SELECTION OF STATUTORY AUDITORS Terms of Reference (TOR) for Statutory Auditors Section I 1. Introduction-

Transcription

1

2 SELECTION OF STATUTORY AUDITORS Terms of Reference (TOR) for Statutory Auditors Section I 1. Introduction- The Government of Bihar (GoB) aims to strength the Panchayati Raj Institution as units of self-governance with a physical presence capable of planning, implement and monitoring development schemes, promoting community participation, generating employment opportunities and providing justice at doorsteps. Bihar Gram Swaraj Yojna Society under Department of Panchayati Raj, Govt, of Bihar has received financing from the World Bank towards the cost of Bihar Panchayat Strengthening Project, and aims to strengthen state government capacity in promoting inclusive, responsive and accountable Panchati Raj Institutions in the state of Bihar. Presently Society is undertaking BPSP project funded by World Bank 2. Statutory Auditors Statutory Audit is a systematic examination of financial transactions on a regular basis to ensure accuracy, authenticity, compliance with procedure and guidelines. Independent Chartered Accountant firms shall be appointed as Statutory Auditors at State Level to undertake periodical audits and report on vital parameters which would depict the true picture of financial and accounting health of the program. 3. Financing by Development Partners/ Donors: The program is supported by development partners World Bank. Compliance with specific fiduciary requirements of the development partners will additionally need to be reported by the auditors. Copies of the legal agreements and other project documents will be provided to the auditors.

3 Section II 4. Objective: The objective of the audit is to provide an independent professional opinion to the various stakeholders (State Government, World Bank etc.) on the accuracy of the projects Financial Statements and compliance with financing agreements. The responsibility of the C.A Firm will be to prepare annually Financial Statement with Consolidation I.e. ( Balance Sheet, Income & Expenditure, Receipt & Payment, together with relevant accounting policies, notes to accounts and schedules (Bank Reconciliation Statements, Statement of Funds Position, and Reconciliation of Expenditures as per Audited financial statements with the expenditure reported for the accounting period ended March 31, 2016 and March 31, 2017, (2) the funds were utilized for the purposes for which they were provided and (3) where programs are financed by development partners, the respective program expenditures are eligible for financing under the relevant grant/ credit agreement. The books of accounts as maintained by the Societies and other participating implementing units shall form the basis for preparation of the individual financial statements as well as the consolidated financial statements for the state as a whole and report thereon of BGSYS and also to fulfil the statutory compliance as per Society Registration Act, Income Tax Act etc. 5. Scope & Coverage of audit: In conducting the audit special attention should be paid to the following: a) An assessment of adequacy of the project financial systems, including financial controls, This should include aspects such as adequacy and effectiveness of accounting, financial and operational controls; level of compliance with established policies, plans and procedures; reliability of accounting systems, data and financial reports; methods of remedying weak controls; verification of assets and liabilities; a specific report on this aspect would be provided by the auditor annually as part of the management letter. b) Funds have been spent in accordance with the condition laid down by the Government of Bihar from time to time with due attention to economy and efficiency, and only for the purpose for which the financing was provided. Counterpart contribution from State Government, where required has been provided, c) Goods and services financed have been procured in accordance with the relevant procurement guidelines issued by the GoB. However, for various programmes, special attention must be paid to the requirements of the agreement between GoB and development partners (World Bank) Such requirements are available within the State/ District s concerned Program Officers. For such externally funded programmes, auditor must satisfy that

