KIRIBATI GRID CONNECTED SOLAR PHOTOVOLTAIC PROECT Funded by: Global Environment Facility (GEF) Grant TF 14105 and Pacific Region Infrastructure Facility (PRIF) Grant TF 14126 FINANCIAL STATEMENTS YEAR ENDED DECEMBER 2018 Government of Kiribati Financial Statements for the Kiribati Grid Connected Solar Photovoltaic Project (GEF Grant No. TF 14105 and PRIF Grant No. TF 14126) KIRIBATI GRID CONNECTED SOLAR PHOTOVOLTAIC PROJECT Contents Introduction 2 Statement of Cash Receipts and Payments 3 Statement of Comparison of Budget and Actual 5 Statement of Accounting Policies and Notes 6 1 Government of Kiribati Financial Statements for the Kiribati Grid Connected Solar Photovoltaic Project (GEF Grant No. TF 14105 and PRIF Grant No. TF 14126) KIRIBATI GRID CONNECTED SOLAR PHOTOVOLTAIC PROJECT The Financial Reports for the project for its final year of implementation ending 30 April 2018 are being presented for auditing. In compliance with the project agreements the audit report is required to be submitted to the World Bank by 30 June 2019. This has not been possible due to the wounding down period of the Project which ended on 30 April 2019 and secondly, three additional projects are being implemented and managed by only two Accountants since late 2018 to date. With the recent wounding down of four Projects namely the STSISP (ADB Funded Project), KAP Ill, KAIP and KICT this has eased workload by the accountants and has enabled the completion of the KGCSPP AFS for 31 December 2018 All financial records for the project are held within the Kiribati Fiduciary Services Unit at the Ministry of Finance & Economic Planning. Atanteora Beiatau Itibwebwe Kaberiera Manager Kiribati Fiduciary Services (KFSU) Officer In Charge, Public Utilities B rd Date: 20 October 2020 2 Government of Kiribati Financial Statements for the Kiribati Grid Connected Solar Photovoltaic Project (GEF Grant No. TF 14105 and PRIF Grant No. TF 14126) STATEMENT OF CASH RECEIPTS AND PAYMENTS - BY DONOR AND COMPONENT (AU$) (1) FOR THE YEAR ENDED DECEMBER 2018 Account Description Notes 2018 2017 Cumulative CASH RECEIPTS 1. TF 14105 (GEF) Designated Account 2 30,720 30,112 215,537 Direct Payments 2 116,866 106,858 926,496 Total 147,585 136,971 1,142,033 2. TF 14126 (PRIF) Designated Account 2 33,345 65,923 453,796 Direct Payments 2 804,636 348,657 2,981,551 Total 837,981 414,580 3,435,347 TOTAL CASH RECEIPTS Designated Account 1, 2 64,065 96,035 669,333 Direct Payments 1, 2 920,080 455,515 3,908,047 Grand Total 984,145 551,550 4,577,380 CASH PAYMENTS BY CATEGORY AND COMPONENT As per attached schedule 3 928,792 555,281 4,577,380 CASH RECEIPTS LESS CASH PAYMENTS (55,353) (3,731) - IMPRESTS 8 16,723 - - NET CHANGE IN CASH (38,630) (3,731) - PAYABLES 11 - (2,318) - ADD OPENING CASH BALANCE AS AT 1 January 2018 38,630 44,679 - CLOSING CASH BALANCE AS AT 30 April 2019 4 - 38,630- 3 Government of Kiribati Financial Statements for the Kiribati Grid Connected Solar Photovoltaic Project (GEF Grant No. TF 14105 and PRIF Grant No. TF 14126) STATEMENT OF CASH RECEIPTS AND PAYMENTS - BY DONOR AND COMPONENT (AU$) (2) FOR THE YEAR ENDED DECEMBER 2018 Notes 2018 2017 Cumulative CASH PAYMENTS 3 1. TF 14105 (GEF) - Component 1 202,529.73 107,451 973,375 Component 2 50,503.84 18,063 68,567 Component 3 18,523.88 37,834 170,829 Total 271,557.45 163,349 1,212,770 2. TF 14126 (PRIF) Component 1 608,949.28 320,436 2,917,663 Component 2 - - - Component 3 48,284.93 71495.33 446,946 Total 657,234.21 391,932 3,364,609 TOTAL CASH PAYMENTS 928,792 555,281 4,577,380 TF 14105 & TF 14126 Component 1 811,479.01 427,888 3,891,038 Component 2 50,503.84 18,063 68,567 Component 3 66,808.81 109,330 617,775 Grand Total 928,792 555,281 4,577,380 4 т й � о�о � о и � � м а оO1о, 1O ш й � м at « ^� r �t м 1� 00 +�1 � о°1io оо �-+ т о st т и r. и v й т' г` г` �•-i г` о и r м � £ � оо г� г� оQ1о tO й м � � � м � � r. г� о г� .i м ш д� и р � л {�J д' 00 00 О N �0 � t0 т й о�� д а � г� .� г., �-, v � > `"' :° ш г .� оо м о .-+ О N а о�о, о м � й а� � N б ��° й tv L ~ т .�-� О й Z _, е°v .