Terms of Reference for an annual financial audit of the project ShiftEdu
ADA Project No. 8362-00/2018
„Digital skills for employment in the modern economy“
SELECT THE OFFERS FOR THE PROCUREMENT OF AUDIT SERVICES
Educational Centre PRO DIDACTICA announces contest for selection of an audit company or auditor to audit the financial statements of the project „Digital skills for employment in the modern economy” funded by the Austrian Development Agency under Contract No. 8362-00/2018.
Type Audit – audit of the customer under ISA 800;
Project budget (grant awarded by ADA) – 621.000 EUR;
Total project budget (including the contribution in cash by the project applicant and the local project partner): 690.000 EUR;
The period of implementation of the project – 1 December 2018 – 30 November 2021;
Reported Expenses as of 30 November 2019, 30 November 2020 and 30 November 2021.
The Republic of Moldova, as well as all countries over Europe, faces an increasing ICT skills gap and with a low level of digital literacy. These drawbacks caused by the insufficient use of information society advantages, remove many citizens from ICT-based society and economy.
Based on previous successful cooperation in the field of ICT VET, ADA extended its support to VET field with the aim to integrate ICT in VET as cross-cutting subject. Educational Centre PRO DIDACTICA is the implementing organization for the project „Digital skills for employment in the modern economy“, that started in December 2018.
Modern societies are increasingly based on information and knowledge. Therefore, each society needs to build workforces which have ICT skills to handle information; to enable citizens to be knowledgeable and resourceful so they are able to manage their own lives effectively; to encourage all citizens to participate fully in society and influence the decisions which affect their lives; to foster cross-cultural understanding and the peaceful resolution of conflict.
Education plays a key role in creating conditions for sustainable human development and building knowledge based society. The Ministry of Education of the Republic of Moldova policy aims to raise the quality of education that young people obtain in the educational process. The success of an individual depends on its ability to adapt to change and life-long learning, and the educational system must provide an appropriate environment for the development of these capacities.
The proposed project is in line with the Government of Moldova’s ongoing reforms in the educational sector. Namely, the government’s primary objective in education is to improve the quality, efficiency, and relevance of the education system to meet the needs of the labor market and the broader economy. However, the economic and technological development, demographic and social realities are constantly challenging the implementation of this mandate. In order to catch up with dynamic technological development, it is of utmost importance that citizens acquire digital competences. The recent policy documents in education and economic sectors are focused on ICT and digital competences and offer a background for the implementation of project activities.
The project’s intended impact is to substantially increase the number of youth, both girls and boys, who have relevant skills, including technical and vocational skills, for employment, decent jobs and entrepreneurship (based on SDG 4, target 4.4).
The project’s expected outcome is that the Information and Communication Technologies are effectively integrated into the vocational education and training system (based on Moldova Education Strategy 2020) thus enhancing the access to qualitative and relevant education (based on SDG 4).
The project will be implemented throughout a 3-year period and result in the following 4 outputs:
Output 1: Digital skills are acknowledged and continuously supported by VET institutions at strategic level and as part of teaching and organizational culture.Activities to achieve this expected output will include: Capacity development of VET institutions’ manager of 6 beneficiary institutions through trainings, coaching visits and consultation in the process of IT infrastructure procurement, IT management systems development and maintenance; design of modern spaces.
Output 2: VET teachers and instructors have better digital competence for integrating ICT in teaching, learning, assessment and class management. Activities to achieve this expected output will include: Develop, include in the CEITI in-service training offer and implement ToT programs, mentoring program, digital competence training program for teachers; organise one study visit.
Output 3: Digital content for VET trades and specialties is developed and open education resources are increasingly used in teaching, learning and assessment. Activities to achieve this expected output will include: Developing guidelines on implementation of curricula from ICT integration perspective; developing digital content for 3 trades and specialties; implementing training programs on the development of digital content and copyrights and OER promotional campaign;
Output 4: Modern learning spaces created to foster the integration of digital skills in educational process as well as the student-centred learning. Activities to achieve this expected output will include: Procurement of modern digital devices in 5 VET institutions and CEITI; organising trainings on modern teaching methods using spaces and IT equipment; organising 6 online and offline network meetings for teachers.
Objectives of the audit
The objective of the audit for the above mentioned project, following the General Terms and Conditions to the Austrian Development Cooperation’s Grant Agreement, specifically Art. 4.6. of the General Terms and Conditions for projects financed by the Austrian Development Cooperation to the Annual audit by external auditors, is to enable the auditors to express an independent professional opinion on the periodical and final financial position of the project and to ensure that the funds granted to the Project have been used for their intended purposes.
