External Audit – BMZ PT CGCL Project

This document outlines the Terms of Reference (ToR) for the external audit of the financial
statement, which contains the receipts and disbursements, for the Project CGCL
(implemented by ADRA Indonesia) for the period from 01 October 2024 to 31 December
2025.
This audit will cover the first term of the project; a final audit for the full project period will
also be required. The auditor selected for this first-term audit will have the opportunity for a
contract extension to carry out the final audit.

Background and Rationale
ADRA Indonesia is a humanitarian arm of the Seventh-day Adventist Church, established in

The basis for its existence, its reason for being, is to show God’s love and example by
living for, helping and working with those in need in community development and disaster
relief.
Project: Creating Carbon Sinks & green community livelihoods through regenerative forest
and agroforestry management in Sigi, Central Sulawesi (CGCL).
Country: Indonesia.
Region: Central Sulawesi, Sigi District, Marawola Barat Sub-District.
This initiative aims to improve the livelihoods of indigenous communities in 12 villages within
Marawola Barat Subdistrict by promoting nature-based solutions that contribute to climate
resilience and carbon emission mitigation.
The project officially runs from 1 October 2024 to 30 September 2027, with implementation
led by ADRA Indonesia and oversight provided by ADRA Germany.

Scope of External Audit
The audit will be performed in Jakarta, Indonesia. Relevant supporting documents as well as
key staff will be available during the audit.
The audit shall be carried out in accordance with the standards specified this terms of
reference and shall include such tests and verification procedures as the auditors consider
necessary under the circumstances and:

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;
in compliance with the Code of Ethics for Professional Accountants issued by the
IFAC. Although ISRS 4400 provides that independence is not a requirement for
agreed-upon procedures engagements, ADRA Indonesia requires that the auditor

PROJECT CGCL External Audit 01.09.2024 – 31.12.2025

also complies with the independence requirements of the Code of Ethics for
Professional Accountants.
The scope of BMZ PT CGCL project first External Audit will include documentation primarily
held by ADRA Indonesia in Jakarta office.
The subject of this engagement is the interim Financial Statement in connection with the
Grant Agreement. As per the BMZ Grant Agreement and Project Implementation Contract
with the Prime-Recipient of the Grant, the Entity has to carry out the Audit in two terms:

The first audit of the project concerns the period covering 01.10.2024 to 31.12.2025.
The final audit of the project concerns the period of Life of Project (LOP) covering
01.10.2024 to 30.09.2027.
ADRA Indonesia intends to engage one independent external auditor for all two terms of
Project Audit. In the case the performance of the auditor is not found as required by the TOR,
ADRA Indonesia and ADRA Germany reserve the right to change the auditor for the next
forthcoming audit.
The external audit should include the following auditing and control measures.
Verifying accounting records for correctness and completeness.
Verifying the financial report in which all project-related revenues and expenditure must
be shown and for which it must be confirmed that receipts are provided for all revenues
and expenditure.
Verifying how the provided project funds have been managed. This includes:
− Project funds transferred to the project partner in the current budget year or during
the project term
− Interest earned in the current budget year or during the project term from project
funds transferred to the project partner
− Other revenues from the project activity.
Verifying that proof of payments and receipts have been furnished in the form of
vouchers. The receipts for expenditure must provide information as to the recipient, the
reason for payment, proof of payment and the date. All the vouchers must also include
a clear indication of the project as well as the budget line to which they relate BMZ PT
CGCL project – P8070.
Verifying to what extent the funds have been used appropriately for the purpose of
carrying out the planned project objectives and activities.
Verifying the cost-effectiveness of expenditure with regard to financial resources (to be
used economically and as effectively as possible).
Verifying the personnel costs and social security contributions to ensure that they are in
line with local standards, legal in the respective project country and, above all, that they
comply with contracts and that the contributions required by law are being withheld.
Verifying that the cost plan is being adhered to by means of a comparison of objectives
and effects (based on the most recent valid budget).
Verifying the economic use of project equipment.
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.

PROJECT CGCL External Audit 01.09.2024 – 31.12.2025

Verifying and confirming that project-relevant documentation is complete and correct,
including verification of stamping of original voucher.
Verifying that all agreements fundamental to the project are being adhered to (contracts,

German private executing agency guidelines, BMZ funding requirements, BNBest-
P/private executing agencies and BMZ contract award guidelines).

