Request for Proposal (RFP)

For Appointment of Statutory Auditor for

State Health Society (UT of Dadra Nagar
Haveli & Daman and Diu) and District
Health Society (Dadra Nagar Haveli, Daman
& Diu) for Audit of all programmes under
Flexible Pool for RCH & Health System
Strengthening, National Health Programme
and Urban Health Mission

[2023-24]

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REQUEST FOR PROPOSAL (RFP)

State Health Society, (UT of DNH & DD), seeks to invite Proposal from the Comptroller & Auditor
General of India (C&AG) empaneled Chartered Accountant (CA) firms those are eligible for major
Public Sector Undertakings (PSU) audits for the year 2023-24 for conducting the statutory audit of State
and District Health Societies under the National Health Mission for the FY 2023-24.

The details about the background of the auditee, the units to be covered in the audit, scope of work, terms
of reference, and eligibility criteria for selection of the CA firm are given in the following paragraphs.

Terms of Reference (ToR)

National Rural Health Mission (NRHM) of the Ministry of Health & Family Welfare (MoHFW) was
launched on 12th April, 2005 by the Government of India (GOI) to improve medical facilities in the
country. Since 2013-14 onwards the NRHM programme has been subsumed under the umbrella
programme of the National Health Mission (NHM). NHM is overarching NUHM and also includes
Communicable and Non-Communicable Diseases (NCD) as well. The NHM seeks to provide accessible,
affordable and quality health care to the population, especially the vulnerable sections.

2. The NHM has provided an umbrella under which the existing Reproductive and Child Health
Programme (RCH) (including RCH, Routine Immunization (RI),Pulse Polio Immunization(PPI) and
National Iodine Deficiency Disorder Control Programme (NIDDCP)), Health System Strengthening under
NRHM (including Other Health System Strengthening, Ayushman Bharat –Health & Wellness Centre
(AB-HWC) now “Ayushman Arogya Mandir” and Asha Benefit Package (ABP) including facilitator
payment, various National Disease Control Programmes (NDCPs) and Non-Communicable Diseases
(NCDs) have been repositioned. National Urban Health Mission (NUHM) comprising of Other Health
System Strengthening and Ayushman Bharat –Health & Wellness Centre (AB-HWC) now “Ayushman
Arogya Mandir” has also been added in National Health Mission.

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3. At present the following Programmes/Schemes fall under the National Health Mission:
 Till FY 2021-22, fund release under NHM was as under the following (5) pools/components:
1. NRHM-RCH Flexible Pool
A. RCH Flexible Pool
B. Health System Strengthening under NRHM
2. National Urban Health Mission-Flexible Pool
3. Flexible Pool for Communicable Diseases
4. Flexible Pool for Non-Communicable Diseases, injury & Trauma
5. Infrastructure Maintenance

 With a view to provide more flexibility to States/UTs and improve financial utilization, Dept. of
Expenditure w.e.f. FY 2022-23 has approved the merger of pools. The present arrangement of
pools: -

1. Flexible Pool for RCH & Health System Strengthening, National Health
Programme and Urban Health Mission

2. Infrastructure Maintenance

3. Strengthening of National Programme Management Unit

4. Institutional and Funding Arrangements:

For the implementation of the above programmes, MoHFW has required the creation of an Integrated
Health Society at the State and District levels (registered as a legal entity at the State and District under
Societies Registration Act, 1860). Such integrated State Health Society (SHS) works in close
coordination with the Directorate of Health & Family Welfare and District Health Societies (DHSs)
work in coordination with the District Collector and District Chief Medical Officer (CMO). Program
implementation is done through its District Chief Medical Officer’s office, Blocks, Community Health
Centres (CHCs), Primary Health Centres (PHCs), Sub- Centres (SCs), Rogi Kalyan Samities (RKS)
and Village Health Sanitation & Nutrition Committees (VHSNC). Certain activities may be managed at
the State level such as drug procurement, IEC, civil works, training using specialized entities such as
SIHFW, IEC Bureau, PWD, the Directorate of Health and Municipal Corporations for the urban health
components.
Funding & Accounting Arrangements:
Funds for the various programs under NHM are transferred from the Pay& Accounts Office of
MoHFW to the State Treasuries and then from Treasuries to the Single Nodal Account of Single Nodal
Agencies of SHS functioning in the State. Government of India transfer funds in the form of Grants-in-
Aid to State treasuries through RBI on the basis of respective State Programme Implementation Plans

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 (SPIPs) and approved Annual Work Plans which are prepared on the basis of District Health Action
Plans (DHAPs) of each of the districts in the State. Under the umbrella of the integrated SHS/DHS
each program has separate bank account, separate books of accounts and other financial records as per
the requirements of each program and also submit separate financial activity reports at varying
frequencies to the respective monitoring units in MoHFW (GOI).

5. Financing by Development Partners/ Donors:

Some of the programs of NHM are also supported by development partners such as the Asian
Development Bank (ADB), The Global Fund to Fight AIDS, Tuberculosis and Malaria (GFATM)
/World Bank, etc. for which credit agreements have been entered into by GOI with the respective
Development Partners. Compliance with specific fiduciary requirements of the Development Partners
will additionally need to be reported by the auditors. Copies of the legal agreements and other project
documents will be provided to the auditors, if needed, by SHS/ concerned Programme Division in the
State.

6. Objective of audit services:

The objective of the audit is to ensure that MoHFW receives adequate, independent, professional audit
assurance that the grant proceeds provided by MoHFW are used for purposes intended in line with
approved PIPs and Annual Work Plan (AWP) of individual programs and that the annual financial
statements are free from material mis-statements and the terms of the credit/ loan agreements of the
development partners are complied with in all material respects.

The objective of the audit of the financial statements of State and District Health Society as well as the
Consolidated Financial Statements of the State and District as a whole i.e. Balance Sheet, Income &
Expenditure, Receipt & Payment, together with relevant accounting policies, notes to accounts and
schedules, Bank Reconciliation Statements, Statement of Funds Position, Reconciliation of
Expenditures as per Audited financial statements with the expenditure reported as per the Financial
Monitoring Report (FMR) is to enable the auditor to express a professional opinion as to whether:-

(1) the financial statements give a true and fair view of the Financial Position of the individual
District Health Societies (DHSs), State Health Societies (SHSs) and Consolidated District and State
Health Societies at the end of each fiscal year and of the funds received and expenditure incurred for the
accounting period ended March 31, 2024.

(2) the funds were utilized for the purposes for which they were provided, and

(3) Where programs are financed by development partners, the respective program expenditures are
eligible for financing under the relevant grant/ credit agreement. The books of accounts as maintained
by the SHSs, DHSs and other participating implementing units such as Blocks, CHC, PHCs, Sub
Centers, Village Health Nutrition and Sanitation Committees (VHNSCs) etc. shall form the basis for
preparation of the individual DHS and SHS financial statements as well as the consolidated financial
statements for the State as a whole.

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7. Standards: The audit will be carried out in accordance with Engagement & Quality Control
Standards (Audit & Assurance Standards) issued by the Institute of Chartered Accountants of India.
The auditor should accordingly consider materiality when planning and performing (except where a
certain minimum coverage of implementing units is specified) the audit to reduce the risk to an
acceptable level that is consistent with the objective of the audit. In addition, the auditor should
specifically consider the risk of material misstatements in the financial statements resulting from fraud.

8. Criteria for Selection of Auditors

A) C&AG empaneled major audit firms: A firms those are empaneled with C&AG for the
year 2023-24 and eligible for conducting audit of PSUs only will be eligible for the audit of the
NHM programmes. In this regard firms have to submit the details about the firm as per Form T-
2.
B) Selection through Open Tender System: The selection of the Auditor should be through
an Open Tender basis.
C) Preference of firms having Head Office (H.O.)/Local Branch office in the State
Capital: The firms having Head Office /Local Branch Office in the State capital of the same
State for which the proposal is given to be given preference at the time of finalizing the financial
bid. Such office must exist within the State for not less than three years as per the Institute of
Chartered Accountants of India (ICAI) Certificate. However, in case of NE States/ UTs where
availability of Auditor is scarce, the States/UT may consider the proposals of audit firms from
the neighboring States.
D) Firms have to give an undertaking that the audit team members are proficient in State’s
official language (both oral and written) and will be headed by a Chartered Accountant on
regular basis.
E) CA firms eligible for audit: CA firms those are empaneled with C&AG for the year 2023-
24 and eligible for conducting audit of major PSUs only will be eligible for the audit of the
NHM programmes. Further, CA firms eligible for conducting audit of PSUs in 2023-24 and
having their Head Office / Branch offices in designated State may be given additional weight-
age in the evaluation of Technical proposal. However, in case of NE States/ UTs where
availability of Auditor is scarce, the States/UT may consider the proposals of audit firms from
the neighboring States.On clearance of Technical proposal, the auditor will be finalized on the
basis of Financial Bids. In this regard, firms have to submit the details about the firm as per
Form T-2.
F) Disclosure of Minimum Fees in the RFP document: The States are allowed to fix the
minimum fees for audit firms in the Tender document keeping in view the resources involved,
number of districts (100% districts) and blocks (40%) to be covered during the course of Audit
and minimum number of days required for completion of audit. The States may refer the website
of “The Institute of Chartered Accountants of India (ICAI)” to decide the minimum fees. This is
in compliance with the Guideline No-1-CA(7)/03/2016 dated 7/4/2016 issued by “The Institute
of Chartered Accountants of India”. The States may refer the same as indicative basis. Further,
for the purpose of finalization of minimum fees, the State may also take the average of audit fees
paid during the last 3 years.

