MHA proposes linking FCRA accounts of NGOs to PFMS for real-time alert of funds

NEW DELHI: The Home Ministry has proposed linking FCRA accounts of NGOs maintained by various banks to the government’s Public Financial Management System ( PFMS) to get real-time alerts of foreign funds flowing to NGOs for an automated system of checks.

The PFMA is implemented by the Office of Controller General of Accounts in partnership with National Informatics Centre and has an active interface with nearly 90 banks to provide immediate validation of bank accounts, prompt electronic credit to the beneficiary’s bank account and bank reconciled expenditure statements to the implementing agencies.

The Home Ministry is set to notify a new set of FCRA rules stipulating that banks should inform MHA within 48 hours of any foreign donation being credited to a FCRA account of an NGO.

This means a massive task of monitoring all such donations in real time and up-gradation of manpower capabilities to do the same. “By linking the FCRA accounts with PFMA, we will get real-time alerts of every foreign donation and an automated system will on its own monitor donations and raise a red-flag in case of an anomaly or irregularity,” a senior home ministry official told ET.

Banks were earlier supposed to inform the MHA only after a month if the foreign contribution received by a NGO in a single transaction exceeded Rs One crore. Now, every donation or utilization of the aid from the FCRA designated account has to be reported by the bank within 48 hours. NGOs in turn also have to make public on their website each such foreign donation within a week.

"The aim is to tighten monitoring and learn immediately of an irregularity in a foreign donation rather than after a month or a year when the irregular donation may already have been utilized,” aministry official said.