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I. Introduction
Ponlok Khmer also known as People and Knowledge of Highlanders, (“the Organisation”) is a local Non-Governmental Organization (“NGO”) registered with the Ministry of Interior on 24 June 2008 and operates to support local and indigenous communities in Cambodia to improve the good governance of natural resource management by working with community representatives to empower the vulnerable and indigenous people to ensure their meaningful participation, provide consultation for development and sustain natural resources through culturally appropriate practices and to strengthen quality education.
Ponlok Khmer has obtained a grant of US$ 671,545.00 (US$ Six hundred Seventy one thousand five hundred Forty-five only ) for three year from 2017 to 2019 to finance a project/programme called “Strengthening grassroots community networks in land and natural resources through a people-driven approach”.
Project Overall Goal: Increased access to, controlled over, and equitable and sustainable uses of land and natural resources exercised by the poor and marginalized men and women in the target communities for food sovereignty, sustaining livelihood and climate justice.
Project Objectives:
- By the end of 2019, forest, biodiversity, land and indigenous identity of target communities are promoted, recognized, well-conserved and sustainably managed by members of indigenous and forest dependent communities.
- By the end of 2019, income generation and food security of indigenous and forest dependent communities are improved through sustainable farming, ecosystem services, sustainable harvest of non-timber forest products and improved climate justice.
- By end of 2019, land grabbed communities, the poor, men, women and youths in target villages are actively participating in building their strong grassroots movement to defend and reclaim their rights to land, housing and advocate on rule of law and sustainable land and natural resource management.
Ponlok Khmer wishes to engage the services of an audit firm for the purpose of auditing the project/programme above for 3 years, as stipulated in the agreement between Ponlok Khmer and donors. The audit shall be carried out in accordance with international audit standards issued by the International Federation of Accountants (IFAC). The audit shall be carried out by an external, independent and qualified auditor (Certified Public Accountant/Authorized Public Accountant).
II. Objectives and scope of the audit
The auditor shall use ISA 315 as basis for the risk assessment.
Audit the Financial report for period “January-December 2017” as submitted to the donor and express an audit opinion according to ISA 800/805 on whether the financial report of Ponlok Khmer project/programme submitted to the donor, is in accordance with Ponlok Khmer’s accounting records and agreed budget.
- Examine the property of the project accounting operations and their conformity with the project contract in all its parts as well as with relevant national regulations.
- Examine the tools and procedures of internal control.
- Examine the bank account opened especially and exclusively for the project, and any further bank accounts of the project which may be necessary.
- Examine whether the persons enjoying power of disposal over the project bank account is/ are the same or among those officially authorized to represent the legal holder of the project.
- Examine whether there have been any changes regarding staff enjoying authorization to represent the legal holder of the project.
- Examine all incoming grant disbursement transactions, Including especially accuracy and completeness of records and evidence of exchange transactions from foreign into national currency.
- Examine to the various project bookkeeping accounts with their supporting documents of receipts and payments in the national currency, to verify whether a clear distinction has been maintained between amounts actually paid out at the point of time when the accounting period ends and payments not yet effected but to be recognized as expenditure for the same period on the basis of the obligations incurred (payments according to receipt and payments according to versus expenditure based on accruals concept).
- Examine whether the local and/or third party contributions to be provided as part of the project have actually been received, duty show in the books, and properly used for the financing for project expenditure to verify information on income which was due but was actually received after the end of the period under review from local and third party contributions, if any, as to local contributions, only those made in monetary terms should be shown. Where non-monetary contributions (e.g. voluntary labour, contributions in kind) have been provided, these should be show separately.
- Examine any credit interest was gained from disbursement of the Ponlok Khmer donors. The interest thus gained was properly used for the financing of the project expenditure.
- Examine the inventory of all movables of a value exceeding UDS300.00 and purchased with money from project funds.
- If immovable were purchased or building erected ass part of the project, to examine evidence of ownership or of right of disposal and find out whether any encumbrance or obligation to third parties were created. Also to examine whether they are being used for the project purpose for which they were destined.
- Examine, assess and report on compliance with the terms and conditions of the agreement and applicable laws and regulations.
- Examine staff payroll and lists of professional fees paid with regard to their being in accordance with the project contract and the employment contracts and fee contract concluded as well as with the rules regarding payment of taxes and social security contributions.
- In case of education and training courses, to examine the relevant invoices, bills, receipts (covering professional fees, food, accommodation, transport ect.) and also the lists of participants.
- Examine whether funds approved for the project have been used within the stipulated period (Four months incase)
- Statement regarding which of the above-mentioned items were examined individually and on requirements as stipulated in the project contract.
- Examine whether the financial report includes a comparison, for every budget item, between the actual costs/expenditures of activities and the budgeted costs/expenditures as approved by Ponlok Khmer’s donors for the period.
- Based on materiality and risk the auditor shall examine whether there is supporting documentation related to incurred costs
- The auditor shall examine on a test basis that there is supporting documentation related to reported expenditure. The size of the test shall be based on the auditor’s risk analysis and that should be stated in the report. The auditor shall report the identified amount in case there is any missing supporting documentation.
The auditor shall submit an audit memorandum/management letter, which shall contain the audit findings made during the audit process. The audit memorandum/management letter shall state which measures that have been taken as a result of previous audits and whether measures taken have been adequate to deal with reported shortcomings.
III. Audit Certificate/report/memorandum/management letter
- The report shall contain details regarding used audit method and the scope of the audit.
- The report shall contain an assurance that the audit was performed in accordance with international standards and by a qualified auditor.
- The report shall contain the responsible auditor’s signature (not just the audit firm) and title.
- The report shall contain an assurance that the audit was performed in accordance with international standards and by a qualified auditor.
- The report shall be written in English and be presented to Ponlok Khmer in 7 copies.
IV. Audit timeframe. It is 3 years engagement and the specific date of auditing are as follow:
- Call for audit proposal 26 July 17
- Selection and engagement 04 August 16
- Misereor fund and its contribution for two times a year
- Close accounts and preparation 07 August 17; 07 July 18; 07 July 19
- Audit start field work 14 August 17; 14 July 18; 07 July 19
- Get draft report and response 20 August 17; 14 July 18; 14 July 19
- Get final report 30 August 17; 30 July 18; 30 July 19
- Global Audit and Misereor fund
- Close accounts and preparation 20 December 17, 18, 19
- Audit start field work 08 January 18, 19, 20
- Get draft report and response 18 January 18, 19, 20
- Get final report 26 January 18, 19, 20
Interest audit firm, please submit your proposal to contact:
- Bo Rapen: Finance and Amdin manager: Tel: 077252956, email: rapen@ponlokkhmer.org
- Ang Cheatlom: Executive Director: Tel: 012 51 7943, email: cheatloma@ponlokkhmer.org