Selecting a USAID Auditor: Criteria and Timelines

Published on 29th January 2020

If you implement projects with U.S government funds, you will soon find yourself approaching your first project audit and looking to appoint an auditor. This article will show you the key factors to consider when evaluating a proposal from a prospective auditor and the timelines involved in the procurement process in order to give you a head start with planning. Selecting Your Auditor Since It is likely that the total cost for your annual audit (assuming multiyear funding) will be in the thousands, it is recommended that a formal procurement process such as a tender is run in order to select an auditor.

You will need to read the relevant 2 CFR 200 guideline to assess if you need to have an audit in the first place. Remember that when procuring audit services, the objective is to obtain high-quality audits. In requesting proposals for audit services, the objectives and scope of the audit must be made clear and the non-Federal entity must request a copy of the audit organization’s peer review report which the auditor is required to provide under Generally Accepted Government Auditing Standards GAGAS

When you have received responses to your tender, you should consider the factors below as part of the evaluation process;

1. Does the audit firm have the ability to produce reports in English?

2. Does the audit firm have sufficient quality control program in place that meets the GAGAS quality control and external peer review standards?

3. Does the audit firm have a passing quality control review within three years?

4. Is the audit firm a good standing member of the American Institute of Certified Public Accountants AICPA or the country’s public accounting organization (PAO), which complies with the statements of membership obligations of IFAC, or another internationally recognized standard setting body?

5. Has the audit firm been in operation at least three years, or its partners have previous acceptable experience with USAID-funded audits?

6. Does the audit firm require continuing professional education (CPE) meeting GAGAS for audit partners and audit staff?

7. Do the audit firms senior staff have a Chartered Accountants or Certified Public Accountant designation?

8. Other possible considerations:

a. Affiliation with international audit firm.

b. Continuing Professional Education Program, differing from GAGAS.

c. Recent experience with USAID audits.

9. Total audit Fee

You should give the auditor access to personnel, accounts, books, records, supporting documentation, and other information as needed for the auditor to perform the audit, and in some cases to estimate the audit fee.

It is crucial to note that the procurement and contracting process can take a significant number of time, especially if you are appointing a U.S auditor for the first time. The whole process can take up to 3 months or longer as shown in the draft hypothetical timeline



At FINDEV Consulting Ltd, we offer detailed internal audit reviews that can help to put you in good stead for any upcoming donor audit. Our experienced accountants have the expertise and experience to ensure that audits are as effective as they need to be.