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 G) Audit Fees and TA/DA: The firms those are interested to be appointed will have to quote
consolidated audit fees including expenses on TA/DA and Taxes. In case the audit team requests
the State for stay arrangement etc., then cost to the State for such stay arrangements etc. will be
adjusted against the consolidated fees quoted. Bidding Firm should ensure that audit team shall
have to visit 100% Districts and at least 40% blocks within each district. The audit fee should be
quoted considering this aspect.
H) Re-appointment of Auditor: The auditor once appointed can continue for only two more
years’ subject to the satisfaction of the performance by the State. In case where
extension/continuation of same auditor is sought for this extended duration beyond the initial
year of appointment, yearly approval of Executive Committee shall be taken after obtaining the
consent of the auditor and confirming that the said firm is in the panel of C&AG and eligible for
conducting audit of major PSUs for the year for which firm is being re-appointed. In no case
shall continuation beyond this additional period of 2 years be granted. Further, any
comments/remarks/observation of the Ministry in this regard shall have to be considered while
re-appointing the same auditor.
I) Maximum No. of Audits under NHM: No auditor can take the assignment of audit of
more than three (3) States in a year. A certification in this regard may be obtained from the
auditor.
J) In case same audit fee is quoted by two or more CA firms, the selection of auditor shall be
done considering the following factors (priority-wise): -
(i) Past Experience in handling Government Contracts & Conduct of the firm; and
(ii) Turnover of the firm.

9. The other major points related to Statutory Audit are as follows:

a) To ensure timely completion of audit, State should ensure that the books of accounts are
ready at all places before the start of audit. Further, timely availability of information to the
auditors should be ensured for completion of audit on time.
b) In the pre-bid conference to be held, the participant firms should clearly be explained about
the requirements of audit as regards to the number of districts, blocks, and physical visit of the
team at each location, number of implementing agencies from whom Utilization Certificates
(UCs) /Statement of Expenditure (SOEs) received and incorporated in Annual Financial
Statements etc. so that a quality audit is not compromised.
c) It should be clearly ensured that a Standing Committee headed by Mission Director (NHM)
is constituted in the State for the selection of auditor and for follow up and issue of compliance to
the audit observations of the previous years.
d) After the completion of audit, State should organize an exit conference of the auditors to
discuss the audit observations.
e) A copy of the working papers of the auditors shall be retained by the Director (Finance)/
State Finance Manager (SFM) in the State.
f) The process of appointment of auditor has to be completed by 25 th April, 2024 and
intimation of the auditor appointed along with the fees fixed and evaluation sheet for the
appointment has to be submitted to the Ministry latest by 05 th May, 2024.
g) The State should get the audit of all the District Health Societies completed by 05 th June,
2024 and the Audit Report issued before 30th June 2024.

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 h) The consolidation of audit reports of all the districts with State along with all the necessary
requirements such as, Accounting Policies, Notes on Accounts and Management Letter is to be
completed by the State in time and final report submitted by 31 st July 2024.
i) Audit Report as per Appendices of the RFP has to be submitted in triplicate with spiral
binding along with the soft copy(PDF/Scanned)mailed to [email protected] and in a C.D. also by 31st
July 2024.

10. Scope & Coverage of audit: In conducting the audit special attention should be paid to the
following:

a) An assessment of adequacy of the project financial systems, including financial controls. This
should include aspects such as adequacy and effectiveness of accounting, financial and
operational controls; level of compliance with established policies, plans and procedures;
reliability of accounting systems, data and financial reports; methods of remedying weak
controls; verification of assets and liabilities and a specific report on this aspect would be
provided by the auditor annually as part of the management letter;

b) Funds have been spent in accordance with the condition laid down by the Department of Health
& Family Welfare, Government of India from time to time with due attention to economy and
efficiency and only for the purpose for which the financing was provided. Counterpart
contribution from State Government, where required has been provided.

c) Goods and services financed have been procured in accordance with the relevant procurement
guidelines issued by the GOI/ State Government. However, for various programmes, special
attention must be paid to the requirements of the agreement between GOI and Development
Partners (NTEP, IDSP and NVBDCP, etc.). Such requirements are available within the State/
District’s concerned Program Officers. For such externally funded programmes, auditor must
satisfy that all expenditure, including procurement of goods and services have been carried out as
per the procurement manual of the individual programmes and guidelines issued by the
Programme Divisions of GOI and have all the necessary supporting documentation.

d) All necessary supporting documents, records and accounts have been kept in respect of the
project.

e) Sample Coverage of sub district Implementing Units: Audit will cover 100% District Health
Societies (DHSs) each being a legally registered society and at least 40% of the Block Level
CHC/PHC (at least 50% of such blocks should be new and remaining may be those covered in
the audit of last year). The sample shall be selected in a manner that Block level PHC/CHC in
each district is included in the sample coverage. All the vouchers pertaining to the health
facilities will be available at the respective health facility (DH, CHC/PHCs) for the purpose of
audit. Audit shall also cover audit of expenses related to NHM incurred through Rogi Kalyan
Samities (RKSs) at each level i.e. PHC/ CHC/ DH.

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 f) The Statutory Auditor may review the concurrent audit reports / quarterly executive summaries
and may consider material observations / findings while forming his opinion on overall internal
control and truth & fairness of accounts/financial statements.
11. Project Financial Statements
A format of such financial statements and relevant schedules showing the consolidation of all the
programmes is given at (APPENDIX A - FORMAT of FINANCIAL STATEMENTS) and also on the
website of MoHFW at www.nhm.gov.in.
Project Financial Statement (SHS, DHS and Consolidated) shall include the following:

i. Audit Opinion as per APPENDIX-C.

ii. Balance sheet showing accumulated funds of the project balances other assets of the project,
and liabilities, if any.

iii. Income & Expenditure account for the year ending on 31st March 2024.

iv. Receipt and Payment Account for the year ending on 31st March 2024.

v. Other Schedules to the Balance sheet as appropriate, but which shall include

Statement of Fixed Assets in the form of a Schedule,

Schedule of Loans and Advances (Age-wise analysis),

Schedule of all Cash & Bank Balances (supported by bank reconciliation statements),

Program wise statement of expenditure.
vi. Notes on Accounts showing the accounting policies followed in the preparation of accounts
in the SHSs and DHSs and any other significant observation of the auditor.
vii. Auditor shall have to specify the significant observations, including internal control
weaknesses for each program and also specify the institution to which these relates to enable/
facilitate appropriate follow up action.
viii. Auditor shall have to certify the delay status of funds transferred from State Treasury to
SHS for FY 2019-20,2020-21 and 2021-22 and SNA A/C of SHS from FY 2022-23 and 2023-24
as per prescribed format at Appendix E-1, 2, 3,4 and 5 .
ix. The Auditor has to disclose whether the State has received any interest on delayed transfer
of funds from State Treasury to SHS bank account.
x. The comparison between audited expenditure and expenditure reported in the FMR of 2023-
24 along with the reason for variations.
xi. Sanction wise UCs as per Form 12-C of GFR 2017; duly tallied with the Income &
Expenditure and expenditure on Fixed Asset during the financial year (which have been shown as
capitalized) [Attach a statement showing the details of expenditures clubbed in the Utilization
Certificate tallying with the Income & Expenditure Account and Schedules forming part of
it]. A separate UC for State share contribution needs to be issued by the auditor and

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 Separate UCs for "Emergency Covid-19 Response Package for Health Systems Preparedness
ECRP-I , ECRP-II and PM –ABhim needs to be issued by the auditor.
xii. Action Taken Report on the previous year’s audit observations.
xiii. Reconciliation of the FMR Expenditures of the last quarter i.e. 31 stMarch 2024 with
expenditure as per the Annual Audited Financial Statements in the FMR format only for the
financial year covered by audit period identifying the variance and the reasons for the same. This
has to be certified by the auditor.
xiv. Representation by Management: The DHS and SHS management should sign the
financial statements and provide a written acknowledgment of its responsibility for the preparation
and fair presentation of the financial statements and an assertion that the project funds have been
expended in accordance with the intended purposes as reflected in the financial statements.
xv. Separate chapter for covid-19 Emergency Response and Health System Preparedness
(ECRP-I) is attached on Appendix-“F”.
xvi. Separate chapter for PM-ABhim is attached on Appendix- “G”.

