Section 40: Audit of accounts of trust and endowment.

(1) The accounts of trust and endowment submitted to the Board under section 39 shall be audited and examined in the following manner, namely:- (a) in the case of a trust or endowment having no income or a net annual income not exceeding ten thousand rupees, the submission of a statement of accounts shall be a sufficient compliance with the provision of section 39 and the accounts of ten per cent of such trust and endowment shall be audited annually by an auditor appointed by the Board; (b) the accounts of the trust or endowment having net annual income exceeding ten thousand rupees shall be audited annually, or at such other intervals as may be prescribed, by an auditor appointed by the Board from out of the panel of auditors prepared by the Government and while drawing up such panel of auditors, the Government may specify the scale of remuneration of auditors. (2) The Government may, at any time, cause the account of any trust or endowment audited by the State Examiner of Local Funds or by any other officer designated for that purpose by the Government. (3) The auditor shall submit his report to the Board and the report of the auditor shall, among other things, specify all cases of irregular, illegal or improper expenditure or of failure to recover money or other property caused by neglect or misconduct and any other matter which the auditor considers it necessary to report; and the report shall also contain the name of any person, who, in the opinion of the auditor, is responsible for such expenditure or failure and the auditor shall, in every such case, certify the amount of such expenditure or loss as due from such person. (4) The cost of the audit of the accounts of a trust or endowment shall be met from the funds of that trust or endowment: Provided that the remuneration of the auditors appointed from out of the panel drawn by the Government in relation to trust and endowment having a net annual income of more than ten thousand rupees but less than fifteen thousand rupees shall be paid in accordance with the scale of remuneration specified by the Government in clause (b) of sub-section (1): Provided further that where the audit of the accounts of any trust or endowment is made by the State Examiner of Local Funds or any other officer designated by the Government in this behalf, the cost of such audit shall not exceed one and a half per cent of the net annual income of such trust or endowment and such costs shall be met from the funds of the trust or endowment concerned.