United Nations Development Programme Cambodia Office

Transcription

1 REQUEST FOR PROPOSAL TO SELECT AUDIT FIRM FOR AUDIT OF NEX OR NGO PROJECTS United Nations Development Programme Cambodia Office NOTE: WHEN SUBMITTING YOUR BID DOCUMENTS, PLEASE CAREFULLY PLACE THE TECHNICAL AND FINANCIAL PROPOSALS IN SEPARATE ENVELOPES. UNDP WILL NOT BE ABLE TO CONSIDER BIDS THAT CONTAIN THE TECHNICAL AND FINANCIAL PROPOSALS IN ONE ENVELOPE, AND/OR BIDS OF WHICH THE OPERATIONAL AND TECHNICAL PART CONTAIN ANY PRICING INFORMATION WHATSOEVER ON THE SERVICES OFFERED. Page 1 of 41

2 CONFIDENTIAL REQUEST FOR A PROPOSAL to CONDUCT PROJECTS AUDIT Technical Proposal (One Separate Sealed Envelope) Financial Proposal (One Separate Sealed Envelope) Both Technical & Financial Proposals (One Sealed Envelope) Last date for receipt of Bids: 01 September 2008 before 12 noon, local time, Cambodia Date of Issue: 8 August 2008 Page 2 of 41

3 TABLE OF CONTENTS Request for a Proposal to Conduct Projects Audit Introduction Appendix I: Term of Reference (TOR) Appendix II: Proposal Submission Form Appendix III: Draft form of Contract Part A: General Conditions for UNDP Contracts for Professional Services (New Update) Part B: TOR Appendix IV: List of Projects Appendix V: Acknowledgement Letter Page 3 of 41

4 INTRODUCTION You are invited to submit a proposal to conduct an audit of the UNDP supported Projects. Your proposal could form the basis for a Long-term Agreement (LTA) between your firm and the United Nations Development Programme (UNDP) in Cambodia. The Agreement will cover the audit of financial reports for the year ending 2008 but may be extended, at the sole discretion of UNDP, for a further two years. The objective of the audit is to assess whether the financial report for the project (referred to as the Combined Delivery Report) presents fairly the expenditures for the project and that the funds were utilized for the purposes described in the project document and work plans. STATEMENT OF WORK (TOR) A detailed statement of work (TOR) is provided in Appendix I of this document. Technical Component The technical component of your proposal should be concisely presented and structured in the following order to include, but not necessarily be limited to, the following information: Description of the Firm and the Firm's Qualifications and the Composition of the Proposed Team A brief description of your firm including the total number of personnel, experience with similar projects, and client referrals. Provide the composition of the team that you propose and the curriculum vitae of the members of the team. For the minimum qualifications, please refer to the section Qualifications of the Auditor in the Statement of Work. Proposed Approach, Methodology, Timing and Outputs Any comments or suggestions on the Term of Reference as well as your description of the manner in which your firm/institution would respond to the Term of Reference. You should include the number of person-days in each specialization that you consider necessary to carry out all works required. Price Component Fixed Price Contract: The financial proposal should be prepared in light of the attached list of Projects. Audit cost of each project should be mentioned separately in front of each project. The financial proposal for each project must be a total fixed price quotation indicating the overall total amount in US Dollars proposed to UNDP. The total fees submitted by your firm to UNDP for the purpose of the present request shall be firm and final. The calculation of the fees should also indicate the all-inclusive cost in US Dollars and an estimate of the time-effort to be allocated for the services, expressed in number of working days by employee performing the Audit, i.e.,as applicable, audit partner, audit manager, audit senior and audit assistant. Any incidental out of pocket expenses (OPE) such as travel and accommodation must be submitted along with the proposal. No amount other than the proposed total fixed price fees shall be paid by UNDP for the provision of the audit services subject of the present request for proposal. Page 4 of 41

5 UNDP s general policy is to effect payment upon the achievement of specific milestones. Payments shall be made based on deliverables. You should also indicate any comments or reservations to the draft form contract. SUBMISSION AND SELECTION ARRANGEMENTS Introduction To enable you to submit a proposal, please find enclosed: Appendix I: Term of Reference (TOR); Appendix II: Proposal Submission Form, to be completed and returned with your proposal; Appendix III: A draft of the form of contract under which the services would be performed, including the "General Conditions for UNDP Contracts for Professional Services". Appendix IV: List of Projects Appendix V: Acknowledgement Letter UNDP reserves the right to reject any and all proposals received in response to this RFP and to negotiate with any of the proposers or other firms in any manner deemed to be in the best interest of UNDP. Although it is UNDP preference to award one contract for the services described in this RFP, UNDP reserves the right to award separate contracts for the elements covered by this RFP in any combinations as it deems appropriate, at its sole discretion. This RFP contains no contractual offer of any kind. Any proposal submitted will be regarded as an offer by the proposer and not an acceptance by the proposer of any offer by UNDP. No contractual relationship will exist except pursuant to a written contract document signed by UNDP and the proposer. UNDP reserves the right to modify or exclude any consideration, information or requirement contained in this RFP and to add new considerations, information or requirements at any stage of the procurement process, including negotiations with proposers, at any time before any contract is awarded for the audit services outlined in this RFP. Submission of the Proposal Your proposal shall comprise the following documents: (a) Proposal Submission Form; (b) Technical Component; and (c) Price Component. NOTE: WHEN SUBMITTING YOUR BID DOCUMENTS, PLEASE CAREFULLY PLACE THE TECHNICAL AND FINANCIAL PROPOSALS IN SEPARATE ENVELOPES. UNDP WILL NOT BE ABLE TO CONSIDER BIDS THAT CONTAIN THE TECHNICAL AND FINANCIAL PROPOSALS IN ONE ENVELOPE, AND/OR BIDS OF WHICH THE OPERATIONAL AND TECHNICAL PART CONTAIN ANY PRICING INFORMATION WHATSOEVER ON THE SERVICES OFFERED. Page 5 of 41

