ASEAN Foundation – External Audit Needed

 
TERMS OF REFERENCE YEARLY EXTERNAL
AUDIT OF THE ASEAN FOUNDATION

 
I.          Introduction
 
The ASEAN Foundation is seeking
a registered qualified audit firm, preferably with relevant not-for-profit
sector expertise, to conduct audit services for the fiscal year 2015 covering
the period of 1 January to 31 December 2015. A yearly external audit is required as stipulated in the organisation’s
financial rules and regulation.
 
 
II.        Background
 
The ASEAN Foundation (AF)
was established in December 1997 by ASEAN Foreign Ministers in fulfilment of
the decision of the ASEAN Leaders. It is a non-profit ASEAN body under the
ASEAN Charter and is mandated to promote greater awareness of ASEAN and greater
interaction among the peoples of ASEAN, as well as their wider participation in
ASEAN activities.
 
AF
manages several funds, which are categorised as Endowment Fund, Operational
Fund and Project Funds.
 
 
 III.        Objective
 
The overall objectives of the audit
are:
 
·        
To determine if the organisation’s
accounting system provides accurate and adequate details of its financial
position and fiscal operations in accordance with generally accepted accounting
principles and the approved organisation budget
·        
An assessment of whether internal
controls are robust and are being adhered to, and a further description, in the
form of fact finding statement, of any specific weaknesses or other issues in
the organisation’s internal controls that may have been discovered during the
course of auditing
·        
To determine if the organisation is
managing and using its resources in an effective manner
·        
To determine if funds are being used
according to the currently approved budget
·        
Whether or not the financial
statements are free of material errors and present fairly financial position
and transactions
·        
Whether or not payments have been
approved in accordance with the organisation’s financial rules and regulations
·        
Whether or not the bank balance as
of 31 December 2015 has been confirmed with the bank for each account and
agrees with the accounting system
·        
Provide recommendations for
improvement to management
 
 
IV.       Audit Scope 
 
The audit shall cover the
adequacy of the accounting and financial operations and reporting systems of
the organisation.  These include budget
control, cash management, certification and approving authority, receipt of
funds, disbursement of funds, recording of all financial transactions in
expenditure reports, records maintenance and control.
 
Human
resources

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

The audit work shall cover
the competitiveness, transparency and effectiveness of the procurement
activities of the organisation in order to ensure the equipment and services
purchased meet the requirement of the organisation’s financial rules and regulations.

 
Asset
management

The audit work shall cover
equipment (typically vehicles and office equipment) purchased for the use of
the organisation. The procedures for receipts, storage, and disposal shall also
be reviewed.
 
Cash
management

The audit work
shall cover all cash funds held by the organisation and review procedure
safeguarding of cash.
 
General administration
The audit work
shall cover travel activities, vehicle management, office premises, office
management and records management.
 
Information system
The audit work
shall cover the information and communication systems and the control and
security of equipment and data.
 
 
V.         Methodology
 
The audit must
cover the financial operations, the use and control of non-expendable
equipment; as well as provide detailed observations and comments on the
management structure and the monitoring, evaluation and reporting mechanisms.
The following aspects are to be considered:
 
·        
The rate of delivery
·        
Financial accounting, monitoring and
reporting
·        
Systems for recording and reporting on
resources utilisation
·        
Equipment use and management
·        
Management structure, including the
adequacy of internal control and record-keeping mechanisms
·        
List of asset bought
 
The scope of
the audit services required should be sufficiently clear to properly define
what is expected of the auditor but not in any way restricts the audit
procedures or techniques the auditor may wish to use to form an opinion. It
should specify at least the following:
 
·        
That the audit will be carried out in
accordance with generally accepted accounting standards
·        
That the period of activities to be
audited is from 1 January 2015 to 31 December 2015
·        

