BIODIVERSITY CONSERVATION & RURAL …envfor.nic.in/downloads/public-information/Financial...

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FFFOOORRRMMMAAATTTSSS BIODIVERSITY CONSERVATION &

RURAL LIVELIHOOD IMPROVEMENT

PROJECT

PREPARED BY

GOVERNMENT OF INDIA

MINISTRY OF ENVIRONMENT & FOREST

2011

VERSION 1.0

FINANCIAL MANAGEMENT- ANNEXURES & FORMATS

Version 1.0 2 | P a g e

PREAMBLE

TITLE

This document is the “Financial Management Manual Annexures” for the Biodiversity

Conservation and Rural Livelihood Improvement Project. This manual needs to be read in

conjunction with the main FM Manual. A separate manual exists for Procurement procedure

and hence the same is not reproduced in this manual.

OBJECTIVE

The purpose of the manual is to provide assistance and guidance to the users and stake

holders on the relevant reporting requirements.

VERSION

This is the first version of the manual. It would be revised from time to time as per the

project needs in consultation and concurrence with World Bank and Ministry of Environment

and Forests (MOEF).



TABLE OF CONTENTS

Annexure I. STATUTORY AUDIT TOR (AG) ........................................ 4

Annexure II. STATUTORY AUDIT TOR (CA FIRM) .................................. 20

Annexure III. INTERNAL AUDIT TOR ............................................. 38

Annexure IV. INTERIM UNAUDITED FINANCIAL REPORT ............................. 46

Annexure V. MOU ............................................................ 57

Annexure VI. GFR RULES FOR GIA .............................................. 62

Annexure VII. CONDITIONS FOR IMPLEMENTING AGENCIES ........................... 64

Annexure VIII. DFP RULE – 20 ................................................. 66

Annexure IX. FORM GFR 19- AFORM OF UTILIZATION CERTIFICATE………………………………………………67

Annexure X. GFR RULES ...................................................... 68

Annexure XI. AUDIT OF GIA ................................................... 72



ANNEXURE I. STATUTORY AUDIT TOR (AG)

Background

Government of India and World Bank are embarking on a BCLRIP project which will support

Government of India’s efforts to prevent degradation of biodiversity within the country.

It will help GOI mainstream biodiversity and improve rural livelihoods in development

planning in areas that surround biodiversity sensitive areas, including protected areas.

In the long term, it will assist the country to protect its valuable forests and

biodiversity, improve the viability of its protected area network and ensure the survival

of critical species. It will contribute towards improving the contribution of

biodiversity to local livelihoods so as to enhance the incentives for conservation and

help alleviate poverty in remote rural forested areas. A broad implementation set-up

envisaged for the project is described below:

• The Ministry of Environment and Forests (MOEF) through its Conservation and Survey

Division (CS&D) will be overall responsible for overseeing and coordinating the

implementation of the project.

• At the state level, each of the two States (Gujarat & Uttarakhand) will have a

landscape Society for implementation and monitoring of project activities.

• Below the landscape level, there will be community level societies in case of

Gujarat and Van Panchayat in case of Uttarakhand.

• Apart from the above there will be learning centres at Periyar, Kalakad, Gir and

WII which will be carried by respective societies.

Objective

The essence of the World Bank1 audit policy is to ensure that the Bank receives adequate

independent, professional audit assurance that the proceeds of World Bank loans were used

for the purposes intended,2 that the annual project financial statements are free from

material misstatement, and that the terms of the loan agreement were complied with in all

material respects.

The objective of the audit of the Project Financial Statement (PFS) is to enable the

auditor to express a professional opinion as to whether (1) the PFS present fairly, in

all material respects, the sources and applications of project funds for the period under

1 “World Bank” includes the International Development Agency and the International Bank for Reconstruction and Development. “Loans” includes credits and grants to which the TORs would apply; and “borrower” includes recipients of such loans.

2 The Bank’s charter [Article III Section V(b) of IBRD’s Articles of Agreement and Article V Section 1(g) of IDA’s Articles of Agreement]

specify that: “The Bank shall make arrangements to ensure that the proceeds of any loan are used only for the purposes for which the

loan was granted, with due attention to considerations of economy and efficiency and without regard to political or other non-

economic influences or considerations.”



audit examination, (2) the funds were utilized for the purposes for which they were

provided, and (3) expenditures shown in the PFS are eligible for financing under the

relevant loan or credit agreement. In addition, where applicable, the auditor will

express a professional opinion as to whether the Interim Unaudited Financial Reports

submitted by project management may be relied upon to support any applications for

withdrawal, and whether adequate supporting documentation has been maintained to support

claims made by project management for reimbursement of expenditures incurred. The books

of account that provide the basis for preparation of the PFS are established to reflect

the financial transactions of the project and are maintained by the project

implementation agency– MEF(BCRLIP).

Standards

The audit will be carried out in accordance with the Auditing Standards promulgated by

the Comptroller and Auditor General of India. The auditor should accordingly consider

materiality when planning and performing the audit to reduce audit risk to an acceptable

level that is consistent with the objective of the audit. Although the responsibility

for preventing irregularity, fraud, or the use of loan proceeds for purposes other than

as defined in the legal agreement remains with the borrower, the audit should be planned

so as to have a reasonable expectation of detecting material misstatements in the project

financial statements

Scope3

C&AG of India will audit MEF (BCRLIP), WII and Uttarakhand Forest Department whereas the

downstream entities like the landscape societies and learning centers would be audited by

CA firms empanelled with and appointed by C&AG in this regard.

Ministry of Environment and Forests shall, while sanctioning funds to the implementing

societies emphasize the project accounts shall be subject to audit by C&AG and the

implementing agencies shall produce the accounts to audit.

Ministry of Environment and Forests as an Implementing Agency or any other entity in its

behalf shall prepare consolidated project Financial Statements. The implementing agency

wise audit report for the project shall be prepared by auditors concerned and the

consolidated audit report of the consolidated project Financial Statements shall be

prepared by the C&AG, which shall be based on;

• Audit conducted by the C&AG of MEF(BCRLIP, WII and Uttarakhand Forest

Department.

• Audit Reports of other entities carried out by CAs subject to directions and

test check of their work wherever considered necessary by C&AG or offices

designated by him.

3 In response to identified project risks, the scope may be expanded to include a report or the expression of an opinion on specific

aspects of the operation such as internal controls, compliance with Bank procurement policies, or efficiency and effectiveness in the use of loan proceeds.



The auditor would be required to audit the consolidated IUFRs, including the IUFRs

submitted by the MEF (BCRLIP) to the bank. In conducting the audit, special attention

should be paid to the following:

(a) All external funds have been used in accordance with the conditions of the

relevant legal agreements and only for the purposes for which the financing was

provided. Relevant legal agreements include the Financing Agreement, the Project

Agreement, and the Minutes of Negotiations;

(b) Counterpart funds have been provided and used in accordance with the relevant

legal agreements and only for the purposes for which they were provided;

(c) All necessary supporting documents, records, and accounts have been kept in

respect of all project transactions including expenditures reported via IUFRs

where applicable. (Clear linkages should exist between the books of account and

reports presented to the Bank); and

(d) The project accounts have been prepared in accordance with consistently applied

Government Accounting Standards4 and present fairly, in all material respects, the

financial situation of the project at the year end and of resources and

expenditures for the year ended on that date.

Project Financial Statements

The Project Financial Statements should include-

• Statement of Sources and Applications of Funds

• Reconciliation of Claims to Total Applications of Funds.

• Statement showing entity wise transfer

Management Assertion

Management Assertion: Management should sign the project financial statements and

provide a written acknowledgement of its responsibility for the preparation and fair

presentation of the financial statements and an assertion that project funds have been

expended in accordance with the intended purposes as reflected in the financial

statements. An example of a Management Assertion Letter is shown below.

Interim Unaudited Financial Reports

In addition to the audit of the PFS, the auditor is required to audit all Interim

Unaudited Financial Reports (IUFRs) for withdrawal applications made during the period

under audit examination. The auditor should apply such tests as the auditor considers

necessary under the circumstances to satisfy the audit objective. In particular, these

expenditures should be carefully examined for project eligibility by reference to the

relevant financing agreements. Where ineligible expenditures are identified as having

4 Until such time as the pronouncements of the Government Accounting Standards Advisory Board are accepted and prescribed by the

Ministry of Finance, the accounting standards followed by the Government of India will be defined by the General Financial Rules,

PWD codes, Treasury codes and similar financial rules and codes as are in effect and applicable to the operations of the project.



been included in withdrawal applications and reimbursed against, these should be

separately noted by the auditor.

Audit Report

An audit report on the project financial statements should be prepared in accordance with

the Auditing Standards promulgated by the Comptroller and Auditor General of India.

Those standards require an audit opinion to be rendered related to the financial

statements taken as a whole, indicating “unambiguously whether it is unqualified or

qualified and, if the latter, whether it is qualified in certain respects or is adverse

or a disclaimer of opinion.”5 In addition, the audit opinion paragraph will specify

whether, in the auditor’s opinion, (a) with respect to IUFRs, adequate supporting

documentation has been maintained to support claims to the World Bank for reimbursements

of expenditures incurred; and (b) except for ineligible expenditures as detailed in the

audit observations, if any, appended to the audit report, expenditures are eligible for

financing under the Loan/Credit Agreement. A sample audit report wording for an

unqualified audit opinion is shown below.

The project financial statements and the audit report should be received by the Bank not

later than 6 months after the end of the fiscal year. The auditor should also submit two

copies of the audited accounts and audit report to the Implementing Agency.

The audit report is issued without prejudice to CAG’s right to incorporate the audit

observations in the Report of CAG of India for being laid before Parliament/State or UT

Legislature.

