Independent Financial Audit of Handicap International Federation East Africa Region (EAR)-Kenya, Uganda and Rwanda

1. Introduction

1.1. Background summary

HI is an independent and impartial aid organization working in situations of poverty and exclusion, conflict and disaster. We work alongside people with disabilities and vulnerable populations, acting and bearing witness in order to respond to their essential needs, improve their living conditions and promote respect for their dignity and fundamental rights. HI EAR programmes are funded by European commission, DFID, Centre for disease control, United States bureau of population refugee and migration and many others.

HI EAR programme has an estimated total annual budget of Euro 10,582,005 for the year ended on 31 December 2023.HI is seeking an external audit company to carry out a comprehensive audit for the EAR Programme. The audit will cover Kenya, Uganda and Rwanda separately (in line with the country regulations) then a consolidated account for the HI EAR for each year for a period of three years; from January 2024 to December 2026.

The firm must be accredited by the relevant authority in each of the countries.

1.2. Audit Objective
The objective of the audit of the Financial Statements is to enable the auditor to express a professional opinion on the financial position of the organization at the end of the reporting period and of the funds received and expenditures for the reporting period, as reported by the HI EAR Programme and in particular to confirm that the reported expenditure has, in all material respects, been used in conformity with the provisions of the International Public Sector Accounting Standards.
To also confirm that the Financial Statements agree with the books of accounts which provide the basis for preparation of the Financial Statements and are established to reflect the financial transactions in respect of the organization.
In addition, the relevant 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.

1.3. 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

1.4. 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

1.5. 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.
• To file annual Tax Returns by 31st March for Rwanda and 30th June for Kenya and Uganda.

2. Budgets – indicate budget codes
1. D41_001/TA38/NAIR/FD41_999/TA38 02
2. D41_037/TA38/KAMP/FD41_999/TA38 02
3. H41_001/TA38/KIGA/FH41_999/2.7

3. BID SUBMISSION
The potential consulting will be evaluated against the following criteria: –
• Relevance, efficiency and effectiveness of the proposed methodology and technical approach
• Organizational and technical capacity of the consulting firm
• Relevant experience in undertaking similar assignments

4. APPENDICES
Willingness to adhere to Handicap International’s Federation institutional policies (Prevention and fight against corruption, Code of Conduct: Integrity, Prevention of Abuse and Safeguarding, Child Protection, Protection of Beneficiaries against sexual abuse and harassment). Available on the website: https://hi.org/en/institutional-policies

5. EVALUATION
Application documents submitted will be evaluated in three (stages);
1. General Mandatory Evaluation Criteria
For firms or institutions
Consultancy to Independent Financial Audit
1. Certificate of Registration from the institute of certified public Accountants (Kenya, Rwanda, Uganda)
2. Trade license Certificate/ Business Permit
3. PIN/VAT Registration Certificate
4. Current Tax Compliance Certificate
5. Personal Accident Insurance cover

For Individuals Consultancy to Independent Financial Audit
1. National ID
2. Relevant certifications from the institute of certified public Accountants (Kenya, Rwanda, Uganda)
3. PIN/VAT Registration Certificate
4. Current Tax Compliance Certificate
5. Personal Accident insurance cover

2. Technical Capacity Evaluation
a) Profile and experience of the company:
i. The firm should have proven expertise and experience in undertaking the service delivery.
Attach three reference letters
ii. Provide list of assignments undertaken similar scope of work within the last 2 years along with names of clients (including contact person, email contacts, Postal address and telephone numbers – this must include the three referees provided above)

b) Professional/technical capacity/ capability
i. The proposed staff should have relevant experience and professional qualifications in the relevant field

3. Financial Evaluation
At the Financial stage, the Lowest Competitive Evaluated bidder and within budget estimates will be considered for the award of the contract. The financial proposal should be quoted in USD including the applicable taxes to each country.