1.    BACKGROUND

The Development Fund/Utviklingsfondet STI (DF) is a Norwegian non-profit foundation registered in the Norwegian Register of Legal Entities with organization number 928624471. For over 45 years, DF has worked in some of the poorest and most climate-vulnerable areas in the world. We collaborate with local communities for lasting changes and increased justice so that they can overcome hunger, handle crises, and create positive local development. We reach over a million people in rural areas of Africa, Asia, and Central America. 

DF have been working in Somaliland and Puntland since 2009, through our local partners, funded by Norwegian Agency for Development Cooperation (Norad) and Darwin Initiative. DF currently works with 4 partners in Somaliland (ADO, Candlelight, NAFIS and Amoud University) and 2 partner in Puntland (KAALO and NODO).

In accordance with the grant agreement with Norad and Darwin, we need to have an audit of partners’ financial statements for the projects supported by DF. Hence, we would like to invite authorized auditors to submit proposals to conduct a statutory audit of the accounts of the Norad programs and Darwin project for the financial years from January 1, 2024 to December 31, 2027.  The details of the partners’ budget are annexed to this Term of Reference.

2.    OBJECTIVES OF THE AUDIT

The overall objective of the audit is to provide the users of the financial statements with opinion whether the financial statements are presented fairly, in all material respects, in accordance with applicable financial reporting framework and in accordance with the instructions from our auditor in Norway (Annex 2). The audit shall be conducted in accordance with International Standards of Auditing. 

The specific objective of the audit is to check that DF’s contractual partner is complying with the contract between DF and the partner.

3. SCOPE OF WORK

The statutory audit will cover the financial years, 2024,2025,2026,2027. 

This will entail:

a)    Conducting risk assessment, controls testing and detailed verification work at the contractual partner within the scope of its own work

b)   Conducting controls testing and risk-based verification work at the sub-partners contracted by DF’s contractual partner. The scope will be determined by work pertinent to the contract between DF and the contractual partner.

c)    To check compliance of the contractual partner with laws, regulations, and directives relevant to NGOs in Somaliland and Puntland.

d)   Report on findings at the contractual partner and on material findings at sub-partners that amount to non-compliance with the contract between DF and the contractual partner.

4. TIME FRAME

The audit work shall be started by January 20, 2025.

5. REPORTING

Reporting structure

The auditors shall report per partner that has a contract with DF, to the management of DF and management of partners.

Contents of reporting

The reporting shall consist of:

·         Financial statements including audit report, in accordance with accounting and financial reporting standards of relevance in the contract between DF and partner and laws and regulations prevailing in Somaliland and Puntland.

·         Management Letter (ML) containing findings from work specified under 3. Scope of work. The ML shall include a section on the status of issues reported in the previous year.

Deadlines

It is of utmost importance that reporting is submitted withing prescribed deadlines in order for DF to comply with requirements from its donors.

Deadlines will be principally as follows:

·         Draft reports to management of contracted partner latest by 20 February 2025

·         Final auditor’s report will be issued within three working days after any discussions and feedback regarding the draft report, and no later than 5 March 2025

In the event of any delay of reporting, a notification including justification should be conveyed to DF at least 5 days prior to the deadline.

QUALIFICATION CRITERIA 6.1 Eligibility of the firm

Audit firms who will fulfil the following requirements are eligible to submit the proposals

               i.      Holding renewed business license/Trade license

             ii.     Holding renewed Practicing Certificate for 2024/2025

The auditor must be completely impartial and independent from all aspects of management or financial interests in partners. The auditor should not, during the period covered by the statutory audit nor during the undertaking of the audit, be employed by, serve as director for, or have any financial or close business relationships with any senior participant in the management of partner organisations. The auditor should disclose any relationship that might possibly compromise his/her independence.

6.2 Qualifications, Experience and Team Composition

The Auditor shall assign a team of staff with appropriate professional qualifications and suitable experience with International Standards on Auditing. 

The firm shall provide the Development Fund with CVs of the partner or other person in the audit firm who is responsible for the audit and for signing the report together with the CVs of the audit managers, senior auditors and assistant auditors proposed as part of the audit team. CVs will include appropriate details on the type of audits carried out by the staff indicating capability and capacity to undertake the audit as well as details on relevant specific experience. Auditors who can document experience from audit of NGOs will be preferred. Also auditors with experience in auditing Norad funded projects will be advantageous. The firm shall provide a list of minimum 3 references of similar audit assignments within the last 3 years with contact information.

Interested firm shall submit both technical and financial proposal before 4:30PM on Sunday, December 29th, 2024

and obtain the detailed ToR by sending an email to: [email protected]  requesting the detailed ToR.