Objective of Independent Audit
The objective of the Principal Recipient (PR) independent audit (henceforth mentioned as “independent audit”) is to enable an independent auditor to express an independent opinion on the financial position of the CDC supported CMAI QMS-BB Project of the funds received and expenditures for the stated accounting period, as reported by the project financial statements. The independent audit shall also determine whether the project funds are used only for the purposes for which they are received.
Scope of Independent Audit
The independent audit shall be carried out in accordance with the Accounting Standards issued by the Institute of Chartered Accountants of India, and shall include such tests and controls as the independent auditor considers necessary under the circumstances.
In conducting the independent audit, special attention shall be paid to the following:
• An assessment of the adequacy of the project financial management arrangements, including internal controls.
• An assessment of adequacy of project accounts, books, records, and other documents related to the project. This shall include assessment of whether project accounts have been prepared in accordance with the accounting standards and the same gives a true and fair view of the financial situation of the project at the end of fiscal year. The audit to be conducted on a test check basis covering the minimum funding size of fifty percent and collation of sufficient sample of disbursements.
• An assessment whether the grant funds disbursed by CDC to the PR and by PR to SRs have been used in accordance with the respective Grant Agreement and only for the purposes for which the grant funds have been released.
• An assessment whether the procurement of goods and services under the project has been carried out as per the PR/SR Grant Agreement, Procurement Policy and Guidelines, Project Implementation Plan and Project Guidelines.
• An assessment whether the systems and processes specified in Project Implementation Plan, Project Guidelines and Procurement and Supply Management Plan have been followed for inventory management (including storage) and distribution of pharmaceuticals and health products procured with grant funds and provided to PR consortium.
• An assessment whether all necessary supporting documents, records and accounts in respect of all project activities including expenditures reported via SOEs have been maintained as per Project Implementation Plan and Project Guidelines.
• Identification of needs and gaps for improvement; recommending remedial methods, especially focusing on improvement of weak controls and/or designing them where there are none.
Project Financial Statements
The project financial statements shall include:
Statement of Income and Expenditure:
1) A summary of funds received, showing the grant received from CDC
2) A summary of expenditures disaggregated under main cost categories.
Statement of financial position:
• A Balance Sheet showing accumulated funds, bank balances, other assets of the project and liabilities.
• Receipt and Payment Account.
• Notes to the financial statements, if any.
The turnover of expenditure for the period under assignment will be approximately INR 6 Crores for all the entities (Principal Recipient and Sub-Recipients). 1,875,343 USD
Period of Independent Audit Covered Under This Assignment
• QMS-BB is a five year and six months project. The period of independent audit shall be: 1st April 2015 to 31st March 2016 which is Year 2 (12 Months).
• The financial statements including the audit report shall be submitted to the Project Director, CMAI, not later than six months after the signing of the contract. Subsequently, the audit reports shall be forwarded to the CDC by the PR.
Independence of the Auditor
• The independent auditor must be completely impartial and independent from all aspects of management or financial interests in the entity being audited or those of its implementing/supervising agency or directly related entities.
• The independent auditor shall not, during the period covered by the independent audit nor during the undertaking of the independent audit, be employed by, serve as director for, or have any financial or close business relationships with any senior participant in the management of the entity.
• The independent auditor shall be reminded of any existing statutory requirements relating to independence and shall disclose any relationship that might possibly impair his/her independence.
Qualifications of the Auditor
The independent auditor must demonstrate appropriate professional qualifications and suitable experience in auditing the accounts of entities comparable in size and complexity to the entity being audited.
The minimum qualifications and anticipated inputs of the audit team composition shall be as under:
• The audit team shall be led by a Chartered Accountant with a minimum of 5 years’ experience in audit.
• The audit team shall include sufficient number of appropriate staff (Articles/Audit Clerks and other audit staff), commensurate with the size and scope of the assignment.
• Curriculum Vitae (CVs) shall be provided to the PR by the Principal of the selected firm, who shall be responsible for signing the audit reports, together with the CVs of managers, supervisors and key personnel proposed to be part of the audit team. CVs shall include details on audits carried out by the applicable staff, including ongoing assignments indicating capability and capacity to undertake the audit.
Selection of Auditor
Detailed independent audit ToR shall be shared with the shortlisted audit firms and the selection of auditor shall be based on the technical and financial quote submitted by shortlisted audit firms and upon approval of the CDC.
Submission of EOI:
Please send your Expression of Interest as hardcopy to:
Ms Deepti Singh
Manager- Finance and Contracts
Christian Medical Association of India
Plot No 2, A3, Local Shopping Complex
Janakpuri, New Delhi 110 058
Tel: 011 2552 9991-2
Objective of Independent Audit