12. Financial Monitoring Reports (FMR)

In addition to the primary opinion on the financial statements, the auditor is required to audit last
quarter FMR in the new format (quarter ending March) submitted to MoHFW. The auditor should
apply such tests as the auditor considers necessary under the circumstances to satisfy the audit
objective. Where ineligible expenditures are identified as having been included in the financial reports,
these should be separately noted by the auditors. The audit report should include a separate paragraph
commenting on the accuracy and propriety of expenditures included in the financial statements and
FMRs including whether procurement procedures have been followed and the extent to which the GOI
can rely on Quarterly FMRs.

In addition to the audit reports, the auditor will prepare a “Management Letter” as per Appendix-D, in
which the auditor should summaries the observation on the internal control issues (other than those
which materially affect his opinion on the financial statements) as under: -

a) Give comments and observations on the accounting records, systems and internal controls
that were examined during the course of the audit;
b) Identify specific deficiencies and area of weakness in the system and internal controls and
make recommendations for their improvement;
c) Report on the level of compliance with the financial internal control;

d) Report procurement which have not been carried out as per the procurement manual/
guidelines of the State for the individual programmes such as; RCH-II, NTEP, IDSP etc.;

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 e) Communicate matters that have come to the attention during the audit which might have
significant impact on the implementation of the project; and

f) Bring to Society’s attention any other matter that the auditor considers pertinent.

The observations in the management letter must be accompanied by the implications, suggested
recommendations from the auditors and management comments/ response on the Observations/
recommendations have to be obtained and reported along with the Audit report.

13. Reporting and Timing

The final Audit Report should be submitted by 31stJuly 2024, (i.e. within four months of the end of
the financial year) to the SHS and the SHS should then promptly forward 3 copies (Spiral Bound)
and also soft copy in MS Excel / MS Word and Scanned (Both) in mail or CD along with the final
Utilization Certificates signed by the State and Auditor both, to GOI with their comments, if any.

In case State has opted to appoint multiple auditors for a group of districts and State, in such cases
the Auditor appointed for a group of districts, shall have to issue a separate audit report for each
district and provide a soft copy also (Word/ Excel). Audit Reports for all districts in such cases shall
have to be issued by 30thJune, 2024 so that consolidated report of the State is not delayed and issued
by 31stJuly, 2024.

Submission of the Statutory Audit Report by the prescribed date is a Record of Proceedings (ROP)
conditionality for release of funds to the State beyond 75% of cash allocation which ultimately ensures
smooth implementation of the Mission and leads to better outcomes as funds are expended when
needed by the State. In view of the above following measures need to be taken by the State: -
a) The duty of the State is to ensure that the process for appointment of the auditor is
completed by 25th April, 2024 and intimation of the auditor appointed along with the fees fixed &
evaluation sheet for the appointment has to be submitted to the Ministry latest by 5 th May, 2024.
Also timely availability of information to the auditor needs to be ensured strictly.
b) The State should make sure that complete cash book, ledgers, vouchers and other financial
statements are ready at the time of visit of auditors.
c) Penal provision on failure to complete the Audit on time: In order to ensure timeliness on the
part of the Auditor, if the State feels that in spite of providing all information, documents, and
updated books of accounts, there was delay in submission of Audit Report from the auditor, the
State may deduct the audit fees @ 5% per month from the due date of completion of audit. A
clause in this regard should be incorporated by the State in the agreement. However, in case of
delay in submitting the audit report due to unforeseen circumstances like flood, earthquake,
election, etc.., the Mission Director(NHM) of the State has the right to waive off the penalty.
Further, before imposing penalty, the firm may be given an opportunity to be heard.

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14. Additional Instructions to Auditors

a. Audit Report of the SHS shall include audit of all the transactions at the State as well as DHSs
level.

b. Audit for the financial year will include all the components under NHM.

c. The auditor appointed shall be required to issue Consolidated Audit Report for the State and
each District, comprising all programmes under Flexible Pool for RCH & Health System
Strengthening, National Health Programme and Urban Health Mission.

d. All State level report shall have to be issued in three sets (Two sets for MoHFW and one set for
State). Consolidated Report is to be sent to NHM-Finance Division and individual reports of
individual programmes along with UCs to the respective programme divisions of the Ministry).
e. Financial Statements and relevant schedules shall be prepared in accordance with the format
provided by Ministry of Health and Family Welfare, GOI (APPENDIX-A -FORMAT of
FINANCIAL STATEMENTS). However, specific programme requirements (in accordance with
the agreement with the GOI and Development Partners) may also be incorporated in the separate
schedule of the programme.
f. Auditor shall certify all the UCs in the prescribed format (Form 12C of GFR, 2017) of GOI for all
programmes of NHM. The UCs shall be furnished sanction-wise and should be signed by the
Principal Secretary, Mission Director, State Programme Officers in charge of concerned
Programme and the Auditor.
g. The auditor shall also append the Checklist (APPENDIX-B-CHECKLIST FOR AUDITOR)
h. The auditor shall certify the FMR on the basis of audited expenditures with all the line activities
for the last quarter (quarter ending March 2024) showing cumulative and head wise expenditure
for the complete financial year) along with the Audited Statement of Accounts. Auditor shall
certify a comparative statement showing expenditure as per FMR and as per Audit Report.
Auditor must also document the reason for variances between the FMR figures and audited
figures in cases where the variances are significant e.g. more than 15% from the audited figures at
each component level.
i. Audit Opinion as per the Model Format provided at APPENDIX–C.
j. Management Letter as per APPENDIX–D along with the comments/reply of the Mission
Director, SHS.

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15.Re-appointment of Auditor: The auditor once appointed can continue for only two more years, subject
to the satisfaction of the performance by the State. In case where extension/continuation of same auditor is
sought for this extended duration beyond the initial year of appointment, yearly approval of Executive
Committee shall be taken after obtaining the consent of the auditor and confirming that the said firm is in
the panel of C&AG and eligible for conducting audit of major PSUs for the year for which the firm is
being re-appointed. In no case shall continuation beyond this additional period of 2 years be granted.
Further, any comments/remarks/observation of the Ministry in this regard shall have to be taken into
account while re-appointing the same auditor.
It is also clarified that “No auditor can take the assignment of more than three (3) audits under
NHM. A certification in this regard may be obtained from the auditor.”

16. General Provision: The State should ensure that the Auditor must be appointed for all the disease
control programmes under NHM and Uniform Accounting System is followed. The State should also
ensure that the auditor should follow the latest formats given in the RFP.

The auditor shall be given access to any information relevant for the purpose of conducting the audit, in
addition to all financial and procurement records, SPIPs, AWPs, MOU/LOU signed between MoHFW and
the State/ SHS, instructions issued by MoHFW regarding scheme guidelines (e.g. JSY etc.), administrative
orders issued by the SHS/ DOHFW/ Directorate of Health including cost norms etc. Where programs are
financed by Development Partners, copies of the legal agreement, project appraisal document should be
made available to the auditors.

Guidelines for Submitting the Proposals:

Agencies are required to submit the proposal as per the guidelines and formats detailed out in the
following paras:

i. The original and all copies of the Technical Proposal shall be placed in a sealed envelope clearly
marked “TECHNICAL PROPOSAL” Similarly, the original Financial Proposal shall be placed in a
separate sealed envelope clearly marked “FINANCIAL PROPOSAL” followed by the name of the
assignment and with a warning “DO NOT OPEN WITH THE TECHNICAL PROPOSAL.” The
envelopes containing the Technical and Financial Proposals shall be placed into an outer envelope
and sealed. This outer envelope shall bear the submission address, reference number and title of the
Assignment, and be clearly marked “DO NOT OPEN, EXCEPT IN PRESENCE OF THE
OFFICIAL APPOINTED. The Society shall not be responsible for misplacement, loss or
premature opening if the outer envelope is not sealed and/or marked as stipulated. This
circumstance may provide a case for Proposal’s/ bid’s rejection. If the Financial Proposal is not
submitted in a separate sealed envelope duly marked as indicated above, this shall constitute ground
for declaring the Proposal non-responsive/ invalid.

ii. Single Proposal (Multiple Firms): In case State decides to appoint more than one CA firm as
auditor, the Bidding CA firm may submit proposal for State and also for one Group of districts.

