AUDITOR GENERAL'S REPORT On the Financial Statement Audit of the Liberia Social Safety Net Project (LSSNP) (IDA 57910 &TFA6428 &TFB4346) For the fiscal period ended June 30, 2021 December 2021 P. Garswa Jackson Sr. ACCA, CFIP, CFC Auditor General, R. L. Auditor General’s Report on the Financial Statement Audit of the Liberia Social Safety Net Project (LSSNP) for the Fiscal period ended June 30, 2021 Table of Contents Opinion ................................................................................................................................... 3 Basis for Opinion ...................................................................................................................... 3 Management’s Responsibility..................................................................................................... 3 Auditor’s Responsibility ............................................................................................................. 4 FINANCIAL STATEMENTS ......................................................................................................... 5 Statement of Receipts and Payments ......................................................................................... 5 Statement of Comparison of Budget and Actual Amounts ............................................................ 6 Statement of Fund Balance and Cash Status............................................................................... 7 Statement of Financial Position.................................................................................................. 8 NOTES TO FINANCIAL STATEMENTS ......................................................................................... 9 1 Promoting Accountability of Public Resources Auditor General’s Report on the Financial Statement Audit of the Liberia Social Safety Net Project (LSSNP) for the Fiscal period ended June 30, 2021 ACRONYMS USED Acronyms/Abbreviations/Symbol Meaning AFP Audit Focal Person AG Auditor General CGMA Certified Global Management Accountant CFC Certified Financial Consultant CFE Certified Fraud Examiner CFIP Certified Forensic Investigative Professional CFC Certified Financial Consultant CPA Certified Public Accountant DMA Deputy Minister for Administration F/S Financial Statements GoL Government of Liberia INTOSAI International Organization of Supreme Audit Institutions IPSAS International Public Sector Accounting Standards ISSAI International Standards of Supreme Audit Institutions LSSNP Liberia Social Safety Net Project MGCSP Ministry of Gender, Children and Social Protection No. Number PCO Project Coordination Office PFM Public Financial Management PIM Project Implementation Manual POM Project Operational Manual PPC Public Procurement & Concessions QPR Quarterly Progress Report SOE Statement of Expenditures ToR Term of Reference USD/US$ United States Dollars 2 Promoting Accountability of Public Resources Auditor General’s Report on the Financial Statement Audit of the Liberia Social Safety Net Project (LSSNP) for the Fiscal period ended June 30, 2021 Hon. Piso Saydee Tarr Minister Ministry of Gender, Children and Social Protection Republic of Liberia December 31, 2021 Dear Hon. Tarr: RE: AUDITOR GENERAL’S REPORT ON THE FINANCAL STATEMENT AUDIT OF THE LIBERIA SOCIAL SAFETY NET PROJECT (LSSNP) Opinion We have audited the accompanying financial statements of the Liberia Social Safety Net Project (LSSNP) as at June 30, 2021 financed by (IDA 57910 &TFA6428) which comprises the Statement of Receipts and Payments, Statement of Comparison of Budget and Actual Amounts and a summary of other accounting policies and explanatory notes. In our opinion, the accompanying financial statements (IDA 57910 &TFA6428) present fairly, in all material respects, the Statement of Receipts and Payments as at June 30, 2021, Statement of Comparison of Budget and Actual Amounts and a summary of other accounting policies and other explanatory notes for the fiscal period then ended in accordance with International Public Sector Accounting Standards (IPSAS) Cash Basis of Accounting. Basis for Opinion We conducted our audit in accordance with International Standards of Supreme Audit Institutions (ISSAIs). