AIRPORTS AUTHORITY OF INDIA
INTERNAL AUDIT DEPARTMENT

Tender id:- 2021_AAI_74046_1

Notice inviting Tender for conducting Internal Audit of CNS &
Commercial Directorate, Corporate Headquarters, AAI for the

financial year 2019-20 (01.04.2019 to 31.03.2020)

AAI invites Technical & financial bids from AAI empanelled CA/CMA firms
for conducting Internal Audit of Commercial and CNS Directorates, CHQ for the
period 01.04.2019 to 31.03.2020. The Audit work shall be awarded to the lowest
quoted bidder.

The Estimated Cost of the tender is Rs. 4,68,000/-. Self –Help files/FAQ &
System Settings (Annexure-III) is also available at E-tender portal with URL
address https://etenders.gov.in/eprocure/app.

(RAJESH JINDAL)
AGM (F)

AIRPORTS AUTHORITY OF INDIA
Internal Audit Department, CHQ

phone No. 9213516879, 01124632950Ext.3328
email id : rkjindal@aai.aero.

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E-bids shall be submitted in two bid system as follows :

TECHNICAL BID ENVELOPE - I
The Technical bids shall contain Unconditional Acceptance Letter as per
Annexure- IV duly signed & stamped by the Authorized signatory of the firm for
qualifying the Technical bid and opening of financial bid of the firm.

FINANCIAL BID ENVELOPE - II
This Financial Bid is called through the electronic process and can be
downloaded from the e-tender portal of AAI with URL address
https://etenders.gov.in/eprocure/app. The Financial Bid is also available on AAI
website www.aai.aero Please note that submission of the Financial Bid is
essential and can only be uploaded through the E-tender portal
https://etenders.gov.in/eprocure/app. Bidder should quote the rates in
Downloaded BOQ-sheet from the portal in Cover-2
The last date of submission of bid is 03.04.2021 by 1800 hrs. And the same shall
be opened on 05.04.2021 at 1100 hrs.

(RAJESH JINDAL)
AGM (F)

AIRPORTS AUTHORITY OF INDIA
Internal Audit Department, CHQ

phone No. 9213516879, 01124632950Ext.3328
email id : rkjindal@aai.aero.

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Scope of Work for conducting Internal Audit of Commercial and CNS
Directorate, CHQ for Financial Year 2019-20 as per NIT &
Terms & Conditions

1. INTRODUCTION:

The Airports Authority of India (AAI) (Hindi: भारतीयविमानपत्तनप्राधिकरण;
BhãratiyaVimãnpatanPrãdhikarañ) under the Ministry of Civil Aviation is
responsible for creating, upgrading, maintaining and managing civil aviation
infrastructure in India. It provides Air traffic management (ATM) services over
Indian Airspace and adjoining oceanic areas. It also manages a total of 129[1]
Airports, including 20[2] International Airports,3 JVC, 8 Customs Airports, 78
Domestic Airports and 20 Civil enclaves at Military Airfields. AAI also has ground
installations at all airports and 25 other locations to ensure safety of aircraft
operations. AAI covers all major air-routes over Indian landmass Radar
installations at 11 locations along with 700VOR/DVOR installations co-located
with Distance Measuring Equipment (DME). Runways are provided with
Instrument landing system (ILS) installations with Night Landing Facilities at
most of these airports and Automatic Message Switching System at various
Airports.

2. SCOPE OF WORK

The scope of Internal Audit has been covered in the NIT. Internal Audit is to be
carried out by the firm for systematic examination of all financial transactions to
ensure the accuracy and compliance with the internal system, procedures and
guidelines of AAI.

The detailed Scope of Work are listed as follows:

A. Commercial

S. No Particulars

i) Fixation of MRLF in terms of Commercial manual and scrutiny of
tenders if any (centralized tender) carried out by Commercial
Directorate, CHQ.

ii) Review of space/ commercial audits carried out by Regions/
Stations/ Airports and action taken.

iii) SD available vs. O/s dues

iv) Review of Implementation of policies, directions and decisions of CHQ
by the Regions/ Stations/ Airports.

