स चन और ) =य 8गक: वभ ग - भ रत य म नक य र क इ > न ट पर रखन क *लए भ रत य म नक य र व वभ ग सदभ: व/7:67 14 जनवर 2016

Transcription

1 भ रत य म नक य र व वभ ग सदभ: व/7:67 14 जनवर 2016 वषय: भ रत य म नक य र क म य लय / य क य लय / श ख क य लय क आ त रक ल ख पर" क स ब ध म& परप स. ब आई एस / म य लय / व / परप 01 / 2016 दन कत 14 जनवर 2016 आवशयक क यव ह ह त सल &न ह ह(त /- (ग र) त *स ह),नद शक (व) प रच *लत स व म& भ म य र इ टरन ट क म 2यम स सभ य क य लय / श ख क य लय / एन आई ट" एस / क& 5"य )य गश ल क )म ख एव म य लय क सभ वभ ग )म ख ),त*लप- ज नक र" क *लए :सह यक मह,नद शक / म य सतक त अ8धक र" / सभ उप मह,नद शक (म य लय) / सभ उप मह,नद शक य क य लय / उप मह,नद शक (एन आई ट" एस) / उप मह,नद शक (क& 5"य )य गश ल )/ सभ,नद शक श ख क य लय / म य लय क सभ वभ ग )म ख प एस - मह,नद शक : मह,नद शक क: ज नक र" ह त स चन और ) =य 8गक: वभ ग - भ रत य म नक य र क इ > न ट पर रखन क *लए

2 BUREAU OF INDIAN STANDARDS (FINANCE DEPARTMENT) Our Ref: FIN/7:67 14 January 2016 Subject: Scope and Check list for Internal Audit at HQ/ROs/BOs of BIS The Circular BIS/FIN/HQ/Circular(01)/2016 dated 14 January 2016 on the captioned subject is enclosed for necessary action. (Gurpreet Singh) Director (Finance) Circulated through BIS Intranet to all ROs/BOs/NITS/CL/all Departments at HQ of BIS For Kind information: - ADG/CVO/All DDGs at HQ/All DDGRs/DDG(NITS)/DDG(Lab) - PS to DG Copy to: ITSD for placing on BIS INTRANET

3 BIS/FIN/HQ/CIRCULAR (01)/2016 BUREAU OF INDIAN STANDARDS (FINANCE DEPARTMENT HQ) Subject: Scope and Check list for Internal Audit at HQ/ROs/BOs of BIS During the ROs/BOs meeting chaired by DG:BIS on 06-07/01/2016, Head of few ROs/BOs had requested to provide a copy of Scope of Internal Audit and check list given by HQ to the Internal Auditor for performing the Internal Audit. Accordingly, the following is enclosed for ready reference of Heads of all ROs/BOs and concerned officials: 1. Scope of Internal Audit of BIS; 2. Check list for Internal Audit of BIS as provided by Finance Department to Internal Auditors; (a) Check list for Internal Audit of ROs/BOs/NITS/CL (b) Check list for Internal Audit at HQ This issues with the approval of DDGF. Our Ref: FIN/7:67 Date : 14 January 2016 (Gurpreet Singh) Director (Finance) Circulated through BIS Intranet to all ROs/BOs/NITS/CL/all Departments at HQ of BIS For Kind information: - ADG/CVO/All DDGs at HQ/All DDGRs/DDG(NITS)/DDG(Lab) - PS to DG Copy to: ITSD for placing on BIS INTRANET

4 Scope of Internal Audit Work 1.1 The Internal Auditor shall be responsible for test checking the initial records, accounts maintained by HQs/ROs/BOs/NITS/T&C with a view to ensure that the rules and regulations are followed correctly, systems and procedures regarding accounting and financial matters are adequate. 1.2 The Internal Auditor shall inter-alia cover checking of all accounting records including those relating to advance and records pertaining to purchases, civil work, physical verification of stores, equipments, tools and plant. 1.3 The Internal Auditor shall not only focus on the Income and Expenditure factor, rather may also focus on the risk indicators while performing the Internal Audit. Duties of Internal Auditor 1.4 The Internal Audit shall perform following duties : Accounting and Other related Aspects (i) (ii) Study the accounting procedures prescribed for the HQs with a view to ensuring that they are correct, adequate and free from defects or lacunae. Insure the implementation of the prescribed procedures and the order issued by HQ from time to time. a. Whether such default has occurred due to system failure and defect or due to individuals. b. Whether steps has been taken for ratification of the aforesaid defects. (iii) Scrutinize and check payments and accounting work of the accounting units. a. Payment of all types of suppliers bills for goods and services as per GFR. b. Payment of Adjustable Advance, TA Advances. LTC Advance and Medical Advance etc., and adjustments thereof. c. Payment in foreign currency to parties outside India. d. Payment under different Plan Projects, Maintenance of Respective Accounts Books & Utilization Certificate thereof. e. Management of Cash for Payment and Receipts, Cash Book and Bank Book, Maintenance of records, Bank Reconciliation, etc., f. Accounting of JVs/ Issue of Debit/Credit Advices and Reconciliation of Inter-Office Accounts, Current Assets and Liabilities Account. (iv) Scrutinize of Booking of Income under the appropriate activity i.e., Product Certifications, Quality System Certifications, Sale of Indian Standards, Hallmarking, Assaying Center and Jewellers, Training Activity and Testing Activity.

