EXTERNAL ANNUAL EXPENDITURE VERIFICATION TERMS OF REFERENCE SOS Children’s Villages ADA Project 2020-2021 Contract Number: Contract Number: 2826-02/20

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Organization: SOS Children's Villages International
Closing date: 19 Feb 2021

1. INTRODUCTION

SOS-Kinderdorf requests the Audit Company to conduct a Special Purpose Expenditure Verification concerning the above-mentioned project. The ADA Project 2020-2021 with a title Resilience Building for refugees, IDPs[1] and host communities in Ethiopia and Uganda (ReBuild) consists of four result areas and is executed by SOS-Kinderdorf (Austria), Stafflerstraße 10a, 6020 Innsbruck, Austria and co-funded by the Austrian Development Agency (ADA), Zelinkagasse 2, 1010 Vienna, Austria and SOS-Kinderdorf Austria. The programme consists of 3 components, which are implemented in (1) Ethiopia by SOS CV Ethiopia and (2) Uganda by SOS CV Uganda with a (3) Umbrella capacity building and monitoring component managed jointly by the regional Office SOS CV IOR ESAF (Nairobi, Kenya) and SOS-Kinderdorf (Austria).

The four result areas are:

· Result 1: Improved livelihood with special focus on environmentally friendly IGAs

· Result 2: Improved awareness and responsive capacity on Gender equality

· Result 3: Improved awareness and responsive capacity on child protection

· Result 4: Increased capacity in LRRD programming of SOS Members in the ESAF region and relevant stakeholders in Ethiopia and Uganda

As a base for implementation, a Partnership Agreement between SOS-Kinderdorf Austria and the implementing partners was signed, after The Framework contract between SOS-Kinderdorf Austria and the Austrian Development Agency (ADA) was signed.

2. REQUIRED QUALIFICATION & EXPERTISE BY AUDITOR

a. The Auditor is a member of a national accounting or Auditing body or institution which in turn is member of the International Federation of Accountants (IFAC) or commits himself/herself to undertake this Engagement in accordance with the IFAC standards and ethics.

b. The Auditor operates in any of these countries; Kenya, Uganda & Ethiopia and has branches or affiliates in both of the other countries.

c. The Auditor will employ staff with appropriate professional qualifications and suitable experience with IFAC standards and with experience in verifying financial information of entities comparable in size and complexity to the Grant Recipient.

d. The Auditor has sufficient knowledge of relevant laws, regulations and rules in the country concerned. This includes but is not limited to taxation, social security and labour regulations, accounting and reporting.

e. The Auditor will provide the Contracting Authority with CVs of the staff/experts involved in the expenditure verification. The CVs will include appropriate details for the purpose of the evaluation of the offer on the relevant specific experience for this expenditure verification and the qualifying work carried out in the past.

f. The Auditor shall undertake this Engagement in accordance with:

o the International Standard on Related Services (‘ISRS’) 4400 Engagements to perform Agreed-upon Procedures regarding Financial Information as promulgated by the IFAC;

o the IFAC Code of Ethics for Professional Accountants (developed and issued by IFAC's International Ethics Standards Board for Accountants (IESBA), which establishes fundamental ethical principles for Auditors regarding integrity, objectivity, independence, professional competence and due care, confidentiality, professional behaviour and technical standards. Although ISRS 4400 provides that independence is not a requirement for Agreed-upon procedures engagements, the Contracting Authority requires that the Auditor is independent from the Beneficiary and complies with the independence requirements of the IFAC Code of Ethics for Professional Accountants.

o the guidelines of the Austrian Development Agency (ADA): Guidelines for expenditure verification. Non compliance with those guidelines will result in termination of contract and suspension of any payment from the contractor.

g. The Audit company must be changed at least after 5 years.