6 Proposals in response to the present request must be marked Proposal to Conduct Project Audit by close of business of 01 September 2008 before 12 noon, local time, Cambodia, at the following address: Registry Unit, UNDP Cambodia, #53, Pasteur Street, PO Box 877, Phnom Penh, Cambodia Fax: (855-23) Proposals received after this date will be rejected. UNDP may, at its discretion, extend the deadline for the submission of proposals, by notifying all prospective proposers in writing. The extension of the deadline may accompany a modification of the solicitation documents prepared by UNDP at its own initiative or in response to a clarification requested by a prospective proposer. Proposers must provide all requisite information under this RFP and clearly and concisely respond to all points set out in this RFP. Any proposal which does not fully and comprehensively address this RFP may be rejected. You are requested to hold your proposal valid for 120 days from the deadline for submission. UNDP will make its best effort to select a firm within this period. Assuming that a contract can be satisfactorily concluded by 15 October 2008 the first assignment for conducting Election Project Audit will start from 1 st November 2008 and remaining audit will start from 1 st March Therefore, your cost proposal shall remain valid up to 31 March Final audit reports have to be submitted to UNDP Cambodia by 20 April The costs of preparing a proposal and of negotiating a contract are not reimbursable by UNDP. UNDP will not return proposals received. These proposals shall be kept confidential for the sole and internal consideration of UNDP. Any requests for clarification should be referred to Ms. Marina So, Operations Manager, UNDP at marina.so@undp.org. Any written reply to a particular question may be copied to all other invited firms/institutions, at the discretion of UNDP. Evaluation of the Proposal A two-stage procedure will be utilized in evaluating the proposals, with evaluation of the technical component being completed prior to any price component being reviewed and compared. The Price Component will be reviewed only for those firms/institutions whose Technical Component meets the requirements for the assignment. The total number of points which a firm may obtain for both components is 120. The technical component, which has a total possible value of 100 points, will be evaluated using the following criteria: a) the firm's experience as well as demonstrated experience and capacity in the specific field of the assignment (10 points); c) the qualifications and competence of the personnel proposed for the assignment for a total of (55 points); and Page 6 of 41

7 b) the approach in implementing the tasks described in the Statement of Work (35 points). If your technical component achieves 70 points (at least 70%), your price proposal will be taken into account in the following manner: The total amount of points allocated for the price component is 20. The maximum number of points will be allotted to the lowest price proposal that is opened and compared among those invited firms/institutions which obtain the threshold points in the evaluation of the technical component. All other price proposals will receive points in inverse proportion to the lowest price; e.g., [total Price Component] x [US$ lowest] / [US$ other] = points for other proposer's Price Component. Please note that the UNDP is not bound to select any of the firms/institutions submitting proposals. Furthermore, since a contract will be awarded in respect of the proposal which is considered most responsive to the needs of the project concerned, due consideration being given to UNDP's general principles, including economy and efficiency, UNDP does not bind itself in any way to select the firm offering the lowest price. Page 7 of 41

8 APPENDIX - I TERMS OF REFERENCE FOR AUDITS OF NGO AND NEX PROJECTS Page 8 of 41

9 INTRODUCTION TABLE OF CONTENTS A. BACKGROUND B. PROJECT MANAGEMENT C. CONSULTATIONS WITH CONCERNED PARTIES D. DESCRIPTION OF FINANCIAL REPORTS TO BE AUDITED E. AUDIT SERVICES REQUIRED F. THE AUDIT REPORT AND MANAGEMENT LETTER G. AUDIT REPORT H. MANAGEMENT LETTER Page 9 of 41