5 (v) Scrutinize of Investment made, i.e., process of Investment, receipt of Interest, checking of the accrued interest, maturity proceeds as per FDRs and its accounting in Books of Accounts. (vi) Scrutinisation of the Statutory Compliances : a. Whether the Tax has been deduction properly. b. Timely submission of the return and Issue off TDS certificates. c. Payment of Service Tax, adjustment of CENVAT and filing of Service Tax Return. d. Deduction & payment of DVAT, issue of certificate & filing of Return. e. Income Tax Audit of BIS U/S 10(23C) and filing of Income-tax Return of BIS (vii) Scrutinisation of the Fixed Asset Register (viii) Maintenance of Books of Accounts and preparation of Annual Financial Statements and Schedules thereof Personal Aspects (ix) Employees and Pensioner related matter: a. Pay/ Pension fixation of Employee/ Pensioner, b. Proper maintenance of Leave Records such as sick leave, casual leave etc., and their consequential reflection on salaries, c. Payment of personal claims of employees viz., telephone bills, newspaper bills, misc. claims, d. Payment and settlement of TA, LTC and Medical Claims of employees and maintenance of subsidiary ledgers. e. General Provident Fund (GPF): Advances/Withdrawals, Maintenance of Accounts records, Investment of GPF, Accrual Interest, Monthly Trial Balance and yearly Balance Sheet. f. National Pension Scheme : Monthly deductions and remittance of National Pension Scheme and BIS contribution and Maintenance of Subsidiary Records. g. Payment of House Building Advance, Conveyance Advance, Computer Advance etc, compliance of conditions of payment and reconciliation of its subsidiary accounts with the General Ledgers. h. Medical Claims for Pensioners: Permissions, Sanctions, Payments and Maintenance of Records. Administration Aspects (x) Scrutinisation of the Purchases Procedures as per GFR, (xi) (xii) Scrutinisation of purchase for Stationary and Consumable Items vis-a-vis the policy. Scrutinisation of the Stock Register i.e., Stationary and consumable items.

6 (xiii) Scrutinisation of utilisation report in case of vehicle hire/ assets. (xiv) (xv) Scrutinisation of running and maintains records of BIS owned cars Checking of procedures in regard to disposal of assets to ensure that adequate procedure exists for scrapping/ condemning and the same is followed. Others (xvi) (xvii) Scrutinisation of procedure of the printing of the Standards vis-a-vis the policy. Physical verification of stock of sale of standards and justification for the same. (xviii) Utilisation of the equipments in BIS Laboratories. (xix) Pursuance/ settlement of objections taken in Audit Para/ test audit notes issued by Statutory Auditor and other matter relating to statutory audit. Reporting Requirement 1.5 On Completion of the Audit of the respective Audit Unit of each phase, the following steps should be followed before finalisation of the report and the partner of firm shall meet and discuss the audit observations : (a) (b) (c) The Preliminary Audit observations shall first be discussed with the Accounts/Finance Head of the ROs/BOs/ T&C/ NIT In case the auditor is not satisfied with the explanation given by Accounts/Finance Head of the ROs/BOs/ T&C/ NITS, then shall discuss the same with the Head of ROs/BOs/ T&C/ NITS along with the finance head. Before finalisation of the audit observations, the unresolved important and statutory observation shall be discussed with the DDGF/DF/DAC at Head Quarter, so that the timely corrective action can be enforced. Based on the outcome of the aforesaid discussion, the Audit Report thus compiled shall be structured on following broad areas : a. Compliance Report of the previous observation raised in the Internal Audit b. Important Observation arises out of the audit requiring corrective action c. Report on Testing of Effectiveness of Internal Control d. Other

7 CHECK LIST FOR INTERNAL AUDIT FOR HQs A. Compliance Report of Previous observations raised in the Internal Audit Persisting irregularities only) :- S Observations Action Taken By The Management (As per Internal Audit Report for year ended 31/03/2015) B. Important Observations arising out of current year audit requiring corrective action:- I. Accounting & Other Related Aspects 1. Verification and Accounting of Expenses and Income - a) Whether the supporting documents are available with the bank payment voucher(s) and Journal voucher(s) b) Whether the vouchers are serial numbered and properly authorized c) Verify the authenticity of the expenditure with the relevant documents, budget and as per GFR d) Whether expenditure and income are accounted for properly under prescribed head of account. Whether there are cases where the expenditure is booked under other heads/wrong heads.