Management Letter

In addition to the audit report on the project financial statements, the auditor may

prepare a management letter containing recommendations for improvements in internal

control and other matters coming to the attention of the auditor during the audit

examination.

Where a management letter is prepared by the auditor, a copy of the same will be supplied

to the Bank. Else, a written advice may be made that no management letter was prepared

together with the audit report on the project financial statements.

General

The auditor should be given access to any information relevant for the purposes of

conducting the audit. This would normally include all legal documents, correspondence,

and any other information associated with the project and deemed necessary by the

auditor. The information made available to the auditor should include, but not be

limited to, copies of the Bank’s Project Appraisal Document, the relevant Legal

5 See relevant portions of Auditing Standards of the Comptroller and Auditor General of India as applicable from time to time.



Agreements, a copy of these Guidelines, and a copy of the Bank’s Financial Management

Assessment of the project entity. It is highly desirable that the auditor become

familiar with other Bank policy documents, such as OP/BP 10.02, the Bank's internal

guidelines on Financial Management that include financial reporting and auditing

requirements for projects financed by the World Bank. The auditor should also be

familiar with the Bank's Disbursement Manual. Both documents will be provided by the

Project staff to the auditor.



Sources and Application of Funds

Name of the project ___________ Loan/Credit/Grant No._______

Report for the year ended_______________________

(in Rs. thousands)

Particulars Current

Year

Previous

Year

Receipts

Funds from Government through Budget

Total Receipts (A)

Expenditures/Transfer by Component

A. Demonstration of Landscape Conservation Approaches in

selected pilot sites

B. Strengthening Knowledge Management and National Capacity for

Landscape Conservation (transfers)

C. Scaling Up and Replication of Successful Models of

Conservation in Additional Landscape Sites.

D. National Coordination for Landscape Conservation.

(transfers)

Total Expenditures (B)

Notes:

1. This financial statement is prepared on a cash basis of accounting as per provisions of the Government Financial Rules and codes applicable.

2. The above figures will be based on monthly/quarterly abstract accounts prepared by the accounts compiling officers, duly reconciled by the respective agencies, with

details of un-reconciled amounts to be furnished.

3. Names of accounting units whose financial statements are aggregated to prepare the consolidated accounts.



4. Only in case of MEF (BCRLIP) the actual expenditure would be shown in the audit report while in case of other agencies the transfers would be shown in the

statement. The expenditure done by these agencies would be audited by separate CA

firm

5. Any other project specific Note.

Entity wise transfers and utilisation certificates received



Name of the Project Loan / Credit / Grant No.

Reconciliation of Claims to Total Applications of Funds

Report for the year ended

CFAO Project Director

Date Date

Schedule

s

Amt (Rs./Million)

Current

Year

Previous

Year

Project

to date

Bank Funds claimed during the year

• IUFR for the first quarter

• IUFR for the second quarter

• IUFR for the third quarter

• IUFR for the fourth quarter

Total Bank Funds claimed (A)

Total Expenditure/Transfers made during the

year (B)

Less: Outstanding AC bills (C) II

Ineligible expenditures (D) III

Transfers not claimable (E) IV

Total Eligible Expenditures Claimed

(F)=(B)-(C)-(D)-(E)

World Bank Share @ x% of (F) above (G)

Amount to be claimed /refunded (H)=(A-G)



Notes:

1. Total expenditure made during the year (B above) must be the same as the Total

Expenditures shown on the Statement of Sources and Applications of Funds (B on

the Statement of Sources and Applications of Funds)

2. Outstanding AC bills (C above) reflect funds drawn against AC bills that have

been booked as expenditure but not settled by the end of the year (i.e.,

unsettled advances). The project should prepare a separate Schedule reflecting

the opening balance of unsettled AC bills, AC bills drawn during the year, AC

bills settled during the year, and AC bills unsettled at the end of the year.

3. Transfers not claimed (E above) reflects transferred made from one level to

another which would be claimed as expenditure in future.

4. Amounts A and G above must reconcile. If they indicate any excess/ shortage, it

needs to be explained and adjusted in future IUFR’s.



List of Claims submitted to World Bank

Date Of Application Application Number Period Amount Claimed



MEF (BCRLIP)

Loan/Credit/Grant No.

MEF(BCRLIP) Receipts and Expenditure

Report for the period ended __________________

In Rs. /million

For the

current year

For the last

year Cumulative

1. Receipts from GOI

2. Government contribution for staff cost

Total sources

Expenditure:

A. Development of Landscape Biodiversity Cons. Mgmt

B. Project Administration

C. Recurring Cost Excluding Government Staff Cost

D. Government staff cost

Total Expenditure

* Government Staff Cost amounts to Rs. ……………



WII


WII Receipts and Expenditure


In Rs. /million

For the Current

Year

For the Last

Year Cumulative

Opening Balance

Add:

Receipts from GOI

Contribution for staff cost

Less:

Expenditure:

A. Support to Landscape Sites

B. Support to Learning Management Centres

C. Core Training Program

D. Institutional and Methodological Framework

E. Institutional Strengthening of WII

F. Project Management Cell

G. Recurring Cost Excluding Government Staff Cost

H. Staff cost own contribution

Total Expenditure

Closing balance




Kalakad


Kalakad: Statement For Receipts and Expenditure


In Rs. /million

For the Current

Year

For the Last

Year Cumulative

Opening Balance

Add:

Receipts from GOI


Less:

Expenditure:

A. Civil Works

B. Equipment and Vehicles

C. Teaching materials and Tools

D. Training for trainers and participants

E. Demonstration of learning

F. Research and Studies on Participatory Methods

G. Documentation of Best Practices

H. Recurring Cost Excluding Government Staff Cost

I. Staff cost own contribution

Total Expenditure

Closing balance




Example of a Management Assertion Letter6

(Project Letterhead)

(To Auditor) (Date)

This assertion letter is provided in connection with your audit of the financial

statements of the ______________ Project for the year ended ___________. We acknowledge

our responsibility for the fair presentation of the financial statements in accordance

with the cash basis of accounting followed by the Government of India, and we confirm, to

the best of our knowledge and belief, the following representations made to you during

your audit:

• The project financial statements are free of material misstatements, including

omissions.

• Project funds have been used for the purposes for which they were provided.

• Project expenditures are eligible for financing under the Loan/Credit agreement.

• There have been no irregularities involving management or employees who have a

significant role in internal control or that could have a material effect on the

project financial statements.

• We have made available to you all books of account and supporting documentation

relating to the project.

• The project has complied with the conditions of all relevant legal agreements,

including the Financing Agreement, the Project Agreement, the Project Appraisal

Document, the Minutes of Negotiations, and the Borrower’s Project Implementation Plan.

____________________________________________(Project Director)

____________________________________________(Project Specialist )

6 This sample management assertion letter is based on ISA 580, “Management Representations,” Handbook of International Auditing,

Assurance and Ethics Pronouncements, International Federation of Accountants, 2007



Sample Audit Report—Unqualified Opinion7

Report of the Comptroller and Auditor General of India

Addressee8

Report on the Project Financial Statements

We have audited the accompanying financial statements of the _______ Project financed

under World Bank Loan No._____/IDA, which comprise the Statement of Sources and

Applications of Funds and the Reconciliation of Claims to Total Applications of Funds9

for the year ended ______. These statements are the responsibility of the Project’s

management. Our responsibility is to express an opinion on the accompanying financial

statements based on our audit.

We conducted our audit in accordance with the Auditing Standards promulgated by the

Comptroller and Auditor General of India. Those Standards require that we plan and

perform the audit to obtain reasonable assurance about whether the financial statements

are free of material misstatement. Our audit examines, on a test basis, evidence

supporting the amounts and disclosures in the financial statements. It also includes

assessing the accounting principles used and significant estimates made by management, as

well as evaluating the overall statement presentation. We believe that our audit provides

a reasonable basis for our opinion.

In our opinion, the financial statements present fairly, in all material respects, the

sources and applications of funds of ________ Project for the year ended __________ in

accordance with Government of India accounting standards.10

7 See relevant portions of Auditing Standards of the Comptroller and Auditor General of India as applicable from time to time for

conditions where unqualified, qualified, adverse or disclaimers of opinion may appropriately be rendered.

8 The auditor’s report should be addressed to the person stipulated in the underlying loan agreement as responsible for providing

audited project financial statements.

9 Insert titles of other required statements and schedules included in or annexed to the project financial statements, if any.

10 Until the Ministry of Finance prescribes adoption of the accounting standards pronounced by GASAB or other body such as IPSAS, the accounting standards followed by the Government of India shall be the cash basis of accounting applied with due regard to the General Financial Rules, PWD codes, Treasury codes and similar financial rules and codes as are in effect and applicable to the operations of the project.



In addition, in our opinion, (a) with respect to IUFRs, adequate supporting documentation

has been maintained to support claims to the World Bank for reimbursements of

expenditures incurred; and (b) except for ineligible expenditures as detailed in the

audit observations, if any, appended to this audit report, expenditures are eligible for

financing under the Loan/Credit Agreement. During the course of the audit, IUFRs (each

application no. and amount to be indicated) and the connected documents were examined and

these can be relied upon to support reimbursement under the Loan/Credit Agreement.

This report is issued without prejudice to CAG’s right to incorporate the audit

observations in the Report of CAG of India for being laid before Parliament/State or UT

Legislature.

[Auditor’s Signature]

[Auditor’s Address]

[Date]



ANNEXURE II. STATUTORY AUDIT TOR (CA FIRM)

Background









help alleviate poverty in remote rural forested areas. A broad implementation set-up

envisaged for the project is described below:

• The Ministry of Environment and Forests (MOEF) through its Conservation and Survey



• At the state level, each of the two States (Gujarat & Uttarakhand) will have a

landscape Society for implementation and monitoring of project activities.

