Assignment: Project Audit/Expenditure Verification

Project: “Green Justice for Stronger environmental protection and communities in Moldova (Green Justice Steps)”

Implementation period: 01 September 2021 – 31 August 2025

Donor: Swedish International Development Cooperation Agency, SIDA

Contact person: Anastasia Pogor, Financial manager +373 22 99 61 62, email: anastasia.pogor@ecocontact.md  

INTRODUCTION

In September 2021, Public Association EcoContact, with the support of Sweden, initiated the implementation of the project “Green Justice STEPS”. The project aims to improve the legal and institutional framework of environmental governance and justice and achieve stronger involvement and cooperation of all key players in environmental protection at the national and local levels. As a result, the regulatory and institutional capacity of competent central and local public authorities shall be strengthened, and higher compliance with the implementation and enforcement of environmental law achieved.

Public Association ”EcoContact”, hereafter referred to as the “Cooperation partner,” wishes to engage the services of an audit firm to audit the project “Green Justice for Stronger environmental protection and communities in Moldova (Green Justice Steps)” as stipulated in the agreement between the Cooperation partner and Sida. The audit shall be carried out per the international standards (ISA) issued by IAASB^[1]. In addition, an assignment according to International Standards on Related Services (ISRS) 4400 shall be carried out. An external, independent, and qualified auditor shall carry out the audit and the additional assignment. 

OBJECTIVES AND SCOPE OF THE AUDIT

The objective is to audit the financial reports for the period of 01 September 2021-31 August 2025 as submitted to Sida and to express an audit opinion according to ISA, applying ISA 800/ISA 805, on whether the financial reports of “Green Justice for Stronger environmental protection and communities in Moldova (Green Justice Steps)” are by the Cooperation partner´s accounting records and Sida’s requirements for financial reporting as stipulated in the agreement including appendices between Sida and Cooperation partner (Agreement).

The audit Reports will be prepared for each period as follows:

per 01/09/2021-31/12/2022 => to be submitted by 20/03/2023

per 01/01/2023-31/12/2023=> to be submitted by 15/03/2024

per 01/01/2024-31/12/2024=> to be submitted by 15/03/2025

per 01/01/2025-31/08/2025=> to be submitted by 15/11/2025

ADDITIONAL ASSIGNMENT; ACCORDING TO AGREED-UPON PROCEDURES ISRS 4400 REVIEW THE FOLLOWING AREAS IN ACCORDANCE WITH THE TERMS OF REFERENCE BELOW

Mandatory procedures that must be included:

• Observe whether the financial report is structured in a way that allows for direct comparison with the latest approved budget^[2].
• Observe pro inspect whether the financial report provides information regarding:

1. Financial outcome per budget line (both incomes and costs) for the reporting period and columns for cumulative information regarding earlier periods under the current agreement.
2. When applicable, compare if the opening fund balance^[3] for the reporting period matches with what was stated as the closing fund balance in the previous reporting period.
3. A disclosure of exchange gains/losses. Inquire and confirm whether the disclosure includes the entire currency exchange chain from Sida’s disbursement to handling the project/programme within the organization in local currency/ies, if applicable.
4. Explanatory notes (such as, for instance, accounting principles applied to the financial report).
5. Amount of funds forwarded to implementing partners, when applicable.
   • a) Inquire and inspect with what frequency salary costs during the reporting period are debited to the project/programme.

Choose a sample of three individuals for three different months and:

1. Inquire and inspect whether there is supporting documentation^[4] for debited salary costs.
2. Inquire and inspect whether a manager documented and verified the actual time worked. Inquire and inspect which frequency reconciliations are performed between debited time and actual worked time.
3. Inspect whether the Cooperation partner complies with applicable tax legislation with regard to personal income taxes (PAYE)^[5] and social security fees.

2.4  a) Inspect and confirm that the unspent fund balance (according to the financial report) at the end of the financial year is in line with information provided in the accounting system and/or bank account.

b) Applicable in the final year: Inspect and confirm the unspent fund balance (including exchange gains) in the financial report and confirm the amount that shall be repaid to Sida.

THE REPORTING

The reporting shall be signed by the responsible auditor (not just the audit firm^[6]) and shall include the title of the responsible auditor.

3.1 Reporting from the ISA assignment

The reporting from the auditor shall include an independent auditor’s report in accordance with the format in standard ISA 800/805, and the auditor’s opinion shall be clearly stated.  The financial report that has been the subject of the audit shall be attached to the audit report.

The reporting shall also include a Management letter that discloses all audit findings and weaknesses identified during the audit process. The auditor shall make recommendations to address the identified findings and weaknesses. The recommendations shall be presented in priority order and with a risk classification.

Measures taken by the Cooperation partner to address weaknesses identified in previous audits shall also be presented in the Management Letter. If the previous audit did not have any findings or weaknesses to be followed up on, this must be clarified in the audit reporting.

If the auditor assesses that no findings or weaknesses have been identified during the audit that would result in a Management Letter, an explanation of this assessment must be disclosed in the audit reporting.

3.2 Reporting from the ISRS 4400 assignment

 QUALIFICATION REQUIREMENTS

Obligatory requirements

• Experience in the domain of a minimum of 5 years;
• Experience in conducting organizational audits for NGOs financed by national and international organizations;
• Fluent knowledge of Romanian and English at the adequate level to analyze and present, as the Expenditure Verification Report and the Management Letter must be presented in English and Romanian.

 Structure of the offer:

• Description of the company and arguments for the opportunity of its selection;
• Name of the company, address, contact person, and phone number;
• List of organizations for which the audit company carried out audits during the last 5 years;
• Copy of the license for the audit activities;
• Description of the qualification of the members of the audit team;
• CV-s of the auditor or auditors who will carry out the audit with the list of organizations for which they carried out the audit and a list of 3 reference persons/companies;
• Financial offer, in EUR
• The offer has to be submitted in English.

Evaluation criteria:

• Presentation of the full set of documents indicated in the Structure of the offer indicated above;
• Relevant experience in the requested audit, specific to non-governmental organizations in accordance with international standards specified above;  
• Qualification of the auditor/auditing team which will carry out the audit;
• The most advantageous offer respecting the indicator quality/price.

The selection of the Auditor will be approved by the responsible person from SIDA. Sida reserves the right to approve the Cooperation Partner's selection of the auditor and may require that the auditor shall bе replaced if Sida finds that the auditor has not performed satisfactorily or if there is any doubt about the auditor's independence or professional standards.

The Submission of the offers:

The deadline for the submission of the offers is February 15, 2023

The offers could be sent to MD-2009, Chişinău, str. Vlaicu Părcalab 27/1,  or by e-mail to the address procurement@ecocontact.md with the statement “Tender - Audit Company for Green Justice Project”.

Additional information could be obtained at the phone: 022 99 61 62, contact person Anastasia Pogor, financial manager.

^[1] The International Auditing and Assurance Standards Board (IAASB)

Template decision no:2021-002235  Department: VERKSTOD/JUR  Other: 

Version no: 1.2  Date: 20211110  Other:

^[2] The budget is attached to the agreement with Sida as an annex and any updates should be supported by written approval by Sida.

^[3] I.e., funds remaining from disbursements made during the previous reporting period/s

^[4] Debited salary costs should be verified by supporting documentation such as employment contracts.

^[5] Pay As You Earn