TERMS OF REFERENCE FOR THE PROVISION OF OUTSOURCED INTERNAL AUDIT SERVICES
The Aga Khan Health Service, Tajikistan (AKHS) and Aga Khan Agency for Habitat Tajikistan (AKAH) are agencies of the Aga Khan Development Network (AKDN) operating in Tajikistan. AKHS is a Public Foundation incorporated in Tajikistan, and AKAH is a branch of a Swiss Company, AKAH SA. These two agencies invite a joint proposal from suitably qualified firms for the provision of internal audit services.
1. OBJECTIVES OF THE INTERNAL AUDIT FUNCTION
The objective of this bid is to appoint a suitable, independent service provider that can provide an appropriate internal audit service for the agencies. The internal audit function should assist the agencies to accomplish their objectives by bringing a systematic and disciplined approach to evaluating and improving the effectiveness of risk management control and governance processes.
One of the objectives of the internal audit function is to assist the Audit Committee in the effective discharge of its responsibilities. This has to be done through furnishing them with analyses, appraisals, recommendations, counsel and information concerning the activities that have been reviewed as well as regular follow-up. Other objectives/standards/controls of the audit function, are to review the following:
· Internal control processes;
· The information systems environment;
· The reliability and integrity of financial and operational information;
· The effectiveness of operations;
· Appropriateness of, and compliance with, policies and procedures, and compliance with the Memorandum of Understanding (MoU) of donor funded programmes and international best practices;
· The safeguarding of assets;
· The economical and efficient use of resources;
· The achievement of established operational goals and objectives; and
· Compliance with laws, regulations and controls.
· Investigate frauds at the request of Audit Committee, including Global Head of Internal Audit and the Head of Finance, Geneva.
2. SCOPE OF THE WORK
The scope of the internal audit function includes the points listed below. However, should any other function be regarded as imperative by the bidder, it should be added and clearly defined.
· The internal audit function must, in consultation with the Audit Committee, prepare:
o An annual Internal Audit Plan based on its assessment of key areas of risk for the agencies, having taken into consideration their current operations, and the operations proposed in their approved annual budgets and plans.
o Plans indicating the scope, input hours and timelines of each audit in the annual internal audit plan.
· The internal audit function must co-ordinate with other internal and external providers of assurance to ensure proper coverage and minimal duplication of effort (e.g. GRB and audits conducted by, or on behalf of, donor agencies).
· The internal audit function must assist the Agencies in maintaining effective controls by evaluating those controls and developing recommendations for enhancement or improvement.
· The internal audit function must address reports to the Audit Committee and the Global Head of Audit, Geneva, detailing its performance against the plan, and so allow effective monitoring and intervention, when necessary.
· The audits that will need to be taken into account at the Agencies are, among others:
o Internal control processes;
o The information systems environment;
o The reliability and integrity of financial and operational information;
o The effectiveness of operations;
o Appropriateness of, and compliance with, policies and procedures;
o Compliance with the Memorandum of Understanding (MoU) of donor funded programmes;
o The safeguarding of assets;
o The economical and efficient use of resources;
o The achievement of established operational goals and objectives; and
o Compliance with laws, regulations and controls.
Fraud and Irregularities
In planning and conducting its work, the internal auditor should seek to identify serious defects in internal controls, which might result in possible malpractices. Any such defects must be reported immediately to the CEOs of the agencies, the Chairs of the Audit Committees and the Global Head of Audit and Head of Finance, Geneva without disclosing these to any other staff. This also applies to instances where serious fraud and irregularities have been uncovered.
3. EXPECTED OUTCOMES AND DELIVERABLES
Performing Audit Assignments
Each assignment should at least consist of the following:
o A pre-audit survey;
o An audit planning memorandum;
o Minutes of the entrance meeting;
o A risk assessment document;
o System descriptions;
o Audit programmes;
o Sampling methodology;
o Mechanisms for follow-up on matters previously reported and feedback to the Audit Committee;
o Mechanisms to ensure that working papers are reviewed at the appropriate level;
o A record of work performed;
o A review of work performed;
o Audit findings and recommendations;
o Reporting (a draft internal audit report and a final internal audit report). The latter should include management responses to the audit report and the internal auditor’s assessment of the adequacy of those responses.
o Follow-up on previous audit findings.
