7/12/2010 JAI SHRI MATAJI .
Dear Brothers and Sisters
Re: Internal Report of the Trust on the Chhindwara Project (‘project’)
Having recently come to know about the reported financial mismanagement in the Project, we made sincere attempts during the last forty days to identify possible financial solutions for the reported situation.
The details are attached for the attention of all and include:
1. Copy of Chhindwara Audit report ( ‘Internal report’ of the Trust). The signed version of the internal report is available with us. A copy of this report could be secured from the Trust; and
2. Our communication with the Board of Trustees National Trust in India (“the Board”) on the internal report.
The findings of the internal report as you will note, are serious in nature and call for immediate corrective action. Unfortunately we could not make any progress despite our repeated follow ups . We observed a casual approach on the part of the Board to the findings revealed in the Internal Report. As Contributors to the Project, every one of us ought to ensure that the Trust manages the funds properly and in a transparent manner. We do not want issues for the Trust or its Trustees in the future.
The Internal report on the project is the Trust’s own report. The matters set out there in points towards material weaknesses in the internal control systems. The report also raises serious concerns over certain specific large transactions. Having studied the report from a financial perspective and with no real response forthcoming from the Board, it is likely that further contributions would also be mismanaged. We therefore request all the World Collectives to UNITE and stop further contributions from your Collectives to the National Trust till such time financial transparency would be established.
Our purpose is as follows:
1. Our concern is for Shri Mataji & Sir CP. They are on the Board. The Trust Laws require the funds to be managed properly;
2. As Sahaja yogis we want a financially transparent Sahaj Project, not a project with so many reported financial irregularities;
3.We want the Trust to resolve all the reported issues and move forward. If the reported matters are found to be correct, we want the Trust to implement proper systems & procedures. Also necessary changes must be made to the Personnel managing the project. Correction can happen only if the guilty are identified & punished and also the Trustees jointly and severally make good the losses.
4. Several Sahaja yogis have contributed their hard earned money to the project for the sake of only Shri Mataji. We cannot be indifferent to their bhakti / surrender,desires and aspirations.
5.We want proactive action from the Board. We do not want a situation to arise in the future where either the Government Authorities or external parties would come hard on these matters.
We request that all World Collectives must UNITE together and convince the Board to take corrective actions immediately. This can be achieved only by appointing an Independent Auditor of repute ( a Big 3 International Audit firm) to give their opinion on the internal report and suggest their recommendations.
Shri Mataji HERSELF is seen on a recent video in Jaipur, questioning the financial transparency relating to certain project. This can be seen by the World Collective at www.nirmalnagari.com. As Sahaja yogis we must not allow the reported points on financial mismanagement to remain uncorrected, especially within a Sahaj Institution.
JAI SHRI MATAJI
With Love and Respects
From your brothers,
Anil - Sahaja Yogi & Badrinath - Sahaja Yogi
--- On Sun, 11/28/10, Anil
From: Anil
Subject: Letter to the Trust ...attached - Chhindwara Project Internal Report
To: sureshkapoor@yahoo.com, sircps@yahoo.com, kalpana22.1947@yahoo.in, sonalikak@yahoo.com, nalgirkar@hotmail.com, rvs@vsnl.com, dinesh_rai_ias@hotmail.com, ypsinghandassociates@gmail.com, gautamvijay@ownmail.com, ideaagencies@yahoo.com, aarkey1951@yahoo.co.in, pugaliaeng@hotmail.com
Cc: glagarwal@hotmail.com, parag_raje@hotmail.com, badripersonal@yahoo.com, bilgecelebi@yahoo.com
Date: Sunday, November 28, 2010, 12:20 AM
28th November 2010
To Mr. Suresh Kapoor
Executive Secretary
NDSY Trust
CC Board of Trustees – NDSY Trust
Dear Mr. Suresh Kapoor,
JAI SHRI MATAJI
Re: Our Contributions to the NDSY Trust
We refer to our requests for the copy of the Internal Audit reports and the action taken by the Trustees (“the Board”). We have not received the documents from you despite our continuous follow up for almost a month.
