Request For Proposal Odisha Skill Development Authority(OSDA)

3rd Floor, Niyojan Bhawan,Kharvel Nahar, Bhubaneswar

External Audit

Section-1

Letter of Invitation

1. The Odisha Skill Development Authority is a registered Society which is

implementing different government skill development programme like Prime Minister Kaushal Vikash Yojana(PMKVY), Placement Linked Training Programme(PLTP) and

the Externally Aided Programme of Odisha Skill Development Project in which Government of Odisha aims at transferring the skill development education to world

standard skill education by establishing the world skill centre at Bhubaneswar.

2. Pradhan Mantri Kaushal Vikas Yojana (PMKVY) is a flagship scheme of the Ministry of

Skill Development & Entrepreneurship (MSDE) implemented by National Skill Development Corporation. The objective of this Skill Certification Scheme is to enable a large number of Indian youth to take up industry-relevant skill training that will

help them in securing a better livelihood. Individuals with prior learning experience or skills will also be assessed and certified under Recognition of Prior Learning (RPL).

Under this scheme, Project Implementing Agencies(PIA) are being engaged by OSDA, who provides training on skill development for different trades with the financial

assistance from OSDA .

3. The Government of Odisha has also received a loan from the Asian Development Bank through Government of India for Odisha Skill Development Project(OSDP) with

an objective of imparting advance skill education by establishing World Skill Centre

at Bhubaneswar.

4. OSDA now intends to engage one practicing Chartered Accountant Firm under the contract for hiring of services of a Chartered Accountant firm for External/Statutory

audit of Odisha Skill Development Project as well as of Odisha Skill Development

Authority.

5. The proposed assignment is expected to be on annual basis for a period of two

years. Extension of the assignment may be made based on the performance of the

Auditor and necessary feedback of ADB & Government on the Audit Report.

6. The Odisha Skill Development Authority (OSDA) now invites CAG empaneled

Chartered Accountant firms to indicate their interest in providing the Services for the

External Audit. Interested firm must provide information indicating that they are

qualified to perform the Services (brochures, duration of the firm/Organisation,

qualification and experience of the consultants, description of similar assignments,

empanelment with CAG India, qualification and skills among supporting audit staff,

etc.).

7. A firm will be short listed/selected in accordance with Open Competitive Least Cost

Selection method (LCS).

8. Interested firms may obtain further information on RFP,Pre-qualification criteria,

Term of Reference (ToR), Application Format etc.in the web portal of OSDA i.e,

www.skillodisha.gov.in

9. Proposal as per the Terms of Reference (TOR) placed in the above website must be

delivered by hand/post to the address below by no later than 4 PM Dt. 09.07.2020.

10. The RFP includes the following documents:

Section 1 - Letter of Invitation Section 2 – Instruction to Consultants Section 3 - Technical Proposal - Standard Forms

Section 4 - Financial Proposal - Standard Forms Section 5 - Terms of Reference

Section 6 - Standard Form of Contract.

11. It is not permissible to transfer this invitation to any other firm. Joint Venture is not

allowed.

12. Office name: Odisha Skill Development Authority (OSDA)

Officer’s name: Smt. Rashmita Panda, IAS

Director of Employment & CEO, OSDA

Address for Delivery: Odisha Skill Development Authority

Third Floor of Niyojan Bhawan

Kharvela Nagar, Unit - III

Bhubaneshwar, Orissa, India

Pin-751001

Contact Officer : Sri Bibhu Prasad Behura, G.M Finance)

Telephone : 91-674-2391320/9437160174 E-mail: finance.osdp@gmail.com

Smt. Rashmita Panda, IAS

Chief Executive Officer (OSDA)

Section-2

Instruction to Consultants

1. The Audit shall be conducted at the office of Odisha Skill Development Authority situated at

state headquarter of Odisha, Bhubaneswar only. Visit to other places are not required.

2. The Audit shall be conducted for OSDA books of accounts and OSDP books of account

separately. Separate Audited Financial Statements (AFS) have to be prepared for both the

units. Also a consolidated AFS may require to be prepared based on the need of ADB.

3. The Audit shall be conducted for two financial years i.e.2019-20 and 2020-21.

4. Please note that firms fulfilling the minimum Pre-Qualification Criteria should only apply for this audit assignment.

5. Please note that the remuneration which you receive from the contract will be subject to normal tax liability in India. Kindly contact the concerned tax authorities for further

information in this regard if required.

6. You are requested to hold your proposal valid for 90 days from the date of submission

without change of personnel proposed for the assignment and your proposed price.

OSDA will make its best efforts to select a consultant firm within this period.

7. Please note that the cost of preparing a proposal and of negotiating a contract including

visits to any place, if any is not reimbursable as a direct cost of the assignment.

8. Submission of Proposals:

Proposals should be compiled in two parts namely Technical and Financial which should

include the following information:

(a) Technical Proposal

(i) A brief description of the firm/organization and an outline of recent experience on

assignments/ projects of similar nature executed during the last 3 years in the format

given in Form F-1.

(ii) Any comments or suggestions of the consultant on the Terms of Reference (TOR) and on the data, services and facilities to be provided by the Form F-2.

(iii) A description of the manner in which consultants would plan to execute the work, work plan time schedule and the approach/methodology proposed for carrying out

the required work in Form F-3.

(iv) The composition of the team of personnel which the consultant would propose to provide and the tasks which would be assigned to each team member in Form F-4.

(v) Curricula Vitae of the individual key staff members to be assigned to the work and of the team leader who would be responsible for supervision of the team. The curricula

vitae should follow the attached Format (F-5) duly signed by the concerned personnel.

(vi) Consultants Work program and time schedule for key personnel in Form No.F-6.

(B) Financial Proposals:

(i) The financial proposals should include the Schedule of Price Bid in Form No.F-7 with

cost break-up.

(ii) Two copies of the proposals should be submitted addressing “Chief Executive

Officer, Odisha Skill Development Authority, Niyojan Bhawan, Kharvela Nagar, Unit-III, Bhubaneswar - 1.

9.

8.1 The "Technical" and "Financial" proposals must be submitted in two separate sealed envelopes (with respective marking in bold letters) following the formats/schedules attached. The first envelope marked "Technical proposal" should include the

description of the firm/organization, the firms general experience in the field of assignment, the qualification and competency of the personnel proposed for the

assignment and the proposed work plan methodology and approach in response to suggested terms of reference. The first envelope should not contain any cost

information whatsoever. The second envelope marked 'FINANCIAL PROPOSAL' must also be sealed with sealing wax and initialed twice across the seal and should contain the detailed price offer for the consultancy services.

You will provide detailed break down of costs and fees as follows:

- Staffing billing rate plus overheads; - Travel and accommodation;

- Report reproduction;

Both the sealed envelopes should again be placed in a sealed cover which will be received in the office of the Chief Executive Officer, Odisha Skill Development Authority, Niyojan Bhawan, Kharvela Nagar, Unit-III, Bhubaneswar - 1 up to 16.00

hours on 09.07.2020.

8.2 Opening of proposal

The proposals (first envelope containing technical proposal only) will be submitted by 4.00 PM. & will be opened by the Technical Committee or their

authorized representative in his office at 4:30 P.M on 09.07.2020. It may please be noted that the second envelope containing the detailed price offer will not be opened until technical evaluation has been completed and notified to all consultants.

10. Evaluation: 9.1 A two-stage procedure will be adopted in evaluating the proposals: i) a technical evaluation,

which will be carried out prior to opening any financial proposal; ii) Financial Proposals of those firms shall be opened those who qualify in the Technical Evaluation. Firms quoting

lowest evaluated price shall be selected for this assignment. 9.2 Technical Proposal

The evaluation committee appointed by the Client will carry out its evaluation applying the evaluation criteria and point system specified below. Each responsive proposal will be

attributed a technical score (St). (i) the Firm’s relevant experience for the assignment in externally aided rural

development project and government society. (10 points); (ii) adequacy of the proposed technical approach, methodology proposed and work plan

(30 points); and (iii) the qualifications of key staff proposed for the assignment (60 points).

