Statement of Work - GAGAS Training.pdf

ATTACHMENT 1: STATEMENT OF WORK

TITLE

The U.S. Generally Accepted Government Auditing Standards (GAGAS) – 2012 Yellow Book and new Uniform Guidance training for the National Audit Office (NAO), Supreme Audit of Malawi, Conditionally approved CPA Firms, USAID Office of Financial Management staff (Financial Analysis team) and USAID Agreement Officer Representative for Foreign Non US based organizations.

I.PURPOSE

USAID/Malawi intends to enhance the capacity of 21 auditors from NAO, 14 auditors from USAID/Malawi approved list of auditors and seven members of USAID/Malawi Office of Financial Management staff on complying with GAGAS and related USAID rules and regulations on conducting an audit on USG funded activities. The training is intended to build the capacity of the participants to independently conduct the financial audits of USG funded activities and produce acceptable audit reports in line with the GAGAS. In addition to the above, 18 Agreement Officer’s Representatives (AORs) will be trained in the new Uniform Guide for managing and reporting on USG awards.

The following are the number of days and target participant categories for the training:

a) Day 1 (8 hours): U.S. Generally Accepted Government Auditing Standards – NAO (21 participants), CPA Auditors (14 participants) and 7 USAID Mission OFM staff only.

b) Day 2, 3 & 4 (24 hours): USAID Financial management and compliance with the new Uniform Guide - NAO (21 participants), CPA Auditors (14 participants), 7 USAID Mission OFM staff and USAID Mission staff

c) Day 5 (4 hours): The most current hot topics in compliance and audit issues for USAID Partners including SAS 134 - Auditors, Implementing Partners, and USAID Mission staff.

d) Day 5 (4 hours): Agreeing on a Capacity building plan for NAO to clearly prepare them for production of an acceptable Regional Inspector General (RIG) Financial audit report by December 2024 and performance audits report thereon by December 2025. NAO (21 participants)

II.BACKGROUND

The USAID Office of Inspector General (OIG) issued a memo on June 30, 2017, that gave Missions the responsibility to maintain an approved list of local audit firms. USAID/Malawi has since established its list of audit firms to carry out audit engagements of non-US based organizations meeting the annual spending threshold of at least $750,000. Since the issuance of the memo, the approved audit firms list has grown from four to seven. ADS 591 mandates the Mission Controller to appraise the partner country’s audit environment, assess the ability of the selected audit firms to deliver audit quality using criteria described in that framework, and manage an accurate list of acceptable non-US audit firms that may perform financial audits of USAID resources managed by partners. Currently, the audit firms on the approved list have varying levels of experience conducting USAID audits. Further, the last period, USAID/Malawi conducted an OIG led financial management capacity strengthening sessions on audit requirements to its approved audit firms was in 2014.

Since November 3, 2020, USAID/Malawi has been implementing various Government to Government (G2G) agreements; one of which is funded through a Cost Reimbursement (CR) mechanism implemented by the Ministry of Finance and Economic Affairs (MoFEA). A recent review noted that since April 1, 2022 to date, MoFEA had reached the annual spending threshold of $750,000, triggering the requirement to be subject to a Financial Audit. ADS-220.3.4.2 requires the country’s supreme audit institution (SAI) or its equivalent as default auditors for G2G activities. In Malawi the National Audit Office (NAO) is Malawi’s

SAI.

To ensure that NAO and the audit firms on USAID/Malawi’s current approved list are able to conduct and produce quality audits reports, the Office of Financial Management (OFM) at USAID/Malawi proposes to procure services from a contractor to conduct training in the U.S. Generally Accepted Government Auditing Standards (GAGAS) – 2012 Yellow Book - and in the new Uniform Grant Guidance (2 CFR 200) before the beginning of the fiscal year 2024 audit engagements season.

Additionally, following the United States Department of State’s Office of the Global AIDS Coordinator guidance for all PEPFAR recipient countries to transition HIV program implementation to local partners and the USAID’s overall localization strategy, USAID/Malawi’s local partner portfolio has increased significantly since 2020. Currently, USAID Malawi’s portfolio has more than 21 local partners. Some of these partners have limited experience managing USAID awards. As a result, these local partners have significant gaps complying with USAID rules and regulations. Therefore USAID/Malawi seeks the services of a consultant to enhance compliance with USAID rules and regulations and increase transparency in organization operations.

Furthermore, the US Government is expected to publish a revised Uniform Grant Guidance (2 CFR 200) which will serve as the authoritative underpinnings for USAID, STATE, Department of Health & Human Services (HHS)/Centre for Disease Control & Prevention (CDC), and all other 23 Federal Agencies. The revision will result in significant changes once fully adopted. It is thus necessary to build the capacity of the USAID staff (AOR, OFM etc.), NAO, USAID/Malawi approved CPA firms on the revised guidance to ensure its early and full adoption.

