Background
With a strategic focus on refining the understanding of internal controls, this endeavor underscores PI’s commitment to transparency and accountability. The anticipated duration of the consultant’s engagement is estimated at 160 hours, spread over 6/7 days, signifying a dedicated and thorough examination of the internal control framework.
Description of the organisation
Protection International (PI) is an international non-profit organisation that supports human rights defenders in developing their security and protection management strategies. Protection International has been working since 2007 with local partners in over thirty countries. PI aspire to a world in which fundamental human rights and fundamental freedoms are universally recognized and respected by all, and where everyone has the right to defend these rights and freedoms without fear of threats or attack. It’s contribution to that world is to support Women/Human Rights Defenders (HRDs) through comprehensive protection programmes. PI’s programmes enable defenders to build their capacities in order to manage their protection effectively, to allow those that protect them to fulfil their obligations, and to convince other individuals and institutions with a stake in the protection of human rights defenders to maximise their positive contribution. PI’s DNA is in essence grass-roots, as its focus has always been to act from the territories’ perspective and for the defenders’ benefit, from the local to the international level, through a bottom-up approach. This grass-roots approach aims to increase agency for the most vulnerable defenders while contributing to the creation of safe spaces for HRDs to continue working on the ground. PI has an average of 90 employees distributed in 9 offices worldwide: Guatemala, Honduras, Colombia, Brazil, Kenya, DRC, Thailand, Indonesia, and Belgium.
PI is currently undergoing a decentralisation process, as per its 2019-2023 Global Strategy which includes the creation of Regional Hubs. A new strategy (2024-2028) has been recently developed and is currently being launched. This assignment will focus on PI MESOAMERICA HUB based in Guatemala but with an outreach to the whole region, particularly Honduras. PI MESOAMERICA HUB has its own independent register under Guatemala law, yet still forming a part of PI under the Governance structure for the new strategic framework.
Aim
This assignment aims at assessing the system for internal control of PI MESOAMERICA HUB. The consultant is expected to identify eventual weaknesses and areas of improvements.
The assignment
This assignment will primarily focus on an analysis of the PI MESOAMERICA HUB’s internal control systems in order to determine whether these can guarantee quality and accuracy in the entire organisational chain. The assignment includes a review in which routines and systems for operational and financial control are described and analysed. In addition, the consultant shall submit recommendations in respect of improvements deemed necessary.
- Organisational structure, governance and legal status
Together with an overall presentation of the organisational structure of PI MESOAMERICA HUB, the following areas shall be assessed:
- Is the PI MESOAMERICA HUB an entity that has legal capacity to enter into an agreement with rights and obligations? Verify for each entities and sub offices (Guatemala, Honduras) of the organisational chain.
- Describe in an organogram the organizational structure, the relationship between the offices forming part of PI MESOAMERICA HUB; legal status of regional/country offices (Guatemala, Honduras), division of roles and responsibilities for financial management, monitoring and reporting.
- Does the management structure have clearly defined roles, authorisations and authorities?
- Are there bylaws/statues that clearly stipulate the mandate of the board and the organisation?
- Present the composition of the board; its members different competence’s, the election process and the formal mechanisms in place to ensure the board’s insight in the operation of the PI MESOAMERICA HUB.
- Based on above, does the board have relevant competence, including competence in financial matters for an organisation of this size? Are there any indications of conflict of interest for any board member? I s there a routine for listing the board members secondary occupation ? If so, has any of the board members done so?
- Describe the decision-making mandate and delegation procedures through the whole organisational chain. Assess how formal decision-making mandates and delegation of funds and responsibilities work in practice. Is segregation of duties documented in an office manual or equivalent? Check compliance based on professional judgement.
2. Funds flow management
- Describe the financial flow within the PI MESOAMERICA HUB.
- Assess the financial situation of PI MESOAMERICA HUB by reviewing the Financial Statements. Are there any red flags related to the Cash & Bank-, Liability- and equity-posts, based on your professional judgement? Are there unrestricted funds available within the PI MESOAMERICA HUB? What are the available financial support from donors? Describe the extent and nature of these funds.
