Terms of Reference for the External Auditors
Job Description
Terms of Reference for the External Auditors
Organization: GREDO- Gargaar Relief and Development Organization
Position Title: External Audits
Location of assignment: Baidoa
Announcing Date: 15th April 2025
Closing Date: 30th April 2025
Commitment to Diversity: GREDO is an equal opportunities employer.
Submission Email: Consultant@gredosom.org
ORGANIZATIONAL BACKGROUND
Gargaar Relief & Development Organization (GREDO) is a local Somali non-governmental organization based in Baidoa, Somalia but which has sub-offices and carries out humanitarian activities in the regions of South-Central Somalia. GREDO is an indigenous non-profit, non-political and voluntary organization whose main objective is to reach grass-root communities affected by the prolonged conflict and recurrent cyclical natural disasters in Somalia. Established December 1992 out of a necessity and need for partnerships in relief programs and in response to the catastrophic humanitarian crises.
GREDO currently implements different project in sectors and thematic areas of Health & Nutrition. Livelihood, Education, WASH; Resilience. Durable Solutions, Peace building, Protection and Advocacy.
To accomplish the above objectives in Somalia, the Association has established its Headquarter in Baidoa and sub offices in Mogadishu and in the regions of South-Central Somalia to facilitate its program implementation upon the country. The purposes of the Branch are to enhance creation of collaborative community engagement environment, build trust with the community and facilitate the smooth running of programmatic interventions.
Organization’s Objectives
GREDO’s strategic objectives underscore the commitment to ensuring that all its programmers, services, resources, and networks are aligned with its mission to enhance sustainable development, community resilience, and humanitarian action.
Objectives and Scope of the Audit
This 3-year framework agreement seeks to engage an external audit firm to:
* Conduct independent annual audits for GREDO covering financial years 2024, 2025, and 2026.
* Provide professional opinions on GREDO’s financial position and operations.
* Review and report on compliance with donor regulations, statutory requirements, and internal controls. * Provide Management Letters with recommendations for improvement.
* Support GREDO’s accountability, transparency, and performance.
- _Note: The audit assignment will be renewed annually within the framework period. GREDO reserves the right to rotate or terminate the engagement at its discretion._
- Financial Statements Audit
The auditors shall:
* Express an independent and professional opinion on whether the financial statements present fairly, in all material respects, the financial position of GREDO, and its financial performance for the year then ended.
* Ensure that the financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS).
- Audit Standards and Procedures
The audit shall:
* Be conducted in accordance with the International Standards on Auditing (ISAs).
* Include such tests and procedures deemed necessary to form an audit opinion, including assessments of accounting principles used and significant estimates made by management.
- Compliance and Policy Adherence
The audit will:
* Verify that all expenses, accounts, and financial statements for the period are in compliance with:
* Generally Accepted Accounting Principles (GAAP)
* Donor-specific regulations
* GREDO’s internal financial management policies and procedures
- Management Letter
Upon completion of the audit, the auditors shall submit a detailed Management Letter highlighting:
* Specific deficiencies, control weaknesses, or gaps in the internal financial and operational control systems, with practical recommendations for improvement.
* Observations based on a test basis review of the appropriateness and completeness of supporting documents, records, and books of account relating to all project activities.
* Management responses to the findings and proposed recommendations, including actions to be taken and timelines for addressing the issues raised.
- Compliance Review
The audit will also:
* Examine, assess, and report on GREDO’s compliance with contractual obligations in agreements with funding partners and with applicable national laws and tax regulations.
* Identify and report any instances of non-compliance, including unsupported expenditures or any other irregularities.
* Quantify and disclose any missing or inadequate supporting documentation for incurred costs.
* Highlight any issues identified during the audit that may have a material impact on GREDO’s financial sustainability or operations.
- Deliverables – Audit Reports
The auditors shall submit a detailed audit report, which must:
* Clearly describe the methodology, scope, and approach used in the audit.
* Confirm that the audit was carried out in line with International Standards of Auditing and executed by duly qualified professionals. * Include the audited annual Financial Statements for the period.
* Be signed by the audit partner, indicating name, title, and credentials.
* Be written in English.
* Be submitted in both soft copy (for digital circulation to the GREDO Board of Directors) and two hard copies (for approval, signing, and filing by GREDO). Responsibility for Preparation of Financial Statements
The responsibility for preparation of the annual financial statements lies with the GREDO Board of Directors and Management.
