Maharashtra Agricultural Competitiveness Project (MACP)

Transcription

1 Maharashtra Agricultural Competitiveness Project (MACP) Expression of Interest Consultancy Services to function as Internal Auditor of MACP The Government of Maharashtra, India has received credit from International Development Association (IDA) (Credit No.4809-IN) MACP has to get its books of Accounts audited from Internal auditors every year and submit audit report to the project. For audit of MACP, Chartered Accountants firms empanelled under CAG have to be appointed as service provider. The MACP invites eligible applicants to indicate their interest in providing the services. An applicant will be selected in accordance with the procedures set out in the World Bank s guidelines Selection of Employment of Service Provider by World Bank Borrower (May 2004 Revised Oct-2006 & May 2010) Interested applicants/firms may submit Expression of Interest in a sealed envelope clearly superscripted as Expression of Interest for Service Provided for and may obtain further information (ToR) about the services, procedure for submitting the EoI which is available at EoI must be delivered to the address given below on or before dated 23 hrs. March 2015 before The Project Director, Maharashtra Agricultural Competitiveness Project (MACP) F/E/78/, 1 st Floor, LDB Training Center Building, Near SBI Bank, Market Yard, Gultekadi, Pune , Maharashtra State, INDIA /16

2 Request for Expression of Interest Maharashtra Agricultural Competitiveness Project (MACP) IDA Credit No IN Consultancy Services to function as Internal Auditor of MACP for the Financial Year Ref: MACP/PCU/Internal Audit/2015 Date-23/2/ The Government of Maharashtra through Government of India has received a credit from the International Development Association (IDA) (CreditNo.4809-IN), for implementation of Maharashtra Agricultural Competitiveness Project (MACP). MACP intends to apply part of the proceeds of this credit to the payments under the contract for Consultancy Services to function as Internal Auditor for MACP for the period of 18 months or till the closing date of the project. 2. The broad scope of the assignment is as under: To complete Internal audit (on quarterly basis)of MACP as whole and Non- units of Project for F.Y in accordance with the auditing standards promulgated by Institute of Chartered Accountants of India (ICAI). Submit the audit report as prescribed in ToR for hiring internal auditor for MACP. The auditor may be assigned special projects such as training at district level and/ or sample review of accounting records at Rural Haats; FCSCs; SR federations; Goat demonstration units; etc. The contract will stand amended as per changes, if any, approved by the World Bank in the procedures followed to implement the project schemes for beneficiaries such as APMC, Rural Haat etc. 3. The Maharashtra Agricultural Competitiveness Project (MACP) now invites eligible CAG empanelled (Under Major Audit ) Chartered Accountant Firms to indicate their interest in providing the Services. Interested Service Providers must clearly specify Whether they are empanelled under CAG for MAJOR AUDIT. Provide information indicatingi. No. of full time partners, No. of years of their association with firm, ii. No. of qualified staff (CA) employed in the firm iii. Financial details (turnover of last three years), iv. No. of audit assignments undertaken by firm this should separately indicate v. No. of similar audit assignments (externally aided project)undertaken by firm as well as audit of government department / scheme/ project assignments undertaken also the other audit assignments i.e. statutory bank audit, society/

3 trust/ Company / PSU/ audits undertaken by firm. (with details on client, assignment period, region, staff involved, budget, etc), vi. Experience in similar nature (regional experience & experience on international funded projects), vii. Availability of appropriate skills among staff (qualification and relevant experience of the proposed staff), etc. The draft ToR for the said assignment is available at project website 4. Consultants may associate to enhance their qualifications. The Association may take the form of a joint venture (with joint and several liability) or of a sub-consultancy. This should be clearly stated in the submission along with supporting documents. 5. The Consulting Firms submitting the EOI should note that the Consulting Firms expressing their interest will be required to propose complete team at the time of submission of proposal (if short listed). Also, Consulting Firms should be in a position to commence the work within a week (with the complete team) from the date of initiation of contract, if selected. 6. A Consulting Firm will be selected in accordance with the procedures set out in the World Bank s Guidelines: Selection and Employment of Consultants by Bank Borrowers, May 2004, revised Oct 2006, revised May Interested consulting firms may obtain further information about the terms of reference, procedures for submitting the EOI etc. at macp.gov.in and may obtain further information at the address given below on any office working day from11.00 AM to17.00 PM 8. Expression of Interest in English must be submitted in a sealed envelope clearly superscripted as Expression of Interest for Consultancy Services to function as Internal Auditor for MACP for Financial Year Expression of interest must be delivered to the address mentioned below on or before 23 rd March 2015 at PM. Project Director, Maharashtra Agricultural Competitiveness Project (MACP), S. No. F/E/78, 1 st Floor, Land Development Banks Training Center, Market Yard, Gultekadi, Pune (Maharashtra) INDIA Telephone No , FAX No pdmacp@msamb.com, fs@macp.gov.in Website-

