EXCLUSIVE: DDCA top official admits body has hired ‘two’ internal auditors

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Qaiser Mohammad Ali

@AlwaysCricket

The DDCA has admitted to having “two” internal auditing firms working for it, with one of the auditors revealing that they been filing quarterly reports to the company for “about one-and-a-half-years”. But several DDCA directors say they are completely unaware of quarterly reports being submitted and also expressed surprise at the existence of “two” internal auditors.

DDCA general secretary Anil Khanna confirmed that the association presently has “two” internal auditors — VK Bajaj & Co. and AVRP & Associates – working for it while MSA & Associates are the statutory auditors. The DDCA’s 2012-13 statement of accounts, the last one to be published by the beleaguered association, were prepared by MSA & Associates. All three firms have reportedly been hired a fabulous monthly fee.

DDCA general secretary Anil Khanna (left) has admitted that the association has two internal auditors. On right is supposedly ‘suspended’ DDCA president SP Bansal.

When contacted, Khanna said that VK Bajaj & Co. were the DDCA’s internal auditors, who have also been tasked to deliver other services, like writing books of account, handle cash transactions, and service tax etc.

However, when pointed out that according to a ‘resolution by circulation’, which he moved on November 5 among the DDCA directors and passed by a majority, AVRP & Associates were appointed ‘internal auditors at a monthly fee of Rs 40,000, Khanna told JantaKaReporter.com: “Haanji, haanji (yes, yes). I think they are also the internal auditors.”

Does this mean the DDCA have two internal auditors? “Haanji (yes),” replied Khanna.

When contacted, Nitin Agrawal of AVRP & Associates told JantaKaReporter.com, “Yes, the DDCA has appointed us internal auditors since October 2015.”

Nitin’s confirmation raises another contentious question: How can AVRP & Associates start working in October when the ‘resolution by circulation’, by which this auditors’ firm was appointed, was moved only on November 5?

Another question that some DDCA directors are raising is: “If AVRP & Associates have been appointed internal auditors, why is VK Bajaj & Co. filing quarterly reports? Shouldn’t AVRP & Associates be filing the audit reports? It is a matter that needs a thorough investigation.”

Other DDCA directors expressed surprise when told that Khanna had said that the association has hired “two” internal auditors. They said that hiring of two auditors was against one two of the 12 resolutions moved by circulation on November 5 and in which AVRP & Associates were appointed internal auditors and VK Bajaj & Co.

In a highly secret contentious move, Khanna on November 5 had moved 12 resolutions by circulation and eight of them – including the appointments of VK Bajaj & Co. and AVRP & Associates — were passed by a majority of 27 DDCA directors.

Resolution numbered ‘J’ dated 5 November read: “Resolved that M/s VK Bajaj and Company, M-10, Graeter Kailash, Part-I, New Delhi, is appointed for doing book keeping of DDCA at monthly charges of Rs 4 lacs plus taxes per month with 10 per cent increase on every 1st April of every calendar year. VK Bajaj and Company will hire their own staff and will maintain and write all books of account and handle cash transactions of DDCA and ensure all systems are followed and they will handle Service Tax, Sales Tax, TDS, Company Law and advice on ESI [Employees’ State Insurance], PF [Provident Fund], and Income Tax, other responsibilities can also be given to them based on mutual discussions. The present accounts staff in DDCA will complete all books of account till the date VK Bajaj and Company take over and will then report to the VK Bajaj and Company and they will decide how to utilise their services and advice accordingly. The conveyance charges for visiting government offices etc. and drafting of replies etc. for statutory work will be extra.”

And Resolution numbered ‘K’ read: “Resolved that M/s AVRP & Associates, 154, Vinobha Puri, Lajpat Nagar-2, 110024, are hereby appointed as the internal auditors of the DDCA in place of VK Bajaj & Co. They will submit quarterly audit reports and will be paid Rs 40,000 per month plus taxes as their fee. There will be an increase of 10 per cent in the monthly fee every year on 1 April of each calendar year.”

According to the resolution by circulation, which is a soft copy separately sent to all directors, 24 of the 27 directors voted in favour of resolutions ‘J’ and ‘K’. Three directors did not vote at all, saying that they never received the resolution. One of them expressed surprise at the existence of “two” internal auditors.

VK Bajaj & Co.’s internal audit report 2013-14 highlighted a spate of financial irregularities in the DDCA and the “excellent report” was quoted widely for its “piece of work, diligently done”. This internal audit report, which also pointed out alleged illegal transfer of Rs.1.55 crore out of the DDCA, gave ammunition to the likes of Kirti Azad and Bishan Singh Bedi in their fight against corruption in the DDCA.

On submission of quarterly audit reports, VK Bajaj informed that his firm has been submitting quarterly audit reports to the DDCA for “the last one-and-a-half years”, despite AVRP & Associates having been appointed internal auditors by a resolution.

On the DDCA’s 2013-14 balance sheet, Bajaj said it has already been signed by statutory auditors MSA & Associates, who “are there for last so many years. They are still there”.

“We are now giving internal report on quarterly basis for the last so many quarters. Mere khyal mein saal ya dedh saal hi gaya quarterly reports dete hue (we have bene giving quarterly reports for about a year or one-and-a-half years),” Bajaj told jantakareporter.com.

“We have advised them [DDCA] to improve their system. Unhone improvement ki hai (they have improved it),” Bajaj claimed. “The 2014-15 internal audit report has been given long time back, kafi mahine hog aye (several months have passed since the submission of reports). Every quarter we give internal reports to the DDCA. We have given internal audit reports of 2013-14, of 2014-15, and even of 2015-16, but they are quarterly reports.”

Does VK Bajaj & Co. submit quarterly reports to all the directors of the DDCA?

“No, no. We cannot submit to all directors; the DDCA should give it to the directors. If there are 30 or 40 or 45 members in a company, how we can give it to all of them? We submit to the president, to the working president, to the secretary, and to the treasurer. In a company, the reports are always submitted to the board and it is the duty of the company to deliver them to all the directors,” Bajaj said.

When told that there are only 27 directors in the DDCA, Bajaj said: “That’s why I am saying: how can we give it to all 27? It is not part of our job to give it to 27 members. In the board meetings the company gives it to all the members; that’s the company’s duty, isn’t it?”

Interestingly, while Bajaj on the one hand said that he could not give copies of reports to all 27 on the other hand he had a few days ago agreed in writing to provide copies of the 2014-15 internal report to DDCA club secretary Sunil Jain and joint secretary (company affairs) Dinesh Saini, before changing his mind – apparently on instructions from treasurer Manchanda.

When told that some DDCA directors were seeking the 2014-15 internal report but they still haven’t received it, Bajaj said, “They should ask the treasurer or the president or the secretary. Why can’t they get the report from them? They should get the report. Why will they not give them the [copies of the] report?”

All this indicate that little seems to have changed at the DDCA despite multiple government agencies, including the CBI, the Registrar of Companies, and the Company Law Board, questioning the functioning of the association, following a complete collapse of its administration and financial management recently.

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