We have seen many temples vested with Archeological Department of India had not been maintained properly. Usually a Government organization should function effectively and that is the order of the day in all countries except in India. That is Indian people had lost faith in Indian bureaucracy. Similarly the dream project Auroville taken over from the hands of a Society had failed miserably in the matter of accountability. The mismanagement by Sri Aurobindo Society only led to the take over of the Auroville project by an Act of Indian Parliament called as The Auroville Foundation Act 1988. The same circumstances with regard to mismanagement prevail now, as would be known from the highlights of the Internal Audit Report of Institute of Public Auditors of India, Chennai chapter. Hence we urge the Ministry of Human Resources Development of Government of India to constitute a joint enquiry by a team comprising Comptroller and Auditor General of India, Central Bureau of Investigations and Enforcement Directorate .Based on the findings of such a team A Joint Parliamentary Committee should be constituted to bring in suitable amendments in The Auroville Foundation Act 1988. We feel Matrimandir must be handed over to Aurobindo Ashram, and as devotees they can manage their Mother’s Temple with dedication. This demand by Dravida Peravai which is fighting for the removal of the Aurobindo Ashram Trustees might surprise everyone. We want removal of Trustees, but most of the Ashramites are real devotees unlike the foreigners who use the mask of a Government Foundation to further their vested interests. The International Town which remains hidden amidst villages undeveloped to international standards must be made a Town where Tamils are in majority. Like Dr.Karan Singh’s Kashmir we are not saying other state people or other country people should not buy property here or live here. In Tamil soil making Tamils as beggars and bonded labourers foreigners should not establish a neo-colony, we are vigilant in this, and no Indian citizen will find fault with our approach. I had the Pondicherry Government Budget for 1974 in my hands before its presentation in Assembly by the 21 day Ministry headed by AIADMK’s S.Ramasamy. In my capacity as Propaganda Secretary of DMK for 1974 polls I worked hard but only 2 DMK legislators won, including Former Chief Minister M.O.H.Farook Maricar.The budget was read by Mr.M.O.H.Farook Maricar before then Chief Minister could read culminating in the defeat of 21 day Ministry. Similarly the Environment Impact Assessment ordered by Government of Puducherry about ground water pollution in Bahour-Kirumampakkam areas by Pondicherry University Professor Abbasi for years was not released, and people within Administration gave me the copy of the Interim Report which was released by Dravida Peravai, forcing Government to publish full report. Hence for public good, to generate awareness, and to draw the attention of the Government, in the absence of transparency in a Government organization answerable to Indian Parliament, we are reproducing the highlights of the Internal Audit, and it cannot be stated to be a secret, nor should it be kept in cold storage. For years same official remains Finance Officer defying the customary transfer in Government department to keep the administration clean, and a probe into Auroville functioning is necessary including transfer of officials who had remained for decades, working for their self Interest.


N.Nandhivarman, General Secretary Dravida Peravai

39 Montorsier Street, Puducherry 605001.







1)                 In spite of enormous responsibility vested on the Foundation and high volume of transaction carried by about 192 units, the Foundation has no internal mechanism for periodical inspection of books and records of the units to ensure that they are functioning properly within the autonomy given to them.


(Para 2.03)


2)                 There is no centralized accounting of income reflecting totality of income and expenditure.  There is no overall budget for Auroville.  Foundation has no system to ensure that all money received through various channels have been properly accounted for and utilized.


3)                 The Foundation has not prescribed any regulations for fund raising.

(Para 3.1.1)


4)                 No regulations were framed u/s 32(2) of the Act 1988 regarding maintenance of accounts  

 (Para 3.1.2)


5)                 There is no system of physical verification of assets to ensure their    existence in good condition.

(Para 3.1.3)


6)         There are no regulations for borrowings.                                        

(Para 3.1.4)

7)         No investment policy has been laid down.

(Para 3.1.5)


8)         There is no system in the Foundation office to watch compliance of various duties assigned to the executives / Trustees

(Para 3.1.6)


9)                 There is no mechanism in the Foundation Office to ensure proper accounting and utilization of donations received.

