Project name:    Improving governance of protected areas in Moldova through institutional development, capacity development and habitat restoration

Project implementors:    PA ES BIOTICA and PA EcoContact

Project duration:             01 May 2023-30 April 2027

Donor:  The Austrian Development Agency (ADA) with funds of the Austrian Development  Cooperation (ADC)

Assignment Name: Project’s annual financial audit (Expenditure verifications)

PA ES BIOTICA now invites proposals from Audit Companies to provide the project’s annual financial audit (expenditure verifications) based on the requirements presented below:

1. Scope and time schedule of AUDIT (Expenditure verification)

Carrying out annual financial audits (Expenditure verifications) of the project for the following periods:

Annual Financial Audit 1: 01.05.2023 – 30.04.2024

Annual Financial Audit 2: 01.05.2024 – 30.04.2025

Annual Financial Audit 3: 01.05.2025 – 30.04.2026

Annual Financial Audit 4: 01.05.2026 – 30.04.2027

For the first period the Audit shall be carried out in the period 15 May- 05 June 2024, final report should be submitted the latest on 15 June 2024.

For the second period the Audit shall be carried out in the period 15 May- 05 June 2025, final report should be submitted the latest on 15 June 2025.

For the third period the Audit shall be carried out in the period 15 May- 05 June 2026, final report should be submitted the latest on 15 June 2026.

For the fourth period the Audit shall be carried out in the period 15 June- 05 July 2027, final report should be submitted the latest on 15 July 2027.

The overall implementation period is 48 months and the project shall be completed latest in April 2027. The budget of the project is 1,778,000 EURO, including grant from ADA in the amount of 1,653,700 EURO.

Note: The period to be covered by the final audit and the dates for submission may be amended in case of an extension of the project duration.

2. Audit standards and guidance

The Auditor shall undertake this Engagement in accordance with:

• the International Standard on Related Services (‘ISRS’) 4400 (Revised) “Agreed-upon Procedures Engagements” as promulgated by the IFAC;
• the IFAC Code of Ethics for Professional Accountants (developed and issued by IFAC's International Ethics Standards Board for Accountants (IESBA), which establishes fundamental ethical principles for Auditors regarding integrity, objectivity, independence, professional competence and due care, confidentiality, professional behaviour and technical standards.
• Auditor must be independent from the Grant Recipient and comply with the independence requirements of the IFAC Code of Ethics for Professional Accountants.

3. Management support

This is a mandatory audit and will be performed on the basis of Section 4 (6) of the General Terms and Conditions to the Grant Agreement signed between ADA on one hand and Ecological Society BIOTICA and EcoContact on the other hand.

Ecological Society BIOTICA and EcoContact will provide the external auditor with all necessary information to perform his/her work. The project managers, the accountants and the staff working on the project will be open to collaboration with the auditor.

The Auditor will have full and unrestricted access at any time to all records and documents (including accounting records, contracts, minutes of meetings, bank records, invoices, procurement documentation etc.), to employees of ES BIOTICA and EcoContact and to its locations insofar as this is possible and relevant to the audit of the Project. The Auditor may request ES BIOTICA and EcoContact to get access to banks (e.g. to request a bank confirmation), consultants and other persons or firms engaged by ES BIOTICA and EcoContact.

The following underlying documents will be provided to the Auditor:

• Grant Agreement concluded between the ADA and the Grant Recipient with all annexes, including contracts or agreements between the Grant Recipient and his/her partners, if any
• Amendments to the Grant Agreement, if any
• The Financial Report, including complete list of reported expenditures
• Original vouchers/receipts
• Access to the used bookkeeping systems
• Access to information related to bank and cash statements
• Any other documents required by the auditor for the performance of its tasks.

The Financial Report (consisting of a summary and a detailed breakdown) includes a comparison of actual vs budgeted expenditure and a detailed voucher list classified according to the relevant budget lines and covers all project expenses and funds received from the ADA, the Grant Recipient, other project partners or other donors.

