XYZ Micro Assessment Report

XYZ
Micro Assessment of Implementing Partners on

Harmonized Approach to Cash Transfers
(HACT) for UNFPA 2014
September 2014
Harmonized Approach to Cash Transfers (HACT) for UNFPA 2014
Name of implementing partner:
XYZ
TABLE OF CONTENTS Page
Introduction 4
Scope of the Assessment 4
Executive Summary 5-7
Methodology 8-10
Implementing Partner 11
Results of the Assessment 12-33
Follow up on prior Assessment Reports/ Auditors Report 33-34
Overall Recommendations 35
Conclusion 35
Checklist 36-99
Appendix 1: List of bank accounts 100
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XYZ
List of Abbreviations
IPPF International Planned Parenthood Federation
MA Members of Association
XYZ Chama Cha Uzazi na Malezi Bora Tanzania
IP Implementing Partner
HACT Harmonized Approach to Cash Transfers
UN United Nations
cPAC Post Abortion Care
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IMPLEMENTING PARTNER INFORMATION
1.1 Implementing Partner

XYZ
Tanzania
P.O. Box 1372,
Dar es Salaam,
Tanzania
Tel: +255-22-2150156,2150594
Fax:(0) 22 152479
1.2 Key Persons Contacts Lulu Ng’wanakilala

Executive Director
1.3 Key persons responsible for accounting, financial management and internal audit
Mr Stephen Mutashubilwa
Director of Finance
Mobile: +255 754 442 282
Email: smutashubilwa@XYZ.or.tz
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1.0 Introduction
Pursuant to the UN General Assembly Resolution 56/201 on the triennial policy review of
operational activities for development of the United Nations system, a number of UN Agencies
have adopted a common operational framework for transferring cash to government and non-
government Implementing Partners.
Under the Harmonized Approach to Cash Transfers (HACT) Implementing Partners will use
common forms and procedures for requesting cash and reporting on its utilization. Agencies will
adopt a risk management approach and will select specific procedures for transferring cash to
partners, and undertake implementation assurance activities on the basis of micro-assessments
of the programmatic and financial management capacities of Implementing Partners.
The purposes of the micro-assessments of Implementing Partners are:

 To provide an overall assessment of the Implementing Partner's programme and financial
management capacity that will enable UN Agencies to manage the financial and
programme risk of working with partners by applying appropriate procedures for the
provision of cash transfers to the Implementing Partners and implementing sound
assurance activities.
2.0 Scope of the Assessment
 Managing Programme risk: An assessment of the Implementing Partner's programme

management capacity reviewed its capacity to implement programmes, projects and
activities that included review of the IP’s previous experience working with the UN or other
programmes. Existing skills to carry out “results-based” management was also assessed.
 Managing financial risk: An assessment of the Implementing Partner's financial

management capacity, reviewed funds management, staffing, accounting policies and
procedures, internal audit, external audit, reporting and monitoring and information
systems. The ability to carry out procurement in an objective manner that ensures value
for money was also assessed
 Capacity building: The programme and financial reviews will enable the Agencies and
Implementing Partners to identify strengths and weaknesses in the IP’s capacity for
programme and financial management and the priority areas for capacity building.
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3.0 Executive Summary
We have concluded that the overall level of risk relating to Programme and Financial
Management Capacities for XYZ is Moderate
The internal control and operational environment is satisfactory as highlighted by the following
briefings. Technical and finance staff are adequately qualified, skilled and experienced in their
fields and are adequate for the implementation of activities successfully. There are adequate
documented policies and procedures to guide the finance and accounts personnel and there is
adequate segregation of duties. The IP operates bank accounts under own mandate and are able
to receive and make payments from them. The IP is audited regularly by independent external
auditors but however there is no internal audit function. Budgets are prepared and authorized in a
systematic matter which takes into account the annual work plans and objectives of the
organization. The IT environment is not satisfactory. The environment does not maintains the
integrity and confidentiality of data as well as the security of the data. The procurement cycle is
being adhered to although a few findings have been noted under the applicable section below.
The IP has good governance practices as there are formal meetings by the members of the
National Executive Council (NEC).
Summary of risk rating based on our assessment for each of the components of the Technical
and Programme Implementation, Programme Management and Financial Management capacity
of the IP is provided below:
Definitions of priorities
H-- High – Response to question/subject matter provides a risk to the overall
4 financial management system that has both a high likelihood of occurring and a
potentially negative impact on the IP’s ability to execute the programme in
accordance with the work plan1 and stated objectives. Additionally, this risk has
not been mitigated by any other controls/process that have been implemented
by the IP
S-3 Significant – Response to question/subject matter provides a risk to the overall
financial management system that has either a significant likelihood of occurring
or a potentially negative impact on the IP’s ability to execute the programme in
accordance with the work plan and stated objectives
M-2 Medium – Response to question/subject matter provides a risk to the overall
financial management system that has a moderate likelihood of occurring and a
accordance with the work plan and stated objectives
L-1 Low – Response to question/subject matter provides a risk to the overall
financial management system that has a low likelihood of occurring and a
accordance with the work plan and stated objectives.
1
Agency work plans can be annual, multi-year, rolling or joint.
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XYZ
To determine the overall risk assessment for the Implementing Partner, we considered
the ratings for programme implementation, programme management and financial
capacity management.
Programme implementation and management
The Terms of Reference (TOR) did not provide for the use of risk points that collate with the level
of risk in rating the IP’s ability in implementing and managing the programme. Therefore, the
assigning risk ratings for the subject matter section under programme implementation and
management were done using the assessor’s professional judgment and accumulated micro
assessment knowledge and experience as to how the information gathered will affect the
Implementing Partner`s programme implementation and management. Based on the results of
the assessment, the specific aspects of the programme implementation and management were
rated as high risk (H), Significant (S), Moderate (M) or Low (L) as defined above.
Financial management.
On the other hand, there was a scientific way of assigning ratings to a subject matter
section under the financial management. A questionnaire containing various questions
related to nine subject areas of financial management was completed and, points were
assigned that correlate with the level of risk. The points assigned to each question were
added and averaged based on the number of questions in the subject matter section.
Questions that are not applicable to the IP (marked as ‘N/A’) are not be assigned a risk
rating and thus removed from the total number of questions for the calculation. Points are
assigned as follows:
 H – High risk: 4 points
 S – Significant risk: 3 points
 M – Moderate risk: 2 points
L – Low risk: 1 point
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No Description Risk Rating

H S M L
A Financial Management Capacity
1 Lack of Internal Audit function
Management should consider setting up an internal audit department.
The Internal Auditor will ensure compliance with all the requirements of √
the financial regulations and appraise the National Executive Council
(NEC) on the status of the records, systems, procedures and controls.
2 Consideration for purchasing another accounting softwares √
The DacEasy accounting system was found not to be able to produce
the following reports:
• Statement of income and expenditure
• Statement of financial position
• Statement of cash flows and
• Bank reconciliations
Recommendation:
XYZ should consider replacing DacEasy Accounting software with
QuickBooks accounting Package.
B Procurement/Logistics
2 Lack of specific anti-fraud and corruption policy √
Management should prepare and ensure full compliance with the anti-
fraud and corruption policy during procurement of goods.
3 Exception to procurement procedures are not documented and √
sent to the management for approval
Management should ensure that exceptions to procurement procedures
are documented and approved.
4 Lack of tracking past performance of suppliers √
Management should keep the performance of its suppliers for future
reference. Past performance information play a key part in the selection
decision that increase the likelihood of XYZ awarding contracts to top
notch suppliers.
5 Lack of computerized procurement system. √
Management should computerize its procurement system in rode to
reduce administrative costs, shorten the length of the purchase cycle
and reduce human error, thereby minimizing shortages
6 Lack of enough personnel in the procurement department √
Management should recruit an additional staff to the procurement unit
to increase efficiency of the department.
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4.0 Methodology
The micro-assessment was a combination of desk review of available information, assessment

visits to Partner offices and premises to interview Partners, review implementation of
recommendations made in previous assessments, evaluations and audits of the Implementing
Partner, and verification of a sample of transactions, sufficient to formulate an opinion on:
 The IPs capacities to implement programmes, the effectiveness of the system operated by
the IPs in providing the programme/project management with useful and timely
information for the proper management of the programme/project and,
 The IPs capacities to manage funds, and the general effectiveness of the internal control
system in protecting the assets and resources of the programme/project.
The standards we used to benchmark existing Implementing Partners Programme and Financial
Management Capacities included among others, the INTOSAI guidelines for Internal Control
Standards and the International Public Sector Accounting Standards (IPSAS) on Cash Accounting
published by the Public Sector Committee (PSC) of the International Federation of Accountants.
We also considered the requirement of Public Finance Act 2002 and the Internal Audit framework
issued by the Institute of Internal Audit (IIA). We performed the following specific tasks so as to
address the requirements of the Terms of Reference of the micro assessment:
 On the assessment of partner’s capacity in programme implementation, we performed the

following specific tasks:
o Reviewed UNDAP, AWP(s), FACE forms and where applicable, Agency relevant
manuals, to determine whether periodicity of FACE form submissions was in
accordance with the planned timeline, and whether requests for disbursements
and reports on utilization of cash were provided for activities described in AWP(s)
o Through interviews and review of progress reports prepared by the Implementing
Partner, we established whether activities were implemented as planned. Where
activities (timeliness, type, quantity) deviated significantly from the original AWP(s),
we established whether this was by mutual agreement between the Implementing
Partner and the Agency (ies). We determined and commented on the causes for
significant delays or changes, if any were noted
o Reviewed the Implementing Partner’s system of monitoring progress and review of
reports, including field monitoring visit reports and progress reports, to assess
whether the Implementing Partner met its responsibilities for monitoring as
described in the UNDAP and AWPs
o Reviewed whether recommendations recorded in field/project monitoring reports
or minutes of meetings between the Implementing Partner and the UNFPA
Tanzania CO has been implemented by the Implementing Partner.
 On the assessment of the partner’s capacity in project management (planning, monitoring

and evaluation), we performed the following specific tasks:
o Assessed the IP’s ability to carry out context situation analysis, use of information
to set priorities, setting SMART objectives, define implementation strategies,
inputs, outputs, outcomes, expected results, and results log frame matrix
o Assessed the IP’s ability to define indicators, identify suitable data collection
methodologies for quantitative and qualitative information as well as the ability to
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design basic management information systems

o Identified gaps in the ability to design household surveys, justification as well as
data collection instruments such as questionnaires, focus groups sessions, key
informants and participant observation etc.
o Identified weaknesses and capacity gaps in terms of staff qualifications, human
resources base and financial skills levels, including recommendations on required
skills mix and trainings for staff development
 On the assessment of the partner’s capacity in financial management, we performed the

o Conducted a general assessment of internal controls according to established
internal control standards
o Interviewed officials of the Implementing Partner, as necessary, to ensure full
understanding of the functioning of the internal control system
o Reviewed whether recommendations made in the micro assessment or previous
audit(s) were implemented
o Reviewed FACE forms, including the records of requests for direct payments, to
assess whether they were signed by designated officials of the Implementing
Partner
o Reviewed the processes used by the Implementing Partner for authorizing
expenditures and assessed whether they are in accordance with the UNDAP and
AWP
o Reviewed the process for procurement/contracting of supplies and services and
assess whether it is transparent and competitive
o Reviewed the use, control and disposal of non-expendable equipment and
assessed whether it is in compliance with government policies (or the Agency
relevant manuals, where so specified in the UNDAP/AWP), and also whether the
equipment procured met the identified needs and whether it is used in accordance
with intended purposes
o Reviewed relevant IT systems
o Where Agency’s funds pay for the personnel or consultants, we reviewed the
process followed for recruiting the Implementing Partner’s personnel and
consultants and assessed whether it is transparent and competitive. We also
reviewed the sufficiency of staff in carrying out assignments
o Reviewed the Implementing Partner’s accounting records and assessed their
adequacy for maintaining accurate and complete records of receipt of funds
provided by the Agency (ies) and disbursements of cash
o Reviewed present accounting and budgeting systems and practices within the IPs
including accounting standards followed, budgeting practices, asset safeguarding
policies, financial monitoring and reporting practices, internal control systems
including segregation of duties, responsibilities for overseeing the financial
management, cash and bank reconciliations
o Assessed the ability of IPs to prepare written policies and procedures covering all
routine financial management and related administrative activities, establishing
accountabilities and controls
o Analyzed the needs in terms of suitable software programs for the financial
management information system for programme implementation both at the
central ministries and the districts. This considered existing systems in the country
such as IFMIS and how it can be scaled up to all the ministries and districts
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o Assessed gaps in auditing policies and practices; internal/external audit process

and follow up of recommendations
o Identified weaknesses and capacity gaps in terms of staff qualifications; human
 On the assessment of the partner’s capacity in procurement/logistics, we performed the
o Identified gaps/weaknesses in existing systems and procedures for purchasing
and procurement. Advised on Procurement/Contracting management procedures
including development of procurement policies and procedures manual covering
bidding/selection processes and the documentation of procurement actions both
goods and services
o Identified gaps in the IP’s ability to develop and apply procurement procedures and
controls
o Identified weaknesses and capacity gaps in terms of staff qualifications, human
 On the review of a sample of FACE forms and transaction testing, we performed the
o Assessed whether the funds received from the UNFPA Tanzania CO were
deposited into the Implementing Partner’s bank account by verifying the bank
statement
o Reconciled the expenditure totals, per activity, on the FACEs to the list of individual
transactions (i.e. the Implementing Partner’s accounting records)
o For each activity, we reviewed the nature of expenditure and assessed the
reasonableness. We discussed any concerns we had with management
o For a sample of transactions, we carried out a verification of the accuracy and
completeness of supporting documentation (e.g. vouchers, invoices, purchase
orders, receipt of goods, bank transfers/checks, bank statements) to assess
whether they are properly authorized, documented, certified and accounted for
and are consistent with the description of the transaction (per the accounting
records) and per the AWP
o Compared the price paid for goods or services against market benchmarks. We
also included other appropriate measures of value for money
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XYZ
5.0 Implementing Partner i.e. Chama Cha Uzazi na Malezi Bora Tanzania(XYZ)
XYZ is an autonomous, not for profit, non-political voluntary national NGO providing Sexual and
Reproductive Health (SRH) information, education and services in Tanzania. XYZ was
established in 1959 and got registered in 1973 as national NGO vide certificate of registration
number SO.NO.3129 under Societies Ordinance, 1954.
Accredited by the International Planned Parenthood Federation (IPPF) in 2011, XYZ is a full
member of IPPF. The MA is governed by a well-established policy volunteer structure from the
national to community grass root level. The volunteers devote their time and expertise to promote
and maintain the MA and its functions.
The Association has a long history of leadership in SRH programme in the country including
pioneering in Family planning (FP) services, Family Life education for youths, integrated clinic
and Community based service delivery approaches. XYZ has competent staff and programme
volunteers who are community based service providers to implement programme activities. The
Association works in collaboration with different partners including the central and local
government structure. It also collaborates with various development partners and donors like
Sida, DFID, JOICFP, JICA, EU, USAID,RFSU, Youth Incentives, Global Fund Project, UNFPA,
FHI, Pathfinder International and the parent organization IPPF.
VISION:
“A healthy Tanzanian society where all people exercise their sexual rights and access quality
SRH services”.
MISSION:
“To provide sexual and reproductive health information and services to all people especially the
young and marginalized groups through innovative programmes”.
CORE VALUES
Volunteerism XYZ considers the spirit of volunteerism to be central to achieving our

