Internal Audit Program

Audit Program for Purchase & Procurement

Business Area Purchase & Procurement

Internal Control Objective All purchases are authorised and valid.

Audit Program for test of control Check that all purchases orders raised are against approved Indent For Procurement (IFP). Check that approval as per Chart of Authority is taken before formally issuing a PO to the vendor. Check that regular reconciliation of open purchase order and actual receipt is done

All PO raised are in the interest Check that more than one quotations are taken of the company. from vendors and the same are technocommercially evaluated. Check that where more than one quotation is not available, note for reason for single quotation has been provided and approved. Vendor performance is as per expectation of the company.

Check that vendor evaluation is done at a regular interval. (Note: Vendor Evaluation parameters shall be developed in due course)

Amount posted to Accounts Payable & Purchase account account represents goods actually received.

Check vendor liability is booked only when PO, GRN and Vendor invoice are received.

Map procedures for vendor returns. Ensure that returns are communicated to the purchasing department and debit memo’s are prepared and forwarded to accounts payable in a timely manner. Check that all adjustments related to Accounts Payable are approved. All purchases are recorded in the accounting system and in the appropriate period.

Check that statements and invoices from suppliers are reconciled in the vendors account regularly and the differences are investigated. Supplier invoices and GRN before, or after the end of an accounting period are scrutinized and/or reconciled to ensure complete and consistent recording in the appropriate period.

All payment for purchases are made only for goods actually received.

Check that all supporting documents are reviewed before approval for payment is made.Also check that vendor payment is approved as per the chart of authority Check that all vendor invoices are marked in such a manner that they cannot be submitted for payment for second time.

Audit Program for Other expense

Business Area

Other expenses

Internal Control Objective

Audit Program for test of control

All other expenses incurred are authorised.

All other expenses incurred are approved as per the Chart Of Authority.

All other expenses incurred are recorded accurately

All other expenses are reconciled with supporting details and difference if any is resolved.

Expenses are only made for goods or services received or valid expenses incurred

Management reviews supporting documentation before approving payments. Supporting documentation is marked once payment is made to prevent duplicate payment.

Audit Program for Contractor Management Business Area

Contractor Management



Check that contracts entered into or work order issued All contracts agreements/Work to the contractor are within the authorisation limits as order issued are authorised. per the chart of authority. All work orders/contract agreement entered into are in the interest of the company

Check that more than one quotations are taken from contractors and the same are techno-commercially evaluated. Check that where more than one quotation is not available, note for reason for single quotation has been provided and approved.

Contract conditions are complied with

Check that the contractor has executed and submitted Corporate guarantee before the commencement of any portion (package) of the work. (Only for cases where such clause exists as per work order or agreement) Check that guarantee is kept valid upto the completion of the work. (Only for cases where such clause exists as per work order or agreement) Check that the contractor has taken insurance and submitted necessary documents as per the terms of contract.(Only for cases where such clause exists as per work order or agreement) Check that certified (by both contractor and RDPL) measurement sheet are attached with R.A bill. Also check that R.A bills are attached with supportings as mentioned in the contract. Check that monthly statutory compliance declaration and certified stock reconciliation statement are attached with the R.A bill. Check that the stock reconciliation statement are properly calculated. (Only for cases where such clause exists as per work order or agreement). Check that retention money is held correctly as per the terms of contract.Also check that R.A bill has been calculated as per terms of the contract. (Only for cases where such clause exists as per work order or agreement) Check that the retention money is not returned to the contractor before the completion of the Defects Liability period. (Only for cases where such clause exists as per work order or agreement) Check that contractor payment is authorised as per the chart of authority before payment. Check that arithmetical accuracy of the R.A bill is checked before payment Check raw material consumption pattern as per BOQ. Any significant deviation is analysed and approved by the company. Also check that stock reconciliation statement is submitted monthly with every R.A bill and is approved by the company. Check that the contractor maintains a Quality Manual for the project. Also check the measures and reports submitted by the contractor for Quality assurance. (Only for cases where such clause exists as per work order or agreement) Check that the contractor maintains a Site Safety Manual for the project. Also check the measures and reports submitted by the contractor for Quality assuance.(Only for cases where such clause exists as per work order or agreement)

Change orders are authorised.

Check all change order requests are reviewed and approved by RDPL. Check that change order log is maintained by the company. Check that all change order requests are assessed for possible impact (to project cost and functionality) before approval. Check that explanations,documented cost,schedule and technical support are attached with Change Order proposal.