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 iii. All agencies must comply with the Technical Specification, General Conditions and
Format/Requirements for Technical and Financial proposal.

iv. The Technical Proposal shall be marked “ORIGINAL” or “COPY” as appropriate. All required
copies of the Technical Proposal are to be made from the original. If there are discrepancies
between the original and the copies of the Technical Proposal, the original governs.
v. Financial proposals submitted by the firm should be valid for 6 months from the date of submission
of the proposal by the firm.

vi. Each page, Form, Annexure and Appendices of the Technical and Financial Proposal must be
signed by the Authorized signatory of the firm.

vii. All blank spaces in the financial proposal must be filled in completely where indicated, either typed
or written in ink.

viii. State Health Society (SHS) reserves the right to accept or reject any proposal without giving
any explanation and can change the evaluation criteria as per its requirements in the interest
of the organization.

ix. If the required constitution of the team is not deployed the state may take appropriate action as it
deems fit (including blacklisting of the firm) against the firm, keeping the Ministry informed.

x. A firm cannot undertake the audit assignments of more than three states in a year. The audit
assignment must be opted for as awarded by States chronologically i.e. on First come first served
basis. If a CA Firm appointed in more than 3 States, then they have to withdraw their name so as to
keep it up to 3 States/ UTs only. As a State may opt to appoint multiple auditors, therefore, if a firm
appointed for audit of a group of district in any State then for the purpose of ceiling of 3 States,
group of Districts shall be taken as a State.

xi. The firm shall give an undertaking that the team members are proficient in the State’s official
language (both oral and written). The auditors must have the H.O/ Branch Office in the allotted
State. (Form U). However, in case if NE States/ UTs where availability of Auditor is scare, the
States/UT may consider the proposals of audit firms from the neighboring States

xii. Firm shall have to depute appropriate no. of teams for timely submission of Audit Report and to
attain quality of audit.
xiii. Each team shall have to be headed by a qualified chartered accountant.

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 Technical & Financial Proposal will consist:

i. Letter of Transmittal (Form T-1)

ii. Technical Proposal format (Form T-2)

iii. Financial Bid format (Form F-1)

iv. Undertaking of presence of HO/Branch offices in State (Form U)

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 Form T-1

Letter of Transmittal

To,

The Mission Director,

State Health Society,
UT of DNH & DD,
Sixth Floor, PWD Multi office Complex,
Market Area, Moti Daman
396 220.

Sir,

We, the undersigned, offer to provide the audit services for [Name of State Health Society] in
accordance with your Request for Proposal dated [Insert Date]. We are here by submitting our Proposal,
having details about the firm and proposed audit fees.

We hereby declare that all the information and statements made in this Proposal are true and accept
that any mis-interpretation contained in it may lead to our disqualification.

The Fees quoted by us is valid till six months from the date of submission of the proposal. We
confirm that this proposal will remain binding upon us and may be accepted by you at any time before the
expiry date.

Prices have been arrived independently without consultation, communication, agreement or

understanding (for the purpose of restricting competition) with any competitor.

We agree to bear all costs incurred by us in connection with the preparation and submission of the
proposal and to bear any further pre-contract costs.

We understand that State Health Society [Insert Name of the State] is not bound to accept the
lowest or any proposal or to give any reason for award, or for the rejection of any proposal.

I confirm that I have authority of [Insert Name of the C.A. Firm] to submit the proposal and to
negotiate on its behalf.

Yours faithfully,

( )

15
 Form T-2
Format for Technical Proposal

Sl. Supporting Documents required to be

PARTICULARS
No. submitted along with this Form
1 Name of the Firm
2 Addresses of the Firm:
Phone No:
Head Office Fax No:
Mobile No. of Head Office In-charge:
Date of establishment of the firm
Date since when is H.O. at the
existing Station

Phone No:
Branch Office 1,2,3……(Particulars
Fax No:
of each branch to be given)
Mobile of each Branch Office In-charge:

Mention the date of establishment of

each branch offices since when
existed at the existing place
3 Firm Income Tax PAN No. Attach copy of PAN card
4 Firm Service Tax Registration No. Attach copy of Registration
5 Firm GST/TAN Registration No Attach copy of Registration
Attach a copy of certificate downloaded
6 Firm’s Registration No. with ICAI from ICAI Website showing the name &
address of H.O., B.O. and partners etc.
Attach proof of empanelment with C&AG
for the year under Audit (2023-24)
7 Empanelment No. with C&AG
confirming that the firm is eligible for
major PSU audits.

No. of Years of Firm Existence &

8 Attach copy of Partnership Deed
Date of establishment of Firm

Attach a copy of Balance Sheet and P & L

Turnover of the Firm in last three Account of the last three years or a C.A.
9
years Certificate give Break-up of Audit Fee and
Other Fees Received.
Audit Experience of the Firm: Copy of the Offer Letter & the Fee
10 1. Number of Assignments in Charged for each assignment.
Commercial/Statutory Audit (Relevant evidences to be given of the

16
 2. Number of Assignments of turnover and fee)
Externally Aided Projects/Social
Sector Project (excluding audit of
Charitable Org.) Institutions &NGOs
3. Experience in the NHM audit
Details of Partners:
Provide following details:
 Number of Full Time Fellow
Partners associated with the firm
 Name of each partner
Date of becoming ACA and
FCA
Date of joining the firm
Attested copy of Certificate of ICAI not
11  Membership No.
before 01.01.2024
 Qualification
Experience
 Whether the partners is engaged
full time or part time with the firm
 Their Contact Mobile No., email
and full Address (Attested copy of
Certificate/letter of ICAI not before
01/01/2024

Note: The firm shall give an undertaking that the team members are
proficient in the State’s official language (both oral and written).

17
 Form F-
1

FORMAT FOR FINANCIAL BID

(Please provide the break-up of Firm’s quoted fees for each work and unit)

Particulars Total Amount (in Rupees)

AUDIT FEE Both in Numeric and in Words.

a. Audit fess--------------- Rs.__________________/-

(Including cost of TA/DA)
b. Service Tax---------------- (Rupees
c. Total Fees--------------- ________________________).

Note: Percentage of funds involved shall not be a

basis of quoting the Audit Fee.

Note: In case of change in the rate of Service Tax the revised Service Tax shall be paid.

18
 Form U
(Letter of undertaking for having the local office in the State)

To,
The Mission Director,
State Health Society,
UT of DNH & DD,
Sixth Floor, PWD Multi office Complex,
Market Area, Moti Daman
396 220

Sir,

We, the undersigned offer to provide the audit services for [ Name of State Health
Society] in accordance with your Request for Proposal dated [ insert date]. We hereby submit
our Proposal, having details about the firm and proposed audit fees.

We hereby declare that our firm is having Head/ Branch offices in the State of
……….and is situated at ………………………………………………………….
……………………………………………………………………………………………
address proof (photocopy of letter for incorporation of firm, lease agreement, phone
connection, Electric Connection etc.) of this office in the State is enclosed herewith.

We hereby also give an undertaking that the firm’s staff deputed for the audit are
proficient in State’s/UTs local language, both in oral and written form.

We, hereby understand that any information given here if found to be false or
misleading will be treated as fraud and appropriate action can be taken in this regard.

Yours faithfully

( )

Encl:
1…………….
2…………….

19
Selection Process of the Auditor:

For the purpose of the appointment of the statutory auditor for 2023-24, following points
should be taken into account-

1. Open advertisement (as per Format for Advertisement as at Form-A) in leading

newspapers at State level and National level for inviting proposals from CAG empanelled
Chartered Accountant firms for statutory audit of State and District Health Societies should
be issued first. A copy of the advertisement shall also be e-mailed to the Institute of
Chartered Accountants of India (ICAI) for webhosting on ICAI website at
[email protected] & [email protected]. (Format of the advertisement is enclosed) – A
copy of the advertisement shall have to be sent to Financial Management Group (FMG) in
MoHFW. Advertisement along with the detailed RFP shall also to be uploaded on the
State’s NHM website.

2. A pre-bid conference shall be held (date to be indicated in the advertisement) wherein

queries/doubts of the potential bidders shall be clarified.

