1. INTRODUCTION

Caritas Austria is an international NGO implementing activities in the fields of emergency relief and rehabilitation as well as development cooperation, in countries struck by conflicts or natural disasters. Caritas Austria has been supporting projects in the Middle East for several years, addressing social needs like care for children and youth, programmes for women and the integration of minorities, elderly care, support of persons with disabilities, agricultural projects, etc. Since the start of the Syrian civil war in 2011, Caritas Austria has increased its support for projects supporting families affected by the crises. In the past years, a wide range of different projects were implemented responding to humanitarian needs in collaboration with our local partners. The education sector has been a focus for Caritas Austria and its local partners in the Middle East.

With the current programme “Regional Holistic Education Programme IV for vulnerable children in Jordan, Lebanon and Syria (RHEP IV)”, vulnerable children in Syria, Lebanon and Jordan are given access to relevant, high-quality education. In addition to access to educational opportunities, children are supported through psychosocial measures in order to be able to deal with the consequences of war and displacement in the best possible way. Teaching staff receives targeted training to convey school content to vulnerable children in a learner-centered manner while taking their specific needs into account. Parents and legal guardians of children are included in the program through special offers. Partner schools benefit from an improvement in the school infrastructure.

2. BACKGROUND OF THE PROJECT

1. Back donor’s contract number: 12 BA 2370F- 367/ 24 BS

2. Caritas Austria’s project number and official project title: 2409085 Regional Holistic Education Programme IV for vulnerable children in Jordan, Lebanon and Syria (RHEP IV)

3. Project duration/implementing period: 01.09.2024 – 31.08.2025

4. Official project budgets (with indication of donor’s contribution):

   Total project budget: EUR 1.250.125,00

   Donor contribution (95%): EUR 1.187.618,75

   Budget per country

Country

Budget subjected to Audit[1]

Location of audit: Syria (Damascus & Aleppo) - € 442.426

Lebanon (Beirut) - € 444.600

Jordan (Amman) - € 210.000

For further information please acces https://wolke.caritas.at/s/A25nkHoPWHZEnSc (Password: Tde7on6iGk)

1. Short project description:

Impact:

In line with SDG 4, the programme contributes to life-long positive outcomes in terms of personal development, participation in society, and economic empowerment of vulnerable children affected by the multiple crises in Jordan, Lebanon and Syria including economic, social and humanitarian crises.

Programme outcomes and outputs:

Outcome (specific objective): Vulnerable children, affected by the multiple crises in Jordan, Lebanon and Syria, progress academically and socio-emotionally within protective and supportive learning environments.

Output 1.1: Children are enabled to access safe learning environments

Output 1.2: Teachers and staff are empowered through teacher training, capacity building and staff care

Output 1.3: Children show academic progress and improved socio-emotional learning

Output 1.4: Caregivers and students are engaged in their community and in supportive relationships

Target group:

Total number of individuals: 2.705 persons:

The primary target group of the programme are highly vulnerable children (including IDPs, refugees and host community children) between 5 and 18 years old in Jordan, Lebanon and Syria, who are unable to enroll in formal education or are at risk of dropping out. Special attention will be given to CwD, as well as children with special needs and learning difficulties. In Lebanon this will be 100% of the targeted children and in Syria and Jordan between 5% - 10%. In light of the holistic approach of the programme, teachers and caregivers will also be targeted via specific and tailored activities, as noted below.

Indirect beneficiaries: All children attending schools and not only those directly supported with the project activities, benefit indirectly from the program at different levels, e.g. by contributing to the creation of safe, physical learning environments for children through maintenance works in schools, or through the professional development of teachers through Teachers training.

Target regions/locations:

Jordan: Amman, Balqa’a (Fuheis), Mafraq

Lebanon: Mount Lebanon, Bekaa

Syria: Aleppo, Damascus

Activities related to OPs:

• Provision of school fees, transportation, stationary, and snacks.
• Provision of hygiene, therapeutic and educational material.
• Children provided with assistive devices
• Provision of MPCA to families and school staff.
• Infrastructure rehabilitation in schools and learning centers.
• Provision of diesel oil for heating centers
• Training on learner centered teaching methods including inclusive education provided.
• Capacity building and staff care conducted.
• Provision of KG classes and continuous follow-up by social workers on attendance, re-enrolment and activities.
• Provision of PSS and educational activities for children.
• Targeted and continuous specialised services (therapy, counselling, etc.)
• Tutoring and remedial classes for selected children at risk of drop out.
• Parents Teachers Meetings and awareness sessions for caregivers.
• Peacemaker initiatives for children Grades 7-8 to support life-skills and promote student engagement in their community.
• Provide literacy classes for illiterate women to empower and help them support their children in their education.

