Terms of reference for a financial, internal control system, and procurement audit
Working together for change: A gender transformative approach to women’s entrepreneurship
Reference Number: HIHEA/TZ-005
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Organization Details:
- Hand in Hand Eastern Africa (TZ)
- Address: P.O. Box 7152, Arusha, Tanzania
- Telephone: 027 254 7559
- Mobile: +255 743 720 805
- Hand in Hand International
- Innovations for Poverty Action (IPA)
Agreement Number(s): AFD CTZ1113 01 L
Entity(ies) Subject to the Audit:
- Hand in Hand Eastern Africa Tanzania
- Hand in Hand International
- Innovations for Poverty Action
Country: Tanzania
Contracting Authority: Hand in Hand Eastern Africa Tanzania
Provisional Audit Contract Conclusion Date: 30th September 2026
Period Covered:
- March 20th, 2024, to March 31st, 2025
- April 1st, 2025, to March 31st, 2026
Application Deadline: 11th May 2025
Proposal Submission:
- Qualified consultants are invited to submit proposals outlining their competencies, understanding of the requirements of the assignment, and how they would meet the expectations.
- Submission Deadline: 10th May 2025
- Submission Email: [email protected]
- Note: Only shortlisted applicants will be contacted.
- For more information, visit: /> Table of Contents
- Audit Context, Objectives, and Scope
1.1 Context
1.1.1 Presentation of the Entity Subject to the Audit
1.1.2 Presentation of FID
1.1.3 Presentation of the Project
1.1.4 Context of the Audit
1.2 Audit Objectives
1.3 Scope (or Extent) of the Audit
1.3.1 Contractual Conditions
1.3.2 Period(s) Covered
1.3.3 Financial and Volume Data
1.3.4 Restrictions to the Scope of Work
- Audit Methodology and Reference Framework
2.1 Conduct of the Audit
2.1.1 Audit Stages
2.1.2 Audit Timetable
2.1.3 Engagement Logistics
2.1.4 Volume of Services
2.1.5 Report Structure and Content
2.2 Audit Methodology
2.2.1 Sample Determination
2.2.2 Eligibility Conditions
2.2.3 Determination of the Opinion
2.2.4 Documentation of Identified Misstatements and Weaknesses
2.3 Audit Procedures
2.3.1 Financial Statements Review and Verification of the Use of Allocated Funds
2.3.2 Audit of the Internal Control System
2.3.3 Procurement Audit
2.3.4 Follow-up to Previous Audit Recommendations
- Professional Obligations
3.1 Standards and Ethics
3.1.1 Professional Standards to be Used
3.1.2 Ethics and Independence
3.2 Requirements for the Auditor
3.2.1 Auditor’s Professional Affiliation
3.2.2 Audit Team Qualifications and Experience
3.2.3 Team Profiles
3.2.4 Curriculum Vitae (CVs)
3.2.5 Composition of the Audit Team
- Appendices
4.1 Nomenclature of Findings and Misstatements
4.2 List of Expenditures and Findings (Model)
4.3 List of Contracts Awarded (Procurement Plan)
4.4 Letter of Representation (Model)
Audit Context, Objectives, and Scope Context Presentation of the Entity Subject to the Audit- Hand in Hand International: A British, UK-registered Non-Governmental Organisation based in London, part of the Hand in Hand network. Established in 2006 by Percy Barnevik, it serves as the network’s coordination and fundraising hub. Its vision is a world where every woman has the power to raise herself and her family out of poverty. Its mission is to empower women and men to succeed as entrepreneurs. Support areas include monitoring, evaluation, fundraising, communications, and financial planning.
- Hand in Hand Eastern Africa-Tanzania (HIHEA TZ): A registered NGO in Tanzania since 2018, part of the Hand in Hand Global Network. It aims to empower society, especially women, through sustainable enterprises and jobs. Operates in Arusha, Kilimanjaro, Manyara, Singida, and Dodoma.
- Innovations for Poverty Action (IPA): A global nonprofit focused on reducing poverty through evidence-based research. Designs and tests innovative solutions, supports data use, and scales proven approaches.
Created in 2021, chaired by Esther Duflo (Nobel Prize in Economics), FID is an innovative development financing mechanism. It fosters synergies between innovation and research to evaluate project impact using rigorous scientific methods. Hosted by the French Development Agency, FID supports scaling proven innovations to fight poverty and inequality.
Presentation of the ProjectHand in Hand International, with Hand in Hand Tanzania and IPA, tests a livelihoods model for women’s economic empowerment in Tanzania’s Dodoma and Singida regions (96 villages, 48 as control). The model includes four steps: self-help groups, business training, credit access, and market linkages, compared against a five-step version with a gender-focused component engaging men and community leaders.
Theory of Change: Lift families out of poverty and improve gender equality through interconnected steps enabling social and individual transformation.
Inputs (5 Steps):
- Formation and strengthening of Self-Help Groups.
- Capacity building and training (business, skills, climate, gender).
- Access to credit and productive assets.
- Value chain analysis, value addition, market linkages.
- Community engagement for gender transformation.