• Below the landscape level, there will be community level societies in case of


• Apart from the above there will be learning centres at Periyar, Kalakad, Gir and


Objective

The essence of the World Bank11 audit policy is to ensure that the Bank receives adequate

independent, professional audit assurance that the proceeds of World Bank loans were used

for the purposes intended,12 that the annual project financial statements are free from

material misstatement, and that the terms of the loan agreement were complied with in all

material respects.

The objective of the audit of the Project Financial Statement (PFS) is to enable the

auditor to express a professional opinion as to whether (1) the PFS present fairly, in

all material respects, the sources and applications of project funds for the period under

11 “World Bank” includes the International Development Agency and the International Bank for Reconstruction and Development. “Loans”

includes credits and grants to which the TORs would apply; and “borrower” includes recipients of such loans.

12 The Bank’s charter [Article III Section V(b) of IBRD’s Articles of Agreement and Article V Section 1(g) of IDA’s Articles of Agreement] specify

that: “The Bank shall make arrangements to ensure that the proceeds of any loan are used only for the purposes for which the loan was

granted, with due attention to considerations of economy and efficiency and without regard to political or other non-economic influences or

considerations.”



audit examination, (2) the funds were utilized for the purposes for which they were

provided, and (3) expenditures shown in the PFS are eligible for financing under the

relevant loan or credit agreement. In addition, where applicable, the auditor will

express a professional opinion as to whether the IUFRs submitted by project management

may be relied upon to support any applications for withdrawal, and whether adequate

supporting documentation has been maintained to support claims. The books of account that

provide the basis for preparation of the PFS are established to reflect the financial

transactions of the project and are maintained by the project implementation agencies.

Standards

The audit will be carried out in accordance with the Auditing Standards promulgated by

ICAI. The auditor should accordingly consider materiality when planning and performing

the audit to reduce audit risk to an acceptable level that is consistent with the

objective of the audit. Although the responsibility for preventing irregularity, fraud,

or the use of loan proceeds for purposes other than as defined in the legal agreement

remains with the borrower, the audit should be planned so as to have a reasonable

expectation of detecting material misstatements in the project financial statements

Scope

The auditor is required to prepare a consolidated audit report as well as implementing

agency wise audit report for the project downstream entities. The auditor is required to

carry out the audit for the following entities Askote society, LRK society, Periyar, GIR

& KMTR LCS would be covered under this audit. The PFS submitted would have both the

consolidated PFS and implementing agency wise PFS. The auditor would be required to audit

the IUFRs made at each level.

In conducting the audit, special attention should be paid to the following:

(a) All external funds have been used in accordance with the conditions of the

relevant legal agreements and only for the purposes for which the financing was

provided. Relevant legal agreements include the Financing Agreement, the Project

Agreement, and the Minutes of Negotiations;

(b) Counterpart funds have been provided and used in accordance with the relevant

legal agreements and only for the purposes for which they were provided;

(c) All necessary supporting documents, records, and accounts have been kept in

respect of all project transactions including expenditures reported via IUFRs

where applicable. Clear linkages should exist between the books of account and

reports presented to the Bank; and

(d) The project accounts have been prepared in accordance with consistently applied

Accounting Standards and present fairly, in all material respects, the financial

situation of the project at the year end and of resources and expenditures for the

year ended on that date.

Project Financial Statements

The Project Financial Statements should include-

• Statement of Sources and Applications of Funds (consolidated PFS and implementing

agencies PFS)



• Reconciliation of Claims to Total Applications of Funds.

• A statement showing major heads of expenditure. (say by Project Component/Sub-

components)

• Statement showing entity wise transfer

Management Assertion

Management Assertion: Management should sign the project financial statements and

provide a written acknowledgement of its responsibility for the preparation and fair

presentation of the financial statements and an assertion that project funds have been

expended in accordance with the intended purposes as reflected in the financial

statements. An example of a Management Assertion Letter is shown below.

Interim Unaudited Financial Reports

In addition to the audit of the PFS, the auditor is required to audit all Interim

Unaudited Financial Reports (IUFRs) for withdrawal applications made during the period

under audit examination. The auditor should apply such tests as the auditor considers

necessary under the circumstances to satisfy the audit objective. In particular, these

expenditures should be carefully examined for project eligibility by reference to the

relevant financing agreements. Where ineligible expenditures are identified as having

been included in withdrawal applications and reimbursed against, these should be

separately noted by the auditor.

Audit Report

An audit report on the project financial statements should be prepared in accordance with

the Auditing Standards promulgated by the ICAI. Those standards require an audit opinion

to be rendered related to the financial statements taken as a whole, indicating

“unambiguously whether it is unqualified or qualified and, if the latter, whether it is

qualified in certain respects or is adverse or a disclaimer of opinion.” In addition,

the audit opinion paragraph will specify whether, in the auditor’s opinion, (a) with

respect to IUFRs, adequate supporting documentation has been maintained to support claims

to the World Bank for reimbursements of expenditures incurred; and (b) except for

ineligible expenditures as detailed in the audit observations, if any, appended to the

audit report, expenditures are eligible for financing under the Loan/Credit Agreement. A

sample audit report wording for an unqualified audit opinion is shown below.

The project financial statements and the audit report should be received by the Bank not

later than 6 months after the end of the fiscal year. The auditor should also submit two

copies of the audited accounts and audit report to the Implementing Agency.

Management Letter

In addition to the audit report on the project financial statements, the auditor should

prepare a management letter containing recommendations for improvements in internal

control and other matters coming to the attention of the auditor during the audit

examination. The management letter copy should be submitted to the Bank.

General



The auditor should be given access to any information relevant for the purposes of

conducting the audit. This would normally include all legal documents, correspondence,

and any other information associated with the project and deemed necessary by the

auditor. The information made available to the auditor should include, but not be

limited to, copies of the Bank’s Project Appraisal Document, the relevant Legal

Agreements, a copy of these Guidelines, and a copy of the Bank’s Financial Management

Assessment of the project entity. It is highly desirable that the auditor become

familiar with other Bank policy documents, such as OP/BP 10.02, the Bank's internal

guidelines on Financial Management that include financial reporting and auditing

requirements for projects financed by the World Bank. The auditor should also be

familiar with the Bank's Disbursement Manual. Both documents will be provided by the

Project staff to the auditor.



Consolidated PFS

Sources and Application of Funds

Name of the project ___________ Loan/Credit/Grant No._______

Report for the year ended_______________________

(in Rs. Millions)

Particulars Current

Year

Previous

Year

Cumulative

till date

Receipts

Funds from Government through Budget

Funds received from World Bank (based on claims paid)

Community Contribution

Government contribution for staff cost

Total Receipts (A)

Expenditures by Component

A. Demonstration of Landscape Conservation

Approaches in selected pilot sites

B. Strengthening Knowledge Management and National

Capacity for Landscape Conservation

C. Scaling Up and Replication of Successful Models of

Conservation in Additional Landscape Sites

D. National Coordination for Landscape Conservation.

Total Expenditures (B)



Notes:

1. This financial statement is prepared on a cash basis of accounting as per provisions of the Government Financial Rules and codes applicable.

2. The above figures will be based on monthly/quarterly abstract accounts prepared by the accounts compiling officers, duly reconciled by the respective agencies, with

details of un-reconciled amounts to be furnished.

3. Names of accounting units whose financial statements are aggregated to prepare the consolidated accounts.

4. Any other project specific Note.



Component Wise Claim Statement

Report for the year ended __________________






Date Of Application Application Number Period Amount Claimed



Name of the Project Loan / Credit / Grant No.

Reconciliation of Claims to Total Applications of Funds

Report for the year ended

CFAO Project Director

Date Date

Schedules

Amt (Rs./Million)

Current

Year

Previous

Year

Project

to date

Bank Funds claimed during the year

• IUFR for the first quarter

• IUFR for the second quarter

• IUFR for the third quarter

• IUFR for the fourth quarter

Total Bank Funds claimed (A)

Total Expenditure made during the year (B)

Less: Outstanding AC bills (C) II

Ineligible expenditures (D) III

Advances not claimed (E) IV

Total Eligible Expenditures Claimed

(F)=(B)-(C)-(D)-(E)

World Bank Share @ x% of (F) above (G)

Amount to be claimed /refunded (H)=(A-G)



Notes:

1. Total expenditure made during the year (B above) must be the same as the Total

Expenditures shown on the Statement of Sources and Applications of Funds (B on

the Statement of Sources and Applications of Funds)

2. Outstanding AC bills (C above) reflect funds drawn against AC bills that have

been booked as expenditure but not settled by the end of the year (i.e.,

unsettled advances). The project should prepare a separate Schedule reflecting

the opening balance of unsettled AC bills, AC bills drawn during the year, AC

bills settled during the year, and AC bills unsettled at the end of the year.

3. Expenditures not claimed (E above) may reflect timing differences for eligible

expenditures incurred during the year but claimed after the year end.

4. Amounts A and G above must reconcile. If they indicate any excess/ shortage, it

needs to be explained and adjusted in future IUFR’s.



