Terms of Reference for Provision Of External Audit Services For Conducting Annual Report And Financial Statements For The Year Ended 31 December 2023

PROVISION OF EXTERNAL AUDIT SERVICES FOR CONDUCTING ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 FOR SOCIAL-LIFE & AGRICULTURAL DEVELOPMENT ORGANIZATION (SADO)                     

A.    Introduction

Social-life & Agricultural Development Organization (SADO) is a non-partisan, non-governmental, not for profit making organization. SADO is legally registered in Kenya and in Somalia under Somalia Federal Government and in Jubaland State, Hirshabelle state and Galmudug state of Somalia. With its headquarters in Mogadishu, Somalia, SADO has base stations in Kismayu, Dhobley, Bardera, Elwak, Garbaharrey, Luuq, Belet-Hawa, Dollow, Balad-weyn & Adado districts Districts of Somalia. SADO pursues a rights-based approach grounded on the belief that people are entitled to basic conditions of living with dignity and access to opportunity and dignity, as a basis of fulfilling their human potential. SADO therefore seeks to stimulate sustainable developmental change amongst vulnerable communities living in the Horn of Africa region. SADO's mandate and core business/Value is facilitating community development. These ambitions are realized through knowledge transfer, influencing, brokering linkages, and facilitating/implementing integrated people centered humanitarian and development programs. The main developmental approach of SADO is enabling the communities to and local solutions to their socioeconomic challenges.

SADO has an impressive track record and experience in implementing community- driven development (CDD) programs in Governance, Food Security and Nutrition, Climate Smart Economic Empowerment (CSEE) Climate Resilient Water, Sanitation and Hygiene (CRWASH), Education, Health, Shelter and settlement. Additionally, human rights, gender and environment have over time been addressed by SADO as cross-cutting issues. The main target groups of SADO include vulnerable and marginalized pastoralists comprising of individuals, families, groups, and communities.

SADO has a well-defined and functional internal organizational structure that seeks to deliver its strategic objectives. SADO works through several well-resourced human resources, infrastructure, and equipment spread across its field offices. Policy and strategic guidance, leadership and oversight are offered by a diverse and competent Board of Directors.

B.     Objective

The objective of the audit of SADOs financial statements is to enable the auditors to express an independent professional opinion on the financial position, utilization of funds for their intended purposes, keeping of proper books of accounts as required by law have been maintained and the existence of adequate internal controls and supporting documentation for the transactions.

C.    Scope

The External Auditor shall audit the Financial Statements (FS) of SADO, in accordance with the International Standards on Auditing (ISA). The FS include the Statement of Financial Position (including the Fund’s Assets & Liabilities), the Statement of Activities (including the SADO’s Income & Expenditures), the Statement of Movements of Net Assets and the Statement of Cash Flows, together with explanatory notes and schedules in support of the FS. SADO’s Income & expenditures includes both the administrative budget as well as all of its programmatic income and expenditures.

D.    Audit Services Required

The scope of the audit services required specifies the following:

1.      The Auditor shall undertake this engagement in accordance with these Terms of Reference (TOR) and with International Standards on Auditing (ISAs).

2.      The audit period is from 1st January 2023 and finished to 31 December 2023.

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

4.      Verify all funds received have been used in accordance with the established rules and regulations of SADO and only for the purposes for which the funds were provided.

5.      Goods, works and services financed have been procured in accordance with the SADO established procurement procedures, rules and regulations and /or the implementing partner procurement procedures, rules and regulations.

6.      Appropriate supporting documents, records and books of accounts relating to all activities have been kept.

7.      The financial statements have been prepared by SADO management in accordance with applicable accounting standards and give a true and fair view of the financial position of SADO and of its receipts and expenditures for the period ended on that date.

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

9.      Express an opinion as to reasonableness of the financial statements in all material respects.

10.  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.

11.  Conduct entry and exit meeting with the Executive Director.

12.  In addition to the audit report, the auditors will prepare a Management Letter on the following:

(a)    Provide comments and observations on the accounting records, procedures, systems and controls that were examined during the course of the audit.

(b)   Identify specific deficiencies and areas of weakness in systems and controls and make recommendations for improvement.

(c)    Communicate matters that have come to their attention during the audit which might have a significant impact on the sustainability of the organization.

(d)   Bring to the Executive Director’s attention any other matters that the auditors consider pertinent.

E.     Audit Duration

The audit work shall be completed within 30 days from the date of commencement of the audit.

F.     Deliverables:

1.      The Auditors on completion of the audit work will submit two (2) original copies of the Audit Report appended to the Financial Statements along with the reports to the attention of the Executive Director. (ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023)

2.      Management letter in accordance with the scope of work described here before.

G.    Qualification of the Audit Firm

The audit firms should be affiliated to membership with an internationally reputed audit firms will be eligible to apply.

H.    Mandatory requirements

The audit firm must submit the following documents:

1.      Company/firm profile

2.      Certificate of registration from local authority (issued by local municipality, region or district administration, ministries) based on your business field.

3.      Bank statement for the last Six (6) months.

4.      Tax compliance certificate for company/firm with details of the directors.

5.      Audit firm previous work experience -support with at least three reference letters. Demonstrate experience of the audit firm with audit reporting under International Financial Reporting standards (IFRS) and International Standards on Auditing (ISA)

6.      Provide Audit Methodology, Proposed Work-plan, Curriculum Vitae for the partner, manager and key staff proposed for the audit team

7.      Any actual or potential conflict of interest in taking up this role should be highlighted.

Please submit your combined technical and financial proposal to [email protected]

K.    Deadline for submission

The deadline for submission is on or before

20th January 2024 at 5:00 PM.