mandate and advancing our cause.
Integrity XYZ shows impartiality, fairness and honesty while upholding the highest
ethical standards when providing SRH services.
Team Work XYZ contributes fully to the activities of the team to address shared
challenges through common effort. We share SRH information and
resources.
Innovation XYZ always work to find sustainable solutions in a changing environment

through creativity and innovations.
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6.0 Results of the Assessment
The micro assessment reviewed the Implementing Partner’s programme management systems
and capacities, as well as its system of accounting, reporting, auditing, and internal controls. The
overall risk related to cash transfers of XYZ is Moderate.
6.1 Technical and Programme Implementation Capacity
Overall risk assessment for Technical and Programme Implementation Capacity is Low
IPPF entered into agreements with the IP to implement a project which focused in five
programme areas (5A’s) and four support strategies. Adapted from the XYZ strategic plan (2011-
2015), the 5A’s thematic areas are Access, Adolescence, Abortion, HIV/AIDS and advocacy. The
support strategies are Governance and accreditation, Capacity Building, Knowledge
management and resources mobilization. Project activities were implemented through the support
from IPPF and other donors.
Project activities were implemented through the support from IPPF and other donors. Generally,
most of the planned activities were implemented.
XYZ implemented its program in partnership and collaboration with other partners. Among them
included the Government at all levels through MoHSVV, MoEVT, MoCDGC, and MoLYD. Others
were various such as AFRICARE, AMREF, and CSOs. To align its program with the Government
reforms on decentralization, XYZ strategically partnered with the Local Government and other
CSOs to obtain greater results and sustainability. The Government's policy on public, private
partnership (PPP) was among the enabling factors for effective program implementation.
The projects are headed by director of program who has prior experience working with donor
funded projects. Progress reports are prepared by the project accountant and approved by the
director of programs.
In total, there were twenty (20) projects implemented during the year, out of which eight (16)
projects were within the APB 2013 and four (4) projects were out of the APB 2013.
The IP has a Monitoring and Evaluation department which monitors the implementation of
activities within the required timeframe. Quarterly reports were produced as well as annual
reports and overall there were no significant issues raised by the department. The assessment
results of specific components of Technical and Programme Implementation Capacity of XYZ are
detailed below.
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XYZ
6.1.1 AWP with budget
Risk assessment is Low
Each year XYZ prepare project proposal for approval by IPPF. The project proposal includes the
list of physical activities or plans for the year and the related financial aspects. The final budget
and annual work plan are compiled by the Finance department with assistance from director of
programs. The Executive Director forwards the annual work plan and budget to the IPPF for
approval. IPPF analyse the project proposal, annual work plans and the budget. When IPPF is
satisfied an agreement is then signed by both parties.
From the review of the programme documentation and programme reports including FACE forms
for the two quarters, activities were in line with the agreement, annual work plans and the related
expenditures were within the approved budget.
6.1.2 Status of Implementation of AWP activities
We reviewed the implementation status of the programmes funded by IPPF and other donors for
the financial year 2013. In total, there were twenty (20) projects implemented during the year, out
of which sixteen (16) projects were within the APB 2013 and four (4) projects were out of the APB
2013 as detailed in each of the program area below:-
ACCESS:
The Access program area involved five projects within the APB 2013; being Community and
Facility linked SRH services including FP (01/13), Community Based Sexual and Reproductive
Health services (02113), Strengthening Linkage between Community-initiated and Health centre
RH services (03/13), Special initiative for Strengthening Program implementation and Integrated
Maternal Health Initiative. Project (01/13) is a clinic based with outreach component which
focused on improving access to integrated SRH services in the 10 clinics. This project was
supported by CIDA through IPPF. While the outreach approach contributed to huge service
statistics shows that clinics experienced inadequate staffing and shortage of contraceptives
supplies. The established collaboration and networking with Local Government and other CSOs
enabled the provision of integrated SRH services which attracted and retained clients for
continuing care.
Outreach was implemented in almost all sites and was significant in improving access to SRH
services to the hard to reach, poor and marginalized population. Other strategies used to
increase access to SRH services were facility and community based services. Apart from IPPF,
other projects under ACCESS were supported by other donors including JOICFP, MSD and
ZENSHO.
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ABORTION:
Under abortion program area, two projects were implemented namely Integrated Abortion and
safe motherhood related services (10/13) with support of IPPF and Cervical Cancer Screening &
Preventative Therapy (CCS&PT) with support of MSI. The overall objective for this project (10/13)
was to contribute towards reduction of maternal morbidity and mortality among women of
reproductive in Tanzania. The project focused on provision of SRH services in an integrated
approach including screening and treatment of cervical cancer. Efforts were made for the
integration of maternal and child health into a broader context of SRH services. Services provided
included post abortion care (cPAC), safe motherhood, comprehensive FP, laboratory services,
infertility investigation and mini pharmacies. Like in ACCESS, the project was constrained by
inadequate staffing and shortage in some contraceptive methods attributed to the transition from
Implanon to Jadeile. Service providers need training on JadeIle which is available in the market.
HIV &AIDS
The Association implemented two projects under this program area, namely; Integrating
HIV/AIDS Related Services to SRH (08/13) and Channeling Men's Positive Involvement in the
National Response-CHAMPION (09/13) supported by IPPF and EngenderHealth respectively.
The project (08/13) was implemented in collaboration with other partners comprehensively
focusing on SRH and HIV integration approach on HIV/AIDS prevention, care and support. The
CHAMPION project was implemented in collaboration with EngenderHealth and focused on
promoting male involvement in addressing HIV/AIDS, gender inequalities and other adverse
reproductive outcomes. Targeted groups included general population, vulnerable groups like
Motor cycle drivers (Bodaboda) who are mostly young men and key population such as sex
workers, people with physical challenges and orphans and vulnerable children. Likewise, men
and women in relationships were given attention. XYZ also collaborated with the Ministry of
Construction through Tanzania Roads Agency (TANROADS) in integrating HIV&AIDS program
activities along the communities where roads construction work was taking place.
During the implementation period a total of 53,576 people served, out of which 23,272 (43%)
were male and 30,304 (57%) were female benefited from various HIV related services
implemented by XYZ; through community interactive IEC/BCC, mass media and services in
clinics.
ADVOCACY
Two projects were implemented under to Advocacy program area. These were Raising public
awareness on the impact of unsafe abortion (11/13) funded by IPPF and Advanced Family
Planning (AFP) with support from John Hopkins University. While project (11/13) focused on
raising community awareness on unsafe abortion, the AFP project focused on increasing private
sector's engagement to support FP programmes. The project used coalition and networking
strategy to forge ahead the desired objective.
XYZ, together with other Family planning partners in the country participated actively in a-
MoHSW- led efforts for repositioning Family planning in Tanzania. The repositioning of FP in
Tanzania is guided by the National FP Costed Implementation Program (NFPCIP 2011-2015),
The National campaign on repositioning FP was marked by the Tanzania National Family
Planning Conference held in 9th -15th October, 2013, where XYZ emerged a Winner of the
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XYZ
CHAMPION Award in FAMILY PLANNING SERVICE DELIVERY in Tanzania. Under the UNITE
IPPF Change Goal. XYZ showed a case as a leader in SRHIFP services provision in the country.
XYZ is also a national partner committed to implementation of FP 2020.
The other project related to Advocacy was participating in East Africa Advocacy Initiative with
support of DFPA; where XYZ benefitted in trainings on advocacy skills, completion of Advocacy
strategy and participation in Women Deliver International conference. XYZ continued participating
in National for a such as Technical working groups in different areas such as Adolescents/Young
people, FP Contraceptive security, FP, CBD, Gender and SRH and others.
ADOLESCENTS/YOUNG PEOPLE:
Under Adolescents/Young people program area, five projects were implemented; with diverse
strategies for reaching the target audiences. The projects in APB 2013 included Improving access
to young people's SRHR IEC and Services (04/13) funded by IPPF, Pamoja Tuwalee (05/13) with
support of Africare. Mobilizing actions to safeguard rights of girls in Tanzania (06/13) funded by
Comic Relief and Afya ya Uzazi ni Haki ya Kijana
6.1.3 Progress reports
The IP is required to submit progress reports on a quarterly basis or monthly depending on donor
requirements. For AFRICARE and UNESCO reports are submitted monthly wise while for MERK
and AMREF reports are submitted quarterly. IPPF being the main donor of the organization,
reports are submitted following the grant management outline. Quarterly reports semi-annual
reports, audited reports and half year reports are submitted to IPPF as shown in the table below:
Grant Due dates for reports Conditions for approval Payment

remittance commences
1st Remittance 31 December. (a) All prior year reporting From Mid-January
Preceding year of completed
funding
2nd 28th February (a)Annual report for prior year. From mid-April
Remittance (b)Signed Funding Agreement
3rd Remittance 30th April (a)First Quarter report From mid-July
(b) Audited Accounts and
(C)Management Letter
4th Remittance 31st July (a) Half Year Report From mid-
September
5th Remittance 15th September (a) Annual Programme Budget From Mid-November
for following year
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The reports are prepared by the Clinical Director, Project Coordinators and relevant Heads of
Departments and the final compilation is done by the Monitoring and Evaluation team. The
reports are reviewed and approved by the Site Director while further review and approval is done
by the Executive Director. We reviewed Monthly progress reports from January to December
2013 for AFRICARE, Four quarterly reports for AMREF ending 2013, two quarters for April-June
2013 and July-October 2013 for MERK while for UNESCO we reviewed only Monthly report for
august 2013 and February 2014 and results revealed that submission was done within the
required timeframe. We also reviewed FACE forms submitted to donors as follows: from January
to December 2013 for AFRICARE, Four quarterly reports for AMREF ending 2013, two quarters
for April-June 2013 and July-October 2013 for MERK while for UNESCO we reviewed only
Monthly report for august 2013 and February 2014.The liquidation of FACE forms act as a means
of reporting on implementation progress.
6.1.4 Monitoring and Evaluation (M&E)
6.1.5 Implementation of recommendations recorded in field/project monitoring reports or

minutes of meetings between the Implementing Partner and the UNDP Tanzania
6.2 Governance, Legal Status and Organization Structure
Risk assessment is Moderate
The IP is legally registered as a Society under Societies Ordinance, 1954 on 30th November,
1973 vide Certificate of registration S0.No.3129. XYZ has also been registered with Tanzania
Revenue Authority and assigned the Taxpayer Identification Number (TIN) 101-304-795.
Accredited by the International Planned Parenthood Federation (IPPF) in 2011, XYZ is a full
member of IPPF. The MA is governed by a well-established policy volunteer structure from the
national to community grass roots level. The volunteers devote their time and expertise to
promote and maintain the MA and its functions.
The Organizational structure of the IP is suitable and appropriate for the work to be carried out
under UN cooperation. The corporate governance of the Association consists of the National
Council (NatCo) and National Executive Committee (NEC) chaired by an elected Chairperson.
National Executive Council (NEC) comprises of seven individuals, one of which are not part of the
daily operations of the IP. There were formal meetings of National Executive Members during the
2013 financial year, for which its minutes we verified for the effectiveness of the Board in focusing
on issues that are critical to the organization. The National Executive Council have sub-
committees such as the Audit Committee that oversees the financial aspects and compliance of
the IP except for the internal audit function.
Directors are the Executive Director, Finance and the Directorate of Programmes. Young people
as primary target group are part and parcel in XYZ’s governance and program through a
functional Youth Action Movement (YAM) operating from the grassroots to the national level.
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XYZ
However, From the XYZ organization structure, the position of Internal Auditor has not been
contracted yet and the recruitment for this position is also not known. In addition there has been a
vacancy for Monitoring and Evaluation Manager since 2012, it was advertised in 2013 but they
were not able to get a successful candidate. Plans to re advertise are going on and if successful
the position should be filled by end of July 2014
6.3 Programme Management
Overall risk assessment for Programme Management is Low
In total, there were twenty (20) projects implemented during the year, out of which sixteen (16)
projects were within the APB 2013 and four (4) projects were out of the APB 2013. All
programmes are managed by Director of programmes.
The key aspects of the programme management were assessed and the results of assessment
are provided in the next paragraphs.
6.3.1 Context of inputs and outputs
The IP entered into agreements with IPPF and other donors. These documents specify objectives
and expected outputs of the projects. Heads of Departments with the assistance of the Site
Director prepare quarterly and annual work plans where detailed activities are discussed with the
aim of addressing objectives of all programmes, these work plans specify what is to be achieved,
how it is to be done and sets realistic time frames for implementation of activities. Progress
reports are prepared on a quarterly basis by the Head of Departments and state the progress
towards achieving expected outputs. The Monitoring and Evaluation department also produces
reports to monitor implementation of the programmes. All activities which were implemented and
reports produced were in line with the programme objectives and expected outputs.
XYZ activities are guided by the objectives of their five year Strategic Plan 2011 – 2015.XYZ
annual reports provides a detailed reflection on the implementation of the annual program budget
which focused on five areas(5A’S) and four support strategies. The 5A’S are Access, Adolescents,
Abortion, HIV/AIDS and Advocacy. The support strategies are Governance and Accreditation,
Capacity Building, Knowledge and Management and Resources Mobilization. All activities
implemented by the IP are in line with their objectives. Inputs and outputs of the planned activities
are well stipulated in the AWP. We urge XYZ to continue with this good practice.
6.4 Financial Management Capacity
17
XYZ
The Finance department is guided by the Financial Management and Regulations Manual during
operations and the department is headed by a qualified Director of Finance who is assisted by
Chief accountant and other Finance Officers who are suitably qualified.
The IP operates thirteen bank accounts and bank reconciliations are prepared timely and
reviewed by authorized personnel. All transactions are approved and authorized by appropriate
personnel. Duties are properly segregated between departments and the initiation of a
transaction up to the posting into the DacEasy Accounting system is performed by different
individuals among the IP’s staffs. Records of assets are kept in an asset register which is
periodically reconciled with the general ledger for any changes during the year. The assets are
uniquely coded and are insured against all risks.
The key aspects of the Financial Management Capacity of the IP were assessed and the detailed
results of assessment are provided in the next paragraphs.
6.4.1 Suitability of the organization structure and governance
The Organizational structure of the IP is suitable and appropriate for the work to be carried out
under UN cooperation. The corporate governance of the Association consists of the National
Council (NatCo) and National Executive Committee (NEC) chaired by an elected Chairperson.
National Executive Council (NEC) which comprises of seven individuals, one of which are not part
of the daily operations of the IP. There were formal meetings of National Executive Members
during the 2013 financial year, for which minutes of the proceedings were availed for verification.
The National Executive Council have sub-committees such as the Audit Committee that oversees
the financial aspects and compliance of the IP except for the internal audit function.
Directors are Finance and the Directorate of Programmes. Young people as primary target group
are part and parcel of XYZ’s governance and program through a functional Youth Action
Movement (YAM) operating from the grassroots to the national level as shown in the organization
chart below:
XYZ ORGANIZATION CHART
18
XYZ
NATCO
NEC
PROGRAMME
COMMITTEE AUDIT COMMITTEE
EXECUTIVE DIRECTOR
IA
DP DF
A&RMM HRM
PLO
CA
C&PRO
Secretary OA Drivers
MEM CSM Area Managers PM
Cashier Project
Site/Youth POs/Youth Accountants
MEO Clinic FAOs Centre officers
In charges Coordinat
Clinic officers/ Project Officers Program Assistant

