NOTICE INVITING TENDER
NIT No. 667/ISGPP/PROC-65/2021 dated 27 July 2021
Name of assignment: 'Hiring professional firm for conducting External Audit of ISGP
Program II’
EMD: INR 7,500/-
Mode of submission of EMD: Online through Bank Transfer
MSME/SSI/NSIC registered companies are not exempted from EMD
CONTENTS
❖ SECTION –I: NOTICE INVITING TENDER
❖ SECTION –II: BID DATA SHEET, TECHNICAL FORMS & SCORE
❖ SECTION –III: TERMS OF REFERENCE
❖ SECTION –IV: CONDITIONS OF CONTRACT (LUMP SUM)
(Attached separately)
Institutional Strengthening of Gram Panchayats (ISGP) Program-II
Panchayats & Rural Development Department
Government of West Bengal
Mrittika Bhavan, 6th Floor 18/9, D.D. Block, Sector-I, Salt Lake City, Kolkata-700 064
e-mail: scu.wbisgpp@gov.in, Website: www.mis.wbprd.gov.in
__________________________________________________________________________________________________
SECTION-I date:27 July 2021
Notice Inviting e-Tender No. 667/ISGPP/PROC-65/2021
Institutional Strengthening of Gram Panchayats Program II under Panchayats and Rural
Development Department, Govt. of West Bengal invites e-Tender (two cover system) for
the work 'Hiring professional firm for conducting External Audit of ISGP Program II’
through Online Bid submission only.
Pre-qualification criteria:
Name of the Earnest Eligibility Criteria Disqualification Rejection
work Money Criteria Criteria
Hiring 7,500/- This assignment requires a Even though the During scrutiny
professional (through highly competent firm of bidders meet the of Technical
firm for online Chartered Accountants with eligibility criteria, Bid /Tender
conducting transfer) following requirements. they would be documents if it
External disqualified if is found that
Audit of ISGP a. Whether affiliated by “The they have: any information
Program II Institute of Chartered a. Made is incorrect or
Accountants of India” misleading or inadequate in
b. Whether empaneled with the false the Technical
“Comptroller and Auditor representation Bid /Tender
General of India” inthe forms, documents, the
c. Whether peer review of the statements, same will be
firm has been conducted or affidavits and rejected
not attachments without
d. The applicant firm is submitted in assigning any
Independent of the entity to proof of the reason thereof.
be audited. qualification
• No partner of the audit requirements The Program
firm or any qualified and or record Director, ISGP
employee of the firm is of submission Program II will
related to any member of of anyfalse / have the sole
the Governing fake discretion to
Body/Executive document(s). decide the
Committee/Board of b. Record of poor Eligibility of
Directors or the Project performance the Bidder on
Director/Managing such as the basis of
Director/any Director or abandoning the submitted
any of the senior works, not documents and
management (as properly evaluation
applicable) of the PMU. completing thereof and
Relative would mean the contract, reserves the
husband, wife, brother, inordinate right to refuse
or sister or any lineal delays in any explanation
ascendant or descendant. completion, to Bidders or
• Neither the firm nor its litigation any applicant
Partners or Associates history, or without
have any interest in the financial assigning
business of the PMU. failures etc. any reason
• Firms which had
conducted any audit for thereof. The
the FY 2019-20 and prior decision of this
to that period, excluding Office in this
DLI verification agencies respect will be
for ISGPP-II are also final
eligible.”
• The audit will not be .
done by a person who
was either a former
employee in the project
or a partner/employee of
the retiring auditor.
e. The audit firm is not one
against which disciplinary
orders have been issued by
the Public Companies
Accounting Oversight Board
(PCAOB) / National
Financial Reporting
Authority (NFRA) and these
orders are in force. Also, any
partner/senior manager of
the audit firm is not
associated with the audit in
any manner if he/she has
been found guilty of
professional/other
misconduct by the Institute
of Chartered Accountants of
India.
or
is one against whom
disciplinary sanction orders have
been passed by the PCAOB /
NFRA.
f. Whether they have adequate
experience in conducting
audit of Externally Aided
Projects/ Programmes either
in Central Government or in
State Government level.
g. Whether a partnership firm
with at least five (5) partners
with a minimum yearly
turnover of INR 20 Lakh for
the last three (3) consecutive
financial years.
h. Whether the firm have head
office situated in Kolkata,
West Bengal.
SECTION-II
1. Bid Data Sheet
1. e-Tender Inviting Office of the
Authority Institutional Strengthening of Gram Panchayats Program II
under Panchayats and Rural Development Department, Govt.
