Organization: Global Communities
Reference Number: None given
Job Level: Mid-level
Description
Terms of Reference
Support in Setting Up an Internal Audit Function
Background:
CHF ACSI is the largest microfinance service provider in Iraq. Since 2003, it has built a portfolio of $45 million serving over 20,000 active clients. The growth has almost entirely been funded through grant funding and retained earnings from the project. As of 2012, CHF ACSI has an additional $40 million in debt funding through a thirteen-year facility from a single lender that will permit its expansion over the next five years. This type of growth requires the adaptation of its structures, procedures, systems, controls, risk Management and products to its future needs.
Over the past year, CHF ACSI has made deliberate efforts to decentralize authorities to department heads including budgeting, signing authority and staffing decisions. With decentralization, its internal controls must be adapted, and one critical component will be the creation of an internal audit function.
CHF ACSI is seeking a consultant to work with CHF ACSI Management and Advisory Board to operationalize the internal audit function.
Scope of work:
The aim of this project is to support ACSI in strengthening its control environment by setting up and institutionalizing an internal audit function. By strengthening capacities of the audit team, supporting regular internal audits, analyzing findings and developing recommendations, the project shall ensure that ACSI’s internal control procedures are adequately integrated into daily operations. Ultimately, the new internal audit function shall allow ACSI senior Management to identify and prioritize key risk exposures, design mechanisms to mitigate risks and assign responsibilities to conduct appropriate controls.
The assignment comprises of following three main phases, which can be broken down into on- and offsite missions as follows (to be coordinated among the Consultant and ACSI):
- 1. Assessment of legal and institutional requirements
With regard to ACSI’s ambitious growth plans, which will bring about many operational and structural changes, the consultant shall conduct a thorough review of the institution’s current internal audit functions. In particular the Consultant shall:
1.1 Offsite
- Familiarize him/herself with existing internal audit tools used by other MFIs in CHF’s network and assess their applicability to ACSI’s current size, growth plans and applicable laws
- Identify regulatory requirements for internal audits applicable for MFIs in Iraq
- Familiarize him/herself with the internal audit toolkit developed by USAID-Tijara for Iraqi MFIs against the requirements set out in the CHF network
- Develop an information request list including key staff required during the onsite visit of phase 1 of the assignment
1.2. Onsite
- Conduct interviews with relevant ACSI staff (meeting schedule and detailed activities will form part of the outcome of the previous offsite mission)
- Develop recommendations for improving ACSI’s internal audit procedures and controls taking into consideration internal audit practices in the network as well as international best practice (such as the above mentioned toolkits)
- 2. Support in the establishment of an internal audit function
Based on the recommendations developed under 1) the Consultant shall support ACSI in establishing an internal audit function. This includes supporting the establishment of the function, capacity building for relevant staff and demonstration of international best practices. In particular the Consultant shall:
2.1. Offsite
- Advise ACSI in its recruitment process for the new Internal Auditor and other assisting staff, if necessary, by assisting the HR department to draft a job description, identify candidates, screen CVs, and conduct phone interviews, and by recommending an Internal Auditor to the Advisory Board
- Develop draft and final versions of an adequate internal audit policy and procedures manual covering as a minimum tasks, responsibilities, reporting mechanisms and rating criteria for regular internal audits, including in particular (but not limited to) the following areas
- Internal audit of loan procedures
- Internal audit of accounting procedures
- Internal audit of human resource and procurement procedures
2.2. Onsite
- Support the Board of Directors in the set-up of a well structured and functioning Internal Audit Committee
- Develop a training structure and provide training and on the job coaching for the Internal Audit team, including (but not limited to):
- Audit sampling methods and setting up of audit plans
- Methods to conduct fraud investigations (investigative audit)
- Determination of adequate corrective measures
- New internal audit policy and procedures manual
- Develop an individual training plan including an assessment of additional training needs
- Assist the Internal Auditor in developing an audit plan, reflecting current practices of the CHF network and the particular requirements of ACSI (e.g. based on the legal requirements in Iraq)
- Support the Internal Auditor throughout a comprehensive pilot audit and audit report
- Conduct a workshop (in person and/or via conference call) with the Internal Auditor, ACSI Management, other department heads, and the Audit Committee on the new internal audit function including new policy and procedures, responsibilities, reporting lines and standards
- 3. Follow-up and backstopping
Over a period of six months, the Consultant shall provide ongoing remote backstopping to the institution for any eventualities, followed by an on-site review of the progress in establishing the Internal Audit function. In particular the Consultant shall:
3.3. Offsite
- Provide backstopping support to ACSI on an ongoing basis, including a review of audit reports for the first quarter as per annual plan
- Assist the Internal Auditor in accomplishing audits for the first quarter and in drafting the quarterly audit reports
3.4. Onsite (tbd)
- If need be, travel onsite to finalize the audit reports and review the progress of the internal audit function
- Identify shortcomings and develop recommendations on how to address these, including aspects such as further capacity building needs
- Present to ACSI’s Advisory Board results and key findings of the assignment, including aforementioned shortcomings and recommendations
List of deliverables
1) Detailed project work plan and meeting schedule (to be submitted after the offsite mission of component 1)
2) Assessment report with findings and recommendations for improving ACSI’s internal audit function
3) Policy and procedural manual for the internal audit function
4) An individual development plan for the new Internal Auditor
5) Workshop for Internal Auditor, ACSI Management, Advisory Board, and other department heads on new internal audit function
6) Audit plan containing an annual work plan for the audit function
7) Quarterly reports on progress of the internal audit function and implementation of recommendations
8) Final report after follow-up mission, to be presented to ACSI’s Advisory Board
Throughout the project, ACSI Management will be available for any queries of the Consultant and provide him/her with all necessary information and documents.
Implementation and Timeline
The project shall comprise up to 34 days stretched over a period of 9 months. The assignment foresees in total three trips to ACSI’s office in Beirut, Lebanon. ACSI will arrange logistics for relevant ACSI staff identified by the Consultant and ACSI during the offsite mission to be present during the onsite mission, as requested. It is expected that one senior expert will implement this assignment throughout August 2013 to May 2014. Subject to the TAFCOM’s approval, the TAF Manager and ACSI will jointly launch a request for proposals on Devex.com.
Qualifications:
- Minimum five years of auditing and accounting experience. Specific experience with internal controls.
- Internationally recognized accounting and/or auditing designation.
- Banking or microfinance sector experience.
- Strong written and verbal communications skills.
- Honest, principled, and objective.
- Fluency in English, Arabic language skills a plus.
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