4 ToR for hiring Internal Auditor in Maharashtra Agricultural Competitiveness Project I. INTRODUCTION 1) Background: The Government of Maharashtra through Government of India has applied for a loan from International Development Association for implementation of Maharashtra Agricultural Competitiveness Project. The Project Development objective of the Maharashtra Agriculture Competitiveness Project (MACP) is to increase Agricultural Productivity and Marketable surplus as well as support competitive marketing arrangements resulting in increased farmer access to market opportunities. The objectives will be achieved through (i) Intensification and diversification of market lead production; (ii) Improving Farmer access to Markets by Promoting alternative Markets and Modernizing existing APMC and (iii) project coordination and management. a. Intensification and diversification of market lead production: by providing market led agriculture technology transfer to improve productivity and quality production and market information and marketing intelligence, agribusiness opportunities through agribusiness development facility and livestock improvement through livestock support services. b. Improving Farmer access to Markets by Promoting alternative Markets and Modernizing existing APMC: by promoting alternative marketing systems involving farmers in the formation of producer groups, their associations, developing there Farmers Common Service Centre (FCSC), introducing E-Marketing platform with the help of commodity exchanges, by producing warehouse receipt financing to overcome price risk and to provide moderate improvement in Rural Haats besides modernization of selected APMCs and Livestock Markets. c. Project management: would help to ensure effective project management at the state and district levels, and support information and logistics, communications, project related consultancies and monitoring and evaluation 2) Overview: The duration of project is six years and cost of project is Rs crores. The funds contribution for project by World Bank through Central Govt. is 65.5% of total fund, the State Government contributes 7.3% and beneficiary contribution 27.1% of the total. The project would be implemented across the whole State. However the implementation would be undertaken in three phases with 10, 11 and 12 district in phase I, II and III respectively. The Project involves the fund flow to three line departments and autonomous bodies. The three line departments involved are Agriculture, Co-operation & Marketing and Animal Husbandry. The Co-operation and Marketing Department is the Nodal Department. The autonomous bodies involved are : a) MSAMB Maharashtra State Agricultural Marketing Board Nodal Agency for the project. (under Co-operation and Marketing Department) b) MSWC Maharashtra State Warehousing Corporation (under Co-operation and Marketing Department) c) 33 ATMAs in the State (under Agriculture Department) d) Other training institutions VANAMATI (under Agriculture Department) NIPHT (under MSAMB) The Finance Department of the GoM will initially provide the funds to Co-operation and Marketing Department which will further reallocate the funds to Agriculture and Animal Husbandry Department. As the funds received and expenses incurred are on large scale, it is necessary to do accounting and auditing of the funds properly. As the total volume of accounting is very vast and complex, it can result in errors or

5 mismanagement of funds. As far as external audit of funds received in MACP in concerned the funds received through will be audited by Accountant General and non funds and beneficiary contribution will be audited by a Chartered Accountant. The internal audit of MACP accounts will be done by a separate Firm of Chartered Accountants to be taken on contractual basis as per guide lines given by the World Bank. 3) The fund flow for the project is attached in Annexure 1 4) The accounting centres for the project is attached in Annexure 2. II. Internal Audit: The essence of the World Bank audit policy is to ensure that the bank receives adequate, independent, professional, audit assurance that the proceeds of World Bank loan were used for the purposes intended, that the audit reports are free from material mismanagement and that terms of the loan agreement are complied with in all material respects. 1) Objectives : The overall objectives of Internal Audit is to provide the project management with independent assurance that (i) the internal controls established by management are designed appropriately and is commensurate to the nature and size of the project (ii) verify whether the overall financial management and specifically internal controls as documented in the Project Financial Management Manual (FMM), and the Project Implementation Plan (PIP) are in practice and working effectively. In addition, it is expected that internal audit should play a role in assisting management in bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management and internal controls 2) Scope: The internal audit will be carried out in accordance with the Standards for the Professional Practice of Internal Auditing issued by the Institute of Internal Auditors. The internal auditor should accordingly evaluate and will include such tests and controls as the auditor may consider necessary under the circumstances. In conducting the audit special attention should be paid to the following. a) All funds have been used in accordance with the conditions of the relevant legal agreements and only for the purposes for which the financing was provided. Relevant legal agreement includes the Financing Agreement, the Project Agreement and the Minutes of Negotiation b) The monthly expenditure Statement submitted by the districts indicating the approved budget provision and expenditure during the month, cumulative expenditure against the activity / sub-activity during the year should be reviewed in the internal audit. c) The procurement procedure adopted for civil works, goods and consultancy services should be reviewed by the internal auditors and it should be ensured that correct procedures as per the Bank procurement guidelines have been followed for each procurement. d) It should be ensured that the records of all procurement, agreements, work/purchase orders, invoices, receipts, stock registers etc are properly maintained, duly linked and retained including expenditures reported via Interim Unaudited Financial reports (IUFR). The auditor should also review contract management and whether business standards for payment to contractors are being adhered to. e) The project account have been prepared in accordance with consistently applied Govt. accounting standards f) The auditor should ensure the efficiency and timeliness of the funds flow mechanism at the State and District level and whether there are delays and which could impact the

