Historique

The auditor is expected to conduct a full financial audit (as per the description of responsibilities below) of one project under implementation by the Moldova Government through the Ministry of Economy and SA Combustibil Solid, financed by the Romanian Government through direct allocation from the Romanian Official Development Assistance budget. The budgetary allocation has been formalized through a Memorandum of Understanding between the Romanian and the Moldovan governments. 

Project name: Providing coal to support low-income families in the Republic of Moldova during the cold season 2014-2015

• Duration: November 2014 – March 2015;
• Donor: The Romanian Ministry of Foreign Affairs;
• Beneficiary: The Moldovan Ministry of Economy;
• Implementation partner: SA Combustibil Solid;
• Project budget: 2.000.000 EUR;
• Project expenditure: 45.000 EUR.

Project overview

The main objective of the project was to provide support to approximately 25.000 families living in fuel poverty in the Republic of Moldova for the 2014-2015 cold season. The project was designed as a short-term impact intervention that was meant to assist the Moldovan Government with a specific short-term challenge. The total project budget was of 2.000.000 EUR.

Management arrangements

The management arrangements were established between the donor and the beneficiary through a tripartite Memorandum of Understanding, signed between the Romanian Ministry of Foreign Affairs (donor), the Moldovan Ministry of Economy (beneficiary) and SA Combustibil Solid (implementing partner). The memorandum stipulates that the project would be implemented by the Ministry of Economy through the company SA Combustibil Solid, which has the logistical capacity to buy, transport, store and distribute the coal. The role of the Moldovan Ministry of Economy would be to monitor the timely delivery of the project, within the agreed budget and activities and to propose amendments within the limits established through the MOU to ensure the successful implementation of the project.

Background and context

Romania’s Official Development Assistance (ODA) Programme has been officially launched in 2007, following the country’s accession to the European Union (EU). Since then, Romania has strived to position itself on the international development arena as an innovative donor, with the main comparative advantage of being able to share its direct experience and knowledge in the democratic transition and Euro-Atlantic integration processes. Romania’s strategic objective in development cooperation is to contribute to poverty reduction by promoting security and economic welfare, state of law, sustainable economic development, climate change mitigation and investments in education, complementing international efforts in the field. 

Romania has identified the thematic and geographic priorities, and has developed a clear national Policy and institutional framework for its ODA. The geographical focus is now on twelve countries: in the Black Sea extended region - the Republic of Moldova, Ukraine, Belarus, Georgia, Armenia and Azerbaijan; and in North Africa and the Middle East - Egypt, Tunisia, Libya, Iraq, Palestine and Afghanistan. The Romanian current ODA thematic priorities are: 1) transition to democracy (reconstruction of the state, democratic governance, administrative reform, support for the civil society, the media, and conflict resolution); 2) support for agriculture and sustainable economic growth in the climate change context– preferably in the phytosanitary and sanitary and veterinary fields; 3) environment protection and support for activities to promote sustainable energy in the context of the climate changes. The secondary sectors are health and education.

The MFA benefits from a specially assigned budgetary line that is earmarked for Official Development Assistance. The funds can be delivered through a number of modalities, including direct support (i.e. granting funds to a requesting partner state without prior planning and without going through a competitive process). This project falls into this category, as the funds were granted through direct allocation, based on the express request of the Moldovan Government.

At present, there are 100.000 persons who receive state benefits in the Republic of Moldova, out of which the great majority during the cold season (20.000 persons throughout the entire year and 80.000 persons only during the cold season, who suffer from fuel poverty). Given the socio-political situation in the region, the energy natural resources market is becoming more limited for the Republic of Moldova, which imports the greatest part of the needed energy resources. The current project responds directly to the fuel poverty challenge of the Republic of Moldova through a short-term project, by providing coal to the most vulnerable families in the partner country for the winter 2014-2015. 

Consultations with concerned parties

Prior to the start of the audit work the auditor will consult with the Romanian Ministry of Foreign Affairs, the Moldovan Ministry of Economy, SA Combustibil Solid and the UNDP.  Further, upon completion of the draft audit report and management letter, the auditor will meet with the Romanian Ministry of Foreign Affairs and the UNDP to debrief them on its major findings from the audit and its recommendations for future improvements as well as to seek their feedback thereon.

Devoirs et responsabilités

The scope of the audit services required 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.

