Internal Control Framework

This chapter lists the key internal controls incorporated in the project design. These are:
  • All projects accounting unit will furnish quarterly unaudited interim financial reports to PCU.
  • Spending units operating commercial bank accounts will prepare bank reconciliation statements on a monthly basis.
  • Respective Controlling Offices for Spending units operating through the treasury will reconcile accounts with the State Accountant General (A&E) on a quarterly basis. This is in line with the existing control framework laid down by the State Financial Rules.
  • Service standards will be laid down regarding release of payments, approval of bills etc. Payments will be made through EFT/RTGS wherever possible.
  • Almost 70% of the Project funds are estimated to be spent on civil works. The Project design provides for third party technical supervision of all civil works which will reinforce assurance on the end-use of funds.
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This chapter lists the key internal controls incorporated in the project design. These are:
  • All projects accounting unit will furnish quarterly unaudited interim financial reports to PCU.
  • Spending units operating commercial bank accounts will prepare bank reconciliation statements on a monthly basis.
  • Respective Controlling Offices for Spending units operating through the treasury will reconcile accounts with the State Accountant General (A&E) on a quarterly basis. This is in line with the existing control framework laid down by the State Financial Rules.
  • Service standards will be laid down regarding release of payments, approval of bills etc. Payments will be made through EFT/RTGS wherever possible.
  • Almost 70% of the Project funds are estimated to be spent on civil works. The Project design provides for third party technical supervision of all civil works which will reinforce assurance on the end-use of funds.
  • Payments to contractors by DDRCS, will be made only when
                  a)   contractors invoices are recommended for payment by the Chairperson APMC/Sarpanch Gram Panchayat/Producer Association is submitted to DDRC and
                  b)    The invoices are also countersigned by the Service Provider and field engineers of MACP..
  • Once bills approved by the above-mentioned parties are submitted to the DDRC, the DDRC shall submit the bill to the treasury within 7 working days.
  • Funds will be released to all spending units on a quarterly basis only on submission of IUFRs/Monthly accounts.
  • The Project shall submit annual audited financial statements to the Bank within six months from the end of the financial year. If the Financial statements are overdue for more than 4months (i.e. 4 months after the mandatory six month period from the end of the Financial Year), the Bank will discontinue disbursements to that spending unit / component of the Project.
  • If the internal/external auditors identify any ineligible expenditures, the project will be requested to clarify the same and get it re-certified by the auditor within 12 months failing which the Bank will adjust the amount of ineligible expenditures against future claims.
  • The maximum limit of expenditures against hand receipts would be Rs. 1000/-
  • The FMM will be a living document. It will be reviewed periodically to ensure that it remains valid and adequate during project implementation and may be amended as per requirements on the ground. However every change will need to be approved by the Project Director, Chief Financial Controller and the Bank. 
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