Short term consultancy to conduct 2 audits

Background and Organisational Setting

Hoffnungszeichen | Sign of Hope e.V. is a Christian motivated organisation for Human Rights, Humanitarian Aid and Development Cooperation. Based in Constance, Germany, Sign of Hope is dedicated to helping those in distress and exploited people worldwide.

An audit is commissioned under the German Federal Ministry of Economic Cooperation and Development (BMZ) funding guidelines for development projects run by private German executing agencies.

Hoffnungszeichen | Sign of Hope e.V. will be the private German executing agency and the contracting party, while Green Lane will be the local implementing agency.

The livelihood of 144 households (about 576 people) in the project village Hayakavan has been improved through the distribution of more efficient seeds, improved methods of cultivation, irrigation and harvesting. The target group is able to increase its income through economic self-organization, in particular by setting up a cooperative, which enables them to operate collectively reagrding the storage of harvest, transport and marketing. The cooperative has enough revenue to be self-sufficient. The exchange of information between the small holder farmers on improved cultivation methods has been promoted and several farmers have become mediators for development in order to further develop the region.

Audit Objectives

The purpose of the in-depth audit is to provide Hoffnungszeichen | Sign of Hope e.V. with a sound basis for its accountability, transparency and accuracy in the financial disclosure towards the funding agency BMZ. The tasks of this recruitment relates to two stages:

1. An annual audit, with a detailed examination of all the supporting documents for 2020, to be carried out in February 2021;

2. An audit, with a detailed examination of all the supporting documents for the first half of 2021, to be carried out in July 2021. Furthermore, it will also provide a conclusive examination of the complete project duration (December 1^st 2017 – June 30^th 2020). Thereby, the auditor can refer to the last three annual audit reports to be available at that time.

This in-depth audit will verify the compliance with standards of the funding agency BMZ, Hoffnungszeichen | Sign of Hope e.V., national regulations and the international accounting standards.

The auditor will review the project’s financial documents, receipts lists, records of transactions, all vouchers and receipts disbursed, and relevant project documents in order to come up with a professional, independent opinion on the financial accounting of the project Improving the livelihood of small holder farmers through capacity building and the establishment of sustainable economic structures in Haykavan for all funds received and expended by Green Lane. Additionally, the audit shall give recommendations on strengths, weaknesses, and required improvement in the project-related financial and human resources management systems of Green Lane.

The audit will support the project quality assurance measures implemented by Hoffnungszeichen | Sign of Hope e.V. and contribute to the decision-making process with regard to the project management and monitoring of finances by Hoffnungszeichen | Sign of Hope e.V. and Green Lane.

Expected Deliverables

The auditor is expected to produce two audit reports, an audit certificate and a management letter), which will comprise the following:

1. Presentation of the scope and mandate of the audit, as well as the list of documents that formed the evidence for the audit,

2. An opinion whether financial statements (statement of accounts) are issued in accordance with the financial reporting framework of the project, BMZ requirements and an internationally recognised accounting standard,

3. Recommendations on identified shortcomings, and, if applicable, comments on the follow-up of audit observations and recommendations from previous years.

Audit documents can be issued in English or German.

Scope of the Audit

The audit should focus on the following:

· The correctness and completeness of the accounting records,

· The financial report, showing all project related income and expenditure structured by budget lines,

· Deviations of expenditure by budget lines. The expenditure, which exceeds or falls below the budget appropriations by more than 30 %, shall be explained separately, if the approval of the BMZ has not previously been obtained,**

· That receipts and relevant supporting documents are available for all project related income and expenditures,

· The management of the funds made available, which includes the transfer of project funds, all interest earned from the project funds during the reporting period and further income generated by the project,

· Reviewing the appropriate use of funds according to the project objectives,

· Evaluation of the efficiency and cost-effectiveness of the usage of funds,

· Budget adherence through the comparison between budgeted and actual costs in the currency in which the expenditure was incurred. The audit report will not convert the examined amounts into the Euro amounts,

· Reviewing if personnel costs and social security contributions conform to the regulations in the project country and are locally comparable,

· The economical use of the project equipment and assets,

· The inventory and the use of capital items, their whereabouts and their purposive usage,

· Compliance with the legal framework of the project (project agreements and annexes, contracts, etc.) and the donor requirements,

· Compliance with the policies of the local implementing partner regarding procurement, financial administration, human resources management and travel.

Procedures and Communication

The auditor will be given access to all necessary documents in the project offices through the local implementing partner Green Lane as well as relevant donor documents through Hoffnungszeichen | Sign of Hope e.V.

The auditor will be responsible to set up a schedule in agreement with the local implementing partner Green Lane. Any expenses for field trips, postal and translation services and other expenses shall be included in the auditor’s proposed budget. Green Lane will support the auditor with logistics and arrangements, however, all payments of the contract will be made directly by Hoffnungszeichen | Sign of Hope e.V.

Qualifications and Experience

· Necessary qualification to serve as a recognized independent auditing authority,

· Minimum of five (5) years of experience conducting external independent audits of projects funded by international institutional donors in Armenia.