BAJAJ HINDUSTHAN LTD.

Internal Audit Program for 8 Units

(For the period Jan' 2013 to March' 2013)

A Accounts Deptt.
Cash Vouching

Bank Vouching
 Bank Reconciliations

Journal Vouchers

Others

B Works Orders & Purchases Orders including Packing Materials at site (Generated from Plant) [emphasis on Work Or

Purchase Order (P.O.) Audit / Work Order (W.O.) Audit

Pending Indents (Purchase Requisations)

Processing of bills & purchase department & accounts department

Report on overdue supplies and reason thereon

Inventory Control System

 Scrap Generation and disposal system

C Statutory Dues & Return filling

TDS & TCS

VAT/ CST

Service Tax

PF

WCT

D CENVAT
Excise & Service Tax

VAT & CST -Input credit and assessment

E Compliances of Industrial &other applicable Law

F Stores
Inventory Control System

Scrap

Maintenance

Goods in Transit

NRGP Register (Non Returnable Gate Pass Register)

Returnable Stores Register (RGP)

 Rejection Report

Procedure of Issue Slips Raising & Consumption

Critical Spares

Freight

Guarantee Warrantee Register

G Sales / Dispatch
Sales - Sugar

Sales - Distellary & By-Products

 Sales - Co-gen

H Budgetary Control

I Log Book

J Civic Condition of Godawn

K Safety Measures

L Time Office (Own and Contractual Labours)

 BAJAJ HINDUSTHAN LTD.
Internal Audit Program for 8 Units
(For the period Jan' 2013 to March' 2013)

Accounts Deptt.
Cash Vouching
Authorization authority
For Authorisation Authority please refer BHL Delegation Mannual
Each and Every Voucher should authorised by Plant Accounts Head and verified by Senior Accounts Officer.
All the Cash Vouchers should be Posted in SAP on the same day and further it is to be checked that the cash payment
has been made after the posting of cash vouchers.
The receipt acknowledgment should be obtained on the print out vouchers instead of pre-printed cash vouchers.

in case of SAP is not working, payment should be made with written consent of Plant Accounts Head.
In case of payments made for arrear salary( arrear salary not current months), then payment should be made after
verification from HR Dept.
In case of receipt of the materials, supporting should be varified by Gate Security Staff
Total Amount of supporting should be matched with Voucher amount and in case of lost/theft, an written application

should be made by employee which should be duly approved by the respective department head and accounts head.
Back Dated Posting of Cash Vouchers
Supporting with Vouchers & Proper Accounts Head
Total Amount of supporting should be matched with Voucher amount and in case of lost/theft, an written application

should be made by employee which should be duly approved by the respective department head and accounts head.
Local Vat Credit allowability
Genuiness of Supportings
Disallwed under Income Tax Act, 1961
Detail of Cash payments in excess Rs. 35,000 each to transporters and Rs. 20,000 each to other cases
If debited directly to expenses account, TDS compliance needs to be varified.
Others
Negative Cash Balances
Average Daily Closing Cash Balance Analysis (in case of abnormality should be reported), cash balance more than
requirment should be deposited in bank.
Bank Vouching
Authorization authority (as per Cash Vouchers)
Bank voucher should be properly released through the portal system used by Units.
According to portal system payment upto the 50000 from bank, Bank voucher must released by the HOD of Accounts.
And payment made more than 50000 but upto 500000 then voucher must released by zonal cordinatior of accounts
along with HOD of accounts.
All the Bank Payment more than 500000 will be pay through Head Office Noida. Except Payment made to Cane society.

