FINANCIAL AND SYSTEMS AUDIT OF THE CARIBBEAN REGIONAL COMMUNICATION INFRASTRUCTURE PROGRAMME (CARCIP) CREDIT NUMBER 5118-VC FEBRUARY 2019 Final Report on Financial and Systems Audit of the Caribbean Regional Communication Infrastructure Programme (CARCIP) TABLE OF CONTENTS INDEPENDENT AUDITORS’ REPORT – FINANCIAL AUDIT ............................................. 3 INDEPENDENT AUDITORS’ REPORT – SYSTEMS AUDIT ............................................... 5 SUMMARY OF FINDINGS ................................................................................................... 7 1. ENGAGEMENT CONTEXT ...................................................................................... 9 2. AUDIT FINDINGS ................................................................................................... 12 3. SPECIFIC MATTERS ............................................................................................. 23 ANNEXES .......................................................................................................................... 24 2 Final Report on Financial and Systems Audit of the Caribbean Regional Communication Infrastructure Programme (CARCIP) INDEPENDENT AUDITORS’ REPORT – FINANCIAL AUDIT The Government of St. Vincent and the Grenadines Ministry of Finance, Economic Planning, Sustainable Development and Information Technology Bay Street Kingstown St. Vincent and the Grenadines We have audited the Financial Report for the Caribbean Regional Communication Infrastructure Programme for the period from 1 January 2017 to 31 July 2018 which is set out in Annex I of this report. This report is made to the Government of St. Vincent and the Grenadines in accordance with our Terms of Reference. Respective Responsibilities of the Entity's management and auditors The preparation of the Financial Report is the responsibility of the Entity’s management. Our responsibility is to express an opinion on the Financial Report based on our audit, which is a financial audit performed in the context of compliance with the applicable Agreement Terms and Conditions for the Project. We conducted our audit in accordance with the International Standards on Auditing insofar as these standards can be usefully applied to this financial audit in its specific compliance context. These standards require that we comply with ethical requirements and that we plan and perform the audit to obtain reasonable assurance about whether the Financial Report is free from material misstatement. An audit includes examining evidence supporting the amounts and disclosures in the above mentioned financial report. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the Financial Report. The objective of this financial audit, in accordance with our Terms of Reference, was to enable us to express an opinion on whether Financial Report of the Project, including all relevant Designated Account (DA) reconciliations, the supplementary financial information for the project and the cumulative investments present fairly, in all material respects, the financial position of the project, the funds received and the disbursements made during the period from 1 January 2017 to 31 July 2018 in accordance with the rules and conditions governing the use of funds as expressed or referred to in the Financing Agreement between the International Development Association and the Government of St. Vincent and the Grenadines. We believe that our audit provides a reasonable basis for our opinion. Scope of the audit The scope of our audit is set out in the Terms of Reference as noted in Section 1 of our report. We have reported all our findings regardless of the amount involved. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion. Basis for Qualified Opinion We refer to our financial findings totalling XCD 418,511.26 as set out in Section 1 (Summary of Findings) of our report. These findings represent 15% of the total expenditure amount reported for the Project. We consider these financial findings material in the context of our audit. Qualified Opinion In our opinion, except for the effects of the matters referred to in the preceding 'basis for qualified opinion' paragraph the Financial Report of the Project, including all relevant Designated Account (DA) reconciliations, the supplementary financial information for the project and the cumulative investments present fairly, in all material respects, the financial position of the project, the funds received and the disbursements made during the period from 1 January 2017 to 31 July 2018 in accordance with the rules and conditions governing the use of funds as expressed or referred to in the Financing Agreement between the International Development Association and the Government of St. Vincent and the Grenadines. 3 Final Report on Financial and Systems Audit of the Caribbean Regional Communication Infrastructure Programme (CARCIP) This report is intended solely for the information and use of the Government of St. Vincent and the Grenadines. Tim Woodward 150 Aldersgate Street Partner London Moore Stephens LLP EC1A 4AB 7 February 2019 4 Final Report on Financial and Systems Audit of the Caribbean Regional Communication Infrastructure Programme (CARCIP) INDEPENDENT AUDITORS’ REPORT – SYSTEMS AUDIT The Government of St. Vincent and the Grenadines Ministry of Finance, Economic Planning, Sustainable Development and Information Technology Bay Street Kingstown St. Vincent and the Grenadines We have audited the Internal Control System set up and operated by the Entity for the Caribbean Regional Communication Infrastructure Programme and for the purpose of managing risks to the achievement of the objectives of the Project. These risks include risks to the Project funding provided by the International Development Association not being used in conformity with the applicable Financing Agreement. This systems audit covers the design and operating effectiveness of the Internal Control System in the period from 1 January 2017 to 31 July 2018. Our findings are set out in the relevant sections of our report, which is made solely to the Government of St. Vincent and the Grenadines in order to gain assurance that risks to the achievement of the objectives of the Project are properly managed and controlled. Respective Responsibilities of the Entity's management and auditors The Entity’s management are responsible for the design, implementation and effective operation of the Internal Control System, including the management and control of risks to the achievement of the objectives to the Project. Our responsibility is to audit the Internal Control System and to report our findings to the Government of St. Vincent and the Grenadines in accordance with the Terms of Reference for the audit engagement. These specify that we should carry out our work in accordance with International Standards on Auditing insofar as these standards can be applied in the specific context of a systems audit intended to provide assurance that risks to the achievement of the objectives of the Project are properly managed and controlled. These standards require us to observe applicable ethical standards in the conduct of our work. Scope of the audit The scope of our audit is set out in our Terms of Reference as noted in Section 1 of our report. It includes an assessment of the main risks to the achievement of the objectives of the Project including risks to the Project funding provided not being used in conformity with the applicable Contractual Conditions and the risk of error, irregularities and fraud with regard to Project funding. The scope of our audit includes an assessment of whether the design of the Internal Control System sufficiently mitigates those risks and whether it is operating effectively. Our work is designed to concentrate only on the key internal controls of the Entity and specifically those relating to the Project which are designed to prevent and detect material errors, irregularities or fraud with regard to the Project funding. For the purpose of determining what is a material weakness or deficiency in the Internal Control System we have assessed whether the absence or failure of a control or a series of controls results in a significant risk of material error, irregularity or fraud in the use of the Project funds provided by the International Development Association. Accordingly, our findings cannot be relied upon to disclose every weakness in internal control that may exist at the Entity or Project level. Additionally, although our audit scope includes consideration of qualitative as well as quantitative factors, it is not a performance audit and therefore concentrates on financial internal controls rather than operational controls. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion. 5 Final Report on Financial and Systems Audit of the Caribbean Regional Communication Infrastructure Programme (CARCIP) Basis for a qualified opinion We refer to our system audit findings as set out in Section 2.2 of our report. We consider that these weaknesses do pose a significant risk to the achievement of the objectives of the Project. We consider these systems audit findings to be material in the context of our audit. Qualified Opinion In our opinion, except for the effects of the matters referred to in the preceding 'basis for qualified opinion' paragraph, the Internal Control System set up and operated by the Entity for the purpose of managing material risks to the achievement of the objectives of the Project, was suitably designed and operated effectively in the period from 1 January 2017 to 31 July 2018. This report is intended solely for the information and use of the Government of St. Vincent and the Grenadines. Tim Woodward 150 Aldersgate Street Partner London Moore Stephens LLP EC1A 4AB 7 February 2019 6 Final Report on Financial and Systems Audit of the Caribbean Regional Communication Infrastructure Programme (CARCIP) SUMMARY OF FINDINGS Based on the work we have carried out we have identified a number of issues. A comprehensive list of these issues and weaknesses is given in Section 2. We provide below a summary of issues identified: Financial Audit Findings Further Amount Response from Ministry of comments No. Title Detail of recommendation (XCD) Economic Planning from Moore Stephens It is recommended that the Grants Manager reviews the procurement documentation Central Technology Centre was Lack of evidence submitted by the Grantee presented in the proposal of SVG that procurement and checks if all the Institutes of Architect as a single 1 procedures were 80,958.71 required procurement entity that can provide the necessary carried out by procedures were carried out training which was approved at the the Grantees by the entity. Only then the national steering committee. Ministry of Economic Planning should make any payment. Two additional reports which were submitted by NCTI would reduce the balancing outstanding to XCD 294,165.64. For the payment to Advances It is recommended that only Maurice John, an advance was paid 2 claimed as 294,165.64 actual expenditure is prior to delivery of service and the expenditure charged to the project. balance paid upon completion of the service. The service was performed within the period covered by the grantees contract and the financing agreement covering CARCIP While catering service is procured based on an estimate of the number of invitees that may attend, even With regard to the meeting though no one shows up for the refreshments, we consultation, the services of the recommend that CARCIP caterer still has to be paid for. It should discuss with venues should also be noted that due to the who provide refreshments nature of the meeting – citizen for meetings whether there engagement – it was not possible to Costs not can be a flexible policy. In determine the level of participation in 3 relevant to the 40,012.78 addition they could advance. Further, the costs not project communicate with potential relevant to the project relate to the attendees prior to the case where the acceptance meeting to stress the certificate said Regional Disaster importance that they only Vulnerability Reduction project RSVP yes when they are instead of CARCIP. The error was sure that they are able to due to cutting and pasting. The attend. goods were indeed related to the CARIP project. The Acceptance Certificate has since been corrected and resubmitted to the auditors. Costs not We recommend that only relating to the costs which are incurred 4 period covered 3,374.13 during the project period are by the Financing included within the financial Agreement report. Total 418,511.26 7 Final Report on Financial and Systems Audit of the Caribbean Regional Communication Infrastructure Programme (CARCIP) Systems Audit Findings Response Further from comments No. Title Priority Detail of recommendation Ministry of from Moore Economic Stephens Planning It is recommended that for each Deficiencies in the procurement process a file is open administrative which shall include an index for all 1 organisation of 1 the relevant documentation procurement contained in the file. This documentation documentation should also be referenced. It is recommended that for each Deficiencies in the Grantee process a file is open administrative which shall include an index for all 2 organisation of 1 the relevant documentation Grantee contained in the file. This documentation documentation should also be referenced. It is recommended that each Grantee complies with the conditions set out in the Grant Agreement. In that sense the Lack of evidence that Grants Manager should review the procurement documentation sent by the 3 procedures were 1 Grantee and check if all the carried out by the required procurement procedures Grantees were carried out by the entity. Only then the Ministry of Economic Planning should make any payment. We recommend that the Ministry performs a three-way match prior to paying an invoice including the No delivery note for invoice, the delivery note and the 4 1 the products acquired Purchase Order. If a Delivery Order is not received then the payment should not go ahead. 8 Final Report on Financial and Systems Audit of the Caribbean Regional Communication Infrastructure Programme (CARCIP) 1. ENGAGEMENT CONTEXT 1.1 Introduction The financial and systems audit of the Caribbean Regional Communication Infrastructure Programme (CARCIP) for the period from 1 January 2017 to 31 July 2018 was carried out from 2 -9 November 2018 by Dora Chambers and Daniela Gianneschi. The audit was performed in accordance with the terms of reference prepared by the Ministry of Economic Planning in Kingstown. 1.2 Background As part of the National ICT (Information and Communications Technology) Strategy and Action Plan, the Government of St Vincent and the Grenadines has commenced the implementation of the Caribbean Regional Communication Infrastructure Programme (CARCIP). This project is funded by the International Development Association and is designed to (i) bridge the ICT infrastructure gaps at the national and regional levels, (ii) stimulate growth of the IT and IT-Enabled Services sector and (iii) create an enabling environment that fosters competitive access to ICT infrastructure and the IT/IT-Enabled Services sector and other applications industry. The project consists of three components:  Regional Connectivity Infrastructure;  ICT-led Innovation; and  Implementation Support. The duration of the project was initially of five years, however, and as per letter from the World Bank dated 24 May 2016 the implementation period was extended to six and a half years, being the closing date 1 August 2018. A subsequent amendment was then signed on 29 June 2018 which extended the project up until 1 February 2020. The estimated cost of the Programme is USD 6 million. 