Oxfam Novib - audit instructions ’Empowering Youth for Work’

Project period 1 April 2017 - 31 March 2018

C1. WORK PROGRAMME CHECKLIST

Question Yes No N/A Comments
A General

1 Does the Project Financial Report reconcile with the

financial administration?
2 Is the Project Financial Report mathematical correct?

3 Does the budget included in the Project Financial Report

reconcile with the budget that has been approved by Oxfam
Novib?
4 Are there any fluctuations < and > 5% compared to the
budget that can’t be properly explained?
Please enclose an analytical review of the expenses
and revenues in comparison with the budget.
5 Have you ensured that the implementing partner complies
with the donor requirements?
6 Has the grant been used in accordance with the objectives
of the authorized grant as specified in the Project proposal
and the agreement with Oxfam Novib.
7 Have you used the materiality of 1% of the total Project
budget 2017/2018 of the implementing partner as stated in
the audit instructions?
8a Have you read the minutes of meetings of the Board of
Directors and the Project team for both 2017 up and till
March 2018 and the period from 31 March 2018 to the date
your fieldwork was completed to identify risks and/ or
relevant information for the Project?
8b If so, have you considered the effect of the matters included
in those minutes on the project statements being reported
on?
9 If applicable: Have material transactions (e.g. transfers of
inventories and fixed assets) with related parties been
reviewed and disclosed in the Project Financial Report?
10a Are there any indications for fraud? Please inform us
promptly if there are any indications for fraud.
10b If so, did the implementing partner take prompt corrective
actions?
10c If so, how are the expenses related to the fraud accounted
for?
11a Did you prepare a risk assessment prior to the start of the
audit of the Project Financial Report?
Please describe the risks identified.
11b Did you obtain sufficient audit evidence on the risks
identified?
Please enclose the audit response to your risk
assessment (11a)
 Oxfam Novib - audit instructions ’Empowering Youth for Work’
Project period 1 April 2017 - 31 March 2018

Question Yes No N/A Comments

12 Are you satisfied that no limitations have been placed on
the scope of your audit?
(If not, please inform us promptly)

B Internal controls

13 Is there minimal segregation of duties for payments that

ensure the legitimacy of all expenses?
14a Does the implementing partner comply with the
procurement procedure of Oxfam Novib? (This has been
sent to the implementing partner by Oxfam Novib).
Please include a short description of the controls
identified.
14b Did you validate the effectives of the controls related to the
procurement procedure? Especially controls that ensure the
legitimacy of the expenses such as:
 obtaining quotations for procurements above the limit
enclosed in the procurement procedure of Oxfam
Novib
 three way match (quantity ordered = quantity received
= quantity invoiced)
 authorisation of the invoices
 budgetmonitoring
Please specify the tests performed including the
sample sizes and conclusion.
15a If applicable: Does the implementing partner have sufficient
and effective controls for safeguarding assets (e.g. fixed
assets and/ or inventories) purchased for the Project?
Please include a short description of the controls
identified.
15b Did you validate the effectives of these controls for
safeguarding assets?
Please specify the tests performed including the
sample sizes and conclusion.
16a Does the implementing partner have sufficient and effective
controls for Project management (financial and content)?
Please include a short description of the controls
identified.
16b Did you validate the effectives of these controls for Project
management?
Please specify the tests performed including the
sample sizes and conclusion.
 Oxfam Novib - audit instructions ’Empowering Youth for Work’
Project period 1 April 2017 - 31 March 2018

Question Yes No N/A Comments

17a Are you satisfied that your review of the company's internal
control structure and your auditing procedures did not
reveal any significant internal control weaknesses (that
might impact the audit opinion) that should be brought to
our attention?
Please enclose the results of your internal control
assessment in the MoE.
17b Has the client taken prompt corrective action with regard to
such internal control weaknesses?
(If not, please inform us promptly).

