Terms of reference
AUDIT SERVICE FOR EIGHT FAIR TRADE COOPERATIVES
IN ACEH TENGAH AND BENER MERIAH
Background
Fair Trade USA, in partnership with Progreso and the Rabobank Foundation and with strategic support from Lutheran World Relief, will provide technical assistance to eight Fair Trade Certified coffee cooperatives in Aceh Tengah and Bener Meriah. The primary objective of this project is to improve the economic status and livelihoods of smallholder coffee farmers in the Lake Tawar region and also to strengthen the economic security and efficiency of cooperatives so they are better positioned to serve their farmer members. Improved economic status and strengthened economic security will be achieved by linking coffee cooperatives to export markets. The main components are as follows:
· Helping cooperatives maintain and grow Fair Trade Certification of Arabica coffee for U.S. and European markets by resolving non-compliance issues, allegations of fraud and defaults, and prevent suspension and de-certification, enabling coffee production as Fair Trade Certified to meet the growing market demand on the U.S. and Europe.
· Enabling the production of high quality specialty coffees and coffee blends suitable for U.S. and European markets to incomes for sustained economic development and security
· Providing organizational capacity building, training and knowledge transfer to cooperatives.
· Enabling Fair Trade Certified cooperatives and producer groups to access capital for short-term long-term financing needs.
As part of the process for cooperatives improved access to capital, they need to provide an independent audit that evaluates the financial records, practices, and management in the organization. The eight cooperatives range in size from approximately 650-4,000 members, with revenues between IDR 333,307,101 and IDR 20,465,139,165.
Audit Scope The overall objective of the audit is to assess the financial management and practices of eight Fair Trade Certified coffee cooperatives in Aceh Tengah and Bener Meriah in accordance with Generally Accepted Accounting Principles.
The auditor will be expected to conduct 8 audits in accordance with the International Standards on Auditing.
The scope of the audits will include:
· Review financial data for accuracy and reliability and make sure financial reports are free of material misstatement;
· Review financial statements and make sure they are in accordance with U.S. Generally Accepted Accounting Principles;
· Review procedures and management systems to examine if these provide adequate internal control;
· During examination of the detail accounting records, make sure there is a system, which allows easy examination
and sampling of transactions;
· Examine the effectiveness of systems and procedures in place throughout the audit period, including adequacy in
internal controls;
· Review the expenditure (including payroll records) and make sure they are in accordance with local labor law and other applicable laws;
· Identify procurement practices, procedures, documentations, to verify existence, or lack of, of bids, approvals, invoices, receipts, goods received, etc
· Conduct interviews with key individuals involved in the procurement process. This include but is not limited to the interviews with vendors involved, cooperatives’ staff, board and collectors, and others involved in the procurement process
Requested Services
The following report will be prepared by the auditors:
· Audit report, including management letter for the fiscal years 2009 to 2011 for each cooperative (as applicable –
some cooperatives may only have one or two fiscal years for auditing).
A debriefing meeting with Lutheran World Relief – Indonesia staff no later than two weeks following the completion of the audit.
- Debriefing meeting with the 8 coffee co-operatives
- Orientation meeting with LWR and Rabobank at the end of September
The Proposal
In responding to this request, the following information shall be submitted:
1. Details of firm’s experience in providing auditing services in small to medium scale cooperative organization.
2. Describe how your firm will approach the audit of the 8 coffee co-operatives.
3. Describe how and why your firm is different from other firms being considered, and why our selection of your firm as an independent auditor is the best decision.
4. Projected Fee (including travel and accommodation) and availability to complete the audit services outlined in this request. The fee should be presented with tiered pricing to indicate the price if the audit will be conducted for one year, two years or three years of the organization’s fiscal data.
5. Include estimated on site time required to complete the services (implementation plan).
6. Provide a list of 3 references from not-for–profit or cooperative organizations that your firm has conducted an
audit in recent years and are still clients.
7. Provide names and resumes of key personal that will conduct the audit.
Proposals shall not be more than 5 pages in length (not including references and resumes) and written in English and shall be submitted no later than 21 September 2012 to Lutheran World Relief’s Indonesian Office at
Jl. Sei Tuan No. 10, Medan or through e-mail to lwrindonesia1@gmail.com.
Selection Criteria
Lutheran World Relief – Indonesia, in consultation with its Head Office and Fair Trade USA, will select the audit
firm based on a combination of criteria including: evidence of proficiency in the audit of cooperative or agriculture/coffee company, fees, availability and required time to complete the audit.The final decision will be made in writing by 24 September 2012. Selected audit firm should commence the audit no later than the week commencing 1 October 2012.
