Department of Rural Development - 2017

Circular No: 04/2017

Reference: NP/19/06/P1/Circular/2017/04
Date: 28.09.2017

To: District Rural Development Officers, All Divisional Rural Development Officers / Development Officers, Department of Rural Development, Northern Province.

Subject: Regularization and Institutionalization of Village and Women's Rural Development Societies

Introduction

Village and Women's Rural Development Societies, as the foundation for rural economic development, must function as structured institutions that contribute to the gross national product. It is essential to ensure their effective operation as organized entities that add value to the national economy.

Importance of Regularization

It has become a necessary task to regularize Village and Women's Rural Development Societies and institutionalize them in a manner that establishes transparency, good governance, and accountability. These principles are fundamental to the sustainable functioning of societies and their ability to serve rural communities effectively.

Required Actions

This circular emphasizes the implementation of the following actions regarding societies to put this into practice:

(i) Registration and Activation

All Village and Women's Rural Development Societies must be registered and operate under the Northern Province Department of Rural Development. Societies that have been inactive for more than one year, without holding continuous administrative meetings or general meetings, will have their registration temporarily suspended for one month. If within this one-month period, applications for renewal are submitted with valid reasons, the Director, Department of Rural Development, will determine whether the registration should be canceled or not based on their decision.

(ii) Administration Renewal

It is essential that the administration is renewed once every two years. If it is observed that there is no quorum for the general meeting for the administrative change within the specified period, a general meeting notice shall be issued again with a seven (7) day period. If quorum is not achieved on both occasions, the operational status of that society shall be temporarily suspended for one month. If appropriate action is not taken to renew the administration within this period, the society shall be permanently suspended.

(iii) Membership Verification Before Elections

Prior to the election of their administration, each Village and Women's Rural Development Society must publish a list of members who have paid their subscriptions to confirm their members. Only these members shall be considered for calculating the minimum quorum for the administrative election. This ensures that only active members in good standing participate in the electoral process.

(iv) Subscription Payment Requirement

All members of societies must pay their subscription within the specified period. Failure to do so will result in loss of membership as well as loss of eligibility to vote in the administrative election. Regular subscription payment is a fundamental obligation of membership.

(v) Handover of Assets and Documents

When the election of a new administration for societies takes place, all movable and immovable assets, documents, ledgers, and the official seal that were in use by the previous administration must be officially handed over to the newly elected office bearers immediately. This ensures continuity and proper transfer of authority.

(vi) Proper Ledger Books

Society ledger books must be properly printed and used. The use of photocopies or computer printouts is completely prohibited. Furthermore, in the ledger, space shall be left for writing the names of the President, Secretary, Treasurer, and Executive Committee members, rather than having them pre-printed. This allows for changes in office bearers without wasting books.

(vii) Combined Official Seal

The President, Secretary, and Treasurer of societies shall create and use a combined official seal for the society. Separate individual seals shall not be used. This single seal, held jointly, represents the unified authority of the principal office bearers.

(viii) Additional Required Files

In addition to the files specified in the by-law, the following files must be compulsorily maintained in each society to facilitate monitoring by the Rural Development Officer:

(ix) Non-Compliant Societies

If societies fail to comply with the procedures outlined in this circular, they cannot be institutionalized. The Director of the Department has the authority to make decisions regarding the functionality of such non-compliant societies.

(x) Instructions to Officers

You are requested to identify societies that are not functioning properly in your Divisional Secretariat areas. Based on this identification, take steps to streamline administrative activities. Accordingly, gather information about such societies, take necessary steps to activate them, and guide them towards institutionalization.

I request you to inform, educate, and implement the above matters for the societies.

Detailed Explanation of Requirements

1. Registration Status

All societies must maintain active registration with the Department. Inactive societies (no meetings, no activities for over one year) face suspension and potential cancellation. This ensures that only functional societies remain registered.

2. Biennial Elections

Administration must be renewed every two years. The process requires proper notice, quorum verification, and if quorum fails twice, suspension follows. This ensures democratic renewal of leadership.

3. Membership Integrity

Only paid-up members can vote or stand for election. Societies must maintain accurate membership lists and ensure subscriptions are collected regularly. This prevents non-members from influencing society decisions.

4. Proper Handover

The transition between administrations must be documented and complete. All assets, documents, and records must be formally transferred. This ensures accountability and prevents loss of institutional memory.

5. Standardized Documentation

Using printed ledgers (not photocopies) and leaving spaces for names maintains professionalism and allows for proper record-keeping. Pre-printed names become obsolete when office bearers change.

6. Unified Seal

A single combined seal used by all three principal officers together prevents unauthorized use and ensures joint responsibility for official actions.

7. Comprehensive Filing System

The eight mandatory files cover all critical aspects of society operations:

• Contract File: For all income-generating projects
• Credit File: For financial services to members
• Members File: For core membership records
• Audit File: For financial accountability
• Registration File: For legal status documentation
• History File: For institutional memory
• Incident File: For important events
• By-law File: For governance reference

Summary of Key Requirements

Benefits of Compliance

• Transparency: Clear records enable scrutiny and build trust
• Good Governance: Proper procedures ensure democratic functioning
• Accountability: Complete records fix responsibility
• Continuity: Proper handovers prevent loss of institutional knowledge
• Audit Readiness: Organized files facilitate smooth audits
• Legal Compliance: Meeting all by-law and circular requirements
• Funding Eligibility: Well-managed societies attract more support

Consequences of Non-Compliance

• Temporary suspension of registration
• Permanent cancellation of registration
• Inability to access departmental funds or programs
• Legal action against office bearers
• Loss of assets to the department
• Disqualification from future registration

Implementation Responsibilities

Rural Development Officers shall:

• Identify non-functioning societies in their area
• Take steps to streamline administrative activities
• Gather information about inactive societies
• Guide societies towards institutionalization
• Monitor society compliance with all requirements
• Assist societies in establishing proper filing systems
• Verify membership lists before elections
• Witness and certify asset handovers
• Report non-compliant societies to higher authorities

Society Office Bearers shall:

• Ensure timely elections and administration renewals
• Maintain all required files and records
• Collect subscriptions regularly and maintain member lists
• Arrange proper handovers when administrations change
• Use proper ledgers and the combined official seal
• Comply with all by-law and circular provisions

S. Srijeyanthan
Director
Department of Rural Development
Northern Province

Distribution List

1. Chief Secretary, Northern Province – for information.
2. Secretary, Chief Ministry, Northern Province – for information.
3. District Secretary (Government Agent) – for information.
4. Assistant Auditor General, Northern Province – for information.
5. Chief Internal Auditor, Northern Province – for information.
6. Divisional Secretary – for information and necessary action.
7. Divisional Federations and District Women's Rural Development Societies – for information and implementation.

This circular supersedes any previous inconsistent instructions and comes into effect immediately.