Supporting with Vouchers & Proper Accounts Head (as per Cash Vouchers)
Matching of all cash withdrawal with bank account statements (it was noticed that unit were used to prepare cheques
and posts in SAP on previous day of actual cash withdrwal date)
Matching of bank payment with the bank statement & verification of reconciliation with delay Analysis
Calculation checking of Interest paid on CC Limits Accounts
Interest Rate should be varified from BHL-Office (as the rates were decided at Corporate Level)
 Process of prepration of Cheques to Vendors and their Dispatch system of to vendor
Cenvat Credit taken on Bank Charges
Analysis of Bank Charges (Major Bank Charges)
Back Dated Posting of Bank Vouchers
Bank Reconciliations
Bank Reconcilation should be prepared monthly basis.
All the cheques mentioned in Reocncilation cleared in next month or not, so possibility of cheque cleared but shown in
reconcilation can be minimize.
Closing Balance as per Bank should be matched with Bank Account Statement
Closing Balance as per Books should be matched with Balance in SAP
Time taken for clearance of cheques by bank (if the chques has been deposited then they should be cleared within 3
days excluding holiday)
Stale Cheques pending as on reconcilation date (Means Cheque issued more than 3 months ago but yet not presented in
banks)
Analysis of Pending Entries of Bank Reconcilations
Journal Vouchers
Authorization authority (as per Cash Vouchers)
Supporting with Vouchers & Proper Accounts Head (as per Cash Vouchers)
Advance for expenses to employee & staff
Analysis of Expenses
TDS Deductions
If PF has been deposited by the Contractor then Copy of challan attached with Contractor's Bill?
Service Tax Liability (Reverse Charge Applicability)
Checking of Expenses Bill on which Cenvat Credit has been taken for Service Tax (Service Tax Registration No.; PAN No.;
Address; 1st 10 Digits of Service Tax No. will be equal same as PAN No.)
Cenvat Credit for Service is not allowed on Insurance; Service Portion for Work Contract of Civil Construction; renting of
motor vehicle; Repair & Maintenance of Motors Vehicles etc.)
Travelling & Convyance Reimburshment Expenses vouchers
Travelling should be cross verified from Gate In/Out Register
Out Door Duty Slips should be attached with Travelling Bills duly authorised by the authorised persons
Travelling should be approved & Mode of Travelling should be varified as per BHL Delegation Mannual
If travelled by Road Kilometer of travelling should be checked from estimations
Supporting should be attached for any reimburshment of expenses incurred during the journey
Dearness Allowence and Travelling Allowance calculation should be checked from BHL delegation manual
Approval of Travelling & Mode of Travelling should be varified as per BHL Delegation Mannual if at any point of time BHL
delegation manual and actual mode differ then should not be passed but in case of emergency written approval should
be taken from higher authorities.
Back Dated posting of Other Vouchers
Others
Compliance of Accounting Standards
Matching of Accounting policy adopted by the company and mentioned in Printed Financials
System of Prepration of Cheques for payment to vendors
Maintenance of cheque issue register / dispatch register
Works Orders & Purchases Orders including Packing Materials at site (Generated from Plant) [emphasis on Work Orders]

Purchase Order (P.O.) Audit / Work Order (W.O.) Audit

(Verification of Purchases Orders & Work Orders)
 Before calling of quotation, it should be checked whether requisationed quantity is avilable in stock of unit and surplus
stock avilable at any other unit
Quantum of Quotations called (minimum 3 quotations should be called and received) and received against Each
P.O./W.O.
Verification of Quotation Quantity and Requirement Quantity
Checking of delivery period as per quotations and delivery period requisite by requisationor
Report on overdue delivery by vendor
time lagging in case of precurement from local or neareast suppliers
Maintenance of Receipt Register of quotations
Comparison charts matching System
While Comparing Rates of Items - Freight and Taxes were considered or not
If the material is cenvatable then Cenvat Credit has been considered or not?
Finalisation basis marked or not on comparison or not (Reason should be mentioned for awarding order)
Purchase orders should be signed by authorised person
If any advance payment has been made against the P.O. then delivery has been received in time or not; if not then
calculate finanace cost (interest cost) attached for delay receipt of materials.
After prepration of Purchase order - delay communication with PO awarded vendor
If any Repeat purchase Order reference given then that repeat order should not be more than 6 months this limit was
dicided by management
Penalty clause apply when the delivery made by the supplier beyond the delivery date menitoned in Purchase order so

verify penalty properly charged or not by the unit on all those cases on which Penalty clause applicable.
In case of composit work order (i.e. material with labour) in that case WCT and Service Tax both Payable - Check

whether material portion will prepared seprate Purchase Order then we can save differential Indirect tax.
Pending Indents (Purchase Requisations)
Status of Pending Indents with (Stores/Unit Head/Department) Level Wise & Age Wise
Reason analysis for their pendency
Detail analysis of work performed without receipt of indented material
Delay in approval of Purchase Requisations at each level
Processing of bills & purchase department & accounts department
Rates to be verfied by Purchase Order
Purchase Invoice should be Cross verify from Gate Entry Challan/Invoice & Material Receipt Note & weightment slips
(required in case of invoice related to weightment)
Quality Inspection Report (Approval of Quality should be before prepration of GRN) attached with MRN
If the material is rejected then Rejection Note to be prepared and material to be sent from NRGP
Excise Duty Credit has to be taken or not
Invoice should contained {Excise Registration No.; Name of Range; Area Detail of Plant; Time of Removal; Date of
Removal; Pre-authontications etc.}
Delay in Bills passing
Delay in sending bills to accounts dept. after prepration of GRN at Stores
Back Dated Entry Posting
Report on overdue supplies and reason thereon
Delay in receipt of ordered material (from due date of receipt of material)
Reasons analysis with Communication with Suppliers
Loss to be calculated, if any
Inventory Control System
Slow Moving Stock (As on 31st March'2013)
 Non Moving Stock (As on 31st March'2013)
Scrap Generation and disposal system
Establishment of Committee
Basis of finalisation of Rates
Weightment system of Scrap & their cross verification
Stock maintenance and yard position