Nurses
We consider the organizational structure of the IP is appropriate for the work to be carried out
under UN cooperation.
6.4.2 Funds Flow
19
P
r
o
XYZ
The IP receives funds from IPPF in five remittances based on approved budgets and they receive
funds directly from IPPF based on project contract agreements and depending on whether
reports have been submitted or not as shown in the table below:
Grant Management Schedule

Grant Due dates for reports Conditions for Payment
remittance approval commences
1st Remittance 31 December. (a) All prior year From Mid-January
Preceding year of reporting completed
funding
2nd 28th February (a)Annual report for From mid-April
Remittance prior year.
(b)Signed Funding
Agreement
(b) Audited Accounts
and
September
5th Remittance 15th September (a) Annual Programme From Mid-November
Budget for following
year
The arrangements to transfer funds to the IP are satisfactory as the Foundation has thirteen bank
accounts in both local currency and United States dollar with National Bank of Commerce (NBC)
and these accounts are used to receive funds from various donors. Every fund is deposited in a
specific bank account assigned for it as shown in the table below:
Name of Account Bank Details Account Number Donor

XYZ NBC Bank Limited 11103021048 IPPF
XYZ NBC Bank Limited 18101002335 XYZ
XYZ Day-care Centre NBC Bank Limited 18101002300 XYZ
XYZ Training NBC Bank Limited 19103006955 IPPF
XYZ Training NBC Bank Limited 12103011137 JOICFP
Chama Cha Uzazi na Malezi Bora NBC Bank Limited 41103000060 XYZ/Comic Relief
XYZ/AFRICARE NBC Bank Limited 41101002386 AFRICARE TANZANIA
XYZ/AMREF NBC Bank Limited 41103001877 AMREF
XYZ/MERK NBC Bank Limited 41103002043 MERK
XYZ/SIDA NBC Bank Limited 41103002055 SIDA
XYZ/CIDA NBC Bank Limited 41103002067 CCP
XYZ KIBAHA ENDENGER HEALTH NBC Bank Limited 103816008 ENGENDER HEALTH
XYZ NBC Bank Limited 8702006211900 XYZ
20
XYZ
For IPPF funds, after reports have been received and approved by IPPF, grant is remitted to XYZ
as per Grant management Schedule. For other donors other than IPPF the project Accountant
prepares a FACE form and funds request letter depending on the agreement. The FACE form and
funds request letter are signed and approved by the Director of program who then sends the
documents to a respective donor.
This section is rated low as no weakness was noted. The IP should continue with the good
practice.
6.4.3 Staffing
The organizational structure of the IP’s accounting/finance department is appropriate for the level
of financial volume (including funding from the Agency). The department is headed by a qualified
Director of Finance who is assisted by a suitably qualified Chief Accountant. The other supporting
finance staff are four (4) Financial Administrative Officers, Cashier and four (4) Project
Accountants.
The organizational structure provides clear lines of reporting and accountability in that they have
the Executive Director, followed by Directors, Managers and then Officers.
The level of competence of staff is appropriate for the level of financial volume. The Director of
finance is a qualified CPA (T) who has more than 7 years accounting and auditing experience.
The Chief Accountant is also a qualified CPA holder.
The accounts and finance staff are familiar with UN procedures related to cash transfers.
However through discussion with the head of department of Procurement and Logistics and the
Human Resources department, it was established that there is a need to add and recruit an
Assistant Procurement and Logistics Officer in the Procurement and Logistics Department as well
as Assistant Human Resources officer in the Human Resource Department.
Risk Rating
No Description of issues H S M L
1 A need to increase personnel in the procurement department and √
Human Resources Department
An interview with the Procurement and Logistic Officer together with
Human Resource officer revealed that they are overloaded. There is a
21
XYZ
Risk Rating
need for an additional staffs in these two department.
Recommendation:
Management should asses and consider to recruit additional staffs if
necessary.
Management comment:
Management is considering recruiting staff for these positions in
light of the funding constraints.
This section is rated moderate as no weakness was noted. The IP should continue with the good
practice.
6.4.4 Accounting Policies and Procedures
The IP utilizes the Financial management and regulation manual, Procurement and supplies
manual which are issued by the Executive Director as mandatory guidelines to all staff and
management dealing with routine accounting and financial matters as well as related
administrative matters. The policies and procedures can only be amended, deleted or replaced by
the National Executive Council (NEC) in a formal meeting. The manuals are kept and maintained
by the Executive Director who distributes them to all appropriate personnel
practice.
22
XYZ
6.4.5 Internal Audit
Risk assessment is Significant
The IP does not have an internal audit department and no audit was done at XYZ. The risk for
this category is ranked as Moderate supported by the issue noted below.
Risk Rating
1 Lack of Internal Audit function √
The IP does not have an Internal Audit function and thus there were no
internal audit reports for the period under review from XYZ or through
outsourcing of the service.
Recommendation:
Management should consider setting up an internal audit department.
The Internal Auditor will ensure compliance with all the requirements of
the financial regulations and appraise the National Executive Council of
the status of the records, systems, procedures and controls.
Management comment:
Given the funding constraints, the internal audit function will be
outsourced while in the meantime the function will be performed by
getting a finance staff from one location to carry out the internal audit in
another location.
6.4.6 External Audit
The IP is audited annually by Ernest & Young. We reviewed three audits conducted for the
financial periods ended 31st December, 2011, 31st December, 2012 and 31st December, 2013. The
audits were conducted in accordance with the International Standards on Auditing. The IP was
given unqualified opinion on its financial statements for all the three years.
The external auditor’s management letters for the 2011,2012 and 2013 financial years do not
show the status of implementation of activities, however, we reviewed the issues raised by the
Auditors and noted that some of the issues were not implemented for the past three years as
shown below:
23
XYZ
Risk Rating
1 Management of organization funds. √
Long term outstanding of advance payments made amounting to TZS
Sixteen million for software installation was not refunded from 2009 to
date.
√
Recommendation:
We recommend the management to make close follow up on
immediately recovery of the advanced funds or delivery of
goods/services.
Management comment:
The consultant was engaged and paid by IPPF Regional Office in
Nairobi on behalf of XYZ. IPPF have been informed to follow up with the
consultant and recover the amount.
2 Fully depreciated assets still in use. √
The review of management audit report for the financial statements
prepared for the year ended 31st December 2011 It was noted that fully
depreciated assets worth Tshs 408 million were fully depreciated and still
√
in use
Recommendation:
Management is advised to look on cost benefit analysis and consider
disposing the assets with zero book values.
Management comment:
An asset valuation consultant is to be engaged to re-value the
assets of XYZ but this is yet to be carried out due to funding
constraints.
3 Organization Internal Auditor
No internal audit function that mitigates threats to internal controls and
ensures adherence to XYZ’s operational policies.
Recommendation:
Management should commission appointment of an internal auditor who
would be charged with ensuring adherence to policies and procedures
as well as mitigating risks on internal controls.
Management comment:
As stated in paragraph 6.4.5 above, the internal audit function will be
outsourced while in the meantime this function will be performed by
getting a finance staff from one location to carry out the internal audit in
another location.
4 XYZ site zones/regions visits observations
Mwanza
Periodical year end stock counting is not done although XYZ holds
significant closing inventory by end of year. For instance in year 2012 the
24
XYZ
Risk Rating
closing was TZS 98,664,013 while for 2013 the inventory value was Tshs
324,687,000
Recommendation:
We recommend the use of Periodical year end stock counting to all
XYZ’s inventory movements
Management comment:
Year end stock counts have always been done in all locations, some of
which have been under the observation of our external auditors, Ernst &
Young.
6.4.7 Internal controls
The IP’s internal controls are set by the National Executive Council (NEC) through the Financial
Hand book manual but however, it is management’s responsibility to ensure that adequate
controls are in place to help safeguard the IP’s assets.
The IP operates thirteen bank accounts and bank reconciliations are prepared timely and
reviewed by authorized personnel. All transactions are approved and authorized by appropriate
personnel. Duties are properly segregated between departments and the initiation of a
transaction up to the posting into the DacEasy Accounting system is performed by different
individuals among the IP’s staff. Records of assets are kept in an asset register which is
periodically reconciled with the general ledger for any changes during the year. The assets are
uniquely coded and are comprehensively insured against all risks.
Transactions and activities of XYZ are authorised by the Director of Finance & Administration and
the Executive Director. Management has set a ceiling on signatories as to the amount they may
sign for. The Executive Director, the Director of Finance and the chief accountant are authorized
to sign on all cheques, where as the Director of programmes has a ceiling of Tshs
50,000,000.The chairperson and vice chairperson are authorized to sign all cheques.
Supporting documents: Sample of all payments made through the main cashbook and the petty
cash system had third party supporting documents such as invoices or cash sale receipts. All
documents supporting payments should be stamped PAID
The risk for this category is ranked as Low as not issues noted.
25
XYZ
6.4.8 Budgeting system
The IP’s budgets are prepared from Annual Work Plans and all significant activities are included
in sufficient detail to provide a meaningful tool with which to monitor subsequent performance.
The annual budget is prepared as follows: The annual budget is prepared in the last quarter of
the year preceding the budget period. The Area Service Delivery Managers submit their budget
proposals to the Director of Programmes (DP). The DP reviews the individual budgets and makes
appropriate amendments. The Director of Finance Prepares the Head Office budget. The
Programme and Head Office budgets are consolidated by the DFA. The budget is discussed and
reviewed by the following: Executive Director (ED), Director of Finance and Administration and
Director of Programmes. The budget is forwarded to the Executive Committee for review and
approval. The budget is forwarded to IPPF Africa Region for further reviews. The plans and
budgets of activities are realistic and based on valid assumptions.
practice.
6.4.9 Reporting and Monitoring
The financial statements are prepared as we have observed organizations financial statements
for the year 2011 to 2013. Financial statements are prepared annually dated 31st December each
year, and on time as they appear useful to the organization decision making. XYZ is using
DacEasy accounting package for financial reporting and budgeting. DacEasy has no capacity to
link the financial information to the work plan’s physical progress. Financial information exported
from DacEasy are manually linked to the organization work Plan through Microsoft Office Tools.
Annual financial reports, monthly and quarterly reports are prepared and submitted to the donors.
Each donor has got his reporting system, whereas others want a report monthly while some want
on quarterly basis except IPPF that wants semi-annual reports as shown below:
26
XYZ
Grant Due dates for reports Conditions for Payment

remittance approval commences
1st Remittance 31 December. (a) All prior year From Mid-January
Preceding year of reporting completed
funding
2nd 28th February (a)Annual report for From mid-April
Remittance prior year.
(b)Signed Funding
Agreement
(b) Audited Accounts
and
September
5th Remittance 15th September (a) Annual Programme From Mid-November
Budget for following
year
The monthly and quarterly reports contain an analysis of funds received for that period, detailed
expenditures showing how funds were used in line with the approved budget and the remaining
balance for the same period.
These reports are useful when accounting for the use of funds to ensure that funds are being
used for the purposes budgeted for. Annual financial statements contain details of financial
position and performance of the organization’s projects.
Also XYZ prepare management reports that compares actual expenditures in line with the
approved budgets’ and are prepared in accordance to donor’s requirements. Some of the donors
need the reports to be issued to them on monthly basis while others wants in a quarterly basis
and only IPPF wants semi-annual reports.
However, XYZ does not have an automatic accounting system to enable a direct preparation of
financial reports as it appears that all financial reports are prepared using spreadsheets that are
prepared by the project accountant, verified by the program accountant and approved by the
director of finance thereof.
This section is rated medium due to the weakness noted. The IP should consider replacing the
system.
27
XYZ
6.4.10 Information Systems
Risk assessment is High
The Financial management system of XYZ has been computerized. They are using DacEasy
Accounting package. However, there are no policies and procedures to maintain the accounting
system. There is no IT Manager who is adequately trained to maintain the system.
DacEasy produces only the following reports, trial balance and activity Reports (Activity
Cashbooks, Activity Expenses, and other activity ledger).However, the system cannot produce
This section is rated high due to weaknesses that were noted below:
Risk Rating
1 Lack of policies and procedures to maintain this system √
XYZ does not have policies and procedures for operating DacEasy
accounting system. The policies and procedures serves the purpose of
restrict access to the DacEasy accounting system and maintenance of
the same in Backup, restoration and update of the database.
Recommendation:
Management should prepare and ensure full compliance with the
policies and procedures to maintain the accounting system
Management comment:
A new accounting software that is soon to be installed and
implemented will ensure that there are adequate policies and
procedures to maintain the system.
2 Consideration for purchasing another accounting softwares √
The DacEasy accounting system was found not to be able to produce
Recommendation:
XYZ should consider replacing DacEasy Accounting software with
QuickBooks accounting Package.
28
XYZ
Risk Rating
Management comment:
XYZ is in the process of purchasing and installing a new accounting
software whereby technical and financial proposals have been received
and are now awaiting evaluation.
29
XYZ
6.5 Procurement/Logistics
The IP’s procurement process is guided by the Procurement and supplies manual revised in 26 th
February 2013.The overall objective of the procurement activity is to provide standards and
procedures for transparent procurement of goods, services, equipment and any other matter
incidental thereto in pursuance or connected with the organization, in the most efficient and cost
effective manner.
The department is made up of only one staff headed by a Certified Procurement and Supply
Professional (CPSP) who also holds a Bachelor of Procurement and Supply. He has experience
in this field and is reporting to the Executive director.
All international procurement of Goods and services are done by International Planned
Parenthood Federation (IPPF) on behalf of XYZ.XYZ only bears the costs of clearing those goods
from the Tanzania Port Authority. IPPF usually sends the copy of invoices used to purchase to
XYZ for reporting purpose.
For normal purchases made by XYZ,the following policies and regulations are followed:
• For purchases worth up to Tshs ten Million (10,000,000) the requisition is authorized by
Director of Finance and Administration (DFA).
• While for all purchases exceeding Ten million (10,000,000), the requisition is authorized
by all procurement committee members.
Procurement Committee is made up of the following members:

1. Human Resources Officer-Mrs. Asha Othmani
2. Program Manager- Tausi Hassani
3. Chief Accountant- Janeth Magezi
4. Procurement Logistic Officer (PLO)-Mr. Emmanuel Bujiku (Secretary of the committee)
30
XYZ
The risk for this category is ranked as significant supported by control weaknesses noted
below.
C Procurement/Logistics H S M L
1 Lack of specific anti-fraud and corruption policy √
XYZ should show commitment to transparency and accountability in the
management of its resources in order to ensure the effective fulfilment
of its Strategic Objectives. The Anti-fraud and corruption policy should
to prevent fraudulent, corrupt and/or collusive practices through: i)
appropriate internal checks and balances; ii) staff training and
awareness; iii) due diligence practices in the recruitment of XYZ staff
members, non-staff employees and the hiring of contractors; and iv)
effective internal and external auditing controls
Recommendation:
Management should prepare and ensure full compliance with the anti-
fraud and corruption policy during procurement of goods.
Management comment:
XYZ has no manuals solely for anti-fraud and corruption but however,
accountability/transparency issues are covered in three separate
manuals, namely; (i) Risk Policy & Register, (ii) Human Resource
Manual, and (iii) Financial Management & Regulations Manual.
2 Exception to procurement procedures are not documented and √
sent to the management for approval
Section 4.4.5 of the procurement manual requires all emergence
procurements to be approved by the executive director. However for
best practise these should be documents for future reference
Recommendation:
Management should ensure that exceptions to procurement procedures
are documented and approved.
Management comment:
There will be documentation of exceptions to procurement procedures
and approvals.
3. Lack of track of past performance of suppliers √
Having a database with suppliers information and past performance of
various supplies serves the organization of who supplier to choose in
future especially during the evaluation of capacity assessment of the
supplier under review.
Recommendation:
Management should keep the performance of its suppliers for future
reference. Past performance information play a key part in the selection
31
XYZ
decision that increase the likelihood of XYZ awarding contracts to top

notch suppliers.
Management comment:
Noted. Management will keep a record of suppliers’ performance and
use it in decision making.
4 Lack of computerized procurement system √

