Department of Water Resources Orissa Community Tank Development Management Society Plot No-A-8/2, Bhoi Nagar, Beside RTO Office, Bhubaneswar751022, Ph. 0674-2542252, E. Mail: director@octmp.nic.in Engagement of External Auditor EoI. No.OCTDMS-06/2014-15 Project Director, OCTDMS invites EoI from suitable CA firms empaneled in CAG, Govt. of India for engagement of External Auditor for the financial year 2014-15. Covering State Project Unit and Pani Panchayats in 12 District Project Units. The details of the EoI and ToR are available in www.odisha.gov.in under link advertisement & www.octmp.nic.in under link tender. The last date of receipt of EoI is 17.12.2014 upto 15:00hrs and will be opened on same day at 15:30hrs. Sd/- Project Director, OCTDMS -cum-special Secretary to Govt., DoWR
Request for Expression of Interest Odisha Community Tank Development and Management Society Rajeev Bhawan, Bhubaneswar 751 001 Consultancy Services for External Audit of OCTMP Financial Year 2014-15 1. The Government of Odisha, through the Government of India, has received a loan and a credit (totalling to US$ 87.8 million) from the International Bank for reconstruction and Development (IBRD) and the International Development Association (IDA) for the implementation of the Odisha Community Tank Management Project (OCTMP) across the State of Odisha. The Government of Odisha intends to apply part of this loan/credit to finance the hiring of services of a Chartered Accountant firm for statutory audit of the project. 2. The proposed project development objective is for selected tank based producers to improve agricultural productivity and water user associations to manage tank systems effectively. It is envisaged that the project, to be implemented/completed in the coming 2 years, will support the physical rehabilitation/modernization of about 324 tanks with an estimated CCA of about 60000 hectares, spread across 12 districts of the state namely Angul, Baragarh, Balasore, Boudh, Cuttack, Ganjam, Gajapati, Khordha, Jajpur, Jharsuguda, Mayurbhanj, Rayagada. Total nos. of Pani Panchayats are 375. 3. The objective of the statutory external audit of the Project Financial Statement (PFS) is to enable the auditor to express a professional opinion as to whether (1) the PFS give a true and fair view of the sources and applications of project funds for the period under audit examination; (2) the funds were utilized for the purposes for which they were provided and that the expenditures shown in the PFS are eligible for financing under the relevant loan or credit agreement. In addition, the auditor will express a professional opinion as to whether the Financial Management Reports submitted by project management may be relied upon to support any applications for withdrawal from the IDA Credit/Loan. The books of account that provide the basis for preparation of the PFS are established to reflect the financial transactions of the project and are maintained by OCTDMS and its constituent state and district level units including Command Area Development Agency (CADA) works taken up by OCTMP in District Project Units. The CADA districts are Baragarh, Boudh, Cuttack, Jajpur, Khordha and Mayurbhanj whose divisions are located Bhadrak, Bhubaneswar and Sambalpur. 4. The proposed assignment is expected to be on an annual basis for a period of one year. 5. OCTDMS now invites eligible Chartered Accountant firms to indicate their interest in providing for External Audit services. Interested consultants must provide information indicating that they are qualified to perform the Services (brochures, duration of the firm in existence, qualification and experience of the auditors, description of similar assignments, empanelment with CAG of India, qualification and skills among supporting audit staff, etc.). 6. The Audit firm applying for the External Audit assignment should possess the following qualifications: CAG Empanelment: The firm should be empanelled under the Major list of Chartered Accountant firms of the Comptroller &Auditor General of India; Specified Experience: The firm should have experience of successfully carrying similar or related assignment of externally aided projects; Specified Turnover: Annual turnover of the firm for the last three financial years (FY) from audit services is Rs. 75 lakhs or above in each year 7. The firm of Chartered Accounts 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 October, 2006, May 2010 and August, 2014. 8. Interested consultants may obtain further information from the contact person between 10.00hrs to 17.00hrs from 01/12/2014 to 16/12/2014 on all working days or refer the ToR available in the website: www.odisha.gov.in under link advertisement and www.octmp.nic.in under link tender. 9. Expression of Interest must be delivered to the address below no later than 15.00hrs of 17/12/2014 and will be opened at 15:30hrs of 17/12/2014. Office name: Odisha Community Tank Development and Management Society Address: Project Director-cum-Special Secretary to Govt. OCTMP, A-8/2, Near RTO Office, Bhoi Nagar, Bhubaneswar, Odisha, India Pin 751 022. Contact Person: Manager, Procurement Telephone Number: 0674-2542252 Project Director,OCTDMS-cum- Special Secretary to Govt., DoWR
