Terms of Reference for External Audit Services

***** ETHICAL AND BUSINESS CONDUCT REQUIREMENTS *****

SNV is committed to integrity in procurement, and only selects suppliers based on objective business criteria such as price and technical merit.

SNV does not tolerate fraud, collusion among offerors, falsified proposals/bids, bribery, or kickbacks. Any firm or individual violating these standards will be disqualified from this procurement, barred from future procurement opportunities, and may be reported to both the Office of the Inspector General.

Employees and agents of SNV are strictly prohibited from asking for or accepting any money, fee, commission, credit, gift, gratuity, object of value or compensation from current or potential vendors or suppliers in exchange for or as a reward for business. Employees and agents engaging in this conduct are subject to termination and will be reported to the Office of the Inspector General. In addition, SNV will inform the Office of the Inspector General of any supplier offers of money, fee, commission, credit, gift, gratuity, object of value, or compensation to obtain business.

Offerors responding to this ToR must include the following as part of the proposal submission:

• Disclose any close, familial, or financial relationships with SNV or project staff. For example, if an offeror’s cousin is employed by the project, the offeror must state this.
• Disclose any family or financial relationship with other offerors submitting proposals. For example, if the offeror’s father owns a company that is submitting another proposal, the offeror must state this.
• Certify that the prices in the offer have been arrived at independently, without any consultation, communication, or agreement with any other offeror or competitor for the purpose of restricting competition.
• Certify that all information in the proposal and all supporting documentation are authentic and accurate.
• Certify understanding and agreement to SNV’ prohibitions against fraud, bribery and kickbacks.        

Background

SNV the Netherlands Development Organization is a global development partner working in more than 25 countries in Asia and Africa. In Rwanda, SNV has been working for more than 30 years to improve people’s livelihoods by strengthening the capacities of public and private sector organizations and catalyzing partnerships. It does so by helping to realize the national development goals in three sectors: Agri-Food; Renewable Energy; and Water. SNV supports development in these sectors by working with the government, civil society, and private sector organizations.

The Regenerative Agricultural practices for improved Livelihoods and Markets (REALMS) project is a four-year project aims to improve the livelihoods of smallholder farmers in Western Rwanda (Rubavu, Nyabihu, Ngororero and Rutsiro districts) through creating conditions for the adoption of regenerative agricultural practices by a minimum of 5,000 direct farmers and 15,000 indirect farmers from the four districts. 

The project area is characterized by high population growth and increased demand for food, increasingly degraded lands, fragile landscapes and weakened livelihoods. REALMS project will tackle these challenges by creating the appropriate conditions for the adoption of regenerative agricultural practices by smallholders. It will address the drivers behind the degradation of natural resources and incomes linked to unsustainable practices and promote concrete regenerative methods that will be beneficial for smallholder farmers, service providers (SMEs) and the community, and influence an enabling environment that supports these changes at both national and sub-national systems level.

1.1 Responsibilities of the Parties to the Engagement

Recipient refers to SNV IMPACT THAT MATTERS that has signed the

Agreement with the Contracting Authority/Donor.

 SNV is responsible for providing a Financial Statements for the REALMS project financed by the Donor and for ensuring that these Financial Statements can be properly reconciled to SNV IMPACT THAT MATTERS records and accounts in respect of the project tasks.

 The SNV accepts that the ability of the Auditor to perform the procedures required by this engagement effectively depends upon recipient providing full and free access to its staff and records and accounts. 

 The SNV shall provide the auditors with all the necessary documentation to perform the assignment properly; in particular the following information shall be provided to the auditors before the beginning of the assignment:

1. Project Agreement.
2. Annual Progress Report.
3. Project Implementation Manual
4. Organizational charts along with names and titles of senior managers.
5. Names of officers responsible for Project management and financial management of the project.
6. Description of information technology facilities and computer-based accounting systems in use. 

‘The Auditor’ refers to the Auditor who is responsible for performing the agreed-upon

procedures as specified in these ToRs, and for submitting a report of factual findings to SNV. 

The Auditor shall provide: 

 A separate opinion on Project Financial Statements (PFS) Minimum content of the PFS: 

1. Yearly and cumulative statements of sources and application of funds, which should disclose separately STICHTING IKEA FOUNDATION’s funds, other donor funds and beneficiaries funds;
2. Statement of sources and application of funds.
3. Yearly and cumulative SOEs (Statement of Expenditures) by Fund requests and category of expenditures.
4. Reconciliation between the amounts shown as received by the project and those shown as being disbursed by STICHTING IKEA FOUNDATION should be attached as an annex to the PFS.As part of that reconciliation the auditor will indicate the procedure used for Funds request (Special Accounts (SA), letters of credit, special commitments, reimbursement or direct payment) and indicate whether the expenditure is fully documented or uses the Summary of Expenditures format.
5. Notes accompanying the financial statements
6. Cumulative status of funds.
7. A statement of comparison between the actual expenditures and the budget estimates
8. Full disclosure of cash balances.
9. other statements or disclosures relevant to the project e.g. financial monitoring reports, credit lines etc. 