2. Name of the assignment of West Bengal
Hiring professional firm for conducting External Audit of
ISGP Program II
3. Method of Selection Quality and Cost Based Selection (QCBS) described in the
4. e-Tender Reference broad policies and procedures for selection, contracting and
monitoring of consultants are governed by State Government’s
notification no. 8385-F(Y) dated November 22, 2013 and
amended time to time.
667/ISGPP/PROC-65/2021 date:27 July 2021
5. Earnest Money Deposit 7,500/- (Rupees seven thousand five hundred only) through
(EMD) online transfer
6. Start Date for the Issue of 29 July, 2021 at 15:00 hrs
e-Tender Documents
10 August, 2021 up to 13:00 hrs at designated e-mail ids
7. Last date for seeking
clarifications 10 August, 2021 at 13:00hrs at Conference Hall of PMU, ISGPP
II, Mrittika Bhavan, 6th Floor 18/9, D.D. Block, Sector-I, Salt
8. Date and Time of Lake City, Kolkata-700 064
Pre-Bid Conference
9. Last date and time for 20 August 2021 up to 15:00 hrs
submission of Bids
10. The Proposal shall comprise Full Technical Proposal
Technical Proposal & Financial (1) TECH-I
proposal (2) TECH-II
(3) TECH-III
(4) TECH-IV
Financial Proposal
(1) BOQ
11. Opening of Technical 23 August, 2021, 15:00 hrs
Proposal
12. Place of Opening ofTechnical Office of the Institutional Strengthening of Gram Panchayats
Proposal Program II under Panchayats and Rural Development
Department, Govt. of West Bengal
Mrittika Bhavan, 6th Floor 18/9, D.D. Block, Sector-I, Salt Lake
City, Kolkata-700 064
13. Date of uploading list for 2 September, 2021 up to 12:00 hrs
Technically Qualified
Bidder
14. Cost of the assignment Minimum bid Price for the assignment is Rs.7,50,000/- (as
per guideline of competent authority) plus applicable taxes
15. Opening of Financial Otherwise, the bid will be treated as non-responsive
Proposal Will be informed to the successful bidder later
16. Bid validity period Not less than 120 days from the date of bid submission
17. Expected date for contract signing 13 September, 2021
18. Address for Office of the Institutional Strengthening of Gram Panchayats
Communication Program II under Panchayats and Rural Development
Department, Govt. of West Bengal
Mrittika Bhavan, 6th Floor 18/9, D.D. Block, Sector-I, Salt Lake
City, Kolkata-700 064
E-mail: procurement.wbisgpp@gov.in
Website: www.mis.wbprd.gov.in
2. Evaluation Process
Stage -1
This assignment requires a highly competent firm of Chartered Accountants as per detailed
Pre-Qualification Criteria (mentioned in Section-I). Otherwise, the bid will be treated as
non-responsive.
Stage -2
The Technical Proposal of responsive bidders will be evaluated on the basis of applicant’s
experience, proposed methodology and work plan, and the experience of key personnel as
explained in Technical Proposal. Only those applicants whose Technical Proposals get a score
of 70 (sixty) marks or more out of 100 (one hundred) shall qualify for further consideration.
Stage -3
Financial proposals of all the technically qualified bidders (scored 70 or above in technical
evaluation) will be opened and the least cost (above the minimum cost of INR 7,50,000/-)
proposal will be ranked as L-1 and the next higher and so on will be ranked as L-2, L-3 etc.
The least cost proposal (L-1) will be considered for negotiation and award of contract.
The bidders must be prepared to furnish the detailed cost break-up and other clarifications to
the proposals submitted by them, as may be required to justify the reasonableness of their
financial proposal.
The Client (ISGP Program II) reserves the right to accept or reject any bid and to cancel
the tender process and reject all bids at any time prior to the award of contract without
showing any reason.
3. The Criteria, sub-criteria, and point system for evaluation of the Technical Proposals
shall be as follows:
Criteria, sub-criteria, and point system for the evaluation of the Technical Proposals:
Points
(i) Experience in conducting audit of Externally Aided Projects/
Programmes either in Central Government or in State
Government level during last three years.
Minimum 2 Projects = 5
03-05 Projects = 10
More than 5 Projects = 15
Total points for criterion (i): 15
(ii) Adequacy and quality of the proposed methodology, and work
plan in responding to the Terms of Reference: (20 + 20)
Total points for criterion (ii): 40
(iii) Key Experts’ qualifications and competence for the Assignment:
a) Managing Partner 15
General experience - 2 marks for every year completed as Partner signing
audit reports- (12 Marks)
Knowledge in Bengali – 3 Marks
b) Audit Manager / Audit Team Leader / Partner 10
General experience - 2 marks for every year completed – (8 Marks)
Knowledge in Bengali – 2 Marks
c) Qualified Assistant/ Team Member (Minimum 4 nos.) 20
General experience - 2 marks for every year completed – (4 Marks)
Knowledge in Bengali – 1 Mark each
Total points for criterion (iii):
45
Total points for the three criteria: 100
The minimum technical score (St) required to pass is 70
Otherwise, the financial proposal will not be opened
4. Required Documents (to be submitted by the consultant)
a) Registration certificate of the firm from Institute of Chartered Accountants of India,
certificate of empanelment with the Comptroller and Auditor General of India and
certificate of peer review from ICAI with IT returns of last three years are to be
submitted by the bidder.