Curriculum vitae of senior personnel in each discipline for assessing the qualifications and experience of the personnel proposed to be deployed for the studies should be included with

the proposal (in the format of the sample curriculum vitae). These personnel will be rated in accordance with:

i. General qualifications - (30 %) ii. Adequacy for the project (suitability to perform the duties for this assignment.

These include education and training, length of experience on fields similar to those required as per terms of reference, type of positions held, time spent

with the firm etc) - (60%). iii. Experience in the region, in similar project etc. - (10%)

Quality and competence of the consulting service shall be considered as the paramount requirement. A proposal shall be rejected at this stage if it does not respond to important

aspects of RFP and the Terms of Reference. Technical proposals scoring not less than 70% of the total points will only be considered for financial evaluation. The client shall notify the consultants, the results of the technical evaluation and invite those who have secured the

minimum qualifying mark and above for opening of the financial proposals indicating the date and time.

The financial proposal of others will not be considered and returned unopened after completing the selection process.

10 Financial Proposal:

10.1 Opening:

The financial proposal of all proposals (those scoring 70% and more in technical) shall be

opened in the presence of the consultants’ representatives, choosen to attend in the meeting. The name of the consultant, the quality scores and the proposed prices shall be

read out and recorded. The client shall prepare minutes of bid opening.

10.2 Evaluation:

The evaluation committee will determine if the financial proposals are complete and without

computational errors. Arithmetical errors will be corrected. The client will select the consultant submitting the lowest financial proposal (Fm) from among those, who have been qualified in the technical evaluation and invite it for negotiations as indicated below.

11. Negotiations

11.1 Prior to the expiry period of proposal validity, the Client will notify the selected Consultant

in writing by registered letter, or facsimile or e-mail and invite it to negotiate the Contract.

11.2 Negotiations will commence with a discussion of the technical proposal, the proposed methodology (work plan), staffing and any suggestions the consultant made to improve the TORs. Agreement must then be reached on the final TORs, the staffing and staff months,

logistics and reporting. Special attention will be paid to optimize the required outputs from the Consultants and to define clearly the inputs required from the Client to ensure

satisfactory implementation of the Assignment. 11.3 Having selected Consultants, among other things, on the basis of an evaluation of proposed

key professional staff, the Client expects to negotiate a contract on the basis these staff named in the proposal and, prior to contract negotiations, will require assurance that these

staff will be actually available. The Client will not consider substitutions during contract negotiations except in cases of unexpected delays in the starting date or incapacity of key professional staff for reasons of health.

11.4 Changes agreed upon in the negotiations will then be reflected in the draft contract, using

proposed unit rates.

11.5 The negotiations will be concluded with a review of the draft form of Contract. The Client and the Consultants will finalize the contract to conclude negotiation. (no negotiation of the unit rates, including the man month rates).

11.6 The Contract will be awarded after successful negotiations, with the selected Consultant. If

negotiations fail, the Client will invite the Consultants having obtained the second highest score to Contract negotiations on Lowest quoted value. Upon successful completion, the Client will promptly inform the other Consultants that their proposals have not been

selected.

12. Please note that the office of CEO, OSDA is not bound to select any of the firms submitting proposals.

SECTION 3: TECHNICAL PROPOSAL

TECHNICAL PROPOSAL SUBMISSION FORM

[Location, Date]

To: [Name and address of Client]

Dear Sirs:

We, the undersigned, offer to provide the consulting services for [Insert title of assignment] in accordance

with your Request for Proposal dated [Insert Date] and our Proposal. We are hereby submitting our

Proposal, which includes this Technical Proposal, and a Financial Proposal sealed under a separate

envelope.

We are submitting our Proposal as a single proposal without any joint venture arangement.

We hereby declare that all the information and statements made in this Proposal are true and accept that

any misinterpretation contained in it may lead to our disqualification.

If negotiations are held during the period of validity of the Proposal, i.e., before the date indicated in

Paragraph 8 of Instruction to Consultants (ITC), we undertake to negotiate on the basis of the proposed

staff. Our Proposal is binding upon us and subject to the modifications resulting from Contract

negotiations.

We undertake, if our Proposal is accepted, to initiate the consulting services related to the assignment

not later than the date indicated in Paragraph 15 of ITC.

We understand you are not bound to accept any Proposal you receive.

We remain,

Yours sincerely,

Authorized Signature [In full and initials]:

Name and Title of Signatory:

Name of Firm:

Address:

FORM F-1 - ASSIGNMENTS OF SIMILAR NATURE SUCCESSFULLY

COMPLETED DURING LAST 3 YEARS

1. Brief Description of the Firm/Organization:

2. Outline of recent experience on assignments of similar nature:

Sl.No. Name of

assign-

ment

Name of

/Project/Of

fice.

Owner or

sponsoring

authority

Cost of

assign-

ment

Date of

commenceme

nt

Date of

completio

n

Was

assign-

ment

satisfac-

torily

complet

ed

1 2 3 4 5 6 7 8

Note: Please attach certificates from the employer by way of documentary proof. (Issued by the Officer of

rank not below the rank of Class-II Rank .)

TECHNICAL PROPOSAL FORM F2

COMMENTS AND SUGGESTIONS ON THE TERMS OF REFERENCE AND ON COUNTERPART

STAFF AND FACILITIES TO BE PROVIDED BY THE CLIENT

A - On the Terms of Reference

[Present and justify here any modifications or improvement to the Terms of Reference you are proposing to

improve performance in carrying out the assignment (such as deleting some activity you consider unnecessary,

or adding another, or proposing a different phasing of the activities). Such suggestions should be concise and to

the point, and incorporated in your Proposal.]

TECHNICAL PROPOSAL -FORM F-3

METHODOLOGY AND WORK PLAN TIME SCHEDULE

A. A short note on the line of approach and methodology outlining various steps for performing the study.

B. Work plan

SL.

No.

Item Monthwise Program

1 2 3 4 5 6 7 8 9 10 11 12

C. Compilation and submission of reports

Serial No Name of the Report Date of proposed submission

1 Detailed Work plan

2 Draft report (for discussion)

3 Final report

Amend details as appropriate

TECHNICAL PROPOSAL-FORM NO.F-4

Composition of the Team Personnel and the task which would be assigned to each

Team Member

1. FCA/ACA (Team Leader)

Sl.No. Name Position Task assignment

2. Support Staff:

Sl.No. Name Position Task assignment

TECHNICAL PROPOSAL - FORM F-5

FORMAT OF CURRICULUM VITAE

FOR MEMBERS OF CONSULTANT'S TEAM

1. Name:

2. Profession/

Present Designation:

3. Years with Firm/Organization: Nationality:

4. Area of Specialization:

5. Proposed Position on Team:

6. Key Qualifications:

(Under this heading, give outline of staff member's experience and training most pertinent to assigned

work on proposed team. Describe degree of responsibility held by staff member on relevant previous

assignments and give dates and locations. Use up to half-a-page.)

7. Education:

(Under this heading, summarize college/university and other specialized education of staff member,

giving names of schools/colleges, etc., dates attended and degrees obtained. Use up to a quarter page.)

8. Experience:

(Under this heading, list all positions held by staff member since graduation, giving dates, names of

employing organization, title of positions held and location of assignments. For experience in last ten

years, also give types of activities performed and client references, where appropriate. Use up to three

quarters of a page.)

9. Languages:

(Indicate proficiency in speaking, reading and writing of each language by 'excellent', 'good' or 'poor'.)

Signature of Staff Member Date:

TECHNICAL PROPOSAL FORM F-6

WORK PROGRAM AND TIME SCHEDULE FOR KEY PERSONNEL

MONTHS

Name Position Months Total

Number

of

Man

1 2 3 4 5 6 7 8 9 10 11 12

TOTAL

Field Full Time Part time ………………

Activities Duration Total …………………….