3. The Executive Committee of the SHS will form a Standing Committee on Audit (SCA)
with suitable representation from programme and finance wings. The SCA should
invariably be headed by the Director-Finance or other person nominated by the Mission
Director. This SCA will also act as the Selection Committee for the selection of auditors.
The SCA will subsequently monitor the audit process and the follow-up on audit paras and
Action Taken Reports on those audit paras. After the selection of auditor by SCA, the same
will have to be approved in the meeting of Executive Committee of the SHS.

The detailed scheduled with regard to the tendering process shall be as under-

Advertisement: Advertisement should be made latest by the 1st April, 2024 so the process
of appointment of auditor is completed before 25th April, 2024.

Date for collection of RFP: Within 15 days of advertisement i.e. 16th April, 2024.

Date of pre-bid conference: Next day of the last date for collection of the RFP i.e. 17th
April, 2024.

Last date and time for submission of Proposal: Within one week from the date of pre-
bid conference i.e. 24th April, 2024.

Date and time of opening of Tender: On the day of closing of submission of proposal and
after 2 hours of the closing time i.e. 24th April, 2024.

The selection process of auditor shall be subject to review by FMG, MoHFW, GOI / Office
of Chief Controller of Accounts, MHFW, GOI / Audit parties of the AG or any authorized
person of the MoHFW, GOI.

20
The State at the time of selection of the Statutory Auditor must ensure that the firm was not
engaged as Concurrent Auditor of the State during the year for which the auditor was
engaged or if he has been appointed for the year 2023-24.

The selection will be done by selecting the firm having lowest quotation in Financial Bid
(L-1) after finalizing the Technical proposal. While finalizing audit firms, the firms having
H.O./Local Branch Office in the State capital of the same State for which the proposal is
given may be given preference at the time of finalizing the financial bid. (Such office
should be existed within the State for not less than three years as per the ICAI Certificate).
That is any firm with 2nd lowest financial bid may be considered for appointment for
Statutory Auditor if that firm is having a head office or local branch office in that State.

On completion of selection process, the firm selected shall be awarded the contract of audit
of SHS & DHS by issuing the Letter of Award (LOA). The firm should execute a Contract
with the SHS within 2 weeks of the award of the issuance of LOA.

In case the bidding firm is found not suitable for audit on any reasonable ground like
information by the Ministry/ ICAI/ any State etc., State may reject such proposal without
giving any reason.

21
 Form – A
UT Administration of Dadra Nagar Haveli & Daman and Diu
Health & Family Welfare Department
State Health Society
SELECTION OF AUDITORS - REQUEST FOR PROPOSAL
HIRING SERVICES OF CHARTERED ACCOUNTANT FIRM FOR
STATUTORY
AUDIT OF STATE HEALTH SOCIETY (UT of DNH & DD) & DISTRICT HEALTH
SOCIETY (DHS) - (FOR THE FINANCIAL YEAR 2023-24) under National
Health Mission (NHM)
Govt of India (GOI) in partnership with the States is implementing the National
Health Mission which comprises various programs, with the objective of improving medical
facilities in the areas and seeks to provide accessible, affordable and quality health care to the
population, especially the vulnerable sections. To facilitate implementation of NHM, State
and District level entities (Health Societies) have been registered which work under the
administrative control of the Department of Health & Family Welfare. The UT of Dadra
Nagar Haveli & Daman and Diu State Health Society, invites “Proposal for audit” from firms
of Chartered Accountants empaneled with C& AG and eligible for conducting audit of
major PSUs for the year 2023-24.

Minimum payable fees will be worked out as per the norms of ICAI.

Detailed RFP: Detailed Request for Proposal (RFP) comprising Background, Terms of
Reference (ToR) and Guidelines for submitting the proposal can be either downloaded from
the website www.gem.gov.in.

Important Dates:
i. Last date for collection of RFP from Office of 4th April, 2024.
ii. Date for pre-bid conference: 2nd April, 2024
iii. Last date for submission of Proposal to SHS: 8th April, 2024
iv. Date of opening of financial bid: 15th April, 2024
v. Venue for Pre-bid Conference: Pre-bid Conference would be held at
6th Floor, PWD Multi office Complex, Market Area, Moti Daman, 396 220

Sd/-
Mission Director,
State Health Society,
UT of DNH & DD
Address:
Mission Director, SHS, UT of DNH & DD,
6th Floor, PWD Multi Office Complex,
Market Area, Moti Daman 396 220
Email id:[email protected]
FAX: & Phone: 9726611144

22
 Annexure

Terms of Reference (TOR)

for
Statutory auditor for Pradhan Mantri – Ayushman Bharat Health Infrastructure
Mission. (PM-ABHIM)(Loan no. L4032)
Back ground

PM-ABHIM for the health sector focus on developing capacities of health

systems and institutions across the continuum of care at all levels, primary,
secondary and tertiary, to prepare health systems in responding effectively to the
current and future pandemics/disasters.

Under the project, expenditure incurred for the Strengthening Comprehensive

Primary Healthcare in Urban Areas are eligible for financing. The State Health
Societies will submit the separate annexure with the audit reports outlining the major
activities covered in the project.

Objective of the Audit:

1. The objective of the audit is to provide assurance that the program financial
statements present a true and fair view of the operations and are free from
misstatements.
2. The books of accounts provide the basis for preparation of Financial
Statements and adequate internal controls and supporting documentation are
done for the transactions.
3. Audit of this project will be undertaken along with the Annual Audit being done
at present for all other activities under NHM by the same auditor.

Scope of the Audit

The scope of the audit is subject to the RFP issued for appointment of
Statutory Auditors including the entities covered under PM-ABHIM.

Appropriate supporting documents, records and books of accounts relating to

all activities have been kept. Clear linkages should exist between the books of
accounts and the financial statements presented.

The financial statement should give true and fair view of the financial position
of Project and of its receipts and expenditures for the period ended on that date.

The consolidated financial statements of State Health Society shall include the
scheme of PM-ABHIM besides additional annexure and observations required to be
submitted.
Audit observations other than auditors reservation for a qualified audit opinion
highlighting the deficiencies noted relating to accounting and internal controls

23
including internal control environment, Ayushman Bharat – Health & Wellness
Centres and PM-ABHIM shall be given separately in form of a management letter.

24
 Auditors’ Opinion

To,
The Mission Director,
………. State Health Society,
………………

Report on the Project Financial Statements

We have audited the accompanying audited project financial

statements (APFS) comprising a balance sheet as at 31 March 2024, income
and expenditure statement for the period ended 31 March 2024, related cash
flow statement also for the same period ended and other related statements
of the State Health Society which is implementing a project partly financed
by ADB Loan 4032-IND:Strengthening Primary Health Care in Urban
Areas Program under Pradhan Mantri – Ayushman Bharat Health
Infrastructure Mission (PM-ABHIM) program, Result Based Lending (RBL) for
the year ended 31st March, 2024.
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.

Scope and Basis for Opinion

We have conducted our audit in accordance with standards of auditing (SA)

issued by the Institute of Chartered Accountants of India (ICAI) and as per
scope provided in applicable terms of reference (TOR). The audit 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 as evaluating the overall statement presentation. We are independent
of the Society, in accordance with the code of ethics issued by the ICAI
together with the ethical requirements that are relevant to our audit of the
Society and also under the terms of program agreement signed between ADB
and the Ministry of Health and Family Welfare (MOHFW) dated 23 November
2021 section 2.08 (a), (b) and (c). We have fulfilled our other ethical
responsibilities in accordance with these requirements and the Code of
Ethics. We believe that the audit evidences we have obtained are sufficient
and appropriate to provide a reasonable basis for our opinion.

Opinion

In our opinion, the accompanying financial statements give a true and fair
view , in conformity with the accounting principles generally accepted in
India, of the state of affairs of the society as at 31 March 20XX, {profit} or

25
{loss} from the statement of income and expenditure and its cash flows for
the year ended on that date[OR] give a true and fair view subject to
observations as listed below [OR]do not give a true and fair view [OR] we do
not express an opinion on the accompanying financial statements of the
society. Because of the significant matters described on basis for disclaimer
of opinion, we have not been able to obtain sufficient and appropriate
evidences to provide a basis for an audit opinion on these financial
statements.
Additionally, in our opinion:

1 Proceeds of the loan from ADB loan 4032-INDhave been utilized for the
purposes as per ADB Loan and program agreement. We further
confirm that total eligible expenditure incurred INR XXXXXX till 31
March 20XX are as per these audited financial statements.
2 Financial covenants in the ADB loan 4032-INDloan agreement have
been complied with.
3 We confirm that the Disbursement Linked Indicators (DLI) has been
fully achieved under the DLI verification protocol.
4 Financial Statements of the State is the consolidated Financial
Statements of the State and District Societies.

