Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1697797226088.pdf (Dominica)
Housing Recovery Project Project Implementation Unit (HRP/PIU) TERMS OF REFERENCE (TOR) For Consulting Services to Audit the Financial Statements for the Housing Recovery Project for the period July 1, 2019 to June 30, 2020 I.

Basic Considerations for Audits of Projects Financed by the World Bank These Terms of Reference provide the basic information needed by the auditor to obtain an understanding of the engagement, in order to prepare a proposal and to plan and perform the audit.
The information must be complemented with: Guidelines Annual Financial Reporting and Auditing for World Bank –Financed Activities, Terms of Reference for Audits of Projects, World Bank Disbursement Guidelines for Projects (2006), Financial Management Manual for World Bank-Financed, Disbursement Letter and supporting annexes’.

The auditors must also be familiar with the Financial Monitoring Reports for the World Bank Financed.
These documents constitute the basic criteria against which the Bank will measure the quality of the auditor’s work when performing the desk review of the audit report.

Furthermore, the “Guidelines” are specifically considered an integral part of the TORs.

II.

Relationships and Responsibilities The client for this audit is the Implementing Entity (IE), and the Bank is an interested party.
A Bank representative may participate in the entrance and exit conferences; supervise the work performed by the auditors to ensure that it complies with the terms of reference and the applicable auditing standards, and to provide comments on the draft audit report.
The HRP/PIU of the Commonwealth of Dominica is responsible for preparing all the financial statements and reports required, and for ensuring that all the necessary records are available for the audit, that all the accounting entries and adjustments are made, and that all the necessary actions have been taken to allow the auditors to issue the final report on or before November 10, 2020.

The auditors should maintain on file adequate working papers for a period of three years after the end of the audit.
During this period, the auditors should promptly provide the working papers requested by the Bank.

III.

Project Background The Government of the Commonwealth of Dominica (GOCD) has secured financing from the International Development Association (IDA) credit and a Crisis Response Window Grant for the Housing Recovery Project (HRP).

The HRP is one of the projects in the GOCD’s National Housing Repair and Reconstruction Programme portfolio.
The HRP will contribute both to the recovery of housing for disaster-affected households and to improving the application of resilient building practices in the housing sector.

The Project will finance support for housing recovery systems and capacity building, support for the reconstruction of houses, and project management and coordination.

The project has a significant construction works component and other activities related to institutional strengthening and capacity building.
It has been formulated in keeping with the GOCD’s National Housing Repair and Reconstruction Programme (NHRRP).

An essential component of the Project is the establishment of up to seven (7) Technical Assistance Centres (TACs) throughout the country to serve as satellite offices of the Physical Planning Division of the Ministry of Planning and Economic Development (MoPED).

These TACs will be the primary interface between the public/eligible beneficiaries/contractors and the implementing agencies.
The PIU will oversee the operations at the TACs while the TACs support the PIU in the collection of the demographic information required for administering eligibility under the project, for undertaking technical assessments and carrying out development control functions.

The Project is implemented by the Ministry of Housing and Lands, supported by a Project Implementation Unit (PIU)) with oversight from the Ministry of Finance.
The Ministry of Housing and Lands is the technical lead for coordination amongst agencies in the Project, responsible for overseeing the PIU and day-to-day execution of activities and Project development.

The Ministry of Finance is directly involved in the management of the Project with the Ministry of Housing and Lands reporting on fiduciary matters and overall project progress to the Ministry of Finance.
The Ministry of Finance is responsible for coordinating financial management, contract management and monitoring of the Project, in coordination with the PIU staff.

The PIU would also manage environment and social safeguards aspects of the Project, as well as the Project reporting, monitoring and evaluation.
The objectives of the Project are to contribute both to the recovery of housing for households affected by Hurricane Maria and to improve the application of resilient building practices in the housing sector.

The Project consists of the following three components: (1) Support for Housing Recovery Systems and Capacity Building; (2) Support for Reconstruction of Houses; and (3) Project Management and Coordination.

The recipient of the bank financing is the Commonwealth of Dominica.
The Bank finance contract will be implemented by the Housing Recovery Project/Project Implementation Unit (HRP/PIU) through the Ministry of Housing and Lands of the Commonwealth of Dominica.

