Provision of audit services for KRCS Regional and County Branch Offices ,Northeastern, Upper Eastern and North Rift Regions

Country: Kenya

Organization: Kenya Red Cross Society

Closing date: 25 Aug 2023

REQUEST FOR PROPOSALS

PROVISION OF AUDIT SERVICES TO KRCS REGIONAL OFFICES AND COUNTY BRANCHES (NORTHEASTERN, UPPER EASTERN AND NORTH RIFT REGIONS)

DOCUMENT RELEASE DATE: 15th August 2023

LAST DATE OF RECEIPT OF PROPOSALS: 25th August 2023

TIME: 11:00HRS

TENDER NUMBER: PRF13607

SUBMISSION METHOD EMAIL: tenders@redcross.or.ke

TENDER OPENING VENUE: Teams meeting link to be shared.

TENDER OPENING TIME: 12:00 Noon

Table of Contents

1.0. Introduction. 3

2.0. Request for Audit services. 3

3.0. Scope of the Assignment 3

4.0. Deliverables. 5

5.0. Format of RFP Response and Other Information for Bidders. 5

1.0. Introduction

Kenya Red Cross Society (KRCS) is the largest humanitarian organization in Kenya. Its vision is to be a leading humanitarian organization sustainably promoting the well-being, health and resilience of communities. KRCS is a humanitarian relief organization created through an Act of Parliament, Cap 256 of the Laws of Kenya of 21st December 1965. As a voluntary organization, the Kenya Red Cross operates through a network of 47 branches, eight regional offices and volunteers throughout the country.

The Society is governed by the National Executive Committee (NEC), which provides supervision and is the policy organ of the Society. The NEC has a number of committees which include finance committee and the Audit and Risk Committee.

2.0. Request for Audit services

In, line with KRCS constitutional provisions Article 57, the Society has a responsibility to have the accounts of regions and branches audited by a firm of qualified certified accountants. The audit reports will be presented during branch and regional AGM’s.

This Request for Proposals (RFP) document is intended to lead to identification of a ICPAK registered Audit Firms to provide external audit services for the Society’s three (3) regions i.e., Northeastern, Upper Eastern and North rift and its county branches (See annex 1 with list of regions and branches) contract for a financial audit for the year ending 31st December 2023. It is expected that the initial contract shall be for one (1) year to audit work performed Jan 1, 2023 – Dec 31, 2023.

Based on satisfactory performance and continuation of need, the contract may be renewable in one (1) year increments for up to five years.

The audit of the Society’s donor funded projects and head office unrestricted funds is not within the scope of work in this TOR.

This document constitutes the formal Request for Proposals (RFP) and is being availed to bidders on the KRCS website; www.redcross.or.ke

3.0. Scope of the Assignment

Audit of Region and County branches FY 2023

The financial audit will be carried out in accordance to International Standards on Auditing. The auditor will therefore:

• Have a full understanding of the society’s goals and operations.


• Obtain sufficient audit evidence to substantiate in all material respects the accuracy of the information contained in the Financial Statements.


• Obtain an understanding of internal controls and perform tests of internal control over the Society’s branches and regional offices.


• Perform procedures to determine whether the Society’s branches and regional offices have complied with the relevant guidelines, laws and regulations that could have direct and material effect on the Society.


• Issue Auditor’s opinion in the financial statements for each of the county branches and region


• Submit any consolidation requirements to the group auditors which will include the branch financial audit reports, management letters and any other deliverables.


• Perform any other special audits as required by the society on a request basis.

Detailed Audit requirements

1. It is expected that upon completion of the audit field work, the auditor will prepare and submit the audited financial statements. The financial statements are to be audited as per ISA’s and have all the necessary disclosures in place. The deadlines for the audited financial statements are noted below;


2. 
   
   1. DRAFT audited accounts are expected for the KRCS County branches by 15th March 2024 and FINAL signed audited financial statements are due at the county offices by the 31st March 2024
   
   
   2. DRAFT audited accounts are expected for the KRCS Regional offices by 15th March 2024 and FINAL signed audited financial statements are due at the branches by the 31st March 2024.
   
   


3. Final County and regional level audit reports will be shared with the Society’s institutional auditors by the 31st March 2024 for further consolidation of the Society’s financial statements.