Best practise has shown that Computerized Procurement system
increases productivity and efficiency in the following ways:
 Less paper work
 Instant flow of communication from vendors to purchaser and
users
 Low human resource requirement
 Better handling of records especially previous purchase records
 Better vendor database maintenance.
Recommendation:
Management should computerize its procurement system in rode to
reduce administrative costs, shorten the length of the purchase cycle
and reduce human error, thereby minimizing shortages
Management comment:
The proposed accounting software that is to be installed will have a
procurement module that will in future be used.
5 Lack of enough personnel in the procurement department √

An interview with the Procurement and Logistic Officer revealed that he
is overloaded. There an additional staff should be recruited to help him
to achieve the overall objective of his section.
Recommendation:
Management should recruit an additional staff to the procurement unit
to increase efficiency of the department.
Management comment:
As commented in paragraph 6.4.3 above, management is considering
recruiting an additional personnel in the procurement department in the
light of funding constraints
32
XYZ
6.6 FACE Forms and Transactions Testing
The IP makes use of FACE forms for requisition of funds from donors and for reporting on the use
of Cash Transfer Installments received from donors. The FACE forms for both the requisition of
funds and the liquidation of funds are prepared by the project accountant and reviewed and
approved by the director of program.
We reviewed the liquidation forms for accuracy with accounting records, for completeness in
posting into the accounting system and also for occurrence and approval of expenditure recorded
thereon on a test basis. We also reviewed whether the activities recorded on the forms were in
line with the approved quarterly work plans. We did not come across any exceptions from the
sample of transactions selected.
6.7 Follow-up of Prior Assessments/Audit Recommendations
Risk assessment is Medium
As part of our assessment procedures, we have reviewed the status of actions taken on findings
and recommendations included in the Auditor’s Reports for three years ended 31 st December
2013 to verify whether they were implemented in subsequent years. We report on status of the
corrective actions below:
2011, 2012 and 2013

We have reviewed the status of actions taken on findings and recommendations included in the
Auditor’s Report for three years 31st December 2013, to verify whether they were implemented in
the subsequent financial years. We noted observation made by auditors not implemented to
dates as follows:
33
XYZ
Observation Recommendation Work done Implementation

status
Management of organization We recommend the Reviewed the Not Implemented
funds management to make auditors
Long term outstanding of close follow up on management
advance payments made immediately recovery of letters and
amounting to Sixteen million the advanced funds or discussed with
for softwares installation was delivery of the management
not refunded to date. goods/services
Organization Internal Management is advised Reviewed the Not Implemented
Auditor. to ensure the internal auditors
Lack of internal audit section auditor always perform management
the agreed roles as per letters and
terms stipulated in the discussed with
contract the management
Fully depreciated assets still Management is advised Reviewed the Not Implemented
in use. to look on cost benefit auditors
It was noted that full analysis and consider management
depreciated assets worth Tshs disposing the assets letters and
408 million were fully with zero book values discussed with
depreciated and still in use. the management
XYZ site zones/regions We recommend the use Not Implemented
visits observations. of Bin cards to all XYZ’s
inventory movements.
Mwanza
There is no periodical year
end stock counting
34
XYZ
7.0 Overall Recommendations
Based on our assessment we recommend the following:
a) Cash transfer modality: We recommend the UNFPA to continue with the current
modality of direct wire transfers.
b) Action Plan: The IP should prepare an Action Plan to address the weaknesses identified
within a reasonable timeframe.
c) Procurement procedures: The IP should address all the weaknesses in procurement

proceedings to ensure value for money, transparency and fair treatment in its
procurements.
8.0 Conclusion
We have concluded that the overall level of risk relating to Programme and Financial
Management Capacities for the IP is Moderate.
35
XYZ
Annex 1. Programme-specific Information

The following information should be completed at the start of the micro assessment.
Implementing partner name: XYZ
Programme name: SEXUAL AND REPRODUCTIVE HEALTH (SRH) EDUCATION,

INFORMATION AND SERVICES IN TANZANIA.
Programme number: Not Applicable
Programme background: XYZ is an autonomous, not for profit, non-political voluntary national NGO
providing Sexual and Reproductive Health (SRH) information, education and
services in Tanzania
In agreement with IPPF, XYZ implement its project which focuses in five
programme areas (5A’s) and four support strategies. Adapted from the XYZ
strategic plan (2011-2015), the 5A’s thematic areas are Access, Adolescence,
Abortion, HIV/AIDS and advocacy. The support strategies are Governance and
accreditation, Capacity Building, Knowledge management and resources
mobilization
Programme location: DAR ES SALAAM TANZANIA
Programme contact person(s): EXECUTIVE DIRECTOR/PROGRAM DIRECTOR
Location of records: XYZ HEAD OFFICE -DAR ES SALAAM TANZANIA
Currency of records maintained: TANZANIA SHILLING(TZS) AND UNITED STATE DOLLAR($)
Period of transactions covered by micro assessment: 2012 & 2013
Funds received during the period covered by the attestation engagement: Tshs 3,007,922,000Equivalents to US Dollars 1865,312 For the year Ended 31st
December 2013
Expenditures incurred/reported during the period covered by the attestation Tshs 3014,060,000 Equivalent to US Dollars 1,889,164
36
XYZ
engagement:
Intended start date of micro assessment: 26/06/2014
Estimated number of days required for visit to IP: 3 DAYS
Any special requests to be considered during the micro assessment: No
Cash transfer modality used by the IP: Direct Transfer
37
HACT Framework
Appendix XIII – Financial Audit TOR
Summary of Risks Related to the Financial Management Capacity of the Implementing Partner
Tested subject area (see subsequent pages for details of each subject area summarized below)
Total number of risk Total number of Overall risk

points applicable questions assessment Comments
1. Implementing partner: 5 5 1 The IP (XYZ) has been registered as a Society under

Societies Ordinance, 1954 on 30th November, 1973 vide
Certificate of registration S0.No.3129.XYZ has also been
registered with Tanzania Revenue Authority and assigned
the Taxpayer Identification Number(TIN) 101-304-795
2. Funds flow: 7 7 1 XYZ can receive and pay cash from its banks accounts.
Funds received are directly deposited to its bank accounts
from various donors. Each grant is deposited in its own
assigned bank account.
3. Organizational 17 10 2 The organizational structure of the IP’s

structure and staffing: accounting/finance department is appropriate for the level
of financial volume (including funding from the Agency
However through discussion with the head of department
of Procurement and Logistics and the Human Resources
department, it was established that there is a need to add
and recruit an Assistant Procurement and Logistics
Officer in the Procurement and Logistics Department as
well as Assistant Human Resources officer in the Human
Resource Department
4. Accounting policies 48 46 1 The IP utilizes the Financial management and regulation

and procedures: manual, Procurement and supplies manual which are
issued by the Executive Director as mandatory guidelines
to all staff and management dealing with routine
accounting and financial matters as well as related
administrative matters. The policies and procedures can
only be amended, deleted or replaced by the National
Executive Council (NEC) in a formal meeting. The
38
HACT Framework

manuals are kept and maintained by the Executive

Director who distributes them to all appropriate
personnel
5. Internal audit: 15 5 3 The IP does not have an Internal Audit function and thus
there were no internal audit reports for the period under
review from XYZ or through outsourcing of the service
6. Financial audit: 13 7 2 The IP is audited annually by Ernest & Young. We

reviewed three audits conducted for the financial periods
ended 31st December, 2011, 31st December, 2012 and
31st December, 2013. The audits were conducted in
accordance with the International Standards on Auditing.
The IP was given unqualified opinion on its financial
statements for all the three years.
However, the review of management audit reports
showed that there are issues raised by the Auditors and
noted that some of the issues were not implemented for
the past three years
7. Reporting and 16 8 2 The financial statements are prepared as we have

monitoring: observed organizations financial statements for the year
2011 to 2013. Financial statements are prepared annually
dated 31st December each year, and on time as they
appear useful to the organization decision making. XYZ
is using DacEasy accounting package for financial
reporting and budgeting. DacEasy has no capacity to link
the financial information to the work plan’s physical
progress. Financial information exported from DacEasy
are manually linked to the organization work Plan
through Microsoft Office Tools
39
HACT Framework

8. Information systems: 17 5 3 The Financial management system of XYZ has been

computerized. They are using DacEasy Accounting
package. However, there are no policies and procedures
to maintain the accounting system. There is no IT
Manager who is adequately trained to maintain the
system
Also,the system cannot produce the following reports:
9. Procurement: 62 37 2 The IP’s procurement process is guided by the

Procurement and supplies manual revised in 26th
February 2013.The overall objective of the procurement
activity is to provide standards and procedures for
transparent procurement of goods, services, equipment
and any other matter incidental thereto in pursuance or
connected with the organization, in the most efficient and
cost effective manner.
However, the following weakness were observed:
 Lack of specific anti-fraud and corruption policy.
 Exception to procurement procedures are not
documented and sent to the management for
approval
 Lack of track of past performance of suppliers.
 Lack of computerized procurement system.
40
HACT Framework

Total: 200 130 2
41
HACT Framework
Micro Assessment Questionnaire
Low risk consideration Risk

Subject area Yes No N/A points Remarks/comments
1. Implementing partner
1.1 Is the IP legally registered? If so, is it in compliance with Yes IP is registered in the country 1 XYZ has been registered as a Society
registration requirements? Please note the legal where the programme under Societies Ordinance, 1954 on 30th
status/registration of the entity. operates and is current with November, 1973 vide Certificate of
registration/reporting registration S0.No.3129.
Retain copies of registration documents if available. requirements.
XYZ has also been registered with
Tanzania Revenue Authority and
assigned the Taxpayer Identification
Number(TIN) 101-304-795
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HACT Framework

1.2 Has the IP received United Nations resources in the past? If Yes IP has received United 1 XYZ received funds from UNESCO to
so, provide details of amounts, from which agency and for Nations resources in the past finance the Sexual Behaviour and
what purpose. and no issues were Communication change as follows:
encountered with utilizing Amount
these funds. Amount in Us
FYE in Tshs Dollar
2013 72,379,000 45,366
2014 5,000,000 3,125
Total 77,379,000 48,491
Also XYZ received donation in the form

of drugs from UNFPA through IPPF
worth Tshs 312,010,981.32 in June
2014.
1.3 Does the IP have statutory reporting requirements? If so, The IP is compliant with 1 XYZ is responsible for preparation and
are they in compliance with such requirements? Please applicable statutory presentation of Financial Statements in
describe. requirements. accordance with the constitution of
XYZ and the International Planned
Parenthood Federation (IPPF) reporting
requirements, with IPPF being the main
the donor of the organization.
1.4 Is the governing body for the IP independent from The governing body of the IP 1 XYZ is governed by National Executive
management? If so, please describe. is independent from Council. It is required to have 12
management. members with a fixed term of three
years. The National Executive Council
is gender sensitive as it is required to
have fifty by fifty percent of females
and male members.
The National Executive Council has the
43
HACT Framework

powers to oversee management of the

affairs and the conduct of the IP and
safeguard its vision and mission. The
following were the current board
members:
1 Mrs Rose Wasira Chairperson
Vice
2 Mr Chares Mgondo Chairperson
3 Mr Ally Laay Treasurer
Mrs Mary
4 Chipungahelo Member
Mrs Josephine
5 Mlundwa Member
6 Mrs Felistas Kalomo Member
7 Mrs Asya Sharriff Member
8 Mr Gervas Ndaki Member
9 Mr John Haraba Member
10 Mr Noel Shilembi Member
11 Mr Sunday Salehe Member
12 Mrs Saida Kiponza Member
As per section 26 of the constitution,

they are required to meet one in a year.
1.5 Does the IP have any pending legal actions against it? The IP does not have any 1 XYZ does not have any pending legal
Confirm this with the IP, and possibly through assessment pending legal actions against actions against it.
of the general ledger and confirmation with external legal it.
counsel provided by the IP. Provide details and actions
taken by the IP to resolve the legal action.
Total number of questions in subject area: 5 5
Number of questions marked ‘N/A’ in subject area:
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HACT Framework

Total number of applicable questions in subject area:
Total number of risk points: 5
Implementing partner overall risk assessment: 1
2. Funds Flow
2.1 Can the IP easily receive and transfer funds? If so, please The IP can receive funds 1 XYZ can receive funds as it has been
describe the process. directly from the agency. receiving funds direct to its bank
accounts from various donors as per
funds flow indicated in appendix I:
2.2 Are the proposed arrangements to transfer the funds to the The proposed arrangements 1 Currently the organization has thirteen
IP satisfactory to the funding agency? are satisfactory to the funding bank accounts where donors’ project
agency. funds are deposited. There is separate
accounts for each donor’s fund (Refer to
appendix I) such that funds’ utilisation is
accounted for separately in relation to
the Fund.
Therefore there is no risk that funds for

one project can be used for other
unintended project (misuse of funds).
2.3 Have there been major problems in the past in receipt of The IP has not had problems 1 There are no delays in receipt of funds.
funds by the IP, particularly where the funds flow from in the past regarding receipt Most donors follow the Cash remittance
government ministries (if applicable)? If so, please of agency funding. schedules set by each donor.
describe.
2.4 In the past, has the IP had any problems in the The IP has not had problems 1 No problem
management of funds received? If so, please describe. in the management of funds
received from the funding
agency.
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HACT Framework

2.5 Does the IP have capacity to manage foreign exchange The IP has capacity and 1 The organization does not expect to use
risks? (If it is expected to be using funds outside the experience in managing funds outside of the country, neither to
country.) If so, does the IP have experience managing foreign exchange risk. implement projects beyond the borders.
foreign exchange risk?
2.6 Does the IP have a process in place to access counterpart The IP has capacity and 1 Funds are accessed through submission
funds? Please describe. experience in assessing of action plans and budgets to the
counterpart funds. donors. Funds are received direct in the
appropriate project bank account.XYZ
submits annual audited reports to the
donors or management reports to
account for the funds received.
2.7 If some activities will be implemented by others, such as The IP has the necessary 1 All activities are implemented by
civil society groups or non-governmental organizations, reporting and monitoring XYZ.No activity is implemented by
does the IP have the necessary reporting and monitoring mechanisms in place to track others
mechanisms to track the use of funds? Does the IP have the use of funds by external
experience with implementation of activities by external organizations. The IP also has
civil society or non-governmental organizations? If so, experience with this process.
please describe.
Total number of questions in subject area: 7
Funds flow overall risk assessment: 1
3. Organizational Structure and Staffing
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HACT Framework

