Request for Expression of Interest for External Audit Services

August 28, 2021

1. Introduction

The African Women’s Development and Communication Network (FEMNET) is a Pan-African membership-based network set up in 1988 to advance African women’s development, gender equality and women’s and girls’ human rights. Over the years FEMNET has played a central role in sharing information, experiences, ideas, and strategies among African women’s NGOs in order to strengthen women’s capacity to participate effectively in the development processes on the continent. FEMNET has played a lead role in building the women’s movement in Africa and has ensured that African women voices are amplified, and influence decisions made at national, regional and global levels, which have direct and indirect impact on their lives. (Visit our website www.femnet.org for more information).

FEMNET operates through its Regional Secretariat based in Nairobi, Kenya whose programs are informed by its member organizations most of which are national women’s networks, consortia or umbrella organizations spread out in over 50 countries in Africa.

The supreme organ of the Network is the General Assembly (GA) which is convened tri-annually. Next in hierarchy is a Board of Directors including the ED who is the ex-officio member and secretary to the Board. The Secretariat is headed by the ED with 27 staff on average. All programs and sections are organized under two departments of programs and finance and operations.

The BOD oversees recruiting external auditors as and when necessary, in line with the organization’s constitution. The GA has the mandate to ratify the appointment of external auditors. FEMNET, therefore issues REOI for external audit services, the recruitment of which is expected to be concluded and tabled before the GA slated for end of September 2021. The auditors so appointed will be expected to be in office for the 2022 financial year as the latest.

2. Purpose

The purpose of this REOI is to set out the basis and guidelines on which the audit firm will be appointed FEMNET’s external auditors and the respective areas of responsibility of the organization and that of the auditors.

3. Terms of Reference

3.1 Audit Standards, Scope, Reporting and General Provisions:

3.1.1 FEMNET’s Board of Directors (BOD) are responsible for maintaining proper accounting records and preparing financial statements which give a true and fair view, and which are prepared in accordance with International Financial Reporting Standards and comply with the NGO Co-ordination Act.

The Board will also be responsible for making available to the auditors, as and when required:

all the organizations accounting records,
all other records and related information, including minutes of all management, Board and General Members Meetings, Programming Conference and General Assembly,
Project appraisal documents, grant agreements and project progress reports,
Progress in implementation of audit recommendations,
Any policy created or reviewed in the recent past, and
Any other documents that might be necessary for the audit purposes as guided by the relevant standards and practices.

Besides the documents availed to auditor above, the organization will also facilitate the auditor to get direct confirmations from relevant third parties (amounts disbursed and outstanding from donors, bank balances, sub-grantees, and coalition partners’ accounts etc.)

3.1.2 As statutory auditors, your objective under the NGO Coordination Act is to examine the financial statements presented to you by the board and then report to the members; as the auditors you have a statutory responsibility to report to the members as to whether in your opinion the financial statements have been properly prepared and comply with the NGO Coordination Act and, whether they give a true and fair view.

In arriving at your opinion, you are also required to consider and to report on the following matters.

Whether proper books have been kept by the organization.
Whether the organization’s financial statements agree with the books of account.
Whether you have obtained all the information and explanations which you consider necessary for the purpose of the audit.
Examine financial budgets and compare with activities to gain assurance that the activities are accomplished within the set budget levels and report on variances where necessary. Also examine annual work plans against accomplished activities.

In addition, there are certain matters which according to the circumstances, need to be dealt within the report. For example, where financial statements do not disclose statutory information, the NGO Coordination Act may require the auditors to disclose this in their report.

3.1.3 The audit will be carried out in accordance with International Standard on Auditing (all relevant ISA including but limited to ISA 800 / 805 on the objective and scope of audit). It will also be conducted in such manner as the auditors consider necessary to fulfil their responsibilities and will include such tests of transactions and of the existence and valuation of assets and liabilities as they consider necessary. In order to assess its adequacy as a basis for the preparation of the financial statements and to establish whether proper accounting records have been maintained, the auditors shall obtain an understanding of the accounting system. They shall endeavor to obtain such relevant and reliable evidence, as they consider sufficient to enable them draw reasonable conclusion therefrom.

Although the responsibility for identifying weaknesses in the organization’s systems, preventing errors, irregularities and /or fraud, remains with the Board, the audit should be designed and planned so as to have reasonable assurance that any material misstatements, irregularities and /or fraud in the organizations financial statements is detected, brought to the attention of the board and they shall report them accordingly.

