MADHYA PRADESH URBAN SERVICES FOR THE

ContentsLetter of Invitation 4Annexure A: Data Sheet 5Annexure B: Technical Proposal Submission Forms 7Annexure C: Terms of Reference for appointment of auditor to Audit of8MPUSP FundsAttachment – 1 Audit Firm, Capacity Assessment Questionnaire 10Annexure D: Financial Proposal Submission Forms 12

Letter of InvitationInvitation N°: [MPUSP/ /]Bhopal, August 20091. The Urban Administration and Development Department (UADD) of the Government ofMadhya Pradesh (GoMP) (hereinafter ‘the Recipient’) has received grant financing from DFIDtowards the cost of the Madhya Pradesh Urban Services for the Poor (MPUSP) Programme.The Recipient intends to apply a portion of the funds to eligible payments under the contractfor which this Request for Proposals (RFP) is issued.2. UADD (hereinafter ‘the Client’) now invites proposals to appoint a firms of CharteredAccountants to carry out the audit of the MPUSP programme accounts maintained in MSU inBhopal and fourteen programme cities – Bhopal, Gwalior, Indore, Jabalpur, Ujjain, Sagar,Rewa, Satna, Singrauli, Katni, Dewas, Khandwa, Ratlam and Burhanpur and certify theconsolidated accounts for the period, 1 April 2008 to 31 March 2009. The authority canconsider renewal of the engagement for the financial year April 2009 to March 2010 onmutually agreed terms.3. A firm shall be selected under Least Cost Selection (LCS) and procedures described in thisRFP, in accordance with the policies of the GoMP and DFID.4. The RFP includes the following documents:1. Letter of Invitation2. Date Sheet, see Annexure A3. Technical Proposal - Annexure B4. Terms of Reference (ToR), Annexure C5. Financial Proposal, Annexure DProject Director4

Annexure B: Technical Proposal Submission FormsTech 1: Covering Letter[Location, Date]To: [Name and address of Client]Dear Sir or MadamWe are hereby submitting our Proposal, which includes this Technical Proposal and a FinancialProposal sealed under a separate envelope.We hereby declare that all the information and statements made in this Proposal are true and acceptthat any misleading information contained in it may lead to our disqualification.We confirm that all personnel named in the tender will be available to undertake the services.We undertake, if our Proposal is accepted, to initiate the Services related to the assignment not laterthan the date indicated in the Data Sheet.We understand you are not bound to accept any Proposal you receive.Yours faithfully,Authorised Signature [In full and initials]:Name and Title of Signatory:Name of Firm:Address:7

