The FAMC interacts with the community

In two meetings on November 9th and 18th, the FAMC updated the community about its work and challenges. But it first apologized for its irregular reporting, such as publishing its summer report only by the end of October. “We haven’t had any members in our group who were competent to carry our communication to the community,” explained Nicole, one of the FAMC members. “We felt this lack increasingly, both in terms of reporting and live communication. That’s why we decided on a series of meetings.” She called on the Residents’ Assembly Service and other working groups to help the FAMC, to ensure that “something emerges with which we all are comfortable.” Inge, another FAMC member, clarified that “general meetings are very important to update on the ongoing topics, but are even more important to share the deeper reasons why things have been done, which cannot so easily be communicated in reports, and give the community opportunity to ask questions.” 

The FAMC’s decision to interact more with the community was widely appreciated. “Lack of community interaction brings you on the slippery slope, leading to mistrust, speculation and mud-slinging. Please invest time and energy in regular communication to the community,” said Vikram.

The FAMC then proposed to address a wide array of topics: The selection of the Budget Coordination Committee members; the Pour Tous Purchasing Service in Aspiration; the Guidelines for Activities; the Amendments of the Code of Conduct; the Tax Deduction at Source; the Goods and Services Tax; the need to restructure the system of trusts and units; the Silver Fund; the Internal Audit, and the need for a uniform and centralised accounting system. Any topics that emerged which could not be addressed during the meetings would be put in a ‘parking lot’ which, FAMC members promised, would not become ‘a graveyard’ as a skeptical observer suggested, but “will be dealt with in subsequent general meetings.” And with that promise, the FAMC presented its first topic.

The Budget Coordination Committee (BCC)

The BCC is a working group constituted by the Residents’ Assembly which functions under the overall direction of the Funds and Assets Management Committee (FAMC). Its task is to manage the City Services income, allocate the City Services budgets and monitor the proper utilisation of the budgets. Once a year it submits an annual City Services Budget for the FAMC’s approval. 

The BCC’s functioning, said the FAMC, had left something to be desired. The BCC had not been able to produce regular and timely annual budgets based on good knowledge of ground realities; it did not take timely decisions; there was little or no monitoring of activities; and it was irregular in its reporting to the community, aside from publishing monthly figures. “I have been an FAMC member for two years,” said Dhruv. “The first budget submitted by the BCC was delayed for more than six months. In the absence of a budget, the FAMC was forced to approve only an inflationary increase of a flat 4% for each City Service budget. The capacity to drive the financial coordination was missing.”

The BCC had been structured as a group selected by and representing Auroville Working Groups. The FAMC decided to change this system and asked Working Groups to only nominate people, from which the FAMC then selected the members. These members will now function as representatives of the community as a whole and no longer represent the interest of the working group. Three members were selected for their financial and accounting knowledge.

A few objections to the new structure were raised. Devi objected to the absence of a representation of the bioregion. “There will be no understanding in the BCC or FAMC if the bioregion is not having a spokesperson in the BCC to ensure it gets the support it deserves,” she said. Another member complained about the over-representation of members from the financial sector. These questions were put in the parking lot for further consideration. 

The Pour Tous Purchasing Service.

Pour Tous has a long history. In brief, the unit was established in 1972 and The Mother gave it the name For All – Pour Tous. Its purpose was to provide basic goods at the best price to Aurovilians without the exchange of money across the counter, and without it becoming a commercial enterprise aimed at making money. 

In 1977, Pour Tous moved to its present location near Aspiration community. A decade later, the name was changed to Pour Tous Purchasing Service (PTPS), and, in accordance with its original ideals, was placed under the Service Trust, one of the trusts of the Auroville Foundation. Units under the Service Trust are not intended to make any profit on its dealings with Aurovilians and should provide goods at the best price. For this reason, units under the Service Trust are exempt from paying the 33% profit contribution to City Services. 

PTPS, however, developed differently. Under the able management of Kala and Kumar, it was not only able to turn a dilapidated unit in to a healthy one and repay its large debts – it managed to make a substantial profit over the last ten years of Rs 2.5 crore. Being a unit of the Service Trust, no contribution to the community was paid.

This change of orientation into a profit-making unit has caused much frustration among some Aurovilians, as PTPS does not honour the vision for which Pour Tous was originally conceived. The Service Trust Trustees object that a profit-oriented retail unit is registered under the Service Trust, and would like it to become a community-oriented service, like its sibling the Pour Tous Distribution Centre (PTDC) next to the Solar Kitchen. The running costs of this centre are paid from a City Services budget, which allows it to offer products at the lowest possible price. 

Throughout the years, various FAMCs have tried to convince the PTPS executives that PTPS should revert to being a service unit, but without success. Kala and Kumar want to run PTPS as a commercial income generating unit, open to all. The present FAMC agreed that this could happen, but put three conditions: (1) PTPS would have to pay the City Services contribution owed from 2012 to the present, e.g. 33% of its profits; (2) PTPS would need to contribute compensation for the assets it freely acquired from the community; and (3) PTPS would have to change its name and not include ‘Pour Tous’ or ‘PT’ in its new name. The executives, however, do not agree to the second and third condition. The FAMC now proposes that a decision of the Residents’ Assembly will decide the issue. 

