Terms of Reference
Statutory Audit and Related Compliance Support for ChildFund International USA – India Branch for FY 2025–26
|
Entity
|
ChildFund International USA – India Branch
|
|
Financial Year
|
2025–26, year ending 31 March 2026
|
|
Registered Office
|
22, Museum Road, Bangalore 560001, Karnataka, India
|
|
Annual Operational Budget
|
Approximately INR 4.00 crore, limited to Branch operational budget
|
|
Scope Type
|
Statutory audit and related statutory compliance support
|
1. Background
ChildFund is a non-sectarian, non-profit and non-political International Non-Governmental Organization founded in 1938. It exists to help deprived, excluded, and vulnerable children build the capacity to improve their lives and create opportunities to become young adults, parents, and leaders who bring lasting and positive change in their communities.
ChildFund has been working in India since 1951 as a Foreign Company registered under the Companies Act, 1956/2013. The registered office of the company is based at 22, Museum Road, Bangalore 560001, Karnataka, India.
The annual operational budget for ChildFund International USA – India Branch for FY 2025–26 is approximately INR 4.00 crore. This represents only the Branch operational budget.
As part of statutory requirements under Income Tax, FCRA/FC return, and ROC compliances, the annual financial statements are required to be audited. ChildFund International USA – India Branch invites eligible audit firms to submit a proposal for the statutory audit and related compliance support for FY 2025–26, for the year ended 31 March 2026.
2. Objective
The overall objectives of the audit are to:
- Perform the audit in accordance with applicable accounting and auditing standards, covering financial controls, safeguarding of assets, compliance with ChildFund policies and procedures, and compliance with applicable national laws and regulations.
- Review administrative and internal controls relevant to accounting, reporting, and statutory compliance, and assess whether appropriate controls are in place and functioning effectively.
- Review financial records and documents maintained by the organization at its Country Office.
- Review compliance with applicable accounting principles, practices, and accounting standards issued by the Institute of Chartered Accountants of India, and other applicable reporting requirements.
- Review relevant records and documents required to fulfil statutory compliances with concerned departments, including Income Tax, FCRA and other applicable authorities.
- Express an independent audit opinion on the financial statements of the organization in accordance with applicable statutory requirements.
3. Audit Scope
The statutory audit will cover the books of accounts, financial statements, statutory records, and applicable compliance requirements of ChildFund International USA – India Branch for FY 2025–26.
The auditor shall review financial controls, safeguarding of assets, accounting records, statutory compliances, internal approvals, and adherence to applicable laws, regulations, and organizational policies.
The scope shall include audit of the financial statements and responsibility for preparation and filing/supporting filing of applicable statutory returns, including Income Tax Return, FC-4 and other applicable statutory compliances, wherever relevant for the Branch.
- Fund requisitions, disbursements, and accounting of operational funds, wherever applicable.
- Disbursement of funds to vendors and other concerned parties, wherever applicable.
- Organizational expenses and approvals as per applicable policies, delegation of authority, and statutory requirements.
- Overall accounting, reporting, reconciliations, and financial statement preparation.
- Financial statements, including Balance Sheet, Trial Balance, Income & Expenditure Account, Receipts & Payments Account, and relevant schedules, as required under Income Tax, FCRA/FC return.
4. Methodology, Deliverables and Timetable
4.1 Methodology
The audit will be conducted as an annual audit of financial statements. The auditor will provide a professional opinion on whether the financial statements present a true and fair view in accordance with applicable statutory requirements and accounting standards.
4.2 Deliverables
The following deliverables shall be included under the engagement:
- Audited financial statements for FY 2025–26, including Balance Sheet, Income & Expenditure Account, Receipts & Payments Account, Trial Balance, and relevant schedules.
- Statutory audit report in accordance with applicable laws and standards.
- Preparation and filing/supporting filing of applicable statutory returns, including Income Tax Return, FC-4 and other applicable statutory compliances, wherever relevant for the Branch.
