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National Health Mission, Bangalore, Karnataka
October, 05th 2018
  Request for Proposal
        (RFP)
For appointment of Concurrent Auditor for
Karnataka State Health & Family Welfare
        Society (KSHFWS) for the
         Financial Year 2018-19




                            [2018-19]
Request for proposal (RFP)
Karnataka State Health & Family Welfare Society (KSHFWS), a Society registered under the provisions
of Karnataka Societies Registration Act, 1960 and state nodal agency for implementing Govt. of India
sponsored flagship programme of National Health Mission (NHM) erstwhile NRHM seeks proposals
from Chartered Accountant firms for providing concurrent audit services for the state health society for
the financial year 2018-19. Details about the background of the auditee, units to be covered under audit,
scope of work, terms of reference and process for selection of the Concurrent Auditor are given in the
following paragraphs.

Terms of Reference(ToR)

Section I ­ Background

National Rural Health Mission (NRHM) of the Ministry of Health & Family Welfare was
launched on 12th April, 2005 by the Government of India to improve medical facilities in all the
area in the country. The NHM seeks to provide accessible, affordable and quality health care to
the population, especially the vulnerable sections. It also seeks to reduce the Maternal Mortality
Ratio (MMR) in the country from 407 to 100 per 1,00,000 live births, Infant Mortality rate
(IMR) from 60 to 30 per 1000 live births and the Total Fertility Rate (TFR) from 3.0 to 2.1
within the 7 year period of the Mission. It has now been termed as National Health Mission
(NHM). NHM is overarching NUHM also and includes Non-Communicable Diseases (NCD) as
well.

2. One of the visions of the Mission is to increase public spending on health from 0.9% to 2-3%
   of GDP, with the improved arrangement for community financing and risk pooling. The
   NHM has provided an umbrella under which the existing Reproductive and Child Health
   Programme (RCH) and various National Disease Control Programmes (NDCPs) have been
   repositioned. National Urban Health Mission (NUHM) has also been added as submission of
   National Health Mission.

3. At present the following Programmes/Schemes falls under the National Health Mission:

           A. NHM-RCH Flexible Pool:
                   ·   RCH Flexible Pool.
                   ·   Mission Flexible Pool.
                   ·   Routine Immunisation.
                   ·   Pulse Polio Immunisation
                   ·   National IDD Control Programme.




                                                                                                       2
      B. National Urban health Mission (NUHM).
      C. Flexible Pool for Communicable Disease:
                  National Vector Borne Disease Control Programme (NVBDCP)
                  Revised National Tuberculosis Control Programme (RNTCP)
                  National Leprosy Eradication Programme (NLEP)
                  Integrated Disease Surveillance Project (IDSP)
      D. Flexible Pool for Non-Communicable Disease, Injury & Trauma:
                  National Programme for Control of Blindness (NPCB)
                  National Mental Health Programme (NMHP)
                  National Programme for Health Care of the Elderly (NPHCE)
                  National Tobacco Control Programme (NTCP)
                  National Programme for Prevention and Control of Cancer, Diabetes,
                  Cardiovascular Diseases and Stroke (NPCDCS)
                  Other New Initiative under Non-Communicable Disease Injuries and
                  Trauma


4. Institutional and Funding Arrangements: For the implementation of the above
programmes, MOHFW has required the creation of an Integrated Health Society at State and
District levels (registered as a legal entity at the State and District under Societies
Registration Act, 1860). Such integrated State Health Society (SHS) works in close
coordination with the Directorate of Health & Family Welfare and District Health Societies
(DHS) work in coordination with the Deputy Commissioner of District and District Chief
Medical Officer (CMO). Program implementation is done through its District Chief Medical
Officer's office, Blocks, Community Health Centres (CHCs), Primary Health Centres
(PHCs), Sub- Centres (SCs), Arogya Raksha Samities and Village Health & Nutrition
Sanitation Committees. Certain activities may be managed at the State level such as drug
procurement, IEC, civil works, training using specialized entities such as SIHFW, IEC
Bureau, PWD, the Directorate of Health and Municipal Corporations for the urban health
components. In addition funds are also released from SHS/ DHS to NGOs and private entities
under public private participation (PPP) arrangements.