FINANCIAL PROPOSAL

- FINANCIAL PROPOSAL SUBMISSION FORM

[Location, Date]

To: [Name and address of Client]

Dear Sirs:

We, the undersigned, offer to provide the consulting services for [Insert title of assignment] in accordance

with your Request for Proposal dated [Insert Date] and our Technical Proposal. Our attached Financial

Proposal is for the sum of [Insert amount(s) in words and figures]. inclusive of all taxes..

Our Financial Proposal shall be binding upon us subject to the modifications resulting from Contract

negotiations, up to expiration of the validity period of the Proposal, i.e. before the date indicated in

Paragraph 8 of ITC.

We hereby certify that we have taken steps to ensure that no person acting for us or on our behalf will

engage in bribery.

We undertake that, in competing for (and, if the award is made to us, in executing) the above contract, we

will strictly observe the laws against fraud and corruption in force in India namely “Prevention of

Corruption Act, 1988”.

Commissions and gratuities paid or to be paid by us to agents relating to this Proposal and Contract

execution, if we are awarded the Contract, are listed below1:

Name and Address Amount and Purpose of Commission

of Agents Currency or Gratuity

We understand you are not bound to accept any Proposal you receive.

We remain,

Yours sincerely,

Authorized Signature [In full and initials]:

Name and Title of Signatory:

Name of Firm: ____________________________________________________

Address: _________________________________________________________ _____________________________________________________________________________________________________

1 If applicable, replace this paragraph with: “No commissions or gratuities have been or are to paid by us to agents relating to this Proposal and

Contract execution.”

FINANCIAL PROPOSAL – FORM F 7

COST ESTIMATE OF SERVICES

Remuneration of Staff

Staff Name Daily (Monthly)

Rate in Rupees

Working Days

Total Cost

In Rupees

a) Team Leader

b)

c)

d)

e)

Sub Total Staff

Cost

Out-of-Pocket Expenses:

Item Rate per unit (specify) No of units Cost

Per diem for staff*

Air travel

Local transportation

Others (specify)@

Sub total

Summary

Sub total -staff Rs

Sub total- Out of Pocket expenses Rs

Consultancy services tax Rs

Grand total Rs

* per diem is fixed per calendar day

@ to include reporting costs, communication, office expenses, porterage ,in-out expenses, airport taxes

and such other travel related expences as appilicable

ODISHA SKILL DEVELOPMENT AUTHORITY(OSDA)

TERMS OF REFERENCE FOR ENGAGEMENT OF CA FIRM AS EXTERNAL/STATUTORY AUDITOR

INTRODUCTION: Odisha Skill Development Authority is a Society registered under the Societies Registration Act, 1860 under the aegis of Skill Development and Technical Education Department, Government of Odisha which has been established to guide, implement, coordinate and oversee all skill development programs in the state. OSDA works with an overarching mission to bring transformative human development through skilling of youth and making Skilled-in-Odisha a Global Brand. OSDA is implementing/managing different government skill development programmes like Prime Minister Kaushal Vikash Yojana(PMKVY) sponsored by National Skill Development Corporation (NSDC), Government of India , Placement Linked Training Programme(PLTP) sponsored by Government of Odisha, Pradhan Mantri Kaushal Kendra (PMKK) set up by NSDC and an Externally Aided Programme- Odisha Skill Development Project in which Government of Odisha aims at transferring the skill development education to world standard skill education by establishing the World Skill Centre at Bhubaneswar. OBJECTIVES: The Objective of the OSDA are:

• Draw up a Skill Vision for the state for 2030.

• Take all possible steps to meet skilling targets as envisaged in Chief Minister’s Employment Generation Programme (CMEGP) and broader policy of the state from time to time.

• Set up the World Skills Centre at Bhubaneswar as a global institution of repute.

• Make Odisha a leading participant at every World Skills Competition.

• Be the nodal agency for all skill development and entrepreneurship programmes in the State.

• Coordinate and harmonize the approach to skill development among various departments of the Government of Odisha in collaboration with concerned ministries of the Government of India and related organisations like the National Skill Development Corporation (NSDC).

• To create a corpus and raise extra-budgetary resources for skill development from various sources such as international agencies, including multi-lateral agencies, and CSR funds from private sector and public sector.

• Assess and evaluate existing skill development schemes with a view to determine their efficacy and suggest corrective actions to make them more effective.

• Ensure that the skilling needs of the disadvantaged and the socio-economically marginalized groups are taken care of.

• Design, develop, execute policies and programmes and all things necessary to achieve the aforesaid objectives.

SCOPE OF WORK:

• In corporation of opening balance of different schemes from the previous years.

• Checking of receipt & payment , Books of Account, reconciliation statement etc in the said year.

• While checking the cash & bank balance, it should be ensured that balances as per manual cash book if any, balance as per computerised cash & Bank book and balance as per trial balance should be tallied. Necessary suggestion may be incorporated.

• Verification towards compliances of statutory matters (like: TDS, GST, Deposit of Treasury Challan, PF etc) and providing suggestion thereof if any.

• Sample vouching of transactions specially its propriety.

• Checking of prior period expenditure, receipt and prepaid expenditure and necessary adjustment to the account.

• Checking up grant received from central and state govt. and its utilisation.

• Checking up various receivable and payable and accounting thereof including adjustment as required.

• Reflection of grant received under different schemes and therein utilisation in the balance sheet.

• An examination and verification of all transactions of OSDA component wise of all units like: Grant-in-aid, and different scheme implemented in the said year.

• Checking of Fund Management and accrued interest thereon.

• Ensuring the calculation of depreciation of fixed assets of opening balance and addition during the year as per the accounting standard.

• Checking up compliances of internal audit report, statutory audit report, AG audit report if any for the preceding financial year.

• Ensure all subsidiary accounts, such as fixed assets registers, advance registers, payment registers, cheque issue register, etc., are maintained and updated on daily basis.

• Checking of Advance accounts with classifications of advances.

• Checking of store materials receipt/issued/utilised and balance thereof and must be reflected in the accounting book.

• Suggestion on fund management.

• Verification of Assets & Liabilities of the OSDA

• Consolidation of Accounts of all the Schemes and get the Consolidated Annual Financial Statements.

• Verification of Bank Reconciliation Statements.

• Reporting of relevant accounting & auditing standards in Audit Report based on the Consolidated AFS.

• A” Note on Account” to be prepared by the auditor along with the Audit Report

• Status of implementation of Financial Management Action Plan (FMAP) mentioned in the PAM of ADB Loan Agreement.

• Incorporation of accounting standards and auditing standards prescribed by the ICAI in the 288OSDA audit report.

• Any other scope of work as required by the sponsoring agencies as their requirement.

Suggested Procurement audit check list related to Goods/Works

Once contracts for goods/works have been selected for detailed audit review the following check list may be

followed:

1) Date of audit.

2) Procurement by State/District/any other organization receiving OSDA funds.

3) Description of items procured, quantity and estimated value.

4) Whether procedure laid down in the OGFR/relevant Guidelines was observed while procuring goods and

works?

5) If not, any other, justification was available?

6) Whether bid was advertised/placed in public domain?

7) Whether sufficient time was given to bidders for preparing and submitting the bids?

8) Whether the bids were opened at the notified time in the presence of bidders?

9) Whether the bids were evaluated in terms of the provisions of the bid documents and the evaluation report

was available?

10) Whether contract was awarded to the lowest evaluated responsive bidder fulfilling the qualification

requirements indicated in the tender document?

11) Whether the contract was awarded within original bid validity period?

12) Whether the signed copy of the contract/purchase order was available?

13) Whether articles received/work completed in time?

14) Whether payment released timely to the supplier/contractor or valid reasons for delay?

15) Whether the assets procured are accounted for?

16) Whether any complaint was received regarding the procurement and was addressed?

17) Whether procurement related complaint handling mechanism as envisaged is available?

