Elections Coordinating Committee

Request for Proposal

Auditing Service: RFP-ECC-2024-05-00

Issued: May 13, 2024,

ECC-USAID-Liberia Independent Domestic Elections Observation Project

Rose Garden Plaza, Crown Hill Broad Street,

Monrovia, Liberia

Introduction.

The Elections coordinating committee (ECC), established in 2010, is Liberia’s largest domestic election observation network. As a coalition, the ECC is composed of seven Civil Society Organizations (CSOs) that are occupying the seats of the ECC Board of Directors and owners’ councils. Each board member is a leader within the Liberia CSO network that is making an impact in the areas of peace building, democracy, human rights and good governance because of their diverse competencies, experience and expertise in delivering programs with women, youth, traditional leaders, policy makers and the media as their direct beneficiaries. The ECC governance structure includes an owner’s council, the board of directors, and a secretariat.

Project Background

The “Liberia Independent Domestic Election Observation (LIDEO)” activity is a USAID funded activity implemented by the Elections Coordinating Committee with the purpose of enhancing voters’ confidence in electoral processes and their results. LIDEO activity supported ECC the country preparedness the 2023 for rounds of election and the post-electoral period until all electoral complaints are adjudicated. Following the 2023 general and senatorial elections the activities are supporting the strengthening of elections through reporting on the implementation of recommendations and conducting advocacy activities.

OBJECTIVES

The objective of this engagement is to conduct a financial audit of ECC General Purpose Financial Statement (GPFS) in accordance with International Auditing Standards (IAS). The financial audit must include (1) a specific audit of all ECC programs, and (2) an audit of the general-purpose financial statements on an organization-wide basis (balance sheet, income statement, and cash flow statement).

The GPFS are the financial statement to be audited that presents ECC revenues, costs incurred, cash balance of funds, assets and liabilities. USAID funds included in the general purpose financial statements should be reconciled by a note to the financial statements or the fund accountability statement. All currency amounts in the General-purpose statement.

Audit of General Purpose Financial Statements

A financial audit of ECC general purpose financial statements on an organization-wide basis. The audit must be performed in accordance with generally accepted auditing standards, auditing standards that have been prescribed by the laws of the country or adopted by the Liberia Institute of Public Accountants, or of the International Federation of Accountants. The objective of this audit is to express an opinion on whether those statements present fairly, in all material respects, the financial position of the recipient at year-end, and the results of its operations and cash flow for the year then ended, in conformity with generally accepted accounting principles.

AUDIT SCOPE

The auditor should use the following steps as the basis for preparing audit programs. They are not considered all-inclusive or restrictive in nature and do not relieve the auditor from exercising due professional care and judgment. The steps should be modified to fit local conditions and specific program design, implementation procedures, and agreement provisions which may vary from program to program. Any limitations in the scope of work must be communicated as soon as possible to the ECC office.

Pre-Audit Steps

Following is a list of documents applicable to different USAID programs. The auditor should review the applicable documents considered necessary to perform the audit:

1. The agreements between USAID and ECC.
2. The sub agreements between ECC and other implementing entities, as applicable.
3. Contracts and subcontracts with third parties, if any.
4. All program financial and progress reports; and charts of accounts, organizational charts; accounting systems descriptions; procurement policies and procedures; and receipt, warehousing and distribution procedures for materials, as necessary to successfully complete the required work.
5. Any previous audits, financial reviews, assessments, surveys, etc., that directly relate to the objectives of the audit.

Internal Controls

The auditors must obtain a sufficient understanding of the entity and its environment, including its internal control, to assess the risk of material misstatement of the financial statements whether due to error or fraud, and to design the nature, timing, and extent of further audit procedures. In obtaining this understanding, the auditor must understand the design of the internal control related to ECC programs and determine whether they have been placed in operation. The General Accepted Auditing Standards for Internal Control may prove helpful in assessing recipient internal control. The internal control must be described in the audit documentation.

The auditors must prepare the report required by the GAAS, identifying any significant deficiencies or material weaknesses in the design or operation of internal control. A material weakness is a deficiency, or combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented or detected and corrected on a timely basis. A significant deficiency is a deficiency, or combination of deficiencies, in internal control that is less severe than a material weakness that is important enough to merit attention by those charged with governance. Any significant deficiencies or material weaknesses must be set forth in the report as “findings” Any other matters related to internal control – such as suggestions for improving operational or administrative efficiency or internal control, or control deficiencies that are not significant deficiencies or material weaknesses – may be reported in a separate management letter to the recipient and referred to in the report on internal control.