4. The auditor will attend all the county and regional AGMs to read the audit opinion and provide any clarifications required during the meetings on the audited accounts. Respective County branch AGM’s will be held in April whereas regional office AGM’s will be held in May. You will be advised on the AGM dates for planning and attendance.


5. The auditor will also present a management letter on areas of improvement. This report will highlight risks (High, medium, Low), audit observations, root causes, recommendations and management responses. A follow up of the previous year audit observations will also be assessed and noted in the report.


6. The audits will only focus on locally raised resources at the county level and exclude donor funded projects coordinated through KRCS Headquarters.


7. The auditor will attend Field Audit Entry and exit meetings and dates will be advised accordingly. The auditor is expected to share the draft audit findings and draft financial statements during exit meetings.


8. The period under audit is 1st January 2023 to 31st December 2023.


9. Field work commencement dates for the audits will be agreed with yourselves and regional teams. However, it is expected that this should not be later than early February 2023.

4.0. Deliverables

The auditor is expected to perform an audit of the three KRCS regional offices and respective county branch offices (Entities to be audited included in Annex 1).

• Share the Consolidated workings of county and regional audit financials and other deliverables expected.


• Financial audit reports with audit opinions for each county and each regional office.


• Management letter highlighting weaknesses for each county branch and regional office including follow up of previous issues.

5.0. Format of RFP Response and Other Information for Bidders

5.1 The overall summary information regarding the audit services for KRCS regions and branches is given in section 2 –Request for audit services. The bidder shall include in their offer any additional services or items considered necessary for the successful completion of the audit.

5.2 Proposals from bidders should be submitted in two distinct parts, namely technical proposal and financial proposal and these should be clearly marked Tender number.

TENDER NUMBER: PRF13607

PROVISION OF AUDIT SERVICES FOR KRCS REGIONAL AND COUNTY BRANCH OFFICES (NORTHEASTERN, UPPER EASTERN AND NORTH RIFT REGIONS)

Bidders should provide a technical and financial proposal in two separate folders clearly Marked “Technical Proposal + Name of consultant” and “Financial Proposal + Name of consultant” both of which should then be sent to tenders@redcross.or.ke with the subject reading “Tender No. PRF13607: Provision of audit services for KRCS Regional and County Branch Offices (Northeastern, Upper Eastern and North Rift Regions)”.

3.1.3. The Technical Proposal should contain the following:

1. 
   

   Introduction: description of the firm, firm’s qualifications, profile, expertise, number of partners, number of staff, field offices and statutory compliance. Mandatory documents must accompany the proposal and tenders without mandatory documents will not be evaluated. The mandatory documents are;

   
   
   1. ICPAK firm registration certificate
   
   
   2. ICPAK Practicing certificate for partners.
   
   
   3. Valid KRA tax compliance certificate
   
   


2. 
   

   Back ground: Understanding of the engagement requirements, objectives and scope of work

   
   


3. 
   

   Proposed methodology – Indicate approach to the audit assignment, proposed audit procedures

   
   


4. 
   

   Firms experience in undertaking assignments of similar nature and experience for other clients (Table with: Name of organization, name of assignment, duration of assignment (Dates), nature of assignment and reference person contacts

   
   


5. 
   

   Proposed team composition- Indicate the lead team members that will be responsible for undertaking the assignment, qualifications and experience in undertaking similar assignments

   
   

Name of team member

Highest educational qualification

Number days to

involved

of be

Years of

experience related to the task

Roles in

this

assignment

1. Work plan (Gantt chart of activity and week of implementation)


2. References- (Attach at least 5 reference letters from other clients other than KRCS)


3. 
   
   1. 
      
      1. The Financial proposal shall clearly indicate the total cost of carrying out the audit engagement and should be presented in the financial template as shown below.
      
      
   
   

The bidder shall only quote as shown per table below. Prices should be exclusive of Value Added Tax (VAT) as Kenya Red Cross Society is exempt from taxes. Quote should be split per region that the firm is bidding for.

Item

County Branch/ Region X

Region Y

Total cost (Kshs.)

Audit fee

Other costs – to be itemized

(disbursements) e.g.

Administrative costs, logistical costs, etc.

