Multiple Framework-Contract in the field of external audit of programs and projects of external aid

Swartwy

Description

CC AUDIT 2006/S 1-000094 Annex I Framework-Contract covering independent audits of external aid programmes and projects funded by the European Commission from the European Development Fund (EDF)° and the general budget of the European Communities (EC budget) Global Terms of Reference Lot 3 : training 1 Introduction EuropeAid Co-operation Office is in charge of the implementation of 1Commission ’s external aid instruments, funded from the general budget of the European Communities or the European Development Fund, in an efficient and effective way, ensuring a high quality and rapidity level for the implementing of the projects, contributing therefore to the visibility of the European community aid. EuropeAid Co-operation Office is responsible for all phases of the project cycle which ensure the operational translation and the realisation of the objectives defined by the programming adopted by the Commission (identification, instruction, preparation of financial decisions, implementation, monitoring and evaluation) maximising the quality, pertinence, effectiveness, efficiency, impact, durability and appropriation by beneficiaries of all the actions. The main activity areas of external aid are: - Relations with oriental Europe, Caucasus and Central Asia; - Relations with the Middle East and South Mediterranean; - Relations with Asia; - s with Latin America; - Relations with Sub-Saharan Africa, Caribbean, Pacific and Indian Ocean; - Thematic ...

Informations

• Publié par: Mushur
• Nombre de lectures: 33
• Langue: English

Extrait

CC AUDIT 2006/S 1000094

Annex I

FrameworkContract covering independent audits of external aid programmes and projects funded by the European Commission from the European Development Fund (EDF)° and the general budget of the European Communities (EC budget) Global Terms of Reference Lot 3 : training

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Introduction

EuropeAid Cooperation Office is in charge of the implementation of 1 Commission ’s external aid instruments, funded from the general budget of the European Communities or the European Development Fund, in an efficient and effective way, ensuring a high quality and rapidity level for the implementing of the projects, contributing therefore to the visibility of the European community aid.

EuropeAid Cooperation Office is responsible for all phases of the project cycle which ensure the operational translation and the realisation of the objectives defined by the programming adopted by the Commission (identification, instruction, preparation of financial decisions, implementation, monitoring and evaluation) maximising the quality, pertinence, effectiveness, efficiency, impact, durability and appropriation by beneficiaries of all the actions.

The main activity areas of external aid are:  Relations with oriental Europe, Caucasus and Central Asia;  Relations with the Middle East and South Mediterranean;  Relations with Asia;  Relations with Latin America;  Relations with SubSaharan Africa, Caribbean, Pacific and Indian Ocean;  Thematic aid programmes. 2 Objective

The purpose of these terms of reference is to explain the general context of the assignments and to provide overall guiding principles for the lot 3 of the contract.

In the interest oftransparency and independence and in order to strengthen its supervisory and audit capability, the Commission intends to conclude the framework contract (lot 3) with a maximum of four professional firms for the purpose of auditing external aid programmes and projects financed from the EC Budget and the EDF. The framework contract enables the Commission to lay down, in advance, the terms and conditions to carry out the types of services as described in point 3 below for programmes and projects financed from the EC Budget and the EDF over a given period of time. The framework contract is used for the financing of audits launched on the initiative of the Commission. The general modalities of the framework contract are described at 7 below. Further details on objectives, scope, assignment process and other terms and conditions of

1 Excepting preadhesion instrument, cooperation with occidental Balkans, humanitarian activities, macrofinancial aid, CFSP and rapid reaction mechanism

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Annex I

a specific audit assignment will be set out in specific terms of reference to a request for services, which will be established for each assignment.

Scope

The Commission wishes to be able to perform several types of audits of external aid programmes and projects financed from the EC Budget or the EDF within the framework of its external aid policy in the activity areas as described at 1 above. For this purpose the Commission requires the types of services as described below in point 3.1.

