Terms of Reference

ENGAGEMENT FOR EXTERNAL AUDIT SERVICES

Practical Action
ABOUT US

We are an International Development Organization putting ingenious ideas to work so people in poverty can change their world. We help people find solutions to some of the world’s toughest problems. Challenges made worse by catastrophic climate change and persistent gender inequality. We collaborate with communities to create ingenious, lasting and locally owned solutions for agriculture, water and waste management, climate resilience and clean energy. And we share what works with others, so answers that start small can grow big.

We are a global change-making group. The group consists of a UK registered charity with community projects in Africa, Asia and Latin America, an independent development publishing company and a technical consulting service. We combine these specialisms to multiply our impact and help shape a world that works better for everyone.

OUR AIMS

We help people find solutions to some of the world’s toughest problems, made worse by

catastrophic climate change and persistent gender inequality. Our aims are to:

• Make agriculture work better for smallholder farmers, many of them women, so they can adapt to climate change and achieve a good standard of living
• Help more people harness the transformational effects of clean affordable energy and reduce avoidable deaths caused by smoke from indoor stoves and fires.
• Make cities in poorer countries cleaner, healthier places to live and work.
• Build disaster resilience into the lives of people threatened by hazards, reducing the risk of hazards and minimizing their impact on lives and livelihoods.

PRACTICAL ACTION RWANDA

In Rwanda, we are recognized leaders in clean cooking and sustainable energy solutions. This includes ground-breaking work in solar, wind and water powered electricity generation, often delivered through independent mini grids. We bring rural communities, people in refugee camps, energy providers and decision makers together to put sustainable, clean energy solutions to work for the people who need them most.

In our strategic business plan 2021-2025, we propose to extend our current reach and scope in Rwanda by deepening our energy work and stretching our portfolio to collaborate with small holder farmers to make agriculture work better for them.

Practical Action

ABOUT THE ROLE

Practical Action Rwanda is seeking to engage a qualified external audit firm to deliver comprehensive auditing services. This engagement encompasses two primary components: 

1. a Statutory Audit of the organization’s overall financial statements and 
2. a Project Specific Audit for the "Renewable Energy for Refugees (Rwanda) - Phase II" project, funded by Sida.

The objective of this assignment is to obtain an independent auditor’s opinion on whether the financial reports present a true and fair view of the organization’s financial position and performance, and to ensure compliance with donor-specific requirements and International Standards on Auditing (ISA).

The selected audit firm will be engaged under a three-year framework contract. However, the contract is subject to annual renewal based on a performance evaluate against the Terms of Reference and the continued requirement for services.

QUALIFICATIONS

To ensure compliance with Rwandan law and international donor standards, the following qualifications are mandatory:

• The firm must be registered and authorized by the Institute of Certified Public Accountants of Rwanda (ICPAR) to grant practicing certificates
• The firm must be on the Rwanda Revenue Authority (RRA) list of approved professional accountants authorized to certify financial statements.
• The guide auditor must hold a CPA (R) designation and be a member in good standing with ICPAR.
• Proven experience in conducting audits under ISA and ISRS 4400 standards.
• Demonstrated expertise in auditing international NGO projects and multi-donor funded programs.
• The firm must demonstrate adherence to the International Code of Ethics for Professional Accountants and have a robust Internal Quality Control Manual.

APPLICATION REQUIREMENTS

Prospective firms must submit a technical and financial proposal: The financial proposal must clearly outline how the scope of work, including the statutory audit, project audit, and the management letter, will be completed within a timeline of 10 to 15 working days

TERMS OF REFERENCE FOR STATUTORY AUDIT OF THE ORGANIZATION’S OVERALL FINANCIAL STATEMENTS

Background

Practical Action is an international development organization registered in England and Wales as a charity and a company limited by guarantee, under the direction of a Board of Trustees with Office in Kacyiru, Gasabo District in Rwanda. 

Practical Action aims to transform the way technology is used to enhance the lives of women and men living in or vulnerable to poverty in 45 countries across Africa, Asia, and Latin America.

Practical Action in Rwanda has a Memorandum of Understanding (MOU) with Ministry of Emergency Management (MINEMA) on improving access to renewable energy for refugees in Rwanda. The areas of intervention are in Kigeme, Mugombwa, Kiziba, Nyabiheke and Mahama camps. 

Practical Action’s focus is primarily on providing renewable electricity services for households and small enterprises, renewable biomass and advanced cooking technologies for households, solar powered community street lighting, as well as solar power for institutions, community facilities and enterprises.

Purpose

The purpose of our engagement is to perform an audit of the financial statements of Practical Action Rwanda (the “Organization”), which comprise the statement of financial position as at 31 March 2026 and the statements of income and expenditure, changes in net assets and cash flows for the year then ended, and the notes, comprising a summary of significant accounting policies and other explanatory information.

