Terms of Reference (ToR) for Hiring of an Audit Firm for Statutory Audit of iDE NEPAL Offices 2079/80

Terms of Reference (ToR) for

Hiring of an Audit Firm for Statutory Audit of iDE NEPAL Offices 2079/80

Background

iDE has been working in Nepal since 1992 from irrigation and good-quality seeds to, more recently, rural collection centers where farmers can sell their produce, we provide simple innovations that help rural communities get out of poverty and adapt to climate change. iDE believe markets are the most powerful tool for creating prosperity, building resilience, and ultimately ending poverty.

Objective of the Audit

The objective of the audit of the Financial Statement (FS) is to enable the auditor to express an independent professional opinion on the financial position , system of internal controls, compliance with agreement terms, applicable laws and regulations of International Development Enterprises Nepal of the funds received and expenditures for the accounting period starting from 15 July 2022 and ending 16 July 2023,as reported by the financial statement and the books of accounts maintained for iDE Nepal. 

Scope of Work

The audit shall cover overall aspect of IDE NEPAL inclusive of Finance, Procurement, Assets Management, Cash Management, Human Resources, and General Administration and to identify issues and areas for improvement.

General

• Obtain and examination of all relevant documents /information of account, inventory, fixed assets, personnel and other information deemed required necessary for the auditing purpose.
• Accomplish financial audit of grant received from iDE HQ and Donors. Test of the accounts as to their fairness and reliability.
• Ensure that financial and physical assets and resources are used in accordance with instructions or regulations and in the most effective and economic manner.
• An assessment of the compliance of the project agreement.
• An assessment and evaluation of project reports prepared for the project and monitoring of cash flows.
• Establishing the completeness, accuracy and regularity of expenditure and income as accounted for in the project reports.
• Verification, where appropriate of inventories and accounts and check that holdings have been verified by physical inspections and counts.
• An assessment of compliance with the Income Tax Act, 2058 and other local rules and regulation applicable for the organization.
• An assessment of the internal control system relating to the disbursement of staff advances and verification of the closing balances.
• Verification of the budgeted expenditure and the actual expenditure in accordance with project agreement and the DIP.
• An assessment of the state of VAT Refund procedure for the projects where applicable
• An assessment of monitoring procedure of iDE to partners.
• Submit audit report with necessary recommendation and suggestion to the management for the necessary action.

Fixed Asset Management System

• Verification whether fixed assets have been procured after fulfilling all the criteria as prescribed in the financial policy.
• Review of the internal control system relating to procurement, use, and disposal of fixed assets.
• Verification whether separate donor wise fixed asset register have been maintained or not
• Conduct physical verification of the fixed assets and ensure existence of the asset as mentioned in the fixed asset register.
• Verification of the log book of vehicle to ensure proper use and that the consumption of the fuel is in consonance with distance travelled and mileage.

Human Resource Management System

• Review of Human Resource Policy Manual (HRPM) of iDE Nepal and amendments made to it.
• An assessment of the compliance of the HRPM for the recruitment, appointment, compensation, working Environment, Staff Appraisal and termination.
• Verification of the personnel files and an assessment of the compliance iDE HRPM.
• Verification of the time sheets/attendance Records and an assessment of the compliance of iDE HRPM.
• Verification of appointment letter, timesheet, leaves for the payments of salary and compensation to the staff. (i.e, whether payment have been made as per approved time sheets and attendance register, whether staffs have been assigned to the project as per the appointment letter, whether salary as per the appointment letter matched with the salary provided etc.)

Partner Audit

• Review of procedures as prescribed by the financial policy has been followed for the selection of the partner.
• Obtain and review of the agreement with the partners and an assessment of the compliance with the agreement
• An assessment of the compliance of the charter, financial policy, income tax act 2058 and other rules and regulations applicable for the partner.
• Conduct test of controls and substantiative audit procedures to ensure trueness and fairness of the books of account.
• Review of the Human Resource policy and procedure of the partner to ensure that they are in agreement with the missions and goals of Human Resource Policy of iDE Nepal.
• Review of the procurement policy of the partner. (Eg Purchase Requisition, Purchase Order, Good Receipt Note, Quotations, Suppliers bill, Receipt, inventory Register etc)
• Verify fixed asset register and conduct physical verification of the fixed asset and inventory.
• Verify that the reports have been timely prepared and forwarded so as meet the reporting deadline.
• Verify that the expenditures have been incurred and payments have been made after obtaining proper supporting documents and are within the budget. And expenditures are reasonably incurred for the implementation of the program.
• Verification of the procedures of disbursement of the fund to the regional offices and partners and reconciliation statement of fund balances of the Regional Offices and partners with the books of account of Head office.

Auditor’s Reports/ Deliverables

Audit report shall contain:

• Auditors' opinion on the financial statement of iDE Nepal
• Management Letter comprising of findings and observations, along with recommendations for improving the management system of iDE Nepal and implementing partners.

Audit Time Frame

The deliverables mentioned above must be submitted by 5th September, 2023.

Proposals to be Submitted:

A technical proposal including

• Description of how your skills and experience match the TOR requirements,
• Proposed methodology
• CV of principal auditor who would be responsible for signing the report along with Managers, Supervisors and key personnel proposed as part of the audit team
• Profile of the consultancy firm
• Certificate of Practice (COP) with renewal
• FIRM Registration Certificate in ICAN
• Latest Tax clearance certificate
• Minimum 3 years of experience 

Financial proposal: Including a detailed budget sheet with breakdowns excluding the out of pocket expenses. 

Interested Audit Firms are requested to submit their Financial Proposal and technical proposal by 30th July 2023 (Sunday), 17:00 Hrs to in email at nepal@ideglobal.org