b) If the applicant is an authorized signatory he should submit document of authorization
(Power of Attorney) in his favour along with the application. In case of Partnership
firm, copies of the partnership deed are to be submitted.
c) Penalty for suppression / distortion of facts:
If any applicant fails to produce the original hard copies of the documents (especially
Completion Certificates, audited balance sheets or any document which is vital for his
eligibility), or any other documents within the specified time frame stated above or if
any deviation is detected in the hard copies from the uploaded soft copies or if there is
any suppression of fact during any time of the process or even after the issuance of
work order, the applicant will be suspended from participating in the e-Tender platform
for 2 (two) years.
d) Consultant’s Organization
i. Provide here a brief description of the background and organization of your company,
and – in case of a joint venture – of each member for this assignment. (in case of a joint
venture please provide the MoU or other relevant documents)
ii. Include organizational chart, a list of Board of Directors / Partners / Proprietors and
beneficial ownership (attach supporting documents) (copy of CIN / DIN / TAN/ PAN/
GST/ Trade License / Last three years audited financial statement etc.)
iii. Consultant’s Experience (please provide the information in the following format and
also provide Scan copy of Contract / completion certificate)
TECHNICAL PROPOSAL FORMS
TECH-I
Name of the Consultant:
Hiring professional firm for conducting External Audit (2020-21) of ISGP Program II
e-Tender No & Date:
1. List only previous similar assignments successfully completed in the last three 3 years.
2. List only those assignments for which the Consultant was legally contracted by the Client
as a company or was one of the joint venture partners. Assignments completed by the
Consultant’s individual experts working privately or through other consulting firms cannot
be claimed as the relevant experience of the Consultant, or that of the Consultant’s partners
or sub-consultants, but can be claimed by the Experts themselves in their CVs. The
Consultant should be prepared to substantiate the claimed experience by presenting copies
of relevant documents and references if so requested by the Client.
Consultant’s Experience
Duration Assignment name/& Name of Client Contract Role on the
(with brief description of with Address value. Assignment
Sl. contract main (phone no, Exclusive {e.g. sole
No. start & deliverables/outputs email id) of service Consultant,
Lead partner in
end tax / a JV A&B&C}
date) GST(in
INR)/
Amount
paid to
your
firm
e) Comments and suggestions on the terms of reference (if any)
f) Description of approach, methodology, and work plan in responding to the terms of
reference
1. Technical Approach and Methodology
2. Work Plan
3. Organization and Staffing
a) Technical Approach and Methodology. {Please explain your
understanding of the objectives of the assignment as outlined in the Terms of
Reference (TORs), the technical approach, and the methodology you would
adopt for implementing the tasks to deliver the expected output(s), and the
degree of detail of such output. Please do not repeat/copy the TORs in here.}
b) Work Plan. {Please outline the plan for the implementation of the main
activities/tasks of the assignment, their content and duration, phasing and
interrelations, milestones (including interim approvals by the Client), and
tentative delivery dates of the reports. The proposed work plan should be
consistent with the technical approach and methodology, showing your
understanding of the TOR and ability to translate them into a feasible working
plan. A list of the final documents (including reports) to be delivered as final
output(s) should be included here. The work plan should be consistent with the
Work Schedule Form.}
c) Organization and Staffing. {Please describe the structure and
composition of your team, including the list of the Key Experts, Non-Key
Experts and relevant technical and administrative support staff.}
TECH-II
Work schedule and planning for deliverables (please provide in the following format)
Nme of the Asignment: Hiring professional firm for conducting External Audit (2020-
21) of ISGP Program II
Name of the Consultant:
e-Tender No. & Date:
WORK SCHEDULE AND PLANNING FOR DELIVERABLES
N° Deliverables 1 (D-..) Months
1 2 3 4 5 6 7 8 9 ..... n TOTAL
D- {e.g., Deliverable #1:
1 Report A
1) data collection
2) drafting
3) inception report
4) incorporating
comments
5)
.........................................
6) delivery of final
report to Client}
D- {e.g., Deliverable
2 #2:...............}
n
1. List the deliverables with the breakdown for activities required to produce them and
other benchmarks such as the Client’s approvals. For phased assignments, indicate the
activities, delivery of reports, and benchmarks separately for each phase.
