Annex 4
Binding Terms of Reference for placing a contract with an
auditor/auditing firm
Pursuant to the parameters specified in Section 267 of the German Commercial Code
(Handelsgesetzbuch – HGB), an audit must be carried out by one of the following:
1.

auditor,

sworn accountant or

tax accountant (for companies not obliged to carry out an audit).
Use of PPP funds in accordance with the price schedule included in the
Contract (Annex 2 to the Contract)
The audit shall include verification of the arithmetical correctness of the statement of
accounts and reconciliation of the amounts invoiced with those of the accounting department
and original vouchers.
Allocation of costs in accordance with the Contract to the items agreed on in the price
schedule is to be verified, taking account of Section 10.3 of the General Terms of Contract
for PPP Projects. Any discrepancies are to be listed separately.
Any revenue obtained is to be reported separately in the statement of accounts, and its
completeness verified (e.g. allocation to the special project account and, where applicable, a
cut-off audit).
Moreover, in addition to an audit of individual cases (random samples of the original
vouchers), a plausibility check of the invoiced costs is to be conducted. In this context, in
addition to the principles laid down in Section 11 of the General Terms of Contract for PPP
Projects in particular, the following points shall also be examined:
- The transfer charges for cross-border payments shall be met by the PRIVATE
ENTERPRISE,
- Entertainment costs shall be met by the PRIVATE ENTERPRISE,
- The statutory turnover tax must be shown separately on the invoice.
2. Settlement of the PRIVATE ENTERPRISE's prime costs in accordance with the
Contract
All the prime costs invoiced for the PRIVATE ENTERPRISE’S own employees are to be
audited in line with the specifications made in Section 11.3 of the General Terms of Contract
for PPP Projects, and any discrepancies explained.
Evidence of the number of days invoiced for (specification of inputs and costs) is to be
provided in the form of time sheets and air tickets, hotel bills etc. (original vouchers).
In addition to an audit of individual cases, the audit shall include a plausibility check and
explanation of the prime costs invoiced for supplied plant/software etc. pursuant to
Section 11.6 of the General Terms of Contract for PPP Projects.
3. Issuing of an auditor's report
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A brief written explanation is to be provided of the details of the auditing steps carried out
and the results of the audit in line with the specimen shown below.
Notes for the PRIVATE ENTERPRISE:
GIZ reserves the right to request additional explanations on the auditor's report (cf. also
GIZ's auditing rights as specified in Section 8.4 of the PPP Contract). In particular, GIZ shall
also be entitled to inspect documents to audit the prime costs invoiced.
In addition, in the context of accepting the costs, GIZ reserves the right to examine the
amounts invoiced by the auditor and to inspect the auditor’s files. An agreement to this
effect is to be made with the auditor.
OE 5031 December 2008
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The following text is binding for the auditor
I. Audit order
Name of the PRIVATE ENTERPRISE:
Country:
Project title:
Contract no.:
Duration of the Contract:
Audited Period:
II. Nature and scope of the audit
As specified in the order, we have audited the use of PPP funds in accordance
with the Contract and settlement of the project costs in accordance with the
Contract with due regard to the following documents for the auditing period
(please insert):
- PPP Contract and any supplements to the Contract
- Terms of Reference/Status Report
- Price schedule with explanatory notes
- GIZ’s General Terms of Contract for PPP Projects dated August 2004
- Terms of Reference for auditors
- Information Sheet pertaining to the BMZ Guidelines dated 1 January 2003 for the Training
of Professionals and Executives from Cooperation Countries
The documents were examined at the PRIVATE ENTERPRISE/our premises.
The audit covered the following documents submitted by the PRIVATE ENTERPRISE:
Please specify any additional documents
- Time sheets
- Wage and salary accounts
- Travel expense statements
- Calculation of prime costs for equipment produced by the PRIVATE ENTERPRISE itself
etc.
The audit was carried out without any omissions on all wage and salary accounts, time
sheets and the prime costs for equipment produced by the PRIVATE ENTERPRISE itself
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and by random sampling of all other costs by inspecting vouchers and/or other accounting
documents.
In addition, the following other documents (please give examples) connected with the
settlement of accounts were submitted. We have reconciled these documents with the
statements of accounts found and verified that the amounts were properly entered in the
accounts.
Total costs incurred and confirmed during this accounting period
in euros ……………………………….. (in words: ……………………)
III.
Audit findings/Overall statement
1. Allocation of costs in accordance with the Contract in line with the individual items and
bases for settlement specified in the price schedule (Annex 2 to the Contract), including
compliance with the 10% rule (excess/shortfall per cost item)
Objections/Recommendations:
2. Arithmetical correctness of the statement of accounts and reconciliation of the
amounts invoiced with those of the accounting department and original vouchers
Objections/Recommendations:
3. Proper and correct keeping of project accounts in compliance with generally accepted
accounting principles
Objections/Recommendations:
4. Confirmation that the prime costs invoiced for the PRIVATE ENTERPRISE’s own
employees and equipment produced by the PRIVATE ENTERPRISE itself were
calculated in accordance with the General Terms of Contract for PPP Projects.
Objections/Recommendations:
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5. Correctness of the order placement procedure for goods and services within the scope
of the PPP Contract
Objections/Recommendations:
6. Differences from previous statements of account
Objections/Recommendations:
7. Confirmation that there has been no duplicate financing
Objections/Recommendations:
8. Confirmation that revenue/income obtained was credited to the project account and
reduces the overall costs
Objections/Recommendations:
9. Application of GIZ’s exchange-rate list
Objections/Recommendations:
10. Confirmation that transfer charges for cross-border payments and entertainment
costs were not invoiced
Objections/Recommendations:
11. Confirmation that the turnover tax was shown separately on the invoice and paid to
the tax office.
Objections/Recommendations:
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12. Other observations
Comments/Other objections:
On the basis of our audit, we can make the following overall statement (please choose
an alternative and delete the others):
Our audit of the documents did not give rise to any objections/gave rise to the following
objections.
In our opinion, the accounting procedures comply with GIZ’s rules and guidelines and the
statements of accounts were drawn up properly.
or
In our opinion, despite the objections we have established, the accounting procedures
comply with GIZ’s rules and guidelines and the statements of accounts were drawn up
properly.
or
In our opinion, due to the objections we have established, the accounting procedures do not
comply with GIZ’s rules and guidelines and the statements of accounts were not drawn up
properly.
or
We were unable to complete our audit, as the following documents were not submitted.
Although the documents submitted did not give rise to any objections, we are issuing the
auditor’s report with the following reservations. (Description of the documents audited/not
submitted)
................................................................ ...........................................................
Place, date
Auditor’s stamp and signature
Declaration of completeness by the PRIVATE ENTERPRISE
We hereby confirm that we have submitted all documents and contracts to the company
(auditor/tax accountant) charged with carrying out the audit to check the correctness of the
settlement of accounts.
................................................................ ...........................................................
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Place, date
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PRIVATE ENTERPRISE’s stamp and
signature
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