Puntland State of Somalia Second Public Financial Management Capacity Strengthening Project Project Number: P151492 Grant Number: TF0A388 Auditor’s Report and Financial Report For the Period 1 January 2020 to 31 December 2020 Puntland State of Somalia Second Public Financial Management Capacity Strengthening Project Project Number P151492, Grant Number TF0A388 Auditor’s Report and Financial Report For the Period 1 January 2020 to 31 December 2020 TABLE OF CONTENTS PAGE GLOSSARY OF ABBREVIATIONS ................................................................................................. 3 1. INTRODUCTION ........................................................................................................................ 4 1.1 BACKGROUND ................................................................................................................................... 4 1.2 PROJECT GENERAL INFORMATION ................................................................................................... 6 1.2 SUMMARY OF OVERALL PROJECT PERFORMANCE .......................................................................... 6 1.3 AUDIT OBJECTIVES ........................................................................................................................... 7 1.4 AUDIT SCOPE .................................................................................................................................... 7 2. STATEMENT OF PROJECT MANAGEMENT’S RESPONSIBILITIES .................................... 8 3. INDEPENDENT AUDITOR’S REPORT ..................................................................................... 9 4. STATEMENT OF RECEIPTS AND PAYMENTS .................................................................... 12 5. STATEMENT OF FINANCIAL ASSETS ................................................................................. 13 6. STATEMENT OF BUDGET COMPARISON WITH ACTUALS ............................................... 14 7. STATEMENT OF CASH FLOWS ............................................................................................ 15 8. NOTES TO THE FINANCIAL STATEMENT ........................................................................... 16 ANNEX I: ENTITY RECEIPTS VERSUS DONOR CONFIRMATIONS ......................................... 22 ANNEX II: COMPARISON OF AUDITED AMOUNTS AND THE REPORTED AMOUNTS TO THE DONORS ........................................................................................................................................ 23 ANNEX III CONFIRMATION BETWEEN APPLICATION FOR WITHDRAWALS AND RECEIPTS FROM THE WORLD BANK ........................................................................................................... 24 ANNEX IV LIST OF FIXED ASSETS ACQUIRED IN 2020 ........................................................... 25 2 GLOSSARY OF ABBREVIATIONS EAFS : External Assistance Fiduciary Section : IPSAS : International Public-Sector Accounting Standard OAG : Office of Auditor General PIU : Project Implementation Unit PFM : Public Financial Management PFMR : Public Financial Management Reform PSS : Puntland State of Somalia UNOP : United Nations Office for Project Services WB : World Bank 3 1. INTRODUCTION 1.1 Background The Federal Republic of Somalia is faced with the challenge of rebuilding state institutions in the midst of recurrent and protracted conflict. Decades of conflict have led to the degradation and disintegration of state institutions, weak governance, and poor service delivery. The collapse of central government has, also, led to fragmentation of the Somali state into regional governments with varying degrees of autonomy. Puntland, in the north east, for example, is recognized by the FGS as a Federal Member State. The country’s human development indicators are among the lowest in the world, with most of the population living in rural areas. The economy is predominantly livestock based with heavily dependent on foreign aid and remittances. Transfer of power in August 2012 from a transitional to a full federal government in Mogadishu generated domestic political momentum and triggered a step-change in international re-engagement. Support for the government, from both international and domestic fronts grew following the Brussels Conference in September 2013 event which culminated in the endorsement of the Somali Compact which establishes a framework for partnership between the government and international community. While positive momentum has been generated, the need to demonstrate results to the people of Somali is an increasingly urgent support for government to establish credibility. Somali Society is highly segmented, complicating the development of a unifying vision of the Somali state. The available resources are competed for by numerous societies. With lack of effective public financial management and integrity institutions, international assistance and humanitarian supplies proved vulnerable to diversion. The physical infrastructure, equipment, and records of many government agencies and ministries have been destroyed due to the long civil war. The country