Odisha Community Tanks Development & Management Society (OCTDMS) Terms of Reference for External/ Statutory Auditors for the Financial Year 2014-15 1. Background The Government of Odisha in partnership with Government of India has initiated Odisha Community Tank Management Project (OCTMP) to repair and rehabilitate approximately 320 minor irrigation tanks having a command area of 40 ha to 2000 Ha and covering 0.60 lakh ha across the state of Odisha with funding from World Bank. Tank irrigation is one of the oldest methods of irrigation in Odisha. The State has 28,303 tanks approximately, including tanks of the Government and Private Sector (GoI, Minor Irrigation Census, 2001). About 3646 of these tanks are relatively large with an irrigation capacity of 5.47 million hectares. These 3646 tanks irrigate between 40 ha to 2000 ha of land and are managed by the Chief Engineer (MI). The Odisha Community Tank Development and Management Society (OCTDMS) has been formed under the Department of Water Resources, Government of Odisha and is implementing the OCTMP. The project envisages execution through primary and secondary institutions from the State Project Unit to the Community Level Groups with facilitation of Support Organisations. 2. Objectives of the Project- The overarching objective of the project is to improve agricultural productivity in selected tanks and Pani Panchayats to manage tank systems effectively. In order to do so the underlying objectives of the project include: Strengthening community-based institutions to assume responsibility for the tank system improvement and management: This would include, inter alia, development of human resources, formation and/ or strengthening of local institutions for tank improvement and management, and developing mechanisms whereby the needs of the traditionally vulnerable stakeholders can be addressed. Tank System Improvements: This would include physical investment in tank systems. The actual rehabilitation work required would be determined for each tank system individually with an upfront Tank Improvement and Management Plan prepared in consultation with tank users prior to undertaking any investments. In general, interventions are likely to address deficiencies in feeder channels, tank bed and structures, and the water distribution and drainage systems. Livelihoods support services for tank system users: This would include promotion of farmer interest groups, agricultural research and extension support through public agencies and private sector providers as appropriate, and facilitation of market linkages for agricultural producers /groups (including fisheries and livestock products. Project Management: The objective of this component is to ensure smooth implementation of project activities, monitoring of project implementation progress and outputs/ outcomes achieved, and learning from project experience. Major activities under this component would include: (i) setting up and supporting project management units at the state and district levels, (ii) project MIS, (iii) internal monitoring, evaluation and learning, (iv) services of an external M & E agency to be engaged as consultants for the duration of the project; and (iv) information and communications support including establishment of project website and documentation of project experience and its dissemination into the wider development community (v) Finance and Procurement. 3. Project Scope & Components It is envisaged that the project, to be implemented over a period of 2 years, will support the physical rehabilitation/ modernization of about 320 tanks with an estimated CCA of about 60,000 hectares, spread across 12 districts of the state. The four broad components of the project are: Component A: Institutional Strengthening Component B: Tank Systems Improvements Component C: Agricultural Livelihood Support Services Sub Component C.1 Agriculture & Horticulture
Sub Component C.2 Sub Component C.3 Sub Component C.4 Sub Component C.6 Component D: Livestock Fisheries Foreshore Area Treatment Agri-Business and Marketing Project Management 4. Implementation Arrangements The overall responsibility for project implementation and coordination would rest with the Odisha Community Tank Development and Management Society (OCTDMS) which has been established to serve as a coordinating agency for tank rehabilitation in the state. The Governing body of the OCTDMS is chaired by the Agriculture Production Commissioner and includes representatives of various line departments and civil society. The OCTDMS would consist of a State Project Unit (SPU) and about 12 District Project Units (DPUs). All the activities of OCTMP are to be implemented at three levels: State Level, District Level and Tank Level. Both the SPU and DPUs would have six cells each a) Institution Strengthening Cell, b) Technical Cell, c) Livelihoods Cell, d) Monitoring, Evaluation and Learning Cell, e) Finance and Procurement Cell, f) Communication, Information Dissemination and Disclosure Cell. At the State level there would also be a State Level Steering Committee to guide and review the activities of the OCTDMS, work on policy issues and coordination. At the district level there would be a District Level Steering Committee (DLSC) headed by the Chairman (District Collector) for reviewing the work and guiding the DPU as well as coordinating with line departments. The District Project Director of the District Project Unit would be the Member Secretary of the (DLSC). At both the district and state level, OCTMP would be supported by the Line Departments. At the Tank Level, the Pani Panchayat is the nodal implementation partner and the Support Organisations would facilitate implementation processes. 