checklists remarks

8/4/2019 Checklists Remarks

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Audit checklists MAA Television Network Limited Praturi & Sriram

Page 1

1. Checklist on PF

I.EMPLOYERS AND EMPLOYEES CONTRIBUTIONS

Particulars Yes/No/NA Observations

a) Is this establishment covered under thescope of PF Act? (based on number of

employees)

Yes

b) Check whether Registration Certificate is

obtained or not? If applicable. If

obtained what is the Business

number?

Yes Allotted business code is

AP/HY/42265

c) Does the establishment fulfill the

essential requirements mentioned in the

Act? (Requirements as per the Act:

number employees > or equal to 20 to

this(maa tv) type of establishment

Yes

d) Are proper personnel records kept for

all employees (e.g. engagement letter,

rates of pay, specimen signatory, etc)?

Yes

e) Check the correctness of PF

Computation with respect to the

percentages and also maximum ceiling

amounts i.e. 12% in terms of Percentage

in both the cases of employee andemployer (Employer's Share Total

13.61% breakup is as follows

goes to EPF - 3.67%

goes to Pension Fund (FPF) - 8.33%

Administration charges to be borne by

Employer - 1.1%

Employees' Deposit Linked Insurance

(EDLI) - 0.5%

Adm. charges to EDLI - 0.01%) &

maximum ceiling of Rs.780 (employer

contribution).

We observed that the PF calculation

in this establishment is as follows:

a) Employer Contribution: First 12%

is calculated on total wages/basic,

then they adjust 8.33% towardspension fund but subject to max of

542(i.e. 8.33% on 6500 amount of

wages) and balance to EPF account.

But as per Act EPF is also subject to

ceiling i.e.Rs.780 which is 12% on

6500.

b) Employee contribution: calculated

as 12% on the total basic, i.e. As per

the Act.

f) Check the definition of salary for the

purpose of calculation of PF as per the

Provident Fund Act (Basic wages + DA +

retaining allowance)

Yes Salary for the purpose of PF

calculation is Only Basic, because DA

is not applicable to this

establishment.

g) Ensure that the total contributions are


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credited to the correct account of the

Fund by 15th of the succeeding month.

Yes

h) Check contributions of both employees

and the employer into the individual

accounts of members of the fund.

Yes We observed that these amounts are

credited to the employee account

annually, by the PF Authorities based

on information provided in Form 3A

(Showing the details of the

employees and contribution,

voluntary higher contribution,

Business code of the employer,

period, etc..)

i) Where an employee makes voluntary

contributions

Check with reference to the receipt

books, if they are made in cash.

Check with the applications received ifthey are deducted from the salaries.

No

j) Do you have contracted labor? If yes

whether PF is applicable to them also?

(if organization is covered under PF then

PF applicable to them also)

Yes Contract labor is only for

housekeeping and security purposes.

Panjagutta office : Gayatri security

for both house keeping and security

Madhapur office: Simon and Shield

for housekeeping, B-earth spire

(India) limited for security

To them PF is not applicable because

they have to pay the contractedamount to the contractor

k) Is Inspection Note book maintained by

the company? Examine the remarks

quoted by PF Inspector visiting the

Company periodically.

Yes Though inspection note book is

there, no remarks are quoted in the

book

l) At what period are the returns filed by

the establishment?( As per the Act

returns should be filed within one

month from the end of the financial

year.)

Yes Annual returns Submission period for

this establishment is from March to

February, but this year PF returns are

submitted on 12-07-2011, which falls

out of the due date, & the HR

executive gave an explanation that

due the change in software of PF

office there was delay , but no

documentary evidence was provided

m) If an employee is recruited, within how Yes Date of joining


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many days is he covered under these

acts? (from the date of joining)

n) Check whether PF Form 10 (containing

the details of employees left) submitted

by 25th of the following month to the

concerned PF authorities or not?

Yes Form 10 submitted in April, May,

June, July.

Submitted on June 2011

Four members left the organization

(Sai rama Krishna , Seetha polaganmi

, Manoj kumar , Uttam Kumar)

o) When an employee is terminated/has

resigned from the establishment and

has been recruited in an organization

covered under PF Act then check that

the amount standing to his credit had

been transferred to his account.

Yes We observed that this amount is

either transferred to his new PF

account or paid to him by Cheque

/Transferred to his bank account.

