Terms of Reference for External Audit Firm

1. Background

The Institute for Social Transformation (IST) is a non-governmental organization committed to empowering women and youth, particularly in the informal sector, through capacity building, financial inclusion, entrepreneurship, advocacy, and promoting gender justice.

To ensure transparency, accountability, and compliance with national laws and donor requirements, IST seeks to engage a reputable and qualified external audit firm to conduct annual audits of its financial statements for a period of three years, from 2025 to 2027

2. Objective of the Assignment

The primary objective of the external audit is to enable the auditors to express an independent professional opinion on the financial position of IST and to ensure that the funds received have been used in accordance with the organization’s financial policies, applicable laws, and donor requirements.

3. Scope of Work

The audit will be conducted in accordance with International Standards on Auditing (ISA) and shall include but not be limited to

  • Examination of IST’s financial statements (balance sheet, income and expenditure statement, cash flow statements, and notes to the accounts).
  • Verification of income received and expenditure incurred for the financial years 2025, 2026 and 2027.
  • Review of compliance with donor agreements and applicable statutory regulations (e.g., NGO Act, URA, NSSF).
  • Assessment of internal controls and risk management practices.
  • Review of procurement and financial management systems for compliance and efficiency.
  • Identification of any ineligible expenditures or material weaknesses.
  • Issuance of a management letter with recommendations for improvements.
4. Deliverables

The selected audit firm will be expected to provide the following:

  • Audited financial statements for each financial year (2025, 2026 and 2027).
  • Independent audit opinion on IST’s financial position.
  • Management Letter detailing findings, risks, and recommendations.
  • Any other reports required by IST or specific donors during the engagement period.
5. Duration and Timelines
  • The audit for each financial year must be completed and finalized within 90 days after the close of the respective financial year.
  • A planning meeting will be held at the beginning of each audit to agree on timelines and information needs.
6. Qualifications and Experience of the Audit Firm

Interested audit firms must meet the following criteria;

  • Must be a legally registered and licensed audit firm in Uganda.
  • Demonstrated experience in auditing NGOs or donor-funded organizations for at least five (5) years.
  • Proven knowledge of International Financial Reporting Standards (IFRS) and International Standards on Auditing (ISA).
  • Capacity to assign a qualified team (e.g., Certified Public Accountants or equivalent).
  • Good standing with the Institute of Certified Public Accountants of Uganda (ICPAU).
7. Proposal Submission Requirements

Interested firms should submit a detailed proposal including:

  • Company profile and registration certificates.
  • Technical proposal outlining understanding of the assignment, methodology, and work plan.
  • Financial proposal clearly stating the fee for each year and overall cost.
  • List of at least three (3) similar NGOs previously audited with contact references.
  • Curriculum vitae of key audit personnel.
8. Evaluation Criteria

Proposals will be evaluated based on the following:

Criteria Weight (%)
Technical capacity and experience 40%
Methodology and understanding 25%
Cost-effectiveness of financial bid 20%
References and previous experience 15%

 

9. Submission Deadline and Contact

The proposals should be addressed to the Chief Executive Officer and submitted to this email address: isocialtransformation32@gmail.com by 30th May, 2025