The findings and recommendations are to be formulated into action plan depending on the implications and management comments. The audit of the financial statements of the organization is to be carried out in accordance with International Standards on Audit (ISAs) with the objective of expressing an opinion on whether the financial statements give a true and fair view for the operations of the organization. The audit should also ascertain whether the organization complied with International Financial Reporting Standards (IFRs). Watoto Wetu Tunu Yetu, June 2020
Watoto Wetu Tunu Yetu
The audit of the financial statements of the organization is to be carried out in accordance with International Standards on Audit (ISAs).
REVIEW OF THE FINANCIAL AND INTERNAL CONTROL SYSTEMS
The strength of the internal control structure of an organization ensures the financial resources and assets created from such resources are properly safeguarded and value for money achieved. The general objective under this section is for the auditor to ascertain whether the organization has documented policies/procedures, whether these procedures are adequate and whether they are adhered to. The terms of reference set out below form at minimum, the basis of this engagement: –
1. The accounting system
Develop an understanding of the accounting system and obtain all related documentation, manuals, written policies, relevant procedures and other guidelines and ensure they have been complied with during the period under review. Assess the reasonableness of expenditures and report on whether value for money has been achieved.
2. The organization structure and the control environment within the organization
Assess organization structure in terms of effectiveness and efficiency of the framework of authorities, workflows, adequacy of staffing and competence of staff especially in the finance function and appropriate segregation of duties. Evaluate the control environment.
3. Human resource function.
Review the competitiveness, transparency and effectiveness of the recruitment and hiring of personnel. Ascertain that performance appraisal is happening and follow up done. Confirm that personnel records are complete, update and secure. Ascertain the existence and adequacy of documented human resource policies, procedures and / or guidelines.
4. The finance function
Review adequacy of the accounting and financial operations and reporting systems. This will include budget control, cash management, approving authority, receipt of funds, disbursement of funds, proper recording of records maintenance and control.
5. The procurement procedures adopted by the organization
Review the set procurement procedures and policies for competitiveness, transparency and effectiveness. Testing them for compliance and where there is departure, review documented reasons for such. Ascertain that assets and services procured meet the requirements of funded activities.
Review the extent to which the selected suppliers, consultants and service providers present value for money based on prudent procurement procedures, current trends, and evidence of satisfactory delivery of goods/services. Watoto Wetu Tunu Yetu
6. The Information systems of the organization
Review the appropriateness and adequacy of the management information systems and the security and control of equipment and data whether manual, semi or fully computerized.
Review the adequacy of the backup practices and other data protection measures.
7. Local (tax) laws and NGO regulations/compliance
Determine the context of local laws and regulations in relation to the organization and see whether the organization meets these requirements and discover potential risks. Assess carefully whether the organization is fully compliant with TRA, pension fund, WCF, Registrar and with any other relevant governing bodies – ministries, Immigration e.t.c
Ascertain the accuracy, completeness and timeliness of payroll preparation and remittance of statutory deductions.
8. Previous audit recommendations
Review the status of the previous audit findings and recommendations detailing levels of implementation to date, the consistency of practice and general usefulness to the organization.
- Narrative proposal, not to exceed 5 pages, describing your ability to accomplish described scope.
- Cost proposal for the proposed services and proposed method of invoicing taking into account all applicable taxes.
- Organizational details, including firm name, year established, copy of firm’s certification (including TIN certificate, VRN, copy of business permit and Valid Tax Compliance certificate)
- Name of any international association if any to which your firm belongs.
- Description of your experience in auditing NGOs (limit one page).