In May 2019, the Auditing Standards Board (ASB) of the American Institute of Certified Public Accountants (AICPA) issued Statement on Auditing Standards (SAS) 134, Auditor Reporting and Amendments, including amendments addressing disclosures in the Audit of Financial Statements of nonpublic entities. The standard affects auditor’s reports on nonpublic entities, and was effective for audits of companies from December 31, 2021 and subsequent fiscal year ends. Since the issuance of the standard, USAID has drafted an Automated Directive System (ADS) to provide specific guidance to auditors and overseas Missions managing audits of non-US organizations. In addition the Agency has drafted a SOW for Financial Audits of Foreign Organizations. The contractor will thus discuss the current developments, updates and expectations related to the new SAS 134 and its impact on future audit reports. The discussion will prepare the audit firms, NAO and USAID Malawi OFM staff to be aware of their obligations towards a full adoption of the standard.

III. WORK STATEMENT

a) Objective

The first objective of this capacity building initiative is to ensure that the audit firms on the USAID/Malawi approved list and the National Audit Office (NAO) are equipped with the knowledge and tools to conduct Recipient Contracted Audits (RCAs) and Agency Contracted Audits (ACA) for USAID/Malawi in accordance with 2 CFR Part 200 Subpart F and the US Generally Accepted Government Auditing Standards (GAGAS or the Yellow Book). ADS 591 maa must serve as a reference audit guide for this exercise. This training will also extend to USAID Mission OFM staff.

The training will include a specific capacity building of NAO and CPA of auditors to produce an acceptable Regional Inspector General (RIG) Financial audit report by December 2024. This will include an additional capacity building plan to prepare NAO to conduct performance audits and produce quality and acceptable reports by December 2025.

● Promote NAO and CPA firms understanding in the GAGAS in their conduct of USG audit exercises.

● Promote peer learning and networking among NAO and CPA firms by exchanging operations and business-related knowledge and practices.

● Develop and implement a Capacity Building Plan targeting the NAO to ensure production of an acceptable Regional Inspector General (RIG) Financial audit report by December 2024.

The second objective is to improve and strengthen USAID/Malawi’s staff (AOR, OFM) to promote compliance with USAID policies and regulations governing USAID awards to improve effectiveness and sustainability of U.S development assistance. The training will draw expert contractors to bring awareness to USAID staff in the Uniform Grant Guidance (2CF200). In addition, the training aims to build these targeted audience’s capacity by:

● Promoting compliance with updated USAID policies and regulations governing USAID awards by highlighting and clarifying some of the key changes to the Uniform Grant Guidance.

● Equipping USAID/Malawi’s staff (AOR, OFM) with updated knowledge to better advise its implementing Partners (IPs) how to strengthen their existing accounting and financial systems by recommending best adopted practices for local and regional IPs;

● Equipping USAID/Malawi’s staff (AOR, OFM) with updated knowledge to minimize audit findings through understanding of audit requirements and recommending pre-emptive corrective actions.

b) Approach

As outlined in section III, this training will take place over five days in July 2024 and will focus on engagement of NAO, CPA firms, USAID Contracting Officer Representatives/Agreement Officer Representatives and USAID OFM staff.

The first day session will be limited to the subject of audit under GAGAS. It will encompass training a number of 21 NAO staff, 14 CPA firms Auditors, and 7 USAID Mission OFM staff. It will cover relevant topics to ensure appropriate conduct and reporting of audits of USAID funded awards. At a minimum, topics/audit subject matters to be covered include the following:

● Review of USG Audit standards (GAGAS) and Cost principles as they relate to USAID funded audits mindful of the changes as highlighted in the revised Uniform Grant Guidance (2 CFR 200);

● Detailed review of USAID Financial Audit Guide for Foreign Organizations with specific focus on audit procedures and reporting on audit findings; and - include a reference to ADS 591 maa as a guiding tool 6/6/2024 is the latest version;

● Review USAID/OIG main issues with audit firms report. This will be informed by memos to the Controller from the RIG.

The remaining three to four days of the training will extend additional participants to at least 18 USAID AOR/COR/GATR and Activity Managers in the following:

● Review of the final revised Uniform Grant Guidance (2 CFR 200);

● Review of Standard provisions in USAID awards and their audit implications. Ensure active interaction between the CPA firms including NAO and the IPs;

● Review Cost principles related to USAID funded development activities mindful of the changes as highlighted in the revised Uniform Grant Guidance (2 CFR 200). Ensure active interaction between the CPA firms, including NAO, and the IPs;

● Review and discuss trending topical issues in USAID audits and regulatory compliance affecting USAID Implementing Partners and what best practices must be adopted to respond to them.

IV. EFFECTIVE DATE AND DURATION OF WORK

The effective date of this contract will be the date of the Contracting Officer’s signature. The contractor should complete the training on the pre-agreed training dates but before July 31, 2024. It is also expected that the successful bidder will mentor NAO to produce a RIG acceptable report not later than December 30, 2024.

