CALL FOR PROPOSALS: INSTITUTIONAL AUDIT
Financial Years 2026 – 2029
- Introduction
These Terms of Reference define the requirements for the external audit of Lifeline Gedo (LLG) for the financial years ending 31st December 2026 through 31st December 2029. The audit will cover the organization’s consolidated financial statements, including all donor-funded projects implemented during the respective financial periods.
The audit will include a financial audit, as well as compliance and performance components, ensuring that LLG’s financial reporting, use of funds, and operational systems meet internationally accepted standards and donor requirements.
- Background
Lifeline Gedo (LLG) is a Somali national non-governmental organization established in 2005, implementing humanitarian and development programs across sectors including Health and Nutrition, WASH, Food Security and Livelihoods, and Resilience programming. The organization operates across Gedo, Benadir, and Middle Jubba regions, working in partnership with institutional donors, UN agencies, and international NGOs.
LLG manages a diversified portfolio of grants funded by many partners inclduing UN, INGOs, Direct funding from donor like FCDO and ECHO through consortiums. These projects require strict adherence to financial management standards, transparency, and accountability.
The organization maintains financial systems, internal controls, and procurement procedures aligned with international best practices. However, as part of strengthening governance and ensuring continued donor confidence, LLG seeks to engage an independent external audit firm to conduct annual audits and provide professional assurance on its financial statements and systems.
- Objectives of the Audit
The overall objective of the audit is to provide LLG’s management, Board of Directors, and its partners with reasonable assurance that the organization’s financial statements present a true and fair view of its financial position.
The audit is also intended to assess whether financial transactions are carried out in accordance with approved budgets, donor agreements, and applicable laws and regulations.
Beyond financial assurance, the audit will provide an independent assessment of the effectiveness of LLG’s internal controls, financial systems, and operational processes, identifying areas for improvement and strengthening institutional capacity.
- Scope of the Audit
The audit will cover LLG’s annual financial statements on a consolidated basis, including all funding streams and project activities implemented during the financial year under review.
The scope includes three interrelated components:
Financial Audit
The financial audit will be conducted in accordance with International Standards on Auditing (ISA). It will involve examination of financial records, verification of transactions, and validation of supporting documentation to determine whether financial statements are free from material misstatement.
Compliance Audit
The compliance component will assess whether financial transactions and program expenditures comply with:
- Donor agreements and grant conditions
- LLG financial and procurement policies
- Applicable national laws and regulations
Performance Audit
The performance audit will assess whether LLG’s systems, processes, and resource utilization reflect principles of economy, efficiency, and effectiveness. This includes reviewing whether resources are used optimally and whether internal processes support sound financial management.
- Audit Approach and Methodology
The audit firm is expected to adopt a risk-based approach, ensuring that audit procedures are guided by materiality and risk assessment.
The audit process will include planning, interim review (where applicable), fieldwork, and reporting. During this process, the auditor will gain a thorough understanding of LLG’s financial systems, internal controls, and operational environment.
The methodology should include a combination of document review, sampling, verification, analytical procedures, interviews, and system walkthroughs. The auditor is expected to exercise professional judgment in determining sample sizes and testing approaches, ensuring sufficient and appropriate audit evidence is obtained.
- Specific Audit Procedures
While the audit firm retains responsibility for designing its procedures, the following minimum requirements are expected:
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