2. Duration of activities shall be indicated in a form of a bar chart.
3. Include a legend, if necessary, to help read the chart.
TECH-III
Team composition, assignment, and key experts’ inputs (please provide in the following
format)
Name of the Assignment: Hiring professional firm for conducting External Audit
(2020-21) of ISGP Program II
Name of the Consultant:
e-Tender no. & Date:
Team Composition, Assignment, and Key Experts’ inputs
Expert’s input (in person/month) per each Total time-
Deliverable input
N (in Months)
°
Name Pos D Fi
itio D- D D .... - el
n 1 -2 -3 .... .. Ho d To
me tal
.
KEY EXPERTS [2 [1 [1
.0 .0
K [Te [Ho mo ] ]
- {e.g., Mr. Abbbb} am me] nth
1 Lea ] [2 [0
der] [Fi .5 ]
K eld] [0. ]
- 5
2 m]
K
-
3
n
Subtotal
NON-KEY
EXPERTS
N [Ho
- me]
1 [Fi
eld]
N
-
2
n
Subtotal
Total
1. For Key Experts, the input should be indicated individually for the same positions
2. Months are counted from the start of the assignment/mobilization. One (1) month equals
twenty two (22) working (billable) days. One working (billable) day shall be not less than
eight (8) working (billable) hours.
3. “Home” means work in the office in the expert’s country of residence. “Field” work
means work carried out in the Client’s country or any other country outside the expert’s
country of residence.
Full
time
inpu
t
Part
time
inpu
t
TECH-IV
Curriculum vitae (CV) (please provide in the following format)
CURRICULUM VITAE (CV)
Position Title and No. {e.g., K-1, TEAM LEADER}
Name of Expert: {Insert full name}
Date of Birth: {day/month/year}
Country of
Citizenship/Residence
Education: {List college/university or other specialized education, giving names of
educational institutions, dates attended, degree(s)/diploma(s) obtained}
________________________________________________________________________
________________________________________________________________________
Employment record relevant to the assignment: {Starting with present position, list in
reverse order. Please provide dates, name of employing organization, titles of positions held,
types of activities performed and location of the assignment, and contact information of
previous clients and employing organization(s) who can be contacted for references. Past
employment that is not relevant to the assignment does not need to be included.}
Period Employing organization and Country Summary of
your title/position. Contact activities
infor for references performed relevant
to the Assignment
[e.g., May [e.g., Ministry of ……,
2005- advisor/consultant to…
present]
For references: Tel…………/e-
mail……; Mr. Hbbbbb, deputy
minister]
Membership in Professional Associations and Publications:
______________________________________________________________________
Language Skills (indicate only languages in which you can work): ______________
______________________________________________________________________
Adequacy for the Assignment:
Detailed Tasks Assigned on Consultant’s Reference to Prior Work/Assignments
Team of Experts: that Best Illustrates Capability to Handle
the Assigned Tasks
{List all deliverables/tasks as the Expert
will be involved)
Expert’s contact information: (e-mail …………………., phone……………)
Certification:
I, the undersigned, certify that to the best of my knowledge and belief, this CV correctly
describes myself, my qualifications, and my experience, and I am available to undertake the
assignment in case of an award. I understand that any misstatement or misrepresentation
described herein may lead to my disqualification or dismissal by the Client, and/or sanctions
by the Bank.
{day/month/year}
Name of Expert Signature
Date
{day/month/year}
Name of authorized Signature
Date
Representative of the Consultant
(the same who signs the Proposal)
SECTION-III
Terms of Reference
Hiring professional firm for conducting External Audit (2020-21) of ISGP Program II
Introduction
The Government of West Bengal in partnership with Government of India has initiated
Institutional Strengthening of Gram Panchayats Program Phase 2 (ISGPP-II) of approximately
US$ 595.25 million with the objective to develop institutionally strengthened GPs with funding
of approximately US$ 211.11 million (including PBG and non PBG funds) from the World
Bank IBRD Fund. Achievement of the PDO will be measured in terms of the by the end of the
program to strengthen the institutional and financial capacities of Gram Panchayats (GPs)
across the State
Program Scope & Components
The Government program (ISGPP-II) will focus on a universe of approximately 3230 GPs
within 19 districts. The three key expenditure area of ISGPP-II for the period from FY 16/17
to FY 21/22 are stated below:
i. Performance Based Grants to GPs (INR 3507.07 Crore) - Around 88% of Program
expenditures comprise of performance-based grants to GPs, of which a share will be
sourced from the DLIs on PBGs (INR 933.3 Crore). The other PBG source is State
Finance Commission. The PBG will be allocated during the four years starting from FY
2017/18 till FY 2020/21 whereas other activities will continue until FY 2021/22, and the
PPF supported preparatory activities in FY 2016/17. A single blended PBG grants will
be provided to GPs in their PBG Savings Account, based on their achievement of annual
performance assessment of basic minimum condition, expanded minimum condition and
performance scores. The State will receive the IBRD funds based on achievement of
Disbursement Liked Indicators. The process of DLI allocation and disbursement are
explained in detail in the PBG/APA chapter of Program Operations Manual.