1.3 Audit Objectives As set out in the terms of reference, the objective of our audit assignment was:  To express a professional opinion on the financial position and performance of the project at the end of the period audited and to report on the adequacy of the internal controls. The additional specific objectives of this audit are:  Issue an opinion as to whether the Project financial statements, including all relevant Designated Account (DA) reconciliations, present fairly, in all material respects, the financial position of the Project, the funds received and the disbursements made during the period audited. It should also include the cumulative investments at the end of the period, in accordance with international accounting standards and the requirements of the respective agreements with the Bank.  Issue an opinion on whether the supplementary financial information for the Project is fairly presented, in all material respects.  Issue a report with respect to the adequacy of the internal control structure of the implementing institution in regard to the Project.  For this purpose, the reports are based on an assessment of internal controls, at the mid-year for each auditable year of Project execution. This permits early detection of any internal control issues to provide corrective feedback to the Ministry of Economic Planning prior to the carrying out of the year-end audit. 9 Final Report on Financial and Systems Audit of the Caribbean Regional Communication Infrastructure Programme (CARCIP)  Conduct audit of 100 percent of the expenditure claimed under retroactive financing, and provide separate audit opinion about the eligibility of those expenditures. This final additional specific objective was not applicable as no expenditure was claimed under retroactive financing during the period. 1.4 Audit scope The scope of work of the financial audit covered the expenditure and revenue stated in the Financial Report of the Project for the period from 1 January 2017 to 31 July 2018. The scope of work of the systems audit covered the design and operating effectiveness of the Internal Control System in the period from 1 January 2017 to 31 July 2018. The Internal Control System subject to audit is described in Annex III to this report. The scope of work included specific considerations and procedures which are set out further below:  All Project funds should be used in accordance with the conditions of the relevant financing agreements, with due attention to economy and efficiency, and only for the purposes for which the financing was provided;  Goods and services financed should be procured in accordance with the relevant financing agreement;  The Ministry of Economic Planning should keep all necessary supporting documents, records, and accounts in respect of all Project ventures including expenditures reported via Interim Financial Reports (IFRs) and the Designated Account (DA). Clear linkages should exist between the books of account and reports presented to the Bank;  Where a DA has been used, it should be maintained in accordance with the provisions of the relevant financing agreement;  Conduct audit of all expenditures claimed under retroactive financing, and provide separate audit opinion about the eligibility of those expenditures; and  The Project accounts should be prepared in accordance with International Accounting Standards consistently applied, and give a true and fair view of the financial situation of the Project at the end of the period and of the resources and expenditures for the year ended on that date. In carrying out the audit, we reviewed documentation at the offices of the Ministry of Economic Planning, St Vincent, in order to assess their accounting, internal control and management procedures. Specifically, the work we carried out included the following specific considerations and procedures: Obtaining an understanding of the engagement context In advance of the audit fieldwork, we reviewed the terms of reference and contacted the entity being audited to obtain key financial and other data required in order to assist us in the assessment of risk and audit planning. The opening meeting for the audit took place on 2 November 2018 at the premises of the Economic Planning Division in Kingstown, St Vincent. The purpose of the opening meeting was to clarify the objectives of the audit to the contractor, discuss the background of the contracted activities and discuss any initial issues raised by the auditor or contractor relating to the organisation and scope of the audit. The following people were in attendance: Nerissa Pitt Project Accountant, Ministry of Economic Planning Roxanne John Project Coordinator, Ministry of Economic Planning Janelle Quow Procurement Manager, Ministry of Economic Planning Dora Chambers Team Leader, Moore Stephens LLP 10 Final Report on Financial and Systems Audit of the Caribbean Regional Communication Infrastructure Programme (CARCIP) Risk assessment and Materiality We assessed the risks of material errors or misstatements in the expenditure and revenue stated in the Financial Report, whether caused by error or fraud. Where necessary we designed and performed further audit procedures to address risks identified. Sampling and other means of selecting items for testing We tested 100% of expenditure. Obtaining Evidence regarding Design of Controls and Tests of controls We designed and performed audit procedures, the nature, timing and extent of which were tailored to the assessed risks of material errors. We obtained a description of, and carried out a review of, the accounting procedures relevant to the Project. Based on our understanding of the accounting systems in place we undertook substantive testing of the expenditure claimed. We checked compliance with contractual rules as expressed or referred to in the Financing Agreement and the Project Implementation Manual. We checked individual amounts claimed against original supporting invoices and documentation. Substantive procedures The fieldwork was performed from 2-9 November 2018. Specifically, the work carried out included the following: (a) Documentation, filing and record keeping for Project expenditure and income  We ensured that the project operated an organised system for filing original numbered invoices and receipts which are easily retrievable and specific to the project. (b) Eligibility of project expenditure and Income  We ensured that (apart from where reported to the contrary within this report) all expenditure and income had been incurred in accordance with the Financing Agreement – for example that it had been authorised by the appropriate member of staff, that appropriate segregation of duties had been maintained and that all relevant procedures had been followed.  We vouched expenditure amounts to invoices, bank statements, contracts or similar supporting documentation, including evidence of outputs. This included testing whether the expenditure had been generated within the contracted project period.  We confirmed that expenditure was consistent with the pursuit of project objectives as set out in the Financing Agreement, and that the project budget had not been exceeded. (c) Accounting / Financial Reporting  We reconciled the financial report for the period concerned to data drawn from the accounting system of the Central Planning Division, to confirm the completeness, existence and accuracy of expenditure reported. (d) Procurement  Through a review of tender files and supporting documents, we confirmed that the procurement procedures had been correctly followed and that the tender process was fair, transparent and value for money was obtained. (e) Cash and bank management (treasury)  Banking arrangements were in place to effectively manage the receipt of funds and Designed Account reconciliations had been prepared. (f) Grantees  We ensured that the Grantees’ selection process was in accordance to the Business Incubation and Training Grants Manual. 