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v) Review of proposal received from Regions/ Stations/ Airports for
approval.

vi) Empanelment of consultants and agencies to be eligible in
participating in the tender process at various airports.

vii) Extension of contract beyond six months including those reported by
Regions.

viii) Defaulting contractors/Agencies if any
ix) Review of Arbitration cases/ Legal cases pertaining to the Directorate.

B. CNS
S.no Particulars
i) CNS (P) I & II

1. Scrutiny of files-Verification of all proposals approved in
accordance with DOP/ CNS Procurement manual for procurement of:
a. Communication equipments like Datis, DVTR, HFRx etc.
b. Navigational equipments like DVOR, DME, ILS, NDB etc.
c. Surveillance equipments like ASR-MSSR, GAGAN, MSSR, ADS etc.
d. Automation equipments like Remote Tower, Mobile Tower, CNS
ATM Simulator, ATC Simulator etc.

2. Scrutiny of tender process and it’s all relevant documents from NIT to
award of work.

3. Reverse Auction in case of tender more than 2 crores.
4. Processing of claims according to the terms of agreement specifically

w.r.t. payment of taxes i.e. Income Tax, GST, Custom Duty etc.
5. Review of CWIP and Capitalization.
6. Time overrun and cost overrun in the procurement of equipements.
7. Insurance coverage.

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ii) CNS (O & M)

1. Scrutiny of files – Verification of all proposals approved in
accordance with DOP and CNS procurement manual for procurement
of spare parts in respect of communication, Navigation, Surveillance,
Automation etc. and AMC of equipments.

2. Scrutiny of Tender process and its all relevant documents from NIT
to award of work.

3. Processing of claims according to the terms of agreement specifically
w.r.t. payment of taxes i.e. Income Tax, GST, Custom Duty etc.

4. Report in respect of unutilised equipments lying at airports.
5. To verify whether AMC of unutilised equipments are still operative.

3. GENERAL INFORMATION AND GUIDELINES

a. The unconditional acceptance letter (Annexure –IV) and the
undertaking (Annexure –V) are the prerequisite documents and to
be submitted in technical bid (Envelope I). In case of any
deficiencies & requisite documents not submitted in Envelope I by
the firm, the bid of the firm will be rejected and financial bid
(Envelope II) of the firm will not be opened. ``

b. The audit firm cannot sub-contract the work. Only partners of the firm
or employees or qualified associates whose bio data is provided at least
7 days in advance can take up the audit.

c. The Audit firm shall not appoint/utilize the services of those who are
not employee/ partner/director of the firm.

d. Any form of canvassing/ lobbying/ influence, will result in
disqualification of the firm.

e. The Audit Assignment will be terminated, and the Audit firm will also
not be considered for renewal of appointment for extension of Audit in
the following cases:

i. If the firms obtain the appointment on the basis of false
information / false statement.

ii. If the firm does not take up audit in terms of appointment
letter within one month.

iii. If the firm does not submit the audit report, complete in all
respects, as per terms of appointment within stipulated time.

iv. If the performance of the firm is not found satisfactory.

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v. If any fraud/embezzlement is detected subsequently and not
reported to AAI

vi. If, the firm does not maintain the confidentiality requirement
in terms of professional code of conduct.

f. If progress/performance of the audit firm is not satisfactory, the
management reserves the right to terminate the appointment and to
debar the firm from participating in any tender in AAI in future with
prior notice of one month.

g. AAI reserves the right to reject the conditional tenders without
assigning any reason thereto. Further AAI reserves the right to call for
any other detail or information from any of the tender(s).

h. The above bid amount is inclusive of professional fees, TA/DA, local
conveyance, lodging & boarding etc. except GST/applicable taxes. No
other payment shall be made except the amount quoted above. The
payment shall be released after acceptance and approval of the report
by the Competent Authority.

