By | October 20, 2017

TLA representative Ms. Namgyal Tsekey and Ms. Sonam Bhuti   attended the two  days workshop  on Good Governance of  CSO/NGO at Norbu House,  from 12-13.10.2017

The Civil society organizations(CSOs) has a vast and important role to play in the strengthening of democracy and democratic processes in every democracy around the world. While we as a civil society are such an integral part of any form of development and progress it is also a fact that we face the biggest challenges in being able to sustain ourselves and be more productive.

 The workshop is given by  Mr. Sandeep Sharma and other Trainers from the Financial Management Service Foundation (FMSF) Delhi, covering  various aspects of good governance and financial management and  on legal compliance.

Good Governance is important to effectively run an organization. And achive its aims and objectives.

A)   Understanding  Governance of NGO:

All the Board has the equal legal responsibilities, In a case, where all 7 board members got arrested in the middle of the night because of fire in the building, three of the Board embers has not even seen the building even once.

B)    Duty of management and Duty of Board.

·         Board duty is to direct and plan strategic for the sustenance of the society. Board duty is to oversee.

·          CEO manages the office administration while Board oversees .

·          Board works only through the Board meeting and not  by managing the office in a day to day business.

·          it is the Chief Executive officer who manages the  office usually CEO is the Secretary or the Chairman. Management looks after day to day matter and acts on the direction and policies adopted by the Board.

·       Management  has to periodically  report to Board of its works and activities undertaken and completed. 

·         Making of Policies:   Board is legislative body of the society. Although the Management  will draft a policy and rules, it must be reviewed and approved by  the  Board . This is also an

·         Board duty :   selecting, appointing, supporting and reviewing the performance  of  the  chief executive  officer, president  or  executive director who manages the offices);

·         Duty of the Board:   Board meeting must be held in case of big decisions like salary, removal of the senior staff,  or terminating Chief Executive officer, appointment of senior staff, appointment of auditor, Approval of accounts, and setting the salaries, compensation and benefits of senior management. Deviation of fund from the approved granted projects requires Board approval.

·         Interference Board:   Board should not interfere too much in the office management. To much indulgence of Board in the office management is not a good governance. Too many board members on the office management is not good. Board is not entitled to a salary as Board member but can draw salary  as a  Chef Executive officer to manage the office.

·         Passive Board:  Not Good           Active board:   Good

Selection and Election Process of Board member:   The ideal /desirable practices is to make a nomination committee.  CEO/ Staff should not be in nomination committee .

Need of special selection strategy:  Nomination of the Board should be based on Qualification, availability, background, knowledge  etc   Board Diversity should be three.

Notice and Agenda .Quorum of Board meeting: The Agenda must be given in advance along with the advance notice of 21 days for AGM  and 7 days for  board meeting and the Agenda must be clear  so that the board will be easier to decide.

Who can summon a Board Meeting:  CEO/President, secretary and the Treasure can summon the Board meeting.

Who represents NGO:  President / Chairperson is the person who generally acts as the legal custodian and representative of the Organization.

Attendance: every members who attends the Board meeting or AGM must sign the attendance and it must form part of the record.

Quorum:  If the required quorum is not present then the meeting is generally adjourned to the same day of the next week, at the same time and the same place. In case the quorum is still not present in the adjourned meeting then the meeting can be taken as a valid meeting.

Minutes: Keeping minutes is very important and Minutes is a legal valid documented record of the work of the Board members. It is admissible in the court of law as evidence and FCCR has been cancelled on the basis of minutes of the AGM.  Board meeting must be held four times, of not at least  twice a year.  Most important thing is that Minutes must also  contain  the dissenting opinions and discussions apart from the  decisions . Minutes should be signed on each page by the CEO ie President. Minutes of AGM must be circulated to the members for their approval/ratification in the next AGM. The pages of the minutes should be serially numbered. The minutes of the previous meeting are to be read and confirmed at the beginning of a meeting. These minutes are then signed by the chairman and subsequently they cannot be altered or corrected

Staff can attend the board meeting  to take a note or give statistic or read  reports.

Impeachment by SPECIAL BOARD MEETINGS:  There must be SPECIAL BOADR MEETING with SPECIAL MAJORITY for termination of Board members or changing of Bye laws.  Removal  of senior staff requires Special Board meeting.

Resolution: General resolution, Special Resolution and resolution by circulation means no meeting – its just circulated by email/post  for works like bank accounts,  change of Bank signatory etc.

Board ID: Its  very important to keep Id of the board mmee  brs elected along with their address and signature .

In one given case, a  Chairman removed all  other board members and elected new board members. The old board members filed a case against the  new board members.

Drafting  of a Governance Manual and developing conflict of interest policy  is important.

Ms. Namgyal Tsekey, being  on the board of TLA,  as well as working staff  ,  it is like a reminder to oneself, that the   working members of the office  ie Management   has to periodically  report to Board of its works and activities undertaken and completed. 

nd Day of the Program

FCRA 2010: it is a   Security legislation to control not only the fund usage but the sender /donor is also checked. 

Who has to Apply:  Individual, Sec 8 Company, Trust, Society, Association,  have to apply for FCR from MHA.

FCRA is not applicable for consultancy  fee or commercial  transaction  from foreigners.

FCRA applicable to individual  for receipt of RS 1lakh  per year from Abroad.

Filling  of form is easy but it usually takes 1 year although law says 90 days.

After opening the FC Account, within 15 days one must fill up FC 6 form  online and intimate to MHA about the opening of the account.

Multiple bank accounts can be opened for the purposes of utilization provided only one bank account is maintained for receiving foreign contribution.

Annual Return must be filled by 31 st  December  even if there is no transaction in the  account , you must file Nil return.  The FC account details must be  uploaded in ones website.

Eligibility to apply FCRA: 3 years audit report and must have used Rs 10 Lakh on projects purpose and not administrative expenses.


Any amount received, by any person from any foreign source in India, by way of fee (including fees charged by an educational institution in India from foreign student) or towards cost in lieu of goods or services rendered by such person in the ordinary course of his business, trade or commerce whether within India or outside India or any contribution received from an agent of a foreign source towards such fee or cost shall be excluded from the definition of foreign contribution.

Note:    Which means fee received for TLA’s  legal services  or consultant fee from Foreigner or  foreign company charged for our services are exempted from FCRA.

Persons liable for punishments under FCRA  The following persons may be liable to penalties and punishments depending on the nature of the offences:

i.                     NGO
ii. Chief Functionary
iii. Governing body members
iv. Other officers
v. Other persons who indulge.


Penalties and punishments

Under FCRA laws, severe penalties and punishments are specified which can be invoked depending on the nature and quantum of the offence and the persons involved. However, compounding of  the offence is permissible with imposition of 5 %  or 10 % if fund  received, and 15% if the foreign  fund is utilized.

 Goods and Services Tax (GST)  Complicated and one has to fill 36 forms if GST is applicable. NGO can make a profit out of its services but its main objectives is not a profit making.

GST is applicable only for goods and services for business purpose and if the aggregate turn over is Rs 10 lakh and above in HP and UK and 20 Lakh in other states.

                                Report by

                                                                Namgyal Tsekey  and  Sonam Bhuti