In the meanwhile, we have received the report on Chhindwara Audit (“the Internal Report/ report”) dated 9 September 2010. A copy of this Internal Report of the Trust is attached. The Internal Report reveals material weaknesses in the internal control systems. The Internal Report points towards the possibilities of several FRAUDALENT transactions. In view of the seriousness of the matters mentioned in the report, we respectfully seek clarifications on the following specific points stated in the Internal Report:
1. Why did the Treasurer not cooperate during the Chhindwara audit work? Why did he reportedly give only verbal assurances and did not provide supporting documentary evidences? An audit is a straightforward exercise and we see no reason why he should not have cooperated? Does this attitude point towards the existence of certain unauthorized transactions that he did not want the Chhindwara audit team to become aware of?
2. Does the Trust not have a defined delegation of authority? Who are the persons authorized to operate bank accounts at Chhindwara? Why was this information not provided during the Chhindwara audit? Who are the persons responsible to approve invoices, sign payment vouchers, and up to what limits? Is there a purchase order approval hierarchy structure? Who are the cheque signatories? Is there a requirement for joint signatures on the cheques? What are the cheque signing limits? Why no clarifications were provided on these during the Chhindwara Audit? Does this imply that the signatories misused their self delegated authorities? We request copies of the Trust deed and the Board resolutions defining such levels of authority delegated.
3. Why was the approved budgets not made available to the Auditors? Do the detailed budget projections exist? If not, does it imply that there is no control over the spending on various activities? How could proper control be exercised over spending in the absence of a detailed budget? What could the actual expenditure be compared without detailed budgets? We would like to know whether there is a system of monthly financial reporting. Are Trustees provided with copies of monthly accounts? How frequently do the Trustees meet to review the Accounts?
4. Why was it that the quotations and tenders were not made available to the Auditors? Does this imply that there was absence of a proper quotation procedure? Do you not consider it necessary to take a minimum of 3 quotations for every transaction in a project of this size? Do you not recognize the possibilities of materials and services being sourced at non competitive rates? Will this not result in huge financial losses to the Trust?
5. Why were reconciliations not performed for the receipt books issued to all coordinators? Why was there no control over used receipts, unused receipts and cancelled receipts? Is this not a serious internal control issue? How can it be ensured that all moneys collected were accounted for? Please let us know the total contribution made by each Collective towards the project to date? What would have been the percentage of donations that would have remained unaccounted, if that would have been the case? It appears from the report that a substantial portion of donations would have gone unaccounted.
6. Where is the donation received in kind of Rs 16 lacs from LET New Delhi accounted? Is there a register to record donations in kind? What is the total value of donations received in kind? How are these controlled within and outside the financial accounting records?
7. Why is there a jump in the receipt numbers from 88 to 1701 and from 1750 to 1951? Why no clarification was provided during the audit? What happened to the moneys collected through the issue of missing receipts? What is the procedure for reconciling the receipt books from the time of its printing to the time of its accounting?
8. Why receipts were not issued in respect of certain cash donations received from Sahaja yogis? What were the procedures adopted for collecting and accounting for cash receipts? Why was a representation then made that there were no box office collections?
9. What is the total value of donations collected in International pujas? Are there adequate records to reflect the donations received during International pujas? We would like to know the details about foreign collections made from Ukraine mentioned in the report. How was this accounted?
10. Is it true that an unproductive Land was acquired? Is it true that an exorbitant price was paid to acquire the said land? Why were the purchase deeds not provided during the Audit? What were the procedures to ensure that the purchase was affected at market value i.e. price at which a willing buyer and seller would exchange a property? When was the Land acquired? What was the rate per square feet at the time of purchase of land? Was a valuation undertaken at the time of purchase? Which was the firm that undertook the valuation at that time? Could we have a copy of the valuation report?
What is the current market value for the plot of Land? Has a valuation been done recently? What is the name of the Firm? Could you provide us a copy of the valuation report? Is there a gain or loss in the market value? If so, is this recognized in the books?
