Request for EOI invited to select Independent Monitoring Agency in National Skill Development Fund

National Skill Development Fund (NSDF), the client, invites Expression of Interest (EOIs) for the selection of Independent Monitoring Agency (MA) to monitor the activities undertaken by NSDC.

Brief Scope of Work of Monitoring Agency

Development of Monitoring Framework
The MA would assist in the development of a suitable monitoring framework, concerning the activities of NSDC and its assisted projects, to ensure that the activities are aligned with the objectives of NSDF and are consistent with the provisions of the Investment Management Agreement (IMA) between NSDF and NSDC, the Trust Deed and RBI regulations on Non-Banking Financial Company (NBFC).
For this purpose, the MA will undertake the following activities:
1. Study of the existing policies of NSDC pertaining to:
  1. Selection of eligible projects under the scheme.
  2. Sanction of funding assistance/ investment and disbursement of funds thereof.
  3. Current organizational delegation structure in respect of sanction and disbursement.
  4. Existing mechanism for monitoring the end use of funding assistance/investments made by NSDC.
  5. Key indicators identified for assessment of the operating performance of the projects in terms of coverage and success rate etc.
  6. Mapping the flow of funds from NSDC vis-a-vis the budget/work plan estimates prepared in respect of assisted projects.
  7. The MA should help NSDC in designing of NPA & write-off policy and should help in the development of suitable mechanisms for the identification of NPA accounts. The trigger should be set for the identification of NPA accounts and a suitable redressal/corrective mechanism should be suggested by the MA before the account is categorized as/a stressed asset.
  8. The firm is required to provide an independent opinion on stressed assets by using different analytical tools, and verification of audited financial statements, and Bank Statements. It should also obtain a comfort letter or should check for the conduct of the account from the respective bank of the Training Partner.
  9. The firm is required to analyze the fund’s requirement by NSDC based on historic data and the same should be used for making future predictions. Various check parameters like DBT Transfer, details of Committed liability, and past trends of the release of funds under the scheme should also be analyzed for further release of funds.
2. Review of risk management and mitigation mechanism adopted by NSDC to safeguard the interest of the Fund/Trust in respect of the assistance to eligible units and achievement of the objectives set under the Trust Agreement/IMA.
3. Review of the existing financial reporting framework followed by NSDC concerning income recognition and asset classification and adherence to best practices, such as prudential guidelines of RBI for NBFCs/ similar bodies. For this purpose, an inspection of books of accounts, records, registers, and statutory registers of NSDC may be carried out on a sample basis. Inspect book of accounts, records, and registers of the NSDC to the extent necessary for discharging its obligation.
4. Monitor the end-use of funds loaned/ investments out by NSDC to various skill training and development programs through on-site and off-site inspections of records on a random sample basis.
5. MA to take appropriate measure for protecting the interest of the Government (MSDE), as a funding source for NSDC and inform the Board of Trustees (NSDF) as soon as any breach of the trust deed or law comes to its notice.
6. The MA is also expected to ensure that the funds disbursed to Sector Skill Councils (SSCs)from NSDC, and the funds disbursed from SSCs to its creditors are as per the extant provisions/guidelines of the MSDE.
7. For effective utilization of Grant by SSCs, the MA should visit the office of the respective SSC.It should also review the utilization of Grant advanced by NSDC. Grants already disbursed should be cross-verified with audited accounts, bank statements, vouchers, and invoices.UCs should be supported by bank statements and invoices.
8. The consultant should recommend and provide a sustainable solution to NSDC for alignment of the existing reporting framework with the proposed timelines (as per the RBI circular) to ensure effective implementation of the norms in its existing systems and procedures in due course.
Submission of Monitoring Framework Report.
1. Based on the above, the MA shall submit a Monitoring Framework Report, within 45 days of the award of a contract by MSDE, incorporating its suggestions and recommendations on the various aspects to be covered to monitor the activities undertaken by NSDC.
2. Central Repository of Information on Large Credits (CRILC) check should be conducted for the parties having exposure with NSDC at periodic inspections. Regular CIBIL should be checked for all guarantors.
Submission of Periodic Monitoring Report
The MA would, thereafter, submit quarterly monitoring reports, covering inter- alia the following aspects:
1. The flow of funds from NSDC and corresponding utilization of the same for eligible projects.
2. Overall performance of projects based on Key Performance Indicators/Matrix as envisaged.
3. Adherence with the set objectives of the Fund/Trust in respect of the assistance extended during the reporting period and deviations, if any. For this purpose, the MA may rely on information obtained from the assisted units and/ or onsite/ off-site inspection of records on a random sample basis.
4. Review of periodic progress reports obtained from NSDC.
5. Recommending suggestions to improve the funding processes of NSDC as per the best practices followed by the financial services industry.
6. Monitoring of time-bound implementation of suggestions made by MA.
7. Review of NPA cases on a sample basis (maximum of 2 per quarter) as per suggestions made by NSDF
8. A presentation on the Periodic Monitoring Report should be given to the Board.
9. A summary of the action taken at the last Board meeting and the last Periodic monitoring report must be included in the presentation to the Board.