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Terms of reference for Annual Audit of Project/programme support
Project Name: WWF Finland partnership programme: Thriving environment – wellbeing of people
Introduction
World Wide Fund for Nature (WWF) is one of the leading International Organizations working on environment
in the world. In Greater Mekong sub-region, WWF has its offices and field activities in Cambodia, Laos,
Myanmar, Thailand and Vietnam under a program named WWF-Greater Mekong (WWF-GM).
I. Objectives and scope of the audit
Auditor is going to conduct the annual audit report of the Development Co-operation Project WWF Finland
partnership programme: Thriving environment – wellbeing of people. According to the Ministry for Foreign
Affairs of Finland's general conditions regarding support to non-governmental organizations and
municipalities, the receiving organization must observe principles related to good governance and anti-
corruption activities. State support shall be used only to cover expenses considered necessary and reasonable
in carrying out the project activities. The support-receiving organization shall in its accounting follow the
generally accepted national accounting principles (GAAP). The audit should be carried out in accordance with
the International Standards on Related Services 4400 applicable to agreed-upon procedures engagements
taking into account the conditions set out in the discretionary government transfer decision and in the
additional conditions for programme/project support and relevant national legislation and standards.
The nature of a Development Co-operation Programme/Project is as follows:
• A project is not a legal entity but an accounting subject
• It can include transactions in more than one legal entity (e.g. Partner or Subsidiary)
• It does not prepare statutory Financial Statements
• The statements under audit are the Financial Programme/Project Report and the List of Fixed Assets
• Fixed Assets are not capitalized but recorded as cost when purchased
• The Materiality Level in each audit finding is the equivalent of 200 Euros or 0,15 % of total reported
expenses, if it is higher than 200 Euros.
II. The Reporting
Templates of Engagement Letter and Auditor’s Report are attached to this Audit Instructions. We ask you to
further send the Auditor's Report to the co-operation partner in Finland by email or by regular mail. The
Agreed-upon Procedures are listed in the template of the Auditor’s Report. The report has to be in English (or
in another language exceptionally agreed with the Finnish partner organization) and include the findings of all
2
of the agreed-upon procedures. ISRS 4400 report is not meant to be a standard report so each auditor should
in any case adjust the report to reflect the procedures carried out and the observations made during the
procedures.
III. Project information for auditing
1. Project Name
WWF Finland partnership programme: Thriving environment – wellbeing of people
2. Project Donor
Primary Donor: Ministry for Foreign Affairs of Finland (MFA) Network Donor: WWF Finland Primary Donor Funding Source Agreement Number: 89892264
3. Project Location
Vietnam, Laos, and Myanmar
4. Project Duration
01.03.2018 – 31.12.2021
5. Total expenditure
Country TOTAL (EUR) CY 2018 CY 2019 CY 2020 CY 2021
Regional 72,287 17,287 15,000 20,000 20,000
Laos 242,713 72,713 50,000 70,000 50,000
Myanmar 175,000 35,000 60,000 80,000
Total 490,000 90,000 100,000 150,000 150,000
6. Expected time for receiving audit proposal
15 December 2018 COB
7. Expected time needed for the audit (included audit field work)
Late January or early February 2019
8. Expected time to receive audit report
First draft: 01st Mar Final draft: 12th Mar Final report: No later than 17th March
9. Total Audit for” WWF Finland partnership programme: Thriving environment – wellbeing of people” project in Regional, Laos and Myanmar
4 times, annual audit for each Calendar Year (2018-03-01 to 2018-12-31, 2019-01-01 to 2019-12-31, 2020-01-01 to 2020-12-31, 2021-01-01 to 2021-12-31)
10. Audit Deliverables
Independent Auditor´s Report (audit certificate) Engagement Letter Templates of Engagement Letter and Auditor’s Report are attached to this Audit Instructions
3
All audit deliverables shall be issued in physical copies and digital copies. The digital copies must be sent to WWF Finland by Audit firm.
