Financial Audit Guidelines

Transcription

1 Financial Audit Guidelines May 2011 Revised November 2011

2 General information 1.1 Purpose The purpose of these guidelines is to define the scope of financial audits and to serve as a steering document for their implementation. The guidelines follow the financial audit requirements of the Swedish International Development Cooperation Agency (Sida). 1.2 Scope The audit plan covers audits of projects financed by Spider. The Spider center itself is audited annually by external auditors, as per agreement with Sida. 1.3 Program overview The Swedish Program for ICT in Developing Regions (Spider) is a resource center for ICT for Development (ICT4D). Spider was established in 2004 and is primarily financed by the Swedish International Development Cooperation (Sida), with complementary funding from Stockholm University. The center is administered by the Department of Computer and Systems Sciences (DSV) at Stockholm University. Spider functions like a node in a network of actors from academia, public sector, private sector, and civil society. Networking and brokering of knowledge and expertise is combined with support to innovative ICT4D projects in partner countries. Type and scope of financial grants: Catalytic seed funding (project grants), program coordination, capacity development, research components, research projects, travel grants, conferences, and workshops Financial grants are generally limited to SEK Any contributions above this amount are subject to approval by the Spider Board. 1.4 Point of contact The Director of Spider has overall responsibility for the implementation of financial audits. The implementation of financials audit is managed by Spider project staff and collaborating partners. Administrative staff at DSV/SU is also involved if and when relevant. 2

3 2.0 Audit Process 2.1 Type of audit These guidelines cover financial audits. Ongoing monitoring and evaluation of projects is the responsibility of Spider project staff and collaborating partners as stipulated in separate agreements. 2.2 Audit standards Financial audits shall be carried out in accordance with international audit standards (ISA) issued by the International Federation of Accountants (IFAC). The audit shall be carried out by an external, independent and qualified auditor (Certified Public Accountant/Authorized Public Accountant) and follow the ISA 800/805 standard. Swedish government agencies may use their internal auditor, as long as they fulfill the audit requirements. Spider shall approve beforehand (i.e. prior to audit start) the selection of auditor. The auditor must be able to provide proof of qualifications, e.g. membership of IFAC affiliated organization. Audit costs shall be paid by the party and be included as part of their budgets. In some cases, Spider may partially coordinate and cover the costs of financial audits, in which case this will be stipulated in separate agreements with partner organizations. Financial audits shall follow the Terms of Reference specified in Annex I. The Organization is responsible for communicating the Terms of Reference to the auditor. 2.3 Scope The party receiving financial grants from Spider is responsible that the use of funds is audited annually by an external, independent and qualified auditor. Swedish government agencies are allowed to use their internal auditor, as specified above. Audit shall be conducted in accordance with internationally acknowledged auditing standards, as specified above. In cases where the party transfers grants to other recipient local organizations, the local organization shall be responsible for a grant being annually audited in accordance with requirements given above. An unbroken chain of audit reports shall exist up to and including the final grant recipient organization. Current audit directions shall where applicable be passed on to the organization immediately following in the chain. 3

4 2.4 Reporting Spider expects to receive a report consisting of an auditor s opinion (auditor s report); letter from the auditor to the project management regarding the audit and the auditor s findings, comments and recommendations (management letter); and the management s response to the auditor s letter (management response). These reports should be submitted within the timeline specified below. Auditors shall express an opinion in accordance with ISA 800/805 in their reports whether the submitted financial report corresponds with the organization accounting records and Spider directions for financial reporting. Auditor s report shall contain the audit findings made by auditor during auditing process. Auditor s report shall also contain information on whether the organization has taken reasonable steps with regard to earlier audit recommendations. The party shall submit their auditor s report to Spider in connection with submission of their annual financial report to Spider as of agreement. A response containing the organization standpoint and planned measures shall be drawn up by the party and sent to Spider together with the auditor s report. Unless otherwise agreed, the auditor s report must be submitted to Spider no later than 31 January in the year following the receipt of the financial grant, together with financial and project reports as stipulated in the agreement with Spider. The organization s response to the auditor s report shall be submitted to Spider at the same time unless otherwise agreed. 2.5 Supplementary audits Spider may demand financial audits supplementary to the process outlined here. The party shall collaborate with and assist Spider in the case of any supplementary audit, follow-up and financial studies requested by Spider. Spider has the right to visit, audit and/or evaluate each project or activity financed partially or entirely with grants by Spider. Visits, audit and evaluation should be preceded by consultation with the organization concerned. Spider does retain the right to carry out unannounced spot checks. 2.6 Revisions These financial audit guidelines may be revised and updated if and when necessary. Any revisions will be reported to Sida. 4

5 Annex I - Terms of Reference for Annual Audit I. Introduction Brief project background information: [X] wishes to engage the services of an audit firm for the purpose of auditing the [project/program] [name], as stipulated in the agreement between [X] and [Spider/Stockholm University]. The audit shall be carried out in accordance with international audit standards issued by International Organization Federation of Accountants (IFAC). The audit shall be carried out by an external, independent and qualified auditor (Certified Public Accountant/Authorized Public Accountant). II. Objectives and scope of the audit Audit the Financial report for period [January-December 20XX] as submitted to Spider and express an audit opinion according to ISA 800/805 on whether the financial report of X [project/program] submitted to Spider, is in accordance with [X]s accounting records and Spider s requirements for financial reporting. Examine, assess and report on compliance with the terms and conditions of the agreement [agreement articles] and applicable laws and regulations regarding accounting and taxes. The auditor shall examine on a test basis that there is supporting documentation related to reported expenditure. The size of the test shall be based on the auditor's risk analysis and that should be stated in the report. The auditor shall report the identified amount in case there is any missing supporting documentation. Examine if [X] has agreements with the organizations to which it channels parts of the funds and whether [X] has followed Spider s audit requirements and have acted on received audit reports from these organizations. III. The reporting The reporting shall contain details regarding used audit methodology and the scope of the audit. The reporting shall contain an assurance that the audit was performed in accordance with international standards and by a qualified auditor. 5

6 The reporting shall contain the responsible auditor's signature (not just the audit firm) and title. The reporting from the auditor shall contain the audit findings made during the audit process. It shall state which measures that have been taken as a result of previous audits and whether measures taken have been adequate to deal with reported shortcomings. The auditor shall make recommendations to address any weaknesses identified. The recommendations should be presented in priority. The reporting shall not exceed 20 pages j be written in English and be presented to [X] in [X] copies and one digital for onward transmission to Spider, within [X] weeks after the last visit. Please also attach an annual report or other reports/documentations that might be relevant 6