REQUEST FOR PROPOSAL, External Audit Services for CRS Indonesia

SCOPE OF WORK (SoW)

EXTERNAL AUDIT OF FINANCIAL STATEMENT

INDONESIA TSUNAMI APPEAL PROGRAMME

1. BACKGROUND

Catholic Relief Services (CRS) is a US–based voluntary organization working in more than 80 countries around the world to assist people victims of disasters, people in need and the disadvantaged regardless of race, belief or nationality. CRS has been operating in Indonesia since 1957 under a Memorandum of Understanding with the Ministry of Social Affairs to support local communities struggling to alleviate human suffering, eradicate poverty, and become self-reliant through the implementation of mother and child health and nutrition programs, agricultural livelihoods, and disaster risk reduction. CRS is also a major player in humanitarian and disaster response intervention in Indonesia. CRS implements its programs in collaboration with local non – government organizations operating in CRS’s geographical target areas.

CRS Indonesia had implemented the Indonesia Tsunami Appeal programme in Central Sulawesi which was funded by the Catholic Agency for Overseas Development (CAFOD). The project geographically targeted underserved communities in Donggala, Palu and/or Sigi in Central Sulawesi, which suffered high rates of structural damage from the disaster.  Within these communities, CRS Indonesia selected i) Temporarily displaced households from sites with damaged homes and/or latrines; ii). Non-displaced households with damaged homes and/or latrines.

According to the programme planning, when the project ended, the project with the budget over £50,000 will be audited by an independent external auditor assigned by CRS Indonesia. Audits will also include procurement audits, technical audits, and also value-for-money audits. The audit reports will provide the verified amounts of income and expenditures of this programme. CAFOD should receive the full audit report and management letter.

2. OBJECTIVE OF THE AUDIT

The objectives of the audit project financial statements are:

1. to authorize the external auditors to convey an independent professional opinion on the financial position of Indonesia Tsunami Appeal programme and to ensure that the funds utilized by CRS Indonesia have been used for their intended purpose.
2. to verify that the financial statements are in accord with the program accounts (books of account), which provide the basis for the preparation of the financial statements and are established to reflect the financial transactions in respect of the program maintained by the program implementing entities.

3. SCOPE OF THE AUDIT

This scope of works addresses the requirement for an external audit of financial statements of Indonesia Tsunami Appeal programme funded by CAFOD from the period of 1 April 2019 to 31 March 2020.

The audit subjects are:

1. The financial transaction and consolidated financial statements of Indonesia Tsunami Appeal programme, that include the income and expenditures of CRS.
2. The audit should be carried out following generally accepted either national or International Standards on Auditing (ISA) auditing standards and will include tests and verification procedures as the auditors consider necessary.
3. Sufficient audit evidence should be gathered to substantiate in all material respects the accuracy of financial statements.
4. The information, which is subject to verification by the Auditor, is all information which makes it possible to verify that the expenditures claimed in the consolidated financial statements have occurred and are accurate and eligible according to the established rules and regulations of CRS and donor and only for the purposes for which the funds were provided.
5. Appropriate supporting documents, books of accounts, and records relating to all project’s activities and expenditures have been kept. The books of accounts and the presented financial statements should have clear linkages.
6. The financial statements have been prepared by CRS management in accordance with applicable accounting standards and give a true and fair view of the financial position of the project and its receipts and expenditures for the period ended on the audit period.
7. Comprehensive assessment of the adequacy and effectiveness of overall internal control system and the accounting system to monitor expenditures and other financial transactions.
8. The processes and records on which these documents are based.

External Auditor will have to present the audit report to CRS and provide any clarifications required by CRS. The audit report of the auditors should state if the audit was not in conformity with any of the above and indicate the alternative standards of procedures followed.

4. DELIVERABLES OF EXTERNAL AUDITOR

1. Audit Report

The audit report should obviously indicate the auditor’s opinion. This would include at least the following:

1. The title, addresses, and an opening or introductory paragraph containing: (i) identification of the financial information audited including the period covered; and (ii) statement of the responsibility of the entity’s management and the responsibility of the auditor.
2. A scope and methodology paragraph describing the nature of the audit referencing: (i) the accounting standards that have been applied and indicate the effect of any deviations from those standards; (ii) the audit standards that were applied (ISAs or national standards); and (iii) the work the auditor performed.
3. An opinion paragraph closing containing: (i) whether the financial statements and supporting documents present the cash receipts and expenditures in all material respects and that the funds were used for the purpose defined by the work programme; (ii) whether the financial transactions reflected in the statements are in accordance with financial regulations and procedures, budgetary provisions and other applicable directives; and (iii) summary assessment of the efficiency of the management and internal control system.

In the case of an adverse audit opinion, the auditor should indicate:

1. The influence on the transactions and receipts included in the financial statement;
2. The grant conditions that have not been met; and/or
3. Any unlawful acts identified.

Audit reports will be provided in English.

2. Management Letter

The auditor should submit a letter to the management after the completion of the audit. The topics/issues to be covered in the letter should include:

1. An assessment of the efficiency of the administration, management, and internal control system of CRS.
2. A description of any specific internal control weaknesses noted in financial management. Recommendations to resolve/eliminate the internal control weaknesses noted should be included.
3. Management comments/responses to audit findings and recommendations.

5. TIMELINE OF THE AUDIT

The audit work shall be completed maximum one month from the date of commencement of the audit. A draft audit report should be submitted latest by 31 August 2020 and a final signed audit report with certified statements latest by 10 September 2020 and a management letter latest by 15 September 2020.

6. QUALIFICATION AND INDEPENDENCE OF EXTERNAL AUDITOR

1. The auditor must be completely impartial and independent from all aspects of management of financial interests in the entity being audited.
2. The auditor should not, during the period covered by the audit or during the undertaking of the audit, have any financial or close business relationships with any senior participant in the management of CRS. The auditor should disclose any relationship that might compromise his/her independence.
3. The auditor should be experienced in applying either national or ISA audit standards, whichever is applicable for the audit.
4. The auditor must employ adequate staff with appropriate professional qualifications and suitable experience with auditing standards, including experience in auditing the accounts of entities comparable in size and complexity to CRS.
5. Curriculum vitae should be provided to CRS by the principal of the audit institution who would be responsible for signing the opinion, together with the CVs of managers, supervisors and key personnel proposed as part of the audit team. CVs should include details on audits carried out by the applicable staff, including ongoing assignments indicating capability and capacity to undertake the audit and experience in auditing financial statements.

7. ACCESS TO FACILITIES AND DOCUMENTS

The auditor will have full access at any time to all records and documents such as books of account, legal agreements, minutes of committee meetings, bank records, invoices, contracts, etc.  The auditor will have the right access to banks and depositories, consultants, contractors and other persons or firms engaged by the program management over the period under the audit review.

8. AUDIT FEES

The audit fees will be determined through a competitive bidding process.

9. LOCATION OF SERVICES

The required service of external audit will be rendered at CRS Indonesia Jakarta office at Jl. Cililin II No 4, Kebayoran Baru, Jakarta Selatan

10. PROPOSAL SUBMISSION

Interested Audit Firms are required to submit their complete proposal no later than Friday, 17^th July 2020. The proposal can be sent by postage to the above address or by email to our procurement officer: frederikus.sundoko@crs.org, copy to our Head of Operations: ependi.siahaan@crs.org. Late submission will not be considered for further process.

11. FURTHER INFORMATION

If you need further information in regard with the audits, please send your queries to the above emails.