18) Whether any procurement related irregularities reported in the previous audit report have been complied

with?

19) Whether Performance Security was Sought?

Procurement audit check list related to Service Contract

Once service contracts have been selected for detailed audit review the following check list may be followed:

1) Date of audit

2) Procurement by State/District/any other organization receiving OSDA funds

3) Whether the Terms of Reference covering the scope of work, time schedule, out put required, etc were

prepared?

4) Whether the Expressions of Interest were checked against advertisement and short list of service

providers/consultants prepared?

5) Whether the Request for Proposals (REPs) were issued to short listed service providers/consultants?

6) Whether sufficient time was given to service providers/consultants for preparing and submitting the

proposals?

7) Whether the proposals were invited in two separate envelopes, one containing technical and another for

financial proposals?

8) Whether the evaluation was done in two stages, first the evaluation of technical proposals and then

opening of the financial proposals of only technically qualified service providers/consultants and reports

are available thereof?

9) Whether the contract was awarded within the validity period of the original proposal?

10) Whether the signed copy of the contract was available?

11) Whether the services were completed within the prescribed time limit or valid reasons for delayed

completion?

12) Whether payment was released timely to the service providers/consultants or valid reasons for delay?

13) In the case of single source selection, if there was justification for the purpose?

14) Whether any complaint was received regarding the procurement and was addressed?

15) Whether procurement related complaint handling mechanism as envisaged is available?

16) Whether any procurement related irregularities reported in the previous audit report have been complied

with?

Terms of Reference For

Statutory Audit of Odisha Skill Development Project Background: ADB provides assistance in the form of Loan for the implementation of Odisha Skill Development project. implemented by the Odisha Skill Development Authority , the executing agency identified by the central/state government. Government of Odisha provides counter part share as per the Loan Agreement for this Project also. In order to facilitate the same, a loan agreement is executed between ADB and central government for this loan vide Loan No 3539- IND and a project agreement is executed between ADB and the executing agency for this project. The disbursement of loan is governed by the ADB Loan Disbursement Handbook which provides for various disbursement procedures viz, Direct payment procedure, Reimbursement procedure, Commitment Letter procedure and Imprest Account procedure. The project agreement stipulates that the executing agency shall (i) maintain separate accounts for the project and if the executing agency is revenue earning, then for its overall operations also (ii) have such accounts and related financial statements1 (balance sheet, statement of income and expenses and related statements) audited annually, in accordance with appropriate auditing standards consistently applied, by independent auditors whose qualifications, experience and terms of reference are acceptable to ADB; and (iii) furnish to ADB, promptly after their preparation but in any event not later than six (6) months (or 9 months if specifically approved) after the close of the fiscal year to which they relate as applicable, certified copies of such audited accounts and financial statements and the report of the auditor relating thereto (including the auditor's opinion on the use of loan proceeds and compliance with the covenants of the loan/grant agreement as well as on the use of the procedures for Imprest Account, Statement of expenditures (SOE) where applicable, all in the English language. The executing agencies for all sovereign loans are subject to audit by the Comptroller and Auditor General of India (Supreme Audit Institution of the country). In order to comply with the requirement of audit as referred in above para, the following terms of reference should be pursued with respect to the loan/project agreement executed for availing the ADB's assistance. Objective: Article 14(xi) of the Agreement establishing the Asian Development Bank (The Charter) States that 'Proceeds of any loan made, guaranteed, or participated by the Bank are used only for the purposes for which the loan was granted and with due attention to consideration of economy and efficiency'. In addition, Article 14(xiv) of the Charter requires ADB to be guided by sound banking principles in its operations. To fulfill the requirements of Article 14 (xi) and (xiv) of the Charter, ADB requires borrowers/project executing agencies to submit audited Project accounts (APA) and audited financial statements (AFS). ADB requires the borrower and project EA to have the required financial statements for each year audited by an independent auditor acceptable to ADB, and in accordance with standard son auditing that are acceptable to ADB. An audit of such financial 'statements includes: (i) an assessment of the adequacy of accounting and internal control systems with respect to project expenditures and other

1 Preparation of balance sheet, statement of income and expenditure shall depend on the legal status of the project

executing/implementing agency and shall apply to autonomous bodies or corporation until extended legally to other types of organization such as government departments.

financial transactions, and to ensure safe custody of project financed assets, (ii) a determination as to whether the borrower and project implementing entities have maintained adequate documentation on all relevant transactions, including statement of expenditures (SOE), Force Account Works and Simultaneous Application for sub-loan approval and Withdrawal (SAW)) where applicable, (iii) confirmation that expenditures submitted to ADB are eligible for financing and identification of any ineligible expenditures, (iv) compliance with loan covenants and ADB's requirements for project management and (v) compliance with the use of procedures for Imprest Account (IA)/Second Generation Imprest Account (SGIA)/SOE/force account works/SAW, where applicable. The objective of the audit of the Project Financial Statement (PES) is to enable the auditor to express a professional opinion as to whether (i) the PFS present fairly, in all material respects, the sources and applications of project funds for the period under audit examination, (ii) the funds were utilized for the purposes for which they were provided, (iii) loan covenants have been complied with and (iv) expenditures shown in the PFS are eligible for financing under the relevant loan/grant agreement. In addition, where applicable, the auditor will express a professional opinion on the use of the procedures for IA, SGIA, SOE, Force Account Works and SAW and whether adequate supporting documentation has been maintained to support claims made by project management for reimbursement of expenditures incurred under the SOE, Force Account Works and SAW method of reimbursement where applicable. The books of account that provide the basis for preparation of the PFS are established tore flect the financial transactions of the project and are maintained by the Odisha Skill Development Authority for Odisha Skill Development Project Implementation unit and the participating divisions. Standards: The audit will be carried out in accordance with the Auditing Standards promulgated by the Comptroller and Auditor General 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 loan/grant proceeds for purposes other than as defined in the legal agreements remain with the borrower, the audit should be planned so as to have a reasonable assurance of detecting material misstatements in the PFS. Scope:2 In conducting the audit, special attention should be paid to the following:

(a) 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 Loan Agreement, the Project Agreement, and the Minutes of Negotiations;

(b) Counterpart funds from Government of Odisha have been provided and used in accordance with the relevant legal agreements and only for the purposes for which they were provided;

(c) Financial covenants of the loan agreement have been complied with

2 In response to identified project risks, the scope may be expanded to include a report or the expression of an opinion on specif ic

aspects of the operation such as internal controls, compliance with Bank procurement policies, or efficiency and effectiveness in the use of loan/grant proceeds.

(d) All necessary supporting documents, records, and accounts have been kept in respect of all project transactions including expenditures reported via SOEs/lAS/SGIAs/Force Account Works/SAW where applicable. Clear linkages should exist between the books of account and reports presented to the ADB; and

(e) The project accounts have been prepared in accordance with consistently applied Government Accounting Standards3 and present fairly, in all material aspects, the financial situation of the project at the year end and of resources and expenditures for the year ended on that date.

Project Financial Statements: The Project Financial Statement (PFS) has to be prepared for Odisha Skill Development Project. It may be required to prepare the entity (OSDA) PFS and get it audited. The contents of Project Financial Statements (PFS) are specific to the sector, the project design and the type of implementing entity. These formats therefore vary from one project to another. The formats of PFS are prepared in consultation with the implementing entity during the preparation of the project. The Project Financial Statements should include:

A. In a nonrevenue-earning entity, or for the audit of project accounts, the annual financial statement may consist of the Statement of Receipts and Payments on project transactions. Other schedules of value or cumulative expenditures by category such as civil works, equipment, consultancy services, training and capacity building, administrative costs, expenditure by financier, statement of disbursement under SOE procedure, imprest account, cumulative work-in-progress, assets and inventories and a summarized reconciled bank statement are to be attached. See Annexure 1-8 for examples of reporting formats that could be prepared for a project implemented by core government departments.