C Accounting standards

18 Is the bookkeeping is in conformity with sound accounting

principles (IAS)?
19 Did you obtain comfort that the expenses included in the
project Financial Report are accurately and completely
accrued to 2018?
Please enclose how you performed the cut off test.
20 Did you obtain comfort that the revenues included in the
Project Financial Report are accurately and completely
accrued to 2018?
Please enclose how you performed the cut off test.
21 Is a policy in place for capitalising expenses (e.g. above
what amount)? Please include a short description.

D Expenses

22a Did you reconcile the expenses to underlying

documentation? Please specify the tests performed
including the sample sizes and conclusion.
22b Did you verify that expences relate to the accurate project
period 1 April 2017 to 31 March 2018?
23 Did you ensure that personnel expenses are correctly
charged to the Project? Please specify your conclusion.
24 Did you ensure that the expenses are accurately assigned to
the Project? Please include a short description on how
the expenses are assigned.
25 Did you ensure that the expenses charged to the different
types of activities within the Project reflect the nature of the
expenses.
26 If applicable: Were the depreciation expenses of the fixed
assets included in the Project Financial Report and were
they calculated accurately?
 Oxfam Novib - audit instructions ’Empowering Youth for Work’
Project period 1 April 2017 - 31 March 2018

Question Yes No N/A Comments

27a Are there any expenses included in the Financial Report
that have been spent by a partner organisation of the
implementing partner (your client)?
27b If yes to 27a, has your audit firm conducted an audit on
these expenses? Please specify your conclusion.
27c If no to 27b; Have you obtained sufficient comfort on the
expenses of the partnerorganisation.
Please specify your conclusion.
28a Did the implementing partner pay any advances to suppliers
and/ or partner organisations?
28b If so, how did you obtain comfort that these advances were
not included in the Project Financial Report as expenses?
29 Donors require that the expenses have been paid, therefore
please enclose the details (description, expense type and
amount) of the expenses that are not yet paid.
30 Please confirm that none of the following costs are included
in the Project Financial Report? If so, what is the nature of
the costs and amount paid?
These costs are:
30a  Cost for propaganda
30b  Costs to influence the outcome of a specific public
election of any candidate for public office or to carry on,
directly or indirectly, any other activity that is prohibited
to a public charity
30c  Costs to provide material support to any person or entity
that engages in violent or terrorist activities
30d  Costs for illegal or corrupt practices (including bribes).

E Revenue

31 Did you obtain sufficient comfort on the completeness of

other revenues? Please specify the tests performed
including the sample sizes and conclusion.
32 If applicable: Did you obtain comfort on the sales by a
reconciliation of the incoming and outgoing goods
movement.
33 Did you obtain comfort on the collectability of the receivable
if the revenue is accounted for is not yet received?
34 Did you obtain comfort on the interest income accrued to
the Project?

F Exchange rates

35a Are revenues and expenses in the Project Financial Report

of the implementing partner translated into the euro?
35b If so, are you satisfied as to the appropriateness of the
currency translation?
 Oxfam Novib - audit instructions ’Empowering Youth for Work’
Project period 1 April 2017 - 31 March 2018

Question Yes No N/A Comments

35c Does the Project Financial Report disclose the basis of the
currency translation?
If not please inform us here about the currency translation.
36 If the currency of the Project Financial Report of the
implementing partner has not been translated to the euro,
are you satisfied as to the appropriateness of the
information furnished to Oxfam Novib for translation
purposes?

G Other matters

37 Are you satisfied that there are no further matters, in

addition to information you have furnished in response to
the previous questions, that you wish to bring to our
attention?
38 In this connection, consideration should be given to the
following items:
38a  Disclosure of accounting policies not specified by
Oxfam Novib
38b  Adequacy of the disclosures afforded by the Project
statements
and related notes
38c  Reliance on reports and work of other auditors.

38d  Are there any assets (cash / bank balances) that are
restricted to use?
39 Has your examination confirmed that the client has not
experienced significant and unusual events or transactions
or made unusual provisions during the year under review
that have an effect on the Project statements?

