TERMS OF REFERENCE (TOR) FOR EXTERNAL AUDIT SERVICES

1. BACKGROUND

The Catholic Dioceseof Mbulu is a faith based organisation providing evangelical services through the Pastoral department and social services through its Development Department (DMDD). Since its inception in 1995 the DMDD has partnered with different International donors as well as with the local government authorities in its area of jurisdiction to support various community projects for human development and self- reliance. These include improving health, overcoming illiteracy, reducing environmental damage, gender, entrepreneurship skills training, and child protection, conserving cultural identity and providing training for better agricultural practices etc. With funds from Caritas Australia (CA) DMDD has implemented the 1st phase of the Integrated Community Development program(A+ Program -7 yrs) in Mangola division of Karatu district in Arusha region. In July 2023, Caritas Australia approved funds to DMDD to implement A+ successor project phase 2 in the same Mangola division but different villages.

A+ successor Program is being implemented in the Catholic Diocese of Mbulu by Diocese of Mbulu Development Department (DMDD) and will complete its 1st year of the project implementation on 30th June 2024. The project aims at improving the livelihoods of marginalised rural communities.

Objective of the Audit;

The objective of the audit of DMDDs project financial statements is to enable the auditors to express an independent professional opinion on the financial position of DMDD A+ project and to ensure that the funds utilized for project activities have been used fortheir intended purposes.

1. SCOPE OF THE AUDIT

• The Audit Firm The Auditor’ will provide Financial Assurance and Audit Services based on Agreed Upon Procedures for and on behalf of DMDD by reviewing the financial transactions undertaken by the Catholic Diocese of Mbulu Development Department (DMDD) for all operational and program related activities, and a review of the underlying systems, manuals, key written policies and processes and other guidelines of DMDD and ensure they have been complied with during the period under review. Assess the reasonableness of expenditures, ascertain there was no double funding and report wether value for money has been achieved .This audit should provide assurance of the information included in the performance and funding acquittal reports submitted to Caritas Australia by DMDD. The Auditor will provide DMDD with a Special Purpose Financial Statement and a Management Letter outlining the audit findings and recommendations to address any issues identified.

The Audit has to be undertaken for the A+ Successor Program, -Year 1 project.

• The Financial Period to be audited shall be 1^st July 2023 – 30^th June 2024.
• The budget for the organisation (DMDD) for FY 2023/24 for the A + Successor project implementation is (Year 1 Project): 214,881 AUD
• The Auditor will be required to work to the standards and guidelines set out by the Government of Tanzania. In addition, the work of the Auditor must fully adhere to the standards and guidelines of the professional practice of financial audit as set out by the International Federation of Accountants (IFAC), and International Financial Reporting Standards.
• The audit requires the examination and report on the compliance to sound financial management practices, with regard to the following but not limited to:
• Whetherthe DMDD applied sound financial management practises including accounting systems with associated internal controls.
• whether the financial transactions reflected in the reports are in Accordance with financial regulations and procedures, budgetary provisions and other applicable directives.
• Whether the financial transactions recorded have

supporting documentation.

• Whether the finance system is maintained accurately and is adequate for the operational purpose or the organisation.
• Whether program reports submitted to Caritas Australia represent adequate and accurate disclosure of income and expenditure information to enable monitoring and final determination.
• Whether bank reconciliation including accounting for tranche payments is complete and accurate, and completed on a monthly basis with proper authorisation and verification.
• Whether internal policies exist and compliance to policy is evident in the application of the operational transactions.
• Whether internal controls support a sound financial management framework.
• whether the balance sheet accounts are reconciled monthly and provide a true representation of the financial health of the DMDD
• Whether any taxes that are due and statutory payments are made in a timely manner in accordance with the local regulations.
• Whether the assets register is accurately maintained and reflects the fair value of all assets.
• Any other tasks that the Auditor deems necessary to complete the assurance process.
• Period of Contract

The period is to be no more than agreed number of days as per the engagement letter – from the start of the audit to the final report compilation and submission to management.

• Location of Audit

The audit will be conducted at the offices of the Catholic Diocese of Mbulu Development Department (DMDD) located in Mbulu town. Forthe purpose of the audit, the Auditor will consult with the DMDD Coordinator, A+ project manager, Finance Officer and other staff members of the DMDD.

2. REPORTING

The draft report will be submitted to DMDD within ten working days of completion of the audit.

The Auditor will submit draft audit report including financial statements and management letters to Diocese of Mbulu Development Department (DMDD) for management comments. Comments and concerns raised by DMDD will be incorporated into the final report. The final report will then be submitted to the Diocesan senior management for endorsement. An authorised officer/team of DMDD will review the draft and provide any comments within 10 days of receiving the draft report.

The Auditor’s management letter must include comments on the quality of financial management of the program and any implications including recommendations for improvement.

The Final reports will be submitted to Caritas Australia within ten working days after being signed by DMDD.

The final report will include comments on the quality of financial management of the program, any implications and clear recommendations for improvement in the financial management of the program. In addition to the audit report the Auditor shall bring to the Development Directors attention any other matters that the auditors consider pertinent.

All reports or documentations produced both electronically or printed during the course of or as a consequence of the contract will remain the property of the Catholic Diocese of Mbulu.

3. WRITTEN SUBMISSIONS

Interested audit firms shall submit their Expression of Interest detailing the Scope of Services (technical proposal) and a financial proposal to the Diocese of Mbulu Development Department DMDD by close of business the 28^th June, 2024.

Expressions of interest should be sent by email to Diocese of Mbulu email.

dmddmbulu@yahoo.com and copied to mrtnmandi@gmail.com.