TEREPEZA DEVELOPMENT ASSOCATION (TDA)
COMMUNITY SELF HELP FOR ECONOMIC EMPOWERMENT, FOOD SECURITY
AND CLIMATE CHANGE, PROJECT ETH-110
NOTES TO THE ACCOUNTS
FOR THE PERIOD COVERED FROM 01/09/2021 TO 01/08/2022
1. Introduction
Solomon Demena Certified Audit Firm, was appointed to perform a financial and
compliance audit of Consortium Of Self –Help Group Approach Promoters (TDA)
Community Self Help For Economic Empowerment, Food Security And Climate Change,
Project Eth-110 Financed By Tear Fund Ireland for the for the period covered ended
01/09/2021 to 31/08/2022.We carried out an audit of the transactions pertaining to the
program for the period covered 01/09/2021 to 31/08/2022 in terms and the scope of work
identified in the terms of reference issued by the client, as well as the conditions set out in
the audit engagement letter signed between us and the client.
1.1. Back Ground of the Organization
Terepeza Development Association was established in 1994 at SNNPRS regional level as
a local and nonprofit organization. TDA registered as a local Civil Society Organization
under registration number 621 by EDRE Agency for Civil Societies Organization
according to proclamation number 1113/2011. The organization main objective is to
ensure the holistic needs of the poor, orphans and vulnerable and marginalized
community members of Ethiopia are met through integrated development activitie.
1.2.Project Objective
The objective of the project is to building the capacity of various community self-help
group for economic empowerment, food security and climate change resilience in Soddo,
Boditti, Areka and Gununo town administrations and Damot Sore and Boloso Sore
districts of Wolaita Zone in SNNPR, Ethiopia. It has focused more on building the
capacity of various community groups in particular the vulnerable sections like women,
smallholders, people with disabilities and other resource poor farmers and households
both in rural and urban settings.
The project aims to design a systemic network from Self Help Groups (SHG) to CLA and
other line of stakeholders at government office level to clearly teach and cascade the SIIG approach to the poor to re-explore their own underutilized resources to attain
sustainable development through inclusive economic growth and building stronger
resilience to vulnerable households and communities in the mentioned areas.
6
The highlights the following as key out comes:
Empower vulnerable households to build resilient livelihoods and stronger
household economies that are sustainable;

Engage civil society organizations (CSO: SHGs, CLAs, FLAs, NGOs,
churches) in dialogues or lobbying

for their rights and the rights of the poor and vulnerable;

Engage local churches more in pro-poor development to reach out to most
vulnerable people

1.3.
(Women, men, girls, boys and PWDs) by mobilizing own resources.
Audit objective
The overall objective of the audit was to:

Express opinion on whether the expenditure of the projects present fairly the
expenditure incurred by Terepeza Development Association (TDA) -Self Help
For Economic Empowerment, Food Security And Climate Change, Project Eth110) for the period covered from 01/09/2021 to 31/08/2022, in accordance with
the clients accounting policies and the expenditures incurred were (i) in
conformity with the approved project budget (ii) for the approved purposes of
the project (iii) in compliance with the relevant regulations and rules, policies
and procedures of the Government or the Donor
if required by project
document to complied with the Donor policies and procedures.(iv) Supported by
properly approved vouchers and other supporting documents:

Express an opinion on the value and existence of the Terepeza Development
Association (TDA) Self Help For Economic Empowerment, Food Security And
Climate Change, Project Eth-110) assets as at 31 August, 2022.