H Procurement

40 Did you verify that goods, works and services required are
carried out in accordance with Procurement Procedures of
Oxfam Novib?
Please specify local procurement procedures
41 Did you identify cases where procurement of expenses
were not in conformity with the Procurement processes of
Oxfam Novib? If so, please verify whether suppliers were
selected objectively and threshold amounts were respected
in accordance with the EU public procurement rules, or – in
case EU rules do not apply, local procurement legislation.
Please specify cases
Oxfam Novib - audit instructions ’Empowering Youth for Work’
Project period 1 April 2017 - 31 March 2018

C2. SUMMARY OF AUDIT FINDINGS

1 LIMITATIONS OF SCOPE
All areas where audit work was not possible because of time constraints, lack of information
or a restriction to information access must be listed and explained here.

2 MATERIALITY, PERFORMANCE MATERIALITY

Please specify materiality and performance materiality

3 CRITICAL MATTERS
The information in each critical matter’s detailed description should include a description of
the matter; implications of the matter; actions taken to address the matter and any additional
evidence obtained; results of consultations with others; information identified that is
inconsistent with or contradicts the component team’s final conclusion concerning the matter;
and final conclusions reached and the basis thereof.

4 UNCERTAINTIES AND RISK AREAS

All significant uncertainties (litigation, other risks, etc.) should be described in this section
indicating if and how they have been accounted. Should your view differ from that of local
management, you should clearly state this, giving an estimate of the maximum exposure and
an evaluation of the probability that it could crystallise.

Please follow up any uncertainties which were identified in the previous year-end reports,
stating any developments or actions taken by management.

5 AUDIT DIFFERENCES
Please provide us with an overview of all identified misstatements. Al adjustments and
unadjusted errors identified should be communicated. Please explicitly quantify, regardless
of materiality, the amount for costs missing sufficient supporting documentation.

6 ANALYTICAL REVIEW
This section should include a comparison of the results as at [year end] to budget, with
explanations for any material variances.

7 OTHER ISSUES
Any other issues identified during the course of your work.

8 AUDIT OPINION
Please indicate what kind of audit opinion is or will be issued.

9 CLEARANCE FROM LOCAL MANAGEMENT

Please state when and with whom you findings have been discussed and agreed.
Oxfam Novib - audit instructions ’Empowering Youth for Work’
Project period 1 April 2017 - 31 March 2018

C3. MANAGEMENTLETTER
In addition, to the audit report, the auditor will also provide a “Management letter” summarizing
the observations on the accountability and internal control issues. These would include the
following:
a. Comments and observations on the accounting records, systems and controls that were
examined during the course of audit.
b. Specific deficiencies and areas of weakness in systems and controls and
recommendation for improvement.
c. Matters that have come to the attention during the audit which might have significant
impact on the implementation of the Project
d. Any other matter that the auditor considers significant to report to the management.

The observations in the “Management letter” must be accompanied by the implications,

suggested recommendations from the auditors and the management comments on the
observations/ recommendations.
Oxfam Novib - audit instructions ’Empowering Youth for Work’
Project period 1 April 2017 - 31 March 2018

C4. LETTER OF REPRESENTATION

(Letterhead of implementing partner)

Adres of component auditor

Place , Date
RE: Letter of representation

010-2771521
Dear [component auditor name], 010-4366045

This representation letter is provided in connection with your audit of the Financial Report of
[name of implementing partner] (" the entity"), for the purpose of expressing an
opinion as to whether this Financial Report gives a true and fair view for the period ending
31 March 2018 in accordance with the Stichting IKEA Foundation (further referred to as ’the
IKEA Foundation’) conditions for Financial Reporting as stipulated in the agreement between
Oxfam Novib and the IKEA Foundation with reference number G-151 1-00306 and the audit
instructions of Mazars Paardekooper Hofmann N.V. of the Netherlands for the period ending
31 March 2018.

We acknowledge our responsibility for the preparation and fair presentation of the Financial
Report. This responsibility includes: designing, implementing and maintaining internal control
relevant for the preparation and fair presentation of the Financial Report that are free from
material misstatements, whether due to fraud or error; selecting and applying appropriate
accounting policies; and making accounting estimates that are reasonable in the
circumstances.

