Terms of Reference (ToR)
Engagement of an External Auditor for the Project: “Enhancing the Resilience of Indigenous Communities (IPs) to Climate Change Impacts and Strengthening Their Socio-Economic Position in Caraga, Mindanao”
1. Background
The project “Enhancing the Resilience of Indigenous Communities (IPs) to Climate Change Impacts and Strengthening Their Socio-Economic Position in Caraga, Mindanao” is implemented by Ecosystems Work for Essential Benefits (ECOWEB), Inc., in partnership with Help – Hilfe zur Selbsthilfe e.V., and funded by bengo/Engagement Global.
The project aims to contribute to the legal and socio-economic resilience and self-determination of indigenous peoples in Caraga by strengthening Indigenous Political Structures (IPS), improving ancestral domain governance, and promoting climate-smart livelihoods. The total project funding amounts to €851,142.66, with implementation from December 1, 2022, to April 30, 2025.
As part of its financial accountability requirements, Help – Hilfe zur Selbsthilfe e.V. thru ECOWEB seeks to engage an independent external auditor to conduct a project financial audit to ensure compliance with donor and regulatory financial guidelines, transparency, and the proper use of funds.
2. Objectives of the External Audit
The objectives of the external audit are to:
- Verify financial statements for accuracy and compliance with the project financing plan and donor requirements.
- Ensure that project funds have been used efficiently and economically for the intended purpose.
- Assess compliance with financial management policies, including procurement and reporting requirements.
- Identify any irregularities in financial transactions and recommend corrective actions.
- Provide an independent auditor’s certificate in line with international auditing standards and donor requirements.
- Assess financial controls and risk management mechanisms within the project.
3. Scope of Work
The audit will cover the entire project period from December 1, 2022, to April 30, 2025 and will focus on the following key areas:
A. Financial Review
- Review of financial statements, including income, expenditure, and fund balances.
- Verification of bank reconciliations, cash flows, and fund utilization.
- Review of the budget execution against actual expenditures.
B. Compliance Review
- Ensure compliance with ECOWEB’s financial policies and procedures.
- Verify compliance with donor requirements, particularly those set by Help – Hilfe zur Selbsthilfe e.V. and bengo/Engagement Global.
- Assess adherence to procurement policies, including competitive bidding and documentation requirements.
C. Internal Controls & Risk Assessment
- Evaluate the effectiveness of internal financial controls in preventing fraud and mismanagement.
- Identify gaps in financial processes and provide recommendations for improvement.
D. Audit Reporting
- Issue an Independent Auditor’s Report, including findings, recommendations, and an auditor’s certificate as required by the donor.
- Provide a management letter detailing observations and recommendations for improving financial management.
4. Methodology
The auditor is expected to use internationally recognized audit standards, including:
- International Standards on Auditing (ISA).
- International Public Sector Accounting Standards (IPSAS) for financial reporting.
- Compliance with bengo/Engagement Global financial regulations.
The audit process will involve:
- Review of project financial statements and supporting documentation.
- Interviews with ECOWEB finance and project staff.
- Site visits (if necessary) to verify financial transactions and asset existence.
- Evaluation of financial controls and risk mitigation strategies.
5. Deliverables & Timeline
The auditor is expected to complete the audit and submit all reports within the following timeline:
| Deliverable | Description | Due Date |
| Inception Report | Detailed audit methodology, work plan, and document review list. | Week 1-2 |
| Field Audit | On-site verification of financial records and transactions. | Week 3 |
| Draft Audit Report | Preliminary findings for review by ECOWEB. | Week 5 |
| Final Audit Report & Management Letter | Finalized audit findings, recommendations, and auditor’s certificate. | Week 6 |
6. Auditor Qualifications & Experience
The selected auditor must meet the following qualifications:
- Licensed and accredited external auditor in the Philippines.
- Minimum of 7 years of experience in financial audits for NGOs and international donor-funded projects.
- Demonstrated experience in auditing projects funded by international donors (e.g., BMZ, EU, USAID, UN, INGOs, or similar agencies).
- Familiarity with Philippine tax laws and international financial reporting standards.
- Strong knowledge of procurement and financial compliance requirements for donor-funded projects.
- No prior involvement in ECOWEB’s financial management to ensure independence and impartiality.
7. Payment Terms & Budget
The audit contract shall be based on a fixed fee structure. Payments will be made as follows:
| Milestone | Payment Percentage |
| Upon contract signing & submission of inception report | 30% |
| Upon completion of field audit & submission of draft report | 40% |
| Upon submission and approval of final audit report | 30% |
The auditor shall submit a financial proposal detailing professional fees and any related costs, ensuring cost-effectiveness while maintaining quality standards.
8. Application Process
Interested audit firms or individual auditors must submit:
- Technical proposal detailing the audit approach, methodology, and work plan.
- Financial proposal with a breakdown of professional fees and associated costs.
- Firm profile and CVs of key personnel to be assigned to the audit.
- Copy of accreditation/licensure from the relevant regulatory body.
- Sample audit report from a similar engagement (confidentiality maintained).
Deadline for submission: April 21, 2025
Applications should be sent to: ecoweb@ecowebph.org, cc kronenberger@help-ev.de
9. Ethical Considerations & Confidentiality
The auditor must:
- Maintain confidentiality of all financial information and project records.
- Adhere to ethical auditing standards to ensure an unbiased assessment.
- Avoid conflicts of interest and disclose any prior relationship with ECOWEB.
10. Governing Law & Dispute Resolution
- This engagement shall be governed by Philippine laws and international audit standards.
- Any disputes arising from this contract shall be amicably resolved; if unresolved, arbitration shall be sought in accordance with Philippine dispute resolution laws.
11. Conclusion
This external audit engagement is critical in ensuring the transparency, accountability, and compliance of the project with donor requirements. The selected auditor will play a key role in validating the financial integrity of ECOWEB’s operations, helping ensure the continued trust of donors and stakeholders.
