Iraq COVID-19 Vaccination Project

The Government of Iraq GoI has received financing from the World Bank toward the cost of the Iraq COVID-19 Vaccination Project (ICVP) and intends to apply part of the proceeds for consulting services.

The consulting services (“the Services”) will carry out regular financial audits to verify that financial transactions and relevant statements are performed in line with applicable standards and guidelines, and laws are followed.

The detailed Terms of Reference (TOR) for the assignment are attached to this request for expressions of interest.

The Project Management Unit (PMU)/ Ministry of Health (MoH) now invites eligible consulting firms (“Consultants”) to indicate their interest in providing the Services. Interested Consultants should provide information demonstrating that they have the required qualifications and relevant experience to perform the Services. The shortlisting criteria are:

• Be registered as a Certified Public Accountant with the appropriate professional body in the country.
• Must have substantial experience (minimum of 4 years) in auditing major projects funded by international donors in the country and have within its portfolio major corporations and commercial banks;
• Have qualified personnel allocated for the assignment: (i) a team leader with at least 10 years of relevant experience (Certified Public Accountant); (ii) supervisor with at least 7 years of relevant experience (Certified Public Accountant); (iii) team members with at least 3 to 5 years of relevant experience.

 

Key Experts will not be evaluated at the shortlisting stage.

The attention of interested Consultants is drawn to Section III paragraphs, 3.14, 3.16, and 3.17 of the World Bank’s “Procurement Regulations for IPF Borrowers” November 2020 (“Procurement Regulations”), setting forth the World Bank’s policy on conflict of interest. In addition, please refer to the following specific information on conflict of interest related to this assignment:

Consultants shall not be hired for any assignment that would conflict with their prior or current obligations to other clients, or that may place them in a position of being unable to carry out the assignment in the best interests of the Borrower. Without limitation on the generality of the foregoing, Consultants shall not be hired under the circumstances set forth below:

1. A firm that has been engaged by the Borrower to provide Goods, Works, or Non-consulting Services for a project (or an affiliate that directly or indirectly controls, is controlled by, or is under common control with that firm), shall be disqualified from providing Consulting Services resulting from, or directly related to, those Goods, Works, or Non-consulting Services. This provision does not apply to the various firms (Consultants, contractors, or suppliers), which together are performing the contractor’s obligations under a turnkey or design and build contract.
2.  A firm that has been engaged by the Borrower to provide Consulting Services for the preparation or implementation of a project (or an affiliate that directly or indirectly controls, is controlled by, or is under common control with that Consulting firm), shall be disqualified from subsequently providing Goods, Works, or Non-consulting Services resulting from, or directly related to those Consulting Services. This provision does not apply to the various firms (Consultants, contractors, or suppliers), which together are performing the contractor’s obligations under a turnkey or design and build contract.
3. Neither a Consultant (including personnel and sub-consultants), nor an affiliate (that directly or indirectly controls, is controlled by, or is under common control with that Consultant), shall be hired for any assignment that, by its nature, creates a conflict of interest with another assignment of the Consultant.

Consultants may associate with other firms to enhance their qualifications but should indicate clearly whether the association is in the form of a joint venture and/or a sub-consultancy. In the case of a joint venture, all the partners in the joint venture shall be jointly and severally liable for the entire contract, if selected.

A Consultant will be selected in accordance with the Least Cost Selection (LCS) method set out in the Procurement Regulations.

Further information can be obtained at the address below during office hours Sunday -Thursday (9:00-14:30) Baghdad local time.

Expressions of interest must be delivered in a written form to the address below (in person, or by e-mail) by 15th, February,2022, 12:00 pm Baghdad local time.

 

Project Management Unit/ Minister Office/ Ministry of Health of Iraq

Attn: Yasmine Jamal Ameen, Procurement Officer and Technical Coordinator

Tel: 009647901287430

E-mail: yj.ameen@yahoo.com

 

Terms of Reference (TOR)

Consulting services of External Audit firm

 

IRAQ COVID-19 VACCINATION PROJECT P177038

Terms of Reference and Scope of Services

 

1. Project BACKGROUND:

Iraq COVID-19 Vaccination Project comprised of a loan in the amount of US$98 million from the International Bank of Reconstruction and Development (IBRD) and a grant in the amount of US$2 million from the Multi-Donor Trust Fund for Iraq Reform, Recovery and Reconstruction Fund (I3RF) to the Republic of Iraq.  The project financing will be extended under the COVID-19 Strategic Preparedness and Response Program (SPRP) using the Multiphase Programmatic Approach (MPA) approved by the World Bank’s Board of Executive Directors on April 2, 2020, and the additional financing (AF) to the SPRP approved on October 13, 2020.  The Government of Iraq (GOI) has formally requested the World Bank’s support for Iraq’s COVID-19 vaccination efforts on May 26, 2021. The project builds on the ongoing support to the Government of Iraq (GOI) COVID-19 response and health system strengthening by the World Bank as well as other development partners.