Specifications:

• 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 either ISA (International Standards of Auditing published by the International Auditing Practices Committee of the International Federation of Accountants) or INTOSAI (International Organization of Supreme Audit Institutions) auditing standards;
• That the scope of the audit is limited to the expenditures of the recipient party;
• That the auditor is required to verify the mathematical accuracy of the final financial reports by ensuring that the expenditures described in the final report are reconciled to the expenditures, by disbursing source, in the final financial reports;
• That the auditor is required to 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 is required to express an opinion as to the overall financial situation of the project for the projects lifetime;
  The statement of expenditure (final financial report) for the mentioned period;
  The statement of assets and equipment held by the project at the end of the project.
• That the auditor is required to, as applicable, report in monetary value, the net financial impact of any audit qualification (negative opinion: qualified, adverse, disclaimer) on the statement of expenditure (final financial reports) where applicable;
• That the auditor is required to submit a draft audit report by 23/10/2015 and a final signed audit report by 05/11/2015.

The Audit Report and Management Letter

The following are the expected contents of the audit report and management letter and the topics/areas to be covered by the auditors.

Audit Report

The audit report should clearly indicate the auditor’s opinion (A sample of Audit Report will be provided).  This would include at least the following:

• The purpose and scope of the audit;
• The audit standards that were applied (INTOSAI standards, ISAs, or national standards that comply with one of these in all material respects);
• The period covered by the audit opinion;
• The amount of expenditure audited;
• The amount of the net financial impact of the qualification on the financial reports of each project, if applicable;
• The reason(s) resulting in the issuance of a qualified, adverse or disclaimer opinion (the reasons should be also included in the management letter as an audit observation(s);
• The scope limitation (description and value) for those transactions that are the responsibility of the donor (MFA) (as part of support services) if applicable.  Important to note:  Such scope limitation should not be reason for a qualified audit opinion as such transactions would be, in general, excluded from the audit scope;
• Whether the final financial reports is adequately and fairly presented and whether the disbursements are made 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 of 1 May 2015.

Management Letter

The management letter should be attached to the audit report and cover the following topics/issues:

• A general review of a project’s progress and timeliness in relation to progress milestones and the planned completion date, both of which should be stated in the project document.  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 a 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.

The management letter should also include the following:

• Effective audit observations/recommendations (guidelines below);
  Parts of the note that follows are from an article in the Internal Auditor, April, 1999 by Brian M. Schwartz.  The purpose of this note is to provide guidance on formulating audit observations and recommendations that are effective.
  Effective audit observations should consist of 5 common elements: Condition; Criteria; Cause; Effect, potential impact or Risk; and Recommendation.

Items 1 to 4 must be part of what constitutes an audit observation.  Below are helpful tips on each of these areas.

Condition

The "Condition" refers to a conclusion, problem, or opportunity noted during the audit review.  It directly addresses a control objective or some other standard of performance.

Sample condition statements include:

• "The appropriate individual did not authorize this document."
• "The account has not been reconciled for three months."
• "The process can be streamlined to save six hours per day."

When documenting the condition, it is important to include the necessary level of detail in the description of the problem. Someone who has not participated in the audit, but has some basic understanding of the subject matter or function, should be able to comprehend any condition statement.

Criteria

This element describes the standard being used as the benchmark for evaluation.  In other words, it depicts the ideal condition.  The criteria may reference a specific policy, procedure, or government regulation.  At other times, the criteria may simply be a matter of common sense or prudent business practice. For example, a criteria statement might state that "Per policy #1234, all loans greater than $100,000 must be approved by the board of directors;" or "Payroll processing responsibilities should be segregated to control the authorization of master file changes."

Cause

As the name suggests, the cause statement explains why the identified problem occurred in the first place.  The cause is probably the most critical attribute of the finding form.  Without determining why the condition occurred, the situation cannot be properly remedied.
In documenting the cause, the auditor should identify the underlying reason behind the problem.  A surface explanation that fails to uncover the root cause will not lead to an effective recommendation.
In addition, a quote from an appropriate individual could serve as the cause statement, i.e. why the condition has occurred.  Some audit managers consider only a cause statement from management as appropriate, while other prefer a statement from the individual who actually performs the respective task.  It is usually preferred to obtain both points of view, since such an approach is more likely to identify the root cause of the problem.

