EWMI G-PAC RFP - AUDIT

November 20, 2013 REQUEST FOR PROPOSAL (RFP) AUDIT SERVICES Background The Policy, Advocacy, and Civil Society Development in Georgia project (G-PAC) is a four-year initiative funded by the United States Agency for International Development (USAID) through USAID Cooperative Agreement No. AID-114-A-10-00005 awarded in 2010 and implemented by the East West Management Institute, Inc. (EWMI). EWMI G-PAC aims to strengthen civil societys role in advocating for, influencing the development and implementation of, and monitoring effective public policy reforms in Georgia through providing grants, mentorship, and trainings to Civil Society Organizations (CSOs). A significant goal for EWMI G-PAC is building the capacity and sustainability of local CSOs. Pursuant to this goal, one of the main focuses of EWMI G-PAC in 2014 will be individualized financial training for CSOs to prepare these organizations to potentially receive direct funding from USAID or other major international donors. EWMI G-PAC is seeking proposals from eligible audit firms registered in Georgia to perform independent financial audits for 15 25 selected CSOs in Georgia. Eligible audit firms should have extensive experience performing audits for USAID funded projects in Georgia. Based on findings of the independent financial audits EWMI G-PAC will provide technical assistance to the CSO to address and take corrective actions on all identified internal control deficiencies. In addition, EWMI G-PAC and a local financial management training partner will work with the individual CSOs to set up adequate and efficient financial management and internal control systems to become fully compliant with USAID rules and regulations and generally accepted accounting practices. Offerors are invited to submit offers in response to this Request for Proposal (RFP) in accordance with Section 1 (Instructions to Offerors). Section 2 contains the detailed scope of work for the services to be procured by EWMI G-PAC. Issuance of this solicitation does not in any way obligate EWMI G-PAC or USAID to award a contract, nor does it commit EWMI G-PAC or USAID to pay for costs incurred in the preparation and submission of a proposal. Please note that in submitting a response to this solicitation, the offeror understands that USAID is not a party to this solicitation and the offeror agrees that any questions hereunder must be presentedin writing with full explanations to EWMI G-PAC for consideration, as USAID will not consider questions made to it under USAID-financed subcontracts. EWMI G-PAC, at its sole discretion, will make a final decision on the questions.

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SECTION 1: INSTRUCTIONS TO OFFERERS 1. Deadline and Submission Information The deadline for submission of proposals is 5:00 pm on Wednesday, December 6, 2013. Proposals will be evaluated and the short listed applicants will be notified by December 12, 2013. Interviews with the Offer Review Committee, if required at the discretion of EWMI G-PAC, will be scheduled for the week starting on December 16, 2013.The preferred format for a reply to this RFP will be one hard copy of the proposal mailed, couriered or hand delivered to the address and person listed below: East West Management Institute, Inc. Policy, Advocacy, and Civil Society Development in Georgia (G-PAC) #5 Marjanishvili St., Third Floor Tbilisi, Georgia Attn: Irina Lashkhi, Deputy Chief of Party Hard copy proposals should be submitted in a sealed envelope. The outside of the envelope should be marked, RFP Audit. Alternatively, a copy of the proposal can also be e-mailed to the attention of Irina Lashkhi at lirina@ewmi-gpac.org. Electronic copies of the proposals sent via email should include, RFP Audit in the subject line of the email. 2. Submission Requirements a. State the name of the audit firm, address, telephone number and contact person for the proposal submission. b. Provide a brief description of the history and your firms experience in providing audit services to CSOs in Georgia, with specific reference to performance of independent financial audits for organizations receiving USAID funding. c. Provide at least three references, with all the contact details for organizations that you have provided audit services for in the last 12-24 months. References should include organizations receiving USAID funding. d. Include a copy of your firms most recent peer review reports or internal quality control reviews, the related letters of comments and the firms responses to the letters of comments for the most recent 3 years. e. Discuss your firms independence with respect to EWMI G-PAC. f. Identify the account team structure your firm would use on the proposed audits and; o List the names of the proposed audit team members and describe each members service role. o Attach resumes for the service team members describing their qualifications including credentials, experience, responsibilities and specifically, their experience with organizations receiving USAID funding. g. Provide a detailed cost proposal. It is anticipated that one audit firm may be selected to provide audit services for several targeted CSOs. These audits may occur concurrently. The cost proposal should therefore include pricing at varying levels of performance as an indication that the audit firm has the capacity and resources to perform more than one audit at the same time. Please provide pricing proposal for performing up to 5 audits. Grants that will be audited will range from $30,000 USD to $200,000 USD. EWMI G-PAC is free and exempt from any taxes, tariffs, duties, consular fees, or other levies imposed by the laws in effect in Georgia. Offers in response to this RFP shall not include any
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host country taxes (including VAT) duties, levies, etc. from which this USAID program is exempt. 3. Evaluation Criteria The award will be made to an offeror whose offer follows the RFP instructions and is judged to be the most advantageous to EWMI G-PAC in terms of cost and delivery. In judging the offers, the following criteria will be used with weights applied accordingly:

Cost (50%) - Based on the total cost of the service presented in the proposal. Offerers should provide pricing proposals for performing up to 5 concurrent audits for the grants range reflected above. Relevant Past Performance (30%) - The offerors qualification and experience in performing audits for organizations receiving USAID funding. Delivery time (10%) - Proposals should include a timeline for performance of an independent financial audit for a small to medium sized CSO in Georgia. Audit firm capacity (10%) - It is anticipated that one audit firm may be selected to provide audit services for several targeted CSOs. These audits may occur concurrently. Therefore audit firms should have a demonstrated capacity to handle multiple engagements concurrently within reasonable costs.

4. RFP Clarifications/Questions All questions and/or clarifications regarding this RFP must be made via email and submitted to lirina@ewmi-gpac.org. Questions and requests for clarification must be received by email no later than 5:00pm on Thursday, November 28, 2013. EWMI G-PAC will share relevant answers with all potential offerers on Monday, December 2, 2013. No phone calls or personal meetings will be accepted in response to this RFP. 5. Eligibility By submitting an offer in response to this RFP, the offeror certifies that it and its principals do not (i) appear on the master list of Specially Designated Nationals and Blocked Persons, which list is maintained by the U.S. Treasurys Office of Foreign Assets Control (OFAC) and is available online at OFACs website : http://www.treasury.gov/resource-center/sanctions/SDN-List/Pages/default.aspx, or (ii) is not included in any supplementary information concerning prohibited individuals or entities that may be provided by USAID. Further, the offeror certifies that it and its principal(s) have not been designated by the United Nations Security (UNSC) sanctions committee established under UNSC Resolution 1267 (1999) (the 1267 Committee) [individuals and entities linked to the Taliban, Usama bin Laden, or the Al Qaida Organization] as listed on the consolidated list available at: http://www.un.org/sc/committees/1267/aq_sanctions_list.shtml. EWMI GPAC will not award a contract to any firm or firms principals who are debarred, suspended, or proposed for debarment. 6. Negotiations Submitted proposals should be the best and final offer. It is anticipated that awards will be made solely on the basis of these original offers. However, EWMI G-PAC reserves the right to conduct negotiations and/or request clarifications prior to awarding a contract. 7. Terms and Conditions This is a Request for Proposal only. Issuance of this RFP does not in any way obligate EWMI GPAC or USAID to award a contract, nor does it commit EWMI G-PAC or USAID to pay for costs incurred in the preparation and submission of a proposal. This solicitation is subject to EWMI G-PACs standard terms and conditions. Any resultant award or purchase order will be governed by these terms and conditions
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SECTION 2: SCOPE OF WORK 1. Audit type and scope EWMI G-PAC will engage audit firms to conduct independent financial audits for 15 to 25 Georgian CSOs. EWMI G-PAC will at its sole discretion, determine the number and the specific CSOs to be audited by each selected audit firm. The independent financial audit will be of funds provided to the CSO by USAID through EWMI G-PAC. The audit must be performed in accordance with U.S. Government Auditing Standards or auditing guidelines of the International Auditing Practices Committee of the International Federation of Accountants (IFAC). 2. Audit objectives The audit must evaluate program implementation actions and accomplishments to determine whether specific costs incurred are allowable, allocable, and reasonable under the agreement terms and applicable cost principles, and to identify areas where fraud and illegal acts have occurred or are likely to have occurred as a result of inadequate internal control. The specific objectives of the audit of the USAID funds are to: a. Express an opinion on whether the fund accountability statement for the EWMI G-PAC funded program presents fairly, in all material respects, revenues received and costs incurred for the period audited in conformity with the terms of the agreements and generally accepted accounting principles or other comprehensive basis of accounting (including the cash receipts and disbursements basis and modifications of the cash basis). b. Evaluate the CSO's internal controls related to the EWMI G-PAC funded program, assess control risk, and identify significant deficiencies including material weaknesses. This evaluation should include the internal control related to required cost-sharing contributions. c. Perform tests to determine whether the recipient complied, in all material respects, with agreement terms (including cost sharing/counterpart contributions, if applicable) and applicable laws and regulations related to the EWMI G-PAC funded program. All material instances of noncompliance and all illegal acts that have occurred or are likely to have occurred should be identified. Such tests should include compliance requirements related to required cost-sharing contributions, if applicable. Tests of compliance should specifically include the following compliance requirements where applicable: activities allowed or unallowed; allowable costs/cost principles; eligibility; cost share; level of effort; earmarking; and reporting. 3. Audit procedures Audit procedures should be formulated by the audit firm to meet the specific objectives listed above. Reference should be made to the audit procedures provided in Chapter 4 of the 2009 Guidelines for Financial Audits Contracted by Foreign Recipients (Guidelines) issued by the USAID Office of Inspector General. 4. Reports The audit firm should submit to EWMI G-PAC a portable document format (PDF) copy of the audit report in English and a PDF copy of the report in the recipient country's official language, if considered appropriate. The format and content of the audit reports should closely follow the following illustrative reports on Chapter 7 of the Guidelines. The report must contain: a. A title page, table of contents, transmittal letter, and a summary which includes: (1) a background section with a general description of the EWMI G-PAC program audited, the period covered, the program objectives, a clear identification of all entities mentioned in the report, whether cost sharing/counterpart contributions were required during the period audited (2) the objectives and scope of the financial audit and a clear explanation of the procedures performed and the scope limitations, if
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any; (3) a brief summary of the audit results on the fund accountability statement, questionable costs, internal control, compliance with agreement terms and applicable laws and regulations, (4) a brief summary of the results of the review of cost sharing/counterpart contributions; and (5) a brief summary of the recipient's management comments regarding its views on the audit and review results and findings; b. The auditor's report on the fund accountability statement, identifying any material questioned costs not fully supported with adequate records or not eligible under the terms of the agreements. Reference should be made to the standards for reporting in Chapter 5 of U.S. Government Auditing Standards and may include; The auditor's report on the fund accountability statement, identifying any material questioned costs not fully supported with adequate records or not eligible under the terms of the agreements; A report on the auditors review of the schedule of cost sharing/counterpart contributions; The auditors report on internal control; The auditor's report on the recipient's compliance with agreement terms and applicable laws and regulations related to EWMI G-PAC funded programs;