Statutory Dues & Return filling

TDS & TCS
Checking of Challans with their Due Dates and Due Amount
Checking of TDS Return for all months with their Due Dates and Due Amount and all applicable details such as amount of
transport services on which TDS not deducted is shown or not
Checking of whether TDS is being deducted on the Services Received Amount
Checking of whether TDS is deducted under correct section
VAT/ CST
Checking of Challans with their Due Dates and Due Amount of all the states
Reconciliation of all the sales (lease Income) with the return and challan amount
Action Taken on Disputed Amount of CWC and M/S Bothra shipping Services
Checking of VAT Returns of all the states with their applicable due dates and amount due and deposit
Service Tax
Checking of Service tax challans in respect of all services with their due dates
Checking of all services rendered as per SAP with Reco. (including Reverse Charge)
Ensure that Reverse Charge on specified Services has been deposited
Ensure that Service tax return for Reverse Charge on specified Services has been filed

Checking of PF Challan with their Due Dates and Due amount

Amount deducted from employees salary as per Applicable rules
Employer share as per applicable rules
Reconciliation between PF due and Deposit amount as per HR and Accounts
Payment of PF of Contractual Labour
If PF has been deposited by the Contractor then Copy of challan attached with Contractor's Bill?
WCT
Checking of WCT Challans with their due date and amount
Checking of WCT returns with their due dates and amount
CENVAT
Excise & Service Tax
Cenvat Credit of Excise should be taken on the basis of GRN, we should not wait till receipt of Invoice
Reconciliation of Cenvat Registers (RG-23 Part A, C & PLA) with the Ledgers of Accounts.
Summary of Various records ( CENVAT taken & Utilized during the period)
Detail should be prepared for Cenvat Credit Utilisation & Reversal of credit taken earlier (item wise)
Excise Books, Return, Challan etc.
Verification of Service tax credit taken only after the payment of Service.
Analysis of Deferment of CENVAT taken from the receipt of Items at gate.
Review of Cenvat claim pending for Defective Invoice etc.
Review of Monthly reversal of cenvat credit taken for production of Exempted Goods
Review of Monthly reversal of cenvat credit taken for production of Exempted Goods
VAT & CST -Input credit and assessment
Reconciliation of Credit taken as per VAT Return with the Credit taken in accounts (Books).
 Detailed List of Various records maintained by Unit for taking Input Credit taken & Utilisation
Items on which input credit not taken
Compliances of Industrial &other applicable Law
Filling of Checklist
Analysis of Compliances (ACT Wise)
Please note all those compliances and Forms which are not followes and not maintaine

Inventory Control System

Slow Moving Stock (As on 31st March'2013)
Non-Moving Stock (As on 31st March'2013)
Material purchased under emergeny and not issued
Material purchased under emergeny and delay issued
Fresh Material purchased but not isssued do not report those material which are purchases for the purpose of Stock
maintained, only reported those material which eariler indented by requsitioner however the same should be reported
under your query sheeet
Sufficient inventory avilable but further purchased and not issued
Material not issued from Stock in hand (i.e. fresh material purchased and issued)
Scrap
Establishment of Committee for deciding Rates
Rate Revision Analysis with market rate trend for scrap; inviting of qotations and cross verification with LME / Steel rates
changes during the audit period
Basis of finalisation of Rates
Weightment system of Scrap & their cross verification
Stock maintenance and yard position
Detail of Material Returned to Stores of Replace Parts (Major)
Boundary walls / wire boundary of scrap yards
Precious metal should be kept under bounday wall
Maintenance
Machine maintenace History
Periodic maintenace of Machinary
Analysis of uses of "Bearing" - Purchased, used, Make, Same make purchases from different suppliers; utilisation of used
bearing; selling of bearing
Goods in Transit
Analysis as on date status
reasons of time in delay receipt, if any
NRGP Register (Non Returnable Gate Pass Register)
Maintenance of NRGP Register
Nature of Item sent on NRGP Register
cross verification of with Gate
NRGP should be signed by authorised person & store in charge
Returnable Stores Register (RGP)
RGP Register and returnable's outstanding with ageing
cross verification of RGP passes with Gate
Nature of Item sent on RGP Register
 Requisition note for issuing RGP should contain name of department, name & make detail of product, estimated value of
product
Excisable goods, which are sent on RGP are pending for more than 180 days, credit for the same needs to be reversed
same material should be sent on exiceable invoice.
when material handed over to Party then acknowlegment should be taken from receipeints.
RGP should contain estimated time of return & estimated value of product
RGP should be signed by authorised person & store in charge
Rejection Report
Rejection report vis a vis gate pass/NRGP register
Rejected Material should be stored sepretly (i.e. do not mixed with other material pending for inspection)
Rejected Material should be dispatched imidietly from NRGP
Procedure of Issue Slips Raising & Consumption
Procedure for issue of stores, issue slips reconciliation and
Revenue v/s Capital Consumption
If the material has been issued manually i.e. not from SAP then that should be recorded in Seprate Register maintained
at Plant Stores
pending issue slips for A/cing
Critical Spares
Basis of Determination of Critical Spares based on Nature of Spares
Last Revision of Critical Spares
Stock Status of Critcal Stores
Freight
Freight payment in cash of more than Rs. 35000 against a single bilty
Freight rate comparison of different parties for same destination on the same day
Guarantee Warrantee Register
Check whether Gurantee/Warantee Register maintained or no
Check whether Gurantee/Warantee Register has been updated on regular basis or not
Labour Charges paid for maintenace should be varified whether such machainary was under gurantee/warantee

