Financial audit – Mercy Corps Retour vers les opportunités

Purpose of the Audit 

1. CSSF wishes to engage suitable qualified auditors to undertake external audit of the financial statements of LAT implemented by Mercy Corps during the period 2020/2021. The auditors will be contracted to: 

1. Establish whether Mercy Corps project accounts and reports have been prepared in all material respects, in accordance with International Standards on Auditing (ISA) for the project specific financial statements/reports with the project’s accounting principles. 
2. Establish whether CSSF external funds have been used in accordance with the conditions of the relevant financing agreements, with due attention to economy, effectiveness and efficiency, and only for the purposes for which the financing was provided. The relevant financing agreements are: [references to financing agreements to be inserted]; and 
3. Check and express an opinion whether the financial statements of project revenues and expenditure prepared by Mercy Corps during the period under audit are complete and accurate. 

Scope 

1. The audit will be conducted in accordance with the International Standards on Auditing (ISA) and will include, as the auditors consider necessary, tests of transactions and of the existence, ownership and valuation of assets and liabilities. 
2. The auditor will be required to understand the accounting and internal controls (ICs) relevant to the project in order to design audit procedures that are appropriate for the preparation of Mercy Corps project progress reports to CSSF and to establish whether proper accounting records have been maintained. 

Audit Approach 

1. The Auditor shall develop a methodology with detailed procedures to be carried out to address each of the areas: 

1. An adequate budgetary control system is in place to monitor actual expenditure against budget lines on a regular basis and to take sufficient remedial action as necessary, with adequate segregation of duties in the maintenance and review of accounts and the performance of reconciliations; 
2. Expenditure of CSSF funds managed by Mercy Corps has been disbursed and used in accordance with the CSSF Accountable Grant and other relevant agreements, with due attention to economy and efficiency, and only for the purposes for which the funds were provided (confirmation of the amount of funds disbursed and outstanding balances should be provided directly to the auditors by CSSF; 
3. Goods and services financed by CSSF funding have been procured in accordance with the relevant financing agreements and with due regard to agreed procurement best practice; 
4. Inventories and assets registers are complete and accurate and the existence and ownership of assets and stock in regularly verified by physical checks to ensure that they are being used for the intended purposes of the project; 
5. All necessary supporting documents, records, and accounts have been kept in respect of all project ventures including expenditure reports via [INSERT NAMES OF MGT AGENCIES ETC]. Clear linkages should exist between the books of account and reports presented to CSSF. 
6. Financial reports to CSSF give a complete and accurate view of financial support to the project from other partners and donors. 
7. Records of transactions include accurate information regarding any variations in currency exchange rates, where relevant; 
8. Expenditure of project funds has been approved at the correct level of delegated authority. This includes initial approval to incur expenditure and the payment of claims, invoices, salaries, allowances and any other items of expenditure charged to the project budget. 

Audit report 

1. The auditors will be required to report to (CSSF Programme Manager – email)
2. The auditors will produce a draft audit report within XXX days of commencement of the audit. The final report will include management comments on the auditor’s findings and recommendations and will be provided by (10 days after issue of draft auditor’s report).
3. The auditors will give details of locations visited and the relative size of samples tested. The audit report should provide a clear expression of opinion on the financial statements of the LAT project and on compliance with the funding agreement with CSSF. It should also state the basis of the auditor’s opinion. If the auditors give a qualified opinion the factors leading to the qualification should be given. 
4. The project Financial Statement should include: 

1. A summary of sources and Uses of funds showing the sources of CSSF and counterpart funds separately and the uses of funds by disbursement category, both for the current fiscal year and accumulated to date; 
2. A statement for Uses of Funds by Project Activity showing expenditures of the project under each of the main project component and sub-component headings; 
3. A separate note of any ineligible expenditure identified during the audit; 
4. An annex to the Project Financial Statements, the auditors should prepare reconciliation between the amounts shown as received by the project from CSSF and that confirmed as being disbursed by CSSF. As part of that reconciliation, the auditor should indicate the mechanism for the disbursement e.g. direct/indirect reimbursement, direct/indirect expenditures. 

Management Letter 

1. In addition to the audit report, the auditor will prepare a “management letter” by (10 days after draft), in which the auditor will: 

1. Give comments and observations on the accounting records, systems, and controls that were examined during the course of the audit. 
2. Identify specific deficiencies and areas of weakness in systems and controls that were identified in the course of the audit and make recommendations for their improvements; 
3. Report on the accuracy and propriety of expenditure of CSSF funding and the extent to which CSSF can rely on Mercy Corps’ financial reports as a basis for funding disbursements.
4. Report on the degree of compliance with the financing agreement and give comments, if any, on the internal and external matters affecting such compliance; 
5. Report on details of any potential for fraud and corruption in implementation of the project, and provide details of any actual fraud or corruption incidents during the period under audit and the value of possible losses that have been identified in the course of the audit. 
6. Communicate matters that have come to auditors attention during the audit which might have a significant impact on the implementation of the project; and
7. Bring CSSF to the attention of any other matters that the auditors consider pertinent.

Contract Duration 

1. The audit will commence on dd/dd/yy and will end dd/dd/yy.