EXPRESSION OF INTEREST FOR EMPANELMENT OF COST
ACCOUNTANT FIRMS FOR CONDUCTING INTERNAL AUDIT AT
HEADQUARTERS
AND DELHI OFFICE OF THE INSTITUTE FOR 2019-20
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THE INSTITUTE OF COST ACCOUNTANTS OF INDIA
(STATUTORY BODY UNDER AN ACT OF PARLIAMENT)
Minimum Eligibility Criteria
1. The firm should be a partnership firm with minimum three partners and must be
registered with the Institute of Cost Accountants of India (ICAI).
2. The firms should be in existence for at least three years and must possess previous
experience in conducting Internal Audit.
3. The average yearly turnover of the auditing firm during the last three financial
years as per audited accounts must not be less than Rs.18,00,000 ( Eighteen Lakh only
). The work would be sub-divided and report would be done separately into two
parts:-
a) Statutory and Compliance Part
b) Operations Part
4. The Firm must have PAN and GST Registration number.
5. A firm will not be eligible for empanelment if any of its partners or relatives (as
defined in Company's Act, 2013) is/was associated as an office bearer in any Managing
Committee of Chapter/Regional Council/ Council of the Institute. A declaration
confirming such non association should be given by the managing partner along with
the application for empanelment.
Selection Criterion
The norms for selection of firms for Internal Audit will be as follows
Sl Particulars Points Fixed Maximum
no Point
1 Place /Location of the firm 10
(i) Office at both Kolkata and Delhi 7
(ii) Office at Chennai, Mumbai and 3
Hyderabad ( Each place one additional
mark to a maximum of 3 marks )
2 Number of Full Time Partners/ 15
qualified senior professionals in
employment and their experience
(a) 5-10 10
(b) Above 10 15
2
3 Number of Qualified Assistants (Cost 10
accountants only) employed with the
Firm
5-10 5
11-20 8
Above 20 10
4. Relevant Experience of the bidding 10
firms
10 to 15 years 5
16 to 20 years 8
Above 20 years 10
5. The Firm must have experience of 15
conducting at least 2 Internal Audits
in Public Sector/Autonomous
Bodies/Statutory Bodies during the
preceding financial year i.e 2018-19
No. of Internal Audits conducted in Marks
Public Sector/Autonomous Bodies
funded by GOI/Statutory Bodies
2 5
3 to 6 8
7 to 10 10
Above 10 15
6. Experience in auditing in Internal 15
and other Audits
No. of Years Marks
3 to 5 8
6 to 10 10
Above 10 15
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7. Average Turnover of the firm during 10
the preceding 3 financial years (
i.e.2016-17,2017-18 and 2018-19
respectively )
Rs.10- 15 lakh 3
Rs.15-20 lakh 5
Rs.20-25 lakh 8
Above Rs.25 lakh 10
8. Empanelled with Government 5
Agencies/Departments/Ministries
(if yes 5 marks )
9. Conducted Internal Audit or Similar 5
engagements in
ICAI/ICSI/Universities of Repute/IIMs
in last three financial year
10. Number of Partners/qualified 5
professionals in the full time
employment with Diploma un
Information Systems Audit and
Control
2 partners/qualified professionals 2
3-5 3
Above 5 5
Total Points 100
Other Terms & Conditions:
The appointment of the firm is subject to the following:
i) Documentary evidence of all the information as stated above is to be
furnished along with the offer.
ii) The firm should not subcontract the work.
iii) The team will work in strict confidence and will ensure that the information
in respect of the operation of the area unit is dealt in strict confidence and
secrecy. A certificate towards maintaining confidentiality to be provided by
the Auditor before commencement of audit.
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iv) Each selected firm will be allotted only one work and can be appointed for
a maximum period of two years as mentioned below. Thereafter there will
be a cooling period of two years.
v) The firm will be debarred from getting Internal Audit in future in ICAI in the
following cases:
a. If the firm obtains the appointment on the basis of false information /
false statement.
b. If the firm does not take up the job in terms of appointment letter.
c. If the firm does not submit the report, complete in all respects in terms
of appointment letter.
d. If the firm violates any of the stipulation from (i) to (iii).
e. If the performance of job is found to be unsatisfactory.
vi) All applications received after the due date and closing time of submission
of applications shall be ignored.
vii) Disclaimer: ICAI reserves the right to accept or reject any or all responses
and to request additional submission or clarifications from one or more
Appointment(s) at any stage or to cancel the process entirely without
assigning any reason.
viii) A confirmation that your firm of cost accountants as defined in clause (b )
of sub-section (1) of section 2 of CWA Act of 1959 (23 of 1959 ) along with a
copy of certificate of practice.
ix) Certificate that the cost accountant firm is free from any disqualification as
specified in the Companies Act, 2013.
x) A certificate certifying the independence of cost accountant firm being at
arm's length relationship with the Institute.
xi) Audit of HQ & Delhi Office shall have to be conducted simultaneously.
xii) The senior partner has to be present at the Office of the Institute for
finalizing the audit and has to hold periodic meetings with Director
(Finance)/ HoD (Internal Control). He will also attend Finance Committee
Meeting of the Institute, if required. No out of pocket expenses will be paid
for such.