The issue was hotly debated. Kumar explained the stand of the PTPS executives. “We’ve never thought of PTPS as a service-oriented unit. We thought of it as a commercial unit. We put our soul and heart into this unit, we never received any help from whomever, and we were able to turn it to profit making because of our hard work and our due diligence. We are not a service. We do not want to be run under the pressure of some working group. We want independence. We do not want to be bullied around by anybody, and the money should be used for the collective.”

Other Aurovilians argued differently. Anne reminded that “For all-Pour Tous is a mantra” and that there should be a serious reflection on its deeper meaning. Nikidass argued that PTPS should be for all the people, but that with its present pricing policy, it’s cheaper for Aurovilians to go to Pondicherry. Joseba, one of the trustees of Service Trust, informed about the outcome of a recent meeting of the Board of Trustees of the Service Trust, which concluded that PTPS should continue as a service and not be transformed into a commercial unit. “Commercial units should work towards the outside; the role of the services is to provide whatever is needed in Auroville for the community. If the executives do not want this, they should vacate,” he said.

Another observation was that PTDC is closed to new Aurovilians and Newcomers, as the unit has too little space to serve more people. Those excluded people have no option but to go shopping at PTPS in Aspiration or at HERS in Kottakarai, which is uncomfortably far for some people. Also Auroville’s guests and volunteers are forced to buy outside the city area. The question was raised: did Mother, when She talked about For All - Pour Tous, only mean Aurovilians, or also Newcomers and those who give their services to Auroville for a short period? Kumar recalled that some time ago, 300 people signed a petition to have a PTPS built in the city area, but that this proposal has been blocked by Auroville’s Town Planning Department. 

The discussion ended with the decision that a separate general meeting on this topic will be called, in which the PTPS will be given full opportunity to present its views. This ended the first General Meeting.

The Activities Guidelines 2019

The second General Meeting focused on how to regulate Auroville’s organisational structure. The Auroville Foundation has 37 trusts, under which 303 units, 372 activities and 120 City Service activities operate. The total number of units and activities is 792, and with a population of about 1550 adult Aurovilians [see article on page 7, eds] this translates into one unit for every two Aurovilians.

It is the FAMC’s task to regulate all these trusts, units and activities. To do so, over the years various systems have been developed. In 2014, the Governing Board approved a Memorandum of Understanding and Guidelines for Trusts and Units. On this basis, draft Regulations between Trusts and Units were elaborated, which later evolved into the Code of Conduct for all units of the Auroville Foundation (CoC) . The Board approved the CoC in 2017.

But the CoC hardly regulated small scale ‘activities’. Over the years, many were established under so-called ‘umbrella units’ which, in turn, were part of a trust. For example, the Kattidakalai trust has an umbrella unit called ‘Auroville Activities’ which holds 93 activities [among which is Auroville Today, eds.]; the umbrella unit ‘Auroville Small Scale Activities’ holds 70 activities; the ‘Exploration’ umbrella holds 95 large and small guesthouses; AV Arts Service holds 65 activities in the field of arts; Auroville Food Activities has 25 food related activities and LEAD holds 24 educational activities.

The exponential increase of activities worried the FAMC. Concerned with the significant liabilities that activities can collectively create, and noting that some activities were not properly managed, the FAMC decided to stop the setting up of new activities until new Activity Guidelines are in place. 

On August 30th, the FAMC presented a first draft of these Guidelines to executives of umbrella units and activity managers. The meeting wasn’t easy and a number of disagreements were voiced. The suggested community contribution was considered too high; the turnover threshold at which an activity should graduate into a unit was questioned; and the proposal that umbrella unit executives, activity managers, and accountants could only hold one position was challenged. After this meeting the FAMC decided to set up a task force of ‘stakeholders’ to formulate guidelines that reflect the needs of the different types of activities and different sectors.

Margarita, one of the task force members, explained the difficulties. “The FAMC is concerned about increased liabilities and risks to the community as many activity managers are not versed in Indian statutory regulations, financial controls and Auroville internal policies, and only few have a general business sense. The trustees of the trust under which the activity operate are personally responsible for all that is done or not done by the activity. In a case of non-compliance, substantial penalties can be imposed and Auroville’s reputation and name may be damaged. It is difficult for any trustee to monitor the large number of activities run under an umbrella unit.”

Krishna, another task force member mentioned one of the most interesting conclusions of the task force. “There was a shift in perspective from the earlier draft guidelines to now include shared roles and responsibilities of each of the stakeholders, including trustees, executives, accountants, and managers.” Another was that the realisation that new entrepreneurs need to be more centrally guided, for which the Integrated Entrepreneurship Lab was recently setup. [see box on page 1, eds.] The Task Force expects to release the new draft Activities Guidelines by the end of this year for community feedback. After incorporating feedback, a final version will be included in the Code of Conduct [see below] which will be submitted to the Residents’ Assembly for approval. 