B. For a revenue-earning entity, a balance sheet, income statement and cash flow statement accompanied by supplementary statements or schedules supporting the basic statement (e.g., inventories, schedule of assets, outstanding loans, aging of receivables, etc:).

C. Statement of Disbursement: The PFS include a reconciliation between expenditure reported as per the statement of sources and application of funds and expenditure claimed from ADB through SOE, documented claims (direct payment and reimbursement), commitment letter procedure, force account works or SAW where applicable. An example is shown at Annexure 3.

D. Other statements or schedules as may be applicable in particular circumstances and as specified in the relevant loan/grant agreements. In particular, Statement of Appropriation Vs. Actual (Annexure 9) and Statement of Expenditure by Output (Annexure 10) shall be prepared and prepared to the project financial statements. These statements shall not be subject to audit.

3 Until such time as the pronouncements of the Government Accounting Standards Advisory Board are accepted and prescribed by the

Ministry of Finance, the Accounting Standards followed by the Government of India will be defined by the General Financial Rules, PWD codes; Treasury codes and similar financial rules and codes as are in effect and applicable to the operations of the project.

E. Management Assertion: Management should sign the PFS and provide a written acknowledgement of its responsibility for the preparation and fair presentation of the financial statements and an assertion that project funds have been expended in accordance with the intended purposes as reflected in the financial statements. An example of a management assertion letter is shown at Annexure 11.

Statement of Expenditure (SOE), Imprest Account (IA), and Withdrawal: During the course of the audit of the PFS, the auditor is required to audit all SOE, IA, and for withdrawal applications made during the period under audit examination. 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 project eligibility by reference to the relevant financing agreements. Where ineligible expenditures4 are identified as having been included in withdrawal applications and reimbursed against, these should be separately noted by the auditor. Audit Report An audit report on the PFS should be prepared in accordance with the Auditing Standardspromulgated by the Comptroller and Auditor General of India. Those standards require an auditopinion 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, (a) loan proceeds have been used as covenanted in ADB Loan / Project Agreement (b) financial covenants of loans have been complied with (c) with respect to SOEs, Force Account Works and SAW, where applicable, adequate supporting documentation has been maintained to support claims to ADB for reimbursement of expenditures incurred; and (d) except for ineligible expenditures as detailed in the audit observations, if any, appended to the audit report, expenditures are eligible for financing under the Loan/Grant Agreement. Relevant CAG Auditing Standards are reproduced in Annexure 12. A sample audit report wordings for unqualified opinion in shown at Annexure 13. The PFS and the audit report should be received by ADB not later than six (6) months (or9 months if specifically approved) after the close of the fiscal year to which they relate as specified in the loan/project agreement. The auditor should also submit two copies of the audited accounts and audit report to the Implementing Agency. The audit report is issued without prejudice to CAG's right to incorporate the audit observations in the Report of CAG of India for being laid before Parliament / State or UT Legislature. Management Letter In addition to the audit report on the PFS, 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. Where such a management letter is prepared by the auditor, a copy of the same will be supplied to ADB. Else, a written advice may be made that no management letter was prepared together with the audit report on the PFS. General The auditor should be given access to any information relevant for the purposes of conducting the audit. This would normally include all legal documents, correspondence, and any other information associated with the project and deemed necessary by the auditor. The information made available by the auditor should include, but not be limited to, copies of ADB's project appraisal document, the relevant legal agreements, a copy of these guidelines and a copy of ADB's financial management assessment of the project entity. It is highly desirable that the auditor become familiar with other ADB policy document

4 Refer to ADB's Operation Manual (OM) Section H3 and Safeguard Policy Statement

such as ADB guidelines on financial management and analysis of projects chapter 5 title reporting and auditing, PAI 5.07 on submission of audited project accounts and financial statements, OM section J7/BP on project accounting, financial reporting and auditing. The auditor should also be familiar with ADB's Loan Disbursement Handbook – July 2012 (or as amended from time to time).

Annexure 1

Name of the Executing Agency Name of the Implementing Agency

Name of the Project Loan/Grant No.

STATEMENT OF RECEIPTS AND PAYMENTS

REPORT FOR THE YEAR/PERIOD ENDED XX, XXXX

in (INR) ‘000

Particulars Note Reference

During the

Current Year

During the

Previous Year

Cumulative Project to

Date

for 12 month period

for 12 month period

As at [end of

CURRENT year]

Opening balance1 (A)

Receipts Funds received from Government2 ADB Loan3 ADB Grant3 Co-financier 1 Co-financier 2 Beneficiary contribution (if any) Other receipts such as interest income, sale from disposals of fixed assets, etc.

4 6 6 7 8 9

10

Total Receipts (B)

Total (C = A + B)

Payments

Investment Costs4 Civil Works Mechanical and Equipment Environment and Social Mitigation Consultants a. Project Management b. Capacity Development Others

11

Subtotal (D)

Recurrent Costs Salaries Accommodation Equipment Operation and Maintenance Others

12

Subtotal (E)

Total Payments

Financing Charges During Implementation (F)

13

Total Project Cost (G = D + E + F)

Closing Balance (C – G)

Annexure 1

1 If cash balance are controlled by the entity, indicating cash balance, imprest account and SGIA balance separately 2 These will include external assistance received by Government for the project. 3This shall include amounts received in the Bank Account as well as amounts deemed to be received against direct payments made by ADB to the suppliers of goods and services under Direct Payment procedure and Commitment Letter procedure 4 Expenditure categories are based on the cost allocation table as per Loan/Grant Agreement Notes 1 to x of the financial statements form an integral part of these financial statements

Annexure 2

Name of the Executing Agency Name of the Implementing Agency

Name of the Project Loan/Grant No.

STATEMENT OF EXPENDITURE BY CATEGORY AND FINANCIER

REPORT FOR THE YEAR/PERIOD ENDED XX, XXXX in (INR) ‘000

Particulars

ADB4 Co-Financier Government

Total Expenditure

8

Percentage of

financing1 1

Actual Expenditure

Actual Expenditure

Actual Expenditure

Amount 2

% 3

Amount 4

% 5

Amount 6

% 7

Investment Costs2 Civil Works Mechanical and Equipment Environment and Social Mitigation Consultants a. Project Management b. Capacity Development c. Others

Subtotal (A)

Recurrent Costs Salaries Accommodations Equipment Operations and Maintenance Others

Subtotal (B)

Total Cost (C=A+B)3

%Total Project Cost

Annexure 2

Total Project Cost for [insert prior year period]

1The financing percentages for ADB funds should directly correlate to the financing percentages in the allocation table(s) of the financing agreement(s). 2 Expenditure categories are based on the cost allocation table as per Loan/Grant Agreement 3 The figures shown against various categories of expenditure should agree with the current year's payment in Annexure 1, Statement of Receipts and Payments. 4 This shall include total expenditure claimed from ADB under various disbursement procedures, i.e. direct payment, reimbursement, imprest account and commitment letter.

Notes 1 to x of the financial statements form an integral part of these financial statements

Annexure 3

Name of the Executing Agency Name of the Implementing Agency

[NAME OF THE ENTITY/PROJECT] Loan/Grant No. FOR THE YEAR ENDED [YEAR END DATE]

Statement of Disbursement

Details of the disbursement by method are given below: in (INR) ‘000

Statement of Disbursement Note

Current

Year Prior Year

Cumulative Project to Date

ADB Fund claimed during the year

Reimbursement3 Imprest Fund3 Direct Payment Commitment Letter

6.1 6.2 6.3 6.4

10 10 10 10

Subtotal (A) 40

Total Expenditure made during the year1

Less: Expenditure not yet claimed Borrower’s share2

(B)

(C) (D)

Total Eligible Expenditure claimed (B – C – D = E = A) (E)

1 The total expenditure as per Statement of Receipts and Payments. 2 This should tally with the Government share included in Statement of Expenditure by category and financier (Column 6) 3 Includes both claims using SOE and full supporting documentation Notes 1 to x of the financial statements form an integral part of these financial statements

Annexure 4

Page 1 of 3

[NAME OF THE COUNTRY/IMPLEMENTING AND EXECUTING AGENCY] [NAME OF THE ENTITY/PROJECT] [ADB LOAN REFERENCE] NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED [YEAR END DATE] 1. Project Nature and Activities 1.1 Description of the Project, the nature of activities, commencement and expected

completion dates. Mention location, domicile, legal form, controlling IA/ EA, brief nature of the project outputs,

1.2 Give legislative framework

Insert as relevant 2. STATEMENT OF COMPLIANCE

These financial statements have been prepared in accordance with approved

accounting standards, as applicable in India. This refers to the cash basis of accounting

applied with due regard to the General Financial Rules, PWD Codes, Treasury Codes,

and similar financial rules and codes as are in effect and applicable to the operations

of the Project.