Additional observations on internal control deficiencies are presented at

Annexure -A in form of a management letter (to be attached to highlight
observations under Ayushman Bharat – Health & Wellness Centres and
PM-ABHIM) or In absence of any internal control deficiencies observed
during our course of audit, no separate management letter has been
issued.

Place:

Date: Signature of Auditor (s)

UDIN No.
Statement of Eligible Expenditure under Strengthening of Comprehensive Primary Healthcare in Urban Areas

Amount in Rs. Crore

Audited Expenditure for Provisional
Name of Reasons for
S.No. FMR Codes the FY 2023-24 (w.e.f. Expenditure as Variance %
Activity variance
01.04.2023 to 31.03.2024) per FMR

I. PM-ABHIM
Ayushman Bharat
- Urban health
To be filled in
and wellness
centres (UHWCs)

NUHM (excluding capital

II. expenditure)
Planning &
To be filled in
Mapping
Programme
To be filled in
Management

26
 Training &
To be filled in
Capacity Building
Strengthening of
To be filled in
Health Services
Regulation &
To be filled in Quality
Assurance
Community
To be filled in
Processes
Innovative
To be filled in
Actions & PPP
Monitoring &
To be filled in
Evaluation
Other, if any
To be filled in
(Please specify)

Total
Expenditure

Signature of Director
Finance
Signature of State Auditor Signature of Mission Director

Schedule…..
STATE HEALTH SOCIETY

DETAIL OF EXPENDITURE, UNSPENT BALANCE UNDER PM-ABHIM AS ON 31-03-2024

Amount (In Rs.)

Figure A

A) Fund Received During The Year :

Date Sanction No Amount

-
Figure B
B) Total Fund Available For Spending (A+B) Sub-total

C) EXPENDITURE DURING THE YEAR

S.NO Major Head Total

Expenditure

27
 Ayushman Bharat - Health & Wellness Centres (AB-HWCs) in rural areas
in seven High Focus States (Bihar, Jharkhand, Odisha, Punjab, Rajasthan,
Uttar Pradesh and West Bengal) and three NE States (Assam, Manipur and
1 Meghalaya).

No. of Ayushman Bharat - Health & Wellness Centres (AB-HWCs) in

2 Urban areas

Block Public Health Units in 11 High Focus States/UTs (Assam, Bihar,

Chhattisgarh, Himachal Pradesh, UT-Jammu and Kashmir, Jharkhand,
3 Madhya Pradesh, Odisha, Rajasthan, Uttar Pradesh and Uttarakhand).

4 Integrated District Public Health Laboratory (No of districts)

5 Critical Care Hospital Blocks in 602 districts

Grand Total PM Ayushman Bharat Health Infrastructure Mission

Sub Total Total

D) REFUNDED TO GOI

E) Unspent Balance as on 31-03-2024

Chartered Accountants State Finance Officer Mission Director

28
 Terms of Reference (TOR)
For
External Auditor the Agency- National Health Mission (NHM) under the
India COVID-19 Emergency Response and Health Systems Preparedness
Project funded by World Bank (Credit No. 9086-IN) & Asian
Infrastructure Investment Bank (Loan No. AIIB-C1660)

Background:
National Health Mission is one of the implementing agency of the India
COVID-19 Emergency Response and Health Systems Preparedness Project
(ERHSPP) in the States/UTs through State Health Societies (SHS). The
Project seeks to prevent, detect and respond to the threat posed by COVID-
19 and strengthen health system preparedness. Under the project, only
actual expenditures incurred (including mobilization advances paid to
contractors/vendors as per the terms of agreement) by the implementing
agencies will be eligible for financing by the World Bank. The implementing
agencies will submit separate IUFR/s reporting the actual expenditure for
the Project during such period for reimbursement by the Bank. The same
will be subject to reconciliation with audited expenditures reported for the
period. Details of the Financial Management and procurement arrangements
for the project are available in the Project Implementation Manual (PIM).
Objective of the Audit:
1. The objective of the audit of SHS financial statements is to enable the
auditors to express an independent professional opinion on the
financial position of funds released to the States/UTs for ERHSPP and
to ensure that the funds utilized to project activities have been used
for their intended purposes.
2. The books of accounts provide the basis for preparation of Financial
Statements. Proper books of accounts as required by law have been
maintained by SHS and also maintain adequate internal controls and
supporting documentation for the transactions.
3. Audit of this project will be undertaken along with the Annual Audit
being done at present for all other activities under NHM by the same
auditor.

Scope of the Audit:

29
1. The audit will be carried out in accordance with the Accepted Indian
Auditing Standards and will include tests and verification procedures
as the auditors deem necessary.
2. External Auditors to verify all funds have been used in accordance
with the established rules and regulations of the project and only for
the purposes for which the funds were provided.
3. Goods and services financed are in adherence to the Bank's guidelines
for procurement (under Components 2 to 6) and/or Government's
rules and regulations (under Component 1) and as per the established
rules and procedures& guidance note issued by the Ministry. (Refer:
Annexure-1 for Project Components)
4. Appropriate supporting documents, records and books of accounts
relating to all activities have been kept. Clear linkages should exist
between the books of accounts and the financial statements
presented.
5. The financial statements have been prepared by the management in
accordance with applicable accounting standards and give a true and
fair view of the financial position of Project and of its receipts and
expenditures for the period ended on that date.
6. Comprehensive assessment of the adequacy and effectiveness of the
accounting and overall internal control system to monitor
expenditures and other financial transactions.
7. Express an opinion as to reasonableness of the financial statements in
all material respects.
8. Include in their reports opinion on compliance with procedures
designed to provide reasonable assurance of detecting misstatements
due to errors or fraud that are material in the financial statements.
9. In addition to the audit report, the auditors will provide the following:
a. Give comments and observations on the accounting records,
procedures, systems and controls that were examined during the
course of the audit.
b. Identify specific deficiencies and areas of weakness in systems and
controls and make recommendations for improvement.
c. Report on the implementation status of recommendations
pertaining to previous period audit reports.
d. Communicate matters that have come to their attention during the
audit which might have a significant impact on the sustainability of
the organization.
e. Auditors will verify the Procurements under Component 1
(Emergency COVID-19 Response) which require to be carried out as
per Government rules and procedures (Refer procurement Chapter
of PIM). In addition, auditors will also verify that anti-corruption
undertakings of the World Bank and AIIB have been signed by the

30
 seller/contractor/consultant as per the format enclosed with the
PIM.
f. Auditor will carry out detailed audit of 10% of procurements
(numbers) samples under Component 1 (samples would be
preferably taken from higher valued procurements covering goods
and services both) and representative of methods/agencies to be
checked for adherence to prescribed guidelines.
Deliverables:
1. Auditor will have to certify the Statement of expenditures as per the
FMR Codes designated for the project and its reconciliation with
unaudited quarterly FMR submitted to GOI depicting the differences.
(Format as per Annexure-2 as per JS(P) D.O. letter no.F.No.Z-
18015/19/2020-NHM-II-Part-1 dated 09/11/2020)
2. Auditor will issue a management letter specifying the weaknesses, if
any, on matters requiring attention of the management.
3. Procurement audit reports in line with scope mentioned under para 9
(e) &(f) above.
4. Auditor to countersign Utilization Certificate prepared by SHS in Form
12C specifying the status of funds received, utilized and unspent
balances along with a statement that all procurement procedures have
been followed as per WB and AIIB while also certifying that
undertaking for Anti-corruption have been signed for all contracts
amounting for more than Rs. 3,00,000/- as per the guidance note
issued by the Ministry time to time.
5. Auditor to issue Audit Opinion as per the revised format of Audit
Opinion. (Format is given as per Annexure-3)

31
 ANNEXURE-1

Project components are outlined below:

 Component 1: Emergency COVID-19 Response
 Component 2: Strengthening National and State Health Systems to
support Prevention and Preparedness
 Component 3: Strengthening Pandemic Research and Multi-sector,
National Institutions and Platforms for One Health
 Component 4: Community Engagement and Risk Communication
 Component 5: Implementation Management, Capacity Building,
Monitoring and Evaluation
 Component 6: Contingent Emergency Response Component (CERC)

32
 Annexure-2
FMR FORMAT FOR REPORTING EXPENDITURE UNDER COVID-19 PROJECT(ECRP-I/-II) FOR FY
2023-24
Amount in Rs.

Sl. As per New COVID FMR Codes

Total
Provisiona
l
Audited Expenditu Variation,
No Expenditure for re (As if any
. FMR Reported
Name of Activity the FY 2023-24
Codes in
(w.e.f. 01.4.2023 to
31.03.2024) FMR/SoE)