6 timely implementation of project. The auditor should also identify and report the reasons for such delays and possible remedial measures. g) The auditor should ensure all project funds received under the project have been used with due attention to economy, efficiency and effectiveness, and only for the purposes for which the financing was provided; h) The auditor should ensure that all Beneficiary Contributions, deposited in separate bank account at District level are maintained as per the terms and conditions stated in the financial manual. i) The auditor should ensure that all necessary supporting documents, records, have been separately filed in respect of all project activities and that clear linkages exist between the supporting documents, accounting books and records and the periodic financial reports from the respective spending units j) The internal auditor should ensure that the adequate records are maintained regarding the assets created and assets acquired by the project, including description, details of cost, identification and location of assets. The internal auditor should carry out physical verification of a sample of assets created out of the project and comment on its utilization.the internal auditor should check as to whether the terms and conditions of contract of building new infrastructure have been adhered to with respect to time and money k) Whether the accounting for the advances to line departments and concern units are properly recorded in the accounting books; whether systems are in place for monitoring the receipt of periodic financial reports & follow up on overdue reports are adequate. Exceptions should be identified and reported. l) Whether the IUFRs are submitted in a timely manner, whether release of funds are conditional to receipt of IUFRs and report exceptions, if any m) Bank reconciliations have been carried out on a monthly basis. In case spending units having a treasury/ system, whether quarterly reconciliation of accounts are being done by the DDO of all PIU-Agri and PIU-AHD and Director of Agriculture Marketing with the AG(A&E) in a timely manner. n) While conducting internal audit in a subsequent phase the auditor will ensure that the compliance report on audit observations pointed out in the reports relating to earlier audit is made and corrective actions taken on those points are furnished in the Audit Report of the subsequent phase o) Routine errors of omission or commission noted during the course of internal audit may be rectified on the spot. p) The auditor should ensure that project assets exist, are adequately safeguarded and are actually used for their intended purposes. q) The auditor may be assigned special projects such as training at district level and/ or sample review of accounting records at Rural Haats; FCSCs; SR federations; Goat demonstration units; etc. r) The contract will stand amended as per changes, if any, approved by the World Bank in the procedures followed to implement the project schemes for beneficiaries such as APMC, Rural Haat etc. 3. Coverage for the Audit : The audit would cover the entire districts implemented in Phase I, Phase II and Phase III of the project during the year. The audit would also cover all consultancies or other contracts that may be entered into by the implementing agencies.