� и о о � и г� м г� и оо +� ,�; � G т � м rn � о а � и ь. о er ni .1 oi г: � С U' Q��++ '� �^ ni п�i т "' с°� а а о т � .-, о � .� � ru ш iл Ф Vг г0 � г й ш � � � � � � 1.П � а � т а •� j '�_ � р � � о У �' Z ш rn ct О� еч �.t ~ и� � �а v й ооо � n ч� = оа„ О� N ct °С о� °' � L � Е ш о �оо а`V+ " � v и оо � � й � ш т' °° и � °' г� � •и и с � С й +' i�. г° ''^ � а � а л г а г+ cV м � й � _ с с с v т о о о � � п о. о. �, д с°� й �° с.°� � Government of Kiribati Financial Statements for the Kiribati Grid Connected Solar Photovoltaic Project (GEF Grant No. TIF 14105 and PRIF Grant No. TF 14126) For the Year Ended December 2018 Statement of Accounting Policies and Notes 1. Accounting Policies Basis of Preparation The financial statements of the project have been prepared in accordance with the requirement of the Public Finance (Control & Audit) Act, which includes the requirement to comply with generally accepted accounting practice. The financial statements have been prepared in accordance with Cash Basis IPSAS "Financial Reporting under the Cash Basis of Accounting". In previous years, financial statements were prepared largely in accordance with the cash basis of accounting, but with certain modifications. There have been no other changes in accounting policies during the financial year. Reporting Entity These financial statements are prepared specifically for a project that is managed by the Ministry of Public Works & Utilities (MPWU). MPWU forms part of the Government of Kiribati (GoK). The project is jointly funded by the Global Environment Fund (GEF) and by the Pacific Regional Infrastructure Facility (PRIF), through two grants, as follows: (i) GEF. Grant of US$ 1.00 million (with originally estimated AU$ equivalent of AU$ 1.00 million); established through a Financing Agreement dated 25 March 2013. (ii) PRIF. Grant of US$ 2.92 million (with originally estimated AU$ equivalent of AU$ 2.92 million); established through a Financing Agreement dated 25 March 2013. Funding arrangements provide that costs are to be to be split over the three different components of the project, with Components 1 (investments) and 3 (Project Management) to be split at the ratio of GEF 25% and PRIF 75%. Component 2 (Capacity Building) will be split at the ratio of GEF 32% and PRIF 68%. WB administers both the GEF and PRIF funding. The objective of the project is to support the Government of Kiribati to contribute in reducing Kiribati's dependence on imported petroleum for power generation in order to improve energy security and to reduce the GHG emissions from diesel fuel used for grid electricity supply in the country. Its specific objective is to serve as a catalyst for the substitution of the diesel based electricity generation for the South Tarawa grid by grid-connected solar PV supply of electricity. Under the Grant Agreements, there is only one Category of expenditure. 6 Government of Kiribati Financial Statements for the Kiribati Grid Connected Solar Photovoltaic Project (GEF Grant No. TF 14105 and PRIF Grant No. TF 14126) For the Year Ended December 2018 The allocation of expenditure is managed accordingly through the component/activity structure. The project activities and budget is also managed according to the component/activity structure. The grant agreements identified the budget activities according to the following three components to be implemented under the project: (i) Component 1 - Investments. (ii) Component 2- Capacity Building. (iii) Component 3 - Project Management. The project falls under the overall guidance of MPWU, though the Public Utilities Board (PUB) takes the lead in its actual project implementation, which is being coordinated by a Project Support Team (PST), which consists of a Project Manager and a Technical Assistant. Financial management and procurement support for the project continued to be provided through the Kiribati Fiduciary Services Unit (KFSU), which is established under the Ministry of Finance and Economic Development. The major activity being implemented by the project are the contracts for US$ 2,144,325 with CBS Power