Total cost

1. 
   
   1. 
      
      1. A three-stage procedure will be adopted by the KRCS for evaluating the proposals as shown below;
      
      
   
   

STAGE 1 –TECHNICAL EVALUATION

• Review of Mandatory documents as listed above


• Firm’s general experience in the field of assignment


• Understanding of the audit services requested


• Proposed Methodology


• Proposed work plan


• The qualifications and relevant experience of the personnel for technical requirements.

Technical Proposal Evaluation Criteria

The technical proposal shall be evaluated on the basis of its responsiveness to the TOR. Specifically, the following criteria shall apply:

Assessment Criteria

Maximum

Points Possible

Bidder’s score

Remarks

(1) Introduction:

• Description of the Firm and the Firm’s profile, services offered


• Number of partners


• Number of staff


• Geographic location and number of offices


• Firm with proximity to the regional offices

6

(2) Background: Understanding of the audit engagement, context, and requirements for services

5

(3) Proposed Methodology: The proposed methodology MUST provide an indication of its effectiveness and added value in the proposed assignment.

9

(4) Firms Experience in undertaking assignments of similar nature and experience for other clients

• Provide a summary and supporting information on overall years of experience.


• References provided from other clients other than KRCS


• List of similar assignments done and names of clients, nature of services and years

10

(5) Proposed Team Composition:

• Tabulate the team composition to include the general qualifications, suitability for the specific task to be assigned and overall years of relevant experience to the proposed assignment.


• The proposed team composition should balance effectively with the necessary skills and competencies required to undertake the proposed assignment.

5

(6) Work Plan: A Detailed logical, weekly work plan for the assignment MUST be provided.

5

TOTAL SCORE

40

STAGE 2 – ORAL PRESENTATION

Only firms scoring 25 and above in stage 1 will proceed to the oral presentation. Oral presentations will be scored using the following criteria;

Name of Firm

Criteria

Maximum possible Score

Remarks

Understanding of the assignment

8 Marks

Methodology/ approach

7 Marks

Firm Experience and local office

5 Marks

Total marks

(20 marks)

STAGE 3. FINANCIAL PROPOSAL

All bidders who score less than 40 on the technical and oral presentation will not be considered for financial bid analysis.

Financial bids for all firms who will have scored a total of 40 and above on their technical bids and oral presentation will be scrutinized and adjusted to allow for fair comparison between all the tenderers. A weighted average system will be used where the financially lowest technical competent bidder will be awarded 40 while the rest will be weighted such that the further, they depart from the lowest bid, the lower the score obtained out of 40.

Technical proposal

40

Oral Presentation

20

Financial proposal

40

Total

100

Useful information for bidders

3.1.6. Bidders can bid for audit services for any of the regions. Local firms with presence at the KRCS regional offices are encouraged to apply.

3.1.7. Bidders are requested to hold their proposals valid for ninety (90) days from the closing date for the submission. KRCS will make its best efforts to arrive at a decision within this period.

3.1.8. All costs pertaining to the preparation of a proposal and negotiations of a contract shall be borne by the firms submitting proposals.

3.1.9. Assuming that the Contract can be satisfactorily concluded, the bidders shall be expected to commence the assignment in January 2024.

3.1.10. The services shall be provided by the bidding firm and NOT to be outsourced by any joint venture

3.1.11. The contracting arrangements shall clearly define the responsibilities and the services to be provided by each firm in the case of a joint venture.

How to apply

1.1.5. Deadline for Submission of Bids

Bids should reach tenders@redcros.or.ke on or before 25th August 2023 at 11.00 am. Bids received after the above-specified date and time shall not be considered. Any bid received by KRCS after this deadline will be rejected.

Bidders should provide a technical and financial proposal in two separate folders clearly Marked “Technical Proposal + Name of consultant” and “Financial Proposal + Name of consultant” both of which should then be sent to tenders@redcross.or.ke with the subject reading “Tender No. PRF13607: Provision of audit services for KRCS Regional and County Branch Offices (Northeastern, Upper Eastern and North Rift Regions)”.

All those tenderers who download the document will be required to send a mail to tenders@redcross.or.ke for the purpose of receiving any amendments or additional information and log in details for the tender opening meeting.