FCRA Compliance Checklist for NGOs

FCRA Compliance Checklist for NGOs

To ensure that your NGO or organization complies with the Foreign Contribution (Regulation) Act, 2010 (FCRA), here is a comprehensive checklist of compliance requirements under FCRA:

1. FCRA Registration

• Ensure your organization has valid FCRA registration. Registration is required if your NGO plans to accept foreign contributions.
• If not registered, apply for prior permission (if only receiving foreign funds for a specific purpose).
• Ensure renewal of registration every 5 years, as FCRA registration is valid for a 5-year term.

2. Designated FCRA Bank Account

• Open a designated FCRA bank account in the State Bank of India (SBI) New Delhi branch (if not already done).
• Ensure that all foreign contributions are deposited only into this account.

3. Maintain Proper Documentation

• Maintain records of foreign contributions received.
• Record and track the purpose of each donation to ensure funds are used only for the approved purposes.
• Keep all invoices, bills, and supporting documents related to the use of foreign contributions.
• Keep updated audit reports.

4. Submission of Annual Returns

• File FC-4 (Annual Return) electronically every year before 31st December for the preceding financial year (April 1 – March 31).
• Provide accurate details of foreign contributions received during the year, including:
  • The name of the donor
  • The amount received
  • Purpose of the contribution
  • Details of how the funds were utilized.

5. Compliance with Utilization Norms

• Ensure that foreign funds are used only for the purpose mentioned in the application for registration.
• The organization should not divert funds for activities other than the approved ones.
• The use of foreign funds must align with the goals and objectives stated at the time of registration.

6. Maintain Records of Key Functionaries

• Verify and update details of key functionaries, such as board members and senior staff, and ensure Aadhaar verification for all key functionaries as per the amendments in 2020.
• Ensure that none of the functionaries are disqualified under the FCRA (e.g., government employees, legislators, media houses).

7. Restriction on Sub-Grants

• Do not sub-grant foreign funds to other organizations, unless specifically allowed under the FCRA.

8. Regular Monitoring

• Ensure regular internal audits to ensure that foreign funds are used appropriately.
• Monitor and update the FCRA records on an ongoing basis, especially when there are changes in leadership, key functionaries, or other significant structural changes.

9. Compliance with the 20% Cap on Administrative Costs

• Ensure that administrative expenses (like salaries, overheads, etc.) do not exceed 20% of the foreign contributions received, as per recent amendments.
• Report these expenses accurately in the FC-4 return.

10. Display Foreign Contribution Details on Website

• Ensure that the organization’s website displays details about foreign contributions received, as per the FCRA requirements.

How to File the FC-4 return (Annual Return)

The FC-4 return is an annual requirement for organizations registered under FCRA. Here’s a step-by-step guide to help you file the FC-4 return:

Step 1: Prepare the Necessary Documents

• FCRA Registration number (and renewal details if applicable).
• Foreign contribution details for the financial year (April 1 – March 31).
• List of foreign donors with their respective amounts and purposes.
• Audited financial statements of the NGO for the relevant period.
• Aadhaar details of key functionaries.

Step 2: Log into the FCRA Portal

• Visit the official FCRA website of the Ministry of Home Affairs (MHA): https://fcraonline.nic.in.
• Log in using your FCRA ID and password.

Step 3: Go to the 'FC-4' Return Section

• Once logged in, navigate to the “FC-4” Annual Return section.
• Select the financial year for which you are filing the return.

Step 4: Fill in the Required Details

• Enter the foreign contribution details in the provided sections. This will include:
  • Total amount of foreign contribution received.
  • Detailed information on individual donations.
  • Purpose and usage of foreign funds.
  • Details of administrative expenses.
• Attach the audited financial statements and Aadhaar details of key functionaries.

Step 5: Review the Information

• Double-check the accuracy of the data before submitting it.
• Ensure that all required sections are completed.

Step 6: Submit the Return

• Once reviewed, click on submit to send the FC-4 return.
• After submission, a confirmation receipt will be generated.
• Download and keep a copy of the confirmation for your records.

Step 7: Submit Hard Copies (If Required)

• In some cases, you might be required to send a physical copy of the FC-4 return or supporting documents to the Ministry of Home Affairs. However, this is generally not required anymore, as the return is filed electronically.

Step 8: Confirmation of Filing

• After successful submission, ensure that you receive a receipt number for your filing.
• This will be your proof of compliance for the financial year.

Important Deadlines:

• Filing of FC-4: Must be submitted within 9 months after the close of the financial year, i.e., by 31st December each year.
• Late Filing Penalty: If you miss the deadline, your FCRA registration may be suspended until the return is filed.

Consequences of Non-Compliance:

• Suspension or cancellation of FCRA registration.
• Penalties or legal action for not filing or misreporting contributions.

By following this checklist and filing the FC-4 return properly, your NGO can ensure compliance with the FCRA regulations and maintain its eligibility to receive foreign contributions.