3.1

Lot 3: Training

Following the creation of EuropeAid and the devolution of external aid management to the Delegations, the responsibilities for contracting and managing audits have to a very large extent been allocated to the Delegations. The main activities of audit functions at EuropeAid’s Headquarters (‘HQ’) are support, advice and coordination of audit and audit related activities. Delegations must manage their own audit programmes and staff dealing with audits (both staff in financial and contract functions and operational staff dealing with project management) needs to obtain an appropriate knowledge of audit concepts, audit types, objectives, scope, approach, and techniques. For this purpose EuropeAid unit.G2 (‘Coordination of ICS and methodology for expost controls and auditing’) manages, with the assistance of external audit firms, a comprehensive training programme for audit functions at HQ and in the Delegations. The services and assistance from external audit firms concern both the development and update of the existing training package and the delivery of qualified instructors to conduct training courses at HQ and in the Delegations.

The audit firm is expected to review update and finetune the existing training package in close collaboration with staff of EuropeAid unit.G2. Moreover, the audit firm may be requested to assist with the development of training modules which take into account the specific requirements of the external aid context on the one hand and audit fundamental requirements and concepts (in line with International Auditing Standards) on the other hand.

The key training issues are listed below. This list is indicative and not exhaustive. •Audit types, concepts and terminology (includinga/oobjectives, scope) •Circumstances in which audits are desirable; reasons for audits (planned or mandatory) •Audit strategy, annual audit plan •Organisational framework: tasks and responsibilities of audit functions •Terms of reference (general aspects) •Organisation of an audit •Professional and ethical rules and standards for the auditor •Risk analysis •Audit techniques •Introduction to statistical sampling •Audit reports and opinions EuropeAid intends to develop or improve a number of specific training modules which respond to the practical needs of audit functions at HQ and in the Delegations. Audit firms may be requested to contribute in particular as regards technical audit issues and compliance with International Auditing Standards. The subjects concerned coverinter alia:

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Annex I

•Terms of reference (specific aspects and case studies) •Annual audit plan and risk analysis •Expenditure verifications (based on the concept of an agreedupon procedure) Training courses (currently 'Audit of External Operations – An Introduction') are organised several times a year at HQ and frequently, on request, in the Delegations. The target audience is often a mix of Commission and Delegation staff (staff of financial and contract functions and operational staff dealing with project management) and participants from bodies in partner and beneficiary countries (for example staff of entities responsible for project/programme implementation, officials from ministries in the country concerned, representatives of institutions and staff of NGO’s). The background and training of the participants is usually very divers and many of them often have little or know knowledge of auditing. The training courses are conducted by two instructors, one from an external audit firm and one from EuropeAid HQ. Each instructor presents specific subjects of the training program but they are expected to assist and complement each other. The instructor to be provided by the audit firm should be a professional auditor currently employed in the profession with at least 56 years audit experience, including experience of audits of external aid and development programmes financed by the European Commission. The instructor provided by EuropeAid is usually an official of EuropeAid unit.G2 who has an appropriate mix of audit experience, training, a good knowledge of development and external aid projects and a good knowledge of EuropeAid’s audit policies. 4 Audit Standards and Ethics

Standards

Good audit practice for auditing public funds such as those provided by the Commission can be found in international and national audit standards. Audits of programmes and projects should be conducted in accordance with international auditing standards promulgated by either the International Organisation of Supreme Audit Institutions (INTOSAI) or the International Auditing Practices Committee (IAPC) of the International Federation of Accountants (IFAC).

The national Supreme Audit Institution (SAI) may follow national or international audit standards. The INTOSAI has issued international audit standards, which focus on the public sector.

The IFAC through its IAPC has issued International Standards on Auditing (ISAs) which were initially prepared for the private sector but now a ‘Public Sector Perspective (PSP) issued by the Public Sector Committee of IFAC is set out at the end of each ISA. Where no PSP is added the ISA is applicable in all material respects to the public sector.

Where national auditing standards are in all material respects consistent with either INTOSAI or ISA they may be used.

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Auditors are expected to apply and uphold the following guiding principles:

Confidentiality. Auditors should be prudent in the use and protection of information acquired in the course of their duties. They must ensure that information obtained in the course of audits is kept confidential and handled with discretion. In no circumstances may contractors use or divulge such information to gain an immediate or potential commercial advantage, nor may they transmit it to unauthorised persons or companies.