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Other partners and other qualified Cost Accountants will spend all their
stipulated man days at site.
xiii) The firm should not be blacklisted or banned by any of the government
department of PSU ( Self attested affidavit on stamp paper of Rs.100 to be
given in this regard by the partner of the firm).
The CWA Regulations,1959 will be binding on any disputed matter pertaining to such
purview of the Internal Audit.
Audit Team
In case of internal audit, the team should be led by a senior partner (FCMA) of the
firm and should comprise of minimum of one qualified assistant and two/three semi
qualified assistants.
Scope of Work & Period of Audit
The scope of work regarding Internal Audit is given in Annexure-3. The scope of work
may increase depending upon the requirement. The initial period of engagement for
internal audit shall be for one year which may be extended for further one year
depending on the performance and on the mutual consent of both parties on the same
terms and conditions.
The Internal Audit shall be conducted half yearly basis and will commence w.e.f. April
1, 2019. However all reports & Executive summary report subsequently need to be
submitted positively within one month from the completion of close of the financial
year.
Fees Structure
The detailed fee structure is enclosed at Annexure -2.
Application Procedure
Eligible and interested firms are requested to submit their applications in sealed
envelope super scribing "APPLICATION FOR EMPANELMENT AS INTERNAL AUDITOR
FOR THE HEAD QUARTERS AND DELHI OFFICE OF THE INSTITUTE OF COST
ACCOUNTANTS OF INDIA" to the HoD (Internal Control) in the following address
through Speed Post/Courier so as to reach by 3 p.m November 30th, 2019 as per given
format (Annexure-1) accompanied by all necessary documents duly signed by the
authorized partner of the firm.
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Separate applications for Headquarters Office and Delhi Office has to be done for
consideration and stated at the envelope.
A valid communication address along with contact number and e-mail address should
be mentioned on the top of the envelop to enable the Institute to contact the
participant at the time of opening the EOI, if required.
HoD Internal Control
The Institute of Cost Accountants of India
CMA Bhawan, 12 Sudder Street
Kolkata-700016.
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Annexure-1
Format of the Application
1. Name of the Audit Firm:
2. Address:
i) Permanent Address :
ii) Correspondence Address :
iii) Telephone Number :
iv) Fax Number :
v) Email ID :
vi) PAN Number :
vii) Service Tax Regd. No :
Sl. No. Particulars
1 Year of establishment Attach documentary
evidence
2 Annual Turnover of the firm in Attach Audited Profit and
the preceding 3 Financial Years as per audited Loss Account of the firm
accounts along with copy of the
income tax return
3 Number of partners in the firm along with their Attach registration
membership number certificate and
documentary evidence
4 Number of qualified assistants Attach the name and
(Cost Accountants) in the membership number of the
Firm along with membership number. qualified assistants.
5 Number of semi qualified assistant (Inter Attach supporting
Cost Accountant) in the firm documents
6 Types of Audit conducted in State/ Attach supporting
Central PSUs. (Details to be attached) documents
7 Types of Audit conducted in other Attach supporting
organizations including educational documents
organizations if any (Details to be attached)
8 Address of the Branch offices, if any along with Attach supporting
contact number documents
9 Date of Partnership deed with Registration Attach supporting
Number. documents
Note:
1. Documentary evidence of all the information as stated above is to be furnished
along with the offer.
2. All the pages of the terms & conditions and documents submitted are to be signed
with the seal of the firm.
(Sign. & Seal of the Partner of the Firm)
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Annexure-2
FEES STRUCTURE
Fees payable to the Internal Auditors are as follows:
(i) For Headquarter incase of Statutory and Compliance Part Rs.,50,000/- per year
and for Operations part Rs.2,50,000/- per year. Incase of Delhi Office
Rs.100,000/-per year plus out of pocket expenses, if any.
(ii) GST shall be paid extra as applicable on furnishing the registration number
along with the bill.
(iii) The payments shall be released by Head quarter Finance Directorate after
receipt of clearance from the Internal Control Directorate and will be
generally paid within 21 days of the receipt of the bill.
