Request for Proposal
Terms of Reference for Project Audit

BACKGROUND

Feed the future Bangladesh Aquaculture Activity (BAA) is a five-year award by United States Agency for International Development (USAID) to WorldFish to sustain positive aquaculture sector growth through an inclusive market system approach. The activity aims to improve the sustainable livelihoods for a large number of smallholder farmers and other stakeholders linked to the aquaculture value chains in USAID’s Feed the Future Zone of Influence (ZOI) and the Resilience Focus Area (RFA).

The Activity has a sub-grant program which purpose is to identify rationales for investment and use partnerships and grants to leverage co-investment from the private sector and other organizations. Sub-grant amount are ranging from USD 25,000 to USD 250,000.

PURPOSE

The sub-grantee is required to undergo an audit as per Article XIII-Financial, Records, Monitoring and Audit of the fully executed Sub-grant Agreement between WorldFish and the sub-grantee.

OVERALL PRINCIPLES OF THE AUDIT

The auditor is required to plan, execute and report on audit engagement in order to form a professional judgement on the following matters relating to the activities of the sub-grantee in relation to Bangladesh Aquaculture Activity.

  • Principles of Financial Regularity
  • Existence, adequacy and effectiveness of internal controls
  • Conformity with the project objectives and compliance to the contractual conditions
  • Economical conduct of business and effective use of financial resources.

OBJECTIVES

The objective of the project audits are:

  • To review of the books of accounts, records of transactions, project documents and come up professional opinion of the sub-grant of the funds received and expenditures for the project period stated on the fully executed sub-grant agreement.
  • The project accounts (books of accounts), provide the basis for preparation of the project financial statement and are established to reflect the financial transactions in respect of the project, as maintained by the sub-grantees’ project team.
  • Recommendations on strengths, weaknesses, and improvements required in the sub-grantees’ financial system.

SCOPE OF THE AUDIT AND DOCUMENTS OF REFERENCE

The scope of the audit services shall cover the overall management of the project’s implementation. The following documents and matters are to be considered by the auditor as basic references for performing the audit:

  • Sub-grant agreement signed between WorldFish and Sub-grantee
  • Annexes to the sub-grant agreement
  • Project documents such as budgets, workplans, project description
  • Accounting, procurement human resources and other operational policies and procedures applied in relation to the project implementation
  • Supporting documents of all expenditures incurred and charged to the BAA funds
  • Financial and progress reports concerning BAA.
  • This terms of reference for the audit
  • Prior internal and external audit reports of the partner.

To this effect, the scope of the audit shall cover the following areas as they are performed in relation to BAA.

A forensic audit should also be done, including but not limited to the following and an additional areas that the auditor might consider necessary during the review.

  • Review of the Internal Control Framework for the project. This will include but not limited to assess whether internal control procedures are sufficient to prevent financial irregularities and misappropriation are in place; approval procedures and delegation of financial authority exists; segregation of duties, clarities on roles and responsibilities are identified; reconciliation procedures functions; procedures followed for verifying receipt and acknowledgement of goods and services with agreed quality and timeline.
  • Review and analyze the potential read flags that may indicated inappropriate financial reporting schemes, misappropriation of assets, inappropriate use of project asset and expenditures and liabilities for an improper purpose. The auditor should apply appropriate technique of detecting irregularities and deviations. The auditor must be proficient to thoroughly understand and be alert to potential red flags that are possible indicators of irregularities and likely indicators of areas requiring further analysis.
  • Determine total expenditure of the project and find out the categories (works, goods, services, operating and miscellaneous) under which these were claimed and whether right category and percentage of financing were used.
  • Conduct verifications which may be extended to third party check to confirm eligibility of expenditure especially for hired venues for training, workshops and business meetings.
  • Examine the advances from project account, especially for training events to determine eligibility of expenditure, i.e conforms to existing policy and rules and reasonableness of time for adjustment. Verify whether any form of advances are claimed as actual expenditure.
  • Make appropriate recommendations and discuss initial findings with WorldFish.

Finance

The audit work shall cover the adequacy and efficiency of the accounting and financial management of the project and compliance with the rules of accounting and record keeping of Article XIII of the Sub-grant agreement. These include budget control, approving authority, bank transactions and reconciliations, allocations of expenditures in conformity with the agreed budget, receipt of funds, disbursement of funds, recording of all financial transactions in accounting systems/records, reconciliation of information in expenditure reports to the sub-grantee’s accounting system and records, and records maintenance and control.

Procurement

The audit work shall cover the competitiveness; transparency and effectiveness of the procurement activities of the project in order to ensure that the project input purchased meet the requirement of sub-grantee’s and compliance with WorldFish and USAID policies.
Include the following:

  • Procurement thresholds, call for bids and proposals, evaluation of bids and proposals and approval/signature of contracts and purchase orders;
  • Receiving and inspection procedures to determine the conformity of the items supplied with the agreed specifications and, when applicable, the use of independent experts to inspect the delivery quality.
  • Management and control over the variation orders.

Human resources

The audit work shall cover competitiveness, transparency and effectiveness of the recruitment and hiring of personnel and include performance appraisal, attendance and control, calculation of salaries and entitlements, payroll preparation and payment, and management of personnel records.

General administration

The audit work shall cover travel activities, vehicle hire management, office premises and lease management, office communications, and records maintenance.

Expected Outcome/Report

The audit will be carried put in accordance with International Standards of Auditing. In conducting the audit, special attention should be paid to the following:

  • All the project funds have been used in accordance with the conditions of the signed sub-grant agreements, with due attention to economy and efficiency, and only for the purposed for which the financing was provided.
  • Goods and services financed have been procured in accordance with the relevant financing agreements;
  • All necessary supporting documents, records and accounts have been kept in respect of all project ventures reported.
  • The projects accounts have been in accordance with consistently applied International Accounting Standards and give a true and fair view of the financial situation of the project.

Duration

The audit work is expected to be completed within one month from the day of signing of the engagement letter. The timeline should include propose number of days for entrance meeting, audit field work, draft audit report, exit meeting, submission of final audit report.

The auditor is expected to produce:

Audit Opinion/Report

  • Separate management letter and,
  • The audit report, which will comprise the auditor’s opinion on the project financial statements, fund accountability and findings and recommendations.

Required documentation

The following documents will be requested for a contract:

  • A certificate of incorporation
  • List of partners and auditors who will be engage with the audit work
  • Tax Identification Number (TIN);
  • VAT registration number;
  • Other valid papers (provided by government institutions).

Submission details

Interested parties should submit a full technical and budget proposal to procurement.wfbd@worldfishcenter.org mentioning the title of the call for proposal in the subject line on or before December 10, 2021.