Request for quotation for External Audit Services for Fiscal Year 2024-025

Request for quotation for External Audit Services for Fiscal Year 2024-025

BACKGROUND

Mercy Corps is an international non-governmental humanitarian relief and development agency funded by the US Government, the Foreign, Commonwealth & Development Office (FCDO) of the UK, and private and corporate donors. Mercy Corps began operations in Nepal in late 2005, following the signing of a General Agreement with the Social Welfare Council of Nepal. Globally, the organization focuses on economic development, civil society strengthening, and humanitarian assistance. In Nepal, priority areas include agriculture and food security, disaster risk reduction, and education, with a cross-cutting emphasis on youth and disadvantaged groups.

Mercy Corps Nepal requires an audit firm to conduct an external audit in line with Nepal Auditing Standards, which align with International Standards on Auditing (ISA). The audit should ensure compliance with Nepal accounting standard for NPOs and both the local and international best practices in financial reporting.

SCOPE OF AUDIT

The audit shall:

• Be conducted in accordance with Nepal Standards on Auditing and applicable (Nepal accounting standard for NPOs).
• Cover all projects implemented by Mercy Corps Nepal during FY 2024–25 (16 July 2024 to 15 July 2025).
• Include a statutory audit and preparation of project-wise bifurcated financial statements, specifically for the four major projects and others as necessary.
• Review the resolution status of prior-year audit recommendations.

Key Projects to be Covered Include (non-exhaustive):

In addition, the auditor should also cover resolution of prior year audit recommendations.

OBJECTIVE OF AUDIT

The objectives of the audit are primarily focused on ensuring the accuracy and integrity of an organization’s financial statements and compliance with legal requirements. The key objectives are.

1. Provide an independent assessment of the organization’s financial and operational activities 
2. Ensure that the donor funds are being used in accordance with the organization's mission and donor restrictions and record and allocate as appropriately.
3. Confirm that the financial statements are prepared in accordance with the applicable accounting standards and regulatory requirements, such as Nepal accounting standard for NPOs, International Standards on Auditing (ISA) or Internal financial Reporting Standards (IFRS). And reflect the Organizational financial position and performance.
4. Assess the adequacy and effectiveness of the organization’s internal controls system and recommend improvement if any.
5. Ensure the organization complies with relevant laws, regulations and statutory requirements such as those related to tax, fundraising and financial reporting. 
6. Provide assurance to regulatory bodies that the organization is adhering to statutory obligations.
7. Identify areas where financial practices and procedures can be improved and recommend for their improvement.
8. Assist in the strategic planning and policy formulation processes by providing insights into the audit findings.

AUDIT DELIVERABLES AND REPORTS

The audit report should be addressed to the Country Director and the audit report should include:

• Conduct full Annual Financial audit of Mercy Corps Nepal office, comprising of the Balance Sheet and the statement of Income and Cash Flows. Audit Report with an independent professional audit opinion.
• A management letter, highlighting any recommendations for improvement or noted issues of non-conformity with best practices, and Mercy Corps’ internal policies and procedures
• Filing the tax returns including e-filing to the Inland Revenue Department. 
• Provide detailed Summary of Financial Headings for Tax related audit from IRD.

CONFIDENTIALITY AND MAINTENANCE OF THE WORKING DOCUMENTS

The auditor shall maintain the highest level of confidentiality of the information obtained during the audit process. The auditor shall maintain and preserve all internal working documents for a period of seven years as of the completion of the audit, even if legislation prescribes shorter periods.

DELIVERABLE AND REPORTING TIME SCHEDULE

Institutional Audit deliverable and reporting timeline shall be as follows

• The Audit should start from the last week of July 2025 or first week of August 2025 for the country office.  
• A draft report and draft management letter should be submitted by August end or by the first week of September 2025.
• The final report and management letter should be submitted by 16 September 2025.
• Auditors should submit annual tax returns to the Inland Revenue Office by 20 September 2025.

Consultation 

Mercy Corps seeks time-to-time consultation regarding Tax, VAT and other regulatory updates and advice on those aspects, so it is expected to provide a focal person for better coordination. The auditors should conduct regular briefings with the Finance & Compliance Manager and the team.

LOCATION OF ASSIGNMENT

The audit shall be carried out at Mercy Corps Nepal Office, Sanepa, Lalitpur, Nepal with close co-ordination with Finance and Compliance team.

CO-ORDINATION

Auditors should work in close coordination with the Finance & Compliance department in Kathmandu.

QUALIFICATION OF THE AUDIT FIRM

Any eligible Chartered Accountancy Firm as per the prevailing laws of Nepal meeting following additional criteria may submit its technical and financial proposal.

• Should be Certified “A” Class Audit Firm.
• At least 7 years of experience of Audit partner in Audit Practice.
• With a team of Qualified Senior Chartered Accountants and trained/experienced trainees having exposure to I/NGO audit.

AUDIT TEAM

The firm shall deploy at least one qualified Senior CA for auditing and the field visits, if any. The trainees must have at least 2 years of experience in I/NGO audits.

AUDIT FEE

Auditors should quote the lump sum fee with detail in line with each delivery inclusive of all costs such as lunch, local transportation, and other out of pocket expenses for Statutory Audit. It will be Mercy Corps’ responsibility to make necessary arrangements for transportation, accommodation, fooding as per MC’s policy during field visits, if any.

Required Documents for Submitting the Proposal

Qualified firms can send their Quotation to np-procurement@mercycorps.org  with the Title “Consultancy Services for External Audit for Fiscal Year 2024-025” along with the following documents by 25 May 2025.

• Most recent Certificate of Practice (COP)
• Latest Firm Renewal Certificate
• Current Tax Clearance Certificate
• Firm Profile (emphasizing relevant experience)
• Financial Proposal (Quotation)
• Supplier Information Form (SIF) - Link here

For any queries, please reach out to np-procurement@mercycorps.org

Diversity, Equity & Inclusion

Achieving our mission begins with how we build our team and work together. Through our commitment to enriching our organization with people of different origins, beliefs, backgrounds, and ways of thinking, we are better able to leverage the collective power of our teams and solve the world’s most complex challenges. We strive for a culture of trust and respect, where everyone contributes their perspectives and authentic selves, reaches their potential as individuals and teams, and collaborates to do the best work of their lives. We recognize that diversity and inclusion is a journey, and we are committed to learning, listening, and evolving to become more diverse, equitable and inclusive than we are today.

Equal Employment Opportunity

We are committed to providing an environment of respect and psychological safety where equal employment opportunities are available to all. We do not engage in or tolerate discrimination based on race, color, gender identity, gender expression, religion, age, sexual orientation, national or ethnic origin, disability (including HIV/AIDS status), marital status, military veteran status or any other protected group in the locations where we work.

Safeguarding & Ethics

Mercy Corps team members are expected to support all efforts toward accountability, specifically to our stakeholders and to international standards guiding international relief and development work, while actively engaging communities as equal partners in the design, monitoring and evaluation of our field projects. Team members are expected to conduct themselves in a professional manner and respect local laws, customs and MC's policies, procedures, and values always and in all in-country venues.