That the auditor will state in the
audit report if the audit was not in conformity with any of the above and
indicate the alternative standards or procedures followed
·        
That the auditor will provide an
opinion as to the overall financial situation of the organisation for the
period from 1 January 2015 to 31 December 2015 and will certify:
–         
The Summary of Expenditure for the
period from 1 January 2015 to 31 December 2015
–         
The cash position reported by the
organisation as at 31 December 2015 and
–         
The status of assets and equipment
held by the organisation as at 31 December 2015
 
VI.       The Auditor Report
and Management Letter

 
The expected
contents of the audit report and management letter and the topics/areas to be
covered by the auditors should include the following:
 
Audit Report
 
The audit
report should clearly indicate the auditor’s opinion. This would include at
least the following:
 
·        
That it is a
standard purpose report and its intended use
·        
The audit standards that were applied
·        
The period
covered by the opinion
·        
The scope
limitation for those transactions
·        
Whether the Statement of Assets and
Equipment is fairly and adequately presented as at 31 December 2015
·        
Whether the Statement of Cash Position
reported by the organisation is fairly and adequately presented as 31 December
2015
 
The English
language shall be used for all reports and correspondence.
 

Management Letter
 
The management
letter should cover the following topics/issues:
 
·        
An assessment of the organisation’s internal
control system with equal emphasis on (i) the effectiveness of the system in
providing management with useful and timely information for the proper
management of the organisation
and (ii) the general effectiveness of the internal control system in protecting
the assets and resources of the organisation.
·        
A description of any specific internal
control weaknesses noted in the financial management of the organisation and
the audit procedures followed to address or compensate for the weaknesses.
Recommendations to resolve/eliminate the internal control weaknesses noted
should be included. 
 
The management
letter should also include the following:
 
·        
The categorisation of audit findings
by risk severity: High, Medium, or Low 
Definition
of these categories are given in Annex 1
·        
The classification of possible causes
of the audit findings
·        
Comments as to whether recommendations
made in the management letter for the previous audit were implemented or, if not,
the implementation status
·        
Management comments/response, as
applicable
 
The audit
report should be in English formatted in A4 size and the number of copies submitted are five (5) hard copies and one (1) electronic copy/pdf
version.
 
 
 VII.      Qualifications of the auditor
 
·        
The Auditors/Audit Team members should
have a sound track record in conducting an audit review of international
organizations or public entities with not for profit experience.
·        
The Auditors/Audit Team members should
have working knowledge in Indonesia language, as some vouchers,
receipts/additional reports may not be available in English
·        
The Auditor/Audit Team members must be
completely impartial and independent from all aspects of management or
financial interests in the entity being audited. The auditors/audit team
members should not, during the period covered by the audit nor during the

undertaking of the audit, be employed by, serve as director for, or have any
financial or close business relationships with any senior participant in the
management of the entity.
·        
The Auditors/Audit Team members should
be experienced in applying audit standards whichever is applicable for the
audit. The auditor must employ adequate staff with appropriate professional
qualifications and suitable experience with including experience in auditing
the accounts of entities comparable in size and complexity to the entity being
audited.
·        
Curriculum vitae (CVs) should be
provided by the principal of the firm of auditors who would be responsible for
signing the opinion, together with the CVs of managers, supervisors and key
personnel proposed as part of the audit team. CVs should include details on
audits carried out by the applicable staff, including ongoing assignments
indicating capability and capacity to undertake the audit.
·        
The Audit Firm should state its legal
nature, the total number of auditors who are owners and/or employees of the
firm as well as auditing services provided by the firm and state whether the
firm has any associations or affiliation with any other professional firm as
auditors in the Indonesia or abroad.
 
 
VIII.    PROPOSAL REQUIREMENTS

 
·        
Firm Background and Experience: The
proposal should describe your firm’s expertise and any relevant not-for-profit
industry experience.  Also, include the
size of your firm, other areas, in which the firm specializes, and significant
professional memberships and affiliations. 