3.1 Is the organizational structure of the IP’s The organizational structure 1 The organizational structure of
accounting/finance department appropriate for the level of of the IP’s accounting/finance the IP’s accounting/finance
financial volume? Does the organizational structure department is appropriate for department is appropriate for the
provide clear lines of reporting and accountability? If so, the level of financial volume level of financial volume
please describe. (including funding from the (including funding from the
agency). agency). The department is
Attach an organization chart if available. headed by a qualified Director of
Finance who is assisted by a
suitably qualified Chief
Accountant. The remaining staff
in the department are 4 Financial
Administrative Officers, Cashier
and 4 Project Accountants
The organizational structure
provides clear lines of reporting
and accountability in that they
have the Executive Director,
followed by Directors, Managers
and then Officers.
The IP’s organization chart is

attached as Appendix 1.
3.2 Are the level of posts and competency of staff appropriate The level of posts and 1 The level of competence of staff
for the level of financial volume in the accounting/finance competency of staff are is appropriate for the level of
department? Identify the staff, including job titles, appropriate for the level of financial volume. The Director of
responsibilities, educational backgrounds and professional financial volume in the finance is a qualified CPA (T) He
experience. accounting/finance has more than 7 years
department. accounting and auditing
Attach job descriptions and CVs of key accounting/ experience.
finance staff. In addition the Chief Accountant
is qualified CPA holder.
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HACT Framework

Job Descriptions and CVs of key

accounting/ finance staff have
been attached in appendix 2
Note: The CV for CA is missing.
3.3 Is the IP’s accounting/finance function staffed adequately The IP’s accounting/finance 1 The IP’s finance and accounts
to ensure sufficient controls are in place to manage agency function is staffed adequately function is staffed adequately. It
funds? If so, please describe. to ensure sufficient controls has eleven staff in the finance
are in place to manage department, the Director of
agency funds. Finance, Chief Accountant, 4
Finance Administrative Officers,
4 project Accountants and a
Cashier. As per the current
volume of transactions
department is able to handle the
level of financial volume.
3.4 Are accounting/finance staff familiar with United Nations The accounting/finance staff 1 The accounts and finance staff
procedures related to cash transfers (specifically the are familiar with United are familiar with UN procedures
HACT framework)? If so, please provide details. Nations procedures related to related to cash transfers. The
cash transfers (specifically Director of Finance has prior
the HACT framework). working experience with UN
donor funds. He has also been
working with the IP since
November 2013 and familiar with
UNFPA procedures.
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HACT Framework

3.5 Are there vacancies in positions considered key? If so, The IP does not have any 4 From the XYZ organization
provide the estimated date of appointment. vacancies in positions structure, the position of Internal
considered key. Auditor has not been contracted
yet and the recruitment for this
position is also not known
In addition there has been a
vacancy for Monitoring and
Evaluation Manager since 2012,
it was advertised in 2013 but
they were not able to get a
successful candidate. Plans to re
advertise are going on and if
successful the position should be
filled by end of July 2014.
3.6 Are staff frequently transferred to other departments, IP staff are not frequently 1 Staff are not frequently
offices, countries, etc.? If so, what is the estimated transferred to other transferred to other departments,
frequency? departments, offices, offices or countries. For the
countries, etc. period of 2012 and 2013 only
two staff were transferred as
follows
1.Clinic Officer from Mwanza to
Moshi for educational reasons
2.Nurse from Mbeya to Iringa so
that she can reunite with her
family.
3.7 Does the IP have training policies for accounting/finance The IP has training policies 2 The IP has training and
staff? Are necessary trainings undertaken? If so, please for accounting/finance staff, development policies which offer
describe. which are undertaken as benefits to individuals and the
planned. organization as a whole. The
policy is documented under
section 7.1 of the revised
49
HACT Framework

February 2013 Human Resource

Manual
>From Interview conducted with

the HR, the staff received only
internal training during the period
of 2012 and 2013. We are
however yet to receive a list of
trainings conducted and those
who attended.
3.8 Has there been significant turnover in the past five years? The IP has not had significant 1
If so, has the rate improved or worsened? Does it appear to turnover in the past five Still pending, waiting to receive
be a problem? If so, what is the IP doing to address this years. turnover list from HR
issue?”
3.9 Does the IP perform background verification/checks on all The IP performs background 4 There is no evidence that
new accounting/finance and management positions? If verification/checks on all new Background checks have been
alternative practices for processing new hires are in place, accounting/finance and performed for some staff like
please provide a brief description. management positions. Chief Accountant, Advocacy and
Resource Mobilisation Manager,
Program Manager, the 4 Project
Accountants, Communication
and Public Relations Officer.
Refer to work done on appendix
4
3.10 Does the IP have a defined and documented internal The IP has a defined and 1 The IP has a defined and
control framework? Is this framework consistent with documented internal control documented internal control
international standards? If so, please describe. framework framework and it comprises of
the following:
>Audit Committee- there is an
audit committee which meets
50
HACT Framework

four times a year to review the

internal control issues and
further evaluate the effectiveness
and adequacy of the Member
Associations’(MA) internal
control system
>Effective Governance- in 2013,
the MA started to implement new
constitution together with other
internal policy documents. The
constitution sets out the policy
development and decision
making processes of the Board
as well as the rule governing
MA’s business. It defines the
TOR of the Council itself
together with other bodies/
committee of NEC and also
contains the codes of conduct
that have been adopted for
volunteers and employees. We
have a copy of this constitution in
our external file.
>Communication of the MA’s
Objective and Priorities- The MA
has a well-established statement
of purpose, aims and values.
This involves the use of Annual
Program Budget (APB) 2013, to
review and determine priorities
and to address the budgetary
implications arising. The APB
was developed in alignment of
51
HACT Framework

the 2011- 2015 Strategic Plan,

submitted to the board and IPPF
for approval.
Staff appraisal – New employees
performance appraisal was
developed as per IPPF
standards to provide a
comprehensive framework which
ensure congruence of individuals
work goals against MA corporate
objectives and reviewing their
performance work plans in the
context of their contribution to
the achievement of the annual
work plan which also are in
alignment to the strategic plan
2011 – 2015.
Recruitment and promotions-
The policies and guidelines
within the MA as per Human
Resource policies were followed
to ensure appropriate persons
are selected to fill the available
positions. Formal training in
different areas through workshop
and seminars are in place to
ensure that staffs are competent
with adequate knowledge and
skills to enable them to
discharge their duties and
responsibilities effectively.
A clearly defined framework with
appropriate empowerment and
52
HACT Framework

authority limits has been

approved by the board for
acquisitions and disposals of
assets, awarding tenders, writing
off operational items, donations
as well as approving general and
operational expenses
The Financial Management,
Procurement and Supplies,
Human Resource policies and
procedures which are in place
were consistently applied to
ensure compliance with internal
control and the prescribed laws
and regulations together with
IPPF external audit manual is
used in case there is a specific
issue not addressed in those
local policies.
Organizational structure and staffing overall risk 2

assessment:
4. Accounting Policies and Procedures
4a. General
53
HACT Framework

4.1 Does the IP have an accounting system that allows for The IP has an accounting 3 The IP uses the DacEasy accounting
proper recording of financial transactions from United system that allows for proper Package which allows for the proper
Nations agencies, including allocation of expenditures in recording of financial recording of financial transactions from
accordance with the respective components, disbursement transactions from United UN Agencies including the allocation of
categories and sources of funds? Nations agencies, including expenditures in accordance with the
allocation of expenditures in activity Reports, disbursement
accordance with the categories and sources of funds.
respective components,
disbursement categories and The system is divided into various
sources of funds. categories namely; General ledger,
cashbook, budget, expenditure, Fixed
assets and inventories, travel,
procurement and reporting.
All funds from donors are assigned in

different accounts as per the chart of
accounts including their related
expenditure.
However the system is unable to
produce statement of financial positions,
Statement of income and expenditures
and income and expenditures by
projects unless manual prepared.
Each project has its own payments

vouchers files and other accounting
documents
4.2 Are controls in place concerning preparation and approval Controls are in place 1 The user department prepares a
of transactions, ensuring that all transactions are correctly concerning preparation and requisition form which is signed and
made and adequately explained? Who check is the tax approval of transactions, reviewed and approved by the head of
associated with the transaction are paid on time? ensuring that all transactions department. The requisition is then sent
are correctly made and to the director of finance (DF) for
adequately explained. approval. If approved the requisition is
54
HACT Framework

sent to the Procurement Department

whereby three quotations are sourced.
Once satisfied, a purchase order is
prepared manually Procurement
department. Once items are delivered a
Goods Received Note is prepared by the
Administrative Assistant and the
Supplier raises a delivery note and
invoice. Thereafter a payment voucher
is prepared by the Finance Officer who
forwards it to the director of finance
(DF) for approval.
4.3 Is the chart of accounts adequate to properly account for The chart of accounts is 1 The IP follows the standard chart of
and report on activities and disbursement categories? adequate to properly account accounts as per donor requirement and
for and report on activities incorporated in the organization as a
and disbursement categories whole. The chart of accounts is adequate
in accordance with the and can be accommodated in the
established agreements. DacEasy system. It is adequate for
accounts and reporting on activities and
disbursement categories.
4.4 Are controls in place for accurate cost allocations to the Controls are in place for 1 Cost allocations to the funding sources
various funding sources in accordance with established accurate cost allocations to are made accurately using project wise
agreements? the various funding sources accounting codes and project accounts
in accordance with are maintained separately and in
established agreements. accordance with their particular
agreements.
4.5 Are the general ledger and subsidiary ledgers reconciled at The general ledger and 1 General ledgers and subsidiary ledgers
least monthly? Are explanations provided for significant subsidiary ledgers are provided by the DacEasy system are
reconciling items? reconciled at least monthly, reconciled and are in balance.
and explanations are provided
for significant reconciling
items.
55
HACT Framework

4.6 Are all accounting and supporting documents retained Accounting and supporting 1 Accounting and supporting documents
permanently in a defined system that allows authorized documents are retained are retained on a permanent basis. The
users easy access? If so, please describe. permanently in a defined documents are stored in the containers
system that allows authorized within the offices for easy access.
users easy access.
However, the IP also has nor server and
an external hard drive which should be
used for back-up of data
4.7 Does the IP have policies and procedures for tracking and The IP has policies and 1 In previous years,XYZ has been
reporting United Nations resources as required in the procedures for tracking and receiving funds from UNFPA.Most of
HACT framework? If so, please describe. reporting United Nations them are medicines and drugs
resources as required in the received.XYZ through its office of
HACT framework. Procurement and Logistic has been
handling reporting of the same vide
policies and procedures set in the
Procurement manual developed by
Procurement and Supply Professional
and Technician Boards(PSPTB).
Also, XYZ has the Financial
management and regulation manual
prepared in compliance with the
International Financial Reporting
standards (IFRS).This standards help
XYZ to report funds it receives from
Various donor in compliance with
applicable standards.
4b. Segregation of duties
4.8 Are the following functional responsibilities performed by The following functional 1 Functions are performed by different
different units or individuals: (a) authorization to execute a responsibilities are performed individuals as follows:
transaction; (b) recording of the transaction; and (c) by different units/individuals:  Approval of Payments: Executive
custody of assets involved in the transaction? (a) authorization to execute a Director
transaction; (b) recording of
56
HACT Framework

the transaction; and (c)  Authorization – Director of Finance

custody of assets involved in  Recording–Accountants
the transaction.  Payments-Cashier
 Custody of assets involved in the
transaction fall under the respective
user department and store
department as a whole-Cashier
4.9 Are the functions of ordering, receiving, accounting for The functions of ordering, 1 Functions are appropriately segregated
and paying for goods and services appropriately receiving, accounting for and as the ordering and receiving is done by
segregated? paying for goods and services Procurement Logistic Officer (PLO),
are appropriately segregated. While accounting is performed by the
Chief Accountant and payments are
initiated by the accountants with final
approval by the director of finance.
4.10 Are bank reconciliations prepared by individuals other Bank reconciliations are 1 The bank reconciliations are prepared
than those who make or approve payments? prepared by individuals other by the cashier and reviewed and
than those who make or approved by Chief Accountant,
approve payments. therefore the persons approving
payments are not the ones preparing the
bank reconciliations.
4c. Budgeting system
4.11 Do the IP’s budgets lay down physical and financial The IP’s budgets lay down 1 The organization’s budget lays down
targets? physical and financial targets. physical and financial targets. The
budgets are derived from Annual Work
Plans which specify the physical targets.
Financial targets are then measured from
these physical targets. We reviewed
budgets for the financial years 2012 and
2013 and these budgets were showing
the physical and financial targets.
57
HACT Framework

4.12 Are IP budgets prepared for all significant activities in IP budgets are prepared for 1 The budgets are prepared from Annual
sufficient detail to provide a meaningful tool for all significant activities in Work Plans and all significant activities
monitoring subsequent performance? sufficient detail to provide a are included in sufficient detail to
meaningful tool for provide a meaningful tool with which to
monitoring subsequent monitor subsequent performance.
performance
4.13 Are actual expenditures compared to the budget with Actual expenditures are 1 Actual expenditures are compared to
reasonable frequency? Are explanations required for compared to the budget with budget with reasonable frequency and
significant variations from the budget? reasonable frequency, and explanations are provided for significant
explanations are required for variations from the budget. This analysis
significant variations from is performed during submission of
the budget. reports to donors on a quarterly basis or
depending on the donor’s prescribed
period
4.14 Are approvals required prior to significant variations from Approvals are required prior 1 Approvals from variations from the
the budget? to significant variations from budget are required in advance .Heads
the budget. of Departments prepare requests which
are reviewed by the Executive Director
and then the requests are forwarded to
the National Executive Council which
finally seek approval from the Donors.
4.15 Does the IP have a designated individual(s) responsible The IP has a designated 1 Budgets are prepared on a participatory
for preparation and approval of budgets related to agency individual(s) responsible for basis by all departments of the
funding? preparation and approval of organization. Heads of department’s
budgets related to agency zonal area managers, program officers,
funding. Finance staffs and some of the clinical
officers in charge compile all relevant
information and then a meeting is set up
by the program manager assisted by
Monitoring and evaluation officer
whereby all the information is
discussed. Chief accountant, director of
58
HACT Framework

finance program manager and

Monitoring and evaluation officer then
consolidates all information for
presentation in a specific format
required by donors. Budgets for the
following year are usually due in
September of each year. The budget is
submitted to IPPF office in Nairobi
Kenya.
4.16 Are procedures in place to plan activities, collect Procedures are in place to 1 Procedures are in place to plan
information from the units in charge of the different plan activities, collect activities, collect information from the
components and prepare the budgets? If so, please information from the units in units in charge of the different
describe. charge of the different components and prepare the budgets.
components and prepare the Collection and planning of information
budgets. is done through site coordinators who
send the information to the zonal
managers. Then zonal manager
consolidate the individual budgets from
site coordinators. Zonal managers send
again the consolidated budget to
monitoring and evaluation officer at
XYZ headquarters.
Monitoring and evaluation officer
consolidate all the zonal manager’s
budget. Monitoring and evaluation
officer and program manager hold a
meeting to prepare the consolidated
budget. The consolidated budget is then
approved by the National Executive
Council.
4.17 Are the plans and budgets of activities realistic, based on The plans and budgets of 1 The plans and budgets of activities are
valid assumptions and developed by knowledgeable activities appear to be realistic and based on valid assumptions.
individuals? realistic, based on valid Budget informations base on prior year
59
HACT Framework