11 Final Report on Financial and Systems Audit of the Caribbean Regional Communication Infrastructure Programme (CARCIP) 2. AUDIT FINDINGS 2.1 Financial Audit Findings Finding n°: 1 Title: Lack of evidence that procurement procedures were carried out by the Grantees Compliance issue: Incorrect procurement procedure applied Observation and Analysis: Section 2.05 (Eligible Expenditures) of ‘General Conditions for Credits and Grants’ states: ‘…(a) the payment is for the financing of the reasonable cost of goods, works or services required for the Project…’ Also the Grant Agreements signed between the Government of St. Vincent and the Grenadines and the Grantees state the following: ‘For any expenditure exceeding XCD $5,000, the Recipient shall source three quotations before making the purchase, using the shopping template to be provided by the contracting authority. The purchase shall be made from the supplier with the lowest responsive price. Expenditure less than XCD $5,000 will be procured using the request for drawdown of grant funds, signed by the Project coordinator’. In addition the “Business Incubation and Training Grants Manual” states in its section 2.2.5 related to Incubation Grants that “Goods and services will be procured by the Grantee. All Single purchases must be supported by at least three quotations. All three (3) quotations along with the application for payment must be submitted to the Grant Manager of CARCIP. Single source for any amount MUST require the approval of the CPD with recommendation from the CARCIP Project Coordinator”. Section 3.2.7 of the same Manual relates to Training Grants and states that “Goods and services as it relates to training grants will be procured by the Grantee. All Single purchases MUST be supported by at least three (3) quotations. All three (3) quotations along with the application for payment must be submitted to the Grant Manager of CARCIP. Single Source for any amount should require the approval of the CPD with recommendation from the CARCIP Project Coordinator”. We have analysed the procurement documentation provided by the Grantees to the Grants Manager and noted that there was no evidence that the Grantees requested and obtained at least 3 quotations. We could obtain neither the invitations to quote that were allegedly sent to the suppliers/service providers and sometimes we could not obtain the quotes that might have been received (just the quote of the successful bidder was available). A list of the transactions reviewed is shown below: Date Reference Transaction Description XCD USD 4/27/17 70/2017 Central Technology Centre Ltd - Payment for providing 2 80,958.71 30,116.33 weeks of training to Architects and reimbursement of airfare and accommodation costs as per contract with SVG Institute of Architects Total 80,958.71 30,116.33 We consider the amount of XCD 80,958.71 to be ineligible. Amount: XCD 80,958.71 Recommendation: 12 Final Report on Financial and Systems Audit of the Caribbean Regional Communication Infrastructure Programme (CARCIP) It is recommended that the Grants Manager reviews the procurement documentation submitted by the Grantee and check if all the required procurement procedures were carried out by the entity. Only then the Central Planning Division should make any payment. Comments from the Entity: For greenfinger, all of the letters of invitation to quotes were made available to the auditors which is evidence that more than three requests for suppliers to provide quotation were sent out . Procumbent documents for the third finding for contract valued at XCD 55,000.00 were shared with the auditors. Central Technology Centre was presented in the proposal of SVG Institutes of Architect as a single entity that can provide the necessary training which was approved at the national steering committee. Further comments from the auditor: The finding was subsequently amended. 13 Final Report on Financial and Systems Audit of the Caribbean Regional Communication Infrastructure Programme (CARCIP) Finding n°: 2 Title: Advances claimed as expenditure Compliance issue: Expenditure not incurred Observation and Analysis: Section 2.05 (Eligible Expenditures) of ‘General Conditions for Credits and Grants’ states: ‘…(a) the payment is for the financing of the reasonable cost of goods, works or services required for the Project…’ We noted that in the financial report advances to the Grantee NCTI were included as expenditure. View details below: Transaction Transaction Date Reference Trans Description amount amount XCD USD National centre of Technologic - Advance for Incubation for 3/3/17 29/2017 31,870.00 11,855.52 Quarter 1 of 2017 National centre of Technologic - Advance for Training for 3/3/17 29/2017 175,000.00 65,099.32 Quarter 1 of 2017 National centre of Technologic - Advance for quarter 2 of 10/24/17 149/2017 100,000.00 37,199.61 2017 National centre of Technologic - Advance for quarter 2 of 10/24/17 149/2017 150,000.00 55,799.42 2017 Maurice John - Advance payment for social media 3/5/18 21/2018 marketing consultancy for 3 months on behalf of Konservi, 1,200.00 446.40 a CARCIP grantee National centre of Technologic - Advance payment for 4/18/18 34/2018 200,000.00 74,399.23 quarter 2 of 2018 National centre of Technologic - Advance payment for 4/18/18 34/2018 200,000.00 74,399.23 quarter 2 of 2018 Total 856,870.00 318,752.32 The expenditure per the financial reports submitted by NCTI amounts to XCD 562,704.36. Thus, we consider the difference of XCD 294,165.64 to be ineligible (XCD 856,870.00 – XCD 562,704.36). Amount: XCD 294,165.64 Recommendation: It is recommended that only actual expenditure is charged to the project. Comments from the Entity: Two additional reports which were submitted by NCTI would reduce the balancing outstanding to XCD 294,165.64. For the payment to Maurice John, an advance was paid prior to delivery of service and the balance paid upon completion of the service. The service was performed with the period covered by the grantees contract and the financing agreement covering CARCIP Further comments from the auditor: The finding was amended. 14 Final Report on Financial and Systems Audit of the Caribbean Regional Communication Infrastructure Programme (CARCIP) Finding n°: 3 Title: Costs not relevant to the project Compliance issue: Costs not linked to project / not necessary for performance of the project Observation and Analysis: Section 2.05 of the Project Implementation Manual entitled ‘Eligible expenditures’, states that eligible expenditure must satisfy the following requirements:  The payment is for the financing of the reasonable cost of goods, works or services required for the project.’ We noted certain items of expenditure which appeared not to relate to the project or were not necessary for the performance of the project, and therefore we deem that they are questionable. We set out the details of these costs in the table below and describe the reason why we consider the cost to be questionable: Date Reference Description Amount Comments Mavcom - Payment for 36,407.02 We saw an acceptance certificate, which 2/24/17 17/2017 supplying Course was for the Regional Disaster Vulnerability Equipment and software to Reduction project, not the CARCIP project NCTI as per contract so we deem that the goods do not relate to no.21/2017 the project subject to audit. 