- FUNDAMENTAL PRINCIPLES
1.1 These Terms of Reference (TOR) define the mandate of the auditor in connection with the financial review of project “Education and Psycho-social support for children in Northern Aleppo (020_001915)” implemented by Islamic Relief Turkey (The Organization), funded by Islamic Relief Sweden with funding sourced by Swedish television through their foundation “Radiohjalpen” (The donor).
The financial review will be based on the professional requirements and guidelines governing the professional work to be undertaken by an auditor in relation to an agreed upon procedure engagement as per International Standard on Related Services 4400.
1.2 The Organizational Structure
Islamic Relief Turkey is headed by a Head of Mission as the officer-in-charge with support staffs that include Head of Programs, Finance Manager, HR / Admin Manager and Procurement and Logistic Coordinator, based at support office in Gaziantep. The organization’s representative office is based in Istanbul, Turkey.
1.3 In planning, conducting and reporting on the financial review, the auditor shall be given due considerations to the auditing and other standards promulgated by International Auditing and Assurance Standards Board (IAASB), In addition, the relevant standards of the Local accounting professional bodies as well as the local legislation on accounting and reporting in force in the country will be taken into consideration by the auditor.
- OVERALL PRINCIPLES OF THE FINANCIAL REVIEW
The auditor is required to plan, execute and report on the financial review engagement in order to form a professional judgment on the following matters relating to the activities and the organization:
2.1 Verify that the final reporting has been done in accordance with the existing agreement. If this is the case, please state this.
2.2 Verify whether implementation and reporting has been done in accordance with the time frames agreed with the donor. If this is the case, please state this, otherwise specify deviations.
2.3 Verify that there is an agreement between IRSWE and any other implementing party and that this agreement has been established in accordance with the instructions in agreement with the donor. If this is the case, please state this, otherwise specify deviations.
2.4 Verify whether the budget provided in the financial report has been approved by the donor. If this is the case, please state this. Please specify deviations (if any) from the approved budget.
2.5 Verify that all budget deviations, per budget item, exceeding 10% of the total budget have been
commented upon in final report and that approval for these deviations has been received from the donor. Please state all cases (if any) where this has not been the case.
2.6 Verify that the financial report is in accordance with the Organization’s book-keeping and with
reporting from other implementing parties (if any). If this is the case, please state this, otherwise specify deviations.
2.7 Verify and assess whether calculations underpinning the financial report are correct and based on reasonable assumptions.
2.8 Verify that the financial report includes information on accrued interest with regard to the funds
obtained from the donor and specifies whether the closing balance contains any unused funds. If this is the case, please state the exact amount and specify whether the funds have been returned to the donor.
2.9 Verify that costs labeled as “administrative costs” and “overhead” in the financial report are in
agreement with the percentage stated in the agreement with the donor. If this is the case, please state this, otherwise specify deviations.
2.10 Assess whether there are material weaknesses in the Organization’s internal control regarding the financial reporting. “Material” in this respect refers to weaknesses that normally would be reported in a management letter to the Board of Directors of the Organization.
- DOCUMENTS OF REFERENCE
The following documents and matters are to be considered by the auditor as basic references for performing the financial review:
- Project agreement (IRSWE PROJ. CODE: M-SYR11601); and
- Annexures as mentioned in the agreement.
3.1 Project Background
The protracted nature of the Syria crisis has weakened the capacity of the education system to address the education needs of affected children in the country. During the emergency millions of people displaced from their areas of origin and are bound to stay in camps to get the supoort from humaniatrian actors working in the area. There livelihoods are completly destroyed and not in a position to have safe and secure access to schools for their children. Very few possibilities are there to continue the schooling of children due to current emergency situation in the country. The children are really traumtised and most of them are out of school. That children are traumatised also means that many children are in need of pscycho-social support. Islamic Relief team in the field assessed the need of education in the IDP camps. It is important to provide the opportunity to children to join the child friendly spaces and have better access to educational as well as recreational activities.