5. Funding & Accounting Arrangements: Funds for the various programs are transferred
from Pay & Accounts Office of MoHFW to the State Treasuries and then from Treasuries to
the SHS functioning in the State. Government of India transfer funds in the form of Grants-
in-Aid to SHS on the basis of respective State Programme Implementation Plan (SPIPs) and
approved Annual Work Plans which are prepared on the basis of District Health Action Plans

                                                                                         3
(DHAP) of each of the districts in the State. Under the umbrella of the integrated SHS/DHS
each program has separate bank accounts, maintains separate books of accounts and other
financial records as per the requirements of each program and also submit separate financial
activity reports at varying frequencies to the respective monitoring unit in MOHFW (GOI).
Bulk of the programme related expenditure happens through the DHS and field
establishments/units like PHC, CHC, VHSC, ARS (Arogya Raksha Samithies). SHS transfers
funds to DHS for programme implementation and in turn, DHS release funds to field
establishments/units like PHC, CHC, VHSC, ARS etc., Monthly SoEs from the various
implementation units are consolidated at the taluk level for onward submission to DHS. At
DHS, SoEs received from the taluks are consolidated along with expenditure incurred by the
DHS for onward transmission to SHS. At SHS, SoEs received from the DHSs are
consolidated along with expenditure incurred by the SHS for onward transmission to GoI.

6. Financing by Development Partners/Donors: Some of the programs of NHM are also
supported by development partners such as the World Bank, DFID, UNFPA, European
Union, and GFATM etc. for which credit agreements have been entered into by GoI with the
respective development partners.

7. Criteria for selection of auditors:

   i   C&AG empanelled major audit firms: Chartered Accountant firms those are
       empanelled with C&AG for the year 2018-19 and eligible for doing major PSU audits
       only will be eligible for the audit of the NHM programme. The letter issued by the
       C&AG regarding the empanelment and status of firm is eligible for major PSU audit
       generated from C&AG portal certified by the Authorised partner is required to
       submitted. In this regards firm have to submit the details about the firm as per Form
       T-2.
   ii Registered H.O./Local Branch office should be in the State Capital: The firms
       should have H.O./Local Branch Office in the Bangalore. Such office must exist
       within the State for not less than three years as per the ICAI Certificate. (Letter of
       undertaking should be issued by the authorised partner of the firm in the Form T-7).
   iii Firms have to be given an undertaking that the audit team members are proficient in
       State's official language (both oral and written) and will be headed by a Chartered
       Accountant on regular basis.
   iv Firm Constitution Certificate as at 01.01.2018 issued by the Institute of Chartered
       Accountants of India to be submitted.


                                                                                              4
   v   Audited financial statement for the last three years (FY 2015-16, FY 2016-17 and FY
       2017-18) in support of the firm fees earnings or turnover certificate issued by the
       other chartered accountant mandatorily to be submitted.
   vi The CA firm engaged for the concurrent audit and Statutory Audit of State Health
       Society for the FY 2017-18 not eligible to participate in the tender.
   vii The firm should have carried out at least Two Statutory Audit of public sector
       undertaking (other than Branch of Banks) and two audit assignments in the
       state/central social sector (excluding Audit of Charitable Institutions & NGOs) or
       externally aided projects. Copies of appointment letters as a proof of experience
       mandatorily to be submitted.
   viii The firm or any partners of the firm should not be black listed by any PSUs or Govt.
       Co. or any other organisation in respect of any assignment or behaviour. [Self-attested
       affidavit on Rs.100/- stamp paper is to be given in this regard by the authorised
       person of the firm].
   ix Any firm not qualifying on these minimum criteria need not apply as its proposal
       shall be summarily rejected.


8. Penalty for non-performance/non satisfactory:

   If the services were not performed as per the ToR prescribed in the RFP, the fees to such
   portion of non-carrying/non-performance of work may be deducted from the contract
   value. If there is any professional negligence is observed by the state health society in
   carrying out the work by the chartered accountant firms, the name of such firms will be
   referred to Central Government, State Government and Institute of Chartered
   Accountants of India for taking suitable Displinary actions against those firms.




                                                                                            5
Section II
CONCURRENT AUDIT

Concurrent audit is a systematic examination of financial transactions on a regular basis to
ensure accuracy, authenticity, compliance with procedures and guidelines. The emphasis under
concurrent audit is not on test checking but on substantial checking of transactions. It is an on-
going appraisal of the financial health of an entity to determine whether the financial
management arrangements (including internal control mechanisms) are effectively working and
identify areas of improvement to enhance efficiency.