(Para 3.1.7)


10)      In the absence of any regulations there were cases of disposal of movable property without the approval of Foundation Office.

(Para 3.1.8)


11)      Some of the provisions in the Trust Deeds are at variance with the delegation of powers approved by the Government.

(Para 3.1.9)


12)             The Income and Expenditure Account of Foreign Contribution Account does not reflect the total foreign contribution received during a year.  As per FC 3 return submitted to the Government of India under FERA the foreign contribution received in 2004-05 was Rs.13.95 crores as against Rs.6.38 crores shown in the Income and Expenditure Account.

(Para 3.2.1(b))


13)             Foreign contributions of Rs.10.16 lakhs received in kind were not accounted for in FC 3 return submitted to the Government of India.


(Para 3.2.10(a))


14)             As per Foundation Rules 1997 approved by the Government all monies received in Auroville are to be kept in a bank account with State Bank of India.  It is observed that bank accounts were maintained in other banks also.

(Para 3.2.1(d) 3.2. (b) 3.2.4 & 3.2.6(g))


15)             Some of the receipts issued for foreign contributions received were subsequently cancelled by pencil and in some cases in ink.  In none of these cases competent authority has authenticated the cancellations.

(Para 3.2.1(k))


16)             The Income and Expenditure Account (Indian Donation) does not indicate the actual donations received during the year.  The Indian donations received during 2004-05 amounted to Rs.1.67 crores as against Rs.2.00 crores shown in the Income and Expenditure Account.

(Para 3.2.2 (a))


17)             The cash and foreign exchange transactions handled by the Auroville Maintenance Fund ranged from Rs.78.49 crores to 149.33 crores during the last 5 years.  However, no rules and regulations were framed for administering the Maintenance Fund.

(Para 3.2.4(a))


18)             As per Delegation of Powers the Finance Committee and the Secretary are empowered to make long and short term investments.  However, the Executive of Maintenance Fund made investments without their approval.  Such investments for periods ranging from 91 days to 6 years stood at Rs.15.66 crores at the end of 31st March 2005. 

(Para 3.2.4(e)


19)      The Trust deeds do not contain any provision or authority for the Foundation to select auditors for the trusts. As the Settler of the Trusts the Foundation should have the right to appoint or prescribe a panel of Auditors and review their performance

(Para 3.10.c)


20)      Consolidated Receipts and Payments Account as required in the format of

            Account prescribed by Central Govt. has not been prepared               (para3.10.i)



21)  There is no system of ascertaining the reasonableness of the prices paid for   the land acquired by the Foundation.                                             (Para 3.2.5 (a)


21)      There is no practice of obtaining prior sanction of the competent authority before incurring expenditure on stamp duty, commission paid to intermediaries and other related expenses while purchasing the land for Auroville.

(Para 3.2.5(b)


22)      No enumeration has been done of the trees available/ planted in the geographical area of Auroville at a cost of Rs.73.62 lakhs.

(Para 3.2.5 (c)


23)      The loss on sale / exchange of land is not accounted for.

(Para 3.2.5(e)


24)      Approval of the Government is not being obtained for purchase of land wherever the cost involved is more than Rs.1 crore value.

(3.2.5 (i)


25)      No master plan based on “Mother’s vision of Matrimandir” detailing its implementation and monitoring mechanism, mobilization of resources, time schedule for completion, etc. has been prepared for systematic and speedy execution of the project.

(Para 3.2.6(a)


26)      Refund of customs duty forgone due to non adherence of the prescribed

            Procedures amounted Rs.27.68 lakhs.

(Para 3.2.6 (b)


27)      Indigenous and foreign contributions received for Matrimandir during 2004-05

            were not released in full for the purpose.