ii. Capacity building and institutional development support (INR 359.8 Crore) - IBRD funds
will be provided to ISGPP-II to strengthen institutional capacities of GPs. The
expenditure area on capacity building expenditures encompasses: Formal training
support to the GPs on planning, budgeting, financial management, procurement, own
source revenue mobilization, safeguards compliance, vertically integrated planning,
gender budgeting and social inclusion and other areas of local government functioning.
These will be provided through various agencies/institutions such as STARPARD or any
private agency. Also handholding support will be provided to the GPs for improved local
government functioning by providing focused mentoring support on planning, financial
management and engineering design & supervision, support from the district
coordinators under the Program, and support to up-grading the core staffing positions at
the GP level, focusing on the executive assistants, secretary and engineers, which show
significant gaps across GPs.
iii. Program management, coordination and monitoring (INR 121.3 Crore) - IBRD will
provide funds to ISGPP-II to support implementation and management of program
related activities. Specific support for APA , roll out and refinements of GPMS, GIS and
MIS, GRM, web based monitoring systems and Integrated IT based capacity building
and monitoring platforms including video conferencing facilities. It also encompasses
support to directorate of social audit for mainstreaming social audits in GPs; and support
to P&RDD for developing a robust system of External audit in GPs.
Implementation Arrangements
The P&RDD will have the primary responsibility for Program implementation and ensuring
that the Program development objectives are met, and will execute the Program through the
WBSRDA, which will also be responsible for inter-institutional coordination. The ISGPP-II in
WBSRDA will assume direct, state-wide responsibility for day to day Program management
and coordination. The ISGPP-II will be staffed by both cross-cutting management and support
staff and specialists dealing with specific technical areas, and it will identify from amongst its
staff focal personnel for each of the program activity, who will be in charge of implementation,
coordination, monitoring and reporting on their respective activity.
The Program Operations Manual provides a detailed description of the program and outline the
key program operational modalities and instruments.
Financial Management Arrangements
The design of the financial management arrangements for the Program is largely predicated on
the findings of the Integrated Fiduciary Assessment report dated November 2016 and the
GoWB’s existing Acts, guidelines, rules on public financial management.
As the nodal implementing agency of the ISGPP-II, the ISGPP-II will be responsible for the
accounting and reporting for all state and district level expenditures and consolidating the
expenditures incurred at ISGPP-II. There are two types of ISGPP funds that will flow through
ISGPP-II:
i. Performance Based Grants to Gram Panchayats- PBG funds will be routed centrally
operated and managed through the office of ISGPP-II to specified bank account of qualified
GPs.
ii. Funds other than PBG- These include funds to meet the program related expenditure of
ISGPP-II. ISGPP-II will retain a bulk of the funds to meet the program related expenditure.
The fund release will be accounted for as `grants in aid’ in the books of WBSRDA. This
will include;
a. Capacity Building and institutional development support- Funding support for Formal
Learning and Training, Mentoring Support, Support for HR recruitment for GPs, Systems
development & Roll out
b. Program management, coordination and monitoring- Funding support for timely
completion of APAs etc.
The program funds (both PBG and non PBG) will flow from the State budget to ISGPP-II of
WBRDA. ISGPP-II will transfer the PBG funds (including ISGPP-II IBRD DLI based PBG,
100% SFC grants) to respective DP&RDO who in turn will route it to GPs PBG Savings
Account in line with the existing GoWB procedures.
For individual GP, the PBG grants will flow through the district level accounts of DPRDO for
onward electronic transmission into designated GP PBG Savings bank accounts [DLI based
IBRD funds and SFC 100% grants into designated SFC bank accounts]. GPs will utilize the
grant funds for implementation of various Program activities in accordance with their approved
plans and budgets.
Other key features of the proposed financial management arrangements under the Program are
summarized as follows:
a) The program will be budgeted in the state budget under the P&RDD
b) The ISGPP-II maintains separate bank account and books of accounts are maintained
to record all program-related receipts and payments, including expenditures incurred
by the respective district level teams. A chart of accounts is being developed to ensure
that expenditures can be tracked by program expenditure and activity areas. The
ISGPP-II uses ERP version of TALLY for accounting and reporting for Program funds.
c) For each program year, the ISGPP-II will release blended PBG funds (IBRD DLI based,
SFC) to GPs; these funds will be routed through Fund Transfer Account (FTA)
maintained by the DPRDO in each district. A separate confirmation of the fund
transfers will be sought from the bank handling the PBG funds at the district level.
d) For the non PBG funds, the final bills for payment will be forwarded to the ISGPP-II,
WBSRDA for payment.
e) The ISGPP-II follows the Financial and Administrative Manual (2016) for its operation
f) The ISGPP-II will engage a reputed firm of Chartered Accountants, to conduct annual
external audit and certify the consolidated program annual financial statements for the
Financial Year 2019-20.