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CERTIFICATE -1
I / We ____________________________________ (the name of the firm) having office
at ______________________________________ (address of the firm) hereby accept all
the terms and conditions of the appointment of internal Auditor as
published/uploaded in the web site vide no _______________ ( details of tender no &
date).
Signature of the Member :
Name of the Member :
Name of the Firm :
Position in the Firm :
Date :
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CERTIFICATE -2
This is to certify that any partner or partners of the
firm_____________________________________________________________ (Name of
the firm with complete address ) do not have any relation ( as defined in the
Companies Act), directly or indirectly, with any office bearer/member of the
managing committee of the Council/ Regional Council / Chapters of the Institute for
the last 8 years.
Signature of the Member :
Name of the Member :
Name of the Firm :
Position in the Firm :
Date :
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THE INSTITUTE OF COST ACCOUNTANTS OF INDIA
3, INSTITUTIONAL AREA, LODI ROAD, NEW DELHI 110003
I. Terms of Reference of the Internal Auditors for the Year 2019-20
1) The audit team will conduct audit concurrently month to month basis, throughout
the year, as per the scope of work as stipulated in this document.
2) The auditor should comment in respect of the following points:
(i) Systems & Transactions as per the Scope of Audit
(ii) Action Taken Report (ATR) on previous Audit Reports.
(iii) Critical comments and recommendations for improvement in systems
3) The auditor should generate a `Report of Exception' on a quarterly basis, where the
systems need improvement and on deviations from standard operating practices.
II. Audit Report
(i) The Audit team, during the audit, should discuss its observations/findings with the
respective auditee and evaluate their response before formulating the draft report to
be submitted to the Director (Finance)/ HoD (Internal Control). The Internal Auditor
should finalize the report after discussion with the Director (Finance) / HoD (Internal
Control). The final report should be submitted to the President with a copy to Director
(Finance) / HoD (Internal Control).
(ii) The Internal Auditor should also submit ATR/ follow-up report every month to the
President with a copy to Director (Finance) / HoD (Internal Control).
(iii) The Quarterly Report in respect of unresolved observations along with management
replies/comments shall be submitted to the President with a copy to Director
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(Finance) / HoD (Internal Control). The last Quarter's Report shall include a concise
executive summary.
(iv) Flash Report should be submitted by the Internal Auditor immediately on detection of
major irregularity in the course of audit, to the President with a copy to Director
(Finance) / HoD (Internal Control).
(v) The Internal Auditor should also give its observations about the adequacy and
effectiveness of internal control system.
(vi) Internal Audit Report should be signed by the partner of the Firm.
III. Commencement of Audit
The appointment for the year 2019-20 will be for 12 months commencing audit from April
2019 to March 2020 on continuous basis.
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Scope of Work
A. Finance and Accounts
A1. Budgetary Control:
· Whether budgetary control is exercised for indenting and release of funds, statement of
funds received vis-à-vis actual expenditure and budget provisions for major heads and
various Departments
· Whether the funds have been spent for the purpose for which they were indented.
{instances where (a) bills indented for but not paid and (b) bills paid but not indented for
may be given}
A2. Inward Remittances & Incomes:
· Recording of remittances, Issuance of Invoice/Receipts and their deposition to the Bank.
· Reconciliation of programme-wise receipts with that of the number of participants and
the fees and the Budget approved for each programme.
· Programme receipts are to be tallied with the TDS Certificates.
· Reconciliation of Programme fees received through ECS.
· To check the printed list of donations agreed with the total shown in the accounts and to
ensure that all donations received for specific purposes have been applied to those
purposes.
A3. Payments and Expenditures:
a) Capital Expenditure
· To vouch all purchases made and verify that capital expenditure was incurred after
obtaining prior approval with proper purchase order/work order.
· To ensure that Fixed assets are sold/scrapped against written authority.
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b) Revenue expenditure
· Checking of all payments made to the suppliers and others through Cheque / NEFT with
reference to relevant pay orders/instruments and approval notes.
· Checking of Petty Cash Register and reconcile Opening Balance / Receipts / Payments
/Closing Balance.
· To ensure that capital expenditure are not treated as revenue expenditure.
· To examine whether the payment vouchers have relevant supporting documents.
· To review unusual items (i.e. debit balance, one supplier with balance in various
categories etc.)
· To ensure that statutory and other deductions from the suppliers' bills are correct and
the statutory dues are deposited to the appropriate authority within the stipulated time.
· To ensure the expenses are not of personal nature.
· To ensure that controls and procedures in use are efficient, effective.
· Checking of purchase and refund of foreign currency for foreign visit and accounting
thereof.