Solutions and NZ$668,403.70 with the South Pacific Synergies The project officially commenced on 18 June 2013, being the date when the both grants were made available. The closing date has been further extended and is currently set as 31 October 2018; a further four months is available for settling expenditures incurred by 31 October 2018. Accounting Period IPSAS cash accounting standards require that general purpose financial statements be prepared at least annually (IPSAS cash para 1.4.1). These financial statements cover the fiscal year 1 St January 2018 to 30 th April 2019. The balance of undrawn grants as at 30 April 2019 is as follows: GEF No balance - Fully utilized PRIF No balance - Fully utilized Currency Reporting Currency The reporting currency is Australian Dollars (AU$). Foreign Currency In-country payments made in foreign currencies and reported in these financial statements have been converted to AU$ by the ANZ Bank at the applicable rate as of the date of transaction. Direct Payments made in foreign currencies and reported in these financial 7 Government of Kiribati Financial Statements for the Kiribati Grid Connected Solar Photovoltaic Project (GEF Grant No. TF 14105 and PRIF Grant No. TF 14126) For the Year Ended December 2018 statements have been converted to AU$ based on the exchange rate as per www.xe.com as of the transaction value date. The in-country fund receipts transferred from the World Bank were all in AU$. Withdrawals from the grants are charged against the grants, in the respective grant currency, based on exchange rates applied by the World Bank. Cash and Cash Equivalents Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash, which are subject to an insignificant risk of changes in value. Direct Payments made by World Bank GoK also benefits from payments made directly by the World Bank. These payments do not constitute in-country cash receipts and payments of GoK, but do benefit GoK. They are disclosed as Direct Payments in the Statement of Cash Receipts and Payments, and in these Notes. 2. Cash Receipts (AUD) Details of the cash receipts, for each of the GEF and PRIF grants, are given in the table on the following page. The Designated Account (DA) is the locally-managed, account; funds are transferred from WB periodically, from which payments are made. Direct Payments are made by WB directly to the supplier/consultant, based on the official request of the authorized signatories of the project. GoK receives the funds into the DA (covering both GEF and PRIF funding), which are managed by MPWU/KFSU, with signatories as agreed by GoK. Under this arrangement MPWU carries out the implementation of the project, and KFSU makes payments on their behalf after appropriate authorization and documentation provided by MPWU. 8 Government of Kiribati Financial Statements for the Kiribati Grid Connected Solar Photovoltaic Project (GEF Grant No. TF 14105 and PRIF Grant No. TF 14126) For the Year Ended December 2018 SUMMARY OF CASH RECEIPTS FOR THE YEAR ENDED DECEMBER 2018 A. GEF GRANT TF 14105 KI 1. Designated Account Date WA No. DA No. Details WA Amount AU$ Amount Disbursed by Value Date Equiv. Grant WB Currency (us$) 17-Apr-18 1522 ANZ Bank -Acct # 974700 Replenishment of expenses $ 5,862.69 $ S,862.69 24-Apr-18 $ 4,453.59 3-May-18 1423 ANZ Bank - Acct # 974700 Replenishment of expenses $ 27,875.60 $ 27,875.60 6-Jul-18 $ 20,684.56 18-Apr-19 RN ANZ Bank - Acct # 974701 Refund Application -$ 3,018.73 -$ 3,018.73 18-Apr-19 -$ 2,161.29 $ 30,719.56 $ 30,719.56 $ 22,976.86 2. Direct Payments Date Received Paid to Details WA Amount Amount Disbursed Equivalent In AU$ Exchange Rate Value Date Equivalent Grant by W8 WA No. by WB Currency (US$) 19-Apr-18 1521 SPS Contract payment NZD 25,065.14 NZD25,065.14 $ 23,747.69 0,9474 14-Apr-18 18,445.27 27-Jun-18 1525 CBS Contract payment USD 15,000.00 USD 15,000.00 $ 20,353.37 0.7370 28-Jun-18 15,000.00 25-Jul-18 1526 CBS Contract payment USD17,446.10 USD17,446.10 $ 23,552.37 0.7407 3-Aug-18 17,446.10 9-Oct-18 1528 CBS Contract payment USD53,645.97 USD53,645.97 $ 