STATE EDUCATION PROGRAMME INVESTMENT PROJECT (SEPIP) FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER, 2019. STATE EDUCATION PROGRAMME INVESTMENT PROJECT (SEPIP) FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER, 2019. TABLE OF CONTENTS Corporate Information 2 3 Project Background 4 Report of the Independent Auditors 5 Statement of Financial Position 6 Statement of Receipts and payments 7 Statement of Equity 8 Statement of Cashflow 9-12 Notes to the Financial Statements STATE EDUCATION PROGRAMME INVESTMENT PROJECT (SEPIP) FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER, 2019. PROJECT BACKGROUND The State Education Program Investment Project (SEPIP) is a four-year World Bank assisted programme initiated in March 2013. The project is expected to act as a catalyst to the adoption of results/performance-based approaches by the Government, and scaling-up over time through its own funding. It is a pilot project financed by a US$150 million Specific Investment Credit to the Federal Republic of Nigeria, which in turn disburses part of the funds to the three participating States: Anambra, Bauchi and Ekiti, through subsidiary financing agreements. This supports the design and implementation of educational activities in the three participating States at basic and secondary education level for the period from March 2013 to October 2017. Additional funding amounting to US$100 million was secured in October 2017 which extended the project life to October 2019. The additional funding also brought in Maiduguri, Adamawa, Yobe, Gombe, and Taraba as participating states in addition to the existing trio of Anambra, Bauchi and Ekiti. As at 31st December, 2018, the program had taken off in four (4) North Eastern States of Nigeria. However, affter series of meetings with the World Bank, the Project was extended to close on 30th June 2020 as stated in Section IV B (2) in the Financing Agreement. The project supports five critical results (agreed performance indicators) captured by the five Disbursement-Linked Indicators (DLIs) namely: DLI 1: Teachers Development in Rural Areas DLI 2: Teacher Deployment in Core Subjects DLI 3: Assessment of Student Achievement DLI 4: Technical and Vocational Schools DLI 5: School-Based Management Committees (SBMCs) The Project consists of two components. These are: Component 1: A results-based financing component (about 83% of total credit)- aimed at supporting participating State Governments' program priorities through selected disbursement-linked indicators focusing on the achievement of tangible and measurable results over the project period as contained in the Project Implementation Manual. Component 2: Technical assistance component (about 17% of the total credit) - aimed at strengthening the delivering capacity and knowledge of participating States, other States interested in results-based approaches, Federal Ministry of Education, the Universal basic Education Commission, State Universal Basic Education Boards and concerned Educational Institutions, The new Project Development Objective (PDO) with the additional financing (AF) is to strengthen the educational system by supporting: i. Need-based teacher deployment; ii. School level management and accountability; and iii. Measurement of student learning in participating States. 3 1st Floor, Corporate 3 Dubai International Markel (Behind K Mmes Village IN "L l iKaura District Abuia. (CERTIFIED NATIONAL ACCOUNTANTS & TAX PRACTITIONERS) Tel: 0803 5974860 REPORT OF THE INDEPENDENT AUDITORS TO THE PRINCIPAL OFFICERS OF STATE EDUCATION PROGRAM INVESTMENT PROJECT-(SEPIPI FOR THE YEAR ENDED DECEMBER 31, 2019. We have audited the accompanying Financial Statements of the State Education Program Investment Project (SEPIP), which comprise the balance sheet as at 31st December, 2019, the Statement of expenditure (SOE) account, statement of cash flows and a summary of