10 Introduction: Throughout this document the term "implementing partner" is used to refer to the institution designated to manage the project. Where the project is nationally executed (NEX), this will refer to a government institution. Where the project is NGO executed, this will refer to an NGO. The term "government co-coordinating authority" refers to the government institution, which is the official UNDP counterpart. Auditors must certify, express an opinion, and quantify the financial impact on each of the following: (i) Statement of Expenditure (CDR) (ii) Cash position reported by the project as at 31 December 2008 (iii) Status of assets and equipment as at 31 December 2008 Auditors must indicate the risks associated with their findings and provide a categorization by risk severity: High, Medium, or Low. Auditors must provide a classification of possible causes of the audit findings. Country offices must ensure the audit services are adequately covered as specified in the present TOR and combined delivery reports (CDRs) are duly certified by the Implementing Partners and Auditors and attached to the audit reports. Annex 1 to these TOR provides the standard scope of audit. Annex 2 describes the qualifications of the auditor and may help in the process of selecting auditors. Where the TOR is being supplied to a short list of firms as part of a request for proposals and the firms short listed have been pre-qualified, then the list of qualifications would not be needed. Annex 3 is a sample of audit reports that need to be submitted by the auditor. Annex 4 provides a definition of audit opinions Annex 5 defines the three categories of audit findings Annex 6 provides the classification of possible causes of audit findings. Page 10 of 41

11 Background The premise of NEX and NGO execution is that UNDP is entrusting a government institution or an NGO to manage UNDP resources. The overarching objective of the audit exercise is to provide UNDP with assurance as to whether the resources are being properly used. Audit is an integral part of sound and administrative management, and of the UNDP accountability framework. UNDP administrative and programme funds are audited regularly and the findings are reported to the UNDP Executive Board. The overall objective for the audit of nationally executed programmes/projects is to provide the UNDP Administrator with reasonable assurance and audit opinion that UNDP resources are being managed in accordance with: (a) (b) The Government financial regulations, rules, practices and procedures The terms and conditions of the programme document or project document, including the delivery of planned outputs, the management and implementation arrangements, and the provisions for monitoring, evaluation, and reporting; and, c) The UNDP procedures and standards for accounting financial management and reporting of nationally executed programmes/projects This section should indicate that the TOR is directed to the audit of special purpose financial statements, which are referred to as Combined Delivery Reports (CDR). The tentative lists of projects are listed in Annex 7. Project Management UNDP senior officers together with their contact details are listed in Annex 8 Project contact persons responsible for accounting, financial management and audit together with phone numbers and addresses are listed in Annex 9 Project document including the project budget by major expenditure categories and the sources of all funding for the project are attached. Consultations with concerned parties: Prior to the start of audit work the auditor will be required to consult with the UNDP country office, the government counterpart, and the implementing partner for each project. Further, upon completion of the draft audit report and management letter, the auditor will be required to meet with the UNDP country office and the government entity co-ordinating authority to debrief them on its major findings from the audit and its recommendations for future improvements as well as to seek their feedback thereon. Page 11 of 41

12 Description of Financial Reports to be audited Description of the Combined Delivery Report and Supporting Schedules The report to be audited is referred to as the Combined Delivery Report (CDR). This report is prepared by UNDP, using an in-house accounting software package called ATLAS. As described in more detail below, the CDR combines expenditures from three disbursement sources for a calendar year. The three disbursement sources include: 1. Implementing partner (either Government or NGO) UNDP procedures require that where funds are advanced to the executing agency the agency must submit to the UNDP country office, on a quarterly basis, a financial report including (1) the status of the advance (2) a list of the disbursements made since the previous financial report, and (3) a request for a new advance. The UNDP country office enters the disbursements in ATLAS through the year as the financial reports are received. These implementing partner disbursements are recorded in the Government expenditure column in the CDR. 2. UNDP (country office, headquarters and other country offices) Disbursements made by UNDP from its own bank accounts are entered in ATLAS by the UNDP country office. These UNDP disbursements are recorded in the UNDP expenditure columns in the CDR. These disbursements may be classified as either direct payments or UNDP support services. This distinction, while very important for audit purposes, is not apparent from the CDR and can only be provided by the UNDP country office as a supporting schedule. A brief description of each category is provided below. a) Direct Payments - This is where the implementing partner is responsible for the expenditure but requested UNDP to effect payment to the vendor/consultant on its behalf. The implementing partner is accountable for the disbursement and maintains all supporting documentation. UNDP simply effects payments on the basis of properly authorised requests and gives the implementing partner a copy of the related disbursement voucher as evidence that payment was made. b) UNDP Support Services - This is where the government and UNDP have agreed that UNDP will provide support services to the project. These support services must be described in the project document/annual work plan (AWP). UNDP is fully responsible and accountable for these expenditures and, accordingly, maintains all supporting documentation for the disbursement. 3. UN agencies The UN agency reports its expenditures to UNDP and to the government. The UNDP headquarters enters the expenditures in ATLAS. These UN agency expenditures are recorded in the UN Agencies expenditure column in the CDR. At the end of the year, after receiving the fourth quarter financial report from the implementing partner and the year-end expenditure report from the UN agency, UNDP prepares the CDR and submits it to the implementing partner for signature. UNDP will provide the auditor with the signed CDR together with the following supporting documentation. 1. The quarterly financial reports submitted by the implementing partner. 2. A list of the direct payments processed by UNDP at the request of the implementing partner. Page 12 of 41