4 all expenditure, including procurement of goods and services have been carried out as per the procurement manual of the individual programmes and guidelines issued by the Programme Divisions of GoB and have all the necessary supporting documentation. d) Expenditures if any, ineligible for financing by the development partners (as documented in the Development Credit Agreement with IDA and equivalent agreement with DFID) are disclosed adequately in the financial statements and have to be certified in a separate statement as per the format provided. e) All necessary supporting documents, records and accounts have been kept in respect of the project. The responsibilities of the statutory auditors shall include reporting on the adequacy of internal controls, the accuracy and propriety of transactions, the extent to which assets are accounted for and safeguarded, and the level of compliance with financial norms and procedures for the operational guidelines Any other evaluation work, as desired by the Society. 6. Reporting and Timing a) The period to be covered under present Request for Proposal (RFP) would be Two Financial year i.e from and b) Further the period to be audited may be extended on due approval from appropriate Authority on satisfactory performance. c) The final Audit Report should be submitted 15 days from the date of signing of the contract. The firm shall submit 3 copies ( spiral Bound) {and also soft copy in MS Excel/ MS Word and Scanned (Both) in mail or CD of the audited financial statements and audit report along with the final Utilisation Certificates signed by the State and Auditor both with their comments, if any, to the Society/ GoB 7. Additional Instructions to Auditors a) Audit Report of the BGSYS shall include audit of all the transactions at the State level. b) The auditor will specifically mention in the audit report about the coverage of audit on these components and also will ensure that the releases and expenditures are duly separately reflected in each program financial statements. c) The auditor appointed shall be required to issue separate Audit Report, accounting policies, notes to accounts and management letter for each Programme individually for the State and prepare a consolidated Report also for the State and also for each programme separately for Society (BGSYS). d) Financial Statements and relevant schedules shall be prepared in accordance with the format provided by BGSYS, Panchayati Raj Dept., GoB.

5 e) Auditor shall also ensure preparation of Financial Statement for filling of return & report to Income Tax Department on relevant due date. 8. Auditor shall certify the Utilization Certificates in the prescribed format (Form 42-A of BTC, 2011) of GoB. The Utilization Certificates should be jointly signed by the Project Director, State Project Manager (Finance) and the Auditor. 9. Eligibility Criteria Offer is invited from those Chartered Accountants firms who fullfill the following requirement. 1. The firm should have its office in Bihar and must be on the approved panel of Comptroller Auditor General of India (CAG of India) for the year onwards. 2. The firm should have 5 years experience and have audit experience of at least three externally aided projects. 3. The organization should have at least 01 FCA s who have 5 years experience, are competent and willing to work towards fulfilment of audit objectives in SPMU and District Level Units, if proposed. 4. Last 3 year Average Turnover of the firm should not be less than Rs lacs annually. 5. The firm or any partners of the firm should not be black listed by any Government or any other organization in respect of any assignment or behaviour, Authorized signatory of the firm to submit an undertaking in this regard. 6. The financial proposal should not be less than Rs. 18,000 (Rupees eighteen thousand only) for each year. 7. No proposal shall be entertained in joint Venture. The firm should submit relevant documents duly attested by the authorized signatory, in support of the eligibility criteria given above. Any firm not qualifying these minimum criteria need not apply as their proposal shall be summarily rejected. 1. Important Dates a. Terms of Reference may be downloaded from our website 1) Interested eligible firms must be submitted by hand/courier/post to the Project Director, BGSYS, at the address given above by 21st June 2016 till 03:00 PM in the sealed covered superscripted as Request for Proposal for statutory audit. The technical proposal will be opened on the same Date at 04:00 PM. The Financial proposal of only technically qualified agency will be open, date for which will be announced/informed separately.