3/3/17 30/2017 Darron Andrews - 250.00 Darron Andrews - Payment for the provision Payment for the provision of musical entertainment during broadband of musical entertainment consultation at Kingstown on February 16, during broadband 2017. We saw an agenda which showed this consultation at Kingstown was for a cultural presentation which lasted on February 16, 2017 for five minutes. Total 36,657.02 For the following items, we noted that meetings had taken place and that snacks and refreshments had been purchased for these meetings but that the participant lists had been signed by less people than stated in the invoice for the refreshments. We therefore deem that the difference in the two amounts is questionable. Date Reference Description Comments Questionable amount 3/1/17 23/2017 Shaveca Hazell - Payment The participation list only 625.76 for the provision of catering showed 11 signatures whereas services at the broadband the snacks were ordered for 50 consultations held in people at $15 each. Therefore Bequia, February 9, 2017 we deem 39 of the snacks to be unnecessary for the project. 3/3/17 31/2017 Estella Bascombe - The participant list only showed 480.00 Payment for the provision of 18 people whereas 50 snacks catering services at had been bought for $15 each. broadband consultation at Therefore we only deem 18 of Layou on January 31, 2017 the snacks to be unnecessary for the project. 3/17/17 35/2017 Moricia Richards - Payment The participant list only shows 2,250.00 for the provision of catering 50 participants whereas the services at broadband invoice states that snacks for consultations held at 200 were ordered. We deem Kingstown on February 16, that only 50 of the 200 snacks 2017 ordered to be unnecessary. Total 3,355.76 Amount: XCB 40,012.78 15 Final Report on Financial and Systems Audit of the Caribbean Regional Communication Infrastructure Programme (CARCIP) Recommendation: With regard to the meeting refreshments, we recommend that CARCIP should discuss with venues who provide refreshments for meetings whether there can be a flexible policy. In addition they could communicate with potential attendees prior to the meeting to stress the importance that they only RSVP yes when they are sure that they are able to attend. Comments from the Entity: While catering service is procured based on an estimate of the number of invitees that may attend, even though no one shows up for the consultation, the services of the caterer still has to be paid for. It should also be noted that due to the nature of the meeting – citizen engagement – it was not possible to determine the level of participation in advance. Further, in the case where the acceptance certificate said Regional Disaster Vulnerability Reduction project instead of CARCIP, the error was due to cutting and pasting and the goods were indeed related to the CARIP project. The Acceptance Certificate has been corrected and resubmitted to the auditors. Further comments from the auditor: Relating to the catering services, we deem that the project could have tighter controls over the number of attendees as per the recommendation. Regarding the acceptance certificate, there is a risk that this cost may be double funded and therefore based on the documents that we have seen, we cannot say that it is for the purpose of the CARCIP project. 16 Final Report on Financial and Systems Audit of the Caribbean Regional Communication Infrastructure Programme (CARCIP) Finding n°: 4 Title: Costs not relating to the period covered by the Financing Agreement Compliance issue: Costs not relating to the period subject to audit or the grant period Observation and Analysis: According to Section 2.05 Eligible expenditures of the General Conditions to the contract, eligible expenditures must satisfy the following condition: ‘payment is made on or after the date specified in the Financing Agreement, and except as the Association may otherwise agree, is for expenditures incurred prior to the closing date.’ The Financing agreement signed between the World Bank and CARCIP has been extended to last until 1st February 2020, which is seen as the end of the project period. However, during our testing we found that some services were procured for a period of between 4 – 6 years commencing in 2018, going beyond even the extended project period. Grantees should only request reimbursement for products/services procured for the project period. We list the invoice where this instance was found below: Ineligible Account Description Date Reference Trans Description amount Comments Description of cost XCD 3A's Technology, 19/7/2018 65/2018 The invoice for 3A’s a CARCIP Aldous Anderson - 1,769.65 IT services technology services grantee Reimbursement of procured, dated 28/06/2018 amount paid for specifically includes 3 services services name which were paid purchased on domain, upfront for several behalf of 3A's website years beyond the Technology, a hosting, SSL project scope, that is CARCIP grantee. software, specifically: social media managemen 1. Hosting through t, USB Godaddy for 6 redirect for years for 1,639.83 website, XCD Face book ads. 2. Domain name for 5 years for 216.21 XCD 3. Standard SSL for 4 years for 641.24 XCD Given that the remaining project period from the date of invoice to 1st February 2020 is only 19 months, we deem part of the expenditure for the above services ineligible. The ineligible amounts using the pro rata calculation are as follows : Hosting through Godaddy for 4 years for (19/72 x 1,639.83) = 432.73 XCD 1,639.83 - 432.73 = 1207.10 XCD Domain name for 3 years (19/60 x 129.726) = 41.08 XCD 216.21 – 41.08 = 175.13 XCD 17 Final Report on Financial and Systems Audit of the Caribbean Regional Communication Infrastructure Programme (CARCIP) Standard SSL for 2 years (19/48 x 641.24 ) = 253.82 XCD 641.24 - 253.82 = 387.42 Total of ineligible expenditure amounts to 1207.10 + 175.131 + 387.416 = 1,769.65 XCD EkApps – 03/04/201 DA04/201 1,604.48 The invoice covers 4.5 Incubation grants 8 8 PDR Solutions US Renewal of years of web hosting LLC - Payment for web hosting package, 4.5 years renewal of web package for equals 54 months. site hosting 4.5 years However, there is only package on behalf 22 months (April 2018 of EkApps –1st February 2020) remaining in the project period which lasts until 1st February 2020. The total invoice amount should therefore be reimbursed pro rata, to cover only the 22 months relevant to the project. (22/54 x 2,707.55 ) = 1103.08 XCD The amount reimbursed should therefore be 1103.008 XCD. We deem the remaining amount, 1604.48 XCD ineligible as it covers expenditure beyond the end of the project period. 3,374.13 Total Amount: 3,374.13 Recommendation: We recommend that only costs which are incurred during the project period are included within the financial report. Comments from the Entity: The recommendation is noted. 18 Final Report on Financial and Systems Audit of the Caribbean Regional Communication Infrastructure Programme (CARCIP) 2.2 Systems Audit Findings Finding n°: 1 Title: Deficiencies in the administrative organisation of procurement documentation Internal control issue: Expenditure control including related procurement process and procedures Observation and Analysis: The procurement documentation analysed by us had some deficiencies from the point of view of its administrative organization. The main issues noted were the following:  Absence of procurement file with an index referring to the documentation contained;  No numbering / reference of existing documentation. In addition to facilitating the consultation of the various processes, the improvement of its organization will certainly allow compliance with the provisions of section 4 of the Project Implementation Manual, which stipulates that “staff shall keep a record of the procurement process and documentation and maintain a file system for future reference and for auditing purposes. A separate file shall be opened for each approved procurement package and each file shall contain all relevant procurement documents”. Conclusions: We concluded that improvements should be made in terms of filing the procurement documentation. This would reduce the risk of losing or misplacing relevant documentation. Recommendation: It is recommended that for each procurement process a file is opened which includes an index for all the relevant documentation contained in the file. This documentation should also be referenced. Recommendation priority: 1 Comments from the Entity: Recommendation is noted. 