PRE AUDIT 12 13 by t4dkUT78

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									THE ANDHRA PRADESH DAIRY DEVELOPMENT COOP. FEDERATION LTD.
                  LALAPET : HYDERABAD 500 017.
                            *`*`*`*`*`*`*
Cr.No.587/G/2002.                              Date:02.06.2012.
To
The Secretary
Institute of Chartered Accountants of India Hyderabad chapter.
Southern India Regional Council (SIRC),
Red Hills,
Hyderabad.
Sir,
        Sub: APDDCF LTD – Budget Section - internal Audit Cum Pre- Audit
             Work – Sealed quotations invited from Chartered Accountants/ Audit
             Firms – Reg.
                                      *`-*`-*`-*`-*
        APDDCF Ltd. desires to have internal Audit cum Pre-Audit for the functions
at APDDCF Ltd. The scope of Audit will cover Head Office, Marketing Department,
Milk Products Factory, Hyderabad, including Tetra packs of the APDDCF Ltd.
Lalapet Hyderabad, RSM i.e (18)Zonal offices (8) Dairy Parlours and sale of Bi –
Products during Assembly & Fish medicine Special orders institutions and credit
sales to institutes etc. The turnover of the Organization is around Rs.500.0 Crores
per annum and it needs internal Audit cum Pre – Audit on day to day basis. The
terms and conditions can be obtained through web site www.apddcf.go.in and also
the firms can visit APDDCF Ltd. office and go through the transactions and
organization details.
        Interested Chartered Accountant firms, who are having well experience in
Internal Auditing of        Co-operative Institutions/Commercial Organizations/Dairy
farms     with experienced         staff may offer their quotations with profile The
quotations should reach this office on 12-06-2012 before 3.00 p.m. The same
will be opened on the same day at 4.00 p.m.
                       This may kindly be displayed in the notice board.

                                                                    Sd/-
                                                               Executive Director

Copy to M/S . . . . . . . . . . . . . . . . . . . CA , for information.




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    THE A.P. DAIRY DEVELOPMENT COOPERATIVE FEDN. LTD.
                LALAPET : HYDERABAD 500 017.
               JOB CHART FOR PRE-AUDIT / INTERNAL AUDITORS FOR
                    HEAD OFFICE, MARKETING AND MPF HYD.

       For better control on the accounts and production records for avoiding losses
in A.P. Dairy Development Cooperative Federation Limited the Following job chart is
prepared for pre-auditors for immediate implementation.
       Check list to pre-auditors for offices of the Head office, MPF Hyd, and
Marketing..
                                    To be verified daily with reference to cheque
                                    counter foils, cash receipts releases, remittances,
1    Cash Book
                                    cheque memo register, Bank cash vouchers, Cash
                                    debit vouchers, CRVs.
                                    To be verified daily with reference to UAS code
                                    Numbers,    P.O./   Sanction    Orders   issued       by
2    Pre-Auditing of Bills
                                    competent authority, stock entries, sanction of
                                    Budget, H.O. circulars rules etc.
                                    To be Verified daily with reference to Cash
3    Cheque Memo Register
                                    Receipts and Payments.
     Bank Reconciliation            To be verified monthly with ref. to Cash/Bank

4    (Operative and Non –           Book and Bank pass sheets, remittances of
     Operative Account.)            operative account/ Non Operative Account.
                                    To be verified monthly with reference        to Non-
     Bank reconciliation (Non-Op)
                                    Operative account pass sheet Debits with       Head
5    between MPF, Marketing. to
                                    Office .Credits (Milk shed remittances list will be
     Head Office.
                                    provided every month by H.O.)
                                    To be verified weekly with reference to Cash drawn
6    Acquaintance Register.
                                    and Disbursements made.
     Monthly net receipt and        To be verified monthly with Cash Book and
7
     payments account.              Vouchers.
                                    To be verified - JVs passed towards recoveries, IUT
8    Journal Entries (Monthly)
                                    of materials adjustments of advances. etc.