4. Procedures to be performed by the Auditor

The Auditor verifies based on original documents that:

1. the project is implemented in accordance with the principles of economy, efficiency and expediency;
2. proper book-keeping and sound financial management have been maintained by the Grant Recipient, the related expenditure practices are correct, Generally Accepted Accounting Standards have been met and an adequate, effective Internal control system exists,
3. the project funds have been used in conformity with the Grant Agreement, in particular:
4. the project funds were spent exclusively for project related expenses and solely for the purpose intended
5. costs have been incurred during the implementation period
6. costs meet the eligibility criteria stipulated in the Grant Agreement and its annexes.
7. the Financial Report presented by the Grant Recipient presents the actual expenditure incurred and the revenue received for the project for the respective reporting period accurately and in conformity with the Grant Agreement and annexes thereto,
8. the project expenditures are allocated to the last approved (allocated) Project Budget,
9. individual expenditures made from grant funds are clear evident from the project bookkeeping and are assigned to the correct budged items as specified in the approved Grant Application,
10. it is plausible that the expenditure for a selected item was necessary for the implementation of the project and that it had to be incurred for the contracted activities of the project by examining the nature of the expenditure with supporting documents,
11. where expenditure was apportioned, the applied allocation key was based on sufficient, appropriate and verifiable underlying information,
12. over expenditure, if any, lies within the thresholds stipulated in the Grant Agreement,
13. the projects costs claimed are net cost and free of any VAT; if expenses contain Value Added Tax (VAT), the Auditor shall certify that the Grant Recipient is not exempt from VAT and cannot reclaim it either,
14. costs declared in the Financial Report are justified by the relevant supporting documents in form of genuine and original invoices, receipts and vouchers bearing all necessary information; these original supporting documents are clearly associated with the project and the project’s time frame,
15. all expenditures claimed under the Financial Report have been settled and paid for, no outstanding invoices or accrued costs have been included in the financial report,
16. all necessary supporting documents for employees’ costs are available and these costs are reported correctly. Specifically, the auditor verifies:
    1. the existence of employment contracts in accordance with the relevant national legislation
    2. that the reported employees’ costs are calculated correctly in accordance with the approved Project Budget and respective provisions of the General Terms and Conditions
    3. that only actually paid employees’ costs have been claimed under the Financial Report and this has been evidenced by the respective supporting documents.
17. indirect costs^[1] , if foreseen in the Project Budget, have been calculated properly,
18. accrued interest has been declared,
19. conversion of currency has been calculated correctly, in particularly the conversion into EUR has been calculated in accordance with the General Terms and Conditions and is evidenced by currency exchange receipts and/or respective bank account statements,
20. usage of budget funds under “unforeseen” or “contingency reserve” has been approved by ADA,
21. revenues foreseen in the financial plan were not realized,
22. other revenues originally not foreseen in the financial plan were registered,
23. applicable procurement regulations of the General Terms and Conditions have been complied with,
24. applicable provisions of social and labour laws in all countries where the project is being implemented have been complied with,
25. applicable provisions of the company and tax laws and regulations have been complied with,
26. regulations on travel expenses have been followed,
27. all assets and equipment have been incorporated in the asset list,
28. assets and equipment have been used for the project purposes,
29. depreciation on investment goods that continue to be available to the Grant Recipient after the end of the term of the Agreement has been properly calculated, if applicable,
30. equipment or services produced or provided by the Recipient itself have been charged at cost only (without any markup), if applicable,
31. project vehicles, if any, have been used according to the standards set out in the General Terms and Conditions of the Grant Agreement,
32. sub-grants foreseen in the Project Document have been provided to third parties and have been properly accounted for based on actual costs,
33. applicable visibility regulations have been adhered to,
34. requests and recommendations from the previous expenditure verifications regarding any project relevant matters have been considered and implemented.

Expenditure coverage ration (ECR)^[2]

The Auditor ensures that the overall ECR is at least 65%. If he finds an exception rate of less than 10% of the total amount of expenditure verified (i.e. 6,5 %) the Auditor finalises the verification procedures and continues with reporting. If the exception rate found is higher than 10% the Auditor extends verification procedures until the ECR is at least 85%. The Auditor then finalises verification procedures and continues with reporting regardless of the total exception rate found. The Auditor ensures that the ECR for each expenditure heading and subheading in the Financial Report is at least 10%. The Grant Recipient must reserve the right to share the Expenditure Verification Report and its annexes with all donors.