Independent Chartered Accountant firm is needed to be appointed at State Level to undertake
periodical audits and report on vital parameters which would depict the true picture of financial
and accounting health of the program.

Objective: The key objectives of the concurrent Audit include:
         To ensure voucher/ evidence based payments to improve transparency
         To ensure accuracy and timeliness in maintenance of books of accounts
         To ensure timeliness and accuracy of periodical financial statements
         To improve accuracy and timeliness of financial reporting especially at sub-district levels
         To ensure compliance with laid down systems, procedures and policies
         To regularly track, follow up and settle advances on a priority basis
         To assess & improve overall internal control systems


Scope of Audit
The responsibilities of the concurrent auditors should include reporting on the adequacy of internal
controls, the accuracy and propriety of transactions, the extent to which assets are accounted for and
safeguarded, and the level of compliance with financial norms and procedures of the operational
guidelines.

The scope of work of "State Concurrent Auditor" is as follows:
       Audit of the State Health Society(SHS) accounts and expenditure incurred by SHS
       Verification of Quarterly Financial Management Reports with Books of Accounts
       Audit of Advances at the SHS level
       Audit of the Provisional Utilization Certificates sent to GoI
       Monitoring timely submission of the District concurrent audit reports
       Detailed analysis and compilation of the District concurrent audit reports
       Vetting of the State Action Taken Reports and providing observations thereon
       Follow-up & monitoring over the Action Taken Reports(ATRs) prepared by districts on the
       observations made in the audit
       Preparation of Quarterly Executive summary to be sent to GoI in the prescribed format
       Any other evaluation work, as desired by the Mission Director or Chief Finance Officer


Frequency
       Concurrent Audit will be carried out on a "monthly basis".


                                                                                                       6
Coverage
      The State Concurrent Auditor should ensure coverage of all State Health Society units including
      Non NHM Schemes situated at state level if any implemented by the State Health Society.
      The major institutions to which State Health Society is funding at the State Level i.e State
      Institute of Health and Family Welfare (Training Institutions), Chief Engineer (HFW) (Civil
      Works including four divisions located at Bengaluru, Mysuru, Dharwad and Gulbarga),
      Karnataka State Drugs, logistics and warehousing society (Procurement of drugs and
      equipments) and any other state level agencies.

Appointment & Selection of Auditors
      Appointment and selection of the state level concurrent auditors will be done by the respective
      State Audit Committee through Open Tender System. The tender document should be
      advertised through a central advertisement at the state level. Terms of Reference should be
      provided to all firms in order to receive their Technical Bids.
      Interested firms should submit their bids in two parts- Technical and Financial bids. Both the
      bids should be submitted in two separate sealed envelopes, which should be opened in meeting
      of the audit committee.
      The audit committee would first open the technical bids and evaluate them on the basis of the
      criteria as prescribed in the advertisement.
      Financial bids of only technically qualified firms should be opened by the committee and audit
      should be awarded to the lowest bidder.
      If the lowest financial bidder does not agree to undertake the audit work within the prescribed
      audit fee or the audit committee deems it unfit for any reason (reasons to be recorded in
      writing), the job may be awarded to the next lowest financial bidder if the firm agrees to
      undertake the job. However, the work may only be awarded to a technically qualified bidder.
      Once selection is finalised by SAC, the same may be intimated to Principal Secretary Health for
      his concurrence.

        Remuneration
      The fee structure for the concurrent auditor should be decided keeping in mind overall
      scope and coverage of audit. However actual fees for state level audits should be
      decided through competitive bidding process.
      The state audit committee can take a view on the rationalization of fees before
      approving the same and can also make suitable modifications to limits for the audit fee
      taking into account factors such as, inflation.
      The decision on remuneration should be judicious and balanced.
      If the services were not performed as per the ToR prescribed, the fees to such portion of
      non-carrying/non-performance of work may be deducted from the contract value.
        Term of appointment of the Auditor
      At the state level, the concurrent auditor appointed once can be retained/ reappointed for a
      maximum of three years i.e. current year and two years (1+2).
      However, the contract awarded should be for one year at a time and should be renewed next
      year on the basis of review of auditor's performance.