11. Why is there a huge difference of INR 27, 94,372 in the trial balance for 2007/8? Normally such large differences must not arise? Is the accounting infrastructure e.g. number of accountants, quality of accountants, review process etc adequate? Has the external audit been completed for FY 2007/8? How did the external auditor sign a report with such large differences in the trial balance? Or did the external auditor qualify or disclaim his report? Who is the External Auditor? Is the firm capable to handle Trust of this size? Did the Board approve the appointment of external auditor every year? Has the external auditor pointed out similar weaknesses in the system? Could we have copy of their reports on internal control system? Is the difference in Trial Balance of INR 27, 94,372 to be written off in the books? What is the nature of this difference?
12. Why the completed asset register was not provided during the course of the Audit? Do the asset registers exist? Are the physical assets agreed to the asset register and the financial books? Why reconciliation between the asset register and the actual assets on site were not provided during the audit? Was it because some assets were unaccounted or missing? If so, what is the value of the difference?
13. Why TDS provisions required under the IT Act were not complied for the instances noted in the report?
14. The instance of double payment against an invoice is surprising. Are the internal controls poor? What are the controls before an invoice gets accounted? Is there a basic accounting package that can take care of the purchasing and payable modules? Does the “TRUST” have any supplier ledgers? How the advance payments are controlled? Are there any other instances of double payments? If so, have these been identified for lodging claims with the suppliers? Please let us know the details of double payments and the expected total losses on this account, if this is the case.
15. Have Bank reconciliations been completed for all bank accounts? Are Bank reconciliations prepared on a monthly basis? Are these reviewed and signed off by appropriate authorities? Are dishonored cheques reviewed and follow up for recovery? Why was the Bank reconciliation file not provided to the Auditors?
16. Who is Mr Bakliwal? Is he an authorized signatory for the payments? Why almost all vouchers signed by Mr Bakliwal were not signed by the receivers? How can the correctness of the receiver and the payment be ensured? Who are Sheela Srivastava and Babulal? Are there any approved contracts to support recurring payments that were made to them?
17. Why during the Delhi visit, were there vouchers, without the supporting documents? What is the number and percentage of such total vouchers without the supporting documents?
18. What is the invoice for Rs 43, 71,227 from Mr. Paghadal for? Why is the invoice in the name of Mr Bakliwal and not the Trust? What was the purpose for which this invoice was raised? Is there a contract for Rs 43, 71,227? Is the contract supported by tender and quotation procedures? Why was this invoice for Rs 43, 71,227 not approved by the Architects? What is the advance payment of Rs 7 lacs towards? Is this supported by contract terms? Can we have a look at the contract? Should the contract be available, is it approved by the Board? What are the other payments made in this regard?
19. Why certain purchases could not be traced to the stock register? What is the procedure for receiving and inspecting the goods? Is there segregation of duty between receipt and payment for material received? How was it ensured that all goods received were recorded in the stock register?
We are surprised to see that so much has been reported. The least the Trust could have done was to:
1. Ascertain what went wrong, if this is the case as reported?
2. Quantify the losses incurred by the Trust, if this is the case as reported?
3. Arrange corrective steps where ever required.
This money was collected from the world collective only for Shri Mataji’s Divine work and must not have been mismanaged in the manner reported. We are pained that even today the Trust seems to be indifferent and considers it unimportant to investigate and find out why the matters reported have happened in the first place ? Is that true? Who are the persons responsible for the matters stated in the report?
There are some in our Collective who live far away from their families to earn their livelihood. They earn low monthly incomes. Many of them have contributed their hard earned money to the Trust. We cannot be indifferent to the feelings of such people who donated large portion of their income for a Divine purpose. Every rupee that was received should have been judiciously spent and properly accounted.
Shri Mataji has advocated love amongst Sahaja yogis. Love does not stop Sahaja yogis from knowing facts about money that were contributed and were reportedly mismanaged at a large scale. The reported matters would not have arisen if there was genuine love for fellow Sahaja yogis and respect for their hard earned contributions.