This amount will be used to finance components 1, 2 That will be carried out by Ministry of Health and (MoH) where will  the component 1 be implemented by purchase and deploy COVID-19 vaccines from a range of sources that meet the World Bank’s Vaccine Approval Criteria (VAC) and procure medical equipment related to Covid-19 and vaccines, and the second component will be implemented through hiring a third party monitoring agency (TPMA) to follow up and monitoring the chain of Vaccines deployment, as well as the supervision contracts, some of consultant contracts and operation expenses for PMU.

The GoI, through the Ministry of Health (MoH) wishes to engage a Financial Auditor firm (Consultant) acceptable to the WB to carry out regular financial audits to verify that financial transactions and relevant statements are performed in line with applicable standards and guidelines, and laws are followed.

2. CONTEXT

According to section II of the Loan agreement (IBRD 9297) and grant agreement (TF 0B6911), the Project shall at all times maintain a financial management system, including records and accounts, and prepare financial statements for the project in a format acceptable to the World Bank and adequate to reflect the operations, resources and expenditures related to the Project. Also, the PMU shall maintain records and supporting documents for all expenditures with respect to which withdrawals from the Loan Account were made (the records should reflect all categories of withdrawals SOEs, direct payments, reimbursement, and replenishments of Designated Account).

The General-Purpose Project Financial Statements (“PFS”) are comprised of a

1. Statement of Cash Receipts and Payments by category for the year then ending and cumulatively from inception date up till the year ending including funds received from third parties (i.e., other sources)
2. Accounting policies and explanatory notes including a  footnote disclosure on schedules like: the list of all signed Contracts per category showing Contract amounts committed,  paid, and unpaid under each contract, Statement of Cash Payments classifying the uses of funds i.e. project expenditures by component showing yearly and cumulative balances, Reconciliation Statement for the balance of the Project’s Designated Account as of year ending showing the opening & closing balances, Fixed asset listing, and Statement of Cash payments made using Statements of Expenditures (SOE) basis as defined in the Loan agreement.

For procurements of goods and services to the Project, the PMU is required to comply with the World Bank Procurement Guidelines. The Loan Agreement require that the records, accounts, and project financial statements mentioned above and the records and accounts for the Designated Account for each fiscal year to be audited, in accordance with auditing standards acceptable to the Bank, consistently applied, by independent Auditors acceptable to the Bank.  Audited PFS should be submitted to the World Bank as soon they become available but not later than six months after the end of the fiscal year.  In fulfillment of this statutory requirement, the MOH should engage a qualified independent audit firm according to terms of reference and scope of work acceptable to the World Bank, as summarized below.

3.OBJECTIVE

The objective of the audit of the PFS of Iraq COVID-19 Vaccination Project ICVP  is to enable the auditor to express at the end of each fiscal year or any other period specified by the World Bank (WB), a professional opinion as to whether

(a) the project financial statements and supplementary information present fairly, in all material respects, including the cash receipts and payments of the project at the end of each specified period  and cumulatively.

(b)  internal control over financial reporting involved in the preparation of replenishments, direct payments, payments through special commitments, and reimbursements i.e., expenditures reimbursed on the basis of Statements of Expenditures can be relied upon to support the related withdrawals.

(c) The Projects were in all material respects in compliance with the laws, regulations, guidelines and provisions governed by the Loan agreement and grant agreement.

For this purpose, the Auditor shall carry out the necessary examinations of the statements, underlying records, and internal control systems.

The original contract to be signed with the consultant shall cover the period from project’s effectiveness date till disbursement deadline date. The price of the contract is to cover the whole period.

4.Project Financial Statements

The Financing Agreements IBRD 9297 and TF 0B6911 signed between the WB and the Ministry of Health, the implementing agency for this Project, shall ensure that a financial management system is maintained and Financial Statements are prepared in accordance with consistently applied accounting standards acceptable to the World Bank, both in a manner adequate to reflect the operations, resources and expenditures related to the project; and in accordance with the provisions of the Loan and Grant Agreements which state that the Financial Statements should be periodically audited by independent auditors acceptable to the World Bank, in accordance with consistently applied auditing standards acceptable to the World Bank; and the Financial Statements, as so audited, should be furnished to the World Bank no later than six (6) months after the end of the fiscal year under audit or any other period specified by the World Bank, together with other information concerning the audited Financial Statements and such auditors, as the World Bank may from time to time reasonably request.