8 e) Check opening balances with last year closing balances. f) Verify whether MIS reports are being prepared correctly and received at HQs on due dates g) Whether all receipts are accounted for in the books of accounts. 2. Accounting Principle and Methods :- a) Whether accounting guidelines issued by BIS HQ has been followed in due spirit or not b) Deviations, if any. 3. Scrutinize and Check Payments and Accounting work of the accounting units a) Whether payment of all types of suppliers bills for goods and services are as per GFR. b) Whether Payment in foreign currency to parties outside India are properly authorized by the Delegated Authority. c) Whether Payment under different Plan Projects are

9 properly authorized and Respective Account books are maintained for the same d) Whether the assistance/grant received from Government is properly entered in the Grant Receipt Register. e) Whether Utilization certificates and Completion certificates for Plan projects are available. 4. Management of Cash for payment and receipts, Cash Book & Bank Book, Maintenance of records, Bank reconciliation, etc. a) Whether cash are physically verified with the books of accounts. Note the deviations, if any. b) Whether cash received by the office, deposited in the bank on same day or by next working day. c) Whether there are any cases where the cash collected has been utilized for its day-today expenditure. d) Whether fidelity insurance cover available. List out the case where cash balance exceeded the fidelity insurance limit.

10 e) Whether Drafts/Cheques received are being properly deposited in the bank on the very next day. f) Whether Bank reconciliation statement is being prepared on monthly basis and there is no unlinked debit/credit balance appearing in the Bank reconciliation statement. g) Whether surplus fund has been sent by ROs/BOs to HQ on every Monday after retaining their estimating expenditure needs for next week. 5. Accounting of JVs/Issue of Debit, Credit Advices and Reconciliation of Inter-Office Accounts, Current Assets and Liabilities Account. Accounting of JVs/Issue of debit, credit Advices a) Whether JVs, debit/credit advices have been properly accounted for in the Accounts Books 6. Sundry Debtors a) List out the advances/debtors pending for long time and ascertain the reasons

11 b) Make an extract of Sundry Debtors age-wise and ascertain the reason for its pendency. c) Whether the office has made proper effort to recover the amount. d) As per Delegation of Power, irrecoverable outstanding debtors of less than Rs.1000/- can be write-off by Heads, debtors upto Rs. 2,000/- by DDGs concerned, debtors upto Rs. 2,500/- by DG:BIS and beyond this by Executive Committee. Whether the Concerned Head has reviewed the debtors and written-off the irrecoverable debtors less than Rs. 1,000/- each and put up proposals to DDGs upto Rs. 2,000/- and then to DG:BIS. 7. Sundry Creditors a) List out the Sundry Creditors pending for long time and ascertain the reason. b) If Sundry Creditors, are outstanding for more than 3 years, than whether the same have been transferred to Miscellaneous Receipt Account with corresponding

12 entries in Register to be maintained for this purpose. c) Whether efforts are being made for early settlement of old outstanding entries. 8. Inter Office Reconciliations/ Balance Confirmation:- a) Whether inter office confirmation obtained from HQ/ROs/BOs at regular intervals b) In case of difference in balances, Whether rectification entries have been accounted for in the books of accounts 9. Accounting for Subsidy in Fixed Assets: a) Whether any subsidy has been received for purchase of Fixed Assets and details thereof. b) Whether Fixed Assets have been booked in the books of accounts net of subsidy received or not.

13 10. Checking of Investment and Incomes thereof:- a) Whether Investments are being made as per Investment policy of BIS b) Whether receipt of interest has been accounted for under appropriate head of account. c) Whether accrued interest at the end of the year has been properly calculated and accounted for under appropriate head d) Checking of maturity proceeds of Investment s and its accounting in Books of Accounts e) Whether balances of Investments in General Ledger Books are tallied with the subsidiary Investment Ledger 11. Verification of Certification Fees in Test Check Basis:- a) Whether Marking Fee (M.F.) is received regularly. In case where there receipt of M.F. has been approved to be received on quarterly basis, whether it is being received every quarter b) Whether the prescribed procedure adopted for regular collection of

14 marking fee has been followed or not. c) In case marking fee is recoverable on the basis of production, whether the same has been recovered as per details of production. 12. Verification of Hall Marking: a) Whether fee on sharing basis is received regularly from Hallmarking Centres on by-monthly basis. If not, whether penalty clause for the delayed payment has been imposed or not b) Whether the prescribed procedure adopted for regular collection of hallmarking fee has been followed or not. c) Whether the reconciliation of hallmarking done by hall marking centres as indicated in the declaration, is being done with the balance sheet. d) Whether at the time of providing of assistant to Hallmarking Centers, following points have been certified : Certificate for the possession of plant and machinery and