·        
Identify Key Personnel in the
Engagement Team: Please explain your approach to staffing and provide
information on the professionals who will be engaged in the audit activities,
including related experience of the primary contact.  
·        
Approach/Methodology to Conducting the
Review: Please describe your firm’s auditing philosophy and methodology.  Please detail the steps of the engagements,
noting stages that would directly involve our personnel, including your overall
expectations of client involvement.
·        
References: Please
list contact information for at least three organizations similar to the AF.
 
 
IX. Fees
 
Please outline
your fee structure for the audit in
Indonesia Rupiah (IDR). Please include an estimate of any
expenses necessary to adequately perform the work required and related
activities needed to maintain a quality client relationship.
 
The cost of preparing a proposal
and conducting the pre-proposal survey or any meetings for verbal presentations
shall be borne by your company, regardless of the conduct or outcome of the
solicitation process.  Proposals must
offer services for the total requirements. 
All proposals must remain valid and open for acceptance for a period of
100 (one hundred) days after the date specified for receipt of proposals.
 
 
X.         Proposal Scoring
 
Proposals will
be evaluated in two parts. The technical proposal shall bear 60% of  the total marks while the financial proposal
shall bear 40% of the total marks.
 
Functionality
evaluation criteria 
 

No
 
Description Weight
1 Experience, Skills and Ability of Service Provider
·        
Past experience in similar work of
this nature
·        
Team member experience( accompanied
by brief CV’s)
·        
Bidders ‘track record
·        
Ability of the bidder to fulfill the
AF’s requirements
30
2 Technical Approach and Execution Plan 
·        
Proposals must contain the  details 
of  the  proposed approach to be adopted in order to
deliver the service in accordance with the TOR 
20
3 Project management 
·        
Bidder must allocate a project
manager for this project
·        
The proposal should contain a work
plan, showing tasks, timelines
·        
Did 
the  bidder  give, submit  clear 
proposed  project timelines for the project
·        
Does 
the project plan cater for  risk
management associated with this project and mitigation strategy?
·        
Project management and turn around
management (Ability to Deliver on Time).  

15
4 References
·        
Did  
the   bidder   submit  
at   least  three  
relevant  and contactable
clients  that were serviced    in 
the past  12 months 
10
5 Capacity
·        
Proposals  should 
clearly  indicate  whether 
or   not  bid participants have the  capacity to meet the requirements of the
TOR 
 
25

 
Bidders are
required to score a minimum of 65% points on functionality to qualify to be
evaluated in the next level (price). Bidders who do not score the minimum of
65% points on functionality will be disqualified and not be evaluated on price. 
 
 
XI        Timing of the Audit
 

Activities Date
Audit Field Work 20 January -14 February 2016
Draft Audit Report 14 March 2016
Final Audit Report End of April – 1st week of May 2016

 
 
XII.      Submission and
Deadline of Offers

 
Submission:
The technical
and fee should be in two (2) copies and with envelopes properly sealed and labelled,
mentioning clearly “External Financial Audit”.
 
Deadline
Submission of
offers is Wednesday, 23 December 2015
 
Offers are to
be submitted in hardcopy or electronically to
The Procurement Committee, ASEAN Foundation
Jl Sam
Ratulangi No 2, Menteng, Jakarta
Phone: +62 21
3192 4833
Or email
to:  [email protected]
 
please visit our website at  http://www.aseanfoundation.org/job/terms-of-reference-yearly-external-audit-of-the-asean-foundation
 

ANNEX 1: CATEGORISATION OF AUDIT
FINDINGS BY RISK SEVERITY

High Action
that is considered imperative to ensure that the Foundation is not exposed to
high risks (i.e. failure to take action could result in major consequences
and issues).
Medium Action
that is considered necessary to avoid exposure to significant risks (i.e. failure
to take action could result in significant consequences).
Low Action
that is considered desirable and should result in enhanced control or better
value for money.

 


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