Government of Karnataka






Is the audit of all co-operative societies to be conducted only by officers / officials of the department of Co-operative Audit? and whether Chartered Accountants can conduct the audit? 

No, Most of the Co-operative Societies are being audited by the departmental officer and office of the Urban banks having deposit of 25 Cores and above and the Societies which has sought exemption under section 121 of K C S Act are being Conducted by the Chartered Accountant. 


Should the Co-operative Societies pay the audit fee for the audit conducted by the department? 

Yes, Execpt few  which are exempted in the said order.


Whether Scale of Audit Fee is fixed?

Yes, The scale of Audit fee is fixed by Director of Co-operative Audit with the previous approval of the state government.  


What is the prevalent scale of audit fee?


Sl No.

Range of Working  Capital

Rate of Audit fee to be levied


Up to 10 Crores 

20 paise for every 100 Rupees of working Capital


Above 10 Crores up to 50 Rupees of working Capital

Rs.2 lakhs+ above 10 Crores Rs. 12 paise for every 100 Rupees of working capital


Above 50 Crores

Rs 6 lakh 80 thousand  + for above 50 Crores Rs10 Paise for very 100 Rs of working Capital of Turnover 

Particulars of audit fee payable to Chartered Accountants  conducting audit of Urban Co-operative Banks having deposits exceeding Rs. 25.00 crores and above coming under MoU between State Government and Reserve Bank of India. The Urban Co-operative Banks whose audit is conducted by C.As have to remit Rs 10,000 to the Government.

Sl No.

Category of Banks


Audit fee / Remuneration payable to Chartered Accountants



Above  Rs 25 Crores  Up to Rs 35 Crores.

Rs 75,000-00



Above Rs 35 Crores Up to Rs 50 Crores.

Rs 1,00,000-00



Above Rs 50 Crores Up to Rs 65 Crores.

Rs 1,25,000-00



Above Rs 65Crores Up to Rs 80 Crores

Rs 1,50,000-00



Above Rs 80 Crores Up to Rs 100 Crores.

Rs 1,75,000-00



Above Rs 100 Crores Up to Rs 200 Crores.

Rs 2,25,000-00



Above Rs 200 Crores.

Rs 2,50,000-00



Who assesses the audit fee and cause the demand?

The Assistant Director of the concerned sub-division will assess the audit fee and raise the demand. 


Is the audit conducted by the department of Co-operative Audit a final and binding one on the society? 



Whether the financial statements prepared by the Co-operative Societies could be modified in Audit? If so, is such a modification binding on the society?


The statement of accounts as audited together with modifications if any made their in by the Director of Co-operative Audit shall be final and is binding on the society.(Rule 29(2) of the K C S Rules 1960) 


Whether any co-operative society aggrieved by any audit objections can submit application for its deletion? If, so what is the time limit prescribed? 

Yes, such an application shall be made within 6 months of the receipt of the audit report. (Section 63(8) of K C S Act 1959)


How are the societies selected for audit?

To plan audit of co-operative societies, an Annual Audit Programme is drawn. There after the audit of Co-operative Societies are taken up every month as listed in the Annual Audit Programme. However, priority is given for societies, which come under the purview of Income Tax Act, Banking Regulation Act and Agricultural Credit Societies etc., which have availed the financial assistance from NABARD.


Does the Director of Co-operative Audit, have the power to re-examine or re-verify the audited accounts of a Co-operative society? 

- Yes -  Section 63(11) of the K C S Act 1959.


Whether re-audit is possible? If so, who can provide for such re-audit?

Possible. If it appears to the State Government on an application by a Co-operative Society or otherwise that it is necessary or expedient to re-audit any account of a society, the state Government may, by an order provide for such re-audit. Section 63(10) of K C S Act.      


Who will issue the Audit Report?



   (I)  Audit reports of the Co-operative         Societies whose area of operation is below taluka level


  (II)  Audit report of Co-operative         Societies whose area of operation is taluka level and District level


(III)       Audit Reports of Co-operative         Societies whose area of operation is more than one district.

(IV)        Audit Report of Apex Institutions and Federation.





Assistant Director of the  Sub- division or Assistant Director / Deputy Director working under rule 441 of K.C.S.R. in the institution concerned will issue the report.




District Deputy Director or Deputy Director / Joint Director working under rule 441 of K.C.S.R. in the    institution concerned will issue the report.

Joint Director of Co-operative Audit Head Office or Joint Director working under rule 441 of K.C.S.R. in the institution concerned  will issue the report.


Director of Cooperative will issue the audit report.



Whom should be contacted for ascertaining such details as up to which year audit of a given society is completed? Year since, it is pending and  the reasons for the same etc., 

These details can be obtained from the concerned sub-divisional Assistant Director of Co-operative Audit.


Is it essential that only Co-operative Society should prepare and submit financial statements and other relevant schedule to audit? or  whether auditor will prepare the same at the time of audit?

It is mandatory for all co-operative institutions to prepare the financial statements and the schedules and submit the same before 31st of May of every year to sub-divisional Assistant Director of           Co-operative Audit. The auditor will not prepare the same at the time of audit. 


Whether the department of Co-operative audit is bound to initiate action on           mis-appropriation detected and on the audit objections? 

No, The management of the concerned  Co-operative institution and the concerned jurisdictional Registrar of Co-operative societies have to initiate action.