[newdevjobsindo] TOR for the National Auditor

Juli 30, 2021   Comment  

Transition Audit for NLR Indonesia

Terms of Reference for the national auditor

 

1. Introduction

NLR is an international organization working on leprosy[1] with branch offices in Indonesia, India, Brazil, Mozambique and Nepal. Theis is the Term of Reference for an audit that will assess whether NLR Indonesia national NGO (Yayasan NLR Indonesia) is ready for the final transition from an NLR country office to an independent national NGO within the NLR Alliance. This so-called transition audit will consist of a pre-audit and a final audit; it will provide a first critical and objective assessment of the readiness of the organisation by means of a pre-audit, resulting in advice on steps that still need to be taken.

 

The outcome of the pre-audit will be discussed in NLR International’s Supervisory Board. The final audit determines whether these steps have been completed sufficiently and is the basis for the final decision on the timing of the transition.

 

This document provides the background to the process in section 2, followed by the objectives (section 3), methodology (4), audit instrument (5), audit team (6) reporting (7), planning (8) and profile of the international auditor (9).

 

2. Background and rationale

In 2011 NLR formulated its Dream 2030, in which Leprosy would be under control in many of the countries where we work:

• Quality Leprosy Services are available and integrated into the Public Health Care system.
• Development of Grade 2 disabilities during or after care is exceptional due to good early diagnosis and good care during treatment and after cure.
• People affected by leprosy are considered regular members of society.

 

To reach this, NLR’s mission is to prevent, detect and treat leprosy and support health, ability and full inclusion in society for persons affected by leprosy

 

In 2015, NLR decided to embark on a process of decentralisation and alliance building (called NLR2020), because we considered the NLR model that had worked well for 50 years not the best fit with future realities to fulfill our mission.

 

With this process, NLR is evolving from one NLR organisation working with NLR country offices in five countries, governed by the NLR board from the Netherlands, into an Alliance which operates on the basis of multi-faceted collaboration between its members, constituting of NLR in the Netherlands and the NLR national NGOs in the five countries. NLR Indonesia, India and Nepal are the first three former country offices that have embarked on the transition process.

 

In 2019, it was foreseen that it would take at least two years for each NLR country office to develop into an independent national NGO. This means a minimum of two years from the starting date of their Transition Agreement with NLR and their formal NLR Alliance membership, to entering into a Collaboration Agreement with NLR, as national NGO to which all responsibilities, power and assets have been transferred. The respective governance boards of the NLR national NGOs will need to have the confidence that they are supervising a healthy and professional NGO, and the supervisory board of NLR wants to hand over the organisations to the national boards with confidence for a successful future of the NGOs and the Alliance.

 

For this aim, a transition audit will be carried out, consisting of a pre-audit and a final audit.

The transition period of the audited country may take longer if NLR and/or NLR Indonesia after two transition years conclude that NLR Indonesia does not yet fulfil the requirements, (ref. the Admission Requirements mentioned in the Transition Agreement). These requirements are all the elements that need to be in order before the final handover can take place. If not yet fulfilled, the outcomes of the audit will indicate the period and under which conditions the final transition steps can take place.

 

Requirements and obligations: a self-sufficient and self-operating NLR Alliance member

The NLR Alliance Manual provides the shared quality standards for NLR Alliance members in various domains of their work, and the Transition Agreement mentions additional specific requirements. Summarised, these standards and requirements are the following:

 

1. Internal organisation: systems and procedures:

• good internal systems and procedures, verified by an Operational Audit and confirmed by ISO 9001 Certification and its annual renewal, or a comparable independent NGO quality standard or a common standard in Indonesia and agreed between Parties.

 

2. Organisational performance and sustainability:

• is a relevant in-country actor for the achievement of sustainable effects in the fight against leprosy
• is able to develop, implement and report on projects and programmes in an effective and transparent manner
• has sustained staff capacity to implement and develop good quality programmes
• aims and does its utmost efforts to obtain a secured, sizeable and diversified annual funding portfolio
• has a good local network with national and local authorities and other stakeholders
• uses the NLR brand in its communication and works, and applies the brand manual correctly

 

3. Governance

• complies with all national and local laws and regulations, and obtains timely any and all permits, certificates or licenses necessary for the full and proper conduct of its business.
• has governing documents that comply with the guidelines, principles and governance requirements compiled in the NLR Alliance manual
• has a well-functioning board, with appropriate number of members and appointment duration, assigned with clear roles and responsibilities regarding specific tasks as defined in the Transition Agreement
• has a director effectively leading and managing the organisation

 

4. Participation in the NLR Alliance and cooperation with NLR

• participates actively in the NLR Council of Chairs and Round Table:
• engages in joint knowledge and programme development, including research for innovative approaches;
• engages in joint resource mobilization;
• provides input for and implements international lobby coordinated by NLR and its international partnerships;
• provides information to NLR and commits to an audit mechanism as agreed in the Transition Agreement
• gives due consideration to questions and concerns raised by NLR, as described in the Transition Agreement

 

3. Objectives

The transition audit consists of a pre-audit and a final audit.

