TERMS OF REFERENCE FOR EXTERNAL FINANCIAL AUDITOR

1. INTRODUCTION

Solidaridad Eastern and Central Africa Expertise Centre (Solidaridad) is a not-for-profit organisation registered in Kenya and part of the global Solidaridad Network, headquartered in the Netherlands. The organisation works to improve smallholder producers’ livelihoods through support and market linkages, aiming to enhance living standards and contribute to national economies via sustainable commodity value chains. Solidaridad implements projects in various sectors, including coffee, cotton, gold, horticulture, livestock, sugarcane, and tea, with offices in Ethiopia, Tanzania, and Uganda.

Solidaridad seeks to engage an audit firm to audit its Kenya office financial report and consolidate regional audit reports for the 2024 financial year. The audit, conducted at the Nairobi regional office, must be carried out by an independent, qualified auditor in compliance with International Standards on Auditing (ISA).

The audit will ensure the accounts are free from material misstatements by examining relevant evidence, assessing significant estimates and judgments made by the directors, and evaluating the appropriateness of accounting policies. Conducted per International Financial Reporting Standards (IFRS) and the Companies Act Cap 486, these audits are crucial for guaranteeing the accuracy and reliability of financial reports.

1. OBJECTIVE

The auditors will identify any weaknesses during the audit and report them to senior management and the board. These reports may only be shared with third parties upon written approval from the Managing Director. Approval will only be granted because the reports are intended solely for Solidaridad, and the auditors do not assume responsibility for any other parties.

The primary purpose of the reports is to highlight observations during the audit, including:

1. Design and operation of accounting and internal control systems, with recommendations for improvement.
2. Identified weaknesses in the accounting and internal control systems and potential risks to Solidaridad.
3. Constructive advice on cost savings or operational efficiency improvements.
4. Comments on any adjusted or unadjusted errors and accounting policies and practices.

The audit firm will issue an opinion on the financial statements. Alongside the audit report, the firm will also prepare a management letter. Finally, the firm will file the organisation’s income tax return after the firm and company directors sign the final audit report.

1. SCOPE OF WORK

The scope of services will include testing transactions and verifying the existence, ownership, and valuation of assets and liabilities as necessary. The auditor must plan and conduct the audit to provide reasonable assurance that the financial statements are free from material misstatements. This involves understanding Solidaridad’s (global and regional) accounting and internal control systems to evaluate their adequacy in preparing financial statements and maintaining accurate accounting records. The auditor must gather sufficient evidence to draw reasonable conclusions. The audit will involve examining evidence on a test basis, assessing the accounting principles and significant estimates made by management, and evaluating the overall presentation of the financial statements.

The audit must be conducted between 01 February 2025 and 31 March 2025.

1. DESIRED EXPERIENCE AND QUALIFICATION

The audit firm must meet the following criteria:

• Be registered and licensed by a recognised national authority.
• Have substantial experience in accounting and auditing development projects, especially donor-funded initiatives.
• Possess relevant experience working with NGOs and project-based operations.

The key audit team must include the following:

• An audit manager with at least 8 years of auditing experience.
• Strong knowledge of donor-funded projects.
• Membership in a recognised professional accountancy body.

1. EXPRESSION OF INTEREST (EOI)

Interested firms should submit the following:

1. An expression of interest in providing the outlined services (max. 20 pages, excluding CVs and references, which can be provided as an annexe​​).
2. An organisation profile highlighting relevant experience with NGO audits and a list of NGOs previously audited.
3. Demonstrated ability to audit cloud-based accounting systems.
4. A detailed proposed methodology for delivering the required services.
5. A work plan and budget in Kenya Shillings (KES), including all taxes for the assignment.