Our Letter of Engagement will spell out our responsibilities as auditors of the organization with regard to the financial statements for the year ended 31 March 2026, as well as your responsibilities as management of the Organization with regard to preparation of financial statements for the year ended 31 March 2026.

Requirements

1. The audit will be conducted in accordance with International Standards on Auditing (ISAs).
2. We will obtain sufficient and appropriate evidence to enable an understanding of the accounting and internal controls system, to assess their adequacy and to establish whether proper accounting records have been maintained.

Audit Approach

Our work shall include sufficient tests to establish whether:

1. An adequate budgetary control system is in place to track actual expenditure against budget lines on a regular basis and to take effective remedial action as necessary, with adequate segregation of duties in the maintenance and evaluate of accounts and the performance of reconciliations;
2. Expenditure of Practical Action funds is used in accordance with the relevant and signed MoUs or equivalent, with due attention to economy and efficiency, and only for the purposes for which the funds were provided (confirmation of the amount of funds disbursed and outstanding balances shall be sought and should be provided directly to the auditors);
3. Goods and services have been provided in accordance with the relevant financing agreements/orders and with due regard to agreed procurement best practice;
4. All necessary supporting documents, records, and accounts have been kept in respect of all expenditure reports. Clear linkages should exist between the books of accounts and reports presented by the organization; 
5. Financial reports of the organization give a complete and accurate view of financial performance of the organization for the year under audit;
6. Records of transactions include accurate information regarding any variations in currency exchange rates, where relevant;
7. Expenditure of all projects funds has been approved at the correct level of delegated authority. This includes initial approval to incur expenditure and the payment of claims, invoices, salaries, allowances and any other items of expenditure charged to the projects budget.

Audit Report

We will deliver you with a draft audit report prior to issuance of the final draft report. The final report will include management comments on the auditor’s findings and recommendations. Our audit report will deliver a clear expression on whether the financial statements of the organization are prepared, in all material respects, in accordance with the accounting policies of the organization as well as the basis of our opinion. Where we give a qualified opinion, the factors leading to the qualification shall be given.

Management Letter

In addition to the audit report, we will issue a management letter, in which we will:

1. Give comments and observations on the accounting records, systems, and controls that were examined during the audit.
2. detect specific deficiencies and areas of weakness in systems and controls. 
3. Report on the degree of compliance with laws and regulations and Organization donor requirements and give comments, if any, on the internal and external matters affecting such compliance; and
4.  Communicate any other matters that have come to our attention during the audit which require your attention as management.

AUDIT TERMS OF REFERENCE FOR "RENEWABLE ENERGY FOR REFUGEES (RWANDA) - PHASE II" PROJECT, FUNDED BY SIDA

1. Objectives and scope of the audit

The objective is to audit the (annual) financial report for the period 2025-04-01 to 2026-03-31 as submitted to Sida and to express an audit opinion according to ISA, applying ISA 800/ISA 805, on whether the financial report of Renewable Energy for Refugees (Rwanda) - Phase II project, is in accordance with the Cooperation partner´s accounting records and Sida’s requirements for financial reporting as stipulated in the agreement including appendices between Sida and Cooperation partner (Agreement).

?Additional assignment; according to agree upon procedures ISRS 4400, evaluate the following areas in accordance with the Terms of Reference below

a. Mandatory procedures that must be included:

• Observe whether the financial report is structured in a way that allows for direct comparison with the latest approved budget. 
• Observe and inspect whether the financial report provides information regarding:
• Financial outcome per budget line (both incomes and costs) for the reporting period and columns for cumulative information regarding earlier periods under current agreement.
• When applicable, compare if the opening fund balance for the reporting period matches with what was stated as closing fund balance in the previous reporting period. 
• A disclosure of exchange gains/losses. Inquire and confirm whether the disclosure includes the entire chain of currency exchange from Sida’s disbursement to the handling of the project/programme within the organisation in local currency/ies, if applicable. 
• Explanatory notes (such as, for instance, accounting principles applied for the financial report).
• Amount of funds that has been forwarded to implementing partners, when applicable.

b. Inquire and inspect with what frequency salary costs during the reporting period are debited to the project/programme. 

c. Choose a sample of three individuals for three different months and:

• Inquire and inspect whether there are supporting documentation for debited salary costs.
• Inquire and inspect whether actual time worked is documented and verified by a manager.
• Inquire and inspect within which frequency reconciliations between debited time and actual worked time is performed.
• Inspect whether the Cooperation partner comply with applicable tax legislation with regard to personal income taxes (PAYE) and social security fees.
• evaluate and confirm that the Cooperation partner screens IP’s and/or suppliers to make sure that such parties are not subject to the European Union’s financial sanctions list of persons, groups and organisations (EU Sanctions list). 
• Enquire whether there have been any reported findings from the screening process and if so, report on such findings. 

d. Inspect and confirm that the unspent fund balance (according to the financial report) at the end of the financial year is in line with information provided in the accounting system and/or bank account.

e. Applicable the final year: Inspect and confirm the unspent fund balance (including exchange gains) in the financial report and confirm the amount that shall be repaid to Sida.

f. Follow up of funds that are channelled to implementing partners

Mandatory assignments that must be included if the Cooperation partner forward funds to implementing partners (does not apply to procured contracting partners) (IP’s): Choose a sample of a minimum of 25 % of the total of disbursed funds as well as 25 % of the number of IP’s or a maximum of 10 IP’s.