assumptions, and developed information, experience and

by knowledgeable recommendations from monitoring and
individuals. evaluation exercises.
The consolidated budgets are developed
by knowledgeable individuals as the
Heads of Departments are qualified in
their professions
4d. Payments
4.18 Do invoice processing procedures provide for: Invoice processing 1 The user department prepares a
 Copies of purchase orders and receiving reports to be procedures are sufficient, requisition form which is signed and
obtained directly from issuing departments? including: receiving copies of reviewed by the Head of Department
 Comparison of invoice quantities, prices and terms purchase orders and receiving and finally approved by the Executive
with those indicated on the purchase order and with reports directly from issuing Director. The requisition is then sent to
records of goods actually received? departments; comparing the Procurement Department whereby
invoice quantities, prices and three quotations are sourced. Once
 Checking the accuracy of calculations, if any? terms with those indicated on satisfied, a purchase order is prepared
the purchase order and with manually by the Procurement
records of goods actually department and this is signed and
received; and checking the approved by the director of finance.
accuracy of calculations (if
any). Once items are delivered a Goods
Received Note is prepared and the
Supplier raises a delivery note and
invoice.
The procurement Logistic Officer
checks the goods received against the
purchase order and supplier invoice for
completeness and accuracy.
Thereafter a payment voucher is

prepared by the assistant accountants
who forwards it to the Chief accountant
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HACT Framework

for review and further forwarded to the

director of finance for approval and
authorization
4.19 Can the IP identify tax-exempt activities to ensure tax is The IP has the ability and 1 The organization accountants can
not paid? experience to identify tax- identify tax exempt activities to insure
exempt activities and ensure tax compliance. However XYZ’ projects
tax is not paid. are not tax exempted.
4.20 Are all invoices stamped ‘PAID’, dated, reviewed and Invoices are stamped ‘PAID’, 1 Invoices and other supporting
approved, and clearly marked for account code dated, reviewed and documents are dated, reviewed and
assignment? approved, and clearly marked approved and are clearly stamped
for account code assignment. “PAID”. We reviewed a sample of
payments made in the months of
January 2014.
4.21 Do controls exist for preparation and approval of payroll Controls exist for the 1 The payroll is prepared by the payroll
expenditures? Are changes properly authorized? If so, preparation and approval of accountant Mr.Norasko Kayombo and is
please describe. payroll expenditures and reviewed by the Chief Accountant (Mrs.
changes are properly Janeth Magezi) and then approved by
authorized. director of finance.
Any changes to the payroll are
communicated vide letter from Human
resources officer to the director of
finance for approval.
4.22 Do controls exist for expense categories that do not Controls exist for expense 1 Yes,all payments should approved as
originate from invoice payments, such as DSA, travel, categories that do not per financial regulations
consultancies? originate from invoice
payments, such as DSA,
travel, consultancies.
4e. Policies and procedures
4.23 Does the IP have a single stated basis of accounting (e.g., The IP has a single basis of 1 The IP prepares its financial statements
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HACT Framework

cash or accrual)? If so, please describe. accounting. in accordance with the accrual basis
4.24 Does the IP have an established accounting manual The IP has an established 1 Yes, XYZ has Financial management
sufficient to ensure control of assets and proper use of accounting manual sufficient and regulation manual revised in 2013.
agency funds? Are internationally accepted accounting to ensure control of assets Yes, XYZ follows the International
standards followed? If so, which standard? and proper use of agency Financial Reporting Standards (IFRS)
funds. This manual follows together with International Planned
an internationally accepted Parenthood Federation (IPPF) under the
accounting standard. historical cost convention.
These annual financial statements
comprises:
 A Statement of income, expenses
and changes in fund balances;
 A Statement of Financial Position
(Balance Sheet) as at the end of the
financial year showing all the assets
and liabilities;
 Statement of functional expenses-
restricted by donors
 Statement of changes in other donor
balances
 Statement of functional expenses-
unrestricted funded by IPPF
 The Accounting Policies Adopted
and Explanatory Notes.
4.25 Does the IP have an adequate policies and procedures The IP has an adequate 1 XYZ has a Financial management and
manual to guide activities and ensure staff accountability? policies and procedures regulation manual and it has adequate
If so, please describe. manual to guide activities and policies and procedures to guide
ensure staff accountability. activities and ensure staff accountability.
4.26 Do procedures exist to ensure that only authorized persons The IP has procedures in 1 Only the National Executive Council is
can alter or establish a new accounting principle, policy or place to ensure that only allowed to amend and add any sections
procedure to be used by the IP? authorized persons can alter of the Financial manual and these
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HACT Framework

or establish a new accounting changes will be signed for by the XYZ

principle, policy or National chairperson.
procedure.
4.27 Are there written policies and procedures covering all There are accessible written 1 The Financial management and
routine financial management and related administrative policies and procedures regulation manual and Staff Handbook
activities? Are these accessible? Please describe. covering all routine financial manual adequately cover all routine
management and related financial management and related
administrative activities. administrative activities. These manuals
are easily accessible to all staffs.
4.28 Do policies and procedures clearly define ‘conflict of The IP has well-defined 1 The Financial management and
interest’ and ‘related party transactions’ (real and policies and procedures for regulation manual and Staff Handbook
apparent) and provide safeguards to protect the ‘conflict of interest’ and manuals clearly define conflict of
organization from them? If so, please describe. ‘related party transactions’ interest and related party transactions
(real and apparent) that (real and apparent) and provide
provide adequate safeguards safeguards to protect the organization
to protect the organization from them.
from them.
4.29 Are manuals distributed to appropriate personnel? If so, Manuals are distributed to 1 The manuals are distributed to all staffs
please describe the manuals and the personnel who receive appropriate personnel. through Heads of Departments.
them.
4f. Cash and banks
4.30 Are there authorized signatories on the bank accounts that The IP has signatories on the 1 Simon I.Mbele-Director of program
will be used for United Nations resources? How many bank accounts that will be Janeth Magezi-Chief Accountant
signatories are on the bank account and how many are used for United Nations Stephen Mutashubilwa-Director of
required to execute transactions? If so, provide names. resources and more than one finance.
signatory is required for each
Any two signatories can sign on the
transaction.
bank accounts.
4.31 Does the IP maintain an adequate, up-to-date cashbook, The IP maintains an 1 The DacEasy Accounting Package
recording receipts and payments? adequate, up-to-date maintains cashbooks for each bank
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HACT Framework

cashbook, recording receipts account. Project cashbooks reviewed

and payments. were adequate, up-to-date and had
receipts and payments recorded in them.
4.32 Do controls exist for the collection, timely deposit and Controls exist for the 1 The IP receives funding from donors
recording of receipts at each collection location? If so, collection, timely deposit and and service charges received from
please describe. recording of receipts at each clients attended in upcountry clinics.
collection location. Funds are directly transferred into the
bank accounts while service charges are
banked weekly and prepare weekly
reports to XYZ head office.
4.33 Are bank balances and cash ledger reconciled monthly and Bank balances and cash 1 Bank reconciliations for the month are
properly approved? Are explanations provided for ledgers are reconciled prepared manually outside the
significant and unusual reconciling items? monthly and properly accounting system, DacEasy by the
approved. Significant and Cashier and are reviewed by the Chief
unusual reconciling items are Accountant.
explained.
4.34 Are agency resources be placed in a separate bank Agency resources are placed 1 Yes Agency resources should be placed
account? in a separate bank account. in a separate bank account for control
purpose and easy reporting and
reconciliation.
4.35 Are cash and checks maintained in a secure location? Has Cash and checks are 1 Cash and checks are maintained in a
access been properly designated and maintained? maintained in a secure safe in XYZ head office.
location and access has been
properly designated and
maintained.
4g. Safeguards for assets
4.36 Is there a system of adequate safeguards to protect assets The IP has a system of 1 Yes
from fraud, waste and abuse? If so, tour the facility to adequate safeguards to
ensure the system has been implemented and followed. protect assets from fraud,
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HACT Framework

waste and abuse.
4.37 Are subsidiary records of fixed assets and inventory kept Subsidiary records of fixed 1 Yes
up to date and reconciled with control accounts? If so, assets and inventory are kept
please describe. up to date and reconciled
with control accounts.
4.38 Are there periodic physical inventories of fixed assets and The IP performs periodic 1 Yes
stocks? If so, please describe. physical inventories of fixed
assets and inventory.
4.39 Are fixed assets and inventory adequately covered by The IP’s fixed assets and 1 Yes
insurance policies? inventory are adequately
covered by insurance
policies.
4h. Other offices or entities2
4.40 Do any other offices/entities participate in If the IP has other 1 XYZ does not have other implementing
implementation? If so, does the IP have policies and offices/entities participating offices/Entities for its project activities.
process to ensure appropriate oversight and monitoring of in implementation, there are
implementation? adequate policies and
procedures to ensure
appropriate oversight and
monitoring of
implementation. The IP also
has experience with this
process.
4.41 Does information flow among the different offices/entities Information flows among the 1 XYZ does not have other implementing
in an accurate and timely fashion? If so, please describe. different offices/entities in an offices/Entities for its project activities
accurate and timely fashion.
4.42 Does the IP have a process in place to evaluate the impact The IP has a process in place 1 XYZ does not have other implementing
2
This refers to sub-offices of the IPs or other parties.
65
HACT Framework

of any deficiencies or negative findings identified through to evaluate the impact of any offices/Entities for its project activities
reporting or discussions with the other offices/entities? If deficiencies or negative
so, describe the process. findings identified through
reporting or discussions with
the other offices/entities. The
IP also has experience with
this process.
4.43 Does the IP maintain contractual agreements with other The IP maintains current 1 XYZ does not have other implementing
offices/entities? contractual agreements with offices/Entities for its project activities
other offices/entities.
4.44 Does the IP have a process to ensure expenditures of other The IP has a process to 1 XYZ does not have other implementing
offices/entities are in compliance with the work plan ensure expenditures of other offices/Entities for its project activities
and/or contractual agreement noted in item 4.43? offices/entities are in
compliance with the work
plan and/or contractual
agreements.
4i. Other
4.45 Has the IP advised employees, beneficiaries and other The IP has advised 1 XYZ does not have other implementing
recipients to whom they should report if they suspect employees, beneficiaries and offices/Entities for its project activities
fraud, waste or misuse of agency resources or property? other recipients to whom they
should report if they suspect
fraud, waste or misuse of
agency resources or property.
4.46 If yes to item 4.45, does the IP have a policy against The IP has a policy against 1 XYZ does not have other implementing
retaliation for those who report fraud, waste or misuse of retaliation for those who offices/Entities for its project activities
agency resources or property? report fraud, waste, or misuse
of agency resources or
property.
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HACT Framework

Accounting policies and procedures overall risk assessment: 1
5. Internal Audit
5.1 Is the internal auditor sufficiently independent to make The internal auditor is 3 The Implementing Partner does not have
critical assessments? To whom does the internal auditor sufficiently independent to an Internal Audit department
report? make critical assessments.
5.2 Does the IP have stated qualifications and experience The IP has stated 3 The Implementing Partner does not have
requirements for internal audit department staff? If so, qualifications and experience an Internal Audit department
please describe. requirements for internal
audit department staff.
5.3 Will the activities financed by the agencies be included in The activities financed by 3 The Implementing Partner does not have
the internal audit department’s work programme? agency funds will be included an Internal Audit department
in the internal audit
department’s work
programme.
5.4 Does the internal auditor have policies and procedures to The internal auditor has 3 The Implementing Partner does not have
take action on findings identified? policies and procedures to an Internal Audit department
take action on findings
identified, if any.
5.5 Does the IP appear to have strong internal controls to The IP appears to have strong 3 The Implementing Partner does not have
ensure funds are expended for their intended purpose, to internal controls to ensure an Internal Audit department
discourage and prevent improper use of funds, and to funds are expended for the
safeguard assets? If so, please describe. intended purpose, discourage
and prevent improper use of
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HACT Framework

funds, and safeguard assets.
Internal audit overall risk assessment: 3
6. Financial Audit
6.1 Are the IP’s specific financial statements audited regularly The IP’s specific financial 1 We were availed with the reports
by an independent auditor? If so, please describe the statements are audited for the year ended 31st Dec,
auditor. regularly by an independent 2011; 2012 and 2013
auditor.
respectively whereas the Board
appointed Ernst & Young as an
Independent Auditor.
Financial
Year Nature of Audit
ended Opinion
2011 Unqualified report
6.2 Are there any delays in audit of the IP? When are the audit There are no delays in audits 1 No
reports issued? of the IP’s financial Audit for FYE 2013 was
statements, and the financial concluded in 30th April 2014
statements are issued within a
Audit for FYE 2012 was
reasonable amount of time.
concluded in 17th April 2013
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HACT Framework

Audit for FYE 2011 was

concluded in 27th April 2012
6.3 Is the audit of the IP’s financial statements conducted The audit of the IP’s 1 We have evidenced this from the
according to the International Standards on Auditing? financial statements are Report of Independent Auditors
conducted according to the of the past three consecutive
International Standards on years of audit, thus year 2011 to
Auditing. year 2013.
They perform those standards to
comply with ethical requirements,
plan and perform the audit to
obtain reasonable assurance as
to whether the IP’s financial
statements are free from material
misstatements.
6.4 Were there any major accountability issues brought out in No major accountability 4 Year 2011
audit reports of the IP over the past three years? issues were brought out in 1. Late submission of statutory
audit reports of the IP over deductions and skills and
the past three years. development levy (SDL); it was
reported that, the organization did
not submit on time the NSSF
contributions, PAYE tax and SDL for
some months during the year ended
31/12/2011.
2. Difference between inventory

records and yearend stock count;
it was noted that the inventory count
sheets had no reconciliation to
account for the differences; hence
the inventory sheets were signed by
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HACT Framework

one staff or completely not signed by

all staff engaged in physical stock
count exercise. Moreover, the record
movements of stock showed
negative balance while physical
inventory exists as per stock count.
3. Management of organization
funds; it was noted that there was
one long outstanding advance
payment at TZS 16 million paid for
the software installation in 2009 but
no service or refund that was
received in relation of the advance.
Basing on the auditors best practice
on management of organization
resources, advances are made only
for services expected to be received
within a reasonable agreed period of
delivery of services or goods. In
case of failure on delivery, the
advanced funds must immediately
be refunded by the respective
supplier or utilized on alternative
deliveries.
4. Late submission of (Pay As You
Earn) PAYE; it was reported that,
Income Act of 2004 considers late
payment of tax levied/withheld as an
offence is subjected to penalties as
stipulated in the Act. PAYE is
supposed to be submitted to TRA
(Tanzania Revenue Authority) within
7 days from the month of deduction.
5. Reconciliation of funds sent to
the zones/sites; it was noted that
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HACT Framework

there was no regular reconciliation

performed by the head office which
shows the amount sent to particular
zone, amount retired by that zone
and outstanding balance.
6. Cash book reconciliation for
donor funds; it was noted that, the
organization does not maintain
cashbook as per respective
donor/project, the situation that
makes difficult to trace for the bank
account balances for each
respective donor.
The current situation was that, more
than one donor/project funds, are
maintained in one bank account and
it is apparent that one project might
be funded by more than one donor,
however a good practice requires
that each donor’s fund to have its
own bank account for the purpose of
proper cash management.
7. Zonal bank reconciliations; it
was noted that, the reconciling items
in the bank reconciliations which
include outstanding cheques and
unretired advances from zones were
not sufficiently detailed.
8. Breakdown for the cash held at
Southern zone; it was noted that,
there were no an attachment for the
breakdown of the zonal financial
report that analyses the projects per
donor for the purpose of showing the
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HACT Framework

balances as per cash book per

project the month of December
2009.
9. Bank reconciliation
performance and review; the bank
reconciliation statements of the
organization’s bank accounts was
not prepared and reviewed on time.
The bank reconciliation for the
month of December 2011 was
prepared and approved during the
audit field work.
10. XYZ bank accounts; for the
case of cash management system
reviewed, it was noted that, the
organization maintains numerous 24
bank accounts for the head office in
Dar es salaam.
The numbers of bank accounts
maintained are reasonably
considered to be incompatible with
regard to the magnitude of the
operations in the head office as far
as the size and number of
transactions pertaining to the head
office.
11. Organization Internal Auditor;
it was noted that there was no
evidence whether internal auditor
performed the agreed work up to the
year end. Furthermore, no
documented evidence of
management follow-up to find out
why internal auditor did operated as
72
HACT Framework

per terms in contract.

