REQUEST FOR PROPOSALS Systems Audit

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Nov 10, 2013 (3 years and 8 months ago)

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REQUEST FOR PROPOSALS

Sys
tem
s

Audit


ISS
Financial

Management

System
s

and Controls



Terms of Reference

MAY


2013













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Table of Contents

1.

Background

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................................
................................
................................
.....

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2.

Purpose of the System Audit

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................................
................................
.....

4

3.

Scope

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................................
..................

4

4.

Methodology

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................................
................................
................................
...

5

5.

Expected Outcomes

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................................
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......................

5

6.

System Audit Criteria

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...................

5

6.1 Financial Management and related Systems and Controls

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.........................

5

7.

System Audit Deliverables


Team, Reports and Presentation

................................
.....

7

8.

Implementation Schedule

and Qu
otations

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................................
..........

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Acronyms


HR
D


Human Resources

and Development

ICT


Information Communication Technology

ISS


Institute for Security Studies

ManCo


Management Committee (ISS)

PMER


Planning, Monitoring, Evaluation and Reporting

ZAR


South African Rand



















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1.

Background


The Institute for Security Studies (ISS) is an independent, non
-
profit organisation. The
Institute works to
advance human security in Africa through evidence
-
based policy advice,
technical support and capacity building and has offices in Addis Ababa, Dakar, Nairobi and
a head office located in Pretoria
.


In South Africa the ISS is registered as both a non
-
profit

trust as well as a non
-
profit
organi
s
ation. For more information please refer to our website
www.issafrica.org
. The ISS
has been in existence
since 1994
and over these years has developed and instituted
organisatio
nal Management system
s
, which includes
:

F
inancial

and Administration
,
I
nformation Communication
Technology
(
IC
T
)
, Communications,

Planning, Monitoring
Evaluation and Reporting (P
MER
)

and
H
uman

R
esource
and Development

(HR
D
).


Following the conclusion of
its strategy for 2012
-
201
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the ISS undertook a full
restructuring of its operations and structure. Key changes were made to its management
structures, organisational roles, policies and remuneration model, amongst others. Shortly
before these changes the I
nstitute uncovered instances of fraudulent activities in its
Nairobi office that highlighted certain potential gaps and deficiencies in its systems. The
subsequent KPMG report that was commissioned by the ISS identified ineffective controls
as having contr
ibuted to the misappropriation of funds.

The fraudulent
conduct of former
employees is

also being dealt with through the Kenyan Criminal Justice System.


Management therefore requested its partners to support a systems audit of the ISS to be
conducted dur
ing the third/fourth quarter of 2013 to ensure compliance to the new
changes as well as identification of all strategic
process
es
,

procedural and operating issues
that could expose the ISS to
the
risk

of fraud, corruption and financial irregularities.

2.

Purpose

of the System Audit


The
primary
purpose of the audit is to
determine the ‘reliability and relevance’ of the
Institute’s

financial, human resources and administrative
management processes and
control systems.
This exercise should also identify poss
ible shortcomings in these
operating

units

and control processes that could expose the ISS to risk.


3.

Scope


Structurally,
t
he audit
will include all four (4) of the Institutes offices, namely, Pretoria,
Nairobi, Addis Ababa, and Dakar.
The Dakar office is small
in staff numbers and activities
compared to our other offices and will therefore not have to be

physically visited as part of
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the review
, however S
kype and phone interviews will be
conducted

with

the Dakar office

personnel.

The m
otivation for not physically visiting Dakar is that their financial system
falls directly under the Pretoria office.



The
F
inance

& Administration and
Human Resources

and Development

departments and
personnel in each office,
as well as the
programme/project managers and Division Heads
are of particular
importance
. Other organisational units (e.g. Knowledge
Management and
Communication, PMER, ICT) may also be involved at the
discretion of the consultant/s and
where the business processes inte
rlinks with financial procedures.


In terms information
and data availability
, the system audit will primarily draw from the
following available documentation:




Annual Reports and Accounts



Institutional and/or organisational unit
-
specific operational plan
s



Policy Manuals (old & new)



ISS Governance and reporting structure



ISS 2012


2015 strategy

4.

Methodology


The assignment shall be performed through studi
es of available documentation, at all ISS
offices
,

and relevant documentation
of

the Institute’s

partners.


Structured and semi
-
structured to open
-
ended interviews with any staff deemed relevant
by the consultant/s are advised.
All other matters relating to
the
methods for the
implementation of the assignment are the responsibility of the consultant
/s
.


5.

Expected Outcomes


The expected
O
utcome
s

of
a th
o
rough
organisational systems audit
are the following:




A clear and balanced assessment
of the reliability and relevance of
the
ISS’

financial
management system

processes
and controls



A clear assessment

of the ISS’ financial management system ability to ensure

the
integrity of financial data and the minimisation of risk.



General i
dentif
ication

of
what systems and processes need to be improved

in order

to
minim
i
s
e potential risk
, including but not
limited to Human Resources and
Administrative processes

6.