Contents of Audit Report
        Concurrent Audit Report of a "State Health Society" should contain the following financial
        statements and documents:
                                                                                                   7
       Duly filled in Checklist provided in the guidelines
       Financial statements as prescribed
         o   Audited Trial Balance
         o   Audited Receipts & Payments A/c
         o   Income & Expenditure A/c
         o   Balance Sheet
         o   Audited Statement of Expenditure
         o   Bank Reconciliation Statement
         o   List of outstanding advances
       Observations and Recommendations of Auditor ­ particularly covering the following aspects:
         o Deficiencies noticed in internal control
         o Suggestions to improve the internal control
         o Extent of non-compliance with Guidelines issued by GOI
       Action Taken by State Health Society on the previous audit observations, along with his
       observations on the same






         Notes:
         The reports at the state level will include consolidated report of NHM-RCH Flexible Pool,
         National Urban health Mission, Flexible Pool for Communicable Disease and Flexible
         Pool for Non-Communicable Disease, Injury & Trauma. In addition, it should also include
         instances of misappropriation/ unauthorised diversion of funds as noticed during the audit.

         Quarterly Executive Summary
      The state is required to send a Quarterly Executive Summary to the Centre by compiling the
      observations from the State as well as District Concurrent Audits (Format attached as
      Annexure).
      The executive summary should provide information on aspects like quality of FMRs,
      maintenance of books of accounts, advances, compliance with audit observations etc.
      It shall be signed by both the concurrent auditor and the Mission Director at state level and sent
      to the Mission Director, MOHFW.

Key Timelines

         The key timelines which need to be adhered to are summarized below:

                        Activity                                              Timeline
Carrying out concurrent audit                                Monthly
Submission of Audit Report by Auditor to SHS                 10th of the next month
Submission of soft copy of the consolidated executive Quarterly- by 20th of the first month of the
summary & Action Taken Report to the Mission next quarter
Director, MOHFW
Submission of the executive summary report by the Quarterly ­ by 25th of the first month of the
SHS to Centre                                     next quarter



                                                                                                      8
Monitoring and evaluation
     FMG should compile the ATRs of the state and submit it to the Chief Finance Officer and
     Mission Director of the State at the end of every quarter.
     These reports will indicate the actions to be taken emerging from the latest audit reports
     including responsibility of implementation and timelines as well as provide the current status on
     action taken on the past observations.
     Soft copy of the consolidated ATR shall be mailed to the Mission Director, MOHFW or
     Director finance (NHM), MOHFW along with the soft copy of the quarterly executive
     summary.
     The auditor's fees shall be released after acceptance of the report by the Chief Finance Officer
     of the state.

       Indicative format of ATR is as follows:


    S. No     Observation          Action to be      Responsibility to    Timeline        Current
                                      taken            Implement           agreed          Status




     In order to effectively handle the audit observations, they should be classified as 'material' and
     'non-material' based on their impact. Observations related to system deficiency should also be
     separately noted for system improvements.

       Responsibilities of SHS
     Submission & Compilation of Monthly Audit Reports
       Overall responsibility of monitoring the progress, timely submission and compilation of
       monthly audits should be of the Chief Finance Officer of state who may be supported by the
       FMG staff.
     Compliance of Audit Observations
       Chief Finance officer is responsible for compliance of audit observations made in the audit
       report within the time limit prescribed.
     Timely Closure of Books of Accounts
       SHS finance personnel need to ensure timely closure of books of accounts. Draft trial balance,
       income and expenditure a/c and balance sheet should be prepared and kept ready. This will
       facilitate in commencing audit quickly.

     Production of relevant documents for Audit
       The State Health Society and its district programme units, along with CHCs/ PHCs and other
       Programme implementing agencies shall be under obligation to provide the following:
       o Books of Accounts
       o Prescribed Registers
                                                                                                     9
        o Files regarding purchases of all types of goods/ items
        o Files of Construction works
        o Any other document requested by auditor in support/ reference of the above

        The responsibility for the same shall lie with the Chief Finance Officer & Mission Director at
        the State Level.
        The documents shall be handed over to the auditors and receipt should be obtained of any such
        record which shall be returned to the in- charge of the audit party once the records are given
        back.


      Facilitation of the Audit
        The following arrangements need to be made for the auditors:
        o To provide proper space for sitting during conduct of Audit
        o To provide requisite explanations & documents on the queries raised by the auditor during
          audit
        o To provide auditors with ATRs on previous audit observations without any delay
        o To arrange payments to the Auditor at the agreed times

      Provide Relevant Guidelines issued by GoI to Auditors
        All relevant guidelines issued by GoI should be provided to the auditors before the audit work
        starts.