3. SIGNIFICANT ACCOUNTING POLICIES

3.1 Financial Statements

This comprises of the Statement of Receipts and Payments, the Statements of

Expenditure by Category and Financier, the Statement of Disbursement and related

notes and appendices to the financial statements

3.2 Basis of measurement

Financial statements have been prepared under the historical cost convention and on

[cash/ accrual] basis of accounting

3.3 Changes in Accounting policies

Describe changes in accounting policies, if any

Annexure 4

Page 2 of 3

3.4 Fund Flow mechanism

Describe the fund flow mechanism, in particular, whether the IA/EA control funds or

whether all payments are centralized

3.5 Advances and other receivables

Describe treatment of advances against expenditures

3.6 Cash and cash equivalents

Cash equivalents comprise [define components of cash]. Explain if the entity controls unspent advances, only petty cash, or has a nil balance, as applicable

3.7 Accrued and other liabilities

Disclose any major liabilities which have not been accrued under the cash basis policy

3.8 Income

i) Describe nature of different types of income and how they are recognised. For

example grants, sale of proceeds of fixed assets, interest income on bank accounts etc.

ii) [Include if applicable] Free of cost office space, electricity and certain other services provided by {insert name] are not valued and accordingly, are not recognized in these financial statements as income of the Project.

3.9 Foreign currency transactions and translation

(a) Functional and presentation currency

Items included in the financial statements of the Project are measured using the

currency of the primary economic environment in which the entity operates (the

functional currency), which is the Indian Rupee (INR).

Annexure 4

Page 3 of 3

(b) Transactions and balances

Transactions in foreign currency are converted at the exchange rate prevailing at the date of transaction. Foreign currency bank balances are re-stated at the year end rate, and the resulting gains/losses are recognized in the statement of receipts and payments account. Conversion Rate: USD $ 1 = INR ___ as of 31 March ____

3.10 Allocation of Common Costs

Describe how common costs are allocated to different output/activities

3.11 Interest Expenses and Financial Charges

Describe how financial charges are treated and recorded. For example if these are not allocated to the Project by the CAA.

4. Funds Received from the Government

Give details of the government budgeting and funding mechanism

in (INR) ‘000

Current Year

Prior Year

Cumulative Year to

date

Government Counterpart funding Amount Reimbursable to Government

_________________________________

Total ==============================

Annexure 4

Page 4 of 3

5. DATE OF AUTHORIZATION

These financial statements have been authorized for issue by the _________________ of _________________ on ………………………..

Annexure 5

Name of the Executing Agency

Name of the Implementing Agency [NAME OF THE ENTITY/PROJECT] Loan/Grant No. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED [YEAR END DATE] 6. Funds Received from ADB

Give key terms and conditions of the loan, including date of loan agreement, loan effectiveness date, key terms and conditions, disbursement schedule, commitment fee and interest rates etc.

in (INR) ‘000

ADB Source of Funds – Method of Withdrawal

Note Referen

ce

During the

Current Year

During the

Previous Year

Cumulative

Project to

Date

ADB Loan

- By Reimbursement Method 6.1 - By Imprest Account1 6.2

- By Direct Payment 6.3

- By Commitment Procedure 6.4

ADB Loan Total

ADB Grant ADB Loan and Grant Total

1 This should agree with the advances/replenishments net of refunds in Statement 6.2. 6.1 Funds Received from ADB through Reimbursement Method

Give details, if necessary

Annexure 6

Name of the Executing Agency Name of the Implementing Agency

[NAME OF THE ENTITY/PROJECT] Loan/Grant No. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED [YEAR END DATE] 6.2 Reconciliation of the Imprest Account and the Bank Statement is given below

STATEMENT OF IMPREST ACCOUNT

FOR THE YEAR/PERIOD ENDED XX, XXXX.

in (INR) ‘000

Prior Year

Current Year

Balance brought forward from previous period 100 140 Add:

Advance1 200 200 Replenishment received during the

year/period1

Interest Earned 10 10

Subtotal (A) 310 350

Deduct: Payments made during the year/period 150 150

Replenishment /Liquidation1 50 Expenditure yet to be claimed 100

Amount refunded during the year/period 20 20

Closing Balance (B)

140

180

As per bank statement (copy attached) 140 180

1 Withdrawal application-wise references required

Annexure 6

6.2.1 The US $ equivalent notational amount held at the RBI in respect of the above

Imprest Account balance is __________ US $ (bank statement attached)

6.3 Details of Payments made directly by ADB are given below

(Add relevant details here) 6.4 Details of payments made through commitment procedure

(Add relevant details here) 6.5 Details of Grants

(Give relevant details for grants)

Annexure 7

Name of the Executing Agency Name of the Implementing Agency

[NAME OF THE ENTITY/PROJECT] Loan/Grant No. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED [YEAR TO DATE] 6.6 Details of disbursement claimed under the Statement of Expenditure (SOE) Procedure are given below

DISBURSEMENT CLAIMED UNDER STATEMENT OF EXPENDITURE (SOE) PROCEDURE FOR THE YEAR/PERIOD ENDED XX, XXXX

in (INR) ‘000

W/A No.

SOE Sheet

No. 2

Category 3

Total

Amount Paid

4

ADB

Financing %1

5

Net Eligible Expense 6 (4x5)

Amount Reimbursed

7

Imprest Fund

Replenished/ Liquidated

8

Total Disbursement

Using SOE Procedure 7 + 8 = 9

00001

00002

00005

1 2 1 2 3 1 2

Civil Works Mechanical and Equipment Consultants Salaries

Accommodation

100 80% 80 60 20 80

Annexure 7

Environment and Social

Mitigation

Equipment Operation and

Maintenance

Total

Total for [prior year]

1The financing percentages within the table for ADB funds are as per loan agreement Schedule 3.

Annexure 8

Name of the Executing Agency Name of the Implementing Agency

[NAME OF THE ENTITY/PROJECT] Loan/Grant No. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED [YEAR END DATE]

in (INR) ‘000

Current

Year

Prior Year

Cumulative Project to

Date

7 – 13

If any of the amounts given on the Statements of Receipts and Payments require further detail or Break-down, provide this here against relevant Note

Annexure 9

Name of the Executing Agency Name of the Implementing Agency

Name of the Project Loan/Grant No.

STATEMENT OF APPROPRIATION VS. ACTUAL

For the current year ended 20xx For the Prior year ended 20xx Cumulative from [beginning of Project] to year to date

Cost Categories

Budgeted

Expenditures

Actual Expenditures

Utilization

Percentage

Variance

Budgeted Expenditu

res

Actual Expendit

ures

Utilization

Percentage

Variance

Program Budgeted Expenditur

es

Actual Expenditures

Utilization

Percentage

Variance

INR ‘000

INR “000

% INR ‘000

INR ‘000 INR ‘000 % INR ‘000

INR ‘000 INR ‘000

% INR ‘000

Investment Costs

Civil Works

Mechanical and Equipment

Environment and Social Mitigation

Consultants a. Project Management b. Capacity Devleopment

Others

Subtotal

Recurrent Costs

Salaries

Accommodation

Equipment Operation and Maintenance

Others

Subtotal

Annexure 9

Total Payments

Financing Charges During Implementation

Total Project Cost

Grand total of expenditures in USD

Annexure 10

Name of the Executing Agency Name of the Implementing Agency

Name of the Project Loan/Grant No.