11. Supporting documents are available at
WWF-Laos: P.O. Box. 7871 House No.39, Unit 05, Saylom village, Chanthabouly district, Vietiane, Lao PDR; Tel: +856 21216 080; Fax: +856 21251 883
WWF – Greater Mekong: Number 6, Lane 18 Nguyen Co Thach Street, Nam Tu Liem District, Ha Noi, Vietnam Tel: +84 24 37193049; Fax: +84 24 37193049
WWF – Myanmar: 15/C Than Taman Rd, Yangon 11191, Myanmar (Burma)
IV. Audit proposal Guideline
Language of the Proposal: The Proposals prepared by the bidders and all correspondence and documents
relating to the Proposal exchanged by the bidders and WWF-GM shall be written in the English language. Any
printed literature furnished by the bidders may be written in another language so long as accompanied by an
English translation of its pertinent passages in which case, for purposes of interpretation of the Proposal, the
English translation shall govern.
Proposal Currencies: All prices shall be quoted in Vietnam dongs.
Period of Validity of Proposals: Proposals shall remain valid for 60 days after the date of Proposal submission
indicated in the table above.
Submission Deadline: 15 Dec 2018
Proposal: The proposal to be submitted shall include but not limited to the below information:
A - TECHNICAL PROPOSAL
- The audit firm is familiar with the International Standards on Related Services 4400 applicable to agreed-upon procedures engagements taking into account the conditions set out in the discretionary government transfer decision and in the additional conditions for programme/project support and relevant national legislation and standards.
- Experience in auditing ODA projects/Public funds
- Understanding of the audit requirements
- Understanding the deliverable of the requirements
- Approach and methodology to be used
- Initiatives (if any) for improving audit implementation plan
- Implementation plan (starting time and total time needed)
- Human resources arrangement: Team leader should be qualified independent auditors.
B - FINANCIAL PROPOSAL
4
Financial proposal are prepared based on the technical proposal in accordance with the requirements and
provisions in the request for proposal, including summary of cost and out of pocket expenses.
Submission of Proposals
The proposals shall be submitted in sealed envelope, containing the Technical Proposal(s) and the Financial
Proposal(s). The outer envelope shall be clearly marked “Proposal for Audit of the WWF Finland partnership
programme: Thriving environment – wellbeing of people” in Vietnam, Cambodia, Laos, Thailand and
Myanmar - DO NOT OPEN BEFORE SUBMISSION DEADLINE”. The sealed envelope shall be addressed to
WWF-Greater Mekong at the following address: Number 6th, Lane 18 Nguyen Co Thach Street, Nam Tu Liem
District, Ha Noi
Alternatively, bidders are allowed to submit their proposal by email. Bidders who intend to submit electronic
proposals must follow the following submission instructions:
- Bidders can submit a proposal by email. The proposal shall be separated in two files: one for technical proposal and one for financial proposal.
- The file shall be in the form of MS word or MS excel (MS Office 2007 at least) or PDF version 7.
- Please send the electronic proposal to [email protected]
- Please be aware that bids or proposals emailed to WWF-GM will be rejected if they are received after the deadline for bid submission. As an email may take some time to arrive after it is sent, especially if it contains a lot of information, we advise all bidders to send email submissions well before the deadline.
- Maximum size for electronic submission: The maximum size per email that WWF-GM can receive is 8MB. Bidders may need to split proposals into parts to fit this limit.
Please note that the proposal must be arrive in the aforementioned mailbox before the submission deadline
Criteria for Selection:
a) Evaluation of Technical Proposal: The evaluation panel will fully evaluate the Technical Proposals. The panel will determine which of the
Technical Proposals pass the minimum agreed technical score specified below.
After the evaluation of Technical Proposals has been completed, WWF-GM will notify those Consultants
whose proposals did not pass the minimum technical score or were considered to be non-responsive to
the TOR.
b) Evaluation of Financial Proposal: The financial evaluation shall be based on the lowest price of those bidding firms which submitted
responsive Technical Proposals. The formula for determining the financial scores is the following:
Sf = 100 x Fm / F, in which Sf is the financial score, Fm is the lowest price and F the price of the proposal
under consideration.
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c) Final evaluation and negotiations: The final ranking of the proposals will be based on the quality of technical proposals and lowest cost. The
total score will be calculated as the weighted sum of the technical and financial scores, with the weights
given to the technical and financial scores being:
70/30 where the technical proposal = 70 and the financial proposal = 30.