15 certification for ready of operation. Preliminary assessment of facilitation center by BIS Assessment audit for recognition of center NABL accreditation Certificate 13. Verification of Sale of Standards: a) Ensure that the price charged for the standards are correct and verify the daily sales statement with cash memo` b) Verify the stock register with the cash memo on test basis. c) Whether there are any cases where the CD-ROM has been leased to ISO/IEC. If yes, whether the royalty for payment has been properly booked in the books of account d) Print outs shall be made only where hard copies of the specific standards is not available. Make a test from stock register

16 II. Statutory Compliances:- SERVICE TAX a. Whether Service Tax has been deposited with the Service Tax Department by the prescribed dates. b. Whether return has been filed with the Service Tax Department within prescribed period. c. Whether CENVAT Credit has been adjusted correctly and timely. d. Whether the HQs has any demand from the Service Tax Department and any litigation is pending. If yes whether proper follow-up has been made to resolve the same e. Deviations, if any TDS a. Whether TDS has been properly deducted on due date and at prescribed rate. b. Whether TDS amount remitted to the Income Tax Department by 7 th of the next month. c. Is there any case where either TDS has not been deducted or deducted at lower rate.

17 d. In case where TDS has not been deducted, whether the Branch has obtained certificate from the organization.. e. Whether TDS returns are filed in time. f. Correctness of TDS certificate and whether it has been issued within the prescribed time of 15 days from the due date of furnishing quarterly TDS statement. g. Other Observation. VAT a. Whether HQs is registered with VAT Authority. If yes, which activities are covered under VAT Registration b. Whether VAT has been properly charged and at prescribed rate. c. Whether VAT has been timely deposited. d. Whether VAT returns are being timely submitted? e. Whether Input VAT Credit has been adjusted correctly and timely. e. Other observation

18 PROFESSIONAL TAX a. Whether the intimation from the ROs/BOs regarding the deposit of Professional Tax along with the employeewise detail has been received at HQ timely. b. If yes, then whether the Finance Department has deducted the said Professional Tax from the salary of the employees or not.. c. Deviations, if any FILING OF INCOME TAX RETURNS OF BIS:- b. Whether ITR of BIS has been filed within time as per the requirement of law III. Preparation of Annual financial statements and schedules thereof:- a. Whether the Accounting work has been outsourced. If so, details of work outsourced and responsibility is to be ascertained.. b. Whether the Trial Balance entries verified by the professional deployed and counter signature has been obtained for authenticity.

19 d. Whether the procedure for consolidation of all branches with Head Office trial balance is accurate and in line with the General principles of Consolidation. e. Other observation on Financial statements IV. Personnel Aspects :- A. Pay/Pension fixation of Employee/Pensioner:- Pay and Allowances a. Whether office memorandum regarding the pay fixation/macp has been timely receipt in the Finance Department b. Whether timely effect of the office memorandum has been made or not c. Whether the effect of the transfer memo issued by Establishment Department and HRD has been timely incorporated in the Finance Department d. Whether effect of incremental promotion(s) has been taken correctly by the Finance Department e. Whether timely monthly leave statement are being received in Finance Department from

20 activity heads at HQs/ NITS/ROs/BOs/ Labs f. Whether timely effect of the leave statements has been incorporated by Finance Department g. In case of Court recoveries, effect of the deduction has been as per Rules. h. Any Other Pension and Retirement Benefits i. Whether office memorandum confirming date of retirement of the employee is held on record. j. Whether calculation of pension, gratuity and family pension has been properly done as per norms. k. Whether superannuation benefits were paid to retired employees in time. l. Whether no dues certificate issued by the Establishment Department/ HRD in the name of employee is held on record. m. Any other B. Leave Encashment Liability and maintenance of Leave records:- a. Whether the calculation of leave encashment during the service has been paid as per the Rules. b. Whether the impact of the leave encashment has been recorded in the leave register of the individual.

21 c. Whether leave encashment at the time of retirement is correctly calculated as per Rules. d Whether the tax implication of the said leave encashment has been done as per prescribed provisions of Income Tax Act, 1961 C. LTC Advance:- a) Whether LTC is availed/journey undertaken as per the norms fixed by GOI. b) List out the LTC advance outstanding for long time and ascertain the reason and penal interest if charged for such delays. c) Whether Closing Balances of subsidiary books are Reconciled with general ledger. d) Deviations, If any D. TA advances:- a. Check whether the advance has been taken for the official tour. b. Whether TA advances has been adjusted timely.

