Short Answer

Yes, as per the Gujarat Cooperative Societies Act, 1961 and Rules, societies are required to maintain separate accounts for maintenance, sinking fund, and emergency fund.

Detailed Explanation

Section 61 of the Gujarat Cooperative Societies Act, 1961 mandates that every society shall maintain proper accounts of its transactions, including a separate account for the funds specified in the Act. This means that societies must keep distinct records for maintenance, sinking fund, and emergency fund to ensure transparency and accountability in financial management. In practice, this requirement ensures that the funds collected from members for specific purposes are utilized appropriately and not mixed with general funds.

Rule 119 of the Gujarat Cooperative Societies Rules, 1965 further elaborates on the maintenance of accounts by societies. It specifies the format and details to be included in the accounts, emphasizing the need for separate entries for maintenance, sinking fund, and emergency fund. Societies are required to prepare annual statements reflecting the financial position of these funds, which are subject to audit to verify compliance with the Act and Rules.

In real-world scenarios, failure to maintain separate accounts for these funds can lead to financial mismanagement, disputes among members, and potential legal repercussions. By following the prescribed accounting practices, societies can ensure proper utilization of funds, prevent misappropriation, and build trust among members.

Practical Examples

• Scenario 1: A cooperative housing society collects monthly maintenance charges from its members. By maintaining separate accounts for maintenance, sinking fund, and emergency fund, the society can track the inflow and outflow of funds for each purpose, ensuring transparency and accountability.

• Scenario 2: In case of a major repair or emergency situation requiring funds from the sinking or emergency fund, proper accounting records will help the society demonstrate the utilization of funds for the intended purpose.

• Scenario 3: During annual audits, the auditors will review the separate accounts to ensure compliance with the legal requirements, providing assurance to the members regarding the financial management of the society.

References

• Section 61 of the Gujarat Cooperative Societies Act, 1961: Official PDF

• Rule 119 of the Gujarat Cooperative Societies Rules, 1965: Official PDF