External Auditors At Child’s i Foundation

Terms of Reference (TOR) for the External Auditors

Background

Child’s i works with governments and national partners to highlight the harm and cost of orphanages in Uganda and globally. We are helping to re imagine the whole child protection and care system, re purpose orphanages as community and educational facilities, reintegrate children home and rebuild services at the heart of communities. These initiatives seek to strengthen families and ensure children are protected, healthy and educated. Our programs address the root causes of poverty, strengthen communities to prevent family separation and ultimately reduce the institutionalization of children in Uganda.

Objective of the Audit:

Over a period of 3 years starting end of December 2021, provide an independent audit opinion of the accounts and annual financial reports of Child’s i, in accordance with the audit appointment, the International Standards of Auditing (ISA) and with the Uganda legal requirements. These should include assessing whether:

a) Proper books of accounts have been kept by the management of Child’s i and that expenditures are adequately supported;

b) Child’s i financial statements are in agreement with the accounts, organizational financial policies/procedures and relevant funding requirements;

c) The internal controls and risk with regards to the organization’s financial management exist, are appropriate, adequate and/or indicate any significant weakness.

Scope of the audit

1. The audit will be carried out in accordance with the International Auditing Standards and will include tests and verification procedures as the auditors deem necessary.
2. Verify that all the funds have been used in accordance with the established rules and regulations of Child’s i and only for the purposes for which the funds were provided.
3. Ensure that all goods, works and services financed have been procured in accordance with Child’s i established rules and procedures.
4. Ensure that appropriate supporting documents, records and books of accounts relating to all activities have been kept. Clear linkages should exist between the books of accounts and the financial statements presented.
5. Ensure that the financial statements have been prepared by Child’s i management in accordance with applicable accounting standards as well as give a true and fair view of the financial position of Child’s i, of its receipts and expenditures for the period ended under review.
6. Ensure that comprehensive assessment of the adequacy and effectiveness of the accounting and overall internal control system to monitor expenditures and other financial transactions.
7. Express an opinion as to the reasonableness of the financial statements in all material respects.
8. Include in the audit reports opinions on compliance with procedures designed to provide reasonable assurance of detecting misstatements due to errors or fraud that are material in the financial statements.
9. Assess whether statutory laws and regulations have been complied with, including relevant business or tax registrations, certificates to operate, with particular attention to Payroll related compliances (withholding taxes, insurances, social security and other labour law related compliances).
10. Assets procured from donor funds exist and there is verifiable ownership by the organisation and have been maintained in line with Child’s i policies
11. Conduct entry and exit meetings with the Child’s i Management.
12. In addition to the audit report, the auditors will prepare a Management Letter highlighting the following:

a) Comments and observations on the accounting records, procedures, systems and controls that were examined during the course of the audit.

b) Identify specific deficiencies and areas of weakness in systems and controls and make recommendations for improvement.

c) Report on the implementation status of recommendations pertaining to previous period audit reports.

d) Communicate matters that have come to their attention during the audit which might have a significant impact on the sustainability of the organisation.

e) Bring to Child’s i management any other matters that the auditors consider pertinent.

Deliverables

1. The Auditors, on completion of the audit work, will submit 5 (five) original copies of the Audit Report appended to the Financial Statements along with the reports to the attention of the Country Director.
2. Management letter in accordance with the scope of work described here before.

Auditor Independence

The auditor(s) must be completely impartial and independent from all aspects of management or financial interests in Child’s i. The auditor(s) should not, during the period covered by the audit, nor during the undertaking of the audit, be employed by, serve as director for, or have any financial or close business relationships with any senior participant in the management of Child’s i. The auditor should disclose any relationship that might possibly compromise his/her independence.

Audit experience and qualification:

a) The audit firm should be registered and have a license from an authorised national body.

b) d) The key audit team will comprise of, at least; an audit manager with at least 8 years’ experience in auditing and with a sound knowledge of donor-financed projects.

c) e) In addition he/she should be member of a recognized accountancy professional body