Financial Audit Guidelines May 2011 Revised November 2011 potx

2.2 Audit standards Financial audits shall be carried out in accordance with international audit standards ISA issued by the International Federation of Accountants IFAC.. 2.3 Scope Th

Financial Audit Guidelines

May 2011 Revised November 2011

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General information

1.1 Purpose

The purpose of these guidelines is to define the scope of financial audits and to serve as a steering document for their implementation The guidelines follow the financial audit requirements of the Swedish International Development Cooperation Agency (Sida)

1.2 Scope

The audit plan covers audits of projects financed by Spider The Spider center itself is audited annually

by external auditors, as per agreement with Sida

1.3 Program overview

The Swedish Program for ICT in Developing Regions (Spider) is a resource center for ICT for Development (ICT4D) Spider was established in 2004 and is primarily financed by the Swedish International

Development Cooperation (Sida), with complementary funding from Stockholm University The center is administered by the Department of Computer and Systems Sciences (DSV) at Stockholm University Spider functions like a node in a network of actors from academia, public sector, private sector, and civil society Networking and brokering of knowledge and expertise is combined with support to innovative ICT4D projects in partner countries

Type and scope of financial grants:

Catalytic seed funding (project grants), program coordination, capacity development, research

components, research projects, travel grants, conferences, and workshops

Financial grants are generally limited to SEK 500.000 Any contributions above this amount are subject

to approval by the Spider Board

1.4 Point of contact

The Director of Spider has overall responsibility for the implementation of financial audits The

implementation of financials audit is managed by Spider project staff and collaborating partners

Administrative staff at DSV/SU is also involved if and when relevant

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2.0 Audit Process

2.1 Type of audit

These guidelines cover financial audits

Ongoing monitoring and evaluation of projects is the responsibility of Spider project staff and

collaborating partners as stipulated in separate agreements

2.2 Audit standards

Financial audits shall be carried out in accordance with international audit standards (ISA) issued by the International Federation of Accountants (IFAC) The audit shall be carried out by an external,

independent and qualified auditor (Certified Public Accountant/Authorized Public Accountant) and follow the ISA 800/805 standard Swedish government agencies may use their internal auditor, as long

as they fulfill the audit requirements

Spider shall approve beforehand (i.e prior to audit start) the selection of auditor The auditor must be able to provide proof of qualifications, e.g membership of IFAC affiliated organization Audit costs shall

be paid by the party and be included as part of their budgets In some cases, Spider may partially

coordinate and cover the costs of financial audits, in which case this will be stipulated in separate agreements with partner organizations

Financial audits shall follow the Terms of Reference specified in Annex I The Organization is responsible for communicating the Terms of Reference to the auditor

2.3 Scope

The party receiving financial grants from Spider is responsible that the use of funds is audited annually

by an external, independent and qualified auditor Swedish government agencies are allowed to use their internal auditor, as specified above Audit shall be conducted in accordance with internationally acknowledged auditing standards, as specified above

In cases where the party transfers grants to other recipient local organizations, the local organization shall be responsible for a grant being annually audited in accordance with requirements given above An unbroken chain of audit reports shall exist up to and including the final grant recipient organization Current audit directions shall where applicable be passed on to the organization immediately following

in the chain

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2.4 Reporting

Spider expects to receive a report consisting of an auditor’s opinion (auditor’s report); letter from the auditor to the project management regarding the audit and the auditor’s findings, comments and recommendations (management letter); and the management’s response to the auditor’s letter

(management response) These reports should be submitted within the timeline specified below

Auditors shall express an opinion in accordance with ISA 800/805 in their reports whether the

submitted financial report corresponds with the organization accounting records and Spider directions for financial reporting Auditor’s report shall contain the audit findings made by auditor during auditing process Auditor’s report shall also contain information on whether the organization has taken

reasonable steps with regard to earlier audit recommendations The party shall submit their auditor’s report to Spider in connection with submission of their annual financial report to Spider as of

agreement A response containing the organization standpoint and planned measures shall be drawn up

by the party and sent to Spider together with the auditor’s report

Unless otherwise agreed, the auditor’s report must be submitted to Spider no later than 31 January in the year following the receipt of the financial grant, together with financial and project reports as stipulated in the agreement with Spider The organization’s response to the auditor’s report shall be submitted to Spider at the same time unless otherwise agreed

2.5 Supplementary audits

Spider may demand financial audits supplementary to the process outlined here The party shall

collaborate with and assist Spider in the case of any supplementary audit, follow-up and financial studies requested by Spider Spider has the right to visit, audit and/or evaluate each project or activity financed partially or entirely with grants by Spider Visits, audit and evaluation should be preceded by

consultation with the organization concerned Spider does retain the right to carry out unannounced spot checks

2.6 Revisions

These financial audit guidelines may be revised and updated if and when necessary Any revisions will be reported to Sida

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Annex I - Terms of Reference for Annual Audit

I Introduction

Brief project background information:

[X] wishes to engage the services of an audit firm for the purpose of auditing the [project/program] [name], as stipulated in the agreement between [X] and [Spider/Stockholm University] The audit shall

be carried out in accordance with international audit standards issued by International Organization Federation of Accountants (IFAC) The audit shall be carried out by an external, independent and

qualified auditor (Certified Public Accountant/Authorized Public Accountant)

II Objectives and scope of the audit

Audit the Financial report for period [January-December 20XX] as submitted to Spider and express an audit opinion according to ISA 800/805 on whether the financial report of X [project/program]

submitted to Spider, is in accordance with [X]s accounting records and Spider’s requirements for

financial reporting

Examine, assess and report on compliance with the terms and conditions of the agreement [agreement articles] and applicable laws and regulations regarding accounting and taxes

The auditor shall examine on a test basis that there is supporting documentation related to reported expenditure The size of the test shall be based on the auditor's risk analysis and that should be stated in the report The auditor shall report the identified amount in case there is any missing supporting

documentation

Examine if [X] has agreements with the organizations to which it channels parts of the funds and

whether [X] has followed Spider’s audit requirements and have acted on received audit reports from these organizations

III The reporting

The reporting shall contain details regarding used audit methodology and the scope of the audit

The reporting shall contain an assurance that the audit was performed in accordance with international standards and by a qualified auditor

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The reporting shall contain the responsible auditor's signature (not just the audit firm) and title

The reporting from the auditor shall contain the audit findings made during the audit process It shall state which measures that have been taken as a result of previous audits and whether measures taken have been adequate to deal with reported shortcomings

The auditor shall make recommendations to address any weaknesses identified The recommendations should be presented in priority

The reporting shall not exceed 20 pages j be written in English and be presented to [X] in [X] copies and one digital for onward transmission to Spider, within [X] weeks after the last visit

Please also attach an annual report or other reports/documentations that might be relevant

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