Call for Proposal: External Audit of Staff Remuneration and Benefits – HRNS Indonesia

Hanns R. Neumann Stiftung (HRNS) Indonesia is seeking proposals from qualified and experienced audit firms to conduct an external audit of staff remuneration and benefits for its country office in Muaradua, OKU Selatan. This audit is part of HRNS’ commitment to transparency, accountability, and compliance with donor requirements. Interested firms are invited to submit their proposals in accordance with the Terms of Reference (ToR) outlined below.

The deadline for submission is 20 September 2025, and proposals should be sent via email to: indonesia@hrnstiftung.org.

Version 1.1 of August 2025

HRNS’ Terms of Reference (ToR) for External Audit of Staff Remuneration and Benefits

1. Background

As part of the organization’s Internal Control System (ICS) and commitment to transparency, accountability, and compliance with donor requirements, a comprehensive salary and compensation audit shall be conducted in each HRNS country office. The audit will be carried out by external auditors and covers all staff members within the respective office.

The commissioning entity is HRNS Headquarters (HRNS HQ), Hamburg, Germany. The audit will be conducted in the HRNS Country Office, Muaradua, OKU Selatan, Indonesia. The HRNS Country Office will provide access to data and staff as required, while the external auditor will report directly to HRNS HQ Project Controlling and HQ Executive Management

2. Objectives and Scope of the Audit

The overall objective of this audit is to:

• Verify the accuracy and completeness of salary and benefits payments.
• Ensure compliance with contractual agreements, internal policies, and donor regulations.
• Identify irregularities, weaknesses, or risks in salary administration and propose recommendations for improvement.

3. Scope of Work

The audit will cover 100% of staff members (approx. 30 employees) and include the following areas for the audit period of 01/01/2024 to 31/12/2024:

3.1 Employee Master Data

• Verify that all employees are correctly recorded (name, address, bank account, etc.).
• Confirm that bank details match payroll records.
• Identify duplicate or inactive employee accounts still receiving payments.

3.2 Salary Payments

• Match actual payments (bank transactions) with booked personnel costs and employment contracts.
• Check for irregularities such as duplicate payments or sudden/unexplained salary increases.
• Review adherence to the four-eyes principle for salary changes and special payments.
• Verify that salary costs are booked in line with project budgets, including percentage allocations of working time and cost ceilings defined by donor contracts.
• Assess whether salary payments are properly documented and traceable.
• Identify any unauthorized changes or manipulations in the payroll system.
• Review access rights to payroll data and assess adequacy of permissions.

3.3 Additional Benefits and Allowances

• Verify whether benefits in addition to salaries were granted, such as:
  • Travel cost reimbursements.
  • Performance bonuses or incentives.
  • Housing allowances.
  • Company-provided vehicles or mobility subsidies.
  • Mobile phone or communication allowances.
  • Other benefits or in-kind contributions.
• Assess appropriateness and compliance with internal and contractual guidelines.

3.4 Overall Compensation Package

• Evaluate whether total compensation (salaries, allowances, and benefits) is transparent, traceable, and in line with:
  • Employment contracts.
  • Internal policies
  • Local legal requirements and donor regulations.
• Review justification and documentation for any deviations or extraordinary payments.

4. Methodology

The audit shall be carried out in accordance with international audit standards (ISA). The auditor is expected to apply internationally recognized auditing standards. The audit will consist of data analysis, review of documentation, interviews with relevant staff, and reconciliation of payroll with financial accounting records.

5. Reporting Lines & Responsibilities

• Commissioning Entity: HRNS Headquarters Hamburg, Germany.
• Audited Entity: HRNS Indonesia.
• Primary Contact: HRNS HQ Project Controlling.
• Local Support: The respective Country Manager and HR/Finance staff will facilitate access to required information.
• Meetings: HRNS HQ Project Controlling shall be included in both the opening and the closing meeting of the audit.
• Reporting: The auditor shall report directly to HRNS HQ Project Controlling and Executive Management. All reports must be submitted in English.

6. Deliverables

The final reporting from the auditor shall include an independent auditor’s report and the auditor’s opinion shall be clearly stated.

The reporting shall also include a Management letter that discloses all audit findings, as well as weaknesses identified during the audit process. The auditor shall make recommendations to address the identified findings and weaknesses. The recommendations shall be presented in priority order and with a risk classification.

7. Timeline

The audit is to be conducted during October 2025 and completed by 30 November 2025.

The period under review covers the entire calendar year 2024.

8. Required Qualifications of the Auditor

• Recognized audit firm or certified auditor with experience in payroll and HR-related audits.
• Proven track record in auditing NGOs or donor-funded projects.
• Internal audit experience
• Excellent English (spoken and written)
• Familiarity with applicable donor requirements.
• Ability to conduct fieldwork in Muaradua, OKU Selatan, Indonesia

9. Confidentiality

All information reviewed is confidential and may only be used for the purpose of this audit. The auditor shall ensure compliance with applicable data protection and confidentiality standards.

Approved by:

HRNS HQ Executive Management