IV.

Audit Background The project was negotiated on March 26, 2018, approved on April 13, 2018 and signed on May 10, 2018.

The Credit Agreement includes a requirement for the project’s accounts to be audited annually.
2 V. Title of the Audit All proposals, audit working papers and audit reports should refer to this audit using the following name: “Audit of the Resources Managed during the period from July 1, 2019 to June 30, 2020 by the Commonwealth of Dominica under the Housing Recovery Project, IDA Credit Number 62320- DM, and Grant Number D3070-DM.

VI.
VI.

Audit Objectives The overall objective of this engagement is to allow the auditor to express a professional opinion on the financial position of the project at the end of the period audited, the eligibility of expenditures and to report on the adequacy of the internal controls.

The engagement will include an audit of resources provided by the Bank and an assessment of the internal controls of the PCU.

The Bank funds shown in the Project financial statements should be reconciled with Bank’s records.
Audit of the Project.

This special purpose audit must be performed in accordance with the International Standards on Auditing (ISA or ISSAIs) or other national standards which does not significantly depart from the international standards and therefore must include the tests of the accounting records that the auditors consider necessary under the circumstances.
The specific objectives of the audit are to:  Issue an independent and professional opinion with regard to the efficiency, effectiveness and economy of the program operations, the funds received and the disbursements made during the period audited, are in accordance with financial reporting provisions outlined in the respective legal agreements with the Bank and other co-financing organizations.
    Issue an opinion as to whether: (a) the expenditures reported are eligible for financing; and (b) loan funds have been used only for Project purposes.

Issue a report with respect to the adequacy of the internal control structure of the implementing institution in regard to the project.

Issue an opinion with respect to the implementing entity's compliance with the terms of the loan/credit agreements and applicable laws and regulations (with regard to the financial aspects).
Issue an opinion as to whether the Statement of the Designated Account and Project Accounts used for managing the funds provided by the Bank presents fairly the availability of funds at the end of the period audited, as well as the transactions made during the same period, in accordance with financial reporting provisions outlined in the project’s legal agreements.

3 VII.
3 VII.

Scope of the Audit The audit must include adequate planning, the evaluation and testing of the internal control structure and systems, and obtaining sufficient objective evidence to allow the auditors to reach reasonable conclusions on which to base their opinions.
In conducting their work, the auditors should pay special attention to the following requirements:  All project funds should be used in accordance with the conditions of the relevant financing agreements, with due attention to economy and efficiency, and only for the purposes for which the financing was provided.

 Goods, Works and Services financed should be procured in accordance with the relevant financing agreement.
 Implementing entity and PIU should keep all necessary supporting documents, records, and accounts in respect of all project ventures including expenditures reported via SOEs or Designated Accounts.

Clear linkages should exist between the books of account and reports presented to the Bank.

 Where Designated Accounts have been used, they should be maintained in accordance with the provisions of the relevant financing agreement.
 The project accounts should be prepared in accordance with financial reporting provisions outlined in the project legal agreements and is consistently applied, and give a true and fair view of the financial situation of the project at the end of the period and of the resources and expenditures for the year ended on that date.
The audit should be performed in accordance with acceptable auditing standards, and therefore should include tests of the accounting records that the auditors consider necessary under the circumstances.

The auditors should have the ability to detect situations or transactions that may indicate fraudulent, wasteful or illegal acts and expenditures.
If such evidence exists, the auditors must communicate the situation simultaneously to a duly authorized representative of the Bank and to the Project management, and exercise caution and due professional care in expanding their audit steps and procedures related to illegal acts.

Section 240 of the International Standards on Auditing provides guidance on this respect.

VIII.

Other Responsibilities of the Auditor The auditor should comply with the following requirements: A.
Conduct entrance and exit conferences with the IE.

B.

Plan the audit work so that preliminary reviews can be conducted during the period under review (including the first few months), with the purpose of evaluating the systems of 4 internal control and communicating to the implementing unit in a timely manner any situations that merit the attention of management before the issuance of the final audit report.