TheTrust was formed with the following Divine purpose:
1 The House at Chhindwara (birthplace of Shri Mataji) was to be acquired by the Trust so that it will become the permanent Shrine for Sahaj Yogis all over the world;
2 The Shrine will be renovated to ensure its permanence;
3 Sahaja Yogis both from India and from foreign countries could stay in Chhindwara during their visit; and
4 The place will become really the most holy place for all Sahaja Yogis of the World."
However from what is reported, the purpose seems to have been totally defeated. How will the Sahaja yogis ever again repose faith in the Trust, if the reported matters are true?
The Trustees are the custodians of the funds collected. They owe complete responsibility for the contents in the internal report. Does the lack of response from the Trust to our requests for information reflect the Boards’ casual approach? Has real effort been taken to identify the guilty and initiate corrective action, if the reported matters are correct?
Legal pronouncements and provisions;
In the background of the reported matters we set out the following for review by the Board and all concerned parties:
1. There are established legal pronouncements and provisions under the Indian and International Trust Acts that will provide recourse to the Trustees and Beneficiary in the event of a Breach of Trust by Trustee/(s). Some of these are summarized in the following paragraphs. It is time that all concerned parties evaluate the available options in order to bring about clarity and transparency in the Trust.
Right to apply to Court for opinion in management of trust-property - Any trustee may, without instituting a suit, apply by petition to a principal Civil Court of original jurisdiction for its opinion, advice or direction on any present questions respecting the management or administration of the trust-property other than questions of importance, not proper in the opinion of the Court for summary disposal. A copy of such petition shall be served upon, and the hearing thereof may be attended by, such persons interested in the application as the Court thinks fit. The trustee stating in good faith the facts in such petition and acting upon the opinion, advice or direction given by the Court shall be deemed, so far as regards his own responsibility, to have discharged his duty as such trustee in the subject-matter of the application.
Right to indemnity from gainer by breach of trust - A person other than a trustee who has gained an advantage from a breach of trust must indemnify the trustee to the extent of the amount actually received by such person under the breach. Nothing in this section shall be deemed to entitle a trustee to be indemnified who has, in committing the breach of trust, been guilty of fraud.
Petition to be discharged from trust - Every trustee may apply by petition to a principal Civil Court of original jurisdiction to be discharged from his office; and if the Court finds that there is sufficient reason for such discharge, it may discharge him accordingly, and direct his costs to be paid out of the trust-property. But where there is no such reason, the Court shall not discharge him, unless a proper person can be found to take his place.
Right to compel to any act of duty - The beneficiary has a right that his trustee shall be compelled to perform any particular act of his duty as such, and restrained from committing any contemplated or probable breach of trust.
Right to inspect and take copies of instrument of trust accounts, etc. - The beneficiary has a right, as against the trustee and all persons claiming under him with notice of the trust, to inspect and take copies of the instrument of trust, the documents of title relating solely to the trust-property, the accounts of the trust-property and the vouchers (if any) by which they are supported, and the cases submitted and opinions taken by the trustee for his guidance in the discharge of his duty.
Right to proper trustees - The beneficiary has a right (subject to the provisions of the instrument of trust) that the trust-property shall be property protected and held and administered by proper persons and by a proper number of such persons.
2. Set out below are some liabilities for Breach of Trust:
Liability for breach of trust - Where the trustee commits a breach of trust, he is liable to make good the loss which the trust-property or the beneficiary has thereby sustained.
Several liabilities of co-trustee - Where co-trustee jointly commit a breach of trust, or where one of them by his neglect enables the other to commit a breach of trust, each is liable to the beneficiary for the whole of the loss occasioned by such breach.
3. Certain basic duties of the Trustees are as follows:
Care required from trustee - A trustee is bound to deal with the trust-property as carefully as a man of ordinary prudence would deal with such property if it were his own.
Accounts and information - A trustee is bound (a) to keep clear and accurate accounts of the trust-property, and (b) at all reasonable times, at the request of the beneficiary, to furnish him with full and accurate information as to the amount and state of the trust-property.
Trustee may not use trust-property for his own profit - A trustee may not use or deal with the trust-property for his own profit or for any other purpose unconnected with the trust.
