Terms of References For External Audit Services at Hanns R. Neumann Stiftung

Hanns R. Neumann Stiftung (HRNS

TERMS OF REFERENCES  FOR EXTERNAL AUDIT SERVICES 

Background 

Hanns R. Neumann Stiftung (HRNS) is a Non-Government Organization registered in Tanzania and has been implementing development projects in northern and southern Tanzania since 2006. HRNS aims to empower smallholder farming families in coffee communities by strengthening their ability to independently achieve sustainable livelihoods. The foundation follows a holistic approach that addresses the following core components: Farmer Organizations, Family business, Climate change, youth, and Gender equality. The Foundation’s main office is in Usa River, Arusha Tanzania and runs field offices in Kilimanjaro, Mbeya and Mbinga. HRNS also, operates in other countries including Honduras, Guatemala, Brazil, Uganda, Ethiopia and Indonesia. The Headquarters of the Foundation is based in Hamburg, Germany. 

Registration Status 

HRNS is a non-governmental organization formed in September 2010. It was initially registered under the Companies Act, 2002 as a Company limited by guarantee without share capital on 15th July 2010. On 4 June 2014, the organization was re-registered under the terms and conditions of the Non-Governmental Organizations Act, 2002 as International NGO with Registration No. I NGO/00007240. 

Objective of the external audit 

1. The objective of the external audit is to express an independent professional opinion on the Financial Statements of the HRNS. These Financial Statements among others consists of: Statement of Comprehensive Income, Statement of Financial Position, and Statement of Changes in Fund Balance and Statement of Cashflow for the year under review. 
2. The books of accounts of HRNS provide the basis for the preparation of HRNS’s financial statements. Proper books of accounts, as required by law, have been maintained by HRNS, along with adequate internal controls and supporting documentation for transactions.
   

Auditing standards 

The external audit is carried out in accordance with International Standards on Auditing (ISA)  and includes such tests and auditing procedures as the auditor considers necessary for the  assignment.  

Scope of work 

The auditor shall be required to:

1. Carry out tests of transactions as are necessary, in order to obtain an understanding of  the accounting system, to assess its adequacy as a basis for the preparation of the  financial statements and to establish whether adequate records have been maintained as required by the HRNS Financial Rules, Financial Manuals and applicable rules of the  donors.
2. Conduct an in-depth and exhaustive review of the internal control system to have  sufficient knowledge of the procedures underpinning the systems, as contained in HRNS Financial Rules.
3. Confirm that, although the responsibility for preventing irregularity and fraud remains with  the Management of HRNS, the audit has been planned to ensure a reasonable  expectation of detecting material misstatements in the financial statements.
4. Confirm that the goods and services financed have been procured in accordance with the  sound procurement procedures outlined in the HRNS Procurement Manual v. Confirm that the Financial Statements have been prepared in accordance with  International Accounting Standards and provide a true and fair view of the financial  position of HRNS as of the end of the financial year. 
5. In addition to the audit report, the Auditor will be required to prepare a management letter  on the following, 

•  Give comments and observations on the accounting records, systems and  controls that were examined during the course of the audit.
• Identify Specific deficiencies and areas of weakness in systems and controls  and make recommendations for improvement.
• Communicate matters that have come to their attention during the audit which  have a significant impact on the implementation and sustainability of the  organisation.
• Areas of risk that need to be flagged out to management; and
• Bring to the Director attention any other matters that the Auditors consider  pertinent.

The above-defined scope does not in any way restrict the audit procedures or the techniques  that the auditor may choose to use when forming an opinion on the financial statements being  audited. 

Total Spending 

The annual turnover for HRNS for the year ending 2024 is approximated at the total spending of  €2,000,000. 

Contract period  

The engagement of the successful audit firm will be through a framework contract for up to three  years, subject to annual confirmation by the HRNS Board of Directors based on an evaluation of  the effectiveness, independence, and objectivity of the external auditors. 

Letter of engagement  

A formal letter of engagement specifying the scope of audit shall be prepared and signed between  the HRNS and the auditor prior to the beginning of the assignment. The letter of engagement  shall also clearly spell out the responsibilities of the two parties.  

Qualifications and experience 

1. The firm should be registered and licensed by the National Board of Accountants and  Auditors (NBAA) to practice financial and accounting audit as its core area of business. i
2. The firm must have a physical address and a valid business permit.
3.  The firm must hold a current practicing certificate issued by the NBAA. iv. The firm should show proof of relevant technical and professional qualification; proof of  qualification should be in respect of all registered partners, managers and other key  professionals
4. The firm should demonstrate that it has the capacity, capability and experience required  to undertake the audit.
5. The firm should have at least 5 charity organizations or NGOs references among its  clients.

Place of audit and time of audit 

The audit will be carried out at HRNS Office in USA River/Arusha. 

How to apply 

Interested firms are to submit their proposals by email detailing their full profiles, qualifications,  work plan, fee estimates and other requested information through to: [email protected] with no later than 22nd November 2024.