Askot


Askot Receipts and Expenditure


In Rs. /million

For the

Current Year

For the

Last Year Cumulative

Opening bank balance

Add:

Receipts from GOI


Community contribution

Less:

Transfer To Communities

Expenditure:

A. Strengthening Biodiversity Conservation Management

B. Mainstreaming Conservation and participatory

practices

C. Support to Participation in Learning networks

D. Communications

E. Recurring Cost Excluding Government Staff Cost

F. Staff cost own contribution

Total Expenditure

Closing balance


*Community contribution received in kind amounts to Rs._______



Kutch


Kutch Landscape: Statement For Receipts and Expenditure


In Rs. /million

For the

current

quarter

For the


Opening Balance

Add:

Receipts from GOI



Less:

Expenditure:



practices

C. Support to Participation in Learning networks (cross

visits)

D. Communications



Total Expenditure

Closing balance


*Community contribution received in kind is Rs.-_________



GIR


GIR: Statement For Receipts and Expenditure


In Rs. /million

For the

Current Year

For the


Opening Balance

Add:

Receipts from GOI


Less:

Expenditure:

A. Civil Works



D. Regional Planning Capacity for Gir


F. Recurring Cost excluding Government Staff Cost

G. Staff cost own contribution

Total Expenditure

Closing balance




Periyar


Periyar: Statement For Receipts and Expenditure


In Rs. /million

For the Current year For the Last Year Cumulative

Opening Balance

Add:

Receipts from GOI


Less:

Expenditure:

A. Civil Works





F. Research and Studies on Participatory Methods


H. Recurring Cost Excluding Government Staff Cost


Total Expenditure

Closing balance




Kalakad Society




In Rs. /million

For the

Current Year

For the


Opening Balance

Add:

Receipts from GOI


Less:

Expenditure:

A. Civil Works





F. Research and Studies on Participatory

Methods


H. Recurring Cost Excluding Government Staff

Cost


Total Expenditure

Closing balance


Example of a Management Assertion Letter13

13 This sample management assertion letter is based on ISA 580, “Management Representations,” Handbook of International

Auditing, Assurance and Ethics Pronouncements, International Federation of Accountants, 2007



(Project Letterhead)

(To Auditor) (Date)

This assertion letter is provided in connection with your audit of the financial

statements of the ______________ Project for the year ended ___________. We acknowledge

our responsibility for the fair presentation of the financial statements in accordance

with the cash basis of accounting followed by the Government of India, and we confirm, to

the best of our knowledge and belief, the following representations made to you during

your audit:

• The project financial statements are free of material misstatements, including

omissions.

• Project funds have been used for the purposes for which they were provided.

• Project expenditures are eligible for financing under the Loan/Credit agreement.

• There have been no irregularities involving management or employees who have a

significant role in internal control or that could have a material effect on the

project financial statements.

• We have made available to you all books of account and supporting documentation

relating to the project.

• The project has complied with the conditions of all relevant legal agreements,

including the Financing Agreement, the Project Agreement, the Project Appraisal

Document, the Minutes of Negotiations, and the Borrower’s Project Implementation Plan.

____________________________________________(Project Director)

____________________________________________(Senior Financial Officer)



Sample Audit Report—Unqualified Opinion

Addressee

Report on the Project Financial Statements

We have audited the accompanying financial statements of the _______ Project financed

under World Bank Loan No._____/IDA, which comprise the Statement of Sources and

Applications of Funds and relevant annexure for the year ended ______. These statements

are the responsibility of the Project’s management. Our responsibility is to express an

opinion on the accompanying financial statements based on our audit.

We conducted our audit in accordance with the Auditing Standards promulgated by the ICAI.

Those Standards require that we plan and perform the audit to obtain reasonable assurance

about whether the financial statements are free of material misstatement. Our audit

examines, on a test basis, evidence supporting the amounts and disclosures in the

financial statements. It also includes assessing the accounting principles used and

significant estimates made by management, as well as evaluating the overall statement

presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements present fairly, in all material respects, the

sources and applications of funds of ________ Project for the year ended __________ in

accordance with government accounting standards.

In addition, in our opinion, (a) with respect to SOEs, adequate supporting documentation

has been maintained to support claims to the World Bank for reimbursements of

expenditures incurred; and (b) except for ineligible expenditures as detailed in the

audit observations, if any, appended to this audit report, expenditures are eligible for

financing under the Loan/Credit Agreement. During the course of the audit, SOEs/FMRs

(each application no. and amount to be indicated) and the connected documents were

examined and these can be relied upon to support reimbursement under the Loan/Credit

Agreement.

[Auditor’s Signature]

[Auditor’s Address]

[Date]



ANNEXURE III. INTERNAL AUDIT TOR

INTRODUCTION









help alleviate poverty in remote rural forested areas.

PROJECT COMPONENTS:

The main components of the project are as follows:

a) Demonstration of Landscape Conservation Approaches in selected pilot sites b) Strengthening Knowledge Management and National Capacity for Landscape

Conservation

c) Scaling Up and Replication of Successful Models of Conservation in Additional

Landscape Sites

d) National Coordination for Landscape Conservation.

PROJECT IMPLEMENTATION UNITS

A broad implementation set-up envisaged for the project is described below:

a The Ministry of Environment and Forests (MOEF) through its Conservation and Survey



b At the state level, each of the two States (Gujarat & Uttarakhand) will have a

landscape Society (registered under an appropriate Act) for implementation and

monitoring of project activities.

c Below the landscape level, there will be community level societies in case of


d Apart from the above there will be learning centres at Periyar, Kalakad, Gir and


ACCOUNTING ENTITIES

The project accounting would be maintained at following places:-

• MEF

• ASKOT Society

• LRK

• Communities/Van Panchayat

• Periyar

• WII

• GIR

• KMTR



SCOPE OF WORK

The overall scope of work of the internal audit is to:

a Review of the operation of the financial management system including the project

financial statements, internal controls, and compliance with financing agreements

of all the agencies; and

b To provide project management with timely information on agencies financial

management aspects of the project to enable follow up action.

c To provide project management with timely information on communities/Van

Panchayat/CIG society financial management systems and suggest follow up action

d Transactional review of expenditures incurred by all agencies/communities on

sample basis.

e Physical verification of work and assets on sample basis

COVERAGE OF THE AUDIT:

The review would cover all the project activities implemented by agencies/Societies. The

auditor would visit the various agencies on selective basis, for the purpose of review,

in consultation with the management based on risks perceived magnitude of expenditure

incurred by each unit etc. Broadly, the coverage would be for all major locations of the

Project at least once annually. The work plan would be decided by MEF(BCRLIP)and auditor.

The review would cover all systems of accounting and also transactions covering all

aspects of expenditure incurred for the project.

The auditor would also visit community/Van Panchayat/CIG office, on selective basis as

directed by MEF (BCRLIP) from time to time, for the purpose of reviewing the books of

account, bills, vouchers and other supporting records maintained as per their terms of

contract. The extent of coverage would be 20% of such communities in a year. The auditor

would verify community/Van Panchayat/CIG payments and comment on delayed/ pending

payments due also verify that funds are utilized as in agreement and for the particular

purpose for which it is given

The internal auditor will conduct an assessment of the adequacy of the project financial

management system including internal controls. The review will include such tests,

checks, controls and verification of books and records, as the auditor considers

necessary under the circumstances. This would include aspects such as

a Whether any bottlenecks exist in flow of funds ; whether funds are flowing to as

per the terms laid down in the Agreement/MOU

b Whether appropriate internal controls as specified by the Financial Management

Manual, Operations Manual and other relevant notifications, if any, are operating

satisfactorily. The auditor should suggest methods for improving weak controls or

creating them where there are none

c Whether proper books of account and adequate documentation is being maintained for

all project activities.

d That an appropriate system of accounting and financial reporting exists on the

basis of which claims are prepared and submitted for reimbursement.

e That expenditure charged to the project are eligible expenditures and have been

classified correctly

f An assessment of compliance with provisions of the Financing Agreements (IDA;

Project Agreement, MOUs), PAD and other relevant documents, if any.

g That funds have been used with due regard to economy, efficiency and for the

purposes they were provided



h That an adequate system is in place to ensure that goods, works and services are

being procured in accordance with relevant financing agreements and the

procurement procedures prescribed in the MOU is followed.

i That yearly work plans are prepared and expenditures are incurred as per approved

plans and variances if any are monitored and analyzed.

j That adequate record is maintained for assets created under the project including

details of cost, quantity and location. Physical verification of the assets is

being conducted by the management on a periodic basis and adequate records thereof

are maintained. The auditor should carryout physical verification of assets for at

least 20% base on the value and risk perceived.

k Whether Bank reconciliation statements are being prepared on a monthly basis.

l In case of State societies confirming that the books of account and balance sheet

prepared under the societies act match with the progress report submitted to MEF

(BCRLIP) and clear linkages exist between the books of account and statements

submitted to MEF (BCRLIP).

m Verifying compliance with recommendation of the earlier audit reports and

commenting thereon.

n Verify Interim Unaudited Financial Reports (IUFR) on the basis of books of

accounts maintained by agencies.

TIMING AND REPORTING:

The internal audit would be carried out on Quarterly basis throughout the year. The

auditor will provide quarterly reports to the project management highlighting the

findings made during the quarterly internal audit of Society/community/Van Panchayat

review. This will be in the form of a Management Letter which will inter-alia include;

� Comments and observations on the Society/community/Van Panchayat/Forest

Department financial management records systems and controls that were examined

during the course of the review.

� Comments on the expenditure and works of the Society/community/Van

Panchayat/Forest Department, funds utilized with respect to the purpose for

which they have been provided, and for any mis-application / mis-utilisation.

� Deficiencies and areas of weaknesses in systems and controls of the

Society/community/Van Panchayat/Forest Department and recommendation for their

improvement

� Compliance with covenants in the financing agreement and comments, if any, on

internal and external matters affecting such compliance

� Matters that have come to attention during the review and might have a

significant impact on the implementation of the project

� Any special review procedures required of a compliance nature (for example,

compliance of the procurement procedures etc., recommended by the World Bank)

� Any other matters that the auditor considers pertinent

The reports should be submitted as follows:

• Quarterly reports should be submitted within 45 days from the end of the quarter.

• Annual Report: Consolidated annual report for the financial year shall be

submitted along with the last quarter report.

