Audit of Civil & Electrical works including cable duct work Slide 5.2

1. Audit of Civil & Electrical works including cable duct work Slide 5.2

2. Types of Civil / Electrical works in Telecom sector Slide 5.2 Civil Works : Construction of exchange building Construction of Administrative Building Construction of Staff Quarters Repair & Maintenance of existing buildings Petty works Special Repair & Structural rehabilitations of existing buildings Deposit Works Cable duct construction

3. Electrical Works : Internal Wiring Substations for telephone exchange buildings & major buildings Air-conditioning Plants & AC units Engine Alternators Lifts – Passengers / Lifts Fire detection & protection Maintenance of electrical installations Slide 5.2

4. NIT (Notice Inviting Tender); Sale of tender & EMD Sanction of DE Publishing of NIT Approval of Competent authority Publicity (thru press) when cost of tender above Rs.2 lakh Eligibility conditions, crucial dates, EMD amt, probable date of completion etc. should be clearly specified. • Audit checks : • In addition to the above, audit should also check – • Whether forms sold after proper verification of eligibility • Whether cost of tender form collected • Whether details of work noted in register. Slide 5.2

5. Opening of Tenders/Validity (Comparative Statement) On specified date, open biddings in the presence of bidders Noting requisite particulars in the Tender Opening Register Certification of the register by the EE/AE incharge of the work Preparation of comparative statement indicating rates of all bidders (item wise) by the EE/AE concerned Comparison of rates with estimated/justified cost Deciding L1, L2, … tenders Verification of the comparative statement by Accounts Officer Slide 5.2

6. Project Estimate / Detailed Estimate Slide 5.2 • Audit checks : • PE without requisition & justification • No linking to earlier similar work in the same site • No detailed survey/structural drawing based on which quantum of work will be decided • PE at higher side by inflating figures & actual DE at reduced quantity giving scope for allotment of extra items after award of work. Preparation of detailed structural drawings by civil wing Based on requisition, preparation of preliminary estimate Sanction of the competent authority

7. Administrative Approval & Expenditure Sanction In MTNL sanction to PE is the procedure to convey the sanction for expenditure AA/ES accorded by Head of Circle (BSNL) AA & ES and PE sanction (Duct) accorded only after budgetary provisions. No work will be commenced/expenditure incurred before AA & ES and sanctioned PE. • Audit checks : • To see financial powers • To see the provisions in preliminary estimate & budgetary provisions • Slide 5.2

8. Detailed Estimate / Technical SanctionSlide 5.2 After sanction of AA & ES/PE, detailed drawings/survery report will be prepared by Civil wing Based on this DE/TS will be accorded Tenders can be called for only after DE / TS DE based on DOT std, cost index & local market rates DE is the basis for NIT / award of work • Audit checks : • In addition to the above, audit should also check – • whether there is splitting up of PE into two or more Des • whether any deviation exist in quantity/ cost at DE stage • to see all requisitions/justifications were incorporated • to see survey/structural drawings were enclosed to DEs

9. Evaluation of tenders, tender evaluation committee & tender finalization Slide 5.2 TEC formed by the comparative authority TEC goes through the biddings as per conditions of NIT & recommend the biddings of L1 • Audit checks : • In addition to the above, audit should also check – • Whether all conditions discussed • Whether EMD submitted by L1 / L2 • Whether rates quoted are not exceptionally high or low • If biddings are limited, TEC should recommend for rejection

10. Agreement, Security Deposit and Bank GuaranteeSlide 5.2 Lowest bidder called for entering into agrmt in the pres. Form Agreement should specify all conditions : - dt of commencement of work, completion, extn. of time - escalation clauses, labour coordination, deviation - rates & taxes, acceptance testing, guarantee period etc. • Audit checks : • In addition to the above, audit should also check – • whether there is any weaker clause which will benefit the tenderer at later stage. • whether paymt conditions were incorporated • Details of SD to be recovered to be entered in agrmt • whether work was completed after furnishing the perf. guarantee

11. Contract period, commencement of work etc.Slide 5.2 • Audit checks : • To verify contract period w.r.t. urgency justified to D.E./P.E. • To examine notings in Hindrance register, • whether proper care taken to safeguard dept. interest while granting extension of time. • To verify whether all the instructions were noted in the site order book & accepted by the contractor. If any hindrances occur during the contract period, the contractor should apply for extension of time in writing along with copy of hindrance register duly accepted by Engg. Officer.

12. Issue of materials Slide 5.2 • Audit checks : • To verify the issue rate so as to highlight the irregularities in fixing the rate. • whether the utilisation was justified with reference to theoretical consumption statement. materials will be issued to the contractor, if agreed in the agrmt rates of materials fixed based on cost & other overhead expdre cost of material used will be debited to the work in case of excess, to be recovered from contractor.

13. Extra/Substituted item and DeviationSlide 5.2 • Audit checks : • whether prior sanction obtained for any extra/substituted deviated items • whether proper justification was furnished • whether extra/substituted items were properly linked to original survey/drawings • comments on defective survey which resulted in major deviation & extra items along with monitory value should be given • whether any undue favour was given to contractor by not disclosing the item in original estimate/NIT and agreement.

14. Acceptance listing, completion certificate & occupancy certificate Slide 5.2 Acceptance listing carried out to verify the quality & quantity of work Defects noticed by the Acceptance Testing Wing should be rectified by the contractor at his own cost After clearance from the ATW, completion certificate issued by the Engineering Officer duly countersigned by the higher authority. • Audit checks : • In addition to the above, audit should also check – • All the defects noticed by the AT wing should be rectified if not penalty should be imposed • Utilisation of the asset as justified in the Project Estimate.

15. Payment of advances & recovery Slide 5.2 Contractor Ledger Two types of advances made to the contractors after commencement of the work : Mobilization Advance Material Advance • Separate ledger, work wise to be maintained • Following particulars to be noted in the ledger : • Details of work awarded, cost, dt of commencement & due date • Advances, running bill, final bills & escalation alongwith recoveries & voucher particulars

16. Measurement Book Slide 5.2 • Basic record for any payment in respect of work done • Certified by the Supervising Officer(100%) • Test checked by EE(I) (10%) • MB should be serially numbered • Completed MBs to be returned to Accounts branch for safe custody • Loss of MB due to theft or fire to be brought to the notice of higher authority & police immediately.

17. Running Bill / Final Bill / Deduction Slide 5.2 Running Account Bill : Claim preferred by contractor as & when work is completed. Payments verified with entries of MB as well as contractor ledger. Final Bill : Claimed on completion of entire work Completion certificate & clearance from AT wing essential. Deductions : From each running / final bill following deductions made : Security Deposit } Income Tax } Statutory Works Contract Tax } Recovery of advance Recovery of penalty if imposed