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Plan International Sweden's Terms of Reference for Audit of Sida funded Project/Programme Support including ISRS 4400

Introduction

Plan International Asia and Pacific Regional Hub wishes to engage the services of an audit firm for the purpose of auditing the SIDA CIVSAM FY20-24: Core Support to CRC Asia Strategy 2019-2024 during January – December 2024 (FAD Number: ARO100112) as stipulated in the agreement between Plan International Asia and Pacific Regional Hub and Plan International Sweden. Plan International Asia and Pacific Regional Hub has for the audit period obtained a grant of 2,215,966 SEK from Plan International Sweden/Sida. The audit shall be carried out in accordance with the international audit standards (ISA) issued by IAASB^[1]. In addition to the audit of the financial statements, the assignment also includes an engagement to perform agreed-upon procedures regarding financial information in accordance with International Standards on Related Services (ISRS) 4400 as well as in accordance with the terms and review areas listed in section II.

The audit and the additional engagement shall be carried out by an external, independent and qualified auditor. The auditor shall be registered and have a license with the Federation of Accounting Profession (FAP). Plan International Sweden shall approve the selection of auditor before the audit begins and a copy of the license shall be shared with Plan International Sweden. When contracting an audit firm Plan International Asia and Pacific Regional Hub shall fill in a template that shall be shared with SNO, see Appendix 1 to this document. The signing auditor shall not be contracted for the assignment for more than a seven-year period. The same audit firm can however be contracted for longer than seven years. It is possible to procure an audit firm for the entire project period. The same auditor may conduct the audit in all subsequent links, but each link may also use different auditors. The audit shall be reported in accordance with the templates provided in Appendix 2 - 3 or 4 - 5 of this document.

I. Objectives and scope of the audit

The objective is to audit the financial report for the period 01 January 2024 – 31 December 2024  as submitted to Plan International Sweden and to express an audit opinion according to ISA, applying ISA 800/805[2], on whether the financial report of SIDA CIVSAM FY20-24: Core Support to CRC Asia Strategy 2019-2024 (FAD Number: ARO100112)  is in accordance with the Plan International Asia and Pacific Regional Hub’s accounting records and Plan International Sweden's and Sida’s requirements for financial reporting as stipulated in the agreement including annexes, between Plan International Sweden and Plan International Asia and Pacific Regional Hub and its subsequent partner organisation Child Rights Coalition Asia (CRC Asia) Inc.

Plan International Sweden wants to emphasise the importance of the Auditor, as a part of the assignment, reviewing whether the subsequent partner organisations follow the requirements from Sida, see Appendix 6 "Plan International Sweden's Audit instructions for Sida funded projects".

II. Additional assignment; according to agreed upon procedures ISRS 4400, review the following areas in accordance with the Terms of Reference below 

Mandatory procedures that must be included:

1. Observe whether the financial report is structured in a way that allows for direct comparison with the latest approved budget[3].

2. Observe and inspect whether the financial report provides information regarding:

a) Financial outcome per budget line (both incomes and costs) for the reporting period and columns for cumulative information regarding earlier periods under current agreement.

b) When applicable, compare if the opening fund balance[4] for the reporting period matches with what was stated as closing fund balance in the previous reporting period.

c) A disclosure of exchange gains/losses. Inquire and confirm whether the disclosure includes the entire chain of currency exchange from Plan International Sweden’s disbursement to the handling of the project/programme within the organisation in local currency/ies, if applicable.

d) Explanatory notes (such as, for instance, accounting principles applied for the financial report).

e) Amount of funds that has been forwarded to implementing partners, when applicable.

3. a) Inquire and inspect with what frequency salary costs during the reporting period are debited to the project/programme.

Choose a sample of three individuals for three different months and:

b) Inquire and inspect whether there are supporting documentation[5] for debited salary costs.

c) Inquire and inspect whether actual time worked is documented and verified by a manager. Inquire and inspect within which frequency reconciliations between debited time and actual worked time is performed.

d) Inspect whether Plan International Asia and Pacific Regional Hub and its subsequent partner organisation Child Rights Coalition Asia (CRC Asia) Inc. comply with applicable tax legislation with regard to personal income taxes (PAYE)[6]  and social security fees.

4. Review and confirm that the Plan International Asia and Pacific Regional Hub and its subsequent partner organisation Child Rights Coalition Asia (CRC Asia) Inc. screens implementing partners and/or suppliers to ensure that such parties are not subject to the European Union’s financial sanctions list of persons, groups and organisations (EU Sanctions list).

Enquire whether there have been any reported findings from the screening process and if so, report on such findings.

5. a) Inspect and confirm that the unspent fund balance (according to the financial report) at the end of the financial year is in line with information provided in the accounting system and/or bank account.

b) Applicable the final year: Inspect and confirm the unspent fund balance (including exchange gains) in the financial report and confirm the amount that shall be repaid to Plan International Sweden.

Follow up of funds that are channelled to implementing partners

Mandatory assignments that must be included if Plan International Asia and Pacific Regional Hub and its subsequent partner organisation Child Rights Coalition Asia (CRC Asia) Inc. forward funds to implementing partners (IP’s):

Choose a sample of a minimum of 10 % of the total of disbursed funds as well as 10 % of the number of IP’s or a maximum of 10 IP’s.

