Water.org Indonesia OfficeTerms
of Reference for Partner Financial Audit
Terms of Reference (TOR) have been prepared with the aim of engaging a third
party consultant or firm for the purposes of a financial audit of a Water.org
Indonesian microfinance organization partners.
plans to conduct a financial audit of one of its partners who receive financial
assistance for water and sanitation financing activities. The programs to be
audited began in April 2015 and the audit should be comprehensive covering the
first 17 months of the program that runs.
part of internal monitoring processes and requirements, and for transparent
reporting to our stakeholders, Water.org engages third party consultants to
review financial transactions of our partner organizations to confirm that
funds granted by Water.org are being spent according to the funding agreement
between Water.org and the partner organization.
is a U.S.‐based non‐profit organization working to increase access to water and
sanitation through collaboration with a variety of local partners. Water.org’s
WaterCredit initiative leverages the existing relationships, infrastructure and
expertise of financial institutions to increase access to capital for water and
sanitation, and to educate and empower low‐income households to invest in water
and sanitation facilities. Water.org launched WaterCredit globally in 2003 to
provide financial institutions with targeted subsidies and technical assistance
to build their capacity to offer water and sanitation financial products to
those living at the base of the economic pyramid (BOP). WaterCredit supports a
range of financial institution activities related to the development of
sustainable water and sanitation loan portfolios, including:
Water and sanitation financial product
development and marketing;•
Water and sanitation education/training; and•
Institutional capacity building.
WaterCredit, financial institutions have flexibility to use their existing
lending methodologies and develop products that finance locally appropriate
water and sanitation facilities. Loan product design is based on market
research analyzing key variables such as local needs and preferences, existing
water and sanitation infrastructure and services, and product affordability. By
program end, financial institutions should have sustainable water and
sanitation microfinance products integrated into their on‐going product
Microfinance Partner The
microfinance partner is Syariah savings and credit cooperative currently
serving poor households through 110 branches in six provinces across Indonesia.
Overall, about 90% of the client households are located in rural and peri‐urban
areas. The microfinance partner uses a system of individual loans. The
microfinance partner was established to assist in the improvement of the living
standards of members, particularly in the economic field.
has a regular financial monitoring process for each partner that includes the
submission of a monthly financial expenditure report. This report and access to
Water.org staff, partner staff, and partner financial and accounting records
will be available to the 3rd party consultant. Additional background
materials such as a project narrative summary will be made available to the
consultant if requested.
Time Period:The period of
evaluation should cover from April 1st, 2015 through August 31,
All Water.org funds spent should be accounted for by reviewing financial
records and confirming that actual spending aligns with the amounts reported to
Water.org in the most recent comprehensive financial expenditure report.
This project will be based in partners’ head offices Lasem Rembang, Central
Java. The auditor will not need to visit the branch offices as part of the
Completion Time Period: The draft financial audit report should be
submitted to Water.org within 30 days from the start of the contract, and the
final report should be submitted within 10 days from receipt of feedback from
Experience: Water.org will engage an auditor with previous experience
of working with retail financial institutions and preferably NGO‐funded grant
of Conduct: Consultants will maintain independence and the highest
professional ethical standards in collecting and reviewing information and
presenting the assessment results. Consultants will not share audit findings
with the audited parties without the permission of Water.org. Consultants will
sign a non‐disclosure agreement committing to keep private all information
gathered during the audit process.
Framework: The consultant will familiarize themselves with the current
Water.org partner grant budget including the main categories and line‐item
activities. Using a cash basis (non‐accrual), the consultant will compare funds
reported spent by the partner with actual accounting records within the partner
organization. Consultant will have access to the most recent financial
expenditure report, partner bank statements, accounting practices/guidelines,
staff timesheets, meeting attendance lists, partner general ledger, purchase
receipts, invoices and other sources as needed.
Collection and Analysis: General points to be covered will include, but
are not limited to the following:
Water.org grant Identification of any
discrepancies in actual
expenses charged to
Water.org from financial report
sent to Water.org by partner. ii. Calculation of total amount of new investments
into the financial institution by third parties (e.g. banks, concessionary
lenders, etc.) to fund the water and sanitation loan portfolio, if any. iii. Review and assessment of partner program
financial procedures related to the program including, but not limited to
internal controls, asset control, record keeping, document signature
requirements, and financial reporting.iv. Recommendations for improving partner program
internal controls, asset control, record keeping, document signature
requirements, and financial reporting.
The consultant will develop an audit report which should include the items
mentioned under the Data Collection and Analysis section. A
draft version of the report should be submitted to Water.org. After which,
Water.org will have two weeks to provide feedback, at which point the
consultant will have an addition 10 days to submit a final version of the audit
the documents/reports pertaining to the audit will be kept confidential and
submitted to Water.org after the assignment is over.
consultant will be paid on fixed‐schedule basis and all indirect expenses such
as travel expenses should be included in the proposed budget.
must include at a minimum the following sections: 1) Discussion
of tasks to be undertaken by auditor and proposed methodology for collecting
information 2) Project
staffing plan and brief staff bios 3) Firm
qualifications and relevant work experience 4) Budget
following the template below and estimated number of days (from start to
finish) to complete work
|Item #||Cost Category||Unit Cost||
taxi fares, per diems)
||Total Personnel Expense||
|Supplies / Other||
||Total Non‐Personnel Expense||
should be submitted to Catur Nugroho, WaterCredit Officer firstname.lastname@example.org (cc:
email@example.com), no later than October
24th, 2016 noting “Financial
Audit Services – Rembang” in the subject line. Proposals submitted after
this date will not be considered. Water.org will prioritize proposals for the
audit to be completed before December 2016.