After expiry of 3 years the employee

has to prove himself as the employee

of the organization by attesting

notary on a stamp paper that he isthe concerned person

p) Check whether there are any disputed

claims/pending claims?

Yes Pending claims: List is not provided.

II. INTEREST ON EMPLOYEES AND EMPLOYERS CONTRIBUTIONS

a) Examine the method by which the rate of

interest is arrived at(9.5% on PF deposits)

Interest is calculated on the monthly

balances standing on the credit of the

employee

b) Ensure that the rate is not in excess of

the prescribed rate since any excess will

be considered income for tax purposes.

Since the interest is calculated by the

PF authority & directly remitted to

the employees PF account &

therefore it is unable for us to check

there personal accounts

c) Examine the tax implications if it exceeds

the prescribed rate. Ensure that the

employer is advised for further action in

respect of TDS aspects.

Pending:

1. Proof for due dates and calculation of PF, etc..

2. Pending Claims


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2. Checklist on ESI

S.No Particulars Yes/No/NA Remarks

1 Is this establishment covered under the scope

of ESI Act?(based on number of

Employees)(excluding seasonal factories)

Yes

2 Check whether the Registration Certificate

obtained or not (If applicable)? If obtained

what is the code allotted to the

establishment?

Yes Code allotted 52-20447-90

dated 18/1/2002

Principal employer D. Suresh

Babu(verified Xerox copy)

3 List of Workers/employees for whom ESI

deposited (Regular + Casual +part time +temporary +contracted labour) and also list of

employees to whom ESI is not applicable.

(contracted labour: if organization is covered

under ESI then ESI applicable to them also)

Employees whose gross salary is

less than or equal to Rs.15000.Separate list is not maintained,

ESI is deposited based on salary

statements. So for the details of

number employees and gross

salaries, only proof is salary

statement.

4 Whether employers have obtained declaration

form from the employees covered under the

Act and is the same is submitted to the ESI

Office

They didnt obtain any

declaration form from the

employees but they obtain only

Nomination form

5 Check the correctness of ESI Computation

with respect to the percentages and also wage

ceiling for coverage of employees. i.e. 1.75%

of gross wages in case of employee

contribution and 4.75% of gross wages in case

of employer contribution and gross Wage

ceiling for coverage of employees is Rs.15000

of gross salary

Yes We observed that the

calculations and maximum

ceiling of gross wages for

coverage are as per the Act.

6 Check the definition of salary for the purpose

of calculation of ESI as per the ESI Act (Grosssalary)

Gross salary

7 Check whether the ESI amounts are deposited

within the applicable due dates (i.e. 21st

of

next month and payment should be made

through Cheque only)? Because the deduction

is allowed to the deposits which are made

Yes


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with in the due date.

8 Is the employer maintaining prescribed

records/registers namely, register of

employees, the inspection book and the

accident book.

Yes Though inspection note book is

maintained no remarks are

quoted in the book

9 What are the steps taken by the employer in

case of death of employee?

In case of death of the employee,

this establishment pays Rs.1500

towards funeral expenses

10 Whether employer has paid any compensation

to the employee in case of accident suffered

by employee?

Whenever accident takes place,

employee is eligible to get the

treatment expenses and surgery,

etc.. at free of cost, only in ESI

Hospitals

11 When are the returns submitted by the

employer? Check whether they are submitted

within due dates? ( half yearly as April to Sept

and Oct to Mar, within 42 days from the end

of the half year period)

No Because of Online payments they

didnt have hard copies of the

returns.

12 Check the payment challans comparing with

salary registers and also check whether there

are any mathematical errors in it?

No mathematical errors were

found, amounts appeared in the

challans are matched with the

salary registers.


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3. Check list on Bonus


1 Check the applicability of Payment of

Bonus Act?

Yes

2 Check whether the eligibility of employees

(who had worked for more than 30

working days in that year and drawing

wages less than or equal to Rs.10000 per

month and bonus will be calculated on

Rs.3500) and list out the Employees who

are disqualified/ not eligible for Bonus.

Yes

3 Check whether any employee had been

paid less than minimum bonus (i.e. 8.33%

or Rs.100 w.e.h.) as fixed by the Payment

of bonus Act?