The Project Management Unit (PMU) at the Ministry of Health holds the responsibility for the preparation of the set of Financial Statements relating to the project on which the Independent Auditor shall report. The PMU will ensure that all the necessary records are available for the audit, all the accounting entries and adjustments have been made, and all the necessary actions have been taken to allow the auditors to issue the final report on time.  The Project Financial Statements (PFS) are comprised of the following:

 

1. Project sources and uses of funds, for the fiscal year under Audit;
2. Uses of funds by components, category and activities, for the period  under Audit;
3. Contract expenditures, for the period  under audit;
4. Statement of Expenditures (SOE) by components and activities, for the period  under Audit;
5. Designated Account Reconciliation Statement, showing opening and closing balances including transfers to and payments from the account by loan components and activities for the period  under Audit;
6. A comprehensive list of fixed assets acquired under the project which will include a description, status, amount, purchase date, user and location of each fixed asset.

 

5. SCOPE OF SERVICE:

1. The audit subject to this Terms of Reference is considered as a special purpose audit engagement for which, in addition to compliance with international standards as explained below, the Auditor needs to take into consideration the effectiveness of internal controls over financial reporting, and ensures compliance with the laws, regulations, guidelines and provisions governed by the  Loan agreement such as the World Bank Reporting requirements, Disbursement guidelines, and Procurement Guidelines in order to provide assurance on the financial management and procurement arrangements of the projects. Accordingly the Auditor should review and assess the conclusions drawn from the audit evidence during the engagement as the basis for the expression of a clear written audit opinion. Moreover, the Auditor should obtain from the MOH a Representation Letter as evidence of management’s assertions in the project financial statements in accordance with ISA 580.
2.  The audit will be carried out in accordance with International Standards on Auditing, having regard to relevant Loan Agreement and World Bank particular requirements. The audit shall provide assurance on the effectiveness of the internal controls surrounding statements of expenditure. The scope of the audit procedures must be aligned with the World Bank scope requirements to ensure compliance with the engagement. Planning and conducting the audit will be in accordance with a risk based framework and a detailed and documented audit work program. The audit coverage will consider the risk of material misstatement as a result of error or fraud. A description of the nature, timing, and extent of the planned risk assessment procedures sufficient to assess the risk of material misstatement should be properly documented. A documentation of the assessment and determining of the audit materiality (ISA 320) and its relationship with audit risk when conducting an audit should be done. The audit program should include procedures, which are designed to provide reasonable assurance that material misstatements are detected. Last but not least, the audit scope should include procedures aimed at detecting potential fraud. Accordingly, the Auditor should be aware of his responsibility to consider fraud in the audit of the project financial statements as defined in ISA 240.
3. Below is a summary of the audit areas that require special attention:

• All funds disbursed under the Project are eligible, have been used, accounted for and classified in accordance with the relevant Loan agreement and all the disbursements made on behalf of the project are in accordance with the World bank disbursement guidelines;
• The PFS are prepared in accordance with the International Public Sector Accounting Standards, under the cash basis of accounting and give a true and fair view of the financial operations of the project within the year. Any material deviations from those standards and the impact of such departures on the project financial statements as presented would be stated;
• An assessment of the effectiveness of the internal controls over financial reporting involved in the preparation of replenishments, direct payments, payments through special commitments, and reimbursements i.e. expenditures reimbursed on the basis of Statements of Expenditures can be relied upon to support the related withdrawals;
• Goods and services financed have been procured in accordance with World Bank Procurement regulations updated in ; November 2020;
• All necessary copies of supporting documents, records, and accounts have been kept in respect of all projects.  Clear linkages should exist between the books of account and the Project Financial Statements (PFS) presented to the Bank;
• Designated Accounts have been maintained in accordance with the provisions of the relevant Loan Agreement;
• Eligibility of expenditures claimed under Statement of Expenditures submitted to the World Bank for replenishment and reimbursement. This is in addition to substantiation of these expenditures;
• An assessment of project implementation and whether financial and physical progress is consistent during the project period. The monitoring of the expenditures in relation to physical progress is validating that physical progress and disbursements are under proper financial control
• Ensure that the fixed assets financed by the project are purchased in accordance with contracts and payment documents, are used for the purpose for which they were acquired and are physically existent;
• Verify that checks are signed by those authorized by management and negotiated by the intended payee under a specific contract and as required under the terms of the Loan agreement. 