Reporting Requirements
The structure of the report is to be as follows:
o Introduction;
o Audit objective and scope;
o Background;
o Executive summary, highlighting significant findings;
o Findings, recommendations and management response (including person responsible and implementation dates);
o All audits as carried out according to the Internal Audit Plan and as approved by Audit Committee; and
o Conclusion.
The auditor is to prepare a summary of the audits carried out and the key findings to the Audit Committee at least ten days prior to each meeting of the Audit Committee. Management will prepare a report on the implementation status of previous audit recommendations; that report and the internal auditors’ observations thereon will also be circulated to the Audit Committee ten days before it meets.
In addition, the audit firm will be required to provide a quarterly update report and facilitate meetings of the Audit Committee.
4. QUALITY ASSURANCE REVIEWS OF THE WORK
The auditor shall ensure that all work conforms to the IIA Standards for Professional Practice. Such work may be subjected to external quality assurance, as may be considered necessary.
5. INDEPENDENCE AND OBJECTIVITY OF STAFF
In carrying out the work, the auditor must ensure that their staff members maintain objectivity by remaining independent of the activities they audit.
6. DURATION OF CONTRACT
The contract is expected to run for three years, commencing on the date of signing the Agreement. It will, however, be renewable annually; this will be subject to a review of the previous year’s performance against the Internal Audit Plan.
7. EVALUATION CRITERIA
Phase 1: Technical Evaluation
The evaluation of the technical part of the proposal will be on the basis of the service provider’s responsiveness to the terms of reference, as well as the application of the evaluation criteria and points system as indicated below. Each responsive proposal will be given a technical score.
Criteria
Points Allocated
Experience of the firm in internal audit services, including specialised skills, expertise and value-added services
40
Experience in the internal audit of Public Foundations
20
Qualifications and experience of team members
30
Ability to provide the services and adequate institutional support
10
TOTAL
100
The proposals will receive further consideration if they score at least 60% minimum points out of the 100 points on technical criteria as listed above and achieve a subminimum of 50% in respect of each criterion.
Phase 2: Pricing Evaluation
Proposals that are shortlisted for further consideration based on the above criteria will then be evaluated on the basis of a mix of technical and financial criteria.
The following criteria will be used for the evaluation of the proposals:
· Pricing 100 points
8. TECHNICAL PROPOSAL AND CRITERIA
The written tender application should focus on the following aspects to qualify and be considered:
· Experience of the firm in internal audit services, including specialised skills, expertise and value-added services.
o Demonstration of the firm’s substantial internal audit experience.
o Specialised skills, expertise and value-added services in the field of internal audit, with an emphasis on best practice methodology, tools and technology used.
o Availability of forensic audit skills and tools.
o Availability of computer audit skills and tools.
· Experience in the internal audit of Public Foundations.
o Understanding of the Aga Khan Development Network activities in Tajikistan
o Experience in the auditing of public foundations, with reference letters if possible.
o Experience in auditing of donor funded programmes
o External references, the size of audits and the size of the client base.
· Qualifications and experience of team members.
o The relevant individuals must be registered with the IIA.
o Detailed CVs of the auditor/s who will be responsible for managing the internal audits and the person who will be signing the audit plan and reports.
· Ability to provide the services and adequate institutional support.
o Shareholding and management structure.
o Years in business.
o Professional staff numbers.
9. FINANCIAL PROPOSAL
Firms bidding for the internal audit services for the two agencies should provide a quotation for the fees to be charged for each agency for each year, exclusive of direct reimbursable expenses. Firms may request further information from the agencies, via the CFOs of the two agencies, to enable them to provide the appropriate quotation. Information requested by a bidder will be shared with other bidders to ensure a fair and transparent process.
How to apply:
1. SUBMISSION DETAILS
Proposals should be forwarded to the offices of Aga Khan Agency of Habitat at the address below:
· Address: 34 Rudaki Avenue, Tcell Plaza building 10th floor, Dushanbe, Tajikistan
· Closing Date: July 6, 2020
·· Closing Time: 17:30 CoB
For further information, contact:
Aamir Jessani Aamir.jessani@akdn.org
Copying:
Alex Manu alex.manu@akdn.org
Habib Peermohammad habib.peermohammad@akhst.org