No

4 Check whether the salary amount taken

for calculation is as per the definition of

salary given in the Act or not?( i.e. Basic +

DA+ food allowance)

Yes Only Basic is taken as a form of

salary for calculating bonus

because D.A is not a part of their

salary


paid more than maximum bonus (i.e. 20%

of salary) as fixed by the Payment of

Bonus Act?

No

6 Check whether the bonus is paid within

the time prescribed in the Payment of

Bonus Act? (within 8 months from the

close of accounting year)

Yes As per this companys policy, last

date for payment of bonus is

September, i.e. within the period

of due date for filing the Income

tax returns.

7 Compare the employees list with the

attendance register

Yes

8 Check whether the company maintaining

applicable Registers and Records

Yes The records are presented before

the officer (Smart core

management services) and then

they declare the allocable surplus

ready for the distribution of bonus

and then depending on the


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allocable profit bonus is declared

either 8.33% or 20%

9 Check whether the employer had filed

annual returns or not?(i.e. within 30 days

after the expiry of time limit specified for

payment of bonus)

No

10 Check whether all the branches &

departments included for the purpose of

calculating bonus (As per the act

establishment includes all branches &

departments where ever situated for the

purpose of calculating bonus).

Yes

11 Are there any employees who have been

removed from the establishment due to

riotous behaviour? If yes, is he paidbonus? ( As per the act he shouldnt be

paid bonus)

No

12 Check whether in any accounting year the

employees have not been paid bonus. ( As

per the act an establishment can avoid

paying bonus to the employees if it has

already paid any pooja bonus or

customary bonus)

No


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4. Checklist on Gratuity


1 Check whether the Payment of Gratuity

Act is applicable or not?

Yes

2 Check the eligibility of employee, also

exemptions to whom that the eligibility

criteria is not applicable?(who rendered

service not less than 5 years)

Yes This establishment paid gratuity for

the employees who had been in

service for more than 5 years.

3 Check whether there is any employee

who had paid more than the maximum

limit (i.e. Rs.10lakhs) as prescribed in thePayment of Gratuity Act?

No

4 Check whether any employee received

any gratuity from the previous employer,

and also check whether the current

employer had considered this or not

Reply from HR Executive is that they

didnt ask any employee whether

received any gratuity from the

previous employer, as it is not

necessary for us

5 Check the calculation of Gratuity amount

whether it is calculated as per the Act or

not?(i.e. (Basic + DA) *15/26 *number of

years of service)

Yes Only basic (at the time of

resignation) is considered as Salary

for calculation of Gratuity

6 Check whether the applicable forms are

submitted within the time specified in

the Act or not?

7 Check whether gratuity is paid within the

time prescribed in the Act or not (30 days

from the date of it becomes payable), list

out the cases if not paid

8 Check whether the employees where incontinuos service for claiming gratuity.

(As per the act an employee must be in

service for not less than 240 days in an

accounting year)

9 Check whether the establishment has

taken insurance in respect of employers

Yes We observed that this establishment

had taken insurance from LIC with


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liability for payment of gratuity. (As per

the act an establishment has to

compulsorily prescribe an insurer for the

employers liability for payment of

gratuity).

respect to the gratuity payable to

the employees.


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5. Checklist on EDLI


1 Check the applicability of EDLI Scheme? Yes With effect from 01/06/2011


credited with the insurance benefit under

EDLI Scheme?

No

3 If yes, Check the computation of amount

of Insurance benefit and also check

whether he had fulfilled necessary

formalities? (i.e. Insurance benefit is equal

to the average balance to the credit of thedeceased employee in the Provident Fund

during the last 12 months, provided that

where such balance exceeds Rs.35000

then insurance cover would be equal to

Rs.35000 plus 25% of the amount in excess

of Rs.35000 subject to a maximum of

Rs.60000.)

NA

4 Check the contribution of employer? And

also Check the amount on which employer

contribution is calculated?

NA

5 Check whether the amount remitted to the

family of employer is within the maximum

limit of Rs.60000

NA


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6. Checklist on Mediclaim

S.No Particulars Yes/No/NA Remarks Documents verified

1 Check whether the

employees opt for this

Policy?

Yes We verified the

agreement copy

between the two

companies i.e. (Iifco

tokio

2 If yes what are the

conditions to be fulfilled by

the employees to get the

benefits of this Policy. And

also check what is the sumassured for the employees in

case of claim?

