Request for Proposal For Appointment of Audit firm for conducting Internal Audit & ICFR
RFP NO: CO: BFSL/Finance RFP/2018-19/01
Dated: 28-02-2019
BOB Financial Solutions Limited.
2nd Floor, Baroda House,
Behind Dewan Shopping Centre,
S V Road, Jogeshwari West
Mumbai – 400102
Tel: 022- 42086613 / 42086614
Email: [email protected]
1.0. INTRODUCTION
1.1 INVITATION FOR TENDER OFFERS
1.2 ABOUT THE COMPANY
1.3 INFORMATION PROVIDED
1.4 FOR RESPONDENTS ONLY
1.5 CONFIDENTIALITY
1.6 RFP DISCLAIMER
1.7 IMPORTANT DETAILS (SCHEDULE OF EVENTS, CONTACT & COMMUNICATION DETAILS ETC.)
1.8 COSTS TO BE BORNE BY BIDDERS
1.9 LEGAL RELATIONSHIP
1.10 DISQUALIFICATION
1.11 INFORMATION CONFIDENTIALITY
1.12 RECIPIENTS’ OBLIGATION TO INFORM ITSELF
1.13 EVALUATIONS OF OFFERS
1.14 ERRORS AND OMISSIONS
1.15 ACCEPTANCE OF TERMS
1.16 LIABILITIES OF THE COMPANY
2.0. REQUIREMENTS SUMMARY
2.1 INTENT
2.3 TENURE
2.3 LANGUAGE
3.0. SCOPE OF WORK
3.2. PROJECT SCOPE
5.0. SERVICE LEVELS
6.0. RFP RESPONSE INSTRUCTIONS
6.1. RULES FOR RESPONDING TO THE RFP
6.2. PRICE
6.3. PRICE COMPARISONS
6.5. OTHERS
6.6. OTHER RFP REQUIREMENTS
7.0. ADDITIONAL INFORMATION
7.1. NUMBERING OF PAGES
7.2. AUTHORIZED SIGNATORY
7.3. COST OF PREPARING THE BIDS
7.4. CLARIFICATION ON RFP DOCUMENT
7.5. NORMALIZATION OF BIDS:
7.6. VALIDITY OF BIDS
7.7. BIDDER’S QUOTE/OFFER
7.8. INTEGRITY PACT
7.9. SUBMISSION OF BIDS
7.10. OVERALL BID
7.11. COMPLIANCE STATEMENT
7.12. OPENING OF BIDS
7.13. EXAMINATION OF BIDS
8.0. EVALUATION METHODOLOGY
8.1. ELIGIBILITY BID
8.2. EVALUATION METHODOLOGY FOR ELIGIBLE BIDDER
9.0. PAYMENT TERMS
10.0. TERMS & CONDITIONS
10.1. GENERAL
10.2. INDEMNITY
10.3. NO LIABILITY
10.4. EXTENSION OF CONTRACT POST EXPIRY
10.5. TERMINATION OF CONTRACT
10.6. COMPLIANCE WITH LAWS
10.7. ASSIGNMENT
10.8. TRANSPORTATION AND INSURANCE
10.9. INSPECTION OF RECORDS
10.10. PUBLICITY
10.11. SOLICITATION OF EMPLOYEES
10.12. VISITORIAL RIGHTS
10.13. MONITORING AND AUDIT
10.14. GUARANTEES
10.15. FORCE MAJEURE
10.16. RESOLUTION OF DISPUTES
10.17. ARBITRATION:-
10.18. GOVERNING LAW AND JURISDICTION
10.19. CORRUPT AND FRAUDULENT PRACTICE
10.20. WAIVER
10.21. VIOLATION OF TERMS
10.22. ADDITION/DELETION OF QUALIFIED OFFERINGS
10.23. SERVICE LEVEL AGREEMENT AND NON-DISCLOSURE AGREEMENT
10.24. LIQUIDATED DAMAGES
10.25. SET OFF
10.26. INFORMATION OWNERSHIP
10.27. SENSITIVE INFORMATION
10.28. PRIVACY AND SECURITY SAFEGUARDS
10.29. CONFIDENTIALITY
10.30. DISCLOSING PARTY
10.33. GRIEVANCE REDRESSAL
ANNEXURES & APPENDICES
LIST OF ANNEXURES:
LIST OF APPENDICES:
1.0. Introduction
1.1 Invitation for Tender offers
BOB Financial Solutions Limited [Formerly known as Bobcards Ltd.] invites sealed tender offers (Eligibility, Technical bid and Commercial bid) from eligible, reputed entities for RFP for Appointment of Audit firm for conducting Internal Audit & ICFR In this RFP, the term bidder/ prospective bidder refers to the primary bidder participating for delivering services mentioned in the scope of works.
