Background
World Vision International in Vietnam, with funding from Aktion Deutschland Hilft (ADH), is implementing the project "Increasing the Resilience to Risks of Ethnic Minorities in Dien Bien" The project aims to enhance the disaster resilience of ethnic minority communities in Dien Bien Province through capacity building, climate change adaptation (CCA), and disaster risk reduction (DRR) interventions at the community and school levels.
This Terms of Reference (TOR) is intended to define the scope, objectives, methodology, and reporting requirements for the external audit of the project's financials. The audit will assess the financial accountability of the project and ensure that funds provided by ADH have been appropriately utilized according to the contractual obligations.
Key Responsibilities
II. SCOPE OF AUDIT
The audit will cover all financial and accounting records relating to the IREM Project during the period 1st October 2023 to 30th November 2024. The audit will verify and control the financial reports submitted to ADH by WVI-V. Specific focus areas include:
- Funds Release Order (Mittelabruf) and Budget: Ensure that all expenses align with the approved budget and financial management guidelines.
- Final Report and Financial Report: Examine financial reports submitted to ADH, ensuring they reflect accurate and complete expenditure.
- Subcontractors (if applicable): Review the details and transactions involving subcontractors to ensure compliance with procurement and contracting procedures.
The auditors will be given full access to relevant documentation, which are relevant to this audit. All information reviewed is to be treated in confidence.
III. AUDIT OBJECTIVES
The primary objective of the audit is to verify the financial integrity of the IREM Project by ensuring that:
- Expenses are supported by original proofs and have been properly recorded and accounted for.
- Expenses were incurred during the project period and are related to project activities.
- Expenses have been authorized in line with internal and donor-approved financial guidelines.
- The method of currency conversion from local currency (VND) to Euro is consistent with standard accounting practices.
Additionally, the audit will assess compliance with WVI and ADH financial policies, ensuring that resources are used efficiently and in accordance with donor requirements.
IV. AUDIT METHODOLOGY
The audit will be conducted following international auditing standards, focusing on the inspection of original supporting documentation and compliance with applicable accounting practices. The audit techniques may include, but are not limited to:
- Review of original invoices, receipts, and contracts supporting the expenditures.
- Sampling of transactions to ensure consistency and adherence to financial guidelines.
- Reconciliation of accounting records with bank statements and cash ledgers.
- Review of payroll and personnel records to verify employment contracts and time dedicated to the project.
- Assessment of procurement processes, ensuring compliance with tendering and contracting procedures.
The auditors are expected to use their professional judgment to determine the sample size and scope necessary to form an opinion on the financial health of the project.
V. REPORTING REQUIREMENTS
The auditors will provide a draft report of their findings no later than one month after the fieldwork is completed. This report will include:
- Audit opinion using the format provided in Annex II of this TOR.
- Management summary that outlines key findings, conclusions, and any irregularities detected.
- Recommendations for improving financial management and control procedures.
After reviewing the draft report with WVI-V and WVG, the auditors will finalize the report. The final audit report must include:
- Analysis of eligible and ineligible costs, organized by budget category, with proposed adjustments where necessary.
- Summary of differences detected, highlighting any discrepancies between reported and audited figures.
- Comments from WVI-V addressing audit findings.
The final report, in English, must be submitted to WVI-V no later than 14th March 2025. A management letter will also be provided, addressing issues such as fraud, lack of collaboration, or other significant concerns.
VI. AUDIT DELIVERABLES
- Draft Audit Report (including audit opinion, management summary, and recommendations)
- Final Audit Report (approved after feedback from WVI-V and WVG)
- Management Letter (confidential, for internal use)
Audit reports must to be issued in Euro using the weighted average exchange rate of the direct transfers done during the project.
All reports must be written in English and adhere to the formats provided in Annex II and III.
VII. KEY QUALIFICATIONS OF THE AUDIT FIRM
To be eligible for this assignment, the audit firm must meet the following criteria:
- Independence: The audit firm must demonstrate independence from WVI-V and its subcontractors, with no conflicts of interest.
- Professional Certification: The audit firm must be registered with a recognized professional body and comply with international auditing standards.
- Experience in NGO Auditing: The firm must have at least 5 years of experience auditing NGOs in Vietnam, and a strong understanding of donor-funded projects, especially those involving disaster risk reduction, climate change adaptation, and community resilience.
- Expertise in Development Projects: The audit firm should have prior experience auditing projects funded by international donors.
- Multidisciplinary Team: The audit team should consist of certified auditors with relevant experience in financial and compliance audits of international development projects.
VIII. BUDGET
The total budget for the audit service is 5,050 USD (4,717.66 EURO). This amount will cover all related expenses, including fieldwork, reporting, and any other relevant activities.
IX. TIMELINE
Fieldwork commencement: 15th January 2025
Draft audit report submission: 15th February 2025
Feedback from WVI-V and WVG: 07th March 2025
Final audit report submission to WVI-V: No later than 14th March 2025
X. SUBMISSION OF PROPOSALS
Interested audit firms should submit the following documents:
- Technical proposal detailing the audit approach and methodology
- Detailed CVs of key personnel assigned to the audit
- Financial proposal including the breakdown of audit costs (attached template)
- Previous experience and references of similar audits conducted
- A valid audit firm registration certificate
Proposals must be submitted no later than November 15, 2024.
XI. CONFIDENTIALITY
All information provided to the auditors by WVI-V, as well as any documents reviewed, must be treated as confidential. The auditors must not disclose any information without prior written consent from WVI-V.
XII. SUBMISSION GUIDELINES
Audit firms interested in conducting the audit should submit the following documents:
- A proposal outlining the firm's qualifications, experience, and audit methodology.
- A detailed work plan and timeline.
- The CVs of key audit team members.
- A financial proposal including audit fees and expenses.