19 Final Report on Financial and Systems Audit of the Caribbean Regional Communication Infrastructure Programme (CARCIP) Finding n°: 2 Title: Deficiencies in the administrative organisation of Grantees documentation Internal control issue: Expenditure control Observation and Analysis: The relevant documentation related to the selection process of the Grantees, i.e. application form, eligibility checks, evaluation committee minutes, National Steering Committee minutes and Grant Agreement among others is kept by the Grants Manager and Project Coordinator at the Department of Telecommunications, Science and Technology. At the Ministry of Economic Planning is also kept the Grant Agreement and all the necessary documentation to enable the Division to make payments to the Grantees or payments on their behalf. We noted that the files provided by the Grants Manager and the Ministry of Economic Planning had deficiencies from the point of view of its administrative organization. The main issues noted were the following:  Absence of a Grantee file with an index referring to the documentation contained;  No numbering / reference of existing documentation. We were also not able to see the full documentation relating to the call for proposal for grantees dated April 15 2016. We requested access to and were not provided with the following:  No eligibility checklist for selected grantees  No interview minutes or reports of site visits prior to selecting the grantees We were only able to see one letter informing the grantee of being selected - MHR Holdings. We haven’t been able to see the letters for other grantees who were successful. This is not a financial finding since we have seen a report which summarises the bid evaluation conducted. Conclusions: We concluded that improvements should be made in terms of filing the Grantees documentation. This would contribute to mitigate the risk of losing or misplacing relevant documentation. Recommendation: It is recommended that for each Grantee process a file is open which shall include an index for all the relevant documentation contained in the file. This documentation should also be referenced. Recommendation priority: 1 Comments from the Entity: The eligibility checklist was shared with the auditors. It may have been a misunderstanding as to the checklist requested. The checklist for all applicants is submitted to the auditors. Further, minutes from a CARCIP steering committee meeting was shared with the auditors and this report contained summary of the interviews held with grantees. Each grantee has file that is kept by the Grants manager. Further comments from the auditor: Despite the supporting documents seen, we still deem that the finding stands. The eligibility checklists sent were blank versions and therefore did not provide evidence of the assessment carried out. 20 Final Report on Financial and Systems Audit of the Caribbean Regional Communication Infrastructure Programme (CARCIP) Finding n°: 3 Title: Lack of evidence that procurement procedures were carried out by the Grantees Internal control issue: Expenditure control including related procurement process and procedures Observation and Analysis: As referred in financial audit finding no.1 we have analysed the procurement documentation provided by the Grantees to the Grants Manager and noted that there was no evidence that the Grantees requested and obtained at least 3 quotations as required by the Grant Agreement and the Business Incubation and Training Grants Manual. A bid comparison table was often available but we could obtain neither the invitations to quote that were allegedly sent to the suppliers/service providers nor the quotes that might have been received (just the quote of the successful bidder was available). Conclusions: We concluded that improvements should be made in terms of reviewing the procurement documentation sent by the Grantees in order to assure that all the necessary procedures were carried out by the Grantee and were in compliance with both Grant Agreement and Business Incubation and Training Grants Manual. Recommendation: It is recommended that each Grantee complies with the conditions set out in the Grant Agreement. In that sense the Grants Manager should review the documentation sent by the Grantee and check if all the required procurement procedures were carried out by the entity. Only then the Central Planning Division should approve and make any payment. Recommendation priority: 1 Comments from the Entity: The recommendation is noted. However, the Grants manager had worked closely with the grantees to ensure that the procedures are followed. 21 Final Report on Financial and Systems Audit of the Caribbean Regional Communication Infrastructure Programme (CARCIP) Finding n°: 4 Title: No delivery note for the products acquired Internal control issue: Payment processing Observation and Analysis: We noted that for one item of equipment that was purchased, the Ministry had not received a Delivery note and yet had arranged for payment of the invoice. The transaction to which this applies is set out in the table below: Supplier Description of cost Amount XCD Other comments Four desktop phones 4,800.03 MHR Holding, a grantee handsets and one year of under CARCIP service (July 2017 - June 2018) Recommendation: We recommend that the Ministry performs a three-way match prior to paying an invoice including the invoice, the delivery note and the Purchase Order. If a Delivery Order is not received then the payment should not go ahead. Recommendation priority: 1 Comments from the Entity: Recommendation is noted. 22 Final Report on Financial and Systems Audit of the Caribbean Regional Communication Infrastructure Programme (CARCIP) 3. SPECIFIC MATTERS The additional specific objectives of this audit along with the associated work we performed are as follows:  Issue an opinion as to whether the Project financial statements, including all relevant Designated Account (DA) reconciliations, present fairly, in all material respects, the financial position of the Project, the funds received and the disbursements made during the period audited. It should also include the cumulative investments at the end of the period, in accordance with international accounting standards and the requirements of the respective agreements with the Bank. We reviewed the Designated Account (DA) reconciliations for the period from January 2017 to July 2018 which were included in the interim financial reports. The cumulative amount of expenditure at 31 July 2018 reconciled to total project expenditure per the Project Financial Report (Annex 1) that we were provided. Our opinion with regard to this objective is provided on pages 3 and 4 of this report. Refer to Annex IV for the DA reconciliation for the quarter to 31 July 2018.  Issue an opinion on whether the supplementary financial information for the Project is fairly presented, in all material respects. In addition to the Project Financial Report, we were provided with the interim financial reports for each quarter in 2017 and up until June 30 2018. This included expenditure by activity and sub-activity, analysis of operating expenses, cash flow forecast and a procurement monitoring schedule. This information was consistent with the Project Financial Report and Designated Account reconciliations. Our opinion with regard to this objective is provided on pages 3 and 4 of this report.  