Company Profile

Established in 2005, Fairtrade Africa is the umbrella organization representing Fairtrade certified producers in Africa and is a member of Fairtrade International (FI). FTA aims to effectively represent producers within the International Fairtrade system and to contribute to the livelihood improvement of African and Middle Eastern producers by increasing access to markets. Established in 2005, FTA directs policy and strategic development of the organization, including its Secretariat in Nairobi and the four (4) regional offices. FTA works within the Fairtrade system to support over 1,055,000 farmers and workers in over 520 producer organizations spread over 33 countries to access better prices, decent working conditions, and fairer terms of trade

Fairtrade Africa is owned by its members, who are African producer organizations certified against international Fairtrade Standards producing traditional export commodities such as coffee, cocoa, tea, cut flowers, cane sugar, wine, cotton, bananas, mango, pineapples and non-traditional commodities including shea butter, rooibos tea, vegetables and fresh and dry fruits. Fairtrade Africa is made up of both Small Producer Organizations (SPOs) and Hired Labour Organizations (HLO). In HLOs, the focus is on supporting companies that employ hired labour to supply better working conditions for their workers while in SPOs the focus is on members who are smallholders who run their farms mainly using their own and their family labour.

Fairtrade Africa’s interventions are guided by the Fairtrade Theory of Change which visually expresses how these ultimately lead to global Fairtrade Goals. You can read more about FTA at www.fairtradeafrica.net

Job Description

Terms of Reference –Financial External Audit
Call for consultants
Lot 1 – Kukuom Union and Lot 2 – Kuapa Kukoo Farmers Union

Fairtrade Deutschland e.V.
Fairtrade Germany (Fairtrade Deutschland) is a non-profit organization dedicated to promoting fair trade practices within Germany. It is part of the global Fairtrade system, which aims to create better trading conditions and promote sustainability for producers in developing countries. Fairtrade Germany connects consumers, businesses, and producer organizations to foster a more equitable global trade system. They work to ensure that small-scale farmers and workers—especially in the Global South—receive fair prices for their products and enjoy decent working conditions. This includes setting and monitoring compliance with Fairtrade standards, which cover economic, social, and environmental criteria

Lot 1 - Kukuom Cooperative Farmers Union
The Kukuom (AGL) Cooperative Cocoa Farmers and Marketing Union is an organized cocoa farmers’ union which emanated from communities within the Kukuom cocoa district in the Asunafo South District in the Ahafo Region. The union was formed on 3rd November 2011 and currently has 29 primary societies with membership strength of Three Thousand Two Hundred and Thirty-Eight (3,238) comprising Two Thousand and Fifty-Four (2,054) males and One Thousand One Hundred and Eighty-Four (1184). The union has its office in Kukuom.

The union is registered under the Department of Cooperative and also joined the Fairtrade system in 2012 after going through a successful Cooperative and FLO-Cert Audit. The union is Fairtrade certified till date.

The Kukuom Income improvement project is financed by Kukuom Partners and jointly implemented by Kukuom Union, Fairtrade Germany and Fairtrade Africa to improve the socioeconomic conditions of smallholder farmers within the Kukuom societies in the Asunafo South District in the Ahafo Region.

Lot 2 – Kuapa Kokoo Cooperative Farmers Union
Kuapa Kokoo organization was founded first as a licensed Buying Company (LBC) in response to the partial liberalization of the cocoa sector by the government of Ghana in 1993 to allow private companies to participate in the internal marketing of cocoa. In 1995, the farmers who were then supplying cocoa to the company were organized to form Kuapa Kokoo Farmers Union (KKFU) with membership of 2,000 across 2 cocoa regions in Ghana. The farmer union became Fairtrade certified in 1995 and Rainforest Alliance certified in 2015 as well to produce ethical and sustainable cocoa.
Kuapa Kokoo membership has grown to 100,000 cocoa farmers with 33% representing women. All cocoa beans produced by the members are either Fairtrade or both Fairtrade and Rainforest Alliance certified. Kuapa Kokoo as a cooperative registered entity elects National Executive Council members responsible for the management and supervision of the union on behalf of the members.