• Inspect and confirm whether the Cooperation partner has signed agreements with the selected IP’s. 
• Inspect and confirm whether the Cooperation partner, in all agreements entered with IP’s, included the requirement to carry out annual audits. The requirement shall specify that these audits shall be carried out with application of ISA (reporting according to ISA 800/805) and a separate assignment according to ISRS 4400 (Revised) should be included for project/programme assist. If agreements regarding core assist are entered into with IP’s, the audit shall be conducted in accordance with ISA 700 or National standards on auditing. 
• Inquire and inspect whether the Cooperation partner has received financial reports and reporting’s from auditors from all IP’s included in the selected sample: a) 
• Inquire and inspect whether the Cooperation partner has verified if reports from IP’s are in line with the requirements in the Agreement.
• Inquire and inspect whether the Cooperation partner has documented its assessment of the submitted financial reports and reporting from auditors including management responses and action plans from selected IP’s. 
• Inquire and inspect whether the Cooperation partner has documented its follow-up actions based on the information provided in the financial reports and the reporting from the auditor of the selected IP’s. 
• Inquire and inspect whether the Cooperation partner has reported substantial observations from selected IP’s audit reports in its communication with Sida. List observations from IP’s audit reports which have been part of this sample.
• Enquire whether the Cooperation partner has used alternative payment methods. If so, obtain information of the total amount that have been transferred through alternative payment methods. Furthermore, select 40 % or a maximum of 15 Implementing partners where alternative payment methods have been used. evaluate, confirm and report on the below: 
• That the Cooperation partner has followed its routines for the use of alternative payment methods,
• The relevant amount transferred,
• Why the exemption from bank transfers is motivated and authorised in the specific context. 
• Follow up of funds that are disbursed to procured contracting partners 
• Inspect and confirm whether the Cooperation partner has signed contracts with the procured partners. 
• Inspect and confirm whether the Cooperation partner has complied to the plans and routines for monitoring of partners, including financial monitoring, as found in Annex 1 to these Terms of Reference (or subsequent valid version of this plan).
• Inquire and inspect whether the Cooperation partner has documented its assessment and outcomes of the partner monitoring, including actions for follow-up. 
• Inquire and inspect whether the plans and routines for monitoring of partners (Annex 1 or subsequent valid version of this plan) is suitable and adequate for the monitoring including financial monitoring, and, when appropriate, make suggestions for improvement of the control routines. 

III. The reporting 

The reporting shall be signed by the responsible auditor (not just the audit firm) and shall include the title of the responsible auditor. 

Reporting from the ISA assignment

The reporting from the auditor shall include an independent auditor’s report in accordance with the format in standard ISA 800/805 and the auditor’s opinion shall be clearly stated. The financial report that has been the subject of the audit shall be attached to the audit report.

The reporting shall also include a Management letter that discloses all audit findings, as well as weaknesses identified during the audit process. The auditor shall make recommendations to address the identified findings and weaknesses. The recommendations shall be presented in priority order and with a risk classification. 

Measures taken by the Cooperation partner to address weaknesses identified in previous audits shall also be presented in the Management Letter. If the previous audit did not have any findings or weaknesses to be followed up on, a clarification of this must be disclosed in the audit reporting.

If the auditor assesses that no findings or weaknesses have been identified during the audit that would result in a Management Letter, an explanation of this assessment must be disclosed in the audit reporting.

Reporting from the ISRS 4400 assignment

The additional assignment according to agree upon procedures ISRS 4400 (Revised) under section II, shall be reported separately in an “Agreed-upon procedures report”. Performed procedures should be described and the findings should be reported in accordance with the requirements in the International Standard on Related Services 4400 (Revised). 

When applicable, the sample size shall be stated in the report. 

HOW TO APPLY

Interested and qualified audit firm are required to submit their application in a single PDF file via email to recruitment.rwanda@practicalaction.org

• Please make sure that the email subject line clearly indicates the s the external audit application

The application deadline is May 15th, 2026. However, the shortlisting process will be done on the rolling basis until we find the right potential audit firm for further selection steps.

We treat all applications for audit consultancy on their merits and do not take into consideration any factors that are not relevant to the job such as disability, race, age, religion, gender, gender reassignment or sexual orientation.

Practical Action is committed to safeguarding and protecting children and vulnerable adults and as such candidates will be subject to pre-employment checks.

• Applications received after the deadline stated will not be considered. Only shortlisted audits firms will be contacted.