Terms of Reference

                                                                           Hiring of Audit firm

Background

The Foundation for Ageing and Inclusive Development (FAID) is a national, not-for-profit organization founded by a group of seasoned professionals with extensive experience in the humanitarian and development sectors, both in Pakistan and internationally. Initially established as a Trust in Islamabad in 2020, under the Trust Registration Act 1886 (Registration No. 756), FAID has since evolved to strengthen its legal and operational framework.

In 2024, FAID was re-registered with the Securities and Exchange Commission of Pakistan (SECP) as a not-for-profit organization under Section 42 of the Companies Act 2017, (CUI No 0254720) aligning with national standards for non-profit governance. This transition reflects FAID’s commitment to accountability, transparency, and excellence in serving marginalized and vulnerable communities across Pakistan.

Presently, HelpAge International and FAID (Foundation for Ageing and Inclusive Development) are collaboratively executing a three-year project titled " Strengthening the legal framework and civil society for an inclusive Pakistan" in Islamabad and Punjab. This project receives financial support from HelpAge Deutschland (HAD) and BMZ (German Federal Ministry for Economic Cooperation and Development). HelpAge International provides technical assistance to FAID for implementing field activities within this project. To support the localization agenda of HelpAge International, this project was designed to be implemented by FAID. Unfortunately, due to a lengthy registration process, the project was initially carried out by HelpAge International Pakistan. After FAID was registered with the SECP, the project was handed over to FAID by HelpAge International in October 2024. FAID then implemented the remaining duration of the project.

Objective:

FAID seeks proposals from eligible and reputable audit firms in Pakistan to conduct financial audits for a three-year project funded by BMZ through HelpAge Deutschland implemented in Islamabad and Punjab. The objectives of the audit are:

-        To ensure compliance with funding guidelines, regulations, and accounting standards.

-        To verify the accuracy and reliability of financial records and reports.

-        To assess the effectiveness of internal controls and risk management procedures.

-        To provide recommendations for improving financial management practices.

Scope of Work:

The audit firm shall:

-        Review financial transactions, including income, expenses, assets, and liabilities, for the project duration.

-        Examine accounting records, ledgers, bank statements, and supporting documentation.Assess the adequacy of internal controls and adherence to financial policies and procedures.

-        Verify the accuracy of financial statements and reports (in which all project-related revenues and expenditure must be shown and for which it must be confirmed that receipts are provided for all revenues and expenditure)

-        Identify any instances of non-compliance, fraud, or irregularities (e.g. contracts, donor guidelines).

-        Conduct testing and sampling of financial data to ensure completeness and accuracy.

-        Review budget allocations and expenditure against approved project plans and funding agreements.

-        Verify how the provided project funds have been managed. This includes:

• Project funds transferred to the project partner in the current budget year or during the project term
• Interest earned in the current budget year or during the project term from project funds transferred to the project partner
• Other revenues from the project activity.

-        Verify to what extent the funds have been used appropriately for the purpose of carrying out the planned project objectives and activities.

-        Verify the cost-effectiveness of expenditure with regard to financial resources (to be used economically and as effectively as possible).

-        Verify the personnel costs and social security contributions to ensure that they are in line with local standards, legal in the respective project country and, above all, that they comply with contracts and that the contributions required by law are being withheld.

-        Verify the economic use of project equipment and the procured inventory, where it is being held and whether it has been/is being used appropriately for the purpose of carrying out the planned project objectives and activities.

-        Assess the reliability of financial systems and software used for recording and reporting.

-        Prepare a comprehensive audit report detailing findings, observations, and recommendations.

  Deliverable

  The audit firm shall provide the following deliverables:

-        An inception report outlining the audit approach, methodology, and timeline.

-        Draft audit findings and observations for review and feedback.

-        Final audit report incorporating responses to feedback and recommendations.

Qualification and Experience

The audit firm must demonstrate:

-        Accreditation and registration with relevant regulatory bodies in Pakistan.

-        Minimum five-year experience in conducting financial audits for projects of similar scope and complexity.

-        Familiarity with relevant accounting standards, regulations, and donor requirements.

-        Availability of qualified and experienced audit staff.

Evaluation and Selection Process

Proposals will be evaluated by a selection committee based on the specified criteria. FAID reserves the right to accept or reject any proposal and to negotiate terms with the selected audit firm.

Budget

The audit firm shall provide a detailed breakdown of costs, including fees, travel expenses, Per diem and any other applicable charges.

Confidentiality:

The audit firm shall maintain strict confidentiality of all information obtained during the audit process and shall not disclose any findings or reports without prior authorization from the Client.

CONTRACT TERM

Anticipated Start date: 15^th Sep 2025

Anticipated end date: 30^th Nov 2025

AUDIT LOCATION

The audit will be conducted in Islamabad. Two weeks will be allocated for field work.