Audit Standards to be followed for audit of ISGPP-II
The audit will be carried out in accordance with the Auditing Standards promulgated by the
Institute of Chartered Accountants of India. The auditor should accordingly consider
materiality when planning and performing the audit to reduce audit risk to an acceptable level
that is consistent with the objective of the audit. Although the responsibility for preventing
irregularity, fraud, or the use of program funds for purposes other than as defined in the legal
agreement remains with the ISGPP-II, the audit should be planned so as to have a reasonable
expectation of detecting material mis-statements in the program financial statements.
An audit report on the program financial statements should be prepared in accordance with the
common practice of government accounting system of Government of West Bengal. Formats
for expressing the Management Letter, Management Assertion Letter and Model Audit Report
have been suggested from ICAI standards. This intends to suit the reporting of external audit
of ISGPP following government accounting systems. ICAI standards require an audit opinion
to be rendered related to the financial statements taken as a whole, indicating unambiguously
whether it is unqualified or qualified and, if the latter, whether it is qualified in certain respects
or is adverse or a disclaimer of opinion. In addition, the audit opinion paragraph will specify
whether, in the auditor’s opinion, (1) the funds were utilized for the purposes for which they
were provided, (2) expenditures shown in the PFS are eligible for financing under the relevant
loan or credit agreement and, where applicable.
Guidelines for Reference:
The professional firm conducting the External audit of ISGPP-II must refer to the following:
a) Associated rules administering the finance and treasury functions of Govt. of West
Bengal
b) Supplementary Government Order on Fourteenth Finance Commission -Performance
Based Grant
c) Financial & Administrative Manual for the Institutional Strengthening of Gram
Panchayats Program-II (ISGPP-II) (July 2016)
d) Technical Assessment- West Bengal ISGPP-II (December 2016)
e) Draft Integrated Fiduciary Assessment Report (November 2016)
f) Program Operational Manual-ISGPP (2016-17), including procurement procedures
Audit Scope
ISGPP-II will engage a firm of chartered accountants, acceptable to the World Bank to audit
and certify the consolidated program annual financial statements of the ISGPP-II. The scope
of the audit will extend to ISGPP-II and will be additional to any institutional statutory audit
processes that may already be in place. The TORs for the audit has been agreed with the World
Bank. The audits would be conducted on an annual basis and the audit reports would be
submitted to the Bank within six months of the close of each financial year. The following
audit reports would be monitored at the level of Principal Secretary P&RDD.
In conducting the audit, special attention should be paid to the following:
• All external funds have been used in accordance with the conditions of the relevant
legal agreements and only for the purposes for which the financing was provided.
Relevant legal agreements include the Financing Agreement, the Program Agreement,
and the Minutes of Negotiations
• Effective program financial management systems1, including internal controls, were in
operation throughout the period under audit examination. This would include aspects
such as adequacy and effectiveness of accounting, financial and operational controls,
and any needs for revision; level of compliance with established policies, plans and
procedures2; reliability of accounting systems, data and financial reports; methods of
remedying weak controls or creating them where there are none; verification of assets
and liabilities; and integrity, controls, security and effectiveness of the operation of the
computerized system. All necessary supporting documents, records, and accounts have
been kept in respect of all program transactions. Clear linkages should exist between
the books of account and reports presented to the Bank. The Program accounts have
1 The financial management system would include methods and records established to identify,
assemble, analyze, classify, record and report on transactions and to maintain accountability for the
related assets and liabilities.
2 These include the Financial Management Manual and Memorandum of Understandings between
OPRM and other implementing agencies.
been prepared in accordance with the accounting principles defined in the Program
Operations Manual and give a true and fair view of the financial position of the program
at the year end and of resources and expenditures for the year ended on that date.