With regard to contract negotiations WWF-GM reserves the right to invite the next-ranked firm to
negotiate, if negotiations with the first-ranked firm do not result in a contract.
Bidders who pass the minimum score, but are unsuccessful based on the calculation of the technical and
financial scores, will be notified after the contract with the winner has become effective.
Technical Evaluation Criteria:
Criteria Score
Technical 100
The auditor must be a chartered or registered public accountant. 15
Experience in auditing SIDA funded project 15
Experience in auditing ODA projects/public funds 10
Understanding of the audit requirements 10
Understanding the deliverable of the requirements 10
Approach and Methodology to be used 10
Implementation plan (starting time and total time needed) 10
HR arrangement; Team leader and team member hold CPA or ACCA, CFA or MBA qualification experience with audit of ODA funded projects 15
Initiatives (if any) for improving audit implementation plan 5
Note: The acceptable threshold for technical proposals is set at a minimum score of 70 points out of 100
points. Technical proposals which do not reach this minimum score will not be considered for financial
evaluation.
Attachments:
1. Auditor’s report
2. Engagement Letter
1 (7)
[Päiväys]
Auditor’s Report on Agreed-upon Procedures
[To Recipient organization of the grant/local partner]
We have performed the procedures agreed with you and enumerated below, relat-
ing to the annual report on the [name of the programme/project, discretionary gov-
ernment transfer decision number]. The [programme/project] was implemented by
[the Finnish partner organization]. The annual report, totaling [total costs] [currency]
for the period of [dd.mm.20yy-dd.mm.20yy], was signed by [the contact person of
recipient organization of the grant] on [date].
Our engagement was undertaken in accordance with the International Standard on
Related Services 4400 applicable to agreed-upon procedures engagements taking
into account the conditions set out in the discretionary government transfer decision
for programme/project support. The following procedures were performed solely to
assist [the Finnish partner organization] and Ministry for Foreign Affairs of Finland in
evaluating whether the annual report has been drawn up, and the funds have been
used for intended purposes, in accordance with general conditions for the use of
discretionary government transfers and additional conditions for [programme/project
support].
1) We obtained a mutually signed valid agreement of cooperation with [the Finn-
ish partner organization] and [the local partner organization] in order to find out
whether
the parties have a valid agreement of cooperation,
the argreement of cooperation has been adhered to and
the financial programme/project report correspond with the agreement
of cooperation.
Additionally, we obtained the instructions issued by [the Finnish partner organ-
ization] including the reporting and procurement instructions and interviewed
[name and position] whether the instructions have been adhered to.
2) We obtained [the local partner organization’s] project accounting documents, a
description of how the project accounting is arranged and interviewed [name
and position] in order to find out
does the [the local partner organization] have an adequate double-
entry bookkeeping system in place, including journal and general
ledger, and
what bookkeeping software is used.
3) We obtained a documentation on working time recording and interviewed
[name and position] in order to find out how the employee’s working time re-
cording is arranged.
2 (7)
4) We obtained the project’s budget and activity plan approved by [the Finnish
partner organization] and performed the following
compared the actual figures to the budgeted figures, and
checked whether the annual report includes explanations of budgetary
deviations over 15 %.
5) We reconciled the financial figures presented in the financial section of the an-
nual report with the project accounting in order to find out does the annual fi-
nancial figures in the annual report match up with the bookkeeping. The recon-
ciliation included matching
the opening balance of funds between the bookkeeping and the audi-
tor’s report of the previous year,
received funds between the bookkeeping and the annual report,
incurred costs between the bookkeeping and the annual report and
received but unused funds between liabilities in bookkeeping and end-
ing balance of the annual report.
Additionally, we reconciled the official bank account statements and cash
books relating to the [programme/project] with the bookkeeping as of [date /
end of reporting period] and calculated [the local partner organization’s] cash
and reconciled the amount with the bookkeeping as of [the date of performing
the agreed-upon procedures].
6) When the Finnish partner organization is a special foundation and the local
partner organization has locally acquired self-financing, we ensured that the
self-financing in the annual report is based on bookkeeping or adequate speci-
fications.