13 3. A list of the disbursement made by UNDP as part of support services provided to the implementing partner. 4. The UN agency expenditure statement for the year. The signed CDRs for the year 2008 will be ready by 31 March Audit Services Required The scope of the audit services required should be sufficiently clear to properly define what is expected of the auditor but not in any way restricts the audit procedures or techniques the auditor may wish to use to form an opinion. It should specify at least the following: A definition of the entity or the portion of an entity that is subject to audit. That the audit will be carried out in accordance with International Standards of Auditing. That the audit period is from 1 January to 31 December That the scope of the audit is limited to the implementing partner expenditures, which are defined as including (1) all disbursements listed in the quarterly financial reports submitted by the implementing partner and (2) the direct payments processed by UNDP at the request of the implementing partner. That the auditor will verify the mathematical accuracy of the CDR by ensuring that the expenditures described in the supporting documentation (the quarterly financial reports, the list of direct payments processed by UNDP at the request of the government, the list of disbursements made by UNDP as part of support services, and the UN agency expenditure statement) are reconciled to the expenditures, by disbursing source, in the CDR. That the auditor will state in the audit report the amount of expenditures excluded from the scope of the audit because they were made by UNDP as part of support services and the amount of total expenditures excluded because they were made by a UN agency. That the auditor will state in the audit report if the audit was not in conformity with any of the above and indicate the alternative standards or procedures followed. That the auditor will provide an opinion as to the overall financial situation of the project for the period 1 January to 31 December 2008 and will certify: 1. The Statement of Expenditure (CDR) for the period from 1 January to 31 December 2008; 2. The cash position reported by the projects as at 31 December 2008; 3. The status of assets and equipment held by the project as at 31 December 2008; and 4. Auditors must certify the prior year (year 2007) follow-up action plan. Note: Audit opinions must be one of the following: (a) qualified, (b), unqualified, (c) adverse, or (d) disclaimer. If the audit opinion is other than unqualified the audit report must describe both the nature and amount of the possible effects on the financial statements. A definition of audit opinions is provided in Annex 4. Page 13 of 41

14 The Audit Report and Management Letter The expected contents of the audit report and management letter and the topics/areas to be covered by the auditors. A. a. Audit Report The audit report should clearly indicate the auditor s opinion. (Refer to Annex 3 for a sample Audit Report). This would include at least the following: That it is a special purpose report and its intended use. The audit standards that were applied (ISAs, International Standards of Auditing). The period covered by the opinion. The scope limitation for those transactions that are the responsibility of UNDP (as part of support services) or a UN agency. Whether the statement of expenditure (CDR) for the period from 1 January t0 31 December 2008 adequately and fairly presented. The disbursements made are in accordance with the purpose for which funds have been allocated to the Project; Whether the Statement of Assets and Equipment is fairly and adequately presented as at 31 December 2008; and Whether the Statement of Cash Position reported by the project is fairly and adequately presented as at 31 December The due date for submission of a draft audit report after 4 weeks of audit exercise is 15 th April 2009 and the due date for submission of signed audit report to UNDP after 1 week of receiving management comments is 20 April B. b. Management Letter The management letter should cover the following topics/issues: A general review of project progress and timeliness in relation to progress milestones and the planned completion date, both of which should be stated in the project document or AWP. This is not intended to address whether there has been compliance with specific covenants relating to specific performance criteria or outputs. However general compliance with broad covenants such as implementing the project with economy and efficiency might be commented upon but not with the legal force of an audit opinion. An assessment of the project's internal control system with equal emphasis on (i) the effectiveness of the system in providing the project management with useful and timely information for the proper management of the project and (ii) the general effectiveness of the internal control system in protecting the assets and resources of the project. A description of any specific internal control weaknesses noted in the financial management of the project and the audit procedures followed to address or compensate for the weaknesses. Recommendations to resolve/eliminate the internal control weaknesses noted should be included. Page 14 of 41

15 The management letter should also include the following: The categorization of audit findings by risk severity: High, Medium, or Low. Definitions of these categories are given in Annex 5. The classification of possible causes of the audit findings. Definitions of these causes are given in Annex 6. Comments as to whether recommendations made in the management letter for the previous audit were implemented or, if not, the implementation status. Management comments/response (project management and/or UNDP, as applicable). More detailed guidance for each of the above general categories is provided below. Review of project progress As part of the general review of project progress, specific steps could include the following: Review annual and quarterly work plans, quarterly financial reports, and requests for direct payments and assess in terms of their timeliness and their compliance with the project document or the AWP, the POPP Review the Annual Project Reports prepared by the implementing partner and assess in terms of compliance with UNDP guidelines and whether the implementing partner met its responsibilities for monitoring described in the project document or AWP. Review whether the decisions and/or recommendations of the above activities have been followed through by the implementing partner. Review the pace of project progress and comment on the causes for delays. Comment on whether implementation services of the UN Agency(s) were provided in line with project document or AWP. Assessment of internal control The auditor is expected to conduct a general assessment of internal controls according to established internal control standards. In addition to the above general assessment, additional specific steps could include the following: Review expenditures made by the implementing partner and assess whether they are in accordance with project document, AWP and budgets; and are in compliance with the UNDP Project Cycle Operation Manual (PCOM), UNDP Programming Manual (6.4) and the POPP. Review the process for procurement/contracting activities and assess whether it was transparent and competitive. Page 15 of 41

