Burundi Youth and Community Empowerment Program

FY20 Financial External Audits

Terms of Reference

A. BACKGROUND

Affirmative Action/Equal Opportunity Employer

The American Friends Service Committee (AFSC) is a Quaker organization that includes people of various faiths who are committed to social justice, peace, and humanitarian service.  Its work is based on the Quaker belief in the worth of every person and faith in the power of love to overcome violence and injustice.

B. AUDIT SCOPE

These terms of reference address the requirement for external audit of financial statements of American Friends Service Committee (AFSC) Burundi program (“Program”) for FY20 (From Oct 1^st, 2019 to Sept 30^th, 2020).

The main responsibilities of the audit firm are as follows:

• Review all transactions and supporting documents of program office expenditures and its partners;
• Check whether the financial statements are prepared in accordance with Generally Accepted Accounting Principles GAAP);
• Check the integrity of internal control system of program and its partners;
• Assess the efficiency of the administration, management and internal control system program and its partners;
• Describe any specific internal control weaknesses noted in the financial management and draw up recommendations to resolve/eliminate the internal control weaknesses already noted;
• Check the financial statements of program partners in order to evaluate the effectiveness of their internal control systems and draw recommendations regarding the improvements in their daily operations and the mitigation of the risks relating to poor financial management system,
• Evaluate the accuracy of records for all expenditures incurred by partners under the framework of program funded projects;
• Check whether program partners comply with the requirements of  Grants contracts for funds applied to the program activities;
• Evaluate program’s procurement procedures;
• Evaluate whether AFSC BURUNDI complies with the Financial and Administrative Manual procedures;
• Analyze the financial statements of program for FY20;
• Express an opinion on internal control system, financial statement and funds management of AFSC Burundi Program;

Verify whether Financial information and activities are reported and accounted for accurately on a timely basis among the Partnership. Any planning of activities which incurs financial responsibilities should be submitted to the appropriate level of management for approval before implementation of such projects or activities;

• Verify that the voucher and the support documents are stamped ‘paid’ once a cheque is issued to prevent its reuse;
• Verify that the Blank cheques/Pay Orders are stored in a secure place by someone who does not have access to making changes to the accounting records or authorized to sign cheques/pay orders;
• Confirm whether All bank accounts have been reconciled every month;

Verify  that Assets have been recorded in Asset Register;

• ;

Verify that a quarterly budget monitoring report is produced, and any over or under spending must be analyzed and an explanation provided.

A draft audit report should be submitted by the deadline of February 22^nd, 2021, a final signed audit report with certified statements on March 1^st, 2021 and a management letter on the date of March 5^th, 2021 following the end of period under review. The financial statements for the financial year will be made available no later than February 5^th2021. The External Auditor will have to present the final audit report to the AFSC Burundi Team, and this report will be shared with Nairobi regional office and Philadelphia Headquarters.

The audits should be carried out in accordance with international auditing standards and National Auditing standards and registered in OPC or in any international auditing Board. Sufficient audit evidence should be gathered to substantiate in all material respects the accuracy of financial statement. The audit report of the auditors should state if the audit was not in conformity with any of the above and indicate the alternative standards or procedures followed.

C. THE AUDIT PACKAGE

The following information is required:

• Copy of financial regulations
• Copy of budgets and other financial reports
• Cash book and bank statement covering the full year and up to date with the audit
• Previous signed audit report
• Cheque books and counter foils for the period
• Receipt books for the period
• Cheque request forms/expense claim forms for the period
• Bank statements, correspondence, evidence of authorization
• Bank reconciliations, agreeing cash book balance to bank statement balance
• Petty cash records and vouchers
• Salary records including income tax and other deductions
• Signed contracts between Burundi Program and Suppliers (goods and services),
• Signed grant contracts between Burundi Program and donors,
• Signed grant contracts between Burundi Program and its partners,
• Signed contracts between Burundi Program and employees.
• Fixed assets register

THE AUDIT REPORT AND MANAGEMENT LETTER

1. Audit Report:

The audit report should clearly indicate the auditor’s opinion. This would include at least the following:

• The title, addressees, and an opening or introductory paragraph containing
  • Identification of the financial information audited including the period covered; and
  • Statement of the responsibility of the entity’s management and the responsibility of the auditor.
  • A scope and methodology paragraph describing the nature of the audit referencing:

a) The accounting standards that have been applied and indicate the effect of any deviations from those standards;

b) The audit standards that were applied (ISAs, or national standards that comply with one of these in all material respects); and

c) The work the auditor performed.