System Audit Criteria

6.1
Financial
Management
and related
Systems
and Controls


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The following
assessment criteria are based on the Institute’
s information priorities; whilst

not
exhaustive,
these se
rve to guide the consultant/s research and assessments
.


The

systems

audit will analyse and provide recommendation on the following aspects
for

fi
nancial
and administrative
management and control:



Organisational:




Effective
ness of

decision
-
making
processes
;



A
strategy/main focus
that

helps to clarify priorities;



Adequacy of financial
and accounting policies and procedures
;



Promotion of good administration, transparency in the administration of funds
(core funds and project funds),
anti
-
corruption
policy measures
;




Effective control measures with regards to salary and leave administration


appropriate approval and release processes in place
.


Financial Management and Control Sys
tems:




Effectiveness and efficiency of financial operations;



Integrity

and reliability of financial information;



Accounting System (ACCPAC)



Authorization procedures (two signatories);



Cash/bank management;



Payments and fund transfers

(including inter
-
office)
;



Travel policy, claims, expenses, compliance



Systems and
routines for p
rocurement;



F
ixed assets cont
rol/
register;



Budgeting processes
;



Budget/funds forecasting
;



Set roles and division
or
responsibilities

in place, systems for quality assurance
;



Agreements and follow
-
up on contractual obligations
;



Financial
reporting;



Project management systems
;



Project/programme financial monitoring and evaluation;



System and procedures for reporting and disclosing corruption
;



Review and introspective assessments of internal controls
;



Review/evaluation of results for internal organisation/programme learning



Guidelines to include “w
histle blowing
” as part of the reporting and disclosure on
corruption as a focal element of anti
-
corruption measures.


Financial Resources:




Setting and cont
rol of administration

and operational
costs
;

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Viability of administration costs
;



Viability of operational (research activities) costs;



Balance between administrative and operational costs
;



Documentation and sharing of information in terms of cost
effectiveness
.




Risk and Results Management:




Internal and External
Risk management systems, procedures and
control
s (inclusive
of an assessment
of what routines

and procedures within the
ISS exist
to mitigate
risks);



Results management systems, procedur
es and controls

for the purpose of assessing
that all the elements have been included.




Routines, procedures in place to identify and manage risk, i.e. corruption;



Documentation and assessment of risks and results;



Review/evaluation of results for internal

organisation/programme learning.


Payroll / Salary & administration:




Approval and signature of employment contracts


appropriate approval levels



Adherence to internal remuneration policy and procedure



Effective control system / checks and balances i
n place from payroll administration
and processing to approval and release



Accurate and comprehensive record keeping system in place
(hard copies, back
-
ups
of payroll software system)



Adherence to statutory and tax regulations



Assessment of the
Payroll software


VIP system
to ensure compliance with stated
policies and procedures.


Leave administration:




Application and approval process



Leave balance control by HR



Adherence to internal policy



Adherence to statutory requirements



Leave accrual pay
-
out on payroll upon termination of employment


accuracy and
appropriateness of calculation



Leave administration e
-
flow and integration with VIP Payroll


7.

System Audit Deliverables


Team,
Reports and Presentation


Proposed Team:
The Ser
vice Provider’s approach in resourcing this initiative is to be
based on the following principles:

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This initiative requires strong analysis and report writing capability;



Support resource to facilitate ad
-
hoc requests and interviews, documentation
administ
ration;


The proposed team should therefore consists of:




Principle Business Analyst



Base Business Analyst


The
following deliverables/outputs are required:


1.

Draft Report (due 1 month prior to end of contract term)

and to be commented on
by ISS Management and partners

2.

Final Report

to be approved by ManCo (inclusive of selected partners)

3.

Presentation of findings to the Institute’s Management Committee (ManCo)


The disposition of the final report shall mainly follow t
he terms of reference.
It shall be
written in English and not exceed 30 pages, excluding appendices. The final report shall
also include a
n executive

summary.


Both the draft and final report shall be written in Word. With the aim of simplifying
correction
s and printing, ISS shall also have access to the report in electronic form. A copy
should be sent to
alouw@issafrica.org

and hchimuka@issafrica.org (focal point for auditing
questions).


As part of the
system aud
it
, the consultant
/s

shall make two presentations of the final
results.


1.

For the ISS’s Management Committee (ManCo)

2.

For ISS Pretoria staff in the form of a Seminar. The Seminar presentation will be
shared will staff in regional offices


8.

Implementation
Schedule

and Quotations


This shall entail a period of approximately three (3) months at the ISS offices in Brooklyn
Court, Pretoria, Nairobi and Addis Ababa. The proposed d
ates for this audit is 1 August
2013


31 October 2013. The reports should be prov
ided with clear recommendations and
these should be received no later than 31 October 2013.


Please provide your quote for the said services. Please also provide a proposal with a
schedule demonstrating how you intend to undertake this audit. Kindly send y
our
proposals and quotes by close of business on
31 May 2013 to >>>>>>>>>>>>>



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