Contract TERMS OF REFERENCES (ToRs) FOR EXTERNAL AUDITORS ANNUAL AUDIT
Job Description
Terms of References (ToRs) for External Auditors
Annual audit
Regarding the performance of audit of accounts that includes activities funded by the Education Out Loud project.
- The auditor shall be selected by the organization’s administrator through a rigorous
procurement process, ensuring the acquisition of competitive and independent quotations. - The auditor must hold the designation of a chartered accountant or possess equivalent qualifications and credentials recognized in the respective country. Additionally, the auditor must be capable of performing the audit in compliance with both national laws and the International Standards on Auditing (ISA).
OBJECTIVE OF THE AUDIT
a. The objective of the audit of the GRANTEE financial statements is to enable the auditors to express
an independent professional opinion on the financial position of GRANTEE and to verify that the
funds allocated for activities funded by the Education Out Loud (EOL) initiative have been utilized in
accordance with their intended purposes.
b. The GRANTEE’s financial statements are prepared based on its maintained books of accounts, which
comply with legal requirements. The GRANTEE has ensured the maintenance of proper books of
accounts, adequate internal controls, and comprehensive supporting documentation for all transactions.
SCOPE OF AUDIT
The scope of audit is the project audit of the EOL grant agreement for the 2025 calendar year. The
organisation management must provide the auditor access to the grant agreement and all related documents (annexes, reports, and any other relevant documents that the auditor may deem important to the audit).
3. The audit of financial transactions will involve a thorough examination of the quality of voucher
materials and their accurate recording in the financial records, with a focus on assessing their
relevance, significance, and associated risks.
4. The auditor shall verify:
- 4.1. that the accounts and reconciliations are correct and accurate and do not contain significant
errors or omissions - 4.2. that the financial provisions (accounting policies) contained in agreements with local regulations and Oxfam have been complied with
- 4.3. that the transactions comprised by the accounts are in conformity with the conditions and general objectives for the grants as agreed with Oxfam DK and the budget.
5. The following are examples of the performance areas that the organisation must practise satisfactorily,
and that the auditor will inspect as well as do checks sufficiently.
- 5.1. The procedures and control mechanisms related to approval of vouchers are satisfactory.
The approval of a voucher must ensure that the voucher is based on thrift.
- 5.2. Payroll costs for individual staff are reasonable when compared with relevant comparable
organisations, salary statistics, established policies and procedures for compliance and other
accounting routines. - 5.3. If the organisation has multiple donors, its shared costs should be reasonably allocated to
OC1 when compared with other grants. - 5.4. Competitive quotations are being obtained in relation to procurement of goods and services.
- 5.5. Available assets are being kept in an appropriate manner and according to rules and
regulations. - 5.6. Project materials and equipment such computers and phones are properly recorded,
maintained in Asset register and it is included in annual audit report.
6. Additionally, the auditor will assess and comment on any exchange rate gain or loss generated at the
end of the calendar year.
7. Due diligence:
The auditors are to assess the grantee’s progress on closing due diligence findings since the last
assessment, either by the previous audit or as conducted by the Regional Management Unit.
8. Presentation of financial figures in local currency and USD
- The financial statement is to be presented in the grantee’s local currency with corresponding figures in USD. As for the foreign exchange rate, EOL has used fund transfer rate for reporting, fundamentally the FIFO method.
9. Languages
The audit report is to be submitted in English and in other official or business language, such as French,
Spanish or Portuguese as applicable.
10. Legal barriers to making financial documentation available online
- EOL would like the auditors view of whether there is anything preventing EOL demanding from
grantees to make financial documentation available online, such as in a cloud storage solution. The
grantee can continue to keep a hard copy archive, which is very likely also demanded by national law.
11. The organisation’s management is required to provide the auditor with any information that may be
considered material for assessment of the accounts and of the organisation’s administration of the
grant. Similarly, the organisation management should provide the auditor access to initiating any other
examination that s/he considers necessary and ensure that the auditor receives the information and
assistance needed for performing the audit.
Audit Duration
The audit work shall be completed within 3 weeks of commencement date, and deliverables presented within 5 business days thereafter.
Audit Deliverables
- The Auditors on completion of the audit work will submit 2 (two) original copies of the Audit Report appended to the Financial Statements along with the reports.
- Management letter in accordance with the scope of work described here in the TOR.
The auditor’s statement must be issued in accordance with the ISA 700 or 800 (Revised).
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