Funding: Total budget EUR 1,508,122, with EUR 1,500,000 from Agence Française de Développement (AFD) and EUR 8,122 from Hand in Hand International.
Project Schedule and Deliverables:
- February 29th, 2024: Updated activity calendar, complete research protocol.
- April 30th, 2024: Ethical Review Board approval, finalized KPI dashboard.
- September 30th, 2024: Semi-annual KPI reporting compliance.
- November 30th, 2024: Inception report (stakeholder engagement, gender analysis, MEL framework, baseline cohort 1).
- March 30th, 2025: Semi-annual KPI reporting compliance.
- April 30th, 2025: First annual audit.
- June 30th, 2025: 1st yearly implementation report (SHG mobilization, training, credit/market linkages, financial reporting).
- September 30th, 2025: Semi-annual KPI reporting compliance.
- March 30th, 2026: Semi-annual KPI reporting compliance.
- April 30th, 2026: Second annual audit.
- June 30th, 2026: 2nd yearly implementation report (baseline cohorts 1 and 2, preliminary endline cohort 1, community engagement, financial reporting).
- September 30th, 2026: Semi-annual KPI reporting compliance.
- March 31st, 2027: Semi-annual KPI reporting compliance.
- April 30th, 2027: Third annual audit.
- June 30th, 2027: 3rd yearly implementation report (cohort 2 activities, baseline, community engagement, financial reporting).
- September 30th, 2027: Semi-annual KPI reporting compliance.
- January 31st, 2028: Draft final report, policy engagement, and scale-up plan.
- March 31st, 2028: Final report, final policy plan, final KPI dashboard.
- July 30th, 2028: Final audit report.
Funds Management: FID funds are drawn down per the grant agreement, managed via a dedicated Hand in Hand International bank account, and transferred to partners based on invoices.
Context of the AuditPer the Financing Agreement, a final audit report is due within 3 months after the Deadline of Use of Funds, covering eligible expenses. Annual audits are due within 3 months of each agreement anniversary. Audits are conducted by an independent, reputable firm, appointed by the Primary Beneficiary, with AFD’s approval of the terms of reference and firm selection. The auditor verifies fund usage per the agreement.
Audit ObjectivesThe auditor will express a professional opinion on:
- Fair presentation of project financial statements.
- Conformity of fund usage with contractual conditions and eligibility criteria.
- Effectiveness of the internal control system in managing project risks.
- Compliance of contract awards with economy, transparency, and AML/CFT principles.
- Provide recommendations on audit aspects.
Key documents:
- Financing Agreement between FID and Hand in Hand.
- On-granting agreements with Hand in Hand Tanzania and IPA.
- Financial plan and activity programs.
- Procurement Plan and AFD’s Procurement Guidelines.
- First Audit: March 20th, 2024, to March 31st, 2025 (report by June 30th, 2025).
- Second Audit: April 1st, 2025, to March 31st, 2026 (report by June 30th, 2026).
- Third Audit: April 1st, 2026, to March 31st, 2027 (report by June 30th, 2027).
- Fourth Audit: April 1st, 2027, to March 31st, 2028 (report by June 30th, 2028).
- Final Audit: April 1st, 2028, to Deadline for Use of Funds (planned September 30th, 2029, report within 3 months).
- Total Budget: EUR 1,508,122 (AFD: EUR 1,500,000; Hand in Hand International: EUR 8,122).
- Expenditure (as of January 31st, 2025):
- Hand in Hand Eastern Africa Tanzania: TZS 529 million.
- Hand in Hand International: €49,222.89.
- IPA: €123,151.80.
- Bank Accounts:
- Hand in Hand International: Crown Agents Bank.
- Hand in Hand Tanzania: KCB Bank Tanzania LTD.
- IPA: Existing account for project funds.
- Supporting Documents: Invoices, contracts, fiscal receipts, payslips (72 for Hand in Hand International), 6 employment contracts, 309 IPA transaction details (personnel, travel, training, etc.).
- The auditor reports scope limitations or restrictions to AFD promptly, consulting the Entity on actions needed.
- Security or sanitary issues prompt agreement with the Contracting Authority to adapt the scope.
Audit Methodology and Reference Framework Conduct of the Audit Audit Stages- Engagement Preparation:
- Contact Entity by May 5th, 2025, to agree on timetable and fieldwork.
- Ensure availability of financial statements, supporting documents, and contracts.
- Opening Meeting:
- Discuss fieldwork planning, logistics, security, document availability, and designate a focal point.
- Execution:
- Perform procedures in section 2.3, using participatory methods to gather evidence.
- Aide-Mémoire and Restitution Meeting:
- Prepare aide-mémoire, review findings with Entity, and request additional documents if needed.
- Draft Report:
- Submit within 14 working days of opening meeting to Entity and AFD. Comments due within 14 days.
- Final Report:
- Submit within 14 working days of receiving comments, incorporating feedback.
- Start Date: May 5th, 2025
- Maximum Duration: 10 working days (mission total: 2 months).