A4. Advances and Adjustment thereof:
· Checking Advance to Employees.
· Adjustment of Advances during the month is as per stipulation.
· To examine the system of receiving cash/cheque and the time lag between receipt of
cash/cheque and deposit into bank.
· To verify the ageing analysis to ensure that all categories of advances have been
included and to identify old advances.
A5. Cash and Bank
· Checking of quarterly Bank Reconciliation Statements of various Bank Accounts of the
Institute and adjustment entries for charges etc.
· Obtaining Balance Confirmation directly from Banks and checking with book Quarterly.
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· Returned draft/cheque with the subsequent realizations on a quarterly basis.
· To physically verify cash at accounts department at periodical intervals.
· To ensure all payments are recorded in the Bank Book
A6. Reconciliation of Current Account with HQ
A7. Foreign Currency Transactions
· Purchase of Foreign Currency to be checked with reference to the Bill, approval and
corresponding payment.
· Checking the compliance with Foreign Exchange Laws, regulations and guidelines issued
by RBI in respect of foreign currency receipts and payment.
A8. Statutory Payments and Compliances
· Checking of compliance of Statutory Payments & Statutory Returns within the target
dates
TDS ( U/S 194C, 194J, etc.)
Service Tax
GST
· To verify whether any legal dispute is pending before any forum.
B. Purchase
· Whether Tender Guidelines and DOP are being followed?
· Whether Repeat Orders placed, are based on orders placed earlier with proper
tendering; whether other conditions governing the placement of Repeat Orders are
followed ? If yes, whether the same has been reported to competent authority by
Directorate of Finance.
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· Whether any attempt has been made to split the tenders to keep the value of the
contract within the delegated powers of the approving authority?
· Whether non-availability certificate and consumption pattern of last 3 years has been
obtained from both Regional & Central Stores before raising indent?
· Report on delay in placement of supply orders (from the date of approval of indent).
· Whether materials have been supplied within the stipulated time; if not, whether
liquidated damages have been imposed by the respective Department.
· Whether the payments made are as per the terms and conditions of the order, especially
taxes and duties; whether tax concessions are availed?
· Report on maintenance of records such as Tender Register, Supply orders, etc.
· Whether local purchases made are within the powers delegated to the approving
authority. In case of local purchase, whether the materials purchased have been
consumed immediately?
· Whether advance payments made to suppliers are outstanding for a long time; list of
such advances?
· Whether the tender notices are being hoisted on website as per guidelines.
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· Total no. of supply order placed during the period of audit:
No. of contract/orders Value
i) Open tender (advertised)
ii) Limited tender
iii) Negotiated contract
iv) Repeat order
v) LPC
· To verify the related documents against order placed for proprietary items.
C. CIVIL CONTRACT WORKS (CAPITAL & REVENUE)
· Whether provisions of Tender Guidelines and DOP are being followed?
· Whether any attempt has been made to split the tenders to keep the value of the
contract within the delegated powers of the approving authority? If yes, whether the
same has been reported to competent authority by the Directorate of Finance.
· Whether the works awarded have been completed within the scheduled time?
· In case of major works, whether there is any failure on the part of the management due
to which work could not be completed in time resulting in escalation in the value of work
originally awarded.
· Whether for civil works which were completed, final bills have been prepared in time
and completion of work is accounted for or not. List of cases where final bill is pending
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for completed work and list of work in progress with age to be furnished. For old
capital WIP reasons for keeping as WIP without capitalization / charged off to be
furnished?
· Whether any abnormal variations in quantities or additions in items have been observed
in Deviation Estimate / Revised Estimate; whether the reasons given for such variations
appear justified and whether approval of competent authority has been obtained?
· Whether any advance has been given to the contractors and is outstanding for a
considerably long time; whether such advance payments made have been properly
recorded on the face of the bill copy and in the Bill Passing Register?
· Whether payment has been made as per the terms and conditions of the work order and
on the basis of satisfactory performance as certified by the concerned authority;
whether recoveries towards security deposit, secured advance, income tax, etc. have
been made correctly?
· Maintenance of records such as Tender Register, TCR files, Work order and Agreement,
Measurement Books, Bills, Bill Passing Register, EMD refund, etc.
· Total No. of contracts awarded during the period of audit
No. of contracts Value
1) Short notice tender
2) Limited Enquiry / tender
a. Paper Tender.
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D. CAT
· Checking the no. of students registered and Amount Received
· Procedure adopted for printing of CAT Study Notes and payment made to the suppliers.
· Appointment of ROCCs is as per the policy laid down by the Institute.
· Distribution of CAT Study Notes with reference to enrolment.