In the question and answer session on this topic, the FAMC was requested to also study what is to be done with unused, underutilised and abandoned immoveable assets, and to look into units that are not registered under the Auroville Foundation but operate from Auroville. These topics were also delegated to the parking lot.

The Code of Conduct

The Code of Conduct for All Trusts and Units of the Auroville Foundation was the last topic of the second General Meeting. On behalf of the FAMC, Lyle presented the purpose of the Code and explained why it needs to be amended.

“The purpose of the Code of Conduct is to ensure that there is a collective sharing of resources that are generated within Auroville,” said Lyle. “It also ensures participatory governance by empowering working groups selected by the Residents’ Assembly, namely the Working Committee and the FAMC, to protect Auroville from units assuming liabilities that could endanger Auroville’s financial viability and growth. And it improves financial and asset management such that the proceeds are used for the growth of all sectors of Auroville.”

But changes are required. The FAMC wants to improve on the purpose and the general principles of the present code, introduce details for eligibility of trustees and executives, specify their duties and responsibilities, introduce succession planning, and make tighter conditions for what to do in cases where mismanagement is suspected. The proposed amendments also include the mandatory use of a standardised chartered account system and mandatory participation in a centralised account system; stipulations on the use of external bank accounts for fixed deposits; and conditions to ensure that units are maintaining adequate reserves for employees upon termination of contract in accordance with statutory rules, such as the Employees Provident Fund. 

The amendments also address contribution guidelines, which are not sufficiently clear, and when exceptions to the mandatory profit contribution can be given. Amended versions of Loan Regulations and a new guideline on Allowable Business Expenses will be introduced. The last topic was highlighted.

“Historically, the community has never expressed its views on allowable business expenditures,” said Lyle. “When Dr. Henk Thomas and chartered accountant Manuel Thomas presented their book on the Auroville economy in 2013, they observed that the income disparities in Auroville were on the increase. This has continued ever since. But there is no justification that someone working in an Auroville service unit is not properly maintained, and all units need to contribute as much as they can to bring maintenances on an equal level. Excessive expenses can dramatically reduce profit and contributions to Auroville. Clear guidelines are also required for Chartered Accountants to evaluate valid business expenses versus private expenses.

The process for amending the present CoC will start with the FAMC seeking the views of all trustees and the BCC. The FAMC will also post a draft for community feedback and other groups. The FAMC then plans to hold a general meeting presenting feedback received and provide justifications for including or not including suggestions, and then the decision will be given to the Residents’ Assembly whether or not to replace the current CoC with the amended version. Lyle warned that even the amended version of the CoC will not be perfect, and that further amendments can be expected to be made in future.

In the question and answer session, criticism was voiced by Bobby, a member of the Auroville Board of Commerce (ABC), that the existing CoC had never been approved by the Residents’ Assembly. The FAMC acknowledged this, but pointed out that the forerunners of the CoC, the Guidelines and Draft Regulations, had also never been approved by the Residents’ Assembly. “The question of approval never came up, as the ABC was itself involved in drafting the Guidelines and later the Regulations, and was mentioned in them,” explained Lyle.” But the ABC was excluded from the CoC by the Secretary of the Auroville Foundation, as it is not an official working group appointed by the Residents’ Assembly.” He added that also many dealings of Auroville units lack approval of the Residents’ Assembly, such as the use of the money that the units are generating. 

But there was also appreciation for this difficult work of the FAMC. “I applaud the efforts of the FAMC,” said Swaha. “I came here in 1995 and served on various working groups, including the FAMC, and the problem they are trying to address was well entrenched already in those times. They are now trying to do something which was needed to be done for a long time. All the time that we have been trying to address Auroville’s finances, we came up against commercial unit executives, not all but a majority, who basically say, ‘We can do anything we want and you cannot make us do anything we do not want to do.’ This is intended to address that and we should all applaud this, their courage, bravery and commitment to try to manifest the ideals of Auroville.”

What next

As these two meetings demonstrated, the consideration of such topics takes time, partly because complex issues underlie them. These issues include the relationship between individual creativity and community responsibility, and between allowing space for individual growth while ensuring that the larger collective is not disadvantaged. Of the four topics addressed in the two meetings, three topics need further discussion. Many others await their time. The FAMC’s community interactions promise to be intensified in the month to come.

Box:

The accounts of all trusts, units and activities of the Auroville Foundation are consolidated into the account of the Auroville Foundation. The FAMC has as its mission to ensure that financial rules and regulations, both internal and external, are followed; that there is financial transparency, clarity, and accountability; and that all funds and assets of Auroville are being managed in a responsible manner and are used to achieve the vision set out in the Charter of Auroville. It is mandated to encourage the development of an economy based on the Mother’s vision, which includes promoting the establishment of a self-supporting city of 50,000 people, promoting a vibrant and sustainable economy, ensuring that everyone contributes in work, kind, and/or money and that the exchange of money between Aurovilians is eliminated.