BACKGROUND

Sustainable Development and Peace-building Initiatives (SYPD) is a non-profit, non-governmental, non-partisan organization that was formally registered in Somalia in August, 2004 with the aim of contributing to the relief of human suffering in the country while initiating local, non-violent, and sustainable solutions to the intractable conflict that besieged the country. Regarding its mandate, SYPD strives to promote peace in Somalia, neighboring countries, and Africa through sustainable development programs that enable communities to have permanent access to basic human needs, and by addressing the root causes that drive conflict in the region. Since its inception SYPD has implemented over 150 projects in different regions of Somalia, reaching hundreds of thousands of beneficiaries from the most vulnerable communities. As a humanitarian organization, SYPD envisions seeing an African continent where conflict is overcome, and poverty is eliminated.  For more information, please visit www.sypd.org

SYPD wishes to engage the services of an external financial auditor for the two financial years ending 31st March 2022, and 31st March 2023, in accordance with this Terms of Reference. The Auditor shall provide the services according to the agreed schedule/work plan.

Any substantial changes in timelines must be discussed with SYPD in advance. SYPD will bear responsibility for changes occasioned by SYPD and shall compensate for the value of work done and the Auditor shall bear responsibility for any changes occasioned by the Auditor. However, SYPD does not take any responsibility for possible changes in the agreed-upon schedule due to delays caused by factors beyond its control.

The mission of SYPD is to strive to promote peace in Somalia, neighboring countries, and Africa through sustainable development programs that enable communities to have permanent access to basic human needs, and by addressing the root causes that drive conflict in the region.

2.0 The Assignment

SYPD wishes to engage the services of an external financial auditor for the two financial years ending 31st March 2022, and 31st March 2023, in accordance with this Terms of Reference.

The audit will cover the accounts and financial statements (comprising the Statement of Financial Position, Income & Expenditure Statement, Statement of Changes in Equity the Cash Flow Statement, and the relevant notes and disclosures) for SYPD;

The audit will be carried out in accordance with the International Auditing Standards and will include tests and verification procedures as the auditors deem necessary.

The audit shall cover the two financial periods starting 1st April 2021 to 31 March 2023, with each financial year being audited separately with separate audit financial final reports with professional opinion.  

3.0 Objectives Of the Audit

The objectives of the audit of SYPD’s financial statements are:

• To enable the auditors to express an independent professional opinion on the financial performance, position and cashflows of SYPD for the 2-year financial periods starting from 1st April 2021 and ending 31 March 2023, and to ensure that the funds utilized have been used for their intended purposes.
• To ascertain that the books of accounts of SYPD provide the basis for the preparation of the Financial Statements; and that proper books of accounts as required by law have been maintained by SYPD. This includes confirming that the Organization has maintained adequate internal controls and supporting documentation for the transactions for the two financial years ending 31 March 2023.
• To independently verify the organization’s compliance with the requirements of the following documents of reference:

1. Legislation: National legislation, with particular attention to the exceptions and derogations due to the context:

• Respective social and labor law (including staff and salary/compensation regulations).
• Regulations on taxes.

1. International standards:

• ISA - International Standards on Auditing
• IFAC – International Federation of Accountants
• Relevant standards of the local accounting profession
• Local legislation on accounting and reporting

To verify consolidated financial statements of SYPD, in all material respects, are in conformity with the applicable Financial Rules and Regulations of the organization.

4.0 SCOPE OF WORK

The auditor is expected to ensure the following:

1. Review donor-specific Fund Accountability Statements (FAS) and review that fund received, and expenditures incurred have been applied in accordance with applicable regulations, laid down financial regulations, prescribed procurement procedures, donor regulations or such other proper orders to the extent that these impacts the annual financial statements;
2. Provide an analysis of Net Asset Position, Financial Position and expenditure per program and funding source.

• Verify all funds have been used in accordance with the established rules and regulations of SYPD and only for the purposes for which the funds were planned/budgeted.