 A separate opinion on the Statement of expenditures / Summary of Expenditures (SOEs); the audit will include a review of SOEs used as the basis for submitting funds requests.

Where ineligible expenditures are identified as having been included in Financial Statements and reimbursed, auditors will note these separately. 

The auditor’s opinion should deal with the adequacy of the procedures used by the project for preparing SOEs and should include a statement that amounts used by the Recipient on the REALMS project account on the basis of such SOEs were used for the purposes intended under the agreement. 

 A separate management letter addressing the adequacy of the accounting and internal control systems of the Program, including compliance with STICHTING IKEA FOUNDATION’s Procurement Guidelines and such other matters as STICHTING IKEA FOUNDATION may notify SNV to include in the audit.

The auditor is requested to:

1. Comment on economy, efficiency and effectiveness in the use of project resources;
2. Comment on achievement of planned project results;
3. Comment on legal and financial obligations and commitments of the project and the extent of compliance or non-compliance there of;
4. Comment on systems and procedures such as improvements in accounting, information technology or computer systems, and operations that may be under development, on which the auditor’s comments are necessary to ensure effective controls;
5. Comment on other activities on which an auditor may consider it appropriate to report 

 Auditors shall certify: 

1. Whether the PFS are drawn up in conformity with international accepted accounting standards (IFRS)
2. Whether the PFS are accurate and are drawn up from the books of accounts maintained by the Project.
3. Whether the provisions of the Project Agreement are adhered to.
4. Whether Procurement has been undertaken by the Project in accordance with the relevant Articles of the Project Agreement, STICHTING IKEA FOUNDATION’s Procurement Guidelines
5. Carry out a physical verification of any significant assets purchased and confirm their existence and use for project purposes.
6. Whether the project has an effective system of financial supervision or internal audit at all levels.
7. Whether the expenditure claimed through SOEs are properly approved, classified and supported by adequate documentation.
8. The Auditor is a member of the International Federation of Accountants (IFAC). 

1.2 Subject of the Engagement 

The subject of this engagement is the financial statements of the period; 1st November 2022 to 31st October 2023, for the STICHTING IKEA FOUNDATION Funds. The information, both financial and non-financial, which is subject to verification by the Auditor, is all information which makes it possible to verify that the expenditures claimed by SNV in Financial statements have occurred, are accurate and eligible. 

1.3 Reason for the Engagement 

The SNV is required to submit to the Donor an Audit report produced by an external auditor. 

1.4 Engagement Type and Objective 

This constitutes an engagement to perform specific agreed-upon procedures following the STICHTING IKEA FOUNDATION Guidelines on Project Audits provided to the Auditors by SNV. The objective of this audit is for the Auditor to verify that the expenditures claimed SNV in the financial statements for the tasks covered by the Agreement have occurred (‘reality’), are accurate (‘exact’) and eligible and to submit to SNV a report of factual findings with regard to the agreed-upon procedures performed. 

Eligibility means that expenditure have been incurred in accordance with the terms and conditions of the Agreement. 

1.5 Scope of Work 

1.5.1 The Auditor shall undertake this engagement in accordance with these Terms of Reference and: 

• In accordance with the International Standards on Audit (ISA) to perform Agreed-upon Procedures regarding Financial Information as promulgated by the IFAC;
• In compliance with the Code of Ethics for Professional Accountants issued by the IFAC. Although ISRS 4400 provides that independence is not a requirement for agreed-upon procedures engagements, the Donor requires that the auditor also complies with the independence requirements of the Code of Ethics for Professional Accountants.
• In accordance with International Standards on Auditing and in line with STICHTING IKEA FOUNDATION’s Guidelines as per the Agreement. 

1.5.2 The Terms and Conditions of the Agreement 

The Auditor verifies that the funds provided by the Donor were spent in accordance with the terms and conditions of the Agreement. 

1.5.3 Planning, procedures, documentation and evidence. 

The Auditor should plan the work so that effective audit can be performed. For this purpose, he/she performs the procedures specified the STICHTING IKEA FOUNDATION Guidelines on Project Audits as per the Agreement and he uses the evidence obtained from these procedures as the basis for the report of factual findings.