 

Objectives

Pre-audit:

• To gain in-depth insight in the qualities of NLR Indonesia as a self-sufficient and self-operating NLR Alliance member
• To give recommendations on elements that need to be improved before a “go”-decision for a Collaboration Agreement can be made

 

Final audit:

• To give final recommendations for a “go” / “no-go” decision for a Collaboration Agreement to the NLR Supervisory Board

 

4. Methodology

Pre-audit

NLR favours a combination of an external objective assessment of the organisation (elements a, b, c, d), and a qualitative workshop with the board on aspects of the governance of the organisation in particular (element c).

 

These instruments have been developed with input and commitment of all internal stakeholders.

 

For the external assessment, operational audit methods (such as checking evidence) as well as qualitative methods (such as interviews) will be used. Internal stakeholders from across NLR Indonesia and NLR will be interviewed on topics related to their role within the organisation. In the workshop with the board, the auditor(s) will use a participatory approach to assess and discuss together with the board members their views on the governance of NLR Indonesia during the transition period.

 

The audit findings and recommendations will be discussed with the board and director of NLR Indonesia and with NLR for possible follow-up action and decision on the status of the transition.

 

Final audit

The final audit will consist of an external assessment of remaining issues from the pre-audit. Methods used will depend on the nature of the issues

 

5. Audit instrument

NLR has developed a specific transition audit instrument which needs to be used for the audit. It consists of three tools:

• One tool consisting of excel sheets on all topics to be audited, including recommended means of verification and scoring method
• An agenda for the workshops with the national boards
• A list of decisive elements for a go/no-go decision

 

6. Audit team

NLR will commission the audit to a team of three auditors:

• Two external auditors, one international and one Indonesian auditor, with different but complementary expertise (such as quality control and organisational development/governance). The international auditor will be responsible to implement and coordinate the audit. The Indonesian auditor, will have specific in-country experience and knowledge on country-specific regulations.
• The third member of the audit team will be an internal NLR auditor from the Netherlands, most probably from the NLR programme department, with a specific role of backstopping (being a resource person to) the audit team during the audit.

The international auditor will provide a detailed audit plan for Indonesia, in coordination with the other audit team members, to be approved by NLR.

Both NLR and NLR Indonesia will provide the auditors with the documentation and information needed for the audit.

 

7. Reporting

The international auditor is responsible for reporting back to NLR Indonesia and NLR, in consultation and coordination with the audit team members: directly after each audit to report the preliminary findings and recommendations, and within two weeks after the audit on their final draft report.

 

After the pre-audit has been completed, the auditors will present a reflection to the NLR Round Table, on the audit results, and the adequacy of the audit instrument. Audit results will also be shared by the international auditor in a meeting with the NLR Supervisory Board in the Netherlands.

 

8. Planning

The pre-audits will take place between July 20^th and August 7^th, 2021, taking one week per pre-audit. The final report is due no later than 10 days after each pre-audit.

The final audits will take place in September/October 2021, taking maximum 2 days per audit. Please note that during this time of the Covid pandemic with fluctuating travel restrictions, the auditors will need to be flexible regarding the timing of the audits. Safe travel comes first. NLR and NLR Indonesia will stay in touch with each other and with the auditors to establish and mutually agree on the timing of the audits.

 

Highly preferably the whole audit team will be physically present in the country and office for which the audit is implemented. This will depend on travel possibilities in the context of the Covid-19 pandemic.

 

Specific planning of the audit process for each country - will be discussed and detailed with NLR and Indonesia.

 

Each pre-audit will take:

Preparation:                       3 days

In-country:                         5 days

Reporting:                           2 days

Total:    10 days

 

The number of days spent on the final audit will depend on the outcomes of the pre-audit.

 

9. Profile of the national auditor

• Experience in auditing financial, legal, administrative processes within organisations or companies (references will be requested)
• Knowledge of legal and administrative compliance issues for NGOs in Indonesia, and preferably of the local health system
• Knowledge of /experience in international co-operation / NGO sector
• Independent (from NLR and the national NGO)
• Ability to relate to board, director and staff of national NGO
• Experience in (collaborating within) audit teams
• Objective, collaborator in teams, thorough, analytical

 

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[1] www.nlrinternational.org