An NGO based in Kolkata collected significant donations for flood victims in Bihar. The funds were distributed to various NGOs operating in Bihar to…

Receipt of Donations: (i) Internal Control System: Existence of internal control system particularly with reference to division of responsibilities in respect of authorised collection of donations, custody of receipt books and safe custody of money. (ii) Custody of Receipt Books: Existence of system regarding issue of receipt books, whether unused receipt books are returned and the same are verified physically including checking of number of receipt books and sequence of numbering therein. (iii) Receipt of Cheques: Receipt Book should have carbon copy for duplicate receipt and signed by a responsible official. All details relating to date of cheque, bank's name, date, amount, etc. should be clearly stated. (iv) Bank Reconciliation: Reconciliation of bank statements with reference to all cash deposits not only with reference to date and amount but also with reference to receipt book. (v) Cash Receipts: Register of cash donations to be vouched more extensively. If addresses are available of donors who had given cash, the same may be cross-checked by asking entity to post thank you letters mentioning amount, date and receipt number. (vi) Foreign Contributions, if any, to receive special attention to compliance with applicable laws and regulations. Remittance of Donations to Different NGOs: (i) Mode of Sending Remittance: All remittances are through account payee cheques. Remittances through Demand Draft would also need to be scrutinised thoroughly with reference to recipient. (ii) Confirming Receipt of Remittance: All remittances are supported by receipts and acknowledgements. (iii) Identity: Recipient NGO is a genuine entity. Verify address, 80G Registration Number, etc. (iv) Direct Confirmation Procedure: Send confirmation letters to entities to whom donations have been paid. (v) Donation Utilisation: Utilisation of donations for providing relief to Tsunami victims and not for any other purpose. (vi) System of NGOs' Selection: System for selecting NGO to whom donations have been sent.