Independent Auditor (IA)

Introduction :

While preparing the draft Concession Agreement for any project, the Procuring Entity shall specifically consider the need to appoint an Independent Auditor for the project and if considered necessary, include necessary provisions in the Agreement. An Independent Auditor shall be appointed with the specific prior concurrence of the Procuring Entity and shall not be removed or replaced without the approval of the Procuring Entity.

Description:

1. Scope of Work for IA:

a. The role of the Independent Auditor would encompass:
(i) Advising Procuring Entity in the calculation of all financial parameters of the Project including the Total Cost of the Project, Returns and Recovery accounting and shall provide, at the end of each financial year, a certificate confirming the accuracy of all calculations made during the relevant financial year.
(ii) Verification of the records and invoices provided by the Concessionaire and shall advise the Procuring Entity of the results of his quarterly audit within one month after the end of the relevant quarter.
b. The scope of work as envisaged will be carried out during two different stages of the project.
(i) Construction Stage.
(ii) Operation Stage.
c. The IA would carry out the work specified as scheduled above and would employ qualified and experienced person of the type and nature as desirable to carry out the assignment.
d. The appointment of the IA to be for a period of 3 years initially and is extendable as mutually agreed between the parties concerned.
e. The IA to employ a team of qualified Chartered Accountants / Cost Accountants / other professions as required to carry out the assignment.
f. The Concessionaire to provide all the necessary information required by the IA and to provide access to all the records to enable the IA to carry out their responsibilities.

Relevant Clauses:

TNTIT(PPP) Rules, 2012
Rule 45	Appointment and Role of Independent Auditor. (1) While preparing the draft Concession Agreement for any project, the Procuring Entity shall specifically consider the need to appoint an Independent Auditor for the project and if considered necessary, include necessary provisions in the Agreement. (2) An Independent Auditor shall be appointed with the specific prior concurrence of the Procuring Entity and shall not be removed or replaced without the approval of the Procuring Entity. (3) The Independent Auditor’s scope of work shall be specified in the Concession Agreement and shall inter-alia include certifying the accuracy and correctness of any financial calculations or claims required to be made by Concessionaire under the Concession Agreement. (4) The Independent Auditor shall prepare and submit to the Procuring Entity a quarterly report and such other special reports as the Procuring Entity may seek. (5) An indicative scope of work for the Independent Auditor is provided for guidance in Schedule-II of the rules
Rule 60	Monitoring of Concession Agreement. (1) Procuring Entity that enters into a Concession Agreement shall make adequate institutional arrangements to monitor the performance of the Concessionaire under such agreement. (2) Such arrangements shall include the receipt, study and corrective action based on the reports of the Independent Engineer and Independent Auditor.

TNTIT(PPP) Rules, 2012

Rule 45

Appointment and Role of Independent Auditor.

(1) While preparing the draft Concession Agreement for any project, the Procuring Entity shall specifically consider the need to appoint an Independent Auditor for the project and if considered necessary, include necessary provisions in the Agreement.

(2) An Independent Auditor shall be appointed with the specific prior concurrence of the Procuring Entity and shall not be removed or replaced without the approval of the Procuring Entity.

(3) The Independent Auditor’s scope of work shall be specified in the Concession Agreement and shall inter-alia include certifying the accuracy and correctness of any financial calculations or claims required to be made by Concessionaire under the Concession Agreement.

(4) The Independent Auditor shall prepare and submit to the Procuring Entity a quarterly report and such other special reports as the Procuring Entity may seek.

(5) An indicative scope of work for the Independent Auditor is provided for guidance in Schedule-II of the rules

Rule 60

Monitoring of Concession Agreement.

(1) Procuring Entity that enters into a Concession Agreement shall make adequate institutional arrangements to monitor the performance of the Concessionaire under such agreement.

(2) Such arrangements shall include the receipt, study and corrective action based on the reports of the Independent Engineer and Independent Auditor.