The project budget provides the basis for preparation of the „Digital skills for employment in the modern economy“ project’s financial statements by the project implementing partners that are established to reflect the financial transactions in respect of the project. The implementing partners maintain adequate internal controls and supporting documentation for respective project transactions.
The audit will express the opinion on the total project budget, including the contribution in cash by the project applicant Educational Centre PRO DIDACTICA.
The assignment will include:
▪ verifying sound financial management and accuracy of book keeping on the basis of original vouchers
▪ auditing of accounts on the basis of original vouchers and invalidation of original vouchers
▪ auditing of the plausibility of the expenditures, assignment of expenditures to the respective budget items
▪ verifying that the financial statements provide a true picture of the project’s finances
▪ verifying compliance with the respective social and labour law
▪ verifying proper application of the applicable procurement law
▪ verifying contribution from all sources and co-financing contributions
Each financial statement shall contain a clear description of cash flows, evidenced by currency exchange confirmations and bank statements.
It must be evident from the bookkeeping records and from the audit of accounts that the expenditures are covered by the revenues and thus be verified that there is no duplicate financing by external funding bodies.
Scope of audit
To achieve the above objectives, the audit company will perform the following tasks:
- The audit shall be conducted in accordance with International Standards on Auditing (ISA) issued by IFAC – International Federation of Accountants, with special attention to ISA 800″ Independent Auditor’s Report on Special Purpose Audit Engagements”, and therefore the Code of Ethics for Professional Accountants;
The audit process will examine in particular the following:
- All project funds including own and third party contributions have been used and recorded in accordance with the conditions of the grant agreement Nr. 8362-00/2018 and of the Project Document, with due attention to economy and efficiency and only for the purposes for which the funds were provided;
- Own and third-party contributions (co-financing) have been provided, used and recorded in accordance with the conditions of the grant agreement Nr. 8362-00/2018 and of the Project Document, with due attention to economy and efficiency and only for the purposes for which they were provided;
- If it is evident from the bookkeeping records and from the audit of accounts that the expenditures are covered by the revenues and thus verify that there is no duplicate financing by external funding bodies
- Goods, works and services financed have been procured in accordance with the rules and procedures defined by the grant agreement Nr. 8362-00/2018 and by the Project Document and recorded properly;
- If the expenditure for a transaction or a transaction have been properly recorded in the accounting system and the Financial Report and whether they are supported by documentary evidence;
- If expenditures are in accordance with the project budget (budget lines respect and approval of changes if they occurred);
- If all of the supporting documents are present and maintained as required by the grant agreement;
- If all financial reports submitted to Austrian Development Agency correspond to actual costs incurred, and if they correspond to the organization’s accounting system;
- Bank accounts have been maintained in accordance with the provisions, rules, and procedures of the grant agreement Nr. 8362-00/2018 and of the Project Document;
- Special attention will be given to financial reports to donors, i.e. if the reports were prepared in accordance with the conditions specified in the grant contract and standard accounting principles and give a true and fair view of the financial position of the Project as of the audited period;
- The auditors will audit the invoices and will receive access of implementing organisation – Educational Centre PRO DIDACTICA.
- Verification of the fixed assets register (inventory list) including existence of documentation on handover of supplies or works financed with project funds
- the auditor must not have been involved in the operation’s accounting;
- the auditor must not personally be connected in any way with the organisation being audited;
- The auditor must have experience in the financial audit of projects financed by international donors, during 2014-2019 period (at least 2 project references);
- The auditor should be able to conduct the audit in accordance with International Standards on Auditing (ISAs);
- The auditor should comply with ethical requirements of Audit and follow the highest standards of the Code of Ethics for External Auditors;
- The auditor must be a legally established entity that is certified to conduct external audits in the country where the audit shall take place.
The auditors will be given access to all legal documents, correspondence and any other information associated with the project and deemed necessary by them.
It is recommended that the auditors become familiar with the following project documents:
- Project Document, including all relevant annexes
- Grant Agreement Nr. 8362-00/2018, including general terms and conditions (esp. relevant conditions for auditing)
- Co-Financing Agreements between the grant recipients and third parties
- General Terms and Conditions to the Austrian Development Cooperation’s Grant Agreement for Support in the Field of Development Cooperation (annex to ToRs)
- Official project budget
- Financial project reports, including complete list reported expenditures
- Original vouchers/receipts
- Access to the used bookkeeping system
- Access to information related to bank and cash statements
- Any other documents required by the auditor for the performance oh his/her tasks
The project managers, the accountants and the staff working on the project will be open to collaboration with the expert auditor.