5. Audit report

The Auditor will 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^[3]:

1. Title
2. Addressee
3. Brief description of the project and partner(s)
4. Period covered by the report
5. Total amount of budgeted and actual incomes
6. Complete list of project funds transferred, including donors’ names, dates and exchange rates
7. Total amount of actual expenditures verified
8. Expenditure Coverage Ratio
9. Objectives, Scope and Description of the procedures performed
10. Findings from the expenditure verification
11. Recommendations, if applicable
12. Follow up of previous recommendations, if applicable
13. Other relevant matters
14. Date of the report
15. Auditor’s address and signature

 The Expenditure Verification Report shall also comprise the following annexes:

1. Financial Report: overall calculation with comparison of actual expenditures vs. approved budget certified by the company’s formal signature (stamp and signature) and by the formal signature (stamp and signature) of the auditor.
2. Statement of the project cash flows
3. a detailed voucher list classified according to the relevant budget lines
4. bank account statements
5. list of payable invoices, if any
6. in case exceptions are detected, a list of respective vouchers including a description of exception
7. asset list
8. list of procurement contracts awarded during the reporting period
9. list of grant contracts awarded during the reporting periods, if applicable.

 All reports shall be prepared and submitted electronically in the Word and pdf-format in English and Romanian. In addition, the final report shall be submitted in 3 hard copies in English and 1 in Romanian.

6. Qualification requirements and evaluation criteria

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).

Additionally it must meet the following conditions:

• The Auditor must have at least 5 years’ general experience in auditing and experience in financial audits performed for NGOs, funded by international and national organizations
• The Auditor will employ staff with appropriate professional qualifications and suitable experience with IFAC standards and with experience in verifying financial information of projects comparable in size and complexity to the project subject to the expenditure verification.
• The Auditor must have sufficient knowledge of relevant laws, regulations and rules in the countries concerned i.e. where the project is implemented. This includes but is not limited to the company law, taxation, social security and labour regulations, accounting and reporting.
• The Auditor will provide the Grant Recipient with CVs of the staff/experts involved in the expenditure verification. The CVs will include appropriate details for the purpose of the evaluation of the offer on the relevant specific experience for this expenditure verification and the qualifying work carried out in the past.
• Knowledge of Romanian and English is a mandatory condition, as the report should be presented in Romanian and in English.

7. Offer structure

Interested auditors are requested to send an Offer no later than 11 March 2024 to ES BIOTICA.

It should include:

1. Name of the company, address, contact person and phone number;
2. Copy of the license for the audit activities;
3. Description of the company and arguments for the opportunity of its selection;
4. List of NGO’s for which the audit company carried out organizational audits during the last 3 years;
5. Description of the qualification and CV of the members of the audit team;
6. Financial offer.

The offer has to be submitted in English.

8. Evaluation criteria

The Consulting Company’s bid will be evaluated based on the following criteria:

- Presentation of all documents indicated in p. VIII. Offer structure;

- The organization's experience in the field of audit, including in the specific field of public associations according to national and international standards (30%);

- Qualifications of the audit team that will perform the audit (20%);

- The required price (maximum 50%).

9. Submission of the offers:

The deadline for the submission of the offers: 11 March 2024

The offers must be submitted by e-mail to the address biotica.md@gmail.com with the statement “Tender project ADA 2024” or to the adress: Chisinau, str. N.Dimo 17/4, of. 22 .

Additional information could be obtained at the phone +373 69150557.

^[1] Indirect costs (also named “Projektbegleitentgelt, (PBE)” are calculated proportionally to eligible direct costs and do not require further supporting documents. Audit costs are part of the indirect costs. For details refer to “Guidelines indirect costs”.

^[2] This ratio represents the total amount of expenditure to be verified expressed as a percentage of the total expenditure

^[3] For details on reporting please refer to ISRS 4400 (Revised) issued by IFAC