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Hoffnungszeichen | Sign of Hope e.V.
Type of Contract
Type of Audit
CADECOM National Office, Lilongwe, Malawi
November 27th 2020
January 4th 2021
Final Report January 29th 2021
From January 1st 2020 – December 31st 2020
Strengthening of small holder farmers’ resilience and self-help capacities against the effects of climate change in Mchinji
Total Project Budget
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 Catholic Development Commission in Malawi (CADECOM) will be the local implementing agency.
The aim of the project is to achieve food security and to create resilience of 3,000 small holder farmers in the district of Mchinji against climate-related natural disasters. This shall be achieved through the promotion of sustainable and efficient agriculture and sustainable mechanisms of resource management, through the creation of improved and alternative income opportunities and through the empowerment of the target group to exercise and claim their rights. The promotion of self-help capacities on the basis of existing strengths and resources in the project region lies within the focus of the project approach.
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.
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 Strengthening of small holder farmers’ resilience and self-help capacities against the effects of climate change in Mchinji for all funds received and expended by CADECOM from January 1st 2020 – December 31st 2020. Additionally, the audit shall give recommendations on strengths, weaknesses, and required improvement in the project-related financial and human resources management systems of CADECOM.
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 CADECOM.
The auditor is expected to produce an audit report, an audit certificate and a management letter, which will comprise the following:
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 CADECOM 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 CADECOM. Any expenses for field trips, postal and translation services and other expenses shall be included in the auditor’s proposed budget. CADECOM 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 Malawi