Terms of Reference (ToR): Request for External Audit Service at Vital Strategies, Ethiopia

Terms of Reference (ToR)

Section I – Background

Vital Strategies, headquartered in New York City, is an international public health organization. Our programs strengthen public health systems and address the world’s leading causes of illness, injury and death. We currently work in 73 countries, supporting data-driven decision making in government, advancing evidence-based public health policies and mounting strategic communication campaigns. Vital Strategies’ priorities are driven by the greatest potential to improve and save lives. They include non-communicable disease prevention, cardiovascular health promotion, tobacco control, road safety, obesity prevention, epidemic prevention, environmental health, vital statistics systems building and multi-drug-resistant tuberculosis treatment research. Our programs are concentrated in low- and middle-income countries and cities in Africa, Latin America, Asia and the Pacific. Please visit our website at www.vitalstrategies.org to find out more about our work.

Vital Strategies is seeking to hire an audit firm on framework agreement basis for its country office based at Addis Ababa, Ethiopia. The services will be for a period of 1 (one) Year with possibility of an extension for another 2 (two) years subject to good performance.

In the current fiscal year Vital Strategies Ethiopia Brach office forecasted to have a total portfolio of approximately USD 2.9 Million contained of six (6) projects.

All prices shall be quoted by the Bidder in Ethiopian Birr (ETB).

Section – II 

Contact Persons :

Aynalem Abraham Desta       Faiza Ahmed,

Vital Strategies    Vital Strategies

Deputy Director Finance Operation HR & Operations Manager

adesta@vitalstrategies.org   fmohammed@VitalStrategies.org

Section – III:  Accounting Standard

The audit will be carried out in accordance with Audit & Assurance Standards, as applicable, issued by the Accounting and Auditing Board of Ethiopia in this regard and accounting standards, as applicable, issued by The Accounting and Auditing Board of Ethiopia and mandatorily applicable for non-profit entities. The auditor should accordingly consider materiality when planning and performing (except where a certain minimum coverage of implementing units is specified) the audit to reduce the risk to an acceptable level that is consistent with the objective of the audit. In addition, the auditor should specifically consider the risk of material misstatements in the financial statements resulting from fraud.

Section IV: Objective of the Audit

The objective of the audit is to enable the auditor to express an independent professional opinion on:

• Whether the financial position of at the end of the reporting period and of the funds received and expenditures for the reporting period, are presented fairly in all material respects by the Vital Strategies Ethiopia Branch Office and in accordance with the applicable accounting framework.
• Whether, in all material respects, the funds have been used in conformity with the approved budget;b  Certification of financial statements for calendar year (January to December) 

The purpose is for consolidation into Head Office’s books/financials and prepared in the format, if any, suggested by Headquarter.

Section V: Financial Statements (FS). 

The financial statements should include the following components:

• An Income and Expenditure Statement (IES) showing funds received, any other income received and all expenditures.
• A statement of financial position,
• A statement of Cash flow
• Statement of change in Net Asset/Equity
• Significant accounting policies and Notes to Accounts

The statements Shall be presented in local currency.

Financial statements will be prepared by The Vital Strategies branch office in accordance with applicable accounting standards, if any.

The auditor will have full and complete access during office hours of The Vital Strategies branch office to all records and documents (including books of account, legal agreements, bank records, invoices and contracts, etc.) and all employees. The auditor shall also have a right to access to bank and depositories, consultants, contractors and other persons or firms engaged by Vital Strategies branch office.

Section VI: Audit Scope 

• Annual audit for Ethiopian financial year in compliance with contents of Section III.
• Certification of financial statements for calendar year (January to December) for the purpose of consolidation into Head Office’s books.
• The audit will be carried out in accordance with Audit & Assurance Standards, as applicable, issued by The Accounting and Auditing Board of Ethiopia accounting standards, and mandatorily applicable for non-profit entities.
• Confirm annual financial statements are free from material misstatements.
• The Auditor expresses a professional opinion as to whether the financial statements give a true and fair view of the financial position at the end of the fiscal year 2026 and of the funds received and expenditure incurred for the accounting period ended that date.
• The books of accounts as maintained in EXACT accounting software shall form the basis for preparation of financial statements.
• As part of the audit testing procedures, particular attention should be paid to the following areas: i) Compliance with the applicable legislation, ii) Expenditures, iii) System of internal controls, iv) Follow up on the status of findings from previous audit reports, v) Designated bank account, vi) Safeguarding of assets, vii) Process of disbursements to Grantees/Partners/SR’s, viii) Data retention and supporting documentation.
• Funds have been spent in accordance with the condition laid down by various donors and/or HQ from time to time with due attention to economy and efficiency, and only for the purpose for which the funds were provided.
• All necessary supporting documents, records and accounts have been maintained.

Section VII: Audit Report and Duration 

The Audit Report including the management letter should be submitted to The Deputy Director Finance Operations, Vital Strategies Ethiopia branch office.

Duration of the audit will be two weeks from commencement date.

Section VIII: Management Letter 

In addition to the audit report, the auditor will prepare a “Management Letter”, in which the auditor shall provide recommendations

• To address the observed deficiencies and areas of weakness in systems and controls which may be affected promptly.
• Communicate matters that have come to their attention during the audit which might have a significant impact on the implementation and sustainability of The Vital Strategies Ethiopia branch office.

General Information

• The audit report and accompanying management letter and certification of financials should be received by Vital Strategies Ethiopia Branch Office at mutually agreed time included in the agreement or communicated later, as the case may be.

Administrative Compliance 

Bidders must provide verification of the following for their bid to be considered compliant.

• Company Registration and Renewed Business License
• Tax Registration
• License provided by the Local Authority
• Accreditation and affiliation with global audit firms
• General experience +5 years in the audit work for INGO’s and other high-profile clients.
• Audit License and Registration (Grade A) within office of Federal Auditors General.

 Evaluation 

Evaluation of technical and financial proposals will be conducted for bidders that pass Administrative Compliance Check.

Financial and technical proposals’ evaluation criteria ranking will be valued as follows:

• Qualification of the manager and the staff (15%)
• Training and experience (20%)
• Strategy in term of audit accreditation (20%)
• Quality control (15%)
• Dissemination of the information (10%)
• Cost (20%)