Complete set of tender documents may be downloaded by eligible bidder from the website of the Company. The Company reserves the right to reject any or all offers without assigning any reason.
Technical Specifications, Bill of Material documents, Terms and Conditions and various formats and pro forma for submitting the tender offer are described in this document, Annexures and Appendices.
1.2 About the Company
Established in the year 1994, BOB Financial Solutions Limited [Formerly known as Bobcards Ltd.], a Company having its Regd. & Corporate Office at 2nd floor, Baroda House, S V Road Jogeshwari (West), Mumbai -400 102 (herein after referred to as a ‘Company’) is a wholly owned subsidiary of Bank of Baroda, a large public sector bank having global presence with its vast network of over 5,500 branches. The company is in the business of Credit cards, Acquiring Operations, Personal loans. The company also provides back end support for Debit cards operations to Bank of Baroda for their RRBs & International territories and also is acting as DST agent for BOB.
The company has a network of 38 area offices spread throughout the country as on date. The Company is involved in both cards Issuing and Acquiring business.
The Company’ s Corporate Office is located at Jogeshwari West Mumbai which has got a small setup for hosting certain applications, MPLS/P2P connectivity with Bank’s Data centre (DC) which is located in BKC, Mumbai and Disaster Recovery centre at Hyderabad. Besides this the company has got 38 Area Offices spread across the country. The company intend to host its various applications in a partner Virtual Data Centre.
1.3 Information Provided
This document contains statements derived from information believed to be reliable at the date obtained but does not purport to provide all the information that may be necessary or desirable to enable an intending contracting party to determine whether or not to enter into a contract or arrangement with the Company in relation to the RFP for Appointment of Audit firm for conducting Internal Audit & ICFR. Neither the Company nor any of its employees, agents, contractors, or advisers gives any representation or warranty, express or implied, as to the accuracy or completeness of any information or statement given or made in this document.
1.4 For Respondents Only
The document is intended solely for the information of the party to whom it is issued (“the Recipient” or “the Respondent”).
1.5 Confidentiality
The Invitation document is confidential and is not to be disclosed, reproduced, transmitted, or made available by the Recipient to any other person. The Invitation document is provided to the Recipient on the basis of undertaking of confidentiality given by the Recipient to Company. Company may update or revise the document or any part of it. The Recipient acknowledges that any such revised or amended document shall be received subject to the same confidentiality undertaking. The Recipient will not disclose or discuss the contents of the document with any officer, employee, consultant, director, agent, or other person associated or affiliated in anyway with Company or any of its customers or suppliers without the prior written consent of Company.
1.6 RFP disclaimer
This Request for Proposal containing Annexures and subsequent Addenda and Corrigenda (Herein after called as RFP or tender) has been prepared solely for the purpose of enabling the Company to select a Service Provider for RFP for Appointment of Audit firm for conducting Internal Audit & ICFR as per specifications, terms and conditions and scope defined in this RFP (herein after referred as RFP for Appointment of Audit firm for conducting Internal Audit & ICFR
The bidder will be required to be innovative, capable and would need to extend all their resources and services in order to meet the expectation of the Company towards providing the required services.
This RFP document is not a recommendation, offer or invitation to enter into a contract, agreement or other arrangement in respect of the supply and services as per the scope of this RFP.