The Auditor should document matters which are important in providing evidence to support the report of factual findings, and evidence that the work was carried out in accordance with ISA and these ToR. 

1.5.4. Site of Audit.

The Audit for both countries (Kenya and Rwanda) will be carried out at SNV country office in Kigali-Rwanda. 

1.6 Reporting 

The report on this audit should describe the purpose and the agreed-upon procedures of the engagement in sufficient detail in order to enable SNV  and STICHTING IKEA FOUNDATION to understand the nature and extent of the procedures performed by the Auditor. 

1.6.1 Periods covered 

The reports on this audit should cover the following:

a) STICHTING IKEA FOUNDATION Funds for the period; 01st November 2022 to 31^st October 2023 

Reports covering items a must be delivered no later than 15 calendar days as of the date of

signing the agreement. 

1.6.2 Audit Reporting

The report should be presented in English (language). An executive summary of the audit report in English (language) should be provided along with the report.]

Audit findings and recommendations

All audit findings and recommendations should be reported in a separate management letter. The auditor should explicitly state and specify results (satisfactory and unsatisfactory) of specific procedures for obtaining audit evidence in case of doubt or uncertainty with regard to the eligibility of expenditure in the report. The management letter should include all financial findings made by the auditor regardless of the amount involved.

The management letter should provide at a minimum the following information:

a. A general review of project progress and timeliness in relation to progress milestones and the planned completion date, both of which should be stated in the project document.

This is not intended to address whether there has been compliance with specific covenants relating to specific performance criteria or outputs. However, general compliance with

broad covenants such as implementing the project with economy and efficiency might be commented upon, but not with the legal force of an audit opinion.

b. An assessment of the project’s internal control system with equal emphasis on (i) the effectiveness of the system in providing the project management with useful and timely information for the proper management of the funds and (ii) the general effectiveness of the internal control system in protecting the assets and resources of the project.

c. A description of any specific internal control weaknesses noted in the financial management of the project and the audit procedures followed to address or compensate for the weaknesses. Recommendations to resolve/eliminate the internal control weaknesses noted should be included.

The management letter should also include the following:

d. The categorization of audit findings by risk severity: high, medium, or low. Definitions of these categories are given in Annex 2.

e. The classification of possible causes of the audit findings. Definitions of these causes are given in Annex 3.

f. Management comments/response (SNV IMPACT THAT MATTERS) as applicable).

1.6.3. Selection Criteria

1.6.4: Bid Proposal Submission

Interested bidders MUST submit complete quotation together with the filled Data Protection Declaration form and send through an email to rwandaprocurement@snv.org  by January 26, 2024, at 17:00 Hours, Kigali Time.

Recommendations for Improvement

Recommendations should be directed to a specific entity so there is no confusion regarding who is responsible for implementation. The response of the entity should be included in the management letter, immediately following the recommendation.  

Working at SNV  

SNV is a great place to work and prides itself on its comprehensive benefits package.  We offer competitive salaries and a dynamic inclusive work environment. 

SNV is proud to be an equal opportunity employer.  All qualified applicants will receive consideration for employment without regard to race, color, religion, sex, sexual orientation, gender identity, national origin, disability status, protected veteran status, or any other characteristic protected by law, and requires affirmative action to ensure equality of opportunity in all aspects of employment.  This is also to include inquiry about, disclosing, or discussing their compensation or the compensation of other applicants or employees.

SNV offers a challenging work environment, opportunities to lead and innovate, and a commitment to growing your skills in a fulfilling and diverse working environment. Our staff benefit from, and contribute to, an internal and global network of experts. 

For more information on SNV, please refer to our website: www.snv.org 

Vetting 

SNV carries out rigorous background and reference checks concerning possible safeguarding incidents for all candidates applying for International determined positions. As SNV participates in the Inter-Agency Misconduct Disclosure Scheme, all reference checks include a request to past employers to fill in a questionnaire regarding Misconduct (sexual exploitation, sexual abuse, or sexual harassment), the “Statement of Conduct". This Statement of Conduct adopts the definitions used in the Scheme.  

Data Protection assurance

SNV will not retain your Personal Data for longer than is allowed by law or is necessary for the Purposes. 

If you are selected and offered employment, the Personal Data you have provided will be used by SNV for the purpose of this bidding administration. If you are unsuccessful on this occasion to secure tender with SNV, SNV will retain your Personal Data for required period for the purpose of any future internal or external audit.