TERMS OF REFERENCE FOR AN EXTERNAL AUDIT-AFGM 17 views0 applications

These Terms of Reference are intended to define the scope, objectives, methodology of external audits, along with reporting requirements.

Special attention should be given to the independence of the audit team. The contracting partner will determine, the duration of the audit and the starting date.

1.0 Scope

The audit should cover accounting and financial documents of the MoFA Finland in relation with the following documents:

· Funds release order and Budget

· Final Report and Financial Report

· Subcontractors details – when relevant

The auditors will be given full access to the member organisations records, which are relevant to this audit. All information reviewed is to be treated in confidence.

2.0 Objectives

The main objective of the audit is to control the maximum number of justifying proofs supporting the financial report submitted to MoFA Finland by the member organisation or its subcontractor(s).

The audit must ascertain whether:

· Expenses are adequately supported by original proofs and have been properly accounted for

· Expenses have been incurred during the project period

· Expenses charged to the project have been duly authorised

3.0 Methodology

· The audit methodology and the audit techniques to be used are those which accord with international auditing standards by inspection of original supporting documentation.

4.0 Reporting

The auditors shall provide the Member Organisation with a draft report of their findings including an opinion in the attached format, a management summary and a set of conclusions and recommendations, not later than one month after the end of their field work.

These findings are to be reviewed by the two parties before the final report is established and communicated to them. This final report must achieve the objectives set out in these Terms of Reference. For each recommendation made by the auditor,

the final report should include the comments made by Member Organisation during the debriefing at their offices in the recipient country.

In the event that expenditures are found that are not justified, the auditors must accompany their audit opinion with a declaration specifying the reasons and amounts.

Please refer to Annex II and III for an indicative format of the opinion and audit report respectively.

The auditors shall also provide the Member Organisation, exclusively, with a management letter, addressing the following issues:

· Irregularities or fraud identified

· Aspects relating to a lack of collaboration on the part of the Member Organisation

· Problems relevant to the financial monitoring of projects

· Other aspects considered worthy of the MoFA Finland attention

· Reports are to be written in English.

5.0 Evaluation Criteria

5.1 Mandatory Requirements

a. Provide a certified copy of a certificate of business registration, Certificate of incorporation, business license or similar document

b. Provide a certified copy of tax registration, tax clearance certificates or similar documents

c. Provide information on ownership structure (Name of directors of the company / Owner)

d. Provide references from previous clients for similar works.

Note – Applicant who will not meet the above mandatory requirement will not be considered for Technical Evaluation.

5.2 Technical Evaluation

a. Previous experience in fragile context

b. Experience of the lead and technical staff-Attach CVs

c. Experience with similar assignments with INGOs/ other organizations-Provide prove of engagement,LPO or contract

d. Quality of the technical proposal

e. Assignment Timelines

5.3 Financial Evaluation

The Financial Proposal should include the following

a. Assignment cost in USD

b. Payment terms

c. Credit Period

6 Application Process

All interested bidders/consultants are requested to submit their Technical Proposals and Financial Proposals in Separate documents as attachments (Bidders who will combine both technical and financial proposals shall be disqualified) via email [email protected] on or before 10^th December 2021*. Bids received after deadline shall not be considered.*

Email title should be;- EXTERNAL AUDIT-AFGM

Your financial proposal should have your professional fee, payment terms and Credit period. Financial proposal should not be part of the technical proposal, it should be a separate document.

In case of any clarifications write to [email protected]

ANNEX I – EXPENDITURE ITEMS TO BE AUDITED

(to be adapted in accordance with audit needs identified)

Expenditures

Print-out from system

Supporting original

documentation

· Costs of Relief Goods

· Details of costs as per the accounting system

· Documentation supporting tendering process if relevant

· Invoices / Payments

· Handover protocols

· Costs of Relief Measures

· Details of costs as per the accounting system

· Documentation supporting tendering process if relevant

· Invoices / Payments

· Handover protocols

· Costs of Personnel

· Payroll – details of personnel costs in the accounting system

· Contracts

· Records that

document the work on the project

· Costs of Transport & Storage

· Details of costs as per the accounting system

· Documentation supporting tendering process if relevant

· Invoices / Payments

· Other costs (financial service costs, office costs, costs of consumables and

supplies, evaluations etc.)

· Details of costs as per the accounting system

· Documentation supporting tendering process if relevant

· Invoices / Payments

· Reports if relevant

· Travel and subsistence expenses for staff involved in the operation

· Details of costs as per the accounting system

· Transport tickets

· Lease contract or other documentation supporting

accommodation costs

· Cost of equipment

· Asset records

· Inventories

· Reconciliation between asset records and inventories

· Documentation supporting tendering process if relevant

· Invoices / Payments

· Calculations of depreciation

Other audit work that may be undertaken, as necessary:

· Review of reconciliation between accounting records and bank statements for all bank accounts

· Review of cash, inventory

ANNEX II – FORMAT OF THE AUDITORS OPINION

The auditors’ opinion should comply with the following format:

[Audit Company name] has carried out an audit of the funds used in the implementation of [MoFA Finland project no.] during the period [DATE] to [DATE].

In the opinion of the auditors the Member Organisation can/can not justify certain of/all of the expenditures it has declared to MoFA Finland, these conform/do not conform to the budgets presented and have been/have not been incurred within the relevant contractual time periods [DATE] to [DATE].

The auditors have found reported extra costs/ financial expenses for $ … that are not eligible.

In our opinion, with the exception of the matters referred to above, MoFA Finland funds covered by this audit have been/have not been used in accordance with the legal/contractual basis.

This opinion is for the use of MoFA Finland only and should not be disclosed to third parties without written permission.

ANNEX III – PRESENTATION OF THE AUDIT RESULTS

MoFA Finland funds release order, budget and final financial report

Audit opinion and statement

Analysis of the eligible/ineligible cost: showing per budget chapter;

· Amount budgeted

· Amount claimed

· Amount tested in %

· Proposed adjustments

· Eligible or ineligible costs

Summary of audit differences: showing in each case:

· Nature of the difference detected

· Amount involved

· Corrective action proposed

· Comments of the Member Organisation

· Working paper reference

Summary of the Member Organisations control/system weaknesses showing in each case:

· Explanation of the weakness

· Implication

· Recommendation

· Comments of the Member Organisation

· Working paper reference