AUDIT SERVICE FOR EIGHT FAIR TRADE COOPERATIVES
IN ACEH TENGAH AND BENER MERIAH
Background
Fair Trade USA, in partnership with Progreso and the Rabobank Foundation and with strategic support from Lutheran World Relief, will provide technical assistance to eight Fair Trade Certified coffee cooperatives in Aceh Tengah and Bener Meriah. The primary objective of this project is to improve the economic status and livelihoods of smallholder coffee farmers in the Lake Tawar region and also to strengthen the economic security and efficiency of cooperatives so they are better positioned to serve their farmer members. Improved economic status and strengthened economic security will be achieved by linking coffee cooperatives to export markets. The main components are as follows:
· Helping cooperatives maintain and grow Fair Trade Certification of Arabica coffee for U.S. and European markets by resolving non-compliance issues, allegations of fraud and defaults, and prevent suspension and de-certification, enabling coffee production as Fair Trade Certified to meet the growing market demand on the U.S. and Europe.
· Enabling the production of high quality specialty coffees and coffee blends suitable for U.S. and European markets to incomes for sustained economic development and security
· Providing organizational capacity building, training and knowledge transfer to cooperatives.
· Enabling Fair Trade Certified cooperatives and producer groups to access capital for short-term long-term financing needs.
As part of the process for cooperatives improved access to capital, they need to provide an independent audit that evaluates the financial records, practices, and management in the organization. The eight cooperatives range in size from approximately 650-4,000 members, with revenues between IDR 333,307,101 and IDR 20,465,139,165.
Audit Scope The overall objective of the audit is to assess the financial management and practices of eight Fair Trade Certified coffee cooperatives in Aceh Tengah and Bener Meriah in accordance with Generally Accepted Accounting Principles.
The auditor will be expected to conduct 8 audits in accordance with the International Standards on Auditing.
The scope of the audits will include:
· Review financial data for accuracy and reliability and make sure financial reports are free of material misstatement;
· Review financial statements and make sure they are in accordance with U.S. Generally Accepted Accounting Principles;
· Review procedures and management systems to examine if these provide adequate internal control;
· During examination of the detail accounting records, make sure there is a system, which allows easy examination
and sampling of transactions;
· Examine the effectiveness of systems and procedures in place throughout the audit period, including adequacy in
internal controls;
· Review the expenditure (including payroll records) and make sure they are in accordance with local labor law and other applicable laws;
· Identify procurement practices, procedures, documentations, to verify existence, or lack of, of bids, approvals, invoices, receipts, goods received, etc
· Conduct interviews with key individuals involved in the procurement process. This include but is not limited to the interviews with vendors involved, cooperatives’ staff, board and collectors, and others involved in the procurement process
Requested Services
The following report will be prepared by the auditors:
· Audit report, including management letter for the fiscal years 2009 to 2011 for each cooperative (as applicable –
some cooperatives may only have one or two fiscal years for auditing).
A debriefing meeting with Lutheran World Relief – Indonesia staff no later than two weeks following the completion of the audit.
- Debriefing meeting with the 8 coffee co-operatives
- Orientation meeting with LWR and Rabobank at the end of September
The Proposal
In responding to this request, the following information shall be submitted:
1. Details of firm’s experience in providing auditing services in small to medium scale cooperative organization.
2. Describe how your firm will approach the audit of the 8 coffee co-operatives.
3. Describe how and why your firm is different from other firms being considered, and why our selection of your firm as an independent auditor is the best decision.
4. Projected Fee (including travel and accommodation) and availability to complete the audit services outlined in this request. The fee should be presented with tiered pricing to indicate the price if the audit will be conducted for one year, two years or three years of the organization’s fiscal data.
5. Include estimated on site time required to complete the services (implementation plan).
6. Provide a list of 3 references from not-for–profit or cooperative organizations that your firm has conducted an
audit in recent years and are still clients.
7. Provide names and resumes of key personal that will conduct the audit.
Proposals shall not be more than 5 pages in length (not including references and resumes) and written in English and shall be submitted no later than 21 September 2012 to Lutheran World Relief’s Indonesian Office at
Jl. Sei Tuan No. 10, Medan or through e-mail to lwrindonesia1@gmail.com.
Selection Criteria
Lutheran World Relief – Indonesia, in consultation with its Head Office and Fair Trade USA, will select the audit
firm based on a combination of criteria including: evidence of proficiency in the audit of cooperative or agriculture/coffee company, fees, availability and required time to complete the audit.The final decision will be made in writing by 24 September 2012. Selected audit firm should commence the audit no later than the week commencing 1 October 2012.
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