significant accounting policy and other explanatory notes for the year then ended. The Project Management Responsibility The Project Implementation Unit (PIU) coordinates the activities of the project and is as such responsible for the preparation of the Financial Statements in accordance with the relevant standards Issued by the Financial Reporting Council of Nigeria and the provissions of the State Education Programme Investment Projects and for such internal control as the Committee determines, neccessary to enable the preparation of Financial Statements that are free from material misstatements whether due to fraud or error. Auditors' Responsibility for the Audit of the Financial Statements Our responsibility is to express an opinion on these Financial Statements based on our audit. We conducted our audit In accordance with International Standards on Auditing which requires that we comply with ethical requirements, plan, and perform the audit to obtain reasonable assurance as to whether the Financial Statements are free from Material Misstatement. An audit Involves performing procedures to obtain audit evidence about the amounts and disclosures in the Financial Statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the Financial Statements, whether due to fraud or error. In making those risk assessments, the auditor considers Internal control relevant to the entity's preparation and fair presentation of the Financial Statements 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 entity's Internal Control. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the project's Financial Statements give a true and fair view of the Financial position of State Education Program Investment Project (SEPIP) as at 31st December, 2019. The Statement of Expenditure (SOE) are in agreement with the books of account and adequate supporting documentation has been maintained to support claims to the World Bank for reimbursements of expenditures incurred of which the expenditures are eligible for financing under the credit agreement. 335230305 ASSOCIATION F NATIONAL ACCOUNTANTS OF NIGERIA www.anan.Urg.nu For: Tayo Komolafe & Co. 29th June, 2020. Engagement Partner: Elizabeth Tayo Komolafe FCNA, ACTI, ACrF. Abuja, Nigeria. FRC/2013/ANAN/00000001408 STATE EDUCATION PROGRAMME INVESTMENT PROJECT (SEPIP) STATEMENT OF FINANCIAL POSITION AS AT 31ST DECEMBER 2019. 2019 2018 NOTES S N ASSETS: Non-Current Assets Property, Plant and Equipment 2 46,563,070 46,563,070 Development Expenditure A/C 3 1,204,209,510 963,658,482 1,250,772,580 1,010,221,552 Bank and cash equivalents 4 15,781,433 96,831,551 Account receivables 5 - 21,960,000 15,781,433 118,791,551 Total Assets 1,266,554,013 1,129,013,103 LIABILITIES AND NET ASSETS CURRENT LIABILITES Payables 6 - 7,715,433 Total Current Liabilities - 7,715,433 FINANCED BY: Schedules of IDA Credit / Funding 7 1,224,823,238 1,084,283,238 FME Contribution 8 15,570,000 15,570,000 Exchanqe Difference 9 26,160,775 21,444,432 1,266,554,013 1,121,297,670 Total Reserves and Liabilities 1,266,554,013 1,129,013,103 The financial statements on pages 5 to 8 were approved by the Board of Management Committee of the SEPIP on 2020 and signed on its behalf by: Kofi K. Akpan Abubakar A. Sambo Projects Coordinator Project Accountant The accounting policies and notes on pages 9 to 12 form an integral part of these financial statements. 5 STATE EDUCATION PROGRAMME INVESTMENT PROJECT (SEPIP) STATEMENT OF RECEIPTS AND PAYMENTS FOR THE YEAR ENDED 31ST DECEMBER, 2019. 