7 4. Extent of Audit : a) The number of districts covered under phase-i, phase-ii and phase III are listed below Project phases and the districts covered under Phase I, Phase II and Phase III Sr. Phase I Phase III Phase II Districts No. Districts 1 Amaravati Nagpur Sindhgurg 2 Akola Wardha Ratnagiri 3 Washim Bhandara Raigad 4 Yeoatmal Gondia Thane 5 Buldhana Chandrapur Nashik 6 Jalna Gadchiroli Dhule 7 Aurangabad Latur Jalgaon 8 Parbhani Beed Nadurbar 9 Hingoli Osmanabad Pune 10 Ahmednagar Nanded Satara Solapur Sangli 12 Kolhapur b) The auditor will undertake a review of 50 70% of the transactions by value; keeping in mind the risk assessed at each unit. All transfers of funds to various DDO accounts by the GoM is also to be checked and verified. 5. Period, Timing and sample coverage of Internal Audit : The Internal Audit will be conducted on a quarterly basis for all the accounting centers. The auditor will draw up an audit plan for each quarter within 5 days from the end of the quarter in consultation with the management that is PCU, PIU-MSAMB, PIU-Agri and PIU- AHD. In case of special assignments management will inform the auditor the scope of assignment and accordingly the audit plan will be chalked out by the auditor. 6. Reporting : Quarterly Reporting: Internal audit reports containing the following elements should be submitted to the Audit Committee on a quarterly basis: a. The objective and scope of the internal audit b. A summary of the internal auditing procedures performed. c. The internal auditor s opinion as to the overall adequacy of the systems of internal control and its implementation. d. Key management issues: The internal audit will report the critical issues unitwise i.e. PCU, PIU (Agri), PIU(AM) and PIU (AHD). The internal auditor should provide an Executive Summary highlighting the critical issues which require the management s attention and the status of actions on the previous recommendations e. Detailed internal audit findings of each unit audited, with adequate descriptions of weaknesses identified and the associated impacts and risks f. Appropriate and reasonable recommendations t o address the identified weaknesses; g. A separate, brief summary of the findings on review of procurement aspects with reference to the Procurement Manual, Financial Management Manual and Annual Work Plans. h. Responses to findings and recommendations by authorized persons stating the timeline for remediation and the person responsible. i. Audit queries/remarks/observations/suggestions should be bifurcated unit wise i.e. PCU,

8 PIU (Agri), PIU(AM) and PIU (AHD). The reporting should be done on report by exception basis and rest should be maintained as working papers. The main audit report (which is unit wise) should be bifurcated in three parts, first is critical issues/ serious queries which need management attention, second is queries which are not yet solved/sorted and third is queries which have been solved but management should have knowledge of these kind of errors.. j. Besides the above internal audit procedures, the information demanded through audit questionnaire by the management should be provided unitwise in each report. k. Communication/Presentation to senior Management: The auditor will present to all the Nodal Officers/ Concerned Incharge the findings of the quarterly reports and on six monthly basis will present his findings to the Project Director. The report should be discussed and agreed with the auditable units and should be structured to list the observations, the implications of the observations, the suggested recommendation and the management comments/agreed actions. The audit observations should be supported by instances and quantified, as far as practicable. The audit report of the previous quarter should be submitted within two months of end of the quarter. III. Qualifications & Experience of Consultants for Internal Audit. 1) Qualifications & Experience of Consultants for internal audit is as follows: The firm shall have a standing of at least ten years in the profession and should be empanelled with CAG for Major Audits. The firm shall have at least 5 partners out of which 3 should be full time partners. The Chartered Accountant shall have sufficient number of employees to handle the audit of the project. The break up details are (i) semi qualified & (ii) other staff (articles / audit clerks, paid assistants to be furnished. The team Composition should preferably be as follows: Sr.No. Particulars Qualification required (a) Project Leader (PL) Chartered Accountant with at least ten years of post qualification experience. (b) Audit Task Leader (ATL) Chartered Accountant with experience of minimum five years. (c) (e) Senior Audit Asst. ( Minimum Two Persons Required) Junior Audit Asst. ( Minimum four Persons Required) Graduate/ C.A. Inter with audit experience of minimum two years. Graduate/ Articles. There should be at least two teams which should handle the internal audit. The firm should have handled at least 7 internal or statutory audit assignments of Government Companies / Boards, Societies, Externally Aided Projects i n t h e l a s t 5 y e a r s and shall be familiar with Government Rules & Regulations. The details of the same should be submitted. The firm has to consider Pune has the establishment base and accordingly calculate the per diem (per day) rate for re-imbursement of Traveling, lodging, communication and other expenses incurred.