Audit Program for Fixed Asset Business Area

Fixed Asset

Internal Control Objective All Fixed Asset acquisition are approved

Audit Program for test of control Check that approval as per the Chart Of Authority is taken prior to the acquisition of Fixed Asset. Compare recorded changes to the fixed asset register/ Fixed Asset account to authorized source documents.

Reconcile asset acquisition All Fixed asset acquired are properly supporting details with entries in the recorded in the correct period. Fixed Asset Register.

Depreciation charges are accurately calculated and recorded.

Check that depreciation charges are calculated as per generally accepted accounting standard and at the prescribed rate.

All disposal of fixed assets are approved

Check that approval as per the Chart Of Authority is taken prior to disposal of fixed asset. Compare recorded changes to the fixed asset register/ Fixed Asset account to authorized source documents.

All disposal of fixed assets are accurately recorded.

Review calculation of profit or loss for disposal of fixed asset. Also scrutinize the supporting documentation and the journal entry passed in this regard

All fixed assets are safeguarded

Physically verify the fixed assets of the company including at site. Check whether system exists wherein security personnel whether all goods leaving the premises are accompanied by duly completed documents like Goods Returned Note, delivery note etc.

Audit Program for Treasury Business Area

Treasury



All investments or disinvestments made are approved

Check that all investments and disinvestments are approved by the investment committee decided by the Board.

All investments or disinvestments are accurately recorded in the accounting system.

Check all investments and disinvestments ledger accounts with corresponding supporting documents. Reconcile any difference.

All borrowing decisions made are approved.

Check that all borrowing decisions are approved by the management/ Board

Check all borrowing ledger accounts with All borrowings are accurately corresponding bank statement/supporting recorded in the accounting system. documents. Reconcile any difference. Review loan repayments to ensure all repayments are recorded correctly Loan repayments are as per Loan Check that loan repayment requests are as agreement per the loan agreement. Interest are properly calculated and recorded in the accounting system

Review all interest expenses and interest income to ensure all interest are recorded correctly in the accounting system. Check that interest is reconciled to the bank statement and difference if any is acted upon.

Audit Program for Cash & Bank Business Area

Cash & Bank



All Bank and cash transactions are authorised.( Authorisation as All bank & Cash transactions are per the Chart Of Authority authorised wherever applicable). All bank transactions are recorded accurately and in the correct accounting period

Check that bank transactions are recorded immediately in the Accounting system. Check bank reconciliations are prepared monthly and any long outstanding items are taken care of immediately. Verify accuracy of the Bank reconciliation prepared Inspect postings of bank transactions to the general ledger accounts

Check that all cash & bank All cash & bank transactions are transactions are made only made against proper against duly approved bills and supportings documents. Control exists over custody of cheque book.

Check that cheque books are lying only with the person assigned with this responsibility. Review the sequence of cheque numbers and enquire into missing numbers

Cash is safeguarded

Petty Cash at Site

Surprise physical verification of cash is carried out.

Check that no single expenditure Petty cash at site conforms with of more than Rs 20000 is made company policy. from the petty cash at site. Check all the expenditure above 5000 are pre-approved by Sr.Vice President - Projects. Check all expenses are approved by the Site-in-Charge and have post facto authorisation of Sr.Vice President-Projects.

Cash at site is safe guarded

Insurance with respect to cash in transit and cash at site is taken.

Audit Program for Project Cost & Schedule Management Business Area

Construction Schedule Management


Audit Program for test of control Actual construction activities are Construction schedule is managed regularly reviewed with the scheduled to ensure completion of project on activity. Delay in work schedule are time. regularly analysed.

Audit Program for Chart Of Authority Business Area

Chart Of Authority

Internal Control Objective Check that transactions are authorised as per the Chart Of Authority

Audit Program for test of control Check that approval as per the chart of authority has been taken for: a) Placement of construction contract b) Placement of supply contract c) Issue of Purchase orders & Work Orders d) Issue of orders for Projects e) Purchase of Hardware/Software or Rental of Hardware/Software f) Rental of Fixed Assets g) Approval for disposal of fixed assets h) Orders for Printing & Stationery i) Repairs & Maintenance of company vehicles j) Accept/Reject materials and approve payments k) Approval of Gate pass l) Approval of payments, receipts,write offs, Losses & Misc, Bank & Cash Transactions m) Travelling & Conveyance n) Other Contracts o) Gifts & Subscription p) Cost allocations

Internal Audit Program

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