1 2 3 4 5 6
B.31 COVID 19 ( Grand Total)
1 Diagnostics including sample Transport
B.31.1 (Total
B31.1 Exp.on procurements of value less than
(a) Rs. 3.00 lakh (out of B31.1)
2 Drugs and supplies including PPE and
B.31.2 masks (Total)
Exp.on procurements of value less than
B31.2(a) Rs. 3.00 lakh (out of B31.2)
Equipment/facilities for patient-care
3 including support for ventilators etc.
B.31.3 (Total)
B.31.3(a Exp.on procurements of value less than
) Rs. 3.00 lakh (outof B31.3)
HR (Exiting and Additional) including
4 incentives for Community health
B.31.4 Volunteers (Total)
5 B.31.5 surveillance & mobility Support (Total)
B.31.5 Exp.on procurements of value less than
(a) Rs. 3.00 lakh (out of B31.5)
6 IT systems including Hardware and
B.31.6 software.etc. (Total)
B.31.6(a Exp.on procurements of value less than
) Rs. 3.00 lakh (out of B31.6)
7 B.31.7 IEC/BCC (Total)
B.31.7 Exp.on procurements of value less than
(a) Rs. 3.00 lakh (out of B31.7)
8 B.31.8 Training (Total)
B.31.8 Exp.on procurements of value less than
(a) Rs. 3.00 lakh (out of B31.8)
9 B.31.9 Miscellaneous (Total)
B.31.9(a Exp.on procurements of value less than
) Rs. 3.00 lakh (out of B31.9)

33
TOTAL EXPENDITURE
Unspent balance as on 01/04/2023
Funds Received From GOI during the Year

UNSPENT BALANCE WITH STATE as on

31/03/2024

SIGNATURE BY
SIGNATURE BY STATE MISSION DIRECTOR STATE DIRECTOR
FINANCE SIGNATURE BY STATE
AUDITOR
PLACE
DATED

Annexure-3

34
 FORMAT OF AUDIT REPORT/OPINION
To,
The Mission Director,
………. State Health Society,
………………

Introduction

We have audited the accompanying expenditure statements / financial

statements of the society under National Health Mission [partly financed for
India COVID-19 Emergency Response and Health Systems Preparedness
Project under World Bank Credit No. 9086-IN & Asian Infrastructure
Investment Bank (AIIB) Loan No. AIIB C1660 (COFN)] implemented
through the ............State Health Society, ………… as of 31 st March, 2024.

Our responsibility is to express an opinion on these financial statements

based on our audit.

Scope

We conducted our audit in accordance with standards on auditing issued by

the Institute of Chartered Accountants 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. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management,
as well as evaluating the overall financial statement presentation. In forming
our opinion we have relied upon the audit findings / observations in ….(nos.)
District Health Society/………. State Health Society's financial statements,
which have been audited by other auditors. We believe that our audit
provides a reasonable basis for our opinion.

Opinion
a. We have obtained all the information and explanations which to the best
of our knowledge and belief were necessary for the purpose of our
examination.
b. In our opinion, proper books of account have been kept by the State
Health Society, so far as appears from our examination of the books.

c. The statements of account dealt with this report are in agreement with
the books of account.

d. The statements of account dealing with this report include funds received
from World Bank under NHM for COVID-19 (Cr. No. 9086-IN) & Asian
Infrastructure Investment Bank (AIIB) Loan No. AIIB C1660 (COFN) and

35
 We have audited the accompanying expenditure statements / financial
statements for the India COVID-19 Emergency Response and Health
Systems Preparedness Project, under IBRD Loan 9086-IN, implemented by
this Society.

In addition, (a) with respect to FMR/SOEs, adequate supporting

documentation has been maintained to support claims to the World Bank
for reimbursements of expenditures incurred; (b) the expenditures so
claimed are eligible for financing under the Legal Agreement; and (c)
Procurements under Component 1 (Emergency COVID-19 Response) have
been carried out as per the agreed procurement procedures.'

With respect to certification (c) above, it is clarified that all procurements of

goods/services/works under Component-1 are carried out as per the
Government rules and procedures. It is further confirmed that the Anti-
corruption undertaking of the World Bank has been signed by the
seller/contractor/consultant and is enclosed in the contract file. Further (a)
Sample of 10% of procurements under Component 1 based on value (rather
than number of contracts) and representative of methods/agencies to be
checked for adherence to prescribed guidelines; and (b) In the report the
value of contracts (in the reporting period) under Component 1 in the State
have been mentioned.
e. Financial Statements of the State is the consolidated Financial
Statements of the State and District Societies.

f. In our opinion and to the best of our information and according to the
explanations given to us the said consolidated accounts of the State and
District Societies, gives the information in the manner so required and
give a true and fair view:-

1. In the case of the balance sheet, of the State of affairs of the Society as
at 31stMarch,2024.

2. In the case of the Income and Expenditure Account of the excess of

income over expenditure / deficit of income over expenditure for the
year ended on that date.

3. In case of Receipts and Payments Account of the receipts and

payments during the year ended on that date.

g. In addition with respect to FMR/SOEs, adequate supporting

documentation has been maintained to support claims to the World Bank
for reimbursements of expenditures incurred;

h. The expenditures so claimed are eligible for financing under the Credit
Agreement; and

36
i. Procurements have been carried out as per the Program Implementation/
Procurement Manual by NHM and other concerned Division(s) of the
Govt. of India.

Place:

Date: Signature of Auditor

(s)

Notes:-
1. In case, a qualified opinion or disclaimer is given by the auditor, the
audit report should state in a clear and informative manner all the
reasons for such an opinion.
2. Audit Report to be accompanied by:
a) Management Letter stating the status of implementation of Program
and response on the remarks of the auditors.
b) Reconciliation of Expenditure as per FMR/SOEs claims with the
actual expenditure as reported in the audited financial statements.
3. Matters which have been underlined/ italics need proper attention of
the auditor.

37
 APPENDIX-C

FORMAT OF AUDIT REPORT

To,

The Mission Director,

………. State Health Society,
………………

Introduction

We have audited the accompanying expenditure statements / financial statements of

the Flexible Pool for RCH and Health System Streghethening National Health Programme
and Urban Health Mission . implemented through the ............State Health Society, …………
as of 31st March, 2024

Our responsibility is to express an opinion on these financial statements based on our audit.

Scope

We conducted our audit in accordance with standards on auditing issued by the

Institute of Chartered Accountants 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. An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. In forming our opinion we have relied
upon the audit findings / observations in ….(nos.) District Health Society/ …….State Health
Society’s financial statements, which have been audited by other auditors. We believe that our
audit provides a reasonable basis for our opinion.

Opinion

a. The statements of account dealing with this report include funds received from GFATM
under RNTCP (Global Fund Grant No. IND-T-CTD 1620).

b. The audited financial statements include funds received from the Asian Development
Bank under “Supporting National Urban Health Mission – Results Based Lending” , Loan
# 3257 dated July 28, 2015”, and amounts claimed under the loan are eligible for
financing under the credit arrangements. The expenditure as mentioned in the respective
schedule for NUHM has been incurred during the year under review for the National
Urban Health Mission by the SHS from all sources of funds including loan proceeds, and
allocation for use of loan proceeds has not been shown separately.

c. We have obtained all the informations and explanations which to the best of our
knowledge and belief were necessary for the purpose of our examination.

d. In our opinion, proper books of account have been kept by the State Health Society, so far
as appears from our examination of the books.

e. The statements of account dealt with this report are in agreement with the books of
account.

38
f. Financial Statements of the State is the consolidated Financial Statements of the State and
District Societies.

g. In our opinion and to the best of our information and according to the explanations given
to us the said consolidated accountsof the State and District Societies, gives the
information in the manner so required and give a true and fair view:-

1. In the case of the balance sheet, of the State of affairs of the Society as at 31st March,
2024

2. In the case of the Income and Expenditure Account of the excess of income over
expenditure / deficit of income over expenditure for the year ended on that date.

3. In case of Receipts and Payments Account of the receipts and payments during the
year ended on that date.

h. In addition with respect to FMR/SOEs, adequate supporting documentation has been

maintained to support claims to the GFATM for reimbursements of expenditures incurred;

i. The expenditures so claimed are eligible for financing under the Credit Agreement; and

j. Procurement of goods and services has been carried out as per the Procurement manual by
Central TB Division and other concerned division of the Govt. of India.