Analysis of Labour maintenance Bills with material issued from stores

Sales / Dispatch
Sales - Sugar
In the Sales main Sales Contracts were entered from Noida (HO) thenafter the Sales Orders were generated from

Plant. The Sales orders were generated on the basis of delivery Order received from verious sugar agents.
Pending Delivery Order Status as on date.
Issues of free samples, customer’s complaints system and attending the complaints etc.
Sales - Distellary & By-Products
Verification of Sales Order Prepration in SAP with Delivery Order received from Agents.
Pending Delivery Order Status as on date.
Customer Name & Rates of sales Order should be matched with Sales Contract Notes
Invoices should be prepared after weightment of Trucks and the quantity should be matched with net weight of truck

Matching of Weight of Gross Weight; Tare weight of Trucks which were repeatativly coming to plant
Variation between Net Weight & Invoiced weight of Loaded Truck
The truck should be leave factory premises within 2 hours after weightment of sugar loaded truck
Token issued by Weightment cleark should be only cancelled after written application made by Security Incharge after
mentioning reason for cancellation.
 Old Stock of Press-mud; By-Products as on date
Acknowledgement Receipt of of Goods from Customers
Sales - Co-gen
Contract with UPPCL should be reviewed firstly and carefully and took the copy and should be attached to working
paper file.
Invocing should be matched with meter reading taken by engineering dept.
transmission loss to be calculated (Switch Yard of Co-gen to Switch Yard of UPPCL) Further timing of reading should be
counter verified; difference between timing if found then should be adjusted approprietly
Internal Consuption loss (i.e. Captive consuption loss) analysis {total generation v/s total consumption}
Peak Hours starting and closing meter reading should be varified
Electricity Banked by UP Govt. and payment outstanding as on date to be analysed
Invoices should be prepared on next date of meter reading taken by UP Electricity Dept.
Budgetary Control
Analysis of Budget v/s Actual
Monthly preparation & mailing to H.O.
If any variance noted then report the variance
Log Book
Filling of Log book Analysis
Records Maintenances
Approval system
Civic Condition of Godawn
Maintenance of Hygiene
Condition of sugar maintenances (Moister)
stacking of sugar Bags
Safety Measures
Safety Audit conducted during the period
Safety Training
Various Reports of EHS
Time Office (Own and Contractual Labours)
checking of attendence procedure of all workers and employees
checking of out duty slips of all those employees which were out of units for the company work.
Checking of Overtime hours through appropriate records maintained by the unit and also verify the reason for overtime.

checking of absentism record, properly recorded or not. Leave application submited by workers or not.
checking of salary sheet, check all required deduction are properly made or not. ( Deduction like: vehicle personal use
charges, advance salary etc.)
If a single worker regularly worked more than 36 hours then reported.
Advance salary should be paid after verifying the advance salary applicatin submitted by worker/employees to time
office, also check the advance salary application properly authorised by appvoing authority or not, at least one
authorised signatory should be time office managerial level person
Advance salary paid to employees and worker should be as per delegation manual of BHL and checked deduction
properly made or not.
check the leave reocrds are properly made or not (Like : Paid leave, casual Leave, Sick leave, Compansatory leave)

Check leave applications are properly authorised by approving authority.

must