2019 2018 N N Opening Balance Brought Forward: Special Account 76,640,571 21,381,747.45 Draw- Down Account 15,319,391 6,653,225.67 Exchange Difference - 4,848,875.00 91,959,961.50 32,883,848.12 Receipts: IDA Replenishment 162,500,000.00 375,880,331.65 Bank Interest received 108,420 148,495.35 254,568,382 408,912,675 Less: Expenses: CONSULTANCY Financial Management 10,293,380 14,141,700.00 Educational Development 8,160,000 5,570,000.00 Monitoring and Evaluation 58,349,669 71,613,875.50 Technical Service & Support - 8,869,000.00 Fiduciary Consultancy 630,000.00 76,803,049 100,824,576 TRAINING Educational Management Information System 600,000.00 Project Management - 114,082,232.75 Others 840,000 840,000 114,682,233 GOODS AND SERVICES ICT & Office Equipment - 6,030,570.00 Project Management Goods 690,000 Fiduciary Goods 18,280,375 18,970,375 6,030,570 OPERATING EXPENSES Project Management Operating 141,893,247 90,422,416 141,893,247 90,422,416 FINANCE COST Bank Charges & Commissions 280,277 121,330 280,277 121,330 Surplus of Receipts over expenditure 238,786,948 312,081,124 15,781,433 96,831,551 Represented by: Special Account 14,213,466 71,924,228 Draw- Down Account 1,567,968 24,907,323 15,781,433 96,831,551 6 STATE EDUCATION PROGRAMME INVESTMENT PROJECT (SEPIP) STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER, 2019. Exchange IDA Credit FME Funding Difference N N N N Balance as at 1st Jan 2019 11084,283,238 15,570,000 21,444,432 1,121,297,670 Received in the year 162,500,000 0 4,716,343 167,216,343 Balance as at 31st Dec 2019 1,246,783,238 15,570,000 26,160,775 1,288,514,013 7 STATE EDUCATION PROGRAMME INVESTMENT PROJECT (SEPIP) STATEMENT OF CASHFLOW FOR THE YEAR ENDED 31 DECEMBER, 2019. 2019 2018 CASH FLOWS FROM OPERATING ACTIVITIES Development Expenditure (240,551,028) (312,081,124) Adjustment for Non-cash Items: Exchange Difference 4716342.63 (11,233,921) Prior year Adjustment - 8,448,892 (235,834,685) (314,866,153) Other Adjustments to Reconcile Operating Profit to Cash from Operating Activities: Receivable - 21,960,000 Payable (7,715,433) 7,715,433 (243,550,118) (285,190,721) Cash Flow from Operating Activities: (243,550,118) (301,053,184) Cash Flow from Investing Activities: Purchase of Fixed Assets - (6,030,570) (243,550,118) (307,083,754) Cash Flow from Financing Activities: IDA Credit 162,500,000 375,880,332 (81,050,118) 68,796,578 Cash and Cash Equivalents at the beginning of the Year 96,831,551 28,034,973 Cash and Cash Equivalents at the end of the Year 15,781,433 96,831,551 STATE EDUCATION PROGRAMME INVESTMENT PROJECT (SEPIP) FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER, 2019. NOTES TO THE FINANCIAL STATEMENTS SIGNIFICANT ACCOUNTING POLICIES 1.1 Reporting Entity State Education Programme and Investment Project, was inaugurated in March, 2013, by the Federal Government to undertake Educational development programme in slated state of the geographical regions of Nigeria. The project office is located at Federal Ministry of Education Annex Building, Plot 24 Samuel Ademulegun Street, Central Business District Abuja. This report covers the activities of the project from 1st January 2019 to 31st December 2019. 1.2 Statement of Compliance The Financial Statements have been prepared in accordance with International Financial Reporting Standards ("IFRSs") issued by the International Accounting Standards Board (IASB). 1.3 Basis of Measurement The Financial Statements have been prepared under the historical cost convention, as modified by taken Properties, Plant and Equitments as part of the Project Cost. As such no depreciation was charged. 1.4 Foreign Currency Translation Foreign Currency are converted to Naira at the rates ruling at dates of the transactions. End of period balances in foreign currency are converted to Naira at the rate ruling at the last date of the period, while gains and losses resulting from such conversions are aggregated and recognized in the period they arise. 4 ��� � ; Q 11'� 11 ° ь �° ь ь � ь � � 4k �j 11 ° 11 11 ��.ь �I � � � � � � � I� � �� г ь f 1 1 и О� lA �� � I' � 1 � 1 1 1 � I� � �� � � � � �� �� _� О i О i i 9 р 1) � 11 � � 1 1 ° 1 1 1 1 1 ! ° �) ° II � о Э1 11 ii� 1� р �� i i i � 11 G 11 1 1 1 1 ° II ^ 11 �' � � 1 N 1 1 1 N �� N �� � 1 1 1 1 л 1 1 1 1 1� �У С~1. о �о � � � ,р11�11 W и � ь i� i ь ь i ь i '° (4 � 11 (/� i г•1 i� i i i °Л 1i 11 г� 11 � 11 l1'} ь 1.