EXPENDITURE BY OUTPUT COMPONENTS

In INR ‘000

Unallocable common costs

Output 1 1 Output 2 Output 3 Total Expenditure

Prior Year

Current Year

Cum to

Date

Prior Year

Current Year

Cum to

Date

Prior Year

Current Year

Cum to

Date

PriorYear Current Year

Cum to

Date

Prior Year

Current Year

Cum to

Date

Investment Costs

Civil Works

Mechanical Equipment

Environmentand Social Mitigation

Consultants a. Project Management b. Capacity Development

Others

Subtotal (A)

Recurrent Costs

Salaries

Accommodation

Equipment Operation and Maintenance

Others

Subtotal (B)

Total Cost (C=A+B)

% Total Project Cost

Annexure 10

1 Allocate the expenditure to the different Project Output Components as per the Loan Agreement. Add as many columns as required. For common costs allocated, specify the sharing ratios in the note 3.10

Annexure 11

Example of a Management Assertion Letter

(Project Letterhead) (To Author) (Date) This assertion letter is provided in connection with your audit of the financial statement of the _________________ Project for the year ended __________. We acknowledge our responsibility for the fair presentation of the financial statements in accordance with the cash basis of accounting followed by the Government of India, and we confirm, to the best of our knowledge and belief, the following representations made to you during your audit:

▪ The project financial statements are free of material misstatements, including

omissions.

▪ Project funds have been used for the purposes for which they were provided.

▪ Project expenditures are eligible for financing under the Loan/Credit agreement.

▪ There have been no irregularities involving management or employees who have a

significant role in internal control or that could have a material effect on the project

financial statements.

▪ We have made available to you all books of account and supporting documentation

relation to the project.

▪ The project has complied with the conditions of all relevant legal agreements, including

the Financing Agreement, the Project Agreement, the Project Appraisal Document, the

Minutes of Negotiations, and the Borrower’s Project Implementation Plan.

(Project Director / Chief Executive Officer) (Chief Finance Officer / Senior Finance Officer)

Excerpt from CAG Auditing Standards (2nd Edition, 2002) Chapter IV, Reporting Standards 12. The form and content of audit option and report. 12.1 The form and content of all audit opinions and reports are founded on the

following general principles:

(a) Title. The opinion or report should be preceeded by a suitable title or heading, helping the reader to distinguish it from statements and information issued by others.

(b) Signature and date. The opinion or report should be properly signed. The inclusion

of a date informs the reader that consideration has been given to the effect of events or transactions about which the auditor became aware up to that date (which, in the case of regularity (financial) audits, may be beyond the period of the financial statement).

(c) Objectives and scope. The opinion or report should include reference to the objectives and scope of the audit. This information establishes the purpose and boundaries of the audit.

(d) Completeness. Opinions should be appended to and published with the financial statements to which they relate, but performance reports may be free standing. The auditor’s opinions and reports should be presented as prepared by the auditor. In exercising its independence CAG may acquire information from time to time, which in the national interest cannot be freely disclosed. This can affect the completeness of the audit report. In this situation the auditor should consider the need to make a report, possibly including confidential or sensitive material in a separate, unpublished report.

(e) Addressee. The opinion or report should identify those to whom it is addressed, as required by the circumstances of the audit engagement and local regulations or practice. This is unnecessary where formal procedures exist for its delivery.

(f) Identification of subject matter. The opinion or report should identify the financial statements (in the case of regularity (financial) audits) or area (in the case of performance audits) to which it relates. This includes information such as the name of the audited entity, the date and period covered by the financial statements and the subject matter that has been audited.

(g) Legal basis. Audit opinions and reports should identify the legislation or other authority providing for the audit.

(h) Compliance with standards. Audit opinions and reports should indicate the auditing standards or practices followed in conducting the audit, thus providing the reader with an assurance that the audit has been carried out in accordance with generally accepted procedures.

(i) Timeliness. The audit opinion or report should be available promptly to be of greatest use to readers and users, particularly those who have to take necessary action.

Report of the Comptroller and Auditor General of India

To

(Project Implementing Authority)

Report on the Project Financial Statements

We have audited the accompanying financial statements of the __________ Project financed under Asian Development Bank Loan No. _____, which comprise the Statement of Receipts and Payments, the Statement of Expenditure by Category and Financier, the Statement of Disbursement5and related notes for the year ended _______.

OR

In case of PIA maintaining Balance Sheet balance sheet and statement of income and expenditure following pant may be substituted:

We have audited the accompanying financial statements alongwith Balance Sheet balance sheet, income and expenditure statement and Cash Flow Statement and related statements of the _________ Project financed under Asian Development Bank LoanNo.________ , for the year ended _________,

These statements are the responsibility of the Project's management. Our responsibility is to express an opinion on the accompanying financial statements based on our audit.

We conducted our audit in accordance with the Auditing Standards promulgated by the Comptroller and Auditor General of India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. Our audit examines, on a test basis, evidence supporting the amounts and disclosures in the financial statements. It also includes assessing the accounting principles used and significant estimates made by management, as well asevaluating the overall statement presentation. We believe that our audit provides areasonable basis for our opinion.

In our opinion, the financial statements present fairly, in all material respects, the sources and applications of funds of Project for the year ended [insert date] in accordance with Government of India accounting standards.6

In addition, in our opinion; (a) Proceeds of the loan from ADB have been utilized for the purposes as per

5 Insert titles of other required statements and schedules included in or annexed to the project financial statements, if any.

6 Until the Ministry of Finance prescribes adoption of the

accounting standards pronounced by GASAB or other body such as

IPSAS, the accounting standards followed by the Government of

India shall be the cash basis of accounting applied with due

regard to the General Financial Rules, PWD codes, Treasury

codes and similar financial rules and codes as are in effect

and applicable to the operations of the project.

ADB Loan / Project Agreement (b) Financial covenants in the loan agreement [name and number of loan] dated

[date of loan] have been complied with (c) (i)(a)With respect to SOEs, adequate supporting documentation has been

maintained to support claims to the Asian Development Bank for reimbursements of expenditures incurred; and (b) except for ineligible expenditures as detailed in the audit observations, if any, appended to this audit report, expenditures are eligible for financing under the Loan Agreement. (ii)(a)TheImprest Accounts give a true and fair view of the receipts collected and payments made during the year ended---; and (b) these receipts and payments support Imprest Account liquidations/replenishments during the year.

This report is issued without prejudice to CAG's right to incorporate the

auditobservations in the Report of CAG of India for being laid before Parliament/State or UT Legislature. [Auditor's Signature] [Auditor's Address] [Date7]

7 The report should be dated as of the date to which the auditor has became aware of and considered the effects

of events and transactions. This is generally the final date of fieldwork, as opposed to the date of signing the

audit report.

GENERAL CONDITION. 1. The Auditor shall prepare two separate audit Reports for OSDP (Project Audited

Financial Statement) and OSDA (Entity Audited Financial Statement) and submit the same to OSDA.

2. The engagement of firm will be done only after detailed scrutiny of the credentials of the Firms (CAG empanelled) , their competency, employees of the firm, firm status etc. Suitable weight age will be given to firms / organization, which has relevant experiences in doing such type of Audit in Odisha.

3. The Audit Firm will have to start to work within 10 days of the receipt of the letter of appointment from OSDA, Bhubaneswar

4. The Audit Accounts of OSDA as per the assigned work has to be completed in a time bound manner, which will not exceed more than one month. Completion of Audit shall include drafting and typing / printing of Audit report. No extra days will be allowed or No extra cost is to be paid for consumption of extra days beyond the above stipulation without showing convincing reason and obtaining specific prior approval /order of the undersigned for allowed for more days.