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                                    To be verified monthly with reference to Net
9   General Ledger
                                    Receipts and Payments and JVs.
                                    To be verified monthly with reference to balances
10 Monthly trial balance
                                    of General Ledgers.
11 Purchase orders / Sanction To be verified with reference to requirement of
    orders                          materials, delegation of powers, terms of payment,
                                    taxes and duties, calling of tenders / quotations
                                    purchase procedures of Federation etc, (the unit
                                    officers should send all the files before issuing the
                                    Orders for reference to pre-auditors)
12 P.T.C. rate contract for inward To be verified with reference to Tender finalization
    / outward                       register and terms and conditions of tender
                                    notification (the unit officers should send all the
                                    files to pre-auditors for reference before issuing the
                                    orders to P.T.C.)
13 Stock register of milk & Bi- With reference to Procurement, Manufacture of
    products.                       products.
14 Gross sales of milk              The   milk   supplied    for   sales    against      cash
                                    /credit/special/advances       each    card   will       be
                                    maintained at MPF with rates and values based on
                                    the daily truck sheets and gate pass. Subsidiary
                                    books also maintained separately for the milk
                                    supplied Institution-wise (credit/advance). This is
                                    to be verified with reference to daily truck sheets,
                                    gate passes, dispatch book and stock registers.
15 Gross sales of Bi-products       The MPF maintains Sales Registers for bi-products
                                    separately for ghee, SFM, butter milk etc. This is
                                    to be verified with reference to indents, gate pass,
                                    stock registers.
16 Receipts of cash and its         Daily sales of milk, bi-products, receipts of cash
    remittances                     and its remittance to be checked with reference to
                                    each receipts books and remittances slips.




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17 Dues of cash sales. dues of      To be checked time to time and advise the
    sundry debtors (credit sales)   manager to minimize the dues.
18 IUT difference for the milk      To be checked with dispatches gate passes and
    and products sent /             acknowledgement received from other Dairies.
    Received.                       Shortages are to be intimated to Head Office.
19 Physical stock verification of   To be verified with book balance to ground
    milk and milk products.         balances and recorded in the registers concerned.
                                    In case of any shortage, that is to be intimated to
                                    Head Office.
20 Physical stock verification of   With reference to purchases/IUT and issues with
    stores.                         indents.
21 Coal, polythene film, stores     To be verified with reference to purchases, IUT
    consumables.                    receipts and issued with indents.
22 Diesel for generator vehicle     Purchases and consumption with log book.
    fuel
23 Materials sent out for repairs   To be verified with gate passes and receipt through
    (mechanical. Electrical)        security records.




                                                                                    4
Sl.No   OTHER CHECKING :
1       Physical verification of Cash   With reference to Cash Book, Imprest, U.D.
                                        pays.
2       Postage                         With reference to Postage register.
3       Physical    verification   of With reference to purchase/IUT receipts and
        store/assets “a” Fixed assets disposals against indents with reference to
        register.                       purchases existence of assets.
4       Service registers.              To be verified with reference to entries of
                                        sanction       of   Increments,       Leaves,     LTC,
                                        transfers etc.,
5       Last Pay Certificate            To   be      verified with      reference    to   LPCs
        register.                       received and issued.
6       Sale of Tender forms            To      be     verified     with      reference       to
                                        advertisement and number of forms sold.
7       Personnel Administration        Verification of leave records, pay fixation,
        records.                        disciplinary cases, contracts agreements,


8       Vehicle Log Book                To be verified with reference to diesel used
                                        and number of Kms covered for official use.
9       Telephone & Trunk calls         With reference to official call booked.


10      Employees Income-tax            With      reference       the    salary     payments,
                                        recoveries and Income-tax rules.
11      Checking of fortnight milk The quantity of Fat and SNF acknowledged
        bills.                          by the receiving unit i.e MPF Hyderabad for
                                        quantities dispatched by the milk sheds for
                                        the fortnight. For this, quantity of Fat and
                                        SNF, the local sales Fat and SNF has to be
                                        added. For this closing stock Fat and SNF
                                        to      be     deducted         opening-stock     and
                                        reconstitution.