Possible Causes

In addition to explaining the and giving details about the “Cause” in the text of an audit observation, UNDP requires that the auditor also summarizes the cause statement in the audit report by using one of the following 9 pre-established cause statements:

• Lack of/or inadequate policies/procedures/guidelines;
• Lack of/or inadequate guidance/supervision at the project level;
• Inadequate guidance/monitoring at UNDP country office level;
• Lack of/or insufficient resources (specify: financial, human or, technical resources);
• Inadequate planning;
• Inadequate training;
• Human error;
• Intentional overriding of internal controls;
• Inadequate management structure.

Effect, potential impact or risk

The effect statement describes the particular risk that could exist (the potential impact or risk) or that has already existed (the effect) as a result of the condition or problem.  Basically, it answers the question, "so what?"  Effect statements often discuss the potential for loss, noncompliance, or customer dissatisfaction created by the problem.
Management is likely to zero in on the information provided in this aspect of the audit observation, as it allows them to see how the condition will negatively impact their activities. As a result, the effect statement often serves as the catalyst for a positive change.
One note of caution is in order - the risk suggested by the effect statement should not be overblown or exaggerated.  While auditors are responsible for pointing out risks associated with control breakdowns, the effect statement should remain reasonable, plausible and should not be worded as if the world were coming to an end.  If auditees are to take the audit observation seriously and respect what an auditor has to say, an auditor talks about risk in realistic, not exaggerated, terms.

Recommendation

This aspect suggests how the situation might be remedied. An effective recommendation directly relates to and targets the cause. It isn't enough to state in general terms that management should fix the problem; the recommendation statement should also explain how remediation is to be achieved.

A good recommendation maintains the proper balance between the risk presented and the cost to control it.  Before making a recommendation, the auditor should consider the following questions:

• Does the recommendation solve the problem and eliminate or reduce the risk?
• Can the recommendation be implemented within the current environment?
• Is the recommendation cost-effective?
• Will the recommendation act as a temporary bandage or a permanent solution?

Examples of effective recommendations include monthly or quarterly physical inventories of all assets and equipment with reconciliation to appropriate records.

Additional tips

Whenever possible, similar findings should be combined into one form so that the case for implementing the recommendation is strengthened.  
Playing devil's advocate can be an extremely helpful exercise.  After completing the audit observation and recommendation, auditors should place themselves in the auditee's shoes and challenge/question the validity of the issue.  If the issue cannot stand up to this exercise, it probably should not be included in the audit report.
The categorization of audit observations by risk severity: High, Medium, or Low.  Definitions of these categories are given below 

Risk Levels

In addition to explaining the and giving details about the “Effect, potential impact or risk” in the text of an audit observation, UNDP requires that the auditor also identifies the risk level in the audit report by using one of the following 3 pre-established risk levels:

• High (Action that is considered imperative to ensure that UNDP/the implementing partner is not exposed to high risks (i.e. failure to take action could result in major consequences and issues);
• Medium (Action that is considered necessary to avoid exposure to significant risks (i.e. failure to take action could result in significant consequences);
• Low  (Action that is considered desirable and should result in enhanced control or better value for money).

The classification of possible causes of the audit observations.

Definitions of these causes are given below:

• Lack of/or inadequate policies/procedures/guidelines;
• Lack of/or inadequate guidance/supervision at the project level;
• Inadequate guidance/monitoring at UNDP project level;
• Lack of/or insufficient resources (specify: financial, human or, technical resources);
• Inadequate planning;
• Inadequate training;
• Human error;
• Intentional overriding of internal controls;
• Inadequate management structure.

Management comments/response to audit observations and recommendations (project management and/or MFA, as applicable).

Indication of observations that affect the audit opinion (when qualified, adverse or disclaimer opinion is given)

More detailed guidance for 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 work plans, final financial report, and assess the expenditures, in terms of their timeliness and their compliance with the project Terms of Reference;
• Review expenditures made by the recipient and the implementing partner and assess whether they are in accordance with the project document and budgets;
• Review the process for procurement/contracting activities and assess whether it was transparent and competitive, as requested by the applicable legislation;
• Review the use, control and disposal of non-expendable equipment; 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, as requested by the applicable legislation;
• Review the recipient accounting records and assess their adequacy for maintaining accurate and complete records of receipts and disbursements of cash;
• Review the records of requests for direct payments and ensure that they were signed by authorised representatives.

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 grant recipient that should be shared with other project personnel.

Available Facilities and Right of Access

The auditor will 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 should be advised that he/she has a right of access to banks, consultants, contractors and other persons or firms engaged by the project management.

Consultancy Management Arrangement

The Auditor will report to the UNDP ODA Project Manager.