5. The Auditors will consist of sufficient number of experienced and qualified professionals.

6. The firm should complete the audit latest by 30th September 2020 and comply with the instruction if any issued by the OSDA relating to Audit.

7. Office of the OSDA will extend necessary co-operation to audit party. 8. The audit work to be undertaken as per Bye-Laws of OSDA & Loan Agreement

Signed with ADB for OSDP component. 9. No TA/DA expenses will be borne by OSDA for the CA firms undertaking audit

work and this will be met by the Audit Firms. 10. These are only proposed draft terms and conditions and can be modified at any

time by OSDA at its sole discretion. 11. Firm selected by OSDA shall have to give an undertaking to follow all ethics of

faith and the information provided by OSDA shall be kept strictly confidential. All assignments shall be carried out with due diligence maintaining quality of work done and in least possible time.

12. In case of any dispute, the decision of Chairperson, OSDA, Bhubaneswar shall be final and binding.

13. The payment of Audit Fees will be made as per fees quoted by the firm and found lowest in the competition. While quoting audit fees, the minimum fees prescribed by ICAI and the guidelines issued in this regard for audit of Government Societies may also be referred. The audit fees shall be paid only after completion of Audit Work and issue of Audit Report. Completion of Audit will be inclusive of conduct of audit, submission and discussion of report with the OSDA and the acceptance of Audit Report by the Sponsoring Agencies. OSDA will not pay any advance to the selected audit firm under any circumstances. Bill for Audit Fees along with bank details will be submitted to the office of OSDA, Bhubaneswar along with a certificate indicating that audit has been conducted as per guidelines framed by the OSDA and the work has been completed as per the agreed terms and conditions.

14. The payment of Application Money of Rs.2000/- shall be in shape of Demand Draft in favour of “Odisha Skill Development Authority” payable at Bhubaneswar.

SECTION 6-STANDARD FORM OF CONTRACT FOR

CONSULTING SERVICES

SMALL ASSIGNMENTS

LUMP-SUM PAYMENTS

CONTRACT

THIS CONTRACT (“Contract”) is entered into this [insert starting date of assignment], by

and between [insert Client’s name] (“the Client”) having its principal place of business at

[insert Client’s address], and [insert Consultant’s name] (“the Consultant”) having its

principal office located at [insert Consultant’s address].

WHEREAS, the Client wishes to have the Consultant perform the services hereinafter referred

to, and

WHEREAS, the Consultant is willing to perform these services,

NOW THEREFORE THE PARTIES hereby agree as follows:

1. Services (i) The Consultant shall perform the services specified in Annex A,

“Terms of Reference and Scope of Services,” which is made an

integral part of this Contract (“the Services”).

(ii) The Consultant shall provide the personnel listed in Annex B,

“Consultant’s Personnel,” to perform the Services.

(iii) The Consultant shall submit to the Client the reports in the form

and within the time periods specified in Annex C, “Consultant’s

Reporting Obligations.”

2. Term 2.1 The Consultant shall perform the Services during the period

commencing [insert starting date] and continuing through

[insert completion date], or any other period as may be

subsequently agreed by the parties in writing.

2.2 The Client may find it necessary to postpone or cancel the

assignment and /or shorten or extend its duration. In such case,

every effort will be made to give the consultant notice of any

changes. In the event of termination, the Consultants shall be

paid for the services rendered for carrying out the assignment to

the date of termination, and the Consultant will provide the

client with any reports or parts thereof, or any other information

and documentation gathered under this Agreement prior to the

date of termination.

3. Payment A. Ceiling

For Services rendered pursuant to Annex A, the Client shall pay

the Consultant an amount not to exceed [insert amount]. This

amount has been established based on the understanding that it

includes all of the Consultant's costs and profits as well as any

tax obligation that may be imposed on the Consultant.

B. Schedule of Payments

The schedule of payments is specified below8:

10% [insert amount in Rupees]* upon the Client's receipt of a

copy of this Contract signed by the Consultant and submission

of detailed work plan;

70% [insert amount in Rupees]* upon the Client's receipt of the

draft report, acceptable to the Client; and

20% [insert amount in Rupees]* upon the Client's receipt of the

final report, acceptable to the Client.

[insert amount]* Total

The above remuneration includes all the costs related to carrying

out the services, including overheads, and all taxes incurred on

the Consultant as per applicable law.

As the numbers of units is indicative, it is possible that this

may not be achieved as planned and falls short. In that event,

the payment shall be regulated based on the actual number

of units so required to be audited.

( modify as appropriate for each case)

C. Payment Conditions

Payment shall be made in Indian Rupees, no later than 30 days

following submission by the Consultant of invoices in duplicate

to the Coordinator designated in paragraph 4.

D. The Consultants shall pay the taxes, duties fee, levies and other

impositions levied under the Applicable law and the Client shall

perform such duties, in regard to the deduction of such tax at

source [TDS] as per applicable law.

Note: * In case this contract is with a Foreign Consultant and payment

in foreign currency is agreed modify, appropriately.

4. Project

Administration

A. Coordinator.

The Client designates Mr./Ms. [insert name] as Client's

Coordinator; the Coordinator will be responsible for the

coordination of activities under this Contract, for acceptance and

approval of the reports and of other deliverables by the Client and

for receiving and approving invoices for the payment.

8 Modify, in order to reflect the output required, as

described in Annex C.

B. Reports.

The reports listed in Annex C, “Consultant's Reporting

Obligations,” shall be submitted in the course of the assignment,

and will constitute the basis for the payments to be made under

paragraph 3.

5. Performance

Standards

The Consultant undertakes to perform the Services with the

highest standards of professional and ethical competence and

integrity. The Consultant shall promptly replace any employees

assigned under this Contract that the Client considers

unsatisfactory.

6. Confidentiality The Consultants shall not, during the term of this Contract and

within two years after its expiration, disclose any proprietary or

confidential information relating to the Services, this Contract or

the Client's business or operations without the prior written

consent of the Client.

7. Ownership of

Material

Any studies reports or other material, graphic, software or

otherwise, prepared by the Consultant for the Client under the

Contract shall belong to and remain the property of the Client.

The Consultant may retain a copy of such documents and

software9.

8. Consultant Not

to be Engaged

in Certain

Activities

The Consultant agrees that, during the term of this Contract and

after its termination, the Consultant and any entity affiliated with

the Consultant, shall be disqualified from providing goods, works

or services (other than the Services and any continuation thereof)

for any project resulting from or closely related to the Services.

9. Insurance The Consultant will be responsible for appropriate insurance

coverage. In this regard, the Consultants shall maintain workers

compensation, employment liability insurance for their staff on

the assignment. The consultants shall also maintain

comprehensive general liability insurance, including contractual

liability coverage adequate to cover the indemnity of obligation

against all damages, costs, and charges and expenses for injury

to any person or damage to any property arising out of, or in

connection with, the services which result from the fault of the

Consultants or its staff. The Consultant shall provide the client

with certification thereof upon request.

10. Assignment The Consultant shall not assign this Contract or sub-contract any

portion of it without the Client's prior written consent.

9 Restrictions about the future use of these documents and software, if any, shall be specified at the end of paragraph 7.

11. Law

Governing

Contract and

Language

The Contract shall be governed by the laws of Union of India,

and the language of the Contract shall be English.

12. Dispute

Resolution10

Any dispute arising out of the Contract, which cannot be

amicably settled between the parties, shall be referred to

adjudication/arbitration in accordance with the laws Arbitration

& Conciliation Act 1996.

FOR THE CLIENT FOR THE CONSULTANT

Signed by ___________________ Signed by ____________________

Title: ______________________ Title: ________________________

10 In the case of a contract entered into with a foreign Consultant, the following provision may be substituted for paragraph

12: “Any dispute, controversy or claim arising out of or relating to this Contract or the breach, termination or invalidity thereof,

shall be settled by arbitration in accordance with the UNCITRAL Arbitration Rules as at present in force.”