Section 20 FCRA 2010 - Audit of Accounts
Section 20 of the Foreign Contribution (Regulation) Act, 2010 empowers the Central Government to order an audit of the books of account of a person holding FCRA registration or prior permission in specified circumstances. The provision also regulates who may conduct the audit, when premises may be entered and how information obtained in the audit must be treated.
In brief: Section 20 is a statutory audit power. It may be invoked where a required intimation is not furnished in time, is not in accordance with law, or the Central Government has reasonable cause, after inspection of an intimation, to believe that the Act has been or is being contravened.
Text and meaning of Section 20 - Audit of accounts
Where a person who has been granted a certificate or given prior permission fails to furnish an intimation required under the Act within the specified time, furnishes an intimation that is not in accordance with law, or the Central Government, after inspection of the intimation, has reasonable cause to believe that a provision of the Act has been or is being contravened, the Central Government may order an audit of that person's books of account.
The audit may be authorised by a general or special order and may be carried out by a gazetted officer holding a Group A post under the Central Government, or by another officer, authority or organisation considered appropriate by the Central Government.
The authorised auditor has a statutory right to enter the relevant premises at a reasonable hour, after sunrise and before sunset, for the purpose of auditing the books of account.
Confidentiality: Information obtained from the audit must be kept confidential and may be disclosed only for the purposes of the FCRA.
When can an audit be ordered under Section 20?
The power is linked to compliance by a person who has been granted an FCRA certificate or prior permission. Section 20 identifies the circumstances that can lead to a government-directed audit:
- Failure to furnish an intimation: a required intimation under the Act is not furnished within the prescribed or specified time.
- Defective or non-compliant intimation: an intimation is furnished, but it is not in accordance with law.
- Reasonable cause to suspect contravention: after inspecting the intimation, the Central Government has reasonable cause to believe that a provision of the FCRA has been or is being contravened.
Who may be authorised to conduct the audit?
The Central Government may issue a general or special order authorising a gazetted officer holding a Group A post under the Central Government. Section 20 also permits authorisation of another officer, authority or organisation that the Central Government considers fit for the audit.
Power to enter premises for audit
Once duly authorised, the auditor may enter the premises for the purpose of auditing the relevant books of account. The statutory power is limited by time: entry must be at a reasonable hour, after sunrise and before sunset. This entry power is specifically connected with carrying out the audit under Section 20.
Confidentiality of audit information
The proviso to Section 20 protects information obtained during the audit. Such information is required to be kept confidential and cannot be disclosed except for purposes of the Foreign Contribution (Regulation) Act, 2010.
Section 20 and related FCRA compliance provisions
| Provision | Subject | Connection with Section 20 |
|---|---|---|
| Section 18 | Intimation | Section 20 may be triggered by failure to furnish a required intimation or by a legally non-compliant intimation. |
| Section 19 | Maintenance of accounts | The books and accounts maintained under the FCRA framework are central to an audit under Section 20. |
| Section 23 | Inspection of accounts or records | Provides a separate statutory inspection power where the Central Government has recorded grounds to suspect contravention. |
| Section 24 | Seizure of accounts or records | Deals with seizure following inspection where the statutory conditions are met. |
Practical compliance points
FCRA-registered persons and persons holding prior permission should maintain complete books and records, file required intimations and annual returns within the applicable time, and ensure that information furnished to the Central Government is accurate and consistent with the underlying accounts. The FCRA Online portal should be checked for the current forms, rules, notifications, public notices and filing instructions before making a compliance filing.
Legal note: Section 20 concerns a government-authorised audit under the Act. It should not be confused with the ordinary preparation, audit or certification of annual accounts and returns required under other provisions of the FCRA and the Foreign Contribution (Regulation) Rules, 2011, as amended.
Page reviewed for statutory and official-resource accuracy: 27 September 2026.