Certain representations in this letter are described as being limited to matters that are
material. We understand that omissions or misstatements of items are material if they could,
individually or collectively, influence the economic decisions of users taken on the basis of
this Financial Report. Materiality depends on the size and nature of the omission or
misstatement judged in the surrounding circumstances. The size or nature of the item, or a
combination of both, could be the determining factor.

Statements

1. We have made such inquiries of others who participate in preparing and presenting the
Financial Report and assertions therein, including individuals who have specialized
knowledge relating to matters about which written representations are requested, as we
considered appropriate to place ourselves in the position to be able to make the requested
written representations.
2. All transactions have been recorded in the accounting records and are reflected in the
Financial Report.
3. Measurement methods and significant assumptions used by us in making accounting
estimates regarding (name of elements with accounting estimates), are reasonable.
Oxfam Novib - audit instructions ’Empowering Youth for Work’
Project period 1 April 2017 - 31 March 2018

4. All events subsequent to the date of the Financial Report and for which The Agreement
requires adjustment or disclosure have been adjusted or disclosed.
5. The effects of uncorrected misstatements are immaterial, both individually and in the
aggregate, to the Financial Report as a whole. A list of the uncorrected misstatements is
attached to the representation letter.

Information provided

6. We have provided you with:

 Access to all information of which we are aware that is relevant to the preparation of
the Financial Report such as records, supporting documentation and other matters.
 Access to all books of account and supporting documentation and all minutes of
meetings of the board of directors.
 Additional information that you have requested from us for the purpose of the audit;
and
 Unrestricted access to persons within the Implementing Partner from whom you
determined it necessary to obtain audit evidence.

Fraud and compliance with law and regulation

7. The term fraud refers to an intentional act by one or more individuals among management,
those charged with governance, employees, or third parties, involving the use of
deception to obtain an unjust or illegal advantage. Fraud also includes misstatements
resulting from misappropriation of assets, including pledging of assets without proper
authorization. Fraudulent financial reporting involves intentional misstatements or
omissions of amounts or disclosures in the financial statements to deceive financial
statement users.
a. We acknowledge responsibility for the design and implementation of internal control
to prevent and detect fraud.
b. We have disclosed to you the results of our assessment of the risk that the financial
statements may be materially misstated as a result of fraud
c. We have disclosed to you all information in relation to suspected fraud, allegation of
fraud or fraud affecting the entity involving:
 management;
 employees who have significant roles in internal control; or
 others where the fraud could have a material effect on the financial statements
d. We have disclosed to you all information in relation to any suspected fraud, allegations
of fraud, or fraud, affecting the entity’s financial statements communicated by
employees, former employees, analysts, regulators or others.

8. We have disclosed to you all known instances of non-compliance or suspected non-

compliance with laws and regulations whose effects should be considered when
preparing the Financial Report.

Related parties.

9. We have not offered third parties, or accepted from third parties, for our own benefit of
another party, any gifts, rewards, compensation or benefits which can be interpreted as
an illegal or bribery act.
Oxfam Novib - audit instructions ’Empowering Youth for Work’
Project period 1 April 2017 - 31 March 2018

Claims and litigations

10. We have disclosed to you all known actual or possible litigation and claims whose effects
should be considered when preparing the Financial Report.
11. There are no other liabilities that are required to be recognized and no other contingent
assets or contingent liabilities that are required to be disclosed in the Financial Report in
accordance with the The Agreement and the audit instructions of Mazars Paardekooper
Hofmann N.V.

Sincerely,

[Senior Executive Officer] [Senior Financial Officer]

Enclosures:

Schedule of uncorrected Financial Report misstatements

Schedule of
uncorrected misstatements
Oxfam Novib - audit instructions ’Empowering Youth for Work’
Project period 1 April 2017 - 31 March 2018

D. GRANT CONTRACT AND INSTRUCTIONS FOR REPORTING

For the accounting framework we refer to the contract between the Stichting IKEA Foundation
and Oxfam Novib.

Figure 1 Grant contract Stichting IKEA Foundation