PROJECT UTHAANMadhya Pradesh Urban Services for the Poor Programme (MPUSP)Urban Administration & Development Department, Govt, of Madhya PradeshPallika Bhavan, Shivaji Nagar, 6 No. Bus Stop, Bhopal 46201Phone- 91 755 27630 60,61,62 Fax: 91 755 2763868, E-mail: infor@mpusp.orgTerms of Reference for Appointment of Auditor to Audit of MPUSP FundsIntroductionThe Madhya Pradesh Urban Services for the Poor is a 5 year (2006-11) Programme, assisted by theDept. for International Development of Govt. of UK and is working with the Govt. of MP to enhancestate and ULB capacity to deliver sustainable and effective services to the urban poor. This willsupport the overall goal of sustainable poverty reduction and economic growth in urban MadhyaPradesh.For monitoring of MPUSP a Management Support Unit has been set-up in Bhopal. The executionof the Programme is through all 14 city Corporations. It should be noted that in four cities,Bhopal, Indore, Gwalior and Jabalpur, the programme is running since September 2006; theremaining ten city corporations namely Ujjain, Sagar, Rewa,Satna, Singrauli, Katni, Dewas,Khandwa, Ratlam, Burhanpur joined the programme in March 2009 only and as such thetransactions in these ten cities are minimal, not more than five accounting entries.Audit of accounts for the first period ending 31 March 2008 has been completed. It is nowproposed to appoint a firm of Chartered Accountant for conducting the audit for the financial yearending 31 March 2009. For the purpose of the audit, the selected firm is expected to visit all citycorporations.Audit ObjectivesThe objective of the audit by an external agency is to ensure through the auditor’s professionalsopinion on the financial position of the programme at the end of each fiscal year and of the fundsreceived and expended for the accounting period ended as reported by the Programme, that thefunds are utilized properly to achieve the intended objectives of the Programme, and that thecovenants of the DFID grant funding are adhered to. The programme accounts provide the basisfor preparation of the Programme Financial Statement and are established to reflect the financialtransaction, as maintained by the Project executing agency, MSUAudit ScopeThe Auditor shall be required to carry out the following tasks:• Accounting Policies and Change: The auditor should comment on the accounting policies,and confirm the extent to which the agreed programme accounting policies have beenapplied. In particular, the auditor should report any material deviations from the agreedaccounting standards. The auditor should also comment on any accounting policychanges, either during a financial year, or form one year to another.• Financial Statements: Government of Madhya Pradesh has prescribed a State LevelMunicipal Accounts Manual (MPMAM) which is prepared following the National MunicipalAccounts Manual. Further, Guidance to Record and Account for MPUSP Funds has beencirculated to the programme cities for recording and accounting of utilization of funds(including receipts and payments) released for the MPUSP programme. This guideline ismeant for all staff of UADD, and ULB employees of the project cities, involved in theprocess of monitoring and evaluation of goods, services, and works, in addition for thosewho are a part of the receipt, payment, and accounting procedure.• The auditor will verify all reimbursement claims submitted by the programme cities to theMSU. Similarly the auditor will also verify the reimbursement claims prepared by MSU.The auditor will ensure the correctness of the consolidated claims prepared periodicallyand submitted to DFID.• The Auditor will also verify the amounts admitted and reimbursed by DFID and will reporton the disallowances, if any with reasons for the same and suggest corrective measureneeded not to repeat the same for future claims.8

• Verify that the procurement of goods, services and civil works have been made followingthe Procurement Guidelines issued by the Government in September 2008.• Verify that the accounting transaction in all programme city corporations and MSU areduly supported by adequate documentation and are duly approved.• Verify that the funds have been used in accordance with the relevant guidelines.• Verify that the MPUSP Bank Accounts at MSU and cities are reconciled and reconciliationstatement checked.• Verification and reporting on statutory compliances, deductions and deposit of TDS etc.• All necessary supporting documents, records, and accounts have been kept in respect ofall programme expenditures.• The financial statements follow acceptable accounting standards and give true and fairdescription of the financial positions.• Report audit compliances and persisting irregularities.• Any other matter incidental to above matters.Summary of Auditing Requirements1 DFID requires the submission of audited financial statements and separate programmeaccounts and records exclusively for the Programme to ensure that the Grant funds wereused only for the objectives set out in the Project Administration Memorandum.2 The submission period is 6 months after the end of related fiscal year.3 The accounts and records pertaining to the Programme must be consistently maintained inaccordance with the standard laid down by the Institute of Chartered Accountants of India.The Auditor should also express an opinion whether the financial report has been preparedusing the standards laid down by the Institute of Chartered Accountants of India.4 The programme accounts are to be maintained on Double Entry System of Accounting, asper accounting standards notify by the Institute of Chartered Accountants of India. In thiscontext, the auditor’s responsibilities will be to verify if the stated accounting standard havebeen followed consistently.5 The project account should be audited in accordance with appropriate auditing standardsconsistently applied by the Auditor. The Auditor should specify in the Auditor's Report theauditing standards followed by their in conducting their audits. Furthermore, they shouldexpand the scope paragraph in the Auditor's Report by disclosing, at least, the key auditprocedures followed in the audit. If there are any supplementary Financial Statements to theProgramme main financial statements, the Auditor should also make a statement whetherthe same audit procedures have been followed for the supplementary financial statementsas for the main financial statements.6 Apart from expressing an opinion on the financial condition of the Programme, the Auditorsshould also express an opinion as to whether :a. the proceeds have been utilized only for the Programme activities;b. the financial information complies with relevant regulations and statutory requirements;andc. all the covenants of the Grant Agreement have been complied with.7 When a qualified opinion, adverse opinion, or a disclaimed opinion is given, the Auditor'sReport should state in a clear and informative manner all the reasons therefore.8 Actions or deficiencies disclosed by the Auditors in their Report should be resolved by theGovernment effectively and within a reasonable time. The Auditors should review and commentupon the adequacy of the corrective measures taken by the Government in the subsequentAuditor's Report.9