Employees who do not

have the benefit of ESI

can only be included in

this scheme

Sum assured is asfollows:

a) senior managers &

above : 400000

b) Rest of the employees

: 200000

3 Check whether there is any

limit in terms of contribution

towards this policy?

Yes Contributions depends

upon the benefits chosen

by the employee

4 Check the procedure to be

followed at the time of

reimbursement of the policy

amount?

The employees are given

smart cards & during the

time of necessity they

can avail the benefit by

using these cards

5 Check whether employer

maintains suitable record

regarding to the policy?

Yes

6 Check whether is there any

separate policies for senior

citizens, etc..?

No


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7. Checklist on GPA


1 Check the applicability of GPA Policy? Yes But applicable only for employees

who are on rolls

2 Check the Office working hours for the

employees?

Yes

3 Check the agreements between the

insurance companies and the client?

Yes

Agreement is between MAA TV &

Oriental insurance company

4 Check whether there are any conditions to

get the policy amount to employee/familymembers of the employee?

1)In case of death of the

employee the nominees shouldconsult the employer & he can

actually make an application for

the sum assured

Sum assured is as follows:

Manager & above : 15lakhs

Rest of the employees : 6lakhs

2)In case of disablement the

employee will be paid Rs.5000

every week

5 Check whether there are any modifications

in the present policy terms, if yes check

whether those changes are communicated

with the employee?

The present policy terms will be

revised from 24/08/2011

Changes that would effect the

policy are that the sum assured

for junior level employees will

increase from 6lakhs to 8lakhs


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8. Checklist on Payroll


1 Is the payroll system adequately

protected from any misuse/un

authorised access?

Yes With the help of thumbnail

machines and its direct accessibility

to the HR computers which are also

protected with Pass words. These

are the only controls for avoiding

misuse/unauthorised access.

Before introducing the thumbnail

machines they were using swipe

card machine.

2 Is there any mechanism set up to preventfictitious employees on the payroll

system?

Yes Swipe machine up to 23/5/2011and from 24/5/2011 thumb nail

machine

3 Are payroll salary rates correct in relation

to agreed pay scales/national rates, etc?

Yes

4 Check whether payroll payment

transactions (i.e. overtime, bonus, salary

increases, etc.) adequately authorized

(prior to data entry) and correctly

entered?

Yes Authorisation: Panel meeting

consisting of Chairman, HR

Managers, HODs consent and

finally BOD approval is required for

authorisation of salary increments

and bonus payments.

5 Check the internal controls levied by the

management on the payroll process

(including disbursement)?

Yes

6 Check whether calculations relating to

the statutory deductions are correct or

not?

Yes

7 Check whether the TDS deducted or not?

If applicable

Yes

8 Check whether that all the necessary

taxation and other deductions are

correctly accounted for and paid over to

the relevant authorities?

Yes

9 Check whether all holidays payments are Yes Mostly office boys/security work on


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valid as per the companys policy and

legislative requirements?

holidays and they are paid for those

days.

10 Are payroll runs adequately reconciled to

the accounting system and anomalies

promptly identified and resolved?

Yes

11 Check whether the payroll payments,

automated fund transfer, salary cheques

are adequately authorized or not?

Yes

12 Check whether there are any payments

(by mistake) made to the employees who

had left the organization?

No


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9. Checklist on Shops & Establishment Act


1 Check the applicability of Act Yes

2 Check whether Registration certificate

obtained within the time specified in the

Act (i.e. within 30 days from the

commencement of its works)? If applicable

Yes

3 Check whether the opening and closing

hours, intervals (and Holidays) for rest are

as per Act or not? (i.e. Subject to other

provisions of this Act, no employee in anyshop shall be required or allowed to work

therein for more than eight hours in any

day and forty eight hours in any week and

interval for rest of at least one hour)

Yes

4 Check the provisions relating to women

employees are followed or not? (i.e.

maternity leave, etc..)

Yes During maternity leave period the

women employees are eligible to

get an amount equal to 12 week

salary. This amount can be

claimed after joining back to the

organisation

5 Check the provisions relating to overtime

and the wages for overtime are followed

or not? If yes, examine whether those

excess hours are not more than 6 hours in

a week and the wages for the overtime

must be twice to the ordinary rate of

wages.