16 Review the use, control and disposal of non-expendable equipment and assess whether it is in compliance with the UNDP Project Cycle Operation Manual (PCOM); and also whether the equipment procured met the identified needs and whether its use was in line with intended purposes. Review the process for recruiting project personnel and consultants and assess whether it was transparent and competitive. Review the implementing partner accounting records and assess their adequacy for maintaining accurate and complete records of receipts and disbursements of cash; and for supporting the preparation of the quarterly financial report. Review the records of requests for direct payments and ensure that they were signed by authorised government officials. Recommendations for improvement Recommendations should be directed to a specific entity so there is no confusion regarding who is responsible for implementation. The response of the entity should be included in the management letter, immediately following the recommendation. Also, the auditor may wish to comment on good practices (if any) that were developed by the implementing partner that should be shared with other project personnel. Available Facilities and Right of Access The auditor would have full and complete access at any time to all records and documents (including books of account, legal agreements, minutes of committee meetings, bank records, invoices and contracts etc.) and all employees of the entity. The auditor has a right of access to banks, consultants, contractors and other persons or firms engaged by the project management. If an auditor may not have unrestricted access to any records, person or location during the course of the audit, this restriction should be clearly defined, with reasons, Page 16 of 41

17 Annex 1: Audit Services Required The audit work should include the review of work plans, progress reports, project resources, project budgets, project expenditure, project delivery, recruitment, operational and financial closing of projects (if applicable) and disposal or transfer of assets. To this effect, the scope of the audit shall cover the following areas as they are performed at the level of the project: Human resources The audit work shall cover the competitiveness, transparency, fairness and effectiveness of the recruitment and hiring of personnel and include performance appraisal, attendance control, calculation of salaries and entitlements, payroll preparation and payment, and management of personnel records. Finance The audit work shall cover the adequacy of the accounting and financial operations and reporting systems. These include budget control, cash management, certification and approving authority, receipt of funds, and disbursement of funds, recording of all financial transactions in expenditure reports, records maintenance and control. Procurement The audit work shall cover the competitiveness, transparency and effectiveness of the procurement activities of the project in order to ensure that the equipment and services purchased meet the requirement of either the government (or NGO) or UNDP and include the following: As applicable, delegations of authorities, procurement thresholds, call for bids and proposals, evaluation of bids and proposals and approval/signature of contracts and purchase orders; Receiving and inspection procedures to determine the conformity of equipment with the agreed specifications and, when applicable, the use of independent experts to inspect the delivery of highly technical and expensive equipment Evaluation of the procedures established to mitigate the risk of purchasing equipment that do not meet specifications or is later proven to be defective; Management and control over the variation orders. The audit work in the area of procurement shall also cover the use of different modalities of consultants/ consulting firms and the adequacy of procedures to obtain fully qualified and experienced personnel and assessment of their work before final payment is made. The audit will work in the area of procurement concentrating on the proper use of funds ensuring best value for money. Asset Management The audit work shall cover equipment (typically vehicles and office equipment) purchased for use of the project. The procedures of purchases, and the actual for receipt, storage, and disposal of all project equipments purchased/obtained during the life of the project shall also be reviewed. Cash Management The audit work shall cover all cash funds held by the project and review procedures for safeguarding of cash. Page 17 of 41

18 Follow-up Action Plan The audit work shall cover the assessment and certification of Follow-up Action Plans for prior year recommendations. The deadline for submission of the certified prior year (FY2007) action plans is also 20 April Develop an action plan for the year 2008 to address the audit recommendations that caused qualified, adverse or disclaimer audit opinions and indicate corrective actions to be taken or planned. General Administration The audit work shall cover travel activities, vehicle management, shipping services, office premises and lease management, office communications, and records maintenance. Information System The audit work shall cover the information and communication systems and the control and security of equipment and data. Scope Limitation The above scope shall cover those transactions performed at the level of the project and transactions/actions that are performed by the UNDP office at the request and on behalf of the project are to be included in the audit scope. Page 18 of 41

19 Annex 2: Qualifications of an Auditor The Auditor must be a registered Chartered Accountant firm practicing in accordance with the legal requirement in Cambodia. The auditor must be completely impartial and independent from all aspects of management or financial interests in the entity being audited. The auditor should not, during the period covered by the audit nor during the undertaking of the audit, be employed by, serve as director for, or have any financial or close business relationships with any senior participant in the management of the entity. It may be appropriate to remind an auditor of any existing statutory requirements relating to independence and to require an auditor to disclose any relationship that might possibly compromise his/her independence. The auditor should be experienced in applying ISA (International Standards of Auditing) for the audit. The auditor must employ adequate staff with appropriate professional qualifications and suitable experience with ISA, including experience in auditing the accounts of entities comparable in size and complexity to the entity being audited. Curriculum vitae (CVs) should be provided to the client by the principal of the firm of auditors who would be responsible for signing the opinion, together with the CVs of managers, supervisors and key personnel proposed as part of the audit team. It would be appropriate to indicate required/minimum professional qualifications necessary for the senior auditors/principals responsible for the audit. CVs should include details on audits carried out by the applicable staff, including ongoing assignments indicating capability and capacity to undertake the audit. Page 19 of 41