 

The Auditor will be expected to review all correspondences with the World Bank in relation to the Project including copies of the Aide Memoires, Mission Reports, and assess progress on all financial issues. The Auditor will pay special attention to any specific risk area as mentioned in the project documents (such as PAD, etc.)

6. AUDIT DELIVERABLES

There are three main deliverables of the audit assignment

(A) Engagement Letter: The auditor should prepare an Engagement Letter, to help avoid misunderstandings, and send it to the Ministry of Health at the commencement of the assignment. The Letter should state the responsibility of the Project Management Unit (PMU) for specifying the timing and nature of Project Financial Statements, and disclosing requirements or other information that is expected to be provided under the audit arrangements. The Letter should also establish a time table for providing the audit opinion and reports and estimate staff time and audit fees as an indication of the intensity of the audit effort and the level of staff engaged on the assignment.

 

(B) Audit Report: The report should be submitted no later than five (5) months after the end of the period under audit in order to give the MoH enough time to review the report and request the Auditor to make necessary changes if any before sending the final audit report to the World Bank no later than six (6) months after the end of the period under audit. The Audit Report should include:

 

1. A reference to the Project Financial Statements (PFS) being audited and a statement that those financial statements are the responsibility of the Project Management Unit (PMU) and that the auditor’s responsibility is to express an opinion on them;
2. A statement that the audit was conducted in accordance with International Standards on Auditing and a reference to the procedures used and the requirements of those standards;
3. A separate reference to the Statement of Expenditures (SOEs) for the period audited. The auditors must issue an explicit professional opinion on the eligibility of the expenditures submitted to support related withdrawals and whether they are adequately reflected on the Project Financial Statements (PFS);
4. A separate opinion reconciling opening and closing balances of the Designated Account (DA) and stating whether the DA statement adequately reflects the flow of funds during the period audited, and if these have been only for the purposes intended under the project;
5. A separate opinion on the accuracy and reliability of internal control procedures including the identification of reportable conditions (those that have an impact on the Project Financial Statements) and material weaknesses in the internal control structure of the Project Management Unit (PMU);
6. A separate reference to the compliance of the Ministry of Health with the terms of the Loan and Grant Agreements and applicable laws and regulations related to the Project Management Unit (PMU's) financial activities. The instances of material noncompliance must be reported and discussed along with the impact of the exceptions on the PFS and the recommendations that will aid in correcting the deficiencies;
7. An explicit professional opinion on whether the Project Financial Statements give a true and fair view of the Project's financial position at the end of the period under audit.

 

(C) Management Letter: In addition to the Audit Report, the auditor will prepare a Management Letter, at the end of the period under audit, in which the auditor will:

 

1. Give comments and observations on the accounting records, systems, and controls that were examined during the course of the audit;
2. Identify specific deficiencies and areas of weakness in Internal Control Systems and make recommendations for their improvement;
3. Report on the degree of compliance of each of the financial covenants on the Loan Agreement and give comments, if any, on internal and external matters affecting such compliance;
4. Communicate matters that have come to attention during the audit which might have a significant impact on the implementation of the project; and
5. Bring to the Ministry of Health’s attention any other matters that the auditor considers pertinent.

 

The letter, with recommendations to address the situation and insufficiencies should be made available to the Ministry of Health on time. In the second audit year, as annex to the Management Letter, the auditor will mention whether or not recommendations issued on the previous Management Letter have been considered by the Ministry of Health and the Project Management Unit (PMU).

 

The following are requested as deliverables on a yearly basis from the audit engagement:

• Yearly Audit Report for the Project covering the 2 components implemented by MOHE, which shall include an explicit professional opinion whether (i) The General Purpose Project Financial Statements (PFS) present fairly, in all material respects, the cash receipts and payments of the Project for the period from loan effectiveness to December 31, 2021, and following years ending December 31, 2022,  including the four month grace period ending October 30, 2023, or any date the project ends, The PFS should show as well the cumulative balances as at end of each year in accordance with the International Public Sector Accounting Standards(IPSAS), under the cash basis of accounting; (ii) internal control over financial reporting involved in the preparation of replenishments, direct payments, payments through special commitments, and reimbursements i.e. expenditures reimbursed on the basis of Statements of Expenditures can be relied upon to support the related withdrawals as of end of each year, (iii) The project was in all material respects in compliance with the laws, regulations, guidelines and provisions governed by the  Loan agreement.
• The Auditor should consider relevant statutory and other mandatory disclosures and accounting requirements stipulated in the Loan agreement and express in the report any relevant exception and the impact of the exception on the PFS.
• A Yearly Management Letter for the Project which should report any significant accounting and control issues arising from the audit of the project, as identified during the internal control mechanisms review together with the related risk. The letter, with management responses, and recommendation to address the situation and insufficiencies, should be made available to the PMU in time. As annex of the Management Letter, the Auditor will mention whether or not recommendations issued on the previous Management Letter have been considered by the PMTs;
• The final financial reports, including the audit opinion, and management letter should be received by the PMU as follows, unless the loan will be extended and covers other projects with additional funds:

-   Audit for the period from effectiveness until December 31, 2021, due for submission May 31, 2022;

-   Audit for the year ending December 31, 2022, due for submission May 31, 2023;

-   Audit for the period from January 1, 2023 to June 30, 2023, plus four month grace period ending October 30, 2023, due for submission December 31, 2023.

• The report will be submitted in 2 (two) copies in Arabic and 3 (three) copies in English language, as well as in the open electronic version (standard software formats /Word, Excel, etc./). The MOHE should then promptly forward 1 (one) English copy of the audited project financial statements, including audit opinion and management letter, to the WB.

7. Auditor Qualifications

The Auditor should have the following qualifications:

• Be registered as a Certified Public Accountant with the appropriate professional body in the country.
• Must have substantial experience (minimum of 4 years) in auditing major projects funded by international donors in the country and have within its  portfolio major corporations and commercial banks;
• Have qualified personnel allocated for the assignment: (i) a team leader with at least 10 years of relevant experience (Certified Public Accountant); (ii) supervisor with at least 7 years of relevant experience (Certified Public Accountant); (iii) team members with at least 3 to 5 years of relevant experience.  

 

8. IRREGULARITIES INCLUDING FRAUD

The MOHE is responsible, through the PMU, for ensuring the establishment and maintenance of an adequate system of internal control that ensures compliance with statutory and other regulations and for the prevention and detection of irregularities, including fraud.  Although, the Auditor is not required to search specifically for such matters, the audit shall be planned and conducted so that the Auditor have a reasonable expectation of detecting material misstatements in the accounts resulting from irregularities, fraud, or breach of regulations.

The Auditor will report in writing, without delay,  any serious weaknesses in the internal control system, fraud, irregularities or accounting break-downs that they come across in the normal course of their duties to the designated office holder, MOHE, and the World Bank without delay.

9. ACCESS

The Auditor shall have rights of access to the books, accounts, vouchers, Loan Agreement, related Supplemental Letters, Project Appraisal Document, correspondence, and all other documents in relation of the Project and to such information and explanations as Auditors consider necessary to perform their duties and fulfill their responsibilities.

In addition, the Auditors will be provided with copies of the World Bank relevant publications that the MOH has to recognize including: )i) Financial Monitoring Reports for the World Bank –Financed project : Guidelines For Borrowers (ii) the World Bank “Procurement Guidelines” (iii) the World Bank “Disbursement Guidelines”

On occasions the World Bank representatives and the MOH management may wish to meet with Projects' Auditors, in connection with a visit to the Auditor’s office, review of the audit working papers files and discussion of the work performed and conclusion reached by the Auditors. The Auditor should not limit access in any way and must reply to all inquiries raised by the World Bank representative.  Failure to comply with this provision may disqualify the Auditors from dealing with all projects funded or administered by the World Bank.  Formal discussion should normally be arranged through the Project's designated office holder or representative.  The World Bank will have this right during performance of the audit then exclusively within two years after the completion of the audit engagement.

10. MISCELLANEOUS

Annual Meetings.  The Auditor will be requested to attend the meeting of the MOH to which the Project's annual reports and financial statements of account are presented. The Auditor will receive all notices and other communications relating to that meeting which any member of the MOH is entitled to receive. The Auditor will discuss the audit report and management letter and any part of the business which concerns the Auditor.

Termination of Appointment.  If there are serious short comings on the part of the Auditor, the MOH, after consultation with the World Bank, may pass a resolution to remove the Auditor before the expiry of their assignment.

Restriction of Auditor's Liability.  There is no limitation of the Auditors' liability in respect of audit opinions given under this assignment.  The MOH will not agree to any such restriction in liability.

The contract is annual and could be renewed upon satisfactory work result.