Objective of the financial audit
FTA, in collaboration with Kukuom Union, in collaboration with FTA, is submitting a call for tenders to contract a private external audit firm with experience in non-profit organisations, to carry out audits of the financial statements of the income improvement project.

This audit must be carried out in compliance with international auditing standards and consider the Fairtrade Germany guidelines stipulated in the following methodology and the appendices.

Scope of Audit
The external audits will be carried out on the financial statements of the income improvement project at these dates (see appendix 3 for summarized timeline of dates):

1. Report 1 on costs incurred from September 2023 to February 2024 (for Kukuom cooperative)
2. Report 2 on costs incurred from March 2024 to February 2025 (for Kukuom cooperative, KKFU cooperative and FTA)
3. Report 3 on costs incurred from March 2025 to February 2026 (prospective, depending on the outcomes of the cooperation)

Amount
The overall amount to be audited is between 300.000 and 350.000 €.
Budget breakdowns will be communicated to the selected consultant.

Expected outcomes
The external financial audit for 2022 should include the following auditing and control measures.
Financial audit – Terms of Reference

1. Verifying accounting records for correctness and completeness for the time of 1st January to 31st December 2022
2. Verifying the financial report in which all project-related revenues and expenditure must be shown for the relevant period and for which it must be confirmed that receipts are provided for all revenues and expenditure.

• Verifying how the Project funds provided have been managed including;

1. Project funds transferred to the project partner or during the defined term
2. Interest earned during the defined term from project funds transferred to the project partner
3. Other revenues from the project activity.

• Verifying the eligibility of costs with the terms and conditions of the Project Agreement (to what extent the funds have been used appropriately and were necessary for the purpose of carrying out the planned project objectives and activities). The Auditor also reports on ineligible costs.
• Verifying the cost-effectiveness of expenditure with regard to financial resources (to be used economically and as effectively as possible). The Auditor examines whether KKFU has complied with the rules for accounting and record keeping of the Project Agreement in order to assess whether an efficient and effective expenditure verification of the financial report is feasible and whether KKFU has maintained an acceptable system of accounting and control.
• Further, the Auditor reconciles the information in the financial report to KKFU´s accounting system and records (e.g. trial balance, general ledger accounts, sub ledgers etc.) and verifies whether the financial statements are accurate and correspond with the books of accounts of the Project.
• Verifying the personnel costs and social security contributions to ensure that they are in line with local standards, legal in the project country and that they comply with contracts and that the contributions required by law are being withheld.
• Verifying that expenditures for a transaction or action have been accurately and properly recorded in KKFU’s accounting system and the financial report and that it is supported by appropriate evidence and supporting documents.
• Verifying whether the budget in the financial report corresponds with the budget of the Project Agreement and that expenditure incurred was foreseen in the budget of the Project and assigned to the correct budget lines; and that all expenditures comply with the principles of sound financial management.
• Verifying that each transaction has a unique sequence number which allows easy access to the original supporting vouchers (i.e. 3rd party’s invoices, receipts, goods receipt notes, tendering documents, payroll records, etc.). Further, the Auditor verifies that the original vouchers are marked with the sequence number and with all relevant information such as classification code, initials for approval and for receipt of payment, payment date etc.
• Where the Project generates income, or involves contributions from KKFU, or other sources, the Auditor determines which controls exist to ensure completeness and performs checks to ensure that the reported income is complete.
• Verifying the economic use of project equipment.
• Verifying that the management of project funds responds to generally acknowledged principles of finance administration.
• Verifying the procured inventory, where it is being held and whether it has been/is being used appropriately for the purpose of carrying out the planned project objectives and activities.
• Where applicable, the Auditor examines which procurement rules apply for a certain expenditure.
• ​When examining procurement documentation, the Auditor takes into account the risk indicators listed below and reports, if applicable, which of these indicators were found: o Inconsistencies in the dates of the documents or illogical sequence of dates;

1. Unusual similarities in offers of candidates participating in the same tender;
2. Inconsistencies in the selection and award decision process;
3. Same tenderer (or group of tenderers) is invited to different tenders with unusual frequency;
4. Same tenderer (or group of tenderers) wins an unusual proportion of bids;
5. A tenderer is frequently awarded contracts for different types of goods or services;
6. Winning tenderer invoices additional goods not foreseen in the offer;
7. Details on the invoice do not accord with tender details for the good.