3. OBJECTIVES OF THE EXPENDITURE VERIFICATION

The objectives of the audit are:

1. to provide a professional opinion on the quality of processes and accounting practices within the audited organisation and specifically as applied within the project at hand following point 5 (procedures to be performed by the Auditor)
2. to independently verify that the project mentioned above has been implemented in compliance with the requirements of the following documents of reference:

• Legislation: National legislation, with particular attention to:
  • Respective social and labour law (including staff and salary regulations).
  • Regulations on VAT and other taxes
  • National accounting policies
• Project: Cooperation agreement relative to the project or to the partner organisation, Project Documents, Terms of Reference (TOR), Budgets, plans of project activities.
• Accounting: Accounting documents subject to the financial audit, financial and operational reports concerning the project.
• Auditor: The present terms of reference and the related mandate for financial audit.

1. to provide a professional opinion on the quality of the audited organisation’s financial reporting and its suitability for the requirements of the donors;
2. Verification of the correctness of the accounting on the basis of original documents (including contracts, reports on the services provided, invoices, auxiliary materials);
3. Verification of the efficiency, the reasonableness, and appropriateness of project expenditures;
4. Verification of the classification of expenses within the budget lines of the planned budget: personnel, travel costs and other expenses (e.g. rent, supplies, operating costs, etc.);
5. Verification of the expenditures and income, any duplication of funding and the overall financial management of the project;
6. Review of financial flows (project-related cash flows, original invoices, payment receipts, bank statements, etc.);
7. Confirmation of the correct accounting of expenses at the bank accounts of the association on the basis of original documents;
8. Verification of the plausibility of the exchange rates € / local currency;
9. Confirmation of all income in foreign currencies to the bank accounts of the partner organisation on the basis of briefing notes and statements of accounting and confirming the proper play in accordance with statutory accounting rules on the books in the respective country.

4. MINIMUM REQUIREMENTS FOR AUDITORS AND AUDIT STANDARDS

1. The Auditor is a member of a national accounting or auditing body or institution which in turn is a member of the International Federation of Accountants (IFAC).
2. The Auditor is a member of a national accounting or auditing body or institution. Although this organisation is not a member of the IFAC, the Auditor commits himself/herself to undertake this Engagement in accordance with the IFAC standards and ethics.
3. The Auditor is registered as a statutory auditor in the public register of a public oversight body in an EU member state in accordance with the principles of public oversight set out in Directive 2006/43/EC of the European Parliament and of the Council (this applies to auditors and audit firms based in an EU member state).
4. The Auditor is registered as a statutory auditor in the public register of a public oversight body in a third country and this register is subject to principles of public oversight as set out in the legislation of the country concerned (this applies to auditors and audit firms based in a third country).
5. The Auditor shall undertake this Engagement in accordance with:
   • the International Standard on Related Services (ISRS) 4400 Engagements to perform Agreed-upon Procedures regarding Financial Information as promulgated by the IFAC;
   • the IFAC Code of Ethics for Professional Accountants (developed and issued by IFAC’s International Ethics Standards Board for Accountants (IESBA), which establishes fundamental ethical principles for Auditors regarding integrity, objectivity, independence, professional competence and due care, confidentiality, professional behaviour and technical standards. Although ISRS 4400 provides that independence is not a requirement for Agreed-upon procedures engagements, Caritas Austria and its back donor require that the Auditor is independent from the Beneficiary and complies with the independence requirements of the IFAC Code of Ethics for Professional Accountants.
6. The Auditor will employ staff with appropriate professional qualifications and suitable experience with IFAC standards and with experience in verifying financial information of projects comparable in size and complexity to the project subject to the expenditure verification.
7. The Auditor must have sufficient knowledge of relevant laws, regulations and rules in the countries concerned i.e. where the project is implemented. This includes but is not limited to the company law, taxation, social security and labour regulations, accounting and reporting.
8. The Auditor will provide the Contractor with CVs of the staff/experts involved in the expenditure verification. The CVs will include appropriate details for the purpose of the evaluation of the offer on the relevant specific experience for this expenditure verification and the qualifying work carried out in the past.
9. The Auditor will conduct the expenditure verification locally, on-site, with access to original documents. The locations of the audit are defined in 2.) d)