The findings contained in the reports on internal control and compliance related to EWMI G-PAC funded programs must include a description of the condition (what is) and criteria (what should be). The cause (why it happened) and effect (what harm was caused by not complying with the criteria) must be included in the findings. In addition, the findings must contain an actionable recommendation that corrects the cause and the condition, as applicable. It is recognized that material internal control weaknesses and noncompliance found by the auditors might not always have all of these elements fully developed, given the scope and objectives of the specific audit. The auditors must, however, at least identify the condition, criteria and possible effect to enable management to determine the effect and cause. This will help management take timely and proper corrective action.1 The reports must also contain, after each recommendation, pertinent views of responsible recipient officials concerning the auditor's findings and actions taken by the recipient to implement the recommendations. If possible, the auditor should obtain written comments. When the auditors disagree with management comments opposing the findings, conclusions or recommendations, they must explain their reasons following the comments. Conversely, the auditors should modify their report if they find the comments valid; Any evidence of fraud or illegal acts that have occurred or are likely to have occurred must be included in a separate written report. This report must include an identification of all questioned costs as a result of fraud or illegal acts, without regard to whether the conditions giving rise to the questioned costs have been corrected or whether the recipient does or does not agree with the findings and questioned costs.

It must be noted that these actionable recommendations will be essential for EWMI G-PACs follow up technical assistance efforts with the CSOs and therefore are a crucial element of the Scope of Work that the Audit Company will be expected to perform.
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