Attachment - 1Audit FirmCapacity Assessment QuestionnaireBasic Information:1. Legal Name of Firm2. Street and Postal Address of Firm3. Telephone (include country and area code)4. Fax (include country and area code)5. Email address6. Address and Telephone of Branch Offices (use attachment if necessary)Branch Name Address and Telephone Officer in Charge7. Practice license Number and Date (ICAI Firm Registration No.).8. Names of the Partner/Chartered Accountants (Attach the latest Certificate of FirmConstitution)Name, Designation Membership No. Qualification Experience9. Is the firm empanelled with C&AG: Yes/No (provide copy of empanelment letter)10. Annual Turnover for last 3 years (Rs. Lakhs)2008-092007-082006-07The Firm's Independence11. Does the firm provide consulting services involving accounting or internal control matters toaudit clients?12. Has the firm, any partners of the firm or any staff of the firm ever been subject todisciplinary action by any national accounting body to which the firm or its partners belong?If so, please indicate the nature of the disciplinary action and the reasons for it.13. Has the firm, any partner of the firm or any staff of the firm ever been subject to a courtorder involving the provision of professional services? If so, please indicate the nature ofthe court order and the reasons for it.Networking with Other Firms:14. Does the firm have an affiliation or association or networking with any other foreign orlocal professional firm(s) such as accountants, auditors; consultants or lawyers etc ifso please provide the following.Firm Name Legal Address Home Country Contact PersonFirms Experience15. Pease indicate lists of major audit and consulting clientsName Year of Audit Fees PartnerResponsibleMajor Audit Clients(3 years)10

ConsultancyServices Clients (3years)Firm's Professional Orientation16. Indicate which of the following services are provided by the firm and show the share of eachservice in relation to the firm's last complete year's total fee income. Please separate anyincome derived from a foreign accounting/auditing firm affiliation.Nature of IncomeDerived from National Income Total Fee IncomeForeign AccountAudit Affiliate(s)Auditing % % %Accounting % % %Consulting Services % % %Other Fee Income % % %Total Fee Income 100% 100% 100%IAS =International Accounting Standards,ISA = International Standards on Auditing.17. Does the firm use an audit procedures manual or guideline for staff? If so, when was it lastupdated? How does the firm ensure that staff adheres to the audit manual/guidelines, at alltimes? (Please attach a copy of the manual/guideline).18. Is the firm aware that various multilateral and bilateral agencies have guidelines coveringaccounting and auditing for projects they fund? If so, please list the guidelines the firm has.19. Discuss the firm's quality assurance program. Does the firm participate in a peer reviewprogram on a national basis and has the firm ever participated in a peer review as a resultof an affiliation with a foreign accounting/audit firm? IF so, what were the results of the lastnational/foreign peer review(s)?20. Describe the firm's utilization of information technology, i.e. software tools and computerassisted audit techniques to support auditing assignments.21. Indicate types of training and number of hours of training by staff category, provided by anyaffiliate firm over the last three years, as follows: (Attach a schedule if necessary)Staff CategoryPartners / AssociatesManagersSupervisorsOther ProfessionalTraining Year/Total Hours (CPE Hours)In CountryOut of CountryCertificationI certify the above information is true and correctSigned (with name, date and seal)11

Annexure D: Financial Proposal Submission Forms(For the Audit for the Period 01/04/2008 to 31 March 2009)Summary of Costs (Rs.)Sl. NoItem1. Total Professional Fees2. Out of Pocket Expenses(see below)3. Service tax if anyTOTALUADD/Cities(mention for all Audit units separately, see below for details)City 1 City 2 City 3 City n UADDBhopal, Gwalior, Indore, Jabalpur, Ujjain, Sagar, Rewa, Satna, Singrauli, Katni, Dewas,Khandwa, Ratlam, Burhanpur, and MSU TotalOut of Pocket ExpensesSl. NoItem1 Travel (to & fro fromHO/BO)2 Per diemsUADD/Cities (mention for all Audit units separately)City 1 City 2 City 3 City n UADDTOTAL12