� i ь ь LГ! � � 11 � i� i i i м11СLэ11 ( � г ь ь ь ь � 4+ i� "� 1� 1 1 1 '� �� � �� LL1 а � � � � ^ � ь ь ь ь � л � � � ° i° i i э ° П'° 11 . а � � ;�; � � �1�,�11 � � � ° 1 � °, j 1 1 � i � ° �� ° �� �..�,,, г � ,-� i г1 й i i г1 II � II � ш (� � z'N ;+�; � ; Nii{�i� € � �,/ '� �� � i� i i i т�-r II '"i II � � и ш i i � W г ь ь ь н ш � о � о � � � Q 41 Q 11 р ь О ь ь ь о Сй т W о ь о ь ь � ь � �j 11 Q 11 W ie ` � � �-ь j g-{ 1 j j г1 I � ,r-d � � � N Га гь-о ;и; ; ; �иссэи � о � � � �� � ; � � 9 ; � �� � �� � � � ,.� � � ; i С �и-" � '"' _ � � U' ar с � g ,рр �1 с�. ++ � � � � а ш W � � .8 ` Q Q цi LL" "' а~ � г°ц � rn } пQI п°i � И � _ = с гv а, � � Q � � � � � � Е- � с . � b � � - . �ari Q +,�'�L � �`,� Е lsE � С� м � ci го � � ��+ га L v�� � � и.1 � � ' а � -о а�"'i � � � ш �е ш � � { f� �г' R7 � и © 7�.� � С} СЭ � i�. W � W W ' г-1 Q ,у_г � П �, -ь-ч �-1� а--ь Н � р ал -�. .� � i' а � �' ,� 0° ,� ,� '' � Z г � р й,"i � м tt ,-ь ,га м .+-+ м м � ~ �"� ш (� L Q .,� -Сз .ь_ь Gi .1✓ � +.+ � +� .1-+ , и и� г�, о. г� �t ¢ Q д�с с� �г г а а ; �, N ; г STATE EDUCATION PROGRAMME INVESTMENT PROJECT (SEPIP) FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER, 2019. NOTES TO THE FINANCIAL STATEMENTS (CONT-D) Notes 2019 Notes Ref. 2018 3 Development Expenditure Consultancy 11 78,675,548 100,824,576 Training Programmes 12 840,000 114,682,233 Goods and Services 13 18,970,375 6,030,570 Operating Cost 14 142,173,525 90,543,746 ---------------- ---------------- 240,659,448 312,081,124 Less Other Income 15 (108,420) (148,495) Net Development Expenditure During the Year 240,659,448 312,081,124 Acc. Development Expenditure B/forward 963,658,482 651,725,854 ---------------- ---------------- 1,204,209,510 963,658,482 4 Cash and Cash Equivalents Special Accounts (USD) @ Year End Translated to Naira @ f4325/$l f4305/$l Special Accounts (Naira Equivalent) 14,213,466 71,924,228 Draw-Down Account- Naira Account 1,567,968 24,907,323 -------------- --------------- 15,781,433 96,831,551 5 Account Receivables baiance as at ist January 21,960.000 135,044,954 During the year (IDA Credit) - (135,044,954) Keversai (21.960,000) ZU16 WA creclit Keceiveci in ZU19 21,960,000 --------------- ----------------- 21,960,000 6 Payables Accruals 7,715,433 --------------- ---------------- 7,715,433 7 Schedules of IDA Credit Funding Balance Brouaht Forward 1,084,283,238 813,038,968 Prior year Adjustments (21,960,000) 8,448,892 Addition in the vear 162,500,000 240,835,378 Reimbursment of 2018 received in 2019 - 21,960,000 ---------------- ---------------- 1,224,823,238 1,084,283,238 8 FME Contribution (Motor Vehicle) 15,570,000 15,570,000 9 Exchange Difference 26,160,775 21,444,432 STATE EDUCATION PROGRAMME INVESTMENT PROJECT (SEPIP) FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER, 2019. NOTES TO THE FINANCIAL STATEMENTS (CONT'D) 2019 2018 10 Income Receipts 11 Consultancy Teachers Management Consultancy Technical Service & Support - 630,000 Financial Management 10,293,380 14,141,700 Educational Development 10,032,499 5,570,000 Monitoring and Evaluation 58,349,669 71,613,876 Fiduciary Consultancy - 8,869,000 78,675,548 100,824,576 12 Training Programmes Educational Management Information System 600,000 Project Management Training - 114,082,233 Project Management Others 840,000 8,948,984 Project Management Others Reserval - (8,948,984) 840,000 114,682,233 13 Goods and Services ICT & Other Equipment - 6,030,570 Project Management Goods 690,000 Fiduciary Goods 18,280,375 18,970,375 6,030,570 14 Operating Cost Project Management Operating Cost 141,893,247 90,422,416 Bank Charges 280,278 121,330 142,173,525 90,543,746 15 Other comprehensive income Interest Received 108,420 148,495 108,420 148,495 16 Comparatives For meaningful comparatives some of the previous year's figures have been re- stated. 12