Terms of Reference for Kyrgyzstan Governance in Action – Support to the Jogorku Kenesh
Kyrgyzstan Governance in Action (The Project), Contract No. 7413, is managed by the Company (Palladium International Limited). The objective of the audit is to conduct an independent annual programme financial audit of the project from 1 February 2020 to 31 January 2021 and determine the activity is in accordance with the contractual requirements for the project.
The audit is not designed to ascertain program effectiveness. The audit operations are restricted to reviewing the systems and application of procedures of the Company in Kyrgyzstan.
Branch of Palladium International Limited in the Kyrgyz Republic and Grant Thornton will provide contracting, payroll and operational transaction services for the Kyrgyzstan GIA project.
The audit will be carried out in accordance with international standards of auditing. It will include such tests and controls as the auditor considers necessary including any visits to branch locations. Representative sampling may be used as the auditor considers necessary. This exercise is required to give full and satisfactory audit discharge to the project expenditure from 1 February 2020 to 31 January 2021. Specific focus will be:
- To establish that the funds have been recorded and funds have been expended in accordance with the terms and conditions of the contract.
- Items and services have been procured in accordance with the guidelines included in the contract.
- Necessary supporting documents, records and accounts have been kept in respect of programme expenditure.
- To establish the physical existence of FCDO-funded project assets per the asset register, their conditions and locations.
- Whether the systems, procedures and controls, contractual or otherwise, adopted by the project are efficient, effective and transparent.
- Whether these systems, procedures and controls enable the project to discharge its contractual obligations to FCDO, including it’s financial and project management obligations.
- Whether improvements to the project systems, procedures and controls can be made as a result of the findings of this audit.
- Whether the funds in the project account were deposited, transferred and expensed properly in compliance with FCDO guidelines and other relevant financial policies and procedures as stipulated under the contract.
The approach should include but not be limited to:
- Hold separate pre-engagement meetings with FCDO (if required) and the Company to present an outline of the planned approach for conducting the exercise.
- Request and hold formal interviews with the FCDO Project/Programme Managers (if required), and the Company financial management team with a view to forming an understanding on the effectiveness of the internal control system in the management of the project.
- Examination of the financial transactions of the Project under the management of the Company for the above period in line with expectations set out in the project documents listed below (to be made available after the contract has been let). Note that the financial records would consist of all documents relevant to the raising of an invoice; for personnel this would mean being supported by timesheets rather than the actual invoices from consultants:
- The project memorandum,
- Amendments to the Company’s head contract,
- Approved work plans for the period under review,
- Any other formal correspondence between FCDO and the Company which may have effect on the focus, direction and expenditure activities of the programme.
- Review and vet invoices for fees and reimbursable expenses by the Company and ascertain that:
- The basis for which invoices have been calculated are in line with obligations within the Company’s contract.
- Deliverables from short and long-term consultancies were properly delivered and received before relevant costs were charged to FCDO.
- Duly authorised timesheets are available for consulting days charged to FCDO during the period under review.
- Monthly fees charged to FCDO are for the contractually approved productive days only.
- Scheduled leave days are appropriately discounted from billable days on long and short-term consultancy fees.
- Review the procurement process and procedures for all short-term contracts for the period under review and ascertain that:
- Transparent and open systems are in place to ensure negotiations for contracts (services, works and printing) are competitive and represent good value for money.
- Appropriate procedures are in place to document and manage conflicts of interest that may arise from related party transactions.
- Review the assets register to ensure it is up to date and confirm that:
- Assets have been fully recorded with clear identification marks.
- The physical existence and conditions of assets in project sites.
- Express an opinion on the cost effectiveness, accuracy and completeness (i.e. value for money) of the financial transactions for the period under review.
- Prepare a project expenditure report showing receipts and expenditure summaries from 1 February 2020 to 31 January 2021 and express an opinion on the financial transactions for the period covered.
- Review the Terms of Reference for the contract (and subsequent amendments) to ascertain the extent to which the Company has complied with specified reporting requirements.
- Bring to the attention of FCDO any suspected fraud or irregularity that arises during the course of the audit and communicate matters that have come to attention during the audit which might have a significant impact on the implementation of the project.
- Audited financial report (hard and soft copies) for the period noted.
- A management letter, which should highlight observed weaknesses in the system of internal control and the recommendations for managing the identified issues over the life of the programme.
- A statement of compliance with FCDO terms and conditions as contained in the Company’s contract.
The work is expected to run for 10 business days commencing from 17 May – 28 May 2021. The audit firm is expected to submit first draft of report by 7th June 2021 and the final report not later than 14th June 2021.
A detailed timetable for the audit will be presented by the successful company.
- More than 10 years of professional experience in conducting audits in general;
- Experience and qualified team;
- More than 3 years of experience with audits of development aid programmes and projects funded by international donors;
- Experience with audits of FCDO funded programmes is desirable;
- Extensive knowledge of International Standards on Quality Control;
- Extensive Knowledge of relevant laws, regulations and rules of the Kyrgyz Republic. This includes but is not limited to taxation, social security and labour regulations, accounting and reporting;
- Good report writing English skills.
Local audit company is encouraged to submit Financial proposal to the e-mail: procurement_S2JK@thepalladiumgroup.com, by 8 April 2021, 12.00PM