- Schedule:
ActivityM1 W1M1 W2M1 W3M1 W4M2 W1M2 W2M2 W3M2 W4 Engagement Preparation X Opening Meeting X Fieldwork X X Aide-Mémoire & Restitution X Draft Report Submission X AFD/Entity Comments X X Final Report Submission X X
- Audit Evidence Location: Arusha office (Summit Centre, 4th floor, west wing); remotely via SharePoint for Hand in Hand International and IPA (optional IPA office visit in Dar es Salaam).
- Resources: Secure offices, internet, badges, office equipment in Arusha; access to MIS-accounting system if needed.
- Remote Audit: Possible with provided system access.
- Estimated Man-Days per Audit: 9–16 days.
RoleMin. DaysMax. Days Partner/Team Leader 1 2 Supervisor/Senior Auditor 3 6 Assistant Auditor 5 8 Total 9 16
- Template: Mandatory audit report template in French/English.
- Currency: Euros (€), with optional additional currencies.
- Findings: Presented per Annex 4.2 (eligible, eligible with misstatements, ineligible, unaudited).
- Submission: Electronic (Word/Excel) to AFD and Entity; one original paper version to Entity with cover note, signed by the partner.
- Financial Audit: Audit at least 65% of total expenditure. Increase to 85% if financial findings exceed 10%. Audit 50% of each budget line, 10% of each sub-line.
- Internal Control System: Compliance testing based on risk assessment.
- Procurement Audit: 100% of contracts audited for post-review; ex-ante contracts with No Objection Notification excluded.
- Verify compliance with financing agreements, procurement rules, and technical standards.
- Ensure supporting documents exist, are probative, and comply with chronology and mandatory information.
- Confirm expenditure is recorded, incurred during the project period, and excludes ineligible costs.
- Opinions: Unqualified, qualified, adverse, or disclaimer.
- Consider prior year’s modified opinions (ISA 710) to avoid unresolved findings.
- Use Annex 4.2 Excel file to document procedures and misstatements.
- Retain material misstatement documentation for 5 years post-final report approval.
- Verification of Financial Statements:
- Confirm compliance with financing agreement and financial plan.
- Ensure fair presentation of expenditure and revenue.
- Verify consistency with accounting records, technical/financial reports, and bank accounts.
- Review adjusting entries and control procedures for funds to other entities.
- Optional: Request a letter of representation (Annex 4.4, per ISA 580).
- Verification of Fund Usage:
- Confirm compliance with contractual conditions and accounting principles.
- Verify expenditure aligns with agreed activities, is supported by documentation, and is incurred during the project period.
- Analytical and Budgetary Procedures:
- Verify budget authenticity, expenditure alignment, and validated amendments.
- Assess absorption rate and explain discrepancies.
- Exchange Rate Methodology:
- Confirm compliance and accuracy of exchange rates used.
- Document Analysis:
- Review financing agreements, contracts, reports, budgets, and organizational setup.
- Review of Internal Control System:
- Verify task definitions, separation of duties, expenditure justification, cash controls, supplier selection, and archiving.
- Ensure AML/CFT compliance and detection of double financing.
- Risk Assessment:
- Assess risks (completeness, effectiveness, etc.) and control mitigation.
- Control Testing:
- Test key controls to prevent/detect errors, fraud, or non-compliance.
- Requirement Definition: Verify compliance with procurement plan and budgets.
- Competitive Tender Process: Assess advertising, deadlines, and procedure choice.
- Evaluation and Award: Confirm evaluation consistency, best/lowest bidder rule, and breach detection.
- Contract Management: Verify contract clauses, guarantees, and technical consistency.
- AFD No Objection Notice: Confirm requests and delivery; audit non-compliant contracts.
- AML/CFT Due Diligence: Verify checks against sanction lists; auditor to check if Entity fails to do so.
- Review prior recommendations, assess implementation, and propose solutions for non-compliance.
Professional Obligations Standards and Ethics Professional Standards to be Used- Comply with ISA standards (240, 250, 260, 330) and ISAE 3000 for fraud, compliance, governance, risk, and documentation.
- Produce sufficient evidence that the audit adheres to ISA and regulatory requirements.
- Adhere to IFAC Code of Ethics (integrity, objectivity, independence, competence, confidentiality, professional behavior).
- Member of an IFAC-affiliated national accounting/auditing body, or commits to IFAC standards and ethics.
- Staff with IFAC-standard experience, particularly ISA, and audits of similar entities.
- Experience in development aid, internal control, procurement audits, and relevant laws.
- Proficient in French or English.
- Category 1 (Audit Partner/Team Leader): 8+ years’ experience, IFAC member, responsible for contract and report.
- Category 2 (Supervisor/Senior Auditor): 5+ years’ experience, university degree or professional qualification.
- Category 3 (Assistant Auditor): 2+ years’ experience, university degree.
- Additional support staff costs included in expert fees.
- Provide CVs for all team members, detailing audit experience and relevant qualifications.
CategoryMin. Number Cat 1: Partner/Team Leader 1 Cat 2: Supervisor/Senior Auditor 2 Cat 3: Assistant Auditor 2 Total 5 DOWNLOAD THE FULL TENDER NOTICE HERE
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