has serious challenge with civil service and human resource capacity; recruitment systems and human resource management are weak. Attracting qualified staff is a major challenge due to low remuneration combined with the insecure environment. No structured training exists for government employees. At the centre of government, capacities for planning, policy development and coordination are weak. No clear mechanisms, also, exist for monitoring and evaluation, except for selected donor-funded programs. In the past, donor engagement in the area of public sector capacity development has been limited. The FGS has now requested rapid World Bank and UNDP support to raise the capacity of the Government as articulated in the Somali Compact. The project is designed to rebuild the PFM institutions to address the engrain accountability challenges to improve citizen and donor confidence/trust in government and this will enhance state-building and the Government’s legitimacy. Improved PFM institutions and systems will ultimately contribute to positive political and socio-economic outcomes. The Grant Agreement was signed on 22 July 2015 by the Federal Republic of Somalia and International Development Association (World Bank), acting as administrator of the Somalia Multi-Partner Fund. The Subsidiary Agreement was signed on 10 August 2015 between the Federal Republic of Somalia represented by the Ministry of Finance and Puntland State of Somalia represented by the Ministry of Finance. The Grant Agreement became effective on 10 September 2015 and is expected to close on 30 June, 2020. The PFM Capacity Strengthening project phase two is supported by a grant of US$6 million is focused towards supporting the PFM reforms in Puntland. Key Objectives of the Project The project development objective is to establish and strengthen institutional capacity for the management of public funds in Central Finance Agencies and targeted sectors. 4 1. INTRODUCTION (Continued) 1.1 Background (Continued) Key Components/Activities of the Project The project has 4 components: • Component 1: Revenue Mobilization, Planning and Budget Preparation • Component 2: Treasury Management, Budget Execution, Procurement, Accounting and Financial Reporting and Puntland FMIS • Component 3: Strengthening the Integrity Pillars • Component 4: Public Financial Management Professionalization-is currently implemented by the Ministry of Finance at the FGS. • Component 5: PFM Reform oversight; coordination and management 5 1. INTRODUCTION (Continued) 1.2 Project General Information Registered Office Public Financial Management Reform Coordination Unit Garowe, Puntland Designated Bank Account First community Bank Kimathi Street Branch Nairobi, Kenya Auditors Auditor General Office of the Auditor General Garowe, Puntland Fiduciary Management External Assistance Fiduciary Section (EAFS) Office of the Accountant General Garowe, Puntland Project Management Name Role Position Contact Information Accountant Omar Salah Aden Accountant General AG@mof.plstate.so General Faysal Abdulahi Director General Director General DG@mof.plstate.so Abdulkadir Ahmed Project Project Coordinator abdulhashi11@gmail.com Hashi Coordination Finance Director of EAFS Said Ismail Said saedlpo@gmail.com Management Section Head of EAFS Mohamed Katun Shire Accountant Kaatun777@gmail.com Accounts Section Abshir Abdulkadir Head of EAFS Procurement Abshirciro25@gmail.com Ahmed Procurement section 1.2 Summary of Overall Project Performance Physical progress So far, the following has been done; ▪ 35% of MDA audits (including. pro-poor sectors) have been completed and published. ▪ 25% of appropriated expenditures are now processed through the commitment system. ▪ Puntland’s revenue administration’s capacity to administer tax based on modern principles measured by the number of large and medium tax payers using automated processing stands at 2,207 tax payers. However, their registration is not automated as the firm that will help set this up is currently being procured. 6 1. INTRODUCTION (Continued) 1.3 Audit Objectives In line with the Grant Agreement and the Puntland Audit Law, the Office of the Auditor General was mandated to carry out external audit of the project for the period 1 January 2020 to 31 December 2020. The specific objectives of the audit were to enable the Auditor General to express an opinion as to whether; ▪ The Project funds received and expenditures incurred during the fiscal year were for the purpose intended; ▪ The Project books of accounts were kept based on the Generally Accepted Accounting Principles (GAAP) and the International Public-Sector Accounting Standards (IPSAS) Cash Basis and the financial transactions therein reflect a true record of the transactions that took place during the period; ▪ Adequate Internal Control processes and systems were maintained by the implementing agencies during the period under the audit. 1.4 Audit Scope The audit report covers the statement of receipts and expenditure of Second Public Financial Management Project for the period 1 January 2020 to 31 December 2020. The audit also assessed PFM internal controls structure relevant to the Project Agreement and the project financial management. 