As per the Audited Balance Sheet of ICAI as on 31-03-2020 (https://resource.cdn.icai.org/61365annualreport-icai-2019-20-english.pdf) the Institute had Surplus and Earmarked Funds of Rs. 2269.74 Crores (PY Rs. 1963.34 Crores) and it earned a Net Surplus of Rs. 299.19 Crores (PY 283.39 Crores) for the Year ended on 31-03-2020, out of which Rs. 134.34 Crores is contributed by Interest on Investments and deposits. Year over year our Institute has been earning Income, which is a healthy sign, but I see no reason for not utilizing this money for the benefit of our Members and Students, and these funds remain stashed in unproductive investments. Why can’t we use these funds for providing free medical insurance to our members or provide them free Tax-filing, Accounting, Practice Management software, and various other tools which can assist them in their day-to-day practice?
There is a benevolent fund, but I can cite several examples where claims were not processed in time and relatives of members were made to suffer for petty help. During the Corona Pandemic, the Institute did come out with a scheme (https://cabf.icai.org/ ) to help its members, but the same was too little and hardly a few could have come forward to claim such benefit. We are not aware how much actually was spent on such help. A list of beneficiaries who were given such help should be posted on the website.
Find no reason for accumulating such huge funds and depriving the members of various benefits. Instead, there are instances where there have been allegations of misuse of funds. Let me highlight few instances of how these funds are misused:
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Most of the Central Council Members Travel by Business Class and they stay at luxury hotels for attending various meetings and programs. Some of these meetings are held without disclosing any agenda and no minutes are circulated to members.
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There have been complaints about misuse of funds over huge IT-related expenditure. Recently, Tenders (https://www.icai.org/post/icai-eoi-tenders) were floated for providing Practice Management Software and Audit Analytics Software for CA Practitioners and CA Firms. We would see in comings days and months how beneficial this Software will turn out to be.
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There are instances where sitting Council Members use the Institute’s staff for campaigning of their elections, which is not only unethical but amounts to misuse of the Institute’s resources.
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Institute has paid heavy Penalties and Interest under GST amounting to Crores, which does not auger well for an Institute like ours whose members provide tax consultancy to the entire Industry. This is nothing but utter negligence on the part of those entrusted with the job of tax compliances.
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There have been cases of hiring of GST Consultants by ICAI who were close associates of the Central Council members and who openly campaigned for their elections.
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In the past, there were allegations of misuse of funds in various land deals and construction of buildings, etc.
What needs to be done?
There is no need to accumulate funds beyond certain limits. This limit can be decided by our Council based on certain parameters like annual administrative cost, establishment expenses, infrastructure expenses, etc. Excess availability of funds might lead to its misuse by those in power and we must try to avoid the same. Instead of giving chance for its misuse, ICAI should spend this money for creating facilities for our members. A few areas where we can use these funds for the benefit of our fraternity are as under:
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The accumulated funds be used for providing Free or highly subsidized professional tools like Tax-filing and Audit tools to members which have lifetime validity. Such tools may be developed by our Institute under the guidance of its Technical Committees and with the help of reputed Software companies of India. Instead of promoting any Specific Software, Institute should come out with its own version of Software under its own brand.
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As a Regulatory Body of the Accounting Profession, the Institute should come out with a Standard Accounting Package of its own which has acceptability across India and amongst various businesses. This will help Govt., various Regulatory Authorities, Professionals, and businesses as well.
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Every attempt should be made to improve the quality of education and providing modern facilities to our students, who will become future stakeholders of our profession.
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There is a need to spend monies over facilities like free or subsidized medical Insurance and Term Insurance for our Members. What we have at present is just a tie-up, which is of no use.
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No consultant be hired by ICAI without a transparent Tendering process and the fee paid to them should not exceed the ICAI Recommended scale of Fee.
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The Accounts of ICAI should be Audited by CAG.
In my opinion, the presentation of Annual Accounts of ICAI also needs to be improved. An amount of Rs. 102.20 Crores (PY Rs. 95.57 Crores) has been shown under the head of “Professional fees paid to Examiners and Consultants”, but no schedule or details have been provided for the same. This reflects poorly on an institution like ours, which is known for regulating the profession of Accounting in India, and which does not distinguish between Fees paid to Examiners and Consultancy Fees paid for Professional and Legal Services. Also, there are huge unreconciled inter-unit balances and only net amounts are shown in the balance sheet, which does not seem to be a fair practice.
“THOSE WHO USE PUBLIC FUNDS MUST ACCEPT A RESPONSIBILITY TO THE PUBLIC”
