School Audit Checklist — Fees, Grants, Hostel Ledgers, 12AB/10(23C)
SCHOOL / EDUCATIONAL INSTITUTION AUDIT CHECKLIST
Institution: {{client_name}} · Run by (trust/society/company): {{managing_entity}} · Year ended: {{period_end}} · Prepared by: __________ · Reviewed by: __________
Purpose: an audit programme for schools, colleges and other educational institutions — fee-cycle integrity, grant utilisation, activity sub-ledgers, the income-tax exemption framework (Sec 10(23C)/12AB), FCRA where foreign funds exist, and state fee-regulation compliance. Fee regulation and grant conditions are STATE-specific — verify against the applicable state education Act/fee-committee orders.
Part A — Fee income: register vs bank
| Item | Tested (Y/N) | Observation |
|---|
| Fee register (student-wise demand) built from the admission roll × approved fee structure — total demand recomputed | | |
| Fee receipts traced to bank: register collections vs bank credits reconciled month-wise; cash collections minimised and banked intact | | |
| Concessions, waivers and sibling discounts authorised per policy and approved by the management | | |
| Fee arrears: student-wise ageing prepared; long-pending arrears reviewed for recoverability | | |
| Fees collected in advance (next session) deferred, not recognised as current-year income | | |
| Fee structure charged matches the structure approved by the state fee-regulation authority / committee where the state regulates fees — verify the applicable order | | |
Part B — Government grants and utilisation
- ☐ Grant-wise register maintained: sanction letter, purpose, conditions, amounts received and utilised.
- ☐ Utilisation certificates (UCs) filed in the prescribed form and on time; unspent balances treated per the sanction (refund / carry-forward).
- ☐ Grant money spent only on the sanctioned purpose; capital vs revenue grants accounted consistently.
- ☐ Salary grants (aided institutions) reconciled to the approved staffing pattern and pay scales.
Part C — Scholarships and pass-through money
- ☐ Government scholarships received on behalf of students identified as PASS-THROUGH — credited to students / adjusted against their fees, not recognised as institutional income.
- ☐ Scholarship register reconciled: received vs disbursed vs pending; undisbursed amounts followed up.
- ☐ Caution money / security deposits held as liabilities and refunded per policy; long-unclaimed balances reviewed.
Part D — Hostel, transport and canteen sub-ledgers
| Activity | Separate sub-ledger kept (Y/N) | Collections reconciled (Y/N) | Surplus/deficit computed (Y/N) |
|---|
| Hostel (room rent, mess collections vs mess expenses) | | | |
| Transport (route-wise fees vs fleet running cost, driver payroll, fuel) | | | |
| Canteen / tuck shop (own-run or contractor — licence fee terms tested if contracted) | | | |
| Uniforms / books sales, if handled by the institution | | | |
Where these activities run at a persistent surplus, evaluate whether they remain incidental to education — a relevant fact both for the exemption analysis in Part F and for GST (education services are exempt; some ancillary supplies may not be).
Part E — Fixed assets and building fund
- ☐ Fixed-asset register maintained; physical verification of major assets (labs, computers, buses) on a cycle.
- ☐ Building-fund collections from students/donors permitted under the applicable state rules and the exemption framework — earmarked, separately disclosed, and spent on construction. Capitation-fee-type collections are prohibited by several state Acts; flag any collection linked to admission.
- ☐ Depreciation policy consistent; assets bought from grants tagged to the grant register.
- ☐ Title deeds of land/buildings in the name of the managing entity; encumbrances checked.
Part F — Income-tax exemption linkage
| Route | Test | Status |
|---|
| Sec 10(23C)(iiiad) | Available to a university/educational institution existing SOLELY for education and not for profit, where the AGGREGATE annual receipts of the person from ALL its educational institutions do not exceed ₹5 crore (limit and aggregation per Finance Act 2021, effective AY 2022-23). Test the aggregate — not each school separately. | |
| Sec 10(23C) approval route | No NEW applications for 10(23C) approval can be made on or after 1 October 2024 — the approval route is sunsetting into the Sec 12AB regime. Existing approvals run to expiry; plan the migration to 12A/12AB before expiry. | |
| Sec 12AB | Registration valid for the year (check validity/renewal window); books per Rule 17AA; 85% application test and Form 10B/10BB audit-report applicability worked separately. | |
Part G — FCRA (where foreign funds exist)
- ☐ FCRA registration / prior permission valid before any foreign contribution was received.
- ☐ Foreign contribution received only in the designated FCRA account (SBI, New Delhi Main Branch) and utilised through permitted accounts.
- ☐ Annual return Form FC-4 filed; foreign funds not mixed with domestic funds; administrative-expense cap observed.
Part H — Conclusion
Overall conclusion, including exemption status and any fee-regulation or grant-condition breaches: ____________________________________________
| Prepared by | Reviewed by | Engagement partner |
|---|
| | |