Ethics

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For each stage the responsibilities of the auditor and the Commission are briefly described below. For each assignment the Commission nominates an Audit Task Manager who will be responsible for coordination. The Audit Task Manager will be the auditor’s main point of contact in the Commission or where applicable in a Delegation.

5.1 Planning and Preparation

The auditor plans the assignment in accordance with international auditing standards and the policies of the firm concerned. Planning issues include amongst others: objectives, scope, risk assessment, a preliminary survey to understand the context and activities, resource allocation and developing work programmes.

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Competence. Auditors should apply the knowledge, skills, and experience needed in the performance of their duties.

5 Audit process The audit assignment can be structured around four stages: •Planning and preparation; •Execution; •Reporting and Communication; •Followup.

Objectivity. Auditors should have an unbiased mental attitude that requires them to perform assignments in such a manner that they have an honest belief in their work product and that no significant quality compromises are made. Objectivity requires auditors not to subordinate their judgement on audit matters to that of others.

Integrity. Auditors must perform their work in an honest, diligent and responsible way. They should observe the law and make disclosures expected by the law and the profession. They should not knowingly be party to any illegal activity, or engage in acts that are discreditable to their profession or organisation;

•The Commission reserves the right to request, at any moment and stating its reasons, the replacement of one or more experts. Save in the event of failings attributable to the expert(s) whose replacement is requested, the Commission will assume any resulting additional costs and adjust the deadlines accordingly; the Commission will be the sole judge of the reasons invoked.

More specifically the requirements during the execution of the audit are:

The Auditor should record and document relevant information in files and working papers to support the findings, recommendations and conclusions. These documents must be kept for a period of 5 years after the final payment of the service rendered in such a way as to allow them to be consulted by the Commission in the offices of the Auditor.

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•The team leader must notify the Commission immediately of any attempt by the recipient to restrict the scope of the audit, any lack of cooperation on the part of the recipient and any suspicion of fraud or irregularity.

•Commission officials may take part in audit missions. They may also decide to take over responsibility for conducting the audit.

•During the audit the team leader will inform the competent national authorities of the recipient country or the auditee of the findings and ask for their comments. This should be documented.

Usually, Commission officials will organise a briefing in Brussels or at the Commission Delegation to hand over relevant documentation and explain the nature and scope of the audit to the auditor.

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5.2 Execution

The auditor should, in accordance with international auditing standards and the policies of the firm concerned, identify, analyse, evaluate and record sufficient information to achieve the objectives of the assignment. Assignments should be properly supervised.

•Where the team leader believes that certain findings should be immediately reported to the relevant Commission departments, the latter will decide whether the competent national authorities or the recipient should be informed of their substance.

The Commission will inform its Delegation, the beneficiary, and, where appropriate the competent authorities of the recipient country that an audit is planned. The Commission informs, as a rule in advance the authorities of the beneficiary country, which are required to provide any information and documents, which may be requested and to take all measures to facilitate the task of the auditors. The Contractor will organize the execution of the mission and shall keep regular contact with the audit task manager and the Delegation of the Commission in the beneficiary country.

•The “aide mémoire”: At the end of the fieldwork, the Auditor will submit to the Commission a summarised report outlining the main findings and recommendations. This report will also contain the beneficiary’s point of view. It will be used as a key document during the closing meeting and for drawing up of the audit report.

•The ‘draft report’ shall be transmitted to the Commission within 30 working days after the end of the fieldwork. The Commission will then have 30 working days to inform the Auditor of its observations and comments. The Auditor should present a final report within 10 working days of receipt of the Commission’s comments and observations. The person authorised to certify accounts in the country where the Auditor’s Head Office is based should sign the report.

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5.3 Reporting and Communication

•The report should present the facts and an evaluation of these in a clear and objective manner and should be limited to the key issues. They should be well structured and easy to follow. Particular attention will be paid to the findings, results and conclusions of the audit, to the Auditor’s recommendations and to the beneficiary’s comments. The list of findings serves to facilitate the follow up to be made by the Commission.