12. Untaxed benefits; it was noted
that the security allowances paid to
key management personnel were
not included as employment benefit
in the employees’ computation of
PAYE as required by the Tanzania
Income Tax Act, 2004. The security
allowances paid without deduction of
PAYE amounted to TZS
12,758,200/=
Year 2012
1. Personnel’s extra remuneration
from project funding; it was
observed that the organization has a
practice of remunerating its
employees engaged on certain
projects described as “other”
projects amount over and above
their normal monthly remuneration
and per-diems. These payments are
referred to as professional and
consultancy fees.
It was also observed that during the
year a total of TZS 83,164,696 was
TO SOME OF
paid by XYZ
ITS EXECUTIVES AND
OTHER EMPLOYEES AS
FOLLOWS:
PROJECT AMOUNT Parties paid
IN TZS paid
73
HACT Framework

to XYZ
staffs as
staff time
cost
TANROAD 29,000,000 1 employee

Several
AFRICAFE 19,863,116 employees
Several
CHAMPION 19,071,580 employees
Several
AFP 7,200,000 employees
Several
AMREF 8,030,000 employees
Several
TOTAL 83,164,696 employees
2. Non-compliance with the terms

of the contract of the Tanzania
National Roads Agency
project/Non compliance with
income Tax Act, 2004; it was noted
that, TANROADS disbursed TZS
226,088,000/= to XYZ for
implementation project out of which
TZS 71,000,000/= was paid as
professional and consultant fees
according to the contract, the
consultants, sub-consultants and
personnel shall pay taxes as may be
levied by tax laws. However, there
was no evidence of payment of any
tax for the payments made to the
consultants and sub-consultants.
3. Late submission of statutory
deductions and skills and
development levy (SDL); it was
observed that, the organization did
not submit on time National Social
Security Funds (NSSF)
74
HACT Framework

contributions, PAYE (Pay As You

Earn) tax and skills and
development levy (SDL) for some
months during the year ended 31st
December, 2012.
4. Incorrect computation of
statutory deductions; it was noted
that the organization does not
compute statutory deductions
correctly as required by the tax Act
performance and review; it was
noted that, the bank reconciliation
was not prepared and reviewed on
timely manner. The bank
reconciliation statement for the
month of December, 2012 was
actually prepared and approved
during the audit field work.
6. XYZ sites/zones/regions visit

observations; XYZ
site/zones/regions visit
observations; the external auditors
observed the following on their visit
to XYZ
 Mwanza
There was no periodical or
yearend stock/inventory count
done for all drugs and
inventories except for the
contraceptives only.
 Mwanza, Moshi and Mbeya
75
HACT Framework

No evidence whether all cash

collected are properly recorded
and receipted. It was pointed
out that, for Mwanza region for
the month of January and
February, the zone did not have
receipt books for the reason
that XYZ head office delayed
the dispatching of the receipt
books to the zone offices.
Moreover, the auditors were
unable to obtain the cash
collection summaries and their
respective deposit slip details
for the same, so auditors were
unable to confirm themselves
that cash collected are
deposited intact and timely as
required by the organization
policy and procedures
regarding cash management.
Hence, it took a long time (two
weeks to a month) for the cash
collected to reach the bank for
all regions visited.
funds; it was noted that long term
outstanding of advanced payments
made amounting to 16 mil paid for
the software installation in 2009. No
service or refund received in relation
to this advance until end of year
2011.
76
HACT Framework

Year 2013
1. No evidence of cash collection-

mbeya clinic; no evidence of cash
collection at mbeya clinic, as the
external auditor could not conclude
whether cash collected reported to
XYZ head quarter was fairly
presented.
2. Terminated staff still included

in the list of signatories; it was
noted that, one of the terminated
staff called Doctor Mmasy had been
included in the list of signatories to
date. Doctor Mmasy had been
terminated in November 2013 but
during the auditors’ review in April
2014, his name was still there as a
signatory.
3. Late submission of statutory

deductions and skills and
development levy (SDL); the
external auditors noted that the
organization overpaid SDL by 1% for
the period from July, 2013 to Dec,
2013 whereas, XYZ used 6% SDL
rate instead of 5% which changed
effectively from 1st july,2013 from 6%
to 5%.
4. Incorrect computation of
77
HACT Framework

statutory deductions; it was noted

that the organization does not
compute statutory deduction
correctly
 With IPPF project SDL

computed by XYZ is TZS
17,523,600/= while SDL as per
law is TZS 29,758,670/= the
difference is TZS 12,235,070/=
 With AFRICARE project SDL

1,152,000/= while SDL as per
law is TZS 1,958,400/= the
difference is TZS 806,400/=
 With ZENCHO project SDL

292,800/= while SDL as per law
is TZS 512,400/= the difference
is TZS 219,600/=
 With AMREF project SDL

254,100/= while SDL as per law
is TZS 512,400/= the difference
is TZS 203,520/=
performance and review; the
external auditors noted that the bank
Hence, the reconciliation for the
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HACT Framework

audit field work.
6. XYZ SITE/ZONE/REGIONS VISIT

OBSERVATION; the external
auditors observed the following on
their visit to XYZ
 Mwanza
There was no periodical or

and receipted. It was pointed
out that, for Mwanza region for
the month of January and
February, the zone did not have
receipt books for the reason
that XYZ head office delayed
the dispatching of the receipt
books to the zone offices.
Moreover, the auditors were
unable to obtain the cash
collection summaries and their
respective deposit slip details
for the same, so auditors were
unable to confirm themselves
that cash collected are
deposited intact and timely as
required by the organization
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HACT Framework

Hence, it took a long time (two

weeks to a month) for the cash
collected to reach the bank for
all regions visited.
7. Management of organization’s
2011.
6.5 Will the auditor audit the accounts related to the work plan The auditor will audit the 1 The organization (XYZ) has got five
or other contractual agreements with the agency? If not, accounts related to the work projects called 5A’s and each project
will a separate auditor be appointed to audit the work plan plan or other contractual has different activities and donor for
financial statements? agreements with the agency. each activity under every project as
follows:
1. Access project; it has 6 project
activities which as:
 Community and facility linked
SRH services including FP-
funded by CIDA
 Community based sexual and
Reproductive Health Services-
funded by ZENSHO
 Strengthening linked between
community initiated and Health
Center RH Services- funded by
JOICFP
 Integral maternal health
improvement initiatives- funded
80
HACT Framework

by MSD (MERCK)
 Increase access to
contraceptives focusing on
Long-Acting and Permanent-
funded by ENGENDER
HEALTH
 Increase access for SHR
service through surgical camps-
funded by IPPF
2. Adolescent project; it has 4

project activities which are as
follows:
 Improving Access to young
people’s Sexual Reproductive
Health and Rights Information
Education and services- funded
by IPPF
 Pamoja Tuwalee OVC project-
funded by AFRICARE
TANZANIA
 Mobilizing action to safeguard
right of girls in Tanzania- funded
by COMIC RELIEF
 Afya ya uzazi ni haki ya kijana
Tuitetee- funded by AMREF
3. HIV/AIDS; it has only one

program called Integrated HIV/AIDS
Related Services to SHR- funded by
IPPF
4. Abortion project; it has two
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HACT Framework

projects as under:
 Integrated abortion and safe
motherhood related
services- funded by IPPF
 Cervical Cancer Screening
and Preventative Therapy-
funded by GATES
5. Advocacy; it has only one project

named Increase publicity and
visibility of XYZ for growing and
development- funded by IPPF
6.6 Have any recommendations made by auditors in the prior All recommendations made 4 Year 2011; these are the issues
three audit reports and/or management letters not yet been by the auditor in the prior raised from 2010 audit but appeared
implemented? three audit reports and/or again in 2011 audit as follows:
management letters have 1. Late submission of PAYE; it was
been implemented. reported that, Income Act of 2004
considers late payment of tax
levied/withheld as an offence is
subjected to penalties as stipulated
in the Act. PAYE is supposed to be
submitted to TRA (Tanzania
Revenue Authority) within 7 days
from the month of deduction. The
issue was yet not implemented
performance and review; the bank
The bank reconciliation for the
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HACT Framework

audit field work. The issue was

partially implemented
3. XYZ bank accounts; for the case
of cash management system
reviewed, it was noted that, the
organization maintains numerous 24
bank accounts for the head office in
Dar es salaam.
The numbers of bank accounts
maintained are reasonably
considered to be incompatible with
regard to the magnitude of the
operations in the head office as far
as the size and number of
transactions pertaining to the head
office. The issue was yet not
implemented
4. Organization Internal Auditor; it
was noted that there was no
evidence whether internal auditor
performed the agreed work up to the
year end. Furthermore, no
documented evidence of
management follow-up to find out
why internal auditor did operated as
per terms in contract. Yet, the issue
was not implemented
5. Assets with zero net book
value; it was observed that the
organization has several assets with
zero net book value, since the
assets are still in use, huge amounts
were incurred for repair and
maintenance cost incurred the
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HACT Framework

employees’ efficiency while working

with older assets is highly affected.
The matter was yet not implemented
Year 2012; these are issues raised

in 2011 audit but appeared again in
2012 audit:
2011. The issue was yet not
implemented
Year 2013; these are issues from

prior audits but were not yet
implemented as under:
funds; external auditors noted that
long term outstanding of advanced
payments made amounting to 16 mil
for software installation, no refund or
service was received.
This matter existed since 2011 to
2013 audits but partially
implemented.
2. XYZ site/zones/regions visit

observations; the external auditors
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HACT Framework

observed the following on their visit

to XYZ
 Mwanza
There is no periodical or

and receipted. Moreover, the
auditors were unable to obtain
the cash collection summaries
and their respective deposit slip
details for the same, so auditors
were unable to confirm
themselves that cash collected
are deposited intact and timely
as required by the organization
This matter appeared in 2012 audits
but it reappeared in 2013 issues, but
partially implemented.
3. Full depreciated of assets that

are still in use; it was noted that full
depreciated assets are still in use,
the assets worth TZS 408 million are
fully depreciated, since the assets
are still in use, huge amount were
incurred for repair and maintenance,
85
HACT Framework

hence costs incurred employees’

efficiency while working with the
older assets is highly affected.
The issue was reported in 2011
audits as “assets with zero net book
value”, it reappears in 2013 audits
but partially implemented.
4. Organization internal auditor;
there is no internal audit section
within the organization. Since 2010
audits to date although it has not
been reported in 2013 audits
6.7 Historically, has the IP prepared audit plans? The IP has historically 4 There was no evidence to suggest
prepared audit plans. that the organization prepared audit
plans..
Financial audit overall risk assessment: 2
7. Reporting and Monitoring
7.1 Are financial statements prepared specifically for the IP? Financial statements are 1 The financial statements are
prepared specifically for the prepared as we have observed
IP. organizations financial statements
for the year 2011 to 2013.
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HACT Framework

7.2 What is the frequency of preparation of the financial Financial statements of the 1 Financial statements are prepared
statements mentioned in 7.1? Are the reports prepared in a IP are prepared on a frequent annually dated 31st December each
timely fashion so they are useful to management for basis so they are useful to year, and on time as they appear
decision-making? management for decision- useful to the organization decision
making. making
7.3 Does the reporting system have the capacity to link the The reporting system has no 4 XYZ is using DacEasy accounting
financial information with the work plan’s physical capacity to link the financial package for financial reporting and
progress? If separate systems are used to gather and information with the work budgeting. DacEasy has no capacity
compile physical data, what controls are in place to reduce plan’s physical progress. to link the financial information to the
the risk that the physical data may not synchronize with work plan’s physical progress.
the financial data? Financial information exported from
DacEasy are manually linked to the
organization work Plan through
Microsoft Office Tools.
7.4 Does the IP have established financial management The IP has established 2 Annual financial reports, monthly
reporting responsibilities that specify what reports are to financial management and quarterly reports are prepared
be prepared, what they are to contain and how they are to reporting responsibilities that and submitted to the donors. Each
be used? If so, please describe. specify what reports are to be donor has got his reporting system,
prepared, what they are to whereas others want a report
contain and how they are to monthly while some want on
quarterly basis except IPPF wants
be used.
semi-annual reports.
The monthly and quarterly reports

contain an analysis of funds
received for that period, detailed
expenditures showing how funds
were used in line with the approved
budget and the remaining balance
for the same period.
These reports are useful when

accounting for the use of funds to
87
HACT Framework

ensure that funds are being used for

the purposes budgeted for. Annual
financial statements contain details
of financial position and performance
of the organization’s projects.
7.5 Does the IP have financial reports that compare actual The IP has financial reports 1 The financial reports compares
expenditures with budgeted and programmed allocations? that compare actual actual expenditures in line with the
expenditures with budgeted approved budgets’ and are prepared
and programmed allocations. in accordance to donor’s
requirements as it appears that
some want reports to be issued to
them on monthly basis while others
wants in a quarterly basis and only
IPPF wants semi-annual reports.
7.6 Are financial reports prepared directly by the automated Financial reports are 4 The organization does not have an
accounting system or are they prepared using spreadsheets prepared directly by the automatic accounting system to
or some other means? automated accounting enable a direct preparation of
system or using spreadsheets financial reports as it appears that all
(or some other means) that financial reports are prepared using
are properly reviewed and spreadsheets that are prepared by
approved. the project accountant, verified by
the program accountant and
approved by the director of finance
thereof.
7.7 Does the IP appear to have been solvent (i.e. total assets The IP appears to have been 1 XYZ has been solvent for the past
greater than total liabilities) for the past three fiscal years? solvent (i.e. total assets three years as shown in Appendix
Are there any unexplained or ongoing inconsistencies? greater than total liabilities)
Provide the amount of total assets and total liabilities for for the past three fiscal years.
the current and prior fiscal year.
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HACT Framework

