1.
Background
ChildFund
International is an international non-governmental organization (NGO) working
in over 30 countries to help deprived, excluded, and vulnerable children have
the capacity to improve their lives and become young adults, parents, and
leaders who bring lasting and positive change to their communities. ChildFund
is committed to child-centered change that leads to healthy and secure infants,
educated and confident children, and skilled and involved youth. Since 1938,
ChildFund has worked for the well-being of children by supporting locally-led
initiatives in child protection, health and nutrition, education,
micro-enterprise development, early child development, and psychosocial
assistance that strengthen impoverished families and communities to help break
the cycle of poverty and protect children’s rights. ChildFund currently reaches
over 18.1 million children and family members through comprehensive programs in
communities around the globe.
ChildFund
had been working in Indonesia since 1958. Through community-based, culturally
grounded, participatory program approaches, ChildFund Indonesia works with 16
local partners in 32 districts in eight provinces, such as South Sumatera,
Lampung, DKI Jakarta, Banten, West Java, Yogyakarta, Central Java and East Nusa
Tenggara. In 174 villages where we work, we
support 318 ECD exclusive and/or integrated health posts (Posyandu), 87 child-friendly schools
and 96 child forums. Through these
community-support mechanisms, ChildFund Indonesia ensures local leadership support
and ownership of project activities.
ChildFund Indonesia works together
with local partners / NGOs (Affiliated Entities – AE) in implementing its
activities. Currently there are 15 Projects. Details of the Local Partners are
attached herein.
As required in
the agreement between the AE and ChildFund, the annual financial statements of
the AE has to be audited regularly, therefore we are inviting
your Firm to submit an audit proposal for auditing the financial statements of
those AE listed in the Appendix I-1
for the year ended June 30, 2015.
2.
Objective
The overall objectives of the audit are:
1.
The auditor will
perform work in accordance with the ChildFund International Audit Program,
which encompasses financial controls, safeguarding of assets, compliance with
ChildFund International policies and procedures, compliance with national laws
and regulations, reviewing administrative controls in the areas of program and
sponsor services, and assuring that appropriate controls are in place and
functioning effectively;
2.
The auditor will
provide a complete audit report in accordance with local statutory
requirements, as applicable, and in accordance with reporting standards
expressed in ChildFund International’s Project Audit Report Package;
3.
The auditor must
express an opinion on the accuracy of the financial statements in all material
respects and provide recommendation for any weaknesses noted
3.
Audit Scope
The AE audit will focus on financial controls, safeguarding of
assets and compliance with established policies, procedures, reporting
practices, laws and regulations. The AE
audit will enable the auditors to express an opinion on the accuracy of the
financial statements and adherence to the AE own/or reasonable policies,
procedures, laws and regulations. In
addition, administration controls are reviewed in the areas of program and
sponsor services to assure appropriate controls and verification of records,
files and data.
4.
Methodology, Deliverables and Time
Table
a. Methodology
In conducting the audit, the auditor must use the ChildFund
provided audit program in the Assurance Management System (HQMS).
HQMS is a web-based system that provides integrated modules for
performing audits and assigning and tracking corrective actions. HQMS is installed as a web site on a central
server at the International Headquarters Office in Richmond, Virginia and is
accessible anywhere in the world through the internet. Users access the website using Microsoft’s Internet Explorer on
Window XP only and login and navigate
the system the same way they would access any other web page. HQMS is an
English based system. This will allow consistency in the input of information
and provide the greatest overall benefit to the organization. Audit Firms must be capable of reading,
writing and understanding English.
The HQMS system allows the National Offices and audit firms to
closely monitor the progress of the field work throughout the audit. Issues can be addressed as they arise.
Upon completion of the Affiliated Entities audit, the audit firm
will meet with and report the findings to the senior management of the
Affiliated Entity and National Office for discussion, review, clarification and
conclusions. This meeting will also serve
to establish corrective action recommendations and timelines for
implementation.
Any supporting documentation or other work papers resulting from
the audit should be retained by the independent auditor and be available should
questions arise. Supporting documents
that the audit firm feels should be included with the audit should be attached
as references in the HQMS system were possible.
b. Deliverables
HQMS eliminates the need for any hard copy reports being
submitted. All audits, findings and
corrective action are tracked by the system.
NO, RO and IO Assurance will have access to the data and be able to run
management reports as needed.
There are specific reports that need to be attached to the audit
record within the HQMS system as part of the ‘Audited Financials’ checklist.
The report is referred to as item 1 on
the Audited Financials checklist.
The
auditor’s report should state the purpose, scope, auditing standards, and
results of the audit. An overall opinion
on the financial statements is required.
Scope limitations must be included. A sample Independent
Auditors Report is reflected as Appendix
I–2 of this ToR.
These reports are referred to as items
2 – 6 on the Audited Financials checklist.
Financial Statements are primarily
statutory requirements and should include revenue and expense statement and a
balance sheet at a minimum. The
remainder of this section should include any notes, assumptions, or background
necessary to explain the results of the auditor’s review. This additional
information is at the professional discretion of the auditor.
The report is referred to as item 7 on
the Audited Financials checklist.
The Management Letter is listed on the
checklist in case the auditors need a place to attach issues or findings they
encounter that are not already addressed somewhere else in the audit
program.
In the course of the review the
auditor may encounter significant issues or situations requiring immediate
disclosure and action. They are defined in the paragraph, Reporting the Results
of the AE Audit, in the Section, AE Audit and Procedures, and may include:
fraud and illegal acts, misappropriation of funds and/or misdirection of funds,
audit scope limitations, unusual transactions, conflict of interest, and
non-compliance with legal and statutory requirements. These should have been
communicated during the course of the audit via a management alert in the HQMS
system, but should also be identified and summarized in this section.
Other Comments
The auditor should state any comments
that would disclose potential risk areas or opportunities to improve the
effectiveness of the control environment and CO operations.
Before
finalizing the audit report, the auditor must discuss the finding(s) with the
respective AE.
c. Time table
The draft report (the audited financial statements, the management
letter and the audit checklist) should be submitted (select only 1 from
the 2 choices below to be put in the proposed time table):
1.
One by one within 7 working days after
the end of the audit field work of each respective AE; or
2.
Together for all the AEs within 5 working
days after the end of the audit field work of all the respective AEs.
The audit ‘Due Date’ is November
30, 2015 which is the date the audit should be ‘closed’ by. All audit work should be completed which
includes: audit work in the field, corrective action recommendations,
generating the findings record and creating all required corrective action
plans.
5.
Proposal Submission
The proposal
expected to be submitting to ChildFund Indonesia office by mail/postage no
later than June 30th, 2015, to email address: asinaga@indonesia.childfund.
The following informations have to be
included in the proposal submission:
a. Evidence of the firm’s qualifications
to provide the above services;
b. Background and experience in auditing
nonprofit clients;
c. The size and organizational structure
of the auditor’s firm;
d. Statement of the firm’s understanding
of work to be performed, including tax and non-audit services;
e. A proposed timeline for fieldwork and
final reporting;
f. Proposed fee structure for each of the
three years of the proposal period, including whatever guarantees can be given
regarding increases in future years, and the maximum fee that would be charged;
g. Describe your billing rates and
procedures for technical questions that may come up during the year, or whether
these occasional services are covered in the proposed fee structure;
h. Names of the partner, audit manager,
and field staff who will be assigned to our audit and provide biographies.
i. References and contact information
from at least one comparable nonprofit audit client.
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