22 c. List out the TA advance pending for long time and ascertain the reason. d. Whether TA Claims are settled as per TA Rules. e. Whether Closing Balances of subsidiary books are Reconciled with general ledger. E. Other advances/adjustable/medical Advances:- a. Verify the entitlement of advances b. Verify the settlement of claims. c. List out the advances pending for long time and ascertain the reason. d. Whether Closing Balances of subsidiary books are Reconciled with general ledger. F. House Building Advance (HBA):- a. Whether advance has been given to eligible Employees. b. In case of ROs/BOs/ Labs/ NITS, whether timely sanction letter has been received by Finance Department at HQ for disbursement of the advance.

23 c. Whether amount of advance given is within the sanctioned limit. d. Whether title deed, Insurance, Mortgage papers and other relevant documents has been submitted by employee. e. Whether pre-disbursement inspection conducted by authorize person, if required f. In case of advance sanction by ROs/BOs/NITS and Lab, whether timely sanction letter is being received by Finance Department at HQ for disbursement of the advance. g. Whether the timely disbursement of the advance is being made by Finance Department. G. Vehicle Loan:- a. Whether advance has been given to eligible Employees. b. In case of ROs/BOs/ Labs/ NITS, whether timely sanction letter has been received by Finance Department at HQ for disbursement of the advance. d. Whether amount of advance given is within the sanctioned limit.

24 e. Whether timely disbursement of advance has been made or not. f. In case of ROs/BOs/NITS and Lab, whether intimation has received by the Finance Department at HQ for the charging of penal interest for non-submission of RC, Insurance and other relevant papers within two month from the date of withdrawal of advance or purchase of vehicle. g. In case of HQs, whether Finance Department at HQ has charged penal interest, if applicable for non-submission of RC, Insurance and other relevant papers within two month from the date of withdrawal of advance or purchase of vehicle. H. Computer Advance:- a. Whether advance has been given to eligible Employees. b. In case of HQs, whether amount of advance given is within the sanctioned limit. c. In case of ROs/BOs/ Labs/ NITS, whether timely sanction letter has been received by Finance Department at HQ for disbursement of the advance. d. Whether timely advance has been disbursed by Finance Department or not

25 e. Whether Employees has submitted purchase bill after purchasing the computer. f. In case of ROs/BOs/NITS and Lab, whether intimation has received by Finance Department at HQ for the charging of penal interest for non-submission of purchase bill within two month from the date of withdrawal of advance or purchase of computer. g. In case of HQs whether Finance Department has initiated for charging penal interest for nonsubmission of purchase bill within two month from the date of withdrawal of advance or purchase of computer. I. Festival Advance:- a. Whether advance has been given to eligible Employees. b. In case of HQs, whether amount of advance given is within the sanctioned limit. c. In case of ROs/BOs/Labs, whether timely sanction letter has been received by Finance Department at HQ for disbursement of the advance. d. Whether the earlier recovery of the festival advance has been

26 deducted before issuing the advance. e. Whether the timely deductions has been initiated by the Finance Department J. Medical Claims of Employees/Pensioners a. Whether advance has been given to eligible employees/ pensioners. b. Whether amount of advance given is within the sanctioned limit. c. Whether Employees/ Pensioners has submitted Medical bill along with their claims. d. Reconciliation of subsidiary books with general ledger. V. GENERAL PROVIDENT FUND GPF Investment a) Whether GPF Investments are being made as per GOI policy b) Whether receipt of interest has been accounted for under appropriate head of account. c) Whether accrued interest at the end of the year has been properly calculated and accounted for under appropriate head.

27 d) Checking of maturity proceeds of Investment s and its accounting in Books of Accounts e) Whether balances of GPF Investments in General Ledger Books are tallied with the subsidiary Investment Ledger. GPF Accounts f) Whether advance/withdrawal has been sanction as per the Rules. g) Whether calculations of the final settlement is calculated as per Rules. h) Whether installments have been properly recovered on monthly basis in case of temporary advance taken out GPF i) Whether the books of accounts has been reconciled with subsidiary ledgers, or not VI. NATIONAL PENSION SCHEME(NPS) a. Whether monthly contribution has been deducted from the salary, JV for the BIS Contribution and remittance of National Pension Scheme are accounted properly. b. Whether reconciliation of subsidiary books with general

28 ledger available and whether the balance are tallied. VII. FIXED ASSETS a. Whether Fixed Assets have been physically verified at least once in a year and obtain certificate from ROs/BOs/HQs in confirmation. b. Whether Fixed Assets Register has been properly maintained with full details. c. Whether identification marking has been done on the assets to ascertain the location and identification. d. Whether fixed assets register is in the line with Fixed Assets shown in the Trial Balance. e. Whether depreciation has been properly charged at the end of the year. f. Is there any case of assets discarded, unused or condemned but kept the same in the store and no process for disposal has been made by the branch. g. Deviations, if any VIII. PURCHASE AND CONTROL OVER STOCK OF STATIONERY/CONSUMABLE ITEMS/CANTEEN ITEMS