20 Annex 3: Sample Audit Report (FOR AN UNQUALIFIED OPINION) Auditor's report to: The and The Resident Representative, UNDP Cambodia a) Certification of Statement of Expenditure We have audited the accompanying Statement of Expenditure ( the statement ) of the UNDP project number [Atlas Award #] for the period 1 January 2008 to 31 December The statement is the responsibility of the management of the project. Our responsibility is to express an opinion on the statement based on our audit. We conducted our audit in accordance with International Standards of Auditing. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the statement is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the statement. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the statement. We believe our audit provides a reasonable basis for our opinion. In our opinion, the statement of expenditure presents fairly, in all material respects the expenditure of [insert amount in US$] incurred by the project for the period 1 January 2008 to 31 December 2008 in accordance with UNDP accounting requirements. b) Certification of Statement of Assets and Equipment We have audited the accompanying Statement of Assets and Equipment ( the statement ) of the UNDP project number [Atlas project #] as at 31 December The statement is the responsibility of the management of the project. Our responsibility is to express an opinion on the statement based on our audit. We conducted our audit in accordance with International Standards of Auditing. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the statement is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the statement. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the statement. We believe our audit provides a reasonable basis for our opinion. In our opinion, the statement of assets and equipment presents fairly, in all material respects the inventory balance of the project amounting to [insert amount in US$] as at 31 December 2008 in accordance with UNDP requirements. c) Certification of Statement of Cash Position We have audited the accompanying Statement of Cash Position ( the statement ) of the UNDP project number [Atlas project #] as at 31 December The statement is the responsibility of the management of the project. Our responsibility is to express an opinion on the statement based on our audit. We conducted our audit in accordance with International Standards of Auditing. Those standards require that we plan and perform the audit to obtain reasonable assurance Page 20 of 41

21 about whether the statement is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the statement. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the statement. We believe our audit provides a reasonable basis for our opinion. In our opinion, the statement of cash position presents fairly, in all material respects the cash balance of the project amounting to [insert amount in US$] as at 31 December 2008 in accordance with UNDP requirements. This report is intended solely for the information and use of UNDP and the Government of Cambodia. Date: ADDRESS AUDITOR'S SIGNATURE Note: Audit opinions must be one of the following: (a) qualified, (b), unqualified, (c) adverse, or (d) disclaimer. If the audit opinion is other than unqualified the audit report must describe both the nature and amount of the possible effects on the financial statements. A definition of audit opinions is provided in Annex 4. Page 21 of 41

22 Annex 4: Definition of Audit Opinions Unqualified (Clean) Opinion An unqualified opinion should be expressed when the auditor concludes that the financial statements give a true and fair view or are presented fairly, in all material respects, in accordance with the applicable financial reporting framework. Modified Unqualified or Emphasis of Matter paragraph In certain circumstances, an auditor s report may be modified by adding an emphasis of matter paragraph to highlight a matter affecting the financial statements which is included in a note to the financial statements that more extensively discusses the matter. The emphasis of matter paragraph would ordinarily refer to the fact that the auditor s opinion is not qualified in this respect, by adding a paragraph to highlight a material matter regarding an ongoing concern or problem or a significant uncertainty. An uncertainty is a matter whose outcome depends on future actions or events not under the direct control of the entity but that may affect the financial statements. Qualified Opinion A qualified opinion should be expressed when the auditor concludes that an unqualified opinion cannot be expressed but that the effect of any disagreement with management, or limitation on scope is not so material and pervasive as to require an adverse opinion or a disclaimer of opinion. A qualified opinion should be expressed as being except for the effects of the matter to which the qualification relates. Disclaimer of opinion A disclaimer of opinion should be expressed when the possible effect of a limitation on scope is so material and pervasive that the auditor has not been able to obtain sufficient appropriate audit evidence and accordingly is unable to express an opinion on the financial statements. Adverse An adverse opinion should be expressed when the effect of a disagreement is so material and pervasive to the financial statements that the auditor concludes that a qualification of the report is not adequate to disclose the misleading or incomplete nature of the financial statements. Page 22 of 41

23 Annex 5: Categorization of Audit Findings by Risk Severity High Medium Low Action that is considered imperative to ensure that UNDP is not exposed to high risks (i.e. failure to take action could result in major consequences and issues). Action that is considered necessary to avoid exposure to significant risks (i.e. failure to take action could result in significant consequences). Action that is considered desirable and should result in enhanced control or better value for money. Page 23 of 41

24 Annex 6: Classification of possible causes of Audit Findings Compliance Guidelines Guidance Human error Resources Failure to comply with prescribed UNDP regulations, rules and procedures Absence of written procedures to guide staff in the performance of their functions Inadequate or lack of supervision by supervisors Mistakes committed by staff entrusted to perform assigned functions Lack of or inadequate resources (funds, skills, staff, etc.) to carry out an activity or function Page 24 of 41

