NABARD FINANCIAL SERVICES LIMITED [Subsidiary of National Bank for Agriculture and Rural Development]

Transcription

1 NABARD FINANCIAL SERVICES LIMITED (NABFINS) (A subsidiary of NABARD) 3072, 14 th Cross, KR Road Banashankari 2 nd Stage, Bengaluru ho@nabfins.org; Fax: Telephones: CIN: U85110KA1997PLC021862; RE-TENDER DOCUMENT FOR INTERNAL AUDIT Opening Date of Submission of Tender : 12 th Sep 2017 Closing Date of Submission of Tender : 14 th Sep 2017 (4.00 pm)

2 Inviting application for Internal Auditor of NABARD Financial Services Ltd (NABFINS) NABARD Financial Services Limited, [NABFINS], having its registered head office at 3072, 14 th Cross, Banashankari 2 nd Stage, Shastri Nagar, Off KR Road, Bengaluru , is a subsidiary of National Bank for Agriculture and Rural Development (NABARD) with equity participation from NABARD, Government of Karnataka, Canara Bank, Union Bank of Indian, Bank of Baroda, Dhanalakshmi Bank and Federal Bank. It is a non-deposit taking NBFC-MFI registered with the Reserve Bank of India having operations in 11 states across India. The main objectives of the Company are to provide financial services in two broad areas of agriculture and microfinance. NABFINS provides credit and other facilities for promotion, expansion, commercialization and modernization of agriculture and allied activities. NABARD Financial Services Ltd (NABFINS) is inviting tender from Chartered Accountant Firms (CA Firms) for the appointment of Internal Auditor at its head office Bangalore on contract or retainer basis. The responsibilities of the Internal Auditors shall include reporting on the adequacy of internal controls, the accuracy and propriety of transactions, level of compliance with financial, regulatory and statutory norms. The audit team needs to verify various functioning aspects as per the attached scope document and other need based aspects. Internal Audit process shall also involve field visits to various district/branch offices and clients to verify the deviation on the laid down process and end utilisation of loan amount. Along with the audit, Internal Auditor of the Company shall be required to help the Company in streamlining its accounting systems, provide advice/suggestions in compliance with the accounting standards, other relevant regulations/conventions etc. Interested CA Firms may forward/submit the required information through hard copy to our Head Office. The sealed tender may be submitted in one big envelop superscripting NABFINS- Appointment of Internal Auditor containing two sealed envelopes, one for Technical Bid (Experience and Eligibility Criteria) as per Annexure 1 and the another for Financial Bid (Professional Fee) as per Annexure-2 superscripting as such and addressed to Managing Director, NABARD Financial Services Ltd. The Technical Bid envelop must contain the required

3 information along with all relevant documents in support of eligibility criteria. The Financial Bid envelop must contain only the Financial Bid format. The Technical Bid will be opened at NABFINS Head Office on 14 th Sep 2017 (5.00 pm), in presence of the bidders who wish to be present. Based on the preliminary scrutiny by the selection committee and after opening the Financial Bid, shortlisted firms shall be invited for an interaction with the selection committee on a mutually convenient date and time. The interested CA Firms are advised to read carefully the entire tender document before submitting their tender and the tender documents not received in Prescribed format and/or found to be incomplete in any respect will be summarily rejected. For details regarding the operations of NABFINS, you may please refer to our website-- Any further information/clarification can be sought from: Mr. Sai Ranganathan, AGM, NABARD Financial Services Ltd(NABFINS) 3072, 14 th Cross, KR Road Banashankari 2 nd Stage, Bengaluru sai.ranganathan@nabfins.org Eligibility Criteria: 1. The Chartered Accountant firm should have at least an experience of 3 years from the establishment or registration of the firm. 2. In case of sole proprietor firm, the proprietor should be a FCA while in case of partnership firm, one of the partners should be a FCA. 3. The firm should not have been debarred from Statutory Audit/Internal Audit of any Company. 4. The Chartered Accountant firm or its partners should not be disqualified under provision of section 141 of the Companies Act, The license of the proprietor/key person of the partnership concern have been issued for full time practice by the ICAI. 6. The Chartered Accountant firm should have its office at Bengaluru. 7. The Chartered Accountant firm should have experience and exposure of Corporates, particularly for financial institutions like NBFCs, NBFC-MFIs, Banks, Legal matters, Investments, Secretarial, Accounting and Tax matters. 8. The Chartered Accountant firm should have experience in conducting Internal audit, Management audit, Taxation and Revenue audit and other management work such as verification of assets and stocks, cash & fund management, recruitment services etc. 9. The Chartered Accountant firm or no partner thereof should have been subjected to any disciplinary proceedings initiated by the ICAI and no such proceedings should be pending as on the date of appointment.