Express an opinion on the value and existence of the cash held by Terepeza
Development Association (TDA) Self Help For Economic Empowerment,
Food Security And Climate Change, Project Eth-110) as at 31 August,
2022.internal controls systems with emphasis on:
o The effectiveness of the system in providing the project management
with useful information for the proper management of the Organization.
7
o The general effectiveness of the internal control system in protecting the
assets and resources of the Organization.
The Audit was carried out in accordance with the Generally Accepted Accounting
Practice and project agreement.
2.
Audit Scope
The Scope of the audit covered the overall management of the projects of the
Organization, implementation, monitoring and supervision. The audit work included the
review of work plans, progress reports, project resources, project budgets, project
expenditure, project delivery, recruitment and disposal or transfer of assets as applicable.
To this effect, the scope of the audit covered the following areas:
a. Human Resource
The audit work covered the competitiveness, transparency and effectiveness of the
recruitment and hiring of personnel and includes performance appraisal, attendance
control, computation of salaries and entitlements, payroll preparation and payment
and management of personnel records
b. Finance
The audit work covered the adequacy of the accounting and financial operations
and reporting systems. These include budget control, cash management,
certification and approval authority, receipt of funds, disbursement of funds and
recording financial transactions in expense reports, records maintenance and
control.
c. Procurement
The audit work covered the competitiveness, transparency and effectiveness of the
procurement activities of the organization in order to ensure that the equipment and
services purchased meet the requirement of either the government or the client.
The audit work in this area also covered the use of consulting firms and the
adequacy of procedures to obtain fully qualified and experienced personnel and
assessment of their work before final payment is made.
8
d. Asset Management
The audit work covered status of equipment (office equipment) purchased for use of
the project and reviewed the procedure for receipt, storage and disposal.
e. Cash Management
The audit work covered all cash funds, on hand and in bank, held by the
organization and reviewed procedures for the management and safeguarding of
cash.
f. General Administration
The audit work covered travel activities, vehicle management, office premises and
office communications and IT system and record keeping.
g. Information System
The audit work covered the information and communication systems and the
control on and security of equipment and data.
h.
The above scope covered those transactions performed at the level of the
organization.
2.1. Summary of significant Accounting Policies
The principal accounting policies adopted by the organization are stated below:
2.2. Accounting Convention
TDA adopted Modified cash basis of accounting and accordingly, income is
recognized when received and expense is recognized when it is paid.
2.3. Donation in kind
Donation in kind if any, are included in these expenditure statements based on the
values received from the donors or at the market prices prevailing on the date of the
transactions.
2.4. Recognition of Income and expenses
Donation fund recognized as cash received from donors immediately and expenses
were expensed when cash paid.
9
2.5. Receivables
Receivables are recognized and carried at original invoice amount.
2.6. Cash and Cash Equivalents
Cash in hand and at banks in current and deposit accounts are carried at cost
Cash and cash equivalent are defined as cash in hand, cash at bank in current and
deposit accounts and short term finance readily convertible to known amount of cash
and subject to insignificant risk of changes in value.
For the purpose of cash flow statements, cash and cash equivalents consists of cash in
hand and at banks net of overdraft finance if any.
2.7. Payables
Liabilities are carried at cost which is the fair value of the consideration to be paid in
the future for goods and services received whether or not billed to the organization.
2.8. Foreign Currency Transactions
The functional currency of the organization is Ethiopian Birr and the accounts are
maintained in local currency Birr.
Transaction which are denominated in foreign currency are converted in to local
currency at the exchange rates prevailing in the month of the transactions using the
first-in-first-out method and foreign exchange gains of losses are taken to income and
expenditure account.
2.9.
Funds Received
The amount of Euro 180,627.23 was disbursed from Tear Fund Ireland. The
Disbursement was to cover Expenditure incurred under community Self Help for
Economic Empowerment, food security and climate change Resilience project, ETH 110. The total amount recorded tallied with the conformation received from donor.
Ethiopia
1st Installment
2nd Instilment
3rd Instilment
4th Instilment
1,173,873.42
3,078,524.37
3,302,778.35
2,344,916.90
9,900,093.04
Total
10
Exchange
Rate
53.6633
55.1696
56.5728
52.6116
Euro
21,874.79
55,801.10
58,381.00
44,570.34
180,627.23