NA

6 Check whether any employee was paid

salary in advance and also examine the

instalments for repayment of the same?(i.e. examine whether the conditions

mentioned in the Act are fulfilled or not?

(i.e. advance salary does not more than

preceding 2 months salary and the

number of instalments must be within 12

months )

Yes We observed that this companys

policy is to allow the employees,

advance salary of amount equalto one month gross salary, and it

should be repaid within 5

instalments.

For claiming advance salary the

employee has to fulfil certain

formalities i.e. he has to file an

application form which has to be


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duly authorised by concerned

dept. head

7 Check whether there are any deductions

for absent or for damage of loss and there

are any fines applicable for the

employees?

In case an employee takes leaves

in addition to what he is allotted

then the organisation will deduct

salary for those extra leaves or

else the employees can

compensate them by working on

holidays

8 Check the terms relating to leaves/earned

leaves and examine whether those are as

per the provisions of the Act or not? (i.e.

every employee who has served with 240

days or more during a continuous period

of 12 months eligible for 15 days earnedleaves, 12 sick leaves, 12 casual leaves.

Privileged leaves 25 per annum

Out of these :

Casual leaves-10

Earned leaves-15

In addition to this there are 7 sick

leaves

9 Check the conditions for terminating the

employee from his service and the

payments of Service Compensation for

termination/resignation?

Service compensation for termination

amounting to 15days average wages for

each year of continuous service provided

employee has been in his employment

continuously for a period of not less thanone year. (service compensation is not

applicable where the employee is entitled

to gratuity)

Till now none of the employees

were terminated by the

organisation. It can terminate the

employee only when he is a

threat to the organisation.

10 Check the conditions for terminating the

service? (is there a valid reason for

terminating)

NA

11 Check whether there is any bond period, if

yes check whether any penalty is levied on

employees who break the bond period?

NA

12 Check whether there is any condition to

issue prior notice for leaving/terminating

the job?

Yes The employees have to give 30

days prior notice in case he is

leaving the organisation

13 Check whether the applicable records and

registers are maintained or not?

Yes


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10. Checklist on Car Policy

S.No. Particulars Yes/No/NA Remarks

1. Check whether the car policy is

applicable to all employees?

No This policy is applicable based on the

designation of the person. If

designation is Asst General

Manager and above. Effective date

of the policy is 15/10/2010.

2. Check whether the car policy amount

is the same for all the eligible levels of

officers

No Car policy amounts are changed

based on the designation of the

officers. i.e. refer Note 1 below

3. Check whether the car is allowed touse for personal purpose?

Yes Car is allowed to use for the purposeof the official duties.

4. Check whether there is any particular

procedure followed for

reimbursement of car maintenance

expenses?

Yes Conditions:

1. documentary proof i.e. bills

2. Time limit for submission of bills:

With in 2 weeks from the date of

incurring of expenses.

3. Maintenance expenses does not

include Driver salary, petrol

expenses.

5. Check on whose name car is

registered?

Car is purchased on lease basis from

sundaram finance i.e. leasing

company in the name of MAA TV.

These lease rentals are borne by the

company, employee need not to pay

even single rupee for using the car,

and he has to bear the driver &

Petrol expenses.

6. Check whether the car is insured or

not? If yes, check Who has to bear the

insurance charges?

Yes Leasing company has to bear the

insurance expenses


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Notes on car policy:

1.

2. On completion of 4 years of leasing tenure, employee has to purchase the car at the residual value,

i.e. 20% of the Acquisition of Cost as per the companys policy.

3. If employee has an option to purchase the car, if he can purchase then company would pay 7.5% of

the acquisition cost of the car as loyalty bonus.

4. If any employee who had opt this policy is resigned before completion of 4 years leased period then

he has to pay an amount i.e. equal to market value of the car at the time of resignation after deducting

the W.D.V. of the car on the date of resignation.

Designation Terms & Conditions

Acquisition Cost

of the Car

Annual maintenance

reimbursement limit

Assistant General Manager &

Deputy General Manager

Minimum one year

service

Rs.600000 Rs.15000

General Manager, Sr. General

Manager, Associate Vice President

NA Rs.900000 Rs.20000

Vice President NA Rs.1200000 Rs.25000