2.1 Inspect and confirm whether Plan International Asia and Pacific Regional Hub and its subsequent partner organisation Child Rights Coalition Asia (CRC Asia) Inc. have signed agreements with the selected IP’s.

2.2 Inspect and confirm whether Plan International Asia and Pacific Regional Hub and its subsequent partner organisation Child Rights Coalition Asia (CRC Asia) Inc., in all agreements entered with IP’s, included the requirement to carry out annual audits. The requirement shall specify that these audits shall be carried out with application of ISA (reporting according to ISA 800/805), and a separate assignment according to ISRS 4400 should be included for project/programme support. If agreements regarding core support are entered into with IP’s, the audit shall be conducted in accordance with ISA 700 or National standards on auditing.

2.3 Inquire and inspect whether Plan International Asia and Pacific Regional Hub and its subsequent partner organisation Child Rights Coalition Asia (CRC Asia) Inc. have received financial reports and reportings from auditors from all IP’s included in the selected sample:

a) Inquire and inspect whether Plan International Asia and Pacific Regional Hub and its subsequent partner organisation Child Rights Coalition Asia (CRC Asia) Inc. has verified if reports from IP’s are in line with the requirements in the Agreement.

b) Inquire and inspect whether Plan International Asia and Pacific Regional Hub and its subsequent partner organisation Child Rights Coalition Asia (CRC Asia) Inc. has documented its assessment of the submitted financial reports and reporting from auditors including management responses and action plans from selected IP’s.

c) Inquire and inspect whether Plan International Asia and Pacific Regional Hub and its subsequent partner organisation Child Rights Coalition Asia (CRC Asia) Inc.  has documented its follow-up actions based on the information provided in the financial reports and the reporting from the auditor of the selected IP’s.

d) Inquire and inspect whether Plan International Asia and Pacific Regional Hub and its subsequent partner organisation Child Rights Coalition Asia (CRC Asia) Inc. has reported substantial observations[7] from selected IP’s audit reports in its communication with Plan International Sweden. List observations[8] from IP’s audit reports which have been part of this sample.

III. The Reporting

The reporting shall be signed by the responsible auditor (not just the audit firm[9]) and shall include the title of the responsible auditor.

Reporting from the ISA assignment

The reporting from the auditor shall include an Independent Auditor’s Report in accordance with the format in standard ISA 800/805 and the auditor’s opinion shall be clearly stated. The financial report that has been the subject of the audit shall be attached to the Independent Auditor’s Report.

The reporting from the auditor shall also include a Management letter that discloses all audit findings, as well as weaknesses identified during the audit process. The auditor shall regardless of materiality, quantify the amount for costs lacking sufficient supporting documentation. The auditor shall make recommendations to address the identified findings and weaknesses. The recommendations shall be presented in priority order and with a risk classification.  

Measures taken by the Plan International Asia and Pacific Regional Hub and its subsequent partner organisation Child Rights Coalition Asia (CRC Asia) Inc. to address weaknesses identified in previous audits shall also be presented in the Management Letter. If the previous audit did not have any findings or weaknesses to be followed-up on, a clarification of this must be disclosed in the audit reporting.

If the auditor assesses that no findings or weaknesses have been identified during the audit that would result in a Management letter, an explanation of this assessment must be disclosed in the audit reporting.

Reporting from the ISRS 4400 assignment

The additional assignment according to agreed-upon procedures ISRS 4400 under paragraph II, shall be reported separately in an “Agreed-upon procedures report”. Performed procedures should be described and the findings should be reported in accordance with the requirements in the International Standard on Related Services 4400.  

When applicable, the sample size shall be stated in the report.

Plan International Asia and Pacific Regional Hub and its subsequent partner organisation Child Rights Coalition Asia (CRC Asia) Inc. are responsible for providing a Management Response for all audits. The management response shall respond to all auditors' recommendations which shall include a time-bound action plan and the responsible person within the organisation. The Management Response can be included directly in the audit report or follow as an annex and shall be signed by management.

There are different levels of audit requirements at the subsequent partner organisation, if any, depending on the value of the partnership agreement. Please see Appendix 6 "Plan International Sweden's Audit instructions for Sida funded projects", for specified instructions.

The audits at Plan International Country/Regional office and subsequent partner organisation may be conducted by separate auditors or by the same auditor. The reporting when using the same auditor can either be presented in separate audit reports (please see Appendix 4 - 5) or a consolidated audit report (please see Appendix 2 - 3). The following conditions needs to be respected if the consolidated version is used: 

1 – The audit report shall state which subsequent partner organisations are included in the report and what activities they are responsible for.

2 – It must be clear that a full audit, ISAs and ISRS 4400, have been carried out in full for all organisations and that the reports correspond with the main agreement between Plan and Sida.

3 – The report needs to contain signed financial reporting for all organisations.

4 – The report only contains few notes and does not reduce the overview.

5 – The Audit opinion needs to have an unqualified opinion for all organisations.

The reports are to be written in English in one copy and submitted digitally to Plan International Sweden no later than 14^th April 2025. All reports may be submitted in any of the following languages: English, French or Spanish. Submission of draft reports to Plan International Sweden for review is due by 28^th March 2025.

HOW TO APPLY?

Interested auditor should send a proposal to Thailand.procurement@plan-international.org with the subject “Application for Audit SIDA funded Project/Programme Support including ISRS 4400”. within February 3, 2025.