        Few Important points ­ things to remember
      Audit Reports should be submitted on a monthly basis or quarterly as per GoI guidelines.
      In case of programme implementing units visited during the audit, the audit report should
      contain a separate checklist for each unit covered and respective observations should also be
      included.
      The audit report should also cover qualitative issues emerging from the audit other than the
      financial statements.
      Checklists should be thoroughly filled and each aspect should be adequately elaborated.
      Observations reported on accounting and internal control issues should be properly detailed and
      substantiated
      Financial statement of NDCPs should be included in the consolidated audit report and audited
      Soft copy of the consolidated executive summary & ATR (district and state) should be mailed
      by the Chief Finance Officer at the state level to Mission Director in the Ministry of Health &
      Family Welfare on quarterly basis.


Section III - Guidelines for submission of proposals

   A. General Guidelines

   Agencies are required to submit the proposal as per the guidelines and formats detailed out in
   the following paras:

   Technical proposal should be submitted in original and a copy. The original and the copy of
   the Technical Proposal shall be placed in a sealed envelope clearly marked " TECHNICAL
                                                                                                   10
   PROPOSAL" Similarly, the original Financial Proposal shall be placed in a separate sealed
   envelope clearly marked "FINANCIAL PROPOSAL" followed by the name of the assignment,
   and with a warning "DO NOT OPEN WITH THE TECHNICAL PROPOSAL." Envelopes
   containing Technical and Financial Proposals shall be placed into an outer envelope and
   sealed. This outer envelope shall bear the submission address, reference number and title of
   the Assignment, and be clearly marked "DO NOT OPEN, EXCEPT IN PRESENCE OF THE
   OFFICIAL APPOINTED. The Society shall not be responsible for misplacement, loss or
   premature opening, if the outer envelope is not sealed and/or marked as stipulated. These
   circumstances may be a case for Proposal rejection. If the Financial Proposal is not submitted
   in a separate sealed envelope duly marked as indicated above, this will constitute ground for
   declaring the Proposal as non-responsive.

Team Composition for the assignment
The key personnel in the audit team, their minimum qualifications, and         their        anticipated
inputs are indicated below:

   The audit team should be led by a Partner who is a CA with a minimum of 15 years of post-
   qualification experience and adequate experience (not less than 8 years) in the audit of Social
   Sector/Govt. Sponsored schemes and with good exposure to Govt. system of budgeting, accounting
   etc.,
   Day to day management of the review should be the responsibility of one Manager/Partner having
   more than 10 years of post-qualification experience as a practicing Chartered Accountant and
   adequate experience in the audit of Social Sector/Govt. Sponsored schemes and with exposure to
   Govt. system of budgeting, accounting etc.,
   In addition, the audit team should include sufficient number of trained staff (review, senior, junior
   staff etc.), commensurate with the size and scope of the assignment.

   Association with Other firms: Firms submitting proposals cannot associate with other firms.

   Single Proposal: A firm should submit only one proposal. If a firm submits or participates in
   more than one proposal, all such proposals shall be disqualified.

   All agencies must comply with the Technical Specification, General Conditions and
   Format/Requirements for Technical and Financial proposal.

   The Technical Proposal shall be marked "ORIGINAL" or "COPY" as appropriate. All required
   copies of the Technical Proposal are to be made from the original. If there are discrepancies
   between the original and the copies of the Technical Proposal, the original governs.

   Financial proposals submitted by the firm should be valid for 6 months from the date of
   submission of the proposal by the firm.

   Each page, Form, Annexure and Appendices of the Technical and Financial Proposal must be
   signed by the Authorised signatory of the firm.

   All blank spaces in the financial proposal must be filled in completely where indicated, either
   typed or written in ink.

                                                                                                     11
   State Health Society (SHS) reserves the right to accept or reject any application without
   giving any explanation and change the evaluation criteria as per its requirements in the
   interest of the organisation.