61,890.27 0.7099 10-Oct-18 53,645.97 9-Oct-18 1529 SPS Contract payment NZO 40,825.91 NZD 40,825.91 $ 38,331.35 0.9389 15-Oct-18r 27,375.61 31-Oct-18 1530 CBS Contract payment USD33,136.10 USD33,136.10 $ 46,034.06 0.7198 S-Nov-18 33,136.10 $ 213,909.13 $ 165,049.06 B. PRIF GRANT TF 14126 KI 1. Designated Account Date WA No. DA No, Details WA Amount AU Amount Disbursed by Value Date Equiv. Grant WB (AUD) Currency (US$) 17-Apr-18 1523 ANZ Bank - Acct # 974700 Replenishment of expenses $ 17,587.71 S 17,587.71 24-Apr-18 S 13,360.51 3-May-18 1524 ANZBank -AcctN974700 Replenishmentof expenses $ 29,436.60 S 29,436.60 6-Jul-18 S 21,842.87 18-Apr-19 RN ANZ Bank - Acct # 974700 Refund Application -$ 13,170.44 -$ 13,170.44 18-Apr-19 -$ 9,429.52 18-Apr-19 RN ANZ Bank - Acct # 974700 Refund Application -$ 508.44 -$ 508.44 18-Apr-19 -$ 364.02 $ 33,345.43 $ 33,345.43 $ 25,409.84 2. Direct Payments Date ReceIved Paid to Details WA Amount Amount Disbursed Equivalent In AUS Exchange Rate Value Date Equlvalent Grant by Wa WA No. by WB Currency (US$) 18-Jan-18 1520 CBS Contract payment USD40,365.00 USD40,365.00 $ 50,503.84 0.7992 18-Jan-18 40,365.00 26-Apr-18 1821 SPS Contract payment NZD75,195A2 NZD 75,195.42 $ 70,294.14 0.9348 28-Jun-18' 53,119.19 28-Jun-18 152S CBS Contract payment USD 45,000.00 USD45,000.00 $ 61,060.12 0.7370 28-Jun-18 45,000.00 25-Jul-18 1526 CBS Contract payment USD 52,338.30 USD52,338.30 $ 70,657.11 0.7407 3-Aug-18 52,338.30 3-Sep-18 1527 CBS Contract payment USD 15,000.00 USD15,000.00 $ 20,903.79 0.7176 4-Sep-18 15,000.00 9-Oct-18 1528 CBS Contract payment USD 160,937.90 USD 160,937.90 $ 216,356.45 0.7099 10-Oct-18 160,937.90 9-Oct-18 1529 SPS Contract payment NZD 122,477.72 NZD 122,47772 $ 112,346.60 0.9173 15-Oct-18r 80,236.07 31-Oct-18 1530 CBS Contract payment USD 99,408.30 USD99,408.30 $ 138,102.19 0.7198 5-Nov-18 99,408.30 31-Oct-18 1531 CBS Contract payment USD47,100.00 USD47,100.00 $ 64,411.33 0.7312 29-Nov-18 47,100.00 $ 804,635.57 $ 593,504.77 9 Government of Kiribati Financial Statements for the Kiribati Grid Connected Solar Photovoltaic Project (GEF Grant No. TF 14105 and PRIF Grant No. TF 14126) For the Year Ended December 2018 3. Cash Payments (AUD) The summary of payments is given in the Statement of Cash Receipts and Payments, and is further detailed in the table on the following page. 4. Cash Balance The closing cash balance is zero as the remaining cash balance in the DA Bank Account of AU$16723.00 was reimbursed to the WB before the closure date of the Project 5. Employee Entitlements No provision is required for employee entitlements. 6. Budget The lifetime budget in AU$ as per these financial statements is as per the budget agreed by MPWU. The budget available of AU$928792.00 for the remaining periods of the Project was fully utilized before the Project closure date. 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Commitments There were no outstanding (unpaid) contract commitments, as at 30 April 2019 1st Jan 2018 to 30 Apr 2019 2017 Component 1 - 494,314.20 Component 2 - - Component 3 - Total - 550,319.19] All commitments were cleared before the end of the Project closing date 8. Imprests As at 30 April 2019, there were no unretired imprests Property, Plant & Equipment Payments for Property Plant & Equipment (PPE) are charged fully as disbursements under the respective Component, and included in the Statement of Cash Receipts and Payments, at cost; these are recorded in a PPE Register, for the purposes of inventory control. The PPE Register is shown on the following page. In 2018 a laptop for the Project Accountant was purchased which was also included in the PPE Register. As the Project is completed and the PPE items are for the Office furniture and Equipment, these are left to the Public Utilities Board (PUB) Office and the Kiribati Fiduciary Services Unit (KFSU) Office for use. Related Parties There were no related party transactions during the year. The ultimate owner of the project is GoK, as set out in the Grant Agreements. 9. 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