6 Guidelines for Submitting the Proposals: 1. General Guidelines: Agencies are required to submit the proposal as per the guidelines and formats detailed out in the following paras: i. The Technical proposal shall be submitted in two copies one original and one copy. The Financial proposal shall be only in original. The original and a copy of the Technical Proposal shall be placed in a sealed envelope clearly marked TECHNICAL PROPOSAL Similarly, the original Financial Proposal shall be placed in a separate sealed envelope clearly marked FINANCIAL PROPOSAL followed by the name of the assignment, and with a warning DO NOT OPEN WITH THE TECHNICAL PROPOSAL, The envelopes containing the Technical and Financial Proposals shall be placed into an outer envelope and sealed. This outer envelope shall bear the submission address, reference number and title of the Assignment, and be clearly marked DO NOT OPEN, EXCEPT IN PRESENCE OF THE OFFICIAL APPOINTED. The Directorate of institutional Finance shall not be responsible for misplacement, losing or premature opening if the outer envelope is not sealed and/or marked as stipulated. This circumstance may be case for Proposal rejection. If the Financial Proposal is not submitted in a separate sealed envelope duly marked as indicated above, this will constitute grounds for declaring the Proposal non-responsive. ii. Single Proposal: A firm should submit only one proposal. If a firm submits or participates in more than one proposal, all such proposals shall be disqualified. iii. The Technical Proposal shall be marked ÖRIGINAL or COPY as appropriate. All required copies of the Technical Proposal are to be made from the original. If there are discrepancies between the original and the copy of the Technical Proposal, the original governs. iv. Financial proposals submitted by the firm should be valid for 6 months from the date of submission of the proposal by the firm. v. Each page, Form, Annexure and Appendices of the Technical and Financial Proposal must be numbered and signed by the Authorised Vi. Signatory of the firm. All blank spaces in the finical proposal must be filled in completely where indicated, either typed or written in ink.

7 Vii. II. Technical Proposal: PD, BGSYS Panchayati Raj Department, Bihar, reserves the right to accept or reject any application without giving any explanation. i. Letter of Transmittal (Form T-1) ii. Detail of Firm (Form T-2), iii. Details of the Qualified Staff & Semi-qualified Staff (Form T-3) iv. Brief of the relevant experience (Form T-4) III. Financial Proposal: i. The financial bid shall be submitted only for professional (audit) fee to be charged by the firm. This audit fee shall be exclusive of the taxes as applicable. The taxes, as applicable (service tax & cess on service tax), shall be paid by BGSYS for each Programme separately on submission of final bill by the audit firm. The financial bid shall be submitted as per Form F-1 ii. Percentage (or proportion) of funds involved/turnover shall not be basis for quoting the audit fee. iii. The audit firm shall travelling and incidental expenditure. Section III Selection Process of the Auditor: 1. The Technical Bid will be opened first to ascertain that the applying firm (s) fulfils the eligibility criteria given the ToR. 2. Financial bids of on those firm will be opened which qualify during technical evaluation. 3. After opening of financial bids the ranking will be done from lowest to highest financial bids. Lowest bidder (L1) shall be offered the Letter of Award (LOA) to carry out the audit assignment. 4. On completion of selection process, the firm selected shall be awarded the contract of audit by issuing the Letter of Award (LOA). The firm should accept the Award within 3 days of the issuance of LOA.

8 Section IV Form Form T-1 Letter of Transmittal To, PD, Bihar Gram Swaraj Yojana Society, Panchayati Raj Department Dear Sir, We, the undersigned, offer to provide audit services for the BGSYS, in accordance with your Tender Notice for Appointment of Statutory Auditor dated [insert Date]. We are hereby submitting our Proposal, which includes this Technical Proposal, and a Finical Proposal sealed under separate envelope. We hereby declare that all information and statement made in this Proposal are true and accept that any misinterpretation contained in may lead to our disqualification. The price quoted by us in the Finical Proposal (Form F-1) are valid till six month from the date of submission of the quotation. We confirm that this proposal remain binding upon us and may be accepted by you any time before expiry date. Price have been arrived independently without consolation, communication, agreement or understanding (for the purpose of restricting competition) with any competitor. We agree to bear all cost incurred by us in connection with preparation and submission of the proposal and to bear any further pre-contract cost. We understand that PD, BGSYS, Panchyati Raj Department, 3 rd Floor, Biscouman Tower, Gandhi Maidan, Patna , Government of Bihar is not bound to accept the lowest or any proposal or to give any reason for award, or for the rejection of any proposal. I confirm that I have authority of [Insert Name of the C.A. Firm] to submit the proposal and to negotiate on its behalf. Yours faithfully