DATA SERIES AND FACILITIES TO BE PROVIDED BY THE CLIENT

The auditor would be given access to all documents, correspondence, vouchers, registers,

records, certificates, cash book, bank book, payment registers, tank expenditure

registers UCs, expenditure statements and any other information relating to the project

and deemed necessary by the Auditor. The Auditor should become familiar with and stay

updated on the project, and with the relevant policies and guidelines of the State

Government and the World Bank (including those relating to disbursements, procurement and



financial management and reporting). The Auditor would be provided copies of the Project

Implementation Plan; Project Appraisal Document (PAD) of the World Bank; Development

Credit Agreement, Loan Agreement and Project Agreement with IDA (including agreed minutes

of negotiations), guidelines, policies and procedures issued by project management and

implementing agencies; and relevant World Bank policies and guidelines (such as World

Bank’s Guidelines on Financial Reporting and Auditing, Financial Accounting and Reporting

Handbook, Loan Administration Change Initiative Handbook, Disbursements Handbook, Project

Financial Management Manual, Procurement Guidelines, and other such guidelines or policy

documents).

The internal auditors or any of their associates (including associates of the firms’

partners) would not be eligible to be appointed as financial management technical support

consultants or to carry out any similar assignment in the project to prevent conflict of

interest.

All infrastructures like computers, printers, stationary, telephone, office furniture

etc., required for the audit & reporting should be provided by the internal auditors.

All out of pocket expenses like travel, local conveyance, food expenses, halting expenses

etc., to be incurred for conducting the Audit shall be borne by the auditors. The fee

payable is all inclusive (except service tax) payable will be reimbursed by the PMU.

The auditor would be appointed for a term of 12 months period from April to March,

subject to annual review at the end of every financial year; and the appointment would be

renewable for a further period of one or more years as mutually agreed between the client

and the auditor. Unless renewed, the firm of Chartered Accountants or any of its

associates (including associates of the partners of the firm) would not be eligible to

carry out the internal audit of the project for subsequent periods.



List of Key Professionals Whose CV &Experience would be evaluated

The following are the minimum qualification prescribed for the partner and audit experts

Suggested format of the Internal Audit Report

The Reports would include an Executive Summary in the following form for the

entire project -

Para

No.

Observations Implications

with risks

involved

Recommendations

for improvement

Auditee’s

Comments/

Agreed Action

Agreed

Timeline

for

compliance

Key

Person

Specialization Minimum Post

Qualification

Experience

No. Of

Persons

Man months

required

Partner Chartered Accountant with

experience in Auditing,

Finance & Accounting (with

specialization in World Bank

funded projects)

15 years 1 1(One man

month)

Audit

Manager

Chartered Accountant trained

in Audit and Accounts (with

exposure to World Bank

funded projects)

5 years 1 4 (Four

man

months)

Audit

Support

staff

Qualified Chartered

Accountant

1 year 2 10 (Ten

man

months)



INTERNAL AUDIT REPORT

Part A: Brief details of the auditee and audit

a. Name and address of the Auditee :

b. Names of the office bearers: :

c. Name/s of the Audit Team Members: :

d. Days of audit :

e. Period covered in the previous audit :

f. Period covered in the current audit :

Part B: Compliance to previous Audit Reports

In this part, provide the status of compliance with previous reports and detail the

pending audit observations. The views of the auditee should also be mentioned. In case

there is any difficulty or problem in resolution of audit findings, these should be

clearly highlighted.

Part C: Serious Observations

In this part, give details of serious audit observations such as ineligible expenses,

major lapses in internal controls, systemic weaknesses, procurement procedures not

followed, incorrect information submitted for reimbursements, Difference between cash

drawn and expenditure reported, Procedural Lapse, Accounting Lapse, Accounting books &

records not maintained.

Part D: Other Observations

Observations that are not serious in nature, but nonetheless require the attention of the

Project or the GP should be detailed in this part.

Part E: Executive Summary and Suggestions/Recommendations

Provide an Executive Summary of the observations in Part C and D along with

suggestions/recommendations. Only those observations that are dealt with in either Part C

or Part D should be included in this section Provide specific recommendations on internal

control and systemic weaknesses.



ANNEXURE II: Indicative checklist for checking procurement function

• Whether the procurement plan for current financial year and next financial year

was prepared?

• Whether the procurement was made as per the procurement plan? If not, give

deviations.

• Whether the method adopted for procurement is as per the threshold limits given in

the procurement manual?

• Whether the procurement committee was constituted and involved in the procurement?

• Whether the procurement was done within a reasonable time?

• Whether there was any avoidable delay at any stage/stages of the procurement

process?

• Whether the necessary approval was taken from appropriate authority wherever

required?

• Whether proper and adequate documents relating to procurement were maintained?

• Whether the technical and financial evaluation was done properly and in a fair

manner?

• Whether the firm contracted supplied the goods or executed the work as per the

quality, quantity and price agreed upon?

• Whether the payment was made to the party in time? If not, mention reasons for

delay.



Annexure III: Illustrative Audit Checklist for communities/societies:

Name of the Community

Period covered:

Date of Visit:

Agreement No.

Sl.No. Audit Issue Yes No Remarks

1 Whether separate bank account is maintained by

community

2 Cash and bank book is kept update and is signed

by the authorized persons.

3 Cash balance in the books reconciles with

physical cash in hand (Do a cash count)

4 Whether Funds held in fixed deposit.

5 General Ledger is written up to date (give date)

6 All the vouchers are serially numbered and filed

properly

7 Bank reconciliation has been done at the end of

each month

8 Advances are classified separately and are not

included in the SOE.

Advances are adjusted on the basis of the bills

of the contractors

10 Are there advances outstanding for more than 6

months

11 Are there funds flow delays to the auditee unit.

If yes, give instances.

12 Are there any pre-signed blank cheques or large

cash withdrawals.

13 Whether all the other documents and register as

mentioned in financial management manual are

maintained or not.

14 Whether there are cases of diversion of funds or

mis utilization of funds.



ANNEXURE IV. INTERIM UNAUDITED FINANCIAL

REPORT

** All the IUFRs would be signed by the project director and the finance officer of the

respective entities.

IUFR I: CONSOLIDATED IUFR (TO BE PREPARED BY MEF) EVERY QUARTER



IUFR II: CONSOLIDATED CLAIMS (TO BE PREPARED BY MEF) EVERY QUARTER



IUFR III: CONSOLIDATED CLAIMS (TO BE PREPARED BY MEF (BCRLIP)) EVERY QUARTER

IUFR III


Date Of

Application Application Number Period Amount Claimed

* The annexure would be prepared by MEF (BCRLIP) on a quarterly basis.



IUFR IV: CONSOLIDATED CLAIMS (TO BE PREPARED BY MEF) EVERY QUARTER



IUFR V: MEF (BCRLIP) TO BE PREPARED EVERY QUARTER

MEF (BCRLIP)


MEF Receipts and Expenditure


In Rs. /million

For the

quarter

For the

Year Cumulative

1. Receipts from GOI

2. Government contribution for staff cost

Total sources

Expenditure:

A. Development of Landscape Biodiversity Cons.

Mgmt

B. Project Administration

C. Recurring Cost Excluding Government Staff Cost

D. Government staff cost

Total Expenditure


* The annexure would be prepared by MEF (BCRLIP)on a quarterly

basis.



IUFR VI: WII (TO BE PREPARED BY WII) EVERY QUARTER

WII


WII Receipts and Expenditure


In Rs. /million

For the

quarter

For the

Year Cumulative

Opening Balance

Add:

Receipts from GOI


Less:

Expenditure:

A. Support to Landscape Sites

B. Support to Learning Management Centres

C. Core Training Program

D. Institutional and Methodological Framework

E. Institutional Strengthening of WII

F. Project Management Cell

G. Recurring Cost Excluding Government Staff Cost

H. Staff cost


Total Expenditure

Closing balance


* The annexure would be prepared by WII on a quarterly basis and submitted to MEF (BCRLIP)

within 30days from the end of the quarter.



IUFR VII: ASKOT (TO BE PREPARED BY ASKOT SOCIETY) EVERY QUARTER

Askot


Askot Receipts and Expenditure


In Rs. /million

For the

quarter

For the

Year Cumulative

Opening bank balance

Add:

Receipts from GOI



Less:

Transfer To Communities

Expenditure:



practices

C. Support to Participation in Learning networks

D. Communications


F. Staff cost


Total Expenditure

Closing balance


* The annexure would be prepared by Askot on a quarterly basis and submitted to MEF (BCRLIP)


*Community contribution received in kind amounts to Rs._______



IUFR VIII: LRK (TO BE PREPARED BY LRK SOCIETY) EVERY QUARTER

Kutch


Kutch Landscape: Statement For Receipts and Expenditure


In Rs. /million

For the

quarter

For the

Year Cumulative

Opening Balance

Add:

Receipts from GOI



Less:

Expenditure:



practices

C. Support to Participation in Learning networks (cross

visits)

D. Communications



Total Expenditure

Closing balance


* The annexure would be prepared by Kutch on a quarterly basis and submitted to

MEF(BCRLIP)within 30days from the end of the quarter.