The auditor must seek evidence on a sample basis and in accordance with the principles
of legality and regularity.
Where expenditure is not supported by sufficient documentary evidence, or where it is
not properly incurred, the auditor has no discretion; he must report the matter and the
amounts as a proposed disallowance. The subsequent decision as to whether to issue a
recovery order is one made by ADRA Germany and the BMZ after considering all known
facts/mitigating circumstances leading to the provisional disallowance as reported by the
auditor. The auditor plays no part in the decision on whether to issue a recovery order.

Objectives of the Audit and requirement of Audit Certificate
The auditors’ primary task is to verify the expenditure of BMZ project funds to ensure that
expenditure is supported by appropriate documentary evidence, that is in compliance with
the BMZ Grant Agreement and the ADRA Germany Project Implementation Contract. The
objective of this Audit is to review BMZ PT CGCL project for period 01.10.2024 to
31.12.2025. External auditors must be independent and work to internationally recognized
standard and follow BMZ’s Guidelines for the funding of projects of importance to
development under the responsibility of private German executing agencies (chapter 2302
Title 687 76) section IV as follows:
A. In drawing up the Audit’s certificate, the recognized, independent auditors shall
structure his auditor’s certificate according to the quantitative documentary proof of
the statement of application of funds (see template). The auditors shall explain the
auditing mandate they were given and shall give an account of the documents used
for the audit of proper use of funds and compliance with the terms of funding. The
key statements (in particular the audit findings) and the final audit certificate (cf. 3)
must be in English.
B. If the difference between budgeted figures and actual figures on main budget item is
more than 30 per cent, this must be justified separately, unless prior authorization
was obtained from the BMZ.
The report of external audit certificate must include the following information:

Presentation of 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 with the project term.
Budget (most recent version) with the structure used for the financial report, provided
for the final report and presented like the attached template. The comparison of
planned and actual expenditure is shown in the currency in which the expenditure was
incurred.
Deviation of actual expenditure from the planned expenditure in the most recent
budget that exceed 30% of individual budget sub-categories, must be explained and
reasoned.

PROJECT CGCL External Audit 01.09.2024 – 31.12.2025

The final audit opinion in the audit certificate should state the following (as an
example and minimum requirement): “We hereby certify that we have audited the
statement of accounts of ADRA Indonesia regarding the financing of the project
“Creating Carbon Sinks & green community livelihoods through regenerative forest
and agroforestry management in Sigi, Central Sulawesi (CGCL)”. Our audit was carried
out on the basis of the following requirements pertaining to the use of funding: (add
list of relevant contracts and documents provided during the audit course). To this
end, we have inspected the books and vouchers, receipts. Based on our audit, we
confirm that:”
Following this, the audit should provide specific statements on the following questions (in
your own words):
To what extent has all income and expense been properly documented by mean of
receipts and proof of payments?
To what extent has the documented expenditure complied with its application and
project approval? And to what extent is it in keeping with appointed purpose and the
most recent budget? Have any deviations from the most recent budget been explained
separately?
To what extent has the documented income, that is accounted for as contributions
made by the local partner, the target group and/or other agenciesin the project country
been specified correctly and its origin explained in accordance with the guidelines?
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 the conditions
were not adhered to and were reasons given for this?
Which special aspects – positive or negative- should be mentioned with regard to this
project?
The audit report should provide a clear conclusion regarding the adherence with the
binding agreements set out in the project agreement.

Engagement Context
The auditor should obtain a preliminary understanding of the engagement context based on
this ToR. This ToR contains key information including the reason for the audit, logistics, the
Contractual Conditions for the Project, the Entity, and the Project subject to audit, other
information, contact details and key documents. The term ‘Contractual Conditions’ refers to
the BMZ guidelines, conditions, rules, criteria which are set out in the BMZ grant agreement
for projects under the program “Private German Organisations”. Furthermore, it refers to the
Project Implementation Contract signed between ADRA Germany and ADRA Indonesia.
The Contractual Conditions for this Project are set out in:
▪ the BMZ Grant Agreement signed by the BMZ and ADRA Germany
▪ the Project Implementation Contract signed by ADRA Germany and ADRA Indonesia
including all stated Annexes of the Project Implementation Contract
▪ the service and supply contract(s) signed by ADRA Indonesia and its service providers
▪ the works contract(s) signed by the ADRA Indonesia and its contractual providers