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        While attending all transactions the pre-auditors should give the Certificate
as to verification to the following the records along with a report on irregularities
noticed in payments, remittances, stocks, agreements, contracts etc., every month.


1) Cash book
2) Pre-auditing of bills.
3) Acquittances.
4) Bank remittances.
5) Physical verification of cash on hand, DDs on hand.
6) Gross sales of milk at MPF and it’s offices.
7) Gross sale of milk and feed at feed mixing plant.
8) Gross sale of Bi-products at MPF and it’s offices etc.
9) Receipt of daily sales cash and its remittances.
10) Physical stock verification of milk, bi-products, stores.
11) Sales ledgers credit institutions and advance cards milk and
     Bi-products & feeds.
12) IUT difference in stock transfers Milk, Bi-products.

        The Certificate to be submitted along with irregularities noticed to General
Managers of concerned       under copy to General Manger (F&A) in Head Office,
Managing Director, AP Dairy Development Cooperative Federation limited .In turn
the General Mangers concerned, should attend the objections raised and initiate
action for recovery of losses and intimate facts to the General Manger (F&A) ,
Managing director of APDDCF .Limited.

       The Pre-auditor/Internal-auditor has to guide the Management for any
improvements opined by them of improving the profitability of the Organization.


1.      They have to prepare the monthly audit report and quality for any items,
        which are important for management notice. These have to be sent to the
        Head Office every month.




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2    The auditors will have to suggest the economical measures, on their
     observation, that are advantageous in the interest of the Organization i.e. for
     the qualification mentioned above.
3    The auditors have to verify the budget slips before admitting any expenditure
     the budget slip must contain the total budget allotted under the particulars/
     head and the amount spent so far, the present claim and the balance
     available


TERMS AND CONDITIONS:-


1    The details of checks to be undertaken during the course of internal audit
     and pre-audit, are indicated in the enclosed statement.
2.   The Auditor will have to keep the required experienced personnel for
     conducting the pre-audit/ internal audit on a day to day basis regularly and
     the above personnel have to be stationed at Head Quarters on all working
     days during the office hours.
3    The detailed working arrangements will be finalized as and when the work is
     commenced.
4.   In addition to the items referred in the enclosure, any other related items of
     audit, work have to be carried out by Pre-auditor.
5    This is only job work contract. The personnel working with Pre-auditor will
     have no claim, for any future employment in the milk shed or else where in
     this Organization.
6    The information classified or other wise which Pre-auditor will come across,
     due to this assignment, should be treated as confidential and should not be
     divulged and made use, for any other purpose other than this Assignment.
7    This contract is terminable in the event of the work being not satisfactory or
     irregular attendance and other reasons, which may lead the Federation to
     conclude that, the Pre-auditor is not interested to complete the Assignment.
8    The contract may also be terminated at any time at the discretion of the
     Federation without assigning any reasons there for.
9    The contract is renewable every year subject to a maximum of 3 years only,
     on obtaining the performance certificates from the concerned authority.


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PRE-AUDIT CHECK SLIP:-


1.    Is the 13 digit code number entered properly.
2.    Does the Code Number agree with description of head of account.
3.    Have you checked, whether there is budget provision and allotment for the
      particular month of passing for payment or incurring of expenditure.
4.    Has the expenditure been duly approved by the appropriate administrative
      authority, as per the delegation of powers.
5.    Has the appropriate procedure been adopted in passing the Tenders.
      Quotations prices etc.
6.    Has the appropriate purchase order been issued to the supplier claiming
      payment.
7.    Have the goods for which payment is claimed been received acknowledged
      and entered in the stock register and certified to be as per specification/
      terms and conditions and certificate to this effect furnished (This is for
      supply of goods).
8.    Has the payment been made only as per the rates contained the purchase
      order, it is an escalation clause, whether it is approved and as its correctness
      been checked.
9     Has the advance stamped receipt been obtained from the party.
10    Has the party submitted appropriate bill for making payment.
11    Is the claim of AP VAT, Service tax and other levies of the party appropriate.
12    If there is need for deduction of IT/VAT at the time of payment, has the same
      been done.
13.   If any deductions are to be made towards security deposit, has the
      same been done.
14    If it is a final bill, for any work of supply and executed, has the satisfactory
      completion of contract been certified by the appropriate authority.
15    If the bill is for conversion of goods, has it been checked, whether the loss is
      within the norms and the correct quantity on the Finished Products as per
      norms has been supplied.