C. Independently reference the audit report before issuing it.
D. Obtain a Management Representation Letter in accordance with Section 580 of the International Standards on Auditing, signed by the management of the Project IE.
The management letter should detail weaknesses identified in the internal control environment during the current audit period, follow-up and status update of any weaknesses noted in the previous audit period, implications of these weaknesses, the auditor’s recommendation to address the weaknesses identified, as well as management’s response to the auditor’s findings.

IX.

Audit Reports The auditors shall issue their report containing the specific opinions and conclusions required.
All the reports resulting from the audit of the project should be incorporated into one document and expressed in USD.

This report should be addressed and delivered to the Project Implementation Unit on or before November 10, 2020.

The reports shall be issued in English, duly signed and bound, in original and 4 (four) copies.

The report for the Project should contain at least: A.
A title page, table of contents, a transmittal letter to the IE and a summary containing the information required in the Guidelines.

B.

The audit report and opinion for the Project financial statements, their corresponding notes and supplementary information.

Also, an opinion on the eligibility of the expenditures reported and the correct use of the Loan funds.
Any costs that are not supported by adequate records or that are not eligible under the terms of the loan agreement (questioned costs) should be identified.

C. The audit report on the internal control structure for the Project.
The report should disclose, among other information discussed in the Guidelines, the reportable conditions (those that have an impact on the financial statements), including the identification of material weaknesses in the internal control structure of the implementing unit, as well as the IE’s comments.

D. A management letter including the follow-up of recommendations made in prior audits, indicating the current status of the recommendations as corrected, partially corrected, or not corrected.
The deficiencies that still have not been corrected should be reported again in the current audit report, along with the corresponding management’s comments.

E. In pursuant to the World Bank’s policies audited financial statements are publicly 5 disclosable but management letters are not.

As such, both reports should be segregated.


F. The audit report and opinion on the PIU's compliance with the terms of the loan/credit and legal agreements and applicable laws and regulations related to the Project's financial activities.

G. An audit report and opinion on the Statement of Requests for Replenishment (IFRs) for the period audited.
The Auditor must issue an opinion explicitly covering: (i) the eligibility of the expenditures submitted for replenishment, (ii) the adequacy of the control procedures for preparing the IFRs, and (iii) the correct use of the loan and credit funds.

H. An audit report and opinion on the Designated Account Statement for the period audited.
The opinion should state whether the DA Statement adequately reflects the flow of funds for the DA during the period audited, and if this activity has been only for purposes of the project.

I.

A summary of the main audit procedures performed for planning the audit, evaluating the internal control structure, checking the figures included in the financial statements and other areas subject to audit, and for evaluating compliance with terms of the applicable agreements, laws and regulations.

X.
X.

Inspection and Acceptance of the Audit Work and the Reports The Bank is responsible for inspecting and accepting the audit reports, and may appoint individuals or firms to carry out these activities, including the review of the working papers and of the auditor’s quality control procedures.
If the report is not acceptable or not fully satisfactory due to deficiencies in the audit work or because the report does not comply with the requirements stated in these TORs or the Guidelines, the auditor shall perform the necessary additional work at no additional cost to the IE, the Project or the Bank.

Also, the representative of the Bank may contact the auditors directly to request any additional information related to any aspect of the audit or the Project financial statements.
If the Bank determines the audit report is not fully satisfactory, it will send a letter or e-mail to the PIU indicating suggestions to correct the deficiencies identified, and asking that the Bank be informed of any corrective actions taken.

The PIU will also be informed of any aspects of the audit report that are not in compliance with this TOR, so that the Auditor will correct the deficiency within a specific timeframe or in the subsequent audit.

XI.
XI.

Terms of Performance The auditor will issue the draft report on or before November 10, 2020 and the final report on or before December 10, 2020 These dates are important to allow the Project Implementation Unit (PIU) to send to the Bank the final audit report for the Project on or before December 30, 2020.

6 ACCESS TO INFORMATION Public Disclosure.


The guiding principle of the World Bank’s Access to Information Policy is that all information it creates is made public, unless it contains restricted information.