PROJECT CGCL External Audit 01.09.2024 – 31.12.2025

▪ Financial Reports
▪ Conditions for Eligibility of Expenditure
If Contractual Conditions are not clear the auditor should enquire clarification of ADRA
Indonesia or ADRA Germany.
Planning, procedures, documentation, and evidence:
The auditor should perform the audit in accordance with the procedures described below,
which cover documentation and evidence, planning, fieldwork, and reporting. The auditor
should exercise due professional care and judgment and determine the nature, timing,
and extent of audit procedures to fit the objectives, scope and context of the audit.
Planning
Preparation of the Audit, Planning Activities
The auditor must prepare the audit so that it is performed in an effective and efficient
manner and agree on timing for carrying out the audit, notably with regard to fieldwork.
The auditor will then also confirm with ADRA Indonesia and ensure that relevant
supporting documents as well as key staff will be available during the audit. Adequate
planning involves that appropriate attention is devoted to important areas of the audit,
that potential problems are identified and resolved on a timely basis and that the audit is
properly organised and managed in order to be performed in an effective and efficient
manner.
The auditor should have an audit plan documenting the audit approach and key principles
of planning, fieldwork, and reporting.

Preparatory Meeting
ADRA Indonesia foresees a preparatory meeting with auditor. The purpose of this meeting
is to discuss the planning, fieldwork and reporting of the audit and to clarify outstanding
issues. During the preparatory meeting, the auditor may request additional information
and documents that he/she/it considers necessary or useful for the planning and
fieldwork of the audit.

Fieldwork
The fieldwork shall commence as soon as possible and not later than (10) calendar days
after the signature of the Service Contract. The main task during the fieldwork will be to
perform substantive tests. Key information about the testing process must be provided in
the Audit report.

Draft Report and Closing Meeting
At the end of the fieldwork, the auditor shall create the draft report and organize a closing
meeting with ADRA Indonesia in order to discuss the findings, obtain its initial comments
and agree on additional information to be provided.
Audit Documentation and Evidence
The auditor shall prepare audit documentation and obtain sufficient appropriate audit
evidence to support audit findings and to draw reasonable conclusions on which to base

PROJECT CGCL External Audit 01.09.2024 – 31.12.2025

the audit opinion. The auditor shall use professional judgment to determine whether
audit evidence is sufficient and appropriate taking into account the Contractual
Conditions.

Audit Report and Management Letter
The auditor is expected to present an audit report and a Management Letter. The auditor
should submit to the Entity one portable document format (PDF) copy and three (3)
original copies of the Audit Report in English for the BMZ funded project. The Entity will
forward the report to ADRA Germany for processing.

Conduct of the Audit
In conducting the Audit, the auditor shall:

Carry out tests of transactions as are necessary, in order to obtain an
understanding of the accounting system, to assess its adequacy as a basis for the
preparation of the financial statements and to establish whether adequate records
have been maintained as required by ADRA Germany regulations and/or financial
rules of the BMZ.
Conduct an in-depth review of the internal control systems to have sufficient
knowledge of the procedures underpinning the systems
Confirm that funds have been used in accordance with the applicable rules of the
BMZ and that they have only been used for the purposes for which they were
intended for and in accordance with the conditions under which the funding was
provided
Confirm that Goods and services financed have been procured in accordance with
sound procurement procedures set out in the BMZ procurement guidelines and
ADRA Germany Procurement Policy
Verify
▪ that the expenditure verification is in line with the BMZ Grant Agreement and
Project Implementation Contract (including all Annexes thereto).
▪ that it is evident from the bookkeeping records and from the audit of accounts
that the expenditures are covered by the revenues, and it must thus be verified
that there is no duplicate financing by external funding bodies.
▪ that transactions are supported by reliable invoices and receipts and supporting
documents.
▪ the eligibility of expenses given the starting date of the monetary expenditure.
▪ that transactions have been reviewed and authorized by appointed personnel.
▪ that all expenses are recorded in the Entity’s accounts and are backed by originals
of supporting evidence
▪ to audit the proper bookkeeping,
▪ to audit the accounts on the basis of original vouchers,
▪ to cancel the original vouchers,
▪ to audit the plausibility of expenditures,
▪ to assign expenditures to the items in the cost schedule

