TERMS OF REFERENCE (TOR)
EXTERNAL AUDIT OF PROJECT FFACT
1. Introduction
This document outlines the Terms of Reference (ToR) for the external audit of the financial statement, which contains the receipts and disbursements, for the Project FFACT (implemented by ADRA Indonesia) for the period from 01 July 2022 to 31 July 2024. The purpose of the audit is to provide an independent opinion on the accuracy and completeness of the financial statement and to assess compliance with relevant laws and regulations.
2. Background
Organization:
ADRA Indonesia is a humanitarian arm of the Seventh-day Adventist Church, established in 1991. The basis for its existence, its reason for being, is to show God's love and example by living for, helping and working with those in need in community development and disaster relief.
Project:
Title: Forecast based Financing for Anticipatory Action (FFACT Project).
Intervention location: Banten, Central Sulawesi, West Nusa Tenggara and East Nusa Tenggara.
Donor: Aktion Deutschland Hilft (ADH) through ADRA Germany.
Duration: 25 months (01 July 2022 – 31 July 2024).
Budget: EUR 193,670.
Project's Objectives:
1. To increase community awareness on early warning for early action, linking key stakeholders including essential service providers at sub-national level with the effective EWS.
2. To facilitate in developing protocols, guidelines, policies on FbF-AA at sub-nationals to enable joint activation of Emergency Preparedness and testing those in real time scenario.
3. Participate in sub-nationals' early warning system processes for activation of emergency preparedness and to capture lesson learned to be presented within ADRA Network and other platforms.
3. Objectives of the Audit
The primary objectives of the audit are:
· To express an independent opinion on the fairness and accuracy of the financial statement.
· To assess whether the financial statement presents fairly, in all material respects.
· To ensure compliance with applicable accounting standards, regulations, and donor requirements.
· To identify any areas of concern or non-compliance and provide recommendations for improvement.
4. Scope of the Audit
The scope of the audit will include:
· Review of the financial statement, which contains the receipts and disbursements, for the period from 01 July 2022 to 31 July 2024.
· Examination of supporting documentation, including receipts, invoices, contracts, and other relevant records.
· Assessment of internal controls and financial management practices related to the fund.
· Verification of compliance with applicable laws, regulations, and donor requirements.
· Evaluation of the accuracy of financial reporting and disclosures.
5. Audit Methodology
The audit will be conducted in accordance with the International Standard on Auditing (ISA) 805, "Special Considerations—Audits of Single Financial Statements and Specific Elements, Accounts or Items of a Financial Statement", including:
· Planning: Understanding the fund's operations, assessing risk areas, and designing audit procedures.
· Fieldwork: Collecting evidence through testing and review of financial records, transactions, and internal controls.
· Reporting: Preparing an audit report with findings, conclusions, and recommendations.
6. Deliverables
The audit will result in the following deliverables:
· Audit Report: an independent opinion on the financial statement, including any material findings or recommendations for improvements.
· Management Letter: a document addressing specific issues identified during the audit and suggestions for improvements in financial practices and for internal controls.
7. Timelines
The audit is expected to follow this timeline:
· Planning and Preparation: 9 September 2024 to 13 September 2024.
· Fieldwork: 16 September 2024 to 30 September 2024.
· Draft Report: 10 October 2024.
· Final Report: 18 October 2024.
8. Audit Team
The audit will be conducted by the accountant firm who is qualified and experienced in auditing Projects by non-profit organizations.
9. Responsibilities
· Organization/Project: Provide access to all relevant documents and records, ensure cooperation with the audit team, and address any preliminary findings or recommendations.
· Audit Team: Conduct the audit in a professional manner, ensure adherence to auditing standards, and deliver the report and management letter as outlined.
10. Confidentiality
All information obtained during the audit will be treated with strict confidentiality and used solely for the purpose of the audit.
11. Fees & terms of payment
Audit fees must include all relevant costs for this Audit, which includes travel expenses for the audit team, if applicable, and all relevant taxes, where applicable.
Audit fees payments as follows:
· 50% of the fees upon signing the engagement letter, and
· 50% of the fees after the submission of the final audit report.
12. Deadline of proposal submission: 31 August 2024
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