7) With regard to the information in the cost statement, the following procedures
were carried out. The procedures covered at least 30 % of the wages and sala-
ries reported for the project and at least 15 % of the payment of wages and
salaries reported for the project.
We tested that at least 30 % of total wages and salaries are based on
properly signed contracts and an adequate working time recording.
We tested that at least 15 % of total wages and salaries have been
paid.
We tested social security expenses including pensions and taxes have
been recorded and paid to relevant authorities in accordance with the
national legislation.
8) With regard to the information in the cost statement, the following procedures
were carried out. The procedures covered at least 30 % of the costs (other
than personnel-related costs) reported for the project and at least 15 % of the
3 (7)
payments of the costs (other than personnel-related costs) reported for the
project.
We tested that the recorded costs are based on supporting documen-
tation,
We agreed the audit trail from general ledger to the project financial
reporting,
We assessed the eligibility of costs against the funding agreement and
project budget.
We tested that the costs were approved according to the [local partner
organization’s] [approval guidance].
With regard to the costs inspected, we assessed whether the pro-
curement instructions issued by [the Finnish partner organization] have
been adhered to.
With regard to taxes (other than personnel-related) we assessed
whether they have been appropriately recorded and timely paid out to
relevant authorities.
9) We obtained a list of fixed assets and performed the following procedures:
We assessed if the list was maintained up-to-date.
We reconciled the list and the changes in the list with the bookkeeping.
Additionally, we checked that at the termination of projects adequate docu-
ments of the transfer of the fixed assets have been prepared and signed.
10) We interviewed [name and position] in order to find out the following:
How [the local partner organization] ensures that the funds has not
been, even temporarily, used for any other than project purposes.
What kind of procedures does [the local partner organization] have
with the original documents of all valid essential contracts (e.g. agree-
ments with authorities, rental, lease, service agreements).
Has there been any indication of fraud, corruption, money laundering
or terrorism in any form.
11) Based on information we received during performing the agreed-upon proce-
dures, we assessed whether any internal control deficiencies have come to
light, which are significant in terms of project funding. If during performing the
agreed-upon procedures we see a conflict between the financial section of the
annual report and the other sections of the annual report, we report our obser-
vations.
We report our findings below:
1) In Item 1 we observed that
4 (7)
the parties have [not] a valid agreement of cooperation [that was signed
[date]],
based on our observations during this engagement the agreement has
[not] been adhered to
the financial [programme/project] report [does not] correspond[s] with
the agreement of cooperation.
Additionally, we obtained [the instructions issued by [the Finnish part-
ner organization] including the reporting and procurement instructions.
Based on the interview with [name and position], the instructions have
[not] been adhered to [if not, please specify]].
2) In Item 2 we observed that [the local partner organization’s] project accounting
is arranged [describe how the project accounting is arranged and comment
does the [the local partner organization] have an adequate double-entry
bookkeeping system in place, including journal and general ledger, and what
bookkeeping software they are using.]
3) In Item 3 we observed that [the local partner organization’s] working time re-
cording is arranged [describe how the working time recording is arranged.]
4) In Item 4 we obtained the project’s budged approved by [the Finnish partner or-
ganization] on [date] totaling [total budgeted costs] [currency]. We also [tested
that]
the actual figures in annual report is [not] in line with the budget and
the annual report [does not] include[s] explanations of budgetary devia-
tions over 15 %.
5) In Item 5 we reconciled the project accounting with the financial section of the
annual report:
the opening balance of funds [amount, currency] [does not] match[es]
between the bookkeeping and the auditor’s report of the previous year
[in case of not matching please specify],
received funds[does not] match[es] between the bookkeeping and the
annual report [in case of not matching please specify],
incurred costs [does not] match[es] between the bookkeeping and the
annual report [in case of not matching please specify] and
received but unused funds [amount, currency] [does not] match[es] be-
tween liabilities in bookkeeping and ending balance of the annual re-
port. [in case of not matching please specify]
Additionally, we reconciled the official bank account statements and cash
books relating to the [programme/project] with the bookkeeping as of [date /
end of reporting period] with [no differencies / difference of [amount of differ-
ence] and calculated [the local partner organization’s] cash [amount, currency]
5 (7)
and reconciled the amount with the bookkeeping as of [the date of performing
the agreed-upon procedures].
