TORs External Auditors of the Project Titled Citizens’ Monitoring Of the Justice Sector in Rwanda

TERMS
OF REFERENCE FOR EXTERNAL AUDITORS OF THE PROJECT TITLED CITIZENS’ MONITORING
OF THE JUSTICE SECTOR IN RWANDA

1.
BACKGROUND

OXFAM
received funds from DFID and Oxfam Novib as part of the Security and Justice
Innovation fund to implement the Citizens Monitoring of the justice sector
through ICT project (ICT4J project).

The
ICT4J project aimed to increase the responsiveness of Rwanda’s justice service
providers towards the concerns of citizens, especially women, on the provision
of justice services. The project aimed also to demonstrate that by empowering
citizens to provide feedback on the quality of justice services through an
innovative ICT platform, civil society would be more effective in holding
justice sector duty bearers to account. It further aimed at building the
capacity of civil society to shape justice sector policy and facilitate
increased citizen voice in the development and reform of justice sector
policies and practices.

The
project was implemented by the Legal Aid Forum (LAF) from April 2015 to 15th
October 2016.

2.
OBJECTIVE OF THE AUDIT

The
objective of the audit of the Project financial statements (PFSs) is to enable
the auditors to express an independent professional opinion on the financial
position of the Project from 1st November 2015 – 15th
October 2016 and to indicate whether the funds granted to the project were used
for their intended purposes.

The
project books of accounts were the basis for preparation of the PFSs by the
project implementing unit and are established to reflect the financial
transactions in respect of the project. The PIU maintains adequate internal
controls and supporting documentation for transactions.

3.
SCOPE

The
responsibility for the preparation of PFSs lies with the Project Implementation
Unit (PIU) (LAF with the support and guidance from Oxfam). The PIU is also
responsible for:

The
selection and application of accounting policies: The PIU should prepare
the PFSs in accordance with applicable accounting standards-either the
International Public Sector Accounting Standards (IPSASs), International
Financial Reporting Standards (IFRs), or National Accounting Standards
that comply with IPSASs or IFRs in all material respects; and
Implementing
accounting, administrative and financial procedures documented in the
project’s operating manuals.

The
audit will be carried out in accordance with International Standards of
Auditing (ISA), and will include such tests and controls, as the auditor
considers necessary under the circumstances. In conducting the audit,
special attention should be paid to the following:

DFID
funds have been provided and used in accordance with the conditions of the
funding agreement, with due attention to economy and efficiency and only
for the purposes for which they were provided;
All
project’s funds have been used in accordance with the conditions of the
relevant financing agreements; with due attention to value for money,
economy and efficiency, and only for the purposes for which the financing
was provided.
Goods,
works and services financed have been procured in accordance with the
funding agreement and in accordance with the OXFAM rules and procedures,
and have been properly accounted for;
Where
separate bank accounts have been used, they have been maintained in
accordance with the provisions of the relevant financing agreements;
The
financial statements have been prepared by project management in
accordance with applicable accounting standards earlier noted and give a
true and fair view of the financial position of the Project as at 15th
October, 2016 and of resources and expenditures for the year ended on that
date;
Appropriate
supporting documents, records and books of accounts relating to all
project activities have been kept. Clear linkages should exist between the
books of accounts and the financial statements presented;
Comprehensive
assessment of the adequacy and effectiveness of the accounting and overall
internal control system to monitor expenditure, other financial
transactions and ensure safe custody of project-financed assets and that
they are being used for the intended purposes;
Project’s
fixed assets are real and properly evaluated and project property rights
or related beneficiaries’ rights are established in accordance with grant
conditions. Ineligible expenditures identified during the audit will be
reflected in a separate paragraph of the audit report and if substantial,
the point should be reflected in the auditors’ opinion;
In
accordance with ISA, the auditors shall pay attention to Fraud and
Corruption issues. In accordance with ISA 240 (The Auditor’s
Responsibilities Relating to Fraud in an Audit of Financial Statements),
the auditors shall identify and evaluate risks related to fraud, obtain or
provide sufficient evidence of analysis of these risks and assess properly
the risks identified or suspected;
In
preparing the audit approach and in executing the audit procedures, the
auditors shall evaluate the implementing partners (LAF)’s compliance with
the provisions of laws and regulations that might impact significantly the
PFSs as required by ISA 250 (Considerations of Laws and Regulations in an
Audit of Financial Statements);
Communicate
with LAF’s Management responsible for Governance regarding significant
audit issues related to governance in accordance with ISA 260:
(Communication with those charged with Governance); and
With
a view to reducing audit risks to a relatively low level, the auditors
will apply appropriate audit procedures and handle anomalies/risks
identified during their evaluation. This is in accordance with ISA 330
(The Auditor’s Responses to Assessed Risks).