3. OBJECTIVES OF THE EXPENDITURE VERIFICATION

  1. The Expenditure Verification needs to check the compliance with the terms of the ADA ReBuild Contract 2826-02/2020, and the General Terms and conditions of the Austrian Development Agency´s Grant Agreement.
  2. The Expenditure Verification needs to verify sound financial management and accuracy of book keeping on the basis of original project vouchers and the projects time frame.
  3. The Expenditure Verification needs to check that the expenses are recorded in the NGO’s accounts and are backed by originals of supporting evidence.
  4. The Expenditure Verification needs to verify that the expenditures are assigned to the budget items, the compliance of expenses with budget items and the plausibility of the expenditures.
  5. The Expenditure Verification needs to show both, the consumption of the year under examination and the consumption against the total ADA Euro project budget (both in figures and %).
  6. The Expenditure Verification needs to verify that the expenditures are covered by the respective revenues and there is no duplicate financing by external funding bodies.
  7. The Expenditure Verification needs to check if financial transfers (bank and cash) are understandable and in line with reported expenditures.
  8. The Expenditure Verification needs to verify that the financial statements provide a true picture of the project’s finances.

i. The expenditure verification needs to confirm earmarked funds received from SOS - Kinderdorf Austria (be it directly or via CVI) taking into account exchange gains and losses from the local currency against the EUR.

  1. The Expenditure Verification needs to check the regularly updated list of all goods procured with the grant funds whose procurement value exceeds EUR 400 each. The inventory list has to be included into the Expenditure Verification report.

4. ISSUES TO BE STUDIED

The Expenditure Verification shall be conducted for the 1st year of the ReBuild II project (ADA Project 2020-2021), covering all the respective results mentioned under section 1 above.**

5. WORK PLAN

a) A contract between SOS Austria and the external Audit company has to be signed, based on the ToR provided.

b) The Expenditure Verification shall be carried out in the implementing partners’ offices (Finance Department) and comprises the investigation of (a) bank statements, (b) accounts and (c) invoices.

The Expenditure Verification must be carried out between February 20th and March 10th, 2021 with the support of the implementing organization who provides the proper and timely project accounts and documentation. The draft Expenditure Verification shall be submitted via email for feedback latest by March 12th, 2021.

c) Comments have to be included and the Expenditure Verification report shall be finalised after agreement on the final version by March 25th , 2021.

d) The Auditor will submit a consolidated report that includes all three components (Ethiopia, Uganda and IOR ESAF) in five hard copies and a soft copy to the respective National Office / IOR ESAF Nairobi/Addis Ababa / SOS Austria at latest on March 25th, 2021.

6. REPORTING REQUIREMENTS

The Expenditure Verification report shall be written in English, and has to include:

a) General statement / management letter and

b) Finance Expenditure Verification in two separate documents.

It has to include statements by the Expenditure Auditor on:

  1. Project information

· Auditor's name, position, address, phone, fax and e-mail

· Date, Auditor's signature and authorization

· Project number (contract number) and name

· Implementing organisation

· Reporting period

· Reporting currency

· Actual income for the year 2020

· Actual expenditure for the year 2020

· A detailed financial report on which the Expenditure Verification is based

  1. Introduction

· Background

· Objectives of the Expenditure Verification

· Scope of the Expenditure Verification

· Methodology of the Expenditure Verification

  1. Comments on the Project Financial Statement

· Actual project income versus actual expenditures 2020 in both local currency and EURO

· Yearly and total budget consumption of the ADA Euro budget in total figures and %

· Exchange rates to the EURO used in the financial project report

· Comments on not-accepted vouchers, if any

· Closing balance (including cash, bank and other assets, e.g. advance payments and outstanding checks)

  1. Comments on Internal Controls

· Is the Financial Project Report in accordance with bookkeeping?

· Do received funds match the bookkeeping?

· Does the bookkeeping match the vouchers?

· Are there proper vouchers for all transactions?

· Does the bookkeeping match the Official Bank Account Statements and Cash Book?

  1. Comments on Compliance

· Do the expenses comply with the terms of the ADA project contract and the General Terms and Conditions of the Austrian Development Agency?

7. MANDATE

The implementing organization will provide the expert Auditor with the following material and documents:

· Partnership Agreement between SOS-Kinderdorf Austria and the implementing organizations

· The ADA Project contract 2826-02/2020 including the Budget, signed between the Austrian Development Agency and SOS-Kinderdorf (Austria)

· The General Terms and Conditions of Contract to the Austrian Development Agency

· Final financial project reports (including financial statements, original vouchers and list of booked expenditures)

[1] IDPs: Internally Displaced Peoples

How to apply:

All proposals should be sent via email by COB 19th February 2021 to;

Stephen.Muthui@sos-kd.org



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