Forensic Audit

Job Title: Forensic Audit

Conduct Forensic Audit of a Partner Organisation Under the National Dairy Development Programme in Zambia

Background

We Effect is a development organisation founded in 1958 by the cooperative movement in Sweden. Our core philosophy is solidarity. Our motto is self-help. We Effect works in more than 20 countries in Asia, Eastern Europe, Latin America, Africa and collaborates mainly with member-based organisations consisting of women and men who live in poverty, to improve their living conditions by working together, defend their rights and contribute to a more just world. We Effect works in the thematic fields of sustainable rural development, livelihoods improvement, gender, climate change and adequate housing and habitat. We Effects’ values are Respect, Transparency, and Togetherness.

We Effect has its Head office in Stockholm, Sweden. In Southern Africa, We Effect is present in, and implements country development programmes in Mozambique, Malawi, Zambia and Zimbabwe. The Regional Office Southern Africa is based in Lusaka, Zambia. For more information, please visit www.weeffect.org

Purpose

As part of continued improvement in internal controls and compliance, We Effect is procuring forensic audit services to be conducted on the on one of it’s partners under the National Dairy Development Programme project in Zambia. The forensic audit will be conducted for the period 1 st of January 2018 to April 2021.

The project’s mandate is promote and protect the interest of members who are dairy processors, purveyors and others involved in business in the dairy industry. Through this project and support from others, the partner has managed to increase membership and women representation in leadership. Productivity and income has also increased among the members.

The project is funded by Sida with a total value of SEK8,165,000 to the partner. The project duration is 1 st January 2018-31 st December 2022.

The Purpose Is To

The forensic audit is required due to management concerns regarding suspected breakdown in compliance and internal controls based on set organisational operational policies and procedures pertaining to the partner’s project operations.

• Discover if fraud or misconduct of funds has taken place and identify those involved.
• Whether the equipment purchased to improve the livelihoods of poor dairy farmers belonging to cooperatives in rural areas was delivered to the intended recipients.
• Quantify the monetary value of the fraud (i.e., the financial loss suffered by the project) and present findings to the management of We Effect.
• Whether salary costs debited to the project can be verified by sufficient supporting documents and are in line with the set Conditions of Employment and other personnel related policies.
• Whether the partner has been in compliance with rules set out as per the partner agreement.

Scope of the Forensic Audit

The scope of the audit is to conduct a comprehensive analysis of investigations across the project to identify suspected compliance and control issues. In addition, the audit will highlight any instances of fraud or other financial and all forms of misconduct over the period in question.

The Key Activities Will Focus On The Following

• Identify any instances of fraud or other financial misconduct over the period in question.
• Examine, evaluate and determine the veracity of allegations made and gather sufficient information and evidence to determine whether the allegations made are substantiated.
• Verify that the project is managed with the requisite care, efficiency, transparency, and diligence of the agreement.
• Review the Internal Control Framework for the project. The review will include but not be limited to assessing whether internal control procedures are sufficient to prevent financial irregularities and misappropriation; approval procedures and delegation of financial authority; segregation of duties, clarity on roles and responsibilities; reconciliation procedures and functions; procedures followed for verifying receipt and acknowledgement of goods and services with agreed quality and timeline.
• All procurements in the project should be thoroughly investigated to establish whether the proper procurement policy was followed by project staff. The auditor should further verify whether the partner organisation has provided valid justification/evidence for deviation from policy which has been approved by appropriate authority. The auditor should use their experience in establishing the eligibility of questionable suppliers, if any. Where a need arises, the auditor should obtain comparative prices that would have been applicable in the same period and assess the potential financial loss.
• Assess and determine whether salary costs charged to the project can be verified by sufficient supporting documents and are in line with the contract of employment, set Conditions of Employment and other personnel related policies and documentation.
• Review all travel advances and travel claims to establish their authenticity and if following the policy for Official Duty Travel.
• Review and analyse the potential red flags that may indicate inappropriate financial reporting schemes, misappropriation of assets, inappropriate use of project assets and expenditures and liabilities for improper purposes e.g., vehicle use and fuel.
• Establish whether project funds are used for the intended purpose (including sample visits to project sites or physical inspection of procured items).
• Review all other major expense items with a minimum value of USD 150 in the audit period to establish their authenticity.
• The auditors will also carry out a risk analysis and provide systemised recommendations, an overview of areas to be addressed to inform the way forward for the project.

The auditor has the right to suggest changes to the Terms of Reference during the work based on facts on the ground. However, any changes should be discussed and approved by We Effect.

Who will be interviewed?

• We Effect Zambia Country Office staff that provide support to the partner organisation and any other relevant We Effect staff the auditor may deem necessary to the assignment.
• Current and former project staff from the partner organisation relevant to the assignment.
• Any other project beneficiaries

The Forensic Audit and Time Schedule

The audit will be conducted over a period not exceeding 21 days starting after the week of appointment.

The Reporting

The output from the assignment will be a written report with the following contents:

• Executive summary
• Methodology
• Findings with evidence
• Conclusions and recommendations on improvements
• Annexes including lists of interviewed persons, supporting documentation and the terms of reference for the assignment.

Considering the report will be used for decision making, all representations obtained during the investigations and any other schedules, memos, etc., that may help the understanding of the audit report should be included as part of the appendices in the report.

The report shall be signed by the responsible auditor (not just the name of the audit firm) and title.

The reporting and all other communication in connection with the forensic audit will be done in English.

The auditor is expected to give a PowerPoint supported presentation on the report methodology and findings to We Effect.

Mandate and Confidentiality

Information obtained from the interviewees, book-keeping or other gathering in this assignment should be treated in a confidential manner. The report from this audit must be treated confidentially. The auditor is entitled and expected to discuss matters relevant to this audit with only pertinent persons and organisations. The auditor is not authorised to make any commitments on behalf of We Effect.

Submission date

The proposal containing the firm’s approach to the assignment, proposed team and CVs and associated costs shall be submitted to the We Effect Regional Office Southern Africa by mail at [email protected] not later than 12th July 2021 at 17:30 hours. The subject line should clearly indicate: Zambia Country Office Partner Forensic Audit.

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