- GREDO Management will prepare the books of accounts in accordance with Financial Standards
- Management is responsible for the implementation of accounting, administrative and financial procedures documented in the GREDO policy manuals
- GREDO financial year ends from 1 January to 31 December
- Rotation of auditors will be done yearly at the discretion of the GREDO management and Board of Directors.
NB: GREDO reserves the right to terminate the engagement should it be deemed necessary.
How to apply
Qualification Criteria for the Audit Firm
To be considered, the Audit Firm MUST meet the following minimum qualifications:
- Professional Competence
Demonstrate possession of the requisite knowledge, skills, and competencies necessary to perform audit responsibilities with due professional care.
- Firm Experience
- * The firm must have been operational for at least ten (10) consecutive years, with a minimum of eight (8) years actively engaged in auditing and taxation services within the East and Horn of Africa region.
* The firm must have a minimum of five (5) years of experience in auditing Not-for-Profit organizations.
- Legal Compliance
* The firm must be legally registered in the country of operation and comply with all applicable legal and regulatory requirements.
* The firm must be registered with a recognized national accounting or auditing regulatory body. Mandatory Documents for Proposal Submission
The following documents must be included in all submitted proposals:
- Copy of Certificate of Registration/Incorporation
- Valid Tax Compliance Certificate
- Company Profile or detailed CVs of the firm’s Partners
- Certificate of Good Standing from the relevant regulatory body
- Practicing license for the partners and firm.
Selection Criteria
GREDO will do the evaluation after the proposal submission deadline, the selection criteria will include the following:
- ADMINISTRATIVE REQUIREMENTS (5 POINTS)
Requirement
Points
Description
Submission of all mandatory requirements
5 Points
- Copy of Certificate of Registration/Incorporation.
- Valid Tax Compliance Certificate.
- Company Profile or detailed CVs of the firm’s Partners.
- Certificate of Good Standing from the relevant regulatory body.
- Practicing license for the partners and firm.
- TECHNICAL CAPABILITY & EXPERIENCE (55 POINTS)
- Past Experience in Auditing Not-for-Profit Organizations (30%)
Criteria
Points
Description
3 or more similar audit engagements with signed/stamped contracts30 PointsProvide at least 3 signed/stamped contracts or engagement letters for external audits conducted for NGOs.2 contracts of similar nature20 PointsProvide 2 signed/stamped contracts.1 contract of similar nature10 PointsProvide 1 signed/stamped contract.No experience provided0 PointsNo contracts or experience in NGO auditing.
- Proposed Work Plan / Lead Time (5%)
Criteria
Points
Description
Detailed work plan
5 Points
Provide a detailed audit timeline indicating ability to complete audit by May 2025, with milestones for planning, fieldwork, draft report, and final report submission.
- Technical and Staff Competence (20%)
Criteria
Points
Description
Firm operational for 10+ years with at least 8 years of active in auditing in East/Horn of Africa
5 Points
Evidence of registration and active years provided.
Experience in auditing NGOs (minimum 5 years)
5 Points
Include NGO clients with two letters of recommendation.
CVs of audit team including lead partner and senior staff
5 Points
CVs must demonstrate professional qualifications (CPA/ACCA), experience in auditing, and role assignments.
Detailed audit methodology and approach (risk & fraud detection)
5 Points
Provide an audit plan outlining procedures, timelines, and methodology for risk-based audit.
III. COMMERCIAL CRITERIA (40 POINTS)
The lowest evaluated financial bid will receive 40 points. The financial scores for other bids will be calculated using the formula:
Commercial Score = {(100% × Lowest Bid Value) ÷ (Current Bid Value)} × 0.4
TOTAL SCORE: 100 POINTS
- Technical offer: 60%
- Commercial/Financial Offer: 40%
GREDO invites and encourages all qualified Auditors in this field to send a proposal regardless of their location or nationality. Proposals should be submitted by 30th April 2025 at 16:00 hours East Africa Time (GMT+3), addressed to: Consultant@gredosom.org
Proposals received after the close of submission date, above, will not be considered.
- Child Protection
The responsibilities associated with this audit may involve interaction with children or young people. As an organization committed to upholding the dignity, protection, and safety of children, GREDO requires all engaged parties to strictly adhere to its Child Safeguarding Policy. This includes promoting awareness, ensuring appropriate protection mechanisms, enabling safe reporting, and taking decisive action where necessary.
- Core Values
GREDO operates on the foundation of the following core values:
- Integrity
- Honesty
- Openness
- Transparency
III. Confidentiality
GREDO expects the selected audit firm or individual to uphold the highest level of confidentiality regarding all information accessed before, during, and after the assignment. The consultant must adhere to strict professional and ethical standards throughout the engagement.