· Listing of Shares of Fees to the different RCs and Chapters.
· To check whether sharing of Fees is properly accounted for.
· Quarterly Physical verification of stock
E. CPD
· Checking the receipts with the number of participants and payment in respect of
individual programs with sanctioned Budget of each programme.
· Checking of Invoices raised with reference to the attendance of the participants
· Checking the TDS amount connected with programme receipts.
· Checking the Programme-wise Sundry Debtors balances and recoveries thereof.
· Checking the Programme-wise Sundry Creditors and settlement thereof.
· To ensure that income/ expenses of the progammes which are organized for non
members are routed through MARF.
F. Advanced Studies
· Checking the Approvals for starting different courses and the approved course structure
· No. of Courses organized and the students enrolment in the same.
· Reconciliation of fees collected with student's enrollment.
· To check whether the faculty payments are as per the policy?
G. Professional Development
· Checking the receipts with the number of participants and payment in respect of
individual programs with sanctioned Budget of each programme.
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· Checking of Invoices raised with reference to the attendance of the participants and
compliance with GST Laws.
· Checking the TDS amount connected with programme receipts.
· Checking the Programme-wise Sundry Debtors balances and recoveries thereof.
· Checking the Programme-wise Sundry Creditors and settlement thereof.
· To ensure that income/ expenses of the progammes which are organized for non
members are not taken into purview of the Institute's activities.
· Checking of publications made by the department.
H. Training and Placement Dept.
· Checking of receipts from students attending the training programme from list of such
students maintained by management.
· Checking of receipts from Companies attending the Placement programme.
· Details of the Campus programmes organized, No. of Companies attended and
recognition of fees as per the laid down policy.
· Checking the balances still due from Companies which have attended the placement
programme.
I. Technical Directorate
· Due diligence in issuing the `Cost Accounting Standards'
· Checking for all necessary approvals from the competent authorities before finalizing
and issuing the Cost Accounting Standards
· Proper inventory check of the publications issued by the Directorate
· Seminars and programmes expenditure as per the DOP of the Institute
J. Fixed Assets and Stores
· To check & verify proper maintenance of records such as Day Book, Stores Receipts,
Issue Voucher, Store Return Voucher, etc. Whether the records are computerized and
detailed comments about the effectiveness of computerization.
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· Whether the Material Budget has been prepared considering Last three years
Consumption?
· To ensure that stock is in good condition.
· Physical verification of Fixed Assets and whether the title deeds are in the name of the
Institute.
· To ensure that the stock is adequately insured.
· Physical verification of stores at random. Physical verification of the CAT Publications,
Study materials, Prospectus, PD Publications, Exam forms, kits, etc.
· Whether there are any report of materials received short or in damaged condition for
which claim has been made with insurance company/from supplier for replacement?
· To ensure that old and obsolete items are charged off. Disposal procedure adopted for
same needs to be reviewed.
· Report on maintenance of records for scrap and suggestions for improvement & disposal
thereof.
· Report on the scrap awaiting disposal major items with the period since lying as scrap,
their approximate value etc.
· Comments about the security arrangements and housekeeping of Central Stores and
Regional Stores.
· Value of inventory in terms of number of months' consumption of stores and
comparison with previous year's figures.
· Whether reconciliation between Price Stores Ledger and Financial Ledger has been done
& necessary rectification carried out?
· Whether assessment of obsolete stores has been done?
· Whether Store Error lines are on a decreasing trend?
· Whether codification of material codes is in proper order?
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K. Other areas as may be relevant and assigned from time to time.
IV. Internal Control and system
o Examination of deficiencies in the existing systems, if any.
o Assess effectiveness and efficiency of operations and identify wastes.
o Ensure economical and effective use of resources
o Ensure that the assets of the Institute are safeguarded and optimally used.
o Remedial measures and systems corrections, wherever needed.
o Comments on compliance of laid down procedures and norms.
o Ensure reliability of financial reporting.
o Ensure compliance with applicable laws and regulations, internal policies and
standard operating procedures.
o Improvements in procedures wherever necessary.
o Ensure segregation of duties and proper authorization of transactions
o Risks in the Institute if any and methods to mitigate the same.
o Comments on Soiled Notes in each quarter.
o Verification of computation of Interest receivables from Banks.
o Areas of cost control through effective internal control mechanisms.
o Ensure adequate physical control over assets and records
o Cary out independent checks on performance
o Ensure that effective IT controls are in place
o Study of contracts/agreements and suggestions for improvements.
o Carry out Semi-Annual review/ monitoring of controls.
o Comments on compliance of previous internal audit observations/suggestions
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