REQUEST FOR AUDIT SERVICES

REQUEST FOR AUDIT SERVICES

1. Organization Overview

Background:

Somaliland Youth Development and Voluntary Organization (SOYDAVO) is a national, non-profit making youth-led NGO with its HQ in Burao. SOYDAVO was founded in 2003 as a youth club and later in 2006 registered as a nonprofit making NGO with overall aim of empowering and bettering the lives of the youth, women, and vulnerable populations in Somaliland. Over the past ten years, SOYDAVO has been one of the active and biggest local NGOs in the country. SOYDAVO has operational presence in all over the six regions of Somaliland. In 2019, SOYDAVO has expanded its operation to Mogadishu, Somalia, and this year 2021 plans to cross the border and open an office Jigjiga Ethiopia. 

  2. Preface of the Audit

SOYDAVO is undertaking the process of engaging a professional audit firm to conduct a comprehensive audit. This audit pertains specifically to the project funded by the KNH  with the project title of Improving child protection and living conditions for vulnerable children in Togdheer region.

The selection of the audit firm will be conducted through a structured and competitive process. This process will begin with the issuance of a detailed Request for Proposal (RFP), which will outline the specific requirements and expectations for the audit. The RFP will include the scope of work, preferred timelines, and necessary qualifications, adherence to international auditing standards (IAS) and international standards on auditing (ISA) as well.

Prospective audit firms will be invited to submit their proposals, showcasing their expertise, methodological approach. SOYDAVO will rigorously evaluate these proposals based on criteria such as the firm’s relevant experience, audit methodology, technical capabilities, and cost-effectiveness.

The selected audit firm will be expected to demonstrate a thorough understanding of SOYDAVO’s operational contexts and the unique compliance. Upon selection, a formal contract will be initiated and signed after meeting all the required criteria by detailing all engagement terms, including scope audit work, deliverables, fees, and confidentiality.

  3,  Objective of the Audit

The primary objective of this audit is to provide an independent professional opinion on the financial statements of the project. The audit will assess whether:

• The financial statements present a true and fair view of the financial position of the project.

• The funds have been utilized in accordance with the terms of the grant agreement.

• ⁠The financial management systems and internal controls are adequate and effective.

  5. Scope of the Audit

The audit will cover:

• Examination of the financial statements, including balance sheet, income statement (income and expenditure statement), and cash flow statement.

• Verification of the accuracy of financial reports, if any.

• ⁠Assessment of the compliance with the grant agreement.
• ⁠Review of the budgetary controls and any variances from planned expenditures (BVA).

• ⁠Examination of the procurement processes to ensure transparency and competitiveness, if any.

• ⁠Evaluate and ensure that the project meets its  desired goals such as administrative, contractual, financial, and legal in line with the grant agreement with the contracting authority.

• Review to ensure that the financial management systems and internal controls of the project and its  performance are designed and implemented in accordance with the IFRS (International Financial Reporting Standards) and or GAAP (Generally Accepted Accounting Principles).

• Review to ensure that the financial management systems and internal controls of the project and its performance are designed and implemented in accordance with the IFRS (International Financial Reporting Standards) and or GAAP (Generally Accepted Accounting Principles).

• Sampling and verification of the reported expenditures and financial reports from SOYDAVO are accurate and truly reflect the project’s financial performances and activities.

• Regulatory and tax compliance of the staff payrolls.

  6. Audit Methodology

• The audit will be conducted in accordance with International Standards on Auditing (ISA).

• The methodology will include a risk assessment approach, reviewing financial records, physical verification of assets, and interviews with key personnel.

• Sampling techniques to select transactions for detailed testing of the project expenditures.

  7. Deliverables

• Audit Report: A comprehensive report expressing an opinion on the financial statements.

• Management Letter: A document highlighting significant findings, weaknesses in internal controls, and recommendations for improvement, if any.

• Audit Findings Summary: A concise presentation of key issues to the project management team.

• Notes to the financial statements

• The audit firm must be locally, regionally and internationally recognized and/or registered.

• The audit team should include certified public accountants with relevant sector experience.

• ⁠Company profile.

• ⁠Technical and financial proposal (Audit Methodology, Proposed Plan, CVs for the partner, manager, and key staff proposed for the audit team).

• ⁠Accreditation by a recognized professional accounting body e.g. AICPA, ICAEW, and or ACCA and etc.

• Practicing license of the firm and the individual members who will be involved in the exercise.

• Experience of the audit firm with audit reporting under International Standards on Auditing (ISA).

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

• ⁠Should preferably have access to the project implementation area – Somaliland

• Knowledge of systems and procedures of financial management and accounting in the area of good governance, public policy and etc.

• The audit firm must have over 5 years of experience in the industry.

  9. Timeline and Logistics

• The audit is scheduled to commence on 25th Febuary 2025 and conclude by 30th March 2025.

• The draft audit report should be submitted by 10 th April 2025, and the final audit report with management letter by 30th April 2025.

10. Confidentiality and Ethical Considerations

• The auditors are required to maintain confidentiality of all information obtained during the audit process and adhere to professional ethical standards.

• Interested audit firms are required to send their application documents to the email: [email protected]  by 30 January 2025