Page 21 - Souvenir - v4 (2)

Audit Approach:
Following approach can be helpful in obtaining insightful value additions to the business:
a. Review of Standard Operating Process (SOPs) for design and implementation gaps.
b. Delegation of Authorities (DOA) for internal controls.
c. Review and monitoring.
d. Insightful value adds.
e. Data analytics of relevant and related data.

Major areas of audit:
A) Operations:
a. Plant capacity utilization (Plant Load Factor), plant efficiency & auxiliary power consumption:
i. Reasons for lower PLF may be due to non-availability of fuel, forced shutdown, non-
availability of maintenance spares etc., and actions taken for improvement.
ii. Station heat rate (heat required to generate per unit of electrical energy) – Higher station
heat rate suggests inefficient utilization of heat.
iii. Auxiliary power consumption: Electricity used for ‘Balance of Plant’, any excess / outliers in
consumption pattern to be reviewed

b. Coal Mill Operations:
i. Fineness of coal (mesh Test)
ii. Residuals in grinding (quantity of foreign particles)
iii. Electricity consumption
iv. Wear and tear of grinding units
v. Ash content

c. Demineralization (DM) Plant:
i. Parameters set for clean water
ii. Materials and chemicals used for various processes (viz. Alum, lime, bleaching powder etc.)

d. Boilers:
i. Forced outage – reasons and root cause analysis for repetitive failures.
ii. Mean time between failures (MTBF) analysis and actions taken by operations team.
iii. Erosion of boilers tubes (BT) due to abrasion resulting out of higher coal percentage or
improper water quality etc.

B) Material Receipt and Storage:
a. Coal
i. Quantity & quality (calorific value) of coal received in line with contract.
ii. Weight / quantity of foreign material (stone/shells etc.) received with coal.
iii. Optimum blending of imported/indigenous coal for obtaining desired CV.
iv. Freight cost (sea & rail) transportation costs (trucks) internal movement cost (dumpers/JCBs)
& transit loss.
v. Detention / demurrage charges for ship/rakes/trucks etc.
b. Furnace Oil (FO) / Light Diesel Oil (LDO) , High Speed Diesel (HSD)
i. Correct quantity/ quality (temperature, density) received in line with invoice.
ii. Transit loss
iii. Transportation cost.

Apart from the above areas, regular audit of central functions like Procurement, Inventory, Treasury, IT, Shared
Services, Sales etc. are similar to other businesses.

I resonate with the following lines of Isaac Newton for the hitherto unchartered areas of audit:

“I do not know what I would appear to the world, but to myself, I seem to have been only like a boy playing on the
sea shore and diverting myself in finding pebbles while the great ocean lay before me unexplored”.
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