25 APPENDIX II: Proposal Submission Form TO: United Nations Development Programme #53, Street 51, Boeung Keng Kang Phnom Penh, Cambodia Having examined the Solicitation Documents, the receipt of which is hereby duly acknowledged, we the undersigned, offer to supply the required services for the sum as may be ascertained in accordance with the Price Component attached herewith and made part of this proposal. We undertake, if our proposal is accepted, to commence and complete delivery of all items in the contract within the time frame stipulated. We understand that you are not bound to accept any proposal you may receive and that a binding contract would result only after final negotiations are concluded on the basis of the Technical and Price Components proposed. Dated this day of 200. Signature (in the Capacity of) Duly authorized to sign proposal for and on behalf of: Page 25 of 41

26 APPENDIX III - Draft Form of Long-term Agreement (LTA) The following is the draft of the form of LTA under which the services would be performed, including the "General Conditions for UNDP Contracts for Professional Services". LONG TERM AGREEMENT FOR THE PROVISION OF SERVICES TO THE UNITED NATIONS DEVELOPMENT PROGRAMME This Long Term Agreement is made between the United Nations Development Programme, a subsidiary organ of the United Nations, having its headquarters at 1 UN Plaza, New York, NY (hereinafter UNDP ) and (hereinafter called Contractor ) with its headquarters at. WHEREAS, UNDP desires to enter into a Long Term Agreement for the provision of services by the Contractor to UNDP, pursuant to which UNDP country offices world-wide can conclude specific contractual arrangements with the Contractor, as provided herein; WHEREAS pursuant to the Request for Proposal [to complete] the offer of the Contractor was accepted; NOW, THEREFORE, UNDP and the Contractor (hereinafter jointly the Parties) hereby agree as follows: Article 1: SCOPE OF WORK 1. The Contractor shall provide the types of services and deliverables, which are listed in Annex 1 hereto ( Services/Terms of Reference ), as and when negotiated by UNDP headquarters or a UNDP country office and reflected in a contract for professional services, in the form attached hereto as Annex Such Services shall be at the discount prices listed in Annex 3. The prices shall remain in effect for a period of two years from Entry into Force of this Agreement. 3. UNDP does not warrant that any quantity of Services will be purchased during the term of this Agreement, which shall be for two years. Article 2: CHANGES IN CONDITION 4. In the event of any advantageous technical changes and/or downward pricing of the Services during the duration of this Agreement, the Contractor shall notify UNDP immediately. UNDP shall consider the impact of any such event and may request an amendment to the Agreement. Article 3: CONTRACTOR'S REPORTING 5. The Contractor will report semi-annually to UNDP on the Services provided to UNDP, including its country offices. Article 4: GENERAL AND SPECIAL TERMS AND CONDITIONS 6. The standard UNDP General Conditions for Professional Services, attached as Annex 4, shall apply to this Agreement, and any subsequent contracts concluded in accordance with paragraph 1 above. Page 26 of 41

27 Article 5: ACCEPTANCE 7. This Agreement supersedes all prior oral or written agreements, if any, between the Parties and constitutes the entire agreement between the parties with respect to the provision of the Services hereunder. 8. This Agreement shall enter into force on the date of the last signature by the representatives of the Parties and shall remain in force for a period of two years, and may be extended for [one additional] year by mutual agreement of the Parties. IN WITNESS WHEREOF, the duly authorized representative of the PARTIES have signed this agreement. For and on behalf of: UNITED NATIONS DEVELOPMENT PROGRAMME Date: Date: Page 27 of 41

28 Annex 1: Terms of Reference Prepared by UNDP. As detailed as possible. Please refer to OLPS website to document Terms of Reference. The terms of reference specify in detail the scope of work linking activities to deliverable in a specific time frame. Annex 2: Contract for Professional Services Please see template OLPS website. The detailed contractual agreement that specifies rights and obligations of the contracting parties. Annex 3: Discount prices. To be provided by contracted company. Annex 4: UNDP General Conditions (see template OLPS website) Applicable to all contracts. Page 28 of 41

29 Part A: UNDP General Conditions for UNDP Contracts for Professional Services (New Update) 1.0 LEGAL STATUS: The Contractor shall be considered as having the legal status of an independent contractor vis-à-vis the United Nations Development Programme (UNDP). The Contractor s personnel and sub-contractors shall not be considered in any respect as being the employees or agents of UNDP or the United Nations. 2.0 SOURCE OF INSTRUCTIONS: The Contractor shall neither seek nor accept instructions from any authority external to UNDP in connection with the performance of its services under this Contract. The Contractor shall refrain from any action that may adversely affect UNDP or the United Nations and shall fulfill its commitments with the fullest regard to the interests of UNDP. 3.0 CONTRACTOR'S RESPONSIBILITY FOR EMPLOYEES: The Contractor shall be responsible for the professional and technical competence of its employees and will select, for work under this Contract, reliable individuals who will perform effectively in the implementation of this Contract, respect the local customs, and conform to a high standard of moral and ethical conduct. 4.0 ASSIGNMENT: The Contractor shall not assign, transfer, pledge or make other disposition of this Contract or any part thereof, or any of the Contractor's rights, claims or obligations under this Contract except with the prior written consent of UNDP. 5.0 SUB-CONTRACTING: In the event the Contractor requires the services of sub-contractors, the Contractor shall obtain the prior written approval and clearance of UNDP for all sub-contractors. The approval of UNDP of a sub-contractor shall not relieve the Contractor of any of its obligations under this Contract. The terms of any sub-contract shall be subject to and conform to the provisions of this Contract. 6.0 OFFICIALS NOT TO BENEFIT: The Contractor warrants that no official of UNDP or the United Nations has received or will be offered by the Contractor any direct or indirect benefit arising from this Contract or the award thereof. The Contractor agrees that breach of this provision is a breach of an essential term of this Contract. Page 29 of 41