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements Section of our report. We are independent of the entity in accordance with the Code of Ethics for Supreme Audit Institutions together with the ethical requirements that are relevant to our audit of the financial statements in accordance with the World Bank guideline and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Management’s Responsibility Management is responsible for the preparation and fair presentation of the financial statements in accordance with IPSAS Cash Basis, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is responsible for assessing its ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to cease operations, or has no realistic alternative but to do so. The LSSNP Management is responsible for overseeing the Project’s financial reporting process. 3 Promoting Accountability of Public Resources Auditor General’s Report on the Financial Statement Audit of the Liberia Social Safety Net Project (LSSNP) for the Fiscal period ended June 30, 2021 Auditor’s Responsibility Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISSAIs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements Monrovia, Liberia December 2021 4 Promoting Accountability of Public Resources Auditor General’s Report on the Financial Statement Audit of the Liberia Social Safety Net Project (LSSNP) for the Fiscal period ended June 30, 2021 FINANCIAL STATEMENTS GRANT NO: IDA 57910 &TFA6428 Liberia Social Safety Net Project (LSSNP) Project Financial Management Unit (PFMU) Statement of Receipts and Payments For the Fiscal Period Ended June 30, 2021 FY 2020/2021 FY 2019/2020 Note US$ US$ Receipt IDA Grant 4 6,706,652 1,916,494 Total Receipt 6,706,652 1,916,494 Payment Strengthening the national social safety net delivery system 5 873,957 633,049 Cash transfer to extremely poor and food insecure 6 843,062 586,585 households 7 Project Management and Administration 601,047 708,575 Total Payments 2,318,066 1,928,209 Excess of Receipts over payments/(Payments over Receipts) 4,388,586 (11,715) Fund Balance at the beginning of the year 1,112,234 1,123,949 Cumulative fund balance at the end of the year 5,500,820 1,112,234 The notes on pages 9 to 13 are integral part of these project financial reports 5 Promoting Accountability of Public Resources Auditor General’s Report on the Financial Statement Audit of the Liberia Social Safety Net Project (LSSNP) for the Fiscal period ended June 30, 2021 GRANT NO: IDA 57910 &TFA6428 Liberia Social Safety Net Project (LSSNP Project Financial Management Unit (PFMU) Statement of Comparison of Budget and Actual Amounts For the Fiscal Year Ended June 30, 2021 Project Annual Actual Variance Percentage Allocation Budget Expenditu Variance re US$ US$ US$ US$ (%) Activities with in components Strengthening the National Social Safety 6,000,000 3,456,887 873,957 2,582,930 Net Delivery System 74.72 Cash transfer to extremely poor and food insecure Households 10,800,000 5,775,800 843,062 4,932,738 85.40 Project Management and 816,353 Administration 2,100,000 1,417,400 601,047 57.60 Total 18,900,000 10,650,087 2,318,066 8,332,021 78.23 The notes on pages 9 to 13 are integral part of these project financial reports 6 Promoting Accountability of Public Resources Auditor General’s Report on the Financial Statement Audit of the Liberia Social Safety Net Project (LSSNP) for the Fiscal period ended June 30, 2021 GRANT NO: IDA 57910 &TFA6428 Liberia Social Safety Net Project (LSSNP Project Financial Management Unit (PFMU) Statement of Fund Balance and Cash Status For the Fiscal Year Ended June 30, 2021 FY 2020/2021 FY 2019/2020 US$ US$ A. FUND BALANCE Balance as at the beginning of the year 1,112,234 1,123,949 Add: Total Receipts during the period 6,706,652 1,916,494 Total fund available for operations 7,818,886 3,040,443 Less: Total payments during the period 2,318,066 1,928,209 Balance as at June 30, 2020 5,500,820 1,112,234 B. CASH STATUS Cash on hand - - Cash in bank 5,500,820 1,112,234 Total cash on hand and in bank 5,500,820 1,112,234 Different between A and B - - - The notes on pages 9 to 13 are integral part of these project financial reports 7 Promoting Accountability