1. Background and context

The Danish Refugee Council (DRC) has been providing relief and development services in the Horn of Africa since 1997. The DRC Somalia Programme is the largest of the six country programmes in the Horn of Africa and Yemen region. DRC is among the INGOs with the largest presence in Somalia, with country-wide programmes implemented through six main area offices in Somaliland and Puntland in the north and in Hiraan Region, Gedo Region, Bay Region and Banadir Region in South and Central Somalia. Because we are there, DRC is able to respond rapidly and flexibly to recurrent crises and the needs of Somalis who are affected by humanitarian crises. DRC supports refugees, migrants, internally displaced populations and other persons affected by crises in both urban and rural settings. DRC implements activities in Somalia in the following sectors: WASH, Shelter and Non-Food Items (NFIs); Protection; Food Security and Livelihoods (FSL).


The Agreement of Cooperation between UN-Habitat and DRC is a 7 months project, funded by the EU with the aim of mitigating the impact of COVID-19 crises among IDPs and people living in vulnerable situations in Mogadishu. The project contributes to the effective COVID-19 response, early stabilization and recovery after the pandemic in per-urban areas of Mogadishu and strengthens urban resilience in the Banadir Region of the Federal Republic of Somalia.

The project aims to achieve the following specific objectives:

  1. Enhanced capacity of relevant institutions at BRA/Mogadishu Municipality to respond to the COVID-19 crisis, through streamlining coordination mechanism, mainstreaming gender sensitive actions, and finding synergies between ongoing national and regional
  2. Improved access to WASH services in IDP sites and urban poor neighborhoods and to Infection Prevention and Control (IPC) health facilities and other services to promote testing and facilitate case management including alternative referrals;
  3. Reduced negative socio-economic impact upon livelihood of the most vulnerable members of displacement affected communities through access to cash-transfer programs and emergency protections.

The selected audit firm shall conduct an audit of the Project in accordance with International Standards of Auditing (ISA) to determine the regularity of the receipt, custody, expenditure, and the accounting of the funds provided by UN-Habitat to the Project and assess the overall operational and internal control system for management of the project. The auditors will be conducting the audit for the sole use of Danish Refugee Council and UN-Habitat.

The anticipated project expenditure as at the end of the project is USD 1,435,000. The project will be audited twice i.e. during the project implementation phase (interim) and at the end of the project period (close-out). An audit report will be required for each audit.

The scope of the audit;

  1. Assess the overall management of the Project’s implementation, monitoring and supervision. This should include the review of disbursements made by UN-Habitat, work plans, progress reports, project resources, project budgets, project expenditure, project delivery and disposal or transfer of assets;
  2. Express an opinion on whether the financial statements of the Project present fairly, in all material respects, the funds disbursed by UN-Habitat and project expenses for the period covered, in accordance to the Agreement of Cooperation;
  3. Where applicable, report in monetary value, the net financial impact of any modified audit opinion (modified opinions can be qualified, adverse, or disclaimer) on the statement of expenses where applicable.

This audit will include such tests and controls as the auditor considers with a general focus on:

  • Contractual compliance and practice: To assess and confirm that DRC is compliant with UN-Habitat contractual obligations. It will also entail confirming that DRC’s management practices, including administrative, contractual, financial and legal are in line with best practices.
  • Financial management and internal controls: To assess and confirm that financial management and control environment of DRC Somalia has been designed and implemented in line with best and generally accepted accounting standards.
  • Expenditure and reporting verification: To verify and confirm, on a sample basis, that reported expenditure are accurate and a true reflection of the project’s financial activities, and also to confirm that all expenditures have sufficient support documentations.
  • Contracting and procurement: To establish and confirm that transparent, accountable and appropriate procurement and contracting practices are established and are being followed.
  • Regulatory and tax compliance: To confirm on whether DRC has complied with the country’s tax laws and any other regulations.

The specific focus will be to:

  • Ascertain compliance of the laid down DRC’s internal policies and compliance with the terms and conditions of the agreement of cooperation.
  • Test whether all the activities included in the project document and work plan have been implemented as planned and the target outputs under each activity achieved.
  • Verify the validity of project expenditure, accuracy of reporting and allowability/eligibility, and classification of costs into budget lines.
  • Ascertain and evaluate the adequacy and effectiveness of the financial management and internal control framework/ environment such as segregation of duties, approval of expenditure and cash & bank reconciliations.
  • Express an independent professional opinion regarding Value for Money (VfM) i.e. efficiency, effectiveness and economy of the project’s operations.
  • Assess conformity of expenditure with the budget and analytical review – includes tests of authenticity/authorization of the initial budget, conformity with budget, test that all expenses were foreseen in the budget, test that amendments to the approved budget, if any, comply with the conditions for such amendments, and that expenditure for a transaction or action has been classified under the correct heading and subheading of the approved budget.

The deliverables will be an audit report which includes (i) an audit opinion, (ii) the audited financial statements and (iii) a management letter.