29 a. Whether the Branch is following GFR for purchase of the stationery and consumable items. b. Whether any deviation in actual cost of item and amount paid by the Branch for the same. c. Check the justification of items purchased if seems to be on higher side. d. Whether there is proper record in stock register. Issue of items must be on the basis of issue slip. e. Verify physically the items and ask the reason for deviation, if any IX. Payments And Control Over running and maintenance of BIS Owned Cars and hired vehicles:- a. Whether utilization report in case of vehicle/hire assets was found on record and it was proper. b. Whether running and maintenance records of BIS owned cars are properly maintained for e.g. Log book. c. The average mileage per litre of fuel in case of BIS owned cars shall be verified X. Disposal of assets:-

30 a. Whether there was any condemning/scrap of assets during the year? b. Whether the condemned assets are disposed-off during the period of audit? c. Whether Committee for disposal is formed as per GFR d. Whether the receipts from the disposal of assets are accounted in appropriate head of account? e. Whether there are obsolete assets is not dispose-off? XI. Leakage of income, excess expenditure and risk indicators:- a. Whether there was any leakage of income or excess expenditure or risk indicator of any loss XII. OTHER OBSERVATIONS Observations Raised Action Taken By The Management 1 Compliances of C & AG Audit Observations:- (i) (ii) (iii) 2 Any other observation which Internal Auditor may feel reporting C. Report on Testing of effectiveness of internal control

31 CHECK LIST FOR INTERNAL AUDIT FOR ROs/ BOs/ Labs/ NITS A. Compliance Report of Previous observations raised in the Internal Audit Persisting irregularities only) :- S Observations Action Taken By The Management (As per Internal Audit Report for year ended 31/03/2015) B. Important Observations arising out of current year audit requiring corrective action:- I. Accounting & Other Related Aspects 1. Verification and Accounting of Expenses and Income - h) Whether the supporting documents are available with the bank payment voucher(s) and Journal voucher(s) i) Whether the vouchers are serial numbered and properly authorized j) Verify the authenticity of the expenditure with the relevant documents, budget and as per GFR k) Whether expenditure and income are accounted for properly under prescribed head of account. Whether

32 there are cases where the expenditure is booked under other heads/wrong heads. l) Check opening balances with last year closing balances. m) Verify whether MIS reports are being prepared correctly and received at HQs on due dates n) Whether all receipts are accounted for in the books of accounts. 2. Accounting Principle and Methods :- c) Whether accounting guidelines issued by BIS HQ has been followed in due spirit or not d) Deviations, if any. 3. Scrutinize and Check Payments and Accounting work of the accounting units f) Whether payment of all types of suppliers bills for goods and services are as per GFR. g) Whether Payment in foreign currency to parties outside India are properly

33 authorized by the Delegated Authority. h) Whether Payment under different Plan Projects are properly authorized and Respective Account books are maintained for the same i) Whether the assistance/grant received from Government is properly entered in the Grant Receipt Register. j) Whether Utilization certificates and Completion certificates for Plan projects are available. 4. Management of Cash for payment and receipts, Cash Book & Bank Book, Maintenance of records, Bank reconciliation, etc. h) Whether cash are physically verified with the books of accounts. Note the deviations, if any. i) Whether cash received by the office, deposited in the bank on same day or by next working day. j) Whether there are any cases where the cash collected has been utilized for its day-today expenditure.

34 k) Whether fidelity insurance cover available. List out the case where cash balance exceeded the fidelity insurance limit. l) Whether Drafts/Cheques received are being properly deposited in the bank on the very next day. m) Whether Bank reconciliation statement is being prepared on monthly basis and there is no unlinked debit/credit balance appearing in the Bank reconciliation statement. n) Whether surplus fund has been sent by ROs/BOs to HQ on every Monday after retaining their estimating expenditure needs for next week. 5. Accounting of JVs/Issue of Debit, Credit Advices and Reconciliation of Inter-Office Accounts, Current Assets and Liabilities Account. Accounting of JVs/Issue of debit, credit Advices b) Whether JVs, debit/credit advices have been properly accounted for in the Accounts Books