IR proposed project will be implemented in Dhahiet Shemerin camp in Azaz sub district of Allepo governorate and will target 300 conflict-affected children (IDPs), 6 teachers (IDPs) and 1 physcial trainer (IDP). A Child Friendly Space (CFS) will be established, containing three classrooms in containers, washrooms and playing area. Local teachers, who are also IDPs from the camp, will be recruited to provide education to children, and a physical trainer is going to conduct recreational – and outdoor activities for the children. The enrolled children will also get an opportunity to participate in psycho-social counselling sessions conducted by teachers and the physical trainer. In addition hygiene awareness sessions are going to be held for the children. School bags, books, uniforms and basic food packs will be provided to all the children in the CFS.
Following the Specific objectives intervention
- Establishment of child friendly space to provide safe, healthy and conducive environment to the children to continue their educational as well as recreational activities.
- Deliver the quality education through qualified teachers and Physical trainer.
following are the brief of this project:
|Project Name||Education and Psycho-social support for children in Northern Aleppo|
|Funded By||Islamic Relief Sweden with funded secured from Swedish Television through their foundation – Radiohjalpen|
|Project Budget||SEK 1,555,500|
|Project Duration||May 01, 2016 to Feb 28, 2017 (10 months)|
- PLANNING THE FINANCIAL REVIEW
The auditor shall adequately plan the financial review engagement well in advance of the work and ensure the execution of the financial review of highest professional quality in an economical and efficient manner and within the agreed timetable.
On the basis of the information received during the planning phase, including his review risk assessment, the auditor shall determine:
- The type of transactions to be reviewed and the review method (full or random sample);
- The type of physical verifications and the sites to be selected;
- The number of site visits to be planned.
The auditor undertakes to ensure continuity in the review approach of the financial review engagement and the review team, even if there is a change in the leader of the review team from the prior year.
- 5. PLACE OF FINANCIAL REVIEW
The financial review is to be carried out within the project environment (administrative offices and / or decentralized sites, if applicable).
- Detailed financial review procedures
Appropriate review procedures are to be applied by the auditor in order to form a professional judgement on the matters outlined below. These procedures applied, either on a full scope or random basis may include:
Controls, checking, evaluation, inspection, interview, analysis and other review techniques. When selecting the review procedures, the auditor shall give consideration to the results of his review risk assessment (during planning stage and during the course of the review work).
Accordingly, he must define and carry out suitable review tasks in order to obtain an overview of the aforementioned aspects before he assesses the individual findings and reaches a final independent decision on the review.
The auditor is expected to select and apply any other review procedures that he may consider necessary in the professional execution of the financial review engagement.
- Findings and recommendations
In his financial review report, the auditor is expected to
- Explain and quantify any adjusting and/or reclassification entries, and to
- Formulate recommendations for the improvement of the internal control system (ICS) as well as of project and accounting procedures
- CLOSING MEETING
After the completion of the financial review engagement, but before leaving the project or the premises of the partner, the auditor shall hold a closing meeting with the persons responsible for the project/program (directors) and the staff responsible for accounting and reporting. The meeting shall address the results of the project review, discuss major weaknesses in the project, administrative and financial management (including the deficiencies of individual staff members) and propose recommendations to improve the project management, the accounting procedures and the internal control system.
- FINANCIAL REVIEW REPORT
9.1. Format of the Report
The review report of the auditor shall explicitly be responsive to the overall principles applicable to the review engagement.
We expect the report as per the below template prescribed by ISRS 4400 for Engagement to perform Agreed-upon Procedures regarding financial information:
REPORT OF FACTUAL FINDINGS
We have performed the agreed-upon procedures as specified below concerning the enclosed financial
report to The <ABC> concerning project number <XYZ>, for the time period XYZ to XYZ showing total expenditure of SEK XX. Our engagement was performed in accordance with the International Standard on Related Services applicable to agreed-upon procedures engagements, ISRS 4400. The procedures were performed solely to assist you in your commitment towards donor regarding the provision of a report on how funds from donor have been used and are summarised as follows:
- We have verified that reporting in accordance with the agreement with Radiohjälpen has been done on the correct templates provided by the donor.