6) In Item 6 we noted that [the Finnish partner organization] is [not] a special foun-
dation and [the local partner organization] have [not] locally acquired self-
financing. [When self-financing has been acquired, we ensured that the report-
ed self-financing [amount, currency] has been received from [the Finnish part-
ner organization].
7) In Item 7 we tested that:
[%] of total wages and salaries is based on properly signed contracts
and an adequate working time recording,
[%] of total wages and salaries have been paid and
social security expenses including pensions and taxes have been rec-
orded and paid to relevant authorities in accordance with the national
legislation.
8) In Item 8 we observed that the costs tested:
Were [not] based on supporting documentation [in case of inadequacy,
please specify].
The audit trail from general ledger to the project financial reporting was
[not] [adequate and complete].
We did [not] recognize [any] suggestions that the costs examined
would not have been eligible according to the funding agreement and
project budget [please specify].
The costs were [not] approved according to the [local partner organiza-
tion’s] [approval guidance] [please specify].
The procurement instructions issued by [the Finnish partner organiza-
tion] have [not] been adhered to [please specify].
The taxes (other than personnel-related) have [not] been appropriately
recorded and timely paid out to relevant authorities.[if not, please speci-
fy].
9) In Item 9 we observed that:
The list has [not] been maintained up-to-date by the [local partner or-
ganization.]
The list and the changes in the list [does not] reconcile[s] with the
bookkeeping [in case of deviations, please specify].
6 (7)
Additionally, we ensured that at the termination of projects, adequate docu-
ments of the transfer of the fixed assets have [not] been prepared and signed.
[please specify].
10) In Item 10 we inquired [name and position] to find out the following:
[describe how [the local partner organization] ensures that the funds
has not been, even temporarily, used for any other than project pur-
poses.]
[describe what kind of procedures [the local partner organization] have
with the original documents of all valid essential contracts (e.g. agree-
ments with authorities, rental, lease, service agreements)]
[if there has been any indication of fraud, corruption, money laundering
or terrorism in any form, describe specifically].
11) In Item 11 we point out that based on the information we received during per-
forming the agreed-upon procedures, we have [not] detected any internal con-
trol deficiencies which are significant in terms of project funding [specify if inter-
nal control deficiencies have been detected]. We have [not] detected a conflict
between the financial section of the annual report and the other sections of the
annual report [specify if conflicts have been noted].
Because the above procedures do not constitute either an audit or a review made in
accordance with International Standards on Auditing or International Standards on
Review Engagements, we do not express any assurance of the abovementioned is-
sues.
Had we performed additional procedures or had we performed an audit or review of
the financial statements in accordance with International Standards on Auditing or
International Standards on Review Engagements, other matters might have come
to our attention that would have been reported to you.
Our report is solely for the purpose set forth in the second paragraph of this report
and is not to be used for any other purpose. The report or part of it may not be cop-
ied, otherwise duplicated or be given to a third party. [According to the Finnish Act
on the Openness of Government Activities (621/1999), the report is a public docu-
ment, with the exception of business and professional secrets that the recipient has
clearly labeled as commercial and professional secrets, ie. confidential information,
in accordance with Section 24 para. 20 of the Act on the Openness of Government
Activities. The obligation of professional secrecy does not apply to information that
the Ministry for Foreign Affairs of Finland declares or gives to a third party on the
basis of an authority or a law.] Our Report only applies to the annual report detailed
above; it does not apply to the recipient’s complete financial statements.
[Location and date]
7 (7)
[Auditing firm]
[The person responsible for the engagement]
[Authorised Public Accountant/Certified Auditor]
[Where the text is in brackets [ ] it should be edited or removed.]
Engagement Letter
[Contact person
Grant beneficiary
Address]
[Date]
[Funds for Local Cooperation: Agreed-upon Procedures for programme/project report]
1 Objectives and Background
[Recipient organization of the grant/local partner] has prepared an annual report on the
[programme/project] to [the Finnish partner organization] dated [date] for the period of [1.1.-
31.12.20xx].