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16    a) Whether bill are prepared properly and legibly with all enclosures and as
      per instructions issued from time to time.
      b) Whether totals are correct and whether debit and credit totally tally.
      Whether amount noted in vouchers are tallying with the bill. And whether
      all supporting documents are attached.
17.   Whether    checked    the arithmetical accuracy and       all the   supporting
      documents are attached.
18    Any other item requiring attention of pre-auditors.
19.   Passed for payment of Rs.______________________________




                                               Signature of the pre-auditors
                                                   (with date & stamp)




                                                                                  9
Notes:


1.       Particular item may be ticked (√ ) after due verification.

2.       If the bill is defective, the bill may be returned to the sending authority for
         rectification. of the   omission by specifying the exact irregularity against the
         relevant Column.

3.       Piece-meal objections may please be avoided and all bills should be disposed
         off, expeditiously maximum within 2 days. However urgent bills have to be
         disposed-off immediately.

4.       Bills should not be kept pending or returned on the plea that, the concerned
         assistant is not available.

5.       Over writings and insertions should be avoided.


6.       Ticks, Pass Orders, Pre-audit stamp etc., should not be placed over the Code
         Numbers.




                                                                                       10
 A.        THE SCOPE OF WORK.
     Verification of Production Department records in respect of FGS.
     Participating from the beginning of notification of the Tenders, Verification of the
      approval.
     Verifying all the purchases orders/ work orders and verification of approvals.
     Verification of all receipts and payments vouchers of cash and bank and journal
      entries.
     Reconciliation of all Bank Accounts.
     Verification of daily receipts from Distributors as per the Computer Statement.
     Physical verification of stores and milk products as on 31st march every year.
     Audit of Bi-Products sales during Assembly section, Fish medicine, special
      orders Institutions and credit sales to Institutions etc.


B.    ADDITIONAL SCOPE OF WORK TO BE INCLUDED>
      a) MPF Hyderabad.
      i)   Monthly audit of Zonal Offices with respect to Card Sales and its remittances
                including card sales at AP Online, E-Seva. The report is to be submitted
                before 15th of every succeeding month. Audit of Special order sales at all
                Zonal office.
      ii) Monthly audit of Credit Sales and Institutional sales and furnishing of report
                duly showing the Closing Balance at the month end.
      iii) Monthly Audit of Sales of bi-products at Dairy Parlours and also special
                occasions such as Exhibition, Fish Medicines etc.
      iv) Conversion Account as and when the conversion took place. The auditors
                have to furnish report together with stock account and mentioning the
                yield of Production.
      b) Marketing Head Office.
           i)      Internal audit of Stock Accounts furnished by the RSMs together with
                   product wise stock account every month.




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C.   ADDITIONAL SCOPE OF WORKS:

    Advisory services in Income Tax, AP Vat, Services Tax and information
     regarding latest amendments in respect of Income Tax and Service Tax from
     time to time.
    Verification of TDS returns and filing thereon.



D.   PAYMENT OF FEE.

        Monthly Audit Fee will be paid on submission of report every month.
        The bill shall be submitted in duplicate along with stamped receipt
         enclosed with Audit Report for payment of audit fee.
         Payment will be made with in 15 days.




                                          GENERAL MANAGER (F&A)
                                            A.P.D.D.C.F. LTD




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