*Community contribution received in kind is Rs.-

_________



IUFR IX: GIR(TO BE PREPARED BY GIR LION SOCIETY) EVERY QUARTER

GIR


GIR: Statement For Receipts and Expenditure


In Rs. /million

For the

quarter

For the

Year Cumulative

Opening Balance

Add:

Receipts from GOI


Less:

Expenditure:

A. Civil Works



D. Regional Planning Capacity for Gir


F. Recurring Cost excluding Government Staff Cost


Total Expenditure

Closing balance


* The annexure would be prepared by GIR on a quarterly basis and submitted to MEF (BCRLIP)




IUFR X: PERIYAR (TO BE PREPARED BY PTR SOCIETY) EVERY QUARTER

Periyar


Periyar: Statement For Receipts and Expenditure


In Rs. /million

For the

quarter

For the

Year Cumulative

Opening Balance

Add:

Receipts from GOI


Less:

Expenditure:

A. Civil Works






Methods


H. Recurring Cost Excluding Government

Staff Cost


Total Expenditure

Closing balance




IUFR XI: KMTR (TO BE PREPARED BY KMTR SOCIETY) EVERY QUARTER

Kalakad




In Rs. /million

For the

quarter

For the

Year Cumulative

Opening Balance

Add:

Receipts from GOI


Less:

Expenditure:

A. Civil Works






Methods


H. Recurring Cost Excluding Government Staff

Cost


Total Expenditure

Closing balance


* The annexure would be prepared by Kalakad on a quarterly basis and submitted to MEF

(BCRLIP) within 30days from the end of the quarter.



ANNEXURE V. MOU

MEMORANDUM OF UNDERSTANDING

BETWEEN

THE MINISTRY OF ENVIRONMENT AND FORESTS

(CONSERVATION AND SURVEY DIVISION)

C.G.O.COMPLEX, LODHI ROAD

NEW DELHI

AND STATE LEVEL LANDSCAPES SOCIETY (LRK/ASKOTE)/WII/FLC SOCIETY (GIR,KALAKAD,PERIYAR)

This Memorandum of Understanding made this …………day of …………between the Ministry of

Environment and Forests, acting through the Conservation and Survey Division C.G.O.

Complex, Lodhi Road, New Delhi-110003 (hereinafter referred to as the ‘CS&D’) of the

First Part and the State level landscape societies (LRK/ Askote/WII/ Field Learning

Centres/Societies (Gir, Kalakad, Periyar) acting through (designation and office

address), (hereinafter referred to as the Grantee), of the Second Part.

Whereas the Grantee has submitted a proposal to the Ministry of Environment and

Forests, seeking financial assistance for implementation of Biodiversity Conservation and

Rural Livelihood Improvement Project (BCRLIP) activities ……… hereinafter referred to as

the “Annual Plan of Operation”.

Biodiversity Conservation and Rural Livelihood Improvement Project (BCRLIP) aims

to enhance institutional capacity for integrating sustainable livelihoods and

biodiversity conservation objectives add the landscape level. This is to be achieved by

improving policies, tools and methodologies, knowledge and skills for developing multi-

stakeholder partnerships that support mainstreaming of biodiversity conservation

objectives, improving rural livelihoods, enhancing learning and replication of successful

participatory conservation models, and improving cost-effectiveness and sustainable

funding for conservation of biodiversity at the landscape level.

And whereas the Ministry of Environment and Forests is ready and willing to

extend financial support for the approved items of the said work, on the terms and

conditions given below for the year and thereafter.

NOW, THEREFORE, IT IS HEREBY AGREED between the Parties as follows:

ARTICLE – 1

Obligation of the Ministry of the Environment and Forests (through the CS&D). The

Ministry of the Environment and Forests has agreed and affirmed that:-



(1) The total approved funding for the period _______________ as per the Annual Plan

of Operation is ________________.

(2) Funding support under BCRLIP shall be made available to the ……………… in three

phases on receipt of the Annual Plan of Operation with cost estimates of work

plan of the project activities to be undertaken during a year.

a. The first installment of the funding support under the BCRLIP would be

released on approval of Annual Plan of Operations. The quantum of grant

would be 40% of the approved APO. The amount would be released within 2

weeks subject to availability of funds and the directions of the ministry of

Finance.

b. The second installment of 40% of approved APO under the BCRLIP would be

released by two weeks on receipt of UC for the 80% expenditure of the first

installment.

c. The third installment of 20% of approved APO under the BCRLIP would be

released within two weeks of receipt of first installment Utilization

Certificate. This should also indicate the 100% utilization of the 1st

installment and 80% of the second installment.

(3) To provide technical guidance on project related issues.

(4) To monitor the progress of the work as per the action plan through field visits

and through consultants as and when required.

ARTICLE-II

Obligation of Society/Wildlife Institute of India (WII)/FLC Societies that:-

The Society has agreed and affirmed that:-

(1) Annual Plan of Operation, shall be prepared for which the funding support is being

sought from Government of India as per the prescribed guidelines within a given

time. The Annual Plan of Operations must indicate the location/area of proposed

initiative/initiatives on a map, along with physical target, financial target and

unit rate, with the basis of estimation. The implementing agency has to ensure

that the Central Assistance being released will be gainfully utilized in

furtherance of the approved world programme without any time overrun under the

project/scheme. The proposed area coverage under the work programme should be

over-lapping with any other Central/State scheme. There should be no duplication

of central/external assistance in any case.

(2) A staff development plan should be prepared and submitted to the MEF for ensuring

frontline staff with the capacity to perform field work. The agreed staff

vacancies shall be filled up by the society for ensuring effective implementations

of BCRLIP activities.

(3) The society shall deposit the fund received under this project in their exclusive

and separate current account in a Nationalized Bank, which would be operated by

Chairman/Member Secretary of the society.

(4) The Society shall submit a quarterly report and an annual report to the

MEF(BCRLIP), in the form and substance as prescribed by MEF from time to time.

The progress report should invariably indicate the physical achievement (Viz….,

quantity, number area indicating location) and the objectives fulfilled on

implementation of proposed activities. A year-wise photo catalogue of physical

targets shall be maintained to facilitate verification during supervisory visits.

(5) The Society shall ensure full accountability for all funds provided by MEF/Bank.

All financial transactions should be clearly recorded with supporting details and

would be subject to audit & scrutiny of members at large. The State Level

Landscape Society will ensure that the Account of the grants released by MEF are



audited by Statutory Auditor on an annual basis and a certificate to this affect

will be sent to MEF annually latest by 31st May each year. Proper Financial

Statement along with disclosures including clear statement of the accounting

policies would be available for any member.

(6) The money released by the MoEF through the Conservation and Survey Division shall

be made available to Community Groups (User Groups/Van Panchayts) for taking up

the works proposed in the Annual Plan of Operation (APO) immediately with due

compliance of her normative guidelines and advisories of the said Authority.

(7) The Society should consult with Panchayati Raj Institutions for providing

ecologically viable livelihood options to reduce villagers’ dependence on forest.

The Gram Sabha should be involved in restoring forest cover in the areas in order

to provide a supplementary habitat to animals moving out of that areas.

(8) The funds received by the ‘Van Panchayat / Common Interest Group’ shall be

deposited in their exclusive and separate current account in a Nationalized Bank,

which would be operated by Chairman / Member Secretary of the society.

(9) The cost estimate worked out by the user groups should be on approved schedule of

rates of the State Government.

(10) Community Groups Van Panchayat/Common Interest Group will receive funds at the

ratio of 40:40:20 from landscape society. The society shall release the amount

earmarked for the concerned line agency or the village level agency ratio 40:20

based on the fund requirement, progress of implementation and utilization of

earlier releases. The Society would ensure that the APO prepared by the Community

groups is in line wit the project objectives. Before fund transfer the APO would

be approved, MOU would be signed with them and all conditions related to fund

transfer would be achieved.

(11) Community Groups (User Groups/Van Panchayats) shall be empowered to spend the

money provided by MEF for immediate executives of the schemes as per the

procedures prescribed by MEF and the State Level Landscape Society.

(12) After the project period is over the implementation of the project and maintenance of works raised there under shall spill over to the next year and be the

responsibility of the State level landscapes Societies/Foundations if scheme is

continued.

(13) During execution, details of estimate, man-days involved etc. shall be displayed near the work site.

(14) Utilization Certificate showing unspent balance, if any, shall be furnished to MEF annually after the close of the financial years latest by 31

st May of each year.

Complete Utilization Certificate shall be submitted immediately on completed of

the work.

(15) Computerized accounting system is followed to ensure greater accountability

through the TALLY accounting package. The Society shall maintain the accounting

of funds and expenditure village unit wise. The consolidated summary in the

format, generated by the software shall be submitted to the MEF(BCRLIP) within the

time period specified.

(16) The accounts of the grants released by MoEF (BCRLIP) shall be maintained properly as per audit requirement and open to inspection by the MEF(BCRLIP)/Audit. A copy

of these account shall be released to MEF (BCRLIP). In case of construction /

habitat improvement works, photocopies of the measurement books (for the work

which was executed from Conservation and Survey Division grant) shall also be sent

to MEF(BCRLIP) for adjustments as unspent balance or revalidation.

(17) Any agency / officer(s)/authorized by the MEF (BCLRIP) shall have access for

scrutiny to the records, books and accounts of the village level agency for the

funds received under the project.

(18) The funds will be used only for the purpose for which they were sanctioned.

Diversion of funds will not be allowed.

(19) The records of all assets acquired out of the grant released by the

MEF(BCRLIP),shall be made available for scrutiny of audit. Such assets shall not

be, without the prior approval of Govt. of India / MEF (BCRLIP), be disposed off,

encumbered or utilized for the purpose other than those for which the grant is

sanctioned.



(20) A Statement showing the extracts of the assets created out of the grants released by MEF (BCRLIP) shall be furnished to MEF (BCRLIP) annually by 31

st May of each

year.

(21) The Society would follow all the World Bank procurement rules as instructed by MEF (BCRLIP)for procuring goods / works and services.

ARTICLE – III

(Site – specific action)

Some landscape societies may warrant special interventions owing to their unique

geographical and other attributes.

ARTICLE – IV

Consequences of non-observance of the terms of the MOU

(In case of non-observance of the terms of MOU by the societies

(LRK/Askote/WII/Field Learning Centers/Societies) (Gir, Kalakad, Periyar).