1.7 Important Details (Schedule of Events, contact & communication details etc.)
| 1. | RFP No. | CO: BFSL/Finance RFP/2018-19/01 |
| 2. | Brief Description of the RFP | RFP for Appointment of Audit firm for conducting Internal Audit & ICFR |
| 3. | Company’s Address for Communication and submission of Tender | AVP Procurement BOB Financial Solutions Limited, 3rd floor, Hallmark Business Plaza , Gurunanak BARC Hospital Road, Bandra East . Mumbai – 400051 |
| 4. | Date of issue | 28-02-2019 |
| 5. | Last date of submission of Queries for Pre- Bid Meeting | 11-03-2019 before 12:00pm |
| 6. | Date & Venue of Pre-Bid Meeting | 11-03-2019 at 3:00pm Venue: BOB Financial Solutions Limited, 3rd floor, Hallmark Business Plaza , Gurunanak BARC Hospital Road, Bandra East . Mumbai – 400051 |
| 7. | Last date & time for submission of Bids | 21-03-2019 at 0400 pm |
| 8. | Date and time of Opening of Eligibility and Technical Bid | 22-03-2019 at 11:30pm |
| 9. | Date and time of Opening of Commercial Bid | The commercial bids of only those vendors who qualify in both eligibility and technical evaluation will be opened. The date for opening of the commercial bid would be communicated separately to the technically eligible vendors. |
| 10. | Bid document cost (non-refundable) | Not Applicable |
| 11. | Bid Security (EMD) | Not Applicable |
| 12. | Contact Person for any clarification | Mr. Rajesh Mhatre |
The above dates are tentative and subject to change without any prior notice or intimation. Bidders should check website www.bobfinancial.comfor any changes / addendums to the above dates and/or any other changes to this RFP. Bidders to confirm with Company the time & venue -1- day prior to any of the above scheduled event.
Eligibility cum Technical bids will be opened, in the presence of the bidder’s representatives who choose to attend the opening of technical bid. No separate communication shall be sent in this regard. Subsequently, the company will evaluate the Technical Bids and the bidders shall be suitably intimated about their Technical bid after evaluation.
Commercial bids will be opened in the presence of the of the bidder’s representatives who are found technically qualified by Company upon evaluation and choose to attend.
The services of selected vendor can automatically be availed by Bank of Baroda and all its subsidiaries, basis terms and conditions of the requirement and in line with the cost identified for the said RFP.
1.8 Costs to be borne by bidders
All costs and expenses incurred by Bidders in any way associated with the development, preparation, and submission of their responses to the RFP, including but not limited to attendance at meetings, discussions, presentations, demonstrations, etc. and providing any additional information required by the Company, will be borne entirely and exclusively by the Bidder and the Company shall not liable for any costs and/or expenses in relation to responses to the RFP and/or shall not entertain any requests / representations regarding bearing/sharing of costs and /or expenses.
1.9 Legal Relationship
No binding legal relationship will exist between any of the Bidders and the Company until execution of a definitive legal agreement.
1.10 Disqualification
Any form of canvassing/lobbying/influence/cartelization, etc. by the Bidder may result in disqualification of such Bidder
1.11 Information Confidentiality
The information contained in this RFP is strictly confidential. The Bidder shall not share this information with any other person/party not connected with responding to the RFP or even with other potential Bidders. The information contained in the RFP or subsequently provided to Bidder(s), whether verbally or in writing by or on behalf of Company shall be subject to the terms and conditions set out in the RFP and any other terms and conditions subject to which such information is provided.
1.12 Recipients’ Obligation to Inform Itself
It is the Recipient’s responsibility to conduct all necessary investigation and analysis regarding any information contained in the document and the meaning and impact of that information.
1.13 Evaluations of Offers
Each Recipient acknowledges and accepts that the Company may, in its sole and absolute discretion, apply whatever criteria it deems appropriate in the selection of organizations, not limited to those selection criteria set out in this document. The issuance of document is merely an invitation to offer and must not be construed as any agreement or work order or arrangement nor would it be construed as material for any investigation or review to be carried out by a Recipient. The Recipient unconditionally acknowledges by submitting its response to this document that it has not relied on any idea, information, statement, representation, or warranty given in this document.