7 2. STATEMENT OF PROJECT MANAGEMENT’S RESPONSIBILITIES 8 3. INDEPENDENT AUDITOR’S REPORT To the Office of the Accountant General (OAG)for the WB funded Second Public Financial Management Capacity Strengthening Project, Project Number P151492, Grant Number TF0A388 Opinion We have audited the accompanying financial statements of the Second Public Financial Management Capacity Strengthening Project, Project Number P151492, Grant Number TF0A388 set out on pages 12 to 21, which comprise the statement of financial assets as at 31st December 2020, statement of receipts and payments, statement of comparative budget and actual amounts and the statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory notes. In our opinion, the accompanying financial statements give a true and fair view of the financial position of the Second Public Financial Management Capacity Strengthening Project, Project Number P151492, Grant Number TF0A388 as at 31st December 2020 and of its financial performance and cash flows for the year then ended in accordance with International Public Sector Accounting Standards (Cash Basis) and comply with the Financing Agreements Grant Number TF0A388 . . Basis for Opinion We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor’s responsibilities for Audit of the Financial Statements section of our report. We are independent of the Project in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA Code) together with the ethical requirements that are relevant to our audit of the financial statements, and we have fulfilled our ethical responsibilities in accordance with these requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Other Information The management for the project are responsible for the other information. The other information comprises background information and overall performance included in the report but does not include the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed on the other information that we obtained prior to the date of this auditor’s report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. 9 3. INDEPENDENT AUDITOR’S REPORT (Continued) To the Office of the Accountant General (OAG) for the WB funded Second Public Financial Management Capacity Strengthening Project, Project Number P151492, Grant Number TF0A388 Responsibilities of Management and Those Charged with Governance for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with International Public Sector Accounting Standards (Cash Basis) and for such internal control as management determine 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 the Project’s ability to continue sustaining services, disclosing, as applicable, matters related to sustainability of services and using the going concern basis of accounting unless the management either intend to terminate the Project, or have no realistic alternative but to do so. Auditor’s Responsibilities for the Audit of the Financial Statements 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 ISAs 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. As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Project's internal control. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by Management. • Conclude on the appropriateness of the Management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Project’s ability to continue sustaining its services. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statemen ts or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Project to cease sustaining its services. • Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. 10 3. INDEPENDENT AUDITOR’S REPORT (Continued) 4. 11 Puntland State of Somalia Second Public Financial Management Capacity Strengthening Project Project Number P151492, Grant Number TF0A388 Auditor’s Report and Financial Report For the Period 1 January 2020 to 31 December 2020 4. STATEMENT OF RECEIPTS AND PAYMENTS 12 Puntland State of Somalia Second Public Financial Management Capacity Strengthening Project Project Number P151492, Grant Number TF0A388 Auditor’s Report and Financial Report For the Period 1 January 2020 to 31 December 2020 5. STATEMENT OF FINANCIAL ASSETS 13 Puntland State of Somalia Second Public Financial Management Capacity Strengthening Project Project Number P151492, Grant Number TF0A388 Auditor’s Report and Financial Report For the Period 1 January 2020 to 31 December 2020 STATEMENT OF BUDGET COMPARISON WITH ACTUALS FOR THE PERIOD 1 JANUARY 2020 TO 31 DECEMBER 2020 Actual Budget Percentage Budget Amount Variance Variance RECEIPTS US$ US$ US$ % World Bank (Somalia Multi-Partner 5,668,526 2,022,443 3,646,083 64% Fund) TOTAL RECEIPTS 5,668,526 2,022,443 3,646,083 64% EXPENDITURE Component 1: Revenue Mobilization, Planning and Budget 1,445,580 321,080 1,124,500 78% Preparation Component 2: Treasury management, budget execution, procurement, accounting and 3,423,506 1,436,939 1,986,567 58% financial reporting, Strengthening the Integrity Pillars Component 5: Project oversight, coordination and management 799,440 419,132 380,308 48% TOTAL EXPENDITURE 5,668,526 2,177,151 3,491,375 62% The budget variance was US$ 3,491,375 (62%), the budget runs up to 31 December 2020. 