1. Verify that goods, works, and services financed have been procured in accordance with SYPD and donors’ established rules and procedures.
2. Verify supporting documents, records, and books of accounts relating to all activities that have been kept and validate the clear linkages that exist between the books of accounts and the financial statements presented to
3. Appropriate supporting documents, records and books of accounts relating to all activities have been kept. Clear linkages should exist between the books of accounts and the financial statements presented.

• The financial statements have been prepared by SYPD’s management in accordance with applicable accounting standards and give a true and fair view of the financial position of the Organization and of its receipts and expenditures for the financial years ending 31 March 2022, and 31 March 2023.

1. Express an opinion on the fairness and truthfulness of the financial position, cash position and net current assets, including any key audit matters.
2. Evaluate compliance with all relevant laws and regulations.

• Comprehensive assessment of the adequacy and effectiveness of the accounting and overall internal control system to monitor expenditures and other financial transactions.

1. Carry out an in-depth and exhaustive review of the internal control systems to have sufficient knowledge of the procedures underpinning the systems, as contained in the SYPD’s Financial Rules and Regulations, Financial Manual, and the applicable rules of the concerned donors.
2. Express an opinion as to the reasonableness of the financial statements in all material respects.
3. Include in their reports opinion on compliance with procedures designed to provide reasonable assurance of detecting misstatements due to errors or fraud that are material in the financial statements.

• Conduct entry and exit meetings with the management of the SYPD including Head of Programmes, Head of Finance and the Executive Director.
• Ensure that proper bookkeeping has been maintained that:
• Complies with the necessary legal regulations, including the generally accepted accounting principles (GAAPs) and others applicable to classification, accounting and valuation;
• Information provided leads to an orderly presentation in the accounting records and the annual financial statements, in line with applicable professional standards;
• The annual financial statements were properly derived and are in agreement with the books of account.

1. In addition to the audit report, the auditors will prepare a Management Letter on the following:
   1. Give comments and observations on the accounting records, procedures, systems and controls that were examined during the course of the audit.
   2. Identify specific deficiencies and areas of weakness in systems and controls and make recommendations for improvement.
   3. Report on the implementation status of recommendations pertaining to previous period audit reports.
   4. Communicate matters that have come to their attention during the audit which might have a significant impact on the sustainability of the organization.
   5. Bring to the management’s attention any other matters that the auditors consider pertinent.

5.0  Timelines

The audit work will be completed within 1 Month effective on the signed date. The Auditor should aim to complete this work within the timeframe set out below. SYPD will provide all the necessary assistance to achieve this. If issues arise which require an extension to these key dates, these will be discussed with the Auditor and agree on a revised new date.

6.0  Report

The audit reports shall be submitted in English language.

7.0  Deliverables

On completion of the audit, the Auditor shall provide;

1. Professional opinion on each of the final financial statements for FY2022, and FY2022 respectively
2. Audited Financial Statements separate for each financial year –FY2021 and FY2022.
3. Management Letters separate for each financial year –FY2021 and FY2022. The management letter should also include the following;

• Identify specific deficiencies and areas of weakness in systems and internal controls and make recommendations for their improvements;
• The categorization of audit findings by risk severity;
• Implementation status from findings arising from previous audits.

8.0  Qualification Of the Audit Firm

Any audit firm with international recognition, relevant experience, and the capacity to conduct the above subject should submit their proposal of Interest to SYPD, clearly indicating their “Services for External Audit of SYPD Financial Statements for 2021 and 2022” on or before 26th September 2023 at 23:59 pm to the following address: [email protected]  while in the copy cc: [email protected] and [email protected]

9.0 Audit Fees

The audit exercise fees will be fixed, and it be based on competitive bidding process.

Any audit firm with international recognition, relevant experience, and the capacity to conduct the above subject should submit their proposal of Interest to SYPD, clearly indicating their “Services for External Audit of SYPD Financial Statements for 2021 and 2022” on or before 26th September 2023 at 23:59 pm to the following address: [email protected]  while in the copy cc: [email protected] and [email protected]

9.0 Audit Fees

The audit exercise fees will be fixed, and it be based on competitive bidding process.