5. PROCEDURES to be performed by the AUDITOR

The auditor verifies based on original documents that

• costs declared in the Financial Statement are justified by the relevant supporting documents
• costs meet eligibility criteria stipulated in the Grant Agreement and its annexes
• original vouchers are clearly associated with the project (stamped) and the projects time frame
• all invoices have been settled and paid for (Devaluation of the original documents with the notation " Federal Ministry of the Interior " on all invoices and payment receipts);
• own funds were used
• financial resources have been used efficiently, costs effectively and solely for the purpose for which they were provided
• generally Accepted Accounting Standards are met
• conversion of currency has been calculated correctly
• accrued interest has been declared
• expense have been correctly assigned to budget items
• verification of the activity records and time sheets of the employees and the allocation of the costs incurred to the positions of the official budget
• over expenditure, if any, lies within the thresholds stipulated in the Grant Agreement and the Project Manual
• indirect costs/ overhead costs, if foreseen in the budget, have to be calculated properly
• the calculation of personnel costs, including documentation, has been carried out in accordance with the guidelines;
• procurement regulations have been met
• calculation and cost allocation keys and any explanations of these (why is the allocation made to this extent) are available if these have been used (e.g. rental costs, overhead costs);
• other revenues originally not foreseen in the financial plan were registered or revenues foreseen in the financial plan were not realized
• the contract, terms and conditions have been complied with
• applicable tax laws and regulations have been complied with
• an adequate, effective Internal Control System exists
• all assets and equipment have been incorporated in the asset list
• assets and equipment have been used for the project purposes
• project vehicles, if any, have been used according to the standards set out in the General Terms and Conditions of the Grant Agreement
• regulations on travel expenses have been followed
• sub-grants foreseen in the project document have been provided to third parties and have been properly accounted for on the basis of actual cots
• applicable visibility regulations have been adhered to
• recommendations of the BMI or the auditor have been implemented
• Depreciation on investment goods that continue to be available to the Recipient after the end of the term of the Agreement has been properly calculated, if applicable
• Equipment or services produce or provided by the Recipient itself have been charged at cost only (without any markup)

Additionally

• the auditor provides information on the treatment of taxes (especially VAT) in the financial reports[2].
• examines whether the persons enjoying power of disposal over the bank account are the same or among those officially authorised to represent the Legal Holder of the project
• In case of education and training courses, to examine the relevant invoices, bills, receipts (Fees, food, accommodation, transport, etc) and also the lists pf participants
• examines the tools and procedures of internal control

6. AUDITOR’S REPORT

6.1. The auditor shall produce a draft and a final Expenditure Verification Report based on the official project budget and exactly reflecting its budget line structure.

The audit reports must be written in English and contain at least

• Title
• Contracting Organisation (Caritas Austria)
• Project number and name
• Implementing organisations’ names and contact details
• Brief description of the project and partner(s)
• Reporting period and currency
• Exchange rates used in the financial report (to Euro or to the official project currency, as indicated in the project budget), with detailed explanation of their calculation
• Total amount of budgeted and actual expenditures, with differentiation between direct and indirect costs, as indicated in the official project budget
• Complete list of reported expenditures classified according to the relevant budget lines;
• Total amount of budgeted and actual incomes
• Complete list of project funds transferred, including donors’ names, dates and exchange rates
• Indication on treatment of taxes and especially VAT
• Amount of actual expenditures verified
• Expenditure Coverage Ratio
• Objectives, Scope and Description of the procedures: the auditor should comment each procedure listed under section 5 of the present TORs.
• Findings from the expenditure verification
• Recommendations, if applicable
• Follow up of previous recommendations, if applicable
• Other relevant matters
• Reference to contact persons/sources of information from implementing partner organisation during audit execution
• Auditor's name, position, address, phone, fax and e-mail
• Date, auditor's signature