[Recipient organization of the grant/local partner] has asked [audit company / authorized auditor] to
perform agreed-upon procedures with regards to the annual report on the [programme/project] as a
whole, its implementation and the use of funds. The purpose of our audit procedures is solely to assist
[the Finnish partner organization] and Ministry for Foreign Affairs of Finland] in evaluating whether the
annual report has been drawn up, and the funds has been used for intended purposes, in accordance
with general conditions for the use of discretionary government transfers and additional conditions for
programme/project support].
This letter is to confirm our understanding of the terms and objectives of our engagement and the
nature and limitations of the services that we will provide.
This Engagement Letter sets out the Services that we have agreed to provide and the terms of our
engagement.
2 Services to Be Provided
Our engagement will be conducted in accordance with the International Standard on Related Services
4400 applicable to agreed-upon procedures engagements taking into account the conditions set out in
the discretionary government transfer decision and in the additional conditions for programme/project
support and we will indicate so in our Report.
We have agreed to perform the procedures described in appendix 1 and report to you the factual
findings resulting from our work.
2 of 4
The procedures that we will perform will not constitute an audit or a review made in accordance with
International Standards on Auditing or International Standards on Review Engagements and,
consequently, no assurance will be expressed.
In connection with the engagement, we will prepare a report where we will bring our observations
based on the audit procedures performed.
The procedures that we will perform are intended solely for the purpose set forth in the Engagement Letter’s first paragraph and the report may not be used for any other purpose. The report or part of it may not be copied, otherwise duplicated or be given to a third party. [According to the Finnish Act on the Openness of Government Activities (621/1999) the report is a public document, with the exception of business and professional secrets that the recipient has clearly labeled as commercial and professional secrets, ie. confidential information, in accordance with Section 24 para. 20 of the Act on the Openness of Government Activities. The obligation of professional secrecy does not apply to information that the Ministry for Foreign Affairs of Finland declares or gives to a third party on the basis of an authority or a law.] Our Report only applies to the annual report detailed above; it does not apply to the recipient’s complete financial statements.
3 Timetable
We will be able to commence our work on [date] and we expect our Report to be completed by [date].
4 Resources
[Auditor’s name] will be responsible for the engagement. [Other members of the team are NN, YY and
ZZ.]
5 Your Responsibilities
[Recipient organization of the grant/local partner] is responsible for documentation and preparation of
the annual report in accordance with the discretionary government transfer decision, general
conditions for the use of discretionary government transfers and additional conditions for
programme/project support. In addition, [Recipient organization of the grant/local partner] is
responsible for providing all the necessary documentation and assistance needed for us to perform all
the agreed-upon procedures.
6 Estimated Time Needed and Fees
[We estimate that the time needed for providing the Services will be [xx hours/xx days/xx weeks]. We
estimate that our fee for this engagement is about [€ x.000.000,00] (excluding VAT). Our out-of-pocket
expenses relating to the Engagements will be added to our fees.]
3 of 4
7 [Terms of Business]
[This Engagement Letter should be read in conjunction with the enclosed Terms of Business.]
8 Acknowledgement and Acceptance
This Engagement Letter (including its appendices) [and the enclosed Terms of Business together]
form the Contract between us.
Please record your agreement to the terms of this Contract by signing the enclosed copy of this letter
in the space provided and returning it to us.
Yours sincerely,
[Auditing Firm]
[The person responsible for the engagement]
[Authorised Public Accountant/Certified Auditor]
Appendix
1 Template of the Auditor’s Report
[2 Terms of Business]
4 of 4
Confirmation of the Contract
I have read and accepted the Contract terms set out in the Engagement Letter (including its
appendices) [and the Terms of Business]. I accept those Contract terms on behalf of [Recipient
organization of the grant/local partner] and represent that I am authorised by [Recipient organization of
the grant/local partner] to do so.
Date ………………………………….
On behalf of [Recipient organization of the grant/local partner]
Signed ……………………………
[Name and position]
……………………………………………
[Where the text is in brackets [ ] it should be edited or removed.]