B. Technical Proposal

   Letter of Transmittal (Form T-1)

   Details of the Firm along with Details of Partners ( Form T-2),

   Details of Qualified Staff & Semi-qualified Staff ( Form T-3),

   Details of the Team Composition (Form T-4): Firm must provide the structure and
   composition of the team which shall be deputed for conducting the audit in the SHS and
   other spending centres. Firm should provide the Curriculum Vitae of the key personnel
   (Review Partner and Manager/Partner in charge of day to day management of the audit
   responsibility) who would be leading the audit teams and the overall audit assignment.

   Description of Approach, Methodology & Work Plan for performing the Audit of SHS
   (Form T-5)

   Brief details of the relevant experience (Form T-6)

   Letter of undertaking for having the local office in the state (Form T-7)


C. Financial Proposal

   The financial bid shall be submitted for the professional (audit) fee to be charged by the firm.
   This audit fee shall be inclusive of the TA/DA and taxes (Goods and Service tax) as
   applicable. The financial bid shall be submitted as per Form F-1.

   Percentage (or proportion) of funds involved/turnover shall not be basis for quoting the audit
   fee.




                                                                                                12
                                                                                     Form T-1

                                    Letter of Transmittal

To,
Mission Director,
Karnataka State Health & Family Welfare Society,
National Health Mission
#101, IPP Building, Ist Floor, NHM Mission Directorate,
Anand Rao Circle, Bangalore ­ 560 009


Dear Sir,

       We, the undersigned, offer to provide the audit services for Karnataka State Health &
Family Welfare Society in accordance with your Request for Proposal dated [ Insert Date]. We
are hereby submitting our Proposal, which includes this Technical Proposal, and a Financial
Proposal sealed under a separate envelope.

       We hereby declare that all the information and statements made in this Proposal are true
and accept that any misinterpretation contained in it may lead to our disqualification.

       The prices quoted by us in the Financial Proposal (Form F-1) are valid till six months
from the date of submission of the quotation. We confirm that this proposal will remain binding
upon us and may be accepted by you at any time before the expiry date.

       Prices have been arrived independently without consultation, communication, agreement
or understanding (for the purpose of restricting competition) with any competitor.

      We agree to bear all costs incurred by us in connection with the preparation and
submission of the proposal and to bear any further pre-contract costs.

       We understand that State Health Society, Karnataka is not bound to accept the lowest or
any proposal or to give any reason for award, or for the rejection of any proposal.


       I confirm that I have authority of [Insert Name of the C.A. Firm] to submit the proposal
and to negotiate on its behalf.

                                                                              Yours faithfully,



                                                                        (                     )



                                                                                            13
                                                                                       Form T-2

                                Particulars/Details of the Firm

Sl.                  PARTICULARS                                 Supporting Documents required to be
No.                                                                submitted along with this Form
1   Name of the Firm
2   Addresses of the Firm:
          Head Office                                        Phone No:
                                                             Fax No:
                                                             Mobile of Head Office In-charge:
            Branch Office/s                                  Phone No:
     (Particulars of each branch to be given)                Fax No:
                                                             Mobile of Branch Office In-charge:
3    Firm PAN No.                                            Attach copy of PAN card
4    Firm GST Registration No.                               Attach copy of Registration
5    Firm Registration No. with ICAI                         Attach copy of certificate issued by ICAI
                                                             regarding firm status as at 01.01.2018
6    Empanelment No. with C & A G and eligible for           Document supporting empanelment with C &
     major PSU Audit for FY 2018-19                          AG and status of eligibility for major PSU
                                                             audit.
7    No. of Years of Firm Existence & Date of                Attach copy of certificate issued by ICAI
     establishment of Firm                                   regarding firm status as at 01.01.2018

8    Turnover of the firm in last three years                Audited financial statement for the last three
                                                             years (FY 2015-16, FY 2016-17 and FY 2017-
                                                             18) in support of the firm fees earnings or
                                                             Turnover certificate issued by the other
                                                             chartered accountant.

9    Annual Turnover for last 3 years with breakup of        Provide a Chart
     fee towards Audit, Income Tax matters and others
10   Audit Experience of the Firm in the last three years:
         1. Number of Assignments in Statutory Audit         Copy of the Offer Letter & the Fee Charged.
             ­ Public Sector Units
         2. Number of Assignments in Social Sector
             Audit (Other than audit of Charitable           Copy of the Offer Letter & the Fee Charged.
             Institutions)
11   Details of Partners: Provide following details:
      Number of Full Time Fellow Partners associated
        with the firm.
      Name of each partner,                                  Attested copy of Certificate of ICAI as on
      Date of becoming ACA and FCA                           01.01.2018.
      Date of joining the firm,
      Membership No.,

                                                                                               14
       Qualification
       Experience
       Whether the partners is engaged full time or part
       time with the firm.




