Expression of Interest (EOI) for Internal Audit

Expression of Interest (EOI) for Internal Audit

dZi Foundation:

dZi Foundation is a US-based non-profit organization working with rural communities in Nepal to achieve prosperity by eliminating barriers to basic needs, fostering opportunities for sustainable livelihoods, and building their capacity to catalyze transformational change. dZi five-year strategic objective (2024- 2029) is guided by past learning, adaptation to the emerging policy and development contexts, and an improved focus on partnership, local ownership, and sustainability beyond external investment.

1) Call for Consultancy:

dZi Foundation seeks the services of experienced Nepali Internal Auditor (IA) firms to conduct a comprehensive assessment of both dZi Foundation's Nepal Country Office (NCO) and its three implementing partner NGOs in eastern Nepal. The IAs will provide independent, objective assurance and consulting activities designed to add value and improve operations across the entire operational ecosystem. This consultancy will help dZi accomplish its objectives by bringing a systematic and disciplined approach to evaluate and improve the effectiveness of risk management, control, and fiscal governance processes throughout the organizational structure. The independence of the IA is defined as the ability to conduct audit activities free from conditions that threaten the objective execution of responsibilities in an unbiased manner, both at dZi's offices and at partner NGO sites.

2) Specific objectives:

The main objective of this assignment is to strengthen organizational accountability and operational efficiency throughout dZi's operational framework, including its implementing partners. Through a systematic and disciplined approach, the IA will evaluate and improve the effectiveness of risk management, control, and fiscal governance processes across all entities. Specifically, the IA is expected to:

1. Provide comprehensive assurance that financial and operational risks are understood and appropriately managed at both dZi NCO and partner NGO levels, recognizing the distinct operating contexts of each entity.
2. Identify gaps and promote the establishment of best practices with respect to project fund management, with tailored approaches for dZi's internal systems and partner NGO operations.
3. Identify opportunities for pragmatic efficiency and effectiveness improvements in internal controls and risk analysis, considering the different scales and capacities of dZi and its implementing partners.
4. Evaluate risk management procedures and internal controls across the entire program implementation chain, from dZi to community-level interventions.
5. Provide targeted capacity building training for administration and finance staff at both dZi and partner NGOs, customized to their specific operational contexts and needs.

3) Methodologies and Activities:

The IA will conduct the following activities specific to dZi Foundation's NCO:

1. Perform a detailed historical review of dZi's financial systems over the past three fiscal years (FY 21-22 to FY 23-24), analyzing the evolution of controls, procedures, and systematic risks within dZi's international NGO context.
2. Evaluate dZi's program-level fiscal governance, including fund flow mechanisms to components and partner NGOs, with emphasis on dZi's oversight responsibilities and accountability to donors.
3. Assess the adequacy and effectiveness of financial information provided to senior management, with particular attention to international reporting standards and donor compliance requirements.
4. Design information flow optimization procedures tailored to dZi's organizational structure, ensuring alignment with international best practices for INGOs.
5. Develop a comprehensive Strategic Internal Audit Plan (IAP) for dZi NCO that addresses international compliance standards while remaining contextually relevant to Nepal's operating environment.
6. Design and deliver advanced-level capacity building sessions for dZi's administration and finance personnel, focusing on international best practices, donor compliance, and risk management in complex program environments.

For Partner NGOs

The IA will implement a distinct methodology for the three implementing partner NGOs, recognizing their local context and different operational capacities:

1. Conduct a contextualized review of each partner NGO's financial systems for the past three fiscal years, with emphasis on identifying capacity gaps and operational risks specific to local implementing organizations.
2. Evaluate partner-level fund utilization and management practices, including randomized sampling of program activities to assess implementation fidelity.
3. Assess compliance with both Government of Nepal regulations and dZi's requirements, developing pragmatic solutions that bridge any gaps between local requirements and international standards.
4. Analyze partner-specific internal control environments, with focus on identifying practical improvements suitable for local NGO contexts.
5. Develop tailored monitoring mechanisms for each implementing partner that ensure compliance while acknowledging their operational scale and capacity.
6. Design and deliver foundational capacity building training for partner NGO finance and administration staff, emphasizing practical skills applicable to their specific operational context.

Shared Activities Across All Entities

In addition to the entity-specific approaches outlined above, the IA will also:

1. Ensure all proposed solutions comply with Government of Nepal accounting policies, procedures, and audit requirements while meeting international standards where applicable.
2. Evaluate and strengthen the consistency and transparency of financial documentation throughout the fund flow pathway from dZi to partner NGOs to community implementation.
3. Identify systemic audit risks that affect both dZi and its partners, proposing integrated solutions that strengthen the entire program implementation chain.
4. Develop harmonized yet appropriately scaled monitoring tools that can function effectively across different organizational contexts.

