TERMS OF REFERENCE FOR THE EXTERNAL AUDIT

1. Background

SOS Children’s Village is the largest non-governmental, non-political, nondenominational charitable child welfare organization in the world. Its mission is to build families for children in need, help them shape their own futures, and share in the development of their communities. The first SOS Children's Village was founded by Hermann Gmeiner in 1949 in lmst, Austria. He was committed to helping children in need, children who had lost their homes, their security, and their families as a result of the Second World War. With the support of many donors and co-workers, the organization has grown to help children all over the world.

SOS Children’s Villages Somaliland is a member of the Federation of SOS Children’s Villages and started its activities in Somaliland in 1999. SOS CV Somaliland started its work in Sahil Region with in renovation of sheikh secondary school in 2003. The organization addresses the needs of children who have lost parental care and those at risk of losing the care of their families by ensuring equal access to essential services such as care, education and health. Currently, SOS Children’s Villages Somaliland runs a number projects in Somaliland including Children’s Villages, Family and Community Development Programmes, youth empowerment and humanitarian interventions.

1. Purpose of the Audit

The overall purpose of this assignment is to give the reasonable assurance of all income received and cost incurred in current fiscal year are in accordance with the relevant policy of SOS Children’s Villages Somaliland (SOS CV SX) and produce a report as per related Accounting standard.

1. Objectives of the Audit

2. The objective of the audit of SOS Children’s Villages Somaliland (SOS CV SX) financial statements is to enable the auditors to express an independent professional opinion on the financial position of SOS CV SX and to ensure that the funds utilized to SOS CV SX’s activities have been used for their intended purposes.

3. The books of accounts of SOS CV SX provide the basis for preparation of the SOS CV SX’s Financial Statements. Proper books of accounts as required by law have been maintained by SOS CV SX and also maintain adequate internal controls and supporting documentation for the transactions.

4. Audit Methodology:

In order to present the true and fair view on the financial statement/reports the auditor shall conduct accuracy checks, observations, inspection of records and document, and inquiry and analysis, recommendation, comparison, , including:

• Visit head office and review vouchers, invoices and all supporting documents for all the amount expensed and income receipt

• Follow up with the previous audit reports and comments

• Review of payroll and tax compliance

1. Evaluation criteria

2. Must criteria for application (if not met, such an application will not be evaluated):

Evaluation criteria

Maximum score

Actual score

Mandatory Criteria

Legally registered company

Copy of PIN Certificate

Copy of valid Tax Compliance certificate

Y/N

Understanding of the Assignment

Clear conceptual understanding of the Scope of

Works

20

Proposed approach and methodologies for the

Scope of Works

20

Experience in Market

Intelligence

Demonstrable technical and practical knowledge in the area of NGO financial audit, expertise and standard enforcement. (experience with project audits and institutional donors (DRA, DANIDA, EU, ECHO etc),

(i.e. the key tasks in the assignment)

20

A minimum of 6 years’ work experience in external Audit work

15

Track record (timeliness of delivery)

10

Capacity to Deliver

Quality of proposed staff to be involved in the assignment

15

Total

100

Bidders who score below 80% will not be considered for further evaluation

1. Procedure:

Following the completion of the recruitment process the selected auditor/ audit team will start the audit process passing through the following major phases:

1. Inception/planning phase: The auditor should propose the plan in a letter of intent (LOI )

   1. Auditing:

• The auditor must audit the financial transactions of SOS CV SX for the financial period and primary discussion on findings with Finance Manager of SOS CV SX.

• Preparation of draft report and issue the draft report for management comment on agreed timeline.

• Receipt of Final Management Comments from SOS CV SX.

• Finalize the Management letters: SOS CV SX and auditors.

• Finalization of report and issue final audit report with certified statements and a management letter for the financial year.

• Sign the Final Report

C. Final Reporting: The final audit report should be submitted to SOS CV SX as per the agreement.

1. Audit Scope and assignment:

The scope of the Annual Audit is to check the income provided and costs incurred through the original vouchers and other related project documents (contracts, agreements…), based on the annual plan/program and financing plan. This will review Income and Expenditures of SOS CV SX for the period of one financial year. The auditor should verify the report by the means of;

• Checking and verifying whether the appropriate supporting documents, records and books of accounts relating to all project activities have been kept and whether these documents clearly relate to the activities they were assigned for

• Checking and verification of the Fixed Assets lists in SOS Children’s Villages Somaliland.

• Checking and verifying whether the compliance with local applicable laws is made or not verify, in sample, the quantitative and qualitative program reports, and review of compliance with laws, regulations and other external requirements, management policies and directives and other internal requirements.

• The audits should be carried out in accordance with either International Public Sector Accounting Standards / International Financial Reporting Standards, or International Standards of Auditing (ISA) auditing standards.

1. The Audit Report and Management Letter

2. Audit Report

The audit reports shall:

• 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.

• Signed by the auditor responsible stating the title.

• Written in English

• Issued in soft copy for circulation to Partners and 3 hard copies will be produced and delivered to SOS CV SX. Components of the reports are:-

• Consolidated Audit report SOC CV SX Somaliland

The audit report should clearly indicate the auditor’s opinion. This would include at least the following:

The title, addressees, and an opening or introductory paragraph containing

1. Identification of the financial information audited including the period covered; and

2. Statement of the responsibility of the entity’s management and the responsibility of the auditor.

A scope and methodology paragraph describing the nature of the audit referencing

1. The accounting standards that have been applied and indicate the effect of any deviations from those standards;

2. The audit standards that were applied ISAs, or International standards that comply with one of these in all material respects); and

3. The work the auditor performed.

An opinion paragraph disclosing

1. whether the financial statements and supporting schedules fairly present the cash receipts and expenditure in all material respects and that the funds were used for the purposes defined by the work program;

2. whether the financial transactions reflected in the statements are in accordance with financial regulations and procedures, budgetary provisions and other applicable directives; and

3. Summary assessment of the efficiency of the management and internal control system.

The auditor may expand the report to include other information and explanations not intended as a reservation. Audit reports will be provided English.

1. Management Letter

The auditor should submit a letter to the management at the completion of the audit. The topics/issues to be covered in the letter should include:

• Give comments and observations on the accounting records, procedures, systems and controls that were examined during the course of the audit;

• An assessment of the efficiency of the administration, management and internal control system of SOS CV SX;

• A description of any specific internal control weaknesses noted in the financial management. Recommendations to resolve/eliminate the internal control weaknesses noted should be included;

• Management comments/response to audit findings and recommendations;

• Report on the degree of compliance with each of the financial, legal and contractual compliances and external matters affecting such compliance;

• Communicate matters that have come to their attention during the audit which might have a significant impact on the implementation and sustainability of the Program;

• Any other issues the auditor finds relevant from their professional judgment;

1. Debriefing Meeting:

The Auditor/Audit Team should conduct debriefing meeting to relevant program and finance staff and Management Committee Members regarding the audit in overall, response on the management letter, and auditor’s final view on the response of management.

1. Tentative Timetable:

The audit assignment will tentative expected to take place from 10th August 2025 to 15th September 2025 (the actual working days are 25 including management letter, debriefing meeting and submission of the final report.

How to apply

1. How to submit the Bid?

Interested and eligible audit firm must submit the technical and financial proposal before 5:00PM 30th July 2025 to: [email protected]

SOS Children’s Villages Somaliland

National Office, Hargeisa

Hero Awr, Ibrahim Kodbur

Email: [email protected]

Reserves the Right:

• SOS Children’s villages Somaliland reserves all rights to accept or reject any or all bids.