Coverage for the External Audit of ISGPP-II
The audit would cover the entire program i.e., covering the implementing units at the Program
level (State and district) and will cover ISGPP-II. The audit would also cover all consultancies
or other contracts that may be entered into by the implementing agencies. The audit will
however, not extend to the Gram Panchayats, which are subject to separate departmental
External audit processes. Specific areas of coverage of the audit will include the following:
a) An assessment of whether performance-based grants are disbursed in a timely manner
by the ISGPP-II
b) An assessment of the adequacy of the program financial management systems,
including internal controls. This would include aspects such as adequacy and
effectiveness of accounting, financial and operational controls, and any needs for
revision; level of compliance with established policies, plans and procedures;
reliability of accounting systems, data and financial reports; methods of remedying
weak controls or creating controls in areas where they are lacking; verification of
assets and liabilities.
c) Efficiency and timeliness of the funds flow mechanism at the State and district units
of ISGPP-II of WBSRDA.
d) Efficiency and timeliness of funds flows to Gram Panchayats. This will include a
review of the processes followed to ensure that the conditions (performance criteria)
for each release (as provided in the chapter on PBG System) have been complied and
are in line with the financing agreement..
e) Whether the accounting for the advances and fund releases are properly recorded in
the accounting books and systems in place for monitoring the receipt of periodic
financial reports and follow up on outstanding advances are adequate.
f) Whether the accounts of the District level expenditures are incorporated in a timely
manner at the State level.
g) An assessment of compliance with provisions of financing agreements (IBRD
Program Agreement), especially those relating to procurement, accounting and
financial matters.
h) All necessary supporting documents, records, and accounts have been kept in respect
of all program activities and that clear linkages exist between accounting records,
accounts books and the periodic financial reports.
i) Adequate records are maintained regarding the assets created and assets acquired by
the Program, including details of cost, identification and location of assets and
ensuring that there is a system of physical verifications of assets.
j) The auditor is expected to obtain and satisfactorily document sufficient audit evidence
to support audit conclusions.
o) Bank reconciliations have been carried out on a monthly basis.
In particular, the following aspects will require attention:
• Whether books of accounts are being maintained in the manner and formats defined
by the Financial and Administrative Manual of the Program;
• Whether the financial transactions are being accurately and completely recorded;
• Whether the fund flows and management are being done in compliance with
Financial management guidelines of the ISGPP-II;
• Whether funds have been used with due regard to economy, efficiency and for the
purposes they were provided;
• Whether release of money is adequately supported;
• Whether goods, works and services are being procured following the procurement
procedures and methods as mentioned in the Procurement manual / POM and
adequately approved by the appropriate authority of ISGPP-II
• Whether goods, works and services are being procured in accordance with the
agreed annual procurement plan and sanctioned budgets
• Whether time schedule for procurement of goods, works and services is in line with
the Program Procurement Plan and Procedures
Content of Audit Report:
Financial Statements-
Program Financial Statements should include:
(A) Receipts & Payments Account, Income & Expenditure Accounts and Balance
Sheet.
(B) Management Assertion: Program Management should sign the program
financial statements and provide a written acknowledgement of its
responsibility for the preparation and fair presentation of the financial
statements and an assertion that program funds have been expended in
accordance with the intended purposes as reflected in the financial statements.
The auditor should apply such tests as the auditor considers necessary under the circumstances
to satisfy the audit objective. In particular, these expenditures should be carefully examined for
program eligibility by reference to the relevant financing agreements. Where ineligible
expenditures are identified as having been included in withdrawal applications and reimbursed
against, these should be separately noted by the auditor.
The program financial statements and the audit report should be received by the Bank not later
than 6 months after the end of the fiscal year. The auditor should also submit the two copies
of the audited accounts and audit report to the ISGPP-II
Special emphasis may be laid on items like:
• Timely and accurate preparation of Bank Reconciliation Statements
• Timely and accurate preparation of financial reporting statements
• Surplus funds lying unutilized for long
• Financial records and registers being maintained
• Disbursement of funds to the third parties
• Understand the process of tagging and maintenance of assets acquired by the
ISGPP-II.
• The auditors may perform physical verification of assets (if considered necessary)
• Whether capacities for financial management as indicated in the operations manual
have been created
Others Whether appropriate internal controls as specified by the Financial and
• Administrative Manual/The Operations Manual/The Procurement Manual/any
other relevant notifications, if any, are operating satisfactorily. The auditor should
• suggest methods for improving weak controls or creating them where need be.
Verifying compliance with recommendations of the earlier audit reports and
commenting thereon
Whether statutory compliance has been made in a timely manner
Key Experts’ qualifications and competence and numbers for the
Assignment:
a) Managing Partner (Qualified Chartered Accountant)
b) Audit Manager / Audit Team Leader / Partner (One) (Qualified Chartered
Accountant)
c) Qualified Assistant/ Team Member (Minimum 4 nos.) (Qualified Chartered/Cost
Accountant)
d) Semi-Qualified Audit Assistant (Minimum 8 nos.) (CA/ICWA Intermediate)
Period, Timing and sample coverage of External Audit of ISGPP-II
The contract period of the assignment is to be for a one-year term.
