Karnataka plans licensed private audit network for cooperative societies

The Karnataka government plans to expand the use of licensed private auditors for the annual audits of cooperative societies, Cooperation Minister Laxman Savadi said on Tuesday. Savadi said thousands of cooperative societies in the State needed to be audited each year, while the Cooperative Audit Department was understaffed and overworked. The proposed arrangement would allow trained commerce and management graduates to undertake cooperative audits.

He said the graduates would receive training and licences, creating employment while helping reduce delays. The plan would build on earlier changes that allowed private chartered accountants and licensed auditors to conduct work previously reserved for government auditors. Savadi compared the proposal with the Revenue Department’s use of licensed private surveyors for land surveys.

He said the government wanted to replicate that model in the Cooperation Ministry and further liberalise the audit process. The Minister said the government intended to establish training centres at eight locations. These centres would use the education fund paid from cooperative societies’ profits.

He estimated that the fund had about ₹90 crore. Training would be provided free to poorer applicants, while others would pay nominal fees, Savadi said. He argued that outsourcing would create thousands of jobs for unemployed commerce graduates.

The Minister also criticised what he described as a current practice in which chartered accountants have junior staff complete audits before signing the documents themselves. He said the proposed system would provide a parallel arrangement for conducting audits. The source material does not specify when the scheme will begin, the licensing requirements or how the government will supervise private auditors.

It presents the proposal as an effort to combine faster compliance for cooperatives with employment opportunities for graduates.