5. Objectives of the Audit: I. The essence of the World Bank 1 audit policy is to ensure that the Bank receives adequate independent, professional audit assurance that the proceeds of World Bank loans were used for the purposes intended, 2 that the annual project financial statements are free from material misstatement, and that the terms of the loan agreement were complied with in all material respects. II. The objective of the audit of the Project Financial Statement (PFS) is to enable the auditor to express a professional opinion as to whether (1) the PFS give a true and fair view of the sources and applications of project funds for the period under audit examination; (2) the funds were utilized for the purposes for which they were provided, and (3) expenditures shown in the PFS are eligible for financing under the relevant loan or credit agreement. In addition, where applicable, the auditor will express a professional opinion as to whether the Financial Management Reports submitted by project management may be relied upon to support any applications for withdrawal from the IDA Credit/Loan. III. The books of account that provide the basis for preparation of the PFS are established to reflect the financial transactions of the project and are maintained by OCTDMS and its constituent state and district level units including CADA works taken up by OCTMP. 5.1 Audit Standards The audit will be carried out in accordance with the Auditing Standards promulgated by the Institute of Chartered Accountants of India. The auditor should accordingly consider materiality when planning and performing the audit to reduce audit risk to an acceptable level that is consistent with the objective of the audit. Although the responsibility for preventing irregularity, fraud, or the use of loan proceeds for purposes other than as defined in the legal agreement remains with the borrower, the audit should be planned so as to have a reasonable expectation of detecting material misstatements in the project financial statements. 1 World Bank includes the International Development Agency and the International Bank for Reconstruction and Development. Loans includes credits and grants to which the TORs would apply; and borrower includes recipients of such loans; 2 The Bank s charter [Article III Section V(b) of IBRD s Articles of Agreement and Article V Section 1(g) of IDA s Articles of Agreement] specifies that: The Bank shall make arrangements to ensure that the proceeds of any loan are used only for the purposes for which the loan was granted, with due attention to considerations of economy and efficiency and without regard to political or other non-economic influences or considerations.
5.2 Audit Scope In conducting the audit, special attention should be paid to the following: (a) All external 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 agreements include the Financing Agreement, the Project Agreement, and the Minutes of Negotiations; (b) Effective project financial management systems 3, including internal controls, were in operation throughout the period under audit examination. This would include aspects such as adequacy and effectiveness of accounting, financial and operational controls, and any needs for revision; level of compliance with established policies, plans and procedures 4 ; reliability of accounting systems, data and financial reports; methods of remedying weak controls or creating them where there are none; verification of assets and liabilities; and integrity, controls, security and effectiveness of the operation of the computerized system; (c) (d) (e) (f) (g) (h) (i) Counterpart funds have been provided and used in accordance with the relevant legal agreements and only for the purposes for which they were provided; All necessary supporting documents, records, and accounts have been kept in respect of all project transactions including expenditures reported via Interim unaudited Financial Reports (IUFRs) where applicable. Clear linkages should exist between the books of account and reports presented to the Bank; The project accounts have been prepared in accordance with the accounting principles defined in the Project Financial Manual and give a true and fair view of the financial position of the project at the year end and of resources and expenditures for the year ended on that date; and Goods and services financed have been procured in accordance with the World Bank procurement guidelines and financing agreements. The agreement will be made for conducting External Audit on annual basis for a period of one year. However the continuance of assignment for the 2 nd year with only trigger if the performance is satisfactory for the preceding year. This is under sole discretionary power of client. The External Audit will cover invariably in atleast 10% of PP accounts in each District Project Unit which will be carried out at DPU. Auditing of Command Area Development Agency (CADA) works which is taken up by OCTMP. The CADA districts are Baragarh, Boudh, Cuttack, Jajpur, Khordha and Mayurbhanj. Cashbook/bankbook, utilization certificate etc. to be verified for above CADA Districts whose divisions are located at Bhadrak, Bhubaneswar and Sambalpur. The consultants needs to visit the CADA divisions for auditing and will give specific comment in management letter. 5.3 Project Financial Statements The Project Financial Statements should include- A. Receipts & Payments Account, Income & Expenditure Accounts and Balance Sheet B. Reconciliation of Claims to Total Applications of Funds 5 C. Other Statements or Schedules which may include:: 3 The financial management system would include methods and records established to identify, assemble, analyze, classify, record and report on transactions and to maintain accountability for the related assets and liabilities. 4 These include the Financial Management Manual, and Memorandum of Understandings between SPU-DPU, and between DPU and other implementing agencies. 5 The statement will provide a reconciliation between expenditure reported as per the Statement of Sources and Applications of Funds and expenditure claimed from the World Bank through report based methods of reimbursement;
