Utilisation Certificate of CSR Funds

Hi Mohit,

Regarding Utilisation Certificate (UC) for CSR funds spent in a later period (like March 2021 for FY 2019-20), here’s what you need to know:

1. Is Utilisation Certificate mandatory for CSR funds?

• CSR rules under Section 135 of the Companies Act, 2013 and the Companies (Corporate Social Responsibility Policy) Rules, 2014 do not explicitly mandate a Utilisation Certificate by a CA.

• However, if CSR funds are transferred to implementing agencies (NGOs, trusts, etc.), the company should obtain an UC or an expenditure report from the agency confirming that funds were utilized for CSR activities.

• For audit and reporting purposes, the company should maintain evidence of utilization.

2. Last date to obtain Utilisation Certificate?

• Since CSR expenditure relates to FY 2019-20, ideally the UC should be obtained within the same financial year or shortly thereafter to comply with audit timelines.

• However, since funds were spent in March 2021, and if the annual CSR report and Board Report for FY 2019-20 are already filed, obtaining UC as soon as possible is advisable.

• There is no prescribed statutory last date, but for clean audit and compliance, get it before the audit completion of FY 2020-21 or at least before filing annual reports.

3. Format of Utilisation Certificate

• No specific prescribed format for CSR UC by MCA or the Companies Act.

• Generally, it should include:

  • Name of the company and CSR project

  • Amount sanctioned/paid

  • Period of utilization

  • Details of the implementing agency

  • Certification that the amount was spent for the specified CSR purpose

  • Auditor/CA signature, name, membership number, and date

Sample wording snippet for CA Utilisation Certificate:

Utilisation Certificate
Certified that the sum of Rs. ___ received from [Company Name] towards CSR activities for the financial year 2019-20 has been utilized for the purpose of [describe CSR activity] during the period ending March 31, 2021, as per the provisions of Section 135 of the Companies Act, 2013 and CSR Rules.
This certificate is issued based on the documents and records provided by the implementing agency.

Summary:

• Obtain UC ASAP to support audit and CSR reporting.

• No strict last date, but avoid delays.

• Keep clear documentation for audit trail.