Calling for Audit Engagement

ZSL Grant Audit Terms of Reference DFID funded South Sumatran Partnership for Landscape Management (‘KELOLA Sendang’)

1. Terms of Reference
for an Expenditure Verification Project This terms of reference defines the service required by ZSL and prospective audit practitioners engaged to undertake grant audits.  The specific requirement of this audit relates to an expenditure verification report of the Department for International Development (DFID) funded South Sumatran Partnership for Landscape Management (‘KELOLA Sendang’) (PO Number 40096411, Project Component 204623-108) (Grant) for the period 17 November 2015 to 31 March 2020

2. Subject of the Engagement
The subject of this engagement is the Consolidated Financial Report which encompasses the final financial report for  the period covering 01/04/2019 to 31/03/2020 .  The information, both financial and non-financial, which is subject to verification by the Auditor, is all information which makes it possible to verify that the expenditure claimed by ZSL in the Consolidated Financial Report has occurred, and is accurate and eligible. Annex 1 to these ToR contains an overview of key information about the Grant and the Project concerned, and the procedures to be followed.

3. Engagement Type and Objective

This TOR refers to an audit engagement.  The auditors’ responsibility will be to express an opinion on the Consolidated Financial Report for the Grant. The auditors will be expected to plan the audit to obtain reasonable assurance that the financial report is free of material misstatement due to errors or fraud and to verify that the expenditure claimed by ZSL from DFID has occurred, is accurate and eligible. Through the review and evaluation of ZSL’s system of internal controls, review of policies and procedures and by inspection of other documents, observation of assets, making enquires within and outside the organization, and by International Standards on Auditing (ISA), the auditors will gather evidence necessary to determine whether the financial reports present a fair representation of the Project’s financial position and its activity during the period being audited.

4. Responsibilities of the Parties to the Engagement ZSL

•  ZSL will be responsible for providing the Consolidated Financial Report for the Grant and for ensuring that this Consolidated Financial Report can be properly reconciled to ZSL’s accounting and bookkeeping system and to the underlying accounts and records.

•  ZSL accepts that the ability of the prospective Auditor to perform the procedures required by this engagement effectively depends upon ZSL, and as the case may be his partners, providing full and free access to ZSL’s staff and its accounting and other relevant records.‘The Auditor’ refers to the Auditor who is selected and then is responsible for performing the agreed-upon procedures as specified in these ToR, and for submitting a report of factual findings to ZSL.  By agreeing these ToR the Auditor confirms that he/she meets at least one of the following conditions:

•  The Auditor and/or the firm is a member of a national accounting or auditing body or institution which in turn is  member of the International Federation of Accountants (IFAC).

•  The Auditor and/or the firm is a member of a national accounting or auditing body or institution. Although this   organisation is not member of the IFAC, the Auditor commits him/herself to undertake this engagement in accordance with the IFAC standards and ethics set out in these ToR.

•  The Auditor and/or the firm is registered as a statutory auditor in the public register of a public oversight body in Indonesia and this register is subject to principles of public oversight as set out in the legislation of the country concerned (this applies to auditors and audit firms based in Indonesia).

5. Scope of Work

5.1  The Auditor shall undertake this engagement in accordance with these ToR and:- in accordance with the International Standards on Auditing (ISA) issued by the International Federation of Accountants (IFAC); – in compliance with the Code of Ethics for Professional Accountants issued by the IFAC. Although ISRS 4400 provides that independence is not a requirement for agreed-upon procedures engagements, ZSL requires that the auditor also complies with the independence requirements of the Code of Ethics for Professional Accountants.

5.2  The Terms and Conditions of the Grant Arrangement. The Auditor verifies that the funds provided by the grant   were spent in accordance with the terms and conditions of the Grant Arrangement.

5.3  Planning, procedures, documentation and evidence. The Auditor should plan the work so that effective expenditure verification can be performed. For this purpose she/he performs the procedures specified in Annex 1 of these ToR (‘Scope of Work – Procedures to be performed’) and she/he uses the evidence obtained from these procedures as the basis for the report of factual findings. The Auditor should document matters which are important in providing evidence to support the report of factual findings, and evidence that the work was carried out in accordance with ISRS 4400 and these ToR.

6. Reporting.

The report on this expenditure verification should describe the purpose and the agreed-upon procedures of the engagement in sufficient detail in order to enable ZSL and DFID to understand the nature and extent of the procedures performed by the Auditor. The Auditor will be required to submit the following reports and deliverables:

     Detailed scope of work, dates for field work and site visits and schedule of client prepared documents required within 10 days of a signed engagement letter.

     Draft final audit report to be submitted by 29 May 2020 with exit conference date to be mutually agreed upon.

     Final report and management letter due 6 June 2020. Management letter to highlight, if any, material   weaknesses in internal controls and noncompliance with the Contract.

7. Other Terms

7.1 Fees.

     The fee for this engagement will be agreed prior to engagement of the auditor.

     The engagement fee listed above shall include all necessary and relevant expenses incurred by the Auditor to perform the engagement.  ZSL shall neither be liable for, nor reimburse any additional expenses not originally budgeted for within the agreed fee in the first paragraph (of 7.1). In preparing the budget the Auditor should note that ZSL will only fund economy class air.  Receipts (copies of travel documents such as air/bus/taxi tickets and hotel receipts) must be provided to evidence all expenses (transport & travelling and lodging & feeding). These costs will be included as part of the overall engagement in the Auditor fee listed above. Should the report not be of sufficient quality and fail to meet the requirements of the DFID the ZSL reserves the right to withhold part of, or the entire agreed fee.  ZSL is not liable for any local employment related taxes or employee costs, including health and/or any liability costs, incurred as a result of this verification report. No additional verification work should be conducted by the Auditor, until a prior written agreement has been made with ZSL and any necessary increase in the fee for the engagement has been agreed.

Deadline for submission of expression of interest: 20 March 2020. Please send expressions of interest to

Selection of Auditor to carry out the Audit: 27 March 2020

Agreement of Terms of Reference: 6 March 2020

TBC Audit Work to Commence: 4-15 May 2020

TBC Auditor to present draft report: 29 May 2020

Auditor to present final report: 6 June 2020

7.3 Location :

The audit location is to be in Bogor,Indonesia.

 The complete ToR for Auditor Engagement

TOR Kelola Sendang Financial Audit_2020.docx

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