The major internal control components to be studied and evaluated include, but are not limited to, the controls related to each revenue and expense account on the fund accountability statement. The auditors must:

1. Obtain an understanding of the design of the internal control related to ECC programs and determine whether they have been placed in operation.

2. Assess inherent risk and control risk, and determine detection risk. Inherent risk is the susceptibility of an assertion, such as an account balance, to a misstatement that could be material, either individually or when aggregated with other misstatements, assuming there are no related controls. Control risk is the risk that a misstatement that could occur in a relevant assertion and that could be material, either individually or when aggregated with other misstatements, will not be prevented or detected on a timely basis by the entity’s internal control. Detection risk is the risk that the auditor will not detect a material misstatement that exists in an assertion. Detection risk is based upon the effectiveness of an auditing procedure and the auditor’s application of that procedure.

3. Summarize the risk assessments for each assertion in a single document included in the audit documentation. The risk assessments should consider the following broad categories under which each assertion should be classified: (a) classes of transactions and events for the period under audit (occurrence, completeness, accuracy, cutoff, and classification), (b) account balances at the period end (existence, rights, obligations, completeness, valuation, and allocation), and (c) presentation and disclosure (occurrence, rights, obligations, completeness, classification, understandability, accuracy, and valuation). At a minimum, the audit documentation should identify the name of the account or assertion, the account balance or the amount represented by the assertion, the assessed level of inherent risk (high, moderate, or low), the assessed level of control risk (high, moderate, or low), the combined risk (high, moderate, or low), and a description of the nature, extent, and timing of the tests performed based on the combined risk. Summary audit documentation should be cross-indexed to the supporting audit documentation that contains the detailed analysis of the fieldwork. If control risk is evaluated at less than the maximum level (high), then the basis for the auditor’s conclusion must be described in the audit documentation.

If the auditors assess control risk at the maximum level for assertions related to material account balances, transaction classes, and disclosure components of financial statements when such assertions are significantly dependent upon computerized information systems, the auditors must describe in the audit documentation the basis for such conclusions by addressing (i) the ineffectiveness of the design and/or operation of controls, or (ii) the reasons why it would be inefficient to test the controls.

4. Evaluate the control environment, the adequacy of the accounting systems, and control procedures. Emphasize the policies and procedures that pertain to the recipient’s ability to record, process, summarize, and report financial data consistent with the assertions embodied in each account of the fund accountability statement. This should include, but not be limited to, the control systems for:

1. ensuring that charges to the program are proper and supported;

1. managing cash on hand and in bank accounts;

1. procuring goods and services;

1. managing inventory and receiving functions;

1. managing personnel functions such as timekeeping, salaries, and benefits;

1. managing and disposing of commodities (such as supplies, materials, vehicles, equipment, food products, tools, etc.) purchased by ECC;

1. ensuring compliance with agreement terms and applicable laws and regulations that collectively have a material impact on the fund accountability statement. The results of this evaluation must be contained in the audit documentation section described in this statement of work and presented in the compliance report.

5. Evaluate internal control established to ensure compliance with cost sharing/counterpart contribution requirements, if applicable, including both provision and management of the contributions.

6. Include in the study and evaluation other policies and procedures that may be relevant if they pertain to data the auditor uses in applying auditing procedures. This may include, for example, policies and procedures that pertain to non-financial data that the auditor uses in analytical procedures.

In fulfilling the audit requirement relating to an understanding of the internal control and assessing the level of control risk, the auditor must follow, at a minimum, the guidance contained in GAAS and IAS.

Compliance with Agreement Terms and Applicable Laws and Regulations

In fulfilling the audit requirement to determine compliance with agreement terms and applicable laws and regulations related to ECC programs, the auditors must, at a minimum, follow guidance contained in GAAS, PFM regulations, Revenue and Finance Laws of Liberia, Labor laws of Liberia and any applicable laws of Liberia required to be followed by Non for profit organization. The compliance review must ensure the budgets were provided and accounted for in accordance with the terms of the agreements. The auditor’s report on compliance must set forth as findings all material instances of noncompliance, defined as instances that could have a direct and material effect on the fund accountability statement. Nonmaterial instances of noncompliance should be included in a separate management letter to the recipient and referred to in the report on compliance.