1.14 Errors and Omissions
Each Recipient should notify the Company of any error, omission, or discrepancy found in this document. Notification should be made to the address found in proposal related details
1.15 Acceptance of Terms
The purpose of the RFP is to provide necessary information to the potential Bidders, who qualify and intend to submit their response to the RFP. Though the RFP has been prepared with sufficient care and diligence with an endeavour to provide all required information to the potential Bidders, Company acknowledges the fact that the potential Bidders may require more information than what has been provided in the RFP. Accordingly, in such cases, the potential Bidder(s) may seek additional information/clarification required from Company. Company reserves the right to provide such additional information/ clarification at its sole discretion. In order to respond to the RFP, if required, and with the prior permission of Company, each Bidder may conduct their own study and analysis, as may be necessary, at their own cost and expense ensuring they adhere to the timelines mentioned in the RFP. No additional time will be provided to Bidders to undertake any analysis or study.
Company makes no representation or warranty and shall incur no liability, whatsoever, under any law, statute, rules or regulations on any claim the potential Bidder may make in case of failure to understand the requirement and respond to the RFP.
Company may, in its absolute discretion, but without being under any obligation to do so, update, amend or supplement the information given in the RFP and specify additional user requirements or cancel the RFP at any time without assigning any reason thereof and without any notice.
While due care has been taken in the preparation of this document, Company will not be held responsible for any inaccuracy in the information provided herein. The recipient of the RFP must apply its judgment, care and conduct its own investigation and analysis regarding any information contained in the RFP document including but not limited to the scope of work, Deliverables and timelines, etc.
It is the Bidder’s responsibility to:
- Properly understand and examine the RFP;
- examine all other information available on reasonable inquiry relevant to the risks, contingencies and circumstances affecting its response;
- satisfy itself as to the completeness, correctness and sufficiency of its response;
A recipient will, by responding to the Company’s RFP document, be deemed to have fully read, understood and accepted all the terms as stated in this RFP document.
1.16 Liabilities of the Company
This Invitation is not an offer by the Company, but an invitation for Vendor responses. No contractual obligation on behalf of the Company whatsoever shall arise from the invitation process unless and until a formal Purchase Order/Work Order is signed and executed by duly authorized officials of the Company and the select bidder.
Willful misrepresentation of any fact within the Bid will lead to the cancellation of the definitive agreement, without prejudice to the other actions that the Company may take. All the submissions, including any accompanying documents, will become the property of BOB Financial Solutions Ltd.
2.0. Requirements Summary
2.1 Intent
The Company is issuing this RFP document (hereinafter referred to as “the RFP” which expression shall include all attachments and annexures hereto as well as all amendments, addendums, modifications and alteration hereto) to service providers, (hereinafter referred to as “the Bidder”) to enable them to participate in the competitive bidding for RFP for Appointment of Audit firm for conducting Internal Audit & ICFR”.
The bidder will be required to be innovative, capable and would need to extend all their resources and services in order to meet the expectation of the Company towards the desired Services.
The Company at its discretion reserves the right to change the scope of the RFP considering the size and variety of the requirements and the changing business conditions.
Bidders are requested to submit commercial proposal as per SOW in format provided in Appendix 02 – Commercial Bid . The calculation will be considered for arriving at TCO for evaluation purpose however the payment will solely be based on actuals.
2.2 Tenure
The appointment of the selected internal audit firm shall be initially for a period of two financial years (i.e. FY 2019-20 & FY 2020-21) & renewable thereafter for one year on mutually agreed basis. (For third years professional fees may be escalated by upto 15%.)
2.1 Language
The RFP for Appointment of Audit firm for conducting Internal Audit & ICFR should be in English. However it should have the capability to support certain communication templates in Hindi language. This capability shall be a part of standard offering of the RFP for Appointment of Audit firm for conducting Internal Audit & ICFR including report printing by the Company users. The data in the database will be stored in English language.
