Conduct Statutory Audit For FY24

TERMS OF REFERENCE (TOR)

Background Information                                                                                                                                                                        

Huruma Aids Concern and Care (HACOCA) is a registered non-governmental organization with its Head Quarter in Morogoro Municipal. It is a non-profit making organization incorporated under the Non-Governmental Organizations Act, 2002 of Tanzania to carry out interventions towards improving the quality of life and well-being of marginalized communities in Tanzania mainland by promoting health, nutrition, education, and household income.

Purpose of Engagement                                                                               

HACOCA seeks to hire a firm to conduct the statutory  audit and assist with the preparation of financial statements for its operations for the period of one (1) year, 2024. The successful firm will conduct the audit in our office which is found in Morogoro Municipal, in the Morogoro region. This engagement will be coordinated by our Finance & Accounting Officer, Grades Benedictor supported by other program and accounting staff.               

Scope and Expected Output

The purpose of an external audit is to verify that the annual accounts provide a true and fair
picture of the organization and donors’ finances; and that the use of funds is in accordance with the aims and objects as outlined in the constitution or agreement with the donor. The Audit will also check the internal controls of HACOCA, and check compliance with legislation and with HACOCA's internal rules and regulations. HACOCA fiscal year is from the 1st of January to the 31^st of December. The estimated expenditure is 2.3 billion Tanzania shillings for the year 2024

To undertake this assignment, the chosen firm is expected inter alia to possess the following core competencies and perform the following tasks:

1. The Auditor shall audit the Financial Statements of HACOCA and review its accounts for the period of one
2. The auditors shall express an independent professional opinion as to whether the financial statements present fairly, in all material respects, the financial position of HACOCA in accordance with the International Financial Reporting Standards (IFRS) and Non-Governmental Organizations Act, 2002 of Tanzania.
3. The audit shall be carried out in accordance with the International Public Sector Accounting Standards on Auditing (IPSAS) as issued by the International Public Sector Accounting Standards Board (IPSASB). The auditors in their duties shall comply with the duties imposed upon them by the Audits Professions Act, Federal Audit requirements, and the Non-Governmental Organizations Act, 2002 of Tanzania.
4. Management letter-The Auditors shall submit Management Letters for Statutory audit after the completion of the activity in which auditors shall:
5. Identify specific areas of weakness in systems and controls, and make recommendations for their improvement;
6. Examine on a test basis the appropriateness of supporting documents, records, and books of accounts relating to all project activities;
7. Include management responses to audit findings and recommendations;
8. Examine, assess, and report on compliance with the terms and conditions of the agreement between funding partners and HACOCA and applicable laws and regulations governing accounting and taxation;
9. The auditor shall report the identified amount in case there are any missing supporting documents;
10. Any matters that come to the auditor’s attention during the audit that might have a significant impact on the organization.
11. The Auditor shall issue draft reports for statutory to Management prior to the Final Audit Report
12. The Draft Reports shall be discussed by Management and management shall comment on the audit findings and observations
13. A meeting with the Management shall be called to discuss the findings of the audit, Auditors’ recommendations, and Management comments
14. Delivery of final reports and management letters. The reports shall be prepared in both hard and soft copies. FIVE (5) bound hard copies shall be produced and delivered to HACOCA. The audit reports shall:
15. Contain details of the method and scope of audit and assurance that the audit was performed in accordance with International Standards of Auditing and by a qualified auditor.
16. Be signed by the auditor responsible, stating the title.
17. Written in the English language.
18. HACOCA urges the audit is accomplished within two (2) weeks upon the inception of the activity.

Auditor’s Responsibilities

The Auditor shall:

1. Verify that there is compliance with Tanzanian legislation.
2. Verify that there is compliance with HACOCA's internal rules, regulations, and policies in relation to Invoice approval, Payment of bills, Payment of salaries, Reconciliation of bank accounts, Procurement, cash management, etc.
3. Verify, based on the materiality of each selected transaction, that:

• Invoices/ payments were approved by an authorized person.
• Costs have actually been incurred (authenticity).
• Cut-off: Expenditure was incurred during the respective accounting period.
• Costs were budgeted for.
• Costs were necessary for the operations (value for money).
• Invoices /payments were properly recorded in the accounting system.

4. Ensure that there is a systematic and representative verification of expenditure. The overall coverage of the review should be at least 40 % of the expenditure.
5. Perform Third Party Confirmations of

• Cash and bank balances
• Receivables from third parties - existence and valuation
• Payables – especially completeness of payroll-related liabilities

6. Verify through discussion with Management and confirmation from Legal Representatives/ Lawyers whether there are any pending litigations or claims against HACOCA.
7. Verify the financial and programmatic sustainability of the Organization
8. Verify Donor Agreement Implementation, specifically on

• Project / Program – specific Implementation and reporting
• Strategic Plan implementation

Deliverables

The services listed above will be contracted under a fixed price contract, where they will be submitted as individually packaged deliverables and the contractor will be paid on a per-deliverable basis. The deliverables will be submitted as follows:

Cost Proposal Considerations and Terms of Payment                                                                           

The following information on HACOCA operations shall guide you in coming up with realistic cost ad time proposal estimates:

1. Estimated level of transactions in FY2024: max 3000 individual transactions uploaded with an average of 500 vouchers/documents (payroll inclusive)

The cost proposal must include all applicable local taxes. Payment for deliverables will be made upon acceptance of each deliverable listed above. Once a deliverable has been accepted by HACOCA, the contractor may then submit an invoice for that deliverable. HACOCA has no obligation, under any circumstances, to accept services that do not meet the minimum quality standards, as required by HACOCA and its donor(s).

Required documentation                                                                                              

Submission checklist:

1. Registration document
2. Income tax & VAT certificates
3. Technical Proposal - containing information about the background of the firm, past performance references, personnel, audit methodology, and audit timeline (signed and stamped)
4. Detailed budget/cost proposal (signed and stamped)

Submission deadline                                                                                                                                                                

Proposals must be submitted by Friday, March  21, 2025, at 4:00 PM. All submissions should be sent through [email protected]. HACOCA reserves the right to not accept any offers submitted after the delivery due date.