of Public Resources Auditor General’s Report on the Financial Statement Audit of the Liberia Social Safety Net Project (LSSNP) for the Fiscal period ended June 30, 2021 GRANT NO: IDA 57910 &TFA6428 Liberia Social Safety Net Project (LSSNP Project Financial Management Unit (PFMU) Statement of Financial Position For the Fiscal Year Ended June 30, 2021 FY FY 2020/2021 2019/2020 US$ US$ Assets: Cash and cash equivalent 5,500,820 1,112,234 Total Assets 5,500,820 1,112,234 Fund Balance Grants 5,500,820 1,112,234 Accumulated Fund Balance 5,500,820 1,112,234 The notes on pages 9 to 13 are integral part of these project financial reports 8 Promoting Accountability of Public Resources Auditor General’s Report on the Financial Statement Audit of the Liberia Social Safety Net Project (LSSNP) for the Fiscal period ended June 30, 2021 NOTES TO FINANCIAL STATEMENTS 1. Background and Information of the Project With support from the International Development Association and the Trust Fund (USAID Financing); the Liberia Social Safety Nets (LSSN)-project is to establish the key building blocks of a basic National Safety Net Delivery System and provide income support to households who are both extremely poor and food insecure in the Republic of Liberia. The LSSNP was approved by the World Bank on April 28, 2016 with a grant of US$18,900,000 (Eighteen million, nine hundred thousand United States Dollars). The aim of the Project is: • To improve efficiency, enhance capacity, and strengthen the National SSN system in Liberia through the development of the basic building blocks of a safety net delivery system • To provide income support to about 10,000 extremely poor and food insecure households in Liberia through regular cash transfers and accompanying measures. • To finance project management and capacity building of the SSNP implemented by the Ministry of Gender, Children, and Social Protection or MGCSP 2. Use of Grant Proceeds The table below sets out the category of items to be financed out of the grant proceeds, the allocation of the amounts of the grant to each category and the percentage of expenditures for items to be financed in each category: Amount of grant % of Category allocated express expenditure in US$ to be financed Strengthening of the national social safety net system 6,000,000 100 Cash transfer to extremely poor and food insecure households 10,800,000 100 Project Management and capacity building 2,100,000 100 Total 18,900,000 All categories of expenditure shown in these financial statements are fully financed based on the percentage below: % of expenditure IDA Grant 100 9 Promoting Accountability of Public Resources Auditor General’s Report on the Financial Statement Audit of the Liberia Social Safety Net Project (LSSNP) for the Fiscal period ended June 30, 2021 Total 100 3. Significant Accounting Policies Basis of Accounting The financial statements have been prepared in accordance with the International Public Sector Accounting Standards (IPSAS) Cash Basis and in the manner required by the Project Grant Agreement as required by the World Bank’s Operating Policies and Procedures and PFMU’s Financial Management Manual. This implies that all expenditures are expensed whether they are revenue or capital in nature and income is recognized when funds are received from the World Bank. Reporting Currency The Financial reports have been presented in United States Dollars. Transactions denominated in other currencies are translated into United States Dollars and recorded at the rate of exchange ruling at the date of the transaction(s). Balances denominated in other currencies are translated into United States Dollars at the rate of exchange prevailing on the reporting date. 10 Promoting Accountability of Public Resources Auditor General’s Report on the Financial Statement Audit of the Liberia Social Safety Net Project (LSSNP) for the Fiscal period ended June 30, 2021 Notes to the Financial Statements (continued) FY 2020/2021 FY 2019/2020 US$ US$ Loan Receipts Loan from donors for the LSSNP is recognized and reported on the statement of receipts and payments as an income when received and held in a bank account called designated income account