4 10. The firm having DISA/CISA qualified partners/proprietors may be preferred. 11. The Chartered Accountant firm should have at least five articles/articled clerks and two fulltime CA on the date of tender submission. 12. The annual turnover of the Chartered Accountant firm shall not be less than Rs.20 Lacs as per the latest financial year. 13. The proposer should provide reference of two clients for whom they have earlier/recently carried out such Internal/other Audit assignment. Terms and Conditions: 1. The period of appointment shall be for conducting Internal Audit of NABFINS for the financial year starting from October However, considering satisfactory work, the appointment may be extended further. The Company reserves the right to extend the tenure or terminate the appointment on account of unsatisfactory performance. 2. Each page of the tender document is required to be signed by the partner of CA firm. The documents/certificates in support along with the tender shall also be signed by the partner. 3. Tender shall be submitted in official tender document only. If submitted in any other form, the same shall be summarily rejected. 4. No local conveyance expenses and out of pocket expenses will be paid for audit conducted at our Head Office or in local area. 5. The Chartered Accountant firm should depute trained staff (team of two) for day to day audit and the assignment should be supervised by the senior partner of the firm who will be available for discussion with the management as and when deemed necessary. The presence/involvement of senior partner (CA) may be required for minimum 3 to 5 days in a month. The audit personnel should not be changed frequently so that continuity and consistency is maintained. 6. Audit observations shall be shared on regular basis and shall be discussed with the management on monthly basis along with the status of compliance. Report along with the compliance and auditor s remarks shall be presented to the Audit Committee of the Board on quarterly basis. 7. NDA to be signed between NABFINS and proposer firm. 8. The proposer shall (whether or not she/he submits the proposal) treat the details of the documents as secret and confidential.

5 Annexure-1 TECHNICAL BID (The details to be provided as on the closing date of this notice inviting tender) General Information 1 Name of the Chartered Accountant firm 2 Registered/Main Office Address and Contact Number 3 Branch Office Addresses (if any) 4 Number of Partners and Name & profile of Partners with ICAI Registration no. 5 Membership/Registration No. & Date 6 Certificate of Practice No 7 Brief profile of the firm including promoters, parent association (if any) 8 Name & details of DISA/CISA qualified partners (If any) Eligibility Criteria 1 Whether the firm meets all the eligibility criteria as defined above? (Yes/No). If yes, supporting documents as per eligibility criteria to be enclosed. 2 Number of year s experience 3 Whether the firm is empanelled with C&AG (Yes/No) 4 Whether the firm is empanelled with RBI (Yes/No). If yes, empanelment no. 5 Whether the firm has peer review by members of ICAI for any financial year? (Yes/No). If yes, year of peer review to be mentioned. 6 Number of Chartered Accountant employees (As on the closing date of tender)

6 7 Number of Articles/ Audit Clerks (As on the closing date of tender) 8 Annual Turnover of CA firm for: a. FY b. FY c. FY Reference of two clients for whom earlier/recently carried out Internal/other Audit assignment

7 Annexure-2 FINANCIAL BID The interested CA firms may quote their professional fees (all inclusive) in the following format: Serial No Description Professional Fee 1 Internal Audit professional fee per month 2 Others (if any) 3 Taxes 4 Grand Total Grand Total Professional Fee (In words) Signature of Partner: Name of Partner: Date: Seal of Firm:

8 NABARD FINANCIAL SERVICES LIMITED INTERNAL AUDIT SCOPE OF ACTIVITIES( ANNEXURE ) ITEM NO. Internal Auditor SCOPE OF WORK Periodicity of Report % of Check Location 1 EQUITY CAPITAL 1.1 Raised during the quarter --- if yes, organisation name. Monthly 100% HO 1.2 Whether Board Resolution is passed for Allotment of Shares Monthly 100% HO (Furnish the date of minutes of Board Meeting) 1.3 Whether Amount due in respect of allotment of Monthly 100% HO shares has been duly received and the share certificate/s issued after allotment. 1.4 Statutory requirements of the Companies Act, 1961 Monthly 100% HO are complied with within stipulated period 2 LONG TERM BORROWINGS 2.1 Details of long term borrowings availed during the quarter Monthly 100% HO Delays in claiming Refinance Whether all Documentation of borrowings has been done 2.2 Whether terms & conditions for sanction of loans are complied with. Monthly 100% HO If not complied mention the same. 2.3 Check & Ensure the accuracy of monthly/monthly payment of Monthly 100% HO interest on borrowings. 2.4 Repayment of Refinance : Whether delayed, prepaid etc. Monthly 100% HO 2.5 Ensure and verify whether the company has accepted any long term loans or deposits from the Public. If so whether the provisions of new companies act are complied with. Monthly 100% HO Balance confirmation of loans and book debt statements where 2.6 ever applicable obtained or not on time. Monthly 100% HO Furnish the date of confirmation

9 3 DEFERRED TAX LIABILITIES 3.1 Whether any provision has been made for deferred tax liabilities Monthly 100% HO 3.2 Verification of Deferred tax liability Monthly 100% HO 3.3 Verify the Deferred tax liability in respect of Disallowance Monthly 100% HO of Gratuity provision U/Sec. 43B of the Income Tax Act, Verify the Deferred tax liability in respect of disallowance of Monthly 100% HO Leave Encashment Provision U/Sec. 43B of the Income Tax Act, OTHER LONG TERM LIABILITIES : 4.1 Whether there are any other long term liabilities other than long Monthly 100% HO term borrowing are existing at the end of quarter For example the security deposit from BC, etc. 4.2 Ensure, check and furnish the list of other long term Monthly 100% HO liabilities and its terms and conditions 4.3 Whether receipts have been issued for Security Deposits Monthly 100% HO Whether interest is being paid/ accruals accounted 4.4 Check if any cost is involved in the long term liabilities, If so Monthly 100% HO furnish the nature of cost and amount

10 5 PROVISIONS FOR EMPLOYEE BENEFITS 5.1 Whether Provision for employees retirement benefits such as Monthly 100% HO Gratuity and Leave Encashment was made. 5.2 Verify and ensure the guidance notes issued by ICAI are Monthly 100% HO followed by the company in respect of gratuity provision. Furnish the deviations if any. Also state the method followed by the company in respect of gratuity provision 6 SHORT TERM BORROWINGS 6.1 Nature of Short Term Borrowings existing at the end of the quarter ( Overdraft/ other facilities if any) Monthly 100% HO If yes, then to verify the gap against the actual demand and the time of demand. 6.2 Whether Boards Resolution is passed for the availment of loans Monthly 100% HO (Furnish the date of minutes of Board Meeting) Whether the defined terms and conditions of loan are complied with. Monthly 100% HO If not complied mention the same. Check & Ensure proper execution of loan agreements/documents available at HO. Monthly 100% HO 6.5 Check & Ensure the accuracy of half yearly payment of Monthly 100% HO interest on loans borrowed.

11 6.6 Half yearly confirmation of loans borrowed obtained. If so Monthly 100% HO furnish the date of confirmation 6.7 Verify and ensure that the repayment register for external borrowings is updated, interest accruals are properly accounted and repayments are made against the maintained repayment notices received from NABARD. Monthly 100% HO 6.8 Ensure and verify whether the company has accepted any short Monthly 100% HO term loans or deposits from the Public. If so provisions of of Section 58A & 58AA of the Companies Act, 1956 are complied with 7 OTHER CURRENT LIABILITIES Verify and ensure proper accounting and record of other current liabilities Monthly 100% HO For example the security deposit from staff towards the leased accommodation, etc. Whether proper provision for expenses has been made in the books Monthly 100% HO If not mention the nature of expenses not provided for. 7.3 Whether Statutory dues such as Tax Deducted at Source, Service Monthly 100% HO Tax, Professional Tax of Employees are calculated properly and remitted to the Govt on or before due dates, If not furnish full details.