4. Some of the provisions relating to the discharge of a trustee are as follows:
Definition of Lawful purpose - A trust may be created for any lawful purpose. The purpose of a trust is lawful unless it is (a) forbidden by law, or (b) is of such a nature that, if permitted, it would defeat the provisions of any law, or (c) is fraudulent, or (d) involves or implies injury to the person or property of another, or (e) the Court regards it as immoral or opposed to public policy.
Discharge of trustee - The trustee may be discharged from his office only as follows: -
(a) By the extinction of the trust;
(b) By the completion of his duties under the trust;
(c) By such means as may be prescribed by the instrument of trust;
(d) By appointment under this Act of a new trustee in his place;
(e) By consent of himself and the beneficiary, or, where there are more beneficiaries than one, all the beneficiaries being competent to contract; or
(f) By the Court to which a petition for his discharge is presented under this Act.
Office how vacated - The office of a trustee is vacated by his death or by his discharge from his office.
Trust how extinguished - A trust is extinguished –
(a) When its purpose is completely fulfilled; or
(b) When its purpose becomes unlawful; or
(c) When the fulfillment of its purpose becomes impossible by destruction of the trust-property or otherwise; or
(d) When the trust, being revocable, is expressly revoked.
Appointment by Court - Whenever any such vacancy or disqualification occurs and it is found impracticable to appoint a new trustee , the beneficiary may, without instituting a suit, apply by petition to a principal Civil Court of original jurisdiction for the appointment of a trustee or a new trustee, and the Court may appoint a trustee or a new trustee accordingly.
It is clear from the above, that the legal recourse is available to all parties. It is also clear that the Trust functions must not be allowed to continue in the same manner as reported. The matters set out in the internal report of the Trust will have serious legal implications for the Trustees and for all those concerned with the Project. Therefore all concerned parties must urgently evaluate the options. An action plan must be concluded early.
Our Recommendations ;
Our Legal Experts have suggested the following course of action to start, with reference to the findings set out in the Trust’s Internal Report:
1. A Big 3 International Accounting and Audit firm (Price Waterhouse or KPMG or Deloitte) must be appointed immediately to undertake a Special Engagement (“the engagement”). The terms of reference for the engagement must include those in the following paragraphs. These must be covered in two phases having regard to the time that will be required to complete the tasks:
Phase 1 - Review of the Internal Report, and corroborate the correctness of the Internal Report findings with the underlying evidence. The Board must arrange to receive this report within a period of 15 days.
Phase 2 - Review the internal control systems and suggest recommendations for the future. Also the External Auditor must quantify the estimated losses. The Trustees will need to make good the loss incurred by the Trust once the external firm would quantify the losses. The Board must arrange to receive this report within a period of 30 days.
2. The Trustee or Trustees in-charge of the Chhindwara Project, the Treasurer, and any other persons responsible for the financial affairs of the Trust, must be relieved from their duties with immediate effect till the completion of the engagement;
3. The Internal Audit department of the Trust must henceforth oversee the accounting functions during the interim period. Alternatively, the accounting functions of the Trust must be outsourced to the Big 3 Accounting firm till such time proper systems would be established;
4. The Board must provide an explanation as to why no action was taken on the Report findings till date, if this was to be the case? The Internal Report was issued way back on 9 September 2010.
5. The Engagement reports to be issued by the External Auditor must be tabled before the Board. This must also be shared with us and other Donors who would have demanded this information. The Board must implement the recommendations of the Internal Report and the Engagement Report within a definite time period.
We respectfully request you to provide us an action plan and timelines for the above on or before 4 th December 2010, failing which , the matter will be suitably addressed.
We love Shri Mataji. SHE has done everything for us. We will do anything for Shri Mataji. SHE is the Chairperson of the Trust and hence we would like the Trust to maintain the high standards set by HER. We have true concerns for Shri Mataji and Sir CP. History will not remember the rest of us. All the Trusts in India are now coming under the scanner of the Indian Investigation Agencies. We therefore respectfully request the Trust to implement our recommendations on a war footing. We are confident and positive that the Board will formulate and implement the right decisions. This will enable the Trust to achieve the special purpose for which it was established.
JAI SHRI MATAJI
Yours Sincerely,
Anil & Badrinath