35 6. Sundry Debtors e) List out the advances/debtors pending for long time and ascertain the reasons f) Make an extract of Sundry Debtors age-wise and ascertain the reason for its pendency. g) Whether the office has made proper effort to recover the amount. h) As per Delegation of Power, irrecoverable outstanding debtors of less than Rs.1000/- can be write-off by Heads, debtors upto Rs. 2,000/- by DDGs concerned, debtors upto Rs. 2,500/- by DG:BIS and beyond this by Executive Committee. Whether the Concerned Head has reviewed the debtors and written-off the irrecoverable debtors less than Rs. 1,000/- each and put up proposals to DDGs upto Rs. 2,000/- and then to DG:BIS. 7. Sundry Creditors d) List out the Sundry Creditors pending for long time and ascertain the reason. e) If Sundry Creditors, are outstanding for more than 3 years, than whether the same

36 have been transferred to Miscellaneous Receipt Account with corresponding entries in Register to be maintained for this purpose. f) Whether efforts are being made for early settlement of old outstanding entries. 8. Inter Office Reconciliations/ Balance Confirmation:- c) Whether inter office confirmation obtained from HQ/ROs/BOs at regular intervals d) In case of difference in balances, Whether rectification entries have been accounted for in the books of accounts 9. Accounting for Subsidy in Fixed Assets: c) Whether any subsidy has been received for purchase of Fixed Assets and details thereof. d) Whether Fixed Assets have been booked in the books of accounts net of subsidy received or not.

37 10. Verification of Certification Fees in Test Check Basis:- d) Whether Marking Fee (M.F.) is received regularly. In case where there receipt of M.F. has been approved to be received on quarterly basis, whether it is being received every quarter e) Whether the prescribed procedure adopted for regular collection of marking fee has been followed or not. f) In case marking fee is recoverable on the basis of production, whether the same has been recovered as per details of production. 11. Verification of Hall Marking: e) Whether fee on sharing basis is received regularly from Hallmarking Centres on by-monthly basis. If not, whether penalty clause for the delayed payment has been imposed or not f) Whether the prescribed procedure adopted for regular collection of hallmarking fee has been followed or not.

38 g) Whether the reconciliation of hallmarking done by hall marking centres as indicated in the declaration, is being done with the balance sheet. 12. Verification of Sale of Standards: e) Ensure that the price charged for the standards are correct and verify the daily sales statement with cash memo` f) Verify the stock register with the cash memo on test basis. g) Print outs shall be made only where hard copies of the specific standards is not available. Make a test from stock register II. Statutory Compliances:- SERVICE TAX f. Whether Service Tax has been deposited with the Service Tax Department by the prescribed dates.

39 g. Whether return has been filed with the Service Tax Department within prescribed period. h. Whether CENVAT Credit has been adjusted correctly and timely. i. Whether the HQs has any demand from the Service Tax Department and any litigation is pending. If yes whether proper follow-up has been made to resolve the same j. Deviations, if any TDS a. Whether TDS has been properly deducted on due date and at prescribed rate. b. Whether TDS amount remitted to the Income Tax Department by 7 th of the next month. c. Is there any case where either TDS has not been deducted or deducted at lower rate. d. In case where TDS has not been deducted, whether the Branch has obtained certificate from the organization.. e. Whether TDS returns are filed in time. f. Correctness of TDS certificate and whether it has been issued within the prescribed time of 15

40 days from the due date of furnishing quarterly TDS statement. g. Other Observation. VAT a. Whether HQs is registered with VAT Authority. If yes, which activities are covered under VAT Registration b. Whether VAT has been properly charged and at prescribed rate. c. Whether VAT has been timely deposited. d. Whether VAT returns are being timely submitted? e. Whether Input VAT Credit has been adjusted correctly and timely. e. Other observation PROFESSIONAL TAX a. Whether timely payment of the Professional Taxes have been paid by the ROs/BOs to the concerned authority. b. Whether timely return of Professional Tax has been

41 made by the ROs/BOs to the concerned authority. c. Whether intimation regarding the recovery of the Professional Tax along with the employee-wise detail has been send to HQ. d. Deviations, if any III. Preparation of Annual financial statements and schedules thereof:- a. Whether the Accounting work has been outsourced. If so, details of work outsourced and responsibility is to be ascertained.. b. Whether the Trial Balance entries verified by the professional deployed and counter signature has been obtained for authenticity. d. Whether the procedure for consolidation of all branches with Head Office trial balance is accurate and in line with the General principles of Consolidation. e. Other observation on Financial statements

42 IV. Personnel Aspects :- A. Leave Encashment Liability and maintenance of Leave records:- a. Whether timely sanction letter has been send to the Finance Department for payment along with the Salary b. Whether the impact of the leave encashment has been recorded in the leave register of the individual. B. LTC Advance:- e) Whether LTC is availed/journey undertaken as per the norms fixed by GOI. f) List out the LTC advance outstanding for long time and ascertain the reason and penal interest if charged for such delays. g) Whether Closing Balances of subsidiary books are Reconciled with general ledger. h) Deviations, If any C. TA advances:- a. Check whether the advance has been taken for the official tour. b. Whether TA advances has been adjusted timely.