- Management letter covering audit observations, internal control matters, statutory compliance issues, and recommendations.
- Audit checklist and other supporting documents as may be required by management.
- Professional guidance on matters arising directly from the statutory audit and related compliance review.
4.3 Access to Documents
The statutory auditor will be given access to all records, reports, and documents required during the audit to arrive at the audit opinion. These may include:
- Accounting books and records.
- Applicable agreements, contracts, approvals, and internal guidelines.
- Previous statutory returns, financial statements, and reports submitted to concerned authorities.
- Documents submitted to concerned departments, including Income Tax records, TDS challans and returns, Income Tax Return, FCRA/FC return and other relevant filings.
- Any other relevant documents and records applicable and necessary during the course of the audit.
4.4 Management Letter
The auditor shall prepare a management letter upon completion of the annual audit, covering comments and observations on accounting records, internal controls, statutory compliance, systems, and process improvements identified during the audit.
4.5 Findings Requiring Immediate Attention
During the course of the audit, the auditor may identify significant issues or situations requiring immediate disclosure and action. These may include fraud or illegal acts, misappropriation or misdirection of funds, audit scope limitations, unusual transactions, conflict of interest, and non-compliance with legal or statutory requirements.
Before finalizing the audit report or management letter, the auditor shall discuss significant findings with the designated Finance Lead and relevant management representatives. Final signed reports shall be submitted in soft copy and in three hard copies, wherever required.
4.6 Timeline
The draft audited financial statements, statutory audit report, management letter, and applicable statutory return workings shall be submitted on or before 30 June 2026.
Final signed reports and statutory filings shall be completed within the agreed statutory timelines and/or within 7 working days from receipt of management comments, whichever is earlier and applicable.
5. Proposal Submission Requirements
The audit firm is requested to submit a technical and financial proposal including the following:
- Firm profile, including experience in statutory audit of foreign companies, NGOs, FCRA-regulated entities, and not-for-profit organizations.
- Details of the engagement partner and key audit team members.
- Proposed audit approach, work plan, and timeline.
- Confirmation of responsibility for statutory audit, Income Tax Return, FC-4 and other applicable statutory compliances.
- Audit fee quote with professional fee and applicable taxes shown separately.
- ICAI firm registration details, peer review certificate, PAN, GST registration, and other relevant statutory details.
- Conflict of Interest declaration.
- Confirmation that the firm and proposed audit team have no personal, professional, or financial conflict of interest with ChildFund International USA – India Branch.
- List of similar assignments handled in the last three years.
- Any assumptions, exclusions, or dependencies considered while quoting the fee.
6. Other Documents
6.1 Certification of Professional Standing
Documentation certifying the professional standing of the selected auditor must be obtained and reviewed every year prior to the engagement. Auditors must be accounting professionals who meet national and/or local government standards and possess the necessary educational background and professional certification or registration, such as Chartered Accountant or equivalent, to assure acceptance of the audit by any legal, governmental, or professional body.
6.2 Conflict of Interest Statement
The audit firm shall submit a declaration confirming that there are no conflicting business or personal relationships between ChildFund International USA – India Branch and the independent audit firm. The conflict-of-interest statement should also confirm that the audit team assigned to the engagement has no personal, professional, or business conflict of interest.
7. Sources of Information
The ChildFund Country Office at Bangalore will provide the auditor with all information required for conducting the audit.
Appendix I: Scope of Statutory Audit and Related Compliance Support
- Audit of financial statements, including Balance Sheet, Income & Expenditure Account, Receipts & Payments Account, Trial Balance, and schedules.
- Statutory audit report for FY 2025–26.
- Preparation and filing/supporting filing of Income Tax Return, FC-4, ROC-related filings, and other applicable statutory compliances, wherever relevant.
- Review of accounting records, statutory records, internal approvals, reconciliations, and supporting documents.
- Management letter highlighting audit observations, control gaps, compliance matters, and recommendations.
- Professional guidance limited to matters arising directly from the statutory audit and related compliance review.