In line with this policy, the final audit report will be publicly disclosed.
Before finalizing the document, the World Bank requests the client to identify whether the document contains any sensitive information, or information whose disclosure may adversely affect relations between the Bank and the client.

The Bank, as it considers appropriate, makes adjustments to the document to address the matters of concern to the client.
Bank’s Policy-Corrupt and Fraudulent Practices (The text in this Attachment 1 shall not be modified) Guidelines for Selection and Employment of Consultants under IBRD Loans and IDA Credits & Grants by World Bank Borrowers, dated January 2011: “Fraud and Corruption” 1.23 It is the Bank’s policy to require that Borrowers (including beneficiaries of Bank loans), consultants, and their agents (whether declared or not), sub-contractors, sub-consultants, service providers, or suppliers, and any personnel thereof, observe the highest standard of ethics during the selection and execution of Bank-financed contracts [footnote: In this context, any action taken by a consultant or any of its personnel, or its agents, or its sub-consultants, sub-contractors, services providers, suppliers, and/or their employees, to influence the selection process or contract execution for undue advantage is improper.].
In pursuance of this policy, the Bank: (a) defines, for the purposes of this provision, the terms set forth below as follows: (i) “corrupt practice” is the offering, giving, receiving, or soliciting, directly or indirectly, of anything of value to influence improperly the actions of another party1; (ii) “fraudulent practice” is any act or omission, including misrepresentation, that knowingly or recklessly misleads, or attempts to mislead, a party to obtain financial or other benefit or to avoid an obligation2; (iii) “collusive practices” is an arrangement between two or more parties designed to achieve an improper purpose, including to influence improperly the actions of another party3; 1 For the purpose of this sub-paragraph, “another party” refers to a public official acting in relation to the selection process or contract execution.
In this context “public official” includes World Bank staff and employees of other organizations taking or reviewing selection decisions.

2 For the purpose of this sub-paragraph, “party” refers to a public official; the terms “benefit” and “obligation” relate to the selection process or contract execution; and the “act or omission” is intended to influence the selection process or contract execution.
3 For the purpose of this sub-paragraph, “parties” refers to participants in the procurement or selection process (including public officials) attempting either themselves, or through another person or entity not 7 (iv) “coercive practices” is impairing or harming, or threatening to impair or harm, directly or indirectly, any party or the property of the party to influence improperly the actions of a party4; (v) “obstructive practice” is (aa) deliberately destroying, falsifying, altering, or concealing of evidence material to the investigation or making false statements to investigators in order to materially impede a Bank investigation into allegations of a corrupt, fraudulent, coercive, or collusive practice; and/or threatening, harassing, or intimidating any party to prevent it from disclosing its knowledge of matters relevant to the investigation or from pursuing the investigation, or (bb) acts intended to materially impede the exercise of the Bank’s inspection and audit rights; (b) will reject a proposal for award if it determines that the consultant recommended for award or any of its personnel, or its agents, or its sub-consultants, sub-contractors, services providers, suppliers, and/or their employees, has, directly or indirectly, engaged in corrupt, fraudulent, collusive, coercive, or obstructive practices in competing for the contract in question; (c) will declare misprocurement and cancel the portion of the Loan allocated to a contract if it determines at any time that representatives of the Borrower
 or of a recipient of any part of the proceeds of the Loan were engaged in corrupt, fraudulent, collusive, coercive, or obstructive practices during the selection process or the implementation of the contract in question, without the Borrower having taken timely and appropriate action satisfactory to the Bank to address such practices when they occur, including by failing to inform the Bank in a timely manner they knew of the practices; (d) will sanction a firm or an individual at any time, in accordance with prevailing Bank’s sanctions procedures5, including by publicly declaring such firm or an ineligible, either indefinitely or for a stated period of time: (i) to be awarded a Bank-financed contract, and (ii) to be a nominated6 sub-consultant, supplier, or service provider of an otherwise eligible firm being awarded a Bank-financed contract.
participating in the procurement or selection process, to simulate competition or to establish prices at artificial, non- competitive levels, or are privy to each other’s bid prices or other conditions.

