9. Auditing

1. Audit will comprise of both external and internal audit
 EXTERNAL Audit :
2. The external audit of the project will be conducted by the C&AG for the line departments, and MSWC . The consolidated unaudited financial statements of the expenditures incurred by the departments under the project will be submitted to the C&AG latest by June 30 th . This will provide three months to CAG to undertake audit, up to September 30 th. Following this, in case if the C&AG is unable to submit the audit report by due date (i.e. September 30 th), the project may, after seeking confirmations as may be required under the laws of the land, assign the audit of the departmental expenditures to a private chartered accountant firm which is independent and acceptable to IDA.
     Non compliance to the above may invoke, remedies as per Bank’s Operational/Business Policy 10.02. In other words disbursement to the Project based on IUFRs will be stopped. However, for the autonomous bodies namely ATMAs, VANAMATI, ,MSAMB, MSWC and NIPHT, the remedy will be applied to the defaulting entity and other entities will not be affected by the non-performing entitity/ies.
3. Audit of expenditures incurred by ATMAs, VANAMATI, the expenditures from beneficiary contribution at the DDRC level and NIPHT will be conducted by private firm of Chartered Accountants. The Chartered Accountants will be contracted by  PCU, one for each revenue division of the State. The selection of audit firms will be done as per the World Bank procurement guidelines and as per selection criteria agreed with the Bank.
4. Audit by C&AG will be conducted in accordance with generic TOR agreed with the C&AG for audit of bank financed projects. Audit by private CA firm(s) will also be conducted in accordance with pre-agreed TORs. In addition, an audit report by the C&AG for the designated account held

Dept/Cell: 
Finance

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