The External Audit will be carried out on a yearly basis. The selected firm(s) will submit in
advance and agree with the ISGPP-II on a ‘schedule of audit’. This will facilitate smooth and
timely conduct of External audit and submission of reports for closing the opinions expressed
by the professional firm. The details of the period to be covered under audit and approximate
time to be taken and units to be covered are as follows:
Commencement of Audit: 15th September’2021
Period for which Timeline for Timeline for
audit will be done submission
Units to be covered completing
audit
April’2020 to ISGPP-II (PMU office at State 15th of Final
March 2021 headquarters along with all DCU November Audit Report
offices & Office of the District
Panchayats & Rural 2021 30th
Development Officers situated at November
all district headquarters across
the state) 2021
Reporting
The professional firm conducting the External audit shall provide the reports with the following
frequency:
• Audit report within 15 days of the end of completing External audit.
• Summary of audit findings and recommendations
• Support/Inputs to be provided by the ISGPP-II.
External audit report containing the following elements should be shared with the Program
Director/Finance Team of ISGPP-II:
a) The objective and scope of the External audit
b) A summary of the External auditing procedures performed
c) The External auditor’s opinion as to the overall adequacy of the systems of internal
management control, indicating unambiguously whether that opinion is unqualified,
qualified, or adverse
d) Key management issues
e) Detailed External audit findings, with adequate descriptions of weaknesses identified and
the associated business impact and risk
f) procurement processes for both Goods & Services procured in FY 2020-21 as per the
approved procurement plan
g) Appropriate and reasonable recommendations to address the identified weaknesses; and
h) Responses to findings and recommendations by authorized persons stating the timeline
for remediation and the person responsible
The report should be discussed and agreed with the auditable units and should be structured to
list the observations, the implications of the observations, the suggested recommendation and
the management comments/agreed actions. The audit observations should be supported by
instances and quantified, as far as practicable.
Payment will be made after submission of final audit report.
Management Letter
In addition to the audit report on the program financial statements, the auditor may prepare a
management letter containing recommendations for improvements in internal control and other
matters coming to the attention of the auditor during the audit examination, possibly including
matters such as the following:
a) observations on the accounting records, systems, and controls that were examined
during the course of the audit;
b) deficiencies or weakness in systems and controls, together with specific
recommendations for improvement;
c) compliance with financial covenants in the financing agreements;
d) matters that might have a significant impact on the implementation of the Program;
e) the status of recommendations from previous management letters, including any issues
which remain to be addressed and any issues which recurred; and
f) any other matters that the auditor considers pertinent.
g) The auditor should supply the Bank through the P&RDD with a copy of the
management letter together with the audit report on the program financial statements.
In the event that no management letter is issued, the auditor should supply a written
advice to that effect together with the audit report on the Program financial statements.
An example of a Management Letter is shown at Attachment-A.
General
The professional firm would be given access to all documents, correspondence, and any other
information relating to the Program and deemed necessary by the auditor. The auditor should
become familiar with the Program, and with the relevant policies and guidelines of the World
Bank (including those relating to disbursements, procurement and financial management and
reporting). The auditor would be provided copies of the Program Operations Manual, Technical
Assessment Document of the World Bank, Development Credit Agreement and Program
Agreement with IBRD (including agreed Minutes of negotiations), the Procurement Manual,
Financial and Administrative Manual and procedures issued by ISGPP-II and the relevant
World Bank policies and guidelines. It is also mandatory that the auditor must be acquainted
with the state government rules and procedures for financial management, procurement etc.
that will also be relevant to the Program implementation.
Example of a Management Letter Attachment-A
(Audit firm Letterhead)
(Date)
To
The Program Director,
ISGPP II
In connection with our audit of the financial statements of the ISGPP-II for the Year ended 31st
March, 2018, we familiarized ourselves with Program documents and the internal guidelines /
circulars applicable during the period under audit. We also reviewed the business of the
Program and evaluated the accounting systems and related internal controls of the Program in
order to plan and perform our audit.
This Letter to Program Director includes observations noted during the course of our audit
examination in the following areas:
• Matters having a significant impact on the implementation of the Program
• Opportunities for strengthening financial management records, systems and controls,
together with recommendations for improvement
• Status of maintenance of Program books and records
• Accuracy of Program financial statements
• Status of prior audit recommendations
The matters contained in this Management Letter are intended solely for the information of
Program management, for such timely consideration and action as Program management may
deem appropriate. They have all been considered by us in formulating the audit opinion
expressed on the Program financial statements in our audit report dated __________, and they
do not alter the opinion expressed in that audit report.
We wish to take this opportunity to thank Program Management for the courtesies and
cooperation extended to our auditors.
Yours truly,
Signature Not Verified
Digitally signed by MALAY SARKAR
Date: 2021.08.10 12:32:30 IST
Location: West Bengal-WB
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