Request for proposal (RFP): External Audit

TOR for External Audit

Background

Mandwi is a non-profit making organization established in 2009 AD in Rautahat District. It has been affiliated with the Social Welfare Council (SWC) of Nepal. It aims to promote socio-economic, social justices, the environmental and political condition of the local people through rights-based, good governance, participatory and democratic process to eliminate social evils, illiteracy, ignorance, poor health, undemocratic norms, immorality, discriminatory practices, and environmental degradation.

Accounting and financial management practices of MANDWI are governed by the Interim Financial Regulations and Provisional Financial Procedures. Financial Statements of MANDWI are prepared in accordance with the International Financial Reporting Standards (IFRS).

1. Purpose and objective of the Audit:

The overall purpose of this assignment is to give the reasonable assurance of all income received and cost incurred in current fiscal year are in accordance with the relevant policy of MANDWI, compliance with Government of Nepal's rules and regulation and produce a report as per Nepal Accounting standard (NAS).

2. Audit Scope and Assignment:

The scope of the Annual Audit is to check the income provided and costs incurred through the original vouchers and other related project documents (contracts, agreements…), based on the annual plan/program and financing plan. This will review the income and expenditures of MANDWI for the period of one financial year. The auditor should verify the report by means of verification. 

• Checking and verifying whether the appropriate supporting documents, records and books of accounts relating to all project activities have been kept and whether these documents clearly relate to the activities they were assigned for
• Checking and verification of the inventory /Fixed Assets lists in MANDWI.
• Checking and verifying whether compliance with local applicable laws is made or not verify, in sample, the quantitative and qualitative program reports, review of compliance with laws, regulations and other external requirements, management policies and directives and other internal requirements.
• The audits should be carried out in accordance with either Nepal Standards on Auditing (NSA), or International Standards of Auditing (ISA) auditing standards.

3. Audit Methodology:

In order to present the true and fair view on the financial statement/reports the auditor shall conduct accurate checks, observations, an inspection of records and documents, and interviewing the beneficiaries, inquiry, and analysis, recommendation, comparison, , including:

• Visit all head office and field offices and review vouchers, invoices, and all supporting documents for all the amount expenditure and income receipt
• Follow up with the previous audit reports and comments
• Review staff, rental, and other relevant contracts
• Review of payroll and tax compliance
• Review the beneficiaries’ policies and compliances
• Review the MANDWI funded items’ inventory list in central and field offices

4. Procedure:

Following the completion of the recruitment process the selected auditor/ audit team will start the audit process passing through the following major phases:

A. Inception/planning phase: The auditor should propose the plan in LOI

B. Auditing:

• The auditor must audit the financial transactions of MANDWI for the financial period and primary discussion on findings with the Division Heads of MANDWI.
• Preparation of the draft report and issue the draft report for management comment on the agreed timeline.
• Receipt of Final Management Comments from MANDWI.
• Finalize the Management letters: MANDWI and auditors. 
• Finalization of report and issue final audit report with certified statements and a management letter for the financial year.
• Sign the Final Report

5. Final Reporting: The final audit report should be submitted to MANDWI no later than 10 Bhadra 2082

6. The Audit Report and Management Letter

a. Audit Report

The audit report should clearly indicate the auditor’s opinion. This would include at least the following:

• The title, addressees, and an opening or introductory paragraph containing

a. Identification of the financial information audited including the period covered; and

b. Statement of the responsibility of the entity’s management and the responsibility of the auditor.

• A scope and methodology paragraph describing the nature of the audit referencing

a) The accounting standards that have been applied and indicate the effect of any deviations from those standards.

b) The audit standards that were applied ISAs, or national standards that comply with one of these in all material respects); and

c) The work the auditor performed.

• An opinion paragraph disclosing
  • Whether the financial statements and supporting schedules fairly present the cash receipts and expenditure in all material respects and that the funds were used for the purposes defined by the work program.
  • whether the financial transactions reflected in the statements are in accordance with financial regulations and procedures, budgetary provisions and other applicable directives; and
  • Summary assessment of the efficiency of the management and internal control system.
  • The auditor may expand the report to include other information and explanations not intended as a reservation. Audit reports will be provided English.

Management Letter

The auditor should submit a letter to the management at the completion of the audit. The topics/issues to be covered in the letter should include:

• Give comments and observations on the accounting records, procedures, systems and controls that were examined during the course of the audit.
• An assessment of the efficiency of the administration, management and internal control system of MANDWI;
• A description of any specific internal control weaknesses noted in the financial management. Recommendations to resolve/eliminate the internal control weaknesses noted should be included.
• Management comments/response to audit findings and recommendations.
• Report on the degree of compliance with each of the financial, legal and contractual compliances and external matters affecting such compliance.
• Communicate matters that have come to their attention during the audit which might have a significant impact on the implementation and sustainability of the Program.
• Any other issues the auditor finds relevant from their professional judgment.

7. Debriefing Meeting:

The Auditor/Audit Team should conduct debriefing meetings to relevant program and finance staff and Management Committee Members regarding the audit in overall, the response on the management letter, and the auditor’s final view on the response of management.

8. Auditor Independence and Qualification

The auditor must be completely impartial and independent from all aspects of management or financial interests in the entity being audited. The auditor should not, during the period covered by the 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 MANDWI. The auditor should disclose any relationship that might possibly compromise his/her independence.

The audit firm/engagement partner must be a Chartered Accountant and registered with the Institute of Chartered Accountant of Nepal (ICAN). The firm must have at least five years of relevant and diversified professional experience in auditing with sizeable portfolio and experience in the audit of the donor-funded project, the development sector, NGOs and INGOs. The auditor must employ adequate staff with appropriate professional qualifications and suitable experience with the International Standard of Auditing or national standards of Chartered Accountants, including experience in auditing the accounts of entities comparable in size and complexity to MANDWI.

Curriculum vitae (CVs) should be provided to MANDWI by the principal of the audit institution who would be responsible for signing the opinion and key personnel proposed as part of the audit team. CVs should include details on relevant audits carried out by the applicable staff, including ongoing assignments indicating capability and capacity to undertake the audit and experience in auditing financial statements compliant with the Chartered Accountants Standards.

9. Tentative Timetable:

The audit assignment will take place from 10 Shawan 2082 to 30 Shawan 2082  including management letter, debriefing meeting, and submission of the final report.

10. Access to Facilities and Documents:

The financial systems are partly automated in FAMAS (Financial and Management Accounting System).

a) The auditor will have full and complete access at any time to all records and documents (including books of account, legal agreements, minutes of committee meetings, bank records, invoices, and contracts etc.) and all employees of the entity. The auditor will have a right of access to banks and depositories, consultants, contractors and other persons or firms engaged by the program management over the period under the audit review.

Link: Consultancy Proposal Form

11. Request for proposal for External Audit for Nepalese fiscal year 2081/2082  of  Mandwi” by 5 PM, 19th July 2025

12. How to submit the Bid?

Interested and eligible audit firm must submit the RFP within deadline mention in EOI.

MANDWI

Gaur Municipality Ward-3, Rautahat, Phone:055-520824

Email: mandwiempoweringwomen@gmail.com