External Financial Audit

Project Description

Under the project Empowering Lives, Transforming Systems: A Multi-Faceted Approach to Substance Use, Mental Health, and Rights in Lebanon Funder by AFD  The project aims to improve access to comprehensive, integrated health and protection services for people who use drugs (PWUD) and other vulnerable groups in Lebanon.

Specific Objectives:

• SO1: Improve access to integrated health, OAT, and harm reduction services
• SO2: Strengthen national systems, coordination, and policy frameworks
• SO3: Enhance research, knowledge production, and advocacy

Main Activities:

• Provision of Opioid Agonist Treatment (OAT) services and follow-up
• Delivery of mental health and psychosocial support services
• Harm reduction outreach, including distribution of kits
• Naloxone training and overdose prevention interventions
• Case management, referrals, and protection services
• Engagement with partners (SIDC and AJEM) in service delivery

Audit Objective

The objective of the audit is to provide an independent and professional opinion on the project’s financial statements and expenditures.

The audit aims to:

• Verify the accuracy and reliability of financial reports
• Ensure eligibility and justification of expenditures
• Assess compliance with internal procedures and agreements

Audit Methodology and Approach

The auditor shall:

• Apply internationally recognized standards (e.g., ISRS 4400 or equivalent)
• Use a sampling methodology ensuring representative coverage of expenditures
• Conduct document review and verification of supporting evidence
• Assess internal financial control systems

Audit Scope and Process

 Scoping Phase

• Initial meeting with Skoun
• Review of financial systems, procedures, and documentation
• Identification of key audit risks  

Audit Execution

The auditor will:

• Verify that expenditures:
  • Were incurred within the project period (starting January 2026)
  • Are aligned with the approved budget
  • Are necessary for project implementation
• Check:
  • Availability of supporting documents (invoices, contracts, proof of payment)
  • Proper recording in accounting systems
  • Correct allocation of costs
• Review:
  • Partner expenditures (SIDC and AJEM)
  • Compliance with financial and contractual procedures
  • Procurement processes and supporting documentation

Deliverables

The auditor is expected to provide:

• Inception / Scoping Report
• Interim Audit Report (Tranche 1):
  • To be submitted no later than 3 months after completion of Tranche 1
  • Expected timeframe: May–August 2027
• Final Audit Report (Tranche 2):
  • To be submitted no later than 6 months after completion of Tranche 2
  • Expected timeframe: July 2028 – January 2029
• The final audit report shall include:
  • Detailed findings
  • Identification of any ineligible expenditures
  • Auditor’s opinion
• Management Letter outlining:
  • Key findings
  • Risks identified
  • Practical recommendations.
  • The overall audit engagement is expected to extend until January 2029

Reference Documents

The following documents will be made available:

• Project budget and financial reports
• Accounting records and ledgers
• Supporting documentation (contracts, invoices, payments)
• Partnership agreements (SIDC and AJEM)

Internal financial and procurement procedures

Auditor Profile

The selected auditor must meet the following criteria:

• Bachelor’s degree in Accounting, Finance, or a related field
• Certified auditor or chartered accountant
• Member of a recognized national or international accounting body (e.g., IFAC-affiliated)
• Minimum of 5+ years of relevant audit experience
• Proven experience in auditing NGOs and donor-funded projects
• Strong expertise in:
  • Financial compliance and auditing standards
  • Multi-partner and consortium audits
  • Internal control systems

Technical and Financial Proposal

Interested auditors must submit:

Technical Proposal:

• Proposed methodology
• Relevant experience and references
• Team composition and roles
• Workplan and timeline

Financial Proposal:

• Total cost (all inclusive)
• Breakdown of fees
• Proposed payment schedule