• Verifying and confirming that project-relevant documentation is complete and correct.

The Auditor obtains sufficient and appropriate verification evidence to be able to draw up a report of factual findings.

CONTRACT AND AUDIT PREPARATION
After consulting with other project partners, Fairtrade Germany enters into a contract with the external auditor. The contract regulates the following points:

• Subject of the audit (projects)
• Period to be audited
• Place of audit
• Audit costs
• Timing line (the audit should be scheduled so that it is possible for Fairtrade Germany to issue the supporting documentation in time)
• Duties of the external auditor and the contracting party
• Scope of Audit

Once work on the external audit has commenced, project-relevant documentation can be made available to the auditor by the cooperatives, e.g.:

• Project description
• Project agreement (including budget) and respective amendments and annexes
• Any changes to the budget
• All project-relevant receipts (regarding revenues, expenditure, transfer of funds, exchange, etc.)
• All project-relevant contracts (personnel and service contracts, rental agreements, construction contracts, etc.)
• All project-relevant contract award documentation (including notes on contracts awarded to service providers)
• Further project-relevant documents requested in the course of the external audit.

AUDIT REPORTS
The report of the external audit must include the following:

• Presentation of the audit assignment and scope with extensive comments on the audit findings. The auditor must also state which documents were used for the audit of appropriate use of funds and compliance within the project term.
• Recommendations regarding complaints.
• Comment on how audit observations from previous years were followed up on, if applicable.
• Deviations of actual expenditure from the planned expenditure in the most recent budget that exceed 20% of individual budget items (main items in the budget) or budget sub-categories (budget lines), must be explained and reasoned.
• A statement on application of funds with documentary proof in line with the Budget (most recent version) and annual financial report structure which was provided by KKFU to project partners for 2022.
• The comparison of planned and actual expenditure is shown in the currency in which the expenditure was incurred.
• A detailed list of receipts and of the final balance with a confirmation: o It is confirmed that no funds were available for the financing of the project other than the receipts detailed above. It is also confirmed that all expenditure was necessary, that funds were utilised efficiently and economically and that the information given conforms with the books and vouchers.
• The final audit certificate must state the following (minimum requirement):
• “We hereby certify that we have audited the statement of accounts of KKFU regarding the financing of the project [name] in the period of January 1st to December 31st, 2022. Our audit was carried out based on the following requirements pertaining to the use of funding: [List of relevant contracts and documents]. To this end, we have inspected the books and receipts. Based on our audit, we confirm that:

1. All income and expenditure have been properly documented by means of receipts
2. The documented expenditure complied with its application and project approval and was in keeping with the appointed purpose and the most recent budget. Any deviations from the budget have been explained separately.
3. Documented income that is accounted for as contributions made by the project partner (KKFU), the target group and/or other agencies in the project country has been specified correctly and its origin explained in accordance with specifications.
4. The donor’s conditions that were specified in the project agreement were met (were not met in the following points).
5. Special remarks.”

Following this, the audit should provide specific statements on the following questions:

1. To what extent has all income and expenditure been properly documented by means of receipts?
2. To what extent has the documented expenditure complied with its application and project approval and to what extent is it in keeping with the appointed purpose and the annual budget? Have any deviations from the budget been explained separately?
3. To what extent has documented income, that is accounted for as contributions made by KKFU, the target group and/or other agencies in the project country been specified correctly and its origin explained in accordance with specifications?
4. Have generally acknowledged principles of finance administration and funds management been applied in this project?
5. To what extent were the donor’s conditions that were specified in the project agreement met? What response was there to these conditions? Which of these conditions were not adhered to and were reasons given for this?
6. Which special aspects – positive or negative – should be mentioned about this project? As audit certificates replace receipts as proof of proper use of funds, the auditor is required to provide information in the audit certificate about any special aspects relating to the project.

• Specific statements on the audit conducted on the project (i.e. which revenues and expenditure were examined, whether planned project activities were implemented) and on the individual audit findings must be made. If there were no findings, this must also be explicitly mentioned in the report.
• Audit certificates can be submitted in German or English.