9 Particulars/Details of the Firm Form T-2 SL.N PARTICULARS o 1 Name of the Firm 2 Address of the Firm Head Office Branch Office 1,2,3. (Particulars of each branch to be given) Supporting Documents required to be submitted along with this Form Phone No: Fax No: Mobile of Head Office In-charge: Phone No: Fax No: Mobile of Branch Office In-charge: 3 Firm Income Tax PAN No. Attach copy of PAN card 4 Firm Service Tax Registration No Attach copy of Registration 5 Registration No. with ICAI Attach copy of Registration 6 Empanelment No. with C & A G Attach proof of latest empanelment with C & AG for the year under Audit. 7 No. of Year of Firm Existence & Date of Attach supporting document(s) establishment of Frim 8 Turnover of the Firm in last three years Attach Financial of the last three years 9 Annual Average Turnover 10 Audit Experience of the Firm: Number of Assignment in Commercial/Statutory Audit Number of Assignments in Social Sector Audit (Other than audit of Charitable Institutions) 11 Details of Partners: Provide following details: Number of Full Time Fellow Partners associated with the Firm. Name of each partner, Date of becoming ACA and FCA Date of joining the firm, Membership No, Qualification Experience Whether the partners is engaged full time or part time with the firm. Year Turnover Copy of the Offer Letter & the Fee Charged. Copy of the Offer Letter & the Fee Charged.

10 Form T-3 Details of Qualified Staff CV (Chartered Accountants) (Please provide attested copy of Certificate of ICAI as on for each qualified staff also provide CV) SL.No Name of Staff 1 2 Length of Association with the Firm (in years) Education Qualification Area of Key Expertise Membership No. Relevant Experience Details of Semi-qualified Staff (including Article Clerk etc) SL.No. Name of Staff Semi Qualified Staffs: Article Clerks: 1 2 Others Length of Association with the Firm (in years) Education Qualification Area of Key Expertise Relevant Experience Remarks

11 Form T-4 Brief of Relevant Experience: Experience of audit in relation to Externally Aided Projects SL.No Name of the Auditee Organization Period of Audit of Accounts Duration of Completion of Assignment 1 From To Proof of the letter of work or Assignment awarded by the Auditee Organization (P1 attach a copy of the letter)

12 FORMAT FOR THE FINACIAL BID Form F-1 (For Each financial Year not less than Rs. 18,000) (Financial Proposal for each audited financial year) Item or Activity AUDIT FEE (Exclusive of All Taxes) Total Amount (in Rupees) Both in Numeric and in Words. RS. /- (Rupees ). 1. The rates quoted are for one year which be applicable for subsequent years also. 2. Services Tax as applicable on the date of payment will be paid extra. 3. TDS of other statutory deductions as applicable will be deducted at the rates notified by Government of India to time from each bill. Signature of the authorised signatory

13 Short listing Criteria of the Technical Proposal for Hiring Chartered Accountant Firm for Statutory Audit of Bihar Gram Swaraj Yojana Society, Patna Sl. No. Qualifying Criteria 1 Office in Bihar (Head office/ Branch Office) Qualified / Not Qualified (Provide document) 2 Empaneled with CAG (Comptroller Auditor General of India) for the year Qualified / Not Qualified (Provide document) Scoring Criteria Sl. No. Criteria Marking Criteria Maximum Marks 1. Experience of Firms* > 5 Years to < 6 Years - 15 Marks > 6 Years to < 7 Years 20 Marks > 7 Years to < 8 Years 25 Marks > 8 Years - 30 (* Counted from the date of constitution of the firm ; certification to that effect needs to be provided) Total Marks 30 The firm have audit experience of at least three externally aided project* 3 to 4-15 Marks 5 to 6 20 Marks 7 to 8 25 Marks More than 8 30 Marks (* Counted from the date of constitution of the firm ; certification to that effect needs to be provided) 2. Total Marks 30 Full time FCA (At least 3. one FCA ) 6 Marks for each partner (maximum marks will be 30 under this criteria) Total Marks Full time CA Employee 5 Marks for each CA Employee (maximum marks will be 10 under this criteria) Total Marks 10 NOTE : Only those firms which may score minimum 70 marks will be eligible for opening of financial bid