6.2. The Report shall also comprise the following annexes:

• Financial Statement: overall calculation with comparison of actual expenditures vs. approved budget certified by the company’s formal signature (stamp and signature) and by the formal signature (stamp and signature) of the auditor
• Cash flow statement
• A detailed voucher list classified according to the relevant budget lines
• Bank account statements
• List of payable invoices, if any
• In case ineligible costs are detected, a list of respective vouchers
• Asset list of all goods/equipment financed with project funds with a value of over Euro 800,-
• If expenses contain Value Added Tax (VAT), the Auditor shall certify that Grant Recipient is not exempt from VAT and cannot reclaim it either
• Audit log, documenting which expenses have been verified, in form of a table showing the list of invoices per budget line, invoice number, amount in EUR and all documents (e.g. Invoice, proof of payment from the bank, procurement document, contract etc.) that were used as basis of verification

6.3. A signed original version of the audit reports must be submitted in hardcopy to:

Nr. 2 copies to Caritas Austria

Nr. 1 copy to (each) implementing partner (separated by each implementing partner/country)

7. MANAGEMENT SUPPORT / Contractor’s duties

7.1. Caritas Austria and its implementing partner organisation will provide the external auditor with all necessary information to perform his/her work. Relevant documents must be specified in the Terms of Reference which are annexed to the contract or Engagement Letter.

The following underlying documents are required as a minimum:

• Grant Agreement between Caritas Austria and back donors (if applicable)
• Amendments to the Grant Agreement, if any
• MoU/cooperation agreement between Caritas Austria and its implementing partner organisation(s)
• ToR for the external audit
• Official project budget
• Financial project reports, including complete list of reported expenditures
• Original vouchers/receipts
• Access to the used bookkeeping system
• Access to information related to bank and cash statements
• Any other documents required by the auditor for the performance of his/her tasks

7.2. The Financial Statement (consisting of a summary and a detailed breakdown) includes a budget vs. expenditure comparison and a detailed voucher list classified according to the relevant budget lines and covers all project expenses and funds received from BMI, the grant recipient, other project partners or other donors. Revenues including accrued interest, if any, and calculations of conversions to the contract currency (generally Euro) are to be attested as well.

7.3. The Financial Statement covers all project expenses and funds received from BMI, the grant recipient, other project partners or other donors. The budget vs. expenditure comparison follows the approved budget and shows at least the same level of detail.

Contributions in kind are generally not part of the project budget and are thus not reflected in the Financial Statement.

If, in exceptional cases, the project budget includes expenses which cannot be verified by the Auditor, these expenses must be declared in the Terms of Reference (ToR) and in the Financial Statement.

7.4. The project managers, the accountants and the staff working on the project will be open to collaboration with the auditor.

7.5. The contractor must reserve the right to share the Expenditure Verification Report and its annexes with all donors.

The contractor and its back donor BMI reserves the right to reject the Expenditure Verification Report if it does not comply with the required standards.

BMI may at any time require the submission of the original vouchers. The original vouchers must be available for in situ inspection by BMI at any time for a period of ten years starting from the end of the year during which the last instalment has been disbursed by BMI. BMI shall be allowed to inspect in detail the financial management of the Project at any time.

8. EXPENDITURE COVERAGE RATIO (ECR)[3]

The auditor ensures that the overall ECR is at least 65 %. If he finds an exception rate of less than 10% of the total amount of expenditure verified (i.e. 6,5%) the Auditor finalises the verification procedures and continues with reporting. If the exception rate found is higher than 10 % the Auditor extends verification procedures with reporting regardless of the total exception rate found. The Auditor ensures that the ECR for each expenditure heading and subheading in the Financial Report is at least 10 %.

9. WORK PLAN

The audit / agreed upon procedures shall be carried out during the following months:

RHEP IV Jordan, Lebanon & Syria: September/October 2025.

Please send a letter/Expression of interest/offer* until 20/06/2025

[1] Subject to change in case of late budget modifications

[3] This ratio represents the total amount of expenditure to be verified expressed as a percentage of the total expenditure which has been subject to this audit