Accounts, Audit and Financial Management of Endowments
This domain tests budgeting, bookkeeping, audit, statutory funds and surcharge. Endowment money is trust money; every receipt and payment must be supported by a voucher and recorded. Questions often test whether an expenditure is valid or whether a trustee can be made personally liable.
Core rules and concepts
- Budget: prepared before the financial year and sanctioned by the competent authority; expenditure without budget provision needs approval.
- Books: cash book, ledger, receipt book, stock register, hundi register, donation register and asset register.
- Audit: statutory audit by the Examiner of Local Accounts or State Audit; audit report, rectification and follow-up.
- Funds: Endowment Fund, Common Good Fund and temple funds; specific endowment income must be used only for the stated purpose.
- Surcharge: a trustee or EO may be personally liable for loss, misfeasance or breach of trust; recovery can be made as arrears of land revenue.
Worked example
A trustee spends temple funds on personal litigation. Audit detects the payment. Reasoning: the expenditure is not for the institution and is a breach of trust; the amount must be disallowed and recovered through surcharge proceedings. Answer: disallow and recover from the trustee.
Traps that cost marks
Treating corpus donations as ordinary income; mixing specific-endowment funds with general funds; missing audit deadlines; and accepting payments without vouchers.