Invitation to tender External Audit Services



Invitation to Tender

External Audit Services

Tender Reference JHI 11/02

18 April 2011

1. Introduction

The Macaulay Land Use Research Institute (MLURI) and SCRI formed a New Institute on 1 April 2011:The James Hutton Institute (JHI). The new institute will be one of the biggest research centres in the UK and the first of its type in Europe operating on sites in Aberdeen and Invergowrie, near Dundee. It is envisaged that operations will continue at all existing sites for the foreseeable future.

JHI requires comprehensive external audit services to be in place with effect from 1 April 2011 covering a three year term initially and invites suitably experienced firms to tender for the provision of these services to the Institute and its commercial subsidiaries, Macaulay Scientific Consulting Limited (MSC) and Mylnefield Research Services Limited (MRS), which were formed to exploit the commercial opportunities generated by the work of the former Institutes.

JHI is a company limited by guarantee, and is a registered charity. As a charitable company, the Institute is a not-for-profit organisation. The Institute is controlled by a Governing Board.

JHI adheres to the principles of Corporate Governance and has a separate Audit & Finance Committee to promote financial discipline and control.

Additional Information

The programme of research to be undertaken by JHI will be funded, in the main, by the Scottish Government Rural and Environment Research and Analysis Directorate (RERAD) together with grants and sponsorship from external sources.

The Institute is required to adhere to a large number of regulatory requirements and is potentially liable to audit by the Scottish Executive, Audit Scotland and European Union Court of Auditors.

The Institute status as a registered charity means that it does not suffer from any deduction due to corporation taxation. However as a private company, the commercial subsidiaries are liable where appropriate to corporation taxation charges.

The Institute and commercial subsidiaries form a VAT group and due to the nature of the Institute's research, supplies suffer from irrecoverable VAT. This VAT is treated as an expense and charged to the profit and loss account.

Financial Statements

Financial Statements for the year ended 31 March 2010 are provided for:

■ Macaulay Land Use Research Institute;

■ Macaulay Scientific Consulting Limited;

■ Scottish Crop Research Institute;

■ Mylnefield Research Services Limited;

2. Requirements

The external audit services required will include, but not be limited to:

• The planning, management and execution of the annual external audit for the JHI Group including subsidiary companies

• Reporting on external audit progress to Management and the Audit & Finance Committee, including attendance at Audit & Finance Committee meetings and Board meetings as appropriate

• Provision of advice to JHI Management and Audit & Finance Committee on technical accounting and financial matters including corporation tax matters

• Liaison and coordination with the internal auditors to ensure full exchange of information.

3. Proposed contract

The contract will be for an initial three year period commencing on 1 April 2011 and will be subject to annual appointment by the Governing Board.

4. Tender Requirement

Tenders should include the following information:

• The fee for the first year of the contract period specifying what is included in the charges. The fee should cover the audit of all companies within the JHI Group and the provision of taxation services to the commercial subsidiaries including the filing of corporation tax returns. Preparation of the final accounts is not required. This will be carried out by JHI. Costs should be provided on a per hour basis for any additional advice or services that may be required from time to time (eg VAT advice, assistance with accounting for company restructuring);

• An indication of the level of fees that would be charged in the subsequent periods of the contract;

• A schedule of hourly rates for each level of fee earning staff;

• CVs of senior staff such as the Audit Partner and Manager and supporting personnel who would conduct the external audit including the location of staff;

• An explanation of the external audit approach that would be used including the firm’s policy in relation to maintenance of continuity of staff involved in the audit. Details of relevant experience within the sector and the business activities and issues addressed;

• Details of the areas of technical expertise within the firm that can be called on to support the audit team and to provide advice to the Board and management of JHI as required.

• Details of references that might be used by the Institute and the commercial subsidiaries;

• Details of any relevant services that may be appropriate to the needs of the Institute and the commercial subsidiaries;

Shortlisted firms will be invited to deliver a presentation to members of the Audit & Finance Committee and representatives from Senior Management on 16 May 2011.

5. Contact details

For further information or clarification please contact Karen Shaw, preferably by email in the first instance at:-

karen.shaw@scri.ac.uk

6. Deadline

The deadline for responses to this tender is 5pm on Friday 29 April 2011. The Tender Reference should be clearly identifiable on all correspondence (including envelopes and Emails) to ensrue that no tenders are opened prior to the deadline and should be sent to:

| | |

|Electronic responses |Address for hard copy |

| | |

|Karen Shaw (karen.shaw@hutton.ac.uk) |The James Hutton Institute |

|Caz Smith (caz.smith@hutton.ac.uk) |FAO Karen Shaw |

|Nigel Kerby (nigel.kerby@hutton.ac.uk) |Errol Road |

|Carla Kydd (carla.kydd@hutton.ac.uk) |Invergowrie |

| |Dundee DD2 5DH |

7. Assessment of Tenders

Tenders will be assessed on the following criteria:

• Experience of providing comprehensive external audit services to the not-for-profit sector and demonstrable technical expertise in accounting for charities, commercial companies and groups.

• Experience of advising science research organisations and charitable bodies with similar needs within the last three years and evidence of understanding the challenges and constraints within the sector

• The quality and experience of the proposed external audit team

• The suitability of the audit approach

• The ability to provide the full range of services required including audit, taxation and specialist technical accounting advice.

• The ability to provide local support to the main Aberdeen and Invergowrie sites

• The firm’s approach to customer service, quality assurance and environmental considerations.

• Value for money, particularly the added value that the audit process will bring to the organisation.

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