INTRODUCTION TO MULTIPURPURPOSE EMPANELMENT FORM

---------- Forwarded message ----------
From: PDC (ICAI) <pdc@icai.in>
Date: 2010/12/14
Subject: INTRODUCTION TO MULTIPURPURPOSE EMPANELMENT FORM
To: cvpawar@dataone.in

INTRODUCTION TO MULTIPURPURPOSE EMPANELMENT FORM

(including Bank Branch Auditors Empanelment)

 

Every year, Professional Development Committee of the Institute hosts the Multipurpose Empanelment Form (MEF) on www.meficai.org. This year also, MEF 2010-11 was hosted on May 1, 2010. As per the decision of the Council of the Institute taken at its 235th meeting, financial documents were also called from 10% applicants randomly selected by the computer.

 

As many enquiries were being received from members on various issues, the PDC felt it expedient to share some of the developments as well as relevant background details concerning the preparation of the Multipurpose Panel.

 

New Developments:

Recently, the Council at its 299th Meeting held in October, 2010 has decided to call for financial documents from all the applicants of MEF for the year 2011-12.

 

Status of the applicant:

For preparation of the said panel, the data of the applicant appearing in the Institutes record as on 1st January of the respective year is considered. For e.g. for the preparation of panel for the year 2011-12, data as per ICAIs record as on 1st January, 2011 will be considered.

 

The Council of the Institute at its 242nd meeting held in April, 2004 had decided that there shall be a cut off date for condonation of cases for empanelment purposes as on 1st January and the cases received beyond the cut off date will not be considered for condonation. In view of this, it has been decided interalia as under:

 

“For the purposes of Empanelment in the C&AG Panel prepared by office of C&AG and Bank Branch Auditors Panel prepared by ICAI (for which Constitution Certificates as on 1st January are issued every year); no condonation of delay in submission of Form no. 18 beyond 31st January preceding the financial year under audit (e.g. 31st January, 2011 for empanelment for the year 2011-12) will be done by the Institute.”

 

In case the intimation of change in the constitution is given to the regional office after 31st January, the effect of the said change would not be given for preparation of PSU auditors Panel and Bank Branch Auditors panel; eg: if a firm has added 1 more partner before 1st January and the firm wants to apply for MEF, it should ensure that it submits all requisite documents to the Regional Office before 31st January of the year and changes are effected in Institutes database.

 

Please note that MEF strictly picks data from Institutes database maintained by Regional Offices. PDC has no role in modifying the data of the applicant.

 

Decision taken by the Council at its 241st meeting regarding part-time practitioners for Bank Panel 2005-06

 

The Council at its 241st meeting decided that w.e.f. 1.4.2005, any member in part time practice (namely, holding Certificate of Practice and also engaging himself in any other business and/or occupation) will not be entitled to perform attest function.

 

In view of the above decision, members may note the following for the purpose of Bank Branch Auditors Empanelment for 2005-06 and onwards:-

 

Any firm which has Chartered Accountants whose main occupation is not practice, as partners, may apply for empanelment; however, no weightage will be given to the part-time partner(s).

 

Exclusivity of the proprietor or partners of the applicant firm

As per the eligibility norms provided by RBI for preparation of the said panel, the Chartered Accountants associated with the applicant firm should be “exclusively” associated with the firm. Please note that in case of members who are partners/proprietors in two or more firms, their credit would not be given to any of the firms. Furthermore, partner/proprietor of the firm also having their own sole practice would not be considered as exclusively associated with the firm.

 

There seems to be a misunderstanding among the members that credit of common partners is given to applicant firm if only one of the firms in which he is a partner/proprietor applies for the said panel. This is not the case. It does not matter, whether one firm applies or both, in no case credit of common partner would be given to any of the firms.

 

PN: If as on 1st January of the relative year, a member is appearing as associated with more than 1 firm, credit of such partner is not given in any condition to any of the firms in preparation of Bank Branch Auditors Panel.

 

Members may please note the application of the new empanelment norms as given in the examples below:
 

1. A & Co. is a partnership firm of 2 partners B & C. B has a proprietorship firm of his own, B & Co.  A & Co. and B & Co. both apply  B & Co. will be rejected and A & Co. will be considered as a firm with only one exclusively associated partner and therefore treated at par with a proprietary firm.

2. Only A & Co. applies  A & Co. will still be treated as proprietorship firm with one exclusively associated partner.

3. ABC is a partnership firm of 3 partners A, B & C, and all 3 have proprietorship firms A & Co, B & Co. and C & Co.  All applications (ABC, A & Co., B & Co., C & Co. or any combination thereof, or of the individual firms) will be rejected.

 

Implication of the abovesaid norm is that members (both partners and C.A. employees) who are not exclusively associated with the applicant firm will not be given any weightage in Bank Branch Auditors Panel e.g. if a partner P/C.A. employee E of firm F is also a partner/proprietor in any other firm and/or practicing in his individual name, or is employed elsewhere; then firm F will not get any credit for the partner P/C.A. employee E.

 

Further, in case, none of the partners are exclusively associated with the firm, (i.e. all partners are either practicing in their individual name/have a sole proprietary concern or are associated as partner in another firm/employed elsewhere also); then such firm will not be eligible for Bank Branch Auditors Panel altogether.