- Describe the budgetary routines for the whole organisation including regional and country offices as applicable and describe how project/programmes are prepared, approved and monitored.
3. Accounting policies, procedures and practice
- Does PI MESOAMERICA HUB have an accounting software that allows for adequate accounting records for an organization of its size and operation? Does the accounting software allow for project accounting? Is it used?
- I s there an office manual or equivalent stipulating rules and policies regarding (i) travel advances and other types of (ii) advances (iii) petty cash; (iv) inventories; (v) per diem level, (vi) routines for credit cards and (vii) payments etc.? Are regulations as well as rate-levels used to support these items deemed reasonable? Check compliance based on professional judgement.
- Are travels with business class allowed? Is it stipulated what standard of accommodation that is used for workshops and travels?
- Review whether there are systems in place to record salary costs in a systemized way.
- Review salary levels, allowances and benefits (including any bonus schemes, benefit packages both monetary and non-monetary) offered to staff. Are the levels assessed to be competitive and reasonable (Does PI MESOAMERICA HUB benchmark with similar organisations in Guatemala)?
- Review how salary, allowances and benefits structure is revised. Is a board approval necessary for raises and any changes related to top management?
- Review how overhead costs are calculated. Is there a cost recovery model in place? What is included? Does PI MESOAMERICA HUB follow-up and update the model on a regular basis? If so, please describe.
- Describe how PI MESOAMERICA HUB handles foreign exchange gains/losses and review whether the principle for handling and reporting exchange gains/losses is in accordance with good practice.
4. Risk management
- Describe and verify the system for risk analysis. Is there a systematic and regular follow-up of risks? Are there routines for risk reducing measures?
- Does PI MESOAMERICA HUB have sufficient staffing regarding resources, competence and professional knowledge to ensure preventive and proactive work with different types of risks?
5. Relationships between PI Global Office and PI MESOAMERICA HUB
- Are the roles and responsibilities for financial management between the Global Office and the PI MESOAMERICA HUB clear?
- Are there Financial Manuals in the PI MESOAMERICA HUB that are adapted to the context? Are these manuals reviewed and approved by Global Office to ensure that they include all necessary routines and controls?
- Describe what kind of financial monitoring that is in place from PI MESOAMERICA HUB vis- a-vis the field offices, e.g., requirement for monthly financial reporting from the field offices to be consolidated at hub level, requirement for the field offices to submit monthly reconciliations of the accounting to PI MESOAMERICA HUB, spot checks/visits from PI MESOAMERICA HUB, etc. Is the financial monitoring considered adequate to ensure that the accounting at the field office is correct, up to date and that the internal control is sufficient? Check compliance on the above based on professional judgement.
6. Audit
- Is PI MESOAMERICA HUB audited according to national rules and regulations applicable to its legal form. Describe the type of audit (ISA, USGAAS, national standard, assurance engagement, agreed upon procedures)?
- Does PI MESOAMERICA HUB follow-up and act on weaknesses identified in the audits in a systemised way?
- Verify if the auditor is external, independent and qualified?
- During how many years have the audit firm/signing auditor been auditing the organization?
10. Reporting and monitoring
- Describe the PI MESOAMERICA HUB’s financial reporting structure (type of reports, budget follow- up, reporting and follow-up frequency). Is the structure relevant for PI MESOAMERICA HUB?
- Does PI MESOAMERICA HUB have a modern and adequate IT-system which is appropriate and includes clear routines for segregations of duties?
11. Procurement policies, procedures and practice
- Is there a procurement policy that includes adequate rules and regulations to manage planned procurement in compliance with applicable regulations? Sida procurement rules for NGOs can be used for comparison purposes.
- Verify compliance to the procurement policy by reviewing a minimum of three to five different type of procurement actions.