(1) Stoppage of funding support under the Biodiversity Conservation and

Rural Livelihood Improvement Project.

(2) Release of second installment would not be made in case the

Utilization Certificate relating the first release is not received in

the MEF (BCRLIP).

(3) Non adherence/observance to MOU may lead to stoppage of incentives

which may be provided to the officials and staff of the Society

WII/Field Learning Centers/Societies.

(4) Any diversion of funds/ineligible expenditure detected during the

project period would be recoverable from the respective agencies.

(5) In case of dispute the decision of the JS(CS)-MEF would be final.

IN WITNESS WHEREOF: the representatives of the Parties to this Memorandum of

Understanding being duly authorized have signed this Memorandum of Understanding as of

the day, month and year first above written.

Signed for and on behalf Signed for and on behalf

of Ministry of Environment of State level landscape

and Forests Society WII/Field Learning

Centers/Societies

(Gir, Kalakad, Periyar)



Joint Secretary

Ministry of Environment & Forests

Govt. of India

New Delhi

Date:



ANNEXURE VI. GFR RULES FOR GIA

The grants-in-aid will be regulated in accordance with the provisions contained in the

Guidelines of Ministry of Environment & Forests, Government of India, New Delhi. The

Grants-in-Aid is also subject to the Chapter 9 of the General Financial Rules, 2005

(Annexure IV), as amended from time to time, read with the Government of India’s

decisions incorporated there-under, and any other guidelines which may be issued in this

regard, and in particular to the conditions.

I. All relevant information and documents/certificates as required under GFR 209 (1)

(Annexure IV), have been received.

II. The pattern of assistance of rules governing such grants-in aid have received the

approval if the Ministry of Finance, as required under Govt. of the Decision No. (1)

under DFPR-Rules 20 (Annexure -II).

III. Assets acquired wholly or substantially out of Government Grants shall not be

disposed off without obtaining the prior approval of the sanctioning authority of

Grants-in-Aid.

IV. The Accounts of BCRLIP Societies/Foundations shall be audited by C&AG or by any

person authorized by him on his behalf in accordance with the provisions laid down

in section 14 of the C&AG (DPC) 1971 as amended from time to time and provisions of

Rule 211 of GFR. (Annexure –V).

V. The Accounts BCRLIP Societies/Foundations shall be open for inspection by the

sanctioning authority and audit, both by the Controller and Auditor General of India

under the provision of C&AG (DPC) Act 1971 and Internal Audit Party by the Principal

Accounts Office of the Ministry of Department whenever it is called upon to do so.

VI. The BCRLIP Societies/Foundations shall furnish Utilisation Certificate along with

its request for release of Grants-in- Aid certifying that fund released to them for

which Utilization Certificates has not been issued has been utilized exclusively in

pursuance of object envisaged in the Rules/Memorandum of BCRLIP

Societies/Foundations and that the Grant shall be spent with the extent

instruction/rules and with the approval of competent authority in each case.

VII. Performance cum achievement report of BCRLIP Societies/Foundations shall be

furnished within prescribed time limit.

VIII. BCRLIP Societies/Foundations will spend Grants-in-Aid exclusively in pursuance of

the objectives envisaged in rules/Memorandum of BCRLIP Societies/Foundations, for

the purpose it is being sanctioned.

IX. Grants-in-Aid to BCRLIP Societies/Foundations are subject to the Economy Instruction

issued from time to time from the Ministry of Finance or by Competent Authority.

X. Grants-in-Aid shall be utilized before the end of the current financial year and

unspent balance, if any, will be adjusted in the grant of next financial year.



XI. BCRLIP Societies/Foundations will maintain and will present their annual accounts in

the standard format as required under GFR 209.

XII. In case of Non-recurring Grant for specified object:-

a) BCRLIP Societies/Foundations will have to spend the amount sanctioned to them

by the end of month of financial year.

b) Utilization Certificates received for Grants-in-Aid sanctioned during the

year from BCRLIP Societies/Foundations as required under GFR 202 (1) read

with the Form GFR 19-A ((Annexure -IV).



ANNEXURE VII. CONDITIONS FOR

IMPLEMENTING AGENCIES

a. The funds received by the BCRLIP Societies/Foundations shall be deposited in their

exclusive and separate current account in a Nationalized Bank, which would be

operated jointly by its chairperson and the member secretary. Funds in no case to

be kept in the Fixed Deposit/Term Deposits.

b. The BCRLIP Societies/Foundations shall release the amount earmarked for identified

village forest committees (VFCs) by demand draft within 15 days of receipt of funds

from the MEF (BCRLIP), MoEF based on the fund requirement, progress of

implementation and utilsiation of earlier releases.

c. The respective VFCs shall deposit the funds thus received from the BCRLIP

Societies/Foundations in their exclusive and separate account in a Nationalized

Bank/ a Cooperative Bank or a Post Office, which would be jointly operated by

treasure and Member Secretary, i.e., the concerned Forest Block Forest

Officer/Forester.

d. Each VFC shall submit a monthly statement of accounts and progress of works carried

out by them to the BCRLIP Societies/Foundations.

e. BCRLIP Societies/Foundations shall submit a comprehensive quarterly report and

annual report on progress of works and utilsiation of funds in respect of all

Village level organizations to MEF (BCRLIP).

f. The Project shall be implemented in the areas as indicated in the project proposal

and approved by the MEF(BCRLIP).

g. The interest amount accrued on the deposit of these funds shall be treated as part

of the BCRLIP Societies/Foundations additional resources and would be adjusted

towards further installments of grant.

h. The funds released under the scheme can be subject to audit by the Comptroller and

Auditor General of India or his nominated officer. Any other agency/officer (s)

authorized by MEF(BCRLIP) shall have the right of access to scrutiny to the books

and accounts of the BCRLIP Societies/Foundations for the funds received under the

project.

i. The BCRLIP/Societies/ Foundations shall be responsible for guidance, coordination,

supervision, periodical reporting and monitoring the implementation of the project

by their constitute VLOs/Van Panchayat

j. The project shall be monitored periodically by the State Forest Department

officials, MEF (BCRLIP) and all assistance for this purpose will be rendered by the

BCRLIP Societies/Foundations.



k. The project should be completed within the approved project period. The BCRLIP

Societies/Foundations shall furnish 2 copies of detailed report to the MEF(BCRLIP)

on the outcome of the project.

l. MEF (BCRLIP) reserve the right to terminate the grant at any stage if it is

convinced that the grant has not been properly utilized or appropriate progress has

not been made.

m. In case the BCRLIP Societies/Foundations fails to execute the project within the

stipulated time, including such extension as may be granted by MEF (BCRLIP) may, in

its discretion, require the BCRLIP Societies/Foundations refund the grant in whole

or in such part along with interest thereon as MEF (BCRLIP) may specify.

n. There will be no diversion of funds from one VLOs/Van Panchayat to another.

o. The BCRLIP Societies/Foundations will submit non-diversion and non-embezzlement

certificate each time a request for release of grant is made to MEF(BCRLIP).

p. The auditing of accounts of the BCRLIP Societies/Foundations for the project funds

will be carried out by a reputed Chartered Accountant who is also on the panel of

C&AG.

q. The BCRLIP Societies/Foundations also submit a certificate to the effect that all

conditions laid down in the guidelines and the sanction order are being followed

each time a request for release of grant is made to MEF (BCRLIP).

r. BCRLIP Societies/Foundations /VFCs will maintain a record of all assets created

under the project as per GFR 151(Annexure -VI).

s. The details of the VFCs wise revised areas to be treated under the project along

with specific map of the project area.



ANNEXURE VIII. DFP RULE – 20

20. Grants and Loans

Departments of the Central Government and Administrators shall have full

powers to sanction grants-in-aid including scholarships and loans:

Provided that –

(a) such grants-in-aid including scholarships or loans are in accordance with

the rules or principles prescribed with the previous consent of the

Finance Ministry; and

(b) the rate of interest on a loan and the period of payment thereof are fixed

with the previous consent of the Finance Ministry unless the rate of

interest on such loan and the period of repayment thereof are prescribed

in nay general or special order of that Ministry.

GOVERNMENT OF INDIA’S DECISIONS

(1) Certificate to be furnished in grants-in-aid sanctions.- In all sanctions

to grants-in-aid, a certificate to the effect that the pattern of assistance of

rules governing such grants-in-aid have received the approval of the Ministry of

Finance should be included.

[G.I., M.F., O.M. No. F. 12 (69)-E. II(A)/59, dated the 12th September,

1959]



ANNEXURE IX. FORM GFR 19- AFORM OF

UTILIZATION CERTIFICATE

Certified that out of Rs. ……………. of grants-

in-aid sanctioned during the year …….. in

favour of …………. Under this Ministry/Department

Letter No. given in the margin and Rs………. on

account of unspent balance of the previous

year, a sum of Rs. ………….. has been utilized

for the purpose of …………. For which it was

sanctioned and that the balance of Rs……..

remaining unutilized at the end of the year

has been surrendered to Government (vide

No……………., dated ………….) / will be adjusted

towards the grants-in-aid payable during the

next year ………

2. Certified that I have satisfied myself that

the conditions on which the grants-in-aid was

sanctioned have been duly fulfilled / are

being fulfilled and that I have exercised the

following checks to see that the money was

actually utilized for the purpose for which it

was sanctioned.

Kinds of checks exercised

1

2

3

4

5

Signature ……………

Designation…………..

Date …..

Sl.

No.

