TERMS OF REFERENCE FOR SPECIAL AUDIT CONTRACTED BY THE RAINFOREST FOUNDATION NORWAY IN COLOMBIA

1. Background

Rainforest Foundation Norway (RFN) is a non-governmental organization from Norway with registration number 985 828 806, founded in 1989 that works for the protection of the rainforest with a focus on the rights of indigenous peoples. RFN manages international cooperation funds for projects with counterparts in seven countries on three continents. Most of these funds come from the Norwegian Agency for Development Cooperation (Norad).

2. Objectives of the special audit

The objective of the audit is to review the partner's financial reports and examine the audit findings, referring to adhered multiannual agreement 2023-2027 Anti-Corruption Policy, financial Routines and procurement regulations and other agreements between RFN and the "Partner". Particular attention will be paid to staff costs, programme advances, travel-related costs and other project costs.

2.1 General objectives:

a) Verify compliance with the country's legal, tax, labor and official records, and clearly describe deviations, if any.

b) Verify that all funds received by the "Partner" for the project have been correctly recorded in the institution's accounting books and records.

c) Verify that 100% of the costs incurred and the assets acquired by the "Partner" are duly recorded in the accounting books and records of the institution and are supported by adequate, reasonable documentation in accordance with the approved budget and the terms of the contract with the cooperating organization.

2.2 Specific objectives:

a) Staff and/or consultant costs

• Examine all personnel and consultant cost transactions.
• Examine all supporting documents for procurement processes. Likewise, compliance with the internal regulations of the organization and the contract signed by the organization and RFN.
• Verify that the payments made to staff and/or consultants are supported by documents and reports that support the payment executed by the organization.

b) Advance payments and travel expenses

• Examine all travel advances and travel-related expenses to verify whether:
• The advances were supported by all the necessary supporting documents and the process was carried out in accordance with the internal rules of the organization.
• Advances have been used for their intended purposes.
• To review all staff per diems to verify whether their per diem amounts are in accordance with the internal regulations of the Organization, as well as to ensure that there have been no discrepancies among the staff.

c) Office rental

• Examine all office rental cost transactions.
• Examine all supporting documents to support financial transactions and ensure that the procurement process complies with the organization's internal regulations and the contract signed by the organization and RFN.

3. Scope of work

The special audit will cover the period from 1 January 2022 to 31 December 2023. The verification of all transactions, accounts and all documentation will be carried out at the Organization's office in Colombia. The scope of work will refer to the objective of this audit and identify the aspects that require special attention.

4. Time Frame

This special audit assignment will be executed approximately during the period from September 09 to October 18, 2024 (maximum 6 weeks). Suggested timelines and deliverables should be included in the contract signed with the selected audit firm.

5. Reports

The auditor will present the findings and recommendations for each scope of work and specify the requirements of the agreement related to documentation. The auditor's findings will be used as a basis for Norad to be able to reimburse its claims.

The auditors will issue a draft report to give the Partner's management an opportunity to support, comment and/or contradict the findings. The audit firm should arrange a discussion session with the "Partner". The final report will be issued seven days after the socialization meeting of the draft report has been held.

The proposed sections for the special report are in Annex 1. In the summary of the report, auditors should include a table with specific amounts of mismanaged or misappropriated funds and responsible persons.

The auditors will hold meetings at the beginning and at the end of the audit evaluation with the "Partner", board of directors and administrative staff. The final meeting will be held after the presentation of the draft audit report to socialize it with the "Partner" and expedite the analysis and response of the organization. After presenting the final version of the audit report to the "Partner", it must be sent to RFN for its opinion and then the audit can sign and submit its final report, then a final meeting will be held with RFN, which can be held through online platforms such as Teams or Zoom.

6. Requirements

6.1 Company Eligibility

• Audit firms that meet the following requirements may submit proposals:
• Hold a commercial audit license.
• Have a certificate of competence for the year 2024, by the entity that Colombian law determines.

The auditor must be completely impartial and independent in all aspects of the management or financial interests in the Partner, and must not be employed, serve as a director, or have any close financial or business relationship with any senior participant in the management of the Partner during the period covered by the special audit or during the execution of the audit. The auditor must disclose any relationship that may compromise his or her independence.

The auditor who has already performed the audit of the accounts of the "Partner" and/or of projects during the period to be covered by the special audit will not be eligible to be appointed auditor for this engagement.

6.2 Qualifications, experience and team composition

The auditor shall assign a team of staff with appropriate professional qualifications and appropriate experience with International Standards on Auditing (ISAs) and experience in special audits of entities comparable in size and complexity to the project in question. Team members should include qualified accountants (ACCA, CA, and CPA) with experience relevant to the audit manager. In addition, the team should preferably include certified internal audit (IIAA) and forensic audit (ACFE) professionals. The audit firm shall provide RFN with the resumes of the partner or other person in the audit firm responsible for the audit and signing of the report, together with the resumes of the audit directors, senior auditors and deputy auditors proposed as part of the audit team. Curricula vitae shall include appropriate details on the type of audits conducted by staff, indicating their ability to conduct the special audit, as well as details on relevant specific experience.

7. Proposals

Interested and eligible companies must submit technical and financial proposals by August 30, 2024. The proposal must include the following information:

• The eligibility of the company,
• Knowledge of the requirements for a special audit,
• Proposed approach, methodology, timetable and results (including proposed improvements to the format of the special report, if any),
• Proposed audit team and CV's
• Estimated time to submit a signed final report

The financial proposal must contain all the information related to the prices for the performance of the special audit described in these terms of reference. The economic proposal to be offered must contain all direct and indirect costs. Audit fees and travel expenses should be included. Conditional costs are not acceptable. RFN will not be responsible for the expenses incurred in the preparation and submission of the technical and economic proposals to participate in the tender.

Proposals should be delivered via link: https://karriere.regnskogfondet.no/jobs/4823029-invitation-to-tender-for-a-special-audit-colombia

Note: Some key project documents will need to be sent to the selected audit firm.

Long-Term Project Document 2023-2027

Annual plans and budget for the project year 2022 and 2023

Activity and financial reports presented for the project year 2022 and 2023.

7.1 Evaluation of proposals

Below is a brief description of the steps that will be used in the evaluation of the proposals:

Technical criteria (80%)

• Knowledge of the requirements for a special audit (10%);
• Approach, methodology, timetable and proposed results (30%);
• Qualifications, experience and composition of the proposed audit team (20%).
• Estimated time and availability to complete the special report (20%)

Financial proposal (20%)

Note: A company that is unwilling to assign a qualified accountant (ACCA, CA, AICPA) as an audit manager will be automatically rejected.

7.2 RFN's right to reject proposals

RFN reserves the right to reject any of the proposals that it does not consider relevant.

Annex: 1 Proposed Format for the Special Report (Written in English and Spanish)

1. Executive Summary

The scope and objective of the investigative audit, a brief description of the methodology used, a summary of the results with specific details on the amount of funds that have been mismanaged or misused, conclusions and recommendations, and the way forward (maximum two pages).

2. Introduction

A brief description of the RFN-funded project and the reasons for conducting the research audit.

3. Objectives of the investigation audit.

4. Scope of the Investigative Audit (Any limitations on conducting the investigative audit will be discussed in this paragraph.)

5. Methodology (no longer than one page)

6. Findings determined by the special audit and specific recommendations (investigative audit). All questions and elements of the NAT must be answered. If relevant, other information can also be included.

7. Conclusions and recommendations (Please note that only general recommendations are included in this section. Specific recommendations will be presented after the findings.)

8. Annexes.