•Each report should be submitted in both a paper version and an electronic version. The report should be drawn up in Word for Windows format and all tables should be in Excel for Windows format. As a general rule, reports should be drawn up in English and French.

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•TheAt the end of the fieldwork a closing meeting will be organised. participants at this meeting will be designated according to the findings of the audit. The presence of a representative of the auditee as well as the Auditor is mandatory. Other participants may also be invited. The Commission will be invited to attend.

•The ‘report’ or ‘audit report’. The purpose of the report is to describe the assignment and its objectives, the scope and the work carried out. The report should include a conclusion (where agreed in the form of an opinion) as well as a list of the audit findings and where applicable recommendations (e.g. under the form of a matrix of corrective measures or a proposal for amounts to be recovered).

Without prejudice to what is agreed in specific terms of reference, generally speaking, the reporting requirements are:

The auditor should communicate the results of the assignment in accordance with international auditing standards and the policies of the firm concerned. The Commission will indicate in the specific terms of reference for an assignment to the auditor what the auditor is expected to state or to issue an opinion and when and how this should be delivered. The Commission may specify a reporting format and structure to be provided for a specific assignment.

•A debriefing meeting will be organised, when necessary, on reception of the draft report by the Commission, between the team leader and the Commission officials. The Head of the Commission Delegation or a representative will attend that meeting, as necessary, thereof.

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•The ‘6 months review’: the contractor will prepare, each 6 months, a summary of the main audit findings.

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Highly qualified experts possessing relevant university qualifications and assuming or having assumed important responsibilities in their area of specialisation. They must have at least12 years of professional experience in their area of specialization and to be authorized to certify the accounts by the law of the country in which the contractor has its registered place of business. Their knowledge of the recipient countries of Community development aid will also be taken into account.

•– Audit managerCategory 2

•– Audit partnerCategory 1

Qualifications and Experience required

The qualifications and experience required from the experts will depend on the audit assignment ordered by the Commission. Depending on the nature and scope of the audit specific qualifications and experience may be required or desired. Generally speaking there are four categories of experts:

The Commission takes responsibility for the followup of audit findings and recommendations. If and where needed the Commission may consult the auditor or request the auditor’s assistance to monitor the progress made on certain issues.

•The ‘complementary letter’: the objective of the complementary letter is to inform the Commission on findings of particular interest to the Commission which can also cover issues which are not subject of the audit report.

5.4 Followup

•The ‘annual review’: at the end of each calendar year the Contractor will prepare a summary, by country and programme or as instructed by the Commission, of the main findings and recommendations of all assignments carried out.

•The ‘final report’: the Auditor should present a final report within 10 working days of receipt of the Commission’s report approval. The person authorised to certify accounts in the country where the Auditor’s Head office is based should sign the reports.

Qualified experts possessing relevant university qualifications and a good knowledge of the sector(s) concerned. They must have at leastsix years' professional experience, including experience of leading a multidisciplinary audit team.

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•Category 4 – Assistant auditor

7.2 Request for services

Contractors must undertake to provide replacement wherever necessary and to provide their experts in the field with all necessary support.

If and when expertise in specific areas is required this will be indicated in the specific terms of reference for the assignment concerned. Generally speaking, the requirements for qualifications and experience for such experts are analogue to the ones for audit experts.

The contractor must provide curriculum vitae for every expert proposed for audit assignments. The Commission must approve these curriculum vitaes before an order form is signed.

Each specific assignment will be the subject of a request for services, which will be sent to all the contractor of lot 3. The detailed specific terms of reference for each assignment will be annexed to this request.

Within 10 working days of a request for service being sent by the Commission, the Contractors shall submit a proposal including the composition of the audit team, the experts’ curriculum vitae (maximum 3 pages) and a financial proposal. On a case by case basis, the contractor shall submit experts satisfying the linguistic criteria required for each mission.

The Commission proposes to conclude a framework contract for “lot 3 : training” with a maximum of 3 professional firms or consortia. The framework contract is used to mobilize experts within a very short delay. For each lot, a framework contract will be concluded with the tenderers selected at the end of the evaluation procedure.

