Annual Audit in Northern Armenia

Organisation

Hoffnungszeichen | Sign of Hope e.V.

www.hoffnungszeichen.de, www.sign-of-hope.org

Position

Auditor

Type of Contract

Short-term consultancy

Type of Audit

In depth

Location

Home-based with field mission travel to Tavush, Shirak und Lori Marz, Northern Armenia

Languages Required

English and/or German

Starting Date

01.02.2023

Auditing Period

From 01.01.2022 to 31.12.2022

Project Title

Integrated multi-level capacity building for climate-adapted rural agriculture in Tavush, Shirak and Lori Marz, Armenia

Total Project Budget

733,333 EURO

Annual Project Budget

220,480 EURO

Background and Organisational Setting

Hoffnungszeichen | Sign of Hope e.V. (SoH) is a Christian motivated organisation for Human Rights, Humanitarian Aid and Development Cooperation. Based in Constance, Germany, SoH is dedicated to helping those in distress and exploited people worldwide.

An audit is commissioned under the German Federal Ministry of Economic Cooperation and Development (BMZ) funding guidelines for development projects run by private German executing agencies.

SoH will be the private German executing agency and the contracting party, while Green LaneAgricultural Assistance NGO (GL)will be the local implementing agency.

The project objective is a sustainable reduction in rural poverty in Northern Armenia by introducing innovative, sustainable and climate-adapted agricultural practices (production and marketing). The livelihoods of 360 households are secured, regardless of the impacts of climate change, through the introduction of climate-adapted farming methods and a strengthened market position.

Audit Objectives

The purpose of the in-depth audit is to provide SoH with a sound basis for its accountability, transparency and accuracy in the financial disclosure towards the funding agency BMZ.

This in-depth audit will verify the compliance with standards of the funding agency BMZ, SoH, national regulations and the international accounting standards.

The auditor will review the project’s financial documents, receipts lists, records of transactions, all vouchers and receipts disbursed, and relevant project documents in order to come up with a professional, independent opinion on the financial accounting of the project Integrated multi-level capacity building for climate-adapted rural agriculture in Tavush, Shirak and Lori Marz, Armenia for all funds received and expended by GL from 01.01.2022 to 31.12.2022.

Additionally, the audit shall give recommendations on strengths, weaknesses, and required improvement in the project-related financial and human resources management systems of GL.

The audit will support the project quality assurance measures implemented by SoH and contribute to the decision-making process with regard to the project management and monitoring of finances by SoH and GL.

Expected Deliverables

The auditor is expected to produce an audit report, an audit certificate and a management letter), which will comprise the following:

1. Presentation of the scope and mandate of the audit, as well as the list of documents that formed the evidence for the audit,
2. An opinion whether financial statements (statement of accounts) are issued in accordance with the financial reporting framework of the project, BMZ requirements and an internationally recognised accounting standard,
3. A checked, signed and stamped list of all project costs receipts, sorted by BMZ budget lines (list can be provided by the local implementing partner),
4. Recommendations on identified shortcomings, and, if applicable, comments on the follow-up of audit observations and recommendations from previous years.

Audit documents can be issued in English or German.

Scope of the Audit

The audit should focus on the following:

• The correctness and completeness of the accounting records,
• The financial report, showing all project related income and expenditure structured by budget lines,
• Deviations of expenditure by budget lines. The expenditure, which exceeds or falls below the budget appropriations by more than 30 %, shall be explained separately, if the approval of the BMZ has not previously been obtained,
• That receipts and relevant supporting documents are available for all project related income and expenditures,
• The management of the funds made available, which includes the transfer of project funds, all interest earned from the project funds during the reporting period and further income generated by the project,
• Reviewing the appropriate use of funds according to the project objectives,
• Evaluation of the efficiency and cost-effectiveness of the usage of funds,
• Budget adherence through the comparison between budgeted and actual costs in the currency in which the expenditure was incurred. The audit report will not convert the examined amounts into the Euro amounts,
• Reviewing if personnel costs and social security contributions conform to the regulations in the project country and are locally comparable,
• The economical use of the project equipment and assets,
• The inventory and the use of capital items, their whereabouts and their purposive usage,
• Compliance with the legal framework of the project (project agreements and annexes, contracts, etc.) and the donor requirements,
• Compliance with the policies of the local implementing partner regarding procurement, financial administration, human resources management and travel.

Procedures and Communication

The auditor will be given access to all necessary documents in the project offices through the local implementing partner GL as well as relevant donor documents through SoH.

The auditor will be responsible to set up a schedule in agreement with the local implementing partner GL. Any expenses for field trips, postal and translation services and other expenses shall be included in the auditor’s proposed budget. GL will support the auditor with logistics and arrangements, however, all payments of the contract will be made directly by SoH.

Qualifications and Experience

• Necessary qualification to serve as a recognized independent auditing authority,
• Minimum of five (5) years of experience conducting external independent audits of projects funded by international institutional donors in Armenia.