Terms of Reference for External Audit of Johanniter Kenya Programme – Johanniter-Unfall-Hilfe

Organization Background

Johanniter

Johanniter-Unfall-Hilfe was founded in 1952 and is represented by 9 national and round 300 regional and local associations throughout the Federal Republic of Germany. Johanniter-Unfall-Hilfe is a chapter of the Johanniter Order and a registered association in accordance with German legislature. Besides domestic obligations (like Emergency Medical Services, Civil Protection, and social services) the statutory duties and responsibilities of Johanniter also include international humanitarian assistance.

In its international humanitarian work, Johanniter is committed to act responsible and fair. Together with donors, colleagues and project partners, we approach different cultures and populations with respect, integrity and commitment. Our highest priority is to act according to the needs of the most vulnerable people. We mainly focus on three areas of work: primary health care, disaster response and preparedness, and rehabilitation of people with disability. Sustainability is of particular importance to us: We aim to improve the living conditions of people in distress in the short, mid and long term. To this end, we use our resources carefully and with foresight and we consider the social, economic and ecological consequences of our assistance. We are committed to the principles of accountability and transparency towards our donors and partners. We continually assess whether our structures and processes can be improved. Our consistent quality standards as well as regular monitoring and controlling ensure the professionalism of our work and make it verifiable. For more information about Johanniter consult www.thejohanniter.de.

Johanniter Unfall Hilfe has been in operation in Kenya since year 2011.

The main values and principles underlying the work of the Johanniter International Assistance are laid down in the “Mission Statement”. All staff members working for Johanniter International Assistance are expected to act in line with the mission statement. Details about the organizational structure of the Johanniter office in Kenya are laid down in the organogram.

Objective of the Audit

Johanniter Kenya intends to appoint an external auditor to conduct an Audit of its financial statements for the period covering from 01 February 2022 to 31st December 2022.

1. The objective of the audit of Johanniter International Assistance Kenya’s financial statements is to enable the auditors to express an independent professional opinion on the financial position of Johanniter Kenya and to ensure that funds utilized for Johanniter’s activities have been used for their intended purposes.
2. The books of accounts of Johanniter in Kenya provide the basis for the preparation of the Johanniter’s Financial Statements. Proper books of accounts as required by law have been maintained by Johanniter and also maintain adequate internal controls and supporting documentation for the transactions

Project to be covered by Audit

All projects which were running/open during the period of February 2022 to December 2022.

Audit Services Required

• The audit firm will conduct an audit of the Johanniter Kenya operations for the year 2022.
• The audit will be carried out in accordance with International Auditing Standards.
• The Scope of the audit is to be covered as follows:
  • The audit will be carried out in accordance with the International Auditing Standards and will include tests and verification procedures as the auditors deem necessary;
  • Verify that funds have been used in accordance with the established policies and procedures of Johanniter.
  • That goods and services financed have been procured in accordance with the Johanniter established policies and procedures;
  • That appropriate supporting documents, records and books of accounts relating to all activities have been kept;
  • That the financial statements have been prepared in accordance with applicable accounting standards and give a true and fair view of the financial position of Johanniter and of its receipts and expenditures for the period ended on that date;
  • Comprehensive assessment of the adequacy and effectiveness of the accounting and overall internal control system to monitor expenditures and other financial transactions.
  • To determine whether the financial management capacity and financial systems and internal control mechanisms within the organization are adequate to manage the funds provided to the program;
  • Include in their reports opinion on compliance with procedures designed to provide reasonable assurance of detecting misstatements due to errors or fraud that are material in the financial statements.
  • Determine the compliance with the existing country/statutory/taxation regulations as regards maintenance of financial statements.
  • Conduct entry and exit meeting with the Kenya Johanniter International Assistance management.
  • To produce an independent auditor’s report which expresses an opinion on the financial statements with regards to the financial position as at 31 December 2022 and its financial performance and cash flows for the year then ended as presenting fairly in all material respects.

Audit Approach

The auditors’ work should include but not limited to sufficient tests to establish whether:

1. Johanniter Kenya has adequate accounting and financial operations and reporting systems.
2. An adequate budgetary control system is in place to monitor actual expenditure against budget and to take effective remedial action as necessary, with adequate segregation of duties in the maintenance and review of accounts and the performance of reconciliations
3. Goods and services have been procured in accordance with the relevant organizational policies and procedures;
4. Inventories and assets registers are complete and accurate;
5. All necessary supporting documents, records, and accounts have been kept in respect of all project ventures;
6. Expenditure of funds has been approved at the correct level of delegated authority. This includes initial approval to incur expenditure and the payment of claims, invoices, salaries, allowances and any other items of expenditure charges to the project budget;

The Audit Deliverable

• The Auditors on completion of the audit work will submit 5 (five) original copies of the Audit Report appended to the Financial Statements along with the reports to JUH Head of Mission
• Management letter in accordance with the scope of work described above.

The Audit Report and Management Letter

Audit Report

The audit report should clearly indicate the auditor’s opinion. This should include at least the following:

• The audit standards that were applied
• Whether the financial statements are adequately and fairly presented;
• Express an opinion as to reasonableness of the financial statements in all material respects.
• Issue an opinion on the program’s financial statement,

The draft audit report should be submitted to Johanniter International Assistance by [TBA] and the signed audit report will be submitted to Johanniter International Assistance by [TBA]

Management Letter

The management letter should cover the following topics/issues:

• Give comments and observations on the accounting records, procedures, systems and controls that were examined during the course of the audit;
• Identify any specific deficiencies and areas of weakness in systems and controls and make recommendations for improvement;
• Report on the implementation status of recommendations pertaining to previous period audit reports;
• Communicate any matters that have come to their attention during the audit which might have a significant impact on the sustainability of the organization or any other matters that the auditors consider pertinent;

Audit Duration

The audit work shall be completed within three weeks from the date of commencement of the audit.

Qualification of the Audit Firm

• A copy of Audit Certificate of the audit firm appointed as to ensure professional accreditation. A Firm having affiliation/membership with an internationally reputed audit firms will be more recommended.
• The audit firm should provide the following with its submissions:
• • A brief capability statement justifying its suitability for the assignment. Global networks or international affiliation advantages if any should be disclosed. – A technical proposal detailing the firms understanding of the terms of reference, proposed audit methodologies, detailed work plan and deliverables. (Must be submitted in PDF format). – A profile of 3 similar assignments of clients with operations comparable to those of these terms of reference – A profile of the proposed team for this assignment covering the partner, Audit Manager and support staff – A copy of the certificate of incorporation of the audit firm and a valid tax compliance certificate – A Financial proposal preferably submitted in Kenya Shillings or Euros. The financial proposal should indicate the professional fees including all applicable Taxes.

Audit Fees

The audit fees will be agreed before the start of the audit process.