PROJECT CGCL External Audit 01.09.2024 – 31.12.2025

▪ to audit the overall conduct of business.
▪ that financial transfers (bank, cash) are understandable and in line with the reported
expenditures.
▪ that where special accounts have been used, they have been maintained in
accordance with the provisions of the relevant BMZ and ADRA Germany
Agreement/Project Implementation Contract.
▪ that each set of accounts contains a clear description of cash flows that is documented
in the form of currency exchange confirmations and bank statements.
▪ that if any interests have been generated in the Entity account.
▪ that the awarding of sub-contracts for delivery and supplies, work and services is in
compliance with the relevant procurement procedures stablished by the donor.
▪ that purchased goods are listed correct in the inventory list.
The auditor will report to ADRA Germany any attempt by ADRA Indonesia to restrict the scope
of the Audit, or any lack of cooperation on the part of the Entity. The auditor will consult ADRA
Germany on what action may be required, whether or how the Audit can be continued and
whether changes in the Audit scope or the timetable are acceptable.
Responsibilities ADRA Indonesia
ADRA Indonesia is responsible for preparing Financial Statements for the Project financed by
the Grant Agreement in compliance with such agreement and providing it to the auditor, and
for ensuring that these Financial Statements can be properly reconciled to the Entity’s
accounting and bookkeeping system and to the underlying accounts and records.
Notwithstanding the procedures to be carried out, the Entity always remains responsible and
reliable for the accuracy of the Financial Statements. The Financial Statements in this context
refer solely to the Appendix to the auditor’s Report by which the Entity reports costs incurred
under the Grant Agreement.
ADRA Indonesia is responsible for the factual statements which will enable the auditor to
carry out the procedures specified, and will provide the auditor with a written representation
letter supporting these statements, clearly dated, and stating the period covered by the
statements.
ADRA Indonesia- accepts that the ability of the auditor to perform the procedures required
by this engagement effectively depends upon the Entity providing full and free access to the
Entity’s staff and its accounting and other relevant records.
Financial Statements
The Financial Statements to be audited, among others, include
▪ a Statement of Income and Expenditure,
▪ a Statement of Financial Position,
▪ a Statement of Changes in Accumulated Funds,
▪ a Statement of Cash Flow,
▪ the Accounting Policies Adopted and Explanatory Notes,
▪ the Financial Reports compliant with the terms and conditions of the BMZ Grant

PROJECT CGCL External Audit 01.09.2024 – 31.12.2025

Agreement

Process and Timeline
ADRA is calling for quotations from recognized and independent Auditors to submit an
offer and conduct an Audit for BMZ PT CGCL Project in January/February – 2026. Please
see below the draft scheduled timeline for Project CGCL external audit:
ADRA Indonesia reaches out to Approved Auditors to
provide a quotation for auditing services

ADRA Indonesia reaches out to Approved Auditors to provide a quotation for auditing services	12-20 December 2025
ADRA Indonesia shortlists and selects preferred Auditors	05-06 January 2026
ADRA Indonesia consults with ADRA Germany, Bengo/BMZ and gains approval to proceed with preferred Auditors	07-12 January 2026
ADRA Indonesia and preferred Auditors signs a Service Contract	15 January 2026
Final approved financial report shared with Contracted Auditors	30 January 2026
PROJECT CGCL audit conducted 02-20 Feb 2026 Contracted Auditors provide a draft audit report and conducts a debriefing meeting with ADRA Indonesia according to BMZ requirements	27 February 2026
ADRA Indonesia seeks feedback from ADRA Germany and bengo/BMZ and provides feedback to Contracted Auditors	02-13 March 2026
Contracted Auditors provide final audit report to ADRA Indonesia and donors	31 March 2026

Outputs and Deliverables
The contracted Auditors will provide all correspondence in English that will undertake the
following tasks and outputs:

Coordinate with ADRA’s Finance Manager/Director and designated Accountants
for documentation.
Review financial documents including cash advances, reconciliations, bank
statements, financial monthly reports, proof of payments, etc.
Conduct a debriefing meeting at the end of the Audit to discuss initial findings with
ADRA Indonesia Country Director, Finance Manager/Director, and ADRA Germany
staff if possible
Provide a comprehensive External Audit Report, including:

Audit certificate following abovementioned requirements on Section 3 –
Requirement on audit certificate
Quantitative documentary proof consisting of statement of application of
funds (budget, actual expenditure, deviation); statement of accounts;
financial statements (total income, total expenditure, fund balance)
following provided template
Findings regarding the adherence with binding agreements set out in
project agreements and donor funding guidelines (German private

PROJECT CGCL External Audit 01.09.2024 – 31.12.2025

executing agency guidelines, BMZ funding requirements, BNBest-P/private
executing agencies and BMZ contract award guidelines).