Audit / reporting schedule
The auditor is requested to carry out 2 yearly audits and 1 final audit. The audits shall cover the following periods of implementation:
- The financial audit report for the period 01.12.2018 – 30.11.2019 at latest by 10 January 2020;
- The financial audit report for the period 01.12.2019 – 30.11.2020 at latest by 10 January 2021;
- The final financial audit report for the period 01.12.2020 – 30.11.2021 at latest by 15 February 2022.
The audit schedule and the audit report will be submitted to the Educational Center PRO DIDACTICA.
The Audit Company is responsible for the confidentiality of information and documents to which he had access during the mission.
The audit report will comprise (i) the auditors’ opinion on the project financial statements and (ii) a complete set of project’s financial statements and other relevant statements including at least:
1) Contracting Organisation (Educational Centre PRO DIDACTICA)
▪ Implementing organisations’ names and contact details
▪ Project number and name
▪ Reporting period and currency
▪ Exchange rates used in the Financial Project Report
▪ Total amount of budgeted income and expenditures
▪ Total amount of actual income and expenditures
▪ Comments on not-accepted vouchers in Financial Report Form and in Audit Report
▪ Closing balance (including cash, bank and other assets, e.g. advance payments and outstanding checks)
▪ Complete list of project funds transferred, including donors’ names, dates and exchange rates
▪ Indication on treatment of taxes and especially VAT
▪ Comments on not-accepted vouchers
▪ Inventory list of all goods/equipment procured within the project with a value of over Euro 400,-
▪ Reference to contact persons/sources of information from implementing partner organisation during audit execution
▪ Auditor’s name, position, address, phone, fax and e-mail
▪ Date, auditor’s signature and authorization
2) Statement of Receipts (funds received by the donors, funds received by third party as in-cash contributions to the project)
3) Statement of Expenditures (expenditures incurred during the period for which the audit takes place)
4) Procurement documentation (if applicable) proving that project procurement activities have been conducted in accordance with the grant agreement Nr. 8362-00/2018 and the Project Document, including any notes describing procurement procedures
5) A detailed comprehensive list of all fixed assets purchased, with given detailed description of type of asset, technical identification, date of purchase, price of purchase, value and condition at date of report, location at date of report
6) A detailed comprehensive list of single expenditures / invoices / receipts / cash payments or reconciliation list of bookkeeping
The financial report will consist of a detailed list of expenses (according to Budget lines and the budget/expenses overview (according to the format of Austrian Development Cooperation; format will be provided by Educational Centre PRO DIDACTICA)
The Auditor’s Report should offer an opinion on the following areas:
▪ Is the Financial Project Report in accordance with bookkeeping?
▪ Do the received funds match the bookkeeping?
▪ Does the bookkeeping match the vouchers?
▪ Are there proper vouchers for all transactions?
▪ Does the bookkeeping match the Official Bank Account Statements and Cash Book?
▪ Are the funds used according to rules and requirements of Austrian Development Cooperation, laid down in the funding contract
▪ Provide information on the treatment of taxes (especially VAT) in the financial reports. For projects co-financed by the Austrian Development Cooperation (ADC), VAT is usually not eligible unless it is proven that the VAT is borne effectively and finally by the organisation.
▪ Verify proper application of the applicable procurement regulations according to ADC General Terms and Conditions
▪ Proof of the existence of all capital assets and investments purchased with the project funds according to the inventory presented;
Any ineligible expenditure will be disclosed in an annex to the audit report.
In addition to the audit report, the auditors will prepare a “management letter” which will include:
- Comments and recommendations on possible deficiencies concerning internal control systems and other matters that the auditor considers necessary to inform management about;
- Identify specific deficiencies and areas for improvement in the internal control systems and make recommendations on their improvement;
- Report on the implementation status of recommendations pertaining to previous period audit reports;
- Report on the compliance of all financial obligations;
- Communicate all issues or incidents occurred during the implementation of audits that have had or may have a serious impact on project implementation;
- Warnings to the Austrian Development Agency about any other issues that are considered important and relevant.
Audit reports will be written and signed in two copies, one for Educational Centre PRO DIDACTICA and one for the Austrian Development Agency.
The reports must be prepared both in Romanian and in English.