43 c. List out the TA advance pending for long time and ascertain the reason. d. Whether TA Claims are settled as per TA Rules. e. Whether Closing Balances of subsidiary books are Reconciled with general ledger. D. Other advances/adjustable/medical Advances:- a. Verify the entitlement of advances b. Verify the settlement of claims. c. List out the advances pending for long time and ascertain the reason. d. Whether Closing Balances of subsidiary books are Reconciled with general ledger. E. House Building Advance (HBA):- a. Whether advance has been given to eligible Employees. b. Whether amount of advance given is within the sanctioned limit. c. Whether timely sanction letter has been send to Finance

44 Department at HQ for disbursement of the advance. d. Whether title deed, Insurance, Mortgage papers and other relevant documents has been submitted by employee. e. Whether pre-disbursement inspection conducted by authorize person, if required f. Whether the timely disbursement of the advance is being made by Finance Department. F. Vehicle Loan:- a. Whether advance has been given to eligible Employees. b. Whether amount of advance given is within the sanctioned limit. d. Whether timely sanction letter has been send to Finance Department at HQ for disbursement of the advance. e. Whether timely disbursement of advance has been made or not. f. In case of non-submission of RC, Insurance and other relevant papers within two month from the date of withdrawal of advance or purchase of vehicle. non-receipt, whether penal interest has charges and intimation for the same has been G. Computer Advance:-

45 send to Finance Department at HQ. a. Whether advance has been given to eligible Employees. b. Whether amount of advance given is within the sanctioned limit. c. Whether timely sanction letter has been send to Finance Department at HQ for disbursement of the advance. d. Whether timely advance has been disbursed by Finance Department or not e. Whether Employees has submitted purchase bill after purchasing the computer. f. In case of non-submission of purchase bill within two month from the date of withdrawal of advance or purchase of computer, whether penal interest has charges and intimation for the same has been send to Finance Department at HQ. H. Festival Advance:-

46 a. Whether advance has been given to eligible Employees. b. Whether amount of advance given is within the sanctioned limit. c. Whether timely sanction letter has been send to Finance Department at HQ for disbursement of the advance. d. Whether the earlier recovery of the festival advance has been deducted before issuing the advance. e. Whether the timely deductions has been initiated by the Finance Department I. Medical Claims of Employees/Pensioners a. Whether advance has been given to eligible employees/ pensioners. b. Whether amount of advance given is within the sanctioned limit. c. Whether Employees/ Pensioners has submitted Medical bill along with their claims. d. Reconciliation of subsidiary books with general ledger. V. FIXED ASSETS

47 a. Whether Fixed Assets have been physically verified at least once in a year and obtain certificate from ROs/BOs/HQs in confirmation. b. Whether Fixed Assets Register has been properly maintained with full details. c. Whether identification marking has been done on the assets to ascertain the location and identification. d. Whether fixed assets register is in the line with Fixed Assets shown in the Trial Balance. e. Whether depreciation has been properly charged at the end of the year. f. Is there any case of assets discarded, unused or condemned but kept the same in the store and no process for disposal has been made by the branch. g. Deviations, if any VI. PURCHASE AND CONTROL OVER STOCK OF STATIONERY/CONSUMABLE ITEMS/CANTEEN ITEMS a. Whether the Branch is following GFR for purchase of the stationery and consumable items.

48 b. Whether any deviation in actual cost of item and amount paid by the Branch for the same. c. Check the justification of items purchased if seems to be on higher side. d. Whether there is proper record in stock register. Issue of items must be on the basis of issue slip. e Verify physically the items and ask the reason for deviation, if any VII. Payments And Control Over running and maintenance of BIS Owned Cars and hired vehicles:- a. Whether utilization report in case of vehicle/hire assets was found on record and it was proper. b. Whether running and maintenance records of BIS owned cars are properly maintained for e.g. Log book. c. The average mileage per litre of fuel in case of BIS owned cars shall be verified VIII. Disposal of assets:- a. Whether there was any condemning/scrap of assets during the year?

49 b. Whether the condemned assets are disposed-off during the period of audit? c. Whether Committee for disposal is formed as per GFR d. Whether the receipts from the disposal of assets are accounted in appropriate head of account? e. Whether there are obsolete assets is not dispose-off? IX. Leakage of income, excess expenditure and risk indicators:- a. Whether there was any leakage of income or excess expenditure or risk indicator of any loss X. OTHER OBSERVATIONS Observations Raised Action Taken By The Management 1 Compliances of C & AG Audit Observations:- (i) (ii) (iii) 2 Any other observation which Internal Auditor may feel reporting C. Report on Testing of effectiveness of internal control