The auditor shall report on his factual findings and recommendations in accordance with the
requirements of these Terms. The report shall be objective, clear, concise, timely and
constructiuse of Appendix 1 (“Statement of application of funds” -BMZ template) and 2
(“Audit Report”) to Annex 2 is recommended. The Report shall be written in English. One
report for each of the three Audits is required.
The auditor agrees to a disclosure of his report to the BMZ and ADRA Germany in connection
with the requirements as set out in the Grant Agreement with the provision that the report
will be disclosed in complete, unabridged form including all its attachments.
The auditor shall ensure that the audit reports are neatly and legibly compiled containing
adequate documentation to demonstrate the nature and extent of the Auditing Services and
containing sufficient audit evidence to support all audit conclusions, findings, and opinions.
The auditor shall deliver to ADRA Indonesia electronic copy of the audit reports.
Where the audit reports can only be read with the use of auditor r’s proprietary software, the
auditor will ensure a version of software is available upon which the reports can be accessed
for a period of 10 years from the date of the submission date of the first report.
If there were no findings, this must be explicitly mentioned in the report.
The auditor shall prepare a management letter, in which the auditor shall:

Give comments and observations on the financial/accounting records, systems and
controls that were examined during the course of the Audit.
Identify specific deficiencies or areas of weakness in systems and controls, and make
recommendations for their improvement.
Communicate matters that have come to his/her attention during the Audit which
might have a significant impact on the implementation of the project.
Give comments on the extent to which outstanding issues/qualifications issues have
been addressed.
Give comments on previous audits’ recommendations that have not been
satisfactorily implemented.
Bring to the recipient’s attention any other matters that the auditor considers
pertinent, including ineligible expenditures.
Ideally, the management letter should also include responses from the implementing
Entity to the issues highlighted by the auditor.

Expert Profile of the Auditing Firm/Chartered Accountants
The Auditing firm/chartered accountants must be approved by the Government of Indonesia
and listed on the Accredited List of approved Auditing firms in Indonesia. The auditors should
not only have high competency in the field of financial audits but also be able to communicate
effectively in English (both spoken and written).
When applying Auditing firms/chartered accounts should include:

Current CVs with 3 reliable references
Technical proposal including work plan, timeline and methodology

PROJECT CGCL External Audit 01.09.2024 – 31.12.2025

Financial proposal for fees in IDR (NB: please note that the amount quoted will be
fixed price as the funds will be allocated in year 2025 for the work undertaken by
Auditing ).
Once the preferred Auditors are selected and approved by the ADRA Indonesia and ADRA
Germany, the Auditing Firm will be contracted for the period 20 January 2026 to 31 March
2026 with the expectation the final audit report and certificate will be approved by ADRA
Germany and ADRA Indonesia- by the said date. If delays are experienced by the Auditing
Firm this must be communicated to ADRA Indonesia and it may be possible to extend the
contract duration for a short period if donors approve this action.

Management of the Audit
The stakeholders involved in the management of the Audit include ADRA Indonesia Country
Director, Finance Manager, Accountants, Program Advisor and ADRA Germany Program
Coordinator and Project Finance Coordinator.
Compliance with applicable law
The auditor, at the time of submitting the offer and beyond over the years of the assignment,
if awarded, must comply with applicable environmental, social and labour law obligations
established by Union law, Germany legislation, Indonesia legislation, collective agreements
or the international environmental, social security and labour conventions. The same
compliance must be verified with regards to fiscal matters.
Fraud, corruption, irregularity, etc.
If, during the audit engagement, the auditor or any of the auditor employees detect
possible fraud, malfeasance, breach of statutory requirements, or material discrepancy of
any nature, the auditor shall immediately report the facts of the matter to
feedback@adra.de.
Immediately upon becoming aware of any matter that the auditor suspects on reasonable
grounds concerns or may concern corrupt conduct the auditor shall in writing inform and
make known the matter to feedback@adra.de.
The auditor shall not give any advice or information regarding the matter to any person
whatsoever in the absence of written directions from ADRA Germany or unless otherwise
required by law.
Other Matters
The auditor shall not subcontract without prior written authorisation from ADRA Indonesia
and ADRA Germany.
Terms of payment, Insurance and Liability modalities for Auditors
The terms of payment and liability modalities for auditors and will be defined in the Audit
Service Contract.

Deadline to submit your application is December 23rd, 2025.
Please submit your Application by email to:
procurement@adraindonesia.org and mark your e-mail subject: “CGCL – Pengadaan Input Pertanian 001 – [Your Company]”