AUDIT SERVICE FOR EIGHT FAIR TRADE COOPERATIVES IN ACEH TENGAH AND BENER MERIAH

Background

Fair
Trade USA, in partnership with Progreso and the Rabobank Foundation and with
strategic support from Lutheran World Relief, will provide technical assistance
to eight Fair Trade Certified coffee cooperatives in Aceh Tengah and Bener
Meriah.  The primary objective of this project is to improve the economic status and livelihoods of smallholder coffee farmers in the Lake Tawar region and also to strengthen the economic security
and efficiency of cooperatives so they are better positioned to serve their
farmer members.  Improved economic status
and strengthened economic security will be achieved by linking coffee
cooperatives to export markets. The main components are as follows:

·         Helping cooperatives maintain and grow Fair Trade
Certification of Arabica coffee for U.S. and European markets by resolving
non-compliance issues, allegations of fraud and defaults, and prevent
suspension and de-certification, enabling coffee production as Fair Trade
Certified to meet the growing market demand on the U.S. and Europe.
·         Enabling the production of high quality specialty
coffees and coffee blends suitable for U.S. and European markets to incomes for
sustained economic development and security
·         Providing organizational capacity building,
training and knowledge transfer to cooperatives.
·         Enabling Fair Trade Certified cooperatives and
producer groups to access capital for short-term long-term financing
needs.

As part
of the process for cooperatives improved access to capital, they need to provide
an independent audit that evaluates the financial records, practices, and management
in the organization.  The eight
cooperatives range in size from approximately 650-4,000 members, with revenues
between IDR 333,307,101 and IDR 20,465,139,165.
Audit Scope
The overall objective of the  audit is to assess the financial management
and practices of eight Fair Trade Certified coffee cooperatives in Aceh Tengah
and Bener Meriah in accordance with Generally Accepted Accounting
Principles.
The auditor will be expected to
conduct 8 audits in accordance with the International Standards on Auditing.
The scope of the audits will include:
·         Review financial data for accuracy and
reliability and make sure financial reports are free of material misstatement;
·         Review financial statements and make
sure they are in accordance with U.S. Generally Accepted Accounting Principles;
·         Review procedures and management
systems to examine if these provide adequate internal control;
·         During examination of the detail
accounting records, make sure there is a system, which allows easy examination
and sampling of transactions;
·         Examine the effectiveness of systems
and procedures in place throughout the audit period, including adequacy in
internal controls;
·         Review the expenditure  (including payroll records) and make sure
they are in accordance with local labor law and other applicable laws;
·         Identify procurement practices,
procedures, documentations, to verify existence, or lack of, of bids,
approvals, invoices, receipts, goods received, etc
·         Conduct interviews with key
individuals involved in the procurement process. This include but is not
limited to the interviews with vendors involved, cooperatives’ staff, board and
collectors, and others involved in the procurement process
Requested
Services
The following report will be prepared
by the auditors:
·         Audit report, including management
letter for the fiscal years 2009 to 2011 for each cooperative (as applicable –
some cooperatives may only have one or two fiscal years for auditing).
A debriefing meeting with Lutheran
World Relief – Indonesia staff no later than two weeks following the completion
of the audit.
-       Debriefing
meeting with the 8 coffee co-operatives
-       Orientation
meeting with LWR and Rabobank at the end of September

The
Proposal
In responding to this request, the
following information shall be submitted:
1.    Details of firm’s experience in
providing auditing services in small to medium scale cooperative organization.
2.    Describe how your firm will approach
the audit of the 8 coffee co-operatives.
3.    Describe how and why your firm is
different from other firms being considered, and why our selection of your firm
as an independent auditor is the best decision.
4.    Projected Fee (including travel and
accommodation) and availability to complete the audit services outlined in this
request. The fee should be presented with tiered pricing to indicate the price if
the audit will be conducted for one year, two years or three years of the
organization’s fiscal data.
5.    Include estimated on site time
required to complete the services (implementation plan).
6.    Provide a list of 3 references from
not-for–profit or cooperative organizations that your firm has conducted an
audit in recent years and are still clients.
7.    Provide names and resumes of key
personal that will conduct the audit.
Proposals shall not be more than 5
pages in length (not including references and resumes) and  written in English and shall be submitted no
later than 21 September 2012 to Lutheran World Relief’s Indonesian Office at
Jl. Sei Tuan No. 10, Medan or through e-mail to lwrindonesia1@gmail.com.
Selection
Criteria
Lutheran World Relief – Indonesia, in
consultation with its Head Office and Fair Trade USA, will select the audit
firm based on a combination of criteria including: evidence of proficiency in
the audit of cooperative or agriculture/coffee company, fees, availability and
required time to complete the audit.The
final decision will be made in writing by 24 September 2012.  Selected audit firm should commence the audit
no later than the week commencing 1 October 2012.