The auditor’s report should include all conclusions that a fraud or illegal act either has occurred or is likely to have occurred. In reporting material fraud, illegal acts, or other noncompliance, the auditors should place their findings in proper perspective. To give the reader a basis for judging the prevalence and consequences of these conditions, the instances identified should be related to the universe or the number of cases examined and is quantified in terms of U.S. dollars, if appropriate. In presenting material fraud, illegal acts, or other noncompliance, auditors must follow the reporting standards contained in GAAS.

In planning and conducting the tests of compliance the auditors must:

1. Identify the agreement terms and pertinent laws and regulations and determine which of those, if not observed, could have a direct and material effect on the fund accountability statement. The auditors must:

List all standard and program-specific provisions contained in the agreements that cumulatively, if not observed, could have a direct and material effect on the fund accountability statement; assess the inherent and control risk that material noncompliance could occur for each of the compliance requirements listed in 1.a. above;

1. determines the nature, timing and extent of audit steps and procedures to test for errors, fraud, and illegal acts that provide reasonable assurance of detecting both intentional and unintentional instances of noncompliance with agreement terms and applicable laws and regulations that could have a material effect on the fund accountability statement. This must be based on the risk assessment in 1.b. above.

1. Prepares a single summary in the audit documentation that identifies each of the specific compliance requirements included in the review, the results of the inherent, control and (detection) risk assessments for each compliance requirement, the audit steps used to test for compliance with each of the requirements based on the risk assessment, and the results of the compliance testing for each requirement. The summary document should be cross-indexed to detailed audit documentation that adequately supports the facts and conclusions contained in the summary document.

1. Determine if payments have been made in accordance with agreement terms and applicable laws and regulations.
2. Identify any costs not considered appropriate, classifying and explaining why these costs are not supported.
3. Determine whether assets procured by the ECC use, exist or were used for their intended purposes in accordance with the terms of the agreements. If not, the cost of such assets must be questioned.
4. Determine whether any technical assistance and services procured by the ECC were used for their intended purposes in accordance with the agreements.
5. Determine if the amount of cost sharing funds was calculated and accounted for as required by the agreements or applicable cost principles.
6. Determine whether those who received services and benefits were eligible to receive them.
7. Determine whether ECC financial reports contain information that is supported by the books and records.

Follow-Up on Prior Audit Recommendations

The auditors must review the status of actions taken on findings and recommendations reported in prior audits and should evaluate whether the audited entity has taken appropriate corrective action to address findings and recommendations from previous engagements that could have a material effect on the financial statements. When planning the audit, auditors should ask management of the audited entity to identify previous audits, attestation engagements, financial reviews, and other studies that directly relate to the objectives of the audit, including whether related recommendations have been implemented. Auditors should use this information in assessing risk and determining the nature, timing, and extent of current audit work, including determining the extent to which testing the implementation of the corrective actions is applicable to the current audit objectives.”

The auditors must describe the scope of their work on prior audit recommendations in the summary section of the audit report. The auditors should refer to the ECC audit report for the prior period. When corrective action has not been taken and the deficiency remains unresolved for the current audit period the auditors need to briefly describe the prior finding and status and show the page reference to where it is included in the current report. If there were no prior findings and recommendations, the auditors must include a note to that effect in this section of the audit report.

Submission Details

Submission Deadline

Proposals must be received on or before June 15, 2024, at 5:00 PM GMT.

Late submissions will not be accepted.

All proposals are to be submitted following the guidelines listed below.

Telephone requests will not be honored

ECC may request additional documents after the bid deadline.

• Submission Delivery Address

Rose Garden Plaza, Crown Hill Broad Street,

Monrovia, Liberia

Email: bwilliams@eccliberia.com

Submission Questions and clarifications

Inquiries\ Questions must be received no later than June 15, 2024 @ 5PM GMT and must be submitted via email to bwilliams@eccliberia.com,

ECC will review and respond to all selected Proposals, within one week of the proposal submissions deadline.

ECC will evaluate complete bidders’ proposals to determine which proposals represent the best values to the ECC. This is an unsealed solicitation request. ECC reserved the right to negotiate with the bidders with or without discussion

Instructions to Bidders

• All Proposals have to be valid for 30 days starting from the submission date
• Delivery time; up to the bidders to decide and will be a competitive criterion of award among bids but not to exceed June 15, 2024,
• Cost quoted must include the unit price and the total price in United States Dollars.
• Payment terms and complete banking information
• Recommended service location must be in Monrovia, Liberia
• ECC reserved the right to make changes or cancel this solicitation

Bids Documents to include.