i. The audit team will conduct audit as per Compendium of standards on
Internal Audit issued by the Institute of Chartered Accountants of India
and in consultation with concerned officials at Internal Audit
Department, CHQ. It is also important to ensure that all aspects are
reviewed from the proprietary angle and all expenses, cost and revenue
need to be examined from this angle. The policy decisions of AAI and
procedures adopted should be reviewed and commented upon
including changes suggested. The Internal controls, delegation of
powers are to be monitored for compliance as well as appropriateness.
The various management decisions adversely impacting profitability or
wastages of resources may also be brought in the report.

j. Confidential Report : The Auditors are required to report all cases of
revenue leakages, excessive or unreasonable expenses, misuse of
powers, favours or disfavors having financial impact, fraud on or by
authority, improper awarding of contracts, theft, unlawful or
unprofessional activity or activity beyond the ethical boundaries or any
other aspects without any limitation of any kind where interest of the
authority or any stake holder is getting adversely affected. Such report
shall be dealt with in a confidential manner and actions will be initiated
without any reference of source. The secrecy in terms of Official Secrets
Act will be followed by all concerned about such report and will be
shared only on need to know basis. A copy of the confidential report
may please be sent to ED (Finance-IA) of the AAI for onward
submission to the Competent Authority.

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k. Report Submission: The Audit report of the CHQ, AAI is to be submitted
to Executive Director (Finance- Internal Audit) after an exit meeting
with GM (Finance- Internal Audit).
Efforts for immediate corrective action after the exit meeting may be
done & ensured to cover in the Audit Report for acceptance.

l. Period of Assignment: A period of 14 (Fourteen) Working days has
been assigned for the audit of each Directorate. The internal audit
work assigned is required to be completed within a period of 14
(Fourteen) working days from the date of commencement of Audit.

m. The Audit Team should consist of Three Members (One FCA/FCMA
Qualified Professional with two other Assistants).

n. Terms of Payment: The payment will be released only after approval of
the Internal Audit reports, by the Competent Authority.

o. The Audit firm must be familiarized with local conditions and consider
the same before quoting for the tender. To obtain first-hand
information on the Assignment and on the local conditions, firm may
visit CHQ before submitting the Proposal.

p. The cost of preparing the proposal including visits to the AAI CHQ is
not reimbursable irrespective of the outcome of the evaluation process.

q. The AAI reserves the right to reject or accept or withdraw the tender in
full or part, as the case may be, without assigning any reasons thereto.

r. In case of any disputes arising out of the assignment, the decision of
Member (Finance), Airports Authority of India shall be final and
binding on both the parties.

s. For clarifications, if any, the matter may be addressed to the Internal
Audit Department, CHQ, Airports Authority of India.

t. Other terms & conditions as mentioned in the EOI dated 18/01/2017 /
Technical bid shall remain same.

(RAJESH KUMAR JINDAL)
AGM - FINANCE (IA) / BID MANAGER

AIRPORT AUTHORITY OF INDIA
NEW OFFICE COMPLEX

SAP, NEW DELHI-110003
phone No. 9213516879, 01124632950Ext.3328

email id : rkjindal@aai.aero.

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ANNEXURE-I

SOP for conducting Internal Audit of Commercial & CNS Directorates,
Corporate Headquarters, AAI,

SOP ON ENTRY

1. The senior partner of CA Firms appointed for conducting Internal Audit of
Commercial & CNS Directorates, CHQ, AAI along with his team members will
approach EDs of Commercial & CNS Directorates at CHQ and discuss the
Scope of work and the Audit Plan of the firm.

2. The EDs will detail a Nodal Officer from the Directorate to co-ordinate with
concerned Officers/Officials to facilitate the Auditor to carry out the assigned
work of Internal Audit by them smoothly

3. The EDs after discussing with the Auditor, will intimate and instruct all the
concerned officials to provide the records as requisitioned by the Auditors
for their inspection/verification/Auditing as per the schedule submitted by
the CA firm.