V. DELIVERABLES AND REPORTING REQUIREMENTS

At a minimum the below deliverables will be required:

● Develop and implement a training plan and related structure for the participants groups listed in this Scope of Work.

● Develop and implement a Needs Assessment dedicated to NAO aimed at preparing the SAI to produce an acceptable Regional Inspector General (RIG) Financial audit report by December 2024.

● Training manual (soft copy to be shared with all participants)

● Produce a completed training report summarizing participation and training results of participants and audit firm personnel.

● Participants training evaluation report.

● Issue Certificate of training completion to all participants.

● Continuing Professional Certification (CPE) certification credit hours for the CPA firms for the

‘Yellow’ book Audit Training.

● Develop and implement a Capacity Building Plan targeting NAO to ensure production of an acceptable Regional Inspector General (RIG) Financial audit report by December 2024.

VI. OVERSIGHT AND SUPPORT

USAID/Malawi will provide any necessary information or materials upon contract signing for in-brief and planning preparation.

USAID/Malawi Financial Analysts Francis Mwapasa will be the designated Task order Contracting Officer Representative (TOCOR) for this Task Order. The TOCOR will be responsible for reviewing, vetting, and approving all deliverables in a timely manner. In addition, the USAID/Malawi Controller and the Office of Acquisition and Assistance (OAA) or Executive Office (EXO) staff will be available for consultation prior to the event to provide required inputs and support for the design of the agenda and the sessions. The contractor will be responsible for venue, training equipment and catering arrangements and costs.

A preferred venue is the Presidents Hotel in Lilongwe/Malawi because it is centrally located and easily accessible to NAO, CPA firms, IPs, USAID staff and all other participants. Therefore, USAID suggests that the Contractor uses this venue if available. USAID can assist the contractor with obtaining quotations and booking the venue.

The costs include venue, stationery, teas, lunch per participant and accommodation for participants coming from outside Lilongwe.

Please note that the start date of the Task Order will be the date the contractor receives a signed Task Order. USAID appreciates that the Contractor needs sufficient time to provide quality service and produce a report of acceptable quality, however USAID anticipates receiving the final report and conducting an exit conference earlier or by August 31, 2024.

ATTACHMENT 2: QUOTATION SUBMISSION INFORMATION

A. INSTRUCTIONS TO OFFERORS FOR THE PREPARATION OF QUOTATIONS

Quotations are limited to 10 pages maximum for all information including cover page, table of contents, dividers, résumés/CVs for proposed personnel and cost/price information. The contractor must submit the proposal in accordance with the guidance provided in the solicitation.

PERSONNEL - The requirement should also include experience conducting audit of USG funded activities in accordance with GAGAS, understanding of the new uniform guidance.

The offeror shall identify at least one key personnel for this Task order. The narrative must clearly describe the professional qualifications of the proposed key personnel viz a vis Scope of Work. The key personnel must have a minimum of five years of experience in working on similar training in USAID and also demonstrate an understanding of the new uniform guidance. For each technical staff member candidate, a complete and current résumé demonstrating the candidate’s qualifications and experience must be submitted. Résumés shall be in chronological order starting with most recent experience, a signed letter of commitment from each candidate indicating his/her availability to serve in the stated position and for the stated term of service. The contractor shall also submit three references of professional contacts, with current contact information including email addresses and telephone numbers, for each proposed candidate. USAID may also check other sources to gather information on proposed personnel including, but not limited to, other USAID or US government persons who have knowledge of their previous work.

In addition, USAID neither requests nor desires exclusivity agreements between the contractor and proposed personnel.

PAST PERFORMANCE

The contractor must clearly identify their experience and past performance in implementing similar work.

The contractor must provide at least three of the most recent and relevant contracts for efforts similar to the work in the subject quotation. The most relevant indicators of performance are contracts of similar type of work, scope of work, complexity/diversity of tasks, skills/expertise required, etc... and how recently they were performed. In addition to checking past performance references provided by the offeror, USAID may also check other sources of information including, but not limited to other government agencies, published media, and electronic databases.

B. EVALUATION CRITERIA

General

USAID may, without discussion or negotiations, award a task order to the responsive, responsible contractor whose quotation conforms to the Statement of Work (SOW) and offers the best value based on the evaluation criteria below. Therefore, quotations should contain the offeror’s best terms. USAID may reject any or all quotations, accept other than the lowest-priced quotation, and waive informalities and minor irregularities in quotations received. Quotations will be evaluated in accordance with the criteria set forth below.

USAID will use the following criteria, in descending order of importance, to evaluate quotations:

● Price: The offeror’s total price, including labor, administrative, supplies, and other costs, will be evaluated in determining the best value. Offeror must present a fully loaded daily rate for the task.

● Personnel: Extent to which the proposed key personnel demonstrate the offeror’s ability to meet the requirements in the SOW.

● Past Performance: Extent to which the contractor demonstrates successful implementation of similar training.