Audit Report Checklist Exposes Gaps in Housing Society Governance
Ajay Chaudhari stresses on transparency in co-operative society audits to prevent financial manipulation
In Maharashtra’s co-operative housing sector, audit compliance has emerged as the frontline defence against mismanagement and financial irregularities. Redevelopment consultant and Building Redevelopment Coach Ajay Chaudhary has issued a detailed “Audit Report Checklist” (PDF attached), highlighting statutory documents that must be attached with Annual General Meeting (AGM) notices under the Maharashtra Co-operative Societies Act (MCS Act), Rules and Bye-laws.
The Mandatory Attachments
According to Chaudhary, societies must provide members with a complete set of audited financial statements at least 14 days before the AGM. These include:
- Audited Balance Sheet and Income & Expenditure Statements, signed by all three office bearers.
- Notes on Financial Statements prepared by the auditor.
- Auditor’s Report under Section 81(5b) with audit objections, remarks, and suggestions.
- Audit Memos – Form No. 1 (Part I) and Form No. 7 (Part II).
- Detailed Schedules covering irregular transactions, doubtful debts, improper payments, and assets under risk of non-realisation.
Chaudhary warns that failure to circulate these documents undermines financial transparency and gives scope for mismanagement.
Safeguards for Members
The checklist goes beyond compliance by offering practical safeguards for members:
- Each member should sign an acknowledgement of AGM notice receipt, clearly recording the date, time, and attached documents.
- If documents are missing, members must file written objections and forward a copy to the Deputy Registrar.
- Such steps create a third-party record and prevent the Managing Committee from later claiming that all statutory documents were furnished.
“Missing documents are a clear indicator of possible illegal financial dealings,” Chaudhary observes, warning members not to approve partial audit reports without full attachments.
Why It Matters
With housing societies often engaging in multi-crore redevelopment projects, transparency in accounts is directly linked to the community’s financial safety. In several past cases, weak audit compliance has been exploited to cover up irregularities, delay redevelopment, or manipulate society records.
Chaudhary’s checklist aims to arm members with a compliance toolkit — not just to meet statutory norms but also to strengthen the society’s hand against potential disputes with developers, PMCs, or internal factions.
Looking Ahead
Experts suggest that adoption of such standardised audit checklists across co-operative societies could dramatically reduce disputes, improve governance, and restore trust among members. With urban redevelopment on the rise, transparency in audit practices may well decide whether societies progress smoothly or face years of legal entanglements.
