Tenders are invited for Financial Audit Report - DAEM Project. The Lebanese Association for Development Al Majmoua, an independent, apolitical, not for profit Lebanese Non-Governmental Organization (NGO), has been one of the leading Microfinance Institutions in Lebanon, since 1994. Al Majmouas core business is to provide "micro" loans to individuals who have limited or no access to formal lending channels. Al Majmoua views development in a holistic approach. Micro-credit alone may not be sufficient to sustain a small business. Non-financial services, particularly Business Development Services, play a complementary role in improving the quality of life of the most vulnerable, especially women entrepreneurs. Al Majmoua is active across Lebanon, including the Palestinian Camps, through a network of 10 offices. The branches allow Al Majmoua to be present in the communities it serve and remain tuned to the needs of the micro-entrepreneurs. Sub-Partner: Plan International is an independent humanitarian and development organization with over 75 years of experience, advancing childrens rights and gender equality with a focus on girls. Operating in more than 70 countries, the organization supports children from birth to adulthood and responds to crises through advocacy and partnerships. Plan International Lebanon has been active since 2017, working with partners to support Lebanese and refugee children, particularly adolescent girls and young women, across protection, education, and economic empowerment sectors. The organization also works to address the root causes of discrimination and promote lasting, systemic change. Objective: Based on the financial information and other information provided by Al Majmoua, the MFA will determine whether all legislative and regulatory requirements linked to the funds granted have been complied with The overall objective of the audit is to provide the MFA with confidence in financial information provided to the MFA by Al Majmoua. By providing an opinion on the financial statements, and by reporting findings and observations, the audit company provides part of the basis on which the MFA will assess the compliance of relevant legislative and regulatory requirements. The objective of the financial audit is to obtain reasonable assurance whether the funds granted through the MFA are free from material misstatement. Based on the audit evidence obtained, the objective is thereby to express an opinion on whether the financial statements are free from material misstatement. The overall objective of the compliance audit is to obtain reasonable assurance whether transactions covered by the financial statements comply with the appropriations granted, statutes, other regulations, agreements, and usual practice. Similarly, the objective of the performance audit is to make an assessment to obtain reasonable assurance whether the systems, processes, or transactions examined support the exercise of sound financial management in the administration of the funds granted through the MFA. The audit will also aim to provide Al Majmoua with an external assessment of the financial capacity and established business processes. This includes providing observations and recommendations as part of the audit. The scope of the audit includes a financial audit as well as a compliance and performance audit. The financial audit must be carried out in accordance with International Standards on Auditing (ISAs). Other frameworks of auditing than ISAs are accepted as a basis for the audit, provided these frameworks result in an audit equivalent to an audit planned and performed according to the ISAs and ISSAIs. This will require the audit company to plan and perform procedures based on risk assessment and materiality. Therefore the audit company must: Identify and assess risks of material misstatement of the financial statements, whether due to fraud or error. Based on the risks identified, the auditor must design and perform relevant audit procedures to obtain sufficient and appropriate audit evidence to serve as the basis for the auditors opinion Obtain an understanding of the internal controls relevant to the audit in order to design appropriate audit procedures. The purpose is not to express an opinion on the effectiveness of the internal controls. In relation to funds granted through the MFA, these controls pertain in particular to costs, including costs related to activities funded by the MFA, recognised in the financial statements. Evaluate the appropriateness of the accounting policies used in the financial statements, including the reasonableness of estimates and related disclosures. In relation to funds granted through the MFA, this is particularly relevant for accounting policies regarding project costs. The specific audit procedures that may be relevant for the financial audit are specified further below. The performance and compliance audit must be carried out in accordance with relevant International Standards of Supreme Audit Institutions (ISSAIs). Therefore the audit company must: Examine and evaluate the functioning of management systems and business processes with special consideration to compliance and the principle of economy. Gain an understanding of the audited entity and its environment to identify relevant regulation and legislation. Consider the necessity and relevance to perform test of details regarding compliance and the principle of economy, effectiveness, efficiency. Evaluate and conclude on audit findings and prepare communication. The specific audit procedures that may be relevant for the performance and compliance audit are specified further below. The audit must be planned in order to facilitate the timely submission of audited financial statements in accordance with annex II Financial Management Guidelines. This means that the audit is expected to take place in the period 01.01.2025 to 31.12.2025 Specific procedures The audit company must plan the audit in accordance with their risk assessment. The extent and nature of planned procedures will therefore be subject to the professional judgement of the audit company. It is the audit companys responsibility to plan the necessary procedures to obtain sufficient and appropriate audit evidence to form the opinion of the audit. However, the procedures listed below are considered to be a minimum in order to form an opinion for the audit. As a result, the audit company is expected to perform the listed procedures as well as plan and perform further procedures, if this is deemed necessary according to professional judgement. General procedures to be performed in regard to the audit process The audit company must: On a timely basis, submit a complete schedule for the audit process, including dates for interim audit, year-end audit, on-site visits, field visit and reporting. Submit detailed specified requirements for the audit 10 days ahead of the audit to ensure the timely preparation of accounting material necessary for the audit Based on the knowledge obtained in the planning phase, determine a materiality level in accordance with ISA 320. Perform interviews, observations, inspections of documents, and walk-throughs of processes to assess the internal control capacity, including: Control environment Design and implementation of key controls Operational effectiveness of key controls, if tested Perform walk-through of processes and routines as well as interviews to assess accounting and financial capacity, including: Employed accounting system Use of manual spreadsheets to record entries Mapping the applied chart of accounts to the approved budgets Underlying documentation to support recorded entries Identify, evaluate and report on all material observations and findings using management letter. Please refer to the Deliverables sections of these Terms of Reference. Specific procedures to be performed in regard to financial audit The audit company must: Request bank confirmation letter mailed directly to the implementing partner required to open a separate bank account Confirm and reconcile amounts received from the MFA Perform substantive testing on a sample basis of expenditure to verify proper allocation to the appropriate budget lines against the approved budget Perform substantive testing on a sample basis to verify the existence of valid third party supporting documents relating to reported expenditure. The sample size shall be based on the audit companys professional judgement and should be stated in the methodology description related to the audit. All instances of any missing supporting documents must be reported, including the amounts in question. Perform substantive testing on a sample basis of the fixed asset list included in the financial statements as part of the reporting requirements to verify the existence and valuation of assets. Perform procedures to verify the occurrence of transactions related to: Any interest earned during the financial period Any exchange gain/losses recorded in the accounts. Specific procedures to be performed in regard to performance audit The audit company must: Test of controls related to performance audit Perform interviews and walk-throughs to gain an understanding of the business processes Identify key controls related to performance. These controls may include: Authorisation in connection with the procurement of goods and services. Budget reviews and follow up on costs Managements review of finalised procurement processes Monitoring reviews including evaluation of progress compared to activity description Managements review of benchmarks for completion or equivalent Perform test of design and implementation of identified key controls Depending on audit strategy, perform test of the operational effectiveness of controls. Substantive testing on a sample basis Determine relevant aud Tender Link : https://www.daleel-madani.org/calls-for-proposal