14 Puntland State of Somalia Second Public Financial Management Capacity Strengthening Project Project Number P151492, Grant Number TF0A388 Auditor’s Report and Financial Report For the Period 1 January 2020 to 31 December 2020 6. STATEMENT OF CASH FLOWS FOR THE PERIOD 1 JANUARY 2020 TO 31 DECEMBER 2020 2020 2019 RECEIPTS Notes Amount Amount US$ US$ Cash flows from operations Grant receipts 8.2 2,022,443 1,136,550 Total Expenditure (2,177,151) (1,055,241) Net cash generated from operations (154,708) 81,309 Cash and cash equivalents at 1 January 160,819 95,410 Other adjustments 12,776 (15,900) Cash and cash equivalents at 31 December 8.7 18,887 160,819 15 Puntland State of Somalia Second Public Financial Management Capacity Strengthening Project Project Number P151492, Grant Number TF0A388 Auditor’s Report and Financial Report For the Period 1 January 2020 to 31 December 2020 7. NOTES TO THE FINANCIAL STATEMENT 8.1 Significant Accounting Policies a) Basis of Preparation of the Financial Report The Project’s financial report is prepared in accordance with and comply with the International Public-Sector Accounting Standards (IPSAS), Cash Basis. The measurement basis applied is the cash basis, except where otherwise stated in the accounting policies below. The accounting policies adopted have been consistently used throughout. b) Foreign Currency Transactions The functional currency is the United States dollar and the reporting currency is also the United States dollar. Items included in the financial statements are measured in the currency of the primary economic environment in which the entity operates. c) Reporting Period The reporting period for these financial statements is the 2020 financial year of the Government, which runs from January 1, 2020 to December 31, 2020. d) Grant Receipt Receipts represent cash received by the Project during the period and comprise solely grants received from the World Bank under the Somalia Multi-Partner Fund (SMPF). These grant receipts have been recognized when received into the Projects Designated Account (DA) in line IPSAS Cash Basis. e) Project Expenditure Expenditure represents outlays of cash made by the Project and/or the World Bank for and on behalf of the Project. The expenses comprise both operating and capital expenditure and are recognized in the books of account when paid out in line with IPSAS Cash Basis. f) Cash and cash equivalents Cash and cash equivalents comprise cash at bank. Bank account balances include amounts held at the commercial banks at the end of the financial year. g) Budgets The budget is developed on a comparable accounting basis (cash basis), the same accounts classification basis and for the same period as the financial statements. The Project’s budget was approved as required by the donor and participating partners. A high-level assessment of the Project’s actual performance against the comparable budget for the financial year/period under review has been included in under section 6 to these financial statements. h) Comparative Figures Where necessary, comparative figures have been adjusted to conform with changes in presentation in the current year. i) Statement of reporting currency The financial statements are presented in United States Dollars (US$), which is the functional and reporting currency of the Project. 16 Puntland State of Somalia Second Public Financial Management Capacity Strengthening Project Project Number P151492, Grant Number TF0A388 Auditor’s Report and Financial Report For the Period 1 January 2020 to 31 December 2020 8. NOTES TO THE FINANCIAL STATEMENT (Continued) 8.2 Grant Receipt Amount Amount Description 2020 2019 US$ US$ Grant receipts (Somalia Multi-Partner Fund) 1,136,550 2,022,443 Total: 2,022,443 1,136,550 8.2(a) 2020 Grant Receipts The World Bank has disbursed US$ 2,022,443 to PFM Project II as follows: - Date Received Reference Description Amount US$ 07/03/2020 01/03/2020 Direct payment 165,088 07/03/2020 02/03/2020 Reimbursement 279,627 17/03/2020 06/03/2020 Direct payment 15,413 28/04/2020 04/04/2020 Direct payment 19,746 13/05/2020 04/05/2020 Direct payment 12,364 26/06/2020 05/05/2020 Reimbursement 287,591 11/06/2020 02/06/2020 Direct payment 45,839 25/07/2020 02/07/2020 Direct payment 24,667 26/08/2020 04/08/2020 Reimbursement 182,849 27/08/2020 05/08/2020 Direct payment 18,515 16/09/2020 03/09/2020 Direct payment 24,667 30/09/2020 04/09/2020 Reimbursement 196,254 01/10/2020 01/10/2020 Direct payment 42,014 20/10/2020 04/10/2020 Direct payment 3,751 24/10/2020 06/10/2020 Direct payment 6,212 28/10/2020 09/10/2020 Reimbursement 124,682 26/11/2020 02/11/2020 Reimbursement 196,351 26/11/2020 03/11/2020 Direct payment 26,572 01/12/2020 05/12/2020 Direct payment 12,364 10/12/2020 05/12/2020 Direct payment 24,667 10/12/2020 06/12/2020 Direct payment 47,279 19/12/2020 10/12/2020 Direct payment 30,531 19/12/2020 11/12/2020 Reimbursement 182,728 29/12/2020 14/12/2020 Direct payment 27,302 