- We have verified that the project has been implemented and reported in accordance with the time frames agreed on with the donor.
- We have verified that there is an agreement between ORG and any other implementing party and that this agreement has been established in accordance with the instructions in Organization’s agreement with the donor.
- We have verified that the budget provided in the financial report has been approved by the donor.
- We have verified that all budget deviations, per budget item, exceeding 10% of the total budget have been commented upon in organization’s final report and that approval for these deviations has been received from the donor.
- We have verified that the financial report is in accordance with the organisation’s book-keeping and with reporting from other implementing parties (if any).
- We have verified that any calculations underpinning the financial report are correct and based on reasonable assumptions.
- We have verified that the financial report includes information on accrued interest with regard to the funds obtained from donor and specifies whether the closing balance contains any unused funds from donor.
- We have verified that costs labeled as ”administrative costs” and ”overhead” in the financial report are in agreement with the percentage stated in the agreement between Organization and donor.
- We have assessed whether there are material weaknesses in Organization’s internal control regarding the financial reporting.
- We have verified that a local audit, in compliance with ORG’s agreement with donor, has been performed in all cases where funds have been transferred to another implementing party.
- We have highlighted significant findings from the report done by the local auditor.
9.2. Currency and language of the financial review report
The financial information contained in the financial review report of the auditor is to be expressed in the currency provided for in the contract. The financial review report of the auditor and all other documents resulting from the financial review engagement must be in English.
The financial review report is to be signed by a representative of the auditor as well as by the leader of the review team.
Place and date of Signatures:
- THE SCHEDULE
Financial review period of the project will be since inception to project’s end as mentioned in the below table
|Project Name||Education and Psycho-social support for children in Northern Aleppo (020_001915)|
|Project Period||May 01, 2016 – February 28, 2017|
|Last date for submission of proposal||May 29, 2017|
|Final selection of firm and awarding of audit contract||By one week of closing date of proposal submission|
|Start of audit field work||Within one week of contract signing|
|Draft financial statements available for audit||Upon deployment of audit team|
|Completion of audit field work and Discussion of audit observations||By two weeks of audit team deployment|
|Initial draft project financials and report||By one week of field work completion|
|Sign off to final report by auditors||By one week of receipt of initial draft financials|
|Office Address:||Gazimuhtar Paşa Mücahitler Mah. 9 Nolu Cadde No:14 Mehmet Karagülle İş Merkezi Kat:11 No:96 Şehitkamil / GAZİANTEP, TURKEY|
|e-mail Address :||Syria.Tenders@irworldwide.org|
- THE TENDER PROPOSAL
Please provide the following information in the proposal, in the order identified in this section.
i) Details of your firm
Your proposal should:
- Outline your structure, size and capabilities as relevant to us
- Identify your firm’s major NGO clients
- Describe your engagement philosophy and methods
- Provide two references of other NGO’s that are your clients that can be taken up as required
Your proposal should identify:
- The partner and manager who will be assigned to the assignment, including details of their relevant experience and qualifications
- The time which the partner and manager (engaged on this assignment) will devote to this assignment
- How you manage succession planning and staff continuity
iii) Audit approach
Your proposal should identify how you:
- Determine engagement strategy and undertake planning
- Address matters of engagement scope and materiality
- Identify and respond to critical engagement issues
- Control and co-ordinate the engagement process
- Ensure appropriate responsibility for decisions on the engagement
- Conduct the reporting arrangements
- Your proposal should include estimate of your engagement fee for this project in Turkish Lira (TRY);
- In addition, your proposal must provide:
- An analysis of hours by grade of staff that will be involved on the similar assignments together with details of your hourly charge out rates
- The basis of charging expenses
- Your proposed billing schedule