• Technical proposals
• Financial proposals
• Legal Business name
• Authorized contact including address, phone number and Email
• Proof of business registration and nationality
• Tax clearance certificate
• Current license to practice audit in Liberia
• A list of previous similar contracts completed successfully with the name and contact information of clients
• Staff to be assigned to the engagement and their respective qualification
• Approach and methodology for the audit
• Description of the firm’s capability

Award

ECC anticipates to notify the successful bidder and provide agreement for signature in May 2024

• ECC will run an open and fair competitive bidding process
• ECC may increase or decrease the level of effort

Detailed Specifications of Work

Auditing Service

These terms of reference address the requirement for an external audit of financial statements of ECC-USAID-Liberia Independent Domestic Elections Observation Project for the fiscal year ended 29 February 2024. The objective of the audit is to express an opinion as to whether the financial statements of ECC present fairly, in all material respects, the financial position, results of operations and changes in cash flow, in accordance with generally accepted accounting principles. This will be for the financial year ending February 29, 2024

ECC Management will prepare the financial statements that will be subject to the audit and make available to the Auditors.

During the engagement, the Auditor(s) should report:

1. Any significant or unusual transactions entered by ECC Secretariat that the Board of Directors should be made aware of
2. Any deficiencies in internal controls that are of sufficient importance to merit the attention of Management and/or the Board of Directors
3. Any disagreements with Management about matters which are significant to the organization’s financial statements.
4. Any lack of compliance with the Financial Management and Controls Policy
5. Any lack of compliance with financial or other relevant legislation; and/or
6. Any lack of accountability in the use and management of ECC’s assets.
7. Also, the auditor will review the Grants agreement provision and give an opinion on whether the Contractor was fully compliant to the Grants regulations.

Audit Reporting

A draft of the interim audit report should be submitted by 15th August 2024 and a final signed audit report with certified statements and a management letter by Sept 5,2023.

Proposals should include a breakdown of hours/days spent on the assignment and share the list of their staff to be assigned to the engagement.

The audits should be carried out following all International Auditing Standards (ISA).

Sufficient audit evidence should be gathered to substantiate in all material respects the accuracy of the financial statement. The audit report of the auditors should state if the audit was not in conformity with any of the above and indicate the alternative standards or procedures followed.

EXPECTED OUTPUTS & DELIVERABLES

• Audited Financial Statement and Reports for the audited periods.
• Management letter explaining adequately findings noted on policies, procedures, and any instances of non-compliance with laws and regulations.

TIMING & SCOPE

The audit is expected to commence on July 15, 2024 and will cover transactions for the financial year ended February 29, 2024.

AUDIT FEE:

The auditor as a bidder in this process shall provide the level of effort and a rate for each proposed resource to carry out the assignment. The fee should be broken down i.e., fee for Audit service as per Liberia Institute of Certified Public Accountants & Auditors standards. Fees should also state the hours to complete and the rates charged. Any cost associated with the completion of the audit

REPORTING AND WORK RELATIONSHIPS:

The auditors will work directly with the ECC National Coordinator and Finance/Administrator along with the finance team.

DISCLOSURE OF INFORMATION:

It is understood and agreed that the auditor shall, during and after the effective period of the Contract, treat as confidential and not divulge, any information obtained during the performance of the Contract, unless authorized in writing by the National Coordinator of ECC

PLACE OF WORK & ADMINISTRATIVE SUPPORT:

The work shall take place at the premises of ECC and ECC will comply with auditors to ensure all necessary support. The Auditor will be responsible for arranging the technical and clerical support, as well as providing all the necessary supplies and equipment to complete the assignment.

ACCESS TO SENSITIVE INFORMATION:

All Information will be made available to the Auditor, and to have access to sensitive (designated/classified) information the auditor shall contact the National Coordinator Barwudu J. Williams

Evaluation Criteria

ECC will evaluate all proposals received and select the successful firm based on our procurement criteria. As a general framework, all proposals presented by auditors will be evaluated in the context of the overall value that it brings to the project. While cost is a significant part of the evaluation criteria, it will not be the sole determinant. Each criterion below may be considered for each requirement listed below. Audit firms must ensure they review the criteria when they develop each aspect of their proposal.

Please make sure that all the elements included in your proposal are clearly and concisely stated. It’s important to provide complete information as requested, as failure to do so may put you at a disadvantage.

You can click the apply button below to download the pdf version of this advert.