30/12/2020 15/12/2020 Direct payment 25,370 Total Grant Received 2,022,443 17 Puntland State of Somalia Second Public Financial Management Capacity Strengthening Project Project Number P151492, Grant Number TF0A388 Auditor’s Report and Financial Report For the Period 1 January 2020 to 31 December 2020 8.0 NOTES TO THE FINANCIAL STATEMENT (Continued) 8.3 Component 1: Revenue Mobilization, Planning and Budget Preparation 2020 2019 Amount Amount US$ US$ Description Sub-component 1.1: Individual consultant for strengthening planning and budget preparation 321,080 62,587 Sub-component 1.3: Firm for revenue mobilization, forecasting and tax administration - 96,140 Total 321,080 158,727 8.4 Component 2: Treasury management, budget execution, procurement, accounting and financial reporting 2020 2019 Amount Amount US$ US$ Description Sub-component 2.1,2.2 &2.4 firm for treasury management and budget execution; PFM legal framework; Comprehensive operating procedures 536,129 2,270 manual (COPM); accounting and reporting and financial TA for the bespoke FMIS Sub-component 2.3 Bespoke FMIS application 254,328 108,220 developer Sub-component 2.4 In-house FMIS Manager, system quality audit, Treasury TA, FMIS operation and 646,482 139,714 Internet Cost Sub-component 2.5,2.6 2.7 - 102,430 Total 1,436,939 352,634 8.5 Component 3: Strengthening the Integrity Pillars 2020 2019 Amount Amount US$ US$ Description Sub-component 3.1: Firm for Supreme Audit Institution SAI including supply and implementation of ACL/CATTS & 3.2 Legislative oversight: Public - 169,822 Accounts Committee (PAC) & Budget Committee, supply of IT equipment, Training, workshops, seminars and peer-learning Total - 169,822 18 Puntland State of Somalia Second Public Financial Management Capacity Strengthening Project Project Number P151492, Grant Number TF0A388 Auditor’s Report and Financial Report For the Period 1 January 2020 to 31 December 2020 8. NOTES TO THE FINANCIAL STATEMENT (Continued) 8.6 Component 5: Project oversight, coordination and management 2020 2019 Amount Amount US$ US$ Sub-component 5.1: PFMRCU Coordination 419,132 326,231 Sub-component 5.2 Reform Oversight Committee (ROC), Technical Steering Committee (TSC) PFM Reform Coordinating Unit (PFMRCU), - 47,827 Sub-component 5.3 PFMRCU furniture & fittings and IT equipment - - 419,132 374,058 8.7 Cash and cash equivalents Amount Amount Description 2020 2019 US$ US$ Designated Bank Account Number 0012488204 18,887 160,819 Total: Cash and cash equivalents 18,887 160,819 8.8 Opening Balance Adjustment Amount Amount Description 2020 2019 US$ US$ Adjustment (Opening balance adjustment ) 12,776 (15,900) Total: Adjustment 12,776 (15,900) 8.9 Reconciliation between Application for Withdrawals and Receipts from the World Bank Withdrawal Actual Date of Application Date of Application Receipt Difference Application Number Receipt Amount Amount US$ US$ US$ 01/03/2020 PUNT70 165,087 01/03/2020 165,087 - 25/02/2020 PUNT68 279,628 02/03/2020 279,628 - 12/03/2020 PUNT69 15,413 06/03/2020 15,413 - 23/04/2020 PUNT71 19,746 04/04/2020 19,746 - 09/05/2020 PUNT73 12,364 04/05/2020 12,364 - 19/05/2020 PUNT74 287,591 05/05/2020 287,591 - 08/06/2020 PUNT75 45,839 02/06/2020 45,839 - 18/07/2020 PUNT76 24,667 02/07/2020 24,667 - 20/08/2020 PUNT78 182,849 04/08/2020 182,849 - 19 Puntland State of Somalia Second Public Financial Management Capacity Strengthening Project Project Number P151492, Grant Number TF0A388 Auditor’s Report and Financial Report For the Period 1 January 2020 to 31 December 2020 Withdrawal Actual Date of Application Date of Application Receipt Difference Application Number Receipt Amount Amount 21/08/2020 PUNT77A 18,515 05/08/2020 18,515 - 12/09/2020 PUNT79 24,667 03/09/2020 24,667 - 27/09/2020 PUNT81 196,254 04/09/2020 196,254 - 22/09/2020 PUNT80 42,014 01/10/2020 42,014 - 14/10/2020 PUNT82 3,751 04/10/2020 3,751 - 20/10/2020 PUNT83 6,212 06/10/2020 6,212 - 24/10/2020 PUNT84 124,682 09/10/2020 124,682 - 22/11/2020 PUNT85 196,351 02/11/2020 196,351 - 22/11/2020 PUNT87 26,572 03/11/2020 26,572 - 22/11/2020 PUNT88 12,364 05/12/2020 12,364 - 03/12/2020 PUNT86A 24,667 05/12/2020 24,667 - 26/11/2020 PUNT89 47,279 06/12/2020 47,279 - 08/11/2020 PUNT90 30,531 10/12/2020 30,531 - 17/12/2020 PUNT91 182,728 11/12/2020 182,728 - 23/12/2020 PUNT92 27,302 14/12/2020 27,302 - 23/12/2020 PUNT93 25,370 15/12/2020 25,370 - Total 2,022,443 2,022,443 - 8.10 Undrawn External Assistance The undrawn grant facilities available to fund future operations under binding agreements and where the terms and conditions are to be met, consist of: 31 December 2020 31 December 2019 Description of Grant Amount Amount US$ US$ Somalia Multi-Partner Fund (MPF) 3,646,083 1,031,950 Total undrawn grant facilities 3,646,083 1,031,950 Undrawn grant facilities relate to an amount of US$ 3,646,083 to be disbursed by the World Bank under the Somalia Multi-Partner Fund (MPF) and is stipulated to strengthen the staffing and institutional capacity of selected line ministries and central agencies to perform core government functions. 