Issue a report with respect to the adequacy of the internal control structure of the implementing institution in regard to the Project. Our assessment of internal controls is included in Annex III and the Audit Report relating to this is provided on pages 5 and 6 of this report.  For this purpose, the report will be based on an assessment of internal controls, which will take place at mid-year for each auditable year of Project execution. This will permit early detection on any internal control issues to provide corrective feedback to the CPD prior to the carrying out of the end-year audit. Our assessment of internal controls is included in Annex III and the Audit Report relating to this is on pages 5 and 6 of this report.  Conduct audit of 100 percent of the expenditures claimed under retroactive financing, and provide separate audit opinion about the eligibility of those expenditures. There was no expenditure claimed under retroactive financing for the period. 23 Final Report on Financial and Systems Audit of the Caribbean Regional Communication Infrastructure Programme (CARCIP) ANNEXES 24 Final Report on Financial and Systems Audit of the Caribbean Regional Communication Infrastructure Programme (CARCIP) ANNEX I - CARCIP FINANCIAL REPORT (AUGUST 2011 – JULY 2018) Amount provided in Expenditure (Aug Expenditure (Jan Expenditure (Jan Expenditure (Jan Expenditure (Jan 2017 Budget Heading Balance contract 2011 – Dec 2013) 2014 – Dec 2014) 2015 – Dec 2015) 2016 – Dec 2016) – July 2018) USD XCD USD XCD USD XCD USD XCD USD XCD USD XCD USD XCD Component 1: Regional 205,449 552,289 2,996,310 8,054,680.95 3,450,000 9,274,290 - - 42,526 114,318 51,564 138,614 154,151 414,388 Connectivity Infrastructure Broadband Network Consultancy: 141,665 380,825 (83,518)* (224,512) 200,000 537,640 - - - - 141,852 381,327 Validation, design & tendering of works Draft legal and regulatory 61,924 166,464 134,897 362,629.96 200,000 537,640 - - - - 3,179 8,546 safeguards consultancy (60,554.00) Goods for IXP 20,000 53,764 - - 42,526 114,318 (22,526)* Government Network-Design, Supply & Installation of 550,000 1,478,510.00 550,000 1,478,510 - - - - PBX and associated LAN & (minimal) WAN infrastructure Installation of 2,330,000 6,263,506.00 new broadband 2,330,000 6,263,506 - - - - network Broadband Network: 100,000 268,820.00 100,000 268,820 - - - - Supervision of Installation Government 1,860 5,000 (12,543)* (33,718.84)* Electronic Mail 50,000 134,410 - - - - 51,564 138,614 9,119 24,515 Service Component 2: 745,519 2,004,103 421,784.03 1,133,840.78 ICT Led 2,000,000 5,376,400 17,810 47,876 179,727 483,142 97,431 261,914 537,729 1,445,524 Innovation Business Incubation Grants 20,088 54,000 (16,098)* (43,274)* 125,000 336,025 17,810 47,876 49,633 133,423 26,784 72,000 26,784 72,000 and Training Manager 25 Final Report on Financial and Systems Audit of the Caribbean Regional Communication Infrastructure Programme (CARCIP) Amount provided in Expenditure (Aug Expenditure (Jan Expenditure (Jan Expenditure (Jan Expenditure (Jan 2017 Budget Heading Balance contract 2011 – Dec 2013) 2014 – Dec 2014) 2015 – Dec 2015) 2016 – Dec 2016) – July 2018) USD XCD USD XCD USD XCD USD XCD USD XCD USD XCD USD XCD Business 320,590 861,810 484,235.05 1,301,720.53 1,050,000 2,822,610 - - 3,926 10,554 241,249 648,526 Incubation Grants Implementation and capacity (106,154.81) 61,915 166,441 (39,489)* building support 150,000 403,230 - - 11,992 32,237 61,393 165,038 54,188 145,669 * for Centre of Excellence Equipment for 20,460 55,000 (1,921)* (5,163.89)* Centre of 50,000 134,410 - - - - 9,254 24,877 22,207 59,697 Excellence Technical assistance for skills assessment (14,176)* (38,108)* 100,000 268,820 - - 114,176 306,928 and program development Skills 322,466 866,852 9,233.30 24,820.94 development and 525,000 1,411,305 - - - - 193,301 519,632 certification Component 3: 117,144 314,906 70,378.80 189,191 Implementation 550,000 1,478,510 105,505 283,619 89,976 241,874 71,896 193,272 95,100 255,648 Support Project 26,981 72,530 34,293 92,187 250,000 672,050 53,613 144,123 43,639 117,310 45,220 121,561 46,253 124,338 Coordinator Monitoring and 25,000 67,205 25,000 67,205 - - - - Evaluation 50,000 134,410 Social Safeguard 50,000 134,410 - - - - 27,038 72,684 840 2,258 Financial Audit 50,000 134,410 - - 7,374 19,823 14,748 39,646 Equipment to 13,543 36,407 25,362 68,178 support project 50,000 134,410 6,264 16,838 4,831 12,987 management Training for 4,278 CPD,ITSD, and 50,000 134,410 8,079 21,718 7,470 20,081 14,796 39,776 15,377 41,336 11,499 DTST Operating 31,934.6 49,581 133,285 (69,394)* 75,000 201,615 37,549 100,940 26,662 71,673 11,880 18,722 50,329 (186,546)* Expenses 4 Total 6,000,000 16,129,200 123,315 331,495 312,229 839,334 220,891 593,800 786,980 2,115,560 1,068,112 2,871,298 3,488,473 9,377,713 *A ‘no-objection’ was received from the World Bank for expenditure in excess of original budget. 26 Final Report on Financial and Systems Audit of the Caribbean Regional Communication Infrastructure Programme (CARCIP) Notes to the Financial Report 1. Accounting standards The financial report has been prepared on a Cash Basis and this accounting policy has been applied consistently throughout the period. Under the cash basis of accounting, revenues are reported on the income statement when the cash is received and expenditure reported when cash is disbursed. 2. Basis of measurement Expenses are recorded in the Financial Report on the basis of Historical Cost. 3. Functional currency The reporting currency is East Caribbean Dollars (XCD). 4. Estimates and judgements All expenditure is accounted for on a Cash Basis and has been classified under budgetary headings that aggregate all costs related to that category, the classification of which is a matter of Management's professional judgement. 27 Final Report on Financial and Systems Audit of the Caribbean Regional Communication Infrastructure Programme (CARCIP) ANNEX II – SOURCES AND USE OF FUNDS Sources of funding and revenue - amounts in USD Sources of funding and Budget Actual Actual Actual Actual Actual Total Actual revenue (Aug (Jan (Jan (Jan 2016 (Jan 2017 (Aug 2011 – 2011 – 2014 – 2015 – – Dec – Dec July 2018) Dec Dec Dec 2016) 2018) 2013) 2014) 2015) World Bank contribution 6,000,000 200,000 336,575 500,000 1,000,000 1,350,000 3,386,575.00 Total of funding and revenue 6,000,000 200,000 336,575 500,000 1,000,000 1,350,000 3,386,575.00 Summary by category / main type of expenditure - amounts in USD Actual Actual Actual (Jan Actual (Jan Actual (Jan Total Expenditure (Aug (Jan 2015 2016 – Dec Budget 2014 – Dec 2017 – July Project category 2011 – – Dec 2016) 2014) 2018) Expenditure Dec 2013) 2015) Component 1: 453,690 Regional Connectivity 3,450,000 - 42,526 51,564 154,151 205,449 Infrastructure Component 2: ICT 2,000,000 17,810 179,727 97,431 537,729 745,519 1,578,216 Led Innovation Component 3: Implementation 550,000 105,505 89,976 71,896 95,100 117,144 479,621 Support Adjustments made for ineligible expenditure (325)* / transaction fees Total 6,000,000 123,315 312,229 220,891 786,570 1,068,112 2,511,201 * Please note that adjustments were made to prior period expenditure as follows: amounts for $ 67.64 and $ 342.70 were refunds used to reduce expenditure documented to the Bank in 2016, and $85 was a cumulative amount of bank transaction fees from 2012 to 2016. 