Terms of Reference for Audit 2018-2019
Skills and Employment Programme, Bangladesh (SEP-B)

Background of SEP-B project

The Skills and Employment Programme of Bangladesh (SEP-B) is a DFID and SDC funded programme which aims to accelerate investment in technical and vocational education and training to create stronger links with productive work in the formal sector. The £21.4 million, 7 year project from April 2014 to March 2021, strives to cultivate an enabling policy environment and transform private sector training markets to support the absorption of large numbers of disadvantaged groups into skilled and semi-skilled employment. It supports a skills training market that targets the poor and those with limited education, with special attention to the development potential of women. Interventions will be tailored to employer needs in the Ready-Made Garments and Construction industries, and linked to jobs that improve earning potential and subsequently enable beneficiaries to graduate from poverty.

SEP-B is implemented by Palladium International Limited, in consortium with Swisscontact and British Council. The programme adheres to the TVET reform agenda of Bangladesh in coordination with the Ministry of Education.

The objective of SEP-B is to establish integrated, market-driven, skills training models in Bangladesh that incentivize higher productivity, efficiency and investment among trainees, private training providers and employers. Interventions are structured around three components:

  • Supporting private training providers to offer affordable quality training that enhances employability.
  • Supporting private sector industries to develop and operate industry-led training facilities
  • Contributing to policies and developing of skill training packages that meet the occupational training standards of the industry and can be used by above mentioned training systems.

Objective

To conduct an independent financial audit of the DFID and SDC funded Skills and Employment Programme of Bangladesh (SEP-B). The auditor is to express a professional opinion on the financial position of the project at the end of the reporting period and of the funds received and expenditures for the reporting period. The auditor should also confirm whether the reported expenditure was, in all material respects, supported by appropriate documentation and in agreement with financial
statements and been used in conformity with the provisions of the Head Contract, including any amendments thereto as contained in implementation letters, and with due attention to economy and efficiency.

Recipient of Service

The recipient of the SEP-B audit is DFID, and SDC in Bangladesh performed by the Company.

Scope of Work

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 project sites at different locations across the country. 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 April 2018 to 31 March 2019]. Specific focus will be:

  • To establish the total fund received within the audit period from DFID and SDC reported in the fund accountability statement as separate amounts for each donor where possible.
  • To establish that the funds have been recorded and 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 project assets per the asset register, their conditions and locations.
  • To establish whether the systems, procedures and controls, contractual or otherwise, adopted by SEP-B are efficient, effective and transparent.
  • To establish whether these systems, procedures and controls enable SEP-B to discharge its contractual obligations to DFID, including its financial and project management obligations.

Methodology

The approach should include but not be limited to:

  • Request and hold formal interviews with DFID and SDC programme representatives the Company and Project site 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 a sample of 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 signed). 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;
    • Call down contract between DFID and Palladium (amendments, if any);
    • The project procedural guidelines;
    • Records maintained at the project site office in Bangladesh and
    • Any other formal correspondence between DFID and the Company which may have effect on the focus, direction and expenditure activities of the programme.
  • Review a sample of invoices and vet 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.
    • Duly authorised timesheets are available for consulting days charged to DFID during the period under review.
    • Determine timesheets adequately reflect proper time and matches with the client invoice for input days.
  • Review the procurement process and procedures and select a sample 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.
    • Direct purchases up-to contract limit have been fully recorded with clear identification marks.
    • The physical existence and conditions of assets in project sites.
  • Prepare a project financial report showing receipts and expenditure summaries from 1 April 2018 to 31 March 2019 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 Palladium, DFID and SDC 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.

Deliverables / Reporting

  • All reports will be addressed to the Team Leader, SEP-B based in Dhaka. All reports and statements are expected to be delivered by 15 June 2019.
  • Audited financial report (hard and soft copies) for the period noted.
  • The report will give details of the number of locations visited and the size of samples tested.
  • A verification report on all programme funded assets.
  • A statement of compliance with DFID terms and conditions as contained in the Company’s contract.
  • Express an opinion on the cost effectiveness, accuracy and completeness (i.e. value for money) of the financial transactions for the period under review.
  • Company’s response on the auditors’ findings and recommendations.

Coordination

The Audit Firm will report to the nominated Company’s Representative.

Profile of Auditor

An audit firm with relevant experience in conducting similar audit assignments of international development programmes:

  • Prior experience in auditing DFID programmes is required.
  • Technical Proposal should include CVs of the audit team and detailed work plan for the assignment.
  • Availability to start and complete the audit assignment in mid-May-mid-Jun 2019 is a key selection criterion.
  • The CA firm who has audited SEP-B for the last consecutive two years, is ineligible to apply this year.

Submission Deadline:

Interested Chartered Accountancy Firms are requested to submit their technical and financial proposals along with the registration documents to the email: info@sudokkho.org indicating “Quotation for Financial Auditing Services” in the subject line, by 05 May 2019, 5:00 PM Bangladesh Time.