• An opinion paragraph disclosing:

a) Whether the financial statements and supporting schedules fairly present the cash receipts and expenditure in all material respects and that the funds were used for the purposes defined by the work program;

b) Whether the financial transactions reflected in the statements are in accordance with financial regulations and procedures, budgetary provisions and other applicable directives; and

c) Summary assessment of the efficiency of the management and internal control system.

The auditor may expand the report to include other information and explanations not intended as a reservation. Audit reports will be provided English.

2. Management Letter:

The auditor should submit a letter to AFSC management at the completion of the audit. The topics/issues to be covered in the letter should include:

d) An assessment of the efficiency of the administration, management and internal control system of American Friends Service Committee, Burundi Program.

e) A description of any specific internal control weaknesses noted in the financial management. Recommendations to resolve/eliminate the internal control weaknesses noted should be included.

f) Management comments/response to audit findings and recommendations.

D. AUDITOR INDEPENDENCE, CODE OF ETHICS, CONDUCT AND QUALIFICATION

The auditor must be completely impartial and independent from all aspects of management or financial interests in the organization being audited. The auditor should not, during the period covered by the audit nor during the undertaking of the audit, be employed by, serve as director for, or have any financial or close business relationships with any senior participant in the management of American Friends Service Committee. The auditor should disclose any relationship that might possibly compromise his/her independence.

The auditor should be experienced in applying the International Standards of Auditing (ISA). The auditor must employ adequate staff with appropriate professional qualifications and suitable experience with ISA standards, including experience in auditing the accounts of organizations of comparable size and complexity to American Friends Service Committee.

Curriculum vitae (CVs) should be provided to AFSC by the principal of the audit firm who would be responsible for signing the report, together with the CVs of managers, supervisors and key personnel proposed as part of the audit team. CVs should include details on audits carried out by the applicable staff, including ongoing assignments indicating capability and capacity to undertake the audit and experience in auditing financial statements compliant with the International Accounting Standards (IAS).

The audit firm is required to present to AFSC the technical and financial proposals during the application which constitute a core element of its evaluation.

E. ACCESS TO FACILITIES AND DOCUMENTS

The financial systems are partly automated in Microsoft Dynamics system (SL 11) and partly manual and all financial transactions are kept at the headquarters. The auditor will have reasonable access at any time to all records and documents (including books of account, legal agreements, Memorandums of Understanding with partners and donors, bank records, invoices and contracts etc.) and to employees of American Friends Service Committee assigned to working in/ or related to the program under audit. The auditor will have a right of access to banks and depositorie statements and documents, to consultants, contractors and other persons or firms engaged by the program management over the period under the audit review.

F. PERFORMANCE PERIOD

The audit will be carried out in 15 days effective from the date of signature of the contract.

How to apply:

Please submit your applications in a sealed envelope to the following address:

American Friends Service Committee

No. 30, Avenue Kunkiko, ROHERO II

P.O. BOX 6653 BUJUMBURA-BURUNDI

Tel. +257 22 25 8576

Fax: + 257 22 25 9704

Only selected institutions/audit firms shall be contacted for further assessment and interview and the closing date is January 24^th, 2020.

Please include in your submission the following:

1. Cover letter describing why you are a good fit for the position,
2. Resumes/CVs, which shall be in chronological order starting with most recent experience,
3. Technical and Financial proposals;
4. Copy of registration certificate with a professional board (OPC or any other International board);
5. Copy of TIN (Taxpayer Identification Number);
6. References of three professional contacts within the last two years including their current phone, fax address, and email address for each reference contact.