12 7.4 Verify the accuracy of the above provision for expenses Monthly 100% HO 7.5 Verify the accuracy of interest provision on loans borrowed Monthly 100% HO 8 SHORT TERM PROVISIONS 8.1 Whether provision for interest liability, PAR, leave encashment and leave travel Monthly 100% HO allowance has been made. If not state the reasons for the same 8.2 In respect of Provision of PAR, Leave Encashment & Leave Travel Monthly 100% HO Allowance whether the policy approved by the board has been complied with. (Furnish the Policy No. and date adopted by the board) 8.3 Verify and check the provision for income tax as per Income Monthly 100% HO Tax Act, FIXED ASSETS 9.1 Do the fixed assets (computers, desks, filing cabinets, etc.) Monthly Sample or 100% HO correspond with what is listed in fixed assets register Certification required 9.2 Whether Physical verification of the Fixed Assets has been Half Yearly Sample or 100% HO carried out by the company. If so state date of reports and Certification required its remarks. Apart from normal wear-and-tear, are the furniture, equipment 9.3 and Half Yearly Sample or 100% HO machines well protected and in good condition? Certification required 9.4 Verification of the confirmations received from the Districts on fixed assets status. Half Yearly Sample or 100% HO Certification required 9.5 Do all fixed assets have a Fixed Asset Number clearly written on Half Yearly Sample or 100% HO them in indelible ink? Certification required Are all computers, printers and keyboards covered to protect 9.6 them Half Yearly Sample or 100% HO when not in use? Certification required

13 9.7 Whether any fixed assets have been written off during the year Half Yearly Sample or 100% HO Certification required (Furnish the date of minutes of Board Meeting) 10 CASH & BANK BALANCES : 10.1 Verification of the Cash balance for all the Monthly 100% HO bank accounts along with imprest cash and petty cash Verification of gap between fund transfer and Actual Disbursement Date, income loss due to delay or improper transfers Monthly On Sample Basis HO 10.3 Whether the cash/bank vouchers and remittance vouchers Monthly On Sample Basis HO have been authorised for payments by authorised person 10.4 Review of Bank Reconciliation Statements Monthly On Sample Basis HO 10.5 Confirmation of balance from the bank Yearly 100% HO 11 FIXED DEPOSITS 11.1 Physical verification of the Original Fixed deposit certificates, Fixed Deposit Register and notes against the renewal/pledging/maturities/transfer to other account or Bank and verify the updation status. Monthly Sample check HO 11.2 Verify whether bank deposits are held as margin money or Monthly Sample check HO security deposit against borrowings, guarantee/other commitments Furnish full details of such deposits and borrowings 11.3 Fixed deposits matured but not renewed. Furnish full details of Monthly Sample check HO such deposits

14 12 LOANS AND ADVANCES (Asset) Verify the gap from the Actual Collection Date from the Group to the Due date of Repayment to the Actual date of deposit into NABFINS account by BC/customer Monthly Sample Basis HO Verify the information/communication received dates, on the receipt (NABFINS Copy) details, from BC to Distt. Office to HO and then to compare the time and accuracy of accounting of these amounts. Monthly Sample Basis HO To furnish the overdue account list on the date of verification and the collection amount bank balance, for which the receipt details are yet to be received.(bc wise & Distt. wise) Monthly Sample Basis HO To verify if any Repayment madeby cheque from the group, if yes, whether the same gets encashed and if yes whether within the stipulated due date. Monthly Sample Basis HO 12.5 Examine the delegated utilisation of powers for sanction of loan Monthly Sample Basis HO 12.6 Verification of tally/accounting balance vis-à-vis MIS balance Monthly 100% HO for no. of outstanding groups/accounts, loan outstanding, PAR accounts Loan Process Deviations Monthly Sample Basis HO & Field Any mismatch to be reported. 13 CONTINGENT LIABILITIES AND COMMITMENTS 13.1 Furnish the details of claims against the company not Monthly 100% HO acknowledged as debt 13.2 Furnish the details of any guarantees issued by the company Monthly 100% HO 13.3 Furnish the details of estimated amount of contracts to be Monthly 100% HO executed on capital accounts and not proved for 13.4 Furnish the details of uncalled liability on shares and other Monthly 100% HO investments partly paid

