An independent external audit of the finances, financial administration, and operations of the Center shall be undertaken annually in accordance with generally accepted international auditing practices and standards. The annual audit will serve two purposes. It primarily represents a control function for the Board of Trustees and the donors, by verifying beyond reasonable doubt that the accounts represents a true and fair picture of the Center’s financial status. The audit should in addition serve as a guide and reference to good accounting practices and the auditor should function as an advisor in support of the Center’s continuous efforts to ensure sound financial management. The annual audited financial statements and the annual auditor’s report are addressed to the Board of Trustees. The audited financial statements shall be included in the Annual Report.
A separate special audit addressing a specific purpose may also be commissioned when a need arises.
The audit shall include a review of the Center’s annual financial statements and underlying books of accounts and records, review of the internal accounting and operations, a review of the investment activities undertaken by the asset manager of the Center, and such other financial and administration practices as the auditor believes are warranted. The audit shall also include a review of the adequacy of the Center’s internal controls.
The auditor must have unlimited access to all information requested, for them to issue a complete statement of the Board of Trustees. The Board, the Officers and Staff of the Center, the outsourced service providers, commercial banks, the recipients of financial support from the Center, and all those directly associated with the Center shall collaborate fully and provide all documents and records to support the annual financial audit.
The audit shall be completed in time for the preparation of the Annual Report and compliance with Government reportorial requirements, such as the Bureau of Internal Revenue and Securities and Exchange Commission. As a rule, the audit shall be completed within the quarter immediately after the yearend.
The auditor shall issue the following:
· Audited Financial Statements
· Audit Report
· Management Letter
FAS is responsible for drawing up the terms of reference for the audit each year ensuring completion of these reports.
The external auditor shall be recommended by the Executive Director and shall be appointed by the Board of Trustees. The identification of the auditing firm must follow the Center’s procurement guidelines. However, it may be decided to retain the same auditor for a number of years, provided that competitiveness is demonstrated. A reputable firm must carry-out the audit. Audit companies from outside the region may be solicited.
The External Auditor must be a reputable Auditing Firm. Members of the assigned audit team must not be related or affiliated to any officers or directors of the Center.
The Donor may require a separate or special audit of a certain grant or project. The audit scope, objective and timing of the audit shall be discussed and approved by the party requiring the audit. The cost of the audit shall generally form part of the Project costs and should be clearly approved in the agreement with the donor.
The Center may also require a separate or special audit of a subgrant. The audit scope, objective and timing of the audit shall be discussed and approved by the Center. The cost of the audit shall generally form part of the Project costs.
An internal auditor may be engaged to perform independent reviews of some functional areas or projects of the Center as deemed necessary by the Executive Director. The internal audit function shall cover both financial and operational audits.
The internal auditor must maintain a detailed record of all audit work performed. The internal auditor reports directly to the Executive Director and the BOT.
The findings must be discussed with the project or Center personnel whose activities were audited and the results of those discussions will be included in the final report to be submitted to the Executive Director and BOT.
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