3.1.4 The auditors have a professional responsibility to report if the financial statements do not comply in any material respect with International Financial Reporting Standards.

The auditors are expected to review the financial statements to ensure they meet requirements of financiers/donors. Regarding specific project, activity and /or Grant audits protocols, Special Attention should be paid by auditors as to whether:

All project resources (from funding partners, FEMNET’s contributions, project generated income etc.) have been accounted for and used in accordance with the contributions of the Grant Agreements, specific funder applicable policies/ procedures/ guidelines and other relevant instruments with due attention to economy and efficiency and only for the purposes for which the funding were provided
Goods and services financed have been procured in accordance with sound procurement practices spelled out in the Organization’s procurement policy and other relevant operating Manuals and Procedures, and in line with donor procurement guidelines for goods and services procured under their fund.
All necessary supporting documents, records and accounts have been kept in respect of all Project activities, with clear linkages between the books of account and reports presented to donors.
The overall internal control framework as well as the risk management, and the existing practices and procedures are sound, in line with the approved Policies and shared with the financing partners.
The amounts claimed from the donors by the Project/ activity and the disbursements made by those donors are reconciling. The disbursements made by donors are properly recorded in the Project Financial Reports (PFRs) and are shown as a note or attachment to the audited consolidated financial statements.
Expenditures from donor funds are made in line with the Grant Agreement, approved budget and work plans, specific donor applicable procedures and guidelines. Such expenditures contrary to these instruments are reported by the auditor separately in the Management Letter or reflected in the audit report as appropriate.
The PFRs have been prepared in accordance with International Accounting Standards or Generally Accepted Accounting Principles and Practices as appropriate and give a true and fair view of the financial position of the Project/program as at the Project’s Financial Year-End resources and expenditures for the period being audited.
Specific areas of attention with regard to PFRs includes.

i. Special requirements for fund audit for Embassy of Sweden, RFSU, Hivos, EU expenditure verification, Dutch Ministry of Foreign Affairs, FCDO (formerly DFID) etc.

ii. Project special accounts operations

Project Financial Reports (PFRs), The minimum provision includes:

i. A simplified Balance sheet, reflecting assets, liabilities and funding of the project based on accrual or cash basis as appropriate

ii. A statement of sources and uses of funds / cash receipts and payments which recognizes all cash receipts, cash payments, cash balances controlled by the organization for specific projects.

iii. Separately identify payments and cash by third parties including donors on behalf of the organization

iv. The accounting policies adopted and explanatory notes

v. Some Funding Partners have other unique requirements (not explicitly specified here) regarding presentation and attention to some issues. The auditors will have to familiarize themselves with these conditions specified in the Grant Agreement, including performance of agreed upon procedures under ISRS 4400.

3.1.5 The auditors will conduct an in-depth and exhaustive review of the internal control systems to have sufficient knowledge of the procedures underpinning the systems, as contained in the Constitution, Finance Policy and Accounts Procedure Manual, Procurement policy etc. and donor guidelines and applicable grant agreements. In the process of reviewing the internal control system, the auditor needs to examine the following areas:

Governance – Effectiveness of governing body (appointment, frequency of meetings, quorum, substantive agenda & compliance with governing body’s TOR, code of conduct, non-conflict of Interest etc.) FEMNET has had some governance challenges which the auditors are expected examine its general effects and make recommendations.
Achievement of Objectives – Implementation of programs/activities are in line approved consolidated work plans, grant agreements and work plan as approved by donors.
Budget Utilization – Adherence to approved budgets as reflected in the management approved budget and individual grant agreement budgets.
Assets Management – Adequacy and effectiveness of fixed asset management including completeness of asset register, coding of assets and physical conditions (relevance of IASs, ISAs & IFRs be complied with)
Procurement – Soundness of the system on purchase of goods and services to ensure transparency and in compliance with all relevant rules, policies, and procedures.
Implementation of Systems Based Audit recommendations – The report from the Systems Auditors had many recommendations, the financial auditors are expected to check progress in implementation of the urgent and/ or critical areas and give independent opinion and advise to FEMNET certain areas where possible.
Previous Audit Recommendations – Implementations and/ or actions emanating from previous audits’ recommendations. These recommendations include but not limited to previous annual financial audit, funding partner audits. The auditors shall report any observations/ findings on each of the above section in their management letter accompanying the audited financial statements.