7.8 Do the IP’s total revenues/contributions exceed its total The IP’s total 2 XYZ total revenue exceed
expenditures over the past three fiscal years? Have the IP’s revenues/contributions expenditures over the past three
contributions been contracting (i.e. dwindling) over the exceed its total expenditures years except FYE 2013 where by it
past three years? If so, why and how will the organization in the past three fiscal years, has a deficit of Tshs 3,239,518
address this issue? and its contributions have
not been contracting in the
Provide the amount of total revenues/contributions and past three fiscal years.
total expenditures for the current and prior fiscal year.
Reporting and monitoring overall risk assessment: 2
8. Information Systems
8.1 Is the financial management system computerized? If so, The financial management 4 The Financial management system
does the IP have policies and procedures to maintain this system is computerized and of XYZ has been computerized.
system? properly maintained. They are using DacEasy Accounting
package. There is no policies and
procedures to maintain this system
8.2 Does the IP have policies and procedures to restrict access The IP has policies and 4 XYZ does not have policies and
to the computerized financial management system to procedures to restrict procedures to restrict access to the
appropriate personnel? If so, please describe them. accesses to the computerized DacEasy Accounting system
financial management system
to the appropriate personnel.
8.3 Can the computerized financial management system The computerized financial 4 DacEasy produces only the following
produce the necessary financial reports? management system can reports:
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HACT Framework

produce the necessary  Trial Balance

financial reports.  Activity Reports(Activity
Cashbooks, Activity
Expenses, and other activity
ledger)
However, the system cannot
produce
 Statement of income and
expenditure
 Statement of financial
position
 Statement of cash flows and
 Bank reconciliations
8.4 Are IP staff adequately trained to maintain the IP staff are adequately trained 3 All finance staffs were trained how to
computerized financial management system? to maintain the computerized use DacEasy for financial reporting.
financial management
system.
8.5 Does the IP have appropriate safeguards to ensure the The IP has appropriate 2 Back up is done daily for the
confidentiality, integrity and availability of the data? If so, safeguards to ensure the DacEasy accounting package.
please describe them. confidentiality, integrity and
availability of the data.
Information systems overall risk assessment: 3
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HACT Framework

9. Procurement
9a. General
9.1 Has the IP undertaken a procurement exercise with United The IP has undertaken a 1 All international procurement of
Nations / World Bank / European Union resources in the procurement exercise with Goods and services are done by
past? If so, please describe it. UN/WB/EU resources in the International Planned Parenthood
past. Federation (IPPF) on behalf of
XYZ.XYZ only bears the costs of
clearing those goods from the
Tanzania Port Authority. IPPF
usually sends the copy of invoices
used to purchase to XYZ for
reporting purpose.
9.2 Has the IP been audited by ECHO and selected as a The IP has been audited by 1 XYZ has never been audited by
Framework Partnership Agreement partner as per: ECHO and selected as a ECHO and selected as a Framework
http://ec.europa.eu/echo/files/partners/humanitarian_ai Framework Partnership Partnership Agreement Partner
d/fpa_partners.pdf Agreement partner.
9.3 Has the IP been audited by ECHO and selected as a The IP has been audited by 1 XYZ has never been audited by
Humanitarian Procurement Centre partner as per: ECHO and selected as a ECHO and selected as a
http://ec.europa.eu/echo/files/partners/humanitarian_ai Humanitarian Procurement Humanitarian Procurement Centre
d/HPC-register_en.pdf Centre partner. partner.
9b. Procurement principles, policies and procedures
9.4 Does the IP follow acceptable United Nations procurement The IP follows acceptable 1 XYZ has developed Procurement
principles? Do these principles promote broad United Nations procurement bent Policies and Procedures which
participation from potential bidders? If so, please describe principles. are also in line with United National
them. Procurement Principles.
9.5 Does the IP have written procurement policies and The IP has written 1 Yes,XYZ has developed
procedures? procurement policies and Procurement Policies and
procedures. Procedures manual
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HACT Framework

If yes, please provide a copy. If no, please attach an

outline of the tender procedures specifying the different
procurement procedures, related thresholds and
methodology for the assessment of tenders.
9.6 Does the IP have a specific code of procurement ethics? The IP has a specific code of 1 XYZ adopted and use the
procurement ethics. Procurement and Supplies
Please attach copy of the code. Professionals and Technicians
(PSPTB) Code of Ethics and
Conduct published on 6/11/2009 in
the government notice number 365.
9.7 Does the IP have a specific anti-fraud and corruption The IP has a specific anti- 4 No
policy? If so, please describe it. fraud and corruption policy.
9.8 Do the IP’s procurement rules and regulations contemplate The IP’s procurement rules 1 Yes, XYZ procurement and
a fair and impartial mechanism for revision of and regulations contemplate regulations contemplate the revision
procurement protests? a fair and impartial of procurement protest. Section
mechanism for revision of 4.4.19
procurement protests.
9.9 Does the IP frequently override purchasing procedures The IP does not frequently 1 XYZ does not override purchasing
without proper authorization? override the purchasing procedures without proper
procedures without proper authorization.
authorization.  For purchases worth up to Tshs
ten Million (10,000,000) the
requisition is authorized by
Director of Finance and
Administration (DFA).
 While for all purchases
exceeding Ten million
(10,000,000), the requisition is
authorized by all procurement
committee members.
 Procurement Committee is
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HACT Framework

made up of the following

members:
1. Human Resources Officer-Mrs.
Asha Othmani
2. Program Manager-Tausi
Hassani
3. Chief Accountant-Janeth
Magezi
4. Procurement Logistic
Officer(PLO)-Mr. Emmanuel
Bujiku(Secretary of the
committee)
9.10 Are exceptions to procedures documented and sent to Exceptions to procedures are 4 Exceptions to procurement
management for approval? Are the exceptions periodically documented and sent to procedures are not documented and
analysed and corrective actions taken? management for approval. sent to management for approval
Exceptions are periodically
analysed and corrective
actions are taken.
9c. Internal control system
9.11 Does the IP have a procurement committee for review and The IP has a procurement 1 Yes,XYZ has a Procurement
approval of contracts? If so, please specify composition of committee that reviews and Committee which has four members
committee. approves contracts. as follows:
1. Human Resources Officer-
Mrs. Asha Othmani
2. Program Manager-Tausi
Hassani
3. Chief Accountant-Janeth
Magezi
4. Procurement Logistic
Officer(PLO)-Mr. Emmanuel
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HACT Framework

Bujiku(Secretary of the
committee
9.12 Does the IP identify the requested authorizations for each The IP has defined 1 XYZ identifies the requested
value level of purchases? At what value does the IP require authorization guidance and authorizations for each value level of
written authorization of senior management for a purchase policies and procedures to purchases as follows:
(value in US dollars)? ensure they are properly  For purchases worth up to US
applied. Dollar 6057, the requisition is
authorized by Director of
Finance and Administration
(DFA).
 While for all purchases
exceeding US Dollar 6057, the
requisition is authorized by all
procurement committee
members with the support of
three quotations.
9.13 Does the IP use standard bidding documents and The IP utilizes standard 1 Yes, XYZ use standard bidding
contracts? bidding documents and documents and contracts. Samples
contracts. have been attached.
9.14 Do the procurement procedures and templates of contracts The procurement procedures 1 The procurement procedures and
integrate references to ethical procurement principles and and templates of contracts templates of contracts integrate
exclusion and ineligibility criteria? integrate references to ethical references to ethical procurement
procurement principles and principles and exclusion and
exclusion and ineligibility ineligibility criteria.
criteria. For example in the procurement
requisition form, the level of
authorization of the requisition has
been stated in the form.
Also in the Tender evaluation report,
the preamble states also the level of
authorization as per procurement
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HACT Framework

regulation in the manual.
9.15 Does the IP obtain sufficient approvals before signing a The IP obtains sufficient 1 Yes
contract, executing a purchase, or a payment? How many approvals before signing a
people give their approval before signing a contract or contract executing a purchase
executing a purchase or a payment? or a payment.
9.16 Does the IP rotate staff positions for internal control The IP has procedures to 3 XYZ has only one Procurement and
purposes? If yes, how often? rotate staff positions for Logistic Officer (PLO), hence
internal control purposes. rotation is impractical. To enhance
Internal control purpose there must
be at least two officer for rotation
purpose.
9.17 Does the IP have formal guidelines and procedures in The IP has formal guidelines 1 The procedure has been included in
place to assist in identifying, monitoring and dealing with and procedures in place to the procurement manual under
potential conflicts of interest with potential assist in identifying, section 4.4.2
suppliers/procurement agents? If so, how does the IP monitoring and dealing with No cases have been reported
proceed in cases of conflict of interest? potential conflict of interests involving conflict of interest.
with potential
suppliers/procurement agents.
9e. Procurement process
9.18 Does the IP have a well-defined process for sourcing/pre- The IP has a well-defined 1 XYZ have a well-defined process for
qualification of suppliers? Do formal procurement process for sourcing/pre- sourcing/pre-qualification of
methods include broadly broadcasting procurement qualifying suppliers. suppliers as stated in the
opportunities? Procurement manual
As stated in the manual,
Please attach methodology for the assessment of suppliers. For purchases exceeding US Dollar
6057, tender is advertised in the
newspapers and suppliers are
allowed to quote. Three quotations
are selected and then the requisition
is authorized by all procurement
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HACT Framework

committee members.
9.19 Does the IP undertake regular market surveys? If so, The IP undertakes regular 1 Yes
describe the process. market surveys.
9.20 Does the IP have a database of active suppliers? If so, The IP has a database of 4 Yes, it has been prepared in
please describe the process for maintaining this database. active suppliers. Microsoft excel.
9.21 Does the IP keep track of past performance of suppliers? The IP keeps track of past 4 No.
If so, describe the process. performance of suppliers.
9.22 Does the IP regularly check ‘market’ prices for goods and The IP regularly checks 2 Yes. Always the survey is done after
services purchased? If so, describe the frequency and ‘market’ prices of goods and every two months if the need arise
process. services purchased. or is expected to rise
9.23 Does the IP conduct public bid opening for formal The IP conducts public bid 1 Yes
procurement methods (invitation to bid and request for opening for formal
proposal)? What is the composition of public bid opening procurement methods.
committees?
9.24 Does the IP have a well-defined process in place to ensure The IP has a well-defined 1 Yes
a secure and transparent bid and evaluation process? If so, process in place to ensure a
describe the process. secure and transparent bid
and evaluation process.
9.25 Does the IP establish long-term agreements with suppliers The IP establishes long-term 1 No.Most of the contracts expire in a
based on a tender process? agreements with suppliers year.
based on a tender process.
9.26 Are long-term agreements reviewed/retendered? If so, Long-term agreements are 1 Not Applicable
how frequently? Please describe. reviewed and retendered.
9f. Awarding of contracts
9.27 When a formal invitation to bid has been issued, does the The IP awards procurement 1 Yes. Formal invitation is issued to
IP award the procurement contract to the qualified bidder contracts to qualified bidders the bidder with low cost. However
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HACT Framework

whose bid substantially conforms to requirements set forth whose bids substantially before the invitation is awarded to
in the solicitation documentation and offers the lowest conform to requirements set the qualified bidder, capacity
cost? forth in the solicitation assessment is done to evaluate the
documentation and offer the qualified bidder’s capacity to supply.
lowest cost.
9.28 When a formal request for proposal has been issued, does The IP awards procurement 1 Yes
the IP award the procurement contract to the qualified contracts to qualified
proposer whose proposal, all factors considered, is the proposers whose proposals,
most responsive to the requirements set forth in the all factors considered, are the
solicitation documentation? most responsive to the
requirements set forth in the
solicitation process.
9g. Reporting and monitoring
9.29 Are procurement reports prepared for the IP? If so, Procurement reports are 1 Yes. The following reports are
describe the preparation and frequency of these reports. prepared frequently for the prepared:
IP.  Annual procurement reports
 Period procurement project
reports
 Annual commodity reports
9h. Information system
9.30 Is the procurement system computerized? If so, is the The procurement system is 4 Procurement system is not
system adequately maintained? not computerized and computerized. The system is
adequately maintained. manually override
9.31 Can the procurement system produce the necessary The procurement system is 4 No
reports? capable of preparing the
necessary reports.
9i. Verification of procurement capacity
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HACT Framework

9.32 Is the IP’s procurement unit properly resourced in terms of The IP’s procurement unit is 3 Yes. The procurement unit has only
number of staff and their qualifications? properly resourced in terms one Officer. The need to recruit one
of number of staff and their more officer is inevitably required for
qualifications. control purpose as per the interview
with the current logistic officer.
9.33 Is the structure of the IP’s procurement unit clear, with The structure of the IP’s 1 Yes it is clear
defined reporting lines that foster efficiency and procurement unit is clear,
accountability? with defined reporting lines
that foster efficiency and
accountability.
9.34 Does the IP have a procurement strategy and appropriate The IP has a procurement 1 Yes, XYZ has procurement manual
tools and mechanisms to conduct procurement activities? strategy and appropriate tools which spells out the necessary
If so, please describe. and mechanisms to conduct procedures for procurement
procurement activities. operations.
9.35 Does the IP verify that established procedures for The IP verifies that 1 Yes
handling complaints are implemented? If so, please established procedures for
describe. handling complaints are
implemented.
9.36 Does the IP manage the procurement cycle following the The IP manages the 1 Yes
established policies and procedures? If so, how do they procurement cycle per
verify this? established policies and
procedures.
9.37 Does the IP consistently apply transparency and integrity The IP consistently applies 1 Yes, XYZ consistently apply
in the procurement process? transparency and integrity in transparency and integrity in the
the procurement process. procurement process as stipulated in
the procurement manual.
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HACT Framework

Procurement overall risk assessment: 2
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HACT Framework
APPENDIX I LIST OF BANK ACCOUNTS
100

XYZ Micro Assessment Report

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XYZ

Micro Assessment of Implementing Partners on

TABLE OF CONTENTS Page

Scope of the Assessment 4

Executive Summary 5-7

Results of the Assessment 12-33

Follow up on prior Assessment Reports/ Auditors Report 33-34

Appendix 1: List of bank accounts 100

IMPLEMENTING PARTNER INFORMATION

1.1 Implementing Partner

1.2 Key Persons Contacts Lulu Ng’wanakilala

The purposes of the micro-assessments of Implementing Partners are:

2.0 Scope of the Assessment

 Managing Programme risk: An assessment of the Implementing Partner's programme

 Managing financial risk: An assessment of the Implementing Partner's financial

3.0 Executive Summary

No Description Risk Rating

The micro-assessment was a combination of desk review of available information, assessment

 On the assessment of partner’s capacity in programme implementation, we performed the

 On the assessment of the partner’s capacity in project management (planning, monitoring

design basic management information systems

 On the assessment of the partner’s capacity in financial management, we performed the

o Assessed gaps in auditing policies and practices; internal/external audit process

Volunteerism XYZ considers the spirit of volunteerism to be central to achieving our

Innovation XYZ always work to find sustainable solutions in a changing environment

6.0 Results of the Assessment

6.1 Technical and Programme Implementation Capacity

6.1.1 AWP with budget

Risk assessment is Low

6.1.2 Status of Implementation of AWP activities

Risk assessment is Low

6.1.3 Progress reports

Risk assessment is Low

Grant Due dates for reports Conditions for approval Payment

6.1.4 Monitoring and Evaluation (M&E)

6.1.5 Implementation of recommendations recorded in field/project monitoring reports or

6.2 Governance, Legal Status and Organization Structure

Risk assessment is Moderate

6.3 Programme Management

Overall risk assessment for Programme Management is Low

6.3.1 Context of inputs and outputs

Risk assessment is Low

6.4 Financial Management Capacity

Risk assessment is Moderate

Risk assessment is Low

XYZ ORGANIZATION CHART

MEM CSM Area Managers PM

Clinic officers/ Project Officers Program Assistant

6.4.2 Funds Flow

Risk assessment is Low

Grant Management Schedule

Name of Account Bank Details Account Number Donor

Risk assessment is Moderate

6.4.4 Accounting Policies and Procedures

Risk assessment is Low

6.4.5 Internal Audit

Risk assessment is Significant

6.4.6 External Audit

Risk assessment is Moderate

6.4.7 Internal controls

Risk assessment is Low

6.4.8 Budgeting system

Risk assessment is Low

6.4.9 Reporting and Monitoring