Duration of the Evaluation

The audit is expected to start in September 2015 for an estimated duration of 25 working days in total. This will include, besides desk study and review, interviews with stakeholders and report writing, also one  mission in Chisinau, Moldova with an estimated duration of 4 working days.

• Audit kick off by 28 September 2015;
• Audit implementation (two projects) and first audit report draft by 23 October 2015;
• Final audit report draft  by 05 November 2015.

Compétences

Core Competencies:

• Excellent Communication skills, both written and oral, particularly in English language;
• Integrity and objectivity;
• Excellent interpersonal skills within a range of professional contexts;
• Result orientation and client focus;

Functional Competencies:

• Judgement and Conceptual thinking: ability to identify key audit issues, present sensitive and difficult audit findings and recommendations to management;
• Analytical skills;
• Tactful and balanced approach in dealing with audit matters;
• Computer skills.

Qualifications et expériences requises

Education:

• Minimum B.A. in Accounting, Economic science, Management, Public finance or related field.

Experience:

• At least 3 years of experience in auditing services;
• At least 4 similar audit exercises conducted and successfully completed;
• Experience in providing audit services to international organizations and donors is a plus.

Language:

• Excellent written and verbal communication skills in English;
• Knowledge of Romanian and/or Russian is an advantage.

Specific requirements:

• Registered in the financial auditors registry for physical persons;
• Authorized/certified  auditor in the country of origin;
• Authorized with a valid auditors visa for 2015 (Carnet cu viza pentru anul 2015).

Evaluation of Applicants

Individual consultants will be evaluated based on a cumulative analysis taking into consideration the combination of the applicants’ qualifications and financial proposal.

The award of the contract should be made to the individual consultant whose offer has been evaluated and determined as:

• Responsive/compliant/acceptable; and
• Having received the highest score out of a pre-determined set of weighted technical (P11 desk) reviews and financial criteria specific to the solicitation.

Only the highest ranked candidates who would be found qualified for the job will be considered for the Financial Evaluation.

Technical Criteria - 70% of total evaluation – max. 70 points:

• Criteria a - Minimum B.A in Accounting, Economic science, Management, Public finance or related field, max points: 15;
• Criteria b - At least 3 years of experience in auditing services, max points- 22;
• Criteria c - At least 4 similar audit exercises conducted and successfully completed – max points- 25;
• Criteria d  - Experience in providing audit services to international organizations and donors - max points- 5;
• Criteria e  - Excellent written  skills in English, max points- 1;
• Criteria f - Knowledge of Romanian language, max points- 1;
• Criteria g - Knowledge of Russian language, max points- 1.

Financial Criteria - 30% of total evaluation – max. 30 points

Application procedures

Qualified candidates are requested to apply online via this website.

The application should contain:

• Cover letter explaining why you are the most suitable candidate for the advertised position and a brief methodology on how you will approach and conduct the work - Please paste the letter into the "Resume and Motivation" section of the electronic application;
• Filled P11 form including past experience in similar projects and contact details of referees (blank form can be downloaded from http://europeandcis.undp.org/files/hrforms/P11_modified_for_SCs_and_ICs.doc ); please upload the P11 instead of your CV.
• Financial Proposal* - specifying a total lump sum amount for the tasks requested in this announcement. The financial proposal shall include a breakdown of this lump sum amount (based on estimated 25 anticipated working days, out of which 4 anticipated working days mission in Chisinau, Moldova, including  travel and per diems for this mission, as well as and any other possible costs;
• Incomplete applications will not be considered. Please make sure you have provided all requested materials. Please combine all your documents into one (1) single PDF document as the system only allows to upload maximum one document.

Please note that the financial proposal is all-inclusive and shall take into account various expenses incurred by the consultant/contractor during the contract period (e.g. fee, health insurance, vaccination, personal security needs and any other relevant expenses related to the performance of services...). All envisaged travel costs must be included in the financial proposal. 
Payments will be made only upon confirmation of UNDP on delivering on the contract obligations in a satisfactory manner. 

Individual Consultants are responsible for ensuring they have vaccinations/inoculations when travelling to certain countries, as designated by the UN Medical Director. Consultants are also required to comply with the UN security directives set forth under dss.un.org
General Terms and conditions as well as other related documents can be found under: http://on.undp.org/t7fJs.

Qualified women and members of minorities are encouraged to apply.
Due to large number of applications we receive, we are able to inform only the successful candidates about the outcome or status of the selection process.