33% Housing Societies fail to Submit Audited Accounts

28th Nov, 2017

MUMBAI: Around 20,000 housing societies in the Mumbai metropolitan region have not submitted their audited finances for the 2017-18 fiscal to the cooperatives department even after extensions to the September deadline.

They make up around 32.7% of the 61,000 cooperative housing societies in Mumbai, Thane and Navi Mumbai and control half of the total corpus of Rs 6,710 crore that such societies handle.

In the last fiscal of 2016-17, 8,500 or 14% of the societies controlling about 25% of the corpus did not submit their audited accounts, said the cooperatives department. It is a clear indication of apathy in getting the accounts certified, or lack of unanimity among the residents and a lack of transparency.

The department has issued notices warning the 8,500 societies of de-registration, disqualification of office-bearers and liquidation of assets. Such action can hamper regular civic services in the societies due to pendency of bills, and finally affect the resale value of the properties, say experts in the housing sector.

Officials say they expect the number of societies who have not filed their audited accounts so far this fiscal to halve by January-February, but by then they will have to pay fines.

The audited accounts are crucial to decide the tax implications for the societies - 18% GST at the moment - and also make sure there's transparency in the handling of the fees imposed on residents.

"The major reason for delay or lack of society audits is mismanagement as nobody wants to come forward for the work. A majority feels it's a thankless job. There is also a fear among ordinary members that if they question the affairs of the society and its executive members, the management may make life difficult for them," said Ramesh Prabhu, chairman of the Maharashtra Societies' Welfare Association, an umbrella organization of all the housing societies in the state.

Poor manpower is another factor. Most societies do not educate and empower their staff or are loathe to hire professionals. "Even the state cooperatives administration is not taken seriously by the management committees. This is mainly due to a lack of manpower and stringent rules with the department," said Prabhu.

A senior state cooperative official said the threat of de-recognizing the societies is yielding results. "Societies know such a move will not only affect the image of the society, but can also affect the supply of civic services, sale/resale value of properties. As a result, many societies are falling in line. Two-three years ago, the percentage of unaudited societies used to be as high as 80-90%," he said.

Citing an overburdened cooperatives department, experts suggested digitization and an independent authority for housing societies to improve the situation. "I recommend digitization to bring about transparency and efficiency in administration as well as transactions of housing society affairs. If the accounts of the societies are maintained by the cooperative department or nationalized banks on their servers, there could be a provision to freeze the accounts of those who have not filed annual accounts or online returns within a stipulated period," said Vinod Sampat, a housing expert and president of the Cooperative Societies' Residents Users' Association.

Tough actions are called for to get the societies to heel, said the experts. They pointed out that there are several lenient steps before a society can be de-recognized. Further, despite notices warn societies of liquidation of their assets, it hardly happens. "Since these are rare actions, such negligence of society accounts prevails," said Prabhu, also stressing on digitization and an independent regulator.

 

Source : timesofindia.indiatimes.com