                                                                                      Form T-3

    A. Details of Partners/Paid Qualified Staff(Chartered Accountants)

S. No.      Name of      Length of      Educational    Area of      Membership Relevant
            Staff        Association    Qualifications Key          No.        Experience
                         with the                      Expertise
                         Firm
                         (in years)
1
2


    B. Details of Semi-qualified Staff (including Article Clerks etc)

S. No.       Name of      Length of     Educational    Area of          Relevant     Remarks
             Staff        Association   Qualifications Key              Experience
                          with the                     Expertise
                          Firm
                          (in years)
Semi Qualified Staffs
1
2
..
Article Clerks
1
2
..
Others
1
2
..




                                                                                               15
                                                                                          Form T-4

 Details of Structure & Composition of Team and Task Assignments ­ DEPLOYED FOR
                                 Proposed Assignment

Name          Position in   Educational          Key            Relevant     Number of     Proficiency
               the Team     Qualification   Responsibilities   Experience     Man days       in local
                                               or Task                        estimated     language
                                               Assigned                        for task     (Read &
                                                                             completion       Write)




                                                                                          Form T-5


       Description of Approach & Work Plan for performing Concurrent Audit of SHS

      A. Technical Approach : the firm should explain the understanding, the objectives of the
         assignments, approach to the services, methodology for the carrying out the activities and
         obtaining the expected output, and the degree of the detail of such output.

      B. Work Plan: The firm should propose the main activities of the assignment, their content
         and duration, phasing and inter relations and deliverables under the assignment. Proposed
         work plan should be consistent with the technical approach showing understanding of the
         ToR and ability to translate them in to a feasible working plan.







                                                                                          Form T-6

                                  Brief of Relevant Experience:

      A. Experience of audit in relation to Externally Aided Projects/ Social Sector Projects
         (Excluding the audit of Charitable Institutions and NGOs) for the last three years

S.       Name of the Grant-in-          Type/Nature Scope &         Duration of   Attach Work or
No.      Auditee      aids handled      of          Coverage        Completion    Assignment award
         Organization of the            Assignment of the           of            contract/letter by
                      auditee                       assignment      Assignment    the Auditee
                      organization                                                Organization




                                                                                                16
                                                                                                            T-7
                     (Letter of undertaking for having the local office in the state)

To,
Mission Director,
Karnataka State Health & Family Welfare Society,
National Health Mission
#101, IPP Building, Ist Floor, NHM Mission Directorate,
Anand Rao Circle, Bangalore ­ 560 009

Sir,

       We, the undersigned offer to provide the audit services for Karnataka State Health &
Family Welfare Society in accordance with your Request for Proposal dated [ insert date] . We
hereby submit our Proposal, having details about the firm and proposed audit fees.


         We hereby declare that our firm is having Head/ Branch offices in the State of Karnataka
from.....................(date,        month       and      year)    and      is    currently         situated at
...................................................................
......................................................................................................... address
proof (photocopy of letter for incorporation of firm, lease agreement, phone connection, Electric
Connection etc..) in regard of this office in the state is enclosed herewith for needful.

        We hereby also give an undertaking that the firm's staffs deputed for the audit are
proficient in State official language of kannada, both in oral and written form.

        We, hereby understand that any information given here if found to be false or misleading
will be treated as fraud and appropriate action can be taken in this regard.


                                                                                               Yours faithfully


                                                                                           (                    )

Encl:
1................
2.................




                                                                                                              17
                                                                                        Form F-1

                                   FORMAT FOR FINANCIAL BID

    Item or Activity                               Total Amount (in Rupees)
                                                   Both in Numeric and in Words.

    Audit fee inclusive of TA/DA and Goods            A. Audit fees and TA/DA per annuam
    and Service tax.                                     Rs.____________
                                                      B. Goods and Service tax
                                                         Rs.____________
    Note: Percentage of funds involved shall          C. Total fees per annum (A+B) Rs
    not be a basis of quoting the Audit Fee.             ____________
                                                   (Rupees ________________________).




Section IV ­ Selection Process of the Auditor

Selection Methodology

A two stage procedure shall be adopted in evaluating the proposals. .

