Annexure 24

reports are free from material mismanagement and that terms of the loan agreement are complied with in all material respects.
1) Objectives :
The overall objectives of Internal Audit is o provide the project management with independent assurance that (i) the internal controls established by management are designed appropriately and is commensurate to the nature and size of the project (ii) verify whether the overall financial management and specifically internal controls as documented in the Project Financial Management Manual (FMM),  and the Project Implementation Plan (PIP) are in practice  and working effectively. In addition, it is expected that internal audit should play a role in assisting management in bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management and  internal controls

1. Scope
In conducting the audit, special attention should be paid to assessing whether adequate controls have been established and complied with to ensure:

  1. All project funds have been used in accordance with the conditions of the relevant legal agreements [1] and only for the purposes for which the financing was provided;

  2. Project assets are adequately safeguarded and used solely for their intended purposes; and

  3. All necessary supporting documents, records, and accounts have been kept in respect of all project transactions; including expenditures reported via Interim Un-audited Financial Reports (IUFR).

  4. Provide management with evidence based feedback on  adherence to Procurement manual by project authorities and community procurement guidelines at  the level of GP/Producer associations

 2. Coverage for the Audit -
The audit would cover the entire project i.e., covering all implementing units on a sample basis.  The sample selection would be based on an assessment of the risks applicable to the operation.  The audit would also cover all consultancies or other contracts that may be entered into by the implementing agencies.

3. Specific areas of coverage of the audit will include the following :

  1. An assessment

Dept/Cell: 
Finance