12 Anti-corruption
Describe PI MESOAMERICA HUB s system for anti-corruption. Verify the following:
- Is there an anti-corruption policy or has PI MESOAMERICA HUB in other ways described that they work proactive against corruption and/or other irregularities? Does PI MESOAMERICA HUB have documented ethical guidelines/code of conduct poIicy? Does PI MESOAMERICA HUB have routines for reporting “secondary occupation” ? Verify if the policies and guidelines are being implemented in a systemized manner?
- Does the partner have clear reporting channels for handling suspicions of corruption and/or other irregularities?
- According to the PI MESOAMERICA HUB, has any corruption cases occurred, and if so, how has it been handled?
- What eventual corruption risks have been identified during the assignment by the consultant for this review?
- Does the PI MESOAMERICA HUB’s staff participate in anti-corruption trainings? Are the anti- corruption trainings recurrent and does PI MESOAMERICA HUB keep records of the staff that have participated?
13. Respect for restrictive measures
- Review PI MESOAMERICA HUBs routines for ensuring that suppliers and/or implementing partners financed by Sida grant funds are not subject to sanctions or restrictions under the European Union’s sanctions list.
14. Forwarding of funds/sub-granting
- Does PI MESOAMERICA HUB assess the implementing partner organisation’s capacity regarding competence, resources, internal control and work on anti-corruption, and if so, in what way? Are these assessments documented?
- Is the process for selecting partners transparent and clear?
- Are there signed agreements between PI MESOAMERICA HUB and its implementing partner organisations in subsequent link? Are the rights and obligations of the implementing partner organisations stipulated in the agreements?
- What reporting requirements; financial and results; including audits, does PI MESOAMERICA HUB place on its implementing partner organisations?
- Are eventual findings and weaknesses in the audit reporting from implementing partner organisations followed-up upon by PI MESOAMERICA HUB in a systematic and documented way?
- Review whether there are routines for ongoing follow-up and monitoring of implementing partner organisations (for example field visits).
- How are implementing partner organisations in hard-to-reach areas followed up?
- Does PI MESOAMERICA HUB provide anti-corruption trainings to its implementing partner organisations?
Time schedule and reporting
The consultant shall make recommendations to address any weaknesses identified in the areas above. The recommendations shall be presented in order of priority.
The assignment will commence 17 June 2024. A start-up meeting between PI Global/PI MESOAMERICA HUB and the consultant will take place between June 17th to 21st. The consultant is expected to visit PI MESOAMERICA HUB’s office in Guatemala. These visits are planned to take place between 1 July- 20 July 2024(to be confirmed). If a visit is not possible due to Covid- 19 the assignment should be carried out remotely.
The consultant shall hold a virtual meeting with PI Global and PI MESOAMERICA HUB to present the report and the findings. PI Global and PI MESOAMERICA HUB shall have the opportunity to discuss eventual needs for clarifications.
If costs without sufficient supporting documentation are found, these costs shall be quantified.
The report shall in ENGLISH. A draft report shall be submitted to PI no later than 01 August 2024. PI will provide comments to the draft report no later than two weeks after receiving the report. PI MESOAMERICA HUB shall have given comments regarding factual errors before the draft report is submitted Sida. The draft report will be shared to Sida for possible questions on August 15th and will be give 2 weeks for review. The final report shall be proof-read and quality assured and submitted to PI Global no later than 15 September 2024.
The offer shall be sent to Protection International at the latest 20/05/2024
Required Qualifications of the Consultant:
– Long-standing experience in organisational development and organisational audits;
– Experience in conducting participatory evaluations and audits
– Experience with international human rights NGOs preferes;
– Fluent in Spanish and English;
– Understanding of multicultural organisation
– Good understanding of human rights defenders protection issues is a plus
– Availability to travel to Guatemala
– Authorisation to work in Guatemala as consultant
Please apply via procurement.gt@protectioninternational.org, using “PI MESO internal review” in the subject of the email.
The detailed version of the TOR can be shared upon request, via email at procurement.gt@protectioninternational.org