Short Answer

Yes, as per the Gujarat Cooperative Societies Act, 1961 and Rules, societies are mandated to hold an internal controls meeting annually.

Detailed Explanation

Section 75 of the Gujarat Cooperative Societies Act, 1961 states that every society shall appoint an auditor who shall audit the accounts of the society annually. This means that societies are required to conduct an annual audit of their accounts by an auditor. The audit process involves reviewing the financial records, transactions, and internal controls of the society to ensure compliance with the law and proper financial management.

Rule 78 of the Gujarat Cooperative Societies Rules, 1965 further elaborates on the audit process. It states that the auditor shall submit a report on the audit findings to the society, and the society shall convene a general meeting to discuss the audit report. This meeting serves as an internal controls meeting where the members of the society can review the audit findings, address any issues or discrepancies identified, and take necessary actions to improve internal controls.

In practice, this internal controls meeting with the auditor helps in ensuring transparency, accountability, and good governance within the society. It provides an opportunity for members to assess the financial health of the society, identify any irregularities, and make informed decisions for the betterment of the society. Failure to conduct this annual internal controls meeting can lead to financial mismanagement, fraud, or non-compliance with legal requirements.

Practical Examples

• ABC Cooperative Housing Society conducts its annual audit with the appointed auditor as mandated by the Act and Rules. During the internal controls meeting, the auditor highlights discrepancies in the financial records, prompting the society to investigate and rectify the errors.

• XYZ Credit Cooperative Society holds its internal controls meeting annually, where members discuss the audit report findings and decide to implement stricter financial controls to prevent misuse of funds.

• LMN Agricultural Cooperative Society neglects to hold the internal controls meeting with the auditor, leading to undetected financial irregularities and subsequent legal repercussions.

References

• Section 75 of the Gujarat Cooperative Societies Act, 1961: [Official PDF]

• Rule 78 of the Gujarat Cooperative Societies Rules, 1965: [Official PDF]