Terms of reference (tor)


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TERMS OF REFERENCE (TOR)

NATIONAL SOCIAL MARKETING PROGRAMME (NaSoMa)

FOR

EXTERNAL AUDIT





Background



The National Social Marketing Programme (NaSoMa) was established on the recommendations of the Ministry of Health and Social Services (MoHSS) to compliment condom provision, promotion and distribution using social marketing strategies.
NaSoMa was launched in 2000 with the support of the Federal Republic of Germany through KfW until 2009 and strengthen through Global Fund resources since 2005 until August 2012. As from October 2012 Government Republic Of Namibia (GRN) through Miinistry of Health and Social Services (MoHSS) took over funding the organisation
Its mandate is to assist the Ministry in achieving its objectives of making high quality male and female condoms available and accessible as outlined in the National Strategic Framework for HIV and Aids Response in Namibia 2010/11 – 2015/16 (NSF).


Grant

Stage of implementation

Duration

Condom Social Marketing


Phase 1

October 2012-March 2013

Condom Social Marketing

Phase 2

April 2013- March 2014


Condom Social Marketing

Phase 3

April 2014-March 2015

Condom Social Marketing


Phase 4

April 2015-March 2016






































NaSoMa will contract the audit firm to provide the services of external audit. The nature of the contract should be that of a consultancy contract.



Accounting Standards
The applicable standards to be followed for this audit shall be National Accounting Standards taking in to account the provisions of the Agreement between NaSoMa and MoHSS.


Auditor Independence and Qualification

The Auditor must be completely impartial and independent from all aspects of management of any financial interest in NaSoMa. The auditor should not, during the period covered by the audit or during undertaking of the audit, be employed by, serve as director for, or have any financial or close business relationship with any senior participant in the management of the entity.
The auditor needs to demonstrate that they have the requisite experience and qualifications to undertake this assignment. Experience with auditing project/s of similar entities will be an advantage.
Please provide the CVs of the principal who will be responsible for signing the opinion, together with that of Managers, supervisors and key personnel proposed to be part of the audit team. CVs should include details on the audit carried out by the applicable staff, including ongoing assignment indicating capability and capacity to undertake the audit.

Person specification


  • A Registered Accountant in public practice with a thorough knowledge of the principles, procedures and practices of accounting and financial records and transactions;

  • A knowledge of audit procedures, including planning, techniques, test and sampling methods involved in conducting audits;

  • A knowledge of computerised accounting and auditing record keeping systems;

  • An ability to gather, analyse and evaluate facts and to prepare and present concise oral and written reports;

  • An ability to maintain current knowledge of developments related to business matters of interest to internal audit, particularly legislation changes and developments as they affect NGOs, and new auditing techniques and practices;

  • An understanding of and empathy with the development sector;

  • An ability to work unsupervised.


A. Audit Scope

An audit of the funds provided by the MoHSS Global Fund must be performed in accordance with International Standards on Auditing and accordingly include such tests of the accounting records as deemed necessary under the circumstances. The specific objectives of the audit of the MoHSS funds are to:


  • Express an opinion on whether the Financial Statement for NaSoMa program presents fairly, in all material respects, revenues received costs incurred/paid for the period audited in conformity with the terms of the agreement between NaSoMa and MoHSS and generally accepted accounting principles




  • Evaluate and obtain a sufficient understanding of NaSoMa's internal controls, access control risk, and identify reportable conditions, including material internal control weaknesses.




  • Perform tests to determine whether the recipient complied, in all material respects and applicable laws and regulations of the country. All material instances of noncompliance and all illegal acts that have occurred or are likely to have occurred must be identified.




  • Determine if the recipient has taken adequate corrective action on prior audit report recommendations.




  • Determine whether disbursements of funds were supported with documentation, including reconciliations of funds, disbursed, spent and available. The auditors must ensure that all funding received by NaSoMa was appropriately recorded in th accounting records and that those records were periodically reconciled with information provided by MOHSS.


Auditors must design audit steps and procedures in accordance with International Standards on Auditing, to provide reasonable assurance of detecting situations or transactions in which fraud or illegal acts have occurred or are likely to have occurred. If such evidence exists, the auditors must immediately contact the board of NaSoMa and must exercise due professional care in pursuing indications of possible fraud and illegal acts so as not to interfere with potential future investigations or legal proceedings.
Access to Facilities and Documents

NaSoMa use the Pastel Accounting software.



The auditor will have full and complete access at any time to all records and documents (including books of account, legal agreements, minutes of committees meetings, bank records, invoices and contracts etc) and all employees of the entity. In addition the auditor will have the right of access to banks, depositories, consultants, contractors and other persons or firms engaged by programme management.