An annexure separately listing cumulative project expenditures by Project Component/Subcomponents; A detailed list of assets created or purchased from project funds. D. Management Assertion: Management should sign the project financial statements and provide a written acknowledgement of its responsibility for the preparation and fair presentation of the financial statements and an assertion that project funds have been expended in accordance with the intended purposes as reflected in the financial statements. 5.4 Statements of Expenditures and Financial Management Reports In addition to the audit of the PFS, the auditor is required to audit all Interim Financial Reports (IFRs) for withdrawal applications made during the period under audit examination. The auditor should apply such tests as the auditor considers necessary under the circumstances to satisfy the audit objective. In particular, these expenditures should be carefully examined for project eligibility by reference to the relevant financing agreements. Where ineligible expenditures are identified as having been included in withdrawal applications and reimbursed against, these should be separately noted by the auditor. 5.5 Audit Report An audit report on the project financial statements should be prepared in accordance with the Auditing Standards promulgated by the Institute of Chartered Accountants of India. Those standards require an audit opinion to be rendered related to the financial statements taken as a whole, indicating unambiguously whether it is unqualified or qualified and, if the latter, whether it is qualified in certain respects or is adverse or a disclaimer of opinion. In addition, the audit opinion paragraph will specify whether, in the auditor s opinion, (1) the funds were utilized for the purposes for which they were provided, (2) expenditures shown in the PFS are eligible for financing under the relevant loan or credit agreement and, where applicable, (3) the IFRs submitted during the period are supported by adequate detailed documentation maintained in the project accounting offices. The project financial statements and the audit report should be received by the Bank not later than 6 months after the end of the fiscal year. The auditor should also submit the two copies of the audited accounts and audit report to the Implementing Agency also one softcopy. 5.6 Management Letter In addition to the audit report on the project financial statements, the auditor may prepare a management letter containing recommendations for improvements in internal control and other matters coming to the attention of the auditor during the audit examination, possibly including matters such as the following: observations on the accounting records, systems, and controls that were examined during the course of the audit deficiencies or weakness in systems and controls, together with specific recommendations for improvement compliance with financial covenants in the financing agreements matters that might have a significant impact on the implementation of the project the status of recommendations from previous management letters, including any issues which remain to be addressed and any issues which recurred any other matters that the auditor considers pertinent. The auditor should supply the Bank with a copy of the management letter together with the audit report on the project financial statements. In the event that no management letter is issued, the auditor should supply a written advice to that effect together with the audit report on the project financial statements. 5.7 General The auditor should be given access to any information relevant for the purposes of conducting the audit. This would normally include all legal documents, correspondence, and any other information associated
with the project and deemed necessary by the auditor. The information made available to the auditor should include, but not be limited to, copies of the Bank s Project Appraisal Document, the relevant Legal Agreements, a copy of these Guidelines, and a copy of the Bank s Financial Management Assessment of the project entity. It is highly desirable that the auditor become familiar with other Bank policy documents, such as OP/BP 10.02, the Bank's internal guidelines on Financial Management that include financial reporting and auditing requirements for projects financed by the World Bank. The auditor should also be familiar with the Bank's Disbursement Manual. Both documents will be provided by the Project staff to the auditor. 6. LIST OF KEY PROFESSIONAL POSITIONS WHOSE CV AND EXPERIENCE WOULD BE EVALUATED. Sl. No. Key Position Area of Specific Expertise required Minimum Qualification and Professional Experience Required Likely Staff inputs required in person days in one year 1 Team Leader (Principal/ Audit Partner) External Audit 1. Fellow in Chartered Accountancy 2. Member of institute of External Audit 04 Days External Audit Chartered Accountant 20 Days 2 Audit Manager/ Partner 3 Auditors External Audit Inter in Chartered Accountancy/ICWAI 126 Days