PAD - LGED

Internal Auditors. The findings of the internal audit will be acted upon within a month of the
report after consultation with the relevant units.
19. External Audit. The FAPAD of C&AG will, within six months from the end of the
financial year, carry out audit of the project. The Project Director, PMU will be responsible for
audit follow up and taking remedial actions with the assistance from FMS and the PMU’s
Program and Implementation section(s) relevant to the objections. The PMU and LGED with the
help of MLGRD&C will arrange tripartite meetings to resolve outstanding audit objections
within three months from the receipt of audit report and improve the internal control arrangement
to prevent recurrence of issues that would trigger audit objections.
Table 3.1: Audits
ImplementingAgency Audit Type Auditor Deadline
LGED
Audit of Project’s Annual Foreign Aided Project December 31
Financial Statements Audit Directorate under
the Comptroller and
Auditor General
20. Audit Objections. RTIP. All audit objections on the RTIP financial statements until 30
June 2011, that were material to IDA have been satisfactorally resolved LGED has agreed to
address all audit issues that might be raised by the auditors on the financial statements of RTIP
for final project year- FY 2012, within three months from the receipt of the audit report.
21. Measures to reduce audit objections: Based on the lessons learnt from RTIP the
expected audit objections on the proposed project would betypical of an infrastructure project,
which cannot be addressed by FM design itself. These can be minimized by more intensive
supervision by Engineers and Supervision Consultants. The team and the LGED have agreed on
a standard checklist to be designed on each Packages bill containing confirmation from the
Certifying Engineer/Consultant that the certified bill is free from any irregularities of the kind
mentioned in the check list.
22. Project Audit Committee. In order to ensure that the audit reports generated by the
Internal Audit and the External Audit of the project are reviewed and to warrant robust follow up
of the audit recommendations, a Project Audit Committee (PAC) will be constituted. The Joint
Secretary LGD will be in charge of or overseeing the Audits as the PAC’s chair, and an
Additional Chief Engineer LGED, Audit Specialist, LGSP II LGD, and the Project Director as
members. The audit committee will meet at least twice a year to review the audit reports and to
follow up on audit recommendations. The Project will provide necessary secretarial and
logistical support to the PAC.
23. Supervision Plan. Considering that the overall risk of the project is “substantial” a
supervision mission will be conducted at least every six months. The supervision mission will
ensure that adequate financial management arrangements are maintained for the project, both at
the PMU and the district levels. Regular reviews will be carried out to ensure that the
expenditures incurred by the project remain eligible for the Bank’s funding and that IFRs are
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