28 Final Report on Financial and Systems Audit of the Caribbean Regional Communication Infrastructure Programme (CARCIP) ANNEX III – SYSTEMS DESCRIPTION Cash and bank management A USD account (# 9027), known as the ‘Designated’ account, held with the Bank of St Vincent and the Grenadines was used to receive the International Development Association funds. Funds are drawn down periodically into the local XCD account (# 135715), also held with the Bank of St Vincent and the Grenadines, from where payments in local currency can be made. Designated Account reconciliations are performed monthly which reconcile with International Development Association funds received to the funds drawn down into the local account. Monthly bank reconciliations for the XCD account are also performed. We were provided with bank statements to evidence the receipts of the USD 500,000 and USD 850,000 from the International Development Association on 6 April 2017 and 2 May 2018. Accounting and Reporting The Ministry of Economic Planning was responsible for maintaining the underlying accounting records and prepared all reports. They use the accounting software ‘Peachtree’ which allows different projects to be set-up and maintained individually. Project expenditure is allocated against budget headings which are monitored using ‘control cards’. All computers and software used require password entry. The access / restrictions are set based on role and authority level. This is to strengthen appropriate segregation of duties. Expenditure In 2016 Incubation and Training grant agreements were signed between several Grantees and the Government of St. Vincent and the Grenadines. The majority of the expenditure reported relates to payments made by the Grantees and payments made by the Government on their behalf. Expenditure also includes payments to the consultants. We noted an issue where advances made by the Government to the Grantees were being claimed as expenditure. Please refer to financial audit finding no.2 for further details. A Manual has been developed to guide the process through Business Incubatees from eligible incubators to access Business Incubation Grants or ICT related Training Grants. This “Business Incubation and Training Grants Manual” which is dated 29 July 2014 has received the World’s Bank ‘no objection’ on 1 August 2014. This Manual is divided into four sections: 1. Business Incubation and Training Grants Manual Overview 2. Business Incubation Grants Policies and Procedures 3. Training Grants Policies and Procedures 4. Applicants Procedures The Manual sets up the steps to be followed from the application to the award process for Grants and also includes the procurement procedures for goods and services that the Grantees need to carry out. In this particular area we have noted several instances where we could not obtain evidence that at least three quotations were being requested and obtained by the Grantee as foreseen in the Manual and Grant Agreement. Please refer to financial audit finding no.1 and systems audit finding no.3 for further details. We have also noted some deficiencies in the administrative organisation of the Grantees documentation. Please refer to systems audit finding no.2 for further details. Purchases are generally initiated by a Project Officer who completes a purchase requisition. A purchase order will then be completed by one of the Administrative staff and approved by a more senior staff member, such as a Procurement Officer. Upon receipt of the invoice, a 3 way match is performed 29 Final Report on Financial and Systems Audit of the Caribbean Regional Communication Infrastructure Programme (CARCIP) (checking the invoice against the purchase order and receipt note) in order to verify the purchase. A payment voucher is then prepared by one of the Accountants, before being reviewed by a more senior Accountant, and sent to the Project Coordinator to approve. A bank order is then signed by two of four bank signatories: Deputy Director of Planning, Accountant General, Permanent Secretary or Senior Projects Officer. Procurement The following thresholds were in place (as per the Project Implementation Manual) in order to determine which procurement procedures should be followed: Expenditure Category Contract Value (Threshold) Procurement Method USD Thousands 1 .Works > 3.0 ICB 3.0-250 NCB < 250 Shopping 2. Goods > 250 ICB 50-250 NCB < 50 Shopping 3. Services - firms > 200 QCBS < 200 QCBS, QBS, FBS, LCS, CQ, SSS - individuals > 50 Comparison of 3 CVs < 50 We noted some deficiencies in the administrative organisation of procurement documentation. Please refer to systems audit finding no.1 for further details. 30 Final Report on Financial and Systems Audit of the Caribbean Regional Communication Infrastructure Programme (CARCIP) ANNEX IV – DESIGNATED ACCOUNT RECONCILIATION 2018 Designated Account Reconciliation Statement Amount USD 1 Total advanced by World Bank (or co-financier) 3,386,575 Less: Eligible expenditure for the period ended 31 March 2018 documented by World Bank 774,809 2 Less: Cumulative eligible expenditure for the prior periods ended December 31, 2016 documented by World Bank 1,226,554 3 Present outstanding amount advanced to designated account (1-2) 1,385,212 Balance of USD designated account per bank reconciliation statement as at period end July 31, 2018 852,842 4 Balance of project account per bank reconciliation statement as at period end July 31, 2018 56,494 5 Plus: Eligible expenditure for the current year documented after the period end 137,703 6 Plus: Total amount withdrawn and not yet claimed Reason: Supporting documents for expenditure not yet uploaded to client connection 7 Plus: Amounts claimed in previous applications not yet credited - Application no. Subtotal of previous applications not yet credited - 8 Less interest earned (7,028) 9 Total Advance accounted for (No. 4 through No.9) 1,040,012 10 Difference ( line 3 less line 9) 345,200 Represented by: 10 (b) Exchange loss (45) 10 (c) revenue from bid documents 695 10 (d) Ineligible expenditure identified in period to 30 July 2018 (155,685) 10 (e) Ineligible expenditure identified in period from 1 January to 31 December 2016 (184,566) 10 (f) Ineligible expenditure identified in period from 1 January to 31 December 2015 (125) 10 (g) Ineligible expenditure identified in period from 1 January to 31 December 2014 (68) 10 (h) Ineligible expenditure identified in period from 1 August 2011 to 31 December 2013 (5,406) (345,200) 31 Final Report on Financial and Systems Audit of the Caribbean Regional Communication Infrastructure Programme (CARCIP) 2013 2014 2015 2016 2017-2018 Cumulative at 31 Amount Amount Amount Amount Amount (USD) December 2018 (USD) (USD) (USD) (USD) Amount (USD) 1 Total advanced by World Bank (or co-financier) 200,000 336,575 500,000 1,000,000 1,350,000 3,386,575 Balance of designated account as at 31 December 77,549 103,345 394,680 624,442 909,336 909,336 2 2013 / 2014 / 2015 / 2016 and 30 July 2018* 3 Plus: amount of eligible expenditure 117,909 312,161 220,766 602,414 912,512 2,165,763 4 Plus: Total amount withdrawn and not yet claimed - - - Plus: Amounts claimed in previous applications not - - - 5 yet credited at date of bank statement (3,052) (7,028) (887) (451) (644) (1,994) 6 Less interest earned Total Advance accounted for (No. 2 through 1,818,797 3,068,072 194,571 415,055 614,802 1,224,862 7 No.6) 8 Difference ( line 1 less line 7) 5,429 (78,480) (114,802) (224,862) (468,797) 318,503 Represented by: 8 (a) Transaction fees and Bank Charges (23) (39) (23) 85** 8 (b) Revenue from bid documents - 695 - 695 8 (c) Refund from HTERP - 343 - 343 8 (d) Refund from PSIP for payment of Gasoline - - 67 67 8 (e) Bank balance carried forward 77,549 103,345 394,680 624,442 - 8 (f) Direct payment 11,538 14,748 26,286 Ineligible expenditure identified in period from 1 8 (g) August 2011 to 31 December 2016 (5,406) (68) (125) (184,566) (155,685) (345,849) (45) (45) 8 (h) Exchange loss on amount incurred in USD Total (5,429) 78,480 114,802 224,862 (468,797) (318,503) * This includes the balance of the designated account in USD and the balance of the XCD special account. Conversions from XCD to USD were made by using an exchange rate of 2.6882 ** This relates to transaction costs that were incurred between the period 2012 to 2016. A credit has been added here to net off the transaction costs which have been included as expenditure above in the year 2017-2018. 32