20 Puntland State of Somalia Second Public Financial Management Capacity Strengthening Project Project Number P151492, Grant Number TF0A388 Auditor’s Report and Financial Report For the Period 1 January 2020 to 31 December 2020 8. NOTES TO THE FINANCIAL STATEMENT (Continued) 8.11 Designated Bank Account Balance The designated account balance as at 31 December 2020 is detailed below: - Designated Account Reconciliation Statement Grant Number TF0A0388 Bank Name: First Community Bank Branch Name: Kimathi Branch, Nairobi Bank Account Number: 001248804 Amount Part I US$ 1. Cumulative receipts to end of current reporting period $7,590,042 2. Cumulative expenditures to end of current reporting period $7,568,473 3. Outstanding advances to be accounted (1-2) $21,569 Part II 4. Opening balance at beginning of reporting period (per Bank statement) $ 160,819 5. Add/Subtract: Cumulative adjustments(opening balance adjustments) 12,776 6. Grants received from the World Bank during current reporting period $ 2,022,443 7. Closing balance at end of current reporting (per Bank statement) $ 18,887 8. Outstanding amount of advances to be accounted for (4+5+6-7) $ 2,177,151 9. Total Expenditures reported for current reporting period, including this $ 2,177,151 10. Difference (if any) 9-8 - Remarks None 8.12 Comparatives Where necessary, comparative figures have been adjusted to conform with changes in presentation in the current year. 8.13 Events after Reporting Date There are no subsequent events that have occurred after the reporting period which are either to be disclosed that could materially affect the financial report of the Project or curtails its activities in attaining its objectives. 8.14 Capital Expenditure During the reporting period to 31 December 2020, the Project incurred capital expenditure of USD$127,038. 21 Puntland State of Somalia Second Public Financial Management Capacity Strengthening Project Project Number P151492, Grant Number TF0A388 Auditor’s Report and Financial Report For the Period 1 January 2020 to 31 December 2020 Annex I: Entity Receipts Versus Donor Confirmations Receipts as per Amount Variance Donor Reference Date Received Description Confirmation USD USD USD 28290 07-Mar-20 PFM Direct Payment 165,087 165,087 - 28291 07-Mar-20 PFM FCB Bank 279,628 279,628 - 28567 17-Mar-20 PFM Direct Payment 15,413 15,413 - 29343 28-Apr-20 PFM Direct Payment 19,746 19,746 - 29571 13-May-20 PFM Direct Payment 12,364 12,364 - 29741 26-May-20 PFM FCB Bank 287,591 287,591 - 30039 11-Jun-20 PFM Direct Payment 45,839 45,839 - 30841 25-Jul-20 PFM Direct Payment 24,667 24,667 - 31507 26-Aug-20 PFM FCB Bank 182,849 182,849 - 31565 27-Aug-20 PFM Direct Payment 18,515 18,515 - 32013 16-Sep-20 PFM Direct Payment 24,667 24,667 - 32376 30-Sep-20 PFM FCB Bank 196,254 196,254 - 32393 01-Oct-20 PFM Direct Payment 42,014 42,014 - 32901 20-Oct-20 PFM Direct Payment 3,751 3,751 - 33016 24-Oct-20 PFM Direct Payment 6,212 6,212 - 33120 28-Oct-20 PFM FCB Bank 124,682 124,682 - 33931 26-Nov-20 PFM FCB Bank 196,351 196,351 - 33933 26-Nov-20 PFM Direct Payment 26,572 26,572 - 34145 01-Dec-20 PFM Direct Payment 12,364 12,364 - 34375 10-Dec-20 PFM Direct Payment 24,667 24,667 - 34376 10-Dec-20 PFM Direct Payment 47,279 47,279 - 34583 19-Dec-20 PFM Direct Payment 30,531 30,531 - 34584 19-Dec-20 PFM FCB Bank 182,728 182,728 - 34885 29-Dec-20 PFM Direct Payment 27,302 27,302 - 34926 30-Dec-20 PFM Direct Payment 25,370 25,370 - 2,022,443 2,022,443 - 22 Puntland State of Somalia Second Public Financial Management Capacity Strengthening Project Project Number P151492, Grant Number TF0A388 Auditor’s Report and Financial Report For the Period 1 January 2020 to 31 December 2020 Annex II: Comparison of audited amounts and the reported amounts to the donors Date Submitted to Amount Period World Bank US$ January to March 2020 15 May 2020 449,172 April to June 2020 15 August 2020 432,318 July to September 2020 14 November 2020 383,286 October to December 2020 14 February 2021 912,375 Total Expenditure reported to World Bank 2,177,151 Expenditure reported in the trial balance 2,177,151 Variance - 23 Puntland State of Somalia Second Public Financial Management Capacity Strengthening Project Project Number P151492, Grant Number TF0A388 Auditor’s Report and Financial Report For the Period 1 January 2020 to 31 December 2020 ANNEX III Confirmation between Application for Withdrawals and Receipts from the World Bank Withdrawal Actual Date of Application Date of Application Receipt Difference Application Number Receipt Amount Amount US$ US$ US$ 01/03/2020 PUNT70 165,087 01/03/2020 165,087 - 25/02/2020 PUNT68 279,628 02/03/2020 279,628 - 12/03/2020 PUNT69 15,413 06/03/2020 15,413 - 23/04/2020 PUNT71 19,746 04/04/2020 19,746 - 09/05/2020 PUNT73 12,364 04/05/2020 12,364 - 19/05/2020 PUNT74 287,591 05/05/2020 287,591 - 08/06/2020 PUNT75 45,839 02/06/2020 45,839 - 18/07/2020 PUNT76 24,667 02/07/2020 24,667 - 20/08/2020 PUNT78 182,849 04/08/2020 182,849 - 21/08/2020 PUNT77A 18,515 05/08/2020 18,515 - 12/09/2020 PUNT79 24,667 03/09/2020 24,667 - 27/09/2020 PUNT81 196,254 04/09/2020 196,254 - 22/09/2020 PUNT80 42,014 01/10/2020 42,014 - 14/10/2020 PUNT82 