4 execution.
For the purpose of this sub-paragraph, “party” refers to a participant in the selection process or contract 5 A firm or an individual may be declared ineligible to be awarded a Bank-financed contract upon (i) completion of the Bank’s sanctions proceedings as per its sanctions procedures, including inter alia: cross-debarment as agreed with other International Financial Institutions, including Multilateral Development Banks, and through the application of the World Bank Group corporate administrative procurement sanctions procedures for fraud and corruption; and (ii) as a result of temporary suspension or early temporary suspension in connection with an ongoing sanctions proceedings.
See footnote 12 and paragraph 8 of Appendix 1 of these Guidelines.

6 A nominated sub-consultant, supplier, or service provider is one which has been either (i) included by the consultant in its proposal because it brings specific and critical experience and know-how that are accounted for in the technical evaluation of the consultant’s proposal for the particular services; or (ii) appointed by the Borrower.
8 APPENDIX The following statements are the minimum requirement and should be incorporated in the audit report.
Name of project Sources and Uses of Funds - Amounts in US$'000 FOR THE YEAR ENDING JUNE 30, 2020 Current Period CUMMULATIVE SF1 Actual SF 2 SF 1 Actual SF 2 RECEIPTS Source of Financing Government World Bank Designated Account Direct Payment Retroactive Financing Total Receipts (A) LESS EXPENDITURES Component 1 Component 2 Component 3 Total Expenditures (B) RECEIPTS LESS EXPENDITURES Net Change in Cash (A - B) Foreign Exchange Adjustment BANK BALANCES Opening Cash Balances Designated Account Project Account Total Opening Balance Closing Cash Balances Designated Account Project Account Total Closing Balance 9 Name of Project Statement of Cumulative Investments Year Ended JUNE 30, 2020 Categories Current Year US$ Prior Periods Cumulative US$ Category 1 Category 2 Category 3 Total Note: This statement is required for each source of finance.
DESIGNATED ACCOUNT RECONCILIATION STATEMENT LOAN/CREDIT/PPF/COFINANCIER NUMBER ______________ Source of Financing US$ US$ (Total) SF 1 SF 2 1 TOTAL ADVANCED BY WORLD BANK (OR COFINANCIER) 2 LESS: ELIGIBLE EXPENDITURE FOR THE CURRENT YEAR ENDED ____________ DOCUMENTED BY WORLD BANK LESS: CUMULATIVE ELIGIBLE EXPENDITURE FOR THE PRIOR PERIODS ENDED ____________ DOCUMENTED BY WORLD BANK 3 PRESENT OUTSTANDING AMOUNT ADVANCED TO THE DESIGNATED ACCOUNT (1 - 2) 4 BALANCE OF USD DESIGNATED ACCOUNT PER BANK RECONCILIATION STATEMENT AS AT YEAR END ______________________ BALANCE OF PROJECT ACCOUNT PER BANK RECONCILIATION STATEMENT AS AT YEAR END ______________________ 5 PLUS: ELIGIBLE EXPENDITURE FOR THE CURRENT YEAR DOCUMENTED AFTER THE YEAR END 6 PLUS: TOTAL AMOUNT WITHDRAWN AND NOT YET CLAIMED REASON: _____________________________________________ 7 PLUS: AMOUNTS CLAIMED IN PREVIOUS APPLICATIONS NOT YET CREDITED AT DATE OF BANK STATEMENTS APPLICATION NO.
WA # XXX WA # XX SUBTOTAL OF PREVIOUS APPLICATIONS NOT YET CREDITED 8 LESS: INTEREST EARNED 9 TOTAL ADVANCE ACCOUNTED FOR (NO.

4 THROUGH NO.
9) 10 DIFFERENCE (3 - 9) 11 EXPLANATION OF ANY DIFFERENCE SHOWN IN LINE 10 _________________________________________________________________________________________________________________________________ Suppliers whose qualifications and experience are in line with the Terms of Reference are invited to submit their Expressions of Interest by 4pm September 4th, 2020 to: Amoi Romeo Procurement Specialist Project Implementation Unit Housing Recovery Project 40 Old Street, Roseau Commonwealth of Dominica 767-616-9766 or 767-616-9779 Email: procurementhrp@dominica.gov.dm 12