(Para 3.2.6 (d))







1.01         Auroville founded by the ‘Mother’ In Feb. 1968, developed as a cultural township with the aid of funds received from organizations in and outside India as also from substantial grants received from the Central and State Governments and the United Nations Educational Scientific and Cultural Organization, contributing to international understanding and promotion of peace. For the purpose of encouraging, continuing and consolidating the aforesaid activities of Auroville it became necessary, in the public interest, to acquire the undertakings of Auroville. Auroville was vested in the Central Government under Sec.3 of the Auroville Foundation Act, 1988 and was held by the custodian till the 31st March, 1992 on behalf of the Central Govt. together with the right, title and interest. Thereafter the said undertaking was vested in the Auroville Foundation established by notification dated 29th January 1991 of the Govt. of India with effect from 01.04.1992 together with the right, title and interest.

1.02    The Auroville Foundation constituted under the Act comprises of three principal authorities via. (i) The Governing Board, (ii) The Resident’s Assembly and (iii) Auroville International Advisory Council.

1.03    The Governing Board consisting of members nominated by the Central Govt. have the power for general superintendence, direction and management of the affairs of the Foundation and exercise all the powers and discharge all the functions which may be exercised by the Foundation under the Act; inter-alia .including :

a)     reviewing basic policies and programmes and giving necessary directions for the future development of Auroville

b)     according approval to the programmes drawn up by the Residents Assembly   and

c)      Monitoring and reviewing the activities of Auroville to ensuring proper management of the properties vested in the Foundation. The Act also envisages that the Foundation shall prepare a master plan of Auroville. The Act envisages that the Foundation shall be accountable to the Govt. and the Parliament and for the purpose shall have Annual Accounts prepared and duly audited by the Comptroller and Auditor General of India (C&AG). The form of Accounts shall be as prescribed by the Central Govt in consultation with the C&AG.

1.04    Present Status

There are at present about 200 units/entities engaged in various activities, some commercial in nature, some service oriented including research, some in manufacture. They are not easily correlated to the main objectives of the Foundation, There does not appear to be any long term policy or plan for these units. They however, are entrusted with the assets of The Foundation, deal with the public and their relationship and accountability to the Foundation and to the Govt and the Parliament is informal and not often enforced. While it may be desirable to democratize various activities in Auroville with the Residents Assembly as the fountainhead of legitimacy, there are serious deviations from the accepted canons of propriety and public accountability as enumerated in the succeeding parts of this report. This raises legitimate concerns about the compliance not only with the letter and spirit of the Act and the Rules, but also the appropriateness of the Foundation acting as an umbrella for organizations that have very little to do with the “Vision”. The manner of appointment of Trustees and supervision over the operations of TRUSTS handling large sums of public moneys need a close review. Selecting a few individuals who are not employees of the Foundation and who are not treated as public servants with no defined accountability or fiduciary responsibility, and entrusting large sums of public moneys, without the discipline of well defined financial rules and procedures appear to be hazardous and certainly not in public interest.

If it is considered that the Foundation should have a minimal role in the operation of Trusts that use its resources (including land), alternative systems including statutory changes are required .This may involve a deliberate and systematic delinking.


1.05    The Residents’ Assembly consisting of all the residents of Auroville advises the Governing Board in respect of all activities relating to the residents of Auroville including admission of persons in the Register of Residents of Auroville. A Working Committee of the Residents’ Assembly has been constituted under the Act. The Working committee is empowered to create or constitute other organizations, trusts, societies or associations to carry on activities relatable to Auroville, with the approval of the Governing Board of the Foundation. They are subject to their commitment to the ideals laid down in the charter and are mandated to function in conformity with the decisions of the Governing Board.

1.06    The Auroville International Advisory Council consisting of nominated members by Govt. to advise the Governing Board on any matter relating to the development and management of Auroville.

1.07    The Powers to make Rules governing the operations and management of the foundation and its organs vests in the Central Govt. The Rules currently in force are given in Appendix. The Rules vests the authority to deal with the assets of the Foundation exclusively in the Governing Council. The Governing Council may refer matters relating to Funds and Assets to a Committee called Finance Committee comprising the Financial Adviser to the Ministry, as the Chairman, the Secretary of the Foundation and other representatives of the Govt and the Governing Board as members.

Under the Rules another body constituted by the Residents Assembly – Funds and Assets Management Committee has been empowered to decide on all issues related to funds and assets of the Foundation, subject to a Veto by the Finance Committee or the Board.