3.0. Scope of Work
The company is in a transformation phase & may outsource certain backend operational processes during the course of the coming financial year. The selected Internal auditor will need to realign their audit program/procedure during the financial year to accommodate for such transition.
Extent of sampling / test checking will be the responsibility of Internal audit firm depending upon the generally accepted audit principles and methodology.
The Process of Internal Audit should start with the identification of the objectives laid down by the Management, verification of the plan of action, its execution, and critical analysis.
Internal Audit should not be confined only to finance audit, should go beyond vouching, verification, checking the arithmetical accuracy etc. Adequate emphasis would need to be accorded to testing the IT systems & operational risks and controls on which the generation of financial information is dependent.
Internal Auditor should review and appraise the adequacy, reliability and effectiveness of Internal Control System. The Internal Auditor should identify the absence of Internal Control System, if any and report the same with suggestions for improvement.
The internal audit assignment would be divided into the following 2 parts:
1. Internal Audit for the respective financial year – to be conducted on an ongoing basis, quarterly report on key observations to be presented to the Audit & Risk Committee of BFSL Board at their quarterly meetings
2. Review and Testing of Internal Financial Controls –
Broad anticipated scope of the Internal Audit is as follows:
A. Credit Card Operations
| S. No. | Particulars |
| Issuance | |
| 1 | KYC Compliance for new cards issued as per Policy. |
| 2 | Currently card credit limits are decided by a standard Policy based on COS risk assessment. |
| 3 | Accuracy of data captured in the Card origination system. |
| 4 | Checking of cards sent, cards received and returned (Dispatch system) |
| 5 | Checking of PINs generated and dispatched to customers. |
| 6 | Physical checking of card plastic inventory on half yearly basis. |
| CRM | |
| 7 | Efficiency/Accuracy of processing the transactions, billing, service charges etc. |
| 8 | Scrutiny of high balance (Dr./Cr) in Card Accounts |
| 9 | Returned bill management (emphasis on undelivered bills) |
| 10 | Customer relation management (Quality assessment of Customer satisfaction such as types of complaints/TAT of resolution of complaints/Toll free numbers are not reachable etc.) |
| 11 | Membership Rewards point processing and accounting |
| Recovery | |
| 12 | Collection methods and follow up (credit card dues) |
| 13 | Verification of allocation of work among the recovery agency and analysis of performance of recovery agent vis-à-vis cost incurred on recovery agent. |
| 14 | Review of NPA portfolio & compromise proposals at transaction level |
| Other Risk Operations | |
| 15 | Review process of Chargeback. |
| 16 | Review process of Fraud provisioning and reporting adherence as per Compliance/RBI requirements |
B. Merchant Acquiring Operations
| S. No. | Particulars |
| 1 | Merchant onboarding – enrolment of new ME & delisting of non-profitable ME |
| 2 | Verification of documentation for KYC compliance & underwriting process |
| 3 | Accuracy & quality check of the data captured in the Merchant Management System |
| 4 | Verification of subvention claims pertaining to Merchant Enrolment from Bank of Baroda, Regulators/Government agency etc. |
| 5 | Review of rate of commission for break-even point for ME business |
| 6 | Customer relation management (Quality assessment of Customer satisfaction such as types of complaints/TAT of resolution of complaints/Toll free numbers are not reachable etc.). Verification of complaints/escalations adhering to turn around time lines |
| 7 | Verification of Charge backs (Review of Charge back framework and chargeback procedure as per norms) |
| 8 | Visa, MasterCard & Rupay guidelines-compliance (VISA/MASTER/RUPAY: Settlement agencies have their own guidelines/compliances which we need to comply with) |
C. Debit card Operations
| S. No. | Particulars |
| 1 | Physical checking of card plastic inventory on half yearly basis. |
| 2 | Review of SLAs and invoicing to BOB (and its group entities) for the back office support provided for their Debit Card Operations. |
D. Personal Loans
| S. No. | Particulars |
| 1 | Verification of new application forms particularly for KYC compliance |
| 2 | Accuracy of data captured in the Loan origination system/LMS |