9 2) Internal Auditor s fees: The payment of the fees for the services of the CA firm will be done by the Project Co-ordination Unit (MACP). 3) Tenure: The contract is for a period of 18 months and can be renewed thereafter (for a maximum of two years, one year at a time or till the end of the project period) based satisfactory performance of the firm. The audit fees will be mutually decided with prior consent of World Bank. 4) Project Audit Review Committee: The audit committee at PCU will keep a watch on the audit objections raised by the auditor and take actions for the speedy settlement of the objections by timely follow up. Audit Committee will be set up under Project Director with following members. 1) Chief Financial Controller, PCU- member 2) Finance Specialist, PCU- member secretary 3) Nodal Officer PIU (MSAMB ) - member 4) Nodal Officer PIU (Agriculture) member 5) Nodal Officer PIU ( AHD ) - member 6) Sr. Accounts Officer PIU (MSAMB)- member 7) Accounts Officer PIU (Agriculture)- member 8) Accounts Officer PIU (AHD)- member 9) Representative of C.A. firm assigned with internal audit - member 10) Accounts Officer, PCU - member IV. Data support provided by MACP: 1) The auditor would be given access to all documents, correspondence, and any other information relating to the project and deemed necessary by the auditor (including all contract document, sub-project agreements, final audit reports submitted by the concern units ). The auditor should become familiar with the project, and with the relevant policies and guidelines of the World Bank (including those relating to disbursements, procurement and financial management and reporting). 2) The auditor would be provided copies of the Project Implementation Plan; Project Appraisal Document (PAD) of the World Bank; Development Credit Agreement, Project Agreement with IDA (including agreed Minutes of negotiations); Procurement Manual, Annual Procurement Plan, Financial Management Manual and Annual Work Plans. 3) Adequate information. files, records will be made available.

10 Annex 1 Finance Department Agricultural Department in Mantralaya RJDA Aurangabad Cheque Contractors of HPTI Aurangabad DSAO Commissioner Agriculture PIU PIU expenses Foreign training SP expenses ATMAs Through core banking Separate Bank A/C Cheque VANAMATI Co-operation & Marketing Department PCU MACP A/C 1 PCU Expenses ABPF Audit Internal & External Consultant Expenses for M & E Procurement training Dy. Comm. AHD PIU AGRI. MKTGAgri. Mktg A/C 2 PIU Expenses Market Intelligence Service NIPHT (Training ) Cheque Director of Agricultural Marketing MSWC Repairs of godowns Lab equipments Connectivity with commodity exchanges DDRCS EFT by treasury For Contracts APMC Community Procuremen t for FCSC Rural Haat Animal Husbandry Department in Mantralaya Commissioner of Animal Husbandry PIU PIU Expenses Service Provider Market Developme nt Cell Training Centre of AHD Vaccination kits to lady link workers Supply of Bucks and rotary chaff cutters to farmers in goat demonstr ation units Supply Agri. Comp. Preparation of Marketing Strategy Supplement, mobilization of farmers into CIGs/FIGs, Procurement of computer, Training for officers & farmers, Demonstrations, exposure visits, innovative AHD Comp. Training to farmers of livestock & SR markets. Exposure visits of LSM, SR market and Goat demonstration unit. Demonstration on livestock management and fodder production Separate bank A/C for Beneficiary contribution 3 For Contracts 1 -PCU MACP A/C jointly operated by Project Director and Chief Finance Controller & Accounts Officer. 2 -PIU Agri Mktg A/C jointly operated by /Accounts Officer. 3 -Beneficiary A/C operated by DDRCs and DDO from the

11 Agriculture Department Name of A/c center Level PIU- Agriculture Commissioner Agriculture VANAMATI Nagpur (State level) Phase I Nos. ANNEXURE- 2 Phase III Phase II Nos. No.s Accounts/ to be submitted to Format in which accounts is to be submitted Frequency of submission of accounts PCU MES/ IUFR Monthly/ Quarterly PIU Agriculture MES Monthly ATMAs District level PIU Agriculture MES Monthly JDA Aurangabad PIU Agriculture MES Monthly AURANGA BAD (for HPTI) Sub Total Co-operation and Marketing Department Name of A/c centre Level Phase I Nos. Phase II No.s Phase III Nos. Accounts/ to be submitted to Format in which accounts is to be submitted Frequency of submission of accounts PCU-MACP PCU-MACP-Pune World Bank Consolidated IUFR Quarterly PIU AGRI. MKTG PIU-AGRI-MKTG- Pune PCU-MACP MES/ IUFR Monthly/ Quarterly DDRCS District level PIU Agri Marketing MES Monthly MSWC Pune PIU Agri Marketing MES Monthly NIPHT Pune PIU Agri Marketing MES Monthly Sub Total Animal Husbandry Department Name of A/c center Level Phase I Nos. PIU Animal Husbandry Department Office of Deputy Commissioner of AHD Commissioner Animal Husbandry (State) Accounts/ Format in Frequency Phase Phase to be which of III II submitted accounts is submission Nos. No.s to to be of PCU -MACP MES/ submitted IUFR accounts Monthly/ Quarterly District level Commissioner AHD / PIU AHD Sub Total Total MES Monthly

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