3.1.6 As part of audit procedures, the auditor may request the organization to provide written confirmations or oral representations which they have received from organization during the course of their audit.

3.1.7 To assist the auditor with examination of financial statements they shall request for all documents or statements, including the board’s report which is issued with the financial statements. The auditors are also entitled to attend the Annual Board meetings of the organization and to receive notice of all such meetings.

3.1.8 As per the standards and practice 3.1.1 above the responsibility for the prevention and the detection of irregularities and fraud rest with the management of the organization, who are also responsible for the implementation and operation for an adequate system for internal controls. The auditors shall however be expected to plan their audit so that they have reasonable expectation of detecting material misstatements in the financial statements or accounting records resulting from irregularities or fraud which may exist.

As part of their normal procedures, they may ask the board to provide representations on audit areas not capable of substantiation or on areas where they consider that such confirmation is required or is desirable. If they request, they shall expect these representations to be produced in writing.

3.1.9 The auditors shall be held responsible for information provided to members of their firm engaged in the audit.

3.2 Audit Fees, Staff and Duration

3.2.1 We expect the fees to be computed based on the time spent on FEMNET’s audit affairs, by the audit partners and/or associates and their staff, and on the level of skill and responsibility involved, the resources required to complete the assignments and the existing charge out rates for the personnel involved.

We expect the fees for institutional audit charges to recognize any other separate special project financial audits during the same year, unless the auditors give reasons necessitating more audit time.

3.2.2 FEMNET expects audit staff and /or associates to have at least first degree, and appropriate relevant professional qualifications, and at least two years audit experience of similar scope of assignments. The engagement partner, the audit managers, and seniors and /or associates should meet the requirements of Accountants’ Act, ICPAK and ISA guidelines for an auditor, where applicable.

3.2.3 FEMNET will have to agree with the auditors their proposed fee for each year’s statutory and project audits. The agreed fee will be inclusive of VAT and disbursements. Unless otherwise agreed, the fees will be billed at the start and conclusion of the audit.

3.2.4 The final documents will be bound and a minimum of 5 copies delivered to FEMNET.

3.3 Additional Services

These TORs deal with general responsibilities of auditors to the organization. We would be pleased to discuss with the auditors other specialized services that they can provide, and opportunities that might exist for them to enhance our overall performance. A separate agreement/engagement would be issued for any other such assignment.

These TORs will be refined and will guide the auditors in drafting the engagement letter which will be signed by both parties before commencement of audit.

3.4 Miscellaneous Information/Parameter Guide:

FEMNET had about 20 partners supporting different projects/ activities over varying durations and amounts. The annual turnover is about US$ 4 million including disbursements to co-applicants, coalition partners, and sub-grantees.
FEMNET relies on donor funding with the amount received from subscription is less than 0.8% of the total income during the year 2020.

FEMNET will be willing to discuss with you any matters that may not be clear or arising from these TORs.

4. Selection

A firm will be selected in accordance with generally accepted procurement processes for the firm selection.

Applications: Interested eligible firms should send

Technical proposal (not more than 5 pages responding to each major requirement not more than 1-page indicative financial proposal.
Resumes of key staff of the firm including their names and addresses of 3 professional referees, telephone, and e-mail contacts.
Least 10 firm’s referees with all the necessary details – who are current and active audit clients,
The firm’s most recent 3 year audited financial statements,
Copies of relevant certificates i.e., Registration/Practicing Certificate, Tax Registration certificate, etc.

Applications by e-mail can be sent to: recruitment@femnet.or.ke. Please indicate the reference on the subject line as: External Audit Services (REF: FNT/EOI/61/2020/INST). Hard copies not more than 2 copies can be delivered at the address below:

All applications should be addressed to:

The Executive Director, FEMNET
12 Masaba Road, Lower Hill, off Bunyala Road,
P. O. Box 54562, 00200 Nairobi, Kenya.

Deadline for submission of applications is on Wednesday 8^th September 2021, 18:00 hrs.

Please note: Only complete applications will be reviewed, and only selected audit firms will be contacted. All applications will be kept for immediate future use, where possible. Firms observing sustainability in their operations are encouraged to indicate so and apply.

All details on:https://femnet.org/job/request-for-expression-of-interest-for-external-audit-services/