Catholic Relief Services Liberia

Physical Inventory Count for GF Malaria health products at the Central Medical Stores

Scope of Work for Participation of External Audit firm

Background:

Catholic Relief Services (CRS) has been given the mandate by the Liberia Coordinating Mechanism (LCM) and the Global Fund (GF) to serve as the principal recipient for the remaining period of the Global Fund NFM3 grant cycle on the Malaria/HSS Grant. The grant period is from December 1, 2022, and ends on June 30, 2024, in which the Ministry of Health (MoH) is a sub-recipient. As part of the grant implementation, CRS procures antimalarials and consumables for the Liberia health sector to treat the general population at risk for malaria. As part of the grant start-up activities, and capacity assessment recommendations, CRS is required to conduct a joint inventory of GF Malaria Health Products at the Central Medical Stores with MOH. To improve inventory transparency and accountability, CRS is proposing to engage an independent external auditor to observe physical stock count at the Central Medical Store (CMS) and issue a report.

The eligible audit firm should meet the following criteria:

1. Certified and registered to operate by governing law of the Republic of Liberia (e.g.: Licensed with the LICPA, valid, tax clearance certificate, LBR Certificate).
2. Qualified under the United States Government’s “Yellow Book” audit (e.g.: Proof of Certification – Continuing Professional Education, etc.).
3. Prior experience in undertaking physical inventory count for a Global Fund project will be an added advantage (e.g.: History of years of experience performing similar tasks including references – email addresses, phone numbers, etc.).
4. Have adequate experienced staff for the assignment (e.g.: evidence of professional certifications, years of experience performing similar).

Objectives:

The auditor is required to observe the inventory physical count and determine the following:

• The physical existence of the inventory
• The physical condition of the inventory
• The effectiveness of the physical count procedures
• The validity and completeness of receiving & issuing documents and inventory records

Procedure:

1. Representatives of the audit firm will attend the physical count to observe the counting process and the diligence to capture relevant data in the count sheets.
2. The auditors will familiarize themselves with the warehouse layout, stacking process, documentation and count sheets before the count commences.
3. The count includes all malaria health products procured with Global Fund resources in the warehouse.
4. Perform cut-off test on receiving, dispatch, and warehouse transfer documents and verify against the warehouse registers and records.
5. Check the composition of the inventory count team. Per standard practice, staff responsible for warehouse management should not be part of the count team to ensure objectivity. However, the warehouse management staff can be present during the count to respond and clarify to queries raised by the count team. Verify that the role of the count team is well-defined and understood by all team members.
6. Observe the inventory count and ensure to countersign on count sheets to attest to their observation of the physical count.
7. Note the general warehouse management situations such as stacking, existence and functioning of warehouse safety and security equipment.
8. Ensure the proper use and monitoring of inventory count sheets by the count team.
9. Ensure that the movement of goods is suspended during the count or sufficient care is exercised if movement is allowed due to management-approved and compelling reasons.
10. Count is done for all malaria health products procured under the GF grant in the warehouse.
11. Identify items/goods held on behalf of third parties/other donors and document the count separately.
12. Make a final tour of the warehouse to make sure that all items are counted before concluding the count.
13. Reconcile the physical count with the system records from the warehouse management system.
14. Carry out a random selection of shipping documents, bill of lading, and packing lists; and compare quantities shipped as per these documents with quantities in inventory records.
15. Examine any discrepancies identified during the count and assess the reconciliation with inventory records. Where there are discrepancies, recount the affected inventory items until satisfied with the count result.
16. To avoid bias, the count team will be required to use a blind count procedure (in other words, a physical inventory count of health products will be conducted at the various locations before comparing to the stock balance in the system records)
    

Duration:

The physical count is expected to last for a duration of one week. (Dates to be confirmed following engagement of a firm).

Deliverables:

1. Issue a report detailing their observations and recommendations, on the following:

• Warehouse management best practices
• Commodity type, unit of measurement, warehouse location, donor source, packing list and other available identifications.
• Indicate items with discrepancies between physical counts, and records (system and other records available) and indicate possible root causes.
• Indicate items in poor physical condition, damaged or unfit for distribution or human consumption.
• Report shortages or overages and other irregularities identified during the count and reconciliation with inventory records.

1. Submit a draft report to CRS management for review and comments (due date to be agreed upon following engagement of the external audit firm).

• Incorporate CRS management comments into the report and submit the final report (due date to be agreed upon following engagement of the external audit firm).

1. CRS to submit a final report to the Global Fund CT.
2. Send one original copy of the report directly to CRS external auditors.

Response Date for Proposals:

To be considered for selection, audit firm proposals both technical and financial for the service mentioned must be received separately in a sealed envelope not later than close of business on May 17, 2023, at CRS office: C-140, 16th Street, Gardner Avenue, Sinkor, Monrovia, Liberia.