Critical Analysis of Audit Reports under the Maharashtra Public Trusts Act, 1950: Ensuring Financial Transparency, Governance, and Legal Compliance in Public Charitable Trusts

Abstract

The Maharashtra Public Trusts Act, 1950 (MPT Act) establishes the legal and regulatory framework for the administration of public charitable and religious trusts in Maharashtra. This paper critically examines the audit provisions under Sections 32 to 35 of the MPT Act, with a focus on financial transparency, statutory compliance, and governance accountability. It explores how the mandatory audit process, as prescribed by law, serves not only as a tool for financial scrutiny but also as a mechanism to detect mismanagement, safeguard trust property, and uphold public confidence in charitable institutions.

The paper investigates the legal obligations of trustees in maintaining accurate records, timely submission of audit reports, and compliance with prescribed formats, highlighting the consequences of non-compliance and delayed filings. Through an analytical lens, the paper also evaluates the role of the Charity Commissioner, the significance of auditor independence, and the impact of audit findings on the functioning and credibility of trusts. Furthermore, the paper identifies common challenges such as mismanagement of funds, lack of internal controls, and improper investment practices, and provides recommendations for strengthening accountability through legal reforms, trustee training, digital record-keeping, and regular audits. By addressing both procedural and systemic gaps, this paper underscores the vital role of audit compliance in ensuring that public trusts operate with integrity, transparency, and alignment with their charitable objectives under the MPT Act, 1950.