30 7.0 INDEMNIFICATION: The Contractor shall indemnify, hold and save harmless, and defend, at its own expense, UNDP, its officials, agents, servants and employees from and against all suits, claims, demands, and liability of any nature or kind, including their costs and expenses, arising out of acts or omissions of the Contractor, or the Contractor's employees, officers, agents or sub-contractors, in the performance of this Contract. This provision shall extend, inter alia, to claims and liability in the nature of workmen's compensation, products liability and liability arising out of the use of patented inventions or devices, copyrighted material or other intellectual property by the Contractor, its employees, officers, agents, servants or sub-contractors. The obligations under this Article do not lapse upon termination of this Contract. 8.0 INSURANCE AND LIABILITIES TO THIRD PARTIES: 8.1 The Contractor shall provide and thereafter maintain insurance against all risks in respect of its property and any equipment used for the execution of this Contract. 8.2 The Contractor shall provide and thereafter maintain all appropriate workmen's compensation insurance, or the equivalent, with respect to its employees to cover claims for personal injury or death in connection with this Contract. 8.3 The Contractor shall also provide and thereafter maintain liability insurance in an adequate amount to cover third party claims for death or bodily injury, or loss of or damage to property, arising from or in connection with the provision of services under this Contract or the operation of any vehicles, boats, airplanes or other equipment owned or leased by the Contractor or its agents, servants, employees or subcontractors performing work or services in connection with this Contract. 8.4 Except for the workmen's compensation insurance, the insurance policies under this Article shall: Name UNDP as additional insured; Include a waiver of subrogation of the Contractor's rights to the insurance carrier against the UNDP; Provide that the UNDP shall receive thirty (30) days written notice from the insurers prior to any cancellation or change of coverage. 8.5 The Contractor shall, upon request, provide the UNDP with satisfactory evidence of the insurance required under this Article. 9.0 ENCUMBRANCES/LIENS: The Contractor shall not cause or permit any lien, attachment or other encumbrance by any person to be placed on file or to remain on file in any public office or on file with the UNDP against any monies due or to become due for any work done or Page 30 of 41

31 materials furnished under this Contract, or by reason of any other claim or demand against the Contractor TITLE TO EQUIPMENT: Title to any equipment and supplies that may be furnished by UNDP shall rest with UNDP and any such equipment shall be returned to UNDP at the conclusion of this Contract or when no longer needed by the Contractor. Such equipment, when returned to UNDP, shall be in the same condition as when delivered to the Contractor, subject to normal wear and tear. The Contractor shall be liable to compensate UNDP for equipment determined to be damaged or degraded beyond normal wear and tear COPYRIGHT, PATENTS AND OTHER PROPRIETARY RIGHTS: 11.1 Except as is otherwise expressly provided in writing in the Contract, the UNDP shall be entitled to all intellectual property and other proprietary rights including, but not limited to, patents, copyrights, and trademarks, with regard to products, processes, inventions, ideas, know-how, or documents and other materials which the Contractor has developed for the UNDP under the Contract and which bear a direct relation to or are produced or prepared or collected in consequence of, or during the course of, the performance of the Contract, and the Contractor acknowledges and agrees that such products, documents and other materials constitute works made for hire for the UNDP To the extent that any such intellectual property or other proprietary rights consist of any intellectual property or other proprietary rights of the Contractor: (i) that pre-existed the performance by the Contractor of its obligations under the Contract, or (ii) that the Contractor may develop or acquire, or may have developed or acquired, independently of the performance of its obligations under the Contract, the UNDP does not and shall not claim any ownership interest thereto, and the Contractor grants to the UNDP a perpetual license to use such intellectual property or other proprietary right solely for the purposes of and in accordance with the requirements of the Contract At the request of the UNDP; the Contractor shall take all necessary steps, execute all necessary documents and generally assist in securing such proprietary rights and transferring or licensing them to the UNDP in compliance with the requirements of the applicable law and of the Contract Subject to the foregoing provisions, all maps, drawings, photographs, mosaics, plans, reports, estimates, recommendations, documents, and all other data compiled by or received by the Contractor under the Contract shall be the property of the UNDP, shall be made available for use or inspection by the UNDP at reasonable times and in reasonable places, shall be treated as confidential, and shall be delivered only to UNDP authorized officials on completion of work under the Contract. Page 31 of 41