Respondents are required to complete the Financial Model Audit Review Letter (on Auditor letterhead) and include it in Folder E of its Proposal.
[Insert State Representative's name]
[Insert State Representative's address]
[insert date]
Dear [Sir / Madam],
[Insert Project title] - Financial Model Audit Review Letter
[Insert name of Respondent] confirms that an independent audit of the Financial Model has been completed in accordance with the terms of reference listed below:
1) confirm that the Financial Model has been developed in accordance with Proposal Requirements E2.1 (Appropriateness of Financial Assumptions and Financial Model);
2) determine whether the calculations in the Financial Model are in all material respects internally consistent and mathematically correct;
3) check formulae applied across all time periods are consistent;
4) check that the Financial Model allows changes and sensitivity analysis of assumptions and input data to correctly flow through to the results and outputs;
5) check that any macros in the Financial Model that govern calculations are correct and appropriate;
6) determine whether the assumptions and input data used in the Financial Model are consistent with the supporting Project Documents;
7) check that all assumptions and input data flow logically through the Financial Model;
8) check the calculations of any relevant ratios and financial covenants in the Financial Model where appropriate to ensure that the Financial Model correctly reflects the definitions contained in the various term sheets;
9) check that the Financial Model correctly incorporates the relevant structural features in the Equity and Financier Term Sheets such as reserve accounts, lock up provisions, default provisions and amortisation accurately reflects these;
10) determine whether the accounting assumptions, calculations and outputs (including financial statements) are in accordance with the accounting principles generally accepted in Australia; and
11) check that the instructions contained in the Financial Close Adjustment Protocol accurately reflects the procedures to solve the model for changes to reference rates.
A copy of the Model Audit Report has been attached to this letter [include attachment].