for disbursement purpose. All payments for the LSSNP project and activities are made from the designated account: Cash and bank balances Cash consist of cash in hand and balance at bank Recognition of expenditure All expenditures are expensed whether they are revenue or capital in nature and income is recognized when funds are received from the World Bank. Tax The project is 100 percent inclusive of tax 4. Grant Receipt: IDA 57910 2,306,396 1,344,288 TF-A6428 1,128,756 572,206 TFB4346 3,271,500 - Sub total 6,706,652 1,916,494 5.Strengthening the national social safety net delivery system: Strengthening the operational aspects of the LSSNP 873,957 633,049 Sub total 873,957 633,049 6.Cash transfer to extremely poor and food in secured household: Cash transfer to extremely poor and food in secured 843,062 586,585 Sub total 843,062 586,585 7.Project Management and Administration: Human resource (LSSN Secretarial, (SCT & SR) 548,685 680,536 Capacity building and coordination (SCT &SR) 52,362 11,015 Capacity building and coordination (SCT &SR) LACC - 17,024 Sub total 601,047 708,575 8.Cash receipt through grant and other sources IDA grant 6,706,652 1,916,494 9.Cash paid Strengthening the national social safety net delivery system 873,957 633,049 Cash transfer to extremely poor and food in secured households 843,062 586,585 Project management & Administration 601,047 708,575 11 Promoting Accountability of Public Resources Auditor General’s Report on the Financial Statement Audit of the Liberia Social Safety Net Project (LSSNP) for the Fiscal period ended June 30, 2021 Total payments 2,318,066 1,928,209 GRANT NO: IDA 57910 &TFA6428 Liberia Social Safety Net Project (LSSNP Project Financial Management Unit (PFMU) Project Designated Account Statement For the Fiscal Year Ended June 30, 2021 Account No. 1602003361/1502023908(Central Bank of Liberia) Account Type: Current Accounts Depository Bank: Central Bank of Liberia Ashmun Street Monrovia, Liberia Account No. 0321617002000100(Eco Bank Ltd) 13th Street, Sinkor Account Type: Current Accounts Depository Bank: Monrovia, Liberia Account No. 6101741622/6101741632(Eco Bank Ltd) 11th Street, Sinkor Account Type: Current Accounts Monrovia, Liberia Depository Bank: Account No. 03216170020001000 Account Type: Current Account Depository Bank: Guaranty Trust Bank (Liberia) Ltd Ashmun Street Monrovia, Liberia FY FY 2020/2021 2019/2020 US$ Total Grant Received 6,706,652 1,916,494 Total Grant Income Reported 6,706,652 1,916,494 Amount spent 2,318,066 1,928,209 Add balance at the beginning of the year 1,112,234 1,123,949 Balance as at June 30 5,500,820 1,112,234 , Destinated A/C IDA57910 _ CBL - 396,386 Designated A/C-GT Bank 178,857 235,783 Designated A/C-TFA6428-CBL - - Destinated A/C – IDA57910_ ECObank 4,506,438 - Designated A/C-TFA6428_ECObank 814,522 480,065 Cash on Hand (Petty Cash) 1,003 - Total 5,500,820 1,112,234 12 Promoting Accountability of Public Resources Auditor General’s Report on the Financial Statement Audit of the Liberia Social Safety Net Project (LSSNP) for the Fiscal period ended June 30, 2021 GRANT NO: IDA 57910 &TFA6428 Liberia Social Safety Net Project (LSSNP Project Financial Management Unit (PFMU) For the Fiscal Year Ended June 30, 2021 Variance Analysis Activities within components Project Annual Actual Variance Uses of funds by Activity within components Allocation Budget Expenditure US$ US$ US$ US$ Strengthening the National Social Safety Net Delivery System: Strengthening the operational aspects of LSSN 6,000,000 3,456,887 873,957 2,582,930 Sub total 6,000,000 3,456,887 873,957 2,582,930 Cash transfer to extremely poor and food insecure house hold: Cash Transfer to extremely poor and Food insecure 10,200,000 5,441,780 843,062 4,598,718 Accompanying Measures 600,000 334,020 - 334,020 Sub total 10,800,000 5,775,800 843,062 4,932,738 Project Management and Administration Human Resources (LSSN Secretariat, SCT & SR) 1,950,916 1,327,661 548,684 778,977 Capacity Building & Coordination (SCT & SR) 100,000 89,739 52,363 37,376 LACC 49,084 - - - Sub total 2,100,000 1,417,400 601,047 816,352 Grand Total 18,900,000 10,650,087 2,318,066 8,332,021 13 Promoting Accountability of Public Resources