3,751 04/10/2020 3,751 - 20/10/2020 PUNT83 6,212 06/10/2020 6,212 - 24/10/2020 PUNT84 124,682 09/10/2020 124,682 - 22/11/2020 PUNT85 196,351 02/11/2020 196,351 - 22/11/2020 PUNT87 26,572 03/11/2020 26,572 - 22/11/2020 PUNT88 12,364 05/12/2020 12,364 - 03/12/2020 PUNT86A 24,667 05/12/2020 24,667 - 26/11/2020 PUNT89 47,279 06/12/2020 47,279 - 08/11/2020 PUNT90 30,531 10/12/2020 30,531 - 17/12/2020 PUNT91 182,728 11/12/2020 182,728 - 23/12/2020 PUNT92 27,302 14/12/2020 27,302 - 23/12/2020 PUNT93 15/12/2020 25,370 - 25,370 Total 2,022,443 2,022,443 - 24 Puntland State of Somalia Second Public Financial Management Capacity Strengthening Project Project Number P151492, Grant Number TF0A388 Auditor’s Report and Financial Report For the Period 1 January 2020 to 31 December 2020 Annex IV List of fixed assets acquired in 2020 Acquisition Value Asset ID Serial Number Item Custodian Source Status Region Date US$ 2879 Compact Mobile filing system Regional PFM 14/03/2020 Good Condition BARI 3,900 2872 Compact Mobile filing system Regional PFM 14/03/2020 Good Condition BARI 3,900 3217 PC1MP24A Lenovo Laptop Mohamed yusuf PFM 21/11/2020 Good Condition BARI 1,580 3293 CNCRN9Q7P3 printer hp color Bosaso Custom PFM 31/12/2020 Good Condition BARI 495 3294 CNCRN9Q7PY printer hp color Bosaso Custom PFM 31/12/2020 Good Condition BARI 495 3282 MP1RF4K2 Lenovo Desktop Bosaso Custom PFM 31/12/2020 Good Condition BARI 1,250 3283 MP1RETGQ Lenovo Desktop Bosaso Custom PFM 31/12/2020 Good Condition BARI 1,250 3284 MP1REXF7 Lenovo Laptop Bosaso Custom PFM 31/12/2020 Good Condition BARI 1,250 3285 MP1RESQK Lenovo Laptop Bosaso Custom PFM 31/12/2020 Good Condition BARI 1,250 3286 MP1RESSB Lenovo Desktop Bosaso Custom PFM 31/12/2020 Good Condition BARI 1,250 3287 MP1RESQY Lenovo Desktop Bosaso Custom PFM 31/12/2020 Good Condition BARI 1,250 3023 YLOOMPZV LENOVO Desktop V53OS-07ICR Bari MoF PFM 15/01/2020 Good Condition BARI 765 3016 YLOOMQ01 LENOVO Desktop V53OS-07ICR Bari MOF PFM 15/01/2020 Good Condition BARI 765 3017 YLOOMQ08 LENOVO Desktop V53OS-07ICR Bari MoF PFM 15/01/2020 Good Condition BARI 765 3009 YLOOMQOH LENOVO Desktop V53OS-07ICR Revenue PFM 15/01/2020 Good Condition BARI 765 3012 YLOOMQ0E LENOVO Desktop V53OS-07ICR Revenue PFM 15/01/2020 Good Condition BARI 765 3010 YLOOMPZN LENOVO Desktop V53OS-07ICR Bari MoF PFM 15/01/2020 Good Condition BARI 765 2884 Compact Mobile filing system Regional PFM 14/03/2020 Good Condition GARDAFUU 3,900 2877 Compact Mobile filing system Regional PFM 14/03/2020 Good Condition GARDAFUU 3,900 2881 Compact Mobile filing system Regional PFM 14/03/2020 Good Condition KARKAAR 3,900 2874 Compact Mobile filing system Regional PFM 14/03/2020 Good Condition KARKAAR 3,900 Compact Mobile filing 2880 Regional PFM 14/03/2020 Good Condition MUDUG 3,900 system 25 Puntland State of Somalia Second Public Financial Management Capacity Strengthening Project Project Number P151492, Grant Number TF0A388 Auditor’s Report and Financial Report For the Period 1 January 2020 to 31 December 2020 Acquisition Value Asset ID Serial Number Item Custodian Source Status Region Date US$ Compact Mobile filing 2873 Regional PFM 14/03/2020 Good Condition MUDUG 3,900 system 3024 YLOOMPZS LENOVO Desktop V53OS-07ICR Revenue PFM 15/01/2020 Good Condition MUDUG 765 3025 YLOOMPZZ LENOVO Desktop V53OS-07ICR Revenue PFM 15/01/2020 Good Condition MUDUG 765 3220 PC1MP24H Lenovo Laptop Mohamud Shirre PFM 21/11/2020 Good Condition NUGAAL 1,580 2878 Compact Mobile filing system Regional PFM 14/03/2020 Good Condition NUGAAL 3,900 2871 Compact Mobile filing system Regional PFM 14/03/2020 Good Condition NUGAAL 3,900 3221 PC1MP24N Lenovo Laptop Ali Farhan PFM 21/11/2020 Good Condition NUGAAL 1,580 2974 Laptop DG of MoF PFM 16/07/2020 Good Condition NUGAAL 1,564 3218 PC1MP24K Lenovo Laptop Badirahman DG PFM 21/11/2020 Good Condition NUGAAL 1,580 3219 PC1MP24L Lenovo Laptop Farah Jama PFM 21/11/2020 Good Condition NUGAAL 1,580 3214 PC1MP249 Lenovo Laptop Ahmed salah PFM 21/11/2020 Good Condition NUGAAL 1,580 3215 PC1MP247 Lenovo Laptop Qarjab HR Office PFM 21/11/2020 Good Condition NUGAAL 1,580 3075 MP1GV3K3 Laptop Abdisamed Awed PFM 15/01/2020 Good Condition NUGAAL 1,895 3077 MP1HTOZ9 Laptop nuurani PFM 15/01/2020 Good Condition NUGAAL 1,895 3078 Laptop wasiir ku PFM 15/01/2020 Good Condition NUGAAL 1,895 3073 PF1CAXKU Laptop abdulkadir liban PFM 15/01/2020 Good Condition NUGAAL 1,895 3074 MP1HTOZ8 Laptop Abshir M Ashir PFM 15/01/2020 Good Condition NUGAAL 1,895 3020 YLOOMQ0Q LENOVO Desktop V53OS-07ICR regional office PFM 15/01/2020 Good Condition NUGAAL 765 3019 YLOOMQ0R LENOVO Desktop V53OS-07ICR Revenue PFM 15/01/2020 Good Condition NUGAAL 765 3007 YL00MQOJ LENOVO Desktop V53OS-07ICR health PFM 15/01/2020 Good Condition NUGAAL 765 2990 HAOZA2SK LENOVA Tablet tab M 10 Revenue PFM 15/01/2020 Good Condition NUGAAL 340 2991 HAOKG2MP LENOVA Tablet tab M 10 Revenue PFM 15/01/2020 Good Condition NUGAAL 340 2992 HAOKH579 LENOVA Tablet tab M 10 Revenue PFM 15/01/2020 Good Condition NUGAAL 340 2993 HAOKN21V LENOVA Tablet tab M 10 Revenue PFM 15/01/2020 Good Condition NUGAAL 340 2983 HAOZKP8F LENOVA