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As per Rule 36-B of AP Coop. Societies Rules, 1964, every society by
a resolution of the G.B shall open a separate account into which an
amount not more than 30% of gross profit (or) 2% of working capital,
(d)
whichever is less, as per the previous year financial statement, shall
be credited and utilised for administrative and contingent expenditure.
But the same is not being done.
Audit Reports for about 10 years i.e. from 2001-2002 to 2009-2010
shall also be verified and if so, at least another Rs.5.00 crores would
(e) be detected as unlawful loss to the society which shall also be
recovered from the Management Committee jointly and severally, as
per Rule 36-B of AP Coop Societies Rules, 1964.
Observed that the procedure of enstrustment of charge of records to
3
employees has not been followed in the society.
Action on Inspection Report submitted by Smt. S.M.M. Narayanamma,
4 Asst.Registrar, o/o DCO, Tirupati on 17.2.2005, as per Sec.52 of AP Coop
Societies Act, 1964 not yet completed
The re-appointment of C. Mahesh, Attender as L.D.Typist has already been
proven as irregular and report was already submitted to that effect vide
Lr.Rc.No.1903/2012-ECCS-C1, dt.22.11.2012 by the DCO, Tirupati. When
5 the reappointment is proved as irregular, then the services of C. Mahesh
shall be regularised in the cadre of Attender as if he has had continued in
the cadre of Attender w.e.f. 19.6.2009 and the difference salary paid to that
effect shall also be recovered.
Following ineligible expenditure has been incurred by the Managing
Committees of Society when there is no approval for such payments under
Sec.116-C(1) of the Act and thus, the same has to be recovered from the
concerned in total. These amounts are included in the establishment
expenditures.
Sno Particulars Amount
6 1 Reimbursement of tuition fee in 2010-11 87900.00
2 Reimbursement of tuition fee in 2011-12 165000.00
3 Reimbursement of tuition fee in 2012-13 73700.00
4 Reimbursement of tuition fee in 2013-14 71500.00
5 Outsourcing Staff charges in 2015-16 199090.00
6 Professional charges 2015-16 110225.00
As per Sec.49 of Act read with Rule-44, society shall implement the
provisions of EPF Act which this society failed to do so. The society is
deducting EPF from the salaries of employees and the said amounts
together with equivalent employer contribution have been depositing in
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various banks and attaining interest. The society is also paying interest on
EPF entitled by employees which is illegal practice and EPF has to be
invested with EPF Commissioner. Payment of interest on EPF amounts out
of the funds of the society is unlawful loss to the society.
The Auditor in FAR 2015-16 has pointed out that "the contribution made by
the society and employees towards P.F is neither liability to society nor asset
8 to the society. As such, in balance sheet, it is reflecting Rs.2,04,42,198/- as
liability and Rs.1,27,36,926/- as asset, these are grave irregularities which
shall be immediately rectified as per law

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