15 14 REVENUE FROM OPERATIONS Verify and ensure the accuracy for the accounting of interest rate on loans given to groups. Furnish the details of short or 14.1 excess interest collected on loans. Monthly Sample Basis HO 14.2 Verify and check whether the Processing Fees, service tax receivable is properly calculated as per sanctioned terms and as per policy of the company and accounted on time. Monthly Sample Basis HO 15 OTHER INCOME 15.1 Verify and check whether the interest receivable from Banks on Fixed Deposits has been property calculated as per deposits terms and conditions and accounted. Monthly Sample Basis HO 16 EMPLOYEES BENEFITS Verify the Recoveries for remittances like Provident Fund, 16.1 Income Monthly 100% HO Tax, Professional Tax & ESI, Gratuity, Leave Encashment, LTC etc. 17 FINANCE COSTS 17.1 Verify the correctness of interest on loans borrowed as per Monthly 100% HO sanctions terms and conditions 17.2 Monitoring of bank charges paid for accepting remittance in non home branches. Monthly Sample Basis HO 18 OTHER EXPENSES 18.1 Income Tax Deductions from Payments as per the provisions Monthly 100% HO of Chapter XVIII-B have been complied with 18.2 Vouchers for all the financial transactions recorded in the Monthly Sample Basis HO books of the company. Verify all approvals, sanctions and payments as per approved policies 18.3 Any penalty payments for infringement of statutory Monthly 100% HO regulations 18.4 Verify the provision made for Non Performing Assets as per Monthly 100% HO Guidelines of RBI 18.5 Verify the provision made for Standard Assets as per Monthly 100% HO Guidelines of RBI

16 19 ACCOUNTS 19.1 Examine Balancing of Books/accounts : Timeliness, accuracy, suspense accounts, receivables & payables, accruals etc. Monthly 100% HO 19.2 Examine preparation, accuracy etc. of Monthly trial balance Monthly 100% HO 19.3 Adherance of Accounting process manual Monthly Sample Basis HO 20 OPERATIONS : Verification of loan files maintained at HO as well as in Field 20.1 offices. Field office visit on sample basis. Monthly Sample Basis HO & Field Office Verification of overdues and subsequent follow up and reporting 20.2 status. Sample Basis HO & Field Office Verification of Collection Receipt Book,Process of issue and 20.3 Reconciliation(Receipt Books) status at HO. Monthly Sample Basis HO 20.4 Verification of reporting & MIS from DO, BC,SLIs,PTSLP etc. Monthly Sample Basis HO Verification of sanction process for staff loan, group loan and second level institution loans, PTSLP loans and other loans given 20.5 by NABFINS. Monthly Sample Basis HO 20.6 Adhrance of Operation manual processes & Loan Policy Monthly Sample Basis HO & Field Office 21 ADMIN : 21.1 Verification of all third party payments like rent, electricity, Monthly Sample Basis HO mobile bill, telephone bill,purchases etc. Any delay/deviation to be reported Verification of updation status of registers like : Monthly Sample Basis HO Receipt Vouchers Payment Vouchers Petty Cash Register Petty cash vouchers cash vouchers Journal Voucher Insurance Register for staff,bc staff, Asset Insurance etc. ID Card Register Staff Loan Register Attendance Register Staff Leave Record register Any delay, improper approval, policy deviation, no updation of files/records must be reported.

17 21.3 Examine Budget versus actual expenditure 21.4 Advances granted to staff and recoveries If any recovery is not forthcoming please report the same with reasons there for 21.5 Review of all the advances other than staff advances remains overdue for more than three months---to be reported with a detail report Monthly 100% HO Adherence status verification-- staff & expenditure 21.6 policies/rules and processes Monthly 100% HO FRAUDS 22 Any frauds/misappropriation are noticed during the audit. If so 22.1 furnish confidential Monthly 100% Any report to the risk management team Status verification of of fraud and legal reportings GENERAL 23 Other points required to be brought to the notice of Risk 23.1 Management team. Monthly 100% Any 23.2 Compliance to applicable accounting standards Monthly 100% HO 23.3 Field visit and district/branch office visit Monthly Sample basis Any 23.4 Statutory and Regulatory Compliance status verification Monthly 100% HO