Tablet tab M 10 Revenue PFM 15/01/2020 Good Condition NUGAAL 340 26 Puntland State of Somalia Second Public Financial Management Capacity Strengthening Project Project Number P151492, Grant Number TF0A388 Auditor’s Report and Financial Report For the Period 1 January 2020 to 31 December 2020 Acquisition Value Asset ID Serial Number Item Custodian Source Status Region Date US$ 2984 HAOZ9MLJ LENOVA Tablet tab M 10 Revenue PFM 15/01/2020 Good Condition NUGAAL 340 2985 HAOZK67M LENOVA Tablet tab M 10 Revenue PFM 15/01/2020 Good Condition NUGAAL 340 2986 HAOLCXY4 LENOVA Tablet tab M 10 Revenue PFM 15/01/2020 Good Condition NUGAAL 340 2987 HAOYDRYN LENOVA Tablet tab M 10 Revenue PFM 15/01/2020 Good Condition NUGAAL 340 2979 HAOZ9MCG LENOVA Tablet tab M 10 Revenue PFM 15/01/2020 Good Condition NUGAAL 340 2980 HAOZKP6D LENOVA Tablet tab M 10 Revenue PFM 15/01/2020 Good Condition NUGAAL 340 2981 HAOZK9RD LENOVA Tablet tab M 10 Revenue PFM 15/12/2020 Good Condition NUGAAL 340 2982 HAOZKXUB LENOVA Tablet tab M 10 Revenue PFM 15/01/2020 Good Condition NUGAAL 340 3014 YLOOMQ03 LENOVO Desktop V53OS-07ICR Regional office PFM 15/01/2020 Good Condition NUGAAL 765 2750 Passport reader Inland Revenue PFM 01/03/2020 Good Condition NUGAAL 680 3006 YL00MPZY LENOVO Desktop V53OS-07ICR revenue PFM 15/01/2020 Good Condition NUGAAL 765 3216 PC1MP24B Lenovo Laptop Cagey Internal PFM 21/11/2020 Good Condition NUGAAL 1,580 3021 YLOOMQ0B LENOVO Desktop V53OS-07ICR Tender board PFM 15/01/2020 Good Condition NUGAAL 765 3225 CN9C6A10FH HP ScanJet Pro2500 Office Of PFM 19/11/2020 Good Condition NUGAAL 300 3226 CN9C6A10FC HP ScanJet Pro2500 Office of PFM 19/11/2020 Good Condition NUGAAL 300 3207 C0260425 ID Card Printer Health PFM 19/11/2020 Good Condition NUGAAL 11,080 3210 CN9C6A10FC HP ScanJet Pro2500 office of AG PFM 19/11/2020 Good Condition NUGAAL 300 3222 CN9CDA10Z1 HP ScanJet Pro2500 PFM Office PFM 21/11/2020 Good Condition NUGAAL 240 3223 CN9CDA10ZG HP ScanJet Pro2500 PFM Office PFM 21/11/2020 Good Condition NUGAAL 240 3211 PC1MP24E Lenovo Laptop PFM Office PFM 21/11/2020 Good Condition NUGAAL 1,580 3212 PC1MP246 Lenovo Laptop Ahmed Ali Farah PFM 21/11/2020 Good Condition NUGAAL 1,580 3213 PC1MP24D Lenovo Laptop Hassan biinge PFM 21/11/2020 Good Condition NUGAAL 1,580 2965 Excutive chair (3) PFM PFM 28/03/2020 Good Condition NUGAAL 180 2957 Cup Board PFM PFM 28/03/2020 Good Condition NUGAAL 140 2958 Cup Board PFM PFM 28/03/2020 Good Condition NUGAAL 140 27 Puntland State of Somalia Second Public Financial Management Capacity Strengthening Project Project Number P151492, Grant Number TF0A388 Auditor’s Report and Financial Report For the Period 1 January 2020 to 31 December 2020 Acquisition Value Asset ID Serial Number Item Custodian Source Status Region Date US$ 2960 Office Table 1.2 PFM PFM 28/03/2020 Good Condition NUGAAL 70 2961 Office Table 1.2 PFM PFM 28/03/2020 Good Condition NUGAAL 70 2963 Office Table 1.2 PFM PFM 28/03/2020 Good Condition NUGAAL 70 2964 Desk L-Shape PFM PFM 28/03/2020 Good Condition NUGAAL 280 2948 Visitor chair PFM PFM 28/03/2020 Good Condition NUGAAL 90 2949 Visitor chair PFM PFM 28/03/2020 Good Condition NUGAAL 90 2951 Visitor chair PFM PFM 28/03/2020 Good Condition NUGAAL 90 2952 Visitor chair PFM PFM 28/03/2020 Good Condition NUGAAL 90 2953 Visitor chair PFM PFM 28/03/2020 Good Condition NUGAAL 90 2955 Cup Board PFM PFM 28/03/2020 Good Condition NUGAAL 140 2940 Visitor chair PFM PFM 28/03/2020 Good Condition NUGAAL 90 2942 Visitor chair PFM PFM 28/03/2020 Good Condition NUGAAL 90 2943 Visitor chair PFM PFM 28/03/2020 Good Condition NUGAAL 90 2945 Visitor chair PFM PFM 28/03/2020 Good Condition NUGAAL 90 2946 Visitor chair PFM PFM 28/03/2020 Good Condition NUGAAL 90 2947 Visitor chair PFM PFM 28/03/2020 Good Condition NUGAAL 90 2937 N/A Meeting Table PFM PFM 28/03/2020 Good Condition NUGAAL 499 2938 Visitor chair PFM PFM 28/03/2020 Good Condition NUGAAL 90 3011 YLOOMQ02 LENOVO Desktop V53OS-07ICR Health PFM 15/01/2020 Good Condition NUGAAL 765 3022 YLOOMQ04 LENOVO Desktop V53OS-07ICR MOPIC PFM 15/01/2020 Good Condition NUGAAL 765 2882 Compact Mobile filing system regional PFM 14/03/2020 Good Condition SANAAG 3,900 2875 Compact Mobile filing system regional PFM 14/03/2020 Good Condition SANAAG 3,900 3015 YLOOMQ07 LENOVO Desktop V53OS-07ICR Sanaag MoF PFM 15/01/2020 Good Condition SANAAG 765 3018 YLOOMPZX LENOVO Desktop V53OS-07ICR Revenue PFM 15/01/2020 Good Condition SANAAG 765 3008 YLOOMQOG LENOVO Desktop V53OS-07ICR Revenue PFM 15/01/2020 Good Condition SANAAG 765 28 Puntland State of Somalia Second Public Financial Management Capacity Strengthening Project Project Number P151492, Grant Number TF0A388 Auditor’s Report and Financial Report For the Period 1 January 2020 to 31 December 2020 Acquisition Value Asset ID Serial Number Item Custodian Source Status Region Date US$ 3013 YLOOMPZT LENOVO Desktop V53OS-07ICR Sanaag PFM 15/01/2020 Good Condition SANAAG 765 2883 Compact Mobile filing system regional PFM 14/03/2020 Good Condition SOOL 3,900 2876 Compact Mobile filing system regional PFM 14/03/2020 Good Condition SOOL 3,900 Total 127,038 29