 

Furthermore, a member who is also a partner in any firm besides practicing in his individual name or sole proprietary concern, will not be entitled to apply in his individual name/sole proprietary concern also, e.g. the partner P of the firm F in the example given hereinbefore will not be eligible to apply in his individual name/sole proprietary concern and the firm F in which he is a partner will also not get any credit for Partner P.

 

A member having more than 1 proprietorship is advised to keep only one of the proprietorships before 1st Jan, 2011 to maintain his exclusivity.

 

Unique Code Number (UCN) - Significance and due care

UCN is a very important data which facilitates RBI in proper and correct recording of past Bank Audit experience of applicants. The Members/Firms MUST quote their proper unique code number (if allotted, AT ANY TIME in the past) in the MEF to facilitate this. The MEF may show UCN field as “Not allotted” though it may have been allotted in past as the applicant might not have applied in the last years empanelment. However, members must take utmost care to mention their UCN in Memorandum of Changes.

 

Professional Staff:

The term "professional staff" as used in clause (ii) of para 1 of Annexure I to RBI's letter No. DBS.ARS.No. 650/08.91.008/2003-04 dated 1st  March, 2004 containing the revised empanelment norms issued by the Reserve Bank of India (applicable from the year 2005-06 and hosted on the Institute's website) “also includes other audit staff having knowledge of book-keeping and accountancy and engaged in outdoor audit besides articled clerks and audit clerks."

 

Memorandum of Changes

In case applicant does not agree with the (static) data as appearing from the ICAI database in the online application form, the changes (as per the applicant) can be informed through MoC (Memorandum of Change).

 

Relaxation for - Chartered Accountants from North Eastern Region.

RBI has relaxed the eligibility norm in respect of the number of years of professional standing required for individual members/proprietary firms from the North-Eastern Region (viz. the states of Assam, Meghalaya, Arunachal Pradesh, Manipur, Mizoram, Nagaland, Sikkim and Tripura) by reducing the period from 3 years to 1 year from the year 2008-09 and onwards.

 

MEF Complaint Centre:

MEF was introduced to have a comprehensive data of Chartered Accountants/firms interested in empanelment of various authorities which call for panel from Institute. Every effort is made to facilitate Members to file MEF. One of such important step was introduction of Complaint Centre.

 

The MEF complaint centre was first time introduced in 2008. This complaint centre is dedicated to resolve the problems pertaining to MEF. It is a systematic and advanced version of grievance resolution.  In case, an applicant faces any problem in accessing, operating or submission of MEF, complaint may be lodged by accessing complaint-centre link which is made available on www.meficai.org.  Applicants can lodge their complaint by using either MEF No./ M. No/ FRN. On successful lodging of complaint, complaint number is informed through e-mail. All complaints lodged by the applicant are looked into by the Committee. The applicants can view the status of their complaints by using MEF No./Complaint No./MRN/FRN.

 

After submission of online MEF, the applicant is required to send declaration duly signed by all the continuing Partners/Proprietor. Members shall ensure that the declaration reaches the designated address as mentioned in the advisory of the form within stipulated time.  The declaration is to be signed by all the partners/proprietor of the applicant as on 1^st January of the relative year continuing with the applicant till the date of signing of declaration.  In case any partner resigns or retires from the firm after 1^st January, the weightage of such members is not given to the applicant.

 

Advisory of MEF is basically a guide to help members in filling MEF. In short, it gives “dos and donts” while filling MEF.

 

As the MEF Panel is used for submission of Panel to various authorities as per their respective requirements, the MEF may also include special sections for empanelment of CA firms to capture data as may be required by them. For e.g. next year there will be a separate section asking for additional data required by Commissioner of Cooperative Societies, Maharashtra State, for audit of Urban Cooperative Banks, Credit Cooperatives and other societies.

 

All members and firms are therefore requested to fill Multipurpose Empanelment Form to make it more broad based as the said panel may be used to provide list of Chartered Accountants/Firms to various authorities which request for the same as per their requirement.

 

Important References:

 

ьPlease visit http://www.rbi.org.in/Scripts/bs_viewcontent.aspx?Id=946 for RBI road map on Guidelines for Appointment of Statutory Auditors in Public Sector Banks.

 

ьPlease visit http://www.icai.org/post.html?post_id=725&c_id=91 for Implementation of revised empanelment norms for appointment of statutory auditors of public sector banks, select All India Financial Institutions and RBI.

 

ь Please visit http://www.icai.org/post.html?post_id=705&c_id=91 for application of Revised Empanelment Norms for Bank Branch Auditors Panel.

 

In case of Merger or Demerger

 

In case of any merger after 31st January, the firm which continues to be in existence will only be eligible to apply for MEF (with its constitution as on 1st January) likewise, in case of demerger after 31st January, the main firm (i.e. the merged entity) only will be eligible to apply however, only the partners since 1st January and continuing with the firm would be considered for determining eligibility of the firm in the panel.

 

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With thnaks & regards
 
Professional Development Committee
The Institute of Chartered Accountants of India,
'ICAI BHAWAN',
Post Box Number 7100,
Indraprastha Marg,
NEW DELHI - 110 002.
India
Telephone - Direct +91 11 30110411
Telephone - Board +91 11 39893989 Extn: 411
Fax: +91 (11) - 30110583
Website: www.icai.org