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updated January '02

Economy update

Progress report on financial and economic structures in Auroville

- as published in AVNews

1. Firstly, the last months have seen an intense effort by the FAMC to arrive at an "Agreement between the Trusts and the Units" in order to bring more coherence to the lines of responsibility in terms of the management of the assets and activities in the commercial, research and service spheres. This Agreement has now reached the stage of finalisation and is circulating to the Trustees and Executives for feedback. It is hoped to submit this document to the Governing Board for their approval at their next meeting. It is also intended to produce, almost immediately, a companion document outlining the financial powers, and their limitations, of the executives.

2. Secondly, action is in progress to establish a series of new Trusts in the service sphere. Auroville Fund, the present umbrella organisation for most service activities has reached saturation point. There are currently 54 units under Auroville Fund. With this many units it is becoming increasingly difficult to be aware of the quality of management of the units and more especially the logistic problems faced at the time of the annual audit are becoming intractable. It is therefore proposed to set up five new Trusts. It is intended to present these Trusts to the Governing Board for their approval at their next meeting so that the Trusts can become operable from 1st April 2002.

3. Thirdly, the For All / Pour Tous Trust will be set up as an umbrella for all those units that directly provide for the daily needs of the Aurovilians. It is envisaged that putting all these units together in one Trust will give an administrative framework that will facilitate the moves towards maintaining Aurovilians more and more in kind and no exchange of money in Auroville.

New Trusts

Other Trusts to be formed are a Health and Healing Trust, a Guest House Trust and a Service Trust to coordinate the basic collective services such as water, electricity, telephone and transport. These Trusts will initially be made up of units presently under Auroville Fund but it is envisaged that other units, including some presently part of other Trusts such as Artisana Trust and ABC Trust, will move into the new Trusts as the lines between commerce and service are often very blurred. At present there are single activities such as food processing and baking that have two separate units, one for marketing outside and one for providing for Auroville and these units are under different Trusts. From an accounting point of view this is a nightmare. It is hoped that these anomalies can be eliminated within this new organisational structure.

Accounting unit & group

A unit called Auroma, set up many years ago to coordinate all the accounting requirements of the Auroville Foundation, and dormant for many years, has been revitalised with the appointment of new active executives and the setting up of a work group called the Accounts Coordination Group. The work of the Accounts Coordination Group is to look at the overall challenges Auroville is facing in the field of accounts management as the number of activities, projects, units and trusts expands rapidly along with the growth of the city and its population. Auroma's function is to provide services to executives in the areas of management consultancy, sales tax, provident fund and book keeping as well as coordination of the annual visit of the CAG. It is also working to provide tools for the Trustees and the FAMC to assess unit and Trust performance and anticipate serious difficulties before the community becomes burdened with avoidable liabilities.
An ad-hoc working group has been set up to take responsibility for all the various issues relating to taxation as the affect the Foundation, its Trusts and units and its donors.

Corpus Fund

The expansion of the Corpus Fund remains an issue of active interest as the needs for loans for land, infrastructure and housing increase. About one third of the Corpus is presently loaned out into Auroville and the rest is invested in such a way that presently the Auroville Maintenance Fund is the single largest contributor to the Central Fund.

For some time discussions have been going on to reassess the priorities of the Central Fund and to investigate the possibilities to, in effect, decentralize its administration. The present Economy Group wishes to dissolve into something better, another form with more participation and a sharper focus on a shared vision. We hope that the process of concretising a new organization will be soon completed so that this can take place in the near future.

From the Auroville Economy Group, January 2002

(Alain Bernard, Judith, Minh, Otto, Pala, Rathinam)

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