4. A system should be evolved to record the number of visits made by the Sr.
Auditor and his team to the Section for carrying out Audit inspection/ Job.

5. As required in the reporting system, designed for Internal Audits, the
compliance status of previous Audit Reports and Government Audit Reports
/ Para needs to be made available to the Auditors.

6. All the related documents, files, approvals, reports, work orders, agreements,
correspondence with the statutory bodies/Authorities, vouchers / invoices /
bills etc. should be made available to Auditors. EDs may ensure for full
cooperation and timely submission of requisite documents to the Auditors
during the course of Audit.

8. Regarding viewing the SAP (ERP) System by the Auditor, it has been decided
that the Coordinator /Nodal Officer will open the SAP system by using his ID
to enable the Auditor to verify the details.

9. Reports as per 'requirement can also be downloaded by the concerned
officer from SAP system for handing over to the Auditor for their verification.

10. During the course of Audit, the EDs should also interact with Auditors from
time to time and review the progress of Audit and the Audit requirement of
the Directorate.

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SOP on EXIT
1. The preliminary Audit Report shall be compiled / prepared,

including additional information if any, provided / obtained during
Audit / discussion and rectifications carried out at the instance of
Audit for the respective Directorate. The report should also contain
specific suggestions for improvements.
2. The preliminary Audit observations shall be discussed with GM (IA)
and ED(IA).
3. Based on the outcome of the discussions, the Final Audit report thus
compiled shall be structured as per the Scope of Work outlined.

2/2

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ANNEXURE-II

INTERNAL AUDIT REPORT MAY BE DIVIDED AND PRESENTED IN FOUR
PARTS, AS UNDER

Part-I Compliance and Report:

This part shall cover the comments of the Auditors on the adequacy of the
compliance and action taken for rectification of errors/discrepancies pointed
out by previous Auditor. It may be ensured that the compliance report on
Audit observations pointed out in reports relating to earlier Audits
(Govt./Internal Audit) are made and corrective action have been taken on
those points. It shall also contain the confirmation regarding implementation
of policies, systems, control etc. to avoid the recurrence of such irregularities
in future.

Part-II Important Observations/ Findings:

This part shall contain all such significant discrepancies observed during the
current Audit and the observations in which the auditor feels that immediate
attention of management is required specifying the financial implications, if
any. In this part Auditors shall also bring the important areas requiring
improvement and their recommendation, if any, and also indicate the
improvements made by AAI based on the Audit observations. Further any
deviations/ observations, from policies, systems and procedure of AAI may
also be considered for inclusion in the report.

PART-III Report on Testing of Effectiveness of Internal Controls:

An element of risk-based Auditing shall be made a part of Internal Audit for
this purpose. The Auditors would be required to include their findings and
recommendation on risk element in part-III of their report.

PART-IV Detailed Report:

In this part, the Auditors shall furnish the detailed results of the Audit and
the confirmation whether AAI’S system/ guideline/ propriety has been
adhered to including statutory compliance.

The report should be in the same sequence as given in the scope of work for
Audit and in case, any item is not applicable to the Audit unit, the same
should be mentioned as nil.

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Summary Report indicating the important observations for each area as
brought out in the scope of Internal Audit / Checklist should be prepared.

A statement indicating the Audit personnel with designation including the
visits of partners and the period of Audit for each Section/Unit should be
submitted. The partner is expected to carry out the Audit by himself so that
the entire scope may be covered in a systematic manner and to facilitate the
reporting as per the requirements.

The final report should be prepared and submitted to: Executive Director,
Internal Audit Department, CHQ.

Page 11 Signature Not Verified

Digitally signed by RAJESH KUMAR
Date: 2021.03.22 16:12:21 IST
Location: eProcurement System for
Central PSUs