Donor audit requirements in Ukraine: EU, GIZ, UN agencies, Sida, embassies<\/h1>\n
The reporting format is set neither by the auditor nor by the organisation but by the donor’s terms of reference. One donor wants an audit under International Standards on Auditing, another an expenditure verification under ISRS 4400, a third a review or a partner micro-assessment. Below is what each group of donors actually requires, which documents to prepare and which criteria the audit firm has to meet.<\/p>\n
![\"Donor](\"\/wp-content\/plugins\/mk-landing\/img\/signing.jpg\")
<\/div>\nA project audit is needed when the donor requires independent confirmation of expenditure. The terms of reference decide the format: an ISA audit, an ISRS 4400 expenditure verification, an ISRE 2400 review or a HACT partner micro-assessment. Send us the terms of reference and we will tell you which one applies and how long it takes.<\/p>\n
What each group of donors requires<\/h2>\n<\/div>\n\n\nEuropean Union<\/div>\nExpenditure verification under agreed-upon procedures<\/b><\/p>\n
EU grants typically call for an Expenditure Verification: the auditor performs the procedures listed in the annex to the contract and reports findings without an opinion. The report follows the donor’s template and cannot deviate from it. Eligibility of costs, procurement procedures, supporting documents and the exchange rate are all tested. More: EU grant audit requirements<\/a>.<\/p>\n<\/div>\n\nGIZ<\/div>\nISA audit plus a budget execution schedule<\/b><\/p>\n
The German agency normally asks for an audit report under International Standards on Auditing together with a line-by-line budget execution schedule. Local taxes, payroll and the justification of administrative costs receive particular attention. More: GIZ project audit<\/a>.<\/p>\n<\/div>\n\nUN agencies<\/div>\nPartner micro-assessment and HACT audit<\/b><\/p>\n
Before the first significant cash transfer the agency micro-assesses the partner’s capacity, and at the end of the period commissions an audit or a spot check. This is not a conventional audit of financial statements but an assessment of internal control systems. More: HACT micro-assessment<\/a> and UN project audit<\/a>.<\/p>\n<\/div>\n\nSida and Nordic donors<\/div>\nProject audit with a separate internal control section<\/b><\/p>\n
Beyond confirming expenditure they ask for an assessment of the partner’s internal control system and a description of weaknesses in a management letter. An English report is mandatory.<\/p>\n<\/div>\n
\nEmbassies and smaller funds<\/div>\nA simpler format, the same documents<\/b><\/p>\n
For grants of a few tens of thousands a report of factual findings or a review is usually enough. The scope is smaller, but the requirements for source documents and procurement are identical. More: embassy and private foundation grants<\/a>.<\/p>\n<\/div>\n\nInternational charitable foundations<\/div>\nTheir own template and cost glossary<\/b><\/p>\n
Large private foundations set their own eligibility rules and a report format that differs from both the EU and the UN. Reading the agreement before work starts is critical here: what one foundation accepts, another disallows.<\/p>\n<\/div>\n<\/div>\n<\/section>\n\n\nReport formats<\/div>\nFour different engagements that get confused<\/h2>\n<\/div>\n\nAudit under ISA<\/b><\/p>\nThe highest level of assurance. The auditor expresses an opinion on whether the statements are fairly presented. Required when the donor or the charter asks for an auditor’s report with an opinion.<\/p>\n<\/div>\n
Expenditure verification under ISRS 4400<\/b><\/p>\nAgreed-upon procedures: the auditor performs the listed steps and reports factual findings, with no opinion. The most common format for EU grants. More: ISRS 4400 report<\/a>.<\/p>\n<\/div>\n
Expenditure verification under agreed-upon procedures<\/b><\/p>\n
EU grants typically call for an Expenditure Verification: the auditor performs the procedures listed in the annex to the contract and reports findings without an opinion. The report follows the donor’s template and cannot deviate from it. Eligibility of costs, procurement procedures, supporting documents and the exchange rate are all tested. More: EU grant audit requirements<\/a>.<\/p>\n<\/div>\n ISA audit plus a budget execution schedule<\/b><\/p>\n The German agency normally asks for an audit report under International Standards on Auditing together with a line-by-line budget execution schedule. Local taxes, payroll and the justification of administrative costs receive particular attention. More: GIZ project audit<\/a>.<\/p>\n<\/div>\n Partner micro-assessment and HACT audit<\/b><\/p>\n Before the first significant cash transfer the agency micro-assesses the partner’s capacity, and at the end of the period commissions an audit or a spot check. This is not a conventional audit of financial statements but an assessment of internal control systems. More: HACT micro-assessment<\/a> and UN project audit<\/a>.<\/p>\n<\/div>\n Project audit with a separate internal control section<\/b><\/p>\n Beyond confirming expenditure they ask for an assessment of the partner’s internal control system and a description of weaknesses in a management letter. An English report is mandatory.<\/p>\n<\/div>\n A simpler format, the same documents<\/b><\/p>\n For grants of a few tens of thousands a report of factual findings or a review is usually enough. The scope is smaller, but the requirements for source documents and procurement are identical. More: embassy and private foundation grants<\/a>.<\/p>\n<\/div>\n Their own template and cost glossary<\/b><\/p>\n Large private foundations set their own eligibility rules and a report format that differs from both the EU and the UN. Reading the agreement before work starts is critical here: what one foundation accepts, another disallows.<\/p>\n<\/div>\n<\/div>\n<\/section>\n The highest level of assurance. The auditor expresses an opinion on whether the statements are fairly presented. Required when the donor or the charter asks for an auditor’s report with an opinion.<\/p>\n<\/div>\n Agreed-upon procedures: the auditor performs the listed steps and reports factual findings, with no opinion. The most common format for EU grants. More: ISRS 4400 report<\/a>.<\/p>\n<\/div>\nFour different engagements that get confused<\/h2>\n<\/div>\n