| 3 | Verification of interest applied on personal loan, other fees and income |
| 4 | Review of NPA portfolio including compromise proposals |
| 5 | Verification of reconciliation of all related GL balances |
| 6 | Verification of recovery, disbursement and collection process |
E. HR Department
| S. No. | Particulars |
| 1 | Review of hiring process wrt to approved policy |
| 2 | Payment of staff salaries and statutory dues (including leave records, PF & TDS deductions/deposit) |
| 3 | Review of payroll process for selected months – end to end process including generation of salary voucher and payment thereof. |
| 4 | Budget Vs actual hiring costs and headcount comparison |
| 5 | Review and validation of incentives payment to sales staff/outsourced staff as per the approved policy on monthly basis along with payout cycle. |
F. Finance & Accounts
| S. No. | Particulars |
| 1 | Checking the authority of expenditure as per Delegation of authority matrix (including capital expenditure) |
| 2 | Verification of Cash Book transactions |
| 3 | Scrutiny of general Ledger & reconciliation status for all general ledgers |
| 4 | Scrutiny of income and expenses |
| 5 | Scrutiny of Bank Reconciliation statements |
| 6 | Verification of income and expenses related to all business segments. |
| 7 | Reviewing of computation of advance tax, verification of timely deduction of TAX at source [TDS] |
| 8 | Compliance of accounting standards & accounting policies of the company |
| 9 | Fixed assets accounting, depreciation verification as per companies act 2013. |
| 10 | Review of billing to Bank of Baroda and related expenses including DST division. |
| 11 | Verification of wage bill & payments made for off-roll employees. |
G. Admin Department
| S. No. | Particulars |
| 1 | Review of Annual Maintenance Contracts |
| 2 | Checking of inventory of numbered stationeries |
| 3 | Review of expenses processed through Admin department, wrt agreements, approvals etc including TADA bills |
| 4 | Review of all purchases in line with the procurement policy & DAP. |
| 5 | Review of all vendor outsourcing management in line with RBI guidelines |
H. Legal & Compliance Department
| S. No. | Particulars |
| 1 | Checking of compliance of various provisions of the Companies Act 2013. |
| 2 | Review of compliance on KYC/AML/FATCA/Income tax/GST. |
| 3 | Review of all existing Company policies & processes and suggest gaps/ improvements. |
| 4 | Analyze the applicable regulatory and statutory norms to the company as an NBFC and wholly owned subsidiary of a PSB and highlight the status of compliance. |
| 5 | Verification of various contracts entered by the company wrt to currency/validity of agreements and incorporation of relevant regulatory and statutory clauses, Including intercompany contracts & SLAs. |
I. Certification work.
| S. No. | Particulars |
| 1 | Verification & Quarterly certification to RBI with regards to subvention of MDR on debit/credit card transaction for less than Rs. 2000/- |
| 2 | Verification & monthly certification to OMC with regards to reimbursement of fuel Incentive pass to cardholder for debit/credit card transaction & MDR on debit card transaction for greater than Rs. 2000/- (For pervious FY 2017-18, FY 2018-19) |
| 3 | Yearly certificate to Visa/ master regarding AML KYC Compliances. |
| 4 | Any other certification required by Bank of Baroda (parent organization) towards any claim submission to them. |
| 5 | Other certifications as required by Authorities from time to time |
ICFR – Broad anticipated scope is as follows:
Our broad scope of work will be to review the IFC system related to Financial Reporting to comply with the regulatory requirement. Scope of work has been divided in the following sections:
- Design assessment of existing IFC system over Financial reporting
- Perform & document walkthroughs to understand the design of existing IFC system
- Document controls with respect to the identified risks and process maps prepared by the company.
- o Segregate controls into Entity level control, Process controls & IT general controls & further segregation basis Manual, Automated, Preventive & Detective.
- Perform segregation of duties analysis
- Prepare a Risk Control Matrix for each significant accounts/process to be covered for review
- Identify design gaps based on walkthroughs, interviews & discussion
- Testing the operating effectiveness & Gap remediation
- Prepare testing plan & templates
- Document testing results & identification of material gap/ non-material gap.
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