4) Deliverables

The IA will produce the following deliverables, with clear differentiation between findings and recommendations for dZi Foundation and partner NGOs:

1. Inception Report (March 27, 2025): A detailed inception report outlining:

• Distinct methodological approaches for dZi Foundation and partner NGOs.
• Comprehensive work plan with specific timelines for each entity.
• Data collection instruments tailored to organizational contexts.
• Risk assessment frameworks for different operational scales.

2. Draft Report (April 25, 2025): A comprehensive draft report containing:

• Separate sections for dZi Foundation and each partner NGO.
• Entity-specific risk assessment findings with contextual analysis.
• Identified control gaps with differentiated severity ratings.
• Proposed mitigation strategies tailored to each organizational context.
• Draft Internal Audit Plans (IAPs) with entity-appropriate procedures.
• Capacity building assessments and recommendations for each organization.

3. Final Report (May 30, 2025): A complete final report incorporating feedback from senior management, featuring:

• Executive summary highlighting key findings across the organizational ecosystem.
• Comprehensive section on dZi Foundation/NCO with detailed analysis and recommendations.
• Individual sections for each partner NGO with context-appropriate findings.
• Comparative analysis identifying systemic issues versus entity-specific challenges.
• Implementation plan with prioritized recommendations for each entity.
• Appendices containing detailed financial analysis and evidence.

5) Duration of the Consultancy

The duration of the consultancy is approximately 60 days between March 17 and May 30, 2025. The consultancy timeline will include:

• Approximately 30 days dedicated to dZi Foundation/NCO assessment.
• Approximately 25 days for partner NGO assessments (distributed based on organizational size and complexity).
• 5 days for integrated analysis and final report preparation.

Preference will be given to consultants with a proven track record of completing assignments within tight deadlines without compromising the quality of deliverables, and who demonstrate the ability to work effectively and simultaneously across different organizational contexts.

6) Minimum Qualification of the Consultant/s

The IA firm/s should demonstrate:

• Successful completion of at least five similar assignments, with experience auditing both international development organizations and local implementing partners.
• In-house capabilities and resources to carry out multi-level assessments across different organizational contexts.
• In-depth knowledge of financial management operations, policies, and procedures in international development organizations, with additional expertise in local NGO contexts.
• Demonstrated expertise in internal controls, risk management, and audit techniques and frameworks applicable to both international and local organizations.
• Familiarity with Government of Nepal regulations for NGOs and international best practices in the development sector including the AML/CFT regulations, both internationally and locally.
• Proven skills to plan, manage, and execute internal audit programs across organizations of different sizes and capacities.
• Strong analytical skills, sound interpersonal communication, and effective presentation abilities for diverse audiences.
• Cultural sensitivity and experience working in remote areas of Nepal.
• Other relevant qualifications necessary to efficiently deliver the stated objectives.

7) Evaluation Factors

1. Technical approach (40 points)- Understanding of the differentiated methodological approaches required for dZi Foundation versus partner NGOs, with clear strategies to address the specific activities and deliverables for each entity.
2. Professional experience of the team (20 points) - Educational and professional credentials of the team, with emphasis on experience working across both international development organizations and local implementing partners.
3. Experience of the firm/organization (10 points) – Proven experience in conducting similar multi-level assessments, client satisfaction records, and sufficient physical and human resources to ensure smooth delivery across multiple organizational contexts.
4. Costing (30 points)- Cost-effectiveness, relevancy, and alignment of the estimated cost with technical deliverables, including appropriate resource allocation between dZi Foundation and partner NGO assessments.

8) Submission of EOI

Interested Nepali citizens/firms meeting the above qualifications can submit their EOI with (1) a cover page, (2) a brief technical and financial proposal, not more than 5 pages, (3) an updated CV of the consultant/s including PAN/VAT certificate, (4) evidence of similar assignment, at least 5, and (5) company profile with tax clearance and certificate, if applicable. Please submit your EOI and required documents electronically to procurement.np@dzi.org by/before March 10, 2025, with EOI for Internal Audit in the subject line. Please ensure that the attachment should not be larger than 10 MB. No telephone inquiry, please. Canvassing will lead to automatic disqualification. Only shortlisted applicants will be invited for further process.

dZi reserves the right to accept or reject any or all proposals without assigning any reason whatsoever.