The
auditors are responsible for the formulation of an opinion on the PFSs in
accordance with ISAs International Standards. The auditors will not provide any
other services which could result into a conflict of interest. In accordance
with these standards, the auditors will request the PIU for an
engagement/confirmation letter where the PIU commits to the preparation of the
PFSs and maintenance of proper internal control systems as well as acceptable
documentation for all financial transactions.

4.
FINANCIAL STATEMENTS

The
auditors will ensure that the PFSs are prepared in accordance with the
standards mentioned above (ref. section 3 above) and give a true and fair view
of the financial position of the project as at the fiscal year end and its
receipts and expenditures for the financial year ended on that date.

As
an annex to the financial statements mentioned above, the audit report should
include:

Reconciliation
between the amount shown as “received” and that shown as having been
disbursed. The reconciliation should indicate the methods used for
disbursement, i.e. bank account, direct payment or reimbursement methods
with those recommended in the financing agreement; and
A
comprehensive list of all fixed assets purchased, with given dates, values
and condition of the assets.Any revenue generated by the Project e.g. sale
of bid documents, disposal of project assets, bank credit interests earned
on the project’s bank account and fees earned should be accounted for and
disclosed.

5.
STATEMENT OF EXPENDITURES

In
conjunction with the audit of the PFSs, the auditors should:

Audit
all Statements of Expenditures (SOEs);

Determine
the eligibility of expenditures in accordance with the fund agreement and
appraisal report.

6.
AUDIT REPORT

The
audit report will comprise of:

(i)
The auditors’ opinion on the project financial statements; and

(ii)
A complete set of project’s financial statements and other relevant
statements. All ineligible expenditures will be disclosed in an annex to
the audit report.

7.
MANAGEMENT LETTER

In
addition to the audit report, the auditors will prepare a “management letter”
in which they will:

Give
comments and observations on the accounting records, procedures, systems
and controls that were examined during the course of the audit;
Identify
specific deficiencies and areas of weakness in systems and controls and
make recommendations for improvement if applicable;
Report
on the degree of compliance with each of the financial covenants on the
funding agreement and give comments, if any, on internal and external
matters affecting such compliance;
Report
on the implementation status of recommendations pertaining to previous
period audit reports;
Communicate
matters that have come to their attention during the audit which might
have a significant impact on the implementation and sustainability of the
project; and
Highlight
any other matters that the auditors consider pertinent.

Ideally,
the management letter will include reactions/comments from PIUs on the
weaknesses noted by the auditors (if any).

8.
GENERAL INFORMATION

The
audit report including the financial statements, the management letter
including the PIU’s responses shall be submitted to the donor.

The
auditors should be given access necessary legal information for the audit.

9.
AUDITORS EXPERIENCE AND QUALIFICATIONS

The
audit firm should be registered and have a license from an international or
regional professional Accountancy Body. The firm should have relevant
experience in accounting and auditing of development projects, especially
donor-funded operations.

The
key audit team will comprise, at least:

An
audit manager with at least 5 years experience in auditing and with a
sound knowledge of donor-financed projects. In addition he/she should be a
member of a recognized accountancy professional body;
A
team leader with at least a Masters degree in auditing/accounting or
equivalent with a minimum of 3 years experience in auditing; and
An
assistant auditor with adequate experience and professional
qualifications.

Applications
must be in English and submitted to Oxfam Rwanda physically or electronically
through the following address: kigali@oxfam.org.uk
or drop the application to Oxfam Rwanda Country Office by Friday 9th
March 2017.