First Stage

Only Technical Proposals shall be opened first for all the firms.

Thereafter, a technical evaluation shall be carried out.


Second Stage

Financial proposals shall be opened only for those firms who have qualified on Technical
Parameters. Financial Proposals of the firms which have not qualified on technical parameters
shall not be opened.

The Firm with the least quote shall be the L1 firm, for whom the contract shall be awarded.


Award of Contract

On completion of the selection process, the firm selected shall be awarded the contract of audit
of SHS by issuing the Letter of Award (LoA). The firm should execute a Contract as per Form
C-1 with the State Health Society (SHS) within one week of the award of the issuance of LoA.

                                                                                                   18
                                                                                       Form C-1

                        SAMPLE CONTRACT FOR AUDIT FIRMS

                                         CONTRACT

THIS CONTRACT ("Contract") is entered into this [insert starting date of assignment] , by and
between [name of STATE HEALTH SOCIETY,] ("the Client") having its principal office at
[insert SHS's address] , and [insert Firm's/Auditor's name] ("the Auditor") having its principal
office located at [insert Firm's/Auditor's address].
WHEREAS, the Client wishes to have the Auditor perform the services hereinafter referred to,
and
WHEREAS, the Auditor is willing to perform these services,
NOW THEREFORE THE PARTIES hereby agree as follows:
1. Services           (i)     The Auditor shall perform the services as per the RFP & TOR.
                      (ii)    The Auditor shall provide the personnel "Auditor's Personnel,"
                              to perform the Services as per the proposal.
                      (iii)   The Auditor shall submit to the Client the reports in the form and
                              within the time periods "Auditor's Reporting Obligations."
2. Term               The Consultant shall perform the Services during the period
                      commencing [insert starting date] and continuing through [insert
                      completion date] , or any other period as may be subsequently agreed by
                      the parties in writing.


3. Payment            A.      Ceiling
                              For Services rendered pursuant to RFP, the Client shall pay the
                              Auditor an amount not to exceed [insert amount] . This amount
                              has been established based on the understanding that it includes
                              all of the Auditor's costs and profits exclusive of Goods and
                              Service tax obligations that may be imposed on the Auditor. The
                              Goods and Service tax obligations shall be paid by the Client
                              separately as applicable.
                      B.      Schedule of Payments
                              The schedule of payments is specified below:
                              The Auditor's fee shall be paid upon the Client's receipt of the
                              final report, for each month, acceptable to the Client.

                                                                                               19
                    C.     Payment Conditions
                           Payment shall be made in Rupees, not later than 30 days
                           following submission by the Consultant of invoices in duplicate
                           to the Coordinator designated in paragraph 4.

4. Project          A.     Coordinator.
   Administration
                           The Client designates Chief Financial Officer as Client's
                           Coordinator; the Coordinator will be responsible for the
                           coordination of activities under this Contract, for acceptance and
                           approval of the reports and of other deliverables by the Client
                           and for receiving and approving invoices for the payment.
5. Performance      The Auditor undertakes to perform the Services with the highest
   Standards        standards of professional and ethical competence and integrity in line
                    with the Engagement & Quality Control Standards issued by ICAI.
                    Specific reference is invited to standard (SA 600 ­ AAS 10- relying on
                    work of another auditor) and SA 230 (AAS 3 - Documentation). The
                    Auditor shall promptly replace any employees assigned under this
                    Contract that the Client considers unsatisfactory and any substitution of
                    staff, if necessary, shall be with a staff of at least the same level of
                    qualifications.
6. Ownership of
Material            Any studies reports or other material, graphic, software or otherwise,
                    prepared by the Auditor for the Client under the Contract shall belong to
                    and remain the property of the Client. The Auditor may retain a copy of
                    such documents and software.
7. Assignment
                    The Auditor shall not assign this Contract or sub-contract any portion of
                    it without the Client's prior written consent.
8. Law Governing
Contract and        The Contract shall be governed by the laws of Government of India and
Language            the language of the Contract shall be English.

9.Dispute           Any dispute arising out of the Contract, which cannot be amicably
Resolution          settled between the parties, shall be referred to adjudication/arbitration
                    in accordance with the laws of the Government of India.



                    FOR THE CLIENT                        FOR THE AUDITOR


                    Signed by ___________________Signed by ____________________

                    Title: ______________________ Title: ________________________



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