The audit opinion: The audit report should clearly indicate the auditor’s opinion. This would include at least the following:

  1. That it is a special purpose and confidential report;
  2. The audit standards that were applied (ISAs, or national standards that comply with one of the ISA in all material respects);
  3. The period covered by the audit opinion;
  4. The amount of expenses audited;
  5. The amount of the net financial impact of the modified audit opinion on the financial report, if modified;
  6. The reason(s) resulting in the issuance of a modified audit opinion, qualified, adverse or disclaimer opinion (the reason(s) must be also included in the management letter as an audit observation(s);
  7. The scope limitation (description and value) where applicable;
  8. Expression of an opinion on whether the statement of expenses presents fairly the expense incurred by the Project and that the expenses incurred were:
    • In conformity with the approved project budgets;
    • For the approved purposes of the project;
    • In accordance with Agreement of Cooperation terms and conditions; and
    • Supported by adequate supporting documents.
  9. The audit report should include the following financial statements:
    1. The statement of expenses for the period covered within the scope of audit;
    2. The statement of cash position (cash and bank balances of the project); and
    3. The statement of assets and equipment held by the project.
  10. Management Letter: The management letter should describe any audit issues/conditioncriteriacauseconsequences/impact and recommendations to remediate the issues noted.

The task will be expected to take place over a period of approximately 14 days for each audit. The proposed number of days includes submission of draft audit report.


It will not be mandatory to visit DRC offices. The audit may be done remotely at the audit firm’s premises. The required documents and/or information will be shared with the auditor through an online platform as well as the conduct of entry and exit meetings.


The evaluation process consists of three stages: 1) Administrative, 2) Technical and 3) Financial. Each stage requires information and documents mentioned in this TOR.

    1. Administrative Evaluation

A bid shall pass the administrative evaluation stage before being considered for technical and financial evaluation. Bids that are deemed administratively non-compliant may be rejected. Documents listed below shall be submitted with your bid.

Document Instructions

A detailed firm’s profile

The firm should be approved by ICPAK/ACCA & the partners should be in good standing with ICPAK/ACCA

The firm must have a physical address and valid business permit

The firm must have at least three INGOs and/or Humanitarian Organizations referees who must be its clients

Partners and key staff curriculum vitae

Tax compliance certificate

Technical and financial proposal

Annex 1; General Conditions of Contract

Annex 2; DRC Supplier Code of Conduct

Supplier Profile & Registration Form

Complete ALL sections in full of Supplier Profile & Registration form, sign, stamp and submit

Previous contracts for Similar Services

Reference document copy of previous contracts for Similar services, within the last 3-5 years. Submit in the technical bid envelope (Mandatory) Photocopy

Note: DRC is a VAT Withholding agent appointed by KRA

If any information required during the administrative evaluation is not provided by the bidders, DRC may choose to request bidders to supply this information within 48 hours of the tender opening. Please note that this is only applicable for documentation that does not alter the details in the bid, such as price information.

Technical Evaluation

To be technically acceptable, the bid shall meet or exceed the stipulated requirements and specifications in the TOR. If a Bid does not technically comply with the TOR, it will be rejected.


Technical proposal

  1. Should indicate the audit approach, methodology and work-plan for this assignment.
  2. The firm must also demonstrate sufficient quality control measures.

Year of Experience

  1. The firm should have been in practice for a period of not less than 5 years
  2. The firm must have five years’ experience in audit of International Non-Governmental Organizations (INGOs) and/or Humanitarian Organizations
  3. List of various donor-funded projects that the audit firm has audited.

Key personnel that will work on this assignment. This should include;

  1. The firm must have at least two partners who are full time practitioners
  2. Appropriate mix of the audit team and the level of involvement each has in conducting this assignment (partner, team leader, manager, audit senior, audit assistant, or special expertise, if necessary).
  3. Audit and accounting qualifications and level of experience (minimum of 3 years’ experience) of the key proposed personnel in relation to audit of donor-funded projects.

Note: If awarded, staff proposed by the firm on the proposal will be the ones to carry out the assignment. Any replacement of the proposed staff during assignment execution will need validation of their qualification and experience by DRC.

i) At least three references who must be clients whom the firm previously provided donor-funded project audit services (listed above).

Note: Proposals failing to meet the minimum requirements stated above will not be considered further.

Financial Evaluation

All bids that pass the Technical Evaluation will proceed to the Financial Evaluation. Bids that are deemed technically non-compliant will not be financially evaluated.

Financial proposal – should be itemized to show audit fees, taxes and any disbursements. Also note that the total cost of financial offer will be indicated in the DRC Request for Quotation Form and the fees should be quoted in USD.


The auditor must be completely impartial and independent from all aspects of the management or financial interests in Danish Refugee Council.

DRC will evaluate proposals and award the assignment based on technical and financial feasibility in line with DRC Procurement guidelines. DRC reserves the right to accept or reject any proposal received without disclosing reasons to applicants and is not bound to accept the lowest bidder.

How to apply

Interested firms that meet the above requirements should send both their proposal and other required documents as one attachment to email address on or before 6th July 2022.

Please indicate “Proposal to conduct UN-Habitat 2022 Project Audit – “RFQ NO.SOM-014957” in the subject line of your email application.

Application documents can be downloaded from the link below:

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