Letter No. and date Amount

Total



ANNEXURE X. GFR RULES

Chapter 1 of General Financial Rules, 2005

Rule 209. Principles and Procedure for award of Grants-in-aid :

(1) Any Institution or Organisation seeking grants-in-aid from Government will be

required to submit an application which includes all relevant information such as

Articles of Association, bye-laws, audited statement of accounts, sources and pattern of

income and expenditure etc. enabling the sanctioning authority to assess the suitability

of the Institution or Organisation seeking grant. The application should clearly spell

out the need for seeking grant and should be submitted in such form as may be prescribed

by the sanctioning authority. The Institution or Organisation seeking grants-in-aid

should also certify that it has not obtained or applied for grants for the same purpose

or activity from any other Ministry or Department of the Government of India or State

Government.

NOTE : In order to obviate duplication in grants-in-aid, each Ministry or Department

should maintain a list of Institutions or Organisations along with details of amount and

purpose of grants given to them on its web site.

(2) The Internal Finance Wing of the Ministry or Department concerned should lay down the

rules or pattern of assistance under the broad guidelines contained in this Chapter and

instructions issued by the Ministry of Finance from time to time. All sanctions of

grants-in-aid

issued by a Ministry or Department of the Central Government or an Administrator in

exercise of their powers under Rule 20 of the Delegation of Financial Powers Rule, 1978,

as amended from time to time, should conform to the pattern of assistance or rules

governing such grants-in-aid.

(3) Award of grants should be considered only on the basis of viable and specific schemes

drawn up in sufficient detail by the Institution or Organisation. The budget for such

schemes should disclose, inter alia, the specific quantified and qualitative targets

likely to be attained against the outlay.

(4) Subject to the following terms and conditions, grants-in-aid towards administrative

expenditure may be sanctioned to voluntary organizations to ensure a certain minimum

staff structure and qualified personnel to improve their effectiveness and expand their

activities under the following conditions :-

(a) The grants-in-aid should not exceed twenty-five per cent of approved administrative

expenditure on pay and allowances of the personnel of the voluntary organisation

concerned;

(b) Grants-in-aid to meet administrative expenditure to any private institutions other

than the voluntary organizations should not ordinarily be sanctioned. In exceptional

cases such grants can be considered for sanction in consultation with Internal Finance

Wing.



(5) Every order sanctioning a grant shall indicate whether it is recurring or non-

recurring and specify clearly the object for which it is being given and the general and

special conditions, if any, attached to the grant. In the case of non-recurring grants

for specified object, the order shall also specify the time limit within which the grant

or each installment of it, is to be spent.

(6) (i) The sanctioning authority may prescribe conditions regarding quantum and

periodicity for release of Grants-in-aid in installments in consultation with the

Financial Adviser. However, the release of the last installment of the annual grant must

be conditional upon the grantee institutions providing reasonable evidence of proper

utilization of installments released earlier.

(ii) In order to avoid delay in sanction or release of grants in aid to the grantee

Institutions, the Ministry or Department should impress upon Institution or Organisation

desiring grants from Government, to submit their requirement with supporting details by

the end of October in the year preceding the year for which the grants-in-aid is sought.

The Ministry or Department should finalize their examination of the requests with the

utmost expedition and make the necessary budget provision where it is decided to sanction

grants. The Institution or Organisation should be informed of the result of their

requests by April of the succeeding year.

(iii) When recurring grants-in-aid are sanctioned to the same Institution or Organisation

for the same purpose, the unspent balance of the previous grant should be taken into

account in sanctioning the subsequent grant.

(iv) (a) All grantee Institutions or Organisations which receive more than fifty per

cent. of their recurring expenditure in the form of grants-in-aid, should ordinarily

formulate terms and conditions of service of their employees which are, by and large, not

higher than 88 those applicable to similar categories of employees in Central Government.

In exceptional cases relaxation may be made in consultation with the Ministry of Finance.

(b) Grantee Institutions or Organisations should be encouraged to take advantage of the

pension or gratuity schemes or group insurance schemes or house buildings loans or

vehicle loans schemes etc. available in the market for employees instead of undertaking

liability on their own or Government account.

(v) In making grants to non-government or quasi-government Institutions or Organisations,

a condition should be laid down that assets acquired wholly or substantially out of

Government grants, except those declared as obsolete and unserviceable or condemned in

accordance with the procedure laid down in the General Financial Rules, shall not be

disposed of without obtaining the prior approval of the authority which sanctioned the

grants-in-aid.

(vi) The sanctioning authority, while laying down the pattern of assistance, may decide

whether the ownership of buildings constructed with grants-in-aid may vest with

Government or the grantee Institution or Organisation. Where the ownership is vested in

the Government, the grantee Institution or Organisation may be allowed to occupy the

building as a lessee. In such cases suitable record of details of location, cost, name of

lessee and terms and conditions of lease must be maintained in the records of the

granting Ministry or Department. In all cases of buildings constructed with grants-in-

aid, responsibility of maintenance of such buildings should be laid on the grantee

Institution or Organisation.



(vii) Any other special terms and conditions or procedures for transaction of business as

Government may desire to be followed by the grantee Institution or Organisation, shall be

got incorporated in the Articles of Association or bye-laws of the Institution or

Organisation concerned before release of grants-in-aid.

(viii) Grants-in-aid may be sanctioned to meet the bona fide expenditure incurred not

earlier than a year prior to the date of issue of the sanction.

(ix) Before a grant is released, the members of the executive committee of the grantee

should be asked to execute bonds in a prescribed format binding themselves jointly and

severally to:-

(a) abide by the conditions of the grants-in-aid by the target dates, if any, specified

therein; and

(b) not to divert the grants or entrust execution of the scheme or work concerned to

another Institution(s) or Organization(s); and

(c) abide by any other conditions specified in the agreement governing the grants-in-aid.

In the event of the grantee failing to comply with the conditions or committing breach of

the conditions of the bond, the signatories to the bond shall be jointly and severally

liable to refund to the President of India, the whole or a part amount of the grant with

interest at ten per cent. Per annum thereon or the sum specified under the bond. The

stamp duty for this bond shall be borne by the Government.

(x) Execution of bond will not apply to quasi-Government Institutions, Central Autonomous

Organisations and Institutions whose budget is approved by Government.

(xi) The stipulation in regard to refund of the amount of grant-in-aid with interest

thereon should be brought out clearly in the letter sanctioning the grant as well as in

the bond so required to be executed.

(xii) (a) As a precondition to the sanction of grants-in-aid to the agencies where:–

(aa) the recipient body employs more than twenty persons on a regular basis and at least

fifty per cent. of its recurring expenditure is met from grants-in-aid from Central

Government; and

(ab) the body is a registered society or a co-operative institution and is in receipt of

a general purpose annual grants-in-aid of Rupees twenty lakhs and above from the

Consolidated Fund of India; the grant sanctioning authority should ensure that a suitable

clause is invariably included in the terms and conditions under which the grants-in-aid

are given, to provide for reservation for Scheduled Castes and Scheduled Tribes or OBC in

posts and services under such organizations or agencies. The relative provision may be on

the following lines :-

“…………….. (Name of Institution or Organization etc.) agrees to make reservations for

Scheduled Castes and Scheduled Tribes or OBC in the posts or services under its control

on the lines indicated by the Government of India”.

(b) While sanctioning grants-in-aid to Institutions or Organisations referred to in (a)

above, the grant sanctioning authority should keep in view the progress made by such

Institutions or Organisations in employing Scheduled Castes and Scheduled Tribes or OBC

candidates in their services.



(xiii) Central Autonomous Organisations which receive Plan grants as well as Non-Plan

grants, should account for expenditure (Capital and Revenue) separately under Plan and

Non-plan. The Government of India, Ministry of Finance has formulated standard formats

for presentation of final accounts, for all Central Autonomous Organisations. All grant

sanctioning

authorities should enforce the condition of maintaining and presenting their annual

accounts in the standard formats on all Central Autonomous Organisations.

(xiv) The grant sanctioning authorities should not only take into account the internally

generated resources while regulating the award of grants but should consider laying down

targets for internal resource generation by the grantee Institutions or Organisations

every financial year, particularly where grants are given on a recurring basis year after

year.

Rule 210. Accounts of Grantee Institutions : Institutions or Organisations receiving

grants should, irrespective of the amount involved, be required to maintain subsidiary

accounts of the Government grant and furnish to the Accounts Officer a set of audited

statement of accounts. These audited statements of accounts should be required to be

furnished after utilization of the grants-in-aid or whenever called for.



ANNEXURE XI. AUDIT OF GIA

Rule 211. Audit of Accounts of Grants-in-aid :

(1) The accounts of all grantee Institutions or Organisations shall be open to

inspection by the sanctioning authority and audit, both by the Comptroller and

Auditor General of India under the provision of CAG(DPC) Act 1971 and internal

audit by the Principal Accounts Office of the Ministry or Department, whenever the

Institution or Organisation is called upon to do so and a provision to this effect

should invariably be incorporated in all orders sanctioning grants-in-aid.

(2) (a) The accounts of the grantee Institution or Organisation shall be audited by the

Comptroller and Auditor General of India under Section 14 of the Comptroller and

Auditor General of India (Duties, Powers and Conditions of Service) Act, 1971, if

the grants or loans to the institution in a financial year are not less than

Rupees twenty five lakhs and also not less than seventy-five percent. of the total

expenditure of the Institution. The accounts may also be audited by the

Comptroller and Auditor General of India if the grants or loans in a financial

year are not less than Rupees one crore. Where the accounts are so audited by the

Comptroller and Auditor General of India in a financial year, he shall continue to

audit the accounts for a further period of two years notwithstanding that the

conditions outlined above are not fulfilled.

(b) Where any grant and /or loan is given for any specific purpose to any Institution

or Organisation or authority, not being a foreign State or international

Body/Organization, the Comptroller and web site. It should also give its web site

address in the advertisements in ITJ and newspapers.

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