TERMS OF REFERENCE FOR SOMALI NGO CONSORTIUM PROJECTS AUDIT  – Somalia/Somaliland

TERMS OF REFERENCE FOR SOMALI NGO CONSORTIUM PROJECTS AUDIT 

Background Information

CARE International in Somalia has been providing development and lifesaving assistance across all regions of Somalia since 1981. Our programs go beyond meeting basic needs at the onset of an emergency to helping affected communities recover, rebuild their lives and become more resilient. In order to strengthen communities to better cope with future disasters and address persistent poverty and vulnerability, we are implementing a variety of longer-term development activities aimed at addressing the underlying causes of poverty in Somalia. Our development programs support marginalized women and youth through innovative projects in education, water and sanitation, sustainable environmental management, civil society development, peacebuilding and governance and small-scale enterprise development. CARE works in partnership with Somali and international NGOs, civil society leaders, universities, the private sector and local authorities in order to bring effective and lasting change to the most vulnerable communities.

The Somalia NGO Consortium (SNC) was first established in 1999 as a network of non-governmental organisations (NGOs) working together to improve   international aid coordination   and   raise the presence and profile of NGO representation within the aid coordination structure for Somalia. Since inception, the Somalia NGO Consortium has grown as an effective network, actively supporting its members to promote dialogue, collaboration, learning experiences, information exchange and to advocate on issues of key concern.

Currently, the Consortium is the primary NGO coordination and representation mechanism, with a membership of 85 national and international NGOs working in all parts of Somalia/Somaliland, around humanitarian, development, peacebuilding, health, education among other thematic areas. Governed by a Steering Committee elected by the membership, the SNC provides a platform for information­ sharing and representation to governments, UN agencies, donor groups and multilateral organisations at local,   national and   international   levels. The   Consortium   has offices   and   representation   in Mogadishu, Hargeisa, Garowe and Nairobi and plans to expand its reach to constituencies in the remaining federal states through extensive outreach work from the current offices.

The SNC is currently co-funded through Swiss Development Cooperation (SOC), Somalia Humanitarian Fund   (SHF), OFDA (USAID), BMZ (German Development Ministry), Sweden, Eu Novice, Oxfam and membership subscription fees. Legal and contractual responsibilities associated with funding and contracting are held by host agencies 1, as SNC is not a legally constituted entity, but rather a network of its membership

       Summary of the project

FINANCIAL AUDIT  

The Financial Information of the project/program shall be audited in accordance with International Standards on Auditing (ISA 805) “Special Considerations Audits of Single Financial Statements and Specific Elements, Accounts or Items of a Financial Statement”.

1. Fundamental principles

1.1 The financial audit of projects (“financial audit”) is to be carried out by an independent auditor (“the auditor”), having the required professional competence and experience (e.g. Certification by National Audit Oversight Authority), and in accordance with International Standards on Auditing (ISA).

1.2 These Terms of Reference (“TOR”) define the mandate of the auditor in connection with the financial audit of projects/programs of the partner, financed by the Federal Department of Foreign Affairs (FDFA). The financial audit is based on the professional requirements and guidelines governing the professional work to be undertaken by an auditor.

1.3 In planning, conducting and reporting on the financial audit, the auditor has to follow the ISA 805.

In addition, the relevant standards of the local accounting profession as well as the local legislation on accounting and reporting in force in the country in which the financial audit is carried out need to be taken into consideration by the auditor.

2. Overall principles of the procedures to be performed

The auditor is required to plan, execute and report on the financial audit engagement in order to conclude on the following matter:

• 2.1 Principles of orderliness (financial regularity/reporting)

Furthermore, the auditor is required to assess whether the partner has adequate policies and procedures in place relating to the following matters (those matters are not covered by the audit engagement in accordance with ISA as mentioned above):

• 2.2 Existence, adequacy and effectiveness of the Internal Control System (ICS)

• 2.3 Conformity with the project objectives and adherence to the contract conditions

• 2.4 Economical conduct of business and effective use of financial resources

In order to respect these principles, the auditor has to analyse the questions mentioned in the annexed Questionnaire (Annex 1).While item 2.1 will be reflected in the audit report prepared in accordance with ISA, items 2.2 to 2.4 will be reflected by the answers of the auditor to the Questionnaire in the Annex 1. Recommendations to the management shall be formulated according to Annex 2 (Management Letter).

3. Documents of reference

The following documents and matters are to be considered by the auditor as basic references for performing the financial audit:

TERMS-OF-REFERENCE-FOR-SOMALI-NGO-CONSORTIUM-PROJECTS-AUDIT-SomaliaSomaliland