Term of Reference Audit Services

A.      Background

Lutheran World Relief (LWR) is a US based non-governmental development and relief organization with programs in Indonesia. Currently LWR is implementing project with funding from Progresso Foundation called Technical Assistance Project for Bali and Flores Cooperative. The project is assisting 4 cooperatives in Bali and Flores with focus commodity in coffee and cocoa.

KSU Fa Masa was established in 2009 in Bajawa, Ngada district, with 238 members focusing on Coffee Business with purchasing Red Cherry, parchment and green beans from farmers/members and selling ground coffee and Roasted Bean in town and other cities in Indonesia.  In 2018, Fa Masa has revenue IDR 784.287.000 and in August 2018, Fa Masa expended their business by opening the café “Sa’o Kopi Fa Masa with revenue IDR 5,020,000 by end of December 2018.   Fa Masa is also managing the saving and loan for all their members and received loan from the government IDR 250,000,000 to be managed by groups.  

As part of the capacity building in financial management, LWR provides financial assistance to Fa Masa cooperative in January 2019 with the total IDR 154,000,000 and will be transferred to Fa Masa in three terms as part of the capacity building for the cooperative.

 

Audit Scope

The overall objective of the audit is to assess the financial management and practices of KSU Fa Masa in accordance with Generally Accepted Accounting Principles.

The auditor will be expected to conduct audit for cooperative in accordance with Indonesia Standards on Auditing.

The scope of the audits will include:

a.     Review financial data for accuracy and reliability and make sure financial reports are free of material misstatement;

b.     Review financial statements and make sure they are in accordance with Indonesia Generally Accepted Accounting Principles;

c.     Review procedures and management systems to examine if these provide adequate internal control;

d.     During examination of the detail accounting records, make sure there is a system, which allows easy examination and sampling of transactions;

e.     Examine the effectiveness of systems and procedures in place throughout the audit period, including adequacy in internal controls;

f.       Identify procurement practices, procedures, documentations, to verify existence, or lack of, of bids, approvals, invoices, receipts, goods received, etc

g.     Conduct interviews with key individuals involved in the procurement process. This include but is not limited to the interviews with vendors involved, cooperative’ staff, board and others involved in the procurement process

Requested Services

The following report will be prepared by the auditors:

1.     Audit report:  Audit report stating an opinion on whether the financial statements give a true and fair for the period under review including management letter for the fiscal year 2018 to 31 March 2019

2.     Audited Financial Statements

3.     A management Letter that provides an evaluation of cooperative’s internal controls and operations with recommendations and partner management’s responses.

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 cooperative.

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.

5..     Include estimated on site time required to complete the services (implementation plan)

6.     Provide a list of 3 references from 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 3 pages in length (not includes references and resumes) and written in English and shall be submitted no later than 14 April 2019 to Lutheran World Relief’s Indonesian Office through e-mail in jobsindo@lwr.org.

Selection Criteria

Lutheran World Relief – Indonesia 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, and required time to complete the engagement.  The final decision will be made prior to 22 April 2019.  Selected audit firm shall aim to complete the audit and submit the final audit report no later than 30 June 2019.