co-operative education fund — verify applicability and rate. | |
| Other funds (building, charity, member-welfare) | Permitted only as the Act/bye-laws allow, after the statutory appropriations. | |
Part F — Rectification report and returns to the Registrar
- ☐ Previous year's audit memorandum reviewed; each defect/objection traced to the society's AUDIT RECTIFICATION REPORT filed with the Registrar in the form and within the time {{state_act}} prescribes (commonly around three months from receipt of the audit report — verify).
- ☐ Defects still open carried into the current-year audit memorandum with ageing.
- ☐ Annual returns filed with the Registrar within the prescribed period (annual accounts, list of members, and the other returns the Act lists).
- ☐ AGM held within the statutory deadline; audited accounts and audit report placed before it.
- ☐ Registrar's inspection / inquiry orders (if any) during the year reviewed and compliance tested.
Part G — Conclusion
Proposed audit classification (where {{state_act}} grades societies) and overall conclusion: ____________________________________________
| Prepared by | Reviewed by | Engagement partner |
|---|
| | |
