Extended deadline for selecting an audit company

Terms of Reference  

Expenditure Verification Report „ Renovation and equipment of 26 social centers of Concordia Moldova” project, financed by RENOVABIS e.V.

Entity subject to Audit: A.O. CONCORDIA Proiecte Sociale

Place of Audit: Chisinau, Republic of Moldova

INTRODUCTION

CONCORDIA Moldova is seeking an audit company to carry out an expenditure verification report on project financial administration and statements funded by donor grants. The audit will adhere to International Standards on Auditing (ISAs) to ensure financial statements' accuracy and compliance with contractual conditions.

 BACKGROUND INFORMATION

The main objective of the „Renovation and equipment of 26 social centers of Concordia Moldova” project is to improve infrastructure of 26 Concordia managed social services provided to the disadvantaged groups of population (children, young people and elderly). Social services targeted by the project are located in 22 localities from northern, central and southern part of the country.

The project duration is 01.07.2023 - 30.06.2024.

Total project budget: EUR 94000.00. Amount of the Project to be verified: EUR 47,000.00, project transactions - 70, employees involved in the project - 6.

 SCOPE OF THE FINANCIAL AUDIT

The Auditor is responsible to:

1. verify the entity's compliance with the criteria and specifications set out in the contractual conditions;
2. examine the propriety of project accounting operations and their conformity with the Project Contract in all its parts as well as with relevant national regulations;
3. examine the tools and procedures of internal control;
4. examine the bank account opened especially and exclusively for the project, and any further bank accounts of the project which may be necessary (e. g. for repayments of loans);
5. verify the accounts on the basis of original vouchers, and any further bank accounts of the project which may be necessary (e. g. for repayments of loans);
6. examine whether the person(s) enjoying power of disposal over the project bank account is/are the same or among those officially authorised to represent the Legal Holder of the project;
7. examine whether there have been any changes regarding staff enjoying authorisation to represent the Legal Holder of the project;
8. examine all incoming grant disbursement transactions, including especially accuracy and completeness of records and evidence of exchange transactions from foreign into national currency;
9. examine the various project bookkeeping accounts with their supporting documents of receipts and payments in the national currency; verify whether a clear distinction has been maintained between amounts actually paid out at the point of time when the accounting period ends and payments not yet effected but to be recognised as expenditure for the same period on the basis of the obligations incurred (payments according to a receipts and payments account versus expenditure based on accruals concept);
10. verify the plausibility of expenditures;
11. verify assignment of expenditures to the respective budget items;
12. examine whether the local and/or third-party contributions to be provided as part of the project have actually been received, duly shown in the books, and properly used for the financing of project expenditure; to verify information on income which was due but was actually received after the end of the period under review from local and third-party contributions, if any; as to local contributions, only those made in monetary terms should be shown. Where non-monetary contributions (e. g. voluntary labour, contributions in kind) have been provided, these should be shown separately;
13. verify that there is no duplicate financing by external funding bodies;
14. verify that according to the book keeping records and to the audit of accounts the expenditures are covered by the revenues;
15. examine whether any credit interest was gained from disbursements of Renovabis and/or any third party, and if so, whether the interest thus gained was properly used for the financing of project expenditure;
16. verify compliance and proper application of the applicable procurement regulations and law;
17. examine the inventory of all movables of a value exceeding EUR 410.00 (excluding local value-added tax) and purchased with money from project funds;
18. if immovables were purchased or buildings erected as part of the project, to examine evidence of ownership or of right of disposal, and to find out whether any encumbrances or obligations to third parties were created; also, to examine whether they are being used for the project purpose for which they were destined;
19. examine whether, in the case of sales and building contracts (of a value exceeding EUR 1000.00 excluding value-added tax, in the case of building contracts in accordance with the additional documents enclosed with the project contract) tenders were invited (at least three, informally, for example via telephone or internet) and received, thus documenting the economical and efficient use of funds made available for purchasing or construction purposes; whether the award process was documented; if no tenders were obtained, the reasons shall be explained in the auditor's report;
20. examine whether any reserves have been created from funds disbursed and if so, whether the consent of Renovabis to do so has been obtained;
21. examine whether any depreciation or imputed costs, which are no actual payments in the sense of a receipts and payments account, have erroneously been included in the Statements of Receipts and Payments submitted to Renovabis;
22. examine staff payrolls and lists of professional fees paid with regard to their being in accordance with the project contract and the employment contracts and fee contracts concluded as well as with the rules regarding payment of taxes and social security contributions;
23. statement regarding which of the above-mentioned items were examined individually and on which items statements were made regarding the failure to comply with regulations and requirements as stipulated in the project contract;
24. verify that the original vouchers are in an appropriate order to be presented for an external
    inspection at any time.

 AUDIT PROCEDURES

• The Auditor should exercise due professional care and judgment and determine the nature, timing and extent of audit procedures to fit the objectives, scope and context of the audit.
• All national rules and regulations, the contractual agreements and the rules and regulations by the main donor, RENOVABIS e.V. as well as internationally recognised auditing standards (ISA 800 Revised) must be taken into account.

The Auditor shall validate the original receipts and produce an Expenditure Verification Report, that should describe the purpose, the agreed-upon procedures and the findings in enough details.