7.1 Procedure

•– Senior auditorCategory 3

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7.3

For each specific order form, the proposed experts should have the nationality of one of the European Community countries or of eligible countries according the programme by which the audit is financed.

Qualified experts possessing relevant university qualifications and at leastthree years'professional experience in the sector concerned by the audit.

Offers

Modalities of contract execution

Annex I

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Technical and administrative staff of at least three years' standing with the contractor or qualified experts possessing relevant university qualifications and less than three years' professional experience in the sector concerned by the audit.

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The financial proposal must be based on the fees stated in the framework contract for each category of auditor as well as of the daily allowances as published by the Commission for service contracts for the country where the assignment is carried out. The travel costs by air will be reimbursed on the basis of the most economic tariff (economy class). The Contractor should retain evidence of travel and accommodation expenses and other travel documents (for example boarding passes). Such documents may have to be presented to the Commission for inspection. Other transport costs are reimbursed in accordance with the rules applicable for service contracts. If there are no rules, the rules applicable for Commission officials (cat. A/4 – 8 and B) apply. Local transportation, hotel, meals, etc are covered by the daily allowances.

The Contractor can ask for clarifications, if necessary, within this 10 days period. All contractors will receive the answers on the same date.

7.4 Offer’s evaluation Only admissible offers will be evaluated. The admissibility criteria are: ƒThe deadline for submission of the offer has been respected ƒthe eligibility rules concerning the expert’s nationalities have been respected ƒthe fees respect the maximum contractual amount ƒif applicable, the maximum budget has been respected The contracting authority will choose the most economically advantageous offer on basis of the experts profile, the price and the experts’ mobilization period. The admissible offers will be evaluate on basis of : ƒConformity of the proposed experts CV with the required competences, as described in the terms of reference; ƒTotal fees amount; ƒAvailability of the experts as required in the specific terms of reference; ƒAcceptance of the specific terms of reference (if alternatives are proposed, evaluation of the alternative offer(s)).

The contracting authority has 10 working days to evaluate, accept or reject the offers and to notify the evaluation results to all the contractors.

During this period, the contractor will not be allowed to modify his offer on its own initiative.

7.5 Order form

The Commission will return, to the selected contractor, a signed order form for the requested services (in 3 copies) within 10 working days. The contractor will return two dated and signed copies, within 10 working days, which implies acceptance of the order form and of the execution conditions.

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7.6 Miscellaneous

Annex I

The number and the scope of the specific assignments to be carried out under each framework contract is not fixed and will depend on the number of audits that the Commission will consider necessary. Under no circumstances is the Commission obliged to order a minimum number of audits nor is it obliged to guarantee a minimum turnover. The Commission does not guarantee that all audit assignments will be contracted using this framework contract.

Experience has shown that there may be 90 to 150 specific audits a year. These assignments will be divided among the different lots according to the priorities set by the Commission. The duration of each assignment will be specified in the specific terms of reference and the assignment order for service.

If specific expertise (technical and/or scientific) is required, which the contractor does not dispose of, the contractor may subcontract provided that the Commission has given prior approval in accordance with the general conditions for service contracts. In this case, the offer must specify this and the costs must be quoted separately.

The order for services or the modifications thereof are made on the standard models designed by the Commission. The amended order will then replace the initial order from on a date to be specified.

The Commission intends to sign a contract with each of the companies selected by the evaluation committee for an initial period of 24 months, renewable once for a maximum period of 24 months. Each contract will take effect on the date of its signing by each party.

Most audits will have to be carried out on the premises and locations of the beneficiaries of EC projects or programmes in countries outside the EU. Thus auditors should make the necessary arrangements for travelling and accommodation. Audits relating to grant contracts can largely take place inside the European Union. Some audits may involve missions to offices of international organizations which may be situated anywhere in the world.

Contractors should keep time sheets which are records of the time worked by each expert and indicating day, place and time worked for the assignment. The information must correspond with the auditor’s timerecording system.

Should an assignment have to be extended for reasons attributable to the contractor, the fees and costs arising from that extension will be borne by the contractor.

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