The audit scope should include review of critical documents and audit procedures as per section A and B (below) respectively. These are not considered all-inclusive or restrictive in nature and do not constitute relief from exercising professional judgement. The steps must be modified to fit local conditions and specific program design, implementation procedures, and agreement provisions, which may vary from program to program.


A. Critical documents
Following is a list of documents applicable to NaSoMa. The auditor must review the applicable documents considered necessary to perform the audit:


  1. The agreement between NaSoMa and the MoHSS.



  1. Contracts and subcontracts with third parties, if any.




  1. NaSoMa Employment Manual




  1. The budgets, implementation letters, Performance Framework, and written procedures approved by MOHSS.




  1. All program financial and progress reports; and charts of accounts, organizational charts; accounting systems descriptions; procurement policies and procedures; and receipt, warehousing and distribution procedures for materials, as necessary to successfully complete the required work.


B. Audit procedures



  1. Review general and program ledgers to determine whether costs incurred were properly recorded. Reconcile costs billed to, and reimbursed by, MOHSS and other principal recipients to the program and general ledgers.

  2. Review the procedures used to control the funds, including their channelling to contracted financial institutions or other implementing entities. Review the bank accounts and the controls on those bank accounts. Perform positive confirmation of balances, as necessary.

  3. Determine whether advances of funds were justified with documentation, including reconciliations of funds advanced, disbursed, and available. The auditors must ensure that all funding received by NaSoMa was appropriately recorded in the accounting records and that those records were periodically reconciled with information provided by MOHSS.

  4. Review procurement procedures to determine whether sound commercial practices including competition were used, reasonable prices were obtained, and adequate controls were in place over the qualities and quantities received.

  5. Review expenditure paid is reasonable, in accordance with budget approved by MoHSS and are supported by appropriate supporting documentation.

  6. Review commodities (e.g., supplies, materials, vehicles, equipment, food products, tools, etc.) procured by the recipient. The auditors must determine whether commodities exist or were used for their intended purposes in accordance with the terms of the agreements, and whether control procedures exist and have been placed in operation to adequately safeguard the commodities.

  7. Assess the extent of compliance with accounting policies in place as well as the provisions of the agreement between NaSoMa and MoHSS.

  8. For final closeout audits, review unliquidated advances to the recipient and pending reimbursements by MOHSS. Ensure that NaSoMa has returned any excess cash to MOHSS. Also, ensure that all assets (inventories, fixed assets, commodities, etc.) procured with program funds were disposed of in accordance with the terms of the agreements.


Audit period
The first audit will cover the period October 2012 to March 2013 and

April 2013 to March 2014.
Second audit will cover April 2014 to March 2015.
Each year the audit is expected to commence by the beginning of May following the audit period and the final report should be submitted by 30 September of year following the audit period.

Audit opinion



The Auditor should issue an audit opinion based on the work done and this should include at least the following:

  • The accounting standards that have been applied and indicate the effect of any deviation from those standards;

  • That the audit was conducted in accordance with international standards on auditing;

  • Period covered by the opinion;

  • Whether the financial statements and supporting schedules fairly present the cash receipts and expenditure for the programme and that funds were used for the purposes defined by the funding agreement.


Reporting

The External Auditor must submit audited financial statements to NaSoMa and the Auditor maybe called upon to give oral presentations to the board.

Copies of the financial statement will also be made available to the MoHSS. These entities will rely on the Auditors report in carrying out their other functions.

Management letter

The Auditor will be required to issue a management letter at the completion of the audit. The management letter must identify the observation, risks identified and offer practical recommendations which should be capable of eliminating or reducing the risks identified.
It should also outline the advantages to be derived from implementing the recommendations and should be stated from both a financial and non-financial perspective.
The response of NaSoMa is required to unequivocally state the extent to which they agree or disagree with the finding indicated above. This should extend further to whether they agree or disagree with all the other elements to the management letter. These should include reasons for the agreement or disagreement.
Fee
A detailed quotation for the audit fee should be provided with fees breakdown showing the level of staff, time to be allocated to the assignment and charge-out rate. For the subsequent years the quote should indicate the basis for future price increases.
Duration
The contract will be valid for a period of two years; 2014 and 2015.
SIGNATURES:

On behalf of NaSoMa

Full Name: ____________________________
Capacity: ____________________________
Signature & Date: ______________________
On behalf of auditing firm

Full Name: ____________________________
Capacity: ____________________________
Signature & Date: ______________________


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