TERMS OF REFERENCE (TOR) FOR AUDIT OF INSTITUTIONAL CAPACITY DEVELOPMENT PROJECT UNDER THE “INCLUSIVE REFUGEE RESPONSES IN KENYA 2023-2026” PROGRAMME

**TERMS OF REFERENCE (TOR) FOR AUDIT OF INSTITUTIONAL CAPACITY DEVELOPMENT PROJECT UNDER THE “INCLUSIVE REFUGEE RESPONSES IN KENYA 2023-2026” PROGRAMME FOR THE PERIOD ENDING 31 12 2025.**

**1.0 BACKGROUND AND ORGANIZATION PROFILE**

**1.1 About RCK**

REFUGEE CONSORTIUM OF KENYA (RCK), is a nationally recognized human rights organization founded in 1998, mandated to advance refugee protection, access to justice, and social inclusion in Kenya. RCK delivers its mandate through legal aid and strategic litigation, policy and advocacy, peace and social justice programming, mental health and psychosocial support, and women and girls’ empowerment, with a strong emphasis on evidence-based engagement and systems strengthening.

**1.2 About the project**

The Institution Capacity Development Project (ICDP), being implemented by the Refugee Consortium of Kenya (RCK) with support from the Royal Danish Embassy, aims at enhancing the institutional capacity of the Government of Kenya (GoK) at both national and county levels to offer inclusive services to refugees and host populations. The project promotes inclusive refugee responses and access to services, specifically in the areas of water, health, and education, by providing legal and policy support to relevant government stakeholders.

The original project period was from 01 August 2024 to 30th June 2026 with a budget of DDK 10million. However, RCK has been granted no cost extension and the project will not end by 30th June 2027.

**1.3 Purpose of this Audit**

In line with the provisions of article 7.6 of the signed agreement between RCK and the Embassy and in accordance of international accounting standards. RCK is expected to carry out project audit for the cycle period ending 31 December of every year per.

The purpose of the Audit is to provide assurance to the Royal Danish Embassy and RCK management that project funds have been used for the intended purposes and in accordance with the project agreement, approved budget, and applicable donor regulations.

The audit will also assess whether appropriate financial management systems, internal controls, and procurement procedures were applied in the implementation of the project. RCK calls of qualified firms to audit the period 01 August 2024 to 31 December 2025. More information about the audit requirement and documents will be provided to the winning bid.

**2.0 AUDIT OBJECTIVES**

The immediate objectives of the audits will be to:

• Express an opinion whether the projects’ financial statements of the Partner give a true and fair view of the state of the projects’ financial affairs for the project period in accordance with internationally recognized audit principles and as required by Article 7 of the Contract between the Donor and the Partner;

• Review and evaluate the project’s accounting policies and administrative controls and report any significant weaknesses together with recommendations for improvement,

• Review and comment on the use of project funds vis a vis the project document and the approved work plan and budget in relation to the agreement between the Partner and Donor,

• Review and verify that project assets are correctly received and registered in a fixed asset register. Also verify that any asset disposals are done in a transparent and correct manner;

• Recommend possible improvements and/or action in any areas of weaknesses noted.

**2.0 SCOPE OF THE AUDIT**

The audit shall be conducted in accordance with internationally recognized international audit principles and as per project agreement between RCK and The Danish Embassy-Nairobi. To ensure that the audit objectives are met, it is recommended that at least the following is included in the scope:

a) Budget Compliance: Confirm expenditure statement in accordance with the approved budget and the total budget has not been exceeded and funds were used only for agreed purposes in line with Article 7.6 of the grant agreement.

b) Assessment of the adequacy of internal controls over funds received and utilized by the Projects,

c) Assessment of the adequacy of the systems of control over procurement of project supplies, equipment and services,

d) Verification of Project’s income and expenditure and the control of fixed assets as specified hereunder (but not limited to):

i.Check and/or verify the vouchers and other relevant documents,

ii.Request analysis and/or explanation on any expenditure to the satisfaction of the Auditor,

iii.Perform walk through tests to confirm the correctness of the descriptions and sources of the documents,

iv.Evaluate the evidence, i.e., vouchers and receipts, to determine their reliability and authenticity,

v.Assess the usage of the assets by going through various records,

e) Value-for-money audit and evaluation of the Project expenditure against the authorized work plans and budgets in order to assess their relevance and appropriateness.

f) Review the Partners’ monthly payrolls to ensure salaries paid are in