Place:

Date: Signature of Auditor (s)

Notes:-

1. In case, a qualified opinion or disclaimer is given by the auditor, the audit report
should state in a clear and informative manner all the reasons for such an opinion.

2. Audit Report to be accompanied by:

a) Management Letter
b) Reconciliation of Expenditure as per FMR/SOEs claims with the actual
expenditure as reported in the audited financial statements.

3. Matters which have been underlined needs proper attention of the auditor.

39
 APPENDIX-D

FINANCIAL MANAGEMENT LETTER

(Format to be incorporated as part of the Audit Report)

Name of the State:

S. No. Item Remarks/ Response

1 Accounting and Funds flow

2 Are District Units legally registered entities under

the Societies Registration Act?
3 Status in respect of guidelines issued in March
2012 on financial, accounting, auditing, funds
flow & banking arrangements at State & district
level.
4 Are the books being maintained as suggested in
the Finance and Accounts Manual? (please list
the books of accounts maintained at the State and
District level)
5 In the General Ledger, are the ledger accounts (at
a minimum) as per the activity heads in the
Financial Reporting Formats? If not how are
financial reports complied?
6 Is there a clear understanding on the on the nature
of expenditure to be charged under each account
head?
7 What is the basis of recording expenditure at
State and District level i.e. is it based on actual
expenditure reported by Districts/ sub district
units or are transfers recorded as expenditures?
8 In case transfers are recorded as expenditures, is
there a system of monitoring the expenditures
reported against the transfers and eliminating
inter unit transfers, while submitting consolidated
Financial Report of the State to MOHFW?
9 Is any computerized accounting system in use and
if yes, what are the outputs?
10 Are there any delays in receiving funds from the
centre to states and states to districts? Has the
project or any component been out of funds in the
last one year?
11 Are funds transferred by State Health Society to
District Societies or directly to Bank accounts in
the same of CHMO or DMO?
12 Whether the State is transferring the funds to
Districts electronically or by physical transfer?
13 Whether the fund transfer by State to Districts is
being done pool wise like RCH flexible pool or
does the State carry out activity wise fund
transfer to the Districts.
14 What is the average frequency of fund transfer in

40
S. No. Item Remarks/ Response

a year?
15 To what extent have financial powers been
delegated at the state, district and block levels?
16 Are they aware of the new draft guidelines
circulated by the centre for delegation of
administrative /financial powers under NRHM?
17 Problems being faced/ outstanding issues on
accounting or fund management or banking
arrangements
2 Internal Control
(iii)Are Financial Management Indicators being
compiled regularly? Copy of latest indicators may
be requested
(iv) How are FM Indicators being used or followed
up?
(v) Has SPMU been carrying out field checks on
basic financial controls (appendix 13 A of
Manual)
(vi) Is there a system of recording, monitoring and
settlement of advances at all levels i.e. State,
District and sub districts?
(vii) Is there an ageing of the advance and are there
old un-settled advances with staff and others?
(viii) Are further advances provided without
settlement of old advances?
(ix) What steps are being taken to settle old advances,
if any?
(x) Does the project follow the system of single
signatory or joint signatories? Who are the
signatories to the bank account (s)?
(xi) How many Bank accounts are being maintained
and are Bank reconciliations carried out on a
monthly basis?
(xii) Problems being faced/ outstanding issues on
internal controls.
(xiii) Report any procurement which has not been
carried out as per the procurement manual of the
individual programmes such as; RCH-II, RNTCP,
IDSP etc.

3 Financial Reports:
ii. Are States familiar with the guidelines for
preparation of Revised FMR
iii. Are the reporting heads in the FMR aligned with
the AWP and with the ledger accounts in the
General Ledger (to check both at the State and
District units)
iv. Are monthly FMRs submitted by the districts to
states on a regular basis? Has the state
consolidated the monthly FMRs from the districts
for the first quarter of the FY? If so, has it been
sent to the Centre and when? (a copy of the last

41
S. No. Item Remarks/ Response

financial report sent may be requested)

v. Statement of Fund Position: Whether prepared or
not? (Verify the figures from the books of
accounts for any quarter as a cross-check
measure).
vi. Do the FMRs go to FMG and programme
divisions
vii. What are the checks being exercised while
preparing FMRs?
viii. Is physical progress being captured in time
and consistently?
ix. Is physical progress is reported in the FMR along
with the financial progress.
x. Problems being faced/ outstanding issues on
financial reporting
4 Audit:

External:
 Is there a TOR for external auditors and is it as
per the TOR provided in the FM Manual/ RFP?
 Has the auditor(s) been appointed for State and
District Societies for the year 2023-24?
 If yes/no, what was the process of selection of
auditors? For 2023-24 were they from the
shortlist circulated by FMG?
 Was a tendering processes were followed /will
follow to appoint the Auditors?
 Are the bids evaluated for contracting auditors
based on technical inputs or are they cost based?
 What are the fee rates, the coverage and the time
period for which auditors have been contracted?
 Has a single audit firm been appointed or have
districts been divided amongst firms?
 Is there a concept of lead auditor to quality assure
the audit?
 Has SPMU received the model audit report sent
by FMG?
 Have the audit observations on the audit report
for previous FY been shared by the FMG?
 What is the practice for follow up on audit
observations?
 Did the auditor visit the districts or districts
officials were called at the State along with the
records?
Internal:
 Does the State have a system of internal/
concurrent audit?
 Does State plan to have internal or concurrent
audit on monthly or quarterly basis?
 Are internal audit observations being received
regularly and being acted upon?

42
S. No. Item Remarks/ Response

 Please elaborate on effectiveness and

implementation of Concurrent Audit existed in
the
vi. State
vii. Districts
Concurrent audit:
q.Is the state has appointed concurrent auditor for
audit of state and all districts?
r. Is the concurrent auditor has been appointed as per
the guidelines of the Ministry?
s. Is the concurrent auditor has submitting concurrent
audit report regularly?
t. Is the action taken report (ATR) has been submitted
by the district to the state and follow up has been
taken by the state?
u. Is the State has submitted executed summery to the
Ministry?
v. Concurrent audit is being done monthly or
quarterly?

43
 Appendix-B
CHECK-LIST FOR AUDITORS OF STATE HEALTH SOCIETY

Sl. PARTICULARS YES NO REMARKS

No.

1. Whether Audit Opinion is in the

prescribed format giving the World
Bank Credit No.

2. Whether the Annual Financial Statements

(AFS) are in the prescribed format for
Balance Sheet, Income & Expenditure
Account and Receipt & Payment Account

3. Whether the Financial Statements include

the Bank Reconcilation Statement as on
last day of the year

4. Whether Financial Monitoring Report for

the last quarter has been certified by the
auditors and forms part of Annual
Financial Statements

5. Confirm that no advances to Districts/

Blocks/PHCs/CHCs and any other
Agency are shown as expenditure

6. Are there advances outstanding for long

(greater than 6 months)

7. Whether the Utilisation Certificate for all

the Sanctions has been attached

8. Are the Utilisation Certificates are signed

by the Mission Director or any other
authorised person, Program Manager and
by the Auditor

9. Whether auditor has certified that the

amount of utilisation in the Utilisation
Certificate is tallied with the Income &
expenditure Account of the relevant
period

10. Confirm that the Consolidated Annual

Financial Statements include all the

44
 districts annual statements based on the
books maintained by them and have been
duly audited by the same auditor or any
other auditor

11. Whether Management Letter has been

prepared by the Auditors

12. Whether Management has offered its

comments on the observations of the
Auditor in the Management Letter

13. Whether the Annual Financial

Statements are consolidated on the basis
of audited districts accounts and not on
the basis of expenditures reported by the
districts

14. Have you ensured that the Annual

Financial Statements have been
consolidated for Flexible Pool for RCH
& Health System Strengthening, National
Health Programme and Urban Health
Mission

15. Whether Accounting Policies and Notes

on Accounts have been appended to the
AFS

16. Are you sure that none of expense of any

activity has been merged with that of any
other activity

17. Are you sure that all the expenses have

been properly reflected as per the Heads
of Accounts as shown in the FMR for
each programme

18. Whether the accounts finalisation

instructions issued by each Programme
Division has been followed or not

19. Whether a confirmation certificate

regarding the inclusion of all bank
accounts of SHS etc. duly signed by
Mission Director and Director Finance
has been obtained and attached with the

45
 Report

20. Whether the SHS has claimed interest in

delay of transfer of funds from State
Treasury to SNA A/C of SHS in case of
Central Grants from the date of receipt of
funds by the State

21. Whether the auditor has ascertained the

delay in transfer of Central Government
Grants from State Treasury to SNA A/C
of State Health Society

46