Scope

The audit will be carried out in accordance with international standards of auditing. It will include such tests of transactions and of the existence, ownership and valuation of assets and liabilities: The audit will cover the following:

• Express an opinion on whether the execution of the Organization’s activities complies with the rules and conditions governing the use of funds as expressed or referred in the organization’s Financing/Grant Agreements.
• Examining on test basis evidence supporting the amounts and disclosures in the expenditure statements.
• Reconcile funds received by each country with the corresponding lists supplied by the Headquarters
• Verify the application of administrative procedures relative to various transactions such as payroll, procurement etc.
• Consideration of internal controls over financial reporting as a basis of determining audit procedures that are appropriate
• Determine whether the statement of expenditure presents fairly, in all material aspects,
  the Organization’s costs incurred during the year under review.
• Confirm necessary supporting documents, records and accounts have been kept in respect of programme expenditure.
• To verify the physical existence of HI EAR programme assets as in the asset register, their conditions and locations.
• Express an opinion whether the submitted final financial report is correct and gives a true and fair view of the activities of the Organization in accordance with Internationally Accepted Accounting Standards.
• Recommend whether improvements to HI EAR systems, procedures and controls can be made as a result of the findings of this audit.
• Verify if improvements recommended in prior audits have been implemented

Methodology

The approach should include but not be limited to:

• Hold separate pre-engagement meetings with the organization to present an outline of the planned approach for conducting the exercise.
• Request and hold formal interviews with the HI programme and financial management team with a view to forming an understanding on the effectiveness of the internal control system in the management of the project.
• Review and vet invoices for fees and reimbursable expenses by the organization and ascertain that:
• Deliverables from short- and long-term consultancies were properly delivered and received before relevant costs were charged to respective donors
• Review and vet bills paid for services rendered by partners and ascertain that:
• Services billed in the period under review are covered in the relevant sub-contracts.
• Contractually agreed deliverables have been achieved and approved by appropriate
  authority within the organization.
• Review the procurement process and procedures for all short-term contracts for the period under review and ascertain that:
• Transparent and open systems are in place to ensure negotiations for contracts (services, works and printing) are competitive and represent good value for money.
• Review the structure of HI EAR and ascertain that job functions are clearly defined and that no overlaps exist.
• Express an opinion on the cost effectiveness, accuracy and completeness
  (i.e. value for money) of the financial transactions for the period under review.
• Ensure continuity in the approach even if there is change in the engagement team from
  the prior year
• Carry out the audit in the respective country offices of the EAR program

Deliverables

The expected deliverables from the consulting firm are:

• Audited financial report (hard and soft copies) for the period noted per country.
• A management letter per country, which should highlight observed weaknesses in the system of internal control and the recommendations for managing the identified issues over the life of the programme.
• One consolidated management letter for EAR program
• Presentation of audit report and management letter to SMT (Senior Management Team) after every assignment
• A verification report on programme assets per country.