TERMS OF REFERENCE (ToR)

Independent Organizational External Audit of SONYO Umbrella

Audit Period: Financial Years 2023, 2024 and 2025, plus Interim Review for January–September 2026.

Location: Hargeisa, Somaliland

Commissioning Authority: SONYO National Council

Reporting Authority: SONYO National Council, through its Chairperson

1. Background

Somaliland National Youth Organization (SONYO Umbrella), established in 2003, is the national umbrella body coordinating and representing youth organizations across Somaliland. Pursuant to a Resolution of the SONYO National Council, and as part of its commitment to transparency, accountability, and institutional effectiveness, SONYO intends to engage an independent audit firm to conduct a comprehensive organizational audit covering the financial years ending 31 December 2023, 2024, and 2025, together with an interim financial, internal control, and compliance review for 1 January–30 September 2026. This is an organizational audit covering SONYO Umbrella as a whole, not limited to any single project or donor-funded intervention.

2. Purpose and Objectives

The audit will provide the National Council, management, donors, and other stakeholders with independent assurance on SONYO's financial statements, financial management, internal controls, compliance, and governance, and will identify weaknesses with practical recommendations for improvement. Specific objectives are to:

•                      Express an independent professional opinion on SONYO's annual financial statements for 2023, 2024, and 2025.

•                      Determine whether the financial statements present fairly, in all material respects, SONYO's financial position and performance, in accordance with the applicable financial reporting framework.

•                      Verify that organizational funds and resources have been properly accounted for and used for their intended purposes.

•                      Assess the adequacy and effectiveness of SONYO's financial management and internal control systems.

•                      Review compliance with SONYO's Constitution, financial policies, procurement procedures, HR policies, and other relevant internal policies.

•                      Assess compliance with donor agreements, grant conditions, contractual obligations, and applicable legal and regulatory requirements.

•                      Review the management and safeguarding of SONYO's assets and liabilities.

•                      Identify material weaknesses, irregularities, financial risks, control deficiencies, or instances of non-compliance.

•                      Assess governance, oversight, accountability, and risk-management arrangements as they affect financial management and accountability.

•                      Provide practical, prioritized recommendations to strengthen financial management, internal controls, governance, compliance, and accountability systems.

•                      Undertake the interim review for January–September 2026 and report separately on significant findings arising from that period.

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3. Scope of the Assignment

The audit covers SONYO at the organizational level, including all relevant funds, projects, grants, accounts, assets, liabilities, and transactions falling within the period under review. The scope shall include, but not necessarily be limited to:

•                      Financial Statements and Accounting Records — examine the 2023–2025 annual financial statements, accounting records, ledgers, and supporting documentation; verify consistency, completeness, accuracy, classification, and authorization of transactions; and review year-end adjustments and opening/closing balances.

•                      Cash and Bank Management — review all bank accounts, statements, and reconciliations; assess cash and petty-cash procedures and authorization arrangements; and identify unusual, unsupported, or unreconciled transactions.

•                      Projects, Grants and Donor Funds — verify donor funds were used for intended purposes; review compliance with grant agreements and donor requirements; assess allocation of shared costs; and review project financial reports against accounting records.

•                      Procurement and Contract Management — review compliance with procurement policy; examine selected transactions and supporting documentation, including tendering, evaluations, approvals, and payments; and assess transparency, competition, and value for money.

•                      Payroll and Personnel-Related Expenditure — review payroll records, employment documentation, and authorization; examine salaries, allowances, advances, and benefits; and assess payroll controls and segregation of duties.

•                      Assets and Inventory — review fixed-asset and inventory registers; verify selected assets' existence, ownership, location, and condition; and review acquisition, custody, transfer, and disposal procedures.

•                      Internal Control and Risk Management — assess segregation of duties; authorization, financial-reporting, banking, procurement, payroll, and asset-management controls; recordkeeping systems; and fraud-prevention and risk-response mechanisms.

•                      Governance and Compliance — review compliance with the Constitution and internal policies, financial oversight arrangements, National Council approvals, delegation of authority, and donor/statutory compliance, to the extent relevant to the audit.

•                      Interim Review (Jan–September 2026) — a focused review of transactions, bank/cash management, controls, procurement, payroll, grants, and assets for January–September 2026, with findings and assurance reported separately from the audited financial years.

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4. Standards and Methodology

The assignment shall be conducted in accordance with International Standards on Auditing (ISA), SONYO's applicable financial reporting framework, relevant donor agreements, and applicable legal and regulatory requirements. The audit firm shall propose a risk-based methodology covering document review, internal control assessment, risk and materiality determination, transaction testing, verification of supporting documentation, bank/balance confirmations, physical asset verification, staff interviews, and discussion of preliminary findings with responsible officials. The auditor remains responsible for determining the nature, timing, and extent of procedures required to support its professional opinion.

5. Expected Deliverables

•                      Inception Report — methodology, work plan, schedule, proposed team, and key areas of audit focus.

•                      Draft Audit Reports — submitted for factual verification and management response before finalization.

•                      Independent Auditor's Report(s) and opinion(s) — for each completed financial year covered by the assignment.

•                      Audited Financial Statements — for the financial years covered by the audit.

•                      Management Letter — control and compliance weaknesses, findings, risk prioritization, and recommendations.

•                      Interim Review Report (Jan–September 2026) — significant findings and recommendations arising from the interim period.

•                      Final Presentation — to the SONYO National Council through its Chairperson, with Management's participation.

6. Governance, Independence and Duration

The audit is commissioned pursuant to a Resolution of the SONYO National Council. The auditor shall act independently and objectively, with unrestricted access to records, personnel, and information required for the assignment, and shall report to the National Council through its Chairperson. Management shall facilitate the audit and may respond to factual findings but shall not influence the auditor's professional conclusions. Any significant scope limitation or restriction on access shall be reported promptly to the Chairperson. The assignment is expected to take approximately two (2) to eight (3) weeks from commencement; firms may propose an alternative, clearly justified timeline.

Qualifications of the Audit Firm

Eligible firms should demonstrate valid legal registration, Tax clearance and authorization to provide external audit services; independence from SONYO and absence of conflicts of interest; at least five (5) years of relevant audit experience, including auditing NGOs, umbrella organizations, or donor-funded programs; strong knowledge of ISA; and familiarity with computerized accounting systems (e.g., QuickBooks or equivalent). The proposed Team Leader/Engagement Partner should hold a recognized professional accounting/auditing qualification and relevant experience leading comparable assignments.

8. Proposal Submission and Evaluation

Interested firms shall submit separate Technical and Financial Proposals.

•                      Technical Proposal — Understanding of the assignment; proposed methodology, work plan, and timeline; team composition, CVs, and qualifications; relevant NGO/donor-funded audit experience; at least three references; and a statement of independence and conflict-of-interest disclosure.

•                      Financial Proposal — Total professional fee with breakdown; applicable taxes and reimbursable expenses; and validity period as specified in the Request for Proposals.

Submission of Applications

Qualified firms are invited to submit their Technical and Financial Proposals in accordance with the instructions contained in the Request for Proposals /advertisement.

Submission Deadline: 30th September, 2026

1.      Submission Method: Email:  [email protected].

Posted Date: 14th September

Expiry Date: 30th September