The report should contain at least the following information:

1. Title
2. Addressee
3. Brief description of the project and partner(s)
4. Statement explaining criteria and scope as well as duration and location of the auditing conducted;
5. Period covered by the report
6. Description of the audit method applied
7. Total amount of budgeted and actual incomes
8. Complete list of project funds transferred, including donors’ names, dates and exchange rates
9. Total amount of actual expenditures verified
10. Expenditure Coverage Ratio
11. Objectives, Scope and Description of the procedures performed
12. Findings from the expenditure verification; statement as to scope of the auditing; statement as to deviations, if any;
13. Schedule of verified receipts and payments: to show initial balance plus all receipts obtained itemised according to Financing plan of the Project Contract, as well as credit interest gained, if any, unforeseen donations etc.; payments to be itemised according to the Detailed Breakdown of the Cost Plan (Appendix to Project Contract), or, if this was not provided, according to Cost plan of the Project Contract; the final balance to be in a consolidated form;
14. Statement as to correct and proper accounting;
15. Statement as to compliance with the Project Contract in all its parts, as well as compliance or variance with the recommendations of previous audit reports, if any; statement to the effect that all receipts and payments correctly relate to the project (or don't), and are (or are not) correct with regard to the calculations involved;
16. Recommendations, if applicable
17. Other relevant matters
18. Date of the report
19. Auditor’s address and signature
20. A summary confirming that the project has been implemented properly and according to the economic and fiscal regulations of the project country. If the report is a qualified one, the reasons for the qualification shall be explained.

The report has to be presented in English (3 copies in English and 2 copies in Romanian).

REQUIREMENTS FOR THE AUDITOR

The Auditor must meet at least one of the following conditions:

• The Auditor is a member of a national accounting or auditing body or institution, which in turn is a member of the International Federation of Accountants (IFAC).
• The Auditor is a member of a national accounting or auditing body or institution. Although this organisation is not a member of the IFAC, the Auditor commits himself/herself to undertake this Engagement in accordance with the IFAC standards and ethics.
• The Auditor is registered as a statutory auditor in the public register of a public oversight body in an EU member state in accordance with the principles of public oversight set out in Directive 2006/43/EC of the European Parliament and of the Council (this applies to auditors and audit firms based in an EU member state).
• The Auditor is registered as a statutory auditor in the public register of a public oversight body in a third country 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 a third country).

WORK PLAN

 DELIVERY OF PROPOSALS

1. Closing Date and Time: All proposals in response to this TOR must be received by no later than 05:00 pm, local time, 19 January 2024 (with the statement “Audit Company for RENOVABIS Project”). Proposals are to be submitted in hard copy (signed and stamped), or electronically (electronically signed) to: moldova@concordia.md or: A.O. "Concordia. Social Projects”, Chisinau, str. A. Corobceanu 13/1, MD-2004.
2. Proposal Components:

Cover Letter

• Audit license (copy);
• Company profile, contact details;
• Company competencies and experience;
• References of two non-associated referees;
• Members of the audit team holding audit certificates;
• Risk insurance (insurance policy);
• Extract from the State Register of Legal Entities.

Technical Proposal

• Qualifications of audit team;
• Institutional experience (including auditing non-profit organizations in the Republic of Moldova) and past performance in projects;

Financial Proposal

• Financial offer indicating the price of audit services in MDL. The financial proposal must cover all the services described above and must be clear and complete. The cost tables and accompanying notes must show the composition of all cost elements and reflect the total cost of the audit services.

EVALUATION CRITERIA

 SELECTION OF APPLICANTS

Proposals submitted under this procurement will be evaluated by Recipient committee focusing on the criteria described above.

The Applicant that accumulates the highest score according to the evaluation criteria will be invited for the negotiation of the contract.

A.O. "Concordia. Social Projects" is exempt from VAT, which is also confirmed by art. 103 paragraph (92) - Fiscal Code - "Goods and services imported or purchased on the territory of the Republic of Moldova by non-commercial organizations meeting the requirements of art.52, for the purpose of building social assistance institutions, as well as goods and services imported or purchased on the territory of the Republic of Moldova by these non-commercial organizations for the needs of these institutions, are exempt from VAT without the right of deduction".

Important Note: In accordance with the internal procedures regarding the processing of information with limited accessibility, Concordia will provide access to the primary documents necessary to conduct the audit, on paper (in the original) and in electronic format (access to the accounting software), at the headquarters, using the means made available, to be examined without the possibility of copying them to external media.

Questions and Clarifications

• If you have any questions or need clarification regarding this TOR, please submit them in writing via email to vadim.tarna@concordia.md with the statement “Clarifications - Audit Company for RENOVABIS Project”.

Assessment Disclosure and Cost Responsibility:

• The Recipient is not obligated to disclose how proposals are assessed or provide information about the selection process to any offeror;
• Offerors are responsible for their own expenses incurred in preparing and submitting an offer under the TOR. This includes costs for functional demonstrations, meetings, and negotiations.

Not a Contract:

• This TOR is not a contract or commitment. Submitting a proposal does not obligate the Recipient to award a contract, and the Recipient is not committed to covering any costs incurred in preparing the proposal.

Right to Presentations and Proposal Validity:

• The Recipient reserves the right to invite short-listed offerors to make oral presentations. These presentations will be evaluated based on the same criteria;

• Proposals must remain valid for 30 days from the submission deadline.