Short-term Consultancy: Auditor DC-KEN21.01

Type of Audit: In depth

Location: Home-based with field mission travel to Isiolo County, Kenya

Languages Required: English

Application Deadline: 11th December 2022

Starting Date: 30th January 2023

Auditing Period: From 1st January 2022 to 31st December 2022

Project Title: Promotion of climate resilient communities and capacity building of local institutions and community organizations in Isiolo County

Total Project Budget: EURO 666,668

Annual Project Budget: EURO 217,467

Background and Organizational Setting

Hoffnungszeichen | Sign of Hope e.V. is a Christian motivated organization for Human Rights, Humanitarian Aid and Development Cooperation. Based in Constance, Germany, Sign of Hope is dedicated to helping those in distress and exploited people worldwide.

An audit is commissioned under the German Federal Ministry of Economic Cooperation and Development (BMZ) funding guidelines for development projects run by private German executing agencies.

Hoffnungszeichen | Sign of Hope e.V. will be the private German executing agency and the contracting party, while Merti Integrated Development Programme (MID-P) will be the local implementing agency.

The project’s goal is to contribute to the sustainable livelihood of the people of Isiolo County by increasing resilience to the impacts of climate change. Through the project, climate change adaptation capacity at the micro (1,500 households), meso (45 community organizations), and macro (policy makers, government agencies, institutions) levels is significantly increased. This will be achieved through implementation of three interconnected results areas (outputs) including; 1) 1,000 pastoralists and 300 agro-pastoralists organized into groups and have improved their resilience to the impacts of climate change through the application of effective livelihood systems; 2) The capacities of community-based institutions for natural resource management, conflict prevention and disaster prevention are strengthened; and 3) The capacities of local authorities, media and institutions to adapt to the impacts of climate change are strengthened and that the target group is able to participate in decision-making processes and has access to meteorological information (See annex 1) The project operates in six rural wards (Chari, Cherab, Sericho, Garbatulla, Kinna and Oldonyiro) in Isiolo County. The direct target group will be 1,000 pastoralists and 300 agro-pastoralists (each representing the corresponding number of households). The indirect target group includes approximately 9,100 family and community members of the direct target group. Min. 40% of the target group are women, although a higher percentage is targeted.

Audit Objectives

The purpose of the in-depth audit is to provide Hoffnungszeichen | Sign of Hope e.V. with a sound basis for its accountability, transparency and accuracy in the financial disclosure towards the funding agency BMZ.

This in-depth audit will verify the compliance with standards of the funding agency BMZ, Hoffnungszeichen | Sign of Hope e.V., national regulations and the international accounting standards.

The auditor will review the project’s financial documents, receipts lists, records of transactions, all vouchers and receipts disbursed, and relevant project documents in order to come up with a professional, independent opinion on the financial accounting of the project “Promotion of climate resilient communities and capacity building of local institutions and community organizations in Isiolo County” for all funds received and expended by MID-P from 1st January 2022 to 31st December 2022.

Additionally, the audit shall give recommendations on strengths, weaknesses, and required improvement in the project-related financial and human resources management systems of MID-P.

The audit will support the project quality assurance measures implemented by Hoffnungszeichen | Sign of Hope e.V. and contribute to the decision-making process with regard to the project management and monitoring of finances by Hoffnungszeichen | Sign of Hope e.V. and MID-P.

Expected Deliverables

The auditor is expected to produce an audit report, an audit certificate and a management letter), which will comprise the following:

1. Presentation of the scope and mandate of the audit, as well as the list of documents that formed the evidence for the audit,
2. An opinion whether financial statements (statement of accounts) are issued in accordance with the financial reporting framework of the project, BMZ requirements and an internationally recognized accounting standard,
3. A checked, signed and stamped list of all project costs receipts, sorted by BMZ budget lines (list can be provided by the local implementing partner),
4. Recommendations on identified shortcomings, and, if applicable, comments on the follow-up of audit observations and recommendations from previous years.

Audit documents should be issued in English.

Scope of the Audit

The audit should focus on the following:

• The correctness and completeness of the accounting records,
• The financial report, showing all project related income and expenditure structured by budget lines,
• Deviations of expenditure by budget lines. The expenditure, which exceeds or falls below the budget appropriations by more than 30 %, shall be explained separately, if the approval of the BMZ has not previously been obtained,
• That receipts and relevant supporting documents are available for all project related income and expenditures,
• The management of the funds made available, which includes the transfer of project funds, all interest earned from the project funds during the reporting period and further income generated by the project,
• Reviewing the appropriate use of funds according to the project objectives,
• Evaluation of the efficiency and cost-effectiveness of the usage of funds,
• Budget adherence through the comparison between budgeted and actual costs in the currency in which the expenditure was incurred. The audit report will not convert the examined amounts into the Euro amounts,
• Reviewing if personnel costs and social security contributions conform to the regulations in the project country and are locally comparable,
• The economical use of the project equipment and assets,
• The inventory and the use of capital items, their whereabouts and their purposive usage,
• Compliance with the legal framework of the project (project agreements and annexes, contracts, etc.) and the donor requirements,
• Compliance with the policies of the local implementing partner regarding procurement, financial administration, human resources management and travel.

Procedures and Communication

The auditor will be given access to all necessary documents in the project offices through the local implementing partner MID-P as well as relevant donor documents through Hoffnungszeichen | Sign of Hope e.V.

The auditor will be responsible to set up a schedule in agreement with the local implementing partner MID-P. Any expenses for field trips, postal and translation services and other expenses shall be included in the auditor’s proposed budget. MID-P will support the auditor with logistics and arrangements, however, all payments of the contract will be made directly by Hoffnungszeichen | Sign of Hope e.V.

Qualifications and Experience

• Necessary qualification to serve as a recognized independent auditing authority,
• Minimum of five (5) years of experience conducting external independent audits of projects funded by international institutional donors in Kenya.