CSITA FAILS Govt.AUDIT:The Church Of England Newspaper.

Church of South India Trust Association fails government audit: The Church of England Newspaper, June 10, 2012 p 6. June 12, 2012

Posted by geoconger in Church of England Newspaper, Church of South India,Corruption. 
Tags: Church of South India Trust Association

An environment conducive to fraud and corruption surrounds the business practices of the Church of South India (CSI), a government investigation has found. A report prepared by auditors from the Indian government’s Registrar of Companies (RoC) listed 27 violations in the management and practices of the Church of South India Trust Association (CSITA).  Unless reforms are immediately implements, the trust that holds title to the church’s property may be liquidated or lose its not-for-profit status.

Charted as a not-for-profit corporation under Section 25 of the Indian Companies Act of 1956, the CSITA is not required to register a minimum share capital, need only maintain business records for the previous four years, and may increase the number of company directors without prior government approval.  In return, the CSITA is required to use its income for the furtherance of the mission and ministry of the CSI and not distribute dividends to its members.

In a report dated 22 May 2012, the RoC notified the members of the CSITA’s management committee that it had concluded the CSITA’s income was not being used for furthering the objects and purposes of the trust.  The Balance Sheet and Income Expenditure statement of the CSITA for the last four years “do not give a true and fair view of the state of affairs of the company,” the RoC report said.

Nor were transactions properly recorded, the report said as “no details of fixed assets/immovable properties, secured loans, sale of property, sale consideration, purchase of property, receipt of foreign contribution, income and expenditure of other dioceses, units or sub-units reflect in the Balance Sheet and books of accounts of the company.”

The CSI has been plagued by financial scandals in recent years with only “8 or 9” of its 21 current bishops untainted by corruption charges, the lay-led anti-corruption group, the CCC has reported.  Lay leaders have pushed for greater transparency from the bishops and executive committee of the general synod, but have so far been unable to receive an accounting.

On 1 Feb 2010, Dr. John Dorai, the general secretary of the CSITA Beneficiaries Association – a lay advocacy group in the church – filed a complaint requesting the RoC examine the accounts of the CSITA.  The CSITA, through the its secretary, M.M. Philip – who also serves as General Secretary of the CSI – fought the request through the courts.  However in a ruling released on 22 March 2012, Justice S. Rajeswaran of the Madras High Court ordered the CSITA to turn over its records to the RoC.

“Now we know why the CSITA tried so hard to prevent the RoC from doing its statutory duty,” the CCC said after the report was released, stating it was a “scathing indictment of how the church leadership (mis)manages the CSITA.”

“Given the seriousness of the violations unearthed by the RoC, the CSI leadership has no choice now but to put in place mechanisms to adhere strictly to the provisions of the Companies Act,” the CCC said, noting that “any continued violations could attract more stringent penalties including imprisonment.”

The CSITA did not respond to our requests for comments.  But it has been given 10 days to review the findings of the RoC and to offer comments or corrections.  If none are forthcoming the report will be finalized by the RoC.

First published in The Church of England Newspaper.